Economy Update

Robert Jenrick Excerpts

Thursday 26th May 2022 Commons Chamber

[Robert Jenrick (Newark) (Con)]

There were two tasks for the Chancellor today. The first was to provide support for the poorest households, who are facing a period of extreme hardship, and on that front I think he has made all the right judgments. Direct payments are simple, easy to administer and non-recurring; the experience of doing something not dissimilar in the United States was generally positive. The second task, however, is to inject some confidence into the economy, which is facing a recession or a long period of stagnation. On that front, does he agree that we need a steady hand from the Bank of England, so that there is no further quantitative easing, with its inflationary pressures? We urgently need the supply-side reforms that he alluded to, we need delivery of the energy plan he and the Prime Minister have set out and we need to think about the tax burden in the years ahead. The Chancellor’s announcement today is heavily redistributive; that is a good thing for hard-working families and the vulnerable, but it is being paid for by higher taxes on higher earners and businesses, and in the long term we need to address that.

[Rishi Sunak]

I agree wholeheartedly with my right hon. Friend. He makes excellent points, and he can expect me and this Government to deliver on all the things he thinks are important.

Financial Statement

Robert Jenrick Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

I think it wrong to suggest that there has been a VAT windfall. If the hon. Lady looks at the numbers in the OBR forecast, she will see that its projection for VAT receipts in the forthcoming year is lower than its previous projection in October. We are helping working families, with a £6 billion tax cut which will put £330 into the pockets of 30 million workers across the United Kingdom.

[Robert Jenrick (Newark) (Con)]

I think that when my right hon. Friend gets back to his office, that portrait of Nigel Lawson will be looking down at him admiringly. This is a Conservative plan that we can all get behind. It rewards work, it gets the deficit down, and it incentivises investment from businesses rather than penalising them with windfall taxes.

As my right hon. Friend knows, energy prices are very volatile, so he is right to stand by the £9 billion package that he introduced previously and wait until the next update on the energy price cap in the late summer. If it does indeed show that energy prices are going to rise substantially, that will have a big impact on the poorest households. Will my right hon. Friend assure us that he will keep this matter under review, and will consider further measures if necessary to protect those households?

[Rishi Sunak]

I thank my right hon. Friend for his warm words of support, and I can reassure him that we keep everything under review. We have stood by the British people over the past few years, and we will continue to stand by them. It is thanks to the responsible decisions of this Government that we are able to provide the support that is required when the times call for it.

Public Service Pensions and Judicial Offices Bill [Lords]

Robert Jenrick Excerpts

Report stage
Tuesday 22nd February 2022 Commons Chamber

I very much look forward to hearing the Minister’s response to the various issues that I have raised today. Although we have some outstanding concerns with the Bill, which I have outlined, we do broadly support what the Government are attempting to do and we recognise the need to put the remedy in place as quickly as possible.

[Robert Jenrick (Newark) (Con)]

I rise to speak to new clause 1, which is in my name. The new clause empowers the Secretary of State to issue guidance to authorities that administer public sector pensions schemes that they may not make investments that conflict with the United Kingdom’s foreign and defence policy.

The new clause will resolve a long-standing issue that arose out of the Public Service Pensions Act 2013 and the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016. The issue was whether the Secretary of State had, under their general power to issue guidance provided under the 2013 Act, the ability to guide those who administer pension schemes, particularly local government pension schemes, away from making investment decisions that were contrary to the United Kingdom’s foreign and defence policy.

In 2020, the Supreme Court found by a split decision that the 2013 Act did not confer on the Secretary of State the necessary power to issue that guidance. The purpose of the new clause is to change that by explicitly laying out in law the Secretary of State’s power to offer the guidance to administrators of pension schemes within the public sector, including the local government pension schemes, that investment decisions—by which I mean both investments into a position and divestments from a position—should not conflict with UK foreign and defence policy.

There are multiple reasons for doing that. First and foremost, public service pension schemes that are paid for by the taxpayer by one means or another and underwritten by the state are clearly the preserve of the UK Government and, as such, it is perfectly legitimate that the UK Government have a say in regulating how public pension schemes manage the money that is provided to them by we the taxpayers of the country.

[Peter Grant (Glenrothes) (SNP)]

May I just probe the right hon. Gentleman’s last point a wee bit? My bank account is stuffed full of what was previously taxpayers’ money. Neither I nor my wife have had any significant income for years that did not come one way or another from the taxpayer. Is he suggesting that the Government should have some say as to how the bank can invest my money to make sure that I get it back when I need it? Is he suggesting that the private pensions that I am lucky enough to have should be subject to Government direction as to where they do and do not invest?

[Robert Jenrick]

I shall come on in a moment to my own personal views with respect to boycott, divestment and sanctions, but this new clause has no bearing on the actions of private citizens. This is about public sector pension schemes. The broader issue, which I will mention in a moment with respect to tackling BDS within public institutions and the public sector, is all about the public sector; it is not about limiting the freedom of speech or action of the individual.

[Dr Matthew Offord (Hendon) (Con)]

Will my right hon. Friend give way?

[Robert Jenrick]

I would like to make some progress, but I will give way.

[Dr Offord]

Is my right hon. Friend aware that, only this morning, Hertfordshire County Council was considering a petition submitted by individuals to ask it to divest from its pension scheme? Does he agree that it is the responsibility of elected representatives to ensure that pension schemes have the best and most profitable outcome to allow the members of that pension scheme to receive the best possible income?

[Robert Jenrick]

Yes, I do, and I will give some other examples of local authorities considering the same actions that my hon. Friend describes.

The argument that I wish to advance is that, for too long, we have seen public pension schemes pursue pseudo foreign policies.

[Andy Slaughter (Hammersmith) (Lab)]

Will the right hon. Gentleman give way?

[Robert Jenrick]

I will make a bit of progress and then I will return to the hon. Gentleman.

All too often, the foreign policy of these public pension schemes is, I am afraid, exclusively focused on re-writing the UK’s relationship with the world’s only Jewish state, Israel.

[Christian Wakeford (Bury South) (Lab)]

Will the right hon. Gentleman give way on that point?

[Robert Jenrick]

I will come back to the hon. Gentleman. I appreciate his interest.

The latest example of the politicisation of public pension schemes is by Wirral Council, which is currently considering realising almost £5 million-worth of investments in seven companies. This pet project of a small minority who seek to hijack the money of hard-working taxpayers for their own political ends is of no interest to the public pension scheme holders of the Wirral, or indeed, I suggest, to the public pension scheme holders and rate payers of Hertfordshire.

The politicisation of public sector pension schemes, such as that seen by Wirral Council, is also to the detriment of the UK Government’s relations with states abroad. Supreme Court Justices Lord Arden and Lord Sales established in their judgments that, because the schemes are managed by councils that are part of the machinery of the state, receive taxpayer funding and are underwritten by state regulation outlined in the 2013 Act, they are liable to be identified with the British state. It is perfectly reasonable for an individual, an organisation or a nation abroad to look to these decisions and believe that they are the British state’s intentions. It would be wrong that, owing to a minority of an extreme and well-organised clique, the UK Government’s relationship with an ally has the potential to be undermined. Ultimately, central Government must reclaim their constitutional responsibility for the conduct of the UK’s international affairs. It is for this House to be the place in which those decisions are debated, as I am sure we will see later today. Public service pension scheme trustees must return to their primary duty of achieving maximum returns for scheme members.

[Andy Slaughter]

The right hon. Gentleman said earlier that this is public money. He will be aware that the Supreme Court, in making a judgment on the previous guidance, specifically said that it is not public money when it is employee or employer contributions; it comes from the rightful employment of the employees themselves. Why does he think that his new clause is different from that? As he has gone on to the specifics, while I am not talking about BDS here, does he think there is a possibility that decisions on investments, say, in illegal settlements, which the Government advise against on economic grounds, could also be caught by his new clause?

[Robert Jenrick]

The hon. Gentleman makes an important point. The Supreme Court raised two central arguments. One was whether the 2013 Act explicitly gave the Secretary of State the power to issue guidance with respect to investment decisions that conflicted with UK foreign and defence policy. The second point that some Supreme Court Justices raised was whether it was within the remit of the Secretary of State to speak to all public service pension schemes, including those that are funded and unfunded, particularly the Local Government Pension Scheme.

This new clause explicitly provides the Secretary of State with the power to issue that guidance. Were it to pass, and were this ever to be litigated and reach that court, I expect that the Supreme Court Justices would see clearly the intention of this House, which is that the Secretary of State should be able to issue guidance and that that guidance should be applicable to all public service pension schemes. I hope that answers the hon. Gentleman’s point, which is an important one for us all to be clear on if the new clause is passed.

The new clause does nothing to stop private individuals making individual choices about their consumer habits. They remain at liberty to invest in or divest from, purchase from or boycott whichever companies they wish and for whatever reason they so choose. It does, however, make a distinction between the liberties of the private individual and the obligations of public bodies in receipt of public money, and it is grounded in the principle that public money should be spent in accordance with the wishes of the UK Government as expressed by this House.

