Finance (No. 2) Bill

Alison Thewliss Excerpts

Report stage
Wednesday 2nd February 2022 Commons Chamber

I have nothing much more to add, other than to say that it is a great pleasure to work with Opposition colleagues. I am not sure that I ever thought I would find myself tabling an amendment on behalf of the RMT, but that is what Brexit has done, to be fair—the RMT’s support of Brexit was not without good reason. We are used to having a world run from Brussels, where the business lobby was based on cosy corporatism. In how we now approach economic policy post Brexit, we are determined to ensure that it delivers for the whole of Britain and the whole of our business community; let us ensure that it delivers for the workers too.

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to follow the hon. Member for Thurrock (Jackie Doyle-Price). I very much agree with the principles of her new clause 2 because, if this tonnage tax is to mean anything, it should be about more than just changing a flag; it should be about changing the culture, as she mentioned. I am proud to have in my constituency City of Glasgow College, which has trained a lot of seafarers. It is a big hub for maritime education worldwide. It would be a real boon to it if we could encourage that within the UK, as we are at the moment, and in an independent Scotland it will certainly be a beacon to the world as an island nation.

I rise to speak to the amendments and new clauses in my name and those of my colleagues. As we did in the Bill Committee, we want to highlight the points on which the Finance Bill falls short. Last year, we saw COP26—also in the great constituency of Glasgow Central, where the world came to Glasgow—and I feel that the Finance Bill could have been the opportunity to mark in the legislative process in this place how important the climate change agenda is. It should have run through this Finance Bill and this Budget as through a stick of rock, but unfortunately we are left with just a fluffy sweetie in the bottom of someone’s pocket. It is not enough.

We therefore feel that there should be an assessment of the effect of the Bill’s provisions on climate change and how they affect the UK Government’s net zero targets. In Scotland, we have more ambitious net zero targets than the UK does. The Scottish Government are delivering lasting action to secure a net zero and climate-resilient future in a way that is fair and just for everyone. The SNP, in government in Scotland, is committed to a just transition to net zero emissions by 2045, with an ambitious interim target in 2030 of a 75% reduction—targets that form the heart of Scottish Government policies and actions.

An example of how that is already being delivered includes the groundbreaking and truly historic ScotWind announcement. We also already have the equivalent of almost 100% of gross electricity consumption generated from renewable sources in Scotland. We have commitments for the renewal of peatland, for the planting of trees and for the tackling of biodiversity loss, and we are leading the Edinburgh process to ensure that a whole-of-Government approach is adopted globally, while committing to protect 30%—and highly protect 10%—of our land for nature by 2030.

All those things are laudable policies, but we see no actions by the UK Government to incentivise them. Finance Bills are full of tax cuts, tax rises, incentives and different measures, and this Bill could have moved so much further to incentivise net zero through the measures introduced. The Bill does not go far enough. It is important to measure not only what is being done, but what could be done. Were the UK Government serious about their climate change commitments, they would rethink the illogical decision to deprioritise the carbon capture and storage facility in the north-east of Scotland. It was a real opportunity. The Government could have and should have gone further, but they short-changed Scotland yet again.

We support a great number of the new provisions in the Bill to do with economic crime. Members should have read already the excellent report released by the Treasury Committee, on which I sit, and which I came from earlier on this afternoon. The 11th report of the Committee, on economic Crime, is a very compelling and detailed read. It notes:

“Economic crime is a major and rapidly growing problem in the UK”,

and that while there has been a range of different initiatives by the UK Government, economic crime

“seems not to be a priority for law enforcement.”

Ministers came to the Committee and told us that they were “not happy” with the progress the Government have made in tackling economic crime, and I could not disagree with the Government on that point. There is certainly a lot more to be done.

While the economic crime levy is broadly welcome, it strikes me that a lot of taxes here are taxing people who are doing the right thing already, rather than chasing the people who are not. That really ought to be more the priority, because we have seen a Minister in the House of Lords resign because of the Government not doing enough and being frustrated at the lack of action by the Government to tackle fraud in the coronavirus loan schemes. There is an awful lot more that the Government could and should be doing on this.

We seek movement on the economic crime Bill. We want there to be an economic crime Bill because so much of the legislation on this issue is still held at Westminster. On the registration of companies, for example, I have spoken long and weary, and will continue to do so, about the deficiencies in Companies House. The register is complete and utter guff, in that people can put anything in and it is not checked, because there is only an information gathering function, rather than any kind of checking, verification or anti-money laundering organisation at Companies House, and that needs to change. We very much want to see movement on the long overdue registration of overseas entities Bill, and we support all amendments to this Finance Bill to that end. I sat on the Joint Committee, with Members of the House of Lords, on the draft Registration of Overseas Entities Bill, and we took copious information from experts in the field. They said to us, “If you shut down this route, we know where people are going to go next”, and “If you do this, then this will happen.” We made recommendations to the Government, and the Government did not even at that time take up all the recommendations the Committee made.

Since that report was published and the Joint Committee sat, things have only got markedly worse. The criminals are getting away with more, and that has a real effect, because there are implications if those buying up huge swathes of London property cannot be traced. If that property, which should be housing people, is not available to them because it is being used as a means of money laundering, that should worry us all. There are of course implications more widely of the money coming in from Russian oligarchs, with the Government being left vulnerable in dealing with the wider crisis in Ukraine.

If we do not know who owns such property, how can we sanction them and follow them up? How can we take some action against those using the UK as a means of laundering their dirty lucre? We cannot, and it is really important that the UK Government act on this more urgently than they have before. As the hon. Member for Ealing North (James Murray) mentioned, some of this began in 2016. There were Bills in 2018, including the opportunities in the Sanctions and Anti-Money Laundering Bill in 2018, and all such opportunities have been missed, and they are being missed yet again in the Finance Bill we are discussing this afternoon. I think there needs to be an awful lot more action taken, and an awful lot more quickly.

I have quoted other people talking about economic crime recently, but I want to mention Professor Sadiq Isah Radda, who, as the executive secretary of the Presidential Advisory Committee Against Corruption in Nigeria, told our Prime Minister that London was actually

“the most notorious safe haven for looted funds in the world today”.

That really should spur the Government here to action. This has been going on for far too long, and it absolutely must be tackled. It is a stain on the UK and, through things such as Scottish limited partnerships—the legislation those on is reserved to here; it has nothing to do with Scotland—it tarnishes Scotland with a dirty name by association.

Each Finance Bill makes our tax code more complex and, within that, there are more opportunities for people to seek loopholes and ways to reduce the tax that they should pay. For all of us, tax should be regarded not as some kind of burden, but as a duty and the price we pay for living in a civilised society. The more complicated the tax code, the more it can be exploited.

That complexity is hinted at somewhat in the corrective amendments that Ministers have tabled at this late stage. Although this Bill is so complicated, they come to us on Second Reading and in Committee and say, “Oh yes, all things are fine”, but today, at this late stage, we find that things are not quite right and have to be corrected. That makes it all the more worrying that the Government are bringing in this whole new proposal—the public interest business protection tax—without due notice. Again, there may be legitimate reasons for not giving due notice, but there is no consultation or evidence gathering that we get to see before we come here to vote on it today. That goes alongside my general complaint about Finance Bills, which is that their Bill Committees do not take evidence and they should, because that is really important. The public interest business protection tax may well be laudable, but we just do not know sufficiently whether it will be effective, what the evidence is or the Government’s full motivations for introducing it.

I am very grateful to George Crozier of the Chartered Institute of Taxation and the Association of Taxation Technicians, who wrote to me last night with some of his concerns about the proposal and the way that it has appeared at this late stage. Some of his questions about bringing in a new tax without due notice are about the mechanisms in the Bill. It is supposedly time-limited to 12 months, so theoretically it could then be extended in time and in scope by regulation. We do not know whether the Government intend to do that if Ofgem do not move as quickly as they want it to. Again, I accept that the proposal may be about getting Ofgem out of a hole. I am sure that is fine, if that is what the Government want to do, but does that not indicate that it is much easier to make tax changes than effective regulatory changes when there is a point of crisis?

I was very glad that, by coincidence, we on the Treasury Committee had Jim Harra of Her Majesty’s Revenue and Customs in front of us this afternoon. I asked him what he felt the impact of this proposal would be, including whether it would have an operational impact. He said, “No, because we hope it raises no taxes whatsoever”. It is unusual for the head of HMRC to say that he hopes to raise no tax from a measure in a Finance Bill, but that is what he said.

As an anti-avoidance, preventive measure, sure, that is fine, but the way in which it has been introduced this afternoon is not very good. We have seen this very late, and we get all the documents, explanatory notes and all the other things that come with it. To introduce something such as this in a Finance Bill seems very suboptimal, as the Minister is wont to say.

Bringing in a policy such as this also misses the wider set of reforms that are needed to the energy system, which the Government are not taking forward with sufficient urgency. My Glasgow Central constituents and households across these islands are urgently crying out for practical support with their energy bills. They need to know that they can afford to put the heating on in the morning. They need to know whether they can afford to use the cooker to heat up their kids’ dinner. They need to know whether they can turn the lights on or whether they all have to huddle in the dark with candles. That is the stark reality for so many people, and it is part of what is missing from this Government’s action. I said at Treasury questions yesterday that it had been almost two months since the Chancellor came to the House. Although he came yesterday, there was still no practical solution for such people; there is no practical solution in this Finance Bill.

