Pat McFadden
MP for Wolverhampton South East · Labour · United Kingdom
“In his review Alan Milburn considered that issue and said that, “the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.” As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election.”
“Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year.”
“As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election.”
“I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use.”
“My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training.”
“We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years.”
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“If the leaks were not a problem, Government Members must ask the Prime Minister why he was railing against them at the end of last week when he was discussing these measures. Once it was out in the open, the Chancellor had to act, so the first question to be asked about this policy, before we even get to its merits, is: was it the result of a £4 billion leak? If that is the case and the Chancellor was effectively bounced into this policy as a result of information coming out in an unintended way, this must be the biggest plumbing bill of all time. We might never know, so let me turn to the merits of the policy itself. The reason the Chancellor gave for the measures before us was that housing transactions had fallen sharply in April and May.”
“This time, we do not yet know of the effect. As my hon. Friend the Member for Liverpool, Walton (Dan Carden) said, another thing that we do not know is whether the Government really intended to introduce this measure, at least at this time. We saw the briefing, the counter-briefing, the leak and the counter-leak; in the end the Government have announced it now, rather than in some post-dated way that would have simply killed the housing market stone dead. After all, why would anyone choose to buy a house now if they were promised a tax cut on the transaction in some months’ time? It is normal, of course, for the Treasury to weigh up its options for a statement such as last week’s. There is nothing wrong with considering different ideas, accepting some and rejecting others, but for that exercise to work, it has to be done in private.”
“Friend the Member for Mitcham and Morden (Siobhain McDonagh) spoke of the appalling conditions that many families find themselves living in, and eloquently set out how distant is the dream or aspiration of home ownership for so many people. The hon. Member for South Cambridgeshire (Anthony Browne) gave us the benefit of his long experience in these matters in calling for an increased rate for second homeowners. Stamp duty holidays are a familiar feature of economic crisis management. As has been referenced in the debate already, in 2008 the then Chancellor, Alistair Darling, raised the level at which stamp duty was paid in an effort to kick-start the housing market, which had been hit hard by the global financial crisis. At that time, the measure had a positive effect and brought forward an increase in the number of transactions.”
“It has been a pleasure to listen to this debate and the many interesting contributions. I cannot mention every Member who has spoken, but we have had a lot of interesting contributions. The hon. Members for South Thanet (Craig Mackinlay) and for Runnymede and Weybridge (Dr Spencer), and perhaps one or two others, urged the Government to abolish stamp duty completely. The hon. Member for Dudley South (Mike Wood) spoke of the importance of confidence in the market in the face of impending job losses. In a thoughtful contribution, the hon. Member for Penistone and Stocksbridge (Miriam Cates) spoke of the impact of relationship breakdown on housing transactions. My hon.”
“Thousands of job losses have been announced in recent days, and many more are expected if the furlough scheme is withdrawn from all sectors at the same time. With young people facing the most difficult labour market conditions for a generation, and many otherwise viable businesses in trouble because of social distancing rules, does the Chancellor accept the case for employment support being aimed directly at the sectors most likely to be hit by job losses in the coming months?”
“We will continue to press the Government to review how the promoters of disguised remuneration schemes have been tackled—or not tackled, as the case may be—by HMRC and ensure that those who promote such schemes are held to account.”
“Some contractors have raised concerns about being treated like an employee for tax purposes but not for employment rights purposes. Given the huge ongoing labour market difficulties caused by the current crisis, I would like to ask the Minister what consideration the Government have given to the timetable for their proposed changes and, in particular, what their attitude is to the amendments before us tonight calling for a delay in the roll-out of the IR35 changes to the private sector, so that we can get the balance between tax and employment rights correct. Many Members have also received representations about changes to the loan charge. We have supported attempts to deal with tax avoidance, but also expressed concern for those advised into such arrangements, by either employers or the promoters of such schemes.”
