High Street Bank Closures

Jim Shannon Excerpts

Tuesday 28th February 2023 Commons Chamber

[Alex Davies-Jones]

I completely agree. I come from the proud market town of Pontypridd. As I will go on to talk about, for many traders it is not profitable to operate with purely card payments. They operate in very small monetary values and cash is a main aspect of their business model, so it is absolutely vital that we have that presence on our high street.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Pontypridd (Alex Davies-Jones) for securing this debate, and I spoke to her beforehand. I represent a rural constituency where we have had 11 bank closures. It has been horrendous. The people of my constituency have always responded to the consultations, but they have meant nothing. Does she agree that it is incredibly stressful for the elderly, who are unaware that they are a target for online scams because they do not have the banks to fall back on? They cannot safeguard themselves and they need the local branches, or access to somewhere. This House must regulate a standard duty of physical care on those banks that will not regulate themselves.

[Alex Davies-Jones]

I agree. As I have said, the high street bank is not just where customers can get money or cash out. It is a place with a trusted professional they can go to for information about the services that a bank provides. There is a real person—not someone at the end of a phone in a call centre—who they can trust and seek reliable and trusted advice from. That is a valuable resource for so many in our community.

I mentioned the digitised economy, which fundamentally relies on digital infrastructure to support it. In rural and semi-rural constituencies, which many of us represent, we require decent mobile signal and broadband, but often it is very poor. Many businesses tell me that they do not feel able to make the switch to card payments or online banking because they do not have the infrastructure to support them reliably to carry out their business.

Banks are more than just a place to withdraw cash; they are the centrepiece of our high streets, providing support for the community groups, small businesses and charities that rely on their presence. A small business in my constituency that may not feel able to accept card payments and is therefore reliant on cash will no doubt depend on its local branch for business banking and cash deposits. When branches close, it is not just consumers who will suddenly have to travel significant distances to the next nearest branch. Local businesses will travel, too, taking with them much-needed local jobs. Really good jobs are going elsewhere because of bank closures on the high street.

Such a time-consuming inconvenience is a major barrier to the growth of our local economies and high streets. It threatens the livelihood of small local businesses altogether, furthering the risk of a decline of our high streets. I am very fortunate, as we all are in Pontypridd and Taff Ely, that we have an incredible range of small and independent businesses. Many of those businesses continue to rely on cash payments; countless small businesses across my constituency have told me that they cannot justify moving to card payments because they do not feel that broadband in the area is reliable enough.

In Ponty town alone, from the traders running stalls outside on Market Street to the historic units inside Ponty market, retailers need us to retain the local bank branches that underpin so many small businesses. Without the high street banking infrastructure to support them, we risk losing our incredibly important small businesses, many of which have been trading for generations and should be there for generations to come.

Since I was elected to this place, I have been a vocal champion for our high street, for footfall and for the opportunities that are needed to regenerate Pontypridd and Taff Ely. The local businesses in the communities I represent have already suffered a serious blow under the pandemic and are now being hit further by the cost of living crisis. Closure of these crucial bank branches will only decrease footfall further.

A bustling industrial economy once nestled in the valleys of Pontypridd and Taff Ely. I passionately believe that, with the right infrastructure and the right policies, we can return to our previous heights of economic success and prosperity. I pay tribute to the work of Rhondda Cynon Taf Council and our Welsh Labour Government for their fantastic growth-focused initiatives, which will benefit the local economy in my constituency and across south Wales. For example, the Metro project and the refurbishment of YMa, our arts and culture centre, will bring added footfall to our town centres.

But that is not enough. Local organisations in my constituency, such as the Pontypridd business improvement district, are doing all they can: they do incredible work to regenerate Pontypridd town centre and the wider community. Those initiatives are extremely welcome, but without action from the UK Government to tackle the epidemic of high street bank closures, our local economy will still fundamentally be held back and our high streets will suffer as a result.

The current industry guidance from UK Finance revolves around the access to banking standard, which is designed to

“minimise the impact of bank branch closures”.

However, I strongly believe that that guidance just does not go far enough. Simply providing best practices for how a bank should go about informing customers of its intention to close a branch does little for my constituents.

Unfortunately, this hands-off approach seems consistent with the previous attitudes of this Government. In answer to written questions on the issue, they have told me:

“The decision to close a branch is a commercial issue for banks and building societies and the Government does not intervene in these decisions.”

I must say, however, that I strongly believe that the closure of a branch is not simply a commercial issue. It is, profoundly, a community issue—and it is our communities that pay the price for closures.

The Government have stated that post offices are an adequate alternative for communities whose dedicated bank branches have closed, because, under post office banking arrangements, customers’ in-person needs can be met at a post office branch. That may be true, but sadly in Pontypridd and Taff Ely we have lost multiple post office branches as well. Like high street banks, post offices are a vital piece of our community infrastructure. I have genuine concerns that, without banks and without our post offices, thousands of my constituents will suffer profoundly if we do not act.

[Jim Shannon]

One thing we have seen increasing in my constituency is credit unions. Have credit unions in the hon. Lady’s constituency had the opportunity, as those in mine have, to reach out and spread their wings to fill the gap?

[Alex Davies-Jones]

I agree that credit unions can plug some of the gap. The Welsh Government are exploring opportunities with Banc Cambria, which would be a national bank for Wales with a presence on the high street, but until it is established and until our banks have a statutory duty to provide a service to our communities, services will be sadly lacking. Businesses, communities and constituents will suffer as a result.

