Oral Answers to Questions

Sally-Ann Hart Excerpts

Tuesday 22nd June 2021 Commons Chamber

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

It is absolutely clear that there are significant lessons for the FCA to learn from the Gloster review, and I have regular conversations, including just last week, with the new chief executive on the transformation programme. He has employed five new senior executives to drive that programme forward urgently, and I look forward to seeing the results of that intervention.

[Sally-Ann Hart (Hastings and Rye) (Con)]

The role of regulation has been in the spotlight recently in an independent report by the taskforce on innovation, growth and regulatory reform, which was welcomed by the Prime Minister. The report highlights that as the EU has expanded, its internal processes and regulation have become slower and more bureaucratic, impacting on economic competitiveness. What steps is my hon. Friend taking to reduce onerous regulation as regards UK Treasury matters to ensure that all such regulation reflects our national interest and ensures that the UK maximises its economic agility and competitiveness?

[John Glen]

My hon. Friend rightly recognises the value of the TIGRR report, which we received last week, and we will be looking very carefully at those recommendations. In addition, my right hon. Friend the Chancellor chairs the better regulation committee, which has been established to drive forward a new strategy to deliver better regulation outside the EU. There is a lot of work to be done, but progress is being made.

Oral Answers to Questions

Sally-Ann Hart Excerpts

Tuesday 27th April 2021 Commons Chamber

[Sally-Ann Hart (Hastings and Rye) (Con) [V]]

Brexit is a great opportunity to turbocharge global Britain, but unfortunately it has not worked so far for fishermen in my beautiful constituency of Hastings and Rye. Had it not been for Mr Keith Chapman setting up an export hub in Rye for local fishermen, many might not have survived. He did that at his own expense, and he has not been eligible for any of the Government funding made available to the fishing industry. What further support can be provided to assist entrepreneurs such as Mr Chapman when exports are hit by the double whammy of covid and Brexit?

[Rishi Sunak]

Fishing is at the heart of many of our coastal communities, and I pay tribute to Mr Chapman and my hon. Friend for their commitment to the sector. I am happy that the Government are also championing and committed to the sector, and we have announced a £100 million fund to modernise our fleet and infrastructure. That is on top of £32 million that will replace EU funding this year, and £23 million that was made available earlier to support the sector, while adjusting to new export requirements.

Oral Answers to Questions

Sally-Ann Hart Excerpts

Tuesday 9th March 2021 Commons Chamber

[Robert Largan (High Peak) (Con)]

What fiscal steps his Department is taking to improve transport connectivity across the UK.

[Sally-Ann Hart (Hastings and Rye) (Con)]

What fiscal steps his Department is taking to improve transport connectivity across the UK.

[Simon Jupp (East Devon) (Con)]

What fiscal steps his Department is taking to improve transport connectivity across the UK.

--- Later in debate ---

[Jesse Norman]

I thank my hon. Friend for his question. He has been a vociferous supporter of this scheme and I can happily confirm that the Government remain committed to upgrading the A57 so as to improve connectivity between Manchester and Sheffield. The development consent order is on track to be submitted shortly and construction is expected to start in early 2023.

[Sally-Ann Hart [V]]

Investing in improved transport infrastructure is well recognised by this Government as a necessity for turbocharging our economy and levelling up. Beautiful Hastings and Rye has some of the most antiquated road and rail infrastructure in the country, which discourages new businesses from locating there and inhibits economic growth. Network Rail is currently finalising a strategic business case for HS1. What steps is my right hon. Friend taking to ensure that funding will be available to finance such a vital project?

[Jesse Norman]

My hon. Friend will be aware that the strategic outline business case for the Kent and East Sussex coastal connectivity scheme includes proposals to extend HS1 services from Ashford International to Hastings and Rye. It is currently being taken forward by Network Rail and is due to be submitted to the Department for Transport in April 2021. It will then be reviewed by the Department and by stakeholders in Kent and East Sussex County Councils.

Support for Self-employed and Freelance Workers

Sally-Ann Hart Excerpts

Thursday 17th September 2020 Commons Chamber

[Sally-Ann Hart (Hastings and Rye) (Con)]

Businesses up and down our country face pressures they never expected, challenges they never predicted and hardships they never sought. Rightly, the Government stepped up and came to their aid in their hour of need—grants, the furlough scheme, bounce back loans, and much more. The Government have provided to businesses in all four nations one of the most generous and supportive packages of economic measures anywhere in the world.

