(1 week ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Dillon
The hierarchy of vulnerability introduced in 2022 is important in establishing who are the most vulnerable on our roads, but the highway code could go further and say “must” go at 10 mph rather than “should”.
Last September, I introduced the Road Traffic (Horse and Rider Safety) Bill. Through that presentation Bill, I called on the Government to strengthen the highway code guidance for passing horses and to improve driver education so that motorists better understand horses’ behaviour and the potentially devastating consequences of their actions. Those changes would raise awareness among all road users and provide greater safety and reassurance when horses are ridden or are pulling horse-drawn vehicles or carriages.
As I have mentioned, last week the Government published the road safety strategy. Although I welcome many of its measures, it missed some relatively straightforward opportunities to better protect horses and riders. The strategy announced that the Ministry of Justice
“will consult on a new victims’ code.”
I welcome that, but it raises an important issue. Under current law, horses are classed as personal property, which means that when one is killed or fatally injured in a road traffic collision, compensation is largely limited to financial loss.
I have recently been contacted by Cathryn from Leeds, a long-standing horse rider and a solicitor who supports people who have suffered serious injuries from horse accidents. She highlights the psychological trauma experienced by injured riders as a recurring theme, which is often compounded by guilt, grief and gratitude that the horse took the main impact and saved the rider from even greater harm. The current legal framework significantly restricts recognition of that emotional distress. I urge the Government to use the consultation on the new victims’ code to consider how horse riders and owners who lose horses can be properly recognised in that framework.
Andrew George (St Ives) (LD)
As my hon. Friend knows, I strongly support his proposed legislation; indeed, I am a sponsor of it. Does he agree that, in order to advance new regulations, the Government need to review whether there is sufficient bridleway capacity across the countryside to avoid the necessity of using roads? It is clear that there are insufficient bridleways across much of the countryside, which is why riders end up having to use the roads to traverse.
Mr Dillon
My hon. Friend makes an excellent point. Councils are responsible for maintaining bridleways, but unfortunately their funding has been cut over numerous years and they do not have the money to do so. That forces more riders to use the roads because other routes are not available. Indeed, I was contacted this morning by a lady who said that they do not have any bridleways where she rides, only pavements, so she always has to be on the carriageway. She asked whether we would consider allowing horses to use public pavements in that instance.
(2 weeks ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Andrew George (St Ives) (LD)
It is a pleasure to serve under you, Ms Furniss. I congratulate my hon. Friend the Member for North Devon (Ian Roome) on securing this debate and making a very strong case, of which I hope the Minister will take heed.
I will return to some of the prehistory, because I have campaigned on this issue for so long. I congratulate my hon. Friends the Members for North Cornwall (Ben Maguire) and for Honiton and Sidmouth (Richard Foord), and the hon. Members for Strangford (Jim Shannon) and for Na h-Eileanan an Iar (Torcuil Crichton), for reinforcing the very strong points advanced by my hon. Friend the Member for North Devon in his opening remarks.
My hon. Friend the Member for Newton Abbot (Martin Wrigley) made an interesting intervention about useful pump comparison apps and sites. One of the places that was originally designated to receive rural fuel duty relief was the Isles of Scilly in my constituency, and I campaigned for it at the time. When the relief was announced in March 2012, it was very welcome. However, I am afraid that having comparison apps on the Isles of Scilly is pretty meaningless because there is only one pump and no competition. I do not think it can be argued that the monopoly supplier is taking advantage of that monopoly, because it is very much keyed into the community and has been running it as a public service.
When the relief scheme was originally established, I asked the supplier, Ian Sibley of Sibley’s, which provides fuel for road use as well as for marine use on the Isles of Scilly, how he obtained his fuel. He basically takes tanks over to the supermarket in Penzance and has them ferried back, so he is buying fuel at retail prices and selling it on. We can see that it is and has been impossible for him and his business to be in any way competitive in those circumstances, and he has had to transfer the fuel to local people on the islands without taking much of a cut to cover the costs of freight and providing the service. We can see how difficult it is to provide this service in such locations.
It is also worth reflecting on the justification for the relief, because it is all about equity and fairness. I know that some people will say, “Hang on, are you not campaigning to combat climate change?” Indeed I am, as are others present here today. Those same people may ask if it does not contradict everything we are campaigning for when we say that we want to reduce fuel costs. It is not.
This is about geographic equity across the country. It is about wanting to make sure that in addressing the cost of living crisis, which has been going on for many years, we also address the geographic inequity in the prices that end up being charged in such remote and rural locations. It is not relevant to undermine the case in any way by comparing it with the vital campaign to combat climate change.
To go into the prehistory of it, on 8 January 2002 and 15 January 2003, I brought debates to the Westminster Hall Chamber on the issue of rural and island transport. Indeed, my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) and Alan Reid from the Scottish islands made a very strong case for the importance of seeking equity in this regard, not only in terms of fuel duty but in relation to private car users and to community bus users and projects.
After that campaigning, I was pleased that the coalition Government agreed with the Liberal Democrat policy of investigating, as they put it, measures to help with fuel costs in remote rural areas, starting with pilot schemes. Indeed, in October 2010, they announced a 5p fuel duty discount for Scottish islands and the Isles of Scilly. In those days, that of course required EU approval—even post Brexit, any kind of parafiscal support or state-aid issue still requires some consideration and regulation, because it needs to meet competition rules.
Obviously, the case for the discount was made—the unfairness was acknowledged—and in March 2012, it was brought in. The pilot schemes were established, including on the Isles of Scilly as I mentioned. In October 2013, the project was, as promised, reviewed and it was identified to be working well, so the Government announced that they were going to expand the schemes to 17 additional rural areas in May 2015. I raised a petition to make west Cornwall one of those areas. It got 2,500 signatures, and I presented it to Parliament in December 2013, but unfortunately the Government did not agree to do that in August 2014, which was a pity. I do hope the Government will look at an extension.
