Bank Closures: Stoke-on-Trent North

Aaron Bell Excerpts

Wednesday 14th June 2023 Westminster Hall

[Jonathan Gullis]

My right hon. Friend and Staffordshire colleague has been a fantastic champion for that great country for many years. He is entirely correct that there needs to be a rethink. It is starting to feel, albeit unintentionally, like Barclays has something personal against Staffordshire, with Kidsgrove, Newcastle-under-Lyme and Wombourne all facing branch closures. This has not been well thought through, particularly as residents may have to travel to Crewe or Hanley. That is not an easy journey for the constituents of my right hon. Friend the Member for South Staffordshire (Sir Gavin Williamson), as I am sure public transport connectivity is not what he would desire.

A journey to Crewe is a significant one even from the place I am proud to serve, particularly if households do not own a vehicle and rely on public transport that is not well connected to the surrounding north Staffordshire area and the Cheshire boundary. I hope that common sense will prevail here, and that Barclays will engage with my right hon. Friend, my hon. Friend the Member for Newcastle-under-Lyme and myself to talk about what can be done to help protect its customers in these difficult times.

One of my constituents, Ms Green, told me that

“many disabled people and pensioners will suffer”.

That makes me question whether Barclays is even complying with the FCA’s guidance. Crucially, 40% of over-65s—over 4 million people—do not manage their money online. That is because online banking is difficult to navigate and automatic telephone responses are monotonous and impersonal. A constituent wrote to me to say that they found telephone banking

“confusing and difficult to hear.”

A recent survey by Accenture illustrates that point, finding that 44% of over-55s would rather visit their branch. It also showed that in-person banking was also popular among over 20% of younger people.

Alongside the impact the branch closure will have on vulnerable people, it is impossible to underestimate the financial security implications of a lack of in-person banking. Since Barclays announced its closures, I have been inundated with correspondence from local people outraged that Kidsgrove is losing its last remaining bank. One constituent told me that they are “appalled” at the announcement, and that it will put the elderly

“at greater risk of getting scammed.”

Dr Daniel Tischer of the University of Bristol noted that,

“the danger of mass cyber-attacks... looms ominously”.

He also noted that there is a genuine risk of cyber-crime, scams and fraud. I am certain that the precedent set by bank closures will put people at greater risk, especially the most vulnerable in our society, who lack the digital awareness younger people have to spot clear signs of illicit financial activity. For those people, in-person banking with specialist advisers is crucial. By closing the branch, Barclays is putting people whom it has an obligation to support and protect at a much greater risk.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I apologise for being a little late. I congratulate my hon. Friend and neighbour on his campaign for the Kidsgrove Barclays branch. As he knows, Barclays has closed the branch in Newcastle-under-Lyme as well, and I too have been inundated with correspondence. My constituents have the option to switch, and I am encouraging them to do so. That option is there because of Government measures that were put in place to make switching easier. My hon. Friend is a superb champion for the people of Kidsgrove in the north of the borough, but they do not have the option to switch. Barclays should think again about both closures—but especially about his.

[Jonathan Gullis]

I congratulate my hon. Friend on his campaign and petition, and on guiding those customers of Barclays to other local banking providers that are proudly remaining in the centre of Newcastle-under-Lyme. It is a shame that the decision was made to close both the Kidsgrove and the Newcastle-under-Lyme branches within a two-week period. Ultimately, had a decision been made just on Kidsgrove, at least there would have been some justification for residents of Kidsgrove, Talke and Newchapel to go to Newcastle-under-Lyme, Hanley or Crewe—but Barclays took both branches out.

Local transport is not necessarily the best and not everyone has access to a motor vehicle. The longer journeys make in-person banking services simply not accessible for many. It is therefore wholly appropriate that customers vote with their feet and that people are made aware. There is a Lloyds bank branch available in Tunstall and there are other banking providers in my hon. Friend’s local town of Newcastle-under-Lyme, and I will join him in directing customers to places where they can still access that face-to-face service within a five-mile radius of where they live. My constituent Ms Birchall told me that she feels that older generations are being marginalised. Barclays’ decision undermines its commitments to the Financial Conduct Authority’s guidelines, and it does not do enough to care for the most vulnerable, as the closure clearly increases their exposure to fraud.

Small and medium-sized businesses rely on local banking services to deposit their cash and rely on in-person infrastructure to deposit their earnings and savings. One local business owner told me that they were devastated by the proposed closure of Barclays in Kidsgrove. They said that the queues are so long because some customers had difficulties in using online facilities, and that it will now be far more difficult for those businesses to deposit their cash and earnings, especially after NatWest, TSB and Britannia’s closures.

Not only will Barclays’ decision to close its branch have an impact on local businesses that use the local bank’s services, but the closure may drive people away from the local high street. Over the past 10 years, 10,000 shops, 6,000 pubs, 7,500 banks and more than 1,100 libraries have closed. The impact of closures has been felt especially in areas such as Stoke-on-Trent North, Kidsgrove and Talke. Without doubt, the covid pandemic exacerbated some of the problems local high streets face, with more people than ever before turning to online shopping. Local bank branches incentivise people to visit high streets, with constituents telling me they shop, eat and drink after going to the bank. If the local branch goes, people will be less likely to visit small businesses and help the local economy to grow.

I am passionate about fighting for the health and vitality of the local high streets I am proud to serve. They are the focal point of local communities and a source of immense civic pride. That is especially true in Kidsgrove. With the £17.6 million Kidsgrove town deal—a once-in-a-generation investment in our local community— the new BMX pump track at Newchapel Rec, the 3G astroturf pitches at The King’s Church of England Academy, the newly reopened Kidsgrove Sports Centre and the plans for the shared services hub in the town centre, as well as investment in Kidsgrove railway station, we are attracting more outsiders to visit our local area.

I accept that digitalisation is transforming the way we access banking, but we should do more to explore how we can incorporate banking hubs into our system and into local communities, such as in Kidsgrove. Banking hubs are shared services where customers from almost any bank can visit their local post office and withdraw cash from the counter. Both the Access to Cash action group—CAG—and LINK argue that banking hubs are extremely popular, and their use has doubled since they opened. However, we need to roll out far more of those hubs more widely if they are to negate the demonstrable impact of bank branch closures.

Shared service banking hubs have the potential to be highly valued facilities at the centre of a thriving town centre. I am certain that having banking hubs with specialist advisers from all major banks present in a new and permanent feature on our high street, such as the shared services hub in Kidsgrove we propose to build in the not-too-distant future, would go a long way to not only delivering on the levelling-up agenda that is so important to my constituents, but giving them the reassurance they rightly deserve about having that access.

The Barclays bank closure in Kidsgrove threatens to limit the local community’s access to cash. More than 10 million adults in the UK need access to cash, and this is especially pressing since our most vulnerable constituents rely on cash more and more for things such as budgeting. The independent 2018 access to cash review found that as many as 8 million adults would find a cashless society difficult, and Barclays’ decision to close its branch in Kidsgrove will exclude many people in the local community even more from getting the cash they need to get by on every day.

The impact of irresponsible closures of local bank branches is exacerbated by the decline in the total number of ATMs. A report by Which? found that between January 2018 and September 2019, the number of free-to-use ATMs went down from 54,500 to 47,500, representing a 13% reduction in the size of the free network. As of 2023, there are 3,431 ATMs in the west midlands. The great town of Burslam was the first in the UK with a population of more than 20,000 without either a bank branch or an ATM. We tested an access to cash scheme run by Sonnet in Burslam in 2021. While the pilot found that local people were largely supportive of the cashback services in convenience stores, the free educational services offered over a significant period, aimed at people with poor digital skills, were deeply unpopular and failed to give people the confidence to transition to online banking.

It is undeniable that Barclays’ decision to close its branch in Kidsgrove will leave a gaping hole in our local community, but I want to take the time to point out the measures that Barclays is taking to help the community transition. Barclays has assured me that face-to-face banking continues to play an important role for some of its customers in Kidsgrove through a continued presence in the community via new alternative physical touchpoints in retail outlets and community spaces. I believe that one is planned for the local library. Barclays is introducing specific, targeted support for vulnerable and elderly customers who have been identified as needing additional help. The offering includes one-to-one “tea and teach” sessions to support digital skills capabilities, alongside sharing the services available at the nearby post office and, in due course, at the alternative community banking presence we are seeking to put in place.

Yesterday, Barclays informed me that it will have a team at Kidsgrove Sports Centre for three days a week, offering face-to-face financial support on Mondays, Tuesdays and Fridays. However, that fails to match the services offered from its traditional branch and, crucially, the access to cash pilot in Burslem demonstrated that the educational services were deeply unpopular, with low attendance figures. As such, I am sceptical of the precautions that Barclays has put in place to support local people in the community in Kidsgrove to transition from a physical branch.

Bank closures have a demonstrable impact on local communities like Kidsgrove. My constituent, Ms Leake, wrote to me saying that her mother visits the branch religiously, and I know that Ms Leake’s mother is not alone. As we have discussed today, the closures have a disproportionate impact on the most vulnerable in our society, with the elderly and disabled facing financial exclusion, as it is far harder for them to use online banking services or travel further afield. Leaving Stoke-on-Trent North, Kidsgrove and Talke with just one bank on the high street will also put my constituents at greater risk of fraud. Lack of access to in-person banking will put more people at risk of cyber-crime and, once again, the impact will be felt more by our most vulnerable constituents.

Bank closures also disincentivise people from visiting high streets in places like Kidsgrove, which will lead to decreased footfall and have a knock-on impact on small businesses. Banks are at the very heart of communities, and we need to explore how we can expand banking hubs more widely to ensure that people still visit the high street.

With more than 10 million people in the UK needing regular access to cash, further bank closures such as those we are seeing in Kidsgrove exclude my constituents from their money. Given that those from disadvantaged backgrounds rely more heavily on cash, Barclays’ decision impacts our most vulnerable constituents. Ultimately, we need banks in our local communities, and the people who make communities like Kidsgrove great need banks. I urge the Minister to do whatever he can to support areas like Kidsgrove to keep banks on their high streets, as they are so important for economic vitality and as a focal point of support for our most vulnerable constituents.

