What support he plans to provide to (a) leaseholders and (b) tenants living in buildings under 18 metres of height with flammable cladding.
What steps he is taking to support leaseholders living in buildings under 18 metres in height with (a) dangerous cladding and (b) other fire safety defects.
Buildings below 18 metres in height will not carry the same inherent risk as a building above 18 metres. However, some will need remediation. To give residents in lower-rise buildings peace of mind, we are establishing a generous scheme to ensure that, where required, cladding can be remediated on buildings between 11 metres and 18 metres. Leaseholders will be asked to pay no more than £50 a month, protecting them against these unaffordable costs. We will work at pace to develop the details of the scheme and communicate them to the House as quickly as possible.
No one needs reminding that we are nearly at the four-year anniversary of the Grenfell disaster, yet many of my constituents remain trapped in dangerous homes and, because of this Government’s arbitrary decision to only help those in buildings above 18 metres, they feel hopeless and invisible. Does the Secretary of State agree that no leaseholder should have to pay for fire safety problems that are simply not their fault, and that people should not be required to pay even £50 or less a month, regardless of whether their building is 7 metres, 18 metres or even lower?
The hon. Lady is right; great progress has been made over the last four years to ensure that the remediation of high-rise properties is undertaken, because that is where we have been guided by official advice. I can tell the House that remediation has either been completed or is under way in 95% of aluminium composite material-clad buildings. We are clear that buildings below 18 metres also need help, which is why we have tabled this generous package of support where otherwise there would be no support. It is also clear that developers and building owners are stepping up to the plate and remediating the buildings for which they are responsible, and are providing funds so to do.
Many leaseholders have spent their third lockdown stuck in buildings with serious safety defects and are unsure when the works will be completed. The Minister talks about providing a generous scheme for blocks of 18 metres or less. Can he explain to the House how generous that programme is, how much is being committed and when our constituents can expect the works to be completed—both for blocks under 18 metres and blocks over 18 metres that require remedial works—so that people do not have to continue to live in potential death traps?
With respect to buildings over 18 metres, the hon. Lady will know that we set aside funds of £1 billion using the building safety fund in order to deal with properties with non-ACM dangerous cladding material. Some 106 buildings have already begun that work and we estimate that a further 338 will begin the work by September, which was the date that we set for work using BSF funds to be undertaken. With respect to buildings below 18 metres, we want to ensure that we are prioritising affordability and accelerating remediation where it is required. It is a complex set of challenges, but we are determined to meet them and to get this right, which is why we will bring forward further information as soon as we are able to do so.
Can the Minister explain why three quarters of cladding systems on new medium-rise buildings have used combustible insulation materials despite a proposed Government ban on them? That is 51 out of 66 residential blocks of 11 to 18 metres in height built in 2019 and 2020 that are now liable for the imposition of unwanted Government loans. There is the nightmare of EWS1 forms, inflated insurance premium costs, service charges and much, much more. At what stage are the ministerial team going to get a grip of this chaos?
The hon. Gentleman knows full well the work that the Government have undertaken to ensure that we address this complicated issue, which involves buildings, building owners, warranty providers, insurers and leaseholders themselves. We have brought forward a very generous set of schemes. More than £5.1 billion of public money has already been allocated to remediate taller high-rise buildings. We have proposed a generous scheme to support people living in leasehold properties between 11 and 18 metres. We will announce further details of that scheme shortly so that the people living in them can have peace of mind that they have a way out too.
What progress his Department has made on the design of the UK shared prosperity fund.
The UK shared prosperity fund will help to level up and create opportunity across the United Kingdom. The spending review 2020 set out the main strategic elements of the UKSPF in the heads of terms, and we will publish a UK-wide investment framework in 2021 and confirm a multi-year funding profile at the next spending review. We are providing an additional £220 million through the UK community renewal fund to help those areas to prepare for the introduction of the UKSPF.
Wales received £375 million a year under the EU structural funds but this Government’s levelling-up fund is giving Wales only £30 million a year, while the community renewal fund’s pilot projects split £220 million across the four nations. Can the Minister see why my constituents are already sceptical that this Government will fulfil their promise that Wales will receive “not a penny less”?
Levels of investment from EU structural funds will be higher across the United Kingdom in ’21-22 than they were in ’20-21. We are also finding additional UK funding to support our communities to pilot programmes and new approaches. The hon. Lady mentions the levelling-up fund. Her local authority will receive £150,000 capacity funding support with that bidding process. As we set out in the spending review, funding for the UKSPF will ramp up so that total domestic UK-wide funding will at least match EU receipts, reaching £1.5 billion a year. These funds will have a real, lasting impact on communities that will make a significant difference to tackling deprivation and inequality, and binding together our precious United Kingdom.
I thank the Minister for recognising when I met him last week that the UK shared prosperity fund will need to be more transparent in a way that the towns fund clearly was not. If he intends to keep this promise of more transparency, when will he consult on the UK shared prosperity fund that his Department committed to three years ago, and will his Department publish how much funding English regions will get?
The point that I made to the hon. Lady last week is that we have published all the details in the technical note that is set out on gov.uk. We thought that was the right thing to do. At the spending review last year, we set out the main strategic elements of the UKSPF in the heads of terms. The funding profile will be set out at the next spending review and we will publish further details in a UK-wide investment framework later this year. In the meantime, the community renewal fund will deliver real, lasting change into communities right across the country. It will tackle inequality and deprivation in some of the communities that need it the most and were neglected for so long by Labour, and of course one of its key aims will be to work to bind together our precious Union.
What recent assessment he has made of trends in the number of first-time buyers entering the housing market.
In 2018 and 2019 we saw the highest and the second-highest number of first-time buyers since 2007. With the effect of covid, 2020 saw a 14% decrease from the 2019 total. The Government are now redoubling their efforts to assist first-time buyers. That is why today we launched the mortgage guarantee scheme offering a 95% loan-to-value mortgage, developing first homes and enabling first-time buyers to purchase new-build homes locally with at least a 30% discount—a determined effort to support buyers.
For many first-time buyers, especially in cities, the options are mainly new-build and leasehold properties, but many of them are walking into a new nightmare of costs. Inside Housing is today reporting on purchasers buying properties as safe only to discover almost immediately that the ratings are changing, leaving them with huge bills for waking watch, and unsaleable properties. Does the Minister know how many first-time buyers are affected by this, and why is the only truly blameless party, the purchaser, the one who is still left carrying the can and the risk?
There are a suite of options for first-time buyers. They can purchase a home using the Help to Buy scheme. They can take advantage of our shared ownership scheme, whereby, under the new proposals, failings and defects will be fixed by the developer for the first 10 years. As I said, the mortgage guarantee scheme that we announced today allows first-time buyers and others to purchase homes with as little as 5% deposit We are determined to ensure that first-time buyers are able to achieve their dream and get on to the property ladder. That is a world away from the campaign that the hon. Lady chairs—the campaign of Sadiq Khan, who promised to build 116,000 homes in London but has thus far managed to deliver only 28,000. I wonder whether that is why the housing pledge, which was at the top of his campaign in 2016, is now second from bottom in 2021. I think that that says a lot about Labour and its priority for housing.
That was quite staggering. I do not know whether the Minister was listening to my hon. Friend the Member for Westminster North (Ms Buck). He avoided answering her, and he previously avoided answering my hon. Friend the Member for Weaver Vale (Mike Amesbury), so I will give him another go. Will the Minister please tell us what on earth the justification is for allowing new buildings to be built with dangerous cladding and other fire safety defects? What will he do to ensure that the number of first-time buyers moving into homes with dangerous cladding is zero?
I am grateful to the hon. Lady for giving me a second go. I point out that she has no policies of her own. We are quite prepared to let her borrow some of ours, because we have a lot of them. We are determined to make sure, through the building safety regime that we will introduce, that we have a world-class building safety programme. We have consulted on the challenge of combustible products, which is a very complicated one, and we will make our announcements on those in due course. But make no mistake, Mr Speaker: we are determined to support buyers, we are determined to get more people on to the property ladder and we are determined to build better-quality homes—things that the Labour party talks about, we are doing.
What recent discussions he has had with the devolved Administrations on the (a) levelling-up fund and (b) UK shared prosperity fund.
Along with the Secretary of State, I met the Minister for Trade, Innovation and Public Finance in the Scottish Government last month to discuss the levelling-up fund and the UK shared prosperity fund. We will continue to engage with the devolved Administrations and, importantly, with local authorities and communities in Scotland directly and wider public and private sector organisations to ensure that funding is used to best effect and to support citizens right across the country.
A joint statement by Ministers from the Scottish, Welsh and Northern Irish Governments criticised the UK Government for using the United Kingdom Internal Market Act 2020 to bypass devolved Administrations. Is it not the case that the UK Government intend to use levelling-up funding to shore up support for the Union and to undermine the very basis of devolution? If not, what are the Minister’s plans to devolve the funding within the framework of the devolution settlement?
I can confirm that we want to do everything possible to enhance and protect our precious Union. We will work with communities directly in Scotland, Wales and Northern Ireland to deliver this important funding. We have already committed to providing capacity funding to local authorities in all the devolved Administrations, to get them started on preparing for these funds. We are excited about working with them, and they are excited about working with us on delivering these funds. We have had huge interest from councils and communities that want to work with us to deliver real and lasting change for their communities, and that is why there is such a high level of enthusiasm and engagement.
Sixty-six per cent. of Scots are deeply concerned about the way that the United Kingdom Internal Market Act seeks to undermine Scotland’s Parliament. Alongside the unilateral decision making of the UK Government regarding the shared prosperity fund and the levelling-up fund, despite what the Minister just said, this is being used to aggressively assert Unionism in Scotland and bypass Scotland’s Parliament. Meanwhile, 33 of the last 41 polls show majority support for independence in Scotland. Does the Minister think that this aggressive and assertive Unionism, trampling all over Scotland’s Parliament, is endearing the people of Scotland to the Union?
I urge the Scottish nationalist party to trust their local councils and local communities, which are so passionately engaging in this project and working with us, using the capacity funding we have committed to them to start this process. They will work with us on delivering these funds, which will tackle deprivation and enhance communities right across Scotland, and we look forward to working with them with determination and enthusiasm in the weeks, months and years ahead.
What discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on the role of his Department in meeting the national target of net zero emissions by 2050.
The simple answer to the hon. Lady’s question is that lots of discussions have been had. This Department works very closely with the Department for Business, Energy and Industrial Strategy to set us on the path to ensuring that all homes and buildings meet that national net zero target. As no doubt you know, Mr Speaker, this is part of the Prime Minister’s 10-point plan to build back greener post pandemic and ensure we achieve net zero emissions by 2050.
Heating the UK’s draughty homes makes up 14% of the country’s carbon emissions. Many of my constituents in Putney wanted to apply for the green homes grant, but cannot because it has been scrapped. The Labour Government set out the original plans for zero-carbon homes in 2006, which set a goal of achieving zero-carbon homes by 2016. Why was this ambition abandoned by this Government in 2016, why was the green homes grant scrapped this month by this Government and what will be replacing it?
The green homes grant is of course a BEIS initiative, but I can tell the hon. Lady that although it was making encouraging progress—with over 96,000 applications, and 39,000 vouchers had been issued via the scheme—given the fact that it was not progressing quickly enough, we have taken stock and decided to reconsider our approach. Last month, the Secretary of State for BEIS announced £300 million of extra funding for green home upgrades through the local authority delivery element of the green homes grant scheme and the social housing decarbonisation fund. This brings the total spending on energy efficiency to £1.3 billion.
What steps he is taking to support the re-opening of hospitality venues as the covid-19 lockdown restrictions are eased.
What steps he is taking to help high streets recover from the covid-19 outbreak.
Last week, we saw friends and families reunited, our favourite shops, pubs and cafés reopened and an injection of sunny optimism into hospitality and our high streets as we move to the next stage on our road map out of the lockdown. To help these measures, my Department has introduced crucial planning easements, including fast-track pavement licences, which are helping to make al fresco dining a reality, enabling communities to hold popular outdoor events such as markets and allowing pubs to set up marquees in their gardens for the whole of the summer—all without the need for costly planning permissions.
In Romsey and the surrounding villages, much use has been made of the planning easements by pubs, cafés and restaurants to install temporary awnings, marquees, gazebos and so on. Please can my right hon. Friend reassure me that plenty of time will be given to pubs and so on before these structures have to be removed? In many cases, they will continue to provide additional capacity even when indoor socialising is allowed, and our hospitality sector has had a very tough year.
I am delighted to hear that my right hon. Friend’s constituents, like millions of others across the country, are making use of these easements to enjoy the summer sunshine and to support local pubs, cafés and restaurants. When the first lockdown began, we inherited a planning rule called the 28-day rule, which enabled a business to set up a marquee or another temporary structure for just one month without seeking planning permission. We doubled that, and now we are bringing forward the legislation to ensure that that will remain in place for at least the whole of the summer, and I hope perhaps significantly longer. That will enable small businesses the length and breadth of the land, like those in my right hon. Friend’s constituency, to put up those marquees and gazebos, and get the full benefit of them.
Our town centres lie at the heart of our communities. They should be a source of pride and be attractive to visitors, but vacant buildings have become a blight in many of them. Can my right hon. Friend confirm that he is taking steps to make it easier for vacant buildings to be repurposed or demolished, so that we can make sure our town centres are attractive places that people want to visit?
My hon. Friend is absolutely right. Our high streets have been hit hard by the pandemic, but the market forces have been amplified and magnified. These are very long-standing issues and ones that we have been focused on for some time. We need to make some fundamental changes to ensure that we have a flexible planning regime so that businesses can adapt and evolve, for instance by turning a café into a hairdressers or a yoga studio into an office, all without the need for costly planning permissions, and where businesses and buildings are sat empty and derelict, then to be able do the logical thing and turn them into something else, particularly homes. That is exactly why a few weeks ago we brought forward the planning changes to do that, and I hope that will see hundreds, if not thousands, of homes being created in our town centres and on our high streets over the course of this year.
The Secretary of State’s Department is bringing forward further permitted development rights that will allow gyms, crèches and offices, as well as shops, banks and restaurants, to be converted into homes without going through planning permission. Has the Department conducted an impact assessment of how many cafés, pharmacies and corner shops will be lost from our high streets, never to return?
The hon. Lady will be aware that we have approached this issue with great caution and due consideration. We have consulted on those matters and received thousands of responses, and we have made our proposals on the back of that, so they have been carefully thought out to consider some of the issues she has raised. We made a number of changes, to protect, for example, nurseries and to provide further protections for conservation areas, but the Opposition’s approach, which could be characterised as the ostrich’s head in the sand, is not the one that we have chosen to take. We think that high streets and town centres are undergoing the biggest transformation not just in our lifetime but at least since the second world war and that we need to introduce measures that are proportionate to the scale of the challenge. That is why we are making billions of pounds of investment through our towns and high streets and levelling-up funds, and that is why we are pursuing the planning reforms that the hon. Lady refers to, and I think most reasonable people across the country would agree. I note that in her own constituency Mike Cartwright, who runs the Bradford chamber of commerce, seems to agree. He says: “Having unused space is bad for the economy,” and “buildings remaining empty for years is to no one’s benefit.” We agree; that is why we are taking action.
What recent estimate he has made of the number of additional council and housing association homes required to meet demand for social housing.
Planning policy is clear: it is for local authorities to identify the size, type and tenure of the housing needed for different groups in the community, including those who require affordable housing. We are committed to increasing the supply of affordable housing and are investing over £12 billion in the affordable housing programme over the next five years, the largest investment in affordable housing in over a decade.
Many of my constituents cannot afford to buy a house of their own and are finding that private sector landlords are using various devices to block access to that market as well, such as through guarantees and bond requirements, so council housing or social housing is the only option, but demand is outstripping supply, and, according to the Chartered Institute of Housing, outside London only a third of all the social housing needed will actually be built in the next five years. So what does the Minister say to my constituents who find themselves with no housing options at all at the moment?
Over the last 10 years around 150,000 new homes for social rent have been built. We have made it easier for local authorities to build their own council homes by changing the rules around the housing revenue account and by making it easier for them to get cheap loans through the Public Works Loan Board. Our new affordable homes programme, investing £12 billion-plus in new homes over the next five years, will double the number of socially rentable homes built to 32,000. I rather hope the hon. Gentleman’s local authority will take advantage of the reforms that we have undertaken and the powers we have given local authorities, because in 2019-20, before the covid emergency, it built no social houses at all.
What criteria the Government used to determine the prioritisation of areas for the allocation of levelling-up funding.
What criteria the Government used to determine the prioritisation of areas for the allocation of levelling-up funding.
The levelling-up fund will be allocated competitively and is open to all local areas. As we set out in the prospectus published at Budget, the index used for the levelling-up fund places areas in category 1, 2 or 3 based on their need for economic recovery and growth, improved transport connectivity, and regeneration.
If the Minister does not mind my saying so, that index seems to be working in a rather curious way. It has not escaped anyone’s attention that some Tory target areas in England seem to have done extraordinarily well out of this fund, yet areas such as mine in the north-east of Scotland—Aberdeen City Council and Aberdeenshire Council—are languishing in levels 2 and 3 of the fund, despite being forecast to be hit hardest by Brexit. We know there was a power grab with the United Kingdom Internal Market Act 2020. Is not the truth that we are now seeing a corresponding cash grab, because the Conservative Government know that not even all the rhetoric in the world about shared prosperity and precious Unions can spare their party from the hiding it is set to get from Scottish voters on 6 May?
It is hard to see how the £150,000 per local authority that we have already committed to is a cash grab from Scottish communities. We are investing directly in Scottish communities, with £125,000 in capacity funding already. This is a bidding process, and rightly so, but we are providing that capacity funding, and for the first round of funding at least 9% of the UK allocations will be in Scotland. As I said earlier, we are hugely excited about the opportunities we have now to work directly with communities in Scotland. We have already been in touch, of course, with Aberdeen City Council and Aberdeenshire Council to ensure that they have a good understanding of the levelling-up fund, including, importantly, securing support from Members of Parliament. I very much hope that the hon. Gentleman will play a full part in that process.
I am afraid that answer simply is not good enough. Not only are the Tories seeking to bypass devolution; they are also seeking to bypass the needs of Aberdeen. One hundred and twenty-three local authorities have been placed in pot 1, yet Aberdeen has been dumped in pot 2. The consequence of that is clear for all to see: it means that we will not have access to the funding that we need at this moment in time. Aberdeen accounts for a third of all job redundancies in Scotland since the start of the pandemic. If that is not a criterion for funding, what is?
It is published fully and frankly on the Government website. The hon. Gentleman can have a look at it; I would advise him to do so. Authorities are already receiving capacity funding, so it is not true in any way to infer that every single Scottish local authority will not receive support through this initiative. We are hugely excited about the opportunities this presents us with. We are going to be investing directly into communities. There is huge support for this funding. I strongly urge the hon. Gentleman both to read the documentation on the website and to get involved in playing a full part in the process.
What steps he is taking to promote energy-efficient house building.
The future homes standard will ensure that new homes produce 75% less carbon than those being built today. Those properties will be future-proofed, with low-carbon heating and high levels of energy efficiency, and they will not need any further retrofit to become net zero in line with the electricity supply. That is what building back greener looks like.
I am grateful to my hon. Friend for what he has said. As he knows, building regulations are one tool we can use to improve the environmental performance of new homes, and I am conscious that the Government are consulting on how those regulations might be reformed. However, as he also knows, the regulations in place at the moment require compliance by developers to a design standard rather than a performance-in-use standard. Is his Department considering whether that should change? In any event, when does he expect revised and improved building regulations to be in place to compel that improved environmental performance?
My right hon. and learned Friend will be delighted to know that we will update the regulations relating to fuel, power and ventilation this year, in advance of the introduction of the future homes standard in 2025. But we are not waiting for 2025; in the short term, our priority will be to implement an interim 2021 part L uplift. That sounds a bit esoteric, but it means that there will be a 31% reduction in carbon production compared with the 2013 standard. With regard to the point that he makes about performance standard versus design standard, I would be delighted to meet him and his constituent to discuss that further.
The SNP plans, during the next Parliament, to put £1.6 billion into decarbonising the way buildings are heated in Scotland. Ambitiously, that equates to one third of homes by 2030. Why are the UK Government failing to match Scotland’s level of ambition to decarbonise our homes?
I am grateful to the hon. Lady for her question. I am slightly disappointed, though. I thought she was going to rise to congratulate us on the social housing decarbonisation demonstrator fund, which has three excellent projects that are being progressed in Scotland. We on the Government Benches have no shortage of ambition to reach our net zero target by 2050. I look forward to working with Opposition Members to ensure we achieve that.
What plans he has to increase investment in local infrastructure.
What plans he has to increase investment in local infrastructure.
What plans he has to increase investment in local infrastructure.
What plans he has to increase investment in local infrastructure.
Infrastructure underpins our economy and improves people’s everyday lives. Over the next five years, the Government plan to deliver over £600 billion in public investment, the highest sustained level since the 1970s as a proportion of GDP. My Department is playing a leading role in that mission by making the biggest changes in the way we support local economic growth in a decade, with around £5 billion of investment through the levelling-up fund and community renewal fund, and our ongoing investment through the £3.6 billion towns fund. At the same time, we are reforming our planning system to build more homes, and ensuring that developers pay their fair share through a simpler, faster and more transparent infrastructure levy.
Aylesbury has seen unprecedented housing growth over the past 25 years and we will see much more in the years to come. Our infrastructure is currently at breaking point, with traffic congestion a real problem for local people. One way of alleviating that would be approval of the Aylesbury spur of East West Rail. What steps can my right hon. Friend take to work across Government, in particular with the Treasury, to secure funding for that vital link to ensure that housing development is matched by the appropriate infrastructure?
My hon. Friend is right to highlight the need for transport infrastructure investment in the Milton Keynes-Oxford-Cambridge arc, which is one of the fastest growing and most economically dynamic parts of the country. I understand how important the connection is to his constituents. I know he has met the Chief Secretary of the Treasury and the rail Minister to make the case for connecting Aylesbury to East West Rail, an overall project of which I have been a long-term supporter. He is right that more homes require more infrastructure. That is why we have a £7 billion national homebuilding fund, alongside the new infrastructure levy proposed to capture more of the land value uplift and ensure that when homes are built, they are built with the appropriate infrastructure as well.
It has been a privilege to co-chair the Stocksbridge towns fund board and work with the local community to develop our plans to regenerate the town with £24.1 million of Government investment. However, there are other towns in my constituency, such as Penistone and Chapeltown, that would also benefit from a co-ordinated community-led approach. What plans does my right hon. Friend have to encourage local councils to support communities to develop their own local infrastructure development strategies?
I enjoyed visiting Stocksbridge just over a year ago with my hon. Friend and was delighted to see its £24.1 million town deal announced by my right hon. Friend the Chancellor at the Budget. I very much look forward to seeing its exciting proposals come to life, including a new visitor centre for a gateway to the Peak district. I recognise the point she makes. She represents many other towns, such as Penistone and Chapeltown. We want to ensure that they, too, can benefit from much needed regeneration funding. That is why bidding is now open for our levelling-up fund, worth £4.8 billion, which will deliver genuine local priorities by putting local support, including that of a Member of Parliament, at the heart of its mission. When I visited Stocksbridge, the birthplace of the modern umbrella, my hon. Friend kindly gave me an umbrella. With the new local town deal and an excellent MP, I am hopeful that the sun will keep shining on her constituency for many years to come.
I thank my right hon. Friend for his earlier answer. Back in 2017, a £200 million funding gap was identified for infrastructure projects in Tendring. As the Secretary of State knows, there is ongoing work to address areas of greatest need, such as roads, hospitals and a personal campaign of mine to upgrade rail services to Clacton and Walton, but our most significant funding gap, as we look to deliver new housing, remains the reported £100 million hole in our adult social care budget. What is my right hon. Friend’s Department doing to address that?
I thank my hon. Friend for his question. This year, local councils will have access to an additional £1 billion for social care, on top of continuing all existing social care funding. He is right to raise the point that new housing requires new social infrastructure as much as it does hard infrastructure, in terms of roads and railways. That is why we are bringing forward the infrastructure levy, which will capture more of the land value uplift and ensure that developers pay a fair share. It is also why we are working with local authorities, including Essex County Council, to ensure that they can access the housing infrastructure fund and our new house building fund to get billions of pounds of investment into their communities.
Along with the rest of the Crewe town board, I was very pleased to submit our bid for investment earlier this year to help Crewe to build back better. I campaigned for us to get a town deal and I know what a positive impact it can have. Will the Secretary of State update me on when we can expect to hear what I hope will be positive news for Crewe?
I was delighted to receive Crewe’s town investment plan in January. Having visited my hon. Friend’s constituency many times over the years, I am excited to see the ambitious plans that have been developed for the town centre to welcome visitors and shoppers and creating an integrated High Speed 2 hub station. The plans are very well developed. My officials are currently conducting assessments and I look forward to making an announcement in due course.
What steps his Department is taking to support local authorities during the covid-19 outbreak.
We have so far allocated over £9 billion directly to councils since the start of the pandemic and local authorities are expected to receive over £3 billion of additional support in 2021-22, responding both to expenditure pressures and loss of income. This takes the total support that we have committed to councils in England to tackle the impacts of covid-19 to over £12 billion.
On 11 November, I and other representatives from Sheffield met the Minister to express concern that the loss of income to leisure centres in Sheffield was not being refunded to the council because the centres are managed by an arm’s length trust. I understand now from the council that the Government have recognised that the extra expenditure given from the council to the leisure trust to compensate for loss of income has been refunded —at least significantly—by the Government. I thank the Minister for that and for the help that he has given. Unfortunately, locally the Lib Dems have tried to claim that some of this money has gone from the council to the trust not to fund services in Sheffield, but to fund leisure centres in Scarborough. Will the Minister reassure me and residents in Sheffield that the money that he has given to Sheffield City Council has gone properly to fund services in Sheffield and nowhere else, and indeed, as the chair of the trust has confirmed, that all the money given to the trust by Sheffield City Council is funding leisure centres in Sheffield and nowhere else?
I thank the Chair of the Housing, Communities and Local Government Committee for that question. I was grateful to meet him and Julie Dore last year, and I know how important this matter is to the hon. Gentleman and his community in Sheffield. We have provided councils with a range of support for covid pressures on local leisure services, including unring-fenced grants, income compensation and the specific national leisure recovery fund. In all cases, Sheffield will comply with the funding conditions. My expectation would be that all that funding should be used locally to support local services in Sheffield and—he is absolutely right—not be transferred to other areas.
What assessment his Department has made of the effect of homes of multiple occupants on close-knit communities.
Houses in multiple occupation are a valuable part of the housing market and play an important role in delivering affordable accommodation, which is often vital in the communities that they serve. Most HMOs provide accommodation that is decent and safe for those living in it. Where HMOs may pose a risk to the wellbeing of their inhabitants or to the local area, we have given local councils robust powers to regulate standards and management of HMOs. If necessary, local planning authorities can also limit the proliferation of HMOs by consulting to remove the national permitted development right.
I am sure my hon. Friend would agree that, while most residents in HMOs are law-abiding individuals, there is no escaping the fact that very often the residents in such premises lead extremely different lifestyles from those of their neighbours. This has been a particular issue in the towns of Rossington and Conisbrough, where residents have complained that the increase in the number of HMOs has caused a spike in antisocial behaviour and a loss of community spirit. Despite this, I have not seen the Government mention the necessity of combating this phenomenon in the planning White Paper. What reassurances can my hon. Friend give my constituents that the Government recognise the issues caused by HMOs in small towns and villages, and what work is his Department doing, in conjunction with local authorities, to ensure that such residents are located in more appropriate areas?
I feel a huge degree of sympathy with the constituents of Rossington and Conisbrough who may have suffered antisocial behaviour as a result of HMOs in their area. I understand that my hon. Friend is working assiduously on behalf of his constituents to tackle this. We have given local authorities robust powers to regulate the standards and management of existing HMOs, including HMO licensing, penalties of up to £30,000 for breaches of the law and, for the worst offenders, banning orders. I urge my hon. Friend to press Doncaster Council to exercise those powers if appropriate.
If he will make a statement on his departmental responsibilities.
One of the biggest divides in our country has been between those who can afford their own home and those who cannot, and that is why I am pleased today to see the Government launch our new mortgage guarantee scheme as we strengthen our commitment to build back better from this pandemic. Today’s 95% mortgages will help families and young people to get on to the property ladder without the excessive burden of a large deposit, helping to turn generation rent into generation buy As we cautiously reopen the economy and return to a semblance of normality, we are ready to grasp the economic lifeline that comes from getting out and supporting local businesses, returning to pubs, restaurants and cafés and providing our local economies with the love and support that they need as we continue down the recovery road map. As we seize this economic boost, we will ensure that prosperity is shared across all the UK’s nations and regions, having announced the details of our landmark new levelling-up fund, the community ownership fund and the community renewal fund at Budget.
Can the Secretary of State explain why local people in Hull and the East Riding of Yorkshire were not trusted to be asked about what they wanted devolution to look like locally and to help to shape those plans, rather than just being told by Whitehall what they must have, with permanent changes to local government in return for vague and, to date, unspecified promises of regeneration?
I am not sure what the right hon. Lady is referring to there. When we approach the local government reorganisation, we do so only in circumstances where there is a good deal of local support. We have taken forward a small number of proposals this year, including in North Yorkshire. Those are then subject to a consultation exercise where we notify stakeholders and take great care to take note of the opinions of the local population. It then comes to a Minister under the Act for the ultimate decision. Were local government reorganisation or a devolution deal to be negotiated in the right hon. Lady’s part of the world—I know that there is some local interest—we would of course follow all those legal requirements.
We are all making the most of our parks at the moment, but we have also seen a surge in littering. Will the Minister join me in thanking groups including the Crewe Clean Team, the Shavington Clean Team, Nantwich Litter Action and the Great British Spring Clean’s million mile mission campaign for playing their part in battling this blight? Will he also remind councils of the need to use their powers? InYourArea has found that the number of fines issued in Cheshire East dropped last year for the third year in a row.
I am very happy to join my hon. Friend in thanking all the volunteers he mentions for their hard work. As lockdown lifts, we want the countryside to look its glorious best this spring and summer, and he is absolutely right to say that councils should be using the powers that are available to them. Littering not only blights local communities but is ultimately a criminal offence. We have raised the maximum penalty for littering to £150, and we have published guidance for local authorities on the use of their powers.
There has been a 400% increase in donations to the Conservative party from developers under the current Prime Minister. In the interests of transparency, and to allay growing concerns about sleaze at the heart of government, will the Secretary of State publish notes of all the meetings that he, his advisers or representatives of No. 10 have held with any of those developers about changing the planning system and what they asked for?
All ministerial engagements are already published through our regular official engagement notifications and all donations to political parties, whether that be the Labour party or the Conservative party, over the statutory amount are also published. Of course planning decisions and the production of Government policy have nothing to do with donations made to political parties and there is a complete separation of the two.
The Campaign to Protect Rural England, the National Trust, the Town and Country Planning Association, the Royal Institute of British Architects, the Royal Town Planning Institute and others have all condemned the Secretary of State’s planning reforms for handing too much control to developers and blocking communities from objecting to individual applications in areas zoned for growth or for renewal. Given their increased donations to the Conservative party, is he paying back developers by selling out communities?
Once again, the hon. Gentleman makes a low point. What we are doing is getting people on to the housing ladder. Once, the Labour party cared about young people, people on low incomes and people on social housing waiting lists, but those days are long gone. The Conservative party is the party of home ownership. This is the party standing up for the millions of people whose jobs depend on housing and construction. This is the party supporting the brickies and the electricians—the people out there trying to earn a good day’s living. The hon. Gentleman needs to get his priorities straight and support people who are working hard, trying to get on the housing ladder and trying to get this country going again after the pandemic.
Like many, I was glad to see our high streets begin to reopen last week, with retail restarting and outdoor seating enabled for hospitality venues such as those on Coniscliffe Road in Darlington, including the Hash bar, the ORB micropub and Number Twenty2. Does my right hon. Friend agree that, in order to support our high streets in the long term and build on the success of the towns fund, we need to reform planning restrictions to help revitalise our town centres?
My hon. Friend is absolutely right. The changes being seen on our high streets up and down the country are seismic. They require fundamental reforms to our planning system and that is exactly what this Government are doing. What a contrast that is with what the Labour party is doing. As far as I can tell, its only policy is to create a review led by somebody whom we asked to do a review 11 years ago. I have a great deal of respect for Mary Portas and I enjoy listening to her views, but we have already taken forward most of her recommendations. We are taking action. The Labour party is doing nothing and is letting the towns and cities across this country go into neglect.
Last month, the Secretary of State appointed two news members of his departmental board. Dame Alison Nimmo is a director at Berkeley Group—accused of endangering the health of thousands in my constituency with the Southall gasworks development. How can I, or my constituents, have confidence in his Department’s ability to regulate the Berkeley Group when, in the words of the Cabinet Office, one of its own advisers leads that Department?
I am disappointed to hear those remarks from the hon. Gentleman. Casting aspersions about the integrity of Dame Alison Nimmo is a new low for the Opposition. Alison is one of the most respected women in business today. She led The Crown Estate impeccably for many years, and now we are fortunate to benefit from her experience, commitment and public service. I think it is completely wrong that the hon. Gentleman—no doubt handed a question by the Labour Whips that he does not know anything of—
indicated dissent.
None the less, it is very poor that the hon. Gentleman would cast aspersions on a great public servant, whom I am proud to have working with me at the Department.
I do not think the Secretary of State needs to cast aspersions on where the hon. Gentleman got his question from; I think it relates to his own constituency.
  Councillor Anne Handley, other members of the town deal board and I have submitted what we feel is a very strong bid for Goole, which will include multimillion-pound regeneration of the town centre and a leisure centre, and bring gigabit-fast broadband to old Goole. We are keen to get on and get the projects delivered. Can the Secretary of State provide any details of when Goole will know exactly how much it is getting from the Government in response to our bid?
I was pleased to receive Goole’s town investment plan in January. It includes ambitious plans to diversify, to repurpose the town centre and to revitalise Goole’s economy. My officials are conducting their assessment in the usual way and I look forward to making an announcement in due course, which, if it is a positive one, will build on the excellent news we had at the Budget of a freeport in the Humber, bringing jobs and regeneration to the whole region.
Homelessness is a big factor in ex-prisoners, particularly women, reoffending. In January, the Ministry of Justice announced £20 million for five pilot schemes of temporary accommodation; over three months on, there is still no evidence of how the service will account for the complex and specific needs of vulnerable women leaving prison. How will the Department work with the Ministry of Justice to ensure that support services for women in impermanent accommodation on their release last more than 12 weeks?
The hon. Gentleman raises an extremely important point, as 53% of people sleeping rough on our streets are ex-offenders, so a crucial component of our strategy to end rough sleeping must be ensuring that more offenders, whether male or female, leave prisons to good-quality, secure accommodation, whether it is in the private rental sector or in social housing. I am working very closely with my right hon. and learned Friend the Lord Chancellor; we put in a bid together to the spending review, to which the hon. Gentleman refers. I will be able to update him on those plans in due course. The Ministry of Justice will be an integral part of our strategy.
  According to the Woodland Trust’s “State of the UK’s Woods and Trees” report, 1,225 ancient woods across the UK are under threat from development, and the number of ancient woods being damaged by development continues to increase. How will the MHCLG strengthen planning policy further to properly protect this irreplaceable habitat?
I was pleased to read of the Woodland Trust’s recent campaign. My Department received over 10,000 postcards from supporters of the trust, which I have had the pleasure of looking over in recent months. We have proposed changes to the national planning policy framework to set an expectation that all new residential streets will be lined with trees. This builds on previous changes to the framework whereby we strengthened protections for ancient woods and trees. My right hon. Friend the Environment Secretary will shortly publish further details of our wider cross-Government commitment.
The eviction ban instituted by my right hon. Friend last year and due to end in May has undoubtedly saved untold misery. Now, covid-related rent arrears, built over successive lockdowns, are a very real danger. Will my right hon. Friend outline how measures will evolve to support individuals, families and landlords to sustain viable tenancies as we move into recovery?
My hon. Friend is a doughty campaigner for her constituency. If I heard her question correctly, she asks about the support we provided for renters during the pandemic. We wanted to strike the right balance between helping tenants in need—that is why we increased the welfare provision, increased discretionary housing payments and increased the local housing allowance to 30% of local market costs—and ensuring that landlords have access to justice. As we transition out of the road map to recovery, we will be providing some further details on the next steps that we envisage to protect renters and ensure landlords get the best service and the help they need.
In March, the Secretary of State told the House that he would reach out to the devolved Government to help get more clarity on the organisation and delivery of the shared prosperity fund in Scotland. On this issue, when did he last meet with Scottish Ministers? What specific Scottish Government policy objectives will be met by the shared prosperity fund?
I met representatives of the Scottish Government two weeks ago.
I warmly welcome the recently announced package of support for those arriving from Hong Kong on British national overseas status. Will my right hon. Friend confirm that all corners of the United Kingdom will receive support to enable those who arrive to settle where they wish and contribute to our economy through, for example, setting up a business?
As champions of freedom and democracy, we are living up to our historical responsibilities to the people of Hong Kong. I have made it the mission of my Department to ensure that all BNO status holders and their families have the very best start as soon as they arrive here. That includes an additional £43 million package across all UK nations to provide targeted support for new arrivals, including English language tuition where necessary and help with housing costs for those who need it. We are creating 12 welcome hubs across the UK to give practical support for everything from applying for a school place and registering with a GP to setting up a business. This month, I met four Hong Kong families who have recently arrived in the UK, and their profound sense of optimism about the future reaffirmed my belief that this programme will enrich our country for generations to come.
I am sorry to the Members who did not get in, but unfortunately the questions seem to have taken a long time to answer. I am now suspending the House for a few minutes to enable the necessary arrangements for the next business.
