National Insurance Contributions Bill

Rosie Winterton Excerpts

2nd reading
Monday 14th June 2021 Commons Chamber

[Sarah Olney]

I very much welcome the Exchequer Secretary’s intervention. I am happy to stand corrected, and I very much look forward to seeing the impacts of those plans right across the nation, because as far as I am concerned, the significant weakness of the plan for freeports is that it cherry-picks areas for investment while ignoring the needs of many other communities across the country. That is why I say that the Bill is a missed opportunity: because to target the national insurance cut just at areas that will have a freeport is to ignore the impact that such a cut could have across many sectors that could provide fantastic opportunities for employment as we come out of the pandemic. There is a very real danger that freeports will divert business activity from areas outside freeports, and that this measure will hit the public finances without any subsequent increase in economic activity.

I believe that the Government would make much better use of the national insurance contributions scheme by stimulating economic growth in ways proven to be effective. For example, an increase in the annual employment allowance to £16,000 could benefit every small and medium-sized enterprise. It would allow employers to take on up to five workers each without making contributions, which would be a substantial boost to communities across the country and would do much more to boost employment across the nation than these hand-picked benefits whose impact cannot be measured.

[Madam Deputy Speaker (Dame Rosie Winterton)]

As the next speaker has withdrawn, we will go straight to Jim Shannon.

--- Later in debate ---

[Thangam Debbonaire (Bristol West) (Lab)]

On a point of order, Madam Deputy Speaker. Further to earlier points of order, as matters seem to have moved on, I seek urgent clarification on the process that we are in the middle of, given that Mr Speaker appeared to be deeply unhappy earlier and that we are now facing a wait of possibly up to two hours to hear from the Secretary of State for Health and Social Care on a matter that the Prime Minister has already addressed the press about.

We understand that the Prime Minister was not available at 3.30; we know that and that is reasonable. Since then, though, the Prime Minister has addressed the press. His comments are causing concern and confusion, but the House has to wait two hours more. This is treating the House with disdain. Parliament is sovereign. What is more, the Prime Minister himself ran on a campaign of Parliament being sovereign—sovereign, Madam Deputy Speaker. Our constituents deserve better.

I wonder whether those on the Treasury Bench have had time to reflect on the matter since the earlier points of order. Can you tell me, Madam Deputy Speaker, whether you or the House have had any word from No. 10 about coming here now to clear up the confusion and whether the Prime Minister is willing to face questions from Members of Parliament on behalf of our constituents? I seek your urgent clarification, because we feel that the Prime Minister is treating this House with contempt.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Lady for that point of order, and realise that she has set out the fact that the Prime Minister has made a statement to the press, not to the House. However, the best thing I can do is repeat what Mr Speaker said earlier:

“I have repeatedly made it clear how important it is that announcements should be made in this Chamber.”

He went on to say:

“The Secretary of State will be making a statement at 8.30 pm on covid. That will give Members of the House an opportunity to question him on the Government’s policy.”

He then went on to say:

“However, it is not what I would have expected, which is a statement to the House before an announcement to the press. It is not acceptable. The Government determine when Ministers make statements, but, in doing so, they must show respect to this House.”

That is what Mr Speaker said earlier, and I do not think that there is much more that I can add to that, but the hon. Lady wants to follow that up.

[Thangam Debbonaire]

Further to that point of order, Madam Deputy Speaker. Can we be absolutely clear that the Prime Minister has not made any attempt to contact Mr Speaker about making a statement and that there is literally nothing else to add at all? Given that Mr Speaker made it very clear in his ruling earlier that he was deeply unhappy, may I just check that there has been no response from those on the Treasury Bench or from No.10 about the Prime Minister coming to this House so that he, having made a speech to the press, can face questions from this House?

[Madam Deputy Speaker]

As I have said, the hon. Lady can rest assured that Mr Speaker will have made his views very clear. I am not aware of any discussions that have taken place, but I think we would know if the Prime Minister were shortly to arrive here. Instead, I suspect that the Secretary of State will make a statement at 8.30.

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Madam Deputy Speaker. This is somewhat different. It relates to the fact that if the Government are extending the provisions in England in relation to the restrictions on people’s freedom because of covid beyond 21 June, that is also the date when matters change as to how we do our business here in Parliament.

It is actually quite difficult to get a rail ticket from Wales to London because of covid restrictions on trains. People have to book some time in advance. I just wonder when there will be a busines statement that will lay out exactly how we will be doing our business in a week’s time. There are perfectly sensible measures that could be put in place very quickly; I am sure that we would all want to assist in that, but it is important to get these things right. Sometimes, when the Government rush them or do not consult on them, we end up having to tidy them up afterwards.

[Madam Deputy Speaker]

I thank the hon. Gentleman for that point of order. I suspect that the shadow Leader of the House will be having discussions with the Leader of House about that issue, and it may be something that comes forward in a business statement at some point.

I am suspending the House until 8.30 pm.

National Insurance Contributions Bill

Rosie Winterton Excerpts

Consideration of Lords amendments
Tuesday 1st March 2022 Commons Chamber

Consideration of Lords amendments.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I must draw the House’s attention to the fact that financial privilege is engaged by all of the Lords amendments 2, 4, 1, 3, 5, 6, 7, 8, 9, 10, 11 and 12. If any of the Lords amendments are agreed to, I will cause the customary entry waiving Commons financial privilege to be entered in the Journal.

Clause 2

Freeport conditions

5.51 pm

[The Financial Secretary to the Treasury (Lucy Frazer)]

I beg to move, That this House disagrees with Lords amendment 2.

