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

Debate between Baroness Winterton of Doncaster and James Murray

Committee of the whole House
Wednesday 13th March 2024 Commons Chamber

[James Murray]

As I have made clear throughout the Bill’s consideration, Labour supports the national insurance reductions that it seeks to deliver. I am disappointed, however, that Conservative MPs voted to block our new clause. Since the Chancellor announced the Conservatives’ plan to abolish national insurance contributions last week, Ministers have refused again and again—including today—to say how that will be funded or what impact it will have. We believe people deserve to know what impact the Conservatives’ £46 billion unfunded tax plan will have on pensioners and their pensions, on public services and on the health of our economy. Our new clause would have required the Government to come clean and be honest with the British public. Instead, Ministers have decided to vote against us and stick to their reckless and irresponsible unfunded tax plan.

It is still not clear how this reckless commitment to abolishing national insurance will be funded or what impact it will have on pensioners, pensions, public services, borrowing or the state of our economy. But what is clearer than ever is that the Conservatives are the party of reckless, irresponsible, unfunded tax plans that threaten our economy, our public services and the finances of households across the country. Only Labour will bring stability and the responsible approach our economy needs and only a general election will give the British people the chance to vote for change.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Scottish National party spokesperson Kirsty Blackman.

Finance Bill

Debate between Baroness Winterton of Doncaster and James Murray

Committee of the whole House
Wednesday 10th January 2024 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I call the shadow Minister.

[James Murray]

I rise to speak to the new clauses in my name and that my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq).

Clause 21 and schedule 12 relate to the implementation of pillar 2 of the OECD/G20 inclusive framework on base erosion and profit shifting. Labour supports this clause and schedule as they are intended to modify the existing multinational and domestic top-up taxes introduced in the Finance (No. 2) Act 2023, to make sure these new taxes work as intended. We have long supported the global deal on the taxation of large multinationals, as we want to see it working as effectively as possible.

We know that the OECD guidance on implementing the deal is coming out in tranches, so it is important that UK legislation is updated to reflect that. We recognise that, as with any global deal of this scale, its details are complicated and its implementation will take time, yet we have been clear throughout its development that we support the principle of a global agreement as a crucial step in making the tax system fairer, thereby helping to make sure that British businesses that pay their fair share of taxes are not undermined.

Indeed, nearly three years ago, in April 2021, I first set out in the Commons our support for a global deal to make that tax system fairer, to make sure that a level playing field is there for British businesses and to stop the international race to the bottom on tax for large multinationals. The Treasury Ministers at the time appeared at first lukewarm in backing plans emerging from the United States for a global deal. Eventually, however, the then Chancellor, now the Prime Minister, began to support the deal in public. We were glad that the current Prime Minister seemed to have come round, but I am not sure all his Back Benchers have. For instance, I wonder whether the hon. Member for North East Bedfordshire (Richard Fuller) would agree with the Prime Minister when he said:

“We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business.”

We agree with the Prime Minister on that point, but I just wonder whether everyone on the Conservative Benches does. I am reading some of their faces and I think the answer is clear. Could it be that the Prime Minister lacks support from prominent Back Benchers within his own party on a policy he is now championing? Surely not. But Treasury Ministers should rest assured that if their Back Benchers pull any tricks on clause 21, they will have our support for it to pass.

Finance Bill

Debate between Baroness Winterton of Doncaster and James Murray

2nd reading
Wednesday 13th December 2023 Commons Chamber

[James Murray]

I thank my hon. Friend for her intervention on that point, and we will certainly raise questions on her behalf in Committee to try to get clarity from the Government. As she rightly points out, clarity and certainty have been distinctly lacking from this Government over a whole range of topics. We will certainly press them on that in Committee.

As I was saying in response to the hon. Member for Poole (Sir Robert Syms), we will not be opposing many of the individual measures in the Bill, including those on capital expensing, on research and development and on tax avoidance and evasion, but they all serve to remind us just how much of a merry-go-round this Government have become and just how much they lack a plan for the future. A plan for the future is what has been sorely missing from this Finance Bill and from the autumn statement, and it is clear that the Conservatives are now incapable of offering one. With no stability, no real certainty and no plan for growth that works, businesses are left without the partner in Government that they need, and without the growth that our economy needs, working people are left worse off, with the tax burden set to rise to a peacetime high.

If Labour wins the next general election, we will overhaul and accelerate the planning system, modernise our electricity grid, attract far greater private investment, scrap and replace business rates, set out a road map for business taxation and boost skills and training across the country. We will do all that to get the economy growing and to make working people better off. That is the change our country needs. Without change, we would have a fifth term of the Conservatives, and what on earth would that mean for Britain? What would the Conservatives speak of as their achievements in this Parliament? Twenty-five tax rises, the highest tax burden in eight decades, taxes up £1,200 per household and two decades of pay stagnation, as well as a fall in real household disposable incomes—the first time that has ever happened in a Parliament. That is the record of the Conservatives. That is what they cannot hide from and that is why it is time for change.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Treasury Committee.

National Insurance Contributions (Reduction in Rates) Bill

Debate between Baroness Winterton of Doncaster and James Murray

Committee of the whole House
Thursday 30th November 2023 Commons Chamber

[The First Deputy Chairman]

I call the shadow Minister.

[James Murray (Ealing North) (Lab/Co-op)]

As we made it clear on Second Reading, we will be supporting the measures that it includes, I thank the Minister for setting out the details of its clauses. As we heard, clauses 2 to 5 and the schedule to the Bill implement a reduction in the class 4 rate, a removal of the requirement to pay class 2 contributions and various transitional and consequential provisions.

