Points of Order

Debate between Baroness Winterton of Doncaster and Jesse Norman

Wednesday 13th July 2022 Commons Chamber

[Madam Deputy Speaker]

I am grateful to the right hon. Member for Kingston upon Hull North (Dame Diana Johnson), the Chair of the Home Affairs Committee, for giving notice of her point of order. I am also grateful to the shadow Home Office Minister.

Mr Speaker has said repeatedly that Select Committee work is important, and that Ministers should do their best to facilitate it through timely appearances at evidence sessions. I share—as, I am sure, does Mr Speaker—the right hon. Lady’s frustration that her Committee’s evidence session has been cancelled at such short notice. I do not know the reasons that the Home Secretary has provided for the cancellation, so I will refrain from saying more now, other than that I hope, and I am sure Mr Speaker would hope, that the Home Secretary will very quickly provide an alternative date that is acceptable to the Committee, and that, again, I hope that those on the Treasury Bench will feed these points back through the relevant channels.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

On a point of order, Madam Deputy Speaker. As you know, the Government are at present in caretaker mode pending the election of a new Prime Minister. Is it your view that this caretaker mode extends to the Government’s interaction with Parliament? There are several pieces of potentially problematic—

--- Later in debate ---

[Madam Deputy Speaker]

May I ask the right hon. Gentleman to go back a bit? I was a little distracted.

[Jesse Norman]

I am so sorry, Madam Deputy Speaker; I apologise for my colleagues. Given that the Government are in caretaker mode, may I ask your advice on whether that extends to their interaction with Parliament? A series of potentially contentious pieces of legislation could be laid in the next few days, and I suggest that this may fall outside the remit of strictly attending to business in terms of the Government’s relationships with the House. I seek your clarification and guidance, Madam Deputy Speaker. I have in mind particularly the broadcasting or media Bill that covers the potential privatisation of Channel 4, which is a matter of great interest and some political controversy across the House.

[Madam Deputy Speaker]

I thank the right hon. Gentleman for his point of order. I gather that a similar point of order was made yesterday by the right hon. Member for Haltemprice and Howden (Mr Davis).

The scheduling of Government business is not a matter for the Chair; it is a matter for the Government. I suggest that the right hon. Gentleman might like to raise this point during business questions tomorrow, which would provide a forum in which he could question the Leader of the House about the points that he has made about what is happening to Government business at the moment.

Levelling Up

Debate between Baroness Winterton of Doncaster and Jesse Norman

Wednesday 2nd February 2022 Commons Chamber

[Jesse Norman (Hereford and South Herefordshire) (Con)]

The Secretary of State will know that Herefordshire has one of the smallest and sparsest populations and some of the lowest gross value added in this country. He will also know of my passion for the New Model Institute for Technology and Engineering, which promises to offer entirely new forms of learning and teaching, lower drop-out rates, lower levels of mental ill health, and much greater inclusiveness for young people in skills-based higher education—it is the small modular nuclear reactor of higher education. Will the Secretary of State encourage this model, and will he consider, call for and initiate a review of higher education in order to regenerate cities and towns across the UK?

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. It is important for Members to be very brief, because otherwise we will not get everyone in.

Exiting the European Union (Value Added Tax)

Debate between Baroness Winterton of Doncaster and Jesse Norman

Wednesday 3rd February 2021 Commons Chamber

[Jesse Norman]

It is very easy to overstate the complexity of the issues involved. In the cases that the right hon. Gentleman mentions, the Northern Irish partner has full access to the trader support service, and the Great British partner has a comprehensive amount of guidance online, so the two come together. Inevitably, people will take some time to get used to what is, after all, a change in the arrangements. He is right to pick up the point about the effectiveness of the TSS. I do not think there is a suggestion that the support that businesses have been given in terms of information is anything less than comprehensive.

The right hon. Member for East Antrim asked about do-it-yourself builders. I can confirm that no further information will be required from do-it-yourself house builders, who will file a single VAT return. Obviously, they will be subject to the same proof of payment as they would have been before. In general, the point of this scheme is that without it, they would not be able to deduct acquisition VAT as they could prior to the end of transition period. Through this scheme, they can continue to recover the same VAT as they could before, therefore it is thoroughly to be welcomed.

The right hon. Member for Orkney and Shetland (Mr Carmichael) asked about VAT RES. I am very sorry, but that was in the wrong debate. If he had held his horses, he could have raised that in the next debate, or he could have raised it—equally inappropriately—in the previous debate, which I see he was down to speak in. The good news is that my hon. Friend the Exchequer Secretary will address these issues comprehensively in the debate to follow.

On the issue of small exporters, exports are zero-rated in relation to the UK, and they are not the principal topic of the legislation that we are discussing. The right hon. Member for Orkney and Shetland will be aware that there are measures coming from the EU in July, as I understand it, in relation to these matters that will to some extent—we wait to see the detail—mirror the facilitations that have been put in place, and they will hopefully support exporters from his constituency into the EU.

