Furnished Holiday Lettings: Taxation

Angus Brendan MacNeil Excerpts

Wednesday 1st May 2024 Westminster Hall

[Peter Aldous]

I agree wholeheartedly. I had planned to raise a lot of the points that have been made; let me now get on to back them up with the evidence.

Since the Budget, I have been contacted by many constituents highlighting their concerns. I am grateful to them for their feedback, as well as to PASC, the Short Term Accommodation Association and the National Farmers Union for all their briefings and advice.

In some ways, I have a sense of déjà vu, in that the proposal mirrors in many ways those put forward in the 2012 Budget to tax Cornish pasties and static caravans. In his Budget speech, my right hon. Friend the Chancellor stated that he had concerns that the current tax regime for FHLs is distorting the market and that there are not enough properties available for long-term rental by local people. Therefore, to make the tax system work better for local communities, he plans to abolish the FHL regime. In the accompanying Red Book, the proposals are described as having the advantages of tax simplification, creating a level playing field and supporting people to live in their own areas. I have concerns that the proposals will not fulfil those objectives, and I hope I can illustrate why.

The Office for Budget Responsibility has calculated that the measure, along with the abolition of the multiple dwellings relief, will raise £0.6 billion of additional receipts by 2028-29. That figure pales into insignificance compared with the potential loss of value added and local jobs, which I shall outline shortly.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

I am grateful to the hon. Member for giving way and for securing the debate. In a response that I had from the Chancellor last week on this very issue, he talked about housing and the distortion for local people, but there is no evidence that if these houses went on sale they would become affordable houses by any manner of means. To echo the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael), it is many years since the housing charity Shelter told me that there were more second homes in Norway than in Scotland, but there were more first homes in Norway as well. The point is, let us have more first homes, but let us not be damaging the very weak economy of many of Scotland’s islands by doing that.

[Peter Aldous]

I thank the hon. Gentleman for that point, which he made particularly well. Hopefully, it will also come out as I move forward in my speech.

In the first instance, it is necessary for me to set out what I would describe as a few home truths and to set the record straight. First, it is important to point out that the FHL regime is not a tax loophole; it was introduced in 1984 specifically to cater for the fact that a holiday let business is very different from a private rental business. Forty years on, that remains the case, and it should be pointed out that strict criteria are in place if people wish to move into the regime.

Secondly, it should be emphasised that furnished holiday lettings are a long-standing economic lifeline for many coastal and rural areas.

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[Peter Aldous]

I do agree, and that point illustrates that this is a multifaceted problem or issue. A whole host of organisations need to sit around the table and come up with solutions that are bespoke and right for their councils or counties, or indeed for their devolved nations.

[Angus Brendan MacNeil]

The hon. Gentleman is bang on. He is essentially saying that one size does not fit all and that we should find the right solution for every place, because the current provision is a very blunt instrument.

[Peter Aldous]

I thank the hon. Gentleman for that further observation; he is right.

As I was saying, my second point is that it should be emphasised that furnished holiday lets are a long-standing economic lifeline for many coastal and rural areas. The regime supports micro and small businesses that are the cornerstone of many visitor economies. Abolishing it would hurt those businesses—including farmers who have diversified into tourism, as well as other businesses such as pubs, which rely on the lets for trade—and PASC estimates that even a modest 20% reduction in furnished holiday lets could result in the loss of £1.9 billion GVA and 46,000 jobs. The former figure is considerably higher than the Office for Budget Responsibility’s assessment of the additional tax that will be generated.

Thirdly, furnished holiday lets are not the cause of the housing crisis, as I think colleagues have mentioned. PASC estimates that a total of 197,000 properties in the UK fall within the FHL regime. Due to planning restrictions, 39% of those holiday let properties can only be used for holiday purposes. That means that 76,000 furnished holiday lets could not be used as residential dwellings, and only 121,000 furnished holiday lets have planning permission to be used as residential dwellings. The context is important: those 121,000 dwellings without planning restrictions have been established not in the past three or four years but over many decades; however, they represent 0.4% of the 30.1 million total UK housing stock and just 40% of the annual house building target of 300,000 new homes. Although there might be anecdotal evidence to suggest that private rental landlords are moving into the short-term let sector, PASC can find no quantitative data to support that conclusion. Indeed, less than 2% of traditional short-term let businesses had previously rented their properties out as a long-term let.

[Peter Aldous]

My hon. Friend makes a good point that reinforces my arguments about the unintended consequences of this proposal.

