Social Security
Jesse Norman Excerpts(4 years ago)
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Madam Deputy Speaker (Dame Rosie Winterton)
I call Minister Jesse Norman to move the motion. He is asked to speak for no more than 20 minutes.
The Financial Secretary to the Treasury (Jesse Norman)
I beg to move,
That the Employment Allowance (Increase of Maximum Amount) Regulations 2020 (S.I., 2020, No. 273), dated 11 March 2020, a copy of which was laid before this House on 10 March, be approved.
This draft legislation allows the Government to increase the employment allowance by one third, or £1,000, giving more than 1 million small and medium-sized businesses up to £4,000 off their employer national insurance contributions bills. Employers pay secondary class 1 national insurance contributions on their employees’ earnings above the secondary threshold, which is set at £8,788 this year. Those contributions are charged at 13.8% and constitute the largest business tax by revenue in the UK.
The employment allowance was introduced in 2014 to help businesses with the costs of employment and to encourage them to grow and to hire more staff. It is claimed by more than 1 million employers in order to reduce their employer NICs bill by up to £4,000 per year. The Government recently restricted the employment allowance to smaller businesses with a national insurance contributions liability under £100,000, thereby ensuring that this valuable support is targeted at those who need it most.
At Budget, the Chancellor announced that we would deliver our commitment to increase the employment allowance for smaller businesses from £3,000 to £4,000 from April 2020. Businesses have been able to access that increased support from the start of the tax year. The draft regulations, if passed, will legislate for that increase to the employment allowance. More than half a million eligible businesses will benefit from the increase by up to £1,000. The Treasury expects the average gain from this measure to be about £850.
The Government are committed to supporting the UK’s smallest and often most entrepreneurial businesses, and this measure achieves that. Some 95% of the businesses benefiting from this increase are small and microbusinesses. Increasing the employment allowance to £4,000 means that 65,000 more businesses will see their employer national insurance liabilities fall to zero. Since introducing the employment allowance in 2014, the Government will have taken around 650,000 of the UK’s smallest businesses out of paying national insurance contributions entirely.
The Government are determined now more than ever to support people and businesses. At Budget, we increased the national living wage by 6.2% to £8.72 an hour. Along with increases to the income tax personal allowance and the national insurance primary threshold, that means an employee working full time on the national living wage is £5,200 better off today compared with April 2010.
However, we are aware that by supporting people at work through national living wage increases, we also increase cost for businesses. Increasing the employment allowance helps businesses to meet that cost. Businesses will now be able to employ four rather than three full- time employees on the national living wage without paying any employer national insurance contributions.
This increase will cost more than £2.3 billion over this Parliament; it is a large tax measure. It should be noted that in just four years, the Government have doubled the value of the employment allowance. The draft regulations legislate for a Budget measure that is already helping more than half a million of our smallest businesses with the costs of employment and has been supported by the Federation of Small Businesses.
Before I conclude, let me welcome the hon. Member for Ilford North (Wes Streeting) to the Labour Front Bench. I enjoin him and all colleagues in the House to join me in supporting the draft regulations, which I commend to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Minister, Wes Streeting, who is asked to speak for no more than 15 minutes.
Jesse Norman
I thank all Members who have contributed to this very constructive debate for their support on this important measure.
I agree, in some respects, with the hon. Member for Ilford North (Wes Streeting) that there is a degree of unreality about this. Of course, as he will know, this measure legislates for change that is already in operation as from the Budget, and therefore does not reflect, is not designed to reflect, and cannot, in fact, in law reflect all the changes that have happened since then. I think he will also be aware that we have had several Budgets- worth of additional measures since then from the Treasury and from across Government.
It is worth saying that the air of unreality that the hon. Gentleman describes can also, in some respects, apply to some of the points that have been made in the debate. It vaguely reminds one of the famous “Monty Python” sketch, “What have the Romans ever done for us?” Well, at the moment we have the coronavirus jobs retention scheme, the business interruption loan scheme, the self-employment scheme, statutory sickness pay, £750 million of charity support, grants, tax reliefs, billions of pounds to local authorities, and HMRC’s “time to pay” arrangement. That is an astonishing array of different packages. Of course, there may be people who are not, or not yet, able to benefit from them, or to benefit as much as they would like, but I think that everyone will be able to benefit from them in some regard, because that is how they are designed.
The hon. Gentleman mentioned the social investment tax relief. As he will be aware, we have consulted on that. Interestingly, I have talked to some of the social investment tax relief organisations involved, and they concede that so far the relief has not been effective, so the question is really whether it would be more effective if it were continued. Of course, the Treasury continues to reflect on that matter, as it does with all taxes.
I share the view of the hon. Member for Airdrie and Shotts (Neil Gray) that we have had constructive interactions in the past, and I thank him very much for his speech. He asked whether the employment allowance could be extended to cover all employees; I think I am right in saying that 93% of all businesses, including those owned and run by charities, remain eligible for the employment allowance, so it is extremely comprehensive. The restriction to smaller companies reflects the point that £4,000 is a substantial amount for small and micro- businesses but not for much larger businesses with national insurance contributions payments of more than £100,000 a year.
The hon. Member for Richmond Park (Sarah Olney) asked about the self-employed and dividends. She will be aware that dividends are a payment in return to capital ownership of a company, rather than as a matter of wages. Because of that, there is no available information as to who benefits and by how much and there is no clarity as to whether the dividends are in fact a form of wages or may have come from other activities of the business. It is of course right to focus on the issue if that is what her constituents are pressing her on, and we continue to think about the point.
The hon. Lady mentioned the £50,000 threshold for the self-employed; I think I am right in saying that on average, according to Her Majesty’s Revenue and Customs, a self-employed business has to have had £200,000 of revenue in order to have £50,000-worth of profit, so in most instances we are not talking about the most vulnerable people in society, who make up the groups that we are very much focused on assisting to the extent that we possibly can.
The hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar) asked about devolution. As he will be aware, the Smith commission made a clear recommendation that national insurance contributions should remain reserved. National insurance is, of course, a social security contribution, so there would be many interactions with entitlement to benefits and other impacts across other businesses and individuals. The UK Government have delivered on their promise to devolve increased income tax powers to Scotland; it remains up to the Scottish Government to decide what to do with their own tax policy, and they have begun measures—be it said not enormously wide-ranging ones—to change tax policy.
The hon. Member for Oxford West and Abingdon (Layla Moran) made a point about charities. As I have suggested, the employment allowance covers an overwhelmingly large 93% of the businesses to which it is potentially applicable.
The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about a 12-month funding settlement. As the Chancellor has acknowledged, in terms of the public purse the present situation is not sustainable. It is not a situation that people should want to sustain, not least because it may in due course have counterproductive economic effects. We in the Treasury, and across Government, are reflecting very hard on how we can emerge from this lockdown stronger and more unified as a country than ever. With that said, I commend the regulations to the House.
Question put and agreed to.
Resolved,
That the Employment Allowance (Increase of Maximum Amount) Regulations 2020 (S.I., 2020, No. 273), dated 11 March 2020, a copy of which was laid before this House on 10 March, be approved.
Adjournment
Coronavirus-related Activities: Statutory Residence Test
Jesse Norman Excerpts(4 years ago)
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The Financial Secretary to the Treasury (Jesse Norman)
The Government warmly welcome the expertise and resources offered by those who wish to come to the UK to combat the coronavirus, from anaesthetists through to engineers working on ventilator design and production.
However, the actions and presence of these individuals in the UK could inadvertently and unfairly affect their own tax residence status, and potentially deter others from giving their assistance.
Accordingly, the Government will legislate in Finance Bill 2020 to amend the statutory residence test (SRT) to ensure that any period(s) between 1 March and 1 June 2020 spent in the UK by individuals working on coronavirus disease-related activities in specified sectors will not count towards the residence test.
[HCWS218]
Tax Policy
Jesse Norman Excerpts(4 years ago)
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The Financial Secretary to the Treasury (Jesse Norman)
At Budget 2020, the Government published 11 tax policy consultations and calls for evidence. The Government are grateful for the responses to these that have already been received from stakeholders.
The Government recognise that many stakeholders are facing significant disruption due to covid-19. The Government want to give all stakeholders time to submit their views.
Therefore, the deadlines for responses to the following tax policy documents will be extended for three months, to allow stakeholders to engage fully with these documents and to contribute to the tax policy making process. However, the Government encourage early responses from stakeholders where possible, to support their continuing consideration of these issues:
Plastic packaging tax: policy design—now closing on 20 August 2020
Preventing abuse of the R and D tax relief for SMEs: second consultation—now closing on 28 August 2020
Tackling construction industry scheme abuse—now closing on 28 August 2020
Notification of uncertain tax treatment by large businesses—now closing on 27 August 2020
Vehicle excise duty: call for evidence—now closing on 3 September 2020
Call for evidence: raising standards in the tax market—now closing on 28 August 2020
Consultation on the taxation impacts arising from the withdrawal of LIBOR—now closing on 28 August 2020
Hybrid and other mismatches—now closing on 29 August 2020
Tax treatment of asset holding companies in alternative fund structures—now closing on 19 August 2020
Consultation: HMRC charter—now closing on 15 August 2020
The EU exit transition period will end on 31 December 2020. The consultation on duty-free and tax-free goods carried by passengers and the informal consultation on the VAT treatment of overseas goods will therefore continue to the existing timetable. This will provide businesses with clarity as early as possible on the policies that will apply from 1 January 2021. It will also give businesses enough time to prepare and ensure the right legislation is in place for 1 January 2021. The Government appreciate that some stakeholders may not be able to respond by the deadline, and where late submissions are received, they will take them into account as far as possible.
