House of Commons
Tuesday 8 January 2019
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Business, Energy and Industrial Strategy
The Secretary of State was asked—
Jobs (Devon and Cornwall)
Happy new year to you, Mr Speaker, and to everyone else. The two local enterprise partnerships covering the area—Cornwall and Isles of Scilly LEP, and Heart of the South West LEP, which includes Devon—are receiving £317 million through the local growth fund to drive regional development. That includes a £3 million investment in the Electronics and Photonics Innovation Centre at the White Rock business park in Paignton, which helps to support skilled jobs in a key local growth sector.
As my hon. Friend mentions, Torbay’s £8 million EPIC centre will open later this year, helping to boost our vital photonics industry. What further support can his Department offer to help boost Torbay’s high-tech sector?
I congratulate my hon. Friend on everything he does for employment in this area and in his constituency. He knows that my Department is working with Heart of the South West LEP, which is leading the development of our local industrial strategy. Torbay is actively engaged in that work. I believe the strategy will identify the particular strengths of the region and future opportunities for increased productivity, including in sectors such as photonics.
The development of marine industries in Plymouth and across Devon and Cornwall is a really important part of our local economy. Will the Minister agree to meet a delegation from Plymouth to look at how the creation of the UK’s first national marine park could trigger more investment in our marine technologies and industries in the west country?
It would be a pleasure. The hon. Gentleman and I have met before to discuss such subjects, and I am happy to do so again.
In my constituency, 85% of employees are employed in small businesses, which tell me they struggle to find the skilled workers they need. What can my hon. Friend’s Department do with the Treasury and the Department for Education to ensure that small colleges in particular have the funding they need to provide those skills?
As my hon. Friend knows, my Department is part of the picture; he correctly says the DFE is responsible for skills, but that is an important part of our industrial strategy, both nationally and locally. We are really pushing to put the skills agenda at the top of LEP programmes and everything else to do with that, because we realise, as he says, that small business will power the economy of the future.
The south-west is one of the fastest growing economic areas in the country, predominantly in tourism and tech. With the devaluation of the pound, many people have decided to have holidays in Cornwall, and we have tech-based businesses such as Microtest, a health-based solutions company in my constituency. People are making lifestyle choices about where in the country they want to live. What more can we do to facilitate moves away from the city to the coast?
As someone with previous experience of business in the south-west, in the tourism industry, I understand exactly what my hon. Friend says. The Government’s strategy is very much based on regional devolution—LEPs in particular—and areas such as his will see the benefits of that in the future.
Supply chains between the UK and the EU are vital—they support at least 200,000 UK traders and around 55,000 manufacturing jobs in Scotland alone. The deal the Government have negotiated with the EU, by avoiding customs checks, will protect supply chains and jobs right across the UK.
I ask this question against the background of yesterday’s unthinkable dry run for a no-deal Brexit— 80 lorries is hardly the same as 6,000. I represent the furthest-away part of the UK mainland. I have mentioned before in the Chamber Mr William Calder, who runs a fish food company in Scrabster. Half a day’s extra delay in getting his fish products to the European market will ruin the gentleman. Does the Minister see just how dangerous the future could be for my constituents?
I agree with the hon. Gentleman. That is why there has been consistent support, especially in Scotland, from organisations such as the National Farmers Union of Scotland and the Scotch Whisky Association. Those who depend on the export trade, including the logistics he describes, have urged the House to back the deal, and I hope he joins us in doing that.
The importance of Dover-Calais is unquestionable. What estimates has the Department made of the implications for the supply network of any reduction in capacity between Dover and Calais?
My right hon. Friend knows that much of the just-in-time production goes through the strait of Dover, and estimates suggest an impact of a reduction of about 80% of capacity between the narrow strait. In my view, it is essential that we avoid that disruption, which would have implications right across the United Kingdom, including in Derbyshire and indeed Scotland, as we have heard.
This week, I received correspondence from a small business owner and constituent of mine who shared his fears about the issues Brexit could cause his chemicals business. The EU is where the majority of his sales are made and where he sources his raw materials. Can the Secretary of State tell us why his Government will not rule out a no-deal Brexit now, which is putting so many businesses in my area and across the country at risk?
The hon. Lady is right that the chemicals industry is a good example of a very integrated industry across Europe. I met the leaders of the chemicals industry in the week before Christmas, and they were very clear that what has been negotiated in the withdrawal agreement and political agreement achieves what they need, which is, first, to avoid no deal and, secondly, to be able to continue what has been a very successful industry, including in the area she represents.
With the worrying news that German output has fallen by 4.7%, what can Britain do, post Brexit, to help the German economy with a thriving British economy?
It has always been my view, and I know it is my hon. Friend’s view, that the more we can trade on what has been a very successful model the better. He represents a west midlands constituency and knows how important it is in the west midlands that we have flourishing trade, to the benefit of our economy and those of our neighbours and friends on the continent.
From Airbus in Bristol to Nissan in Sunderland, millions of British jobs depend upon supply chains that crisscross the channel. Ministers fantasise about replacing them with American or Australian ones, and then, as they did yesterday, hire 80 trucks to drive around Kent in a ghost of Brexit future pantomime of the chaos to come. The Minister for Business, Energy and Industrial Strategy has acted honourably in saying he will not be part of a Government who allow a no-deal Brexit, so will the Secretary of State reassure Aston Martin, Brompton the bicycle manufacturer, and the other businesses stockpiling parts—spending money that could be spent creating jobs—by saying he understands the requirements of business and geography and rule out a no deal now?
I completely understand the requirements of business, including the manufacturers the hon. Lady mentions. It is essential that we be able to continue to trade, which is why I have always been clear—representing very strongly the views of small business and large business—that no deal should not be contemplated, but the way to avoid no deal is to do what the motor manufacturers, the Institute of Directors, the Federation of Small Businesses, the British Chambers of Commerce and all the business organisations say we should do, which is vote for the agreement that will come before the House next week.
Lang may yer lum reek, Mr Speaker.
One way the Government are looking to maintain cross-border supply chains is by Government tender to shipping companies, but is the Secretary of State happy about the precedent set for UK businesses? His colleague the Secretary of State for Transport has awarded a £14 million contract to a company with negative assets of nearly £400,000, no ships and terms and conditions copied from a takeaway, while the contract itself seems to have been awarded on questionable legal grounds. Is this the standard he expects for all UK businesses tendering for UK Government contracts?
It is evident that avoiding no deal is an essential task for all of us in the House, and I hope that in the days ahead the hon. Gentleman and other hon. Members will take the opportunity to obviate the need for those contingencies. The Secretary of State for Transport has an opportunity to come to the House later today, but it seems to me prudent and responsible for every Department to prepare, on a contingency basis, for no deal, while also being firmly resolved to avoid it.
The Secretary of State has not answered the question. Will all UK businesses see such largesse from the Government in respect of procurement contracts? One of Seaborne’s directors ran a business that went into liquidation owing HMRC nearly £600,000, using employee benefit trust tax avoidance schemes. According to the director, the Government did not even consider the money owed to Her Majesty’s Revenue and Customs to be relevant. Is that a sign of a Government who are out of control over Brexit?
I hope the hon. Gentleman will agree that, as I have said, every Department should make preparations against the avoidable contingency of no deal. The Secretary of State will describe the procurement processes for which the Department for Transport opted, but it is fair to observe that not a penny of Government money has been paid to the company, and I understand that it will be paid only on receipt of services provided.
Given that nearly all the roll-on/roll-off lorry traffic between the Irish Republic and the EU travels across the UK motorway network to Dover, what co-operation has been offered by the Republic to mitigate a no-deal Brexit?
My hon. Friend is right to point out that the impact of the Dover strait extends to our trade across the Irish sea. He knows that the negotiation has been with the European Commission and the European Council rather than through bilateral negotiations with individual member states, but I agree with him that the disruption that would occur would affect our trade across the Irish sea as well.
Order. May I gently say to colleagues that we have a lot to get through? We need to speed up.
We will be undertaking a statutory review of the effectiveness of the pubs code and the Pubs Code Adjudicator. I welcome the recent publication by the adjudicator of arbitration decisions, which will increase transparency in relation to how the code is working in practice.
At a recent meeting of the all-party parliamentary group on pubs, we heard from many tenants who had attempted to avail themselves of the “market rent only” option under the pubs code, but whose attempts had been frustrated. Will the review to which the Minister has referred involve a full and open consultation to which members of the public will be able to contribute, and which we will all be able to read afterwards?
I recognise the hon. Gentleman’s commitment to this issue. We are currently working out how we will carry out the review, and, under statutory regulation, we need to do that until the end of March. Of course we understand some of the concerns that have been raised by people who have been affected; we will take account of their views, and I will ensure that those views are heard.
As the Minister will know, in the case of tenanted pubs the rent is partly set according to the volume of beer sold. However, there is a long-standing grievance about a discrepancy between the amount of drinkable beer in a cask and the volume of the cask itself. Will the Minister meet me—and some of my constituents, who are deeply concerned about the issue—to discuss the “72 pints” campaign?
We recognise that a number of issues affect the pubs community. The Government have taken some important measures relating to beer duty and business rates to help pubs, but I should be happy to meet the hon. Lady and her constituents to discuss the position.
Between April and September 2018, 33 pubs a week closed and were either demolished or converted to homes or offices. The pub industry is in free fall, and communities are suffering as they see their vital community hubs diminished. What strategy, if any, have the Government to secure a long-term sustainable future for the industry?
The Government have taken action to secure the future of pubs. We have frozen beer duty, with the result that a regular pint of beer is 2p cheaper than it would have been if we had increased the duty in line with inflation. We have offered the business rate discount to retail properties, and we estimate that 75% of pubs will be eligible for it. That has cut pubs’ bills by a third for two years. We recognise the importance of pubs to our local communities, and we are taking action. For instance, as I have said, we will be reviewing the pubs code and the success of the Pubs Code Adjudicator.
All of us in this House should celebrate the UK’s global leadership in decarbonising our economy: we have had the fastest rate of decarbonisation in the G20 since 1990, and part of that leadership has been through very substantial investment in renewable technology, including subsidies totalling £52 billion since 2010 and auction design and research and development investment. It is paying off: in the third quarter of last year we generated over a third of our energy from renewables, and our support is continuing with over half a billion pounds committed to the contracts for difference process and almost £200 million for cost-reducing innovations.
Scottish businesses such as the innovative Artemis in my constituency have developed world-leading tidal and wave energy technologies, but requiring these early-stage businesses to compete with the more mature offshore wind industry for CfD subsidies means there is often no viable route to market for emergent technologies. Will the Minister consider having a three-pot auction for new technologies, including wave and tidal, so there is no direct competition with more established technologies?
The hon. Lady raises an important point. We want to continue to invest in technologies that have the potential both to decarbonise and drive global exports, and that is certainly an area that could contribute, although not at any price: we will not rerun the debate over Swansea, which would have been the most expensive power station the country had ever built and created just 30 jobs. There are potentially better, more valuable projects and I am always happy to look at innovative proposals coming forward to see how we might support this technology.
As well as the obvious, 31 March sees the end of the export tariff on electricity exported into the grid by solar photovoltaic systems. After that, big firms will end up receiving free electricity from all new solar PV installations, which are mainly small businesses and individual households, so they will effectively be subsidising the giants. Will the Government consider a net metering scheme, whereby the difference between electricity consumed and exported into the grid only is paid for, to rectify this burning injustice?
I admire the hon. Lady’s passion. I feel I am rather front-running my answer to Question 9, which I know the hon. Member for Swansea West (Geraint Davies) is teed up to ask, but I will publish today the consultation on the Government’s proposals for a smart export guarantee to bring forward this valuable source of energy at a price so that people are not providing it to the grid for free, and to support its development in what we want to call our smart systems plan going forward.
While supporting new energy technologies is of course important, so too is supporting technologies that make our energy production more efficient, and many of these technologies are low carbon so they help us meet our climate change targets and cut consumers’ household bills. Can the Minister update us on progress made in this area and on the call for evidence I have asked for on this subject?
