Draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2024

Ian Lavery Excerpts

Monday 29th January 2024 General Committees

[The Economic Secretary to the Treasury (Bim Afolami)]

I beg to move,

That the Cttee has considered the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2024.

This instrument makes an update to financial services legislation to make operating a pension dashboard service a Financial Conduct Authority-regulated activity. Let me begin by saying that the Government have long held the ambition of delivering pension dashboard services to the public. It is very important that individuals can easily access and view data about their pension savings in one place and at their convenience. Executed well, pension dashboards can deliver significant benefits to consumers, providing better access to information about their pensions held in different schemes. These days, people often have many different schemes.

The instrument will bring a step change in how people engage with their pension savings and will finally allow people to have a full picture of those savings. Equipped with that information, individuals will be better able to plan for their retirement, seek financial advice and guidance, find lost pension pots and make informed decisions. The Government are supporting the development of the digital architecture needed to make pension dashboards a reality, as well as facilitating the development of a Government-backed pension dash-board by the Money and Pensions Service. We have also supported the development of multiple private sector pension dashboards. Different individuals will have different needs, and this will ensure that a wider range of platforms exist to suit such needs.

However, we are clear that this multiplicity of providers can only take place with a suitable and robust regulatory framework, recognising that consumers using pension dashboards could be vulnerable to unfair potential harms. During the passage of the Pension Schemes Act 2021, the Government committed to bringing the operation of a pension dashboard service within FCA regulation. This order amends the regulatory perimeter to make operating a pension dashboard service that connects to the Money and Pensions Service’s digital architecture a regulated activity. Once in force, it will mean that anybody choosing to operate a pension dashboard will need to be authorised and regulated by the FCA.

[Ian Lavery (Wansbeck) (Lab)]

This new legislation refers to a lot of personal data about individuals’ pensions, and the Government have suggested that commercial bodies will also be involved. Can the Minister give guarantees about the protection of the data of individuals concerned?

Inheritance Tax

Ian Lavery Excerpts

Wednesday 17th January 2024 Westminster Hall

[Ian Lavery (Wansbeck) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Robert. I thank my hon. Friend the Member for Hemsworth (Jon Trickett) for bringing this debate to this Chamber; it has been interesting to listen to the contributions that have been made. My hon. Friend the Member for Easington (Grahame Morris) gave some alarming statistics about widening inequalities. He spoke about the entrenched wealth and privilege that is rampant in this country.

I am not surprised that, at this stage in this Conservative Government, the Tories are looking to halve or abolish inheritance tax. Is it a pre-election giveaway? Is it red meat for the blue wall areas? Is it red meat for the rich? I think so, I really do. The impact of halving or getting rid of inheritance tax will fall upon only one section of society, and that is the less well-off. The richest people are where this policy is focused. The richest people in society will benefit from the abolition of inheritance tax.

As my hon. Friend the Member for Hemsworth said, if we get rid of inheritance tax, we are talking about a loss to the Treasury of £7 billion. What could any MP in this debate do with £7 billion in their constituency? How many hospitals could we build nationally for £7 billion? Forget about repairing schools; how many could we build with £7 billion? How many youth clubs could be built with £7 billion? It could be used to look after ordinary people, in ordinary communities. Seven billion pounds—it is a lot of money to lose.

Inheritance tax has a long history. Contrary to what many people believe, it is not a modern tax created by crazy lefties. The first tax on the administration of a deceased person’s estate was the probate duty imposed by the Stamp Act of 1664. The roots of the modern version of inheritance tax can be traced to the estate duty created by Chancellor William Harcourt’s Budget of 1894. There has long been an acceptance that, when the wealthiest in our society die, the transfer of their wealth should not benefit only their heirs—as has already been said, they have done nothing at all to earn that wealth. Part of that wealth should also benefit communities and the country as a whole.