My hon. Friend the Member for North West Durham (Mr Holden) again raised the question about jobs and revenue. He will see that the tax information impact note does not expect there to be a significant material difference with regard to these issues, but there might, of course, have been some impact had we not put the facilitations in place and therefore these preserve the status quo, and rightly so.

I have already touched on some of the issues relating to the confusion over VAT that was raised by the hon. Member for Strangford). As he knows, in relation to imports, we have the Trader Support Service and, in relation to exports, there is comprehensive guidance available for anyone seeking to export.

Question put and agreed to.

Resolved,

That the Value Added Tax (Miscellaneous Amendments to Acts of Parliament) (EU Exit) Regulations 2020 (S.I., 2020, No. 1312), dated 18 November 2020, a copy of which was laid before this House on 19 November, be approved.

Resolved,

That the Value Added Tax (Miscellaneous Amendments to the Value Added Tax Act 1994 and Revocation) (EU Exit) Regulations 2020 (S.I., 2020, No. 1544), dated 18 December 2020, a copy of which was laid before this House on 21 December, be approved.—(Jesse Norman.)

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am suspending the House for a few minutes to enable the necessary arrangements for the next business to be made.

Taxation (Post-transition Period) Bill

Debate between Baroness Winterton of Doncaster and Jesse Norman

Committee stage & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Wednesday 9th December 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

Dame Rosie, what a delight it is to see you in the Chair, metaphorically if not actually.

It is a measure of the wide gulf between the House’s professed intentions and its actual activities that we are about to wind up within a very few minutes, and nothing like to time, the scrutiny of the Bill in Committee. I thank those who have spoken. Let me do service on my part by keeping my remarks brief, although I will say that nothing could have surprised me more than that my hon. Friend the Member for Stone (Sir William Cash) will not be taking the opportunity to make a trivial two-hour speech.

The right hon. Member for Wolverhampton South East (Mr McFadden) said that somehow the Government were pretending there was no change. Of course, he then went on to say that nothing has changed. We are not pretending anything. We acknowledge that there is change and that is specifically why we have used the language we have of making the changes as easy and as frictionless as possible for all parties concerned.

The right hon. Gentleman raises concerns and questions about Northern Ireland. I remind him that the Trader Support Service, which was launched on 28 September, has 18,000 subscribers already. He asks us to publish guidance. I can tell him that guidance has been published already, on 26 October.

The hon. Member for Glasgow Central (Alison Thewliss) saw Brexit—rather helpfully—as an opportunity to return powers to Parliament. How right she was. That is why I am a supporter of the United Kingdom of Great Britain and Northern Ireland, and of the Parliament that stands at its centre. My hon. Friend the Member for Arundel and South Downs (Andrew Griffith) rightly said that it should be for the Bill to make matters as easy as possible. I agree with that. He pointed to the absolute game-changer in clause 7. I agree with that too.

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

I believe the right hon. Member for Wolverhampton South East may wish to withdraw his amendment.

Finance Bill

Debate between Baroness Winterton of Doncaster and Jesse Norman

Report stage & Report: 2nd sitting & Report: 2nd sitting: House of Commons
Thursday 2nd July 2020 Commons Chamber

[Jesse Norman]

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:

Government new clause 20—Protected pension age of members re-employed as a result of coronavirus.

Government new clause 21—Modifications of the statutory residence test in connection with coronavirus.

Government new clause 22—Future Fund: EIS and SEIS relief. Government new clause 23—Interest on unpaid tax in case of disaster etc of national significance.

Government new clause 24—Exceptional circumstances preventing disposal of interest in three year period.

Government new clause 25—HGV road user levy. Government new clause 32—Enterprise management incentives: disqualifying events. Government new schedule 1—Taxation of coronavirus support payments.

New clause 29—Review of impact of Act on poverty—

‘(1) The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on poverty and lay this before the House of Commons within six months of Royal Assent.

(2) This assessment must consider—

(a) the impact on absolute poverty,

(b) the impact on relative poverty, and

(c) whether such a study should in future be a regular duty of the Office for Budget Responsibility.’

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on poverty and consider whether the OBR should conduct such assessments as a regular duty.

New clause 10—Impact of provisions of the Act on child poverty—

‘(1) The Chancellor of the Exchequer must review the impact of the provisions of this Act on child poverty and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider the impact on—

(a) households at different levels of income,

(b) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,

(c) different parts of the United Kingdom and different regions of England, and

(d) levels of relative and absolute child poverty in the United Kingdom.

(3) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

and “regions of England” has the same meaning as that used by the Office for National Statistics.’

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on child poverty.

New clause 3—Review of changes to capital allowances—

‘(1) The Chancellor of the Exchequer must review the effect of the changes to chargeable gains with respect to corporate capital losses in this Act in each part of the United Kingdom and each region of England and lay a report of that review before the House of Commons within two months of the passing of this Act.

(2) A review under this section must consider the effects of the changes on—

(a) business investment

(b) employment, and

(c) productivity.

(3) A review under this section must consider the effects in the current and each of the subsequent four financial years.