While I am here, I want to ask the Minister about a query raised by the former Pensions Minister, Steve Webb, who pointed out a change on the HMRC website that says:

“Rates for Working Tax Credit, Child Tax Credit, Child Benefit and Guardian’s Allowance for the 2022 to 2023 tax year are provisional and may change between now and 6 April 2022”.

I asked HMRC officials why that change to the website was made and they did not know. I ask the Minister whether she knows why that change has been made. Are the Government riding to the rescue of those people, or is it just a change on a website? It would be useful for people to know the full implications.

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[Alison Thewliss]

I thank the Government and the official Opposition Front-Bench teams for the way in which proceedings on the Bill have been conducted. We have all learned an awful lot about each other, and it has been a genuinely interesting process. I thank the Clerks, Chris Stanton and Kevin Maddison, for their support, without which we would definitely have struggled to put our amendments forward. I thank Clorinda Luck, one of the SNP’s senior researchers, for stepping in at short notice to cover some of the research on the Bill—I am very grateful to her for that work.

Although some of the measures in the Bill are welcome, we in the SNP have to oppose it because it is such a missed opportunity to do so much more about economic crime and the scourge of money laundering and kleptocracy coming to the shores of these islands. There is a lack of action to tackle the misuse of Scottish limited partnerships and shell companies, and to tackle the money flowing through the very city we are standing in. The Bill is also a missed opportunity to do more on net zero in particular. Given last year’s COP, there should have been a great deal more to focus minds and move to a greener and fairer economy.

The Bill is indicative of a Government who are removed from the problems that ordinary people face and who are without solutions to the challenges that our constituents are seeing right now: the challenges of inequality, the scars of 10 years of austerity, the cost of living crisis, which is making life so very difficult for so many people right now, soaring inflation and energy prices that are spiralling out of control.

Contrast that with the opportunity presented by Kate Forbes in the Scottish Parliament last week. With the limited powers that we have over the Scottish Budget, that Budget offers great hope to the people of Scotland. We look enviously at the powers that we could have as a full, independent, normal nation with the full levers to make the real inroads into inequality, to make life fairer, better and more just for the people of Scotland. So we cannot support this Budget and we wish that very soon we will have that full range of powers to make things better for our own citizens.

Question put, That the Bill be read the Third time.

Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 1st February 2022 Commons Chamber

[Rishi Sunak]

With regard to the cost of living, the Government have, as we have already discussed, put a range of measures in place to help people, not least the increase in the national living wage by £1,000 a year, the cut to the universal credit taper rate and the freezing of fuel duty. The Government will not shirk from funding the NHS sustainably and responsibly. It is the people’s No. 1 priority; the backlogs are rising at an unprecedented rate, and I think people would like to see them addressed, which can be done only with a sustainable funding stream. That is what we have created, and this is a progressive way to do it. Although these decisions are difficult, a responsible Government do not shirk from them.

[Alison Thewliss (Glasgow Central) (SNP)]

Inflation is running at 5.4%, the highest level in nearly 30 years. It is already having a real and painful impact on people and businesses, with worrying reports today that increased bills are pushing businesses to lay off staff. The upcoming national insurance hike is a tax on jobs as well as on individuals. This is a cost of living crisis, yet today is the first time that the Chancellor has been to this House since the start of December, and we still do not hear a plan from him—he is too distracted by plotting for the Prime Minister’s job to help those affected by this crisis. People are struggling, so what additional practical financial support can they expect from this Chancellor, and when?

[Rishi Sunak]

The hon. Lady talked about inflation; she is right and I am very cognisant of the anxiety that people are feeling about rising inflation. It is also right to put that in context. She said it is the highest tier since the early 1990s, and that is right. We are also seeing this as a global phenomenon—inflation in the US is running at its highest since the 1980s, and the highest since the eurozone was created—so we are not alone in facing those challenges. The Government have already set out a plan, but it is a plan that is working. In contrast to what she said about people losing their jobs, what we have seen is 11 months of falling unemployment, which is now back to the almost record pre-pandemic lows, and record numbers of people in work. That is the best way to tackle the cost of living—get people into work and make sure those jobs are well paid.

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

My hon. Friend, who has great expertise in this area, makes a reasonable point. The Government’s Help to Save scheme is under way, but the Government continue to work very closely with the Money and Pensions Service to look at new ways of increasing financial resilience and getting young people to understand the opportunities of saving earlier.

[Alison Thewliss (Glasgow Central) (SNP)]

Lord Agnew resigned because he could no longer defend the level of fraud in the bounce back loan scheme and the lack of action to tackle it. Much of that has been facilitated by the absolute shambles of the Companies House register. I do not want Ministers to fob this off to the Department for Business, Energy and Industrial Strategy, because that is exactly the disconnected approach that Lord Agnew criticised. If there is an economic crime Bill, will Ministers take action to give Companies House anti-money laundering responsibility, rather than watching as fraudsters using UK shell companies waltz off with billions of pounds of public money?

[John Glen]

I am grateful to be able to confirm to the hon. Lady, as I have on numerous occasions in Committees over the last two or three years, that this is a key priority for us in the Treasury. Obviously, as the Chancellor said, we cannot comment on future legislative agendas, but the measures she mentions, picking up on the Financial Action Task Force report from 2018 with respect to Companies House, are something we agree with.

Tackling Fraud and Preventing Government Waste

Alison Thewliss Excerpts

Tuesday 1st February 2022 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

“Lamentable”, “woeful”, “arrogance, indolence and ignorance”—the words of Lord Agnew’s resignation should still be ringing in the Minister’s ears, as should the fact that the disconnect and disinterest in a range of Departments were part of the problem that he outlined. His words should prompt the Government to take action to fix the scandal of taxpayers’ money walking out the door.

In Lord Agnew’s resignation letter, he said:

“As the Minister for Counter Fraud, I have been asked today to publicly defend in Parliament our track record in countering fraud across Government. Unfortunately I am simply not able to do that given the lamentable track record that we have demonstrated since I took up this post nearly two years ago.

It has certainly not been through want of trying, but the Government machine has been almost impregnable to my endless exhortations.”

That is certainly a condemnation of the Government. The Paymaster General has become the Minister for defending the indefensible in the House, as he does yet again today. Perhaps if other Front-Bench Ministers and Conservative Back Benchers took the example of Lord Agnew and his attitude to them, many of them would learn something and resign too.

We are in a cost of living crisis, yet the sums of money that could go to help people now lie in the offshore bank accounts of crooks and fraudsters. Let us not forget that HMRC has stated that the levels of fraud in the covid support schemes are in line with its original planning assumptions. Planning for £4.3 billion-worth of fraud is absolutely breathtaking. The money that was committed in the Budget came far too late because these problems have been known about for years. The bounce back loan scheme, about which Lord Agnew was denied information as a Minister—that should really worry us all—is of course a UK Government-backed scheme, with an estimated £4.9 billion lost to fraud. Just look at the loans paid out to companies that were not trading. Lord Agnew indicated that 26% of losses are estimated to be attributed to fraud rather than to credit failure. This cannot be fobbed off to the banks, because the Treasury asked them to do this and they did it because the loans were Government-backed.

Let us put these figures into some context, because they are massive amounts of money. Scotland’s entire devolved social security system is forecast to cost £4.1 billion in the next financial year. The Institute for Fiscal Studies has calculated that a one-off £500 stimulus cheque for those on universal credit could cost £3 billion. A 5% pay increase for all the NHS staff in England would be £1.7 billion. This is money that could have been much better spent had it not walked out the door and into the hands of fraudsters.

We cannot deny that the money needed to go out the door quickly in the pandemic. I remember, during those early days, hearing on the Treasury Committee from banks and Treasury officials about how concerned they were about the fraud risk. Some of the checks that could have prevented this fraud are simple—a national insurance number or an HMRC reference—but others speak to a long-term systemic failure that the UK Government have been warned about repeatedly—the system of registration at Companies House. That is not an issue of reform, as some have tried to point out; it is an issue of legislation and an opportunity that this Government have missed time and again.

[Richard Fuller]

I am looking forward to hearing the hon. Lady’s recommendations on reforming this important area. She mentioned her role on the Treasury Committee. Did she, at the time, have concerns about the use of the British Business Bank for the delivery of loans to businesses?

[Alison Thewliss]

The British Business Bank being a relatively new mechanism, of course there were concerns about that. We took a lot of evidence on the concerns that existed around loans and other things that were going out the door, but that does not mean that things could not have been put in place to prevent this, and we did hear evidence to that end.

[Richard Fuller]

rose—

[Alison Thewliss]

I have a lot to get through. If the hon. Gentleman wants to make a speech later on, I am sure we will all be incredibly interested to hear what he has to say.

I have spoken at every opportunity, and Ministers have heard me at every opportunity, on the need for reform of Companies House, and it still baffles me why the Government are so lackadaisical about this clear open door to fraud. Companies House remains a repository of information, not a checking service. It is not an anti-money laundering supervisor. In answer to me at Treasury questions earlier, the Economic Secretary to the Treasury referred to the 2018 Financial Action Task Force report, but that still means four years of inactivity in this House. In 2018, as he will remember, we also had the Sanctions and Anti-Money Laundering Act 2018, a further missed opportunity to have closed this door and locked the fraudsters out.

