Public Service Pensions and Judicial Offices Bill [Lords]

Christine Jardine Excerpts

2nd reading
Wednesday 5th January 2022 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Sir Robert Neill), and it was very interesting to hear his views on that aspect of the Bill and the judiciary. It is one of the reasons why— as other Members have mentioned—I do not think that the Liberal Democrats will oppose the Bill, although we may, at a later stage, table a number of amendments, which I will return to later.

As has been mentioned, there have been a considerable number of amendments to the Bill, which is intended, as the Government said, to ensure that we have equal treatment for all members in each of the main public service pension schemes. It would remove unlawful discrimination and bring in the remedy to age discrimination, as identified in the McCloud judgment, enable the Treasury to establish new public service pension schemes, increase the mandatory retirement age for judges, as the hon. Member mentioned, and provide for regulation-making powers. I believe that all of us in this place would support those aims, but the Liberal Democrats have several concerns, some of which the right hon. Member for Wolverhampton South East (Mr McFadden) mentioned. Many of the concerns were raised in the other place in relation to the amount of detail that is left to regulation and direction and what support will be available to members in making important decisions about their future pension planning.

In considering the Bill, we should reflect on lessons that we have learned, or should have learned, from previous, well-intentioned but ultimately problematic pension reforms, when issues of discrimination and unfairness emerged. I am thinking of the unintended consequences, a lack of information and poor communication, the implications of which have characterised the changes to the state pension age for women, particularly those born in the early 1950s. Ministers could do worse than to listen to some of the 6,000 so-called WASPI women in my Edinburgh West constituency talking about the hardship that the mismanagement or miscommunication of complicated pension changes can cause.

Our experts fear that up to 3 million pension holders will be affected by these important changes. Although consultation responses were supportive of the deferred choice method in the Bill, they warned that the complexity of implementing it may have been underestimated, and that was one of the concerns the Liberal Democrats mentioned in the other place. We believe that not enough support is being offered to members of schemes faced with complex decisions that could involve heavy losses. In the other place, we tabled an amendment to require the Secretary of State to issue guidance to help members understand the choice in front of them, and that could include something like a helpline.

We are also concerned about fairness and the disproportionate effect that some of the provisions in the Bill may have on women, and we tabled an amendment in the House of Lords on women and the gender pensions gap. The Government do not seem to have any real policy on how to rectify the problem, and women will potentially be adversely affected by the Bill, given the time they will have taken out of work for childcare and so on.

One last concern, which we may return to, is that raising the mandatory judicial retirement age from 70 to 75 could have a negative impact on the diversity of the judiciary, which at the moment is dominated by older, white men. To return to the statement by the hon. Member for Bromley and Chislehurst, the judiciary—its diversity, its fairness and its reflection of the country—is as important in many ways to our democracy as this place is.

That is all we would want to add at this stage, but we will return to these issues, perhaps on Report, and certainly with some amendments.

Oral Answers to Questions

Christine Jardine Excerpts

Tuesday 7th December 2021 Commons Chamber

[John Glen]

The hon. Member keeps asking “Where is the register?” I will answer the question in a moment. What the Government have done is put in an additional £63 million in the last Budget to deal with Companies House reform, which is one of the areas. We have been the world’s leader in terms of common reporting standards. We were the first country, five years ago, to raise the standard in terms of transparency. We will implement that register when legislative time becomes available.

[Christine Jardine (Edinburgh West) (LD)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Rishi Sunak)]

A month ago, I set out our plan for a stronger economy, protecting and supporting jobs, driving up economic growth and cutting the universal credit taper rate, giving the lower-paid in our society a tax cut worth £2.2 billion.

[Christine Jardine]

In the 2019 Queen’s Speech, the rationale for reform was set out as being to

“ensure our tax system is supporting Scottish whisky and gin producers and protecting 42,000 jobs”—

including many in my constituency. How would the Chancellor square that with the actual proposals, which will tax domestic producers more than those of imported cava, prosecco and champagne; do not take into account how people consume spirits with mixers, the sugar and calorific content or his own Government’s health policies; and actually increase the competitive disadvantage of an important domestic sector compared with the international one?

[Rishi Sunak]

Our reforms of the alcohol duty system usher in a system that is simpler, fairer and better for public health. I am not entirely sure that the hon. Lady has got the details right on this. In fact, for Scotch whisky, this is an improvement because we have levelled the playing field for higher-strength drinks, which the Scotch Whisky Association had been calling for. With regard to the differential between domestic and foreign producers, because English sparkling wine is produced to a lower alcohol content naturally than foreign sparkling wine, it will actually, for the first time, enjoy a tax advantage under the new system. Perhaps most relevant immediately, we also froze all alcohol duties—a half-a-billion-pound tax cut for British people this year.

Finance (No. 2) Bill

Christine Jardine Excerpts

Committee stage
Wednesday 1st December 2021 Commons Chamber

On the national insurance hike, it has been said many times—I make no apology for saying it again—that it breaks a clear manifesto promise of the Conservative party. Even with the increase in dividend taxes in the Bill, the burden still falls disproportionately on the shoulders of the lowest earners, the youngest and those with the fewest assets. We have to ask ourselves whether the Government are on the side of those who work hard, play fair and appreciate the urgency of the climate emergency that we face. Sadly, given the Bill and their opposition to the amendments that have been tabled, I have to say that the answer is no.

[Christine Jardine (Edinburgh West) (LD)]

I confirm that the Liberal Democrats will not be supporting the Bill and will be supporting the Opposition amendments. There are several specific reasons for that, which I have expressed previously, including that the Bill fails to address the cost of living crisis in this country and fails to adequately address the need to have and to shift to a greener, more sustainable economy. It also fails to address the concerns that the hon. Member for Gordon (Richard Thomson) expressed about the changes to the banking surcharge, which strike many people in the country as inappropriate at the moment.

I will focus on one issue that is dealt with by new clause 17, which has been tabled by my party. The Minister mentioned the innocuously titled basis pay rate and the basis period reform. One of the frustrating things about the Bill is that the more we look into the detail, the more we find to object to. Hidden in it are huge accounting changes that will make life much harder for tens of thousands of farming businesses, and other partnerships and sole traders around the country. Under the basis period reform, farmers will have to submit two tax returns instead of one, doubling their administrative burden.

