Finance Bill

Andy Carter Excerpts

2nd reading
Wednesday 13th December 2023 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

I beg to move, That the Bill be now read a Second time.

Before I start the debate, I should declare, to avoid any potential conflict or perception of conflict, that, with reference to my previously published entry in the Register of Members’ Financial Interests and my ministerial interests, I have recused myself from making ministerial decisions on issues relating to pillar two, which will be dealt with more than ably by the Exchequer Secretary to the Treasury, my hon. Friend the Member for Grantham and Stamford (Gareth Davies).

My right hon. Friend the Chancellor of the Exchequer delivered an autumn statement with a clear intention to strengthen the economy now and for the future. The Government proposed to do that by putting money back in people’s pockets and cutting taxes. The Finance Bill that we are debating today does just that. First, it supports British businesses by allowing them to invest for less, which will encourage innovation and enhance productivity. Secondly, its measures will improve and simplify our tax system, which will ensure that it is fit for purpose.

The Bill covers 36 different measures in total, some of which are more complex than others. Madam Deputy Speaker, you will be pleased—or perhaps displeased—to know that I do not intend to cover every one in detail in this opening speech. I would like to focus on some of the key themes and measures.

I will first detail the Bill’s measures to support British business. The Government understand the simple truth that a strong private sector drives economic growth. That growth in turn serves the public good by allowing the Government to invest in public services. Perhaps most importantly, it allows the Government to support the most vulnerable. That understanding has shaped our approach. That is why we are lowering business taxes: because it will incentivise investment and boost private sector growth.

The Bill’s first measure to achieve that will make full expensing permanent, allowing businesses to invest for less. As a result, the UK’s plant and machinery capital allowances will increase. It is effectively a tax cut to companies of over £10 billion a year—the most generous of any major economy. The benefits to the economy of the policy—just this measure alone—are that it will drive 0.1% GDP growth over the next five years, increasing to almost 0.2% in the long run, and it will unlock an additional £3 billion of investment per year. That is only one of many Government policies backing British businesses.

The Government also recognise the important role of research and development in driving both innovation and economic growth as well as the benefits it can bring to society as a whole. Therefore, we will merge two Government programmes: the research and development expenditure credit scheme and the small or medium enterprises scheme. That will have two key impacts: it will simplify the system and provide greater support for UK firms to drive innovation. Those changes will apply from April 2024 onwards.

The support does not stop there. The Government will also introduce greater support for loss-making R&D-intensive SMEs. We will also lower the R&D intensity threshold required to access that to 30%. That will help about 5,000 extra SMEs, and they will receive £27 per £100 of qualifying R&D invested. Let us be in no doubt that this is a major boost for innovators across the UK. These measures significantly increase support to R&D firms to about £280 million a year by 2028-29, and overall they will ensure the success of UK plc.

I will now outline the next measure to back British businesses. The Government will extend the sunset clause for two more programmes: the enterprise investment scheme and the venture capital trust scheme. Both will be extended to 6 April 2035. That will support young companies to raise capital for successful growth.

The Government applaud our world-leading creative sector—after all, it grew 1.5 times faster than GDP between 2010 and 2019. In response, a new measure to back British business will go even further through reforming tax reliefs to refundable expenditure credits for the film, TV and video games industries.

[Andy Carter (Warrington South) (Con)]

I am pleased to hear the Minster outline support that the Government are giving to the creative industries, which secures thousands of jobs around the UK, and particularly in the north-west of England, where we have seen a huge creative hub develop. Does he agree that it is not just about jobs, though? It is also about soft power, which the creative industries ensure goes right around the world, with great British TV and film. Does he also agree that we want to see that continue?

[Nigel Huddleston]

Yes. My hon. Friend makes an important point. The jobs and economic activity are hugely important, but we are known throughout the world for excelling in the creative sectors—we always have, and we always will. We can all be proud of the incredible creative talent in the UK. He is also right to highlight how it is spread right across the UK.

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[James Murray]

I thank my hon. Friend for raising that point; she is a great champion for orchestras. It is only right, when we consider the details of the Bill in Committee, for us to push the Government to provide the certainty that is so often lacking from many of the measures that they propose.

I was talking about the reality from which the Conservatives cannot hide. The Chief Secretary to the Treasury, who is present, has been desperately trying to claim that the tax burden is going down. Three weeks ago, she claimed that

“taxes for the average worker have gone down by £1,000.”—[Official Report, 22 November 2023; Vol. 741, c. 360.]

Two weeks ago, she claimed:

“Taxes for the average worker will have gone down by £1,000 since 2010.”—[Official Report, 30 November 2023; Vol. 741, c. 1084.]

However, analysis conducted by the House of Commons Library makes it very clear that national insurance and income tax for the median earner will rise by well over £1,000—up from £6,112 in 2010-11 to £7,364 in 2024-25.

In an attempt to understand the tension between the Chief Secretary’s comments and the Library analysis, I wrote to her and also tabled written parliamentary questions. The Financial Secretary responded to both the letter and the questions with rather more careful wording, saying that

“an average worker in 24-25 will pay over £1,000 less in personal taxes than they otherwise would have done.”