“It is a pleasure to be facing my old sparring partner from the Treasury Committee of some years ago across the Dispatch Box. In this debate we will cover a number of amendments dealing with IR35 or off-payroll working, through to the loan charge and the impact of this Finance Bill on the crucial issue of jobs. On IR35, we have always said that we need an approach that brings together the consideration of tax and employment law and that levels up protections for the self-employed, as well as dealing with the current implications of the tax system, which sometimes boosts bogus self-employment. The Chancellor has already hinted at changes to the tax regime for self-employed people as a consequence of the help given to them through the current crisis.”
“The furlough scheme and the self-employed furlough scheme were the right and necessary things to do, but as lockdown is eased, and support from those schemes starts to be withdrawn from next month, we can see the danger facing the economy. The danger is that businesses that have been just about hanging on start to let people go, caught between having no income and facing rising employment costs. This is the moment that the Government need to act to preserve jobs, jobs, jobs.”
“The damage caused by that mass unemployment affected not just the city where I grew up, but the Black Country that I now represent, and many similar communities across the country. Long-term social and economic pain was caused by far too many people facing a life on the dole, and we must never go back to those days. If we have learned anything from that experience of the 1980s, it is that the cost of not acting is greater than the cost of acting, and we must do everything we can now to prevent mass unemployment. That is the challenge facing us. At the start of this crisis we called for wage support to help people through.”
“Across the country, the claimant count measure of unemployment is up by 1.5 million since the start of the year. In addition to those out of work and the estimated 9 million on furlough schemes, it is estimated that up to 8 million employees are working fewer hours than usual. These stark figures show us that we are facing the jobs challenge of a generation. It is decades since young people leaving school, college or university graduated into a labour market such as this. Giving my age away, I remember, as a young teenager growing up in Glasgow, attending the people’s march for jobs. Unemployment back then was around 3 million. The vocabulary of it infused the times—“signing on”; “the Girocheque”. It even gave birth to the great band UB40, named after the unemployment card that people got for signing on.”
“The matter of what is voted on is of course, a consideration for the Speaker. I do not always get to decide what is voted on in this House. New clause 26, standing in my name and those of my hon. Friends, focuses on the issue of jobs and does so for the very good reason that that is the principal economic challenge facing us right now. If there was any doubt about that, we need only look at the news over the past 24 hours—1,700 jobs lost at Airbus, up to 5,000 job losses announced by the owners of Upper Crust, 4,500 at easyJet a couple of days ago, another 4,500 at Swissport, and many more around the country that do not make the front page of the national news. These are not just numbers. Every one of them is a human story of a livelihood taken away and a family wondering how they will pay the bills and what the future will hold for them.”
“The Government announced their back-to-work plan yesterday.”
“Neither can we know whether Leicester will be the only place to go into another lockdown. Other cities may follow, and there has already been speculation about where those might be. How can it be right to withdraw employment support on a national basis when we are no longer in a single national position on the easing of lockdown? We are asking people and businesses in Leicester today, and possibly other cities in the days and weeks to come, to shut down for a second time, and they should not be penalised for doing so. Will the Minister consider as a matter of urgency flexibility in the unwinding of the furlough and other support schemes, to take account of the new development of at least one, but possibly more, local lockdowns? Let me now turn to the future, and the jobs that might be created.”
“Let us take live music, for example, which is based on the very opposite of social distancing. The break-even point for many venues and events is often being 80% to 90% full, and the change to one metre will not make that much difference to them. We need an approach that takes into account the different impact on different sectors. If there was already a sectoral problem in withdrawing employment support, there is also now a geographical one, because Leicester is entering its second period of lockdown. Our thoughts go out to the people and businesses there who, like the rest of the country, have made great sacrifices over the past few months. We cannot yet know how long that second period of lockdown in Leicester will last. It could be a few weeks, but equally, it might be longer.”