[Madam Deputy Speaker]

With this it will be convenient to discuss the following:

Lords amendment 4, and Government motion to disagree.

Lords amendments 1, 3 and 5 to 12.

[Lucy Frazer]

I welcome this small but important Bill on its return to this House and I am pleased to speak to it for the first time. I pay tribute to my ministerial colleague, Viscount Younger of Leckie, for his work on it in the other place, and to my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who so capably led it when it was first before the House.

There are 12 Lords amendments for our consideration today and I will first address Lords amendments 2 and 4, which, as Madam Deputy Speaker has highlighted, engage the financial privilege of this House. The Government ask the House to reject them for the reasons that I will set out. Lords amendment 2 is the first of two amendments on which the other place voted to make changes to the Bill. It adds an additional condition whereby freeport national insurance contribution relief would be available only if the freeport governance body maintained a public record of beneficial ownership of businesses operating in the freeport tax site.

The Government believe that the Lords amendment, which was made by the other place, is unnecessary and should not be accepted. Throughout the bidding prospectus and subsequent business case processes, prospective freeports were required to set out how they will manage the risk of illicit activity. Those plans were scrutinised by officials in the Border Force, Her Majesty’s Revenue and Customs, the National Crime Agency and others.

Additionally, the freeports bidding prospectus set out that each freeport must agree a governance structure with the Government. While each port can design its own governance structure to meet the local needs of the port, it must meet the criteria set out by the Government in the freeports bidding guidance. That means that the Government already require each freeport governance body to undertake reasonable efforts to verify the beneficial ownership of businesses operating within the freeport tax site and to make that information available to HMRC, law enforcement agencies and other relevant public bodies. It is therefore a condition of being granted freeport status that there is an appropriate level of oversight.

That is a proportionate approach, which means that the local area and law enforcement can take effective measures to ensure the security and propriety of operations within the freeport. The difference between the amendment and the existing requirement on freeport governance bodies is simply a requirement for the freeport governance body to make its record of beneficial ownership available to the general public, as well as to law enforcement.

Given the nature of the information, we do not think it would be appropriate for the freeport governance body to release this information publicly. This is because the freeport governance board is a third party, and therefore does not have the locus to release such information about a business to the public. The second reason is that such a requirement would also partially duplicate the People with Significant Control register at Companies House where there is already an onus on the company itself to provide information.

However, hon. Members will also be aware that, as a Government, we are bringing in a number of measures to ensure that we have transparency. Last week, the Prime Minister announced the Economic Crime (Transparency and Enforcement) Bill to further crack down on dirty money and maintain the UK’s position as a world leader in corporate transparency, and we have heard much of that in this House today. That Bill will introduce a register of overseas entities beneficial ownership of UK property to crack down on foreign criminals using UK property to launder money. It will reform our unexplained wealth orders regime to help target more corrupt elites and it will strengthen the Treasury’s ability to take action against sanction breaches.

We will also publish details of the planned fundamental reform of Companies House, which is designed to clamp down on money laundering and illicit finance. Once the register of overseas entities is implemented, it will be the first of its kind in the world. That is good news for the UK, enhancing our strong reputation as an honest and trusted place in which to do business. I hope that, with these assurances, this House will reject Lords amendment 2.

Lords amendment 4 is the second amendment on which the other place voted to make changes to the Bill. It provides the Treasury with the power to amend the eligibility period attached to zero-rate relief for armed forces veterans. The Government believe that this amendment made by the other place is not necessary and should not be accepted. I will explain to this House why that is the case. The Government have considered this measure in detail and consulted extensively on the relief. It included a policy consultation that ran from July to October 2020 and a technical consultation that ran from January to March 2021. A significant number of respondents agreed that the relief is a positive step forward towards supporting the recruitment of veterans and could help break down the barriers and negative perceptions surrounding veterans.

After considering the responses, we felt that a 12-month qualifying period struck the right balance between supporting veterans as they transitioned to civilian life and wider taxpayers’ interests. Members should also be aware that employer representatives, such as the Federation of Small Businesses, welcomed the 12-month relief when it was announced. This policy provides employers in the 2021-22 tax year with up to £5,500 of relief. It is also one part of the Government’s broader strategy to support veterans.

The Government recently published the veterans’ strategy action plan for 2022 to2024. That contains more than 60 policy commitments worth more than £70 million in a diverse range of areas, reflecting the varied streams of Government support on offer.

Furthermore, at the 2021 Budget and spending review, £10 million was provided to support mental health via charities provisions and £5 million to the health innovation fund, providing cutting-edge treatment for veterans. In August 2021, £2.7 million was provided to strengthen veteran health support further, including facilitating the expansion of Op Courage, and a further £5 million was provided in September 2021 for those struggling after the Afghanistan withdrawal. The Bill already contains other levers to increase the generosity of this relief, if needed, such as increasing the threshold that employers of veterans start paying NICs and extending the overall period of the relief. These proposed additional powers are therefore not necessary. With these reassurances, I hope that the House will reject Lords amendment 4.

The remaining 10 Lords amendments were tabled by the Government and I hope that this House will support them. Lords amendments 1, 3 and 5 to 9 legislate for the threshold at which employers that qualify for these reliefs start to pay NICs. The amendments set the threshold for the 2022-23 tax year for freeport employers and for the 2021-22 and 2022-23 tax year for the employers of veterans. These thresholds have been set at £25,000 per annum for freeport employers and £50,270 for employers of veterans. Both those figures have been publicly communicated during the Bill’s passage. These thresholds are normally set through regulations, but due to the timing of this Bill they are being set in primary legislation.