Wednesday 9 December 2020
[Ms Angela Eagle in the Chair]
Covid-19: NAO Report on Government Procurement
[Relevant Document: e-petition 328408, Hold a public inquiry into Government contracts granted during Covid-19.]
I beg to move,
That this House has considered the NAO report on Investigation into government procurement during the covid-19 pandemic.
It is a pleasure to serve under your chairmanship, Ms Eagle. I start by thanking the National Audit Office for its report. I also thank all those who have been working to shine a light on Government procurement during the pandemic: the Good Law Project, which is bringing forward a number of judicial reviews; reporters for Byline Times, openDemocracy, The Guardian and The Sunday Times; and the UK Anti-Corruption Coalition.
By chance, today’s debate takes place on the UN’s International Anti-Corruption Day. A number of businesses and others have contacted me in recent days to share their views and experiences, for which I am grateful. I applied for the debate to highlight the important findings in the NAO report and the serious questions that the Government now have to answer. The report sets out the facts on the tens of billions of pounds of public money spent by Government Departments during the covid-19 pandemic, up to 31 July 2020. It covers the pressure and need to procure goods, services and works quickly; the regulations that applied, or should have applied, to this frenzied procurement; and the management—or mismanagement, in many cases—of procurement risks, often including blatant conflicts of interest.
I am grateful to my hon. Friend for securing the debate. PPE Medpro was incorporated on 12 May and was awarded a contract for £122 million for single-use disposable medical robes, which it was going to import. The contract was not advertised, but the company had a link to a Conservative peer. By contrast, my constituents who own Florence Roby spent months trying to get a contract for multi-use medical robes, which can be used up to 100 times. They were given the run-around and, after months, they had to give up and lay off staff. Is that contrast not a perfect example of everything that the National Audit Office highlights as being wrong with procurement in this crisis? This is a missed opportunity to have environmentally sustainable production and value for money, with reusable, not single-use, equipment.
Thank you, Ms Eagle. I absolutely agree with my hon. Friend. Story after story has come forward in a similar vein.
Public procurement regulations are designed to safeguard public confidence in the spending of public money. On 18 March 2020, the Cabinet Office implemented emergency procedures for procurement to allow for extreme urgency, including directly awarding contracts to suppliers without competition. That guidance referred to the need to keep proper records of decisions and actions on individual contracts; to have transparency and publication requirements; and to achieve value for money—basic requirements that the report and other information in the public domain now show the Government failed to meet.
The NAO highlights that, remarkably, the Cabinet Office guidance failed to give direction on managing the risks that should be considered as a result of using direct awards. The usual Cabinet Office spending controls on contracts over £10 million were not applied to the procurement of personal protective equipment. A clearance board was later set up, with an eight-stage process to approve PPE contracts over £5 million, but we know that £1.5 billion was awarded in contracts before proper processes were in place and before any financial and company due diligence process was standardised.
By 31 July 2020, over 8,600 contracts, worth £18 billion, had been awarded, of which £10.5 billion-worth were awarded directly without competition. Under the cover of the pandemic, billions of pounds of public money was handed to private companies, including Tory-linked firms, without competition, transparency or accountability.
Does the hon. Gentleman agree that we were on daily calls at the time discussing the pandemic and how we could help our constituents and companies? People from all parties were there, including Labour Members who were rightly asking for PPE for care homes and other organisations in their constituencies.
I will move on because I want to go through the ways in which the system was set up. I will move on to some of the case studies highlighted in the report. PestFix, a pest control supplier, was handed a contract worth £350 million for PPE. The Government contracted with PestFix to purchase 25 million FFP2 masks, which we now know did not meet the Government’s published PPE specifications at the time of the order. Only after 600,000 masks were completed and delivered did the Department communicate the problem to PestFix and alter the contract.
Ayanda Capital—a London-based investment firm whose senior adviser was Andrew Mills—was awarded a PPE contract worth £252 million. At the time, Mills was also an adviser to the Board of Trade, part of the Department for International Trade. The 50 million masks purchased from Ayanda Capital failed to meet NHS specifications and were never able to be used. The deal’s documentation failed to identify any conflicts of interest.
Other cases have come to light. P14 Medical, a small firm based in Stroud, Gloucestershire, which recorded significant losses in 2019, was handed a £156 million contract to import PPE from China. Its director is a Conservative councillor. PPE Medpro, which has already been mentioned and is run by Anthony Page, a business associate of Conservative peer Baroness Mone, was handed a £122 million contract weeks after it was set up. In fact, PPE Medpro was set up on the day that Page quit as secretary of the company that deals with Baroness Mone’s brand.
In another case, Spanish businessman Gabriel González Andersson received £21 million of taxpayer’s money for acting as an agent to an American jewellery designer who, despite the absence of relevant experience, received major contracts for the supply of PPE. The Health Secretary’s former neighbour, who runs a pub in his village and has no previous experience in medical supplies, was awarded a £30 million contract to make millions of plastic vials for covid tests. He first contacted the Health Secretary by WhatsApp.
It is not just in the procurement of PPE that the Government have serious questions to answer. Some £840,000 was handed to the communications company, Public First, to run focus groups. The contract for that work was awarded retrospectively. Public First was founded by husband and wife Mr Frayne and Ms Wolf in 2016. Both Frayne and Wolf have worked in senior positions at different times for the former Education Secretary, and now Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, the right hon. Member for Surrey Heath (Michael Gove).
The NAO stated:
“We found no documentation on the consideration of conflicts of interest, no recorded process for choosing the supplier, and no specific justification for using emergency procurement.”
The Government have tried to claim that the NAO report shows Ministers properly declared their interests and that there is no evidence of Ministers’ involvement in procurement decisions or contract management. The truth is that we just do not know what role Ministers played.
The Government’s only explanation is that this was an emergency and they were sourcing PPE as quickly as possible. Yes, the Government had to source PPE quickly—a problem of their own making. During years of cutbacks, emergency stockpiles of PPE dwindled and went out of date. The Government ignored warnings from their own advisers to buy missing equipment, and pandemic planning became yet another casualty of austerity and incompetence. It took Ministers until March to realise that the NHS supply chain, fragmented by years of marketisation, could not distribute PPE quickly enough to meet demand, which left Ministers scrambling to source PPE from elsewhere and overpaying by tens of billions of pounds.
No, I do not have time.
Despite the enormous sums being spent, PPE was still not making it to the frontline. There was a huge disconnect between the boasts being made by Ministers in Parliament and the reality on the ground, where key workers were pleading for the kit that they needed to do their job safely. We all recognised that this was an emergency, but the need to act fast does not explain or excuse the Government’s actions. It does not explain why the emergency procurement rules should have been applied to non-PPE or non-emergency suppliers, such as public relations agencies, and nor does it justify why some consultants were paid in one week what a nurse earns in an entire year. It does not explain why rules around transparency, which were not suspended by the emergency procedures, were not followed, or why the Government still refuse to reveal basic information about who was bidding for contracts and how decisions about contracts were made.
Here is where the Government’s story really falls apart. We know that dozens of experienced local suppliers that offered to provide PPE were ignored. These qualified businesses had the capacity to produce large quantities of PPE quickly, but they were overlooked for contracts while businesses that had no prior experience were deemed fit. Ahead of this debate, I was contacted by reputable PPE suppliers that say they were crowded out during the pandemic by organisations that had no history of PPE manufacture or supply, some of which we now know had existed only for a matter of weeks. One established family-run company in Merseyside was forced to lay off staff after its offer of PPE to Government was ignored and then refused, as contracts instead went to Tory-linked firms buying from abroad.
The cronyism does not stop with contracts. We have also witnessed an opaque and troubling appointment process, whereby senior figures with close ties to the Conservative party have won public jobs that are of great importance in the national response to the pandemic. I pay tribute to Gabriel Pogrund and Tom Calver at The Sunday Times for their investigation, which was headlined, “Chumocracy first in line as Ministers splash covid cash”. Their investigation really is essential reading; it is extensive, and there is not time to do it justice in this debate, but it starts with the Prime Minister’s appointment of a close family friend, Kate Bingham, who is also the wife of a Conservative MP, to head up the vaccines taskforce. There was no formal appointment process, and Ms Bingham was appointed despite being a venture capitalist who had no previous experience in the field. She herself has said that her initial reaction to the Prime Minister’s offer was to say:
“I am not a vaccine expert, why should I be the right person?”
Bingham has spent £670,000 on consultants from a small PR agency with close links to the family of Dominic Cummings. She is also facing accusations that she shared sensitive Government information at a private equity networking event in the United States.
Then there is Lord Feldman, a former chairman of the Conservative party, who was secretly appointed as an unpaid adviser to the Department of Health. He sat in on discussions between health Ministers and Tory donor David Meller. Meller was later handed a £163 million contract for PPE despite his company having no track record of producing PPE. I wonder whether Mr Meller will be making any more donations to the Conservative party any time soon—he certainly must be flush for cash.
George Pascoe-Watson and Tory peer Lord O'Shaughnessy, chairman and senior adviser of the lobbying firm Portland Communications, were appointed as advisers at the Department of Health. They quite literally split their time between advising the Government on their covid response and advising their corporate clients on what was going on in Government. Lord O’Shaughnessy took part in calls with Boston Consulting Group, a Portland Communications client, which went on to be handed a £21 million contract from Government.
Of course, if anyone has a problem with any of this, they could take it up with the Government’s anti-corruption champion, the hon. Member for Weston-super-Mare (John Penrose), who is here with us today in Westminster Hall. He is also a Conservative MP and the husband of Dido Harding, the Conservative peer appointed to head the nation’s test and trace programme. Her appointment is now facing a possible judicial review.
I thank the hon. Gentleman for giving way. He is making some important points. However, I will just say in response to the charges he is making against myself and my wife that he really ought to confirm that he is aware that the anti-corruption champion’s role has never had—since it was first created under Tony Blair—investigatory powers; those are rightly held at arm’s length from political leadership. That has always been the case, and therefore to imply that there is some sort of investigation that I should be conducting is misleading and dangerous.
Could the hon. Gentleman also confirm that he is aware that both my role as anti-corruption tsar and my wife’s role, which he has just mentioned, are unpaid and that she is not the accounting officer for NHS Test and Trace, which is a position held by a full-time civil servant?
Finally, can the hon. Gentleman confirm that since both my wife and I are parliamentarians, and therefore have to make declarations in the Register of Members’ Financial Interests, he is not implying, and would not try to imply, that either of us has gained inappropriately in any way from our respective roles?
On that last point, I can say I certainly never made that accusation. My point would be that it is inappropriate that he is in the position he is in as anti-corruption champion. How can a Conservative MP be in charge of overseeing corruption when the Government of the day is a Conservative Government?
On a point of order, Ms Eagle. It is important to note that ever since the role of anti-corruption champion was invented, it has, under Labour Governments as well as Conservative, always been held by an MP—sometimes a Minister—who is a member of the governing party of the day.
It remains completely inappropriate.
In the words of The Sunday Times authors,
“As the government mounted a war effort to combat Covid-19, it has instead resembled more of a ‘chumocracy’. This is a world in which ministers have turned to friends with links to the Conservatives.”
While the British public continue to make huge personal sacrifices, a privileged group of business people with close connections to the Government has turned huge profits from the pandemic. What is perhaps most remarkable is that Ministers actually created a VIP high-priority lane for companies bidding for contracts, which were put forward by Government officials, Ministers’ offices, MPs and Members of the House of Lords. It is not just a perception of cronyism; we now know that the system was rigged, with privileged access granted to companies with connections to top politicians. These favoured companies were 10 times more likely to be successful than those without political connections. This flies in face of one of the key principles of procurement: that suppliers should be on a level playing field. If this happened in any other country, we would call it corruption.
There can be no justification for the Government withholding the names of fast-tracked companies allowed to jump the queue, often at the expense of more proven competitors. Transparency is a fundamental principle; the public have the right to know how their money has been spent. The NAO’s investigation focused on 20 contracts, and its revelations could just be the tip of the iceberg. There must be a full independent investigation into Government contracts granted during covid-19.
More than 100,000 people have now signed a parliamentary petition calling for a public inquiry. The Government must, as a bare minimum, implement the NAO recommendations. They must end the VIP lane, if they have not already done so, and return to undertaking competitive procurement. They must publish the full details of the companies that pass through the VIP lane, and the sources of their referral. In a number of other countries, including Ukraine and Colombia, details about emergency covid contracts must be published within 24 hours. If they can do it, why can’t we?
The Government must embed open contracting systems into their procurement processes. Their forthcoming Green Paper is an opportunity to go even further, to rewrite the rules of procurement to prevent such flagrant conflicts of interest in the future. I will return to the Green Paper in a moment, but let me briefly talk about the advisory panel that is informing the Green Paper.
The Government’s procurement transformation advisory panel contains some voices that are welcome in shaping Government procurement policy—the University of Sussex’s Centre for the Study of Corruption, for instance, is one of them. However, there are serious concerns about other appointments to the panel, most notably Amazon. Amazon has already been awarded 82 central Government contracts, worth £225 million, in the past five years, and has a deal enabling local councils to buy supplies in one marketplace. The manner in which Amazon is embedding itself into national and regional public procurement is, in the words of Paul Monaghan of the Fair Tax Mark, “truly frightening”.
How can it be right that Amazon should be given such a position of influence over Government procurement policy, while raking in hundreds of millions in Government contracts itself? Considering Amazon’s record on meeting its tax obligations, why should a company that refuses to pay its fair share into the public purse be in a position to profit so handsomely from it? Can the Minister tell me by what process members of the procurement transformation advisory panel were appointed? What steps, if any, were taken to identify and address potential conflicts of interest, and will the minutes of the meeting be published?
In the same week the NAO report was published, the UN published its evaluation of the UK’s implementation of the UN convention against corruption, in which it calls on the UK to take a tougher approach to handling conflicts of interest—especially those at the top of Government. When we look at how other Governments across the world have responded, not only to covid but to procurement specifically, there is a lot for the UK to be embarrassed about. In Sweden, Slovakia, Estonia and Latvia, the number of contracts awarded using open competition went up during the pandemic.
The upcoming Green Paper is an opportunity to put in place measures that would begin to restore some trust in the system. The Government must now consider implementing end-to-end digital transparency for all Government contracts from planning through to tender, award, spending and implementation. The Government must establish an effective conflict of interest regime, including a publicly accessible database of conflict of interest declarations. To support that, they should extend the remit of the independent adviser on Ministers’ interests to give them independent statutory status, including the power to investigate conflicts of interest and to take action.
The Government should look to introduce conditions requiring companies bidding for contracts to meet the highest standards to ensure that they are providing real social value. Companies should receive public contracts only if they meet their tax obligations and environmental standards, and if they recognise trade unions.
This debate goes to the heart of a much wider malaise. For decades now, people have been steadily shut out of decisions affecting their lives. Wealth and power have become more highly concentrated in the hands of a few. Wealth translates to influence, and influence back to wealth. The revolving door between big business, media, finance and politics never stops spinning. The only way to counter that is by deepening democracy and accountability to the public at every level. The Government’s own anti-corruption strategy warns:
“Corruption threatens our national security and prosperity, both at home and overseas. Unchecked, it can erode public confidence in the domestic and international institutions that we all depend upon.”
The obscene profiteering and cronyism that has been the hallmark of the UK’s response to covid-19 has further eroded what little trust people have left in our political system. The need to challenge conflicts of interest, extend democracy and fight for a robust system of checks and balances to hold power to account has never been more pressing.
It is a pleasure to speak under your chairmanship, Ms Eagle. I congratulate the hon. Member for Liverpool, Walton (Dan Carden) on securing this important debate. I absolutely accept that there are issues, that procurement is extremely difficult and that lessons need to be learned.
I am grateful to the hon. Gentleman for securing the debate, and for the latter-day conversion of many Opposition Members to an interest in the area in question. Having sat on the Public Accounts Committee, I did not see many of them at the time, or over the past 18 months, raising this issue. However, I accept that there are issues to be raised, and I am keen to raise them. Unfortunately, while in my view the issues need to be raised in a spirit of constructiveness, that was not evident in the hon. Gentleman’s comments. They need to be understood with an acknowledgement of the context in which we work. Failure to understand those points means we will not push forward the discussion in a useful manner.
Having listened to the hon. Member for Liverpool, Walton I am afraid that the selective quotations from the NAO report, which I have also read, need to be corrected. He said that action was taken without the usual Cabinet Office spending controls, whereas, on page 11, the report states that
“we recognise that these were exceptional circumstances”.
The hon. Gentleman said that things were undertaken before any processes were standardised, yet, as the report states clearly on page 32, even before standardisation occurred civil servants were able to
“research and report on financial details of companies and the background details of company directors within four hours at the peak, and produced reports rating suppliers as red, amber or green.”
Nowhere in the report does the word “mismanagement” appear—not in any of the 48 pages.
The hon. Member for Liverpool, Walton talked about dozens of experienced local suppliers being ignored. I had similar suppliers that I was sending in, but they were not ignored. Page 8 states that
“the Department of Health & Social Care and the Cabinet Office put in place a clearance board to approve PPE contracts more than £5 million. PPE procurements were subject to normal departmental spending controls, including HM Treasury approval”.
On page 9, the report states:
“The cross-government PPE team established an eight-stage process to assess and process offers of support to supply PPE”.
The hon. Gentleman made a strong statement that the system was rigged, and yet page 9 states that both lanes, including the high-priority lane,
“used the same eight-stage process to assess and process offers.”
I was on some of the calls—with Members in this room—where we all directed statements and leads into that lane, without any expectation of favours whatsoever, but recognising that we were trying to ensure the best for our hospitals and the people on the frontline dealing with such difficult times.
In the 19 seconds I have left, the question that the hon. Gentleman failed to answer was the strategic one. In a period of emergency there is a choice: to prioritise output or process. Ideally, both would be prioritised, but if I had a choice, I would make sure that the PPE was in my hospital. I hope that some of the Opposition Members here will answer that question in the coming hour.
To listen to the hon. Member for North East Derbyshire (Lee Rowley), one would think everything was rosy in the garden—of course, it is not. The Government have adopted processes that abandon the decades-old traditions of checking value for money when spending in the private sector. How else can we explain that, for example, £95 billion of outsourcing resulted in a 20% increase in contracts, and the £14.3 billion of additional expenditure on contracts that had been let? How else can we explain that many contracts were let without tendering processes of any kind? Some £10 billion of taxpayers’ money was spent without any form of tendering at all. To rely on the process that the hon. Member for North East Derbyshire has just described simply does not convince. One billion pounds have gone to Tory chums—these are staggering amounts of money.
I know it is not the subject of the audit report, but given the facts that emerged when Carillion went bust—that the Government had abandoned any attempt whatever to monitor the delivery of the contract—it is extraordinary that no further steps have been taken to protect the public purse. This is taxpayer money being wasted on a colossal scale, and in an unjustifiable way. When we consider that outsourcing is costing each household in this country £3,500, the scale is extraordinary.
There is an old expression, is there not, about never wasting a crisis? The Tories have not wasted this one. They have handed over billions of pounds to their Tory chums in the private sector in a wasteful manner, with no real effort to monitor contracts or secure value for money. When people discover that it is costing each household £3,500, I think the general response will be that this is a massive rip-off—some would go further and suggest that our British standards of probity, which lasted for more than a century, have been abandoned and have become so corrupted as to no longer be acceptable. Whatever one’s view on that, it is hard to disagree that the Government are spending taxpayers’ money like confetti at a wedding—in a most wasteful and reckless manner.
Thank you, Ms Eagle. It is a pleasure to serve under your chairmanship.
I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on securing this important debate. It is, of course, regrettable that this comes on the back of the National Audit Office investigation into Government procurement during the pandemic. The report itself, as hon. Members have pointed out and no doubt will continue to do so during this debate, is critical of the Government’s failure to guarantee transparency that should provide absolute confidence in the use of public funds.
I am sure Members from across the House will sympathise with the hand the Government have been dealt this year. No one could have anticipated a crisis on the scale we have witnessed, and it is natural that mistakes have been made along the way. However, in the interests of accountability, transparency and overall good governance, it is wholly wrong for a Government to hide behind such unfortunate circumstances while dismissing the concerns of Opposition politicians. We have asked probing questions—and yes, levelled criticisms—while seeking to provide appropriate scrutiny of and seek clarity on the decisions made in Whitehall offices. Such endeavours are prerequisites of a healthy parliamentary debate.
Despite that, it seems that the level of immaturity and arrogance that has infected the Conservative party of 2020 is tantamount to that of a petulant schoolchild: on one hand demanding praise and pats on the head for the things it gets right, while at the same time demonstrating outright dismissal when pulled up on its litany of failures. Most of my constituents work in the private sector and their livelihoods depend on it, so it is pretty galling to hear, repeatedly, the superficial retort that our opposition is based on some false hatred of anything beyond the public sector.
In a feat of human ingenuity and brilliance, we now have a vaccine being rolled out across the country. At the same time, a week is barely seen out without yet another story of Government cronyism emerging; companies with no track record or experience in delivering comprehensive outcomes on anything are awarded contracts to the tune of hundreds of millions of pounds of taxpayers’ cash. The only thing the public can visibly note as the primary commissioning criterion is the obvious and apparent connections to the governing party.
Only last week, a Government Minister, Lord Bethell, was asked directly whether the Government intended to publish a list of companies that were contracted to supply PPE as a result of the high-priority lane. Owing to the so-called “commercial implications”, the Government made clear their intention not to publish the list of suppliers. That sort of culture and practice has been heavily criticised by the NAO.
It is a pleasure to serve under your chairmanship, Ms Eagle.
The NAO report raises serious questions that the Government must address on both competency and cronyism. We have heard some of the numbers cited in the NAO report today from other Members, and they are staggering. Clearly, in the midst of a national—and indeed, an international—health emergency, where every country in the world was scrambling for supplies, standard procurement rules and processes needed to be relaxed; clearly, in such a competitive market, prices would skyrocket and some mistakes would be made.
However, the headless-chicken approach that the Government have pursued led to the procurement of millions of products that were not fit for purpose or that simply never materialised. For instance, £364 million was spent on full-body coveralls, with only 432,000 of those items delivered and used. That amounts to £840 per bodysuit, which is completely unacceptable.
We now know from the NAO report that companies placed on the VIP list were 10 times more likely to win contracts in the early months of the pandemic. There were no criteria for referrals to the fast-track lane, and the source of the referral was not always recorded, so I hope the Minister will outline clearly what criteria were used to assess offers from MPs, peers and Ministers, what processes were followed and what due diligence was undertaken on their credibility and suitability.
As we have heard already, many companies with no prior experience were awarded contracts, and others with good experience were turned down. The lack of transparency, the lack of risk management and the lack of a paper trail in relation to billions of pounds of public funds absolutely stinks.
Integrity, objectivity and accountability are among the seven Nolan principles of public life; these have been tested to destruction on numerous occasions, not least in the context of the whopping procurement decisions detailed in the NAO report. While NHS staff were wrapping themselves in bin bags and dying in the line of duty, and while schoolchildren were making DIY PPE, millions of pounds of public money was being siphoned off to inexperienced companies, many with links to the Conservative party.
Ministers must now commit to a thorough independent inquiry at the earliest possible opportunity, as the Liberal Democrats have been calling for. We should establish a cross-party committee to examine all contracts awarded for the remainder of the pandemic, not least in the roll-out of the vaccines.
It is a pleasure to serve under your chairship, Ms Eagle. I thank my hon. Friend the Member for Liverpool, Walton (Dan Carden) for securing this important debate.
From wasting taxpayers’ money on PPE that was not fit for purpose and Serco’s inept contact tracing system, to setting up a VIP procurement channel for people with political connections, this Government have disregarded their own rules, operated secretly and made dangerous decisions that have jeopardised public health. The OECD foreign bribery report found that public procurement is particularly vulnerable to corruption. It is worth bearing that in mind when we look more closely at some of the eye-watering examples that Members have set out.
