High-income Child Benefit Charge

Lord Mackinlay of Richborough Excerpts

Tuesday 3rd September 2019 Westminster Hall

[Craig Mackinlay (South Thanet) (Con)]

I beg to move,

That this House has considered the high-income child benefit charge.

It is always a great pleasure to serve under your chairmanship, Mr Hollobone.

One might ask why I have brought this debate; it is a fairly obscure area of tax and benefits. I have done so out of the frustration felt by a number of constituents who face the high-income child benefit tax charge and its after-effects and, as a chartered accountant and chartered tax adviser, anything tax-related always rattles my bell. This is a topic of great interest on mumsnet.com and moneysavingexpert.com, which have covered the issue in some depth.

I suppose we must start at the beginning—always a good place to start. Why did we implement this high-income child benefit tax charge, when child benefit had been a universal benefit, enjoyed by all, for very many years? The issue was first raised in October 2010 by the then Chancellor, George Osborne, and it was one of the measures used to try to get some more savings for the Treasury after the simply appalling state of the nation’s affairs that we were left with after the 2010 election.

The legislation was first mooted in the 2012 Budget, and it came into effect on 7 January 2013. That in itself was a bizarre date to choose, and one might ask why it was not simply started on 6 April in the next available tax year, which might have made life a little simpler. I have not found figures for how much the clawback and the lack of take-up of child benefit have saved the Treasury, but I estimate it to be somewhere in the region of £2 billion to £3 billion a year—certainly a very useful amount to fill up the hole left by Labour in 2010.

The charge applies above an adjusted net income of £50,000. Adjusted net income is not the usual measure of what we anticipate to be our taxable profit or income; it is the gross income from all sources, less gift aid and pension contributions. It does not include personal allowance. In very simple terms, if a pay-as-you-earn employee has a gross income of £50,000 before personal allowance, they would start to feel the effects of the high-income child benefit tax charge.

The way it works is that there is a clawback of 1% of child benefit for each £100 of additional income over the £50,000, so by the time someone has an adjusted net income of £60,000, all that child benefit is tapered away. It sounds complicated even trying to lay it out in the simple terms that I have, but one thing that comes out of this is that it is a salutary lesson in how not to withdraw a universal benefit through the tax system. What we have on the statute book, which runs to many tens of pages of tax law, is the truly mad basis of trying to claw back a benefit. It is not related to overall family income, which many people describe as one of the real drawbacks of the system.

Let me give an example. Family income is recognised as the measure for most other Department for Work and Pensions benefits. For instance, there is no withdrawal of child benefit for a couple both earning £50,000—the high-income child benefit tax charge does not apply, even though the family income is a generous £100,000. In another family, in which only one parent is working and earning, say, £60,000, and the other is not working, there would be a full claw-back of the child benefit given. That makes life complicated for people on pay-as-you-earn, who can do nothing about their income, and there is also the issue of fairness. Family businesses, or people in sole trade, perhaps have a greater opportunity for sharing income, splitting income or indeed creating a partnership to split the income down to the golden £50,000, so that there is no loss of child benefit.

I feel that this situation has led to an inherent unfairness in the system, which is one of my concerns. My other concern is the means of collection, and there lies the problem that we have faced. People who recognise that they will not qualify for child benefit can choose simply to disclaim the benefit and not receive it at all. That has been on the rise over the years since the charge has been in place. In 2013, 397,000 people were not claiming the benefit, and the number has now increased to 516,000. That is due to two issues, one of which is fiscal drag—the level has not been raised since January 2013, which is something I will raise later.

Some people are happy and feel that it is to the family advantage to maintain their cash flow—get the money into their bank with the monthly receipt of child benefit, then simply pay it back at the end of the year. Some people do that. However, the real madness in the system—we should have tax systems that make things easier—is that the implementation of these measures forced 500,000 more people into the requirement to fill in a self-assessment tax return. It is a huge bureaucratic cost to taxpayers, and managing the system must also be a significant cost to Her Majesty’s Revenue and Customs. It is the root of the problem of collection.

Many PAYE employees have had never had to touch the tax system or fill in a self-assessment return. Luckily for them, they have been merrily ignorant of anything to do with tax. It is all done at source by their employers—if they have no further complicated tax affairs, they need do no more. The current situation has been a particular hardship for these taxpayers. They might not have spotted the advertising that was fairly extensive at the time. They perhaps received less than £50,000 at the time, but over the years their income has crept over that figure due to wage rises and better business.

I have raised this issue for a couple of my constituents and pursued it with great vigour. I have argued with HMRC that the information about which PAYE employees would face this charge is well known to Government through the real-time information system of payroll that bigger employers have had to implement since April 2012, and was rolled out gradually over time to all employers, even the smaller ones, running a PAYE system. The information was available—primarily to the DWP, so that it can assess whether people in receipt of benefits should not be, but HMRC had access to the system.

I have failed to agree with HMRC’s stance on this. It claims that the arm of Government dealing with the DWP has got no relevance to their arm, which deals with tax. The data has not been shared, even though the arms of Government had the information at their fingertips and could have advised people that they were potentially falling foul of the system. In my arguments to HMRC on behalf of my constituents, I argued for extra-statutory concession A19, which is often used when HMRC makes a mistake—often with the elderly. I saw this very regularly when I was one of the volunteers for Tax Help for Older People in Kent. HMRC has had the information and applied the wrong code across different pensions. Three years later, an assessment turns up. Extra-statutory concession A19 makes HMRC give up that tax if it has been in receipt of information but has not used it properly.

Of the constituents who have been found not to have done what they should have done—registered to do a self-assessment return, possibly for the first time in their life—they have been, well, not happy, but comfortable enough, even given what ESC A19 says: that they should pay the money back. They are quite happy with that. However, many of these people have faced a tax-geared penalty under section 97 of, and schedule 24 to, the Finance Act 2007. That penalty has generally been at the lowest rate of 15% under the careless but prompted regime, under HMRC’s fines regime. However, they have also faced statutory interest, which is currently at 3.75%. Many people understand that, if they have been in receipt of child benefit for a few years and should not have been, they should pay it back, but they feel particularly aggrieved about a 15% penalty and the statutory interest.

I argued with HMRC, for my constituents, that the suspended penalty regime, under paragraphs 1 and 14 of schedule 24 to the Finance Act 2007, should be the equitable solution. This is a procedure by which HMRC, with discretion, is allowed to put those penalties on hold and effectively say, “If you are good taxpayers for the next couple of years, this will disappear”; the penalty is then discharged. HMRC responded to me with, I must say, an innovative obtuseness that I rarely see. It responded that schedule 41 of the Finance Act 2008 applies, as the taxpayer had failed to notify, in accordance with section 7 of the Taxes Management Act 1970. They had failed to notify, so that penalty suspension, which is allowed for other taxpayers, does not apply. The taxpayer is also in some difficulty should they wish to go to the first-tier tribunal as well, which would always result in failure on a statutory basis.

