Working People’s Finances: Government Policy

Danny Kruger Excerpts

Tuesday 21st September 2021 Commons Chamber

[Danny Kruger (Devizes) (Con)]

May I say what a pleasure it was to hear the maiden speech of my hon. Friend the new Member for Hartlepool (Jill Mortimer)? It was absolutely tremendous. I was lifted off my feet by its sheer patriotism. It was so inspiring to hear her love for her place, her attachment to it and her commitment to Hartlepool. It makes me proud of the day I spent campaigning for her—well, maybe it was more like an afternoon, but it was enough. We are all Hartlepudlians after that speech, so I am very pleased that she has joined us.

The British economy is booming. We have the fastest growth in the G7, this year and next. Unemployment is falling across the country, wages are up and the strongest recovery is for the youngest people in our economy. I am very proud of what the Government are doing to invest in people—2,500 young people are joining the kickstart programme every week, 1 million people in long-term employment are being helped with £2,000 restart grants, there is £3,000 for every new apprentice, and the Government are doubling the number of work coaches—and to help them take the benefit of our high-wage economy. However, I recognise that there is a problem.

This is an appropriate debate for us to have at a time when inflation is creeping into the economy and the cost of living is a concern. It is creeping in partly because of the exuberance of the global economy as countries come out of lockdown and the huge pent-up demand for raw materials. Covid has obviously caused disruption to global supply chains and to logistics. We are a group of islands, and we are vulnerable to shocks in international trade; indeed, I think we are rather too vulnerable to such shocks. We are too reliant on imports, especially of energy, which, of course, is salient this week. Beyond that, however, are some profound structural issues in our economy that I think we need to address, on the supply side. There are distortions in the market.

Let us think about the four most essential aspects of life, the things that we all spend our money on first: housing, food, water and energy, such as heating. Each of those markets is distorted and they have different effects, in that some are overpriced and others underpriced. Housing is overpriced—more specifically, the land under houses is overpriced—and as a result the proportion of household spending that goes on housing has doubled over the last 50 years. Food costs are going up, and there is real concern about that, but it is happening after years of artificially low prices. As the proportion of household spending that goes on housing has doubled, the proportion spent on food has halved over the same period, so something is up. Of course it would be great if the quality of the food were just as good or if the real costs of its production were reflected in the price, but they are not. We have an obesity crisis, and we have polluted rivers and a polluted environment.

The same story could be told about our water systems. We have artificially cheap water in this country, because the real cost of water is being borne by the environment, by all of us in our taxes and by public services, resulting in bad health. As for energy, we are all now very familiar with the fact that prices are rising because of our dependence on foreign supply.

Those different distortions in our markets have different effects on prices, but what all the markets have in common is a lack of effective competition. We have a small number of very large companies—house builders, supermarkets, water companies, energy companies—all of which act to distort markets and have negative effects, and ultimately to pass on high prices. Even if in some cases the price at the till is low, for instance as a result of subsidies, the overall effect of these cartels is to increase prices for all of us.

I say yes to the Government’s demand-side reforms, and congratulate them on a high-wage economy with rises in wages and investment in skills. I look forward to the spending review, and hope that we will see more support for the worst-off families. Fundamentally, however, we need more plural markets and more local production in homes, food and energy, which will empower local communities, help local economies, and keep down the cost of living.

Finance Bill

Danny Kruger Excerpts

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

[John McDonnell (Hayes and Harlington) (Lab) [V]]

I have to say that my right hon. Friend the Member for Barking (Dame Margaret Hodge) has eloquently put forward the case for these proposals, both those from the Opposition Front Bench, which I fully support, and her own, but I think she has been too kind to the Government. Like her, I have sat for over two decades listening to the sophistry from Conservative Ministers explaining the various complications of doing anything to tackle tax avoidance, and they have been dragged kicking and screaming to take what little action there has been. I have also sat here year on year while they argued that cuts in corporation tax were the way to increase investment. Now, at least, they have admitted that they were wrong on that.

However, instead of cutting corporations’ taxes by cutting corporation tax, they are now simply doing it through the super deductions. These are super tax deductions to super tax avoiders. We can name them: Amazon, Vodafone, Virgin, Starbucks and many others. I sat in the Chamber when the global crash happened over a decade ago, and we discovered the intricate corporate structures that the banks used to avoid their taxes—the shell companies based in tax havens from the Channel Islands to the Caribbean. Barclays bank had more than 100 subsidiary companies located in the Cayman Islands alone. As these corporations became increasingly financialised, they became increasingly unprincipled about paying their dues to society.