He was careful to make it clear that the Government’s

“calculations are on a same-year basis against a counterfactual”,

and that this was not, in fact, a comparison over time, as that

“would include the effects of earnings growth on cash totals of tax due”.

I wonder whether the Chief Secretary’s statement that taxes for the average worker have “gone down by £1,000” may have inadvertently misled the House, given that her colleague’s written response to me tacitly admitted that the Government’s statistics do not refer to the actual taxes that a worker pays. When the Exchequer Secretary to the Treasury responds to the debate, perhaps he will tell us if he knows whether the Chief Secretary would like to correct the record. Whatever the Conservatives say—however they twist and turn—the truth is that people across Britain are feeling the squeeze, and life is very different from the picture that Ministers are desperately trying to paint.

I have already made it clear that we support a number of the individual measures in the Bill. We welcome, for instance, the measure in clause 1 to make full expensing permanent; we have been calling for that for some time. Welcome as it is, however, it simply cannot make up for the years of uncertainty that businesses have faced. When I meet businesses across the country, they are clear that they want stability, certainty and a long-term plan, but even during the time for which I have been shadow Financial Secretary—a period that has seen five different incumbents of the office that I shadow—business taxation and reliefs have been chopped and changed every year.

Let us take the annual investment allowance. At the start of this Parliament, it had been raised to £1 million on a temporary basis. That temporary basis was extended first by the Finance Act 2021 and again by the Finance Act 2022, and was then made permanent by the Finance (No. 2) Act 2023. During that time, of course, the super-deduction, which Members may recall, came and went entirely, and last year full expensing for expenditure on plant or machinery was introduced—but, again, only on a temporary basis for three years, before being amended yet again this year to be made permanent. Frankly, while the latest Treasury Ministers may say that full expensing is now permanent, how long any policy under this Government may last seems to be decided by the Conservatives’ internal battles rather than what is right for the country.

[Andy Carter]

The hon. Member has said that Labour will support the Bill today, and I welcome that, but I have been doing some calculations. Does he agree that if Labour remain committed to their £28 billion borrowing plan, debt will soar and they will break their own fiscal rules?

[James Murray]

The hon. Gentleman was desperate to make an intervention about fiscal responsibility, when just a year ago his party crashed the economy and sent interest rates soaring, and working families throughout the country are still paying the price. We on this side of the House take fiscal responsibility seriously. We want to have a fiscal lock in place, we want to get debt falling, and we want to get the economy growing. That is the difference between us and the Conservatives.

Clause 2 contains measures on research and development. In Committee we will probe the impact of those changes in greater detail, but it is clear straightaway that stability and certainty have been lacking here as well. We need only look at the changes in the current Parliament’s Finance Acts. The Finance Act 2020 raised the rate of the R&D expenditure credit from 12% to 13%. The Finance Act 2021 made changes to the amount of R&D tax credit that small and medium-sized enterprises could claim. The Finance Act 2023 again changed the rates of R&D tax reliefs, and that same year the Finance (No. 2) Act 2023 made yet further changes to how the relief operates. Now, of course, the Finance Bill before us introduces a whole new regime. Businesses making investment decisions yearn for stability and certainty, but after 13 years in office, the Government are proving themselves incapable of providing those crucial foundations for success.

We acknowledge, of course, that the tax legislation in Finance Acts needs to be kept updated, and that some change is not only inevitable but important in enabling legislation to function well. However, with this Government it is hard to avoid the sense that changes are being made without a long-term plan in mind. It looks very much as if there has been no long-term plan for capital allowances or research and development reliefs, and the same is true of tackling tax avoidance and evasion.

Although we welcome any measures to tackle tax avoidance and evasion, again there has been a busy history of legislation in this Parliament alone. The Finance Act 2020 made changes to the general anti-abuse rule, introduced to deter taxpayers from using tax avoidance schemes. That was followed by more changes to the rule in the Finance Act 2021, alongside other changes to the legislation covering avoidance. In the Finance Act 2022, a further round of changes were made to the legislation relating to avoidance, including on HMRC’s publication of information about avoidance schemes. Now, in 2023, we see the latest set of changes to the rules and penalties in respect of avoidance and evasion. While we will consider the detail of those changes in Committee, it is already clear that a long-term plan is very hard to see.

Stability and certainty are crucial foundations when businesses are making decisions about where to invest and where to create jobs. We in the Opposition hear that from business leaders day in, day out, across all sectors and in all parts of our economy. We know how much damage is done to economic growth and people’s standards of living when that stability and certainty are not there. We saw that at its most extreme last autumn, when the Conservatives crashed the economy and trashed their reputation in a matter of days, through a reckless disregard for our economic institutions and for working people’s security. But it is not just about last autumn; it is about 13 years of Conservative government. It is about the inability of the Conservatives to provide the stability, the certainty and the plan for the future that businesses and our economy need.