I think the pressure of mumsnet.com, moneysavingexpert.com and, hopefully, myself has made HMRC use a degree of discretion in its ability to interpret “carelessness”, which is always a vague term. My thought of carelessness might be different from yours, Mr Chairman. However, HMRC has gone back and reassessed many penalty assessments. Over the time of this new charge, there have been 97,405 penalties across 37,406 customers. As ever, thanks to the Library for pulling out that type of detail for me. The charge has raised £15 million of penalties, which is not a vast sum. A recent review—I think the Daily Mail was very much behind this, with pressure from some of its readers—shows that, of those 35,000 cases involving a failure to notify, a penalty of 15% had been charged because a reasonable excuse was not accepted. HMRC has actually recanted on that and allowed quite a number of thousands—6,000, I believe—of these penalties to be waived, with £1.8 million of penalty refunds.

As part of its work, HMRC has designed a helpful flow diagram showing two events for which penalties could be refunded. The first is for when income has increased from below £50,000 to above £50,000 since the start of the high-income child benefit tax regime, and the second is for when a taxpayer has started a new relationship, since the introduction of the charge, with a partner who is in receipt of child benefit. Those are the two cases for which HMRC has given in and agreed to the suspension of penalties, and that is to be very much applauded.

What do people do when they have a new child and make a claim? If they know that their income is over the limit, they may not bother at all—they might think, “We just won’t get involved.” For other families there is the CH2 form, which I will mention in more detail shortly. As I have laid out thus far, we have dragged half a million people into the self-assessment net. We have raised penalties under a system that I do not agree is reasonable on statutory grounds. We are learning a lesson: should we seek to withdraw universal benefits in some other field—that suggestion is not on the Conservative agenda, but it is raised from time to time, for example with winter fuel allowance—this has to be a salutary lesson in how never to use the tax system to withdraw benefits.

I will conclude by addressing five areas, which might take a little time. We have fiscal drag, because the thresholds at which the full benefit is withdrawn—namely £50,000 and £60,000—have applied unchanged for six years. We now find that as wages rise, more people are dragged annually into self-assessment. Since its inception in 2013, 370,000 more families have to fill in a self-assessment return.

I am very surprised that the House did not pick up at the time on the fact that the system completely blows away the independent status of taxation for couples. Even up to 1990, women were deemed to be the chattels of their husbands, and there was a single tax return. In 1990, that was thankfully blown away, having been overdue for a long time. I think the groundwork was laid by Geoffrey Howe and seen through by Lord Lamont. After that date, people were treated as they should be for tax: as individuals.

The system blows that away because one partner now needs to ask the other, “What do you earn, because I need to determine whether it is you or I who pays the high income child benefit tax charge?” The partner in receipt of the child benefit might not be the one paying the charge; it always falls on the higher earner. Whereas before there was decent independence and secrecy between partners should they so wish, that was blown away by the legislation, and I do not feel that could ever be right.

Subsequent tax legislation has also had an unusual and, I think, unforeseen impact, including, particularly, on buy-to-let property. At the start of my speech, I mentioned the concept of adjusted net income, which is income from PAYE, rents, dividends and whatever else one might receive. Changes to buy-to-let allowability of mortgage interest, however, have had an unforeseen impact. Years ago, rental income less expenses and mortgage interest would give a net figure, which would form the top end of the tax return and be part of the creation of the relevant net income. With the gradual restriction of the allowability of mortgage interest—I will not expand on whether that is right, wrong or indifferent—the tax return looks different. Net relevant income for rental purposes does not include the deduction for mortgage interest, which now comes at the bottom part of the tax return. Instantly, the net relevant income at the top part of the tax return is now bigger for many people with mortgage interest, even though the net effect for cash flow and everything else might be the same. There is now some relief for mortgage interest at the bottom part of the tax return, by way of a credit of tax.

I did not see the full shortcomings of that piece of legislation at the time, even though, at that Budget statement some years ago, I raised concerns about changing the whole deductibility regime, which is fundamental to tax. That legislation has caused another group of families, who are doing nothing particularly exotic, to be dragged into the high income child benefit tax charge, as their income has pitched into the £50,000-plus bracket because of the deductibility of mortgage interest, even though nothing has changed.

A real concern shared by all hon. Members in the Chamber is that of the Women Against State Pension Inequality Campaign. They have been active because they have an axe to grind and I think that many of us have sympathy with some of what they have to say. We are potentially building another problem for the future—thankfully, I might be long gone from this place before it has to be solved.

Earlier I described what people might do when they have a new baby. If they have earnings of more than £60,000, they might think, “I just can’t be bothered to fill in the form. I’m not going to get anything; why would I bother?” The CH2 form is not unreasonable or too complex—it is actually quite free flowing and easy to understand—but a lot of people do not bother at all.

The other choice they have, by filling in form CH2, is to take the child benefit and then pay it back annually through their self-assessment return, or to register for a nil award so that they are in receipt of child benefit but at nil value. That is really important for those who do not follow that route. They do not want the hassle of a self-assessment return, so they decide to do nothing. The partner in that relationship, who is perhaps not working, will not be building up a national insurance record, because if someone fills in form CH2 and decides not to take any child benefit, they will at least be crediting up a national insurance contribution under class 3. My concern is that people do not know that this is there for them and are saying, as many of us do, “I can’t be bothered to fill in another form. I don’t think I will get anything. I won’t do it.”

We are potentially building up a problem of people—let us be frank, it is probably predominantly women—who will find in the future that they do not have the national insurance record that they thought they had. When they get their DWP statement with details of the award they will receive with the new state pension some six months before retirement age, they will find it is rather less than they thought.

We have to ask ourselves why we have dragged 1.2 million families into the system—and that figure is rising, due to fiscal drag and the measures for buy-to-let property mortgage interest. It is worth mentioning the perversities in the whole tax calculation. I do not know how Parliament missed that. I was not here in 2013, but had I been I might have spotted it. It is an unusual situation, but when dealing with tax systems, I think it best to flex the edges to find out where the problems are.

This is an extreme case, but it is catered for on the gov.uk website: in 2019-20 a family with 10 children—there are not too many of those around—would be in receipt of £7,500 of child benefit. Anyone earning £50,000, including a self-employed person, would be in receipt of £7,500 in child benefit, but if they had the opportunity of a great new contract to get their income up to £60,000, under this system they would have to pay back that entire £7,500. In my view, tax lost—tax paid—and benefit lost are the same thing. What lands in someone’s bank account is the same thing, whether that is through losing benefit or paying more tax. In effect, therefore, for that extreme example of a family, there would be a 75% clawback charge, because they would pay back the £7,500 child benefit owing to that £10,000 in additional income.

That is not where the matter ends, of course. People who earn £50,000 are higher-rate taxpayers, paying 40% tax and, if employed, 2% national insurance. We therefore have the perversity, which I am sure is not always seen, of a 117% tax charge and benefit loss. For that extra £10,000, that taxpayer will actually be worse off by £11,700. There should not be such perversities in the tax system.

