Additional Covid-19 Restrictions: Fair Economic Support

Jesse Norman Excerpts

Wednesday 21st October 2020 Commons Chamber

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

We have had a lively, passionate and—what should I say?—vigorous debate across the House. We have heard a wide range of arguments and a considerable amount of passion. It is clear, however, that when we cut through the air being discharged on either side of the Chamber, there is a commonality of values across the House. In fact, the House is united on the most fundamental issues that we face, which are the need to combat this terrible covid-19 virus; the need to protect public health; the need to make every effort to prevent economic harm to our businesses, jobs and people; and the need to protect the fabric of our society. We all share those ambitions.

To do that, we need to do achieve a balance, as the Chancellor discussed last week. In the words of the deputy chief medical officer last night, we are trying to walk “a very fine line” between getting the virus under control in areas where it is surging and incurring minimal damage to the daily lives and livelihoods of people across the country. It was noticeable that the deputy chief medical officer also made it explicit that he did not support a national lockdown, that he backed a local approach and that it would not be appropriate to impose the strictest restrictions across the country. I thought that was an important and telling point from an independent adviser.

For the same reasons, it is clear that no Government, in any normal circumstances, would wish to impose the restrictions that we are discussing today. I can only express my thanks and recognition to the people of Liverpool, Lancashire, Greater Manchester and South Yorkshire for the fortitude that they have demonstrated, are demonstrating and will demonstrate.

The evidence shows that the most successful countries in combating covid-19 are those that have adopted localised measures to protect their populations. That is why we launched the three covid alert levels for England based on the prevalence of the virus in those areas. Although it is vital that we take decisive action to control the virus where it is surging, as we did yesterday in Manchester, we must also recognise that covid-19 is spreading in different ways and at different speeds across the country.

Covid-19 is a virus that we do not fully understand in epidemiological terms, or indeed in medical terms, but we know enough to say that the epidemiological evidence simply does not justify introducing a national circuit breaker. The costs of such an approach would be absolutely huge.

I vigorously support the point made by my hon. Friend the Member for Clwyd South (Simon Baynes), who said that there were weaknesses in the Welsh Government’s decision to impose a circuit breaker because it would put tremendous strain on areas where there had been no great upsurge in the virus. That point was also made by the former Secretary of State for Wales, my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns). It falls in fact into the category of being unnecessarily damaging to the economic fabric of our country.

The idea that the Welsh Government have done that, as my hon. Friend the Member for Clwyd South put it, without adequate scrutiny, is a sharp contrast to here where the Opposition have been vigorous in holding the Government to account, and rightly so. Having said that, it is important to say, as my right hon. Friend the Chancellor said last week, that these are not virtual costs: every day that a national lockdown was in place would bring very real costs in jobs lost, businesses closed and children’s education harmed. The costs can be measured and weighed in permanent damage to the economy, which in turn undermines our ability to fund our public services.

Let me briefly remind the House of what we are doing to support, in a broad, deep and consistent way, areas that face higher restrictions. We are helping businesses with fixed costs such as rents and bills through a new business grant scheme. We are supporting local authorities in tier 2 or 3 with significant new funding. We have introduced a national funding formula of £1 per head in tier 1 areas with a high incidence, going up to £3 and £8. Of course, that is just a covid-outbreak-combat measure —it is dedicated to a small part of a much wider pattern of programmes of support totalling, as the House will know, more than £200 billion in total. To give the House a sense of scale, that means that areas in high or very high alert are receiving, or will receive, up to half a billion pounds just focused on public health activities to do with combating the virus, such as local enforcement and contact tracing. That comes on top of the £6 billion that we have already provided to local authorities since the start of the crisis.

The third element is extra support for local authorities in tier 3—

[Mr Betts]

Will the Minister give way?

[Jesse Norman]

I would but I have been given so little time and have so much material to get through. I hope the hon. Gentleman does not mind if I press on.

As the House will know, we have provided one-off grants to Lancashire and Liverpool and will continue to do so for other authorities. Finally, we are expanding the job support scheme: businesses that have been legally required to close, whether in tier 3 areas or elsewhere, will be able to claim a direct wage subsidy.

Let me say a couple of things on the issue more widely before I finish. The hon. Member for Oxford East (Anneliese Dodds) quite rightly said at the outset of this pandemic that it would be, in her words, “completely inappropriate” to engage in party politics on these desperately important issues of human life and human wellbeing. The hon. Member for Ashton-under-Lyne (Angela Rayner) said that we should not be having “political games”. I am afraid that an awful lot of what we have seen in the past 48 hours has been political games and party politics. It is a terrible, terrible shame.

Love Manchester though I do, I am afraid there is no reason why it should be treated as a special case and any differently from any other part of the country. Every country faces the potential of being struck down by covid and every part of this country should be supported in a proper way that is consistent across the piece. When the Mayor of Birmingham says, by contrast, that he will not put lives at risk, we have to recognise the sincerity and importance of his view.

Let me pick up a couple of other points that have been made. The hon. Member for Salford and Eccles (Rebecca Long Bailey) spoke of Abraham Lincoln; she may also remember that Lincoln said that the gentleman he spoke of compressed the smallest amount of thought into the largest number of words. I am afraid we have seen a bit of that today.

The hon. Member for Birmingham, Ladywood (Shabana Mahmood) called for rationality and a truly national strategy; that is exactly what we are offering. That is what the Government are giving to her.

My hon. Friend the Member for Warrington South (Andy Carter) was absolutely right to highlight the danger of theatrics and the importance of our not making this a north-south issue. It is absolutely not that. This is an issue in respect of which we are all desperately concerned to do the same thing: to protect people’s livelihoods, to protect their health and to protect the fabric of our economy and our society. What is the Labour alternative? A national firebreak? A circuit break? We should do everything that we possibly can to avoid that because of the unfairness of striking down areas that do not have high virus levels and suppressing their businesses. We all recognise the economic costs associated with that.

