Budget Resolutions

Richard Foord Excerpts

Tuesday 12th March 2024 Commons Chamber

[Richard Foord (Tiverton and Honiton) (LD)]

With four days to spend debating one single fiscal event, it would be easy to enter into Westminster village debates. Instead, ahead of the Budget I spent several days knocking on doors in villages in my Devon constituency to hear what rural residents wanted the Chancellor to announce. The feedback I got was plain: they cared not about jibes from the Dispatch Box but about saving our public services and infrastructure, including our roads, which are crumbling before our very eyes—a metaphor for public services in general. It is little wonder that people ask me, “If this Government cannot even stop the roads from falling apart, how on earth can they claim that things are getting better?” It is little wonder that the erosion of our roads has been mirrored by the electoral erosion of the Conservative party. Many of the people I spoke to in Devon regard this Government as having little left in the tank. It is little wonder that conspiracy theories are on the rise: people in the west country could be forgiven for thinking that potholes are a deliberate, affordable alternative to 20 mph signs and speed bumps.

This Budget was such a disappointment. There are more holes in it than in the A373 between Honiton and Cullompton. It contained little in the way of support for frontline NHS and care services. It is ironic that when national insurance was introduced by a Liberal Government in 1911, its purpose was partly as a safety net to catch people experiencing ill health. The Liberal Government who introduced it required contributions from employers and the state, as well as the individual.

The Chancellor’s flagship measure—the national insurance cut—failed to deliver any help for pensioners or those on fixed incomes in the way that a rise in the income tax threshold could have done. Instead of long-term investment, the Government chose a series of quick patch-up jobs that brush over the latest crisis, rather than taking the time to fill in their holes properly. The Government need to understand that funnelling every last available penny they could scrape together into a national insurance cut will not turn things around.

The average pothole-related breakdown will set drivers back around £440. That is the same amount that someone might have got back from this national insurance cut. One trip down a poorly maintained road and all those savings are gone in a bang, as the driver shreds a tyre on the edge of a crater. I am reminded of driving through the streets of former Yugoslavia in an Army Land Rover 20 years ago, where avoiding a collision in Kosovo required a Land Rover Defender; increasingly, it is also a requirement in Culmstock, Colyton and Combe Raleigh.

If small businesses are the engines of our local economy, investment in our road network is the lubricant in rural areas such as Devon. The roads are the ribbons that connect our towns and villages. In recent years, many have become impassable. Almost every single week, my postbag is flooded with correspondence about potholes. I fear that if I were to plot them on a map, those reported across mid and east Devon would hardly leave any road left. They are certainly one of the things that people are most annoyed about. That is why the £6.6 million announced for Devon’s roads is nothing more than a smokescreen. It goes nowhere near what is genuinely required to fix the underlying problem.

It is not just me saying that. The Conservative leader of Devon County Council, John Hart, who is ultimately responsible for the maintenance of our roads in Devon, says the funding is a “drop in the ocean”. He went on to say that while the council was given an extra £9.5 million for roads last year, £7 million of that repair money was immediately eaten up by inflation. Last April, the council was forced to announce that it only had the capacity to maintain priority roads, allowing other vital roads to endure a “managed decline”. This is a shameful state of affairs. It says something when getting on a horse and riding over the rolling hills of Devon may be the best way of traversing our county for the first time in over 100 years. Figures from the Department for Transport lay the issue bare—these statistics just cannot be argued with. Just 18.6 miles of roads in Devon had improvement work done in the year to March 2023, down from 273.6 miles five years ago, all under the Conservatives’ watch.

The Budget was a missed opportunity. The Government know that they have lost the race and are now simply limping to the finish line. The people of Devon deserve so much better. They demand better. They know that, in the rural areas of the west country, the only way to get it is to vote Liberal Democrat.

UK Economy

Richard Foord Excerpts

Monday 19th February 2024 Commons Chamber

[Bim Afolami]

I do not agree with the hon. Lady. I will not repeat everything I just said to the hon. Member for Ellesmere Port and Neston (Justin Madders), but this Government and this Treasury are sticking to our plan for growth. That is all put at risk by the Labour party.

[Richard Foord (Tiverton and Honiton) (LD)]

The Office for Budget Responsibility assessed Boris Johnson’s trade and co-operation agreement, which sets out the trading relationship between the UK and the EU, at the beginning of last year, and it said that the TCA has reduced long-run productivity by 4%. Why does the Minister think that is?

[Bim Afolami]

We built on the trade and co-operation agreement through the Windsor framework, and the Opposition do not propose to change it. Indeed, the TCA is fundamental to the stability of our relationship with the European Union, and I do not think the country would benefit from unpicking it once again.

Hospitality Sector: Fiscal Support

Richard Foord Excerpts

Wednesday 31st January 2024 Westminster Hall

[Alyn Smith (Stirling) (SNP)]

I beg to move,

That this House has considered fiscal support for the hospitality sector.

We always say that it is a pleasure to see you in your place, Ms Bardell, and it is this morning; thank you for looking after us. I thank colleagues from all points of the compass for their support on a subject that is close to my heart: fiscal and other support for the hospitality sector—by which I mean on-trade pubs, restaurants, cafés, hotels, and bed and breakfasts. I am grateful to the Scottish Licensed Trade Association, the Scottish Beer and Pub Association, the Scottish and UK hospitality organisations, Castle Leisure Group, Greene King, and several dozen businesses in rural and urban Stirlingshire for helping me to prepare for the debate. I also thank Paul Anderson and Matt Gower from my office, as well as the House of Commons Library, which has produced a number of useful briefings that I commend to colleagues.