My hon. Friend has been a doughty campaigner on this issue and will know that we have contributed almost £20 million to the industrial strategy heat recovery fund, and the low-carbon heating technology innovation fund is also receiving funds of up to £10 million. I entirely agree with my hon. Friend’s principle. I am not convinced that a further consultation is required, but I am always happy to discuss it with her.
Is it fair to continue to subsidise solar panels by charging higher prices to other customers who could not possibly afford that investment?
No, and that is why the intention to close the feed-in tariff scheme was signalled many years ago: it has cost to date over £5 billion and we have a legacy cost of over £1.5 billion to fund that scheme going forward at a time when the price of solar is tumbling. We know that many companies are bringing forward large-scale solar installations without needing subsidy.
I have regular discussions with my right hon. Friend the Scottish Secretary regarding all the support we are providing for the BEIS Scottish energy sector. I hope that the hon. Gentleman will join me in celebrating the fact that we have opened up the CfD mechanism to the offshore wind provision that is coming for remote island projects—[Interruption.] He used to think that that was a very good thing. We should also never forget that it is UK bill payers collectively who have invested in the success of UK renewable energy. We will continue to review the potential for onshore wind, but the hon. Gentleman will know that the Scottish Secretary and I were both elected on a manifesto that said that further subsidy for large-scale onshore wind was not required or necessary.
I very much support renewable energy, but many of my constituents in the Scottish borders feel that we now have our fair share of onshore wind, so can the Minister assure me that nothing in Government policy will promote onshore wind farm developments over other forms of renewable energy sources?
That is exactly the point about technology neutrality. I refer my hon. Friend to the Scottish Government’s own onshore wind policy statement, which suggests that the number of onshore wind applications is expected to increase by more than 70% on the basis of current planning applications. The current system is clearly working to bring forward onshore wind in the windiest parts of the United Kingdom.
Given how vital offshore wind is to Britain’s future electricity supply, and how it is increasingly providing good value for money, how can the Minister justify allocating just £60 million to next spring’s CfD auction?
I thank the right hon. Gentleman for recognising the incredible contribution that offshore wind can make, and I hope he will join me in wishing great success to our negotiating teams in bringing forward the vital sector deal. The point is, given that the price has tumbled since he was one of the people who designed the excellent auction structure, that we should be able to bring forward the amount of capacity we have said we need—1 GW to 2 GW—with that amount of subsidy. The system is working to get us to subsidy-free provision of this extremely important offshore wind energy.
The Minister will be aware that the recent EU Court judgment, which effectively freezes the capacity market in the UK, turned substantially on the lack of level playing field access to capacity market support for new low-carbon energy technologies such as demand-side response. Does she intend to respond positively to the judgment by recasting the capacity market to reflect remedies for this lack of equal access, or is she perhaps hoping that, after a decent interval—and a lot of damage to existing participants in the capacity market—normal service will be resumed?
The hon. Gentleman raises an incredibly important point. We have been working on this issue closely with the industry for several months since the judgment came forward, and it is absolutely right that we reassure the industry and investors of our commitment to holding auctions in the near future to ensure electricity supply for next winter, and that we do all that we can to ensure that this market is put back on a legal and orderly basis. It does work—it is the envy of many countries around the world—and we are working closely with Ofgem and the industry to ensure that we can take that market capacity structure forward.
The Government support businesses throughout the UK by encouraging innovation, investing in infrastructure and skills and, more importantly, building long-term partnerships with businesses as part of our modern industrial strategy. We have demonstrated our support for the importance of our supply chain through the automotive, aerospace and nuclear sector deals.
I am grateful to the Minister for that reply. Fabrication yards in UK ports have supply chains that extend throughout the UK, but there is real concern for their future. Can the Minister confirm that the oil and gas and the offshore wind sector deals will make provision for realising the full potential of those yards and their supply chains?
I certainly can, and I welcome the deal proposals that have been put forward by both the offshore wind and the offshore oil and gas sectors.
I am sure that the hon. Lady will be delighted to know that we are working closely with the sector. I have some experience of project bank accounts in the construction sector and I have seen them work. We will look very carefully at this.
Precisely what support is being given to the steel industry and its supply chain?
The hon. Gentleman and I frequently speak about the steel industry, and I meet regularly with the trade body, UK Steel, and all the different companies to monitor the future carefully. The industry is important to us, and I am still hopeful that we can work on a sector deal, so I am interested to hear proposals from the various companies.
UK Space Industry
The UK plays a leading role in space science and exploration, and our commercial sector is globally competitive, underpinned by Government support of up to £370 million a year. We have further committed £92 million to develop options for a possible UK global navigation satellite system to maintain the UK’s security capabilities, and £31.5 million to kick-start small satellite launch from the UK as part of our modern industrial strategy.
I can tell from that answer that my hon. Friend recognises the increasing importance of the space sector in our everyday lives, particularly for communications and broadband. Does he therefore agree that elements of the space sector should be designated and treated as part of the UK’s critical national infrastructure, thus receiving the extra support and potential financing that such designation would provide?
My hon. Friend is right that space capabilities are fundamental to UK prosperity and security. Every day, we rely on telecommunications, earth observation, position navigation and timing services from space. Many of the parts of the UK’s critical infrastructure—from telecommunications to transport—also depend on services from space to operate effectively, and that is why the space sector is designated as a critical national infrastructure sector, with efforts focused on improving the security of our critical assets.
Does the Minister not understand that the aerospace industry is crucial to the future of our country? A company that operates in my constituency made components for the Mars probe, and such firms, which are at the leading edge of technology, are terrified by the chaos of the possible no-deal Brexit that the Government are leading. The supply chains are so complex that the company in my constituency faces ruin, as does the country’s whole aerospace industry under this Government’s watch.
I congratulate the company in the hon. Gentleman’s constituency on its success with the Mars landing. I recently went to Imperial College to congratulate the team that created the sensors that detected the first sounds on Mars. It is crucial to say that our commitment to the European Space Agency is independent of our relationship with the EU. We put in support of £370 million a year that allows us access to a market worth £6 billion. When it comes to ensuring that we have stability and security for the company in the hon. Gentleman’s constituency, I look forward to seeing him in the Lobby next week supporting the Government’s deal.
Last week, while the Chinese were exploring the dark side of the moon, NASA was 6.5 billion km away on the far side of Neptune taking photos of Ultima Thule, and the sensors that took those images were made in Chelmsford. Will the Minister therefore join me in giving a massive shout-out to everyone at Teledyne e2v and congratulating them on this world-first achievement?
Absolutely. I join my hon. Friend in congratulating Teledyne e2v on its involvement in NASA’s New Horizons mission. The stunning image of that distant world showcases UK technology at the leading edge of space exploration. As I said, we have already detected the first sounds from Mars through a project led by Imperial College and the University of Oxford, and Surrey Satellite Technology will unveil tomorrow its completed build platform for the Eutelsat Quantum—the first geostationary telecommunications satellite that will be fully reconfigurable in orbit—which highlights the UK Space Agency’s continual successes.
Thank you. We are now considerably better informed.
Will the Minister outline how many new jobs have been created to meet the need for 30,000 new employees that was highlighted in last May’s “Prosperity from Space” report?
The sector currently employs around 38,500 people and has grown significantly since 1999-2000, when 14,651 were working in the sector—that represents an annual growth rate of 6.7%. The UK has committed to ensuring that we grow our share of the global space market to 10% by 2030. That offers huge potential for increasing not just our share of the market, but the UK’s prosperity and productivity. I hope that the “Prosperity from Space” report, which was published by the space sector and my predecessor, my hon. Friend the Member for East Surrey (Mr Gyimah), whom I thank, will lead to a deal for the space sector and, potentially, to investigation of a national space programme—
Order. I do apologise, but progress is not just too slow; it is too slow.
People in Insecure Work
The Government’s good work plan represents the largest reform to employment rules in over 20 years. It includes measures to boost transparency and tackle one-sided flexibility for those in insecure work, and I have already tabled legislation in Parliament to take forward the programme.
A recent Resolution Foundation report shows that barely half of agency workers remain in one job beyond six months, making the Government’s arbitrary timeframe of 12 months before the right to request a direct contract kicks in totally meaningless. Labour has committed to giving all workers equal rights from day one; why have the Government not committed to doing the same?
The hon. Gentleman will welcome the reforms that have been made to deal with insecure work and, in particular, to do something that has been campaigned for by the trade union movement and supported by many employers, which is to remove the Swedish derogation that has provided a loophole for employers to avoid those rights. That legislation is now before the House, and I hope he will support it.
Does the Secretary of State agree that the recently introduced right to request guaranteed working hours is not sufficient to protect workers on zero-hours contracts?
No. This is a very important extension of the rights of people on zero-hours contracts. It is important to recognise, first, that the number of employees on zero-hours contracts remains very small and, secondly, that most of those on zero-hours contracts want to have that flexibility. Those who do not want that flexibility and prefer a longer and more stable contract will now have the right to request one.
The hon. Lady will recognise that our package immediately introduced legislation for those rights that can be legislated for with secondary legislation. Primary legislation will shortly be brought forward for the Business, Energy and Industrial Strategy Committee, which she chairs, and the Work and Pensions Committee to scrutinise.
Order. I was not looking for the right hon. Gentleman, although it is always a pleasure to be reminded of the fact of his presence.
I wish you and the Secretary of State a happy new year, Mr Speaker, but the sad fact is that the good work plan does little to change the lives of precarious limb (b) workers, who will still not be entitled to statutory sick pay, maternity pay or the right to claim unfair dismissal. For those on a zero-hours contract, all the requests in the world will not legally oblige their employer to provide more stable employment. I have asked this question time and again to no avail: can the Secretary of State confirm what happens when an employer refuses a request for more stable working hours?
It is very clear that we are not making it mandatory for people not to have a zero-hours contract. Such contracts are available to employers, but employees will have the right to request. Reasonable employers have offered more stable contracts to employees, but the Taylor report is very clear that the flexibility that zero-hours contracts offer is valued by many of the people who use them.
I am glad the Secretary of State has clarified that the right to request a more stable contract is, in fact, a meaningless proposal on paper. What is worse is that the Government also rejected recommendations from their own director of labour market enforcement to increase fines for companies that breach the minimum wage and for that money to be used to increase enforcement resource. The Government also rejected his recommendation that public procurement contracts should compel compliance with labour market regulations. With reports that the average employer can expect an investigation once in every 500 years, does the Secretary of State really think he is being serious about enforcing workers’ rights?
I am working closely with Sir David Metcalf, the director of labour market enforcement. On his particular recommendation about increasing penalties, we just have increased the penalties and it is reasonable to look at their effectiveness. I have made the commitment to the House that, of course, we will increase them if that proves necessary, but one of the other reforms that we are making is to boost the enforcement of workers’ rights by bringing together the different enforcement bodies so that such employers—the minority that do play fast and loose with the rights to which employees are entitled—should expect justice to be brought about. This will be part of the package that we have tabled.
Paris Agreement Goals
I want to pay tribute to our UK negotiating team, which did such a fantastic job at the recent conference of the parties in developing a robust set of rules that will take us forward to achieve what we need, which is further hardcore nationally determined contributions in 2020. We want to use our leadership in this space to continue progress, which was why I was pleased to announce our expression of interest in hosting the 2020 COP right here in the UK. I hope the hon. Gentleman will support that.
I thank the Minister for that response. What sanctions are the Government willing to use to ensure that other countries meet their 2020 emission reduction targets?
We do not have the power to sanction under international law—or, indeed, under the current United Nations proposals—but we can work positively through initiatives such as the Powering Past Coal Alliance, which I was pleased to set up with my Canadian equivalent last year, to encourage all countries that, like us, are committed to phasing coal out of their energy system in a short period. We now have more than 80 members a year after launch, so we can continue to lead by example.