No. The hon. Lady has made many interventions already. Let me tell Members here, on behalf of our key workers in Nottingham and across the country, that these dodgy dealings might feel like games to Ministers, but they have very real life consequences for people across the country. Myself, my colleagues and thousands of frontline care workers struggled during the heat of the pandemic, when it was widely reported that a lack of adequate PPE and staff testing in care homes created a major risk of the virus spreading. We were smeared in the media, including by Members on the Government Benches.
Let me state again for the record: the lucrative contracts that this Government were handing out to their pals led to failures and delays that had a direct impact on frontline workers during the pandemic. People die when the Government get these things wrong. People have died. Does the Minister unequivocally accept the recommendations of the National Audit Office report, and by what date will they be implemented?
The Government need to immediately outline a list of all contracts awarded during the pandemic that are unlawful, terminate them and procure further services by way of fair and lawful competition. Will the Minister commit to that today? Ultimately, procurement for the public sector needs to be re-established, with the reliance on management consultants scrapped. People deserve to know that their money is being spent on keeping them safe, in a way that is fair and above board. We demand action and we demand answers.
It is a pleasure to serve under your chairship, Ms Eagle. I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on securing this important debate, because with every new story that emerges, the public are right to be asking questions, as this country goes through one of its most difficult times. They should not be reliant on the media or independent investigations for facts. Transparency and accountability should be coming from our Government.
This Government may have a majority, but that does not give them the right to do whatever they like. The National Audit Office investigation has rightly shone a light on what has been an absurd outsourcing strategy. In opening the debate, my hon. Friend the Member for Liverpool, Walton outlined all the usual checks and balances that were completely disregarded. The pandemic was unforeseeable, and we will not criticise people for not being able to prepare for something that we could not see coming, but a country of this advancement and with the level of resources that we have, has the ability to act quickly. It should have been able to act quicker to secure PPE and testing kits within the rules. Rather than putting our trust and money in smaller companies in this country and local actors with experience, the Government wasted millions of pounds of taxpayers’ money corner-cutting with private contractors for substandard products and services.
Gareth Davies, the head of the NAO, said:
“While we recognise that these were exceptional circumstances, it remains essential that decisions are properly documented and made transparent if Government is to maintain public trust that taxpayers’ money is being spent appropriately and fairly.”
That is a very fair statement. However, 10% of the suppliers were referred through political channels and, by contrast, only 1% of suppliers with no links had a chance of winning a contract. How fair is that? Some £10 billion-worth of contracts were awarded without competition, and almost 500 suppliers with links to politicians or senior officials were allowed to pitch directly for work.
The hon. Member for North East Derbyshire (Lee Rowley) talked about putting protection over process, but how can that be the case when, at the beginning of the pandemic, we had so many people begging for PPE and tests, while PPE and testing kits were being produced in this country? Suppliers did not receive contracts from the Government and so were forced to sell their products to the EU and other countries. The case of PestFix, which is a vermin control company, shows how bad the Government’s outsourcing has been. We really need to get a grip on this.
It is a pleasure to serve under your chairship, Ms Eagle. I thank my hon. Friend the Member for Liverpool, Walton (Dan Carden) for securing this debate. I hope that, in the short time I have, I can impress on the Government the need to acknowledge the mistakes that have been made and the lessons that need to be learned. At the end of my remarks, I will offer a constructive way forward, and I hope the Minister takes it very seriously.
There is a company in my constituency called Arco, which was founded in 1884. It is a local family-run company that specialises in safety equipment. All it does is PPE and safety equipment. It is acknowledged as being world-leading in its field, and it is the only safety distributor that has its own independently accredited testing laboratory in the UK, so it really is a world-leading expert. During the pandemic, it took the decision to prioritise its existing clients, which were healthcare institutions and food production institutions.
Arco prides itself on having incredibly high standards. Hon. Members would therefore expect that it would be at the top of the list of any Government procurement system looking for PPE distribution suppliers. In fact, if hon. Members google “UK world-leading PPE suppliers”, they will see Arco right there at the top. Sadly, during the pandemic, it found that its products were unwanted. It was floored by the Government response to creating a new procurement structure, which led to confusion. Suppliers lacked information and clarity about who they should be working with, and the failure to obtain decisions and sign-off led to failed orders.
Arco tells me that the online portal system had one single email address for all inquiries, and I have heard since that it was flooded with offers from companies all around the UK, with no real process for sifting those that were more genuine or reputable. That single point of contact did not require suppliers to provide information about their expertise, experience or record in sourcing or providing safety equipment. In fact, it seemed to lack the quality control that we would expect. No proof was required of the ability to meet obligations under PPE regulations when making offers to supply to the Government. Arco tells me that genuine suppliers were crowded out.
Arco has produced a 10-point plan with recommendations to improve the future processes and ensure that high-quality PPE is made at all times. It has written to the Government, and I will be writing to the Minister with its 10-point plan. I urge the Minister to have a conversation with Arco. Let us learn the lessons from the mistakes that have been made and ensure that they never happen again.
I thank my hon. Friend the Member for Liverpool, Walton (Dan Carden) for his excellent speech at the beginning of the debate. This is a fantastic opportunity to shine a light on this issue; sadly, the Government have been found lacking.
We know that huge sums of money have been spent since March. The National Audit Office report analyses £18 billion, but we know that the sums are even higher. Due to the economic downturn, serious financial decisions will have to be made in future to protect our public finances, yet so much has been wasted and given away to friends. The need for those financial decisions is made more pressing by the way in which the procurement decisions were made. This is public money, and our communities demand answers.
Since the report came out, the Prime Minister, Cabinet Ministers and Conservative MPs have been at pains to say that the contracts were rushed, but hon. Members should not forget that we had an exercise that showed what was needed in a pandemic. I believe that that still has not come to light. It should be brought to light now so that we can learn the lessons in advance of wave No. 3.
All hon. Members will pay tribute to the civil servants and armed services planners who played a key role in the huge logistical feat of managing. Without their efforts, where would we be? However, we can all remember the moment when we were watching on Sky News the aeroplane about to land, full of wonderful PPE from Turkey. Of course, that PPE arrived at great cost to the taxpayer, only to be found completely inappropriate and not to standard. That is just one snapshot. There has been a litany of errors, not just a few honest mistakes. It is clear that we need a new framework for procurement, particularly in advance of Brexit, after which we will not necessarily have the rigour that European law gives us.
I have three questions for the Minister. When will information relating to the remaining unpublished contracts be released? Will the Government commit to implement in full the recommendations of the NAO report on the rapid awarding of contracts? Thirdly, will the Minister commit to ensuring that all contract decisions will be covered by a future inquiry, with powers to prosecute any wrongdoing?
It is a pleasure to serve under your chairship, Ms Eagle, and I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on securing the debate.
Yes, we are living through unprecedented times, but it is disgusting that this pandemic has seen the wealth of billionaires rise by a third, while the poorest and most vulnerable are left destitute. They have been evicted from their homes and had their rights at work and wages slashed, with the number of universal credit applicants going through the roof. The report has proved beyond doubt that the Tories are profiting from this pandemic by handing lucrative contracts to their mates through the back door. A total lack of transparency and adequate documentation has been laid bare. At best, it is proof of a highly incompetent Government who cannot get the paperwork right. At worst, it is a deliberate attempt to cover the tracks of cronyism, to avoid scrutiny and to withhold information from the public.
Hundreds of contracts have been fast-tracked, and sources of referrals have gone undocumented. Documents are missing, and the pattern of suppliers being awarded contracts despite poor due-diligence ratings raises serious concerns around conflicts of interest and the lack of a proper process. The staggering report has exposed the fact that some contracts were awarded retrospectively after work had been carried out, including £3.2 million paid to Deloitte in July for work that it had been undertaking since March, jeopardising outcomes and accountability. Over £10 million-worth of covid contracts were awarded directly without any competitive tender process at all. One shameful example details the Department for Health and Social Care handing a contract for testing vials to the Secretary of State’s mate after a WhatsApp exchange, despite his having no experience whatever in medical supplies.
With all this evidence laid bare in black and white, can the Minister tell me how the public can have any trust that the Government are truly making decisions in our best interests? The revelations from the National Audit Office confirm once again that the Tories are happy to shell out millions to their mates, while the rest of us are told to tighten our belts as we are forced to pick up the tab for this pandemic. The sacrifices of working people in fighting this pandemic have been immense, serving communities and keeping the country going. The outsourcing clearly shows that the Government have no concern for their responsibilities or for getting value for money for the taxpayer, with outsourcing impacting on workers. As the Government hand out contracts to outsourcing firms, can the Minister tell me how they are ensuring that the workers are protected and treated fairly?
It is a pleasure to serve under your chairmanship, Ms Eagle. I thank my hon. Friend the Member for Liverpool, Walton (Dan Carden) for securing the debate.
For the vast majority of the country, this pandemic has been an utter misery. It has been eight long months of loneliness, hardship and bereavement. For a wealthy few, however, it has been something quite different. For them, it has been opportunity to cash in on connections, and, boy, have they cashed in. Take, for example, Conservative donor David Meller, who has donated more than £60,000 to the party in the past decade, including thousands to support the leadership bid of the right hon. Member for Surrey Heath (Michael Gove), who is now the Minister for the Cabinet Office—the Department that happens to be in charge of PPE procurement. Mr Meller’s company ordinarily specialises in home and beauty products, but has now been awarded more than £163 million in PPE contracts. That is nearly a tenfold increase on its entire 2019 turnover.
Such deals are far from isolated. A small, loss-making firm run by a Conservative councillor was handed a £156 million contract to import PPE. A company run by the former business associate of Conservative peer Baroness Mone was handed a £122 million in a PPE contract just seven weeks after it was set up. A deal to hand a private equity company a £252 million contract for face masks, which were never used, was brokered by a senior adviser to the International Trade Secretary, who also happens to sit on the board of the private equity company.
The National Audit Office report found that companies with political contacts were 10 times more likely to be handed contracts than those without such contacts. The newspapers describe these dealings as “chumocracy”, and they have also called it cronyism, but if it was happening in another country, they would call it by a different name. I will leave it to the imagination of Members present and our constituents as to what that name would be.
It is a pleasure to serve under your chairship, Ms Eagle, and I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on securing this vital debate. I would like to respond to the hon. Member for North East Derbyshire (Lee Rowley) by saying that many of us were not at the PAC 18 months ago because we were not in this place, and I am pleased to see so many of the new intake—at least seven of us—challenging the Government, as is our role.
The Select Committee on Public Administration and Constitutional Affairs, of which I am a member, has been looking at lessons learned from the covid response, including the appointment process of key figures in the UK’s response, and I was pleased that this point has been raised by Members. We found that there was a clear lack of due process, likely conflicts of interest, and potential cronyism. Lord Evans, chair of the Committee on Standards in Public Life, said only a couple of weeks ago during our inquiry that “urgent procedures” exist in times of urgent need, but added:
“Even if many of the people are exactly the right people, it is better if people know they are the right people because there has been proper, open competition.”
That is a key theme, whether those roles are paid or unpaid.
That theme has also come through in the NAO’s report, which is damning. It shows that contracts have been awarded without due diligence, with a lack of documentation, no clear audit trail or transparency. In some instances contracts were awarded retrospectively, for work already done. Hundreds of contracts have been fast-tracked for companies through the Cabinet Office’s VIP process, and while this may have been the same process as referred to earlier, many companies were referred by Ministers, officials, MPs and peers. The NAO found that firms in the VIP lane were far more likely to be awarded contracts than those that were not—a one in 10 chance, against a chance of approximately one in 100 for those outside the priority lane. That is disgraceful.
The sheer lack of due process has led to the waste of millions of pounds. I will not go through a list of the companies involved, because many have been mentioned already, but I just want to say that this angers me. In the public sector, we have many workers who have now faced 10 years of austerity, who cannot even justify getting Post-It notes from the store cupboard, yet this Government are mismanaging taxpayers’ money and are refusing to give public sector workers a pay rise. It is shameful.
It is a pleasure to serve under your chairship, Ms Eagle, and I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on securing this important debate. I will highlight the issue of scrubs, and ask the Minister to go back to the Department and sort out the national scrubs crisis, which is still carrying on and has not been addressed properly by the NAO report. However, that report is damning about procurement processes, and highlights a failure and mismanagement of the process for procurement contracts.
At the start of the crisis, there was a shortage of scrubs, and volunteers across the country jumped into action, including in the Minister’s own constituency, in Upminster. That is understandable: there was a short-term shortage of scrubs, which was met by amazing volunteers. However, why are those volunteers still there, having to fulfil contracts from hospitals that are saying they still have a shortage of scrubs all these months later? What is happening in the procurement process that means we are still facing this?
Putney Scrub Hub is an amazing place. The volunteers who run it are incredible, and their leader is an established leader in her field of producing scrub robes. She will not go back to work: she has taken time off until this scrubs crisis can be sorted out. She is fulfilling contracts from King’s College Hospital, Central Middlesex Hospital, the West London Kidney Patients Association, Royal Brompton Hospital and Northwick Park Hospital, as well as meeting the increasing need of vaccine clinics for scrubs. What is going on with procurement? In response to a written question, I was told that NHS Supply Chain is the main provider of scrubs, so I hope the Minister can go back and ask questions of NHS Supply Chain, to find out what is going wrong. The NHS Supply Chain hotel services tower has not put out any tenders for new contracts in the past 12 months, so who are these 14 suppliers who have the contracts? Why are they not stepping up to the plate? Why are hospital staff phoning up and finding out that there is a three-month delay in getting scrubs?
Back at the hospitals and clinics, there are shortages. This means that NHS staff have to go home, or are being told to bring in tracksuits, which is very damaging to morale. Will NHS Supply Chain meet with the leader of Putney Scrub Hub to talk about what the problems are with the procurement chains? Why are there billions of pounds’ worth of contracts on one side, yet our NHS staff do not have their scrubs? Will we enable the Putney Scrub Hub volunteers to at last put down their scissors and go home?
It is a pleasure to see you in the Chair, Ms Eagle. As one of the people who originally asked the NAO to look into the handling of PPE contracts, I was of course extremely interested in what its report had to say. I asked for that because throughout the summer, suppliers contacted me as they were angry about being overlooked, especially given that they had put in many hours of work to get some of the contracts. Their anger turned to rage when they saw that some of the companies to which contracts had been awarded had no background in PPE and sometimes no background as a company at all. In fact, their chief qualification was a connection to the Tory party.
How did we get into that position in the first place? Of course, there was unprecedented demand, but it seems that the Government failed to heed their own warnings about the readiness of this country to deal with a pandemic. They ignored the recommendations of Exercise Cygnus and allowed the PPE stockpile that we did have to go out of date and dwindle—a dwindling stockpile, by the way, that we were paying a private company £11 million a year to sit on.
The way in which warnings were ignored created the conditions for the get-rich-quick specialists to thrive and for the taxpayer to foot the bill for overpriced PPE from people who had never sold as much as a pair of gloves the previous year. At the same time, companies with the contacts, experience and even the stock were given the run-around, so we had the scandal of doctors and nurses bringing homemade PPE to protect themselves, while British companies were selling their stock abroad because they could not get their own Government to take an interest in it. We then saw the absurd spectacle of a Secretary of State proclaiming on national television that help was on the way with a shipment of PPE from Turkey, most of which never arrived or turned out to be unusable. That was an international embarrassment that we must never let happen again.
When the Minister responds, will she set out exactly how many millions of items of PPE that were purchased either never showed up or were found to be unusable? Will she tell us how much of that has already been paid for and whether we have received any refunds? So far, I have not heard any contrition from the Government about the way in which procurement has been handled, and we need to hear some today, because the public will not forget the arrogance until long after the last person has been vaccinated.
It is a pleasure to serve under your chairmanship, Ms Eagle. I add my own words of congratulations to the hon. Member for Liverpool, Walton (Dan Carden) for securing the debate. In his opening remarks, he did an absolutely excellent job of dissecting the morass of contracts that have risen to public attention for all the wrong reasons and do not, on any objective measure, pass the sniff test.
We have heard much about what the report does tell us, so before the Minister responds, let us be absolutely clear about what the NAO says the report does not tell us. Page 44 of the NAO report states:
“This report should not be considered as offering positive assurance over aspects of any of these contracts which are not detailed in the report, or as offering any legal opinion on the use of public procurement regulations… We have not drawn any conclusions regarding the value for money of the procurement”.
The report was drawn up on the basis of a risk-based examination of 20 contracts, which are a fraction of the 8,600 new contracts that had been awarded by 31 July. To be clear, there is absolutely nothing wrong with taking that risk-based approach. That core analysis is done to find what issues emerge, and my goodness, what issues have emerged. It seems that the NAO knew exactly where it should be sticking its spade in the ground when it started this work.
Of those new contracts, £0.7 billion-worth were awarded through contract extensions; £0.2 billion-worth through competitive tendering; and £6.7 billion-worth through existing framework call-offs. Those contracts are not the ones that should cause anyone any particular concern. Rather, scrutiny should rightly focus on the £10.5 billion-worth of contracts that were direct awards with no competition.
Obviously, the Government have to have the ability to give direct contract awards in situations of extreme urgency, as the law allows. Rightly, however, strict conditions are attached to that. I do not think that anyone would disagree that those conditions are likely to have been met in the very early weeks of the crisis, but what came thereafter is an entirely different question. Within those contracts, whenever they were awarded, it is important to be able to get a sense of what was proportionate, where conflicts of interest may have arisen, how those conflicts of interest were managed, what steps were taken to mitigate the risks and how value for money was ensured as far as possible. All too often, as the report highlights, inadequate records were kept, which means that transparency has been diminished and, in many cases, it is not possible to demonstrate how particular decisions were reached and why.
I accept that, in cases of urgency, sometimes processes need to be circumvented. The law allows for that. Certain corners will be cut; certain niceties might be overlooked. The fact that this took place does not overshadow the many genuine efforts of Government employees to procure swiftly under conditions of urgency and great difficulty, but the importance of record keeping is absolutely key to maintaining transparency, so that we know that the right decisions were taken for the right reasons. The fact that the Government are still citing the need to procure with extreme urgency as a reason for persisting with this method of procurement, even after the summer, does not wash at all.
As we have heard, there are serious public concerns about certain contracts that were awarded. In some cases, those who were awarded the contracts were unable to fulfil them either at a reasonable price or to the required level of quality. In some cases, those who won them already enjoyed a closeness with the Government and some members of the Government, which was inappropriate at best.
It is remarkable that people with no experience of manufacturing, who were simply acting as middle men looking for a slice, could find themselves in a priority queue for consideration. The fact that there was a priority queue is a matter for concern. Although both lanes were supposed to be using the same gateway and scrutiny process, a stark set of numbers emerge from that analysis: 47 out of 493 contracts, or 9.5%, of those in the priority lane went on to secure a contract award, compared with only 104 out of 14,892, or less than 0.75%, of those in the normal lane.
Many contracts were awarded without any kind of financial due diligence being undertaken on the companies. In some cases, due diligence was done after the awards were given and came back as an amber or red condition. I accept that in times of urgency one may need to press on and take the chance. However, the further one goes into the process, the less justifiable it is to take that risk. To do financial due diligence in that way on contracts worth not only tens of millions of pounds, but in excess of £100 million, is a bit like going bungee jumping and only worrying about whether the cord is attached after embarking on the journey downwards. Frankly, it is beyond belief that this was allowed to happen.
The differentiation between the lanes was not based on evidence of any ability to deliver, nor was the aim to speed up the procurement process; it was preferential access, pure and simple. I was not the first Member to refer to suspicions of a crony virus working in Government, but the suspicion lingers. For too long, too many people too close to the centre of Government have won too many contracts, of which too few are properly documented or can demonstrate adequate value for money.
On 15 March, the Health Secretary said:
“Our approach to tackling coronavirus is to be as clear and transparent as possible—because all that matters is getting this response right ”.
In her summing up, the Minister will no doubt seek virtue in the fact that the Government were, in their own eyes, getting on with the job at an incredibly difficult time in a global pandemic. We must be clear: if that is the defence mustered for the content of this report, it is an excuse that is beginning to run on empty. The report stated:
“This has diminished public transparency, and the lack of adequate documentation means we cannot give assurance that government has adequately mitigated the increased risks arising from emergency procurement or applied appropriate commercial practices in all cases. While we recognise that these were exceptional circumstances, there are standards that the public sector will always need to apply if it is to maintain public trust.”
There is an urgent need for openness in these processes so that the public can maintain their trust in them and trust can be restored in the Government’s approach. That is why today I repeat the SNP’s call for a full public inquiry into the awarding of tenders and into those who had access to UK Government meetings preparatory to procurement awards throughout the health emergency. The Government absolutely must also accept unreservedly, without any qualification and in full, the recommendations made in the National Audit Office report. If they are to escape the suggestion that they have been allowing preferential access and enrichment to a select few under the cover of an unprecedented emergency, they can really do no less than that.
It is a pleasure to see you in the Chair, Ms Eagle. I congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) on securing this important debate. The National Audit Office investigation into Government procurement during the covid-19 pandemic reveals a series of calamitous errors in how decisions were made and taxpayers’ money was wasted. It is imperative that Members have the opportunity to debate its findings.
I am grateful to all hon. Members who have spoken in the debate. Many important points were made. Time does not permit me to mention every contribution, but I will highlight my hon. Friend the Member for Hemsworth (Jon Trickett), who rightly raised the Carillion procurement scandal and asked why lessons do not seem to have been learned. My hon. Friend the Member for Nottingham East (Nadia Whittome) spoke from her direct experience of the consequences of procurement failure for social care staff working on the frontline. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) gave the powerful example of Arco, a world-leading PPE supplier in her constituency that was ignored by the Government. My hon. Friend the Member for Putney (Fleur Anderson) raised her important work highlighting the ongoing national scrubs crisis.
The Opposition recognise that, when faced with a national emergency on the scale of the global covid-19 pandemic, the Government needed to act quickly to procure goods and services, but the National Audit Office found that, even allowing for accelerated processes, proper checks and controls were not carried out. The report states that
“procurement processes established by the cross-government PPE team enabled PPE to be purchased quickly, but some procurements were carried out before all key controls were put in place.”
Seventy-one contracts, with a total value of £1.5 billion, were awarded to suppliers before proper company checks were put in place. Even worse, some contracts were awarded only after the work had been completed, significantly increasing the risk of budget overspend and poor performance, and more than half of the £17.3 billion awarded to suppliers was awarded directly with no competition.
The report highlights the Government’s failure to set out clearly why they chose a particular supplier or how risks from a lack of competition were identified and mitigated. The National Audit Office highlighted that that was critical
“to ensure public trust in the fairness of the procurement process.”
It is clear that public confidence has been hugely damaged by this debacle.
We have contracts awarded without key controls, awarded sometimes after the work had already been completed, and often with no competition and without adequate documentation. On top of that, we find that the Government again and again awarded contracts not to trusted long-term suppliers of PPE with a track record of delivery but to companies with strong links to friends and donors of the Tory party—chaos facilitating cronyism.
With the huge gaps in transparency and company checks identified by the National Audit Office, the Government have serious questions to answer about the back door VIP special procurement route. How did it operate? Who had access? What weight was given to the individual making a referral through the route in the award of a contract? How many contracts were awarded through the VIP route without competition, company checks or adequate justification?
Reputable British firms with a track record of delivery who wanted to help at a time of desperate need such as Seren Plus—a long-term supplier of PPE to the NHS—were left to watch incredulously as inexperienced firms failed to deliver. Ayanda Capital received £156 million for PPE that could not be used. PestFix, with barely any money in the bank and no track record of providing PPE, received £160 million of taxpayers’ money, and the Health Secretary’s pub landlord received £30 million to provide vials, despite no track record in providing medical supplies.
The real bottom line in all this is that frontline staff in our national health service and social care, putting their lives on the line every single day and in desperate need of protection, did not receive the PPE they needed for weeks and weeks. We watched the heartbreaking footage of social care workers with no protection, hospital staff reusing masks and gowns, while the Government flushed millions of pounds of taxpayers’ money down the drain, employing firms with no track record, which unsurprisingly proved unable to deliver.
