Backbench Business Committee - Minutes of EvidenceTranscript of representations made on Tuesday 25 June 2013

HOUSE OF COMMONS

REPRESENTATIONS

MADE BEFORE THE

BACKBENCH BUSINESS COMMITTEE

BACKBENCH DEBATES

TUESDAY 25 JUNE 2013

RT HON JOHN HEALEY, GUTO BEBB AND JONATHAN EDWARDS

DAMIAN HINDS, CHRIS EVANS AND JACKIE DOYLE-PRICE

BARRY GARDINER

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Representations made before the

Backbench Business Committee

on Tuesday 25 June 2013

Members present:

Natascha Engel (Chair)

Mr David Amess

John Hemming

Ian Mearns

Rt Hon John Healey, Guto Bebb and Jonathan Edwards made representations.

Chair: Before you start, we have a full day in the Chamber on 4 July. We have another full day in the Chamber on 11 July. At the moment, that is all the allocation that we have. Just so that you know, those are the two days.

John Healey: Thank you for receiving our submission, which we sent in last week. We are not yet quorate as far as our delegation goes. We, like you, are waiting for two Members to arrive, but we have a strong, cross-party pitch.

You have our written submission and we are happy to answer any questions on it. Perhaps I will briefly sum up the case for this debate in the Chamber in the following way. This is big. This is new. This is a chance for Parliament to get ahead of public opinion. There is strong cross-party concern. It is of national significance and should be in the Chamber.

Q1 Chair: Just for the sake of the record, could you say what the topic you are wanting to debate is?

John Healey: This is an application for a debate in Back-Bench time in the main Chamber before the summer recess on the implications of the potential EU-US trade and investment deal for the UK.

I will briefly develop my five points. It is big: the trans-Atlantic commercial relationship between the EU and the US is 30% of global trade. Most independent experts say that a deal could boost EU trade with the US and US trade with the EU by a quarter to a third. In other words, that is a GDP boost of perhaps up to 1% of GDP, so it is big.

It is new: our application came to the Committee last week, which was when the negotiations were formally launched. They will start on 8 July in Washington, so this is an opportunity for the House to debate the matter at the very start of the proceedings. This is not something that the House has debated at all. In fact, when I went to the House of Commons Library last month and asked for a brief on the EU-US trade deal and its potential, I was expecting them to have something, but nobody had ever asked for it before. In other words, this is new and topical, and it is the first chance for the House of Commons to debate it.

Q2 Chair: Do you want to add something, Guto?

Guto Bebb: Yes, indeed. It is important that we stress that this is a cross-party approach. Stephen Williams and Jonathan Edwards were supposed to be here, but I understand that Stephen is in Committee at this point in time. We have also established an all-party parliamentary group to look at the issue, and it is an opportune moment to look at it, simply because we need to be ahead of the curve. It is important that the debate happens on the Floor of the House, because that would give this significant issue the attention it deserves. It is just as important that Back Benchers can lead the Executive on this matter.

Q3 John Hemming: It is an important issue, but there are obviously limits on time. We do get time in Westminster Hall, which is Parliament under article 9 of the Bill of Rights, as well as the main Chamber. Would you reject an offer of time in Westminster Hall?

John Healey: Our view is very much that this is an issue of UK significance-

John Hemming: Which of course it is.

John Healey: If we are being entirely honest, the range of likely interest would be hard to accommodate in a shorter debate in Westminster Hall. We would expect and hope to hear in a debate of this significance views and voices from very senior Members, who may be much more inclined to be in the Chamber than in Westminster Hall. To look for a debate in Westminster Hall would not do justice to the matter’s significance and the quite wide range of views and concerns.

Q4 John Hemming: One could get offered a three-hour debate in Westminster Hall, but I detect from what you say that if you were offered Westminster Hall, you would refuse.

John Healey: I do not think we would want to pre-empt the view of the Committee, but we are strongly arguing that this should be in the Chamber and not in Westminster Hall.