There is still a cost difference between the Isles of Scilly and the mainland in excess of 30p per litre. It is a very difficult administrative scheme to follow through. It does create some administrative pressures on the small businesses that operate it, but I hope the Minister will accept the request to review both the amount of the discount and the geography on the basis of evidence of need.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
It is a pleasure to speak under your chairship, Ms Furniss. I am grateful to the hon. Member for North Devon (Ian Roome) for securing this debate and speaking so passionately in support of rural communities and the people in his constituency, who I know he has much honour in representing. I thank him for securing the debate and giving Members on both sides of the House the chance to contribute on this very important topic.
This Government recognise the importance of rural areas for the UK economy, and will continue to consider how they can best support those who live and work rurally. Although my Barnet constituency, which is in the very north of London, lacks the beaches and moors of the hon. Gentleman’s, it does contain 14 farms and have some rural areas, because of the large bit of green belt that extends into north London. Like all Ministers, I am fully committed to ensuring that the tax system works for everyone, whether they are in rural or more urban parts of the country.
Fuel duty is an important source of Government revenue and provides vital funding for public services and infrastructure. It raised £24.4 billion in 2024-25; as has been mentioned, fuel duty rates have been frozen since 2011, with a further, temporary 5p cut introduced in 2022. Fuel duty rates are therefore now, in real terms, about 40% lower than they were in 2011. Pump prices are at their lowest level since 2021, before Russia’s illegal invasion of Ukraine led to soaring prices and the introduction of the temporary 5p cut.
At the Budget, therefore, the Chancellor announced that the 5p cut would first be extended until the end of August, with rates then rising gradually, returning to March 2022 levels by March 2027. As well as that extension to the freeze, the planned increase in line with inflation for the coming financial year will not take place. Those decisions on fuel duty will save the average car driver across the country £49 in the coming financial year, compared with previous plans.
The Government also recognise the importance of competition between retailers in the road fuels market. Liberal Democrat Members, including the hon. Members for North Cornwall (Ben Maguire) and for Newton Abbot (Martin Wrigley) and others, mentioned a pumpwatch scheme. Sadly, that reveals that we need to communicate even better about some of the ideas put forward by Government: at the Budget, the Chancellor confirmed that from spring 2026, UK consumers will be able to compare prices more easily through the Government’s new open-data fuel finder scheme, which I believe will achieve aims similar to those of the pumpwatch proposal. It will help to encourage competitive pricing among retailers and is expected to result in further savings for drivers of potentially up to £40 a year.
The Government, however, are well aware that fuel costs can be higher in certain more remote areas, so the rural fuel duty relief scheme provides a 5p per litre reduction to benefit motorists buying fuel in those areas. The areas included in the scheme demonstrate certain characteristics, such as pump prices being much higher than the UK average, remoteness leading to high fuel transport costs from refinery to filling station, and relatively low sales meaning that retailers cannot benefit from bulk discounts.
As mentioned by many Members, the scheme provides about £5 million in support per year, with about 165 fuel retailers registered with His Majesty’s Revenue and Customs to claim the relief. The hon. Member for St Ives (Andrew George) mentioned the administrative costs, and I am interested to hear more from him and from any businesses that have ideas about how I, as Minister with responsibility for HMRC, can seek to reduce any of the administrative burdens that those 165 retailers may face.
One area included in the scheme is the EX35 postcode, which is part of Exmoor national park and in the constituency of the hon. Member for North Devon, who secured the debate. I confirm that the scheme in fact covers not just 11 or 12 constituencies, but 16—some of the postcodes sneakily cross over constituency boundaries, so that 16 Members of the House of Commons represent constituencies of which at least some elements are covered by the relief.
Andrew George
The Minister raised the issue of the administrative burden. I was referring to an occasion when an operator of the scheme was late in his submission to HMRC, in which case he was refused the rebate, which he had been taking. In such circumstances, he had to appeal. I was simply demonstrating the rigidity and lack of humour, as it were, in the system. We are talking about extremely small businesses that find the additional administrative burden quite onerous.
Dan Tomlinson
I note, as I am sure others in the Chamber will, just how forensic is the hon. Member’s understanding of some of the small businesses in his constituency. That is to be very much commended. If he would like to write to me on that point, I would certainly like to raise it with HMRC. Of course, it is not appropriate for me as a tax Minister to get involved in individual tax affairs. That said, the general point is about administration, and the extent to which we are getting the balance right between ensuring that we stick to the rules as set out, and having an appropriate level of flexibility. That is something that I would happily raise with the Department, if he were willing to write to me.
The hon. Member for North Devon and many others have suggested that the Government should increase the rural fuel duty relief in line with inflation. As I set out earlier, since the relief’s introduction, it has remained at 5p, but the main fuel duty rate has also remained at the same level—or, more recently, has fallen. I am aware that there are differences across the country, and there may have been differentials in the increase in fuel prices in some areas. However, the fuel costs are broadly the same as they were in 2011, if not slightly higher; it was roughly 130p for a litre then, compared with around 135p now.
Dan Tomlinson
I will happily do so, although I am sure that hon. Members would like me to make some progress, too.
Andrew George
On the question of geographical coverage, and given the Minister’s comment that he has not received representations about further areas for inclusion, I urge the Government to review the scheme and to take an objective measure themselves of where else it might extend to, rather than inviting us to form an orderly queue in pleading for our own areas, which could result in a system based not on need, but on political advantage.
Dan Tomlinson
I am always glad to take interventions. The hon. Member’s point is noted and I acknowledge his request. I ask Members to get in touch if they believe that an area meets the criteria. As the hon. Member has noted, there are not hard and fast rules here—there are not specific criteria within each of the categories that are considered in the round—and the Government do not intend to change to having hard and fast rules. I would be worried that that might lead to more complexity and change within the system, meaning that if one area’s prices tipped slightly above or below, we might get into contestation of whether the additional costs of transporting fuel to certain places tips over or above the threshold. I hope that Members who have views on where relief should be extended to will bear with the current, less-rigid process.
I was going to say, in a slightly light-hearted way, that the hon. Member for Witney (Charlie Maynard) suffers somewhat in tax policy debates, in that I know his constituency well, having been born and brought up in west Oxfordshire. As part of my joyful travelling to and from seeing my family there, I often fill up in his constituency, which is often cheaper than doing so in north London. I noted that the hon. Member was magnanimous in calling for the scheme to be extended not to west Oxfordshire, but instead to other areas represented by his Liberal Democrat colleagues.