With your permission, Mr Speaker, I will make a statement on coronavirus This virus is diminished, but not defeated. Cases, hospitalisations and deaths are back to the levels we saw in September. Throughout the crisis, we have protected the NHS, and there are now 2,186 people in hospital with covid across the UK—down 94% from the peak. The average number of daily deaths is 25—down 98%. Because of this brighter picture, we have been able to take step 2 on our road map, and it is brilliant to see the high streets bustling with life once again and to hear a real-life crowd back in Wembley this weekend—especially if one is a Leicester City supporter Now, with fewer covid patients in hospital, the NHS is already turning to focus on the work to tackle the covid backlog. Step by step, we are returning this country towards normal life, and we are on track to meet the road map set out by the Prime Minister. Last week, we hit our target to offer a vaccine to priority groups 1 to 9, and we are on track to offer a vaccine to all adults by the end of July. However, we must be vigilant, cautious and careful throughout, because we want this road to be a one-way street The vaccine uptake has been astonishingly high. For all over-50s, uptake is 94%. Enthusiasm among those in their late 40s was so high that they briefly overloaded the website when we opened up the booking system last week. We can see the result of that uptake in the real world. The latest data show that 98% of people aged between 70 and 84 now have covid-19 antibodies, which are crucial to the body’s ability to fight the disease—98%. That is the protection our vaccination programme is spreading across the whole United Kingdom. Uptake among all ethnic minority groups continues to increase. Public Health England estimates that the vaccination programme prevented over 10,000 deaths up to the end of March, and it will protect many more as the roll-out continues We know that the first dose gives significant protection, but the second dose is crucial to make people as safe as possible. On Friday and Saturday, we saw record numbers of second doses—over 499,000 on each day—and I am delighted to tell the House that, as of midnight last night, we have now given second doses to over 10 million people across the United Kingdom. Three quarters of over-75s have now had both jabs, rising to four fifths of over-80s. The vaccine is our way out of this pandemic, and I am delighted that it is being taken up in such huge numbers We will do everything in our power to drive uptake, especially when it comes to protecting the most vulnerable. The vaccination rate among care home staff is currently below 80% in over half of all local authority areas. Many care homes have called for vaccinations to be required for those who work in such settings. We have therefore launched a consultation into whether we should require care home providers that care for older adults to deploy only workers who have received their covid-19 vaccination, unless they have a medical exemption. We all know that older people living in care homes are at the greatest risk from this virus, and we have a duty of care to protect the most vulnerable, so we will consider all options to keep people safe As we deliver on stage 2 of the vaccination programme—to vaccinate all remaining adults in the UK—we must also turn our attention to what comes next. The biggest risk to our progress here in the UK is a new variant that the vaccine does not work as well against. We know from our response to other viruses, such as flu, that we need updated vaccines to tackle mutated viruses. I can tell the House that as we complete the programme for first and second jabs, we are ramping up plans for a booster shot to make sure that our vaccines stay ahead of the virus. We have already procured enough vaccine doses to begin the booster shots later this year. We will be working with our current vaccine suppliers and new suppliers such as the CureVac partnership to work out which vaccines will be effective as a booster shot and to design new vaccines specifically targeted at the variants of concern, such as the variant first found in South Africa Our goal is to ensure that the vaccine protects against this dreadful disease whatever it throws at us, to keep us safe and protect our much cherished return to a normal way of life. The booster shot is important because it will help protect against new variants, but until then we must remain vigilant in case a new variant renders the vaccines less protective. New variants can jeopardise the progress that we have made here in the UK Thanks to our early investment in covid genomic sequencing, we have in this country one of the best systems to spot and supress new variants wherever we find them through a combination of tough measures at the border, our genomic sequencing capability and a massive testing system. I would like to inform the House of another new development in our testing system. We have been piloting Pharmacy Collect, a system in which people can go and pick up tests for free from a pharmacy. I am delighted to tell the House that following the successful pilot, we have now rolled out Pharmacy Collect to over nine in 10 pharmacies, meaning that the universal testing offer, through which everyone can get tested up to twice a week, is now freely and easily accessible to anyone who wants it. You just have to go to your local pharmacy, Mr Speaker I would also like to update the House on our response to two new variants. One is the variant of concern first identified in South Africa. We have now detected a total of 557 cases of this variant since it was first identified in December. We have seen a cluster of cases in south London, predominantly in the London Boroughs of Wandsworth, Lambeth and Southwark, and identified single cases over the last week in Barnet, Birmingham and Sandwell. Around two thirds of these cases are related to international travel and have been picked up by the day two and day eight testing for international arrivals. However, we have seen a small amount of community transmission, too As soon as those cases were discovered, we acted quickly to put in place enhanced testing, tracing and sequencing in Lambeth and Wandsworth. We have brought in 19 mobile testing units in our largest surge-testing operation to date, and we are distributing test kits to housing estates, secondary schools, places of worship and workplaces. I would urge everyone who lives in these areas, whether they have symptoms or not, to get tested regularly and help us keep the variant under control Secondly, we have recently seen a new variant, first identified in India. We have now detected 103 cases of this variant, of which, again, the vast majority have links to international travel and have been picked up by our testing at the border. We have been analysing samples from those cases to see whether the variant has any concerning characteristics such as greater transmissibility or resistance to treatments and vaccines, meaning that it needs to be listed as a variant of concern After studying the data and on a precautionary basis, we have made the difficult but vital decision to add India to the red list. That means that anyone who is not a UK or Irish resident or a British citizen cannot enter the UK if they have been in India in the previous 10 days. UK and Irish residents and British citizens who have been in India in the 10 days before their arrival will need to complete hotel quarantine for 10 days from the time of arrival. These rules will come into force at 4 am on Friday. India is a country I know well and love. Between our two countries we have ties of friendship and family. I understand the impact of this decision, but I hope that the House will concur that we must act, because we must protect the progress that we have made in this country in tackling this awful disease Another way that we have kept the country safe is through maintaining a strong supply of personal protective equipment. At a time of massive global demand, we secured supply lines, created a stockpile to see us through the winter and created onshore manufacturing capacity here in the UK. I am pleased to inform the House that since February last year, we have distributed more than 10 billion items of PPE to protect people working in the NHS, social care and public services right across the country. Delivering so much PPE at such speed and scale has been an extraordinary effort that has not only helped us through the crisis, but provided a lasting legacy for the future Let me make two further points. I would like to inform the House that today we have appointed Professor Lucy Chappell as the chief scientific adviser to the Department of Health and Social Care. Professor Chappell has a stellar track record in science and research, including leading on the work on vaccinations in pregnancy. She has worked closely with our National Institute for Health Research, for which she will now be responsible. I am sure that the whole House will join me in congratulating Professor Chappell on her appointment Finally, last month we laid before the House our one-year status report on the Coronavirus Act 2020. I am sorry to say that the report contains an error relating to section 24 of the Act, which concerns Home Office measures on data held for national security purposes. Full details are set out in a written ministerial statement being laid today. The error does not change the substance of the report, as we will be laying the regulations to expire section 24 alongside other provisions as soon as parliamentary time allows In summary, we are moving down our road to recovery, vaccinations are rising and the pressure on our NHS is falling. As we enjoy the freedoms that are returning, let us take each step safely. We must hold our nerve and follow the rules while the vaccinators do their vital work. I commend this statement to the House.
I thank the Secretary of State for advance sight of his statement. Let me start by saying that I have no doubt that Downing Street was reluctant to cancel the Prime Minister’s trip to India. As a Member of Parliament for Leicester, I am immensely proud of our deep ties and bonds with India, but it was the correct thing to do in the circumstances, because we must always be vigilant and driven by the data, and variants are the biggest threat to our progress Tackling the variants demands that vaccination continues to be rolled out successfully; I again pay tribute to all involved. Uptake levels are improving, as the Secretary of State said, but they are still too low in some minority ethnic communities. Will he provide extra resources to the local communities that need them to drive up vaccination rates We will look carefully at the details for vaccinating social care staff, but the Secretary of State will know that every attempt throughout history to force mandatory vaccination has proved counterproductive. Why does he think this attempt will be any different Even with high levels of vaccination across the population, there will be significant groups who are unvaccinated—children, for example. The virus will be endemic, as the chief medical officer has recently confirmed. Papers from the Scientific Advisory Group for Emergencies model a third wave this summer. How do we avoid that? May I suggest to the Secretary of State that one way that we could do that would be to pay higher sick pay and expand its scope? Some of the poorest and the lowest paid will continue to suffer and be left exposed to the virus unless we fix that. We should not just glibly accept these health inequities; it could mean that urban areas are left behind, remaining under restrictions with higher infection rates. For the millionth time of asking, will he please fix sick pay Let me turn to India, which has the most cases in the world at the moment—more than 250,000 confirmed cases a day, I think, and going up. That is one of the world’s steepest surges, right now. Uploads of Indian sequencing to the global open access database show that the new double mutant B1617 variant has become dominant in India in the past few weeks, out-competing our home-grown Kent strain. As of today, COVID-19 Genomics UK reports 135 cases of B1617 in the UK and 115 in the last 28 days. It has been the fastest growing variant in the UK in the last three weeks. Most of those variants are imported, so we welcome the Secretary of State’s announcement about adding India to the red list, although I hope that there will be support and help in place for constituents such as mine who are legally in India and want to return We also now have cases in the community that are not linked to international travel. I understand that the Secretary of State is carrying out analysis of those samples, but surely we now need to start surge testing and designate B1617 as a variant of concern. How long will it take before we have more definitive evidence that it is more infectious or immune-escape? We already know that this variant carries mutations of concern in other variants. If we have learnt anything in the past 12 months, it is that this virus ruthlessly exploits ambiguity and that we must act fast when the situation is controllable, because in a few weeks’ time, it might not be The Secretary of State did not mention vaccine passports in his statement. Does he anticipate that vaccine passports will soon be needed for football games or concerts? As he said, Leicester City have made it to the FA cup final, and they are a team challenging for Europe on merit who always put fans first. Many who are anticipating going to a football match later this year will be wondering this: if they need a vaccine passport, will it be based on one dose or two? He may have seen data from Israel or the Centres for Disease Control and Prevention in the US which suggests that people are still infectious after one vaccine dose, so can he update us on that front Finally, I turn to the latest Sunday Times revelations about the lobbying by Greensill and Cameron of the Secretary of State and the very highest NHS officials about the payday financing scheme. This was not an act of altruism to staff in a pandemic but an investment plan to package up loans to sell to investors, with the former Prime Minister, not nurses, in line for a payday windfall. Cameron wrote in one of his emails: “As you can imagine, Matt Hancock” is “extremely positive about this innovative offer.” They sought a partnership with NHS Shared Business Services, which is jointly owned by the Department. They sought access to the personal and financial data of thousands of NHS staff. They wanted their electronic records for their own commercial gain. Their plan was to expand into the social care sector, where staff are on low pay or zero-hours contracts, and because the market is fragmented and made up of private providers, the supposed non-profit offer would presumably not apply There were meetings and communications with a parade of the most senior NHS officials, including former Health Minister Lord Prior and Baroness Harding. At least 30 trusts may have spent valuable time considering the adoption of this untested payday lending scheme, and it is all because the Secretary of State succumbed to the lobbying of his old boss Cameron. So again I ask him, will he publish all the text messages, all the emails and all the correspondence with David Cameron? Can he tell us how many NHS leaders and officials Cameron and Greensill lobbied and met? How many NHS trusts in total were approached about this expensive, unneeded scheme While we are on the issue of NHS Shared Business Services, can the Secretary of State also tell us why he never declared his own links to Topwood, the confidential document shredding firm which was still on Friday night, until it was curiously taken down, using the NHS logo on its website to promote itself? With so many accusations and allegations of sleaze and cronyism, these are basic questions that deserve clear answers. NHS staff deserve a pay rise and support, not these payday loan apps forced on the NHS by speculators trying to make money out of the pandemic. How can he possibly defend it?
Let me address the final point first. As I said to the House last week, my approach was and is that local NHS employers are best placed to decide whether to take up offers of pay flexibilities, and Ministers are not involved in decision taking in NHS Shared Business Services. When it comes to the other matter that the right hon. Gentleman raised in terms of my declarations—which are known to him and to everybody else only because I have followed the rules in letter and spirit and made that declaration—I agree with the Leader of the Opposition, rather than him, who said that he was not suggesting that any rules were broken I turn to the covid-related matters. I welcome the right hon. Gentleman’s support of the decision to put India on the red list, which is not one that we take lightly. He is right to ask about surge testing, to make sure that we limit the spread as much as possible of the variant first found in India, and I can confirm that we will be doing that I welcome the right hon. Gentleman’s support for vaccinations, which he has demonstrated at all turns. It is partly because of the unanimity across the House among all parties on the importance of vaccination that we have this absolutely spectacular level of uptake. He says that every attempt at mandatory vaccination is counterproductive. I gently point him to the fact that surgeons needs to have a vaccine against hepatitis B. Vaccination that is tied to work in fact has a longstanding precedent in this country The right hon. Gentleman asks many questions about certification, but he knows that a review of it is under way at the moment, being led by my right hon. Friend the Chancellor of the Duchy of Lancaster, who I am sure will have heard his representations and questions, and will be able to address them in the review Finally, the right hon. Gentleman says that we must avoid a third wave by sticking to the rules, and he is right. We should avoid a third wave if we can, and the way that we can do it is by sticking to the rules and getting the jab. That is why the vaccination programme is so important. It is why the road map is cautious and, we hope, irreversible. That is the plan, and with the 10 million second vaccines and the progress in the vaccination programme that we have seen in the last few days, weeks and months, I am very pleased to say that we are on track.
It is a pleasure to see you face to face, Mr Speaker, after some time The Health Secretary is absolutely right to put India on the red list and to explore mandatory vaccination of certain frontline workers, however difficult and sensitive that decision may be, but he will know that in the last week NHS waiting lists have risen to nearly 5 million people, which is nearly one in 12 of the population of England—the true cost of the pandemic. It is equally true that we have had capacity problems in the NHS for some time. That is partly why we have opened five new medical schools Does my right hon. Friend agree with the letter that he recently received from the three main health think-tanks, which says that Health Education England should be given a statutory duty to publish regular, transparent, independent, objective workforce projections, so that we can ensure that we really are training enough doctors and nurses? That approach is strongly supported by the Health and Social Care Committee and the Academy of Medical Royal Colleges. I hope that he will support it too.
We will certainly consider that. I have seen the letter. We have discussed the question. I would add that we have a record number of doctors in this country, in part thanks to the work that my right hon. Friend put in place when he was in my shoes. We have a record number of nurses—more than 300,000 for the first time in the history of the NHS. We do need, of course, to look to the future and ensure that we are preparing for it, as the letter suggests. We also need to ensure that we keep driving the project of delivering 50,000 more nurses in the NHS over this Parliament. I look forward to giving him a more substantive response, but I hear his encouragement to ensure that we take steps in that direction.
While the vaccine programmes across the UK are going well, vaccine-resistant variants remain a major threat. I welcome that the Prime Minister has now called off his visit to India due to its devastating surge in covid. Cases of the B1617 Indian variant in the UK are still very low, but they have been doubling every week, despite lockdown, suggesting that like the Kent variant it is much more infectious than the original virus. I therefore welcome India’s being added to the red list to reduce further importation Will the Secretary of State not now consider extending hotel quarantine to all arrivals, as travellers from red list countries can currently avoid it by coming via a third country? We have already seen increased numbers of the South African and Brazilian variants in European countries, from where travellers are not placed in hotel quarantine, and more infectious or vaccine-resistant variants could emerge in any country. We simply would not know about it until it was too late The pandemic is still accelerating, and as well as causing appalling suffering and death in other countries it clearly poses a threat to the people of the UK. Does the Secretary of State not recognise the need for a more co-operative, global response to covid if we are to bring the pandemic under control and allow a safer return to international travel and commerce?
I certainly agree with the hon. Lady on her final point, on international collaboration and working together, which, along with the Foreign Secretary and the Prime Minister, we are working incredibly hard on. We are using the UK’s presidency of the G7 and the enthusiasm of the new Administration in Washington to try to drive international collaboration, in particular collaboration among like-minded democracies in favour of an open and transparent, science-led response to pandemics. I hope that she will concur with that approach On the new variants of concern, it is important when looking at the numbers to distinguish between community spread and spread connected to travel. By taking the action that I have just announced to put India on the red list, we are restricting yet further the likelihood of incursion from India of somebody with a new variant. However, the majority of the cases that we have seen already in this country have been picked up by the testing that we have in place now for every single passenger entering this country. That is a sign of the system working, and it is now being strengthened.
I am delighted to say that I have had my second dose of the Oxford AstraZeneca vaccine and, so far, no ill effects. In Harrow, we have had surge testing because we have had a relatively small number of cases of the South African variant discovered. Literally thousands of people have been tested, but one of the most frustrating things is that these tests then have to be sent off and there appears to be an extremely long turnaround time before we get the results. What can the Secretary of State do to speed up getting the results of these tests? Otherwise, people will not be aware of whether they have the variant or whether they should take particular actions.
My hon. Friend is absolutely right to raise this important issue. I know that this is an important announcement for him and his constituents, representing as he does a significant number of constituents from the Indian diaspora. We have managed to reduce somewhat the turnaround time for the sequencing of positive tests, but we are also introducing a new type of test that can detect not just whether someone is positive but whether they have one of the known variants without having to go through a full sequence. That can give us a snapshot much, much faster—within a matter of hours—of whether a positive result has one of the known variants, before sending it off to sequencing so that we can see any new variant that we do not know about. We are introducing that technology. It is starting in the Lighthouse lab testing facility in Glasgow and we are rolling it out across the system. It is an important tool to make sure that we can get the turnaround time of spotting the variants down faster.
It is quite astonishing that the Secretary of State’s statement had absolutely nothing to say about the Government’s plans for vaccine ID cards—something that has apparently been trialled. Only last week, the Equality and Human Rights Commission told us that vaccine ID cards, and possibly even the mandatory vaccination scheme that he is trumpeting today, could be unlawful, yet this House has had no opportunity to express a view on them at all. When are the Government going to come clean and share their plans for vaccine ID cards with this House?
I refer the right hon. Gentleman to my previous answer, which is that the Chancellor of the Duchy of Lancaster is leading a review on this area that will report in due course.
I congratulate my right hon. Friend on the phenomenal roll-out of the vaccine programme, which has been astonishing. I, too, have had my second vaccine, which makes me feel much happier We have been told regularly that we are following the data, not the dates, but sadly it seems to be the other way round—that we are following the dates, not the data. We know that in Derbyshire, for instance, there are huge swathes of villages and towns with no covid whatsoever, and that is repeated over all sorts of areas of the country. Last week I managed to go out on several nights because I could—which was great, and the atmosphere was fantastic—but we need to start getting businesses back to normal. We need to get hospitality businesses operating, fully functioning, and using their indoor spaces. Some of the outdoor spaces I have been in are quite enclosed, so can we not go indoors as well now?
I am delighted that my hon. Friend, along with my hon. Friend the Member for Harrow East (Bob Blackman), is among the 10 million who have had their second jab; that is really good to see. The hope and cheer that the vaccine brings links to the second part of her question, about the speed of the road map. The reason for the timing set out in the road map is that we want to see the impact of one step before we take the next step. We are but one week on since we took step 2. That is a significant reopening, as we have no doubt all seen in our constituencies and around the country. We want to see the impact of that on the data before taking the next step, so we can have confidence that this is an irreversible path—a one-way street, as I put it. That is the reason for the way that we have set this out, and that is how we are planning to proceed.
Along with others, I welcome the roll-out of the vaccine, as that is very important, but few would deny that it is now time to look at waiting lists, and I shall put one on record. What steps have been taken to get routine operations such as hip replacements and tonsil operations back on the table to address the eye-wateringly long waiting lists? That is vastly concerning, especially when we hear, for instance, of children who were on waiting lists for tonsils and adenoids to be removed last year; due to dips in oxygen levels they were considered urgent at that time, but that now appears to be okay. That is very worrying.
The hon. Gentleman raises a very important point. The waiting list issue is very significant; it has built up because of covid, but we must tackle it and we are absolutely determined to do so. He, like me, will have seen the figures last week on the increase in the waiting list in England, but the waiting list has increased in all parts of the UK. We have put in extra funding, an extra £7 billion in total for next year in England and, through the Barnett consequentials, to the three devolved Administrations. That is there to make sure we can get through this backlog while also of course dealing with covid and the infection prevention and control needed to tackle covid. This is a vital task, the hon. Gentleman is right to raise it, and we are working very hard to address it.
My right hon. Friend is rightly proud of the stunning performance of the vaccination teams across the country, and of course I pay tribute to those who have been engaged in that in and around Ashford. I am sure he agrees that it is particularly important for care workers to be vaccinated, and not just care home workers but domiciliary care workers who go from house to house providing essential care. What is he doing to encourage take-up among care workers, to get as close to 100% as possible?
It is incredibly important that all care workers take up the jab if they possibly can, unless they have a vital medical reason not to, because the jab of course not only protects us, but protects people we are close to, and care workers are close to people who are vulnerable—that is in the nature of the job. That is why I think it is right to consider saying that people can be deployed in a care home only if they have had the jab, and we are looking into that. We have not said that for those who work in domiciliary care—caring for people in their own homes, rather than in a care home—because those in care homes are at the highest risk of all, but I would absolutely urge anybody who is a carer, whether they work in social care or are an unpaid carer, who has not already got the jab to please do get it, to protect not just them, but those to whom they have a duty of care.
As the UK rolls back lockdown restrictions, the global death toll has reached 3 million, and the World Health Organisation is warning that the world is approaching the highest rate of infection so far. With three new variants in three continents, all these variants now in the UK and the reduced efficacy of the different covid vaccinations against these variants, it is clear that the UK’s success in fully emerging from this pandemic is co-dependent on how well the rest of the world is doing. I asked the Health Secretary about global co-ordination of surveillance of new variants back in February, and the World Health Organisation is now consulting on this, so can he update the House on our response to this consultation?
This is an incredibly important subject. I agree with the substance of what the hon. Lady asked in the question, and she is quite right to raise this. We have put in place the new variant assessment platform, allowing any country around the world to use our enormous genomic sequencing capability if they want to sequence positive cases to discover what is happening in their countries, but our borders testing system, in which all positives are sequenced, also means that we in fact get a survey from around the world through those who have travelled to the UK, and we can relay that data back to individual countries so that they understand that better. Of course, it would be far better if something like the new variant assessment platform was run on a multilateral basis globally—for instance, by an organisation such as the WHO. We are engaged with the WHO on making sure that it is available, but my view was that we needed to get on and offer this to everybody and then build a network of labs around the world that can make such an offer so that sequencing can be available in every country, because it is currently far too patchy.
May I add my congratulations to the team that has managed to give two vaccinations to over 10 million people? That is fantastic news. Given the risk of variants, I welcome the difficult decision that the Secretary of State has made to add India to the red list. What research he has commissioned on those, such as my hon. Friends the Members for Mid Derbyshire (Mrs Latham) and for Harrow East (Bob Blackman), who have had two vaccinations, and what possibility there might be that people who have had two vaccinations are able to go about their daily lives with fewer restrictions than those who have not?
The latter question is really a question tied to the certification work. We have not hitherto, as my hon. Friend well knows, said that the rules for people who are vaccinated should be different from those for people who are non-vaccinated, but we know that some other countries are proposing to say that that will be case for international travel, so we do need to have a way of showing or proving it. However, we have not yet come to any conclusions about how we should do that and whether we should do that domestically. That is a matter for the Chancellor of the Duchy of Lancaster. On measuring how effective a second dose is, we have tests in the field right now to follow a sample of people who have had both tests, having them tested regularly—weekly, typically—to check whether they test positive, and therefore testing the effectiveness of both of the vaccines in the field. So far, we have published the results of that after one jab. Very early results are coming through after two jabs, and in the next couple of weeks we will have some really rich data on that, I should hope, because we have now seen a significant number of second jabs—10 million as of midnight last night.
The vaccination roll-out for the majority of the country has been nothing short of amazing, and I would like to thank the local NHS providers in Enfield and across the country for their herculean efforts. Sadly, for some parts of the country, including many parts of my constituency of Enfield North, a postcode lottery appears to be emerging, whereby vaccination rates are stubbornly low and falling behind the rest of the country. What is being done to combat this, and what additional support will the Department be providing to areas with consistently low vaccine rates?
We have a huge amount of work on to tackle exactly the phenomenon that the hon. Lady describes. I thank people in Enfield who have been working on the vaccination programme, because they have done incredibly well, but there is much more to do. We have to ensure that we make the vaccine more accessible—that it is easy to access—and that people have reassurances if they are hesitant. The Minister for Covid Vaccine Deployment, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), is leading on these efforts, including with innovative approaches that we are currently trialling, such as allowing multigenerational households to be vaccinated at once, to see how we can drive up uptake in those groups in which we have not seen such high uptake. As I said, overall uptake among over-50s is 94%, which is far higher than my best possible hopes just a couple of months ago, but if we can reduce that final 6%, for every percentage point that comes off it, the safer we all get.
I refer the House to my entry in the Register of Members’ Financial Interests. I thank my right hon. Friend for his statement and for the extraordinary roll-out, which is still continuing, and I thank all the health workers across Wimbledon and south-west London In his statement, my right hon. Friend was right to identify the risk of new variants and to mention genomic sequencing and boosters. Will he confirm that there will be availability of rapid testing, with tests that provide results quickly and identify new variants, and that the booster programme will be rolled out on a similar basis to the vaccine programme, which has been so successfully rolled out?
Yes, absolutely. The booster shot programme will be rolled out in a similar way to the first two jabs. There will of course be some differences, not least because of the interaction of an autumn covid vaccination programme with the autumn-winter flu vaccination programme. We still need the final clinical results on their interaction to see whether someone can have both at the same time, which would obviously be logistically easier. Those matters need to be resolved. The reason for the announcement today is that we want to be absolutely clear that a booster shot programme will happen this autumn—later this year—and we are determined to make it as efficacious as possible, because, ultimately, dealing with these new variants will require booster shots, especially for the most vulnerable.
Over the last week, several serious concerns have been raised with me about the managed quarantine hotel system, with harrowing stories of families with young children stranded in airports because they cannot contact the booking provider to arrange accommodation, and others in quarantine hotels left without food for days on end. Will the Health Secretary tell me just what he is doing to urgently resolve the frankly shambolic situation with the booking system, and what he is doing to end the inhumane treatment of quarantine hotel guests by ensuring that food is not only provided on time but meets the faith and dietary requirements of travellers, particularly those fasting during Ramadan?
I am afraid I do not agree with the prognosis. We are, of course, very careful to ensure that the vast majority of people who go through the managed quarantine service—hotel quarantine—have a good experience. Of course, they have to be in a hotel when often they would rather not be, so it is an unusual situation, but it has been put in place with great sensitivity and I am very grateful to all those who have worked so hard on it, not just in my Department but among the hotels, the airports and the carriers. However, the hon. Gentleman clearly has some significant individual concerns, and I would be very happy to ensure that the Minister for Public Health, my hon. Friend the Member for Bury St Edmunds (Jo Churchill), meets him to hear those individual concerns and to try to make sure that they are resolved—in particular the point about ensuring that food provision is appropriate for those fasting at Ramadan, which of course is very important.
Given that the seven-day rolling average of covid deaths is now 24.9, with just 10 yesterday, and that in normal times the daily cancer death toll averages over 450—a figure sadly likely to rise due to delayed treatment and the disruption of the pandemic—what are the Government doing to catch up with the cancer screening and operations backlog and get the health service back towards other medical conditions so that the death toll from non-covid cases does not become the worst legacy of this emergency?
My hon. Friend is quite right to ask about that; it is an incredibly important topic. I am pleased to say that, over the second peak this winter, the amount of cancer work—surgery and treatment—continued much closer to normal. He is quite right that, in the first peak, it was reduced significantly. We are very focused on the backlog that has been created by the pandemic, but I am pleased that the death toll from covid is coming down. In fact, the very latest data, published today, shows that the number of deaths recorded with covid after 28 days is four. Those numbers tend to be lower at the weekend, and we mourn each of them, but that nevertheless reinforces his point that it is vital that we get on with getting through the backlog that has been created by the pandemic.
I want to challenge the Secretary of State about the inexplicable delay in adding India to the red list of countries. I welcome the announcement that it will now be included on that list, and I hope very sincerely that this will not be another stable door moment in the Government’s response to the coronavirus pandemic. The Secretary of State knows that the SNP has committed to increase NHS funding in Scotland by 20%. Will he commit to a similar uplift for NHS England in order to help drive the recovery of the NHS after coronavirus and truly build back better?
I recently saw the figures for the proposed increase for NHS spending in Scotland. The proposed increase is lower than in England; it is lower than the money that has been passed over to the Scottish Government from UK taxpayers to spend on the NHS in Scotland. My question is: what has happened to the money for the NHS in Scotland that was given to the SNP Government in Holyrood? They have not spent it on the NHS. We know that they have many wasteful projects. Thankfully, we work very closely together on important things such as the vaccination effort, which has been a true UK success story, but this question of the missing millions for the NHS in Scotland is one that we need answers to from the Government in Holyrood.
I thank my right hon. Friend for the foresight and the early investment decisions made on vaccines 12 months ago. Here in Aberconwy, the result is falling infection rates and a tangible sense of hope, albeit one coloured with frustration as we watch businesses in England open ahead of us. We have the second-oldest demographic in Wales, and it is right that their environment is protected to ensure their wellbeing. That is properly a priority. However, can my right hon. Friend give the elderly and the vulnerable, and their loved ones, assurances that they will one day be able to leave their accommodation to visit family, resume employment and otherwise pick up their old routines?
Yes, of course. We want to get back to normal for care home residents—of course we do. We are taking steps in the right direction in England. I cannot comment on the situation in Wales; that is rightly a responsibility for the Cardiff Administration. As we progress down the road map, I hope we will be able to make further progress.
At today’s meeting of the all-party group on myalgic encephalomyelitis, we discussed the overlaps between ME and chronic fatigue syndrome and long covid. Obviously, there are some striking similarities. What assessment has the Secretary of State made of the impact that contracting covid can have on people with ME/CFS? Given their vulnerability, will he now do a bit of a U-turn and make them a priority for vaccination?
Of course, the prioritisation for vaccination when it comes to those who are vulnerable is clinically determined. I know that this question has been looked into. We are also looking into work on the links between ME and long covid, which share some similarities but are different conditions. It is an area that needs further work and further research—there is no doubt about that. If there is an update to the clinical advice on prioritisation and whether those with ME need to be in category 6 or category 4, I will update the hon. Lady. Thus far, however, we are following the clinical advice and that is the approach we have taken overall.
I was really pleased to hear my right hon. Friend reference the appointment of Professor Lucy Chappell and the work on vaccines in pregnancy. Will he please update the House on what is being done to reassure young women that there is no plausible way that vaccination can affect fertility? Will he also let us know how quickly he expects pregnant women, who we know might be immunosuppressed, to be called forward for their vaccination, or will they have to wait for the age band that is appropriate?
I was absolutely delighted that on Friday, following the work of Professor Chappell and others, we were able to make the announcement with respect to the vaccination for those who are pregnant. The prioritisation remains as with people who are not pregnant, so it will essentially be by age unless there is another reason that one might be in a higher group, for instance if you are a social care worker. It does not affect the prioritisation. Hitherto the advice had been understandably cautious, because clinical trials are not done on people who are pregnant. However, there is now very clear advice for those who are pregnant: when it is your turn, come forward and take advice. Have a discussion about your individual circumstances with your clinician. They can then, subject to that individual circumstance, which is of course appropriate in pregnancy, be vaccinated. I am grateful to my right hon. Friend for raising this issue. It was a really important announcement on Friday. Mr Speaker, I probably should have included it in my original statement, but unfortunately it was already rather long. I am absolutely delighted that Professor Chappell and the whole team—it was a big team effort—were able to ensure we made this progress.
[Inaudible.]
I think we might have to move on.
Scott Morrison, the Australian Prime Minister, has just announced that he has no plans to open up his borders. Of course, he is absolutely right. I am speaking—I apologise—completely with the benefit of hindsight, but I am sure everybody would agree that if we had done what Australia had done, we could have opened up our economy months ago. It has had only 910 deaths and only 29,000 infections. What I want to hear from the Secretary of State is that he will resist the very powerful lobbyists from the travel and airline industries and from airports, and that he will be absolutely determined to follow the evidence, not allow unnecessary travel—we do not know what variants are out there in the world—and be really tough with the red list.
That is the approach we have taken so far since the introduction of the red list and the hotel quarantine. Through the testing of every single passenger who comes here, we essentially now have a survey of the world. We can see where the new variants are from the people coming through the testing regime. I am grateful for my right hon. Friend’s wise counsel.
The Health Secretary is clearly right to put India on the red list and to safeguard the vaccine programme from new variants. However, the India variant has been under investigation for three weeks, and other neighbouring countries with lower and slower covid rates were put on the red list 10 days ago. This week, Hong Kong identified 47 covid cases on a single Delhi flight. Before Friday, we still had 16 direct flights from India and many more indirect ones. Can he explain, contrary to his previous answer, why India was not put on a red list 10 days ago, when other countries were? Can he publish the Joint Biosecurity Centre’s assessments, recommendations and criteria and also publish a full genomic analysis of which countries all the new variant cases are arriving from, so that we can see where the border gaps still are in the measures that he has in place and make sure that we do not keep having these delays?
We keep all these decisions for each country under constant review. The challenge of the genomic data is that some countries have excellent coverage of genomic sequencing and others do not. Actually, that is not particularly correlated with their income. For instance, South Africa, a middle-income country, has excellent genomic sequencing. We take the decisions very rapidly when we need to. We keep all this under constant review and I am glad that she welcomes the decision to put India on the red list today.
May I add my congratulations to all those who have been involved in the fantastic vaccine roll-out that the Secretary of State set out in his statement? It is obviously breaking the link between cases, hospitalisations and deaths, as we are seeing dramatically from the figures. Many members of the public and businesses, having looked at the road map, which he also mentioned, will have seen that as of 21 June, the Government and the public are expecting the country to be broadly back to normal, but, of course, there is the small print about the reviews on social distancing. Will he confirm to the House and the public that as of 21 June, he expects us to be broadly back to normal, without social distancing? If that is not the case, will he set out what the evidence base will be for that decision?
Any decisions like that would be based on the evidence, and we have far more evidence now than we did when making these decisions previously. I fully expect that there will be some areas of life, without the need for laws in this place, where people will behave more cautiously than previously. The wearing of masks is one—before this pandemic, wearing a mask in public in this country was extremely unusual. I imagine that some people will wear masks, and choose to wear masks, for some time to come. Our goal is to manage this virus and the pandemic that it has caused more like flu—in fact, like flu. Flu comes through each year. We do take action to deal with flu—we take action on nosocomial infection in hospitals and through the flu vaccine programme—but we do not stop normal life as we know it. That is the overall attitude and approach. My right hon. Friend mentions that four reviews were set out as part of the road map and they will, of course, have to conclude. But that is my hope because, as he knows, I very firmly believe that this vaccine is breaking that link. We can see it in the data every single day and in the way that the country is responding. It is uplifting.
I add my praise to the team rolling out vaccines in Salford, led by Salford Primary Care Together, which is doing a remarkable job. The current guidance on visits out from care homes says that any resident who makes a visit outside a care home must self-isolate for 14 days on their return, even if all they have done on their visit is to sit outside with a family member. This is longer than people have to quarantine when returning from red list countries, including India, which has the most cases in the world. This is clearly disproportionate, so will the Secretary of State set out what he is doing to enable regular testing to be used to cut this self-isolation requirement for care home residents?
The hon. Lady raises an important point on a subject that she knows extremely well. If I may, could I give her the respect of considering the question and writing to her with a full reply, because it is a very important question and I want to make sure that we get it right? Maybe we can then have a correspondence to make sure that we get to the right result.
The UK’s vaccination programme has been an international trailblazer, the strategic aim of preventing the NHS from being overwhelmed has clearly been met, and I am delighted that my right hon. Friend, who has done a tremendous job as Secretary of State throughout the pandemic, appears determined not to allow a shift in the goalposts and to follow the cautious pathway out of lockdown. But can we please, and can he please, ensure that we have a rational and balanced discussion about viral variants? Viruses always mutate and there will be an unavoidable level of risk that we will have to get used to post pandemic, unless we are to become a perpetually frightened, introspective nation—the opposite of global Britain?
My right hon. Friend has deep experience in this area, and I am very grateful for what he said—that was very kind. He is absolutely right about the fact that viruses always mutate, and we can rise to that—we can respond to that—as we do with flu. This is another area in which the parallel with how we manage flu as a country is the right one, because the flu virus mutates most years. We work out, observing the Australian winter, what is the most likely variant we will get in our winter, we adjust the vaccines to that variant and then we roll them out over the autumn. That sort of programme is likely to be needed in this country for some time to come. We will start later this year with the booster shots, and we will make progress after that according to the evidence as we see it. I hope he was not trying to make a point of something; I always try to be rational, but it is sometimes hard.
I hope I do not still sound like a robot, Madam Deputy Speaker. The gradual easing of restrictions in recent weeks has come as a great relief and is very welcome, but we know that the pandemic has caused a colossal backlog of unmet healthcare need, including dental care. Many people have been unable to access any treatment for dental problems, and check-ups have simply not been happening for more than a year now. Will the Secretary of State set out the steps he is taking to enable dentists to begin to clear that backlog of treatment? When there is already huge inequality in oral health and so many people are facing financial hardship, what is he doing to ensure that people do not miss out on vital preventive check-ups because they cannot afford them?
The hon. Lady is right to raise this issue. We have maintained access to urgent dental treatment throughout the pandemic. We put in place dental centres to be able to do that in the first peak and dentistry was not closed in the second peak—indeed, we have put in place an incentive to get dental practices really motoring. Of course there is infection prevention and control that needs to be updated as the prevalence of the disease comes down, but making sure that we have those check-ups is incredibly important, because it is one of the most important preventive measures there is, especially for children. Given her interest in and enthusiasm for this subject, I hope she will support the proposals for much more widespread fluoridation of water, which we are proposing to put into legislation when parliamentary time allows and which was part of the White Paper we published in February, because that is one of the biggest steps we can take to protect dental health.