Proud farming communities from Shetland to Shropshire are worried about the costs and burdens that will come with those changes. In Shropshire alone, there are more than 6,000 partners and directors in the sector who are likely to be affected by the reforms. Like many others from communities in the so-called blue wall, they find that the Government are taking them for granted and saddling them with administrative burdens and costs—and yet more promises that somehow seem to be ignored. They will force farmers to submit estimated tax returns when there is no good way of knowing the value of a crop yield when it is still in the ground.

We would like Ministers to put those plans on hold immediately and listen to farmers’ concerns. They should at least offer them an extended deadline, so that they do not have to estimate their profits but can submit just one final tax return. They should also explore the options laid out by the Office of Tax Simplification about changing the tax year to a 31 December end date. Farmers across the country have already seen their basic payments cut by at least 5% and could be facing even more costs. They deserve better. This is unfair and counterproductive, and it is yet another reason why people are disappointed with what they have heard about this Finance Bill.

Therefore, the Liberal Democrats will not vote to support the Bill, but we will support the Opposition amendments.

[Richard Burgon (Leeds East) (Lab)]

As always, it is a pleasure to serve under your chairship, Dame Eleanor. I wish to speak in support of new clause 16, which is in my name, and new clause 8, which has been tabled by my hon. Friend the Member for Hemsworth (Jon Trickett).

Both new clauses aim to tackle the gross injustice of taxes on share dividends being set at less than income tax rates. They are both part of a wider push for tax justice and wealth taxes—a push made ever more urgent by the growing inequality that we have seen throughout the pandemic. I also support the new clause on this issue from the Leader of the Opposition and the new clause on the banking surcharge. It is shameful that the Government are cutting taxes for banks while increasing the tax burden on working families.

Faced with a backlash over their plans to impose tax rises on working people, the Government made a very limited change, increasing the taxes on share dividends by 1.25%. That was done to try to give the impression that they were sharing the burden of the so-called health and care levy equally between ordinary working people and those lucky enough to live off their wealth. But that was just smoke and mirrors, done solely to deflect the media and distract the public, not to help to actually secure economic justice. That is obvious from the amounts that will be raised by the so-called health and social care levy. The national insurance increases will raise £11.4 billion a year, while the increases in tax on share dividends will raise just £600 million a year. We need to be clear about this: the Government’s change is woefully inadequate.

However, this can act as a watershed moment when we finally get to grips with the great injustice in our tax system that wealth is often taxed at much lower rates than income tax. It is clear, is it not, that our economy is rigged in the interests of the 1%? That has become even clearer during the pandemic, when we have seen the corrupt contracts that have been handed out or the fact that the billionaires have increased their wealth by £290 million a day while food bank use has hit record levels. How completely grotesque.

Our tax system is also rigged in the interests of the top 1%. One obvious way in which that happens is that those with wealth get special discounts on their tax rates. They pay lower tax rates than the vast majority, who have to go out to work day in, day out. My new clause seeks to put a stop to that racket, to that injustice. Why on earth is someone lucky enough to have inherited millions of pounds of shares and who now lives comfortably off their annual share dividends allowed to pay a lower rate of tax than people who have to go to work day in, day out? That is completely unfair and completely unjustifiable. It needs to change. Economic justice demands change, and my new clause would deliver that. It would raise tens of billions of pounds that could go towards funding a national care service, for example, in a progressive way by taxing wealth and not by hitting the pockets of working people.

Let us look at how this rigged system works in practice for those lucky enough to be in the top 1% of incomes. They currently have to pay a 45% rate of tax on income but pay way less on earnings from share dividends: just 38.1%. That tax discount applies even though payments to shareholders primarily go to a very wealthy minority. One quarter of the total income of the richest 1% is generated from dividends and partnership income alone.

The Government try to give the impression that we somehow live in some kind of shareholding democracy where everybody has an equal stake in owning shares, but I am afraid that that is just not true. TUC research shows that UK taxpayers earning over £150,000, which is just 1% of all taxpayers, captured about 22% of all direct income from UK dividends, so the wealthiest accumulate their money from share dividends instead of working, and the Government reward them for this with a tax discount. That is totally unjustifiable, totally unreasonable and totally indefensible.

The changes I have called for in new clause 16 would raise billions for the Treasury—billions that could go towards funding a national care service. Institute for Public Policy Research calculations in 2019 estimated that this would raise £29 billion over the lifetime of this Parliament, even after accounting for behavioural changes. But I am afraid the Conservative party does not want to tax the income of the super-rich who bankroll the party. This new clause has been tabled as an opportunity for the Government to really tackle the injustice in our taxation. It is absolutely outrageous and it needs to change, and that is why I put down this amendment.

Finance (No. 2) Bill

Christine Jardine Excerpts

2nd reading
Tuesday 16th November 2021 Commons Chamber

[John McDonnell]

I raised in my Budget speech the lack of confidence in the Government’s commitment to levelling up overall and even to defining what it means, and I mentioned the importance of the need for a bit of levelling back because of the scale of the cuts that have been endured over the past 11 years.

I make the general point that there is currently a level of insecurity and uncertainty, and a questioning of politics overall and of whether the people can trust any politician. I thought that with a Budget and a comprehensive spending review the Government would at least be able to set out their plans and bring forward the measures in the Finance Bill so that we would at least know where they are going, which might give us some security or confidence that the Government at least have some sense of direction. I do not think it is there—it is certainly not in the Bill. We can take some humour from this situation. The Chancellor certainly led with his chin in respect of the proposals to cut the bankers’ levy and the tax on flights and champagne. No one could blame the shadow Front-Bench team coming forward and taking the rise out of what was quite obviously a bankers’ Budget.

Let me comment on a number of the key issues that have been raised in the debate so far. If the Budget was about the end of austerity, high skills, high wages and so on, the Bill flies in the face of all that. The hon. Member for Glenrothes (Peter Grant) talked about how people have been treated in respect of other announcements; how can the Government argue that the Bill is about high wages when they are freezing tax bands, introducing national insurance increases and cutting universal credit? All those things hit earners.