[Christian Wakeford]

I am one of those fortunate Members who sit on a local pension board. One of the issues that is often feared, particularly by smaller Jewish communities, is that, rather than focusing on community cohesion, it is about bringing in foreign policy matters that often bring division, when they really want to be settled and to be able to progress and thrive within their local community. Does the right hon. Gentleman agree that the worst thing that could happen would be for the BDS movement to have a say within pension boards and pension funds, and that the best thing we could do is to accept this new clause and bring stability to Jewish communities across the country?

[Robert Jenrick]

I am grateful to the hon. Gentleman for his support for this new clause, as I am to all those hon. Members across the House who have indicated theirs, and for his long-standing interest in the issue. He makes an extremely important point.

Let me be clear: it should not be assumed that someone expressing their support for Palestine is antisemitic. Of course that is not the case. Many are genuinely moved by the cause of Palestinian statehood and are concerned at Israeli settlements and the actions of the Israeli Government. It is the policy of this Government to pursue a two-state solution. However, one does not have to look very hard to find a pattern of antisemitic behaviour in connection with campaigns promoting a boycott of Israel.

Successive studies have shown that the single best statistical predictor of anti- Jewish hostility is the amount of BDS activity, which comes as no surprise when one inspects the ethical inconsistency within the movement. Why does its concern for humanity, and for the welfare of Muslims in particular, expire at the Jordan river? The BDS movement is mute on neighbouring Jordan or Lebanon, where the Palestinian minority really are second-class citizens, and fell silent when thousands of Palestinians were killed at the hands of the murderous Assad regime.

There has been no call for a boycott of ICICI Bank in response to the egregious human rights abuses being committed against Muslims in India, or for divestments from Huawei following the verdict by an independent tribunal in London that a genocide is being committed against the Uyghur Muslims. That selective concern for humanity, and specifically for the welfare of Palestinians, poses some alarming questions. Why is Israel held to a higher standard than every other country in the world?

[Andrew Percy (Brigg and Goole) (Con)]

rose—

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[Stephen Crabb (Preseli Pembrokeshire) (Con)]

rose—

[Robert Jenrick]

I will give way to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and then to my hon. Friend the Member for Brigg and Goole (Andrew Percy).

[Stephen Crabb]

My right hon. Friend is making a powerful speech and I commend him on how he has gone about bringing forward this new clause to close a specific loophole on public sector pensions. In the context of his point about the wider boycott, divestments and sanctions movement, does he agree that it is a pernicious movement that singles out Israel time and again, to undermine the UK-Israel bilateral relationship and the very notion of the integrity of the Israeli Jewish state? I very much hope the Government will accept his new clause, but does he also accept that there is a need for a broader piece of work by the Government to address the BDS movement in its entirety when it comes to public sector choices?

[Robert Jenrick]

My right hon. Friend makes a series of powerful points, which I entirely agree with. In particular, I agree that, were this new clause to pass, it should merely be the beginning of a wider effort to tackle BDS within the public sector and that we as the Government should make good on our manifesto commitment to a full BDS Bill, which I hope will be in the forthcoming Queen’s Speech.

[Andrew Percy]

My right hon. Friend is making an excellent speech. The founder of the BDS movement is, of course, somebody who denies the right of Israel to exist—an antisemitic act in and of itself, given that Israel exists in international law. My right hon. Friend says that BDS is the biggest single indicator of antisemitism in this country; I take him back to last year, where we saw the highest number of incidents of antisemitism ever recorded in the UK. The biggest month for those was May last year, following the flare-up of the Israel-Gaza issues. That is a worrying trend, and one that is in part promoted by those who do exactly as he says: single out Israel for treatment they do not apply to other countries and support the BDS movement. That is why we must see this new clause passed and why the Government must move forward quickly on those other issues.

[Robert Jenrick]

I am grateful to my hon. Friend for his intervention and for the work he does on antisemitism. He is absolutely right that we cannot stand idly by and see levels of antisemitism in this country continue to rise. We must take every opportunity to tackle the issue, and this is one way that we can do so—there are many others. None of us wants to see month after month pass with the Community Security Trust reporting ever higher numbers of egregious antisemitic attacks in this country.

I will make two final points. First, the BDS movement does absolutely nothing to advance the cause of peace. It is because it sees Israel as a colonial endeavour that it views the Israel-Palestine question as an insurmountable framework of conflict between the occupiers—in their eyes—the Israeli Jews, and the occupied—in their eyes—the Palestinian Muslims. That is why it apportions blame for the conflict entirely at Israel’s door and denies the agency of other actors such as Hamas and Hezbollah, both of which we as a country have rightly chosen to proscribe. The sad reality is that many who practise BDS have no intention or interest in brokering a two-state solution.

[Scott Benton (Blackpool South) (Con)]

My right hon. Friend is making an excellent speech and I commend him on tabling this new clause. Does he agree that the BDS movement has consistently opposed efforts from Israelis and Palestinians to negotiate a peaceful settlement? He referred earlier to Wirral Council and its pensions committee; does he agree that it would be entirely inappropriate for a local authority to be judge and jury on such complex matters as where businesses should and should not invest in contested territory in the middle east?

[Robert Jenrick]

I agree strongly with both my hon. Friend’s points. On his second point, the motion before Wirral Council is to ask its pensions officer to be the arbitrator of which business it should or should not be investing in within Israel and within settlements. Pity this poor individual, who, instead of going about his normal work as a respectable, hard-working local government officer, must suddenly spend hours, days, weeks or months attempting to understand the intricacies of the Israel-Palestine question and provide advice to a committee of local councillors. It is frankly an absurdity and an abuse of that individual. We should not be seeing this. These questions should rightly be taken forward by the United Kingdom Government.

BDS is ultimately yesterday’s war. In the middle east today things are rapidly changing, and thank goodness for that. As a result of the Abraham accords, we see Arab nations—Gulf states—coming forward to recognise the state of Israel and work with it through science, technology, education and commerce. If Bahrain, the United Arab Emirates, Jordan, Egypt and other nations can do this—even those countries, such as Saudi Arabia, that have not explicitly recognised the state of Israel but are none the less working with it on security matters and other issues—then we as a country should not be tolerating this kind of activity, and certainly not within the public sector. I urge hon. and right hon. Members across the House to support the new clause. I am grateful to the Government for indicating their support. I hope that in the Queen’s Speech later in the spring we will see a wider BDS Bill that makes the UK one of the first countries in the world to really grapple with this issue.

[Peter Grant]

As I said on Second Reading and in Committee, the SNP supports the intention behind this Bill and we will support it on Third Reading. The intention is to clear up a mess of the Government’s making. I also repeat that, as I said in Committee, I do not have any doubts at all about the sincerity of the Ministers who have led for the Government at various stages of the Bill. I am convinced that they want to get it right and to finish up with an Act that is as fair to everyone as it is possible to be. However, my concern with the Bill currently before us is that even after the Government’s amendments are added in, sizeable numbers of current or former public sector employees will lose out. Given where we have been forced to start from and the scale of the mess that the Government made of this previously, I am not sure that it would ever be possible to produce a Bill that would be fair to absolutely everyone, but the Bill as it stands can still be improved. To that end, we will support such amendments as Opposition Front Benchers want to press to a vote, particularly new clauses 8 and 9.

One of the issues I raised on Second Reading has certainly come to pass: the extraordinary number of amendments the Government had had to table to their own legislation during its passage through the House of Lords. We now know that including the 61 amendments they tabled in Committee and the 28 further amendments tabled today, by the time the Bill gets its Third Reading later on the Government will have had to amend their own legislation no fewer than 212 times. In fact, Members who attended the Bill Committee will have seen the spectacle of the Government tying themselves in knots trying to remove two entire clauses from the Bill and replace them with two entirely new clauses. It was only the speedy intervention of the Clerks and the Chair that prevented the Government from presenting us with a Bill that had all four clauses included despite the fact that some of them were completely contradictory to the others. Eventually the Government had to whip their own Members to vote down two clauses that the Minister had already moved, presumably by mistake.

That incident served only to highlight what many of us on the Opposition Benches have been saying from the beginning—that the Government still cannot reassure us that they are genuinely fully in control of this Bill. I worry that they are very quickly running out of last chances to put it right. There is still a danger that the Bill that receives its Third Reading later today will have flaws and weaknesses that neither the Government nor anybody else have spotted yet. Most of today’s Government amendments are part of the process of picking up flaws or ambiguities in the original Bill, and we will not oppose them. We have some concerns about new clause 7, which provides for a lessening of parliamentary scrutiny in some cases. The Minister has not yet convinced me that that is an appropriate thing to do. I hope that when he winds up he will explain why new clause 7 is appropriate and why, in some cases, parliamentary scrutiny should be diluted in any way.