Companies House has no connection with the UK Government’s Verify scheme, which is required for a passport, a driving licence or a tax return. For a minimal fee of only £12, someone can set up a company in the UK with no checks on who they are and what they intend to do with that company. Compare this with, for example, the £1,012 for a child to take up their right to citizenship. The money involved is absolutely baffling. Last year, in This is Money, Martin Swain, director of strategy, policy and external communications at Companies House, admitted:

“Even though, sometimes, we know that the information is incorrect or potentially fraudulent, the registrar is legally required to register it.”

The Companies House website even has a disclaimer at the top that says:

“Companies House does not verify the accuracy of the information filed”.

Why is this being allowed to continue? Even a simple drop-down menu in the registration process would stop people putting in things like “Anytown, Anywhere” rather than a place that really exists.

[Emma Hardy]

The hon. Lady is making an excellent speech and pointing out all the problems with Companies House. At the moment, as it says, it would take over 10 years, on the pace of change that we have from the Government, to see action taken on this, and all the time people are setting up these fraudulent companies.

[Alison Thewliss]

The hon. Lady is absolutely correct. The rate at which people are doing that should be causing the Government real fear, and it is not. This makes no sense at all. Every day that the Government allow it to continue, the register becomes more and more useless and more and more full of junk information and fraudulent transactions, and they should be embarrassed by that.

It has been a matter of public record for years that the Companies House register is utter guff. It contains names such as “Holy Jesus Christ”, whose nationality is listed as “angelic”, residence as “heaven” and profession as “creator”, and “Adolf Tooth Fairy Hitler”, listed as one of the clearly invented directors of a company calling itself Spypriest Ltd. There are also some highly precocious company directors who are only a few months old. Research by Global Witness in 2018 identified 4,000 listed beneficial owners under the age of two, including one who had yet to be born—talk about being born yesterday!— as well as five beneficial owners who controlled more than 6,000 companies. This is just not credible, and the Government know it.

During the past week, the Companies House expert Graham Barrow has been monitoring in real time the construction of a network of companies using real names but fictitious addresses. This leaves real people affected, but often unaware that their names are being abused—and difficult to contact, because the addresses are not real. It also affects the counter-fraud efforts to which the Minister referred. The people setting up those fake companies cannot be traced and chased down, and are allowed to get away with it.

It gets worse, however, because this open door at Companies House allows dirty money to be laundered through the UK. Oliver Bullough is one of many who have pointed out that kleptocrats from around the world have been abusing UK corporate structures—including Scottish limited partnerships—for years to shift their ill-gotten lucre. There are pressing implications for the current situation in Ukraine, but this is not new; it has been going on for years, completely unimpeded. The news that the National Crime Agency has today been able to seize £5.6 million from an Azerbaijani MP based in London is of course welcome, but that is short of the £15 million that the NCA wanted to seize. It is the tip of a massive iceberg. Duncan Hames of Transparency International has said that it estimates that the ruling elite of Azerbaijan own £700 million worth of property in the UK, and that about £2 billion has been shifted around Europe, some of it through our corporate structures. That makes the delaying of a registration of overseas entities Bill even more unacceptable, and even more baffling.

[Catherine West]

Does the hon. Lady agree that while the arrangements relating to foreign entities do need to be a tightened, a culture change is also needed? She will be aware from press reports that the Foreign Secretary dined out at a Tory donor’s restaurant and charged that to the taxpayer although civil servants had said that the restaurant was too expensive. Does she agree that the Foreign Secretary should have to pay the money back?

[Alison Thewliss]

I agree that there needs to be probity when it comes to that kind of money and that kind of behaviour—particularly the overruling of civil servants, if that has indeed been the case.

When I raised some of these matters in the House last week, Ministers pointed to unexplained wealth orders as a great badge of success, so I tabled a parliamentary question to find out how successful they had been. In 2018, the year in which they were introduced, there were three. In 2019, there were six. I thought, “That is great—the numbers are going up”, but there have been none since then. Is this a measure that is actually effective in tackling unexplained wealth? I am not sure that it is.

[Peter Grant (Glenrothes) (SNP)]

My hon. Friend will recall that the first ever unexplained wealth order was awarded against someone who was only allowed to become a United Kingdom citizen because of the billions of pounds that she had promised to bring into the United Kingdom. Does my hon. Friend believe that that is an indication that Government policy is fighting against itself? On the one hand the Government want to get people with lots of money into the UK, and on the other hand they do not ask too many questions about where that money has come from.

[Alison Thewliss]

My hon. Friend is absolutely correct to draw attention to that. It is one of many deficiencies in the Home Office systems as well. It seems that those with money are given a free pass, whereas those who come here with more humble undertakings to begin their lives here, to work and to build a family, end up being penalised and having to pay an awful lot more in fees, and experiencing all the challenges that that brings.

Hon. Members may think that some of these issues with Companies House seem a bit remote from the real world and the real lives of our constituents, but that could not be further from the truth. During lockdown, a company in Glasgow using myriad company structures made claims under the furlough scheme, but employees of that company never received the money that they were entitled to. Even if the company directors ended up being prosecuted, or HMRC ended up getting its money back, those employees would still get nothing. That shows the complete unfairness in the system. I would be interested to know whether the Government have any figures, from when they have chased down these companies, on how many employees never saw the money that they should have got and that they needed to get by.

For those completely excluded from the covid support schemes, this is all the more galling. Limited company directors and pay-as-you-earn taxpayers were left out because they were deemed too much of a fraud risk, and new mothers who had taken time off to have a child in the preceding three years lost out because calculating their maternity leave was thought to be too complex. Yet as they were being told that by Ministers, the real fraudsters were raking it in, with drugs gangs getting payouts, and many of the people who benefited will never be caught.

These most recent examples of the Government’s relaxed attitude to the wasting of public funds are by no means the only cases. Best for Britain’s “scandalous spending tracker” sets out the following examples—I will list just some of them; otherwise, we could be here all afternoon, and I am sure that others want to speak—since the current inhabitant of No. 10 Downing Street came to office. It categorises them in three ways: as “crony contracts”, “duff deals” and “outrageous outgoings”.

Here are a few highlights: £11 million on blue passports; over half a million on chauffeuring Government documents, never mind Government Ministers; £56 million contracting to big consulting firms outside tendering processes; £29 million on the festival of Brexit; £900,000 painting a plane; £900,000 researching a bridge to Ireland, which I could have saved the Government money on, because I did a second-year geography project—at high school, not university—that could have told them it was a ropey idea; £32 million on unusable PPE suits; over £38 million on a test and trace contract that was not fulfilled; £10 billion on a failed test and trace system; over £300 million on expired PPE, and billions more on contracts for friends and family of Ministers and Conservative party donors through the fast-track lane.

All that totalled £25 billion, and all of it at a time when the screw was being tightened on those who have the least, with cuts to universal credit, some getting no money at all, and more effort spent chasing down those who happened to wrongly claim child benefit than those who deliberately defrauded the public purse to the tune of billions.

I find it difficult to understand why the Government are so careless with our money and why they do not want to act on fraud and money laundering. The question “who benefits?” continues to rattle around in my head. While those on the Government Benches do not like the inference that it was them and their chums, I wonder whether the fact that this coincides with the undermining of the Electoral Commission and the relaxing of the rules on overseas donors is any kind of accident. It is not just me; the Centre for American Progress flagged recently:

“Uprooting Kremlin-linked oligarchs will be a challenge given the close ties between Russian money and the United Kingdom’s ruling conservative party, the press, and its real estate and financial industry.”

This should worry us all, but it does not seem to worry those on the Government Benches.

Lord Agnew’s estimate of the total fraud loss across UK Government Departments is £29 billion per year. That could go, as he suggested, to tax cuts or, as we on the SNP Benches would argue for, to investment in public services and increases in social security. Either way, there is a cost to this fraud, and it remains absolutely baffling that this UK Government have continued to let it go on their watch.

[Kevin Hollinrake]

Will the hon. Lady give way?

[Alison Thewliss]

I am just coming to a close, but I am sure that the hon. Gentleman will have a contribution to make later.

The solution is not difficult if the will is there. We have lost too much time and too many opportunities to bring forward measures in different Bills. If we are to have an economic crime plan, it must tackle all these issues; we must not miss another opportunity. If the Government will not act, they should devolve full powers in this area to the Scottish Parliament and let our colleagues in Edinburgh get on with the job. Scotland has no desire to be tarnished yet further by this grubby excuse for a Government.

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[John Glen]

When we designed the schemes, it was clear that we had to put in reasonable measures around the identity of individuals and that we had to allow people to self-report their turnover. The whole conversation with the banks was designed to ensure that that money was available as quickly as possible while not being reckless with those finances. We did it on the basis that, inevitably, there would be a measure of fraud. I am grateful for the measured way in which the hon. Gentleman speaks in the House. I cannot give a specific answer to his question, but that explains the context in which the schemes were designed.

