National Insurance Contributions (Reduction in Rates) Bill

Baroness Winterton of Doncaster Excerpts

2nd reading
Thursday 30th November 2023 Commons Chamber

[James Murray]

The hon. Gentleman promoted me inadvertently, as I am the shadow Financial Secretary to the Treasury, but I thank him for his vote of confidence. Our point is that today’s tax cut, which we support, must be seen in the context of 13 years of the Conservatives in power: 13 years of economic failure, with 25 tax rises in this Parliament alone and the tax burden on course to be the highest since the second world war. Whatever the Chief Secretary to the Treasury might say, people across Britain are experiencing life very differently from how she paints it.

However welcome the measures in the Bill may be, they come after 25 tax rises in this Parliament alone. The British people will not be fooled. No matter what statistics the Government contrive or the gloss they try to put on their record, people across Britain need ask themselves just one question: do they and their families feel better off now than they did 13 years ago? The answer is a resounding no. At last week’s autumn statement, we learned not only that the tax burden is still on track to be the highest since the war and that inflation has been revised upward across the entire forecast period, but that growth rates have been cut for next year, the year after, and the year after that.

It took some gall for the Chancellor to say that he was delivering an “autumn statement for growth”—comments repeated today by the Chief Secretary to the Treasury—since the Office for Budget Responsibility reports that next year’s growth rate has been cut by more than half. Low growth has dogged our country for the past 13 years. The autumn statement makes it clear that the Conservatives still have no plan to get our economy growing as it should. Since 2010, under the Conservatives, GDP growth has been stuck at an average of 1.5% a year, down from 2% in the Labour years before. If the economy had continued to grow for the past 13 years at the rate it grew under Labour, it would be £150 billion larger—the equivalent of £5,000 per household every year.

As we all know, because of that low growth, the Conservatives have had to keep putting up taxes on working people. Low growth and high taxes have made people across Britain worse off. That is the reality of the past 13 years of the Conservatives in power. The Bill’s tax cuts cannot even remotely compensate for the damage they have done to our economy and the living standards of people across Britain.

Although we support today’s tax cut, we know that our country needs economic growth to make working people better off and to get our public services off the floor. That is the plan from Labour. We are the party of fiscal responsibility and of business, with a plan to make working people better off. Come the next election—it cannot come soon enough—people across Britain will look at the Conservatives’ record and the bleak achievements they will claim. In this Parliament, real disposable household incomes will have fallen the furthest, following 20 years of pay stagnation. Real average earnings are not forecast to return to their 2008 peak until 2028. Four million people have been dragged into paying tax, with 3 million more in the higher rate—the biggest hit to income on record. Next year, real-terms income will be 3.5% lower than it was before the pandemic. This the biggest tax-raising Parliament Britain has ever seen.

Whatever the Conservatives say or do, and whichever way they try to twist and turn, reality has caught up with them. We have been here before. We remember the Conservatives promising to cut income tax ahead of the 1997 election. Back then, people decided that it was too little, too late, coming as it did after 22 tax rises in that Parliament. As this Parliament approaches its end, today’s Conservative party is showing itself to be even more divided and desperate than in the late ’90s. As the next election draws nearer and the Conservatives try to cling on to power, the risk grows that they will get more desperate with their promises and more reckless with taxpayers’ money. Britain needs a plan to get the economy growing and make working people better off. That is what Labour is offering and why a general election cannot come soon enough.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

I am not sure that I have ever heard a more grudging shadow Front Bench speech on measures that the Opposition support. They support them so wholeheartedly today that none of their Back Benchers has shown up to speak to them.

I endorse the measures in the legislation. The Chief Secretary is right to point to the turning point that the UK economy has reached this year, thanks to the steps taken a year ago to ensure that fiscal policy did not cut across the central bank’s aim to reduce inflation to its target. Thanks to that, inflation, which might have been as high as 13% last year, has fallen to 4.6%. That means that today, the earnings of the average UK worker are rising faster than the rate of inflation. We are seeing real earnings growth. That is the turning point that I am talking about.

The shadow Minister and the Chief Secretary both talked about the choices that the Chancellor could make on this occasion. In the evidence that the Treasury Committee took this week on the autumn statement, we saw the clear impact of the Chancellor’s choices on two long-standing challenges for the UK economy: slow productivity growth and the fact that not everyone has returned to work since the pandemic. When we get to the Finance Bill, I will expatiate further on the supply-side measures on the labour market and permanent full expensing, but today I will focus on the national insurance contributions element, which the Office for Budget Responsibility also considered to be a supply-side measure.

In the evidence that we took, we heard from the member of the Office for Budget Responsibility, Professor David Miles, that the choice to go for the national insurance contribution reduction in the autumn statement created a “definite positive” as an incentive to work. The OBR forecast that it will bring close to 100,000 full-time equivalent extra workers back into the workforce. That is so important. Paul Johnson from the Institute for Fiscal Studies noted in his evidence that, compared with a similar cut in income tax rates, a cut to national insurance is more progressive. It benefits people in work, but only on their earnings up to £50,000. That is important context for the choice that the Chancellor took.

I also welcome the simplification of taxes—a concept our Committee is committed to. Far too many things in our tax system act as disincentives to doing an extra hour of work. There are too many complicated withdrawal rates. The steps taken on class 2 and class 4 contributions represent a simplification of the tax system. Interestingly, we were told in our evidence session that the changes to class 2 and class 4 reduce

“the incentive for people to incorporate to gain a tax advantage.”

We should have a tax system that is broadly neutral on those two things.

Professor Miles told us that he thinks that the national insurance cuts are “unambiguously” a more positive incentive to work. The Office for Budget Responsibility does not see the measures as inflationary. He also said that

“some people at the margin who thought it perhaps was not worth working might now be persuaded to actively try to get a job”,

and that the measures will help retain people in the labour force.

To conclude my short remarks on the narrow measures in the Bill, I wanted to focus on the evidence that we have received on the choice that the Chancellor took on national insurance, and how that is very much focused on the structural challenges that the UK economy faces.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

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[Rehman Chishti (Gillingham and Rainham) (Con)]

rose—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Gentleman was quite late in and did not hear the beginning of the right hon. Lady’s speech.

[Priti Patel]

Thank you, Madam Deputy Speaker.

As has been mentioned, the alignment with the tax-free threshold should also help with the future plans to simplify the tax system. We had a bit of a discussion on this last week, but it is important in today’s debate again to raise the prospect of simplifying the tax system—more should be done in that area—by merging income tax and national insurance together. That is why I am disappointed that more Opposition Members are not here to discuss it. Last week, we had a semi-healthy discussion about it. It is out of the scope of this Bill to table an amendment to bring those two taxes together, but I urge those on the Treasury Bench—I would also be happy to work with other colleagues on this—to consider taking that up in advance of the spring Budget. Much more can be done here. Such a move would simplify taxes for the entrepreneurs and self-employed even further. As we know, when we come to the end of the tax year they are constantly having to do all sorts of things to satisfy His Majesty’s Revenue and Customs.

In 2012, I asked the Treasury a written question on integrating those taxes, and the then Exchequer Secretary replied by stating:

“Since Budget 2011, the Government have engaged extensively with stakeholders to develop options for operational integration of Income Tax and National Insurance Contributions. As many stakeholders have recognised, this is a complex issue with potentially significant implications for employers’ payroll operations. The Government will provide an update on this work later in the autumn. As we have already made clear, this is a long-term reform on which the Government will proceed carefully.”

That was a long time ago—it was 11 years ago. Although this is a complex issue, I maintain that such a move would help to simplify the tax system. I know that the Treasury Committee has looked at this area, and my hon. Friend the Member for West Worcestershire (Harriett Baldwin) touched on it today. Such a move would help to make payroll much easier for businesses, and allow them to co-ordinate income and revenue in a much more straightforward way.

Although this next issue may not be directly within the Bill’s scope, it does relate to NICs. I would therefore like to take the opportunity to restate for Treasury Ministers the position on fiscal drag. The OBR forecasts show that a freezing of the NICs thresholds and the income tax thresholds will, relative to consumer prices index inflation, and after taking into account the tax cuts here, bring in an estimated £27 billion in the next fiscal year, 2024-25, with this rising to nearly £45 billion more for the Exchequer in 2028-29. The OBR is clear on that. Ministers know my views: as we go into spring next year, and as the economy grows and more revenues come in, I urge them to look at this area all over again.