I want to give the hon. Gentleman the good news that I will be publishing today the next stages of our proposals for a smart export guarantee to reflect two principles: that nobody should be providing energy to the grid for free, or indeed at negative pricing, as has happened in some countries; and that the value of community energy projects, which is real and significant, can be recognised. That consultation will be published later today and I look forward to his response, because I know he is a long-standing campaigner in this area.
It would have been useful to have had that publication before Question Time to enable informed questions to be asked. I put it to the Minister that some 60 MW of solar energy in Wales alone rely on the export tariffs. Will she be looking at differential tariffs for existing versus new providers, so that there is no breach of contract with existing providers, and ensure that tariffs are set so as to encourage solar rather than fracking and so that we are in accordance with our Paris commitments, which have just been referred to?
The hon. Gentleman should know that we have signalled for many years how the closure of the feed-in tariff will work. We have spent almost £6 billion on existing contracts, and those contracts will of course be honoured. We have also announced with the closure of the scheme that there is a limited application period for projects for the next couple of months. There will be some that are brought forward, but it is only right that, as the price of this power provision has tumbled, we stop using other people’s money to subsidise something that we do not need to do in order to bring forward solar.
While we have been in the Chamber, the Minister’s consultation has gone online, and Members and the public have until 5 March to respond to it. What reassurance can she give that those responses will be listened to? There is concern in the solar industry and among others that 91% of responses to a previous consultation by her Department were against the end of export tariffs, yet that went ahead. Will she meet me and an excellent local business, AES Solar, which has concerns but would like to discuss them with her and community representatives?
I would be delighted to meet my hon. Friend and I am also very interested in the consultation results. I want to make the point quickly that the era of crude subsidy is over, partly because the price of renewables has dropped so significantly. We are trying to ensure that bringing forward the decentralised energy that we believe is so important to our system is also the objective of this tariff, and I would be interested to hear his views as well as those of his constituents.
Manufacturing and Automotive Sector
The automotive sector is one of the great success stories of our country, and our sector deal is a good example of how we will continue to support it going forward. We have committed around £1 billion over 10 years up to 2023 through the Advanced Propulsion Centre to research, develop and commercialise the next generation of low-carbon technologies, to keep us at the cutting edge of the automotive industry’s development.
The UK car industry is under huge pressure, yet far from providing the certainty that the sector needs, we will be debating our trading relationship with the European Union for years to come. Is it not the case that the deal that the Government are putting forward fails to protect tens of thousands of highly-skilled automotive jobs in my region? Not only that, but it is far worse than the deal we have now.
I am sure the hon. Lady knows that the deal has been backed by everybody in the automotive sector. I meet regularly with them and they have been outspoken about the perils of defeating the Prime Minister’s deal. I hope that the hon. Lady will think about that when she goes through the voting Lobby.
What is the Minister’s response to the report published last month by the Business, Energy and Industrial Strategy Committee—the membership of which, by the way, includes the Scottish National party Front-Bench spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—which concluded:
“The consistent and overwhelming message expressed by”
“is that to make…decisions they need certainty and it is for that reason they support the Withdrawal Agreement”?
As ever, my hon. Friend has absolutely nailed this. The automotive sector, like the BEIS Committee, is totally in favour of the Prime Minister’s deal. I am sure that the SNP spokesman has listened carefully to what my hon. Friend said, and I am sure that he will be supporting the deal next week.
I must remind the hon. Lady of my answer to the previous question: the best thing for the Scottish economy is the Prime Minister’s deal. I hope the hon. Lady will consider that when she votes next week.
I am very saddened that the right hon. Member for Birkenhead (Frank Field) is departing our midst. I know he has many pressing commitments and a very full diary, but if he stayed, he might get called. It would be very sad to lose the right hon. Gentleman’s pearls of wisdom.
You are racing ahead, Mr Speaker; we had got so far behind.
My hon. Friend should know that we are strongly supporting the aerospace industry through our aerospace growth partnership, which includes supporting business with nearly £2 billion of public research and development funding from 2013 to 2026. The sector deal for aerospace includes £125 million of funding to support the electrification of flight, developing new aircraft technologies and transport concepts. I am sure that will be excellent for your future holidays, Mr Speaker.
What plans do Ministers have to extend the Sharing in Growth scheme in the aerospace industry? It has helped Congleton business Senior Aerospace Bird Bellows to improve productivity and secure new orders. The company is very much looking forward to receiving the Minister on his planned visit to Congleton in March.
I am very much looking forward to seeing my hon. Friend on that visit. We are in dialogue with senior management at Sharing in Growth about the scope to extend the programme further, and that will continue ahead of the comprehensive spending review.
The Space Studio School in Feltham, started by the Rivers Academy, continues to innovate, bringing about high-quality science education and industry-related work, and engaging with the National Space Centre, the European Space Agency, NASA and the aerospace industry around Heathrow. Does the Minister agree that even stronger relationships between schools and industry are vital to ensure that we stay competitive? Will he agree to visit the Space Studio in west London to see what is being done there and what more can be done to improve opportunities for young people?
Yes and yes.
The Minister will be aware of the problems as well as the possibilities for Bombardier in east Belfast, as my hon. Friend the Member for Belfast East (Gavin Robinson) has raised them consistently. Given the job loss announcements several weeks ago, will he undertake to do whatever he can on the possibilities for expansion next year?
The hon. Gentleman knows, I hope, that Bombardier is a company close to my heart. I speak regularly to him and his colleagues and to the company, and I will do anything I can to ensure that company’s prosperity.
Support for Businesses (Scotland)
I have regular discussions with the Chancellor of the Exchequer. The best outcome for Scotland is to deliver the deal that we have negotiated with the EU. That will provide the certainty that Scottish businesses need and protect jobs and prosperity.
A recent report by the Fraser of Allander Institute found that three quarters of Scottish businesses felt that they did not have adequate information to prepare for Brexit. Given that, do the Government now regret rejecting the Scottish National party’s proposal for a £750 million small business support scheme to help them prepare for the eventuality of Brexit?
Advice and support is available to businesses right across the UK, but it remains the case that the best certainty that business can have is to know that the agreement that has been reached with the European Union, which rules out no deal and involves a substantial transition period, will be approved next week in the House of Commons. I hope that the hon. Gentleman will support that.
A total of 390,000 18 to 24-year olds are involved in starting businesses in the UK, and the British Business Bank has provided £52 million in start-up loans to young people since 2012. In December we launched a youth engagement programme, including a celebration of UK science, technology, engineering and maths projects and an industrial strategy competition to inspire 13 to 19-year-olds.
I welcome that and I welcome the start-up loans scheme, which has helped a lot of young entrepreneurs, but will the Minister talk with his counterparts in the Department for Education to see how we can embed entrepreneurship and life skills in business into the school curriculum?
Absolutely. Indeed, as a Minister also in the Department for Education, I work with that Department and understand the importance of ensuring that young people develop entrepreneurial skills. Our careers strategy launched in 2017 places a strong emphasis on our interaction with entrepreneurs. We have connected more than 2,000 schools and colleges with enterprise advisers, launched a £2.5 million investment fund to support employer encounters, and created 20 new career hubs.
Sam’s Kitchen was set up by a young entrepreneur in Crawley several years ago. On meeting him recently, he reported a large number of frequent and, it seems, unnecessary inspections. How can we make sure that we get the balance right between necessary regulation and not imposing too much of a burden on young, growing businesses?
I understand that Sam French is a young entrepreneur selling homemade gingerbread men and women. I congratulate him on his success. Perhaps he may like to send some to you to sample, Mr Speaker. I am pleased that he shares his experience with other young entrepreneurs. It is important, however, that inspections in the food industry are based on a national code of practice and are intended to give the necessary reassurances to business and consumers so that they can buy products with absolute confidence.
I might want it, but I probably should not have it.
Is not part of the problem of encouraging youth entrepreneurship that vocational education is seen as second rate? How will we change that?
The hon. Gentleman raises a very important point, which is why the Government have commissioned the Augur review to look at post-18 education. In addition, we are developing a full range of T-levels that will soon be operational. It is absolutely important that we level the playing field and ensure that the 50% of people who are not going to university have that opportunity to develop their skills going forward, particularly around technical education.
Since we last met, I have been delighted to be in Bristol, a hub of brilliant technological innovation, to launch the aerospace sector deal with a commitment from business and Government to invest a quarter of a billion pounds in the aircraft of the future. I announced a life sciences sector deal, featuring £1 billion of industry investment from the global biopharmaceutical company UCB. My right hon. Friend the Minister for Energy and Clean Growth has been in Katowice representing the UK at COP 24. At home, we published our Good Work Plan, and, just last week, the energy price cap came into effect, ensuring that all customers get a fair deal.
I thank the Secretary of State for that answer.
A meeting of stakeholders was recently held in Pollokshields in my constituency to discuss the problems of fireworks in the community, as they really cause local residents a huge amount of distress. The Minister wrote to me last year saying that a meeting would be set up with me and other MPs to discuss the matter further. Will he give me more information as to what progress has been made to set up the meeting, as my constituents do not want to be forgotten about?
The hon. Lady is quite right that the issue is a matter of concern not just in her constituency, but in others. I will ensure that the meeting happens in the next two weeks.
It is right that the FRC refers any concerns it has relating to the insolvency case to the ICAEW, which is a recognised professional body that regulates insolvency practitioners. In this case, I understand that the ICAEW has considered the issues put forward and is investigating a number of matters. I will happily meet my hon. Friend to discuss this issue again, as I already have. It is right that we investigate any concerns that British businesses have about the regulations.
I think I have answered a similar question before, although not from the hon. Gentleman. I have absolutely no plans to change the traffic lights system. The current fracking proposals being tested in Lancashire right now were developed with that system. The fact is that that system is working and being triggered even by micro-tremors; the hon. Gentleman will know that we have had some great evidence from the University of Liverpool as to how small the tremors actually are. If we are to take forward what could be a very valuable industry, it is only right that we do so with the toughest environmental regulations in the world, so I say again that there are no plans from the Government to change the traffic lights system.
We continue to work closely with the Treasury and the Ministry of Housing, Communities and Local Government to ensure that the needs of high street retailers are understood. In the 2018 Budget we announced a reduction in business rates worth £900 million over two years for small businesses. The digital services tax, a 2% tax on revenues specific to digital businesses, will ensure that they pay tax reflecting the value that they derive from UK users. We have also established the Retail Sector Council, which has now decided on its future work programme, as part of which business costs and taxation are one topic being considered.
New research from the TUC shows that household debt is at its highest ever level, with average debt per household now at over £15,000. It is blatantly obvious that the cause is years of austerity and wage stagnation. Millions of workers are now reliant on borrowing, making up for low wages by increasing their debt—not for holiday or luxuries, but through using credit cards for everyday essential such as nappies and food. That is so stressful. Will the Minister please explain what the Government are doing to address this crisis, and why Conservative Members refuse to join the Labour party in advocating a real minimum wage of at least £10 an hour and a return to serious collective bargaining for workers in the UK?
I heard the news reports of this particular analysis, but I also heard that the analysis had been entirely discredited because it included student debt, which does not accrue to every household. If we were to strip that out, the rate of accrual—[Interruption.] Would the hon. Lady like to listen, rather than chunter? I will carry on. If we strip out student debt, which does not accrue to every household, we see that the growth of consumer credit has actually slowed. Once again, I am proud to stand here and represent the Government who finally did what the hon. Lady’s Government had 13 years and did not do—introduce a national minimum wage and ensure that it goes up well ahead of inflation. [Interruption.] A living wage.
I call Will Quince. [Interruption.] I am sure that the hon. Gentleman is delighted to have excited such a reaction, but I would like to hear what he has to say.
I am delighted to join my hon. Friend in welcoming this recent measure, which has benefited small businesses so well. We have cut corporation tax to 19%. As a result of cuts made by this Government since 2017 through the small business rate relief, over 655,000 small businesses—the occupiers of a third of all business properties—pay no rates at all.
In the “Road to Zero” strategy document, it is very clear that diesel engines, especially the new generation, are a perfectly acceptable choice environmentally as well as economically. The right hon. Gentleman will know that diesel sales are falling across the whole of Europe, but we have been very clear in this country that it can play an important role in the transition to zero-emission vehicles.
