National Insurance Contributions (Reduction in Rates) (No.2) Bill

David Simmonds Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I welcome this Bill, as I did the previous one that reduced national insurance contributions. As a starting point, we must recognise that a lot of the lobbying about our economy tends to come from the biggest organisations with the deepest pockets. Around 70% of people employed in this country work in an enterprise with fewer than five staff. Those businesses do not necessarily have a big public affairs department or a collective sector or trade body to represent them, but they will benefit enormously and directly in their pockets from the decisions that we take this afternoon.

It concerns me a little to hear those on the Opposition Benches who scorn the value of the money that the Bill puts back into people’s pockets, because £8 a week might not seem like a huge amount—in the context of an MP’s salary, perhaps it is not—but particularly for lower income households, that £8 a week accumulated over the period of a year is a valuable contribution towards a better standard of living. It is more money to spend on the rising costs that households face—car insurance and other bills—or to put towards a family holiday, a better Christmas or more treats for the children. We should recognise that all of that contributes to a higher standard of living for people in this country. A lot of today’s debate has been party political in tone, perhaps regrettably, given how empty the Opposition Benches are.

I was elected to public office for the first time in 1998—a year after the last Labour Government took office. Many of us will recall that that Government were elected on a pledge that they would stick to the spending plans put in place by the outgoing Conservative Government in 1997 for their first three years in office. Thereafter, they spent, in broad terms, 10% more taxpayers’ money every single year than they raised in taxation revenue. When the country faced a significant financial crash in the late 2000s, there was already a huge national debt as a result of the Labour party’s failure ever to meet their committed expenditure through tax rises, productivity growth or any other method.

For me as a local authority councillor, that meant a Labour Government who said, “We are introducing entitlements to higher standards of care and an expectation that you will fund it through introducing charges for the most vulnerable people.” That Labour Government required every single local authority to make massive efficiency savings every year in every other part of public services to balance the budget. Given some of the pledges that Labour made in the Budget debate, whether on the environment, VAT on school fees or windfall taxes, if there is to be a change of Government, we will see yet another period of a Labour Chancellor saying, “We failed to raise this money in tax, we have not generated the income, so we are going to borrow, borrow and borrow, and the national debt will continue to rise.”

The taxable capacity of our economy and the economies of every country in the western world is an important consideration for us. Every major economy has been affected by covid and Russia’s illegal war in Ukraine. We must be careful about how we allocate taxpayers’ money to ensure that we are contributing to growth and focusing on the things that make the biggest difference to our constituents’ standard of living.

The Treasury team has been lobbied a great deal on issues from inheritance tax to stamp duty, higher rate tax and additional rate tax. I was pleased to see in the Budget that measures have been taken or work has begun on things like reducing the cliff edges that affect people, such as in child benefit. However, we need to recognise that around 11% of taxpayers in the UK currently pay higher rate tax, whereas the national insurance cut benefits, as my hon. Friend the Minister said at the Dispatch box, around 29 million working people—the vast majority of people in this country.

According to the Barclays insights report for my constituency, which I received recently, as I think did every other right hon. and hon. Member, the biggest increase in discretionary expenditure has been on lower-income working households. That suggests that the measures taken by the Government to date are beginning to feed through.

Let me turn briefly to a number of points that have been raised about the use of national insurance contributions. We heard the Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), asserting very clearly at the Dispatch Box in Prime Minister’s questions earlier that a reduction of national insurance meant a cut in the budget for the NHS. It is worth reflecting on the Government Actuary’s quinquennial review, which sets out in a lot of detail how national insurance contributions are used, some of their history and how they came to be that way.

When national insurance was introduced in 1911, it was intended to represent—in a physical sense, with an actual stamp on a card—a direct contribution towards someone’s benefits and pension. It evolved, in particular with the 1948 reforms, into the shape we see today. But there is no direct hypothecation between the vast majority of national insurance contributions and any part of public services. In fact, around 94% of the national insurance fund is spent directly on funding retirement pensions. It is a subset of other categories of national insurance contributions that represent the biggest single transfer from NICs paid by our constituents into the national health service.

As I learned in my time engaging with a whole variety of different bits of government, such as the teachers’ pension scheme, people pay in, it goes into a pool of Government funding and decisions are then made by the Treasury on how to distribute that. In the case of the national insurance fund, we know that one of the issues the Budget begins to deal with really effectively is the recognition of a 17% statutory maximum on any Treasury contribution to cover shortfalls in that expenditure. Yet by the middle of this century, as a result of our changing demographics, we know that those shortfalls will become quite significant.

The steps made through such measures as the removal of a lifetime limit on pension saving and the uprating of auto-enrolment are examples of a Government not just thinking a couple of years ahead with an election in mind, but thinking 30 years and 40 years ahead to ensure that we have a sound financial basis for the biggest single item of Government expenditure in the middle of this century, when all those bills will be coming home to roost. That is evidence of a responsible and Conservative approach: looking at how we can make decisions within our taxable capacity that reflect a proper understanding of what the data tell us about the long-term position. That supports things like an increased savings rate—again, all the data we are getting demonstrates that our constituents are beginning to take that seriously—with a view to ensuring long-term stability.

On that note, I conclude by saying that the Treasury and the Government have taken exactly the right decision. They recognise that the benefits provided to pensioner households in particular over the past 14 years mean that they are now much, much wealthier, relatively speaking, than they used to be, supported by the triple lock. They now need to acknowledge that working people, who have borne a significant burden because of covid and the war in Ukraine, need extra money in their pockets. We must set that against the backdrop of an economy where, on average, 800 jobs have been created for every single day that the Conservatives have in office since 2010, where the youth unemployment rate has halved since the last Labour Government, and where foreign investment is supporting the creation of jobs and investment in productivity, which gives us cause to be optimistic and positive that this is genuinely a Budget for a better future.

--- Later in debate ---

[Robin Millar (Aberconwy) (Con)]

I must confess that I have not spoken in many Budget-related debates in the House, partly because I am well aware of the expertise of many other Members. It is a matter of some interest and pleasure for me to listen to the likes of my right hon. Friends the Members for Witham (Priti Patel) and for Wokingham (John Redwood) as they explain the consequences of, and the reasoning behind, measures such as this, and for that I am grateful. I am also grateful to the hon. Member for Norwich South (Clive Lewis), who is not in the Chamber at the moment, for showing up. As my right hon. Friend for Witham said, it is good to have a debate about these issues and it is important that we do so, but that is difficult when the Labour Benches stand empty before us.