Inheritance tax is paid on estates worth more than £325,000. I think each speaker has mentioned this—forgive me for repeating it, but it is important—but if the main residence of the deceased is left to a descendant child, the value of that home is not included in the value of the estate and, when the entire estate is left to a spouse, no inheritance tax is paid.

Very few people pay this tax. In the tax year 2022-23, 3.73% of estates paid inheritance tax—3.73%—and only 1.9% of those estates that had to pay inheritance tax were in the north-east of England.

[Jon Trickett]

Out of the 29 constituencies in the north-east of England, only three paid a penny of inheritance tax in that last tax year. Does my hon. Friend think that cutting inheritance tax will put massive amounts of additional resources into his region?

[Ian Lavery]

I will come on to that, but as ever, my hon. Friend makes an extremely important point.

After Northern Ireland, the north-east of England pays the least, but have a guess where 42% of the estates that attract inheritance tax are located—have a guess, Sir Robert. They are here in London and the south-east —the blue areas. [Interruption.] I am sorry; if the hon. Member for Broadland (Jerome Mayhew) wants to intervene, I am happy to accept an intervention. Does he want to intervene?

[Jerome Mayhew]

indicated dissent.

[Ian Lavery]

He is chuntering away, so I just wondered whether he wanted to come in.

It is amazing how inheritance tax can be avoided. The biggest exemption, of course, is the nil rate on leaving everything to a spouse. Other exemptions include transfers to qualifying charities or registered clubs, and lifetime gifts given within seven years before death—this one is interesting: wealthy grandparents use it as tax relief on paying their grandchildren’s private school fees. Another exemption is business property relief, which allows no inheritance to be paid on the transfer on death of shares in a business that is not quoted on the stock exchange. Many of those shares are in valuable family firms. Agricultural land also often passes tax-free. Debts owed by the deceased can be deducted from the tax bill.

[Peter Gibson]

Will the hon. Gentleman give way?

[Ian Lavery]

I will in a minute.

This one is absolutely unreal: the largest landowner in Northumberland donated a painting in lieu of tax. In 2015, the largest landowner in Northumberland avoided a £2.8 million inheritance tax bill by leaving a Van Dyck to the Bowes Museum. In that family’s property—it is not a terraced house, you know—they now have one less picture hanging on the wall for his heirs, but there is also almost £3 million less that could have gone to help poorer families in my constituency. I divvent care what anybody thinks; that’s not fair, man. It is not fair at all.

It is unreal to think that the wealthiest can avoid inheritance tax by giving a painting instead. How many people who have personal tax issues can say, “Look, if I give you a book, is that all right?” Of course it is not all right, man. It is one rule for the rich and another for ordinary working people who work hard and pay their taxes.

[Peter Gibson]

I am grateful to the hon. Gentleman for giving way. I particularly wanted to intervene when he was talking about business and agricultural property relief. Does he agree that the survival of many farms and family businesses relies on the fact that they are not taxed at the point of death?

[Ian Lavery]

I would not dispute that that is the case.

But let me get back to the political issue. This is pure politics. It is simple: it is about red meat. The Conservatives, through the press, support the myth that abolishing inheritance tax will somehow have an impact on ordinary people in communities because some people have their own houses. I have already explained that very few working-class people in communities right across the country will actually be impacted if we continue with this. Leaving properties to children, especially in areas with high property values such as London, makes a huge difference.

This will benefit wealthy people in electorally vulnerable blue wall seats. Seventy-five per cent of the top 60 seats in which inheritance tax has been paid are held by Conservative MPs, mostly here in the south. It will help the families of the wealthy Conservatives, such as the Prime Minister. That is why I oppose this measure. Inheritance tax is a means of lessening inequalities and mitigates against gross amounts of unearned wealth going to the children of the wealthy—children who did absolutely nothing to create that wealth. Most of the money saved from cutting or abolishing the tax will go to benefit wealthy areas in the south. It will do nothing to help people in Wansbeck, Hemsworth, Easington or Coventry —nothing at all. There would be less money for their health, less money for their education and less investment in the infrastructure that all the areas I have mentioned badly need. Our social mobility statistics in Wansbeck are some of the lowest in England, but instead of doing something to increase my constituents’ life prospects, the Conservatives are spending their time planning on how to give more money to the already wealthy.

