House of Commons
Wednesday 19 June 2019
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Leaving the EU
I should like to begin by wishing Shelley Kerr and the Scotland team all the best in tonight’s women’s World cup match against Argentina. Although results have not necessarily gone the team’s way to date, they have been a credit to Scotland and have transformed people’s views on women’s football.
I have had regular discussions with the Prime Minister on a range of matters relating to EU exit. It is the Government’s position that leaving the EU with a deal is in the best interests of Scotland and the UK.
One thing that the Secretary of State for Scotland and I can agree on is wishing our colleagues well in the football, and, of course, things always go very well for the Scots where Argentina and football are concerned.
It seems clear that the Conservative party is on the verge of electing a new leader and Prime Minister whose primary purpose will be to deliver a no-deal Brexit. Is the Secretary of State prepared to be part of a no-deal Cabinet that will shrink our economy by up to 7% and put 100,000 people in Scotland out of a job?
Obviously, I am answering questions on behalf of Her Majesty’s Government and not on behalf of the leadership candidates, but I am clear that those aspiring to the leadership of the Conservative party want to leave with a deal. Throughout this process, I have voted on every occasion to leave the EU with a deal. The hon. and learned Lady has never done so.
According to every piece of the Secretary of State’s own Government’s analysis, there is no version of Brexit that fails to harm Scotland. New YouGov polling shows that Tory members would prefer Scotland to be an independent country, rather than stopping Brexit. Which choice should the Scottish Secretary make: a devastating no-deal Brexit Britain, or giving the people of Scotland the choice to be an independent European nation?
Mr Speaker, it will not surprise you to hear me say that Scotland has already made its choice on whether to be independent or part of the United Kingdom. The poll to which the hon. Gentleman referred was based on a false premise. This Government are about delivering Brexit and keeping Scotland at the heart of the United Kingdom.
Will the Secretary of State tell us how much money the Scottish Government have given to local authorities in Scotland to prepare for our exit from the European Union?
As far as I understand it, the UK Government have made more than £100 million available to the Scottish Government to help to prepare for Brexit—and, indeed, a no-deal Brexit—but precisely none of that money has been allocated directly to local authorities or to Police Scotland.
Further to the reply that the Secretary of State gave a few moments ago, does he agree that the majority of Scots voted in the 2017 general election for parties that were committed to delivering the 2016 referendum, and that it would be a dereliction of our democratic duty not to do so?
I absolutely agree with my hon. Friend. That is why this Government are committed to respecting the outcome of both the referendums that have taken place in Scotland: the 2014 independence referendum, in which people voted to remain in the United Kingdom; and the 2016 EU referendum, in which people across the UK voted to leave the EU.
This is not just about the five leadership candidates. Both in this House and elsewhere, I have been clear that a no-deal Brexit would be bad for Scotland, and we want to avoid that. We want to leave with a deal and, as I understand it, the leadership candidates are all setting out how we could leave with a deal.
I thought for one moment that the hon. Lady was going to refer to her own leadership campaign, and if I did not think it would stymie her chances I would wish her well. She knows that the current uncertainty is the more serious problem for businesses in Scotland and elsewhere, but we could have ended that uncertainty much earlier by voting for a deal.
I join the Secretary of State in congratulating and sending our best wishes to Scotland’s women’s team, particularly to Leanne Crichton. She is from Dennistoun in my constituency, and it was a pleasure to meet her just a couple of weeks ago.
Speaking of team players, the Secretary of State has refused to rule out working with the calamitous former Foreign Secretary, who is prepared to see the United Kingdom leave the EU on disastrous no-deal terms. A majority of Conservative party members would rather see the economy crash, the United Kingdom fragment, and their own party destroyed to secure Brexit. The party is now better described as the “English nationalist party” rather than a party that wishes to preserve the unity of the British people. Has it now dawned on the Secretary of State that he may not have left the Conservative party, but the Conservative party has certainly left him?
I am sure that that read better as a press release. This Government’s position is quite clear: we are about honouring both the 2014 Scottish independence referendum and the 2016 EU referendum. I will take no lessons from the hon. Gentleman on party affairs when his colleague Neil Findlay used his resignation letter to describe the Scottish Labour Party as having a “toxic culture” and “eternal” infighting.
The Secretary of State has been consistent, if nothing else, in denying the Scottish Parliament’s aspirations to offer the people of Scotland a choice between remaining in a Brexit Britain or taking control of their own affairs. Indeed, he made it a central plank of his party’s election campaign last month. In that election, the Scottish Conservative and Unionist party received 11.6% of the votes. Given that only one in nine people support his proposals, is it not time to demonstrate some grace and humility and stop behaving like a colonial overlord?
Many of us appreciate that this may well be the Secretary of State’s last outing in this Chamber in his current role, so his mind may be somewhat distracted, but he must surely recognise that the circumstances have now changed. His party is about to elect a leader and force upon us a Prime Minister hellbent on a no-deal Brexit. If that happens, will he continue to refuse the right of the Scottish Parliament to consult Scotland’s people on their own future?
I understand that the Scottish Parliament will consult via a people’s assembly process, although I do not agree with it. When we have a Scottish Parliament and 129 elected representatives, I feel that is the forum in which these matters should be discussed.
The hon. Gentleman is wrong in how he characterises the Conservative leadership candidates, who have made it clear that their preference is to leave the EU with a deal.
We are helping families to keep more of what they earn by raising the personal allowance, which has gone up to £12,500. As a result, 2.4 million Scottish taxpayers received a cut in their tax in 2019-20 compared with 2015-16.
As well as letting hard-working families keep more money in their pockets—in stark contrast to the Scottish Government, who are taxing 22,000 of my constituents more than they would be taxed if they lived in England—raising the personal allowance also takes some of the lowest paid out of tax altogether. Will my right hon. Friend confirm how many people in Scotland have been taken out of paying income tax by the Conservative Government?
Thanks to this Government’s increases in the personal allowance, 135,000 Scots no longer have to pay any income tax at all. That is the record of this Conservative Government: cutting tax, as opposed to the SNP Scottish Government who are making Scotland the highest taxed part of the UK.
I am always willing to look at specifics. Of course, we are working with the Scottish Government to bring forward the variations in universal credit that they are seeking, and one of those variations relates to the payment of rent. Another point I have made many times at this Dispatch Box is that the Scottish Government also have wide-ranging powers to make additional payments to people in Scotland, if they choose.
Our armed forces serve the whole United Kingdom, and, as an English MP, I am proud that our United Kingdom Government are supporting our armed forces personnel stationed in Scotland to the tune of £4 million. Does my right hon. Friend agree that it is only the UK Government who can stand up for our armed forces personnel?
The Ministry of Defence again made a very positive announcement this year confirming extra payments to servicemen and women who have been sent to Scotland for operational requirements to ensure that they are not penalised for serving in Scotland by the SNP’s high-tax policies.
I note what the Secretary of State says about taxation. However, people living in remote parts of the UK, such as my constituency, are paying crippling delivery charges for goods. Would we not help the income of those families by tackling this serious problem?
I recognise this issue and, obviously, it has been raised many times in this Chamber by my hon. Friend the Member for Moray (Douglas Ross). The Government are seized of this issue and are looking to try to resolve this inequity whereby people living in remote and rural areas are asked to pay disproportionate delivery charges.
Although the lowest-paid members of the armed forces in Scotland pay less tax than their counterparts in England, can the Secretary of State confirm that the mitigation payments made by the United Kingdom Government to the highest earners in Scotland are subject to tax?
This is a joint review between the UK Government and the devolved Administrations, and it is incumbent on all Administrations to make progress. There are ongoing discussions across the review’s work streams, which will be discussed at the next meeting of Joint Ministerial Committee (EU Negotiations), which is next week.
The frontrunner to become the next Prime Minister has published an anti-Scottish poem. He believes that a pound spent in Croydon is of more value than a pound spent in Strathclyde, and that a Scottish MP should never be Prime Minister. Does the Secretary of State agree that if the former Foreign Secretary became Prime Minister, it would be a disaster for intergovernmental relations and a boost for Scottish independence?
At every Scottish Question Time we hear the assertion that this or that will be a boost for Scottish independence—it has got to the stage where if the chicken crosses the road, it will be a boost for Scottish independence. It is for individual candidates in the Conservative leadership elections to answer questions about their own position and background.
During an open session of the Political and Constitutional Affairs Committee on Monday 20 May, the Chancellor of the Duchy of Lancaster was asked whether he could give an update on the progress of the review of intergovernmental relations. He replied:
“I cannot put a firm timescale on this. Perhaps, if we were looking towards the end of this year”.
Given the time that has elapsed, and the uncertain political times we are living through, is that good enough for Scotland?
I believe that progress is being made, and I am hopeful that next week’s meeting of the JMC(EN) will provide an opportunity to discuss the principles that would underpin the new IGR agreement. That was discussed with Welsh Government Ministers and Mr Mike Russell at the last meeting of the JMC(EN).
The current frontrunner to become Prime Minister has previously written that
“government by a Scot is just not conceivable in the current constitutional context.”
Does the Secretary of State agree? Does he believe that such an opinion is helpful to intergovernmental relations?
The Scottish Affairs Committee should be holding the Secretary of State to account, but he keeps refusing our invitations. As this is his last Question Time before leaving office in the great Tory purge to come, does he agree that the Scotland Office is no longer fit for purpose, that its function as a propaganda unit is unbecoming of a Government Department, and that it needs serious reform and overhauling—or quite simply to be abolished? What is the point of the Scotland Office?
Like me, the Secretary of State has served as a councillor, an MSP and an MP, so does he agree that we can have political differences within and between the various levels of government, but that that should not be misconstrued as a breakdown in intergovernmental relations?
I absolutely agree with my hon. Friend. Many of the disagreements between the Scottish and UK Governments are over political differences, rooted in the fact that this Government want to respect the outcome of the 2014 independence referendum and the SNP Scottish Government want to have another referendum. They are political disagreements.
Will my right hon. Friend confirm that £1.3 billion has been allocated to Scotland through the city and growth deals? Lessons learned through the city and growth programmes are being played into the Union strategy and intergovernmental relations, so we take the positives out of the incredible investment that is coming to Scotland through the UK Government.
Thank you, Mr Speaker.
