Oral Answers to Questions

Toby Perkins Excerpts

Tuesday 16th January 2018 Commons Chamber

[John Glen]

My right hon. Friend makes a sensible point. The Government have empowered the independent Financial Policy Committee to advise them on these matters, and to keep a close watch on the level of debt.

[Toby Perkins (Chesterfield) (Lab)]

20. One trend that alarms me is the false advertising of consumer credit rates. Despite having a perfect credit rating, according to Experian, I was told that M&S Bank would not give me the advertised rate that was supposedly being offered to 51% of its customers. What is the Minister doing to ensure that the Financial Conduct Authority is robust in ensuring that advertised rates are made available to the majority of consumers?

[John Glen]

I am familiar with the hon. Gentleman’s situation and his correspondence with the Financial Conduct Authority. I believe that he has met FCA representatives. The FCA has strong powers to ban products. It has unlimited fines at its disposal and it can order repayments. As the hon. Gentleman knows, 51% of applicants for loans will receive the advertised rate, and those are the terms that the FCA works to.

Business of the House

Toby Perkins Excerpts

Thursday 11th January 2018 Commons Chamber

[Toby Perkins (Chesterfield) (Lab)]

The Government’s welcome review of fixed-odds betting terminals will enable them to change the stakes and many other aspects of FOBT policy without the need for primary legislation. That is welcome, as we do not want the changes to be delayed any further, but it will leave a democratic deficit. Will the Government allow a debate in Government time on the issues relating to FOBTs so that we can ensure that this crucial issue is properly debated?

[Paul Maynard]

We have already had several debates in the House on FOBTs, which I know from my casework are an important issue in my constituency. I urge the hon. Gentleman to apply for all sorts of debates so that we can keep exploring the issue further. An announcement is coming in due course; perhaps his work will hasten its arrival.

Taxation: Beer and Pubs

Toby Perkins Excerpts

Tuesday 31st October 2017 Westminster Hall

[Toby Perkins (Chesterfield) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Dudley South (Mike Wood) on securing this incredibly important debate and the vigour with which he is going about his role as chair of the all-party parliamentary beer group. As chair of the all-party parliamentary group on pubs, I also feel very strongly about the issues that have been raised.

I am not going to repeat all the statistics that the hon. Gentleman laid out. We have already heard many of the financial arguments as to why pubs matter, but the community point is also important. I support the point made by my hon. Friend the Member for Blackley and Broughton (Graham Stringer) about the importance of inner-city pubs. We are seeing so many of them close. We often think about village pubs, but too little is said about those pubs in our communities and on our estates that have really struggled.

It is definitely the case that the pub is the safest place to drink, because there are other things to do there, people do not drink as fast, they have other people around and it is a much more self-regulating environment. That was brought home to me strongly at a meeting I had with a publican who runs the Harley’s bar in Staveley in my constituency. One of his customers had been a regular attender, but stopped going. The publican met him outside the pub as the man was coming back from Morrison’s with bottles of whisky in his bag, and asked him why he was not coming into the pub any more. The man said, “I can’t afford to come in the pub any more.” The publican said that within six months the guy had drunk himself to death, because all those regulating forces were no longer there. The story that we need to get out there is that the pub is by far the safest place for us to drink.

The point about pubs being a big employer of both the young and women has been well made, as has the point about the importance of the pub for tax revenues. I welcome the fact that the campaigning of a wide range of groups finally persuaded the Chancellor to end the beer duty escalator and to cut beer duty between 2013 and 2015. I take issue slightly with what the hon. Member for Dudley South said, because this is a story that I like to tell. The truth of the matter is that the Chancellor who raised most through the beer duty escalator was not Ed Balls but George Osborne. George Osborne took the escalator that Ed Balls had introduced in 2008 and 2009 and escalated it again in 2010, again in 2011 and again in 2012. I support the fact that he ultimately got rid of it, but he milked that cow just as much as Ed Balls did—let us not be in any doubt about that. There was also the big increase in VAT, which has a big impact on our tourism businesses.

The point made by my hon. Friend the Member for Ashfield (Gloria De Piero), and repeated by the hon. Gentleman, about the importance of small breweries’ relief is incredibly important. I really support the fact that the Government have kept that relief.

--- Later in debate ---

[Albert Owen (in the Chair)]

Order. We now resume the debate. Mr Perkins has 41 seconds left, but I will be generous and give him a minute to gather his thoughts. Mrs Anne Main will follow and will have four minutes.

[Toby Perkins]

I will finish with this. We have spoken a lot about beer duty and VAT, but it is crucial that the issue of business rates is addressed in the Budget. Every member of the Conservative party who stood in the 2015 election stood on a manifesto of a comprehensive review of business rates. That seemed to disappear from the 2017 manifesto, but the issue of business rates is crucial. We have the most expensive corporate property tax in all of Europe, and no Government who theoretically profess to be a low-tax Government can continue to see business rates going up in the way that they have. I urge the Government to get away from an over-reliance on business rates at the expense of corporation tax cuts and bring down business rates for our pubs instead.