The measures that we put in place were robust and comprehensive. There was no one single point in time where we said, “We’ve got everything right”—I would never stand at this Dispatch Box and say that. Some £2.2 billion of potentially fraudulent bounce back loan applications were blocked through up-front checks and extra fraud checks were introduced in relation to the bounce back scheme at the earliest practical point. The Government categorically do not accept the suggestion, however, that those checks could have been part of the scheme at its launch.

I have spoken to officials on several occasions over the last two years about what more could have been done at the inception of those schemes. The extra checks that we put in place as quickly as we could would have delayed the start of the schemes, which were already delayed because of the circumstances I explained earlier. It would have caused further delay—in some cases, not just weeks but months—and would have led to serious harm for many SMEs at a time of what we all acknowledge was acute crisis.

Subsequently, however, we have given the Insolvency Service and Companies House new powers to prevent rogue company directors from escaping liability for their loans by winding down their businesses. We have invested £4.9 million in the National Investigation Service to probe serious fraud and it has recovered £3.1 million in the last year alone.

[Alison Thewliss]

The Minister has made the point about pursuing rogue company directors. Can he tell me more about how he intends to pursue them if the name given is clearly false or the address is incorrect?

[John Glen]

I pay tribute to the hon. Lady’s work to highlight the inadequacies, which she reflected in her amusing but serious speech about Companies House reform. She knows my view, which I have stated numerous times, including at Treasury questions earlier today, that the reform of Companies House is an urgent priority. That is why, in the last spending review, the Treasury gave an extra just over £60 million to start that process. More needs to be done and legislation will be required to fulfil that process.

I will now address the motion’s claim that the Treasury has written off £4.3 billion in the furlough scheme and other HMRC-delivered covid support schemes, which could not be further from the truth. As the Chancellor has previously said, no, we are not ignoring that money and no, we are definitely not writing it off. We are taking decisive action to recoup it. We have invested more than £100 million in a taxpayer protection taskforce, which has over 1,200 HMRC staff focused on combating fraud. Make no mistake: this is one of the biggest and swiftest responses to a fraud risk ever made by HMRC. In fact, over 13,000 one-to-one inquiries were set up in the last tax year, and already the taskforce has contacted over 75,000 people, some of whom could face criminal prosecutions. Meanwhile, HMRC has already recovered over £500 million through a host of other robust measures, and I know that it will continue to consider every avenue when it comes to recouping money lost through fraud and error.

The motion refers to an NCA investigation. I stress that we have not prevented the NCA from investigating fraud associated with covid-19 support schemes. The NCA has investigated cases of fraud against the schemes and contributed to 13 arrests in relation to bounce back scheme fraud. The Treasury has worked closely with the Home Office on the law enforcement response to fraud, and I agree that the NCA should continue to pursue cases of serious fraud against bounce back loan schemes. As part of the 2020 spending review, the Government committed a further £63 million to the Home Office to tackle economic crime, including fraud.

I now want to address some of the points raised on procurement; the motion talks about public procurement. As my right hon. and learned Friend the Paymaster General said, we take our duty extremely seriously. On personal protective equipment, our focus during the crisis—rightly—was on saving lives and protecting our healthcare workers. However, as has been mentioned today, the pace of this roll-out involved a change in risk appetite, and meant that Treasury Ministers and officials had to make calculated judgments on how to apply that spending control. It was not business as usual. None the less, at all times, the principles set out in “Managing Public Money” continued to apply, DHSC took decisions on the basis of sound advice and all transactions were approved by the Cabinet Office and the DHSC clearance board. We will continue to combat fraud in that area. We will pursue any contracts where there has been a technical failure or other breach, and we will not hesitate to take legal action against suppliers where needed.

I will finish on some of the other aspects included in the motion, starting with defence. As somebody who was a member of the Defence Committee for a couple of years and attended the Royal College of Defence Studies course, I take a great interest in these matters personally. My hon. Friend the Member for Barrow and Furness (Simon Fell) mentioned the complexity of some of the procurements and the evolving scope of individual projects—sometimes, at the inception of these capabilities, their formation is not fully known, so it is a particularly challenging element of Government spending. However, the National Audit Office has noted the progress that we have made so far. The financial settlement of the 2020 spending review is helping the Ministry of Defence to move to a sound financial footing and we are focused on driving improvements that will result in greater value for money.

Equally, we are sharpening our tools to deal with the scourge of economic crime. We are committed to delivering reforms through the economic crime plan and the forthcoming fraud action plan and, thanks to the spending review settlement and private sector contributions, as has been mentioned, we have an additional £400 million to tackle such crime over the next spending review period.

I repeat my thanks to Members across the House for participating today. I have listened very carefully to their remarks and will reflect carefully on them. There can be no doubt that fraud and waste hamper a Government’s efforts to change lives and transform a country for the better. That is why we are focused on combating those threats to our national wellbeing, while working hard at boosting efficiency across every part of Government. We are right to take this action to fulfil that enduring commitment to the economy, to the country and to every citizen.

Question put and agreed to.

Resolved,

That this House agrees with the remarks of Lord Agnew of Oulton in his resignation letter that the Government’s record on tackling fraud is lamentable; recognises the vast amount of taxpayers’ money that has been lost to waste and fraud since the start of the coronavirus pandemic, including the estimated £4.3 billion recently written off from Treasury-backed Covid business support schemes; notes the Government’s unacceptable record of poor procurement over the last decade, including £13 billion wasted on defence projects; further notes the warnings the Chancellor received in 2020 regarding the serious weaknesses allowing for public funds to be diverted to criminal enterprises; calls on the Government to set out a strategy to recover all taxpayers’ money obtained by criminal groups and to fully engage with a thorough National Crime Agency investigation into all issues related to the fraudulent exploitation of the covid-19 support schemes; and further calls on the Chancellor of the Exchequer to make a statement to this House before 31 March 2022 detailing how much taxpayers’ money has been successfully retrieved.

Downing Street Parties: Police Investigation

Alison Thewliss Excerpts

Tuesday 25th January 2022 Commons Chamber

[Giles Watling]

Mr Speaker, at your behest, I withdraw the question.

[Alison Thewliss (Glasgow Central) (SNP)]

One of my constituents, Billie-Jean, got in touch. Billie-Jean was in university accommodation during the pandemic and was fined £100 for having a gathering of 11 people during that time. Billie-Jean says that, while they were being fined and disciplined by the university, the Prime Minister

“was living a lush life of champagne and party nibbles”.

Would the Minister like to apologise to my constituents and everybody else for having done one thing in Downing Street while people in the world outside did quite another?

[Michael Ellis]

Her constituent, in order to have been fined, would either have had to admit wrongdoing or have been found guilty in a court of law on the evidence before that court. The situation is completely different. No such state of affairs exists as far as No. 10 or the Prime Minister is concerned.

Cost of Living Increases

Alison Thewliss Excerpts

Monday 24th January 2022 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

We have heard in this debate heartbreaking stories of constituents who are facing real and enduring hardship; of the choices that people are already making in the face of the poverty that they endure; and of the impact of the cost of living crisis on those we represent. The crisis is the direct result of political choices made by the UK Tory Government and their predecessors over the past decade. Many of our constituents face grinding poverty, whether in or out of work. The Covid Realities report that came out today states:

“Our social security system is currently ill-suited to protect people from poverty”.

That should be the system’s very function.

The Tories have cut the £20-a-week uplift to universal credit and to working tax credits, which made such a difference to low-income families during the pandemic, and shamefully they completely forgot about the 2.5 million people on legacy benefits, including many people with disabilities, who depend on their heating so much more. To make matters worse, we have the upcoming Tory tax on jobs—the national insurance hike, which is coming in April. Laden on top of that, we have Brexit chaos, spiralling fuel prices and inflation seemingly running out of control at a 30-year high.

This is a perfect storm for the poorest in society. Already buffeted by the ill wind of austerity, a growing number of people have no savings, and debt which is becoming increasingly unmanageable. Last week’s Joseph Rowntree Foundation report on poverty in 2022 highlights the two-child limit, which I have fought since 2015 but which remains on the Government’s statute book, driving up child poverty with every passing day; the benefit cap—in Scotland, 67.8% of capped households are single-parent households; the five-week wait for the first universal credit payment; unaffordable debt deductions from benefits; and the freezing of local housing allowance rates since April 2020. All those things have increased the levels of poverty in the UK.

People are increasingly trapped in situations that are not their fault, unable to take on more hours, and unable to change their circumstances. Many of them, as my hon. Friend the Member for Ayr, Carrick and Cumnock (Allan Dorans) mentioned, are WASPI women, whose pension plans were cut short by the Government. I want to pay particular tribute to June Miller, part of the WASPI Glasgow and Lanarkshire group, who was buried today. She was 64 and never saw her pension—shame on this Government.

The impact on those facing the hostile environment is even sharper. Asylum seekers and people with no recourse to public funds are regularly left destitute, dependent on charitable support and help from local churches, gurdwaras and mosques to survive. If we know this, if people out there know this, then Tory ministers must know all this, and it makes it all the more utterly despicable that they have chosen not to act.