The few very rich families in Northumberland, with all their large agricultural assets, pay less inheritance tax than they should now, while thousands are still using food banks and claiming benefits just to survive. Instead of cutting or abolishing inheritance tax, the rate should be increased and the exemptions eliminated to help to alleviate the current obscene gap between the rich and the poor. Public services are in tatters and councils are going bust left, right and centre. Taxing those who can afford it most is one means of alleviating the horrendous damage that this Government are doing to the social fabric of communities like mine up and down the UK.

Oral Answers to Questions

Ian Lavery Excerpts

Tuesday 5th September 2023 Commons Chamber

[Jeremy Hunt]

It is very simply this: since 2010, we have become the strongest economy in Europe in film and television, life sciences and technology, and the opportunities are great with a Conservative Government.

[Ian Lavery (Wansbeck) (Lab)]

T3. This week, schools have failed to reopen due to the threat of collapse. Worryingly, the danger does not end there, because 95% of schools and public buildings are estimated to contain asbestos, which is described by Mesothelioma UK as a “silent killer”. Will the Chancellor stop ignoring his own Department and commit to providing the necessary funding so that our children can be prevented from being taught in crumbling, asbestos-ridden deathtraps?

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

I do not accept that characterisation at all. I do understand the impact of mesothelioma, as my father died of it, but this Government have invested £15 billion to keep schools safe since 2015, and the Chancellor has set out other figures as well.

Oral Answers to Questions

Ian Lavery Excerpts

Tuesday 20th June 2023 Commons Chamber

[Jeremy Hunt]

My right hon. Friend is absolutely right; the answer to inflation is to tackle it, not to make it worse.

[Ian Lavery (Wansbeck) (Lab)]

T4. Real-terms wages are lower now than they were in 2008, which is a disgrace. The north-east has been hit harder than other regions, worst of all on child poverty. The rates of child poverty have shot up, with the result that we have 67% of children in working families living in poverty. Is the Chancellor’s deliberate, brutal policy of wage suppression working? If so, who for?

[Jeremy Hunt]

We understand the pressures that families are going through up and down the country, but we have responded with generous support this year and last of more than £3,000 for the average household. Not only that, but since 2010 the number of children in absolute poverty has fallen by 400,000.

Corporate Profit and Inflation

Ian Lavery Excerpts

Tuesday 16th May 2023 Westminster Hall

[Richard Burgon]

That is absolutely right. It is scandalous when workers are not fairly paid, the public are being ripped off, and all this profiteering is causing the price crisis that we see. It is not for nothing that people call it greedflation.

On price caps, for all its obvious flaws in not being set low enough, the Government’s energy price guarantee, which was introduced last year, was an important break with the idea that the Government cannot interfere in market pricing to protect people. Surely such price caps should be extended to other sectors. It is very welcome that London Mayor Sadiq Khan has called for powers to allow him to impose private rent controls in London. Other countries do this, so why can we not do so here? On soaring food prices, the French Government have secured a deal with some of the country’s major retailers to place a price cap on staple foods to ease the pressure of inflation on consumers. Why not here?

[Ian Lavery (Wansbeck) (Lab)]

Is it not absolutely perverse that in the fifth richest economy in the world we are seeing, on the one hand, supermarkets and retailers making billions and billions of pounds and, on the other, parents criminalising themselves by stealing baby formula because they cannot afford to feed their newborns? What on earth has gone wrong in this country?

Cost of Living Increases

Ian Lavery Excerpts

Tuesday 25th April 2023 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

It does not matter how loud Government Members shout and scream, “Crisis, what crisis?”. It does not matter how many times they repeat themselves. This crisis is devastating our communities. It is killing people in our communities. Believe me: the records are there to prove it.