The Scottish Affairs Committee has just released our report on intergovernmental relations. It is an evidenced-based, wide-ranging report on a number of important issues. This cross-party report states that the Scotland Office has failed to keep pace with devolution and that most direct intergovernmental relations are conducted outwith the Secretary of State’s Department. I have noticed in some of the press comments that he is not taking this at all seriously, so will he now agree to a proper review of his Department?
I do not know to which press comments the hon. Gentleman refers, because although we have our political differences, I respect the work of his Committee and have been clear that I welcome the opportunity for a review of the Scotland Office. I am confident that such a review would result in an enhanced Scotland Office, not the loss of it.
First, I associate myself with colleagues’ remarks and wish the Scotland team all the very best in their final match tonight.
Two parliamentary Select Committees have now recommended that the Secretary of State’s role should be abolished. The Secretary of State ignored Labour’s warning about the democratic deficit of the Joint Ministerial Committee, he botched the devolution element of the Brexit Bill and he has failed to secure funding for Scotland as part of the stronger towns fund. Does he accept any responsibility whatsoever for presiding over the mess that has led to the unprecedented step of two parliamentary Committees calling for his head?
I do not know whether the hon. Lady has read the Scottish Affairs Committee report; it might have been helpful, because it does not call for the abolition of the Scotland Office. The SNP obviously wants to see the Scotland Office abolished—the SNP wants to see the UK Government abolished. The report calls for a review, and after 20 years of devolution a review is a perfectly appropriate step to take.
The issue is how we got to this point. The right hon. Gentleman’s handling of all the issues I have outlined confirms why we are in this mess. Given that he is unhappy in his work, his threats to resign may well be fulfilled by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) in a short period.
Both the Secretary of State and Ruth Davidson have flip-flopped on whether they would work with the former Foreign Secretary if he became Prime Minister. Does the Secretary of State think that if the former Foreign Secretary is elected as Prime Minister, his diplomatic skills will come to the fore and he will improve relations between the Scottish and the UK Government, or would it be another Nazanin Zaghari-Ratcliffe moment?
I am very clear: I respect democracy and will respect the result of the Conservative leadership election. All five of the candidates who are still in the race are clear that they are Unionists, which is what makes them different from the Leader of the Opposition. They will not be cosying up to the SNP to have a second independence referendum.
Strengthening and sustaining the Union is a key priority for the UK Government. The Government deliver for the people of Scotland day in, day out, whether through creating jobs, opportunities and long-term growth, or keeping our citizens safe.
One obvious way further to strengthen the Union is for key Government Departments, such as the Ministry of Defence and the Department for Work and Pensions, to move more jobs and activities to Scotland. What is the Secretary of State doing to pursue that agenda?
The Scottish Government have launched an independent review of the joint campus of Buchanan and St Ambrose High Schools in my constituency, after health and safety concerns were raised by parents, pupils and staff. Does the Secretary of State agree, like me, with the concerned parents, pupils and staff, who think that an independent review must properly assess the water quality and the site of both schools, including for air and soil contamination—for the past, present and future of these children?
I continue to work closely with colleagues on the Fisheries Bill, which will allow us to manage our fisheries sustainably and deliver on our promise to take back control of our waters. It will allow us to decide who may fish in our waters and on what terms as we become an independent coastal state.
The last time that I asked the Secretary of State about the Fisheries Bill, he deflected the question by saying that
“we will see what happens when the Bill returns on Report.”—[Official Report, 16 January 2019; Vol. 652, c. 1152.]
That was five months ago, and we have still not had the Fisheries Bill on Report. When are we going to get it?
Oil and Gas Industry
I have regular meetings with my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy on a range of issues relevant to Scotland. That has included discussions about the support that this Government have provided to the oil and gas sector. The UK Government are committed to ensuring that this key industry has a long future.
I thank the Secretary of State for that answer. May I congratulate him and the Scotland Office on supporting Scottish industry, when the SNP Scottish Government do not? It is due to his hard work that transferable tax history was delivered to the oil and gas industry. Does he agree that Opposition suggestions that we should divest ourselves of the oil and gas industry would threaten 120,000 highly paid Scottish jobs?
Since joining this Parliament, my hon. Friend has become a real champion of the industry, and it disappoints me to hear Opposition Members describing oil and gas as a dirty technology with no long-term future. We can be clear that this party and this Government will always stand up for Scotland’s oil.
Drug Consumption Room: Glasgow
There is currently no legal framework for the provision of drug consumption rooms in the UK. The Scottish Affairs Committee is undertaking an inquiry into drug use in Scotland. As with other inquiries, the Government will consider the Committee’s report.
I hear what the hon. Lady says, but I do not think that the hon. Member for Perth and North Perthshire (Pete Wishart) would accept that we would not want to take seriously his Committee’s serious inquiry—the Committee is visiting many overseas examples. We want to look at its report, and that is what we will do.
The Prime Minister was asked—
Today marks two years since the terror attack on the Finsbury Park mosque. It was a truly cowardly and depraved attack that was intended to divide us. Instead, London remains united, and it is London’s diverse communities that make London the world’s greatest capital city.
In recent days and weeks we have seen flooding across the country, which has been particularly severe in Lincolnshire. I know that the whole House will want to join me in paying tribute to the work of the emergency services, our military, the Environment Agency and all those who have been working on the ground to support the communities affected. The Government stand ready to respond and offer all assistance where required.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
I associate myself and the whole House with the comments that the Prime Minister has made about the Finsbury Park mosque attack and the flooding in Lincolnshire.
If our town centres are to survive and thrive, we need more people living in them, more people working in them and more people spending their leisure time in them. I welcome the future high streets fund and commend to my right hon. Friend the Prime Minister the important bid that has been made by Nuneaton. Will she speak to her Ministers and ask them to look on that bid very favourably?
My hon. Friend is right to say that high streets are changing, and we are committed to helping communities to adapt. He set out some of the things he wants to see if those high streets are to continue to thrive. As he said, we have provided £675 million through the future high streets fund. I am pleased to hear about the Transforming Nuneaton programme, which I understand aims to increase footfall and drive economic growth. Nuneaton’s bid for the future high streets fund is currently under consideration, and we hope to announce the bids that have been successful in going forward to the business case development phase in the summer.
Today does mark two years since the terrorist attack on Muslim people in Finsbury Park outside the mosque, and the murder of my constituent Makram Ali. With the far right on the rise both in our country and across the world, we can all send a message to all those who seek to sow hatred and division in our society that we will not be divided. Our diversity is our strength, and I believe it always will be.
I concur with the Prime Minister about the need to support people who have suffered as a result of the floods over the weekend, and about the work of the emergency services in helping them.
On Friday, I was honoured to join Grenfell residents and survivors to mark the two-year anniversary of that terrible tragedy. With great dignity, they are campaigning for justice and change. Across this House, we have a duty to ensure that such fires can never happen again. That is why I have signed up—I hope the Prime Minister will do so as well—to the “Never Again” campaign, which is run by the Fire Brigades Union with the support of the Daily Mirror. Three days after the Grenfell fire, the Prime Minister said:
“My Government will do whatever it takes to help those affected, get justice and keep our people safe.”
So two years on, why do 328 high-rise buildings—homes to thousands of people from Newham to Newcastle—still have the same Grenfell-style cladding?
I absolutely agree with the right hon. Gentleman that we will never be divided and that our diversity is indeed our strength; we should all celebrate that diversity.
The right hon. Gentleman refers to last Friday being two years on from the terrible tragedy of the Grenfell fire. I was very pleased yesterday to welcome, as part of Green for Grenfell, people from the Grenfell community—Grenfell United and others—to No. 10 Downing Street. I was particularly pleased to meet young people, hear their questions and talk to them about their concerns for the future. [Interruption.] I am pleased to see the shadow Foreign Secretary back from her re-education camp of a few weeks ago. She says, “What did you say?” I am about to tell her and the rest of the House what I said—just a little patience.
The issue of justice was indeed raised by one of the young people, which is exactly why I set up the public inquiry within days after the fire. That inquiry has two phases. It will soon be entering its second phase, and we have appointed panel members to sit alongside the judge in that phase. The aim is to find out exactly what went wrong, who was responsible and who was accountable, and to enable that justice for the people of Grenfell.
The right hon. Gentleman mentioned cladding. We asked building owners in the private sector to take the action that we believed necessary, but they have not been acting quickly enough. That is why we will fully fund the replacement of cladding on high-rise residential buildings, and interim measures are in place where necessary on all 163 high-rise private residential buildings with unsafe aluminium composite material cladding.
Obviously, the inquiry must go on and we await its response to what actually happened at Grenfell, but the answer that the Prime Minister gave is of no comfort to the 60,000 people living in high-rise tower blocks across the country. They are worried—their communities are worried.
Although Government funding is, of course, necessary and welcome, but not yet available, more than 70 block owners still have no plan in place to get the work done. Will the Prime Minister set a deadline of the end of this year for all dangerous cladding to be removed and replaced? Will she toughen up the powers for councils to levy big fines and, where necessary, to confiscate blocks to get this vital safety work done if the block owners simply fail to do it?
As the right hon. Gentleman knows, all affected buildings identified in the social sector have been visited by the fire and rescue services, which have carried out checks and made sure that interim safety measures are in place. Remediation work has started or finished on over three quarters of those buildings. We are fully funding the removal and replacement of unsafe ACM cladding systems on high-rise social housing.
The right hon. Gentleman refers to housing in the private sector. We asked building owners to take the action necessary, and we expected building owners to take the action necessary. They have not done enough; they have not acted quickly enough. That is why the Government have stepped in and said that we will fully fund the replacement of cladding on high-rise residential buildings. As I said, interim measures are in place until that work is done.
The question was: will the Prime Minister ensure that this is done by the end of this year? At the current rate of progress, it will take three years for even the social housing blocks to be done.
But the issue goes wider: 1,700 other buildings, including hospitals, care homes, schools and hotels, are clad in other potentially combustible materials. If landlords will not act, will the Government step in and act on those buildings as well? The 2013 coroner’s report on the deadly Lakanal House fire recommended that sprinklers should be retrofitted to all social housing. Currently, only 32 of 837 council tower blocks of above 30 metres have sprinklers. Two years after Grenfell and six years after that coroner’s report, will the Prime Minister now accept that recommendation and set a deadline for all high-rise blocks to have sprinklers retrofitted?
