Inheritance Tax

Jerome Mayhew Excerpts

Wednesday 17th January 2024 Westminster Hall

[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.

Cost of Living Increases

Jerome Mayhew Excerpts

Tuesday 25th April 2023 Commons Chamber

[Tulip Siddiq]

I thank my hon. Friend for her intervention. Having campaigned in her constituency, I know there are huge levels of poverty in certain places. Someone from the back said that we are lucky here because we are MPs and get paid a decent salary. We certainly should not be laughing at people who are struggling to make ends meet.

I remind the House that, when Labour was in government, real GDP growth averaged 2%. If growth had continued at the same rate under this Tory Government, we would have £40 billion more to spend on our public services, without having to raise a single tax. Instead, a lack of strategic policy making, economic uncertainty and the absence of an industrial strategy mean that the UK is going through the slowest economic recovery in the G7.

[Jerome Mayhew (Broadland) (Con)]

The hon. Lady is asserting that the UK economy has fallen behind since 2010. Does she recognise the figures that show that this country has actually grown faster than Italy, Japan and France since 2010 to date and that, since 2016—since the Brexit vote—it has grown at about the same pace as Germany?

[Tulip Siddiq]

The Conservatives can manipulate the stats as much as they want, but they cannot run away from the fact that we are falling behind our peers. [Laughter.] I do not care how much Conservative Members want to laugh; I know that is the truth. It is families who are bearing the brunt of the low growth. A decade of stagnant wages has left the British people highly exposed to rising prices. If the hon. Member who just intervened can dispute this figure, he is welcome to intervene again: the average French and German family are now 10% and 19% richer than their respective British counterparts. If we continue down this path of managed decline and our growth rate stays where it has been over the past decade, families in the UK will be poorer than those in Poland by 2030 and poorer than those in Hungary and Romania by 2040. I see the hon. Member—

[Jerome Mayhew]

rose—

[Tulip Siddiq]

Yes, please.

[Jerome Mayhew]

It is a great pleasure to be given the role of the Opposition spokesman from the Back Benches here, but there is a difference between economic data that is factual, has happened and can be verified, and straight-line projections of the future between now and 2030 that have not happened and will not happen.

[Tulip Siddiq]

As I figured, the hon. Member did not have a response to the question I asked. If we do not break with the Tories’ failed economic model, the necessary underpinnings of a good life—as I have mentioned, fair wages, secure work, a decent home—will be further eroded.

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[Jerome Mayhew (Broadland) (Con)]

The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) is right to feel empathy and sympathy and to feel angry for the people challenged by the cost of living, as everyone in this House does, whatever side they are on. Families are struggling right across the country and that is because of inflation, which steals money from everyone’s pockets. The best cure for all the issues we have all been discussing on either side of the House is to deal with inflation, yet in its 12-line motion on the cost of living, Labour has not made any mention at all of the Government’s intervention to reduce the level of household inflation. It is as though the Opposition are not aware of the £94 billion package that the Government have instituted over the last period. That is an average of £3,300 of Government support per household, which is having a direct impact on reducing the headline level of inflation. It includes halving people’s energy bills over this winter at an average of £1,500 of support per household. That has been extended to the summer, when prices are forecast to come down.

There is an enormous irony that we are having this Opposition day debate on the cost of living, on a motion with no mention of Government support, on the very day when £301 has landed in the bank accounts of the 8 million most-vulnerable families in the country through the household support fund. However, the motion does have some positive suggestions to make. It suggests we should freeze council tax. The best way for people to ensure that their council tax is frozen is to vote Conservative on 4 May. People should come and look at my council in Norfolk, Broadland District Council, which has frozen council tax not for one year, but for the past two years. If Labour councils were serious about helping people with the cost of living, they would run their councils just as efficiently as we do, and they would keep their council tax down and freeze it.

The other thing that the Opposition have done today is to have the first Opposition day debate on water infrastructure, yet in that debate, the effect of what they were arguing for with their so-called plan would have had the effect of increasing water bills by a full £1,000 a household. Is that joined-up opposition? I do not think so. What we have is the Conservatives giving £3,300 of support per household and freezing council taxes more often than not in Conservative-run districts such as my own, against Labour which, through its policy requirements, is saying we should increase bills by £1,000 and have higher council taxes in areas they represent. The best solution to the cost of living crisis is to halve inflation, grow the economy and reduce debt while supporting the most vulnerable in our society. Those are the priorities of my constituents and constituents right around the country, and they are the priorities of this Government.

Co-operatives, Mutuals and Friendly Societies Bill

Jerome Mayhew Excerpts

3rd reading
Friday 24th February 2023 Commons Chamber

[Andrew Griffith]

My hon. Friend, as well as being a doughty champion for the co-operative movement in general, is right to emphasise the voluntary element. It is right that those membership organisations that wish to use the lock have the architecture within the Bill to do so, but it is not the business of Government to interfere with the strategy, desire or, in some cases, need of those in the mutual sector to consolidate or raise capital through other means by taking all those options off the table with a mandatory asset lock.

That approach is typical of this Government. My hon. Friend will understand, as an experienced man of business, that our principle is to allow people to regulate and conduct their affairs in the way they feel best serves their needs. As he knows, we have heard very clearly that the mutual sector likes this architecture and will benefit from it. In that context, it is right for the Government to support the Bill.