This issue is not easy, but I will be up front with colleagues. Am I looking for special treatment for the hospitality sector? Yes, I am: these businesses need and deserve it. They need it because of the unprecedented economic times that we are living through, and they deserve it because they are a part of not just our economy, but our society; they are community hubs at a time when we face an epidemic of post-covid loneliness, and they contribute to our sense of place and keep our high streets busy. As well as urban Stirling, I represent a number of rural communities, which turn into dormitories once the pub goes. That is not a sustainable future for those communities. Hospitality businesses promote social mobility. How many of us—myself included—had a first job waiting tables, pulling pints or doing dishes? Hospitality provides flexible employment that keeps a lot of people engaged in the workplace who might otherwise not find jobs that suit them. These are good, sustainable jobs, and great careers.

Hospitality businesses are also significant for the economy. The stats are vital: the beer and pub sector accounts for 936,000 jobs and contributes £26 billion to the UK economy; in Scotland, it accounts for 62,000 jobs and £1.8 billion in tax receipts. According to UKHospitality, the wider hospitality sector employs 3.5 million people in one form or another, and generates £54 billion in tax receipts. These businesses are at the sharp end of an economic crisis that is not of their making. They are at the sharp end of the post-covid slump, an energy cost spike and insurance cost rises. They face labour shortages and costs due to Brexit. Now, I do not blame Brexit for everything, but it has made everything worse, and we need to deal with its consequences, which hospitality businesses are living with right now. They also have lower footfall, because in the cost of living crisis everybody is cutting back on discretionary spend. They are dealing with a perfect storm, and they need more help.

During covid, we proved that we can act fast, as we did with the VAT cut and eat out to help out, with all its issues; we demonstrated that we could move fast when a demonstrated emergency was under way. For our hospitality businesses, there is still an emergency under way. I am supportive of the Scottish Government, although I am not part of it; I am clearly in opposition here, though I hope I am a constructive Opposition Member. I am bringing some ideas to the Minister, and look forward to his response. I am also not a part of Stirling Council. I am aware that budgets in all places are under real pressure, but I am calling for support because I am dread afeard that, unless we act, a number of these good, sustainable businesses will not make it through to the better times, when they do come, and that all those revenues and social benefits will be lost. Across my constituency, there are a number of great businesses, but they need help to make it through. It is up to all of us, in all our places, to put the badges to one side and work together to support these crucial organisations.

What am I calling for? I will be brief to allow colleagues to speak. First, if hon. Members remember only two words from me today, they should be “cut VAT.” I would cut VAT on food, soft drinks and alcohol to 5%. Of course, that is a big ask. I know the fiscal situation for the UK, Scotland and local government, but cutting VAT would be a clean and immediately effective way of supporting those businesses’ bottom line. It would be directly linked to turnover, so if a business is not doing much business, it will not get that much benefit, and if it is, it will. It would not require any complex architecture or bureaucracy and would not need much to administer. It would be an effective way to boost growth and help these businesses survive.

In other countries, a VAT cut would not be unusual. VAT on accommodation is 10% in Austria, 6% in Belgium and 9% in Cyprus. VAT on restaurants is 13% in Croatia, 5% in Hungary and 10% in Italy. Of course, it is not quite like for like, but the UK is taxing this sector far more than other European countries do, and I think we need to boost and celebrate it, not tax the bejesus out of it from all parts of Government.

Speaking of which, we need business rates reform. To be clear, I was glad that the UK Government temporarily cut business rates in England. I called for the Scottish Government to pass that on, and I regret that they did not, but let us remember that it was just a one-year suspension and the actual problem is that business rates are not fit for purpose in any of our countries. That outdated system is creating perverse incentives for a lot of good businesses. Of course, local government needs to be supported, but we need to find a better way to do that. Tom Arthur, the Scottish Minister, has been proactive in engaging with business across Stirling and elsewhere. He acknowledges the problem—but business rates are crippling a lot of businesses, and we need urgent reform in all our countries.

[Richard Foord (Tiverton and Honiton) (LD)]

I am very grateful to the hon. Gentleman for making that point about business rates reform. I have just pulled up the Midweek Herald, in which a pub that closed fairly recently, the Honiton Inn, is advertised at £395,000, but before the advert says anything about the pub, it says, “Business rates may apply”. Does he agree that business rates on pubs are deterring new tenants from taking over?

Bank Profits: Windfall Tax

Richard Foord Excerpts

Wednesday 6th December 2023 Commons Chamber

[Richard Burgon]

The hon. Member makes an important point. The example he gives of the closure of so many high-street banks, which disadvantages people in my community as well as in rural communities, just goes to show that the banks’ huge increase in profits has not been achieved through delivering a better service to consumers at all. Higher interest rates have not been passed on to savers; they have been hoarded by the banks, creating a windfall for them of many billions for doing nothing productive.

Such a transfer from the public to banks would be unjustifiable at any time, but it is especially so when so many people are struggling to cover the essentials and our public services are on their knees due to Tory cuts. The banks should face the same type of tax on their unearned and underserved windfalls as the energy companies.