I do indeed welcome the representation from my hon. Friend. The automotive sector is one of our most successful, and it is globally admired. Its success depends on having the just-in-time production that makes it so competitive. In my view, it is vital that we pose no threat to that in our new relationship with the European Union.
I had an inkling that the hon. Gentleman might ask a question about this, because he has been a long-standing campaigner in this area. I am pleased to report that the programme is accelerating; I know he will welcome that. I welcomed extensively the National Audit Office report on the cost profile, which showed, effectively, a cost overrun but still a very, very substantial net benefit to both consumers and the economy. I believe that we are minded to accept almost all of the recommendations that were made. This is a vital programme for upgrading our energy system. I hope that he has had his smart meter installed. I saw over Christmas quite how much electricity cooking the Christmas turkey cost, and it was a very valuable exercise.
What role does the Minister see for the push on technical skills in boosting youth entrepreneurship?
As I have stated before, technical skills are absolutely important when it comes to boosting youth entrepreneurship. I take this opportunity to mention to my hon. Friend the launch of the new year-long youth industrial strategy competition at the industrial strategy fair that will be held in March this year, with prizes being awarded at the Big Bang fair in March 2020.
As I said to the hon. Member for Edinburgh East (Tommy Sheppard), that advice is available to businesses right across the country. But in supporting business confidence, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) should reflect on the fact that Scotland has now become the highest-taxed part of the United Kingdom, and that is, in itself, undermining the confidence that investors have in Scotland.
Associated Waste Management is a successful business based in my constituency. It has recently been acquired by Beauparc, one of Ireland’s leading waste management companies, but it is keeping its head office in my constituency. The new arrangements have secured the long-term growth of this locally founded business. Does my right hon. Friend agree that such investments are a vote of confidence in the UK economy and send a clear message that we are open for business post-Brexit?
My hon. Friend is right that the fundamental attractions of the UK economy are as strong as ever. We have some of the best skills in the world, some of the most innovative people and some of the best scientists and researchers, but we also have access to a substantial European market that has proved attractive to businesses from around the world. We should continue with that, and we should have both.
I might ask the hon. Lady what she is doing to address that. The Scotch Whisky Association has been very clear; it has said that the withdrawal agreement is a compromise but a positive step towards much needed business certainty. If she cares about the industry, she should vote for the deal.
Sadly, my constituency has an unemployment rate of 6%, which is twice the UK average. What progress has been made or can be made on the Ayrshire growth deal, which is essential to Ayrshire’s future prosperity?
I know that my hon. Friend has been a vociferous champion of the Ayrshire growth deal, which was referred to in the Budget. I hope that we will see some progress on it in the next few weeks. For Cumnock in particular, the prospects will be very attractive. For a town that has contributed significantly over the years, including to UK energy supplies and industrial goods, it will be a fitting tribute—
Order. We are extremely grateful to the Secretary of State.
The Association of Accounting Technicians’ recent survey found that 73% of MPs agreed with its recommended changes to the prompt payment code, which are making the code compulsory, ensuring that larger businesses pay in 30 days and implementing a penalty regime. Will the Minister introduce those changes in legislation, to help the many small businesses that will benefit?
I thank the hon. Lady for her question. As she will know, we launched the call for evidence in October, and it finished in November. We are reviewing the evidence presented. In October we made announcements to underpin, secure and make better the prompt payment code. The small business commissioner has delivered £2 million of collections for small businesses over the first year in his position. We will continue to work to ensure that small businesses get the payments they need when they should.
Prior to Royal Assent for phase 2b of High Speed 2, will my hon. Friend consider establishing a cross-departmental taskforce with the Department for Transport, to provide businesses that are being forced to relocate with the necessary advice and support, including financial support?
My hon. Friend should know that I have listened carefully to her question. In the first instance, a meeting between myself, herself and a representative from the Department for Transport might be a way to get that moving.
Last week I wrote a letter to the Secretary of State about the taskforce in Liverpool and Birkenhead that wishes to save Cammell Laird from any further redundancies. Will he meet us this week, as a matter of urgency?
I am grateful for the right hon. Gentleman’s advice and his advocacy for a solution to the difficulties that Cammell Laird faces. We are meeting the trade unions and others on Thursday, and I hope he will be able to come to that meeting.
On a point of order, Mr Speaker.
I will take the point of order, and I would appreciate it if the ministerial team waited to hear it because it relates to Question Time.
Under her breath, the Minister for Energy and Clean Growth mentioned the living wage, but of course in practice there is no such thing. The Minister could correct the record in that it was indeed the Labour party that in 1998 introduced the minimum wage, which her party strongly opposed.
Further to that point of order, Mr Speaker. Sorry; I am blaming the excitement. Of course I am happy to correct the record. The hon. Lady is absolutely correct: the Labour party introduced the national minimum wage. It was quite clear that that was inadequate for many people on the lowest incomes, particularly women who were underpaid, which is why we introduced the national living wage—something I wish she would support.
Thank you. I am extremely grateful to the Minister.
Is it on the same matter? No. This matter has been—
Not on this matter, but on these BEIS questions.
I say to the hon. Lady that it must not be a continuation of the argument. I will give her the benefit of the doubt. However, on that matter the Minister has been very clear, and we thank her for that clarity.
On a point of order, Mr Speaker. Given that climate change is the most pressing and urgent issue facing us and future generations, may I seek your advice about how I can ask the Minister for Energy and Clean Growth, who has responsibility for climate change, to make an oral statement on her recent attendance at COP 24 at Katowice?
The hon. Lady has achieved her own salvation. It seems to me that she has used the device of an entirely bogus point of order to register a point that she probably would have wanted to register if she had been called to do so, but could not because she was not.
Further to that point of order, Mr Speaker. I was delighted to answer a question on this very point, because our negotiation team was, as always, excellent. I was also happy to accredit the hon. Lady; I do not know whether she managed to attend our superb stand and entire presence at Katowice. My door is always open to her, as an expert in this area, to discuss this. I do not think an oral statement will be necessary. Perhaps she and I could grab a cup of tea, as this is dry January, and have such a conversation.
Before we proceed to the urgent questions, I would like to say something that relates to the events that unfolded outside this place yesterday.
In the course of proceedings at various times yesterday, the hon. Members for Cardiff South and Penarth (Stephen Doughty), for Grantham and Stamford (Nick Boles) and for Wakefield (Mary Creagh) and the right hon. Member for Wolverhampton South East (Mr McFadden) all raised with me their very grave concerns about aggressive, threatening and intimidating behaviour by demonstrators at Abingdon Green and, in many instances, between Parliament and Abingdon Green.
To those points of order, I responded, I hope, sympathetically and as effectively as I could. Colleagues will realise that I had not myself witnessed the behaviour, which was taking place while the House was sitting and I was in the Chair, but I was extremely concerned to learn of those developments. Moreover, it was clear beyond doubt both that there was an intensity of feeling on the matter and that that intensity of feeling was across the House. I undertook to look further into the matter.
Of course I am aware—as colleagues will know, for it has been reported—that a very large number of Members have written to the commissioner of the Metropolitan police. I thank them for doing so. I have myself today written to the commissioner of the Metropolitan police, Cressida Dick, in support of those representations, and my letter has been published. We respect the operational freedom of the police, and we absolutely understand that they have difficult judgments to make in balancing the precious right of peaceful protest on the one hand and the right of Members of Parliament, journalists and others to go about their lawful business unimpeded and unthreatened. My sense of the opinion of colleagues, and they have considerable evidence for their view, is that, as things stand, the balance is not right.
I must say to the House that, frankly, it is intolerable if Members of Parliament and journalists go about their business in fear. This situation cannot stand. I have written with force, passion and politeness to the commissioner of the Metropolitan police seeking a review of policy. I hope that that is regarded by colleagues across the House as helpful. I would like to thank all those Members yesterday—on the Floor of the House and in conversations with me—who registered their concerns. I share them, and I will do my best to ensure that those concerns are properly addressed without delay.
On a point of order, Mr Speaker. May I thank you very much for your response and the sense of what you have said, which the whole House will have appreciated? However, will you add to the list not just politicians and journalists but ordinary members of the public, who themselves have been grossly abused just by being present?
I entirely accept what the right hon. Gentleman has said. In making that powerful point, he prompts me to add a reference to schoolchildren coming on to the estate to visit the education centre, for a wider tour or both. They should not have to witness such insulting and, frankly, toxic behaviour. It is one thing to observe such behaviour, but it is another actually to do something to seek to prevent it, and it is, I think, for the latter that we in this House are looking. I thank the right hon. Gentleman.
On a point of order, Mr Speaker. I fully concur with all the things that were said yesterday and, indeed, by yourself just now, but I do not think this is just about policing, if I might say so. The arrangements at Abingdon Green, with the barriers placed in the way they are, mean that Members going from this palace can take only one route. That is making things more difficult and worse. I urge the House authorities to look at how they can relate better with the broadcasters to make sure that that area, which is part of our parliamentary estate, is better protected.
It may be, and I say this in all seriousness, with no frivolity or levity, that there is a symbiotic relationship between the House authorities and the hon. Gentleman, for I am able to say to the hon. Gentleman that we are seized of that point. It did not seem to me to be relevant to my letter to the commissioner, and I did not want to give what would, in any case, on that point, be only a holding statement to the House today. If I can say so with great politeness and respect to the hon. Gentleman, we have got that point—he is right—and we are looking to do something about it.
On a point of order, Mr Speaker. Thank you for the comments you have made and the action you have taken, and I certainly agree that your view is shared across the House by Members of all parties and all views—nobody wants to see this behaviour going on. May I just add that, of course, threats have also been directed at the police themselves? Earlier this morning, I spoke with some of the police officers protecting us all—they are doing a fantastic job. They, too, are being subjected to racist abuse and threats, and we all saw the tragic events here at the House, with the death of PC Keith Palmer. Nobody wants to see that situation again, so I hope that those conversations will be fruitful and that we can ensure that all of us can go about our business safely.
Thank you. It is a type of fascism, let us be quite clear about that—it is a type of fascism. Women and ethnic minority citizens, in particular, are being targeted. I do not say that they are the only people on the receiving end of this completely unacceptable behaviour, but they have been, and are being, deliberately and disproportionately targeted. That is not acceptable, and we have to ensure that something is done about it.
On a point of order, Mr Speaker. Thank you for your intervention and for writing to the Metropolitan Police Commissioner. Is there not also a responsibility among the leaderships of our parties, and among Ministers and shadow Ministers, when they speak in the media, to reiterate what you are saying and not to seek to inflame some of the heightened tensions we are going to witness over the coming days and weeks? If I may say so, I was slightly surprised by an interview this morning with the Secretary of State for Brexit, in that I thought he could have been more forthright in his condemnation of what happened yesterday.
I hope the hon. Gentleman will forgive me, because I did not hear that interview. I must, in passing, observe that I was told that the Secretary of State for Brexit—presumably because he was asked about the subject—did reference the concerns that exist about this totally unacceptable behaviour. Beyond that, I think it is fair to say that I should not comment, because I did not hear the interview, but we all have a responsibility to use moderate language and to treat each other with respect. I really do think that this is something that can unite the House, whatever people’s views in this Chamber on Brexit or indeed anything else. We all believe that we and everyone else should be able to go about our lawful business unimpeded. Denying someone’s personal space, shouting abuse, swearing at them, making sexist, racist or misogynistic remarks, or implying or stating directly that someone should lose his or her life because of the view that that Member holds is wrong—period. If there are people out there, as clearly there are, who do not get that point, well, they will have to be made to get it.
Universal Credit: Managed Migration
(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the Government’s plans for the managed migration of people claiming legacy benefits to universal credit.