I have tabled a simple amendment saying that super deductions should not go to companies that are failing to fulfil their duty as taxpayers in our country and that are using tax havens. The reason is simple: these corporations benefit from the workers they employ, and the taxes are needed to pay for their education and training. It is ironic that we are also often using our tax system to subsidise the low pay that these corporations pay their employees. They also benefit from the infrastructure. That is why they should be paying their way within our country itself.

In this struggle over the last 20 years or so, it is worth paying tribute to those who have campaigned so hard: my right hon. Friend the Member for Barking and all those activists, academics and journalists. I pay tribute to groups in the UK such as: Tax Justice Network; UK Uncut, which took direct action; Tax Justice UK; and those journalists and researchers who helped to expose the Panama papers and the Paradise papers. One of those journalists was the Maltese investigative journalist Daphne Caruana Galizia. She was assassinated in 2017 for the work she did to expose tax avoidance and money laundering.

My new clause 22 is very straightforward: no company should be eligible for the tax reliefs in the Bill if they are located, or have subsidiary companies located, in tax haven jurisdictions. The most authoritative list of tax havens or secrecy jurisdictions is the European Union’s blacklist of non-co-operative jurisdictions for tax purposes. That should be the basis of our approach. We are outside the EU now, so we must go further. Subsection (2) gives the Secretary of State powers to list additional jurisdictions that do not co-operate in disclosing information to Her Majesty’s Revenue and Customs. In this way at least we can ensure that we are not, in effect, acting as subsidisers for tax avoiders or laundering tax reliefs into their coffers. It is a simple amendment.

I support the Labour Front Bench amendments and the other amendments that would have a similar effect, but I have had enough. I am sick to death of sitting here listening to excuses from Ministers about failing to act when so much needs to be paid through a fair taxation system. So many of our constituents are having to endure continuing austerity because of the lack of tax revenues. They are living in poverty, unfortunately, as a result of the failure to have a fair taxation system that redistributes wealth in our country.

[Danny Kruger (Devizes) (Con)]

I rise with great enthusiasm for the proposals set out by the Government, in particular on the super deduction. We heard from my hon. Friend the Member for Wimbledon (Stephen Hammond) about the benefits that super deduction will bring to tax receipts eventually and to growth in the immediate term for our national finances.

I want to talk quickly about a benefit that will be felt locally in Devizes. I spoke today to the boss of Wadworth brewers, the brewers behind the legendary 6X and Bishop’s Tipple, with which you will be familiar, Madam Deputy Speaker. They are not tax avoiders, as the right hon. Member for Hayes and Harlington (John McDonnell) just described them; they are local employers who drive growth and employment in my constituency. They will use the super deduction to invest in more buildings, more jobs, more brewing and more beer in Wiltshire, and I am absolutely delighted to welcome the proposal on their behalf.

There is a real problem that the super deduction proposal seeks to address, which is that, sadly, low corporation tax has not driven the sort of private sector investment we need. I therefore support the rise in corporation tax, which will be imposed on profits on the biggest firms. We live in a topsy-turvy world where we see Joe Biden proposing 15% corporation tax, the Labour party proposing 21%, and my Conservative Government proposing 25%. I recognise the value of that, however: we have to pay the bills of the pandemic somehow and I appreciate that this is the right way. We will still have the lowest corporation tax in the G7. That will make us, with the super deduction and the other measures that have been set out, the best country in the world in which to invest and to bring a business.

Let me finish by stating my support for the world-leading efforts the Government are making to ensure that big tech pays its fair share of tax. We have just heard from the right hon. Member for Barking (Dame Margaret Hodge) that she thinks we should back Biden. I think we should back Britain. We should back what this country and this Government are doing to lead the debate on fair taxation. The key challenge for us is to ensure that the tax that is gathered through whatever global agreement we can make is paid in the right places; it would be a bit of a shame if we achieve a global minimum tax that was all paid in California. I welcome what the Government are doing, and I look forward to the Minister’s response and to the announcements that I hope will be forthcoming ahead of the Cornwall summit. I absolutely back everything the Government are doing through this Bill.

