Review of impact of Act on equalities

Finance Bill – in a Public Bill Committee at 2:45 pm on 18th June 2020.

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(1) The Chancellor of the Exchequer must conduct an equality impact assessment of the Act, and lay this before the House of Commons within six months of Royal Assent.

(2) This assessment must consider the possible impacts of this Act on individuals and groups with protected characteristics under the Equality Act 2010.”

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on equalities.

Brought up, and read the First time.

Photo of Andrew Rosindell Andrew Rosindell Conservative, Romford

With this it will be convenient to discuss:

New clause 17—Assessment of equality impact of measures in Act—

(1) The Chancellor of the Exchequer must lay before the House of Commons a report assessing the effects on equalities of the provisions of this Act within 12 months of the passing of this Act.

(2) The review must make a separate assessment with respect to each of the protected characteristics set out in section 4 of the Equality Act 2010.

(3) Each assessment under (2) must report separately on the effects in in each part of the United Kingdom and each region of England.

(4) In this section—

‘parts of the United Kingdom’ means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

‘regions of England’

has the same meaning as that used by the Office for National Statistics.”

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on equalities.

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

New clause 5 requires the Chancellor of the Exchequer to review the impact of the Bill on individuals or groups with protected characteristics defined under the Equality Act 2010. The Equality Act, passed by the last Labour Government, was one of the most important pieces of legislation that we passed. It aimed to accelerate the advance this country has made over successive decades in trying to eliminate the discrimination, prejudices and inequalities experienced by people on the grounds of race, ethnicity, gender, sexual orientation, gender identity, religious beliefs and so on.

Throughout my life, I have felt an almost certain sense of inevitability that Martin Luther King was right when he said that

“the arc of the moral universe is long but it bends towards justice.”

It implies the onward march of social progress. We have seen that in this country. On discrimination against people based on their race, the indicators have improved. Action has been taken to tackle gender equality and the role of women in our society. The Labour Government delivered historic changes in terms of the treatment of LGBT people and established such a consensus that the coalition Government built on that record with legislation on equal marriage. The Disability Discrimination Act 2005 improved the treatment of disabled people.

However, inequality is still present in our society and injustice is still too frequent. I am not sure we can say with the same sense of certainty I used to feel that the onward march of social progress is inevitable. Progress has to be defended otherwise it gets rolled back. Unless there is a relentless and genuine commitment to tackling inequalities, they continue to persist. It is not just that people are victims of deliberate and conscious bias and discrimination. Often they are victims of unconscious bias and discrimination, and that is why the evidence and the data are so important. It is not enough just to reassure ourselves that we are nice people and we like treating one another fairly. We have to look at, and be guided by, the evidence. Even those of us with deep personal convictions when it comes to tackling inequality and injustice can make mistakes. We are all affected by biases and preconceptions, and we have to remain constantly alive to them.

I do not think the picture painted in our country today is one we ought to be satisfied with. Women make up 69% of low-paid earners and the majority of people living in poverty, including 90% of lone parents, almost half of whom are living in poverty. Many of those women are disabled or face racial inequality, a reminder that although we understandably and rightly set out in legislation those protected characteristics one by one, the discrimination, prejudices and biases that people are subjected to are often intersectional. Sometimes people face discrimination, whether deliberate or otherwise, twofold, threefold or fourfold. Women are disproportion- ately likely to work in sectors that have been hardest hit by the lockdown we are experiencing as a result of coronavirus. Figures from the Institute for Fiscal Studies show that 36% of young women work in sectors that have been closed down, including restaurants, tourism and retail.

Almost half of people living in poverty today in the UK are disabled or live with someone who is. The Runnymede Trust has found that black African and Bangladeshi households have 10 times less wealth than white British households, and black Caribbean households have about 20p of wealth for every £1 of white British wealth. Around 18% of Bangladeshi workers are paid below the minimum wage, compared with 3% of their white counterparts. That is a reminder and recognition of the fact that although we use the term “black and minority ethnic” as a catch-all, there are many different experiences among people of different races and ethnicities. We have to pay attention to the different variables and factors that have an impact on people.

