National Insurance Contributions (Increase of Thresholds) Bill

Rosie Winterton Excerpts

2nd reading
Thursday 24th March 2022 Commons Chamber

[James Murray]

I am going to make some progress.

Perhaps the most desperate part of the Chancellor’s pitch yesterday was his claim that “the work starts today”. The Conservatives have been in power for 12 years: 12 years of incomes being squeezed under Conservative Governments, 12 years of failure on energy efficiency and 12 years of low growth. The truth is that, even now, when he is apparently “starting work”, the man who lost £11.8 billion of public money to fraud has once again proved that he is not up to the task.

This week, the Chancellor failed to scrap the tax rise on working people. He failed to introduce a windfall tax, and he failed to set out a plan to support British businesses. People deserve better. People need a Government who are on their side.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Richard Drax.

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[Richard Drax]

In an ideal world, I would like to scrap VAT—[Interruption.] I would love to scrap it altogether. It is extraordinary that we ask someone to do something, creating all this work and getting the economy going, and people are taxed to do it. But there again, as I have explained, the Government are in a predicament because of the pandemic and a war—situations that are way out of their control—and I know that they are trying to do their best with the very difficult cards in their hand.

In the Chancellor’s statement yesterday, I did not hear the good Conservative word “savings”—that is what I call it, but the Opposition call it “cuts”. We appear to acquiesce to every demand for more money. This is taxpayers’ money and it is surely time to review the big spenders, such as the NHS and welfare. They are, of course, both needed, but it is time to review both to make sure that we are getting value for money.

The national insurance rise, which I disagree with, will see billions of pounds disappearing into a black hole, followed soon afterwards by demands for more. For the sake of the public finances, I do not believe that this can go on. I welcome the Chancellor’s talk of more tax cuts to come, but in my humble opinion, and certainly for my constituents, for the reasons that I have stated, those cuts will come too late.

The Opposition are already drooling with pleasure as they watch us behave like the big spender that they would so love to be. That puts our raison d’être at risk. Capitalism is always challenged by socialism, which, as far as I know, has never succeeded wherever it has been adopted, but that does not stop them from trying it on. Today, in tough times, we need to fight for and explain far better our economic philosophy, for if we do not, there is a real risk of a high-spending, high-taxing Conservative Government handing over the country to those who would bring it to its knees, ruthlessly raiding the accounts of those who aspire, work hard and already pay their fair share.

I would be neglectful if I did not mention money for our armed forces. I know that that is not directly linked to national insurance, but it was raised in the statement yesterday. As a former soldier, I urge those on the Front Bench to spend more of our money on our armed forces. If the awful behaviour by Russia has not alerted us to that, I do not know what will. This is all about priorities; that is what we as a Government have to decide. As I hinted, I think there should be far more study and review to ensure that the money is better spent in various areas. Let us face it: the defence of our country and all those who depend on her is the Government’s top priority.

Let me end where I started, with freedom. High taxes are not the accepted norm for the Conservative party. For us, it is all about freedom—freedom from the state, freedom from high taxes and freedom for the people to choose how their money is best spent.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Scottish National party spokesperson, Richard Thomson.

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[Helen Morgan (North Shropshire) (LD)]

Does my hon. Friend agree that the proposed changes to the national insurance thresholds are disappointing, because they just do not go far enough to help people cope with the shocking scale of this cost of living crisis? A disabled family in my constituency do not pay national insurance so they do not get any benefit from the proposed cut; one member is too ill to work and his wife has to stay at home to care for him, so they get nothing from this, but they are struggling to heat their house and pay their food bills. This does not do anything for them. For those who are in work, the NI rate is still increasing by 10% and so they will not benefit enough to be able to heat their homes. Does she also agree that those who live off-grid and heat their homes with heating oil are not protected by anything that happened yesterday?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Interventions have to be quite short.

[Wendy Chamberlain]

Thank you, Madam Deputy Speaker. I also thank my hon. Friend for her intervention. We know that the price cap does not support those who are off-grid. That was a point Members made in Monday’s Opposition day debate in relation to pensioners, and in other places. I hope that the Government will consider that and if they do not do something about it now, I hope they will do so in future.

Yesterday’s statement was all smoke and mirrors. It increases the disparities between unearned and earned income.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call John McDonnell.

Financial Statement

Rosie Winterton Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I would like to try to get everybody in. That will mean Members not making short statements, but asking just one question so that the Chancellor can give one answer.

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[Rachael Maskell (York Central) (Lab/Co-op)]

As always, the Chancellor has forgotten the poorest—those claiming pensions, those claiming social security and those living below the minimum income threshold, who have been hit by the cost of living crisis. All that my poorest constituents want is food, warmth and shelter against soaring house prices. All they got was 6p a day from the housing support fund on average. Will the Chancellor go back again and review the rise in social security payments? Those people need that money, or else they will go hungry, they will experience hypothermia and they will be homeless.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. It is important that the questions are very brief at this stage if I am going to get the last few people in.

[Rishi Sunak]

With regard to supporting those who are homeless, the spending review in the autumn increased support for homelessness by 85%, compared with 2019 levels—to over £640 million, I think, a year. We are currently seeing the number of rough sleepers at very low levels, compared with the last several years, and hopefully at the lowest level in a decade by the end of this Parliament.

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[Rishi Sunak]

These changes were announced two years ago. They were consulted on and there are various exemptions in place, particularly to protect agriculture, which I know will be important to the hon. Gentleman. None the less, it is right that we go ahead with the changes as legislated.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the Chancellor for his statement.

[Alison Thewliss (Glasgow Central) (SNP)]

On a point of order, Madam Deputy Speaker. I want to use this opportunity to allow the Chancellor to hear a clarification. He suggested that the Scottish Government might want to follow the UK Government in eventually introducing a 19% rate of income tax. Would it be possible to get the Chancellor to correct the record? There is already a 19% rate of income tax for the lowest earners in Scotland, so in fact it is the UK Government who have to play catch-up with the Scottish Government.

[Madam Deputy Speaker]

As the hon. Lady knows, the Chair is not responsible for the speeches of Ministers. I am sure that, if any incorrect information has been given, the record will be corrected. Obviously, the Ministers on the Front Bench have heard her point.

National Insurance Contributions Increase

Rosie Winterton Excerpts

Tuesday 8th March 2022 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am afraid that I will have to put a time limit on speeches of six minutes; otherwise, it will not be fair on others.

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[Florence Eshalomi]

My hon. Friend makes a really valid point. In London, the big issue of the cost of living is being pushed up by the cost of our housing crisis, and this is experienced right across the country. Household costs continue to go through the roof, including for many people in insecure tenancies and people in the private rented sector who are also hit hard.

The rise in national insurance will do nothing to alleviate the suffering felt by my constituents but will simply combine with booming fuel prices to push more and more of them into poverty. The effect of this cannot be overstated. More than 8,000 people in Vauxhall already live in fuel poverty. That means that they cannot afford to keep their home warm without dropping into poverty. How have we got to a state where thousands of people in the centre of one of the richest cities in the world, in one of the richest countries in the world, are having to make the impossible choice between living in poverty or living in a cold home? That is the reality for many of my constituents.

The Government can point as much as they want to extenuating circumstances, but they cannot hide from the failures on their own doorstep that have made the events of the past couple of years unnecessarily hard. Neither can it be said that the solutions they offer are sufficient, or progressive enough, in alleviating the costs of households. While the Government have proclaimed to be living with covid, the reality for many people in Vauxhall is that they are still reeling from insufficient support during the pandemic, and local industries face a long tail of this crisis. These include self-employed people who were unfairly excluded from Government support. Many of the people who have contacted me built up personal debt during the pandemic to stay afloat, only to be hit now with the double whammy of the national insurance and energy cost hikes.

In the lead-up to the 2015 general election, the then leader of the Conservative party talked about fixing the roof when the sun is shining. At the same time, the Conservative and Liberal Democrat coalition took a wrecking ball to the effective schemes introduced by Labour that were fixing a million roofs every year. The result is that, with the heavy rain of the fuel price crisis on the horizon, our housing stock still suffers from inefficiencies that will mean that more and more households face impossible choices in the next couple of months.

On this International Women’s Day, I pay tribute to the women across Vauxhall who are working around the clock behind the scenes to make ends meet: the women who are juggling insecure zero-hours contract jobs to pay their bills; the women who are forced to return to work early because of the crippling costs of childcare; the women who are at the forefront of working with our young people caught up in violence, running to the scene and reassuring the community when there has been a tragic incident; and the women who will continue to go without just to ensure that their extended family members or the people they are caring for are supported. They are the very same women who will be hit by this national insurance crisis.

The tangibility of many households in Vauxhall’s ability to cope is close to a tipping point. While there are things that the Government cannot control, they must use all the levers they have available to ensure that households stay afloat. Refusing to impose a national insurance rise now is one of those levers, and it is one that the Government must use if they have the interests of households up and down the country at heart. I ask Conservative Members to reassess their commitment to supporting working families and cancel this rise.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We will now have a five-minute time limit so I can get everybody in.

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[Rachel Hopkins (Luton South) (Lab)]

I rise to speak in support of the motion calling for the Government to cancel their planned 1.25% rise in national insurance contributions, which will cost families an average of £500 a year from April 2022. Many of my constituents have been telling me that they are struggling with the increase in the cost of living. I spoke to a mother of a disabled child living in Dallow, who was scared about whether she could afford to pay her rising gas bill as she needed to keep the heating on for her disabled child’s condition. Similarly, in Farley, an older couple with serious health conditions who live on a fixed income are struggling with increased food prices and energy bills.

Many of my constituents have also been in touch about petrol price increases and have pointed out that the Tory cost of living crisis is being further exploited by sharp and often inconsistent rises at different petrol stations. People are driving to different areas in desperation to find the cheapest one to save a few pounds so that they can get to work. Will the Minister set out what action the Government are taking to tackle the large increases in petrol prices and any apparent profiteering that is taking place?