This Bill is welcome. It is a positive step in the right direction, along with the entire autumn statement. I commend my colleagues for the work they have done on it. The speed at which the Government are acting to bring forward the benefits of the NI changes and get them into pay packets as early as possible is right; it is commendable and should be supported, as I hope it will be by all colleagues in the House. The Government must continue to look at further steps. We want more economic growth. We are pioneers when it comes to innovation and small business. We need to find other ways to lower taxes so that people can keep more of their earnings and, importantly, we ensure that our economy is match-fit for the future so that it continues to grow.

[Madam Deputy Speaker]

I call the shadow Minister.

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[Nigel Huddleston]

I could not agree with my hon. Friend more. He has given me the opportunity to leap swathes of my speech, because he has put those important points incredibly well.

My hon. Friend the Member for West Worcestershire (Harriett Baldwin), who is my constituency neighbour and the Chair of the Treasury Committee, highlighted the importance of the autumn statement as a turning point, as articulated by the Chancellor, and the all-important supply-side measures in it that will help spur on business, create employment and generate incremental economic activity. As a result of the spring Budget and the autumn statement, the OBR has said that the economy is likely to be 0.5% larger. When we are talking about an economy of over £2 trillion, that is a huge incremental value to the UK economy.

Unfortunately, the spokesperson for the SNP, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), failed to recognise that we have addressed the cost of living to the tune of £100 billion in support. He also forgot that in the autumn statement we had an increase not only in the living wage but in benefits, aligned with inflation; in pensions; and in the local housing allowance rate, to the 30th percentile. That means 1.6 million families will be better off, gaining an average of £800 in support. It is not true to say that there were no cost of living support measures in the autumn statement.

My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) recognised the considerable impact of those measures and the fact that they make a meaningful difference to his constituents. He raised issues about visas and students, which I am happy to discuss with him further.

As always, my right hon. Friend the Member for Witham (Priti Patel) articulated core Conservative values incredibly well. The autumn statement recognised the importance of spending every penny of taxpayers’ money incredibly carefully and responsibly, as well as ensuring that we are there to support people through the tax system wherever we can. She is right to be passionate about small businesses and entrepreneurs. Small Business Saturday takes place this weekend and I am sure many of us will be out supporting small businesses, not only on Saturday but in the run-up to Christmas and beyond.

The Opposition spokespeople peddled so many myths and untruths, I do not know where to start. [Interruption.] We addressed many of them in previous debates, so I will not hear from them. The way they react speaks volumes.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The Minister did not mean to say “untruths”, did he?

[Nigel Huddleston]

I take back that comment, Madam Deputy Speaker. There were some presumed facts that require challenge, as we saw earlier in the week. At one point, the shadow Chancellor claimed that the forecasts were going to be £40 billion smaller. The shadow spokes- people know full well, because it is stated by the OBR, that economic growth by the end of the forecast period is higher than it was in the spring forecast. [Interruption.] I am sorry if I have to explain that to Opposition Members—if a number is bigger than the previous one, then that means growth and not decline. We could possibly forgive that mistake if it were not made by the people trying to become the Chancellor of the Exchequer. It is extraordinary incompetence—a £55 billion difference is not something we can easily ignore.

As my hon. Friend the Chief Secretary to the Treasury pointed out earlier, we are pleased that the Opposition are supporting the national insurance cuts, but to combine that with their commitments on spending, to the tune of £28 billion, and then claim that there will not be an increase in debt is farcical. It is not true; we know that will happen, and we are seeing the same old Labour. As Margaret Thatcher said:

“The problem with socialism is that you eventually run out of other people's money.”

That was true then, and it is true now.

I thank hon. Members for their contributions. The Bill delivers a tax cut for 29 million working people, and I am pleased that it will be getting support from across the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I join the two Front Benchers in saying how deeply sad it is to hear the news that Alistair Darling has died. He was an incredibly well-respected, thoughtful and kind man who was devoted to public service. I know all Members will want us to send their condolences to his family.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).

National Insurance Contributions (Reduction in Rates) Bill: Money

King’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the National Insurance Contributions (Reduction in Rates) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase in the sums payable under any other Act out of money so provided that is attributable to:

(a) reducing the main primary percentage for Class 1 primary national insurance contributions to 10% (and reducing the percentage specified in regulation 131 of the Social Security Contributions Regulations 2001 to 3.85%),

(b) reducing the main Class 4 percentage for Class 4 national insurance contributions to 8% from tax year 2024-25, and

(c) removing the requirement to pay Class 2 national insurance contributions from that tax year.—(Mark Jenkinson.)

Question agreed to.

Autumn Statement Resolutions

Baroness Winterton of Doncaster Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. We have eight more speakers, so there is more pressure than I thought. I am afraid that Members have not been sticking to the advisory guidance of speaking for only 10 minutes, so I will now impose a nine-minute limit to aid colleagues in the length of their speeches.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am going to be very generous and see what happens if I put the time limit back up to 10 minutes, although I may have to reduce it again.

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[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

It is a pleasure to follow the hon. Member for North East Bedfordshire (Richard Fuller). I understand the points he made about taxation. There have to be limits on how we tax people, families, businesses and so on, but the position we are in today underscores the need to deliver sustainable economic growth, because that will deliver the tax receipts that allow us to invest in our public services.

The autumn statement is clearly framed with the next UK election in mind. While some of the measures are welcome—I particularly welcome the announcement of the reallocation of the Inverness and Highland city region deal, allowing £20 million in funding for the Corran ferry in my constituency, which will be well received by the community in the Ardnamurchan peninsula and others—overall the autumn statement is a missed opportunity to deal with the structural weaknesses in the UK economy, while recognising the pressures felt from the cost of living crisis.

Let us reflect on the headroom referred to by the hon. Member for North East Bedfordshire. In large measure, that has been caused by the inflationary aspects on taxation receipts. Much of the gloss of the headline tax cuts will wash away when people realise the harsh reality: inflation will erode the fantasy that the Chancellor is making folk better off, and, as have heard, fiscal drag is real issue. While much of the focus is on the short term, where is the vision to sustainably grow the economy for the long term? Interestingly, when we look at the OBR book, we find that business investment is forecast to fall from 10.9% of GDP this year to 9.7% by 2029. The illusion that we will see an explosion of investment growth is not borne out by the analysis of the Office for Budget Responsibility.

We can debate the source of the pressure on public finances, but absence of growth fundamentally caps the growth in tax receipts that would allow us to invest in infrastructure and our public services, and ultimately pay down our accumulated debt through the delivery of growth. The harsh reality is that the United Kingdom is falling down the league tables for investment and growth, which affects all of us here and is all too apparent to all our constituents and communities.

Let us look at the OBR forecasts: GDP growth of 0.6% for this year, 0.7% for next year and 1.4% for the year after. That is an average of 1.4% over the six-year period forecast. I do not know how the Chancellor classifies a high-growth economy—but, my goodness, this is not it. It is a fantasy if those on the Tory Benches believe that this autumn statement delivers high and sustainable growth; quite simply, it does not.

By comparison, let us look at the International Monetary Fund forecast for the US: growth of 1.6% this year, 1.1% next year and 1.8% the year after, and an economy that has outpaced the UK on average by 1% a year over the last decade. That is the reality of how the UK has fallen behind over the period of Tory Governments since 2010. The UK has failed on growth since the financial crisis and, on today’s forecasts, the UK will continue to fail on growth. To quote the phrase to the Chancellor: “It’s the economy, stupid”.

Let us look at the reality of policy failure in broken Britain. The Resolution Foundation suggests that the current parliamentary term is on track to be the worst for living standards since at least the 1950s. The OBR suggests that real wages will only get back to the 1998 level in 2028: two decades of no growth in real wages—yet you wouldn’t believe any of that when you hear the bùrach coming from the Tory Benches. Why do they not just admit that over the course of their Administration—and thank goodness it is coming to an end—people have got poorer?

We can talk about the tax burden and we can talk about the investments they have trumpeted, but the harsh reality is that what we have seen is a massive, massive mismanagement of the economy. I ask colleagues across the House to dwell on that, and the Chancellor and his Treasury team to accept the failure of financial management that has resulted in such poor outcomes. My goodness, what a disgrace. With our debt and taxation burdens, people have got poorer. Those on the Government Benches should look at themselves in the mirror and at what they have presided over.