We see on the annunciator that there is a debate going on in the Chamber on the impact of covid-19 on BAME communities in this country. What happened in the United States of America to George Floyd and the prominence that it brought to the Black Lives Matter movement make this issue extraordinarily salient. The world was presented with a most egregious example of racial discrimination—a total abuse of power: someone acting with state authority murdered someone by brute force, live on camera for the whole world to see. In response, there has been outrage, but also people indulging in culture wars, and there have been distractions and deflections, rather than our trying to seize the moment for what it could do: bring about a sea change in our approach to race relations in this country and so many others around the world.

I was really disappointed, especially as a London MP, to see that when people marched outside Parliament a couple of weekends ago, the response by some of our political leaders was not to say how extraordinary it was that people who know that they are disproportionately affected by covid-19 put themselves at greater risk by marching through the streets of London—that tells us something profound; we must respond in an equally profound way. The response was to compare—almost equate—that march to a far-right, racist demonstration that took place the following week, as if a small number of troublemakers at an anti-racism demonstration was equivalent to a pro-racist demonstration, at which, by definition, everyone who turned up was a troublemaker. The political response to this crisis has not met the challenge and demand of the moment.

In any event, putting aside current events, we know from looking at the evidence that on any given day of the week, and in any given month of the year, prejudice still exists in our society, and that we ought to do something about it. That is why, when the Government announced their plans for a new review of racial inequality in our country, they were met not with a broad welcome by Members across the House, but with exasperation—certainly by my right hon. Friend Mr Lammy, the shadow Justice Secretary, speaking on the “Today” programme.

The evidence is there, and there are many reviews and recommendations. The Government just have to implement them, and that is a question of political will and leadership. Opposition Members who speak on these issues would dearly love to be in a position to enact those recommendations and make a difference. I do not know why the current occupant of No. 10 often behaves as a passive bystander, seemingly unable to grasp the opportunities available to him to make a real difference to people in our country.

That is why new clause 5 really matters. It is important that we measure the impact of Government policies and legislation on the inequalities that still blight our country. Having been critical of this Government and their failure to take these issues seriously in the current climate and in recent years, let me give a positive example of why Treasury Ministers should embrace the new clause enthusiastically. We saw through the Women in Finance charter, championed by the Treasury, what strong political leadership can do. In the last Parliament, I was a member of the Treasury Committee. We went around the world talking about the Women in Finance charter, and the evidence we took showed that although it by no means solved all problems, leadership from the Treasury, and clear expectation, drove real behavioural change in finance. Given the UK’s role as a financial centre and a financial leader, that has had an impact across the world. As she is here this afternoon, I warmly pay tribute to the work of the hon. Member for West Worcestershire in that regard.

Having admonished the Government for their inaction and failures, I hope they will find inspiration from their own examples of the positive difference that they can make in government, if only they grasp the opportunity given to them by the British people at the recent general election. Inequality and injustice do not harm only those who are direct victims, but harm us all, because injustice for one is injustice for all. There cannot be equality for one unless there is equality for all. I commend new clause 5 to the House.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury) 3:00 pm, 18th June 2020

I rise to speak to new clause 17 and associate myself with the remarks of the hon. Member for Ilford North, with which I broadly agree and support. We certainly support new clause 5, which chimes with our new clause. We live in a society where it is clear and evident that able-bodied older white men do better than almost everybody else, so what we want to see from the Finance Bill is who benefits from the measures within it and how we know that. We do not know that from how the Government have acted, as they have conducted a very light-touch equality impact assessment on the Budget.

The Women’s Budget Group has produced an excellent briefing, and it calls the Treasury out on failing to publish comprehensive equality impact assessments:

“The only impact assessment relating to protected characteristics in the Budget documents are the Tax Information and Impact Notes (TIINS) produced by HMRC. Only a few measures were recognised to have any equalities impact at all and even here the analysis is cursory, based on limited evidence and with a poor understanding of equality impact…In the absence of a meaningful cumulative equality impact assessment of the budget as a whole it is impossible to judge whether the Treasury has met its obligation under the Public Sector Equality Duty to have ‘due regard’ to equality.”

That is pretty damning on the equality impact assessments that Ministers say they have carried out.

Under the measures assessed as having an equalities impact in the equality impact assessment, the Women’s Budget Group notes that for the lifetime limit for capital gains tax entrepreneurs’ relief, the assessment recognises that

“claimants tend to be older, men, of above-average means, and include individuals who are selling their business or their company’s shares on retirement”,

and does not anticipate an impact on any other groups sharing a protected characteristic, but there is no working to show how the Government arrived at that. There is no further analysis as to why they think that no other groups will be affected. It is one thing to assert that, but the Government have to show their working, and they have not done that.