--- Later in debate ---

[John Grogan (Keighley) (Lab)]

I think that the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) has tempted many of us to renew our acquaintance with pubs in the borders. It is a particular pleasure to take part in the debate, as it was secured by a true champion of the pub—the hon. Member for Dudley South (Mike Wood).

Having retired in 2010 from chairmanship of the all-party group on beer and from Parliament, I might have thought that my days of speaking in such debates were long gone; so I am delighted to say a few words today. In those days I represented the constituency of Selby, which included Tadcaster—still the only town in England that can boast three major brewers. In Keighley, which I now represent, there is one major brewer—Timothy Taylor’s, which dates back to 1858. It is a byword for quality in the beer industry, with brewers who trained at that icon of higher education in brewing, Heriot- Watt University—perhaps the leading university in the field. There was a minor hiccup in relations between Timothy Taylor’s and the all-party group when I voted—it seems so long ago—to ban fox hunting. The then managing director, Charles Dent, promptly resigned his involvement with the group. I can assure the House that this summer in typical Yorkshire fashion, over a pint at Headingley, we let bygones be bygones. I am very much in dialogue with Timothy Taylor’s. There are also breweries such as Wharfedale, Bridgehouse, Wishbone, Haworth steam brewery, Ilkley and, just outside the constituency, Goose Eye.

There has been a lot of talk about statistics; I want to underline just two. One in seven of all the jobs created since 2010 have been in this sector. What has not so far been expressed is how quickly people can rise up this industry; it is, if not unique, then certainly renowned for that. Some £1 billion from Yorkshire goes in taxation from the pubs and brewing industry to the Exchequer—about the same amount that goes from Northern Ireland, as the hon. Member for Strangford (Jim Shannon) said. If only we had a Yorkshire Mayor spending that money! We truly would have devolution.

I want to make four quick points. We should encourage beer exports, and there has been quite a movement towards that from the industry. Some have suggested that export sales should be excluded from the brewers’ volume for duty purposes, as a way of encouraging exports. That should be considered.

The hon. Member for Dudley South was right that under the Labour Government and under the coalition, the beer duty escalator did a great deal of harm. It is good to see the hon. Member for Burton (Andrew Griffiths) in his place, because he achieved what I certainly did not, and I hope that future chairs of the all-party beer group will achieve similar things. He got rid of the beer duty escalator. This is a crucial year for the reputation of the Conservative party and its relationship to the beer industry. Will those three years be known as the Burton interregnum or will we have not just beer duty relief, but rate relief? We clearly need an extension of £1,000 to £5,000 on rate relief this year.

Turning to small breweries’ duty relief, Gordon Brown has been agonising in recent days about his lack of empathy. Whatever the truth of that, he will always be known as the friend of small brewers—it is one of his great legacies—because of that massive change to our economy. At some stage, we will have to look at whether that can be extended. Many family brewers are losing out. They feel that they do not have the advantage of the duty rate relief and do not have the economies of scale that big brewers have.

[Toby Perkins]

Will my hon. Friend give way?

[John Grogan]

I will, in order to gain another minute.

[Toby Perkins]

And because my hon. Friend wants to hear what I have to say, I am sure. On the important point about the relief for small breweries, does he agree that although the policy is excellent, its impact sometimes means that brewers cannot grow any more as they will no longer come under it? Perhaps some kind of tapering to allow brewers to go from small to big would be helpful.

[Albert Owen (in the Chair)]

The hon. Gentleman does not have to take the full minute.

Oral Answers to Questions

Toby Perkins Excerpts

Tuesday 18th July 2017 Commons Chamber

[Mr Hammond]

Yes. The UK oil and gas sector has made a huge contribution to the UK economy, having paid over £330 billion in total in production taxes to date, and supporting over 300,000 jobs. In the next phase of the life of the North sea basin, as many fields come towards the end of their life, we are working with the industry to ensure that we extract every drop of oil and gas that it is economic to extract, that we enable decommissioning, and enable end-of-life fields to be operated in the most effective way.

[Toby Perkins (Chesterfield) (Lab)]

17. Much of the growth is due to the fact that we are spending more on imports, due to the low cost of the pound. The latest figures from the Office for National Statistics reveal that our trade in goods deficit has risen by £2.6 billion over the past quarter and now stands at a staggering £34.4 billion. Does not the extra cost of imports have an impact on the cost of our exports and affect our productivity?

Oral Answers to Questions

Toby Perkins Excerpts

Tuesday 18th April 2017 Commons Chamber

[Mr Speaker]

I call Toby Perkins.

[Toby Perkins (Chesterfield) (Lab)]

Lucky No. 7, Mr Speaker.