I do not think it is consistent with the Labour party’s commitment to avoid party politics to have descriptions from the Opposition Benches of, in one phrase, “screwing people over” heard in this Chamber, or, indeed, to hear references to a Member of this Chamber as scum from the Labour Front Bench.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Oral Answers to Questions

Jesse Norman Excerpts

Tuesday 20th October 2020 Commons Chamber

[Mary Robinson (Cheadle) (Con)]

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

[Mary Robinson]

[Jesse Norman]

[Stephen Timms (East Ham) (Lab)]

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[Douglas Chapman (Dunfermline and West Fife) (SNP)]

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

[Allan Dorans [V]]

[Jesse Norman]

[Douglas Chapman [V]]

[Jesse Norman]

[Mr Speaker]

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

[Jesse Norman]

[Kate Osamor (Edmonton) (Lab/Co-op)]

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[Taiwo Owatemi (Coventry North West) (Lab)]

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

[Andrew Lewer]

[Jesse Norman]

[Chris Elmore]

[Jesse Norman]

[John Lamont]

[Jesse Norman]

[Taiwo Owatemi]

[Jesse Norman]

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

[Jesse Norman]

[Zarah Sultana (Coventry South) (Lab)]

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[Harriett Baldwin (West Worcestershire) (Con)]

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

[Mark Logan]

[Jesse Norman]

[Mr Speaker]

[Harriett Baldwin]

[Jesse Norman]

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

--- Later in debate ---

[Carol Monaghan (Glasgow North West) (SNP)]

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

[Christian Wakeford (Bury South) (Con)]

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[Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]]

[Jesse Norman]

[Lee Anderson (Ashfield) (Con)]

Contingencies Fund Advance: Covid-19

Jesse Norman Excerpts

Monday 28th September 2020 Written Statements

[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 covid-19 pandemic in 2020-21



Parliamentary approval for additional resources of £100,000,000 for this new expenditure will be sought in a supplementary estimate for HM Revenue and Customs. Pending that approval, urgent expenditure estimated at £100,000,000 will be met by repayable cash advances from the Contingencies Fund.



In line with the OBR forecasts, further requests to the Contingencies Fund may be made as necessary to fund covid-19 activity delivered by Her Majesty’s Revenue and Customs.

[HCWS471]

Coronavirus Job Retention Scheme

Jesse Norman Excerpts

Thursday 17th September 2020 Commons Chamber

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

I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on introducing the motion and I thank the Backbench Business Committee for granting the debate. I thank other hon. Members for their contributions to an energetic, well-attended, engaged and interesting debate. As the hon. Lady will know—as we are all aware—we in this House continue to face an enormous challenge.

As has been widely recognised across the Chamber, since March, the Government have acted with great determination to protect people’s livelihoods. Indeed, I think it is recognised that our response has been one of the most comprehensive and generous anywhere in the world. The Office for Budget Responsibility and the Bank of England agree that the Government’s actions in the face of the pandemic have helped to safeguard millions of jobs and businesses.

The job retention scheme—the furlough scheme, as it has been described—has been central to that response. I will talk a little about that and then come on to some of the very interesting points made by colleagues from across the House. As the House will be aware, the furlough scheme was designed and implemented at extraordinary speed, and launched on 20 April, just a month after its announcement. Its purpose has been to help those who would otherwise have been made unemployed and to support businesses as quickly as we could. I do not think that anyone has questioned its success, as I have mentioned. According to the latest figures available, the CJRS has helped 1.2 million employers across the UK to furlough 9.6 million jobs, at a value of some £35.4 billion.

The hon. Member for Ilford North (Wes Streeting) will not often hear me say this, but how right he was to describe this as one of the Government’s most effective schemes. It is a hotly contested area, and there are many schemes that he could have chosen, but I think I heard him say—I wait to be corrected—that this was one of the most effective. He is absolutely right about that: it was, and it is. Detailed figures show that, up to 30 June, the CJRS had supported nearly 800,000 jobs furloughed in Scotland, more than 400,000 in Wales and almost 250,000 in Northern Ireland. The hon. Member for North Ayrshire and Arran was right to say that it would be churlish not to recognise the CJRS as a laudable scheme. It has had an enormous impact on every single constituency represented in this Chamber.

Opposition Members have pointed to other countries that they would like the furlough scheme to emulate. Of course, they are welcome to do that. They might, for example, want us to contribute at the same wage rate as in Spain, but in fact our furlough scheme does more than that. They might want us to support the same range of businesses as the furlough scheme in New Zealand does, but in fact we are supporting a much wider range of businesses. They might want our scheme to run for as long as that originally proposed in Denmark, but in fact our scheme runs for twice as long. In a majority of sectors in France, which has been mentioned on several occasions, businesses have had to make an employer contribution of 40%, which is significantly higher than in the UK. Why should we imitate that scheme? Why should we have a 40% contribution rate? I think that would be wrong.

At its conclusion in October, the furlough scheme will have been open for eight months from start to finish. Of course, it is understandable in that context that Opposition Members should be calling for an extension, but the Government’s view is that it is in nobody’s interests for the scheme to continue forever—I am not suggesting that that has been widely promoted as a policy option by Opposition Members—and, if it does not, it has to be brought to an end at some point. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) mentioned that it was important to do that on the basis of analysis. Let me reassure him that no one does more analysis than the Treasury does. We look at these issues every which way. We draw on an extremely wide spread of data sources across a number of different areas of behaviour, in both the consumer sector and the wider productive economy. Our view, which has been expressed separately and independently by Andy Haldane, who has been mentioned in this debate, is that it would be irresponsible to trap people in jobs that can exist only because of Government subsidy.

My hon. Friend the Member for Sevenoaks (Laura Trott) was absolutely right to point to the importance of energising the possibilities for new work, new opportunities and new scope in the labour market, particularly for women. However, the onus must be on us to provide fresh work opportunities for those who need them across the UK, and the Government have been doing just that through the Chancellor’s plan for jobs.

As the House will know, we are thoroughly committed to the responsible management of the public finances, in part because no one can say how long this pandemic will last for. As has been recognised by none other than the OECD, the work of the last 10 years has given us relatively strong public finances, which we have achieved by bringing borrowing and public debt under control. That is what we are needing to draw on in tackling the challenges posed by covid-19. With Government debt now exceeding the size of UK economy for the first time in more than 50 years, we must continue to balance the needs of the present moment with the need to maintain the country on a sustainable financial footing.

[Stuart C. McDonald]

The Minister will have heard a couple of folk refer to analysis that shows that by extending the scheme for eight months, debt as a percentage of GDP will fall rather than rise because of the positive impact that it would have on growth and total GDP.

[Jesse Norman]

I have not seen the National Institute of Economic and Social Research analysis that the hon. Gentleman talks about, which is somewhat embarrassing, since I am a governor of the national institute—I shall ask it to forward that to me. I am pleased to say that it is independent of its governors and rightly so. I will certainly look at that.

The point I would make is that although the scheme as such is winding down, Government support is very much not. It continues across a very wide range of packages and includes, as colleagues rightly mentioned, the bonus. I think that that is much underestimated by colleagues—it is a very important element. That guarantees a one-off payment of £1,000 to employers for each furloughed employee they bring back to do meaningful work and earn an average of £520 a month between November and January, and who continues to be employed by the same employer as at 31 January 2021.