The Women’s Budget Group also notes that the equality impact assessment states that the measure on pensions tax income thresholds for calculating the tapered annual allowance will impact more on men than on women. The assessment states that it is

“not anticipated that there will be impacts on any other groups sharing protected characteristics”.

However, the Women’s Budget Group points out that the family resources survey could have been used to assess the impact by age, ethnicity, disability and various other characteristics, but that was not done. Again, it is not a full equality impact assessment; it is very light touch.

The WBG also mentions the changes to the disguised remuneration loan charge as referenced in the equality impact assessment. The analysis states that,

“broadly the measure is expected to affect more males than females”,

but that it is

“not anticipated that this measure will have a significant, or disproportionate, impact on groups with protected characteristics”.

However, there is no explanation for that. It might well be true, but we cannot tell because the Government have not shown their working.

The Women’s Budget Group analysis also discusses measures where no equalities impact is identified at all, when it really should have been. I do not want to go into all of these things, because they are multiple, and we would be here all afternoon, but I will touch on the changes to the van benefit charge and fuel benefit charges for cars and vans and the taxable benefits regime for measuring CO2 emissions, which primarily impact on

“individuals who use a company van or car which is available for their private use and/or who are provided with fuel for their private use by their employer”.

Those people are far more likely to be men. We might guess that, or we might anticipate that. The Government’s statistics on driving licences show that in 2018, 81% of men had a driving licence, compared with 70% of women. There are also issues of race, because 62% of people designated as Asian, 52% who are black, and 76% of people who are white have driving licences. That is a clear discrepancy and will have a clear differential effect as to who will or will not benefit from the measures. The Government already have those statistics but have not chosen to do an equalities impact assessment on them. There will be a differential impact because not everyone has a driving licence and those who do have one are predominantly white men.

The Government might want to look at the sectors that would benefit. There may be differences in the types of people who would do jobs with a company car or van. The Government might want to look at those sectors and say, “Actually, there is a disproportionate number of people of a particular background in there.” That has not been done. If we do not count those things we do not know what the impact is. We do not know who benefits and why, or what we can do to make sure that everyone benefits from the measures that the Government propose.

That, I suppose, is just a small example of why the impact assessment is needed. There are clear disparities across society and clear inequalities. If we do not count in the Finance Bill who benefits, why, and what can be done to redress the imbalances that we see in society in front of us, by taxation or other measures, we will never be able to address those inequalities and go to a more equal society.

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary

New clause 5 would require the Chancellor to conduct and lay before the House an equality impact assessment of the Act within six months of Royal Assent. New clause 17 would require him to lay a similar report within 12 months. Those additional reporting requirements are not necessary. The Treasury considers carefully the equality impacts of the individual measures mentioned and announced at fiscal events on those sharing protected characteristics, including gender, race and disability, in line with its legal obligations and its strong commitment to equality issues.

The outcome of all fiscal events is published, and is subject to much parliamentary and public scrutiny. The Treasury also takes care to pay due regard to the equality impact of its policy decisions relating to the covid-19 outbreak, in line with all legal requirements and the Government’s commitment to promoting equality. There are internal procedural requirements and support in place, to ensure that such considerations inform decisions taken by Ministers.

In the interest of transparency the Treasury and HMRC publish tax information and impact notes for individual tax measures that include in summary form assessments of their expected equalities impacts. The system of accompanying tax legislation with TIINs was introduced under this Government, and the notes include headline summaries of equality impacts, as well as other important information that reflects internal assessments carried out as an integral part of decision making.

In addition, the Treasury already publishes analyses of the impacts of the Government’s measures on households at different levels of income, in the “Impact on households” report, which is published separately alongside each Budget, along with trends in living standards and the labour market, by region and income level. That is the most comprehensive analysis of its type available, and it shows that as a result of decisions taking in Spending Round 2019 and Budget 2020 the poorest households have gained the most as a percentage of net income.