As I indicated earlier, we will support new clauses 8 and 9 in the name of the hon. Member for Hampstead and Kilburn (Tulip Siddiq). New clause 8 would provide a means of compensating scheme members who, through no fault of their own, stand to lose out as a result of the Bill. The Bill rights a wrong for a very large number of people in public pension schemes but goes in the opposite direction for some, and we should not forget about them. The new clause does not commit the Government, or indeed the scheme employers, to any additional expenditure, but it would require the Chancellor of the Exchequer at least to recognise that this is an issue and to look at whether there are realistic and reasonable ways of resolving it.

New clause 9 would require the Government to review how the Bill operates in the real world—as opposed to the assessment, as with any Bill, before discussions on it began—with regard to equalities. Given how many substantial changes the Government have already had to make to the Bill, it is prudent to accept that, once it comes into force, it might have consequences that the Government have not foreseen, which the new clause would attempt to protect against.

New clause 1, in the name of the right hon. Member for Newark (Robert Jenrick), is a different matter altogether, and the SNP is minded to oppose it. We have heard some of the arguments in favour of it—they are similar to comments made on Second Reading—which simply do not wash. I will not get into an argument now about the BDS movement. If the Government genuinely think that that organisation is a threat to peace and stability in the middle east or elsewhere, they could bring forward legislation to address it—they have had over two years of this Parliament to do so, and they still have time—but this is not the Bill for that.

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[Peter Grant]

I certainly cannot agree with the right hon. Gentleman. As I have made perfectly clear, how the British system works is that Ministers have the authority to take policy decisions, and Parliament is right to hold Ministers to account for that. Parliament has the ultimate right to decide what becomes law. If nobody else is allowed to discuss it, and councils are not allowed to express views in the interests of the people they are there to represent, the whole system starts to fall flat on its face.

It is as plain as the nose on my or anyone else’s face that decisions on foreign policy can easily have a disproportionate impact on residents in some parts of these islands. Certainly, decisions on defence policy can have a significantly greater impact on some places than others. Remember that councils are directly democratically elected by local people to represent their views. Are we suggesting that they should not be allowed to debate matters of foreign policy simply because they do not have the right to take the final decision? If that is what Government Members are saying, why is it that almost every Tory MP who pops up on their hindlegs at Prime Minister’s questions to ask a planted question invites the Prime Minister to interfere in local democratic decision making? We have had two examples today, with the right hon. Member for Newark expressing his views on possible decisions by councils that, with respect, are nothing to do with him, because they are not the council area he represents.

I do not know whether Wirral Council or Hertfordshire will take the right decision, but I am happy to trust the good people of the Wirral and Hertfordshire to sort out councillors who get it wrong too often. That is what local elections are about. I do not like to see the Government, having substantially stripped back the powers of local authorities, then deciding to give local authorities the power to take decisions they agree with, but taking away the power for local authorities to do things that might go in a different direction.

Among all this, we are losing sight of the vital fact that as a matter of law, the trustees of a pension fund are a completely different organisation and a completely different entity in most cases from the organisation whose current and former employees are members of that fund. My wife has for many years been a trustee of the Fife Council pension fund, as well as having clocked up nearly 30 years as a councillor. The decisions that the trustees of the pension fund make are completely different from the decisions many of the same people will take as members of Fife Council. Nobody believes that the decisions of the pension fund reflect the views of the council; the council is not allowed to try to whip pension trustees, for example.

[Robert Jenrick]

Will the hon. Member give way?

[Peter Grant]

I will give way once more, but I am aware of the time.

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[Robert Jenrick]

As a matter of law, what the hon. Member is saying is not correct. Pensions within the public sector, as elsewhere, are regulated. They were regulated by the Public Service Pensions Act 2013, and they will be regulated by this Bill. He has been speaking for more than 15 minutes, and it is not clear to me whether the SNP is in favour or against BDS. It is important that he makes clear his position.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am keen that we do not just have a whole debate about BDS. I want the amendments to be addressed, and there are a few other speakers trying to get in.

Public Service Pensions and Judicial Offices Bill [Lords]

Robert Jenrick Excerpts

2nd reading
Wednesday 5th January 2022 Commons Chamber

[Robert Jenrick (Newark) (Con)]

I welcome the Bill and I am pleased to make a few brief comments. Like my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), I was involved in its preparation and followed the consequences of the McCloud judgment as a Treasury Minister and as Secretary of State for Housing, Communities and Local Government.

I welcome the fact that the Bill will now provide certainty and enable the important reforms that began with Lord Hutton’s report and were enacted in the Public Service Pensions Act 2013, the regulations that subsequently followed and the reforms of 2015. It will help to enable those changes to proceed and will enable all concerned to be given the confidence and certainty that they deserve.

Again like my right hon. and learned Friend, I welcome the changes to the judicial age of retirement. In the early 1990s, when I think there was no retirement age, it was right to bring in a retirement age of 70. Senior members of the judiciary, such as Lord Denning, retired at 83. It was then right to bring in a somewhat lower retirement age but of course, to all our benefit, the world has moved on and we are living longer, so it is right to have a somewhat later retirement age than was legislated for in the 1990s.

The primary reason that I wanted to speak in today’s debate was with respect to an issue that arose out of the 2013 Act, which was ultimately tested by the Supreme Court when I was Secretary of State in 2020. The issue was whether the Government, acting through the Secretary of State at the Ministry of Housing, Communities and Local Government or its successor Department in this case, have the power to issue guidance to those who administer certain public service pension schemes, primarily funded pension schemes, the most prominent of which is the local government pension scheme, to guide those trustees and administrators away from making investment decisions that are contrary to the United Kingdom’s foreign and defence policy.

The reason why this came to court in 2020 was that when it was brought forward, initially by my predecessor, now the noble Lord Pickles, and his successor, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), the guidance issued by the Department was designed to guide local councils, primarily, away from adopting boycott, divestment and sanctions policies against Israel through their pension funds, although of course other examples were occurring at the time and might occur in future.

The Department issued guidance at that stage that was entirely within the spirit of the then law in 2013, but was subsequently found by a split decision in the Supreme Court to overstep the Secretary of State’s legal powers. The guidance was, I think, perfectly valid; it said that “there are certain circumstances where the trustees of the pension schemes should be careful not to make decisions which would conflict with UK national foreign policy and defence policy.”

Two issues arose when this was tested in the Supreme Court, in a case brought by a campaign group. The first was that some members of the Supreme Court felt that the 2013 Act itself did not give the Secretary of State the necessary powers. The Act clearly states that the Secretary of State can bring forward guidance on how the fund should be administered, but there was perfectly legitimate debate within the Supreme Court about whether the guidance went sufficiently far to cover this particular point. Three of the Supreme Court judges deemed that it did not, while two had a dissenting view.

There was a second, not totally unrelated point made: some members of the Supreme Court were of the view that some of the pension funds in question were not within reach of the British Government, that they were essentially not part of the British state, and that by contributing to a pension fund, a civil servant or an officer of a local council is contributing to a pension scheme that is ultimately outwith the reach of a Secretary of State’s issuing such guidance. That, again, was subject to debate and conflicting views within the Supreme Court, and Lady Arden and Lord Sales dissented.

Both judges took the view, which I agree with, that a scheme such as the local government pension scheme is liable to be identified with the British state for a number of reasons, not least the fact that ultimately the money to pay for it is coming from the taxpayer, but also because it is underwritten by the taxpayer and by statute. Those looking in from afar, for example in a foreign country such as Israel, would be likely to deem a decision by the trustees of one of these pension funds to reflect in some respects the British Government and the views of the British state.

The outcome of the Supreme Court decision in 2020 was that the rule and guidance issued by the then Ministry of Housing, Communities and Local Government was disapplied. I would argue that the time has come, in this Bill, to make the modest change that we need in law to ensure that we can rectify that issue and change the situation. A small amendment to the Bill would give the Secretary of State the powers he or she needs to issue the necessary guidance. That was essentially the message that came from the Supreme Court: if the Government wish to do this, they must ensure the law is clearer than it was in 2013.

I am here to suggest to my right hon. Friend the Chief Secretary that a small amendment be made to the Bill to ensure that that can happen. The Government took this matter to the Supreme Court; unfortunately they lost, and of course we respect the Court’s decision, but the matter is able now to be rectified with a small technical amendment. It is one that I think is appropriate. It is the Government’s policy that we do not support BDS. The Government wish to bring forward a Bill on BDS later in this Parliament, and I hope that they do so, but this is the appropriate place to make the amendment because this is, after all, the successor Bill to the 2013 Act in which this issue arose.

It is important to say why we would want to do this. BDS is a divisive matter. It damages and undermines community cohesion and sows distrust, and we do not want to see local councils trying to influence foreign policy decisions, which are properly the purview of the United Kingdom Government. This is not about politicising public sector pensions, as was implied, I think, by one member of the Supreme Court; it is precisely the reverse. It is ensuring that public sector pensions, which are ultimately paid for by us all as taxpayers, are not politicised, and that political judgments do not come into decisions on the types of investments that are made by these funds.