“I am not sure about the part of the right hon. Gentleman’s intervention that referred to foreign companies, but the turbulence of the labour market right now does pose a danger to contractors. The Government have already recognised that to some degree in the delay announced for this measure. Withdrawing support schemes at the same pace for all sectors does not recognise that some sectors are in far more difficulty than others, and that is particularly true for any sector based on the idea of people gathering closely together. Many sectors such as transport, aviation, sport, theatre, music, and others, are global British strengths, but right now they are on their knees. Dropping the social distancing rule from two metres to one metre is not enough when, in some cases, any kind of social distancing is impossible.”
“That was Roosevelt’s approach, and I will leave it to others to judge whether the Prime Minister’s approach falls short not only in scale but also in spirit.”
“I will leave the House to make its own judgment on the comparison between this and the Prime Minister. First, “Strike the right balance of realism and optimism”—not everything has to be claimed to be the biggest or the best in the world. After the events of recent months, systems that just worked would be an improvement. We then have, “Infuse a sense of shared purpose and direction”, “Lead by example”, “Forge a team aligned with action and change”, “Bring all stakeholders aboard”, “Set a deadline and drive full-bore to meet it”, “Address systemic problems. Launch lasting reforms”, “Be open to experiment”, “Adapt and be ready to change course where necessary”, and “Tell the story directly to the people”.”
“Millions of workers were hired, 255,000 miles of roads were built, as were 40,000 schools and almost 1,000 airports—major infrastructure projects that modernised the United States and stood the test of time, all at a cost of around 40% of pre-depression United States GDP. By contrast, what the Prime Minister announced yesterday was around 1% of the cost of the new deal—one cent on the dollar, if you will. He has taken the old political maxim, “Under-promise and over-deliver”, and turned it on its head. I know that the Minister likes a good book. One of the shorter, but nevertheless hugely illuminating, studies of Roosevelt’s approach comes in Doris Kearns Goodwin’s book on leadership. In it, she sets out Roosevelt’s watchwords behind the new deal.”
“There is no MP from the west midlands who does not care about our manufacturing base. It is a vital part of our economy. It may be true that we make less than we used to, but it is also true that we make more than we think, and we should never be dismissive of the activity and the creativity of making things in this country. The Government announced their back-to-work plan yesterday, praying in aid President Roosevelt and the new deal. First, the Prime Minister wanted to compare himself to Churchill. Now it is Roosevelt. We have to wonder why he seems so uncomfortable with just being himself. Let us look at the comparison. F. D. R.’s new deal did indeed rescue the United States from the great depression.”
“Quite. Infrastructure expenditure is, of course, welcome, and we support it. It makes sense to do this when interest rates are historically low.”
“On the loan charge, as I said, we have always supported cracking down on tax avoidance and we support action against those who enabled the scheme. New clause 31 makes a connection between people’s tax treatment and what they knew; I believe we have to explore that principle as a matter of taxation and think carefully about how to proceed. I look forward to the debate on that later.”
“Instead, I make a plea to the Minister: if the Treasury is planning to announce a stimulus package in the coming weeks, will it take into account the full and specific circumstances of Northern Ireland, to help the economy there recover from the economic consequences of lockdown, and to insulate it against any damage that may be forthcoming from the agreement reached between the UK and the EU? We do not intend to divide the Committee on the regulations, and we hope that these bank notes issued in Northern Ireland will continue to be popular long into the future.”
“It will continue to issue distinct notes under the Ulster Bank brand in Northern Ireland. It would be tempting to ask the Minister lots of questions, not so much about the design or authorisation of these notes as about the decline in their value in recent years. As of this morning, that decline was about 17% over the past four years, under the Government’s watch. However, I fear that if I went too far down that road, you might tell me that I was not keeping strictly within the terms of the regulations, Mr Mundell, so I will leave the discussion of the Government’s record of devaluing the pound for another day.”