[Jerome Mayhew (Broadland) (Con)]

As my hon. Friend says, it is important that the Government are in favour of the mutual movement, yet last year Liverpool Victoria was at risk of being taken over by private equity. Does he think we have the right balance between the free market being at liberty to appoint capital as it thinks best and the Government’s objective of supporting the mutual movement and allowing it to grow?

[Andrew Griffith]

My hon. Friend raises a point we have discussed a number of times during the Bill’s progress. It is a poster case for the need to provide some sort of protection. Without getting into the details of that case, Liverpool Victoria clearly continues as a mutual to this day, after deciding not to accept those offers. It is probably right that people were able to make those offers, but it is equally right that members were able to determine the outcome for themselves.

As I hope my hon. Friend recognises, the tapestry of the Government’s financial regulation role and the needs of a vibrant and competitive market occupies all my waking hours. It is a difficult task to calibrate, but we are greatly assisted by the presence on these Benches of so many colleagues with so much experience to offer. It is always a joy to receive representations on behalf of the myriad parts of the sector, all of which we are trying to help grow and deliver jobs across the economy. As I never fail to remind the House, two thirds of jobs in the financial services sector are outside London and the south-east. The sector touches communities across the country, as we have heard again today.

By permitting a stronger lock in law for those entities that wish to adopt it, the Government are aiming to provide the sector with an additional deterrent against demutualisation. It will empower mutuals to continue the legacy left by previous generations of members to deliver in service of their members and wider society. However, the Government are not seeking just to play defence on the mutual model; we want to advance the interests of the sector and to grow diversity so that we have a rich financial services sector that has all sorts of forms of ownership within it.

As the House will be aware, we are taking action to support credit unions, which are another type of member-owned, democratically controlled financial institution. This Bill does not apply to credit unions, but through the Financial Services and Markets Bill we are seeking to promote that sector. As the latest Prudential Regulation Authority data shows, there are 249 credit unions in Great Britain, representing more than 1.4 million adult and child members. There are exactly 650 constituencies; would it not be wonderful if every one of them had a thriving credit union? That is a vision for us to hold in mind.

As the Financial Services and Markets Bill makes its way through the other House, we are making a number of important amendments to the Credit Unions Act 1979 to allow credit unions to offer a wider range of products and services. Where they decide it is in their interests to do so, they will be able to offer hire purchase agreements and conditional sale agreements, and to distribute insurance products to their members. Those are all ways in which they can increase their utility to their members, and improve their own scale and financials, which is one of the challenges that they have had. We will also allow them the option to lend to and borrow from other credit unions on a short-term basis, which will sometimes allow them to manage their liquidity better. Again, that will improve the strength and resilience of the sector. That delivers on interests that were raised with the Government by the sector.

The Financial Services and Markets Bill also gives the Government a new power to allow credit unions to offer further products and services in the future through secondary legislation. The message is that the door is ajar. If we hear representations from the sector about more ways in which this Government can be on its side, it should keep pushing, because we will have the ability through secondary legislation to do that.

Additionally, the Government are taking forward a programme of work to ensure that building societies, mutual savings providers and mortgage lenders have a modern and fit-for-purpose legislative framework that promotes opportunities for growth. We have concluded our consultation on the Building Societies Act 1986. As was announced in the Edinburgh reforms package, the Government will in due course bring forward legislation to amend that Act. That will give building societies further flexibility in raising wholesale funds and help to modernise corporate governance requirements, enabling building societies to compete on a more level playing field with retail banks and, again, to promote competition and diversity of provision within the financial services sector.

We are not stopping there. The Government are committed to the health and prosperity of the mutuals sector, and we recognise the valuable contribution mutuals make. It is a matter of record that I believe we need to go further to cement a modern and supportive business environment in which mutuals can thrive. That is why we continue to have active discussions with the Law Commission on options to proceed with reviews of both the Co-operative and Community Benefit Societies Act 2014 and the Friendly Societies Act 1992, with a view to launching those reviews in the next financial year. Work is ongoing to define the terms and scope of the reviews, which includes close engagement with the sector, and I expect to be in a position to provide an update with more detail very soon, particularly as I know that many Members here today have a keen interest in that work. Clearly, that is something we wish to see move forward and I am sure it will. As such, I can confirm that a core aim of the reviews will be to focus on dysfunctions in the law that result in those organisations being unnecessarily impeded or facing additional time, expenditure or opportunity cost.

In conclusion, the prospects for mutuals are bright. I am delighted that we have been able to make progress on this important Bill today. I commend the cross-party spirit in which the hon. Member for Preston and the Opposition have worked closely with the Government and officials. I am very happy to commend support for this Bill.

Economic Responsibility and a Plan for Growth

Jerome Mayhew Excerpts

Wednesday 19th October 2022 Commons Chamber

[Andrew Griffith]

No, I am going to make some progress.

I have talked about the measures that we are taking to support growth, and about the tough decisions that the Chancellor spoke about in the House on Monday. I reiterate that, as we must not sugar coat it. In common with every other major economy, we face economic challenges at this time for three reasons.