(4) The review must also estimate the effects on the changes in the event of each of the following—

(a) the UK leaves the EU withdrawal transition period without a negotiated comprehensive free trade agreement,

(b) the UK leaves the EU withdrawal transition period with a negotiated agreement, and remains in the single market and customs union, or

(c) the UK leaves the EU withdrawal transition period with a negotiated comprehensive free trade agreement, and does not remain in the single market and customs union.

(5) The review must also estimate the effects on the changes if the UK signs a free trade agreement with the United States.

(6) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

and “regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause requires a review of the impact on investment, employment and productivity of the changes to chargeable gains with respect to corporate capital losses over time; in the event of a free trade agreement with the USA; and in the event of leaving the EU without a trade agreement, with an agreement to retain single market and customs union membership, or with a trade agreement that does not include single market and customs union membership.

New clause 6—General anti-abuse rule: review of effect on tax revenues—

‘(1) The Chancellor of the Exchequer must review the effects on tax revenues of section 99 and Schedule 14 and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) The review under sub-paragraph (1) must consider—

(a) the expected change in corporation and income tax paid attributable to the provisions in this Schedule; and

(b) an estimate of any change, attributable to the provisions in this Schedule, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.

(3) The review under subparagraph (2)(b) must consider taxes payable by the owners and employees of Scottish Limited Partnerships.’

This new clause would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of Clause 99 and Schedule 14, and in particular on the taxes payable by owners and employees of Scottish Limited Partnerships.

New clause 7—Call-off stock arrangements: sectoral review of impact—

‘(1) The Chancellor of the Exchequer must make an assessment of the impact of section 79 on the sectors listed in (2) below and lay a report of that assessment before the House of Commons within six months of the passing of this Act.

(2) The sectors to be assessed under (1) are—

(a) leisure,

(b) retail,

(c) hospitality,

(d) tourism,

(e) financial services,

(f) business services,

(g) health/life/medical services,

(h) haulage/logistics,

(i) aviation,

(j) transport,

(k) professional sport,

(l) oil and gas,

(m) universities, and

(n) fairs.’

This new clause would require the Government to report on the effect of Clause 79 on a number of business sectors.

New clause 8—Review of effects on measures in Act of certain changes in migration levels—

‘(1) The Chancellor of the Exchequer must review the effects on the provisions of this Act of migration in each of the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.

(2) Those scenarios are that—

(a) the UK leaves the EU withdrawal transition period without a negotiated future trade agreement,

(b) the UK leaves the EU withdrawal transition period following a negotiated future trade agreement, and remains in the single market and customs union, and

(c) the UK leaves the EU withdrawal transition period following a negotiated trade agreement, and does not remain in the single market and customs union.

(3) In respect of each of those scenarios the review must consider separately the effects of—

(a) migration by EU nationals, and

(b) migration by non-EU nationals.

(4) In respect of each of those scenarios the review must consider separately the effects on the measures in each part of the United Kingdom and each region of England.

(5) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

and “regions of England” has the same meaning as that used by the Office for National Statistics.’

This new clause would require a Government review of the effects on measures in the Bill of certain changes in migration levels.

New clause 9—Review of effects on migration of measures in Act—

‘(1) The Chancellor of the Exchequer must review the effects on migration of the provisions of this Act in each of the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.

(2) Those scenarios are that—

(a) the UK leaves the EU withdrawal transition period without a negotiated future trade agreement

(b) the UK leaves the EU withdrawal transition period following a negotiated future trade agreement, and remains in the single market and customs union, and

(c) the UK leaves the EU withdrawal transition period following a negotiated trade agreement, and does not remain in the single market and customs union.

(3) In respect of each of those scenarios the review must consider separately the effects on—

(a) migration by EU nationals, and

(b) migration by non-EU nationals.

(4) In respect of each of those scenarios the review must consider separately the effects in each part of the United Kingdom and each region of England.

(5) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

and “regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause would require a Government review of the effects of the measures in the Bill on migration levels.

New clause 11—Assessment of equality impact of measures in Act—

‘(1) The Chancellor of the Exchequer must lay before the House of Commons a report assessing the effects on equalities of the provisions of this Act within 12 months of the passing of this Act.

(2) The review must make a separate assessment with respect to each of the protected characteristics set out in section 4 of the Equality Act 2010.

(3) Each assessment under (2) must report separately on the effects in in each part of the United Kingdom and each region of England.

(4) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

“regions of England” has the same meaning as that used by the Office for National Statistics.’

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on equalities.

New clause 15—Sectoral review of impact of Act—

‘(1) The Chancellor of the Exchequer must make an assessment of the impact of this Act on the sectors listed in (2) below and lay a report of that assessment before the House of Commons within six months of Royal Assent.

(2) The sectors to be assessed under (1) are—

(a) leisure,

(b) retail,

(c) hospitality,

(d) tourism,

(e) financial services,

(f) business services,

(g) health/life/medical services,

(h) haulage/logistics,

(i) aviation,

(j) transport,

(k) professional sport,

(l) oil and gas,

(m) universities, and

(n) fairs.’