The reality is that people are really worried about their future and in just a few weeks, there will still be a devastating set of tax hikes. According to the Resolution Foundation, the average combined impact of the freeze in income tax thresholds and the 1.25% increase in personal national insurance contributions is about £600 per household. Combined with the £444 increase in energy bills expected in the next financial year for a household that gets the Chancellor’s loan and council tax reduction, that means that most households will still be more than £1,000 worse off in 2022-23.

It is clear that the Conservative Government are choosing to increase national insurance on working people and businesses at the worst possible time. The increase is deeply unfair because it will hit 27 million workers directly in their pay packets while leaving other forms of income, such as from buying and selling property, owning multiple buy-to-lets and dealing in stocks and shares, untouched. Many of my constituents do not have such wealth and assets, which is why it is unfair and why Labour has long called for the national insurance rise to be halted, so that it does not make the cost of living crisis worse.

In response to points made by Conservative Members—I am sad that the hon. Member for South Cambridgeshire (Anthony Browne) is no longer in his place—I say that the tax increase is regressive. Figures from the income tax calculator published in The Guardian a few weeks ago show that earners of £100,000 a year could end up paying proportionately less in national insurance than those on middle incomes if the increase goes through. They will pay just 7% of their overall salary, which is the same proportion as someone on £20,000 a year. The Treasury’s claim that this is progressive is not borne out when those earning between £30,000 and £50,000 will be the hardest hit by far. Someone on £50,000 a year will pay national insurance contributions of about 10% of their gross salary after April, and those on £30,000 will pay about 9% of their gross salary. From April, it will be about 13.25% on most earnings up to £50,000, but just 3.25% on any income above that threshold. We in the Labour party know that people need help now, and that is why the Government should act now.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister, James Murray, and I do hope that hon. and right hon. Members will listen to the wind-ups. I realise that a lot of people have come in for the next business, but we have had a long debate and we want to hear from the shadow Minister and the Minister.

[James Murray (Ealing North) (Lab/Co-op)]

Today, we have heard from hon. Members representing people across the country about why it is so important that the Government cancel their national insurance hike on working people and their jobs. My hon. Friends the Members for Merthyr Tydfil and Rhymney (Gerald Jones), for Easington (Grahame Morris), for Vauxhall (Florence Eshalomi), for Ellesmere Port and Neston (Justin Madders), for Cynon Valley (Beth Winter), for Birkenhead (Mick Whitley) and for Liverpool, Riverside (Kim Johnson) all spoke powerfully about how so many of their constituents are struggling with the costs of living and how those pressures have been rising rapidly in recent months. My hon. Friends the Members for Sheffield South East (Mr Betts), for Salford and Eccles (Rebecca Long Bailey) and for Luton South (Rachel Hopkins) spoke about the fundamental unfairness of the Government’s approach with their national insurance hike.

In September last year, the Government pushed their national insurance hike through Parliament in a day. From the very start, it was clear that this was a deeply unfair tax hike that would hit working people and their jobs. We urged the Government to think again and reverse course, but they refused do so, and they have kept refusing to reverse course, despite people facing mounting difficulties in making ends meet. Inflation, already at its highest rate in decades, is forecast to hit 8% in April. Energy bills that have been rising rapidly are set to soar next month, and now the crisis in Ukraine will bring even greater pressure on the cost of energy, petrol and food. Yet in four weeks’ time, the Government’s tax rise will kick in, costing the average family £500 a year. It is the worst possible tax rise at the worst possible time.

Back in September when the Government pushed this tax rise through Parliament, we immediately knew how unfair it would be. The Government’s own published assessment of this tax rise made that clear. Their tax information and impact note, which Ministers had to approve, set out what effect this tax rise would have. The note looked at this tax rise from a number of angles, including how it performed against the Government’s so-called family test. As hon. Members may remember, the family test was introduced by David Cameron in 2014. When the then Prime Minister announced this new test, he said he wanted to

“strengthen and support family life in Britain”.

His plan to do so was to make sure that

“every single domestic policy that government comes up with will be examined for its impact on the family.”

That test was applied to the national insurance increase last September, and the outcome of that test was to warn of

“an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

That warning alone should have given Conservative MPs reason to stop in their tracks and think again. They should have stopped and listened to the Institute for Fiscal Studies warning of this tax rise involving

“a large, unjustified and problematic bias against employment and labour incomes”.

They should have listened to the TUC general secretary, Frances O’Grady, warning of the hit faced by young and low-paid workers with this tax rise. They could have listened to any of the many voices against their plans, as the impact of this tax rise on people’s ability to make ends meet was clear back in September.

The impact on jobs and businesses was clear then, too. Again, the Government’s own assessment made that clear. It admitted the tax rise would impact on business decisions on wage bills and recruitment. The Federation of Small Businesses described the tax rise as

“devastating for small businesses and the local communities they serve.”

The British Chambers of Commerce described it as a

“hammer blow to jobs growth”.

Despite all those warnings, the Prime Minister and the Chancellor refused to think again. The Conservatives refused to listen to our calls for those with the broadest shoulders to contribute more. Their response to the low-growth, high-tax economic cycle they have created was to make working people foot the bill.

Even if some Conservative Members managed to hold their noses and vote with the Prime Minister and the Chancellor last September, it is astonishing that they still feel able to do so after all that has happened since then. Energy bills have been rising fast and now are set to soar. We know that energy bills will rise by an average of more than £600 this April. Inflation is already—[Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I said this a few minutes ago but as I have a larger audience I think it is worth repeating. We have been having a debate, the shadow Minister and the Minister are responding to that debate, and hon. and right hon. Members want to hear what they have to say. I hope those present will do them the courtesy of being quiet, so we can listen to the shadow Minister first and then the Minister.

[James Murray]

Thank you, Madam Deputy Speaker. As I said, if Conservative Members managed to hold their noses last September to vote with the Prime Minister and the Chancellor, it is truly astonishing that they still feel able to do so now after all that has happened. Energy bills have been rising fast and are set to rise by more than £600 in April. Inflation is at its highest rate in decades and is set to rocket to 8% next month.

What is more, the Government’s arguments that they need this money for social care have been left in tatters. Not only have they failed to produce a plan to fix social care, but we know that Ministers looked the other way as billions of pounds of public money were handed out to fraudsters and written off. They ignored the warnings on fraud, they were careless with waste and they are now expecting working people to foot the bill for their mistakes.

If that was not bad enough, it is now clear that private sector workers will be asked to pay twice. As our new analysis shows, private sector workers will face a double whammy as almost all the rise in their employers’ contributions is set to be passed on to workers through lower wages.

Ministers, and indeed some of their Back Benchers, often try to pretend that the cost of living crisis is entirely the result of global factors, but that argument simply does not hold true. Most damagingly, it ignores the fact that the Government could, and should, be doing far more to help people to make ends meet. The truth is that decisions by this Government over many years have left us uniquely exposed to rising gas prices. From cutting gas storage, to leaving our homes poorly insulated and failing to invest in renewables and nuclear, this Government’s approach means that rising energy costs hit people in the UK much harder than they should.

The truth is that the Government have failed to step up and offer people the help they need with energy bills now. Labour’s plan is to give everyone £200 and those in greatest need £600 to help to meet energy costs. That would be funded with a one-off windfall tax on North sea oil and gas producers’ profits. The alternative from the Chancellor is to land everyone with a buy now, pay later loan and to announce a council tax rebate that some of those in the greatest need will never even see.

The truth is that, when it comes to the tax rise we are debating today—an unfair tax rise on working people, a tax rise of £500 for the average family, a tax rise on businesses and jobs—the responsibility begins and ends here. Conservative MPs voted six months ago for that tax rise. Last week, the Minister admitted to me that the Government recognise the impact the tax rise will have on working people. Today, they have a chance to change course.

Today, we are asking all Members to join us in asking the Government to think again. When the Government first introduced this tax rise on working people and their jobs, it was blindingly unfair. Far from asking those with the broadest shoulders to contribute more, the Tories showed their true colours and went straight for a tax rise on 27 million working people. Since then, the case against the tax rise has got stronger and stronger. With energy bills rising and about to soar and with inflation set to hit 8%, the struggle for millions of people to make ends meet is getting harder by the day. Now is the time to change course and help people to face the tough months ahead. Now is the time to send a message to the Chancellor ahead of his Budget on 23 March. Now is finally the time to do the right thing and cancel this unfair tax rise.

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

It is a privilege to close the debate on behalf of the Government and I echo the words of my right hon. Friend the Chief Secretary to the Treasury about the situation in Ukraine. Our thoughts are, of course, with the men, women and children struggling to comprehend and respond to the day-to-day realities of the Russian invasion.

I turn to the specifics of the motion and the health and social care levy. We must—and we will—press ahead. In fact, as the hon. Member for Ealing North (James Murray) recognised, legislation has already been debated and enacted. Introducing the levy was a tough but responsible choice, which is what good government is all about.

My hon. Friend the Member for Broadland (Jerome Mayhew) said that these are good proposals and that we need to spend the money on health and social care. The levy is a means to tackle a number of crucial ends: tackling the backlog in our national health service and aiding its recovery from the challenges of covid, while finally enacting long-term reform of social care, an issue that too many Governments have ducked for too long. As my hon. Friend the Member for South Cambridgeshire (Anthony Browne) said, other Governments have simply put it on the “too difficult to do” pile. As he recognised, it needs serious and sustained funding. A record £13 billion a year on average will now be invested in the NHS and social care by way of a new UK-wide 1.25% ringfenced levy based on national insurance contributions and an equivalent increase in dividend tax rates.

Many Opposition Members, including the hon. Members for Merthyr Tydfil and Rhymney (Gerald Jones), for Ellesmere Port and Neston (Justin Madders)—[Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. It is getting very noisy again. Please respect the Minister, who is winding up the debate. Let us listen to what she has to say.

[Lucy Frazer]

Thank you, Madam Deputy Speaker. I was just highlighting the number of Opposition Members, including the hon. Members for Easington (Grahame Morris) and for Liverpool, Riverside (Kim Johnson), who challenged the Government, as others have, on their approach to the cost of living. But the plain truth is that we recognise the pressure that people face. We have done what we can to ease that pressure and will continue to explore other measures.