[Toby Perkins (Chesterfield) (Lab)]

7. What recent assessment he has made of the potential effect of the UK leaving the EU on the public finances.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

8. What recent assessment he has made of the potential effect of the UK leaving the EU on the public finances.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

We’ll see how lucky, Mr Speaker.

The Government have undertaken a significant amount of work to assess the economic and fiscal impacts of leaving the EU, and they continue to carry out that work. This is part of a continuing programme of analytical work covering a range of possible exit scenarios, including sectoral analysis, but I have to say to the House that we are seeking the best possible deal for the United Kingdom, recognising that there is a range of possible outcomes to the negotiations, and the work being done reflects this. The Government have also committed to keeping Parliament informed, but it would not be appropriate to publish analysis that risks undermining our negotiating position.

[Toby Perkins]

Throughout the last seven years, the needs of the British people have had to play second fiddle to the needs of the Conservative party. As a result, the Chancellor has been forced to disown the manifesto commitment to balance the Budget in this Parliament. Is it not the truth that today’s announcement about a general election is another example of this Government putting their party’s interest ahead of the country’s interests at a time when there is a desperate need for stability in this country?

[Mr Speaker]

The question is about the departure from the EU and the effect thereof on the public finances.

Beer Duty

Toby Perkins Excerpts

Tuesday 7th March 2017 Westminster Hall

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Member for St Austell and Newquay (Steve Double) on securing this important debate. Colleagues have already referred to pubs in their constituencies; if I started doing that, I would have more than 100 to read out, and no one else would get an opportunity to speak. I will not play favourites towards any of them, but I will say that in Chesterfield, our night-time economy is incredibly important to us. I welcomed the liberalisation of licensing hours as a punter, although I must say that as the parent of a 19-year-old I am less enthusiastic than I used to be about our pubs being open until 6 o’clock in the morning.

None the less, pubs are an important part of our economy. When we reflect on their importance, as other Members have done, we must reflect on the contribution that they make to the economy and the community, and the contribution that they make as employers. They employ young people, and predominantly women, which is important to areas where the economy needs more help.

This debate is specifically about beer duty. Understandably, hon. Members have taken the opportunity to reflect on some of the other issues facing pubs, but beer duty is an important issue, and I am glad that the hon. Member for St Austell and Newquay reflected on it. It sends a message from the Government about the importance of pubs to our communities, our society in Britain and our sense of national being. Beer is one of those iconic products of which I think all of us in Britain feel proud.

It is also important to reflect on the fact that if the Chancellor announces something about beer duty today but simultaneously puts pubs through the mill on business rates, not many will raise a glass. Beer duty needs to be seen alongside the impact of VAT and the potentially serious impact of business rates. The previous Chancellor deservedly got credit for cutting beer duty, but we should also remember that he raised it through the beer duty escalator. He came to power in 2010, and it was 2013 before he got rid of it; he milked it as well as abolishing it. It is important to see his record in that broader context.

As the chair of the all-party parliamentary group for pubs, I work closely with the hon. Member for Weaver Vale (Graham Evans) and his all-party parliamentary group on beer. We all collectively recognise the importance of pubs in our communities and our economy. In the spirit of working together with that group, I join him in calling for the Minister and the Chancellor to recognise the value of pubs in the Budget, and to ensure when considering beer duty and business rates that publicans will raise a glass to the Chancellor on Wednesday.

--- Later in debate ---

[The Financial Secretary to the Treasury (Jane Ellison)]

I thank colleagues from all parties in the House for what has been a typically vivid and enthusiastic debate. It has been wonderful to hear so many fantastic pubs and breweries—both large and small—getting a name- check today in the House, which they deserve. I will not repeat them all, because there were so many mentions of people’s local star businesses, but I pay tribute to all of them. Debates such as this one are so valuable, because they allow Members to bring real colour to a debate about duty by demonstrating the impact that duty has had or could have on businesses in their own area.

I particularly thank my hon. Friend the Member for St Austell and Newquay (Steve Double) for opening this debate on behalf of our hon. Friend the Member for Gower (Byron Davies). I know that my hon. Friend the Member for St Austell and Newquay and others here are advocates for the important role that pubs can play; we have heard today about pubs’ community role, as well as their wider economic role.

I congratulate both the all-party group on beer and the all-party group on save the pub for the work they do. Of course, the all-party group on beer is led by my hon. Friend the Member for Weaver Vale (Graham Evans), who took us through his own extensive history of pubs. However, bearing in mind that he was born in 1963, I hope that his experience of Boddingtons in the 1970s came very much at the end of that decade and not at the beginning.