This new clause would require the Government to report on the effect of the Bill on a number of business sectors.

New clause 16—Review of effect of Act on tax revenues—

‘(1) The Chancellor of the Exchequer must review the effects on tax revenues of the Act and lay a report of that review before the House of Commons within six months of Royal Assent.

(2) The review under (1) must contain an estimate of any change attributable to the provisions in this Act in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.

(3) The estimate under (2) must report separately on taxes payable by the owners and employees of Scottish Limited Partnerships.’

This new clause would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of the Bill; and in particular on the taxes payable by owners and employees of Scottish Limited Partnerships.

New clause 30—Review of rates of air passenger duty—

‘(1) The provisions of section 88 shall not come into effect until the Treasury has carried out and published a review of the likely effect of changes to rates of air passenger duty on the aviation sector.

(2) The review must take into account the effects of Covid-19 on the sector.

(3) The review must be published no later than 1 October 2020.’

This new clause would require that the changes to APD in clause 88 not come into force until a review of the effect of changes to APD has been published by the Treasury.

Amendment 2, in clause 80, page 68, line 2, at end insert—

‘(3) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this Section and lay a report of that review before the House of Commons within one year of the passing of this Act.’

This amendment would require the Government to review the impact of the proposed changes to alcohol liquor duties on public health.

Amendment 3, in clause 81, page 68, line 21, at end insert—

‘(3) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the TPDA 1979 by this Section and lay a report of that review before the House of Commons within one year of the passing of this Act.’

This amendment would require the Government to review the expected impact of the revised rates of duty on tobacco products on public health.

Amendment 4, in clause 86, page 73, line 20, after “supplies” insert “, including human breastmilk”

This amendment would ensure that vehicles carrying human breastmilk would benefit from the exemption from Vehicle Excise Duty.

Amendment 5, page 77, line 10, leave out Clause 95

Amendment 6, in clause 95, page 77, line 14, at end insert—

‘(2) The Government must lay before the House of Commons by 9 September 2020 a statement of the conditions under which it would consider it appropriate to vary rates of import duty under this Section.’

This amendment would require the Government to state the conditions under which it would consider it appropriate to vary rates of import duty in an international trade dispute.

Amendment 7, page 77, line 14, at end insert—

‘(2) No regulations under this section may be made unless a draft has been laid before and approved by a resolution of the House of Commons.’

This amendment would require the Government to seek the approval of the House before making regulations varying rates of import duty in an international trade dispute.

Amendment 8, page 77, line 14, at end insert—

‘(2) The Chancellor of the Exchequer must, no later than a month before any exercise of the power in subsection (1), lay before the House of Commons a report containing the following—

(a) an assessment of the fiscal and economic effects of the exercise of the powers in subsection (1);

(b) a comparison of those fiscal and economic effects with the effects of the UK being within the EU Customs Union;

(c) an assessment any differences in the exercise of those powers in respect of—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland; and

(d) an assessment of any differential effects in relation to the matters specified in paragraphs (a) and (b) between—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland.’

This would require a review of the economic and fiscal impact of the use of the powers in clause 95 including comparing those effects with EU Customs Union membership.

Amendment 9, in clause 96, page 77, line 26, after “tax” insert

‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 10, page 77, line 27, after “deduction”, insert

‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 11, page 78, line 11, after “tax”, insert

‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 12, page 78, line 12, after “deduction”, insert

‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 13, page 78, line 35, after “tax”, insert

‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 14, page 78, line 36, after “deduction”, insert

‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 15, page 79, line 10, at end insert—

‘(8) The amendments made by this section do not apply to any debt secured by a floating charge in respect of monies were advanced to the debtor before 1 December 2020.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

[Jesse Norman]

The Government have tabled eight new clauses to the Bill, the majority of which are in response to the covid-19 pandemic. I would like to start by offering Members an explanation for why these new clauses are being brought forward on Report. The Government have been working very hard to combat the pandemic, as the House will know, and these measures are just a small part of a much more extensive and wide-ranging response. I am sure that colleagues across the House will appreciate that Ministers and civil servants have been working in extraordinary circumstances in the past three months. As I often do, I again pay great tribute to officials at the Treasury and Her Majesty’s Revenue and Customs. Without their work, it would not have been possible to deliver many, if any, of these aspects of this extremely comprehensive response, let alone in such a rapid timeframe as, for example, with the coronavirus job retention scheme.

We have brought forward these new clauses at the earliest possible opportunity, and for technical reasons, it is on Report. We have also been slightly limited by the fact that to table each new clause requires a new Ways and Means resolution to be agreed by the House. Report was the first amendable stage of the Bill to take place after the Government had been able to agree the necessary Ways and Means resolution on the Floor of the House. I hope the House will agree that there is a clear need for each of these new clauses to stand part of the Bill.