Finance (No. 2) Bill (Fourth sitting)

Aaron Bell Excerpts

Committee stage
Thursday 18th May 2023 Public Bill Committees

[James Murray]

As we have heard, clause 326 increases both rates of the landfill tax in line with inflation, rounded to the nearest 5p. The increased rates apply to any disposal of relevant materials made, or treated as being made, at a landfill site in England or Northern Ireland on or after 1 April.

The landfill tax was introduced in 1996. It increased the cost of waste disposal at landfill to encourage waste producers and the waste management industry to switch to a more sustainable way of disposing of waste material. The tax was originally UK-wide, but it was devolved in Scotland from April 2015 and in Wales from April 2018. We will not oppose the clause, but I ask the Minister to fill us in on the wider context of the landfill tax, and specifically landfill tax fraud. In a Backbench Business Committee debate on landfill tax fraud in January, my hon. Friend the Member for Cambridge (Daniel Zeichner) said:

“Landfill tax fraud is a blight on communities across the country. It causes lasting damage to the environment and, of course, deprives the Exchequer of revenue.”—[Official Report, 12 January 2023; Vol. 725, c. 793.]

As Members discussed during that debate, according to His Majesty’s Revenue and Customs’ most recent annual estimate of the tax gap, the gap between landfill tax due and revenue collected in 2021 is £125 million. That is a gap of 17.1%—much higher than the overall tax gap for that year. According to HMRC’s report, the uncertainty rating for the landfill tax gap estimate is high. The then Exchequer Secretary, the hon. Member for South Suffolk (James Cartlidge), conceded in the debate that “non-compliance is high.” In responding to the debate, he set out some details of the operational resource dedicated to landfill tax non-compliance; however, I do not think that he directly answered a question that the shadow Minister, my hon. Friend the Member for Cambridge, put to him: how much of the £125 million tax gap identified in 2021 has been recovered by HMRC? I would be grateful if the current Exchequer Secretary could address that point.

Clause 327 amends the main rates of the climate change levy on gas and other taxable commodities, and the reduced rate percentages on those commodities paid by participants in the climate change agreement scheme from 1 April next year. The climate change levy is a tax on the non-domestic use of gas, electricity, liquefied petroleum gas and solid fuels. Energy-intensive businesses that participate in the climate change agreement scheme run by the Department for Energy Security and Net Zero pay reduced rates expressed as a percentage of the four main rates of the climate change levy on the taxable commodities supplied to them.

We understand that the changes introduced by the clause were announced in the 2022 autumn statement, which froze the electricity rate, and in which it was confirmed that the climate change levy rate for LPG will continue to be frozen until 31 March 2025. It was further announced that the reduced rates of the levy for 2024-25 on gas and other taxable commodities paid by qualifying businesses in the climate change agreement scheme would be amended, so that participants will not pay more under the levy than they would have if the rates had increased in line with the retail price index.

Clause 328 increases the plastic packaging tax in line with the CPI. The plastic packaging tax was introduced in April 2022 to provide an economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging. That was expected to create greater demand for the material, which would in turn stimulate increased recycling and collection of plastic waste, diverting it from landfill or incineration. I understand that the new rate maintains the real-terms value of the incentive to include 30% or more recycled plastic and plastic packaging components in a product by increasing the rate of tax in line with the CPI. As that tax has now been in place for a year, what evaluation have the Government made of it? In particular, can the Minister tell us what impact the tax had in 2022-23, in terms of fulfilling its stated aim of stimulating increased recycling and collection of plastic waste?

Clause 329 makes changes to the aggregates levy exemptions for some types of aggregate from construction sites. We understand that it replaces four exemptions for by-product aggregate arising from certain types of construction with a broader and more general one. The explanatory notes state:

“Following a review of the levy in 2019, some concerns about the operation of the levy were raised by different stakeholder groups.”

I understand that the changes were consulted on in 2021. Draft legislation was published in July 2022 for technical consultation, which has now concluded. On that basis, we will not oppose the clause.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to serve under your chairmanship, Sir Gary. I will confine my remarks to clause 326. I am grateful to the hon. Member for Ealing North for raising landfill tax fraud and the debate on 12 January, which I contributed to at some length. As Members may know, I have the worst landfill in the country in Walleys Quarry in my constituency of Newcastle-under-Lyme. The Opposition Whip, the hon. Member for Blaydon, also has some experience in this area, because her constituents have suffered at Blaydon Quarry. She contributed to that debate, too.

The hon. Member for Ealing North mentioned that the tax was introduced in 1996. The differential between the rates for regular waste and inert waste has grown immensely. Now, they are £3.25 and £102.10 respectively; back in 1996, they were £2 and £7. Just as the hon. Member for Wallasey said earlier in relation to tobacco, that has increased the incentive for people to break the rules, and unfortunately, many people in the waste industry are breaking the rules. What goes on at Walleys Quarry causes misery for my constituents, as fly-tipping and everything else that goes on in the waste industry does for people around the country.

The responsibility falls primarily on the Environment Agency, which I continue to press to do more about Walleys Quarry, as well as about Staffordshire Waste Recycling Centre, which is just over the border in the constituency of my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), who mentioned it just yesterday at Prime Minister’s questions. Will the Minister focus on the role of HMRC in helping the EA to do its work, because prosecutions for fraud may ultimately have more effect than prosecutions under environmental regulations?

[Liz Twist (Blaydon) (Lab)]

It is a pleasure to speak with you in the Chair, Mr Stringer. As the Opposition Treasury Whip, talking about landfill tax is becoming an annual ritual for me.

Landfills are a blight on our society. It is not pleasant to live near one—even a well-regulated one—and it is good that we are considering how to pursue landfill taxes. My particular concern is, as it was previously, about the effectiveness and enforcement of the rates and the recovery of the taxes. As we heard from my hon. Friend the Member for Ealing North, there is still a considerable gap in collection rates, and that must be addressed if we are to treat people properly and minimise the impact of landfill sites.

The Minister may know about Operation Nosedive, which HMRC pursued with great fanfare in my constituency only to drop it quietly six years later. Earlier this year, on 12 January, we had a debate to consider that operation and the wider implications of landfill tax fraud. The joint unit for waste crime was established following the failure of Operation Nosedive, which, incidentally, cost HMRC £3.5 million in public money. There are huge tax implications here. Will the Minister comment on what is being done to close that tax gap?

As I said, landfill sites are not good, and it is good that we do all we can to reduce their environmental impact, but there is also the matter of reducing the gap between what is collected and the expectation, by ensuring that those moneys are recovered. Will the Minister comment on that and on how many enforcement actions and prosecutions have resulted from the work of the joint unit for waste crime on landfill tax?

Council Tax and Stamp Duty Alternatives

Aaron Bell Excerpts

Wednesday 17th May 2023 Westminster Hall

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is an honour to serve under your chairmanship, Mrs Harris. I congratulate my hon. Friend the Member for Barrow and Furness (Simon Fell) on securing this debate and putting forward the case so adeptly in his opening remarks. I do not intend to repeat them. I have spoken in favour of Fairer Share’s proposals in the past, and I think there are more things that we can do besides. I also note that the Housing, Communities and Local Government Committee report from July 2021—I think my hon. Friend the Member for Cheadle (Mary Robinson) was on the Committee at the time—suggested that the Government look at this area.

I welcome all the refugees from the Finance (No. 2) Bill Committee who are in the Chamber. It is a pleasure to support the Government on that, but what we are trying to do today is steer them towards ways in which they can improve our tax system in the future. I am sure the Minister will be taking notes.

I pay tribute to Fairer Share, Andrew Dixon and the people behind that campaign, for the work they have done devising the policy and producing the straight-forward numbers at the top of it, as well as for thinking incredibly hard about its implementation challenges. They have addressed the issue of valuation, which my hon. Friend the Member for Barrow and Furness referred to, and thought about how to phase it in, how to manage the revenue flows and how to manage the impact on councils. That work has been done in advance of the Treasury considering the policy. I am sure that the Treasury would look favourably at the various reports commissioned by Fairer Share, as ways in which the policy could not only be brought in but implemented in a practical way.

I will quote a few figures that reference my constituency of Newcastle-under-Lyme. Under the proposals, the average household in Newcastle-under-Lyme would gain about £600 per year, and 97% of my constituents would be better off under this regime. We know that council tax hits constituencies such as mine and those of many hon. Members here today harder, partly because it relies on that 1991 valuation. There has been a disproportionate property boom. Prices have risen everywhere, but disproportionately in the south of the country. Therefore, people in constituencies such as mine and that of my hon. Friend the Member for Barrow and Furness are paying a far greater proportion of their property’s value in their annual council tax.

I do not want to go through all the details, because I am mindful of your strictures on brevity, Mrs Harris, but I think that moving the burden of council tax to the owner of the property rather than renters is a sensible step, not only to take a little bit off the renters’ plate, but to make life easier for councils’ collection departments, because the house is sold far less frequently than the lease changes. It is a difficult job for council collection units to keep up with those changes and ensure that people do not fall behind with their council tax when they move into a property. We all have constituents who have fallen behind with their council tax, and it can be very difficult for them to recover.

This policy would complement the Government’s levelling-up agenda. Newcastle-under-Lyme has been very fortunate, receiving more than £35 million through the towns fund and the future high streets fund to level up. I always say that levelling up is not just about nice new buildings and transport links; it is also about jobs and skills. We have to get the tax part right for levelling up, too. A policy like this would mean levelling up across the country for anyone in those poorer, lower-middle-income households. It would mean a £556 annual tax cut for 19 million people in those households. It would mean the Treasury’s approach dovetailing with that of the Department for Levelling Up, Housing and Communities, in terms of the direct support given to communities such as mine. This would give direct support to families living in those communities, and families living in lower-priced houses throughout the country. It would be genuinely levelling up across the country.

Finally, I will say a quick word on stamp duty, which my hon. Friend the Member for Barrow and Furness did not cover quite so much in his speech. We hear a lot about the housing crisis and the need to build more houses to address that. In my view, downsizing is key to solving our housing crisis in this country. Obviously, people live in houses, but, in a real sense, people live in bedrooms, because someone needs a bedroom to sleep in. We have an appalling allocation of bedrooms in this country. Understandably, many people, including retired couples, still live in the house where they brought up their children. That might be a four-bedroom house in they are using only one bedroom. There are so many unoccupied bedrooms in the private sector.

