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House of Commons Hansard
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Business, Innovation and Skills
20 December 2011
Volume 537

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Christmas focuses the mind on shopping. At this time of year, we become more aware of the importance of retail to our economy and the recovery. Retail is Britain’s largest private sector employer, providing 2.9 million jobs and representing more than 10% of total UK employment. In my constituency, more than 5,700 people are employed in retail. The retail sector generated £292 billion of sales in 2010, equivalent to one fifth of UK GDP.

The exceptional flexibility of retail work, with a higher proportion of part-time hours than other sectors, gives employees greater freedom to fit their work in with wider family responsibilities. It gives an opportunity for that first start in life—indeed, 42% of all working 16 to 17-year-olds are employed by retailers. Youth unemployment is at a record high and has broken through the 1 million mark, so any loss of retail jobs will have a direct impact on young people.

A lot of concern has been expressed by the Union of Shop, Distributive and Allied Workers—USDAW—about changes to working tax credits, which mean that the total weekly hours that a couple with children need to work to qualify will increase from 16 to 24 hours. For some families, 16 hours of part-time work will not pay, and employers will lose valuable staff and the flexibility of shorter working patterns. I ask the Government to look again at the possible implications of this policy change.

Many challenges lie ahead for retail, including the worldwide economic downturn and uncertainty over the euro. In addition, the way we shop as a nation has changed dramatically. We have seen the massive growth of large, successful out-of-town superstores and the phenomenal rise of online shopping, which now accounts for nearly 10% of all retail sales. At the same time, we are seeing the decline of many town centres, with vacancy rates doubling over the past two years and total consumer spend away from our high streets now at more than 50%. The high street is changing, as was shown in the Mary Portas review, which was published last week.

Many town centres have always been a mixture of big-brand shops and independent retailers, but out-of-town shops have been able to offer larger stores combined with easy parking. The town centres that have done best in the face of these developments are those that have invested and developed a distinct shopping offer. Out-of-town shops do well because shoppers like them, so town centres have to become attractive to shoppers and, as Mary Portas says, there are as many different ways of doing that as there are towns.

As chair of the all-party group on markets, I strongly support the idea of placing markets at the heart of the plan to turn around ailing high streets and believe that vibrant markets are key to regenerating our town centres. At a time of high unemployment, market stalls are easy and cheap to set up, and they allow people to try out fresh ideas and flexible working. I also like the idea of national markets day. Indeed, our all-party group organised such a day in 2007, when dozens of MPs visited their local market.

People like markets. They have existed for hundreds of years and have been a key source of retail innovation. I am thinking, for example, of Tesco in Hackney, east London, Marks & Spencer in Leeds and Morrisons in Bradford. Markets also provide a public place for people to meet. They give a sense of belonging and of place in the community. Good town centres and markets make an important and underrated contribution to public health. It is important that that partnership between the big retailers and independent small traders in shops and markets in town centres, which has worked so well in the past, continues to meet the challenges of the future. I see that working well in parts of Stockport. In Heaton Moor, for example, the district shopping centre is adapting to the changing demands of the local community. Its coffee shops, café bars, delicatessens, fish and meat shops, other specialist shops and first-class restaurants show how change and innovation can turn local shops into a vibrant and attractive place. Interestingly, the area also has a Tesco local and a Co-operative store, and about 2 miles away there is a Tesco Extra, which is a 24-hour store. That shows that out-of-town stores do not, in themselves, destroy town or district shopping centres; it is the ability to change and adapt that will determine their future.

We need shopping to be interesting if we are to be attracted into the town and district centres. My suggestion to attract shoppers to Stockport is that it should offer a cultural experience day ticket. Shoppers could buy a ticket that would include discounted entrance to major heritage sites, including Staircase house, the Stockport air raid shelters and the hat museum. A trip round the Robinsons brewery might be an added attraction, and the day could perhaps finish with tea and a film at the Plaza combined with some shopping in Merseyway or the market. That, combined with special discounts at the shops and in the market, might prove very attractive to everybody in the north-west.

Retail is an important industry, a major employer and a big contributor to the economy, and it is at the heart of our towns. The Government need to restore consumer confidence, because without that people will not spend money and there will be no growth. At a local level, councils must support innovative ideas, and big retailers need to work with town centre partnerships and independent retailers to develop a vibrant high street. Town centres should be places where we go to meet other people in our communities and where shopping is just one part of a rich mix of activities. If we can get this right, towns up and down the country will come alive again and retail will become an even bigger part of our national life, contributor to the national purse and provider of that all-too-important employment.

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I call Mark Menzies.

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Thank you, Mr Deputy Speaker, for giving me the opportunity to take part in the pre-Christmas recess debate. I also wish to thank my hon. Friend the Member for Ludlow (Mr Dunne) for taking the time to reply.

Enterprise zones offer great potential to the people of Fylde. In September, BAE Systems announced 1,300 job losses, which will have an impact on my part of Lancashire as many of those fall on my constituents. It was then that my campaign for enterprise zones really took place, although I have long been campaigning for an enterprise zone to come to Fylde. I must put on the record the fact that following those job losses the Government were quick to act, announcing the zone to cover the sites at Warton and at Samlesbury in your constituency, Mr Deputy Speaker, during the Conservative party conference in October.