I should mention the important speech made by my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton)—he will have to teach me how to pronounce his constituency, as that was the first time I have said it. His is one of the constituencies that does benefit from the relief. I am glad to hear Labour Members talking clearly about the benefits that the relief provides for constituents in some of the most rural parts of the whole country.
Again, I commend the hon. Member for St Ives for his engagement with businesses. We heard about the garage on the Isles of Scilly and how it gets petrol to and from. I think I have covered most of the points raised. If Members have a burning desire to ask me to clarify something, I will, but I am sure we all want to make some progress.
Let me make a couple of further points before I conclude. The fuel duty system supports rural areas in other ways as well. Households and non-commercial premises are entitled to use red diesel for heating and electricity generation, which includes off-grid homes in remote and rural locations that have limited alternatives. Red diesel is subject to fuel duty, which is 10.18p per litre compared with the 52.95p for diesel used on roads. Farmers also retain the entitlement to use red diesel in machinery and vehicles used for agricultural purposes after that was withdrawn from most sectors under the previous Government in 2022.
Several Members discussed the need to ensure that public transport maintains a level of affordability. At the end of the last year, the Government confirmed a long-term investment of over £3 billion over the next three years to support local leaders and bus operators across the country to improve bus services for millions of passengers. That includes multi-year allocations for local authorities under the local authority bus grant. From 2026-27, we have revised the formula to include a rurality element for the first time to ensure that the additional challenges of running bus services in rural areas are taken into account.
I was surprised that there was no mention of potholes in a debate about transport, but I know that they are of particular concern to those in rural areas that are more prone to frost, meaning that ice gets inside the tarmac and the road breaks up. By 2029-30, the Government will have committed more than £2 billion annually for local authorities to repair, renew and fix potholes on their roads. That doubling of funding since we took office will mean that we can exceed our manifesto commitment to fix an additional 1 million potholes a year by the end of this Parliament.
The Opposition spokesperson mentioned the electric vehicle decision that the Government announced at the Budget. We remain fully committed to the electric vehicle transition, which will drive growth and help the country to meet its climate change objectives. Our public charging network is growing rapidly. We had more than 87,000 public charge points as of December last year, and, in the year ending 1 October 2025, the number of charging devices in rural areas had increased by 26%. In addition, the Government announced at Budget 2025 the immediate roll-out of a package of support worth £3.6 billion to help motorists to switch to cleaner and greener cars, to support the automotive sector through the transition to EVs, and to bolster British industry.
The Government are dedicated to supporting and promoting rural areas, particularly by providing support for transport costs, such as through the rural fuel duty relief scheme. I very much look forward to further discussions—perhaps even further correspondence—over the course of the Parliament about how we can continue to do that. I thank the hon. Member for North Devon for securing the debate and all Members in the Chamber for their contributions.
(6 months, 2 weeks ago)
Commons Chamber
Joe Powell (Kensington and Bayswater) (Lab)
Andrew George (St Ives) (LD)
The year before we came to power, the tax gap stood at £47 billion. That is unacceptable, which is why we announced the most ambitious-ever package of tax gap measures in the Budget, and went even further in the spring statement. We are now forecast to raise £7.5 billion from the tax gap in 2029-30, including by recruiting 5,500 more compliance officers, investing in better technology and closing loopholes. We will bring forward further measures to close the tax gap in the autumn Budget.
My hon. Friend is a powerful campaigner and advocate for tackling those who do not play by the rules. While I am unable to comment on individual taxpayer affairs because of my position, I very much recognise the issue. We are determined to tackle this problem, and HMRC is working across Government on enforcement action, including work with Companies House and the Insolvency Service to tackle phoenixism.
Andrew George
Does the Minister agree that instead of handing £500 million of taxpayers’ money to those who are entitled to small business rate relief, which is what has happened in Cornwall over the past 10 years, it would be far better to invest that money in desperately needed first homes for local families in desperate housing need, rather than give it to second home owners? Would he be prepared to meet me, so that we can establish a better method of achieving housing justice through tax policy?
I am happy to hear from the hon. Gentleman about how he will support our home-building plans in his constituency and across the country. We know that the most important thing to tackle the housing crisis is to support the reforms that this Government are making to the planning system to make sure we can build 1.5 million new homes and invest £39 billion in our 10-year affordable homes programme—the biggest in a generation.
(9 months, 1 week ago)
Commons ChamberThe hon. Gentleman is jumping the gun somewhat. We delivered the spring statement just two weeks ago, in which we were able to restore the fiscal headroom after the change in global bond yields. We will set out the Budget in the autumn, moving to one fiscal event a year, which is very different from the multiple Budgets we had from the previous Government. We have set the spending totals for the spending review and we will be setting out the departmental allocations on 11 June.
Andrew George (St Ives) (LD)
While short-term lets and second homes can benefit the tourist economy, we recognise that they can impact the availability and affordability of main homes in some communities. That is why we have enabled councils to charge a premium of up to 100% on the council tax bills of second homes, increased the higher rates of stamp duty land tax on the purchase of second homes and abolished the furnished holiday lets tax regime.
Andrew George
I am grateful to the Minister for that response, but I believe we can go further, because this is not about the politics of envy but about the politics of social justice. In Cornwall, it cannot be right that through the small business rate relief system, over £500 million of taxpayers’ money has gone into the pockets of holiday homeowners in the last 10 years. Many of those homeowners have flipped their second homes into the small business rating system to take advantage of that loophole. Will the Minister meet me so that we can find a more equitable way of spending public money that goes into first homes rather than second homes?
I thank the hon. Gentleman for his remarks. I agree with him about the importance of taking the right action to tackle second homes. I understand he had a meeting with the Minister for Housing and Planning last week, and I would be happy to follow up any items that arose from that. Our plan to build more homes includes 4,500 new homes in every year in Cornwall, and I hope he will support those building plans too.