Ministers, of course, will talk up the changes to the taper rate, which are welcome, but they only help those lucky enough to be in work. The Office for Budget Responsibility has said that real wages will be lower in 2026 than they were in 2008. What kind of future is that for people in work? Ministers will laud their pretendy living wage, which is not even set at the real living wage rate, and has age discrimination baked in. They will praise food banks, calling them “rather uplifting”, instead of their proliferation being a mark of shame. My former caseworker, Ellenor Hutson, has reflected that food banks were a rarity when she began advice work in 2005. Yet in 2020-21, the Trussell Trust distributed over 2.5 million food parcels across the UK, which is up 128% in the past five years.

[Hannah Bardell]

On food banks, does my hon. Friend agree it is disgusting that there are now more food banks in the UK than McDonald’s restaurants, that almost 25% of folk in the UK are in poverty and that the Office for National Statistics calculated that the richest 10% of households hold 44% of the wealth while the poorest 50% own 9%—all under this Government’s watch?

[Alison Thewliss]

I absolutely agree with my hon. Friend. While we know that those who work in food banks and support them do incredible work, they should not have to.

Away from the realm of boozy lockdown parties at No. 10 and birthday dumps for the Prime Minister while the rest of us were locked down, in the real world, people are experiencing a shocking rise in the price of the most basic necessities, as highlighted so powerfully by Jack Monroe. Average prices do not take into account the distribution of those prices across product lines. Increasing prices and the reduction in what is on offer is far more concentrated at the lower end, the cheaper end, of the food market, disproportionately impacting on those low-income families who depend on them. The reality of inflation is that it is much more than points on a chart to families who are already struggling. For many, it will be the difference between putting food on the table or not.

Energy prices mean that families cannot afford to heat or even light their homes, making them more vulnerable to health issues, particularly those who already experience health conditions and disabilities. Macmillan points out that about one in six people with cancer see their household fuel bills rise because of their diagnosis, with the average cost for those affected reaching £100 a month. The UK Government must act now on energy prices. Instead of a rising price cap, the UK Government must introduce an emergency financial package to support the most vulnerable and help families to cope with this growing Tory cost of living crisis.

The New Economics Foundation found that lone parents, pensioners and families caring for disabled relatives will be hit the hardest by increasing bills, and that the poorest will lose the largest proportion of their incomes to fuel bills. National Energy Action estimates that 6 million—6 million—UK households will be living in fuel poverty by April, a 50% increase from 2021. Resolution Foundation research shows that on average families will be £1,200 worse off in April and that fuel stress will dramatically increase from April due the higher energy price cap. New Joseph Rowntree Foundation analysis also warns that the energy price cap will have a harsher impact on the poorest families, who will spend on average 18% of their income after housing costs on energy bills after April. Minister, people cannot cope with those increases. The Government must act.

The reality is that poverty kills people: quickly and slowly, painfully and miserably. It stunts life chances and its effects endure. It is clearer every day that this UK Government, this Prime Minister, this Chancellor and this Minister in front of us today have the powers to tackle this, but not the will. They have the resources and the wealth, should they choose to use them. We can only conclude by their inaction that they have no interest in ending poverty—none whatsoever. Lord Agnew showed some courage—more courage than anybody on the Government Benches here—by resigning over the fraudulent misuse of bounce back loans: further billions to the amount they have allowed fraudsters to walk out the door with, including £4.3 billion from the covid support schemes alone, while so many were completely excluded from UK Government support. That incompetence is not new. According to Best for Britain, a total of £19.3 billion has been wasted by the Prime Minister since he came to power—all that while the Tories play their political games, shifting the blame for tax rises, filling suitcases full of booze, and ducking questions about lies and parties.

People are freezing and people are starving, not in some Dickensian dystopia but right now, on these islands. Tackling the Tory cost of living crisis is a matter of urgency and lives depend on it. The UK already has the worst levels of poverty of any polity in north-west Europe and the highest levels of in-work poverty this century. Only independence will allow us to recalibrate our economy to support and invest in those who have the least, rather than to reward those who already have the most. I urge all Members with sense and compassion to support our motion today.

Coronavirus Grant Schemes: Fraud

Alison Thewliss Excerpts

Tuesday 18th January 2022 Commons Chamber

[John Glen]

I thank my hon. Friend for the clear point behind his question. We were straining every sinew in the Treasury to get money out as quickly as possible. On 14 April 2020, a Labour party press release stated:

“It is clear that additional action needs to be taken to increase the take-up of the different measures. We have called for urgent action…as take-up is worryingly low.”

That is why we intervened to change the design of the bounce back loan scheme and to make it 100% backed to get the money out quickly—£46 billion to 1.5 million businesses. I am sure that lessons can be learnt from what we have done—absolutely they can—but the principle of getting that money out and designing schemes with HMRC’s excellent input during that period was imperative for the Government.

[Alison Thewliss (Glasgow Central) (SNP)]

It seems, again, that when the going gets tough, the Chancellor goes missing.

HMRC said in its statement that fraud in the covid support schemes is in line with its original planning assumptions, but expecting this eye-watering level of fraud seems almost worse than it happening by accident. We see it also in the bounce back loan schemes. How much of the fraud relates to UK company structures and the related issues at Companies House, which make the UK such a magnet for money laundering?

As well as the Treasury being out of pocket, constituents of mine employed by companies deliberately employing dubious corporate structures did not even receive the furlough payments to which they were fully entitled. What consequences will there be for those companies, and for those people who never received the money that they were due, due to fraud and error? For the many people around these islands who received no support whatsoever—those who were excluded from support schemes—this fraud and error is all the more galling. Will the Minister apologise to them and put that right? Finally, when HMRC is chasing down an estimated 170,000 families who claimed child benefit in error, why is it letting fraudsters and criminals waltz off with £4.3 billion of public money, all of this in the midst of a cost of living crisis? That money should be in the pockets of our constituents, not of criminals.

[John Glen]

I listened very carefully, as I always do, to the hon. Lady. I totally agree that we must not accept any fraud and error as inevitable, and we will continue to bear down on that. From the start we designed the schemes to involve “know your customer” and anti-money laundering checks on application. Measures were put in place by the British Business Bank to detect multiple applications—indeed, there was co-operation among UK Finance members on that. Subsequently, we have developed further interventions involving the National Investigative Service, the Insolvency Service and Companies House data to prevent rogue company directors from escaping liability. We will continue to bear down on the fraud that may have occurred. But initial data on the repayment of bounce back loans shows that in only 2% have borrowers defaulted, and only 7% are behind repayments in any form. There is no complacency in the Government’s approach, and we will continue to look at ways to maximise what we can reclaim where there have been errors and fraud.

Finance (No. 2) Bill (Fifth sitting)

Alison Thewliss Excerpts

Committee stage
Tuesday 11th January 2022 Public Bill Committees

[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 ---

[James Murray]

As we have heard, clause 98 relates to the power to make temporary modifications of taxation of employment income. The clause will grant the Treasury the power to make regulations to modify temporarily parts 3, 4 and 5 of the Income Tax (Earnings and Pensions) Act 2003 under ministerial direction, in the event of a disaster or emergency of national significance. The regulations must set out which disaster or emergency they are made in respect of, and the powers can be exercised only in a way that is wholly relieving to the taxpayer and cannot be used to create a tax charge.

This measure has been introduced in the context of the covid-19 pandemic, and indeed covid has highlighted the limited scope to make changes to the current benefits in kind and expenses rules to respond quickly to the pandemic. We understand that the aim of clause 98 is to enable changes to primary legislation to be made rapidly in response to significant national events. In that respect, we do not oppose this clause, provided that it is applied in strictly exceptional circumstances of national importance.

The clause uses the terms “emergency” and “disaster”, but a specific description of these criteria is missing. I would be grateful if the Minister set out what the Treasury would consider to be an emergency or disaster. Without a doubt, the onset of the covid-19 pandemic was a good example, but without a robust and transparent framework to guide the Treasury—given that the use of the power seems to be at its sole discretion—it is important that we are clear about the circumstances in which income tax liability can effectively be waived. Moreover, clause 98 notes that such measures would be temporary and would not apply longer than necessary. Again, guidance and a framework are conspicuously lacking, as the Government has provided no definition of “temporary”.

Early in the covid pandemic, emergency measures were needed, but as the pandemic has gone on the need for emergency measures has lessened. I would be grateful if the Minister assured us that a clear and transparent framework for establishing what constitutes “emergency”, “disaster” and “temporary” will be published, and when. If not, why not?

I am sure that we agree that this is a matter of effective policy rather than politics. As I have said, the context in which the clause has been introduced is uncontroversial, but I would be grateful if the Minister addressed this ambiguity and assessed whether the measure could be applied in a manner that deviates from its stated intention.

[Alison Thewliss]

I agree very much with what the Labour Front-Bench spokesman has said. Clause 98 is very wide-ranging, and vague in a lot of ways. It is important to understand its scope, because one person’s definition of a disaster or emergency might be quite different from another’s. It is important that we define that slightly more than is the case in the clause, which states that the regulations

“may only specify a disaster or emergency which the Treasury considers to be of national significance.”

That could be a lot of things, depending on how the Treasury considers it.