The pre-tax profits of the big four banks—Lloyds, Barclays, HSBC and NatWest—show why that would be a just tax. In the first nine months of 2023, they made a staggering £41 billion in pre-tax profits, which is almost double the £23 billion they made in the same period last year, according to research by Unite the union. The question we must answer is this: will we allow the Government to claim that more austerity and cuts are inevitable and that public investment is unaffordable, or are we to build a better tax system that focuses on making the wealthiest pay their fair share?

[Richard Foord (Tiverton and Honiton) (LD)]

On that point about a better tax system, my understanding is that business likes certainty and that banks, like businesses, need to be able to predict the future fiscal regime, but earlier this year this Conservative Government cut the bank surcharge from 8% to 3%. So rather than a one-off windfall tax, would it not be better to reinstate the bank surcharge at 2016 levels, reinstate the bank levy at its previous rate from earlier this year and so have an additional £18 billion for His Majesty’s Revenue and Customs between now and 2027?

[Richard Burgon]

The hon. Member makes a valuable intervention. I will come to how it was unjustifiable for the Government to reduce the surcharge in that way. Both approaches are possible and desirable, with yes, a windfall tax, but also reversing that cut.

If we build a fairer, better tax system that focuses on making the wealthiest pay their fair share, we can invest in rebuilding the economy so that it serves the majority of people, we can invest in renewing our public services, and we can give people back some hope. A windfall tax on unexpected and undeserved bank profits can play an important role in creating that fairer tax system. Banks are not reinvesting their profits in the economy; they are handing out huge pay and bonuses, which could go even higher, aided and abetted by the Government’s decision to scrap the bonus cap.

That all comes at a time when the banks are turning their backs on local communities. As the hon. Member for Strangford (Jim Shannon) mentioned, bank branches have been disappearing from our high streets at an alarming rate. Since 2015, almost 6,000 branches have permanently closed their doors. At a time of deepening social crisis, while banks collect record profits, they have made it even more difficult for working people to access their finances and get financial advice.

--- Later in debate ---

[The Economic Secretary to the Treasury (Bim Afolami)]

I congratulate the hon. Member for Leeds East (Richard Burgon) on securing this debate. He is an assiduous attender in the House, he cares a lot about these issues and I respect him deeply. In particular, I love his conversion, like that of his very good friend the Leader of the Opposition, to quoting and loving Margaret Thatcher. I cannot wait to hear the reports of how that goes down when he visits his local Labour party at the end of the week.

I am pleased that this debate provides me with an opportunity to set out the measures that the Government have already taken to ensure that banks make a fair and sustainable tax contribution, but before I get on to that, I cannot resist dealing with some of the points that the hon. Gentleman made about the economic context in which this country finds itself. He mentioned economic growth. It is important that he recognises that when they assessed the autumn statement that the Chancellor recently delivered to the House, the Office for Budget Responsibility and independent forecasters said that the pro-growth measures it contained represented the largest boost to economic growth over the forecast period of any fiscal event in a generation.

I think the hon. Gentleman said that austerity and public sector cuts were somehow inevitable, and that somehow the Treasury, Chancellor and Government felt that that was a good thing. We completely reject that characterisation. All I would say is that borrowing an extra £28 billion, as proposed by his Front-Bench team and the shadow Chancellor—I do not know whether it is the hon. Gentleman’s idea or proposal—will end up raising inflation and raising interest rates, which is what makes austerity and cuts more likely.

Let me deal with the real substance of the hon. Gentleman’s remarks on the banks and a windfall tax. First, it is important to highlight that financial and related professional services are a vital part of the UK economy. They employ nearly 2.5 million people, two thirds of them outside London. Indeed, I am sure that the hon. Gentleman has many members of Leeds’ thriving financial and professional services sector in his constituency.

As I laid out to TheCityUK’s national conference earlier this month, I am committed to delivering the Chancellor’s vision for a financial services sector that is open, sustainable, innovative and competitive, while also acting—this is very important—in the interests of communities, people and citizens all across our four nations. I urge the hon. Gentleman to consider my view and the Government’s view that such ambitions do not contradict each other; rather, it is the UK’s globally competitive financial services sector that supports jobs throughout this country and underpins access to finance—for individuals if they want to buy a home, for households, for businesses that need to borrow to expand and invest, and for consumers throughout the country.

Before we consider the potential merits of a bank windfall tax, I want to reflect on some of the bigger picture in respect of the health of the UK banking sector as a whole. We should be encouraged to see a strong, well-capitalised and competitive banking sector in the UK, in no small part owing to the significant regulatory and market reforms that have been implemented since the global financial crisis. Banks are the most important source of credit, providing individuals and businesses with the financial resources to succeed. For example, in 2022 banks lent a total of £65.1 billion to small and medium-sized businesses, which make up the majority of businesses in our country, and helped 370,000 first-time buyers on to the property ladder. That illustrates that these institutions are not in the pockets of fat cats; they serve the nation. They serve ordinary working people and early-stage entrepreneurs and businesspeople.