UK-EU Future Relationship Negotiations and Transition Period

Danny Kruger Excerpts

Monday 7th December 2020 Commons Chamber

[Penny Mordaunt]

I would ask the hon. Gentleman to reflect on why he thinks that our nation, collectively and together, voted to leave the EU. I am sure there was a range of issues. Some were economic, because people may not have wanted to be tied to the eurozone, but there were many other reasons. For many, it was about sovereignty, and being able to shape our own future. The policies that we are carrying out and doing our best to secure a deal for, are what we have a mandate to do from the British people. We put the question to them, they gave us their response, and it is incumbent on all of us in this place to act on their wishes.

[Danny Kruger (Devizes) (Con)]

The Government are under huge pressure this week to secure a deal—any deal. Does my right hon. Friend agree that the long-term economic and political consequences of a bad deal that keeps the UK in the regulatory orbit of the EU and not as an independent sovereign state, would be far worse than any temporary short-term consequences that might flow from no deal?

[Penny Mordaunt]

I agree with my hon. Friend. There has to be a point to all the upheaval that we have been through together as a nation over the past few years, and we can look forward to many positives with those new-found freedoms, including being able to make the right choices for this country. I say again: this is not just about the interests of the United Kingdom; I think that the negotiating position of the UK is also of benefit to the remainder of the EU.

Protection of Jobs and Businesses

Danny Kruger Excerpts

Wednesday 9th September 2020 Commons Chamber

[Rachael Maskell (York Central) (Lab/Co-op)]

The reserves have run out, the fundraising has dried up, and vital support never arrived for our vital community and voluntary sector. It is estimated by Pro Bono Economics that 60,000 jobs will be lost from our charities. The organisations that stepped up in the crisis are now in crisis and need the Government to step up. Already, 6,500 jobs are registered as being lost. On top of that, many small organisations will be losing the ones and twos that never hit the headlines. However, the pain for those organisations is as great. We think about animal welfare charities having to pay vet bills and feed animals. We think about medical research charities that are seeing a 41% drop in funding. The result is that the cancer plan is delayed, treatments are delayed and vital treatments are not provided. That is our loved ones not being cared for. This is what charities do day in, day out.

The withdrawal of the furlough scheme will be devastating for this sector, which has depended on it so much. There is no money coming in. We need a solution.

[Danny Kruger (Devizes) (Con)]

Will the hon. Lady give way?

[Rachael Maskell]

I wish to continue.

When talking about large organisations, from the Southbank Centre to Oxfam and the National Trust, we must also remember the small organisations. It is estimated that 90% of black, Asian and minority community organisations will be gone by the end of the financial year. If we think of what has just happened across this country, it is clear that we need those organisations. The Government need to step up and ensure that they are there.

The sector is calling for an extension of the coronavirus job retention scheme with greater flexibility; a gift aid emergency relief package; the repurposing of the national fund, which is worth £500 million, to allow access to support charities and services; the effective and efficient distribution of the shared prosperity fund; and the creation of a community wealth fund using dormant assets. It is crucial that is brought forward now, before it is too late.

If I may, Madam Deputy Speaker, I want to raise one issue concerning my constituency. We will be the second worst hit constituency in the country, and therefore we need some action now. While the Government have supported the BioYorkshire plan, which will create 4,000 jobs, they are tying that up in a devolution deal. I therefore urge the Government to bring that funding forward so that we can provide that safety net now to stop us moving into an unemployment crisis in York, which no one in this House wants to see. The Minister could solve that problem for us.

--- Later in debate ---

[Catherine West (Hornsey and Wood Green) (Lab)]

I think most of us agree that we are facing a triple whammy at the moment, with a public health crisis in the guise of covid, an economic crisis in which Brexit has already cost our economy billions of pounds, and climate change, which will eventually cost us a lot and is currently costing lives as well as other things that the Treasury may not be making a record of. That is certainly an expensive project as well. We are in a recession. We know that GDP fell by 20.4% in the second quarter of 2020—that is 20.4%, not 2.4%—which is the largest confirmed fall of any economy in Europe and the G7, so we are facing really tough times.

I spent the summer visiting food banks—like many other Members, I am sure—and I would like to put on record my praise for the volunteers who run the Campsbourne Primary School food bank, which is providing desperately needed food for many families in Hornsey. I also want to mention another fantastic service, which is an innovation I hope others can look to. It is called Connected Communities, and it is local authority-based but works closely with the voluntary sector to pick up hard-to-reach groups of people who are not digitally aware.