“It is a pleasure to serve under your chairmanship, Mr Mundell. As the Minister said, these regulations change the authority for issuing Ulster Bank notes in Northern Ireland from Ulster Bank to NatWest. The banks are part of the same group, and we therefore agree that this is a technical change that should not make any difference to the Northern Ireland public. We welcome, in particular, regulation 6, which makes it clear that the change will not affect the validity of banknotes previously issued by Ulster Bank; they will have the same validity as before. As the Minister said, there is a long tradition of having separate banknotes in Northern Ireland and Scotland. They are valued and appreciated by the public. NatWest bank is going through a name and branding change. Its previous guise, RBS, is a note-issuer of long-standing experience.”
“We do not intend to divide the House on these measures, because regulatory continuity is better than not having a regime in place at all, but no amount of duplication can avoid the basic fact that although we can replicate the rules, we cannot replicate the market access to which these rules apply at the moment and for which they were designed in the first place.”
“For all the debate there has been about Brexit, its impact on services has not been debated nearly as much as it should have been. We are not dealing here with just-in-time supply chains and trucks on ferries; we are dealing with regulations and rules. We are taking the area that makes up 80% of our economy and, in the case of financial services, a sector in which we trade at a substantial surplus with other countries, and inserting new barriers between us and our nearest customers. The fact that the sector is resigned to that and has established alternative bases in Dublin, Luxembourg or wherever does not change the reality of it.”
“These regulations are intended to ensure continuity for UK financial services at the end of the transition period, yet the Government’s stated intention for withdrawal is to erect new trade barriers between our financial services and the rest of the EU, so even as we replicate at UK level the EU regulations that we played such a big part in designing, we are pursuing a course that will be incapable of replicating the market access that we have at the moment. That is not my judgment; it is the stated aim of Government policy. It is the equivalent of one of the shops reopening this week and putting lots of new stock in its window but telling a substantial proportion of its previous customers that they are no longer welcome to shop in the store.”
“If we are only now legislating to take the powers to do that, can that exercise possibly be completed in just two weeks’ time? Taken together, these changes and others in similar statutory instruments represent a significant increase in the functions and power of the Treasury, the Bank of England and the Financial Conduct Authority. What accountability arrangements will there be for those bodies in the exercise of their new powers? Alongside the transfer of functions, accountability must surely be enhanced if claims of restoring parliamentary sovereignty are to mean anything in reality. More broadly, there is an obvious contradiction at the heart of all this.”
“On equivalence determinations, can he confirm that, although these SIs create a regime for the UK to make decisions on the regulatory regime in other countries, as yet we have no guarantee that our own regulatory regime will be regarded as equivalent by the rest of the EU? We can only hope that this exercise in taking back control is a little more convincing than last week’s decision on border checks from the Cabinet Office. After having four years to prepare, the Government dropped their plans for border checks on goods because we simply could not implement them, even though our own goods will be subject to border checks when we export them overseas. Paragraph 36 of the political declaration, on which the current negotiation is based, states that the UK should have concluded its equivalence assessments by the end of this month.”
“On the money laundering provisions, why is the current duty to co-operate with supervisors in other countries being removed and replaced with the weaker power to co-operate if we so choose? In what circumstances would we not want to co-operate to tackle money laundering, which can fund everything from international terrorism to the drugs trade? On cross-border distribution of funds, can the Minister confirm that these statutory instruments enshrine the loss of passporting rights for our financial services that will result from the Government’s decision to withdraw from the single market as well as from the EU itself?”
“This is about what will happen in January if, as the Government confirmed last week, the end of this year marks the end of the transition period. As the Minister outlined, the regulations cover areas such as money laundering, supervision, central counterparties, the cross-border distribution of funds and the desire to maintain the pre-Brexit relationship between the UK and Gibraltar on financial services. In most of these cases, they are taking the supervision of the rules governing these areas from EU bodies and transferring them to the Treasury, the Bank of England or the Financial Conduct Authority. On the detail, I have a few questions I would like to put to the Minister.”
