Ministerial and other Maternity Allowances Bill

Edward Leigh Excerpts

2nd reading & 2nd reading: House of Commons
Thursday 11th February 2021 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

rose—

[Sir Edward Leigh (Gainsborough) (Con)]

rose—

[Penny Mordaunt]

If I may, I will make a little progress.

I particularly thank the hon. Member for Leeds West (Rachel Reeves) for her engagement and her commitment to the work that we wish to undertake following the Bill to address the other issues that need dragging into the 21st century.

[Penny Mordaunt]

I thank the hon. Gentleman for his intervention, but it is slightly beyond the scope of this particular Bill. In fact, the beneficiaries of this Bill are indeed very narrow and I shall comment on that further in a moment. I know that my colleagues in the Department for Business, Energy and Industrial Strategy and elsewhere in Government are clearly looking at a whole raft of long-overdue issues. I am sorry that the pandemic has delayed responses to consultation for very understandable reasons, but his points are well made. I am sure that, throughout the course of this debate and Committee stage, hon. Members will want to touch on the situation facing people other than the handful of individuals that we are concerned with this afternoon. On moving this Bill today, I do so with humility in recognition of that.

[Sir Edward Leigh]

I warmly support the Bill, but can Her Majesty’s Government confirm that only a biological woman can have a baby? Will the Minister therefore explain to me why the Bill refers to “a person” and not to “a woman”? If we are going to adopt extreme gender ideology, why are the Government doing it by stealth and why can we not have a transparent debate on the matter? This insults the dignity of many women.

[Penny Mordaunt]

I hope to be able to go into detail about this later in the debate. I know that many Members will want to speak to this issue, and I will want to hear what they say, but I want to reassure hon. Members across the House that there is absolutely no intention of doing that. This is not a policy decision around language, and the Government will still use the word “women” in all documents, as is our policy. The issue is a particular drafting issue, and I can come on to the detail later, in Committee. I hope to be able to give all Members some comfort today about the language that we will be using. I hope that my right hon. Friend will allow me to leave it there for the moment, but his point is well made and very well understood by myself and the rest of Government. I hope that, by the end of today, people will be reassured on that front.

Although they are outside the immediate scope of this Bill, I know that there are considerable and long-standing concerns about the provision of support for hon. Members in this place who wish to take maternity leave. This has been highlighted by many colleagues across the House. There have been some improvements in this area in recent years, and I commend Mr Speaker and his colleagues and the House authorities for their continuing support for reform in this area, but clearly more is needed, and I hope that the cross-party work that follows this Bill may afford us some opportunities to address those outstanding matters.

Returning to the Bill, it would be reasonable to ask why the Government do not in such circumstances simply take on another Minister as maternity cover. The situation is that there are no fewer than three Acts of Parliament governing the issue of ministerial numbers and pay and, more pertinently, the relevant restrictions on them. Until now, the limits on the number of salaries that can be paid overall, and for individual officers, have left the Government with limited flexibility to appoint cover should a Minister want to go on maternity leave. In a nutshell, for someone to be appointed to cover, and for that individual to be paid, the temporarily outgoing Minister would have to resign. This Bill puts an end to that wholly unacceptable situation. Instead, it will enable a Minister to take up to six months’ paid maternity leave to care for their newborn child, subject to certain conditions and at the discretion of the Prime Minister, while remaining a member of the Government.

This provision will be similar to that available to members of the armed forces and the civil service and, significantly, it responds directly to a recommendation made in 2014 by the all-party parliamentary group on women in Parliament. The Bill does not try to confer equal terms or provide absolute parity with maternity leave provisions for all employees and workers. Both adoption leave and shared parental leave are important provisions, but they are not included in this piece of legislation. They are complex issues that require further consideration in the wider constitutional context, but they are not impossible, and I will return to those issues shortly.

On paternity leave, the current statutory entitlement for all new fathers is two weeks. I am pleased to say that this absence can be accommodated within existing practices, should a Minister wish to take paternity leave. The Government recognise that new fathers may want even more flexibility to support their partner following the birth of a child, and I am glad to confirm that we will consider this as part of our further work. The House will also be aware that the Government recently consulted on parental leave and pay for employees, and we are due to respond to that consultation in the near future. This work will provide us with a valuable perspective on how the existing provisions function, and any future proposals for Ministers will be developed with these conclusions in mind.

Some Members hoped for this Bill to address other issues of parental leave. I mentioned earlier the significant improvements that have been made to make this House more family-friendly, and the provisions that are still needed. The Government agree that both Parliament and the Government should seek to lead from the front on working practices, providing as much flexibility as possible to office holders to aid the effective discharge of their duties. I am very conscious that this Bill relates to a subset of ministerial and Opposition office holders—a payroll of just 115 people. It is also solely concerned with maternity leave. I shall not go into the technical detail of why the other matters are not in the Bill, but let me be clear from the outset that we will bring forward proposals to address those outstanding issues. We looked at putting many of those issues in this Bill. That has not been possible, but we do want to address them swiftly and have been discussing with colleagues across the House how we might do so.

