Levelling-up Fund Round 2

Debate between Lucy Frazer and Richard Burgon

Thursday 19th January 2023 Commons Chamber

[Lucy Frazer]

I am very grateful for my hon. Friend’s good advice, because those who were unsuccessful in round 1 have been successful in round 2. Round 3 is coming up and I look forward to announcing further funds in due course.

[Richard Burgon (Leeds East) (Lab)]

This has been another kick in the teeth for the people of Leeds from this Conservative Government. After cuts totalling £2 billion to Leeds City Council’s funding since 2010, a bid to redevelop Fearnville sports centre in my constituency has been rejected yet again. All six bids from Leeds were rejected. There are zero pounds for Leeds, while in the Prime Minister’s wealthy constituency up the road, there is £19 million for him. Is it not the case that what this is really about is not levelling up, but Tory favouritism and the Tories looking after their own? Leeds deserves far better.

[Lucy Frazer]

As someone who grew up in Leeds, I think it is a great area. It has had significant regeneration over the years, which I have seen at first hand. Of course, further generation would be welcome. On the point about Opposition parties, I reiterate that 45% of the funding has gone to Opposition areas.

North Sea Oil and Gas Producers: Investment Allowances

Debate between Lucy Frazer and Richard Burgon

Monday 6th June 2022 Commons Chamber

[Lucy Frazer]

The points that my hon. Friend makes are set out in the energy security strategy, because we recognise that the North sea will still be a foundation of our energy security. It is right that we continue to encourage investment in oil and gas as we transition to renewables. My hon. Friend is right that the sector, along with many others, provides important jobs for people in the areas where generation is taking place.

[Richard Burgon (Leeds East) (Lab)]

The additional tax breaks given to oil and gas firms mean that the Government are handing billions over to the very companies that are driving up people’s bills and fuelling climate change. That is money that could have been used to insulate 2 million homes, saving each household £340 every year. Are these tax breaks for more fossil fuel producers not the very opposite of what is needed to protect the planet, end our reliance on expensive gas and, crucially, invest in insulation that could get bills down?

[Lucy Frazer]

With the greatest respect, I think that the hon. Member misunderstands the policy. What we are introducing is a significant tax on the oil and gas sector that will fund the most vulnerable, so it is the firms handing money over, as he puts it, to us. We have said that we recognise that companies should invest, because it is good for jobs, good for investment, good for our competitive industries and good for our energy security for the future. We have recognised that we will give tax reliefs if that investment is made.

Finance (No. 2) Bill

Debate between Lucy Frazer and Richard Burgon

Committee stage
Wednesday 1st December 2021 Commons Chamber

[Richard Burgon (Leeds East) (Lab)]

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

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

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

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

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

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

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

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

[Lucy Frazer]

I will take the opportunity to respond to some of the points that have been made on the Bill, and I will start with those made by the hon. Member for Ealing North (James Murray). He started by suggesting that there was not a sufficient growth rate in the economy, but what the Budget documents show and the OBR has said is that there will be growth year on year for every year in the Budget forecasts.

The hon. Gentleman asked me to come back to him on cutting taxes for banks. I do not think he heard some of the points I made in my speech, because I did mention that the tax the banks are paying is not actually reducing, but increasing. I think he did not hear me say that they will be paying an additional £750 million in tax over the period to 2026-27, based on current forecasts.

The hon. Gentleman talked quite a lot about fairness—fairness to working people—and he suggested that the rise in the dividend payment was not fair. I do not accept that. What we have calculated is that the additional higher rate taxpayers are expected to contribute over three quarters of the revenue raised by this measure next year. It is interesting to note that the Resolution Foundation thought that this measure was indeed fair. It said that it welcomed the

“moves to address some of the fairness problems”

that came with choosing to focus on the tax increase on national insurance by raising dividend taxation.

The hon. Gentleman asked me a specific practical question on what support will be provided to traders who are affected by basis period reform, and I am very pleased to get back to him on that. I would like to reassure him that more than 80% of affected businesses are represented by a tax agent, but HMRC is currently exploring how best to help unrepresented taxpayers through basis period reform.

The hon. Member for Gordon (Richard Thomson) rightly talked about the importance of getting to net zero. He will know—he will have attended many debates in this House and I am sure he will have read our net zero strategy—about the emphasis the Government place on net zero. He talked about his work in Aberdeenshire, so I hope that he welcomes the investment we have made in that area in Scotland. We continue to deliver on important existing commitments in Scotland, including £27 million for the Aberdeen energy transition zone and £5 million for the global underwater hub, which will help support Scotland’s standing as a world leader in clean energy.

The hon. Gentleman also mentioned the important issue of playing by the rules, which Conservative Members think, as he does, is very important. I am sure he will be pleased to know that, since 2010, the Government have introduced over 150 new measures and invested over £2 billion extra in HMRC to tackle fraud.

The hon. Member for Edinburgh West (Christine Jardine) mentioned the cost of living. Obviously, many of the spending measures are in the spending review, rather than in the Finance Bill, so I hope she will not mind my mentioning some of our spending measures. The significant tax cut for people on universal credit, and the raising of the national living wage, are two measures that are really helping those on lower incomes.

Oral Answers to Questions

Debate between Lucy Frazer and Richard Burgon

Tuesday 14th July 2020 Commons Chamber

[Richard Burgon (Leeds East) (Lab)]

What plans he has to improve links between probation services and (a) local employers, (b) adult education colleges, (c) health authorities and (d) jobcentres.

[The Minister of State, Ministry of Justice (Lucy Frazer)]

Joining up probation to other community services is critical. The new model for probation will allow us to build on local links that have already been forged. In the future probation system, more than £100 million a year will be spent on specialist rehabilitative and resettlement services, including education and employment.

--- Later in debate ---

[Lucy Frazer]

Like the hon. Member, I pay tribute to the dedicated work of all those who have been working in the community rehabilitation companies across the country and, indeed, the National Probation Service. I welcome the work of the CRC in her area. As I mentioned, £100 million has been put forward for the new scheme—the dynamic framework, which has already been launched—so that local voluntary sector and private companies can bid to provide local services in communities. I look forward to seeing their bids.

[Richard Burgon [V]]

The Government were warned repeatedly that privatising probation would be a disaster—that it would cost more and leave the public less safe. The Government not only ignored those warnings but spent years ignoring the mounting evidence of their failed policy. They have practically had to be dragged kicking and screaming to finally agree to reverse this catastrophic privatisation. If they are finally going to properly sort out rehabilitation, is it not time to end, once and for all, the racket of mega-corporations like Sodexo, Serco and G4S profiting from our prisons and probation services?

[Lucy Frazer]

We believe that we should provide good services, whether that is by the public sector or by the private sector. We have in operation some excellent public service prisons, as we do some excellent private sector prisons. We are very pleased that we are integrating probation into the public service, providing a very important role, but we will continue to ensure that private sector companies and local voluntary sector companies can bid for rehabilitative services through the £100 million dynamic framework.