“Like those of many who have spoken in the Chamber today, on the fourth anniversary of her death, my thoughts are very much with our former colleague Jo Cox and her family. As we heard from the Minister’s opening statement, these statutory instruments are quite technical in nature. I would like to thank him for his welcome, and to thank him and his officials for providing some briefing on their meaning and effect. Overall, these instruments seek to replicate at national level the regulatory regime for financial services to which we currently subscribe—and which in many cases the UK designed—at EU level. Until the end of the transition period, we will of course continue to follow the EU’s regulatory rulebook.”
“Thank you, Mr Speaker. Despite the interventions that the Chancellor has announced, some of our major industrial companies find themselves locked out of the lending scheme for the largest firms—the covid corporate financing facility—because they are not classed as investment grade. These companies support hundreds of thousands of jobs, either directly or through their supply chains, and are often the main employers in the towns and cities where they operate. Will the Government show the same flexibility and urgency in getting finance to these companies, which make up the industrial backbone of Britain, as they have done through the loan scheme for small companies, so that we can retain as much economic capacity as possible through this crisis?”
“I have a number of constituents who are still stranded in Punjab in India—some of them in real distress. I recognise the effort from the Foreign Office in chartering flights from Amritsar, but after several weeks of this effort my office is still receiving large numbers of calls from people with serious medical needs who have so far not been allocated a place on any of the charter flights and, importantly, do not know when they will be. When does the Minister think this repatriation effort will be completed?”
“The difference with this crisis is the profound effect it is having on human behaviour. The Chancellor has acknowledged that the big missing piece from the package announced tonight is direct financial support for workers who are laid off as a result of the advice that the Government have given to the country, so will he commit now—in principle if he cannot give the number—to bringing forward a package of support for a significant proportion of the wages of those who have been laid off as a result of this crisis?”
“The Secretary of State said that this was a national effort and he is right, but it is more than that; this is a global crisis that has seen different approaches taken in different countries. Does he not accept that we need stronger, co-ordinated, global leadership, both on the health front and on the economic front, to get the best possible response to this global crisis?”
“Before my right hon. Friend moves on from his point about a co-ordinated international response, one of the things put in place at that time, about which there has been a lack of discussion this time, is what to do for those countries that have very basic healthcare systems. This virus respects no borders. Is there not a need for co-ordinated international action to get help to countries where testing and treatment may be much more rudimentary than they are here?”
“It is hard to escape the conclusion that, had this virus erupted a decade ago, there would have been a will to have a much more international response. With this generation of leaders, with nationalism on the rise and with international institutions and actions having been so disparaged and derided, that will has so far not been there. It is not too late. We could lead in calling for that effort. If we do not, we will have to hope that the retreat into national responses does not cost us dearly.”
“We are still in the early stages of the coronavirus response, and no one can be sure about its health and economic impacts. There is broad cross-party support for the measures announced by the Chancellor yesterday, although we will continue to press for there being no penalty for those who choose to do the right thing, whether they are self-employed, on a non-permanent contract or anything else of that nature. That takes us so far, but this is a global pandemic and is now being defined as such. Where is the global leadership in tackling this? Where is the co-ordinated economic response? Where is the concerted effort from world leaders to act together to face a virus that respects no borders?”
“Alongside the bricks and mortar, we need a deep-seated effort to tackle educational inequality; good quality, affordable childcare to make sure parents can take up jobs; an early-years effort to tackle the appalling development gap that afflicts some children, even by the time they start school; second-chance skill training to equip people for a new labour market and to give them the tools they need to reach their full potential; and the support for social mobility needed to break through the charmed circles that still characterise too many of the professions and too many of the best jobs in this country. If there really is to be levelling up, it is about a lot more than tarmac and concrete; it is about people’s lives and the chances they have.”