I also know that Opposition post holders—in fact, Members from both side of the House—have for a long time expressed concerns about provision for maternity leave under the Independent Parliamentary Standards Authority scheme. IPSA is independent, and for good reason. In this particular respect, I am grateful for the engagement of my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), the Chair of the Women and Equalities Committee. I know that many Members will want to address these other issues, and I will reserve the bulk of my remarks on them until my concluding speech on Second Reading. In the meantime, I draw colleagues’ attention to the Prime Minister’s written ministerial statement committing the Government to present a report to Parliament setting out considerations and proposals on these issues.

The issues with the Bill also touch on the fact that a number of Lords ministerial posts are unpaid. The Prime Minister has undertaken that the Government should look at the use by successive Administrations of unpaid ministerial posts. Clearly the Bill does not relate to anyone outside the ministerial pipeline or anyone outside Parliament. In bringing this Bill to the House, which I hope will gather wide support, I do very much recognise the context. The terms for those in the armed forces and civil service are the terms on which this Bill is pegged. They are far more generous than the public sector average, and many people will be in receipt of far less than that average.

I am sure that some Members will want to focus this afternoon on other issues that people are facing, as I have already set out. I just want to outline some of the detail of the Bill, but I will be very brief in doing so and will go into further detail later. Clauses 1 to 3 deal with the designation of a Minister on leave, setting out the mechanism that allows Ministers to take up to six months’ paid maternity leave. Clauses 4 to 6 set out the arrangements relating to six months’ paid maternity leave for certain office holders in Her Majesty’s official Opposition. Clause 7 contains the usual final provisions.

The second part of the Bill makes provision for certain Opposition office holders—namely, those listed in the Ministerial and other Salaries Act 1975—to take up to six months’ paid maternity leave. In contrast to the arrangements for Ministers, Opposition office holders who are to take maternity leave would stay in post. The Bill authorises a payment to a nominated individual, who, at the discretion of the Leader of the Opposition in the relevant House, is to cover the office holder’s role on similar terms as those for Ministers that I have already outlined.

The difference in approach reflects the fact that Opposition office holders are not appointed by the Prime Minister and do not have statutory functions in the way that a Secretary of State or a Law Officer does. It is therefore more straightforward for an individual to provide the necessary maternity leave cover while the original office holder remains in post. The arrangements may last for up to six months, and the eligibility criteria are the same for those in relation to Ministers. The Bill leaves it to the discretion of the Opposition leader in each House to appoint individuals to these temporary covering roles. Only one person can be appointed to cover an office holder’s post at any point during the period of leave. However, should the Leader of the Opposition wish to change the appointment, they have the discretion to do so.

Clause 5 builds on these provisions and outlines how the allowance payable should be calculated, how payments are administered and when payments should end. As with the provisions for Ministers, the person appointed to cover an office holder’s role should receive a monthly allowance that is equivalent to the office holder’s monthly salary. This financial arrangement should continue for as long as the individual is fulfilling the responsibilities of the role, but for no longer than six months. This allowance, as is the case with Opposition office holders’ salaries, is to be paid from the Consolidated Fund.

The final provisions relating to Opposition office holders are set out in clause 6, which establishes the relationship between the appointed individual covering an Opposition office holder and existing legislation. As is the case with a Minister on leave, where the Opposition office holder is a Member of the House of Lords, she is not eligible to claim the so-called Lords office holder allowance provided under the Ministerial and other Pensions and Salaries Act 1991 while on maternity leave. However, the individual appointed as maternity cover by virtue of these provisions is entitled to claim that allowance for the duration of the appointment. That is because the allowance is to reflect the work undertaken in the House, such as late-night sittings.

The Constitutional Reform and Governance Act 2010 makes provision for both Members’ and Ministers’ pension schemes. Both Ministers and Opposition office holders are entitled to pensions under the Ministers’ pension scheme. Given that there is no material change to their position, there has been no need to make provisions in the Bill to ensure that their salary remains pensionable during their maternity leave. However, the individual appointed to cover the post is entitled to the Ministers’ pension scheme for the duration of their appointment, in relation to the allowance paid to them for the role.

Finally, clause 7 makes the usual provisions necessary for the Bill to operate in law, including defining its territorial extent, setting out its commencement arrangements and providing the Bill’s short title. The Bill comes into force on Royal Assent and will thus be of immediate benefit to those wishing to take maternity leave, should there be anyone who is in those circumstances. As I said, I am very aware of the issues that the Bill has brought to light with regard to language. I know that there are time pressures on the debate, but I will address those issues in more detail in the course of the afternoon.