Universal credit is a vital reform that overhauls a legacy system that trapped people out of work; with six different benefits, administered by three different Government Departments, it was utterly confusing for claimants. All new claimants now receive universal credit. In the future, we will move claimants who have not changed circumstances from legacy benefits to universal credit in an approach known as managed migration. It is right that the Government should seek to align provision for all, in order to eventually operate one welfare system. The Department has long planned to support initially 10,000 people through this process in a test phase, before increasing the number of those migrated. The first phase will give us an opportunity to learn how to provide the best support, while keeping Parliament fully informed of our approach. Universal credit is proceeding as planned, with no change to the timetable of completing managed migration by December 2023.
Over the weekend, it was widely reported in the media that the Government had decided to ask for powers from Parliament for a managed migration pilot to move 10,000 people from legacy benefits to universal credit, rather than the managed migration as a whole of about 3 million people. One headline read:
“Threat of revolt forces rethink of ‘catastrophic’ universal credit”.
The Minister’s response does nothing to clarify the situation.
This is a matter of very real concern. Under so-called managed migration, the Government intend to switch off the vital financial support received by millions of people and leave them to apply for universal credit. There are very real fears that vulnerable people will be put at risk of falling out of the social security system altogether. Over a third of these people are currently claiming employment and support allowance because they are ill and disabled. In some cases, they will have been claiming it for a long time and may find it extremely difficult to make a claim for universal credit. A policy change of this significance, which was indicated in the press, clearly should have been announced in the House but the Government failed to do so. The Secretary of State failed to clarify the situation when she was asked to do so yesterday.
Will the Minister—it is disappointing that the Secretary of State is not in her place—tell the House whether the Government intend to ask Parliament initially for powers to carry out a pilot for the managed migration of 10,000 people or for the process as a whole, which would affect nearly 3 million people? Will the Government pledge, as they did before Christmas, to debate the regulations, in whatever form they take, on the Floor of the House? If the Government seek powers for a pilot in the first instance, will the Government address the fundamental concern of numerous voluntary organisations that nobody’s claim for a legacy benefit will be ended until they have either made a new claim for universal credit or have said that they do not wish to do so?
The result of putting back the timetable for managed migration, as the Government already did in the Budget, will mean that many more people will transfer to universal credit through natural migration. Can the Minister tell us how many people the Government estimate will move to universal credit through natural migration, and what savings that will make for the Treasury?
The Government announced in June that those in receipt of severe disability premium would not have to transfer to universal credit without transitional protection. Will the Government compensate those who have already done so and missed out as a result? What action will the Government take to ensure that those affected are fully compensated? The Government have chosen to shift the burden of what should be the Government’s responsibility to ensure continuity of social security on to claimants, forcing them to apply for universal credit. Will the Minister explain precisely what the Government are going to do and will they stop the roll-out of universal credit?
May I just clarify, if it was not clear yesterday when we had oral questions, that the Government had previously committed to hold a debate on the affirmative regulations in relation to the managed migration regulations? That will happen in due course, and we will debate them as and when parliamentary time allows. We will of course, as we have set out previously, meet our commitment to severe disability premium recipients. We will also ensure that the start date for the July 2019 test phase involving 10,000 people is voted on.
The hon. Lady raised a number of issues. She raised the issue of vulnerable people. I hope she will have seen our response to the Social Security Advisory Committee’s recommendations, in which we set out very clearly—I am sure we will have a chance to talk about them—how we will be looking to move people across, working with stakeholders to ensure protections are in place for the vulnerable.
The hon. Lady talked about voluntary organisations. We will be working with voluntary organisations. We have already had meetings with 70 stakeholders and we have plans for further discussions. We want to design the process together with them. The timetable is as set out. We will have a pilot phase starting in July 2019. In 2020, we will then move on to volume migration.
I want to end on one point, which is that every time the hon. Lady gets up she talks about stopping the roll-out of universal credit. To be clear, we have now rolled it out across the country. If she wants to support people, she should vote with us when we bring forward support for the most vulnerable. She voted against the £1.5 billion of support. She also voted against the £4.5 billion. When the regulations are debated, she should support them and not oppose them. Let me clarify once more that we will hold a debate on affirmative regulations in relation to the managed migration regulations.
If the Government do proceed on a pilot basis with moving people across from existing benefits, that would be extremely sensible. Does my hon. Friend share my experience of talking to job advisers and other staff in jobcentres? They are very enthusiastic about universal credit, as opposed to previous benefit systems, precisely because it helps them to better help other people into work in ways they were not able to do before. Can he reassure me that for all the issues with transition, which we all know are there, the Government are as committed as ever to making sure this new and better benefit system is rolled out fully?
My right hon. Friend is absolutely right. That is the experience of colleagues on the Government Benches when we talk to people—[Interruption.] Well, I would just say to the hon. Member for Wallasey (Ms Eagle) that she ought to go out there and talk to work coaches. I would say that to all colleagues, because in my experience they are telling me that for the first time they are doing what they came into the Department for Work and Pensions to do, which is to provide one-to-one support rather than having to explain an incredibly complicated legacy benefit system where people have not been able to claim all the money due to them.
Thank you for granting this urgent question, Mr Speaker. I commend Labour for securing it. It is important because at the weekend, reading any of the papers, it would have seemed that everything had changed in the minds of Ministers on universal credit, with the Work and Pension Secretary’s apparent U-turn. In actual fact, however, nothing had changed. I am sorry that the Secretary of State is not here to respond, given that the misleading headlines were in her name.
The Government were of course quite happy to ride that wave of publicity, but yesterday at DWP questions the scale of that so-called U-turn became clear. We now know that at present there are no plans to make any changes to universal credit, which is what everyone is really interested in.
Delaying the vote on the managed migration of people from legacy benefits to universal credit is a small acceptance from the Government that things may not be well with universal credit. We have six years of evidence and lobbying to show the Secretary of State that. She knows she cannot get away with kicking the can down the road. She knows that changes need to be made and that what is on the line is not just her credibility but the lives of recipients who desperately rely on that support. After all, we never know when it might be us relying on that safety net.
My question to the Minister is clear and unambiguous, and I hope he will be, too. Will he commit, with the Secretary of State, to putting pressure on the Chancellor to release the money to repair universal credit, starting with ending the two-child policy, stopping the benefits freeze and overhauling the punitive sanctions regime?
The hon. Member for Wirral West (Margaret Greenwood) asked earlier why the Secretary of State is not here. The reason is that she is in Cabinet. Her commitment is absolutely clear. She has visited jobcentres and talked to stakeholders and organisations that care about getting universal credit right, so there should be no indication in the House that she is not taking her duties incredibly seriously. She is hugely committed to this.
As I said, earlier this year, we brought forward £1.5 billion of funding to help people by allowing advances of up to 100% on day one if individuals require that and having a two-week run-on for housing benefit, and another £4.5 billion was announced in the Budget. This is all about making a difference and helping the most vulnerable in our society—something the Opposition should welcome.
We have had a very successful roll-out in Sudbury. I urge my hon. Friend not to pause the overall roll-out of the system. I well remember as an employer the problems of staff who refused to work more than 16 hours under the old system. He is doing the right thing. If this takes a bit longer to introduce, personally, I will welcome that.
I have set out our timetable, but my hon. Friend is absolutely right that the legacy benefits system is incredibly complicated. I mentioned that we have £2.4 billion under-claimed under the legacy benefits system because it is so complicated. That of course is changing under universal credit.
Will the Minister be up front with the House and admit that universal credit has been a disaster right from the beginning? It has been delayed, it has cost money and the Government are having to delay it further because they are worried about its effect. In Wallasey, there was a 39% increase in food bank usage after the roll-out of universal credit. It is causing real distress, and there are still £4.7 billion of benefit cuts to be administered between now and 2020. Will he admit that this is a rolling disaster area and commit to properly reviewing it and doing the right thing?
Perhaps the hon. Lady was not listening. I have already set out the extra funding we have brought forward. I wish she would support this. Of course, as we go through this process we learn and make changes as appropriate, but the reality is that we now have a much simpler system, under which people are able to get the one-to-one support they were not able to get before. She should welcome that.
Does my hon. Friend agree that it was necessary in the roll-out of universal credit to learn the lessons of the failed introduction of tax credits, which left many people on low incomes right across the country in a big-bang situation where they were faced with large debts? Does he agree that, contrary to that approach, this Government have taken time and tested the system as they have gone? They continue to do that with the test involving 10,000 people, which I strongly support. I suggest they continue that approach.
I thank my right hon. and learned Friend for his support. We have always said there will be a test phase, and that is what we will have. He is absolutely right to highlight that the introduction of tax credits was not a success, whatever Opposition Members may say. It is absolutely right that we listen and learn, and that is precisely what we will do as we go through the test phase.
Tax credits were a great success. In answering my question yesterday about the five-week wait before claimants are entitled to their benefit, the Minister pointed out that advances are available. That is true, but of course that means people are indebted to his Department right at the start of their claim. Press reports at the weekend stated that the roll-out would be paused because of worries about growing indebtedness. Are Ministers concerned about rising indebtedness among benefit claimants because of universal credit?
As I said yesterday, I know the right hon. Gentleman takes these issues extremely seriously, but so do we. That is why we introduced a change last year to ensure that advances of up to 100% are available on day one. Some 60% of those who come on to universal credit now take advantage of those advances. There is also the two-week run-on for housing benefit and, as he knows, we set out in the Budget further measures, which will come into place in 2020, when those moving across from out-of-work DWP legacy benefits will also get run-on.
We must not lose sight of the fact that inevitably there are problems during the transition phase, but I draw the Minister’s attention to an email I received yesterday from Brian Herzog, one of my constituents, who wrote that
“my mental health did a complete nose dive and it was Universal Credit that saved me in so many ways.”
“Please trust me…it’s a great system. I’d be happy to be used as an example of why it does work”.
Well, I have done that. Does the Minister agree that we must do all we can to ensure that the transition phase moves smoothly and to support the staff who do an excellent job of delivering universal credit, but we must not lose sight of its successes for the vast majority?
I thank my hon. Friend, who works incredibly hard for his constituents. He is right to highlight that universal credit works extremely well for the vast majority of people, and of course we wish his constituent well, but I accept that we need to get this right for everyone. That is why, when it comes to managed migration, we will have a test phase.
Will the Minister clarify whether the regulations he proposes to bring forward before July will cover only those encompassed by the pilot, or whether they will be the comprehensive managed migration regulations? Will they also deal with the severe disability premium?
The hon. Lady takes a great deal of interest in this area, so she will have seen the regulations that are currently before the House. If I may repeat myself, we have committed to holding a debate on any affirmative regulations, we have said we will meet our commitment to those in receipt of severe disability premium, and we have said we will ensure that the regulations are in place so we can start the test phase in July 2019.
In Brentwood, the roll-out of universal credit has been very successful thus far. I congratulate the Government on their use of test and learn to ensure that universal credit learns lessons that previous benefit systems did not. Will the Minister commit to sharing with the House the details of the pilot of 10,000? When does he expect to be able to do that?
My hon. Friend is very knowledgeable about these matters, as a former member of the Select Committee on Work and Pensions. We are in the process of designing the pilot. As I have said very clearly, we are having discussions with key stakeholders to make sure we get it right. Clearly, there will be plenty of opportunity in the future to debate it. Let me be very clear that we will, at the end of that phase, set out how it went.
Many of my constituents have been left without money and food—effectively destitute—for extended periods during the roll-out of universal credit. Can the Minister guarantee that those of my constituents due to be migrated on to universal credit, whether as part of a pilot or more generally, will not be left in this condition?
We want to make sure that the process of moving on to universal credit works for everyone. I am sorry if I repeat myself when I talk about the extra £1.5 billion. I said earlier that we brought that forward earlier this year—I meant, of course, during 2018. I have talked about the extra money made available in the Budget as well. Of course, we want to get this right in order to help all our constituents. That is what we are here for: to ensure we help people, but also to help people to progress into work.
Does my hon. Friend agree that, in my constituency, which neighbours his, our feedback on universal credit has been generally positive, and would he accept my appreciation for the positive response that he and his colleagues have given to me when I have raised implementation problems with him as we have gone along?