Oral Answers to Questions

Andy Carter Excerpts

Tuesday 20th December 2022 Commons Chamber

[Cat Smith (Lancaster and Fleetwood) (Lab)]

14. What fiscal steps he is taking to support people with their energy costs.

[Andy Carter (Warrington South) (Con)]

17. What recent fiscal steps his Department has taken to support families with the cost of energy bills.

[The Chancellor of the Exchequer (Jeremy Hunt)]

We have reaffirmed our commitment to help hard-pressed families this winter with support for energy bills. We have introduced a range of measures to help those families, including capping energy bills at £3,000 this year and £2,500 next year.

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[Jeremy Hunt]

I am grateful to the hon. Lady for asking that question because I have a number of park home residents in my constituency. The answer is that they can apply online for that support from January.

[Andy Carter]

I have heard from many voluntary groups in Warrington South, including organisations, such as the Scouts and Guides, that provide important extra-curricular activities for young people’s development, especially after the impact of the pandemic on their education and wellbeing. What steps are the Government taking to support charity and voluntary organisations, many of which have seen their energy costs increase by five times over the past year?

Co-operatives, Mutuals and Friendly Societies Bill

Andy Carter Excerpts

Friday 28th October 2022 Commons Chamber

[Sir Mark Hendrick]

I agree and commend the hon. Gentleman for his comments. Co-operatives spring up from local communities; they are bottom-up, grassroots organisations—certainly not top-down.

As I said, alongside investor-owned firms, co-operatives, mutual insurers and friendly societies have an important part to play in the biodiversity of our economy. They need a business environment that facilitates this: Government policy that understands and supports the mutual business difference; and legislation that is up to date, flexible and permits co-operatives, mutuals and friendly societies to undertake their purpose of serving their members’ needs in the best way possible. Only by working in a modern and supportive business environment will co-operatives, mutuals and friendly societies be able to make a full contribution to the prosperity of our country by serving the interests of customers and citizens. Yet demutualisation remains a real and present threat to the mutual sector, which is, unfortunately, incentivised by the system.

My Bill is about giving mutuals the option to maintain mutual capital for the purpose it was intended. There is a fundamental distinction between the rights of members of a mutual society and members of an investor-owned company. Members of a company—shareholders—have the right both to a pro rata share of distributed profits, or dividends, based on their shareholding, and also to a pro rata share of the underlying value of the company. The more capital they own, the greater their share of the profits and of the value of the company. Members of a mutual society, by contrast, generally have neither of these rights, because in mutuals profits are generally not used as a mechanism for rewarding capital, and members of a mutual do not have any expectation of any entitlement to a share in the increased value of their society.

Since members of a mutual are not entitled to any share of its increased value, the amount by which the net asset value of a society exceeds the capital provided by members—commonly referred to as the “capital surplus on a solvent winding up”—has no specific owner. It is effectively a legacy asset, held by the society for future generations, and enables it to provide for, and invest in, its future. It is a core part of its mutual identity. It represents the trading surplus accumulated by previous generations of members participating in their society’s business, in which they were always content to have no personal share. By implication, it is held for the benefit of future generations. Societies were originally set up not to make a capital surplus to reward members, but to provide goods and services for those who need them; that was the purpose, and this was the basis upon which previous generations have taken part in the trade.

Seen through the lens of investor-ownership, a capital surplus is a tempting asset—a windfall or unearned profit —which, if mutual members were to be replaced by investor-shareholders, could be shared out among those shareholders. Capturing this asset is the usual incentive for a “demutualisation”, which is when a capital surplus or legacy asset is divided up between shareholders—when the mutual agreement between the former members, whereby they engaged in their society on the basis that they would not personally profit from its trade, is broken up. In short, it is when a mutual purpose for the common good is replaced by a profit-driven purpose for private benefit.

In UK law there is no generic or principled recognition of the value to wider society of mutuality or of the legacy asset of a mutual society. As a result, the ability to access legacy assets actively incentivises demutualisation.

[Andy Carter (Warrington South) (Con)]

I am grateful to the hon. Gentleman for his speech and very supportive of his Bill. He talked about how the Bill would protect mutuals and co-operatives. Will he give us some examples of when things have gone as he suggests they could and some assets have been used for other purposes? I think that is at the heart of it, and any examples would be welcome.

[Sir Mark Hendrick]

I thank the hon. Member for his intervention. Actually, I will come to that later in my speech.

Provided that the relevant formal procedures are completed, including securing consent from a statutory minimum threshold of members, a demutualisation cannot be stopped. That threshold has been changed from time to time for different types of mutual societies to make demutualisation less likely, but those measures provide only partial protection. There is currently no statutory mechanism for ensuring that surpluses, which previous generations never intended to be a private reward for anybody, remain committed to that wider public purpose.

At the moment, legislation governing mutuals can incentivise demutualisation by permitting those legacy assets to be distributed. Legacy assets have often been built up over many generations of membership and can constitute a significant part of the working capital of the business. Current members typically have not contributed to that capital base but have enjoyed the benefits of previous years of successful trading. Most demutualisation attempts succeed, assisted by a significant power imbalance between the boards of mutuals and members.