I will touch on each new clause briefly. New clause 19 seeks to do two things. First, it confirms that grants made under covid-related schemes—for example, the furlough scheme, the self-employment scheme, the small business grant fund, the retail, hospitality and leisure grant fund, the local authority discretionary grant fund and schemes corresponding to those grants within the devolved Administrations—are subject to tax. The new clause also includes a delegated power to add or remove further grant schemes through a statutory instrument, which provides sensible flexibility, so that the Government can continue to support the economy in their response to the pandemic.

The second part of the new clause ensures that HMRC has appropriate and proportionate compliance and enforcement powers in relation to the furlough scheme and the self-employment income support scheme. To ensure that taxpayer money is going only to those who are eligible, the new clause gives HMRC powers to recover overpayments and to impose penalties where there is deliberate non-compliance. HMRC has given a clear undertaking that these powers will not be used to penalise taxpayers who may be going through difficult times but make honest mistakes in their applications. As previously stated, the powers are designed to be proportionate, and they balance the fact that we are in unprecedented and uncertain times with the need to ensure that HMRC has sufficient powers to enforce the schemes according to eligibility criteria set out and to protect the Exchequer.

New clause 20 seeks to mitigate potential pensions impacts for those with a protected pension age returning to work to help in the battle against the pandemic. Its purpose is to provide certainty for those people by temporarily suspending rules that would otherwise see the pension income of recently retired people reduced if they were to return to work in crucial workforces at this important time. These retirees have been and will remain critical to the Government’s response to covid, and this new clause temporarily removes restrictions that might impede a flexible response.

New clause 21 temporarily relaxes the statutory residence test so that highly-skilled individuals from across the world are not discouraged from coming to the UK and helping this country to respond to the unprecedented health emergency. The actions and presence of normally non-resident individuals in the UK could have inadvertently affected their tax residence status. The measure is to be restricted, however, to ensure that it applies only between 1 March and 1 June 2020 for time spent in the UK by individuals who worked specifically on coronavirus disease-related activities in specified sectors. That time will not count towards the residence test.

Finance Bill (Ways and Means)

Debate between Baroness Winterton of Doncaster and Jesse Norman

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 19th May 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year may be made amending Chapters 8 and 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003.

This ways and means motion enables the Government to amend the current Finance Bill in order to implement reforms to the existing off-payroll working rules. We are presenting it separately because we wanted to extend the date at which it comes into force by one year to April 2021 in recognition of the effects of the coronavirus pandemic. The off-payroll working rules have been in place for 20 years. They are designed to ensure that people working like employees but through their own companies pay broadly the same income tax and national insurance contributions as people who are directly employed.

In April 2017, the Government reformed the way in which the rules operate in the public sector by transferring the responsibility for determining whether the rules apply from individual contractors to the public bodies that engage them. Unfortunately, in the private sector, non-compliance with these rules remains widespread, and it is forecast to cost the Exchequer over £1.3 billion a year by 2023-24 if not addressed. This is not a sustainable position. It costs the taxpayer a great deal of revenue that is needed for our public services, it perpetuates an unfairness between individuals working in the same way but paying different levels of tax, and it prolongs the disparity with the public sector, where the rules have been in place now for three years.

At Budget 2018, the Government announced that the reform would be extended to medium and large-sized organisations in the private and voluntary sectors, but it would not apply to engagements with the 1.5 million smallest businesses. It is important to be clear that this is not a new tax. The off-payroll working rules have been on the statute book since 2000. This reform is focused on improving on improving compliance with the rules that are already in place.

Let me turn to the amendment tabled by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) the hon. Member for Haltemprice and Howden. I understand that it will not be moved today, but it is important to be clear about the Government’s position on it. To help businesses and individuals deal with the economic impacts of the coronavirus, on 17 March the Government announced that the reform to the off-payroll working rules would be delayed by one year from 6 April 2020 until 6 April 2021. The amendment would delay the introduction of reform by a further two years to April 2023, but it is hard to see any genuine rationale for this further delay.

The current measure was first introduced at Budget 2018. Since then, the Government have carried out two consultations on the detail of the reform. Her Majesty’s Revenue and Customs has worked extensively to support businesses in preparing for the change. Draft legislation and guidance has been published. There was a further review earlier this year that resulted in several additional improvements. By delaying until 2021, the Government have already ensured that businesses and contractors will not need to make final preparations for this reform until next year. There is therefore no need for further delay. Moreover, such a delay would have very significant drawbacks. It would not address the intrinsic unfairness of taxing two people differently for the same work, it would extend the disparity between the private and public sectors, and it would come at a significant fiscal cost that other taxpayers up and down the country would have to make up.

I turn now to the substance of the measure. I want to address a number of further concerns that have been pressed by colleagues, including, in particular, my hon. Friends the Members for North East Bedfordshire (Richard Fuller), for Barrow and Furness (Simon Fell), for Workington (Mark Jenkinson) and for Watford (Dean Russell). The first of these is that organisations will no longer engage with personal service companies as a result of this reform, reducing the number of contracts available in the labour market. It is important to recognise that the Government are fully aware of the importance of the flexibility for individuals and businesses to agree working arrangements that suit their needs. We know that that has been one of the pillars of the success of the UK labour market in recent years.

