Class 4 National Insurance Contributions

Christian Matheson Excerpts

Wednesday 15th March 2017 Commons Chamber

[Mr Hammond]

My hon. Friend never misses an opportunity to bring us back to his agenda. I have had suggestions from various parties that the gap between the contributions of the employed and the self-employed could be narrowed by the device of lowering the contributions of the employed. However, 85% of the working population are employed, and any reduction in the contribution of the employed would be a huge fiscal cost and would—in our world—have to be paid for, although the right hon. Member for Hayes and Harlington may have a different view.

[Christian Matheson (City of Chester) (Lab)]

The clear impression given by today’s announcement is of a reactive Government who are not in control of their own agenda. Following on from the question of my hon. Friend the Member for Barrow and Furness (John Woodcock), may I specifically ask the Chancellor whether he knew that his policy contradicted the 2015 Conservative manifesto? If he is such a good listening Chancellor, why did he not listen to representations before he made his statement and not go ahead with his announcement last week?

[Mr Hammond]

Because those representations were not made before the statement. In fact, as the hon. Gentleman will remember, there was quite a lot of speculation in the media in the week before the Budget about a possible increase in class 4 national insurance contributions, but I did not see any reference to the manifesto in any of those media discussions. We believe that the National Insurance Contributions (Rate Ceilings) Act put into law the lock that we put in place, and I did not hear anybody suggest anything to the contrary during the press speculation in the week before the Budget.

Beer Duty

Christian Matheson Excerpts

Tuesday 7th March 2017 Westminster Hall

[Christian Matheson (City of Chester) (Lab)]

It is a great pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for St Austell and Newquay (Steve Double) on his speech; he told us that he was a substitute, but that was certainly not the introductory speech of a substitute. May I also take this opportunity to welcome my next-door neighbour and good friend, the hon. Member for Weaver Vale (Graham Evans), to his place? He is the chairman of the all-party parliamentary beer group. I was with him in the Terrace marquee the other night where, I must say, I enjoyed the award-winning beers from the Campaign for Real Ale, including Binghams vanilla stout, which I enjoyed—but only in moderation, of course.

I have had the pleasure of going to two pub openings in my constituency in the past couple of weeks. I went to the Handbridge pub, which has been refurbished by Punch Taverns, and I was very pleased to go to the Bull and Stirrup in Chester, which is a historic pub, particularly for the labour movement, to open it with the actor Ricky Tomlinson. It has been the beneficiary of a £2 million refurbishment courtesy of Wetherspoon’s. It employs 70-odd people—most of them very young—and is an excellent example of the fact that pubs and the industry provide employment, including at entry level, for people looking to make their way in their career.

I want to speak briefly about one of the big employers in my constituency, Admiral Taverns, which I am proud to represent. It employs 145 people in my constituency, has 850 pubs across the UK and is consistently winning awards. It was the leased and tenanted pub company of the year in 2013 and 2016, which makes it the current holder of that prestigious award, and I can tell Members this morning that it is again shortlisted for community pub operator of the year. The hon. Member for St Austell and Newquay talked about the importance of community pubs. I worked with Admiral Taverns when it closed the Centurion pub in Vicars Cross in my constituency. I worked with community leaders Trevor Jones and Bob Hindhaugh, and we managed to persuade Admiral Taverns to reopen it with community leadership. That was a tough business, because the numbers had to add up, and part of the reason for the closure was the high beer taxation levels. I have worked with Admiral Taverns on a couple of projects since, and I am proud to do so. It is keen to see a continued light touch in the taxation of the pub sector.

In this short contribution I want to draw the Minister’s attention to the conflict between beer duty and business rates. I am told that business rates for pubs are calculated on turnover, but that that turnover includes beer duty. As Admiral Taverns point out that is, therefore, a double whammy—I believe that is the phrase, Sir Roger. They are being taxed on taxation, because turnover includes beer duty. I ask the Minister whether levels of beer duty or the business rates calculations can be taken into account.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I want to reflect on that briefly, because my hon. Friend is making an exceptionally important point. Even before the re-evaluation of business rates, which will hit pubs particularly hard, pubs were paying 2.8% of the total business rates bill but only accounting for 0.5% of total business turnover. That is a crucial area that I hope the Minister will take into account and feed into the Budget negotiations for tomorrow.

[Christian Matheson]

I am grateful to my hon. Friend for making that point. There does seem to be a discrepancy. I would not like to think that pubs, which play such an important part in communities, as we correctly learned from the hon. Member for St Austell and Newquay, are seen as a soft touch and an easy hit.

I am keen to convey on behalf of my constituents, particularly Admiral Taverns, with which I have an excellent relationship, that there needs to continue to be a light touch to allow the sector to flourish. We heard from my right hon. Friend the Member for Warley (Mr Spellar), who is no longer in his place, about the effect on microbreweries when there was a reduction in taxation—that sector of the business expanded. I believe that could also help in the pub sector and in community pubs, but there is a real problem in the conflict between business rates and beer duty, and I ask the Minister to look at it.

[Several hon. Members rose—]

Christmas Adjournment

Christian Matheson Excerpts

Tuesday 20th December 2016 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

Should fate ever somehow decree that I end up as a member of a council in Somerset, I shall make it my absolute priority—horses’ heads or no—to stay on the right side of the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger).

This has been a tumultuous year culturally and politically. With the assassination of an ambassador and a further apparent terrorist atrocity yesterday, it seems we are finishing on a stark but familiar low. The attack in Germany drives home to me the fact that, to coin the phrase of the moment, we have more in common with our European partners than divides us. I fear that the current stand-off over Brexit and the forthcoming negotiations will drive us further apart from our neighbours, when these are surely times when those nations committed to the cause of democracy, freedom and pluralism must stick together and find common ground, rather than hunker down in an introspective bunker, focused on the challenges of Brexit while the big global challenges and threats remain.