That brings me to the comments of the hon. Member for Ilford North and the hon. Member for Glasgow Central. They keep talking about the Government not doing enough on inequalities. Actually the Government have done quite a lot, but the hon. Members refuse to acknowledge it. When we have commissions and recommendations the hon. Member for Ilford North complains about a new commission. We have carried out recommendations, and the hon. Members pretend that nothing has happened. The hon. Gentleman mentioned the shadow Justice Secretary. Did he ask him about the progress that we have made on the Lammy report? We have carried out many of those recommendations, but hon. Members stand up in Parliament and pretend that nothing has happened. They continue to use incendiary and inflammatory rhetoric. Is it any wonder that there are people out there who feel that the Government are doing nothing, when so many MPs in this House stand up and say so? It is a shame, and as Equalities Minister I think it is a disgrace.

In a debate in the House on 4 June a Labour MP used at column 1008 the offensive phrase about being black that it is “a death sentence”. What do Labour MPs think that people outside this place are hearing? I am not going to stand here and allow Opposition Members to tell me, the Minister for Equalities, what the Government are doing; instead, I shall tell the Committee.

We are tackling inequalities in all areas of life, and to date have made great progress, including on BME employment, which has been at a record high, meaning that more people have the security of a regular wage. More than 13,000 BME-led businesses have received start-up loans, and since we launched the scheme in 2012, more than one in five loans have gone to BME recipients.

Record numbers of young people from ethnic minority backgrounds are attending university, with an increase from 17.9% to 24.8% in 2019-20. Building on the work of the race disparity audit, we continue to improve the quality of evidence and data in Government on the barriers that different groups can face, ensuring that fairness is at the heart of everything we do.

One thing that we must do in the House is ensure that we speak the truth and not use people from ethnic minority backgrounds as political footballs. It is so, so dangerous. So many people speak in this House who do not take the time to understand the issues we are talking about, but instead come here and try to inflame tensions. [Interruption.] The hon. Member for Glasgow Central is shaking her head. She uses the example of driving licences; I can tell her that the reason why that disparity exists is that the vast majority of black people live in urban constituencies and do not need driving licences. If she came to my constituency of Saffron Walden, she would find that the vast majority of people are white and they need to drive. Once that is accounted for, those disparities disappear. I ask her to take some time to find out the reasons behind—

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary

No, I am not giving way; Opposition Members have had their time. I ask the hon. Lady, instead of trying to give me lectures, to take some time to learn a little more about what is going on. Even the phrase she talks about—“people with protected characteristics”—is wrong; we all have protected characteristics. The Equality Act is for everybody and not for specific groups of people.

On that note, neither of the new clauses would be useful in finding out more about the impact on equality, because the Government regularly publish in summary form the equality impact assessments for the legislation that we introduce. The reports required by the new clauses would not add any genuine value, so I ask the Committee to reject them.

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

That speech was really quite extraordinary and incendiary itself in response to what has been said. We are giving voice to the statistics and the data. Speaking for myself—I imagine this is also true for the SNP spokesperson—I am particularly giving voice to the concerns of my constituents. I represent one of the most ethnically and religiously diverse constituencies in the country. People who have written to me in recent weeks have not done so simply out of anger or emotion, and certainly not because they have read something that I have said in Hansard—that would be a novelty—but because of their own lived experiences. That is the frustration for me.

It would be one thing had the Government said this afternoon, “This is what we have done, but we recognise that there are big challenges, so this is what we still plan to do,” but their response to the protests of recent weeks has been tone deaf, for the most part, and actively irresponsible in other respects. It is regrettable that we do not seem to be seizing the moment, either in Government or as a Parliament, to reassure people throughout the country that we will leap on this moment. If we look throughout history, we see that sometimes events occur and there are big moments that can positively shift the dial in the most remarkable way. That is what we should be seeking to do here. I have actually seen a better response in that respect from the private sector than from our own Government. The private sector does not have a democratic accountability to the people—it has a commercial one and a profit motive; if companies are doing these things out of a sense of corporate social responsibility, that is good for them—but the Government have democratic accountability.

The Government’s efforts on equalities do not match the rhetoric we heard from the Minister. The Treasury has a particular leadership role to play, particularly on tackling economic inequalities that have an impact on people from a range of characteristics, for a range of reasons, and in different ways. With that in mind, I want to press new clause 5 to a vote.

Question put, That the clause be read a Second time.

Division number 10 Finance Bill — Review of impact of Act on equalities

Aye: 7 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 7, Noes 9.

Question accordingly negatived.