In 2017, soon after the implementation of the public sector off-payroll working reform, the Government commissioned independent research to assess its effect on the labour market. It found that the Government and independent researchers had not seen any evidence of an overall change in the demand for the services and skills of contractors.

Some organisations have clearly decided to change the balance of their employees and their contractors. That can be for many reasons—for example, where that better suits the evolving business model of that organisation—but many organisations will still choose to engage contractors using personal service companies where that is appropriate to their business.

Nevertheless, the Government remain keen to ensure the long-term flexibility and success of the labour market. We will therefore use the additional time given by this one-year delay to commission further independent and robust research into the long-term effects of the 2017 reform on the public sector. We want that research to be available before the reform comes into effect in other sectors in April 2021, and I can tell the House that the Government will give careful consideration to the results of that further research and thereafter will continue to monitor the effect of the reform on the labour markets of those sectors, including by commissioning independent research six months after this private and voluntary sector reform has taken effect.

Secondly, colleagues have concerns that organisations might take a blanket approach to status determinations, categorising all engagements as employment, regardless of the facts. The Government have been very clear that determinations must be based on an individual’s contractual terms and actual working arrangements. Many businesses and public sector organisations have described processes that they have put in place to ensure that determinations are correct, based on the actual working practices of the individuals concerned. There is a vigorous contractor lobby, which has also shown itself willing and able to highlight cases where it feels that the rules are not being followed. The reforms themselves include a client-led status disagreement process, where contractors can lodge a complaint if they disagree with how they have been categorised.

Thirdly, HMRC is continuing to help businesses to get their employment status determinations right by ensuring that they have access to a wide programme of education and support. The independent research that we are announcing post-implementation next year will also evaluate from an external perspective whether decisions are being made properly.

Finally, HMRC has committed to a light-touch approach to penalties in the first year of the reform and has stated in terms that the reform will not result in new compliance checks being opened into previous tax years unless there is reason to suppose or suspect fraud or criminal behaviour, and the same is true for penalties for inaccuracies.

The Government very much value the important role that contractors play in the labour market and want businesses to be able to design their workforces in a way that makes sense for them. That should not mean, however, that contractors pay less tax than employees where their engagement meets the test of an employment relationship. The legislation is designed to remedy that unfairness and to support the tax base needed to fund our public services, and I commend it to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I now call Dan Carden, shadow Minister, who is asked to speak for no more than five minutes.

--- Later in debate ---

[Jesse Norman]

I thank all Members who have contributed to this brief but very lively debate. I thank the hon. Member for Liverpool, Walton (Dan Carden) and the Labour party for their support for this measure and their agreement not merely to the substance of the proposal but to the need for a delay. I think that is absolutely right. They should be congratulated on their bipartisan approach to this important public issue. The hon. Gentleman mentioned the Taylor review, which was picked up by several other Members. The Government whole- heartedly agree: the Taylor review made 53 recommendations, the vast majority of which we accepted, and several have already been put in place.

I covered the question of a delay in my speech. I encourage all Members who would like a further delay to reflect on the points that I made about the intrinsic unfairness of taxing two people differently for the same work, the disparity that it would continue between the private and public sectors, and the significant fiscal cost that would be involved in doing so.

The hon. Member for Glasgow Central (Alison Thewliss) spoke of a review. She should be perfectly clear that I have at no point discussed a further review. We had a review earlier this year, contrary to what the right hon. Member for Kingston and Surbiton (Sir Edward Davey) said. It was a perfectly good-faith discharge of a commitment made during the general election. It involved a wide range of parties discussing how the reforms could be effectively implemented, and several important changes were made as a result of it. Of course, it followed two processes of consultation, draft legislation and a full pre-legislative history.

We are not talking about a further review. We are talking about two pieces of research. The first, later in the year to come before April 2021, will look at the long-term effects on the public sector. It is entirely appropriate to look at the public sector reform, because that is the major case in which the reform has been put in place, and it has led to a significant improvement in the fiscal position relative to those involved and that is all to the good from the taxpayer standpoint. The second piece of research, which I mentioned earlier, will come at the end, after the reform has been introduced. It will be an early take on the effects on the private sector in the first six to 12 months of its introduction.

The hon. Member for Bethnal Green and Bow (Rushanara Ali) raised the issue of whether we could not go further. The Government have gone much, much further. We have essentially had three Budgets already this year, given the astonishing measures that have been taken by the Treasury and across Government to support businesses, people and families during the coronavirus crisis. This resolution and the Finance Bill are designed to bring into law the Budget that we had in March, and that is what they do.

Finally, I remind the House that the measure will not merely improve the fairness and equity of the system, but allow us to fund our public services better—the services on which all of us, across parties and across the country, deeply rely.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I announced to the House earlier this afternoon the provisional determination that a remote Division would not take place on the Question now before the House. That is also Mr Speaker’s final determination.

Question put and agreed to.

Resolved,

That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year may be made amending Chapters 8 and 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003.