The main debate in the EU negotiations seems to be one of immigration versus free movement and access to the single market. I am in favour of the free movement of labour; I am just not in favour of the free movement of unemployment and the free movement of exploitation. Over a decade ago, as a trade union official, I saw construction workers being brought in from abroad and used on big construction projects; names such as Staythorpe power station or Lindsey oil refinery spring to mind. Those immigrant workers would be used by the prime and principal subcontractors to drive down wages in a sector where skilled, well-paid jobs provided a good standard of living and were negotiated nationally between the unions and employers, and where the system worked.

All of a sudden, wage rates were falling in a race to the bottom, which even good employers—the majority of employers—were forced to join to stay competitive. The difference was kept by the corporations and their bosses in the form of bigger profits, rather than being shared out among the men and women doing the work. Bogus agencies were set up in eastern Europe, advertising British jobs at below UK agreed rates of pay—again so that the money could be siphoned off from the workers and those at the top could keep a bigger slice for themselves.

It is unsurprising that so many working-class people voted to leave the EU, when that was their most visible personal experience of it, albeit it was not necessarily the EU that was at fault but the system of globalised capitalism we are seeing today. My solution would be simple: retain free movement in a qualified manner. If someone has a job, they can come and work here, but the job must be advertised in the UK and in English, and it must pay accepted UK rates. I suspect that the rest of the EU may soon find itself moving towards such a system anyway.

The Euro-referendum and, it would seem, events elsewhere, have brought into focus another new aspect of the state of politics, exemplified by the word of the year: post-truth. In the UK, there was no better example of that than the red Vote Leave bus, with its siren promise of an extra £350 million a week for the NHS—a promise it took Nigel Farage barely 12 hours to admit was false, on breakfast TV.

Members of the House who associated themselves with that promise have never apologised or faced the appropriate obloquy for their association with it. I have to say, Mr Deputy Speaker, that I sought guidance from Mr Speaker and the Clerks as to how I might criticise Members such as the Foreign Secretary for their association with the bus and the claim. I learned that the rules of the House preclude me from calling Members such as the Foreign Secretary deliberately mendacious. Were I allowed to do so, I would, indeed, suggest that these Members were deliberately and wilfully mendacious in the pursuit of short-term political gain—a practice that is known in Cheshire as being a snollygoster. Of course, the rules do preclude me from that, so I will not be making any such allegation.

Post-truth politics is dangerous because it devalues our political system, corrodes the quality of our democracy and diminishes public trust in our institutions. It has a broader effect too—a cultural effect, because as well as undermining honesty and trust and celebrating deceit, it celebrates ignorance and stupidity in saying that learning is not to be valued and has nothing to contribute. So when the right hon. Member for Surrey Heath (Michael Gove) told Faisal Islam on “Sky News” that he had “had enough of experts”, it was a breathtaking attack on progress, an attack on scientific and cultural learning, a devaluation of the intrinsic importance of the—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You are mentioning Members. Did you give notice that you were going to mention Members in the Chamber?

[Christian Matheson]

I apologise, Mr Deputy Speaker. I will bear that in mind and amend my comments suitably as a result.

When Members say that they have had enough of experts, that is an attack on progress—a devaluation of the intrinsic importance of the accumulation of knowledge as a good thing that has benefited, and will continue to benefit, humanity across the ages.

I say this clearly to the House: please reject the dishonesty of post-truth politics but reject also its regressive and reactionary message that ignorance and dishonesty are somehow a good thing. Post-truth did not put a man on the moon or develop the Hubble space telescope, post-truth did not invent the internet or the worldwide web, and post-truth will not find a cure for cancer. If we in this place cannot address an argument with fact, it may be time to reassess whether our views are correct and sustainable.

As we look forward to the new year, I make a further plea to the House to reject the notion that the 52% vote to leave is somehow the will of the people. It is the will of the majority of the people and it must be respected— we must deliver the exit from the EU agreed in the referendum—but it cannot be portrayed as the will of all the people. The views of the 48% must be taken into account in how we exit the EU; they cannot be ignored or airbrushed away. I fully support and pay tribute to hon. Members on my Front Bench who are trying to bring the country together and make efforts to represent the 100%, because I fear that, in addition to the perils of post-truth politics, we face another threat—one of cataclysmic disunity. The referendum was brought about by this Government to halt long-running rifts over Europe in certain parts of the House, but those rifts have now been transferred to the whole country, and have fed narrow nationalism in certain parts of it. Narrow, petty nationalism cannot be the solution to any problem that we face in the world today.

I am certainly not imagining a nation where we all agree and everything is fine and dandy, but a basic consensus about how we do politics has been attacked, as exemplified by recent media attacks on High Court judges and their integrity. We are stronger when we stick together. I have never known our country to be so deeply and unpleasantly divided. We have heard so much about putting the “great” back into Great Britain; perhaps now, with all the external threats and challenges we face, it is time to put the “united” back into the United Kingdom.

--- Later in debate ---

[Bob Stewart (Beckenham) (Con)]

Having served in Northern Ireland during the troubles there, I have been asked by my old comrades in the Cheshire Regiment to highlight an iniquity that has already been referred to by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti), my good friend: that many British soldiers could be reinvestigated for their actions during fatal shooting incidents. Apparently, the Police Service of Northern Ireland has been instructed to look at about 230 fatal shooting incidents, during which some 302 people died, almost all of them terrorists. If that is the case, my understanding is that about 1,000 ex-soldiers could be hauled in to account for their actions all those years ago, and could even be retrospectively charged with manslaughter or murder.

I am appalled that such actions are being taken against our soldiers when so many terrorists from all sides were granted full pardons under the Good Friday agreement. To me, it looks like a highly political and vindictive move by Mr Barra McGrory, the Director of Public Prosecutions in Northern Ireland. As I understand it, in the past McGrory represented Provisional Sinn Féin and on-the-run terror suspects as their solicitor. He negotiated an effective amnesty for many of them. His background hardly suggests impartiality to me.

Our soldiers were trained to apply strict rules of engagement. The so-called yellow card—technically, “Instructions by the Director of Operations for Opening Fire in Northern Ireland”—was both detailed and precise. The rules of engagement outlined exactly when soldiers could use firearms, and our troops spent a long time being instructed about them during pre-Northern Ireland training sessions.