However, it is one thing announcing an enterprise zone and quite another turning it into something meaningful. The work force in our part of Lancashire truly are world-class. Many have backgrounds in engineering, in-flight systems design and advanced project management skills. As such, we need to aim high in the types of employers we seek to attract. In recent weeks, BAE Systems has come in for criticism for the way in which the aspects of job losses and restructuring have been handled. I believe that the Lancashire enterprise zones provide BAE Systems with an opportunity to show its commitment to the region and leadership in attracting world-leading companies to set up home on the Warton and Samlesbury sites, and I wish to take this opportunity to recognise all that the company is doing in this regard. It is also right to put on the record the work that you have done behind the scenes, Mr Deputy Speaker, to make Samlesbury a successful site for enterprise zones and potential inward investors. I know that you, too, have campaigned tirelessly, doing so behind the scenes because of the nature of your role, to do the right thing by the work force at BAE Systems, and it would be remiss of me not to recognise that.

Many in this House will be familiar with the advantages that an enterprise zone will bring to an area, and the purpose of this debate is not to go over old ground. Following the Chancellor’s announcement in the autumn statement that capital allowances will be given for some enterprise zones and not for others, may I use this opportunity to call on the Government to ensure that we do not create two classes of enterprise zones, as that will lead to distortions in investment decisions? Instead, we should do everything we can to ensure that all enterprise zones are given every opportunity to flourish in what is a very competitive and tough investment market. I ask the Chancellor to ensure that, within the EU investment rules, we are creative and we give companies every opportunity to use all the various investment and tax mechanisms in play.

With its high-tech and highly skilled design and manufacturing work force, Warton is a natural place for top-end capital intensive industries to invest. We have people there who have worked at the cutting-edge, and in some of the most challenging environments in this country, all their lives. Our people also have the ability to reskill, retrain and move into other sectors, so we must think about how we can use mechanisms in the Department to retrain and reskill them to meet the challenges ahead.

I also urge the Government to ensure that all enterprise zones in Lancashire and the north of England operate on a level playing field and that investment decisions do not simply go from one area to another as a result of the tax structure created in an enterprise zone—I have the zone in Liverpool very much at the forefront of my mind.

Finally, I would like to take this opportunity to request that the Government be open to all types of small-scale investment, such as investment in capital infrastructure, that would help to facilitate enterprise zones and make them more attractive. I know that the Chancellor will be receptive to requests for investment in roads and so on—on a small and limited scale—and I urge the Government to continue to adopt that open-minded approach. To gain the high-quality companies that my constituents and your constituents deserve, Mr Deputy Speaker, we need to seek not just home-grown organisations, but, in particular, those from overseas. So I urge UK Trade & Investment to have dedicated people selling the potential of investing in Britain’s enterprise zones to global investors. If we play this right, enterprise zones will give some of the most challenging areas of our country a new lease of life and will ensure that some of the most highly skilled and highly motivated people, who are currently threatened with losing their jobs, have a bright and sustained future. I thank the Government for the opportunity to bring enterprise zones to Lancashire and urge them to ensure that enterprise zones are the success that we know they can be.

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It is a pleasure to follow the hon. Member for Fylde (Mark Menzies), who, of course, comes from my constituency.

I also welcome the opportunity to raise a very timely issue: the collapse of the Farepak Christmas savings club. It has been raised in this Chamber on many occasions, because more than five years ago, on 13 October 2006, the company collapsed and as a result 120,000 people lost some £38 million. Very few of those people have received a penny back from Farepak as yet, although the administration has continued.

Hon. Members will remember that a response fund was set up at the time of the collapse, to which the people of this country gave very generously and as a result of which some Farepak victims got some money. The reality is, however, that Farepak has still not paid out in any way to the 120,000 individuals or to their families. The Government are well aware of the background. Last week, the Minister for Further Education, Skills and Lifelong Learning responded to the debate on the subject secured by my hon. Friend the Member for Newport East (Jessica Morden), and said that the current situation was completely unacceptable and that the whole matter had taken far too long to sort out. Members on both sides of the House would accept that the length of time it has taken to resolve the matter is not acceptable. We must see whether there are lessons to be learned.

I would argue that the 120,000 people who saved with the Farepak Christmas savings club did so responsibly, so I ask the Government to look again at what they can do to ensure that those affected receive full compensation for what they lost. In my constituency, hundreds of families were affected and for many of them Christmas that year was destroyed. In particular, I pay tribute to my constituents, Louise McDaid and Jean McLardy, who both live in West Kilbride and who, along with others, set up the Farepak victims committee, which has been campaigning for the past five years for justice for the Farepak victims. It has become clear over those years that the sector is poorly regulated and that individuals who pay for items in instalments do so with very little protection. The Farepak victims are unsecured creditors, which meant that when the company went bust they went to the bottom of the pile.

The reaction five years ago was the setting up of a voluntary organisation, the Christmas Prepayment Association, which provides should a company that is a member go bust. Many prepayment companies, however, are not members of the scheme and there is no requirement for them to belong to it. Indeed, some of the biggest players in the sector, such as Tesco and Asda, are not regulated by the voluntary scheme and the association covers only Christmas clubs, whereas many prepayment organisations are not geared towards Christmas.