In the words of my office manager, Barbara—who will enjoy the reference—I am a bear of little brain, and I therefore think of Budgets in simple terms. There is money coming in and there is money that must go out, and hopefully there is a surplus between the two sums. My right hon. Friends the Members for Witham and for Wokingham have already covered issues such as growth and productivity so well that I will not deal with them now, but the points that they made bring me to my own first point, which is that Budgets are about choices. Much as Opposition Members want to make out that this is a single-issue debate that is all about spending, there are choices involved in how a Government must spend any money that they have, or must borrow in order to spend.

The first of those choices is “Do we spend on public services?”, and the Chancellor has said, very clearly, “We do.” An extra £150 billion is being spent on public services, and that is in the context of a health budget of about £176 billion a year and a pensions budget of £124 billion. It is not an insignificant amount. It is not an afterthought. It is not a rounding-up error that slipped past the accountants’ eyes in the preparation of the Budget. It is a serious commitment to public services.

At this point, I must refer to my own constituency and the Chancellor’s inclusion of cultural projects of national significance, with £10 million for Venue Cymru in Aberconwy. We are exceedingly grateful for that, and I know that the council was delighted and surprised, but I did work hard to make the case for it with the Chancellor. As he pointed out, culture is an investment with a real economic return, and that is something that the students at Ysgol John Bright in my constituency understood. Just last week I was talking to the cast of its production of “Chicago”, and Lily, Arron, Isobel and others said how much they appreciated the chance to take part in productions not just in the school hall but in the local theatre. They saw the value of an investment in that theatre enabling future generations to have the same experience.

That brings me to my second point about how we choose to spend our money. We can invest it, as the Chancellor has demonstrated—for example, in his reference to a productivity programme. I think he set aside £140 million or £150 million for productivity within the NHS. No one can describe this as a short-termist Budget, or one that is only thinking about some event that may happen later this year—I cannot imagine what. This is a really forward-looking Budget.

The third thing that a Chancellor can do with a Budget is repay debt, which I feel very strongly about. The argument was made by the hon. Member for Norwich South that we can pay more and more into public services. Usually, the argument is that we can pay a penny here or a penny there, which never sounds like much, but the debt that builds up when we have to borrow to make payments is considerable. Let us not forget that the narrative of “just a penny more” or “just give us more money and we’ll get it done” was tested to destruction in 2010. By the time we got to 2010, what was the legacy? A note saying, “There’s no money left.” I did not write the note; it was a Member now on the Opposition Benches—then a Minister, no less. We have to address the idea that we should simply throw more money into public services. We have a duty to members of the public to change the narrative of, “This party is bad because it doesn’t spend; that party is good because it does spend.” It is not the answer, which is why we have a moral duty—never mind an economic and financial one—to properly make the case for reform. Again, I refer back to the Chancellor’s decision to put £140 million or £150 million into a productivity boost for the NHS.

Debt levels are increasing—that is for sure. Health and pensions will receive £176.2 billion and £124.3 billion respectively this year. The third biggest public sector spend this year will not be on policing, defence—that is a subject for another debate—education or universal credit, but on the interest on debt repayments. I am sorry to pick on the hon. Member for Norwich South, and even sorrier that he is not in his place to hear this, but to keep reducing everything to the number of nurses we might be able to recruit, or to the number of hospitals we might be able to build, is an irresponsible way of looking at public services. The repayment that we make on debt is forecast to be £94 billion this year. In simple maths, that is the equivalent of building two new primary schools every single hour of every single day this year. If we want to reduce stuff to such a level, let us have that conversation, because our debt repayments are costing us two new primary schools, at £5 million each, every hour—24 hours a day, 365 days a year. Maybe I have got the price slightly wrong, but we can work out the numbers

We know that debt levels increased under the last Labour Government. I will not be drawn into that discussion—much as I would like to—because this debate is about national insurance, but I will make the point that debt has increased. How have the Conservative Government done that over the last 14 years? They have spent money on the things that this country has needed. Apart from empty coffers, we inherited a global financial crisis. We introduced a programme of austerity, and we had to work that through with three programmes of quantitative easing, worth about £350 billion. We were then unexpectedly hit by a pandemic, for which our expenditure was about £410 billion—equivalent to about £6,000 per head of population. That costs money to service, and we are now paying it back.

None of us knew that the pandemic was coming. None of us knew that a war was coming in the east of Europe. None of us knew that an energy crisis was coming. None of us knew that there was going to be inflation across the economy. None of us knew these things, but this Government responded and we wrote the cheques. When the energy crisis came up, the Government spent £67 billion on supporting businesses and members of the public. During the covid crisis, £140 billion of that £410 billion went on shielding business so that when we came out, the economy bounced straight back to where it had been. This is an understanding of how the economy works and of how public finance works. It is distinctively Conservative that this is so, and we have shown this.

There is a fourth thing we can do with that spend. If we are not spending it on public services, investing it or drawing down debt, we can choose to cut taxes, and that is where we have come to. It was on the streets of Llandudno that I encountered the first person to ask me, “Who is going to pay for all of this?” It was during the covid pandemic, on the King’s Drive in Llandudno, where a resident and I were having a chat across his garden wall—suitably spaced at the time, of course. The area has it challenges, and it might be expected that people there would be looking for help from the Government, and indeed they did, but that gentleman, who had lived on that street for six decades, was the first person to look me in the eye and say, “Someone is going to have to pay for all this.”

That is an important point. We talk about being honest, and I was sorry to hear some of the comments from the hon. Member for Richmond Park (Sarah Olney) about being honest and not pulling the wool over people’s eyes. Let us start by saying, “This costs, and someone has to pay for it. Someone has to be responsible for looking at how this is paid for.” The choices we make to spend are matched by the choices we make on how we spend and where the money goes.

This Government have chosen to make a cut in national insurance, and I fully support that. I would say that 2% is a distinctively conservative amount, in a distinctively Conservative approach to tax cutting. It matters; it is making a difference. We hear that for someone on the UK average salary of £34,500, that will be worth about £900, taking the two cuts of 2% together. A 4% cut will be worth about £900. In my constituency the average salary is considerably less; it is about £28,000. Iusb know that some who are listening to this will doubt that, but that is the figure. To somebody on £28,000, that 4% cut will be worth about £600, and that makes a difference. That £50 a month will make a difference.