First of all, the right hon. Gentleman raises the issue of other cladding. The work is indeed being done to investigate the safety of other cladding. He then talks about the coroner’s report and recommendation in 2013. I think he has inadvertently said something that does not quite reflect what the coroner’s report said. It said that landlords should consider retrofitting sprinklers; it did not say that every building should be retrofitted with sprinklers. As he will know, there are many landlords up and down the country, including Labour councils, that have chosen not to fit sprinklers.
The coroner’s report made it very clear that she thought that sprinklers would make blocks safer; I do not think we should be playing around with semantics—we should be making sure that all the blocks are safe across the whole country. Only 105 of the 673 new- build schools have sprinklers. Labour would make sure that all new schools had sprinklers fitted.
Grenfell survivors say, “We were victims before the fire.” Radical change is needed in our system of social housing. Tenants raised concerns about safety; they were ignored. Two years on from Grenfell, when will we see Government legislation to strengthen tenants’ rights and apply the Freedom of Information Act to all housing associations as well as local authorities?
It is absolutely right that one of the truly shocking aspects of what happened at Grenfell Tower is that, before the fire happened and over a significant period of time, residents of the tower were raising concerns with the tenant management organisation and the council, and their voice was not heard. That is why one of the other things that I did after the Grenfell Tower fire was to initiate work looking at social housing.
The then Housing Minister—and this has been taken on by subsequent Housing Ministers—went around the country meeting people in social housing to see whether that had happened simply at Grenfell or was happening across the country, and to see how we could strengthen the voice of people living in social housing. I believe that should be done, and it is the work that we have been putting in place. It is absolutely right that the voices of those people should have been heard and acted on. We want to ensure in future that social housing tenants’ voices will be heard.
That is all well and good, but just how long does it take to amend the Freedom of Information Act to make sure it applies to social housing run by housing associations as well as local authorities?
The Government spent £1,013 million on fire services in 2016-17. This year, the figure is £858 million— £155 million cut from fire services. Every fire authority across the country, from the 11% cut in Greater Manchester to the 42% cut in Warwickshire, is going through the same experience. We cannot put a price on people’s lives. We cannot keep people safe on the cheap. The Prime Minister told the country at the Conservative party conference last autumn that austerity is over. Will she now pledge that her Government will increase fire service funding and firefighter numbers next year?
Indeed, we are able to end austerity, and we are able to put more money into public services. We are able to do that because a Conservative Government take a balanced approach to the economy. We have been putting right the wrongs of a Labour Government who left us with the largest deficit in our peacetime history. That is the legacy of Labour. We saw fewer people in work and less money to spend on public services, and we will not let it happen again.
The legacy of this Tory Government is 10,000 firefighter jobs cut since 2010 and 40 fire stations closed, including 10 in London under the previous Mayor.
The Prime Minister claimed that action on Grenfell would be part of her legacy, but in two long years, too little has changed. She has met the Grenfell survivors, as have I. Their pain is real and palpable, and it continues. A big test for the next Prime Minister will be to make good the failings of this Government over the past two years—a failure to rehouse all the survivors, a failure to give justice to the Grenfell community, a failure to make safe other dangerous high-rise blocks, a failure to retrofit sprinklers and a failure to end austerity in the fire service. Does the Prime Minister believe that by the third anniversary next year, the Government will be able to honestly say with conviction to the country and to the Grenfell survivors, “Never again”?
The right hon. Gentleman refers to the rehousing of the Grenfell survivors. All 201 households have been offered temporary or permanent accommodation —[Interruption.] I think that 194 of those households have accepted that, and 184 have been able to move into their accommodation.
The right hon. Gentleman talks about what the Government have been doing in response to the Grenfell Tower fire. We set up immediately a public inquiry. We set up immediately the Dame Judith Hackitt review, which looked at the issues around building regulations and fire safety. The Government are acting on the results of that, and I expect a future Government to act on the results of the public inquiry.
I have met on a number of occasions, including yesterday, people who survived the Grenfell Tower fire—people who lost their homes, people who lost members of their family and young people who lost their best friends. Their pain is indeed great; it will never go away. It is important for us to ensure that we provide support for those survivors into the future. It is not just about buildings and cladding; it is about support for the local community; and it is about mental health services and support for those who have been affected. This Government are committed to ensuring that we provide that support and that we do everything we can to make sure that a tragedy like Grenfell Tower can never happen again.
First, I think we should all recognise Thank a Teacher Day. I am sure everybody across this House remembers a particular teacher who had an impact on them, and indeed helped them to do what was necessary to become a Member of Parliament and to represent a local community in this House.
My hon. Friend makes a point about coastal communities. He will know that school funding is at a record level, and our reforms have been improving education standards. I want to ensure that schools have the resources they need and that reform continues to improve those standards; that we are able to give schools the budgets on a timetable to work for them; and—he mentioned the issue of fairer funding—that we continue to make progress on the fairer national funding formula. I think what my hon. Friend has done in referencing a coastal schools fund is actually a bid into the spending review that will be coming later in the year.
May I associate myself with the Prime Minister’s remarks on the atrocity at the Finsbury Park mosque?
This is also World Refugee Week, and I want to commend my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil), who brought forward a family reunion Bill some time ago. Will the Prime Minister, in the time that she has got left, please make sure that this comes forward to Committee?
Does the Prime Minister agree with the front runner set to succeed her that the Scottish people are a “verminous” race that should be placed in ghettos and exterminated?
The Conservative and Unionist party not only takes the people of every part of this United Kingdom seriously, but we welcome the contribution from people of every part of this United Kingdom, because that is what makes the United Kingdom the great country it is—and long may Scotland remain part of it.
Well, of course, words matter and actions matter. The Prime Minister thought that the man who published those words in his magazine was fit for the office of our top diplomat, and he has not stopped there. He has said that Scots should be banned from being Prime Minister—banned from being Prime Minister, Mr Speaker—and that £1 spent in Croydon was worth more than £1 spend in Strathclyde. This is a man who is not fit for office. It has been said, “The ultimate measure of a person is not where they stand in moments of comfort, but where they stand at times of challenge and controversy.” This is a time of challenge, so does the Prime Minister realise that not only is the Member racist, but he is stoking division in communities and has a record of dishonesty? Does the Prime Minister honestly believe—[Interruption.]
Order. If the right hon. Gentleman is referring to a current Member of this House—I do not know whether he is—[Hon. Members: “He is.”] If he is, he should be extremely careful in the language he uses, and he should have notified the Member in advance, but I would urge him to weigh his words. [Hon. Members: “Withdraw!”] Indeed, I think it would be much better if, for now, he would withdraw any allegation of racism against any particular Member. I do not think that this is the forum, and I do not think it is the right way to behave.
Mr Speaker, I have informed the Member. He has called Muslim women “letter boxes”, described African people as having “watermelon smiles” and another disgusting slur that I would never dignify by repeating. If that is not racist, I do not know what is. Does the Prime Minister honestly believe that this man is fit for the office of Prime Minister?
The right hon. Gentleman has been leader of the SNP in this Chamber and has asked Prime Minister’s questions for some time, so he might understand that the purpose is to ask the Prime Minister about the actions of the Government. That is what he should be asking us about. I believe that any future Conservative Prime Minister will be better for Scotland than the Scottish nationalist party.
My hon. Friend has raised an important issue. I am very pleased to see the announcement today by Jersey, Guernsey and the Isle of Man. We continue to work with overseas territories to ensure that they follow those standards and open their books so that people can see who actually owns companies.
The hon. Lady is absolutely right that we looked at the whole issue of medical cannabis. That is why we changed the approach that was taken. Obviously, individual cases are desperately difficult, and I think that everybody across the House feels with the families and friends of those who are affected. We have ensured that the law has changed and that specialist doctors can prescribe cannabis-based products for medicinal use, where there is clinical evidence of benefit. I think that was the right thing to do. My right hon. Friend the Secretary of State for Health and Social Care has heard the testimony of families about the barriers they appear to have faced and has asked NHS England to undertake a rapid re-evaluation and to address any system barriers to clinically approving the prescribing.
My hon. Friend raises an important issue. It is vital that all children with special educational needs receive the support they need. I have been assured that the council will receive the right support. The Department for Education and NHS England have been working closely with the local authority to ensure that the necessary changes take place, and they will continue to do so. My hon. Friend talks about funding. This year, Sutton’s high needs funding allocation has been increased. I understand that Ofsted and the Care Quality Commission will revisit Sutton to ensure that the council is improving its support for children with special educational needs, so that those children can fulfil their potential.
The hon. Lady has campaigned long and hard on this issue and championed the needs of all those who were affected. The victims and families have suffered so much, and it is obviously important that they get the answers and the justice that they deserve. They have been waiting decades for that. In April, as she will know, the Department of Health and Social Care announced a major uplift in the financial support available to beneficiaries of the infected blood support scheme in England. Discussions are now under way between officials in the UK, Scottish, Welsh and Northern Ireland Administrations to look, as a matter of urgency, at how we can provide greater parity of support across the UK.
The Conservative party has frequently won the trust of the public over recent generations because of its reputation for economic competence and responsibility. Those qualities have helped to contribute to the Prime Minister’s legacy. She will leave behind a recovery from economic crisis to full employment and economic growth. Does she therefore agree that in the present uncertainty surrounding Brexit and the change of government, it would be extremely unwise for candidates in the leadership election, or the outgoing Government, to start making reckless commitments on tax cuts and promises on spending, which should properly be addressed responsibly in a spending round once those uncertainties are behind us?
First, I commend my right hon. and learned Friend for the work he did in a previous Conservative Administration as Chancellor of the Exchequer. He left a golden economic legacy, which was then completely squandered by 13 years of a Labour Government, and as he says, Conservatives have had to turn that around. I am pleased that we see employment at record levels; I am pleased that we see the deficit down; and I am pleased that we see debt falling. We are able to ensure that we can put more money into public services. We have already committed the biggest ever cash boost for the national health service in its history. I can assure him that in my time as Prime Minister we will not make any reckless commitments, but we do want to ensure that we see our public services supported, as they should be, to provide the services we believe the people of this country deserve.
Immigration has been good for this country, but people want to know that the Government can make decisions about who should come to the country, that there is control over the number of people coming to the country, and that the Government take action against those who are here illegally. That has been the purpose of the policy pursued since 2010, giving people confidence in our immigration system so we can ensure that people continue to welcome immigrants, who make such an important contribution to our life, into this country.
