draft Employment Allowance (Excluded Companies) regulations 2016
Employment Allowance (Increase of Maximum Amount) Regulations 2016
draft social security (Contributions) (Limits and Thresholds amendments and national insurance funds payments) regulations 2016
(8 years, 9 months ago)
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The Financial Secretary to the Treasury (Mr David Gauke)
I beg to move,
That the Committee has considered the draft Employment Allowance (Excluded Companies) Regulations 2016.
The Chair
With this it will be convenient to consider the Employment Allowance (Increase of Maximum Amount) Regulations 2016 (S.I., 2016, No. 63) and the draft Social Security (Contributions) (Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2016.
Mr Gauke
It is a great pleasure to serve under your chairmanship for, I believe, the first time, Mr Wilson.
All three sets of regulations before the Committee deal with national insurance contributions and it seems sensible to debate them together, so I am grateful that the Committee has agreed to that. As a matter of course, I can confirm that all the regulations are compatible with the European convention on human rights.
The substance of the two employment allowance statutory instruments was announced in the Chancellor’s summer Budget on 8 July last year, while the NICs rates and thresholds for the 2016-17 tax year were announced as part of the autumn statement on 25 November.
I will begin with the Employment Allowance (Increase of Maximum Amount) Regulations 2016. The Government are committed to supporting businesses that want to expand their workforce. To that end, the employment allowance was first announced in the Budget in 2013 as a reduction of up to £2,000 a year for eligible businesses and charities on their employer NICs bill. In the year 2015-16 the allowance has benefited almost 1.2 million employers, helping to cut the cost of employment in the United Kingdom.
The regulations increase the employment allowance to £3,000 from 6 April 2016, further supporting businesses and charities to enable them to grow. As a result, 90,000 more employers will be taken out of employer national insurance contributions altogether. Also, firms will be able to employ four workers full-time on the new national living wage next year without paying any employer national insurance contributions.
The draft Employment Allowance (Excluded Companies) Regulations 2016 focus the employment allowance on companies that support employment. Under these regulations, as was announced in the summer 2015 Budget, from April 2016 limited companies where the director is the sole paid employee will no longer be able to claim the allowance. That ensures that the allowance is focused where it should be, on its original objective of helping businesses with the costs of employment. The draft regulations have been subject to public consultation with interested parties, and that finished in January. Her Majesty’s Revenue and Customs anticipates, taking this measure into account, that about 1 million employers will benefit from the employment allowance in the next tax year.
Finally, as hon. Members may be aware, the draft Social Security (Contributions) (Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2016 contain some technical detail, so I hope that they will bear with me while I explain. The consumer price index rate of inflation is the basis of indexation for most of the national insurance contribution limits and thresholds. The CPI rate of inflation was minus 0.1% in the year to September 2015. As a result, not all the national insurance contribution limits and thresholds will need to be changed in the 2016-17 tax year. The exceptions to this are the upper earnings limit, the upper secondary threshold, the upper profits limit and the new apprentice upper secondary threshold.
The upper earnings limit is the level of earnings at which employees begin to pay class 1 national insurance contributions at the additional percentage rate. It is aligned with the point at which higher rate tax is paid. The upper earnings limit will be increased from £815 to £827 per week from 6 April 2016 to maintain this alignment. The upper secondary threshold is the level below which employers are entitled to a 0% rate of national insurance contributions on the earnings of employees under the age of 21. Since its introduction in April 2015, the zero-rate earnings band for employees under the age of 21 has supported the jobs of more than 1.5 million young people. The UST will continue to be aligned with the upper earnings limit and will also be set at £827 a week from 6 April 2016.
From April 2016, employers will also be entitled to a reduction in secondary class 1 national insurance contributions on the earnings of eligible apprentices under the age of 25, which will reduce the cost to employers of providing apprenticeships for young people. The new apprentice upper secondary threshold will be the level below which employers are entitled to a 0% rate of national insurance contributions on the earnings of relevant apprentices. Like the UST, it will be aligned with the upper earnings limit, so it will also be set at £827 a week from 6 April 2016.
In relation to the self-employed, the regulations also set the upper profits limit for class 4 contribution liability. The UPL is the level of profits below which the self-employed pay the main class 4 percentage rate of national insurance contributions on profits above the lower profits limit. The UPL will also rise to maintain alignment with the level at which the higher rate of income tax is payable, to £43,000 for the 2016-17 tax year. The regulations also set the prescribed equivalents of the thresholds and limits that I have mentioned for employees paid monthly or annually.
In the 2016-17 tax year, employers will continue to pay contributions at 13.8% on earnings above the secondary threshold. Employees will continue to pay 12% on earnings between the primary threshold and the upper earnings limit, and 2% on earnings above that. This is in line with the Government’s commitment in the National Insurance Contributions (Rate Ceilings) Act 2015 to provide certainty for businesses and employees by locking the main rate of class 1 NICs for the duration of this Parliament.
I need to ensure that the national insurance fund can maintain a working balance throughout the coming year, which the Government Actuary recommends should be one sixth of benefit expenditure for the year. The regulations provide for a Treasury grant of up to 5% of benefit expenditure to be made available to the fund in the 2016-17 tax year. A similar provision will also be made in respect of the Northern Ireland national insurance fund.
I commend the regulations to the Committee.