I wonder whether the Minister, in looking at the clause, has taken into account the findings of the Public Accounts Committee and the National Audit Office on the Government’s lack of financial preparedness, specifically coming into the pandemic. There was a lot of talk about medical preparedness, stockpiling and things like that, but both the National Audit Office and the Public Accounts Committee found that there was no preparedness in the Treasury for a pandemic or national emergency of this type.

It would be useful to know what further work, in addition to clause 98, Treasury officials are putting in place to ensure that, should something like this occur in future, the box of learning from this pandemic can be taken off the shelf and easily applied, without having to make a load of new provisions and regulations, so that things are ready to go, and we do not have to scratch around, trying to figure out what happened last time. Another pandemic may occur in five years or 50 years—we do not know. Certainly, our hope in the SNP is that we will not be here in 50 years, if not five, but it would be useful to know what provisions are being considered in the Treasury to ensure that the learning from this pandemic sits very tightly with this clause and can be applied very easily.

[Lucy Frazer]

I thank hon. Members for their contributions. Both the hon. Member for Ealing North and the hon. Member for Glasgow Central asked us to be more prescriptive in the legislation—to define the circumstances in which there would be a disaster or emergency—but we are bringing in this legislation precisely because we did not have the flexibility that we needed when we went into this pandemic. Therefore we do not want to tightly define the circumstances. We are bringing in this legislation to ensure that we have the tools at our disposal to exercise the necessary powers should an event like the one we have been through and hopefully are at the end of occur.

--- Later in debate ---

The hon. Member for Glasgow Central talked about lack of financial preparedness from the Treasury. The Chancellor’s response to the pandemic has been recognised by a number of international financial institutions as including some of the most effective measures put in place in Europe and across the globe. The measures that the Chancellor has put in place have avoided significant unemployment—when we went into the pandemic we expected 12% unemployment, but it is much less than that. Two million fewer people are unemployed than we originally expected.

[Alison Thewliss]

My point was not about the reaction to the pandemic but preparedness. All the systems had to be put in place suddenly and with little planning. There has been significant fraud in many of the schemes as a result of the lack of tight planning. They were reactive emergency measures. Does the Minister agree that it would have been much better for all those things to have been set out clearly, so they could be taken off the shelf should they be needed? Instead, they were reactive measures that had not been planned ahead of time.

[Lucy Frazer]

The hon. Lady is right to say that a number of measures were reactive, but they were brought it at extremely quick pace and were effective pretty much immediately. She makes a valid point about learning; I know the Treasury is learning and has learned throughout the pandemic. The schemes we put in place at the outset have been refined, including the self-employment income support scheme, the furlough schemes and the coronavirus job retention scheme.

The hon. Lady mentioned the level of fraud; as the pandemic went on and the measures were refined, fraud reduced. She makes a valuable point about learning, and I am sure all Departments are learning. We do not want to be in this position again, which is precisely why we are bringing forward this legislation, to ensure that we are ready for any other emergency that should come our way.

--- Later in debate ---

[The Chair]

We have not quite got there yet. We have some new clauses to consider after these clauses, but thank you very much for those comments.

[Alison Thewliss]

I was also going to thank people, but I am aware that we have new clauses. If you would rather that I waited until we have finished those, Sir Christopher, I will do so. [Interruption.] I am prompted by the hon. Member for Wolverhampton South West to thank Members for their indulgence of the many new clauses and amendments that we have tabled in Committee.

I will also take the opportunity to thank you, Sir Christopher, and the other Chairs for their smooth running of the Committee, and the Clerks for all their expertise and advice—especially Mr Stanton, as was mentioned by the hon. Member for Ealing North. Without the Clerks and their advice, we would have found it very difficult to put all these amendments together, and I thank them very much for that. I will also take the opportunity to thank Scott Taylor and Gus Robertson from our research team. They have now left—I do not think it was the Finance Bill that did it—and I wish them all the very best in their new jobs. I also thank Jonny Kiehlmann from our research team for his assistance, and the Ministers and Opposition Front Benchers for their comments.

A lot of the proposals we have tabled reflect the limitations that we, as the Opposition, face in moving amendments to the Finance Bill. We wish that there were a better process for this—rather than just calling for reports and things of that kind, we would like to be able to make substantial changes to the legislation before us—but that is not the way that things work in this House. It would also have been useful to take evidence from those who sent us written evidence, but I thank all of those who took the time to submit substantial written evidence to this Committee, because it gives us a great deal of assistance in making comments on the Bill. We will now go on to move our new clauses, which I am sure Members are all looking forward to.

Downing Street Garden Event

Alison Thewliss Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

It is not a matter for me. The Prime Minister’s engagements, I believe, are a matter of public record. Those that are routinely released, are a matter of public record; those that are not, are not routinely released. That is the general practice that occurs and has occurred with Prime Ministers from the different parties of the House. I know that the hon. Lady will want to wait for the result of the investigation for a proper answer.

[Alison Thewliss (Glasgow Central) (SNP)]

My constituent Frances called my office this morning, angry and upset that while she was unable to visit her brother with learning disabilities during lockdown, the Prime Minister and his staff were partying it up in the Downing Street garden. Her brother was unable to understand why his family could not visit and he believed that they had died and was in great distress as a result. What has the Paymaster General got to say to Frances and her brother?

[Michael Ellis]

What I say to Frances and her brother, and to the constituents of all hon. Members on both sides of the House who have suffered loss, is that my heart and sympathies go out to them. I deeply regret the personal loss, tragedy, bereavement and distress that has befallen tens of thousands of people in the country. That is what I offer; I hope that it is accepted. All I can do is say that we are all working extremely hard to mitigate the impact of the pandemic and we will continue to do that.

Charter for Budget Responsibility and Welfare Cap

Alison Thewliss Excerpts

Monday 10th January 2022 Commons Chamber

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I begin by echoing the sentiments from Mr Speaker earlier following the death of my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). I knew Jack for many years, from his time as deputy general secretary of what was then the Transport and General Workers’ Union, and later as a colleague and fellow west midlands MP. He was a tough negotiator, always determined and loquacious, but pragmatic enough to reach a deal and stick to it. We are still in shock at Jack’s sudden death on Friday. We will miss him greatly, and my sincere condolences go to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) and their family.

On the motion, the Chancellor announced at the time of the Budget that he would bring this before the House. He made a big thing of it. At the time, we presumed that he would come along and display his credentials for fiscal probity. He probably thought that it was a clever move at the time, but it does not look so clever now. He has not even turned up for tonight’s debate. What happened? Where is he? When he was dishing out money, he was everywhere. We could not move for Instagram videos and pictures of his slippers or sliders, or whatever they are called. Now the crunch is coming, he is nowhere to be seen.

Was the Chancellor worried that if he turned up tonight he would be asked what he will do about the cost of living crisis facing the country? Is he avoiding the House because he has nothing to offer people facing rises in energy bills of hundreds of pounds a year? Why is it that he has done one of his disappearing acts again? He was not here last month when businesses were crying out for support as Christmas bookings were cancelled in their thousands, and he is not here again this month for what he once told us was a central plank of the Treasury’s strategy.

On the rules themselves, during the covid pandemic the Chancellor has had to borrow a great deal of money—approaching £400 billion extra. The pandemic was an emergency situation that required emergency measures. That is true in this country and around the world. Our fiscal rules, published at the time of our conference, take account of such emergency situations, because there is no point in having a set of fiscal rules that work only when times are good. Fiscal rules have to take account of all kinds of economic weather, and ours do exactly that. Crucially, our rules also allow for the investment plan needed for the transition to the lower carbon economy that we will need. The Government’s fiscal rules do neither of those things.

Indeed, when we look at what is happening in the economy right now and what families around the country face in the real world, we have to wonder what the point of this exercise is. Did the Chancellor really think that tabling this motion would take attention away from the fact that he is imposing the highest tax burden on the country for 70 years? The Tories have become a high-tax party because they are a low-growth party. They are asking the British people to stump up the cost of their economic record not for the one or two years of the pandemic but for the past 12 years. Projections from the Bank of England do not look any better, with forecasts for growth of about 1% in 2024. Does the Minister really think that, with this motion, people will not notice or remember that the Prime Minister and the Chancellor have driven a coach and horses through one of their central manifesto promises on tax with the forthcoming rise in national insurance? Is he trying to cover up for the fact that, as families face a cost of living crisis with steep rises in energy bills, he has no plan to help them?

The Minister may not have a plan, but Labour does, and it was set out yesterday by the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves). Our plan would offer every family £200 off bills this year. It would give a further £400 off bills for those with the lowest incomes. It would help the energy-intensive industries on which so many good jobs rely. It would be paid for, in part, by a windfall levy on the companies making the most money out of the huge spike in gas prices. It is fair, it would help the poorest most and it is fully costed. That is what people need right now—not a reheated political stunt thought up by George Osborne a decade ago.

We have to wonder what the conversation was when this was thought to be some great political idea. Did they sit around in the Treasury and say, “We’ve borrowed £400 billion. We’re putting taxes up to levels not seen since the 1950s. We’ve wasted billions on failed programmes and dodgy contracts. But let’s have a parliamentary vote to show that we are really fiscally disciplined”? It will not wash. People are seeing through it.

You do not have to take my word for it. Only today, the head of the National Audit Office drew attention to the level of waste that the Government are presiding over. He wrote that

“many of the interventions carried out by government are either not evaluated robustly or not evaluated at all. This means government…has little information in most policy areas on what difference is made by the billions of pounds being spent.”