The example of Liverpool Victoria last year shows that demutualisation attempts can, however, be defeated, even when proposed by a mutual’s board. We should be wary of the interests that private equity is showing in mutuals across the world, attracted by the prospect of acquiring significant assets built up by generations of members. At present, it is not possible for an existing society, or those setting up a new society, to proscribe demutualisation. That leaves mutuals vulnerable to those simply aiming to liberate those legacy assets, sharing them out among people as they choose, and converting the business into an investor-owned company. That has resulted in much of the UK building society sector being lost and their businesses either failing or transferring to non-UK ownership. That has been bad for mutuality and bad for the economy, given the damage that it has caused to corporate diversity.

Demutualised former building societies were mostly absorbed into banks that failed during the financial crisis. None of the demutualised former building societies continued for long as an independent bank. They became part of larger listed banking groups or, in the cases of Northern Rock and Bradford & Bingley, failed in the financial crisis and were later nationalised. Moreover, those demutualisations converted some of the largest building societies at the time. The argument for demutualisation has proved to be bogus. It has not delivered the strong independent businesses that it was supposed to do, and the need for more capital is soon forgotten as the newly proprietary entities are generally merged into larger firms.

Diversity of ownership types and business models creates a corresponding diversity in forms of corporate governance, risk appetite and management, incentive structures, policies and practices, and corporate behaviours and outcomes. It also offers a wider choice for consumers and enhances competition that derives in part from the juxtaposition of different business models.

Legislation is needed to help UK mutuals to preserve their legacy for the purposes for which they were intended, to maintain and encourage greater corporate diversity, and to build a more resilient economy. Mutuals need to be able to incorporate appropriate measures into their constitutions which have a statutory basis, either at the point of establishment or thereafter, with an appropriate level of member approval. This will be even more important if the legislative reforms for co-operative and community benefit societies explained above are taken forward. To optimise the successful implementation of new legislation, properly recognising legacy assets for the benefits they bring will be an important ingredient for building confidence.

Many jurisdictions have acted to preserve mutual ownership by ensuring that assets are used only for the purpose for which they were intended. That ensures they cannot be distributed to members or third parties, and thus disincentivises demutualisation. Mergers, dissolutions and transfers of business are still permitted, so this arrangement does not hamper the evolution of business in any way. Ideally, such measures will be universal, but in some legal traditions that is considered problematic as it arguably alters members’ ownership right retrospectively. It is not desirable to cut and paste legislation between different traditions, so solutions are required that respect the culture of different legal frameworks. To deal with that, simple legislation can be introduced in common law jurisdictions that would give every mutual the right to choose a constitution that preserves legacy assets for the purpose they were intended.

My Bill does that. My Bill disincentivises the raiding of legacy assets. Voluntary legislation will ensure that legacy assets are preserved for the purpose for which they were intended. It empowers mutual members to decide what should happen to assets on a solvent dissolution. It would match the best legislation that exists in many other countries. My Bill also: introduces a voluntary power to enable a mutual to choose a constitutional change, so that its legacy assets would be non-distributable; details precisely the destination of any capital surplus on a solvent winding up; outlines the procedures necessary to include such provisions in a mutual’s rules; and inserts a statutory provision for the relevant rules to be unalterable. My Bill will define the capital surplus as the amount remaining after deducting a mutual’s total liabilities from its assets, including repayment of members’ capital.

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[Andy Carter (Warrington South) (Con)]

I congratulate the hon. Member for Preston (Sir Mark Hendrick) on introducing this private Member’s Bill, and it is a great pleasure to take part in the Second Reading debate. I am very supportive of the measures in the Bill, and I know that the Government have also indicated their support. To that end, I do not intend to speak for too long, but I want to reflect some of the views that my constituents have shared with me. Before I do that, I want to speak about the importance of the co-operative movement on our high streets. As somebody who grew up in the 1970s, I remember my mum shopping in the Co-op because she got her dividend stamp. She got rewarded for supporting a local supermarket on our high street. I have to say that I am a member of the Co-operative. I have my little card, and when I go into the Co-op in my village to do my shopping today, I will get rewards for doing that. I am proud as a Conservative to be supporting the Co-op in Cheshire.

It is not just the Co-operative superstores, there are many insurance mutuals on our high streets. I suspect that many of our constituents do not realise—I certainly did not until I started looking into this—how important mutuals and co-operatives still are to the high street today. It demonstrates the longevity and importance of this business model, so I am pleased that we are supporting the Bill.

The Co-operative in Warrington is among the strongest supporters of community activity. It regularly contacts me to ask if we will support community initiatives. It recently contributed to one of my local playgroups, helping to provide new equipment for the children. Incredibly, that money is raised by people shopping and then given back out into the community. Co-operatives provide real value.