Something fundamental at the heart of this Bill—it was at the heart of the Budget, too—is the Government’s refusal to take on the imbalance between the taxation of wealth and the taxation of earnings. We have seen it in the Government’s setting out of proposals some time ago on reforming capital gains tax but their failure, yet again, to do it in this legislation. Given that the argument over the need to ensure that we tax on capital and wealth as well as on levels of earnings has been won, the proposal that I thought would be in this Bill was to ensure that taxation on earnings and on capital gains were brought into line. The amount that that would bring in to the Government was initially recalculated at £14 billion, but I see that the TUC’s figure is £17 billion. That could have resolved the issues in social care. That would have ended austerity for large numbers of our population.

The Government argue that, in the Bill, they are doing something about the taxation of earnings from dividends, but it is negligible in comparison with what is needed and it sends out a similar message that they are willing to penalise earners, but, at the same time, allow others who earn their money from wealth to walk away.

The reason that the bank levy offends is not just that it is going back to the days of the crash and the scurrilous role that the banks played in enabling that to happen—the profiteering at all our expenses; it is because what the banks have is the best insurance policy in the world. It is an insurance policy, backed up by the UK Government, that no matter what they do, no matter how much they fail, they will never be allowed to fail because the Government will always step in and bail them out. An additional levy was placed on the banks to make sure that they paid something back from the crash, and also that they paid something in return for the guarantee that they were given. What we find now is that the amount that they have paid so far does not even pay off some of the damaging costs that fell to taxpayers as a result of their wild speculation that brought about the crash.

One matter that has been raised in the debate—the Exchequer Secretary has also mentioned it—is that of tax reliefs and the extension of the annual investment allowance. I can understand why the Government have done that, but what I cannot understand is why they have done that as well as introduce the super deductions. The Government’s argument is that 99% of the business investment that is undertaken will be covered by the annual investment allowance, but to then go on and give a super tax deduction of 130% flies in the face of that argument. If we look at the record of tax reliefs, most of which, historically, have never been reviewed by the Treasury, we see that they mount up year after year, decade after decade. Some of them go back nearly a century, but they are never reviewed, and that is often with scandalous effect. On the entrepreneurs’ allowance, even the Government had to accept that that was an abuse of an allowance. People were walking away with large amounts of benefits without in any way demonstrating their entrepreneurial skills. It is the same with the patent box.

Let me now come to the tonnage tax. I have been lobbying on that now for nearly 15 years. The tonnage tax was introduced by John Prescott—by the way, I hope that all of us will send our best wishes to him in the hope that his recovery from the severe stroke that he had is going on apace—as part of a strategy to revive British shipping. The purpose of it was to give a tax allowance to shipping companies so that they would then employ more UK seafarers, and employ them on a decent wage as well. Year after year, we argued about it with the Government—the Labour Government got into this one as well. Large amounts of money were going to these shipping companies, but the jobs were not appearing. In fact, we were losing UK seafarer jobs. Seafarers were largely being recruited from abroad, and in some instances were not even being paid the minimum wage. The tonnage tax was linked to the training of officer cadets, not ratings, and a limited number of officer cadets were recruited by the shipping companies. As a result of lobbying—I was there in a meeting with the Minister—we did get a bit of flexibility, whereby if a company was not recruiting officers, it was able voluntarily to recruit ratings and still qualify for the tax.

Let me just explain to the House the tonnage tax figures. The tonnage tax was introduced in 2000-01. Its cost—£2.165 billion. How many jobs do hon. Members think have been created, that we know of, for £2.165 billion? Does anyone want to intervene with a figure? All we know about, on the record, is 75; that is £28 million a job.

[Christine Jardine (Edinburgh West) (LD)]

Almost as good as they get!

[David Linden]

That’s about as much as Geoffrey Cox gets!

--- Later in debate ---

[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell). I rise to my feet on behalf of the Liberal Democrats to say that we cannot support this Finance Bill, which derives from a Budget that missed a vital opportunity to help struggling families in this country. Instead, it hammers them with tax hikes, empty words and broken promises. It is completely out of touch and offers nothing to help them with the energy bills that they will face this winter. Worse than that for me, the Bill sends a clear message to children and their parents that they are worth less to this economy than investment bankers and banks. Far from providing the support that families needed when we are facing a cost of living crisis, this Finance Bill will provide less in extra catch-up funding for schools than it does in tax cuts for big banks. There will be just £1 of extra catch-up funding for each child, compared with £6 a day in tax cuts for each banker. That brings the £1.8 billion new catch-up money offered to just £5 billion, one third of what the Government’s own advisers said was necessary to allow our children to catch up on the many millions of hours that they have in total lost in their classrooms over the past 18 months, which threaten, according to official figures, to leave them losing anything up to £46,000 in income over the course of their lifetime. Putting bankers before children tells us everything we need to know about the priorities in this Bill.

People who have worked hard, paid their taxes and played by the rules are seeing their incomes squeezed through no fault of their own. They are being crippled by tax hikes and their benefits have been slashed—all in the face of skyrocketing bills. We should be demanding a fair deal for families and an investment in future generations: support for vulnerable families, more investment in our children’s education and more funding for tackling the climate emergency. Instead, we see an end to the £20 uplift to universal credit, nearly half the minimum wage rise clawed back through the increase in national insurance, no help with energy bills, the Chancellor’s announcement on universal credit taper giving back just one third of what he snatched away, and millions of families with no help at all.

When it comes to the climate, while COP26 was getting under way in Glasgow and we were all looking for something that would send a clear message that saving the planet was a major priority, what did we get? We got a reduction in air passenger duty, which will do nothing at all to help to reduce carbon emissions.

This Bill offers nothing of what we would like to see for the people of this country. It offers nothing, either, for the businesses, because it fails to deliver on the Government’s promise to reduce business rates through a fundamental review of the system, leaving companies with no long-term support as they cope with the impact of the pandemic and new international trade barriers. The business rates announcement will not abolish the skewed and complicated system, which only benefits property landlords and not the hard-working business owners who rent from them. Even the tax cuts for businesses investing in green energy for properties are only set to benefit commercial landlords, not our high street shops, whose owners will really pay the bill.