This reform to stamp duty would address the impediment of stamp duty itself being a reason that people do not want to move home—it is expensive to move, even if downsizing, particularly in the south-east. The reform would also provide a strong incentive for people to downsize to a lower-value home. For all those reasons, I hope that the Treasury is listening to my hon. Friend’s proposals. I am fully in support of the motion.

[Several hon. Members rose—]

--- Later in debate ---

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

It is a pleasure to speak in the debate with you as Chair, Mrs Harris. I thank the hon. Member for Barrow and Furness (Simon Fell) for securing it, and I particularly thank my hon. Friends the Members for Leeds East (Richard Burgon) and for City of Durham (Mary Kelly Foy) for their contributions.

I am sure we will shortly hear from the Minister about whether the Government have any plans to introduce a new system of property taxation. However, if they were to agree to develop and implement a new system, it would clearly take some time. They could already be helping working families by freezing council tax this year, which could be funded by strengthening the windfall tax on oil and gas producers. As the Minister will know, I and my colleagues have been deeply concerned about the increase in council tax that the Government have forced on local authorities and households this year. That tax rise has taken the bill for a typical band D property above £2,000 for the first time. It comes in the middle of a cost of living crisis and from a Government who have been responsible for 24 tax rises and for making the tax burden the highest in 70 years. At the same time, they have refused time and again to close gaps in the windfall tax on oil and gas producers’ unexpected and excessive profits. We have long said that it cannot be right for the Government to leave money on the table like that while pushing up taxes yet again for working people across the country.

The debate is focused on stamp duty as well as council tax. The last time the Government made significant changes to stamp duty was in autumn last year. The main change was to increase the nil rate threshold for stamp duty payments on residential properties, effectively by removing the lowest band. The changes were introduced by the previous Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), under the brief premiership of the right hon. Member for South West Norfolk (Elizabeth Truss). They were continued by the current Chancellor and Prime Minister—albeit on a time-limited basis—at a cost to the public finances of £1.7 billion a year. We opposed those plans and made it clear at the time that it would not have been right or responsible to support them. Given that our economy was reeling from the long-term damage the Government had done, with current and future homebuyers facing a Tory mortgage penalty, this was not the time to spend £1.7 billion a year on that tax cut. Despite that, the Government pushed ahead. So when it comes to stamp duty, it is clear that they do not have a record of spending public money wisely.

[Aaron Bell]

I am interested in what the hon. Member just said. Would a Labour Government put the stamp duty limit back to where it was—a tax penalty for millions of Britons?

[James Murray]

As I said, we opposed the stamp duty cut because it is not a way to spend public money wisely. We are clear that a Labour Government would spend public money wisely, making sure that we eased the burden on working people, who are suffering the highest tax burden in 70 years. I will be interested to see whether the Minister attempts to defend the mini-Budget stamp duty changes. Will he also defend the Government’s council tax rise and their failure to strengthen the windfall tax?

I will conclude, because I am conscious of the time. The Opposition believe that our country needs a tax system that is fairer, not one in which an ever greater burden falls on working people, and that is what we will continue to fight for.

Finance (No. 2) Bill (Second sitting)

Aaron Bell Excerpts

Committee stage
Tuesday 16th May 2023 Public Bill Committees

[Victoria Atkins]

They are taxed, as UK taxpayers are taxed, on their UK income—that is the point. The hon. Lady will know that the threshold for the additional rate was lowered from £150,000 to just over £125,000 at the autumn statement. That will apply to the UK income tax of those who are earning here in the UK. That is precisely the point; the difference relates to their foreign income. We want to help these very mobile and very successful people who work for banks or in the movie and sporting worlds, and we want to help those who work for the various businesses to which the hon. Member for Ilford South referred to help us to build the best tech industry that we can possibly have. We want them to help us to build incredible life sciences solutions.

If the hon. Member for City of Chester took a bit of time to talk to some of the individuals involved in the life sciences industry—that golden triangle between Cambridge, Oxford and London—she would know that what they do is genuinely inspiring. Why on earth would we not welcome people from overseas to help us in that? That little golden triangle has more tech companies in it than any place on the planet other than New York and Silicon Valley. If those places are our competitors in the tech industry, we are doing very well indeed. We want to encourage more of them to come to our country to help us to build that.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to serve under your chairmanship, Ms McVey. The Opposition already seem to have spent the money from this claimed non-dom bonus a dozen times over, by my count. The Minister referred to the University of Warwick research, which I have referred to during various debates in the main Chamber. If the Treasury analysis is that that research—that 0.3% figure—is misguided, is it not the case that the magic pot of money that the Opposition keep spending does not actually exist?

[Victoria Atkins]

My hon. Friend brings a particular fervour to his intervention, if I may say so. I absolutely want very high-earning people to pay their proper taxes here in the United Kingdom, but we need to stay competitive, which is why we look at other countries around the world. Our competitors have regimes that give tax advantages, or they are more careful with the tax that they apply, to people who are so highly mobile. I want to bring those people to the UK and get them to pay UK taxes on their UK earnings.

Finance (No. 2) Bill

Aaron Bell Excerpts

Committee of the whole House
Wednesday 19th April 2023 Commons Chamber

[Kirsty Blackman]

It is a delight to speak first in Committee of the whole House this afternoon. I had a few extra minutes to tweak my speech during the ten-minute rule Bill, as it is unusual for such a Bill to be opposed, and those extra few minutes will presumably have made my speech extra good. I am sure the whole Committee will listen very closely.

I rise to speak to amendment 21 in my name and in the name of my SNP and Plaid Cymru colleagues, but I will first talk about new clauses 4 and 5, which were tabled by the Opposition. The new clauses would require a review of the impact of the abolition of the lifetime allowance charge, with new clause 4 focusing on NHS doctors and new clause 5 looking more widely.

A significant number of questions have been raised in the House about the lifetime allowance and the problems it has caused, particularly for NHS doctors. I do not think any Opposition Member would consider that the solution to this problem is to abolish the lifetime allowance charge completely, which seems totally out of proportion. We have been raising this very serious issue for a number of years, but I never considered arguing against this solution because it never crossed my mind that the Government would do something quite so drastic or extreme.

New clauses 4 and 5 both ask for reviews, statements and information. Particularly pertinent is information on the number of NHS doctors who will benefit from the abolition of the lifetime allowance charge, as is a report containing recommendations in the light of a review of the effect of abolishing the lifetime allowance charge. The least the Government can do, if they are to make such a massive change to the lifetime allowance or the pension tax system, is provide us with as much information as possible so that we can consider all the potential and actual implications. We would then have all the information at our fingertips. The Government are able to access HMRC data in a way that the rest of us cannot, so we need details on the actual impact of these changes.

On the specific issue of NHS doctors, Torsten Bell of the Resolution Foundation has said that 20% of those who benefit from the change to the lifetime allowance work in the finance industry. He said that

“nearly as many bankers as doctors”

will benefit from this change. The Institute for Fiscal Studies has called it “bizarre”, stating:

“if this is aimed at doctors then it really is a huge sledgehammer to crack a tiny nut.”

That accords with our understanding.

Again, we agree that this significant issue for doctors needs to be fixed, but the Government are going about it in totally the wrong way. During the covid pandemic, we clapped NHS staff from our doorsteps. We recognise how difficult NHS staff had it working on the frontline during the pandemic, and how difficult they continue to have it. When other people were furloughed, they were working hard, day in and day out, to keep as many of us alive and healthy as possible, yet the Government are giving exactly the same break to bankers as they are giving to those who worked day in, day out to keep us all safe. That does not make sense. If we want to support our NHS, to ensure that we have the best possible public services and to give the NHS our vote of confidence, our backing and our support, we should recognise that those working in the NHS provide a vital public service and therefore deserve different treatment from those who work in the finance industry, for example, and who do not provide that level of public service.

I thank the Clerk of Bills, who was helpful in drafting these amendments. I knew what I wanted to do, but I was not quite sure how to do it, so I very much appreciated that assistance.

Amendment 21 would mean that the abolition of the lifetime allowance charge applies only to those employed by an NHS body for more than 15 hours a week, on average.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

We all respect the hard work of NHS staff, but why does that argument not equally apply to, say, senior police officers?

[Kirsty Blackman]

An awful lot of people work hard. The specific issue that many of our constituents have raised is in the NHS. I have not been approached with this concern by senior police officers, but I have been approached by NHS doctors. If the hon. Gentleman feels particularly strongly about senior police officers, he could table an amendment so that people employed in the wider public sector, or in the police service, can be included in this measure. I think both police officers and NHS staff could be included, but it would be ridiculous to include everyone, no matter how little they do for the public good.

--- Later in debate ---

[Aaron Bell]

It is a pleasure to follow my hon. Friend the Member for Poole (Sir Robert Syms). I rise to speak to clauses 18 to 25, which I support. I was unsurprised to hear that the Opposition do not support them. The shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting), told The Daily Telegraph on 2 September that the cap was “crazy”. He did not say that specifically about the NHS—although, as shadow Health Secretary, he obviously spoke about the NHS—but he called the cap “crazy”. He then said:

“I’m not pretending that doing away with the cap is a particularly progressive move… I’m just being hard-headed and pragmatic about this.”

Well, obviously that could not last. On the day of the Budget, the hard-headed and pragmatic approach from the shadow Health Secretary—the so-called “heir to Blair”—was handed over to the soft-headed and opportunistic approach that we saw in the response from the Leader of the Opposition. Actually, it was not in his response, because he had to go away and first check with some other people what the Labour policy was going to be, but Labour later came out against the policy, and has tabled amendments to strike the clauses entirely and replace them with new clauses, which I am sure the Government will oppose.

To address the point about progressiveness, it is absolutely asinine to assume that the only test of any fiscal measure is whether it is progressive. We seek to do lots of things with our tax system: incentivise people, grow our economy, grow our productivity. The measures proposed by the Financial Secretary to the Treasury today, and by the Chancellor in the Budget, will do that. We want to incentivise people to stay in work and return to work.