I noted that my hon. Friend the Member for St Austell and Newquay said that it was important that this sector was not overlooked. I can reassure the pub and brewing industries that their interests are never overlooked in Parliament; they have fantastic advocates in Parliament, who are passionate and articulate champions, and they come from up and down the country and from all parties. As a result, industry concerns are regularly brought to the attention of Ministers. I myself have taken part in debates such as this one as a Back Bencher; I responded to similar debates as the Minister with responsibility for public health; and now I am responding to this debate today as the Minister with responsibility for tax.

I will try to respond to as many of the issues raised this morning as I can without repeating some of the points that others have made. As I am sure Members will realise, I cannot pre-empt anything that my right hon. Friend the Chancellor will announce tomorrow. [Interruption.] I will resist all blandishments on that front.

Turning to beer duty rises, the Government of course recognise the importance of the UK pubs sector and its contribution to promoting responsible drinking. I mentioned my previous role as Public Health Minister. In that role I made the case for pubs as advocates of responsible drinking. That was not always the most straightforward thing to do, because there is always a balance in reconciling the undoubted problem our country has with alcohol in some regards against the fact that we love our pub and brewing industry. Actually, pubs are very much the answer in that regard. They bring together those two ambitions: they encourage people to drink responsibly while at the same time doing all the other good things they do, such as providing employment and contributing to community life.

As we have heard, the sector’s footprint covers every constituency across the country. If I am allowed one namecheck, it is for the fantastic Sambrook’s Brewery in my constituency. Along with other Members, I managed to get one of my local ales into the Strangers Bar. I know that many of us have taken that opportunity over recent years. We appreciate the contribution that all breweries—large and small—make to local economies and the wider beer market. The rise in the number of small breweries has increased diversity and choice in the beer market and promoted consumer interest in a much larger range of beers, which has benefited all brewers and the industry as a whole.

We have heard about the action taken on the beer duty escalator since 2013. My right hon. Friend the Member for Tatton (Mr Osborne) deserves the praise he has been given for that. A pint of beer is 10p cheaper than it would have been had the beer duty escalator not been ended in 2013. That has disproportionately benefited pubs, given that two thirds of the alcohol sold in pubs is beer. The British Beer and Pub Association—it stays closely in touch with Members and briefs them—feels that the action taken since 2013 has increased confidence. I heard that in person from the head of a well known brewery who came in as part of the delegation led by my hon. Friend the Member for Weaver Vale last week. As my hon. Friend the Member for Devizes (Claire Perry) said, when we talk to people involved in the industry, we can hear the impact that confidence has. Sometimes it is hard to put an exact figure on its impact on a particular part of our economy, but I have heard that from people.

The BBPA estimates that more than £1 billion is being invested by brewers and pub owners each year, and that impacts on employment decisions across the supply chain. I draw the House’s attention to the ways in which the Government have supported the innovative domestic brewery industry other than by duty cuts and freezes. The shadow Minister noted them in his contribution, and they include supporting the employment of younger people through some of the changes made there, boosting research and development for small and medium-sized enterprises and reducing corporation tax on company profits from 28% in 2010 to 19% from April. In 2020, it is moving to 17%. Cutting the tax on profits encourages reinvestment and innovation.

[Toby Perkins]

Does the Minister recognise that there is a real debate about the value of a reduction in corporation tax on the profits that businesses make as compared with the fact that we have the largest corporate property tax in all of Europe? We are expecting businesses that often are not making a profit to see their business rates tax bill go up and up.

[Jane Ellison]

The hon. Gentleman brings me to the next section of my speech, which is about business rates. I am not surprised that colleagues across the House have raised that issue. We recognise that business rates can represent a high fixed cost for some businesses. I will not rehearse all the facts about the 2017 revaluation. I think we all acknowledge that there was a long gap between revaluations, but I emphasise that for those who face an increase in business rates as a result, there is a £3.6 billion transitional relief scheme. It will support them by capping and phasing in rises in bills. The Chancellor has already said that he is working with the Secretary of State for Communities and Local Government to provide additional support for the hardest hit businesses.

As the hon. Member for City of Chester (Christian Matheson) and others have said, pubs are valued for business rates around the idea of a fair maintainable turnover. An approved guide on the valuation of public houses for business rates has been agreed between the Valuation Office Agency and all five bodies representing pubs, including the British Beer and Pub Association and the Association of Licensed Multiple Retailers. That formula has been agreed, and that is a welcome step that provides more certainty for pub operators over their business rates bill.

It is also worth noting that in the Budget 2016, the Government announced a £6.7 billion business rates reduction package to benefit all ratepayers. I draw the House’s attention to the switch of the annual indexation of business rates from the retail prices index to the main measure of inflation, the consumer prices index, from April 2020. That will represent a cut every year from 2020. In 2020-21, that benefit will be worth £370 million, and it will grow significantly thereafter.