Frankly, our actions speak for themselves. During the pandemic, we provided more than £400 billion of direct support to the economy, protecting millions of jobs and livelihoods. The hon. Member for Cynon Valley (Beth Winter) said that we should invest more, but we are spending more than £600 billion on gross public sector investment over the course of the Parliament.

The hon. Member for Leeds West (Rachel Reeves) said that we should have acted on the cost of living in September. But we did. The Government are providing support worth more than £20 billion across this financial year and next that will help families with the cost of living. We provided that funding not just in September; we have consistently tried to support those on the lowest incomes. As the hon. Member for Vauxhall (Florence Eshalomi) mentioned, it is important that we support those who need it most and, since 2010, Conservative Governments have kept lower-paid people out of tax. The income tax personal allowance threshold has increased by over 90%, meaning that a typical basic rate taxpayer now pays £1,200 less a year than they would have done without our changes.

A number of Members have discussed whether the system we are introducing is progressive. The hon. Member for Luton South (Rachel Hopkins) and the hon. Member for Cynon Valley challenged that, but it obviously is when 14% of taxpayers are paying 50% of the tax and the highest 2% of taxpayers are paying 20% of the tax. As well as that, the levy will ensure that those on the lowest income get the most support. In our reformed system, total social care spend on the least wealthy 20% of older adults will be £4.24 billion in 2021-22 in a steady state compared with £0.51 billion on the wealthiest 20% of older adults. That shows that the lowest wealth quintile continues to receive the most state support.

The hon. Member for Salford and Eccles (Rebecca Long Bailey) and the hon. Member for Luton South said that we should cancel this tax because it was unfair, and they both quoted the IFS. When we introduced this levy, Paul Johnson, the director of the IFS, said that this was an “overall much needed” reform to social care and that

“unavoidable pressures on the NHS are being funded through a broad based and broadly progressive tax increase”.

I turn to the very important topic of fiscal responsibility. As my hon. Friends the Members for South Cambridgeshire and for Broadland commented, if we do not bring in this tax rise, the alternative is more borrowing. We cannot and should not abdicate our fiscal responsibilities. As my hon. Friend the Member for North Norfolk (Duncan Baker) said, we spent £400 billion during the course of covid. We are in debt and we need to be honest about the situation. Our level of debt means that we are vulnerable to shocks, including changes in interest rates and inflation. The public finances are stronger as a result of our early, bold action to support the economy during the pandemic and because we did not shy away from tough choices.

Our new fiscal rules demonstrate fiscal responsibility and will keep the public finances on track in the years to come. [Interruption.] The hon. Members for Gordon (Richard Thomson) and for Aberdeen North (Kirsty Blackman) talked about young people, but if we do not bring in these taxes—[Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I do not think the Minister will speak for that much longer, so please will hon. Members keep the noise down and hear what she has to say?

[Lucy Frazer]

If we do not bring in this taxation, we will have future generations left paying bills in our stead.

In conclusion, this has been an important and constructive debate concerning issues that matter deeply and on which we as a Government will not compromise. Being in Government is about making the best possible decisions on behalf of the British people. The health and social care levy is emblematic of that responsibility. It is the right policy at the right time for the right reasons.

Question put and agreed to.

Resolved,

That this House calls on the Government to cancel its planned 1.25 percentage point rise in National Insurance Contributions that will cost families an average of £500 per year from April 2022.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I will now suspend the sitting. The Division bells will ring two minutes before we resume informally to hear President Zelensky’s address.

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.

Public Service Pensions and Judicial Offices Bill [Lords]

Rosie Winterton Excerpts

Report stage
Tuesday 22nd February 2022 Commons Chamber

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

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

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

New clause 1—Guidance to public service pension scheme managers on investment decisions—

“(1) The Public Service Pensions Act 2013 is amended in accordance with subsection (2).

(2) In schedule 3, paragraph 12(a), at end insert ‘including guidance or directions on investment decisions which it is not proper for the scheme manager to make in light of UK foreign and defence policy’.”

This new clause would enable the Secretary of State to issue guidance to those authorities that administer public sector pension schemes, including the local government pension scheme, that they may not make investment decisions that conflict with the UK’s foreign and defence policy.

New clause 2—Investment decisions in funded schemes—

“(1) Section 3 of the Public Service Pensions Act 2013 is amended in accordance with subsection (2).

(2) After sub-paragraph (3) insert—

‘(3A) Scheme regulations must require an authority’s investment strategy to ensure that investment decisions are consistent with the Glasgow Climate Pact 2021.’”

This new clause would require public sector pensions schemes to ensure future investments are consistent with the climate science, ambitions and timeframes agreed at the COP26 UN Climate Summit.

New clause 3—Investment decisions in funded schemes: fossil fuel assets—

“(1) Section 3 of the Public Service Pensions Act 2013 is amended in accordance with subsection (2).

(2) After sub-paragraph (3) insert—

‘(3A) Scheme regulations must require the fund to have removed all investment in fossil fuel assets by 2030.’”

This new clause would require public sector pensions schemes to disinvest from fossil fuels by 2030, by removing fossil fuel assets from their investment portfolios, securities transactions and balance sheets.

New clause 4—Review of the impact of this Act on fairness—

“(1) The Chancellor of the Exchequer must commission a review of the impact of this Act on fairness to members in receipt of pensions to which this Part applies.

(2) The Chancellor of the Exchequer must prepare and publish a report on this review within six months of the passage of this Act and must lay a copy of the report before Parliament.

(3) The review under subsection (1) must include an assessment of the impact of the provisions of this Act on women.

(4) The review under subsection (1) must make recommendations as to whether further legislation should be brought forward by the Government to close the public service pensions gap between men and women.”

This new clause would require the Government to report on the impact of this Part on fairness, especially with regards to women.

New clause 5—Guidance—

“(1) Within six months of the passage of this Act the Chancellor of the Exchequer must lay before Parliament a copy of guidance to members of pension schemes affected by this Part.

(2) The purpose of the guidance under subsection (1) is to ensure members are able to make informed choices about their pensions.

(3) The Government must provide a free helpline or online service which members can use to receive further guidance about their pension.

(4) Within six months of the day on which the guidance is published the Government must lay before Parliament a report on its effectiveness in achieving the purpose in subsection (2).”

This new clause would require the Government to publish guidance to members of pension schemes affected by this Part and allows for provision of a helpline or online service to offer further assistance.

New clause 6—Impact on the recruitment of new holders of judicial offices—

“(1) Within 12 months of the passage of this Act the Government must commission an evaluation of the impact of this Act on recruitment of new holders of judicial offices and on the diversity of the judiciary.

(2) The Chancellor of the Exchequer must prepare and publish a report on this evaluation and must lay a copy of the report before Parliament.”

This new clause would require the Government to publish an annual update on progress on recruiting new members to the judiciary and increasing diversity.

New clause 8—Compensation of losses incurred by closure of legacy schemes—

“(1) The Chancellor of the Exchequer must review how a loss incurred by a member with remediable service who is transferred to the new scheme under section 80 and—

(a) reaches the required number of years of pensionable service to retire with full benefits under the legacy scheme, and

(b) is unable to access the full value of those benefits because they must continue to work to retire with full benefits under the new scheme

could be compensated.

(2) The Chancellor of the Exchequer must prepare and publish a report on this review within two months of the passage of this Act and must lay a copy of the report before Parliament.”

This new clause would require the Government to review how losses arising from the “pension trap” could be compensated, and to report on the review within two months of the passage of the Act.

New clause 9—Equality impact analysis of provisions of this Act—

“(1) The Chancellor of the Exchequer must review the equality impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passage of this Act.

(2) A review under this section must consider the impact of those provisions on—

(a) people with protected characteristics (within the meaning of the Equality Act 2010), and

(b) the Government’s compliance with the public sector equality duty under section 149 of the Equality Act 2010.

(3) A review under this section must include a separate analysis of each separate measure in the Act, and must also consider the cumulative impact of the Act as a whole.”

This new clause would require the Government to review the equality impact of the provisions of this Act, and to report on the review within six months of the passage of the Act.

New clause 10—Report on losses incurred by closure of legacy schemes—

“The Chancellor of the Exchequer must consult with the relevant trade unions and other bodies representing pension scheme members and report within 6 months of the passage of this Act on the options available for addressing in a non-discriminatory manner any loss incurred by a member with remediable service who is transferred to the new scheme under section 80 and—

(a) reaches the required number of years of pensionable service to retire with full benefits under the legacy scheme, but

(b) is unable to access the full value of those benefits because they must continue to work to retire with full benefits under the new scheme.”

This new clause would require the Government to consult with the trade unions and other bodies representing members of the pension schemes who are affected by the “pensions trap” and to report on the options available to address this issue without causing discrimination.

Government amendments 1 to 17.

Amendment 24, in clause 92, page 67, line 39, leave out paragraph (c) and insert—

“(c) leave out paragraph (c).”

This amendment removes from the calculation of the employer cost cap the effect of changes in the cost of connected schemes, including the cost of rectifying the unlawful discrimination.

Amendment 22, page 67, line 39, leave out paragraphs (c) and (d).

This amendment removes from the Bill the amendment to Section 12 of the Public Service Pensions Act 2013 that would allow Treasury directions to determine whether the cost control mechanism would operate.

Amendment 23, page 70, line 27, leave out clause 93.

Government amendments 18 to 21.

[Mr Clarke]

It is a pleasure to open this debate. I wish briefly to remind Members why this is such an important piece of legislation that we must ensure we get right. Our public servants provide vital services on which we all rely and their unwavering commitment has been particularly vital during the covid pandemic. We have an obligation to continue to provide guaranteed pension benefits to reward those workers for their dedicated service, and must do so on a fairer basis and in a way that ensures that pensions are affordable and sustainable in future.

Let me turn to the amendments that I have tabled, which are largely technical ones to ensure the Bill works smoothly. New clause 7 makes it possible for the judicial pension scheme 2022 regulations to be subject to the made affirmative procedure rather than the draft affirmative procedure, which is the usual process for judicial scheme regulations. The Bill closes all current judicial pension schemes to future accrual on 31 March this year, so the change is necessary to ensure that the new pension scheme is in place for all judges on 1 April. There will therefore be no gap in judicial pension arrangements.