That said, my constituency, a coastal community, with an economy at its core dependent on tourism, the arts, music, creative sectors and hospitality, has been disproportionately hit by coronavirus. Hastings and Rye is a beautiful constituency that has seen a revival in recent years of its music scene, artistic events, creative kinship and gastronomic offerings. We only have to compare Hastings old town 15 years ago with today to see the massive winds of change that have blown through our streets.

Those who have helped to revive the parts of this beautiful constituency, however, are now themselves in need of support, for they are the freelancers who are the backbone of many of these sectors and have thus far gone without much Government support. From musicians to artists, writers to journalists, actors and performers, they put the soul and beat into the streets of Hastings, and it is only right that we support them now in their hour of need, because once coronavirus is over and we are out in the streets celebrating once more, we will want our musicians, actors and artists there to entertain, inspire and lift us up after this dark episode in human history.

This is not just about the performer; it is about the fabric of connections that bind the whole industry together. These performers work in partnership with each other and with theatres, commercial organisations, charitable trusts, schools and local groups, so by supporting our freelance or self-employed performers, we help the whole industry to stay afloat and we build community resilience.

This is not just about individual finances; it is about experience and skills being lost and young people not being encouraged to choose the creative industries as a career. Being self-employed in any industry provides the freedom and flexibility to go where the work is, but during the pandemic, work dried up overnight for many people, and freelancers continue to struggle as protective measures against coronavirus continue to affect many industries.

[Martin Vickers (Cleethorpes) (Con)]

Like my hon. Friend, I represent a coastal community, and many of the people she has mentioned I recognise. May I add my voice to the calls to the Government? They have done a tremendous job during the pandemic to support businesses, but those whom she describes have been badly hit, particularly those who have been prevented from carrying out their work because of Government regulation. Surely, they deserve additional support.

[Sally-Ann Hart]

I agree with my hon. Friend. Numerous freelancers did not have a financial buffer and, unlike employees, were not entitled to be furloughed. We must not forget the small business owners who pay themselves mostly in dividends and earn under the threshold. It is often a more flexible way of payment that can keep money in their businesses to keep them going—many have used dividend payments to legally mitigate their tax payments—but there has to be some encouragement for entrepreneurs taking risks and setting up businesses and employing people.

Our SMEs provide the backbone of our great nation. The Government rightly took the bold and necessary decisions to provide an exceptional package of financial support to businesses up and down our land, but now the Government must go further and consider the support given to our freelancers and self-employed as we turbo-charge our economy out of the pandemic. For we as a community will look for our creative freelancers once all this is over to lift our spirits once more and inspire us into happier, healthy and more prosperous days.

Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill

Sally-Ann Hart Excerpts

2nd reading & 2nd reading: House of Commons
Friday 11th September 2020 Commons Chamber

[Tom Randall]

I was unaware of the enterprise of French nuns, but I am in awe of what they can achieve. I am grateful for that fascinating intervention.

The Bill has laudable aims, allowing co-operatives and community benefit societies to gain powers to raise finance by issuing redeemable green shares to external investors and investing the capital raised in an environmentally friendly, sustainable manner. I also appreciate the intention for there to be safeguards in the Bill to prevent the issuing of shares leading to the undermining of a society’s conversion into a commercial company, though I heard the criticisms of that made eloquently earlier.

It is perhaps worth noting, as my hon. Friend the Member for Rushcliffe (Ruth Edwards) alluded to in her speech, that sometimes when things go wrong, they do so quite badly. As my hon. Friends the Members for Northampton South (Andrew Lewer) and for Clwyd South (Simon Baynes) said, sometimes investments do go down as well as up, and it is possible to lose money in a new scheme.

The hon. Member for Cardiff North spoke a lot about community energy. As my hon. Friend the Member for Rushcliffe outlined, in Nottinghamshire we are scarred by the failure of Robin Hood Energy, which recently collapsed with the loss of over 200 jobs. The setting up of Robin Hood Energy was laudable: it was designed to create a wholly owned subsidiary of Nottingham City Council to create a not-for-profit subsidiary to tackle fuel poverty in Nottingham and provide a real alternative to the big six energy suppliers. As I said in an intervention, it had customers way beyond the city of Nottingham, and it did provide energy, but it has now failed at a cost of tens of millions of pounds to an inner-city local authority.