I thank my hon. Friend for his kind comments. I hope it is clear to colleagues on both sides of the House that my door is open. When colleagues come with individual cases, I do take them up. I am always open and ready to have meetings on individual cases, and I will continue to be ready to do that.
When universal credit was initially rolled out some time ago, people living in the highlands were the unwitting guinea pigs in this experiment. Now that some of the flaws in universal credit are becoming apparent, is there not a case for financial compensation for these people for all they have undergone?
As I have said—I am sorry if I have to keep repeating myself—we want to make sure that universal credit works for absolutely everyone. Wherever we sit in the House, we want our welfare system to work for everyone. We will continue to work with stakeholders and others to make sure we get this absolutely right.
Piloting managed migration for universal credit is an entirely sensible approach, as it means that lessons can be learned, but can the Minister assure me that, when learning those lessons, he will consider the evidence from charities and other experts so that the best possible evidence base is available and we can have the best possible system?
My hon. Friend raises an important point. We talk about stakeholders. We held an event for 70 stakeholders in October. We are working on work streams with stakeholders looking at how to create a successful claimant experience, what the role of delivery partners and external organisations might be in migration, how we communicate and engage with claimants, and how we identity and support our most vulnerable claimants. That work is going on right now. We will continue to do that to get this right.
The Minister says he wants to make sure universal credit works for absolutely everyone, but there are still 2.4 million households that will be more than £2,000 a year worse off under universal credit, of which 1.6 million will be moving on to universal credit in the next 12 months, under natural migration. What will the Government do to support those people and make sure it works for them?
As the hon. Lady will know, once universal credit is rolled out, there will be £2 billion more in the system than under the legacy welfare system. I know she cares deeply about these matters, but if she wants to support her constituents, she should have voted to support the measures we introduced to help people—I have talked about the extra money. Unfortunately, she has not been able to support them.
How does the generosity of the Minister’s arrangements compare internationally?
Different countries will have different welfare arrangements. It is important for us to have a welfare system that not only provides support but is sustainable and ultimately helps people into work. That the employment rate now is at a joint record high is testament to the work the Government have done, including on welfare reform.
The problem is that the individual cases keep coming and coming because of the Government’s failures on universal credit. A constituent contacted me because of an issue about early payment from her employer before Christmas. She was forced to go to a food bank—over Christmas! Surely, the Minister does not think that that situation is acceptable.
As I have said, we want to get this right for everyone, and where there are individual cases, of course we will take them up, but the hon. Gentleman seems to imply that, under the legacy benefits system, the world was entirely rosy. He and I know, as Members of Parliament, that the legacy benefits system is inferior to universal credit.
I welcome the tone of the response from the Minister so far—it is always good to see him at the Dispatch Box—but could he confirm how the Department will go about selecting the 10,000 to take part in the pilot, how it will monitor it and how it will report back on its evaluation?
My hon. Friend raises an important point. During the test period, we will be testing a number of approaches to moving claimants on to universal credit safely and in the most effective way. This will include testing a non-mandatory approach, where claimants will be invited to go through the process. We will be testing claimants on all benefits and in a range of circumstances to make sure that we move all claimants on to universal credit safely.
The reality for many people in my constituency is that universal credit is plunging them deeper into poverty. What specifically will the Minister do about this, and when?
I visited Liverpool last year and talked to colleagues in jobcentres who told me that universal credit was working well, that they supported it and that it enabled them to offer help. The hon. Lady talks about providing support for individuals. The best support we can provide is helping them to get into work, and that is what is happening under universal credit.
Universal credit is solving some serious problems in the benefits system. It is helping people to move into work more quickly and, together with the national living wage, is helping to drive down unemployment. The Minister is right to take a cautious approach to rolling out universal credit but, further to the question from the hon. Member for Stretford and Urmston (Kate Green), can he assure me that he will move as quickly as possible to introduce regulations that solve the problem for people on severe disability premium? I have a constituent whose disabled son has lost money because he has moved local authority. It is obviously an indefensible situation. He will want to fix it. Can he assure me that we will move quickly to solve this problem?
My hon. Friend is right to highlight the issue of the recipients of severe disability premium. We recognise that issue, which is why we have committed to putting in place a hard gateway so that people are not naturally migrated across.
If there is to be a pilot, will the Minister look again at the advice of Sir Ian Diamond, the chair of the Social Security Advisory Committee, who says it is not necessary for all those on legacy benefits to make fresh universal credit claims, which is bound to increase administration costs and undoubtedly will result in some of the most vulnerable losing out on the benefits they are entitled to? He says it is not necessary because the Department already has the key data for most of those claimants.
Of course, we are in regular contact with the Social Security Advisory Committee and the hon. Gentleman will know that in our response to it we highlighted the limitations of pre-population, which I think is what he is talking about. I ask him to look at when we moved people from incapacity benefit to employment and support allowance. We did not have all the appropriate information and this led to the Department estimating the need to spend about £1 billion on historical underpayments. We want to ensure we get this right, but of course it is important to build in safeguards, particularly for the vulnerable, and that is what the test phase is all about.
One of the aims of universal credit is to more accurately target financial support to the most vulnerable people, who need it most. As I understand it, when fully rolled out, up to 1 million disabled people will be able to claim something like £100 a month more than they currently receive. Is my understanding correct?
My hon. Friend is absolutely right. There will be that extra money. As I have said, this is about making sure that we target funds at those who need it most. That is why we introduced changes in work allowances in the Budget, which will make a difference to people with children and, of course, those with disabilities as well.
Will the pilot just move 10,000 people on to the existing system, or will there be meaningful changes before it begins, as requested by the Select Committee and by stakeholders? Will the Minister look at the position of individuals who turn down jobs involving zero-hours contracts, who are liable to be sanctioned under universal credit but would not be sanctioned under legacy benefits?
I am always happy to have a detailed discussion with the hon. Gentleman on any issues, but let me commend to him our response to the Social Security Advisory Committee’s recommendations. As he will see, we have taken on the vast majority of those recommendations—and, of course, we have committed ourselves to working with stakeholders, which we are already doing.
On Friday, it was great to be interviewed by a university student from Corby, Bethany Kilgallon, about universal credit. What message would my hon. Friend want me to pass on to her about the successes of universal credit so far, and the way in which the roll-out will be handled in future?
My hon. Friend has raised a fundamental point. Universal credit replaces a very complicated legacy benefits system, and is ensuring that people get into work faster and stay in work for longer. That, ultimately, is what we should all be trying to do, as well as helping people to progress when they are already in work.
For the record—I know that you are aware of this, Mr Speaker—tax credits lifted 1.1 million children out of poverty, whereas the Government’s policies are set to increase the number of children in poverty by more than 1 million. We know that disabled people who are out of work will be worse off even after the Budget. The High Court decided last summer that transitional protections were needed, and that the Government were acting unlawfully and discriminating against disabled people. The Minister has been asked this three times: when will those transitional protections be put in place?
The hon. Lady talks about poverty. May I point out respectfully to her that since 2010, 1 million fewer people are living in absolute poverty, including 300,000 fewer children? [Interruption.] The hon. Lady may not like the answer, but she cannot argue with the facts. As for the regulations, we have been very clear about them, as was the Secretary of State yesterday.
Happy new year, Mr Speaker.
Five years after the roll-out of universal credit and two years after it was meant to finish, it is costing three times as much as the legacy benefits, and the Government have had to announce a pilot to test whether it even works. Is this not an admission of colossal failure, with equally colossal human and financial costs?
I do not know whether the hon. Gentleman is arguing against our conducting a pilot, but that would be irresponsible. We have always made it clear that we need to get this right, which is why we will organise a pilot.
I was delighted to hear the Minister say that he would listen to what is said about the changes that will have to be made. Does that mean that he will accept the necessity for a guarantee that vulnerable people on existing legacy benefits need not apply, that there will be some way of ensuring that they are being moved successfully on to universal credit before their legacy benefits are stopped, and that someone from the DWP will visit them at home to ensure that they are receiving what they are entitled to, and are completely aware of the changes?
As the hon. Lady will know, home visits are already available under the welfare system and the universal credit arrangements. However, she has raised an important point about the need to ensure that no one who is vulnerable falls through the cracks. We want to ensure that as well, which is why we are working with health charities and others to make certain that we get this absolutely right.
A quarter of households in receipt of universal credit are lone-parent households, and we know that as people move on to universal credit, 50% more of those households will lose rather than gain. Given the tax cuts that the Government have handed out to the richest households, can the Minister give me a single reason why any lone-parent household should be worse off rather than better off? Can he give me a single justification for that?
If the hon. Lady is so keen to support lone-parent households, she should have supported us and voted for the work allowances that we introduced in the Budget.
It has long been the Department’s intention to allow universal credit applications to be made through the medium of Welsh in Welsh-speaking areas, particularly in north and west Wales, but that facility has been denied to people so far by deficiencies in the computer system. What will be the impact of the “managed migration test phase”, restricted to 10,000 claimants, on that rather larger and more long-term policy intention?
I will double-check and write to the hon. Gentleman if I am wrong, but I believe that we have put in place the arrangements required to enable people in certain jobcentres in Wales to communicate in Welsh.
It sounds as if the Minister thinks that all the lessons have been learnt and all the problems with universal credit have been solved, but let me tell him that in Leicester, one of the areas in which the roll-out has occurred later, too many people are still waiting too long. They are getting into debt, and there has been a huge increase in demand for food banks. May I urge the Minister, even before any pilot involving people on existing legacy benefits, to stop and carry out a fundamental review with all the experts and charity groups, so that we can secure the reform that we need and my constituents do not have to fear the future?
Payment timeliness may be one of the issues to which the hon. Lady refers. The position has improved. When people cannot receive their full payments at the end of the first period, it is often because we have been unable to obtain verification because no information on housing or childcare costs has been provided, but support is available in the system. If there are individual cases in which the hon. Lady thinks that things have not gone well, she should come and talk to me: I would be very happy to have that discussion.
Yesterday, during DWP questions, the hon. Member for Clacton (Giles Watling) said that he struggled with online applications, which caused some mirth on the Government Benches. May I pursue the question asked by the hon. Member for Edinburgh West (Christine Jardine)? I tabled some written questions about the number of requests for face-to-face assessment interviews. I was told that since March 2015 there had been 144,000, of which only 308 had been home consultations. Can the Minister explain why so few people have been offered home assessments? If he cannot do so, will he conduct an investigation in the Department to find out why so many sick and disabled people are being denied such assessments?
There are a number of ways in which people can claim universal credit. There is, of course, the online process, and help with that can be provided in jobcentres. There is also the Freephone telephone line, and people can also have appointees. As the hon. Gentleman has said, there are home visits, but, again, I would be happy to discuss the issue with him.
Many people going on to universal credit find it difficult to manage their finances. May I ask the Minister to give serious consideration to local working with credit unions? I am a director of NE First Credit Union for the North East, which offers people simple bank accounts and affordable finance. Would the Minister consider linking credit unions with the DWP so that people can not only receive advice, but stop getting into the hands of loan sharks?
I would be happy to meet the hon. Gentleman to discuss that suggestion and see what is possible, but, as he will know, we have a new arrangement with Citizens Advice and Citizens Advice Scotland to ensure that advice is given to people to help them as they move on to universal credit. That arrangement will kick off formally in April. We have made £39 million available, and of course we want the process to work well.
The Minister must accept that he is kicking the can down the road and that managed migration is of no comfort to people in Glasgow North who are making new claims, are on a natural migration waiting weeks for the first payment or are subject to the mendacious two-child policy. If the UK Government cannot fix the flaws they themselves admit exist in UC, is it not time to devolve these powers fully to the Scottish Parliament and Government, who will put fairness and dignity at the heart of social security?
I would like to think that I have a good working relationship with my opposite number in the Scottish Government and of course we will continue to work with them on a range of issues. It is important that we get this process right for everyone and that is our intention.
