Oral Answers to Questions

Abena Oppong-Asare Excerpts

Tuesday 28th June 2022 Commons Chamber

[Helen Whately]

I do have conversations with the construction sector and more widely about infrastructure investment in this country. I am happy to meet the hon. Gentleman to talk about the specific suggestion he has to help the construction sector.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

If the Chancellor really wanted to help British businesses, he would back Labour’s plan to scrap business rates and replace them with a fairer system. He could reverse his tax on jobs and scrap the national insurance hike, and he could use public procurement and other tools to buy, make and sell more in Britain. He has imitated Labour’s policies before: why not follow Labour’s lead again and help struggling businesses?

[Helen Whately]

Business rates and national insurance are an important contribution to paying for public services, which I am sure the hon. Lady’s constituents, like mine, feel very strongly about. I remind her of the scale of support that we are providing to businesses, including a business rates cut worth £1.7 billion this year.

Funeral Plan Industry

Abena Oppong-Asare Excerpts

Thursday 26th May 2022 Westminster Hall

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. I congratulate the hon. Member for Telford (Lucy Allan) on securing the debate. She set out some important issues in her opening speech. I thank my right hon. Friend the Member for North Durham (Mr Jones) and my hon. Friend the Member for Putney (Fleur Anderson) for sharing their constituents’ stories and for their work in this area, which they have been doing for some time.

Many examples that hon. Members cited were extremely worrying and were distressing for those concerned. Funerals are clearly important and sensitive moments for families as they say goodbye to their loved ones. They should not be moments where families have to worry about money. As the hon. Member for Telford and my hon. Friend the Member for Putney pointed out, not many families would have reached out to their MPs during their moment of grief for further assistance in this matter.

That is why the collapse in March of Safe Hands, a prepaid funeral plan company, has left its 45,000 customers in such a distressing situation. Those customers have now been told they will lose up to 90% of the money they had invested in their funeral plans. In many cases, this will see them lose thousands of pounds. It appears that in the case of Safe Hands, customers’ money was invested in high-risk investments, as well as being distributed to directors in loans and dividends. Will the Minister set out the facts, as he understands them, about this particular case?

It is very welcome that Dignity, one of the UK’s biggest undertakers, has agreed to provide funerals for Safe Hands customers on a not-for-profit basis for the next six months. I echo what the hon. Member for Telford said about thanking Dignity for its work in this area.

As we have heard, the collapse of Safe Hands comes at a critical moment for the funeral plan industry, which will come under the remit of the Financial Conduct Authority from 29 July this year, so I welcome the opportunity to debate the industry and press the Minister on the steps the Government are taking in this area. I do not intend to speak for long, but I have a number of questions for the Minister about how Safe Hands’s collapse was allowed to happen and how we can be reassured that the action the FCA is taking will be sufficient.

First, when did the Government begin to assess the significant risks in the prepaid financial plan sector? Fairer Finance has said that Safe Hands’s collapse was on the cards for some time. Indeed, its managing director has written that firms such as Safe Hands were playing fast and loose with clients’ cash, and other hon. Members have also raised that point. Does the Minister think the new system of regulation was too slow to be developed and introduced, particularly given that the risks were known for some time?

Secondly, does the Minister think there are systemic risks in the sector, rather than just problems with individual firms? Thirdly, will he tell us about the work he is doing with the FCA to protect people who have plans with companies that do not become authorised with the FCA or merge with another firm? Of course, we welcome the FCA’s regulation—recent events have shown how necessary it is—but we must be reassured that the process of moving to the new system does not put more people’s money at risk. When I last checked, 14 firms had withdrawn their applications for FCA regulation, four firms had not made any application at all, and 16 firms intended to transfer their plans to another provider. As my hon. Friend the Member for Putney said, the customers of all those companies need clarity and certainty about what will happen to their plans and money.

I want to end by making a slightly broader point about consumer protection and regulation. Clearly, the Treasury cannot underwrite every single financial product in this country, but that is exactly why consumers deserve robust regulation of the industries concerned. It is increasingly clear that the Government are too often willing to leave individuals to fend for themselves in self-regulated markets, rather than take action to protect consumers. For instance, why have they delayed the insolvency and audit reform Bills that are needed to regulate those sectors properly? Why has the Digital Markets, Competition and Consumer Bill been published only in draft form, with no clear timetable for it to become law? Finally, and most relevant to this debate, why did it take the Government so long to regulate the funeral plan sector properly? The customers of Safe Hands with prepaid funeral plans deserve answers to those questions; I hope the Minister is able to provide an answer.

Cost of Living: Fiscal Approach

Abena Oppong-Asare Excerpts

Wednesday 25th May 2022 Westminster Hall

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairship, Mr Twigg. I begin by thanking my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing and leading this extremely important and timely debate. He is a great champion for working people across this country. I thought his opening speech set out clearly the challenges that are facing his constituents, as well as all hon. Members’ constituents, at this moment.

I would like to thank UNISON, a trade union I am proud to be a member of, for the briefings it provided in advance of this debate. I will come on shortly to how the cost of living crisis is affecting public sector workers. This has been a good debate, with hon. Members from across the House speaking with passion and sincerity about the impact of the cost of living crisis on their constituents. We have also heard repeated pleas to the Government to end their inaction and provide more support to the families who are really struggling. I will come on to some of these suggestion shortly.

The hon. Member for Glasgow East (David Linden) made some very important points about low pay, which I will address shortly. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) made an excellent speech on the poverty premium. I thought the point she made about the difference in cost between direct debit and prepayment meters for energy was particularly relevant to the current situation. I hope the Minister will address that point directly.