The rather damning report by Grant Thornton into the reasons for the failure of Robin Hood Energy centred around many of the governance arrangements. It said that the arrangements put in place by Nottingham city council for setting up and operating an energy company—a highly ambitious project in a complex, competitive and highly regulated market—were not strong enough, particularly given the nature of the company and the markets. It has been pointed out that there was insufficient appreciation within the council of the huge risks involved in owning and investing in an energy company such as Robin Hood Energy. There was insufficient understanding within the council of Robin Hood Energy’s financial position due to delays in the provision of information by the company, the quality and accuracy of that information and a general lack of expertise at the non-executive board level.

It perhaps would be unfair to judge the entire co-operative movement on the inept leadership of Labour-controlled Nottingham City Council, but it does help to raise the kind of concerns that might arise over the operation of these companies. My hon. and right hon. Friends have outlined those concerns in more detail. I look forward to seeing how the legislation and the ideas develop.

[Sally-Ann Hart (Hastings and Rye) (Con)]

Given the nature, aims and objectives of co-operatives and community benefit societies, does my hon. Friend agree that our concern is that the Bill will undermine the integrity of these organisations and expose them to exploitation as investment vehicles, rather than socially beneficial institutions?

[Tom Randall]

I entirely agree with that concern. Certainly, as things become more complex, bigger and more ambitious, one risks losing sight of what one originally set out to be and create. That is a valid concern, which we should think carefully about when considering the matter.

I am grateful to have listened to the erudite and insightful arguments critiquing the Bill and its shortcomings. I do not feel that I can support the Bill, unfortunately, but I look forward to seeing how the arguments and the beliefs that underpin it develop in the time to come.

Finance Bill

Sally-Ann Hart Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[Sally-Ann Hart (Hastings and Rye) (Con) [V]]

I endorse the comments on the gaps in the financial support but, at the request of several of my constituents in Hasting and Rye, I wish to highlight the measures on the loan charge in clause 16.

There is no doubt that the loan charge is an anti-avoidance measure: it was introduced in the Finance Act 2016 to address the tax lost to the Treasury through a variety of disguised remuneration schemes. In the 2016 Budget, the Government announced a package of changes to tackle the existing disguised remuneration avoidance schemes and prevent their further use. The loan charge was introduced as a new charge on disguised remuneration loan balances outstanding at 5 April 2019. It is absolutely right that the Government take action to ensure that everybody pays the taxes that they owe and contributes towards the publicly funded services from which they benefit.

In September 2019, the Government commissioned Sir Amyas Morse to lead an independent review of the design and implementation of the loan charge. Sir Amyas was asked to consider whether the policy was an appropriate response to the tax avoidance behaviour in question, and whether changes that the Government had previously announced addressed any legitimate concerns raised. The review was published in December, alongside the Government’s response, which welcomed Sir Amyas’s acknowledgement that disguised remuneration schemes are a form of tax avoidance, but recognised the concerns raised by the review about the impact of some aspects of the loan charge. The Government have, in this Bill, accepted all but one of the review’s recommendations.

The review found that legislation announced in 2010 removed any doubt that tax was due. However, it is argued that the law was not clear on tax after 2010, as explained by Members in this House on 19 March this year. I will not revisit those arguments. The all-party group on the loan charge formally disputes the review’s finding that the law on the use of loan schemes became clear from December 2010.

It has also been argued that some of those caught by the loan charge were misled and, in some cases, coerced into entering schemes as the only way of securing a job. Although the loan charge was intended to shut down loan schemes, the Morse review found that the use of some schemes continues to be extensive in the 2019-20 tax year, with more than 8,000 individuals having entered into schemes between April and October 2019. Some promoters and professional advisers are still selling schemes, in spite of the law becoming clear from November 2017. That needs to stop.

My concern centres around the retrospective aspect of the loan charge. The loan charge does not change past liabilities, because it is a new tax on loans outstanding as at 5 April 2019. It changes the current tax effect of previous events and therefore brings past tax years back into charge. It is structured to correct past avoidance. In common law there is a presumption that a statute does not have retrospective effect, largely because of the serious injustice that that could engender. However, retrospective legislation is not necessarily unconstitutional, and legal argument and case law is available to support that view.