As my right hon. Friend the Prime Minister set out in his written statement on this topic last week, the Government have undertaken to look at considerations and proposals for Ministers and Opposition office holders in the other areas not covered by the Bill. We are committed to building more widely on the progress that the Bill represents and will present a report to Parliament setting out those considerations. For the reasons I have outlined, I hope that all Members of the House will support the Bill, and I commend it to the House.

Equitable Life

Edward Leigh Excerpts

Thursday 21st January 2021 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

I thank my hon. Friend the Member for Harrow East (Bob Blackman) for the way that he introduced the debate, and I am proud, with him, to be a sponsor of it.

This has turned into a saga, which has now been ongoing for decades. The facts of the original case are well known; we have seen them demonstrated again and again. There were dubious practices. This was a company that was too big to fail. Perhaps, as my hon. Friend said, there was a conspiracy to stop matters coming to light before they did. There was a culture of manipulation and concealment.

In addition to the Treasury’s own 2004 report, there have been other reports: the report from Lord Penrose in 2001, and a report from Ian Glick and Richard Snowden. All those showed lessons to be learned, both in terms of corporate culture in financial services and in terms of the state’s role in overseeing the sector sufficiently. Everyone acknowledges that the company was primarily at fault, but the state has a role and a responsibility in regulating financial services. All business today is conducted on the understanding that ultimately, the law and the state ensure an honest and transparent playing field.



More than a decade ago, in 2010, George Osborne announced a £1.5 billion package in compensation. These payments were to begin in mid-July of 2011, but by the end of 2011, many of my affected constituents had not received a penny. Not only were there delays in payments, but some payments were made for incorrect amounts—sometimes wildly inaccurate. These were caught not by the Treasury, but by policyholders themselves. There is also a lack of transparency over how policyholders can verify the amount they have received is correct.

The Equitable Members Action Group has pointed out:

“There is serious doubt over the accuracy and reliability of the methodology used by the Treasury to calculate what’s owed.”

The Treasury insists that there were no mistakes. If so, how can Government explain inaccurate payments? One hundred and sixty complaints of inaccuracy in payment were upheld, yet EMAG reports only eight received recalculations. The Minister needs to explain how this happened.

We must remember that many hundreds of thousands of policyholders were affected by this scandal. The Government scheme offered only partial compensation. I know that full compensation would be expensive, but as my hon. Friend the Member for Harrow East said, let justice be done and let there be full transparency. People need to save for their retirement. Living off their state pension affords little comfort, and most people do not realistically expect to be able to live off it. Very few young people even think about their retirement. But these policyholders did save for their retirement. They are now getting on, and they are elderly and often vulnerable.

Over the years, I have received terrible, sad letters from many of my constituents, some of them received as much as 10 years ago. Some of them will now, I am afraid, no longer be with us. As one said, and this was nearly 10 years ago:

“This is a matter of urgency.”

Another said:

“Sadly my husband died four years ago without the assurance that…he…would ever be recompensed.”

One wrote:

“I am 89 years old, now a widow.”

So I repeat the call from my hon. Friend the Member for Harrow East: let us have an inquiry from the PAC, let us have the full light of transparency on this and let justice be done for some of the most elderly and vulnerable—and responsible—in our community.

Financial Services Bill

Edward Leigh Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[John Glen]

I am very happy to respond to that. That is why, over the last three years, I have engaged with the problem and worked with the FCA to change the lending criteria so that an estimated 125,000 of the 250,000 mortgage prisoners have been able to switch to more affordable mortgages if they are not taking on lending and are not in arrears. This a complex problem. I am still focused on the 55,000 that we estimate are in that difficult position. I will continue to work with stakeholders and industry representatives to find solutions, working closely with the FCA, but that does not permit me simply to allow any intervention. I did start my remarks with a concession on something that I thought was constructive.

Let me move on to new clause 26, which would require a lender to seek a borrower’s permission before transferring their loan. That would give rise to significant financial stability concerns, especially if a firm was entering liquidation, since it would prevent the timely transfer of the mortgage book. Selling a mortgage book can also represent a sensible way for a lender to manage its balance sheet and does not change the terms or conditions of a borrower’s mortgage contract.

I turn to a number of amendments relating to EU exit and financial services. New clause 12 would require the Treasury to assess the impact of adopting different rules from those of the EU through the Bill. It is right that the UK is able to adopt rules that best suit our own markets. The Government have published an impact assessment alongside the Bill, so the new clause is unnecessary.