My fourth point is that there is no statistical evidence to suggest that furnished holiday lets have a disproportionate impact on house prices. As part of the consultation on the proposed introduction of the new planning use class for short-term lets in England, the Great British Holiday campaign commissioned an economic impact study by Frontier Economics on the size, growth and economic importance of traditional holiday lets in rural and coastal communities—unfortunately just in England, but I am sure that is equally relevant to Scotland and Wales. Frontier Economics found that there was no relationship between popular holiday let areas and the growth rate of real house prices between 2015 and 2022.

My final home truth is that there would be unintended consequences of a change to this taxation regime.

[Angus Brendan MacNeil]

While listening to the hon. Gentleman, it occurred to me that extended family or community members who come back home to an island often use such holiday lets—I could give personal examples from the past year of people returning from New Zealand, Canada and even mainland Scotland. Such properties have a community health aspect to them, over and above the money that they are raising in the economy.

[Peter Aldous]

I thank the hon. Gentleman for that intervention. He is correct.

The unintended consequences of this taxation regime are that there would be thousands of job losses; a proliferation of empty properties, which could not be used for long-term lets for planning reasons; and a loss of billions of pounds to coastal and rural areas. According to PASC, of its members whose businesses would become non-viable and would have to be sold, 39% believed that the most likely buyer would be a second-home owner; 37% that the property would be bought by another holiday operator; and 16% that the purchaser would come from outside the area. In short, the policy would provide very limited assistance to the group that it is seeking to support: local people looking to rent a local home.

I will finish quickly and not take any more interventions to give the Minister an opportunity to respond. I have nine questions for him. First, what is the Treasury’s evidence to suggest that abolishing the holiday letting regime will encourage a significant number of businesses to convert from furnished holiday lets to the private rented sector, so as to justify the harm that it will cause to tens of thousands of small and microbusinesses? Secondly, why was there no consultation prior to the proposal, and will the Treasury now commit to a full public consultation due to the significant number of businesses that expressed concerns subsequently? Thirdly, has the Treasury considered the potential unintended consequences of abolishing the FHL regime, including the risk that it will lead to more empty second homes in rural and coastal areas? Fourthly, if the abolition of the FHL regime results in a reduction of furnished holiday lets, what evidence does the Treasury have to suggest that this vital bedstock of many rural and coastal economies will be sustained by other visitor accommodation?

Fifthly, will the Treasury consider the recommendations of the Institute for Fiscal Studies and reverse the mortgage interest relief restrictions that have stifled the supply of the homes that renters desperately need? Sixthly, why does the Treasury consider that a bespoke tailor-designed scheme for holiday lets that has operated successfully for 40 years should now be abolished if there is scant evidence to suggest that different tax regimes have resulted in private rental landlords switching to furnished holiday lets? Seventhly, will the Treasury ensure that the abolition of the FHL regime will not result in a group of people who are essentially entrepreneurs being retrospectively taxed at a rate that is 4% higher than the top rate of capital gains tax that applies to a passive investor of listed shares?

Eighthly, does the Treasury consider that the 5,000 new furnished holiday let properties in the UK that PASC guesses may have been created annually since 2016—so 40,000 properties—have had a significant impact on the current housing crisis when compared with the 30.1 million UK homes, 1.5 million empty or vacant homes and the commitment to build 300,000 new homes each year? Finally, will the Treasury align the VAT treatment of holiday lets with that of long-term lets if the policy intention is to align the tax treatment of furnished holiday lets and the private rented sector, or will actively managed FHLs now face a more punitive tax regime than a passive private rental investor?

In conclusion, the proposal does not create a level playing field. If it is to be equitable, it will be necessary to complicate the tax system, not simplify it, and it will have a very marginal impact, if any, on enabling local people to rent homes in their local area. The industry is asking that the Treasury undertakes a full public consultation of any legislation, which I personally think is being remarkably polite.

I cannot see a case for changing the current regime. There should be no future finance Bill to legislate for these changes, and like the proposed taxes on Cornish pasties and static caravans, the proposals should be shelved. Instead, a consultation should take place so that a more targeted localised approach, as opposed to this rather blunt instrument, can be worked up by Government, the devolved Assemblies and local government. That way, more focused and localised solutions can be put in place where they are needed, so as to ensure that more properties are available for long-term rent by local people.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Tuesday 19th March 2024 Commons Chamber

[Jeremy Hunt]

I am very sorry to disappoint my hon. Friend, but Chancellors never comment on decisions made by the Bank of England on interest rates. What I can say is that the Office for Budget Responsibility predicted at the Budget that inflation would fall to around target in the next few months. That gives the best possible prospect of interest rates starting to fall.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

Last night on BBC’s “Newsnight”, it was clear that the needs of Wales, in particular on health, are not met in the UK. When has the UK Government ever given England Barnett consequentials based on needs in Wales, Scotland or Northern Ireland? Surely the model of spending under which the Government in England decides for England, and everyone else gets a consequential of that, must end. Nordic countries do not calculate spend as a percentage of their neighbours’ spend. Why is the spending of Scotland, Wales and Northern Ireland dependent on what England decides to spend?