My hon. Friend the Member for Easington (Grahame Morris) made some interesting points about the taxation of property and possible reforms to how it is done. The hon. Member for Westmorland and Lonsdale (Tim Farron) spoke about the particular challenges of rural poverty and the issue of second homes and Airbnb making the housing crisis worse. My hon. Friend the Member for York Central (Rachael Maskell) spoke about the housing crisis, particularly the challenges for renters and the knock-on effect on the rest of the economy. My hon. Friends the Members for Bolton South East (Yasmin Qureshi), for Leeds East (Richard Burgon) and for Merthyr Tydfil and Rhymney (Gerald Jones) set out some short and long-term solutions to the current crisis, including a windfall tax.

I totally agree that this is a matter of political will. The hon. Member for Strangford (Jim Shannon) spoke about the impact of the increase in national insurance as well as energy prices on his constituents,. My hon. Friend the Member for Reading East (Matt Rodda) gave some heart-wrenching examples of the struggles facing his constituents and public sector workers.

I want to start by setting out how this cost of living crisis is affecting workers, families and businesses. In recent weeks, we heard the news that inflation had hit a record 40-year high, rising to 9%. It is the highest one-year increase in consumer prices since records began. The average household energy bill has gone up by more than £1,000 this year. The food shop has gone up by 5% and the Bank of England has warned of further, “apocalyptic” food price rises. The cost of filling the car with petrol has jumped by £20 a time. Since January, 2 million people have gone a whole day without eating, because they cannot afford to eat.

We have heard awful accounts from my hon. Friend the Member for Barnsley Central, who shared stories on behalf of his constituents. I know some of my constituents cannot even afford a bus fare to get to the food bank to receive help. I am sure that each and every hon. Member will have similar stories in their inbox.

As well as rising prices, there is a wage crisis in this country. Weekly pay for a full-time worker is expected to reach £652 by 2023, but if weekly pay had grown in line with inflation since 2010, it would have reached £695 by 2023. The last 12 years of Tory Government have seen pay squeezed, costing workers hundreds of pounds a year, even before the Tory tax rises. As several hon. Members have mentioned, the pay squeeze has also hit public sector workers. Stories of NHS workers having to use food banks are shameful. They and other key workers kept our country going through the darkest days of the pandemic.

My hon. Friend the Member for Barnsley Central set out some of the specific challenges facing public sector workers, including HMRC-approved milage rates falling behind the cost of driving and charging staff to park in NHS car parks. I hope that the Minister can address these important issues when she responds. Public sector workers deserve better from this Government on pay and other workforce issues, including workload, progression and staff wellbeing.

Of course, the cost of living crisis has also hit businesses. Consumer confidence is at an all-time low and businesses’ costs have rocketed. The cost of living crisis is adding to 12 years of low economic growth. In fact, over 12 years growth has averaged just 1.4%—the worst record of any Government since the second world war.

That is a cost of living crisis, a wage crisis and an economic growth crisis all at the same time, and what is the Government’s response? So far I have heard nothing except more dither and delay. Reports suggesting that the Chancellor is considering some form of windfall tax are all well and good, but we have been calling for that for months. Where is the urgency from the Government? Where is the recognition that people need help now? It is simply not good enough. We have said that the Government should bring forward an emergency Budget to deal with the immediate crisis, and that it should contain five priorities to make material difference to millions of workers and their families.

First, we have called for a windfall tax on oil and gas producers in order to cut home energy bills. The arguments for a windfall tax have been well stated by hon. Members today, so I will simply say that when leading business figures, charities and politicians from across the political spectrum are urging the Government to get on with this and do it, there is simply no excuse. We believe that the windfall tax should be used to remove VAT on domestic energy bills and expand and increase the warm home discount. That will save most households around £200, but those who most need it could save £600.

Secondly, we have called for support for struggling businesses through a discount on business rates for small and medium-sized enterprises, to be funded by a tax on online giants. Thirdly, the Government must scrap the national insurance increases, which are hitting workers at the worst possible time. This is not the time to implement a national insurance increase.

Fourthly, we need a clear plan to ramp up home insulation and upgrades, making homes more energy efficient and saving households, on average, £400 every year. Fifthly, we have said that the Government must go after the fraudsters who stole from the public during the pandemic. Why are the Government not allowing the National Crime Agency to investigate the £11.8 billion lost to tax from fraud? That money could have been used to help people out of hardship right now. These five policies would make a real difference to workers and families across the country.

To conclude, unlike the party opposite, Labour has a plan to put money back into people’s pockets, grow the economy, boost jobs and wages and tackle this terrible cost of living crisis. We are still waiting for the Government’s plan but we cannot wait very much longer. Now is the time for action and for a windfall tax, and to finally give the people the help they need.

Oral Answers to Questions

Abena Oppong-Asare Excerpts

Tuesday 17th May 2022 Commons Chamber

[Mr Speaker]

We now come to the shadow Minister, Abena Oppong-Asare.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

Under this Conservative Government, people’s savings have declined by record levels. Data from the Office for Budget Responsibility shows that the amount of income households are able to save is set to fall by more than £1,000. This Tory cost of living crisis is pushing people into debt, yet one Government Minister said yesterday that, if people are struggling, they should simply work more hours and get another job. Will the Chancellor confirm that “Get on your bike” is official Conservative economic policy once again?

[Rishi Sunak]

There is an enormous amount to correct in the hon. Lady’s question. In aggregate, across the economy, savings increased over the past two years by more than £250 billion. Of course, that will not be distributed equally, but there is resilience. Consumer credit, on which those on lower incomes particularly rely, has also fallen by about £30 billion over the past two years. Households approach this period of difficulty in a more resilient shape than at any point in the past decade.