The provision in the new clause is an exceptional use of the made affirmative procedure in respect of judges’ pensions. It is limited to scheme regulations for the judiciary that are made within 28 days of Royal Assent, so it will be used only to make the judicial pension scheme 2022 regulations. It will not apply to any other public service pension schemes, which are generally made under the negative procedure, nor will it apply to any future amendments to judicial pension schemes.

The remainder of the amendments that I have tabled are minor and technical, with the aim of ensuring that the Bill is applied effectively and consistently. Amendment 19 relates to the commencement provision and simply ensures that different provisions in the Bill can come into force at the appropriate time.

Amendments 1 to 14 simply clarify the wording in various clauses in chapter 1. Together, the amendments give schemes the flexibility to implement the prospective and retrospective remedy in the way that is most efficient for their members.

Amendment 16 ensures that the remedy applies correctly to local government scheme members who were formerly members of other public service pension schemes. In particular, it makes sure that former members of other schemes are not disadvantaged because they previously participated in a scheme with a lower normal pension age.

Amendment 17 provides that the power under clause 81 for local government new scheme regulations to make provision regarding special cases must be exercised in accordance with Treasury directions issued by either Her Majesty’s Treasury or the Department of Finance in Northern Ireland.

On judicial offices, amendment 18 changes the extent of schedule 3 to ensure that if Welsh Ministers or the Department of Justice in Northern Ireland make subsequent changes to the list of devolved offices in schedule 3 using the power conferred on them by clause 125(1), incorrect text will not remain in statute in other parts of the United Kingdom.

Amendments 20 and 21 change a reference to the Special Educational Needs Tribunal for Wales to its new title, the Education Tribunal for Wales, thereby ensuring that a relevant sitting in retirement office is created in the Education Tribunal for Wales.

--- Later in debate ---

[Robert Jenrick]

As a matter of law, what the hon. Member is saying is not correct. Pensions within the public sector, as elsewhere, are regulated. They were regulated by the Public Service Pensions Act 2013, and they will be regulated by this Bill. He has been speaking for more than 15 minutes, and it is not clear to me whether the SNP is in favour or against BDS. It is important that he makes clear his position.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am keen that we do not just have a whole debate about BDS. I want the amendments to be addressed, and there are a few other speakers trying to get in.

[Peter Grant]

I made the point much earlier that the amendment is not about BDS; BDS is not mentioned anywhere in it. Going back to the question of whose money it is, we can go round in constitutional or legalistic circles, but morally that money belongs to the people who rely on it for their pensions. If members of the pension scheme want to make strong representations to their trustees, saying, “I do not want to profit in my pension from investments that benefit countries that act in breach of international law”, why is it such a bad thing for pension scheme members to be allowed to make those representations to the trustees? Why is it such a bad thing for the trustees to be allowed to say, “At the request of our members, we will take a decision that might not deliver quite such a high yield for the pensioners, but the pensioners are happy to accept that, because they will be comfortable in their consciences about where the money is going and where the profits are coming from”?

We cannot support new clause 1, and we are minded to divide the House on it later. My final point is that every pension fund trustee has a duty entirely to look after the interests of their pensioners and future pensioners. I do not want to see anything being done that gets in the way of that. We will support the Bill on Third Reading, but I hope it will come to Third Reading without new clause 1 included. The fundamental point is that the £17 billion mistake was made by the Government. If we eventually pass the Bill into law to be an Act of Parliament that makes pensioners or their employing authorities pick up part of that tab, it has not done enough. I fear that by tonight we will still have a Bill that has not done enough and that the Government will not be made to take full responsibility for a mistake entirely of their making.

Cost of Living Increases

Rosie Winterton Excerpts

Monday 24th January 2022 Commons Chamber

[Robin Millar]

To the point about opinion being divided, I refer the hon. Gentleman to a survey on 25 November from north of the border in which 13 different policy options were presented. He is correct that the economy and jobs are important, as they came third in that ranking. The issue of independence—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Interventions must be brief. We have a lot of Members who wish to speak and I will have to put a time limit on almost immediately.

[Tommy Sheppard]

I conclude by saying that it is a complete deceit to criticise the Scottish Government for not doing something that the House actively prevents them from doing. The simple way to test the truth of that is to let Scotland become an independent country, which is what people voted for at the last election in Scotland. Let them have that choice and, when it comes, we will put before the people a complete proposition that will answer all the questions that the hon. Member for Moray wants and many more. I believe they will choose a different way, an alternative way, of running their economy than what we get from this Tory Government.

[Several hon. Members rose—]

[Madam Deputy Speaker]

Order. I am sorry, but as I said, I will have to put a time limit of six minutes on speeches; otherwise, people are not going to get in. I have been able to warn the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) about that.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Due to interventions, which obviously give others extra time, I am afraid that after the next speaker I will reduce the time limit to five minutes.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am afraid that I will have to reduce the time limit to four minutes. I have been able to warn the next speaker, Christine Jardine.

--- Later in debate ---

[Allan Dorans (Ayr, Carrick and Cumnock) (SNP)]

The rise in the consumer prices index will disproportionately affect those already facing pressure on disposable income. The rise will affect low-income families, including the disabled, the long-term sick, the unemployed and those on a low fixed income with no prospect of overtime or salary increases, who on average spend a larger proportion of their income on energy costs and food and will therefore be more affected by the price increases.

I make specific mention of the 3.8 million women born in the 1950s who were cruelly robbed of their pensions by the Government, who are still being unfairly denied full restitution for their loss and who continue to suffer an appalling injustice. I also mention the 3 million people, mainly self-employed and directors of small limited companies, whom the Chancellor callously excluded from any financial support during a pandemic.

There is sadly another, perhaps less reported consequence of inflation: an increase in crime. In 2014 Professor Richard Rosenfeld, an American criminologist, concluded:

“Inflation is the most powerful economic predictor of crime.”

I have several examples from research data to prove that case, but time prevents me from explaining them. I am not suggesting that everybody in financial difficulties, poverty or debt will resort to theft or other crime to make ends meet, pay their bills or feed their families, but unfortunately we too often hear anecdotal stories of parents arrested for shoplifting essential items such as baby formula, nappies and food that will enable their families to survive.

While it is impossible to predict how much crime will increase, history tells us that if inflation continues to increase, crime will also inevitably do so. Therefore, to mitigate the effects of a predicted increase in all crime, which will put pressure on our already overworked police, courts, prison, probation, social work, women’s aid and other support services in the criminal justice system, it is essential that the Government provide further immediate financial support for those services. Not to do so now would be negligent in the extreme. I also urge the Government to take steps to reduce those levels of poverty and spiralling debt in the rest of the United Kingdom by introducing measures such as we have in Scotland, including the game-changing £20 child payment, the 1,140 hours of free childcare a year for eligible children, free prescriptions, free sanitary products for women and girls, free bus travel across the country for everyone over 60 and the disabled—briefly expanded to include young people between the ages of five and 21— and free university tuition in our world-class universities for our young people.

I suggest that savings could be made by not renewing weapons of mass destruction on the Clyde, currently estimated at £205 billion. Spending could be stopped on vanity projects, including the new royal yacht, or on the refurbishment of Buckingham Palace, estimated at £360 million. There was also the shambolic process that resulted in the loss of £4.3 billion to fraud during the pandemic being written off by the Chancellor.

With independence, we could keep crime levels at least where they are, if not further reduce them, by gathering revenue from the massive energy production soon to power all the UK’s 30 million or so homes. More importantly, as an independent country in the European Union, we would have full control of our economic levers, which would help to control inflation and deliver a more equal, progressive and prosperous—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I call Alan Brown.

Charter for Budget Responsibility and Welfare Cap

Rosie Winterton Excerpts

Monday 10th January 2022 Commons Chamber

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

I beg to move,

That the Charter for Budget Responsibility: Autumn 2021 update, which was laid before this House on 5 January, be approved.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this we will take the following motion:

That the level of the welfare cap, as specified in the Autumn Budget and Spending Review 2021, which was laid before this House on 27 October 2021, be approved.

[Mr Clarke]

The charter for budget responsibility is, at its core, about fiscal responsibility. Its existence is born of the belief that stable public finances are the foundation for building a stronger economy for the whole country. Its purpose is to set out the Government’s approach to managing the nation’s finances openly so that the British people know that their money is being handled carefully and to give us a credible framework for action, underpinned by the Office for Budget Responsibility, which the OECD remarked is considered by many as a “model independent fiscal institution”.

Given the challenges that we currently face, hon. Members may reasonably ask whether this is the appropriate time for such a debate, but the credibility of the Government’s fiscal plan is what has allowed us to act as we have and will allow us to act again if we need to. In other words, we are updating the charter not simply for the sake of it, but to maintain what the Chancellor called at the Budget

“the path of discipline and responsibility”.—[Official Report, 27 October 2021; Vol. 702, c. 275.]

Almost two years ago, in the face of the pandemic, we took bold and decisive action to commit unprecedented amounts of public money to support jobs and businesses across the UK. That, including the support recently announced in response to the omicron variant, has helped to prevent long-term scarring to the British economy. The International Monetary Fund praised our

“impressive, coordinated, and extended policy response”,

while the OBR said that the costs of inaction would have been far higher.

The Government are proud of the decisions that we have taken, and that we continue to take, but we are not complacent. The pandemic has left us with the highest level of borrowing since the second world war and, at nearly 100% of GDP, public debt will reach its highest level since the early 1960s. That is clearly not sustainable over the long term.

It is important to keep debt under control for three key reasons. First, our level of debt means that we are more vulnerable to changes of interest rates and to inflation. In fact, OBR analysis from July found that our sensitivity of debt interest spending to changes in interest rates is almost twice what it was before the pandemic. A single percentage point increase in interest rates and inflation would increase annual spending on debt interests by over £20 billion in 2024-25, which is more than the entire Home Office budget for that year.