I will conclude my remarks and leave the matter with my right hon. Friend the Chief Secretary, and I hope that, between us and other interested Members in all parts of the House—there are a significant number—we can find a resolution to this issue, which has been hanging around now for several years, between 2013 and that judgment in the Supreme Court a year and a half ago, and put it to bed.

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[James Cartlidge]

Perhaps in the days without masks it would have been easier for me to tell whether my right hon. and learned Friend was actually intervening, but he is absolutely right.

I can answer the question posed about the lifetime allowance by the Chair of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), and by the shadow Chief Secretary, the right hon. Member for Wolverhampton South East (Mr McFadden). To clarify, the legacy judicial pension scheme is unregistered for tax purposes, so the lifetime allowance tax charge does not apply to accruals under that scheme. The new judicial pension scheme, to be introduced from 1 April, will also be unregistered for tax purposes, so no lifetime allowance tax charge will apply to that scheme either. I hope that answers the question, which is a very important one.

Diversity, which was raised by several colleagues, is incredibly important. Just as in education we have been asking teachers to return to schools to help out and at the start of the pandemic the health service had many thousands of nurses and others returning to clinical roles, we are in effect doing the same. When we do that, however, we obviously cannot directly influence the diversity of the people who are returning to a profession or being retained for longer. As the Chair of the Justice Committee said, it is about reaching out to the recruits of tomorrow. We are taking many steps: for example, since 2020 we have been funding a two-year pilot programme of targeted outreach and support activity by the Judicial Appointments Commission, providing advice and guidance to potential candidates from underrepresented backgrounds, including those from BAME backgrounds, women and the disabled, and soliciting candidates for specific senior court and tribunal roles. In terms of magistracy, we will be launching a new online magistrates recruitment programme in the coming weeks to encourage applications from younger, more diverse cohorts. This is an important point.

The former shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), the shadow Chief Secretary, the right hon. Member for Wolverhampton South East, and the shadow Work and Pensions Minister, the hon. Member for Reading East, asked the important question of where the £17 billion will ultimately be coming from. The cost of the remedy is estimated to increase pension scheme liabilities by £17 billion, so it is the scheme liabilities that increase. However, that liability will be realised over many decades. It also represents a small proportion of the total savings of around £400 billion that will arise from the wider reforms to public service pensions. To be absolutely clear, the liability will fall on the Exchequer. I hope that offers clarification.

The shadow Work and Pensions Minister asked for clarity on the issues around the ceiling breaches and so on. As the Chief Secretary to the Treasury made clear in his opening speech, no member will see a reduction in their benefits as a result of the 2016 valuations. I hope that provides some reassurance to the shadow Minister. UK asset resolution schemes currently pay out benefits of about £530 million per annum; this is a cost the Government already bear. The policy creates a more efficient situation for paying these pensions and ensuring the current schemes will have a stable benefit.

The question asked by the right hon. Member for Hayes and Harlington and the shadow Work and Pensions Minister about the so-called pensions trap and the issue around the police has been raised with the Government by police representatives and we have been considering it. The Home Office is consulting on detailed regulations to implement a prospective McCloud remedy for the police pensions scheme, but the Government must not take action contrary to the intention of this Bill to remove discrimination identified by the courts by inadvertently introducing new unequal treatment and discrimination.

The hon. Member for Edinburgh West (Christine Jardine) and the shadow Chief Secretary both raised an important point about advice and guidance, and they were right. These are potentially complex issues. Perhaps one important point is that for many members this will hopefully be relatively straightforward; they will be presented with two options, one of which will be financially more generous. Hopefully, therefore, it will be relatively straightforward, but of course it is important that we provide guidance. Providing sufficient guidance for members to make informed decisions about their pensions is of the utmost importance and as such the Bill already requires that schemes provide members with remediable service statements containing personalised information about the benefits available to them. This will include details of the benefits available to them under the legacy scheme and the benefits available to them if they elect to receive new scheme benefits or choose for a period of opted-out service to be reinstated. These statements will be provided to active members on an annual basis.

The hon. Lady also raised the important issue of women and the general point about fairness. The Government agree strongly with the need to ensure that the impact of the Bill is fair on members of public service pension schemes with protected characteristics, including women. A full equalities impact assessment of the Bill was conducted and published alongside the Bill’s introduction. In addition, when making the necessary changes to their scheme rules to deliver remedy, pension schemes will carry out any appropriate equalities analysis for their specific schemes in compliance with the public sector equality duty in section 149 of the Equality Act 2010.

I am grateful for the support of the former Secretary of State, my right hon. Friend the Member for Newark (Robert Jenrick), on lifting the retirement age and, we hope, its impact on capacity issues. He put his specific point well in saying that his suggestion is the very opposite of politicisation. The Government have made their position on boycotts clear. We do not hesitate to express our disagreement with foreign nations whenever we feel that it is necessary, but we are firmly opposed to local boycotts that can damage integration and community cohesion, hinder exports, and harm foreign relations and the UK’s economic and international security. Local authorities should not undertake boycotts that could undermine foreign policy, which is a matter for the UK Government alone. The Government therefore remain committed to our manifesto pledge to ban public bodies from imposing their own boycotts, disinvestment or sanction campaigns, and we will legislate as soon as parliamentary time allows.

[Robert Jenrick]

I am grateful to my hon. Friend for his remarks. He has just said that the Government will legislate as possible; this is the opportunity to legislate. Of course, there might be a BDS Bill at some point later in the Parliament—we do not know; there will always be pressures on the legislative timeframe—but even if there were, this is the appropriate Bill to handle the situation, because the issue arose in the 2013 Act, to which this Bill is essentially the successor. I do not expect my hon. Friend to make a commitment here at the Dispatch Box—it is clearly something that we will all have to consider in the weeks ahead—but this is the moment at which to make the amendment, should the Government wish to do so in this Parliament.

[James Cartlidge]

I am grateful to my right hon. Friend. As he knows, matters of parliamentary business are above my pay grade—a very humble and new one—but I hear his point, and I think he made it very well. I am sure that he has a great deal of sympathy for our position, and I simply repeat that we will legislate when parliamentary time allows.

Let me finally refer to the points made by the Chair of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst, and the former Lord Chancellor, my right hon. and learned Friend the Member for South Swindon, about the independence of the judiciary. They are right: this Bill, including the important parts that deal with the judiciary—I make no apologies, as a Justice Minister, for focusing on those in the winding-up speech, not least given all the backlog issues—sends a powerful signal about our support for the judiciary. I believe that the independence of the judiciary is part of the competitiveness of the United Kingdom. The reason people buy our insurance in the City or trade with our banks and our service sector is that they trust this country, and they trust us because they trust the contract and they trust English law, and we should all be very proud of that.

On the basis of the contributions made today, I believe that the House agrees with the principles underpinning the Bill. I am grateful for the support of the shadow Chief Secretary and the Labour party, and indeed for that of the Liberal Democrats and other parties. I think we all agree that we must make certain that those who deliver our valued public services continue to receive guaranteed benefits on retirement on a fair and equal basis, and in a way that ensures that pensions are affordable and sustainable, and that we must also support our world-class judiciary to enable it to meet the demands of the present day and of the future. I extend an invitation to all Members who may wish to discuss these issues further with me and with the Chief Secretary before the Committee stage. I look forward to that further discussion, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Public Service Pensions and Judicial Offices Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Public Service Pensions and Judicial Offices Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 1 February 2022.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Michael Tomlinson.)

Question agreed to.

Public Service Pensions and Judicial Offices Bill [Lords] (money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Service Pensions and Judicial Offices Bill [Lords], it is expedient to authorise:

(1) the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by a Minister of the Crown or a government department; and

(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided; and

(2) the charging on, and paying out of, the Consolidated Fund of any sum payable under or by virtue of the Act to or in respect of the judiciary.—(Michael Tomlinson.)

Question agreed to.

Public Service Pensions and Judicial Offices Bill [Lords] (Ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Service Pensions and Judicial Offices Bill [Lords], it is expedient to authorise:

(1) the making of provision under the Act in relation to income tax, capital gains tax, corporation tax, inheritance tax, stamp duty, stamp duty reserve tax or stamp duty land tax in connection with—

(a) pension schemes established under provision made under the Act for persons who are or have been members of occupational pension schemes of bodies that were brought into public ownership under the Banking (Special Provisions) Act 2008, or

(b) the transfer under provision made under the Act of any property, rights or liabilities of any such occupational pension scheme or any such body; and

(2) the payment of sums into the Consolidated Fund.—(Michael Tomlinson.)

Question agreed to.

Budget Resolutions

Robert Jenrick Excerpts

Wednesday 27th October 2021 Commons Chamber

[Robert Jenrick (Newark) (Con)]

It is a pleasure to follow the hon. Member for Wallasey (Dame Angela Eagle). Unlike her, having recently left the Cabinet, I am grateful to the Treasury for all the effort that it has made to keep us informed of what will be in the Budget—I have never approached a Budget knowing quite as much in advance. However, I would still like to speak about a couple of elements that I think are quite significant.