The comments by the Under-Secretary of State for the Home Department, my hon. Friend the Member for Redditch (Rachel Maclean), are absolutely right. It is wrong to take them out of context. This party and this Government are proud to be on the side of hard-working people. We want to support them into work, and we want to make sure that work pays. She was absolutely right to say what she said.

National Insurance Contributions (Increase of Thresholds) Bill

Abena Oppong-Asare Excerpts

2nd reading
Thursday 24th March 2022 Commons Chamber

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to respond to this Second Reading debate on behalf of the official Opposition. I thank all hon. Members for their contributions to the debate.

My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) spoke passionately about the impact of energy price increases on energy-intensive businesses in her area, making clear the very real risk to jobs. A windfall tax on energy producers could be used to fund support for these businesses. My hon. Friend the Member for Luton South (Rachel Hopkins) was exactly right to say that the Government’s approach is low investment, low pay and low growth. The Government are putting up tax because they have failed to grow the economy. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) spoke of his concerns about the impact that this will have on pensioners, reminding us that we must never forget the most vulnerable in society. The Government must do more on this. My hon. Friend the Member for Warwick and Leamington (Matt Western) spoke about how families are trying to make ends meet.

I also listened closely to the speeches of the hon. Members for South Dorset (Richard Drax), for Redcar (Jacob Young), for Peterborough (Paul Bristow), for Rother Valley (Alexander Stafford), for Bury North (James Daly) and for West Bromwich West (Shaun Bailey), as well as those of the hon. Members for Gordon (Richard Thomson) and for North East Fife (Wendy Chamberlain). The hon. Member for Peterborough spoke about the concerns of his constituents about the cost of energy. I would just say to him: does he really think the Government are doing enough, or does he think the Chancellor will have to come back to this House with more support?

This Bill, as we have heard, increases the annual national insurance thresholds for employees and for the self-employed from July 2022. As my hon. Friend the Member for Ealing North (James Murray) said, we will not oppose the Bill, as any help for people facing the national insurance rise in just a few weeks is welcome. It is rare that we debate tax legislation so soon after a Budget or spring statement, but the Bill stems directly from the spring statement that the Chancellor made yesterday.

I am sorry to say that the spring statement failed to match the scale of the challenge that our country and our economy face. Yesterday, the Office for Budget Responsibility said that we are facing

“the biggest fall in living standards”

since records began in the 1950s. It forecast that living wages will fall by 2.1% this year and 1.2% the year after. It also confirmed that living standards will not return to pre-pandemic levels until 2024-25. Millions of families around the country are feeling that already with high food, energy and fuel bills. They are looking at the bills that they must pay in the coming weeks and at their wages, which are failing to keep up with inflation, and they are simply wondering how they will make ends meet.

Yesterday, we hoped for a statement from the Chancellor that recognised the scale of the challenge and took real action to reduce energy bills, such as by leveraging a windfall tax on the record profits of the oil and gas producers, as the Opposition have proposed, or by finally scrapping his tax on jobs and on workers—his national insurance increase. We were disappointed on both fronts. He did not take the opportunity to tax the oil and gas giants for whom the crisis has been, in their own words, a “cash machine”, nor did he have the courage to drop his national insurance increase in full.

Instead, in the Bill, we are left with a half measure from a Chancellor who gives with one hand and takes with the other. Let us be clear: he is no tax-cutting Chancellor; he is a tax-raising Chancellor who is increasing the tax burden to the highest level since 1949. The burden is higher after yesterday’s spring statement than it was before. The OBR confirmed yesterday that £24 billion of additional tax rises are about to hit this year. As it made clear, the Chancellor has reversed only about a sixth of the tax rises that he has announced since he took the job, which means that he will still take £6 in tax for every £1 he is giving back.

As the IFS said, even after the changes announced yesterday, almost all workers will be paying more tax on their earnings in 2025 than they would have been without the Chancellor’s increases. Let us be clear: the national insurance increase is a tax on people who work. He is raising taxes on millions in the middle, but where is the increased tax contribution from the wealthiest in society? A landlord with a large number of properties will not be paying more in taxes, but their tenants will; someone with significant income from buying and selling stocks and shares will not pay any more tax; and the national insurance rise is also going ahead in full for more than 1 million employers who do not benefit from the employment allowance. It is a tax hike on jobs, which will ultimately be passed on to workers through lower wages and higher prices.

When the Chancellor first announced the national insurance increase, he said that it would pay for social care. As is typical of him, however, all was not what it seemed, because the Government then said that the money would go to tackling the NHS backlog instead. Six months later, there is still no plan to fix the social care system or tackle growing NHS waiting lists. After a decade of Tory mismanagement, the NHS went into the pandemic with record waiting lists and staff shortages of 100,000. After yesterday, however, we can be less confident than ever that the tax rise will ever make it into our health and care system. If the tax was really for the NHS, yesterday’s announcement would mean that it now faces a £6 billion cut; I assume that that is what the Government plan. Perhaps it would have been spent on making up the £11.8 billion of hard-working people’s money that has been lost to fraud and error under the Chancellor, which is close to the amount that he originally hoped to raise with the national insurance rise.

As I said in September, this is tax rise without a plan. Politics is about choices and Labour would not have made that choice. Yesterday was the Chancellor’s last chance to stop the national insurance increase before it comes into effect in two weeks. He did not take that chance. He is pressing ahead with a tax rise on workers and businesses, even as the cost of living crisis spirals out of control, prices increase and real wages fall, and the Government still refuse to take proper action to help people with soaring energy bills. This Bill cannot face that reality.