Finance (No. 2) Bill

Rosie Winterton Excerpts

Committee stage
Wednesday 1st December 2021 Commons Chamber

Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Government amendments 2 and 3.

Clause 28 stand part.

Clauses 53 to 66 stand part.

Clauses 84 to 90 stand part.

That schedule 12 be the Twelfth schedule to the Bill.

Clause 91 stand part.

That schedule 13 be the Thirteenth schedule to the Bill.

Clause 92 stand part.

New clause 5—Reviews of Economic Crime (Anti-Money Laundering) Levy—

‘(1) The Government must publish a review of the operation of the Economic Crime (Anti-Money Laundering) Levy by 31 December 2027.

(2) The Government must publish on 31 December each year until the establishment of a register of beneficial owners of overseas entities that own UK property—

(a) an assessment of the contribution to the effectiveness of the Levy that such a register would make; and

(b) an update on progress toward implementing such a register.’

This new clause will put into law the Government’s commitment to undertake a review of the Levy by the end of 2027, and require them to publish an assessment every year until a register of beneficial owners of overseas entities that own UK property is in place an assessment of what impact such a register would have on the effectiveness of the Levy, and progress toward the register being established.

New clause 7—Reporting on provisions relating to publication of information about tax avoidance schemes—

‘(1) The Chancellor of the Exchequer must, within three months of the passing of this Act, lay before the House of Commons and publish a review of the impact of measures contained within this Act that relate to the publication by HMRC of information about tax avoidance schemes.

(2) The review undertaken by the Chancellor under subsection (1) must include commissioning an independent assessment of the information published by HMRC about disguised remuneration loan schemes.

(3) The independent assessment under subsection (2) must include consideration of the following with respect to the purposes set out in section 85(1)(a) and (b) of this Act—

(a) HMRC’s approach to the loan charge scheme; and

(b) recommendations for altering that approach.

(4) The Government must before the review commences make a statement to the House of Commons stating what efforts have been taken to guarantee the independence of the assessment under subsection (2).

(5) The Government must within three months of the publication of the review under subsection (1) make a statement to the House of Commons stating which of any recommendations under subsection (3)(b) it will be accepting, and give reasons for any decision not to accept one or more of those recommendations.

(6) The Government must every six months after the publication of the review in subsection (1) make a statement to the House of Commons stating what progress has been made towards implementing any of the recommendations that arise from subsection (3)(b) which the Government has accepted.’

This new clause would require the Government to review the impact of measures contained in clause 85 of the Bill, and as part of that to commission an independent review of the information published by HMRC about disguised remuneration loan schemes. This independent assessment must consider HMRC’s approach to the loan charge scheme and consider recommendations for altering that approach, and the Government would be required to state to the House its response to the recommendations.

New clause 12—Assessment of Economic crime (anti-money laundering) levy—

‘The Government must publish within 12 months of the Act coming into effect an assessment of the impact of Part 3 of this Act (Economic crime (anti-money laundering) levy) on the tax gap and how it has affected opportunities for tax evasion, tax avoidance, and other economic crimes.’

This new clause would require an assessment of the impact of the Economic crime (anti-money laundering) levy on the tax gap and on opportunities for tax avoidance, evasion and other economic crimes.

New clause 13—Review of avoidance provisions of sections 84 to 92 on the tax gap—

‘The Government must publish within 12 months of the Act coming into effect an assessment of the provisions in sections 84 to 92 of this Act on the tax gap in the UK.’

This new clause would require an assessment of the impact of the provisions on tax avoidance in clauses 84 to 92 on the tax gap.

New clause 14—Review of provisions of section 85 and publication of information on overseas property ownership—

‘(1) The Government must publish within 12 months of this Act coming into effect an assessment of the impact of the provisions of section 85 about the publication by HMRC of information about tax avoidance schemes.

(2) This assessment must include consideration of the impact of the publication of a register of overseas property ownership upon the promotion of tax avoidance in the UK.’

This new clause would require an assessment of the impact of the provisions of clause 85, and consideration of the impact of publishing a register of overseas property ownership.

New clause 15—Review of Economic crime (anti-money laundering) levy rates—

‘(1) The Government must within six months of the Economic crime (anti-money laundering) levy coming into effect lay before the House of Commons an assessment of the effectiveness of rates of the levy in section 54(2) in achieving the levy’s objectives.

(2) The assessment under (1) must also make an assessment of how the effectiveness of the levy would be changed if each of the rates of the levy in section 54(2) were (a) doubled and (b) tripled.’

This new clause would require the Government to assess the effectiveness of the proposed levy rates and of levy rates twice and three times as high.

[Lucy Frazer]

This Government are committed to making the UK a hostile place for economic crime and illicit finance. In recent years, the Government have taken major steps to achieve this goal. For instance, our landmark 2019 economic crime plan set out 52 actions to be taken by both the public and private sectors to ensure that the UK is not exploited by such criminals. However, as we set out in our report on progress on the economic crime plan earlier this year, both the public sector and the private sector must contribute if we are to deliver these reforms. The Bill therefore introduces a new economic crime levy, which aims to raise around £100 million a year to help to fund additional action on money laundering. The revenue raised through the levy will supplement the Government’s investment, announced at this year’s spending review, of £18 million in 2022-23 and £12 million a year in 2023-24 and 2024-25 to tackle fraud and money laundering.

The Bill also introduces new powers and penalties to clamp down further on tax avoidance, tax evasion and other forms of non-compliance, building on the Government’s strong record in this area.

--- Later in debate ---

[Dame Margaret Hodge]

I will speak to new clause 15, which stands in my name and those of right hon. and hon. Members from across the House, and I rise in support of new clause 5, which was moved so eloquently by my hon. Friend the Member for Ealing North (James Murray). New clause 15 is complementary to the first part of new clause 5.

I shall start by making a general observation. It seemed to me, when the Minister spoke, that either she does not completely understand what is going on in the world of economic crime, particularly in relation to the UK’s position on that; or there is a deliberate attempt by the Government to downplay it so that they do not take the very necessary action that is available and, as SNP Members and the Labour Front Benchers said, is probably as oven-ready as any legislation that we have. The Government are simply choosing not to implement it.

I will give an example of how the impact of economic crime is filtering and seeping into our politics. There are two Russian kleptocrats, Viktor Fedotov and Alexander Temerko—both of whom have questionable backgrounds and whose money has questionable origins—who are involved in a company called Aquind, which is trying to build an energy cable from Portsmouth to France. It is a controversial proposal. As for the origins of the money that they are using to fund this project, for me, it is money that has probably been stolen from the Russian people. That is really where that money comes from.

What is particularly disturbing is that when we look at the accounts of Aquind, the company, and the donations being given by one of the individuals, Alexander Temerko —the other one hides himself—to Conservative parties and to Conservative Members of this House, we see that it is enormous. There is a bit of time this afternoon so I am going to take the liberty of reading through the list. The right hon. Member for South West Surrey (Jeremy Hunt) has received money on a number of occasions from Aquind. The right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) has received money from Aquind of Russian origin. The hon. Member—

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

Order. I will just check that the right hon. Lady has informed other Members that she was going to mention them.

[Dame Margaret Hodge]

Thank you, Dame Rosie; I have not, because I did not realise that there would be so few people in the House this afternoon that I would have the opportunity to do so.

What I can say is that 24 Members of Parliament—all of them Conservative Members, many of them Front-Bench Members, some of them with ministerial positions—have received money from Aquind or from Alexander Temerko. I can also tell the House that further parties have received such money and that some former MPs and local parties have received money. I hope that is in order, and thank you for correcting me, Dame Rosie. The impact of economic crime and economic activity on our politics is a worrying trend that has been growing exponentially over recent years.

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[Dame Margaret Hodge]

My hon. Friend makes a really important point.

I think, having taken guidance from you, Dame Rosie, that I am at liberty to mention the political parties. Am I correct?

[The First Deputy Chairman]

The right hon. Lady can mention former Members and the location of political parties. What she cannot do without having informed them previously—it would be very discourteous—is to refer to existing Members of the House.

[Dame Margaret Hodge]

I am very grateful for the advice you have given me, Dame Rosie. I apologise, and I will write to the Members I had mentioned before you drew that to my attention.

If I can mention the political parties, they are those in Reading West, The Wrekin, Staffordshire Moorlands, Morecambe and Lunesdale, North Somerset, Great Yarmouth, Selby and Ainsty, Northampton North, Colchester, Daventry, Corby, Vale of Clwyd, Berwick-upon-Tweed, Richmond (Yorks) and North Swindon. If I can mention the former MPs, and these are quite important, there is one in particular—the former MP for Stockton South, James Wharton, who was of course very involved in the campaign—

[The First Deputy Chairman]

Order. I have a little further clarification. If any of those Members are in the House of Lords, it is not in order to refer to them. I know it is quite complicated, but it is best to get it right.

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Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Clauses 69 to 71 stand part.

Clause 93 stand part.

That schedule 14 be the Fourteenth schedule to the Bill.

[Lucy Frazer]

VAT is our third-biggest tax. It raised £130 billion in 2019-20, making a major contribution to the public finances. It helps to pay for our schools, hospitals and police throughout the UK.

Now that we have left the EU, we are free to set our own VAT rules and are already using that freedom to create a fairer, more robust tax system. We have altered how VAT is paid on low-value consignments from overseas suppliers. We have also implemented changes to passengers’ policy and introduced a zero rate on women’s sanitary products. On top of all that, we are reviewing the UK funds regime, including the VAT treatment of fund management fees. We are establishing an industry working group to review how financial services are treated for VAT purposes. As I have illustrated, this Government are focused on using our new freedoms to create a VAT system that is ready for the future, and the measures in the Bill build on that work.

Some clauses being discussed today will be of most relevance to businesses and consumers in Northern Ireland. The UK has implemented the Northern Ireland protocol in a way that seeks to protect the UK internal market. Today’s clauses play a part in achieving that objective by allowing Northern Ireland businesses and consumers to have the same economic opportunities as those in the rest of the UK.