With procurement happening so quickly under emergency measures, the Government should have been creating more transparency, opening up to greater scrutiny, so that the public could have confidence in the pandemic response. Instead, the opposite appears to be the case. Again and again, the Government shrugged their shoulders at revelations of crony contracts and failed to make any commitment—
The hon. Lady is making a very serious allegation when she talks about cronyism, implying corruption. On the basis that the NAO report found no evidence that Ministers were involved in procurement decisions, at whom is she directing those allegations?
I thank the hon. Gentleman, my former colleague on the Select Committee, for his intervention. Cronyism and corruption are different in law. I am talking about cronyism. The important point that was made by the National Audit Office and reiterated in the debate today is that, when the Government have a scenario where normal rules are bypassed because of an emergency, it is incumbent on the Government to have absolute transparency on connections, conflicts of interest, routes taken and the reasons for decisions being made. I am sorry to tell the hon. Gentleman that the NAO has found the Government wanting. What is lacking from the Government is appropriate contrition and an appropriately transparent response to those allegations that the NAO has made.
I agree with my hon. Friend’s point. I repeat: with procurement happening so quickly, under emergency measures, the Government should have been creating more transparency, opening up to greater scrutiny, so that the public could have confidence in the pandemic response. Instead, the opposite appears to be the case. Again and again, the Government shrugged their shoulders at revelations of crony contracts and failed to make any commitment even to publish a full list of the companies awarded contracts under the VIP route.
I ask the Minister to answer the following questions in responding to this debate. When will the Government publish a full list of all the companies awarded contracts under the VIP route? Will she explain why the Government again and again failed to meet the requirement to publish contract awards within a timely manner during the pandemic? That was an obligation that was not relaxed by the emergency legislation. Will she explain why trusted British firms were bypassed in favour of companies with no track record of delivery? Will she commit to a full investigation of the extent of cronyism in procurement throughout the pandemic? Most importantly, will she set out what the Government now intend to do to rebuild the trust and confidence of the British public and British businesses in their broken approach to procurement?
It is a pleasure to serve under your chairmanship, Ms Eagle. I thank the hon. Member for Liverpool, Walton (Dan Carden) for tabling an incredibly important debate, and all those making contributions today. I am also grateful to the NAO for the report. The care with which we spend taxpayers’ money matters very deeply to public confidence in Government.
I do not wish this morning to present a carefully constructed political argument that seeks to dismiss the concerns that have been raised. I want instead to be candid about the challenges the Government had to navigate at the height of the pandemic, provide some context to the NAO’s report, and set out what went well and what undoubtedly could have been done better in the period it focuses on, between January and July.
I was on maternity leave at the height of the pandemic and only began my ministerial role in the Cabinet Office in June. As I took on that role, I confess I shared some of the concerns that have been raised with me in the House about the cost and the circumstances of particular procurements. I wanted to assure myself of what had happened and to get a sense of the full story. Today, I hope to share some of that and to be as transparent as possible, but as I do so, I ask hon. Members to keep three broad points in mind.
First, it is very important to recognise the sheer volume of procurement activity in response to this national health emergency. By 31 July, more than 8,600 contracts worth £18 billion had successfully been awarded, some 90% by the Department of Health and Social Care in value terms. That compares with 174 contracts worth £1.1 billion awarded by that Department last year. In other words, there was a colossal upscaling of effort to take this country through this crisis. Of those contracts, the NAO’s report examined just 20. It obviously focused on the contracts that attracted most public interest.
Secondly, due to time pressures, I am afraid I will be unable to address all the comments. I will focus my contribution on the areas looked into by the NAO report. Finally, although it has become a political cliché to say that we have to learn the lessons from particular events, in this case it is especially important that we learn the right lessons. It might make for a snappy headline or an eye-catching political campaign to suggest that the story of procurement during the crisis has been one of Tory corruption, but it behoves us all to understand what really happened, so we do not overlook what needs to change.
At the height of the crisis in April, as the NAO described in its report, health services across the world faced an unprecedented situation where demand for PPE and other medical products far exceeded supply. Faced with these exceptional levels of global demand, the usual vendors in China who service the central procurement function of the NHS very quickly ran out of supply and the world descended on a few factories in that country to bid for available items. In that market context, the Government needed to procure with extreme urgency, often through direct award of contracts, or we risked missing out on vital supplies. It is here that I would like to address the first of several criticisms being repeated here today: that the Government ripped up procurement rules. That is simply not true.
Regulation 32(2)(c) of the Public Contracts Regulations 2015, which predate the pandemic, explicitly allows for emergency procedures, including direct award. No rules were suspended, relaxed or changed. This was just a case of using existing legally compliant regulations for the purpose for which they were intended. Similar approaches were taken by countries such as Japan, New Zealand and Finland.
In a situation of genuine crisis and extreme emergency, when we had to accept or reject offers in a matter of hours or days, it was simply not viable to run the usual procurement timescales, even if we took advantage of accelerated processes, which still require a minimum of 25 days. Hon. Members will recall that everybody in this House was saying, “Get hold of the kit,” including the Leader of the Opposition.
Nor is it the case that the Government cast aside value-for-money considerations. All offers went through the same eight stage assessment process, and where full competitions for PPE were not possible because of time pressures, we examined prices against a rolling benchmark of prices to protect the taxpayer from mispricing. That is not to say that prices were not higher across the board. It was a massively overheated spot market. Product was often going for more than five times the normal price, and that was made worse by the appearance of opportunistic middlemen, who appeared and started to put down deposits on product, then reselling it for very high handling fees.
Of course, the Government would not normally pay those kinds of fees, but procurement teams were left with some very difficult choices. Either we bought the product, as was rightly and vociferously demanded, or we did not get hold of it for the NHS.
This situation was further complicated by what was going on internally, and that is what I mean when I say we have to make sure we learn the right lessons, particularly about the challenges within our own systems. Some 450 people from across government were moved into the DHSC to become a stand-up virtual team to urgently assist with securing PPE. That team is normally only 21 people-strong. In many ways, getting that number of people together was a great feat, but it also meant that there were a lot of people who did not know each other, all working remotely suddenly from home, on a range of different IT systems, with suppliers they did not know, on product with which they were not familiar, in the most highly pressured market of their careers. That was not an easy operating context.
As concern grew about the level of PPE that might be required to deal with the challenge of covid, the Prime Minister put out a call to action, which I am sure hon. Members will all recall. With great commitment and energy, the British public and the business community responded, but that meant that, in very short order, commercial teams were dealing with more than 15,000 offers of help. Frankly, leads were coming in faster than they could be processed, and when they were rejected or if they were delayed, people started chasing through their MPs. I am sure that many of us in this room experienced that.
In order to manage the influx of offers, a separate mailbox was set up to handle this area of work. That is the oft-cited high-priority lane, which the Opposition have sought to portray as much more sinister than it actually was. Far from being a secret referrals lane, that mailbox was in part a triage for directing more credible leads, and in part an engagement communication tool for managing some of the correspondence that was coming from parliamentarians of all colours, including Opposition MPs and peers. As the NAO said, it was right that we sifted the credible PPE offers from the others. The most important thing to note, as the NAO does in its report, is that all PPE offers, no matter where they came from, went through the same eight-stage check, so there was no special treatment for friends of Ministers.
There has been excitable public commentary, which has been repeated here today, and claims that people were 10 times more likely to get through if they had Tory friends. If anything, the fact that that mailbox had a higher conversation rate demonstrates that the initial triage process was working, as those leads were often more credible and proved fruitful once they had gone through the due diligence process. Even so, it is important to note that, of the 493 offers that came through the priority mailbox, only 47 were taken forward. In other words, 90% were rejected. Indeed, more than 20,000 individual product offers were rejected between the end of March and mid-June because of the robust due diligence processes that had been put in place by our commercial teams.
A number of Members have referred to companies that missed out, and a number of vocal companies have gone on television to say that they do not understand why they missed out. The Government do not have a right to reply in those circumstance, because if we were to set out publicly why that company did not secure a contract, we would be betraying commercial confidences.
The existence of the separate mailbox has added fuel to the fire for those accusing the Government of chumocracy, but if they have read the NAO’s report they should have noticed the conclusion, which has been mentioned by other hon. Members and states that
“ministers had properly declared their interests, and we found no evidence of their involvement in procurement decisions or contract management.”
Our own internal audit on PPE has not found any conflicts either, and we have been searching for them.
I am afraid I am really short of time. Forgive me; I want to get through the content.
As I say, no PPE contracts were awarded by reason of who referred them. I remind colleagues that, ultimately, there was very little waste. Of all the product in question, so far only 0.5% of what was ordered was found to be unusable. That is not to say that we cannot improve. Admittedly, there was not an adequate stockpile, and the lack of a central stock control system made it very difficult to get a clear grip of the demand signals coming in through the NHS. That is an extremely important issue to rectify.
I am so sorry; I would really like to make progress.
We have also had to rapidly address a strategic over-reliance on China. We have now built up our national capability and resilience, with the potential for 70% of PPE to be produced in the UK. I hope that those lasting national enhancements will be bolstered by the work of the Department for International Trade’s Project Defend, which is looking at other areas where we are critically dependent on other countries for important parts of our manufacturing.
The NAO was absolutely right to identify delays in publishing documentation in relation to emergency procurement. The sheer pace of activity meant that documentation was not perfect. The result is that contracts have not been published online as quickly as they should have been, and it has been left to DHSC to piece together relevant paperwork from the different IT systems, partly because of the large team that had to be brought in from outside DHSC. I very much regret that that lag in our normal transparency timescale has created a sense of mistrust, but we are nearly there. At the time that the NAO did its scrutiny work, only 50% of required contract notices had been published. As of 3 December, it is now 96% of PPE contract award notices on Tenders Electronic Daily, which is the European journal, and 94% on Contracts Finder.
I have concentrated today on PPE, as that is a large focus of the NAO’s two most recent reports. However, the NAO also looked at communications contracts, which the hon. Member for Liverpool, Walton referred to, so I would like to spend a moment on that. For context, a number of external research agencies were engaged by the Cabinet Office’s comms unit to test the public reaction to Government messaging on public health. That was crucial to helping us understand people’s attitudes and behaviours during this time and refine public health messaging accordingly to drive behavioural change.
At the time I began my ministerial role, there were reports suggesting that some of those contracts for comms services had been improperly let, and naturally I was unhappy to hear that. Unfortunately, I cannot comment in detail on the specifics of those contracts because the Department is still working on a detailed defence and disclosure in the ongoing judicial review proceedings. However, I can say that following a preliminary internal fact-finding exercise, the Cabinet Office resolved to delve into that properly and commissioned an independent expert review, led by Nigel Boardman, who sits in the Department for Business, Energy and Industrial Strategy and is also a well-respected legal professional, to consider those findings and set out how we could improve, particularly looking at the processes and guidance that teams in the Cabinet Office have access to. The review and its results were published yesterday on gov.uk. The report is forensic in its analysis and hard-hitting in its recommendations. I am pleased to tell colleagues that we will take forward all 28 recommendations in full.
Before I close, I want to say a little about the wider civil service reforms that we are proactively pursuing to address some of the concerns beyond the NAO report. During this time of crisis, people have been concerned about the use of consultants. We are looking at how we can better skill-up civil servants, reduce our reliance on consultancy, and potentially have our own in-house consultancy. We are also consolidating the number of IT systems used across the civil service so that it is easier to move people around internally at speed, and for those systems to be compatible. As has been referenced, we will soon launch our procurement Green Paper. I very much encourage all hon. Members to engage with the consultation process, because once we leave the transition period our country will have an extremely important opportunity to look at these issues.
The proposals have long been in development and will include specific measures to strengthen transparency, making sure that we can have a choice of direct award and more competitive tendering during crises. At the moment it seems that we have either the full-fat procurement, which is much too slow in emergency situations, or direct awards, which lead to the kinds of concerns that we have debated this morning. I know that the hon. Member for Liverpool, Walton is particularly concerned about issues of company conduct in procurement. The Green Paper will include proposals to use exclusion rules to tackle unacceptable supplier behaviour, such as tax evasion, embedding transparency by default and developing faster review methods to speed up the court process on legal challenges to genuinely improper procurements.
There is a lot to say, so I am sorry to rush through it all, but I will end by saying that the public are absolutely right to demand that we spend their money with care. I hope the proactive and candid approach that I have set out this morning is reassuring. I remind colleagues that we were procuring for a purpose, and that purpose was to get us through the pandemic. We achieved sufficient PPE for the NHS. We now have 32 billion items of PPE, with no reports of outages, and we have established a four-month stockpile of PPE from November 2020 onwards. Given the extraordinary context, that is an extraordinary feat.
Finally, I pay tribute to civil service colleagues in the commercial function. They might not be on the frontline of the NHS, but they have done extraordinary things in a very difficult operating context. I thank them for all the work that they have done.
Thank you, Ms Eagle, for chairing the proceedings, and I also thank colleagues across the House for their contributions. I do not think the issue will disappear. Too many millions of people have faced financial hardship and difficult circumstances over this past year, so there is anger out there among the public over what is seen as a chumocracy, cronyism or whatever we want to call it. We know that huge sums have been handed to close contacts of the Conservative party. Although I welcome the Minister’s reply and how she engaged with all the issues, she was not able to explain away the privileged access given to friends and chums of the Conservative party. Following this debate, we need a full public inquiry into covid contracts.
Question put and agreed to.
That this House has considered the NAO report on Investigation into government procurement during the covid-19 pandemic.
Disabled Children: Accessible and Inclusive Education
I beg to move,
That this House has considered accessible and inclusive education for disabled children.
It is an absolute honour to present this motion with you in the Chair, Ms Eagle. I thank a number of organisations for their hard work on the issue of disability inclusion in education, including the Disabled Children’s Partnership, Sense, Scope, Mencap, the Alliance for Inclusive Education and the One-Handed Musical Instrument Trust, to name but a few. I have been asked to raise these issues with the Government in my capacity as chair of the all-party parliamentary group for disability. I pay tribute to the work of the hon. Member for Sheffield, Hallam (Olivia Blake), who chairs the all-party parliamentary group for special educational needs and disabilities.
Children with disabilities have often been most affected by the coronavirus pandemic. In terms of immediate impact, people with disabilities have accounted for six out of 10 deaths involving covid-19, while Mencap’s social care survey has shown that seven out of 10 people with a learning disability have had their social care provision reduced as a result of the pandemic.
Looking at long-term consequences, the Centre for Mental Health estimates that 1.5 million children will need mental health support for conditions such as depression, anxiety and post-traumatic stress disorder as a result of the pandemic. The NHS’s digital report anticipates a 50% increase in mental health problems for children and young people as a result of the pandemic.
When we account for the heightened immediate impact of covid-19 on children with disabilities, coupled with the mental health consequences predicted for young people, it quickly becomes apparent that the wellbeing and inclusion of children with special educational needs and disabilities must be prioritised. That is why I secured the debate today.
One of UNICEF’s seven principles of quality education is disability inclusion. The presumption that children with disabilities would be welcome in mainstream education was first introduced into law in the Education Act 1996 and expanded in the Children and Families Act 2014. That Act also enshrined into law disabled children’s rights to special educational needs provision and, where necessary, the provision of education, health and care assessments to establish what adjustments a child with special educational needs might have, and how best to facilitate their integration into mainstream educational facilities.
I congratulate the hon. Lady on securing the debate. I am aware of this issue in my constituency and it is important to address it. Does she agree that education by Zoom, which many people have had to do recently, does not achieve the best results for some sensorially-impacted children? That underlines the importance of face-to-face teaching, where it is safe to do so. I understand the circumstances, but that is not the most suitable option for people with disabilities or those who are sensorially disadvantaged.
I absolutely agree with the hon. Gentleman. That is an excellent point and it was well made. Children with disabilities have often lost out on educational provision because the format has moved almost wholeheartedly on to Zoom and the internet. I have been contacted by many families who have children with autism, who do not particularly like that format and will not engage with it, and by families who have children with sensory impairments, who cannot receive the adaptations in time to use the format at all. That has led to children with disabilities being disproportionately affected by the pandemic.
I am grateful to the hon. Lady for securing the debate. I want to raise the issue of access to education for disabled children. They cannot access education if they cannot get there, and, despite personal transport budgets, the school transport system is limited. I have a case where only 50% of a constituent’s costs are covered. Is it not right that we ensure that local authorities have sufficient provision to enable all children to access education?
Absolutely. The hon. Lady makes an extremely important point, which is echoed by my experience in my constituency. I have been contacted by a number of families. Local authority provision means that a young child with autism, who does not like close physical contact, has had to travel for hours in a taxi with individuals to whom he is not accustomed. That has caused behavioural issues and really impacted on his education. It is incumbent on us as legislators to make sure that those who are most vulnerable have access through local authorities to the provision that they need to meet their educational and care needs, and that takes account of their sensory, development or learning difficulties. I thank the hon. Lady for making that point.
Provision of inclusive education was greeted with absolute optimism by those who had long campaigned for it. Unfortunately, however, many aims have been left unfulfilled. There are gaps in support and a need for additional funding, as I have highlighted. Another issue that must be addressed is specialist professionals providing support for children with disabilities. As with so many underlying issues in our society, covid-19 has shone an additional light on the many challenges and barriers that children with special educational needs face in their everyday lives. It has exacerbated them, as I have explained.
Before the pandemic, the Disabled Children’s Partnership identified a £1.5 billion funding gap in health, social care and education, which would need to be filled to adequately support disabled children and their families. Sense has also noted that the gradual erosion of specialist support available to disabled children has significantly hampered the ability of the school system to provide accessible and inclusive education. There is an ever-decreasing number of teachers for the deaf, the visually impaired and those with multi-sensory impairment. Will the Minister comment on that provision and funding, and outline a plan to meet the needs of children and families? The lack of provision not only hampers participation; it also means that education, health and care needs assessments often lack input from an education specialist, such as an educational psychologist—I declare an interest and refer to the Register of Members’ Financial Interests. Appropriate adjustments in the classroom can also be missed.
Since the start of the pandemic, many parents of children with special needs have done their absolute best to educate them from home. We should celebrate the introduction of tools to help them, such as Freeview’s accessible TV guide, which has helped facilitate remote learning through making programmes such as “Newsround”, “Bitesize Daily” and “Horrible Histories” accessible in a range of formats during the pandemic. However, a lack of specialist equipment and broader resources for parents has meant that many now fear that their children’s education has suffered disproportionately. Parents have struggled to cope.
Despite schools returning full time, the Disabled Children’s Partnership has found that 24% of children with disabilities have not yet returned to school full time. Many are being taught on part-time timetables due to health and safety concerns, making their needs all the more immediate. The return to school has been particularly challenging for pupils with tracheostomies and those with aerosol-generating procedures, as delayed Government advice, finally published on 13 November, left many families feeling in limbo for months. Furthermore, the Coronavirus Act 2020 suspended a number of key provisions in the Children and Families Act 2014, which has meant that 31% of children with disabilities are still waiting for key therapies to be restarted. Some 51% of those waiting for an assessment for an education, health and care plan have been waiting more than six months, which is entirely unacceptable for families who are struggling to provide the care that is so necessary for their children.
With that in mind, I implore the Minister on behalf of children with disabilities and the all-party parliamentary group for disability to do everything in her power to ensure that children with disabilities are able to return to specialist and mainstream education as soon as is safely possible. I also ask that she ensure that provisions in the Children and Families Act 2014, which are key to ensuring disability inclusion in the classroom, are resumed without delay.
There is increasing anxiety among many qualified health professionals and therapists who work in schools—and who are absolutely key to disability inclusion in the classroom—that they might be redeployed to hospitals and health services in the coming months. That could be incredibly detrimental to the learning of children with special educational needs. I therefore ask the Minister to ensure that medical support for children with disabilities is maintained out of this pandemic, and that continuity of care for children with special educational needs in the classroom is protected.
I have been contacted by the OHMI Trust, which undertakes truly innovative work adapting musical instruments for children with special educational needs, to highlight the importance of music as a key element in inclusive education. To this day, this is often denied to children with special educational needs due to lack of awareness among music teachers or tuition providers, or a lack of specialist equipment that has been tailored to a child’s particular disability or needs. Music can provide an opportunity for socialisation and creativity, and has also been linked to improved academic achievement. I would welcome a comment from the Minister about ensuring that music is not omitted from any efforts to include children with disabilities going forward, and to work collegiately with the OHMI Trust to develop specialist instruments for children across the United Kingdom who have special educational needs.
Before I finish, I will touch on further education for those with special educational needs, and particularly the case of Mr Gary Copland from my constituency. A student at the University of Glasgow, Gary is in his mid-20s, has been registered blind since birth and has autism. He is currently studying for a bachelor of law. Gary was forced to go part time due to poor levels of support, and is now in his fifth year. In his first year, he was given only one course text adapted for his disability, five days before the end of term. In his second year, he had only four textbooks, leaving him to write all essays and take exams from memory. He has had no working IT for over 43 weeks, leaving him unable to graduate with everyone else in his year. The whole family is suffering from trauma as a result of these issues, and Gary has lost 30 kg and is now medicated for depression. I ask the Minister to speak with universities to look at these issues, Gary’s in particular—perhaps the Equality and Human Rights Commission could review this particular case.
Finally, I would welcome a statement or response from the Minister on the Government’s funding plans for disability-inclusive education. In 2019, a review of special educational needs criteria and practice was promised, but this publication has been delayed. It would be remiss of me, therefore, not press the Government for a date or timeline for publication. Despite the current circumstances, it is an absolute priority. It would also be helpful to have an update on autism assessments and the progress the Government are making, because many families tell me that they cannot receive the support required for children who have autistic spectrum disorder in school, or at home, because they are still struggling to get assessments.
I am grateful to the hon. Member for mentioning autism, because currently it is very much viewed through a medical model, so people are unable to access the support they need until they have a diagnosis. Does she agree that we need to look at this through a much more social model, in order to ensure early intervention support for parents, as well as for young people?
Absolutely, that is crucial. Getting earlier assessment, intervention, and support, even if a diagnosis is taking a long time, is crucial to help and support children and families to cope. That really must be addressed, and all too often children and families who are awaiting diagnosis have no support in the interim, which is really a failure of the system for those who are most vulnerable.
Lastly, speaking from my background as a psychologist, I believe that disability has to be at the heart of Government’s response to the mental health concomitants of the pandemic among young people. Children with disabilities are far more likely to have been isolated during the last eight months, to have seen disruption to their care and treatment, and because of the difficulties of adapting to home learning they are at increased risk of seeing their academic progress fall apart and fall behind that of their peers. We must do everything we can to support, include and cherish every single child with special educational needs across the United Kingdom. That is the aim of the all-party parliamentary group on disability, because we know that these children have so much potential and so much to offer their families, the community and society at large.
It is a great pleasure to serve with you in the chair, Ms Eagle, and good morning.
I congratulate the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) on securing a debate on this important subject. Let me start by stressing that we want all children and young people, no matter what their special educational need or disability is, to have the ability to reach their full potential and to receive the right support to succeed in their education, and as they move into adult life. The ambition is for every child, no matter what challenges they face, to have access to world-class education—an education that sets them up for life. If education is to be accessible and inclusive, it must also be world-class, which is why we have increased the high needs budget by £1.5 billion, or nearly a quarter, over a two-year period. I am also pleased to report that at the beginning of this month 80% of children with education, health and care plans were back in schools in England.
Ofsted’s regulatory inspections have been recently updated, and Ofsted is explicit in its inspection framework that all schools need to have an inclusive environment that meets the needs of all pupils. In addition, the cross-Government SEND review is looking at the reasons for the increased demand by parents for places in special schools that we have seen over recent years, and one of the review’s aims is to identify ways to strengthen the role of mainstream schools in SEND, by having faster access to extra help where needed.
In 2014, the legislation that we introduced on SEND made it clear that where a child has complex needs, and their parent or the young person themselves wants a mainstream placement, they can express that preference, and local authorities are then under a qualified duty to ensure that preferences for mainstream placement are met wherever possible. However, there are some circumstances where a child’s special educational needs may be best met through specialist provision, and it is absolutely right that parents should have that choice of being able to access places for a child with complex SEND at mainstream or special schools, depending on the child’s individual needs.