I like a debate to end with a solution, but there is no easy solution to this one—I grant the Financial Secretary that great problem. I would like to extend the penalty suspension to all, because I think HMRC has been rather obtuse about this one. If people start to do the right thing, past penalties should be suspended and, if they do the right thing for the following two years, those penalties should disappear.

The easier option would be to restore the universality of child benefit. Nothing is simpler than that—everyone gets it without means testing or complication—but the Government and the Treasury understandably want to claw back that benefit from people in receipt of higher income. A complicated solution—or, rather, a politically difficult one—would be to reduce the personal allowance for those with children. They would get their full child benefit but pay a little more in tax. At least that could be coded out—they need not worry about the self-assessment system—and for the PAYE taxpayer with simple affairs, things would be just as they are. However, that would be a difficult way to do it.

It would be simpler, perhaps, to make a higher universal child benefit payment, which this year is £20.70 for the first child and £13.70 for subsequent children, subject to the benefits cap. Any increased child benefit, however, should be made a taxable benefit. Therefore, through coding, the Government could claw back 20% from a basic rate taxpayer, and 40% from a 40% taxpayer. For those with complicated tax affairs, adding the layer of clawing back the high income child benefit tax charge is no great difficulty. Something similar happens already. The retired have a simple coding adjustment for private pensions to reflect the level of their state pension.

We need a new and elegant solution, and to learn the lesson that whenever Governments in future claw back benefit, they should not do it in this way, through the tax system. It has created bureaucracy and angst, and I am worried that normal, law-abiding taxpayers now feel that they have done something very wrong because of those levels of penalties. That is my appeal to the Financial Secretary.

--- Later in debate ---

[Craig Mackinlay]

I am delighted to have the final say. I thank hon. Members who attended the debate. There were contributions from the hon. Member for Strangford (Jim Shannon), as ever, as well as the hon. Members for Glasgow Central (Alison Thewliss) and for Oxford East (Annelise Dodds). We spar regularly on tax matters across whichever Chamber we are in, but I think we are broadly in agreement that the system is complex, that it could have been made easier and that there are problems that need to be solved.

I am pleased to receive a degree of assurance from the Financial Secretary to the Treasury. He accepted that the charge was a measure of its time, when urgent measures were needed to respond to the state of the country’s finances. It has not been part of my argument that such a clawback should not exist. My observation has been that, if we are to have methods of clawback, we need to design systems that are more elegant than this one. I hope he will pass on to HMRC my issues regarding the penalty regime. Perhaps this can be the last of it, with people made aware that, yes, if they do wrong in the future, a penalty regime may apply. However, I would like to see a softer touch, given the modest amounts involved, for those stuck in cases at the moment.

Question put and agreed to.

Resolved,

That this House has considered the high income child benefit charge.

NHS Pensions: Taxation

Lord Mackinlay of Richborough Excerpts

Monday 8th July 2019 Commons Chamber

[Elizabeth Truss]

The answers to the problems within the NHS lie within the Department of Health and Social Care, which is why the Department is launching a consultation. As I said earlier, we need to make sure that the pension tax system is designed around all employees. Of course NHS employees are extremely important, but we need to make sure the system works for all employees. That is a longer-term task, but we are specifically looking at the 50:50 idea in the consultation. No doubt the Health Secretary is talking about other ideas that could be introduced, and I am sure he is very interested in the right hon. Gentleman’s views, too.

[Craig Mackinlay (South Thanet) (Con)]

We have created the most unbelievably complicated tax system. If working additional time makes the pension pot larger, there could be a 55% tax charge when taking those surplus benefits, and restrictions on the annual allowance are resulting in these large tax bills.

It is not surprising that many health professionals are choosing not to do the extra work or are simply retiring earlier. My right hon. Friend the Member for Wokingham (John Redwood) makes a key point, because extra earnings would take many of these people into the slice above £100,000 to £125,000, where a 62% tax charge applies.

This is not just an NHS problem. My concern is that we are putting a brake on those entrepreneurs who want to create enterprise, jobs and the tax payments of the future. A simple step would be to get rid of the lifetime allowance.

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill

Lord Mackinlay of Richborough Excerpts

2nd reading: House of Commons & Ways and Means resolution: House of Commons
Tuesday 30th April 2019 Commons Chamber

[Craig Mackinlay (South Thanet) (Con)]

It is always a pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman). The two of us often seem to be in the Chamber at a similar time discussing tax issues.

These measures have been a long time in process. Back in the Budget of 2016, there was talk of a consultation on trying to align more closely national insurance with tax treatment. I note that, today, the Exchequer Secretary to the Treasury said that this is a form of simplification of the tax system. I might disabuse him of those thoughts by telling him to look more closely at the new rules regarding post-employment notice pay within payments in lieu of notice as part of termination payments. Far from being simple, it is actually rather complex.

As I said at the very start, these proposals have been making their way through this House in various forms. There were some delays because of the unexpected election in 2017, but they did find their way into a draft Bill in December 2016—the National Insurance Contributions Bill. Some proposed changes came through in the 2017 Budget, which included the scrapping of class 2 national insurance for the self-employed—currently £3 a week—and a corresponding increase in class 4 national insurance contributions for the self-employed. They were highlighted as fairly controversial at the time, but I did not share that view. I was quite supportive of the increase in class 4 national insurance because of the generosity, as I saw it, of the new state pension that came into play. That slight increase in the class 4 national insurance rate was, I felt, a fair quid pro quo for the quite substantial increase in the new state pension, but, for whatever reason, that measure was not taken through. I had some serious concerns about scrapping class 2 national insurance, and I will explain why.

The lowly paid self-employed person may not hit the threshold for class 4 national insurance contributions, which is, I believe, something above £8,500, but is more likely to have paid class 2 national insurance contributions and so would be ticking up a national insurance record into the future. Given that WASPI women have concerns about where they find themselves today, I was worried that this House and future Members of this House—I will probably be long, long gone—would face a raft of new people saying, “Where’s my pension. I have been self-employed all these years.” They would then be told, “Ah, but you didn’t pay any national insurance; you didn’t pay class 2, and you certainly weren’t earning class 4.” I was pleased to see that that idea disappeared and that we are back to what was the old system.

We have had this £30,000 threshold for tax-free redundancy payments—let me put it in easy terms—for quite some time. It could be argued that we have been at that level of £30,000 for too long. I did a bit of research before today and found that the last time that the £30,000 threshold was raised was with effect from 6 April 1988. It must have been considered to be the right rate at the time—it was an increase in rate from £25,000 to £30,000. I did not manage to find out when the £25,000 rate was first implemented, but it must have been deemed at the time to have been the right rate for what was a tax-free settlement, or payment, for years of service within a company. It was obviously deemed to be the right amount for people to adjust to a new work situation, or to act as a bridge towards retirement for people who were getting towards the end of their normal working life, which was perhaps more traditional in those days of the ’80s. I know the hon. Member for Bootle (Peter Dowd) raised some of those points in his speech.