Sunscreen Products: VAT

Jim Shannon Excerpts

Thursday 9th February 2023 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is pleasure to be called to speak in this debate and to serve under your chairmanship, Mr Sharma. I thank the hon. Member for East Dunbartonshire (Amy Callaghan) for bringing the issue forward. She and I have been friends for a long time in this House, and I am really pleased to see her in her role here. We share APPG roles and I deputise for her—not very well; she does it much better than I do. What a pleasure it is to be here.

I want to add a Northern Ireland perspective to this debate, as I always do. I fully support the hon. Lady’s request to reduce VAT on sunscreen products. Melanoma is a growing health problem in Northern Ireland. My office has six staff members, and three of them—50%—told me that they have immediate family members who had melanoma. One of the younger girls, who is in her early 20s, admitted that she used sunbeds until her father had third-stage melanoma. This is not a disease of the tropics. Perhaps because of our skin and where we are from, we take the sun a wee bit more aggressively than they do in the Mediterranean, for instance. We usually go boiled red to start with, and then when the pain is too much we move to the sunscreen, which we should have done at the very beginning.

It has been found that 86% of cases of melanoma can be prevented by adopting simple sun protection measures, including wearing factor 30-plus sunscreen. That is a very small thing to do, but the hon. Members for East Dunbartonshire and for Erewash (Maggie Throup) and I are asking the Government to do something to incentivise that. We are not asking for a lot; we are just asking for a wee nudge in the right direction. The United States of America and Australia have already done that.

The incidence is increasing, and there are now more than 16,000 new cases of melanoma skin cancer each year in the UK. The problem is growing, and therefore the need is greater than it ever was. Of course, that does not take into account repeat diagnoses of melanoma—the hon. Member for East Dunbartonshire said that she got it twice.

In the 15-to-44 age group, melanoma skin cancer is the second most common cancer in males and the third most common in females. I find it difficult to comprehend why that is the case when all those people were taught the dangers of the sun in school. We were told to be careful when we go out—mum and dad told us that as well, but more often than not we ignored it.

[Amy Callaghan]

Does the hon. Gentleman agree that, despite people believing they do not need to wear sunscreen in Scotland, Northern Ireland and other places across the UK, it is essential that they do? They are more likely to contract melanoma if they are pale and fair haired, or have red hair, which is common in our isles.

[Jim Shannon]

In my case, with no hair.

[Amy Callaghan]

You’ve got a wee bit.

[Jim Shannon]

I’ve got a wee bit round the sides. I used to have a whole lot of hair. The hon. Lady makes a fantastic point, and it is true: we are of a fair skin, and that right away puts us in the target area.

We have the information, but for some reason the message just is not getting across. One in 36 males and one in 47 females will be diagnosed with the deadliest form of skin cancer in their lives, so we need to stop seeing sunscreen as a luxury, like a nice moisturiser. We should instead see it as an essential, like good nutrition or drinking water. If it is put in that category, the seriousness of what we are trying to achieve will be clear.

One way of getting the message across is to make it cheaper to purchase sunscreen. My speechwriter—a very busy girl—loves her holidays abroad. I think it is because it means she does not have to answer my calls for two weeks. She has no speeches to prepare, and of course she has no internet access due to overseas roaming charges. She never buys sunscreen before she goes because it is half the price in Florida—that is where they go for their holiday every year. She waits until she gets to Florida and buys enough to bring home and do the whole year back here, because the savings are significant. Hon. Members might say that is an Ulsterman or Ulsterwoman thing, but we do look for a bargain. If it is a bargain that helps our skin and protects us, that is why we do it.

In the US, sunscreen products have been exempt from VAT-style taxes since 2012. In Australia, they are exempt provided they are principally marketed for use as a sunscreen and have an SPF rating of 15 or more. The reason for that is that in Australia and America, sunscreen is seen as an essential daily living product. That is how they categorise it. Some of us have been conditioned to see it as a holiday item, but they see it as something they need to have all the time. Many people who have never gone abroad have melanoma. It is not a holiday problem; it is a lifetime problem.

Public polling indicates that many people find the cost of sunscreen too high, and with the current cost of living crisis deepening, that cost is likely to deter increasing numbers of people from buying sunscreen. The major retailers Tesco and Asda have recognised cost as a prohibitive barrier for people buying sunscreen, and Tesco reduced the price of its own-brand sunscreen by 20% in 2021 to offset VAT. In a consumer poll—such polls are good barometers of what people are thinking—some 57% of respondents said that the product was too expensive, and 29% claimed that they would wear it daily if it were a little bit cheaper. Incentivise it, make it happen and address the issue.

The call for VAT to be removed from sunscreen was part of a sun safety campaign in 2013. That is why I support removing VAT from sunscreens that are factor 30 or more: as Melanoma Focus has said, doing so will make sunscreen more affordable and send a powerful message from the Government about the importance of skin protection. We only have one chance for our skin: it will last us our lifetime, but if we have constant cases of melanoma, then unfortunately it might not last us for the right time. I further support the recommendation that that measure be coupled with a Government-backed cross-media awareness campaign akin to the Australian Government’s successful Slip, Slop, Slap campaign, which the hon. Member for East Dunbartonshire referred to. It reminds me of one of those catchy 1960s tunes from when I was a wee boy—I am aging myself by saying that —but a campaign is significant.