First, there is the cost of covid. Through the first two years of the pandemic, the Government borrowed more than £300 billion more than had been forecast in March 2020—about £260 billion more in 2020-21 and £70 billion more in 2021-22—to fund emergency covid support, which had support on both sides of the House.

Secondly, interest rates are rising around the world on the back of increased costs and Putin’s war in Ukraine.

[Jerome Mayhew (Broadland) (Con)]

We recently heard that inflation in this country has risen to 10.1%, but is the Minister aware that the European Union reported its inflation figures this morning, and inflation in the eurozone has risen to 10.9%?

[Andrew Griffith]

My hon. Friend is absolutely right. I was aware of that, and inflation is 11% in Germany and 17% in the Netherlands. I hope that the hon. Member for Leeds West is listening, because we are seeing this phenomenon in all major developed economies. She has a background in economics, and I hope she can devote some of her energy to sharing her wisdom and insight with colleagues.

When it comes to interest rates, the Federal Reserve has implemented three consecutive increases of three quarters of a basis point, and the European Central Bank has increased rates at its last two meetings, including its largest ever single rate hike in September. As we hear contributions from Opposition Members, I hope that we will hear a little more about the broader context and a little less about attributing the situation to this Government.

--- Later in debate ---

[Jerome Mayhew (Broadland) (Con)]

If we have learned one thing from the experience of the past few weeks, it is that there really is no magic money tree, and the Government really do have to pay their way. Some of us, including myself, had started to doubt that essential economic truth because of the Government’s heroic response to the covid crisis.

I had intended to say that we had supported the families and businesses of this country to the tune of £400 billion. However, I listened to the Minister at the Dispatch Box, and when we add up all the unplanned borrowing very substantially as a result of covid, the total is actually £630 billion. It is because of that enormous intervention to support families and businesses by this Government that we did not have thousands of bankruptcies and millions of people cast out of work, as was the expectation. Right hon. and hon. Members will recall a forecast that we would have 12% unemployment, but because of the economic management by this Government the impact was cushioned and the economy protected from that enormous external shock.

The Government were quite right to do that, but why were they able to? It was because of the decade of prudent economic management that repaired the enormous economic damage left by Labour in 2010—prudent decisions that Labour fought against tooth and nail. The Labour motion before us calls for a plan to make the economy work for working people, but Labour does not stand up for working people. Every Labour Government in history, without exception, have left office with more people out of work than before. Their policies, again and again, are not the policies for working people, but the policies of unemployment.

Compare that record with that of this Government. Despite suffering the biggest economic shock to the world economy in a century or perhaps longer, unemployment has not gone up, as it always does under Labour. It has gone down, most recently to 3.5%, the lowest level since I was a tiny boy in 1974. In my Broadland constituency, the rate is even lower. That economic management is forcing employers to offer higher wages for staff—exactly the kind of economic conditions that help workers, particularly the lowest paid. It also serves to increase productivity, as local employers invest to limit the number of staff needed to produce. That is what will pay for the wage increases of the future, not Labour meddling.

I recognise, as does the Prime Minister, that the mini Budget went too fast and too far, and she has rightly apologised for it, but this Government have the right economic policies for growth. As one of the few entrepreneurs in this place, having helped to create hundreds of worthwhile, well-rewarded jobs and careers, I know the truth of the business saying that time kills deals. Speeding up the ability of businesses to get projects up and running will have a huge impact on the future growth and prosperity of this country.

The Government are right to launch investment zones. These zones do not just corral investment into a particular area; by speeding up the process of business, they will also grow the size of the pie. I hope that the results will be so striking that over time they will become a beacon for wider economic policy, showing the way for the rest of the economy.

The Government are also right to accelerate productivity-enhancing infrastructure projects across Britain to help with levelling up, including the building of the western link road in my constituency, which will shorten ambulance times by 20 minutes, open up a swathe of Norfolk businesses to improved market access and relieve the residents of Weston Longville and others from terrible rat-running—all opposed by Labour, I might add. As for the local Lib Dems, literally half of them have said they want it and the other half have said they do not. That says it all about the approach of the Liberal Democrats: to say whatever they think will sound good to local constituents, with no consistency at all.

Finally, the Government are right to speed up the review of EU-inspired regulations to make them bespoke for the United Kingdom economy. That will help British businesses and British workers. This Government have an economic record to be proud of, and I would back them to the hilt over Labour any day.

Economic Update

Jerome Mayhew Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

I do not think I could have been clearer in my statement. I said that the turmoil we have had is the result of international and domestic factors.

[Jerome Mayhew (Broadland) (Con)]

The Chancellor will be aware that his actions over the past few days have already lowered long-term expectations for interest rates. Can he set out for the House what impact he anticipates that that will have on mortgage rates in my constituency and across the country, as well as on the Government’s ability to fund future services?

[Jeremy Hunt]

I absolutely salute my hon. Friend for thinking about the needs of families having to pay mortgages, which have an enormous impact on their finances. As I have learned in my short time in this job, Chancellors never comment on what mortgage rates or interest rates should be, but I absolutely want to make sure, in so far as the Government can influence it, we make sure that they are held down as low as possible.