He added that only 8% of major Government projects “had robust evaluation plans”. Perhaps that is not surprising when we have seen £3.5 billion-worth of contracts handed out to businesses run by contacts of the Conservative party, and—the Minister and I debated this last Wednesday night—£17 billion in extra costs for the taxpayer, which the Government casually legislated for last Wednesday night to pay for their own mistake in messing up public sector pensions reform.

Where is the Government’s commitment to transparency, value for money or proper procurement practices in their fiscal rules? Did they forget to include those bits? Where is the commitment to tackling the level of fraud that has been exposed in Government lending schemes? Where is the commitment to controlling the Prime Minister’s pet schemes? How much was spent on the Prime Minister’s idea of building a bridge between Scotland and Ireland before the project was abandoned? The Chancellor should have known, because the Prime Minister has got form. He could not even build a garden bridge over the River Thames, let alone a bridge across the Irish sea.

[Alison Thewliss (Glasgow Central) (SNP)]

I am always glad to hear that bridge mentioned, because I did a second-year geography project at high school that could have told the Prime Minister it was a terrible idea. Does the right hon. Gentleman agree that, given that was an infrastructure project for the people of Northern Ireland and Scotland, we should get the money that was committed to it?

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[Alison Thewliss (Glasgow Central) (SNP)]

Let me first extend my condolences to colleagues on the loss of Jack Dromey, and my condolences to his family and friends. I know how much he will be missed, because he was a brilliant Member of this House.

How nice it is to see the Chief Secretary to the Treasury here again in place of the Chancellor! It would seem that when the going gets tough, the Chancellor goes missing, or at least to California. I am not quite sure where he is today, but I am sorry we are not seeing him. Having looked at the reports of previous statements of this kind, I know that it has always been the custom for the Chancellor to make them here. It is disappointing that while he talks big in the Budget, he disappears when it comes to these debates.

No one is denying that the past 18 months have been very trying times, and that, as all Governments around the world have done, the UK Government have spent big to try and get us out of the pandemic with as little scarring as possible. Fiscal policy provided more resilience during the pandemic than we have experienced in recent memory, but as we have seen with the emergence of omicron, and as I have said repeatedly in this place, covid is not done with us yet. We are still facing considerable challenges and a period of uncertainty, so why would the Government want to tie their own hands by setting themselves some new rules?

As we have seen from Westminster Tory Governments in the past, it looks very much as though the reasons for a move back to austerity are ideological rather than economically sound. The right hon. Member for Wokingham (John Redwood) also opposes austerity, although for different reasons. Cutting support too soon poses a big risk to our economy, especially when the UK is facing a 4% expected reduction in GDP owing to Brexit—twice as much as the scarring expected from the covid pandemic.

The OBR has said that the Chancellor has left himself with very little fiscal space. Richard Hughes told the Treasury Committee that

“Just a 1% interest rate rise could easily wipe out the Chancellor’s headroom.”

It is clear from the OBR report that the Chancellor has already missed all four of the existing legislated fiscal targets. It states:

“The fiscal mandate was missed by £274.7 billion (13.1 per cent of GDP).

The supplementary debt target was missed by 12.5 per cent of GDP.

Spending subject to the welfare cap is on course to exceed the legislated cap in 2024- 25 by £7.9 billion and to exceed the cap plus margin by £4.1 billion”—

more than in March 2021—and

“The legislated fiscal objective is on course to be missed by £46.4 billion (1.7 per cent of GDP).”

In the face of all those missed targets, what have the Government done? They have, of course, set themselves a bunch of shiny new targets, on which, interestingly, the OBR has commented:

“In our central forecast, the proposed fiscal mandate and all three supplementary targets are more likely to be met than missed”.

That leads us to wonder whether this is yet more sleight of hand on the part of the UK Government. If they cannot meet the old targets but can meet the new ones, something smells pretty fishy to me.

The targets that the UK Government set themselves are also on a three-year rolling basis. If you were cynical, Madam Deputy Speaker, you could guess that there is a bit of an incentive to game those targets. Richard Hughes of the OBR told the Treasury Committee:

“The risk of having the target for it to fall is that there can be an incentive to get it to rise in the first two years, so you can get it to fall in the third.”

With this UK Government, little would surprise me. The rule to restrict Government investment seems absolutely bizarre. How can the Tories claim that they want to level up, while squeezing spending? That will have an impact on already woeful growth and productivity levels. The UK will lag behind other nations with no real plan to get back out of it, if these rules are to be believed.

Moving to the welfare cap, we can see yet more sheen for the way in which this policy works in the papers than for how it works in practice—talking tough instead of supporting those who need it most—and as with so many things that this Government do, it is all just smoke and mirrors. The OBR points out that the welfare cap

“has been raised at each of the four occasions that it has been substantively reset: twice under Chancellor Philip Hammond (in Autumn Statement 2016 and in Autumn Budget 2017); and twice under Chancellor Rishi Sunak (in Spring Budget 2020 and in this Budget).”

If we look at page 158 of the Red Book, we will see that the UK Government have moved jobseeker’s allowance, the state pension and universal credit payments to jobseekers outside the scope of the welfare cap. Yet again, if the Government do not like the figures, they simply change the rules.

The Government have also said:

“The cap will only be breached if, at the point of formal assessment, spending within scope is forecast to be above the level of the cap and margin for any reason”,

and that if the cap is breached they will nod it through Parliament. Who would vote against that? But it is an entirely false narrative and it does not even meet the needs of those who depend on social security, who should be the real priority.

The UK Tory Government are happy to take money from the poorest families to appease the right wing of their party and to get a cheap headline, and they are happy to do so again now, during the worst cost of living crisis in our lifetime. All this talk of the rules that the UK Government set themselves in order to have the sheen of fiscal responsibility is a million miles away from the reality of life for so many of our constituents right now.

Our constituents are facing a cost of living crisis. According to the Office for National Statistics, two thirds of people have already said that their cost of living has increased in the last month, and polling released by YouGov this morning reveals that 33% of people are worried about their energy bills rising by more than they can afford. There are three main drivers of this crisis: energy price rises, general inflation and tax rises, culminating in the prediction that households are expected to experience the worst rise in living costs in a generation this year.

Paul Johnson, director of the Institute for Fiscal Studies, has said:

“The combination of substantial tax increases and big increases in prices, particularly energy prices, will be a larger shock for households on average earnings than anything at least since the financial crisis and possibly for a long time before that.”

Household electricity bills are likely to increase by more than 50% in April, when the Government’s cap on bills is lifted. Investec suggests that the price cap will rise by 56%, pushing the average bill from £1,277 to around £2,000 a year. That will disproportionately affect those at the bottom end of income distribution, who spend a larger proportion of their income on utilities and food. It will have a much bigger impact on discretionary spending for that group. The Financial Times estimates that

“the rise would reduce family discretionary spending by nearly 7 per cent for the poorest households, almost 4 per cent for people in the middle of the income scale”,

and by only

“2 per cent for the richest.”

Combined with that, the Federation of Small Businesses has pointed out the impact of the increase in energy costs on small and microbusinesses. Those small businesses are not inside the energy cap and may well have to pass the costs they face on to their consumers, again driving up the cost of living. Imagine a small corner shop, where prices are already often more expensive than those at a large chain supermarket—if that shop faces increased fuel bills, where will that cost go? It will go on to the prices at the till for the consumers who depend on that local shop.

In another of Brexit’s great rollbacks, the Prime Minister said in 2016 that one of the great benefits of Brexit would be the UK’s ability to cut VAT on energy bills. Now he says that

“it is a bit of a blunt instrument and you end up cutting fuel bills for people who don’t need the same help.”

Well, many people up and down this country, in all of our constituencies, are crying out for that help while this UK Government stick their fingers in their ears.

Rises in electricity prices will happen alongside planned increases in tax, impacting already squeezed families. The Chancellor is presiding over a £12.7 billion increase in national insurance at a time when incomes are already stretched. That is an average of £400 per employee—a tax on jobs at the very worst possible time—and an increasing number of Tory Back Benchers, as well as the Leader of the House, want the Prime Minister to scrap it. If those on the Treasury Bench will not listen to me, they should at least listen to some of their own.



On top of this, all income tax thresholds and allowances are to be frozen, bringing £1.6 billion into the Treasury coffers. The Chancellor often likes to point out that this affects higher-income taxpayers, and while it is obvious that it will affect them by the greatest absolute amount, as a proportion of income there is no doubt that poorer families will feel the effect of this policy as its eats further into the diminishing disposable income of those who had any money to spare to begin with.

Prices are rising faster now than at any time in the past 10 years. Goldman Sachs estimates a 6.8% rise in prices in April, even if the Government offset the increase in energy bills. The forecast increase in inflation is much larger than the expected increases in earnings and pensions, even factoring in the 6.6% rise in the minimum wage for those on the higher rates. Benefits are to increase in April by 3.1%, but that is a real-terms cut in income for universal credit claimants, even when offset by the most conservative of forecasts of inflation.