[Danny Kruger]

I want to echo my support for those sorts of organisations and to follow on from what the hon. Member for York Central (Rachael Maskell) said about the charity sector. I sympathise very much with what both hon. Members are saying about support for these organisations. Does the hon. Member for Hornsey and Wood Green (Catherine West) acknowledge that the Government made £750 million available for small grass-roots charities to help them to get through the covid crisis?

[Catherine West]

Indeed. No one on this side of the Chamber is saying that any of that money was not very much called for. There was a tiny bit of wastage, according to the Select Committee findings that I read yesterday, but I hope that, over time, the Treasury will get rid of the £3.5 billion wastage.

I have some asks for my constituency and I have my figures here. I am a London MP, and many Members who know London will be aware that Muswell Hill ward is not considered to be a low-income place. Unfortunately, however, it has seen an increase of 300% in jobseeker’s allowance and universal credit claimants. The neighbouring Fortis Green ward, which is also considered quite an expensive and well-to-do part of my constituency, is facing a 234% increase in the number of people signing on. Alexandra ward is home to the famous and beautiful Alexandra Palace exhibition hall, the former home of the BBC, and it is a lovely part of my constituency. It has seen a 220% increase in the number of people claiming jobseeker’s allowance and universal credit. The difference between this recession and the 2008 global financial crash is the impact that this one has had across the economy.

Lots of people are very well paid when they are in work, but because they are self-employed, they are suffering exponentially. What are my asks? First. I am asking for sector-specific schemes for workers, so that we can look at the self-employed and particularly those in the creative sector. Secondly, I am asking for specific help for people who, for example, have a small business and are helping several of their employees to manage but have not had anything back for themselves. In conclusion—

Economic Update

Danny Kruger Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

I thank the hon. Member for the thoughtful question. He is right to ask about that particular point. He will be pleased to know that, compared with previous loan guarantee schemes, the generosity of the Government guarantees is significantly increased to provide a strong incentive for the banks to provide that lending. We have spoken to all the banks individually specifically on this measure and have their assurance that they will work at pace to deliver it. As a result of our entreaties, they have also unilaterally unlocked £21 billion of their own extra lending capacity to provide to the sector, so I am confident that they will deliver as required.

[Danny Kruger (Devizes) (Con)]

Many businesses depend on not the public or other businesses, but the state itself, through contracts with different parts of the public sector. Many such contracts are on a payment-by-results basis, so they are paid according to outcomes that might no longer be possible, given the situation. Will the Chancellor work with other parts of Government to ensure that the state’s contracts, particularly with social enterprises, charities and social businesses, can be flexed to ensure that those important businesses stay afloat?

[Rishi Sunak]

My hon. Friend makes an excellent point, which I will be sure to raise with the Chancellor of the Duchy of Lancaster.

Beer and Pub Taxation

Danny Kruger Excerpts

Wednesday 5th February 2020 Westminster Hall

[Danny Kruger (Devizes) (Con)]

I will be quick. I very much welcome this debate, which comes in the context of a great thrust of Government policy towards investing in economic infrastructure, which I wholeheartedly welcome. Equally, we should surely be investing in the institutions of our communities, and that should be just as important an area of Government focus. We are thinking about all sorts of interesting ways that we can do that and about new forms of investment in the social capital of our communities. What we have already is the tax regime around pubs and, as we have heard, in many places pubs are the absolute heart of our communities.

Mr Gray, the Devizes constituency is of course the most beautiful part of Wiltshire. We have a whole number of brilliant pubs and brewers there. There is the great Wadworth Brewery in the heart of Devizes town, there are Ramsbury ales, and there is a small micro-brewery that I visited recently, called Stonehenge Ales, run by a Danish couple who came over here many years ago because of our culture of brewing and because they believed in the traditions of English ales and brewing. They have made a tremendous success of that.

I echo the points that have been made, particularly around small breweries relief. There is a clear problem with the cliff edge and a need to smooth the withdrawal of the benefit. Surely any loss to the Exchequer that would follow from increasing the tax relief for brewers would be more than made up for in the growth in receipts as the industry grows.

Business rates are probably the biggest barrier to the hospitality sector and the role it plays, particularly in towns and high streets. I very much welcome the Government’s review of business rates, because we need to see our pubs strengthened as the heart of our communities.