Many Farepak customers are very upset about how the administrators, BDO, have handled the administration, about the lack of information available to them as creditors and about the deal that I believe was done with some of the ex-directors of Farepak to pay a total of only £4 million in compensation of the £32 million that was due. As was widely reported recently in the press, BDO has incurred expenses in excess of £8.2 million in administration of the scheme, whereas it has managed to get only £5.5 million for the victims. I tell all hon. Members that there are serious issues about whether that mechanism should have been used to resolve the situation. Until recently, the victims were told they could expect 15p in the pound back, but now it is not clear whether they will receive even that limited amount. An application has been made for disqualification orders to be taken against the directors, but as yet we still have no indication of whether there are likely to be any prosecutions in the criminal courts.

I believe that the case of Farepak highlights important failings in the regulation of the prepayment industry. That applies not just to Christmas savings clubs but to many situations where individuals pay for things in instalments, and, of course, it is people on modest incomes who do that. Most people who pay up in this way often reasonably expect that the sums they pay will be ring-fenced and put in a separate account and that they will have priority if the organisation goes down. Today, I ask the Government, five years after Farepak, to look into what can be done for the Farepak victims as well as at the wider issues of the prepayment sector, and to come back with proposals to ensure that the sector is better regulated so that we can give proper protection in the future.

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It is a great pleasure to speak in this debate on credit and debit card surcharges. This Christmas, more people than ever are buying their presents online. Last week’s retail figures showed that internet shopping, or, as it is rather mysteriously called by the Office for National Statistics, non-store retailing, rose nearly 20% between November 2010 and November 2011—a staggering increase. Purchases made online now constitute 12.2% of non-fuel purchases. It is therefore essential that the Government do everything they can to ensure that when we buy something online the prices are fair, the process is easy and the transaction is transparent.

That is simply not the case and the problem with surcharges is getting worse. A recent study by Which? found that in 2004 Ryanair charged its customers 80p for debit card payments, but that now passengers have to fork out £12 just to be able to pay for their flight. The British Retail Consortium, meanwhile, estimates that the transaction costs are 37p for credit cards and 9.2p for debit cards—rather less than £12. Those costs are no longer surcharges but a business model in their own right, and one that severely undermines legitimate economic growth. If Ryanair’s surcharges have risen 15 times in seven years, just think what such charges will do to economic growth across the country as we pull ourselves out of recession.

When consumers choose to buy something, they do so in the belief that the price is fair and that they have got a good deal. So, when hidden surcharges are added at the end, consumers come away feeling wronged and the incentive to buy is greatly reduced.That is compounded by the fact that businesses are incentivised to think of new ways to get away with hidden costs, rather than delivering desirable products or services at the cheapest possible price. Prices go up and innovation is throttled, harming society as a whole. The Government must act now or risk stifling our fragile recovery.

This November, retail sales were down 0.4% on the previous month, a disappointing outcome for hopeful high street shops. Clearly, the depth of the recession, the ongoing crisis in Europe and the difficult economic circumstances around the globe have had a severe impact on consumer confidence and people’s disposable income. Over the same month, however, online shopping was up 2.4%. The fact that internet shopping is growing is not exactly news, but what is important is the pace of that growth compared with that of other industries in this country and of online shopping in other countries. A recent study by the Federation of Small Businesses estimated that online trade will represent 10% of gross domestic product by 2015. If the Government also hope to eliminate the structural deficit by roughly that year, they would do well to pay close attention to internet shopping.

Ofcom has found that eight in 10 UK internet users ordered goods or services online in 2010, a higher figure than that in any other European country. What we have here in Britain is a very large number of people who have access to the internet, use it on a regular basis and are turning to it as the means by which they trade. In that respect, at least, we are leading the way in Europe. As a consequence of those benefits—the savings for customers and the convenience—the Government have already announced £100 million to support the roll-out of high-speed broadband. Although it is nice to see the Chancellor embracing some Keynesian investment, card surcharges already represent a major supply-side restraint which could be removed without any significant cost to the Exchequer. One of the many questions that any Government must ask themselves is what are the barriers to growth. Here we have a significant and growing barrier to progress, and it is time we took action to end the distorted market and unleash the full potential of online retail. Otherwise, consumers will be put off internet shopping.

Hidden costs harm confidence and skew the market away from productive enterprises, but they are also inherently unfair and damaging to a free and open society. The Deputy Prime Minister spoke yesterday about the need for an open society, the need to be transparent, and the need to have a fair distribution of wealth and property. Such non-transparent charges entrench inequalities in wealth and property; they make more difference to those with less.

It has always been the case that the most discerning consumers—those who have the luxury of time and possess significant purchasing power—are able to sit back, compare prices and select what they want; that is something that those who are always working to pay the bills simply cannot afford to do. It should be of concern to the Government that a recent Which? survey found that half of people think that card surcharges make comparing prices difficult. The free market is distorted and undermined by any hoarding of information, and the effect that such charges have on our fundamental sense of fair play is damaging to society as a whole. The charges engender significant mistrust in businesses. That is as harmful to their balance sheets as it is to the consumers who feel betrayed.

It is great that the reduction in travel associated with internet shopping has significant environmental benefits, in terms of CO2 emissions and problems associated with overcrowding. In particular, it eases congestion on the transport network. I am sure that any of my constituents who have tried to cut through the Grand Arcade these past few Saturdays would greatly appreciate slightly fewer Christmas shoppers there; those shoppers could, of course, go to the independent shops on Mill road and elsewhere.