Finally, as Members will be aware, freeports are an important part of the Government’s levelling-up agenda. We see them as central to our goal of sparking regeneration, creating jobs and inspiring innovation throughout the country. One of the clauses that we are debating today supports the delivery of their VAT benefits.

Let me turn to the clauses themselves. The second-hand car sector in Northern Ireland relies heavily on sourcing vehicles in Great Britain for resale in Northern Ireland. Clauses 68 to 70 will together ensure that second-hand car dealers in Northern Ireland can continue to sell cars and other motor vehicles sourced in Great Britain and the Isle of Man on an equal footing with their counterparts in the rest of the UK.

Under the Northern Ireland protocol, the VAT second-hand margin scheme is not available for goods in Northern Ireland if they were purchased in Great Britain or the Isle of Man. This means that motor vehicle dealers in Northern Ireland must account for VAT in full on sales of these vehicles rather than on the profit margin. That would disrupt the UK’s internal market, potentially increase prices for consumers or costs for businesses and risk undermining the trade in motor vehicles in Northern Ireland altogether. It is only right that the Northern Ireland used car industry has the same economic opportunities as that of the rest of the country. That is why the Government are actively discussing arrangements with the EU to enable the margin scheme to continue in Northern Ireland for cars sourced from Great Britain.

Clause 68 provides the legislative basis for an interim arrangement that allows dealers in Northern Ireland to continue to use the VAT second-hand margin schemes for vehicles sourced in Great Britain once an agreement is reached with the EU. This interim arrangement will be available for motor vehicles first registered before 1 January 2021. It will end once the second-hand export refund scheme is introduced.

Clause 69 introduces a power to bring in an export refund scheme, which the Government intend to apply to second-hand motor vehicles. The aim of this permanent scheme, once introduced, is to give dealers in Northern Ireland a comparable financial outcome to the margin scheme. The clause achieves this by enabling businesses to claim a refund equivalent to VAT on the price they paid on used vehicles. The scheme will be available for used motor vehicles moving to Northern Ireland and the EU from Great Britain. Legislation to implement the scheme will be introduced once we have held further discussions with the industry.

Clause 70 simply makes some consequential changes to VAT to limit the zero rate for export or removal of goods where they are subject to the margin scheme. This is a technical measure that will ensure that businesses are not at an advantage compared with before the end of the transition period. Businesses will still be able to export goods at zero rate outside the margin scheme. This ensures consistency of treatment across the UK.

These clauses are necessary to ensure that the motor vehicle sector and consumers in Northern Ireland are not disadvantaged. Taken together, they will benefit the 500 businesses that trade in used cars in Northern Ireland.

Clause 71 makes changes to extend a VAT exemption to the importation of dental prostheses. Before the end of the transition period, such prostheses were supplied by registered dentists or dental technicians between Great Britain and Northern Ireland, and were exempt from VAT because an exemption applies to domestic sales. However, following the end of the transition period, the exemption no longer applies to the movement of these goods between GB and Northern Ireland. As the VAT that is due cannot be recovered by the registered dentist, there is a risk that it might be passed on to patients. The changes made by clause 71 extend the current domestic UK VAT exemption to include dental prostheses imported into the UK, including those moving between GB and Northern Ireland, ensuring that we meet our international obligations, and that VAT treatment between GB and Northern Ireland is consistent.

Clause 93 and schedule 14 concern the treatment of goods in the customs-free zones, which are located in freeports. Freeports will help to regenerate areas across the country and bring prosperity to the regions. The Government have already legislated for a beneficial VAT regime on certain business-to-business transactions while in the free zone of a freeport. Clause 93 makes additional VAT elements to freeports by introducing an exit charge to ensure that VAT is collected on goods that have benefited from a zero rate of VAT in a free zone to prevent tax losses or unintended VAT advantage. It therefore maintains a level playing field for UK businesses.

The clause also amends existing VAT legislation to remove any conflict with the new free zone rules. Finally, the clause gives HMRC the power through regulations to adapt the exit charges provisions as necessary. This will ensure that the exit charge is correctly targeted—for instance, to prevent any abuse of the VAT zero rate. Clause 93 and schedule 14 therefore prevent tax loss by introducing an exit charge, and provide clarity to free zone rules by amending existing legislation that may conflict with them.

Our VAT measures take advantage of the opportunities following our exit from the EU to allow our businesses to prosper. I urge the Committee to ensure that clauses 68 to 71, and 93, stand part of the Bill, and that schedule 14 be the fourteenth schedule to the Bill.

Conduct of the Right Hon. Member for Uxbridge and South Ruislip

Rosie Winterton Excerpts

Tuesday 30th November 2021 Commons Chamber

[Robert Largan (High Peak) (Con)]

I was not planning to contribute to the debate, but the hon. Lady has been talking about conflicts of interest and timely waits, and she also said earlier in her speech that when the Labour party sees people breaking the rules, it acts. I have written to the hon. Lady twice, and I have written to the Leader of the Opposition a number of times over the last few months, about her former flatmate Ruth George, who has an atrocious record when it comes to anti-Jewish racism. It was she who said, when Luciana Berger quit the Labour party, that she and other members of her group were funded by Israel. Will the hon. Lady respond now to that conflict of interest, and agree that she should not be in the Labour party any more?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Gentleman must resume his seat. He should not be attacking personally in that way.

[Anneliese Dodds]

Just for the record, as the hon. Member stated in his own letter, those issues have been taken up and dealt with. [Interruption.] He said that in his own letter. Perhaps he needs to go back and reread it.

We surely cannot stand idly by and allow this situation of cronyism to continue. The current regime of standards and rules on the conduct of Ministers relies too much on convention, in these unconventional times. It gives the Prime Minister the power to act as judge and jury even when his own conduct is in question. That is why my party, the Labour party, has come forward with a five-point plan to clean up our politics, to strengthen and uphold standards in public life, and to protect taxpayers’ money from the egregious waste and mismanagement that we have seen during the pandemic.

We would start by banning second jobs for MPs, with only very limited exemptions, to make them focus on the day job, not the one on the side. We would stop the revolving door between Government and the companies that Ministers are supposed to regulate, banning ministers from taking lobbying, advisory or portfolio-related jobs for at least five years after they had left office. We would stop Conservative plans to allow foreign money to flow into British politics, and we would create strict rules to stop donations from shell companies. We would end the waste and mismanagement of taxpayers’ money with a new office for value for money along with reform of procurement. Finally, we would establish a new, genuinely independent integrity and ethics commission to sit across Government, with the power to investigate Ministers, take decisions on sanctions for misconduct, and ban former Ministers from taking any job linked to their former roles for at least five years after leaving office.

[Alexander Stafford (Rother Valley) (Con)]

I am very confused by what the hon. Lady has said, because I am under the impression that three current Front-Bench Labour parliamentarians in the House of Lords work for lobbying companies. How can you say what you have said at the Dispatch Box—

[Madam Deputy Speaker]

Order. The hon. Gentleman must not refer to the hon. Lady using the word “you”, because that is me.

[Alexander Stafford]

I apologise, Madam Deputy Speaker. How can we talk about these issues when current members of the Labour Front Bench work for lobbying companies? It is hypocrisy of the highest order.

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[Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)]

Two weeks ago, I stood in this spot and spoke about how parliamentary time was being wasted by the Prime Minister wanting to save one of his own corrupt former MPs; today, we have the opportunity to stand here and consider why we should put up with this.

We and people outside this place are living in a society of staggering inequality. We have thousands relying on food banks, with wages pitifully low and the cost of living extremely high, yet we have a Prime Minister who oversees the consistent approach of raiding benefits, keeping wages low and increasing taxes for the working poor, yet rewarding big business and those of accumulated wealth while turning a blind eye to wealthy tax dodgers. He is a Prime Minister with his own agenda—a Prime Minister who is a democracy denier, stood on a hill of sleaze. That is exactly why it is right that we have brought forward this motion in the name of my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford).

The Prime Minister’s Government and his leadership have failed—from Brexit lies on buses to gleefully telling of handshaking with covid patients lying stricken in hospital beds. We have seen cash for honours, cash for contracts, texts for tax breaks, cash for curtains—I am trying to fit all this in—and handouts for wallpaper. Time and again, we see who he really is—a natiform metaphor for corruption, collusion and institutional sleaze engrained in this Tory party. We need always to remember that those who hide vast sums of money or hoard their wealth in offshore accounts are not hiding it from the authorities—oh, no, Madam Deputy Speaker—in the UK, they are the authority. The Prime Minister himself registered on his interests his stay at a luxury Spanish villa as being provided free of charge by the family of Lord Goldsmith, who, by mere coincidence the Tories will claim, had been handed a peerage and a ministerial job after an electoral defeat. Yet, at Cabinet Office questions last Thursday, the Minister had the temerity to claim:

“There is no link between party donations and nominations to sit in the House of Lords.”—[Official Report, 25 November 2021; Vol. 704, c. 436.]

In the same session, in relation to the contributions—or lack of—of the Tory treasurer in the Lords, the Minister said that it was about, “Quality not quantity”. Apparently, this is our democracy in action.

Let me make this clear: in my opinion, there is nothing noble about the men and women who are sitting in that place—nothing—and even less so when they buy their place in there and their ermine robe—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Gentleman should not be directly criticising members of the House of Lords. So I want him to readdress that in his speech. He must not continue to do that. He should move on to his next subject.

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[Marion Fellows (Motherwell and Wishaw) (SNP)]

I truly wish it was a privilege and a pleasure to follow the hon. Member for Hitchin and Harpenden (Bim Afolami). Has he heard of the word “mandate”? Actually, the one he knows really well is “deflection”.

I had hoped that the Prime Minister would step up to the mark when he assumed high office. I tell my granddaughters that I am disappointed, not angry, when they conduct themselves badly, but I am truly disappointed and angry, but not surprised, with the current Prime Minister, given his predilection for saying what he thinks people want to hear, and changing his mind and breaking promises when it suits.