On 16 April the Government published a consultation on the climate change agreement scheme extension and reforms for any future scheme. The timetable for this will continue as planned, to ensure the extension of the scheme will be in place by September as announced at Budget 2020, supporting energy intensive businesses to operate in a more environmentally sustainable way.
At Budget 2020, the Government also announced they would publish a number of other tax policy documents. In the light of covid-19, the Government will consider the publication of these and other expected documents on a case-by-case basis, taking into account the impact of covid-19 on stakeholders. The Government will continue to publish the following documents over the spring and summer:
The call for evidence for the fundamental review of business rates
The consultation on further entitlement to use red diesel
The consultation on the design of a carbon emissions tax
The consultation on national insurance contributions holiday for employers of veterans
A call for evidence as part of the post-EU exit alcohol review
A summary of responses to the call for evidence on the operation of insurance premium tax
A summary of responses and government next steps to the aggregates levy review
HMRC’s civil information powers
A summary of responses to the non-UK resident SDLT surcharge consultation
A summary of responses to the call for evidence on VAT electronic sales suppression
A review of how VAT works in the public sector
The Government will delay the publication of the following documents until the autumn:
A discussion document on the wider application of tax conditionality
The response to the call for evidence on simplification of the VAT partial exemption and capital goods schemes
The consultation on whether qualifying R and D tax credit costs should include investments in data and cloud computing
The consultation on stronger penalties for tobacco tax evasion
The Government will provide more detail on the publication of the following documents in due course:
The consultation on aviation tax reform
The call for evidence on disguised remuneration schemes
The review of the UK funds regime
The consultation on the economic crime levy
The conclusion of the small brewers’ relief review
A summary of responses to the call for evidence on social investment tax relief
The Government’s position on publication of tax policy documents will be kept updated through the public consultations tracker.
[HCWS211]
Finance Bill
Jesse Norman ExcerptsMonday 27th April 2020
(4 years ago)
Commons ChamberRead Full debate Finance Act 2020 View all Finance Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Jesse Norman)
I beg to move, That the Bill be now read a Second time.
I congratulate the new shadow Chancellor and her shadow Treasury team on their appointments. Six weeks ago, on 11 March, this House assembled to hear my right hon. Friend the Chancellor deliver his Budget speech. How long ago that seems now when every day feels like a decade. A Budget statement is a central part of our democracy; indeed, it is at the very heart of a parliamentary tradition of accountability for taxation that goes back to the 13th century. It is deeply sobering to reflect that that 11 March moment might be the last great parliamentary occasion we have in this Chamber for some time to come.
Truly, we know better now. We live in a disenchanted world, a world of self-isolation, of social distancing, of shielding, of lockdown. In the Treasury and across Government as a whole we have worked around the clock since then to respond to the extraordinary challenges posed by the coronavirus to people’s lives and livelihoods. The same has been true in this Palace of Westminster. I know that I speak for all my colleagues in saying that I have the greatest respect for the work that you, Mr Speaker, and so many others, including parliamentarians across this House, have done to prevent covid-19 from becoming a threat to our democracy itself. I pay special tribute to all the Clerks and staff of this House of Commons and of the Palace of Westminster for working so quickly and creatively to adapt to this new reality and for their skill in drawing on the flexibility and resilience of our uncodified constitution to create a virtual Parliament.
When this Chamber was bombed and destroyed on the night of Saturday 10 May 1941, with the fires raging, the roof fallen in and the Lobbies and corridors gutted, it was decided that the Commons should sit immediately in Church House. Extraordinary measures were undertaken at great speed to transfer proceedings to the new location. The Commons rarely sat on Mondays, so it duly reconvened in the normal way on Tuesday 13 May, but it did so in Church House. There were oral questions to the Secretary of State for War, including on officers’ outfits and the collection of swill and vegetable waste from military units, followed by a full Order Paper of business and, at the end, a short statement from the Prime Minister in which he reported that the old Chamber was damaged beyond immediate repair and that preparations were already under way for a move to a further location, if that should be necessary. Thus the biggest and the worst raid of the blitz resulted in the loss of not one single day—indeed, not one single minute—of sitting time for Parliament. It is a moment of which this country can be intensely proud.
Why so much determination and so much speed? It was so that, as Churchill said:
“hon. Members may be reassured that the work of our Parliamentary institutions will not be interrupted by enemy action”.—[Official Report, 13 May 1941; Vol. 371, c. 1086.]
It was so British democracy should not be thought to have been destroyed amid the burning ruins of the Commons Chamber, and so that the great thread of public scrutiny and parliamentary accountability that gives legitimacy and authority to our Government should not be broken. So it is again today, Mr Speaker. For that, we are, and we will always be, profoundly grateful. I hope that we shall soon return to the close combat of political business, whether that be the intimate interrogation of the Chamber, the camaraderie of the Lobbies or the noise and clamour of a full House packed to the rafters with MPs, press and public looking on, all fully intent on our national political business; the House of Commons as the cockpit of the nation.
Here again, history can be our guide. When the Chamber was rebuilt, special care was taken to make it, as it had been, too small for the number of Members. That was at the specific insistence of Churchill. In his words, the essence of good House of Commons speaking is the “conversational style”. This requires a
“fairly small space, and there should be on great occasions a sense of crowd and urgency…a sense that great matters are being decided, there and then, by the House”.
Not for Churchill the vast, empty hall of Deputies, the amphitheatre, or what he called “Harangues from a rostrum”. Without that collective sense of crowd and urgency and the ever-shifting energy of the House in action, we lose something vital.
Mr Speaker, I ask you this: can we not also gain from this great virtual experiment? Through new forms of questioning and calmer, more dispassionate cross-examination of Government, may we not find glimmers of new possibility amid the present gloom? I believe that we can. The significance of today’s debate lies not just in this Finance Bill, important though it is; it marks a new legislative beginning for Parliament. As we go forward together, I hope that we in this House can restore not merely our old ways, but what was best in them, and use this moment to add, to develop, to reform and to make them better still.
When my right hon. Friend the Chancellor addressed the House on 11 March, he announced a Budget focused on delivering the Government’s manifesto commitments from the general election last year. He did not only that; he also set out and carefully explained the reasons for a very ambitious and wide-ranging set of measures designed to tackle the coronavirus head-on, to buttress our frontline services and to support people, families and businesses affected by the pandemic.
Since then the Government have gone much further still. Indeed, we have announced what we believe to be the most comprehensive and far-reaching economic response to covid-19 in the developed world, and Ministers and public servants across Government have worked to deliver it. Among its many different packages, that response includes a job retention scheme, which guarantees 80% of the wages of furloughed workers, and which has been conceived, developed and launched by Her Majesty’s Revenue and Customs in just a few weeks.
Alongside the job retention scheme is a similarly generous scheme aimed at supporting the self-employed for 80% of taxable trading profits up to £50,000. This covers some 95% of those who are mainly self-employed, including cleaners, taxi drivers, plumbers, musicians, journalists, electricians, childminders and many others. Businesses can also benefit from more than £300 billion-worth of Government-backed loans, numerous tax cuts and grants, with a business rates holiday for the worst-affected sectors of the economy. There has also been a further package of measures aimed at the charitable sector.
These are unprecedented measures for unprecedented times. The impact of the coronavirus falls not only on businesses, but directly on the well-being of some of the most vulnerable people in our society, whom the Government are determined to protect. For that reason, the Government have raised by £1,000 the universal credit standard allowance and working tax credit basic element for a year. Almost a billion pounds has been allocated so that the local housing allowance can cover at least 30% of market rent, and the Government have offered vouchers or meals at home for children who would otherwise be eligible for free school meals.
This Bill goes beyond the immediate response to covid-19 by delivering the Government’s manifesto commitment to make the tax system fairer and more proportionate. For example, care leavers who start apprenticeships will pay no income tax on bursary payments that they receive. I am delighted to say to recipients of payments under the Windrush compensation scheme and the troubles permanent disablement payment scheme that those payments will be exempt from income, inheritance and capital gains tax, and inheritance tax will not be collected on Kindertransport fund payments.
Taxes are rarely popular or straightforward, but they are necessary to support our public services. Now, more than ever, the Government have a duty to ensure that the rules are applied correctly. Last month, my right hon. Friend the Chief Secretary to the Treasury announced that, in the light of covid-19, the Government will delay the introduction of reforms to the off-payroll working rules in order to give businesses more time to adapt. However, he was clear that the Government remain fully committed to introducing these reforms to ensure that people working like employees but through their own limited companies pay broadly the same tax as individuals who are employed directly. That has not changed, and the Government will introduce an amendment to the Bill in due course to legislate for a new commencement date of 6 April 2021. The Government will use the additional time to commission further external research into the long-term effects of the reforms in the public sector, with the intention that that research will be available before the reforms come into effect in the private sector in April 2021.