As we build the homes we need across the country, it is essential that we equip young people with the correct practical skills to drive forward our economy. The 45th WorldSkills competition takes place in Russia in August. My constituent, 21-year-old Lewis Greenwood, will be representing the UK in the bricklaying competition. Will the Prime Minister wish Lewis and the rest of Team UK the best of British in the skills olympics?
My hon. Friend is absolutely right to reference the fact that we need those skills for our economy and our society in the future. I am very happy to congratulate Lewis on being the UK representative for bricklaying in the WorldSkills competition in Russia. I wish him all the very best and I am sure the whole House will wish him all the very best as he carries the UK standard with him.
First, we mark Windrush Day on 22 June; that day has been set up to recognise the contribution that the Windrush generation made to our life, our society and our economy here in the UK. What lay behind the issue in relation to the problems that some members of the Windrush generation have faced was the fact that when they came into the UK, they were not given documentary evidence of their immigration status, and, as their countries gained independence, they were not given that documentary evidence of their status—[Interruption.] It is no good shouting “Rubbish”. That is what lay behind it, and there were cases of people in the Windrush generation—[Interruption.]
Thank you, Mr Speaker.
That is what lay at the heart of the issue in relation to the Windrush generation. It is the case that people in the Windrush generation faced these difficulties as a result of not having that documentary evidence both under Labour Governments in the past and, more recently, under this Government. The Home Office is working to put that right. People who are concerned about this should contact the Home Office taskforce and they will get the help and support that they need.
Last week, we learned that a 13-year-old boy who brought his rapist to court received £20 in compensation. A 13-year-old girl and a 15-year-old girl received £50 for being abused as children. Does the Prime Minister agree that this is a terrible way to treat the victims of child sexual abuse, that they deserve to be treated fairly and compassionately, and that it sends out all the wrong signals to anybody who is thinking of bringing their perpetrator to justice? Does she agree that it takes huge courage to bring a case such as that, and will she urgently look at a review of criminal compensation orders, so that victims of child sexual abuse get the justice that they deserve?
I absolutely agree with my hon. Friend that it takes huge courage to come forward to talk about incidents of child sexual abuse—and not just to talk about that, but to be able to go through that such that the perpetrator of that abuse can be brought to justice. I commend those he has spoken about specifically and all those who come forward to do that. I hope that from the action that this Government have taken, through setting up the independent inquiry into child sexual abuse, we make it very clear that we want these wrongs to be righted. We want people to be able to feel that they can find justice. The memory will never go. The memory will live with them, but we can at least give them justice and I urge everybody to come forward, if they have been subject to child sexual abuse, such that justice can be brought.
Police officers and firefighters are able to retire at 60, but prison officers cannot retire until they are 66 and they are facing the prospect of having to retire at 68. Does my right hon. Friend believe that that is fair?
We have made about £1 billion extra available to police forces this year, and that includes an increase in funding for Cleveland police. How the money is spent is a matter for the police and crime commissioners and the chief constable. We have made funds available, and we have ensured that we are giving the police the powers that they need. Sadly, the Labour party in opposition voted against that extra funding for the police.
Losing a child is every parent’s worst nightmare, but every day parents up and down the country are caring for children with life-limiting illnesses. For those families the children’s hospice and palliative care services are a necessary lifeline, but some of our hospice services are struggling for cash, and Acorns, our largest service, has had to announce the closure of one of its hospices.
Prime Minister, you came to power saying that you would help people who were just about managing, but many of those families are barely coping at all. Please, as your legacy, will you give the £40 million that is needed to provide really good palliative care for all the children in the country who need it?
I recognise the important role played by hospices generally, but by children’s hospices in particular. I have been pleased to be involved in the establishment of the Alexander Devine hospice in my constituency, which was set up after a family tragically lost their son Alexander.
It is important for us to ensure that people have the support that they need as they see a child approaching the end of their life. We have made children’s palliative and end-of-life care a priority in the NHS long-term plan, and over the next five years the NHS will be match funding clinical commissioning groups that commit themselves to increasing investment in local children’s palliative and end-of-life care services by up to £7 million. That will increase the support to a total of £25 million a year by 2023-24. Those children and their families deserve the very best care, and I commend all who are working in the hospice movement, because they provide wonderful end-of-life care for children and adults.
No one wants to see someone feeling the need to go to a food bank, but what universal credit does is ensure that people are helped into work, and that work pays. As they earn more, they are able to keep more of those earnings. Work is the best route out of poverty, and universal credit is working to ensure that people get into work and can provide for themselves and their families.
I know that the whole House will join the Prime Minister in thanking the emergency services and the armed services when they step up to the mark at times of national or local emergency such as the mosque outrage or the Novichok incident in Salisbury, near my constituency, but will she also do what she has done throughout her time as Prime Minister and pay tribute to a vast army of other people—the volunteers in our society who do so much for us? I am thinking particularly of the Royal British Legion, the Royal National Lifeboat Institution, the Red Cross, and, especially on this important day in its life, the Order of St John and St John Ambulance. Those are truly the big society.
My hon. Friend is absolutely right. So much of what happens in our country—so much that is good in our country—does indeed depend on volunteers up and down the country, including those in the organisations that my hon. Friend has mentioned, and those in other community groups and charities too. We should celebrate the work that volunteers do, we should commend them for their work, and, above all, we should say a wholehearted thank you.
The hon. Lady raises an important point about the impact adverse childhood experiences can have on people in later life. It is one of the reasons why we are putting so much support and emphasis on the mental health of young people to help them as they go through their life. I was not aware of this survey; I am happy to look at it, and I am sure all Members of the House will look at it and recognise the importance of this information that increases the knowledge of such adverse childhood experiences and helps to deal with these issues.
My right hon. Friend will be aware that there are already almost 400,000 people employed in the low carbon sector and its supply chains across the country, but can she assure me that more jobs will be created in this industry through our modern industrial strategy, including through the utilisation of carbon capture and storage, which will be critical to our meeting our net zero targets?
I can absolutely give my hon. Friend the assurance that as we look to meet our climate change target we will indeed see more jobs being created in this sector, and I was very pleased when I made the announcement about the net zero emissions target to visit Imperial College here in London, which is doing important research and training work on CCS that will be of benefit across this country and the world.
I am aware of the report from the Environmental Audit Committee on this issue. Much of what the Committee wants to achieve is actually already covered by Government policy, and there are a number of areas I could mention—for example, making producers responsible for the full cost of managing and disposing of their products when they are no longer useful, and last week the Government opened a multi-million pound grant scheme to help boost the recycling of textiles and plastic packaging. We have already responded to many of the issues raised by that report.
Unlike local councils, NHS bodies are not legally required to balance their budget on an annual basis. Cambridgeshire and Peterborough sustainability and transformation partnership is facing a deficit of £192 million and other STPs could be raided to bail it out. What would my right hon. Friend say to my constituents—including those in places like Jaywick, an area of deprivation that has extensive health inequalities—when they ask why their services should suffer to meet the deficits of others?
Of course we want to ensure that all health trusts and health services are operating properly within their budgets and are able to balance their books. What I would say to my hon. Friend’s constituents is that I am pleased that this Government have been able to increase the funding available to the national health service, and that will go towards increasing and improving the services his constituents are able to receive.
Later today in Westminster Hall Members will have an opportunity to debate the independent review of the Modern Slavery Act 2015. Thanks to the leadership of my right hon. Friend this landmark legislation has empowered both victims and the police to seek justice, with 239 suspects charged and 185 people convicted of modern slavery offences in 2017-18. What further measures does my right hon. Friend believe will help to strengthen this Act?
I am pleased that my hon. Friend has raised this issue, because it remains an important topic. We have seen not only the first convictions under the Act but thousands of businesses publishing transparency statements and senior business leaders being much more engaged on the issue than ever before. She asks what more we will be doing. We will shortly be publishing a consultation to look at ways to strengthen transparency in the supply chains, and we are expanding transparency laws to cover the public sector and its purchasing power. This is important as the public sector has huge purchasing power, and this could be used to good cause to ensure that we are ending modern slavery.
The Prime Minister is keen to secure a legacy of acting in the country’s very best interests, so will she commit to introducing legislation that will guarantee that this House sits in September and October so that, in the event of a no-deal Brexit, all options are available to this Parliament, including revoking article 50?
The national funding formula for schools is great for underfunded constituencies such as mine, where funding is going up twice as fast as the national average, but village schools and other small schools are still under financial pressure and their numbers have declined over recent decades. Will my right hon. Friend encourage the Department for Education to look again at how we can make the national funding formula do more to help village schools, which are so important to our rural life?
I absolutely accept and recognise the important role that village schools play in our rural life. A lot of work went into the national funding formula, and it is right that we are introducing this fairer means of funding. We have yet to reach the end point of the national funding formula, but I want to see us progressing and ensuring that we are putting that national funding formula in place. I am sure that the Secretary of State for Education will have heard the request that my hon. Friend has made.
I am heartbroken, and Tooting is heartbroken. On Friday night, the streets claimed another victim. Cheyon Evans might be just another awkward statistic to this Government, but to us he was a son, a brother and a friend taken too soon. This senseless violence could have been avoided with adequate policing and good youth provision to give our young people a sense of hope. My question to the Prime Minister is simple. Will she use her remaining days in office to leave a legacy that will change the paths for those young people, or can we expect yet more of the same?
None of us ever wants to see a life, particularly a young life, taken before its time by violent crime. These are not difficult statistics; they are people who had a future ahead of them and who have sadly died as a result of the violence of criminal perpetrators. We have introduced our serious violence strategy, and we are working with the police and other organisations to ensure that young people are turned away from the use of violence and the use of knives. The hon. Lady says that this is a question of funding and police numbers, but actually it is a much wider issue—[Interruption.] Anybody who denies that this is a wider issue for our society is simply failing to understand the issue that we have to address, and if she wants to talk to somebody about the police on the streets of London, I suggest she talks to the Mayor of London.
Bearing the sub judice rule firmly in mind, what does the Prime Minister think of the principle of bringing a dying, decorated former soldier before the courts of Northern Ireland on charges based on no new evidence that are unlikely ever to lead to a conviction?