With increasing temperatures in the United Kingdom from climate change, such a measure is becoming increasingly urgent. The hon. Member deserves great gratitude for bringing this debate forward, because—as others have said, and as those who follow my speech will say as well—this is an urgent subject. Removing VAT from sunscreen would not have been possible under EU rules, but it is now; there is nothing to restrict us, except those of us who live in Northern Ireland. I hate to say it, but in every debate I have, I have to temper everything with the Northern Ireland protocol. In Northern Ireland, we would not be able to take advantage of leaving the EU in this way, due to the protocol. However, that is a different issue for another day.

Melanoma Focus believes that if this policy were implemented, the reduction in VAT revenue would be offset by reduced melanoma skin cancer cases and therefore reduced costs to the NHS. That is a crucial factor: if we take action to ensure that people can protect themselves more by being able to buy sunscreen that wee bit cheaper, we can ensure that those people do not need ongoing healthcare, with its associated costs. That seems logical to me.

[Amy Callaghan]

The hon. Gentleman is making a great speech, and I welcome his support for VAT Burn. On his point about the EU, there are little to no advantages of Scotland being outwith the EU, but while we are tied to this place and also outwith the EU, we can reform the VAT on products such as sunscreen. We will take that tiny little benefit that we can, and we appreciate it.

[Jim Shannon]

I thank the hon. Lady for her intervention. We certainly encourage the Government to take advantage of opportunities to promote better health as a result of leaving the EU.

The “Getting It Right First Time” NHS review of dermatology highlights high and increasing demand for skin cancer treatment, with 200,000 surgical operations for suspected skin cancer carried out every year, and skin cancer rates doubling every 14 to 15 years. That is the main factor driving the request being made today. When it comes to health, those are the stark figures, and I believe they highlight the need for additional workforce to meet current and future pressures, and also suggest that we need to raise sun and skin awareness to reduce pressures on dermatology services.

In conclusion, I support the call to remove VAT from sunscreen. I say to the Minister, who knows that I respect her greatly, that we make that call today because we believe it is worth supporting. The Government have taken other steps when it comes to VAT—the hon. Member for East Dunbartonshire referred to sanitary products. Removing VAT from those products was something that the Government should have done; they did so, and I welcome that. Today, we make another request.

It is not just a matter of listening; it is also about taking action to protect our people and our NHS, and the future of its services. Here is a figure for everyone— 85% of cancer is preventable. This is preventable, if we take some steps in the right direction. Let us take the steps in this place to prevent it right across all of this great nation, this United Kingdom of Great Britain and Northern Ireland.

--- Later in debate ---

[Victoria Atkins]

That is a very fair challenge. I keep talking about difficulties, but that is the reality of the decisions we have to make; while a lot of melanoma is caused by of exposure to the sun, even in this day and age, some melanoma will be due to sunbed use, which I know colleagues across the House will have great concerns about. Some melanoma will be from damage caused decades ago, when we were less aware of the risks of the sun, and some will have no link at all to sun damage. It will never be a straight swap.

[Jim Shannon]

I thank the Minister for her response, and I want to follow on from what the hon. Member for Erewash (Maggie Throup) said. In my contribution I referred to 200,000 surgical operations and 16,000 new melanoma cases every year, and the scale of that results in a significant cost for the NHS. We are not criticising the Minister; she is doing what a Treasury Minister has to do. We are saying, very respectfully, that there is a cost to the NHS every year. That has to be part of the mathematics of the process.

This is a very long intervention, and I apologise for that. Given that Australia and the United States of America have cut VAT on sunscreen, has there been any discussion with the relevant bodies about what those countries achieved by doing so?

[Victoria Atkins]

I do not know if there have been any discussions. I will ask, because it may be that my predecessors had them. In terms of comparisons with Australia and the United States, we have to tread a little bit carefully. With the horrendous damage that has been done to the ozone, Australia has a very particular problem with exposure to the sun, and we have to remember the strength of the sun there. I note what the hon. Member for East Dunbartonshire said about UVA and UVB being present in Scotland, but I do not think that anyone would suggest that Scotland has the same strength of sun exposure all year round as the sunnier parts of Australia.

Digital Pound

Jim Shannon Excerpts

Tuesday 7th February 2023 Commons Chamber

[Andrew Griffith]

As my hon. Friend knows, one of the points of friction—one of the costs—is the exchange of currency. It has come down greatly over time, but is still often measured in the percentage points. A true central bank-issued digital currency—a digital pound—that could be much more readily converted without the current number of intermediaries could be a real opportunity for small and medium-sized enterprises engaged in that all-important activity to our great nation: exporting our goods and services.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his statement. I and many of my constituents, like those of other hon. Members, are still committed to using cash. How will the Minister ensure he sends a message that today’s announcement does not mean that we are moving to a cashless society? How will he secure access to cash? It is already at risk in rural areas as a result of banks’ continuing withdrawal and centralisation, which is leaving people with no option but to operate digitally even when they feel vulnerable and feel that their finances are at risk.

[Andrew Griffith]

Today is not about access to cash; it is about the long-term plans for a digital pound. However, the hon. Member makes a very well-understood point. We are legislating in the Financial Services and Markets Bill to ensure that, for the first time in this country since the Celts minted the original currency, communities will have a statutory right of access not just to withdraw cash, but to deposit it, because it is the ability to deposit that drives the desire of retailers and others to take cash. We want cash to continue to circulate in our society, and we are making provision for that in the Bill, which I hope will soon be on the statute book.

High Income Child Benefit Charge

Jim Shannon Excerpts

Thursday 2nd February 2023 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Linlithgow and East Falkirk (Martyn Day) on raising the issue here today. I try to come to Westminster Hall as often as I can, but when I saw the subject of the debate I was very keen to come along and support the hon. Gentleman. I congratulate him on setting the scene so well.