Throughout the pandemic, I have had the great pleasure of meeting—often virtually—mainstream and special school leaders up and down the country, and hearing from them about how they are have risen to the challenges of providing education during the outbreak. I really thank all of those staff, headteachers and children who have spoken to me. I am currently on a virtual tour of special schools in tier 3 areas, so I thank everybody who has spoken to me during that. I particularly thank the staff, children and young people from Thriftwood School and College, which is in my constituency, for talking to me as I sat in their playground—in a socially distanced way—about how much being back at school has made a difference to their lives. It has been an absolute privilege to talk to all of those children and teachers.
I am proud of the SEND system in England. There are plenty of things about it that can and must be improved, but fundamentally it is a good system based on the well-supported principles of co-production with children and young people themselves and with their carers, and a focus on the whole child and their education, health and care, as well as a focus on life outcomes, backed up by strong protections of the rights of parents.
We should all acknowledge that life for many families raising children with SEND was already hard before the pandemic came, but then they faced the extra challenges of lockdown and coronavirus. It has been a high priority for me and the Government to put children and young people with SEND and vulnerable children at the heart of our response. That is why I have spoken to many parent carers directly on many occasions and regularly written open letters to them and those working closely with SEND children to let them know what we have done to support them and what they should be expecting from the services on the ground.
Throughout the pandemic, we asked schools to stay open to pupils with EHC plans, where it was safe to do so. I am really proud that, even at the peak of the pandemic in the spring, we were one of very few countries in the world to keep schools and colleges and early years open for vulnerable children. As the hon. Member for Strangford (Jim Shannon) said, keeping those schools and colleges open is critical for children’s wellbeing, as well as for their education. Since September, our priority has been ensuring that those children and young people have returned to college. It has been challenging for certain groups, such as the small number of children who need aerosol-generating procedures, but I am very glad to hear the vast majority of them are now back in school.
We have published detailed guidance throughout this time to schools and colleges, specialist settings, residential special schools and many others to support the return and to support their safety, but we do not underestimate the challenge that this represents. We know that special education settings may face even greater challenges, which is why we work so closely with them.
Our £1 billion covid catch-up package includes £650 million to support schools for lost teaching time, and there is an additional weighting for special schools, which get three times as much as a mainstream school. Headteachers can decide how to use that. They could be spending it on educational psychologists, speech and language therapy or other activities to support children.
We recognise the importance of respite for families with disabled children and young people themselves. We reaffirmed that message and legislated to allow a wide range of respite services to continue, including in the family home. We encourage local authorities to prioritise that support.
There may be circumstances where a child is not able to attend school due to coronavirus—for example, if they are self-isolating—and that is why we have made it clear that schools have a duty, in line with the guidance and the law, to provide remote education for state-funded school-aged children who are unable to attend a school due to coronavirus. We have also reviewed the remote education guidance. Schools should always work collaboratively with families to put in place adjustments to enable pupils with SEND to successfully access remote education alongside their peers.
I raised the issue of transport into schools, which comes out of local authority budgets. I have a constituent who currently is not in school because they need specialist transport and cannot travel with others, and the parents are having to pay for 50% of that travel. Will the Minister go back and look at the issue of children being unable to access school because of the insufficiency in the transport budget for local authorities?
The hon. Lady makes an important point. Of course, we have given local authorities additional funding during this period for exactly the matter of transport, but if she cares to write to me about that specific case, I am very happy to look into it. Some parents have decided that they will do the transportation themselves, particularly if they want to reduce the amount of contact that their child has with other people outside the family bubble or school bubble.
We know that children and young people have needed to work online, and we have provided additional support, including for those children with SEND, but of course there are extra challenges. The Oak National Academy provides video lessons on a broad range of subjects from reception to year 11, including specialist content for children with SEND. In April, we launched the EdTech Demonstrator network, which is a peer-to-peer support network for the expert use of technology. It has done some phenomenal work supporting teachers—especially SEND specialists—across the country. Specialist support is provided by Highfurlong School in Blackpool, and the National Star College in Cheltenham has been running webinars weekly in which over 1,800 schools and colleges have participated so far, with many more accessing the recorded content. That shows how, throughout the pandemic, teachers and staff are absolutely passionate to learn more about how they can use technology to support those with SEND. That will have a lasting, positive benefit.
I am also delighted to announce today that one of those specialist providers, the National Star College, will roll out assistive technology-specific training. As colleagues will know, we are on course to have delivered nearly half a million laptops and tablets by Christmas to support disadvantaged children in years 3 to 11 where face-to-face education may be disrupted. Many of those laptops will be provided to children and young people with SEND.
The hon. Member for East Kilbride, Strathaven and Lesmahagow mentioned the importance of other medical treatments and specialists. The chief nurse has made it clear that health visitors and school nurses should not be redeployed elsewhere in the NHS this winter. We have also been clear that specialist therapists should be back in schools.
The debate comes at a timely point, because the Government are working both on the new cross-Government disability strategy for publication in the spring and on the autism strategy. As the hon. Member for York Central (Rachael Maskell) said, autism is extremely important. The Department for Education is working closely with the Department of Health and Social Care on the comprehensive review of the autism strategy. In developing the strategy, we are listening closely to autistic people, including over 2,700 people who contributed to the call for evidence.
Early identification of autism is really important. Under the Government’s opportunity areas programme, there is a fantastic project in Bradford using the outcomes for each individual child at the early years foundation stage tests and teacher observations to find out whether there are markers of early autism. The results are so impressive that we have rolled it out from the 10 first pilot schools to the next 100 schools. I am hopeful that in the future that could lead to much earlier diagnosis.
The SEND review, which the hon. Member for East Kilbride, Strathaven and Lesmahagow asked about, has always aimed to enable the education system to have that transformative effect on those with SEND and to focus on the person as a whole, with a joined-up offer of transparent services co-produced with them and their family to suit the child’s individual needs. That was the driving force behind the legislative changes we made in 2014 and it is the driving force behind the SEND review. It will require significant change from everyone involved in the system to deliver those changes. It is a fundamental and cross-cutting review in which we are working hard to find ways to make best practice in the SEND system become common practice. During the outbreak of the pandemic, it was necessary to reduce the pace of the review, but I and the whole of Government remain completely committed to it, and our ambition is to report in the spring. The areas we aim to improve are of long standing, but we are determined to deliver that real and lasting change.
I am grateful to the hon. Member for drawing our attention to this important agenda. We are as committed as ever to getting the right support in place for children and young people with special educational needs and disabilities so that they can thrive and achieve their potential. Both she and the hon. Member for York Central raised important concerns, which I hope she is happy to hear the Government take seriously.
I thank the Minister and everyone for taking part in the debate. I pay special tribute to Greenburn, Sanderson High, and Duncanrig schools in my constituency and invite the Minister to the all-party parliamentary group for disability to further discuss these issues.
Question put and agreed to.
Government Policy on Iran
[Mrs Maria Miller in the Chair]
I remind hon. Members that there have been some changes to the normal practice in order to support the new call list system and to ensure that social distancing can be respected. Members must arrive at the start of the debate and are expected to remain for the winding-up speeches if there is space to do so. Members are also asked to respect the one-way system around the room and to please exit by the door on the left.
Before Members use their microphones, they should sanitise them using the cleaning materials provided and dispose of the cleaning materials in the bin by the door as they leave the room. Members can use the seats in the Public Gallery, as they are being used to ensure we have enough space for people to be able to join this very well-subscribed debate. I now ask John Howell to move the motion.
I beg to move,
That this House has considered Government policy on Iran.
It is a pleasure to serve under your chairmanship, Mrs Miller. I will concentrate on two issues: the nuclear issue in Iran and state-sponsored terrorism. That will leave the field open to others to consider matters such as human rights. For many years, colleagues from across the House have raised concerns over Iran’s malign activities and their impact on the UK’s interests in the region and beyond. The recent expiration of the UN arms embargo and the election of President-elect Joe Biden offer us an invaluable opportunity to review events in the region and consider the UK’s policy towards Iran. It is a policy that I believe requires urgent reassessment and that would benefit from a clear-sighted assessment of Iran and the challenges it poses to the UK and its allies.
Ever since the Islamic revolution altered the course of Iran’s hitherto great history, its fundamentalist leaders have been driven by a central goal: expanding Iranian hegemony in the region and exporting the revolution. The founding father of the Islamic Republic spoke clearly of his vision for the new Iran:
“The Iranian people’s revolution is only a point in the start of the revolution of the great world of Islam.”
That is a mantra that Tehran’s leaders have ruthlessly and violently pursued ever since.
The radicalisation at the heart of that ideology has led to untold suffering in Iran, throughout the region and far beyond. Iran’s support for international terrorism is perhaps the best documented means of exporting its fundamentalist concept of Islamic revolution. It is why Iran is often referred to as the world’s biggest state sponsor of terrorism. It certainly explains why, to this day, Iran’s leaders ensure that vast sums are invested in its terrorist proxies, even amidst a devastating pandemic and economic crisis, to the detriment of its long-suffering citizens.
Iran’s operation of an ever-expanding nuclear programme presents the international community with an historic challenge. The joint comprehensive plan of action nuclear agreement has not restrained Iran’s nuclear ambitions, and certainly has not made it reassess its harmful trajectory, as many wishfully advocated at the time of its signing. The JCPOA was signed in 2015 and was heralded as an historic moment in non-proliferation. Sadly, events have shown that that was far from the truth. Although the deal included extensive verification mechanisms to allow the international community a line of sight into aspects of Iran’s nuclear work, it has fallen short of the necessary safeguards in many areas.
Mindful of the time we have for this debate, I will provide a brief overview of the most concerning aspects. First, much of Iran’s advanced nuclear infrastructure was merely mothballed, instead of being dismantled. That has enabled Iran rapidly to bring enrichment equipment online in recent months, after it decided to breach the terms of the JCPOA and enrich uranium, not only at a higher purity, closer to that required for weapons grade, but in higher quantities. By the International Atomic Energy Agency’s own estimation, Iran now has 12 times the permitted amount of enriched uranium. That far exceeds the amount required for a peaceful domestic nuclear programme and is reportedly sufficient to produce two nuclear warheads. Much of the advanced enrichment work has even taken place deep underground in new production halls at the controversial Natanz nuclear facility.
Secondly, Iran’s historic nuclear activities—especially those with possible military dimensions—were inexplicably left unaddressed by the JCPOA. It emerged in 2018 that Iran entered the 2015 nuclear deal on false pretences, after an Israeli intelligence operation found documents proving that Iran had conducted more advanced testing related to nuclear weapons development than it had declared.
Thirdly, the deal failed entirely to address the pressing problem of Iran’s support for international terrorism. The failure to pursue a broad deal and the segregation of core issues from Iran’s nuclear activities was a costly strategic mistake. Iran has shown no inclination to open those activities to negotiation following the JCPOA’s signing. Why would it? It achieved invaluable sanctions relief at a critical moment in the country’s economic life; and, besides, the export of terrorism is the very cornerstone of exporting revolution.
Fourthly, the JCPOA failed to address Iran’s ballistic missile programme, which we must not forget is the primary means for delivering a nuclear warhead. While the UN sanctions in effect may relate to that programme, that has not for one second given Iran cause to pause its test launching and construction of advanced missiles capable of delivering explosive material thousands of miles from Iran.
Fifthly, human rights abuses were not even discussed in the negotiations, despite Iran’s having one of the worst human rights records in the world. The manner in which any country treats the lives of its own citizens sends an unmistakeable message about its integrity. I am a member of the Council of Europe, the foremost human rights organisation in Europe, and it is an embarrassment having such a pariah on our own doorsteps.
Last, and by no means least, by lifting all nuclear-related sanctions with immediate effect the P5+1 lost any leverage it retained to prevent Iran from subsequently breaching the terms of the nuclear deal.
It should be little surprise that our Prime Minister said earlier this year that this was “a bad deal”. While the deal itself was unquestionably bad, I fear that the P5+1 has further undermined its collective efforts in the implementation of the deal. This year, despite many breaches, there have been no tangible consequences for Iran. Just this week, the UK joined its E3 partners in speaking of their efforts to preserve the JCPOA, and Iran’s egregious breaches warrant nothing more than the expression of deep worry.
I wholeheartedly supported the UK’s triggering of the dispute resolution mechanism at the beginning of the year. That stood to be an important moment in restraining Iran’s actions. Conversely, it appears that the E3 has allowed the process to become an interminable period for dialogue, without any tangible action or sense of authority, despite the fact that the IAEA has provided extensive evidence of increased Iranian non-compliance. Will the Minister please outline the strategy of Her Majesty’s Government in the administration of the dispute mechanism and say whether, in his assessment, it has any impact on Iran’s nuclear activities? In addition, what outcome is the E3 working towards with the dispute mechanism?
The snapback of sanctions was an important failsafe measure enshrined in the JCPOA—a measure that has not been initiated by the P5+1 signatories, with the exception of the United States—so will the Minister please outline how the Government’s position on the reimposition of sanctions on Iran as a result of its non-compliance is going to work out? Have the Government notified Iran at any stage of the possibility of sanctions being re-enforced? What message does the Minister think it sends to Iran when we condemn its nuclear non-compliance but do not enforce the consequences agreed in UN Security Council resolution 2231 and repeatedly state our commitment to preserving the JCPOA?
The expiration of the UN arms embargo on Iran was problematically mishandled this year. By this point, Iran was in full defiance of the JCPOA. Allowing the embargo to expire without extension sends a regrettable signal to Iran that its actions elicit no consequences, regardless of how flagrant they are. That is particularly relevant, given that a further set of embargoes, including on missiles, is set to expire in 2023. The depth of concern felt on the Conservative Benches about the expiration was seen clearly in October when more than 80 Conservative parliamentarians signed a letter to the Prime Minister, co-ordinated by Conservative Friends of Israel.
Earlier this year, Ministers stated that the UK was
“working…to address the planned expiry”,
but we ultimately abstained on a US-led UN Security Council resolution to extend the embargo to August. I regret to say that the UK’s assessment at the time that the motion would not have passed anyway so we should not support it seems illogical. I am sure it is not UK Government policy to abstain on votes purely on the basis that they are unlikely to pass.
It should cause additional alarm to Her Majesty’s Government that our P5+1 partners Russia and China opted to enable the resumption of advanced weapons sales to Iran, which will further Tehran’s dangerous regional activities. China is reportedly negotiating a $400 billion deal with Iran to increase military co-operation. I fear that history will not favourably judge our inability to bridge the divide between the United States and our European allies by ultimately abstaining.
What is the Minister’s assessment of the growing divergence within the P5+1 and its implications for any future attempts, first, to bring Iran back into compliance with the JCPOA and, secondly, to negotiate a broader framework with it? Although an EU arms embargo is set to remain in force until 2023, does the Minister accept that concerns are centred around Iran’s ability to procure advanced weaponry from states outside the EU?
Iran seeks nuclear weapons as a protective umbrella for its dangerous activities throughout the middle east, which is why combating its support for terrorism abroad should be part and parcel of our Iran policy. In Lebanon alone, Iran has armed the Hezbollah terror organisation with an estimated arsenal of up to 150,000 rockets—more than 10 times more than it had in the 2006 war. I welcomed the UK’s proscription of Hezbollah last year, and it has been reassuring that several other countries have followed suit, but there is much work still to be done.
Iran is reportedly distributing almost $20 billion per year to its proxies throughout Lebanon, Gaza, Iraq and Yemen, and it is backing President Assad in Syria. The sanctions relief windfall that Iran received from the JCPOA would have directly facilitated such extensive financial support. The consequences of Iran’s investments need no explanation. As the Defence Secretary said, the Islamic Revolutionary Guard Corps Quds Force is one of the foremost architects of Iran’s malign activity. Yet although the IRGC is believed to be responsible for the deaths of dozens of British servicemen and women, and IRGC-linked terrorist activity in Europe is well documented, the UK does not proscribe the group as a terrorist organisation. The US proscribed the IRGC last year—a significant step in the fight against international terrorism.
The UK Treasury lists the IRGC, the IRGC Aerospace Force and the IRGC Quds Force as being subject to UK terrorism and terrorism-financing sanctions, so they should surely meet the criteria for full proscription. I am aware that the Government do not comment on such matters, but perhaps the Minister can highlight that discrepancy with cross-departmental colleagues. The US includes non-nuclear Iranian targets in its sanctions regime. Does the Minister agree that our new Magnitsky-style sanctions regime should be used to keep the pressure on Iran on non-nuclear issues?
It is of great regret that the UK’s policy towards Iran in recent years has failed to curtail its wider regional aggression. Iran has shown no desire to come in from the cold, and continues to subvert regional peace and stability. That stands in ever more stark contrast with the push for peace in the region that we have seen between Israel and its Arab neighbours. Not only is it in the UK’s interest to curtail Iran’s regional aggression, but it is quite simply the right thing to do. It is incumbent on the UK to work with our international partners to formulate a new strategy to combat the Iranian threat. The acceptance that Iran’s war by proxy and nuclear programme are not mutually exclusive must be at the heart of our new programme.
There are some who say we should keep the JCPOA on life support indefinitely, as it is the only deal on the table. In reality, that deal has been dead for some time, and we must accept that in order to make progress. As we all know, the US withdrew from the agreement in 2018, but President-elect Biden has expressed willingness to return to the deal as an interim step, if Iran complies with its terms. If, in due course, Iran begins to indicate a preparedness to return to the JCPOA, it will be critical that sanctions relief is not given prematurely. The UK, along with its P5+1 partners, must ensure that Iran reaches a number of verifiable technical milestones, proving it is committed to compliance before sanctions are lifted. Specifically, it must remove its stockpile of enriched uranium and end enrichment beyond the permitted JCPOA limit. Beyond that, the only way forward is a new comprehensive agreement, addressing all of these concerns. What steps has the Minister taken alongside our international partners in working towards that?
Iran’s actions over the last year are of concern to many in this place, as witnessed by the number of hon. Members who have turned up for this debate. I hope that the Government will take this opportunity to adopt a clear-sighted approach to Iran. Unless we begin rolling back Tehran’s harmful activities, UK interests and the much-desired peace and security of the middle east will be jeopardised.
Before I call the next speaker, I remind colleagues that they cannot contribute from the seats in the Gallery. Perhaps others can make space to allow people to move forward as and when. This is a heavily subscribed debate, so I suggest a three-minute informal time limit to try to get everybody in. I will be calling Front-Bench speakers at 3.28 pm.
It is an honour to serve under your chairmanship, Mrs Miller.
The hon. Member for Henley (John Howell) outlined the issues to do with the nuclear threat, and I will not touch on that, to give hon. Members time on other issues. He was right to say that Iran is one of the world’s most malevolent pariah states. It is a destabilising influence across the middle east, and it now stretches its extremist statecraft across Europe.
Iran backs terrorism. In 2018, Members from this House were caught up in an event in Paris; some people in this room attended it. One of Iran’s front people tried to murder people at that protest by way of a bomb. Many Members were moments from death. The person who was accredited with carrying out that bombing was an Iranian diplomat who is now using his diplomatic immunity to avoid prosecution.
Iran sponsors direct links between Hezbollah and the Real IRA. Its radicalism drives via the Muslim Brotherhood to radicalise people in this country. The UK has a choice to make to now—to urgently take action against the Muslim Brotherhood. It is a surrogate for Iran and for extremist ideology in this country.
We have quite rightly proscribed Hezbollah, which was funded by Iran. I believe that Iran uses other surrogates—al-Qaeda, the Muslim Brotherhood, Daesh and the Real IRA—and I call on the UK Government to signal that they are now going to tackle the terrorism and extremism sponsored by the Muslim Brotherhood seriously by signalling that they intend to proscribe that organisation as urgently as possible. The Muslim Brotherhood is a cesspit for extremist ideology and for training young people in this country to hate this country. We should be taking actions to pull them away from that.
Today, I have left in the House of Commons Library a very important report by Cornerstone into the Fakhrizadeh assassination, which links some of the activities in the Gulf with Qatar and Iran, and with the Muslim Brotherhood. Some of the reading in that report is very worrying indeed. For example, it indicates that the USA—our partner—no longer shares information that has military intelligence associated with it with Doha, because of its concerns over the proximity that Qatar has to Iran. I know there is going to be a debate in the House on Qatar tomorrow, but these things do not stand alone, and I urge Her Majesty’s Government to use their power, authority and influence to influence Qatar to influence Iran to pull itself away from some of these things. At the moment, we in the UK buy something like 31% of all our gas from Qatar, which is astounding, and yet that country is playing a role in Iran, which is influencing extremists in this country also. We really have to stand up for the Arab quartet—Saudi Arabia, Egypt, Bahrain and the United Arab Emirates—and help those countries stand up against the extremism sponsored by Iran.
It is a pleasure to serve under your chairmanship, Mrs Miller, and I congratulate my dear Friend the hon. Member for Henley (John Howell) on securing this important debate. Forgive me if I repeat some of the points that he touched on.
Iran is a malign and malevolent influence in the Gulf region and more widely, and has been since the Islamic revolution in 1979. Its actions greatly concern us in the UK, as a P5+1 member, a signatory of the joint comprehensive plan of action—the Iranian nuclear deal—and a nation with a long history of vital strategic interests in the region. Despite recent moves by other Gulf states to promote a more peaceful neighbourhood, such as Israel signing a peace deal with the UAE, Iran continues to promote terrorism and instability throughout the Gulf and the wider middle east. It is supporting the Houthi militia in the civil war in Yemen; it is supporting Hezbollah and other proxies to prolong the “no war, no peace” struggle against Israel; it has undertaken attacks on shipping in the Gulf; it continues to work towards developing a nuclear weapons capability, despite the 2015 nuclear deal; and it uses hostage diplomacy. The terrible case of Nazanin Zaghari-Ratcliffe is a very obvious example. In all these matters Iran has shown consistent bad faith, and demonstrated its destructive and aggressive policy towards its neighbours and us in the west.
My constituent, Mr Anoosheh Ashoori, was captured some three years ago while visiting his sick mother in Tehran, and has since been held in prison under really brutal conditions, which have included solitary confinement and physical torture. Does the hon. Gentleman agree that British citizens such as Mr Ashoori who are subject to unjust trial are being held as hostages due to their dual nationality, and that the UK Government must acknowledge them as such?
I completely agree with the hon. Lady: something must be done. These terrible acts, which are clearly politically motivated, need to be sorted by HMG.
Just yesterday, the UK and our French and German allies warned Iran that its plans to expand its atomic energy programme risked the collapse of the international agreement put in place in 2015—the JCPOA. Last week, the Iranian Parliament voted to end UN inspections of its nuclear facilities and boost its uranium enrichment. Many lawmakers reportedly chanted “Death to America” and “Death to Israel” following the vote. I am sure that in his summing up, the Minister will join me in condemning those actions and deeds. Tehran is enriching uranium to a higher fissile purity than is permitted under the nuclear deal, and putting itself on a trajectory that brings it closer to possessing weapons-grade enriched uranium.
As I do not have much time left, I will go straight to my conclusion: our policy towards Iran should be based on considerations of our security, our values and our vital strategic interests. Our policy should mirror that of the US and Israel, our allies, in saying that the Iranians must never be allowed to develop a nuclear weapons capability.
It is a pleasure to serve under your chairmanship, Mrs Miller, and I congratulate the hon. Member for Henley (John Howell) both on securing this debate and on an excellent speech. I found himself in agreement with most of what he said.
My view is simple: not only does Iran support terrorist groups and foment unrest across the middle east, but its strategic aim is an arc of influence from Tehran to the Mediterranean sea and the border with Israel. It is currently fitting global positioning systems to its Zelzal-2 missiles for that purpose. Iran recently showed on state television pictures of one of its missiles, with the words along the side in Hebrew: “Israel must be wiped out.” Iran is absolutely clear about its objective. Its supreme leader said in 2015 that it was his intention that Israel be destroyed within 25 years, with or without a nuclear agreement. Iran’s ideology is simply riddled with a hatred of Jews.