(11 months, 1 week ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sam Rushworth
I welcome that intervention. There are two areas in particular on which I think farmers in my constituency would like some answers. One is thresholds. Because the policy still keeps the 50% agricultural property relief, it does not actually close a tax loophole at all for the very wealthiest. My constituents would like to see the modelling from the Treasury that says that it would. Meanwhile, because the threshold is quite low, it means that sadly some of the family farms in my constituency will really struggle to pay their inheritance tax bill. They would like to see what modelling has been done around the thresholds; they are not asking for a U-turn, because they understand that it should be neutral for the Treasury, but they would be interested to know whether we could lift the threshold but go to 40% tax at another threshold. Would that better protect the small family farms and do a better job of closing the tax loophole at the same time?
Another point on which my constituents would welcome some consideration is the proposal for a clawback. Someone who inherits a £5 million farm is not a millionaire; they are the custodian of agricultural land, with a responsibility to farm it to produce food for the nation. If they sell a £5 million farm they become a millionaire, but they do not become one simply by inheriting it. Farmers in my constituency would be interested to look at the proposal, and it would be helpful for them to understand the modelling that the Treasury has done. Among that Labour farming community, there is good will for this Government on many things we are trying to achieve. That good will can be retained. There would be no shame in looking at this again.
Andrew George (St Ives) (LD)
The hon. Gentleman is making a very thoughtful contribution. He is clearly looking at ways in which the policy can be amended to make it more palatable to the farming community. That may be the reality that we are looking at, rather than getting rid of it altogether. Does he therefore agree that we should look at changing the transitional arrangements so that succession planning can be properly undertaken, which at present it clearly cannot, or indeed that we should look at leaseback arrangements to enable viable farms to continue?
Sam Rushworth
There are a variety of things that could be looked at. I met the NFU this morning and we discussed various points. I feel that these are all things that should be considered. I reiterate that I believe that the community I represent still has good will toward this Government and the intentions of this Government, but there are aspects of the policy that could be tweaked to better achieve their intentions.
(1 year, 1 month ago)
Commons ChamberLet me remind the hon. Gentleman that, around the difficult decision that we had to take on employer national insurance contributions, we provided explicit protection for small businesses by more than doubling the employment allowance from £5,000 to £10,500, which will benefit hundreds of thousands of small businesses across the country. I suggest that he talks to businesses in his constituency about that.
We are not shying away from the fact that difficult decisions were taken in the Budget, but he might also consult the plans that were left in operation by the previous Government in July. If we had pursued those plans, and if we had not taken any action on business rates, the retail, hospitality and leisure relief would have ended entirely next April. The cliff edge looming next April would have seen it go down to zero. We have extended it, despite the tough fiscal circumstances, for another year at 40%. That is a reasonable way forward while we put in place these permanent reforms.
As I mentioned, the measures in the Bill to level the playing field for high streets are the beginning of our efforts to transform the system of business rates. Our ambition to go further is set out in the paper published alongside the Budget, “Transforming business rates”. That paper sets out the Government’s priority areas for further reform to support investment and make the system fairer. It invites businesses and industry representatives to work with us on designing the best possible system for the future.
I am grateful to all those businesses and representative bodies that I have spoken with in the last few weeks for their engagement already. We will consider what more the Government should do to incentivise investment and growth, including by looking at the efficacy of improvement relief and empty property relief, the impact of losing small business rate relief on expanding businesses, and the cliff edges within the current system.
Andrew George (St Ives) (LD)
If the Minister is looking for other methods by which public finances could be effectively deployed, will he look carefully at the last decade, during which small business rate relief has been used by second home owners to flip their properties to business rating and pay nothing at all? In Cornwall alone, that has resulted in over £500 million of taxpayers’ money being paid out to wealthy second home owners through covid aid and the small business rate relief. Will he look at how wealthy people have been incentivised to use that method to their advantage? Will he ensure that we have a much fairer system that puts first homes before second homes?
The hon. Gentleman raises a crucial point about ensuring that the tax system is fair and that it supports the behaviour that we seek to incentivise.
That leads me neatly to my next point. As part of the discussion paper on transforming business rates, we have committed to consulting on adopting a general anti-avoidance rule for business rates in England. Although that might not necessarily address the exact problem the hon. Gentleman highlights, it speaks to the general issue of avoidance in relation to business rates.
We will also look at how the burden adjusts with the economic cycle, and we will assess the merit of a further increase in the frequency of re-evaluations. I look forward to working closely with businesses and representative organisations to deliver a business rates system that is fit for the 21st century, and that work begins today with the powers in this Bill to deliver our permanent tax cut for high streets.
As I said earlier, the tough decisions that the Chancellor set out in the Budget to deliver economic stability and fix the public finances enable us to give businesses the confidence they need to invest, and to get public services back on their feet. One public service that is crucial to breaking down barriers to opportunity is the education system, which is why the Government have prioritised ensuring that every child has access to the high-quality education that they deserve.
The Great British high street is on life support. Many bricks-and-mortar businesses are barely surviving and, where they are, it is often against the odds. Changes in our trading relationship with Europe, the covid-19 pandemic, energy prices, the cost of living and the Conservatives’ disastrous mini-Budget have all taken their toll, but for years one measure has stifled high street businesses more than any other: the broken business rates system.
The business rates system is unfair on companies, bad for our local communities and damaging to our national economy. It penalises manufacturers when they invest to become more productive and energy-efficient. It leaves pubs and restaurants with disproportionately high tax bills and it puts bricks-and-mortar shops at an unfair disadvantage compared with online retail giants. In too many places pubs, restaurants and shops are being forced to close, taking with them jobs, opportunities and treasured community spaces, and consumers are seeing the cost of this unfair tax passed on to them.
More broadly, this outdated system inhibits business investment, job creation and economic growth, holding back our national economy, yet for too long it has been allowed to continue. In their 2019 manifesto, the previous Conservative Government promised a fundamental review of business rates to ease the tax burden on smaller businesses. Yet in 2022, when I challenged the then Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), on his personal commitment to making that happen, he admitted in this place that it was
“Another of the promises I now vainly wish I had not made”.—[Official Report, 17 October 2022; Vol. 720, c. 430.]