Businesses have been hit hard by endless Government disasters, the handling of the pandemic and a new mountain of red tape introduced post Brexit. However, I cannot agree with the hon. Members for Glasgow Central (Alison Thewliss) and for Glenrothes (Peter Grant) that the answer to all that is an independent Scotland.

[Peter Grant]

Oh, go on, go on.

[Christine Jardine]

Not this time. On that point, I cannot agree, because there have been Governments in this place that have done wonderful things for Scotland, not least of which was to deliver devolution, and we have learned in Scotland over the past 14 years that moving the Government to Holyrood does not guarantee it will be any better. On behalf of my colleagues in the Liberal Democrats, we will not support the Finance Bill and we will support the Labour amendment.

Budget Resolutions

Christine Jardine Excerpts

Wednesday 27th October 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to follow the right hon. Member for Newark (Robert Jenrick), although I cannot express the same pleasure about much of what the House has heard today. We face a looming cost of living crisis, with food prices and energy bills soaring. The Chancellor had a chance to lessen the pain for hard-working families who pay their tax, play by the rules and need his support. Instead, he is hammering them with tax hikes, empty words and broken promises from a Government who are completely out of touch with the people of this country. There is nothing to help families with their energy bills this winter.

The Chancellor says that this Budget is all about optimism, but it is hard to be optimistic when it is our children who will pay the price with their income, their life chances and their planet. Today he could have chosen to invest in their future; instead, he chose to anchor them to the pandemic and the past. Our children, their education already damaged and their futures undermined, are left without sufficient funding for the catch-up classes that they desperately need. Unless the Government provide that funding in full, children who are at school now will face up to £46,000 in lost earnings over their lifetimes. If the Government are serious about investing in our future, surely they should start with those children. Instead, the Chancellor has spent more today on cutting the price of prosecco than on saving our children’s future. That tells us everything we need to know about this Government’s priorities.

The £5 billion of catch-up funding is a third of what the Government’s own adviser said is needed, and it is just a fraction of the £450 billion hit our economy could see from the learning our children have lost to covid.

[Ed Davey (Kingston and Surbiton) (LD)]

My hon. Friend is making a powerful speech on behalf of children, parents and teachers across our country. Is she aware that, in the fine detail of the Budget, banks are getting a tax cut that is bigger than the increase announced today for catch-up funding? Does she agree that is the wrong priority?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. If people are going to intervene, they should at least have the good grace to come in a few speakers before.

[Christine Jardine]

I thank my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) for his intervention, and I will address the Government’s strange priorities.

Under this Chancellor we have seen the highest tax burden since the second world war and the lowest school spending per pupil in a generation. Increasing funding per pupil by 2025 will come too late for millions of children whose life chances are being dashed. That is the choice the Chancellor has made, and it is the wrong choice.

Many of us in this place come from a background in which education was our passport to a better future. Our families had the support they needed to enable us to be the first in our family to go to university, and I do not want to deny that chance to this generation. The Chancellor’s announcement on universal credit is giving just a third of what he snatched away, and millions of families who are not in work will not be helped at all. What will their winter be like? Those parents will be choosing between eating and heating. For those who get the disparaging increase in the minimum wage, it has already been eaten up by the national insurance hike.

[Anthony Browne (South Cambridgeshire) (Con)]

The hon. Lady agreed with the point made by the right hon. Member for Kingston and Surbiton (Ed Davey) on bank taxation. Does she agree that 28 is higher than 27? The corporation tax rate on banks is currently 27%, and after the rise in corporation tax and the change to the bank corporation tax surcharge it will be 28%. By anyone’s reckoning that is an increase in taxation on banks, not a decrease.

[Christine Jardine]

I thank the hon. Gentleman for his point, but I do not want to get involved in nit-picking. [Interruption.] I did not mention either 27% or 28%. I was talking about the disparaging increase in the minimum wage, which has already been eaten up by the national insurance hike. That broken Tory promise means a nurse on an average salary will see her tax bill rise by £310 a year. After 18 months on the frontline of the pandemic, covid heroes will be clobbered by a tax hike and the cost of living crisis. How can it be that NHS staff and care workers are facing a £900 million tax hike while banks are, as my right hon. Friend the Member for Kingston and Surbiton said, being given a £900 million tax cut? No doubt bankers will be toasting their tax cut and the Chancellor’s decision to reduce the bank surcharge with cheaper bubbly tonight. It is clear that this Chancellor’s priorities are not the priorities of the British people.

It could have been so different. The Government could have addressed the labour shortage that threatens to derail our recovery before it gets going. They could have radically overhauled business rates, as they promised, instead of the sticking plaster we got. They could have provided the £10,000 that the Liberal Democrats want every adult to have to buy training in the new skills that they desperately need.

The Government could have provided the £150 billion green recovery plan we are calling for to insulate people’s homes and to protect our natural environment. They could have seized the opportunity afforded by COP26 to lead the way on protecting the planet. Instead, the Chancellor has slashed air passenger duty on domestic flights and admitted that overseas aid will not be restored to the legal target of 0.7% until at least 2024. What kind of signal does that send to our international partners ahead of next week’s crucial climate summit in Glasgow? Then again, the word “climate” did not appear anywhere in the Chancellor’s statement.

It is clear that this is the Budget of a former hedge-fund manager, but we cannot run a country like a hedge fund. There is no column in a spreadsheet for people’s dignity and no formula for investing in our children’s future. Today’s Budget promises a future bitter with the consequences of the Chancellor’s inaction—bitter with the betrayal of future generations. It is a Budget that handcuffs us to the consequences of climate change, fails to invest in our children’s education and hammers families with tax hikes instead of helping them with the cost-of-living crisis. What has it all been for? The suspicion remains that the Chancellor is using old data from the Office for Budget Responsibility so that he can save some spending for later in the Parliament. That is the reality: pain for ordinary families now, but a tax cut before the election to help Tory candidates. The Budget should have been about ordinary people’s jobs up and down this country but was instead all about one person’s next job—the Chancellor’s.