The NHS has had its busiest and most crucial year ever, fighting the pandemic and delivering the vaccine roll-out, and all while continuing to provide routine care and treatment. We owe our NHS workers so much, yet this Government are proposing just a 1% pay increase, not even the 2.1% previously promised. Can the Secretary of State not see that after the year we have had, this is an insult to their heroic efforts? Will he commit to getting a pay rise for staff that truly reflects the value of their work?
The admiration in which I hold NHS staff holds no bounds. The question of pay is rightly one for the independent pay review body, and I look forward to its publication.
On Friday I visited the vaccination centre at the Harlow Leisurezone to see the extraordinary work it is doing. Will my right hon. Friend thank the remarkable NHS staff and volunteers at the Harlow Leisurezone and at Lister House for vaccinating 40,000 residents in Harlow with their first jab? Given what he has said previously about Public Health England and the move to Harlow, will he meet me and colleagues to discuss the move and the exciting proposals for Public Health England, to ensure that Harlow and the surrounding area of west Essex becomes the public health science capital of England?
May I add my praise for those at the vaccination centre at Harlow Leisurezone? They have been working incredibly hard and we are all very grateful. I would add Essex County Council to my right hon. Friend’s long list, which I fully endorse. The council has leaned into the vaccination effort right across Essex. I am always happy to meet him, and with the recent announcement on the UK Health Security Agency, I think now is a good time to have a discussion on this topic.
I have been contacted by several constituents who ordered very expensive tests from companies recommended on the Government’s website as part of the test to release scheme. Some never received their tests, some never received their results, and some received their tests late and feared being in breach of the rules. They have had to battle for refunds, and we have heard of others having to leave home to get their tests, which undermines the whole scheme. What vetting, if any, does the Department undertake before listing these companies, especially as demand will no doubt increase, given that the Government are so keen to open up international travel again?
The hon. Lady is quite right to raise this. We have kicked two suppliers off the list of approved suppliers for testing for international travel, and we are quite prepared to do more if suppliers do not meet the service obligations that they sign up to. If she wants to send in the individual evidence, we will absolutely look at it. We keep this constantly and vigilantly under review. The companies that provide tests must meet their obligations in terms of timeliness and of treating their customers fairly and reasonably. As I say, two of them did not continue to meet those specifications, so we took them off the list of available testing suppliers. We are quite prepared to do more if that is what it takes.
This session is supposed to finish in three minutes’ time, but we have 12 more questioners. I would like to be able to get everybody in, and a fair number are in the Chamber. I am sure that everyone will be co-operative in keeping their questions very short, and I ask the Secretary of State to be equally brief with his responses.
Following the important announcement last week, I know that many expectant mothers in Guildford and around the country will welcome the certainty that they can safely come forward for a vaccine when it is offered. Can my right hon. Friend confirm that he will continue to take every precaution to ensure that pregnant women have the support that they need to make an informed decision about what is right for them and their health?
Absolutely. This decision was taken on the basis of the best possible science and significant amounts of data from pregnant women who have already been vaccinated, so people can have the confidence to come forward and get the advice that they need for their specific circumstances and then get the protection of the jab.
The Scottish Government and the First Minister have commitment to a full public inquiry later this year into all aspects of the handling of the pandemic, including care homes. Will the Secretary of State confirm that he supports a full public inquiry into the UK Government’s handling of all aspects of the pandemic in England as well?
This is obviously a matter for powers greater than the Health Department. It is something that the Prime Minister has clearly set out his views on, and that is what I will stick by.
Along with the chair of the all-party parliamentary group on brain tumours, my hon. Friend the Member for St Ives (Derek Thomas), I have previously raised the issue of residents who travel abroad for medical treatment having to pay hundreds of pounds for covid tests to travel out and to return. This is affecting my constituent, David Hopkins, and others across the country. Will the Health Secretary work with the Secretary of State for Transport urgently to find a way to allow patients such as David to use free NHS tests for medical travel purposes?
My hon. Friend raises an important point, and I am happy to look into it. I am also pleased that the cost of the tests that are needed for travel is coming down, and an important piece of work is under way to see how we can get that down further. Nevertheless, my hon. Friend makes a strong case for her constituent.
Face coverings are likely to remain a feature to protect against covid-19, but people with hidden disabilities who cannot wear such coverings will face abuse. Despite raising the matter on previous occasions, including once with the Prime Minister, and having been promised an awareness campaign, nothing has happened. Will the Secretary of State tell me when that campaign will happen?
Yes, an awareness campaign is under way, and I am grateful for advance notice of this question. I will write to the hon. Gentleman with the full details. He may say to me, “Sorry, Matt; more needs to be done,” in which case I will look into it, but he makes an important point on which I essentially agree with him.
I congratulate my right hon. Friend on the big reductions, based on the vaccinations, in case and death numbers. Will he briefly update us on better air extraction, cleaning and other measures to control infection in hospitals to reassure the many patients who now need non-covid treatment?
My right hon. Friend has asked about this many times, and he is quite right to, because it is not just about cleaning. We have learned a lot during the pandemic about the importance of good ventilation, and that is now embedded in infection prevention and control. As cases in hospitals come down, hospitals across the country are separating, as much as is possible, those who might or do have covid from people who are coming to hospital having been tested and knowing that they do not have covid. That is incredibly important to reassure people that if they are asked to come to hospital by a clinician, it is the best place for them.
In response to my right hon. Friend the Member for Leicester South (Jonathan Ashworth), the Secretary of State said that it was up to local NHS trusts to decide whether to take up the Greensill payday loan app, but The Sunday Times yesterday published an email between David Cameron and Matthew Gould, the head of NHSX, on 23 April. It reads: “As you can imagine, Matt Hancock, David Prior [NHS England chairman], Simon Stevens [NHS chief executive], as well as the many trust CEOs, are extremely positive about this innovative offer.” Is that email correct? Was the Secretary of State “extremely positive” about the Greensill app? Does he not think there is something morally wrong with using poorly paid and struggling NHS staff to allow a private company to construct a financial bond to be traded on the international money markets?
As I said to the right hon. Member for Leicester South (Jonathan Ashworth), my approach was and is that local NHS employers are best placed to decide.
Rugby’s primary care network-led vaccination centre at Locke House has provided over 34,000 first and 11,000 second doses to JCVI groups 1 to 9 through a fantastic team of staff and volunteers. The GPs, however, have chosen not to take part in phase 2 of the programme, and the centre is expected to close in mid-July as a consequence. Our local doctors would prefer to vaccinate groups 10 to 12 in their own surgeries, although that option is not currently available to them. What can the Secretary of State do to facilitate that approach to the important task of vaccinating the under-50s?
I will look into that question, which has not been raised before. Generally, the use of a primary care network—a group of GP practices—to come together to offer one centre has worked really well. That is the first I have heard of that concern, so I will take it away and ensure that it is looked at properly.
The Prime Minister today cancelled his planned trip to India this week, and the Health Secretary has just announced that India has been placed on the Government’s travel red list amid a devastating surge in coronavirus cases, with well over 200,000 detected on a daily basis. A new double-mutation variant is reportedly more potent, and dozens of cases have been detected here in the UK, too. To assuage community concerns, will the Health Secretary clarify that our vaccines are effective against this new variant?
We simply do not know that. We are acting on a precautionary basis. I cannot give the hon. Gentleman that assurance, but we are looking into that question as fast as possible. The core of my concern about the variant first found in India is that the vaccines may be less effective in terms of transmission and of reducing hospitalisation and death. It is the same concern that we have with the variant first found in South Africa and is the core reason why we took the decision today.
May I add my thanks to the NHS in Amber Valley, which has been moving through the vaccines so fast that it had even done more than 70% of the 40 to 50 age group by last week? What is my right hon. Friend’s message, though, to those who are saying that, based on media reports, we have now reached the herd immunity level and therefore this problem has all gone away?
We do not think that that is true.
Stoke Mandeville Hospital in my constituency is home to the National Spinal Injuries Centre. Despite continuing to do excellent work throughout the pandemic, a particular challenge arose when it came to providing support to relatives of patients who need to learn together how to adapt when back at home. Can my right hon. Friend assure me that planning for a third wave of covid-19 will give full consideration to the needs of spinal injuries patients and their families?
Yes, of course, I will give that matter consideration. I also make the case that while, as we open up, there may be more transmission, I very much hope that that does not lead—in fact we know from the data that that is highly unlikely to lead—to the same impact in terms of hospitalisations and deaths, because we know that the vaccine is incredibly effective against the variants that are at large here in this country. That is another reason to be cautious against the incursion of new variants for which we cannot give that assurance.
Lateral flow testing is really important in our continued fight against the pandemic. I am really pleased that many of my constituents have been able to access asymptomatic testing since Friday of last week, but, for residents in Wales, these tests are not yet available to order online through the gov.uk portal. Will my right hon. Friend confirm whether that will be the case shortly?
We are working closely with the Welsh Government to ensure that the testing offer in Wales is as rich and as easily accessible as the testing offer in England. Testing has been a UK-wide programme, but, of course, the more we get it into local communities, the more it must be delivered through the NHS locally—for instance, through pharmacies, as announced today. That needs to be done by the Welsh Government. We are working closely together to try to make sure that people can get access to these tests as easily as saying “Jack rabbit”, wherever they live in the United Kingdom.
I thank the Secretary of State for his statement. We will now have a three-minute suspension for cleaning purposes.
With permission, Madam Deputy Speaker, I should like to make a statement. Football is in our national DNA. We invented it, we helped to export it around the world, and it has been at the heart of British life for over a century. Football clubs, of course, are not just businesses but define communities across the country, so along with almost every Member of the House, I suspect, I was appalled by the announcement made late last night that a handful of clubs are proposing to form their own breakaway European league These six clubs announced that decision without any consultation with football authorities or with Government. Worst of all, they did it without any dialogue whatsoever with their own fans. It was a tone-deaf proposal, but the owners of those clubs will not have been able to ignore the near universal roar of outrage from all parts of the football community over the past 24 hours This move goes against the very spirit of the game. This is a sport where a team such as Leicester City can ascend from league one to the premier league title in under a decade, earning the right to go toe to toe against European heavyweights in the champions league. Instead, a small handful of owners want to create a closed shop of elite clubs at the top of the game—a league based on wealth and brand recognition rather than merit. We will not stand by and watch football be cravenly stripped of the things that make millions across the country love it As a Conservative, I believe passionately in defending our nation’s institutions and our rich heritage. They are central to our identity and help to build a sense of solidarity between people of every generation and every background. Just as the Government would not hesitate to act when other treasured areas of our national life are under threat, nor will we hesitate to protect one of our greatest national institutions: football This is, of course, for football authorities to handle first, and today I have met with the Premier League, the Football Association and the president of UEFA, while the Sports Minister has had another series of meetings with the Football Supporters’ Association. The football authorities have robust rules in place to deal with this, and I know from my conversations with them today that they are rightly considering a wide range of sanctions and measures to stop this move in its tracks. My message to them was clear: they have our full backing. However, be in no doubt that if they cannot act, we will We will put everything on the table to prevent this from happening. We are examining every option, from governance reform to competition law and mechanisms that allow football to take place. Put simply, we will review everything that the Government do to support these clubs to play. I have discussed those options with the Prime Minister this morning, and we are working at pace across Government and with the football authorities. I reassure this House of a very robust response. We will do whatever it takes to protect our national game However, it is clearer than ever that we need a proper examination of the long-term future of football. To many fans in this country, the game is now almost unrecognisable from a few decades ago. Season after season, year after year, football fans demonstrate unwavering loyalty and passion by sticking by their clubs, but their loyalty is being abused by a small number of individuals who wield an incredible amount of power and influence. If the past year has taught us anything, it is that football is nothing without its fans. These owners should remember that they are only temporary custodians of their clubs, and they forget fans at their peril. That is why, over the past few months, I have been meeting with fans and representative organisations to develop our proposals for a fan-led review. I had always been clear that I did not want to launch this until football had returned to normal following the pandemic. Sadly, these clubs have made it clear that I have no choice. They have decided to put money before fans, so today I have been left with no choice but to formally trigger the launch of our fan-led review of football The review will be chaired by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) and will be a root-and-branch examination of football in this country. It will cover the financial sustainability of the men’s and women’s game, governance and regulation and the merits of an independent regulator. Crucially, in the light of this weekend’s proposal, it will also consider how fans can have an even greater say in the oversight of the game and the models that might best achieve that We are the people’s Government. We are unequivocally on the side of fans, and their voices have to be heard when it comes to the future of our national game. It starts with fans, and it ends with fans. In the meantime, we have thrown our full weight behind the football authorities and stand ready to do whatever is necessary to represent fans and protect their interests. I commend this statement to the House.
I thank the Secretary of State for advance sight of parts of his statement. This is a watershed moment for our national game, and this statement is welcomed, as is the chair of the review, but it is short on detail and on the urgency that this situation merits; fans will have noted that. The Secretary of State tweeted last night extolling the virtues of the football pyramid, but if anything exposed the Government’s lack of understanding of our broken football system, that tweet summed it up. Tory trickle-down economics does not work, and it especially does not work in football Football governance is broken, football finance is broken and football fans, whichever club we support, are ignored. The hedge fund owners and billionaires who treat football clubs like any of their other commodities have no care for the history of our football, for the role it plays in villages, towns and cities up and down our country, and especially for the fans who are the beating heart of it. They should understand their role as custodians, rather than cartel chiefs. The future of our national game and all our clubs depends on it Labour has repeatedly called for the reform of the governance and finances of football by the Government. Government intervention is needed to fix this broken system. That is why we pledged in all four of our manifestos going back to 2010 to take action, and it is why I and the shadow Sports Minister, my hon. Friend the Member for Wirral South (Alison McGovern), repeatedly urged the Government to get on with their promised fan-led review of football—a promise that they made in 2019. It is nearly a year since our letter to the Sports Minister offering support and help with 16 questions that the review should focus on. We know that Members across the House have supported reform for the past 11 years of Conservative-led Governments, so it is time for the Government to get off the subs bench and show some leadership on the pitch, because we need reform of football It is not as if there has been a blockage in Parliament preventing the Government from taking action to sort out the problems. Former Conservative Sports Minister, the hon. Member for Maidstone and The Weald (Mrs Grant), has said: “no one is speaking for the football world with the independence and authority needed to address the big issues.”—[Official Report, 26 January 2021; Vol. 688, c. 207.] She is right. The former Conservative Chair of the Digital, Culture, Media and Sport Committee, the hon. Member for Folkestone and Hythe (Damian Collins), has said: “We should have long ago reformed the governance of football” He is right as well. The current Conservative Chair of the Select Committee, the hon. Member for Solihull (Julian Knight), has said: “What’s needed is a fan-led review of football with real teeth and here we have more evidence to strengthen the case for it.” I welcome the review, but why the long delay? Why create the vacuum that has allowed these super-league proposals the space and ability to become a reality? Eleven years have been wasted when a small amount of Government time could have been found to bring primary legislation to the House to sort out the problems. Instead, it has been all punditry and no progress on the pitch, and in that time, clubs and fans have suffered disasters. Fans in Bury know only too well the importance of reforming the way in which football is governed, and supporters in Liverpool, Edinburgh, Manchester, my city of Cardiff, Portsmouth and most football towns and cities have seen the damage done to clubs when profit outstrips the role of supporters in our game We are in a global pandemic and the owners of the six clubs behind this proposal think that now is the time to ride roughshod over their fans and endanger the future of football, on the back of a year when fans have been at the heart of supporting communities up and down the country. What a contrast! These proposals have been carved out behind closed doors without consultation with fans or players, and they have at their heart a plan that is anti-football—a super league from which teams can never be relegated and in which they are always guaranteed a place because of their wealth. That represents a fundamental attack on the integrity of sporting competitions It is very rare that an issue unites football fans and organisations across the rivalries and divides, but this super league proposal has managed to do just that. From supporters trusts and groups, including the Football Supporters’ Association, to the Professional Footballers’ Association, the Football Association, UEFA, the Premier League, the League Managers Association and the European Clubs Association—I could go on—it has been universally rejected as the greedy, obscene and selfish proposal that it is Let us act urgently. It is already too late for some clubs and their supporters, so I ask the Secretary of State when the review will be launched, what the terms of reference will be, who will take part and when it will report. What exactly will the Government do to stop the European super league decimating our national game? They should explore every option, and I hope that they will, whether that is a super-tax on revenue or investigating whether the proposal breaches the clear rules that govern markets and competition in this country For football fans up and down the country, our message is clear: Labour stands ready to do whatever it takes to stop this plan, and I hope that the Government will make exactly the same commitment.
I thank the hon. Lady for her questions and I think hidden in there somewhere was a welcome for the approach the Government are taking and for the fan-led review The hon. Lady asks what we have been doing for the past year, and I will tell her a few of things we have been doing. We have been working to get football back behind closed doors, and we were one of the first leagues in Europe to achieve that. We acted to get a third of games free to view with Project Restart, including the first ever premier league games on the BBC. We acted to stop clubs going bust, with hundreds of millions of pounds through covid support schemes, and ensured that the big clubs looked after the smaller ones with the £250 million boost from the Premier League. We acted to keep football going through the pandemic, including through secure protocols to enable travel between the UK and elsewhere. Indeed, that was sometimes in the face of opposition from Labour, saying that we should stop the sport behind closed doors. Now, crucially, we are working to get fans back into stadiums. This weekend, Members will have seen that for the first time, which was very welcome, at the FA cup semi-finals. We are working and making good progress towards a further return of fans at stage 3 of the road map Alongside all that, we have continued to engage on the fan-led review. The Minister responsible for sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), and I have engaged extensively with, to list a few names, Anton Ferdinand, Jordan Henderson, Karen Carney, the FA, the Premier League, the English Football League, the PFA, the national league, the Football Supporters’ Association, Kick It Out, Women in Football, David Bernstein and Gary Neville. The hon. Lady referred to my hon. Friends the Members for Folkestone and Hythe (Damian Collins) and for Maidstone and The Weald (Mrs Grant), and I have discussed the matter with them and with the Chair of the Select Committee. All this work has been essential in ensuring that we get to the point where we can launch the review today As I said in my statement, I would much rather that we had waited until fans were fully back and the game had been stabilised, but because of the actions that took place over this weekend we have launched the review now. The hon. Lady will have seen from my statement that it will be led by my hon. Friend the Member for Chatham and Aylesford. I hope that my hon. Friend will command support from both sides of the House; she was an excellent sports Minister, is a fan and is passionately committed to the game. We will shortly publish the terms of reference for the review and will work at speed. As the hon. Lady will have seen from my statement—I am happy to repeat it from the Dispatch Box—we will do whatever it takes to protect our game and we will examine every single option. We are doing that right now.
Just when we thought the beautiful game could not get any uglier, along come the big six and show that they could not care less for the fans up and down the country. Will the Secretary of State please outline to the House what specific levers he can pull to ensure that football authorities come to the negotiating table rather than indulge in this unseemly civil war? Does this involve, for example, a windfall tax on these clubs? I welcome my right hon. Friend’s commitment to a fan-led review and pay testament to the work that he has done in order to ensure that football was one of the first sports to return last year. I also welcome the further meat on the bones. But will he tell the big six today that this review will have the power to recommend that their nascent super league could be given the red card and be legislated out of existence if they insist on pressing ahead?
It is worth bearing in mind that there are two parts to this. In the medium term, we are working on the fan-led review that has been launched, but that should not prevent us from us taking action now to stop this proposal going ahead. My hon. Friend highlighted some of the measures that we might consider taking. I assure him that we are looking at all those options and at competition law. In essence, we are looking at what the Government do to facilitate matches and those clubs, and asking whether we should continue to provide that support, because it does not strike me that the Government should be providing that support in the face of this proposal.
I thank the Secretary of State for advance sight of his statement. I think it is the first time that I have agreed with every single word of his statement—provided, of course, that he meant Scotland when he said, “We invented it.” It must be made clear to the clubs and owners involved that no quarter will be given and that there will be no concessions whatever in the current arrangements. It is well past time that a line was drawn in the sand. There is already a huge and unhealthy imbalance in the game, with the big clubs in the big leagues with the big TV deals holding huge sums. This insatiable thirst for more—this greed—must not stand Club football in countries beyond England, Spain and Italy faces being left even further behind. Clubs in Scotland—such as Rangers, Celtic, and league cup winners and Scotland’s second most successful club in the last decade, St Johnstone—are not involved, but this has not stopped the widespread condemnation. Scottish Professional Football League chief exec Neil Doncaster said: “These proposals, or any like them, would have an enormously damaging impact on the very fabric of our sport at all levels… We believe that any such ‘competition’ would dramatically undermine the global appeal of football and would be financially catastrophic for all but a very tiny minority. The proposals…assembled by a small, self-selected group of very wealthy clubs, appear to be a cynical and very worrying attempt to thwart the core principle of sporting merit which rightly underpins European football. They represent a clear and present danger to the sport we all love.” The public are exhausted by the sleaze and greed associated with the elites at the top of our society. How do this Tory Government plan to eradicate greed and corruption at the heart of politics and business, and, in doing so, to protect football for the fans? Or does the Secretary of State agree with the Prime Minister that greed is good? Some overseas owners are from countries with concerning human rights records and links to dubious regimes, and may use their ownership of popular teams to sportswash their image. What actions do the Government plan to counter this?
I am tempted to thank the hon. Gentleman for the first line of his question and then to stop there; from my perspective, it all went a bit downhill after that. He is absolutely right to say that we should—and the Government will—stand up to greed and stand up for the fans, and to identify that even though it is English teams that are proposed for this league, it will have a severely damaging effect on all clubs in all parts of our United Kingdom. The game is, of course, as central to Scottish, Welsh and Northern Irish identity as it is to English identity. It is a sport for the whole of our United Kingdom and it is right that we work together as a United Kingdom to stop this dreadful proposal.
I welcome the Secretary of State’s statement and the decision to launch the fan-led review but, as he said, this is a review for the medium term, and decisions about the super league will need to be taken in the coming weeks and months. If, judging by what he said today, it is clear that, under existing competition law and existing powers of the premier league and the FA, nothing can be done to stop these six clubs joining the super league, are the Government prepared to amend the law to give those bodies the powers they need, in particular to prevent clubs from joining competitions that have not been sanctioned by either the FA or UEFA?
I pay tribute to my hon. Friend for all the work he has done, which has helped to shape the fan-led review we have announced. On competition law, we are already engaging with BEIS on our response. As I said, we rule out nothing. I know from my conversations with the premier league and UEFA that they are already proposing to take some pretty draconian steps to stop this, but we stand ready to act. We will not allow anything to stop us in terms of timing; we will get on with it as soon as we need to.
This is a devastating attack on the English game, as a shameless, arrogant and desperate elite seek to make millions at the expense of the millions of us who love the game and love our clubs. The statement contained some rhetoric that I found good and urgent, and detail that was ponderous and thin, so as well as a lengthy review, will the Secretary of State fast-track legislation that will force any club seeking to break away and join a new league to first ballot its fans and be mandated to abide by the outcome of the ballot; and will he make sure that the legislation is retrospective and active from the beginning of the current football season? Those who wish to steal and destroy the English game must be stopped. English football must be saved. This Parliament has the power to do it, not just to review it.
I assure the hon. Gentleman that we will be doing three things. First, we are backing the actions by the football governing authorities. Secondly, at the same time, we are looking at all options—he raised some important further options—and we will proceed at the fastest pace required to deliver a result. Thirdly, these events give rise to major questions, which have become ever more apparent to me. We had the promise in our manifesto. My dealings with football over the past years, as we have sought to negotiate the support that the game requires, have demonstrated again the need for governance reform and the need to look at finance and whether an independent regulator is required. All these things will now be examined by my hon. Friend the Member for Chatham and Aylesford.
I congratulate the Secretary of State on his statement and on the announcement of the fan-led review. Does he agree that the pyramid structure of the English football league gives focus to football clubs right across the country to compete and progress to the highest level based on performance and competition? Does he recognise that it also provides the opportunity for community links and rivalry across the country, even between Wales and England, when clubs such as Swansea, Cardiff, Newport and Wrexham choose to compete in and are welcomed into the English football structure? Will the review he has announced also consider the interests of those clubs that are not in England but compete in the English football league?
As almost always, I agree with every word that my right hon. Friend has said. I am happy to give him precisely that assurance. He is absolutely right to highlight the two biggest problems with this super league: it removes a large element of the competition and the joy of the game, and it risks taking money away from grassroots football, which is central to the game.
I thank the Secretary of State for his clear statement. It was not that long ago that I watched my club, Manchester City, which I now represent, beat Gillingham in the second division playoff final. We are now in what might be called our glory days, but those of us who remember the Gillingham game know that the glory days do not always last. Does the Secretary of State agree that a closed-shop league, where there are no bad days and no glory days, is no league at all and has no place in our national game? British football fans are rightly outraged by that notion, which goes against our deeply held culture of fair and open competition and backing the underdog. It is an American export that we just do not want.
I completely agree with the hon. Lady. We cannot have money and brand triumphing and trumping the colour and joy of the game. Football would be massively damaged by this move.
I have been a supporter of Manchester United for 42 years and held a season ticket at the club for more than a decade, so I am aghast that the owners of my club have signed up to this proposal. It is wholly unnecessary and will be deeply damaging, on the altar of pure greed. It betrays the management, players, fans, history and tradition of not just my club but the wider game as a whole. So I congratulate my right hon. Friend on his statement today and the tone of the statement he made yesterday. Will he reassure us that the Government will move at speed to do everything within their legal power to prevent this ghastly plan from seeing light?
I thank my hon. Friend for his question. His reaction, as a loyal fan of that club, has been replicated: I have heard messages from many loyal fans of all six of those clubs, who share the same sense of deep frustration. I assure him not only that we will act at speed but that we have acted at speed. All of Sunday, I had meetings on actions and today we are moving at pace. I am engaging closely with No. 10 Downing Street and the Prime Minister to make sure we do whatever is required.
In the light of the shocking news that six of our national football clubs—it is heartbreaking to see Liverpool football club among them—are looking to break away from the football pyramid in England at a time when, collectively, we should be working together to rebuild our football communities from the ravages of covid, the anger across the country is palpable. I welcome the long overdue fan-led review, but can the Secretary of State outline how the Government will act to stop capitalism and corporate greed destroying a game that millions in this country love, and economically many communities rely on?
The hon. Gentleman is absolutely right to highlight that. It seems extraordinary, at a time when most stadiums remain completely empty and clubs are under tremendous financial pressure, that, rather than focusing on the rebuilding of the game and getting fans back into stadiums, these six clubs are distracted by something that is not in the interests of the game. It is right that we look at competition law. We need to look at the range of things that Government do to help games happen, to help clubs participate in the league, and say, “Why should we be doing this anymore for those six clubs?” That is precisely the work that we are undertaking.
Newcastle United fans have long suffered from the greed and self-interest that drive premiership owners, but this attempt to turn our national game into the cash cow of a narrow elite shows just how morally bankrupt the premiership has become and how little Government care. There seem to be more rules to prevent the removal of a window frame in a listed building than the wholesale destruction of this jewel of working-class culture. Can the Secretary of State believe that the owners of these six clubs meet the fit and proper person test?
The hon. Lady will have seen from my statement—I am happy to repeat it—that I completely agree with her. This is absolutely central to our heritage. These clubs are as much a part of our heritage as the great castles, stately homes, cathedrals and orchestras of England and the rest of the United Kingdom. We stand ready to do whatever it takes to support this. On the fit and proper person test, that is precisely why we have set up the fan-led group and it will be one of the things my hon. Friend will be looking at as we go forward. In the short term, we need to stop this in its tracks. We do that by working with the leagues—I gave the president of UEFA my 100% support for the measures that he outlined today, and similarly we will see measures coming forward from the Premier League—and then, if that does not work, the Government themselves stand ready to take steps to prevent this from happening.
Down here on the Sussex south coast, we are very proud of Brighton and Hove Albion. Ten years ago, it was playing at the local athletics stadium; tomorrow it plays in our world-leading premier league against Chelsea, one of the six clubs that are doing their best to destroy it. These six clubs are not currently or historically the most successful six clubs, yet, acting as a cartel, they use their clout to undermine competition. If the six clubs refuse to back down in totality, will the Secretary of State look to introduce legislation to immediately break up their ownership structures and bring in the German model, where 51% of the club is owned by the fans and custodians of their club?
My hon. Friend is absolutely right to highlight the central risk, which is that this creates a closed shop—it freezes in perpetuity what is only a snapshot of the game at this moment and makes the game so much poorer for it. We have examined the German model very closely. It is interesting to note that German teams are not participating in this. That rather makes the case for the fan-led review looking at the German model and I can assure him that it will do so. In terms of other measures we may take, we have not ruled out legislative measures, if those are required, but the first line of action needs to be with the football leagues themselves.
People like my own father, who was one of those who supported Manchester United in the ’20s and the ’30s, would not have recognised the stranglehold that the corporate greedy have got around the windpipe of football already. The words that the Secretary of State has spoken today are very helpful, but the corporate greedy have corporate lawyers, and he needs to guarantee that they will not tie the Government —and, in the end, football and its supporters—in knots, so we need to see action from him quickly if legislation is needed. Is he talking to his opposite numbers in Spain and in Italy, because it is important that we have not just a global response but a European response to what is not simply an English or a British problem?
I can assure the hon. Gentleman that those meetings will be happening this week; we are in the process of setting them up. I have already discussed with Her Majesty’s ambassador to Paris having a meeting with my French opposite number later this week, and I will be seeking meetings with my Spanish and Italian opposite numbers as well.
In forming these proposals, the six premier league clubs involved have shown no regard for the impact on clubs such as Burnley in my constituency, but also no regard for the fans who offer their unwavering loyalty season after season. I therefore welcome the Secretary of State’s announcement of a fan-led review that will put supporters front and centre. Will he confirm that the Government will do everything possible to protect top-flight football in this country, which provides so many economic benefits to communities, including in Burnley and Padiham?
I am happy to give my hon. Friend that assurance. I often say, as Secretary of State for Digital, Culture, Media and Sport, that the two things that people around the world know about the United Kingdom and instantly mention, whether I am speaking to an opposite number in east Asia, in North America or in Europe, are the royal family and the premier league. It is a jewel in the crown of the United Kingdom and we will do what is required to defend it.
As a football fan and a usually proud Liverpool supporter, I am now ashamed of my club and heartbroken at this outrageous European super league proposal, which is just another example of the fundamental structural flaws at the heart of our beautiful game. It is clear from contributions here today that our country’s proud and rich history and love of the game cut across the political divide, and I am gutted that we find ourselves coming together to push the Secretary of State, once again, for some urgent answers. It is also concerning to note that we have heard nothing from the Government on the potential impact of these proposals on the women’s game. The strength of feeling across the House and across the country could not be clearer. Time and again, this Government have failed football fans. Will the Secretary of State do whatever it takes to stop the European super league from going ahead?
The short answer is yes. The hon. Lady is absolutely right to highlight the impact on the women’s game, which I mentioned in my statement. That is part of how the pyramid works, as she will well know. The finances that have helped the women’s game to go from strength to strength in recent years—it is wonderful to see the strength of the game—come from the pyramid supporting it. If that failed to happen, that would be another big cost of this proposal.
This is an outrageous proposal, so I strongly welcome the robust set of measures that my right hon. Friend has announced today. On the point of competition law, these clubs will have very powerful legal teams, and they have huge financial resources. Whatever the current legal advice, does he accept in principle that, where a league operates on the basis of not having relegation and is basically based on the wealth that the clubs have, it must be a cartel?
My hon. Friend raises a very important point. That is a very valid interpretation of the effect of this proposal. Clearly, I will be working with BEIS and competition lawyers to get greater clarity and definition on that, but I can tell him that I have already discussed it with the Premier League and the FA. We are well aware that competition is going to come into play in this scenario, and we stand ready to work with them and take measures that may be required.
My hon. Friend the Member for Pontypridd (Alex Davies-Jones), who is my constituency neighbour, can always come next door and support Cardiff City if she wants a real club This super league proposal is the sporting equivalent of a billionaires’ gated community, with a football favela for everyone else on the other side of the fence. Could the very robust response that the Secretary of State says he wants from the Government include the Prime Minister ringing up, or perhaps even texting, the former No. 10 spin doctor Katie Perrior, who also worked on his mayoral campaign and whose public affairs agency is promoting the super league launch? Will the Prime Minister tell her that this is one occasion when insider connections will not win any traction with the Government, and that this betrayal of football fans and the ethos of fair competition in sport will be blocked by the UK Government using urgent legislation in the forthcoming Queen’s Speech?
I am very happy to give the hon. Gentleman an assurance that we will take the robust action that is necessary. In fact, I think the best place to start—it is where I started—is speaking to the president of UEFA and the leadership of the Premier League and the FA. I hope that their actions can stop the proposal in its tracks, and I think we will see some very robust action from them. I have been clear, and I am happy to be clear again, that if that does not work, the Government stand ready to act. We will not wait for it not to work; we are working through the options for measures now and stand ready to take them at the appropriate juncture.
I very much support what my right hon. Friend has said. Does he agree that the survival of clubs such as Stoke City in my constituency is the No. 1 priority for fans, and that Labour’s cynical move to try to stop football carrying on behind closed doors twice over recent months would have been catastrophic for clubs and therefore fans? Will he confirm that sport continuing throughout the pandemic has been, and always will be, a priority for this Government?
My hon. Friend is absolutely right. We have worked tirelessly to ensure that the game has continued behind closed doors, and I am happy to give the assurance that I will work tirelessly until we reach the end of the road map and we have every single seat taken in stadiums so that we can get football back on its feet. It is only at that point that we should be considering those wider questions of the governance of the game. It is a source of deep sadness to me that we are having this distraction rather than getting on with getting the game back.
The Northern Ireland women’s football team, with amateur players, qualified for the Euros for the first time ever. That demonstrates what football is about. Many people regard the announcement today as a tactical move against UEFA. Whatever it is, will the Secretary of State back up his rhetoric today, which I welcome, with action, along with the football authorities, to ensure that the views of billions of fans worldwide prevail over the views and tactics of the billionaire financiers?
May I begin by sharing in the hon. Gentleman’s congratulations to the Northern Ireland women’s football team? That was a fantastic result and I was very cheered to see it The hon. Gentleman is absolutely right that this is not confined to the UK. The premier league and English football are loved globally, and we can see the reactions in France, Spain and Italy: it is not just here in the United Kingdom that we feel dismayed at the proposals that have been put forward—that feeling is near-universal.
Does my right hon. Friend agree that this proposal is motivated by greed and shows contempt for fans and the footballing pyramid? Does he also find it sad that while the boards at Manchester United and Manchester City were negotiating this proposal to make millions of pounds for their owners, they and others did nothing to save their local neighbour Bury FC, whose fans were also betrayed by an owner who had attempted to profit from its heritage and history?
I am sympathetic to the concerns raised by my hon. Friend, and I would also note that many clubs, including some that are seeking to break away with the announcement last night, have benefited enormously from Government and taxpayer support, and they should think carefully about the duty they owe to taxpayers in return and whether they are discharging it with these proposals.
I thank the Secretary of State for his statement and the announcement of a review. Do the Government agree that tougher rules are now needed on who can buy major sports clubs in the United Kingdom? May I add my voice to those of other colleagues in the House asking for the Government to look at the German model, because it is vitally important that we have a model of pre-agreed conditions requiring a minimum percentage of each club to be owned by everyday supporters and fans?
The hon. Gentleman is right to highlight the German model; it has merits and it is right that the fan-led review should look at it. I should also note, however, on the flip side of this that foreign investment in the Premier League and the English Football League has brought tremendous benefits to the game: it has meant that we have had very strong games played up and down the country every night of the week with some of the finest players in the world. I am not against foreign investment in our game per se, but that cannot be against the wider interests of the competition and ensuring that we have a rich and diverse game, and these proposals are, at their heart, putting that at risk.
Football fans in Ashfield think that common sense in football is in short supply these days: inside grounds we have billionaire bosses plotting to sell our beautiful game to the highest bidder, and meanwhile, outside Wembley stadium, we have the brother of the ex-Labour leader talking nonsense about vaccinations while fellow protestors shout abuse at genuine football fans. I have a simple solution: keep these greedy football club owners as far away from our football grounds as possible, and the same goes for Piers Corbyn. Please will my right hon. Friend tell the football fans in Ashfield what the Government’s plans are to protect our beautiful game inside and outside the stadiums?
I do not think I can add a great deal to my hon. Friend’s remarks. I was somewhat bemused when observing the protest outside the game yesterday, and I can also assure my hon. Friend and all his constituents that the Government will not hesitate in taking robust action to ensure this does not happen.
My 50-plus years of watching Man City has brought me a lot of emotions—pain, despair, misery and, more recently, a lot of elation and joy—but always pride, whatever tier we were in, until last night, when the overriding emotion was shame and anger at my club being part of this. In, in effect, ending competition by merit at the top of the pyramid, this ends hope for clubs throughout the pyramid, and it is absolute anathema to the values of a lot of sport in this country. So I welcome the tone of the Secretary of State’s statement, and I want to ask him three things. When he speaks to the clubs, will he try to convey the anger in this Parliament and across the country at this proposal? When he speaks to the Premier League, will he encourage it to take the strongest possible action against these clubs, including my beloved Man City? Finally, a review will take time, but does he recognise that there is a will in this Parliament to take strong action quickly, if necessary?
I think the hon. Gentleman spoke very eloquently. Indeed, what he has said is shared by, sadly, so many supporters of those six clubs. I will of course be conveying that anger, and I am sure that that will be reflected in the coverage of this statement. I have already met the Premier League, and I have said that we will support it in taking the strongest possible action. I can also give the hon. Gentleman the assurance that if the actions by the Premier League and UEFA are not sufficient to stop this in its tracks, I have noted the level of support in the House for taking further measures, and it gives me confidence that we will be able to get any measures through should those be necessary.
Being a top premiership club is not a franchise; it is to be part of the contestable apex of the whole sport. In turn, that whole sport is part of our culture, part of our heritage and part of who we are. So I strongly welcome my right hon. Friend’s robustness in his statement and in bringing forward the fan-led review. Can he assure me that both his immediate response and the fan-led review will be far-ranging, with nothing off the table?