Opening fire in Northern Ireland was considered a very serious matter by the Army. After every shooting incident, regardless of casualties, the Army and the Royal Ulster Constabulary held an investigation. When such events involved casualties or fatalities, strict procedures were followed. That normally involved soldiers having to go to court to prove that they had acted within the law and the yellow card rules.

In one incident in which I played a small part, I recall having to tell two soldiers that, having escaped with their lives by opening fire, they would none the less be charged with manslaughter. Unsurprisingly, the two men, still in some shock, were utterly appalled. They shouted at me, saying that they had been abandoned by the Army. As their superior officer, I totally understood their feelings and shared them. None the less, the Royal Ulster Constabulary had informed me that the two soldiers had to be charged with manslaughter. Personally I was furious and I argued vociferously that this was wrong and very unfair. Regardless, the soldiers appeared in court. It was quickly proved that they had acted within the law, and their case was dismissed.

It was difficult for me and especially the soldiers at the time to understand the reason for that court appearance, but it was explained to me that, having had their case dismissed, they could never be charged again—perhaps, if the political climate changed. Guess what? It seems to have done. I had difficulty seeing the logic at the time. Then later, after the immediate drama was over, I did. I believed that the whole matter had been dealt with in court and it was over—forever. But maybe I was wrong. I presume that my two men could be among the 302 soldiers apparently under investigation by the Director of Public Prosecutions in Northern Ireland.

I do not maintain that our servicemen and women are above the law—of course they are not. But re-opening all fatal shooting incidents involving soldiers is hugely one-sided and looks very bad to the armed services community, and that includes me and several other Members of the House.

[Christian Matheson]

I am most grateful to the hon. and gallant Gentleman for giving way. He was a leader of the Cheshire Regiment, and many of my constituents served with him in that excellent regiment. Does he agree that all those former servicemen who risked their lives serving in Northern Ireland, including my constituents, deserve to have that black cloud removed from them as quickly as possible?

[Bob Stewart]

I thank my good friend—I call him that because he comes from Chester and I commanded the Cheshire Regiment—for that intervention. Yes, our soldiers should not be under this cloud. They are not terrorists. Terrorists have been given amnesty and a pardon in the Good Friday agreement. Why should our men, some of them quite old now, not sleep soundly when terrorists who have killed do so? It is wrong, iniquitous and possibly malicious, and it is a huge waste of public money while we are at it. Why is the Director of Public Prosecutions not telling the Police Service of Northern Ireland to direct its efforts into clearing up and charging so many unsolved terrorist murders from the time of the troubles?

Incidents involving soldiers were investigated at the time and, if wrong was done, our soldiers were taken to court at the time. Some even went to prison. What sort of people are we who give terrorists amnesty and hound those who put their lives at risk for the rest of us?

I demand that the legal authorities in Northern Ireland desist from this clearly politically inspired blanket action against what could be almost 1,000 soldiers. They should concentrate their energies on finding the still-unlocated remains of the many innocent people massacred by terrorists, and bring those murderers to book.

[Jim Shannon (Strangford) (DUP)]

It is always a real pleasure to follow the gallant gentleman, the hon. Member for Beckenham (Bob Stewart). I wholeheartedly support his comments, and those of the hon. Member for Filton and Bradley Stoke (Jack Lopresti); I think they resonate with everyone in the House. We all want the prosecutions and investigations to stop.

May I first associate myself and my party, the Democratic Unionist party, with the comments that have been made about all those who have lost loved ones in the awfulness of the unspeakable attack, so close to a church, in Berlin? We offer our sincere sympathies. It is good that we remember, at this time of year, those who grieve.

In the short time available, I want to speak about making a difference. I also want to focus on this time of the year. I am one of those guys who loves Christmas. I love taking my grandchildren to special church services, attending services in different churches and just remembering the real reason for the season: a chance to celebrate Jesus. We all know, in all reality, that 25 December is not just the day Jesus was born. It is a time to focus our minds on the greatest gift ever given to mankind: the Lord Jesus, the greatest story ever told.

Last week, I tabled an early-day motion on the real meaning of Christmas. Many Members took the opportunity to sign it and to endorse that comment. The Christmas message is the celebration of Jesus who came as a baby, grew to be a man and gave his life for those who would accept him into their hearts. I love the celebration of his birth, as I see it as a time for faith, for family and for focus. I want to thank the Lord Jesus for the personal faith that I have.

I thank God for the time that I spend over Christmas with my family: with my wife and the boys, my granddaughters and my mother. I take the two days as days to be with them. I cherish the time to laugh—and to be laughed at!—and just to be in each other’s company all together. Finally, I see it as a time when I refocus on what is important and on what I need to do. It is a time when I think on my role and how I can make a difference in my own family, my own community and my own constituency.

The hon. Member for Beckenham spoke about our soldiers. While we are in this House, Army, RAF and Navy personnel, and those in the emergency services—the police, fire and ambulance services—are all working to protect us. We should put that on the record.

As you know, Mr Deputy Speaker, I am the chair of the all-party group on international freedom of religion or belief. I want to focus on and pray for persecuted Christians across the world who cannot worship their God as we will this Christmas, and to think of the 100,000 Christians who will be killed for their faith this year, the 200 million who will be persecuted and the 2 billion who live in an endangered neighbourhood. Those are the facts of where we are.

It is Christmas time and we all enjoy a good Christmas movie. “It’s a Wonderful Life” starring James Stewart is a great film that could probably epitomise the life of every person in the Chamber and every person we meet out in the street, because every person’s life has an effect on everyone else. When I think about making a difference, I want to focus on that. I will relate a quick story to illustrate that, which I believe carries a lesson for us all.

