Finance Bill (Third sitting)

Alex Ballinger Excerpts

Committee stage
Thursday 30th January 2025 Public Bill Committees

[James Wild]

As we have heard from the Minister, clause 65 increases excise duty on all tobacco products and the minimum excise tax on cigarettes by the duty escalator RPI plus 2%. In addition, the excise duty rate for hand-rolling tobacco increases by an additional 10%. This is a one-off increase in addition to the restated policy of increasing rates in line with RPI plus two percentage points. We are broadly supportive of these measures but I have some questions around purchaser behaviour and its impact on the illicit market and enforcement. In addition to speaking to clause 65, I will also speak to new clause 5, which stands in my name.

Tobacco receipts are expected to be £8.7 billion this year, down by 2.7% on last year. They are forecast to decline by 0.5% a year on average over the rest of the forecast period to £8.5 billion, as declining tobacco consumption offsets increasing duty rates. The tax information and impact note explains that over the four years from 2019 to 2023, the tobacco escalator coincided with a reduction in smoking prevalence from 14.1% to 11.9% of people aged over 18. That is clearly welcome. The Government are bringing forward the Tobacco and Vapes Bill, which the Minister referred to and which includes lots of measures to make vapes less attractive to children and harder to get hold of. There is a lot to be said about that Bill, but fortunately, that is the job of another Committee.

Increasing the price of tobacco clearly comes with the risk of boosting the illicit market. The tax information and impact note suggests that some consumers might engage in cross-border shopping and purchase from the illicit tobacco market. HMRC will monitor and respond to any potential shift. Indeed, the OBR has suggested that the duty rate is beyond the peak of the Laffer curve—the revenue-maximising rate of tax. Can the Minister confirm what measures will form HMRC’s response to any shift in illegal consumption?

There are also questions around the figures. Although HMRC estimates that 10% of cigarettes and 35% of hand-rolling tobacco consumption is from illegal and other non-UK duty paid sources, evidence submitted by the industry believes that is a significant understatement. Its data shows that the consumption of tobacco from non-UK duty paid sources currently accounts for 30% of cigarettes and 54% of hand-rolling tobacco consumption. Has the Minister discussed with HMRC the difference between those figures and the basis on which they have been put together?

The Tobacco Manufacturers’ Association said that the illegal market is not in decline but that, contrary to HMRC’s claims, it is expanding. As well as providing more accurate figures on the scale of the illegal market, it would be useful to know whether the Government have calculated the potential consequences for retailers and law enforcement of an expanding illegal market.

[Alex Ballinger (Halesowen) (Lab)]

Does the hon. Member agree that the tobacco market’s estimates are not unbiased? It has form in exaggerating the scale of the illicit tobacco market in the UK.

[James Wild]

The hon. Member has probably seen the same evidence produced by the industry as I have; I do not think that we should dismiss it out of hand. Representatives from the industry do, for example, go around football terraces, pick up the empty packets, see where they came from, and do sampling or take other measures. Of course the industry’s evidence should be challenged and tested, but my point is about whether HMRC has worked with the sector to see if its figures are wrong. If they are, and HMRC’s are perfectly right, we can follow the HMRC figures. I am raising a legitimate concern about the accuracy of the data to make sure that we are all operating from the same page because, as the OBR has pointed out, we may already have reached the peak point where the tax will be doing harm.

The Minister referred to the success of enforcement over the last couple of decades. In March last year, the previous Government set out a new strategy to tackle illicit tobacco. With evidence of a substantial illegal market—and whichever set of figures we take, it is substantial—what steps are the Government taking? Are they taking the previous Government’s strategy forward or will they introduce their own strategy?

The industry has specifically proposed that the Government provide trading standards with full access to the powers granted to HMRC under the Tobacco Products (Traceability and Security Features) (Amendment) Regulations 2023. At present, the legislation allows trading standards to refer cases to HMRC, which will then consider imposing on-the-spot penalties of up to £10,000 on those selling tobacco.

The industry proposed that it would be far more effective for trading standards to apply the penalty at the point of enforcement rather than having to refer the case to HMRC. It also suggested allowing trading standards to keep the receipts from any such penalties to reinvest in its enforcement action—we are all familiar with the pressures that trading standards is facing. Will the Minister say whether the Government have considered those proposals and, if they have not, will he?

I have tabled new clause 5 to ensure there is better understanding of the risk around the illicit market. The Minister respectfully dismissed the need for it, but it would require the Chancellor to, within six months of this Act being passed, publish an assessment of the impact of the changes introduced by clause 65 of the Bill on the illicit tobacco market. As we have heard, increasing tobacco duty could alter the behaviour of consumers, and we could see greater illicit market share.

Evidence from the industry—which may be contested—shows that non-UK duty paid sources are significant. There is clearly a risk that a further increase to tobacco duty could boost the illicit market, and HMRC needs to act to protect lawful revenues for the taxpayer. We would therefore welcome the Chancellor publishing an assessment of the impact of the changes. As I set out, we will not oppose clause 65, but I look forward to the Minister’s response to my points, particularly on the illicit market.