In addition, the retail savings market currently offers a range of competitive options to savers, who can now access the highest rates in recent years on a variety of instant-access and fixed-term products. The hon. Members for Strangford (Jim Shannon) and for Leeds East brought up the issue of bank branches, and I share their view that we need to maintain access to cash for rural communities. Indeed, the hon. Member for Leeds East will see from me and this Government that we believe we should speed up and spread banking hubs throughout as many of our communities as possible.

[Richard Foord]

I opened one of those banking hubs a fortnight ago in Axminster. I agree with the Minister that it is fantastic to see those facilities and I know my constituents are very grateful. When will we see the opening of the next tranche, such as a banking hub for Sidmouth?

[Bim Afolami]

This is a rolling programme. We are trying to speed it up and in due course there will, of course, be changes and updates to it.

It is equally important that banks make an equitable and sustainable tax contribution, and the Government have taken significant steps since 2010 to ensure that. First, as the hon. Member for Leeds East knows, we introduced the bank levy in the wake of the financial crisis. It was designed to encourage banks to move away from risky funding models and ensure that they make a fair contribution. The levy has raised vital revenue to help fund the public services we all rely on—over £28 billion so far—and, long after the financial crisis, it continues to bring in over £1 billion a year.

Secondly, in 2016 we introduced the bank corporation tax surcharge. Banks currently pay an additional 3% rate of tax on their profits, which, when combined with standard corporation tax, means that banks pay more tax on their profits—we would not know it from the hon. Gentleman’s speech—than most other businesses, and a higher overall rate than when the surcharge was at 8%. The surcharge has raised over £13 billion and continues to bring in over £1.3 billion a year. We have also taken action to prevent banks from claiming tax relief on losses incurred during the financial crisis or on compensation payments for payment protection insurance and other cases of misconduct.

This money is the public’s money. These measures help to support the needs and ambitions of our country’s citizens when it is appropriate for the state to do so. I know that that is why the hon. Gentleman is so keen to see a windfall tax introduced. I share his concern for supporting the interests of his fellow citizens, but the measures I have outlined demonstrate how the Government already ensure that banks make a fair and sustainable tax contribution.

Having outlined how our current approach has generated significant tax revenue for the UK, I want to conclude by turning to how deviating from the approach I have set out—for example, by adopting a windfall tax as the hon. Gentleman suggests—would carry significant risk for the health and competitiveness of our banking sector, which in and of itself would be a significant risk for the health and competitiveness of our economy.

A jurisdiction’s overall tax burden clearly informs decisions made by internationally active banks about where to operate. It is also clear that other international financial centres, which are our competitors, recognise that too. I want to be very clear that a higher level of bank taxation in the UK would significantly worsen our competitive position in relation to key global financial hubs in the US, Asia and Europe. It would have a threefold negative impact. First, it would put existing jobs at risk. Secondly, it would damage the chances of future jobs being created through new activity being set up. Finally, rather than raising significant yield for the Exchequer, I fear that it would have the opposite effect; it would jeopardise the considerable tax revenue that is already generated by the banking sector.

The banking sector’s contribution to the UK’s economy should not be underestimated. The amount of tax paid by banks is rightly proportionate to that contribution. Let me be clear: the Government still maintain that the sector should continue to make a fair and sustainable tax contribution. We have taken steps since 2010 to ensure that. It is no contradiction to say that we need a strong and competitive banking sector that supports individuals, households and businesses, because that has foundational importance to our economy.

Question put and agreed to.

Oral Answers to Questions

Richard Foord Excerpts

Tuesday 14th November 2023 Commons Chamber

The Chancellor of the Exchequer was asked—

[Richard Foord (Tiverton and Honiton) (LD)]

1. What assessment he has made of the potential impact of maintaining the pensions triple lock on the economy.

[The Chief Secretary to the Treasury (Laura Trott)]

As a result of the Government’s triple lock, the basic state pension is now more than 50% higher in cash terms than it was in 2011. The Secretary of State for Work and Pensions is undertaking his review at the moment, and I cannot pre-empt that.

[Richard Foord]

Now that Lord Cameron has returned to the Cabinet, it is probably a good time for us to remember that the pensions triple lock was a Liberal Democrat initiative. The 2010 Liberal Democrat manifesto said:

“We will uprate the state pension annually by whichever is the higher of growth in earnings, growth in prices or 2.5 per cent.”

Given that the triple lock has now been operational for more than a decade, will the Chancellor and his team commit to putting the triple lock in the next manifesto?

[Laura Trott]

Nice try. The triple lock was a Conservative invention, delivered by the Conservatives, and it is something to which we remain committed.

Local Bank Branch Closures

Richard Foord Excerpts

Tuesday 5th September 2023 Commons Chamber

[Amy Callaghan]

I will answer the hon. Member’s question in a second, but it is certainly not rhetoric to say that the Tory Government have not stepped up anywhere near enough to support our communities and people who are struggling through the cost of living crisis. We need local bank branches. Hubs are an alternative, though they are not good enough, but I welcome his point of view.

We would be lucky to have as many bank branches open in our constituencies as have closed in the recent years. At least 265 local branches are set to close this year alone, and 62 parliamentary constituencies are down to one or no local banks. The UK has lost over half its bank network since 2015, which speaks volumes after 13 years of Tory rule. How many more banks do we have to lose before the Minister kicks into gear?