That brings me to my first comment about the national insurance cut, which is that it is targeted. This is deliberately intended to make a difference. This is not gesture politics. This is not unfunded. This is not careless. This is not something that is done casually or without thought or regard. It is targeted, and 27 million people are better off. There has been talk of why pensioners have not been included, but pensioners have benefited from the triple lock. There has also been talk that the better-off receive more of a cut. The nature of tax is the more you receive, the more you pay. That was exactly the argument made by the hon. Member for Norwich South, and I might characterise it as “soak the rich”, yet that somehow seems to be an argument against providing a tax cut. That is nonsense and it demonstrates a misunderstanding of finance that exists on the Opposition Benches.

This measure is targeted because it is aimed at those who are in work. It is distinctively Conservative to encourage and reward those in work and to say to them, “At the end of this month you will have more left over in your pay cheque than you did before. Why? Because the Government have made that decision to impact your pay cheque so that you can take home more.” If we are going to talk about comparisons, we should go back to 2010 and say that over these 14 years the attitude to work and the understanding of the importance of work are reflected in the fact that, on average, 800 new jobs a day have been created under this Conservative Government. It is a distinctively Conservative thing to target finance intelligently and to do it to encourage people into work and encourage them in that work.

My second point is that it is the second cut in a row, and dare I say it—oh, there is no one on the Opposition Benches to listen to this—there is a plan to reduce the tax burden. We have established that there was a need for the Government to make payments to support people and businesses through the pandemic, the energy crisis and inflation, but we are now cutting the rates to encourage work, and it is a plan. It is distinctively Conservative to have a plan, and 4p off the tax on my wages and their wages is a big cut by any estimation.

The hon. Member for Richmond Park talked about the Chancellor taking a bolt cutter to the triple lock, and I remind her that pensions are structured in such a way that people do not pay tax when they pay in, so that the sum builds up and they benefit from the interest it accrues—it grows faster over time. The other side is that they pay some tax when they take their pension. The pension was never intended to be tax free, and there has always been an expectation that there will be some payment to be made. That is not taking a bolt cutter to the triple lock.

It was this Chancellor who committed to the triple lock, and that commitment, depending on the estimate, has cost the Government £10 billion. There are other ways to calculate the pension, such as having a double lock, measuring it against the consumer prices index or measuring it against earnings, but saying that, no, the triple lock stands has cost the Government £10 billion more, which is £10 billion in pensioners’ pockets. Let nobody say that this Government do not care about pensioners or the elderly—and I say that as an MP representing a constituency where 27% of my constituents are over the age of 65. Again, we all have to make a payment, and this is about talking straight.

We may have forgotten the capital reliefs—the full expensing—announced in the last autumn statement. Again, that has a cost, but it is a real benefit to business. That is £50 billion over five year. There might be questions about that estimate, but it is another big commitment, this time not to pensioners but to business. To come back to my point about a plan, we have made a commitment to pensioners—an expensive one, but the right one—and we have made a commitment to business to encourage growth, so it makes sense that in this Budget we have made a commitment to workers. Again, this sounds like a plan; it sounds to me like there is an intentionality that I simply do not see or hear from Opposition Members.

My third point is that I am very happy with the aspiration to reduce further or eliminate national insurance. It is distinctively Conservative to want to reduce tax further, and it is distinctively Conservative to make tax simpler. This is perhaps not the time to debate other tax methods or flat taxes, but I see no problem with suggesting our direction of travel. What I find remarkable is that the Opposition’s immediate reaction is to say, “Oh, that’s unfunded.” At some point in the management of the public finances, we have to balance where the money comes from with where it is going. It is completely reasonable to say that we have an aspiration to reduce taxes. If it is a case of eliminating national insurance, so be it.

I will bring my remarks to a close—[Interruption.] I can hear the chuntering from the small number of Opposition Members present, and I thank the hon. Member for Batley and Spen (Kim Leadbeater) for joining her Front-Bench colleagues. The doctor says that sometimes medicine does not taste so good, and I have a feeling that some of the things I am talking about do not taste good to those on the other side of this House, because this is medicine; I am talking about a responsible approach to public finance, telling the truth, and dealing with people as adults by saying, “Money has been spent and now money is having to be paid back.”

The key point is that we are still managing to bring cuts to the tax paid by workers. As I said, we have a trajectory on that: we have given money to pensioners—those who need it; we have given money to businesses, through capital relief and full expensing; and now we are doing this for workers. This is distinctively Conservative because of the intentionality, the plan and the focus on those who need it, the businesses that create growth and wealth, and the workers we wish to incentivise with it. We understand that the Opposition will vote for these cuts, but they cannot muster any enthusiasm for them—they certainly cannot muster any debate about them. We know that Opposition Members are here somewhere, because, presumably, they will all turn up to vote in a minute, but they are not on the Benches now. The question is: what is the Labour plan for tax?

[David Simmonds]

I am very much enjoying what my hon. Friend has to say to the House about this Budget. He will have heard the saying many times in the local government world that, “Culture eats strategy for breakfast”. One Opposition party has a strategy of trying to pretend it has no funding commitments but it has a deeply ingrained culture of tax and spend, whereas we have a party of government whose culture and strategy is very much about a long-term trajectory of tax cuts and living within our means. Does he agree that it is the culture in the Government of living within our means that will out after this election?

[Robin Millar]

My hon. Friend makes a good point, in that, first, culture does eat strategy. We can strip away all the words about this but his point about cutting our cloth and living within our means describes exactly what we have seen happening. I have tried to set out, albeit perhaps rather clumsily—I ask Members to forgive me if that is so—that there is a 10-year story here of inheriting no money, and running into a pandemic that nobody expected, a war that no one planned, an energy crisis and global inflation. Yet this Government turn up with a Budget that says to the worker, “4p less in the pound is what you are having to pay.”. That is remarkable.

We might argue about the hows, whys and wherefores, but we have to be honest about the fact that the headwinds we have encountered as a nation over the past decade were not expected. Given that we started from a point of having no money—to use the phrase on the note left by the Labour Minister—it is extraordinary that we are here today debating another 2p off tax. It is even more extraordinary to me that the Opposition have not got the bottle to turn up for a debate as important as this.

Budget Resolutions

David Simmonds Excerpts

Tuesday 12th March 2024 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

One of my mother’s favourite phrases was that anything can be proved with statistics. It seems to me that Budget debates always follow that, as they are something of a statistical salad from which Members can pick out their favourite morsels to support any individual argument.