Having consulted the Office for National Statistics for inflation increases since 6 April 1988, I found that £100 then is now worth £266 today. Applying that inflationary increase from 1988—no more, no less—that £30,000 would inflate to £79,800, or in broad terms £80,000. However, I do understand—for the record I am a member of the Chartered Institute of Taxation and a chartered accountant—that there is probably a perception that the £30,000 settlement payment has been a target to hit rather than a proper target for any other reasons. Hence we now have this fairly complicated formula for payments in lieu of notice. Changes came in on 6 April 2018, including this whole concept of post-employment notice pay. It was really to recognise the difference between contractual payments in lieu of notice and non-contractual payments in lieu of notice. I will not bore the House for too long with the formula that applies, but it is a fairly beefy one: it is basic pay multiplied by the number of days from the last day of employment, divided by the number of days in the last pay period, minus the amounts paid on termination—a formula given the letter T. Therefore, far from it being a tax simplification measure, the PILON rules have added quite a layer of complication to a figure of £30,000 that, in due course, should have been given adjustment for inflation in any effect.

We are now left with PILONs—the new PILONs assessment of what they are actually worth—holiday pay, and any restrictive covenants being included within that £30,000 limit that is tax free and national insurance free. Above that, we have the normal rules of tax and— in complex speak—employers’ class 1A national insurance coming into play. What we are likely to see in terms of adjustment, in answer to the hon. Member for Aberdeen North, is an increase in employer contributions to pension schemes as part of a settlement on the way out, which is not any bad thing. There is nothing wrong with that.

We have a very powerful and strong message to tell about auto-enrolment. It must be the right thing for all employees now. We are now running into millions, and there will be a fund approaching tens, if not hundreds, of billions in due course, and that must be to the good, as people accumulate their own pension funds. We will look back at auto-enrolment and see it as one of the most successful and vital measures that any Government could have implemented. It is like any other measure. It sounds expensive—it means a percentage off salaries, which will always be unwelcome particularly in times of low inflation, and it means that people might see their take-home salary go down—but there will be a lot of thanks from many employees in due course that these funds have been accumulated. If, in trying to circumvent, in an entirely legitimate way, paying the class 1A national insurance on these amounts—for normal employees over £30,000—employers provide more funding to a pension scheme, then that is something as a quid pro quo that the Treasury should actually support.

These measures should have come into play in April 2019. They were deferred last year for a further year, which is mentioned on page 42 of the official Red Book. Therefore, far from saying that these things have come out of the blue and have not been considered, they have been consulted upon since 2016. They nearly got somewhere, but were deferred for another year. Therefore, in terms of planning and getting that together, there is plenty of time for employers to make any due adjustment. I have really concentrated on part 1 of the Bill.

Let me turn to the sporting side of things and the £100,000 limit. There have been a lot of discussions on this subject, because we are talking about huge figures, especially when the very well-known sports stars have their testimonials. When there are millions of pounds involved, these people—who are already very wealthy—often decide to give all the money to charity, which is a laudable ambition. I suppose that the one downside of this type of legislation is that it is possible for the employer in such cases to suffer the national insurance on an amount that the recipient has never actually received because he or she has decided to put it through their tax return as a very generous donation to charity.

This subject brings out the debate about certain limits in our tax regime that have not been touched for a very long time. What was the purpose of the £30,000 threshold? There was a reason for it in 1988, but does it still apply in the modern employment market? Perhaps people do not work as long for the same employer now; that feature is probably slightly different today from how it might have been in 1988. What should the figure be? Does it deserve flexing up? We could have a similar debate across other bits of the tax code—perhaps including inheritance tax.

Lots of parts of the tax code have fallen behind inflation. They were originally there for a reason. Some were introduced when the Labour party was in government, but now that we are in government perhaps there is a debate to be had about what these things were for in the first place, as part of the tax simplification process. But if there is any fear or threat that there has been manipulation of the tax and NI system, it is right that these payments should be part of the normal weft and weave of what we are doing with national insurance. I therefore have no difficulty supporting the Bill, and I wish the Exchequer Secretary to the Treasury every success in its progress through the House.

Business Rates

Lord Mackinlay of Richborough Excerpts

Tuesday 2nd April 2019 Commons Chamber

[Sir Geoffrey Clifton-Brown]

I well remember meeting my hon. Friend for the first time in the Eight Bells pub in 1997, when we were both a little younger—[Interruption.] She says, in parentheses from a sedentary position, “better looking”—I was not going to say that in case I came within the bounds of the code, which I think might well touch on the sort of remark that I might make. Nevertheless, I wholly concur with her sedentary remark.

[Craig Mackinlay (South Thanet) (Con)]

I put on record that I have been trying to take action for a number of years to exempt public conveniences from business rates. Especially in respect of the towns in my constituency—Ramsgate, Broadstairs and Cliftonville are tourist areas—I have always said that public loos are often the first thing that people use and the last thing that they remember, and they should be thus exempted.

[Sir Geoffrey Clifton-Brown]

I am sure that the tourists in my constituency will be greatly relieved to hear what my hon. Friend has to say. In my constituency, which is very dependent on tourism, I have been having a big battle with the local council to keep public conveniences open, because it is really important. If someone comes for a day’s outing to the Cotswolds or goes to my hon. Friend’s constituency, they cannot last all day. They need somewhere to go, and I was delighted when the Government gave that sort of relief.

Taxation (Cross-border Trade) Bill

Lord Mackinlay of Richborough Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Ian Murray]

I am delighted to hear that he would have resigned regardless, but he must surely have some regret. Perhaps we should be glad that he resigned, given that he stood up in this Chamber, as a former Secretary of State, and tried to persuade the House that Operation Stack and having trucks and lorries queued up at our ports was positive for the country. I have never known a former Secretary of State to look at something like Operation Stack, which would be a tragedy for our economy had it continued for much longer, and turn it into a positive. If that is the kind of argument he is offering to this House and to the country, we should ensure that we vote down most of these amendments.

I find it extraordinary that after going through this process—these debates give me déjà vu—we are still hearing arguments about the customs union and the single market. The Government managed to botch together what is now called the Chequers agreement and now, a week away from this Parliament adjourning for the summer recess, they have completely torn it apart by again pandering, as the right hon. and learned Member for Rushcliffe (Mr Clarke) said, to 30 or 40 people on the hard right of the Conservative party. Those people would be being much more honest if they just stood up and said that they want the cliff-edge hard Brexit, rather than tabling amendments that drive a coach and horses through the agreement that the Government managed to reach.

[Craig Mackinlay (South Thanet) (Con)]

Is the hon. Gentleman really suggesting that the 163 independent members of the WTO are somehow teetering on a cliff edge or doing something rather odd? Are they not just normal trading nations that trade freely with each other? I find his “cliff edge” statement rather peculiar, because it does not treat the facts.

--- Later in debate ---

[Nic Dakin (Scunthorpe) (Lab)]

I apologise for the fact that I had to attend a Statutory Instrument Committee, but I was present at the beginning and I am here now. It is a pleasure to follow the right hon. Member for Chelsea and Fulham (Greg Hands), who brought us back to the detail of the Bill, which is where I wish to focus my remarks.