Iran is not content with suppression at home or turning the middle east into a cauldron. We have heard, as the hon. Member for North Antrim (Ian Paisley) said, that Iran’s agents are active across Europe. I think that it was last year that our own security services found a Hezbollah bomb-making factory in north London. And in Belgium at the moment, we are witnessing scenes that could come from a John le Carré novel, with Asadollah Asadi, a diplomat from Iran’s embassy in Austria, on trial for both planning and facilitating an attack on an opposition rally in Paris. Apparently, when questioned, he threatened reprisals from the regime if there was any attempt to take action against him. Also, of course, Foreign Minister Zarif has recently conceded that Iran is interested in prisoner swaps, which possibly explains why innocent dual nationals are being seized; they may be insurance against further terrorist attacks.
This is a regime that I say we cannot negotiate with. If there is any attempt to negotiate with it, President-elect Biden should not go back to the joint comprehensive plan of action. And if we have any influence on the President-elect, I hope that the Minister will say that we must stick with what the President-elect himself said during the primaries—that we need a stronger and longer arrangement, which must include Iran’s terrorist activities and ballistic missile programme. And we should certainly proscribe the IRGC, because it is a terrorist organisation and should not be allowed to operate anywhere in Europe, let alone in this country.
I congratulate my hon. Friend the Member for Henley (John Howell) on securing this debate and agree with everything that he said. I am now, unfortunately, in my fourth decade of saying negative things about the Iranian regime; it would be good to still be here in Parliament when I can say something positive about it. However, I was not best pleased when I read in the newspapers recently that when I was leading a delegation at a rally in Paris in 2018 I was, together with one or two colleagues who are present in this Chamber today, the target of a terrorist attack.
As we take the presidency of the G7 next year, the United Kingdom will be at the centre of the world stage, with increased opportunities to influence international policy. Even though it was agreed last year at the G7 summit in France that we would foster peace and stability in the middle east, and ensure that Iran never acquires nuclear weapons, that message needs to be reiterated and taken further. I was very encouraged by the words of my right hon. Friend the Minister, but it has not always been the case that the Government have taken that view. Nevertheless, I thought that what he said was splendid and I very much hope that he will take it even further when he responds to the debate.
In November 2019, the Iranian regime killed at least 304 people and injured thousands more at peaceful protests, using lethal force and institutional violence. However, the death count may be much higher than that, as Government forces confiscated the bodies of the dead protesters to hide the true casualty count.
Last week, the Iranian Parliament voted to end the UN’s inspections of Iran’s nuclear facilities and to boost Iran’s uranium enrichment. I hope that the Minister’s Department is working carefully with our close allies to create a more robust deal that particularly focuses on deterring Iran’s human rights abuses. Of course we have all received countless emails about Nazanin Zaghari-Ratcliffe, who is a constituent of the hon. Member for Lewisham East (Janet Daby), as the hon. Lady mentioned. I went to see Nazanin’s husband when he was on hunger strike last year, and I very much hope that we will continue to build on the pressure created by that action.
Iran’s global terrorism reach has infiltrated Europe and, as I have said, it has transpired that at a rally in 2018 Iran’s supreme leader, Ali Khamenei, decided to launch a terrorist attack; some people may be disappointed that it was unsuccessful, but I am very pleased.
In conclusion, we must address the regime’s diplomatic blackmail and acts of terrorism in Europe and hold those responsible to account by imposing sanctions on the regime’s leaders and officials. I know that oil is very important, but we must be firm on this. We must include a halt to the regime’s ballistic missile programme and uranium enrichment programme. We must make any future diplomatic and economic relations contingent upon an end to the regime’s state terrorism. By doing that and supporting the National Council of Resistance of Iran, we can help to bring peace and stability to Iran. And we should do more to support Mrs Maryam Rajavi.
It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate my hon. Friend the Member for Henley (John Howell) on securing this debate. I will not repeat the points that he made.
At a time when the United Kingdom needs to be really clear-sighted about our strategic priorities and international objectives, our policy on Iran risks appearing—forgive me for saying this—confused and unclear. We are caught between, on the one hand, a desire for rapprochement and normalisation of relations with Iran, and on the other hand, the certain knowledge that Iran’s posture on the international stage is a negative one. Its activities across the middle east are deeply harmful to the region and are a direct threat to global peace, our own interests and those of our closest allies.
The desire for normalisation was enshrined in the re-establishment of diplomatic relations with Iran in 2015. The hope at the time was that—we were in government, Mrs Miller—that would herald the beginning of a new, brighter phase of UK-Iran relations, and that the UK would somehow play a role in helping Iran find its way back into the mainstream of the international community. The truth is that the hopes that we had at the time were not well founded. Although it might still say on the gov.uk website that we believe the outlook for UK-Iran trade is positive, and that we want to see greater engagement between UK businesses and Iran, reflecting a desire for normalisation, what is the reality? This year, 2020, has demonstrated what the reality is.
The year started on 11 January in Tehran with the illegal arrest of our ambassador by the Iranian regime, in a complete violation of international law. We said at the time that Iran was at a crossroads moment, and that it faced a choice whether to continue its march towards pariah status. We warned that there would be consequences if it chose that path, and that is exactly what it has chosen. It has spent the year openly, belligerently and defiantly breaching its obligations, breaking international law and breaking its commitments under the JCPOA, and it is not clear to me what the Government’s response has been.
I do not understand, for example, why—I am sorry to say this—we sat on our hands at the United Nations in August and did not support our closest allies, the Americans, in voting for an extension of the arms embargo on Iran. I do not understand why we continue to try to keep the JCPOA on life support when it is clear that there were huge failings in that agreement.
I will finish shortly to allow others to speak. I know the Minister understands these issues thoroughly; we have discussed them previously. I urge him: I want to see the UK Government playing a really strategic role between the EU and the new American Administration and looking towards a new agreement that does not just narrowly focus on nuclear-related obligations, but deals with Iran’s ballistic missile programme, its support for terror, its human rights abuses and its systematic undermining of democracy all across the region. That would be the clear-sighted, positive role that the United Kingdom could play.
It is nice to serve under your chairmanship, Mrs Miller. I am pleased that my good friend, the hon. Member for Henley (John Howell), has led the debate. It is a pleasure to be alongside him again.
I declare an interest as chair of the all-party group for international freedom of religion or belief, but I want to speak about one specific group of people whom I have spoken about before. Indeed, the hon. Gentleman and I have both spoken about the Baháʼí faith in Iran. It will be no surprise to anyone in this Chamber that I am going to use this opportunity to highlight a religious group that is under massive pressure in Iran: those of the Baháʼí faith. I have spoken about them many times. Not only they are subject to persecution, discrimination and violence, but Christian groups are as well. Women in Iran are subject to many things: acid attacks, violence, imprisonment, job losses and so on.
Baháʼís continue to be denied access to higher education in Iran, and most are excluded by national entrance examinations, when their files are returned as “incomplete”, as they are not from one of the four constitutionally recognised religions. A small number of Baháʼís are admitted to university, but often face interrogation about their religious beliefs—that happens all the time. They have the choice to recant their faith or face expulsion. There is a real focus of discrimination on them. Those practices align with the provisions of the 1991 secret memorandum on “the Baháʼí question”, which stipulated that Bahá’ís must
“be expelled from universities, either in the admission process or during the course of their studies, once it becomes known that they are Bahá’ís.”
At every stage, from entering universities to studying there, Bahá’ís are discriminated against.
A number of Bahá’ís pursue degree-level studies through the volunteer-run Bahá’í Institute for Higher Education, but they, too, face repression for seeking an education. On 22 May 2020, one Bahá’í student had her sentence of six years’ imprisonment extended to seven years and was made subject to a two-year ban on working in public sector jobs through the tazir law provisions. That is further discrimination. The student, the mother of an infant child, was charged with propaganda against the regime and membership of opposition groups. Fortunately, she obtained her university degree through the BIEHA. Her degree was probably better than those from other universities.
Since Dr Hassan Rouhani assumed the presidency in August 2013, more than 283 Bahá’ís have been arrested and thousands barred access to education, and there have been least 645 acts of economic oppression, including the intimidation of Bahá’í business professionals and the closure and prevention of Bahá’í businesses. I read a briefing that said that it is vital that the United Nations, Governments and Parliaments around the world continue to hold Iran accountable for its violations of the rights of its own citizens, including the innocent Bahá’í community. They are a lovely people, as those who have met them will know.
During this time of global crisis owing to the covid-19 pandemic, the long-standing persecution of Bahá’ís in Iran has increased. That has been evident in the number of arrests and imprisonments in that community, as well as changes to legislation and the penal code, and arbitrary punishments against Bahá’ís on the grounds of their religious belief. I believe that the Government have a responsibility to highlight and support the Bahá’í faith, ensuring that any policy on Iran must help the Bahá’í community and exert veritable diplomatic pressure on Iran to deal fairly and appropriately with the Bahá’í community.
I congratulate my hon. Friend the Member for Henley (John Howell) on securing this important debate. While the world’s attention has quite rightly been on coronavirus, Iran has continued to violate the terms of the 2015 nuclear deal without facing significant consequence. Those violations have already been clearly set out already, so I will not repeat them.
The UK was right to trigger the dispute-resolution mechanism alongside France and Germany in January, sending a strong—if overdue—signal that Iran’s non-compliance would no longer be tolerated. The terms of the nuclear deal clearly state that if the issue had not been resolved by the Joint Commission within 15 days following the triggering of the DRM, and if the complaining participant felt that the issue constituted “significant non-performance”, they could refer it to the UN Security Council for a vote on a resolution to continue lifting sanctions. Back in August, seven months on from the triggering of the DRM, the E3 identified
“systematic Iranian non-compliance with its…obligations”.
In the light of that, it is reasonable to ask why the issue has not, so far, been referred to the UN Security Council.
The most troubling outcome of that inaction was the expiry of the UN conventional arms embargo on Iran in October. The E3 said that it had
“serious concerns regarding the implications for regional security of the scheduled expiry…particularly given Iran’s destabilising activities, which continue unabated.”
Why, then, given Iran’s continued non-compliance, was the embargo permitted to expire? Iran is now free to acquire advanced weaponry from Russia and China, having signed a reported $400 billion strategic deal with the latter. I look forward to the Minister’s response to those points.
Non-compliance with the nuclear deal is not all that should concern us about the Iranian regime’s actions. We have seen Iran emerge as a leading state sponsor of terrorism in the middle east and beyond. It provided funds and weapons to terrorists in Iraq, Syria, Lebanon and Yemen. The Islamic Revolutionary Guard Corps has used the Quds Force and proxies such as Hezbollah to carry out espionage and terror attacks globally. Colleagues have set out how Iran’s regional ambitions have a malign and destabilising effect on the middle east, but it is essential to note that its actions have a global reach, including here in the United Kingdom.
Iran’s proxy, Hezbollah, has been active here since the 1980s. Just five years ago, a Hezbollah cell in north-west London was caught stockpiling 3 metric tonnes of ammonium nitrate. Let us be under no illusion: Iranian-inspired extremism is a serious security threat to the UK, and plays an active role in disrupting social cohesion and community relations in this country and across Europe.
We have seen this hate spill over onto the streets of our capital—a good example is the al-Quds day march, where we have seen Hezbollah flags being waved. Hezbollah’s official television station, Al-Manar, is spreading antisemitic hate speech and conspiracy theories, glorifying terror and violence, including a 29-part drama based on the antisemitic text, “The Protocols of the Elders of Zion”.
In conclusion, spreading misinformation and radicalising people is part and parcel of Tehran’s agenda; it is our responsibility to be vigilant against this, and to robustly protect minority communities in this country, as well as to stand firm with our allies against Iran’s malign activities in the middle east. The stakes are high and a failure of statecraft would have untold consequences. A major rethink is needed.
May I say what a pleasure it is to serve under your chairmanship, Mrs Miller? I thank my hon. Friend the Member for Henley (John Howell) for securing this debate.
Iran is a part of the world steeped in history, culture, art, and religion, from the Seleucids to the Parthians and the Sassanids to the Rashidun caliphate and beyond. This is a part of the world that I greatly admire, so what follows is not a criticism of the Iranian people but, rather, of the regime which controls their country and has set back thousands of years of progress.
Iran is a bad actor on the world stage. We are not dealing with a country that has much interest in the international rule of law or standards of human rights and transparency, which we and our partners would consider the baseline for a country’s conduct in the wider world. Tehran is enriching uranium to a higher fissile purity than is permitted under the JCPOA, and is on track to possess weapons-grade enriched uranium. This is not a clandestine activity by a secretive state; it is a flagrant and belligerent provocation by a thugocracy. Iran continues brazenly to violate the terms of the JCPOA, and it has failed to engage in constructive dialogue. I would urge Ministers to consider what the next steps are.
Iran’s malfeasance is not limited to its nuclear ambitions. In January, I had an opportunity to visit the Golan heights in Israel. Just a short distance from where I stood, a bloody, brutal civil war is raging. “Civil” is, in all honesty, a terrible misnomer for what is happening in Syria—it is the systemic suppression of that country’s people by a despot. Iran has invested millions in military assistance for Bashar al-Assad’s regime.
In Lebanon, Hezbollah controls the country’s southern border with Israel and acts with the impunity of a terrorist state, regularly staging attacks on its neighbour. The common thread, again, is substantial financing by Iran’s Islamic Revolutionary Guard. It has become a prolific and notorious state sponsor of terror; its tentacles are wrapped around each of its regional neighbours, and it cannot be treated separately from its proxy.
Our Israeli friends have an expression: “Ve’im lo achshav aymatai”—“And if not now, when?” In recent months, Israel has agreed landmark peace deals with the United Arab Emirates, Bahrain and Sudan, and those outstanding achievements are evidence of a new direction of travel for a more peaceful and prosperous middle east. The normalisation of Israel’s relations with its regional neighbours is underscored by a shared common concern about both Iran’s nuclear ambitions and its sponsorship of terror through its proxies.
The Arab world should be commended on how far it has been willing to come in such a short time, and on or the statesmanship of its leaders in setting aside old and bitter rivalries with the region’s only democracy. To quote a common Arabic phrase, “Eljyaat ahsan men elrayhat”—“What is coming is better than what has been”. Iran is looking increasingly like the outlier in the middle east.
In closing, I would urge colleagues in the Government to redouble our efforts to bring the Iranian regime to account. We owe it to the people here at home; we owe it to our friends in the middle east, and we owe it to the Iranian people. There will come a day when Iran is a free nation again, loosened from the dogmatic and extreme regime that grips it, but that will not be an easy process.
There is a Persian expression: “Baa yek dast nemitunaan do hendhuneh bardaasht”—“You can’t lift two watermelons with one hand”. It means that one should always get some help. The Iranian people need a hand, and we should be willing to reach out.
Iran boasts a long and rich history that has played a crucial role in influencing culture, art, poetry, science and philosophy across the globe. Not only is Iran home to one of the oldest civilisations, which began with the creation of Elamite kingdoms in 3300 BC, but it is also home to the Cyrus cylinder, the first historically recognised universal charter of human rights, created in 534 BC, pre-dating the Magna Carta by well over a millennium.
Regrettably, the Minister will be aware that the Iran we know today is very different from the one we look back to and admire. Today’s Iran is one of the world’s biggest state sponsors of terrorism and home to one of the deadliest dictatorships in the world. Human rights abuses are rife. Hundreds of Iranian civilians have been killed by their own Government. Protesters have been brutally repressed and religious minorities such as the Bahá'í face persecution.
On the international stage, Iran’s stratagem threatens the regional balance of power, our interests in the region and our own national security. Tehran openly supports the terrorist group Hezbollah, providing it with financial aid, weapons, munitions and military training. One attack orchestrated by Hezbollah, fortunately followed by MI5, was against targets in our own capital, London. In 2017, Iran reportedly carried out a cyber-attack on the UK Parliament and against email accounts belonging to Cabinet Ministers and our Prime Minister.
Allowing Iran to continue these attacks affronts, insults and diminishes our position in the eyes of the world. Releasing the Iranian oil tanker Grace 1 was nothing short of a national embarrassment and undermined our image as a reliable ally that does not buckle under pressure. If we wish to better secure our national security and bolster our reputation in the eyes of our allies, a much stronger stance must be taken against Iran. Now is an excellent opportunity to demonstrate our willingness to stand up to the tyrants of Tehran, whether for breaching the joint comprehensive plan of action, their flagrant disregard of fundamental human rights or their financing of terrorism.
The UN arms embargo on Iran expired in October, which now provides Iran with a chance freely to purchase deadly weaponry. We have an opportunity to campaign for the reinstatement of the embargo and even to unilaterally establish our own embargoes. Other measures must be considered, such as further trade sanctions for failure to adhere to the articles of the joint comprehensive plan of action. The use of Magnitsky-style sanctions against key targets in the Iranian regime that propagate human rights abuses would send a strong message to the opposition and to Iran’s Government.
In the post-Brexit era, the United Kingdom no longer has the obligation to side with Brussels in our policy on Iran—a policy that has too often been based on appeasement. We should work instead with our strongest friends and allies, notably the United States, to become a true champion of freedom and an opponent of those in Iran who effectively hold their own people hostage.
I congratulate my hon. Friend the Member for Henley (John Howell) on securing this important debate. I shall begin by talking about sanctions relief and how that has helped to shape the challenges we face today; I think we may have made the same mistake twice.
Prior to the JCPOA, the international community had constructed one of the most stringent and far-reaching sanctions regimes of modern times. It was the result of strong global co-operation and had the necessary impact of bringing Iran to the negotiating table. As part of the JCPOA, many of those sanctions were lifted almost immediately. We must be cautious in removing them and proceed slowly; as the old proverb goes, we must “trust but verify”.
The sanctions relief brought billions of dollars to Iran. We know that, far from curtailing its activities since the JCPOA came into force, Iran has stepped up its proxy activities, as we have heard today, using terrorism as a form of foreign policy. It has increased its investment in violence, openly seeking to extend its Hezbollah franchise into southern Syria and even replicating that approach in Iraq.
We made a similar mistake when we failed to extend the UN arms embargo. That has now given Iran’s future defence contracts the undesirable cover of legitimacy. As a result, regional neighbours of Iran will undoubtedly feel compelled to strengthen their own defence capabilities and we will need to stand ready to support them in doing that, including by encouraging further steps towards peace between the Gulf nations and Israel.
We also need to think carefully about the steps that China is taking with Iran. Our own relationship with China has changed in recent years and will no doubt continue to do so. We should of course work together on our shared challenges, but with a clear eye on the strategic issues, because China is using all the tools at its disposal to influence activity, including not just foreign policy, but economic and security policy. As my hon. Friend the Member for Henley said, reports indicate that China is advancing a strategic agreement with Iran— a 25-year deal worth $400 billion. Already Iran’s largest trading partner, the deal will see massive injections of Chinese investment into areas such as energy, infrastructure, and telecoms, as well as defence. The potential of joint Iranian-Chinese training exercises, intelligence sharing, military research and development and more poses a clear challenge to UK interests in the region and beyond. Further plans would also see China establish a strategic foothold in the Persian gulf: a vantage point on a globally important shipping lane, and a listening post covering the middle east. We know the importance of that region and should remember that it was only months ago that we had to arrange Royal Navy escorts for vessels passing through. I urge the Minister and the Government to reflect on some of these emerging strategic challenges as the Government proceed with the integrated review.
Thank you, Mrs Miller. I congratulate my hon. Friend the Member for Henley (John Howell) on securing this important debate today. At the time of the JCPOA signing in 2015, proponents of the agreement argued that it would encourage Iran to moderate its behaviour and reduce its systematic human rights abuses. However, since the deal was signed, human rights abuses have escalated—from unlawful executions and arrests to torture, forced confessions, unfair trials without due process, repression of the press, and discrimination against women and minorities. Women are punished for poor wearing of the hijab, which is mandatory, while homosexuality is illegal and punishable by death.
Although many hailed Iran’s President Rouhani as a moderate, the indisputable fact is that oppression and the use of the death penalty have soared under his leadership. At least 251 people were executed in Iran in 2019, the second highest figure in the world after China. Iran ignored pleas from the international community to spare the life of 27-year-old national wrestling champion Navid Afkari, who was reportedly tortured into confessing to murder. Mr Afkari was executed by hanging in September this year. In November 2019, at least 304 people were killed by the Iranian regime, and thousands were injured when lethal force was used to crush nationwide economic protests. Iran’s press freedom has been all but eliminated, with dozens of journalists, bloggers and cartoonists jailed for issuing material deemed contrary to the Islamic Republic’s values and principles. It is unsurprising that Iran ranked 173 out of 180 nations in the world press freedom index this year—down from 170 last year.
What is permitted and, in fact, celebrated, is holocaust denial. Tehran launched its third holocaust denial cartoon contest in September this year, which also urged entrants to paint as traitors any nations that made peace with Israel. The disgraceful event is a project of the art zone division of Iran’s Islamic propagation organisation, which reports directly to the regime’s supreme leader, Ali Khamenei. The supreme leader himself has repeatedly called for the destruction of Israel, and the ultimate target of Iran’s nuclear activities and regional terrorism is self-evident.
We are all aware of the plight of Nazanin Zaghari-Ratcliffe, the British-Iranian mother held hostage by Iran; the appalling treatment she has faced is further evidence that Iran has not come in from the cold since the nuclear agreement was signed. Hon. Members will remember that our ambassador to Iran was arrested at a vigil for victims after Iran shot down a Ukrainian passenger plane in January. In separating Iran’s nuclear programme from its other destructive and repressive actions, the JCPOA failed adequately to hold Iran to account. The human rights situation has deteriorated significantly, and a reset on the UK’s policy towards Iran should urgently address that fact.
For the sake of brevity, I shall skip to the point. This debate provides a timely opportunity to highlight the issues regarding Iran’s activity globally and, more specifically, here in the UK. The Iranian regime has a long history of propagating antisemitism, often including holocaust denial, as my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) has just outlined.
In a speech on 22 March this year in response to a coronavirus outbreak, the ayatollah himself, in an attempt to blame the USA, claimed that Jews were experts at sorcery and were creating relationships with demons. He previously called the holocaust a myth. In recent years, there have been at least two high-profile international holocaust cartoon competitions held in Iran, with Government support. The most recent competition was held in 2016 and, according to the US Holocaust Memorial Museum, included 150 entries.
Iran has been designated a state sponsor of terrorism since 1984 by the US State Department, which considers it to be the world’s worst state sponsor of terrorism. Iran’s support for terrorism is a global threat, particularly for the Jewish community, which has been repeatedly targeted. The most noticeable example is the 1994 Hezbollah bombing of the AMIA building, a Jewish community centre in Buenos Aires, killing 85 and injuring hundreds. In doing so, the bombing ripped the heart out of the community.
This continued threat is a major reason why Jewish communities around the world, including in the UK, require security at schools, synagogues, community centres and events. I would like to pay tribute to the fantastic work of the Community Security Trust, in keeping not just the Jewish community but my constituents safe, as they go about their daily life.
In 2012 alone, Iran or Hezbollah were connected to incidents targeting Jewish communities or Israeli interest groups in India, Georgia, Thailand, Singapore, Cyprus, Azerbaijan, Bulgaria and Kenya. Those incidents need to stop. I will conclude by echoing—and I will refer to him this way—my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) in calling for the IRGC to be proscribed by the Government.
It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate my hon. Friend the Member for Henley (John Howell) on securing this timely and important debate. Since the signing of the nuclear deal in July 2015, Iran’s regional aggression has continued unabated, as has its deeply troubling human rights record, which remains one of the worst in the world. The Islamic Republic is still a leading sponsor of state terrorism, providing financial and material support to extremist Islamist terrorist groups across the middle east, including Hezbollah in Lebanon and Hamas in Gaza.