Rob Marris (Wolverhampton South West) (Lab)
It is a pleasure to appear before you again, Mr Wilson. You seem to be getting a taste for matters financial. Looking around the room, the under-representation of women on this Committee is rather disappointing. In the Opposition’s defence, two of our Back Benchers who were not able to come are women, but there is a bit of a problem on the Government Benches.
When the employment allowance was introduced in 2014, the Chancellor of the Exchequer said in a letter to small and medium-sized enterprises:
“Small businesses are the lifeblood of the economy and I want to make it easier for you to succeed and grow.”
Labour totally supports that. We may not always support the instruments employed by the Chancellor of the Exchequer, but we certainly support that goal. In the same letter, the Chancellor of the Exchequer estimated:
“The Employment Allowance will benefit 1.25 million employers next year”—
—he was referring to 2015. Today, the Financial Secretary says that, after the enactment of the regulations on excluded companies, he estimates the figure will be about 1 million. The figures are similar—a lot of businesses gaining a lot of benefit—but there are some problems with how it has been working out.
In May 2015, Her Majesty’s Revenue and Customs itself published a kind of impact assessment: “Awareness and impact of the Employment Allowance— Research with small employers”, HMRC research report 368. One of the key findings, listed on page 4 of the report, is that
“(69%) eligible businesses with fewer than 50 employees had claimed Employment Allowance at the time of this research (November 2014).”
November 2014 was fairly shortly after this came up, but take-up was not great then. The research also found that
“Non-claimants were more likely to be micro businesses (<5 employees).”
Again, that is a bit of a problem, because we hope to nurture microbusinesses and boost employment by encouraging them, through tax reliefs and other measures, to take on an additional employee or part-time employee.
On the credit side, the findings of the November 2014 impact document included a statement that
“Awareness of Employment Allowance is high amongst both claimants and non-claimants.”
I find it slightly strange that awareness was high among non-claimants, but the report delineates some reasons for that. Furthermore, take-up appears to have gone up: HMRC statistics for April to October 2014 show a 68% take-up rate.
In paragraph 7.1 of the explanatory memorandum for the regulations before us, the take-up rate is estimated to be 89%, which is a considerable improvement in a year and a half. However, one has to look also at the efficacy of the measure, or the lack thereof. No one is quite sure of the number, but there seem to be about 1,200 tax reliefs, and a National Audit Office report found that HMRC was keeping tabs on the efficacy or otherwise of fewer than 300 of them. Regarding the efficacy of the employment allowance in increasing employment, laudable though the goal is, there are some question marks over whether it has altered behaviour as much as its proponents and we would have wished.
On page 28 of the impact report is a table showing the behaviour of employers—the claimants—with regard to investment that would have happened without employment allowance: 20% of employers would have engaged in it anyway, whether or not the allowance existed; 2% would have done some of what they did, but had been able to do more, which is encouraging; and 6% would not have engaged in the activity but for the availability of employment allowance. In terms of taking on additional staff, however, according to table 6.3 on page 29 of the report, the net effect on investment in staff as a percentage of claimants was 6%, but 3% of respondents who were claimants had taken on additional members of staff because of the measure. There are questions to be answered, and the report concludes:
“While take up has been successful and awareness of the scheme is high, it has had relatively little impact on employment.”
As I am sure the Minister remembers vividly, he himself said when the measure was debated in the Public Bill Committee that
“there is a particular problem with including the new clause—assessing how many jobs are created as a result of the allowance, because of the inherent complexity in that matter.”––[Official Report, National Insurance Contributions Public Bill Committee, 21 November 2013; c. 58.]
That was before the measures that we are amending today came into effect. Even then assessment was difficult, but two and a half years later there is still a huge problem measuring whether this tax measure has much of the intended effect on behaviour.
The measure is expensive. The Office for Budget Responsibility certified the figures in a table on the summer Budget 2015 indicating that for the current tax year the employment allowance tax relief would cost the Government £630 million of forgone revenue. That figure stays in the £600 millions through to 2020 in those projections. That is quite a lot of money, even for the Revenue, which deals with very big sums.
Perhaps the Minister can reassure me on this, but employment allowance seems to be a bit of a blunt instrument, because while it has a disproportionate effect—or one hopes it does—on microbusinesses, it will remain available to all businesses of whatever size, unless they are the ones excluded under the regulations I am about to discuss.
I understand that HMRC carried out a technical consultation on director-only companies and the excluded companies regulations before us that ran from 26 November 2015 to 3 January 2016. The Minister may correct me, but I am not aware that HMRC has published a summary of responses to that consultation. I hope he can tell me that I am wrong and that such a summary has been published. There is reference to that consultation in paragraph 8.1 of the explanatory memorandum to the regulations:
“Some stakeholders raised concerns that the measure may be vulnerable to avoidance behaviour”.
I may be misreading this, and the Minister can reassure me if that is the case, but looking at the measure it seems as if a self-employed person who is a company, as it were—the regulations are to do with businesses that are director-only and have one employee—could easily drive a coach and horses through the regulations and avoid their effect by signing up a spouse as a director. That is not uncommon for, say, a plumber who wants to have her husband on the books and maybe even claim the personal allowance, which has now gone up a lot, so there is quite an attraction to do so. We would then have two directors—two employees—off to the races and claiming employment allowance. I may be wrong, but it seems that a spouse—it would not have to be a spouse, obviously—could be on the books as a director or a nominal employee, which would be a body swerve right around the regulations. If those companies were technically limited liability companies, they would no longer be excluded from receiving employment allowance. I seek some reassurance from the Minister on that.