I want to specifically focus on the child benefit threshold. As the hon. Gentleman mentioned, one person could earn £52,000 and their partner could earn £10,000, and they would be disadvantaged. However, partners who both earn £49,000 do not have the same issue. That is an anomaly that we have to try to address.

My party discussed this issue at our parliamentary meeting last Tuesday. We have a slot to move a ten-minute rule motion, and we are minded to bring forward this matter when the time comes. I have raised the issue in the Chamber on numerous occasions, as has my right hon. Friend the Member for East Antrim (Sammy Wilson).

I am pleased to see the Minister in her place—I always am, by the way. I know she always tries to give us a response that helps with where we are, so I await her response with anticipation—no pressure, Minister. We are pleased to see her here and we look forward to her contribution.

The cost of living crisis has had a detrimental impact on people’s finances across the whole of the United Kingdom of Great Britain and Northern Ireland. I have spoken in countless debates on this issue. Those who are struggling the most—working families—are among those who cannot make ends meet.

Child benefit is a great benefit. It was designed to be a helping hand, but instead the concept has become a hindrance for working-class families, and even some who were previously considered to be working class and are trying their best to provide their children with all they can. I am a grandparent now, but when we were endeavouring as parents, we tried to give our children as much as we could, as every parent would. That was not to spoil them, but to give them the opportunities that we perhaps did not have when we were younger.

[Margaret Ferrier]

The hon. Gentleman mentioned the cost of living crisis. The fact that the charge is not uprated in line with inflation means that thousands of liable families are losing part of the child benefit that they are entitled to. Does he agree that this must be swiftly addressed?

[Jim Shannon]

I thank the hon. Lady for her intervention; yes, I do agree. Later in my contribution I will ask for the very same thing, because I think it is important that we do so.

We were hoping to present a ten-minute rule motion on this issue in the near future. Our slot is probably in July of this year. I and my party feel that it is grossly unfair that the child benefit cap has remained the same for 10 years, while the price of bread has risen by 30% in Northern Ireland in this year alone. The cost of the diesel needed for people to get to work is up by 30p a litre from 2013, or 20%, while those who invested in electric cars have seen the price of electricity consumption increase from an average of £577 in 2013, with a current price cap of £2,500. Increases are not limited to those essentials. The Government’s retaining of the cap is nothing more than another squeeze of the middle class through taxes. The real burden falls on the middle class, and I, my party and others will do all we can to battle that.

I am pleased to see the shadow Minister, the hon. Member for Hampstead and Kilburn (Tulip Siddiq), in her place, and I look forward to her contribution. No doubt she and others will be saying the same thing.

I am attempting to bring about a change that I encourage the Government to consider. I find it extremely unfair that two parents could be on £49,000 a year and receive child benefit, but one parent can be on £10,000 and the other on £52,000 and they must pay an additional tax charge as a result. That anomaly is critical. A family on £98,000 are okay, but a family on £62,000 are not because one parent earns over the £49,000 or £49,500.

Another issue is that working families feel unable to take a pay rise because they would lose their child benefit and be worse off. I know families who were offered a wage increase from £49,500 and said, “Actually, I’m going be worse off,” and did not take it, so it is a fact of life for many.

A conversation took place in my office just last week on this subject. I always like to put the issues that we debate to my staff members, who give me their perspective. When we discussed it, they said that £50,000 sounded like a very decent yearly income, and it is, but when the cost of living is taken into consideration, these statistics are nowhere near as realistic as they seem. In addition, the high income child benefit charge is collected completely though a self-assessment, whereby individuals who are liable to pay it are required to find an annual tax return and, if they do not do so, they may be charged legal penalties for failing to register their liability and to pay their charge through their tax return, as some 180,000 families have had to do.

It has got to the stage where even families who are entitled to child support are opting out for fear that they will be hit with tax returns that they should have done but perhaps were unaware of. For my generation and the one after that, that was not a problem; we went to work, we received our child benefit, whatever it was, and we were thankful for it. There has been no uplift to the individual salary allowance since 2013—that is 10 years. There has been uncontrollable inflation since 2013, but no uplift for parents.

The Child Poverty Action Group has been in touch with my office, stating that benefit freezes and sub-inflationary upratings mean that child benefit has lost 30% of its value since 2010. One way that can be fixed is for the Government to increase child benefit by just £20 a week per child. That would pull half a million children out of poverty—the very issue that the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) referred to.

I said earlier that more families are choosing to opt out of child benefits due to the tax self-assessment that must be done. Covid also played a part in the reduction in the number of people applying for child benefit, mainly because parents were unable to register new births due to lockdown and there was reduced contact between parents and health visitors. Now that we are more or less out of that era, efforts should be made to reverse that trend.

Many Members, and more importantly many of our constituents, have raised issues about child benefits. No parent should have to sacrifice good work or a pay rise to get the full amount. That is ludicrous. No parent should have to get an accountant to fill in a separate tax return if they earn over £50,000. We must do more to support those parents through child benefits. More importantly, we must ensure that children are protected and that poverty statistics are dealt with. This has become a critical issue in my office, which is why my party is considering introducing a ten-minute rule Bill on it in July. I am sure the hon. Member for Linlithgow and East Falkirk will be one of the signatories when the time comes. We are asking the Minister for some more compassion, understanding and sympathy, given that the process denies some people what they should have by right.