Q5 Mr Amess: John, I am sure that you are right that this is unique. I have two questions only. We have granted Back Benchers such opportunities before and they have assured us that they have lots and lots of speakers, but when it comes to the actual day we find, for all sorts of reasons, that we are short of speakers. That is my first point. Do you have enough speakers?

Secondly, will it be a real debate with people arguing for and against the proposed agreement or will everyone be saying, "This is marvellous" or "This is rubbish"?

Guto Bebb: If I may jump in, the APPG has already recognised the fact that this is a debate where people will have different views. When we were canvassing for supporters for the APPG, we were very aware of the fact that some people will see this as the best thing that could ever happen, but that others will have concerns.

One of the key reasons why we have Stephen Williams and Jonathan Edwards as part of the pitch today is that they, while generally supportive of the concept, have more concerns than, for example, me. That would lead to a better debate, because concerns would be expressed alongside the supporting comments that would come from someone such as me.

John Healey: To amplify that, there is a range of views in the House and across and within the parties about Europe itself, about the value of free trade, and about the nature of free trade in terms of bilateral or multilateral agreements. There are some extremely strong advocates of this potential deal, but also Members who will reflect the concerns that exist among consumers, consumer organisations, trade unions, employee groups and environmental groups. We would expect to see all that come out in the debate.

It is important to debate the matter at this point before talks start, as there is an opportunity both to influence the wider debate, rather than play catch-up, and for Parliament quite rightly to put the Government on the spot to account for the action they are taking to secure a successful deal, but also one that is comprehensive, fair and deals with the concerns that people are starting to raise.

Jonathan Edwards: I apologise for being late; I went to Portcullis House.

One area of potential concern for me is whether public services would be opened up for competition with American private companies, so there is a genuine debate there.

Ian Mearns: I am also thinking about, in the context of the UK being tied into an EU-US trade agreement, the knock-on impacts on a referendum on membership of the European Union. If we remained in, we would be part of a trade agreement with the United States, but if we voted to come out, we would have to renegotiate that on an individual basis, which could be difficult. The agendas are interesting.

Q6 Chair: The point that David makes about having enough Members to fill a debate is important, because we are finding, especially as we head towards recess, that debates are finishing earlier and earlier, so we would have to be convinced. You are asking for three-hour debate?

John Healey: We think it warrants a full day, but we will certainly settle for a half day, as we have said.

Q7 Chair: It is very, very unlikely that we would allocate a full day, simply because we have a sheet full with two days left.

John Healey: I am just emphasising what we put in our submission.

Chair: We will make a decision about it today and then let you know. Thank you for bringing it to us.

Damian Hinds, Chris Evans and Jackie Doyle-Price made representations.

Damian Hinds: Our application is for a three-hour debate in Back-Bench time, ideally in the main Chamber, on the subject of high-cost credit. You will be aware, Chair, that this is a topic of interest to many MPs, not least because of some of the casework correspondence that we receive on the antics of lenders, debt management companies and so on. It is a broad topic, which takes in issues about the social fund and the changes there; universal credit; the high street and the clustering of pawnbrokers and money shops; financial education and many other things, but I would characterise why the debate is so important now in terms of two sets of changes that are going on.

The first set is market changes. We have this huge visibility of the rapid growth of payday loans, which is causing concern right across the political spectrum and across the commentariat. That is just the most visible thing as it happens to be on the sides of buses, but there is, at the same time, another massive sub-prime and high-cost sector that gets less attention, partly because its customer base is a different demographic and therefore the ways that you market to them are that much less visible. However, to many Members it is very important. At the same time, there are new models of lending. It is a sector with a remarkable ability to shape-shift, so you have new models like the Amigo one, where you get somebody else to underwrite your loan. That is the first big set of changes-on the market side.

The second big set is on the regulatory side, and the big thing is of course the shift to the FCA, in terms of the regulatory regime. They now have the ability, should they want to do so, to impose a cost-of-credit cap of some sort on players in the sector. That remains an open question. In the meantime, there is already different practice in the regulatory sphere, so we have had the first company actually having its credit licence revoked-so there is a possibility of a more activist approach there.