In some respects, it is surprising that the co-operative sector in the UK remains relatively small compared with similar economies. Like many colleagues in this House, I have received a significant amount of correspondence on this Bill from constituents. When talking to a dairy farmer in Lymm, I was struck by the importance of co-operatives for that sector. He gets up very early in the morning to look after and milk the cows, and then waits for the milk tanker to arrive. The business model he follows means that he works with a co-operative to negotiate with the major supermarkets and major dairy companies. He told me, “I simply wouldn’t be in a position to negotiate with supermarkets and head offices all around the country if I didn’t work with a co-operative that generates support and profits.” Co-operatives are experts in negotiation, and they are incredibly supportive when working with farms.

What is the overall impact of co-operatives on the economy? A 2021 report by Co-operatives UK identified that about 7,200 co-ops operate across the UK. Their turnover in 2021 was £39.7 billion, which was an increase from £38.6 billion in 2020. The co-ops employed about a quarter of a million people in 2021, with membership totalling 14 million. Between 2020 and 2021, the number of co-ops grew by 1.2%.

I will turn briefly to important elements in the Bill. It provides His Majesty’s Treasury with the powers to make regulations that would allow all co-operatives, mutual insurers and friendly societies to opt to restrict the use or dealing of their assets. I made that point in an earlier intervention on the hon. Member for Preston. There have been recent examples of co-operatives and mutual societies finding themselves under attack. That is why I support the Bill, which also brings friendly society laws up to date and establishes tax neutrality for mutuals’ deferred shares.

The impact of co-operatives on our economy and their members is broadly good. The Bill’s measures are, broadly speaking, updates to enhance the operating environment so that they can continue to serve their members and improve choice in the markets in which they operate. I know that the sectors face significant challenges. They are limited by issues with access to external finance, so it is important that we take that into consideration. The intention is that, where members of the society choose to adopt legal restrictions, the use of the assets will be limited to specific purposes in line with the objectives of the mutual society. The use of any other assets for those purposes would then carry legal recourse. That optionality in the regulations will be important in mitigating any potential negative impact. I know that the Government will continue to work with the sector, and I am very pleased that the Minister is in his place and that he will respond shortly. I encourage the Government to continue to work with the sector, to ensure that the regulations are appropriate and adapted to the needs of different mutual models.

Finally, I am pleased that Co-operatives UK fully supports of the Bill. It has carried out consultations with its members, which indicate that the measures enjoy widespread support. It has also said that the measures would bring

“significant new investment, innovation and development in a wide range of co-operatives, for greater economic, environmental and social impact.”

Likewise, mutuals have praised the proposals for offering more choice and competition in their markets, and for allowing them to serve their members with an enhanced operating environment.

In short, I support the hon. Gentleman’s Bill, which is clearly welcomed by the sector, and I look forward to continuing to use my Co-op membership card when I buy my tea this evening.

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[Dr Evans]

It is absolutely fantastic, and even better when it is just down the road if you are in your pyjamas. The main thing is not to forget the card so you can support the economy.

It goes a little further than that. I began to think about the other things that could be tied up with mutuals. I was a doctor before I came to Parliament, and had a lot of dealings—I still do, and declare an interest—with them. I have investments with the Wesleyan Assurance Society, which began in Birmingham in 1841, supporting doctors with investments and financial products. Both professionally and in the local community, we can see the effect that mutuals have. It goes further than that. In my constituency, the Hinckley & Rugby Building Society was formed in 1983 when two societies joined, but there has been a society in place since 1961. It is in the top 20 building societies, with assets of £830 million, and more than 50,000 users and customers, many of whom are based in my local area. It emerged from the need to support our local industries, particularly lacemakers and shoemakers. It is still there today, providing products for people who might not be able to secure them on the open market.

[Andy Carter]

My hon. Friend is generous in accepting interventions. As he knows, I grew up in his constituency. One of the first things my mum and dad did was open an account at the Earl Shilton Building Society, and I still have that account today. I think that they put in £2—today, having not put any money in, it is worth about £4,000. That is certainly a demonstration of the value of local building societies and the role they play in local communities.

[Dr Evans]

My hon. Friend is absolutely right. When I was young, I was given a small account with the Nationwide Building Society. It was common for previous generations to do that. We seem to have lost the sense of what building societies and mutuals can provide in our community. That is why it is good that the Bill has been introduced, so that it can provide a forward-thinking ability not only to defend them but to set them up for the future.

We can see the tangible difference that these societies can make. The Hinckley & Rugby Building Society supported a cricket match in Earl Shilton, as well as Leicestershire Cares, giving money back and investing it to make our communities better.

I will not dwell on the impact of the Bill, because what it is trying to do has already been highlighted. The provisions that would be put in place would not interfere with the ability of co-operatives to give profit to members or pay interest on share capital. I am keen to see, as I hinted in my intervention—and as has been followed up by my hon. Friend the Member for North East Bedfordshire (Richard Fuller)—how we can turn this into an industry that is fit for the future and drives innovation in the sector. The measure is a starting framework that can provide for that. If the Law Commission review is correct and forward thinking, we can restore the impact of mutuals on society that I had the pleasure of seeing as I grew up, and now have the pleasure of representing in my area. Long may they live.