I will turn to a number of the issues raised by Members. A number of people have made the case—I am familiar with it and recently had the chance to hear it in person from industry representatives—that duty cuts boost Exchequer revenues. It is fair to say that even if we allow for other additional tax revenues, the industry analysis we have seen shows that duty cuts still have a net cost to the Exchequer. For example, because the public finances assume an increase by RPI each year, the duty changes from Budget 2013 onwards are estimated to have reduced total alcohol duty receipts by £800 million for 2016-17. That implies that to make up for that, Government would have to raise taxes in other areas of the economy, cut spending elsewhere or increase the deficit. I put it on record that cuts and freezes have a real impact on how the public finances account for things.

A number of Members have raised the issue of lower duty rates on low-strength beer. I recognise some of the challenges around the point at which that line is drawn and around brewing to that level. High-strength beer is taxed more than the equivalent low-strength product, but the 2.8% threshold is set by European Union law and is being reviewed by the Commission at the moment. In the industry meeting, we explored the impact and discussed where the threshold should be.

Members have rightly discussed the challenge around the on-trade and the off-trade and discussed how pubs can encourage responsible drinking. Current rules do not permit the Government to apply a different tax treatment to the same product. We cannot tax alcohol sold in shops at a different rate to alcohol sold in pubs, but we recognise the role that pubs play in promoting responsible drinking. In 2014, we took action on very cheap alcohol by banning sales below duty plus VAT in England and Wales.

Budget Resolutions and Economic Situation

Toby Perkins Excerpts

Monday 21st March 2016 Commons Chamber

[Greg Clark]

On page 84, line 15.

Let me turn to the subject of today’s debate, which is infrastructure and devolution. Those issues will still matter a year from now—indeed 10 years and 100 years from now. In “The Wealth of Nations”, Adam Smith spoke of three fundamental duties of Government: the defence of the realm, the maintenance of law and order, and a third duty that he described as follows:

“the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit would never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.”

We can therefore take it from the father of free market economics that there is no contradiction between faith in free markets and public investment in infrastructure. Indeed, they support one another and this Budget shows how.

The Budget announces new infrastructure investments in every part of the country—from Crossrail 2 in London to High Speed 3 for the northern powerhouse. There can be no more tangible demonstration of our belief in a one-nation economy.

[Toby Perkins (Chesterfield) (Lab)]

rose—

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

rose—

[Greg Clark]

I will not give way.

Not for us the discredited model of a one-city economy, because much as we value London it is wrong to rely on a single centre of wealth creation. Instead, wealth must be created and retained in communities across our nation —hence our ongoing commitment to HS2, a north-south axis linking London to the midlands engine and to the northern powerhouse. Quite literally, we must go further. We must build the vital east-west links needed to unlock the full potential of our great cities beyond London.

The Pennines might be the backbone of England, but frankly they are not the Himalayas. Some of our nation’s greatest cities stretch like a string of pearls across the north—and they can and should be drawn together. That is why this Budget strikes out in a new direction with the key announcement on HS3.

[Toby Perkins]

rose—

[Greg Clark]

No, I am going to make some progress, given the time constraints.

This is a transformative project. In particular, it provides the prospect of a better, faster line between Leeds and Manchester.

--- Later in debate ---

[Greg Clark]

I can certainly confirm that. It is a welcome development that we are following the traditions of our Victorian predecessors with the great revival of railway building, which is so important for the south-west that my hon. Friend so ably represents.

[Toby Perkins]

rose—

[Greg Clark]

I am going to make some progress.

In order to make these investments, we need to continue to make savings. The failure to control current expenditure means not just more borrowing, but that less is available for capital expenditure—a double dose of debt for our children and grandchildren, with financial debt compounded by infrastructure debt. The decisions that we make must be for the long-term good of the nation. This Government are therefore determined to draw upon the very best advice available, including that of Lord Heseltine, who will chair the Thames Estuary 2050 Growth Commission, and that of Lord Adonis, the chair of the National Infrastructure Commission, whose excellent work has informed many of the decisions made in this Budget.

--- Later in debate ---

[Sir Henry Bellingham (North West Norfolk) (Con)]

It is a pleasure to be called early in the debate and to follow the two Front-Bench speeches—particularly the quite superb opening speech by the Secretary of State. I pay tribute to him and his team of Ministers, who serve us really well.

This was a Budget for small businesses and enterprise as much as anything else. I welcome the doubling of small business rate relief and the increase in the maximum threshold for relief from £12,000 to £15,000. I really welcome the reduction in corporation tax, the capital gains tax changes, and particularly the 10% rate on long-term investments in unlisted companies, which will do a great deal for start-ups and business angels. I also welcome the stamp duty changes on commercial properties and the abolition of national insurance for the self-employed.

The other day, I worked out that this is the 40th Budget, including emergency Budgets, that I have been privileged to listen to, but this is without doubt one of the best Budgets, if not the best Budget, for small businesses, enterprise and wealth creation in our communities.