Health and Social Care Levy Bill

Christine Jardine Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Steve Barclay]

I could probably go slightly further—Chief Secretaries do not like to spend, not necessarily just on any particular area of Government policy—but my hon. Friend is absolutely right about the importance of delivery and how the money is spent, particularly the £8 billion allocated to electives catch-up. Just yesterday I was at a meeting in No. 10 with the leadership of the NHS, discussing that issue with the chief executive of NHS England and other senior health leaders. I know that it is an issue of concern to a number of Members, but ultimately it is an issue of concern throughout the House, because through our constituency surgeries we see the consequence of the backlog in terms of electives. That is, I think, an area of common ground.

[Christine Jardine (Edinburgh West) (LD)]

Will the Minister give way?

[Steve Barclay]

I will give way once more.

[Christine Jardine]

The Minister has made the point that we see the impact in our constituencies. Yes, we do, but we are also seeing the impact in our constituencies of the pandemic on business. What would the Minister say to the Federation of Small Businesses, which, notwithstanding what he has just said, believes that

“Business owners who have done all they can to retain and support their staff during the pandemic are now being punished”?

The FSB sees this as a jobs tax, and we will see that impact in our constituencies as well.

[Steve Barclay]

First, in order to meet the quantum of spend, one needs a broad-based tax. That is a point that my hon. Friend the Member for Wycombe (Mr Baker), who is not in his place, raised in the debate last week. Secondly, I would point to the more than £400 billion—[Interruption.] I do not know why SNP Members are laughing at £400 billion of support. I do not think that this is a point of difference. I think we can all agree across the House that there has been huge fiscal support across the UK through the broad shoulders of the United Kingdom to support business, at a cost of £400 billion to businesses, public services and individuals, and that has a consequence. Most of the business leaders I speak to recognise that, and recognise that the backlog in the NHS needs to be dealt with. I would add the further point that those businesses benefit from the NHS clearing its backlog because it is members of staff in those businesses that are affected.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

To start where the right hon. Member for South West Surrey (Jeremy Hunt) left off, in the Bill before us this afternoon we have the lack of a proper plan. We have a means of raising taxes, but absolutely no detail whatsoever on how the money is to be spent.

Let me start with a useful note sent round by the Hansard Society, which says:

“Parliament’s scrutiny of financial matters is generally poor, and the treatment of the new Health and Social Care Levy demonstrates many of the worst aspects of both the financial and legislative scrutiny processes: acting at speed with insufficient policy detail available for MPs to consider; important constitutional questions brushed aside; and broad powers delegated to Ministers with a lack of clarity about how they are to be used in future.”

I agree with every single word of that.

Scrutiny and accountability are absolutely key to this issue, because we have been presented with a huge additional spending commitment but no detail whatsoever as to how it will actually be spent on the other side. I know that there are Conservative Members who are extremely nervous about this levy; far be it from me to agree with them, but I am right to agree with them on that, because we do not know how this money is going to be spent. People are incredibly nervous that health and social care will be at the back of the queue when the money is to be spent.

As the hon. Member for Basildon and Billericay (Mr Baron) pointed out earlier, we are considering this Bill in unseemly haste. Is this to do with the election cycle, testing the loyalty of Government Back Benchers or making sure that people are loyal in the run-up to any reshuffle? We cannot see the real reason for this haste. If we could wait, we could see a little more detail as to exactly why we have to proceed in this way. There is also a difficulty in scrutinising the spending of the levy because it is outwith the usual estimates process and the usual Budget process. We cannot have any real clarity in that respect.

Most worryingly of all, the Government have—as they have done in so many different ways—taken back control only to give all the power back to themselves and their cronies. A lot of the work in respect of the Bill will be done through regulations. Clause 4 gives the Government very wide scope to make regulations on this matter later, which means we will lose all sense of scrutiny from this place. It will all go to civil servants rather than to Parliament. That is entirely undemocratic and wrong. Yet again, there is a wide-ranging power grab from this place and in respect of our job as Members of Parliament here. I cannot see the justification for that in the Bill; it would be interesting to hear why Ministers intend to do that.

We on the SNP Benches demand urgent clarity about every penny of Barnett consequentials that will be given to the devolved Administrations. In line with our manifesto, any additional money that Scotland gets will be spent on health and social care, but there must be no attempt by the UK Government to sell Scotland short by clawing back our share through cuts in other devolved policy areas. It would be just like Government colleagues to give money with one hand while pinching money out of our back pocket with the other. The UK Government must give urgent assurances that we will get every penny we are due—as should Wales and Northern Ireland.

Last week, the Secretary of State for Health and Social Care told “Good Morning Scotland” that, ultimately, it will be for the Scottish Government to decide how the money raised is spent, but that is not what the Prime Minister said. In his statement last week, he said:

“Although Scotland, Wales and Northern Ireland have their own systems, we will direct money raised through the levy to their health and social care services.”—[Official Report, 7 September 2021; Vol. 700, c. 154.]

To direct money would be to override the devolved settlement. It would override our Scottish Parliament and our Scottish Government. It is also unclear where it is intended that that money should go. Will it go to NHS Scotland or to the health boards, the integration joint boards or the health and social care partnerships that sit underneath? Will the formula by which funding is distributed in Scotland be disrupted?

We need certainty as to how the money will be spent, and the Bill currently does not give that. All the Bill says is that money will be paid

“in such shares as between health care and social care, and in such shares as between England, Wales, Scotland and Northern Ireland, as the Treasury may determine.”

That means more power for Treasury Ministers, which I am sure they will enjoy having, but less power for this Parliament and even less power for the devolved institutions. It is their right to know how that money is to come to them and how it is spent. We should not get one penny less than we were due.

Many analysts have pointed out that other parts of devolved spending have been cut because of, for example, the Barnett consequentials of the cuts to local government or to justice. Such cuts mean that we get less money coming through, even if the Government like to pretend, through things such as this levy, that there will be more. It is unclear in the documentation published by the Government exactly what the Barnett consequentials will look like. Their plan for social care says that the Barnett consequentials will be £2.1 billion in 2022-23, drop to £1.7 billion in 2023-24 and be £1.9 billion in 2024-25. If the money that comes is going to jump about by such significant amounts over those years, we will not know exactly how things are going to look, what the certainty is and how we can plan. The Scottish Government deserve certainty so that they can plan for services.