[Richard Foord (Tiverton and Honiton) (LD)]

On the point about having lost over half the banks in the UK since 2015, I would like to go over the figures. Does the hon. Lady recognise that over 5,700 branches have closed since 2015 or are set to close, leaving only 4,000, at a time when banks are pulling in record profits?

[Amy Callaghan]

What is most despicable about this situation is that banks have record profits, but are not investing them in our communities. Our constituents, particularly those who are vulnerable, need banks to maintain their presence on our local high streets. It is incumbent on Government to act and to incentivise banks to have a high street presence.

Finance (No. 2) Bill

Richard Foord Excerpts

Report stage
Tuesday 20th June 2023 Commons Chamber

[Priti Patel]

I thank my hon. Friend for his support for the amendment and for his comments. As we have discussed previously—I was going to touch on this—the United States is not in a position to introduce the policy. It is a fact—politics in the US is like politics here or anywhere in the world—that the Republican party has made it abundantly clear that it will not allow this policy to go through. It wants to go further and to bring in legislation that will put retaliatory measures in place against countries that impose the new tax and burdens on US businesses and multinationals.

Returning to the amendment, I will come on to some specifics with regard to the dialogue I have been having with the Minister and the Chancellor on this subject. It is right that we scrutinise the policy, which the amendment seeks to do. It is right for the Government to pursue international agreement to address the complex tax arrangements, which hon. Members have referred to, that exist with multinational corporations and businesses operating in multiple jurisdictions. That is vital and makes sense.

[Richard Foord (Tiverton and Honiton) (LD)]

On the point about multinational corporations, does the right hon. Member think that it is right that we treat multinational corporations that produce oil and gas in a different way from the way we treat renewable energy companies, including companies that produce renewable energy and invest in renewable energy projects? At the moment, it seems that the energy profits levy treats those things in different ways. Will she be supporting Liberal Democrat amendments to the Bill to encourage investment in renewable energy projects?

[Priti Patel]

I thank the hon. Gentleman for his comments. I would rather businesses had zero taxation policies. I should declare an interest: when I was a Treasury Minister many years ago, I undertook the fiscal review of oil and gas. Frankly, we need to do everything to stimulate investment in both oil and gas and renewables. I would like to see consistency in policies on that.

Specifically to my point about multinationals and how they are taxed in jurisdictions, I support the Government in the sense that it is right to look to close tax loopholes where we see companies operating in multiple jurisdictions, but the plans for a global minimum tax are wrong, as I have raised in the House before. They are wrong and flawed for a number of reasons.

No one would deny that the introduction of such a measure is complex—it is not straightforward. I paid attention to the comments made by the hon. Member for Ealing North. There is no point just saying that we need to crack on and implement this; we have to do it in the right way, which is why I put forward the amendment. It even gives the Government scope for more time to look at the complexities around its implementation and to look at what our competitors are doing. We should not rush headlong into this. These are complex changes that will be challenging to enforce; I will speak about that, too.

I believe the measure is anti-competitive. It undermines our fiscal sovereignty. Without labouring the point too much, we have left the EU. The Government have the ability to make their own tax laws and fiscal sovereignty is crucial to this, too. Why are we are now going to surrender tax powers to the will of the OECD?

Economic growth has already been mentioned by my hon. Friend the Chair of the Treasury Committee. We do not want to undermine our ability to be a low-tax global beacon of free trade. The Government are pursuing policies such as freeports. We all welcome that when it comes to competition, but we do not want to encourage a culture of subsidies, which this policy will do.

I believe that Governments and Parliaments must have flexibility to set their own fiscal policies and tax rates, striking a balance across all sectors, including multinational companies and small and medium-sized enterprises. Speaking as an MP for Essex, which is known to be an entrepreneurial county, SMEs are the backbone of our economy. We have to strike a balance between being competitive and having low tax rates to attract investment, and generating revenue to support public services—I agree with the hon. Member for Ealing North about that. If we are not competitive, we will not have the tax revenues to support public services. However, a minimum corporate tax would prevent us from doing that.

There are problems with the OECD’s plan, which is why I want to have greater scrutiny on implementation. The enforcement and implementation mechanisms are unclear and countries could find ways around them, which should concern us. They could find loopholes to circumvent the policy. The UK looks set to gold plate measures. We follow rules and standards when we sign up to them, which is the right thing to do when it comes to our Government policies. The same cannot be said for more than 130 countries that have taken an interest in the matter. For many, agreeing to the OECD framework appears to be more about rhetoric and the ability to take action on taxing multinationals, than making the changes necessary and following the committed approach that this Government plan to take. I have no doubt that the Minister will want to speak about that, because the Government are being diligent in their approach and more scrutiny is required.

Moreover, limiting fiscal freedoms opens the door for countries to entice investment from big businesses with big subsidies, which distorts the market. All hon. and right hon. Members will understand that in a subsidy race we simply cannot compete with the United States or even China. Some countries can pump millions of dollars into supporting investment from multinationals. That is not what we do in this country.

We are more competitive as a country in being able to deploy a full range of fiscal and tax-cutting powers, than we are in a race to the bottom with subsidies. There are serious concerns about how these plans will be enforced and, importantly, how disputes between countries will be resolved. I understand that negotiations with the OECD are taking longer than expected, which is not a surprise, and I think it will be some time before an agreement is reached, but by baking into primary legislation a requirement for us to implement without any further flexibility, we risk blindly signing up to a package where foreign officials could overrule decisions and interpretations in our own jurisdiction and in on our own Government.