Meanwhile, this Bill implements the recommendations of Sir Amyas Morse’s independent review of the loan charge. It will mean that the loan charge no longer applies to loans entered into before 9 December 2010, which is the point at which Sir Amyas found that the law put beyond doubt the fact that disguised remuneration schemes were a form of tax avoidance. The Bill also brings forward legislation to repay taxpayers who voluntarily settled for years that are no longer in scope, while those still able to pay will be able to spread their loan balance over three tax years to suit their finances.
The Budget also included changes to help businesses to prosper for years to come. This Bill will implement the Government’s manifesto commitment to increase the research and development expenditure credit rates from 12% to 13% in order to help drive growth and productivity across the UK, and to continue to support this country’s proud history of innovation. It also raises the structures and buildings allowance rate from 2% to 3%, which should help to stimulate long-term capital investment in the United Kingdom by strengthening the business case for investment in shops, factories and agricultural buildings. Those changes apply nationwide, underlining the fact that, even in these times of uncertainty, the Government are seeking to level up investment and opportunity right across the whole United Kingdom.
The Government have made successive cuts to the rate of corporation tax since 2010 and we now have the lowest headline rate in the G20. That has helped to create a corporate tax system that supports British businesses, boosts economic growth and strengthens the UK’s pull for inward investment.
However, the extra benefits of lowering corporation tax rates still further must be balanced against other objectives, such as funding the NHS and the public services on which we all rely. That is why the Chancellor announced that the Government will not cut the corporation tax rate further this year, but instead will maintain it at 19%, in line with their manifesto commitment.
Likewise, while the Government are committed to encouraging entrepreneurial activity, the evidence indicates that entrepreneurs’ relief in its current form is neither effective in stimulating new business growth nor good value for money. By reducing the lifetime limit from £10 million to £1 million, we are returning the relief to its original purpose while continuing to promote and reward enterprise.
Finally, following an extensive period of consultation, the Bill will implement the digital services tax. Digital businesses providing search engines, social media platforms and online marketplaces derive significant value from their UK users, but current international corporate tax rules mean that that value is not reflected in the level of UK tax they pay. Setting a tax on revenues from those digital services at a rate of 2% will make the system fairer and should raise up to £2 billion over the next five years, but the Government’s ultimate goal is to secure a long-term global solution. We are working with international partners through the Organisation for Economic Co-operation and Development to agree a way forward.
Covid-19 is the most pressing challenge for the country—and, indeed, the world—at the moment, but it is by no means the only one. Notwithstanding our intense focus on tackling the pandemic, the Government have not lost sight of longer-term public concerns, notably the need for the UK to move to a greener and more sustainable economy in the years ahead. Now that we have left the European Union and as we prepare to leave the EU emissions trading system, this Bill introduces legislation for both a charging power to create a UK emissions trading system, and a carbon emissions tax.
This twin-track approach is designed to ensure that, whatever the circumstances, the UK will have an effective carbon pricing regime in place. In the Budget, the Chancellor also revealed key elements of the plastic packaging tax, which should significantly increase the use of recycled materials in packaging. This Bill allows preparatory spending ahead of its introduction.
The Bill will also encourage the uptake of zero-emission vehicles by removing them from the vehicle excise duty expensive car supplement, which will mean that employers and employees pay no tax on zero-emission company cars in 2020-21. The United Kingdom has led the world in introducing legally binding carbon emissions reduction targets; these measures underline once again how serious the Government are about meeting those targets.
My right hon. Friend the Prime Minister has made it quite clear that we will do what it takes to support our public services and key workers as they respond to this pandemic, and to safeguard jobs and businesses so that our economy can bounce back as quickly as possible. Yet we must also look to the future. The advent of a virtual Parliament is a chance to chart new territory, and this Bill is a first step on that journey.
The Bill also redeems the manifesto promises of the last election. It points the way to a fairer tax system and a greener and more sustainable future. With the support of Members from across the House, and as we look beyond lockdown, it gives us all an opportunity to cement the United Kingdom’s place as one of the most innovative, exciting and enterprising nations in the world. For all those reasons, I commend this Bill to the House.
Mr Speaker
I call Anneliese Dodds, who is asked to speak for no more than 15 minutes.
Contingencies Fund Advance
Jesse Norman Excerpts(4 years ago)
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The Financial Secretary to the Treasury (Jesse Norman)
HM Revenue and Customs will incur new expenditure in connection with the Government’s response to the coronavirus covid-19 pandemic in 2020-21.
Parliamentary approval for additional resources of £42,000,000,000 for this new expenditure will be sought in the main estimate 2020-21 for HM Revenue and Customs. Pending that approval, urgent expenditure estimated at £42,000,000,000 will be met by repayable cash advances from the Contingencies Fund.
[HCWS201]
Financial and Social Emergency Support Package
Jesse Norman Excerpts(4 years, 1 month ago)
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The Financial Secretary to the Treasury (Jesse Norman)
It is a privilege to return to the Dispatch Box for the third time in two days, and I can only pay tribute to your fortitude and resilience in being in the Chair for much of the time I have been at the Dispatch Box, Madam Deputy Speaker. I am opening this debate on behalf of the Government and I would like to pay tribute now to the right hon. Member for Islington North (Jeremy Corbyn), in case this is his last appearance at the Dispatch Box as Leader of the Opposition. May I also associate myself with the very warm comments that he and others have made about Tristan Garel-Jones, who was widely loved and admired across this House?
I thank the Opposition and the leadership of the other political parties for their constructive and supportive approach over the past few weeks, which is reflected across the House. Truly, these are extraordinary times. Our country has not faced a threat of this magnitude since the second world war. It is astonishing to think that it was just two weeks ago today that my right hon. Friend the Chancellor of the Exchequer delivered his first Budget, standing at this Dispatch Box. I can say from direct personal experience that the Chancellor, Her Majesty’s Treasury and Her Majesty’s Revenue and Customs officials have worked around the clock before and since that time. Our single goal has been to do whatever it takes to support the British people at a time of crisis.
That Budget laid the foundations for a coherent, comprehensive and co-ordinated plan to limit, mitigate and address the impact of coronavirus, with a £12 billion package of support for public services, businesses and individuals. It was an unprecedented intervention by this or any recent Government, yet it has proved to be—and how—merely the first step. From the outset of the crisis, the Government have been clear that they are ready to do whatever it takes. Last week, we announced further support for businesses and individuals, including a £330 billion package of business loan guarantees. Only yesterday, I took through the House the Contingencies Fund Bill, which increased the cash-flow financing to Departments to £266 billion, pending the main estimates.
Sarah Jones (Croydon Central) (Lab)
There are reports that the announcement about the self-employed will be made on Thursday, when the House will not be sitting. Will the Minister guarantee that there will be some mechanism for us to question and prod the Government and get responses about the announcements that will be made when we are no longer here?
Jesse Norman
I thank the hon. Lady for her question. She will be aware, as we all are, of the issue relating to the self-employed. The Prime Minister and the Chancellor said that we will come forward with a package shortly. The House will rise by, I think, the common assent of all the political parties and in the knowledge that it is in the face of a crisis. When such a package is brought forward, there will be ample opportunity to debate and discuss it in the House when it returns. Before that, the Government will be held to account in the public square in the usual way, and Ministers are available for direct interrogation by any Member of Parliament who wishes to contact them.
Lloyd Russell-Moyle
Will the Minister arrange a Zoom call with all of us when that package is announced, so that we can be briefed and discuss it? I ask for a simple yes or no—it would be really easy to do and it is secure enough, because we will be asking clear questions in public.
Jesse Norman
It is not in my power to say yes to that, I am afraid, but the request has been noted and, of course, I will pass it on.
I think I can speak for everyone in this House in wanting to put on record my thanks to all those across Government, in Parliament and in our public services who have made this astonishingly fast speed of reaction possible. The result has been an unparalleled package of measures that we have brought forward with great rapidity and resolve, and I pay tribute to them for that. I reassure the House that Ministers and officials continue to work day and night to consider how best to provide further support, including for the self-employed, which I will touch on later.
Ultimately, however, success in defeating this virus rests not with Ministers and officials in Whitehall, but on the actions of millions of individual people throughout the country. Our common aim must be to reduce the rate of infection and prevent the national health service from becoming overwhelmed. In that way, our doctors and nurses, and all those who support them, can focus on helping those in greatest need. Every man, woman and child can be a lifesaver by staying at home, only venturing out when strictly necessary for food, medicine and essential exercise, and even then staying at least two metres away from other people.
The Government are in no doubt of the scale of the challenge. The action that we must take collectively represents a profound, but temporary change to our way of life in this country. Indeed, it runs counter to human nature.
Stephen Timms (East Ham) (Lab)
Does the Minister recognise that, in order to be able to stay at home in the way he is describing, people need financial support? Will he respond to the shadow Home Secretary’s earlier point that large numbers of people working legally in the UK have no recourse to public funds? At the moment, there is no support available to enable them to self-isolate in the way he is rightly advocating.
Jesse Norman
I thank the right hon. Gentleman for the question. Of course, if people are falling through the social safety net as it presently exists, we will stand ready to address that and support them. He will recall that when the Prime Minister was Mayor of London he called for an amnesty on illegal immigrants and others, so he has a wide and capacious interest in that area.