What is often more important is not to pick and choose statistics to advance an argument, but to look at trends. The reports that I think every Member receives on a regular basis from our big banks and financial institutions—NewDay, Barclays’ Insights reports, Lloyds and others—tell us a great deal about what is going on in the financial lives of the people we serve. Broadly across the country we see a clear trend that people are in a position to save more from their day-to-day incomes. Spending on consumer activity is increasing quarter on quarter, and is particularly strong among constituents on a household income of between £20,000 and £40,000 a year—those on lower incomes, but in employment. That is part of a generally improving—although not rapidly improving—trend.

It is against that backdrop that I welcome in particular the fact that the Budget focuses its support primarily on the lowest income households, including pensioners through the triple lock. It incentivises work, but not just for the benefit of people earning their own income. It recognises the benefits of having a job—for mental and physical health, and for tackling child poverty. It also encourages investment. We have heard a great deal of debate about manufacturing. The introduction of full expensing, and the commitment to retaining it, will be hugely important in raising productivity over time and will help us to address our biggest national challenge, the demographics of a reducing workforce, while helping individual businesses. On a recent visit to the Sharmans Pharmacy in my constituency, I was shown its new pharmacy dispensing robot. It increases rapidly the ability of that pharmacy to fill prescriptions for people who come in. It increases the efficiency of workers and their ability to engage with customers, and it represents a degree of confidence on its part that an investment in an expensive piece of technology will help to increase its profit margins, secure jobs and provide a better service to people who come through the door.

Against that backdrop, and although we have seen amazing progress, with on average an additional 800 jobs per day since the Government took office in 2010, we still face a very significant recruitment challenge. I hear from businesses in my constituency, day after day, that securing workers with the skills to fill the jobs that enable us to grow and increase productivity remains a challenge. I will provide the Government Front Bench with the thought that, just as with the Windrush generation, when we went out and specifically sought to recruit people from across the world to fulfil the roles we needed—it did not always end well, but on the whole it was enormously significant and positive—we might need a similar kind of deal with a friendly nation today, and to make a decision to take control of economic migration and establish links with countries from which we can source the skills we need and with whom we have an affiliation, to provide the stability our economy needs, and in particular the public sector workers we require in the NHS, dentistry and so many other areas of our national life.

To develop the theme of productivity, all across the public sector we hear interesting examples of how different public services are looking to improve productivity. From the Royal Navy, we have heard how future generations of warships will require one third of the number of sailors that the current technology demands. Across the NHS, we see examples of how new technology—I declare an interest; I am married to an NHS doctor—is improving the efficiency of both the delivery of services and the speed with which they can be provided. In that context, it is striking that, while people can be cynical about capitalism, there has been a 50% improvement in cancer survival rates over the past five decades as a result of the wealth that has been generated and invested in this technology.

I very much encourage the Government, as they look at where the productivity gain can most be found—echoing the points made by my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) and having spent a lot of my time in local government—to focus on the areas of our public sector where we have seen the most impressive gains in productivity. It is clear from, for instance, our experience of the better care fund and what has happened in relation to public health that local authorities have consistently achieved not only some of the most impressive efficiency savings in any part of the public sector, but also the greatest productivity gains. That is because they contain accountable, elected politicians like ourselves, responsible to their communities, who are willing to run things as if they were running their own businesses. One example is the investment in jet patchers enabling potholes, which are a real pest for many of our constituents, to be fixed very rapidly. The decisions on that investment were made in local government years before anyone in central Government got around to identifying the potential benefits of the technology.

[Mr Betts]

Is it not therefore disappointing that while the Government have assumed 5% productivity increases in the Budget, they are also assuming that central funding from the Department for Levelling Up, Housing and Communities will be cut by 2.3% a year in real terms for four years? Even if a 5% increase in productivity were achieved, it would fill only half the gap caused by the cuts in local government funding that are projected in the Budget. That is no way forward, is it? Moreover, the Budget made absolutely no mention of public health or integrated care.

[David Simmonds]

The hon. Gentleman has enormous knowledge of the local government world. I think he would also acknowledge the complexity of the local government finance world and, in particular, the opportunity created by the freedoms relating to council tax increases. As we know from other debates in the House, that is not distributed across the country as evenly as we would like, but it will nevertheless enable local authorities that have built up significant financial balances specifically to manage effectively some of the economic shocks that we know are out there in the system.

Let me end with a brief defence of the value of capitalism. In this Chamber we often debate the need for greater regulation—ten-minute rule Bills, for instance, are often intended to address injustices, and that is entirely right—but if we are honest we will admit that, notwithstanding the grandeur of the Chamber and the status of Members of Parliament, the Government do not exert as much control over the day-to-day life of our economy and our national life as some of our debates imply. We need to recognise that free markets, capitalism and people’s ability to invest and seek returns have helped to deliver that doubling of cancer survival rates, as well as the incredible improvements in educational attainment. It does not always work, of course. The private finance initiative remains a significant burden, but it was a worthy attempt to do the right thing which has turned out to have some significant downsides.

We should consider the improvements in our national mental and physical health and to the rates of absolute poverty that have been driven by investment and the creation of 4 million additional jobs since 2010, which have transformed our constituents’ lives beyond almost anything else that we have done in this Chamber. It is for that reason that I have confidence in the impact that the Budget will have, and in the benefits that a Conservative Government are bringing to all our people.

Independent School Fees: VAT

David Simmonds Excerpts

Wednesday 21st February 2024 Westminster Hall

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Henderson. I, too, congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing the debate.

I represent a constituency with five thriving independent schools of the traditional private school variety; state schools that, as academies, are independent schools; a significant number of private special educational needs and disabilities schools; and private nursery provision. My children have benefited from state, private and privately funded state provision over the years, so I have a direct interest in the subject the debate.

I want to focus particularly on the impact that the VAT change would have on the very large sector of small independent schools, on which so many parents rely. Ofsted has a rule that any setting with two or more children present for the purposes of their education must be registered as a school. In my constituency, I have a stables—an equine centre—that provides equine therapy for mute, autistic children. Those children are reliant on it, because it is an environment in which they can gain educational benefit. They have been placed there and funded by the local authority, and that is simply not to be found in any other form of schooling.