[Laura Trott]

The Barnett consequentials formula is long established. It gives a clear framework, through which we can understand spending in the devolved nations. The hon. Gentleman will know that it means higher per-person funding in each of the devolved nations than in England.

Budget Resolutions

Angus Brendan MacNeil Excerpts

Tuesday 12th March 2024 Commons Chamber

[Darren Jones]

I would like the hon. Gentleman to explain that to the public. Given that the Conservative party makes promises at every single election and fails to deliver them, I think the public have the same question in mind.

Moving on to the confusion about this being a tax-cutting Budget, the Budget documents confirm that the United Kingdom has the highest tax burden in 70 years, and that burden rises each and every year for the next five years under the Conservatives, so overall, taxes are going up, not down. Figures from the Office for Budget Responsibility show that for every 10p extra in tax paid by working people, the Conservatives give only 5p back. That is why the public see the measures as a pre-election giveaway by the Conservatives—but it is no giveaway at all, given that successive Conservative Chancellors have taken double what they now promise to give back.

This is bad news, and not just for those already paying taxes. Tax thresholds are being frozen for the next five years, which will increase the tax take overall by an additional £40 billion, so 3.7 million people, including pensioners, who are not paying tax at all will do so by 2028-29 under the Conservatives. The tax burden is going up; Conservative Ministers are taking more in tax than they say they will give back; and more people will pay tax after this Budget, so I have to ask: why are Conservative Ministers calling this a tax-cutting Budget at all?

May I gently point out that the Scottish National party is just as bad? In Scotland, the SNP has increased taxes on working people, so that even the low paid pay more in tax in Scotland than they would in England, yet the SNP campaigns against the windfall tax on the big oil and gas companies. Are SNP Members really putting oil and gas company tax cuts ahead of tax cuts for working people?

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

rose—

[Darren Jones]

I was waiting for an intervention from the SNP. Is the hon. Gentleman an SNP Member?

[Angus Brendan MacNeil]

I am not in the SNP, but I do like a bit of accuracy and proof. The reality is that those earning under £28,000 are not paying more tax. The hon. Gentleman’s reference is a straight lift from an article in the Holyrood magazine. It was a very good article otherwise, but on that little bit, it was not very accurate at all.

[Darren Jones]

I read the article on the BBC, which I can assure the hon. Gentleman is a pretty reliable source of information. If the SNP wants to tell teachers and nurses earning £28,000 a year that they are high earners, I encourage it to do so in the general election coming up this year.

Labour first called for a windfall tax on the profits of oil and gas companies in January 2022. The Conservatives finally agreed to introduce the energy profits levy in May that year, though there were significant holes in the Government’s approach. Since then, Labour Members have been pressing Ministers to close them. Ahead of the general election, we have set out our plans for an energy profits levy if we win. We will increase the levy to the same rate of tax as in Norway, end the windfall tax investment allowances, and maintain the levy until the end of the next Parliament, with a statutory sunset clause, if there continue to be windfall profits. We have set out our plans now to give those operating in the North sea as much certainty as possible when making future investment decisions. To give further certainty, I can put on record today that we fully support an energy security investment mechanism, and we will therefore support Budget resolution 18 today.

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[Andrew Jones (Harrogate and Knaresborough) (Con)]

As this is day four of our Budget debate, much has already been said, so I will restrict my remarks to a few general comments before addressing some specific areas.

This has been a much more wide-ranging Budget than most commentators have noted, but the most positive thing that jumped out at me from all the data is the upgrading of growth forecasts. I completely recognise that economic forecasting has not been easy with all the uncertainty from the pandemic and the war in Ukraine, but I think our economy is stronger than most forecasters estimate and is regularly underestimated.

The upward revisions to the OBR forecast are large, too, with growth up by 0.5 percentage points in the months since the autumn statement. The recently published business surveys are also heading in the right direction, all indicating increasing confidence. Indeed, the main message I receive from businesses in Harrogate and Knaresborough is how hard it is to fill vacancies. The local unemployment rate, announced today, is 1.9%, which is a remarkably low figure, but it is matched in other parts of our country.