[Wes Streeting]

Will the Minister give way?

[Jesse Norman]

I have very little time—if the hon. Member does not mind, I will proceed. That bonus is an important aspect because it provides a marginal benefit to a very large group of relatively low-paid employees. Of course, we have also launched the kickstart scheme.

Let me pick up a couple of points that have been raised. The hon. Member for North Ayrshire and Arran said that it is very important for Scotland to have powers of its own in this context. I echo again—I am becoming like a broken record—the hon. Member for Ilford North who said that the Scottish Government are good at passing the buck and bad at taking responsibility. The Scottish Government House has tax-raising powers devolved through the Silk commission. Let it use those. At the moment, the vast majority of money spent in Scotland and in Wales is spent by and raised through local government—regional government—but raised through UK Government, and that is crucial.

My hon. Friend the Member for Warrington South (Andy Carter) rightly pointed out that the Chancellor has included many flexibilities in the design of the furlough scheme, and it is important to recognise that it has evolved over time. It has not been a fixed thing. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) rightly pointed out that the unemployment drop had been much less in the UK than elsewhere and that there had been a rapid fall in furloughing. He pointed to the tapering out that that implied and he is right about that.

The hon. Member for Richmond Park (Sarah Olney) was right to raise the point about the need for green jobs. The Government absolutely share that view, and that is one of the things that successive policies have focused on. I have no doubt that it will be an important part of the consideration in the net-zero review and all the other measures that are presently in place.

Quickly, on the issue of fraud—if I may for a second before winding up, Mr Deputy Speaker—it is much misunderstood; the planning assumptions that were outlined in the evidence from the CEO of HMRC are just planning assumptions, and we wait to see what the final numbers will be after enforcement. He has said in terms that he does not rule out penalties and potentially criminal procedures to bring that back under control—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I am sorry, Minister—

[Jesse Norman]

And with that, let me sit down.

[Mr Deputy Speaker]

Thank you.

Oral Answers to Questions

Jesse Norman Excerpts

Tuesday 15th September 2020 Commons Chamber

[Dr Jamie Wallis (Bridgend) (Con)]

What assessment he has made of the effectiveness of the eat out to help out scheme in supporting the hospitality industry.

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

By 31 August, over 84,000 UK businesses had registered for the eat out to help out scheme and more than 100 million meals had been claimed for. By getting people back into the habit of enjoying a meal out, the scheme has helped to support nearly 2 million jobs in the hospitality sector and has played an important part in the Chancellor’s wider plan for jobs.

[Joy Morrissey]

My right hon. Friend’s eat out to help out scheme was also hugely successful in Beaconsfield, where 88,000 discounted meals were enjoyed. I cannot say what percentage of those meals were enjoyed by me personally, but one can wager. What reassurances can my right hon. Friend provide to the House that he will continue to support the hospitality industry through reductions in VAT on food and attractions until next January?

[Jesse Norman]

I am delighted that the eat out to help out scheme has been so enthusiastically taken up in Beaconsfield, as it has been around the country, and I thank my hon. Friend for her personal service in this important area. She will know that the Chancellor’s plan for jobs and support for over 150,000 businesses and the effort to protect 2.4 million jobs are all part of a package. To them, of course, as she will know, the Government have also added a reduced rate of VAT for tourist attractions, which will run through to 12 January next year. It all fits together as part of a wider picture of support for these very important sectors of the economy.

[Steve Double]

In St Austell and Newquay, almost 250,000 meals were eaten—not all by me—as part of the eat out to help out scheme, which put around £1.3 million into our local economy, so on behalf of businesses in mid-Cornwall, I thank the Chancellor for his support. August has been incredibly busy in Cornwall, but the hospitality sector faces a big challenge as we head into winter. Will my right hon. Friend consider a similar scheme to be run in the winter to help as many businesses as possible survive the winter and be here next summer?

[Jesse Norman]

There is a danger of a bidding contest between colleagues over the number of meals eaten under the eat out to help out scheme. I would dissuade them from that. In answer to my hon. Friend’s question, however, I would say that there is this wider package. Of course the Treasury keeps all its measures under review, but it is a pretty formidable combination of VAT reductions, business rates relief and billions in tax deferrals and loans.

[Karl MᶜCartney [V]]

Given the great success of the eat out to help out scheme in Lincoln and Lincolnshire and across the country, which has led to higher spending in restaurants, will my right hon. Friend now consider further targeted support for struggling industries, such as the arts and tourism, which are drivers of the Lincoln and county economy of my constituency, not least the excellent Usher Gallery and under-pressure Drill Hall in Lincoln?

[Jesse Norman]

I am delighted that my hon. Friend has highlighted the great work of the Usher Gallery and the Drill Hall. As he will be aware, the Government have announced a £1.57 billion package of support for the culture sectors, which is designed to support, and will support, thousands of cultural and arts organisations across the country, including theatres, galleries, museums, heritage sites, live music venues and independent cinemas. I think that he will also know that, within that scheme, priority is given not just to organisations with a national or international reputation but to those that are central to the cultural fabric of our towns and regions. That is a very important further component.

[Dr Wallis]

Eat out to help out has been a massive lifeline for many pubs and restaurants in my Bridgend constituency. Some have told me that, because of it, they could remain afloat and keep people in work. What assessment has been made of the number of people and businesses in my constituency supported by the scheme?

[Jesse Norman]

I can tell my hon. Friend that 67 local businesses registered for the scheme and that it was used 53,000 times in Bridgend, which, while not like the heroic figures we have seen elsewhere, will have provided a very important boost to the local economy. I am sure that he will have had the experience that Members across the House will have had of walking into a café or restaurant and having the proprietor say, “Thank you so much. It has made a vital difference at a critical time of year for us.”

[Bim Afolami (Hitchin and Harpenden) (Con)]

What fiscal steps his Department is taking to support businesses affected by the covid-19 outbreak.

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[Duncan Baker (North Norfolk) (Con)]

What fiscal steps he is taking to support retail and high street businesses affected by the covid-19 outbreak.

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

As the House will be aware, in recognition of the extreme disruption caused by the pandemic, the Government have delivered one of the most generous and most comprehensive packages of support around the world. That response is so far totalling close to £200 billion. In addition to affordable Government-backed loan finance, the job retention scheme and deferred VAT, retail businesses have also received specific support, including a 12-month business rates holiday for all eligible retail businesses in England and retail, hospitality and leisure grants worth £10,000 or £25,000.

[Duncan Baker]

Since being elected, I have raised on many occasions the issue of the economic and social loss that online trading is having on our towns, cities and high streets, and the pandemic has accelerated that problem. Surely, must not the Government now start to consider a VAT-style online sales tax?