--- Later in debate ---

[Victoria Atkins]

I very much understand this point. I do not know whether the hon. Gentleman was involved at all in the scrutiny of the Bill that became the Domestic Abuse Act 2021, which I had the privilege of taking through the House a year or two ago. Interestingly, one of the challenges that his SNP colleagues put to me, in the context of universal credit, was that universal credit is paid per household. They made the point that, particularly for victims of domestic abuse, they would prefer it to be paid to the individual. The reason why I raise that is that we have a long-standing tradition—since, I am told, the 1990s—of individual taxation. I, as a feminist, am entirely comfortable with being—indeed, demand the right to be—taxed on my income, rather than that of my husband. The system of independent taxation being what it is, every individual, including each partner in a couple, is treated equally and independently within the income tax system. That means that the child benefit charge, sitting as it does within the income tax system, must adhere to those principles; that is the idea behind it. I acknowledge the tensions that the hon. Members for Dunfermline and West Fife and for Linlithgow and East Falkirk have raised regarding those families where people fall just below the threshold, but Governments of all colours must do that kind of balancing when setting thresholds and rates of taxation, and so on. That is why the charge is set as it is.

[Jim Shannon]

I am a very simple person, and I am trying to work this out—the hon. Member for Dunfermline and West Fife (Douglas Chapman) referred to this example as well. If two people earn £49,000 a year, it is okay for them to have the benefit, but if one person earns £52,000 a year and their partner earns £10,000, that makes them liable for extra tax. Surely, the Government should look at that again—a collective income of £98,000 against a collective income of £62,000.

IMF Economic Outlook

Jim Shannon Excerpts

Tuesday 31st January 2023 Commons Chamber

[Mr Speaker]

To complete the urgent question, I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his answers to the urgent question. Being the only G7 country, according to the forecast, to have an economy set to shrink this year, will the Minister consider increasing spending power in the United Kingdom by focusing on help for SMEs, which are the backbone of our economy and the job creators, and in particular businesses in Northern Ireland, which are hit harder by the costs associated with the reprehensible Northern Ireland protocol?

Wagner Group: Sanctions Regime

Jim Shannon Excerpts

Wednesday 25th January 2023 Commons Chamber

[James Cartlidge]

To be clear, we do not make any of these decisions with prejudice to the legal case that the individual is pursuing. They have a right under our law to have legal representation. What we have here is a process for considering applications to use frozen assets to fund legal fees in specific cases.

[Jim Shannon (Strangford) (DUP)]

I recognise that the Minister has responded and tried to address the questions. We recognise that the Government have at least made some efforts to do so. But in this urgent question the House has identified an anomaly concerning the Wagner Group, which, as everyone has said, is responsible for some of the most brutal crimes across the middle east and Africa. The House wants urgency—that is what we are all asking for. Can the Minister indicate the timescale for that to happen? When will the Wagner Group find that the loophole that it has identified can be closed?

Landfill Tax Fraud

Jim Shannon Excerpts

Thursday 12th January 2023 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

I beg to move,

That this House has considered the matter of landfill tax fraud.

I want to say how pleased I am that the Backbench Business Committee agreed to this debate and thank hon. Members from across the House for their support in securing it.

After I secured the debate, a journalist asked me, “What’s landfill tax fraud?” I said, “Yes, I do accept it’s quite a niche subject.” It might be seen as an anorak subject, but it is something that I have been involved with, along with the right hon. Member for Haltemprice and Howden (Mr Davis), for nearly 10 years now. I think he would agree that we are both proud anorak wearers when it comes to this matter, because it is a serious issue for the UK.

I have dug into the issue. There are solutions to it, but blind eyes have been turned by various Government agencies. There is no political will to really grasp the issue and the devastating effect it is having on our revenue collection, but also in various communities.

Have we made progress? Slightly, but there have been missed opportunities over the years. The right hon. Gentleman, who has been involved in this for as long as I have, and I cannot understand why the problem has not been grasped when there are clear solutions, some provided by the industry and some by me, the right hon. Gentleman and other Members.

Landfill tax was introduced in 1996, with the quite honourable aim of reducing the amount of domestic and other waste going into landfill and of pushing recycling—no one could disagree with that. It could be argued that it has worked in reducing the amount of waste going to landfill, but its effectiveness is questionable, because we do not know what is going into landfill.

The industry is worth some £9 billion a year—not a small part of our economy. Like anything generating large amounts of revenue, it attracts criminals and others who want to exploit the system. I suggest that the way in which the Government have dealt with this area, with a lack of regulation and oversight, has allowed criminals and others to benefit. As the Public Accounts Committee report recently said, waste crime in this country has basically been decriminalised because of the lack of action.

People may ask, “Why is this important?” Well, there is a cost to the public purse through uncollected tax revenue that could support all the things that our constituents want. However, it also funds serious and organised crime gangs, which undercut the legitimate businesses that pay their taxes and follow the regulations. The other factor is the future environmental cost. We do not know what is being disposed of at some sites, so there will be a cost relating to their future degradation, with some requiring remediation. Who will pick up that cost? It will be the taxpayer.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman for securing this debate, because such problems also affect Northern Ireland. I am ever mindful of what he is saying, and I think others will reinforce his points, so is it his intention to ask the Minister to look at legislative change to ensure that the criminal gangs who break the law face punitive fines and imprisonment at a level commensurate with the activity? In other words, do the punishments need to be increased?

[Mr Jones]

I am grateful to the hon. Gentleman for this intervention. The frustration is that we do not need new legislation; we just need Government action to fund and implement the existing powers.