The Growth Plan

Jerome Mayhew Excerpts

Friday 23rd September 2022 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

Without growth, government just becomes an exercise in rearranging the deck chairs, so I absolutely welcome this unashamed focus on growth. As my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) said, it is a vote of confidence in the future of our country. Let us look at the western link road in my constituency. Does my right hon. Friend agree that the decision to accelerate that project is exactly the kind of enabling infrastructure and investment that helps local communities and unlocks local economic growth?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. By accelerating infrastructure projects, we can generate economic growth, generate achievement, enthuse the supply chain and get Britain moving again.

National Insurance Contributions Increase

Jerome Mayhew Excerpts

Tuesday 8th March 2022 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

The hon. Gentleman is asserting that the poorest will be worst hit by this, but Treasury analysis of the impact of tax and spending decisions on households in ’22-23 in cash terms clearly shows that the bottom eight deciles—80% of households—will be better off as a result of the Government’s combined tax and spend decisions, including on national insurance. What does the hon. Gentleman say to that?

[Richard Thomson]

I say that I very much doubt that, and there is analysis by the Institute for Fiscal Studies that suggests very differently, but again this comes back to the marginal rate of tax and there is no doubt that this is going to have a greater impact on the marginal rate of low earners than that of higher earners.

--- Later in debate ---

[Jerome Mayhew (Broadland) (Con)]

When we discuss whether we should have the national insurance contribution rise, we ought to look at what we intend to use the money for, because, after all, as my hon. Friend the Member for Gloucester (Richard Graham) mentioned, it is a hypothecated tax. The Government are looking to address two crucial elements to improve to our society, which are the covid backlog—currently more than 6 million people are waiting for treatment, of whom 310,000 are waiting for more than a year—and adult social care, where there is a desire widely held by constituents of hon. Members across the House to cap care costs. Such reforms would assist 150,000 people with their care costs at their time of greatest need. There is a degree of consensus that they are good proposals and must happen—we need to spend the money—so the real question is not whether we spend the money but how we pay for them.

[Mr Betts]

The hon. Member mentioned the 150,000 people who will benefit from the cap on care costs, and they are disproportionately people in more expensive homes. Where in that funding is the help for the 1.5 million people that Age Concern has assessed should be entitled to social care but have now been excluded from the provisions?

[Jerome Mayhew]

The hon. Member made a number of interventions on the Minister, and I refer him to the full responses that were given.

The question that I take from that is: how we will pay for the proposals? It seems to me that there can be only three answers. We can take money from other priorities in Government, we can borrow, or we can increase taxation. So far, I have heard no suggestions of other areas of Government spending that should be reduced. The Opposition typically move to defence spending as a simple way of extracting money for other commitments, but that is unlikely to be an area of future reductions in today’s environment; in fact, I submit that it will be the opposite.

[Grahame Morris (Easington) (Lab)]

The hon. Member is seeking suggestions. What does he think about the £8.7 billion of personal protective equipment that has been incinerated and gone up in flames? Surely nobody in their right mind would suggest that that is a good use of public money. Is it not possible to claw back some of those costs from the suppliers, if indeed the supplies were defective?

[Jerome Mayhew]

I am grateful to the hon. Member for his intervention. I suggest that a very good use of public money was emergency funding for PPE when we most desperately needed it in a national lockdown. It was inevitable that there would be a trade-off between speed—everyone in the House was cheering the Government on at the time—and maximising the effectiveness of every single contract. I hope that the Government make no apology for the speed with which they dealt with the crisis. They should be commended for that.

It has also been suggested that we should crack down on fraud. The hon. Member for Leeds West (Rachel Reeves) referenced a £4.7 billion headline in covid-related fraud, but she failed to give the Government credit for the actions that they have taken to address that. We have the Taxpayer Protection Taskforce, which has recruited 1,265 staff. We also have the work done on powers for the Insolvency Service and Companies House to link company directors directly to their bounce back loans, which has been used on 61,758 companies, catching loans worth £2.1 billion. The combination of those two factors means that the new estimate, which she did not find time to refer to, is not £4.7 billion but £3.3 billion. Fraud is therefore reduced to an estimated 7.5% of contracts, which is at least within spitting distance of the average for Government programmes of, I am sorry to say, as much as 5%.

[Anthony Browne]

My hon. Friend makes a valid point about the need to increase spending to pay for social care and has raised the different ways of doing that. Does he agree that if we are to increase spending sustainably, we need a sustainable source of money and that a one-off windfall that occurs in just one year cannot fund long-term commitments? Cutting back on fraud in one particular year cannot fund long-term commitments.

[Jerome Mayhew]

My hon. Friend is absolutely right. Even if we recovered all of that £3.3 billion, that would be for a single year only. The great mistake that the Opposition have made is to conflate single events—a windfall tax is another example—with ongoing revenue needs.

The next option is to borrow money. Of course, that is the easy response, and that really is the Opposition’s position, even if they cannot bring themselves to admit it from the Dispatch Box. However, that is not free money, because we have to service the debt and, eventually, we have to repay it. So we are passing the responsibility on to our children and our grandchildren for tax cuts now, which is essentially what the Labour party is arguing for. Our servicing of debt already cost an estimated £64 billion last year, which is £955 for every single member of the population. Because of inflation, which is a global phenomenon, and the likely rise in interest rates, that is forecast to rise to £75 billion for this financial year. The hon. Member for Leeds West says that the Government have a policy of buy now, pay later, but what could be a better description of Labour’s response to this pressing need? We want to improve social care, and we need to have a covid fightback, and we have got to pay for it.