[Jesse Norman]

As my hon. Friend will be aware, many offline businesses are also extremely effective online businesses; as Adam Smith almost said, we are a nation of virtual shopkeepers. As my hon. Friend will be aware, the Government are committed to a fundamental review of business rates. We published a call for evidence in July and invited views on reform and on potential alternative taxes, including an online sales tax. Our intention is carefully to consider the merits and risks of introducing such a tax, and I encourage all Members, including my hon. Friend, to contribute their views.

[Wes Streeting (Ilford North) (Lab)]

While a number of wealthier inner-city areas have received over £100 million each in rate relief and small business grants, many constituencies in the midlands and the north have been left behind, with some receiving barely a fifth of that support or even less—Dudley North, Rother Valley, Blyth Valley, Don Valley, Penistone and Stocksbridge, Wolverhampton North East, Newcastle-under-Lyme, Redcar, Sedgefield; I could go on. Is that what the Government meant by levelling up?

[Jesse Norman]

As the Chancellor has already highlighted, the Government’s intention has been to support vulnerable people, vulnerable businesses and vulnerable families across the country. As he has also pointed out, the evidence appears to be that we have been very successful, with the most targeted support being most heavily felt at the lower end of the income spectrum. If numbers in the aggregate do not please the hon. Gentleman, let me simply tell him the reaction of one chief executive of a retail business in this country, who said to me that without the furlough scheme, that company alone would have laid off 30,000 people. With the furlough scheme, it has been able to continue and recover.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

What assessment he has made of the potential effect on levels of unemployment of withdrawing the (a) coronavirus job retention and (b) self-employment income support schemes.

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[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

What discussions he has had with Cabinet colleagues on introducing an online sales tax.

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

The Chancellor has regular discussions on a range of topics with Cabinet colleagues. As the right hon. Gentleman will know, the Government are committed to a fundamental review of the business rates system in England and have launched a call for evidence inviting views on reform. That review will also consider the merits and the risks of introducing an online sales tax.

[Mr Carmichael]

Online shopping offers a range of choice and opportunities for many of my constituents and other people throughout the highlands and islands that they simply cannot get from local shops, but it often comes with the whammy of delivery charges that make the purchase itself look small, or a refusal to deliver at all. An online sales tax could be an opportunity to give a small tax break to those making online sales who deliver as a universal service with a single price across the whole country. Will the Minister consider that along with his other considerations?

[Jesse Norman]

I am very grateful for the suggestion. Now that the right hon. Gentleman has placed it on the public record, I will ask my officials to look more closely at it and to engage with him on it. He will know that we have already introduced, in a quite different context, a digital services tax. We are open to these potential ideas. We will be looking very carefully at this area. Intelligent and well thought through feedback is always of great interest to us.

[Sammy Wilson (East Antrim) (DUP)]

What discussions officials from (a) his Department and (b) HMRC have had with businesses in Northern Ireland on potential additional costs for exporting goods to Great Britain from Northern Ireland under the withdrawal agreement.

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

The Government have been actively engaging with businesses and fully committed to providing them with the information and support needed to prepare for the end of the transition period in Northern Ireland. As was set out in the Command Paper, the Government’s position is that there should be no additional process, paperwork or restrictions on Northern Ireland goods arriving in the rest of the UK.

[Sammy Wilson]

While I welcome the provisions of the United Kingdom Internal Market Bill debated yesterday, they do not cover the issue that the EU is demanding that goods coming into Northern Ireland have tariffs imposed on them until it is proven that they have not left Northern Ireland and gone into the EU. This is damaging to business, because it requires additional paperwork, will affect cash flow, and will put up costs. Given that the Government are committed to keeping Northern Ireland in the UK customs union, that the Act of Union says that there should be no tariffs on trade between countries within the United Kingdom, and that 75% of goods do not leave Northern Ireland once they enter anyhow, will the Minister give a commitment to ensuring in the Finance Bill that the EU demand for those tariffs to be collected will be removed so that Northern Ireland businesses are not disadvantaged?

[Jesse Norman]

As the right hon. Gentleman will know, these topics are currently very live matters of discussion between this country and the EU, and I am not going to comment on that. However, we are, as a Government, very engaged with this issue across a number of different Departments, and we will be looking to support the principles and positions set out in the protocol as we go forward.

Contingencies Fund Advance

Jesse Norman Excerpts

Thursday 3rd September 2020 Written Statements

[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 covid-19 pandemic in 2020-21.

Parliamentary approval for additional resources of £900,000,000 for this new expenditure will be sought in a supplementary estimate for HM Revenue and Customs. Pending that approval, urgent expenditure estimated at £900,000,000 will be met by repayable cash advances from the Contingencies Fund.

Parliamentary approval for additional resources of £14,100,000,000 will be sought in the supplementary estimate for HM Revenue and Customs. Pending that approval, urgent expenditure estimated at £14,100,000,000 will be met by repayable cash advances from the Contingencies Fund.

In line with the latest OBR forecasts, further requests to the Contingencies Fund may be made as necessary to fund covid-19 activity delivered by Her Majesty’s Revenue and Customs.

[HCWS436]

Finance Bill 2020-21: Draft Legislation and Tax Documents

Jesse Norman Excerpts

Tuesday 21st July 2020 Written Statements

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

In line with the tax policy making framework, the Government are publishing draft legislation to be included in the Finance Bill 20-21, to allow for technical consultation and provide taxpayers with predictability over future tax policy changes.



Alongside this, the Government are making announcements on tax administration, business rates, and a number of other areas of tax policy. The Government are also publishing a number of previously announced tax policy documents. Measures that come into effect immediately or retrospectively are previously announced, or are technical amendments to ensure legislation works as intended.



As announced on 28 April, the Government have extended the consultation periods for plastic packaging tax, R&D SME Tax Credit PAYE cap, construction industry scheme abuse, and notification of uncertain tax treatment by large businesses in response to the covid-19 outbreak. As a result of this extension, the Government will publish the draft legislation for these measures later in the autumn.



Reform of tax administration



The Government are announcing a roadmap for making tax digital, alongside their long-term plans for tax administration reform. These reforms are intended to make it easier to pay tax due, enhance resilience, effectiveness, and support for taxpayers.



The Government are publishing a document setting out their vision for a trusted, modern tax administration system that is fit for the 21st century and keeps pace with the many countries already operating digital tax regimes. This sets out an ambition for the tax system to work closer to real-time, improving its resilience, effectiveness and support for taxpayers.

The Government are committed to delivering a modern tax service for the UK’s increasingly digital businesses and their agents.