Across the country, there is a huge number of such schools, which are legally registered, with an Ofsted number, and privately funded. Many are not charitable trusts; in some cases, they are businesses providing a particular type of apprenticeship or educational experience for a specific set of special educational needs. The impact of introducing VAT on the fees paid by local authorities and parents for that huge variety of provision would be absolutely enormous. A number of my constituents who have children with quite profound special educational needs are deeply concerned about the impact that this change would have on not just their household budget but the availability of the specific specialist provision on which they depend.

I have some sympathy with the argument that the element of education that is hotel costs in boarding schools is not strictly an educational purpose, and I have heard it advanced across the sector. However, it is clear that the availability of highly specialised private provision would be jeopardised profoundly by imposing a policy of putting VAT on all fees. The cost would directly hit the taxpayer and mean that so many of our constituents who feel that they have at last found the right setting for a child with profound needs, often after many years of searching for it, would see that put at risk by a policy of introducing VAT. I commend the Government on strongly resisting such a policy, and I hope the Minister will restate that resistance this afternoon.

Finance Bill

David Simmonds Excerpts

2nd reading
Wednesday 13th December 2023 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to speak in this debate, having been here to listen to some incredibly insightful and useful contributions from so many colleagues. I will endeavour not simply to repeat those excellent points, but to focus on some additional ones that have been raised in the course of the debate. My hon. Friend the Member for West Worcestershire (Harriett Baldwin), the Chair of the Treasury Committee, touched on something that is not in the autumn statement, but that I am sure those of us on the Government Benches will wish to seek further assurances about from Ministers: the tax on education proposed by the Opposition.

I represent a constituency in which there are five independent fee-paying schools, which have certainly been in contact with me to raise their concerns about the Opposition’s proposal. Every secondary school that serves my constituency, including the state-funded ones, is an independent school, because they are all academies. Every special educational needs and disability school that serves my constituency is an independent school, including those that have never been part of the state sector but came into existence as charitable organisations with a view to providing specialist SEND services. There are even stables in this country that provide equine therapy to non-verbal autistic children that, because they serve more than one child, are registered as independent schools with Ofsted.

The implications of the proposed policy, which it is said would raise £1.7 billion, would be additional VAT on fees paid by local authorities up and down the land and, more significantly from the Exchequer’s perspective, to bring a huge amount of VAT within scope of being reclaimed by that wide variety of institutions. I hope that Ministers will state with great clarity that it remains the policy of this Government that we support the excellence in our incredibly diverse independent sector, which includes both SEND and state-funded education.

We have been challenged to say what has been the biggest achievement of the Government in the past 13 years. For me, it is the thing that forms the backdrop to this Finance Bill and to my right hon. Friend the Chancellor’s autumn statement: the transformation in the number of people in our country who earn their own living through work. The Office for National Statistics data shows an incredibly clear trend in youth unemployment. Under the last Conservative Government, it was falling and falling; once Labour took office, it began to rise. Since this Government took office in 2010, the rate of youth unemployment has halved. That makes an incredible difference to both the financial wellbeing and, most importantly, the mental and physical health of our young people. It gives people prospects. It gives people hope. It means all our citizens have a stake in the economy of our country.

The same trends are replicated elsewhere. I remember what it was like as an employer trying to engage with the incredibly complicated systems under the last Labour Government, in which so many people were disincentivised to work—especially women who wanted to work part time and fit that around bringing up children. The changes in policy—particularly universal credit and really good childcare offers—have transformed the ability of people in this country to access the workforce over that period. While that has not always meant that those individuals are much better off, the fact that they are able to earn their own living and take pride in having a stake in our economy is incredibly important.

There are particular reasons why this Bill strikes me as important. I would like to develop the point made by my hon. Friend the Member for Amber Valley (Nigel Mills) about tax avoidance stop notices. I have a number of constituents who have been affected by the loan charge over the past few years, and it particularly concerns me to hear from them that, in some cases, they are still being contacted by businesses trying to sign them up to schemes of the kind that have already got them into significant financial trouble.

I enormously welcome the fact that the Government are taking steps to make sure that that behaviour can be brought to an end and that we do not see any more of our constituents trapped in financial situations not of their own making as a result of the marketing of organisations that should know that, while what they are doing is theoretically and perhaps technically within the law because a loan is free of tax, if it is not a genuine loan and not to be repaid during the person’s lifetime, it should be considered part of their remuneration for the purposes of taxation. I welcome the step that the Bill makes in that respect.

The second thing I particularly welcome is the abolition of the lifetime allowance charge. I have heard from a very large number of professionals across my constituency, especially in the NHS, but also in other types of businesses in the private sector. The impact of the lifetime allowance has been the loss of highly experienced staff from those organisations. These are generally people in their 50s and 60s who are at the peak of productivity and have an enormous amount to give, but face a financial cliff edge and are forced by that limit to make a decision to leave a career that, in many cases, they love and enjoy and in which they have much to contribute. In the NHS in particular, the change will enable experienced GPs, surgeons and consultants to return to the workplace or continue working at a higher level than they would have been able to in other circumstances. For that reason, it will benefit our public services enormously, both in productivity and by ensuring that waiting lists, which are already beginning to fall, come down much faster.

Let me turn to some of the measures designed to support our small businesspeople and the self-employed. In politics, the loudest voices in debates about the economy are often those of large corporations with substantial, well-funded public affairs departments. However, we also know from the ONS that around 70% of people employed in the UK economy are in an enterprise with fewer than five staff. The voices of those small businesses, which are the bedrock of our economy, are not heard collectively as often as the voices of big international businesses.

The measures to simplify and reduce national insurance for small businesspeople and the self-employed are enormously welcome, and not just because of the money that they put in people’s pockets—it is important for us to remember that point. We heard some scoffing and comments of “big deal” from the Opposition when the reductions in class 2 national insurance contributions were mentioned, but the reductions represent about a quarter of what most households in the UK spend on Christmas, or a significant contribution to a child’s school uniform, a summer holiday or maintaining the car. All of those things make a small difference individually and a big one collectively. They send a message to our lower-income but entrepreneurial people that we are a Government who are on their side and keen to get off their backs.

I will finish with two suggestions. The first—to develop again a point made by my hon. Friend the Member for West Worcestershire—is to tackle some of the cliff edges in our tax system. The abolition of the lifetime allowance charge is one example of that. It is clear that around the £100,000 income level—that is a significant sum of money, but one typically earned by many of the public sector professionals on whom services such as the NHS, GP practices and schools depend—many of the benefits of extra earnings begin to be withdrawn. The situation in which two earners on £99,000 a year, with a joint income of £198,000, can continue to enjoy the benefits of tax-free childcare, but if one earner goes to £100,001 a year, those benefits are completely withdrawn, creates a significant marginal tax rate for professionals with children.