An old man used to go to the ocean to do his writing. Early one morning, he was walking along the shore after a big storm had passed and found the vast beach littered with starfish in both directions as far as the eye could see. Off in the distance, the old man noticed a small boy approaching, wearing his wellington boots and carrying a bucket. As the boy walked, he paused every so often. As he grew closer, the man could see that he was occasionally bending down to pick up an object, put it into his bucket and take it into the sea. The boy came closer still and the man called out, “Good morning! May I ask what it is that you are doing?” The young boy paused, looked up and replied, “Taking starfish into the ocean. The tide has washed them up on to the beach and they can’t return to the sea by themselves. When the sun gets high, they will die unless I take them back to the water.” The old man said, “But there must be tens of thousands of starfish on the beach, and I am afraid that you will not be able to make much of a difference.” The young boy bent down and picked up yet another starfish, put it into his bucket and took it out to the sea as far as he could. Then he turned, smiled and said, “Ah, yes, but I can make a difference to this one.” People may raise their eyebrows—

[Christian Matheson]

I am most grateful to the hon. Gentleman for his inspiring story. I would like to pay tribute to his work on the all-party group on freedom of religion or belief. It is my belief that he is making a difference to people across the world, and for that, I am most grateful to him.

[Hon. Members]

Hear, hear.

Equality: Autumn Statement

Christian Matheson Excerpts

Wednesday 14th December 2016 Commons Chamber

[Sarah Champion]

The problem with the national living wage is that it is a misnomer. It is welcome that it has been increased, but we are seeking a real living wage that brings people out of poverty, and we have not seen that.

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend accept that if someone represents a party whose sole interest is to conserve the wealth of people who already have it, it is absolutely inevitable that people who are unfortunately still at the bottom of the pile will remain there as long as that party remains in government?

[Sarah Champion]

I agree with my hon. Friend, and I am proud that I represent a party that wants wealth to be shared, wants everyone to reach their potential, and will not leave anyone behind.

As I have stated, the Government know how to conduct an adequate equalities audit of their financial statements and policies. Clear methodologies have been produced by the Equality and Human Rights Commission, and they have chosen not to use them. Will the Minister agree to explain to the House how future announcements can properly take into account the impact on women, particularly those from BME backgrounds? Will the Government agree to put an end to the ducking and diving and send a Minister to the Women and Equalities Committee to answer questions on the matter? Will they agree to publish a full cumulative gender impact analysis of their policies since 2010, and will they outline how the autumn statement, and future financial and policy announcements, will demonstrate compliance with the UK’s legal and international obligations?

As I outlined in my opening remarks, gender economic equality has been at the heart of the fight for equal rights in this country. Progress has been all too slow and the victories hard-won. The Opposition can be proud that almost every major piece of legislation that improves the lives of working women has been introduced by a Labour Government. It was a Labour Government who introduced legislative protections for women under the Equal Pay Act 1970, the Sex Discrimination Act 1975 and the Equality Act 2010. The Labour Administration were the first since the second world war to accept state responsibility for developing childcare policy, and they introduced paternity leave and increased maternity leave. We brought in Sure Start centres, working tax credits and all-women shortlists, and we have more women MPs than all the other parties in the House combined.

In 2016, under the current Government, women in the UK are more likely to work for less pay than men. They are more likely to be in chronically low-paid and insecure sectors of the economy and to be disproportionately affected by unprecedented cuts to public services.

Oral Answers to Questions

Christian Matheson Excerpts

Tuesday 29th November 2016 Commons Chamber

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

My hon. Friend is right to point to the fact that we inherited a complex system in that regard. Her Majesty’s Revenue and Customs has enhanced its online services. There will be an online service, for example, for people making new claims for tax credits starting in April 2017. The use of real time information through pay-as-you-earn has really helped to pick up potential errors in claimants’ income, and it is making a difference.

[Christian Matheson (City of Chester) (Lab)]

T5. Chester’s status as a centre for the financial services industry, particularly FinTech, is under threat from continuing problems with retention by businesses, which cannot get staff to come to the area. Staff cannot get there, because our infrastructure is not good enough. Instead of gloating about the Oxford to Cambridge corridor, can we have some news about when money will be spent on the M56 to upgrade it to a smart motorway?

[The Chief Secretary to the Treasury (Mr David Gauke)]

I will take that as a representation and make sure that my right hon. Friend the Transport Secretary is aware of it. The hon. Gentleman will be aware that we are already setting out an ambitious programme for road spending over this Parliament. In addition, my right hon. Friend the Chancellor of the Exchequer made announcements last week about putting in more funding to improve our road network across the country. I am happy to look at the case that the hon. Gentleman raises.

Concentrix

Christian Matheson Excerpts

Wednesday 26th October 2016 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

We are extremely hopeful that this sorry state of affairs marks the beginning of the end of payment by results in our welfare system. It has no place there, it creates perverse outcomes, and it has ruined the lives of thousands of people. Our social security system should be there to support people in their time of need, not to allow unaccountable conglomerates to make easy money chasing the voiceless and the vulnerable. Now is the time to draw a line under the grotesque profit model in our welfare system, because that model has failed: it has failed the individuals it was set up to help; it has failed employees; and it has failed the taxpayer.

All of us have horrific stories of individuals who have fallen foul of Concentrix. In my constituent’s case, her tax credits were cancelled while she was in a coma. Rather than answering for these failures, which lie squarely at the Government’s door, Ministers have preferred to throw this hapless contractor under the bus. However, as one senior Concentrix employee wrote to me:

“Every single action we took was directly informed by HMRC and was compliant in full with their guidance… there will be no investigation because there are paper trails after paper trails showing that we have only ever followed client instructions on amending claims.”

I was pleased to hear today that that is no longer the case and that there will be an investigation, because from start to finish this has been a mess entirely of the Government’s own making, and one for which they have not yet answered.

The company that conducted the trial that preceded Concentrix, Transactis, incorrectly removed entire awards regardless of evidence provided to the contrary. Despite the alarm bells that should have been ringing loud and clear in their ears, Ministers decided to push on. It was the beginning of a pattern that is now all too familiar.

Ministers have still not answered for structuring a contract that put maximising revenue at its heart in attempting to assess error and fraud—not accuracy, not meeting quality service standards, and certainly not customer service, but making as much money as possible off the backs of the vulnerable. Ministers have not answered for the measures they included in the contract to maximise revenue. HMRC “profiled”—that is the Government’s own word—1.4 million vulnerable individuals and then unleashed Concentrix to carry out its dirty work.

We do not know—they will not tell me, despite repeated requests—what indicators the Government used to establish which groups to target. Given what we have heard today, it is clear who was in that demographic: single mothers with children. It is some measure of justice that it was women like that—thousands of them across the country—who brought this contract crashing down with their articulate, brilliant campaign.