Digital tools and services can make it easier for businesses to keep on top of their tax affairs, and improve their productivity. Independent research commissioned by HMRC shows that businesses within MTD which fully integrate their accounting and tax software report spend less time on their tax. Micro-businesses who use software to manage their accounts have over 10% higher productivity, according to the Enterprise Research Centre.

Digital tools also reduce the scope for avoidable errors which cost the Exchequer £8.5 billion in lost revenue in 2018-19, and make the tax administration system less burdensome for those taxpayers who want to do the right thing.

The covid-19 pandemic has also highlighted the need for a more flexible, resilient and responsive tax system that provides businesses and HMRC with more up-to-date information on businesses and their finances, and enables easier identification and better targeting of taxpayer support.

The Government are therefore announcing a roadmap for HMRC’s Making Tax Digital programme. Since April 2019, most VAT-registered taxpayers with a turnover above the VAT threshold have needed to operate Making Tax Digital for their VAT returns, keeping their records digitally and updating HMRC through secure software. Over 1.4 million taxpayers are successfully using this system. This includes over 30% of VAT-registered businesses with turnover below the VAT threshold who have joined voluntarily. The Government will introduce legislation in Finance Bill 2020-21 to extend Making Tax Digital for VAT to all businesses below the VAT threshold from April 2022, to ensure every VAT-registered business takes the step to move to a modern, digital tax service.

The Government remain committed to extending Making Tax Digital to other taxes. The Making Tax Digital programme will therefore be extended through new regulations to businesses and landlords within income tax self-assessment from April 2023. This timetable allows businesses, landlords and agents time to plan, and gives software providers enough notice to bring new Making Tax Digital products to market, including free software for businesses with the simplest tax affairs. HMRC will expand its pilot service from April 2021 to allow businesses and landlords to test the full end-to-end service before the requirement to join.

The Government will also consult in the autumn on the detail of extending Making Tax Digital to incorporated businesses with Corporate Tax obligations.

A consultation response will be published setting out how the Government will amend HMRC’s civil information powers, to ensure the UK can continue to comply with international tax transparency standards.

Further policy announcements:



The Government have made a number of further policy decisions which are being announced today, relating to:



Business rates revaluation



Under current legislation, the next revaluation would take effect on 1 April 2022 based on pre-covid-19 property values as of 1 April 2019. In May 2020, the Government announced a postponement to provide greater certainty for firms affected by the impacts of covid-19.

The Government are today announcing that the next revaluation of non-domestic property in England will instead take effect on 1 April 2023. So that it better reflects the impact of covid-19, it will be based on property values as of 1 April 2021.

Small brewers relief



The Government have concluded their review of this relief. In order to support growth, boost productivity and remove “cliff-edges”, the scheme’s taper will be smoothed. It will take effect more gradually over a wider range of production, starting at 2,100 hectolitres per year, and be converted to a cash basis. A technical consultation will be brought forward in the autumn. The Government will also consult on the potential for a grace period for small breweries that decide to merge.

Post-EU exit alcohol review



The Government recognise the need to reform the current duty system to support the alcoholic drinks and pubs sector in the longer term, and will publish a call for evidence before end September 2020.

Tackling promoters of tax avoidance



Tackling promoters of tax avoidance—The Government are publishing a consultation and draft legislation on further, tougher measures to tackle those who promote and market tax avoidance schemes, as announced at spring Budget. This builds on the anti-avoidance regimes that have already been introduced by the Government, which have helped to reduce the avoidance tax gap from £3.7 billion in 2005 to 2006 to £1.7 billion in 2018 to 2019. The Government will bring forward further ambitious proposals in the autumn to strengthen their response to promoters who seek to sidestep the rules.

Employee share ownership



Enterprise Management Incentives (EMI)—The Government will legislate in Finance Bill 2020-21 to ensure that employers can issue new EMI share options to individuals who have been furloughed, have taken unpaid leave or have had their working hours reduced below EMI’s current statutory working time requirement as a result of covid-19.

Previously announced publications



The Government have published the following tax policy documents, previously announced at the spring Budget:



The business rates review call for evidence.

The call for evidence on pensions tax administration.

The consultation on the design of a carbon emissions tax.

The consultation on national insurance contributions holiday for employers of veterans.

The consultation on whether qualifying R&D tax credit costs should include investments in data and cloud computing.

The consultation on the economic crime levy.

The summary of responses to the call for evidence on the operation of insurance premium tax.

The summary of responses and Government next steps to the aggregates levy review.

The summary of responses to the non-UK resident SDLT surcharge consultation.

For other consultations, the Government are continuing to consider the responses and will respond in due course.



Technical tax changes



In addition, the Government are publishing a small number of technical tax changes, which are previously announced or provide technical easements for policy. These include measures relating to:



Changes to termination payments rules, post-employment notice pay (PENP) calculation at s. 402D(1) ITEPA 2003, and amendment of s.27 ITEPA 2003—Changes to current PENP calculation to avoid unfair outcomes if an employee’s pay period is defined in months, but the contractual notice period is expressed in weeks, and changes to ensure non-residents who receive PENP are taxed fairly.

Legislation with immediate effect



The Government have published legislation for the following measures that will have immediate or retrospective effect:



Corporate interest restriction amendments—The first amendment clarifies the way special provisions apply for real estate investment trusts; this comes into force today. The second amendment ensures that no penalties arise for the late filing of an interest restriction return where there is a “reasonable excuse”; this applies from 1 April 2017 when the CIR rules commenced.

Enterprise Management Incentives (EMI) amendments—This legislation will apply retrospectively from 19 March, and is in addition to protecting existing EMI share options holders from the effects of covid-19, as legislated for in the Finance Act 2020, previous Finance Bill.

Annual Tax On Enveloped Dwellings—This measure introduces a new relief from the annual tax on enveloped dwellings (ATED) for housing co-operatives, those which are not publicly funded providers of social housing, which own UK residential property valued in excess of £500,000. The measure will come into effect retrospectively from 1 April 2020, allowing eligible housing co-operatives to claim a refund for the 2020-21 chargeable period.

In addition to these policy announcements, consultations and technical amendments, the Government are publishing draft legislation as announced at the spring Budget:



Benefit charge

Collective money purchases pension schemes

S4C Section 33 VATA

Conditionality: hidden economy

Draft legislation is accompanied by a Tax Information and Impact Note (TIIN), an Explanatory Note (EN) and, where applicable, a summary of responses to consultation document. All publications can be found on the www.gov.uk website. The Government’s tax consultation tracker has also been updated.