There is the option to borrow, but, as I said, it is our children and grandchildren who will pay that price. I therefore believe that the Government are quite right to balance the increased social spending that we want to achieve with the tax necessary to pay for it. If we look at the total measures that the Government have brought in, we see that they are deeply progressive. Treasury analysis shows that they are net positive for 80% of households, whereas Labour’s plan to remove the national insurance contribution would actually help the top 10% the most—by more than £1,000. Surely that is not Labour’s policy.

No Conservative Government want to raise tax, but it is our duty before cheap popularity to be responsible custodians of national finances. That is a lesson that Labour has never learned.

[Several hon. Members rose—]

Tackling Fraud and Preventing Government Waste

Jerome Mayhew Excerpts

Tuesday 1st February 2022 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

Like my hon. Friend the Member for Barrow and Furness (Simon Fell), I am rather surprised to be called so early. I am grateful to Her Majesty’s loyal Opposition for securing this debate, because fraud and the efficient use of public resources is a topic that we in this place should always be discussing and hold close to our hearts. I could have started with a mutual blame game, where we look back to the Blair years and point to fraud. A couple of my examples have already been drawn to the attention of the House, so I will not do that, save for one issue that is particularly close to my heart, because I remember feeling so angry about it at the time: the private finance initiative scheme, so beloved by Tony Blair and Gordon Brown.

The Centre for Health and the Public Interest has recently come out with a report that has calculated that, for the benefit of £12.4 billion of hospital assets, the taxpayer will now be paying £80 billion by the time those assets expire in 2050. If we are talking about waste of public money, Labour is late to the party, and I am not sure there are many lessons to be learned from that.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I know the hon. Gentleman is giving a speech about a popular view of the private finance initiative, but I wish to make him aware of the Atkinson Morley wing at St George’s Hospital, which is a brilliant neurological centre that cost £50 million through PFI. It was built in the late 1990s, and it has saved hundreds and thousands of people. It is a building, and an opportunity to have a service, that was not coming any other way. I give thanks for that PFI deal, and I give thanks for those people who have been saved by it.

[Jerome Mayhew]

I am grateful for the hon. Lady’s intervention. I was not suggesting that the assets should not be built; it is about the way they were financed. Think how many more hospitals we could have built, and how many more people who could have been helped, if we had taken a more responsible approach to PFI.

Turning to the meat of today’s debate, we have heard a lot of speeches about the covid response and the fraud that has been associated with it, and it is right that we focus on fraud. However, there seems to be a case of partial amnesia about this, because if we cast our minds back to the early months of 2020—it was not that long ago—the conversation was expressly about the trade-off between speed and the level of security needed to protect the public purse from fraud. That was not an after-the-event discussion; that discussion was going on, certainly on the Government Benches, at the time of the innovative and brilliant polices brought in by the Chancellor and the Government to support our economy and the people working in it. This was a deliberate trade-off, but it was not “get the money out” with no defence against fraud. We have heard in a number of contributions that there were a significant number of effective protections against fraud, including for business bounce back loans, and more than £2 billion of applications were caught by that protection.

We must recognise, in the fullness of our hindsight, the urgency of need. I refer to my entry in the Register of Members’ Financial Interests, because I used to be the managing director and a significant shareholder of a company that employed about 1,200 people in a leisure centre. On 23 March 2020, it was ordered to close by the Government. That was its week of minimum cash flow for the entire year. It is substantially closed during the winter, and it employs another 750 to 800 people at the start of the season and trains them up ready for Easter. By ill chance, the lockdown, which started on 23 March, coincided with that planned dip in cash flow. Without quick public support, that business would have had a very high chance of going under. It did not, because it was able to take advantage of the Government’s coronavirus business interruption loan scheme, and also the furlough scheme, which was enormously important as well. As a result, on 4 July 2020, when the economy was substantially reopened and recreation and leisure was reopened, those jobs were saved. The business was still going, and it has gone on to thrive. That is just a simple example of how the speed at which the Government acted was effective in saving jobs.

We can expand that out to the national economy, because hon. and right hon. Members will recall that the economists were predicting an unemployment rate of 12% in response to the covid closure. We forget that now, because in fact the unemployment rate nationally today is 4.2%. That is millions of jobs and millions of families—hundreds of thousands of families, certainly—whose economies and lifestyles have been protected by the very speed at which the Government acted, but there was a partial cost to pay for that.

I accept, and it was accepted at the time, that with speed necessarily comes a reduced ability to follow up on every single aspect of fraud prevention. Given that, it is noteworthy that the estimated percentage fraud rate is about 7.5% for the bounce back loan scheme and much less for CBILS. That compares with a national average for Government contracts of about 5%. To my mind, given the necessary need for speed, the differential between those two rates is surprisingly small, and it is coming down month by month in estimates from such bodies as PwC. We have already heard reference to the reduction in the estimates of overall fraud.