I have heard from a number of constituents who work in public sector bodies, particularly the NHS, that they have had to scale back their hours or decline to take on additional waiting list initiative work funded by the Government because the impact of that cliff edge is so financially significant for them. Of course, we see the same impact at that point from the pensions taper. I suggest to my Front-Bench colleagues that, as we think about the public sector productivity strategy, we need to consider how to take out some of those cliff edges so that the people we are asking to work and contribute more, and who are in a position to make a transformational difference to some of our public services, have good financial incentives to do so.

Finally, the OBR has been mentioned a few times in the debate. There is a degree of controversy about whether it is the correct body to provide a view about the sound financial management of our national finances. Having spent a lot of time in the local government sector, it is striking to me that it is a legal requirement for councillors making decisions in any of our local authorities to have before them the financial and legal implications of the decision, whereas in this House we usually decide on policies in a crowded debate with a big row about what we should do and then, sometimes months later, have a scantily attended debate at which the financial implications of the policy are debated and agreed. We do not take the financial implications and the policy decision together. I suggest that Ministers should consider whether, in order to emphasise the sound financial management approach of a Conservative Government, in addition to statements such as those about compliance with the requirements of the European convention on human rights, we should seek to ensure that every Government policy and paper on which this House makes a decision states what the financial implications of that decision might be.

Coming back to the point about VAT on school fees, I will make a forecast: should there be a change of Government, we will find ourselves back in the position that we were in under Gordon Brown. The announcement will be, “We want to spend the extra £1.7 billion that we have assumed, but we can’t actually raise that in taxes because the policy doesn’t work in practice, so we’ll borrow it,” and the £28 billion will become £29.7 billion. In addition, the non-dom money will not be forthcoming, so the Government will say, “We’ll assume how much that might be when we get around to tackling that and add that on to the borrowing as well.” That is the reason why under Gordon Brown we spent something like 10% more in every year than we raised in tax revenue. As a measure to prevent future Governments from running our finances into the ground again, let us make sure that we have that clarity of financial rigour in the decision making of Parliament, so that when Members cast our vote, we all understand the implications for taxpayers of the policies on which we are making decisions.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Tulip Siddiq to begin the wind-ups.

National Insurance Contributions (Reduction in Rates) Bill

David Simmonds Excerpts

2nd reading
Thursday 30th November 2023 Commons Chamber

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to speak, very briefly, in this debate.

My starting point is the concern I felt, when I listened to my right hon. Friend the Chancellor of the Exchequer making his autumn statement and highlighting this aspect of the measures he was taking, to hear cries of “not much” and “big deal” from some on the Opposition Benches. It is important to reflect that even if we were looking solely at the class 2 national insurance contributions element, the amount that adds to a household income equates to more than the cost of a child’s school uniform for a year. It is a quarter of what the average household in the UK spends on Christmas. These are significant amounts of money for a good many of our constituents. Indeed, for one of my constituents who is affected by the ultra low emission zone policy, it would even pay their ULEZ charge for a fortnight. Taken in concert with the rest of the measures, it will make a significant difference to many household budgets and ensure that people have more money in their pocket in the new year.

I represent a constituency that, according to the ONS, is very much a constituency of workers. We enjoy a very high level of employment and self-employment, a very low level of unemployment and, I am very pleased to say, higher household income on average than the rest of the UK. But within that, there are many, many workers—those who are beginning their careers, or who have faced unstable employment—for whom this will make a real and practical difference. For that reason alone, I enormously welcome the measures we will be voting on today.

I would like to offer the Chief Secretary and the Treasury team an issue for consideration, which arises out of something I see in my constituency. It has been the subject of a lot of debate in this House in the last week or so. In 2019, the Conservatives stood on a manifesto that set a target of an additional 600,000 foreign students coming into the UK. That manifesto commitment has been achieved. We know that it earns us, in foreign currency income, around £35 billion a year. It is a bigger earner for the United Kingdom than our oil and gas industry, so it is incredibly important to our economy. Part of the thinking behind it was that many of those workers would become longer-term residents of the UK, especially in areas of great need: our national health service, caring professions and the technology industry. I hear from a good many constituents about the challenges they still face recruiting those workers to ensure that my constituents who need an operation can get it on time and that businesses can grow.

Home Office figures show that a very large proportion of those people leave the United Kingdom at the conclusion of their studies, but that some stay. Concern has been expressed about whether those who transition into work after being foreign students or those who are here for a brief period on a working visa and subsequently move abroad pay a sufficient amount into the UK economy to cover the costs of the benefits they may well receive. Right hon. and hon. Members have highlighted those who come to the UK under care worker visas, but who bring with them dependants who have significant health and educational costs. Would the Treasury team, in due course, give consideration to setting a differential rate of national insurance contributions for those who come to the UK on those types of visa, in line with the measures already taken of charging those applying for those visas a significantly higher fee and the national health surcharge? It would then become absolutely clear to everyone in this country that people who are here for a short period will pay a contribution that reflects the potential benefits available to them, whereas those who are lifelong citizens, for whom those costs will be spread out across their entire working life, will enjoy the benefit of a lower rate?

Every country in the developed world has faced a similar set of challenges around interest rates and costs of living. We all know what the reasons are: the impact of covid and the impact of rising US interest rates, which set basic interest rates and mortgage rates across the whole of the developed world. However, as my hon. Friend the Member for West Worcestershire (Harriett Baldwin) said, the turning point has clearly been reached. Most of us can see and feel in our constituencies the signs of a return to growth and a sense of prosperity. The fact that wages are now rising ahead of inflation is hugely significant to the living standards of all people, but especially to those on lower incomes the measures I am here to support today are incredibly important. I commend the Treasury team for bringing them forward.

Oral Answers to Questions

David Simmonds Excerpts

Tuesday 14th November 2023 Commons Chamber

[Jeremy Hunt]

Unfortunately, nothing is free from the Labour party. Funding plans by increasing borrowing by £28 billion a year leads to higher bills for families, higher energy prices and higher mortgages.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

11. What steps his Department is taking to encourage pension schemes to invest in the UK.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

13. What steps his Department is taking to encourage pension schemes to invest in the UK.

--- Later in debate ---

[The Chancellor of the Exchequer (Jeremy Hunt)]

In my speech at Mansion House in July, I announced reforms to boost pensions, increase investment in UK businesses, and improve UK capital market competitiveness. Those reforms could result in over £1,000 a year of additional retirement income and unlock £75 billion-worth of investment in high-growth businesses.