I wish to ask the Minister some questions about how the measures in clause 1 will operate and what their overall impact will be. May I put it on record that, as ever, I am grateful to the Chartered Institute of Taxation for sharing its views with us on the clauses in this Bill?

Clause 1 makes it clear that the Bill’s measures will apply from 6 January 2024. Of course, we want people to benefit from these changes as quickly as possible given the pressures that families across Britain are facing right now. We recognise though that with the Government having left this policy change until late November to announce, there is not much time left for payroll software to get ready for 6 January. I would be grateful if the Minister could confirm whether HMRC accepts that some employers’ payroll software will not be ready in time for 6 January. If so, how many employers does he anticipate being affected? In such cases, employers would have to pass on the benefit of any changes to employees in subsequent months. I would be grateful if the Minister could confirm how many employees he expects will be affected by this delay, and how long he expects them to have to wait to receive the delayed benefits.

Furthermore, we understand that many operators in the retail sector have a moratorium on releasing new software updates in the November to January period, given what a busy time that is for them. I would be grateful if the Minister could confirm whether he is aware of that. If so, what meetings has he already had with retailers to discuss this point and, if so, what has the outcome of those meetings been?

[The First Deputy Chairman]

I call the SNP spokesperson.

National Insurance Contributions (Reduction in Rates) Bill

Debate between Baroness Winterton of Doncaster and James Murray

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.

Leasehold Reform

Debate between Baroness Winterton of Doncaster and James Murray

Tuesday 23rd May 2023 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

For nearly a decade before I was elected as the MP for Ealing North, I had the honour of serving in local and city-wide government in the capital, working every day to tackle the housing crisis. If my memory serves me correctly, when I was working for the Mayor of London, as his deputy mayor for housing, he responded to a Government consultation back in 2017 entitled “Tackling unfair practices in the leasehold market”. I looked at that consultation document this morning and noticed that its introduction cited the right hon. Member for Bromsgrove (Sajid Javid), the then Secretary of State for Communities and Local Government, as having said:

“I don’t see how we can look the other way while these practically feudal practices persist”.

Two years later, following more consultation, the 2019 Conservative manifesto included a commitment to continue reform of the leasehold system. Three years after that, the latest Housing Secretary said that he would

“end the absurd, feudal system of leasehold, which restricts people’s rights”.—[Official Report, 9 June 2022; Vol. 715, c. 978.]

The current Secretary of State for Housing, Communities and Local Government seemed finally to be on course to do something at the start of this year, confirming that the Government would “absolutely” abolish the feudal system of leasehold and bring forward legislation shortly. Yet here we are, in May 2023, with the Conservatives apparently abandoning their promises to leaseholders. That is why, today, we will be voting to make the Secretary of State keep his promise.

I know the impact that the current system of leasehold can have on people, both as a former leaseholder myself and, crucially, from the experiences of the people I represent. Since I was first elected in 2019, I have been contacted by email, phone, in my advice surgery and on the street by leaseholders from all parts of my constituency to talk about the challenges they face. Let me mention just a few of my constituents here today. I draw the Minister’s attention to leaseholders at Oaklands on Argyle Road. They are facing the prospect of the freeholder adding another storey to their building without any meaningful consultation and despite issues of subsidence in the block.

Meanwhile, leaseholders at Chartwell Close in Greenford have reported great difficulties, costs and a lack of information from the freeholder when trying to exercise their right to manage. Leaseholders at Bridgepoint House, right opposite my constituency office, continue to face a very challenging time with all those involved in owning, building and managing their block as they try to remedy fire safety concerns.

Those are just a few examples of the many people I represent who live in private leasehold flats, and who far too often lack control over, or even a say in, what happens to the place in which they live. That is why I will be glad to vote for our motion today, to press the Government to end the sale of new private leasehold houses, to introduce a workable system to replace private leasehold flats with commonhold, and to enact the Law Commission’s recommendations on enfranchisement, commonhold and the right to manage in full.

The truth is that having security in our own home is a fundamental need for people and families in whatever tenure they live. The impact of leasehold means that, even when people are able to buy a home, which should bring that security, that basic desire for real security is often stymied by a feudal system of ownership. We might have thought—as, indeed, leaseholders across the country might have thought—that when Conservative Ministers said that they did not see how

“we can look the other way while these practically feudal practices persist”,

change was coming. We might have thought that change was coming when Conservative Ministers said that we should, “end the absurd, feudal system of leasehold, which restricts people’s rights”. But after years of opportunities to act, they have proven themselves simply unable to tackle the long-term challenges we face.

The truth is that the Conservatives in Government cannot tackle the long-term challenges we face; they have become a long-term challenge themselves. It is time to do the right thing, to follow Labour’s lead and to give people the security that they need and deserve.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now come to the wind-ups. I am sure that Members who have spoken in the debate will be arriving in the Chamber any minute now. As we have said on a number of occasions, it is important for them to be here for the wind-ups of both the Opposition and the Minister. I call the shadow Minister.

Finance (No. 2) Bill

Debate between Baroness Winterton of Doncaster and James Murray

Committee of the whole House
Tuesday 18th April 2023 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I call the shadow Minister.

[James Murray (Ealing North) (Lab/Co-op)]

Thank you, Dame Rosie, for the opportunity to respond on behalf of the Opposition. I would like to speak to the amendments and new clauses in my name and that of my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare).

When we debated this Bill’s Second Reading at end of last month, we made it clear that what we needed was a plan to get us out of what the previous Chancellor rightly called a “vicious cycle of stagnation”. We need a plan for growth—a plan to raise the living standards of everyone in every part of the country—but this Government have failed to offer us one. That much was clear from the data published alongside the Budget, which showed that ours is the only G7 economy forecast to shrink this year and that our long-term growth forecasts were downgraded in the Office for Budget Responsibility report.