What is more worrying to me is not the headline rate of 7.5%, but the ongoing long-term rate of 5% for estimated fraud in Government contracts. That is a scandal, and I strongly encourage my hon. Friend the Economic Secretary to the Treasury to take that enormously seriously, because we need to focus on the real costs to the economy and to society that Lord Agnew ably demonstrated in his resignation speech. He highlighted the economic costs as being about £29 billion a year, or 1% off the cost of income tax. That is enormously important. We could do a huge amount with that money should we not choose to return it to its rightful owner, the taxpayer.

Arguably the greater damage to our society is if we as a society and a Government accept that fraud is one of the costs of doing business. That should never be the case. The morality of our society and the realistic expectation of our constituents is that people who do right are stood by—that is terrible English, but I hope the House understands what I am trying to say there—that fraudsters are not tolerated, and that we go after them and there is an ongoing war against fraud.

I commend Lord Agnew for having highlighted the need for a renewed focus on this issue. I do not accept that there are huge lessons to be learned from Labour on this, but I look forward with interest to the Government’s renewed long-term focus on fraud throughout the economy. I also adopt the multiple pleas from my hon. Friend the Member for Barrow and Furness for an economic crimes Bill.

Cost of Living Increases

Jerome Mayhew Excerpts

Monday 24th January 2022 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

I am grateful to the SNP for calling this debate. As parliamentarians, it is absolutely right that we should debate in this Chamber the issues that are of most importance to our constituents when those issues are high on the political agenda, so I am grateful for the opportunity to talk about the cost of living and what we can do about it.

In the opening remarks of the Chief Secretary to the Treasury, we heard the long list of targeted assistance that the Government are providing. I will come back later in my speech to dwell on some of those. Overwhelmingly, however, the best solution for cost of living squeezes is high levels of employment and increased levels of pay when in employment. It is because of the Government intervention in response to the covid pandemic that we have an employment field that is so strong at the moment.

The Government intervened right at the start of the pandemic to save jobs through the furlough scheme, which supported more than 1 million jobs in Scotland alone, and other schemes, from the self-employment income support scheme—I refer to my entry in the Register of Members’ Financial Interests—to the business bounce back loan scheme to CBILS, the coronavirus business interruption loan scheme. Those saved thousands of jobs, including in the business of which I formerly had the honour to be managing director. Without a CBIL, that company—which employs more than 1,000 people, including several hundred in Scotland—would likely have gone to the wall. It has not and is now growing again—probably because I am no longer directly involved in it—and it is creating many hundreds more jobs, here and in America.

The impact of all that is that we did not suffer from 12% unemployment, which was the estimate of economists at the time. Now, as we leave this dreadful pandemic behind us—I hope—we have 4.2% unemployment throughout the country. In my constituency, it is at about 3.2%. Instead of having a jobs crisis in which people need jobs, the crisis in Broadland is the lack of people to fill the jobs available as our businesses grow.

It is always better to have good jobs with rising wages —which I will come on to—than to rely on a statist solution of increased benefits under universal credit, with the exception of the taper rate. The reduction of the taper rate from 63% to 55% should make good tabloid headlines. All those involved in that part of the economy know the importance of that injection of about £2 billion into the pockets of those who are least well off, as they move from benefits into employment. That is incredibly important, and I am grateful to the Government for focusing their firepower on the taper rate, rather than on the attention-grabbing £20-a-week part of universal credit, because that is where it can do most good.

There is now more employment in this country than in pre-pandemic times—over 400,000 more jobs—and we should celebrate that, but employment is only the first issue. The second is the amount people are paid when they are employed. I have already referred to the universal credit taper rate, and we should not underestimate how hugely important it is, but the other factor is the hourly rate people receive for their work.

[Angus Brendan MacNeil]

The hon. Gentleman is right that it is not so much about jobs as about earnings. Does he think the average worker would be better off in the UK, or in one of the Nordic countries, such as Norway or Denmark?

[Jerome Mayhew]

There is a trade-off between earnings and taxation: what people get to take home. I do not have the data, and I confess I do not know the full tax rates in Nordic countries, but I can say that the hourly rate in this country has risen consistently under this Government because of the national living wage—a Conservative Government development. The most recent rise of 6.6%, to £9.50, well above the forecast average inflation rate of 4% for the rest of this year, is the latest in a long line of above-inflation hourly rate rises under the national living wage.

From my local experience, I see the localised wage pressures to attract new staff in my constituency. Numerous businesses I have spoken to have told me they are raising their hourly rates above minimum wage to attract good new staff. There is a whole swathe of businesses, like the one I had the honour previously to lead, where, although the hourly rate is not the national living wage, it is in some ways pegged to it. The national living wage has a positive effect on hourly rates right across the economy.

[Navendu Mishra (Stockport) (Lab)]

The Living Wage Foundation has classified a living wage as an hourly rate of £11.05 in London and £9.90 outside London. That is significantly higher than the minimum wage set by the Government—it was George Osborne as Chancellor in a former Conservative Government who changed the branding from national minimum wage to national living wage. Does the hon. Gentleman agree that the Government should support the Living Wage Foundation and the rates it independently sets?

--- Later in debate ---

[Jerome Mayhew]

I am grateful to the hon. Gentleman for that intervention. The Government are on a journey to get the national living wage to two thirds of the median income, and they are making good, above-inflation progress to get there. We have to balance the needs of the recipients of hourly rates against the viability of the businesses that pay them; they need to thrive as well.