Yes, I am very happy to give my right hon. Friend that assurance: nothing will be off the table. He is absolutely right when he talks about the heritage of these clubs. The owners are but temporary custodians of something that is precious to our national identity, and they really should take that responsibility seriously.
Interestingly, only one of these six clubs has always been in the top division in English football, and now they want permanent status. The Secretary of State’s announcement of a review is welcome, if slightly overdue, but, frankly, has been met by contemptuously indifference by these arrogant oligarchs. The only thing they understand is power, and the Government should be using the power of the state with full force and co-ordinating with other countries. Will he rapidly refer them to the competition authorities, cut them off from any further public funds and look at the tax status of image rights—just for a start—and, quite frankly, drive these sharks out of British football?
Somewhat unusually—although not that unusually, to be fair to the right hon. Gentleman—I agree with pretty much everything he said, and I can assure him that we will be looking at all of those options. To reassure the House, we will take robust action when it is required. We will not wait for the outcome of the fan- led review, and all the things he is talking about are the sort of things we are discussing internally in Government.
Football’s governing bodies must stand firm against this European super league, and I welcome the statement from the Secretary of State that he is not going to leave any stone unturned in assisting with that. We now control our own borders, having left the European Union, so this will be a major test for our new powers over our borders, whereby we can prevent people from entering the country if they are not playing matches sanctioned by the sport’s governing bodies. On the fans’ review, will the fans be able to lead it wherever they wish to go—for instance, on the right to buy shares at a time of transfer of ownership or on fans being elected to the boards of football clubs? Will the fans really be able to lead and to go where they want to go with this review?
The hon. Gentleman is right to highlight the point about controlling our borders. I can assure him that we will be considering those powers if it is necessary, and those discussions are happening. The review will be able to go wherever it needs to go. My hon. Friend the Sports Minister and I have already engaged a lot with fans, and indeed it is worth noting that, at the Budget recently, the Chancellor announced proposals to allow fans to take stakes in and take control of their own clubs, so we are already moving in that direction.
I thank the Secretary of State for his statement. I suspend the House for three minutes for cleaning purposes.
Before I ask the Clerk to read the title of the Bill, I should explain that in these exceptional circumstances although the Chair of the Committee would normally sit in the Clerk’s Chair during Committee stage, in order to comply with social distancing requirements I will remain in the Speaker’s Chair, even though I will be carrying out the role not of Deputy Speaker but of Chairman of the Committee. We should be addressed as Chairs of the Committee, rather than as Deputy Speakers.
With this, it will be convenient to discuss the following: Clauses 2 to 4 stand part Amendment 2, in clause 5, page 2, line 16, leave out “2022-23” This amendment would mean that the freezing of tax thresholds at 2021-22 levels did not apply until 2023-24. Amendment 3, page 2, line 18, leave out “2022-23” See the explanatory statement for Amendment 2. Amendment 4, page 2, line 25, leave out “2022-23” See the explanatory statement for Amendment 2. Clause 5 stand part Clauses 24 and 25 stand part Amendment 93, in clause 26, page 19, line 3, at end insert— “, or for the presence of antibodies to SARS-CoV-2” This amendment would extend the income tax exemption for payments to employees in respect of the cost of obtaining antigen coronavirus tests to cover antibody coronavirus tests too. Clause 26 stand part Clause 28 stand part Amendment 92, in clause 31, page 20, line 13, at end insert— “, where the person who received the payment is not a qualifying person by virtue of Paragraph 5 of the direction given by the Treasury under section 76 of the Coronavirus Act 2020” This amendment would ensure that the one-off £500 payment to certain working households in receipt of tax credits could only be recovered where it is found that the individual was not entitled to the payment because they were knowingly concerned in underlying fraud either in relation to their tax credit award or the one-off payment. Amendment 15, page 20, line 13, at end insert— “(4) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons an equalities impact assessment of the provisions of this section, which must cover the impact of the provisions on— (a) households at different levels of income, (b) people with protected characteristics (within the meaning of the Equality Act 2010), (c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, (d) equality in different parts of the United Kingdom and different regions of England, and (e) child poverty.” Clauses 31 to 33 stand part Clause 40 stand part Clause 86 stand part New clause 7—Assessment of revenue effects of supplementary income tax rate— “(none) The Chancellor of the Exchequer must, no later than 31 October 2021, lay before the House of Commons an assessment of the effects on tax revenues of introducing a supplementary rate of income tax, charged at a rate of 55%, above a threshold of £200,000.” This new clause would require the Government to publish an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000. New clause 8—Equalities impact assessment and distributional analysis of tax thresholds— “The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons an equalities impact assessment of existing income tax thresholds and a distributional analysis of— (a) the effect of reducing the income tax threshold for the additional rate to £80,000, and (b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000.” New clause 10—Review of changes to coronavirus support payments etc— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to coronavirus support payments etc by sections 31, 32 and 33 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) business investment, (b) employment, (c) productivity, (d) GDP growth, and (e) poverty (3) A review under this section must consider the following scenarios— (a) the coronavirus job retention scheme and the self-employment income support scheme are continued until 30th September 2021, and (b) the coronavirus job retention scheme and self- employment income support scheme are continued until 31st December 2021 (4) In this section— “parts of the United Kingdom” means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause would require a report comparing the effect of (a) the coronavirus job retention scheme and the self-employment income support scheme being continued until 30 September 2021, and (b) the coronavirus job retention scheme and self-employment income support scheme being continued until 31 December 2021 on various economic indicators New clause 11—Review of changes relating to cycles and cyclist’s safety equipment— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by section 25 and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) business investment, (b) employment, (c) productivity, (d) GDP growth, (e) poverty, and (f) carbon emissions (3) A review under this section must consider the following scenarios— (a) the cost of a cycle is made an allowable expense on self-assessment tax return forms, and (b) the cost of a cycle is not an allowable expense on self-assessment tax return forms (4) In this section— “parts of the United Kingdom” means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause would require a report comparing the impact of the impact of (a) making the cost of a cycle an allowable expense on self-assessment tax return forms and (b) not doing so on various economic indicators. New clause 12—Review of impact of section 40 on equalities— “(1) The Chancellor of the Exchequer must conduct an equality impact assessment of section 40 and lay this before the House of Commons within six months of Royal Assent (2) This assessment must consider the expected impact of section 40 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 Clause 40 on equalities. New clause 22—Review of impact of section 40— “(1) The Chancellor of the Exchequer must review the impact of section 40 and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) the regional distribution of capital gains in the UK, and (b) projected receipts (3) A review under this section must consider the following scenarios— (a) capital gains tax rates are changed so as to be equal to those of income tax, and (b) capital gains tax rates remain at the level in this Act.” This new clause seeks a report on the impact of equalising capital gains tax and income tax on (a)the regional distribution of capital gains in the UK, and (b) projected receipts. New clause 23—Equality impact analysis— “(1) The Chancellor of the Exchequer must review the equality impact of sections 1 to 5, 24 to 26, 28, 31 to 33, 40 and 86 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider— (a) the impact of those sections on households at different levels of income, (b) the impact of those sections on people with protected characteristics (within the meaning of the Equality Act 2010), (c) the impact of those sections on the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and (d) the impact of those sections on equality in different parts of the United Kingdom and different regions of England (3) A review under this section must give a separate analysis in relation to the following matters— (a) income tax, (b) employment income, (c) coronavirus support payments, (d) pension schemes, (e) investments, and (f) inheritance tax (4) In this section— “parts of the United Kingdom” means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of clauses 1 to 5, 24 to 26, 28, 31 to 33, 40 and 86 of the Bill on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a regional basis.
The Government have delivered an unparalleled package of support during the covid-19 pandemic, providing over £352 billion for public services, workers and businesses. This response has been fair and balanced, with the poorest households benefiting the most from the Government’s interventions. It is now necessary to take steps to ensure the sustainability of the public finances and continue to fund our excellent public services. Our approach to fixing the public finances will therefore also be fair and balanced. The fairest way to put the public finances on a more sustainable footing is to ask all taxpayers to play their part, as well as asking those people able to contribute more to do so. That is why, in these parts of the Bill, the Government are legislating for freezes to the personal allowance, higher rate thresholds, the inheritance tax thresholds, the pensions lifetime allowance and the annual exempt amount in capital gains tax. The Government are also making sensible changes to the tax treatment of coronavirus support payments and exemption-related adjustments to account for the impact of the pandemic Given the number of speakers and amendments, I will try to keep my remarks relatively brief. Before I turn to the changes announced at Budget, let me touch on clauses 1 to 4. These are legislated for every year and are essential for the Government to be able to collect the right amount of income tax for the tax year 2021-22. I come now to the clauses that legislate to maintain thresholds. These clauses are an essential part of a fair and responsible fiscal approach to fixing the public finances. Clause 5 maintains the income tax personal allowance and the basic rate limit at their 2021-22 levels from April 2022 until April 2026. This is a universal, progressive and fair measure being taken to fund public services and rebuild the public finances, and it ensures that the highest-earning households will contribute more. Indeed, the top 20% of highest-income households will contribute 15 times that of the bottom 20% of lowest-income households I shall now respond to amendments 2 to 4 and new clause 7, which relates to clause 5. Amendments 2, 3 and 4 seek to delay the decision to maintain the income tax personal allowance and higher rate threshold until April 2023. The Office for Budget Responsibility forecast that UK GDP will reach its pre-virus peak by the second quarter of 2022. The Bank of England forecast that it will happen at the beginning of 2022. In the light of those estimates, it is reasonable and fair for the Government to uphold the start of this policy from April 2022. Nobody’s take-home pay will be less as a result of this decision. For most taxpayers, any real-terms loss will be very small in 2022-23. I therefore urge the right hon. Member for Hayes and Harlington (John McDonnell) not to press the amendments to a vote New clauses 12 and 23 would require the Government to publish equalities impact assessments for all the measures in this debate, and new clause 8 would require the Government to publish an equalities assessment of existing income tax thresholds. New clause 8 would also require the Government to publish distributional analysis on two changes that do not constitute Government policy—namely, reducing the additional rate threshold to £80,000 and introducing a supplementary 50% rate of income tax for income above £125,000 The Treasury carefully considers the equality impacts of the individual measures announced at fiscal events on those who share protected characteristics, in line with both its legal obligations under the public sector equality duty and its strong commitment to issues of equality. The Treasury already publishes comprehensive assessments of income tax threshold changes. Alongside the Budget, the Government have published detailed distributional analysis of the decision to maintain income tax thresholds, both at a household and on an individual basis. The new clauses therefore do little to provide meaningful additional analysis further to the Government’s existing comprehensive publications, and I therefore urge Members not to press them to a vote Clause 28 makes changes to maintain the pensions lifetime allowance at £1,073,100 until April 2026. This will limit the pensions tax relief available to those with the largest pension pots and supports the Government’s objective of a system of pensions tax relief that is fair, affordable and sustainable. Clause 40 maintains the capital gains tax annual exempt amount at its 2020-21 level of £12,300 for individuals and personal representatives and £6,150 for most trustees of settlements for the tax years 2021-22 up to and including 2025-26. Maintaining the annual exempt amount at a 2020-21 level is a responsible decision, consistent with the decisions that the Government have taken to maintain the value of the other main allowances over the same period. Clause 86 maintains inheritance tax thresholds at their 2020-21 levels until April 2026. This means that the nil rate band will remain at £325,000 and that the residence nil rate band will remain at £175,000. The tapering of the residence nil rate band will continue to start when the net value of an estate is more than £2 million. Maintaining these thresholds is forecast to contribute almost £1 billion over the next five years to help to rebuild the public finances, but this approach still ensures that more than 94% of estates will not be liable for inheritance tax in each of the next five years. Taken together, this Government’s approach to thresholds across the tax system is clear evidence of a fair and consistent fiscal strategy to repair the public finances while continuing to invest in public services Clauses 24 to 26 make minor adjustments to exemptions to account for the impact the coronavirus pandemic has had on businesses and workers. Let me also address one proposal relating to clauses 25 and 26. New clause 11 would commission a review of the changes relating to the employer-provided cycles exemption. I am happy to reassure the Committee that the terms of that exemption have not changed and only a minor time-limited easement is introduced by this Bill. It is not therefore necessary to review the changes. Clauses 31 to 33 relate to the Government’s package of support payments for individuals and businesses during the pandemic. Clause 31 makes changes to ensure that the one-off £500 payment to eligible working tax credit claimants announced at Budget 2021 is not subject to income tax. This will ensure that the recipients of the tax credit benefit in full and that the payment meets its objective of providing additional support to low-income working households.
Has the Minister had any discussion with the Low Incomes Tax Reform Group, which has indicated to me some of its concerns about how Her Majesty’s Revenue and Customs required claims from individuals? It is a delicate matter, but there is problem there. Has he had an opportunity to discuss it with the LITRG?
The hon. Gentleman will be pleased to know that I maintain a strong dialogue, through officials, and from time to time in person, with the LITRG and I have no doubt that the input it has given has been carefully considered in this regard. If he would care to write to me with his specific concern, I would be happy to pick that up as well It is right that HMRC has powers to tackle fraud and abuse of the self-employment income support scheme and that the Government provide legal clarity that SEISS grants are liable for income tax in the year of receipt. Clauses 31 and 32 will allow payments made in support of individuals and businesses by the Government to meet their objectives as far as is possible. Opposition amendments 15 and 92 are already comprehensively addressed by existing policy, and I ask that Members do not press them to a vote. Clause 33 makes changes to ensure that the repayments of business rates relief are deductible for corporation tax and income tax purposes. This ensures that any repayments of support are dealt with appropriately Taken together, these measures will help the Government to continue to support individuals and businesses through the coronavirus pandemic, and they will also begin to put the public finances on a sustainable footing as we continue to move out of the pandemic. I therefore ask that clauses 1 to 5, 24 to 26, 28, 31 to 33, 40 and 86 stand part of the Bill.
I rise to speak to the provisions standing in my name and those of the Leader of the Opposition and my right hon. and hon. Friends. On behalf of the Opposition, I will begin our detailed scrutiny of this Bill today by considering the impact it will have most immediately and most widely on people across the UK through its cuts to the money that families, in all their many forms, have in their pockets The opening clauses, 1 to 5, focus on income tax, with clause 5 freezing the personal allowance from 2022-23 through to 2025-26. That is no small change; the effect of the clause will be to make half of all people in the UK pay more tax from next year, and that is not the only measure the Government are taking that raids their pockets. We know that this Bill will make families pay more through the income tax changes next year, but it also does nothing to stop the sharp council tax rise that the Government are forcing councils to implement right now, it supports the Chancellor’s plan to cut £20 a week from social security this autumn for some of those who need help most, and of course it comes as the Government are choosing, in this year of all years, to take money from the pockets of NHS workers.
Does the shadow Minister accept that the total take in income tax from individuals across the United Kingdom as a result of that one measure in one year will be £10 billion, and the total take over the next five years will increase by 25%? On the basis of the tax paid now, 25% more income tax will be paid collectively by individuals as a result of simply freezing thresholds.
I thank the hon. Member for setting out some of the figures about the impacts of the Bill. I can add to that by saying that if we take the freezes to the personal allowances, along with the cuts to NHS workers’ pay, the council tax hike and the cut to universal credit, the real scale of the impact of the Government’s decisions becomes clear. A newly qualified nurse living with their partner and two children in rented accommodation will lose more than £1,100 a year. It is plain wrong to hit families across the country in that way, but that sense of injustice is made all the more acute by the fact that that increase of costs to families comes years before any rise in corporation tax. At the same time, through the Bill the Government are letting tech giants stop paying tax altogether Last week, we voted against the Bill on Second Reading. Our reasoned amendment made it clear that key to the decision was its effect on family finances, through what it does and what it does nothing to stop. Today, we have the chance to stop the measure in the Bill that will make every income tax payer in the country pay more next year. We will seek a vote on clause 5, and I urge Conservative Members to join us in knocking this attack on families out of the Bill. By doing so, we would allow the Government to come back in their next Finance Bill with a fairer approach—one that does not put a misguided tax break for big business ahead of the money that families have in their pockets. The other clauses that are being debated concern a range of other matters. Clauses 24 to 26 relate to the impact of covid on those benefiting from enterprise management incentives, cycle-to-work schemes and employer-provided coronavirus tests. Meanwhile, clause 31 exempts those receiving tax credits from paying income tax on the one-off covid-19 support scheme payment. Clause 32 clarifies the tax treatment of payments made under the self-employed income support scheme. Clause 33 provides for a relief where businesses repay covid support payments that are no longer required. Finally, clause 28 freezes the standard lifetime allowances for pensions immediately until 2025-26, while clause 40 does the same for the capital gains tax annual exempt amount and clause 86 does the same for inheritance tax thresholds Through our new clause 23, we ask that all the measures being considered today are considered for their effects on the finances of different households across the UK. We want to see a fair, progressive tax system in this country, so we want the Government to be transparent about the effect that their changes will have on people’s lives. The question of how changes affect the people of this country should always be the Government’s overriding concern when introducing changes to the tax system That is why our new clause would require that the Government analyse, review and be transparent about how their changes will affect households at different levels of income. It would further require Ministers to set out how the changes would affect people on the basis of age, disability, race, sex and other protected characteristics, and how they would affect people living in different nations and regions of the UK. There is significant evidence that women, those from black, Asian and ethnic minority communities, young people and disabled people have been disproportionately affected throughout the pandemic. The Budget report itself says: “The economic impact of restrictions has not been felt equally. Staff in the hardest hit, largely consumer-facing sectors, such as hospitality, are more likely to be young, female, from an ethnic minority, and lower paid.” It is therefore indefensible that not one of many supporting documents to last month’s Budget statement, nor the Bill, was an equality impact assessment Our new clause gives the Government a chance to right that wrong, but while that analysis is vital in setting out how different people will be affected by the Government’s choices, we know already that the biggest and most immediate impact of the changes in the Bill—and of the Government’s wider policy choices, on which the Bill is silent—will be to take money from the pockets of people across the country this month, this autumn and next year.
We hear from the hon. Gentleman that his party seeks to strike out the single largest intervention that will help the recovery, in the form of the super-deduction, which businesses have already told me is mobilising incremental investment. I would be fascinated to hear his view of new clause 7, which was put forward by many of his recent colleagues, including many of those who were on the Front Bench, to increase the rate of income tax to 55%. What does he think of that?
The hon. Gentleman spoke about the super-deduction, but as that will be picked up in the next debate, I will focus now on the changes that are the subject of this debate Although we know that the Government will be making changes that affect different communities differently, the crucial point is that we know already what impact the Government’s policies will have this month, this autumn and next year. This month, households will feel the hit as the Government force local authorities to raise council tax in the middle of a pandemic, having broken their promise to give councils whatever was needed to help support people through the covid crisis This autumn, some of those families who need help will see the Government cut £20 a week off their universal credit, hitting them just as other covid support schemes are due to be winding down. This hit will come just when the Office for Budget Responsibility has predicted that unemployment will peak at 6.5%—2.2 million people—and this cut takes out-of-work support to its lowest level since the 1990s Next year, more than 30 million people in this country, including those earning only just enough to pay tax at all, will be forced to pay more as the freeze to income tax and personal allowances kick in. It tells us all we need to know about this Chancellor’s priorities that families will feel the impact of the Government’s choices years before businesses face an increase in corporation tax and at the very same time that some of the biggest firms in this country are offered a tax break that the Chancellor himself has boasted represents the biggest tax cut in modern British history We on the Labour Benches believe that our country needs a fair progressive tax system. We want to see greater investment in jobs, growth and addressing the long-term challenges that we face. We want to see families protected, not forced by this Government to shoulder the burden while tech giants see their tax bills reduced to nil. It is not just the Opposition who oppose the Government’s approach. Major international economic bodies such as the International Monetary Fund and the OECD agree that these tax rises on families are wrong. The hit to household finance is not only unfair but economically illiterate. Taking money out of people’s pockets now means that they will not spend it in small businesses or in local high streets, damaging the prospect of a recovery We will be voting for the Government to be clear and transparent about the effects of the measures in this Bill on all the different families and households across this country. While Conservative Members may not want to support all of our points, I would not be surprised if some did not feel deeply uncomfortable at the prospect of making families pay more through this Bill. We therefore hope to offer them a chance to join us in rejecting clause 5, halting this Bill’s plans to make all income tax payers pay more from next year and forcing the Government to think again about the fairer tax system our country needs.
I am aware that time is short, so I will keep my remarks brief All of us will have been dealing with constituents facing real financial challenges over the past year. The past months have been unprecedented in their impact on family finances. People have lost jobs, been on furlough, and faced great uncertainty. It has been genuinely hard. Yet some sectors have done very well and seen growth, so the economic impact of the pandemic has fallen very unevenly. The economic consequences have also landed very quickly, but the response from the Treasury was equally quick. We are now facing the next stages of the crisis. Over the months ahead, we will be getting the economy moving again as quickly as possible, safely, so that we can get people back into work, and considering how the Government will pay for all the extra costs they have incurred As my right hon. Friend the Financial Secretary to the Treasury said, economists have predicted that the economy will have fully restarted by April next year. I think that that is right, based on my own business experience and on conversations with businesses in my constituency and beyond. It therefore makes sense to start the recovery of the public finances then, and that is what some of the measures in this Bill do. The question for me, though, is how to do this fairly and without choking off the recovery Let me focus on one measure: personal allowances. The increases that we have seen in personal allowances over the past decade have been a key ingredient in helping some of the least well-off in our society. The allowance has nearly doubled and is one of the most generous in the world. It has been part of the broader initiative, which has been a hallmark of the past 10 years, about making work pay. It is with some caution that we should consider changes, but I will be backing these changes and urge Members to reject the Opposition amendment on this measure. It is worth remembering that nobody’s take-home pay will be less than it is now, and that this is a measure that builds over time, as will the pace of the recovery. I note that the right hon. Member for Wolverhampton South East (Mr McFadden), who is not in his place, commented that it is a fairer way to raise revenue than some others, and I agree with his analysis The crisis support packages have been necessary and welcome, but they come with a huge cost. There is no compassion in letting debts build up for future generations to pay off. There is no stability for Governments in failing to tackle deficits.
While I think we all accept that the current level of debt cannot continue, does the hon. Gentleman accept that, first, by taking £10 billion from consumers in the next year as a result of these tax allowance freezes and, secondly, because we do not know what will happen to unemployment once the furlough scheme finishes, there is a risk that the freezes this year will impact on the short-term recovery of the economy? Are they not therefore inappropriate, and ought not the Government to wait to see what happens?
The right hon. Gentleman makes a good point, as he always does. I have considered that point, and I know that the Government have also considered it, but this is about striking a balance between encouraging the recovery and choking it off. Part of that recovery is ensuring that we have sound public finances. We have had two supposed once-in-a-century events in just over 10 years, and the lesson we should draw is that financial responsibility allows Governments to respond to crises at scale. That is what we have just seen here, and that has helped the finances of families across our nation when they needed it most That is also why the economic recovery, with its focus on growth and investment and on households and Government, cannot be put off. The personal allowance measure in the Bill should proceed. We should not listen to the Labour party because, quite frankly, its Members have voted against all the personal allowance increases in Budget measures over the past 10 years. We need to get the focus that we have had on saving lives back on to recovering livelihoods.
I will speak to new clause 10. This UK Government said they would be led by data, not dates, and the Chancellor has stood in the Chamber on several occasions and said he will do whatever it takes to ensure recovery, yet in this Finance Bill he has seen fit to put an arbitrary date on ending the furlough scheme. The Labour shadow Chancellor has been critical of the Government’s previous dithering on extending the job retention scheme, so I hope her colleagues will support the SNP’s new clause, which will protect jobs and workers across the UK New clause 10 would introduce a reporting requirement to compare the effect of continuing the coronavirus job retention scheme and the self-employment income support scheme until both 30 September 2021 and 31 December 2021. Reports would be required on the specific impacts of continuing to both dates on business investment, employment, productivity, GDP growth, and poverty. SNP Members believe that the furlough and self-employment support schemes should be continued for as long as our economy requires them. It is economic recklessness to confidently predict the end of a pandemic that has thrown us curveballs time and again. Any winding down of support schemes should be linked to the numbers of covid cases in the population, with proper care taken to make sure that no badly hit areas are left behind We have seen the potential of new variants such as the Kent and South African variants, with the Indian variant causing the country to be added to the red list and prompting the Prime Minister to cancel his travel plans just this week. On the variants and support for people who need tests, I welcome the change to exempt coronavirus tests from income tax, but SNP amendment 93 would seek to extend the income tax exemption for payments to employees in respect of the cost of obtaining antigen coronavirus tests to cover specific antibody coronavirus tests, too. There is a wider argument for broadening the provision to future proof the Bill for future pandemics and other such incidents, so I hope Ministers will give the proposal some consideration Businesses have found themselves in a position of having to make payments on VAT deferred last year in the first week of the crisis while we are still in lockdown in the second peak of the crisis, and now the biggest lifeline supporting our economy is being pulled away without any due consideration for the impact on jobs.
Like all Conservative Governments, this is one who believe that people should be encouraged to create wealth and invest it wisely without undue interference from the state, bureaucracy or taxation for taxation’s sake. The fundamentals of our economy were strong nationally and in the Meon Valley as we headed into the coronavirus pandemic, and I am confident enough that we are well set to emerge from it and carry on with good growth. Although it is not the topic of this segment of the debate, I must welcome the announcement in the Budget of the Solent freeport, which will bring jobs and investment to the whole region, which includes my constituency I want to speak to clauses 5 and 28. The pandemic has created a major challenge for state finances, and I recognise that the Treasury must cover the cost of the measures it has taken to support jobs and society. The two long-running strands of policy covered in these clauses are the reform of personal income tax allowances and the lifetime allowance in pension fund accrual. The commitment to a £12,500 personal allowance featured in the Conservative party’s 2015 election manifesto, and I am pleased that we are achieving it a year early. Since 2010, the personal allowance has grown more quickly than average earnings, and a huge number of workers have benefited. In announcing a freeze between now and 2026, we will see some of that eroded—around £8 billion of income flowing back into the Treasury by 2025-26—and I hope that Ministers will ensure that we direct the benefits of recovery at the groups on the lowest incomes, whom we have done so much to help in government already. Needless to say, I will not be supporting the Opposition amendment to clause 5 Another area where I hope Ministers can keep an open mind is simplification of our pensions system in the future, but today I would like to concentrate on the lifetime allowance in clause 28. As many other Members will have seen in their postbag, this has been affecting doctors in the NHS, senior teachers and others in the public sector who have taken or considered early retirement to avoid breaching the cap. As well as creating a situation where the Treasury does not see some of its forecast tax take coming in, it means that in some cases, people have gone back to work as contractors or locums, sometimes filling gaps that have been created by this policy on pensions The intention behind the lifetime allowance when it was introduced in 2006 was to simplify a large number of regimes. However, freezing it at just over £1 million without the tie to the consumer prices index means that we are seeing some complex reworkings of remuneration schemes, and we will see more unintended consequences as growing numbers of people look to find ways to avoid the cap. The British Medical Association’s survey of GPs indicated that almost half of doctors would consider early retirement to protect their earnings after retirement. While the Budget forecast states that by 2025-26 there will be an additional £300 million of revenue, it does not account for other costs that the policy could contribute to Pension policy generally encourages people to forego current consumption, so that they can enjoy a higher standard of living later in life. However, the trade-off here is different, and we risk public services having to cope without staff or pay for them because they are contractors or locums if we carry on eroding the value of the lifetime allowance. I hope the Treasury will look creatively at how we can balance ensuring that people on higher incomes pay their rightful share of tax with the need to ensure that skilled and experienced workers continue to contribute to the wider public good throughout their working lives.
Clause 31 relates to the decision to cut the £20 a week uplift in universal credit and working tax credit in six months. I want to focus my brief remarks on that decision, highlighted by my hon. Friend the Member for Ealing North (James Murray), because it will be key in the impact analyses in new clause 23 and amendment 15. A Work and Pensions Committee report in February drew attention to the Joseph Rowntree Foundation’s finding that withdrawing the temporary increase “will risk sweeping 700,000 more people, including 300,000 more children, into poverty”, and that “500,000 more people could end up in deep poverty (more than 50% below the poverty line).” It goes on to explain that “people who were already more likely to be in poverty were most affected by the economic storm caused by COVID-19: workers in low-wage sectors or part-time jobs, people living in areas with higher rates of deprivation, families with children, disabled people, or those from BAME backgrounds…around 60% of the families who lose out being in the bottom 30% of the income distribution.” It goes on to say that “60% of all single parent families in the UK will experience this overnight cut to their incomes” when the £20 a week is removed Under the Government’s plans, the cut will happen just as unemployment is forecast to peak. The last time anything like this happened in such circumstances was 90 years ago under the national Government of Ramsay MacDonald. It will devastate the finances of a large number of struggling families. Ministers will find it extremely hard to justify, so I particularly welcome today’s reported call by more than 100 Conservative MPs to make the £20 a week uplift permanent The Resolution Foundation’s “Living Standards Outlook 2021” in January said that rising unemployment and removing the £20 uplift would push 800,000 adults and 400,000 children into relative poverty—the biggest annual poverty rise since the 1980s. A Northern Ireland woman told the Joseph Rowntree Foundation: “The £20 uplift to Universal Credit has meant I have just about managed to keep my head just above water. I’m living day to day trying to pay my bills and keep my house warm for my child. Taking this away now or in six months means I will be drowning in debt.” A London woman said: “We’ve relied heavily on food banks…That £20 is often the difference between light and heat or no light and heat. If you don’t have gas, you can’t cook.” A Leeds man said: “I am aware of the extra—if it wasn’t for that I don’t know how I would survive. Living on Universal Credit is hard; it’s extremely hard. It is literally living day to day and working out where my next food is coming from.” Twenty pounds a week should not be taken away from people like that just as unemployment peaks. Iain Porter of Joseph Rowntree told the Select Committee that the current benefit level without the £20 uplift is “at the lowest level since around 1990 in real terms”, and that as a proportion of average earnings, it is the lowest ever. Inflicting that just as unemployment is peaking is indefensible The principal policy manager at Citizens Advice told the Select Committee: “At the very least, if the uplift is not made permanent, we think it needs to be in place for at least 12 months while we go through the tricky part of recovery from this crisis.” I hope Ministers will reflect and, having done so, decide after all not to make this cut in September.
Thank you very much indeed for allowing me to contribute to this afternoon’s proceedings, Dame Rosie. I want to talk about clause 5, on the freezing of personal allowance for four years from 2021-22, the resulting amendments, which would push the freeze back by a year, and the general position across the proceedings this afternoon with regard to allowances and the freezing or otherwise of them In the six years that I have been a Member of Parliament, it has been a matter of great pride that we have reduced the personal tax allowance. It was half the level that it is now, since it was raised to £12,500. That is the highest basic personal tax allowance across all G20 countries and means that a typical taxpayer is saving £1,200 in tax. More importantly, it has really sent out the message that work pays. It is no coincidence that, as well as the increase in personal allowance and the introduction of the national living wage levels that we have, we have seen record levels of employment and record lows in unemployment. It is a great success story. The covid pandemic has put all that at risk, though,which is why I find myself in the bizarre position of supporting the personal allowances freeze and intending to vote against any amendment tabled by those on the left to delay that freeze for a year. Ultimately, if we do not do something about our finances, we will do the country a great disservice and end up costing individual taxpayers—or non-taxpayers —even more by mismanaging our national debt.
With the greatest respect for the previous speaker, I think there is a view across the House and in all parties that we need to manage the economy effectively in the interests of everybody. That means addressing the debt to GDP ratio—of course it does—but the question always arises, “Who bears the burden? Who carries the heaviest burden?” I believe that the Bill shifts too much of the burden on to those who are the least able to bear it. That is where we disagree, and it is an honest disagreement I will speak to oppose clause 5 standing part and to support amendment 2, and consequential amendments 3 and 4, which stand in my name and those of a number of my colleagues. Some of this is about confidence in politics, which at the moment is receiving a bit of a drubbing In the last general election, the Conservative manifesto pledged: “We promise not to raise the rates of income tax…This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.” Clause 5 breaches that pledge; incomes are not protected. More of people’s incomes will be hit by income tax. It is especially harsh on the millions of public sector workers who have faced from this Government: first, a pay freeze; a 5% rise in council tax; and now a stealth rise in their income tax. These people are low earners who struggle to make ends meet as it is. Low earners are heavily indebted. Some have been furloughed, losing 20% of their income for a year. Now they are being hit by a stealth rise in income tax that was not pledged at the last election and that any fair reading of the Conservative manifesto would have thought was completely ruled out The Labour party also stood on a manifesto that said there would be no rise in income tax for 90% of earners, and has recently said that now is not the time for tax rises. I hope that Members across the whole House will stand by their commitments at the last general election and oppose clause 5. This would allow the threshold to rise with inflation, as legislated for way back under the last Labour Government in the Income Tax Act 2007 Low pay is endemic in our society. In 2015, the then Chancellor, George Osborne, promised a £9 minimum wage by 2020. It is 2021 and the minimum wage is still below that level. Let us look at an example. We know that half of all care workers earn less than the real living wage and the majority of children are living in working households. What does that say about low wages? The last thing any Government should be doing is raising taxes on low-paid workers, especially when that Government have broken their promises on raising wages and have failed to reach the target they set for the minimum wage Some Members may recall the Rooker-Wise amendment; it was a long time ago—44 years ago. That amendment overturned a similar proposal from the Callaghan Government. With many low-paid workers not getting a pay rise and facing mounting household debts, we should not be taking more of their income in tax. With high street retail needing an urgent stimulus, there cannot be a worse policy than removing demand from the economy at this time. That demand is really created by the people—these are the people who will spend, not hoard If the House is not minded to leave out clause 5, perhaps the Government can compromise and accept amendments 2, 3 and 4 in my name and those of other hon. and right hon. Members. These amendments would ensure that the stealth tax on working people was delayed until 2023-24—the same year that the corporation tax rise kicks in. Low-paid workers should not be hit with an extra year of tax that the corporations are not hit with Another point that I hope the Government will consider incorporating into the Bill before Report stage is the case for equalising capital gains tax rates with income tax rates. Ahead of the Budget, I was heavily briefed that this was being considered by the Chancellor. It is manifestly unfair that income derived from wealth is taxed at a lower level than income derived from work. I hope that the Government will look at this issue ahead of Report stage. I urge the Government to consider accepting amendments 2, 3 and 4 at a bare minimum—better still, leave out clause 5 altogether. Do not force the lowest paid in our economy to shoulder what could be the heaviest burden.
I wish to speak to clause 5 relating to the changes in personal income tax allowances and to clause 28 relating to the freezing of the lifetime allowance on pension pots There is no doubt that the last year has made unprecedented demands on the public purse, and it is right that the Government should be prepared to take difficult decisions on taxation as we move forward, as we all very much hope, out of the pandemic and into the changed world beyond. However, the Government made clear commitments in their 2019 manifesto that they would not raise income tax on working families and they have broken that commitment in this Bill. The freezing of the personal allowance and the higher tax bands means that more working people will pay tax and at higher rates than they would otherwise have expected Clearly the Government are banking on a consumer-led recovery and this tax burden on working families will reduce the amount of discretionary spend available to households, limiting their ability to spend on consumer goods. As housing costs increase to their highest ever levels, household budgets will continue to be squeezed, and piling additional tax charges on top will create an enormous burden for those who are already struggling to make ends meet. It is a particular insult to those in our NHS, who have sacrificed so much to keep us all safe this year and have been told to expect only a 1% pay increase for their trouble. Our nurses will have to give back more of that 1% in tax than previously despite all that they have already given. This is particularly galling when compared with the Government’s decision to delay a corporation tax increase. The Government have chosen to tax hard-pressed frontline workers first and large, profitable corporations later. Only those companies that have remained profitable throughout the pandemic would be paying corporation tax next year, which is why an immediate increase in corporation tax could have captured the windfalls or excess profits of those who found their revenues increased as a result of the unusual trading conditions of the last year. This would have been a far more equitable route to raising income than putting the burden on hard-working families On clause 28, I urge the Chancellor to carefully consider the impact on NHS pensions of freezing the lifetime pension allowance. I have heard a few stories from constituents about how this measure interacts with their final salary scheme. While a figure of a little over £1 million would rightly strike most as more than sufficient as a tax-free pension pot, senior doctors in the NHS are finding it extremely difficult to assess whether or not their overtime will result in their yearly calculation of their lifetime allowance being tipped over the threshold and result in a current tax bill. The British Medical Association estimates that the number of GPs taking early retirement has tripled over the past decade and puts this down partly to the uncertainty about their tax bills It is worth noting that when the lifetime allowance was first introduced in 2006, it was set at £1.5 million, rising to £1.8 million in the financial year 2010-11. Since the Conservatives came to power, it has reduced every year to the current level of only just above £1 million. Like the freezing of the personal allowance, this has the impact of catching more ordinary people in the taxation net, and again we see that the Chancellor wants to raise money off the back of hard-working NHS frontline workers while protecting profitable corporations This issue has been a problem for doctors for the last few years, so the Government have no excuse for not knowing that the freezing of the pension lifetime allowance would make the situation worse. Have the Government carried out an impact assessment of the measure on NHS retention of senior staff? I am extremely concerned, at this time when our senior NHS staff are exhausted and facing a huge backlog of elective surgery, that skilled staff should not feel compelled to take early retirement because of an unintended and avoidable tax consequence The Finance Bill seeks to tax hard-working families and penalise those who have been working so hard to keep us all safe this year, and the Liberal Democrats cannot support these measures.
I want to offer my support to the shadow Minister, my hon. Friend the Member for Ealing North (James Murray), who put his case very fairly. I want to illustrate what that means in my constituency of Reading East and perhaps develop some of the points he made I particularly want to raise the growth in the use of food banks, which has been very significant across the country, and our area is typical in so many ways, as indeed it is in many instances. The growth in the use of food banks illustrates why the Budget was such a complete failure, because the Government failed to offer real help to many families. In particular they offered very little to those in the greatest need, as we heard from the shadow Minister, and very little to those who are self-employed and have recently set up a small business. Indeed, the3million campaign group rightly pointed out that, although a small number will benefit from some measures offering further support for recently set-up small businesses, most will not, and that has been widely recognised in my constituency. Before going into the detail of local food banks, I want to thank all the volunteers at our local council in Reading and many others, both businesses and individuals, who have helped support food banks by generously giving their time and putting the community and others first at what is a very difficult time for so many people. I have tried to keep in touch with the pressures by going to help myself and to receive regular briefings from food banks and other charities, and I want to describe to colleagues what this is like.