Let me highlight some of our other major issues with the proposals, which are a tax on the poorest working people in this country. They are completely unjustifiable on that basis. The levy is disproportionate and unfair. There is a bit of brass neck from Government Members: they howled when Scotland put money on income tax—a progressive system in which those at the wealthier end of things paid a little more into our system for our services in Scotland. They said it was terrible and awful, yet today there is not a peep out of them to complain about the lack of progressive taxation and the fact that Scotland will have to pay for England’s social care crisis, which is completely unjustifiable. This is also a tax on jobs and the recovery. Reflecting on the ONS figures that show that the recovery is now stalling, the Federation of Small Businesses says that this tax on jobs will mean 50,000 more people becoming unemployed. That is 50,000 people losing their jobs as a result of this Government’s incompetence in taxing jobs and the recovery. We really could not make this up. From every angle that we approach this tax, it makes absolutely no sense whatsoever.

I will talk in greater detail about our amendments when we come to the Committee stage, but my reflection for now is that we have Scottish taxpayers paying for England’s health and social care crisis, and an undermining of devolution in Scotland, Wales and Northern Ireland and of the services that our Parliaments are democratically elected to provide.

[Christine Jardine]

Can the hon. Lady explain how Scottish taxpayers, of which I am one, are paying for this levy? I am confused by the thinking. We either agree with the fairness of the levy or we do not. In Scotland, we would get more than we paid in, so I am confused by her thinking.

[Alison Thewliss]

The point is that we do not know what we will get out of this. We do not know because it is not clear in the documentation that has been provided. We also do not know what will happen on the other side of that equation—money in other devolved areas could be whipped away from us at our expense. Organisations such as the British Association of Social Workers have pointed out that cuts to local government will fundamentally undermine the social care provision in England. Authorities will not receive anything for three years, which will also have an impact on the money that we have to spend in Scotland.

These moves tax the poorest. They come at the same time as £20 a week is being removed from universal credit. Some 2.5 million people across the UK will be affected by both of those policies at a time when they can least afford it. The tax on jobs will stifle the recovery. Rather than being a Union dividend as Ministers like to try to claim, this is a Union dead end.

--- Later in debate ---

[Christine Jardine (Edinburgh West) (LD)]

I do not believe there can be many issues on which this House is more intent than ensuring the future of our national health service and social care for the good of every person in this country, but sadly this Government, who have procrastinated over every possible thing for the past two years, instead of taking time to consider this properly are bouncing Parliament into a hurried decision—a decision that has met with condemnation across the country. It is a proposal that the Federation of Small Businesses has described as a “jobs tax”, which the British Chambers of Commerce has described as an “anchor” on jobs growth, and which the Confederation of British Industry has said

“will directly hurt a business’s ability to hire staff at a time when businesses have faced a torrid 18 months”.

But it is much worse than a job tax—it is a tax on nurses, who on average will pay an extra £270 a year. It is a tax on our teachers, police and care home workers—the very same people who have kept the country going throughout this pandemic. It is a tax that will disproportionately hit low earners, at a time when families are already seeing their income squeezed by the pandemic. This is the worst possible time to be hitting families and businesses with a crippling and unfair tax hike. Instead of boosting hiring and spending, it will damage confidence and investment. The Government are not only breaking their promise to the electorate; they risk breaking the backbone of our economy.

Instead of rushing us into this, the Government could have taken the time to have cross-party discussions and come up with a proper, detailed plan, which I believe would have had the support of everyone in this place, because we all want to see a good, sound, constructive plan for the national health service and social care. Sadly, this is not it.

Health and Social Care Levy

Christine Jardine Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

Like, I am sure, many people on both sides of the House, I came here today desperate to support a plan that would see investment in a system that has been set up to provide care not just for us and all our loved ones but for everyone in this country. This is a problem that we all want to see fixed for the 1.5 million people who are not receiving the care they deserve; for the staff who work long hours, underpaid, with 120,000 jobs left unfilled; for the unpaid carers; for those caught in the backlog of NHS waiting lists that threatens every day to deny them life-saving treatment in time; and for all of us who might one day need the system that we were brought up to believe was there from cradle to grave. It is therefore a huge disappointment that this so-called plan does not do any of that.

What we have is not a strategy that will fix our NHS and social care—the long-awaited oven-ready plan that the Prime Minister promised us on the steps of Downing Street. Perhaps it would now be more appropriate to talk about the naughty step and to consider what this so-called plan will mean for the young people, the lowest-paid and the small businesses that will be hit hardest, because this is a tax hike for the low-paid and young people, which the Government promised there would not be.

Where is the carefully costed, detailed plan of what will be spent on the NHS backlog and invested in our social care system? One must not be funded at the cost of the other. There is a better way to deliver for a social care system that was already in crisis before the pandemic—and that is not an excuse for the broken manifesto promises of 2019. This is a system that was already in crisis and already in need of investment.

Liberal Democrats have repeatedly called on the Government to hold cross-party talks to find some consensus on the best plan to fix social care. The Government have had plenty of time. We know that it can be done. When the Liberal Democrats were in government, we built a cross-party agreement through the Dilnot commission, as mentioned by the right hon. Member for Gainsborough (Sir Edward Leigh), and the Care Act 2014, based on the values of the NHS. We legislated for it, but after the 2015 election, the Conservatives ripped it up. Instead, they are now pressing ahead with a scheme that places a huge burden on low earners and small businesses. Has it completely escaped their notice that many of those who will be hit hardest by this tax hike are the frontline NHS and social care workers?

Then there are the other public sector workers—police and fire officers. As for business, this comes at the worst possible time. When, as the Federation of Small Businesses points out, firms are still struggling, trying to recover from the impact of the pandemic, what do the Government do? They end support, stop furlough and then hit them with another bill, while many of them are struggling to get out from under the debt that the pandemic has created. Added to that, so many families are now facing a cut in universal credit.