I am not sure whether people have seen the latest television advertisement from Age UK. A lady is sitting in her house. It is so cold that you can see her breath. She is on the phone saying, “I am really worried because I cannot afford to put the heating on. What am I going to do?”. What have we become in this country? What have we become, when that sort of thing is being broadcast on television?

There is poverty in every one of our constituencies. Families sitting around the table of a night-time—people who are working their socks off, working all sorts of hours—are not talking about GDP, RPI, CPI, the G7 or predictions about the financial situation. They are saying, “How can we afford to put the heating on? How can we afford to eat properly? How can I afford to put shoes on the bairns? How can I afford to give them the right sort of clothing for school?”. That is what people are talking about. Government Members can shout, “Crisis, what crisis?”, as loud as they want, but it is alive and kicking in our communities. The police have informed me that theft in my constituency is on the increase, but people are not stealing the normal types of goods; they are stealing to survive. A local GP demanded to see me to tell me that I needed to see how bad some of the conditions are that people have been pushed into because of the Government’s policies. It is frightening, it really is.

Food banks are a Tory invention, of course, but I must say a big thank you to the food banks in my area—Wansbeck Valley, Bedlington, Real Deal and the Biggin Box. Everyone working in them deserves great credit. However, the food banks are drying up; the people who used to donate now want to use food banks themselves. This simply cannot go on.

Child poverty is a huge issue for me. In my constituency, it has gone up by 9.5% in five years, to 35.2%. The fact that there are empty bellies and poorly shod children in this country is an absolute disgrace. We are one of the richest countries in the world; let us use it wisely.

The Growth Plan

Ian Lavery Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

The hon. Lady is absolutely right to identify childcare as a crucial issue, and I am looking forward to my right hon. Friend the Secretary of State for Education updating the House on that in the next few weeks.

[Ian Lavery (Wansbeck) (Lab)]

Within seconds, the Chancellor’s financial statement declared war on the trade unions and on those less well-off in society—those on universal credit—and at the same time scrapped the cap on bankers’ bonuses. That is ideology unfettered. Will he say who will benefit most from the huge financial intervention today? Will it be someone on a salary similar to his or will it be a two-parent family with two kids in my constituency who are having to claim UC to top up their income?

[Kwasi Kwarteng]

The energy intervention will help all the hon. Gentleman’s constituents deal with higher energy costs this winter and the reduction in the basic rate, which we have pulled forward one year, will also help people, to the tune of £330 a year. That covers a broad swathe of our countrymen and women.

New Wealth Taxes

Ian Lavery Excerpts

Tuesday 14th June 2022 Westminster Hall

[Ian Lavery (Wansbeck) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. Congratulations to my hon. Friend the Member for Leeds East (Richard Burgon) on bringing this very timely debate to the Chamber.

I am possibly naive, but I really believe that there is good in everybody—I really believe that. But I see the inequalities and disparities in the way in which this very, very wealthy nation distributes its finance, and it is having an impact on me. I am worried. And I am thinking about how politically naive I actually am, because I honestly believe that most people in the House of Commons, most elected representatives, want to do what is right for the people in this country, but that is not happening.

The economic model is rigged—it is grotesque. The inequalities, the disparities, are there to be seen. We did not need reports; we do not need professors’ reports or experts’ reports. MPs can see this in their constituencies. They can see it on their streets. They can see it in the housing stock. Why are bankers’ bonuses 28% higher and rising six times faster than the wages of an average worker? As my right hon. Friend the Member for Hayes and Harlington (John McDonnell) said, £6 billion was paid out in March. This is at a time when we have people—just go outside the doors of the Commons to see this—lying on the streets. They cannot afford food and are struggling merely to exist. It is grotesque. I resent anybody who would support such a system. Why do we have such imbalance? Why do we have these billionaires who could never spend the money that they have amassed if they lived for four or five centuries? At the same time, we have children in poverty. We have 2.6 million children skipping meals; we have their parents skipping meals, because the family income is not enough. Yet the number of billionaires increase—they increase and increase—at the same time as people cannot switch the electricity on in their homes. What needs to be expressed in such simple terms that it cannot be misunderstood by people in this House? While the rich get obscenely richer—this is not rhetoric; it is fact—we are seeing people at the lower end of the income scale suffering so much.