What can we do? What should the Government do? How can we enable internet trade to grow, and ensure that prices are fair? This is one of those extremely rare circumstances where the solution is as simple as it is effective: we can require card surcharges to be included in the advertised price. I am sure that many hon. Members, particularly on the Government Benches, will be delighted to know that the European Union is already taking a step in that direction—the 2014 consumer rights directive is set to limit debit card surcharges—but we can and should take action now, and go further. We could be leaders in Europe.

In June, the Office of Fair Trading upheld the super-complaint brought by Which? about payment method surcharges. The OFT said that the Government could amend the Payment Services Regulations 2009 to ban the surcharges and make pricing more transparent and fairer. The Government must respond by taking that small step, in order to unleash growth, empower consumers and build and safeguard a free and fair society.

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I am grateful for the opportunity to raise concerns about the collection and recycling of hazardous mercury-bearing waste from lamps, and waste electrical and electronic equipment, known unpromisingly as WEEE.

WEEE is one of the fastest-growing waste streams in the UK. Following the adoption of a European directive in 2003, UK regulations were introduced. They took effect in 2007, and were aimed at recovering more of that waste and ensuring its treatment in an environmentally sound manner, with less going to landfill. The regulations require any business that sells and imports WEEE, including hazardous WEEE, to join an approved compliance scheme, pay a registration fee to the scheme, and supply data on the amount of electrical equipment placed on the market each year.

Under the regulations, companies are required to finance the costs associated with the treatment, recovery and disposal of WEEE, but it appears that some unscrupulous organisations have been charging disproportionately for that. That may explain why the big four lamp manufacturers and importers—Sylvania, Philips, OSRAM and GE—have established their own not-for-profit organisation, Recolight, which offers free lamp-recycling, paid for by the imposition of an up-front fee, unique to the lighting industry, on the sale of hundreds of millions of lamps purchased by households and commercial and public organisations since the introduction of the WEEE regulations. That may seem an understandable response, but I am concerned that it may have led to Recolight enjoying a dominant position in the market for the recycling of WEEE lamps.

The ability of the big four to apply a common up-front fee to every lamp certainly gives the appearance of the existence of a cartel. I understand that decisions about the application of the Competition Act 1998 fall outside Ministers’ remits, but the result appears to have been a suppression of competition in the market, which—this is the crucial point—limits the ability of the market to reduce the adverse environmental impact of hazardous mercury-bearing WEEE lamps. It is of concern that since the formation of Recolight, lamp recycling rates have actually fallen, whereas previously there was 25% year-on-year growth, and there has been growth in all other WEEE sectors. Research and development investment is also falling as a result, and jobs are being lost.

Negotiations on the European Commission’s proposals for a recast WEEE directive are drawing to a conclusion. I understand that the Government expect to launch a consultation on the amendment of the UK WEEE regulations shortly, and I urge Ministers to consider how best those regulations could be recast so as to prevent any manipulation of the market in a manner that reduces the effective management and disposal of hazardous mercury-bearing electrical waste. It is vital that the market works fairly to achieve that outcome, and clearly the lamp-recycling industry requires stability if it is to operate effectively.

I have a number of questions relating to the structure of the market, the impact on recycling rates, and the opportunities that will arise from recasting the WEEE directive and making consequential amendments to the regulations in the UK. First, in the light of an apparent fall-off in rates of lamp recycling, can Ministers say what monitoring there is of levels of recycling of WEEE, and what action is being taken to promote increased recycling volumes in order to protect the environment and WEEE operators—those are the main priorities of the WEEE directive—and ensure that consumer revenues are used appropriately? Will Ministers ensure that standards for the collection, transport and recycling of hazardous mercury-bearing lamps are improved, and ensure that full health and safety data on product recycling are made available to the UK lamp-recycling industry? Will they take the opportunity of the recasting of the WEEE regulations to look at whether the roles of the Environment Agency and the Health and Safety Executive could be strengthened? Will Ministers consider requiring the value of evidence to be set by an independent third party, particularly where producers’ compliance schemes compete, from a dominant position, with those of recyclers?

Do Ministers think that collection and compliance functions should be separated, and will they consider that during the exercise amending the WEEE regulations? Overall, will Ministers ensure that the overarching priority of the WEEE regulations is to increase recycling rates and improve environmental protection? It is clearly unacceptable for any behaviour by manufacturers to impact adversely on those objectives; that must be looked at carefully. It is important that Ministers take all possible steps, now and in the future, through the introduction of the amended WEEE regulations, to prevent such practices. I hope that Ministers will confirm that there will be strict regulation of the compliance schemes that have driven the kind of protective actions that are now threatening the survival of a once thriving independent market, so that we can ensure that recycling rates, rather than profit margins, are maximised. I am sure that Ministers will appreciate the public policy significance of these issues, and I very much look forward to the Government’s response.

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I am grateful for this opportunity to put on record my concerns about how the Higher Education Funding Council for England—HEFCE for short—will, in 2012-13, allocate its funding to widen participation in higher education, and how that will impact on the Open university, which is in my constituency.

The Open university is a much-cherished institution, and it enjoys widespread support across the country, and in all parts of the House. It has a very impressive record on widening participation in higher education over the past 40-odd years. In the current year, 20% of its new students have come from the 25% most disadvantaged communities in the country. It has 13,500 students with a registered disability, and some 18,000 students working through its access and opening programmes, so it has a very impressive track record.