[David Simmonds]

Many local authorities have given the investment managers for their pension funds a mandate to invest in infrastructure. What plans does my right hon. Friend have to encourage greater infrastructure investment by UK public sector pension funds?

[Jeremy Hunt]

I thank my hon. Friend for his interest in this issue—of course, he has great experience of local government. Working with the former Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), who I see is in the Chamber, we announced major reforms in July to help local government pension funds lead the way in the transformation we are looking for, in particular by sending a direction that they should invest in pools worth more than £50 billion. That will make it easier for them to have the expertise necessary to invest in infrastructure.

Mortgage Charter

David Simmonds Excerpts

Monday 26th June 2023 Commons Chamber

[Jeremy Hunt]

I have a lot of respect for the hon. Lady, but she is being a little churlish about what the Government have done. I have not waited; I called in the banks and the lenders on Friday, and I got them to commit to a set of terms that will make life easier for 85% of families with mortgages if their mortgage comes up for renewal. On the Government’s target to halve inflation, both the Bank of England and the International Monetary Fund have said that we are on track.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I have never forgotten the anxiety caused to my parents in the late 1980s, after they bought their current home and interest rates soared. Does my right hon. Friend agree that the package of measures that he has announced will help enormously to alleviate the anxiety that many households are feeling, without allowing rampant inflation to put my constituents’ dreams of home ownership even further out of reach?

[Jeremy Hunt]

I thank my hon. Friend for a thoughtful question. The measures agreed by the banks and principal lenders on Friday will make a big difference, particularly for people who are genuinely in arrears, who now know that their house will not be forcibly repossessed for 12 months. That is an important reassurance, and gives people longer to get their finances in order. It also encourages people who are worried about the impact on their credit score that the simple fact of having a conversation if they are in distress will not have any impact on it. For people in a similar situation to his parents, this is an important set of measures.

Oral Answers to Questions

David Simmonds Excerpts

Tuesday 9th May 2023 Commons Chamber

[Alexander Stafford (Rother Valley) (Con)]

7. What steps he is taking to support financially people on lower incomes.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

15. What steps he is taking to support financially people on lower incomes.

[The Chief Secretary to the Treasury (John Glen)]

The Government are taking action to protect struggling families by providing support, worth £3,300 per household on average over this year and last, to help with higher bills. That includes targeted support for the most vulnerable in our society through additional cost of living payments and the uprating of benefits by 10.1% this year. The Government have also increased the national living wage by 9.7%, representing an increase of more than £1,600 in the annual earnings of a full-time worker on the national living wage.

[John Glen]

I absolutely agree. The Government are doing three things to reduce inflation: we are remaining steadfast in supporting the independent Monetary Policy Committee at the Bank of England as it continues to take action to return inflation to target; we are making responsible decisions on tax and spending, so that we are not adding fuel to the fire; and we are tackling high energy prices by holding down energy bills for households and businesses, alongside investing in long-term energy security.

[David Simmonds]

Lowest-income households in my constituency are the biggest beneficiaries of a strong economy. Does my right hon. Friend agree that reducing debt, reducing inflation and balancing the books are the most effective Government interventions to support low-income households?

[John Glen]

Absolutely. It is right that we continue support for the cost of living challenges. I have mentioned the energy price guarantee; we are also sticking to that plan to avoid unnecessary inflationary pressure. [Interruption.] On average this year, as a result of Government decisions made from—[Interruption.]

Oral Answers to Questions

David Simmonds Excerpts

Tuesday 21st March 2023 Commons Chamber

[Jeremy Hunt]

Let me remind the hon. Gentleman what we have done for people on low incomes. Because of the increase in the income tax and national insurance thresholds which was completed last year, those on the average wage of £28,000 pay £1,000 less in tax and national insurance than they would have paid at 2010 levels—that is a tax cut that his party opposed at each and every stage.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

2. Whether his Department has made an assessment of the economic impact of ultra low emission zones.

[The Chief Secretary to the Treasury (John Glen)]

Responsibility for transport and air quality within Greater London is devolved to the Mayor of London and Transport for London via the Greater London Authority Act 1999. It is for the Mayor to assess the economic impact of the proposed expansion of the ULEZ, and to consult properly to ensure that it is not just a tax on the poorest motorists.

[David Simmonds]

Small business owners and elderly and disabled residents affected by the ULEZ in my constituency are concerned about the fact that the Mayor’s process has not been as independent or robust as it should be. Will my right hon. Friend consider commissioning the Treasury’s own independent assessment of the impact of the ULEZ, so that my constituents and local business owners can really understand how it will affect them?

[John Glen]

As the Prime Minister said just last week,

“the Mayor of London should listen to the voices of commuters, families”—

including many of my hon. Friend’s constituents—

“and small businesses as he inflicts his…tax on them.”—[Official Report, 15 March 2023; Vol. 729, c. 832.]

As the House has just heard, our Budget last week supported hard-pressed motorists by cancelling the planned increase of about 11p in fuel duty, saving drivers about £5 billion this year.

Financial Services and Markets Bill

David Simmonds Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Bim Afolami]

With your indulgence, Madam Deputy Speaker, I would like to start, before getting into the meat of this, by paying tribute to a Labour councillor in Hitchin who recently and suddenly passed away in my constituency. Judi Billing had served as a district councillor since 1980 and was an excellent servant, and I wanted to make that point on the Floor of the House.

I rise in particular to support new clause 17. As we all know, this is really an enabling Bill and a lot of its meat will come in regulations that will be passed in the coming weeks and months. In the short time available to me, I think it is important to stand up for the regulators, because someone has to in this debate. I want to stand up for them not because I have agreed with every decision of the Prudential Regulation Authority, the Financial Conduct Authority, the Payment Systems Regulator or anyone else, but because a lot of the right criticisms that I and many other colleagues have had of the regulators arise more as a function of the system in which they operate than as a result of the decisions made by those individual regulators or institutions.

There is a key point about accountability, which many colleagues on both sides of the House have already raised: there needs to be strengthened accountability to this House. I have made the point many times before, but I urge those on the Treasury Bench, His Majesty’s Treasury and Parliament to look at this more deeply. Unless we can strengthen the accountability to this House and the other place of the regulators directly, we will continue to run up against criticisms that they are not taking colleagues’ considerations into account.