“The first step is to oppose the Government and Conservative party we actually have in front of us, rather than the ones we wish were in front of us. When our opponent has adapted, we have to adapt, too. That is something we must do. Infrastructure investment is definitely needed, but addressing regional inequality is about people and their life chances. Where they were born, where they live and what kind of family they come from, those things should not limit people’s opportunities and chances to make the most of their life.”
“As I said, they are just starting to fill a hole they dug themselves. Carbon capture and storage has been announced and abandoned almost as many times as the A303 project at Stonehenge, but neither has been announced quite so often as the potholes fund—the Albert Hall should have been well and truly filled by now with those announcements. We have heard a lot of this before, and it could and should have started years ago, but it would be complacent of my party to rest on those criticisms alone because this is a shift in fiscal strategy—there is no doubt about that—and responding to it will require more than reaching for the same slogans as before. There has been much talk in recent months about what constitutes a good Opposition.”
“That is not a claim from me; it is a policy set out by the Prime Minister and his chief Brexit negotiator. In more ways than one, this Budget is just starting to fill a hole the Government have dug for themselves. If low interest rates allow them to borrow for investment, it was also true some years ago when they derided such suggestions. Of course, new investment in infrastructure is welcome and long overdue, certainly in places like the Black Country. We have too many derelict factory buildings, too much unused development land and too much unremediated land, all of it standing as a physical reminder of the lack of investment over the Tory years, but simply calling themselves a new Government cannot disguise the fact that they are amending an investment shortage that they decided on in the first place.”
“Such weak economic growth leaves the Government no alternative but to fund their spending plans largely by borrowing money in a way that the Conservative party has for years derided as irresponsible and reckless. Add to that the impact of the Brexit path the Government have chosen, which is the defining decision that now dare not speak its name. If the line has gone out from No. 10 not to talk about it, the OBR did not get the memo because it is there in black and white. The OBR estimates a potential loss of 4% of GDP over the next 15 years—lost output, lost income and lost tax revenue. The Secretary of State for Business, Energy and Industrial Strategy claims this is the most business-friendly Government ever. In truth, this is the first Government in living memory to relegate economic prosperity to behind issues of sovereignty.”
“It is a pleasure to follow the hon. Member for West Worcestershire (Harriett Baldwin). This Budget is the Government’s attempt to make a turn in the road. Gone are the logic, the rhetoric and the assumptions that have driven UK spending policy for the past decade. If nothing else, it is testament to the Conservative party’s capacity for reinvention and its hunger for power. For the avoidance of doubt, that is not an insult. In truth, the Chancellor had little choice but to change course, because the backdrop to the Budget was a flat economy and an anaemic forecast for future growth—that is even before the impact of the coronavirus. Growth estimates are down this year to just a little over 1%, and to around 7% over the next five years. Growth that weak is not levelling up but levelling down.”
“One of the questions in the public’s mind is the degree of resistance acquired by those who have contracted the virus and then recovered. I appreciate that this is more a question for his medical and scientific advisers than directly for him, but could the Secretary of State give us any information on the degree of resistance acquired by those who have been through the virus and come out the other side?”
“One of the UK’s great industrial success stories in recent decades has been the automotive industry. What discussions does the Secretary of State plan to have with the industry to help ensure that the UK is best placed to make the transition from internal combustion engines to electric vehicles?”
“The Minister’s statement and the document published today show that the Government have made a fundamental choice, which is to prioritise sovereignty over any economic argument or consequence for either goods or services. Is there not a danger, however, that having made that choice, the Government will impose long-term economic consequences on the country in pursuit of the prize of a sovereignty that they will end up not using very much, because at the end of the day good standards in the environmental, labour market and consumer sectors actually make sense?”
“I want to return to the question from my hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson). Does the Secretary of State not accept that it was a mistake to weaken the control order regime and replace it with a weaker system of supervision—a decision taken not through judicial necessity but through a political deal between the Conservative party and the Liberal Democrats? Will he now review that decision in the light of the recent incidents?”