I was concerned that the proposed dumping methodology might not address the UK steel industry’s concerns, so I am pleased that the hon. Member for Stafford (Jeremy Lefroy) has tabled amendment 25. I am also pleased that the Government have engaged with Members from all parties and that last week, in response to a written parliamentary question from the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), they underlined their commitment to

“protecting UK industry where it is suffering injury as a result of dumped imports.”

The Government went on to say that they would not allow that to happen and would use mechanisms for the calculation of dumping methods that, on the face of it, seem to have the support of industries such as steel and ceramics. I very much welcome the fact that the Government have listened and have worked with key industries during the Bill’s progress through Parliament.

I am less convinced by the situation in relation to the economic interest test. I was rather hoping that, in line with the rhetoric that we heard throughout the whole argument for leaving the European Union, we would take advantage of the opportunity that leaving the European Union offered to reduce any bureaucratic pressure on industries such as steel, rather than adding to their bureaucratic pressures. The economic interest test in the Bill adds extra layers compared with what currently exists in the European Union, so we have the genius of a Government bringing forward something even more complex than what we already have in the European Union. I did not think that was the purpose of what we were doing; perhaps I was naive.

In Committee, we expressed concerns about the proliferation of economic interest tests that have been built into the regime and that measures must pass before tariffs can be introduced. Of particular concern was the fact that such tests will first be conducted by the independent Trade Remedies Authority and then again by the Secretary of State, theoretically on a completely different basis. As such, we have pushed for the Secretary of State’s power in relation to the tests to be curtailed and at most to act as a sense-check on what the TRA has conducted. Anything more than that will introduce an unacceptable level of potentially political interference into the process. It will be an unnecessary block on what is happening. The real worry is that it will delay the introduction of trade remedies and thereby potentially subject industry to more damage. However, the Government have tabled amendments 103 and 108, which go some way towards addressing the concerns I have just outlined.

Government amendments 110 to 112 and 116 to 118 seek to deal with the replication of tests, but they would not do that sufficiently well, so I shall support amendment 21, tabled in the name of the Leader of the Opposition, which would achieve a better outcome.

Finally, let me say a little about safeguard measures and adjustment plans. I am concerned that the Government intend to require any industry that requests safeguard measures to submit adjustment plans to demonstrate how it will adjust to new market circumstances, before any safeguard investigation can be launched. In essence, that would require an industry to demonstrate what changes it was making to its operations, including efficiencies and rationalisations, before a safeguard investigation could even start. UK Steel and others have pointed out that in situations such as those we currently face in relation to US section 232 tariffs, such a requirement would be unjustified. Industry should not have to make major adjustments to deal with what is likely to be a temporary situation introduced by the non-WTO-compliant actions of another Government. I am therefore pleased that the Government have tabled amendment 113 to modify the requirement, allowing the TRA to waive the requirement when it deems it necessary or suitable. It would, though, be better if that pressure on industry—at a point at which it is already under significant pressure—were not there.

I wanted to put those concerns on the record so that the Government have the opportunity to make further improvements to the Bill as it makes progress in the other place and before it comes back to this House.

[Craig Mackinlay]

I rise to speak to amendment 73, tabled in my name and the names of my right hon. and hon. Friends, and which I wish to move at the appropriate time.

It now has to be a settled will that in future we are not going to be in the, or a, customs union with the European Union. That became clear during the hours of debate on the European Union (Withdrawal) Bill in this place and the other place, and that Bill became an Act. It is clear in the Chequers deal and the White Paper on the future relationship. The statement “We will not be in the customs union” has passed through the Prime Minister’s Lancaster House and Mansion House speeches, and through her statements on the Floor of the House on occasions far too numerous to mention.

We are not to be in a customs union. That was clearly the compact with the public made by the Conservatives and the Labour party in their manifestos last year. It is clearly the will of the people, as expressed in the June 2016 referendum. I do not think there can be any doubt about the clarity, because it was mentioned by all involved in that debate, no matter what side they supported. It is clearly the will of the people, of the Prime Minister and of the Cabinet. Similarly, when we negotiated and passed the European Union (Withdrawal) Bill, it was the will expressed by a majority of this place.

My hon. Friend the Member for North East Somerset (Mr Rees-Mogg) said earlier in an intervention that, were it necessary for there to be a customs union with some part of the world, there would need to be, at the right time, primary legislation that would also incorporate any requirements in the Government’s proposed new section 16A, which I am trying to nullify with amendment 73. I certainly hope that, given those settled wills, my amendment will be supported by the Government because anything else does not square with the manifesto on which we were elected and it certainly does not square with the manifesto on which the Labour party was elected either.

--- Later in debate ---

[Mr Leslie]

Will the hon. Gentleman give way?

[Craig Mackinlay]

I will; I would enjoy continuing my speech so please intervene.

[Mr Leslie]

Did the hon. Gentleman notice that, in March 2016, the European Union agreed, on the so-called tampon tax issue, to allow zero-rating? Therefore, the point that he made is completely debunked.

[Craig Mackinlay]

I am sorry, but that must have passed me by. I know that, to get around the difficulties that were caused by the tampon tax and the significant debate that we had in this Chamber, of which I was a part, the Government agreed to sort of equal the amount that was collected to pass it to charity. So it seems bizarre that we have not taken the steps that are available.

The other thing about going along with the VAT directives and how VAT is managed is that we have been subject to the missing trader intra-community fraud, the so-called carousel fraud, which cost this country £1.7 billion last year. It is estimated to cost the EU as a whole into the tens of billions of pounds. Over the period of the administration of VAT in its current form, it could have cost anything up to £100 billion across the EU. Are we really saying that these failed systems are something that we want to be attached to in perpetuity?

The Prime Minister has said very clearly that we will be in control of our tax policy. Just last week, following Chequers, the Secretary of State for the Environment also confirmed that we cannot actually set our own taxes as we would wish to at the moment because VAT is set in accordance with EU rules. That is another area in which we will be sovereign. Amendment 73 would make sure that, no matter what the future holds, primary legislation will be needed to do this. We cannot have the vestiges of some of the worst VAT rules that anybody could ever imagine remaining on our statute book. For that reason and given that powerful debate on the tampon tax, I certainly hope that others across this House will support that amendment this evening.

[Mr Speaker]

Has the hon. Gentleman completed his oration?

[Craig Mackinlay]

indicated assent.

[Mr Speaker]

He has. We are grateful to him.

Oral Answers to Questions

Lord Mackinlay of Richborough Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Mel Stride]

The simple fact is that we need an HMRC that is fit for the 21st century, for the new digital ways in which we are working, and for our targeted approach on clamping down on avoidance, evasion and non-compliance, for example. That requires these sophisticated hubs that have the right skills to do that job, so I defend our reorganisation entirely.

On the portrayal of the economy that the hon. Lady has just given, we have the highest level of employment in our history, more women in work than at almost any time in our history and unemployment lower than at any time in the past 45 years. We are bearing down on the deficit and have debt falling as a percentage of GDP.