Mr Dhesi
I thank the Minister for allowing me to intervene. He will have heard about today’s shocking and saddening terrorist attack on a Sikh gurdwara in Afghanistan. I am sure he will join me in expressing sincere condolences to the victims’ families, many of whom live in the UK. My right hon. Friend the Member for East Ham (Stephen Timms) has mentioned those with no recourse to public funds. Does the Minister agree that it is also very important that the Home Office takes into account those minorities who are seeking asylum and that they are given adequate support during this time of crisis?
Jesse Norman
I thank the hon. Gentleman for the question. I was not aware of the attack—I am afraid I have been focusing on our response to the coronavirus—but of course I share his concern and send our deep sympathy and condolences to the families of those involved. He has registered in this conversation in Parliament his point about the Home Office. We will, of course, provide support to them in the usual way in reaction to the coronavirus, as we would to any person living in this country.
Let me press on. As the Leader of the Opposition has rightly pointed out, the action of distancing one from another runs counter to human nature. We value our relationships with our friends and our family more than anything else. Communities thrive through social interaction. He rightly spoke of our interdependence, and this bears that out. Of course, businesses also rely on their physical as well as online connections to consumers in this country and overseas. When we think of people co-operating, let us not forget that business and, indeed, markets are often forms of human co-operation themselves. However difficult and painful this may be, at the present moment it is nevertheless essential. We must all play our part in this gigantic collective effort. Only through discipline, patience and community spirit can we turn the tide together. Now is the time for the country to come together behind this goal. As Burke said, the nation is a moral idea. It is the legitimacy of the nation that underwrites our capacity to intervene in people’s lives, and it is only by believing in each other that we will succeed in doing so.
The response from across the United Kingdom has already been magnificent—from the thousands of former medical staff now returning to the frontline alongside student nurses who have opted to begin their NHS careers early, to the world-class engineering firms working with us to ramp up production of ventilators, to the men and women of our armed forces, both regular and reserves, stepping up once again to serve their country. Coming from Hereford, I cannot think of them without paying them a special tribute.
I also pay tribute, as the Leader of the Opposition has done, to the thousands of key workers—shop assistants, pharmacists, delivery drivers, cleaners, police, firefighters, teachers and many others—who are keeping essential services running at this critical time, and of course to the legions of volunteers who are mobilising to support the elderly and vulnerable in their community. I have myself signed up for the NHS volunteer programme—it was a very straightforward process—and I would encourage any Member of this House who feels so inclined to do the same thing.
The whole country is united in common cause. We are a nation and a people with strength in depth, yet this pandemic represents a deep shock to the global economy. In this country, many of the restrictions now in place go even beyond some of those seen in wartime. There is concern among business for the future, among people for their jobs and wages, and among all of us for our loved ones and our neighbours. We in Government recognise all those concerns.
David Linden (Glasgow East) (SNP)
I am immensely grateful to the Minister for giving way. It is right that he talks about key workers, but over the last 24 to 48 hours my inbox has been overflowing with messages from constituents who are being required to attend work, including people who work in home furnishings and as sales staff in call centres. I understand the need to be bipartisan in these times, but may I say very gently to the Minister and the Health Secretary that the messaging from the Government on this particular issue has, by and large, been pretty poor? We have a situation where, frankly, workers are being exploited and called into work when they do not need to be there.
Jesse Norman
I am grateful to the hon. Gentleman for registering that point and putting it on the record. I will come to the question of communications, and perhaps I can include that point when I do.
As I have said, we stand ready to do whatever it takes to protect our society and economy. The first task has been to buttress our frontline public services. In the Budget, my right hon. Friend the Chancellor announced a package of support for the public sector—notably a £5 billion covid-19 response fund. Those investments will save lives here and now, and will also fund the research, diagnostic testing and surveillance that will bring the virus to heel over the longer term.
Meanwhile, the Government are working with the business community to bring our nation’s scientific, industrial and commercial expertise to bear behind the public health effort. We are seeing examples of this “can do” attitude all the time, as red tape is slashed, timeframes are condensed, and the public and private sectors pull together as one. Let me give one example. Her Majesty’s Revenue and Customs is fast-tracking applications to authorise the production and use of denatured alcohol. That means that Scottish distilleries and others can turn the ethanol that they have over to the production of alcohol-based hand sanitiser. The usual turnaround time for such requests is 45 days. Since the beginning of March, HMRC has cut that to five days. This has resulted in an additional 2.5 million litres of alcohol for sanitiser being authorised in the last three weeks. We have now gone even further; as announced on 23 March, licensed distillers and gin producers operating in excise warehouses may now use their stocks to produce hand sanitiser without HMRC approval, provided that it is made to World Health Organisation standards or the alcohol used is denatured to the prescribed formulations.
Here, as elsewhere, we see a common approach: decisive action as soon as we can take it; feedback, often from colleagues across Parliament; and improvements as we go. We now have excellent consolidated information on coronavirus available through a single link on gov.uk, and there is specific guidance for businesses from the Department for Business, Energy and Industrial Strategy on a new web page. I had a text message myself from the Government yesterday and the Prime Minister’s broadcast was watched by 27 million people, so I think it is fair to say that the message is getting out there. We have even had Ministers leaving behind their red boxes in order to work online. We know that we must be in the grip of a national crisis when Ministers leave behind their red boxes.
Dr Huq
I am pleased that the Minister is giving us some good news about this advertising campaign—at last, because it seems to have been a bit slow. Could he shed light on two anomalous categories of business, examples of which have contacted me? Buttons Nanny Agency says that domestic staff fall into the category of workers who do have to physically turn up, but it is not clear whether they will retain 80% of their salary; they are in a strange and anomalous position. What is to be done about them? West London English School is a private language school that falls above the rateable value level, but it is an educational service. It is very worried that it is about to shut down. The rateable value of many businesses in my constituency is above £51,000 because it is London and it is different here. Could the Minister do something for them? Very briefly, let me also say that domestic violence is set to rise. Where has the abortion amendment gone? Many of us are concerned that it seems to have vanished.
Jesse Norman
I was just discussing the process of improving the Government response through feedback, often from colleagues, so I am very grateful to the hon. Lady for giving her feedback on those specific areas. In so doing, she will have activated Government processes with the relevant Departments, which will then look at the issues that she has mentioned.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
In the spirit of clarifying anomalies, I have been contacted by many businesses who tell me that, because they do not have business premises or work in co-working spaces, they appear not to be eligible for the business grants. I can understand why they would not be eligible for the rates support, but I do not understand why they would not be eligible for the grants. They are also telling me that they are required to put their own personal homes on the line to get the loans from the banks, so they do not want to take them up and get into debt.
Jesse Norman
I am grateful to the hon. Lady for raising that point. I will look into the question of whether there should be any relation between business loans; I am certainly not aware of one myself. It ought to be possible for people to claim business loans as she has described. As regards the business interruption loan scheme, borrowers are not required to pledge their house, but there may be some requirement for personal guarantees of other kinds, which is what one would expect, and which will open up lending in other ways. The Economic Secretary is very engaged on this issue. There are 40 lenders involved, so ironing out the guidance with all of them, to ensure a consistent picture, has not been the most straightforward thing one could imagine.
Bill Esterson (Sefton Central) (Lab)
I will read out what Barclays is saying to businesses about personal guarantees:
“Loans will need to have a director’s guarantee, or in the case of partnerships and sole traders, you will be personally liable”.
If a person’s only asset is their home, pledging it and being liable amount to the same thing. Will the right hon. Gentleman deal with that problem? That quote was read to me by a person from a company that will now have to lay off its staff and close, and so will not be eligible for the furlough scheme. This will hit workers as well as businesses.
Jesse Norman
I cannot comment, obviously, on the specific circumstances that the hon. Gentleman describes, but I can certainly say that the Economic Secretary to the Treasury is working very closely with the banks to make sure that no business is forced to close as a result of coronavirus.
Jesse Norman
We have discussed this quite a lot, so as I have quite a long speech, and a fair number of colleagues want to speak, I will press on, if I may.
We must face facts: it may take several weeks—possibly longer—before this national effort is reflected in a fall in infection rates, and it may take longer still to defeat the virus completely, but however long it takes, we will do what we can to support businesses and workers. As the House will know, under the jobs retention scheme, the Government will pay 80% of staff wages up to £2,500, provided businesses keep those staff employed. Her Majesty’s Revenue and Customs is working tirelessly to get the scheme up and running. The first grants will be made in a matter of weeks.
Of course businesses face cash-flow concerns, and we are recognising that through the business interruption loan scheme. For larger enterprises, the Bank of England is providing a new facility to help overall liquidity, and HMRC’s existing time to pay arrangements are available to help businesses make ends meet. We have deferred VAT payments for the next quarter, so that VAT-registered businesses will not need to pay VAT alongside their normal returns; that intervention alone is worth over £30 billion. Those measures are on top of those announced in the Budget earlier this month.
As colleagues across the House have mentioned, this is a particularly worrying time for the self-employed. I am acutely aware, as are all Ministers, of how deeply these concerns are felt across the House. Let me be clear that the Government recognise the specific challenges that self-employed people face. We will respond shortly. There has already been discussion of this, and a commitment from the Prime Minister on this issue, with tailored and targeted action. As the Chancellor has said, this problem is very far from straightforward. We are trying to be as inclusive, but also as fair, as possible.