Finally, I turn to the social security measures. I understand the annual uprating and so on, but perhaps the Minister can reassure me. There appears at the bottom of the scale to be some fiscal drag, as I think it is called. While the top end has been uprated in line with the CPI—although in the period concerned, I believe the CPI was in fact negative—the bottom end has not, so the value of money has changed but those paying more would be affected.
I hope the Minister can explain this technical point to me, because I may be misunderstanding it. When taken together, paragraphs 7.6 and 7.7 of the explanatory memorandum—I appreciate it is not the same as the regulations themselves, but many of us find explanatory memorandums helpful—appear to me to indicate that an employer who employs an apprentice will not have to pay employers’ national insurance contributions whatever the apprentice’s earnings level, provided the apprentice is under 25. That is no bad thing, as long as one has an adequate definition within HMRC rules of an apprentice. I think we already do, because of the minimum wage legislation and so on, but perhaps the Minister could, for my benefit, clarify whether the regulations will let employers off the hook, so to speak, for NICs for employees under 25 who are apprentices.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
It is a pleasure to serve under your chairmanship, Mr Wilson, and to see Members who have been on many Committees with me in my short career here. I commend the hon. Member for Wolverhampton South West for his detailed scrutiny of the regulations.
The Scottish National party’s perspective is that the regulations faithfully enact what the Government announced in both the Budget and the autumn statement. In that regard, I do not see anything technically troublesome about the implementation of the regulations. We might disagree about the policy backdrop and we might think that more could be done to encourage the employment of apprentices. In Scotland, for example, an apprenticeship applies only to a full-time job, so we would want more done to enable that to occur. However, in broad terms, given the answers to the hon. Member for Wolverhampton South West, we are content with the proposals.
Mr Gauke
I am grateful for hon. Members’ remarks on the regulations. I will pick up some of the points raised, particularly by the hon. Member for Wolverhampton South West. On the broader issues to do with the efficacy of the employment allowance, the hon. Gentleman talked about take-up. The most recent take-up statistics released in October last year show 1.17 million employers benefiting from the allowance. Around 680,000 employers—48% of all employers—have been lifted out of employer national insurance contributions altogether since the employment allowance was introduced in 2014-15. A further 90,000 employers are expected to be taken out of NICs when the employment allowance rises to £3,000 as a consequence of one of the regulations before us. It is worth pointing out that over 90% of the benefit of the allowance goes to small businesses with fewer than 50 employees.
In terms of what employers do with the employment allowance, that is a matter for them. The hon. Gentleman was right to refer to the debate that those of us who were around at the time had in respect of the primary legislation. The Government were careful not to put a specific number on this, because it depends on how people make use of the sums involved. Ultimately, it is up to employers as to how they use the allowance. We have not set targets for the number of jobs that we expect to be created. According to research by the Federation of Small Businesses, 29% of small businesses will use the employment allowance to boost staff wages; 28% will employ additional staff; and 24% will invest in resources. This is not attributable to one policy, but we are in the position where we have record levels of employment in this country. A measure that reduces the tax liability for businesses, particularly smaller business, plays a role in ensuring that we have a climate in which job creation is encouraged, and it has helped contribute to record levels of employment.
On the cost of the employment allowance, it is forecast to cost the Government approximately £1.4 billion in 2015-16 in tax revenue forgone, and 98% of that tax revenue is to the benefit of small and medium-sized businesses or employers employing fewer than 250 people. On the value for money assessment, the Government will internally review the employment allowance on various criteria, such as take-up levels, to determine the overall value for money of the policy. As a part of this process, we will speak to interested parties to gauge their views of the allowance and to ascertain ways in which their members are using it. However, at this point, we are encouraged by the wide take-up of the employment allowance; it is helping feed through into an environment that is good for employment and good for our constituents. I am sure it is not the intention of the hon. Member for Wolverhampton South West, but I hope that no one who reads his contributions would jump to the conclusion that the official Opposition are looking to abandon the employment allowance in order to save funds to use for other purposes, because that would be damaging for the many smaller businesses in this country that have done so much to ensure that we have such high levels of employment.
Rob Marris
I started my remarks with a quote from the Chancellor of the Exchequer, with which I agree, on support for small business. However, when dealing with revenue and revenue forgone, we must bear in mind the question of opportunity cost. In round terms, the figures that I have show that it is costing £560 million a year; the Minister talked about £1.4 billion. Either way, it is a lot of money. One has to consider whether such revenue support to encourage businesses to grow, a concept that we support, could be better spent by the Revenue in other ways. For that, one needs to measure. It is a question of how one allocates that money, not of support for business.
Mr Gauke
I note the hon. Gentleman’s remarks, which will no doubt be studied closely, probably by someone in Conservative Campaign Headquarters.
The hon. Gentleman and others have raised concern that the single director provisions could be avoided. We do not accept that avoidance behaviour will be as widespread as has sometimes been suggested. There are anti-avoidance provisions in the original legislation, and the proposed measures strike the right balance between maximising yield for HMRC, on the one hand, and ensuring that tax changes do not affect genuine businesses and charities that create employment, on the other hand. The anti-avoidance provision in the National Insurance Contributions Act 2014 provides that employers who would qualify for the employment allowance only by virtue of avoidance arrangements are disqualified. To be entitled to the allowance, companies with a single director cannot simply pay a second employee £10 to requalify. Rather, the regulations will mean that they must pay the second employee enough to accrue a secondary class 1 national insurance contributions liability, which is currently more than £156 a week.