The growth in employment is a key reason our economy has been resilient. There are over 4 million more people on payrolls than there were in 2010, which is a significant achievement. Unemployment has been halved, and there are 1 million more businesses in the UK than in 2010.

As my right hon. Friend the Chief Secretary to the Treasury said in her opening remarks, the UK’s growth has outperformed that of the other major European economies—Germany, France and Italy—and is set to do so for the next five years, but our productivity has lagged badly. Indeed, the “Economic Indicators” report published by the House of Commons Library last month shows that UK productivity lags German productivity by 16%, which is a very significant gap, yet we are still outgrowing Germany. That raises the question of what the impact would be on growth if we kept what is driving our economy while addressing the productivity gap.

I am, therefore, pleased to see the Budget’s focus on productivity in both the private and public sectors, which I pursued as a Minister, particularly in the Treasury—once a Treasury Minister always a Treasury Minister—but we should define what it is. Productivity is not about working harder; it is about working smarter so that there is more output from each hour worked, not more hours worked.

The best way to drive productivity is with investment. Another encouraging stat in the Budget is that business investment has risen to 10.6% of GDP and is continuing to grow, which is very positive. It is how our future wealth will be created, and it is also a 14% increase compared with the level of investment under Labour. With GDP growth creating a bigger economy and investment taking a bigger slice, the budget involved is measured in the tens of billions. The permanent expensing announced in the autumn statement is a huge factor, and I strongly welcome the commitment to extending it to leasing. This is all about making the UK more competitive and an even better place to invest and grow a business.

One area that has not received the attention it deserves over a number of years is public sector productivity The delivery of good public services requires several components. One of them is budget, as the total amount spent matters, but it is not just the total amount spent. It is also about how well the money is spent.

There have been huge increases in public spending, so we need to ensure transparency and accountability. We also need to ensure that funds are directed to where there is the greatest return and the greatest need, and that taxpayers achieve value for their money. There is plenty to be done on that, particularly on infrastructure, where the Government are investing so heavily—that is a different speech, but I refer the House to the excellent work of the all-party parliamentary group on infrastructure, which I coincidentally chair.

It also requires the Government to make the right policy choices. For example, there is a less than 2% difference in per pupil funding between England and Wales, but English schools are rising up the international league tables for maths and science, and we are the best in the west for reading. Wales is sadly going down the league tables, and it is now ranked in the mid-30s. The financial difference is a world away from the ranking difference, and it comes down to policy choices.

[Angus Brendan MacNeil]

The hon. Gentleman is talking about education outcomes. I do not know whether he saw “Newsnight” last night, but a teacher in the city of Paisley in Scotland linked bad behaviour in the classroom to hunger. The teacher also spoke about the difficulty of getting good educational outcomes amid poverty. Is it not a fact that Department for Work and Pensions policies that keep families in poverty, including the two-child cap, add considerably to the problems in Wales? It is a matter of poverty, not education.

[Andrew Jones]

I did not see “Newsnight” last night, as I was here until very late. I was working away, as ever. Our benefits system has not held back the educational progress being made in England so, without having seen the programme, I suspect that other factors are involved.

The productivity of our public services remains below pre-pandemic levels, which suggests that the full value of budget increases is not being realised. It was, therefore, good to hear the announcement of a public sector productivity plan in the Budget. This important initiative has the potential to be a game changer. The National Audit Office suggests that a 5% increase in productivity is equivalent to a £20 billion budget increase.

The Budget detailed investment to upgrade IT in both the justice system and the NHS. The Chancellor revealed that 13 million hours are lost by doctors and nurses to outdated IT. The sheer scale of that is phenomenal, but not in a good way.

Governments of all colours have struggled with NHS IT for years, but the world is digitising. AI will change things even further and faster, and it is right to embrace these changes and secure the benefits they will bring. It is not just about the systems but about the processes used, and there is an attitudinal element as well. We have to think about how output will be achieved. In the world of government in the UK we tend to measure, then trumpet, inputs rather than outputs. That does not happen in the private sector. Moving that thinking into the policy and delivery teams so that they think more about outputs is critical in the longer term.

The most encouraging parts of the Budget tackle investment and productivity. Progress on those will create more wealth and better health for our future, which is why I will be supporting this Budget.

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[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

Tapadh leibh, Mr Deputy Speaker. I am using Gaelic like Cillian Murphy did at the Oscars—the Celtic tongue is everywhere these days. May I also welcome members of the Inter-Parliamentary Union, who are watching our proceedings?

I will start with a quote:

“I don’t want to rule or conquer anyone. I should like to help everyone—if possible—Jew, gentile, black man, white. We all want to help one another. Human beings are like that. We want to live by each other’s happiness, not by each other’s misery.”