Like my hon. Friend the Member for Poole, I am not even sure that there will be a cost in the long run, because those who do not retire early will pay tax while they are earning their salaries. One big problem in our society is people retiring early with all the wisdom, experience and skills that they have at that stage of their careers. People are so productive in their 50s and 60s because they have accumulated so much knowledge, so to have people retiring early is a crying shame, not only for the country as a whole but for them, their patients and the people whom they serve in other ways. Also, those people will ultimately pay more tax when they claim their pensions; it is not a tax-free system. People might be exempt on entry into their pension scheme and exempt on returns, but they pay taxes when they draw their pensions, so taxes will be paid in the long run.

The hon. Member for Aberdeen North (Kirsty Blackman) made a point about bankers, which was ably answered by the Minister. We still have a tapering of the annual allowance for people who earn incredibly large salaries, of which there are a number in this country, although not many in my constituency. As many on the Conservative Benches have said, we do not seek to divide people based on where they work or the nature of their jobs. Our tax system works for everybody.

Our public sector has incredibly generous pension provision, as we have seen in recent discussions about strikes. That is why some people in the national health service, for example, have accumulated notionally very large pension pots. They are highly skilled, long-serving public servants who earn substantial salaries, particularly towards the latter end of their careers. If they have been on the scheme for a long time, they could be entitled to a pretty large pension, and we multiply it only by 20 to find out their defined benefit. So people in the public sector in defined benefit schemes are already better treated than people in the private sector, in which the same level of salary could not be purchased for £1.07 million.

I heard that argument from doctors, I put it to the Minister, and I am glad that the Chancellor listened in the Budget. I have heard the argument from others in Newcastle-under-Lyme that the system disincentivises people to continue working. We should be against that. Clause 18 abolishes the lifetime allowance, as we have heard. In clause 19, we quite rightly limit the tax-free lump sum. I do not think that it would be conscionable to have an unlimited lump sum, which could be abused. We also have a limit on the annual allowance and its tapering, so it would not be plausible for people with defined contributions on a normal career trajectory to challenge the sort of high numbers—£2 million or £3 million—that people are talking about. It is not just feasible for most people—unless they have exceptionally good returns from their pension investments—to achieve those sums in their lifetime.

Another iniquity of the current system is that people can stop paying into their defined contribution scheme and—if in a bull market, for example—have no idea how much their scheme might increase by. Obviously, that is down to investment returns, for people who do not know where they stand with their pensions right up until the moment of crystallisation.

As I said in my intervention earlier, and as my hon. Friend the Member for South Cambridgeshire (Anthony Browne) expanded on, there are all sorts of people who welcome this. They include people in both the private and the public sector, senior armed forces personnel, senior police chiefs, headteachers, people in the NHS and GPs.

Dr Richard Fieldhouse, chair of the National Association of Sessional GPs, said of the shadow Health Secretary’s comments:

“Each person’s pension fund is their embodiment of a lifetime’s worth of delayed gratification. So any measures to motivate people towards this is to be welcomed, particularly when applied to us as GPs”.

That is what pensions are—pay deferred. From the Government’s point of view, they are tax deferred as well. They are not tax waived or tax given away; they are tax deferred until the point at which the person, whether they work in the private or the public sector, gets the rewards for their labour.

That is why I support what we have done in the Budget. The measure will simplify things for people, save lives in the NHS and, more than anything, encourage people, whatever their job is, to stay in work for longer, and that is all to the good of the British economy.

Digital Pound

Aaron Bell Excerpts

Tuesday 7th February 2023 Commons Chamber

[Andrew Griffith]

It is indeed my aspiration to visit the hon. Gentleman’s expansive and rural constituency one day. Let me reassure him and the House that this long-term project will in no way take my or my officials’ time and attention away from any of the endeavours that have been put in place to promote access to cash. There are new powers in the Financial Services and Markets Bill, there are obligations on the regulators, and we are working with the banking industry and with Link.

As a Member who represents a rural constituency, albeit somewhat south of the hon. Gentleman’s, I fully understand the importance of access to cash for communities, for people who may be disadvantaged and use cash to budget, and for our increasingly elderly population. That focus remains, and it is not diminished by this longer-term project. As hon. Members, particularly Opposition Members, have highlighted, we have the opportunity to design in financial inclusion and to ensure that no matter who someone banks with, they can benefit from the UK digital pound.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I thank the Economic Secretary for his statement and for the consultation. Perhaps it is apt that it is being launched on the day we have a new Department for Science, Innovation and Technology. That shows that this Government are taking the long view, as well as managing the short-term pressures that we are going through.

The Economic Secretary mentioned public trust, which will be crucial. In launching the digital pound, what measures will the Government be willing to take to safeguard people against the risk of scams? As we have seen with cryptocurrencies, with bank cards and with online banking, people are vulnerable to scams when things are new. What measures do the Government envisage to ensure that launching a digital pound does not put people at risk?

[Andrew Griffith]

My hon. Friend makes two important points. The first is about the long-term nature of this Government, whose focus on delivery extends to the Prime Minister’s organisation of Departments to ensure that they deliver the outcomes that the British people expect.

My hon. Friend also highlights the importance of financial education. I can commit that, as part of the national dialogue on this important issue, we will give thought to how we ensure that we educate our citizens to prevent them from falling prey to the terrible financial scams that people are trying to perpetrate in the financial system today.

Non-domicile Tax Status

Aaron Bell Excerpts

Tuesday 31st January 2023 Commons Chamber

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to follow the hon. Member for St Helens South and Whiston (Ms Rimmer). On the wording of the motion, I cannot really add much more to the comments from my right hon. and learned Friend the Member for Northampton North (Michael Ellis). The Opposition know perfectly well that analysis from officials is confidential for a very good reason: to make sure that Ministers have the best possible advice without second-guessing what that might look like in the public domain and potentially affecting markets.

Turning to the substance of the non-dom situation, I really think this is a case where Labour is chasing a mirage. The Government could do with raising more tax if that low-hanging fruit, that £3.2 billion, was really out there, because of the present fiscal situation as a result of the money we have spent protecting people’s livelihoods during covid, through the furlough scheme, and on supporting people with high energy bills this winter. We could do with raising more tax easily, if it was really there.

The hon. Member for St Helens South and Whiston spoke about the LSE and Warwick research, but I do not find that figure of 0.3% very credible because it refers to fewer than 100 people who would consider leaving because of all that additional tax on them. That figure has been extrapolated from the behavioural response to the previous changes, but those changes were more modest. They were modest because the Government took their decision for the same good reason that the previous Labour Government did: looking at the issue in the round, they concluded that this would not be a revenue raiser and it would not be good for the economy overall if we drove people abroad.

The shadow Minister, the hon. Member for Ealing North (James Murray), said that when people make their home here they should pay all their tax here, but those non-dom people would not make their home here —they would not come and invest in this country or employ people in this country—if they had to pay tax in that way. That is the key point. We cannot assume that all that low-hanging fruit is out there without assuming the behavioural responses that would follow.

Talking about non-compliance more generally, as the shadow Minister did in his speech, this Government have tackled non-compliance consistently since they came to power, with more than 150 measures since 2010. The estimated avoidance gap under Labour in 2005-06 was £4.8 billion. It was down to £1.2 billion in 2020-21 under this Government. That is already more than the £3.2 billion the Opposition are claiming is available.

The wealthiest have been paying more under this Government and we have been taking the poorest out of tax altogether, contrary to what we have heard from the Opposition. The personal allowance that we inherited in 2010 was £6,475; it is now £12,570, and we have raised the national insurance level as well. We have taken many people out of tax altogether and at the same time ensured that the poorest—the least well-off—are earning more when they are working because we have consistently raised the national living wage. Those are Conservative principles in action: real changes rewarding work and letting people keep more of their own money to spend as they see fit.

Labour obviously aspires to government, about which there have been increasingly cocky briefings in the press, but government is not about easy slogans. It is about taking decisions in the best long-term interest of the UK. It is not about soundbites, party management and trying to buy off the people in Momentum. I might have thought Labour would learn from the last Labour Government. People like Gordon Brown, who considered a five-year cap but abandoned it. People like Alistair Darling, who said that

“such a charge could discourage men and women—doctors and nurses, business men and women—from coming to this country…and we do not want to turn them away.”—[Official Report, 9 October 2007; Vol. 464, c. 171.]

People like Ed Balls, who said:

“I think if you abolish the whole status then probably it ends up costing Britain money because there will be some people who will then leave the country.”

I am sure the shadow Minister admires all those former Labour Ministers, and I am sure he and the shadow Chancellor aspire to the jobs they once held, so why are they going down this road? Because it is an easy, if inaccurate, response to the question they cannot answer: how will they pay for whatever fresh commitment they have made in any given week?

[Anthony Browne]

My hon. Friend is making an excellent speech. Does he agree that Labour is playing the classic Labour game of class war as a mirage to try to gather votes from the left?

[Aaron Bell]

The right hon. and learned Member for Holborn and St Pancras (Keir Starmer) has a difficult balancing act, because he has to hold his party together. He made a lot of promises to the left to win the leadership, and he has junked them all, so he is giving them a little red meat on non-dom status to try to keep them on board. I am sure there is a lot of party management happening on the Labour Benches.

Labour has already committed the supposed revenue from this policy to multiple policies. First, it was breakfast clubs, and then it was midwives, nurses and health visitors. The shadow Health Secretary had to admit that, even on Labour’s questionable estimates, the funds supposedly raised would not be enough to cover its NHS reforms. Time and again, Labour Front Benchers and Back Benchers alike hide behind this dubious policy, which I fear is a mirage in terms of the money it would raise, to justify yet more uncosted pledges. Labour has made so many uncosted commitments already: £150 billion of spending and less than £60 billion of revenue rises. We have heard £90 billion of uncosted commitments from Labour in this Parliament, which would cost each household more than £3,000.

That is what we get under a Labour Government, which is why we need to stick with a Conservative Government. Labour has never left office with unemployment lower than when it came to power and, of course, it cannot be trusted with the public finances, as we know from the note left by the right hon. Member for Birmingham, Hodge Hill (Liam Byrne): “there is no money.”