The Opposition have accused the Chancellor of favouring the rich, but let us hang on a moment. In the last financial year, the richest 1% paid 28% of all income tax. That is really quite staggering, and it completely undermines the Opposition’s argument.

[Toby Perkins]

Like other Conservative Members, the hon. Gentleman seems to be celebrating the fact that, under a Government that have seen the rich get much, much richer and the poor get much, much poorer, the rich are actually starting to pay more tax. Would it not be better not only if the top 20% paid more tax, but if the bottom 20% actually got wealthier rather than poorer?

[Sir Henry Bellingham]

I am grateful to the hon. Gentleman for that intervention; he and I get on very well together, and I respect his views. However, I would refer him to the comments by Paul Johnson, the head of the Institute for Fiscal Studies, who pointed out that, over the past few Budgets, higher earners have

“seen huge reductions in pensions tax relief”,

as well as a host of other measures, such as a “clampdown on buy-to-let”, and that they have been “squeezed in other ways”. He points out that this Budget’s impact on income distribution has been “incredibly modest”. That underscores the point that this is a fair Budget and, indeed, one for all our constituents and communities.

In the few minutes I have left, I want to touch on the devolution proposals. I support devolution. The flexibility that comes with making Government money available at the local level and responsive to local aspirations makes sense. I will certainly look carefully at the Secretary of State’s proposals for the combined authority in East Anglia. However, I would ask the Minister who winds up to confirm whether the £30 million a year is new money and whether the £170 million for housing will be spread over 30 years or treated on an annual basis. Could we have a look at that?

I certainly support the idea of devolution, but I am sceptical about the idea of elected mayors, for the following reasons. Back in 2000 and 2001, I was one of those politicians who were vehemently opposed to the now Lord Prescott’s proposals for regional assemblies, on the grounds of extreme cost and empire building. I also took the view that they would probably lead to the demise of the shire counties. I therefore regard the plan to bring in elected mayors with extreme suspicion. We are going to have to look at the cost very carefully. I remember when we discussed the plans for police and crime commissioners four years ago, and the view was that they would cost very little. It was said that the chairman of the authority—who is now called the police and crime commissioner—would sit in the police headquarters at no extra cost, but our PCC now costs £1.37 million and has a large number of staff in a separate building. He has built a mini-empire. The cost of the 41 PCCs across the country comes to £52 million.

Enterprise Bill [Lords]

Toby Perkins Excerpts

Wednesday 9th March 2016 Commons Chamber

[Mr Burrowes]

The impact assessment has been published today. That is important. The Bill has already received some scrutiny in Committee. The Sunday trading proposals were introduced in Committee; they were not in the Bill on Second Reading. The Bill started not in this place but in the House of Lords. Therefore, the Sunday trading measure received no scrutiny in any of the stages in the House of Lords.

Following the consultation, we were promised that the impact assessment would be published, as we would expect with any measure, not least such an important and controversial one. The impact assessment was published today, and it includes several paragraphs about the family test, for which I and others have asked for some time. Back in October, I asked when the family impact test would be published, and I was told that it would be published before the Committee stage. In February, I asked again when it would be published, and I was told that it would be published alongside the Government’s consultation response. That did not happen. After that, I was told that it would be published shortly. It has been published today. I do not think that is acceptable.

[Toby Perkins (Chesterfield) (Lab)]

I pay tribute to the hon. Gentleman for his consistency on this subject. He stood for election in May. He will have known that some Conservative Members would have liked to bring forward such a measure. He must have been reassured that it was not in the Conservative manifesto. As a democrat, how would he be able to face his constituents if he had chosen to vote for the measure, given that his views are so well known and that the Conservative party had not put it in its manifesto?

[Mr Burrowes]

I am a lawyer by profession, and I believe that the hon. Gentleman has asked me a leading question. Plainly, the measure was not in the manifesto. Not only that, but the Prime Minister confirmed on 20 April 2015, in the middle of the campaign, in a letter to the “Keep Sunday Special” campaign:

“I can assure you that we have no current plans to relax the Sunday trading laws. We believe that the current system provides a reasonable balance between those who wish to see more opportunity to shop in large stores on a Sunday, and those who would like to see further restrictions.”

That pretty much sums up my position, on which I have been consistent. The Prime Minister appeared to share my position back in April.

Tax Avoidance

Toby Perkins Excerpts

Wednesday 11th February 2015 Commons Chamber

[Shabana Mahmood]

My hon. Friend makes a powerful point. I agree and I shall come on to that a little later in my speech. We have had an ever-moving, ever-changing story about what the Government or members of the Government knew or did not know and the questions that they asked or did not ask about HSBC. That goes to my central issue of trust: trust is being undermined in our tax system, which absolutely depends on it.