Also you have got great support across the parties, including Government support, for the credit union sector as an alternative to high-cost lenders, with the credit union expansion project, and-announced just a couple of weeks ago-the likely easing of the interest rate cap on credit unions from 2% a month to 3% a month.

Lots of things are changing and happening-many of them of great interest to a wide range of Members. I think now is an important time to influence some of those decisions, which will be taken outside the House, in particular by the regulator.

Jackie Doyle-Price: I want to endorse Damian’s point about regulation, because we are in a state of flux. The OFT is winding down its responsibility. It will pass to the FCA, but we have still got a year to go. Although the OFT has stepped up its game a little bit, there are signs, also, that the industry itself is realising that a more onerous regulatory hand is going to be hitting it. I think we could do a lot now to influence both the regulatory behaviour and what is actually happening in those businesses; so this would be a very timely debate, particularly given what else Parliament has done in recent years on this. It has actually been quite a success story.

Chris Evans: I just want to endorse what Damian and Jackie said. I think Damian said it most eloquently: that this is the type of debate that affects every single constituency across the country. I think we are already seeing that some of the associated issues that come out of high-cost lending are the ideas of financial education for the young-financial literacy-and also the talk that we have had, as we have seen with Mary Portas recently, about the high street, which is being dominated by so-called pawnbrokers and payday lenders. I think there are so many other issues that will come out and it is such a wide-ranging debate. As a group, we have already spoken about regulation, as well.

Q8 John Hemming: One of the challenges-it is a very important issue, I accept, and poses all sorts of problems-is that we have limited time. If you had the opportunity of a Westminster Hall debate soon, or a debate in the main Chamber after the recess, which would be your preference?

Damian Hinds: I do not want to pre-empt, obviously, what the Committee may decide-you have great pressure on the time available. We certainly do think that this warrants a main Chamber debate; there have been debates on this subject in the past and they have generated a lot of MP participation-at a high point, 42 in one previous Backbench Business time debate. So we certainly think it would warrant that, but we accept, obviously, the pressures that the Committee has, so if it has to be a Westminster Hall debate, so be it.

If it were just a question of waiting till after recess, I think we would probably say we would rather wait till just after recess to secure a main Chamber debate.

Q9 Mr Amess: Damian, obviously we are all affected by this, and all interested. Just to clarify a few things: this is the same issue that Stella Creasy has been banging on about for a long time, is it?

Damian Hinds: It is your verb, David, not mine. This is the arena in which Stella has been particularly-

Q10 Mr Amess: I thought it was; that is why it slightly surprises me that it was in February 2011 that we had the last debate. It really is as long ago as that?

Damian Hinds: That was Stella’s big debate on this broad topic. That was the last time we had a debate of this breadth.

Q11 Mr Amess: Really? And is this the same sort of-

Damian Hinds: It is the same sort of topic. Stella Creasy has a particular interest in cost-of-credit capping. That is not the only subject that debate covered; it covered more-but that, I think it would be fair to say, is her particular specialist interest. This will cover a great deal more as well.

Chair: That was one of the Backbench Business Committee debates as well-one of our original ones.

Q12 Ian Mearns: I do not want to prejudge what we are going to do, but I would be flabbergasted if this did not turn into a very popular debate. There are a couple of aspects to the market that are particularly interesting. You might have seen at the weekend that Wonga put up its annual percentage rate to 5,853%. That worries me, but if anyone takes a loan from Wonga, it is all about caveat emptor from my perspective. At the same time, doorstep lenders, which are supposed to be at the more reputable end of the market-companies such as Provident-charge 132%. I have had a number of constituents who have come to me with mis-sold loans that they could not afford to pay back. They had more than doubled their original borrowing in the space of 18 months. That happens across the market.

Chair: Thank you very much for that. As I have said, we have these two days-4 July and 11 July-and we will schedule today for 4 July. We will let you know.

Damian Hinds: Thank you very much.

Barry Gardiner made representations.

Barry Gardiner: Graham Stuart sends his apologies. As you will know, he has not been terribly well lately, and I understand that he is unable to be with us this afternoon. He heartily wishes he could be.