[Inaudible.]
We are having some difficulty hearing Seema Malhotra, I am afraid. Do you want to try again, Seema?
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I think what we should probably do is go to our next speaker and come back to Seema. We will go now to Sir John Redwood.
Dame Rosie, I have declared my business interests in the register Of course, I am not going to vote against this Budget and I wish the Government well with it, but I would like them to pause a little, think through where we are and recognise that they may need to revisit some of these decisions in the months ahead. My worry is that they are being too tough in their tax measures and too tough on people’s incomes at a time when we need to build confidence and recovery, and they are doing so at a time when it is really impossible for their expert advisers and other economic forecasters to give them a clear steer of what the public finances will look like in two years’ time, let alone in three or four years’ time The Government seem to think that their experts can define a given amount of money that will be a shortfall in order to hit their longer-term Government targets, and therefore say that we need to make these tax changes for the next few years in order to fill the alleged black hole. It may be that they are trying to fill a hole that does not exist. It may be that we will have a much better recovery than the forecasters are thinking. It may be that the economy responds much better over the next two or three years or, indeed, over the next two or three months, as the relaxations kick in We can see the difficulty that the official forecasters have if we look at the numbers they gave us as recently as November 2020. Then, the OBR, forecasting the budget deficit—the amount of extra borrowing—for the year 2020-21, said that it would be £394 billion, an enormous amount. Bear in mind that it was having to forecast for only four months, as two thirds of the year had already gone. When we got the 11-month figures, up to February, recently, we discovered that they had come in at just £278 billion and so, subject to what happened in March, it may be that the OBR was the best part of £100 billion out on the deficit for the year in question when it tried to forecast, already knowing quite a lot of what had happened. It was, of course, massively too pessimistic. It is great news that we will have borrowed so much less than we feared, although clearly we are still borrowing far too much on an unsustainable basis, which is why we need to promote a strong recovery to get the deficit down I therefore say to the Government: let us show a little humility. The experts and advisers are not able to give us anything like accurate figures—I can sympathise with them, because extreme things have happened in response to the pandemic—so are we sure that we need to make these moves over the next three or four years There is also a case for showing a bit of humility and thinking ahead about whether we might need to show a bit more flexibility because the Government themselves have rightly said, now that we are out of the European Union and the economic world has been stood on its head, that they want to set out a new framework for guiding the economy. I encourage them to do that, and I hope it is a framework that promotes growth and considers real issues such as the increase in the number of jobs, the rise in real incomes and the productivity growth that can be achieved We need to get away from the Maastricht criteria, which have governed our policy for many years and still seem to be behind the architecture of this Bill. We seem to be driven by the need to get state debt falling as a percentage of our national output by the end of the period that we are talking about today for the tax changes. State debt is now a pretty useless figure to try to target in the way that the Maastricht criteria did. We now live in this age of monetary experimentation, where great banks such as the Bank of England, as well as the European Central Bank, have bought in very large quantities of state debt—indeed, they still are doing so. Surely, where that happens in a single sovereign country with its own central bank, owned on behalf of the taxpayers by the state, we should treat the debt that we have bought back in rather differently from the debt on which we owe money by way of interest to people outside—some our own citizens, some foreigners—who have been financing the Government. That makes state debt a very difficult number to use to guide the economy. Of course, the future system must have some control over the build-up of actual interest charges that we have to pay to third parties, but it should concentrate much more on promoting growth May we therefore have just a few words from the Government, accepting that these numbers are very difficult and that the current forecasts are likely to be very wrong? No one can say exactly how wrong they are going to be, because so many things will happen over the next two or three years and nobody has been through a bounce back of the kind of pace that is possible from such a big hole in our economy, created by necessary health measures to cure the pandemic We need a policy that is very supportive of more jobs, of higher incomes and of encouraging investment, enterprise, saving and, above all, self-employment and more small business activity. My worry is that the Government are being a bit mean with people and with small businesses in the name of controlling state debt at a time when we have no idea what the state debt will be in two or three years’ time, and when the state debt number is now very different because of the purchase of state debt by the state itself I would hope that the Government recognise that we may need to revisit all this, and I would want them to be on the side of people keeping more of the money they earn and, above all, of a much better deal for small business and the self-employed, where I think they are too tough.
We are having one or two technical issues, so we will go straight to Richard Burgon.
I wish to speak to my new clause 7, which would require the Government to publish an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000 The coronavirus crisis has not only shone a spotlight on the deep inequalities in our society and their deadly consequences, but deepened them. Deep inequalities scar our nation. As we come out of this pandemic, if we are to learn the lessons and build a more equal, less divided and more inclusive society, then we need to address decades of failing tax policy. Ensuring higher taxes on those on the very highest incomes has an important role to play in building that fairer society. Since Thatcher, the Tory mantra has been that low taxes on the rich benefit everyone, but years of keeping taxes low for the very rich did not in fact boost economic growth; instead, it allowed inequality to run completely out of control. That has been proven by new research by the London School of Economics and King’s College London showing that reducing taxes on the rich leads to higher income inequality that has an insignificant effect, in any positive fashion, on economic growth or unemployment. In short, trickle-down economics has been a lie. Now is the time to acknowledge that and address it by creating a fairer tax system. My amendment calling for a new 55% income tax rate would target those on very high incomes of over £200,000 per year—the richest part of the top 1%, or about 300,000 people. The current highest income tax rate is just 45% for those earning above £150,000—not much more than for those earning £50,000. Yet 40 years ago the average top income tax rate for the wealthy OECD member countries was 62%. The top income tax was 60% even under Margaret Thatcher, so perhaps even the Thatcherites on the Government Benches will consider offering their support for the amendment. This increase would affect less than 1% of the population—about 200,000 people, according to HMRC There has been huge suffering in our society over the past year, yet the very wealthiest in our society—the billionaires and the super-rich—have exploited this crisis to further line their pockets. We cannot go on layering inequality on top of inequality. Now is the time to act. Publishing an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000 would be an important stepping-stone towards building a fairer and better society. That is why I would like to press my new clause 7 to a vote.
I speak in support of amendment 15 and new clause 8 in my name, and amendments and new clauses in the names of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friend the Member for Leeds East (Richard Burgon) My amendment 15 is tabled with the aim of highlighting the importance of the so-called £20 uplift for tax credit recipients from the covid-19 support scheme, and the damage that the Government’s decision to not continue this beyond September will cause. In March 2020, the Chancellor announced a temporary uplift of £20 per week to universal credit via the standard allowance of the working tax credit basic element for the 2020-21 financial year. A one-off payment is being made to tax credit recipients to cover a six-month period from April to September 2021 to continue this support As Members will know, payments from the covid-19 support scheme for working households receiving tax credits are being introduced under the Coronavirus Act 2020. Clause 31 introduces an exemption from income tax for payments made to tax credit recipients. My amendment 15 would require the Government to publish an equalities impact assessment of the provisions of clause 31, which must cover the impact of the provisions on households at different levels of income, people’s protected characteristics, equality in different parts of the United Kingdom and regions of England, and child poverty. That is because while the £20 per week top-up will temporarily be retained, helping some 6.5 million families for a further six months, this does not allay the fears that families will have going into next winter. Rather, it is clear to almost everyone—Action for Children, Child Poverty Action Group, Save the Children, the Joseph Rowntree Foundation, the trade union movement and so on—apart from the Government that the £20 increase and the associated tax relief, as per clause 31, should be made permanent and paid to all claimants, given that poverty levels were already too high pre-pandemic. Extending the £20 uplift is vital because struggling families cannot keep afloat without it, but that will be as true in six months as it is now.
In my limited remarks, I want to support the arguments made by my hon. Friend the Member for Ealing North (James Murray), and to speak in support of Labour’s new clause 23, to which I have added my name, seeking an equality impact assessment of the measures in the Bill that affect family incomes. This includes the impact of specified sections of the legislation on households at different levels of income, on people with protected characteristics, and across the regions and nations of the UK About 700,000 people have lost their jobs since February last year, and many more families have seen a drop in their household income. Over 39,000 are now on universal credit in Hounslow alone, and we have seen a huge rise in the use of food banks. There is no doubt about the importance of financial inclusion at this time. The Financial Inclusion Commission, on which I sit, has highlighted how there are now millions more people facing economic hardship as a result of the covid-19 pandemic. However, the UK entered the crisis with half its population financially vulnerable: 12 million categorised as financially struggling or generally on low incomes, and 13 million as financially squeezed. Covid has laid bare existing weaknesses, vulnerabilities and structural inequalities, and StepChange research shows that 10% of people say they will certainly or probably be unable to pay for essentials in the next 12 months We know child poverty, already extremely high, is rising, so it is inexplicable, when the Government themselves have said in the Budget report that the “economic impact of restrictions has not been felt equally”, that they have not themselves published an impact assessment. It should not be for the Opposition to table this vital amendment. It seems that instead of taking action to boost our community recoveries, the Conservatives are choosing to reward families up and down the country for their sacrifices with council tax hikes, the freeze to the personal allowance from next April a whole year before corporation tax rises kick in, a real-terms pay cut for key workers and cuts to universal credit later this year, a move now even opposed 100 Tory MPs Even when the Chancellor has done the right thing, such as extending furlough, as Labour called for, these moves need to be underpinned by a strong social security system that provides support when people need it. People need to be protected from financial exclusion and families need a clear route out of financial difficulty when they are struggling. The Chancellor could also look at how Sadiq Khan is working to promote financial inclusion through partnership with the financial sector, social enterprises and credit unions, and at his plans for a new team dedicated to economic fairness But instead of economic fairness, what we know is coming is the £20-a-week cut to universal credit for millions of families within six months, just when the OBR predicts that unemployment will peak. It is a cut that takes out-of-work support to its lowest levels since the 1990s. That is why Labour has also called for urgent social security measures, including converting universal credit advances to grants instead of loans, ending the five-week wait, suspending the benefits cap and uprating legacy benefits to match the increase in universal credit. About 2.2 million people on legacy benefits have been deprived of the uplift, and given that three quarters of those claimants are disabled and on employment and support allowance, this has created a two-tier social security system that has left many struggling to cope. Evidence from the Disability Benefits Consortium found that 67% of disabled claimants have had to go without some essential items at points during the pandemic Minority ethnic communities have been hardest hit by both the health and economic crisis. The Resolution Foundation found that, at the end of last year, unemployment among young black graduates had risen to 34%, up from 22% before the pandemic, and almost three times that of young white graduates during the same period. StepChange research also shows that those from an ethnic minority are twice as likely, compared with the GB average, to say that they have experienced hardship, borrowed to make ends meet or have run down savings In conclusion, the Chancellor is hitting families up and down the country, with a quadruple hammer blow of council tax rises, cuts to universal credit, real pay cuts for key workers and the freeze to the personal allowance. If the Chancellor wants to work for a fairer Britain and build a more inclusive and financially inclusive economy, he needs to know who his policies are helping and who they are not. That is why we need an impact assessment, as called for in new clause 23, and the Government should support it today.
I speak to oppose clause 5 stand part, and in support of amendments 2, 3 and 4 in the name of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and others, as well as amendments in the name of my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) and amendments from the Labour Front Bench The Chancellor committed to doing whatever is necessary to support people and businesses through the coronavirus pandemic. I want to believe him, but the £20 a week covid uplift to universal credit will be cut just at the time when the OBR has predicted that unemployment will peak. There has been no uplift at all, as we have heard, in covid support for those on legacy benefits or affected by the benefit cap. At the same time, an equivalent cut in working tax credit for households that have not yet made the move to universal credit will be imposed. Further councils, whose budgets have been decimated over recent years, will be forced to increase council tax by up to 5%, pressuring household budgets even further, so the Bill is already sorely deficient in honouring the Chancellor’s original promise. However, in clause 5—the proposal to freeze the personal tax allowance—the promise is sadly contradicted entirely. The reality of the clause is that, if there is wage inflation over the next five years, someone earning just under the threshold now, for example, who then receives an inflationary pay increase for 2022-23 will start to pay tax As the Resolution Foundation has found, the poorest fifth of households are twice as likely to have seen their debts rise rather than fall during the crisis, so taking some of those lowest earners beyond the personal allowance threshold as their wages might slightly increase with inflation could result in their financial devastation. I therefore supported calls to remove clause 5, or at the very least for the Government to compromise and delay the changes I will also briefly mention clause 32 on self-employment income support. I do not disagree with the sentiment of the clause but, as the Government know, the support still does not go far enough. More than 2 million remain excluded from any Government support at all and, as I have repeatedly told this House, some have sadly taken their own lives as a result. I once again urge the Government to provide an immediate emergency grant to those affected, install new monthly arrangements while restrictions remain in place in complete parity with the extension of the coronavirus job retention scheme and the self-employment income support scheme, and remove the hard edges to eligibility criteria. Finally, they should backdate payments for a full and final settlement to deliver parity and fairness for those excluded from meaningful support.
It is a pleasure to serve under your chairmanship, Ms McDonagh. I very much welcomed the Minister’s response when I asked him about the Low Incomes Tax Reform Group. I will send him all the information that I am concerned about, which I hope he will be able to answer Clause 31 ensures that the one-off £500 payment for certain working households receiving tax credit is not taxable, which is welcome. The problem arises when a person receives a payment that they were not entitled to under the rules. As the payment is made automatically by HMRC without requiring a claim from the individual, if HMRC mistakenly makes a payment to someone who is not entitled to one under the direction and it is not subsequently repaid, it appears that the tax credit claimant will automatically be subject to a tax charge under the Finance Act 2020. That triggers notification requirements for the individual, assessing powers for HMRC and potential penalties I would like to understand whether consideration has been, or will be, given to ensuring that HMRC will set the bar high in terms of what constitutes fraud, and whether it will be limited to those people who fall under section 35 of the Tax Credits Act 2002, in relation to their underlying tax credit award. Over the last period, you, Ms McDonagh, I and everyone in this House has seen young families on the brink of financial collapse—in particular, in my office, due to the inconsistencies of the working tax credit as between those who are self-employed and those whose annual pay packs are constant. Briefly on clause 32, I highlight the fact that taxpayers who have made amendments to their self-assessment tax returns on or after 3 March 2021 may have to pay back some or all of the grants that they have claimed. There is a real concern, which I share, that unrepresented taxpayers may not be aware of their obligations to notify HMRC and, accordingly, may face penalties, inadvertently and perhaps without right. Minister, how will we ensure that HMRC will take steps to ensure that taxpayers become aware of any obligation to repay in time to avoid such penalties? In particular, it is unsatisfactory that taxpayers who have made amendments on or after 3 March 2021 but prior to the date of the claim appear to be obliged to pay back some or all of the grant immediately upon receipt. Some may be unaware that they have to do so, but they face harsh penalties, which were originally aimed at fraudulent claims or for failing to do this on a timely basis. So I am concerned that innocent participants in this process may find themselves in difficult times.
It has been a good debate and I thank all Members who have taken part. Let me pick up some of the key themes that were described, one of which is the impact on taxpayers of the measures the Government have taken to address and fix concerns about the public finances The hon. Member for Ealing North (James Murray) raised this issue. As he will be aware from wider conversation and scrutiny, the Bill places a burden of £40 a year on the average basic rate taxpayer and no increment in take home pay. We think that a balanced and fair approach is one that is widely based and progressive. As I indicated, the top 20% of tax-paying households pay 15 times that of the bottom 20%. He was asked by my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) whether he supported new clause 7, which would raise tax to 55%, and his was an eloquent silence in response. I would be interested to hear in the next debate whether he does support new clause 7’s bid to raise the top rate of income tax to 55%, but I will come to that later The hon. Member for Glasgow Central (Alison Thewliss) raised the question of antibody tests. As she will be aware, antigen tests, which are subject to the relief in the Bill, are connected to employment, whereas antibody tests are not, which is why the relief does not extend to them. It is, however, fully open to the Scottish Government, who have capacity to raise tax revenue themselves, to fund antibody tests if they so choose. She has raised the issue and we can assess whether the Scottish Government wish to follow her lead in funding those tests. The right hon. Member for Hayes and Harlington (John McDonnell) described the tax measures in the Bill as a stealth tax rise. It is an interesting version of a stealth tax rise that is announced in a Budget statement at the Dispatch Box in the House of Commons. He was right when he said earlier that there was an honest disagreement here, and that is what there is. The Government’s view is that there should be a progressive, broad-based approach to fixing the public finances that begins at an appropriate time once the recovery is under way, and that remains the case The hon. Member for Richmond Park (Sarah Olney) declaimed the delay in the corporate tax rise. I remind her, since everyone is widely quoting the Resolution Foundation, that it said that the Government “rightly sought to boost the recovery before turning to fixing the public finances”— and it was right. She was opposed to the measures relating to the freeze on pensions in the Bill and appealed to the experience of ordinary people. Since the amount in question is over £1 million and the average financial savings in this country are something under £7,000, and since the lifetime allowance is itself seven times the median pension pot, I think that she is not using a definition of ordinary people that will be shared by Members of this House My right hon. Friend the Member for Wokingham (John Redwood) talked about the uncertainty involved, and he is right. We are coming out of a pandemic. There is a degree of uncertainty in the economic situation. That is why the Government have delayed, in the way that the Resolution Foundation has applauded, raising tax on corporations in order to start to restore the public finances. That is why it is right that we have taken a fair and balanced approach to this topic The hon. Member for Leeds East (Richard Burgon) spoke in support of his 55% tax rate—not a view shared by the Labour Front Bench. I remind him that HMRC ran a study of the 50% tax rate a few years ago and discovered that it was inefficient, raised far less than had been expected and was distorting tax behaviour. That is not a good recipe The hon. Member for Streatham (Bell Ribeiro-Addy) was concerned about the progressivity of these measures, but, as she will see if she looks closely, both the UK tax system at the moment and the changes themselves are highly progressive The hon. Member for Strangford (Jim Shannon) raised the question about the risk of fraud in schemes. Of course, he is right to note that. He had some concerns about reclaims in the self-employment income support scheme. All I would say is that the scheme is well understood. It is very widely publicised. Guidance has been available on the internet and in many independent bodies for many months. If people have claimed income support through that scheme for which they are in fact not eligible, it is appropriate to reclaim the sum overpaid. That is the principle that we seek to apply elsewhere in the tax system because it, too, is a fair and equitable one Question put and agreed to. Clause 1 accordingly ordered to stand part of the Bill. Clauses 2 to 4 ordered to stand part of the Bill. Clause 5 Basic rate limit and personal allowance for future tax years Question put, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Clause 6 stand part Clause 7 stand part. Clause 8 stand part Amendment 11, in clause 9, page 3, line 35, leave out “130%” and insert “18%” This amendment would reduce the level of the capital allowance super-deductions to the current rate of 18%. Amendment 79, page 4, line 2, at end insert— “provided that any such company which has more than £1 million in qualifying expenditure must also— (i) adhere to International Labour Organisation convention 98 on the right to organise and collective bargaining, (ii) be certified or be in the process of being certified by the Living Wage Foundation as a living wage employer, and (iii) not be liable to the digital services tax” This amendment would, in respect of companies with qualifying expenditure of over £1 million, add conditions relating to ILO convention 98, the living wage and the digital services tax. Amendment 80, page 4, line 2, at end insert— “provided that any such company which has more than £1 million in qualifying expenditure must also make a climate-related financial disclosure in line with the recommendations of the Task Force on Climate-related Financial Disclosures within the 2021/22 tax year” This amendment would, in respect of companies with qualifying expenditure of over £1 million, add a condition relating to climate-related financial disclosure to the conditions that must be met in order for expenditure to qualify for super-deductions. Amendment 66, page 4, line 6, at end insert “, except general exclusion 6” This amendment would remove leased assets from the list of assets excluded from the super-deduction and special rate allowance introduced by Finance (No. 2 Bill). Amendment 67, page 4, line 21, at end insert “, except general exclusion 6” See the explanatory statement for Amendment 66. Amendment 53, page 5, line 15, at end insert— “(11) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons a report— (a) analysing the fiscal and economic effects of Government relief under the capital allowances super-deduction scheme since the inception of the scheme, and the changes in those effects which it estimates will occur as a result of the provisions of this section, in respect of— (i) each NUTS 1 statistical region of England and England as a whole, (ii) Scotland, (iii) Wales, and (iv) Northern Ireland, (b) assessing how the capital allowance super-deduction scheme is furthering efforts to mitigate climate change, and any differences in the benefit of this funding in respect of— (i) each NUTS 1 statistical region of England and England as a whole, (ii) Scotland, (iii) Wales, and (iv) Northern Ireland.” This amendment would require the Chancellor of the Exchequer to analyse the impact of changes proposed in Clause 9 in terms of impact on the economy and geographical reach and to assess the impact of the capital allowances super-deduction scheme on efforts to mitigate climate change. Amendment 78, page 5, line 15, at end insert— “(11) Expenditure shall not be qualifying expenditure under this section if it is incurred by a member of a group which is required to publish a tax strategy in compliance with Schedule 19 of the Finance Act 2016, unless any tax strategy published in compliance with that Schedule after the coming into force of this Act includes any relevant country-by-country report. (12) ‘Country-by-country report’ has the meaning given by the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (13) A country-by-country report is relevant if it— (a) was filed or required to be filed by the group in compliance with those Regulations on or before the date of publication of the tax strategy, or would have been so required if the head of the group were resident in the United Kingdom for tax purposes, and (b) has not already been included in a tax strategy published by the group.” This amendment would require large multinationals accessing super-deductions to make their country-by-country reporting public. Clause 9 stand part Clause 10 stand part Clause 11 stand part Clause 12 stand part Clause 13 stand part Clause 14 stand part Amendment 55, page 85, line 10, in schedule 1, leave out from “period if it is” to the end of line 30 and insert— “a related 51% group company of that company in the accounting period as defined by section 279F of CTA 2010.” This amendment would prevent the introduction of a new definition of “associated companies” for the purposes of the small profits rate and uses an existing provision instead. Amendment 56, page 93, line 29, leave out paragraph 11 See the explanatory statement for amendment 55. Amendment 57, page 94, line 5, leave out sub-sub-paragraph (a) See the explanatory statement for amendment 55. Amendment 58, page 94, line 14, leave out sub-paragraph (3) See the explanatory statement for amendment 55. Amendment 59, page 94, line 22, leave out paragraphs 15 to 17 See the explanatory statement for amendment 55. Amendment 60, page 95, line 5, leave out paragraphs 20 and 21 See the explanatory statement for amendment 55. Amendment 61, page 96, line 44, leave out paragraph 30 See the explanatory statement for amendment 55. Amendment 62, page 97, line 22, leave out sub-sub-paragraph (e) See the explanatory statement for amendment 55. New clause 1—Eligibility for super-deduction— “(1) Only employers that meet the criteria in subsection (2) shall benefit from the provisions relating to capital allowance super-deductions in sections 9 to 14 (2) The criteria are that the employer— (a) recognises a trade union for the purposes of collective bargaining with its workforce, and (b) is certified by the Living Wage Foundation as a living wage employer.” This new clause would ensure that only employers that pay their staff the living wage and recognise trade union(s) would be eligible to receive the capital allowance super-deductions. New clause 2—Commencement of super-deduction provisions (report on the benefits)— “(1) Sections 9 to 14 shall not come into force until— (a) the Secretary of State has commissioned and published a report that sets out the expected benefits of the capital allowance super-deductions in this Act, and (b) the report has been debated and approved by the House of Commons (2) The report in subsection (1) must consider what the economic and social benefits would be of making the capital allowance super-deductions contingent on employers meeting criteria relating to— (a) reducing their carbon emissions, (b) tackling the gender pay gap, (c) paying the right amount of tax and not using avoidance schemes, (d) paying the living wage to all directly employed staff, and (e) recognising trade unions for the purposes of collective bargaining.” This new clause would mean that sections 9 to 14 could not come into force until the Government had published a report examining the economic, social and environmental effect of the capital allowance super-deductions and that report had been agreed by the House of Commons. New clause 6—Commencement of super-deduction provisions (report on existing capital allowances)— “(1) Sections 9 to 14 shall not come into force until the conditions in subsection (2) are met (2) The conditions are— (a) the Public Accounts Committee has reported on the effectiveness of the existing capital allowances listed in section 2(3) of the Capital Allowances Act 2001, and (b) at least one week after the publication of the report in paragraph (a) both Houses of Parliament have agreed that sections 9 to 14 shall come into force.” This new clause would set the following conditions before clauses 9 to 14 of the Bill come into force: that the Public Accounts Committee prepares a report on the effectiveness of existing capital allowances, and then that both Houses of Parliament approve the clauses coming into force. New clause 9—Equalities impact assessment of capital allowance super-deductions— “(none) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons an equalities impact assessment of the provisions sections 9 to 14 of this Act, which must cover the impact of those provisions on— (a) households at different levels of income, (b) people with protected characteristics (within the meaning of the Equality Act 2010), (c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, (d) equality in different parts of the United Kingdom and different regions of England, and (e) child poverty.” New clause 13—Review of impact of sections 6 to 14— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by sections 6 to 14 and schedule 1 and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) business investment, (b) employment, (c) productivity, (d) GDP growth, and (e) poverty (3) A review under this section must consider the following scenarios— (a) the United Kingdom reaches an agreement with OECD countries on a minimum international level of corporation tax, and (b) the United Kingdom does not reach an agreement with OECD countries on a minimum international level of corporation tax (4) In this section— “parts of the United Kingdom” means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause would require a report comparing scenarios in which (a) the United Kingdom reaches an agreement with OECD countries on a minimum international level of corporation tax, and (b) the United Kingdom does not reach an agreement with OECD countries on a minimum international level of corporation tax on various economic indicators. New clause 17—Review of impact on corporation tax revenues of global minimum rate of corporation tax— “The Chancellor of the Exchequer must within six months of Royal Assent lay before the House of Commons an assessment of the effect on corporation tax revenues in 2022 and 2023 of a global minimum corporation tax rate set at 21%.” This new clause would require the Government to publish an assessment of the revenue effect of a global minimum corporation tax rate of 21%. New clause 19—Review of impact of sections 6 to 14 (No. 2)— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by sections 6 to 14 and schedule 1 and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) business investment, (b) employment, (c) productivity, (d) GDP growth, and (e) poverty (3) A review under this section must compare the estimated impact of corporation tax rate changes in this Act with the impact on investment from the changes to the corporation tax rate in each of the last 12 years (4) In this section— ‘parts of the United Kingdom’ means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics” This new clause seeks a review of the estimated impact of corporation tax rate changes in this Act with the impact on investment from the changes to the corporation tax rate in each of the last 12 years on various economic indicators. New clause 20—Review of impact of section 7— “(1) The Chancellor of the Exchequer must review the impact of section 7 and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) the link between corporate profit rates and ownership, and (b) the cost of re-introducing a small profits rate.” This new clause seeks a review of corporation tax provisions on (a) the link between corporate profit rates and ownership, and (b) the cost of re-introducing a small profits rate. New clause 21—Review of impact of sections 6 to 14 (No. 3)— “(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by sections 6 to 14 and schedule 1 and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider the effects of the provisions on— (a) progress towards the Government’s climate emissions targets, and (b) capital investment in each of the next five years (3) A review under this section must include— (a) the distribution of super-deduction claims by company size, and (b) estimated tax fraud (4) In this section— ‘parts of the United Kingdom’ means— (a) England, (b) Scotland, (c) Scotland, (d) Wales, and (e) Northern Ireland; and ‘regions of England’ has the same meaning as that used by the Office for National Statistics.” This new clause seeks a report on the impact of the super deduction on (a) progress towards the Government’s climate emissions targets, and (b) capital investment in each of the next five years. A review under this section must include (a) the distribution of super-deduction claims by company size, and (b) estimated tax fraud. New clause 24—Review of super-deductions— “(1) The Chancellor of the Exchequer must review the impact of sections 9 to 14 and schedule 1 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act, and then annually for five further years (2) A review under this section must estimate the expected impact of sections 9 to 14 and schedule 1 on— (a) levels of artificial tax avoidance, (b) levels of tax evasion, reducing the tax gap in each tax year from 2021–22 to 2025–26, and (c) levels of gross fixed capital formation by businesses in each tax year from 2021–22 to 2025–26 (3) The first review under this section must also consider levels of usage of the recovery loan scheme in 2021.” This new clause would require the Government to review the impact of the provisions relating to super-deductions and publish regular reports setting out their findings.
Clauses 6 to 14 and schedule 1 establish the charge and set the rate of corporation tax at 19% for the financial year beginning in April 2022, and establish the charge and increase the rate of corporation tax to 25% for the financial year beginning in April 2023. They also introduce a small profits rate at 19% for companies with profits of £50,000 or less, with marginal relief for companies with profits between £50,000 and £250,000; and they increase the diverted profits tax rate by 6 percentage points, in line with the increase in the main rate of corporation tax. Finally, they introduce a capital allowance super-deduction for investments in plant and machinery At 19%, the current rate of corporation tax is the lowest headline rate in the G20 and significantly lower than in the rest of the G7. However, given that the Government have used the full weight of the public finances to support businesses during the pandemic, protecting thousands of businesses with more than £100 billion-worth of support, it is right that, as the economy rebounds and businesses return to profit, they share in the burden of restoring the public finances to a sustainable footing. That is why the Chancellor announced at Budget that the rate of corporation tax will increase to 25% from April 2023, after the economy is forecast to recover to its pre-pandemic level While many businesses are struggling now and the Government are continuing to provide support for them, others are sitting on large cash reserves. To unlock those funds and support an investment-led economic recovery, from April 2021 until the end of March 2023 companies will be able to claim a 130% capital allowance super deduction on qualifying plant and machinery investments. This super-deduction makes the UK’s capital allowance regime truly world-leading, lifting the net present value of our plant and machinery allowances from 30th in the OECD to first Given the number of amendments and the number of speakers, I will try to keep my remarks relatively brief. Clause 6 sets the main rate of corporation tax at 25% from April 2023. The OBR forecasts that this will raise over £45 billion in the next five years. It should be noted that 25% is still the lowest headline rate in the G7—lower than in the United States, Canada, Italy, Japan, Germany and France. The clause also sets the main rate of corporation tax at 19% for the financial year beginning on 1 April 2022. That means the higher rate will not come into force until well after the point when the OBR expects the economy to have recovered to its pre-pandemic level To protect businesses with small profits from a rate increase, clause 7 and schedule 1 introduce a small profits rate for non-ring fence profits for the financial year beginning 1 April 2023. As a consequence, only around 10% of actively trading companies will pay the full main rate Clause 8 makes changes to increase the rate of diverted profits tax to 31% from 1 April 2023, along with apportionment provisions for accounting periods straddling the commencement date. This will maintain the current differential between the main rate and ensure the diverted profits tax remains an effective deterrent against profits being diverted out of the UK Clauses 9 to 14 make changes to encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now. Clause 9 introduces new capital allowances available for expenditure incurred by companies between 1 April 2021 and 31 March 2023. These include a 130% super deduction for new main rate plant and machinery and a 50% special rate first-year allowance for new special rate plant and machinery Business investment fell by a record £12 billion between the first and second quarters of last year. Making capital allowances rates for plant and machinery investments more generous has the effect of stimulating business investment and enhancing productivity. As firms invest, they create new, or substitute better, assets for use in production. That increases labour productivity, as workers produce more output per hours worked through the use of new equipment that enables faster, higher-quality outputs. The measure will greatly benefit British companies of all sizes, including those investing more than the £1 million annual investment allowance threshold, which are responsible for around 80% of total plant and machinery capital expenditure. The changes made by clauses 9 to 14 will allow all companies to reduce their taxable profits by 130%, or 50% up front, all in the first year—a cash-flow benefit powerful enough to encourage businesses to invest now. We expect the measure to cost around £25 billion over the scorecard period Opposition Members have tabled a number of amendments to clauses 6 to 14. Amendments 55 to 62 propose the removal of the associated companies rules that apply to the small profits rate. The rules will affect a small proportion of companies, but they are an essential feature of the regime to prevent profitable businesses from fragmenting in order to take advantage of a lower rate or creating unfair outcomes, and they were a feature of the previous regime on which these rules are based. In the absence of the rules, a consultant, for example, could provide his or her services through five companies with profits of £40,000 each and benefit from the small profits rate. I cannot believe that Opposition Members, or indeed any Member, would support that form of avoidance: restructuring in order not to pay the tax Several of the new clauses call on the Government to publish a review of the impact of these clauses and potential alternative policy approaches. The Office for Budget Responsibility considers the impact of policy changes in its fiscal forecasts and sets them out in its “Economic and fiscal outlook”, which is published alongside the Budget. Therefore, I can reassure Opposition Members that new clauses 17 and 20, which request reviews into the revenue impacts of a potential global minimum tax rate and the impact of the small profits rate, are not necessary New clauses 13, 19 and 21 request reviews into the investment and various economic impacts of clauses 6 to 14 across the UK. The economic impacts of the clauses have been reflected in the OBR’s forecasts published in its “Economic and fiscal outlook”, as were the impacts of reductions in the rate of corporation tax. The fiscal impact of any future agreement on international tax reform will be reflected in subsequent “Economic and fiscal outlook” documents Opposition Members have also tabled several amendments relating specifically to clauses 9 to 14. Amendment 11 would reduce the level of the super deduction to the current writing down allowance of 18% for main rate assets. That would have the effect of removing all the benefit conveyed by this groundbreaking new policy for shorter-life assets, while the benefit of a 50% first-year allowance for longer-life assets would remain. That would distort investment behaviour in favour of longer-life assets and reduce the positive benefits of the policy Various other amendments seek to restrict the relief only to certain companies, or require companies that claim the super deduction to meet more burdensome conditions than would be required for other first-year allowances. The super deduction is an intentionally broad-based tax relief, designed to ensure that as many companies as possible are able to benefit from this very generous policy, in order that they can invest in their own future to drive the economic recovery. Regarding a new requirement for country-by-country reporting, I am pleased to say that this Government have championed tax transparency both at home and abroad. That is demonstrated by the requirement introduced in 2016 for large businesses to publish their annual tax strategy, containing detail on the business’s approach to tax and how it works with HMRC. However, the Government continue to believe that only a multilateral approach to public country-by-country reporting with wide international support would be effective in achieving transparency objectives and avoiding disproportionate impacts on the UK’s competitiveness, or distortions regarding group structures. The Government firmly believe that that should remain voluntary and that no further legislation is needed unless and until public country-by-country reporting is agreed on a multilateral basis New clauses 2 and 6 would have the effect of delaying the super deduction, but to delay the policy now would be highly irresponsible and would risk holding up the economic recovery that the policy will help to stimulate. The likely real-world effect of delaying the implementation of the super deduction would be that businesses would delay investment until they had certainty on whether the super deduction would be available. At a time when investment is most needed, delaying the implementation of the super deduction would thus have negative impacts on employment, growth and wages. Various other amendments would delay the measure, narrow its scope or replicate existing analysis and safeguards, and I urge the Committee to reject them.
I rise to speak to the amendments and the new clause in my name, that of the Leader of the Opposition and those of my other right hon. and hon. Friends In the preceding debate, we saw how this Finance Bill will hit families, in all their many forms across the country, by making half of all people in the UK pay more tax from next year. As I made clear, the sense of injustice is made all the more acute by the fact that that increase in costs for families comes before any rise in corporation tax and that at the same time, through this Bill, the Government are letting tech giants stop paying tax altogether Clauses 6 to 8 make it clear that the proposed changes to corporation tax will come after increases to the income tax personal allowances, while clauses 9 to 14 centre on the so-called super deduction, a £25 billion tax break targeted at big corporations that the Chancellor has said represents “the biggest two-year business tax cut in modern British history” That tax break forms the centre of the Chancellor’s strategy set out at the Budget, and it comes with a huge cost attached to it. We need to be absolutely clear who will benefit from it One thing is clear: that tax break is not targeted at small and medium-sized businesses. The truth is that such businesses can already benefit from the annual investment allowance, a 100% tax break on investment up to £1 million, which clause 15 extends to the end of this year. The Financial Secretary was very clear in his written statement of 12 November 2020, which announced the extension, that it: “Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.” Indeed, the Treasury Committee concluded in its report published in February, “Tax after coronavirus”, that the annual investment allowance “appears well targeted to promote growth in small and medium-sized enterprises.” The existing allowance is said to be well targeted at the growth of small and medium-sized businesses and, by the Financial Secretary’s own admission, it already benefits 99% of businesses, which will benefit only marginally from the new super deduction. Who does that leave? It is very clear who will be the main beneficiaries of the Chancellor’s new scheme. It will be a tax break for the 1%.
Does the shadow Minister not accept, first, that large businesses are an important component of our economy and we need to increase productivity in those businesses as well as in small businesses, and secondly, that many large industries, such as the aviation industry, have been badly hit by the pandemic and would benefit from the kind of tax allowances proposed in the Bill?