The Chief Secretary to the Treasury mentioned a long list of assistance in his opening remarks. Particularly important, from my perspective, are the household support fund, with £500 million going directly towards utilities support; the warm homes discount, which reduces the price of heating by £140 per household, at a cost of £200 million to the taxpayer; and cold weather payments, which provide £25 per week to up to 4 million people in this country. The Government have taken proactive steps to support those most in need while supporting the entire economy of our country, in Scotland and elsewhere.

If the SNP was really worried, it would reduce its income tax, which costs £800 million more to taxpayers in Scotland than the rest of the United Kingdom—I was shocked to hear that it applied to taxpayers earning just over £27,000 a year and above—support continued access to North sea oil and gas reserves, and regret Nicola Sturgeon’s assertion that she would not give the go-ahead to the Cambo oil field. We need security of supply and we need to support domestic extraction during the period of transition between now and 2035. That supports our domestic prices and helps us in our transition to net zero. The Committee on Climate Change itself recognises that we need oil and gas resources between now and 2035

[Jamie Stone]

I rise to my feet as somebody who worked in the oil sector, but that is not what I want to address. The furlough scheme meant that the money paid out in my constituency was reinjected back into the local economy and the UK economy. It was not salted away in Zurich. In terms of supporting families through these hard times, the money does not go into a black hole. It is recycled. It can be clawed back by corporation tax on companies and so on. Perhaps it would be a good thing if all of us, including Her Majesty’s Government, looked at that as we tackle the problem of fuel poverty that lies before us.

[Jerome Mayhew]

I am grateful to the hon. Gentleman for his intervention. Treasury Ministers are attending this debate and I am sure they were listening very carefully to what he said.

In conclusion, there is a difference between grandstanding on these issues, which the SNP appears to be doing—there seems to be a certain amount of virtue signalling here—and what the Conservatives have been up to in government, taking practical steps to improve the lives of people right across the United Kingdom.

[Tommy Sheppard (Edinburgh East) (SNP)]

The last few years have been times of great adversity and challenge for people across the globe. In every country in the world, people’s ability to cope with those problems has relied on them having a sense of a common endeavour, a sense, to coin a phrase, that we are all in this together. The problem with Britain today is that there are many people who no longer believe that we are all in this together. The statistics, as we look around us, show that that is the case. This is a country where there is great poverty, but what is worse than the fact that millions of people are working themselves into an early grave through mental illness because they fear they cannot afford to feed their children, is that there are many people in this country for whom the story is the complete opposite.

Last year in Britain, a record number of billionaires were recorded. As I said in this House last week, the most alarming statistic to me is that 171 of the richest people in Britain could afford to cover every single penny the Government have spent in responding to covid—more than £400 billion. They alone could afford to cover that bill and still be the richest people in Britain. The stock exchange has never been higher and the people who own stocks and shares have never been wealthier. Because of the increase in property prices, those who own the biggest and the most properties have done far, far better than those who own a modest home. That is the dreadful story of unequal Britain that we have today—a story of poverty on the one hand and great wealth on the other.

Let us not pretend that we are all in this together, because the truth is that those people at the lower end of the scale, in particular those on fixed and low incomes, are the ones who will disproportionately pay the cost of this crisis. When prices rise, it is the people on fixed and low incomes who are hit disproportionately. When general taxes increase across the board, it is they who are hit. When benefits or state spending is withdrawn, it is those who are already suffering who are asked to suffer even more.

That is the state of Britain today and you would think, Mr Deputy Speaker, that any Government—not just a Tory Government, but any Government—would be concerned about those figures and would want to do something about them. Yet in every respect, the Government’s only response is to either do nothing or demonstrably make things even worse.

Let me illustrate that in two ways. First, we have had a big debate about rising energy prices. Probably the most bizarre thing, which was alluded to by my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), is that when energy prices rise, Government income rises from taxes on the production and taxes on the consumption of that energy. The Government are facing a huge windfall in energy taxation and at the very least—the very least—we would expect them to say, “Let’s put this back into the pockets of the people we’re asking to pay these bills”.

[Jerome Mayhew]

rose—

[Tommy Sheppard]

If the hon. Member is going to confirm that that is the Government’s intention, I will gladly give way.

[Jerome Mayhew]

I am very grateful to the hon. Member for giving way, but did he hear the Chief Secretary to the Treasury say that VAT is charged at 5% on energy and, if households are not spending on other things that are taxed at 20%, the net income for the Treasury is likely to be negative?

[Tommy Sheppard]

Forgive me, but I think that most people will find that argument rather perverse: 5% on someone’s electricity bill is still 5%, and if it doubles or trebles, that is two or three times more than the Government were taking before.

[Jerome Mayhew]

rose—

[Tommy Sheppard]

If the hon. Member does not mind, I would like to continue.

What the Government ought to be doing is recognising that we are coming towards a crisis in the cost of living, particularly with the fuel bills coming in April. They ought to make sure that the energy cap remains in place and does not rise. They ought to provide support for energy supply companies to be able to deliver that. They ought to make sure that the people who have already faced an increase in their bills are given a one-off payment to enable them to get through the rest of this year. But instead of doing that, they do nothing. Tax is another example of where the Government go out of their way, it seems, to make things worse.