It is not just a failure of leadership and management in this parliamentary term; the problems run much deeper. In particular, we have been stuck with a low-growth economy since the financial crisis of 2008. Low growth, low investment and low productivity growth led to that lost decade and that squeeze on living standards.

When we think back to the period post the financial crisis, the only game in town was quantitative easing; much of it was required, but there were two failures. The complete misalignment between monetary and fiscal policy for much of the period meant that the circumstances to create sustainable economic growth could not be delivered. The failure of that lies at the door of this Tory Government. Then the continued printing of money through the QE scheme was one, but not the only, cause of the increase in inflation that we have seen. The Government say that they are not responsible for the increase in inflation to 11.1%—of course recognising the independence of the Bank of England, but let us not kid ourselves about the alignment that takes place—but much of that increase in inflation was a failure of policy, in particular a failure of policy at the time of covid. Let us accept some responsibility where it is necessary to do so.

The Government had some cheek congratulating themselves on the decline in inflation when the increase in the first place was driven by policy failure. Although the growth in inflation is falling, let us please not forget that it is hurting ordinary folk. We know about the continued increase in food prices, the cost of energy, and the painful choices that people are having to make. The lack of direct support to counteract all that is hitting home for millions of folk who are struggling to make ends meet.

Tomorrow the energy cap will be announced, and it is expected to increase from £1,800 to £1,900. That is the reality of what is happening to people—that increase in cost and the impact on consumers. Of course, there is also the fact that the Bank of England is warning that interest rates will remain high, and millions will face the impact of rising mortgage costs yet to come. And let us remember that the international markets attach a risk premium to the UK; our interest rates will remain higher for longer than our international counterparts, and that has been the case for a while now.

What we see with the tax cuts that are being trumpeted today is that our UK economy is very much based on a trade and current account deficit. What happens in the end is that the currency takes the hit and investors say they want a premium to hold UK assets. Again, that is the failure of long-term planning for the UK economy—not just the disastrous Budget last year, but the penalty of being in the UK, and for us in Scotland of being in broken Britain.

Let me return to the future and to the questions about vision and the sort of economy that the UK is. Fundamentally, the UK is a trading economy, not a manufacturing economy. When we are discussing this autumn statement and the prospects for growth, we cannot ignore the self-harm of Brexit or the lost growth opportunity that impacts the UK to the tune of 4% of our GDP—when we are struggling for growth, we actually inflict that self-harm on ourselves. Just look at the OBR forecast for growth. Where is the plan to change this? Where is the green industrial strategy?

I am delighted that the Scottish Government have been presented with an industrial strategy—it is sitting with the Government now—because we recognise the enormous opportunity that there is to increase our green energy output fivefold and to create, between now and 2050, 325,000 jobs. What a contrast it is to have a Government who will make sure that we have that just transition, who will prioritise investment in net zero, and who will make sure that we tackle fuel insecurity. The Scottish Government estimate that there are 830,000 fuel-poor households in Scotland—a third of all our households. It is a scandal that energy-rich Scotland is paying the price for the failure of UK energy policy. It clearly demonstrates that, while we have the power in Scotland, Westminster has control—and in Scotland, we pay the price.

Let me wrap up. The UK Government should have reinstated the £400 energy bill support scheme. Protecting people from the cost of living crisis should have been a priority in the autumn statement. My colleagues in the Scottish Government, through initiatives such as the Scottish child payment, are helping to drive young people and families out of poverty. We understand the importance of using our capital funding to strengthen the conditions for economic growth, but we are having to do that while our capital budget is being constrained and cut by the UK. That is the real-terms cost to Scotland of being held back by broken Britain—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I do have to pull people up if they go over. I call Maggie Throup.

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[Rachael Maskell (York Central) (Lab/Co-op)]

I concur with the commitment of the hon. Member for Erewash (Maggie Throup) to public health measures in today’s statement. It is fascinating, however, that when given a rare chance to make life better for millions of people—people just about managing, or people not managing but really struggling—the Conservatives turn on them, as we heard today, making their lives even harder.

The economic success we heard about is glossy, but we are coming down from last year’s disastrous Budget. Inflation has halved this year because it went so high last year, causing our constituents to have exceptionally high mortgage rates, which they are paying for day by day. Borrowing is at an all-time high, just shy of 100% of GDP, and the economy will be £40 billion smaller in 2027 than was predicted in March this year. That shows that the economy is still fragile and volatile, and even after 13 and a half years of this Tory Government all we have seen today is money being moved from welfare to the wealthy. Do we wonder why people are worse off when we see such decisions being made?

I believe economic policy—how we tax and spend—must focus on creating a fairer society, alleviating poverty, tackling injustice and inequality and helping people to be independent yet collectively contribute to the vital services we depend on across our society. Public sector services hardly got a mention today, yet they are on their knees. Council, health and public service leaders across the country will therefore be baffled by the decisions the Chancellor made.

We have seen 13 and a half years squandered, with poor economic productivity, poor investment in our people and planet, and increasingly poor social outcomes. We have more people sick—7.8 million on waiting lists—more needing a home and more in need, and we have 14.5 million people on the edge, in poverty, in debt, struggling with heating, rent and food. And of course there was no promise of additional help today. We must remember that 4.3 million children in York and across the country now live in poverty; 18% of pensioners are counting the pennies to get by and we have a harsh winter ahead of us, with the energy price cap due to go up tomorrow and a tough year beyond that. Food prices are up about 25% on April 2022 figures, while gas prices are 60% and electricity prices 40% higher, yet wages have not matched that growth. In York, residents face the fourth-highest rents in the country.

While the fall in inflation is an important factor, because it will have an impact in the long term, none of us will ever forget how we got to where we are today. The economy needed the Chancellor to do more than just talk about cutting the revenue into the Treasury; the autumn statement should have been more about redistribution and, sadly, it was lacking in that—not least when the national insurance measures that he introduced will bring the greatest benefit to the richest people, who pay more national insurance, meaning that working people continue to pay more.

Turning to those working people, we know that working hard really matters, and I want everyone to have the opportunity to use their skills and talents to the full and contribute to society, and in return receive just reward for their labours. However, our public services are on their knees. York Council has seen £11 million in cuts this year and £40 million in the last four years. York’s schools are underfunded—the 17th worst in the country—and vital services are absolutely desperate.

We must understand the consequences of the cuts that the Chancellor talks about, not least those to national insurance. We are working hard in York to create opportunities, with exceptional schools, colleges and universities, a Labour council, businesses, charities and public services. Despite our calling out for two and a half years for funding for BioYorkshire, which will create 4,000 good-quality green-collar jobs, the Government have not brought forward the investment long promised, alongside UK Research and Innovation. Likewise, the creative sector, particularly the visual effects sector, has a real impact on my constituency, and I welcome a deeper dive into that area, but why have we not seen that money bought forward until now?

All we see are services cut back, underfunded, understaffed and just not working. People are paralysed by the pressures of life, suffering with mental, economic and physical stress. They are simply not coping. Rents are too high and wages too low; there are bills to pay, but no money left and no hope.

I want to make three points. First, we have no spare social housing, as I said to the Chancellor. York is one of the worst places in the country to access housing, with rents in the private rented sector the fourth highest in the country. The broad market area is too broad. As a result, people in my constituency, even after receiving £650 a month in local housing allowance, still have to pay an additional £983 on private rent. They cannot afford to live in my city but, if they move away, it will skew the economy even more. We need the broad rental market area to be reviewed. I urge the Minister to take that away and ensure that it happens, because it really matters for my constituents.

Secondly, I am sickened by paragraph 3.25 of the autumn statement. People at their most vulnerable do not engage with the DWP because they cannot, because life is too hard for them. To introduce such punitive measures as those we have heard about from the Chancellor is a complete disgrace. It is ill-conceived, immoral and economically illiterate, because those people will end up elsewhere in our public services, creating even greater demand. They will end up in our NHS in desperate need, not least if the Government take away their prescriptions. What an utter disgrace to do that to people who are already sick and struggling. I will fight the Government every step of the way on that measure, and I trust that my party will, too. That is not how we should treat human beings who are struggling and suffering. The Government should be ashamed of themselves, not least because the Chancellor then tried to pitch those individuals against other people who are struggling—people who come to our country for sanctuary. I could not believe that I was hearing that in this House—shame. We have to change that. I trust that the Labour party will be at the forefront of that charge.