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Stamp Duty Land Tax (Temporary Relief) Bill

Jesse Norman Excerpts

2nd reading & 2nd reading: House of Commons
Monday 13th July 2020 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to follow my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), and I will address one or two of his points, but first I must draw the House’s attention again to my entry in the Register of Members’ Financial Interests, and also apologise to the shadow Minister, the hon. Member for Liverpool, Walton (Dan Carden), as I inadvertently misled the House earlier when I said that Labour did not cut stamp duty in 2008; actually, they did, from a £125,000 threshold to a £175,000 threshold, but they crashed the housing market so badly that it made no difference whatsoever, which is why I cannot remember it. Interestingly, however, at the time, despite what he said in his speech, they made no dispensation in terms of buy-to-let investors—stamp duty was just cut across the board, regardless of what the property was for, so there was not some carve-out only for homeowners. According to the research, one thing that cut did do was boost activity, by 20%. Activity was at a very low level, as transactions were normally at 100,000 a month but they were down to 40,000 a month, so it was a pretty painful time, but the cut boosted activity, from that low level, by about 20%. Labour then withdrew the measure pretty early and activity fell away again, which is one of the reasons why we had such an extended recession from 2008 onwards.

I think certain Members have missed the point of the measure we are debating today. It is not just about helping some people get on to the housing ladder; it is also about activity. We all know that the housing market is a major driver of activity right across the economy. That is why many hon. Members have asked why on earth we are taxing something that is a major driver of activity across the economy. This is a transaction tax, and is therefore bound to slow the market down even in good times, let alone times such as this when we are trying to stimulate the economy.

This is not just about driving activity. Residential stamp duty brings in important revenue—about £8.3 billion every year. When my hon. Friend the Member for Runnymede and Weybridge talked about stamping out stamp duty entirely, I saw the sweat on the Minister’s brows as he was thinking, “Where are we going to find that £8 billion?”

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

My hon. Friend will be pleased to know that actually I remained as implacably calm as I always am. As a test of all colleagues who want to scrap taxes, I invite them to do exactly what he is doing and supply the missing revenue with some other suggestion. I did not notice that in the speech of my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), but I am still waiting; I look forward to hearing that before we finish.

[Kevin Hollinrake]

The Minister is absolutely right, and I will come to that.

The Conservative Government have improved the system of stamp duty significantly. It used to be a ridiculous slab tax that created distortions all the way through the market, but we made it into a slice tax—perhaps a slam tax—that gets very expensive at the higher levels and deters activity at the top end.

On the Minister’s point about where on earth we are going to get the money from, the reality is that this nation will come under huge tax pressure over the next few decades, not just the next few years. According to the Office for Budget Responsibility, because of the demands of healthcare and social care, if we do not change the tax system and claim more tax, our national debt will grow to three times our GDP—it is one times our GDP today—so we cannot simply scrap taxes without introducing alternative measures.

I am going to propose a measure. I would like the threshold remain at £500,000, as my hon. Friend the Member for South Thanet (Craig Mackinlay) proposed. We have to find that £8.3 billion annually, so we have to look at annual property taxes. The council tax system, under which people pay pretty much the same whether they live in a castle or a cottage, cannot be right. We need to revisit it and have a proper discussion about it. It is controversial. Some people think it is right that people who own bigger houses should pay more, and other people think it is wrong. We should certainly have a conversation about that.

The think-tank Onward recently proposed that there should be a council tax revaluation, and even the Prime Minister suggested back in 2014 that we should look at it. The thing about it is that it is simple. We can scrap stamp duty completely up to £500,000, and keep it at that level. We can also adjust the bands to make it cheaper for people in lower-value homes, to help people on lower incomes, and make it more expensive for people in higher-value homes.

It is simple, but it is not easy. Simple and easy are two completely different things. As Ronald Reagan said, there are simple solutions, but there are no easy solutions. If we are to tackle some of the unfairnesses in society, we must not duck the tough issues; we must look at the things that make the system unfair in the first place. This is an excellent measure, and I will support it tonight if we enter the Lobbies.

[Anthony Browne (South Cambridgeshire) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests. I am on the advisory council for the Institute for Fiscal Studies, which I am about to quote, and back in 2012 I co-founded the HomeOwners Alliance, Britain’s only consumer group for homeowners, because I was alarmed by the prospects of the home ownership gap—the 5 million aspiring homeowners who cannot own their own home. We have done a lot of work promoting policies to help people get on to the housing ladder.

I was concerned about the home ownership gap because, as Opposition Members said, home ownership levels have declined. What they did not say was that home ownership levels went up almost every year for the past 100 years and stopped in the year 2000—three years after the new Labour Government came in. They then started declining for a decade or so. They are now going back up again. I commend the Government’s policies for increasing home ownership levels.

Various people on both sides of the House have mentioned the deposit barrier. It is a huge barrier for first-time buyers who are trying to save up a deposit. The reason banks have increased the deposit requirement and got rid of 95% loans is that house prices are falling, as the latest data shows. Therefore, if people take out a high-value mortgage, they end up in negative equity. That is why banks are legally required to do only affordable lending. The best way to help homeowners get high loan-to-value mortgages is to have a confidently stable or rising housing market, where there is no risk of negative equity. This measure will do that.

In my time at the HomeOwners Alliance over the past decade, I have done a lot of policy work on stamp duty and written loads of reports on it, including one back in 2012 or 2013 that argued for a differential stamp duty system for second home owners and property investors. There is absolutely no reason why they should benefit from the low stamp duty rates for first-time buyers and so on. I lobbied the Treasury, No. 10 and the Ministry of Housing, Communities and Local Government, and I was delighted when they finally introduced it as the stamp duty premium for additional homes. I would not have introduced it in quite the way they did, but the policy has made a big difference.

Two months ago, I called on the Government to introduce a stamp duty holiday to kick-start the housing market, so naturally I am delighted that the Government have done it.

[Jesse Norman]

It was only you saying it.

--- Later in debate ---

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

I thank all hon. and right hon. Members for what has been a very interesting debate, across the Chamber. I also thank the Labour Members for their support on this measure, because it is wise on their part but also indicates that they share at least this aspect of the Government’s vision for the economy.

This pandemic represents, as the right hon. Member for Wolverhampton South East (Mr McFadden) said, not merely a public health crisis but a profound shock to our economy. That is why, last Wednesday, my right hon. Friend the Chancellor unveiled the Government’s plan for jobs. The purpose of that plan, as he articulated, was to protect, to support and to create jobs across this country.