Social Security

Debate between Baroness Winterton of Doncaster and Jesse Norman

Tuesday 5th May 2020 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Minister Jesse Norman to move the motion. He is asked to speak for no more than 20 minutes.

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Employment Allowance (Increase of Maximum Amount) Regulations 2020 (S.I., 2020, No. 273), dated 11 March 2020, a copy of which was laid before this House on 10 March, be approved.

This draft legislation allows the Government to increase the employment allowance by one third, or £1,000, giving more than 1 million small and medium-sized businesses up to £4,000 off their employer national insurance contributions bills. Employers pay secondary class 1 national insurance contributions on their employees’ earnings above the secondary threshold, which is set at £8,788 this year. Those contributions are charged at 13.8% and constitute the largest business tax by revenue in the UK.

The employment allowance was introduced in 2014 to help businesses with the costs of employment and to encourage them to grow and to hire more staff. It is claimed by more than 1 million employers in order to reduce their employer NICs bill by up to £4,000 per year. The Government recently restricted the employment allowance to smaller businesses with a national insurance contributions liability under £100,000, thereby ensuring that this valuable support is targeted at those who need it most.

At Budget, the Chancellor announced that we would deliver our commitment to increase the employment allowance for smaller businesses from £3,000 to £4,000 from April 2020. Businesses have been able to access that increased support from the start of the tax year. The draft regulations, if passed, will legislate for that increase to the employment allowance. More than half a million eligible businesses will benefit from the increase by up to £1,000. The Treasury expects the average gain from this measure to be about £850.

The Government are committed to supporting the UK’s smallest and often most entrepreneurial businesses, and this measure achieves that. Some 95% of the businesses benefiting from this increase are small and microbusinesses. Increasing the employment allowance to £4,000 means that 65,000 more businesses will see their employer national insurance liabilities fall to zero. Since introducing the employment allowance in 2014, the Government will have taken around 650,000 of the UK’s smallest businesses out of paying national insurance contributions entirely.

The Government are determined now more than ever to support people and businesses. At Budget, we increased the national living wage by 6.2% to £8.72 an hour. Along with increases to the income tax personal allowance and the national insurance primary threshold, that means an employee working full time on the national living wage is £5,200 better off today compared with April 2010.

However, we are aware that by supporting people at work through national living wage increases, we also increase cost for businesses. Increasing the employment allowance helps businesses to meet that cost. Businesses will now be able to employ four rather than three full- time employees on the national living wage without paying any employer national insurance contributions.

This increase will cost more than £2.3 billion over this Parliament; it is a large tax measure. It should be noted that in just four years, the Government have doubled the value of the employment allowance. The draft regulations legislate for a Budget measure that is already helping more than half a million of our smallest businesses with the costs of employment and has been supported by the Federation of Small Businesses.

Before I conclude, let me welcome the hon. Member for Ilford North (Wes Streeting) to the Labour Front Bench. I enjoin him and all colleagues in the House to join me in supporting the draft regulations, which I commend to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister, Wes Streeting, who is asked to speak for no more than 15 minutes.

Rating and Valuation

Debate between Baroness Winterton of Doncaster and Jesse Norman

Tuesday 4th February 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2019, which was laid before this House on 4 November 2019, in the last Session of Parliament, be approved.

This order makes a small but important technical change to business rates. Specifically, it changes the annual inflationary increase in the business rates multiplier from the retail prices index to the lower consumer prices index for the coming financial year. As hon. Members may know, the multiplier is effectively the tax rate applied to the calculation of business rates, be it through the standard multiplier or the small business multiplier. Historically, these multipliers would rise in line with the preceding year’s RPI figure. On this basis, the multipliers were due to increase to reflect the September 2019 RPI figure, which was 2.4%. In Budget 2016, the Government announced that they would switch the multiplier uprating from RPI to CPI indexation from April 2020. [Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Will Members leaving the Chamber do so quietly, please?

[Jesse Norman]

The autumn Budget 2017 brought forward this implementation date to April 2018. The switch makes a reduction to business rates that is estimated to be worth more than £6 billion over the next five years, and the benefit to business will continue to grow as the business rates multipliers are uprated by the lower rate of inflation year on year. The Government introduced regulations to make this change for previous years, and we are bringing forward this order to do the same for 2020-21.

Before I proceed to outline the detail of the order itself, I would like to set out some of the background for the benefit of the House. The Government recognise that business rates can represent a high fixed cost for some businesses—indeed, many businesses—and we have taken repeated steps to reduce the burden of the tax. Reforms since Budget 2016 include, first, making 100% small business rate relief permanent and doubling the threshold of this relief from April 2017. As a result, more than 675,000 of the smallest businesses do not pay business rates at all. Secondly, increasing the threshold for the standard multiplier to £51,000 from April 2017 has removed many properties from the higher rate of the tax. Thirdly, moving to more frequent valuations by bringing the next revaluation forward one year to 2021 and moving to three-year revaluations after that will make bills fairer by ensuring they more closely reflect properties’ current rental values.