Jeremy Corbyn
Could the Minister tell us how quickly this will be done, because the levels of stress out there among the self-employed are absolutely huge?
Jesse Norman
I understand that. The right hon. Gentleman will appreciate that if we date the official recognition of the need for intervention on coronavirus from the Budget, we are two weeks into the situation. The Prime Minister knows the situation; he made a commitment to the right hon. Gentleman an hour or two ago, and I cannot do better than the Prime Minister.
As of Monday, sole traders and freelancers have been able to gain access to the coronavirus business interruption loan scheme, provided that their activity is channelled through a business account. We are removing the universal credit minimum income floor, so that self-employed workers have access to universal credit, and we have deferred the next deadline for self-assessment income tax payments until 2021, so that self-employed people can manage their finances better over the course of the year.
It goes without saying that more needs to be done and, as I have said, we will do that, but as my right hon. Friend the Chief Secretary to the Treasury made clear to the House yesterday, it is essential that that support reaches the people who need it the most. The Chancellor will provide a further update, as I have described, shortly. Until then, the Government will continue to listen carefully to hon. Members and, crucially, to those most directly affected. As the House knows, just as we are supporting businesses and employees, so we are also supporting families through the crisis. Those on low incomes will benefit from a package of measures worth more than £6 billion, including a £20 a week increase in universal credit standard allowance and the working tax credit basic element—an increase from £318 to £410 a month for a standard claimant over the age of 25. Those who are new to universal credit will not be required to attend assessment interviews. Advances for those claimants who need them will be available by phone or online.
Through these measures and others, the Government are absolutely clear that the burden of this pandemic must not fall on the lowest paid. We are particularly mindful of the needs of the most vulnerable members of our community and the charitable organisations that are working so hard to support them. The jobs retention scheme is available to all PAYE employers, including charitable and not-for-profit organisations. Furthermore, the business interruption loan scheme is applicable to social enterprises and to charities that receive half their income from trading. Charities will also benefit from a three-month VAT deferral to the end of June, and many are already eligible for 80% charitable rate relief as well, and, of course, as you will know, Madam Deputy Speaker, we are giving councils an additional £500 million in hardship funding to ensure that help is available for the most vulnerable people in our society who may be struggling to pay council tax bills.
Sarah Jones
On the point about the extra funding for councils, when I was talking to my own council yesterday it says that that will barely cover the number of people who will be applying for council tax relief; it will just fill that hole. It is looking at things such as the grant scheme. The loans that it will have to administer will amount to £50 million in my borough of Croydon, and there is no system in place yet to help it to understand how it is supposed to administer them, how it will work, and, indeed, how it will fund the support for the very vulnerable, many of whom are already struggling and will be struggling increasingly over the coming weeks.
Jesse Norman
I thank the hon. Lady for registering that point. She will be aware that we have made £1.6 billion available to support local authorities, and, of course, we are specifically supporting them by bringing forward the cash-flow element of business rates. We are leaning into this problem hard, but I thank her for putting the concern on the record.
It has been suggested that this may be the Leader of the Opposition’s final outing at the Dispatch Box. I am sure the House will not welcome that. I will leave it to others to write any political verdict or obituaries that may come, but let me say that no one in this House—certainly not I—would doubt the sincerity and the commitment that he has shown to his beliefs over many, many years, however vigorously we may disagree with them. For myself, I believe in a big society rather than a big state, but let us be clear that, in a time of national crisis, both will be needed. Finally, I think I can speak for my colleagues on the Conservative Benches in saying that we will be sad to see him go.
The coming weeks may be difficult. The action that we have taken has far-reaching consequences for our economy and our society, and yet it has the power to save thousands of lives. Throughout this time, the Government will continue to listen to the concerns of hon. and right hon. Members and of the public. They have already delivered one of the most generous and comprehensive interventions of any Government of the world, and we stand ready to do more. We will make every effort to safeguard people’s jobs and livelihoods, to support our public services and local communities, and to preserve and protect businesses, large and small, across the country. Our message is this: we have got your back and, together, we will defeat this virus and the Britain that emerges from this pandemic will be not only stronger and more resilient, but more united, too.
Oil and Gas Decommissioning Relief Deeds
Jesse Norman Excerpts(4 years, 1 month ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Jesse Norman)
At Budget 2013, the Government announced they would begin signing decommissioning relief deeds. These deeds represented a new contractual approach to provide oil and gas companies with certainty on the level of tax relief they will receive on future decommissioning costs.
Since October 2013, the Government have entered into 96 decommissioning relief deeds.
Oil and Gas UK estimates that these deeds have so far unlocked approximately £8.1 billion of capital, which can now be invested elsewhere.
The Government committed to report to Parliament every year on progress with the decommissioning relief deeds. The report for financial year 2018-19 is provided below.
Number of decommissioning relief agreements entered into: the Government entered into five decommissioning relief agreements in 2018-19.
Total number of decommissioning relief agreements in force at the end of that year: 92 decommissioning relief agreements were in force at the end of the year.
Number of payments made under any decommissioning relief agreements during that year, and the amount of each payment: one payment was made under a decommissioning relief agreement in 2018-19, for £43.2 million[1]. This was made in relation to the provision recognised by HM Treasury in 2015, as a result of a company defaulting on its decommissioning obligations.
Total number of payments that have been made under any decommissioning relief agreements as at the end of that year, and the total amount of those payments: four payments have been made under any decommissioning relief agreement as at the end of the 2018-19 financial year, totalling £94.0 million.
Estimate of the maximum amount liable to be paid under any decommissioning relief agreements: the Government have not made any changes to the tax regime that would generate a liability to be paid under any decommissioning relief agreements. HM Treasury’s 2019-20 accounts will recognise a provision of £285.9 million in respect of decommissioning expenditure incurred as a result of a company defaulting on their decommissioning obligations[2]. The majority of this is expected to be realised over the next four years.
[1] This figure takes into account a revision made to a claim in 2017-18 that was reported in a previous written ministerial statement [HCWS1435].
[2] This figure takes into account payments made subsequent to the financial year covered by this written ministerial statement.
[HCWS189]
Oral Answers to Questions
Jesse Norman Excerpts(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Duncan Baker (North Norfolk) (Con)
The Financial Secretary to the Treasury (Jesse Norman)
A change to the taxation of online sales would require careful consideration, as my hon. Friend is aware. Many high street retailers are moving more of their business online, and we want to help them to manage that transition, without increasing the costs for them or their customers. The business rates review that we have announced will work closely with stakeholders to consider this issue in more detail. Meanwhile, as my hon. Friend will be aware, the Government have taken significant steps to support our high streets, including huge cuts to business rates and the £3.6 billion towns fund.
Duncan Baker
Clearly, we are living through unprecedented times, and I want to say thank you to all the Treasury team for the incredible work they are doing—working throughout the night—to help businesses up and down the country. Many sectors will be hugely impacted by coronavirus, not least my home of North Norfolk. We are now seeing shops being shut on the high street—quite rightly so—and I just want the Minister to consider that they will be hit enormously. When we come out of this pandemic, a 2% or 3% VAT-style tax rise to help high streets would be very well considered and welcome. Let us just remember that our last great leader was Margaret Thatcher, who said that we are a nation of shopkeepers—let us help them.
Mr Speaker
Order. I think the hon. Gentleman ought not to take advantage. We are just starting. I think he has got the message.
Jesse Norman
I speak for all my colleagues in saying how grateful I am to my hon. Friend for his kind regards and wishes. Of course, all taxes are taken into account and monitored by the Treasury, and will be subject to consideration at future fiscal events. We are living through very unusual times. I hope my hon. Friend understands that the high street, which was under pressure years before the current outbreak, is something we have supported over a period of time, most recently with a comprehensive package of support. He will be aware of the specific measures we have taken to support eligible retail, hospitality and leisure properties.
Jim Shannon (Strangford) (DUP)
I thank the Minister and the Department for all they are doing for businesses at this time; it is much appreciated. Will the Minister further outline whether he has managed to close the loophole that enables massive companies such as Amazon to operate out of the UK yet pay little tax here? If not, what has been done to ensure that no one is exempt from paying appropriate tax in the UK if they trade in the UK?
Jesse Norman
I thank the hon. Gentleman for that question. He will be aware that, in the Budget, we left in place our digital services tax, which is specifically designed to look at online marketplaces and other areas online that have user-generated content that needs to be appropriately taxed. We continue to pursue that tax.
Damien Moore (Southport) (Con)
Mr Philip Hollobone (Kettering) (Con)
The Financial Secretary to the Treasury (Jesse Norman)
We are providing cash grants of £10,000 to over 700,000 small and medium-sized businesses across England and grants of up to £25,000 per property for qualifying retail, hospitality and leisure businesses. We estimate that these combined measures will benefit up to 1 million businesses in England. Local authorities will deliver these grants over the coming weeks and consequently will have information about the number of firms that have benefited at a local level in due course.