Since we last debated this Bill, further data has been published confirming our fears. Earlier this month, a report from the International Monetary Fund put the UK’s growth prospects this year at the bottom of those of the G20 biggest economies—a group that includes sanctions-hit Russia. After 13 years of economic failure, people and businesses across the UK deserve so much better than that. They deserve a plan for the economy that offers more than managed decline. So today, we begin by looking at some of the measures the Government are seeking to introduce in this Bill and explaining why their approach is letting Britain down.

First, let me speak to clauses 5 to 15, which address the rate of corporation tax, capital allowances and other reliefs relating to businesses. On those, one thing prized above all else is the need for certainty and stability. Businesses across the country want stability, certainty and a long-term plan, yet under the Conservatives corporation tax has changed almost every year since 2010. Furthermore, as the Resolution Foundation has pointed out, the introduction of the latest temporary regime for corporation tax represents the fifth major change in just two years. It seems that the Conservatives are simply incapable of offering stability.

Let us start by looking at the main rate of corporation tax, which clause 5 sets at 25% for the financial year beginning in April 2024. The clause will mean that corporation tax will continue to be charged at the rate to which it rose at the start of this month. That rate, 25%, was first announced by the Prime Minister, when he was Chancellor, in his spring Budget 2021. One might think that sounds like a rare example of certainty, but, sadly, that is not the case. As we know, last September, the then Chancellor, the one who said our economy was trapped in a “vicious cycle of stagnation”, announced that the rise to 25% would be cancelled, leaving the rate at 19%. That was of course reversed just a month later, when the current Chancellor moved into No. 11, and confirmed that the rise to 25% was back on. So much for stability! But we are where we are, and if we are to assume that the current Chancellor’s plans will indeed go ahead—a bold assumption, I admit—the rise to 25% will now continue from April 2024.

With the rate of corporation tax being increased, it is particularly important to get capital allowances right. The Government should be focused on giving businesses certainty that will help them to plan and increase their investment in the UK economy. We need that certainty and greater investment—the UK currently has the lowest investment as a percentage of GDP in the G7—yet the approach in clause 7 is to introduce temporary full expensing for expenditure on plant and machinery for three years only. By making that change temporary, it only brings forward investment, rather than increasing its level overall. The Government’s own policy paper on this measure, published on the day of the Budget, makes that clear. It says:

“This measure will incentivise businesses to bring forward investment to benefit from the tax relief.”

As the Office for Budget Responsibility has made clear, the Government’s approach will mean that business investment between 2022 and 2028 is essentially unchanged as a result of these measures. If anything, there is a very slight fall. Britain deserves better than this. As Paul Johnson of the Institute for Fiscal Studies said in response to this temporary tweak to the tax regime for businesses:

“There’s no stability, no certainty, and no sense of a wider plan.”

That is why we have tabled new clause 3, which would require the Chancellor to follow Labour’s lead by developing a wider plan for business taxes, which we believe is needed. As my right hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chancellor has set out—

Point of Order

Debate between Baroness Winterton of Doncaster and James Murray

Thursday 9th February 2023 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

On a point of order, Madam Deputy Speaker. I would like to raise two points, about which I have given notice to both the Speaker’s Office and to the hon. Member to whom I will refer.

First, on 30 January the Financial Secretary to the Treasury, the hon. Member for Louth and Horncastle (Victoria Atkins), responded to my written parliamentary question 131454 by directing me toward a previous freedom of information request. However, my office, the House of Commons Library and the Table Office have all been unable to trace this FOI reference, which is not in a recognisable format. I understand that the House authorities are consulting with the Treasury to investigate this further.

Secondly, on 17 January I took part in a debate on the Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2022, the sole purpose of which is to set a variable in the formula used to calculate the small business non-domestic rating multiplier for the coming year. I asked the Financial Secretary three times to clarify why this variable was increasing. I checked her final answer with the House of Commons Library, which said it did not think what the Minister said was “entirely accurate”.

Madam Deputy Speaker, I would be grateful for your advice, first, on whose responsibility it is to ensure that responses to written parliamentary questions are accurate; and secondly, on how the record can be corrected when a Minister inadvertently gives incorrect information in Committee?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am grateful to the hon. Member for giving notice of his point of order. On his first point, it is not acceptable for Ministers to provide answers referring to material that is not accessible. Answers should be free-standing or at least refer to material that can be accessed relatively easily.

On the hon. Member’s second point, Ministers and other Members, especially Opposition Front Benchers, sometimes take a different view about whether or not a response is accurate, and the Speaker cannot arbitrate about such differences. Ministers are obviously responsible for their answers. However, if a Minister accepts that a mistake has been made, they should correct the record. That is required of them by both the ministerial code and a resolution of this House. If the Minister does not accept that a correction is required, I am sure the hon. Member will find ways of pursuing his points in any event.

The hon. Member is very lucky that the Leader of the House is here and will have heard his comments, and I am sure she will take them back for consideration. I hope that any other Ministers this will be fed back to will have heard my response to the two issues, and I hope that they will help provide a more useful answer in the first instance and reflect on whether a correction is required in the second instance. As I say, the Leader of the House will have heard that as well.

NHS Workforce

Debate between Baroness Winterton of Doncaster and James Murray

Tuesday 6th December 2022 Commons Chamber

[James Murray]

I thank the hon. Gentleman for his intervention. I have set out that scrapping the non-dom status would raise £3.2 billion, and that our workforce expansion plan would cost £1.6 billion, so we would be well able to afford that measure from the amount of money that we have raised from scrapping this outdated, unfair tax loophole.