I know this is an issue that my right hon. Friend and a number of other right hon. and hon. Friends have raised in terms of individual cases and the general principle. None of us wants to see elderly veterans being brought before the courts in the way that he has described, but we need to ensure that we have processes and systems in Northern Ireland that ensure that proper investigation is taking place. I understand that my colleagues feel that the state has let down people like the veteran that he cited, but the fact is that previous investigations have not been found to be lawful. That is why we are having to look at the process of investigation. I have said many times standing at this Dispatch Box that I want to ensure that we see the terrorists who cause the vast majority of deaths in Northern Ireland being properly brought to justice. That is what we are working on, and we will continue to work on a system that is fair.
When the Prime Minister took office, she suggested that her mission would be to tackle “burning injustices”, yet this morning a report from the Institute for Fiscal Studies commissioned by the Joseph Rowntree Foundation shows that, under the Cabinets in which she has served over the past nine years, in-work poverty has risen dramatically. Will that not be the legacy of her premiership?
The hon. Gentleman raises the IFS report, but in fact that report shows that people are better off when they move into work. It shows that under this Government, more people are in work than ever before, that material deprivation rates have fallen by a fifth since 2010, and that the reason for the relative poverty figures is that pensioners are better off. He might think that cutting pensioners’ incomes is the answer, but actually I do not.
Point of Order
On a point of order, Mr Speaker. Since you took the Chair, you have been a stalwart defender of Back Benchers. You have also stood up to bad parliamentary behaviour like the use of the word “racism”. I am deeply upset that your chairmanship has been undermined dramatically because of the very calm and polite advice you gave to hon. Members—leaders of political parties—that was ignored. Please will you do all you can to ensure that words such as “racist” are not common parlance in this House?
I am grateful to the hon. Gentleman for his point of order. I am always appreciative of kind words and, in so far as he is proffering sympathy for me and expressing concern about my reputation, I am deeply obliged to him, but I am not a delicate flower and I do not feel any concern on that front. I am simply trying to do the right thing by the House. There was originally, as colleagues of long service will know, a list of unparliamentary words, but that list was discontinued, not least on account of its potentially infinite scope. It was therefore discontinued. The word in question is not of itself unparliamentary. The issue is to judge context and to make an assessment of what is seemly in the Chamber, and I made my own assessment and advised the House and the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) accordingly. It was only when I heard the full flow of the words that I was able to make an assessment, and I think it would be wise for colleagues to bear in mind the general principle that one does not impute dishonour to another Member. That is the first point.
The second point is that I know that there is a degree of latitude in respect of questions to the Prime Minister, but I think it would be appropriate, in the remaining weeks before the summer recess and before a new leader of the governing party takes office, to have some regard to that for which the Prime Minister is responsible. She is responsible for her own policies and for the conduct of her Government and their administration of their affairs, and it is important that questions should be put with that overarching consideration and ambit of responsibility in mind. However, I have said what I have said, and the hon. Gentleman has made his point in his question. I have no wish to prolong the argument, and knowing what a naturally good-natured fellow he is, I feel sure that he has no such ambition either. We will leave it there for now.
Breathing Space Scheme
With permission, I will make a statement on supporting people in problem debt. This is an issue close to my heart. As a former member of the all-party parliamentary group on hunger and food poverty, I have seen at first hand the hardship that problem debt can cause. Now that I am in a position to bring about change, I am focused on improving the lives of the most disadvantaged.
Problem debt places a heavy burden on households and can lead to family breakdown, stress and mental health issues. The Government have taken steps to prevent problem debt from occurring and to support those who have fallen into it. We have reformed the regulation of consumer credit and widened access to professional debt advice, and we are helping to build individual financial capability. Today, I can update the House on the Government’s plans to go further, with the introduction of a breathing space scheme and a statutory debt repayment plan. I am grateful for the support of the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), whose private Member’s Bill and ongoing work have made a key contribution to the scheme becoming Government policy.
For people who are just getting by, even a small income shock can provoke a cycle of debt dependence that can be difficult to escape. If then faced with invasive debt enforcement, it is no wonder that many people in problem debt simply disengage. The first step to countering problem debt is to ensure that consumer credit firms are properly regulated, because loans should not be made to people who cannot afford to repay them. The Government have empowered the Financial Conduct Authority to ensure that firms lend responsibly, protecting consumers from over-borrowing. At Budget 2018, we announced new measures to increase access to affordable credit by helping foster a larger, more vibrant social lending sector.
In parallel, we have put in place support to help people make good financial decisions. The new Money and Pensions Service brings together three existing publicly funded money and pensions guidance services into one new organisation, providing free support and guidance on all aspects of people’s financial lives. Importantly, it also has a statutory duty to develop and co-ordinate a national strategy to improve people’s financial capability. Despite those preventive measures, I recognise that many people still fall into problem debt. For such people, further support is required.
Seeking professional advice is a vital step in moving towards a sustainable debt solution. That is why we have increased public funding for free professional debt advice to almost £56 million this year, delivering 560,000 sessions in England, but more needs to be done. The Money and Pensions Service estimates there are up to 9 million over-indebted people in the UK, but only a fraction of them access free debt advice each year. That is why I can announce today that, following consultation, the Government will deliver on their manifesto commitment to introduce a breathing space scheme for people in problem debt.
The scheme has two parts which, together, will protect debtors from creditor action, help them get professional advice on their debt problems, and help them pay off their debts in a sustainable way. Breathing space will provide debtors with a 60-day period in which interest and charges on their debts are frozen and enforcement action from creditors is paused. Creditors must not start new court action, communications with debtors relating to enforcement of their debt must stop, and benefit reductions to reclaim debt will pause. During the time, debtors will have to seek professional debt advice to find a sustainable solution to their debt problem. These protections will encourage people in problem debt to seek advice earlier and give them the headspace to identify the right debt solution for them.
The statutory debt repayment plan is a new debt solution that will extend the breathing space protections to debtors who commit to fully repaying their debts in a manageable timeline. Importantly, the payment plans will be flexible to changes in debtors’ life circumstances to remain sustainable over the long term. If someone’s disposable income decreases, their payments will go down, and vice versa.
The breathing space scheme will make a real difference to the most vulnerable families across the country, and I recognise the sense of urgency across the House to deliver this policy quickly. I am committed to delivering the scheme swiftly, working closely with key stakeholders to make sure that it works in practice. The Government will lay regulations on the breathing space element of the policy before the end of the year, and we intend to implement it in early 2021. We will continue to develop the statutory debt repayment plan to a longer timetable.
In addition, I am pleased to announce that the Government will go beyond their manifesto commitment in two areas. As many of us hear in our constituencies, people’s experiences of problem debt are changing. As I have seen at first hand, it is wrong to assume that over-indebtedness is simply a product of taking out too much credit. Many people struggle to meet essential bills and can end up owing money to multiple creditors in the public and private sectors. For the policy to be successful, it must properly reflect the issues that debtors are dealing with. I can therefore announce today that the breathing space scheme will cover a broad range of debts—not just financial services debts, but arrears owed to utility companies and to central and local government, including council tax arrears, personal tax debts and benefit overpayments. That broad protection will make the policy effective for debtors and fair to creditors.
The House will recognise the strong links between mental health issues and problem debt. Up to 23,000 people in England each year struggle with problem debt while in hospital due to mental health issues. The breathing space scheme must work for everyone facing problem debt. In particular, it must be open to the most vulnerable in society. To that end, I can confirm that people receiving treatment for mental health crisis can enter breathing space without seeking advice from a debt adviser, which could be a significant barrier for many.
The protections will last the entirety of an individual’s crisis treatment, followed by a further 30 days to allow them to get back on their feet and decide whether they wish to enter the main breathing space scheme or work out another solution for their debts. As mental health issues often recur, there will be no limit to the number of times that an individual can enter via this mechanism. I thank the hon. Member for Liverpool, Riverside (Dame Louise Ellman), the right hon. Member for North Norfolk (Norman Lamb) and my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) for their dedicated work on this issue, and I thank the Money and Mental Health Policy Institute for raising this important issue.
Millions of people struggle with problem debt and the burdens that it brings. The Government have committed to helping people take control of their finances and get back on a stable financial footing. The breathing space scheme that I have described today will help to fulfil that commitment, and I commend this statement to the House.
I begin by thanking the Minister for his courtesy in giving me advance notice of this statement, which we broadly welcome. There has been a growing consensus for some time about the need for something less dramatic than formal insolvency proceedings which offers hope to people with problem debts that there can be a way out. That is what the breathing space scheme should be—a space to let people get back on their feet, perhaps overcoming a health issue, a period of unemployment or something else that has adversely affected their lives.
There will always be disagreement between the Opposition and the Government on the necessity of the austerity policies that have blighted the country since 2010, but no one can deny that household debt in the UK is large, growing, and problematic for many people. The big change that I have seen in my constituency is that people are using credit not just to buy a car, a new sofa or a washing machine, but to pay their living costs at the end of the month—for food, dinner money, and children’s clothes. The worst is when people, unable to take control of their own affairs, go from one short-term credit product to another, compounding the costs and liabilities they are incurring and sometimes ending up in hock to illegal moneylenders as the only option they have left. One of my constituents in such circumstances ended up suicidal.
We want this policy to work, and my questions for the Minister are in that spirit. First, can he say why a 60-day period has been chosen as optimal? Going back to the need to let people overcome whatever problems they face, I have always felt that the period may need to be longer.
Secondly, will the Minister confirm my understanding that all debts will be covered, including public sector debts like council tax arrears and benefit overpayments? I very much recognise the obliteration of local government finances over the past nine years and, alongside colleagues, I presented a petition to Downing Street this morning on how bad it has been for councils like mine in Tameside. Council tax arrears are one of the biggest causes of the bailiffs being called, and we need such arrears to be included, too.
In addition, will the Minister look specifically at the issue of guarantor loans? Under such loans another person, typically a family member, accepts joint liability for the debt. I had another case of this type from a constituent in Stalybridge just this week. If the breathing space period does not apply to these loans, the burden will simply pass and offer no relief, which would be counterproductive.
Ultimately, this policy will work only if there are sufficient sources of advice and support for people to access during the breathing space period. It is a reality that such services—citizens advice bureaux, local authority and housing association advice centres, and so on—have been put under massive strain over the past few years. So what strategy do the Government have to significantly improve the capacity in this area? Whatever initiatives have been pursued to date, and whatever merit they have, there is no doubt that we need to go further.
Finally, in the famous words of Archbishop Desmond Tutu:
“There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in.”