Mr Hollobone
I declare my interest as a member of Kettering Borough Council. May I thank the Chancellor and the Treasury for coming forward at top speed with this business support package? May I also thank all the hard-working staff at Kettering Borough Council who will be delivering these grants to local businesses? Will the Minister send out the message to Kettering and the country that when the economy comes roaring back, once this pandemic is over, local authorities will have played a key role in ensuring that that happens?
Jesse Norman
I thank my hon. Friend for that wise comment. We very much share his views. Local authorities are crucial to delivery of a whole range of the support that we are now giving, and we will be very much acknowledging their role. We will also be supporting them, as he will know, through the business rates process and the hardship fund.
Andrew Lewer (Northampton South) (Con)
The Financial Secretary to the Treasury (Jesse Norman)
As my hon. Friend will know, Rent a Room relief has been a feature of the income tax system since 1992. In 2016, the Government raised the threshold to £7,500. That was designed to deliver the Government’s objective of supporting individuals’ living standards and freeing up space in the housing market. It also reduces and simplifies the tax administrative burden for those affected and has taken some taxpayers out of self-assessment entirely.
Andrew Lewer
Given that some 37% of homes in the country are under-occupied, my right hon. Friend will realise that encouraging more owners to take in lodgers could provide affordable housing to thousands more people. Will he please look to review whether there should be a higher level, perhaps £9,500, for live-in landlords with two or more lodgers, and would he be willing to have a virtual meeting with the Lodger Landlords Association at an appropriate time?
Jesse Norman
I am always delighted to meet my hon. Friend. In 2016, as I have mentioned, the Government raised the threshold. In 2018, the Government consulted on the scheme and there was consensus among the respondents that the relief provides an effective incentive for people to make spare rooms available for rent. Of course, I take his point and he has put it squarely on the record. As with all tax policy, we will look at this and other measures and keep them under review.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Jesse Norman
As the hon. Gentleman will be aware, we have specifically ruled out the possibility of eviction for three months, and we will continue to look at that situation as well.
Stuart Anderson (Wolverhampton South West) (Con)
Owen Thompson (Midlothian) (SNP)
The Financial Secretary to the Treasury (Jesse Norman)
Last Friday, the Government announced that they were deferring VAT payments for the next quarter, so that UK VAT-registered businesses will not need to pay any VAT, alongside their normal VAT returns, until the end of June. That deferral is worth more than £30 billion, or 1.5% of GDP. Her Majesty’s Revenue and Customs already offers help to businesses struggling to meet their VAT payments, with arrangements such as Time to Pay. In the light of the covid-19 outbreak, the Chancellor has outlined a range of measures to help businesses through the crisis, including grants, loans and relief from business rates worth more than £330 billion. The Treasury will continue to review this and make further announcements as events unfold.
Owen Thompson
Scottish National party Members welcome the actions that have been announced so far by the Chancellor to support the economy during this outbreak. Given the particular strain felt by sectors such as hospitality, will the Minister consider reducing the VAT rate they are charged, in addition to the deferrals already announced?
Jesse Norman
I thank the hon. Gentleman for his question. He will be aware that those businesses will fall under the VAT announcements that have already been made for the next quarter and that they are also already the beneficiaries of grants of £10,000 for the smallest businesses and of £25,000 for larger ones in the hospitality, leisure and retail sectors.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Financial Secretary to the Treasury (Jesse Norman)
I am very grateful to the hon. Lady for the suggestion, and we will certainly look closely at the Child Poverty Action Group’s recommendation.
Simon Baynes (Clwyd South) (Con)
Jesse Norman
We are certainly very happy to look at whatever letter the hon. Gentleman or his colleagues on a cross-party basis may wish to present.
Stuart Anderson (Wolverhampton South West) (Con)
I want to follow on from my right hon. and gallant Friend the Member for Bournemouth East (Mr Ellwood) and talk about our great armed forces. I expressed my delight at the budget of £10 million identified for veterans’ mental health. Will the Chancellor confirm that that will remain a priority, as the problem does not go away?
Contingencies Fund Bill
Jesse Norman ExcerptsTuesday 24th March 2020
(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 24 March 2020 - (24 Mar 2020)
The Financial Secretary to the Treasury (Jesse Norman)
I beg to move, That the Bill be now read a Second time.
As the House knows, we are living in unprecedented times. The Government have made it clear that they will do whatever it takes to mitigate and limit the effects of the covid-19 pandemic on the United Kingdom. To that end, we have a coherent, co-ordinated and comprehensive plan to support public services, equipping our doctors, nurses and other essential staff with the tools they require on the frontline in support of their work. It is a plan to protect businesses, jobs, wages and incomes through this difficult and uncertain period for the economy. At the heart of the Bill is a recognition that the Government must act swiftly and boldly to provide the resources necessary to limit, and ultimately defeat, the virus.
As the House knows, Parliament provides the Government with the authority to expend resources, capital and cash via the supply process. The process is begun with the publication of the main supply estimates, which we debate in this Chamber, and then the introduction of a supply and appropriation Bill. It is only once that Bill receives Royal Assent, usually in July, that Governments get the bulk of their resources, capital and, most importantly, cash to carry out their approved functions. Until the supply Bill passes, typically in July, Departments live on what is described as “vote on account” money. This money usually represents about 45% of the departmental spending on services from the previous year. It allows Departments to start spending from 1 April, and it normally provides sufficient funds to tide them over until the balance is delivered via the supply Act in July, as described. However, as events have been unfolding, it has become clear that additional departmental spending will be needed compared to last year, and for good reason. The scale and spread of the virus mean that we must act now to safeguard lives. The Government cannot afford to wait. No one in this House would want us to wait until July to deliver the resources that Departments need for the next financial year.
Sir Desmond Swayne (New Forest West) (Con)
The Bill is necessary because the economy has come to a halt; we have effectively halted it in order to put an end to this virus. There is a narrative that actually we could have toughed it out, and that we have sacrificed the economy for healthcare. That never really was a realistic alternative, was it?
Jesse Norman
The Government have not had any time for that narrative, nor has there been any decision in our mind other than to act as decisively, effectively and comprehensively as we can to defeat this virus and to protect livelihoods, businesses, jobs and wellbeing. That is what we are seeking to do. I do not agree—if I may say so to my right hon. Friend—that the requirements that this Bill seeks to address would or could have been accommodated in any other economic circumstances. To move at the speed at which we are moving to offer the support we are offering demands the cash movement that this Bill is designed to achieve.
Sir Edward Davey (Kingston and Surbiton) (LD)
Can the Minister confirm that the amounts that we are talking about in this Bill relate to departmental spending that may need to happen over the next few months, and that they do not relate to the balance sheet of the Bank of England or any of the lending facilities that have been made available to business?
Jesse Norman
The right hon. Gentleman is absolutely right. This legislation, as I will go on to describe, relates to departmental spending. It as an advance against departmental spending that will be properly ratified, accommodated and acknowledged within the estimates process, as one might expect.
Departments—this goes straight to point just made by the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—need money from 1 April, and they need more than the House has already allocated to them via the vote on account. The Government cannot afford to wait until July to deliver the resources needed for the next financial year, and the Bill seeks to close that gap.
The House has long recognised that the Government sometimes need to act without recourse to the normal processes, which is why Parliament has historically provided for the existence and use of a contingencies fund. But Parliament has wisely limited the amount that can be issued from the fund to 2% of the previous year’s cash spend. For 2020-21, that amounts to some £10.6 billion, which would be more than adequate in a normal year. But, as we have discovered, we do not live in normal times. These times are without precedent in the modern era. Through this Bill, the Government therefore ask the House temporarily to raise the limit on the amount that sits in the contingencies fund to 50% of that expended last year; I should be clear that that is approximately £266 billion.
Let me go further and say—again, this is a response to the point made by the right hon. Member for Kingston and Surbiton—that this is not new spending and it is not a blank cheque. All advances will have to be repaid once the main supply estimates are voted on in the summer, when the House will have the opportunity to scrutinise and debate where the resources have been allocated in the normal way. Nor does this represent additional Government borrowing. The Chancellor has said that he will update the Debt Management Office’s financing remit in April to reflect his recent announcements.
Quite simply, this Bill is about cash flow and the need to deliver the support we have announced without delay. It allows the Treasury to provide cash advances where they are urgently needed, and it provides for a safety net between supply estimates. This is an exceptionally short Bill, but it is an exceptionally important one in that it allows the Government to deliver the extraordinary package of support announced by my right hon. Friend the Chancellor. It solves a cash timing issue arising from the current process, and balances the need for an urgent response to the unfolding crisis with the necessary parliamentary scrutiny and oversight.
This Bill is yet another demonstration of the Government’s commitment to fighting the threat from covid-19—protecting businesses, jobs and, most importantly, our fellow citizens, from the ravages of this deadly disease. I wholeheartedly commend it to the House.
Jesse Norman
With the leave of the House, I will speak again. I am grateful to all Members who contributed to what, as the hon. Member for Oxford East (Anneliese Dodds) said, was a very wide-ranging debate. In fact, it was so wide-ranging that it barely focused on the measure before the House. However, I commend those who discussed the Bill. It is a very important piece of legislation, and—let me say this very straightforwardly—I am very grateful for the expressions of cross-party support from the Opposition parties. That has been crucial to the way the Government have thought about and framed our response to this crisis.