Non-dom status should have no place in our modern tax system. It is unfair. When the Government are making working people pay more tax, it is simply wrong to allow wealthy people with overseas income to continue to benefit from an outdated tax break. It is also bad for UK business: the loophole prevents non-doms from being able to invest their foreign income in the UK, as bringing it here means it becomes liable for UK tax. Abolishing non-dom status would end that barrier to UK investment—and, as I have said, raise £3.2 billion, money we would use to put towards priorities including expanding the NHS workforce.

To be honest, we would have thought abolishing non-dom status, replacing it with a modern system and using the money to strengthen the NHS and economy would be a no-brainer. What is it about this Conservative Government, led by the right hon. Member for Richmond (Yorks) (Rishi Sunak), that makes them so reluctant to close that loophole? Last week, during the rushed debates on the Government’s autumn Finance Bill, I asked Treasury Ministers to confirm whether the Prime Minister had been consulted on the option of abolishing non-dom status and whether it was ever considered as an option for last week’s Finance bill. I also asked whether, when the current Prime Minister was Chancellor, he had ever recused himself from discussions on the matter, for obvious reasons.

I put these questions to Treasury Ministers on three separate occasions last week, but they refused each time even to acknowledge the questions, never mind answer them. For a Minister to overlook a set of questions once might be an oversight, but to ignore them three times looks like something else. Perhaps the Minister will today show that they have nothing to hide by answering the questions I have raised.

In the autumn statement and last week’s Finance Bill, the Chancellor chose to leave non-dom status untouched, while picking the pockets of working people, including nurses, with stealth taxes such as freezing income tax thresholds and pushing up council tax. Today, the Secretary of State for Health only mounted a brief defence of non-dom status; I wonder whether his colleague from the Treasury will, in her closing remarks, repeat some of the defences that Treasury Ministers tried to set out last week.

Last week, Ministers tied themselves in knots trying to find a justification for the £3.2 billion tax break for non-doms. They tried to pretend that the Government's investment relief is working, when only 1% of non-doms invest their overseas income in the UK in any given year, and last week they tried to win praise for ending permanent non-dom status, while keeping quiet about the new loophole they created, which allows people to use trusts to retain non-dom benefits permanently.

The truth is that, unless the Conservatives vote with us today to abolish non-dom status once and for all, the British people will be clear that no amount of reason or common sense will get this Government to come round. The British people need a fresh start and a new Labour Government that would take those fairer choices on tax to support the stronger NHS we so desperately need.

The NHS is an achievement we share together as a country and one that we all have a personal relationship with. We all want to know that when we have medical symptoms, concerns or needs, the NHS will be there for us. We want to know it will be there as a publicly funded service, free at the point of use, able to provide us with the high-quality help we need. That is what I wanted to know in my early 20s, when I started to notice symptoms of what would later be diagnosed as myasthenia gravis, a rare neurological condition that caused muscle weakness throughout my body.

After the best care I could have hoped for from my brilliant consultant and his team and colleagues at the National Hospital for Neurology and Neurosurgery in Queen Square, I have been symptom-free for many years now, but the memory of first feeling those symptoms and then finding my way towards the right treatment sticks with me. I would never want anyone to feel symptoms like mine and not be sure whether the NHS would be there to help.

We all know stories like that. We all need the NHS to diagnose and treat us when we are worried. We all need to be able to turn to the NHS so that we get that treatment in good time. We all connect with the NHS through our own lives and the lives of our family and friends. That is why the NHS matters so much to us all and why we are so determined to deal with the crisis the NHS is facing and to make sure it is ready for the modern challenges we face.

At the heart of our vision for the country are stronger public services and stronger economic growth. We know that getting public services back on track will support a growing economy, which will in turn support modern, sustainable public services. Before us today we have a chance to end the unfair 200-year-old tax loophole, which lets a small number of people avoid tax on overseas income, and use the money saved to fund one of the biggest workforce expansion plans in the history of the NHS. That is the choice in front of us today, and I urge all MPs to do the right thing by backing our plan.

Royal Assent

[Madam Deputy Speaker (Dame Rosie Winterton)]

I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Acts:

Identity and Language (Northern Ireland) Act 2022

Product Security and Telecommunications Infrastructure Act 2022

Counsellors of State Act 2022

Northern Ireland (Executive Formation etc) Act 2022

Finance Bill

Debate between Baroness Winterton of Doncaster and James Murray

Committee stage
Wednesday 30th November 2022 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I call the shadow Minister.

[James Murray (Ealing North) (Lab/Co-op)]

Thank you, Madam Deputy Speaker, for this opportunity to consider the details of the Bill and speak to the amendments and new clauses in my name and that of my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare).

As we have heard from the Minister, the first three clauses of the Bill relate to the energy, oil and gas profits levy—or, as everyone in the country apart from Conservative Ministers calls it, the windfall tax. It has been a painful journey to get this windfall tax on the statute book. As I set out on Second Reading, it took five months for the Government to finally support the principle of a windfall tax after my right hon. Friend the Member for Leeds West (Rachel Reeves) first called on them to introduce one in January this year.

The current Prime Minister, who was Chancellor at the time, was dragged kicking and screaming into introducing a windfall tax before the summer, but even then he decided to couple it with a massive tax break for oil and gas giants. We do not believe it is right to let that large untargeted and unnecessary tax break continue. It is a tax break that the current Prime Minister introduced and that has left some oil and gas giants paying no windfall tax at all this year. That is why we have been pressing the Conservatives to remove that loophole.