This has all the hallmarks of a crisis, and it is a crisis that lies at the doorstep of the Chancellor and of this UK Government. The people of Scotland did not vote for this crisis, this Government and this increased cost of living. They want to see action to protect them at this most difficult time that all of us are facing. Ordinary families are bearing the brunt of the cost of living crisis, while the Prime Minister claims he cannot get by on his £157,000 salary, living in a flat redecorated with Tory donor cash.

The UK has the worst levels of poverty and inequality in north-west Europe. It is clear that action must be taken now or the Tories will push millions more into hardship. Rather than pochling the fiscal rules to get a good headline, the UK Government must bring in an emergency package of support—introducing a low-income energy payment, matching the Scottish child payment across the UK, reversing the £20 a week cut to universal credit, raising the minimum wage for all to a real living wage and raising statutory sick pay to the real living wage level of £9.90 an hour. Rather than a series of meaningless targets that shift whenever it suits the Government, building an economy where citizens can get through the winter without relying on food banks and fuel banks ought to be the true definition of fiscal responsibility in government. SNP Members will be voting against both the motions tonight.

Finance (No. 2) Bill (Third sitting)

Alison Thewliss Excerpts

Committee stage
Wednesday 5th January 2022 Public Bill Committees

In summary, we will not oppose this group of clauses, but I hope that in her reply the Minister will be able to answer the questions that I have set out. In particular, I would be grateful if she could fully address the questions that I have raised in relation to clause 36: specifically whether RP developers would be liable to the RPDT if they either held the units on a piece of land for 10 years as build-to-rent or if they retained a long-term interest as a freeholder landlord.

[Alison Thewliss (Glasgow Central) (SNP)]

A happy new year to you, Dame Angela, and to all colleagues.

I have just a few queries about these clauses. First, I want to touch on the issues relating to exempting registered social landlords. During the consultation, the Scottish Federation of Housing Associations asked the Government to exempt all non-profit housing providers and wholly owned subsidiary companies. It highlighted the social housing sector’s concerns that developers would look to pass on costs where properties are purchased off the shelf, as it were, rather than housing associations doing it themselves, and it was very pleased that it had that exemption as part of the rules that the Government are introducing. That is very welcome, and I am glad that has been the case.

A “registered social landlord” is defined in clause 34(4)(b), and paragraph (c) refers to the Housing (Scotland) Act 2010. Does the Minister intend to keep in touch with the Scottish Government should there be any further changes to Scottish legislation that might be impacted by the Bill? The definition of a registered social landlord in Scotland is slightly different from that in England. An RSL is not allowed to be for-profit in Scotland, and that is very clear in the legislation. I understand that on the English register there are 1,625 providers of registered social housing, 60 of which are classed as for-profit.

Out of curiosity, has the Minister or her colleagues had any discussions with the for-profit organisations? Looking at some of the names, I think that some of the people they seek to provide housing for appear to be reasonably laudable causes—people we would wish to support—even though it is through for-profit social housing. I am curious about what the impact might be on the sector as a result.

On clause 34(5) and the point made by the hon. Member for Ealing North, it is important that a lot of the measures are going to secondary legislation and we will lose sight of any future changes that the Government make to the definitions of non-profit and any other definitions that they seek to make. How does the Minister intend to report that back to the House in a way that allows Members to ensure that there will be no unintended consequences from things that happen once the Bill leaves Committee?

On the definitions of residential property in clause 37 and the exemptions in subsection (2), I was interested to see that student accommodation is a part of this. In many respects I agree with student accommodation being exempted, particularly accommodation run by universities themselves for no profit. Universities looking not to make a profit but simply to make the accommodation pay for itself are very different from the rapacious student accommodation providers that seek deliberately to make profits from students. Some of the fees that they can charge and the developments that they create are sizeable.

There are huge accommodation providers in Glasgow Central. They have a worthy goal in providing accommodation for students, but students have to pay through the nose for it and they are not quite in the same classes of accommodation. What conversations has the Minister had with student accommodation providers, both those working on a non-profit basis and those working on a commercial basis? It is clear that there are implications from cladding on student accommodation. Unite was mentioned in the press as having in its portfolio 22 high-rise buildings that are affected by cladding. I understand that it is meeting the cost of removing the cladding but, as I say, it is a profitable business in many respects. What more can the Government tell me about their conversations on that?

My other points were covered by the hon. Member for Ealing North, but I have one final point about the preparedness of HMRC to implement the significant and complex new tax. My hon. Friend the Member for Gordon mentioned the complexity. When legislation starts to get into equations, we are talking about something that is quite complicated, especially when we look at the detail in the clauses and the schedules that follow them. What preparations is HMRC meant to be making for this? HMRC has had a busy couple of years, given all the things it has had to do as a result of coronavirus. A lot of that was done at pace, with other stuff put to the side, and I wonder whether this might be one thing that was put to the side while HMRC dealt with coronavirus.

It is clear from some of the press coverage of the coronavirus schemes that HMRC did not have the staff to check up on where the money was going, and that it has been trying to claw back some of that money without the staff complement to do that properly and fully. I would like to know from the Minister the size of the team that has been working on this and what more needs to be done to ensure that this goes smoothly in April 2022.

--- Later in debate ---

[Abena Oppong-Asare]

I thank the Minister for her explanation of clause 72; it does seem like a straightforward clause that simply moves the criteria for determining where the risk is located into primary legislation. The Chartered Institute of Taxation has stated that the legislation does meet its stated objectives. For that reason, we do not oppose the clause.

I note that there has been wider consultation on the insurance premium tax, including on how to address the avoidance of the tax and how to reduce the administrative burden on HMRC and the industry. That is particularly important as HMRC has been under a lot of pressure—particularly during the pandemic. In the Government’s response to the consultation on the issue of IPT avoidance, they said that, on reviewing the responses,

“neither of the proposed options provide a proportionate solution to the issue this chapter sought to address. As such, neither option will be taken forward at this time.”

That seems like the Government have given up at the first hurdle. Why, if the proposed measures are not appropriate, are the Government not considering other measures to prevent avoidance in this sector?

[Alison Thewliss]

I do not have any major objections to what is being proposed, but I would be doing the Association of British Insurers a disservice if I let the clause go through without mentioning its concern, which I share, that insurance premium tax is quite a regressive tax. We are about to discuss tobacco duty; the ABI points out, through some research by the Social Market Foundation, that insurance premium tax now raises more revenue than beer and cider duty, wine duty, spirits duty, or betting and gaming duties.

Since 1994, the standard rate of IPT has increased more rapidly than tobacco duty. Those are all things that we want people not to do; we would prefer it if people did not drink as much, smoke as much or gamble as much, so we tax those things. It seems ludicrous to tax people on insurance, which we would like people to have and which benefits them and society, so I ask the Minister to consider further whether insurance premium tax is something sensible that we want to keep doing.

[Lucy Frazer]

I am grateful to the hon. Member for Glasgow Central for her broader points about the subject matter. I do not think she raised a particular point in relation to the clause under consideration, but this is an area that, like others, we will keep under review. I undertake to get back to the hon. Member for Erith and Thamesmead in writing on the specific point that she raised in relation to the consultation.

Question put and agreed to.

Clause 72 accordingly ordered to stand part of the Bill.

Clause 73

Transitioned trade remedies: decisions by Secretary of State

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

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[Abena Oppong-Asare]

I thank the Minister for her explanation of the clause, which introduces technical amendments to the changes introduced to restrict the entitlement to use rebated fuel, more commonly known as red diesel. We discussed the substance of that change in Committee on the last Finance Bill. As I said then, we support the intention behind the Government’s measure. There is a clear need to ensure that fuel duty rebates are as limited as possible in order to meet our net zero commitment.

The amendments made by this Bill are technical in nature, and we do not oppose them. However, will the Minister set out which, if any, industries will be affected by the changes and what work is being done to ensure that they are prepared, given that we are now only a few months from the introduction of the changes? Will she also update us on preparations by Her Majesty’s Revenue and Customs and other agencies for the changes? Is she confident that the Government will be able to ensure compliance from April this year? The Minister’s colleague, the Financial Secretary to the Treasury, mentioned that there has been some restructuring around HMRC, but I echo the earlier comments by the hon. Member for Glasgow Central and my hon. Friend the Member for Ealing North, who explained that HMRC has been busy for a number of years. Will the Minister update us on what work has been done to ensure that we are prepared for this change?

[Alison Thewliss]

I am glad that the definitions are being amended to include fairs and circuses, of which there are many in my constituency, to allow them to continue to use rebated diesel and biofuels after 1 April 2022. In that industry it is quite difficult to adapt machines to use other sources. The showpeople I represent will be pleased that the Government have listened on this measure, and I thank the Minister for that.

[Helen Whately]

I welcome the support that the hon. Member for Erith and Thamesmead expressed for the intention behind this measure and her recognition that the changes are of a technical nature and that the Opposition therefore will not oppose the clause. I assure her that there has been substantial consultation on the overall policy. Indeed, as the hon. Member for Glasgow Central said, the Government have listened, and that is reflected in some of the changes. I am confident in HMRC’s ability to monitor compliance.

Question put and agreed to.

Clause 75 accordingly ordered to stand part of the Bill.

Schedule 10 agreed to.

Clause 76

Rates of tobacco products duty

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