[Sir Edward Leigh (Gainsborough) (Con)]

There is one overseas territory that is intimately connected to the EU: Gibraltar, which values its financial independence. I would just like to use this opportunity—I am sure the Minister will not mind commenting—to reassure the people of Gibraltar that their financial services are absolutely safe under this Government and this Bill.

[John Glen]

I am very happy to do that. Indeed, the Bill makes provision to ensure that there is ongoing certainty for financial services—particularly the insurance industry, which is so significant to the Gibraltarian economy.

New clause 20 would require the Government to review the cost of divergence from EU rules. I just do not accept that characterisation. Regulatory regimes are not static. There are a lot of myths around this area of divergence. Rules evolve all the time. Where we make changes to our frameworks as they stand today, those will be guided by our continued commitment to the highest international standards and by what is right for the UK’s complex and highly developed markets, to support our world-class environment for doing business. The Bill is the first part of that journey.

New clause 8 would require the Government essentially to report on the status of the EU’s considerations about UK equivalence. That is an autonomous process for the EU, and therefore that is not something that the Government can agree to do. The Chancellor recently announced a package of equivalence decisions—17 decisions out of the 30 that we had to make for the EU—and I will keep the House updated on the UK’s approach to equivalence, just as I did throughout the transition period.

I turn to new clauses 15 and 16, and amendments 3 and 4, which relate to how the regulators’ actions under the Bill will be scrutinised by Parliament. The UK’s regulators are internationally renowned as leaders in financial services regulation, and the Government believe that it is right that powers to implement often highly complex rules are delegated to the bodies with the appropriate technical expertise.

The FCA is already accountable to the Treasury, Parliament and the public. There is a statutory requirement for the FCA’s annual report and accounts for the financial year to be laid before Parliament by the Treasury, and a requirement to hold an annual public meeting at which the annual report can be discussed. There is currently nothing preventing a Select Committee of either House from reviewing the activities of the FCA at an inquiry, taking evidence, calling witnesses and reporting with recommendations. The Treasury recently published a consultation document on the review into the future regulatory framework for financial services, which seeks to achieve the right split of responsibilities between Parliament, Government and the regulators, now that we have left the EU. That is a significant undertaking that we must get right, and I look forward to continuing to engage with Members as part of that review.

I have spoken at length about a number of topics that are not directly addressed in the Bill. I will now address amendments relating to some of the measures that make up the Bill itself. I have already said that the prudential measures contain accountability frameworks, and I will begin by addressing a number of amendments that seek to add additional elements to that framework. As I said to the Public Bill Committee, amendments 1 and 2, along with amendments 9 and 12, all add considerations relating to climate change to the accountability frameworks. They are not necessary, as the Bill grants the Treasury a power to specify further matters to the accountability framework at a later date. I can assure Members across the House that the Treasury will carefully consider adding climate change as an issue to which the regulator should have regard, in the future. However, any such addition needs careful consideration and consultation on how it can be best framed. Therefore, the Government cannot support these amendments.

Amendments 8 and 11 would require the FCA and the PRA to have regard to the impact of their prudential rules on frictionless trade with the EU. Similarly, amendment 10 would require the PRA to have regard to the UK’s relative standing when making rules on capital requirements. These amendments are unnecessary. The accountability framework introduced by the Bill already requires the regulators to consider the impact of their rules on financial services equivalence. That is the main mechanism for financial services relationships between the UK and all overseas jurisdictions, not only the EU, and the Bill already requires the PRA to consider the UK’s standing in relation to other countries and territories.

Amendments 13 and 14 relate to the Help to Save scheme. We expect the majority of account holders to make an active decision about where they want to transfer their money where their accounts mature. However, I recognise that some individuals will become disengaged from their accounts, and before I turn to the specific amendments, I want to update the House on the Government’s plans for supporting these disengaged customers. Successor accounts, which are enabled by this clause, are one of the options that have been under consideration. Having carefully assessed the options, the Government have decided not to use the power provided by this clause at this point. This is primarily because of the operational issues, which mean that we would not be able to guarantee that every customer would be able to have a successor account opened for them automatically. I was therefore unable to conclude that this approach represented value for money. Instead, the Government propose to support customers who do not provide specific instructions for the transfer of their money, by ensuring that they receive their funds into their nominated bank account—the account into which they already receive their bonus payments. If the bonus payments are paid into that account, the principal amount will revert to that account. This will ensure that disengaged customers will be reunited with their savings and bonus payments.

Amendments 13 and 14 would, in effect, extend the four-year term of the Help to Save scheme by providing a guaranteed bonus for the successor account. The aim of Help to Save is to kick-start a regular long-term savings habit and encourage people to continue to save via mainstream savings accounts. The Government’s view is that a four-year Help to Save period is sufficient to achieve this objective. Amendment 14 also seeks to mandate the contacting of customers regarding the transfer of balances to a successor account. This amendment is unnecessary, as all customers will be contacted ahead of their accounts maturing, to encourage them to engage with their accounts and to provide instructions on where to transfer their funds.