One of those elements is the change in the universal credit taper rate, which will help millions of people throughout the country. It underlines a fundamental Conservative objective, which is to make work pay, and I strongly welcome it. I also think it important that we have announced an increase in the national living wage, which, again, will help us to build that higher-wage, higher-productivity economy that is so fundamental to our economic plan.

I also want to put on the record my praise for the Chancellor, which is contrary to some of the remarks we have heard today. I think that his stewardship of the economy over an extraordinary year and a half is enormously to his credit, and I think that that is reflected in the public confidence that he has built up for himself and for the Government over that period. We are seeing the economy bouncing back better—still scarred, but in a significantly better position than many people would have imagined. We are seeing employment in an immeasurably stronger position than we would have imagined just a few months ago, along with a commensurate surge in tax revenues that contrasts with the gloomy forecasts from the Office for Budget Responsibility the last time we heard from the Chancellor. I share the view of my right hon. Friend the Member for Wokingham (John Redwood): we have to question how useful the OBR is when its forecasts are so far out, and have to hope that it can raise its game in the future.

Let me make a few brief points. First, I think the Chancellor was right to continue to highlight the cost of living as a major issue. I do not think we should assume that inflation will be fleeting and transitory; I think it could be with us for a long time, which is why it is important that we take action. The action on the universal credit taper rate will help, as will the national living wage, and the changes in fuel duty and other items will be useful as well, but we must prepare ourselves—steel ourselves—for the likelihood that this year and most of next year will be marked by a significant pressure on people on low and medium incomes.

Secondly, I am very concerned about the current level of public spending, and the size of the state. We must be honest with ourselves, and acknowledge that on top of the £400 billion of unplanned outlay that was required to get us through the covid response, we are now seeing the size of the state increase to the largest that it has been in peacetime. The amount of public expenditure today is higher than it was during the financial crisis; it is about the same as it was under Denis Healey in 1976, when he had to go cap in hand to the International Monetary Fund. The size of the state is large, and we have heard from the Chancellor today that it is going to grow even further, beyond 41% of national income. History suggests that that is not a sensible long-term level for public expenditure, because it starts to crowd out the private sector, and makes it hard to build and sustain the free-market, free-enterprise economy that we all want to see.

That leads me to two points. One is that we have to ensure that this public money is well spent. I think particularly of the NHS, which is soon to account for 40% of total current expenditure. That is a significant amount. Many of us, and our constituents, want to see the NHS properly funded, but a heavy burden of responsibility now falls on the Department of Health and Social Care to ensure that the money is well spent and is accompanied by reform. I remember previous settlements, including the one referred to by my right hon. Friend the Member for Maidenhead (Mrs May). Just a couple of years ago, money was given to the NHS without a proper plan for reform and was not well spent, so I hope that this money will be spent differently.

The second point is the difference between funding for day-to-day purposes and funding that will genuinely increase productivity in the economy. At the end of the day, as many Members have already said, it is all about productivity growth. The forecasts that the Chancellor set out earlier today were for one or two years, if we are to believe the OBR, of very significant growth in the economy, and then a return to low levels of growth— 1% or 1.3%—with perhaps a decade of low growth ahead of us.

We have to improve productivity, and in that respect there was much to commend in the Budget and the spending review: significant increases in infrastructure, particularly the sorts of infrastructure, such as roads, railways and broadband, that will genuinely improve productivity and boost the economy, and the work on skills—in particular lifelong learning, which for too long has been a weakness in our country.

[Adam Afriyie (Windsor) (Con)]

My right hon. Friend is making a powerful speech about productivity. Does he share my delight that the Chancellor announced tax relief for investment—certainly in the short term and hopefully in the longer term? Hopefully, that will enable businesses to do the heavy lifting rather than the Government trying to do it for them.

[Robert Jenrick]

I agree entirely with my hon. Friend. At the end of the day, the way we boost productivity is by backing the private sector in the economy. The way we grow the economy is to make the UK a more competitive place to do business. That will mean ensuring that we attract investment from overseas. It will also mean correcting the poor levels of trade that we have seen in recent years, as has been mentioned. That needs to change. It also means ensuring that we as a Government bring forward some of the supply-side reforms that we will have to implement if we are going to make ourselves more innovative and competitive.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The right hon. Gentleman has had a position at a senior level of Government overseeing local government, and I wonder whether he would like to modify his comments slightly. Of course I understand that the private sector is vital for our growth and productivity, but strong public services and strong local government are also critical for helping to enable a strong local economy. Does he not feel that it is important to build that into the Government’s thinking?

[Robert Jenrick]

Absolutely; I do not demur from that, but we have to find the right balance in our country between public expenditure and ensuring that the private sector can flourish. I worry that we have now reached the moment at which there is not much more that we can spend.

We have to ensure that we grow our way out of this challenge. That was illustrated in some of the Chancellor’s announcements today, including those on research and development relief, the continuation of the investment allowance, the support for skills and also the maths support, about which I would be interested to hear more detail. This is also about ensuring that we have sensible tax arrangements in this country that can incentivise investment and ensure that businesses can prosper. The overall tax burden is at its highest sustained level in peacetime, and I worry that we will not be able to go much further than that.

I want to make one last point briefly before closing, because I appreciate that—

[Sir Edward Leigh (Gainsborough) (Con)]

Will my right hon. Friend give way?

[Robert Jenrick]

I really should not, because—

[Sir Edward Leigh]

It is very pertinent to him.

[Robert Jenrick]

How can I refuse?

[Sir Edward Leigh]

I want to say a fantastic big thank you to my right hon. Friend personally, because it has just been announced this minute that Gainsborough is getting £10 million of levelling-up funds. I relentlessly lobbied him on this, and I have lobbied his successor, so a big thank you!

[Robert Jenrick]

I am grateful to my right hon. Friend for ending on such a positive note. I know Gainsborough well—it is my neighbouring constituency—and I am delighted for him and his constituents.

I shall close where I began, which is by saying that there was a huge amount in the Chancellor’s announcements to be applauded. I commend him and the Treasury team and wish them well. The focus now needs to be on growing the economy and making the UK the most competitive place it possibly can be, rather than seeing taxes rise and expenditure increase, risking the private sector not being able to flourish and build that optimistic vision that the Chancellor laid out.

Economic Growth and Environmental Limits

Robert Jenrick Excerpts

Wednesday 10th July 2019 Westminster Hall

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for tabling this debate and other hon. Members who intervened or who came to listen to and support her. I am always partial to a good Robert Kennedy quote, so I am sorry to see that the hon. Lady’s thunder was stolen at the end of her speech, but I enjoyed it none the less.

As the hon. Lady eloquently set out, it is now more important than ever that the Government and institutions such as the Treasury, which is at the heart of this debate, confront head on the question of how we continue to grow the economy while protecting our environment and tackling climate change with all the vigour and urgency that she and others would like. I believe that the two can and will be done together, and can be mutually beneficial.

The UK is a world leader in this area, but I appreciate that many people—me included—would like us to go further. Between 1990 and 2016, the UK reduced its greenhouse gas emissions by 42% while growing the economy by more than two thirds, demonstrating that environmental action need not come at the cost of economic prosperity.

The Government are determined to continue to build concern for the environment into our economic model. In a moment, I will explain some of the workstreams that we have already undertaken and where we could go further. We want to ensure that environmental policies are well considered and that the Treasury as an organisation is leading them, as I believe it is. The hon. Lady argued that it is time fundamentally to change economic models if we want to address the climate emergency. She questioned in particular whether GDP is a sensible measure of our economic wellbeing, so I will begin by addressing that.

GDP remains one of the most important economic indicators, but it is by no means the only one that is of concern to us or which is used by other major economies around the world. It is closely correlated with employment, incomes and tax receipts, which makes it perhaps the most useful indicator currently available to us. It is used by the Government, the Treasury, and the Bank of England to set economic policy and manage the public finances and, as the system of national accounts framework is set at UN level, GDP is easily comparable across countries and time periods, both historically and in the future. It is important that any changes in the economic modelling that we use are made internationally, and the UK needs to show leadership on that.

The Government recognise, however, that GDP undoubtedly has its limitations and should not be seen as an all-encompassing measure of welfare and wellbeing, and we entirely accept that it was never designed to be. Former Chancellor George Osborne commissioned Sir Charles Bean to undertake an independent review of economic statistics. The review acknowledged some of those limitations, such as the challenge of capturing activities where no market transaction takes place, the challenge posed to GDP and to some of our existing modelling by technology, transforming the way that we measure welling and productivity and, as the hon. Lady mentioned, the fact that GDP estimates make no allowance for the depletion of natural resources,

The Government fully supported the recommendations of the Bean review, which we commissioned, and we have provided the ONS with an additional £25 million to help improve UK economic statistics and implement the Bean review. That was the “Beyond GDP” initiative that the hon. Lady mentioned, which aims to address the limitations of GDP by developing a broader measure of welfare and activity. In response to the hon. Lady’s question about the publication of statistics, the ONS is an independent organisation, so we do not control it in that respect, but I am happy to pass on her comments and ask the ONS to respond.