On the DWP, the bedroom tax is still hurting people, sanctions are still hurting people, and the two-child limit is still hurting families in my constituency, as is the benefit cap. If we reversed those measures, we would see a big number of people move from poverty into being able to have dignity in their lives. Surely, this place is meant to achieve that.

Thirdly, the Joseph Rowntree Foundation’s work on the basket of essentials guarantee—providing every person enough money to survive on, with £120 a week for a single person and £200 for a couple—would really make a difference for people who are dependent on social security. I often hear Members on the Treasury Bench ask, “How would you afford it?” Well, according to the University of Greenwich, a wealth tax on people with an accumulated wealth of over £3.4 billion, for example, would bring in £70 billion. We must remember that the 50 richest families in our country own 50% of the wealth.

Change is so achievable. We must think about priorities. Politics is about morals, justice and fairness, but we have not seen that today. I know that it will not be long until we have a Labour Government, who will be here to serve, give hope, and do everything humanly and economically possible to turn things around. We believe in fairness, honesty, justice and equality, and we will deliver them.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am afraid that I will have to take the limit down to nine minutes.

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[Catherine West]

As you will know with your lifetime of experience in social care and other sorts of public services, Madam Deputy Speaker, the good councils—I have to say they are mainly Labour councils—have introduced the living wage for all their contracting and subcontracting. That makes an enormous difference in the local economy. I challenge every single council to try to push for more from its procurement pound.

In the survey results from all the places that I visited over the summer with my wonderful staff and an ex-BBC journalist who helped me to get the survey right, some 55% felt that their quality of life had deteriorated since the pandemic. The British Red Cross research reports “Life after lockdown” and “Lonely and left behind” found that 41% of UK adults feel lonelier since the start of the initial lockdown. Millions are going a fortnight without having a meaningful conversation. The pandemic showed the importance of tackling loneliness, and it is clear that the Government strategy on loneliness simply is not working. The Red Cross said that

“tackling loneliness should be built into Covid-19 recovery plans”,

and:

“Governments should ensure those most at risk of loneliness are able to access the mental health and emotional support they need to cope and recover from Covid-19.”

These are the very people whom the Chancellor was trying to address when he said that there were increased rates of worklessness in people over the age of 50. I am sure that access to mental health services and emotional support is very much a part of that puzzle.

As well as mental and physical health and wellbeing, we must also consider the impact that grief, bereavement and the economic struggles that people are facing have on people’s sense of wellbeing. Some 51% of respondents to my survey said that they are unable to participate in events because they are online, and that also needs to be looked at, because the digital divide is real and desperately needs to be addressed by local authorities and all Departments. Some 45% said that it was harder to see their GP than before the pandemic. Some 48% said they had experienced a reduction in NHS services, particularly in podiatry, chiropody and physio. Those are crucial services that people need to keep mobile, which reduces the cost to the NHS and the queue of people waiting for care in the NHS.

Before I conclude, I will make one point on the importance of primary care and that relationship with a GP. If individuals are not on the internet and they go to see their GP, eight minutes is not really enough. In some cases, they are not even getting eight minutes every six months. So many people are living without seeing a human being day-to-day. For 13 years now, social care has lacked the funding and attention that it deserves, with £8 billion lost from adult social care budgets. In my constituency, I hear from residents having to pay thousands of pounds for their care or care for a loved one. There are high levels of unmet or under-met care needs. The Association of Directors of Adult Social Services estimated that around 246,000 people were waiting for a care assessment in August 2022.

The final finding from my survey is that 60% of the people I spoke to in all different sorts of care settings said that they felt lonely or isolated, and 34% rarely had visitors. The loneliness strategy simply is not working. It is having a real effect on our economy and on our older folk. I hope that can be addressed as this debate goes forward.

[Madam Deputy Speaker (Dame Rosie Winterton)]

As the hon. Lady’s speech was a little shorter, I shall allow the final speaker 10 minutes—just to prove that it is not always bad to be the final speaker.

--- Later in debate ---

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Before I call the Minister, may I say how important it is for Members to return to the Chamber in good time for the winding-up speeches? There are still some Members who are not present. It is extremely discourteous not to get here in good time to hear from the Opposition spokesperson and the Minister, and I hope that that will be conveyed to those who are not present.

Economic Growth

Baroness Winterton of Doncaster Excerpts

Tuesday 14th November 2023 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

I want to get everybody in as fairly as possible, so the time limit will be reduced to five minutes after the next speaker.

Duty on Shopping: UK Entry Points

Baroness Winterton of Doncaster Excerpts

Wednesday 6th September 2023 Commons Chamber

[Sir William Cash (Stone) (Con)]

Will my hon. Friend give way?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. No. The hon. Gentleman has only just come into the Chamber. This is an Adjournment debate, and he should have been here from the beginning to intervene, as he knows.

[Henry Smith]

I did not notice my hon. Friend slink in behind me, but I am grateful for his moral support, Madam Deputy Speaker, even though by your order he is unable to vocalise it.

On my support for sustainable aviation, I was pleased to host and address a new industry alliance, Hydrogen in Aviation, just last night here in Parliament. The alliance is designed to help the UK lead innovation in that field. That would, along with duty-free on arrival, better support our sector. Aviation and our ports are vital for UK trade and employment. We can do this in a cleaner, smarter way, and duty-free arrivals can play an important part for the sector.

In closing, it is clear that the introduction of arrivals duty-free stores would support economic growth and provide a tiny boost to the recovery of aviation, travel and tourism from the pandemic. This plan would be funded by industry and would be at worst cost-neutral for the Exchequer. It is a low-risk policy that has already proven successful in some 65 countries around the world. There would likely be no impact on domestic high street sales, due to limited market overlap and differing customer behaviours in duty-free stores. By introducing duty-free stores on arrival, the Government can reaffirm their commitment to supporting the aviation, travel and tourism sectors, and the economic prosperity that they afford by providing employment to so many of my constituents, and to communities across the entire country. The policy is also popular with the electorate, so I hope that the Government will act swiftly to achieve this additional Brexit freedom.

Covid-19 Pandemic: Fiscal Policies

Baroness Winterton of Doncaster Excerpts

Monday 17th July 2023 Commons Chamber

[Mary Kelly Foy]

I am quite surprised and confused. I gave statistics about how many deaths there were, and specialists across the board, including the United Nations, have pointed out the damage done by the austerity programme. I have no idea why you mentioned the two child limit. It would have been really helpful if you had stuck to the point of my debate.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Lady knows that she must not address the Minister directly.

[Andrew Griffith]

I will not delay us on the two child policy—the Labour party’s two-policy policy. Perhaps it was a detour too far for the hon. Lady. I made that point just to illustrate that these are difficult decisions for those on both sides of the House, as it turns out.

I recognise the hon. Lady’s passion and congratulate her again on securing the debate. It is clearly a topic that she rightly feels strongly about, and I apologise if I have not fully addressed all her concerns. It is of course a topic that the independent inquiry is addressing, and I, and I expect the House, look forward to hearing the outcome of that inquiry in due course.

Question put and agreed to.

Public Sector Pay

Baroness Winterton of Doncaster Excerpts

Thursday 13th July 2023 Commons Chamber

[John Glen]

The Government have an extensive programme led by the Secretary of State for Levelling Up, Housing and Communities. I am sure that he would be happy to set out the further work he is doing in advance of the autumn statement.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the Chief Secretary for his statement.

Financial Services Reforms

Baroness Winterton of Doncaster Excerpts

Tuesday 11th July 2023 Commons Chamber

[Andrew Griffith]

It is always a pleasure to listen to the hon. Lady. In general, what I learn is that the Opposition have no plan. It is all critique and no counter-proposal. She talked about this being too little, too late, but this Government are moving at pace, in what the sector acknowledges as one of the fastest rates of implementation of financial services reform for a generation, taking advantage of our Brexit freedoms and the regained control of our rulebook, which she and her party seek to oppose again and again.

The hon. Lady talked about the lack of growth, but under Labour I am told that the percentage of the workforce with a private pension declined by 20%. She also talked about patient capital, which should not be a point of disagreement between us. This Government have done an enormous amount to support British patient capital, with £2.3 billion of investment, and we have recently increased the length of the British patient capital scheme for a further period.