The peer review panels, being set up to review implementation, could be made up of representatives from China or other hostile states—for example, Russia—all countries which are involved in the process and states that have concerning records on human rights, war crimes and other conflicts, which we debate in this House day in, day out. Frankly, they do not meet our standards and we should be cognisant of that. Our tax affairs could be judged by representatives from states that many in this House are concerned about.

There is then the issue of the date of implementation, which I have referred to in my amendment. The Government have been clear that they will implement the policy by the end of this year— as clause 264 states, from 31 December 2023. This measure, despite the concerns I am raising, can only have a chance of succeeding in the way the Government hope if it is implemented in a constituent manner by all states—or, if not that, by a critical mass—at the same time. This is where we have concerns. We are just not seeing this right now in other countries and among our competitors, because they are not as wedded to the date as we are. I understand why we have to put down the date to enshrine it in law.

The United States, as my hon. Friend the Member for South Dorset (Richard Drax) has mentioned, will not be able to take this through to implementation by 2024. The Republicans in the House of Representatives are opposing those plans. But as well as opposing and preventing the US—our largest trading power—from introducing them, they are threatening retaliatory measures on countries that implement the policy, and in doing so will penalise US-based companies. So we could have a situation where this Government introduce a tax measure that adversely impacts on our trade and investment with the US. Of course, that could have an impact on trade negotiations and some of the work that other Departments are doing—such as Business and Trade, for example.

It would be interesting to know from the Minister whether this issue was discussed by the Prime Minister and the President in their recent bilateral talks. The US is crucial in this, but it is not just the US that will not implement the policy. The EU members are not going to implement the policy fully on day one. They have been given six years to implement tit. In Asia, major economies and competitors are setting dates behind the UK: Japan, Singapore, Thailand and Hong Kong. Although that the Government have been clear about their intent, we need to know what they intend to do on implementation. I have put my own concerns about this tax on the record. I think the date is wrong.

Cash Acceptance

Richard Foord Excerpts

Monday 20th March 2023 Westminster Hall

[Richard Foord (Tiverton and Honiton) (LD)]

It is an honour to serve under your chairship, Ms Bardell. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for introducing the debate.

When I was a child, scratching around in the earth in Somerset I happened upon what I thought was a stone—it was more like a flat pebble—but was, in fact, a Roman coin. Reflecting on that today, it strikes me that we have spent 2,000 years in this country handling real currency. Coins and, in more recent years, notes have been with us for such a long time. I am therefore alarmed that our generation might see the end of real hard currency.

Members have expressed many real concerns this afternoon. Thinking about rural areas like mine, I am most concerned about the plight of older people. Both my hon. Friend the Member for North Shropshire (Helen Morgan) and I get stacks of correspondence from elderly constituents who just cannot abide trying to remember the PIN for a card that they have no assurance works, and have no faith or trust is reliable. In October 2022, the Bank of England stated:

“Cash remains an important payment method in the UK, and a critical means of payment for many people.”

In addition I endorse what the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said about children and educating them about money. We do not know what the consequences may be for a generation who are not schooled with tangible money, but they may not be able to budget quite as well as their parents’ or grandparents’ generations for that fact.

We should also think about how our small businesses are affected. In rural areas such as my part of Devon, small businesses are concerned about the closure of not only banks, but cash machines. The other day, I received correspondence from the secretary of the Axminster chamber of commerce, who pointed out that the town of Axminster lost its last bank last autumn, and the neighbouring town of Honiton is set to lose its last branch of HSBC this summer. This issue is affecting in quite a miserable fashion some of the small businesses that depend on being able to deposit and withdraw money locally.

[Drew Hendry]

The hon. Gentleman makes a good point about businesses in rural areas. When these facilities are withdrawn, businesses often face insurmountable challenges in terms of what they then do, where they travel to and how they staff their businesses when they have to travel to different places to carry out transactions or indeed take on new methods. Sometimes they just do not have the time to do that. Does the hon. Gentleman agree that this is a significant issue that is never covered in any of our discussions?

[Richard Foord]

I completely agree. It is great that we have an opportunity today to hear reassurance from the Minister on what the Government are doing to address some of these concerns. We have to ensure that nobody is locked out of our society simply because it is seen as easier for others to use electronic payments. Some people are more inclined to give to charity or leave tips if they can do so with notes and coins.

I am also curious to know what the Government think of tax evasion in relation to tangible money. When the Government think about phasing out cash, do they have one eye on how small and medium-sized enterprises pay VAT? Is that a factor when they think about how we will access money in the future?

As I draw my reflections to a close, I want to talk about another personal experience, this time of travelling in China. Before the pandemic, I was working in China, and my Chinese colleagues found it hilarious that I had brought notes and coins with me, because they were so used to using Alipay on their mobile phones. In some societies, it has become unfashionable—really passé—to use coins and notes. I am proud that we live in a liberal democracy that serves to protect the rights of minorities. One of those rights ought to be the continued use of tangible cash.

--- Later in debate ---

[Andrew Griffith]

I advise the hon. Lady to explore with Link the provision of potential alternative cash machines and to explore with the Access to Cash Action Group the potential for a banking hub. A number of Members have procured banking hubs for their constituencies. The hon. Member for Tiverton and Honiton has a banking hub and has spoken up about that issue.