The Bill is another key element in shoring up the very wide package of measures to fight the covid-19 outbreak and, as the House has recognised, it represents a proportionate legislative response to recent events. Of course, it is proportionate in part because it will last only for one year; it is not designed to run longer than that.
I will start with the comments by the right hon. Member for Kingston and Surbiton (Sir Edward Davey), because he addressed the topic of the Bill; I am grateful to him for that. He made a series of important points. On whether the banks are really stepping up, as the hon. Member for City of Chester (Christian Matheson) said, we will know by the end of the process who have been villains and who have been heroes. I do not think the public will be shy in reaching conclusions of their own, and I am sure there will be plenty of quantitative bases for that when the moment comes.
The right hon. Member for Kingston and Surbiton asked why the number we will vote through today has been raised to 50% from 2%. That is a very important question. The reason is an anticipated escalation in the need for cash under—this point was made widely by colleagues across the House—conditions of radical uncertainty. It is also fair to say that it is not clear beyond any peradventure when the House will reconvene, and we have to accommodate the possibility of a delayed restart. As one might imagine, no assumption is made, but that possibility has to be contemplated.
The right hon. Gentleman also asked whether this constitutes an increase in spending. This is not a spending matter; it is a cash matter, and he needs to be aware of that. To reassure him on the question of local authorities, this does include spending that the Ministry of Housing, Communities and Local Government will make as part of the usual estimates process.
The right hon. Gentleman described his work examining processes for reviewing and considering Budgets, but this is not a Budget, so it does not fall under that. However, it is worth saying that we have an evolved system. It is a system that involves a lot of scrutiny— repeated days of looking at main estimates and supplementary estimates—but of course it is also a system that gives considerable authority to the majority party at any given time, and that is what constrains the ultimate outcome.
Sir Edward Davey
I hope the Minister is right on the banks, but my main point is about the estimates. Actually, we have only three days to debate the estimates. I have attended estimates debates in this House over the last 20 years; when we have estimates days, we never debate the estimates. That is my point.
Jesse Norman
That is a different point. My point is that Parliament has plenty of opportunity to scrutinise spending. If it does not do that, that is a choice that it makes.
The right hon. Gentleman’s final point was about whether this Government believe, or any Conservative Government have ever believed, that markets can do it all. Let me assure him that no Conservative Government have ever believed that, and this one certainly do not believe that. At the risk of invoking one of my great heroes, Adam Smith, the position is that commercial society is a dynamic evolution in which forms of property are supported and recognised in law and then used to become the basis of profitable market development. That is how our system has evolved over many decades, and the state is integral to that process for all the reasons the right hon. Gentleman has described, so this is a way of agreeing with him.
May I turn to the comments made by the right hon. Member for Hayes and Harlington (John McDonnell)? Again, I thank him for his support for the Bill, and I think that constructive attitude is important. He is right to call this the gravest crisis we have known, certainly for this generation. A strong theme in his speech and those of others was the need for more communications; it was also mentioned by the hon. Member for Sefton Central (Bill Esterson). Of course, we understand that on the Government Benches. During the debate, the House will be pleased to know, I got a text from gov.uk referring me to the coronavirus website. That is a direct intervention of a kind I am not sure I would approve of outside the context of a national crisis, but one that is very welcome in that context. It shows evidence of and bears testimony to the belief we have in this very important response and in the need for communications.
Bill Esterson
I am very grateful to the Financial Secretary for highlighting the issue that my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and I raised about communication. The point about the gov.uk website is that not everybody knows about it, and a further point is that not everybody has access to the internet, particularly some of those most at need—older and more disadvantaged people—and that is where some of the other routes for getting information out there are so important.
Jesse Norman
I thank the hon. Member for that point, and he is absolutely right. One role that every Member of this House can have is to spread the word among constituents to make sure that this is widely understood.
The right hon. Member for Hayes and Harlington talked about the importance of consulting the trade unions. He will know that there have been consultations with Frances O’Grady and other trade union leaders, as well as with the Mayor of London, to try to build public understanding and a shared view of these issues.
A final point I would make about what the right hon. Gentleman described is that we have had statements on the Government’s response, two urgent questions, an Opposition day—we have one tomorrow—and two pieces of legislation in the last two days alone, so there has been every opportunity for parties across the House to question and interrogate us. As colleagues have been kind enough to point out, the Government have been working at tremendous pace, with every hour of the day being exploited for the purposes of trying to get the right outcome, and where we have imperfection, as it were, we will try to make this as good as we can over the next days and weeks.
Let me, if I may, move on to my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami). He asked what extra the Treasury will be borrowing as a result of this, and the answer is that this is a cash item, as he will recall. The debt management remit will follow, and we will set out the Government’s borrowing plans. He raised an interesting question about whether money spent in response to this crisis could be itemised differently in the national accounts. That is an interesting idea, and I thank him for it. He highlighted the impact of tech start-ups, and he is absolutely right.
I thank the hon. Member for Gordon (Richard Thomson) for supporting the Bill. I think he is absolutely right to talk about the need for business recovery. We do not share his excitement about a universal basic income, in part because it does not actually hug the need across the population as well as a well-functioning benefit system, and that is what we have tried to do. It is a live argument on both sides. Of course, there are parts of the spectrum, notably those on the state pension, where we have something close to a universal income already in place, although not necessarily at the level that people would have expected.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) persuasively and interestingly illustrated the choices faced by Government and businesses through his own business, and I thank him for that. My understanding of the personal guarantee issue touched on by many is that the circumstances for the business loans are to be agreed between the lender and the individual. There might be some element of personal guarantee, but not as relates to the primary residence. The desire is to build the flexibility and potential availability that comes with that, but without compromising people’s ultimate wellbeing.
I thank my hon. Friend the Member for St Ives (Derek Thomas) for his comments. Through his speech today and in his remarks in Treasury questions, he has registered his intense concern on this issue, and I thank him very much for that.
Let me wind up by saying that this is a proportionate legislative response to the crisis and that it seeks to close an important gap in cash flow in the estimates process. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).
Further proceedings on the Bill stood postponed (Order, this day).
Contingencies Fund Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Contingencies Fund Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums to be issued out of, or paid into, the Consolidated Fund which is attributable to increasing, in relation to any time before 1 April 2021, the percentage specified in section 1(1) of the Contingencies Fund Act 1974 to a percentage not exceeding 50%.—(Eddie Hughes.)
Question agreed to.
Loan Charge 2019: Sir Amyas Morse Review
Jesse Norman Excerpts(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Jesse Norman)
I congratulate my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for New Forest East (Dr Lewis) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate today, and I thank colleagues on both sides of the House for their contributions. It is a measure of the effect they perceive on their constituents that, in these circumstances, they are here in such numbers.
The outbreak of covid-19 has created extraordinary circumstances, and it is important to say up front that the Government are keeping the situation under close review, as elsewhere, and will take a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September. That date has been moved back to give people enough time to respond to the Morse report and its recommendations, but the Government will insist that HMRC takes a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September.
Anyone who believes they may be affected by this should please contact HMRC as soon as possible. Equally, we must recognise that HMRC’s workforce may well be affected by the outbreak. Where appropriate, HMRC has made it clear that it will take steps to support anyone who has been disadvantaged by delays at its end as a result of covid-19. As the House will know, HMRC has already established a helpline to support any businesses and individuals affected. The hon. Member for Bootle (Peter Dowd) raised that issue, and I can confirm the helpline has now been in place for some time and has an expert and supportive staff behind it.
As this debate has made clear, the loan charge, and with it the wider issue of using disguised remuneration schemes to avoid tax, has been the subject of public concern and considerable controversy. Let us be clear that tax is never popular, and my colleagues and I recognise the strength of feeling and sympathise with those who may be subject to the charge. Today’s motion reflects some of the arguments and concerns expressed by colleagues that the loan charge is retrospective and unjust and that the law was not settled, it is claimed, until 2017. If I may, I will deal with each of those charges in turn.
First, however, we need to be clear what we are talking about. Disguised remuneration is a term of art—it is a fancy term—but the House should be under no illusion as to what it amounts to. Such schemes are a form of contrived tax avoidance in which people are paid in the form of a loan with no interest and no intention or requirement to pay the loan back.
Jesse Norman
I thank my right hon. Friend for the question. All he needs to do is attend to the detail of the Morse report, in which Sir Amyas Morse goes through the efforts made at that time, before and after 2010, in some detail. That is the basis for the judgment that he reaches about the appropriate relief.
Chris Stephens
The Morse review also suggests that the main people responsible were the creators of such schemes, who do not seem to be getting chased up to the same extent as those who appear to be the victims of the schemes.
Jesse Norman
I take it that the hon Gentleman rightly refers to the enablers and promoters of such schemes. As he knows, I take that extremely seriously, and I have insisted on that point ever since I became Financial Secretary. I will say more about that shortly.
I return to the point that such schemes were contrived tax avoidance schemes that were typically run through an offshore vehicle. A person would receive a monthly amount of pay, often deliberately set at or around the level of the personal allowance to maximise the tax avoided, and above the national insurance lower earnings limit, so as to qualify the person concerned for the national insurance contributions required to receive a state pension. Of course, that did not reflect the person in question’s true earnings because, alongside that payment, they would receive a further top-up payment described as a loan. In many cases, the top-up payment far exceeded—often by a large multiple—the salary element declared for tax purposes.