As we have heard in this debate, the property market has been particularly hard hit, with almost 90% fewer mortgage approvals in May than in February, before the lockdown at began. Not only is this a source of terrible frustration and uncertainty for buyers and sellers who must put their lives on hold in that respect as in so many others, but the reverberations have been felt across the economy. More than 24,000 people are directly employed by house builders, with hundreds of thousands more in the supply chain, and there is a knock-on effect for removal companies, furniture stores, painters and decorators, and many other businesses large or small that benefit when people move—a point nicely made by my hon. Friend the Member for Dudley South (Mike Wood) when he talked about his role as chair of the APPG on the furniture industry, and rightly so.

There are, however, signs that the market is beginning to recover, with some 16% more transactions in May than in April. It is in the interests of both homebuyers and the wider economy that that trend should gather momentum and speed over the coming months. That is why the plan for jobs included a commitment to increase temporarily the nil rate band of residential stamp duty tax from £125,000 to £500,000. Alongside the green homes grant, the aim was to inject momentum back into the housing market so that the economy can start to move forward once again. The Bill today puts that commitment into action and will ensure that the new band can take effect from 8 July—last Wednesday—until 30 March 2021.

Turning to the points raised in the debate, the right hon. Member for Wolverhampton South East asked whether this policy was designed in some way to benefit second home owners. I can reassure him that it is quite untrue to suggest that the measure will disproportionately benefit second home owners. Although those buying second homes or buy-to-let properties will benefit, and make a very important economic contribution in so doing, they will continue to pay an additional 3% on top of the standard stamp duty land tax rates. Let us not forget that it was this Government who introduced the phasing out of finance costs relief, as well as the higher rates of stamp duty land tax for the purchase of additional property—all steps towards a more balanced tax treatment between homeowners and landlords.

The hon. Member for Liverpool, Walton (Dan Carden), in his opening speech, talked about the limited scale of this package of measures. All I can say to him is that his memory is a lot shorter than many others, as £30 billion used to be considered a rather large amount of money. Certainly, it was no slouch of a budget statement to announce that much. It is a measure of how much our times have changed that that should be seen to be the case.

The right hon. Member for Wolverhampton South East raised the question of whether the Government were reacting in some sense to a leak which, nevertheless, would have itself encouraged forestalling. I can tell him that I have dozens of officials across the Treasury thinking about tax strategy who have the concept of avoiding forestalling ingrained, tattooed on their eyebrows and embedded in their heart like the word “Calais” on the heart of Queen Mary in the 16th century. The idea that they would ever have contemplated that is risible. They did not.

Let me turn to some of the other comments that were made in the debate. The hon. Member for Warwick and Leamington (Matt Western) shared with us his concerns about growing wealth inequalities. I understand that. Would he, or maybe the hon. Member for Liverpool, Walton, like to clarify his position on a wealth tax? Would he be in favour of that? What is the Labour party’s position? He is welcome to intervene on me if he has a view on that, as is the hon. Member for Liverpool, Walton, who perhaps could do so in Committee. It is causing us a certain amount of uncertainty and it must be causing voters even more.

The hon. Member for Mitcham and Morden (Siobhain McDonagh), in a very thoughtful speech, invited the Government to build more. I can direct her, if I may, to an article in The Guardian on 14 November last year, which points out that house building in England is at a 30-year high. As colleagues have mentioned, we have a £12.2 billion affordable homes programme in place at the moment, so she can take it as read, I hope, that both sides of the housing market are very well attended to at the moment.

My hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) raised whether we should scrap stamp duty all together. I was perhaps slightly harsh, but I always take it as an additional measure of credibility when colleagues can come forward, as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) did—and my hon. Friend the Member for South Cambridgeshire (Anthony Browne)—with a specific suggestion for how the gap could be filled. What was charming about my hon. Friend the Member for South Cambridgeshire was that although he believes the abolition of this tax will fire up the market, temporarily at least, he did not seem to think that doubling the additional tax would have any effect on the market. I thought that was an interesting economic contribution and I invite him to raise that possibility with his friends at the Institute for Fiscal Studies, since he is a board member or senior advisor there.

Let me wind up by saying that this is an important measure, which comes at a time when the pandemic has tested our economy to the limit. Through our collective effort, we will bring this virus under control. We have done so and we will continue to do so, and we will support our economy as it reopens in a way that is safe. For those reasons, I commend this 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).

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Before I ask the Clerk to read the title of the Bill, I should explain that, in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s Chair during Committee stage, in order to comply with social distancing requirements I shall remain in the Speaker’s Chair carrying out the role of Chairman of the Committee. We should be addressed as Chairs of the Committee rather than as Deputy Speakers.

Stamp Duty Land Tax (Temporary Relief) Bill

Jesse Norman Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Monday 13th July 2020 Commons Chamber

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

This Bill increases the nil rate band of stamp duty land tax from £125,000 to £500,000 from 8 July 2020 and runs until 31 March 2021. If I may, I will speak to clauses 1 and 2, and also to new clause 1 tabled in the name of the Leader of the Opposition.

This Bill contains two clauses. Clause 1 provides for the thresholds at which stamp duty land tax is due on residential property to be increased for a temporary release period, with effect from 8 July 2020 to 31 March 2021. The effect of this is that the first £500,000 of consideration for standard purchases of residential property will be free of tax, whereas previously only the first £125,000 was free of tax. The clause changes the rules in relation to other elements of stamp duty land tax, which are affected by the temporary holiday, such as the higher rate for the purchase of additional properties and first-time buyers’ relief. The higher rate traditional dwellings will continue to apply in addition to the standard rates of stamp duty land tax. This means that for purchase of additional dwellings, the first £500,000 of the consideration will be subject to the higher rates of 3% on top of any existing SDLT rates. Further, the clause ensures that section 57B and schedule 6ZA of the Finance Act 2003, which gives effect to first-time buyers’ relief, is temporarily disregarded until 31 March 2021.

Finally, the clause makes sure that no additional checks will be due when a contract is completed after the temporary relief period has ended, if the transaction was substantially performed within the temporary relief period. This is provided that the only reason for additional tax becoming due is the return to the standard rates of SDLT after the end of the temporary relief period.

Clause 2 provides that the Bill may be cited as the Stamp Duty Land Tax (Temporary Relief) Bill. The Bill comes into force on Royal Assent, but applies in relation to transactions with an effective date on or after 8 July 2020. As a result of the resolutions passed by the House of Commons under the Provisional Collection of Taxes Act 1968, the Bill’s provisions have effectively been in force since the 8 July 2020.

I shall briefly turn to Labour’s new clause 1, which calls for a review of the impact of the Act. To that I would respond that Her Majesty’s Revenue and Customs routinely publishes quarterly and annual statistics and analysis of stamp duty land tax data, including on first-time buyers and those purchasing additional dwellings. The Government also already closely monitor those statistics and keep stamp duty policy under constant review. As part of that, we will continue to examine the effect of the temporary rate change. This is a straightforward Bill to enact the temporary relief to stamp duty land tax announced last week by my right hon. Friend the Chancellor. I therefore commend clauses 1 and 2 to the House and ask the House to reject new clause 1.