That is from the last speech of Charlie Chaplin’s film, “The Great Dictator”, filmed in 1940. Too often nowadays, 84 years later, we are seeing the misery of others among us in the UK, where food banks and child poverty are far too commonplace. The hon. Member for Rochdale (George Galloway), who is no longer in his place, mentioned two wards in his area where 50% of children live in poverty. He also mentioned his predecessor, which was very worthy.

Young people in our countries cannot get houses. Their rents drain their savings for a deposit and leave them trapped. On “Newsnight” last night, a teacher in Paisley, Scotland said that there was a link between pupil behaviour in the classroom and hunger and perhaps even nutrition. How can we make society more productive when educational outcomes are blighted by DWP policy and spending choices?

The roots of this go back to 2008—perhaps not the crash but certainly the response to it and the fixation of then Chancellor George Osborne on austerity. He really did misunderstand the debt to GDP ratio. He thought only of debt, leaving the UK like a farmer saving money on seeds in spring, not investing, and then wondering why there was no harvest in the autumn. He had a short-term political slogan, which some here might remember: “long-term economic plan”. As ever, however, there was no plan. This is the autumn, there was no investment and the harvest is scarce.

The Resolution Foundation pointed out in December that the average worker in the UK is earning £10,700 less than their equivalent in a host of developed countries in Europe, North America, New Zealand and Australia. This has been compounded by Brexit taking GDP down by about 5%, and talks of a trans-Pacific partnership gave nothing back because that is trade with paperwork and bureaucracy and only a 0.2% to 0.8% gain in GDP. Members talk of people keeping their hard-earned cash, but it is harder-earned cash as a result of some of the choices that have been made in the UK. Filling out forms does not productivity make.

In Iceland, the crash was over by 2013, which was 11 years ago. I am chair of the all-party parliamentary group on Iceland and have met the Central Bank of Iceland several times. It now complains of too much growth in its economy and its head banker has his head in his hands. Things are so different in the UK. Ireland seems similar to Iceland, as do Norway and Denmark. The countries surrounding Scotland are very different. Their populations will grow by 2050, but if Scotland is still in the UK, its population will decline. My constituency will experience that decline most of all. It is unnecessary and will be as a result not of destiny but of choices. It is not about geography or demographics; it is about policy.

In “The Guardian” last week, Gary Stevenson, a former City trader, wrote that

“the budget is for ordinary people. The mega-rich look on and laugh…traders know the rich will get richer and the poor will get poorer.”

The blight is all over society. Sky News reported over autumn that parents were stealing infant formula milk, such was their desperation. Reports are being written and commissioned on food insecurity in what is known as a G7 country.

The basic facts about the UK’s finances are that it has borrowed every year bar 11 since 1945, and has not paid back much of that money; it has been in surplus for only 11 years, and has paid back about 1.7% of the debt attributed to it. Those are the facts, but maybe they do not tell the whole story, because the world has not ended. However, they undermine the fiscal rules that various parties and Oppositions have, which are not actually necessary and are causing the misery of others. In my view, the UK has had two pivotal moments that have led us to this point—moments of quantitative easing, or if you like, the printing of money. As the American economist J. K. Galbraith said, the process by which money is created

“is so simple that the mind is repelled.”

Those moments were, of course, after the crash and around the pandemic.

The problem is that rather than people being helped with their mortgage, as they were in Iceland—that would perhaps be called flood-up economics, the opposite of trickle-down economics because it works—in the UK, the poor have lost out hugely, and the rich have accumulated the money that was created by the Government on a whim. As Gary Stevenson said in his article in The Guardian last week:

“The next year, 2011, I placed a bet. It was a bet that the hundreds of billions of pounds of economic stimulus being poured into the UK and US economies would not reach the people who needed it. It would settle in the pockets of the richest, who would use it to buy the homes of the poor, and the economy would never recover. That year, I was Citibank’s most profitable trader in the world. They paid me $2m and asked me to do it again. It was around about then I realised the whole economic system wasn’t working.”

That is why we are where we are, and why the Budget is what it is—nothing very huge, and quite delusional, as has been said before. It also explains why councils and devolved Governments are short of money.