[Craig Mackinlay (South Thanet) (Con)]

13. What steps he is taking to invest in infrastructure in Kent.

[The Economic Secretary to the Treasury (John Glen)]

The Government are committed to ensuring that every part of the country has a modern and efficient infrastructure. In Kent, the extent of superfast broadband has risen from 33% to 95% since 2010, and the South East local enterprise partnership has secured £590 million for 30 transport schemes. Work has recently begun on a £105 million upgrade to junction 10a of the M20.

[Craig Mackinlay]

Given that Kent is on the frontline of EU border trade and that local plans involve the potential of more than 100,000 new homes over the next 15 years, will my hon. Friend consider investing in the dualling of the A2 and the A256 to improve traffic flows and resilience in east Kent?

[John Glen]

My hon. Friend makes a very sensible point. The dualling of the A2 near Dover was raised as an issue in Highways England’s route strategy for Kent and is being considered alongside other investments. The A256 is part of the indicative major road network and the Department will be publishing the final network by the end of the year. If it is included, it will be a matter for the local authority, working with the subnational transport bodies, to determine whether to bid into the fund.

Oral Answers to Questions

Lord Mackinlay of Richborough Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Elizabeth Truss]

What we have seen in the past few years, since 2015, is a 7% rise in the real wages of people on the lowest incomes, and a reduction in income inequality.

[Craig Mackinlay (South Thanet) (Con)]

T8. With the full phasing in of the residents’ nil-rate band for inheritance tax by 2020, a couple will potentially be able to leave £1 million free of inheritance tax to descendants. That is all very welcome, but having worked through the legislation in a real example, it seems unduly complex. Will my right hon. Friend now consider simplifying the law to make the overall IHT allowance a simple, no-nonsense £500,000 each and remove the complexity of the residents’ nil-rate band rules?

[Mel Stride]

My hon. Friend talks about complexity. The Office for Tax Simplification is looking into the way in which inheritance tax and the regime operate. Changing the way that tax reliefs operate in the way that he describes would add very significant cost. However, we do, of course, keep all taxes under review.

Financial Guidance and Claims Bill [Lords]

Lord Mackinlay of Richborough Excerpts

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

[Neil Gray]

I rise to speak to amendments 39 and 40, which are in my name. I want to say at the outset that while Scottish National party Members have felt the need to bring back some elements from Committee, we do on the whole welcome and support the Bill. We just want to see some improvements, which we hope will help to protect consumers and those accessing financial products. It is a shame that on the third attempt to consider the Bill we may still not get time to consider the second group of amendments, and in particular those tabled by the right hon. Member for Birkenhead (Frank Field), which we are keen to consider. However, I will proceed as quickly as possible so that we might get to the second group in good time.

First, amendment 39 would require that specially trained advisers and guidance are made available to people in vulnerable circumstances and would provide an indicative list of what “vulnerable circumstances” should include. It is positive that the Government decided to amend the Bill in the House of Lords to include a reference to the needs of vulnerable people within the functions of the new single financial guidance body. However, we feel that the Government should go further.

The amended version of the clause remains a little weak with regard to the inclusion of vulnerable people. Our amendment would make things more explicit and strengthen that objective by providing more detail as to who may fall into this remit, using the term “people in vulnerable circumstances”, which we think is more appropriate. The circumstances illustrated in our amendment can have a significant impact on people’s finances and long-term savings plans.

People in difficult financial circumstances may be more likely to use new pension freedoms, at a cost to their long-term pensions saving. Attractive as the pension freedoms may sound, it is clear that the Government have not put in place adequate safeguards for older people who are opting to free up funds, to ensure they will not end up in a desperate financial situation later. Those with less money are more vulnerable to economic shocks in their personal circumstances, as well as being potentially more vulnerable to scammers who give misleading or false advice for a fee, as we heard from the shadow Minister, the hon. Member for Birmingham, Erdington (Jack Dromey).

Being a carer or disabled can incur extra lifestyle costs. We want to ensure that the new body is as accessible as possible for all people, regardless of their circumstances. Specially trained advisers and resources must make up part of the new body, so that people can have confidence in its ability to support people in vulnerable circumstances.

The Minister said in Committee that our amendment was too prescriptive, but that does not really stand up. There is plenty in the Bill that is prescriptive and detailed. The new financial guidance body will be looking to the content of the Bill to understand what its objective and remit are. We are simply ensuring that the new body is absolutely clear that catering for those who find themselves in vulnerable circumstances should be a significant part of its remit. The wording of clause 2 makes that sound like an afterthought. That is an important discussion to be had alongside the duty of care, which I will come to later.

Amendment 40 would require the new body to ensure that consumers are made aware of the differences between information, guidance and advice, so that they can specify what type of services they require from it. In Committee, my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) tabled an amendment that would require the new financial guidance body to define the meaning of those services. The Minister said that that would potentially duplicate available definitions set out in regulations, but he also seemed to think that we asked for a definition because it would be useful for the body itself. That was not our purpose. Our purpose was to ensure that consumers themselves understand what services they have access to. We are tabling this amendment with tweaked wording to make it clear that we are asking that the new financial guidance body communicates clearly what services it provides people with and what they can access.

Guidance, information and advice are very different things. People expecting advice on what route to take may be disappointed to receive various information only. Likewise, there may be issues around exactly what the body is allowed to advise and to what extent it is able to advise on options available. Through this amendment, we are simply highlighting how important it is to ensure that users understand what they are getting.

Government new clauses 4 and 9 give the Secretary of State power to ban cold calling related to pensions and other consumer financial products. The Government have also tabled amendments to bring forward commencement of those clauses. The SNP and the Scottish Government have campaigned hard on cold calling, so we are pleased to see those provisions in the Bill. It is a positive step that the Government have tabled amendments 45 and 46, which will speed up the process for putting in place the necessary regulations for banning cold calling. It is clear that consumers want action now.

On the Government’s amendments, there is a concern that the Government are treating claims management companies’ cold calling and pensions or financial products cold calling differently. In Committee, the Government introduced clause 34, banning cold calling for CMCs unless the consumer has given their consent. With the two amendments on pensions and financial advice cold calling, the Secretary of State is giving herself a get-out clause, to shirk responsibility for taking action. Cold calling is cold calling. Consumers simply do not want to be bothered by nuisance calls, as we have already heard from the hon. Member for Stirling (Stephen Kerr) and my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson). Creating a complex framework around which providers are allowed to make these calls, on what types of product, under what circumstances, is over-complicating a very simple issue. People just want it to stop.

Will the Secretary of State, or the Minister who responds to the debate, explain why they think the need to ban CMCs’ cold calling is greater than the need to ban pensions or financial products cold calling? Tough action needs to be taken on this; otherwise, we risk creating loopholes that will allow cold callers to continue to operate.