New clause 2 would require the Treasury to publish a report on the anticipated use of the debt respite scheme. The expected demand and take-up of both elements of the debt respite scheme have been quantified to the extent possible at this stage and published in the appropriate impact assessments. I share right hon. and hon. Members’ determination that these schemes should work for those who need them. The Government will of course closely monitor both schemes’ usage and consider the impacts of covid-19 and the wider economic recovery on them. I am afraid that producing a report within six months evaluating the impact of changes made by clause 32 on levels of debt across the UK, as proposed by new clause 9, is not possible, as the regulations establishing a statutory debt repayment plan are unlikely to have been made and implemented by that point. I can assure Members that the Government are committed to properly evaluating both the statutory debt repayment plan and the breathing space after their commencement.

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 1st December 2020 Commons Chamber

[Steve Barclay]

First, the approach of the United Kingdom Government to these Scottish payments is exactly the same as applied recently in Wales. To further reinforce the point that I made a moment ago, while decisions on whether to exempt these payments are reserved, the Scottish Government will keep all the income tax receipts from these payments, so if they wish NHS and care workers to receive £500 net of tax, which is what they say is their wish, they can simply increase the value of the payments going to them. That is the point of substance. That is the point they do not want to engage on.

[Sir Edward Leigh (Gainsborough) (Con)]

Does anybody in this Conservative Government still believe in a low-tax, deregulated and small-state Britain? In which case, what are they going to do about it? As they prepare for the Budget, may I suggest one that reduces, not increases taxes on entrepreneurs and wealth creators, to kick-start the economy?

[Rishi Sunak]

That is music to my ears. My right hon. Friend is absolutely right: this is a Government who believe in a low-tax dynamic economy. He will also appreciate that, in the midst of the crisis that we are facing, it is incumbent on the Government to provide unprecedented support to preserve the economic capacity of our country. But as soon as we get through this, I, like him, look forward to returning to that dynamic free market economy that we both passionately believe in.

Support for SMEs: Covid-19

Edward Leigh Excerpts

Tuesday 10th November 2020 Westminster Hall

[Sir Edward Leigh (in the Chair)]

We have quite a few speakers, but if everybody keeps to under five minutes, everybody can get in. Before speaking, can you look at the clock and make sure that you sit down within five minutes, however interesting your comments may be? Thank you.

--- Later in debate ---

[Several hon. Members rose—]

[Sir Edward Leigh (in the Chair)]

Order. I call another Yorkshire Member, Mr Hollinrake.

Public Health Restrictions: Government Economic Support

Edward Leigh Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

As the Minister responsible for Government spending on behalf of the Chancellor, I would want to look closely at why the school in the hon. Gentleman’s constituency is saying that that very significant uplift in funding for schools last year does not appear to be reaching the frontline. The education funding settlement in the 2019 spending round should more than cover the cleaning costs. I will happily look at that, but if he looks at the funding settlement allocated in SR19, I think he will accept that it was a very generous one.

[Sir Edward Leigh (Gainsborough) (Con)]

It is not surprising that more and more Members are calling for more Government support, because the Government are forcing more and more businesses, particularly in the hospitality sector, out of business. The Chief Secretary says that his priority is to help business. The best way to help businesses is to let them get on and do business. We are going bankrupt as a nation—there will not be the money to pay for the NHS or pensions. What is the Treasury doing to row back against other parts of the Government and insist that we must allow British business to operate? He did not answer the question from the Chairman of the Select Committee, my right hon. Friend the Member for Central Devon (Mel Stride)—what is the scientific evidence for pubs closing at 10 o’clock? Is he leading the fight to help Britain to stay in business?

[Steve Barclay]

With respect, I did answer it. I pointed to the projection given by the chief medical officer and chief scientific adviser at that time, the SAGE guidance and the fact that the package of measures put in place by the Prime Minister has resulted in a lower infection risk. The CMO and others would recognise that this is a range of measures. My right hon. Friend says that the Government have gone too far and that there is no evidence for the curfew. The tenor of most of the questions one gets is that we have not moved far enough and should be taking more drastic actions. That speaks to the fact that this is a balanced judgment. One needs to look at the range of measures we are taking, and that is what I would refer him to.

Areas with Additional Public Health Restrictions: Economic Support

Edward Leigh Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

We have provided significant funds to Northern Ireland—an additional £2.2 billion—to cope with the pressures of the pandemic, and that has enabled 300,000 jobs in Northern Ireland to be protected through the furlough scheme, along with an additional 78,000 jobs through the self-employed income support scheme. Indeed, the package of measures that my right hon. Friend the Chancellor announced in his winter plan applies in terms of additional support for Northern Ireland as it shapes its response to the pandemic.