Ian Mearns: Well, Barry, he was with me on the Education Committee this morning, and he was at his cantankerous best.

Barry Gardiner: He usually is at his cantankerous best, isn’t he? That is not for the record.

This is a request for a debate on the state of the natural capital in England and Wales. It is topical because the Natural Capital Committee, which was set up a year ago, produced its first report last month. It is also topical because of what is happening in the countryside and in our businesses.

Let me ask you when the last time was that you ever received an invoice from a bee for pollinating your crops. The answer is that you have not, but the value of those services is absolutely phenomenal. When I was at DEFRA, I put a submission into the Treasury for the investigation of diseases in bumblebees and they thought I was insane, because I asked for £6 million to look at the matter. They thought I was less insane when I explained that if they did not give me the £6 million to get this right, we were looking at a £200 million loss in revenue to the Treasury each year, because of the loss of yield to our farmers and the loss of revenue into the Treasury from that yield.

You will know that we have serious problems in wheat this year in particular, but we are not simply talking about pollination services. Look at the water industry and the draft water Bill. What we have there is looking very much at the replacement of concrete and steel infrastructure with green infrastructure. The cost of natural capital is of fundamental importance in many ways. It stabilises our soil and it gives us watershed protection. There are all sorts of forms of natural capital.

What is happening now is that we are at a point where the international community and the United Nations has adopted the new international accounting standard, which has to incorporate the valuation of natural capital into government accounting frameworks. Britain is ahead of that game, and that is why we need to look at the report that the Natural Capital Committee put in place.

Q14 Chair: You have submitted your substantive motion, which welcomes a report. Is that a report from an APPG?

Barry Gardiner: No. Under the Natural Environment White Paper last year, the Government set up a new committee called the Natural Capital Committee. That committee reports to the Cabinet’s Economic Affairs Committee, which is chaired by the Chancellor. The fact that I can see a few blank faces in the room means that it really has not had the publicity that it needs to have. It is a topic of real importance, which needs to be debated in the House.

Q15 Chair: You have asked for 90 minutes. With a substantive motion, that debate would obviously have to be in the main Chamber. What you are after is much more about highlighting these issues, or is the vote important? Is having a Division important?

Barry Gardiner: Let me tell you why I think it is. Again, it feeds into the issue of topicality here, because we are now moving towards a 2015 framework in the United Nations. The Prime Minister has just brought forward the proposals from the high-level panel on the future of the sustainability goals and of the post-2015 millennium development goals. All of those contain clauses about the implementation of this framework of valuation of natural capital, and all of them talk about the importance of natural capital and sustainability in the world order going forward. There are people who are deeply reluctant to take on board this view-people who support a classic GDP model of growth, and do not recognise the wider wealth that natural capital brings to the economy.

Q16 Chair: Sometimes we have a slot at the end of the day, when the Government’s business folds early, but we are not given very much notice-we sort of know a week in advance, roughly. If we had one such day, when we cannot specify how long the debate would be-it might be up to three hours, or just 45 minutes-is that something you would be interested in?

Barry Gardiner: If we could be sure of getting something like an hour and a half, that would be great.

Q17 Chair: Turning to topicality, you are talking about before the summer recess, are you?

Barry Gardiner: Yes, indeed, because in order to feed into the preparatory work being done on the millennium development goals post-2015, the sustainable development goals, and in order to respond properly within the time frame given that the Natural Capital Committee has just released its first report, the debate needs to happen before we rise for the summer, rather than later on in the year.

Q18 John Hemming: Parliament has scarce resources in terms of parliamentary time. Obviously, your proposal ideally fits into the end-of-day slot, with a vote-there is no question about that-but we do not know whether we are going to get one of those. The question is, if we were able to offer you some time in Westminster Hall before the recess, for instance, but could not offer you some time in the main Chamber, would you refuse it?

Barry Gardiner: No, I would not.

Q19 John Hemming: So you are happy with a general debate in Westminster Hall, if we cannot slot you in at the end of the day.

Barry Gardiner: Absolutely.

Chair: That is really helpful, thank you.