The Chancellor wants the British people not to notice that he is putting up their taxes at the worst possible moment, but they are smarter than that. They will see through the smoke and mirrors—his cynical attempt to give the impression of a tax cut just before the next election. He is still increasing their taxes and leaving families and businesses to fend for themselves in the middle of a cost of living crisis. That is the reality of the spring statement and the reality of the Bill.

Customs (Amendment) (EU Exit) Regulations 2022

Abena Oppong-Asare Excerpts

Monday 14th March 2022 General Committees

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairship, Mr Sharma.

I thank the Minister for her explanation of the regulations. Although they are technical in nature, this is clearly an important area and I have a number of questions. As she set out, the regulations will make changes to customs legislation applying to goods moving between Great Britain and Northern Ireland. The Opposition recognise the significant challenges that businesses in Northern Ireland face when importing goods from Great Britain and, conversely, the challenges that businesses in Great Britain face when selling into Northern Ireland.

We have urged the Government to negotiate properly with the EU to ensure that the protocol works for the people of Northern Ireland and people across the UK. Although progress has been made recently, a number of issues remain. For example, businesses and political parties in Northern Ireland have been urging the Government for months to negotiate a veterinary agreement that lowers barriers and brings long-term benefits to the people of Northern Ireland. People’s jobs and livelihoods depend on the Government solving such problems as soon as possible.

Let me turn to the specific measures. I recognise that most of the amendments to the Customs and Excise Management Act 1979 largely tidy up the legislation to ensure that it reflects current customs processes. I also note that the explanatory memorandum states that the changes do not impact on the unfettered access of qualifying Northern Ireland goods that move to the rest of the UK. To double check, will the Minister confirm that businesses importing into Northern Ireland will not face any further trade barriers as a result of the changes?

The provision in paragraph (3) of regulation 2 allows HMRC to require a security and a guarantee in order to release imported goods in certain circumstances. It is sensible that goods can be released pending a future customs declaration, to prevent them from piling up in warehouses or, in the case of perishable goods, becoming entirely unusable. But why is that change being introduced now? Why has that procedure not been possible until this point? Have businesses suffered because of a failure to bring in the necessary legislative changes until now, given that is more than two years since the end of the transition period? Have the Government consulted with relevant businesses about the impact of the policy? If so, will the Minister tell us whether businesses expressed any concerns about the operation of the securities process?

It will be useful to hear from the Minister how long, on average, importers will have to wait until HMRC has calculated the right amount of duty to be paid. Finally, will the Minister say a little more about the new review and appeal procedure in relation to a HMRC decision to require a security? What will be the process for businesses if they wish to appeal?

Oral Answers to Questions

Abena Oppong-Asare Excerpts

Tuesday 1st February 2022 Commons Chamber

[Mr Clarke]

My right hon. Friend puts it extremely well. We must remember the context: the economy was going through a heart attack at that time, owing to the necessary steps we took to support wider public health. I would remind the Opposition Benches that the shadow Chancellor wrote to the Chancellor at the time, describing the loan scheme application process as “cumbersome” and calling for access to be made easier. We were operating in that context of needing to ensure that businesses could access the support to which they were legitimately entitled.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

What does the Minister think would happen to an employee in the private sector who lost more than £4 billion of someone else’s money to fraud, having ignored numerous warnings? Would they really be eyeing up a possible promotion, or is it more likely that they would be sacked on the spot?

[Mr Clarke]

We are running the Government of the United Kingdom, and we needed to respond at speed to an unprecedented public health emergency. If we had failed to provide the £400 billion of support that we gave, we would have seen the worst fears, with millions of people unemployed and thousands of companies closing. We struck the right balance in getting that support out to firms and then building in the protections needed to protect the taxpayer interest, and we are, as I have said, going to go after anybody who has defrauded the Exchequer.

Plastic Packaging Tax (Descriptions of Products) Regulations 2021

Abena Oppong-Asare Excerpts

Monday 31st January 2022 General Committees

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sharma, I believe for the first time. I thank the Minister for her comments about the regulations. As I have said before, the Opposition support the plastic packaging tax, as we believe that it is an important tool in tackling the crisis of plastic pollution that we face.

Before I come to the detail of the regulations and some of the concerns that we have about them, I will take the Minister back to the supposed aims of the plastic packaging tax. When the Government initially introduced the tax, in the last but one Finance Bill, they stated:

“The tax will encourage the use of recycled plastic instead of new plastic within packaging. It will create greater demand for recycled plastic, and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.”

That is an important principle. The Minister just mentioned that the tax is supposed to incentivise the use of recycled plastic, and in turn reduce the overall amount of virgin plastic packaging being produced and consumed. Logically, the tax would have the greatest impact were it extended to as many items as possible. It is therefore somewhat concerning to see three new exemptions being introduced at this stage.

As I said during the passage of the original legislation, we supported common-sense exemptions such as for medical packaging but believed that the list of exemptions should be kept as short as possible. I want to take the new exemptions in turn, and ask the Minister some questions about each. The first is about packaging products designed primarily for storage, such as video game cases and toolboxes. In the explanatory notes, the Government say that those products

“do not typically contribute to plastic pollution.”

Can the Minister explain? Surely they are thrown away at some point and end up as plastic waste. The explanation also ignores the upstream environmental impact of producing the plastics. The Government have not said that they intend the tax to apply only to single-use items, so why is that justification now being used to exempt certain products?