[Sir Edward Leigh (Gainsborough) (Con)]

Does the Chief Secretary agree that the best way to help business is to let business get on with the job, as free as possible from Government control? Will he note that when the Treasury argues against further lockdowns for business, scores of Tory MPs and tens of thousands of businesses cheer it on? After all, to quote the Chancellor, is it not our “sacred” duty to “balance the books”? What is the point of solving this problem by borrowing money? Is that not the socialist way? What would be the point of a Conservative Government if we did that?

[Steve Barclay]

As a former Chair of the Public Accounts Committee, my right hon. Friend is quite right to focus on the importance of value for money and protecting the interests of the taxpayer. He knows me well enough to know that I share that sentiment. On our wider response, it is important that we get the right balance between responding to the virus and doing so in a way that is supportive to the economy. It is a false choice to see this as a choice between health and economics; they are clearly intertwined and we need to work together in shaping our response.

Economic Update

Edward Leigh Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

When it comes to capital investment, it is important to put in context what our existing budgets were for this year. I announced £88 billion at the Budget for this year. That represents a 20% increase on our capital investment plans in the previous year and, as a percentage of GDP, the highest amount that we have invested in capital since the ’70s. The starting base level for our capital investment is already exceptionally high. We have brought £5 billion of additional projects forward into this year, but, taken in the round, it will be the most we have ever spent on capital in real terms for a very, very long time.

[Sir Edward Leigh (Gainsborough) (Con)]

Will this young, vigorous Chancellor not be too cruel to an old Thatcherite for making this deeply unfashionable point? There are no good, long-term subsidised jobs. As we saw with the new Labour make-work jobs and with furlough, sooner or later they are subject to fraud and market distortion. Will he confirm that the only good, long-term jobs are based on the Government ensuring deregulation, market flexibility and tax cuts on entrepreneurship, with a plan to repay the national debt? Otherwise, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) once said, there will be no more money.

[Rishi Sunak]

I wholeheartedly agree with my right hon. Friend. He is absolutely right: these interventions are specific to the moment that we face now. They provide support for young people at this moment of acute crisis. In the long term, only a dynamic market economy can provide sustainable, long-term employment for young people and beyond. In the medium term, once we get through this crisis, we must return our public finances to a sustainable place.

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 7th July 2020 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

Whether he plans to (a) reform and (b) simplify inheritance tax.

[The Financial Secretary to the Treasury (Jesse Norman)]

Inheritance tax makes an important contribution to the Exchequer. The current threshold of up to £1 million for a qualifying married couple or civil partnership means that 96% of all estates in 2020-21 are forecast to be able to pass on their assets without any inheritance tax liability. Any reform or simplification of inheritance tax would be considered as part of the usual Budget process.

[Sir Edward Leigh]

When are we going to fulfil numerous promises made as long ago as before the 2010 election, by George Osborne, to help middle-class people pass on more of their property to the young? After all, that is a priority for the young. While we are about it, can we hear from the Chancellor and the Prime Minister less about high-spending lefties like President Roosevelt and more about good Conservatives like Ronald Reagan and Margaret Thatcher—less about subsidies and more about tax cuts and tax simplification?

[Jesse Norman]

I hesitate to give my right hon. Friend a history lesson, but he will recall that Ronald Reagan was a deep admirer of FDR and quite a heavy spender in his own right. Inheritance tax is paid on only one in 25 estates, and therefore it is not quite as large an issue in terms of the number of people affected as my right hon. Friend suggests. We take these issues very seriously and return to them recurrently at fiscal events.

Finance Bill

Edward Leigh Excerpts

Report stage & Report stage: House of Commons & Report: 1st sitting & Report: 1st sitting: House of Commons
Wednesday 1st July 2020 Commons Chamber

[Dr Huq]

My hon. Friend is so much more knowledgeable than me. Lots of my constituents cannot afford to buy their own home and are in rented accommodation, so that does not even apply to them. They are in beds in sheds—maybe I should not dob them in, but that is a phenomenon in the London Borough of Ealing.

Again, HMRC must accept responsibility for not communicating regularly with people. It could have acted sooner to avoid this sizeable group of people who went into these remuneration schemes having to pay back sometimes hundreds of thousands of pounds at a time. IR35 is being rolled out now, so the deferral is obviously welcome, because these things can be fixed in real time, as long as the deferral is not just pushing punitive measures further away. The Government need to urgently commit to a full review of tax reliefs.