The relief for apprentices under the age of 25 will be simple for employers to claim by inputting information in their payroll software. HMRC published guidance on 2 February 2016 on gov.uk to let employers know how to apply the relief and which evidence they are required to hold to ensure that it has been properly applied. That will include a record of the framework or standard being followed, which has also been publicised via HMRC’s employer bulletin. Ahead of the next tax year, HMRC will work with the Department for Business, Innovation and Skills to circulate the guidance further.
The purpose of the measure in relation to apprentices under the age of 25 is to provide support to businesses, which is helpful in improving the skills of the workforce in the UK. It is right that we use the national insurance contributions system to encourage employers that are undertaking expenditure in that area. The measure will be welcomed by employers, and it will help to achieve very ambitious targets in ensuring that far more people undertake apprenticeships in this country than in the past. We have seen dramatic progress in recent years, and we wish that to continue. The measure on apprentices under the age of 25 is part of that process.
I hope those points are helpful, and I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Employment Allowance (Excluded Companies) Regulations 2016.
Employment Allowance (Increase of Maximum Amount) Regulations 2016
Resolved,
That the Committee has considered the Employment Allowance (Increase of Maximum Amount) Regulations 2016 (S.I., 2016, No. 63).—(Mr Gauke.)
draft Social Security (Contributions) (Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2016
Resolved,
That the Committee has considered the draft Social Security (Contributions) (Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2016.—(Mr Gauke.)
Draft Immigration (Health Charge) (Amendment) Order 2016
(8 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Minister for Immigration (James Brokenshire)
I beg to move,
That the Committee has considered the draft Immigration (Health Charge) (Amendment) Order 2016.
The immigration health charge was introduced in April last year by the Immigration (Health Charge) Order 2015 and is paid by non-European economic area temporary migrants who apply for a visa for more than six months or who apply to extend their stay in the UK. The charge, which is set at the rate of £200 per annum per migrant and at a discounted rate of £150 per annum for students, ensures that migrants, unless they are subject to an exemption, contribute to the national health service in a manner in line with their immigration status.
The full amount of the charge, covering the entire period of stay, is collected by the Home Office up-front as part of the immigration application process. If an application is refused, rejected or withdrawn, the charge is refunded. Those who pay the charge receive NHS care in the same way as a permanent resident, subject to the same clinical need and waiting times, for as long as their leave remains still valid. That means that they only pay charges that a UK resident would also pay, such as dentistry charges and prescription charges in England.
In the first six months since its introduction, the immigration health charge collected more than £100 million in income for the NHS. The Government estimate that the charge could raise as much as £1.7 billion at present value over 10 years. That represents an important source of new income for the NHS—income that is shared between the NHS in England, Scotland, Wales and Northern Ireland using the formula devised by Lord Barnett, and spent as they see fit. Exemptions from the requirement to pay the charge are listed in schedule 2 of the Immigration (Health Charge) Order 2015. Those include exemptions for visitors, certain vulnerable groups and nationals of Australia and New Zealand.
That leads us to the purpose of today’s debate. This order amends the 2015 order by removing the exemption from paying the charge that applies to Australian and New Zealand nationals, by reducing the amount of the charge payable by youth mobility scheme migrants from £200 to £150 per annum and by making a minor and technical change to update the references in the 2015 order to the part of the immigration rules that relates to visitors.
The UK, Australia and New Zealand all face the challenges of increasing healthcare costs and the management of migration flows. We regularly discuss these challenges with Australia and New Zealand and have held consultations with them on the health charge since 2013. In December, the Secretary of State for Health confirmed with his Australian and New Zealand counterparts our intention to apply the health charge to nationals of these two countries.
We greatly value our close relationship with Australia and New Zealand and remain committed to strengthening the relationship between our countries. For that reason, we are retaining our reciprocal healthcare agreements with Australia and New Zealand. These agreements provide that short-term visitors to the UK from Australia and New Zealand are entitled to some NHS treatment free of charge. In turn, that is reciprocated when our citizens visit there.
The health charge is compatible with the terms of these agreements, as the agreements do not apply to the longer-term, temporary migrants from these countries who fall within the surcharge’s scope. It is also important to emphasise that the terms on which Australian and New Zealand nationals may use the NHS remain generous. The health charge is set well below the average per capita cost to the NHS of treating temporary migrants and below the rate that migrants might expect to pay for health insurance in competitive countries.
Visitors, such as tourists, from Australia and New Zealand will not pay the health charge and will continue to benefit from the reciprocal health agreements that we hold with those countries. In 2014, nearly 70% of the total number of Australian and New Zealand nationals who came to the UK did so as visitors. This group will continue to receive free-of-charge NHS care for health conditions that arise during their stay and which require immediate or prompt attention.
In addition to healthcare provided under the terms of our reciprocal healthcare agreements, we do not charge Australian and New Zealand nationals, or indeed any migrant, for the use of NHS primary care services, such as GP or nurse consultations, or for treatment in an accident and emergency department. The NHS also provides free-of-charge care to those with certain infectious diseases and, in England, to victims of certain types of violence.
During discussions with the Australian and New Zealand Governments, it was agreed to reduce the health charge that applies to the tier 5 youth mobility scheme from £200 to £150, in recognition of the close and important links between our countries. The scheme is a cultural exchange programme that allows young people aged 18 to 30 from participating countries and territories to experience life in the UK for up to two years, during which time they can work and study.