We have also pressed the Government to strengthen the windfall tax by raising its rate from 25% to 38%, a move that would align the overall rate with the taxation of oil and gas profits in Norway. We have also pressed them to extend its period of impact by backdating it to January 2022, the month when the shadow Chancellor first proposed it, and by extending it to 2027-28. We therefore welcome at least some strengthening of the windfall tax in clause 1, which increases its rate to 35%, and clause 3, which extends the period it affects to the end of 2027-28. These clauses do not go as far as we have proposed. They fall short of our plans to increase the rate of the windfall tax to 38% and to backdate it to January 2022, but they do confirm a frequent and recurring pattern when it comes to the windfall tax: Labour leads with the ideas while the Tories object, only ultimately to be dragged kicking and screaming into a U-turn.

Clause 2 highlights one respect in which the Government are still resisting following our lead. In that clause, they have made changes to the rate at which additional investment expenditure is calculated. As the explanatory notes make clear, this rate has been carefully set to

“maintain the overall cumulative value of relief for investment expenditure”.

Let us be clear what this means. The rate of the windfall tax might be going up, but the Government are making sure that the tax break for oil and gas giants is safe. As we see time and again, even when the Government are forced to legislate on a windfall tax, they cannot bring themselves to do it properly.

It is for this reason that we have tabled new clause 2, which would require the Chancellor to publish an assessment of the revenue that is estimated to be generated by the windfall tax and show how much more it would raise if it were backdated to January 2022, if it were increased to 38% and if the additional investment expenditure were reduced to zero—a move that would remove at least some of the oil and gas giants’ tax break. We urge hon. and right hon. Members from all parts of the Committee to support this new clause and help us to push the Government for a stronger and more effective windfall tax that no longer includes such a huge giveaway to the oil and gas giants.

Clause 4 of the Bill concerns tax relief for expenditure on research and development. As we have heard from the Minister, the clause reduces the additional deduction for R&D costs incurred by small and medium-sized enterprises and reduces the rate at which qualifying losses can be surrendered by such companies. At the same time, it increases the rate of R&D expenditure credit, which is mainly claimed by large companies. On this side of the House, we recognise the need to support R&D as a crucial part of driving growth in our economy. It is critical for the Government to have in place a system of R&D tax relief that is effective, that provides as much certainty as possible for businesses to make the investments that our economy so badly needs, and that provides crucial support to key growth sectors in the UK.

Finance Bill

Debate between Baroness Winterton of Doncaster and James Murray

2nd reading
Monday 28th November 2022 Commons Chamber

[James Murray]

I thank my hon. Friend for her contribution. She is a great advocate for investment in skills training and making sure that young people have opportunities in the decade ahead, which they have been denied in the last decade under this Conservative Government. The points she makes fit well within a wider plan for growth, which is at the heart of what Labour Members are proposing and pushing the Government to adopt.

That plan is wide ranging. It covers business rates being replaced with a fairer system that makes sure that high street businesses no longer have one hand tied behind their back. It relies on us implementing a modern industrial strategy to support an active partnership of government working hand in hand with businesses to succeed. Labour’s start-up reforms will help to make Britain the best place to start and grow a new business. Small businesses will benefit from our action on late payments and we will give businesses the flexibility they need to upskill their workforce. As I mentioned, we will fix holes in the Brexit deal so our businesses can export more abroad. Crucially, our green prosperity plan will create jobs across the country, from the plumbers and builders needed to insulate homes, to engineers and operators for nuclear and wind. We will invest in the industries of the future and the skills people need to be part of them. That is what a plan for growth should look like. As John Allan, the chair of Tesco, said recently, when it comes to growth, Labour are the

“only…team on the field.”

The truth is that the need for an effective plan for growth has exposed the emptiness and exhaustion of the Conservative party. All we have to show from 12 years of Cameron, May and Johnson is chronic economic stagnation.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Gentleman knows that he should not refer to existing colleagues by name.

[James Murray]

I apologise, Madam Deputy Speaker. All we have to show from those three former Conservative Prime Ministers in the last 12 years is chronic economic stagnation. This autumn, the Conservatives tried desperately to make their economic strategy work, but their decisions crashed the economy, imposed a Tory mortgage premium, put pensions in peril and trashed our reputation around the world. Now they are trying again. We face tax hikes on working people, the biggest drop in living standards on record and growth still languishing at the bottom of the league. It seems that Conservative MPs are beginning to realise they have come to the end of the road and their time is up. In a timely echo of the popular TV show, hon. Members from Bishop Auckland to South West Devon are declaring: “I’m a Tory, get me out of here.” It seems the Conservative party is finally beginning to realise what the rest of us already know: the Tories are out of time and out of ideas, and Britain would be better off if they were out of office.

Our amendment makes it clear that, although Ministers have been dragged, kicking and screaming, into action on oil and gas giants’ windfall tax, this Finance Bill fundamentally fails the UK economy and comes from a Government holding the British people back. Be in no doubt: the mess we are in is the result of 12 years of Conservative economic failure. With this Bill, they are loading the cost of their failure on to working people. The Government still have no plan to grow the economy and to stop the fall in living standards that is filling people across the country with dread. We need a Government with a plan to get our economy out of this doom loop, to support businesses to grow and to raise living standards again. We simply cannot afford another decade of the Conservatives. Now is time for change, now is the time for them to get out of the way, now is the time to let Britain succeed.