Iran not only supports acts of terrorism, it seeks to form militias in parallel to national armies throughout the region, in order to bolster its influence. Iran’s Islamic Revolutionary Guard Corps is tasked with exporting Iranian revolution, with its infamous Quds Force establishing pro-Iranian proxy militias in other countries. Those forces are created using the IRGC’s effective blueprint, which includes the creation of social welfare projects financed by Iran, in order to take advantage of power vacuums and gain support in local communities for the militias.
As we have heard, Hezbollah has amassed an arsenal of up to 150,000 rockets on Lebanon’s border with Israel, and currently has an estimated 45,000 fighters, many of whom have extensive battle experience from their time in Syria, where Iran is deeply engaged in supporting Assad’s regime. In May this year, Iran’s supreme leader compared Zionism with a virus and a cancerous tumour, and said that Israel must be eliminated as soon as possible. Hamas, meanwhile, has fully restored its military strength to levels before the 2014 Operation Protective Edge conflict in Gaza, including its rocket arsenal, military infrastructure and attack tunnels infiltrating Israeli territory.
Last year, the US designated the IRGC as a foreign terrorist organisation, the first time a part of another Government has been named an FTO. The US said that that underscored the fact that Iran’s actions were fundamentally different from those of other Governments. The US was right to state that the IRGC was the Iranian Government’s primary means for directing and implementing its global terrorist campaign. I urge the Minister to encourage governmental colleagues to examine the IRGC for proscription, as the hon. Member for Birmingham, Selly Oak (Steve McCabe) has already outlined, following the welcome move to proscribe Hezbollah in its entirety.
It is a pleasure to serve under your chairmanship, Mrs Miller. I, too, congratulate the hon. Member for Henley (John Howell) on bringing this important debate to the Chamber and on his impressive speech, with which I agreed entirely. I can be brief this afternoon because a number of excellent points have already been made. Iran is a complicated place; the middle east itself is complicated. Everything is connected to everything else and Iran is behind many of the region’s problems.
We should not turn a blind eye to rights abuses anywhere, whether in Israel, Gaza, Yemen, Saudi or, indeed, Iran, whose actions in fomenting terrorism abroad and developing nuclear weapons, and oppressing opposition and minorities at home, must have consequences. All that said, I would always tend towards dialogue. Although I fully agree with the misgivings on the failings of the JCPOA that we have heard today, I believe that there is an opportunity for a reset with an incoming American Administration that has a different tone towards Iran. I would be grateful if the Minister could give his assessment of the opportunity for a reset.
In parallel with that aspiration, however far in the future, Iran’s actions must have consequences. One thing that I am surprised has not been mentioned thus far is Magnitsky sanctions. We have an appropriate toolkit for targeting sanctions on individuals in the regime. There has already been movement in that direction, and I would be grateful if the Minister can comment on the scope for further targeted sanctions against those regime individuals. Our problem is not with the Iranian people; Iran has a proud history and hopefully a bright future. It is a complicated place, and there are forces of progress, however weak, within Iranian politics, which we can strengthen. However, the Iranian Government policy has to change. I agree with a number of the points that right hon. and hon. Members have made, and if the Minister works in that direction, he can rest assured of the SNP’s support.
It is a delight to contribute to this important debate under your chairmanship, Mrs Miller.
I want to highlight the immense suffering of the Iranian people during covid. Iran has been particularly badly affected due to its broken economy and its high level of disease. We must always bear in mind in foreign policy discussions that there are human beings there who suffer enormously because of politics that goes wrong.
In foreign policy terms—that is the essay question for today—Iran has remained a significant challenge for all of us in western countries for many years with its woeful human rights record, the low role of women in society, the proxy wars in the region, the nuclear programme and the high-profile hostage diplomacy. I have a constituent who is currently in Evin prison with Nazanin Zaghari-Ratcliffe.
Obviously, the past four years, with President Trump in the White House, have been rather unpredictable, and the question is whether it has helped the dialogue that needs to happen on Iran. We know that the recent assassinations of the military general Qasem Soleimani and the nuclear expert Mohsen Fakhrizadeh—excuse my pronunciation; I believe that we have a Farsi speaker among us—have been subject to high-profile reporting in Iran, and I believe that has made it a little more difficult to enter into dialogue.
The US’s 2018 withdrawal from the joint comprehensive plan of action, which was carefully crafted by Baroness Ashton in the other place as our EU high representative back then, has increased tensions between the US and Iran, and I believe has undermined progress on the nuclear programme. The hon. Member for Henley (John Howell) mentioned the important deadline that we have on deterrence in 2023. I hope that the International Atomic Energy Agency verification process can step up, and that there can be more international observers so that we know exactly what is happening in terms of proliferation.
Obviously, the issue of US sanctions and the Magnitsky question are very much for the Minister. I look forward to hearing what his position on that is and what the Foreign, Commonwealth and Development Office is currently thinking about the scope. The Magnitsky tools are new for us in the UK, but they provide an opportunity to clamp down on a small number of very dangerous individuals. I look forward to hearing whether much progress has been made within the FCDO on that question.
I also want to highlight the excitement that perhaps Mr Biden will bring a fresh change. Many hon. Members have questioned whether the JCPOA is a bit tired. It is always hard to have to reinvent things that were the thing in 2015. Hon. Members who were here in 2015 will remember that the then Member for Runnymede and Weybridge came and spoke to the House, and we could hear a pin drop because it was such an important moment. That is hard to recreate, so we need some very creative experts in the FCDO to bring us another solution. Hopefully, it can bring dialogue so that we can talk about human rights, non-proliferation and eventually some form of good, high-quality economic involvement in the future.
I also want to touch on the crucial dialogue with Israel, the United Arab Emirates and Saudi with the aim of reducing tensions in the region and laying the foundations for future co-operation. Hon. Members have mentioned the role that the G7 will play in the coming 12 months. I wonder whether our leadership of COP and the climate challenge provides another work stream that we could introduce into any future dialogue.
I want to highlight the ongoing harassment and persecution of the staff and journalists of the BBC Persian service. The Iranian authorities have been systematically targeting BBC Persian journalists, who are mainly based in the UK, and their families in Iran since the service launched on satellite TV in 2009. That is a form of terror. Intimidation of BBC Persian staff’s family members in Iran is a regular occurrence and has increased in the past three years. We have a duty to stand up for the free press. I urge the Minister to highlight the support that the Government are providing to the BBC and to clarify whether such attacks and occurrences have been brought up in engagement with the Government.
I have about one minute—
Lovely. I have enjoyed the debate and hearing the many contributions from the different regions and parts of our Parliament. I hope that the Minister can bring us an exciting new alternative to what appears to be a dangerous situation, with the human rights of so many affected and so many suffering—particularly the diaspora. Many of us have people who come to our advice surgeries to tell us of the pain and suffering in Iran. I also hope that he will bring some solace for those of us who are worried about Nazanin Zaghari-Ratcliffe and all the others still in prison in Evin and other places for no good reason except that they happened to be in the wrong place at the wrong time. That hostage diplomacy must stop—we all agree on that across the aisle. I look forward to the Minister’s contribution and clarification on those questions.
It is a pleasure to serve under your chairmanship, Mrs Miller. I am genuinely grateful to my hon. Friend the Member for Henley (John Howell) for bringing forward this important debate, which is clearly of interest to right hon. and hon. Members from every part of the House. I am grateful for their informed and passionate contributions.
Getting our approach to Iran right is of incredible importance, and it is clear from how well attended today’s debate is that there is a strong feeling on this issue right across the House. Those feelings have been expressed today. Before I address as many of the points raised as I can, it is right that, as has been mentioned by a number of hon. Members, our criticism—unfortunately, criticism will come—is not of the Iranian people. These are a people—indeed, Iran is a country—with a fantastic history, a marvellous heritage and a tradition in the arts and the sciences. My hon. Friend the Member for Southend West (Sir David Amess) said he has spoken in critical terms about Iran for four decades and hopes that, in the near future, he will be able to speak in positive terms about Iran. I echo that. There is so much about Iran that could be spoken of in positive terms, but unfortunately today we find we are more critical than speaking in praise. It saddens me that that is the case, but nevertheless that is the situation we find ourselves in.
The Government’s priorities with regard to Iran are to prevent a nuclear-armed Iran, to promote stability and security in the region and to secure the permanent release of all detained British dual nationals. My right hon. Friend the Foreign Secretary has consistently made it clear that we favour a diplomatic solution that addresses the international community’s concerns about Iran’s nuclear programme and, in parallel, seeks to address both its destabilising behaviour in the region and its behaviour to its own people within its borders.
President-elect Biden has said that if Iran returns to compliance with the JCPOA, the US will re-enter the agreement and seek both to strengthen and to extend it. This is an important opportunity to restart the engagement between Iran and the United States of America and to realise the full set of objectives set out in the joint comprehensive plan of action, which we support.
In the meantime, we remain clear that Iran must reverse its systematic non-compliance with the nuclear commitments under the JCPOA. We are deeply concerned by Iran’s actions and, in particular, its research and development and stockpiling of low-enriched uranium, which is in breach of the terms of the nuclear deal. If Iran is serious about the JCPOA, it must not implement the recent law passed by the Iranian Parliament to take further steps in violation of the JCPOA. That would undermine the important opportunity to return to diplomacy that the incoming US Administration have offered. Iran has a choice, and we strongly urge it to take the sensible, pragmatic choice of moving back towards diplomacy.
Our objectives remain to use the structures set out under the deal to address Iranian non-compliance and to reopen the door for re-engagement with the United States. We have not yet exhausted the dispute procedures set out in the JCPOA. To advance the discussions, the joint committee of the JCPOA will be held on 16 December at official level and followed shortly afterwards by a ministerial meeting of the JCPOA participants. Iran must engage on a route back to compliance through the joint commission as an essential step to rebuild confidence in Iran’s commitment to preserving the deal. Alongside our E3 partners, France and Germany, we have worked hard to preserve the deal. It currently remains the only way to monitor and constrain Iran’s nuclear programme.
A number of right hon. and hon. Members have mentioned snapback. We maintain the ability to snap back UN sanctions on Iran and we have made it clear to Iran that it must remain in compliance in order to preserve the deal. We will continue to support the deal for as long as it provides the benefits that I have mentioned. We will engage with the incoming Biden Administration to see whether we can strengthen and extend the deal further, to address the non-nuclear malign activity that Iran undertakes against its regional neighbours, because I share their concerns and the concerns expressed today about the continued risk of escalation in the region. Conflict is in none of our interests.
We continue to urge Iran to show restraint and to avoid any actions that might escalate tension in the region, and we echo those calls to its regional neighbours. We have long been clear about our concerns over Iran’s destabilising activity in the region, including, as has been mentioned this afternoon, its political, financial and military support to a number of militant and proscribed organisations and groups, including Hezbollah in Lebanon and in Syria, militias in Iraq and the Houthis in Yemen.
I thank the Minister for giving way; he is very generous. Does he see a possible role for Magnitsky sanctions in relation to any financial facilitation perhaps assisting those sorts of groups external to Iran, so that we can use the might of the City of London to clamp down on any illegal facilitation of that kind of activity?
The hon. Lady makes a very good point. Let us be crystal clear: Iranian support for those groups contravenes UN Security Council resolutions and breaches international law. We currently hold Iran to account through a list of over 200 EU sanctions that are currently in place, including those against the Islamic Revolutionary Guard Corps in its entirety.
The hon. Lady mentioned our new autonomous Magnitsky-style sanctions, as did other right hon. and hon. Members. We have heard those calls. Right hon. and hon. Members will understand that we never discuss future designations under our autonomous sanction regimes, to prevent the risk of individuals removing assets that we might seek to freeze, but the calls for us to review the actions of members of the Iranian regime, in light of the sanction regime, have been heard and noticed.
We continue to support the enforcement of UN prohibitions on the proliferation of weapons to non-state actors in the region. We are committed to work with regional partners, the E3 and the US to find a solution to Iranian proliferation in the region.
Our concerns are not limited to Iran’s nuclear programme or regional behaviour. A number of Members, including the hon. Member for Strangford (Jim Shannon), highlighted Iran’s actions towards its own people and its minority communities. Iran’s heavy-handed response to protests, its restrictions on freedom of expression, belief and religion, its use of the death penalty and its continued use of arbitrary detention, including to British dual nationals, remain of deep concern to the UK, and we remain opposed to them.
We continue to make clear to the Iranians our concern and opposition to their repeated, persistent violation of human rights. As has been mentioned by a number of Members, I can assure the House that the safety and good treatment of all British dual nationals in detention in Iran remains a top priority for the UK Government. We will continue to lobby at all levels for the immediate and permanent release of all British dual nationals in arbitrary detention, so that they can return home to the safety of their country and the embrace of their loved ones.
The Foreign Secretary recently summoned the Iranian ambassador to hand over a letter from E3 Foreign Ministers, expressing our concern about the grave human rights violations in Iran, including the arbitrary detention of dual nationals. We are deeply concerned that Iran has issued new charges against Nazanin Zaghari-Ratcliffe. These are indefensible, unacceptable and unjustifiable. We have been consistently clear that she must not return to prison. The UK Government, from the Prime Minister downwards, remain committed to doing everything we can for her and the other British dual nationals held in detention.
We want to see a peaceful and prosperous Iran, that is famous for its art, culture and history, not for its destabilising influence in the region and the world. We want to see an Iran that does not pose a threat to the UK, or to our friends and allies.
I thank my hon. Friend for raising that point. I cannot give him clarity on that in today’s debate, but I recognise that those calls have come from every corner of the House and that there is cross-party support for that. Again, it will be noted, and I genuinely take his and other Members’ position on this seriously.
Clearly, we want to see Iran abandon its intentions to develop nuclear weapons, but we also want to see it act as a good neighbour and a responsible regional power. We want to see it end arbitrary detention and improve its domestic human rights record, and the United Kingdom Government will continue to engage with international partners and directly with the Government of Iran to bring that about.
We have to understand that our approach needs to be based on a number of elements, including engagement and incentives, but also pressure, delivered bilaterally, through partners, and multilaterally. The future relationship between the UK and Iran, and between Iran and its regional partners, could be infinitely better than what we see at the moment, but ultimately it is in the gift of the leadership in Tehran to make that happen. I urge them in the strongest terms to take the actions to do so.
I thank all hon. and right hon. Members for their contributions to what has been an excellent debate. It is quite reassuring to me that everyone who has stood up to speak has agreed with what I said. I take that not as a compliment to me, but as a united effort to give to the Minister, whom I thank for his response, which covered much of the ground. I think he understands that the strength of feeling on this issue is clear and that Iran’s actions harm our interests as well as those of a number of our allies.
As the new Biden Administration take office, the UK has an important role in ensuring that it waits until Iran returns to compliance with the JCPOA before giving any sanctions relief prematurely. As colleagues have mentioned, a comprehensive deal that addresses Iran’s ballistic missile programme, support for terrorism and human rights abuses is the only way forward. In the meantime, I urge the Minister to look at Magnitsky sanctions for those who are abusing human rights in the area. Once again, I thank all Members for their contributions to this debate.
On a point of order, Mrs Miller. I would like to convey to you, and perhaps you can convey it to those responsible, that Westminster Hall has become a cold house for many people, not because people are not allowed in here, but because the heater over there, and I suspect others, is blowing cold air, and the heaters behind us do not work. I do not want to make a complaint, but really—I say this respectfully—there are ladies here. I say this because yesterday there were ladies coming into Westminster Hall and they took their scarves and overcoats off, but after half an hour in here, their scarves and overcoats were back on and their collars were turned up. Really, we need to do something. Can I perhaps ask you, Mrs Miller, to please do that? Thank you.
I am sure that many hon. and right hon. Members will be very thankful to the hon. Member for putting that on the record. I can assure him that his comments will be relayed back to the Chair of Ways and Means to see whether we can get some action on that.
Question put and agreed to.
That this House has considered Government policy on Iran.
Rural Scotland: Excess Delivery Charges
[Christina Rees in the Chair]
I beg to move,
That this House has considered excess delivery charges in rural Scotland.
It is a pleasure to serve under your chairmanship, Ms Rees. The word “rural” can sometimes conjure up an image of a far-flung place, but this issue affects many communities in Moray. Although it is a rural constituency, it is also made up of substantial towns, such as Elgin, Forres, Lossie, Buckie and Keith. This is an issue that also affects the city of Inverness, the capital of the highlands, as well as many communities, towns, villages and cities north of Perth. Although we are talking about rural delivery charges, they have a big impact on many urban areas as well.
I want to start by giving a little background on this issue, which I have raised in the main Chamber and Westminster Hall on many occasions, including during Prime Minister’s questions. Indeed, almost three years ago to the day, I led a similar debate in Westminster Hall. It was a 90-minute debate, and the room was full of Scottish and Northern Irish MPs raising concerns on behalf of their local constituents. Had today’s debate not been a 30-minute debate, we would have seen similar attendance by MPs across the north of Scotland and other parts of the country, whose constituents continue to suffer as a result of excess charges for delivery.
This is also something on which I got the Scottish Affairs Committee to have an inquiry. I was pleased that companies such as Amazon came along to give evidence and commit to tackling any issues that were reported to them about delivery charges being added after a sale had apparently been completed. Indeed, with one sale that I reported, the seller ended up being brought to task and punished by Amazon for adding a surcharge to delivery after a purchase had been made. I will mention later the work I have been doing with the Advertising Standards Authority, which has done a lot of work to tackle this problem and to take enforcement action against companies and couriers who add excessive charges.
I would like to praise Citizens Advice Scotland, which has done a tremendous amount of detailed research and work on this subject. The briefing that it provided ahead of the debate sums up a lot of the issues that we face. Research by Citizens Advice Scotland has found that consumers living in affected areas pay on average 30% to 50% more for delivery of goods bought online than consumers in other parts of Great Britain. Sometimes we think this is just about consumers sitting at home and making individual purchases from online retailers, but the problem also affects many small and medium-sized enterprises in Scotland. The report goes on to say that one in four of the Scottish SMEs that were questioned about this said that they had ordered items online for businesses and were asked to pay an additional charge, so it is affecting our businesses as well as individual consumers.
Clearly, the covid pandemic has increased awareness of this issue. For weeks in the early stage of the pandemic, people across the country were asked to stay at home and go out as little as possible, so many turned to online retailers for purchases. That has led to a surge in online shopping and more parcel deliveries. As I have mentioned parcels and we are in December, it is only right to mention the outstanding work that our posties up and down the country are doing at this extremely busy time of the year and, indeed, all year round. Sadly, unlike in every other year since I have been an MP, we cannot go and thank them in person in the run-up to the Christmas period, but I am sure the Minister and the whole House agree that they do incredible work at this busy time of the year. They have our greatest thanks for that.
It is not surprising that in the early months of the lockdown during the covid pandemic, when people had more time on their hands and were at home rather than getting out and about, they were shopping more online. For people in Moray and other parts of Scotland, however, the ease of online shopping comes with a heavy price: the surcharge they have to pay. If someone has a postcode in Moray, the Highlands or parts of Aberdeenshire, they face a familiar problem. They try to make a purchase, look for a product, browse and then when they put in the postcode or address, they are suddenly faced with an additional charge simply to have it delivered. Now, hon. Members do not need to be experts in geography to know that Moray, the Highlands and Aberdeenshire are all part of mainland UK. They are part of the mainland, yet we are often charged as an island community. Moray is attached to the rest of the United Kingdom in the same way that Highlands and Aberdeenshire are, yet we are faced with charges because some companies do not believe we are part of mainland United Kingdom.
A recent paper published by the Scottish Parliament Information Centre estimated that shoppers had paid an extra £43.1 million for parcels to be delivered in 2020, up from £40 million in 2019 and £38 million in 2018. That is not the cost of the purchases—that is simply the cost to have these parcels delivered to parts of Scotland. That is the surcharge for my constituents and constituents across the north of Scotland.
The report found that the covid-19 lockdown led to a big increase in online shopping, which is not surprising. People had no choice in many cases but to shop online, given they were told to stay at home. Once again, the worst-affected areas were Moray, Highlands and Aberdeenshire. Moray constituents purchasing online paid an extra delivery charge that has mounted up to £3 million.
Unfortunately this is nothing new; I have a long list of constituency cases of people who have tried to challenge these rip-off fees—I will go into more detail later—but many people feel like they are banging their head against a brick wall. When complaints are made to stores or online outlets, courier companies are often blamed. Taking the courier companies to task can be tricky. Often, they simply state that their policy is to charge more for deliveries to certain locations. That in itself should be open to challenge, and I hope that the Minister can look at what the Government can do with couriers and retailers to try and get some form of balance in the charges that they are imposing.
It is not all doom and gloom. We have made some progress in the time that I have been working on this issue, particularly where companies advertise that they say they will deliver for free—no charge at all—or a flat rate everywhere in the United Kingdom, only for a surcharge to be added. Where it has been clearly defined that they offer free delivery or a set charge across mainland United Kingdom, if that is not the case when someone goes to make a purchase, I routinely take up cases with the Advertising Standards Authority.
One recent case involved a constituent who was getting a package from a gin distiller in another part of Scotland. His home is in Spey Bay in Moray, 130 miles away from the retailer, and he was told he did not qualify for free delivery, despite it being explained on their site. However, if he had sent the package to his friend, for whom he was buying the product, in Truro in Cornwall— 596 miles away—it would be shipped free of charge. There is no rational way to explain that disparity. It simply cannot be right.
I was recently passed an email exchange between a customer and a business, and it transpired, as it often does, that the blame for the extra charges was laid at the door of the courier. Again, I raised it with the Advertising Standards Authority, which I am pleased to say responded quickly and has told me that an enforcement notice will now be issued. Citizens Advice Scotland note that enforcement notices were issued to
“almost 300 online retailers during 2018/19”
and that work resulted in a “97% compliance rate.” So we are making some progress.
Sadly, it is not enough, because constituents and individuals are still suffering. People go around in circles trying to claim money back for the extra charges. In one case, a constituent complained that he had been hit with an additional charge of £60 for delivery of a package that weighed less than a pound. In many other cases, people do not complain to their MP; they just grin and bear it, as they feel they have no choice. It is clearly not fair to ask anyone to pay more for delivery of a parcel because they happen to live in the northern half of mainland Scotland. It has gone on for far too long and needs to stop.
Up to now, there have been efforts to give regulators in this area more teeth. In 2018, the Committee of Advertising Practice, which sets the rules that the Advertising Standards Authority enforces, made very clear that it would act to ensure a level playing field across the United Kingdom. It said that companies selling goods online had to abide by its guidance, and it specifically ruled out misleading claims of UK-wide delivery if that is not what they offer. Any surcharges applying to parts of Scotland and Northern Ireland should be clear and up front so that the buyer knows before he or she pays what the final cost will be. That is even meant to apply where there is a headline claim of free UK delivery, for example, but the small print might say something like, “exemptions for north of Perth”. Even in those cases, a company would be found to be misleading customers. The problem is that, two years on, it is still happening and, as far as I am concerned, if a company advertises free delivery or a flat-rate delivery all over the UK, it should stick to that.
Another example is from a constituent in Fochabers who had found what he was looking for and had seen “free UK delivery”, but when he put in his postcode, he was hit with a £75 delivery charge. There are more cases like that. If the companies do not stick to their promises, considerable penalties should be applied. Any repeat offenders should be hit with an increasing severity of sanctions. It is clear that a letter being sent to say that this should not happen again does not do any good. Let us be clear. The industry should not have to wait for Government intervention before doing what is right; it should be able to come up with the solutions to avoid the extra charges. That applies to retailers as well as couriers.
Any online retailer should be keen to keep customers onside. They should not simply shrug their shoulders and say that the charges are set in stone when they clearly are not. If enough companies decide to do something about it, we could finally make some progress.
Likewise, the courier firms could work together to come up with a plan to reduce the burden on buyers to pay unnecessary surcharges. That could take the shape of a shared distribution centre in the highlands that reduces the distance between the warehouse and the delivery address, or a simple commitment to treat mainland Scotland in the same way as mainland England and Wales. I do not think we are asking for too much.