The second exemption is for plastic packaging integral to the product being sold; the Government give examples such as printer cartridges, tea bags and mascara brushes. The Minister mentioned the encouragement of long- term storage of those goods, but will she give a further explanation, other than that, as to why they are being exempted—a bit more about the justification? We are concerned about whether the Government want greater use of recycled plastic in those products. They seem to be lowering their ambition significantly in this area.

Finally, the Government are exempting packaging used primarily for presentation. I make the same point as I did about storage items: it is not clear how these products do not contribute to plastic pollution through their production and disposal. Does the Minister not think that including them in the tax would encourage the use of recycled plastic or alternative materials?

The regulations add a new category to the scope of the tax: single-use plastic items used as packaging within the home, such as bin bags and disposable plates. We are happy to support that addition, but it takes us back to the point I made earlier. With these amendments, the Government seem to be changing the focus of the measure from encouraging recycled plastic and reducing plastic waste in general towards a narrower focus on single-use plastic. Is that correct? What assessment has the Treasury made about whether the changes will lead to more plastic waste being produced and how much?

The Minister mentioned that the definition was introduced to reduce the burden on businesses; I take this opportunity to raise a couple of points made by the British Plastics Federation and the Food and Drink Federation on behalf of their members, who will ultimately be subject to the tax. First, they say that there is confusion among businesses about exactly what products are eligible for the tax. Hopefully, the regulations will be helpful, but will the Minister consider whether HMRC needs to issue further detailed guidance?

I appreciate that the Minister mentioned that there has been a lot of consultation with relevant organisations, particularly with this SI, but there is an issue about the recycled content verification system, which ensures that imported packaging is subject to the same level of scrutiny as packaging produced in the UK. What is being done to ensure that UK producers are not being treated unfairly?

There are also concerns that, due to the lack of recycled materials in the UK, producers may struggle to meet the 30% threshold even when they wish to. There are specific issues in the food packaging sector, where there is limited regulatory approval for recycled products to be used, which the Food and Drink Federation has raised. Finally, it also raises the issue of chemical recycling and a potential problem whereby the mass balance approach to certifying chemically recycled products will not be accepted for the purposes of the plastic packaging tax in April 2022. Can the Minister respond to those practical points from the industry? If she is unable to do so today, will she write to me?

I have said before that we want to see a plastic packaging tax that is ambitious and makes a real impact in reducing plastic pollution. Just last week, the Environmental Investigation Agency released a report saying that plastic pollution is now a global emergency nearly equivalent to that of climate change itself. It has shown that the toxic pollution resulting from over-production of virgin plastics and their lifecycles is irreversible, and that it directly undermines our health, drives biodiversity loss, exacerbates climate change and risks generating large-scale harmful environmental changes. For those reasons, we cannot afford to slow down the fight against plastic pollution. We hope that the plastic packaging tax can be part of that fight, but we need reassurances from the Minister that these changes will not undermine its impact.

--- Later in debate ---

[Helen Whately]

I will briefly respond to some of the points from the shadow Minister, the hon. Member for Erith and Thamesmead. I welcome her support for the tax and her overall support for the legislation, and I thank her for reminding us of the objectives, including our ambition to increase the use of recycled plastic over virgin plastic.

The hon. Lady raised concerns about some of the exemptions that I have outlined today, or about the targeting of the tax. Overall, we agree on the ambition to limit exemptions to ensure that the tax achieves its objective. The Government are determined to be pragmatic, but also to ensure that the tax achieves its objective of targeting those plastics that are particularly harmful to the environment. As I said in my opening speech, we carried out a huge amount of consultation and engagement with industry and those interested in this tax and legislation in order to get the targeting of the taxation right. That has led to the details of this statutory instrument, with the very specific exemptions that I outlined and the inclusion of certain single-use plastics that are used for disposal, for instance—bin bags and so on.

I say to the hon. Lady, who suggested that this was too narrow a focus, that this is a hugely ambitious tax, which sets out to change the incentives so that we see much greater use of recycled plastic and more plastic being recycled into the plastic supply chain, leading to—this picks up on her point about what assessment of impact there has been—our expectation that we will see a 40% increase in the use of recycled plastic following the introduction of the tax.

To pick up on the hon. Lady’s point about whether there are concerns or confusion about the clarity of the regulations, I should say that substantial guidance has been set out on which products are in the scope of the tax and how it should be applied; the Government have worked closely with the sector and industry on preparing the details of that. Businesses that are concerned or uncertain can indeed contact HMRC, which will lead on the implementation.

[Abena Oppong-Asare]

Will the Minister give way?

[Helen Whately]

Let me cover the comments that the hon. Lady made, if she will give me a moment. She asked about imported packaging. I assure her that we are determined that there should be a level playing field, so the tax will apply equally to packaging manufactured in the UK and that imported into the UK.

The hon. Lady then asked about food packaging. We have consulted with the sector on that; we recognise some of the challenges but also the progress already being made to increase the use of recycled plastic in food packaging. We would not want to disincentivise further progress along those lines so we very much include that consideration, as with other examples of when it is more challenging to use recycled plastic.

Finally, the hon. Lady asked about chemical recycling; I am absolutely aware of questions from that part of the recycling sector. We are keen to see the use of chemically recycled plastic, which is really important for increasing the supply and quality of recycled plastic—especially some types of plastic that are hard to make with mechanically recycled plastic. The Government are investing in chemical recycling facilities to support the development of the technology. This legislation allows for chemically recycled plastic to contribute towards the 30% recycled plastic threshold for the purposes of the tax. I know that some have argued that that is not enough, but the mass balance approach that they are arguing for is a significant shift; it is about a chemically recycled plastic being attributed to packaging rather than contained in packaging. That is quite a fundamental change. We are looking at that but it would require new legislation, and we will not rush into that at this point.