I served in 2011 on the Welfare Reform Bill which paved the way for UC, and it is clear that the questions the Government could not answer then about UC they still cannot answer now, eight years later—and a little humility on the part of the Minister would be very welcome. Does he recognise that managed migration clients will not for the most part be the same as roll-out clients? There will be a higher level of vulnerability, with many people unable—and will continue to be unable—to work because of sickness and disability? What extra provision is he building into the system to make sure even this pilot does not leave people with a debt crisis and at risk of losing their home?
The hon. Lady gets to the point of the pilot phase, as that is precisely what we want to make sure happens: we want to get this right particularly for the most vulnerable. We are working with a range of stakeholders. I set out in an earlier answer the work-streams we are working on, and we will continue to do that until we get this right.
In an area such as mine where UC has already been rolled out, if somebody on legacy benefits who has more than two children reports a change of circumstances, they are told they must migrate on to UC only then to be told that because they have more than two children that migration cannot take place. By the time they have been told that, their housing benefit and council tax benefit and other benefits will have been stopped. It takes weeks to sort that out and real hardship is caused in the meantime. Small wonder therefore that food bank use and indebtedness are rocketing. Can the Minister say plainly that there are practical problems with the current system of roll-out, and what will he do to sort it out?
We have been fixing problems, and we will continue to do that. Again I say—I make this offer in all sincerity, not least because this is how we will learn in this process—that where the hon. Gentleman has a specific case I will be happy to sit down with him and talk it through and see what we can do to make sure that the system works for others who come after his constituent.
The Government always try to individualise our constituents’ problems, but these are systemic flaws in the system. People every single day are made deliberately worse off under this scheme which makes them wait five weeks. Deep design and administrative flaws have been listed exhaustively in numerous reports. Is it acceptable to continuously test and learn on people? Is it acceptable that every single day we have people naturally migrating on to UC, because they are no less vulnerable and deserving of protections than those on managed migration? Will the Minister please halt the natural migration and the managed migration?
The roll-out of UC has already taken place across all jobcentres. UC is continuing; I have set out the timetable, as the Secretary of State did yesterday. But the hon. Lady is right that we need to make sure we get this right and that is why we have the test phase. I am pleased that at least some colleagues on the Opposition Benches have acknowledged that this is an important part of making sure we get this right in terms of managed migration.
There is a fundamental flaw that I think is utterly pernicious in terms of UC—the first five-week wait. I had a constituent in my surgery before Christmas who was in tears, because, she explained, “I have never been in debt in all my life, and now I have had to go into debt, and it is the system that is encouraging me to do that. In fact, I heard the Prime Minister on television last night say that it is a good thing that I can take out a loan which I pay back.” We must stop pushing the poorest people in our country, who are often the proudest people in our country, into debt.
Of course we do not want to push anyone into debt, but may I just be clear that these advances are interest-free, so over a—[Interruption.] Over a 12-month period people will get their monthly payment and then their additional advance which they pay back over that period, and of course we will be extending that to allow people to pay that back over 16 months. Many people have welcomed the advances and now about 60% of those coming on to UC are taking out advances.
Will the Minister look at a serious flaw in debt repayment between legacy systems and the UC system? A constituent of mine has been diligently repaying an historical tax credit debt but that debt also moved when she moved on to UC. HMRC deducted £11 a month, but the DWP wants to take £79.46 from an income of only £317.82 per month after housing costs. Will the Minister meet me to discuss this case and the unfairness in the system, because people cannot live on this amount of money?
Of course I will meet with the hon. Lady, as I have done previously on issues she has raised. As a general rule, one would not expect deductions to be more than 40% of a standard allowance, and of course that figure will come down to 30%.
May I express to the Minister my concern about the worry and anxiety that people face when making UC claims? We had the roll-out in December in Hull. If there is a pilot from the middle of 2019 will some of the pilot numbers come from Hull, and will people in Hull be in any way penalised if they do not make a claim in time?
Of course we want to support people as they come on to UC, whether they are naturally migrating or in the test phase. We have now put in place a provision with Citizens Advice to make sure people are provided with that consistent support across the country and I want that to work well.
My constituent lost his job in October and waited five weeks for his first payment of UC, receiving £149 at the beginning of December, which has to last him until the middle of this month. He received an advance payment of £549.79 in November which he used to pay for his rent. This has been deducted from his future payments, hence causing hardship to him, and the DWP is unable to reduce the repayments during the current assessment period and has not agreed to do so from January. However, he was left over Christmas with no money to live on and no access to other possible funding. What will the Minister do to make the assessment period more flexible in order to protect claimants from suffering such obvious hardship?
The assessment period is five weeks. We of course did away with the seven-day waiting period that was in place previously, and of course 100% advances are available on day one if people require them. The hon. Gentleman raises a detailed individual case, however, and I would be very happy to talk to him about it, perhaps after this urgent question.
Nearly 30% of eligible households in my constituency are already on UC, but many cases that I deal with involve people whose legacy benefit was incorrectly withdrawn and who are then forced to apply for UC and find themselves with a lower award, and there is no transitional support for these people. What will the Minister do to address that? Surely at a minimum they should be allowed to stay on the legacy benefit?
Without knowing the individual cases the hon. Gentleman raises I cannot comment in any detail—[Interruption.] I have been asked to answer on policy, and that is precisely what I am doing. The reality is that we have now rolled out UC across the country, so new claimants or those who have a change of circumstance will move on to UC. But again, I am happy to discuss individual cases.
The regulations that the Government intended to lay did have provision for back payments for those who transitioned through natural migration and lost their entitlement to severe disability premium. Given that both women’s aid organisations in my constituency, Clydebank Women’s Aid and Dumbarton District Women’s Aid, are gravely concerned about the impact of transition not just on those vulnerable women fleeing domestic abuse but those who have children who are disabled, will the Government now bring forward regulations to initiate these back payments and ensure no one loses out in the future? A yes or no answer would be helpful.
I am very happy to talk to the hon. Gentleman about this. I assume that he refers to the run-on of the DWP legacy benefits from 2020, and of course this will apply to claimants on managed migration and to those who naturally migrate, provided that they do not have a break in their claim.
Since as far back as 2013, Inverness and then the rest of my constituency suffered through the pilot and on through the full-service roll-out of universal credit. The new year front page of The Inverness Courier newspaper described the rise of poverty in our community, and that was directly attributed to universal credit. Over nearly six years, the UK Government have failed to listen to any of the agencies, the charities, the council or the people who have been affected. What does the Minister say to those people who have suffered directly over all that time from having their plight ignored by this Government?
I have a lot of respect for the hon. Gentleman, and I am sorry that we are ending this urgent question on a discordant note, but respectfully, I do not agree that we have not listened. That is precisely what we have been doing, and we will continue to do so through the test phase and beyond.
(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on the awarding of a contract to Seaborne Freight as part of his no-deal contingency planning.
The Government are working towards ensuring that we leave the European Union in March with a sensible agreement for the future, through the withdrawal agreement that the House will consider next week, but any responsible Government need to plan for all eventualities. As part of that work, the Department for Transport has been undertaking a wide range of activities to mitigate the impact on the transport system of a potential no-deal EU exit, particularly around the movement of freight. For example, my Department has been delivering measures such as the Haulage Permits and Trailer Registration Act 2018, which puts systems in place if a permit system is required to ensure that UK heavy goods vehicles can continue to be used in the EU.
We have also put in place Operation Brock as a replacement for Operation Stack, in order to deal with disruption at the channel ports. This is not simply a Brexit-related measure. We do not want to see any repeat of the issues that Kent faced in 2015, with the closure of the M20. If there is any disruption at the ports, for whatever reason, Operation Brock should keep the motorway open while we prepare the long-term solution of a lorry park. Yesterday, Kent County Council and my Department carried out a live trial of one part of Brock, on the route from Manston. We were satisfied with the number of vehicles that took part, which was more than enough to determine a safe optimum release rate from Manston to the port of Dover via the A256 and caused minimal traffic disruption along the route.
This is a range of examples of the sensible contingency planning that a responsible Government are carrying out to ensure that we are prepared for a range of outcomes. We remain committed to ensuring that movement across the UK border is as frictionless as possible, whatever the outcome. However, without planning, there could be significant disruption to the Dover strait, particularly if no agreement is reached. Given the importance of these routes to the UK economy, it is vital that we put in place contingency plans to mitigate any disruption that might occur in a no-deal scenario.
The Department is working with the port of Dover and the channel tunnel—as well as with our French counterparts, at both official and ministerial level—to ensure that both operate at the maximum possible capacity in all instances. Those discussions are positive and I am confident that everyone is working constructively to ensure that the Dover-Calais route—particularly at the port of Dover—and the tunnel continue to operate fluidly in all scenarios. However, in order to ease any pressure on those routes, my Department has completed a proper procurement process to secure additional ferry capacity between the UK and the EU. Following this process, three contracts were awarded to operators, totalling a potential of £103 million. Almost 90% of that was awarded to two well-established operators: £46 million to Brittany Ferries and about £42 million to DFDS. These contracts provide additional capacity on established routes, and through additional sailings and, in some cases, additional vessels, into ports in northern Europe and other parts of France.
A third, smaller contract, which is potentially worth £13.8 million, was awarded to Seaborne Freight, a new British operator, to provide a new service between the port of Ramsgate and Ostend. Let me stress that no money will be paid to any of these operators unless and until they are actually operating ferries on the routes we have contracted. No money will be paid until they are operating the ferries. No payment will be made unless the ships are sailing, and of course, in a no-deal scenario, money will be recouped through the sale of tickets on those ships.
As I believe the House knows, Seaborne is a new operator looking to reopen that route, which closed five years ago. As a result of this, we ensured that its business and operational plans were assessed for the Department by external advisers, including Slaughter and May, Deloitte and Mott MacDonald. These included Seaborne’s plans to charter vessels for service, as is common across many transport modes including airlines and rail operators. We also conducted searches on the directors of Seaborne via a third party, and found nothing that would prevent them from contracting with the Government.
I make no apology for being willing to contract with a new British company, particularly one that has a large number of reputable institutional backers. We contracted with Seaborne Freight because the service it proposes represents a sensible contingency in the event of disruption on other routes. I am also pleased that this award supports the port of Ramsgate, which operated as a commercial ferry port as recently as 2013 and has taken roll-on roll-off services as recently as last year. I am looking forward to seeing ferry services resume from this port. The infrastructure work required to make that possible has already started, and it is one of the most visible and symbolic elements of how seriously my Department is taking contingency planning for all Brexit eventualities.
The Transport Secretary has awarded a £14 million contract to a company with no money, no ships, no track record, no employees, no ports, one telephone line, and no working website or sailing schedule. Two of Seaborne Freight’s directors would not pass normal due diligence requirements. One of them, Ben Sharp, is already under investigation by a Government Department. Did the Department for Transport consult other Departments about Mr Sharp’s fitness as a company director? Ben Sharp quit his business activities in the Gulf leaving a trail of debt behind him. His company, Mercator, was merely a shell finding vessels for security companies. Is it correct that he operated without the licence he needed pursuant to the Export Control Order 2008? Did he operate without that licence? Yes or no?
It is abundantly clear from the promissory note published by “Channel 4 News” that Sharp owed and still owes Mid-Gulf Offshore more than $l million, and many more companies besides. How is it that Slaughter and May, Deloitte and Mott MacDonald were instructed to restrict their due diligence examination to the face value of the presentation put to them by Seaborne? Why on earth have they been allowed to restrict their investigation to the present company and not to consider the trading history of the individuals concerned, particularly Ben Sharp? The mayor of Ostend has made it clear that Seaborne cannot berth at his port as it has no bank guarantees and no contract with Ostend. It is without capital. Who is investing in Seaborne? Who is paying for the dredging of Ramsgate?
This is a shoddy and tawdry affair, and the Secretary of State is making a complete mess of it. This contract is likely to be unlawful and it violates every current best practice guidance issued by Whitehall. When will he realise that this country cannot continue to suffer the consequences of his gross incompetence? Why is this calamitous Secretary of State still in post?