[Richard Foord]

On banking hubs, the Axminster chamber of commerce has been trying to get through to the Access to Cash Action Group to find out when it will get its community banking hub, but has been unable to get through, so will the Minister comment a little further on Access to Cash Action Group communications?

[Andrew Griffith]

I will happily entertain treatises from the hon. Gentleman if he would like me to follow that up. There are 70 cash hubs on their way. Members throughout the House, including a number of his colleagues in Devon, have procured them. It sometimes takes a little while for them to appear because of planning issues or the need to get the right power arrangements and safe access in place for constituents. If the hon. Gentleman will bear with the banking hubs and work with them, he will find that there are solutions out there.

My hon. Friend the Member for Blackpool North and Cleveleys talked about the no-purchase cashback facility, which turns every single convenience store and retailer in the country into a potential cash-dispensing hub.

High Street Bank Closures

Richard Foord Excerpts

Tuesday 28th February 2023 Commons Chamber

[Alex Davies-Jones]

I completely agree. For someone who is disabled, elderly, otherwise vulnerable or just does not have a car, the closure of bank branches can be truly devastating. Across the country, it is a similar picture. In some parts of the UK, customers are facing an astonishing 40-mile round trip just to access their bank. That is not good enough.

We all know that face-to-face access to high street banks is a vital service for the most vulnerable in our society. For many constituents who do not use the internet regularly or, in modern-day Britain, do not have reliable enough broadband, online banking is not an option. I fully appreciate that the way consumers spend money has changed and that digital payments now dominate transactions—in part, accelerated by the pandemic. That in itself is no bad thing. Making commerce easier and more convenient for customers and businesses alike should be good for our economy and our high streets. As Labour’s shadow Digital Minister, I have seen at first hand what a digitised economy that works everyone could look like.

[Richard Foord (Tiverton and Honiton) (LD)]

In addition to digital banking, what does the hon. Member think of community banking hubs, given that, in my part of Devon, Axminster lost its last bank in November and Honiton is set to lose its last bank, HSBC, this June?

[Alex Davies-Jones]

I agree with the hon. Gentleman. Community banking hubs are an answer to a problem, but they are not the only solution. We are seeing a real need for a presence on the high street, because banks support so many local businesses. A community banking hub can help customers, but it will not support local businesses and local charities, which my hon. Friend the Member for Ogmore (Chris Elmore) mentioned. That is why we desperately need some sort of presence on our high street.

Far from working for everyone, as I have mentioned, the seemingly never-ending stream of high street bank closures is leaving behind the 5 million adults who still rely on cash to a significant extent for most of their purchases. As the cost of living crisis continues to cause immense pressure for thousands of people across the country, there have been reports that cash usage has increased, not decreased, because it makes budgeting feel easier. That makes the decline of high street banks even more worrying, and risks inflicting yet more misery on vulnerable people who are already struggling.

UK Infrastructure Bank Bill [Lords]

Richard Foord Excerpts

Report stage
Wednesday 1st February 2023 Commons Chamber

[Richard Foord (Tiverton and Honiton) (LD)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss the following:

New clause 2—Businesses and bodies the Bank invests in—

“(1) The Bank must publish an annual report setting out—

(a) the geographical spread of businesses and bodies it invests in, and

(b) the ownership of the businesses and bodies it invests in.

(2) The Bank must prepare and publish a ‘Good Jobs’ plan for all businesses and bodies it invests in, which requires the business or body to improve productivity, pay, jobs and living standards.”

This new clause would ensure that the Bank considers the location and ownership of the businesses and bodies it invests in and only invests in businesses and bodies who create “Good Jobs” plans to improve productivity, pay, jobs and living standards.

Amendment 5, in clause 2, page 1, line 14, at end insert—

“(i) to reduce economic inequalities within and between regions of the United Kingdom, and

(ii) to improve productivity, pay, jobs and living standards.

(c) to support supply chain resilience and the United Kingdom’s industrial strategy.”

This amendment would ensure that the Bank’s objective to support regional and local economic growth includes reducing economic inequalities within and between regions and improving productivity, pay, jobs, and living standards. It would also create a third objective for the Bank to support supply chain resilience and the UK’s industrial strategy.

Amendment 3, page 1, line 14, at end insert, “, and

(c) to improve water quality in the UK.”

This amendment would add improving water quality in the UK to the Bank’s objectives.

Amendment 4, page 1, line 22, at end insert—

“(4A) The Bank may only provide any of the support listed in subsection (4) to water companies if they have produced a costed, time limited plan demonstrating they are committed to preventing discharge.”

This amendment would require water companies to have a costed, time limited plan, demonstrating they are committed to preventing discharges before they can receive investment from the UKIB.

Amendment 2, page 2, line 9, leave out “consult” and insert—

“gain the express consent of”.

This amendment would require the Treasury to gain the express consent of the appropriate national authority before making provision in regulations under subsection (6).

Government amendment 1.

[Richard Foord]

I rise to speak to new clause 1 and amendments 3 and 4.