It is worth remarking that devolution only works one way in the UK. We get told in Scotland that we have two Governments, but devolution does not work like that. It works depending on England’s needs: when England’s one Government decide that they need to spend on something, there are consequentials for Wales, Scotland and Northern Ireland. If Wales needs money for health, England, Scotland and Northern Ireland do not receive consequentials. That is a fundamental problem with the UK. I would also say to the SNP, and to the SNP Government in Edinburgh, that there is so much they could do to change the situation. They have the power in their hands to call an unscheduled Holyrood election whenever they want, and put the matter of independence before the people. If they did so, I am confident that Scotland would choose to leave all I have described; we would be an independent country and could have a different demographic outlook, particularly for Na h-Eileanan an Iar. These matters are very important, and Holyrood should think about doing that and doing it soon.

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[Bim Afolami]

I thank the hon. Gentleman for that point. If he looks in the Red Book, he will see that the forecast for the next spending review period is that real-terms spending on public services—the whole House should hear this, because I have heard lots of discussion from Opposition Members about cuts and slashing—will go up every year by 1% in addition to inflation. We are building on a stable foundation for that growth. Against the backdrop of economic uncertainty, business investment—one of the chronic difficulties for our economy for generations—grew last year, and will be about 11% of our GDP this year.

At the Budget, we outlined next steps on the autumn statement’s £4.5 billion funding package for strategic manufacturing, which many Members mentioned, particularly the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill). That delivers the next stage of expansion for our high-growth industries.

To complement that, we are committed to ensuring the UK has the most attractive investment tax regime of any G7 or large European country. We have the lowest corporation tax rate in the G7. At the autumn statement, to complement that support for business and for growth, we announced that we would introduce permanent full expensing, which allows companies to claim, in the first year, 100% capital allowances on qualifying investments. At this Budget, the Chancellor confirmed that draft legislation on extending full expensing further to assets for leasing will be published shortly. I am very glad that my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) and the hon. Member for Gordon (Richard Thomson) supported that investment.

The theme of today’s debate—improving productivity—was barely mentioned by Opposition Members. I echo what the Chief Secretary to the Treasury, my right hon. Friend the Member for Sevenoaks (Laura Trott), said in her opening speech: when it comes to our public services, what the public care about is whether their services improve. That means focusing on outcomes, not just inputs. Opposition Members are very, very fond of talking about inputs and how there are apparently there are all these cuts—this slashing and burning of public services—but they are not very fond of talking about our productivity plan and how we are investing to improve outcomes. I will tell you a secret, Mr Deputy Speaker: the reason they are not fond of it is that they know it would upset their union paymasters. That is why they do not want to talk about it. They do not believe in better public services, which would mean better value for money for the taxpayer, because they do not believe in better value for money. They do not believe in better support for frontline workers to actually do their jobs properly because they just want more money for their union paymasters. They do not believe in better results. They talk the talk but refuse to walk the walk, because they do not understand what it is to take any tough decisions.

I agree with something that the hon. Member for Ilford South (Sam Tarry) said. He said that we cannot cut our way to prosperity, and I agree. That is why we are investing in our productivity plan and investing comprehensively in the NHS, as my hon. Friend the Member for Watford (Dean Russell) set out compassionately and powerfully.

[Angus Brendan MacNeil]

Will the Minister give way?

[Bim Afolami]

I will make some progress, and then I will give way.

From upgrading computer systems to using artificial intelligence to automate tasks, we will upgrade the NHS’s technology for the 21st century. That is only part of our programme of reform to bring the whole of Government into the digital era and generate productivity improvements, including through structural investment—and what a win it would be. The National Audit Office and the Office for Budget Responsibility, bodies that Opposition Members are always terribly keen to quote—[Interruption.] They should listen to what they have said about productivity and outcomes. The OBR says:

“Raising public sector productivity by 5 per cent”,

which will bring us back to where we were before the pandemic,

“would be the equivalent of around £20 billion extra in funding”.

That is why we are doing it. That is why the work that my right hon. Friend the Chief Secretary is doing is so important.

Before I conclude, I think we can all agree, including Opposition Back Benchers, that it is impossible to know where the Labour party stands on anything these days. We used to know where it stood. The sad thing about the one concrete plan that it did have is that there was a document listing all the projects under the £28 billion and going through every constituency. That was the only plan they had, but they have dropped it. They should talk to the right hon. Member for Doncaster North (Edward Miliband) as to whether he is happy about that.

Labour Members are confused and I feel sorry for them. [Interruption.] The hon. Member for Hampstead and Kilburn (Tulip Siddiq) is chuntering from a sedentary position, but I am coming to her next, don’t worry. Labour is so confused that, by the way she was going on, one would think that she was a disciple of Peter Thorneycroft and Nigel Lawson. She was so keen on low taxes and sound money that I almost wanted to invite her to join us on the Government Benches. But then I remembered something: in one of her first acts as a Labour MP, she decided to mount the barricades and nominate the right hon. Member for Islington North (Jeremy Corbyn) for leadership of the Labour party. I wonder whether she has told the Leader of the Opposition that that is where her heart lies.