Australians and New Zealanders have benefited from a one-year exemption from the immigration health charge, while all other temporary non-EEA nationals have had to pay it since April 2015. It is now right and fair that those nationals also contribute to the extensive and high quality range of NHS services available to them during their stay, in line with their temporary immigration status. We estimate that by applying the health charge to Australian and New Zealand nationals—taking into account the lower charge for youth mobility scheme applicants—an additional £41 million could be raised for the NHS in present value over five years in 2016-17 prices. The Governments of Australia and New Zealand were fully consulted on the introduction of the charge.
Keir Starmer (Holborn and St Pancras) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey.
As the Minister outlined, this order amends the 2015 order. The Opposition did not oppose the 2015 order and we do not oppose this amendment to it, but I would like to raise a number of issues. First, the Minister has given us the anticipated revenue figure of £41 million. Will he update us on how much has been raised so far from the changes made under the 2015 order? Last year he said he would publish the revenue details after the first year of implementation. Is that still the intention?
Secondly, the Minister outlined how the short-term arrangements with Australia and New Zealand will work, but the amendment obviously affects the long-term arrangements. Is there any possibility of reciprocal charges being levied by the Australian and New Zealand Governments on UK citizens living there and, if so, what will those arrangements be?
Finally, the per annum cost to the NHS of non-EU citizens is said to be £950 million, which I think is what drove the original order and what drives, to some extent, this amendment. The aim of the policy is to ensure that people make a fair contribution to the costs—we agree with that in principle—but many of these people come here to work and thus pay tax and national insurance. Does the Minister know the proportion of people paying the levy who are, in fact, in work and are therefore making the contribution to the NHS through their taxes? Can he tell the Committee what the net cost is, once taxes are taken into account, of those people’s use of the NHS? I appreciate that he might want to get back to me on that in detail.
Anne McLaughlin (Glasgow North East) (SNP)
I am struggling to understand what the benefit of the order is and what its justification is, and I want to raise a few points. I understand from what the Minister said that perhaps things have changed slightly since I read up on the matter. The idea that this is a cost-cutting measure is interesting, because we do not know what it costs us for Australians and New Zealanders to use our national health service, notwithstanding the fact that most of them are young and therefore less likely to use the NHS in the first place. The NHS has only recently started to collect data based on the nationalities of those using it, and I would like to hear more about that.
The reciprocal arrangements we have traditionally had with Australia and New Zealand work only if we do actually reciprocate. The Minister said something that I did not hear completely. Will he clarify what he said about how we still have a reciprocal arrangement between Australia and the United Kingdom? I am not content that, as the hon. and learned Member for Holborn and St Pancras said, people have come over here and are paying national insurance and income tax, and they are also paying a surcharge for health, whereas we do not do that when we go over there.
Also, my understanding is that there is a lot of— [Interruption.] The Government Whip is shaking his head, so perhaps he can answer me and tell me where I have got it wrong. I know that they are not happy in Australia and New Zealand: they are saying, “Well, we’ll make it a reciprocal arrangement. We’ll reciprocate and we’ll impose a charge”. There are calls for that to be done, and those who would suffer most from that are UK nationals, because we outnumber the number of people coming to this country. For example, there are 63,000 New Zealanders living in the UK—which apparently makes up 0.09% of the population—whereas there are 265,500 UK nationals in New Zealand. In that respect, we have had the better end of the deal. The figures are slightly different when it comes to Australia, but my understanding is that we still outnumber the number of Australians who have come here.
I would be grateful for any clarification. If the Government Whip was shaking his head because I had misunderstood something, I would be very grateful to hear that.
Richard Arkless (Dumfries and Galloway) (SNP)
It is a pleasure to serve under your chairmanship, Mr Bailey.
As we have heard, this amendment removes the exemption that benefits citizens from Australia and New Zealand when they come to our country by allowing them not to pay an up-front contribution to use our NHS. Until now, residents from both countries were exempt from the surcharge, due to reciprocal arrangements between them and the UK, which has allowed citizens of one country to use healthcare services in the other country for free. Exemptions are made for services with a fee, such as dental treatment and prescription medicine.
In principle, the Scottish Government welcome overseas visitors and migrants who are in the country for legitimate purposes—not only to contribute to our workforce and economy, but to contribute to our diversity and our vibrancy as a nation. We oppose this amendment on that and many other bases. We also think it impinges on Scottish Government competencies over health, although the Government have been very clear that they see this measure as an immigration statutory instrument.
We see the UK Government rationale as flawed in that respect, in dealing with expected costs for treating migrants in the UK’s NHS. However, the Government have only recent begun collecting data on how different nationalities use the NHS, and we are not really aware at the moment of the costs that we are trying to save, as my hon. Friend the Member for Glasgow North East said.
The UK Government have been trying to reduce net migration. Despite that, however, it has risen to more than 100,000 a year under this Prime Minister, and further plans to increase work visa thresholds to £35,000 will put another seemingly immovable impediment in front of people trying to visit this country for legitimate reasons.
We in the SNP and Scottish Government say that the overall net contribution of migrants outweighs the transfers made to them during their stay here. We think there is not a cost to be legitimately saved. We say that the people who come here and benefit from the exemption from the surcharge are contributing more than they are taking out of the system. On that basis, and in particular because I am informed that the Scottish Government only found out about this statutory instrument by chance, we want to make our objections very clear and oppose the amendment.