I thank the right hon. Gentleman for his comments, but as I have set out, the annual investment allowance already appears to serve small and medium-sized enterprises well. The super deduction that we are debating now is designed to help companies such as Amazon, which do not need any help with their investment. It is important that we see this in the context of those companies that have done well throughout the outbreak and are already avoiding much of the tax they should be paying. It is no wonder that Tax Watch has nicknamed this the “Amazon Tax Cut”. This giveaway from the Chancellor could wipe out Amazon’s UK tax bill entirely Analysis of Amazon’s accounts from 2019 shows that the corporation’s UK operations made pre-tax profits of £102 million. In the same year, it spent £67 million on plant and machinery, £80 million on office equipment, and £15 million on computer equipment. The super deduction would have enabled Amazon to deduct £211 million from the calculation of its taxable profits— more than enough to wipe out its entire tax liability twice over. It is truly astonishing that, faced with all the challenges of this outbreak, the Government see their priority as giving Amazon a tax break Here and around the world, people agree with us that investment in jobs and growth is what is needed. A tax break for tech giants that already fail to pay what they should is not the answer. That is why our amendment 79 would explicitly prevent the biggest tech firms from taking advantage of the Chancellor’s tax break, as well as other big firms that do not support workers’ rights and the living wage The Government should be improving the lives of Amazon workers, who have helped so many people with deliveries throughout the pandemic, not giving a huge tax break to their bosses. Amendment 79 would prevent Amazon and other tech giants from accessing the super deduction by preventing firms from doing so if they are liable for the digital services tax. When the Government set out their plans for the digital services tax, they made it clear that it would apply to businesses that provide social media platforms, search engines, or online marketplaces to UK users. The detail of that tax means that businesses will be liable when the group’s worldwide revenues from these digital activities are more than £500 million, and when more than £25 million of these revenues are derived from UK users We are clear that those big corporations that should be caught by the digital services tax are among those that absolutely should not be benefiting from the Government proclaim as the biggest business tax cut in modern British history. We know that Amazon has brazenly made it clear that it will dodge the bill from the digital services tax by passing the cost on to its marketplace sellers. The fact that it is not even paying the tax that was designed for it to pay makes the prospect of a further massive tax cut from the Chancellor even more galling Furthermore, as well as excluding big corporations on the basis of their being liable for the digital services tax, we are seeking to use our amendment to stop those big businesses that do not support workers’ rights and the living wage from accessing the tax break. Both conditions would also catch Amazon and would also require other big businesses—those that are not liable for the digital services tax—to respect the right to organise and collective bargaining, and to be certified, or be in the process of being certified, by the Living Wage Foundation as a living wage employer When firms stand to benefit from what the Chancellor has called the biggest business tax cut in modern British history, the very least the Government should require of them is that they pay their workers the living wage and respect workers’ basic rights to organise. Alongside this, we propose in amendment 80 that the Government require big firms benefiting from the Chancellor’s tax break to make a climate-related financial disclosure, in line with the recommendations of the Task Force on Climate-related Financial Disclosures Beyond the specific issue of how the biggest corporations are set to benefit from this tax break the most, we have also tabled new clause 24 to reflect the widely-held concerns about the impact of the super deduction on levels of tax avoidance and evasion. As the chief executive of the Resolution Foundation has made clear, investment incentives have been abused for tax avoidance purposes in the past, yet the Government have failed to say or do anything to address widespread concerns that the super deduction is open to fraud and abuse As I mentioned on Second Reading, economists from the Institute for Fiscal Studies have said that the super deduction will “create a risk of tax avoidance and even potentially fraud as companies essentially try to find ways to dress things up as plant and machinery investment” Minsters were unable to reassure us on this point when I raised it last week, so we are asking for the levels of tax avoidance and evasion arising from the super deduction to be reviewed and put transparently before this House It tells us everything about the Conservatives’ priorities that they are taking money from people’s pockets at the very same time as letting tech giants off paying tax altogether. This Government are proposing to wipe out some of the biggest corporations’ tax bills through a £25 billion boon, aimed at the biggest corporations, that the Chancellor has called “the biggest two-year business tax cut in modern British history.” In the face of a struggling economy, a tax break for tech giants that already do not pay enough tax should be the last thing on the Government’s mind. Instead, it is top of their list. They are wrong.
Will the hon. Gentleman give way?
No, let me make some progress The Government are wrong, and that is why we will be voting to stop the Chancellor’s tax break going to the biggest tech firms or other big corporations that do not support workers’ rights and the living wage. We need a fairer tax system and we need investment in jobs and growth. This Government’s Finance Bill fails on both fronts. I urge Conservative Members to show that they understand this, support our amendments today and take a stand against the Amazon tax cut.
I speak in support of clauses 6 to 14 and against the amendments. This Finance Bill needs to be a delicate balancing act. It needs to give immediate support to businesses and individuals while setting a path to rebalance our books in the medium to long term. In my view, these provisions on corporate taxation and the super deduction get that balance exactly right. The Bill defers the increase in corporation tax for two years and applies to only one in 10 businesses at 25%, but at the same time it turbocharges the incentives to invest in business now This country has had a perennial problem with productivity. We need to incentivise and encourage business investment. That business investment will help productivity, growth and innovation, and that is exactly what we need. The OBR has said that it anticipates that business investment will go up by a massive 10% as a result of this measure and, as my right hon. Friend the Minister mentioned in his introductory remarks, we will go from No. 30 in the OECD rankings for attractiveness for business investment to No. 1. That is what we need over the course of the next two years as we turbocharge this economic recovery. We need the economic recovery to be strong.
Does the hon. Lady accept that many of our large companies will lead the way in our export growth as we seek to capitalise on the new markets that will open to us as a result of Brexit, and that to capitalise on that we need new, competitive products and to be productive and competitive on the world stage, which is why we need to encourage investment in firms both large and small?
The right hon. Gentleman makes a very good point. We need to encourage investment across the board in large, medium-sized and small firms. Productivity has lagged and we need to correct that, so I absolutely agree Let me move on to corporation tax. As I have said, we will increase corporation tax but that is delayed for two years. Corporation tax, by definition, is paid only by profitable companies. I am a low-tax Conservative, so I do not normally advocate increasing taxes, but given the exceptional amount of debt that we have rightly accrued and taken on, we need to be fiscally prudent and look to balance our books in the medium to long term. The reality is that we are very sensitive to interest rates and inflation, given the debt we have; so yes, I do think we need to do this, although it goes against the grain. However, as my right hon. Friend the Minister has said, even with the increase to 25% we still have the lowest headline corporation tax rate in the G7. I also want to point out that the measure applies only to the most profitable businesses, those that make £250,000-plus. A small business that makes profits of up to £50,000 will have no change whatsoever in its corporation tax, and businesses in between will have a tapered rate. I believe that this is an unavoidable increase in corporation tax, but it still leaves us incredibly competitive on the international stage, and it applies to only one out of 10 businesses.
Does the hon. Lady accept that, despite the impression being given tonight that we are going to tax firms less and take less money off them, the Red Book indicates that corporation tax take in the economy as a whole will escalate from £40 billion this year to £85 billion by the end of the Budget period? The result will be that we take more tax from firms. Hopefully, those firms will become more profitable and will therefore be paying more tax.
I completely agree with the right hon. Gentleman that all the forecasts show a very substantial increase in the tax take by virtue of this move in corporation tax I believe that we have the right balance. We are increasing corporation tax, but only for 10% of our businesses and only in two years’ time. Importantly, we are also accelerating and incentivising investment in businesses, which will be critical to our economic recovery.
I want to speak to the amendments and, in particular, the new clauses that have been tabled in my name and those of my colleagues. First, I will start with the positives. We very much welcome the planned increase in corporation tax rates. For a number of years, there has been an orthodoxy that lower corporation tax rates are one way to economic growth. There was a period in the 1980s through to about the 2000s when it was possible to make the argument, as many did, that lower taxes could be a route to securing an increased level of foreign and direct investment, and that the resulting increase in economic activity could result in higher tax revenues than might otherwise have been the case. I would like to think that we are all just a bit wiser and more savvy now, given that, in the growth of that period, it is impossible to properly separate out the increase in corporation tax take and the general growth in activity that took place independently Given that we did not see conspicuously high levels of investment or wage growth over that period, except perhaps in boardrooms, and given the condition of our public finances and the importance of public goods as a driver of wellbeing and sustainable growth and prosperity, we consider that this increase, which will apply a new 25% rate on the top 10% of firms, is fully justified. We are relieved that firms will have until 2023 to plan for this move. We believe it was misguided for the Chancellor to try to increase it from 19% to 20% in September, ahead of any recovery starting, beyond the anticipated return-to-trend growth that we are seeing anyway The SNP firmly believes that it is important that our corporate citizens pay their share towards the maintenance and good functioning of the market and the public goods that allow them to flourish. However, domestic corporation tax is only part of that story. If re-elected—obviously, we have elections coming up in Scotland, which I am sure hon. Members are focused on avidly—the SNP Government will be looking to explore the possibility of levying a higher poundage on properties where the owner is registered in a tax haven. That is part and parcel of the package of measures that is needed to ensure that everyone who benefits from participation in the market is making a suitable contribution towards it Further, we believe that the UK must seize the opportunity that this moment presents to work closely with the Biden Administration in the USA. We must heed the call of that Administration’s Treasury Secretary, Janet Yellen, to set a global minimum tax take for companies to ensure the global economy can thrive, based on a more level playing field and the taxation of multinational corporations, and help spur innovation, growth and prosperity New clause 13 would oblige the Government to review the impact of the changes made by clauses 6 to 14 in all parts of the UK, particularly in respect of business investment, employment, productivity, GDP growth and poverty, and to compare the difference in actual and forecast outcomes between having a deal in place with other OECD countries on a minimum level of corporation tax and not Similarly, new clause 19 asks the Government to review these changes but in a way that looks both forwards and backwards. As I said earlier, orthodoxies may change in economics, and the Chancellor’s commitment to increasing the headline rate seems to mark the end of a protracted period of a race to the bottom on corporation tax rates. The Chancellor himself said on 3 March that cuts “might not be the most effective way to drive capital investment up”. On that basis, it is very important that the Government should compare the estimated impact of corporation tax changes in the Bill with the impact of the changes in corporation tax rates that we have seen in each of the past 12 years New clause 20 seeks a review of corporation tax provisions on the link between corporate profit rates and ownership, and the cost of reintroducing a small profits rate. We believe that the lower small profits rate introduces an unnecessary degree of complexity into the tax system. We were unable to find specific costings for the reintroduction of the small profits rate in the OBR policy costings. Instead, they appear to have been rolled into the costings for the overall rate increase. The Treasury should publish details of the revenue forgone through this measure for the purposes of proper scrutiny New clause 21 seeks a report on the impact of the super deduction on progress towards the Government’s climate emissions targets and capital investment in each of the next five years. It is important that we understand properly not just the impact that the super deduction is expected to have but the impact it actually has, because it is one of the most significant spending measures in the Budget and a very significant giveaway to big business The super deduction is poorly targeted, since it applies to physical assets rather than investments in software, for example, and seems to mostly benefit larger companies. Smaller investments are already tax-deductible under the annual investment allowance. OBR analysis suggests that some £5 billion of the super deduction will, in any event, be spent on previously planned investments. It is hard to avoid the conclusion that this measure will benefit larger companies in a way that does not necessarily drive growth in the way that the Chancellor would hope and certainly does not target the small and medium-sized enterprises that benefited from those deductions anyway and are the engine of growth in most parts of these islands When setting policy, it is always a good idea to know what we are doing and why and to have the most solid evidential base for doing so. The fact that we will not put these measures to a vote does not diminish the significance and importance of what we propose. I can assure the Minister that we will return to these matters and will look to the Government to act, even if these matters are not addressed in the final version of the Bill.
One of the biggest challenges that the UK economy has faced for many years is its productivity. The UK has some of the highest-calibre companies in the world, among the smartest and most productive on the planet, but outside the south-east, there are areas of the UK where productivity matches parts of southern Europe. For many years there has been a long tail of companies whose productivity is very poor. There are many causal factors in that, including skills—particularly digital—and infrastructure challenges, which I have focused a fair amount of my time on. One of the key issues is a lack of business investment, and one element of the Bill, which I shall focus upon in my few words, goes right to the heart of tackling that: the super deduction Until March 2023, companies can claim 130% capital allowances, which basically means that for every £1 a company invests, its taxes are cut by up to 25p. I have no doubt that this will prompt investment. Investment is a driver of economic growth. While the UK has performed well on growth over the last decade, it has lagged on investment, so if investment rates can be improved, the UK will do even better The Office for Budget Responsibility estimates that the UK will rise from 30th to first in the OECD world rankings for business investment. That is a very positive thing. Being a beacon for investment is a positive, not a negative; we should not listen to Opposition Members on this. However, such a rise in the world rankings will not be achieved unless there is real scale to this measure. For the two years that it is in place, it is estimated to amount to £25 billion. It would therefore be the largest business tax cut in modern British history, so there is indeed real scale to it When we talk about productivity in this place, there is a danger of speaking in jargon. What people could take away is the message that they will have to work harder, do 40 hours per week instead of 38, or work in a team of six rather than eight but still do the same work. What I know we mean, and what I am talking about, is working smarter, so that there is more economic output for the same input. Investment in new machinery and the latest technology is one way to increase productivity, and the super deduction will increase investment There are amendments ahead of us this evening about measuring the impact of those policies. Those amendments are not necessary as the Treasury always reviews the impact of its policies, but as the Treasury does its work it will be interesting to see the impact of the super deduction on different parts of the country. It will simply reflect the different economic mix that we have in different areas, and some will benefit more significantly than others. I think the policy will be very helpful in the levelling-up agenda.
With the support of a wide range of Members from across the House, I tabled amendment 78. Although we will not put it to a vote tonight, we intend to return to the subject on Report. Sadly, I cannot look the Minister in the eye, but I strongly and sincerely urge him to give the matter proper and serious consideration. A knee-jerk rejection to a practical idea simply because it is proposed by Back Benchers from across Parliament would confirm yet again that the Government listens only to the few—the powerful corporations and influential tax advisers—and ignores the views of most taxpayers in Britain today Boosting investment to stimulate growth is a vital and shared objective, especially as we emerge from the shadows of the pandemic, but the super deduction is both hugely expensive and poorly targeted. With a cost of £25 billion over two years—nearly half the total annual defence budget—the Government must ensure proper value for hard-working taxpayers. Our amendment seeks to target taxpayers’ money more effectively. Every new tax relief, as the Minister well knows, provides a new opportunity for the unscrupulous to identify loopholes and then to shirk their responsibilities and avoid paying their fair share of taxes. Capital allowances have long been fertile ground for tax avoidance. Anybody looking online will find an army of people advertising expertise in classifying expenditure to help companies to exploit the eligibility criteria and so avoid tax. With a super deduction, the opportunities for exploitation are obvious. The tax relief will last for only two years, so it is unlikely to fund the aviation industry or genuinely new capital investment, which takes time to plan and to implement. It will mainly be used to cut taxes for companies that were investing anyway, and those that will benefit most are those that have prospered the most during the pandemic. They are the companies with oven-ready capital investment plans, benefiting from the increased demand that they have enjoyed over the last torrid year—companies such as BT, whose share price rose by 7% on the day the super deduction was announced, or, as others have mentioned, the notorious tax avoider Amazon In 2019, Amazon’s UK turnover was £13.7 billion, but by claiming that its UK sales took place in Luxembourg it exported its profits and avoided corporation tax. It declared only a bit of profit in the UK, as the shadow Minister said, on its warehousing and logistics activities. Its corporation tax contribution was less than 0.1% of its turnover. Analysis by TaxWatch shows that even that miserly contribution would be wiped out with super deductions. It would write off its investment in IT equipment and machinery against its deliberately understated profits. 8.30 pm Does the Minister really intend to fritter taxpayers’ money away on bungs for global companies that do not pay fairly into the system? Jeff Bezos, whose personal fortune rose to $200 billion during the pandemic, and his $1 trillion company are pocketing money from the British taxpayer and flagrantly refusing to pay back into the system. Does the Minister really think that taxpayers support this sort of daylight robbery? Our amendment would provide a straightforward way for the Government to ensure that this did not happen. It would require proper transparency, with multinational corporations showing where they undertake their economic activity and where they make their profits as a condition of eligibility for super deductions The House voted in favour of country-by-country reporting in 2016, as the Minister said, but that power has never been enacted. Our amendment urges the Government to use that power to ensure that this egregious behaviour by companies is visible for all to see, and to ensure that taxpayers’ money is not wasted on those who greedily grasp the nation’s money and assiduously avoid contributing to the public purse. Accepting our amendment would achieve two important objectives. First, it would stop taxpayers’ money being squandered. Secondly, with President Biden pioneering a new global settlement for corporation tax and the EU reaching agreement on country-by-country reporting, it would ensure that Britain played a leading role in developing a fair and responsible global system of taxation.
Following on from my right hon. Friend the Member for Barking (Dame Margaret Hodge), I find it almost incredible that we are having this debate at all, given what we know about the track record of abuse of this type of tax deduction, as she so eloquently pointed out. The Minister is right to suggest that amendment 11, tabled in my name and those of other right hon. and hon. Friends, would have the effect of removing the provision of capital allowance super deductions There has been considerable evidence, and concern, from economic think-tanks and Committees of this House that tax reliefs have failed to deliver their stated objectives and, worse, that they have often had unintended consequences through the creation of perverse incentives. Members have raised example after example in recent years, including the entrepreneurs allowance, the patent box and the tonnage tax, all of which have not only failed in their objectives but lined the pockets of company directors and shareholders, exactly as my right hon. Friend said. Accountants, lawyers and others have been using them effectively for tax avoidance. The scope for perverse incentives and unintended consequences is even greater with these super deductions. If the Chancellor wants a sweetener to go alongside his corporation tax rises, surely at a time of rising unemployment it is more urgent to incentivise job retention through a temporary cut to employers’ national insurance contributions rather than introduce what has been described as this dog’s dinner of untargeted super deductions in clauses 9 to 14 Unlike Ministers, in dealing with business, I do not believe in a something-for-nothing culture. If the Government are giving tax breaks to businesses, the Government, as guardians of the public purse and the public interest, should demand something in return. New clause 1, in my name and those of other hon. and right hon. Members, asks simply that, in return for companies being eligible for these super deductions, they should pay their workers the real living wage and should recognise trade unions for collective bargaining purposes—two simple things that reflect that they are responsible employers I regret very much the Minister’s reference to these as “burdensome” requirements. Paying a decent wage and recognising trade unions are not a burden, but actually things that enhance the role of an individual company. As has been said in debate after debate, even by Government Ministers, in many instances the greater involvement of the workers in a company increases productivity. These are just low barriers for companies to pass. It does not take long to recognise a trade union or to be accredited as paying the living wage. Companies that do not currently meet these extra criteria could easily do so during the passage of this Bill and its enactment I also back the Front-Bench amendments in the name of the Leader of the Opposition, and I pay tribute to my hon. Friend the Member for Ealing North (James Murray). He is right that companies such as Amazon that dodge their taxes and evade their responsibilities to their workers should not be given tax breaks on top. The Chancellor of the Exchequer made much of his compact with unions and business groups over the furlough scheme. This modest new clause 1 puts in legislation the approach I am putting forward. I believe that it is within the spirit of that relationship between Government, trade unions and employers, and I just urge the Government to think again about accepting it New clause 2, in my name and those of other hon. and right hon. Members, combines a request for an evidence base for super-deductions in respect of capital allowances and to explore what economic benefits could be derived from attaching social and environmental conditions to the receipt of super deductions. I heard one hon. Member in this debate say that the Treasury monitors these policies and does indeed review them; unfortunately, it does not Historically, tax reliefs have been introduced, and over the years an accumulation of tax reliefs have never been reviewed and never really been tested for their effectiveness in the way they should be. The Office for Budget Responsibility stated in its March “Economic and fiscal outlook” that the super deductions, as others have said, are expected to cost at least £25 billion in total between 2021-22 and 2023-24. This is a huge commitment, and it is surely in the public interest that we have an assessment of policies’ effectiveness and also ensure they deliver on social and environmental goals In new clause 6, I seek to create an evidence base on which this House can assess the merits and drawbacks of the super deduction policy. The Public Accounts Committee has previously looked into the operation of UK tax reliefs, and its findings painted a worrying picture. These reliefs already cost more than £100 billion a year in forgone tax, and HMRC does not even know how many reliefs exist or monitor their cost, let alone their effectiveness. Let me quote my right hon. Friend the Member for Barking, who is the former Chair of the Committee. She said: “HM Treasury and HM Revenue and Customs…do not keep track of those tax reliefs intended to influence behaviour. They do not adequately report to Parliament or the public on whether reliefs are working as intended and what they cost and whether they represent good value for money.” She went on: “HMRC does not effectively monitor changes in the cost of tax reliefs so is slow in identifying instances where a relief is being exploited for a purpose” beyond what Parliament intended. I think that is an accurate but damning indictment and one that should concern the whole House, but especially Treasury Ministers New clause 6 specifically recommends that the Public Accounts Committee is tasked with reviewing the effectiveness of existing capital allowances and that this House then votes on the clauses that provide for super deductions in the light of that evidence. I urge the Government to get a grip on the whole process of tax reliefs. We have seen how they can be abused. We have seen how ineffective they can be. We have also seen an industry develop, with accountants and lawyers who have profiteered from tax reliefs that the Government have introduced over decades. To add now to that abuse of taxpayers’ money in this way, I deeply regret. I urge the Government to think again. I give the Government this warning: in a few years’ time, if the Bill goes through as it is now, I bet we will be returning to this debate with example after example of how this system has been abused, to all our cost.
I wish to speak to the numerous amendments and new clauses relating to corporation tax changes and the new super deduction As the previous speaker, the right hon. Member for Hayes and Harlington (John McDonnell), will no doubt keenly remember, raising corporation tax was one of the pillars of Labour’s 2019 manifesto. We frequently hear Labour Members expressing the view that big businesses should pay their fair share of tax. I completely agree, and that is why I fully support the Government’s proposals to increase corporation tax with a new maximum rate of 25% for those businesses with profits of over a quarter of million pounds from April 2023. Unlike a rise in income tax or national insurance, which affects taxpayers in a blanket way regardless of personal financial circumstances, corporation tax is only paid when profits are made—no profit, no tax due. And where profits are made, it is of course absolutely right that a proportion of those profits is returned to the taxpayer, because without the infrastructure, education, security and health services that the state provides, those businesses would clearly be much less profitable Members across the House like to champion small and local businesses, and rightly so. These businesses will, in the vast majority of cases, continue to pay the lower rate of corporation tax. In my constituency, we have 2,890 registered businesses, with 88% having fewer than 10 employees. These are not the kind of companies that generally make profits exceeding a quarter of a million pounds a year. The corporation tax rise will only affect the very largest and most profitable businesses. In fact, only 10% of businesses will pay the new higher rate. The Government are right to delay the increase until 2023, as it gives companies time to plan as we emerge from a period of uncertainty, but it is wrong to say that the impact of the pandemic means that the change should not take place at all. Yes, many businesses have struggled during the pandemic, but some businesses have prospered hugely, often due to circumstances for which they can take no credit. Online traders and the big supermarkets have seen their revenues increase substantially purely because other retailers have been legally forced to close. It is therefore right for the Exchequer to recoup some of those additional revenues through taxation. These measures must therefore pass without the proposed amendments, some of which could allow large businesses to restructure to avoid the high rates of tax We all want UK businesses to be profitable, but we also want those profits to result in higher wages, better training and reinvestment in our economy so that profits can be shared fairly across society and not just concentrated among shareholders or the most highly paid executives. In other words, we need businesses to be more productive. Low productivity has been a thorn in the flesh of the UK economy for some time. The proposed super deduction is therefore exactly the measure we need to encourage the reinvestment of profits through large-scale investment, turning crisis into opportunity and setting UK businesses on a new path to innovation, productivity and growth. The OBR has predicted that this will increase business investment by 9% and lift us from 30th in the OECD’s world rankings for business investment to first. This is the right moment for this incentive, when many businesses have been forced to pivot or have seized opportunities presented by the pandemic, and now is the time to invest. That is why I oppose the amendments to the super deduction clauses, which would ultimately delay and reduce its effectiveness Our economy is an ecosystem, with the private sector, the public sector, our communities, individual employees and employers existing interdependently in a multitude of symbiotic relationships. Each element of this ecosystem has obligations and responsibilities to the other parts. For businesses, these responsibilities include paying fair levels of tax and making investment decisions in the best interests of our whole society. It is the Government’s role to encourage businesses to act for the common good. The unamended measures in this Bill will be successful in doing just that.
I wish to speak to clauses 6 and 7 relating to the rates of corporation tax and also to the super deduction Businesses everywhere, of all sizes and in many different sectors, have had an extremely challenging year. As we hopefully move into a time when business as usual can return, I know that Members in all parts of this House are united in wanting to support businesses to flourish once more. But this has also been a year of unprecedented demand on the public finances. Much of that money has been directed towards households in the shape of our furlough and SEISS schemes to ensure that incomes can be sustained and, in turn, to maintain revenue for those businesses providing essential services. Many businesses have seen increases in revenue this year as indirect competitors have been forced to close or prevented from making their goods and services available. Any business that provided a digital or delivery service found an unexpected increase in demand compared with those that provided an in-person service Why should the businesses that have profited from the pandemic not pay their share in restoring the public finances that have been expended on supporting us all through this difficult time? The Liberal Democrats have called for an excess profits, or windfall tax so that those businesses that have done well can contribute their share to the recovery. This could most easily be done by an immediate increase in corporation tax whereby only those companies that have remained profitable would pay it. Instead, the Government propose a sharp rise in corporation tax in 2023. This delayed increase will give larger companies time to rearrange their affairs, potentially limiting the amount of revenue that can be captured by the planned rise. It will create an artificial boost to the economy in the short term as profits are brought forward, to be reported against the lower tax rates of the next couple of years The Government’s changes to corporation tax rates come when the global nature of trade presents a major challenge to national autonomy on tax rates. The Liberal Democrats are in favour of higher corporation tax rates to ensure that businesses are paying their fair share. The challenge to implementing this has always been that we are in competition with other countries attracting investment by setting lower tax rates. I am interested to hear how the Government plan to react to the plans by the new Biden Administration in the United States to set a global floor for corporation tax rates. This is a fantastic opportunity to introduce a fairer and more progressive tax regime in all nations and reduce the options for corporations to reduce tax. I very much hope that the Government will sign up to the Biden plan and set an example to the rest of the world The Chancellor’s most eye-catching announcement in the Budget was the super deduction available to businesses over the next two years to get back 130% of the cost of new plant and machinery. I know that this will benefit many businesses, but I fear that the impact will be more limited than at first appears. First, it creates a cliff edge in investment, especially when coupled with the tax increase in the third year. Secondly, many manufacturing businesses invest for the long term and plan their capital expenditure in 10-year cycles, so a two-year incentive will not make a big change to investment plans. Thirdly, a great deal of equipment is leased rather than bought outright, so investment incentives like these will make no difference It would have been a better policy if the expenditure recovered could have included measures to get our economy to achieve net zero carbon emissions or have included expenditure on training and development to help us to build the high-skill economy that we need. These expenses could then have been claimed by a far wider number of businesses in many different sectors and made a genuine contribution to future prosperity and green growth The Government need to be clear about their business tax policy so that businesses have time to plan and an understanding of how tax policy interacts with an overall strategy to support enterprise and productivity. Many of our business owners feel a real loyalty to their communities and will maintain those connections regardless of the tax rates, but they need to know that this continues to be a country that welcomes entrepreneurs and supports small businesses. Much more can be done in our tax system to support small and medium-sized enterprises, and I regret that the Government have not taken the opportunity to do this. The Liberal Democrats would introduce a tax cut for SMEs and quadruple the annual employment allowance to allow small businesses to employ up to five people without paying any national insurance contributions. The Government have shown a lack of commitment to small and growing businesses in this Bill and no strategy for private sector growth The Liberal Democrats oppose the corporation tax clauses in the Bill because they mean that profitable corporations are not paying their fair share as we recover from this pandemic and the overall provisions do not provide the support we need for small businesses.
I shall speak in favour of new clause 9 in my name, and the amendments and new clauses in the names of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and the Labour Front Bench The thread that weaves through these amendments and new clauses is utter outrage at plans for big corporations, including big firms that do not support trade union rights, that pay below the living wage or that avoid tax, to benefit from the Chancellor’s astonishing super deduction tax break giveaway. In particular, new clause 9 would require a meaningful equality impact assessment of capital allowance super deductions that must cover the impact of those provisions on households at different levels of income; people with protected characteristics; the Treasury’s compliance with the public sector equality duty; and equality in different parts of the UK and different regions of England For most of us, one of the key consequences of the pandemic has been to illuminate far-reaching health and socioeconomic inequalities in many countries. However much this Government try to conjure otherwise, it is just a statistical and factual truth that, as a result of years of cruel Conservative austerity followed by the callous Conservatives’ handling of the covid crisis, the pandemic’s impact has fallen disproportionately on the most vulnerable individuals and along gendered, ethnic, occupational and socioeconomic lines. Inequalities in people’s protection from and ability to cope with this pandemic and its tremendous societal costs have stressed the importance and urgency of the societal changes needed to protect population health and wellbeing. According to the statement issued by independent experts of the special procedures of the United Nations Human Rights Council, condemning the Commission on Race and Ethnic Disparities’ report: “The reality is that People of African descent continue to experience poor economic, social, and health outcomes at vastly disproportionate rates in the UK.” Women—particularly the poorest women, black, Asian and minority ethnic women, disabled women, lone parents and young women—not only have been badly hit by the pandemic, but have suffered for years under this Government’s brutal austerity onslaught. Yet, coming in at an enormous £12 billion for 2021-22, the Chancellor’s announcement of a super deduction on purchases of capital goods by businesses was one of the largest spending items in the spring Budget. In fact, some argue that it is one of the largest single-year tax giveaways ever enacted by a Government. And who will it benefit? Although the Chancellor claimed in his speech that the Government’s response to covid had been “fair”, women, those on low incomes and those from BAME backgrounds stand to benefit the least from the untargeted tax breaks for large companies through the super deduction. We know that more businesses—and larger ones—are owned by men than by women. As such, it is important to recognise there are many potential equalities impacts to business taxation Incentives such as the super deduction are biggest for large firms and the Financial Secretary to the Treasury has admitted that only 1% of firms will benefit this year, as the rest are within the annual investment allowance. How can the Government justify the fact that under this Bill the rich and big business will be treated to mouth-watering tax giveaways and reliefs, despite unclear evidence about whether that will actually create the investment needed The Women’s Budget Group argues that this provision is likely to have “substantial deadweight costs”, bringing forward investment rather than generating new investment. The group also raised the point that it is unnecessarily limited to investment in “plant and machinery”, thereby excluding training and other human capital investments, and missing opportunities regarding the transition to a lower-carbon economy that recognises the economic benefits of spending on the social infrastructure that our public services provide. This goes to the crux of the problems with this Finance Bill, and with the Government’s lack of vision for a green recovery based on intersectional socialist economics and progressive taxation.
It is a pleasure to speak in this debate, Sir Charles. I rise to speak in support of amendment 53, which I hope will encourage the Government to bring some rigour and meaning to their rhetoric of levelling up and the use of taxpayers’ money In a Budget that confirmed £17 billion of spending cuts, relative to March 2020 plans, the Chancellor’s decision to announce the super deduction, equivalent to forgoing approximately 20% of the UK’s corporation tax revenues, was certainly a bold one, particularly as the Financial Secretary noted in November 2020 that the existing annual investment allowance already covers 99% of all UK businesses. The House has heard this evening that the super deduction is a major tax break for the top 1% of UK businesses. We have also heard many concerns that it is a blunt tool in need of significant refinement if its perceived benefits are to be targeted to those in greatest need of support. I also point to concerns that the super deduction will disproportionately benefit London and the south-east of England and that it flies in the face of the Government’s commitment to level up the UK economy I draw the House’s attention to a finding from the Centre for Progressive Policy, which has calculated that, although the super deduction could amount to a tax break worth up to £513 for London residents, it would be worth only half as much in Wales, whose sum benefit is the second lowest of the UK nations and regions, with only Northern Ireland benefiting less on this measure I am afraid that I disagree with other hon. Members who have suggested that the super deduction might, on the contrary, actually benefit and address regional inequality. My fear is the opposite—that the super deduction will, at best, lock in existing regional inequalities and, at worst, exacerbate rather than address the UK’s geographical economic imbalance. That is why Plaid Cymru wishes to amend the Bill to require that the Chancellor considers the impact and geographical extent of the super deduction across all the UK’s nation and regions and would support calls made by other hon. Members this evening that measures should be introduced to establish a deeper evidence base for these changes. Similarly, given the urgent need for climate action and the retooling of the economy for a net zero future, this amendment also requires the UK Government to consider the super deduction’s impact on efforts to mitigate climate change I hope that the Government will incorporate guarantees such as these into the Bill to ensure that we truly do rebuild back better from the pandemic, rather than resuscitate the UK’s deeply flawed pre-pandemic economy. Failure to do so would make it clear that their rhetoric of support for all nations, for the levelling-up agenda and for climate action are no more than fine words and lofty intentions.
It is right, as our hard-working business leaders emerge from the most torrid 12 months, that the Government set a clear course for their understanding of how those businesses will be taxed in future. I would have hoped that it would have been heartening for the people who have been running businesses through these most difficult times to listen in to this debate to hear what Members of Parliament have to say on their behalf. However, personally speaking, I think that most people who run businesses will be rather saddened by what they have heard—largely, a perspective that it is wrong for people to run businesses that are profitable, that there is sin in becoming rich by creating a business that creates products that people want, rather than virtue, and a complete lack of understanding that businesses that make profits are a sign of success, rather than a sign of failure Personally, I am rather in favour of us increasing taxes. When this or any Government seek to increase tax on corporations, I wonder whether they realise that, essentially, they are putting a tax on success—that every pound that we take away from a business, from its profits, is a pound taken away from things that the business owner may do him or herself. They might be radical things, such as investing in and expanding the number of people who work for the businesses, investing in machinery that will make their business more competitive in terms of exports, or lowering their debt so that they are on a more substantial and more stable footing for the long term. Every time a state takes away money from enterprise it is putting at risk the resources those companies have to do those things, and the future success of this country. Therefore the Government were right to consider carefully how to balance a change in corporation taxes, and given what has happened subsequently to the Budget, the Chancellor deserves a bit of a pat on the back for understanding what would be going on in the global realm of corporation tax, as well as the crucial importance of providing some short-term incentive for businesses to invest as we emerge from the recession.
I agree with almost everything my hon. Friend the Member for North East Bedfordshire (Richard Fuller) said about corporation tax. It is a tax on success, and on this side of the House we are all naturally low-tax Conservatives—we believe fundamentally that businesses are most successful when they are left to innovate and grow, and can keep more of the money they earn. However, we also have to accept that that is not the only thing that drives businesses. Globally adaptable businesses that look around the world at where they are going to locate their next manufacturing plant or innovation look at myriad factors: the support available; the skills of the local population; and the infrastructure in place. All of those things cost money. As we have seen during the past 12 months, the Government have gone to great lengths to support businesses. In my constituency, 11,000 jobs have been supported by the furlough scheme. That is money that has helped businesses across Burnley and Padiham prepare and stay ready for when the economy reopens. We are also talking about £20 million in grants so that those same businesses can restart as soon as the economy opens up. All businesses understand that; they understand that responsibility comes with this and the taxation they pay enables them to take part in society in a meaningful way With all that in mind, I agree with the measures my right hon. Friend the Chancellor set out on corporation tax, as a low-tax Conservative. I do so because the Chancellor has struck exactly the right balance in making sure we secure the economic recovery first: we do not look at businesses now as they are just starting to reopen and get trading again and say, “Just because you are profitable, we are going to increase your tax rate immediately”; we look ahead and say, “When the economy has recovered and you are trading as you were pre-pandemic, that is when we will look for you to make a fair contribution to repay some of the support we have been able to put in place.” In Burnley and Padiham, we are heavily reliant on small and medium-sized enterprises—those small innovators. As we recover from the pandemic, we often see the most SMEs and new businesses start up; people who used to work for one company and who may have been made redundant—something may have happened—then start their own businesses. That is why the small profits rate of corporation tax is so important, because it is the incentive those innovators and entrepreneurs need to start their business, to grow, to employ someone else We also have to recognise that one thing we have suffered from historically in the UK, for many, many years, is low productivity, and that has come from a huge lack of investment from businesses. If we are really going to level up across the country, we need to drive investment in growth and utilise the power the private sector has through whatever means are available to us. We know that since 2007-08 there has been a systemic lack of investment, driven by the uncertainty we have had, so that there is a pot of money that so many businesses are sitting on, waiting to be unlocked. That is where the super deduction will prove so important, because it encourages those businesses that have had a stockpile—that have lived with uncertainty for the best part of a decade and so have not been able to invest, as they have not had that confidence. As we emerge from the pandemic, the super deduction gives them the confidence to invest In Burnley, we are talking about aerospace manufacturers, automotive manufacturers and textile makers. The super deduction will help businesses transition to green technology, as we have spoken about. It will help aerospace businesses to move into HS2 and textile companies to move into weaving—we do still make textiles here in the UK All of these things will result in a high-skill, high-wage manufacturing economy here in the UK. So, yes, we need to keep the UK attractive to investment, job creation and new businesses, but we do that through a fair corporation tax system, lower rates for new businesses and using schemes such as the super deduction to drive investment into manufacturing jobs, which are going to be so vital for our future.
I will limit my comments to the super deduction which, as we have already heard today, will be one of the largest single-year tax giveaways ever enacted in the UK. Arguably, some companies’ corporation tax bills will be wiped out entirely for a couple of years My right hon. Friend the Member for Hayes and Harlington (John McDonnell) has already said that the Public Accounts Committee found that tax reliefs cost more than £100 billion a year in forgone tax, but HMRC does not know how many reliefs exist; nor does it monitor the efficacy of such reliefs. That is staggering. Can we be confident that HMRC will know what effect the super deduction will have, and who will actually benefit from it? Many of my small and medium-sized enterprises in Salford would love a super deduction, but sadly it will not benefit them. The Financial Secretary to the Treasury told the House last year that the enhanced annual investment allowance of £1 million already covers the capital expenses of 99% of businesses in the UK, so it seems that this super-relief will overwhelmingly benefit only 1% of extremely large businesses. I would have no problem if such businesses desperately required the relief in order to protect jobs or to invest in our local economies, but let us look at some of the potential beneficiaries. Amazon has benefited from the pandemic, seeing its sales jump by 50%. According to TaxWatch, the company’s latest accounts show that they spent £66.8 million on plant and machinery, £80.4 million on office equipment and £15.3 million on computer equipment in the same year, so the 130% super deduction could entirely account for the pre-tax profits of the company even before any deductions of staff pay awards Similarly, many energy and water companies find themselves also able to wipe out their tax bill. United Utilities spent £1.275 billion on property, plant and equipment in the past two years, compared with a current tax liability of just under £89 million. Electricity North West stated that covid has had a limited impact, and it had a tax bill of £45 million for 2019-20 while investing £449 million in property, plant and equipment. For both companies, it would only take a small proportion of the capital investment to be spent on plant and equipment to use the super deduction to eradicate their tax bill, too Do these buoyant companies really need a super deduction? The answer is no. In the absence of any clear conditions specifying the use of such savings or providing a wider social benefit, such as increasing salaries for workers, investing in decarbonisation or reducing costs for end consumers, I struggle to see the benefits being passed on to anyone other than shareholders I hope that the Government support amendment 11 and new clauses 1, 2 and 6 in the name of my right hon. Friend the Member for Hayes and Harlington and others, as well as the Labour Front-Bench amendments, because there are companies that do need support to help them recover from the pandemic. There is a real need to support long-term, patient investment by industry, but the untargeted nature of this relief, without conditions, is not the best use of public money. In fact, it borders on the obscene.