Look, I do not want to be mean spirited—it does not suit me very well. It might surprise you, Mr Deputy Speaker, to learn that I actually rather admire the right hon. Member for Islington North. He believes in things and has ideas, unlike the shadow Treasury team, who do not even have the semblance of a coherent plan or any beliefs at all, as it turns out.

We know that this will not bother the shadow Chancellor. Where is she, by the way? She is probably too busy on her smoked salmon offensive in the City of London, pretending to love bankers, to have time to think of any new ideas.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Tuesday 14th November 2023 Commons Chamber

[Jeremy Hunt]

I have a very small bone to pick with my right hon. Friend, because when I became Chancellor I was hoping to say that I was the first Chancellor who was once an entrepreneur, but he pipped me to the post. However, he is absolutely right to say how important it is to have competitive business investment taxes. I was very proud in the spring Budget to introduce full expensing for three years, which gives us some of the most competitive business taxes in the OECD. Only five other countries do that, and I will of course keep under review any possibility to extend that tax break.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

Is investment not needed in the UK given that 13 years of Tory rule have resulted in a £137 billion UK deficit? Meanwhile independent Ireland has a €10 billion surplus from its economic growth and investment. That is an Ireland without the oil or natural resources of Scotland, which is now about to start a sovereign wealth fund. Where did the failing crisis-hit UK go wrong and independent Ireland go right? The clue, by the way, is in the question.

[Jeremy Hunt]

I find that a very curious question. If the hon. Member is proud of Scotland’s natural resources, why does he want to cancel North sea oil and gas exploration, which is the very thing that can give families across the United Kingdom security from the energy shocks we have seen from things such as the invasion of Ukraine?

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Tuesday 7th February 2023 Commons Chamber

[Jeremy Hunt]

My hon. Friend is entirely right. It is because we took difficult decisions to reduce the deficit by 80% in the period leading up to the pandemic that we were able to allocate £400 billion of help to families and businesses during the pandemic and £99 billion to families during the energy crisis, which means an average of £3,500 per family this year and next. There is a phrase for that: it is “fixing the roof while the sun is shining”.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

A plethora of economic statistics highlight UK inequality and how it affects households. In Ireland, the poorest 5% of the population are 63% richer than their equivalents in the UK. In France, the lowest-earning third earn 20% more than their UK equivalents, while the middle-income third earn 25% more. Low-income households in Germany are 21% richer than those in the UK. No wonder the workers are striking! Why are the Government maintaining a system that keeps workers in the UK poorer than their equivalents in France, Germany and Ireland? Why are they not paying the workers, and why are they not sorting out the strikes?

[Jeremy Hunt]

That is exactly why we are taking difficult decisions to give this country a high-skill, high-wage economy—measures that the Scottish National party opposed at every step.

Autumn Statement

Angus Brendan MacNeil Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

Absolutely, because the NHS as it stands at the moment would fall over without the brilliant contribution made by doctors and nurses born or trained overseas. I think it is about 24% of doctors in the NHS at the moment. We always welcome international exchanges, but in the end a huge health organisation such as the NHS—the biggest health organisation in the world—should be training the number of doctors and nurses that it needs itself. With a 2 million shortage of doctors worldwide, there is no other alternative.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It is funny that the same Tories, who are today congratulating the Chancellor, 55 days ago lined up to congratulate his predecessor on the disastrous mini-Budget of what he correctly described as the “English Government” —a sign of things to come. However, the question that is being asked by people in Lewis, Harris, Uist and Barra is: when exactly are the Government paying the off-grid fuel support for the likes of those with central heating oil? It is now mid-November. We need the dates, and we need this to happen.

[Jeremy Hunt]

We do, and we are working on that. We will make sure it is paid as quickly as possible.

The Growth Plan

Angus Brendan MacNeil Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend is absolutely right. There is a huge pool of talent that needs to be brought into the labour market. Every Government, and our Government in particular, should be focused on trying to bring more people into the labour market.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The Chancellor is a midwife to profiteering by energy companies on the public’s credit card. He has done very little, as my friend the hon. Member for Ceredigion (Ben Lake) said, about rural and island places that depend on heating oil. People in my consistency have an electricity unit rate of 33p, which is 10% higher than the 29.6p in London. The standing charge is 51p in my constituency, a staggering 60% higher than the 32p in London. Those are yesterday’s figures from E.ON. This UK Government are highwaymen stealing from energy-rich Scotland. It is a disgrace, and this Chancellor should conduct himself far more fairly. As has been said, this statement is something for the rich and not for the deserving.