It is abundantly clear to me and to the Liberal Democrats that this Government, this Prime Minister and this Chancellor are out of touch with ordinary families, small businesses, frontline health and care staff and what they face on a daily basis. As I have said, the pandemic is no excuse for breaking promises. This is a moment in our history when the people in this country most need a Government on whom they can depend and who are as good as their word.

What about the people whom this so-called plan is supposed to help? Where is the respect, beyond that for a certain proportion of the population? We will all start paying for this new arrangement in April 2022, but it will not come into effect until October 2023. What about the people who are in care now or who will enter care in the intervening 18 months? As for the cap, £86,000 is still a lot of money. This country deserves better.

Northern Ireland Protocol

Christine Jardine Excerpts

Thursday 15th July 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD) [V]]

It is a privilege to take part in today’s debate on an issue of profound importance to the future not just of Northern Ireland but the rest of the United Kingdom. I appeal to Members to—to paraphrase the President of the United States—dial down the rhetoric a little and listen to the many contributions that we have heard from hon. Members from Northern Ireland about the importance of making the protocol work for the people of Northern Ireland. Listening to them, I am reminded of how much the people of Northern Ireland have endured and I feel perhaps more strongly than ever that it is our responsibility, on this issue but also every issue, to do whatever we can to support them in avoiding any further suffering of any kind. That is why, as I will explain, the Liberal Democrats believe that, despite its faults, we have to defend and make the protocol work.

The unique circumstances in Northern Ireland and the absolute necessity of protecting the Good Friday agreement demanded something special and deserved special attention on our withdrawal from the European Union. The reality of Brexit is that it was always going to mean changes—a border somewhere, new arrangements to deal with. What we have in the Northern Ireland protocol is an agreement that, as many Members have pointed out, is deeply flawed. Those on both sides involved in creating it must not only recognise their responsibility for it, but do what they can to mitigate and alleviate the issues that have been raised by hon. Members from Northern Ireland today.

While the Government might wish to, they cannot deny that having to deal with this is the inevitable outcome of the decision to leave the customs union. However, focusing now on blame and recriminations will help nobody. While we might all have doubts and complaints about the protocol, we have to recognise that it was, as other Members have said, the least worst option left on the table. Most significantly, the protocol protects the Good Friday agreement, which is paramount.

Within the protocol is a commitment that it should have as little impact as possible on the everyday lives of communities in both Ireland and Northern Ireland. We have already seen clearly demonstrated how difficult that is in the unique circumstances that I have spoken about for businesses and consumers. We have heard the frustration of farmers and food producers, but hon. Members have also mentioned that Ulster farmers say that there is a solution there and they want it to work. I believe it is up to us to support them in that and ensure that they get that solution, not just for the farmers but for all businesses and all the people of Northern Ireland.

It is also undeniable that there are issues for businesses in the rest of the UK in trading with Northern Ireland, and we have figures showing that trade has fallen. Some blame that on the resultant problems with the protocol. There is also the thorny issue of the veterinary agreement, which is one not just for the protocol or people in Northern Ireland, but one that must be addressed for the good of all UK agrifood producers.

We must do this in a positive way. We must do it in a way that supports the people of Northern Ireland and ensures that we move forward. We should focus on nothing else but finding workable, pragmatic solutions, not just for the sake of the people of Northern Ireland, but for the future of the United Kingdom. We as the Liberal Democrats hope that the UK Government will do everything they can to pragmatically reflect what we have heard today and the unique circumstances. Let us be clear: we do not believe that we should seek to renegotiate, but the UK Government and the European Union should be working to implement in good faith. We know that the EU needs to protect the integrity of its internal market and customs union, and Northern Ireland and its businesses too need clarity and, as I have said, pragmatic solutions, but most of all we need trust. We need everyone to agree as many flexibilities and mitigations as possible.

Northern Ireland and its people have faced and overcome many challenges in past decades. We must ensure that on this one we give them the utmost support and find the pragmatic way forward that addresses the issues in the way they wish to see them addressed.

Economy Update

Christine Jardine Excerpts

Wednesday 16th June 2021 Commons Chamber

[Steve Barclay]

We want to ensure that the whole of the UK can benefit from freeports, and that is why we remain committed to establishing at least one freeport in Scotland, Wales and Northern Ireland as soon as possible. As in England, a Welsh freeport will be chosen according to a fair, open and transparent allocation process.

[Christine Jardine (Edinburgh West) (LD)]

My thoughts and sympathies are with the family of Jo Cox on what must be a very difficult day for them.

The Chief Secretary to the Treasury has just been patting the Government on the back for what he calls “going long”, but does he appreciate that it does not feel that way for all the businesses facing another month of restrictions, during which time many will have to find 10% of salaries for furloughed staff, face increased VAT in hospitality, retail and leisure, and think about repaying bounce back loans without being able to trade again? When exactly will the Government abandon this piecemeal approach and reveal the long-term strategy for recovery and the extension of furlough and VAT holidays on which so many businesses, communities and families in this country depend for their future?

[Steve Barclay]

No one is saying that next month those businesses have to repay their bounce back loans. We have already extended the furlough and we have provided a huge amount of support to the businesses concerned. I have addressed some of the questions in relation to the business relief, VAT, the extension of the furlough scheme, the restart grants of up to £18,000 and the £2 billion of discretionary grant funding to local authorities. A comprehensive package of support has been offered, and it is simply not the case that these loans must be immediately paid back or that support has not been extended in line with the road map.

Finance Bill

Christine Jardine Excerpts

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

Again in this place, we are talking about the challenges that have been created by the coronavirus—the challenges to our businesses, to individuals and to those who have been excluded from Government support—and the taxation that will have to be used to try to rebuild. In the Finance Bill that the Government have laid before us, I believe that they have missed important opportunities to do that for the benefit of all our constituents. I would echo what the hon. Member for Ealing North (James Murray) said when laying out new clause 23 and when speaking about Biden’s proposals. We have to look at this crisis in a way that we have never approached any crisis before, and on a scale that we have never done with any crisis before. We have to look for measures that will be enacted on a scale that we have never seen before.