I shall speak in support of the amendments in the name of the Leader of the Opposition and those in the name of my right hon. Friend the Member for Hayes and Harlington (John McDonnell). The Budget and Finance Bill represent the Government taking steps towards further structuring our economy on insecure, precarious work and deregulation, which will widen income and wealth inequality The Government’s unambitious plan provides neither a foundation for rebuilding our economy nor a plan to tackle the climate emergency that my constituents have called for. They have announced a future cut to social security and a real-terms pay cut for public sector workers at the same time as introducing a super deduction tax cut for big businesses, allowing firms to write off 130% of the value of qualifying capital investment against their taxes When we look across the Atlantic to the US, we see a stark contrast. The Biden Administration have committed to fast-tracking a $1.9 trillion Government-led stimulus package, which is about 10% of the annual output of the US economy and which contained no promises of future deficit reduction. That is alongside a forward-looking plan to spend a further $2 trillion on infrastructure. Biden’s spending plan, in proportion to GDP, is three times the size of the UK’s.
I am grateful for the contributions that have been made to this debate. It saddened me, however, that Labour Members seemed to be reading off a single piece of paper in so many of their speeches. I encourage them not to follow the script slavishly but to actually think about what they say. The hon. Member for Salford and Eccles (Rebecca Long Bailey) put the matter at its most plain when she argued that because 99% of businesses benefit from the annual investment allowance, it meant the super deduction benefited only the remaining 1%. Of course, that is completely wrong. The super deduction benefits all businesses that are in a position to take advantage of the eligible deduction it provides, and that is better than the annual investment allowance. The whole premise of the arguments advanced by the Opposition is wrong. The fact is that tax reliefs are an understood and established part of tax policy; they are not to be thought of merely as giveaways. A raft of international authorities have testified to the benefits of greater investment allowances, including full expensing, and our proposal goes some way beyond that. We need to see it in that context The UK already has a rather competitive intangibles regime, and the productivity challenge that we face as a country is focused on the tangible assets and therefore it is on those that this super deduction is aimed The hon. Member for Ealing North repeated the line about small businesses, but also asked whether the super deduction was somehow extremely vulnerable to exploitation by malfeasant tax actors. I can tell him that the deduction has been very carefully assessed and includes important exclusions, including as to related party transactions and second-hand assets. It also includes a new anti-avoidance provision, which is designed to give it additional protections It is true that this is a country that takes the question of tax avoidance and tax manipulation extremely seriously. The right hon. Member for Barking (Dame Margaret Hodge), who has been a great campaigner in this area, focused on that. Of course I cannot discuss individual taxpayers. No one knows what an individual company’s taxpaying arrangements are. She purported to know—that is her privilege—but I am not in a position to discuss that. None the less, I can tell her that it would be very bad policy indeed for any Government to base tax policy on a single employer or taxpayer. If she thinks that this country has been soft in any respect on tax, let me remind her that we have led the international charge on base erosion and profit shifting, on diverted profits taxes, and on the corporate interest tax restriction. We have put into law a digital services tax and are consulting on an online sales tax. That is not the action of a Government who take these things in any way other than very seriously I join my hon. Friend the Member for North East Bedfordshire (Richard Fuller) in emphasising, as he rightly did, that we need businesses to be as productive, effective and successful as possible, because they are the anchors of successful and effective employment and of the profit generation on which our tax base, and therefore the funding we need to support public services, rely. It does not follow from the fact that the Labour party is confused on corporate taxation that we should not have a policy that supports business in developing, investing and building our collective economic future Question put and agreed to. Clause 6 accordingly ordered to stand part of the Bill. Clauses 7 and 8 ordered to stand part of the Bill. Clause 9 Super-deductions and other temporary first-year allowances Amendment proposed: 79, in clause 9, page 4, line 2, at end insert: “provided that any such company which has more than £1 million in qualifying expenditure must also— (i) adhere to International Labour Organisation convention 98 on the right to organise and collective bargaining, (ii) be certified or be in the process of being certified by the Living Wage Foundation as a living wage employer, and (iii) not be liable to the digital services tax”.—(James Murray.) This amendment would, in respect of companies with qualifying expenditure of over £1 million, add conditions relating to ILO convention 98, the living wage and the digital services tax. Question put, That the amendment be made.
I beg to move amendment 54 in clause 109, page 63, line 14, at end insert— “(1A) An area may be designated as a special area under subsection (1) only when a motion approving the creation of freeport tax sites has been agreed by— (a) Senedd Cymru, (b) the Scottish Parliament, and (c) the Northern Ireland Assembly.” This amendment would require the Treasury to have received consent from the devolved parliaments on proposed freeport measures before introducing the changes proposed by Clause 109.
With this it will be convenient to discuss the following: Clause 109 stand part Clauses 110 and 111 stand part That schedule 21 be the Twenty-first schedule to the Bill Government amendments 43 to 52 That schedule 22 be the Twenty-second schedule to the Bill New clause 4—Eligibility for capital allowances and stamp duty land tax relief for freeport tax sites— “No company shall benefit financially from the provisions of sections 110 or 111 unless the company— (a) recognises a trade union for the purposes of collective bargaining with its workforce, (b) is certified by the Living Wage Foundation as a living wage employer, (c) is taking steps to reduce its carbon emissions, and (d) publishes details of its equality pay gap and has a published plan to reduce disparities.” This new clause would ensure that the benefits of capital allowances and relief from stamp duty land tax for freeport sites apply only to companies that meet certain criteria relating to employment and environmental credentials. New clause 5—Economic impact of freeport tax sites— “(1) Sections 109 to 111 shall not come into force until— (a) the Secretary of State has published a report, commissioned from the Office for Budget Responsibility, and (b) the report has been debated and approved by both Houses of Parliament (2) The report in subsection (1) must forecast the impact of sections 109 to 111 on— (a) Government and local council tax revenues, (b) economic activity in areas directly adjacent to proposed freeports, (c) UK productivity, and (d) the provision of jobs paid at more than the median wage.” The new clause would make the commencements of sections 109 to 111 dependent on the Secretary of State publishing a report that would allow Members of Parliament to assess the economic case for freeports, and on both Houses agreeing that report. New clause 25—Review of freeports— “(1) The Chancellor of the Exchequer must review the impact of sections 109 to 111 and schedules 21 and 22 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter (2) A review under this section must estimate the expected impact of sections 109 to 111 and schedules 21 and 22 on— (a) job creation within the sites designated as freeports and across the UK as a whole, (b) revenue from corporation tax and stamp duty land tax within the sites designated as freeports and across the UK as a whole, (c) levels of artificial tax avoidance and tax evasion across the UK as a whole, (d) levels of criminal activity, (e) the necessary level of staffing for HMRC and the UK Border Force, and (f) departmental spending by HMRC and other departments on enforcement.” This new clause would require the Government to review the impact of the provisions of the Act introducing freeports and publish regular reports setting out the findings.
It is a pleasure to have the privilege of opening the debate on this clause. I rise to speak in support of amendment 54 in my name, which would require the Treasury to have received consent from the devolved Parliaments before it could designate freeport tax sites as outlined in clause 109 Although the amendment will not be pushed to a vote, the very need for an amendment requiring democratic safeguards and devolved consent is sadly indicative of the Government’s disregard for devolution and the interests, rights and ambitions of the devolved nations. It is jarring that today’s debate, and its pursuit of powers, paid for by taxpayers across the UK, is happening despite the Government’s failure to achieve consensus across all four nations of the UK That unilateralism by the Government is not only disappointing but, I would argue, economically self-defeating, as the overwhelming body of evidence, some of which has been gathered by Committees of this place, including the Welsh Affairs Committee, of which I am a member, suggests that freeports will lead to the redistribution of jobs and investment, rather than their creation across the UK, unless the policy is very closely and carefully co-ordinated.
The hon. Gentleman is absolutely right: one of the prerequisites of the opportunity for freeports is to ensure that every part and every region of the United Kingdom of Great Britain and Northern Ireland benefits. Although every hon. Member is right to claim it for themselves, it is important that we all benefit. Does he agree?
I agree with the point that the hon. Member makes. If the freeport policy is to have real benefit and ring true to the rhetoric of levelling up every single nation and region of the United Kingdom, it is clear that no port—or no nation or region—should be disadvantaged by the location of any other. In effect, we cannot have a situation whereby the Government are asking for Welsh, Scottish or Northern Irish taxpayers, along with English taxpayers, to pay for freeports in certain parts of England that may actively disadvantage those in Wales, Scotland or Northern Ireland. If they did, it would appear that the Prime Minister and his Chancellor would be willing to trample over the devolution settlements in pursuit of this freeport master plan The Wales Act 2017 largely devolved the regulation and supervision of ports and harbours in Wales to the Welsh Government, while economic development is also of course a devolved competence. UK Government demands, such as capping the number of Welsh freeports to one—an outcome that would likely lead to an overall reduction in the number of Welsh ports—are direct infringements on the Welsh Government’s responsibility for the Welsh economy It is therefore especially dangerous that Wales cannot count, it would seem, on its Secretary of State to defend its interests at the Cabinet table. Instead, rather than side with Wales’s democratic institutions, the Secretary of State for Wales has threatened that a freeport will be implemented in Wales come what may, including if Wales’s Parliament were to reject such a measure I am conscious that there are others who wish to make perorations on this topic this evening, so I will draw my remarks to a close. I look forward to summing up at the end. Although I will not press the amendment to a vote this evening, I hope that the Minister will consider my remarks and ensure that freeports are established with the consent of all four nations and supported by an engaged public debate. Refusal to do so would be a tacit admission that this Government will not hesitate to trample over Wales’s economic interests and aspirations if they run contrary to the plans drawn up in London.
I rise to speak in support of clauses 109 to 111, schedules 21 and 22 and amendments 43 to 52 The clauses will act in support of the Government’s freeports programme, which is designed to unlock investment in eight regions of England so far, with more to follow in the devolved Administrations. At Budget, following an open and transparent bidding process, the Chancellor announced the locations successful in securing freeport status: East Midlands airport, Felixstowe and Harwich, Humber, Liverpool city region, Plymouth and South Devon, Solent, Teesside, and Thames Freeports will be national hubs for international trade, innovation and commerce, regenerating communities across the UK by attracting new businesses and spreading jobs, investment and opportunity. They will bring together ports, local authorities, businesses and other key local stakeholders to achieve a common goal of shared prosperity and opportunity for their regions. In doing so, they will help in the Government’s ambition—indeed, all of our ambition—to level up areas that have been left behind The Government’s freeports model enables the UK to take advantage of the benefits of leaving the European Union. The Government have drawn on examples of successful freeport programmes all over the world to develop freeports that will attract significant new investment and encourage development across the UK. The model will enable businesses in freeports to draw on benefits relating to customs, planning, regeneration and innovation, as well as the offer of targeted tax reliefs supported by the clauses in the Bill The Government have engaged extensively with ports, local authorities and industry, including through a consultation on the wider programme running between 10 February and 13 July 2020. We have also listened to feedback from a wide range of stakeholders to inform the development of an effective model that will benefit port areas across the UK For the reasons already outlined in the earlier debates, I will confine my remarks to the key points at issue. Clauses 109 to 111 give the Government the power to designate tax sites and, once sites have been designated, to provide relief within those sites for the acquisition of commercial purpose property and new plant and machinery assets, as well as relief on the construction or renovation of buildings.
So far, no freeport has been designated in Northern Ireland, but one of the great fears is that because Northern Ireland remains within the single market rules of the EU, any such measures to set up a freeport could be contested by the EU and the Irish Government because they might give Belfast an advantage over Dublin, for example. How will that issue be resolved, given the terms of the Northern Ireland protocol?
The right hon. Gentlemen raised a very similar question with me on Second Reading and, as he knows, the Government are engaging very closely with the Northern Ireland Executive. I am not in a position to second-guess what the EU may or may not do in that regard, but we have been very clear that we want to put a freeport in Northern Ireland and we want it to be a strong offer comparable to the freeports available elsewhere in the United Kingdom. That is what we will be seeking to achieve.
In passing, I thank the Government for designating Freeport East, which includes Harwich in my constituency, as one of the freeports. I am struggling to find how the tax concessions in this Bill avail us of the new freedoms outside the European Union. Will my right hon. Friend identify how the freedoms in this Bill are in contention with the EU state aid rules on tax subsidies? Of course, that would not apply in Northern Ireland, where the EU state aid rules still apply. The Government might as well be completely honest about this: if there are advantages for England of being outside the EU that we do not have because Northern Ireland is still effectively inside the EU, let us hear about them, because we want to know that we have those advantages in England.
I think my hon. Friend has erred in his logic. It is perfectly possible for us to benefit from the flexibility of setting taxes, as we are, while being able to have a strong agreed offer that satisfies whatever rules may apply in Northern Ireland with the Northern Ireland Executive. They will be of different characters, but there is no reason to think that neither is possible Clauses 109 to 111 give the Government the power to designate tax sites and, once sites have been designated, to provide relief within them for the acquisition of commercial purpose property and new plant and machinery assets, as well as relief on the construction or renovation of buildings. These powers will enable the Government to move quickly to enable businesses to begin accessing the benefits of freeports as soon as is feasible The Government are committed to tackling non-compliance in the tax system, and freeports are not an exception to that. Anti-avoidance and evasion provisions are included in the Bill, and will be taken across further legislation for the individual tax reliefs. In addition, the Government will take further powers to create a robust system of monitoring in freeports and enable HMRC to request relevant information from businesses. This will ensure that public money is being used effectively in pursuit of the regeneration and development of freeport locations Clause 109 will enable the Government to designate the location of tax sites connected to any freeport in Great Britain. The tax reliefs made available as part of the Government’s freeports programme will apply only in these sites, and the Government intend to bring forward legislation to apply these reliefs in Northern Ireland at a later date Bidders submitted initial proposals for their tax sites during the bidding process. The Government allowed up to 600 hectares of tax site space to be proposed, across a maximum of three separate sites per freeport. Tax site proposals were also judged against a set of criteria relating to existing deprivation and unemployment, to ensure tax measures will have maximum impact in regenerating those areas. The Government will now work with the successful locations to approve their tax site proposals. Once the successful bids have completed the full tax site assessment process, the Government will designate the agreed areas as tax sites. From that point forwards, businesses will be able to claim and benefit from the tax reliefs.
I am most grateful to my right hon. Friend; he is being very generous, though whenever I am tackled on a point of logic by a professor of philosophy, I wonder what is going on. But my question is quite an innocent one in this case. In Harwich, there are some businesses very near the tax sites which have been affected by Brexit and would benefit greatly from being included in the tax site. To what extent are the boundaries still adjustable, and is there an issue of principle regarding included businesses that could expand much more effectively? I am thinking of the particular example of a petrochemicals processing business, which exports substantially and would benefit very greatly by being in the tax site. It would generate many more jobs and much more wealth for the United Kingdom.
Of course, the circumstances for each individual freeport site will be, and I am sure are, very different. I cannot comment on the site my hon. Friend describes, but in general the emphasis of the legislation is very much on new investment and new development, rather than on existing or dead-weight investment. It may well be the case that there are businesses that would propose to make substantial new investments and, depending on the freeport in question, it may be possible for them to qualify for some of the benefits associated with that, but, again, it is not possible for me to comment on individual cases Clause 110 and schedule 21 will allow businesses in freeport tax sites in Great Britain to benefit from two new capital allowances: enhanced capital allowances and an enhanced structures and buildings allowance On clause 111 and schedule 22, the clause makes changes to provide for a new relief from stamp duty land tax for acquisitions of land and buildings situated in freeport tax sites in England that are used for qualifying commercial purposes. Relief will be available for purchases made from the date a freeport tax site is formally designated until 30 September 2026 Amendments 43 to 52 amend the provisions introduced by clause 111 and schedule 22 to provide certainty that property investors using sharia-compliant alternative finance are able to benefit from stamp duty land tax relief in the same way as investors using conventional finance. That will be done by taxing the alternative finance intermediary’s acquisition as though it were an acquisition by the investor. The amendments ensure that the tax payable by someone using alternative finance is the same as that which would be payable were the property purchased using a conventional financial product Opposition Members have tabled two new clauses relating to clauses 109 to 111. Among other things, they would place additional eligibility criteria in respect of employment rights, equalities and the environment on the claiming of capital allowances and stamp duty land tax relief in freeports. It is important to say that freeports will deliver tangible benefits that will help to level up areas. By imposing those additional criteria, the new clauses would potentially delay the implementation of these measures by making freeports more complicated for businesses to navigate, and therefore reducing their impact and effectiveness. In any case, the Government have a very strong commitment to reducing carbon emissions, which is why this country was the first major economy to implement a legally binding net zero greenhouse gas emissions target by 2050. The Government will continue to ensure that the role of tax is considered alongside other policy measures needed to meet environmental goals As I have already indicated, freeports will also have an important role in reducing regional disparities. The rigorous assessment of bids that has been undertaken has ensured that tax benefits are available only in areas that require regeneration and would benefit from being a tax site, helping the Government to level up those that have been left behind New clauses 5 and 25 as tabled would have the following effect. New clause 5 would make the commencements of clauses 109 to 111 dependent on the Secretary of State publishing a report that would allow Members to assess the economic case for freeports, and on both Houses agreeing that report. New clause 25 contains a similar request for a review of the impact of clauses 109 to 111 and schedules 21 and 22, and for a report of that review to be laid before the House within six months of the passing of this Bill and once a year thereafter. A robust and transparent bid assessment process, using the criteria set out in the bidding prospectus, ensured that the eight English freeports so far granted all demonstrated a good or better economic case, including a strong economic rationale for their proposed tax site locations In the interest of transparency and accountability, the Government have also published a decision-making note that clearly sets out how sustainable economic growth and regeneration were prioritised in this process of assessment. The Government will publish costings of the freeports programme at the next fiscal event, in line with conventional practice. Imposing an additional economic incentive on top of what has been outlined would only risk delaying the delivery of the programme and therefore the associated benefits of the increased investment and employment Amendment 54 would make the commencement of a freeport tax site in any UK nation subject to approval by the three devolved Administrations. The hon. Member for Ceredigion (Ben Lake) has already introduced that. Let me say to him that tax is first and foremost a reserved matter unless it is specifically devolved. The UK Government have the power to set tax sites that offer reserved tax reliefs across the UK, and Ministers for the devolved Administrations have the power to set devolved tax reliefs. Devolved Ministers will be accountable to their Parliaments for the use of tax instruments under their control in a freeport tax site within their nation under the proposed plans The Government are determined to establish freeports across the UK, not just in England. That is why we are committed to continuing discussions with the Administrations in Scotland and Wales, when their new Governments have been established, and with the Northern Ireland Executive. The Government intend to have a freeport in each nation, and are determined to deliver that as soon as practicable. They will be national hubs for trade, innovation and commerce, regenerating communities across the country. They can attract new businesses and spread jobs, investment and opportunity to towns and cities up and down the UK, which will boost international trade and economic growth.
Wil my right hon. Friend give way?
I am happy to take a third intervention from my hon. Friend.
I am most grateful. Well, it is the Committee stage of a Bill. The hon. Member for Ceredigion (Ben Lake) raised an issue that I had not considered before, which is that the provision of a freeport in a devolved nation might actually reduce the revenue being collected by that devolved Government. Has my right hon. Friend given consideration to that? I cannot see how that would actually happen, but will he give an assurance that there is a means of addressing that if it were to occur?
As far as I am aware, this is a very remote contingency and I see no evidence to suggest that it might be the case in the context that has been described, but I can certainly tell my hon. Friend that, when the Government engage with the Welsh Government, we will be sensitive and open to discussion of the potential economic effects of a freeport in Wales, as one might expect.
It is a pleasure to speak for the Opposition on the clauses relating to freeports. I will speak to new clause 25 in my name and the names of my hon. and right hon. Friends. Before I turn to the detail of our new clauses in this group, I would like to say a little about Labour’s position on freeports and regional economic policy more generally Labour wants to see good new jobs created in every region and nation of the United Kingdom. We want to see genuine levelling up that hands power and opportunity to areas that have been deprived of them for too long. We want an economic policy that addresses the fundamental challenges facing our country and our constituents: ever widening regional inequality, low productivity and low wages in too many places; a social care crisis that threatens the dignity of older people; and an environmental crisis that threatens us all I am afraid that the Government’s approach to levelling up has been far less ambitious. We have seen regions and areas pitted against each other to bid for pots of money, only to find that Conservative Ministers overruled officials and handed funding to already wealthy areas. We have seen nothing to make up for the 11 years of a Conservative Government who have sucked funding and opportunities out of areas that they now say need levelling up. We have seen a total lack of ambition from the Government on supporting a recovery from the coronavirus crisis to build a stronger and more resilient economy. That brings me to freeports and the clauses that we are considering today I think we were all a little underwhelmed when the rabbit pulled from the hat at the end of the Chancellor’s Budget speech last month was the reannouncement of his freeports policy. The Opposition simply do not believe that freeports are the silver bullet for our post-Brexit economy that the Chancellor clearly hopes they are. In fact, the evidence is that freeports are likely to have relatively little impact on overall job creation and are far more likely to move jobs from one place to another. We want every area to flourish, whether or not they have a freeport. We know that Ministers are aware of this problem because they asked potential freeports operators to address it in their bids. Our new clause 25 would require the Government to produce an annual review of the impact of the freeports policy on job creation in freeport sites and across the country as a whole.
I would be grateful if the hon. Lady could tell us whether the Labour party’s position is to support freeports or not to support freeports.
I thank the Minister. I will approach that later in my speech, so I thank him for already guessing what I was going to say We really need some honesty and transparency from the Government on this. The estimates of the job creation benefits of freeports made by their advocates so far have been flimsy to say the least. We also need a proper assessment of the risk of job displacement. If freeports simply move existing economic activity around, they risk doing harm to the economic fortunes of neighbouring areas, with no net benefit to the country as a whole. Indeed, a 2019 report by the UK Trade Policy Observatory found that the main effect of freeports was to divert businesses into a port from a surrounding area, rather than creating new jobs, so it is not just Labour saying this; it is the experts saying it too. That may be especially problematic in areas where freeports are situated near a local authority, or regional or even national borders Our new clause would require the Government to report on tax avoidance and evasion and criminal activity in freeports and to set out the level of additional staffing and resources required by HMRC and other Government bodies. There are long-standing concerns that freeports allow or encourage tax avoidance and evasion, and there is international evidence that freeports have been used for criminal activity. For example, the OECD has stated that there is “clear evidence that free trade zones are being used by criminals to traffic fake goods” The Financial Action Task Force has said that the lack of scrutiny can facilitate trade-based money laundering through relaxed oversight and a lack of transparency. The TUC and others have warned of the dangers to workers’ rights from deregulation in freeports. We need to take these concerns seriously. As a minimum, the Government should commit to trade union representation in the governance of freeports at local and national levels I will now make a few points about the clauses we are considering. First, on the cost of the tax reliefs being introduced, the Government have provided some information on the expected operational costs of HMRC but, as recently as last month, they were unable to estimate the reduced revenue that the Exchequer will receive as a result of these reliefs. I hope the Minister can address that. Clause 110 includes the enhanced capital allowance for plant and machinery spending at 100%, but that is less generous than the 130% super deduction. Presumably, for the period that they overlap, companies will need to consider whether they can claim the super deduction rather than this allowance The Chartered Institute of Taxation has raised a number of concerns about the operation of the stamp duty relief in clause 111. One issue is how exactly freeport tax sites will be designated and whether particular buildings can be identified as either in or out the boundary of the tax site. Can the Minister provide some clarity on joint ventures where there is both commercial and residential development? The Chartered Institute of Taxation points out that the clause, as currently drafted, excludes a common commercial arrangement from that relief. Finally, there is the issue of withdrawal of relief for subsequent non-qualifying activity. A small amount of non-qualifying use can potentially lead to withdrawal of all the relief. Is the Minister concerned that the risk of loss of the full relief in such circumstances could discourage investment To conclude, the Opposition have real concerns about the Government’s freeports policy. If it is going to succeed and bring the sorts of benefit that those on the Government Benches claim, we need to see more detail on the operation of freeports and how the Government plan to mitigate the risks. We need regular monitoring of the effectiveness and the impact on the country as a whole over the years to come, which is exactly what new clause 25 would require the Government to do. If the Government are confident in their policy, they should be confident in allowing scrutiny of how it works in practice. I call on them to support our new clause.
I would like to add my support for the Opposition amendments and to seek a commitment from the Government, while the Minister is here, to allow the Scottish Government after the Scottish elections to move ahead with their greenports adaptation of the freeports concept. Freeports do not require Brexit in order to be brought about, and legitimate questions remain about how much additional economic activity they will actually generate, rather than simply displace from other areas of the economy.
Will the hon. Gentleman give way?
It is very early but yes, of course.
I am most grateful to the hon. Gentleman for allowing me to intervene. There was a freeport in Shannon in the Republic of Ireland before the Republic of Ireland joined the European Economic Community. The tax freedoms that it was granting at the Shannon freeport were significantly curtailed as a result of joining the EEC, because the EEC prevented it from providing those freedoms. That is why we are discussing the question as to whether or not we are using the new freedoms we have, but the fact is we have much more tax freedom outside the EU for freeports than we had when we were in the EU, and hopefully Scotland will benefit from that.
I thank the hon. Gentleman for that intervention, but I think my point still stands. No matter what the spirit of truth might be in his remarks about how constraints were placed on the Shannon free zone, there are freeports in the European Union. Freeports are not something that intrinsically require Brexit of itself in order to be able to be pursued. But certainly I hope there are benefits for Scotland from this. I think those benefits can be manifested best perhaps through the greenports approach, which I would like to expand upon As I say, the Scottish Government have developed their own version, the greenports, which seeks to embrace all the potential benefits that could come through freeports, while aligning that with ensuring the principles of fair work are enshrined, ensuring that workers within the greenports are paid a real living wage and that the reduction of carbon emissions is embedded at the heart of those developments. A re-elected Scottish National party Government will seek to implement those greenports, making public sector support contingent on businesses complying with that fair work first agenda, paying that real living wage and implementing the Scottish business pledge: our values-led partnership between Government and business based on boosting productivity competitiveness through fairness, equality and sustainable employment, and on delivering on concrete plans to reduce carbon emissions in line with supporting the Scottish Government’s ambition to reach net zero by 2045 The Scottish Government proposals for these economic development zones already have widespread buy-in from stakeholders, who are desperate to start bidding to run the greenports. It was heartening to hear from the Minister his commitment to seeing freeports in all parts of the UK. Nevertheless, if the people of Scotland choose to re-elect a Scottish National party Government, the Government need to accept the mandate that comes from that and, if there has been an element of heel dragging, to hasten the process of coming to an agreement on the rules around these proposed greenports so that the bidding can begin immediately Having taken positive steps to end the race to the bottom on corporate taxation, as we heard in an earlier debate, I think it is important that the UK Government do not allow those who take advantage of freeport status to neglect or otherwise elude their obligations to the workforce, to the environment and to the building of long-term, sustainable value in the regions where they are located and the wider economy In the year that the world is coming to Scotland to plan our future at the COP summit, I think it is absolutely fitting that we should be able to develop greenports to demonstrate our ambitions on sustainable, inclusive economic growth as we transition to a net zero economy. A fair, sustainable greenport model can be an exemplar of those values, while adding value to Scottish goods, services and the country’s brand. The UK Government, once the Scottish elections are over, need to get on board with this and back the innovative approach of the Scottish Government model so that we can get the bidding process under way.
The east midlands is one of the regions that was fortunate to benefit from a new freeport in this Budget. Spread across three sites in Leicestershire, Derbyshire and my own constituency of Rushcliffe, we hope to establish a green technology park on the site of one of the UK’s last coal-fired power stations, at Ratcliffe-on-Soar Hearing contributions from the Labour party in recent weeks, and from the shadow Minister just now, we would be forgiven for thinking that, with the arrival of a freeport, Rushcliffe will become some sort of wild west, with disputes over stolen art, organised crime activity and tax avoidance settled with a shoot-out in the drinking establishments of Ratcliffe-on-Soar. Quite a picture, but one that ignores the extensive steps the Government have taken to prevent illicit activity, such as background checks for businesses that want to locate in a freeport, including their beneficial owners, and a register of businesses operating in each freeport site, to which HMRC, the National Crime Agency and Border Force will all have access. Successful freeport bids also had to demonstrate their approach to inventory systems, physical security, personnel security, cyber-threats and international regulations.
New clause 4 stands in my name and those of several right hon. and hon. Members. As I said in the debate on the provisions for super deductions, if the Government are giving tax breaks to businesses, then the Government, as guardians of the public interest, should demand something in return. The provisions in new clause 4, listed as (a) to (d), are modest demands that many Members, especially those on the Opposition Benches, think should be required of all businesses anyway. It is important that public money supports public goods and good public outcomes, like a fair day’s pay for a fair day’s work, like tackling climate change, in which we all—individuals, Government and businesses—must play a role, and like eradicating the gender pay gap, a process this House began over 50 years ago with Barbara Castle’s groundbreaking Equal Pay Act 1970 The Minister referred to those as “complications”. I do not believe that paying decent wages, tackling climate change or overcoming the gender pay gap are complications. I believe they are essential criteria for any policy for the future. If we are to tackle rising poverty—if the Government want to do that—there is an opportunity here to end in-work poverty by guaranteeing the real living wage in companies locating to freeports. We have 4.3 million children in poverty, and most are living in households where at least one parent is in work. Government policy must act to tackle low pay Low pay holds people back and is often linked to insecure work, which is why the Government should also act to end zero-hours contracts. Insecure and low-paid work means insecure housing and instability for children. The Government should put down a marker in this policy for the society we want to be. As things stand, from what we have heard in the debate so far, it is a society for a few to profit and the rest to struggle. This new clause is about hardwiring fairness and justice into our economic system, and about levelling up. It should not be in conflict with any stated aim of the Government, and I hope that they accept the new clause or at least consider the issues about how we tackle this range of policies and use the state to enable that to happen New clause 5 also stands in my name. In its analysis of the Chancellor’s Budget, the Office for Budget Responsibility said of freeports: “Further details have been announced in the Budget but came too late to be incorporated into our forecast. We will return to this in our next” economic and fiscal outlook. So this is policymaking as a leap in the dark. It is not evidence-based, but done on the basis of supposition and, largely, ideology, given what we have heard so far. What I seek to do in new clause 5 is create an evidence base for policy, on which this House can assess the merits and drawbacks of such a policy. There are reasons to be concerned. Many Members of this House will recall the debates about enterprise zones in the 1980s. Those zones did little to benefit local workers and simply transferred jobs and investment, rather than stimulating it. In an assessment of the enterprise zone policies of the 1980s, the Centre for Cities think tank found: “The first two rounds…created 58,000 additional jobs (directly and indirectly), but over 40 per cent of those jobs were created by businesses that had relocated to enjoy the tax cuts” It also found that each job “cost the public purse £26,000 (in 2010-11 prices), which was significantly more expensive than other policies” for job creation that we were being pursued at that time. The same policy was brought back under the Government of David Cameron, championed by the then Chancellor George Osborne. Analysis of those zones by the Centre for Cities showed the jobs supposedly “created” in these zones were often just relocated from elsewhere. Unfortunately, the evidence showed that they were also overwhelmingly low-skilled and low-paid. Tax breaks in underinvested areas are not an industrial strategy. New clause 5 is a simple plea for evidence-based policy making, and one I hope the Government will accommodate in their future discussions I hope the Government will also accept new clause 25 in the name of the Opposition Front-Bench team, because it too demonstrates that evidence-based policy requires policies to be reviewed, and that the evidence base has to be assessed throughout implementation of any particular policy. The case for freeports has not been made and the risks are significant. There are risks of accelerating tax avoidance, and actually doing economic damage to areas neighbouring freeports is a real concern. To leap into a policy with such a lack of evidence and of account taking of past practice is worrying, to say the least This is the last time I will speak at this stage of the passage of the Bill, so I would like to place on record that, after listening to the debates on Second Reading and today, even I am shocked at the undeniable evidence of the scale of corporate capture of this Government, going well beyond anything we have seen under the last two Tory Prime Ministers. The central purpose of this Government, on the basis of these policies—both the super deduction and holding back the corporation tax increase, as well as the freeports—appears to be simply to line the pockets of corporations with taxpayers’ money and to render them free of any effective regulation that would make them accountable to a wider community. I therefore honestly and fervently fear for the future of this country in the hands of this Government.
I rise to speak in favour of the Bill Freeports will play an important role in the Government’s levelling-up agenda, bringing much needed opportunities for economic growth and social mobility to areas that have historically seen low levels of investment and less opportunity. That is why, over the past year, I and my fellow east midlands MPs from both sides of the House have worked hard, alongside our local enterprise partnerships, businesses, local authorities and educational establishments for the east midlands, to become a freeport site. I was delighted by the announcement at the Budget that East Midlands airport will be one of eight ambitious new sites across the UK. This decision will ensure that the east midlands cements itself as a hothouse for innovation and becomes a dynamic environment for innovators, businesses and regulators to generate and test new ideas and technologies Crucially, the freeports will be vital to the development and expansion of local businesses that are the driving force of the east midlands economy, and of the green agenda for the nation. The east midlands, being part of the midlands engine, is also the heartland of the UK’s manufacturing sector, and the freeport will help to transform this manufacturing base through new technologies, creating a whole new industrial sector locally. The extended supply chain across the country will also fully benefit from this through products and services being fed into the business base at the freeport. The impact of this decision will not only be seen in the basic mechanics of what a freeport does to act as a customs hub for imports and exports; it will also create a highly skilled ecosystem, becoming a magnet for inward investment and business expansion, and acting as a springboard for opportunity throughout the region, creating an estimated 60,000 new skilled jobs. As such, new businesses will be attracted to Loughborough and its surrounding towns, seeking to reap the benefits of being situated close to a freeport. Indeed, interest has already been expressed by several organisations in taking advantage of the benefits a freeport would bring, either by moving to the area or expanding locally Loughborough is already home to a flourishing life sciences sector. We have the education powerhouses of Loughborough College with its new T-level centre and thriving apprenticeship scheme, as well as Loughborough University with its degree and above level skills that support business start-up and expansion, often through research and subsequent development of spin-off businesses. We have the physical infrastructure required for incoming businesses at Loughborough University’s science and enterprise park and Charnwood campus, and the educational expertise required to provide both a skilled local workforce ready to take up the new employment opportunities created by the freeport and the research base to drive innovation This is about jobs and livelihoods. It is not a reaction to covid. Freeports were in our manifesto, and I fully support the idea.
I wish to speak to clauses 109 to 111 relating to the powers to designate sites as freeports and associated provisions. This has been a turbulent year for the UK economy, with the expected disruption of Brexit and the unexpected and unprecedented impact of the coronavirus pandemic. Now that we can, hopefully, look forward to the end of the pandemic and its associated lockdowns, it is time for the Government to put forward their bold and radical plans for kickstarting the UK economy to enable growth and skilled employment in all corners of the country The Government have had plenty of time to think about how they plan to deliver the benefits of Brexit that we have all been promised. I expected the Chancellor to jump at the chance to realise those benefits through the Budget and this Bill—and he has delivered freeports. This is it: the big idea, the bold move, the economic leap forward that our freedom from EU shackles has finally granted us. Except, of course, we have always had the freedom to initiate freeports in this country. We last had them in 2012. The reason we have not had them since is that their economic impact has previously proved to be negligible Research into freeports in other countries has shown that they do little to boost exports as opposed to imports, and there is very little evidence that they create new economic activity as opposed to redirecting existing economic activity from elsewhere. This risks trappings thousands of workers in insecure work with reduced rights, in areas with reducing opportunities for alternative employment. Any increased economic performance arising from freeports is therefore unlikely to trickle down to higher living standards in local households and communities What is the plan for economic growth in areas of the UK that are not lucky enough to have been awarded a freeport? The Budget and this Bill are silent on that matter. Elsewhere, the Government have scrapped their industrial strategy, replacing it with a glossy brochure full of photographs but very little content. More seriously, there has been no real attempt to quantify the impact of leaving the EU on UK business and trade, and what that might mean for our economy as a whole We have already seen a big short-term impact on the level of trade across the channel. It will take a while for the full picture to emerge, clouded as it is at the moment by the pandemic and the unwinding of pre-Brexit stockpiles, but there is no doubt that the increased paperwork is an expensive burden on our small businesses—and that is before import controls are introduced and the impact of the scrapping of mutual recognition of professional qualifications has been fully realised The UK economy has a difficult road ahead, and nothing in the Budget or this Bill demonstrates that the Government have a plan to lead us to new sources of productivity or prosperity. The Liberal Democrats are not opposed in principle to freeports, but they are not a sufficient solution to the current challenges of our economy. They fall a long way short of what is required to compensate for our leaving the EU and to restart our economy in the wake of the pandemic. Thank you, Madam Chair.