James Brokenshire
As I indicated in my opening comments, in the first six months since its introduction, the immigration health surcharge raised more than £100 million in income for the NHS in England, Scotland, Wales and Northern Ireland. It is important to make that point, and we will report on the first year’s income, as the hon. and learned Member for Holborn and St Pancras asked me to do.
I also want highlight the fact that a comprehensive study of migrant use of the NHS in England commissioned by the Department of Health found that the total cost of visitors and temporary visitors accessing NHS services in England alone was estimated to be up to £2 billion a year, with around £950 million spent on temporary migrants, such as students and workers, from whom no charge had been recoverable previously.
Anne McLaughlin
Am I not right in thinking that that is the Prederi report, which states that those are the best estimates, but that accuracy is by no means assured because of uncertainty about the numbers of people and their behaviour?
James Brokenshire
These are always estimates, but we judge that to be a reasonable estimate on which to base our policy. That was the basis on which the House legislated for the creation of both the immigration health surcharge and the previous order. In our analysis, non-EEA temporary migrants—workers and families—here for longer than 12 months had a weighted average cost to the NHS of a little more than £800 a head and a total estimated gross cost of more than £500 million a year. The figures for non-EEA students, for any length of stay, were just over £700 and about £430 million respectively.
The Government believe that those subject to immigration control should have a form of access to public services that reflects their immigration status. The previous order brought migrant access to the NHS into line with existing policy on access to benefits and social housing. It is a migrant’s immigration status, not their tax contributions, that governs their access to those services. We believe that the levy is appropriate and reasonable, and recognises the contribution that temporary migrants make to the wider economy.
Questions were asked about reciprocity, and in particular the reciprocal healthcare agreements with Australia and New Zealand. There is no intention to discontinue those agreements. They are more than 30 years old, however, and all three Governments concur that the time is right to review them and ensure that they are appropriate to the contemporary needs of our travelling citizens. The Department of Health has therefore entered into discussion with Australia and New Zealand on the scope of the agreements. The Government have no intention of discontinuing the agreements, but Ministers and officials in the Department of Health are looking at them.
Reciprocal healthcare agreements provide for a national of one country on a short, temporary stay in another country to receive free treatment. The agreement with Australia provides for a resident of one country who is visiting temporarily in the other, without becoming an ordinary resident, to be provided with free immediate medical treatment. However, all our Governments highly recommend the possession of adequate travel insurance because the agreements do not cover all treatment needs. In particular, they do not cover the costs of a medical evacuation.
What happens to our citizens going to Australia or New Zealand is a matter for consideration. Australia already levies a health charge for certain categories of visa applicant, including older migrants applying to become permanent residents and those with existing healthcare needs. In addition, students are required to have health insurance. In New Zealand, there is a consultation fee for anyone accessing GP care, and all foreign fee-paying students applying to study there are required to hold acceptable medical and travel insurance. Most visa applicants to the two countries are also required to meet minimum health standards, and in some cases they must undergo a medical examination. A visa may be refused if a migrant has a health condition that is likely to result in significant healthcare and community service costs.
It might be considered that this measure makes it harder for Australians and New Zealanders to come here, but I have already indicated that visitors would remain unaffected as a consequence of the reciprocal arrangements. Some 97% of Australian and New Zealand nationals who apply for a UK visa are successful. We continue to place great value on our links with both countries and remain committed to strengthening our relationship with them. However, we operate in a wider context, which includes the challenges of healthcare costs and managing migration flows. I find it interesting that the Scottish National party appears to be turning its face against additional funding for the NHS in Scotland. That is obviously the SNP’s prerogative, but we judge that this measure is appropriate, and I commend it to the Committee.
Question put.
DRAFT Grants to the Churches Conservation Trust ORDER 2016
(8 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr David Evennett)
I beg to move,
That the Committee has considered the draft Grants to the Churches Conservation Trust Order 2016.
It is a great pleasure and privilege to serve under your chairmanship, Sir Roger, in my first Committee as the acting Minister for heritage. I am delighted to be here.
The order is required so that the Government can continue to provide funding for the Churches Conservation Trust. The trust takes care of some of our finest churches—mostly they are grade I and grade II* listed—that are no longer required for regular worship. The CCT cares for almost 350 churches, encompassing 1,000 years of English history, architecture and archaeology. They include churches large and small that range from isolated gems to urban Victorian buildings in rural and urban areas across England.
The CCT is a charity. It was established by ecclesiastical legislation in 1969 as the Redundant Churches Fund. It is a successful partnership between the Church, the Government and the community sector, aimed at protecting an important part of this country’s heritage. The Government provide 66% of the trust’s statutory funding, and the Church Commissioners match that with a 34% contribution.
The CCT has increasingly made use of its statutory grant to raise new income from donations, legacies and grant-giving foundations. That independent income now makes up 50% of its expenditure, and it has shown great initiative in developing activities and bringing its buildings back to life at a time of pressure on public funding.
There are many interesting examples of that work, such as “champing”. Champing is an entirely new word for a “back to the local” experience of spending a night in beautiful historical churches in amazing rural locations. In the inaugural champing season last year, which ran from May to September, almost 300 people champed overnight in four CCT churches in the south-east. Guests came from all over the world, generating additional revenue of £15,000 for the charity. There are now 10 champing churches across south-east England available for bookings between May and September this year.