That is not the only issue with the contract, because the process also turned the burden of proof on its head. HMRC was asking tax credit claimants to prove that their claim had not been made in error. They were asking people to prove a negative, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) explained so eloquently. The Tax Credits Act 2002 clearly states that HMRC can amend or terminate tax credit awards only if it has significant grounds for believing that they are erroneous. It does not allow them to shift the burden of proof on to the claimant to disprove that a tax credit award has been made erroneously. That led one young mother to say to me, in tears, that she felt that she was being “treated like a criminal” and that Concentrix was treating her as “guilty until proven innocent.” One mistake like that would have been unacceptable, but 11,000 people had to apply for mandatory reconsideration in the past year alone. That cannot simply be passed off as a mistake; it was the deliberate design of the contract itself.

HMRC employed a contractor with just 500 staff to target over 2 million people. That meant the company’s pressured, poorly trained and low-paid staff were being instructed to open dozens of highly sensitive cases every day, leaving the phone lines permanently engaged, as we have heard. Concentrix staff have told me that the call volumes were such that the company would have needed to triple its staff in order to answer the phones.

Astonishingly, despite the failure of the trial, despite the highly sensitive nature of the contract, and despite the sheer volume of individuals a completely untested private sector provider had been designated to pursue, we now know that the Government did not actually monitor the performance for the first year of the contract. HMRC had no idea how many performance failures the contractor was incurring. Once it started monitoring that, it soon found out: over 120 breaches in the space of just nine months; and 13 black performance failures. Ironically, HMRC is up for an award this year for analysis and use of evidence. I very much hope that this is not viewed as best practice across Whitehall.

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend share my concern that the chaos she is outlining will end up costing the taxpayer a whole lot more than any money that was saved in the first place?

Finance Bill (Sixth sitting)

Christian Matheson Excerpts

Thursday 7th July 2016 Public Bill Committees

[Rebecca Long Bailey]

The clause increases the rates of band B air passenger duty in line with RPI. Band B rates apply to journeys more than 2,000 miles from London. From 1 April 2016 the reduced rate for the lowest class of travel will increase to £73 and the standard rate will increase to £146.

APD is currently charged on all passenger flights from airports in the UK except in Northern Ireland. It was introduced in 1993 and came into effect on 1 November 1994. Powers to set APD have subsequently been devolved to Northern Ireland and are in the process of being devolved to Scotland. APD raises a significant amount of revenue for the Treasury: £3.2 billion in this financial year according to the latest OBR forecasts. The measure is not expected to have an Exchequer impact but, as ever, businesses may incur a negligible one-off cost to update their systems, according to the tax information and impact note.

The increase with inflation has become standard practice, and with APD having been increased in this way for both 2013-14 and 2014-15, I see no reason to oppose it today. However, I want to use this opportunity to push the Minister on support for English regional airports, following the devolution of APD to Scotland and Northern Ireland. As he will be aware, the Scotland Act 2016 devolved powers to set the rate of APD and the Scottish National party intends to halve Scotland’s rates. Northern Ireland already has a rate of zero. During the passage of the Scotland Bill several MPs from both sides raised concerns that further devolution would put regional airports in England at a significant disadvantage and create a distortion of competition.

HM Treasury published a discussion paper in July 2015 outlining three possible options for tackling the issue: devolving APD within England; varying APD rates within England; or providing aid to regional airports. It invited comments by 8 September, but to date no Government response has been published.

When I took part in a Westminster Hall debate on the issue on 20 October last year, in my former capacity as shadow Exchequer Secretary, the Financial Secretary told me that the response would be published in due course, but to date I cannot see a summary of responses. In a recent written answer he stated:

“The Government is carefully considering the responses received to the discussion paper on options to support English regional airports from the potential impacts of air passenger duty devolution and will respond in due course.”

Perhaps he could take this opportunity to provide an exact date, if possible, for publication of the Government’s strategy to support regional airports. Aside from that and the other matters I have discussed, we will not oppose the clause.

[Christian Matheson (City of Chester) (Lab)]

It is a pleasure to see you in the chair once again, Mr Howarth. I wish to speak only briefly. My hon. Friend the Member for Salford and Eccles reminds us that the Scottish National party Government in Scotland have chosen to reduce APD. It is nice to hear that for once they have actually done something with the tax powers they have been given, because of course they have been dodging other tax powers despite having the authority to exercise them.

May I echo the words of my hon. Friend the Member for Salford and Eccles? The tourism industry across the UK is crying out for clarity on APD, because of the devolution issues. The differences in air passenger duty now make it financially viable for a family of five to drive from the north-west of England, the area that I—and your good self, Mr Howarth—represent, up to Scotland to save money. Those price differentials now mean that that makes sense, so they are damaging the tourism industry and the airport sector outside London.

The impression of the tourism industry—fairly held, I think—is that Treasury Ministers have been kicking the issue into the long grass for a long while. They have been looking for a solution, not finding one and then having a further review. My hon. Friend has outlined some of that. I therefore stress to Ministers again that there has to be a long-term and sustainable answer to those variables in air passenger duty. The existing situation is not sustainable, so the sooner we get a consistent and sustainable balance that the tourism industry can live with, the better for our economy as a whole.

[Damian Hinds]

Clause 137 makes changes to ensure that the rates of APD for 2016-17 increase in line with RPI, so that the aviation sector continues to play its part in contributing towards general taxation and reducing the deficit.

As the hon. Member for Salford and Eccles rightly said, APD raises a little more than £3 billion annually, so it is an important part of Government revenue. The increase in rates has effect from 1 April this year and was announced at Budget 2015 to give the industry sufficient notice of the change in rates. The low level of inflation and the rounding of APD rates to the nearest £1 mean that short-haul rates will remain frozen for a fifth year in a row, which will be to the benefit of about 80% of passengers.