Retrospective legislation can right a wrong when law is an ass, but when it is used to penalise retrospectively, it undermines public confidence in the rule of law. A person must know in advance whether their conduct is or is not legal. There is no punishment without law. The rule of law is fundamental to our democracy. It ensures accountability and trust in our institutions. The principles of the rule of law, including legal certainty and open government, are the processes by which the laws are enacted, administered and enforced. They are accessible, fair and efficient and must be respected and not undermined.

I am speaking on behalf of my constituents in Hastings and Rye and providing them with a voice. They have ended up as victims of the loan charge. I am asking for a just decision to be made that the loan charge takes effect from the date of Royal Assent of the 2017 Finance Act. That would avoid the retrospective element, and would give certainty from that point onwards regarding loan arrangements.

Loan Charge 2019: Sir Amyas Morse Review

Sally-Ann Hart Excerpts

Thursday 19th March 2020 Commons Chamber

[Bambos Charalambous (Enfield, Southgate) (Lab)]

Let me say from the outset that I am no fan of tax avoidance. The law on disguised remuneration schemes should have been—and now has been, rightly—tightened, but the aggressive retrospective action taken by the Government in pursuing the loan charge policy and the profound effects that this has had on many people’s lives are quite simply unjust and unfair.

A significant number of people affected by the loan charge policy, including some of my constituents, are freelancers, contractors, locums and agency workers. When IR35 was introduced by the Government of the day in 1999, some of those who were employed by limited company or personal service companies sought and took professional tax advice and were advised to use umbrella company loan schemes instead, as those schemes were “tax law and HMRC compliant”. Acting in good faith and following the advice to the letter, many entered into these loan schemes. In some cases, particularly in the public sector, people were not even aware that they were being paid through loans.

When the loan charge was introduced in 2017, seeking to recover a 20-year retrospective tax charge for all remuneration paid in the form of a loan, those affected were rightly angered and aggrieved, particularly as HMRC lumped all the loans together into one and insisted on the tax being paid in a single year. The shock and stress of such a draconian and unjust measure caused intense pressure on many of those affected and their families. There have been seven known suicides by people who are facing financial ruin as a result of the demands of backdated tax from HMRC, even though it is questionable whether the tax was even owed. Relationships have broken down, and it has affected people’s mental health.

It is worth noting that HMRC has pursued individuals acting in good faith, rather than those who enabled the disguised remuneration loan schemes. Thankful for small mercies, the fact that HMRC is now only pursuing schemes going back 10 years, instead of 20, is to be welcomed, but many individuals are still caught by the current situation. It seems that, unlike in other areas of law, statutory time limits are of no consequence.

When the Prime Minister was running to be leader of his party, he promised a review of the loan charge situation. That review was led by Sir Amyas Morse, and the report was published in December 2019. While I welcome the recommendations of the Morse report, many of which the Government have accepted, unfortunately it does not go far enough. The report also has one fatal flaw: it concludes that the law was clear from 2010. There were a number of ambiguities at the time, such as the situation relating to those who are self-employed. If the law was so clear at the time, why did HMRC not enforce the law then, but instead choose to introduce the loan charge in 2017?

As a member of the loan charge all-party parliamentary group, I call on the Government to do a number of things. I ask them to amend the date from which the loan charge applies from 2010 to when the Finance Bill received Royal Assent in 2017; to ensure that closed tax years remain closed; to ensure that those with incomes of under £30,000 have any outstanding balances written off after 10 years; and to ensure that legislation covers business owners and directors, as well as individual contractors.

The Government and HMRC’s reputation has been damaged by the way that they have mishandled the loan charge situation. One principle that must underpin our legal and tax system is that things should be just and fair. Unfortunately, the loan charge and its aggressive application has been neither just nor fair.

[Sally-Ann Hart (Hastings and Rye) (Con)]

The hon. Gentleman talks about the system being just and fair. As British people, we uphold the rule of law. That is part of the very nature and fabric of Britain. Retrospective legislation, in itself, is against the rule of law.

[Bambos Charalambous]

The hon. Member makes an excellent and pertinent point. We are discussing tax going back 20 years, and retrospective legislation should not be applied in this situation, because that is clearly unfair and unjust.

We must consider that, beyond the financial aspects of tax recovery, we are dealing with real people who need to be treated with fairness and respect. We have a moral duty to ensure that no more homes are lost, no more bankruptcies are filed, no more lives are lost and no more families are broken because of the loan charge policy.