In the current year, HEFCE is providing some £368 million to higher education institutions across the country to support them in meeting the additional costs of attracting the students whom we are talking about. The Open university receives approximately 10% of that. I am aware of Treasury pressure on the Department for Business, Innovation and Skills to divert some of that funding to other areas of higher education. In this academic year, BIS included the following wording in its annual grant letter to HEFCE:

“for 2011-12 the top policy priorities for targeted funding should be supporting widening participation and fair access”.

I heartily agree with that.

My wish is that similar wording is included in the funding letter for 2012-13 which is due to be published in a few weeks. Without such wording, my fear and that of many at the Open university and in the wider higher education community is that there could be serious unintended consequences for the Government’s laudable goal of widening participation. I am not disputing that there is keen competition within higher education for a slice of the funding cake. There will be many equally worthwhile goals, but I fear that redirecting this money into other aspects of higher education would jeopardise the Government’s ambition to provide as wide a range of higher and further education options as possible. That is a role that the Open university currently performs exceptionally well.

I draw the attention of the House to the recent Business, Innovation and Skills Committee report published in November, which stated:

“Widening participation in higher education has an important impact on future economic prosperity and therefore is worthy of public investment…We welcome any additional investment to remove barriers to participation in higher education.”

I endorse that entirely. Of course, all institutions in the country have to live within their means. I would like to place it on record that the Open university has played its part in this. When the previous Government withdrew funding for equivalent and lower qualifications, that resulted in a significant drop in income for the Open university. It consequently reduced its running costs by some £30 million. To help keep tuition fees low—the Open university has fees of around £5,000, compared with £8,000 or £9,000 elsewhere—it is further reducing its running costs by some £75 million by 2014-15 and some £30 million of that has already been realised, but if the Open university were to lose another £37 million as a result of the redirecting of funding, there would be devastating consequences for its programme of widening participation.

The Government have a good record in this field and have worthy ambitions. The current funding scheme works. I very much welcome the £150 million national scholarship programme and the higher education White Paper published in the summer has a strong ambition to widen participation. I appreciate that the Minister cannot give me or the Open university an early Christmas present by confirming that this money will stay, but may I urge him to speak to colleagues over the next few weeks so that that letter reflects current provision?

I have a few seconds left, Mr Deputy Speaker, so may I take this opportunity to wish you and all right hon. and hon. Members a very merry Christmas? I look forward to being back in the new year.

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Thank you, Mr Deputy Speaker, for calling me to speak in this Christmas special.

Thanks to the vision of a Labour council supported by a wide range of stakeholders and community groups in north Lincolnshire, Scunthorpe now has a fantastic new performance venue, the Baths hall. On Sunday, the Scunthorpe choral society joined forces with the award-winning Scunthorpe junior co-operative choir to give their annual carol concert in that state-of-the-art venue. Their performance was fantastic. However, many people booking tickets for the cover price of £10 found themselves paying an additional £1 of credit or debit surcharge—a hidden cost not seen until the purchase was in progress. That is just one illustration of the widespread use of surcharges, which I want to highlight today.

It is estimated that 94% of the UK adult population holds a debit or credit card. Debit and credit card users are facing increasingly high surcharges when purchasing goods and services. Rip-off surcharges are often hidden until the end of the payment process, so it is impossible to tell how high the charges will be until the final payment is made. The argument is made that these charges cover transaction costs. In truth, it costs companies only about 20p to process a debit card payment and no more than 2% of the transaction value for a credit card payment.

In March, Which? asked the Office of Fair Trading to investigate the charges for paying by card. It is not only individuals and businesses that suffer from the practice of excessive surcharge, but retailers too. The British Retail Consortium representing retailers believes that Which? was right, in its super-complaint, to draw attention to excessive charges levied on customers using debit or credit cards. Retailers themselves face significant difficulties when handling card payments. The widely varying fees that banks levy on retailers for processing the different payment methods is a big issue for them.

Results from the British Retail Consortium’s most recent cost of collection survey show that, on average, the banks’ charges for processing a credit card transaction are 15 times higher than for cash, but responsible retailers protect card-using customers from the banks’ excessive charges on them. Responsible retailers have been engaged in a long-standing campaign to bring those fees down to levels that reflect the actual, very low, costs of processing transactions. The BRC believes that banks should play fair by their customers, as responsible retailers do with theirs.

In times of austerity, when as a nation we must all find ways to save money and tighten our belts, tackling excessive surcharges seems a fair and reasonable way to put money back in the pockets of consumers, squeezed family budgets and businesses. Action has already been taken in order to try to tackle excessive surcharges. The Which? super-complaint, challenging the practice of excessive surcharging, was upheld in June by the Office of Fair Trading. Over 43,000 members of the public pledged their support for the campaign. The OFT recommended that businesses make payment charges transparent by including the price of transaction fees in headline prices.

The OFT also recommended that the Government take regulatory action on surcharges. There are two options: the Government could wait until 2014 and implement the consumer rights directive that has recently been passed by the European Parliament. That will place a limit on the amount of a surcharge. However, that will only cap surcharges, not eliminate them altogether, and nothing will happen until 2014. Two years is a long time to wait, and we need a solution now as surcharges are hurting family pockets and businesses now. An alternative and, I believe, preferable option would be to amend existing UK law, namely the payment services directive. An amendment to article 52(3) would not only control surcharges, but could eliminate them completely. As the hon. Member for Cambridge (Dr Huppert) said earlier, it is important that action is taken now.