As well as a change of economic policy, we believe it is time to regulate further the interest that can be charged on overdrafts and credit cards, to look at the marketing of credit to vulnerable people, and to ensure there is real and effective financial education in schools.
There is a lot to do. This statement is a move in the right direction, but let us make sure we keep going in that direction.
I thank the hon. Gentleman for his typically positive and constructive remarks, and I will try to address the five key points he raises.
First, the 60-day time period is longer than our manifesto commitment of six weeks and is the product of listening to the consultation responses and to the experience of the mechanism in Scotland. Overall, it is seen as the right solution.
Secondly, the hon. Gentleman asked which debts are included. I tried to set out in my statement that the scheme is extremely broad, covering public sector debts and arrears. He asked about bailiffs and their role. Of course, the Ministry of Justice completed a consultation exercise in February and will respond in due course. There is also Cabinet Office guidance on the fairness of debt collection. He makes a reasonable point.
Thirdly, the hon. Gentleman asked about guarantor loans, which are an emerging new category of high-cost credit. Such matters are regulated by the Financial Conduct Authority, and I had a conversation just this morning with its chairman. I spoke to Andrew Bailey, its chief executive, earlier this week on the need to be vigilant across all emerging forms of high-cost credit, which is under ongoing review.
Fourthly, the hon. Gentleman asked about capacity and capability in the area of debt advice. I envisage that the creation of the Money and Pensions Service as a new single entity will bring much better co-ordination of the available advice. As I mentioned, the Government spent £56 million last year, and 85,000 more people were seen than in the previous year. We are looking at how that advice can become consistently of a higher standard.
Finally, the hon. Gentleman asked about the long-term causes and the regulation and marketing of high-cost credit products. Following the recent issues at London Capital & Finance, I directed the FCA to examine what happened, and I have asked my officials in the Treasury to conduct a separate review of how regulation works. We have to continue being vigilant on this evolving space, and the increased digitalisation of the availability of high-cost credit means that the regulation and oversight needs to keep pace.
I hope that answers the hon. Gentleman’s questions.
I welcome this statement and the Government going beyond their original manifesto commitment. It gives me a chance to thank my citizens advice bureau, which has done fantastic work on debt rescheduling during my 22 years as an MP.
Does the Minister welcome the Church of England’s initiative to teach financial literacy in its primary schools, and would he encourage rolling out such an approach to prevention more widely?
I welcome my right hon. Friend’s observations on the Church of England’s interventions on financial literacy. The ongoing challenge is to develop national consistency in the delivery of financial education and advice. A number of initiatives are under way, one of which is trying to get financial services providers, particularly the banks, to work in a more co-ordinated way. I am happy to endorse the work of the Church of England, which has been a significant partner in improving financial literacy across the country.
I am pleased that the UK Government have decided to put this in place and have set out the mechanism for doing so. In Scotland we have the debt arrangement scheme, which was launched in 2004 and significantly reformed in 2011, and a breathing space is built into that scheme.
Over £200 million of debt has been repaid since the reforms in Scotland, and 6,000 people completed a direct payment plan between 2011 and 2018, so I am pleased to see in the consultation responses published today that the Government have looked at how the system works in Scotland and have learned lessons. It is clear that, where the Scottish system has the powers to do so, we have the ability to trailblaze and lead the way.
In 2016, because of the debt arrangement scheme in Scotland, we had the lowest proportion of over-indebted people of any part of the UK. As austerity continues, we continue to see increases in the number of people suffering under the burden of debt. In 2017 there were 2.4 million children living in families with problem debt in England and Wales. StepChange, the debt charity, has said that 60% of those in problem debt fell into it because of an unexpected life event, and not because of poor money management—something external happened that changed their life, meaning they could no longer manage their debt.
I am concerned about why it will take the Government so long to implement the changes. Surely, as they already deal with a similar system in Scotland, most creditors should be able to take on the changes fairly quickly and roll them out over a wider group of people. Could this be done any quicker than 2021, which is the date I have seen in the papers?
I thank the hon. Lady for her observations, and she is right that the Government have carefully listened to and observed the experience in Scotland. She asks about the timeline, and I have done everything I can to move this forward as quickly as possible. The challenge is to bring the sector along at the same pace and to ensure that we have complete commitment and sign-up to the process so that it will be a success. I am pleased that the chief executive officer of StepChange has said that he is particularly pleased to see the Government’s confirmation that debts owed to the Government will be included in the scheme. We are working very carefully, and this is the timeline to which we have to work.
I thank the Minister for the proposals, which will help some of the most vulnerable and their families and, I believe, save lives. Will he clarify which stakeholders he will engage with to ensure effective implementation, and will they include debt advice charities such as Christians Against Poverty, which does such excellent work in this field?
My hon. Friend is right to draw attention to the excellent work of Christians Against Poverty, which is indeed a key stakeholder. We engage widely with the sector, including the Money and Mental Health Policy Institute, StepChange, the Money Advice Trust and the charity National Debtline—it really is a collaborative effort—and I am pleased with their response to where we have got to.
Debt ruins lives. Debt harms health. Debt damages relationship. Debt holds back children. In extreme circumstances, debt kills. When the Financial Guidance and Claims Act 2018—it established the Money and Pensions Service—was being taken through the House, the Government made a commitment to move on a breathing space scheme. Today’s announcement is therefore welcome, particularly the action being taken to defend the interests of those suffering mental ill health. In welcoming today’s announcement, I urge the Government to ensure that the new arrangements are properly resourced and that there is a sense of urgency in their implementation, because the sooner they are put in place, relieving that terrible burden that afflicts so many people in our country, the better.
I am extremely grateful to the hon. Gentleman for his comments. He played a significant role in the passage of the legislation that led to today’s announcement. He urges me once again on the timeframe, and I can assure him that my Treasury officials are working as rapidly as possible, but we must also ensure that it actually works. One of the questions he asked me previously, about what is included in the scheme and the range of public sector debts, has been a significant driver in those conversations. I acknowledge and take on board his comments.
I absolutely welcome the breathing space scheme, which will help people facing debts that they cannot repay. I join other Members in thanking citizens advice bureaux and organisations such as the Trussell Trust that help to signpost people to better debt advice. It has told me that young people, in particular, can get enormously concerned about their mobile phones being cut off, because if they lose their phones they lose their communications and any hope of finding work, for example. Will the Minister confirm that this will cover a wide range of debts and mean that people need not worry about losing their homes or their communications while their debts are sorted out?
I am extremely grateful to my hon. Friend for those observations and for mentioning the Trussell Trust, which is headquartered in my constituency and has done a lot of work in this area. The principles underpinning the scheme are based on the Insolvency Service’s system and include all debts covered by the system. There are a small number of exceptions—for example, deductions for child maintenance payments—but we have designed this so that it is meaningful. It is not about a holiday from ongoing payments; it is about dealing with arrears and debt. The expectation is that when people join the scheme they will continue to pay for everyday expenses as they occur.
Is the Minister aware of Debt Hacker, a free online tool that I launched here in the House of Commons? It is run by activists and uses FCA rules that are poorly understood by the general public to help consumers to get back their £50—or however much it is—from companies that use extortion to get money out of others. Is he also aware, given his broader role in the Treasury, of the fact that it is mainly NHS and public sector workers who are in this debt trap, because wages have not kept up with housing, energy and other costs?
The hon. Lady raises two points. I was not familiar with the Debt Hacker app, but I will seek it out because it sounds like a very worthwhile initiative. I respectfully say to her that in the fourth quarter of 2018 debt as a percentage of household income was 139%, whereas 10 years previously it was 160%. I recognise that households are experiencing strain, but it is not quite as dire as she makes out.
Loan sharks are the unacceptable face of capitalism, but this is a complex area and the Government should proceed with caution. Confidence in the market, and in capitalism more generally, depends crucially on the payment of debt. I very much hope that the Government will consult widely with the industry, particularly with credit card companies, and consider piloting, because there are unintended consequences of Governments, in their dying days, trying to virtue-signal and regulate more but actually doing more damage than good. Therefore, please may we have piloting and widespread consultation?
I am grateful to my right hon. Friend for his observations. This is not virtue-signalling; it is delivering on a manifesto commitment with the sectors involved, carefully and methodically. We rightly have a robust regulator with powers to deal with exploitative credit providers. As I indicated earlier, we are not complacent. I observe his concerns about ensuring that we implement this appropriately and with the wide assent of the industry.
I welcome the breathing space scheme, which will certainly be helpful in Blaenau Gwent, because we discovered that Wonga lent £1 million a year to our borough’s residents. I suspect that a 60-day period will not be enough. The fact is that although citizens advice bureaux are great, we have insufficient guidance and support in our borough. I think that 90 days might be necessary, or perhaps even more, so I ask the Minister to think carefully about that possibility.
We certainly keep all matters under review, but the 60-day period has not come from nowhere; it has come from deep engagement with the sector. As Joanna Elson, the chief executive of the Money Advice Trust, has said,
“this new scheme could well be a game-changer in our efforts to tackle problem debt as a society.”
I recognise that there are a range of views, but we have looked at what is out there and considered the Scottish experience, and we believe that this is the right policy response.
Order. Unless I am much mistaken, the hon. Member for Harborough (Neil O'Brien) is in danger of being rather a naughty man. I am advised that he beetled into the Chamber halfway through the response from the Opposition Front-Bench spokesman—[Interruption.] I was advised that he came through the double doors. I do not know whether he toddled out for some reason and then came back. If he is telling me —[Interruption.] The hon. Member for Bexhill and Battle (Huw Merriman) is chuntering from a sedentary position, and gesticulating as well, and in a manner not altogether helpful at this juncture to the Chair. If the hon. Member for Harborough says to me explicitly that he was here at the very start of the statement, I am happy to indulge him. Otherwise, I would say that he should count his lucky stars, because after all he did get in at Prime Minister’s questions, so he has had a jolly good day.
Financial difficulties are considered an adverse childhood experience. Facing problem debt in the family as a child can perpetuate cycles of poor mental health, low achievement, poor employment opportunities, prison, drug addiction and so on. I am very pleased that the hon. Member for Lewisham, Deptford (Vicky Foxcroft) earlier drew attention to ACEs. Will the Minister assure me that the breathing space scheme will include advisers being trained in adverse childhood experiences and trauma, so that the problems of financial hardships are not perpetuated into the next generation?