The hon. Members for Salford and Eccles and for City of Chester raised the important subject of APD devolution and the options that the Government have been considering. To be clear, APD will be under the control of the Scottish Parliament, but the Scottish Government are still consulting, so no change has yet been made. The three options in the discussion paper published at summer Budget 2015 were correctly identified by the hon. Lady: to devolve the setting of APD within England; to vary the rates within England; or to provide aid to regional airports. The issues are complex and we continue to consider the various options. I am not in a position to give a specific date, but we will of course respond in due course.

APD is a fair and efficient tax, where the amount paid corresponds to the distance and class of travel of the passenger. The changes under the clause will ensure that the aviation sector continues to play its part in contributing towards general taxation.

Question put and agreed to.

Clause 137 accordingly ordered to stand part of the Bill.

Clause 138

VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc

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

Finance Bill (Third sitting)

Christian Matheson Excerpts

Tuesday 5th July 2016 Public Bill Committees

[Damian Hinds]

It is a pleasure to respond to the pertinent questions put by the Opposition and SNP Front Benchers. They both asked about exploration, which is the lifeblood of the industry’s future. We had a choice: introduce a complex system of reliefs and incentives relating to exploration, or have a simple, straightforward tax cut across the board. We chose the latter. Reducing the tax payable on the economic activity lowers the hurdle point for investments, improves the net present value of projects, and means that more will take place. It is cutting the headline rates of tax, rather than anything else, that provides a clear incentive to invest in the continental shelf. The Government have also twice provided £20 million for seismic surveying to help kick-start those processes.

Allowances came up a number of times. Over the past few years, the Government have been simplifying that system. Allowances mean that projects that are economic, but not commercial at the higher rates of tax, can go ahead. That is good for the Exchequer, as it brings in more income, and good for the companies concerned. The hon. Member for Salford and Eccles, who speaks for the Opposition, asked when the Government would finalise the secondary legislation expanding the definition of qualifying expenditure for the investment cluster area allowances. Draft legislation was published at the end of last year and the technical consultation ended in January. HMRC has been analysing the responses to that and liaising with the Treasury and the OGA to ensure that the legislation works as intended. We plan to lay the new regulation before the House after the summer recess. It will apply to all qualifying expenditure incurred after 8 October 2015.

The hon. Lady also asked about the power to extend the definition of relevant income and the timing. The Treasury will consult with industry shortly, and will ask it to provide information and evidence to inform the design of the inclusion of tariff income in the investment cluster area allowances. It is a complex area, with a range of commercial arrangements that we need to understand if we are to ensure that infrastructure owners and users can benefit from the allowances. The power has been drafted in such a way as to ensure that the inclusion of tariff income can have a retrospective effect. That measure will not delay the introduction of the extension to qualifying expenditure.

The hon. Member for Coatbridge, Chryston and Bellshill rightly asked about the crucial opportunity area of decommissioning. Decommissioning across the shelf is expected to become a multibillion-pound industry, and there are significant export opportunities as other basins around the world become more mature. Decommissioning costs here could be more than £40 billion. As I said earlier, the Government support Sir Ian Wood’s vision of establishing north-east Scotland as a real centre of excellence. That is why we support the creation of an oil and gas technology centre in Aberdeen as part of its city deal. As the hon. Gentleman will know, the OGA will soon publish its United Kingdom continental shelf decommissioning plan.

The hon. Gentleman and the hon. Member for Salford and Eccles asked about late-life assets and asset transfers. We are in constant discussion with the OGA and industry to understand what impediments there may be to value-creating deals going ahead, and we retain an absolutely open mind on that. The hon. Gentleman also asked about Government guarantees. Again, that is something on which the Government have an open mind, in recognition of the importance of the sector. The Government are willing to consider proposals for using the UK guarantee scheme for infrastructure where that could help to secure new investment in assets of strategic importance to maximise economic recovery. Any proposals would need to meet the scheme’s criteria, including those relating to commerciality and financial credibility.

The Government have recognised the exceptionally challenging conditions that the industry faces, and in response announced a £1 billion package of fiscal reforms in the March 2016 Budget, which built on the extensive package from the previous year. The package includes halving the rate of the supplementary charge, permanently zero-rating the petroleum revenue tax, and extending the scope of key allowances to incorporate leasing and to encourage investment across the North sea. The Government have also committed £20 million of funding to a second round of seismic surveys to encourage development in under-explored areas.

Despite the extremely challenging conditions, this remains a sector of opportunity for Scotland and the UK; it is estimated that somewhere between 11 billion and 21 billion barrels of oil and oil equivalents are still to be had. More than £11 billion was invested in the sector last year. I am constantly encouraged by the positive attitude of the industry, and all the work that it is doing to get its cost base down and continue to look for new opportunities. I assure you, Mr Howarth, and all hon. Members, of the Government’s absolute commitment to the very positive tripartite approach between the industry, the Oil and Gas Authority, which is really more than a regulator, and the Government, who include the Scotland Office, the Department of Energy and Climate Change and the Treasury.

[Christian Matheson (City of Chester) (Lab)]

There is no doubt that the UK offshore oil and gas sector has a world lead, provides huge revenue and technical expertise to the UK, and needs to be protected, but my hon. Friend the Member for Salford and Eccles raised the spectre of onshore fracking. Can the Minister give reassurance that our efforts to support the offshore oil and gas industry will not be used as a back-door way of giving tax breaks to onshore fracking?

[Damian Hinds]

Mr Howarth, you would not want me to stray on to topics that are not strictly in the scope of the Finance Bill. The Government believe that there is significant potential for unconventional oil and gas—for fracking—and I think that we owe it to future generations, to ourselves and to British industry to make sure that we discover what opportunities are there. Exactly how the regime develops, in fiscal terms, is to be determined, but we know that there will be an absolutely robust safety regime. In the initial phase, the important thing is to find out on how big a scale that opportunity may be.

I had reached the conclusion of my remarks, having reiterated the very firm commitment across Government to supporting this industry. This is a bold package of support in the Budget. We know of no other country in the world that has responded on quite such a scale to the extremely challenging conditions presented by the world oil price. I commend the clause to the Committee.

Question put and agreed to.

Clause 54 accordingly ordered to stand part of the Bill.

Clauses 55 to 59 ordered to stand part of the Bill.