While the debate is about job creation, I want to flag, as my hon. Friend the Member for Liverpool, Wavertree pointed out, that the global pandemic we are in seems to be a bit of a cover for certain companies to behave badly. British Airways and Virgin spring to mind as using the coronavirus job retention scheme—the clue is in the name—to do the very opposite. Having accepted furlough funds from the public purse, they are now using coronavirus as a cover for restructuring plans—plans they were always itching to execute—while they believe the eyes of the world are diverted elsewhere. I say to the Minister that we need a sector-specific deal for aviation.

The situation is the same for the creative, cultural and arts sector. I represent many constituents who work in it. Not for nothing was Ealing long-called a BBC borough. The Questors theatre—the jewel in our crown—is the biggest amateur dramatic venue in the country and it has written to me. It is about to go under. Its rateable value is too high to get any of the reliefs. That is another plea to the Minister.

We were told that, when we left the EU, we would be world-beating on employment rights, and that our rights could exceed those of the bloc after Brexit, but now, with IR35, we are heading for zero employment rights. The Government always said that this would not be a race to the bottom, so they need to put their money where their mouth is. There is nothing like a global pandemic to concentrate the mind. We have heard slogans such as, “We’re all in this together”. To stop all these Government utterances from being just hollow words, we need action. Snappy slogans are not enough.

[Sir Edward Leigh (Gainsborough) (Con)]

It is true that we find ourselves in a very serious situation. The number of workers on UK payrolls was down by more than 600,000 between March and May. Of course, the Government are attempting to redress the situation with the Business and Planning Bill and the Corporate Insolvency and Governance Bill. We also hope that we can end lockdown as soon as possible. Certainly, the Prime Minister is talking the talk in terms of build, build, build. That is all very good. We have infrastructure needs; let us meet them. There are no massive spending projects. The problem with them is that they are often hugely bogged down in cost overruns.

I want to say a bit about tax simplification. That is the genesis of this whole debate on IR35 and the loan charge. There is also our hugely ineffective, inefficient and long tax code—longer than India’s—and that is after 10 years of Conservative Government. I think that there is a new wind breathing through No.10, and I hope that we are going to be bold about tax reform. Are there any taxes that we can abolish completely or replace with simpler alternatives? We have created this massive tax avoidance industry, which has sucked many people with quite moderate means into its claws. Let me cite as one example, inheritance tax at 40%. We have to understand how people act. At a rate of 40%, most people are willing to make a significant investment to reduce the effectiveness of that rate. I am not condoning that behaviour, but if someone were left a million pounds and if the state said that it would take £400,000, they might begin to think that it is worth spending £40,000 or £50,000 on tax advice as a way of lessening their payment of tax. All sorts of complicated trusts and avoidance schemes are available to those who recognise that they can avoid paying tax. The result is less money for the Treasury to spend on the things that we need.

On this debate about the loan charge, it is natural that politicians should want to close down loopholes, but often, in closing down loopholes, we are affecting people of quite modest means. It is true that as a level of complexity involves means, those loopholes are usually available to those who have the resources to investigate them, but not necessarily. An entire industry has been created around how to lessen our tax burden, inheritance or otherwise, and I think that the Government are, in a way, responsible for this kind of behaviour. The people who have taken advantage of these tax loopholes, often of modest means, are simply reacting to our hugely complex tax codes. Taxes need simplifying and they need lowering. I make that point because I hope the Minister will say something in his summing up about this. I hope that he tells us that the Government have an agenda, otherwise we will go on having these debates over and over again. Every time a new loophole is discovered, people will take advantage of it, often with the wrong sort of advice. Then the Government have to close the loophole, creating injustice, which we have heard all about in this debate.

[Sir Iain Duncan Smith]

My right hon. Friend talks about tax loopholes and, yes, that is absolutely clear, but the thing about the loan charge is that HMRC itself was complicit in the process. It was advising and letting people believe that those charges were quite safe and reasonable. Then quietly, it came to the conclusion that they were not and did not make it clear to anybody. In effect, therefore, it is HMRC that has created the tax loophole and then failed to identify it and tell people that they were on the wrong scheme.

[Sir Edward Leigh]

I absolutely agree with my right hon. Friend, and he puts it far more clearly than I have done. I was trying to make the point that he has just made, which is that, ultimately, HMRC and the Treasury are responsible for this in not giving proper advice and in creating an over-complex tax system, and that has created this kind of behaviour. It is natural behaviour and we should not blame the people who have tried to take advantage of these sort of schemes. This complexity kills the economy.

[Sir Christopher Chope (Christchurch) (Con)]

One of my constituents says that because he put in freedom of information requests to HMRC, on two occasions last summer, HMRC paid him a visit at his home. Is that the behaviour we expect from HMRC?