Oral Answers to Questions

Andy Carter Excerpts

Tuesday 15th March 2022 Commons Chamber

[Rishi Sunak]

What we are doing is tackling the cost of energy. Unlike the hon. Lady’s party, we believe in the future of the North sea and we are investing in it. We want to make sure that we promote the jobs that are there. On upcoming support for energy costs, the Scottish Government have plenty of powers on welfare and tax, and if they think that they can make a difference, they should use them.

[Andy Carter (Warrington South) (Con)]

2. What assessment he has made of the progress of the kickstart Scheme.

[Cherilyn Mackrory (Truro and Falmouth) (Con)]

3. What assessment he has made of the progress of the kickstart Scheme.

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[The Chief Secretary to the Treasury (Mr Simon Clarke)]

Some 130,000 young people across Great Britain have benefited from the kickstart scheme so far, including in my hon. Friends’ constituencies. That is lower than the 250,000 jobs that the scheme could have funded, but the scheme was designed at a time when unemployment was expected to peak at 12%. The reality is that, thanks to the intervention by my right hon. Friend the Chancellor, the economy has recovered better than expected and unemployment peaked at 5.2% in 2020.

[Andy Carter]

I am grateful for that response. Last week, I went to visit Sigma, a great local business in Warrington South, which has employed nine people under kickstart, and that has made a massive difference. Can my right hon. Friend tell me what steps the Government are taking to help businesses retain young people as we approach the end of the six-month kickstart programme?

Spending Review 2020 and OBR Forecast

Andy Carter Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

Of course, it will be for the Secretary of State for Health and Social Care to do the detailed allocation of this budget, but I would point to the £3 billion for covid recovery, £1 billion of which is to help tackle the backlog of elective surgery and of screening and diagnostics, which I think will help. We have also provided £325 million to invest in new diagnostic machines, replacing about two thirds of ageing machines, which presumably helps with referrals and identification of cancer, but of course the Secretary of State for Health and Social Care will be the best person to discuss the exact allocation of the increased NHS budget.

[Andy Carter (Warrington South) (Con) [V]]

I praise the measured and sensible way that the Chancellor has approached this spending review, and I welcome in particular the infrastructure fund. With levelling up in the north of England a real priority, I look forward to discussing more projects for Warrington South with him. I am particularly pleased to see that those working in the lowest-paid public sector jobs will get a pay increase, but can he confirm that the extra police officers promised for Cheshire will be delivered so that we can tackle antisocial behaviour and protect our communities from the dreadful impact of county lines drug gangs?

[Rishi Sunak]

My hon. Friend is absolutely right about the importance of safer streets. I am pleased to tell him that this spending review makes available £400 million more for the Home Office and local policing to make sure that we can recruit an additional 6,000 police officers next year, on top of the 6,000 this year, in order to make great progress on our way to 20,000 by 2023.

Additional Covid-19 Restrictions: Fair Economic Support

Andy Carter Excerpts

Wednesday 21st October 2020 Commons Chamber

[Andy Carter (Warrington South) (Con)]

Much of the discussion in the past week has centred around support for packages in Greater Manchester, in Lancashire and in the wider Merseyside region—three areas that border my constituency. We sit, in Warrington South, at a tipping point, but still in tier 2.

It is a great shame that the political theatrics from the Mayor of Greater Manchester in the past 24 hours have been allowed to dominate the airwaves. This is not a north-south debate. All the efforts of every Member of the House should be focused on defeating the virus and protecting livelihoods, and I agree with my neighbour, the hon. Member for Halton (Derek Twigg), who said that now is the time to pull together.

Today’s debate is about economic support packages for areas with local restrictions. Given that Warrington remains an area with tier 2 restrictions, I want to highlight some of the challenges that businesses in my constituency are telling me about, while recognising some of the fantastic steps that are already being taken by the Government.

The approach that, wherever you live, be it in the north-west or the south-east, you get the same support, is absolutely the right one nation approach to take. In this country we have seen the most comprehensive economic response in the world, backed by over £200 billion to protect jobs, incomes and businesses throughout and beyond the pandemic. As the pandemic evolves, so too must our policies, and I welcome steps to support businesses forced to close due to national or local restrictions, whereby they will now receive £3,000 a month. We are also providing a £500 payment to support those on low incomes who have been asked to self-isolate.

If I may, I want to give some feedback to the Minister from hospitality businesses in my constituency in tier 2, where a ban on mixing socially with friends in a pub is combined with a 10 pm closing time. The impact has been far greater than many may have anticipated. Daniel Benson from the Hop Co bar in Warrington wrote to me, having spent thousands on creating a covid-safe environment. He now cannot operate sustainably due to the new restrictions. I have also heard from Kerry Shadwell, landlady at the Red Lion in Stockton Heath, a traditional pub in the heart of the community, with a rateable value slightly over £51,000. They were not eligible for any grants earlier and are now facing more pressures. They have seen their capacity reduce. They had to introduce table service, incurring extra costs. Understandably, they are now asking how they can continue.

Earlier in the year, I argued for sector-specific support. Now is the time for hospitality sectors in particular, in tier 2, to get sector-specific support. I ask the Minister to take the matter back to my right hon. Friend the Chancellor of the Exchequer.