We live in a very proud nation. I am very patriotic, but being patriotic does not mean to say that we wave the Union Jack flag and sing the national anthem. I think that being patriotic means looking after the people in our country and ensuring that they have the basic human rights in life—that they can keep themselves clean, have a roof over their heads, have enough to eat, and have a decent income to have a decent lifestyle. That definitely is not the case now. That cannot be argued against here. It cannot be argued against, because the facts and figures have been put before us in this debate by the speakers. We still have 2 million people using food banks. We still have families claiming benefits. We have families having to use food banks and people in work claiming benefits and using food banks. It is totally unacceptable in a democracy—in a nation such as the one we are very proud to represent—that these grotesque inequalities continue to occur. They cannot continue; let us show some humanity.

--- Later in debate ---

[Lucy Frazer]

The hon. Gentleman makes an important point. This matter needs international action, and he will know that international action is being taken. More than 130 countries signed up to a new international corporate tax framework in October 2021. That will help to ensure that multinational businesses pay their fair share, with the right companies paying the right amount of tax in the right place.

The hon. Member for Leeds East talked about capital gains tax. We recognise the importance of preserving the incentive for individuals to invest in this country and grow the economy, when they can choose to spend money in any jurisdiction. Having said that, we also recognise the importance of ensuring that a fair amount of tax is paid from assets through capital gains tax.

We have made a number of steps to reform both the dividend tax and the CGT regimes. For example, in 2016, the Government reformed the old, complex system of dividend taxation, simplifying it at the same time as increasing effective rates. In 2018, we reduced the tax-free dividend allowance from £5,000 to £2,000 per annum. In 2020, the Chancellor cut the lifetime limit of CGT entrepreneurs’ relief from £10 million to £1 million.

I would like to touch on the context in which this debate is taking place and the cost of living pressure on families, because those issues are important, as was recognised by many Members, including the hon. Member for Leeds East, the right hon. Member for Hayes and Harlington (John McDonnell) and the hon. Members for Strangford (Jim Shannon) and for Cynon Valley (Beth Winter). The hon. Member for Wansbeck (Ian Lavery) made a passionate speech, recognising the need to look after other people. That is exactly what the Government are trying to do, within the constraints and the global economic position we are in.

We are trying to support other people through our recent announcement of a £37 billion support package. We want to ensure that those who cannot work get support. We are taking a number of measures through the restart and kickstart schemes to ensure that people get into work and can support themselves. We are then ensuring that they are paid properly in work, and hon. Members will know about the increase in the national living wage and our measures to cut taxes to ensure that those in the lowest income brackets get sufficient sums when in work. We are also upskilling people so that they can increase their pay.

[Ian Lavery]

Does the Minister agree with the hon. Member for Christchurch (Sir Christopher Chope), who suggested that very wealthy people and companies should only pay extra, if indeed they choose to do so, in the form of a donation?

[Lucy Frazer]

My hon. Friend the Member for Christchurch was right to identify that that option is available, if people choose to take it. The Government have set out our tax regime, and that option is available to those who wish to pay more tax.

I was touching on the cost of living, which is important. As many Members have said, this is not just about statistics; it is about people. To give an example, a single mother with two children who works full time on the national living wage will receive £2,500 a year in additional support because of the measures we have taken. On the subject of statistics, the right hon. Member for Hayes and Harlington did mention some, but our latest statistics show that in 2020-21 1.2 million fewer people were in absolute poverty than 10 years earlier, in 2009-10.