Finance Bill

Alex Ballinger Excerpts

2nd reading
Wednesday 27th November 2024 Commons Chamber

[Alex Ballinger (Halesowen) (Lab)]

It is a pleasure to follow my hon. Friend the Member for South Derbyshire (Samantha Niblett), who gave a wonderful maiden speech. I am sure that her daughter Lillian will look on her as a lovely role model as she moves forward.

Earlier this month, we witnessed an historic moment as the first ever female Chancellor delivered the Government’s Budget—a comprehensive plan that is designed to support working people, rebuild our economy and bring fiscal responsibility back to the heart of Government. The Budget delivered a plan for recovery, a plan to undo the damage left by the previous Government and, most importantly, a plan that will benefit the people of Halesowen and the wider community.

However, let us be clear: this Government inherited a dire financial situation. [Interruption.] It is true. The Chancellor exposed a £22 billion black hole that was left by the previous Government, and a series of undeliverable promises that the Conservatives knew they would never have to keep. The last Government knew that they had no money to deliver their agenda, yet they concealed the truth from the British people, leaving the incoming Government to pick up the pieces. The Budget was about sorting this out, and we are committed to doing just that.

Our economy faces multiple challenges, including high debt, underfunded public services and rising youth unemployment, but the true cost of the past 14 years is felt most acutely by the people who have been left behind. In Halesowen I hear from residents every day: people who have been waiting weeks for a doctor’s appointment; people who are forced to travel miles to receive healthcare; and people who are completely unable to access their NHS dentist. Fourteen years of cuts have left our NHS in crisis, and no matter someone’s political affiliation, no one can deny the challenges our health service faces.

But it is not just in healthcare. Our schools, roads, railways—all of this infrastructure—has suffered from years of under-investment. Our public services are falling apart.

[Graham Stuart]

It is tempting for Members to read out the rote stuff that is given to them—as some of the hon. Gentleman’s colleagues have been prepared to do, but are mostly not prepared to do today—but I just gently point out that there was never a reduction in NHS spending; in real terms it went up in every single year. If there is a belief that the NHS can be magically turned around by having above-inflation increases in spending alone, I can assure the hon. Gentleman that that is not true, because we did it every year and we still had demand going beyond the resource.

[Alex Ballinger]

The right hon. Gentleman will have noticed that we reached record NHS waiting lists under the last Government, more than 7 million people waiting and many of my constituents waiting over two years. If he thinks the investment in the NHS by the last Government was enough, he is completely wrong.

Our roads are literally crumbling, working families are struggling and the hope of upward mobility is slipping further out of reach. We cannot let this continue. The Government are faced with what the Institute for Fiscal Studies has described as a genuinely difficult inheritance. The truth is that the last 14 years can be described as, at best, a period of managed decline; or at worst, wilful neglect. The last Government will be characterised as an Administration that allowed services to erode and future generations to be abandoned.

We must take a different approach and offer real change. We are not pretending that the work ahead will be easy, but we are determined to rebuild and restore. A key part of this recovery is investing in our most vital public services, especially the NHS, which cannot survive on good will alone. The Budget commits to injecting much-needed funds into our healthcare system, securing a lifeline for the NHS that will allow it to begin this recovery.

The Budget is also about presenting an offer to working people who have been neglected for so many years, including a rise in the minimum wage to boost the living standards of 3 million low-paid workers; NHS funding to support 2 million more operations, scans and appointments every year; fuel duty frozen for another year, providing relief to drivers and families; a £500 million investment to fund the construction of 5,000 more social homes; a significant increase in the carer’s allowance earnings limit, because those who care for our loved ones deserve our support; and a crackdown on tax avoidance, fraud and waste, ensuring that the super-wealthy pay their fair share of tax.

The decisions in the Budget, though some are difficult in the short term, are the right ones for the long-term good of our country. This is a Finance Bill that prioritises public services and working people without raising taxes on the majority. It is about restoring fairness, rebuilding trust and setting the country on a new path towards growth. It is also important to remember that fiscal responsibility is central to this Government’s approach. The IFS has praised the soundness of our fiscal rules, ensuring that our efforts to drive growth are sustainable and the public finances remain on a stable footing. Changing the fiscal rule to allow more investment is both sensible and necessary, and this investment will boost long-term growth.

The Bill is not just about recovery; it is about securing a prosperous future. Businesses in Halesowen have been struggling, especially on our high streets, where many have been forced to close their doors in recent years. I have heard the concerns of small business owners and the concerns shared by the Black Country chamber of commerce, and I am pleased that the Chancellor’s plans include support for high street businesses, including business rates reform, which will give local shops the chance to compete against tax-avoiding multinationals.

[Matt Rodda (Reading Central) (Lab)]

My hon. Friend is making an excellent speech highlighting a whole series of important points. I just wondered whether he was going to come to the cut in beer duty. I know there are a number of famous brewers in his area and this is an important measure for many brewing towns—[Interruption.] This is an important point for many brewing towns and many small, related businesses in that sector. I have a number of SMEs in my own constituency that will benefit from this, as well as pubs. Does my hon. Friend welcome this measure, as well as the important measures he has mentioned for small businesses in town centres?