Coronavirus Job Retention Scheme

Andy Carter Excerpts

Thursday 17th September 2020 Commons Chamber

[Andy Carter (Warrington South) (Con)]

I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for securing this important debate.

Protecting the livelihoods of 9.6 million people—9.6 million people who were at risk of being laid off—has been at the heart of the Government’s coronavirus job retention scheme. That support is worth £37.5 billion. Since March, employers have been able to claim up to 80% of an individual’s monthly wage, up to a maximum of £2,500 per month. The scheme has been available for any employee paid via pay-as-you-earn across the entire UK. That is 29 million people.

By the time the scheme ends in October, it will have been in place for eight months. It was designed to help us through the most challenging period. I say to the hon. Member for Leicester East (Claudia Webbe) that the Chancellor has continually adjusted the scheme, so that we do not have a hard cliff edge. She may have missed it, but from July the Chancellor allowed adjustments for flexibility of working. That was absolutely right, to help people back into business and to help companies restart their operations. In August, employers were allowed to start contributing towards some of the costs of those salaries—around just 5%—to make the scheme affordable. We need to be clear: our scheme is more generous than any other European country in terms of its coverage. It extends to all employers, not just small businesses. On payments, the Government are paying 80% of an employee’s wage, with only modest requirements for company contributions. It is more generous than other countries and we have now seen many other countries all around the globe starting to wind down their schemes. The furlough scheme was right at the time, but things have changed. We should not continue a scheme that incentivises people to be economically inactive.

So we have a globe-leading response designed to protect and retain jobs. That is recognised on the high streets in villages, towns and cities across the UK. In my Warrington South constituency, the furlough scheme has protected 15,400 incomes, helping families through the most difficult period of the lockdown. But I hear from those families that they want to return to work. They want support to get back into jobs. We know the furlough scheme has saved jobs: more than half of all employees who were furloughed have now gone back to work. That comes from Office for National Statistics data released just this week. More than 90% of those who came off furlough before the start of June continue to work for and be paid by the same employer who furloughed them. That is evidence that the scheme is delivering on its aims of saving jobs and retaining the connection between employees and their workplace.

I took time during the recess to meet the team at Warrington jobcentre, who have done an incredible job of responding to claimants in a speedy manner so that people who needed payments got them quickly. It is fair to say that without the introduction of the universal credit system, that simply would not have been possible.

The UK came into this crisis in a strong position. Warrington’s economy remains one of the strongest in the north-west, thanks to careful Conservative management of the economy over the past 10 years. We came into the crisis with public finances in a good position, which enabled us to react strongly.

It is important to differentiate between the short term and the medium term. In the short run, we need to drive a recovery, as the Government are doing, including via the tax system and through more borrowing where necessary. But in the medium term, we need to restore sustainability to our public finances. That is what the British people expect from their Government. I know the Chancellor will be looking at creative, innovative and effective ways to support our economy as we move forward.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

I congratulate my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) on securing the debate, and on her robust and eloquent speech. Like her, I want to again give a warm welcome to the job retention scheme, which has indeed operated like a lifeboat for many of my constituents and for people across the United Kingdom. I think that welcome is pretty much unanimous, but what I think Members are saying today, certainly on the Opposition Benches, is that, first, we believe there was and is room for some more people on that lifeboat, and that too many have been unfairly excluded from it. Secondly, having provided that life raft, it would be utterly nonsensical, a monumental mistake, to suddenly sink it or kick everybody off it at the end of October while we are still in very deep and dangerous waters, and a long way from safety.

The Government say that the scheme cannot last for ever—I do not think anybody in this House says that it should—but that is not a reason or justification for stopping it on 31 October. That is an arbitrary date. It bears no relation to where we are in the pandemic, or where we are in terms of opening up again and recovery taking hold. It means that an avalanche of viable jobs are just going to be destroyed. So it is disastrous for workers, bad for employers and bad news for the economic recovery. As my hon. Friend made clear, it is also bad for the Government’s balance sheet. We know that a quarter of the job retention scheme costs are recouped by the Exchequer straight away through social security savings and from tax paid by furloughed staff. As she pointed out, the analysis shows that, by extending the scheme by eight months, debt as a percentage of GDP would fall rather than increase, because of the impact it would have on growth in our economy.

[Andy Carter]

The hon. Gentleman talks about an arbitrary date of 31 October for ending the scheme. Does he have in mind a date when he would like it to end, or should it continue for ever?

[Stuart C. McDonald]

I said specifically that the scheme would not continue for ever and it cannot continue for ever, but that should be based on an analysis of the economy, where we are at and the number of jobs available. Conservative Members keep telling us that people should be looking to move into employment, but any analysis by any major think-tank says that those job opportunities are just not there at the moment, so we have to wait for a time when the economy is on a more even keel, which will not, on any indication, be by 31 October.