In closing, I reiterate that these rip-off surcharges are just that—a rip-off. They rip off individuals, families and businesses. At a time when we want to cut costs and save money, I urge the Government to take urgent action. I urge Ministers to think clearly and act swiftly. Let us not wait for the EU directive to take effect in 2014. Let us show the public that we as a Parliament can act speedily and responsibly in the interests of our people, and end these rip-off surcharges as quickly as possible by using the powers available to us in this House.

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I join others in wishing you, Mr Deputy Speaker, and the rest of our colleagues a very happy Christmas.

The theme of this debate has already become apparent. It is warnings against excess, calls for a fairer and more prosperous society, requests for things we want in the new year—not from Father Christmas, but from Ministers —and an optimistic belief that Parliament can change things. I join in that optimism. I specifically associate myself with the call from my hon. Friend the Member for Stockport (Ann Coffey) that the market in the borough of my birth may be more prosperous with every year that passes.

I have been raising such issues ever since I entered Parliament, and the issue that I want to highlight this year is high pay. We have talked a lot about low pay but now, mercifully, we are also talking about high pay. When Mrs Thatcher was Prime Minister, I intervened in her final speech here to criticise the Tories for their record on wealth inequality. Predictably, she was unapologetic. It was her clear view that rising wealth inequality was not a problem so long as we were all getting wealthier: never mind about the gap.

Sadly, Labour adopted the same policy in practice. Rich people created wealth and they should be rewarded—for example, by cuts in capital gains tax—so that they could invest more of their unearned income in wealth-creating projects. I am afraid my colleagues never shared that view, and we do not share it now: I think we have been proved right. We have seen not greater redistribution but greater inequality between the rich and the poor. A very good OECD report produced in October 2008 entitled “Are we growing unequal?” shows that the top 1% in this country now own 14% of the national wealth. Department for Work and Pensions statistics covering the last decade or so of the Labour Government show that the average household income of the top 10% rose by almost 40%, whereas the average household income of the poorest 10% fell by just over 10% over the same period. That is not the way to make a just and fair society. Therefore, I think that it is right to return to these issues and remind colleagues that the figures continue to show some great inequalities.

According to the Office for National Statistics, bonus payments across the whole economy in the financial year 2010-11 totalled £35 billion, the same as the previous year, so there has been no reduction, despite the austerity facing the country. The total amount of bonuses paid in the financial insurance industry in 2010-11 stood at £14 billion, which is also identical to the figure for the previous year. Earlier this year, in order to justify Stephen Hester’s £7.7 million pay package, the chairman of Royal Bank of Scotland said:

“We need talented and motivated people and we need to be able to pay them fairly”.

That was after the company made losses of £1.1 billion in 2010. In 2009, at the RBS meeting in Edinburgh to discuss Sir Fred Goodwin’s £16.9 million pension, shareholders objected, but even though 90% of them voted down the remuneration report, they had no power to amend his pay because he had an advisory role.

There is a perverse logic to such bonuses: people at the top are rewarded in order to make the company do better, but even if it does not do better those people are still rewarded in the hope that that will turn things around. I think that people at the top sometimes forget that they stand on the shoulders of others—the people at the bottom, such as the administrative workers, electricians, cleaners and manual workers, without whom there could be no profits for those companies at all.

My party’s manifesto at the last election proposed that there should be fair pay audits for every company with more than 100 employees in order to combat discrimination in pay, and that all public companies should be required to declare in full the remuneration of anyone paid £200,000 a year or more. The coalition agreement states:

“We will bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial services sector; in developing these proposals, we will ensure they are effective in reducing risk.”

We now have an opportunity, because there have been further reports that are very helpful. For example, the One Society report produced in September made it clear that the pay of low-paid workers in the UK is literally one third of 1% of the pay of their chief executives. The High Pay Commission report published a couple of weeks ago confirmed that last year executives of FTSE 100 companies awarded themselves a 49% pay rise.

The Government have just finished their consultation on executive pay, and I want them to be robust in the new year and to continue to drive forward change in our tax system. I want what the Prime Minister said about the public sector, which was that there should be a fair ratio between the highest and lowest-paid, to be reflected in the private sector. I welcome the fact that the salary of every civil servant earning more than £150,000 will be published. It should be similar in the private sector. Just as the Government have started well by reducing tax on the low-paid and increasing tax on those who earn more, I hope that we will see the transfer of powers, as the Prime Minister said, from the boardroom to the shareholder, and that people on the work floor will be involved in decisions on the salaries of people at the top. What people want this Christmas is not a multimillion pound bonus, but for everyone to be paid fairly, and to pay their fair share too.

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I start by wishing everyone a happy Christmas. I have been waiting a considerable time for this debate, and I am glad that it is now upon us. I would like to talk specifically about businesses and growth and some of the barriers affecting growth in my constituency.

By way of background, 83% of the local work force in my constituency are employed by small and medium-sized enterprises, which is around 15% more than the national average. Jobs and growth in my constituency are disproportionately dependent upon the success of small shops and medium-sized businesses. My constituency is home to around 3,800 SMEs that each employ fewer than 250 people across a wide range of sectors. I pay tribute to all the business men and women across the county of Essex. We are a highly entrepreneurial constituency full of small businesses, because they do a hell of a lot to create vital jobs.