[Alex Ballinger]

I welcome the 1p reduction in tax on beer. I have spoken to many businesses in my constituency’s hospitality sector, including many pubs, that are happy with this measure, which they hope will increase the footfall in our town centres and in their businesses.

I am also delighted that the Budget confirmed £20 million of investment in the redevelopment of Haden Hill leisure centre in Cradley Heath in my constituency, and £20 million of investment in Halesowen town centre, to redevelop what is becoming a difficult area.

The Bill will ensure that local assets that serve the community are protected and enhanced. It marks a turning point for our country, laying the groundwork for a better future. It is a plan that protects our public services, supports working people and puts the economy on a sustainable path. I fully support this Bill for Halesowen and beyond. It delivers hope, invests in communities and fixes the foundations of the economy, so that we can deliver the change for which the country voted.

--- Later in debate ---

[Josh Simons]

I entirely agree with my hon. Friend. To be specific about the benefits that will accrue, there are 500 families in my constituency who for decades have watched the Government take out of their pension scheme and refuse to rectify the ongoing justice. We all know what Conservative Members think of miners. By ensuring that they get a 32% increase in their pension we are not only putting money directly into the pockets of the working people who built this nation but signalling our respect for an industry and profession that made this country’s wealth.

The second smaller, subtler, sometimes missed thing that demonstrates the values that lie behind the measures that the Finance Bill will pay for is the £44 million funding increase for kinship and foster carers. My council in Wigan is a pioneer in the provision of adult social care and care for children. It has blazed the way in ensuring that it works with third sector organisations and maintains the budget to fund its own care provision publicly. Now it is backed by a Government who care about what carers do. As the hon. Member for South Derbyshire has argued, the flipside of a high-productivity and high-technology economy is caring. Caring is the most human thing that we will do more and more of as we build a higher-tech and higher-productivity economy. The Government’s £44 million increase will ensure that caring is properly funded in this country.

[Alex Ballinger]

I thank my hon. Friend for mentioning carers. I was also really pleased to see in the Budget an increase in the carer’s allowance eligibility limit to £196 a week, which will allow many carers to work longer and earn more money before their allowance is withdrawn. Does he welcome that commitment, which shows the real commitment of the Labour Government to supporting carers?

[Josh Simons]

Not only do I agree with my hon. Friend’s point about the carer’s allowance, which will benefit 8,000 people in my region of the north-west, the increase demonstrates a wider point about respecting those who provide care in our society and economy. For too long, we have thought the profession to be unskilled, and have undervalued it as a path of work. In several of the measures that the Finance Bill will pay for, the Government have demonstrated that caring is a vital part of the economy that we wish to build. I have said this before, and will say it again: higher productivity and more technology mean more care. We must respect and value that most human of professions if we are to build an economy in which we all want to live in the future.

Financial Assistance to Ukraine Bill

Alex Ballinger Excerpts

2nd reading
Wednesday 20th November 2024 Commons Chamber

[Alex Ballinger (Halesowen) (Lab)]

It is a pleasure to have heard the beautiful maiden speech of my hon. Friend the Member for Amber Valley (Linsey Farnsworth), whose father must be really proud.

It is excellent to hear the details of the Bill, but Russia’s continued assault on Ukraine is absolutely terrifying. We must not buy into a narrative of peace on Russia’s terms; that would be tantamount to appeasement. A sovereign, democratic country ceding territory to an aggressive imperial country basically takes us back to world war two—an idea that I find absolutely terrifying. It would completely embolden Putin, and eastern Europe and the Baltic would be next on his target list.

It is completely right to say that defence of the UK starts in Ukraine. We are doing everything we can to support Ukraine. It was great to hear about the 50,000 Ukrainian troops who have been trained by the UK through Operation Interflex, and I am glad that that policy is being extended. It is excellent to hear about the military support that we are providing to Ukraine, including the Storm Shadow missiles that we are hearing about in the media at the moment. I trained on those weapons, and I hope that they can help to take the fight to the Russians. It is also excellent to hear that we are providing financial support of £12.8 billion, as well as an additional £2.26 billion from interest on seized Russian assets.

Unfortunately, 1,000 days since the invasion of Ukraine, the Russian economy is, despite sanctions, doing better than many of us expected at the start of the conflict. However, the Russians do face challenges, including the highest casualty rate since the conflict began, higher interest rates, and now a labour shortage in the Russian economy. We must sustain our support for Ukraine and increase the pressure on Russia, which cannot be allowed to succeed.

The Bill is an important step in sustaining our support for Ukraine. The £2.26 billion will help Ukraine to invest in air defence, artillery and other military equipment. I fully support the Bill, but I have a couple of questions for the Minister. What more can be done to seize frozen Russian assets? I think in particular of the £2.25 billion from the sale of Chelsea football club, and other assets that must be held in the City of London. We must use everything in our arsenal, and I would like the UK Government to do more to seize and use such assets, rather than using just the interest, as we are committed to doing at the moment. Will she confirm whether this is a non-recourse or recourse loan? It is important that, if the interest from Russian assets is not what we expect it to be, there is no expectation on the Ukrainians, given all the difficulties that they are facing, to repay the bill.