There is also a need for more effective accountability to the Government. What I mean by that is that the Government have clearly set out, in a series of actions, policy statements, speeches and strategies over the past few months, and in numerous reviews, what their intentions are. Those have been supported when it has come to votes on the Floor of this House, but sometimes there is a gap between the intention of the Government and what ends up coming through, even when regulations are passed to that end. It is important that the regulators and the Government work together to find a system whereby the Government can ensure that their strategic aims are being supported on an ongoing basis by the regulators. This is not just about saying what the policy is, passing regulations and allowing the regulators to get on with it. However well they try to do that, a lot will get missed, so we need to think about that.

We need to rethink the entirety of our regulatory structure, particularly as to how it governs financial services. We have very powerful regulators that have taken on a huge amount of power from the European Union, and they are doing their best. There are some overlaps between them and there are times when certain aims of one conflict with the aims of the other, even in relation to the competitiveness objective that has come up many times in the passage of this Bill. We end up with the situation where the regulators have to balance off competitiveness and other secondary objectives, and indeed the primary objectives. We have to work out how we are going to put together a framework that enables better accountability to this House, and better accountability to the political aims that have been passed by this House and to the aims of the Government, so that we get a regulatory system that drives a better, more competitive, safer financial services system.

To that end I have set up the Regulatory Reform Group, of which some Members of this House and others outside are a part. I intend to work with the Government on this issue, because unless we get it right, all the best intentions that all colleagues have in different areas will find it hard to be effected because of the structural difficulties that are inherent. So I would like to stick up for the regulators but say that they need to be able to operate in a more effective system.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I am delighted to be able to speak in support of the Government this evening, because this Bill is of great importance to my constituents, many of whom work in our financial sector, and also to the capital city, of which my constituency is a part.

Since I contributed to the earlier stages of the Bill, I have had the opportunity to hear from UK Finance, Zurich, Lloyds, the London Chamber of Commerce and Industry, the Property Institute and Just Group and many others, and they have reflected back to me the broad and strong support of the financial sector, which is the jewel in our industrial crown, for the measures that the Bill envisages. The key thing from the perspective of my constituents is that the Bill seeks to right-size regulation in the United Kingdom to reflect the fact that the risks and the challenges that the sector faces change over time. Just as we need to manage the risk from competitors, through the measures on competitiveness, we also need to ensure that we have a financial sector that enables all of our citizens to access the broadest possible range of financial services.

I have listened carefully to the points made about financial inclusion, for example, which are very important in the context of our financial sector. We need to ensure—and I think this Bill does—an appropriate balance between products that are pricing in a degree of risk, but that enable people to build their creditworthiness and their participation in the benefits that the financial sector can bring in their lives, with a recognition that there are risks to constituents, in particular from the development of new products, which the Bill seeks to address through better regulation in areas such as crypto investments.

Briefly, on new clause 27, although I have sympathy with the points that have been made by a number of Members, this strikes me as an example of where there is a significant risk of unintended consequences. As Ministers have heard, there is a need for due process for those who feel that they have been wronged by the decisions of a provider to be able to seek a remedy for that, but we do not want to get into the kind of situation that we have seen in the past, where an obligation to provide a universal service sees significant numbers of providers—useful providers—exiting the market because they are not prepared to accept the risks that come with that. My view is that the Government are finding about the right balance.

Let me turn now to the issues around the Financial Conduct Authority and the regulators. There will be a new chair of the FCA from 21 February next year. I wish to bring to the attention of the House and of Ministers that the strong view of my constituents and many in the sector is that we need to see a greater degree of rigour in the enforcement action that the FCA in particular is able to take. It is a matter not of new powers, but of making sure that they are operating effectively.

In respect of access to cash, I would like to thank Ministers. Certainly, in my constituency, we have seen really significant efforts by financial institutions to ensure that every high street has at least one free-to-use cashpoint, and, thus far, the feedback from business owners is very good.

In conclusion, I strongly support the Government’s position. I am not afraid to say if I think things are going wrong, but, in this case, it is clear to me that the Bill is beneficial to my constituents as business owners, as employees in the sector, and as consumers of the sector’s product, and it is beneficial to the taxpayers of the United Kingdom.

[Anna Firth (Southend West) (Con)]

I rise in support of new clause 17. The Bill is central to the Government’s commitment to long-term economic sustainability while also ensuring that our banking system is fair and provides reasonable protections for the vulnerable, including continued access to cash. Now that we are outside the EU, it is vital that we take this opportunity to build an even more agile and an even more muscular internationally facing financial centre. To do that, we need regulation that is designed to unlock growth, that will attract international investment into the UK, and that will also attract the best talent into our financial services sector, while not forgetting our equally important duty to level up financial services across the UK, including continued access to cash, to which I wish to turn straight away.

I welcome the wording of the Bill about providing “reasonable” access to cash. I appreciate that the Government have a balancing act to perform, given a fast-moving sector, changing consumer patterns and the need to provide protections. It is a balance that the Government have provided with this “reasonable” access to cash.

I wish to place on record that in picturesque Leigh-on-Sea, a part of wonderful Southend West, we have lost every single one of our high street banks over the past four years. In a constituency such as Southend West, where over one fifth of the population are over 65 and more than 6% are over 80—significantly more than the national average—local banking services are vital. Senior citizens in Southend West do not want to bank online, they do not want to bank on an app, and they should not have to. That is why I am working with fantastic organisations such as LINK and OneBanx to set up a local banking hub.

--- Later in debate ---

We have heard a lot about fraud, on which the hon. Lady has tabled an amendment. I reassure hon. Members that the Government take that important issue extremely seriously. We are dedicated to protecting the public from that devastating and sadly growing crime. Tackling fraud requires a unified and co-ordinated approach across Government, law enforcement and the private sector to better protect the public and businesses from fraud. We want to reduce the impact of fraud as well as its prevalence, and increase the disruption and prosecution of fraudsters. We will put the right resources into frontline policing to ensure that they can do that.

[David Simmonds]

I recently heard from my local borough police commander that a major priority in the recruitment of new officers to the Metropolitan police is finding people not to go out on the beat but to do the detailed back-office work of tracking down fraudsters and scammers, and that the Met had enjoyed considerable success. Does the Minister agree that should be a high priority for the Home Office and police forces across the country?