Finance Bill (Fourth sitting)

Christian Matheson Excerpts

Tuesday 5th July 2016 Public Bill Committees

[Mr Gauke]

I come back to what I was saying earlier, namely, that doing nothing will mean that many properties, often relatively modest properties, will fall within the inheritance tax bands. Doing nothing will mean that a tax that I think most people in this country would support, on the basis that it is designed for the very wealthy, would apply to people who would not necessarily have had high incomes in their lifetimes. That creates a sense of unfairness. There are certainly parts of Edinburgh where relatively modest properties are of such a value as to create concerns about inheritance tax.

[Christian Matheson (City of Chester) (Lab)]

If the Minister is concerned about rising property prices and an overheating housing market driving more people into inheritance tax bands, perhaps he should do something about the housing market—rather than fiddling around with the tax bands—for example, by building more houses for rent and cooling the housing market in that way.

[Mr Gauke]

I very much support the idea that we need to build more homes. As a Government, we have done so. We are a Government who have changed many of the planning rules. We are a Government who announced a substantial housing package in the autumn statement. This Government are doing much to improve house building in this country. Indeed, the number of building starts last year was high, which is encouraging.

To conclude, the measures before us are a sensible further step to meeting our objective of taking the family home out of inheritance tax. They will also ensure that there is no impediment to people downsizing, creating difficulties in the housing market. I hope, notwithstanding the objections from the Opposition, that clause 82 and schedule 15 will stand part of the Bill.

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

Bank Branch Closures

Christian Matheson Excerpts

Thursday 30th June 2016 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

I beg to move,

That this House is concerned about continued bank branch closures and the damage that this causes to local communities, small businesses and the welfare of senior citizens; and calls upon the Government to help maintain access to local banking.

The motion stands in my name and those of the hon. Members for Wells (James Heappey) and for Ceredigion (Mr Williams). This has been very much a joint effort and I pay tribute to them. I would like to thank the Backbench Business Committee for the opportunity to bring this motion and debate before the House today. When the three of us approached the Backbench Business Committee, hon. Members serving on it graciously offered us the day of the local elections as a possible occasion. Knowing that there was wide support for the debate and not wanting it to get swamped by external events, we declined and asked for a later date. That worked out well, didn’t it?

I have a smartphone in my pocket that has an app—let me explain to more senior hon. Members that that means an application—through which I can access my banking services, pay my bills, check my balance and transfer money between my accounts, none of which, I hasten to add, are sited offshore. I can probably even apply for a loan. Banking is changing, and in many ways it is becoming more convenient and perhaps changing for the better.

Convenience, however, does not rely solely on the possession of a smartphone. The physical presence of a bank is still important. Today, I shall not call for a halt to all technological advances in banking. I do not want to go back to the days of accessing cash by having to cash cheques in a branch, and I certainly do not want to go back to the days of using credit card devices that the shopkeeper used to have to fill in by hand and then run a mechanism over to print the credit card details on carbon paper.

[Albert Owen (Ynys Môn) (Lab)]

In my pocket I have a cheque book and a mobile phone, but when I go to the bank, I do not have much of a choice when it refuses to provide many services. The serious point is that many places in my constituency do not have a mobile phone signal, so people face even greater limitations on how they can provide or access services.

[Christian Matheson]

My hon. Friend makes an extremely useful point, and if he will bear with me, I may come on to say more about some of the areas that are suffering the most from these bank closures.

As my hon. Friend has perhaps alluded to, we need to recognise that for many—the elderly, people with caring responsibilities, and small business owners—high street banks’ programmes to close many of their smaller branches and centralise everything in the centre of large towns create havoc for individuals and businesses and damage local communities.

My interest in this issue was prompted by a spate of branch closures in the Hoole area of Chester. Last summer, NatWest announced it was closing its branch there. The excuse was that the branch was underused. Yet I and my team undertook a scientific survey of usage by standing outside and counting people going in over several hours that flatly contradicted the suggestions made by NatWest. HSBC had already gone in Hoole, and it was followed more recently by Lloyds, leaving only a Barclays branch as the so-called last branch in town. Bank branches around Chester had been closed previously, including in the Boughton and Saltney districts.

All our banks are now in the centre of Chester, which has several profound effects. First, it increases traffic into the city centre. Ours is already a congested city built on the beautiful River Dee, but when the Romans founded it and when it became a bustling market town in the middle ages, nobody thought to design it with the needs of 20th and 21st-century car use in mind. Keeping satellite branches is, strangely, good for the environment. More importantly, satellite branches support local businesses.

[Nia Griffith (Llanelli) (Lab)]

My hon. Friend hits on the point that it takes up a lot of small businesses’ time if, instead of banking locally, they have to go to another town where the traffic is piling up. That is the complaint I have heard from people in Cross Hands because that is what they will be forced to do when their bank closes.

[Christian Matheson]

I thank my hon. Friend for her intervention, and I was about to make exactly the same point.

People drop into shopping areas such as Hoole to go to the bank and then perhaps to one of the local shops. Incidentally, Hoole recently won the outstanding award from the “Great British High Street” awards, for which I thank the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones). I would be grateful if the Minister passed on my thanks to him.

The bank is very much part of the ecology of the local high street. If we take it away, we damage that ecology and the other small businesses that rely on it for increasing custom, as people pop to the bank and then to one of the small shops. We rely on it, too, to provide easy access to banks for small businesses, as my hon. Friend the Member for Llanelli (Nia Griffith) pointed out. Small businesses feel able to put up a small “back in 10 minutes” sign on their door in the middle of the day as they pop down to the local bank to get change or pay in money, but they would not feel able to put up a “back in two hours” sign if they were they forced to go into the city centre of Chester or indeed any large town. It is tough running small businesses and time away from the shop is business time lost.

For all the advantages of internet banking—and there are many—the blunt truth is that a small business cannot pay cash into the bank through a laptop computer. I cannot help but wonder whether all of this is made worse because of the advertising these banks use. No wonder HSBC moved away from calling itself “the world’s local bank”; yet we still have Lloyds bank saying that it has been “by our side” for 250 years—at the same time as it closes its Hoole branch. It is not by our side any more in Hoole, I am afraid. The very untruths of the advertising campaigns, claiming to be local and supportive of local small businesses, while making access to branches harder, exacerbates the crisis that we face—and it is a crisis.