I wish Scotland were not part of this Union, but while we are, SNP MPs like me must and should censure the current Prime Minister for dishonourable conduct that reflects badly on the UK both here and internationally. The Prime Minister seems to believe that it is okay to say one thing and do another, or to plough ahead with policies, in the middle of a pandemic, that cause real hardship to ordinary families and even more so to our vulnerable communities. Woe betide any person or organisation that gets in the way of what the Prime Minister and the Conservative party see as their divine right to govern how they like. Their attacks on the Parliamentary Commissioner for Standards and on MPs who disagree are vile and undermine all independent checks, which are supposed to protect us all from abuses of power. The Westminster system is broken, and the sooner Scotland can break free of it, the better.

This Prime Minister thinks he can say or do what he likes without hindrance. We as MPs owe it to our constituents to challenge him and his Government to disabuse them of that notion, hence this motion today. Pork barrel politics is now the norm for this Conservative Government. It is much more likely that a Tory marginal seat will receive Government funding than an area that truly needs and deserves it. Seven out of 10 Cabinet Ministers were in low-priority most developed areas, but first in line for significant funding. As we say in Scotland, they do not even put a face on it. The Good Law Project has mounted a legal challenge to the levelling-up fund allocation to assess whether the funding is based on Tory ministerial bias and toeing the party line on certain issues. The Prime Minister believes in helping cronies and Ministers, and the devil take the hindmost. He enjoys unaccountable power, and can and has dismissed independent advice on alleged breaches of ministerial rules.

I want to focus this speech on how what the Prime Minister has done affects disabled people and families with disabled children. We are still in the middle of a public health crisis and inflation is now running at 5%, energy companies are failing, the cost of heating our homes is even higher and mortgage increases are likely. These things worry people in Scotland and the rest of the UK—I work hard for my constituents, and I challenge this Government on a daily basis to make their lives better—but none of this seems to concern this Prime Minister. What matters to him is money and protecting those who have it. There is yet another case going through the courts raised by two employment and support allowance claimants who are claiming that the Department for Work and Pensions acted unlawfully and discriminated against disabled people by not giving the uplift to those on legacy benefits. This sleazy UK Government, headed by a Prime Minister who does not understand how disabled people struggle to live, must look to the Scottish social security system, which is based on the principles of dignity, fairness and respect.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.

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[Marion Fellows]

On a point of order, Madam Deputy Speaker. May I ask the Member to withdraw the remark about the worst health record in the world? I want to save him from embarrassment in the press.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am sure the hon. Lady will understand that I am not responsible for what the hon. Gentleman says. I am sure—[Interruption.] Order. I am sure that if he feels he has said anything that is incorrect, he will want to correct the record.

[Lee Anderson]

I might make a slight correction here: perhaps I should have referred to the drug deaths, which are the worst in the western world.

What we need to chat about is the Westminster leader of the SNP, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), who has been very quiet about the £270,00 he has rinsed from outside earnings since he was elected to Westminster in 2015. It would take the average worker in Scotland 11 years to earn that much money yet he stands over there every single Wednesday talking about poverty when his greedy snout is firmly in the trough; and remember this is on top—

[Madam Deputy Speaker]

No, no: it was made very clear at the beginning of this debate that we were not going to insult each other. The motion is about the conduct of the Prime Minister so perhaps we can take the temperature down a little.

[Lee Anderson]

Thank you, Madam Deputy Speaker. I am just trying to create an argument and my closing comments will back up what I am saying now.

The right hon. Gentleman has not even apologised for the drunken loutish behaviour of his own MPs who during a trip to Gibraltar just a few weeks ago were spotted staggering around—

[Madam Deputy Speaker]

The hon. Gentleman must resume his seat. He is straying a long way from the motion. He is also referring to certain Members; I do not know whether they are here or not, but he should have notified them if he was going to refer to them. I suggest he resumes his speech and bears in mind the points I have made, because I would hate to think the public were looking at us and thinking that this has just become a slanging match.

[Lee Anderson]

rose—

[Owen Thompson]

On a point of order, Madam Deputy Speaker. The Member is making clearly erroneous accusations against Members that are simply not true; I ask for your guidance on how the Member can remove those comments and correct the record.

[Madam Deputy Speaker]

I think I made my views very clear. First, it is very important not to make references to Members who are not here if the hon. Member for Ashfield (Lee Anderson) is accusing them of something; secondly, I hope we can maintain an element of courtesy in this debate—although it is not going well so far in the hon. Gentleman’s speech.

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[Lee Anderson]

I thank my right hon. and learned Friend for his sensible intervention. I only have to look at my constituency, Ashfield, one of the poorest in the country, and at neighbouring Bolsover, Don Valley and Rother Valley—all those places have had millions of pounds of investment. The Prime Minister has also launched our plan for jobs, helping people get back into work. We are cutting taxes, we are boosting wages—we are helping working families.

I am going to stop picking on the SNP, because I want to talk about the massed ranks of the Labour party. I am struggling to see them at the moment. Despite pretending to be bothered, they could not be bothered to turn up today. They seem to think that there is a war raging in France at the moment and that it is acceptable for thousands of illegal migrants to cross our channel every single day. They really need to get a grip.

Another sign that the Labour party has lost the plot is that it wants to replace our armed forces with “human security services”—a shift from the classic armed forces to a gender balanced, ethnically diverse human security services tasked with dampening down violence. Imagine that, Madam Deputy Speaker: a peace-loving British tank—

[Madam Deputy Speaker]

Order. This is a motion about the Government. I am afraid the hon. Gentleman needs to bring his remarks to a close. I want him to resume his seat. I call Wendy Chamberlain.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. There have been a lot of interventions. As a result, I will have to take the time limit down to three minutes. I have been able to warn the next speaker, but I urge colleagues to be aware that if they continue to take interventions, not everyone will get in.

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[Paul Holmes (Eastleigh) (Con)]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I will take the point of order, but I feel quite strongly that the debate should not be constantly interrupted by points of order which are, in fact, matters for debate.

[Paul Holmes]

As a new Member of Parliament, Madam Deputy Speaker, I need to ask your advice. Is it acceptable in the House to use the word “liar”, and to accuse a Member of lying?

[Madam Deputy Speaker]

The hon. Gentleman may not have been in the Chamber at the beginning of the debate, but the Chairman of Ways and Means made it very clear that, in the particular circumstances of this debate, some language that could not normally be used is allowed because of the nature of the motion.

[Alan Brown]

For the record, the slogan on the bus was a downright lie.

This is a Prime Minister who gave us an illegal prorogation of Parliament, and was willing to break international law. This is a Prime Minister who clearly does not respect democracy, and is seeking to undermine it further. We have the introduction of voter ID, and lifetime votes for expatriates because he thinks that that they are more likely to vote Tory. He has given himself the power to call an election. We have seen the attack on the Electoral Commission, the privatisation of Channel 4, the attempts to install Paul Dacre as chair of Ofcom, and the secret freedom of information clearing house. All those are further levers to manipulate and to hold on to power. Moreover, this a man who once conspired to have a reporter beaten up, and who was sacked from his own job as a journalist for lying in a story. As we have heard, he also continues to stuff the House of Lords with cronies and donors. It is outrageous that he suggested to the Liaison Committee that that was necessary to counteract the power of trade unions.

All this explains why the Prime Minister rushed to the defence of Owen Paterson over paid lobbying. So many of my constituents ask me how I can put up with the antics in this place, but one thing I can tell the Tories is that this is driving people towards independence.

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[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I have to keep people absolutely to time.

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[Richard Thomson]

I thank my hon. Friend for that intervention, and she says it very eloquently and succinctly. We have a crisis of confidence in this country. We have a crisis of confidence in the Prime Minister, who is clearly not fit for the job with which he has been entrusted. This is being aided and abetted by the silence and complicity of far too many Conservative Members, and I cannot wait to see which Lobby the Scottish Conservative contingent, in particular, chooses to go through this evening.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Because of that intervention, I am afraid that the final speaker is going to be able to have only two and a half minutes, unless the SNP spokesperson would take a little less.

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[Pete Wishart]

Absolutely and utterly. It would take all day—longer than I am allowed—just to list the corruption and sleaze in even the scantiest of detail. Conservative Members are up to their necks in it. They might wish, as they have been doing all afternoon, that the public did not care about it, but the public care very much. I will tell them who they have to blame: the very man mentioned in the motion. It is their Prime Minister who has led them to fall in the polls. I thought they would be rushing to join us this evening—come and roam in the gloaming with us in the Aye Lobby as we censure the Prime Minister—because he has treated them appallingly, almost to the point of cruelty. They are having to defend themselves against their constituents. They are actually having to say to their constituents that Peppa Pig is not a Government Minister, such is the confusion that abounds. They should join us tonight: they know it is the right thing to do. The Prime Minister has treated them appallingly and they should help us this evening.

The Prime Minister has gone from being Conservative Members’ brightest Brexit asset to being their biggest liability. Forget about being led to the top of the hill; they have had to carve out a new gorge and mountain range for the amount of mountaineering they have had to do. That is why they should help us. They thought they would saunter to their next election victory, but the Prime Minister has sorted that.

I have to say to my right hon. Friend the Member for Ross, Skye and Lochaber that I am a bit conflicted by the motion. I am conflicted not in the sense that I do not think we have a disgrace of a Prime Minister—somebody who should not get within several feet of Larry the cat, let alone the No. 10 sitting room—but because this Prime Minister is the best recruiting sergeant that we have for the cause of Scottish independence. What would we do without him? [Interruption.] They are all agreeing with me on the Government Benches. He is! More than anybody else, he has made sure that the cause of Scottish independence has been promoted in the way it has and we have to thank him for that. I have to say to my right hon. Friend that I am a little bit conflicted. I will back the motion because the Prime Minister is useless, because he is corrupt, because he is sleazeworthy, and because he lies to this House, but, by God, what a job he has done for the cause of Scottish independence. For that, we have him to thank.

As I have been thanking people over the course of this debate, it would be lax of me not to also thank the Conservative Back-Bench Members. I thank them for their efforts today—they were absolutely fantastic. Something that they always forget when they get up and make their stupid speeches is that the people of Scotland are watching them. They were enamoured by the hon. Member for Ashfield (Lee Anderson)—he is not in his place, which is really unfortunate—because of his disgraceful speech. People of Scotland watched these speeches and thought, “Why on earth would I want to be in this minging midden with these people speaking about my nation in such a way?” For that, I thank the Tory Back Benchers most sincerely. They have done a stellar job today in ensuring that Scottish independence happens.