Health and Social Care Levy (Repeal) Bill

Debate between Baroness Winterton of Doncaster and James Murray

Committee stage
Tuesday 11th October 2022 Commons Chamber

[James Murray]

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

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to consider new clause 2—Assessment of revenue effects on health and social care of increases in the rates of taxes on dividend and capital gains income—

‘The Treasury must lay before the House of Commons within 30 days of the date on which this Act is passed an assessment of the merits of raising at least the same amount of revenue for health and social care as would have been raised by the health and social care levy by instead bringing the rates of taxation on dividends and capital gains income in line with existing rates of taxation of earnings.’

This new clause would require the Treasury to report on an alternative to using the health and social care levy to fund health and social care, by raising more tax revenue from dividends and capital gains.

Schedule stand part.

[James Murray]

We know that the Bill is straightforward in what it seeks to achieve: as clause 1 sets out, it simply repeals the Health and Social Care Levy Act 2021. Ministers are asking us today to overturn a piece of legislation that they and their colleagues strained to defend and voted in favour of a little over a year ago.

As I set out on Second Reading, we welcome Ministers scrapping the tax rise on working people introduced by last year’s Act, but while the levy was not due to come in until April 2023, and the Bill means that the levy will never be charged, the Act also raised national insurance contributions for the current financial year 2022-23 as a transitional measure. As clause 2 confirms, the Bill keeps national insurance contributions at that higher level for the first seven months of this year, before letting them return to their previous levels from November. The decision by Ministers to scrap the national insurance rise is, of course, better to have come late than never, but this in-year change means that yet another cost will be paid for through working people’s taxes, as public money pays to undo the mess created by the Tories having made the wrong call last year. The explanatory notes to the Bill confirm that there will be a cost of an in-year change. Under “Financial implications of the Bill”, they state:

“HMRC anticipates increased call volumes and customer contact as a result of the in-year reduction of NICs rates. There will be delivery costs in implementing this policy. IT changes will be required to be delivered at additional cost to HMRC, to support safe delivery of this policy.”

All this could have been avoided if Ministers had simply listened to people across the country, to the Opposition, to Members on their own side, to the Federation of Small Businesses, the British Chambers of Commerce, the CBI, the TUC and so many others. If Ministers had listened, they would have realised that it was wrong to go ahead with this tax rise on working people in the first place. While we know that the U-turn before us will cost more than if Ministers had made the right call last year, we do not have a figure from the explanatory notes for exactly how much this will cost. On that point, the Bill’s notes simply say that

“Costings will be set out in due course.”

In other times, I might have read that statement and concluded that Ministers genuinely do not know the costings, but if their behaviour over the OBR report is anything to go by, it could be that they are simply refusing to publish those costings for political reasons.

It is because of this Government’s lack of willingness to subject themselves to transparent scrutiny that we have tabled new clause 1. New clause 1 would require the Chancellor to publish a report on the financial implications of the Act on the day that it comes into force. That report must make an assessment of the Treasury’s plans to raise an amount of revenue equivalent to the proceeds of the levy in the context of its approach to general taxation and borrowing.

As I mentioned on Second Reading, the Economic Secretary to the Treasury confirmed in a letter sent to the shadow Chancellor and the shadow Secretary of State for Health and Social Care on 22 September that:

“The additional funding used to replace the expected revenue from the Levy will come from general taxation and may require further borrowing in the short-term.”

We already know that borrowing is set to soar thanks to the Government’s disastrous and discredited approach to the economy. We know that their approach has inflicted huge harm on our economy, damaged our international standing and pushed up mortgage payments for households across the country. We know in particular that the Government’s failure to publish the OBR report showing the detail behind their approach has aggravated the spooking effect on markets. Through our new clause, we would require the Government to explain how they will maintain the funding equivalent to the levy, given their wider reckless decisions on borrowing and the economy.

New clause 1 refers to general taxation. As Members may recall, when they announced the health and social care levy last year, the former Prime Minister and Chancellor explained that, alongside the national insurance increase, the Government would also increase taxes on income from dividends at the same time. On 7 September last year, the previous Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), said:

“because we are also increasing dividends tax rates, we will be asking better-off business owners and investors to make a fair contribution too.”—[Official Report, 7 September 2021; Vol. 700, c. 154.]

The question arises of why the current Prime Minister and Chancellor have decided to cut this tax rate from April 2023. They do not need to scrap the dividends tax rise as part of the repeal of the Health and Social Care Levy Act—the dividend rate does not appear in that Act—but they have none the less committed to doing so. I would be grateful if the Minister could set out whether he agrees with the former Prime Minister’s argument that having a higher tax rate on dividends means asking better-off people to make a fair contribution. If so, can he confirm why the Government have decided that it is the right time to cut taxes for those who are better off, even if that means greater borrowing funded by all taxpayers?

As I have made clear throughout, we are glad that the Government are using the Bill to finally scrap this tax rise on working people, but it is clear that taxpayers will pay yet again to fix the mess the Tories have created, that Ministers are planning to again cut taxes for those they have described as the better-off and that this Government are desperate to avoid scrutiny of their plans. It is with that final point in mind that we ask Conservative Members who are uncomfortable with their Government’s approach to join us in supporting new clause 1.

Our new clause would simply require the Treasury to be transparent about how it will replace the money for health and social care that will no longer accrue from the health and social care levy, in the context of its wider approach to taxation, borrowing and the economy. As we have heard throughout the day in Parliament, there is widespread concern that the Government’s plans do not add up and that their lack of transparency is making matters worse. Our new clause makes clear to Ministers that this must change.

National Insurance Contributions (Increase of Thresholds) Bill

Debate between Baroness Winterton of Doncaster and James Murray

2nd reading
Thursday 24th March 2022 Commons Chamber

[James Murray]

I am going to make some progress.