I welcome the UK Infrastructure Bank Bill. We previously had a Green Investment Bank, founded by the Liberal Democrats in government. It was short-sighted for the Government to sell it off, especially as it made £144 million in profit for its Australian owners last year. Nevertheless, the Liberal Democrats are glad to see steps finally being taken to put the replacement UK Infrastructure Bank on a statutory footing.

Liberal Democrat new clause 1, in the name of my hon. Friend the Member for Richmond Park (Sarah Olney), seeks to ensure that this new UK Infrastructure Bank will remain in operation until the Government’s net zero and environmental commitments have been met.

I hope to see this new bank change investment in green infrastructure for the better, and this brings me to the two amendments—amendments 3 and 4—tabled in my name and those of Liberal Democrat colleagues. They seek to ensure that water companies set out costed, time-limited plans to deal with discharges before they can get funding through the bank. This is important because communities across the UK are currently being impacted by the actions of some negligent and wayward water companies. For years, we have seen these firms failing to invest in our vital infrastructure, but instead prioritising shareholder payouts and bumper bonuses for chief executive officers. It is shocking that this practice has been allowed to continue, and that the Government have resisted several attempts by the Liberal Democrats to clamp down on these sewage spills.

South West Water, which covers my patch in Devon, was awarded a one-star rating by the Environment Agency after having been found to have discharged sewage into rivers and lakes and on to our beaches over 42,000 times. This represents more than 350,000 hours of dumping, including at our prestigious blue flag beaches. Three of the 10 most affected beaches are in Devon. And what was the reaction at South West Water? It gave the chief executive a bonus of more than £1 million.

[Richard Fuller (North East Bedfordshire) (Con)]

We on the Government Benches are aware of some of the comments—if I may say so, the somewhat misleading comments—in Liberal Democrat propaganda about this issue. The hon. Gentleman is obviously familiar with the situation at South West Water. Could he tell me what the cost is to South West Water of eliminating sewage overflow, and what are the implications for water bills for residents in the south-west, because that is what the literature from his party has been saying needs to be done?

[Richard Foord]

The amendment that we are considering is about loans from the UK Infrastructure Bank. Whatever figure is required, the bank should not be permitted to release funds for the purpose of improving our sewerage system until there are plans by water companies for the system’s complete restoration.

--- Later in debate ---

[Andrew Griffith]

My hon. Friend makes an important point. It ill behoves a party that aspires to be taken seriously as a force in British politics to be all about clickbait, misleading graphics and half-truths, rather than about, for example, the data, which show that monitoring has increased from just 5% in 2016—a level at which it would be wrong for anyone to characterise themselves as having their arms around this long-standing issue—to more than 90% today. I understand from my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs that it will be 100% by the end of this year. We are the party that is taking action. We are the party that is finding the data, exposing the conduct of the water companies and putting record investment into the sector to solve this long-standing problem. We are the party that provides the solution.

The hon. Member for Tiverton and Honiton needs to consider whether he wants to be part of the problem or, as we all are, part of the solution. One of his amendments is entirely superfluous, as such a measure is already underwritten by the objectives in the world-leading Environment Act 2021. Only yesterday, we announced ambitious interim targets to deliver those objectives in our environmental improvement plan. I believe that the hon. Gentleman was in the Chamber for the statement that preceded this debate. For that reason, we will accept his amendment, because it sits within the actions that we are taking and the commitments that we have made.

Finally, the amendment tabled by the right hon. Member for Dundee East (Stewart Hosie) would require explicit consent from the devolved Administration before using powers under clause 2(6) that touch on devolved competence. However, I was pleased when his colleague, John Swinney, the acting Finance Secretary, wrote to me indicating that he was happy with the content of the Bill, and would recommend that the Bill receive a legislative consent motion. Last week, I was even more pleased—imagine my delight—when the Scottish Parliament gave the Bill an LCM. The right hon. Member for Dundee East will see that not just the Government but his colleagues suggest that his amendment is not required by the Government in Holyrood. As a result, I very much hope that he will not seek to push it to a vote.

This is an incredibly important milestone and moment in establishing a new national institution that will deliver real social purpose and make an enormous difference to the lives of our fellow citizens across the United Kingdom. Establishing it today in statute will give the market greater certainty and confidence, and encourage significant private sector investment in all of the bank’s priority sectors. By partnering with the private sector—by mobilising the life force of private capital, the ferocious, problem-solving power of business—in areas that might otherwise struggle to get the investment they require, we will help speed up the transition to net zero and level up the UK. With the exception of amendment 4, which I have indicated the Government will not oppose, I hope Members understand the reasoning—even if they do not agree—that I have set out as to why we cannot accept the amendments and new clauses and that they respect the time of the House and agree not to press them to a vote.

[Richard Foord]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Businesses and bodies the Bank invests in

“(1) The Bank must publish an annual report setting out—

(a) the geographical spread of businesses and bodies it invests in, and

(b) the ownership of the businesses and bodies it invests in.

(2) The Bank must prepare and publish a ‘Good Jobs’ plan for all businesses and bodies it invests in, which requires the business or body to improve productivity, pay, jobs and living standards.” .—(Abena Oppong-Asare.)

This new clause would ensure that the Bank considers the location and ownership of the businesses and bodies it invests in and only invests in businesses and bodies who create “Good Jobs” plans to improve productivity, pay, jobs and living standards

Brought up, and read the First time.

Question put, That the clause be read a Second time:—