[Dan Carden (Liverpool, Walton) (Lab)]

It is a pleasure to speak in the Committee stage of the Bill. The Bill was only published at the beginning of the debate, and it has just two clauses. I will direct my remarks primarily to our new clause 1. We are asking the Government at least to accept the principle behind the new clause. I do not think the Financial Secretary to the Treasury was able to put our minds at rest on the question of which people and groups will benefit from the cut set out in the Bill. He said that it was quite untrue that it would benefit the owners of second homes or multiple homes, but I think we need a review to give us the facts. We need to find out whether first-time buyers, existing owner-occupiers moving home, buy-to-let investors, those buying second homes and overseas buyers are among groups that will benefit from the policy.

The Financial Secretary did not give us a clear response to the fact that £1.3 billion of the cost of this scheme looks likely to benefit those who are already home owners. We want the Government to commit to reviewing the Bill’s impact in an open and transparent way. We want to know whether such a large sum will deliver value for money and what the broader impact of this will be on the housing sector. The Government should want to consider how this, their flagship policy, will contribute to solving the housing crisis and how it will impact on the economy overall. Our new clause will help to achieve that, and the Government should accept it.

[Wera Hobhouse (Bath) (LD)]

Covid-19 has highlighted the deep inequalities that existed long before this pandemic. Many people have been left desperate for support. Hundreds of thousands of people already have less money coming in, and hundreds of thousands have lost, or will lose, their jobs. The Government have thrown an eye-watering amount of money at our economy, but we do not yet know how this increasing mountain of debt will be paid back, or by whom. In the meantime, paying bills, rents and mortgages has become hard for millions of households. We must therefore question whether this tax cut should be a priority for the Government. It is expected to cost £3.8 billion, yet it will mainly benefit the wealthiest. The average earner, including the young generation who are struggling to pay ever-increasing rents, let alone be able to put down enough money to buy a house, will see nothing of it. The discount might provide a tax holiday for the privileged few, but it completely ignores the fact that the majority of people are unable to buy a home of their own now, and are never likely to do so in the future.

In my constituency of Bath, the availability of housing for first-time buyers is limited and house prices are expensive. The average house price in Bath is currently more than £430,000. A first-time buyer would qualify for £10,000 under the new rates, but even that would provide little benefit to a first-time buyer in my constituency who cannot secure a deposit or who faces an unaffordable mortgage. The cut to stamp duty will not solve the real problems at the heart of the housing crisis. Housing is one of the most important sectors for job creation—I agree with the Minister on that—but where is the focus on building social homes for rent? Social homes are the only way to provide secure and affordable housing for everyone, but, most importantly, for those on lower incomes. The private sector has completely failed to build social homes, and only a huge Government infrastructure programme to build social housing, as we saw in the ’50s and ’60s, will bring our social housing stock back to where it needs to be. That would create the jobs we need as well as the homes we need. Surely at this time, genuinely affordable homes are more important than ever, and more important than a stamp duty cut.

Lastly, the climate emergency has not gone away during covid, and we know that emissions from homes account for 30% of UK emissions. Decarbonising homes is therefore crucial to getting to net zero. Improving the energy efficiency of social housing is something that the Government could do straight away. They could also require landlords to achieve minimum levels of energy efficiency in order to be able to rent their homes. We need a Government with a vision to get the economy going, not a tax cut for only the few.

[Jesse Norman]

I thank the hon. Members for Bath (Wera Hobhouse) and for Liverpool, Walton (Dan Carden) for their comments. There may be some slight misapprehension from the hon. Gentleman—I did not actually say what he said I said. I said it is not true that this measure will disproportionately benefit second home owners, and that is because it has a proportionate effect across the whole population of home ownership. However, he should also be reassured that we in the Treasury keep a very careful watch over these taxes. They are monitored and assessed and their impacts are regularly reported on.

As I said, the Bill will help to deliver a Government aim to ensure that people feel confident to move, buy, sell, renovate and improve their homes, and it is a policy that the Labour party has indicated that it supports. On that basis, I commend clauses 1 and 2 to the House and respectfully ask that it does not support new clause 1.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

[Jesse Norman]

I beg to move, That the Bill be now read the Third time.

Mr Deputy Speaker, let me say how gracefully you migrated from being Chairman to Mr Deputy Speaker without any of us really noticing the change—thank you for that brilliant transfiguration. It is extraordinary to think that it is now four months almost to the day since my right hon. Friend the Chancellor of the Exchequer stood before the House to deliver the Government’s first Budget. That proved to be the first in a series of very large economic interventions from this Government, all of which have been designed to buttress our public services and protect the most vulnerable in our society from this virus, while also supporting people’s jobs and livelihoods through the lockdown. Four months on, as he said, a “new phase” has begun in the Government’s economic response to covid-19 with the publication of our plan for jobs.

As the Chancellor made clear when he addressed the House last Wednesday, there is no room for dogma or ideology in this approach. If the first phase of our response focused on protection, this second phase is focused on the need to give everyone the opportunity of good and secure work in the future. However, it is certainly not the last measure that we will enact. The Government have said that they will bring forward both a Budget and a spending review in the autumn, when we will be in a better position to put our public finances on a secure footing and consider the long-term fiscal measures required for a sustained and successful recovery. Nor should we forget that many of the programmes that the Government have introduced to date still have a significant time to run. They include the coronavirus jobs retention scheme, the furlough scheme and the self-employment income support scheme, which will continue through the summer and the early autumn before ending in October.

However, at this moment millions of people are still facing considerable uncertainty and fearing for their jobs right now. They need to know that there is hope for the future, which is why we have acted with a plan for jobs. This Bill—I hope soon it will be an Act—is a very important part of that plan for jobs, and I commend it to the House.

Finance Bill: Legislation Day

Jesse Norman Excerpts

Monday 13th July 2020 Written Statements

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

The Government will introduce the Finance Bill following the next Budget.



In line with the approach to tax policy making set out in the Government’s documents “Tax Policy Making: a new approach”, published in 2010, and “The new Budget timetable and the tax policy making process”, published in 2017, the Government are committed, where possible, to publishing most tax legislation in draft for technical consultation before the legislation is laid before Parliament.



The Government will publish draft clauses for the next Finance Bill, which will largely cover preannounced policy changes, on Tuesday 21 July 2020 along with accompanying explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. All publications will be available on the gov.uk website.

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