My next point, which will also affect the hon. Gentleman’s part of the United Kingdom, is about the effect on local communities. I know that my hon. Friend the Member for Blaydon (Liz Twist), the hon. Member for Newcastle-under-Lyme (Aaron Bell) and the right hon. Member for Haltemprice and Howden will mention specific examples from their constituencies of where local communities feel powerless to stop the huge environmental damage being done to the area. However, this is not down to any lack of trying by those right hon. and hon. Members, who have campaigned for change for many years.

The PAC report estimates that the cost of landfill tax fraud and waste crime is about £1 billion a year. However, that figure is just like me sticking my finger in the air, because basically no one knows. That is a conservative estimate, and the reason for that, as the report says, is that we have basically given up trying to monitor what is happening.

How does landfill tax fraud work in practice? There are strands to it. The first is the way in which the tax was implemented. There are two rates, and those rates went up between 2008 and 2014. The rate for inert or inactive waste is currently £3.15 a tonne, and the standard for ordinary waste is £98.60 a tonne. The first element of criminality involves saying that waste is inert when it is not. There is no monitoring at all, so people are instantly making a fortune by avoiding taxation. The incentive for misdescription of waste is the huge gap between the two rates. The Environment Agency does not really enforce this, and I am sure that boreholes would reveal that inert-waste only sites will contain other waste. The problem is that we do not know what is in such sites, which is a future environmental problem.

The second strand is illegal sites without a licence, for which there are no real sanctions. People can buy a field or an old quarry and keep filling it, and they do not pay any landfill tax.

The next method is far more sophisticated, whereby criminal elements buy or set themselves up as legitimate waste operators. Is that easy? It is, because there are no restrictions on who can become a waste operator. If someone buys an existing business or a quarry, they can label it and say they are going to collect waste, but who is checking? People can run two scams. They can declare active waste as inert, and they can just declare half of what they are putting in.

Alcohol Duty

Jim Shannon Excerpts

Monday 19th December 2022 Commons Chamber

[James Cartlidge]

I enjoyed meeting the hon. Gentleman, other parliamentarians and alcohol harm stakeholders on, I think, 24 November in the Treasury. It was a good meeting, where I think there was acceptance that we are trying with the reform package to strike that balance. We want to have competitive duty rates and to look at levelling the playing field that exists between pubs and supermarkets, but, equally, alcohol harm and consideration of public health must be at the heart of this. That is why the reform package in August has one underlying principle: taxation on the basis of ABV. We think that that is the right way forward, balancing both those approaches.

[Jim Shannon (Strangford) (DUP)]

I very much welcome the statement. It is good news not simply because the hospitality industry is on its knees, but because the steep increases in prices have led to more people having not a social drink with friends but a sustained drinking at home mentality, which can be detrimental to families. Has the Minister considered taxation aimed at multibuys in supermarkets, in co-ordination with the welcome freeze for pubs and hospitality?

[James Cartlidge]

I am grateful to the hon. Gentleman for his comments. As I said last time he asked me a question, the occupant of the Chair always seems to save the best till last. The hon. Gentleman hit the nail on the head. Let us be clear. He is talking about friends who cannot go for a drink because of economic pressures. With the enormous surge in energy costs and the rise in inflation, the biggest impact economically is on consumption and therefore discretionary spend such as in pubs, hitting hospitality. When we talk about the support that matters, it is not just help for businesses with their energy bills but the help that we are giving to consumers, so that they can still find that expenditure to support our pubs this winter. Of course, we are helping them by freezing duty for six more months. It is a win-win for consumers and for the sector.

Business Rates and Levelling Up

Jim Shannon Excerpts

Tuesday 13th December 2022 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in the debate, Mr Mundell; I thank the hon. Member for Waveney (Peter Aldous) for setting the scene so very well. He and I, and others in the debate today, often join forces to support our communities. His and my communities are similar in their culture and geographical stance, and we share an interest in fishing issues. It is always a pleasure to come along and support the hon. Gentleman. It is also a real pleasure to follow the hon. Member for Torbay (Kevin Foster), good friend that he is. He is back on the Back Benches now, but when we were on the Back Benches before, I used to follow him and he me. To be honest, normally, I follow everybody else—but it was a real pleasure to hear his contribution. I am also pleased to see the Financial Secretary to the Treasury in her place; I know she always generously tries to respond to our requests and I look forward to her contribution.

I think we are all on the same page on this one. I very much support the two hon. Gentlemen who have just spoken and what they are trying to achieve. I hope to be able to achieve that as well. I am pleased to see the shadow Minister, the hon. Member for Ealing North (James Murray), in his place. We are a bit sparse in numbers on this side of the Chamber, but I know that the hon. Gentleman’s contribution will make up for that.

Like many others, I am and was excited about the Government’s levelling-up agenda. I looked at the money for Northern Ireland and imagined how many improvements could be made with that funding. Like the hon. Members who have spoken and who will speak afterwards, I have been concerned that the levelling-up programme seems to gloss over the needs of coastal communities. The hon. Members for Waveney and for Torbay outlined their requests on behalf of their communities. I have not read the speech of the hon. Member for St Ives (Derek Thomas), who will follow, but he will probably endorse what we are saying as well. The hon. Member for Waveney gave his presentation of the subject at the start of the debate. It has been incredible to hear all of them.

As a quick aside, I should say that as I travelled up the beautiful peninsular roads in my Strangford constituency to the airport on Monday, in cool, crisp air, my thoughts were not only on the condition of the roads and their iciness, but on the knowledge that the road verges were getting smaller and smaller each year, giving less space for slippage and increasing the danger of those winding coastal roads. That is part of the reason why I have advocated for levelling-up funds to address coastal erosion concerns. We can have all the wonderful attractions we like, but if villages and roads slide into Strangford Lough, those attractions will mean nothing for those places.