Reuters reported last week that 600 branches closed in the 12 months to April this year. There is a social division in these closures. It says that more than 90% of the closures were in areas where the median household income was below the British average of £27,600, according to an analysis of Office for National Statistics data on average incomes in the locations where branches were closed. By comparison, five out of the eight branches opened by these banks over the same period were in some of the wealthiest neighbourhoods in Britain: Chelsea, Canary Wharf, St Paul’s, Marylebone and Clapham, all districts in London. That is right: despite the onward march of technology, banks are still opening new branches, but in highly affluent areas.

The Reuters report cites concerns from campaigners that

“banks are cutting too fast in places where people are less able to fall back on digital banking services because of a lack of access.”

That reminds me of the words of my good friend the hon. Member for Ynys Môn (Albert Owen) about the different ways in which access to banking services might be prevented. Problems can be caused by people’s finances, the lack of physical access or the inability to use the internet. The report quotes Fionn Travers Smith of Move Your Money, which campaigns for ethical banking. She says:

“We are witnessing the creation of a dual financial system: one for the middle class and wealthy and another for the poor.”

Indeed, I have found that one of the groups to be hardest hit by the recent closures in Chester are pensioners, not necessarily the most tech-savvy group—although I do not want to make assumptions—who now have to make the journey into the centre of my city.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

On that point, I have been dealing with a constituency case in which a couple were conned out of their life savings—some £50,000—in a sophisticated telephone and online scam. Does the hon. Gentleman agree that forcing people to adopt these services rather than giving them the option of over-the-counter services serves only to enable organised crime and scams?

[Christian Matheson]

I have to say that the thought had not occurred to me, but I think that dreadful case illustrates a problem on which we should all focus. We can have a lot more confidence in dealing with a bank when we are inside a physical bank and dealing with an individual as opposed to being subjected to one these terrible scams. I am most grateful to the hon. Lady for bringing that awful case and awful problem to our attention.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

The trend is towards bank branch closures, and we tend to see that more in areas of deprivation and of the greatest need. Given that in these areas people often face high interest rate alternatives, does my hon. Friend think that we should hear more from the Government about how they intend to create more responsible finance options in areas where bank branch closures are happening—such as more support for credit unions and for community banks, of which there are a number in the UK?

[Christian Matheson]

My hon. Friend has a long, proud and honourable history of working within the co-operative movement, and he is an expert in this area. I intend to touch briefly on the role of credit unions as I progress through my speech.

Let me return to the problems faced by pensioners in accessing bank branches. I realise that this is not necessarily the responsibility of the Minister who is present, but at the same time as branch closures in the satellite districts are forcing people into the town centre, privatised bus companies are cutting the bus services on which pensioners rely more than any other group in society, this making it even harder for them to make that journey into the centre.

It is clear that local post offices have taken up some of the demand. Members, both current and previous, have fought long and hard against the closure of those post offices, whose continued existence has been aided by their provision of banking services. I am pleased that they have that role, but it does not constitute a suitable total replacement,

I suspect that Members may criticise the banks for the manner in which they undertake their closure programmes. I, too, am critical of the seemingly hasty and often desperate way in which those programmes are conducted, based solely on cost-saving and with no eye to service. Today, however, I want to be positive, and to propose a new solution which I hope the Minister will consider.

My suggestion is that high street banks should come together where they are closing branches to form local banking hubs. In other words, they should maintain provision on local high streets, as opposed to major town centre high streets, in shared premises and with shared costs. They could provide the automatic paying-in and cash withdrawal machines that we see in bank branches now, along with, perhaps, booths containing phones so that clients could contact bank call centres if necessary. As was suggested by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), it might also be helpful if staff were present to assist.

I accept that there are technicalities to be resolved—who would employ the staff, and who would own or lease the properties?—but today I am concerned only with floating the principle, and, indeed, it is not my role to be prescriptive to the banks about the specific business model. It is possible that various models could be tried and tested, and I wish to offer Chester as a test bed where the banks could come together and provide a model community banking hub. Perhaps Chester’s credit union could be involved as well.

Let me therefore throw down the gauntlet, and challenge the banks to take my proposal seriously. I invite them to come to Chester—or Wells, or Aberystwyth—to set up a joint hub, and give it two years to see if it works. That is a serious offer, and I will help the banks to make a success of it in my patch. Either that, or they should stop using advertising that suggests that they are more human and accessible, while continuing to close local branches and make access harder. Banking is a private sector business, but it is also an essential service. A bank is an essential part of the local high street ecosystem. There must be no more cavalier closures of branches which, in turn, damage the local economy: banks are too important for that. In 2008, we learned that some big banks were—apparently— too big to fail. Perhaps the message today should be that some local banks are too important to local communities to be allowed to close.

--- Later in debate ---

[Christian Matheson]

I am grateful to you, Madam Deputy Speaker, the Minister and the House. In these crazy, turbulent times, we have found some unity. Members on both sides of the House, from England, Scotland and Wales and from rural and—as my right hon. Friend the Member for Tottenham (Mr Lammy) demonstrated—urban constituencies agree that this problem must be addressed.

We have heard solutions proposed, including the mutuals idea from my hon. Friend the Member for Harrow West (Mr Thomas), and some excellent and practical points from the shadow Chancellor. I get the impression that the Minister is willing to listen. She says that her door is open. I hope it will be and that she will put pressure on the banks’ chief executives to respond. I also hope that she will have access to those chief executives, even if the hon. Member for East Lothian (George Kerevan) and others do not. This matter spans many different areas of government: support for small businesses, community cohesion, social isolation, crime prevention, broadband and internet access and, above all, the alleviation of poverty. These issues will not go away. I am most grateful to hon. Members for their contributions, but action is also required.

Question put and agreed to.

Resolved,

That this House is concerned about continued bank branch closures and the damage that this causes to local communities, small businesses and the welfare of senior citizens; and calls upon the Government to help maintain access to local banking.