The hon. Lady also talked about capital going overseas, but that is nothing to the degree to which capital would be flooding overseas were her party ever to return to power, accelerating us to the point where once again the Chief Secretary to the Treasury is writing notes to remind us there is no money left. I potentially discern a point of difference between us, which perhaps in due course she will clarify, in the approach to the compact. It is not the position of this Government to mandate where people’s pensions should be invested. Indeed, the last time a Labour Chancellor decided what was good for our pension schemes, it did not end well.

Finally, the hon. Lady talked about green finance. This Government are doing a copious amount on green finance; only yesterday my right hon. Friend the Secretary of State for Energy Security and Net Zero met some of the world leaders in green finance, and earlier this year we published an ambitious green finance strategy, continuing the UK’s progression to being one of the world’s first net zero-aligned financial centres.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

I should probably note in this context that I am a trustee of the Parliamentary Contributory Pension Fund.

I warmly welcome the work that the Economic Secretary and the pensions Minister have done in this important area, and strongly endorse what the Economic Secretary says about its meaning that future pensioners will be able to retire with higher pension incomes. However, he will know that I have put another piece of urgent work in his inbox, about helping the 93% of our constituents who are unable to afford access to financial advice and have to rely on bog-standard generic guidance. Can he update the House on how his review of the advice-guidance boundary is going and how he will help the majority of people who save in defined-contribution schemes to get access to some sort of personalised coaching or guidance?

[Andrew Griffith]

It is always a pleasure to respond to my hon. Friend and to the work of her tremendous Treasury Committee, which rages across this broad financial sector. She is right to raise the question of access to financial advice; I am afraid the world of financial services regulation is fraught with unintended consequences, and one unintended consequence of financial regulation and a growing compensation culture is to move financial advice beyond the financial ability of so many people who would benefit from receiving it. That is called the advice gap. I and my officials continue to work on that and I look forward to sharing proposals with the House and with my hon. Friend and her Committee in the autumn.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Economic Secretary for his statement. I agree with him on regulation, where he said that regulators would be required to facilitate growth and competitiveness alongside their other objectives. However, as he knows, unless the central bank is obliged to do the same, we might end up in the rather odd and undesirable position of regulators and the central bank taking contradictory actions. I want to ask mainly about pension reform: under the Mansion House compact, potentially 5% of the DC funds are to go towards unlisted equities. There is huge potential in that for growth, for innovation, for jobs, for global competitiveness and for scaling up to compete, but that comes with a commensurate risk, which is presumably up to 5% of the value of the DC fund, should the value of that unlisted equity be wiped out.

While I hope the scheme succeeds, what liability would fall on the Pension Protection Fund should it fail? What liability might there be on the taxpayer? If the scheme works and the value of the funds increases, what guarantee is there that the pension holder will receive the entire value of that increase and it will not be gobbled up by unnecessary and excessive fees?

--- Later in debate ---

[Andrew Griffith]

My hon. Friend, who knows so much about this topic and has engaged so lucidly on it, is absolutely right about the importance of investment research. It provides access to markets, makes our UK stock exchanges an attractive international venue, narrows spreads and drives fair valuations for investors and companies seeking investment. This is one example of where we inherited a European fact pattern that was not quite right for the UK. I look forward to pensioners, investors, savers and companies benefiting from our research review.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Work and Pensions Committee.

[Sir Stephen Timms (East Ham) (Lab)]

Defined-benefit pension funds have long been under pressure to invest in Government gilts rather than the productive economy, so I welcome the change of direction that the Minister has announced. He has indicated how much extra pension fund investment will go into high-growth companies in future. Will he indicate what share of that he expects to go into UK high-growth firms rather than overseas? He has indicated, I think, a replacement for the current charge caps on pension funds, with a wider value-for-money assessment, but can he indicate when we are likely to see the detail on what exactly he and the Under-Secretary of State for Work and Pensions, the hon. Member for Sevenoaks (Laura Trott), have in mind for that?

--- Later in debate ---

[Andrew Griffith]

I thank my hon. Friend for his, as ever, apposite points. That encouragement is exactly what the proposals are all about: working voluntarily with the sector and encouraging it to lean in. I want people to see 5% as a potential floor, not a ceiling. Many will seek to go much further forward. The broad objective of the Government is to provide good access to capital at every stage of a Government’s life, whether it is our support for the seed enterprise investment scheme, the enterprise investment scheme or the venture capital trust; the expansion of the pool of individual investors who are able to invest directly in the stock market; and some of the opportunities that he talked about, all the way through to ensuring that our listed and private capital markets work extremely well. That is the objective of the reforms.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Public Accounts Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I draw the House’s attention to the fact that I am a trustee of the parliamentary contributory pension fund. Forgive me if I am a little sceptical about Government involvement in pension funds. We have seen how the annual and lifetime allowances, announced at the Dispatch Box by a former Chancellor, have played out. It was also this Government who took us through McCloud in the public sector. The Minister said that the average earner who starts saving at 18 could increase the size of their pension pot by 12% over their career. Can he give the House examples of the assumptions behind that figure, and will he publish the modelling behind it?

Points of Order

Baroness Winterton of Doncaster Excerpts

Tuesday 11th July 2023 Commons Chamber

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

On a point of order, Madam Deputy Speaker. I have written to the Treasury twice without a substantive reply about Sea Lanes, the first new public lido opened in my constituency in 30 years, and the National Open Water Swimming Centre. They are owed a VAT rebate of over £170,000, which was due back on 19 April. I am sure that Government Front Benchers understand the importance to new businesses of getting speedy rebates.

His Majesty’s Revenue and Customs has no hotline for MPs to ring up. If our question is on VAT matters, we have to ring up the public line, and every 48 hours, Sea Lanes has to reauthorise my office to speak on its behalf. On 25 June, we were told that there was nothing delaying that payment, yet three weeks later, no payment has been received. Madam Deputy Speaker, as there is no hotline and HMRC has not responded to my letters, could you advise me how best to pursue this matter with the Treasury?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Gentleman for his point of order. From what he has said, I can understand his concern. Miraculously, he has managed to raise his point of order when he has a Treasury Minister right in front of him, and I have a feeling that Ministers may well take back his comments.

[The Economic Secretary to the Treasury (Andrew Griffith)]

indicated assent.

[Madam Deputy Speaker]

The Minister is nodding in agreement, so I think the hon. Gentleman has succeeded in raising his case effectively. We will leave it at that.

[Crispin Blunt (Reigate) (Con)]

On a point of order, Madam Deputy Speaker. I distinctly remember that during last week’s Second Reading of the Economic Activity of Public Bodies (Overseas Matters) Bill, when the Communities Secretary was asked in an intervention whether there had been any advice against the Bill from diplomatic posts, he replied that he was not aware—that he knew of no such advice. It has now become clear that a senior official in the Foreign Secretary’s own office sent a letter to No. 10 expressing such concerns about the consequences of the Bill. I wonder whether, Madam Deputy Speaker, you have had any notice that the Foreign Secretary intends to correct the record, or whether he will rely on the fact that the Foreign Secretary’s office is not a diplomatic post in any formal sense.

[Madam Deputy Speaker]

I thank the hon. Gentleman for his point of order. He did not give me notice of it, so I have not been able to get any other information. There were two parts to his point of order: first, that the Foreign Secretary answered by saying that he was not aware, and then that there had been no such representations. The hon. Gentleman has raised the issue; if any correction is necessary, I am sure it will be made, and I am confident that those on the Government Front Bench will pass back his comments. However, it was a little difficult to work out whether the hon. Gentleman was saying that there was no awareness, or that there had been no representations.

[Mr William Wragg (Hazel Grove) (Con)]

Further to that point of order, Madam Deputy Speaker. I think my hon. Friend the Member for Reigate (Crispin Blunt) hon. Friend misspoke; it was the Communities Secretary.

[Madam Deputy Speaker]

I am sorry—that is probably my fault. At first we had the Communities Secretary, then we had the Foreign Secretary. Whoever it is, I am sure they will be on this immediately, unless Mr Blunt wants to be more specific.