The Discover Churches project is supported by a special Department for Culture, Media and Sport capital grant. The CCT is significantly upgrading facilities and the visitor experience at nine of its town centre churches to attract new audiences, to set a new standard in church heritage visiting and to raise new income for its wider work from hire, small shops and cafés. There are also new membership schemes for those wanting to play a greater part in and to learn more about the CCT’s work, which includes the highly successful historic church tours. That programme has been expanded every year for the past four years.
Historical places of worship are a valuable and vital part of our nation’s heritage. Some 45% of all grade I listed buildings are Church of England churches or cathedrals. They represent some of the finest historic buildings and are showpieces of the most accomplished design and workmanship. As iconic buildings, they help to define our cities, towns and villages. They can be magnets for tourists, but they are also vital and highly valued in their communities as they may be the only community space left in a locality.
Michael Fabricant (Lichfield) (Con)
Will my right hon. Friend pay tribute to Staffordshire County Council, which plans to relocate the public library to the decommissioned church of St Mary’s in the centre of Lichfield? That will bring greater footfall into the area and into St Mary’s church, which also hosts an exhibition of the history of the great city of Lichfield.
Mr Evennett
My hon. Friend is a great exponent for his community and area. We welcome the usage proposed if it brings a valuable historical building back to life for community use.
Mrs Caroline Spelman (Meriden) (Con)
Early in his remarks my right hon. Friend the Minister mentioned the fact that a few of the churches are isolated, with no natural community around them. Does he agree that the Churches Conservation Trust provides a wider benefit to the local rural community by creating jobs that bring people in to repair and maintain these precious buildings?
Mr Evennett
I thank my right hon. Friend for her question. Before I answer it, I congratulate her on her superb work as a Church Commissioner. She is always hard at work on such matters. I totally agree with her: we want to bring new life into our rural communities, and if we can use churches to do that, we should. I mentioned earlier the innovative champing initiative. In a rural area that might be just what is needed. I welcome my right hon. Friend’s comments. We would warmly welcome and encourage any developments that bring tourism, jobs and opportunities to rural areas.
In the past year the trust has saved for the nation three additional churches of exceptional merit, all of which are grade I listed. It will cost an average of £300,000 each to bring recent or upcoming acquisitions into a suitable condition so that they can be safely opened to the public and equipped for community use.
The trust’s primary objective, and the greatest call on its funds, is the conservation of its churches, particularly upon vesting, when buildings might have been out of use for a number of years. The trust has an excellent reputation for the quality of its conservation work. In 2015, it won the European Union prize for cultural heritage, the Europa Nostra award, in recognition of its role in promoting the architectural significance of historical places of worship and their essential function as centres of community life. The work and expense do not end there. With an estate of 347 buildings that could and should be serving communities, there is a rolling programme of repair needs, and new facilities are needed where consents can be granted.
In autumn 2014, the trust opened a new flagship urban project that saw the rescue and adaptation of All Souls church in Bolton for modern community use. With the support of the Heritage Lottery Fund, the £4 million project has conserved the grade II* listed church in a disadvantaged area of the north-west in which the majority of the residents are from an ethnic minority background and put it back into the hands of the community. Hi-tech internal pods provide space and amenities for the whole local community, small business and arts use, while the historical fabric has been beautifully restored. The building is now being run by a newly constituted community group, its facilities are fully booked and it will be self-sustaining in the long term.
Tom Tugendhat (Tonbridge and Malling) (Con)
As the Minister mentioned the Heritage Lottery Fund, it would be remiss of me not to commend the work it does alongside the CCT. The fund has done some impressive work in Tonbridge and Malling and I am very much looking forward to announcing a new project it will be doing for us shortly.
Mr Evennett
I thank my hon. Friend for those comments, which I endorse.
This year, the CCT will complete the £6 million regeneration of the grade I St Mary-at-the-Quay in Ipswich. With HLF support and a partnership with Suffolk Mind, the church has been fully conserved and, once new facilities are complete, will open as a wellbeing centre in the autumn. The church will be available for a wide range of community uses and will provide a range of therapeutic services, as well as a new model for accessible mental health provision.
In the year to April 2015, 1.9 million people visited CCT churches—an increase of 5% on the previous year. The trust’s churches are run by a growing army of regular volunteers, to whom I offer my praise and thanks. Without them, events as diverse as fashion shows, concerts, flower festivals, and farmers’ markets would not be able to take place. The CCT is busy increasing the number of volunteer helpers, of whom there are currently around 1,800 throughout the country, that it relies on to open churches to the public and make them welcome. The CCT offers its volunteers support and new skills through networking and training. It has shown that it is excellent at partnership working and is at the forefront of saving buildings by looking beyond the traditional heritage solutions.
The CCT has also been applying its expertise in community solutions for churches that are still in use, when they would otherwise, if closed, be significant enough to come to the trust. Benington All Saints in Lincolnshire is one example of where a non-CCT, grade I church, which was in a sad state of repair, has been rescued by the community, with significant CCT help, and was this year endorsed by the award of a major Heritage Lottery Fund grant.
Church buildings can again be the centre for community activities, which is good news. I hope that the Committee shares my enthusiasm for the work of the trust and will approve the draft order.
Clive Efford (Eltham) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I welcome the right hon. Member for Bexleyheath and Crayford (Mr Evennett), the acting Minister with responsibility for heritage, sport, gambling and tourism. I congratulate his colleague, the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Chatham and Aylesford (Tracey Crouch), on the birth of her child Freddie. We wish her, Freddie and the whole family well.