Those facts are not genuinely in doubt, and all Members who have taken part in the debate have rightly condemned tax avoidance, but I put them on the record again because they highlight how contrived that form of tax avoidance typically was. They also go to the root of the problem.
My right hon. Friend the Member for Haltemprice and Howden raised the issue of thesauruses and dictionary definitions. Let me remind him of the difference between a dictionary definition and a thesaurus. A thesaurus gives an alternate word of supposedly the same meaning. A dictionary definition tries to explain exactly what it is that is being talked about.
The dictionary definition of a real loan is,
“an amount of money that is borrowed…and has to be paid back”.
That accords with our natural experience, as hon. Members will discover if they try to take out a business loan from a bank and not pay it back. If they try to take out a mortgage and not pay it back, they will find the same to be true.
Those loans, however, were not designed to be paid back. They were rather different from loans that might be made to employees that then get written off, on which tax is typically chargeable. They were not designed to be paid back. They were employment income in disguise, so they were subject to tax.
Sir Edward Davey
Will the Minister set out which piece of legislation, before the loan charge legislation, saw loans as income?
Jesse Norman
I am not in a position to take the right hon. Gentleman through the legal arguments, and I do not need to, because, as I have said, they have been described in detail by Sir Amyas Morse in his review which, of course, is based, as my remarks would not be, on a detailed interrogation with tax experts on all the specific issues behind it. I do not think we have any sensible reason—no one has in fact offered one—for disagreeing at length or in any detail with his conclusion.
Christian Matheson
The Minister knows that I have all the time in the world for him, but nobody in this House disputes the fact that it was tax avoidance and that loopholes needed to be closed. He is spending his time explaining why they were avoidance schemes, but hon. Members understand that. It is the question of retrospection and unfairness that is exercising us in this debate.
Jesse Norman
I am very grateful to the hon. Gentleman, but if I may say so, I do not think that has been true. I think the conclusion colleagues have been pushing in this debate is that they disapprove thoroughly of tax avoidance, and their view is that this is not tax avoidance in many cases. If they accept that this is tax avoidance and that the issue is merely as to the remedy, that is of course a slightly different position, and one that I am happy to respond to.
I just want to make it clear that this is a form of tax avoidance. It goes to the wider issue as to whether people should have known what it was. The point is that it is tax avoidance, and it costs the Exchequer hundreds of millions of pounds a year. That has two effects: it deprives public services of the money they need to operate; and it forces other taxpayers to pay more to make up the shortfall.
The purpose of the loan charge was to combat this form of abusive tax avoidance. The loan charge was introduced as a new measure in 2017. Following a public campaign last year, we asked Sir Amyas Morse, as has been noted, to conduct a review of whether it was an appropriate policy response to the use of the disguised remuneration scheme. He had full control of the review’s management and recommendations. He took evidence from a very wide range of individuals affected, and he spoke to interest groups, MPs, tax specialists and many other stakeholders.
Again, the facts are not in doubt. Sir Amyas Morse, as has been recognised by colleagues today, is an individual of huge experience and great independence of mind, and he is widely respected across the House. He was independent in his review, and he was given wide scope in expert support. He produced a thorough and exacting piece of work—a 76-page, 30,000-word report—that drew on over 700 individual testimonies and impact statements, and which painstakingly worked through the issues before recommending notable changes to the policy, including substantial carve-outs as to who was affected. Sir Amyas was clinical and at times unsparing in his criticisms, including of Her Majesty’s Revenue and Customs and, be it said, of the Loan Charge Action Group. All but one of these recommendations were accepted by the Government.
Among those recommendations were two to which I want to draw the House’s particular attention. The first is Sir Amyas’s insistence, as we have heard across the House today, on the need for the Government to go further in going after and bringing to justice people who enable or promote tax avoidance schemes. I am therefore delighted that, as part of the Budget documentation we have produced today, we have published a policy document on “Tackling promoters of mass-marketed tax avoidance schemes”, and I draw the attention of all colleagues to it. It is a sober and thorough piece of work that looks at lots of different approaches as part of an integrated strategy.
The other thing that Sir Amyas pointed to—again, I think rightly, but also picking up on a widely anticipated and understood gap—is the importance of raising standards in the tax advice market. Again, I am pleased to say that, as part of the Budget documentation, we have published a call for evidence on this very topic, “Raising standards in the tax advice market”. I encourage all colleagues and their constituents to contribute to that approach.
Ruth Cadbury
I thank the right hon. Member for the points he is making about advice and information. However, I again come back to the fact that the low-paid and the averagely-paid—generally public sector workers—are still being sold these schemes. They cannot be paid through a personal services company, but they need to work freelance and locum, and this is still happening to them. If the Government see these schemes as contrived, why are they not doing more to stop the mass marketing of them, such as by making the promoters personally liable for defeated schemes and similar?
Jesse Norman
I have in my hand a detailed document designed to address this very issue. It goes through a whole range of different approaches and integrates them into a strategy. I would be delighted to have any input that she would like to make about other ways in which that can be improved and developed. We work on the basis of the law as it presently stands, and which we have inherited. It is itself the result of previous Parliaments, including of course the parliamentary consideration of the loan charge. We have to work with the hand we have got, and improve it as fast and as comprehensively as we can.
I will now address the motion directly and then, in the limited time I have, turn to the comments that have been made. Is the loan charge retrospective? Again, I think it is clear that it is not. It was introduced as a new measure in 2017. It taxes a loan outstanding at a future date. It does not change any law previously on the statute book.
It has been asked why the loan charge was introduced. In the words of Sir Amyas Morse, it
“offers an expedited means of collecting tax that is due”.
Is the loan charge unjust? Again, I would suggest not. If one asks the average man or woman in this country, I think they would say, “Everyone should pay their fair share of taxes. People are responsible for their own tax affairs. Real loans get repaid; if someone offered you a loan for which no repayment, no tax and no interest was due, it would probably be too good to be true.” And so it is.
The numbers seem to bear that out. More than 99.8% of the tax-paying population have never used a scheme. Even among the freelance population, the take-up has been only 2.5%. It is notable that Sir Amyas Morse was clear that he supported the essential purpose of the loan charge and that it should remain in force.
We have heard a lot about how the law was not settled in 2017. Again, as I said, I can do no better than refer colleagues to section A of the Morse review, which carefully reconstructs the history of the past 20 years of disguised remuneration.
Let me quickly turn to the many excellent contributions that have been made. I will start with the excellent contribution made as a point of order by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), who pointed out the excellence of my book on Adam Smith—I thank him for that, although I defer to the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), as Kirkcaldy was, of course, Smith’s home town. My right hon. Friend the Member for New Forest West will recall—he taught economics so he must know about these things—that Smith not only set out the ideals of a well-functioning tax system, which we all aspire to achieve, but was, for the last 12 years of his life, a practising commissioner of customs, attempting to wrestle with an ever-evolving customs market and seeking to extract duty and tax due, and rightly so.
I would like to touch on the statesmanlike comments of the hon. Member for Bootle, the shadow Chief Secretary, which perhaps reflected his imminent expectation of taking my seat on this side of the aisle. He recognised that what people do not pay in tax due, someone else must. He is right about that. He noticed that if it looks too good to be true, it probably is. He is right to focus, as others have, on the enablers and promoters.
Jesse Norman
I have half a minute left. The right hon. Gentleman has only just arrived, so it is a little impertinent to raise a question at this point.
It is important that we focus on the centrality of the claim. Sir Amyas Morse has looked at it, and he has attempted to find a Jupiterian way through complicated tax issues and to deal, with equity, with the different interests and parties involved. I think he has succeeded, which is why the Government, comprehensively, with one exception, have accepted his conclusions.
Mr David Davis
These occasions often show the House at its best, and that is certainly true today.
I start by paying tribute to the Loan Charge Action Group, the all-party group—particularly its chairman—and all who have contributed in the debate, which has been excellent, albeit slightly one way in terms of its emphasis. Why is that? Because this is a matter of justice, not technicalities. It is a story of unclear law not very competently clarified in 2011 and then rewritten in 2017. It is a story of HMRC allowing the real villains—the employers and advisers who forced people into this position—to carry on getting away with that, and of HMRC failing to intervene during that period to stop them.
I am afraid the Morse review is wrong. That was brilliantly exposed by the chairman of the all-party group. There is, in truth, only one answer, but before I come to it, I have 40 seconds, so I will say one other thing to those on the Treasury Bench and the Opposition Front Bench. All of us in this House believe in fair taxation. We all believe that we should pay our dues. When you are doing deals with Vodafone and Google, where they pay from 10% down to 4%, do not turn round to an ordinary locum nurse and say, “It’s too good to be true. You should have known.”
Mr Davis
No, I will not. I only have seconds.
There is only one answer in this debate. I am afraid that Amyas Morse is wrong. The answer is laid out in our motion. HMRC should cease action on all cases before July 2017, and then justice will be done.
Question put and agreed to.
Resolved,
That this House believes that the Loan Charge is an unjust and retrospective tax; notes that the law on the Loan Charge was not settled until 2017; and calls on HMRC to cease action on loans paid before 2017.