I am not even going to address the idiocy that the hon. Gentleman has just come up with. He has made a number of allegations, which I suggest he goes and makes elsewhere. I am simply going to say this: the Government have let a contract for which we will pay no money until and unless ferries are running. That is responsible stewardship of public money. On other matters, from the due diligence we have done, there is no reason to believe that anyone involved in this business is not fit to do business with the Government. I say this again: we are not spending money unless these ferries operate.
Many of us would agree that much the best end solution for the talks between the Government and the EU would be a wide-ranging free trade agreement, as offered by President Tusk in March, with zero tariffs. However, to bring the EU to the table, to counter the arrogant boasting of Mr Selmayr in the Passauer Neue Presse, which many of us have been reading since we heard about it yesterday, and to show that we are deadly serious, it is obvious that we must prepare for World Trade Organisation terms. I therefore commend the Secretary of State for his various actions to show that we are serious about preparing this country to work under those terms, through which we work with the rest of the world.
I am grateful to my right hon. Friend. It is absolutely right and proper that we prepare for all eventualities. The sad thing is to see the Labour party trying to destroy Brexit and taking a destructive approach to any sensible measures that this Government take to prepare for all Brexit eventualities. Frankly, Labour is not fit to be in opposition let alone in government.
Seaborne Freight has no boats, negative equity of £374,000 and no history of running ferry or freight services. The current director, Brian Raincock, and chief executive Ben Sharp both had companies liquidated owing Her Majesty’s Revenue and Customs money, with Raincock’s debt at £600,000. HMRC is us, the taxpayer, so what constitutes due diligence? What red flags were identified? How did that company get handpicked for direct negotiations for operating out of a port that is not even ready?
The Secretary of State’s written statement indicated that direct negotiation was possible under regulation 32 of the Public Contracts Regulations 2015, which relates to emergency situations brought about by unforeseeable events. However, the Government claim to have been planning for no deal for over two years. What legal advice was provided? What level of madness exists to contract contingency planning to a company with no track record of such service?
Saying that the company will get paid only if it can deliver misses the point, because if it does not deliver the so-called emergency contingency service, that would leave us high and dry. Is that the project for which the ministerial direction was required? Is there a central Government instruction and process for the awarding of such no-deal Brexit contracts? If so, can we see it? Does this contract comply with that guidance? If so, that highlights the shambles of this Government’s no-deal preparations. When will the Secretary of State do the right thing and go?
This procurement was done properly and in a way that conforms with Government rules. It secures the position of the taxpayer by ensuring that no money will change hands unless and until the ferries are running. The hon. Gentleman does not seem to listen.
I join my right hon. Friend the Member for North Shropshire (Mr Paterson) in supporting my right hon. Friend the Secretary of State’s determination to be prepared for all eventualities. He has succeeded on aviation services, the transit convention and other things that will ensure that trade keeps flowing. However, what lessons can be learned from this situation? No matter how good this company might be, this is a difficult contracting environment in which things must be done quickly under intense political and public scrutiny. Will my right hon. Friend ask the permanent secretary to conduct a quick lessons-learned exercise so that companies with which the Government are contracting are better prepared than this one for the scale of public scrutiny to which it has been subjected?
My hon. Friend makes a valid point about public scrutiny. This contract was properly signed off by my Department’s accounting officer, and it was done in the best possible way when dealing with a new business, which is to ensure that the business will be paid only when it delivers the service. That is a responsible use of taxpayers’ money.
I have already written to the Secretary of State with a long list of questions about his Department’s procurement of additional ferry services as part of no-deal planning, and I look forward to receiving his response. Yesterday, however, Lloyd’s Loading List reported some extraordinary remarks from the CEO of Seaborne Freight, Jean-Michel Copyans, about the proposed Ramsgate to Ostend route. He said:
“Then we’ve had to identify the vessels best suited to the type of crossing, which we’re keeping a secret for the moment.”
With no crew, no signed contracts in place with Ramsgate or Ostend, no clear plans to bring the infrastructure back into service and now “secret” ships, is there not a huge question mark over the deliverability of the service?
My officials and I have confidence in the deliverability of the service, but if the firm fails to deliver it, we do not pay.
Does my right hon. Friend agree that no-deal contingency planning is very much in the national interest? Will he join me in condemning those who want to try to prevent no-deal planning through parliamentary wrecking tactics and sabotage, and through Trump-style Government shutdown threats? Does he agree that such tactics from the Labour party would make problems in Kent and elsewhere more likely, and that they are irresponsible, reckless and wrong?
I completely agree with my hon. Friend. He will agree that it is right and proper that we do everything we can to keep trade flowing through the port of Dover and the channel tunnel as smoothly as possible. We are taking prudent measures to ease potential pressures on those ports, which is the sensible thing to do. The risk to the taxpayer is not there, because we will not pay unless the service is delivered. The Labour party does not seem to believe in no-deal Brexit planning.
The Secretary of State takes a rather unusual approach to contract letting, because as soon as he is questioned about the ability of the firm with which he has contracted to deliver on what it has promised, he tells the House, “If they don’t do it, we won’t pay.” He said a moment ago that he is confident that the company will be able to run the service, so will he answer a very simple question? Has Seaborne Freight told the Department which vessel it has acquired in order to provide the service, which could be needed in just over two months’ time?
The company has told my Department in great detail about its plans, which are being finalised commercially. We are confident that the firm will deliver the service.
My right hon. Friend will be aware that Seaborne Freight has had it in mind for well over two years to start the Ostend-Ramsgate route. Does he agree that the constant denigration of the contract, which means that the contractor will not get a single penny of anyone’s money until it fulfils the contract, is damaging to sensible work? Finally, if we were—God forbid—to crash out on WTO terms in the extreme circumstances mentioned by my right hon. Friend the Member for North Shropshire (Mr Paterson), will the Secretary of State tell the House whether he would have any arrangements to take up shipping from trade?
My right hon. Friend makes a good point. There seems to be visceral hatred of small business on the other side of the House and a visceral belief that the Government should not be willing to contract with small business. The Government are told time and again that we should contract and work with small business, and help small businesses to develop, but when we do so, we get nothing but a wall of criticism from Opposition Members. The Labour party hates business. This new Labour party is very different from the one of 10 years ago—it simply hates business.
I say to my right hon. Friend that if we find ourselves in a no-deal situation, there are other measures that we can bring forward. We are actively looking at how we would do so.
I have never seen a Minister bluster and bluff quite as much as this Minister has today. Following everything that the Secretary of State has heard from the shadow Secretary of State and the Chair of the Transport Committee, does he not have one iota of concern about the contract being let to this shyster?
Mr Speaker, that is an inappropriate thing for any Member to say, and I am not going to respond to it.
I simply say that the Secretary of State is perfectly entitled to his assessment of whether it is appropriate in political terms. No breach of order has taken place procedurally, but the Secretary of State has made his judgment, and I accept that.
I am glad to hear the Secretary of State confirm that no money will change hands, but there will undoubtedly be vast manpower and bureaucracy costs in no-deal planning, and we know that there are actual costs when it comes to commissioning refrigerated warehousing and special air freight. All that could be avoided if the Government ruled out no deal. No deal would be catastrophic, and no sensible Government should inflict that on their people.
Of course, the best way of avoiding no deal is to ensure that the deal passes through this House, and I will vote for it next week.
It feels like we are on the set of a film called “Carry On Brexit”. Le Figaro described the contract as ferries “sans bateaux”. The firm’s terms and conditions are from a pizza delivery company, so we wonder whether the MV Hawaiian and the MV Pepperoni will be sailing the route. To get away from “Carry On Brexit”, the serious point is that the Secretary of State is saying that if the company does not deliver ferries, there will be no payment, but if it does not deliver the ferries, what will be the fall-back, stopgap or contingency? If there are no ferries, the whole thing falls apart—it is “Carry On Brexit”!
What a load of absolute tripe. I can tell the hon. Gentleman has not been listening to me. Ninety per cent. of this contract has been awarded to substantial and established ferry operators—DFDS and Brittany Ferries. We did not have a reason to exclude a small business from taking a small part of the contract with a legitimate, valid bid.
It is remarkable, is it not? If the Government were to do no planning for all Brexit eventualities, they would be condemned. Now they are doing sensible planning, they face derision. I have met Seaborne Freight, which has shown itself, over a number of years, to be the only party interested in running new services between Ramsgate and Ostend—that was even before this contingency planning. Personally, I welcome the dredging and improvements now taking shape at the port of Ramsgate at no cost to local taxpayers. We will have a regeneration bonus, no matter what, and I welcome that.
Thanet District Council and the people of Ramsgate will do all they possibly can for Brexit provision, so I welcome the measures the Secretary of State has taken, but there are people in this House who do not seem to be listening. Will he say once more that there will be no cash for Seaborne Freight if it does not run the services?
I am very happy to reiterate that. It is a responsible approach to a new contract with a new business that we will pay when the business delivers. It is disappointing to hear that the Labour party is so opposed to the regeneration of the port of Ramsgate. It was not so long ago that the Labour party represented Ramsgate in Parliament but, given this negative attitude, it does not deserve ever to do so again.
One of the directors of Seaborne Freight has been named by the Financial Times as Brian Raincock, whose previous company went into liquidation in April 2017 owing £585,000 to its main creditor, HMRC, which is essentially the British taxpayer. Is the Secretary of State content that this excruciating fact apparently did not come up during his Department’s due diligence on Seaborne Freight before it awarded the contract? Whether or not Seaborne Freight delivers the ships, it has still been awarded a £14 million contract, so hon. Members on both sides of the House rightly have an issue with the Secretary of State and his response today.
I keep telling the hon. Lady that the £14 million will not be paid unless Seaborne Freight delivers a service. I will not comment on the tax affairs of an individual, and nor should she. The due diligence on all those participating in the company found no reason why they are unfit to do business with the Government.
I congratulate the Secretary of State on his detailed preparations, but will he also consider how south Essex can support those preparations at Tilbury, London Gateway and London Southend airport? London Southend airport has experience of just-in-time delivery to Dagenham and is run by Stobart Group, an excellent freight haulage firm.
I absolutely agree. Of course, if we find ourselves in a no-deal scenario, a number of other ports, including Tilbury, will play a part. I hope we do not reach that point, and I think we all agree that we want a sensible free trade agreement with the European Union after 29 March, but the reality is that we need to make sure we are prepared for all eventualities. In such a situation, many of our ports up the east coast and along the south coast will play an important part in making sure that trade flows freely.
I am very concerned about the legality of this procurement process. In his statement yesterday, the Secretary of State said that he had proceeded under regulation 32 of the Public Contracts Regulations 2015, which allows the Government to circumvent the normal, transparent and EU-mandated procedures. I have a copy of the contract notice here, which is freely available on the internet, and it says that the basis for proceeding under regulation 32 is “extreme urgency.” As my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) said, the idea that no deal is a possibility and, to quote the Prime Minister, that no deal is better than a bad deal has been around for some time, so how can the Government, at this late stage, justify proceeding with procurement that is appropriate only in the case of extreme urgency?
I have two questions for the Secretary of State and, just for once, my constituents would like to hear an answer. First, will he release the legal advice that permitted him to proceed under regulation 32? Secondly, as he will be aware, if he has proceeded wrongly under regulation 32, his Department and the Government are open to legal action. How much money has been set aside for the contingency of court action about the illegality of the procurement process and a claim for damages?
It is my view that, as we move towards leaving the European Union, preparing for all eventualities is a matter of extreme urgency, which is also the advice that my Department has received and has given to me.
If Opposition Members had an ounce of sense and concern for the national interest, they would welcome the fact that the Department for Transport is preparing to leave the European Union under all circumstances and they would recognise the courage of the Secretary of State, his Ministers and his officials in testing and operationalising their plans. Does he share my disbelief at the policies that are being urged on him by Opposition Members, and will he reassure me that he will continue his excellent work to prepare this country for leaving?
I am very grateful to my hon. Friend for his comments. I give him an absolute assurance that I will continue that work. Frankly, the tragedy is that the Labour party seems to have abandoned interest in the national interest.