As I referred to earlier, in the past three years more than £100 million in additional charges has been paid by shoppers in the north of Scotland—a huge sum of money. At a time when our economy is struggling, people are losing their jobs and seeing their working hours cut, every little helps. That money could go back into the businesses rather than into paying excessive charges. Let us not allow this discriminatory practice to continue. Let us stand up for all the people who are being ripped off in Moray and across parts of Scotland on a daily basis. Let us say that enough is enough. Let us ask the industry—the retailers and the couriers—to get their house in order. If they will not do that, the Government should take steps to address the inherent unfairness.
I held such a debate as this three years ago on 20 December 2017. I remember the date well because it was my wife’s birthday, so I now have 11 days to make sure she gets the right present for this year’s birthday. I will make sure I buy local in Moray to avoid any excessive delivery charges. By having this debate at this time of year once more, we can again impress on the Minister and any businesses or couriers watching that the practice has gone on for far too long. We have suffered for too long in Moray and parts of the north of Scotland because of the disparity affecting people living in different parts of the country. We can end this practice and, with the Minister’s help and some encouragement from the Government, I am sure we can get these businesses to realise the error of their ways. It would be a cheerful festive message to send out that we are once and for all going to deal with this issue.
It is a pleasure to serve under your chairmanship, Ms Rees. Thank you for stepping in to enable my hon. Friend the Member for Moray (Douglas Ross) to make his really important case. I congratulate him on securing this debate. The issue continues to be important for his constituents and for those of other Members in the similar debates that he has led over the years. He has been a dogged champion for his constituents in Moray on this and other subjects. They should be proud to have someone championing people who live in the highlands and other parts of rural Scotland.
Delivery charges are part of the underpinning of trade within the UK, so I have a lot of sympathy with my hon. Friend’s concern that some consumers in parts of Scotland are charged differently from consumers in other parts of the UK. I also recognise that similar issues exist for consumers in Northern Ireland.
I am pleased to be able to take part in today’s debate, and to outline the progress that has been made since the previous debate back in July 2019. Let me first of all remind colleagues of our general approach as a Government. The Government’s aim in relation to post is to secure a sustainable, efficient and affordable universal postal service. With regard to delivery charges specifically, it is crucial that retailers are up front about those charges, as my hon. Friend eloquently articulated: where they deliver to, what they charge, and what premiums apply, if any. Consumers then know where they stand, and can make an informed decision before they purchase. That is what the law requires.
Our legislation is robust. The Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 set out that information given by traders to consumers regarding delivery costs, including any premiums, must be up front and transparent before a transaction is entered into. Any consumer who believes that these rules are being breached should report it through the specifically set up deliverylaw.uk website, so that incidents are recorded and appropriate enforcement action can be taken.
A significant amount of work has been undertaken by the Advertising Standards Authority—I am glad to hear about my hon. Friend’s work with the ASA on this issue—and by the Competition and Markets Authority to ensure businesses comply with that legislation. Where that compliance has not happened, both bodies have on the whole acted swiftly. The ASA has issued enforcement notices to online retailers whose parcel surcharging practices have been reported, and has achieved a compliance rate of over 95%. The CMA has issued a number of advisory notices to the major retail platforms, and I take the point my hon. Friend makes about letters: just telling companies not to do it again goes part of the way, but clearly those companies need to actually change their behaviour, rather than just getting a warning letter. We need to see the results of that. The CMA has also published guidance to retailers who sell via those platforms, and continues to work through primary authorities to ensure improvement in these areas.
On the legal compliance side, significant progress has been made, and our enforcement partners will continue to monitor and take action where necessary. However, the Government recognise that the delivery costs to reach some parts of the UK can be higher, and strongly encourage businesses to, as far as possible, provide consumers with a range of affordable delivery options. To help achieve this, we have ensured that everyone, including retailers, has access to an affordable postal service for deliveries across the UK under the universal service. Through the universal service obligation, Royal Mail delivers parcels of up to 2 kg six days a week at uniform rates throughout the UK. I echo my hon. Friend’s thanks to posties up and down this country, in every part of the UK, who have been working through the pandemic to make sure we remain connected even when we are locked down. As my hon. Friend has said, it is a shame that we cannot join them in the sorting office to wish them a merry Christmas and thank them for all their work as they enter this particularly busy time, but this is a good platform to be able to echo his thanks and season’s greetings to them all.
Let me make this clear: it is up to businesses to respond to customers’ needs and determine the most appropriate delivery options for their customers. There are no rules to prevent the differential charging between businesses for deliveries, and I do not believe, for example, that imposing a price cap is necessarily a practical answer.
The postal sector regulator, Ofcom, recently published new information on how this part of the market is operating as part of its annual post monitoring update. Ofcom collected information on the extent to which parcel operators vary the price that they charge online retailers for bulk delivery of parcels to different parts of the UK. The long and the short of it is that some operators do vary their prices, whereas others do not.
The information gathered by Ofcom showed that operators take different approaches to the pricing of parcel delivery services: two large business-to-consumer operations, Royal Mail and Hermes, do not set different prices based on location. However, the geographical profile of deliveries can still play some role in determining the uniform price that these operators negotiate with retailers, especially if volumes are skewed towards a particular part of the UK.
I again go back to the Citizens Advice Scotland briefing for today’s debate. I am looking forward to attending the annual general meeting in Moray tomorrow, where I am sure we shall discuss this issue. One of its recommendations is that consideration should be given to whether Ofcom requires further regulatory powers in relation to the parcels market, following on from the publication of the recent data on this market. Is that something that the Minister would consider, and take up with Ofcom?
Obviously we work with Ofcom; it straddles a number of different Departments. We will always look at issues with it, as we do with other regulators, to make sure it has the powers to do the job it needs to do.
As I was saying, there are a number of delivery options that businesses can adopt. Some have minimal delivery charges, and others are more bespoke models. A competitive market in delivery charges, which will ultimately help consumers, should put downward pressure on the charges applied by retailers and delivery operators. There are positive signs that things are changing in that regard.
In August, for example, Argos announced that it would deliver large items to more than 98% of residents on the main Scottish islands, bringing deliveries to 41,000 more homes and another 56 islands, including Shetland, Orkney, the Inner Hebrides and the Western Isles. In 2019, Wayfair took the decision to scrap delivery charges for orders over £40 anywhere in the UK and charge a standard rate of £4.99 for orders below that threshold. Those are the types of commercial decisions that will set businesses apart from their competitors, drive competition and lead to lower costs.
Let me reassure my hon. Friend that the Government are not complacent. The consumer protection partnership chaired by officials in my Department continues to work on the issues. That goes to the point about working with companies to help foster the necessary competition. I am more than happy to continue to work with my hon. Friend so that we can help, convene, push and shape the conversation. Ultimately it is a free market; we are both free marketeers. However, we can make sure that consumer voices are heard, so that if consumers in his constituency have complaints, and if surcharges are imposed after the event, the consumers’ voice will be amplified and heard, through his work and through the Government, to stop unfair practices.
Alongside the work of the consumer protection partnership, and others, Ofcom will be undertaking a review of its future regulatory framework for post over the next year. A call for inputs from stakeholders will be launched before the end of the financial year and a statement on the future framework is expected to be issued by the end of the 2021-22 financial year. The review will consider issues affecting the broader postal sector, as people’s reliance on parcels continues to grow.
I am unconvinced of the need for further legislation, but my hon. Friend talked about whether there is a need for new powers, and what more can be done to encourage the market, drive competition and make sure we enforce the current regulations and legislation correctly. My priority is exactly that—that robust enforcement of the law should continue to ensure that customers are not surprised by delivery charges, and that competitive pressures should continue to drive down delivery charges, as has already happened. I congratulate my hon. Friend once more on securing the debate and on his further championing of his constituents.
Question put and agreed to.
Covid-19 Support Schemes: Ineligible People
[Relevant Documents: e-petition 310515, Coronavirus Support Package for Directors / Shareholders of small Limited Co’s, e-petition 319899, One-off Grant To Be Paid To Anyone Who Has Not Benefited From A Covid-19 Scheme, and e-petition 310471, Provide COVID19 income support for the newly self-employed, without HMRC records.]
I remind hon. Members that there have been some changes to normal practice in order to support the new call list system and to ensure that social distancing can be respected. I remind Members that they must arrive for the start of debates in Westminster Hall. Members are expected to remain for the wind-ups, provided there is space in the room. Members are also asked to respect the one-way system around the room. Please exit by the door on the left.
Members should sanitise their microphones before they use them, using the cleaning materials that have been provided, and they should dispose of the materials they have used as they leave the room. Members in the latter stages of the call list should use the seats in the Public Gallery and move on to the horseshoe when seats become available. Members can only speak from the horseshoe.
I beg to move,
That this House has considered support for people ineligible for Government covid-19 support schemes.
It is a pleasure to serve under your chairmanship, Ms Rees.
“Feelings of betrayal, hopelessness, abandonment and not belonging have caused me immense anguish over the last 9 months”.
Those are the words of Lisa from London, who spent 34 years as a pay-as-you-earn taxpayer and was newly self-employed in April 2019.
I am incredibly grateful, as are the many thousands of people who have been in touch—both directly and indirectly—to share their stories with me, to have been granted this very important debate, which also addresses three petitions. I am aware that many Members were unable to make the crowded call list today.
It is 261 days since the furlough scheme was announced and 258 days since the self-employment income support scheme was announced, yet those very welcome schemes had gaping holes in them. We know that some 3 million people—approximately one in 10 of the workforce—fell through those gaps. Often, they were ineligible for universal credit, so they were left without a penny of Government support over the past nine months. Their plight has been raised time and again in this place, and the largest all-party parliamentary group has been formed to champion their cause. Yet the Treasury has repeatedly refused to do anything to address this glaring injustice.
Those who have been excluded span many different categories of workers, including, but not limited to, employees who were denied furlough or were ineligible for it, which includes new starters; the self-employed, including those newly self-employed; those over the £50,000 threshold; those who earn less than 50% of their income from self-employment; directors of limited companies who are paid annually or via dividends, or directors of such companies that are not yet in profit; PAYE freelancers; those on zero-hours contracts; and new mothers. These 3 million individuals are from all walks of life, from beauticians to builders, teachers, driving instructors, taxi drivers, lawyers, those working in our world-leading creative industries, and many, many more.
I will address up front some of the misrepresentations that exist, then touch on the impact of this injustice and, importantly, refer to some of the solutions that have been proposed. To date, the responses that we have had from the Government include, “It is too difficult and complex to include these groups.” I am afraid that, nine months on, that just does not wash. I understand that the schemes were set up at speed, but there has been ample time to work through and implement solutions. Another response was that the schemes were targeted where help was most needed. It is clear from the thousands of case studies received and the surveys conducted by the House of Commons digital engagement team, the Organise group and ExcludedUK that that is simply not true. There are heartbreaking stories of desperate need, including the use of food banks and people not being able to switch the heating on this winter.
There has, at times, been a suggestion that some of the excluded are highly paid and dodging tax in some way, especially those paid via dividends. My constituent, Fraser Wilkin, who runs a travel company in Twickenham, pays himself by dividends because of the huge fluctuation in annual income due to events outside his control, such as the coronavirus. If he had drawn a regular salary through the year, he would have been unable to fulfil his statutory and contractual obligations to his clients, in terms of prompt refunds when their holidays were cancelled due to the pandemic.
Universal credit is cited as the fall-back. A survey of more than 3,000 individuals found that almost three quarters were unable to access universal credit. Let us face it: we all know that universal credit is not meaningful support. Otherwise, the Government would not have felt the need to create the furlough scheme or the self-employed income support scheme.
We know that the mental health impacts on many of those excluded from support have been stark. There have already been eight reported suicides, and one respondent to the House of Commons digital engagement team said that she almost took her life several times, and one week spent every day in contact with the Samaritans.
The Centre for Mental Health has said that covid-related unemployment has caused an additional almost 30,000 people to request services for depression. Those mental health impacts spread well beyond the 3 million individuals to their families and support networks. Many report having to move back in with elderly parents and rely on their pensions. Marriages and relationships have been strained or ended. Parents of young children talk about the stress it is putting on their children. An anonymous respondent from the north-west said:
“my mental health has plummeted and my family are anxious too, so much so my teenage daughter is getting counselling for her anxiety”.
Personal debt is rising. Rachel from the south-east says:
“I am selling my house, cannot get a mortgage, selling my personal belongings just to put food on the table. Getting into so much debt. Never been so scared in my life. I’m also a single parent and it’s heart-breaking telling my daughter that Santa can’t afford much this year”.
In terms of the wider economic impact, those businesses and entrepreneurs, who are natural risk-takers, are the wealth creators and the lifeblood of our economy. Retaining their skills and health, and stopping their businesses going to the wall are critical to our post-covid economic recovery. It is incredibly short-sighted to cast them aside in this way.
Moving on to solutions, many proposals have been put forward by a number of groups, such as the Association of Independent Professionals and the Self-Employed, the Treasury Committee, the Federation of Small Businesses, the gaps in support all-party parliamentary group and the various representative groups for those who have been excluded.
I have limited time today, but some of the solutions include using HMRC data to support claims for those with PAYE income history; widening the accepted evidence for demonstrating proof of employment; extending cut-off dates; looking at the two specific schemes that have been put forward for directors of limited companies; removing the 50% rule; removing bereavement payouts and carers’ allowance from the calculation of PAYE income; and extending the criteria for discretionary business grants. Many of those solutions just require imagination and will. Plenty of experts stand by to help make them implementable.
I want to conclude by sharing from a children’s book sent to me by Kev Payne, who was a teacher and became an illustrator in 2018. He is ineligible for support because of the 50% rule. He wrote a story to try to explain how he feels. In it, the mice are the taxpaying workers and the bear is the Government. A storm hits and the bear provides food and shelter for all the animals, but the mice are left out and told that there is no space for them:
“‘But I gave you my food’, said Mouse. ‘You said you would help me.’
‘I cannot help you now,’ said Bear. ‘I will see you when the storm is over.’
‘But…’ began Mouse. Bear glared and growled at Mouse. It turned its vast back against her.”
My plea to the Minister is to listen to how these hard-working, tax-paying people are feeling and to look at the long-term impact of his policy. The Chancellor does not have to be the big, bad bear; he can be Santa Claus this Christmas.
I pay tribute to the hon. Member for Twickenham (Munira Wilson) for securing this important debate. I am delighted to co-chair the gaps in support all-party parliamentary group. We are all here today bringing the case to this House.
Blue Collar Conservatism, of which I am a founder member, set up the campaign asking for supermarkets to return their covid business exemption, specifically with the purpose that that money would be redirected to those who have had no support during this period. We met with Tesco, Asda, the British Retail Consortium and others. They have done the right thing, stepped up to the plate and committed to returning that money. I pay tribute to those who have done so.
My message to the Minister is that that campaign specifically aimed to redirect that money to those who have not had any money. Having spoken to those firms, that was the basis on which they have handed the money forward. I hope the Minister will act in the same faith and spirit as those supermarkets that handed over that money and support for those people.
I want to mention two big supermarkets that have not yet committed to give that money forward: Iceland and the Co-op. I ask the shadow Minister to tell the shadow Chancellor, who is a Labour and Co-operative Member, to speak to her friends to ensure that the Co-op pays that money back, unless it thinks it is more in need than others. We think it should do the right thing, join in with the other supermarkets and hand that money back.
I think we should start by thanking the Government for what they have done to support people through a very difficult time. The Government have spent some £210 billion in dealing with the pandemic. That is an unprecedented fiscal response. We should put on record our thanks for the scale of that intervention towards people who are in more regular employment.
The scale of that generosity brings into question its allocation, when people in so many groups have not received the same scale of Government funding as people in PAYE employment. It is not just about individuals. I have spoken about the events industry before and the exhibition industry. I spoke with the British Events Industry Coalition earlier this week. In the weddings industry, I think of Eggington House in my constituency.
In terms of individuals, we are talking about people who work with a construction industry scheme card, directors who pay themselves through dividends and the newly self-employed. I had a letter today from a driving instructor. He only set up in October 2018. That was not his fault. He has done everything he has been asked and he pays what he should, but he is left out. This affects beauticians, freelance musicians and so many more.
The Office for Budget Responsibility, in its July 2019 fiscal risks report, put the tax reduction for someone on £70,000 being paid through dividends at 11.6 percentage points. That is slightly less tax, but those people are getting very much less than 11.6 percentage points lower than what people are getting through the furlough scheme. I ask the Treasury to look again—it has clever people—and to please remember these 2.9 million people who have been left out so far.
It is a pleasure to serve under your chairmanship, Ms Rees.
Yesterday I chaired a meeting of the gaps in support all-party parliamentary group, during which we heard from Andy Burnham, Dan Jarvis and Steve Rotheram about how the metro Mayors are working to support businesses in their areas to plug the gaps left by Government.
Dan Jarvis, the Mayor of Sheffield, explained that an estimated 68,000 people are excluded from support in Yorkshire. At 13.1%, Yorkshire has the highest proportion of new starters in the UK, but because of a fluke of timing they have been thrown into poverty and homelessness, joining the 1 million freelancers now in debt, according to IPSE. Entrepreneurs, business people, creatives and strivers who have worked with their employers and been paid in any way the employer deems more convenient are now paying a heavy price for that flexibility.
I will share a couple of stories. Nicola is 46 and a single mum of two girls in West Yorkshire. She is on a zero-hours contract with a publicly funded charity, working in the supported living sector and paid the minimum wage. She asked to be furloughed but was told that she could not because her job was publicly funded, and was then told that there was enough work. Her application for unemployment benefits was refused as she was still under contract and had received a wage. Nicola was not just excluded from support; she was refused support and had to live on child benefit, going deep into arrears.
Sadly, as Steve Rotheram said yesterday, “whatever it takes” has turned into “whatever we will give you”. Andy Burnham said that it is up to politicians to stand up for people against the machine of Government and to mitigate risk. This is now an opportunity for the Government to listen to the solutions that they have heard this afternoon and put them in place to support the millions who are excluded and who face the hardest and harshest of winters.
I want to make a few brief remarks. I congratulate the hon. Member for Twickenham (Munira Wilson) on securing the debate.
I recognise the massive effort made this year to provide broad support right across the economy. In its recent assessment of the UK’s economic response, the International Monetary Fund praised our Government’s actions as
“one of the best examples of coordinated action globally”,
saying that they had
“helped mitigate the damage, holding down unemployment and insolvencies.”
I take my hat off to the Chancellor. His policies mean that many more jobs will be saved and our economy will experience a faster bounce back.
I also have a lot of sympathy, however, for specific businesses and sectors in our economy that have missed out, often through no fault of their own. For some, the types of support were not relevant or they had unfortunate timing issues. This includes a number of my constituents, and I want to give just three examples.
First, Jo from Brackley runs a building maintenance company. She has received only £550 a month since lockdown and has lost thousands of pounds’ worth of work. Secondly, Shirley runs a small, independent clothing business. She has received no income for herself or her business and is having now to sell all her stock at a loss as well as make her staff redundant. Thirdly, Mark and Louise are, along with so many other wedding and event organisers, unable to operate at all. They have experienced almost 100% cancelled bookings and a total collapse in income.
I think that most people in the country would agree that this Government have gone further than any other Government to protect livelihoods as well as lives. I agree with other hon. Members, however, that now is the time to consider those left behind and see what we can do to help them survive into 2021. If we do that, they can start to rebuild their businesses and to create new jobs, as they have done so successfully in the past.
It is pleasure to see you in the Chair, Ms Rees, and I am grateful to the hon. Member for Twickenham (Munira Wilson) for securing this debate.
I have repeatedly called on the Government to listen to the concerns of people who were not covered by the self-employment income support and job retention schemes. There has still been nothing beyond social security for those who have been excluded from support from the start, and many self-employed people remain cut out from social security support for measly reasons.
My postbag has been full of real-world examples caused by the Government’s callous neglect in recent months—from photographers to driving instructors, events organisers and wedding planners. My constituent Simone is a prime example of those who have been repeatedly allowed to fall through the net. She started out as a self-employed driving instructor very recently, so she does not qualify for the support scheme. She also cannot receive universal credit, as her partner is employed. Although she was able to start working again between the first and second lockdown, the latest restrictions mean that she finds herself unable to earn and without the ability to access support.
The Chancellor said he would do “whatever it takes” to support people and businesses through the economic impact of the pandemic, but millions across the country, including many in my constituency, know that he has not delivered on that promise. That has left those affected in Portsmouth feeling like “collateral damage”, as my constituent described it, abandoned by the Government in the face of unprecedented uncertainty. That is also economic illiteracy.
We are all asking the same question: when will the Government finally support my constituents and those across the country who have been allowed to slip through the safety net for far too long?
It is a pleasure to serve under your chairmanship, Ms Rees, and I congratulate the hon. Member for Twickenham (Munira Wilson) on calling this important debate. We must applaud the vast scale of financial support provided to many millions since March. It is unprecedented and rivals that of any western country, but there have been exclusions that have caused distress and suffering for many—the self-employed, freelancers, zero-hours workers and entrepreneurs who have taken huge risks to start new businesses and create jobs and opportunities. Those people have worked hard, but when they were most in need of support, they found themselves left behind.
On Small Business Saturday at the weekend, I visited businesses in Frome and met Liz Huband, the owner of Badger House Leather in the town’s fantastic Black Swan arts centre. Liz started her business two years ago, self-funding all of it. Her business was growing, but when the pandemic hit, she had to stop trading. In order to keep funding it, she worked half time supporting social work education. Because of that, she became ineligible for the self-employed income support scheme. The support system has entirely let her down; it has forgotten her. I have other examples, as I am sure we all have, but in two minutes I do not have the time to mention them. Some 3 million people are unable to reach meaningful support, which is a catastrophe for so many lives and livelihoods.
With vaccinations starting this week, there is an end in sight to the pandemic, but in rebuilding our economy, we will need entrepreneurs such as Liz to drive the recovery. I urge the Minister to look again urgently at ensuring that support is allocated fairly and proportionately to all those who have felt, until now, entirely left behind and forgotten.
It is always a pleasure, Ms Rees. Like others, I am angered by the Government’s blinkered obstinacy in denying the existence of 3 million people—people such as my constituent Chris Anderson, a self-employed filmmaker for 37 years, who has been denied support and is surviving on limited benefits and dwindling savings. John Powell is from a family of showmen based in Ocean Beach Pleasure Park, who have been in the business since 1847 and are now being forced to sell some of their fairground equipment just to get by. Their business survived two world wars, but I am fearful that they will not survive this Tory Government.
In March, my constituent Neil Jelly lost 80% of his business revenue overnight. He has had to turn to universal credit and is seeking advice on how to close down his business. He said to me that this year has been a mental and emotional struggle—a year ending with him trying to explain to his young children that their dad failed in his business and Christmas will be different this time. Of course, Neil has not failed. He has been failed by an uncaring Government.
Universal credit is not the answer; not everyone is eligible. Every single time I hear a Minister speak of how wonderful it is, I am more convinced that they have literally never met anyone who claims universal credit. Being on universal credit is a miserable and soul-destroying experience. It is no coincidence that the rise in UC claims and the refusal of claims is matched by empty food bank shelves up and down the country.
Poverty and debt affect individuals, and local and national economics. It makes no sense at all to continue denying people support. The all-party parliamentary group and the Treasury Committee have provided solutions. I sincerely hope that the Minister will not revert to his script today and close his ears, as the rest of Government have, to this appalling scandal.
Since the start of the pandemic, the Treasury has implemented a suite of support measures that have been nothing short of extraordinary. For most people and most small businesses, money was received in a timely manner, and proved vital in protecting businesses and the employees they support. However, a large number unfortunately fell through the cracks. Earlier in the year, the Financial Secretary to the Treasury accepted that certain individuals were unintentionally excluded from the Government’s financial support measures, but highlighted the difficulties of assessing those on a case-by-case basis.