My constituency has some outstanding world-class businesses and family-run businesses, such as Crittall Windows, an award-winning international company. We have the world-famous Wilkin & Sons jam factory in Tiptree, an outstanding chocolate maker, Amelia Rope, and a worldwide logistics company called Simarco. They all exemplify Essex’s attitude and status as a county of entrepreneurs. As ever, with most independent and small businesses, given the right kind of macro-economic and fiscal framework, they will adapt to the changes and challenges thrust upon them by any Government, by international circumstances and—dare I say it?—by Europe.

The Government deserve much praise for the actions already taken to support small businesses and growth, and the decision to reduce the small profits rate to 20p stands in stark contrast to what we saw under previous Governments. We also heard from the Chancellor last month that he will now halt the fuel duty rise in January, which is welcome news for small businesses. Businesses are now eagerly awaiting the promise of red tape reform. The one-in, one-out rule is all well and good, but all I hear is that we should just have a bonfire, throwing many out and bringing none in.

There are still many barriers to growth. Interestingly, in the past 10 days we have heard about the Portas review. I should declare an interest as the daughter of small retailers; my parents are shopkeepers. I think that we all recognise the fact that our high streets are having a very challenging time. They need reform. Even in a place such as Witham, where businesses work hard, we have empty shops on our high street; it is a fact. Although there is no silver bullet or magic wand, the Government and local authorities need to start looking at the recommendations and implementing some of the excellent proposals that Mary Portas has outlined. I would like local authorities to become really ambitious in their agenda for growth and in how they support business, which might mean removing some of the licensing and planning restrictions that have been detrimental so that we can find ways to boost growth on the high street and make our town centres far more vibrant. We must also support national market day. Those of us who represent market towns want to see much more emphasis on that area. I hope that the Government will start prioritising some of the reforms she advocated.

The other area is red tape, including the ever-burdensome red tape that comes from the European Union. For example, the agency workers regulations will cost Britain £1.5 billion. To put that into some kind of context, that is more than the apprenticeship budget alone, which we debated last night. I would rather see that money go into businesses and job creation in this country.

The other concern for Essex and my constituency is infrastructure. Essex and the constituency are well placed. We have Tilbury, Felixstowe, Harwich, the A12 and the A120, but our roads are struggling because there is no infrastructure investment. We also desperately need infrastructure investment in our railways in Essex. We need to get freight off the roads and back on to the railways. Anything that can be done to deal with that area would be useful, because ultimately businesses will grow if we can sort out our infrastructure problems.

Finally, I want to touch on banking. I hear endlessly from small businesses in my constituency that banks are simply letting them down, not on a small scale, but on a macro scale. I am concerned by the actions of the banks, which are effectively causing my constituency and small businesses misery. While the small businesses are creating jobs, the banks are leveraging, with shocking terms and conditions and fees being added to business accounts. They are dealing with individuals and small businesses in quite a threatening way. I had one dreadful case in my constituency involving one particular businessman, about whom I have written to Ministers this week, and I should like an official, if not a Minister, to meet him. Businesses now feel compelled by aggressive banks to sign up to unfavourable terms and conditions, and that has to change. I hope that Front Benchers will respond positively to the issues that I have outlined and give small businesses an early Christmas present by committing to remove some of those barriers.

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I thank you, Mr Deputy Speaker, and the Backbench Business Committee for giving me the opportunity to rediscover my voice in the Chamber, and for the format of the debate, so that one does not have to sum up 46 contributions in one go.

I shall make a couple of general remarks about the importance to this country’s recovery—following the legacy of deficit and recession that the Labour party left us—of regenerating a healthy economic environment. It is the key to prosperity and to generating growth and jobs, but it is rare for Members to spend time singing the praises of the private sector. We spend much of our time focused on the public sector and on the problems that arise within the private sector, but rarely do we celebrate the fact that the private sector accounts for four out of five people in employment and the majority of all taxes generated, employing people’s creative juices and the entrepreneurs of the future to drive the economy forward.

This country under this Government has started to have some success in the private sector. Exports in particular have grown by 16% since May 2010, and jobs generated in the private sector, as the Prime Minister reminds us, are picking up the slack where jobs are being cut in the public sector, so it is vital that we have a healthy private sector economy.

I will not respond to the hon. Member for Birmingham, Yardley (John Hemming), because his comments did not relate to the Department for Business, Innovation and Skills, but I will ensure that the Justice Secretary is aware of his concerns about tribunals in the care sector.

I shall therefore address the role of retail, which the hon. Member for Stockport (Ann Coffey) and my hon. Friend the Member for Witham (Priti Patel) raised. I am a committed believer in the importance of retail for generating growth in the economy, not least because before I became a Member I founded a business that started as an idea and ended up employing 2,500 people in 144 stores throughout the country. I completely understand the importance of retail as a force for regeneration not just on the high street but in the wider economy, and its potential for adding significant jobs where retail formats are able to grow.

The hon. Members for Cambridge (Dr Huppert) and for Scunthorpe (Nic Dakin) said that the impact of online sales poses particular challenges for retailers, and that is why it was so important for the Government to receive the report from Mary Portas on how we revitalise our high streets. The Government intend to look at her recommendations very seriously and will report on them next year.

The key message that I learned from my time in retail was that to attract people into stores, whether one’s store is in an out-of-town centre or on the high street, one has to make it an attractive experience. Retail is becoming essentially a leisure business, so I was almost enticed to visit Stockport when the hon. Member for Stockport mentioned the cultural experience day ticket, something that other areas—perhaps even my constituency of Ludlow—may wish to take on board.