The Government have tried to trumpet their record in recent days, but I am afraid that it is not the great source of pride that they have been trying to pretend it is. We know that the tax gap—that is, the difference between how much tax should be collected and how much is collected—rose from £31 billion in 2009-10 to £33 billion in 2011-12 and now to £34 billion in 2012-13, which is the information available for the latest year.

[Toby Perkins (Chesterfield) (Lab)]

Alongside the appalling impact of the tax gap on our public services and the public finances, does my hon. Friend agree that it has a massive impact on the businesses that are playing by the rules and paying their taxes? To stand up for law-abiding businesses and say that everyone should pay their taxes is not an anti-business argument but a profoundly pro-business one.

[Shabana Mahmood]

My hon. Friend makes an incredibly powerful point. All businesses and all individual taxpayers need to know that the tax system is based on a level playing field, that nobody is getting away with gaming the system, and that when the system is being gamed we have robust measures to deal with it. That is profoundly pro-business and it is also in the interests of individual taxpayers, UK plc and our economy as a whole.

Annual Pension Allowance (Transferred Workers)

Toby Perkins Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Toby Perkins (Chesterfield) (Lab)]

I am pleased to have this opportunity to bring to the House’s attention a matter of significant importance to employees in my constituency who were transferred out of Royal Mail to the IT services provider Computer Sciences Corporation and, I suspect, to many other employees who were transferred out of the public sector. Changes to lump sum pension allowances introduced by the Chancellor in his 2013 Budget have had a catastrophic impact on my constituents’ pension pots and created an accidental discrimination that fits neither the principles nor the spirit of the transfer of undertakings protocol, otherwise known as TUPE.

The aim of this debate is to follow up letters I have exchanged with the Financial Secretary to the Treasury. I feel that his replies thus far have failed to grasp the full unfairness of the situation or to offer appropriate remedy. I aim to show the House that, as the mechanism currently stands, there is gross unfairness towards workers who have been transferred out of public sector pension schemes. I hope that the Minister, when she responds, can explain to my constituents why they have been hit with such a significant tax bill, often on revenues that they have not even yet received, and what further steps the Government can take to ensure that former public sector workers are not unfairly disadvantaged by an arbitrary decision they made several years ago.

Royal Mail has had a long tradition in my constituency. Back in the 1960s, as part of a move to get Government organisations out into the provinces, Royal Mail moved thousands of head office staff up to Chesterfield. It brought with it a Barbara Hepworth statue and a welcome number of high-skilled and pretty well-paid jobs. Royal Mail has been a key employer in the town ever since. The Loundsley Green housing estate was built specifically to house the influx of new workers. However, while it remains an important employer today, many staff have subsequently been transferred out and do the same or similar jobs working on the Royal Mail account on behalf of private outsourcing companies.

The workers whose case I am raising today were transferred from Royal Mail to the IT firm Computer Sciences Corporation Ltd—CSC—in 2003 as part of a contract to outsource all Royal Mail’s IT to the company and retain all the 1,713 staff under the TUPE protocol. At that time, employees had a choice either to leave pension contributions that they had already paid within the Royal Mail pension and start a new separate corporate pension with future contributions with their new employer, or to transfer all their contributions to a new CSC pension and subsequently pay into that. The only choice that appeared to face workers was whether their pension contributions would be safer in one scheme or another and where they would be most likely to get a decent return on the pension contributions to which they were entitled.

Many workers—it is not clear how many—elected to keep their pre-2003 contributions within the Royal Mail scheme and open a new CSC pension with future contributions. However, a combination of the changes to the allowance regime—which was dramatically reduced in October 2010 and further reduced in subsequent Budgets—enforcement of TUPE rights, previous changes made to the allowances on what are perceived to be temporary pensions, and Treasury guidance on what constitutes a temporary pension has led to huge costs being applied to workers made redundant from CSC in recent years.

Revelations in Computerweekly.com about the efforts that CSC has made to stem losses on its involvement with the Royal Mail account suggest that 63% of the staff who originally transferred from Royal Mail into CSC have now been cut. Although exact numbers are not known, it is believed that the majority have left the business completely. That suggests that some 1,082 employees could be affected in this case alone. Some of those will have chosen to move into the CSC pension scheme and will not be affected in the same way.

There appear to be two different ways in which workers have been disadvantaged. First, I would like to raise the case of Michael Randell. Michael had worked for Royal Mail Group for well over 25 years, during which he had saved for his retirement by contributing into the pension scheme. Mr Randell is now 53. Under the terms of his employment, had he remained a Royal Mail employee he would have been entitled to take his pension under early retirement provision if he had left the firm over the age of 50. Therefore, in order to comply with TUPE, CSC arranged to make a notional payment to source an equivalent pension value until he is 60, when he will move on to the Royal Mail pension. Mr Randell’s usual pension contributions are less than £5,000 per year, but when he is made redundant, this one-off notional payment—which would effectively buy an annuity for the next seven years to comply with TUPE regulations, from CSC’s perspective—is classed by the Treasury as a one-year contribution to a second, in this case temporary, pension. In practical terms, it is not a second pension—it is a continuation of the first pension that he has from doing the same job with two separate employers.