I would also like to express my support for the amendments tabled to address and, indeed, stop the malpractice that is rife. These include an amendment tabled following the inquiry by the all-party parliamentary loan charge group into how contracting should work, to stamp out the malpractice and mis-selling to public and private sector freelance and locum workers by unregulated umbrella companies. Those practices have created a climate where tax avoidance schemes are rife and are being mis-sold.

These amendments follow the powerful report by the loan charge APPG, as I have said. BBC Radio 4 has estimated the cost to the Treasury—£1 billion a year in lost tax revenue—and The Guardian has reported that the hidden cost of umbrella companies in the UK may actually be more than £4.5 billion a year. These are some of the opportunities that I believe the Government are missing.

There are also specific amendments before us tonight about measures that would require the Chancellor to review separately the effectiveness of furlough and the self-employment income support scheme, the impact of the Finance Bill on small businesses and the impact of the Bill on transitioning to zero-carbon domestic flights by 2030. All of these, I believe, are opportunities that the Government are failing to take.

The coronavirus has caused the worst economic crisis in three centuries and brought real hardship to our constituents up and down the country in all lines of work. The furlough scheme and SEISS have helped countless people so far, and millions continue to depend on them, but the Government need to think again and review their decision to end the schemes in September. They need to think about extending them into next year. We have all been glad to see cases dropping and restrictions being eased thanks to the vaccine and the NHS, but unfortunately this does not mean that the crisis is behind us.

Covid has left businesses saddled with debt and more vulnerable than ever, especially small businesses, and many are worried that they will not make it through the year. Their employees are rightly worried about their future. As experts warn us about the potential dangers of the new Indian variant, there are worries that the final step of the reopening road map might need to be delayed, or that we might not have seen the last of social distancing.

For all those reasons, it is essential to give workers, self-employed people and small businesses certainty about the future and keep job support in place at least until the end of the year. Even at this late stage, the Chancellor must correct the injustice against the 3 million excluded, who have spent more than a year with no help at all, by finally bringing them under the umbrella of Government support.

I would also like the Chancellor to review the impact of the Bill specifically on small businesses and whether it will offer them adequate help with their debt, rent arrears, solvency and ability to employ people. Small businesses are, as countless Prime Ministers have said, the backbone of our economy and the heart of our local communities. They create the jobs that we all rely on, with 16.8 million people working in small businesses and accounting for six out of 10 private sector jobs. Local shops, cafés, pubs, restaurants, hairdressers and florists all serve our communities and bring life to our town centres and high streets. If allowed not just to survive but to thrive, they can be the engines for growth and jobs in the months and years to come. At the moment, they are struggling under record amounts of debt and months of rent arrears; the collective debt burden is more than £100 billion. According to the Federation of Small Businesses, something like a quarter of a million of its members could close by the end of this year. On top of that, they have been badly hit by the terrible EU trade deal. That is why the Chancellor must adopt a revenue compensation scheme that could help those struggling with their finances and fixed expenses to stay afloat. At the very least, the Government should be undertaking a review to assess the state of UK small businesses and offer the necessary support off the back of that.

Opportunities are also being lost to transition to a zero-carbon economy by 2030. These are all opportunities with which this challenge of many lifetimes has presented us, and which we should seize in order to help individuals, businesses, families and communities up and down the country to recover. The opportunity was there with this Finance Bill, but I do not believe that the Government have grasped it in the way that they should. I ask them to reconsider and accept the amendments.

[Anthony Browne (South Cambridgeshire) (Con)]

I, too, will abide by your strictures, Madam Deputy Speaker, to keep my speech as short as possible.

When I was an economics correspondent a very, very long time ago, tax competition between countries was all the rage. There was a sort of mainstream consensus that it was a good thing because it helped give countries an incentive to be an attractive place to do business, but in the last couple of decades it has become clear how easy it is for international companies to run circles around national rules and reduce their tax bills by shifting profits to low-tax jurisdictions, and we end up with this outrageous, unconscionable position of some of the world’s largest companies paying some of the smallest corporation tax rates. That causes anger across the UK and on both sides of this House; we are all aligned in the objective of ensuring that big companies pay a fair share of tax.

This Government have been doing an awful lot, as the hon. Member for Ealing North (James Murray) recognised, to try to tackle this issue both within the UK and internationally, including through measures such as the diverted profits tax, the digital services tax and changes on tax to subsidiaries. When I was chief executive of the British Bankers Association, I was involved with a lot of the implementation of those rules.

We need to take measures internationally as well; this is an international problem, so ideally we need an international solution. The difficulty, though, is getting an agreement between a large number of different countries. Normally these sorts of discussions go through the OECD, which is so big that it is difficult to get agreement and progress is absolutely glacial. That is why, on things such as the digital services tax, the UK has opted to act unilaterally before an international agreement can be agreed. I very much welcome the fact that the initiative is now being led by the G7, because we are far more likely to get agreement from seven major countries, and then to expand that out to the G20 and then to the OECD.

As we have heard tonight, particularly from my hon. Friend the Member for Wimbledon (Stephen Hammond), these are complex negotiations. There are two interlinked pillars at the OECD: the scope of the tax and the level of the tax if there is a global minimum rate of corporation tax. As my hon. Friend the Member for Devizes (Danny Kruger) said, there is no point in agreeing a global level of corporation tax if all we are doing is taxing companies in California; the two parts of the negotiations are intertwined. I very much welcome the fact that Government are involved in these negotiations. I completely respect that they may wish to negotiate more in private than in public, as that is often the best way; I know that their intentions are absolutely right.

That brings me to new clause 23. It is the wrong review at the wrong time. The new clause asks the Government to review the corporation tax set at 21%, but, as the hon. Member for Ealing North said, it actually looks like Joe Biden and the US are now looking at 15%, so this proposal is already out of date and it has not even been voted on yet. It is also at the wrong time because what we do not want to do in the middle of an international negotiation is tie our hands, display all our cards and show what we are doing. It could create a dynamic in the negotiations that would actually set back the UK’s ambition to ensure that companies pay a fair rate of tax. I therefore fully support the Government in rejecting the new clause. I also fully support them on reaching a strong global agreement to ensure that the world’s biggest companies pay their fair share of tax.

I hope that that was less than five minutes.