We are nine months on from March, and a growing number of individuals have not received support throughout the pandemic, despite paying their taxes. One example in my constituency is testament to that. Graham Whitehead, a project manager in the arts and culture sector, left his full-time employment in January 2019 and decided to become self-employed. As he became self-employed in January, he did not have the required tax returns over a three-year period and did not meet the threshold of 50% self-employed income for the tax year. As of 10 July 2020—127 days after the industry was closed—he had received a total of only £6.27 in universal credit from the state.
There are many cases across the country like Graham’s—cases of individuals who have bravely taken a leap, spurred on by their entrepreneurial desire to forge their own path. Those excluded are the risk-takers who this Conservative Government should be encouraging. That is deeply unfair. They feel let down by the absence of support.
Over the past few weeks, support provided by Her Majesty’s Government has been returned to the Treasury from Tesco, Sainsbury’s and other large supermarkets. These funds should be repurposed and directed towards those who have yet to receive adequate support. Her Majesty’s Government have taken many truly unprecedented steps to protect lives and livelihoods throughout the pandemic. However, we should endeavour to ensure that no one is left behind.
We are here yet again to make a plea for our constituents in Greater Manchester, 130,000 of whom have fallen through the gaps—people like three of my constituents. There is Luana, who runs a small interior design company; Shan, who is a sound engineer—we make the best sound engineers in the world, and Shan tells me he is really worried that there will not be a live music industry to come back to; and Zena, who runs festivals. They were all recommended to pay themselves through dividends because they have irregular income. They are not people who invested in companies to make a profit. This is their income and their wages, and they are really struggling. Can the Minister look at the proposal from the Federation of Small Businesses for something like a director support scheme? The evidence can be based on trading profits. If we do not support such directors, their businesses will fail, and the people who work for them and with them will fail as well.
There are solutions out there for the various types of people who have fallen through the gaps, including the newly self-employed, the 50% limit people, the self-employed with a profit cap limit and pay-as-you-earn freelancers. There are potential solutions if the Government will just look at them. We are tired of making these arguments, and I am sure the Minister must be tired of hearing them. I know he is a decent guy. Will he commit today to looking at those proposals, including those from Prospect and the Broadcasting, Entertainment, Cinematograph and Theatre Union? I am sure he will have received their paper, which proposes a number of solutions for those people.
The constituents who are coming to us are hard-working, decent people. Some of them are looking at selling their houses and moving back in with their parents, or selling their possessions. They are really struggling, and the Government appear not to want to listen, so I ask Minister today to please listen.
I thank the hon. Member for Twickenham (Munira Wilson) for securing the debate.
It is true that where the Government schemes have worked, they have worked well. It is also true that Government schemes are not an entitlement, but a use of very scarce taxpayers’ money. If we are honest with ourselves, many of those 3 million people are probably not high on the list of those who are in greatest need, because they earn a lot of money, or because a large proportion of their income comes from other areas. Notwithstanding, some specific areas need focus.
It is depressing that too often the Treasury looks like a wholly owned subsidiary of Her Majesty’s Revenue and Customs, rather than having a broader view of the economy as a whole. I want to focus on company directors, because that group, as other hon. Members have said, has the grit and determination that will be so crucial to our recovery.
Becoming a company director is often a moment of pride. It says, “I’m going to do something. I am going to make something happen.” It is a tangible moment that defines why someone is going to contribute to society. As the hon. Member for Twickenham has said, as we emerge from the recession, these are the risk-takers whom the Government need to support.
My hon. Friend the Minister needs to find a standard reporting event. He needs to ensure that people can demonstrate a negative impact on their business and can confirm they have not received any benefit from Government under any existing schemes. Within those three parameters, it should be within the wit of man or woman—certainly within the wit of the Treasury—to find something, perhaps along the lines of the forgivable loan suggestion of Professor Francis Green of Edinburgh University, or the directors income support scheme supported by others.
This is a group on whom we will rely. I urge the Minister to ensure we do all we can to see if there are ways to support them with the scarce taxpayers’ funds available.
It is a pleasure to serve under your chairmanship, Ms Rees. I thank my hon. Friend the Member for Twickenham (Munira Wilson) for securing this important debate. Covid-19 does not discriminate, but for the 3 million people who find themselves with no support, it must sometimes seem like the Government do. I—and I am sure they—acknowledge that many millions of people have been helped by successful Government schemes, but that is not enough. It is no consolation to them that someone else has been helped by the Government. It does not help them feed their children. One of the things I find most surprising is that many of the people suffering are the very people whom successive Conservative Governments have rightly described as the backbone of our economy: the self-employed, the innovators and those in the creative sector. And no, it is not easy for ballet dancers to retrain in IT.
I was contacted recently by a woman—a make-up artist—who had used her husband’s pension to set up a small business to provide for her and her two children, but she cannot work and she is getting no support. I get calls every week from constituents who built up successful businesses that they are now losing through no fault of their own because they are following Government rules, and the Government are not helping them. They are distraught; they are at their wits’ end.
I know what it is like to build a career, and I am sure many on the Government Benches know—or think they know—what it is like to have it ripped away for following the Government’s rules. In many cases, these are people who voted for the Government. Yes, many of them are the people we will depend on to rebuild our economy, but to do that, they will have to depend on the help they get now. We want our west-end theatres to be alive again and our TV industry to thrive, and in my city, we want our world-famous festival to regrow, but they all need help now. Covid-19 might not discriminate, but we know how to be fair; this Government could do so.
It is a pleasure to serve under your chairmanship, Ms Rees. I extend my congratulations to the hon. Member for Twickenham (Munira Wilson). Two minutes does not give hon. Members much time to comment on the issues raised with them, but I thank the Chancellor, who took the time to speak to me last week specifically on the newly self-employed, who we know—it has been mentioned in the debate—have been among the hardest-hit groups.
I pay tribute to the Chilbolton and Wherwell small business group, which set up as a self-help group for many small businesses in those villages to find ways to support one another. It has come to me with tales of company directors who are not eligible for support, of microbusinesses set up from home that do not pay business rates and therefore are not eligible for those grants, and of very new businesses—the newly self-employed. I reiterate the pleas for help for them.
I will mention three cases from my constituency. First, Jo, from the events industry, tells me that she and her husband have been forced to sleep in friends’ spare rooms so that they can Airbnb their home. Secondly, there is the lady trying to live on child benefit because her husband earned more than £50,000 last year but nothing this year, giving them an income of just £25,000 a year over two years. Thirdly, I hesitate to use the word “pensioner”, but my constituent Susan is drawing a small pension of £11,000 a year and supplementing it with self-employment. However, because less than half her income comes from that, she is not eligible for the self-employment income support scheme. She says she needs to augment her pension, but she is really struggling to get by.
There are tales of real hardship where mortgage holidays have come to an end and loan repayments are having to be made again. These people are really struggling. I know that my neighbour the Minister, who will be familiar with many of the places I mentioned, will do his best to listen and respond, but the argument every Member has made is that people need help now. Christmas is coming; please give them some hope.
I thank the hon. Member for Twickenham (Munira Wilson), and declare my interest as a director of two limited companies. As I have said countless times before in the Chamber, and in Westminster Hall, the Government’s economic response to the pandemic has been unprecedented. As we promoted Small Business Saturday over the weekend, I was pleased to note that almost 1,500 businesses in my constituency have benefited from bounce back loans, and 3,500 people have kept their jobs because of the furlough scheme. As I made clear three weeks ago, it is time for the Government to provide support for directors of limited companies.
Being a limited company has some small benefits with regard to national insurance payments, although much of that is negated by the payment of corporation tax. The main reason for being a limited company is, as is indicated by the name, to limit one’s liability as an individual. To be penalised because one is a director and takes remuneration through a dividend seems harsh.
A week is a long time in politics; three weeks, it seems, is a lifetime. On 18 November I stood in the Chamber along with many of my colleagues and called for large supermarkets to return the rate relief they had received from the Government, as they had not been hit financially by covid. I am pleased to say that since then £1.8 billion has been issued back.
With this in mind, I call on the Minister to do three things: ensure that those businesses and sectors that were not in financial trouble return the moneys gained through rate relief; give businesses the option to tick an opt-out box to ensure they do not receive unneeded support in the first place; and, most importantly, listen to the concerns and recognise the plight of the self-employed directors. We are receiving funds back from supermarkets and other businesses; now is the time to use this money wisely to allow businesses to stay afloat as we begin to reach the light at the end of the tunnel.
I am pleased to be able to sum up in this debate for the Scottish National party. I commend the hon. Member for Twickenham (Munira Wilson) on securing the debate, and everyone who has contributed. As others have said, we could have filled this Chamber four or five times over with hon. Members who would have liked to take part, but realised there would not be space. I cannot be the only person who has noticed that today, again, nobody has defended the Government’s failure to support these 3 million people.
I also commend the campaign groups that are helping to make sure that this scandal will not go away—not this year, not next year, not any year—until it is addressed. I am sorry there is not time to mention by name all my constituents who have contacted me and asked for their plight to be publicised, let alone the people from outside my constituency who have been in touch over the past few days specifically because I was going to speak in this debate.
The first and most important point that must be made—it is one that the Government sometimes try to fudge—is that this is a deliberate policy decision. It is not that the Government could not have helped these people by now, had they wanted to; it is that, frankly, they do not seem to care enough to try. It has to be the UK Government who address the problem. None of the devolved Administrations has borrowing powers that would come anything close to the amount the UK Government are borrowing to fund their covid support package. By 2025, UK Government debt will be somewhere in the region of £2 trillion to £2.5 trillion. The devolved Administrations are not allowed to borrow money to this extent; if they were, I am sure that at least one, and possibly all three, would.
To the many harrowing stories we have heard today and in other debates, I can add that of my constituent Gemma, who moved from being employed to being self-employed early in 2019. For 2018-19, her PAYE income was higher than her self-employment income, and she did not qualify for support. She has now submitted her tax return for 2019-20, the period ending shortly before lockdown was imposed. Deliberate policy from the Government is that they ignore her accurate tax return for 2019-20 as evidence of what she was earning—what she would have earned this year. However, HMRC is happy to use the same tax return as evidence that she now owes them £9,000.
There was good reason why 2018-19 tax returns were used as a basis for the first scheme when it was announced last year, but now that the Government again have a scheme open for self-employed support applications, there is no excuse whatsoever to continue to exclude people simply because their 2018-19 tax return significantly understated their self-employment earnings.
There are some cases, such as that of Joanna in my constituency, where alleged employed earnings were significantly overstated. Joanna still runs a small business. Her family ran another business that failed because a serious accident befell a close family member who was involved in the business. To cope with that, they cashed in their pensions at exactly the wrong time in 2018-19. This meant that their pensions were counted towards her earned income. Had it been a few months earlier or later, it would not have counted, and Joanna would qualify for covid self-employment support. Now, they get nothing. Just like Gemma, Joanna’s tax return for 2019-20 will give a much more accurate picture of her earnings but it will be ignored by the Government. Again, of course, HMRC will quite happily use it as a basis for the tax she is due to pay them.
It would be easy just to say that this is happening because the Government do not care, but even if it was true that they genuinely could not care less about the plight of these 3 million people and their families, surely they care about the damage to the economy if these people disappear from wealth creating in the future. Let us not forget that this time last year all those people were working in their businesses, creating wealth and providing valued services to the local communities and beyond. Some were giving jobs to other people in the community. All were paying taxes into Government coffers. That is what they were doing this time last year. This time next year, or maybe even earlier, every one of them wants to be doing exactly the same—to be part of a post-covid shared economic recovery. To do that, they need support this time, this year.
I say to the Minister, even if the Government’s approach to these people is as callous as it sometimes appears, surely it is in our shared interest to help all those who want to be in business after covid to get into business or to stay in business. It is not about charity; it is simply about parity.
It is a pleasure to see you in the chair, Ms Rees. I appreciate that we are slightly pushed for time. I am grateful to the hon. Member for Twickenham (Munira Wilson) for securing such an important debate on a timely issue. For nine long months now, many workers have had no support whatsoever from the Government due to glaring gaps in the Government’s various schemes and wider provisions—inadequacies that the Opposition have highlighted time and again. Many of these problems could be fixed with political will, but the Government so far have chosen to do nothing. Those problems have festered and worsened, and today they are endangering our economic recovery.
I pay tribute to the Members we have heard from, whose contributions showed the impact that being shut out of support has had on many of their constituents right across the United Kingdom, particularly my hon. Friends the Members for South Shields (Mrs Lewell-Buck), for Batley and Spen (Tracy Brabin), for Portsmouth South (Stephen Morgan) and for Manchester, Withington (Jeff Smith), who made such passionate cases on their constituents’ behalf. Like many Members, I have also heard from constituents who find themselves in this position. One constituent, newly self-employed after starting his own business, told me:
“I am from a working class background. I’ve worked and paid taxes since leaving school, funded my own retraining. I’ve not claimed any benefits at all during this time. I’ve worked hard to earn everything that I have achieved. I admit to feeling disappointed and let down, that due to a quirk of timing and dates, I won’t be afforded the same level of Government support.”
I have also heard from many of the unions representing working people in this country: Community, Equity, the Musicians’ Union, the Writers’ Guild, Prospect and the GMB about how many of their members are in similar situations. I have also heard from the Federation of Small Businesses. Across professions, the same issues come up time and again: the exclusion of the newly self-employed, the 50% threshold, and people who are not eligible for universal credit despite a huge drop in income. We also know that, despite some recent welcome changes, there is ongoing discrimination against women who have taken maternity leave.
I have said before, and will say again, that the Opposition accept that it was difficult to get everything right when the Government set up these income support schemes back in March—but we are months into this pandemic now. We know where the gaps are. We have pointed them out repeatedly and Members have made the case here today. I ask the Minister, again, what is being done to sort out these issues? No doubt he will list the schemes the Government have already made available, but surely he must understand that this will be cold comfort for those still unable to access support. Does he have anything new to say today?
The Government’s failure to address these issues is also storing up problems down the line. There are many self-employed people who have put money aside into savings accounts to pay for end-of-year tax bills. In many cases, these savings trigger an end to their universal credit eligibility or they can only claim at a reduced rate. This means that not only are they going without support for longer, but that they will face even greater financial difficulties when required to pay their end-of-year tax bill. As we have heard today, Government inaction risks the very economic recovery we all desperately need and want.
Entrepreneurship is the backbone of our economy. A dynamic economy needs people who are willing to take risks, become self-employed and start their own businesses. After all, after the 2008 financial crash, it was SMEs that spearheaded economic recovery and gave people hope and work. Now, however, when so many self-employed people are in need, the Government are not there to help.
Self-employed people have seen how the Government have treated them, and I worry that they will be wary of taking steps that could help to drive our recovery. As we have heard today, many people who are already self-employed are considering giving up on their careers and their businesses. That is of particular concern among women, those from low-income backgrounds, and black, Asian and minority ethnic communities.
We should do everything we can to ensure that an economic recovery benefits everyone in our country, and we should give the self-employed the confidence to keep going, not leave them to sink or swim. If we do not, we will face a much slower and less inclusive recovery. That is in the Minister’s hands. It is not too late to listen; it is not too late to act.
It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate the hon. Member for Twickenham (Munira Wilson) on securing the debate, and I thank the 14 Back-Bench Members for their contributions—I listened very carefully to each—which spoke powerfully to the many cases of hardship that I recognise exist throughout the country.
I acknowledge the article written by the hon. Member for Twickenham for The House magazine today, and the briefing by ExcludedUK, which was made available yesterday for the debate. I have looked at that carefully and shall take back the three-stage approach, and we will continue to see if we can move forward. I recognise that there is a sensitivity about Ministers standing up and listing all the measures that have been put in place so far, so I will go through some of that only briefly, but I will then move on to the context and rationale behind some of our decisions, and address some of the points that have been raised.
Clearly, the pandemic has profoundly affected the lives of countless people. As a Government, we have a moral obligation to protect jobs, livelihoods and our country’s economic capacity, a point that has been made and acknowledged by many Members during the debate. We have spent £280 billion on what has been one of the most comprehensive responses, including the job retention scheme, which protected 9.6 million jobs; the self-employment income support scheme, which provided grants to 2.7 million people; affordable loans for businesses, which we have adapted over time; extra help through the welfare system; bespoke interventions for different industries, such as the £1.57 billion for the creative industries; as well as other support, such as income tax time-to-pay arrangements, payments to those asked to self-isolate and grants for businesses required to close.
We have striven, as a Government, to provide support for as many individuals and businesses as we can, as rapidly as possible. That has meant taking some difficult decisions, however. I will set out the rationale for some of those decisions, particularly in relation to the self-employed, before moving on to how we have adapted our support schemes so far.
To give some context, when we designed those schemes, we had to keep some guiding principles in mind. First, the help must be targeted at those most in need. To achieve that, we obviously had to set clear rules. That is why we have said that those eligible to claim from the self-employment income support scheme must have made profits of no more than £50,000 from self-employed activity. I recognise that for those on the upper side of the £50,000 cut-off, that must feel unfair, but we did have to draw a line somewhere, and wherever we had drawn it, we would have had the same challenge.
According to HMRC data, those in that category had an average income of between £100,000 and £200,000. We have also said that support from that scheme must go to people whose main income is from their self-employed trade. That is why we also said that to claim, workers should make at least half of their income from self-employed activity. HMRC analysis shows that typically for those who make less than 50% of their income from self-employed sources, their profits are on average between £1,800 and £3,500 per year. That strongly suggests that self-employment is not their primary income source.
I now come to the second principle that we have used, which is the need to balance the Government’s duty to support individuals with our responsibility to protect taxpayers. Colleagues will be aware of the wide concern about fraud that continues to be, rightly, something that is raised in Select Committees and by those commentating on what we have done. To verify claims through the self-employment income support scheme, we needed to use data from an individual’s tax returns, and that means using returns from the year 2018-19. That has meant that people who became self-employed in 2019-20 have been unable to access the scheme, because HMRC does not yet hold complete tax return data to check their details.
We are listening closely to individuals who pay themselves through dividends, but that presents another challenge, which is that there is no practicable way of distinguishing between dividends derived from an individual’s own company and those from other sources.
I know that the past months have been very difficult for many people in the groups that I have mentioned, but I want to stress that we have not taken a dogmatic opposition position to any particular group and we continue—
I am grateful to the Minister for letting me intervene. It is patent nonsense to suggest that we cannot tell the difference between shareholders who are directors of a small company and shareholders who are anonymous investors in a big company that they know nothing about. Companies House holds all those records. Why, nine months later, have HMRC and the Treasury made no attempt to do a data-matching exercise between what HMRC holds and what Companies House holds?
I thank the hon. Gentleman for his intervention. Of course, one of the challenges that we had to come to terms with was the need to deliver a scheme as quickly as possible, and to as many people as possible, within the context of a finite number of individuals who could verify that data. Short of introducing a scheme whereby people would need to manually go through and verify those different data sources—
The hon. Gentleman shakes his head, but that, practically, was the challenge that we, working with officials, had to overcome. We had to make a judgment as to how to reconcile those two realities.
I want to reiterate that we are not adopting dogmatic opposition to any particular group, or contribution or idea that could move this forward. We need to protect the taxpayer, but that has not overridden our determination to provide support and we will continue to think about how we can improve the way the schemes that I have mentioned are targeted.
We have adapted already. We extended the cut-off point by which workers needed to be on their company’s payroll to be eligible to be furloughed, allowing more workers to receive those payments, and that potentially includes freelancers paid through PAYE. Some workers may be able to benefit from the recent changes that allow employers to re-furlough workers who left their jobs between 23 September and 30 October. And since July, employers have been able to bring back previously furloughed workers while still claiming from the Government for any hours not worked. We have adapted the self-employment income support scheme to help new parents who have taken time out of work, along with self-employed armed forces reservists, who were previously not covered.
I would like to add that people who are ineligible for one scheme may still be able to get support from one of the many other sources that I mentioned earlier, and that was not an exhaustive list.
I recognise that many people in the groups that we have talked about today fully intend to continue in their current jobs. However, we are investing to help those who decide to seek new opportunities. My right hon. Friend the Chancellor of the Exchequer recently announced a £2.9 billion restart programme, which will provide intensive and tailored support to help people to find work.
I listened to the range of contributions from constituents across the country. It is very, very challenging for us to provide support for every single group that is struggling at this time, but I reiterate our willingness to continue to work with groups, including IPSE, the relevant APPG, the FSB and others, that bring forward proposals. My right hon. Friend the Financial Secretary to the Treasury is engaged in many of those conversations. As we move through into the new year, we will continue to look at the new schemes.
Our overriding goal has been to provide as much support as we can to people and businesses, and as rapidly as possible. We acknowledge that we have not been able to help everyone in the way that we would ideally want to, but that has not been a wilful disregard for their situation; it is based on the challenges of verifying. It is not attributing any blame to them either. We have succeeded in supporting millions of people and businesses through this intensely difficult time, and we will continue to do our very best until we have beaten coronavirus.
I thank all right hon. and hon. Members who contributed so powerfully to the debate. We have heard so many stories and about so many sectors, many of which, such as the live events industry and the weddings industry, will be among the last to return because of the nature of coronavirus.
I gently say to the hon. Member for North East Bedfordshire (Richard Fuller) that, yes, undoubtedly some of the 3 million are high earners, but the stories we have heard today, and a lot of the surveys, show that a many of those people are struggling to get by. Believe me, I know some of the freelancers who work in the creative industries and who now live from hand to mouth. I know that the Minister and, indeed, Conservative Members, are keen to recognise what the Government have done—I am sorry if that did not come through strongly enough in my speech. I said the coronavirus job retention scheme and self-employment income support scheme are very welcome, and they have been important lifelines for millions of people, but we are asking for parity for those who have been left out.
I will pick up a couple of points of detail that the Minister gave us about the £50,000 threshold and the average for people over that threshold. If the Government are worried about that, why not look at a taper? If they were worried about people who do not necessarily need support and who are high earners, why did they not put a similar threshold in place for the furlough scheme? It is quite possible that two employees earning £100,000 got furlough payments, but somebody who earned £51,000 through self-employment got no support. How is that fair? The Treasury Committee actually pointed out that example.
The Minister also talked about people who get less than 50% of their income from self-employment—they get a minimal amount through that source. As I and others have said, they often earn through PAYE, but some of those are short-term contracts. All that data is with HMRC, and, as we have heard, it is not beyond the wit of some of the very intelligent officials to work through those solutions.
I am grateful that the Minister confirmed that he will look at some of the solutions, and I am very grateful that, finally, after months of asking, a Minister—the Financial Secretary to the Treasury—is meeting officers of the APPG and representatives of the various excluded groups. Hopefully, they will look at some of the really detailed solutions that have been put forward, beyond those that the Minister referred to. I also welcome the great campaign of the right hon. Member for Tatton (Esther McVey) on supermarkets. If some of that money can be ploughed in to fill the gaps, that would be fantastic.
If Conservative Members will not listen to Opposition Members, there are many other Conservative Members who have made the case. We heard from my hon. Friend the Member for Edinburgh West (Christine Jardine) that many affected people are Tory voters. In fact, Iain Dale said to me on LBC a few months ago, “Munira, I don’t understand; these are Tory supporters. Why isn’t this Government helping them?” I said, “I don’t know. Go and ask your friends in the Tory party.”
If the points that I made about mental health are too emotive, and if the arguments around fairness do not cut through with Ministers, they should look at what makes economic sense, as the SNP spokesperson, the hon. Member for Glenrothes (Peter Grant), said.
If the Minister will indulge me, I will return to my fantastic storybook in the 40 seconds I have left. After the storm ended and Bear recognised the talents of all the hard-working mice who were left out, he apologised to all the mice and promised that they will never be ignored again: “Mouse was so happy that she painted a special picture and when it was sold, Mouse made not one, not two, but three piles of food—one for her, one for Bear and this time a much, much bigger one for all the mice to share.”
That is an allegory about the economic benefits of helping those who have been excluded. I look forward to hearing a slightly different response the next time we come back to this debate. Hopefully, there will not be a next time—the Minister will solve it before Christmas.
Question put and agreed to.
That this House has considered support for people ineligible for Government covid-19 support schemes.