In the time left, I will briefly mention a number of other steps that the Government have taken. The Treasury’s Green Book, our guidance on the appraisal and evaluation of infrastructure and other investments, is essential to a number of decisions that are made by the Government. In 2018, we refreshed the Green Book to include additional environmental values, such as greenhouse gases, air quality and noise pollution. We also included a social cost-benefit analysis, which I hope is making a significant difference. It will be very important in the upcoming spending review. That work is well perceived internationally. My right hon. Friend the Chancellor of the Exchequer has now convened international Finance Ministers, and the area that the UK will likely lead on internationally is that of economic modelling and how we can do that better on a global scale.

[Clive Lewis]

The Minister spoke about the Green Book, which is still—despite the changes—essentially a neoclassical economic model based on equilibrium economics. Most scientists and economists on the fringes of economic thinking would tell us that we are moving into a disequilibrium position in our economic model. The two are completely incompatible and the Green Book is not fit for purpose as we enter a climate crisis in which many of its assumptions are no longer credible.

[Robert Jenrick]

I do not agree with the hon. Gentleman, but the theme behind his remarks is one of the reasons why we have amended the Green Book. We have created this concept of social value, so we now take into account negative externalities to the environment and to people’s lifestyles as a result of greenhouse gas emissions, for example. I am happy to have a further conversation with him on that after the debate, as there is very little time left.

We are working closely with Dieter Helm’s review and recommendations. I met him to discuss the issue of natural capital accounts, which we are taking seriously—it is a big endeavour. We are working with the ONS and the Department for Environment, Food and Rural Affairs to bring that forward. I hope that we will be one of the first countries in the world to take the issue forward.

Following the report by the Committee on Climate Change, the Chancellor and I met Lord Deben and accepted his recommendation over the summer that the Treasury should do a major and urgent piece of work on how we can fund in a fair way the changes that we need to make as a society as a result of the Committee’s recommendations. That work is under way. I am very happy to meet the hon. Lady to give her more detail on some of those initiatives, which are extremely important. We want to take them forward with gusto in the months ahead.

Question put and agreed to.

Contingencies Fund Advance

Robert Jenrick Excerpts

Tuesday 2nd July 2019 Written Statements

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

HM Treasury will incur new expenditure in connection with a legal settlement in 2019-20.

Parliamentary approval for additional resources of £84,200,000 for this new expenditure will be sought in a supplementary estimate for HM Treasury. Pending that approval, urgent expenditure estimated at £84,200,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS1685]

Oral Answers to Questions

Robert Jenrick Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

5. What progress the Government have made on establishing a shared prosperity fund.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government will establish a UK shared prosperity fund to spread prosperity and opportunity across all four nations once we have left the European Union and the EU structural funds. The fund will seek to raise productivity, focusing on levelling up parts of our country whose economies are further behind. More details will be announced following the spending review, and the Government will consult widely on the funds.

[Preet Kaur Gill]

Analysis of local enterprise partnerships by the charity think-tank NPC found that only 26% of board members were women and that only 5% were black, Asian and minority ethnic. When will the Government finally come forward with their consultation on the shared prosperity fund? Does the Minister agree that funnelling the UK fund through the LEPs would be a mistake unless they are made more representative?

[Robert Jenrick]

We intend to consult later this year, following the spending review. Officials at the Ministry of Housing, Communities and Local Government have already held 26 engagement events and have met more than 500 representatives from across the United Kingdom.

With respect to the hon. Lady’s very important point about representation on LEP boards, I should say that the LEP review conducted by MHCLG jointly with the Treasury last year did conclude that they needed to have broader representation from the groups that she mentioned—and from private sector businesses, large and small. Those rules and guidelines are now in force.

[Catherine McKinnell]

Shortly after the referendum on Europe, I asked the then Prime Minister David Cameron what would happen to the £726 million of European funding that we were due to receive in the north-east. He could not answer. We are now three years on and none the wiser about the supposed replacement—the shared prosperity fund. How can anyone have confidence in this Government and their handling of Brexit if they cannot give even that basic information to the region that is set to be the worst hit by any form of Brexit?

[Robert Jenrick]

The people of the north-east of England voted to leave the European Union; I know that the hon. Lady takes a different view, but we are trying to deliver on the outcome of the referendum. Had she voted for the withdrawal Bill, these matters would, of course, be progressing. As my right hon. Friend the Chancellor has already said, we are guaranteeing funding to the beneficiaries of all EU structural funds to 2023, so there is a degree of certainty as we move forwards. But the sooner that this House can coalesce on a good deal and that we can leave the European Union in an orderly fashion, the sooner this matter can be cleared up.

[Derek Thomas (St Ives) (Con)]

My constituency and the rest of Cornwall continues to be one of the less developed areas, even though there is much going for where we are and where we live. What would the Minister say to my county, the Duchy of Cornwall, about how soon it can expect to really contribute to the process of the shared prosperity fund?

[Robert Jenrick]

As I have already said, we intend to consult later this year. I strongly encourage my hon. Friend’s constituents to take part in that consultation; he and I have already spoken about this. I have met representatives from Cornwall Council, for example, to talk about the issue and some of the projects that they care strongly about—including, of course, the stadium in Cornwall, of which my hon. Friend has been a strong proponent.

[Mike Wood (Dudley South) (Con)]

Rebalancing the economy is not just about north and south or the different nations of the United Kingdom. Will the Minister ensure that the shared prosperity fund is distributed using a range of indicators, such as gross value added, the regional human poverty index and disposable income, so that areas in the west midlands in need receive their fair share?

[Robert Jenrick]

Absolutely—those are exactly the kinds of questions that we dealt with in the consultation.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Some of the problems in our United Kingdom can be traced to the disparity between the regions and nations of the UK. Will the Minister ensure that the shared prosperity fund is not the end, but just the beginning, of ensuring that there is prosperity across the entirety of our nation?

[Robert Jenrick]

The hon. Gentleman is absolutely right: there are disparities of income and productivity across the United Kingdom, and what he mentions will be one of the key objectives. But the shared prosperity fund is not our only intervention in this area: we are taking a range of measures, including significantly increasing the amount of public investment in infrastructure—to the highest levels in this country since the 1970s.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

Despite pledges that the Government would provide details on the shared prosperity fund by the end of last year, the Chancellor has been silent on how much communities could lose from the £17 billion-worth of structural funds. The Chancellor has only now woken up to the danger, splurging nearly £10 billion, almost half that amount, on tax cuts for the well off—as advocated, of course, by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). Surely the only shared prosperity under the Conservatives is for those who are already well off.

[Robert Jenrick]

Clearly, it is not possible to progress this matter until we have greater certainty about our exit from the European Union. Those Members of this House who want to see this matter progressed should be voting to leave at every opportunity, as we on the Government side have done. The important thing to point out on regional disparities is that this Government are investing far more than the previous Labour Government. In fact, £430 million a week more in real terms is being invested by this Government than under the previous Labour Government on infrastructure in all parts of the UK.

[Rachel Reeves (Leeds West) (Lab)]

4. What fiscal steps the Government are taking to support the northern powerhouse.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government are supporting the northern powerhouse through devolution deals for, among others, Manchester, Liverpool, the West Midlands and, most recently, North of Tyne, as well as through over £13 billion of investment in better transport across the north. In addition, we have invested over £3 billion from the local growth fund in the region since 2015, and we committed at the Budget to announce a renewed northern powerhouse strategy later this year.

[Rachel Reeves]

It is quite an achievement for the Minister to get up and say that without any sense of irony whatsoever. The truth is that we have had the incredibly disappointing news this week that Pacer trains in the north of England will not be removed by the end of this year, as previously promised. Despite the warm words about the northern powerhouse, the truth is that since 2014 spending on transport in the south of England has risen twice as fast as in the north of England. Will the Minister use the spending review as an opportunity to rectify these imbalances and finally give meaning to those words, “the northern powerhouse”?

[Robert Jenrick]

With respect to the hon. Lady, she is not correct on the numbers. This Government are investing more in the north than the previous Labour Government. Over the course of this Parliament, central Government investment in transport infrastructure will be higher in the north of England than it will be in London and the south-east on a per capita basis. We have seen a 40% increase in central Government funding per person in the north under this Government.

[Trudy Harrison (Copeland) (Con)]

Will my hon. Friend confirm that this Government have invested more than £500 million in the northern powerhouse, attracting more businesses and creating more jobs?

[Robert Jenrick]

Over the course of this Parliament and the last, this Government will have invested £13 billion in transport for the north. With respect to Northern Powerhouse Rail, which was mentioned earlier, over the last two years we have given £97 million to Transport for the North to build the business case and prepare the ground for that project. In the course of the spending review—our zero-based review—we will be considering how to take forward that project.