Businesses are tired of being treated with such cynicism and of relying on a patchwork of last-minute temporary reliefs. They cannot plan, they cannot invest and they cannot grow. They are crying out for fundamental reform and a new, fairer system. Before this autumn Budget, Liberal Democrats called on the Chancellor to reform business rates completely, with a new system, and to do so no later than April 2026. We believe the new system should be based on our Liberal Democrat calls for a commercial landowner levy—a bold move that would deliver a real shot in the arm for our high streets.
Instead of pursuing fundamental reform, instead of fair reform, this Bill is just more tinkering. Rates relief has been a sticking plaster—but, boy, is that plaster being ripped off in April, with a big reduction in relief. Many small businesses now say that the increase in business rates, combined with the increase in national insurance contributions, will be too much for them to absorb.
Andrew George
My hon. Friend is making an excellent case. Along with the point I made in my previous intervention about the opportunity for abuse under the rates relief system, particularly by holiday homes, does she accept that the methodology used by the current rating system for parking spaces in out-of-town retail outlets such as supermarkets hands a massive advantage to those supermarkets in comparison with town centre shops, and that we need a rating system that actually levies a rate on that benefit at a level that ensures an even playing field?
My hon. Friend is absolutely right that this broken business rates system is unfair in many ways and it is the big giants, online or otherwise, that are getting an easier ride.
The Bill fails to address many other problems with business rates. For example, it does nothing to support businesses outside the three sectors of retail, hospitality and leisure, meaning it excludes key sectors such as manufacturing that are particularly negatively affected by the current system. It does not address the £51,000 cliff edge. Properties with a value over that threshold are not eligible for the small business multiplier, even though they are small businesses, and with rates relief going down, business rates bills for small businesses will go up. From next April, business rates relief for retail, hospitality and leisure will be cut from 75% to 40% and this Bill does nothing to avert that blow.
The Minister said he wants to rebalance business rates. I welcome that direction of travel, if it turns out to be true, but in the absence of an impact assessment, I am particularly worried about unintended consequences. I say this in the spirit of constructive opposition: it appears as though the Government are moving from a system of temporary relief to a lower multiplier. At the moment, a small business enjoys 75% business rates relief, but a very large chain has its relief capped at £100,000. If I have understood it correctly, independent shops will see their relief drop from 75% to 40%, while big chains such as pubcos and supermarkets may see their relief uncapped, which could give them a tax reduction of tens of millions of pounds. I would be grateful if the Minister wrote to me to share some modelling to reassure me that that is not going to happen and that we will not see independent businesses inadvertently subsidising big chain stores and multinationals.
The impact of the Government’s changes to business rates will have a massive effect on small businesses in my constituency. The oldest pub in Britain—or so they claim—Ye Olde Fighting Cocks, will see a whopping increase of £30,000 per year in its business rates alone. The Save St Albans Pubs campaign says that even an average pub in St Albans, with a rateable value of £100,000, will face an additional £19,000 in its business rates bill from April. If we assume that an average pub makes 30p profit per pint, each of those pubs would need to sell an extra 60,000 pints a year, or almost 1,200 pints extra a week—and that is before factoring in the increase in national insurance contributions.
Other low-margin, large-premises businesses, such as children’s soft play activity centres, will also lose out under these changes. DJ’s Play runs much-loved indoor play centres across Hertfordshire, which exist in large warehouse-style premises. The buildings are large, but the profit margins are not. DJ’s Play and many others like it provide a valuable and enriching educational experience for children, but they too will struggle to keep their heads above water.
The Liberal Democrats are also opposed to the Bill because it would levy a tax on education by removing the business rates exemption for private schools that are charities. We are opposed in principle to the taxation of education, because it is a public good. We believe that parents must be given choice when it comes to their children’s education. Many families feel that, whether due to bullying, SEND provision, mental health issues or other factors, the state system cannot meet their child’s needs.
(1 year, 4 months ago)
Commons ChamberI thank my hon. Friend for her follow-up question and welcome her to her place. As she knows from the Chancellor and the Deputy Prime Minister, this Government take seriously our target to deliver 1.5 million new homes, and we will look at each and every opportunity across the country to do so. That includes making improvements to the system of developer contributions for community benefit to support the delivery of affordable housing and local infrastructure.
Andrew George (St Ives) (LD)
The Minister knows that the planning system is built on the ability to make millionaires at the stroke of a pen as a result of passing planning permission, which does not necessarily result in developments that are in the best interests of a local community. Surely there is more that the Government can do to ensure that we tip the planning system towards meeting need, rather than greed.
The issue of so-called hope value was referenced in the Labour party’s manifesto, and the Government will set out further detail in due course.
(1 year, 5 months ago)
Commons ChamberI enjoyed campaigning for my hon. Friend in York Outer, and it is great to see him in his place today. Stability means a tough set of fiscal rules, but it also means spending public money wisely, as he says. The last Government hiked taxes while allowing waste and inefficiency to spiral out of control. At no time was that more evident than during the pandemic, especially when it came to personal protective equipment. The former Prime Minister, when he was Chancellor, signed cheque after cheque after cheque for billions of pounds-worth of contracts that did not deliver for the NHS when it needed it—that is simply unacceptable.
Today, I can announce that I am beginning the process of appointing a covid corruption commissioner to get back what is owed to the British people. That money, which is today in the hands of fraudsters, belongs in our public services, and we want it back. The commissioner will report to me, working with the Secretary of State for Health and Social Care, and their report will be presented to Parliament for all Members to see. I will not tolerate waste. I will treat taxpayers’ money with respect and return stability to our public finances.
The second Bill I will speak to is the national wealth fund Bill. We know that economic stability is vital for investors and for business—the small business looking to grow; the global business looking to expand in the UK; the entrepreneur looking to take their first steps. To support them, stability must sit alongside investment.
Andrew George (St Ives) (LD)
On the effective use of public funds, is the Chancellor aware not only of the alleged corruption in the way that covid aid was distributed, but of the large number of tax loopholes in this economy? For example, in Cornwall, over £500 million of taxpayers’ money was handed out to holiday home owners not only through covid aid but through the small business rate relief scheme and other tax loopholes. At the same time, only a third of that amount has gone into social housing for first-time users. Will she look at the whole issue of parity in the way public funds are used, to support people who need housing?