The hon. Lady makes a very reasonable point about the nature of the training for debt advisers. I cannot give her a specific commitment on that, because there are so many partners involved, but I will look into it and see what can be done to advance that very reasonable observation about the quality of advice given.
I welcome the proposals, although it has taken us since 2017 to get to this point and it is going to take another two years to get the first part operational. I am glad the Minister is moving swiftly and not dragging his feet.
Two problems for people who get into debt, particularly over tax credits or benefit clawback, are the interest charges that are applied as they try to repay and the management fees charged on top by debt-recovery agencies, which mean that the debt increasingly expands. The Minister could have a direct input on both those things; why does he not put a ceiling on those charges, rather than simply using a freeze?
The hon. Gentleman makes an interesting point, but that is not an area for which I have direct responsibility. Reclaimed overpayments—for example, from universal credit—will be included in the scheme. I cannot comment on things that are outside my control, but I hear his point about doing this as quickly as possible.
The announcement of the scheme is brilliant news and I welcome the statement enormously, and particularly the parts on the inclusion of Government debt in the scheme. I also welcome the fact that the Government have recognised the effect that debt has on people’s lives and their ability to get out of debt. However, I urge the Minister to look into the Government’s own policies—I suspect he knows what I am coming to. The five-week universal credit wait is a big issue. Advance payments are not the solution because they themselves are a debt and are putting vulnerable people further into debt. As I have said many times, the advance payment for the most vulnerable should be a grant, not a loan. As it is, we are handing out advance payments to around 60% of claimants. We are handing out the money anyway, so it is not going to cost us anything. It is just a cash-flow situation.
The Work and Pensions Committee has recently heard moving and horrendous testimonies from women who have been forced into sex work because they cannot make ends meet. We heard stories of women going into a brothel for around three days, working 20 hours out of 24 and coming out with £150 of earnings, and that gives them a roof over their heads as well. As our Prime Minister leaves office, I cannot believe that is the legacy she wants to leave behind. Please will the Minister look into this issue? It is also a Government debt.
I acknowledge the hon. Lady’s deep interest in and work on this topic over several years. She has raised points to which it is difficult for me to respond because they are outwith my responsibilities. As she will know, in the Budget we announced a £1.7 billion package of additional financial support for universal credit. I acknowledge that the hon. Lady disagrees with one element, but that additional support did involve the reduction of the maximum deduction from the standard allowance, from 40% to 30%. I cannot speak for a policy area for which I do not have responsibility. I am delivering a breathing space scheme that covers a wide range of debts and reaches deep into public sector debts, which I was keen for it to do from the outset.
As I set out in a recent Westminster Hall debate, the amounts being deducted from universal credit are a significant part of the reasons people fall into problem debt. I agree that a lot of that is down to Department for Work and Pensions policy, but I have seen many examples of people whose tax credit overpayments are being deducted from their universal credit, and of people being told that they have overpayments dating from 2006 or 2011, when they were supposed to have been written off. The average of £1,200 being deducted from people’s universal credit is contributing to their not having enough to get by or to pay their bills. Will the Minister and the Treasury please look into this issue as a matter of urgency and allow people to appeal against such deductions?
The hon. Lady will know that, as I said in response to the previous question, that is an issue of the administration of benefits and is the responsibility of the DWP. I will certainly make her observations clear to my colleagues in Government. Universal credit over- payments will be included from day one. I will make sure that I fully address the hon. Lady’s points and write to her on the detail.
I very much welcome the statement and the action that will be taken from today, because research shows that each year more than 100,000 people who are in debt attempt suicide. The scheme has to be helpful in giving them the support they need and improving mental health. One suicide crisis period, particularly for young men, is early adulthood; will the Minister liaise with colleagues to ensure that financial education and support is available not only in schools but in colleges and universities?
The hon. Lady makes a sensible point about the need for appropriate financial education at all levels. It needs to start early and endure through adolescence and into early adulthood. Several initiatives are under way to try to improve the quality of financial advice. The setting up of the Money and Pensions Service and its broader remit in this area is one part of that, but there are other partners, including our banks, through UK Finance, which is keen to do more. I very much take on board the hon. Lady’s observations.
Businesses: Late Payments
With permission, I wish to make a statement about the Government response to the “Creating a responsible payment culture” call for evidence, which I have published today.
The Government are committed to supporting small and medium-sized enterprises to start well and grow, including through a network of 38 growth hubs throughout England that provide advice, guidance and support. As part of our industrial strategy, we have an action plan to unlock more than £20 billion of investment in innovative and high-potential businesses. Where we see practices that unfairly constrain SMEs’ finance choices, we are prepared to act. For example, we recently removed a barrier that was preventing some SMEs from using invoice finance because of prohibitive contract terms imposed by their customers. The new measure is expected to provide a long-term boost to the UK economy worth almost £1 billion.
Last year, we launched a call for evidence asking for views on how to create a responsible payment culture for small business. Although a number of measures are already in place to tackle late payment—from the prompt payment code to the ability to charge interest on late payments and the increased transparency through the payment practices reporting duty—the call for evidence told us that there is more to do to improve the payment landscape. That is why I am announcing today that I will now take further and firmer action to tackle the scourge of late payments while maintaining a holistic approach to cultural change by using all the avenues available to us in this space.
I will shortly launch a consultation to seek views on strengthening the small business commissioner’s ability to assist and advocate for small business in the area of late payments through the provision of powers to compel the disclosure of information. I will also seek views on the merit of the commissioner’s potentially being able to issue penalties for poor payment practices. In respect of large businesses that have poor or unfair payment practices, we want to seek views on whether the commissioner should be able to apply sanctions, such as binding payment plans or financial penalties.
I am also announcing today that responsibility for the voluntary prompt payment code is to move to the small business commissioner and be reformed. This will unify prompt payment measures with the commissioner’s other responsibilities and address weaknesses in the operation of the current code. We have seen the impact of the strengthening of the code since our announcement in October: earlier in the year, we saw the removal from the code of five businesses and the suspension of 12 others. The next compliance round is currently under way.
I will take a tough compliance approach to large companies that do not comply with the payment practices reporting duty. The legislation allows for the prosecution of those who do not comply. I will use this enforcement power against those who do not comply, where necessary. We are already writing to the businesses that we have assessed as being within scope to remind them of their duty.
The Government will launch a business basics fund competition, with funding of up to £1 million, which will encourage small and medium-sized enterprises to utilise payment technology. We have recognised that tech adoption has had a positive impact on the productivity of small businesses. This competition is coupled with the small business commissioner’s strategy to deliver advice, signpost and provide a clear pathway for small businesses when they feel that they need support.
I also intend to establish a ministerial-led group to bring together key Government Departments to act on improving prompt payment across both the public and private sectors. We are working with UK Financial Investments and the financial sector to review the role that supply chain finance plays in fair and prompt payments, including the potential for an industry-led standard for good practice in supply chain finance. This review will report back to the Business Secretary by the end of the year.
We also want to bring greater transparency to how supply-chain finance is reported in company accounts and assessed in audits. Working with the Financial Reporting Council, we want to develop guidance and build that into its sampling of companies’ accounts. Supply-chain finance can provide an affordable finance option for SMEs, but they need to be assured that the terms are fair.
Our modern industrial strategy aims to make Britain the best place in which to start and grow a business, and removing barriers to growth is key to that aim. The response to the call for evidence and the package of measures that I am announcing today will ensure that we will continue to tackle the issue of late payments. I offer great thanks to the Federation of Small Businesses and its Fair Pay campaign, which has campaigned so hard for movement from the Government. I also thank the hundreds of businesses that have taken part and engaged comprehensively with the Department in assessing the call for evidence.
Finally, I thank the Business, Energy and Industrial Strategy Committee for its significant work on this issue and the work that it will continue to do. I am sure that it will hold us to account on the improvements that we are announcing today. I will place a copy of the Government’s response in the Libraries of both Houses today. I commend the statement to this House.
Unfortunately, I have only just received a copy of the Minister’s statement. I do not know why there was a delay, but it was not particularly helpful in preparing my response. [Interruption.] The Minister has just graciously apologised.
Late payment is believed to be the cause of 50,000 business failures each year, at a cost to the economy of £2.5 billion, along with thousands of jobs. Those are figures from the Federation of Small Businesses. The Minister is right to pay tribute to that organisation for the brilliant work that it does in advocating for small businesses on this issue and on so many others.
In her press statement, the Minister reported a fall in the scale of the problems facing small businesses, but let me caution her on that. She cited the excellent work of the Business, Energy and Industrial Strategy Committee, but it has suggested that it has evidence that payment terms are growing longer to mask some of these problems. Perhaps she can address that through some of the proposals that she has outlined.
We welcome the steps announced today as an important start in tackling the scourge of late payment. I tabled amendments to the Enterprise Bill that would have given the small business commissioner powers to insist on binding arbitration and fines for persistent late payment. The Government rejected those amendments, so we put the proposals in our 2017 manifesto, along with requirements for anyone bidding for a Government contract to pay their suppliers within 30 days. It is good to see the Government catching up with us today in their proposals.
The small business commissioner does great work with the £1.35 million in his revenue budget and, as I understand it, 12 members of staff at his disposal, but there are limits to what he can do. Although the £3.8 million recovered by the commissioner is important to the businesses affected, it is a fraction of the money withheld by late payers, which is in the tens of billions of pounds on any of the estimates available to us. What extra budget will the commissioner be given to discharge the additional responsibilities that the Minister is proposing, and what is the timescale for the consultation?
Accountability of company boards is a step in the right direction, but it will be important to compare the experience of the supplier with the reported practice in company accounts. How will the Minister ensure that what is reported is the time from the date of supply of goods and services rather than the date of recording the invoice, which any accountant knows can be significantly different and is often subject to delay when invoices are mysteriously lost or queried by accounts departments? How will this add to the existing duty to report? When will the consultation on giving the powers on the duty to report to the small business commissioner take place?
As the Minister told us, a number of companies that are members of the prompt payment code have been found not to comply with the code. The scandal of Carillion is an example of abuse of that code; we saw payment times of 120 to 180 days becoming the norm. Giving the policing of that code to the small business commissioner is a sensible idea, so will the Minister say what additional resources for these powers will be given to him?