In conclusion, this is an important piece of legislation, which will help this country fight the scourge of plastic pollution and cut carbon emissions by boosting recycling rates. Ultimately, it will play a part in unlocking economic benefits through the encouragement of green growth and innovation. Equally, the instrument will make sure that we tackle plastic waste in a proportionate and effective way, for the benefit of consumers and businesses alike.

[Abena Oppong-Asare]

I thank the Minister for answering the points I raised. I welcome the fact that detailed guidance will be provided by HMRC, particularly in relation to businesses. I appreciate that the Government have done extensive consultation with a number of stakeholders, but the ones I have engaged with represent quite a number of businesses. What are the timescales when it comes to HMRC’s publication of the guidance? There has been confusion about what businesses are eligible to do, and it is important that we get the issue right.

[Helen Whately]

I am happy to respond briefly. Guidance has in fact already been published; this particular guidance first came out in November, and the most recent update was just a couple of days ago. I hope that answers the questions put by the businesses that the hon. Lady referred to; they can, of course, follow up with HMRC if they have any further questions.

Question put and agreed to.

Finance (No. 2) Bill (Fifth sitting)

Abena Oppong-Asare Excerpts

Committee stage
Tuesday 11th January 2022 Public Bill Committees

[Lucy Frazer]

Clauses 95 and 96 concern tax administration provisions. They provide certainty that HMRC may use discovery assessments to take action in certain cases in which taxpayers have not declared or returned tax that is due. For consistency, fairness and certainty, they also make minor changes to the rules requiring notification of liability.

I will briefly explain the context for introducing the clauses. The upper tribunal recently found that HMRC did not have powers to recover an individual’s high-income child benefit charge, which I will refer to as “the child benefit charge”, by issuing a discovery assessment where the taxpayer had neither notified HMRC of their liability nor submitted a tax return. The purpose of notifying tax liability is for HMRC to know to ask a taxpayer to complete a tax return. A discovery assessment is the mechanism HMRC uses to collect tax that it finds out should have been assessed but has not been—essentially, HMRC sends the taxpayer a bill for the tax that they ought to have self-assessed. HMRC uses discovery assessments frequently and routinely for taxpayers who ought to but have not notified tax liability and completed a tax return, whether because they are evading tax or they have made a genuine mistake.

HMRC can use discovery assessments in two scenarios: where it discovers that income tax in a tax return has been understated, and where a tax return has not been submitted at all. We are concerned here only with the latter scenario. The tribunal did not dispute the validity of the child benefit charge; in fact, it confirmed that the charge was still due. However, the tribunal found that HMRC could not use discovery assessments in that case. HMRC firmly disputes that ruling and has appealed to the Court of Appeal. The ruling prevents HMRC from using the usual discovery assessment mechanism to collect the correct tax payable where taxpayers liable to the child benefit charge and similar charges have not notified their liability, and so have not been sent a tax return.

There are three related clauses: 95, 96 and 97. The first and most significant is clause 95, which ensures that discovery assessments can be used to recover the child benefit charge, as well as similar charges relating to pensions and gift aid, where taxpayers have failed to notify HMRC and self-assess those charges. I stress that the legislation does not create any new liabilities or obligations for taxpayers; it simply puts taxpayers who do not declare and pay the child benefit charge on an equal footing with the majority who do.

Without clause 95, a taxpayer who did not declare and return their liability might not have to pay the child benefit charge at all, while others in otherwise identical circumstances who had rightly notified HMRC of their position would have to pay. Clearly, even if that is an honest mistake, which it is in many cases, it is not right.

The legislation introduced under clause 95 will apply retrospectively to child benefit, gift aid and pension charges. For those three types of charge, the legislation will be treated as having always been in force and will ensure that previously issued discovery assessments remain valid. The Government do not introduce retrospective legislation lightly; we do so only in exceptional circumstances, and we will do so, on occasion, when a court ruling upsets the widely accepted way in which the law is understood to work.

In this instance, retrospection is necessary for two reasons: first, to protect public services by ensuring that tax that is properly due and that has been charged and paid through discovery assessments over a number of years remains undisturbed; and secondly to provide fairness to the general body of taxpayers who have declared their liability, submitted their returns and paid their tax. The retrospective element applies only to the use of discovery assessments where taxpayers subject to such charges have neither notified HMRC of their liability nor submitted a tax return; it does not affect anyone’s tax liability. It is important to emphasise that although this is retrospective legislation, it is not retrospective taxation.

Some taxpayers will not be subject to the retrospective effects of clause 95. It would be unfair for it to apply to those taxpayers who were part of the original litigation and those who submitted appeals to HMRC on the same basis before the tribunal judgment was handed down. To include them would overturn the upper tribunal’s judgment and curtail the appeal rights of taxpayers who will already have spent time and money bringing an appeal on the same grounds, so the Government are excluding those taxpayers from the retrospective element of the legislation, ensuring that they can continue to pursue their appeals.

The prospective effect of clause 95 is somewhat wider. It is sensible to future-proof the legislation so that it applies to any income tax or capital gains tax that ought to have been, but has not been, assessed.

Clause 96 is introduced with prospective effect only. It will provide certainty that taxpayers who become liable to certain tax charges, including the pension and gift aid charges that I mentioned in reference to clause 95, must notify HMRC of their tax liability. Taxpayers are required to notify HMRC that they are chargeable to income tax or capital gains tax for any given year when that tax has not otherwise been accounted for.