[Sir Edward Leigh]

We have learned to expect that sort of behaviour. As Ronald Reagan said—we have heard about Roosevelt, so why can we not hear from Ronald Reagan, who was a better sort of Conservative as far as I am concerned?—when we tax something, we get less of it, and when we subsidise something, we get more of it. Research from the European Central Bank shows that when the tax burden is raised by 1%, economic growth is reduced by 0.13%. We have heard a lot about job creation, but that change means many fewer jobs. Every time we create taxes, we destroy jobs.

The Office for Budget Responsibility forecasts that the UK tax burden will grow to 34.6% of GDP by 2024, which is the highest tax burden for this country in more than half a century. We think of ourselves as a seafaring, deal-doing, trading nation, but how can we compete when the trend of tax burden is going the wrong way? That is how we will stifle job creation. We must look at a comprehensive reform of our economy, not the usual tinkering under the hood, and we can do some of that through regulatory reform. That is not aiming for deregulation—instead, the Government should ensure that the UK’s regulatory structure is simple, clear, and appropriate. That is the genesis of this entire debate: our tax system is not simple, not clear, and not straightforward.

If we radically simplify the tax system we will spur more activity, so it is a virtuous circle of benefit to the whole of our society. Imagine if all the money spent on corporate or personal tax avoidance—tax avoidance is perfectly legal, I say to the Minister—could be invested in productive activity instead. Imagine all those thousands of accountants going off and taking up machine tools—I know it is unlikely, but at least it is a thought. That would also be fairer, as it would no longer mean that the richer someone is, or the bigger their company, the more they are capable of exploiting complicated tax loopholes.

We know it is simplistic to base our economy on Singapore or Hong Kong—we are a larger country with more complex needs—but on tax policy, the example they have set is applicable. Let us consider per capita GDP of the UK, Singapore and Hong Kong. They were all more or less at a parity in 1989, about five years after I came to this House, with each at around $25,000 a year. All three countries have improved their GDP per capita, but the scale of the difference is notable. By 2016, six years into a Conservative Government, the UK, with its complex tax code, had a per capita GDP of $37,000. Low tax, simple tax Hong Kong was at more than $48,000, and Singapore at $65,000 to our $37,000. We neglect at our peril that opportunity for a huge growth in numbers of jobs, for our per capita GDP and for income for the Treasury. My simple point to the Minister is this: when he sums up, will he say something about tax simplification and tax reduction?

[Mary Kelly Foy (City of Durham) (Lab)]

We are facing an employment crisis unlike anything we have seen in a decade. The impact of coronavirus will undoubtedly weaken much of our infrastructure, leaving many workers unemployed, and businesses on the brink of collapse. Unfortunately, when lockdown ends, the Government seem intent on a return to normality and business as usual, stuck in the past when they should be learning lessons and looking to the future. The Government’s slow reaction cost us as we entered this pandemic, and they cannot repeat that mistake as we emerge from lockdown.

In contrast, my hon. Friend the Member for Oxford East (Anneliese Dodds) has proposed a back-to-work Budget that places jobs at the heart of the economic recovery. That does not mean a sticking plaster solution, however, or jobs with little or no protection for workers. The damage to our economy caused by this awful virus has been severe, but the economic structuring of society was already broken—skewed in favour of the wealthy rather than workers.

Over the last decade of Tory austerity, the Government have launched attack after attack on the rights and protections afforded to working people. Through the promotion of zero-hours contracts, ambiguity in employment status, low pay and lack of protection in the workplace, the Government have encouraged irresponsible employers and abandoned the country’s workers. Before lockdown, 9 million people living below the poverty line—3 million of them children—were in households with at least one person in work. The Government boast of record levels of employment, but they should be ashamed of the amount of in-work poverty. This economic model needs to end.

If this pandemic has shown us anything, it is that the people on whom society relies the most are those least rewarded in pay and respect. Whether it is the poorly paid nurse, the carer on a zero-hours contract or the retail and hospitality staff working shifts so long that they would not be out of place in Victorian society, the people of Britain deserve better. This pandemic has been devastating, but it provides us with an opportunity to shape the economy and society in a way that prioritises the environment and protects workers. That means better pay, shorter and more consistent working hours and job security. Workers need to be able to look ahead into the week knowing that they have work, that their wages will provide a decent standard of living and that their working hours will leave them the time and energy to live their life. The better the conditions and protection for workers, the better their quality of life and the greater their health, wellbeing and sense of worth—it really is that simple.

The pandemic has also exposed the lack of protections for staff in the workplace and how fragile health and safety standards are. The Government must begin to see employment law as a red line, rather than being advisory, and they must properly fund the Health and Safety Executive, so that safety in the workplace is properly enforced. When the Government finally begin to plan for our post-coronavirus society, they must accept that the status quo has not worked, and any attempt to return to business as usual will fail the public. The 33 million workers of Britain deserve more. When society needed them most during this pandemic, they delivered. It is time for the Government to do the same for them.