The use of project bank accounts would have prevented the £2 billion loss to 38,000 suppliers in the Carillion fiasco. What consideration are the Government giving to extending the use of project bank accounts? I also note that the Government are pledging from 1 September to force bidders for Government contracts of more than £5 million to pay 95% of their invoices within 60 days. That is in line with the prompt payment code, but only with the lower end of its requirements. Why not make it a 30-day requirement?
One complaint of businesses is that the public sector is the source of some of the worst practice. The Minister mentioned the public sector in her statement. Another complaint is that smaller firms are often at fault in delaying payments. When does she expect action to be taken on public sector and other small business delays?
The problems of late payment need significant changes in practice. Today’s statement announces a series of measures which, if properly resourced, could make a significant difference. Businesses deserve a change of culture. The economy and the country need a change in practice. In broadly welcoming these measures, I hope that the Government’s delivery matches the rhetoric.
I apologise to the hon. Gentleman for the fact that he did not receive a copy of my statement in sufficient time. That was not my intention at all. I hope that he will understand, following the many debates that he and I have had in the House, that that is not how I tend to work with him. I thank him for recognising that this statement should have an impact on the late-payment problems of many small businesses. One thing that has been made absolutely clear to me since I became a Minister—and actually prior to being elected, when I was a small business owner myself—is that late payment is always raised by companies that deal with large organisations. I am very pleased to be able to move forward on this matter.
The amount of money owed in late payments has halved. I wish to recognise the work that has been done by the small business commissioner since he took up his role one and a half years ago. He has collected more than £3.5 million in late payments. The hon. Gentleman is right to question his role and when the consultation will take place. We want that consultation to happen quite quickly. One of the key things that came out of the call for evidence was that people wanted more powers to be given to the small business commissioner. They saw his role as, in effect, an umbrella role encompassing a number of enforcement abilities for him to act on behalf of small businesses.
The consultation will happen soon, and I would like it to take place with speed. I reiterate that, as we seek views on whether we should allow the small business commissioner to apply sanctions such as binding payment plans and financial penalties, that would be a massive step change and step forward. The small business commissioner has been very vocal in requesting more powers to enable him to represent and help the small businesses that come to him.
We will also be seeking views on whether the small business Minister should have the ability to refer topics to the small business commissioner for investigation. The small business commissioner will currently investigate only once a complaint has come from a small business, so we are looking at other ways in which investigations could be carried out. Obviously, I am giving hon. Members just a sample of what will be included in the consultation.
The hon. Gentleman is quite right on the matter of boards. On the back of the Chancellor’s announcements in the spring, we are pleased to give audit committees the power to review payment practices and for that to be included in the annual report. We are working with the Financial Reporting Council and the frameworks department at BEIS to work out the best way for that to happen. The new strategic reporting requirement was introduced in January. We are asking the FRC how the payment reporting duty is covered by that new duty, if at all. I assure the hon. Gentleman that we will legislate to make that happen if necessary.
The Chartered Institute of Credit Management has worked hard on this issue over recent months, especially on the strengthening of the voluntary prompt payment code in October. We are pleased that cross-examining the data gathered under the payment reporting duty has helped with compliance with the voluntary code. We and the CICM believe that the best place for that duty is with the small business commissioner, so that the commissioner is, in effect, a one-stop shop and an easily identifiable pathway for small businesses.
The hon. Gentleman is right to talk about project bank accounts. Some hon. Members present, including my hon. Friend the Member for Bury St Edmunds (Jo Churchill), have lobbied me in the past on the matter of retentions. We have told the industry that we expect it to come to a consensus on a way forward, and we will take action if it does not.
As the hon. Gentleman knows, we have announced that from 1 September any company bidding for Government contracts over £5 million will be expected to pay 95% of their invoices within 60 days. If they do not achieve that target, they will not necessarily be able to bid for further contracts. In April 2019, we announced our new ambition that 90% of undisputed invoices should be paid to small businesses within five days.
Like the Minister, I ran a small business, so I recognise the challenge of late payments for small businesses. It is to the credit of this Government that they created the role of small business commissioner. The Minister said that she is holding a consultation on additional powers for the small business commissioner, who has often said that he needs more powers. Will she be a little clearer about when those powers might be available to him, and whether they will include the power to fine businesses that fail to honour their commitments? The Business, Energy and Industrial Strategy Committee has heard about many businesses that signed up to the prompt payment code but failed to adhere to its terms, and the small business commissioner needs a little bit more beef to get his teeth into that issue. Finally, will she consider making it mandatory to add interest to overdue accounts, because that would give businesses that are delaying payments a real incentive to get their payments made on time?
Primary legislation would be required to give further powers to the small business commissioner, so we will seek views and consult. We do want to give the small business commissioner further powers—for example, the ability to apply sanctions to businesses that do not comply with requests for information, court orders or financial penalties. Such sanctions could include binding payment plans.
My hon. Friend asked whether we would consider making it mandatory to apply interest to overdue accounts. There is currently low take-up of the application of interest to invoices, so there needs to be an education piece for small businesses, which we very much hope to achieve through the small business commissioner. With all these elements coming under one roof, he can launch an ambitious PR strategy to enable small businesses to understand what powers already exist for them.
I thank the Minister for advance sight of her statement, which in our case arrived in plenty of time for us to look at. We welcome initiatives to curb late payments, but let us be frank: this does not go nearly far enough. For anyone tuning in to last night’s Tory hard Brexit hustings, it will come as no surprise that the UK Government remain opposed to taking the steps required to protect Scottish business. Does the Minister have the good grace to agree that it is now beyond a joke that, in place of serious policy steps, her statement merely proposes some minor technological measures and platitudes on best practice? And she did not fully answer this question, so can she confirm that she has looked at the Scottish Government’s project bank account scheme? Has she learned any lessons about how that is protecting smaller contractors and subcontractors on public procurement projects?
With the Federation of Small Businesses stating,
“If all payments were made on time 50,000 more businesses could be kept open each year”,
it is clear that small business needs legal protection, so does the Minister now regret her Government’s failure to support the Construction Industry (Protection of Cash Retentions) Bill, with which my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) aimed to stop late payments in that sector? Indeed, does she regret her Government’s failure to extend that sort of protection across the economy to all small and medium-sized enterprises?
I stand here today and make announcements, but we also need to recognise that this is about culture. We want to use all the tools in the box to legislate and take action where possible, but we also want to work with the industry and businesses to change the culture. It is not right that large firms take advantage of smaller businesses through late payments, so today we bring forward our response to the call for evidence, to stem the scourge of late payments.
The hon. Gentleman mentions project bank accounts. As I briefly outlined in my response to the previous question, project bank accounts and the use of retention is obviously a concern for many people. It is part of the whole late payment arena. That is why, as I have said, we have worked with the industry and heard the views of both sides. A consensus has yet to be found in the industry. The challenge that we have set is that the industry must come to a way forward or we will take action.
To answer the hon. Gentleman’s question, I have indeed looked at some of the work that has gone on in Scotland and at what has happened in Northern Ireland. I highlight what the Federation of Small Businesses said today:
“Small businesses will be delighted with today’s announcement. FSB has worked very hard with government to create a whole-board approach to late payment within the UK’s large companies, and empower Audit Committees to look after the supply chain. Together with measures to strengthen the Small Business Commissioner’s powers and reform the Prompt Payment Code, the measures today could finally see an end to poor payment practice.”
The words that my hon. Friend just spoke were those of my constituent, Mr Mike Cherry. There can be no greater praise than that from such an advocate for small business. The FSB supports these measures, so I commend her on them.
Does my hon. Friend agree that one of the main challenges is not late but prompt payment? Far too many big businesses continue to extend payment terms—150 days, 180 days or even more. That is simply not acceptable and is unfeasible for many small businesses. Will my hon. Friend add that to her to-do list and really make a difference for small businesses?
I thank my hon. Friend for his question and recognise his particular interest as my predecessor in this post. He is absolutely correct: prompt payment is a particular concern for small businesses, and some large companies alter their payment terms. We are seeking views on giving the small business commissioner more powers because he acts for small businesses that have struggled with getting prompt payment. Currently, his powers are not binding; we feel that if his powers were binding, that could be part of his suit of armour in tackling late and non-payments.
Thank you very much, Mr Deputy Speaker.
When our Select Committee looked into this issue, many small businesses insisted on giving evidence in private, so worried were they about retaliation from the big businesses that they supplied. Larger businesses, including Morrisons, Aldi and WH Smith, are not signatories to the prompt payment code, while Boots pays suppliers at a discount for the privilege of their being paid on time. The power imbalance is so great now between bigger and smaller businesses that. I urge the Government and the Minister to look again, make the prompt payment code mandatory and bring down the period to a benchmark of 30 days.
I thank the hon. Lady and highlight again the significant work that her Committee has done on this issue, including with our Department. She is absolutely right to highlight the power imbalance, which is why many small businesses feel that they are unable to speak out. That is why we are seeking views in our consultation on powers for the small business commissioner. We will seek to enable the Small Business Minister to make a referral to the small business commissioner; to give the commissioner investigatory powers similar to those of the Groceries Code Adjudicator; and to empower him to carry out an investigation without the small business involved having had to report the issue. There is a suggestion that the process could be anonymised.
The hon. Lady raises an important point, and I am very much aware of it. It will be very much part of my drafting, with the team, in regard to the consultation.
I welcome this statement from the Minister and I know that she is committed to ensuring that small businesses are dealt with fairly.
The project bank accounts introduced by the Northern Ireland Executive have already been mentioned. That measure now applies to hundreds of millions of pounds of Government contracts and ensures that the money goes not to the main contractor but directly to the subcontractors when they have completed the work. That stops the main contractor holding on to the money or bargaining with the small companies and means that the small companies do not have to take the initiative, which they are sometimes afraid to do. Will the Minister work with Northern Ireland officials to ensure that the lessons learned there can be applied here?
I thank the right hon. Gentleman for raising that. I highlight his particular interest in this area and the fact that he was one of the Ministers responsible in Northern Ireland when project bank accounts were introduced there. He is right that there are absolutely some merits in such accounts; as he knows, I have taken a particular interest in the subject and I will continue to work on it. The Government are clear that where project bank accounts can be used with Government contracts, they will be, although they are not always a suitable measure in some large contracts.
Today, I have announced a suite of tools to tackle late payments. Am I going to stand here and say that in future we will not have to do anything more? Of course not. Part of government and what we need to do in a changing economy and business environment is to make sure that we keep looking at ways to make things easier for small businesses.