Moving on, I want to highlight the concerns of small businesses. I always give a Northern Ireland perspective in these debates. I believe that it adds to the value of this great United Kingdom of Great Britain and Northern Ireland that we can all come together from four regions to debate these issues and thereby engender support for all businesses in the regions, just as I support my colleagues here in the mainland.

In March 2022, most of the businesses in Northern Ireland—some 89%, or 70,510—were microbusinesses with fewer than 10 employees. Just over 2%, or 1,640 businesses, had 50 or more employees. Almost half of businesses in Northern Ireland—45% or 35,415 businesses—had a turnover of less than £100,000, while 10%, or 8,220, had a turnover in excess of £1 million. When the Government talk about percentages, I presume they are thinking in terms of thousands of pounds, yet the cost for many of these businesses is hundreds of pounds, which could cover the cost of, for example, pens, biros and pencils for their office. Yet, for a small business, these perpetual small increases can be the death knell. When the debate came forward, I was pleased to support it and add a Northern Ireland perspective.

In Northern Ireland, our small businesses pay 30% more for the delivery of products. That is, in part, to do with the Northern Ireland Protocol Bill, but also the movement of goods. They seek to absorb some of the cost, and this finds their profit margin down to 15% to cover all overheads. With respect, the pressure on businesses in Northern Ireland is more acute than it is for those on the mainland. When rates are put up by a few per cent, it can mean business owners working for less than the minimum wage. There is probably more pressure today than there has been for a long time, so again this debate is relevant to my constituents and businesses in Strangford.

Another struggling demographic is pubs. I support what both the hon. Members for Waveney and for Torbay said and will give my own perspective. Pubs pay more in business rates per pound of turnover than any other business. Both hon. Members referred to the hospitality sector, and that is a sector we are concerned about. I know we always come asking for things, but it is the nature of life that we seek to illustrate in these debates where our constituents are coming from. What help can the hospitality trade be given? I know the Government have helped in many cases, so this is not a criticism—I am not in the job of criticising; I am in the job of trying to find solutions, as others are.

The business rates bill for the sector accounts for 2.5% of total business rates paid, despite only representing 0.5% of total rateable turnover—an overpayment of £570 million. When the hon. Member for Waveney introduced the debate, he clearly suggested that the rates for the hospitality sector, including pubs and restaurants, need to be substantially reviewed, because the overpayment does not reflect a fairness in the system. It is time to look at that.

The draft ratings list for 2023 to 2026 shows pubs’ rateable values falling on average by 17%, which will start to address the overpayment, but there is still a long way to go, and we should look to the immediate concern. The extension of, and increase in, the hospitality business rates relief for 2022-23 was therefore extremely welcome. I always think we should give credit where credit is due. The Government have made some substantial moves, and it is important that we recognise that. The freezing of the multiplier and the abolition of the downward transition on relief were also welcome.

However, the decision not to bring forward—this is one of my requests for the Minister—the online sales tax to offset the cost of pub rates and provide for a fundamentally fairer business tax regime for the digital age was disappointing. I ask the Minister to see whether that request could be looked at. It is important because it is one of the solutions. In these debates, the hon. Member for Waveney always sets out how we can do things better, and that is incredibly helpful. The current business rates system remains unbalanced. I join the British Beer and Pub Association in urging the Government to bring forward meaningful reforms that level the playing field.

I will use a pun, which I think the hon. Members for Waveney and for Torbay, who spoke before, and the hon. Member for St Ives, who will follow, will perhaps appreciate, as they all come from coastal constituencies. Levelling up only works if the rising tide raises all ships and does not leave the essential but smaller craft marooned behind the yachts that are already away. It is about bringing the other ones on board—the smaller businesses, who are under incredible pressure. I ask again for greater consideration on those issues. I know the Minister will do all she can to try to address that.

--- Later in debate ---

[Victoria Atkins]

Goodness me, I would not pretend to have an intimate knowledge of the economics of Torbay. My hon. Friend knows his constituency extremely well, but the realistic fact is that businesses in his high street have to pay taxes of some sort. That is why we have tried to mould the business rate support package to help the businesses that need it the most, which we recognise are those in the retail, hospitality and leisure industry. I will come on to that particular support, which is a very generous package that I hope will be of great benefit to businesses in his constituency.

We have a duty to ensure that the business rates system is fair and responsive, while raising sufficient revenue to support the public services that I have already talked about. Since 2017, when the Government doubled the 100% small business rate relief rateable value threshold from £6,000 to £12,000, a third of properties in England have paid no business rates whatever. In my own constituency, I know of many properties in my market towns that pay no business rates precisely because of that protection and they are, I hope, thriving as best they can as a result.

The Government provided £16 billion in business rates relief for the retail, hospitality and leisure sectors during the pandemic because it was such a difficult time for them when the economy was essentially closed down. That was an unprecedented level of support for the high street, on which so many communities depend. From my own constituency, I know how vital that support was in keeping businesses’ heads above water during the lockdowns. The Government also provided a £1.5 billion covid additional relief fund for businesses that were affected by the pandemic but which were not eligible for other reliefs. Local authorities, due to their knowledge of their local areas, were responsible for designing and establishing those schemes. Progress has been in line with our expectations, and final distribution data will be published on gov.uk shortly.