The Minister clearly received the same briefing as me, because I was sat here crossing things off in my notes as he was going through his speech, which was more or less the same as mine.
Clive Efford
Exactly. In that spirit, I will cut my speech short. Farmers’ markets, fashion shows—tick, tick—I have all the same points here.
The Churches Conservation Trust carries out some important work. Churches are an important part of our heritage and contain many examples of fine architecture dating back to the middle ages. Some of the finest examples of architecture are protected in our churches. Many of us who are interested in history will find that researching our ancestry or a particular period in history will invariably take us to a church. It is not a CCT church, but I was recently at Sherborne abbey, which is a fascinating building that dates back to the eighth century. I do not know whether many people will know this, but two Saxon kings, older brothers of Alfred the Great, are buried there. When looking to find out about history, where does someone turn? They go to a church to find out some facts.
Local war memorials are the focus of attention every year, but particularly at this time when we commemorate the centenary of the first world war, in which the CCT is playing an important role. The trust’s “First World War: Memorials of Life and Death” programme is recognising the role that our churches have played in commemoration over the past century. In my constituency, Henry Hall, chaplain of one of the regiments that served in Gallipoli, came back to be a local parish vicar. He landed with the troops during the invasion, taking communion with the soldiers while under enemy fire, and decided, based on his experiences, to set up a chapel in the church for the commemoration of the Gallipoli campaign, so we have a permanent memorial that has played an important part in our commemorations in recent times. Churches continue to play an important part in commemorating significant parts of our history and allow us to continue to learn lessons from it.
The Minister spoke about the number of people who visit churches. He is the Tourism Minister at the moment and I am the shadow Minister for that industry, for which churches play an important part. The CCT’s work to protect many older churches attracts a lot of people to rural communities where tourism can be vital for creating jobs and sustaining tourism. Similarly, the trust’s work to restore churches is vital and supports many specialist craftsmen whose role is to restore and protect those churches. Again, that brings employment and important investment—more than £5 million of investment from the trust—to the communities in which those churches are located.
The trust’s forerunner was set up by the Labour Government in 1969 so we welcome the work of the CCT, but I have a couple of questions about its ongoing work. The draft order covers a four-year period and provides £10.6 million, which roughly equates to £2.7 million each year. However, the order that was passed last year was for £3.2 million. Now, I understand that a specific grant was made within that £3.2 million, which is why it was significantly higher than the annual amount for this period. Is that correct? Was a specific grant included within the £3.2 million and is that why the figure is significantly higher than the annual figure cited in the draft order? Has that work been completed, or is money still earmarked for it? Is there some other specific grant money in the current allocation?
The Minister spoke about the requirement on the trust to raise money from independent sources. He mentioned champing, and I saw some confused expressions on the faces of his colleagues. Church camping, which the CCT has been encouraging in some locations, has become known as champing. People pitch up on the site of a former church, and that generates income and helps the work on that site to become more sustainable. It is described on the trust’s website as a “slow tourism escape”—I suspect that nothing could be slower than staying on the site of a former church. The Government are making assumptions about the income the trust can make from such activities. Has that been taken into account in the Government’s estimates of how much the trust needs to carry out work and how much can be generated from those activities?
The trust’s core funding was cut by 20% over a four-year period from 2010-11. Has the Department been monitoring the impact of that cut on the trust’s work? We welcome the fact that this is a four-year settlement, which offers the hope of some stability for the CCT. With that, we wish the trust every success and look forward to hearing the Minister’s answers.
Mr Evennett
I am grateful for the support of my south-east London neighbour, the hon. Member for Eltham—we stick together as much as we can—and, in particular, his support for the trust’s work. It is vital that we have a bipartisan approach. A four-year settlement is obviously good because it allows any organisation to take the opportunity to plan. The CCT should be looking at innovative ideas. We talked about camping and champing or whatever and I am sure that my hon. Friend the Member for Lichfield, who certainly is an innovative individual, will see what he can do to support that in Lichfield. It is important that churches try to maximise revenue, because we live in difficult times and savings have to be made and the trust has taken its share of that.
However, we have been able to find additional funding. We found £100,000 in 2014 following the extraordinary flooding and in 2015 there were two capital grant aids: £65,000 in support of the CCT’s piloting of a new product brand, Discover Churches, an income-generating project; and £600,000 to upgrade eight churches to be Discover Churches. That included: café and retail fit-out; visitor information and welcome points; interpretation; exhibitions; upgrades to ambient lighting; and a suite of signage.
At the spending review in 2015 we were successful in maintaining the CCT’s grant in aid at the current level for the next four years. As the hon. Member for Eltham will be aware, these are difficult economic and financial circumstances, but a four-year settlement at the current level will help the trust to plan and develop. At the same time, we are looking for innovative ideas on how churches can raise more money so that, with their usage, they can plough more money back into the project.
I think the CCT had a good settlement and, yes, a huge amount has been done and we can all be proud of what has been achieved, but the CCT must use the opportunity to consider more innovative measures to see what can be done. When I was down in Bristol I saw an innovative project that was being run in a church. That church, which is still consecrated, can be used for services, but it is also being used as a theatre and for training for circus activities and so forth, which brings in an awful lot of money. Other churches are doing that as well. The more that can be brought in to churches, the more that can be done and that provides more opportunities.
The trust has a good package. We would all like more money for whatever we like to do, but I am afraid that economic circumstances mean that we must be realistic.
Question put and agreed to.