We will get the debt down, we will halve inflation and we will get growth going again. Voting for Labour would put all that at risk.

Landfill Tax Fraud

Aaron Bell Excerpts

Thursday 12th January 2023 Commons Chamber

[Mr Jones]

I am grateful to the hon. Gentleman for this intervention. The frustration is that we do not need new legislation; we just need Government action to fund and implement the existing powers.

My next point, which will also affect the hon. Gentleman’s part of the United Kingdom, is about the effect on local communities. I know that my hon. Friend the Member for Blaydon (Liz Twist), the hon. Member for Newcastle-under-Lyme (Aaron Bell) and the right hon. Member for Haltemprice and Howden will mention specific examples from their constituencies of where local communities feel powerless to stop the huge environmental damage being done to the area. However, this is not down to any lack of trying by those right hon. and hon. Members, who have campaigned for change for many years.

The PAC report estimates that the cost of landfill tax fraud and waste crime is about £1 billion a year. However, that figure is just like me sticking my finger in the air, because basically no one knows. That is a conservative estimate, and the reason for that, as the report says, is that we have basically given up trying to monitor what is happening.

How does landfill tax fraud work in practice? There are strands to it. The first is the way in which the tax was implemented. There are two rates, and those rates went up between 2008 and 2014. The rate for inert or inactive waste is currently £3.15 a tonne, and the standard for ordinary waste is £98.60 a tonne. The first element of criminality involves saying that waste is inert when it is not. There is no monitoring at all, so people are instantly making a fortune by avoiding taxation. The incentive for misdescription of waste is the huge gap between the two rates. The Environment Agency does not really enforce this, and I am sure that boreholes would reveal that inert-waste only sites will contain other waste. The problem is that we do not know what is in such sites, which is a future environmental problem.

The second strand is illegal sites without a licence, for which there are no real sanctions. People can buy a field or an old quarry and keep filling it, and they do not pay any landfill tax.

The next method is far more sophisticated, whereby criminal elements buy or set themselves up as legitimate waste operators. Is that easy? It is, because there are no restrictions on who can become a waste operator. If someone buys an existing business or a quarry, they can label it and say they are going to collect waste, but who is checking? People can run two scams. They can declare active waste as inert, and they can just declare half of what they are putting in.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I thank the right hon. Gentleman for securing this debate. He is absolutely right that someone with no qualifications can set up or, indeed, take over a site, and there will be no checks as to whether they are fit and proper. They could have a criminal record within the waste sector itself, as was the case at Walleys Quarry in my constituency. The Environment Agency appears powerless to do anything to stop such people operating landfills.

--- Later in debate ---

[Mr David Davis]

The right hon. Gentleman is right, and I will come back to the incentives—both criminal and legal—that are built in against legal operators.

The right hon. Gentleman also spoke about the powerlessness of communities. Again, I can exemplify that point. We thought we had scored a victory by taking the Niramax associate Transwaste to court over the Gilberdyke site and winning our case that it had breached a whole load of conditions. We won the case, but did my constituents see any improvements? No. Were the problems addressed in court fixed or enforced by the agencies? No. Did the behaviour of the operators improve? No. The courts proved powerless and so the community certainly felt powerless, again because there was no proper enforcement. That goes back to the point that the right hon. Gentleman made in response to the hon. Member for Bristol East (Kerry McCarthy) that this is not primarily about changing the regulations or the law, but about changing the mode of operation of the agencies involved.

Precisely because they cheat and evade payment of landfill tax, criminal companies can undercut other businesses, picking up waste and charging a pittance for it, knowing they will make up for it in illegal returns. In the case of Gilberdyke, locals reported that lorries were flooding the area from Wembley, south Wales, south-west Scotland and Manchester. It is expensive to transport this stuff. Why would it be transported that far unless there were some enormous unfair—not to mention illegal—advantage for the operators? That is what is going on there.

Some of my constituents who are very qualified people monitored that site and estimated that between £50 million and £60 million in landfill tax was being evaded while those lorries were flooding the area. That is at one site alone. This activity involves the destruction of my constituents’ quality of life and the destruction of the local environment, all in pursuit of illegal profits, yet so little action is being taken.

The right hon. Member for North Durham quoted the Public Accounts Committee saying about the Department for Environment, Food and Rural Affairs in October last year that

“the approach to large parts of waste crime is closer to decriminalisation.”

I make the point, as a past Chairman of the PAC, that the PAC is careful about what it says about Government operations. It is careful that it is factually based, and it bases everything on the National Audit Office reports and so on. For the PAC to accuse an agency or Department of effectively decriminalising something as serious as this is in itself an enormously powerful and worrying statement. That quote will strike a chord with those of us who have had to observe the appalling weak record of enforcement of the Environment Agency, even with legal operators, frankly. We are not talking about legal operators today, but even with legal operators, the Environment Agency is weak, let alone those who need to be cracked down on. That fact, again, is reinforced by the data. The number of prosecutions for waste crime generally—not tax evasion, but waste crime generally—have fallen by more than 90% since 2007-08. As the right hon. Gentleman said, there have been no prosecutions whatever for landfill tax fraud.

With Operation Nosedive—like the right hon. Gentleman, I wondered about the name, where it came from, and whether it was making a prediction about its own success—I have to say that its failure was written in from the beginning. It was a failure from the start. HMRC, the Environment Agency and the Crown Prosecution Service were simply not working together properly to investigate and prosecute the gangsters. They simply were not doing the job as a coherent group of people. The NAO told me that HMRC and the CPS admitted as much, and that is why no prosecutions were taken forward. The problem is that this failure and the ongoing increases in the rate of landfill tax mean that illegal profits are only increasing. Given how landfill tax is structured, if evasion is not stopped, then every time landfill tax goes up to improve the environment, the criminal is actually incentivised more by a bigger comparative advantage against the legitimate operators.

[Aaron Bell]

The story of Niramax seems to foreshadow much of my experience in Newcastle. The Minister will appreciate, as an economist, that Gresham’s law says that bad money drives out good, and is that not exactly what is happening in the waste sector? Legitimate firms are being driven out of the sector, with the result that more and more criminals are acting in the sector, making it harder for people to dispose of their waste legitimately, even if they want to.

[Mr Davis]

That is absolutely correct. I am sure Gresham did not have in mind blackmail and threats as well, which also come into it when the operation becomes criminal rather than legal. The joint failure of HMRC and the Environment Agency led to theft from the public purse—it is as simple as that—the devastation of public spaces, and the undermining of public confidence in this whole policy area. Ostensibly, the issue is that HMRC is focused on the collection of tax, while the Environment Agency is following a remit to manage waste. That is the excuse given, if you like. Frankly, it is extraordinary that the Environment Agency would not collect data on a tax designed to incentivise good waste operation. That is its purpose, so why on earth is the Environment Agency not monitoring that carefully? If it is not working, it is a failure of its own remit.

--- Later in debate ---

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to follow the hon. Member for Blaydon (Liz Twist), whose constituents experienced many of the same problems mine have, albeit a few years before, and to follow two excellent contributions from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for North Durham (Mr Jones). I was pleased to go with them to the National Crime Agency last year to try to get these issues taken more seriously. I pay tribute to all the work the three Members who have spoken today have done over the years, before I was a Member of this place, to try to get this issue taken more seriously.

It is a serious issue. It is not just the cost to the public purse—that has been spoken about many times already—but the cost to our constituents, and to their lives and physical and mental health. That is what people in Newcastle-under-Lyme have been suffering, as I have repeatedly brought to the House’s attention over many years.

The failure of the investigations and of the ill-named Operation Nosedive only emboldens the people in this space. The firm that operates Walleys Quarry, Red Industries Ltd, had a failed prosecution against them, regarding a separate site of theirs, by the Environment Agency over an incident in which cyanide leaked into the River Trent in October 2009. After many years, the Environment Agency conceded the flaws in its case, which were probably caused by insufficiently advanced legal advice, to which the right hon. Member for North Durham referred. That only emboldened the firm—we can see that if we look at the press releases crowing over the failure of the EA’s prosecution—to think that it can get away with things and that it will not be held to account by those who should hold it to account.

We need to learn all the lessons of Operation Nosedive, the incident in the Trent, and all the other occasions where we have failed to prosecute landfill tax fraud, or other forms of waste crime. The fact that there has never been a successful conviction for landfill tax fraud is astounding when we consider the depth of criminality that we have exposed in the waste industry. I exposed some of it in the Westminster Hall debate that I led on 1 February last year—the right hon. Member for North Durham and my right hon. Friend the Member for Haltemprice and Howden both spoke in that debate and referred to it in their speeches.

Perhaps I can briefly update the House on where we are with Walleys Quarry, because it is germane to the debate—I will not repeat the full history, Mr Deputy Speaker, having already secured Adjournment debates, multiple Westminster Hall debates, a ten-minute rule Bill and all the rest of it. What my right hon. Friend said about the Environment Agency’s fear that action might make the problem worse is well founded. It did monitoring and said, “Nothing to see here.” It was reluctant to do further monitoring until eventually it was forced into it by a combination of me and the council leader, Simon Tagg. Once it conceded there was a problem, the idea that we might take the permit away from these people, who continually fail, was barely even discussed, because it wanted to ensure that the company managed the site. I understand that as a strategy, but it sticks in the craw of all the local residents, who can see what is happening. They can see the trucks coming from hundreds of miles away—from Scotland and the Lake district—to bring waste to Walleys Quarry. They are monitoring trucks going in at the wrong times of the day, dumping before they are supposed to. There are so many little breaches along the way that stick in the craw of people. They know that the site is under investigation, yet the company is continuing to make money from its operations. I know how painful that is for my constituents, who have suffered with living with the odour. Walleys Quarry is particularly notorious for its odour. We have had by far the single worst odour problem in recorded history—I believe that the previous record belonged to a site in Chorley, Mr Speaker’s constituency. Our site has broken all records. We have had four Environment Agency monitoring stations ringed around the site for the last couple of years.