When I talk about tax, it is worth bearing in mind that benefits are also part of the tax system. If the Government choose to withdraw benefits from people, the effect is exactly the same as if they were to increase taxes on their wage bill. That is why the cut of £20 a week to the 6 million poorest households in Britain is so iniquitous and so immoral. It would be at any time, but to do it in the middle of a cost of living crisis is beyond imagination. Of course that ought to be reversed, and of course the Government ought to do more to try to help those who are on fixed and low incomes, particularly those living on meagre state benefits. The fact is that, if the Government do not uprate in the next 12 months the level of benefits paid to those people who desperately need them, with rampant inflation, the real value of those incomes is going to go down even further, and the people who can least afford it are going to be the ones who will pay the most.

Of course, the increase in tax that the Government are proposing—the national insurance increase—is a tax increase that everyone will pay, and the proportion they will pay is exactly the same, no matter how rich or how poor they are. I have heard Ministers on the radio talk about this as a progressive tax. It is the farthest we can get from a progressive tax. It is fundamentally regressive. The reason it is being brought in is that this Government, who have to increase revenues because of the economic crisis, do not want to ask the very richest or the very wealthiest in our society to pay a bit more. If they had any morality to them, in a situation where they knew they needed to raise income through taxation, they would first consider taxing those who have the most and taxing accumulated wealth, before they levied a tax on people on poor and fixed incomes.

I think there are many Government Members who can see that this is not a good situation and that the Government’s response is quite abysmal. By the way, I do not know how much of this is by design, or how much of it is turbocharged by the fact that the current Administration are in complete inertia and paralysis; they are unable to do something because they are so scandal-ridden at this point in time. I accept that the lockdown crisis the Government have makes it harder for them to govern, but either way this Government’s honeymoon is long over—the veneer is disappearing. Those people in the red wall seats in the north of England who were conned into believing that this Government—this Tory Government—would stand up for their interests are going to see over the next 12 months things laid out very clearly for them. That is why, of course, there are a lot of nervous people on the Government Back Benches, and there are going to be a lot of problems for the Government in the 12 months ahead.

Let me turn, in my final remarks, to the situation in Scotland. I was going to congratulate the hon. Member for Moray (Douglas Ross), but he is no longer in his place. He brought into the debate the question of Scottish independence. He introduced it—it is not an SNP obsession. If we look at the text of the motion, the words “referendum” and “independence” do not appear in it. That is not just because we are capable of talking about many other things: it is because this debate, by itself, makes the case for independence. We do not need to write it down—it is self-evident.

If people want to see how things might be done differently or a different set of instincts, aspirations, attitudes and character at work, they can look north of the border and at what the Scottish Government have tried to do within the competence that they have available. The discretionary housing payment is ameliorating the bedroom tax. The child payments, already introduced and doubling in April, will mitigate some of the attacks on the very poorest in our community. Income tax increases for those who can afford to pay more, which the Conservatives claim make Scotland the most taxed part of the United Kingdom, in fact make Scotland the fairest taxed part of the United Kingdom.

Conduct of the Right Hon. Member for Uxbridge and South Ruislip

Jerome Mayhew Excerpts

Tuesday 30th November 2021 Commons Chamber

[Jerome Mayhew (Broadland) (Con)]

It could have been so much better today. We had a precious chance to debate the issues that are most important to the people of Scotland, and SNP Members know what those issues are, because every opinion poll tells them that it is not independence. Fewer than 13% of Scots put it in their top three issues. In fact, the top three priorities for Scotland are healthcare, the economy and education, and it is just the same in England, Wales and Northern Ireland. We are together in this in our United Kingdom. But that is no good, because the job of the SNP is to sow division and to drive a wedge, because it has one issue—independence—irrespective of the views of the Scottish people.

If we look at healthcare, we can see why SNP Members are so silent on it. Any debate on the SNP’s health performance over the past 14 years would be a disaster for it. Even before covid, waiting times for referrals in England averaged 12 days—room for improvement—but in Scotland, waiting times for out-patients were 32 days and for in-patients 45 days. That is not an accident. That is the choice of the SNP. We have already heard about the drugs scandal. If we want to debate a scandal in this House today, we should debate the SNP’s drugs policy.

What about the economy? SNP Members do not want to talk about that either, because of the massive support from the United Kingdom Government for millions of people and businesses across Scotland, including the furlough schemes; the 99,000 Scottish businesses helped through business support; the billions invested in locally driven partnerships and projects from the shared prosperity fund, the levelling-up fund, the community ownership fund and the global Britain investment fund; and of course the Union dividend of £2,800 for every adult and child invested in Scotland every year. So we had better not talk about the economy.

That is before I have even mentioned the third issue: education. The SNP used to want to talk about that. In 2015, Nicola Sturgeon said:

“Let me be clear. I want to be judged on this. If you are not, as First Minister, prepared to put your neck on the line on the education of our young people, then what are you prepared to do? It really matters.”

She was right. It really does matter. But after a decade of devolved power, Scotland has fallen below England in the PISA standards for reading, maths and science. The SNP does not want to talk about that.

So what is left? An obsession with constitutional change and a debate on how much the Prime Minister should be paid. This matters. Just yesterday, the First Minister ordered the Scottish Government to divert resources to prepare for a referendum—