Perhaps the most desperate part of the Chancellor’s pitch yesterday was his claim that “the work starts today”. The Conservatives have been in power for 12 years: 12 years of incomes being squeezed under Conservative Governments, 12 years of failure on energy efficiency and 12 years of low growth. The truth is that, even now, when he is apparently “starting work”, the man who lost £11.8 billion of public money to fraud has once again proved that he is not up to the task.

This week, the Chancellor failed to scrap the tax rise on working people. He failed to introduce a windfall tax, and he failed to set out a plan to support British businesses. People deserve better. People need a Government who are on their side.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Richard Drax.

National Insurance Contributions Increase

Debate between Baroness Winterton of Doncaster and James Murray

Tuesday 8th March 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Today, we have heard from hon. Members representing people across the country about why it is so important that the Government cancel their national insurance hike on working people and their jobs. My hon. Friends the Members for Merthyr Tydfil and Rhymney (Gerald Jones), for Easington (Grahame Morris), for Vauxhall (Florence Eshalomi), for Ellesmere Port and Neston (Justin Madders), for Cynon Valley (Beth Winter), for Birkenhead (Mick Whitley) and for Liverpool, Riverside (Kim Johnson) all spoke powerfully about how so many of their constituents are struggling with the costs of living and how those pressures have been rising rapidly in recent months. My hon. Friends the Members for Sheffield South East (Mr Betts), for Salford and Eccles (Rebecca Long Bailey) and for Luton South (Rachel Hopkins) spoke about the fundamental unfairness of the Government’s approach with their national insurance hike.

In September last year, the Government pushed their national insurance hike through Parliament in a day. From the very start, it was clear that this was a deeply unfair tax hike that would hit working people and their jobs. We urged the Government to think again and reverse course, but they refused do so, and they have kept refusing to reverse course, despite people facing mounting difficulties in making ends meet. Inflation, already at its highest rate in decades, is forecast to hit 8% in April. Energy bills that have been rising rapidly are set to soar next month, and now the crisis in Ukraine will bring even greater pressure on the cost of energy, petrol and food. Yet in four weeks’ time, the Government’s tax rise will kick in, costing the average family £500 a year. It is the worst possible tax rise at the worst possible time.

Back in September when the Government pushed this tax rise through Parliament, we immediately knew how unfair it would be. The Government’s own published assessment of this tax rise made that clear. Their tax information and impact note, which Ministers had to approve, set out what effect this tax rise would have. The note looked at this tax rise from a number of angles, including how it performed against the Government’s so-called family test. As hon. Members may remember, the family test was introduced by David Cameron in 2014. When the then Prime Minister announced this new test, he said he wanted to

“strengthen and support family life in Britain”.

His plan to do so was to make sure that

“every single domestic policy that government comes up with will be examined for its impact on the family.”

That test was applied to the national insurance increase last September, and the outcome of that test was to warn of

“an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

That warning alone should have given Conservative MPs reason to stop in their tracks and think again. They should have stopped and listened to the Institute for Fiscal Studies warning of this tax rise involving

“a large, unjustified and problematic bias against employment and labour incomes”.

They should have listened to the TUC general secretary, Frances O’Grady, warning of the hit faced by young and low-paid workers with this tax rise. They could have listened to any of the many voices against their plans, as the impact of this tax rise on people’s ability to make ends meet was clear back in September.

The impact on jobs and businesses was clear then, too. Again, the Government’s own assessment made that clear. It admitted the tax rise would impact on business decisions on wage bills and recruitment. The Federation of Small Businesses described the tax rise as

“devastating for small businesses and the local communities they serve.”

The British Chambers of Commerce described it as a

“hammer blow to jobs growth”.

Despite all those warnings, the Prime Minister and the Chancellor refused to think again. The Conservatives refused to listen to our calls for those with the broadest shoulders to contribute more. Their response to the low-growth, high-tax economic cycle they have created was to make working people foot the bill.

Even if some Conservative Members managed to hold their noses and vote with the Prime Minister and the Chancellor last September, it is astonishing that they still feel able to do so after all that has happened since then. Energy bills have been rising fast and now are set to soar. We know that energy bills will rise by an average of more than £600 this April. Inflation is already—[Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I said this a few minutes ago but as I have a larger audience I think it is worth repeating. We have been having a debate, the shadow Minister and the Minister are responding to that debate, and hon. and right hon. Members want to hear what they have to say. I hope those present will do them the courtesy of being quiet, so we can listen to the shadow Minister first and then the Minister.

[James Murray]

Thank you, Madam Deputy Speaker. As I said, if Conservative Members managed to hold their noses last September to vote with the Prime Minister and the Chancellor, it is truly astonishing that they still feel able to do so now after all that has happened. Energy bills have been rising fast and are set to rise by more than £600 in April. Inflation is at its highest rate in decades and is set to rocket to 8% next month.

What is more, the Government’s arguments that they need this money for social care have been left in tatters. Not only have they failed to produce a plan to fix social care, but we know that Ministers looked the other way as billions of pounds of public money were handed out to fraudsters and written off. They ignored the warnings on fraud, they were careless with waste and they are now expecting working people to foot the bill for their mistakes.

If that was not bad enough, it is now clear that private sector workers will be asked to pay twice. As our new analysis shows, private sector workers will face a double whammy as almost all the rise in their employers’ contributions is set to be passed on to workers through lower wages.