Support for Self-employed and Freelance Workers

Andy Carter Excerpts

Thursday 17th September 2020 Commons Chamber

[Andy Carter (Warrington South) (Con)]

I thank the Backbench Business Committee for securing this debate on an important topic. It is a topic that has featured frequently in my inbox and consistently at surgeries. I am sad that I follow my hon. Friend the Member for Buckingham (Greg Smith), because he has taken so many of the issues that I wanted to talk about in my speech. He, though, was very eloquent and said them in a far better way than I could do.

Early on in my career, I was engaged under a freelance contract, and before coming to this place I worked in a sector that used freelancers and self-employed talent, so I have a deep understanding of the issues that affect those who are self-employed. If someone works for themselves, their raison d’être to get up and go in the morning is to go out and find business—to work. When they cannot work because the Government have told them to stay at home and has locked them down, it is counter to everything they do. I represent Warrington South, an area in the north-west of England that has a particularly high level of self-employed people. More than 20% of the constituency work for themselves. It is an issue that has come to the forefront there.

As other hon. Members have done, I pay tribute to the Government for the support they have given to the 2.7 million people in this country who are self-employed, costing £7.7 billion. Self-employed people have been able to claim grants worth 80% of their average monthly trading profits, up to £2,500. It is without doubt one of the most generous schemes in the world.

I remember clearly, in late March, when we first went into lockdown, that the furlough scheme had just been announced and I took a call in my office from a gentleman called Stephen, a self-employed carpet fitter. He was incredibly concerned about his self-employed status and what it would mean for him. I remember being able to phone him back a few days later and give him the news that the Chancellor was launching a scheme to help people like him, and I remember the words he used: “Thank you, Chancellor.”

Sadly, I took a call on the same day from a couple who worked in the entertainment sector, Jo and John Martin. Jo books talent for cruise ships and John is a performer. They, too, were incredibly worried and the call I made back to them, thinking it would be positive, ended up not getting quite the same response, because the way they had constructed their self-employed operation meant that they were not eligible for anything. Today, they still do not understand. They have paid every single tax that was due, on time, all the time, but have had nothing. That is the bit that confuses and frustrates many people.

I want us to look forward; I want to see a focus in the forthcoming Budget in November on ensuring that we do everything we possibly can to encourage businesses to start up and operate. We are providing significant cash incentives to businesses to take on people and paying them £1,000 to train them up. I hope we can look carefully at what we are doing for people who want to go out on their own and set up their own businesses. I want us to make sure we have mentor schemes in place. When someone launches their own business, stepping out on their own, without the ability to wrap a monthly salary around themselves, it is a difficult time. As a Government, we need to ensure that we are ready to support those people and give them every level of assistance to get the business up and running. We need people who work on freelance and self-employed contracts to be firing on all cylinders, ready to go, and I look forward to economic support targeted in a creative way in the autumn statement.

[Several hon. Members rose—]

Protection of Jobs and Businesses

Andy Carter Excerpts

Wednesday 9th September 2020 Commons Chamber

[Andy Carter (Warrington South) (Con)]

A global leading response: just look beyond this country, and we see that this Government have delivered one of the most generous and comprehensive packages in the world, which is protecting jobs in Warrington South and around the UK with business grants, loans, rate relief, deferral of taxation, protecting people’s livelihoods and supporting businesses directly.

On Saturday, when I walked down London Road in Stockton Heath, businesses—large and small—came out to talk to me and, overwhelmingly, their response was positive. “Thank you, Chancellor,” is what they said. So how have the Government supported Warrington South? Let us start with Rishi’s dishes: 103,000 meals eaten in Warrington South, supporting pubs, cafés and restaurants—and, yes, I did enjoy it. There has been the furlough scheme supporting 15,400 incomes and the self-employed scheme supporting 3,200 homes, as well as the £126 million issued in CBILS and bounce back loans to businesses based in Warrington South. Having visited Warrington jobcentre last week, I want to pay a particular tribute to the team there who have made huge efforts to get universal credit out to those who need it quickly.

This Government’s support for business and employees is not ending, but it is important that we confront the realities of where we are today. We need to encourage employers to keep their employees on, so I fully support steps such as the job retention bonus scheme—a £1,000 bonus to every business for employees who were furloughed previously—and the kickstart scheme that kicks in to create job opportunities for young people. We need to get back to work and focus on providing new opportunities for people. Where jobs have gone, let us put all our efforts into helping those displaced get back into work. That is why I strongly support this Government’s plan for jobs. To those who argue for a sector-specific approach, I have one question: how exactly does that work—how far down the supply chain do we go?



Fortunately, the UK came into this crisis in an incredibly strong position. Warrington’s economy was one of the strongest in the north-west. Thanks to careful Conservative management of the economy over the last 10 years, we came into this crisis with public finances in a good position, which enables us to react strongly. But we should be clear that it is not sustainable to borrow at current levels in the long term. It is only right that, over the medium term, we get back to strong public finances.

[Patricia Gibson]

Will the hon. Member give way?

[Andy Carter]

I will not, because I want to let other Members speak.

It is right that we get back to strong public finances and falling debt. It is not just the sensible thing to do economically; morally, it is the right thing to do.