Recent litigation has called into question whether certain tax charges are adequately covered by the obligation to notify chargeability; clause 96 provides certainty that they are so covered. That will achieve consistency of treatment across the types of tax charge, ensuring that taxpayers are always obliged to notify HMRC in circumstances where HMRC might not otherwise become aware of their tax liability.

It is right that taxpayers are required to report and self-assess their tax liabilities and that HMRC can take the necessary action to recover tax when they do not. Clauses 95 and 96 will enable HMRC to carry on doing so, shoring up the tax administration provisions in response to litigation that could otherwise create confusion, unfairness and inconsistency, as well as putting public revenues at risk. I commend the clauses to the Committee.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

It is a pleasure to serve under your chairship again, Sir Christopher. I thank the Minister for her explanation of clauses 95 and 96, particularly in respect of discovery assessments. As she says, clause 95 will amend the Taxes Management Act 1970 to provide certainty that HMRC can use discovery assessments to make good a loss of tax where it discovers that certain charges have not been accounted for; when the Bill gains Royal Assent, the clause will apply both retrospectively and prospectively.

The amendment to the 1970 Act has to be understood in the context of the legal challenge in HMRC v. Wilkes, in which the upper tribunal ruled that HMRC could not use discovery assessments to assess tax charges arising from sources that do not meet the definition of income within the relevant provision. Clause 95 will amend the law to enable HMRC to use discovery assessments in such circumstances. The background note in the explanatory notes states that the aim is to

“put the matter beyond doubt and confirm HMRC’s long-standing policy”.

Although there has clearly been historic doubt and an unsuccessful legal defence mounted by HMRC, and while this is being applied retrospectively, there is an exception for those who have appealed on the grounds that HMRC was inadequate at the time prior to the Wilkes case. However, as the Minister probably knows, the Low Incomes Tax Reform Group has raised the point that the retrospective application in the clause could be uneven and unfair.

While those who have appealed have been exempted, those who did not make the necessary appeal will face retrospective charges. Those who accepted the charge at face value and paid it will clearly not get their money back, despite the upper tribunal’s finding that HMRC’s use of discovery assessments in this way was outside the scope of its powers and, therefore, not legal. The Wilkes judgment will soon no longer be a legitimate basis for legal contest; I would be grateful if the Minister could make an assessment of the fairness of this uneven, retrospective application.

Under clause 96, there will be further amendments to the Taxes Management Act 1970. It will amend section 7 and extend the circumstances in which a person must make a notification under section 7 to the charges listed in section 30 of the Income Tax Act 2007. As the Minister mentioned, that requires the taxpayer to notify HMRC of any liability to income tax or capital gains tax charges per accounting year. The amendments to the fundamental piece of primary legislation have been extended to include liability, as set out in clause 95. For this reason, we will not be opposing the clause.

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Sir Christopher. While we support its broad principles, this type of clause brings me out in a cold sweat. I completed my self-assessment tax return last night, and I am now worrying that I have not done it right and at some point in the future HMRC will come running after me because I have ticked the wrong box on the form somewhere.

The clause goes to the sense of a lot of the things to do with the higher income child benefit charge, particularly this retrospective aspect. Since it was introduced in 2013, there have been challenges around the charge, in terms of people knowing about it and the way in which the system works. The child benefit and HMRC systems do not necessarily talk to one another, and people have been brought into self-assessment without realising it.

I can use myself as an example. When I first phoned HMRC to ask about the issue, it asked, “What is your husband’s income?” I said, “I have no idea—it is his income. It is nothing to do with me.” Many people will not know their partner’s income. There may be reasons why the partner does not want to tell them their income, and that will leave them in a very difficult position. People may be in a relationship of coercive or financial control, and they may not be aware of their partner’s income but may end up falling into liability under the rules that the Minister has set out.

What kind of mitigation, if any, may be put in place should people in future be held liable for something they were not aware of for entirely legitimate reasons? Will there be any such mitigation, or will HMRC try to claw back all the money regardless of the person’s situation? Many people may end up in a situation where they are having income clawed back that they were not aware of. How do the Government intend to continue to raise awareness of the higher income child benefit charge and whether people are going to be affected by it?

As the Low Income Tax Reform Group point out in its excellent evidence to the Committee,

“The number of families affected by the charge has increased substantially since it was first introduced because the £50,000 threshold has not been uprated for nine years”.

The effect is that every year it affects more people, who are then drawn into the charge without being aware of it.

--- Later in debate ---

[Lucy Frazer]

Clause 97 is the third of three clauses relating to HMRC’s tax administration provisions. The clause makes minor technical revisions to the provisions for the calculation of income tax in respect of certain pension charges.

Section 23 of the Income Tax Act 2007 sets out the steps to be followed when calculating income tax liability. At step 7, additional amounts of tax that have not been taken into account in the earlier steps are added to the calculation, and those are listed in section 30. The list in section 30 includes a number of freestanding tax charges relating to registered pension schemes.

The Committee will remember that clause 96 operated on those freestanding charges to provide certainty that taxpayers liable for them must notify their liability to HMRC. The Government have identified the fact that some of those freestanding charges—some of the unauthorised payment charges and surcharges, and the overseas transfer charge—have been omitted from the list in section 30, so we are taking this opportunity to correct that by adding them.