As the Chancellor stated in the autumn statement last month, it is an important principle that revaluations should reflect market values. Hon. Members have emphasised that point during the debate. The 2023 revaluation will therefore go ahead. From April 2023, all rateable values will be updated for all non-domestic properties, with evidence from April 2021. This will mean initial bills will reflect changes in market conditions since 2015, and will ensure a fairer distribution of the tax burden between online and physical retail.

The hon. Member for Strangford asked me why the Government have not introduced an online sales tax. He will know that we launched a consultation on the issue earlier this year. We received many responses, which will shortly be published, but it is fair to say that there was not unanimity. Indeed, there was not even agreement—I would not put it as highly as that—as to what such a tax should look like, because many of even the smallest businesses on the high streets of our constituencies now have some form of online presence. It may not be the main part of their business—that may be the shop—but, understandably and laudably in the 21st century, they are trying to diversify by having an online business.

Nobody could quite see how we could differentiate between the enormous multinationals that we are all keen to ensure pay taxes and those microbusinesses that my hon. Friend the Member for Waveney described so well. That is why in the autumn statement the Chancellor decided against an online sales tax, with the important caveat that the changes we are making to business rates, including with the revaluations, will mean that the distribution warehouses, which supply the multinationals that we are all keen to ensure pay their proper taxes, will see significant rises in their bills while we also protect the shops and microbusinesses to which he referred.

[Jim Shannon]

That is a very helpful response, as always; I expected nothing less. I will take the Minister’s point of view out of Hansard and give it to some microbusinesses in my constituency that have asked me these questions. I understand there is a wish for this revaluation to happen, and I understand the difficulties and complexities the Government face to get it over the line. If I could come back to the Minister directly with some thoughts, maybe we could see if we could review it in a positive way.

[Victoria Atkins]

Of course. I am always delighted to hear from the hon. Gentleman. He will appreciate that there are many other factors; for example, click and collect was a stumbling block for many in the consultation. I look forward to his future correspondence.

The support package that we have introduced means that the revaluation will go some way to addressing the imbalance between online and offline retailers. On average, large distribution warehouses will see an increase in bills of about 27%, and bricks and mortar retailers will see decreases of about 20%. We recognise that business rates payers may feel uncertain about the upcoming revaluation, given other pressures the country is facing that are driven by global challenges.

Rising prices around the world, made worse by Russia’s illegal invasion of Ukraine, have hit businesses hard. In the autumn statement we announced the steps that we will take next year to provide support through these difficult times. We will deliver a business rates support package worth £13.6 billion over the next five years. That will protect businesses from facing large bill increases because of high inflation and rateable value increases following the revaluation.

My hon. Friend the Member for Waveney urged the Treasury to cut the UBR to the 1990 level of 35p, showing the trade-offs that the Government must make. Doing so would cost £9 billion a year, which would be a significant potential loss to the public revenue. We have thus taken the steps we have through the support package to protect ratepayers from high inflation, and we are instead freezing the tax rate for three consecutive years at a cost of £14.5 billion.

My hon. Friend the Member for Torbay (Kevin Foster) described the vibrant hospitality sector in his constituency. We are extending and increasing the retail, hospitality and leisure relief scheme from 50% to 75%, up to a cash cap of £110,000 per business. Pubs and the holiday parks he referenced are included.

Russia: UK Companies

Jim Shannon Excerpts

Wednesday 7th December 2022 Commons Chamber

[James Cartlidge]

The hon. Gentleman asks an interesting question, knitting together two points. To be fair to him, I have to say that he has consistently attended all the recent Treasury debates at which I have been present. I am grateful to him for that.

We should not confuse divesting and investing. We are clear that there is an outright ban on investing in Russia: the Prime Minister said back in March, when he was Chancellor, that there was “no case” for such investment. Divestment is happening. It is a process that for some companies will take time, but I think we are all clear that we want to see it happening.

The hon. Gentleman is absolutely right to highlight the windfall tax. While it will raise more than £40 billion to support our economy, help us fund public services and, above all, support people with energy bills this winter, it does have a generous allowance. Let me be clear about the reason why, which goes back to my answer to my hon. Friend the Member for Barrow and Furness (Simon Fell): while we want to raise funds from the levy, we also want to incentivise investment in energy security. Ultimately, the long-term answer to the question of how to defend ourselves against being held to ransom over energy prices is by ensuring our energy security for the future.

[Jim Shannon (Strangford) (DUP)]

I thank the Exchequer Secretary for his answer to this urgent question. It is clear to me and to the House that he is doing his best to address the issue in a firm way.

We have seen not only the continued involvement of UK companies in Russia, but the ongoing involvement of Russian companies and kleptocrats in infiltrating UK companies potentially to commit fraud. What steps will the Exchequer Secretary take to ensure that UK companies are discouraged from any involvement with the Russian economy and ensure that a harder stance is taken to protect our economy from the promotion of economic crime and infiltration by Russia itself?

[James Cartlidge]

As ever, Mr Speaker, you have saved the best till last. I am grateful to the hon. Gentleman for his kind words. There is a legal side to protecting our economy—the sanctions regime protects it from the impact of sanctioned individuals and companies—but I think the most important way to protect our economy is by providing support this winter to our businesses and constituents, including constituents in Northern Ireland. We will be bringing forward many energy schemes with specific application in Northern Ireland; I know that he takes a keen interest in them. We are working with BEIS to ensure that we deliver those programmes in Northern Ireland, as well as in the rest of the United Kingdom. The hon. Gentleman makes an excellent point. Ultimately, we are supporting not just the people of Ukraine, but our businesses and our constituents.