I welcome the hon. Member back to this place. I enjoyed sparring with him in my early days in Parliament, and it is great to see him back in the House. He is absolutely right that we need to get value for money for all tax incentives. I will ensure that the Treasury and the Ministry of Housing, Communities and Local Government look at the changes that he suggests.
The last Government’s record on investment was dismal. We now sit behind every single member of the G7 when it comes to business investment as a share of GDP. That is not an abstract economic problem. Weak investment holds back productivity and hurts living standards; it leaves households poorer and wages lower.
The King’s Speech deals directly with the need to unlock private investment through a new national wealth fund Bill. That will be supported by an injection of capital, part funded by an increase to the windfall tax on oil and gas giants. It will make transformative investments in industries of the future, such as carbon capture and storage, and green hydrogen. It will mobilise billions of pounds-worth of additional private sector investment in our industrial heartlands and coastal communities while generating a return for taxpayers. The national wealth fund will work with local partners including mayors, as well as the devolved Administrations in Scotland, Wales and Northern Ireland, to develop an investment offer that meets the needs of all our nations and regions. It will simplify a complex landscape of support for businesses today, aligning key institutions such as the UK Infrastructure Bank and the British Business Bank under the one banner of the national wealth fund.
(11 years, 1 month ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Andrew George (St Ives) (LD)
It is a great pleasure to serve under your chairmanship, Mr Sanders. I am delighted to have secured this opportunity to introduce a debate on assistance from Her Majesty’s Treasury for people in housing need, because without question the most pressing and chronic problem in areas such as mine is the lack of affordable homes for the thousands of local families who are inadequately housed or housed in properties with extortionate rental charges.
My area and others are characterised by a very significant mismatch between earnings levels and house prices. There is a large and growing market for second homes, investment homes and retirement homes. Of course, over the years there has not just been the 50% council tax discount for second home owners, which was introduced in the early 1990s; other incentives are available that encourage, that are a further stimulus for, the purchase of second homes especially and investment properties in areas such as mine. For example, people can take massive advantage of small business rate relief if they are letting their properties in the local holiday market, while also of course using them for their own use; and by shifting from council tax to business rates, they can end up paying absolutely nothing in terms of their contribution. That is a further and often hidden stimulus for the purchase of second homes.
I have undertaken surveys of estate agents across my constituency on three occasions, and we have found that over time it has become the case that somewhere between four and six times as many properties are sold to second home buyers as to first-time buyers. That is a very significant and quite shocking statistic. It shows what is going on in markets such as mine. I am not saying that that is happening in the rest of the country, but it is certainly happening in constituencies such as mine, which are very attractive for second home purchases.
There is a rather macho obsession with building homes as the sole, two-dimensional solution to our housing problems, but that does not work. Cornwall has been one of the fastest growing places in the United Kingdom in the past 40 to 50 years, so we have done exactly what successive Governments have encouraged us to do; we are certainly not nimbys. However, although the housing stock has significantly more than doubled in that period, the housing problems of local people have become significantly worse, so we know that simply building thousands of houses is not in itself the answer. We need to do something a little smarter to target those who are in particular housing need in areas such as mine.
I want to address myself to the need to find constructive solutions that would work in areas such as mine. First, I acknowledge and congratulate the Government on some of the things that they are doing. Since 2010, whether there has been new money or a replication of old money or a continuation of programmes that the previous Government had engaged in, we have seen various things happen. We have seen the affordable homes programme, the affordable homes guarantees programme, the trial of direct Government provision—a new delivery model—the affordable rent to buy scheme, which was introduced in 2013, and the new homes bonus, on which an announcement was made yesterday about the latest tranche of money going to local authorities. Of course, that is not just to build houses, but for other economic purposes. However, it certainly provides a stimulus to encourage planning permissions for developments. We have seen the growing places fund, the Get Britain Building fund, the builders finance fund, the estate regeneration fund, the single local growth fund and public land schemes, which have been announced over the years.
In terms of home ownership initiatives, the Government first tried, in 2011, the First Buy scheme, which was closed in March 2013. That was overtaken by the Help to Buy scheme, a very welcome initiative. It replaced the First Buy scheme and is widening the criteria for eligibility by increasing the maximum home value up to £600,000, so it is not just for first-time buyers, but for those looking to move up the ladder. There is the NewBuy Guarantee scheme and the Help to Buy: mortgage guarantee scheme. There is the right to buy and, in a moment, I will come on to shared ownership.
In the private rented sector, there is the Build to Rent fund and the private rented sector guarantee scheme. Then there are other schemes, such as real estate investment trust schemes and self-build and custom-build schemes; and two elements of the recent autumn statement were on the subject of shared ownership.
Obviously, all those schemes and all the things that will provide a stimulus and assistance, which might be targeted at the groups that I am talking about, are welcome, but whether they are sufficient and will help in areas such as mine, only time will tell. I will be making a suggestion today about what we need to do in areas such as mine. I am not saying that this needs to happen across the country, but it certainly needs to in areas with a significant mismatch between earnings levels and house prices and extortionate private rents, and that are characterised by a social rented sector that is significantly smaller than that in many urban areas. Less than 10% of the stock in my area is social rented accommodation.
We need to construct a new lower rung on the housing ladder. The lowest rung on the housing ladder is out of reach for the vast majority of people, who, in other circumstances—perhaps decades ago or in other parts of the country—would consider it reasonable for them to expect to be able to move into home ownership by the time they leave their parental home. I am talking about teachers and nurses—people in stable professions who simply cannot get into the housing market. It is those people whom I particularly want to help—those who have an expectation, a reasonable aspiration, of moving into home ownership, but who simply cannot and are then locked into the extortionate private rented market.
Mr Mark Williams (Ceredigion) (LD)
I apologise for missing the start of my hon. Friend’s speech. He mentions key workers. I represent a rural area, albeit in Wales. I suspect that it is out of the ambit of much of what he is saying, but one problem that we are having now is the difficulty of keeping key workers in west Wales—I am thinking of the health service and teachers—for exactly the reasons that he has identified. Does he agree? Is that a concern in west Cornwall, too?