Clause 97 adds to the list in section 30 the overseas transfer charge and the missing unauthorised payments charge and surcharges. The charges ensure that the correct amount of tax due in respect of those charges is produced at the correct step of the tax calculation. The effect is to ensure that HMRC will be able consistently to calculate and assess tax liabilities in respect of those pension charges. In combination with clause 96, clause 97 requires taxpayers to notify HMRC of their liability for the charges, and HMRC will be able to charge penalties for failure to notify and will use discovery assessments to recover tax that has not been notified. Clause 97 is introduced with prospective effect only from the 2021-22 tax year.

Clause 97 makes minor technical revisions and, together with the changes in clauses 95 and 96, gives consistency and certainty of tax treatment in HMRC’s tax administration provisions relating to those freestanding tax charges. I commend the clause to the Committee.

[Abena Oppong-Asare]

I thank the Minister for her explanation. As she mentioned, clause 97 follows on from clauses 95 and 96, and is a chiefly technical clause to amend the list of other income tax charges in subsection 30(1) of the Income Tax Act 2007. The Labour party will not oppose the clause.

[Lucy Frazer]

I thank the hon. Lady.

Question put and agreed to.

Clause 97 accordingly ordered to stand part of the Bill.

Clause 98

Power to make temporary modifications of taxation of employment income

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[The Exchequer Secretary to the Treasury (Helen Whately)]

I thank you, Sir Christopher—and the hon. Member for Gordon, who duly flagged the order of proceedings. Clause 99 and schedule 16 make technical amendments to capital allowances, company car tax and vehicle excise duty legislation so that the tax system continues to function as intended when vehicles are certified through the new domestic comprehensive vehicle type approval scheme due to be introduced this year.

A vehicle manufacturer is able to apply for a type approval to allow specific types of vehicles to be used on the road and can then certify that each vehicle manufactured within that type conforms with the specifications of the approval obtained. Since the end of the transition period on 31 December 2020 following the UK’s withdrawal from the European Union, European type approvals have no longer been automatically recognised for vehicles for use on roads in Great Britain.

Since 1 January 2021, a provisional domestic type approval scheme has been in operation. Manufacturers with an EU type approval have been required to apply for a provisional domestic type approval, which is valid for a maximum of two years. During 2022, the provisional domestic type approval scheme will be gradually replaced with a new comprehensive domestic type approval scheme, which will introduce new certificates of conformity. This will be implemented through separate legislation in 2022 by the Department for Transport.

Clause 99 and schedule 16 make technical amendments to relevant legislation to update the types of official vehicle approval certification recognised for determining the level of a vehicle’s carbon dioxide emissions for the purposes of capital allowances, company car tax and vehicle excise duty, including new certificates of conformity that will be introduced through the domestic type approval scheme, allowing manufactures to continue to report their CO₂ emissions. This will ensure that vehicle owners and keepers continue to pay the tax for their vehicles as intended from 2022 following the introduction of the new scheme.

For the purpose of capital allowances, the clause and schedule will also confirm in legislation that the applicable CO₂ emission figure from the official documentation will be that certified under the worldwide harmonised light vehicle test procedure. The technical changes in the clause and schedule will ensure that the tax system continues to function as intended when vehicles are certified through the new domestic comprehensive vehicle type approval scheme due to be introduced in 2022.

[Abena Oppong-Asare]

I thank the Minister for her explanation of clause 99, which introduces schedule 16, which concerns emissions certificates for vehicles. When purchasing a car, capital allowances are in part determined by the level of CO₂ emissions. A 100% first-year allowance is available for new cars that have zero CO₂ emissions, including electric cars. Otherwise, writing down allowances are available at the main rate of 18% per annum for electric cars and those with low CO₂ emissions—up to 50 grams per kilometre driven—or 6% per annum for those with emissions exceeding 50 grams per kilometre. The measures in the clause allow for greater CO₂ emissions figures to be used for purposes of capital allowances, taxable benefits arising from provisions of cars and vehicle excise duty. For that reason, we will not oppose the clause.

[Richard Thomson]

Thank you, Sir Christopher, for your opening comments on this group. My party does not get too many advances or victories in this place, so it is important to savour them when we can. I will certainly savour this one. I have a sense of clairvoyance about what the Minister will say in response.

We fully support the intention behind schedule 16. It is important to have the certification regime in place. However, as I argued when discussing the SNP’s new clause 5 in the previous group, it is important not only that consumers have confidence in the figures that are published, but to understand the impact that their publication has on behaviour. When we discussed new clause 5, we talked about the very incremental changes to vehicle excise duty, and my party proposed that we should look at the impact of those on consumer behaviour. Similarly, we feel we must understand how emissions certification changes consumer and manufacturer behaviour.

As a fundamental point, when we are as engaged in trying to achieve net zero as all Governments in these islands say that they are, it is important that Government have clear oversight of how spending and taxation influence behaviour in driving movement towards net zero. This measure should be no exception, and that is what our new clause seeks to achieve. In the fairly safe assumption that it will not be accepted by the Government, I would like to know how they intend to monitor how the changes drive behaviour.

Downing Street Garden Event

Abena Oppong-Asare Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

I do not know and I presume that that can be a question that Sue Gray can inquire into.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

Page 1, section 1.3(c) of the ministerial code says:

“It is of paramount importance that Ministers give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity. Ministers who knowingly mislead Parliament will be expected to offer their resignation to the Prime Minister”.

If the Prime Minister knowingly misled Parliament about the existence of this or any other party, will he resign as the ministerial code says he should?

[Michael Ellis]

There is absolutely no indication of anything along those lines, so the hon. Lady is mischaracterising the position and jumping the gun. It is best not to make political points but, rather, to wait for Sue Gray’s investigation.