At a time when the Government rightly ask employees to put money aside to save for themselves in retirement and to plan ahead, this group of workers, who did precisely that, are being caused huge problems because, back in 2003, they made a decision about which pension scheme they should choose to contribute to, yet they could not possibly be expected to have had foresight as to the implications of that choice.

The intention of the Government’s proposals was to target richer pensioners. In 2010, the hon. Member for Fareham (Mr Hoban) announced:

“It will be targeted at those who make the most significant pension savings. An annual allowance of £50,000 will affect 100,000 pension savers—80% of those will have incomes over £100,000.”

Unfortunately, as Mr Randell’s case has shown, the policy has also hit those on lower incomes with reasonable pensions. The Government have accepted the possibility that individuals on lower incomes could in exceptional circumstances face a sharp increase in the tax charged on their pension, but as I have demonstrated, such moderate language does not reflect the significant numbers that might be affected or the size of the impact on their pension planning.

The second example involves the group of CSC workers who were made redundant in 2012. That was part of a global redundancy programme in which CSC laid off 640 workers. The workers had their CSC pensions taxed as second pensions, whereas if, back in 2003, they had decided to transfer their pensions into the CSC pension scheme, it would all have been seen as the same scheme.

CSC attempted to honour its commitments to its employees by ensuring that they still received as employees of CSC what they would have been entitled to if they had remained with Royal Mail, but that led to those individuals being treated as though they had two separate pensions, although in practice they have been employed in the same job throughout that period. The issue is about how public sector workers whose employer changes, even though their job does not change, are seen as having two different jobs. Although TUPE should protect them from being worse off as a result, in practice they are not protected.

The Treasury viewed the money as having been paid all at once, even though it was received by the workers annually over many years, and the way in which workers’ pensions are taxed by the Treasury meant that people on decent but not in any sense exceptional salaries faced huge tax bills—more than £200,000 in one case that I have heard of—on income that they had not necessarily received.

It is too early to know the total number of people who will be sucked into this unfortunate state of affairs, but taking into account how many have moved from the public sector to the private sector, it might be very high. That raises important questions about the extent to which the Government fully understood the impact of the changes they made to the annual pension allowance when they made them.

The Treasury document, “Restricting pensions tax relief through existing allowances: a summary of the discussion document responses”, revealed:

“The nature of DB schemes means that some individuals on moderate incomes could exceed the AA—particularly where they are in final salary DB schemes and see spikes in pension accrual… The Government is committed to managing impacts on these individuals as far as possible.”

One of these solutions was to allow individuals

“to carry-forward unused annual allowance from up to three previous years, to offset against contributions in excess of the AA in a single year.”

However, the Government recognised that in exceptional cases such mitigation would not be sufficient. The Financial Secretary made that clear in correspondence with me. He said at the time that the Government had consulted on options to give individuals and schemes more flexibility over the payment of charges. On 3 March 2011, the Government announced that individuals with annual allowance charges of more than £2,000 would be able to elect for the full liability to be met from their pension benefit. That obviously made it easier in the short term, but in practice it still means that individuals will lose out, as they receive a lower pension than they otherwise would have done. The fact that they are still taking money out of their future earnings to pay a bill does not seem to fit with the principle of the Government’s measures.

It is ironic that this debate is taking place on the day that the House has again debated the Taxation of Pensions Bill, because the Bill was a missed opportunity to address the plight of TUPE-ed public sector workers who face the unfairness that I have highlighted. The Government have thus far fallen short of the action that is required. The measures that have been put in place are compensatory, but they do not compensate fully. They mean that the workers of CSC and probably many other former public sector workers will lose out on the pension to which they should have been entitled.

The further stages of the Taxation of Pensions Bill provide an opportunity to establish cross-party support for further analysing the effect that pension changes have had on CSC workers, and for setting out a framework in which the unfair nature of the situation can be tackled. I hope that that might happen in another place, as I suggested on Report. The Government’s approach to reforming pensions tax relief was supposed to be based on ensuring that fairness was maintained, but it appears that a loophole has developed that could, in some cases, lead to people losing thousands from their pension.

I would be grateful if the Minister recognised that the measures to alleviate the problem are sticking plasters that aim to provide compensation or to reduce the damage of the proposals, and that what is required is for people who are perceived to have had two jobs, when in reality they had one, not to have to choose to pay a tax bill, which they would not have faced if they were still in the public sector, either all at once or from their future pension income. I look forward to hearing her response on this important issue. I recognise, in bringing this matter to the House, that the Government’s intentions were positive. However, when unintended consequences arise, it is our responsibility to evaluate them and, hopefully, to work together to deliver a fairer outcome for our constituents.