Andrew George
That is absolutely right. As I said, this issue is not unique to west Cornwall and the Isles of Scilly. The Isles of Scilly has a particular market that is different from that in other areas: it is more like a London market than a rural market. Nevertheless, as my hon. Friend rightly says, this issue is so significant in many parts of the country. It is without question the most significant social challenge that we face. The Government can and should do more, and I hope to encourage them to do so.
I said that we need to construct a new lower rung on the housing ladder. There are problems with shared ownership accommodation. First, there is not enough of it; there is not an effective market. There are only two lenders lending to those purchasing shared ownership accommodation—Nationwide and Halifax—and those lenders are extremely circumspect and apprehensive. They look at these schemes on a case-by-case basis and are extremely cautious, particularly at the point of resale, which is often a significant discouragement to the development of the shared ownership market—that new lower rung on the housing ladder.
Also, occupants tell me that they have to pay near market rents on the remainder, the share of the property that they do not own, and they feel that they are not rewarded for maintaining the property or for any improvements and investments. The cost and burden of maintaining or improving the capital value of the property is not shared with the housing association or registered social landlord that owns the other part of the property. The home owner’s share of the property is often less affordable by the time of sale, and the sale process is often over-long and legally complex.
I note that in the autumn statement the Chancellor announced that the Government would extend the stamp duty land tax multiple dwelling relief to include lease and lease-back arrangements with housing associations on shared ownership properties, with a view to increasing investment in shared ownership. The National Housing Federation has welcomed the measure as something that may be of assistance. Lowering the stamp duty land tax on multiple purchases of property from 4% to 1% may get institutional investors into the market. That can only be welcomed, and it must be kept under review. In addition, I note that the Government intend to work with housing associations, lenders and the regulator to identify and lift barriers to extending shared ownership, which will include consultation on options for streamlining the process for selling on shared ownership properties. I welcome that initiative to work with those associations and others to find a way forward.
I think I have described reasonably well some of the current problems with the development of the shared ownership market. However, the National Housing Federation welcomes the Government’s proposals. I hope that the dialogue will be constructive and that the Government will keep an open mind about the kinds of tools that could be brought into play to enable a significant scaling up of activity in the sector.
When it comes to solutions, my constructive proposal is to ask the Government to act not necessarily as a funder but as a guarantor. The Government—brilliantly, in my view—established the green investment bank. In the same way, I suggest that rather than spending money that they cannot recoup, they should establish an affordable homes fund or intermediate housing fund. Such funding could be revolved to provide the necessary liquidity and confidence among lenders to enable shared ownership schemes to get off the ground, and to facilitate the resale process for such properties. I strongly encourage the Government to look seriously at that proposal.
I am looking forward to hearing from the Minister in a moment, and I have sent her a proposal for the establishment of an intermediate housing fund, on which I have worked with the National Housing Federation. I am not precious about the details of that proposal, but I hope that this Government, the next Government or some other Government—I do not think that this is a party political issue; surely, people across all parties can see the logic and the common sense in this—will consider the concept of such a fund, which would not only benefit the kind of people whom I described earlier, but would be facilitated and enabled by registered social landlords and community land trusts.
Under my proposal, the intermediate housing fund would be administered by the Homes and Communities Agency, although it does not necessarily need to be. It could be an independent body similar to the green investment bank. It would encourage a lending environment that would enable the liquidity necessary to take schemes forward. I believe that it would be a real game changer in the sector and that it would enable progress to be made. I have asked housing associations why they do not engage and buy back properties when people find it really difficult to sell them on, and the housing associations have told me that to do so would count against their contingent liability and restrict their ability to develop new schemes. For various reasons, it would be far better to set up an intermediate housing fund to facilitate such a solution.
The Minister will not be surprised to hear that my question to her is a simple one. Taking into account all that I have described, including the problems and my congratulations to the Government on their work so far, I believe that my proposal is the most significant way of taking the matter forward. Therefore, will the Government look carefully at extending the tools available to develop and scale up shared ownership and other intermediate housing products as an essential solution in areas, such as my constituency, which have high house prices and low wages?
It is a pleasure to serve under your chairmanship for the second debate this morning, Mr Sanders. I congratulate the hon. Member for St Ives (Andrew George) on securing the debate. He recognised the importance and significance of housing need and housing pressure, while acknowledging the work that the Government have done in the area. Hon. Members come up against many pressures and concerns in their constituencies regarding the affordability of home ownership. There is no doubt that that has been a challenge for the Government. We are addressing the need and introducing schemes through which we can do something about it, and we are engaging with and listening to communities around the country, and with hon. Members such as the hon. Gentleman, on solutions.
The Government are absolutely committed to making the aspiration of home ownership a reality for as many households as possible. Across the country, there is a problem with demand for housing, which has consistently outstripped supply. It was interesting to hear the hon. Gentleman mention that, in his constituency, the demand for second homes is outstripping supply, which is changing the marketplace and having an impact on the ability of first-time home buyers to get on the housing ladder. It is our role as a Government to do what we can to help households that are struggling to get on the housing ladder.
The rate of home ownership in the United Kingdom has fallen from its 2003 peak of 70% to about 65%. We are committed to ensuring that future generations get to experience the benefits of owning their own home in the same way as their parents’ generation did, which is why we have taken clear steps to increase housing supply, build more affordable housing and help people to afford a home without relying on parents and other family members for financial support. The hon. Gentleman has spoken about the reform of planning laws to unlock more housing supply, and that is exactly what the Government are doing. The autumn statement package contained specific commitments to release land with a capacity of up to 150,000 homes, and to introduce new measures to support up to 133,000 new homes, including affordable homes. Affordable homes are the key to this debate. The hon. Member for Ceredigion (Mr Williams) mentioned key workers in his intervention, and they are important. It is incumbent on the Government to ensure that we address key workers’ need when it comes to affordable homes and changes to planning. Key workers support our front-line public services, and it is essential that we have the right kind of housing support for them.
Our policies are bearing fruit. Planning approvals and housing starts are at the highest level for six years. Construction activity, as we see across the country, is really gathering pace and has expanded at the fastest rate for 10 years. We have the national infrastructure plan, which is incredibly important to support housing demand. That contains further measures this year for specific new developments to transform communities through housing in Bicester, Ebbsfleet and Northstowe in Cambridgeshire. Alongside that, billions of pounds of public money—some £4.5 billion during this spending review and more than £5 billion to 2020—is being invested in providing new affordable homes. Almost 217,000 new homes have been delivered by the Government since April 2010, and a further 275,000 will be provided in the five years from April 2015 to 2020. Again, it is about delivering affordable homes in this and the next Parliament.