Finally, introducing a new retail discount has cut the business rates bills of small retailers by one third for two years from April 2019. This is providing up-front support to the retail sector at what is proving to be a challenging time for many retailers, and it is worth about £1 billion to businesses.

Looking forward, as confirmed in the statement I made on 27 January, from 1 April this year the Government will increase the retail discount to 50% in 2020-21, and extend eligibility to independent cinemas and grassroots music venues for the first time. We will provide additional support to pubs through a £1,000 discount for pubs with a rateable value of less than £100,000. We will extend the duration of the £1,500 discount for local newspaper office space for a further five years. However, it is important to be clear that the Government recognise that concerns remain about the impact of the tax. That is why we are committed to a further review of business rates, details of which will be announced in due course.

The order before the House is the necessary secondary legislation required to effect the change in the inflationary increase for business rates from RPI to CPI in the financial year 2020-21. It sets out the new equation for setting the business rates multipliers for the coming financial year, so that the September 1.7% CPI figure is used instead of the 2.4% RPI figure.

Given the difference in the multiplier from uprating this year, the small business multiplier in 2020-21 will be 49.9p, rather than 50.3p. The standard multiplier in 2020-21 will be 51.2p, rather than 51.6p. That change represents a cut in business rates every year, benefiting all rate payers and freeing up cash for businesses. The order applies to England—unlike in the last debate, Madam Deputy Speaker, there has not been quite the same interest from Scottish nationalists about this measure, although both provisions apply to England. The Government will provide the devolved Administrations with funding to enable them to offer similar support if they wish, and they will fully compensate local authorities for the income they will lose as a result of this measure.

This measure should not be viewed in isolation, and as I have said, it is one of many introduced by this Government, and their predecessor Governments, to support business. I have mentioned numerous cuts to business rates, including the two-year business rates relief for small retailers. Looking more widely, the UK corporate tax regime remains highly competitive, with the Government having lowered corporation tax from 28% in 2010 to 19% today—the lowest rate in the G20. Beyond that, businesses are benefiting from enhanced tax incentives, including the introduction of the new 2% structures and buildings allowance, and a temporary increase in the annual investment allowance to £1 million.

The statutory instrument that we are legislating for today will contribute to the Government’s efforts to reduce the burden of business rates and make them fairer for taxpayers. As I outlined, on top of the reliefs already in place, the Government are committed to a review of the business rates system, details of which will be announced in due course. In conclusion, this order will change the annual inflationary increase in business rates from the retail price index to the consumer prices index in financial year 2020-21, thereby reducing costs for all business rate payers in England and giving the economy a further boost. I commend the order to the House.

Greater Manchester Metrolink

Debate between Baroness Winterton of Doncaster and Jesse Norman

Tuesday 20th March 2018 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. The Minister has until 7.30.

[Jesse Norman]

What a joy. In that case, I can extend my speech. I am very glad to hear it.

When I read the name “Jim McMahon” I thought that it was referring not to the hon. Member for Oldham West and Royton (Jim McMahon), but to one of my great heroes, the former quarterback for the Chicago Bears and, latterly, the Green Bay Packers. My sense of excitement on being invited to respond to him and my sense of delight that he was taking an interest in the transport issues of Greater Manchester was absolutely intense. However, my sense of delight is no less great in having this opportunity to respond to the hon. Gentleman, who was himself an award-winning leader of Oldham Borough Council.

If I may say to the hon. Gentleman, he is a little confused about some of the responsibilities involved in his area. For buses, he is very welcome to address himself to Andy Burnham, who has responsibility for buses. Indeed, he has enhanced powers under our new legislation. He has rightly addressed the subject of the Manchester Metrolink system. Everyone in this House who has travelled on the Metrolink—I was travelling on it recently myself—will agree that it has been a colossal success for the conurbation. I absolutely agree with him, and, as a member of the Government, I pay tribute to Councillor Andrew Fender for the work that he has done over the past 41 years. Opinion is divided in Manchester as to whether he should be regarded as Mr Metrolink, or just Mr Transport. Whichever it is, we congratulate him, and the hon. Gentleman’s point was very well made.

As the hon. Gentleman knows, transport is of enormous importance to this Government—absolutely in the north-west and as part of the strategic development of the north as a whole. We very much agree with local partners that transport is essential for growth, which is why we are investing significantly in local and regional transport infrastructure, including £15 billion for the strategic road network and £6 billion for local schemes through the local growth fund. This investment is designed specifically to drive the economic growth that we wish to see, to allow the other opportunities that come from transport including the social and family benefits, and to relieve the economy—at least temporarily—from the effects of congestion.

As the hon. Gentleman knows, we are creating a northern powerhouse to rebalance the economy, and that is a shared aim. The reason for creating Transport for the North as an entity was specifically to provide a local voice that could convene and gather those different projects and schemes—that total regional ambition—into one place that would support economic growth in the north. We will invest £13 billion during this Parliament to connect the region better, so that northern towns and cities can pool their strengths and create not a series of city economies or regional economies separated by geography, but a single powerhouse economy. Of course, Greater Manchester is at the heart of that.