My hon. Friend the Member for Fylde (Mark Menzies) referred to the great success of the enterprise zone initiative. The Government have announced 24 enterprise zones, including one in his constituency, and I congratulate him on his achievement in securing it in response, in particular, to the loss of jobs at British Aerospace. That is a fine example of how strong constituency advocacy can achieve results quickly under this Government. He was concerned specifically about the impact of differential capital allowances, and he will be aware that enhanced capital allowances are available only for enterprise zones in assisted areas, which his constituency is not, but I will ensure that the Chancellor of the Exchequer is aware of my hon. Friend’s concerns, which I will forward to my right hon. Friend.

The hon. Member for North Ayrshire and Arran (Katy Clark) mentioned the challenges to those many people in all constituencies throughout the country who were affected by the collapse of Farepak back in 2006. I have constituents who are still awaiting payouts, as does every Member, I suspect. The insolvency was particularly complicated, with 116,000 claimants who were initially hard to identify because they were clients of some 21,000 agents and the company did not keep good central records.

Processing claims and distributions to rightful claimants is therefore a costly exercise, and the main reason why funds have not yet been disbursed to those who have lost money—to creditors—is that there can be only one distribution, and the administrators are determined to ensure that they make the maximum recovery so that they can make that single distribution. Otherwise, the cost of distributing will eat into the funds available for recovery. That is the main reason why it has not taken place yet.

Creditors are represented on a creditor committee. They are in regular and close discussion with the administrators about how the distribution is made, and they are also approving all fees paid to the administrators. There is a process—in which all creditors, including all those individuals, are represented—for securing the proper information about what is going on.

The hon. Members for Cambridge and for Scunthorpe referred to the challenges posed by hidden surcharges through, in particular, online purchasing, which, as I said earlier and they identified, is a rapidly growing part of our daily lives. As cash payments and payments by cheque decline, and as payments by card accelerate, it is important to ensure that products are sold transparently in relation not just to the top price, but through comparison websites, so that online shoppers can make a genuine comparison. The Government are looking carefully at all the options for legislation arising out of the Office of Fair Trading’s welcome report.

Hon. Members may have seen that earlier today the OFT made another welcome announcement, on measures to address the cost of travel money when purchasing foreign exchange in this country and through the use of debit and credit cards overseas. That will be done as a voluntary arrangement, and most of the largest banks in the UK have agreed to place a zero charge on foreign exchange purchases in this country. Through the UK Cards Association and the British Bankers Association, a new code will be set up so that charges levied on transactions overseas are transparent, a development that I am sure hon. Members will welcome.

The hon. Member for Stretford and Urmston (Kate Green) has a particular interest in the waste electrical and electronic equipment directive—I hesitate to call it WEEE, because that can be misinterpreted outside this place—and a constituency interest through a company that is a major recycler of electrical equipment. I have seen her correspondence with Ministers in the Business Department. She has raised a number of points about how the regulations might be beefed up, and I shall ensure that following this debate the consumer affairs Minister, the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey) is made aware of her concerns.

My hon. Friend the Member for Milton Keynes South (Iain Stewart), who is a doughty champion of the Open university, not least because it is the largest university in the country and, perhaps, because it is based in his constituency, raised concerns that have been well flagged by current students at the Open university. On the Government’s e-petition website there are no fewer than three petitions, one of which has 42,000 signatures, calling for the Government to maintain their widening participation funding for the next academic year.

I can confirm that widening participation and social mobility remain key priorities for this Government, and by way of example we have this year, for the first time, for the coming academic year extended access to loans for tuition costs to part-time students, many of whom are at the Open university. We are also providing more financial support for those from poorer families. The maintenance support grant for those from households with an income of less than £25,000 is rising from under £3,000 to £3,250 for the next academic year. The national scholarship that is coming into effect from next September will ultimately generate some £300 million of additional cash to help to support tuition fees for some of the most disadvantaged. The Department has raised with the Office for Fair Access concern about whether funding for part-time courses will continue to receive wider participation funding, and it will be considering the issue carefully. As my hon. Friend said, the Minister is due to submit his letter in January, and that will give guidelines to the Higher Education Funding Council as to how it will continue to demonstrate its commitment to widening participation.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) has a distinguished track record in this House for championing social mobility, and it was therefore no surprise that he wanted to talk about the High Pay Commission. As he knows, the Government are determined to get on top of a challenge that is another legacy of the previous Government, who, in 12 years, oversaw a widening disparity between boardroom pay and pay on the shop floor that needs to be addressed. We want to see transparency, proper accountability for shareholders, and a sense of responsibility from Britain’s boardrooms. Last September, we published a discussion paper on executive remuneration in conjunction with a consultation on the future of narrative reporting for companies. That put forward wide-ranging proposals on improving the link and aligning executive pay more closely to company performance. The consultation closed last month. Earlier this month, the Treasury launched a second consultation, on bank executive remuneration. That is consulting on arrangements that would extend to the eight most highly rewarded executives below board level disclosure requirements on their pay. It will report at the end of February, and I am sure that the right hon. Gentleman will be interested in what it has to say.

If I have not dealt with any Members’ points sufficiently, I am sure that the Department will be able to follow them up in due course. I wish you, Mr Deputy Speaker, and everybody present a happy Christmas.