I want to mention the duty of care amendment: new clause 6, tabled by Members on the Labour Front Bench. My colleagues spoke about it in detail on Second Reading, particularly my hon. Friend the Member for Inverclyde (Ronnie Cowan), who sadly cannot be here today to speak on it again. Applying a duty of care to CMCs would be a positive step in ensuring that such companies remain accountable for their actions if they cause harm to consumers.

Ideally, all financial institutions should have the best interests of vulnerable consumers at the heart of their conduct, but we all know that that is not always the case, and the fact that the Financial Conduct Authority has agreed to bring forward a discussion paper on duty of care is really positive. Macmillan has campaigned tirelessly on this issue, and I thank its staff for the briefings that we received ahead of these debates. We hope that the Secretary of State and Ministers will give serious thought to this idea, as well as to our amendment on vulnerable persons, which ensures that the single financial guidance body expressly allocates resources for specialist support for people in vulnerable circumstances.

The SNP has long called for and campaigned for action on cold calling. Indeed, it was the subject of a ten-minute rule Bill proposed by my hon. Friend the Member for North Ayrshire and Arran. We welcome the fact that there is to be progress in this regard, but this area of the Bill is becoming a bit of a guddle. That is why we would obviously prefer to see powers over this area devolved to the Scottish Parliament, so that we could take more robust action, such as was suggested by the Scottish Government’s action plan on nuisance calls. Indeed, the Scottish Government Cabinet Secretary for the Economy, Jobs and Fair Work, Keith Brown, has written to the UK Government many times, asking for them to take a tougher line on nuisance calls.

Nuisance callers blight our society and cause significant distress, particularly to the elderly and vulnerable people. Such harassment is unacceptable and must be stopped. Hopefully, in the time we have available, we will take the opportunity to make some necessary improvements to the Bill.

[Craig Mackinlay (South Thanet) (Con)]

I shall restrict my observations to pensions cold calling and unsolicited marketing thereon.

Last year, I was pleased to play a part in the scrutiny of the Pension Schemes Act 2017. It was timely legislation to ensure that pension savers were adequately protected as they saved, during the working period of their life, by the regulation of master trusts, which had previously been rather worryingly lightly regulated—insufficiently so, when for many, their pension will be their primary asset in life.

I am pleased that this Bill will bring together the Pensions Advisory Service and Pension Wise into a single financial guidance body, under the control of the FCA. I am further pleased to support the Government’s amendments, especially new clauses 4 and 9. It is right that the new clauses in the name of the Government allow the making of regulations to prevent cold calling and the sending of unsolicited direct marketing materials relating to pension savers. That is further strengthened in Government amendment 10.

At the core of what we shall hear in the House this afternoon is whether “may” should become “must”. That is at the core of an amendment tabled by the hon. Member for Eastbourne (Stephen Lloyd) and Willingdon —amendment (a) to Government new clause 9. There is a case for healthy competition. That usually results in lower charges, and that can be—can be—good for consumers. It would be a draconian measure to ban advertising, to entirely ban direct marketing, because that could be banning choice. It is often good advice for pension savers who have accumulated a pension pot to move to a provider who may provide a better pension, perhaps at a lower cost, with lower charges. That decision now rests with pension providers. If they do not act sensibly, that “may” in Government new clause 9 will, in certain circumstances, become a “will.” That is an important power.

--- Later in debate ---

[Alex Cunningham]

The hon. Gentleman talks about a total pot in the trillions, but for the vast majority of people, particularly part-time workers, their pot, although better than nothing, will be relatively small. Does he agree that several groups are still excluded from auto-enrolment, and that the Government need to do something to bring them in?

[Craig Mackinlay]

I thank the hon. Gentleman for that contribution. There is a wide debate—I have taken part in it—about whether the self-employed are playing a full role in getting pension provision. I think that there are measures that could be taken, perhaps using the national insurance system, to provide them with greater certainty. The primary purpose of the Bill is to ensure greater financial understanding among the general population. They need to know where to turn at the right time. I have confidence that the single financial guidance body will achieve just that.

I close with a suggestion that is probably best directed to the Financial Secretary to the Treasury. It has some relevance to the honest proposals put forward by the hon. Member for Birmingham, Erdington (Jack Dromey) on mid-life reviews. Employees, as they work through their working lives, obviously have an employer. Employers are very well aware—possibly more than anybody else—of when an employee is approaching retirement. I am sure that most responsible employers will be keen to help. I recommend that the Secretary of State discuss amendments to the Income Tax (Earnings and Pensions) Act 2003 to allow employers to pay for advice, outside of any benefit-in-kind tax charge, so that advice can be provided to employees and paid for tax-free. That would extend a benefit-in-kind exemption similar to what we see when advice relating to settlement agreements, or payment for CV writing and recruitment advice upon redundancy, is duly paid for by an employer tax-free.

In my view, the Bill is fit for purpose and I very much support it.

[Frank Field (Birkenhead) (Lab)]

I wish to speak to amendments (b), (c) and (d) to new clause 9, which stand in my name. As the House might know, they arise from the work that the Work and Pensions Committee did on miners’ pensions. For most people, decisions about moving pension capital are made towards the end of their lives, but miners had to decide where they should safely put their pension savings as a result of the change in the ownership of their industry.

Given the warning from the hon. Member for Airdrie and Shotts (Neil Gray) that we may not get on to the second set of amendments, I should mention that I have some amendments in that group to raise with the pensions Minister. Perhaps I may address two points to the Economic Secretary, but first I thank both Ministers for the way they have engaged with the Work and Pensions Committee for our report and in our meetings. We are immensely grateful to them. On some issues, I have joined my Front-Bench spokesmen because we have been pushing the same measures and interests.

I wish to raise two points that I hope the Economic Secretary will say will be added to the Bill. First, not only should cold calling become unlawful, but any information that arises from it should not be used for commercial purposes—that is, in respect of pension savings. Secondly, would it not be sensible to use the opportunity presented by this Bill to add the Financial Conduct Authority to the list of bodies in the Government’s policing arm to counter activities that unlawfully undermine people’s pension savings by trying to persuade them to move their assets in one way or another?

In the interests of getting on to the second set of amendments, I conclude my comments.

Draft Enhanced Partnership Plans And Schemes (Objections) Regulations 2018

Lord Mackinlay of Richborough Excerpts

Wednesday 7th March 2018 General Committees

[Craig Mackinlay (South Thanet) (Con)]

It is always a pleasure to serve under your chairmanship, Mr Rosindell. I am trying to organise a new bus service in my constituency. One of the main providers, Stagecoach, a national company, has decided to reconfigure some services along the A257, which runs between Sandwich and Canterbury, leaving a lot of smaller villages entirely off its service. The benefit for Stagecoach, and for people who live on that route, is that the service will now run every 20 minutes, but the village of Staple, for example, now has no service whatsoever.

I am trying to work with a community transport provider to put on a bus that will meander through some of the villages of South Thanet. Looking at section 22 of the Transport Act 1985, I believe the type of bus I am looking at would qualify, so it would not be a relevant exclusion under the statutory instrument we are considering today. We are seeing some services across the country being taken away, obviously through lack of use, and some local transport authorities are unable to provide the support they once used to provide, and for good reason. I just want a little reassurance that such community buses, which may have a view to making some profit, because things have to be replaced over time, will not be disadvantaged as a result of this.