[Dan Jarvis (Barnsley Central) (Lab)]

My constituents in Barnsley Central and people right across the north of England will judge this or any Government on deeds, not words. Does the Minister agree with me that if the northern powerhouse agenda is to be taken seriously, we need to see schemes such as Transport for the North’s strategic transport plan, which includes Northern Powerhouse Rail, properly resourced by the national Government?

[Robert Jenrick]

I agree with the hon. Gentleman, and that is why we have given funding to Transport for the North to prepare a properly thought-through business case. We of course have decisions to make in the spending review about which of those projects should be taken forward and which provide good value for money. In the hon. Gentleman’s own city and city region of Sheffield, we have of course given money through the transforming cities fund to improve inter-city connectivity for his constituents.

[Martin Vickers (Cleethorpes) (Con)]

My constituency and the wider Humber region would greatly benefit if there were improved rail-freight connections east-west. What plans does the Minister have to fund those?

[Robert Jenrick]

We have received representations from the midlands engine, and from Midlands Connect in relation to transport, about both road and rail east-west connectivity. We are considering them carefully, and they will form part of the spending review.

[Peter Dowd (Bootle) (Lab)]

I spot the Leader of the House on the Treasury Bench, but I do not know whether he wants his old job back.

The Exchequer Secretary talks a good talk on fiscal steps to support the northern powerhouse, but the broader facts speak for themselves. Since 2015, for the first time in 50 years, the UK Government no longer provide regional investment aid in England, according to the Industrial Communities Alliance’s evidence to the Business, Innovation and Skills Committee inquiry. What is his explanation for that?

[Robert Jenrick]

We give many other funding streams to northern communities, including £3.3 billion through the local growth fund and £13 billion for wider transport schemes.

[Peter Dowd]

So that’s an unambiguous no. The north is home to 15 million people in five major city regions, 265 towns and 1,000 villages and smaller communities. It has 29 universities, the UK’s largest airport outside the south-east and eight major ports, one in my constituency. Does the Exchequer Secretary agree that changing those eight ports, as suggested by the Foreign Secretary and the former Foreign Secretary, into not economic hubs of excellence but potential revenue-draining, tax-avoiding, money-laundering free ports—more like free-for-all ports—is no substitute for a focused, well-resourced and sustainable economic strategy for the north?

[Robert Jenrick]

Perhaps unlike the hon. Gentleman, I am interested in any proposal that can drive economic growth in the north of England. Free ports are an interesting proposal, which we have discussed with a number of communities. We have urged them to come forward with well-thought-through business cases. We have yet to receive them from many places, but we have received one from Teesside and we will consider them carefully in future.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

6. What estimate the Government have made of the number of promoters of loan schemes subject to the 2019 loan charge who have been convicted; and if he will make a statement.

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[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government’s decisions on tax, welfare and spending on public services have benefited households across income distribution, with the poorest gaining the most as a percentage of net income. That is supported by the distribution analysis published by the Treasury at the time of the most recent Budget.

[Alan Brown]

That is nonsense. The UK is already the most unequal society in Europe, and the gap is becoming wider. In order to mitigate the worst welfare cuts and reforms, the Scottish Government are having to pay out £125 million this year alone. The Special Rapporteur on extreme poverty and human rights has said that the situation is “unsustainable”. Does the Minister agree that instead of arguing about tax cuts for the rich, Westminster needs to reverse those welfare cuts?

[Robert Jenrick]

The United Kingdom is not the most unequal society in Europe; it is not anything like that. The Government’s policies, such as our policies of investing in infrastructure and in boosting productivity, have been designed to level up the parts of the UK that need it the most. When it comes to poverty and living standards, things are improving. Real wages have been rising for 10 consecutive months, and more people are in work. In the hon. Gentleman’s constituency, unemployment has fallen by 60% since 2010.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

23. One way in which the Minister could easily help to raise living standards would be to pay those under 25 the same national living wage rates as those over 25. I know he will not announce that at the Dispatch Box, but will he tell us what concessions under-25s are given in their housing costs, insurance costs and living costs that warrant their being paid less than those over 25?

[Robert Jenrick]

Our priority has been getting young people into work. In 2010 we inherited a youth unemployment rate of 20%; we have almost halved that. The priority for this Government will be ensuring young people get a great education; more young people are in good or outstanding schools than when we came into power in 2010, and we want them to get apprenticeships and get into work and get on in life.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

14. What steps his Department is taking to help ensure that charities are able to claim timely VAT refunds.

Tobacco Products (Description of Products) (Amendment) Order 2019

Robert Jenrick Excerpts

Monday 17th June 2019 General Committees

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I beg to move,

That the Committee has considered the Tobacco Products (Descriptions of Products) (Amendment) Order 2019 (S.I. 2019, No. 953).

The statutory instrument inserts into the Tobacco Products (Descriptions of Products) Order 2003 a new article that describes tobacco for heating, ensuring that this category of tobacco product can be distinguished from existing duty categories. This technical change describes tobacco that can be heated without combustion to produce or flavour a vapour, and did not attract any controversy during consultation. I assure right hon. and hon. Members that the Department of Health and Social Care has been intimately involved in the development of this new description.

Heated tobacco products, also known as heat not burn, are a recent development in the tobacco market. They contain processed tobacco that is heated but not burned, as is the case in conventional tobacco products. There are different ways in which this can be achieved, but all use tobacco to produce or flavour vapour.

While current categories capture tobacco designed for smoking—apart from chewing tobacco, which is clearly quite distinct—they do not specifically capture heated tobacco products. At present, there are only a very small number of heated tobacco products on the market, which Her Majesty’s Revenue and Customs assesses on a case-by-case basis to determine their liability to tobacco products duty. That will not be efficient in the long term if the market grows, particularly if the number of products increases substantially.

Having a clear definition that captures the full range of heated tobacco will also mean that there is less scope for manufacturers to attempt to reduce their duty liability by producing products that do not clearly fall within an existing category. The statutory instrument therefore inserts a description of tobacco for heating into the 2003 order, which is necessary for the new duty category to take effect. This change is designed to maintain the effectiveness of our long-established tobacco regime.

The Finance Act 2019 created a new duty category—tobacco for heating—with a commencement date of 1 July 2019. Failure to provide a legal description of tobacco for heating will mean that the new duty category cannot commence as announced. Subject to approval of this order, the new category and rate will be switched on from 1 July 2019. I therefore commend the order to the Committee.

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[Robert Jenrick]

I am grateful to the hon. Gentleman for supporting this measure. As I said, it is a simple measure, which puts on the statute book the definition that is required under the Finance Act 2019.

The amount of revenue at stake is negligible—less than £5 million per year. That is partly because there is only one known product on the market at the moment. Of course, should this take off as a new form of smoking, there will more revenue at stake; at the moment, we think it will be only a small amount. Our primary motivation here is providing clarity to taxpayers, rather than raising significant amounts of money.

On the future revenue stream from tobacco, the hon. Gentleman is right to say that, should smoking continue to decline, which is a good thing, the revenue stream will start to decline. We monitor that closely, and the Exchequer always has new and novel ways of raising money to meet the shortfall in the future, should it have to.

In terms of snuff, I am looking to my officials—[Interruption.] That is disappointing. I was looking to my officials to see whether they knew the answer, but I will have to write to the hon. Gentleman.

[Peter Dowd]

Snuff is not a heated product—not, I suspect until it gets up your nose, but that is by the bye. I do not want any response, formally or informally, from the Minister on that.

[Robert Jenrick]

I am grateful for that. I commend the order to the Committee.

Question put and agreed to.

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill

Robert Jenrick Excerpts

3rd reading: House of Commons & Programme motion: House of Commons & Report stage: House of Commons
Monday 10th June 2019 Commons Chamber

[Kirsty Blackman]

I thank the hon. Gentleman for his intervention. The liability only arises for testimonials of more than £100,000, but I understand his point. For example, I do not know how it would work if a committee were to receive £80,000 on the day of the sporting testimonial and then another £25,000 afterwards in charitable donations. I hope that the Minister will make plain which period the income from a sporting testimonial covers. If the income arises after the sporting testimonial, does it breach the £100,000 cap, and would the liability for class 1A contributions therefore arise, even though it did not occur on the day of the sporting testimonial?

There is also a difference between contractual and non-contractual sporting testimonials. The hon. Member for Oxford East (Anneliese Dodds) made this incredibly clear in Committee and discussed in some detail the definition of “contractual”. The issue is not only the word “contractual”, but whether a sporting testimonial was expected. For example, if everybody who plays centre forward for a football club is given a sporting testimonial, does that mean that everybody should expect a sporting testimonial, or does it just happen that the last five people who played centre forward were amazing at scoring goals and therefore received a sporting testimonial? My concern is that people who did not expect a sporting testimonial will end up, through no fault of their own, in a situation where the Government consider it to be one that they expected to get.

My concern in both cases is the impact on HMRC, which will have a job of work to do in deciding whether the sporting testimonial income creates liability for class 1A contributions. Is it a contractual testimonial? Is it one that the sportsperson should have expected to receive? That will be a difficult set of cases for HMRC to deal with, to come to the correct decisions.