[Crispin Blunt]

Further to that point of order, Madam Deputy Speaker. The Communities Secretary gave the assurance to the House that he was unaware of any such advice in the context of diplomatic posts. It appears that that advice did exist, and that it came from the Foreign Secretary’s own office.

[Madam Deputy Speaker]

I am sure that between those points of order, we can sort out the various channels that need to be fed back to. The hon. Gentleman has raised the issue, and I am sure it will be taken back.

[Andy McDonald (Middlesbrough) (Lab)]

On a point of order, Madam Deputy Speaker. Through you, may I express my thanks to Mr Speaker for his support yesterday? There was a very unpleasant social media posting containing a threat. I can report that the gentleman concerned has unequivocally and unreservedly apologised, and has made a significant donation to the Jo Cox Foundation.

[Madam Deputy Speaker]

I thank the hon. Gentleman for informing the House of that. I will certainly pass his thanks back to Mr Speaker, and I am glad to hear that there has been a satisfactory outcome.

Mortgage and Rental Costs

Baroness Winterton of Doncaster Excerpts

Tuesday 27th June 2023 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I inform the House that amendment (a), tabled in the name of the Prime Minister, has been selected.

I call the shadow Chancellor to move the motion.

--- Later in debate ---

[John Glen]

The interventions we have made provide significant scope for assistance. To find an accurate number would be very difficult, but we will continue to work with industry and with lenders to find maximum flexibility and interventions to support them at this difficult time. While we roll out those measures, tackling inflation remains the No. 1 priority of the Prime Minister and the Government. Inflation makes every person in this country poorer and it has to be tackled head-on.

Notwithstanding that, I am fully alive to the fact that some people remain in real distress. I assure hon. Members and their constituents that we will always stand ready to help where we can. That is why at the Budget we announced that the energy price guarantee would be extended for a further three months. That extension was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to those very high oil and gas prices, caused by global circumstances—including, of course, Russia’s invasion of Ukraine.

Alongside holding down energy bills, freezing fuel duty, increasing universal credit and raising the national living wage and pensions, we are giving up to £900 in cost of living payments to households on means-tested benefits. Taking those measures together, the Government are already supporting families with one of the largest support packages in Europe, worth £3,300 per household on average.

The Government’s approach makes targeted interventions to protect the most vulnerable, while maintaining a laser-like focus on tackling inflation. I believe that that stands in sharp contrast to some of the policies offered by opposition parties. The Liberal Democrats are calling for a £3 billion mortgage protection fund, which would simply pour fuel on the fire of inflation, making it harder to bring prices down. That would be such a damaging move that it is apparently even too extreme for those on the Labour Front Bench to contemplate.

However, I would say that the Labour party is not without its own flaws when it comes to offering unfunded inflationary policies. The media reports that the right hon. Member for Doncaster North (Edward Miliband) has had his wings clipped by the Leader of the Opposition for his excessive spending proposals, but in reality the shadow Chancellor is only slightly delaying Labour’s £28 billion spending spree to the second half of the next Parliament—an amended timetable, but the same reckless policy.

We said that we would halve inflation, not because it was an easy thing to do, but because it was the right thing to do. History and the best economic insights that we have today tell us that the best way to beat inflation is to stick to our plan, backing the Bank of England’s monetary policy decisions. We will stick to the plan, because it is the only way we can give relief to families and reprieve to businesses. As we have done before, we will face down these economic challenges while supporting the most vulnerable and setting us up for economic growth.

Since a Conservative Government came into power in 2010, the UK economy has grown more than those of major countries such as France, Italy, or Japan, and about the same as Europe’s largest economy, Germany, which is now in recession. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We will now overcome this inflationary period, and offer a helping hand to those who need it as we do so.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the SNP spokesperson, I think I will have to give some firm guidance about time limits. My initial guidance would be six minutes, just so the first speaker on the Government side is aware.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

The next speaker will have six minutes, but after that I will have to reduce the time limit to five minutes.

Finance (No. 2) Bill

Baroness Winterton of Doncaster Excerpts

Report stage
Tuesday 20th June 2023 Commons Chamber

[The Financial Secretary to the Treasury (Victoria Atkins)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Amendment (a) to new clause 4, at end insert—

“(2) The Treasury may by regulations amend subsection (1) by substituting a later date for the date for the time being specified there.”

Government new clause 5—Communications data.

New clause 1—Review of alternatives to the abolition of the lifetime allowance charge—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed—

(a) conduct a review of the impact of the abolition of the lifetime allowance charge introduced by section 18 of this Act and other changes to tax-free pension allowances introduced by sections 19 to 23 of this Act, and

(b) lay before the House of Commons a report setting out recommendations arising from the review.

(2) The review must make recommendations on how the policies referred to in subsection (1)(a) could be replaced with an alternative approach that provided equivalent benefits only for NHS doctors.”

This new clause requires the Chancellor to review the impact of the tax free pension allowance changes and to recommend an alternative approach targeted at NHS doctors.

New clause 2—Reports to Treasury Committee on measures to simplify tax system—

“(1) The Treasury must report to the Treasury Committee of the House of Commons on steps taken by the Treasury and HMRC to simplify the tax system in the absence of the Office of Tax Simplification.

(2) Reports under this section must include information on steps to—

(a) simplify existing taxes, tax reliefs and allowances,

(b) simplify new taxes, tax reliefs and allowances,

(c) engage with stakeholders to understand needs for tax simplification,

(d) develop metrics to measure performance on tax simplification, and performance against those metrics.

(3) A report under this section must be sent to the Committee before the end of each calendar year after the year in which section 346 (abolition of the Office of Tax Simplification) comes into force.”

This new clause would require the Treasury to report annually to the Treasury Committee on tax simplification if the Office of Tax Simplification is abolished.

New clause 3—Review of public health and poverty effects of Act—

“(1) The Chancellor of the Exchequer must review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) The review must consider—

(a) the effects of the provisions of this Act on the levels of relative and absolute poverty across the UK including devolved nations and regions,

(b) the effects of the provisions of this Act on socioeconomic inequalities and on population groups with protected characteristics as defined by the 2010 Equality Act across the UK, including by devolved nations and regions,

(c) the effects of the provisions of this Act on life expectancy and healthy life expectancy across the UK, including by devolved nations and regions, and

(d) the implications for the public finances of the public health effects of the provisions of this Act.”

New clause 6—Review of business taxes—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed—

(a) conduct a review of the business taxes, and

(b) lay before the House of Commons a report setting out recommendations arising from the review.

(2) The review must make recommendations on how to—

(a) use business taxes to encourage and increase the investment of profits and revenue;

(b) ensure businesses have more certainty about the taxes to which they are subject; and

(c) ensure that the system of capital allowances operates effectively to incentivise investment, including for small businesses.

(3) In this section, ‘the business taxes’ includes any tax in respect of which this Act makes provision that is paid by a business, including in particular provisions made under sections 5 to 15 of this Act.”

This new clause would require the Chancellor to conduct a review of business taxes, and to make recommendations on how to increase certainty and investment, before the next Finance Bill is published.

New clause 7—Statement on efforts to support implementation of the Pillar 2 model rules—

“(1) The Chancellor of the Exchequer must, within three months of this Act being passed, make a statement to the House of Commons on how actions taken by the UK Government since October 2021 in relation to the implementation of the Pillar 2 model rules relate to the provisions of Part 3 of this Act.

(2) The Chancellor of the Exchequer must provide updates to the statement at intervals after that statement has been made of—

(a) three months;

(b) six months; and

(c) nine months.

(3) The statement, and the updates to it, must include—

(a) details of efforts by the UK Government to encourage more countries to implement the Pillar 2 rules; and

(b) details of any discussions the UK Government has had with other countries about making the rules more effective.”

This new clause would require the Chancellor to report every three months for a year on the UK Government’s progress in working with other countries to extend and strengthen the global minimum corporate tax framework for large multinationals.

New clause 8—Review of energy (oil and gas) profits levy allowances—

“(1) The Chancellor of the Exchequer must, within three months of the passing of this Act—

(a) conduct a review of section 2(3) of the Energy (Oil and Gas) Profits Levy Act 2022, as introduced by subsection 12(2) of this Act, and

(b) lay before the House of Commons a report arising from the review.

(2) The review must include consideration of the implications for the public finances of the provisions in section 2(3)—

(a) were all the provisions in section 2(3) to apply, and

(b) were the provisions in section 2(3)(b) not to apply.”