Tackling Short-term and Long-term Cost of Living Increases

Ian Lavery Excerpts

Tuesday 17th May 2022 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

The debate today has been really interesting. We have to realise that this is one of the richest countries on the planet and that we have got finances; it is about how we decide to distribute the wealth of this nation. If we cannot help the poorest and the people who are suffering greatly in this cost of living crisis, we are doing something sadly wrong.

As MPs, we are here to represent individuals in our constituencies. We should not need detailed reports, professors, experts or anyone else to tell us that poverty is rife in the communities and constituencies that we represent. As MPs, we should understand that—unless I am alone. I see it in my constituency. I see that people are malnourished. There are people, including kids, in this wonderful country of ours who are suffering from malnutrition. We have record levels of kids now with rickets. Howay—this is the UK, one of the richest countries on the planet. As has been said, we have people missing meals to feed their kids and 2.5 million people are now using food banks. For heaven’s sake!

I will tell you what is new in my constituency, Madam Deputy Speaker: there has been a rise in crime and shoplifting. People who are desperate to keep their kids clean are stealing sanitary products and soap powder. It is an absolute outrage—and it is not good enough to say that the support is there, mind. It is not good enough for the Government to abdicate their responsibility, say, “We’ve done this and that”, and talk about a £150 pay-as-you-go loan for electricity. They are abdicating their responsibility for the people who are most in need.

This fella Bernard Looney, the chief executive of one of the richest companies on the planet, has basically done everything but take barrowloads of money to the Treasury and tip it into the hall. He is saying he is happy to have a windfall tax. Can Members imagine what a difference that could make to the people we are talking about today?

By the way, it is no good telling me, “It’s okay—you can make a meal for 30p so you should be all right.” It is no good telling me that the way for people to get over the cost of living crisis is to find a new job somewhere, like the people who have been fired and rehired. It is no good telling me that people should be working two or three jobs so that things will be okay.

We have to start addressing the situation. The Tories—the Conservative Government—cannot continue to turn a blind eye. They cannot continue to walk by on the other side while people are suffering greatly. We need to level up and we need to be truthful. We need to level up with the truth and to be compassionate, honest and decent as politicians. We should be acting to support the millions out there who need absolutely every single ha’penny this Government can provide.

Oral Answers to Questions

Ian Lavery Excerpts

Tuesday 1st February 2022 Commons Chamber

[Kirsten Oswald (East Renfrewshire) (SNP)]

20. What recent assessment he has made of the effect of his fiscal policies on the cost of living.

[Ian Lavery (Wansbeck) (Lab)]

21. If he will offer further support to people struggling with the rise in the cost of living.

[The Chancellor of the Exchequer (Rishi Sunak)]

To help people with the cost of living, the Government are providing support worth around £12 billion in this financial year and next. That includes: cutting the universal credit taper rate to make sure that work pays; freezing duties to keep costs down; and providing support to households with the cost of essentials. In addition, the Government’s plan for jobs is helping people into work and giving them the skills they need to succeed—the best approach to managing the cost of living in the long term.

--- Later in debate ---

[Ian Lavery]

It is not good enough to simply say that work lifts people out of poverty when we know that millions of people up and down this country with one job, two jobs or three jobs are still not even making ends meet. The universal credit cut is having a devastating impact, combined with growing food prices and the rise in rents—not to mention the huge hike in national insurance contributions.

I know it is difficult, Chancellor, for someone with financial privilege to really understand what is facing people in communities like mine, but I must say that when I have got elderly people freezing in their homes and more people than ever before using food banks, we need some help from the Government. Poverty is a political choice.

[Rishi Sunak]

Anyone who has questions about my values can just look at my track record over the last year or two. I am proud of this Government’s achievements in supporting those who most needed our help at a time of anxiety for our country. I respectfully disagree wholeheartedly with the hon. Gentleman: I do believe that work is a route out of poverty. All the evidence shows that children who grow up in workless households are five times more likely to be in poverty than those who do not, which is why I am proud that there are almost a million fewer workless households today as a result of the actions of this Conservative Government.