There is a whole list of things to talk about, but there is just one issue that I will touch on—[Interruption.] My Tory fans are really backing what I am saying today. There is one issue that we really need to touch on because it has been mentioned so often by my hon. Friends: it is that place down the end of the corridor. What a place! The House of Lords is now Ground Zero of Tory corruption. The fact is that all but one of the last nine Tory treasurers were in that place. I looked up all of them. I was looking for philanthropy, good causes and charities, but the only thing that unites them—the only one defining feature—is this rare ability to be able to give £3 million to Tory coffers.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Gentleman is veering very close to the line here. He must not accuse individuals from the House of Lords. I know that he will want to be finishing off quite soon.

[Pete Wishart]

I will obviously follow your strictures, Madam Deputy Speaker. I am not referring to individuals. I am referring to that place down the corridor.

Hardly any of the Labour party turned up today; two Back Benchers came along. I say to them all, “Help us! Help us to clean that place out”. They should not accept any more Members of the House of Lords, for goodness sake. We have this one opportunity, with all this Tory corruption going on.

I was listening to the hon. Member for Oxford East (Anneliese Dodds). I like her. She is one of these genuine Labour Front Benchers. But there was nobody else from the Labour party today. What is that about? This is serious stuff. This is the behaviour of the Prime Minister. We are talking about his conduct generally and we need to make sure that the Labour party is with us in order to take this on.

We will not stop this. We want out of this House. Scotland will be an independent nation. We will not be here for much longer. The Scottish people are observing how business is done here, and they do not like it one bit. They do not like the speeches from the hon. Gentlemen and hon. Ladies on the Back Benches. They cannot stand this Prime Minister. More and more, the Scottish people are looking at this place and deciding that what they want is a nation of their own, a country that they can design in their own fashion and not have it determined by a Tory Prime Minister, and they are going to get it.

Finance (No. 2) Bill

Rosie Winterton Excerpts

2nd reading
Tuesday 16th November 2021 Commons Chamber

Second Reading.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I inform the House that the Speaker has selected the amendment in the name of the Leader of the Opposition.

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[Peter Grant (Glenrothes) (SNP)]

It is my great pleasure to contribute to this debate. Today, 16 November, we mark the feast of St Margaret Atheling, Queen of Scots, one of our two national patron saints and, like the rest of us, an adopted Fifer. For those not familiar with it, I recommend a read through her life story, because a surprising amount of it has lessons that are as relevant today as they were nearly 1,000 years ago, when she was alive. For example, Margaret was revered for her generosity to the poor. She is said to have regularly gone into the streets dressed in poor clothing and given food to the hungry and money to the poor. She clearly believed that earthly power has no legitimacy unless it is used in the interests of others. We might want to bear that in mind in the decisions we take later today, and indeed every day, in this place.

I wish to look at some aspects of the Finance Bill, and at who it benefits and who it damages. I go back to the question I raised with the Minister earlier about prosecutions and penalties against promoters of the loan charge. I was disappointed that the Minister did not answer the question as to how many such penalties had been applied. I would have thought that, if it was that important to the Government, they would have made sure that their officials put that information into the briefing for today. I have no issue with people who deliberately went into loan charge agreements knowing that they were wrong and that they were doing that only to dodge their rightful tax liabilities going through the full legal process. However, a lot of people who signed up to the loan charge did so because they did not understand it or because they were assured by paid tax advisers that it was all okay, and a lot of them did it because they would have lost their jobs if they had not. They get hounded to the ends of the earth—some of them literally get hounded to death—yet very few of the people who made millions out of these schemes have ever been brought to justice. The victims in my constituency have serious doubts as to whether any of the real villains of the piece will ever be brought to justice or indeed whether this Government have any intention of doing that.

When we look at the impact of this Finance Bill, and of the Budget statement it is based on, we must not let ourselves be hoodwinked by the massive impact of other announcements that have been flipped through by the Government in other ways over the past six months or so to try to make it look as though their Budget was not quite as savage as it was. We must recall the £1,000 a year cut in universal credit; the ending of the pensions triple lock, leaving our pensioners more at the mercy of rampant inflation than they were before; and the national insurance hike, which has been trumpeted as the saviour of the health and social care sector, whereas the reality is that, for several years at least, very little of it indeed will go into improving the availability of social care in England. It might be there in three or four years, but this is not a crisis that is going to be there in three or four years—it is a crisis that has been there and has been ignored for far too long.

Of course, sometimes when the Government want to increase taxes, they like to find sneaky ways to increase taxes on low-paid workers in a way that does not make it obvious what they are doing. All they have to do to achieve that is to do nothing. There is nothing in this year’s Finance Bill about the thresholds for the different rates of income tax. There is nothing in it about the level of income at which someone first becomes liable to pay income tax, because they have left it exactly as it was last year in cash terms. With people likely to face inflation of 4%, people on low incomes will either take a real-terms cut in wage of 4%, or if they get enough of an increase to match inflation the Chancellor will say, “Thank you very much. I’ll have a bigger cut of it for myself than I had before.” People on low earnings who are already struggling need an increase of 4% to stand still and to continue to struggle.

The 1.25% increase in the national insurance charge might not seem to be that much; 10p or 50p an hour below the proper living wage might not seem to be that much, but it soon adds up. Take, for example, someone working 40 hours a week on the Government’s new minimum wage of £9.50 an hour, and paying income tax and national insurance according to the rates and thresholds set out in the Bill. Those are exactly the people the Government say the Budget is designed to help. They are exactly the people for whom work is supposed to pay. Now, take the same person but this time getting the real living wage of £9.90 an hour, let their personal allowances and national insurance thresholds keep pace with inflation, and scrap the national insurance increase, leaving it at 12%, instead of 13.25%. The difference in their take-home pay is £800 a year. That does not seem much to those of us lucky enough to be on an MP’s salary, but for those who are just about managing to get through to the end of the week, another £800 a year in their pocket—or £800 taken out of their pocket by the Budget—makes a significant difference. The impact of this year’s Tory cuts alone—they are cuts, no matter what the Minister might say—is that those people are suffering a pay cut of almost 5% in real terms.

We have not even started to look at the more fundamental issues referred to by my hon. Friend the Member for Glasgow Central (Alison Thewliss) and why we need a complete rehash of the entire tax system. Why should somebody who, by an agreed definition, is earning only enough to live on pay income-based taxes at all? Why do we not set tax and national insurance thresholds to match the proper living wage so that the tax authorities have no claim whatsoever on the wages of those earning only just enough to keep them and their family alive?

The Government may well say that times are difficult, that tough choices must be made and that we cannot afford to inflation-proof tax allowances this year, but the tax allowances of some have been inflation-proofed and more—not individuals but businesses that are, for example, lucky enough to be able to afford to buy a casino. In clause 80, on page 63, we see changes to the thresholds for the various rates of gaming duty: the tax that casino operators pay in what is termed the gross gaming yield, which is the difference between the stakes that people pay in and the winnings they take out. It is in effect an income tax on casinos and similar places. Lo and behold, the tax thresholds for casinos are going up by 5.4%, which is higher than the rate of inflation that the Chancellor expects to see. That is on top of their inflation-busting increase last year. They have had an increase of 8.7% over just two years.

To put that into context, a casino with a gross gaming yield of £10 million a year will pay £100,000 less in tax next year than it would have last year, while the poor souls working their tails off in the casino kitchen keeping the clients fed and watered will be paying higher taxes. How can it be right that a casino owner pays £100,000 less in tax while the people whom they employ on low pay in their kitchens and catering departments have to pay increased tax? That is not a necessity; it is a deliberate political choice, and it is the wrong choice.

If only other businesses had as much to celebrate as the casino industry clearly does. Hospitality businesses are—quite rightly—being told to adapt their business models so that all their workers get paid a fair living wage. I have had some quite difficult conversations with hospitality businesses in my constituency that are not happy at that. But why on earth do the Government think it is also the right time to tell them that they must pay more tax on every single job that they create? Why on earth is it right to tell them that the rate of VAT that they will pay next year will be 60% higher than this year? It is ridiculous.

I am not saying that we should not take difficult decisions. The UK’s finances, like those of many western democracies, are in a seriously difficult place. The Minister said that levels of debt and borrowing are affordable. They are—just about—but they certainly are not sustainable. We must turn that around quickly. Difficult decisions need to be taken, but the problem is that, far too often, the Government are happy to take decisions that are difficult for other people but not at all difficult for their friends, chums and millionaire donors. The economic impact of the covid pandemic has almost certainly been made much worse because of their total lack of planning on the economic impact of the action needed. That means nearly all the Government’s support schemes had to be thrown together at almost no notice, which inevitably means they did not achieve what they were supposed to achieve. Very few of them achieved optimal results from day one. Too many people, several million of them, were excluded from support altogether, and almost all the schemes that were implemented turned out to carry levels of fraud risk that were far higher than they needed to be. Billions of pounds of public money has been lost to fraud that would have been avoided if the Government had prepared better in advance.

The economic damage of the pandemic could have been lessened, although we accept it almost certainly could not have been avoided completely, but the economic damage of Brexit could have been avoided completely if, in 2016, people had been told the truth of what it would involve. Let us not forget that the Government’s analysis is that the self-inflicted damage of Brexit is likely to be twice as bad as the economic damage of the covid pandemic.

To a much larger degree than the Government will admit, the tax rises on the poor contained in this Finance Bill are the price of a Brexit that, let us not forget, was rejected by almost two in three voters and every single local authority area in Scotland. If that is the price for Scotland to remain part of the United Kingdom, it is a price I do not believe the people of Scotland are willing to pay any longer.

Interestingly, a standard form of wording that I do not see in this Bill is, “Extent. This Bill shall apply to Scotland.” I do not expect it to be too much longer before those words are no longer part of any legislation passed by this House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call John McDonnell.