This new clause requires the Chancellor to review the investment allowances introduced as part of the energy profits levy, and to set out what would happen if the allowance for all expenditure, apart from that spent on de-carbonisation, were removed.

New clause 9—Review of section 36—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact on the public finances of the measures provided for by section 36 of this Act (‘the section 36 measures’).

(2) The assessment must include details of any analysis by the Treasury or HMRC of—

(a) the amount of additional tax raised by the section 36 measures and,

(b) the number of individuals who are required to pay additional tax as a result of the section 36 measures.”

This new clause requires the Chancellor to review the impact of the measures in the Act that affect people with non-domiciled status, including by setting out how many people will be required to pay additional tax and how much this will raise in total.

New clause 10—Review of new bands and rates of air passenger duty—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes to air passenger duty introduced by this Act on—

(a) the public finances;

(b) carbon emissions; and

(c) household finances.

(2) The assessment under subsection (1) must consider how households at a range of different income levels are affected by these changes.”

This new clause requires the Chancellor to publish an assessment of this Act’s changes to air passenger duty on the public finances, carbon emissions, and on the finances of households at a range of different income levels.

New clause 11—Review of impact of tax changes in this Act on households—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes in this Act on household finances.

(2) The assessment in subsection (1) must consider how households at a range of different income levels are affected by these changes.”

This new clause requires the Chancellor to publish an assessment of the changes in this Act on the finances of households at a range of different income levels.

New clause 12—Review of Part 5—

“(1) The Treasury must conduct a review of the provisions of Part 5 of this Act (electricity generator levy).

(2) The review must consider the case for ending or amending the charge on exceptional generation receipts when energy market conditions change.

(3) The report of the review must be published and laid before the House of Commons within six months of this Act being passed.”

This new clause would require the Government to conduct a review into the energy generator levy with a view to sunsetting the levy when market conditions change.

New clause 13—Review of effects of Act on the affordability of food—

“The Chancellor of the Exchequer must, within six months of this Act being passed, lay before the House of Commons an assessment of the impact of the measures of this Act, and in particular sections 1 to 4 (income tax), on the ability of households to afford the price of food.”

This new clause would require the Government to produce an impact assessment of the effect of the Act on the affordability of food.

New clause 14—Review of effects of Act on small businesses—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, lay before the House of Commons a report on the likely impact of the measures of this Act on small businesses.

(2) The report must assess the effect on small businesses of any taxes charged under this Act, in the context of other financial pressures currently facing small businesses including—

(a) the rate of inflation, and

(b) b) the cost of energy.”

This new clause would require the Government to produce an impact assessment of the effect of the Act on small business with particular regard to inflation and the cost of energy.

New clause 15—Review of effects of Act on SME R&D tax relief—

“(1) The Chancellor of the Exchequer must lay before Parliament within six months of the passing of this Act a review of the impact of the measures in section 10 relating to research and development tax relief for small and medium-sized enterprises.

(2) The review must compare the impact of the relief before and after 1 April 2023, with regard to the following—

(a) the viability and competitiveness of UK technology start-up and scale-up businesses,

(b) the number of jobs created and lost in the UK technology sector, and

(c) long-term UK economic growth.

(3) In this section, ‘technology start-up’ means a business trading for no more than three years; with an average headcount of staff of less than 50 during that three-year period; and which spends at least 15% of its costs on research and development activities.

(4) In this section, ‘technology scale-up’ means a business that has achieved growth of 20% or more in either employment or turnover year on year for at least two years and has a minimum employee count of 10 at the start of the observation period; and spends at least 15% of its costs on research and development activities.”

This new clause would require the Government to produce an impact assessment of the effect of changes to SME R&D tax credits in this act on tech start-ups and scale-ups.

Government amendments 9 to 13.

Amendment 1, page 12, line 30, leave out clause 18.

Amendment 2, page 12, line 37, leave out clause 19.

Amendment 3, page 13, line 31, leave out clause 20.

Amendment 4, page 14, line 1, leave out clause 21.

Amendment 5, page 14, line 11, leave out clause 22.

Amendment 6, page 14, line 20, leave out clause 23.

Government amendments 14 to 16.

Amendment 22, in clause 115, page 74, line 10, at end insert—

“(1A) The Chancellor of the Exchequer must, within one month of this Act coming into force, lay before the House of Commons an assessment of the impact of extending the provision of subsection (1) to wine which—

(a) is obtained from the alcoholic fermentation of fresh grapes or the must of fresh grapes and fortified with spirits,

(b) is included in one or more of the United Kingdom Geographical Indication Scheme registers, and

(c) is of an alcoholic strength of at least 15.5% but not exceeding 20%.”

This amendment requires the Chancellor to lay before the House an assessment of the impact of providing comparable transitional relief to fortified wine made from fresh grapes, such as port and sherry, as has been made available to other forms of table wine.

Amendment 20, in clause 264, page 188, line 7, at end insert—

“(2) The Treasury may by regulations amend subsection (1) by substituting a later date for the date for the time being specified there.”

Amendment 23, in clause 278, page 198, line 9, after “costs” insert “and relevant investment expenditure”.

This amendment is linked to Amendment 24.

Amendment 24, in clause 278, page 198, line 12 at end insert—

“Where the generating undertaking is a generator of renewable energy, determine the amount of relevant investment expenditure and also subtract that amount.”

This amendment, together with Amendments 23, 25 and 26 would allow generators of renewable energy to offset money re-invested in renewable projects against the levy.

Amendment 25, in clause 279, page 199, line 21, at end insert—

“a ‘generator of renewable energy’ means—

(a) a company, other than a member of a group, that operates, or

(b) a group of companies that includes at least one member who operates a generating station generating electricity from a renewable source within the meaning of section 32M of the Energy Act 1989;

‘relevant investment expenditure’ means any profits of a generator of renewable energy that have been re-invested in renewable projects;”.

This amendment is linked to Amendment 24.

Amendment 26, in clause 279, page 199, line 26, at end insert—

“a ‘renewable project’ is any project involving the generation of electricity from a renewable source within the meaning of section 32M of the Energy Act 1989;”.

This amendment is linked to Amendment 24.

Government amendments 17 to 19.

Amendment 7, page 265, line 2, leave out clause 346.

This amendment would leave out Clause 346, which abolishes the Office of Tax Simplification.

Amendment 21, in schedule 16, page 399, line 27, at end insert—

“(2A) The Treasury may by regulations amend subsection 2(a) by substituting later dates for the dates for the time being specified there.”

The aim of this amendment is to enable the Treasury to extend the permitted period for multinational groups to make transitional safe harbour elections, reducing the compliance burden, in the event that other countries are slow to follow suit in implementing these rules.

[Victoria Atkins]

Let me first thank all right hon. and hon. Members who have taken part in debates on the Finance Bill so far. Today is Report stage, but there has been intense scrutiny of many measures in the Bill, not just line by line in Committee on the Committee Corridor but, importantly, in Committee of the whole House. I hope that I will hear from right hon. and hon. Members on some of those discussions.

We are focusing on a number of proposed amendments to the Bill, which I will address in turn. Many of the Government’s amendments focus on ensuring the proper functioning of the legislation in response to scrutiny from businesses, business representative groups, parliamentarians and feedback. Others take forward responses to substantive issues that have emerged during the Bill’s passage. This is an exercise of how scrutiny in this place works, and I hope it works well. I will address each Government amendment in turn in this part of the debate. To reassure colleagues, I want to listen to the debates that will follow on non-Government amendments and proposed new clauses, and I hope to deal with points raised by right hon. and hon. Members when I wind up.

Government amendments 9 and 10 seek to ensure that our policy of full expensing achieves its intended affect. The existing wording can result in balancing charges being incorrectly calculated by not applying the correct apportionment to the disposal receipts. This is a straightforward and necessary technical adjustment to a policy that will help businesses to invest with confidence and boost UK productivity.

Government amendments 11, 12 and 13 provide that both the decarbonisation allowance and the existing investment allowance in the energy profits levy work as intended. They correct unintended exclusions by revising definitions to ensure that the investment allowances apply throughout the UK, in UK waters and on the United Kingdom continental shelf.