Ministers, and indeed some of their Back Benchers, often try to pretend that the cost of living crisis is entirely the result of global factors, but that argument simply does not hold true. Most damagingly, it ignores the fact that the Government could, and should, be doing far more to help people to make ends meet. The truth is that decisions by this Government over many years have left us uniquely exposed to rising gas prices. From cutting gas storage, to leaving our homes poorly insulated and failing to invest in renewables and nuclear, this Government’s approach means that rising energy costs hit people in the UK much harder than they should.

The truth is that the Government have failed to step up and offer people the help they need with energy bills now. Labour’s plan is to give everyone £200 and those in greatest need £600 to help to meet energy costs. That would be funded with a one-off windfall tax on North sea oil and gas producers’ profits. The alternative from the Chancellor is to land everyone with a buy now, pay later loan and to announce a council tax rebate that some of those in the greatest need will never even see.

The truth is that, when it comes to the tax rise we are debating today—an unfair tax rise on working people, a tax rise of £500 for the average family, a tax rise on businesses and jobs—the responsibility begins and ends here. Conservative MPs voted six months ago for that tax rise. Last week, the Minister admitted to me that the Government recognise the impact the tax rise will have on working people. Today, they have a chance to change course.

Today, we are asking all Members to join us in asking the Government to think again. When the Government first introduced this tax rise on working people and their jobs, it was blindingly unfair. Far from asking those with the broadest shoulders to contribute more, the Tories showed their true colours and went straight for a tax rise on 27 million working people. Since then, the case against the tax rise has got stronger and stronger. With energy bills rising and about to soar and with inflation set to hit 8%, the struggle for millions of people to make ends meet is getting harder by the day. Now is the time to change course and help people to face the tough months ahead. Now is the time to send a message to the Chancellor ahead of his Budget on 23 March. Now is finally the time to do the right thing and cancel this unfair tax rise.

Health and Social Care Levy Bill

Debate between Baroness Winterton of Doncaster and James Murray

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The hon. Gentleman is experienced enough to know that he should not speak directly to another Member.

[James Murray]

The hon. Member for South Thanet (Craig Mackinlay) knows full well that his question is not relevant to this discussion. We are talking about the NHS and the social care system, and we need reassurance from Ministers that they will not entertain a two-tier healthcare system on the back of comments made by Conservative Members.

We need to transform social care into the service that people want, need and deserve, which is why our plan for social care would include: enshrining the principle of home first; making a fundamental shift in the focus of support towards prevention and early intervention; getting care workers the pay, terms and conditions they deserve—at the very least, a real living wage of £10 an hour—while transforming training to improve the quality of care; and, crucially, making sure that England’s 11 million unpaid family carers get proper information, advice, breaks and the workplace flexibility they need to balance work and caring responsibilities.

Of course, today we are not discussing how to transform social care. We are debating a Bill that introduces a tax rise that may never go towards helping social care, and one that is raised on the backs of working people and businesses that are creating jobs.

National Insurance Contributions Bill

Debate between Baroness Winterton of Doncaster and James Murray

3rd reading
Monday 6th September 2021 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

I am grateful for the opportunity to speak on Report on behalf of the Opposition. As we have made clear throughout the passage of this legislation through the House, we will not oppose the Bill. We have, however, used the opportunity of the debates we have had so far to raise important questions with Ministers about some of the approaches they have decided to take.

As we know, clauses 1 to 5 introduce a new zero rate of secondary class 1 national insurance contributions for employers who take on employees in a freeport. The zero rate will apply from April 2022 and allow employers to claim relief on the earnings of eligible employees of up to £25,000 per year for three years. Clauses 6 and 7 also introduce a new zero rate of secondary class 1 national insurance contributions, in this case for employers of armed forces veterans.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. It is important to address the amendments before the House at this point. We will have the Third Reading debate later.

[James Murray]

Thank you, Madam Deputy Speaker. I shall briefly address the amendments we have been discussing as they relate to veterans’ employers’ national insurance relief. As we made clear on Second Reading and in Committee, this is a vital issue. Veterans deserve the Government’s full support as they seek civilian employment after their service to our country. The Minister may remember that on Second Reading and in Committee I asked him and his colleagues to explain why the employers’ relief for veterans is for 12 months—much less than the three years of relief for employers in freeports that the Bill also introduces.

Afghanistan: FCDO Update

Debate between Baroness Winterton of Doncaster and James Murray

Monday 6th September 2021 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. If we have very short questions and short answers, we will possibly get through everybody.

[James Murray (Ealing North) (Lab/Co-op)]

As of this morning, I had received urgent, heartbreaking pleas from 289 constituents of mine about well over 1,500 of their loved ones desperate to get out of Afghanistan. My team and I have been doing everything we can to help, but we need the Government to respond and to be clear about what options people might have. Can the Secretary of State make it clear whether the response the Prime Minister promised today will include a specific response to the inquiries that I and other MPs have raised, and can he confirm when the eligibility for the Afghan citizens’ resettlement scheme will be published?

Finance (No. 2) Bill

Debate between Baroness Winterton of Doncaster and James Murray

2nd reading
Tuesday 13th April 2021 Commons Chamber

[James Murray]

I have only a few moments. The hon. Gentleman may speak later.

We will vote for our amendment and against the Bill, to make it clear to people in our country that we understand that people need to be spared the Bill’s tax rises; that Amazon does not need any favours; that NHS workers deserve our support, that we need good new jobs in every region in the nation; that the economy will grow only through responsible investment; and that we need to fix social care, the climate emergency and the housing crisis. Above all, people in our country need a Government who are on their side, and it is absolutely clear from the choices that the Bill and their Budget make, and the problems that they choose to ignore, that this Government fail that test.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now go to the Chair of the Treasury Committee, Mel Stride.