I am very pleased, Dame Eleanor—if I may address you correctly—to make common cause with the hon. Member for Richmond Park (Sarah Olney) at the outset. We can agree that freeports are necessary but not sufficient to deal with regional disparities and levelling up I am none the wiser from the contribution by the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) whether the Labour party is in favour of freeports or against them. I would just point out to her that I spent a certain amount of my period in opposition, which was a miserable 13 years, as shadow Secretary of State for the regions, and though the Labour party was elected in 1997 with a very sincere determination to reduce economic disparities between London and the other regions of England and the other parts of the United Kingdom, it failed, and those disparities got wider This is a very difficult thing to address, and the answer is that we should use every tool in the box. We should use every tool we possibly can. It is also perfectly clear that all the tools are not available if a country stays in the European Union. Some of the tools were taken away from the Republic of Ireland at its Shannon freeport when it joined the European Economic Community, and it got worse; the notion that tax advantages or tax incentives were artificial tax subsidies was extended Of course, we want to see other tax advantages extended to other parts of the United Kingdom, such as differential rates of corporation tax, which we have extended to Northern Ireland, but only with the permission of the European Union to treat Ireland as a separate entity—which has a double edge to it that we perhaps do not want to pursue. We should be able to do that on a sovereign basis and to bring Ireland into the sovereignty of the rest of the United Kingdom in the longer term I wish to emphasise that the freeport east was very much driven by the need for levelling up. I see my hon. Friend the Member for Thurrock (Jackie Doyle-Price) nodding in sympathy, because she shares this problem. The perception is, “Oh, you’re in the rich south-east. You don’t need any help. It all needs to be directed to other parts of the United Kingdom.” Well, I can tell the House that I have red wall voters in my own constituency. Places like Clacton, Jaywick and Harwich are hard bitten by economic decline. Average weekly earnings in Tendring district, which is Clacton and Harwich, are £556, compared with a GB average of £587, and incidentally below the rate in Liverpool, which is historically regarded as deprived. We have a project that could generate, we hope, 13,500 jobs. The hon. Member for Richmond Park and others are right: we have to make sure that the minimum is substitution and the maximum is additionality. That is the challenge of making sure this works I will concentrate on what is in the Bill. I very much welcome the tax provisions in clauses 109 to 111, but there are bits missing from the Government’s additional proposals. Not mentioned in the Bill are the enhanced structures and buildings allowances, or the lower national insurance contributions, or the business rate reliefs proposed in freeport sites, or the local retention of business rates, so I remain concerned that we are offering only what is allowed under EU state aid rules. I will be grateful if the Minister, when he replies to the debate, addresses those points and says how those other tax reliefs will be provided It is worth mentioning that the Shannon freeport zone was regarded as such a success that it was imitated and adopted by China, which now has a freeport zone programme that it regards as an important enhancement of its economic competitiveness. I ask those who are cynical about freeports to open their minds, to look at the successful freeports and free trade zones around the world, and to learn from them, as well as listening to what one might call the “economic statics”—the people who think everything is about substitution and nothing is about releasing additional creativity I take seriously the points raised by the hon. Member for Erith and Thamesmead about compliance with the necessary conventions, such as authorised economic operator certification, World Free Zones Organisation safe zones rules and the OECD code of conduct for clean free trade zones. Those are all important, but let us recognise that, unless we avail ourselves of all the freedoms available to freeports, they will not deliver the benefits we want. I am reminded that when he was a Back-Bench Member of Parliament, the current Chancellor produced a very interesting report, “The Free Ports Opportunity”, which was published by the Centre for Policy Studies, price £10, which was rather more radical than the Treasury’s current offering. Some of us are a little worried that we will not see that enthusiasm and radicalism. Let us go step by step, let us work incrementally —that is not a criticism, but this is something to build on for the future Let us also recognise that the real benefit of freeports is not the tax incentives, but the customs facilitation. We must have really modern electronic customs systems to make the customs advantages of being in what is called a customs inversion zone real. Otherwise, it becomes a bureaucratic nightmare and we will not get the advantages we should get from it. Also, if it is a bureaucratic nightmare, it is the less savoury elements who benefit, not the legitimate businesses That is the challenge. We have a great opportunity, for which I really thank the Government in respect of my constituency and others. Incidentally, I think the freeports around the United Kingdom—this is a United Kingdom policy—should be working together. I wonder whether the MPs who represent the freeports that have been designated should get together, stop this mutual suspicion—which is understandable, as we have been competing for designation—and start working together to press the Government for the positive changes that will benefit all our freeports in the future.
I will limit my brief comments to freeports. Detailed Government assessments on the operation and impact of freeports are sadly not yet available. As we have heard tonight, the OBR has stated that the announcements made in the Budget came too late to be incorporated into its forecast. If the Government recognise this, they must understand that they have a duty to provide such evidence and legislative reassurance in response to legitimate and wide-ranging concerns on the operation and impact of freeports There are concerns that, rather than complementing a local economy by stimulating the growth of new business, existing businesses may simply opt to relocate to freeports. Certainly, the Government have not made it clear how they will mitigate against the significant geographic movement of jobs away from one area and into a freeport—how they will avoid a wild-west scenario of pitting regions against each other, nor the prospect of lost revenue for local authorities from business rates, for example, if businesses opt to relocate to such a zone. The job creation numbers are equally sketchy. The Chancellor argued back in 2016 that if the UK’s approach performs as well as that in the USA, freeports would create more than 86,000 jobs, but as the Centre for Progressive Policy found, this figure was a cut-and-paste job, being simply the number of people employed in the US free zones adjusted for the relative size of the UK population. There was no data on the labour market impact on specific regional economies or industries, nor any mention of the need for bespoke local skill strategies to feed into this On workers’ rights, the TUC has repeatedly warned about the gradual erosion of workers’ protections in these zones. It stated: “Free ports are a Trojan Horse to water down employment protections”— in a “race to the bottom” Finally, as we have heard tonight, there are real concerns that freeports could create a bonanza for money launderers and tax evaders. Indeed, the EU reported in 2018 that freeports were “conducive to secrecy. With their preferential treatment, they resemble offshore financial centres, offering both high security and discretion and allowing transactions to be made without attracting the attention of regulators or direct tax authorities.” The Government must address these concerns before pressing ahead. To that end, new clauses 5 and 25 would allow the Government to create an evidence base for freeports, which the House can then examine, and new clause 4 would impose standards and protections. If the Government are serious about addressing these concerns and building in clear legal protections, they will support these new clauses tonight.
I commend the Government on the ambitious agenda running through this Finance Bill. It needs to be ambitious because the last year has been a very painful one for us economically. We must do everything we can to foster renewed growth, renewed job creation and, indeed, renewed wealth creation I have listened to the speeches from Labour Members. They raise some important things, but if I seriously believed that this freeport policy was going to undermine workers’ rights and lead to massive non-compliance with health and safety and tax legislation, I would not support it. I am supporting it because I have real ambition for my local community and my area, and I am very proud and pleased that the Thames freeport has been chosen as one of the eight. I assure the House that this is going to be the transformation of Thurrock after a very long time My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) referred to the fact that people often see levelling up in terms of north versus south and we have heard that a lot, but nothing could be further from the truth; in fact some of the most deprived areas in our nation are our coastal communities, so it is absolutely right that freeports should be one of the headline levelling-up policies.
I wish to speak in support of the new clauses and amendments listed earlier by the Minister and in support of the plans to deliver freeports, and the benefits they can bring, across the United Kingdom. This Finance Bill is vital for our recovery plans in the coming months and years. Freeports are intended to be national hubs for global trade and investment across the UK, and to promote regeneration and job creation as part of our levelling-up agenda. Post-Brexit Britain stands to benefit hugely from being able to compete more effectively in a global market and to offer UK-based businesses the chance to take full advantage of new trading opportunities, to expand and to innovate within the UK As a Nottinghamshire MP, I want to refer specifically to the freeport based around East Midlands airport, in conjunction with local plans for a development corporation at the Ratcliffe power station, which is shortly to be decommissioned and the site put to this new use. Taken together, these proposals present a huge opportunity for bringing investment and employment to our region and to my Mansfield constituency. The site at East Midlands airport has a unique mix of logistics and transport connections, with an inter-modal hub bringing together air freight with major road and rail arteries right in the centre of the UK This is a chance for the east midlands and this unique inland freeport model at the UK’s largest pure cargo airport to take full advantage of the Government’s agenda for growth through a green recovery—we hope that green energy can form a big part of the east midlands’ future—and through new technical skills. It can play a key part in our levelling-up agenda and, as my hon. Friend the Member for Rushcliffe (Ruth Edwards) explained, it can help us keep talented people working in our constituencies in the east midlands instead of feeling that they have to disappear to the major cities to find opportunities. The partnership between Nottingham Trent University and West Nottinghamshire College in my constituency can support this development with skills development while equally benefiting from it themselves As the Minister explained, clauses 109 to 111 give the Government the ability to designate sites and offer tax incentives and reliefs at those sites. The sites are fairly and openly assessed, and across the east midlands my colleagues and I are delighted that our area has been successful. We estimate that these plans could bring up to 60,000 jobs to the region over the coming years, and my constituents stand to benefit from that in a big way. We are most grateful to the local authorities, the local enterprise partnerships and the businesses involved in putting the bid together. I ask the Minister to ensure that as much support as possible is available for our region to be able to put together the best possible business case, with advice and support from the Government and from his Department during the next phase It is telling that, before the freeports have even been set up, Labour’s amendments are already seeking to restrict and limit the benefits for businesses that invest in these sites, thereby limiting the potential for growth and job creation for my constituents. The point of these sites is to encourage innovation and investment, but it is typical of Labour Members to put ideology before jobs and livelihoods in working-class communities. They would rather fight for more power for their trade union bosses than for more wealth creation for our region and jobs for my constituents. In fact, it sounded a lot like the shadow Minister, the hon. Member for Erith and Thamesmead (Abena Oppong-Asare), did not really want to see this investment happen at all, despite offering no other suggestions for how Labour would regenerate these communities. The right hon. Member for Hayes and Harlington (John McDonnell), despite all his experience in this place, still has not worked out that it is businesses that create jobs, and that helping business is not an end in itself but a means by which to create more of the jobs that are so vital for areas such as mine that have needed them for a long time, and for our economic recovery after covid. Maybe he will get it one day, but I doubt it I support the Minister and the Government’s approach to delivering the new freeports. I am grateful that they have chosen the east midlands as one of the sites, with its unique location right at the heart of the country and all the potential that that brings for our region, and I will be supporting the Bill in its entirety.
This Finance Bill gives us the freedom to look at freeports around the world and to propose innovative and exciting new possibilities for the UK. Last year I set up the Anglesey freeport bidding consortium, which includes Stena, Anglesey County Council, Bangor University and the North Wales Economic Ambition Board. We have approached our bid by asking the question: what problems could a freeport on Anglesey solve? By looking at the problems, we are building a freeport model that will offer benefits not just locally but globally Our first problem is local. After almost two decades of disinvestment under the Welsh Labour Government, Ynys Môn’s gross value added is now among the lowest in the UK. With large employers such as Anglesey Aluminium and Rehau closing down, it is highly dependent on seasonal tourism. Our island haemorrhages young people every year because there are no quality jobs for them locally. What better place for the Government to use their freeport model to create jobs and opportunity? How better to show levelling up at its most effective Our second problem is national. Brexit has impacted the flow of trade across the central corridor from Holyhead to Dublin. A collaboration between a freeport in Northern Ireland and a freeport on Anglesey would create a virtual special economic zone corridor and significantly improve the customs and trade route between Great Britain and Northern Ireland Our third problem is global. How will we hit our 2050 net zero carbon target, as energy island Anglesey is already leading the way in green energy: we have on and offshore wind farms, tidal energy, solar farms and we are about to establish a hydrogen production plant in Holyhead. We also have the best nuclear site in the UK—Wylfa Newydd. The UK needs innovative solutions, large-scale infrastructure and significant investment to achieve its 2050 target. The exemptions, tax and tariffs incentives, customs facilities and regulatory easements available to freeports would make Anglesey a global, sustainable energy investment base of choice Our final problem is that of re-establishing the UK’s place on a global stage outside of the EU. The competition for global capital is fierce and UK freeports are in competition with those all over the world. Ambitious and forward-looking proposals such as ours will future-proof the UK’s position as a world player. By holistically applying the levers available, the freeport of Anglesey could become the jewel in the UK’s crown.
I thank the hon. Member for giving way. I did not want to cut her off in mid-flow; she is making a brilliant speech. I hope that, when the Government respond to the points being made tonight, they will take the opportunity—I agree absolutely with what she has just said about Anglesey—to affirm that Northern Ireland will be entitled to a freeport and that it will not be blocked because of the arrangements that we have with the protocol and the EU.
I thank the hon. Gentleman Unfortunately, despite all the good reasons I have for bringing a freeport to Anglesey, the Welsh bidding process has not yet started. The Welsh First Minister has cited concerns about economic displacement, but my biggest concern is the economic displacement that will occur when trade that could have come to Anglesey goes instead to one of the eight English freeports announced in the Chancellor’s Budget. Ports such as Liverpool are already six months ahead of us in this process I absolutely support the Finance Bill and the opportunities that it gives the UK now that we are free from the shackles of Europe. I look forward to seeing Anglesey become a freeport, attracting new investment and creating the good, quality jobs that the island so desperately needs and deserves.
I am absolutely delighted to take part in this debate and also to follow my hon. Friend the Member for Ynys Môn (Virginia Crosbie). We share a nuclear power station. I look forward to the fantastic day that we build at Wylfa I must say that the Chancellor has done a remarkable job in supporting the economy during this pandemic. He has also kickstarted the economy without a shadow of a doubt. Economic regeneration and regional economic regeneration does have to come with various—dare I say it?—caveats. I advise extreme caution when shelling out any extra cash to Somerset County Council. I would not spend a penny on it. Somerset County Council is incompetent, profligate and, worst of all, unbelievably pompous. It has failed to get broadband working. It has signed contracts that it does not understand, which has cost the tax payers millions of pounds. It adds absolutely nothing to the development of the local economy, except, unfortunately, hot air. Oh yes, Somerset County Council loves to claim credit for everything, but that is either exaggeration or lies Somerset is run dishonestly and it does not deserve to be taken seriously. My constituency has the biggest infrastructure project in the whole of Europe. Hinkley Point C nuclear power station is taking shape. Who masterminded this local planning? Who carried the burden? It was Sedgemoor District Council. Sedgemoor is one of the four districts that Somerset wants to gobble up in its greedy ambition to become a unitary authority. Why? It is because the district councils do not squander public money. They save it and have shown that they do so year after year. What does Somerset County Council bring to the party? They bring nothing but trouble and, I am afraid, waste. It pleads poverty, and begs for more, but it does not deserve a bean Across the country, our secondary school head teachers are furious with the council for ordering extra cuts that will hurt the most vulnerable children in our society who desperately need all our help. The heads have no confidence in the overpaid oaf in charge of Somerset schools. I do not think that I have confidence in any of them in the council, and I am not sure that I ever had. The staff of Chief Executive Pat Flaherty call him “flat battery”, which is a little worrying. He actually could not start a Dinky toy, let alone regenerate the economy Most people say the council is a waste of space and money—this has been going right across Somerset for the past few months. The public is not being fairly consulted about the unitary dream, which is, I am afraid, a scandal that lies at the door of the Secretary of State of Housing, Communities and Local Government. This is at the heart of the problem. The county chose to bid for change, just as the pandemic started. It is crazy timing. Why the rush? It should have waited. People have suffered because of this, but the Government danced to its tune and postponed the county elections, which were meant to take place next month, depriving the voters of a democratic say. I worry about the state that we are in.
I thank colleagues, not least my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), for a very entertaining and rowdy end to the debate. Let me pick up some of the points that have been raised on this important subject The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) asked about expected revenue for freeports. As she will be aware, it is not really appropriate to comment on that at the moment. These tax sites have not yet been agreed. The revenues, or at least the associated tax costs, are very much site-specific. I am therefore not in a position to comment on that, but of course once the sites have been agreed, the appropriate estimates will be brought forward. The hon. Member for Salford and Eccles (Rebecca Long Bailey) argued—indeed, it was a recurrent theme—that freeports would have the effect of watering down employment protections. The Opposition have no evidence for that viewpoint at all. There is no deregulatory agenda whatever with freeports. Businesses and freeports will have to abide by UK worker and environmental regulations, national minimum wage standards, workers’ rights and the rest of it, just as any other company would anywhere else in the UK The hon. Member for Gordon (Richard Thomson) raised the topic of freeports in Scotland. He did not remind the Committee, but he will be aware, that the Scottish Government originally rejected the idea of a freeport, then rather changed their tune when they saw the local reaction. I encourage him and the Scottish Government, whatever their complexion after the election, to step forward and engage with the Government so that we can agree a freeport in Scotland My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) talked about the different elements, and was worried that somehow the offer had been watered down. I reassure him that, although he did not notice that the structures and buildings allowance is legislated for in the Bill, the employer national insurance contributions relief will be legislated for in a forthcoming Bill and the business rates relief will follow in due course My hon. Friend the Member for Thurrock (Jackie Doyle-Price) rightly talked about the magnificent port at Tilbury. I have visited it myself, and a thoroughly splendid and impressive thing it is too. Finally, my hon. Friend the Member for Bridgwater and West Somerset put in what I think we can all agree was a typically low-key and restrained performance, for which we very much thank him. He put me ineffably in mind of a great moment in a work of literature and film with which I am sure the House will be familiar: “Animal House”. There is a marvellous moment where John Belushi’s future senator John Blutarsky says, “Was it over when the Germans bombed Pearl Harbor?” There is a pause, and someone says, “Leave him, he’s rolling.” That is what I felt we should do with our dear friend the Member for Bridgwater and West Somerset. With that, I will sit down.
It is a pleasure to close the debate this evening. We have had a very beneficial debate on two main points about freeports and regional economic development. We had a very good discussion about the merits or otherwise of freeports for the areas in which they are located, and although I think we will continue to discuss whether any growth of investment generated by the sites will be new, partially new or a substitute for or displacement of economic activity elsewhere, it has been a good debate nevertheless My final point leads on from the question of whether any growth in investment would be new or a reflection of displacement of activity from elsewhere. That is particularly important when it comes to the question of levelling up and addressing regional inequalities and disparities. We still need to discuss that further. One potential solution in Wales’s case, for example, may be to look again at the cap of just one freeport in Wales. Perhaps we should have at least two. I am looking to other Members—perhaps that is one way to address the disagreements we have had tonight. Either way, we have had a very good and beneficial debate and although I do not want to press my amendment to a vote, I hope that the Minister will consider how the Government can better work with the devolved Governments to address some of these concerns and the need to co-ordinate policies for our economic development. I beg to ask leave to withdraw the amendment Amendment, by leave, withdrawn. Clauses 109 to 111 ordered to stand part of the Bill. Schedule 21 agreed to. Schedule 22 Relief from stamp duty land tax for freeport tax sites Amendments made: 43, page 231, line 8, at end insert— “(ca) Part 3A makes provision about cases involving alternative finance arrangements,” This amendment is consequential on Amendment 52. Amendment 44, page 231, line 26, after “sites),” insert “other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,” This amendment is consequential on Amendment 45. Amendment 45, page 231, line 39, at end insert— “3A In section 81ZA (alternative finance arrangements: return where relief withdrawn)— (a) in subsection (1), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”, (b) in subsection (3) (as substituted by Schedule 17 to this Act), at the end insert— “(c) where the relief was given under Part 2 of Schedule 6C, the last day in the control period on which the qualifying freeport land is used exclusively in a qualifying manner.”, and (c) after subsection (6) insert— “(6A) Terms used in paragraph (c) of subsection (3) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule (as modified by paragraph 10A of that Schedule) (6B) Paragraph 10 of Schedule 6C (as modified by paragraph 10A of that Schedule) applies for the purposes of subsection (3)(c) as it applies for the purposes of paragraph 8 of that Schedule.” “3B In section 85(3) (liability for tax), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”.” This amendment makes provision about returns, and liability to SDLT, in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements. Amendment 46, page 231, line 40, leave out “86(2)” and insert “86” This amendment is consequential on Amendment 49. Amendment 47, page 231, line 40, after “tax)” insert “— (a) in subsection (2),” This amendment is consequential on Amendment 49. Amendment 48, page 231, line 41, after “sites),” insert “other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,” This amendment is consequential on Amendment 49. Amendment 49, page 231, line 41, at end insert “, and (b) in subsection (2A), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”.” This amendment makes provision about the payment of SDLT in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements. Amendment 50, page 231, line 44, after “sites),” insert “other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,” This amendment is consequential on Amendment 51. Amendment 51, page 232, line 2, after “81(1A);” insert— “(azab) in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section);” This amendment makes provision about interest on unpaid SDLT in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements. Amendment 52, page 235, line 25, at end insert— “Part 3A Alternative finance arrangements Cases involving alternative finance arrangements 10A (1) This paragraph applies where either of the following applies— (a) section 71A (land sold to financial institution and leased to person), or (b) section 73 (land sold to financial institution and re-sold to person) (2) This paragraph applies for the purposes of determining— (a) whether relief is available under Part 2 of this Schedule for the first transaction, and (b) whether relief allowed for the first transaction is withdrawn under Part 3 of this Schedule (3) For those purposes this Schedule has effect as if— (a) references to the purchaser were references to the relevant person, and (b) the reference in paragraph 3(2)(d) to land held (as stock of the business) for resale without development or redevelopment were a reference to land held in that manner by the relevant person (4) The first transaction does not qualify for relief under Part 2 of this Schedule except where it does so by virtue of this paragraph (5) In this paragraph— “the first transaction” has the same meaning as in section 71A or 73 (as appropriate); “the relevant person” means the person, other than the financial institution, who entered into the arrangements mentioned in section 71A(1) or 73(1) (as appropriate).”—(Jesse Norman.) This amendment makes provision about the operation of Schedule 6C to the Finance Act 2003 (relief from SDLT for freeport tax sites, inserted by Schedule 22 to the Bill) in cases involving certain alternative finance arrangements. Schedule 22, as amended, agreed to. New Clause 25 Review of freeports “(1) The Chancellor of the Exchequer must review the impact of sections 109 to 111 and schedules 21 and 22 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter (2) A review under this section must estimate the expected impact of sections 109 to 111 and schedules 21 and 22 on— (a) job creation within the sites designated as freeports and across the UK as a whole, (b) revenue from corporation tax and stamp duty land tax within the sites designated as freeports and across the UK as a whole, (c) levels of artificial tax avoidance and tax evasion across the UK as a whole, (d) levels of criminal activity, (e) the necessary level of staffing for HMRC and the UK Border Force, and (f) departmental spending by HMRC and other departments on enforcement.”—(Abena Oppong-Asare.) This new clause would require the Government to review the impact of the provisions of the Act introducing freeports and publish regular reports setting out the findings. Brought up, and read the First time. Question put, That the clause be read a Second time.
I am delighted to have secured this important debate on the gender pension gap, which stands at a shameful 40.3%—more than double the gender pay gap of 17.3%. That is truly shocking, and I hope that the debate will both highlight this terrible inequality and perhaps persuade the UK Government to take some fairly straightforward measures to address it if they are truly committed to pension justice and equality We are all aware of the justifications for women’s state pension age being raised, but equalising state pension ages is very different from pension equality. We could simply throw our hands in the air and exclaim that women have always had lower pensions than men, and that is just the way it is, but it need not be this way. It is simply unacceptable that all types of pension provision—whether state pensions, workplace pensions or private pensions—inherently discriminate against women. If they choose to do so, the UK Government could tackle this and thereby tackle the poverty that too many women face in old age. This can wait no longer, as an increasing proportion of women are simply not able to rely on their partner’s income in retirement, and nor should they be required to.
I congratulate my hon. Friend most sincerely on securing the debate. The average woman in her 20s in the UK will have to work almost 40 years longer than her male counterpart to build up the same pension. Indeed, a female saver can expect to have £100,000 less in retirement savings thanks to time taken out of the workplace to raise children. In the previous debate, the Government spoke an awful lot about levelling up. Does she agree that, if the Government are serious about levelling up, the first thing they could do is tackle the injustice of the gender pension gap?
Absolutely. I know that the Minister will be listening intently, and I hope he will take away the reasonable and straightforward suggestions that I will make this evening, so that we can truly level up in the way that the Government say they want to Women born in the 1950s—WASPI women, or Women Against State Pension Inequality—have suffered hugely as their state pension age was accelerated, giving them insufficient time to prepare for retirement. Despite the clamour of outrage, the Government have refused to do anything to address the hardship caused to the women affected. I wish I could say that that policy decision was the only one that targets women in retirement. I wish this was the only measure I could find that has transformed retirement into a time of financial uncertainty and fiscal pressure for women. Sadly, it is a mere continuation of policy choices that have contributed to—indeed, exacerbated—the gender pension gap under which too many women now labour.
The hon. Lady, myself and others in this Chamber have supported the WASPI women the whole way through. Does she agree that there is not only a legal obligation but a moral obligation to deliver for them and that the WASPI women in our constituencies who have contacted us deserve to know that the battle has not ended for them?
The hon. Gentleman is absolutely right. It is impossible, in all conscience, to have any debate about pensions and not mention the plight and difficulties into which the WASPI women have been thrust. Indeed, it would be remiss not to mention them and to pay tribute to the dignified campaign that they have fought and continue to fight Let us take pension credit as an example. The uptake of pension credit is only around 60%—a matter that I have raised repeatedly over the years in the House, urging the UK Government to do more to improve uptake. Doing so could play an important part in helping to close the gender pension gap, since women are much more likely to need to rely on pension credit, which is additional support for the poorest pensioners, as their lifetime earnings tend to be lower than men’s. However, the so-called triple lock on state pensions does not apply to pension credit. This means that the poorest pensioners, who tend to be women, do not have the same income protection as those pensioners who are better off In addition to this gender penalty, the very lowest earners, who we know tend to be women—I keep saying it because it bears repeating—are excluded from building credit on their state pension. Those who have a job earning below the lower earnings threshold get no credit for their state pension at all, and that applies even if a person has more than one job. This exclusion disproportionately hits women hard as they are more likely to be in part-time work. When the Minister gets to his feet, I hope that he will explain why this stubborn inflexibility in the national insurance system has not been addressed and when we can expect this pitfall—that is what it is—to be removed, as it contributes to the impoverishment of women in retirement. The lower earnings threshold should be abolished so that all workers can claim credit for state pension, no matter the level of their earnings The gender pension gap is exacerbated in all sorts of sneaky and labyrinthine ways, some of which most women do not know about due to the arcane nature of the system. The UK Government could fix many of these problems almost at a stroke; why this has not happened is curious For example, even if a woman is not currently in paid work, if she claims child benefit for a child under 12, she will get national insurance credit towards her state pension, and is treated as though she has contributed to national insurance while she claims that child benefit, when her state pension is calculated. Even if her partner’s earnings deem her ineligible for child benefit, she needs to apply in order to get national insurance credit. Who knew If a woman finds out subsequently about this rather silly and pointless method of gender discrimination—well, too bad. She cannot backdate her claim. In addition, research has shown that huge numbers of women simply do not know how child benefit claims affect their state pension calculation. And who could blame them? It would be fairly simple for the UK Government to address this by allowing all women who are looking after their children to claim state pension credit. Why not? What is the obstacle to this change, which could play a part in reducing the shameful gender pension gap? Let me turn to the issue of temporarily leaving the workforce to look after children adversely impacting on a woman’s pension. Workplace pensions discriminate against women, who tend to earn less and to have interrupted careers, meaning that they are active in the workplace for fewer years than men. This means that their workplace pensions are lower, as well as their state pensions. This could be mitigated if the Government introduced a family carer’s top-up, whereby the Government would pay the equivalent of the employer’s contribution—at least at the level of minimum wage—into women’s pensions if they are taking time out as carers. This would equate to around £820 per year and would boost pension outcomes for women by 20% if they took 10 years out of the workforce to undertake caring responsibilities and return to the workforce thereafter. Importantly, research shows that this could close half the pension wealth gap that is created by taking time out of work to care for others—so far, so good It was always traditionally the case that women were forced to leave company pensions if they married or switched to part-time working. I have lost count of the number of WASPI women who have told me that they were forced out of occupational pension provisions when they married. However, we know that women also tended to be less likely even to be offered an occupational pension in the first place due to the types of jobs women traditionally did. Again, we have inherent bias against women’s workplace pensions We also need to remember that some workplace pensions do not aggregate women’s pensions following maternity leave. Not merging periods of pension service means that women have a reduced pension when they retire, relative to their male counterparts. Surely it cannot be beyond the wit of this Government to regulate pension provision so that women’s pension rights can be preserved whilst caring responsibilities are attended to If this litany of how women get a raw pension deal and suffer institutional bias seems to be long, I am afraid it is set to become longer still, because we have not yet considered auto-enrolment. This much-heralded programme to ensure all employers provide workplace pensions leaves out, ignores and simply does not take into account millions of women How can that be? It is actually very simple. Those who earn less than £10,000—again, disproportionately women of course—do not benefit from auto-enrolment and therefore do not benefit from their employer’s pension contribution. Again, it does not matter if someone has two part-time jobs, because if each pays below £10,000, they miss out on auto-enrolment and the employer’s contribution to the pension New research from the Pensions Policy Institute shows that almost half of single mothers are currently ineligible for auto-enrolment—almost half. Does the Minister think that is acceptable? What will he do to persuade his Government to remove the £10,000 earnings limit for auto-enrolment so that the threshold can be reduced to the very first pound earned? When one considers the part that that measure alone could play in helping to reduce the gender pay gap, I can think of no good reason not to do it. If that was not bad enough, those who are auto-enrolled into their workplace pension are often forced to pay an additional 25% for their pensions if they earn between £10,000 and £12,000. Again, that situation tends to affect women disproportionately and is due to the type of pension an employer may use, which operates on a net pay basis. That means that the employee has to pay extra to their pension provider instead of receiving the tax relief they could have in a different type of pension scheme, such as a relief at source scheme. Sadly, it seems that most employers use the net pay scheme, so contributions are collected before tax However, if the relief at source scheme were used, women would benefit from an additional £8,000 in their pensions over their working lives. We have, quite frankly, a disgraceful situation in which women, who are most in need of help in building up their pension pots, are forced to pay more, usually without knowledge of how they are being financially penalised. If we want pension equality, why are the Government not legislating so that employers and pension providers ensure workers are enrolled into schemes that will qualify for tax relief If, after all that, a woman finds herself widowed, her late husband’s life annuity will probably not provide her with any income, meaning that after the shock of being widowed many women are thrown into poverty, financially unprotected. Similarly, if a woman is divorced, she may find herself in poverty in retirement. Indeed, she is more likely to do so. It seems clear that there are institutional, inherent, ingrained and unfair barriers to women being able properly and fairly to build up a pension pot that will offer them protection from poverty in their later years The obstacles, problems and barriers have been set out clearly tonight, and the Minister has been listening to the potential solutions. I urge him to respond to each barrier and to indicate what his Government will do to address the shocking and unacceptable gender pension gap that exposes women to poverty and hardship in their later years, because it does not have to be this way.
It is my mission as pensions Minister to make the UK pensions system safer, better and greener. We are doing that in a variety of ways, ranging from our world-leading climate change and environmental, social and governance reforms, which positively impact pension investments, to taking tough action on scams and unscrupulous bosses, and through our work to make pensions simpler and more easily understood with dashboards, and to tackle inequality I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this important debate. This Government, like previous Governments, recognise that this is an important issue—one that we remain committed to addressing. It is one of the key drivers of the automatic enrolment reforms and the 2016 new state pension reforms, both of which help to address the issue raised. Through automatic enrolment and the new state pension, we are enabling more women to build up pension provision in their own right, reducing historical inequalities in the pension system With respect to the hon. Lady, I submit that automatic enrolment has been a genuine game changer in workplace savings. It has happened over the past nine years, but the work has been done by successive Governments, including a Labour Government, who set up the Turner commission. Automatic enrolment was commenced by the coalition Government in 2012, before the original blueprint was fully rolled out by this Conservative Government in 2018-19. Savings of 8% are now the norm, and 10.5 million employees have been automatically enrolled by more than 1 million employers Overall workplace pension participation for eligible employees has increased by 44 percentage points since 2012, reaching 86% in 2019. It has been especially transformative for women, low earners and young people, who have historically been poorly served by or excluded from workplace pensions. The proportion of women participating in a workplace pension reached 86% in 2019, which is double what it was in 2012. Some 79% of low earners now save into a workplace pension, which is more than double what it was in 2012. Finally, 85% of young people now save into a workplace pension, which, again, is well over double what it was in 2012.
I do not think anybody in this House would quibble with the fact that automatic enrolment has been a success story, but the point outlined by my hon. Friend the Member for North Ayrshire and Arran is that the £10,000 trigger in place discriminates against women. Why do the Government have such an objection to making sure that the trigger kicks in at the first pound, rather than waiting until £10,000, which is so disadvantageous to women?
I am grateful to the hon. Gentleman for raising that point, because I am coming to that specific issue. He will be aware that we conducted a review of automatic enrolment and that we are committed to implementing its findings by the mid-2020s. We intend to remove the lower earnings limit, which will benefit low earners, and for the first time everyone will get an employer contribution from their very first pound of earnings if they are enrolled or opt in. That will improve the incentive to save, especially for women and those individuals working part-time in multiple jobs. In addition, the review also proposed extending eligibility to those aged 18, which will support younger people with the opportunity to start saving earlier for a more secure retirement. Clearly, there is a benefit in the hon. Gentleman’s constituency. In the constituency of the hon. Member for Strangford (Jim Shannon), for example, 7,000 people are currently automatically enrolled, and thanks are due to the thousands of employers who are supporting them in that process.
While the Minister is talking about auto-enrolment, will he say whether he has any concerns about the issue I outlined about the employer using the net pay basis, instead of the relief at source scheme, so that tax relief can be earned?
The hon. Lady raised the RAS—relief at source—issue, which is a legitimate one. It is a matter governed by the Treasury. Obviously, I speak for all the Government, so I can try to address that point. She may have missed it, but in the Budget the Government announced a call for evidence on pensions tax relief administration, in line with the Conservative Government’s manifesto commitment to review comprehensively relief at source tax arrangements. The call for evidence is now closed and the Treasury is continuing to analyse the responses to it. The Treasury will, in the usual way, respond and publish its response shortly. Although the hon. Lady legitimately and rightly raises a matter that, to be fair, is also in the Conservative party manifesto as an issue to be addressed, the Treasury is addressing and has the matter in hand I will briefly touch on the very important issue of the self-employed. We remain committed to developing effective, durable retirement solutions for the self-employed. We commenced trialling a research programme in 2019-20 to test differing approaches aimed at improving retirement savings for self-employed people, looking at the role of behavioural messages and saving mechanisms using financial digital platforms. Some of those trials were paused during the covid pandemic for obvious reasons, but the work is done such that we hope to recommence trials this summer. We are also specifically working with Her Majesty’s Revenue and Customs to incorporate self-employed pension solutions into the Making Tax Digital programme that HMRC is rolling out, which I believe will genuinely assist the issue in relation to the self-employed Turning to the desire to make pensions simpler, more understandable and more practical, we are taking several measures to address that. In particular, the House will be aware of the pensions dashboard, which we took through in the Pension Schemes Act 2021. We are also driving forward the two-page annual pensions benefit statement, which will take the dozens of pages that were very hard to comprehend and make them into a simple two-page statement. We believe simplicity is key. We want all savers to be easily able to understand their pensions savings, so they can plan for the retirement they want. We believe that communications should be designed with savers’ needs in mind to encourage such engagement. Effective engagement will require a continued partnership between the various providers—the Government, the advisory community and the savers in the longer term I also want to outline to the House—I believe it is relevant to this debate—the pilot projects that we are conducting up and down the country on the midlife MOT. This builds on the work of the private sector, in particular Aviva and others, looking particularly at interventions between the ages of 45 to 50. Effectively, it is looking at wealth, work and wellbeing. We have committed several hundred thousand pounds to a number of pilot projects from Cornwall to the north-east and all across the country to ensure that there is a piloting of particular interventions to try to get people engaged with their pensions at an earlier stage and to see whether real differences can be made. I thank the Financial Conduct Authority for meeting me on this issue today as we try to drive forward this innovative change The hon. Lady also raised the state pension and a number of issues in respect of it. She will be aware that the state pension has never been higher in this country. When we came into government, it was barely £66 billion in 2009-10. It is now approximately £100 billion-plus. There is a well over £1,000 real-terms increase by reason of the triple lock. Clearly, pension credit has increased as well. She will also be aware that our reforms have seen the gap reduced between the state pensions of men and women. The new state pension system, introduced by one of my predecessors, corrects some of the historic inequalities of the previous system. Over 3 million women stand to receive an average of £550 more per year by 2030. The state pension outcomes are expected to equalise more than a decade earlier than they would have under the old system. We believe that the new state pension, introduced from 2016, gives equal value to national insurance contributions and credits, providing access to the same level of entitlement for all. There is also a comprehensive framework of credits available when people are out of the workforce, for example caring for children or elderly relatives. This will protect people’s state pension position for those periods We have introduced the “Check your state pension forecast” service, which I strongly recommend. There is also a desire for everyone to find out whether filling any gaps will increase their payments when they reach state pension age. In particular, that should be done in respect of gaps since 2016, because filling in the gaps, by either receiving credits or making voluntary national insurance contributions, could increase state pension The hon. Lady raised a number of additional points that I want to try to address. She raised the campaign on the women’s state pension age increase. Clearly, these were decisions made in the early 1990s and then legislated for, fundamentally on grounds of equality, in 1995. The notice period, I suggest, was several decades. Whatever the hon. Lady’s views or mine, this matter was then taken to the courts, and both the High Court and the Court of Appeal rejected all legal claims of the state pension age campaigners comprehensively, in highly detailed judgments This Government, at the same time, have raised the living wage, increased the personal allowance to £12,570, introduced free childcare, introduced the returners programme and addressed shared parental leave, and spent record sums already on universal credit, disability support and, as I say, state pension I thank all hon. Members for participating in this debate and showing a clear passion for improving pension outcomes for women. I believe that this Government and previous Governments have made progress. I accept that there is more to do and that closing the gender pension gap remains a priority for all Question put and agreed to.