Government amendment 14 is a minor technical amendment that concerns the lifetime allowance—specifically, in clause 23, which allows modifications of certain existing transitional protections to ensure that stand-alone lump sums can continue to be paid to those who are entitled. The amendment clarifies the tax treatment for any amount above the limited 5 April maximum. The amendment is required to avoid an unintended outcome that would otherwise arise as a result of the removal of the lifetime allowance charge, whereby those who are entitled to stand-alone lump sums may not have been able to access their full benefit. The amendment corrects that. We are grateful to members of His Majesty’s Revenue and Customs pensions industry stakeholder forum for raising the issue.

New clause 4 relates to the domestic minimum top-up tax, which is part of the global minimum tax agreement. That agreement protects against large multinational groups and companies using aggressive tax planning and shifting their UK profits overseas. The amendment simply puts beyond doubt that the commencement date for the domestic top-up tax aligns with the multinational top-up tax and the internationally agreed timings, and no earlier. The start date is for accounting periods beginning on or after 31 December 2023. We will discuss the global minimum tax agreement in more detail later, precisely because it is of particular interest to right hon. and hon. Members. I will respond to those further arguments and suggestions when I wind up.

--- Later in debate ---

Let me turn now to the administration of capital allowances, which we have discussed in previous debates. Those allowances will still pose burdens to businesses. Conservative Members must ensure that it is not a Conservative Government who are putting burdens on businesses, but that they do everything possible to bring down the tax base and the tax burden, and to simplify taxes for businesses.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I gently remind colleagues that if they want to intervene on a speaker, it is important that they are in the Chamber at the beginning of the speech, just in case the point that they wish to raise has already been made. It is also important to stay until the end. I call the SNP spokesperson.

[Stewart Hosie]

Before I turn to the new clauses and amendments before us, it is worth reminding ourselves briefly about the debate so far, not least that the Bill was derived from a Budget that had the stated intention of seeing the debt, borrowing and inflation all fall. As the Financial Secretary has said previously, debt servicing costs are down, and indeed they are—they are down from last November, but massively up from the previous year. She said that the fiscal targets are to be met. Again, indeed they are. The debt target in particular is forecast to be met in five years’ time measured against the fiscal charter, but it will be at 0.2% of GDP. That is £6 billion out of a GDP approaching £3 trillion. As I have said before, these are very fine margins.

Although it is true that having a weather eye on debt and deficit—the big macro-economic indicators—is important, so too is immediate help for families suffering from high inflation, high energy prices and spiralling mortgage costs. Those things, however, are all sadly absent from the Bill. That is important because the OBR has told us that living standards will fall by 6% over this fiscal year. That will be the largest two-year fall since Office for National Statistics records began in the 1950s. It is important because inflation is still at 8.7%, and it is far worse for certain essentials such as sugar, at nearly 50%. Remember that inflation was forecast to fall to 2.9% by the end of this year. Since then, it has been revised up to 5% by the end of this year. That means that the forecasts and the pain keep rising.

We know that real pay is not keeping pace with inflation. Troublingly, the Government are keeping their head in the sand regarding the inflationary impact of Brexit, ignoring even the former Bank of England Governor, Mark Carney, who could not have been clearer about the contribution Brexit has made to the soaring inflation we face.

I turn to the amendments and new clauses we are considering on Report. New clause 1 calls for a review of alternatives to the abolition of the lifetime allowance, and amendments 1 to 6 delete clauses associated with the abolition. On Second Reading, I suggested the need to probe this matter in Committee. The decision to remove the cap on lifetime pension allowances, which will cost around £3 billion, will benefit a tiny number of already pretty comfortably off or very well-off people. I also suggested that, if the measure was genuinely designed to lift certain categories of worker—doctors in particular—out of a pension and employment trap, the Government should, to be brutally honest, have come up with a much better and far narrower solution.

My hon. Friend the Member for Aberdeen North (Kirsty Blackman) also raised the matter in the Committee upstairs. She made the point that a significant number of questions have been raised in the House and elsewhere about the lifetime allowance and the problem it has caused, particularly for NHS doctors, but went on to quote Torsten Bell of the Resolution Foundation, who noted that 20% of those who will benefit from the change in the lifetime allowance work in the finance industry, meaning that nearly as many bankers as doctors will benefit. That surely cannot have been the intention. We are pleased to support new clause 1, because it seeks not simply a review, but a review that will make recommendations about how a more focused alternative could be delivered.

Amendment 7 seeks to remove entirely the abolition of the Office of Tax Simplification, and new clause 2 seeks reports based on metrics to measure the performance of tax simplification. We will support both if they are voted upon. My hon. Friend the Member for Dunfermline and West Fife (Douglas Chapman) provided some excellent context in Committee, arguing that

“the OTS achieved a significant amount during its 12 years of existence and, with greater ministerial support for its proposals, could have achieved much more.”—[Official Report, Finance (No. 2) Public Bill Committee, 18 May 2023; c. 136.]

He also quoted George Crozier of the Chartered Institute of Taxation, as many have done over many years, who said that there had been

“useful reforms to employee expenses and inheritance tax reporting,”

and that

“every Finance Act of the last decade has had measures in it which owe their genesis to the OTS, and which have made navigating the tax system easier for one group or another.”

My hon. Friend also made the rather important point that it was the independence of the Office of Tax Simplification that made it stand out from anything that can be provided in-house. We will back amendment 7 and new clause 2 if they are pressed to a Division.

If I may say a few words about Government new clause 4 and Government amendments 9 to 13, they appear to come under the category of tidying up and clarification. New clause 4 in particular ensures that both domestic and international top-up taxes commence at the same time, and the other amendments ensure that reliefs and charges operate as intended.

However, I am rather less sanguine about Government new clause 5. Ostensibly, it is required to deal with the situation where

“financial institutions are regarded as telecommunications or postal operators”.

For example, subsection (5) of Government new clause 5 suggests that paragraph 19(4) and (5) of schedule 36 to the Finance Act 2008 be removed, but paragraph (19)(4) says:

“An information notice does not require a telecommunications operator or postal operator to provide or produce communications data.”

That is a protection against the requirement to produce data in certain circumstances. Paragraph 19(5) defines “communications data”, “postal operator” and “telecommunications operator” as per the Investigatory Powers Act 2016—the very legislation that inserted those protections into schedule 36 to the Finance Act 2008 in the first place. Government new clause 5 not only affects the financial institutions regarded as telecoms or postal operators but, it would appear on my reading, removes protections in the Act for all telecommunications and postal operators not to be required to provide certain information in certain circumstances.

The Financial Secretary said she would answer questions at the end in her summing-up, and my questions are rather simple. What problem is Government new clause 5 designed to address? Why has a potentially significant amendment such as this come so late in the day? Is it even remotely appropriate that a criminal justice measure, the Investigatory Powers Act, should be amended in a potentially significant way through a late-delivered new clause on Report of a Finance Bill?

New clauses 3 and 8 to 14 call for reviews or reports of one form or another on the public health and poverty effects of the Bill, the oil and gas profits levy allowance, the impact of those with non-dom status, the bands and rates of air passenger duty, the impact of tax changes on households, and the effect of the Bill on the affordability of food and on small businesses. We are happy to look on those positively, although I am not certain that new clause 12 should really be opening the door to reducing the electricity generator levy. The Lib Dems have disappeared, but I would have said to the hon. Member for Tiverton and Honiton (Richard Foord), had he been in this place, that if one opens the door to a tax cut to the Tories, they by and large take it.

We will also support new clause 7, which requires a statement of progress on the pillar 2 reforms, seeking

“to extend and strengthen the global minimum corporate tax framework”.

It is important that we have a global minimum corporate tax framework, and I am not convinced by the arguments made by the right hon. Member for Witham (Priti Patel) about offering the opportunity for implementation to be delayed.

Again, the Lib Dems are not in their place, but I am also not yet convinced by new clause 15 because, while there are issues with the Government’s research and development framework, which I have raised before—namely, the stated intention to limit attributable expenditure for data and cloud computing licences—the new clause seeks to make the regime more restrictive and introduces the extraordinarily subjective viability clause in subsection (2)(a).

It is, however, true that none or few of the amendments and new clauses tabled substantially alter the Bill. It is also sadly true that none of the Government changes offer any hope of substantial help for the cost of living crisis any time soon. I fear that the Bill, and the Budget it derived from, will go down in the missed opportunity category.