Under the previous Government, there was a net reduction in social rented homes from 1997 to 2010. That is why, as the hon. Member for St Ives rightly highlighted, we are helping housing associations to access funding. In the 2012 housing package, we introduced a £10 billion housing debt guarantee, which enabled private organisations to access cheaper debt funding to deliver homes for private and affordable rent. We also announced up to £3.5 billion for affordable housing. Our delivery partner, Affordable Housing Finance, issued its first bond to raise funding under the new scheme in May, which was priced at 3.76%—the lowest-priced bond in the history of the affordable housing sector. More than £1 billion of debt has now been guaranteed.
Last week, the Government announced that we have awarded the licence for the private rented sector housing guarantee scheme, which will help create a new market for institutional investment in the private rented sector. All those things help support the Government’s aim of expanding the provision of rented housing, which will help the wider economy by delivering an economic boost and increasing choice. It will also improve housing quality for tenants. Although I do not have time to speak about improving housing stock, it is a key issue for tenants in affordable homes.
We remain committed to establishing shared ownership as a route to home ownership and making it more attractive to households and investors. We will consult on streamlining the process for selling on shared ownership properties. In the autumn statement, we announced that we will extend the scope of stamp duty, which the hon. Gentleman mentioned. Stamp duty is incredibly important, as it affects first-time buyers’ ability to get on the housing ladder. Our scheme is a vital means of supporting home ownership, and it will also cut the cost of property purchasing for up to 98% of buyers.
Building more homes is a priority. The hon. Gentleman mentioned the Help to Buy scheme, which has helped more than 66,000 households to complete mortgages—more than 30,000 have been helped by the mortgage guarantee scheme and 36,000 have been helped by the equity loan scheme. The vast majority of those people—81%—are first-time buyers, which is to be supported and commended. Importantly, more than 94% of all completions are outside London. We are doing everything we can to support the market outside London in constituencies such as the hon. Gentleman’s and rural constituencies, where access to home ownership and new homes has been challenging.
Andrew George
I appreciate what the Minister is saying. Having mentioned shared ownership, Help to Buy and other related schemes, she is coming to the nub of the issue. We must extend the logic of those schemes to the intermediate housing sector. There is still a large cohort of aspiring professional people and others who simply do not have the opportunity to get into the housing market without Government help.
The hon. Gentleman makes a valid point. He is absolutely right.
On Monday, the Prime Minister launched a new scheme that will offer 100,000 first-time buyers new homes at a 20% discount. That enabling factor is a crucial part of our major push to help people get on the housing ladder. The Government have a role to play in enabling ownership.
In addition to our changes to the planning system, we are freeing up underused or unviable brownfield land. There are many aspects of the housing debate that we could discuss, including planning and turning around land that is not being used in a viable way. We must free up underused and unviable brownfield land from planning costs and levies in return for below market value sale prices for the homes that are built on those sites.
On the hon. Gentleman’s point, I have said that shared ownership is an integral part of the affordable homes programme. His private Member’s Bill seeks to expand the provision of intermediate housing. I assure him that the Government are committed to intermediate housing, and we are always looking at what more we can do to assist, enable and support people.
Andrew George
An earlier draft of my Affordable Homes Bill, which I have shared with the Minister, included a proposal to establish an intermediate housing fund, although I had to remove it because I could not get sufficient political support for it. In my conversations with the National Housing Federation, it estimated that the kind of fund that would be sufficient to facilitate that sector is in the region of half a billion pounds. However, that would be an investment fund, not funding that is lost.
I welcome the hon. Gentleman’s thoughtful points in this debate.
Housing is a challenging issue, as we have discussed in the short time available. The Government are working assiduously to do many things. I have spoken about the many measures that the Government have undertaken to help the housing market. We are seeing great trends, positive improvements and growth in access to affordable housing. We are providing assistance to aspiring home owners and giving them the opportunity to get on the housing ladder.
Andrew George
This is my final intervention before the Minister concludes. I had discussions with the National Housing Federation, community land trusts and others when I was developing my proposal. As the Government are consulting on how to develop the shared ownership model, will the Minister or one of her colleagues meet me and representatives from the National Housing Federation and community land trusts to see whether we can take these ideas forward?
I thank the hon. Gentleman for the opportunity to respond to that point. The Government are putting in place many reforms and measures. Again, I thank the hon. Gentleman for his contribution to this debate. Either I or one of my colleagues will discuss this matter further with him to see what else we can do.
I assure the hon. Gentleman and the House that the Government are committed to supporting aspiring home owners—we are doing a great deal in that area— and helping home ownership. We take a continued and significant interest in this area, and we will continue to take a wide range of action.
(11 years, 8 months ago)
Commons Chamber
Mr Osborne
This Government have taken action against tax avoidance that the last Government never dreamed of taking. We have increased the resources for tackling avoidance and evasion. I will tell the House something else: we do not preside over a tax system in which cleaners pay higher tax rates than the people they work for. That was the tax system that the Labour party voted for, and we have got rid of it.
Andrew George (St Ives) (LD)
T5. I thank my right hon. Friend the Chief Secretary to the Treasury for visiting Cornwall last week, when he will have been impressed by the resourcefulness and enterprise in the Cornish economy. Will he make sure that those charged with managing the Cornwall EU structural fund programme are granted the appropriate delegated powers of intermediate body status in future?
The Chief Secretary to the Treasury (Danny Alexander)
I was indeed impressed, and also convinced by the strong support from the Cornish businesses I met for the policies the Government are putting in place to secure the long-term future of the British economy. Having announced on that visit the Government’s recognition for the Cornish identity, values and culture under the European convention, it would seem odd not to take seriously the request that there should be a degree of autonomy in the management of the European structural funds programme. I urge my hon. Friend to work with the local enterprise partnership to make that case strongly to the Government, as part of the growth deal process.