I am pleased to report that the odour is diminishing. That is because of the work that the Environment Agency has compelled the operator to do. As far as it goes, that strategy is fine. However, the second part of the strategy needs to be to throw the book at the operator. It has been issued with multiple breaches in the last few years, all of which have required it to do work and said, “We reserve the right to take further punishment action later.” We are waiting for that punishment action to happen.

In fact, in Newcastle-under-Lyme, we have two investigations going on into Walleys Quarry. There is the criminal investigation, which was announced in December 2021. I understand that that will take a long time because it is complex and many counterparties are involved. It is all about misdescription of waste, which is a much wider problem and investigation for the EA. There is also the regulatory investigation announced in September, which I raised with the Secretary of State at Environment, Food and Rural Affairs questions shortly before Christmas. We need to get some results on that more quickly because regulation should be the EA’s bread and butter. It needs to start holding the company to account for the failures.

The odour problem has been getting better. We are catching more than twice as much gas as we were—we have the figures—and the EA has mandated capping in additional wells. That is not to say that it never smells. It did smell a bit in December, particularly when the temperature fell below zero; those are the conditions where the odour gets a lot worse.

I congratulate Newcastle-under-Lyme Borough Council, under the leadership of Councillor Tagg and chief executive Martin Hamilton, who took the bold step—it was almost unprecedented for a local authority—of pursuing an abatement notice against the operator. It is difficult to do that because prosecuting an abatement notice needs the consent of the Secretary of State; it is a regulated site and it has the permit with the EA. However, the impact on our residents in Newcastle was so severe that the council felt it had to do that. It was able to bring that to a successful conclusion with the operator, who initially appealed but ultimately accepted the decision, following consultation and discussion. I think that was the first proper concession that Walleys Quarry Ltd and its parent company Red Industries has made that its site has been responsible for the unacceptable odour.

We need to get those investigations pursued with all deliberate speed. I am grateful to the EA for giving me a briefing on them on Monday. I appreciate that the Minister is from the Treasury and not from DEFRA, but we do need to see all pressure put on the Environment Agency to get those investigations brought to a conclusion as soon as possible so that my constituents can start to see some justice, some accountability and potentially some compensation, whether through Government or through the class action lawsuit that a number of them are considering, because of the impact on people’s quality of life and health, exacerbating pre-existing conditions such as chronic obstructive pulmonary disease and asthma and exacerbating pre-existing mental health conditions of anxiety and depression. It has been phenomenal. I laid all that out in the Adjournment debate, so I will do not so again today. However, even in the most recent month, there have been more breaches of the permit.

[Matt Rodda]

Does the hon. Gentleman want to say a little about the disruption and concern caused by heavy vehicle movements near the site? That is of huge concern around the country. In my area, we recently had planning permission granted for an incinerator in West Berkshire. The road access is likely to be through Reading town centre. Many of my residents are concerned about that. I would be interested to learn how his colleagues have helped to tackle the problem in Staffordshire.

[Aaron Bell]

I thank the hon. Gentleman for his intervention. That has been a significant problem in Newcastle. There have been accidents on the road outside the landfill caused by lorries backing up along the road. Firms opposite have complained that people have had problems accessing their businesses. An arrangement has been recently made through a variation to the planning permission to allow vehicles on to the site before the 7 am opening time so that they can at least queue on the site rather than on the road. There is also state of the road and the mud that some vehicles have left on it. There is a wheel wash that vehicles are supposed to go through when they leave. It is clear that it has not always been working. The county council has had to write on more than one occasion to the operator demanding that it cleans up the local roads as well. Traffic and the state of the roads are significant issues, and I wish the hon. Gentleman well with his efforts to represent the people of Reading in the situation with the incinerator to which he refers. The impact is not just about odour; it is about the whole operation and its interference with people’s quality of life in the surrounding villages.

As I was saying, there have been far too many breaches and they are still ongoing. Even under intense scrutiny, with four monitoring stations and regular Environment Agency visits—including unannounced visits, which I welcome—the operator is still being found responsible for more and more breaches. I pay particular tribute to Stop the Stink campaigner Dr Mick Salt, who has brought several such breaches to the public’s attention via freedom of information requests.

The operator’s continual failure to comply with the conditions of its permit, even under such intense scrutiny, is staggering. It surely only strengthens the case for stripping it of the permit altogether when the investigation concludes. I will continue to fight for my constituents and fight to ensure that the operator and the EA are both fully held to account and that we get some appropriate action in response to the misery that the landfill has visited on Newcastle-under-Lyme residents, particularly those who live closest.

Let me turn more specifically to the subject of today’s debate: landfill tax fraud, to which I referred in the Westminster Hall last February. The problem, as I said in my intervention on my right hon. Friend the Member for Haltemprice and Howden, is that bad firms are driving good ones out of the industry. I have spoken to legitimate operators in Stoke-on-Trent who are upset that they are trying to do an honest job but cannot compete with the firms undercutting them.

Fundamentally, most people will take assurances from firms that say, “Of course we’ll handle your waste legitimately, don’t worry about that—and here’s a nice price for you.” A lot of people will be guided by that, so the regulator needs to step in. People need confidence that a regulated firm will be regulated. They should not need incentives to go to one firm or another because of ethical considerations; they should be able to trust that any firm in a regulated space is operating honestly and ethically.

As we heard from the right hon. Member for North Durham, the landfill tax differential has gone up to more than £95 per tonne. When the charge was first introduced in 1996, there was only a £5 differential; the rates were £2 and £7. I welcome the fact that landfill tax has reduced the overall amount of waste going to landfill, but it has obviously created strong incentives for misdescription.

Not only is standard waste being misdescribed as inert, but waste is going to landfill that should not be there at all. In the debate last February, we heard examples from a journalist’s research that included cavity wax, arsenic, zinc and even rat poison going into Walleys Quarry. I know that those allegations have been put to the Environment Agency and I am sure that they will be part of the criminal investigation, so I do not want to comment further on them today, but the problem is that charging £100 a tonne for waste is increasingly incentivising misdescription.

[Mr Kevan Jones]

It never ceases to amaze me that these things happen even when the Environment Agency understands the problem. I referred earlier—I was racking my brains for the figures—to fires at waste transfer stations and landfill sites, which are another way in which operators get round the regulations. Burning waste to get rid of it is a common practice, but the Environment Agency just seems to turn a blind eye. Not only is there an effect on the environment when operators burn what they should not be burning, but they avoid landfill tax.

[Aaron Bell]

The right hon. Gentleman is absolutely right. With illegal landfill sites in particular, we can almost rely on there being a suspicious arson attack. Getting the fire services involved is often the quickest way to get these problems resolved, because operators know that they and not the Environment Agency will ultimately be the ones involved in cleaning up. My constituency also has a notorious illegal waste dump at Doddlespool farm; I do not want to detain the House for too long, but we have seen all these things going on, with all sorts of impacts on the environment from vermin and all the rest of it.

Fly-tipping is forecast to have probably the greatest overall financial impact, although it is very difficult to get the numbers. The national tax gap for HMRC overall is estimated at 5.1%, but the landfill tax gap was 17.1% in 2020-21 and in previous years it has been more than 20%. That is equivalent to £125 million, which is only a part of the overall billion-pound estimate of the cost of waste crime. That does not even really take into account the cost of fly-tipping; it is about tax that should have been collected but has not. Things that are completely illegal fall somewhat outside the tax gap calculations, as I understand it.

[Mr David Davis]

My hon. Friend has talked of perverse incentives. As far as I am aware—and, as I have said, I served as Chairman of the Public Accounts Committee for five years—this is the clearest example of a strong incentive for good policy turning into a strong perverse incentive against that good policy, off the back of enforcement. When the Treasury assesses how much it puts into enforcement, ought it not to take that full spectrum of effect into account?

[Aaron Bell]

I could not agree more. I cannot remember who it was who mentioned the Environment Agency earlier, but there has been a cultural problem with enforcement, and I should like to see HMRC step up and assist. There is a long tradition of the taxman being the man who catches perpetrators of organised and serious crime in the end, but it is not happening with waste crime. I shall say more about that later.

In a statement to the House on the 18th report of the Public Accounts Committee, my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) said that Jim Harra had assured the Committee that the tax gap was so large because the scope of landfill tax had been widened to include illegal waste sites. However, if fly-tipping were taken into account, it might be even larger. The summary of the report stated:

“Waste crime is known to be greatly under-reported, so the true scale and impact of the problem are even larger than official data suggest.”

As my right hon. Friend the Member for Haltemprice and Howden just pointed out, that is just the financial cost; we are not remotely taking into account the cost in terms of the impact on people’s quality of life. Perhaps if we do get a class action lawsuit, some financial numbers will be attributed to that in Newcastle-under-Lyme.

[Mr Kevan Jones]

Another area in which some action is belatedly being taken is the export of waste, which not only avoids tax but causes environmental disasters in some developing countries.

[Aaron Bell]

The right hon. Gentleman is entirely correct. Indeed, as I mentioned last February in connection with Walleys Quarry, there was a suggestion that waste that should have been exported for treatment in, I believe, the Netherlands was actually going straight into landfill. Export adds an extra layer of complexity for the Environment Agency and HMRC to get on top of, but get on top of it they must, because these operators are using all the tricks in the book to get their waste dealt with as cheaply as possible and maximise their profits.

When it comes to social cost, misclassified waste is, according to the EA, the most likely result of the smell at Walleys Quarry landfill, driven primarily by hydrogen sulphide created by the biodegradation of gypsum. The awful impact of that has been experienced by my constituents time and again. It was exacerbated during lockdown, when the smell was at its worst, but when we opened up again, people did not want to come into the town centre and use our pubs, bars and cafes, or even just do their shopping, because of the awful odour.

I have mentioned the health impacts, but there is also the long-term environmental unknown risk of waste going into landfill. We do not know exactly what is in Walleys Quarry; if the reports from journalists are to be believed, there could be all sorts of things in there. I have been given assurances that it is unlikely to cause any risk, given that it is all capped off, but not knowing what is in the ground is not a great state of affairs. The site should have been properly regulated ever since the permission was granted by John Prescott back in 1998.