New clause 4 simply says:

“The Secretary of State must, within three years of this Act receiving Royal Assent, lay before Parliament a report on its Exchequer impact.”

Before a Treasury Bill comes before Parliament, explanatory notes and a TIIN—a tax information and impact note—are provided, which we all are able to access. A TIIN projects how much the Treasury expects to receive as a result of tax changes, whether it is a tax relief or an additional tax. I have pushed Ministers before on how we know whether the expected impact was actually received.

The information that I was given in Committee was not as strong as I hoped for. I understand that at an unspecified point in the future, the Treasury Committee will be given a report on the Exchequer impact of tax changes. I do not know who keeps track of when those reports are published or whether a report is provided to the Treasury Committee on all measures that have an Exchequer impact. However, I do know that the Members who serve on the Bill Committee—whether Opposition or Government Members—and who scrutinise the Bill, raise concerns about its progress and ask questions about the potential Exchequer impact do not get a copy of the report. Only the Treasury Committee gets a copy of the report and has the right to scrutinise it.

If the Government cannot accept new clause 4—it would be nice if they did, so that a report was laid before Parliament that we could all see—I ask that when reports are published and sent to the Treasury Committee, all Members who serve on the Bill Committee also receive a copy. It would not be a massive administrative burden on the Treasury to ensure that we were all emailed a copy; I am not even asking for a paper copy. It would mean that Parliament and the Government’s decisions were more transparent. It would also mean that the next time we were asked to take a decision on national insurance contributions or anything else, we could look back at whether the impact that the Exchequer projected was actually received.

I get that there are various reasons why we change taxation. We can change taxation to discourage behaviour that we do not want, to encourage behaviour that we do want, to raise revenue or, as the Government say they are doing in this case, to simplify things—although I have given a number of reasons why this is not the way to simplify national insurance contributions or termination payments. This House can only make sensible decisions about taxation if we understand how accurate the Treasury’s projections are. It would be much better if the Government committed to send us a copy of this report when it goes to the Treasury Committee.

I will not press new clause 4 to a Division, but I am happy to vote with the Opposition on any measures that they press. I hope that the Minister will say yes to the small request I have made, because it would not have a huge administrative impact or cost him anything.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I am grateful for the opportunity to respond to the comments and questions posed by the hon. Members for Aberdeen North (Kirsty Blackman) and for Bootle (Peter Dowd). I shall not detain the House long, but I will try to respond to as many points as possible. I am surprised that the hon. Member for Bootle has raised those concerns and indicated that he intends to vote against this measure, given that he did not divide the House on Second Reading and did not divide the Committee on a single clause.

[Peter Dowd]

I indicated at the time that we would reserve our judgment and see whether the Government came up with sensible proposals. The fact of the matter is that, regrettably, they have yet again not come up with those suggestions, proposals, recommendations and explanations. That is why. Here we are giving the Government the benefit of the doubt, and we are being criticised for it.

[Robert Jenrick]

Let me respond to the amendments tabled by the hon. Gentleman and the hon. Member for Aberdeen North. It is a bit like groundhog day, because we have been through these arguments before. I will first address new clauses 1 and 2, which seek to amend the legislation that deals with termination awards, and then new clause 5.

New clauses 1 and 2 seek to commit the Government to report to Parliament on the impact of the changes to termination awards legislation within one year of implementation. They both seek further information on the impact of this measure on individuals whose contracts have ended and on employers. New clause 1 also asks specifically about distributional analysis, while new clause 2 asks the Government to consider the impact on businesses using termination payments to fund a start-up—a matter that we also discussed in Committee.

First, the Government consider that producing such reports is unnecessary, because we have already considered these issues in detail as part of the policy development and extensive consultation process. As we have discussed on a number of occasions, this Bill has been known about for some time. It was published for the first time in 2015. It has been restated in Budgets. It has been consulted on. This is not a new measure; it is well known to individuals and stakeholders who might be affected and to the tax and professional community who will be involved in advising businesses. There is little more to be said on that.

[Kirsty Blackman]

As the Minister has said, we discussed this in Committee, as well as on Second Reading. As we have discussed it before and he knew this question was coming, can he tell us how many businesses use termination payments for their start-up and how many fewer will use it for their start-up as a result of these changes?

[Robert Jenrick]

As I said in answer to the hon. Lady in Committee, that is not information that HMRC collects. Studies are made by independent bodies, some of which I highlighted to her during the previous stage of the Bill. I could direct her to them, but I cannot vouch for the veracity of those studies, which are produced by independent bodies. Of course, there is anecdotal evidence of the number of start-ups created in the event of significant redundancies at particular businesses, but that is not something HMRC collects or would be able to do easily. With great respect to the hon. Lady and the point she is trying to make, I do not agree that that is something we should attempt to do in this case.

The point the hon. Lady raised in her closing remarks was about the review that HM Treasury does in the ordinary course of business. We do intend to do that, and we do so within three to five years of Royal Assent to a Bill. As I explained in Committee, the conclusions on the Bill will be communicated publicly to the Treasury Committee. I understand the point she has made on a number of occasions that we could at that point specifically notify certain Members of this House should they be in this House and remain interested. However, again with respect, I suggest it is perfectly reasonable that we send that to the Treasury Committee, which will publish it. It will be in the public domain, and if she or other right hon. and hon. Members are interested at that stage, they will be able to view it and take it from the Treasury Committee website.

[Kirsty Blackman]

Could the Minister please let us know whether that will be in three years’ time or five years’ time, or at what point in that two-year period should I be watching the Treasury Committee’s website?

[Robert Jenrick]

I cannot tell the hon. Lady that at the present time, and for good reason. We do not know at this moment when will be an appropriate time to review this particular tax. Clearly, it can take time to gather the correct evidential base, and that will vary from tax to tax. We will choose the correct moment when we have the greatest degree of evidence to make an informed decision, but it will be within the three-to-five year window.

The existing processes I have described allow time for the Government to consider an adequate amount of evidence, including administrative and taxpayer data. These do take time to collect. They often involve external research, stakeholder views and other relevant analysis. After one year, as is proposed in new clauses 1 and 2, is rarely the appropriate time to review a new tax. Accepting these new clauses at this stage would mean rushing into reviewing these polices prematurely, without proper consideration and without enough evidence to do so robustly, which is what I think all right hon. and hon. Members would wish us to do.

Secondly, the Government have already explicitly considered the impact on employers and individuals as part of this policy development and the consultation process I have already outlined. We decided on an approach that protected those losing their jobs—for example, by retaining the important £30,000 exemption. We have stressed on a number of occasions throughout the passage of the Bill that the Government certainly have no intention of changing that. Were this or a future Government to do so, it would require an affirmative statutory instrument, which could then be debated and voted on by the House. We have also chosen not to change employee national insurance contributions as well, which we could have done for even greater simplification. We chose not to do so to protect employees in a difficult period in their working lives.

At this point, I would add that this policy has been costed. That was certified by the independent Office for Budget Responsibility, and the methodology for this assessment is described in the Budget policy costing document. The suggestion from the hon. Member for Bootle that this was not properly costed is not correct; it has been independently certified.

New clause 1 also requests that the Government conduct a distributional analysis. As I have set out on a number of occasions, the Government have already assessed the distributional impacts of this policy using the information that is available to us. We are confident that the termination awards affected by these changes will be disproportionately paid by higher and additional rate taxpayers. It will not be possible to make a further assessment until we have collected the administrative data on the impact of this policy, which we will do in due course, and it will of course inform the review we have already described in three to five years’ time.

New clause 2 asks that we consider the impact on start-ups. I have answered the question from the hon. Member for Aberdeen North: we do not hold this data. It is not an easy statistic to collect. It requires tracking the behaviour of an individual across time and between different employments.

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[Robert Jenrick]

I beg to move, That the Bill be now read the Third time.

I am grateful to all the right hon. and hon. Members who participated throughout the passage of the Bill, particularly in Committee. I thank the Committee’s Chairs, my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) and the hon. Member for Mitcham and Morden (Siobhain McDonagh).

This is a small and narrowly drawn but none the less important Bill that continues the Government’s aim of aligning tax and national insurance contributions where it is right to do so. The Bill aligns the employer national insurance contribution treatment of termination awards and sporting testimonials with the current tax treatment. It also raises about £200 million a year for the public finances.

As I mentioned in previous debates, the Bill has been expected for some time. The measures were first announced at Budget 2015, consulted on thereafter and so have been widely expected and subjected to a great deal of scrutiny. The effect of the changes in the Bill will mean that a 13.8% class 1A employer national insurance charge will be applied to income derived from termination awards and sporting testimonials that are already subject to income tax.

I would like to reiterate my thanks to hon. Members who participated in the debates. I thank my superb officials at HM Treasury and Her Majesty’s Revenue and Customs, whose patience and professionalism never ceases to impress me. I commend the Bill to the House.