In the route that I am considering, I have the full support of Stagecoach, which is the provider that has decided to take the service away, but I envisage that in some areas the clear recognition of what a community bus is might not be quite what is set out in the legislation. I would not want such a bus to be crowded out by a bigger provider that wants to keep control of a route that serves a community that desperately needs it. Will the Minister assure me that, as this scheme progresses, I can work with the Department to ensure that it has the support it needs so that it fits the bill?

Community Bank Closures

Lord Mackinlay of Richborough Excerpts

Thursday 8th February 2018 Commons Chamber

[Craig Mackinlay (South Thanet) (Con)]

We have had a debate of extreme unity, between parties, between regions and between countries. It is fair to say that every MP in the House is concerned about the rapid closure of the banking network. I particularly wish to salute the hon. Member for Stoke-on-Trent North (Ruth Smeeth).

It feels like we are seeing a rapid change in high street banking, at a rate that I have never seen before. The reason for that is probably to do with us—the consumer. We have gone down the route that the banks have encouraged: taking the contactless route and using mobile and internet banking. We no longer use cheques for our transactions, because, first, we cannot find our cheque book, and secondly, we have to find an envelope and a stamp.

We have all fallen, probably rightly, for the seduction of the ease and speed of online banking. As my hon. Friend the Member for Chichester (Gillian Keegan) said very clearly, the volume of cash transactions in society is now below 50%. Even though we have the advance of the cashless society—I am sure that is warmly welcomed by the Treasury, because it means that most transactions can be appropriately taxed—it will be a very long while, probably a number of decades yet, before cash is completely out of the system.

There are a number of cash businesses; every constituency has them. My fear is that, when banking facilities move further and further away from those businesses, the amount of cash that is held in their premises and the homes of their owners, and perhaps in their safes, will become bigger and bigger, and with that will come security risks. There are security risks for the staff who are responsible for taking that cash to a bank that is increasing in size and further away.

[Ruth Smeeth]

One issue that has been raised with me by my constituents is to do with community groups that fundraise and hold big one-day festivals. They generate cash on that day, but, unlike businesses, which may be able to mitigate some of the problems, they may have volunteers who never have done anything like it before. That is a huge issue. Unfortunately, the post office will take cash deposits of only £2,000, which makes it even harder for them.

[Craig Mackinlay]

The hon. Lady makes the perfect point. My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) said very clearly that, when charities hold grand county fairs, there may be temporary traders who do not have contactless facilities and will not at any time that I can foresee, which makes it a very cash-based business. There are also clubs and societies that rely on cash and cheques for the small transactions among themselves.

I recall, not that long ago—I do not want to single out NatWest for any particular criticism—an advert that said, “We are open all the time. We are keeping our branches.” It was criticising its competitors, saying, “Ah, look, our competitor banks have made your bank into a new trendy wine bar.” I am afraid that we are seeing far too many of those across the country. I recall very clearly that my first bank account was at Lloyds 33 years ago. That branch, which had been there for 50 years or more, is now a quite nice Cypriot restaurant. That highlights the point that the network is disappearing in my constituency in particular. Broadstairs has lost NatWest and Lloyds in this last year alone.

The hon. Member for Clwyd South (Susan Elan Jones) mentioned her petitions. I also generated a petition, and the regional director for NatWest very kindly came to my offices and I delivered it to him. I received the warm words, “We’re consulting.” But of course, the outcome was probably determined some time before the petition was even thought about. Sandwich, one of the best preserved medieval towns in the country, has lost HSBC, Lloyds and NatWest in the last 18 months alone. Broadstairs and Sandwich are both now left only with Nationwide, which I salute for staying true to its roots in service to the community and maintaining its branch network.

We have seen the banks retreat from the smaller communities into the major conurbations and shopping centres. I do not know the experience of other hon. Members, but whenever I pay in a cheque—my heart sinks when I receive a cheque in the post, because it means I have to wander somewhere to do something with it—the queues seem as long as they ever were.

Much has been said about the post office network, which is fantastic, but it is not always available and the queues are horrendous. The post office has closed in the small village of Ash in South Thanet—I say village, but it is getting towards town size, with a population of 3,500. We hope that the post office will be resurrected in a new branch or shop, but there is currently absolutely nothing available for the people of Ash, who are five miles from Sandwich, 16 miles from Canterbury and eight miles from Ramsgate.

Why do we not all use mobile apps and the internet? Well, that is all very well, but I do not want the elderly to be forced into accepting that type of banking, and people who have difficulties but are managing independent living need help with those kinds of facilities. My father is in his 80s, and is fit and well, but I do not want him to use mobile banking under any circumstances, because it is not uncommon for him to say to me, “Oh, I’ve had an email from Santander and I don’t even bank with Santander.” That is exactly the point. Many of us here, particularly those who are younger than me, are very internet-savvy and would recognise a scam banking email, but many of the elderly would not recognise it and might respond, giving up their internet banking details.

There are clarion calls across the House, mainly—dare I say?—from the Opposition, that it is up to the Government to do something. We often hear Members saying that the Government should do this or the Government should do that. In fact, we see it on the Order Paper on an almost daily basis. I do not think that this is a matter for the Government, although they can help to inform the debate. This afternoon, Members from all parties are saying loudly and clearly to the banks, “Stop what you’re doing and start thinking again about the communities you serve.”

Much has been said about the opportunity for joint banking facilities. That would be a very sensible route to take. I appreciate that a premises costs a lot of money, as it has to be heated and there are business rates, staff and security to pay. But surely three, four or five of the major banks could come together in some kind of grand banking hall, sharing facilities so that counter service is available. The call today is, “Banks, please do something.” They could also extend the availability of their mobile, caravan-type, irregular banking facilities that can go to smaller communities; I cannot see why that option should not be available.

We are all responsible for this situation. I am still a bit of a cash person. I even go into the bank and sign a cheque for cash. It was not many years ago that the cashier said, “Why don’t you use the cash point?” Of course, I do use cash points, but if I am passing the bank I often cash a cheque. I said, “Don’t put yourself out of a job. If more and more of us do that, you’re sounding the death knell of this branch.”

We see these changes here in the cafés in this House. I am always quite amazed that some of the younger people who work here will use a contactless card for their sandwich and a cup of coffee costing £1.90. I am not like that, but I can see that my own level of card use is increasing as the years go by. At the moment, I will use a card over the level of £20, but I am increasingly tempted to go for the contactless card under that £20 limit.

I recommend that Members encourage our constituents to get into the banks that still exist and use their counter facilities, because then the banks will not be able to say, “We’re closing because we’re not getting used enough.” The cross-party clarion call from this Chamber today has to be: “Banks, please stop. Let’s think again. Let’s work together. We want more joint facilities and more mobile caravan-type banking facilities going to our communities.” We can all do our bit by getting into the banks and using them.