I am conscious that I have been speaking for a while, so I will end my speech shortly. We need to look at what is being done, but also at what more needs to be done. The Public Accounts Committee report stated that action was being taken, but I believe it is taking place too slowly. We have seen the establishment of the joint waste crime unit, but we have not seen enough activity on the back of it. We have also seen helpful reports from the National Audit Office highlighting the severity of the problem. I understand that the Government accepted all the recommendations of the PAC report and will implement them, but we need to see a response to the HMRC landfill tax call for evidence. We do not know yet what will happen with that, but it needs to be structured in such a way that it achieves its legitimate aim of reducing the amount of waste going to landfill without incentivising people to take shortcuts.

The Department for Environment, Food and Rural Affairs, the EA and HMRC clearly need to work with relevant bodies within the criminal justice system to develop a plan for making enforcement more effective across the full spectrum of waste crime. That must include speeding the process up and—this is very important—consideration of whether the sentencing guidance needs to be strengthened. The inadequacy of the fines issued to companies and individuals is all too apparent. People who are doing tens or hundreds of pounds’ worth of damage—and that does not even allow for the social cost—are being hit with only hundreds of thousands of pounds-worth of fines, and there are very few cases in which people go to prison.

On top of that, we need to consider whether the bonds put up by operators are sufficient. The Environment Agency is worried about operators walking away precisely because it knows that the money put up in bonds is not sufficient for a local authority to ameliorate a site. We have had that exact discussion in Staffordshire about what would happen if the operator walked away from Walleys Quarry. Who would be on the hook for it, and how would we manage it? I pay tribute to the work done by councils to prepare for that potential eventuality, but it should not have to be like that. There should be enough money in the bond to fund the amelioration, if necessary.

It is clear from my many discussions with the Environment Agency that many of its officers agree there is a fundamental lack of deterrence. I am critical of the Environmental Agency’s culture, and I think it was far too slow to react when the problem got worse, but there is a feeling that people are getting away with it because they do not feel deterred by the sanctions. We need to look at that, too.

We need much tougher fines and the prospect of lengthy prison terms, and there needs to be a fit and proper person test for people seeking to operate landfills, whether they are setting one up or taking over a licence. All the agencies need to work together to deter waste crime and landfill tax fraud. I have often spoken to DEFRA Ministers about this, and I appreciate that a Treasury Minister is here because this debate is an HMRC issue, but I look forward to what he has to say about tackling landfill tax fraud, and waste crime more generally.

Given HMRC’s case load, it might look like there is more to be gained by working elsewhere, but we are losing out on hundreds of millions of pounds of tax, and on millions or billions of pounds of additional social cost. It is an incalculable loss that ordinary people who want to dispose of their waste cannot trust the sector, because they do not know whether their waste will be disposed of legally or illegally.

Some blue chip names deposed of their waste at Walleys Quarry. They were appalled to be identified as having done so by the reporting of journalists, and they stopped sending their waste there. No blame necessarily attaches to them, but it shows that, overall, the sector cannot be trusted.

There is a tradition, going back to Al Capone, of the taxman being the one who finally holds serious organised criminals to account. HMRC must step up and give the Environment Agency a helping hand, because the crimes with which HMRC can charge people carry much more serious financial consequences and, potentially, jail time. If HMRC learned the lessons of Operation Nosedive and looked to prosecute people for waste crime, it would be greatly appreciated by me, by my constituents and, I am sure, by the constituents of all hon. Members here today.

Energy (oil and gas) profits levy

Aaron Bell Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Tulip Siddiq]

I am afraid the hon. Gentleman has already had his chance.

What worries me is not just that the Government are failing to adopt fair and straightforward measures to fix the mess they caused, but the fact that there is no plan for growth. I was shocked to hear the Minister say how one of the principles is a plan for growth, because I heard nothing in the autumn statement about growth. We have heard from Conservative Members—I know they will keep repeating it—that this is due only to global factors.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

On growth, the Government are protecting our investment in research and development, and innovation, which is a long-term route to growth. The hon. Lady said that the hon. Member for Bootle (Peter Dowd) was correct about the deficit and debt, and it is astonishing that we are still having to educate the Labour party, 12 years later, about the difference between deficit and debt. This Government inherited a £149 billion deficit, and every measure they took to try to put that right was opposed by those on the Opposition Benches. No wonder the debt increased when we inherited so big a deficit. It is a good job we got that deficit down, because otherwise we would not have been able to cope with covid in the way we did.

[Tulip Siddiq]

I am not sure there was a question in that intervention. I thank the hon. Gentleman for his patronising lesson, but Labour Members do not need it. After 12 years of watching the Tories destroy the economy, I am afraid we do not need lessons from Conservative Members.

I am sure we will hear a lot today from Conservative Members about how only global factors are to blame for this country’s stagnant growth, but that is shameless. Everyone knows that Britain’s problems started long before covid, and long before Russia’s illegal invasion of Ukraine. Instead of endless Tory excuses, the public deserve an apology for being made to pay for the Government’s last Budget, which sent mortgage rates spiralling, and for 12 years of economic crisis from the Conservatives, which has left the UK completely exposed to external shocks, with inflation sky-high, wages stagnant and living standards in freefall.

When Labour was last in government—since the hon. Member for Newcastle-under-Lyme (Aaron Bell) mentioned it—the economy grew by an impressive 2.1%. Since 2010, under the Conservatives, growth has been 1.4%. Conservative Members speak about educating the Labour party, but perhaps they should educate themselves.

The Governor of the Bank of England told the Treasury Committee last week that the US economy has grown by 4.2% since the pandemic, and the GDP of eurozone countries is 2.1% higher, yet the UK economy is 0.7% smaller than at the start of the pandemic. Let us not just blame global factors. We are not performing well as a country, and let us be under no illusions: this Conservative economic crisis has been 12 years in the making.

After over a decade of stagnation, we are not recovering. Guess what? We are heading into a recession. This morning the OECD published its projections—these are not my projections but those of the OECD. First, it believes that the UK will have the lowest growth in the G20 over the next two years apart from Russia. Secondly, the UK is set to be the only OECD economy that will be smaller in 2024 than it was in 2019. Finally, it shows that we are the only G7 country that is currently poorer than it was before the pandemic.

Labour has a serious long-term plan to get our economy growing again, powered by the talent and effort of millions of working people and thousands of businesses. At the heart of that is our promise to invest in good jobs in British industries through our green prosperity plan. From the plumbers and builders needed to insulate homes, to engineers and operators for nuclear and wind, we will make Britain a world leader in the industries of the future, and ensure that people have the skills to benefit from those opportunities.

We are also pushing forward with our start-up review, which will untangle the problems holding new firms back, and help to make Britain the best place to start and grow a business. In government we will strive to fix business rates, and replace them with a fairer system that is fit for the digital economy and does not put our high street businesses at an unfair disadvantage. Our modern industrial strategy will support the sectors of the future, and an active working partnership with business. Finally, we will fix the holes in the Government’s failed Brexit deal so that our businesses can export more abroad.

Businesses across the country are supporting Labour’s plan for growth. [Interruption.] The hon. Member for Stoke-on-Trent North (Jonathan Gullis) is chuntering from a sedentary position, but he would do well to listen to the chair of Tesco, John Allan, who said that Labour is the only party with a plausible growth plan. The Federation of Small Businesses, which has endorsed our plan to fix business rates so that our high streets thrive, has warned that the Tories’ plans in the autumn statement were high on stealth creation but low on wealth creation.

--- Later in debate ---

[Bim Afolami (Hitchin and Harpenden) (Con)]

It is a pleasure to speak in support of this autumn statement. In the time available to me, I will talk about an issue that has come up a lot today, but I will talk about it in a very particular way to illustrate the problems we have with it. That issue is inflation.

Inflation is at the heart of our economic problem. Inflation is the reason why food prices are high. Inflation is the reason why energy prices are so difficult to manage. Inflation, as we have heard from many Members, is the core reason why the debt interest bill that the Government have to pay is now so high. We have heard a lot about the different global causes of this inflation, but it is worth making the point again that this inflation is happening in every single western country—it is happening in most countries in the world, not just western countries. We should never stop underlining that point. This is not about escaping political responsibility—I am not playing a party political game here—but we can deal with the problem only if we understand its true causes.

The first cause, as mentioned by my right hon. Friend the Member for North West Hampshire (Kit Malthouse), is about central banks and the policy of quantitative easing, which pumped several trillion pounds into the economy over the last 10 years. Regardless of people’s view as to whether that was necessary at the beginning as we came out of the financial crisis, many people rightly ask whether, if we—not just globally, but the Bank of England—expand the money supply to such a degree, it is a shock that, at some point, when there is an exogenous factor such as the war in Ukraine, inflation appears to be structurally embedded and higher than it was before. The Bank of England and global central banks, such as the US Fed and the European Central Bank, need to examine their policies over the last 10 years that have contributed to the global rise in inflation.

The second global cause of inflation is what has been going on in China. Its zero covid policy means that its growth rate this year is 3.2% or 3.3%, while its growth target is 5.5%. China tends to hit its targets—at least officially—so that shows that it is not soaking up global demand in the way that it did, which is also having a big impact. At the same time, it hurts supply chains across the world, particularly this country’s manufacturing businesses as well as others, which need China to be open.

Those problems have contributed to inflation, but I do not want to focus on them. I want to focus on the cost of energy, because that underpins many other things in our economy. Indeed, the difficulties that the pound sterling, the euro and many other currencies had, and still have, against the dollar in the last couple of months were in large part because of energy prices being priced in dollars, and the impact of that on the world economy.

We are trying to decarbonise our economy, as hon. Members on both sides of the House agree, but oil and gas are still hugely significant to absolutely everything in the economy. Structurally, demand for oil and gas from the developing world—not primarily China, but India and sub-Saharan Africa—is rocketing, because the people in those countries want to have what we have. They want to industrialise and make their lives better, and they need energy to do that. At the same time, we are seeing lower investment in new oil and gas by major energy companies. That is happening for myriad reasons, but principally because the messages that we have been sending around the necessary green investment have made shareholders demand higher returns for shareholders rather than those profits going into investment.

The long and short of it is that we do not have enough oil and gas and the demand for it is rising, so prices are going up. Although the war in Ukraine has hugely exacerbated and accelerated the difficulty, it is worth saying that the problems with energy have been building for a long time. Even when the war in Ukraine concludes, as we hope happens soon, prices will still be higher than we have been used to.

Every economic expansion in the world over the last 300 years was founded on not just innovation but cheap energy. We have to be honest as a House, as a country and as the Conservative party that all our hopes and dreams about what our economy should do—all the funds that we want to put into the NHS, all the infrastructure that we want to build, all the tax cuts that we want to give—are founded on having affordable energy for individuals and businesses.

What are we going to do about that? All hon. Members on both sides of the House agree that we need more renewable investment—more nuclear, more wind, more solar. We will always talk about investing more in those things, so it is about not just the investment, but our ability to get it done. I am sure many Members will share my frustration at the gap between our intentions, whether through legislation or policy, on the investments that are made and the big numbers that we talk about and see, and the slow deliverability of that on the ground. In energy in particular, the amount of time it takes to get a nuclear power station off the ground is too long. The amount of time it takes even to get a wind farm and wind terminals off the ground is too long; in fact it is getting longer. On solar, we have problems with planning in that area as well.

[Aaron Bell]

I thank my hon. Friend for what he is saying. The Science and Technology Committee, on which I sit, is currently looking at our nuclear investments for the future. Is he aware that, for example, the number of documents submitted in planning for Sizewell C is over 4,000 compared with about 1,000 for Hinkley Point C and it is basically the same design? Is that not an example of what he is talking about?

[Bim Afolami]

It is, and I would love to speak much more about that point, but I do not have much time. I would just say that we must start to take seriously the issues of delivering much more renewable energy on our own soil, and of exploring oil and gas in the North sea to the maximum we can. A lot of the other economic debates we have are largely irrelevant in the context of that energy challenge.

We have heard a lot today about investment for public services. I remind all Members, particularly Opposition Members, that we cannot oppose measures for the growth of our economy, and we cannot always oppose investments or incentives for investment for successful businesses or individuals and, at the same time, say that we need more investment in our public services. We need to remember that the only money spent by the Government is the money that we generate as a private sector and private enterprise. That is why we need to tackle inflation, that is why the core of tackling inflation is dealing with the cost of energy and that is why I support this autumn statement.

--- Later in debate ---

[Aaron Bell (Newcastle-under-Lyme) (Con)]

Thank you very much, Mr Deputy Speaker. It is a pleasure to follow the hon. Member for Bradford East (Imran Hussain), although I utterly reject his thesis and characterisation of the response of those on the Government Benches; that is not appropriate in respect of this statement or the previous one. These are undoubtedly difficult times and they require tough decisions. That is what we saw from the Chancellor last week. The priority is to restore economic stability and sound money and, most of all, to tackle inflation.

I thank my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) for talking about inflation, as did my right hon. Friend the Member for North West Hampshire (Kit Malthouse). As my hon. Friend said, the inflation that we are experiencing, which is happening everywhere, is the most pernicious thing that we have to tackle right now. We have not had inflation at this level since I was in short trousers. The priority with inflation is to get on top of it quickly. If we allow it to persist, it will make everyone poorer again and again—it erodes people’s savings and the value of people’s salaries, which affects the cost of living—so we must tackle it. The measures that the Chancellor set out last week do that.

At the same time as tackling inflation, the Government are protecting people from inflation through the energy price guarantee—it is very expensive, which is another reason why we will need to make savings elsewhere—and maintaining the triple lock. A number of my constituents wrote to me about that—I have a considerably above-average number of pensioners in Newcastle-under-Lyme and had a lot of correspondence about it. I assured them that I would go to the Chancellor and fight for them. I am pleased that he listened to me and like-minded colleagues and that we will put up the state pension by inflation. We will also put up pension credit by inflation in the new year and all benefits, including in-work benefits.

I agree with my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) that we need to restore more conditionality. In a world where we have quite close to full employment at the moment—I accept that, as the OBR said, there may be some increase in unemployment—we need to encourage those who can take on more hours or go back into the labour market to do so. We are also being fair in protecting people from inflation through our biggest ever increase in the national living wage, which is now up to £10.42 an hour for those over 23—a boost of over £1,600 to annual earnings.

It is not just about stability; it is also about credibility and being honest with people, as the Exchequer Secretary said when opening the debate. It is about being honest and credible not only with the markets, but with the country. If we are to be honest and credible in this Chamber, we should acknowledge that mistakes were made in the mini-Budget. I thought the decision on the 45p tax rate was a mistake, and I communicated that privately to the Chancellor. That decision was reversed and now, contrary to what we have heard from some, we are asking those with the broadest shoulders to bear the burden of taxation and lowered the 45p rate threshold to £125,000. Overall, this statement is a mixture of spending restraint and tax rises, but we are making sure that the burden falls on those who are most able to afford it—completely contrary to what Opposition Members have said today.

The Opposition do not seem to have a plan of their own. We kept being promised one today by the shadow Minister, the hon. Member for Hampstead and Kilburn (Tulip Siddiq), but there never seemed to be one. The shadow Chancellor herself did not offer anything in her rather over-the-top response to the Chancellor’s statement last week. Again and again, people have brought up the last 12 years, but I repeat the point I made in an intervention: we inherited a £149 billion deficit and we worked hard to reduce it, repeatedly opposed by the Opposition. The national debt has increased because borrowing each year does that.

The Opposition like to blame global financial circumstances for situation—they like to say it was made in America—but the truth is that, as the International Monetary Fund said, by 2007 we were running the biggest structural deficit of any country in the G7. The idea that we should put the Labour party back in charge of another difficult situation is for the birds.

We are genuinely dealing with a situation largely caused by unprecedented external economic shocks. The biggest of those shocks was covid—a once-in-100-years event. That cost £400 billion—money we ultimately have to pay back, and as interest rates on Government debt rise, repaying those debts becomes more burdensome. I believe that £400 billion was money well spent: it saved jobs, it saved businesses and it saved lives. We should all be proud of what we did through covid, but we have to face the fact that there will be a reckoning.

The same is true of the energy shock. We have the first war in Europe for 75 years, and a once-in-50-years energy shock has followed. I think we can be proud of our response, both abroad in our support for the Ukrainians, in materiel and training for their armed forces and diplomatic support for Volodymyr Zelensky, and at home in shielding people, households and businesses from that shock, but it is expensive. As my hon. Friend the Member for Bolsover (Mark Fletcher) said, that costs an extra £150 billion; the Government are bearing a third of the cost, but it is a cost for everybody to bear, equivalent to an extra NHS. We need to find ways to pay for that.

Speaking of the NHS, the Chancellor—as befits a former Health Secretary and a former Chair of the Health and Social Care Committee—has protected our NHS in these difficult times, giving an extra £7.7 billion over the next two years to tackle precisely the issues we have heard about today, which I recognise in my own constituency. It is difficult for ambulances to get into hospitals because hospitals are operating beyond capacity, and it is difficult to get people out of hospital and into social care.

The ABCD plan proposed in the summer is the right approach; we need to tackle the backlog and get people seeing their GPs again. Putting extra money into the health service, even in these difficult economic times, is the right thing to do, as is the £4 billion we are putting into schools. We are protecting the budgets that matter the most to our constituents in places such as Newcastle, and no doubt Bradford East as well. The money will put real-terms per pupil funding back up to above 2010 levels—more than the Labour party has pledged to give schools.

We are also protecting the commitments we made during the general election to level up. Newcastle-under-Lyme has secured £34 million through the future high streets fund and the towns fund. Speaking of high streets, which are critical in constituencies such as mine, the business rates package we have offered—£14 billion over the next five years—and the long overdue revaluation, which will make a huge difference to business rates in the centre of Newcastle-under-Lyme, are extremely welcome, as is the new relief for retail, hospitality and leisure being extended 50% next year and 75% the year after. That will make a real difference to the viability of existing shops in my town centre and the viability of the new shops that people open.

[Dr Cameron]

I thank the hon. Gentleman for setting out clearly a number of the financial issues that have been impacting the cost of living and need to be addressed. Does he agree that, in addition, we need to look at decentralised finance? With the collapse of FTX, and the fact that almost 10% of the UK population have some kind of engagement with the cryptocurrency markets, we need to ensure that consumer protection is at the forefront of what we are doing, have a deeper look at regulation and move that forward at speed.

[Aaron Bell]

I thank the hon. Lady for raising cryptocurrency, FTX and so on. She may know that I recently held a Westminster Hall debate on the pernicious reach of cryptocurrency into sport, and that one of her SNP colleagues held a separate debate on it. The Treasury needs to listen carefully to the issues being raised around cryptocurrency, and particularly the damage it is doing to young men, who are very susceptible to “get rich quick” schemes.

I am pleased that the Government resisted the temptation to cut long-term capital budgets, such as Sizewell C, the levelling-up fund and our investment in R&D, which is where we will get growth from in the future.

To conclude, these are difficult times, but I think we are taking action that is appropriate and fair. We are making sure that those with the broadest shoulders who can bear the burden do so. We are splitting the cost of covid and the energy price shock between tax rises and spending restraint. The OBR itself expects our package to reduce peak inflation and peak unemployment, and the Bank of England now expects lower inflation and lower peak interest rates, which will look after mortgage holders. All the while, we are looking after the NHS and our schools, as our constituents expect us to do. I have every confidence in the Chancellor and his statement, and in our ability to steer the economy through these troubled times.

Economic Update

Aaron Bell Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

I am not making any commitments on individual areas of any tax or spend, but yes, I absolutely understand the pressures faced in local government.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I welcome the Chancellor to his place. I welcome what he said about economic stability, the stability he has brought, and what he said about protecting the most vulnerable, which my constituents will welcome. When the people of Newcastle-under-Lyme voted for me and for the Government in 2019, they wanted us to deliver Brexit, deliver them from the Labour party, and deliver levelling up. Despite the difficult economic circumstances, can the Chancellor reassure me that the Government will continue to spread opportunity, growth and investment across the nation?

[Jeremy Hunt]

I am absolutely delighted to give that assurance. It is a fundamental part of the Conservative philosophy that economic opportunity should be evenly shared across the country, and we accept that it is not at the moment.