[Kwasi Kwarteng]

I reject that. The hon. Gentleman will know that, when I was Secretary of State for Business, Energy and Industrial Strategy, I was very focused on bringing the renewables pot to remote island wind. We achieved great things by working together, and I hope we can continue that dialogue in my new office.

Oral Answers to Questions

Angus Brendan MacNeil Excerpts

Tuesday 28th June 2022 Commons Chamber

[Lucy Frazer]

The Chancellor is looking very carefully at this industry, and he engages with industry stakeholders. My hon. Friend the Member for Waveney (Peter Aldous) will know that there are a number of ways in which the tax system supports low-carbon energy infrastructure, including through the super deduction, research and development tax relief, our consultation on broadening the emissions trading scheme, and the £1 billion investment in the carbon capture and storage fund.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The rural fuel rebate was introduced 10 years ago at 5p a litre and remains unchanged. With inflation and the cost of living crisis, what thought has the Treasury given to increasing the rural fuel rebate to at least 10p a litre?

[Helen Whately]

The hon. Gentleman is probably talking about the rural fuel relief scheme, which is specifically targeted at a small number of locations where fuel prices are much higher than the national average, perhaps because they are a long distance from the refinery. In proposing an extension to the scheme, he should consider the potential unintended consequences. For example, people might drive out of their way to go to a petrol station in these rural areas.

Downing Street Parties: Police Investigation

Angus Brendan MacNeil Excerpts

Tuesday 25th January 2022 Commons Chamber

[Michael Ellis]

I can assure my hon. Friend that full co-operation will be accorded to the police as and if they ask for it.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It is quite clear that, even after this, the Prime Minister does not want to leave No. 10 Downing Street, but do we not face the possibility that the UK’s PM might eventually be leaving No. 10 Downing Street in police handcuffs?

[Michael Ellis]

No.

Cost of Living Increases

Angus Brendan MacNeil Excerpts

Monday 24th January 2022 Commons Chamber

[Douglas Ross]

I am grateful for your generosity, Mr Deputy Speaker, and I will begin to conclude my speech.

It is interesting that the Scottish National party uses such tactics when the hon. Member for Glasgow East (David Linden), who introduced the debate, cannot stand up against the party in Holyrood and say that its cuts have affected the cost of living in Scotland.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

On a point of order, Mr Deputy Speaker. If the hon. Member for Moray (Douglas Ross) sits down, how is that an SNP tactic?

[Mr Deputy Speaker (Mr Nigel Evans)]

Well—I call Douglas Ross.

--- Later in debate ---

[Ben Lake]

I thank the hon. Gentleman for that intervention. Like him, I represent a rural constituency, where concern about rising petrol and diesel costs is bearing down heavily on families. For people in Ceredigion private cars continue to account for the overwhelming majority of commutes. Indeed, in Wales as a whole about 80% of people have to commute by car. Sadly, for people in Wales, and particularly in rural areas, there is no short-term alternative to using private cars, so those rising fuel costs are having a devastating impact. Of course the long-term solution would be greater investment in public transport infrastructure, but, as an MP representing a rural area, I know how devastating cuts to bus services have been in the last decade so, sadly, for the time being using the bus instead of a private car is not a viable option.

The crisis has also demonstrated the need for longer-term action, such as action to boost productivity, and green solutions to help address the energy supply emergency and in so doing to alleviate stagnating living wages. We can ease the crisis in the long term by reducing energy demand. We have discussed that often in this place and debates have also been held in the Senedd in Cardiff. If we reduce fuel and energy demand, we also reduce fuel bills.

A good place to start is with the simple measure of improving household heating efficiency. At the autumn Budget I called on the Chancellor to make a £3.6 billion investment over 10 years, in conjunction with the Welsh Government and the private sector, to improve home insulation in Wales. It is well-documented that the quality of Welsh housing stock is poor by both British and European standards, and its energy efficiency is, sadly, a sight to behold. Introducing measures to improve the heat and energy efficiency of our homes would not only boost employment in areas that are desperately in need of levelling up through the retrofitting schemes, but would also address fuel poverty. A report by the Future Generations Commissioner for Wales has suggested that with such a package of investment over 10 years we would be able to end fuel poverty in Wales, producing average annual savings of £418.

[Angus Brendan MacNeil]

One great problem is inequality —there is always a fuel poverty issue in good times as well as bad times in the United Kingdom. I was Chair of the Energy and Climate Change Committee. We visited the Technical University of Denmark in Copenhagen and a Conservative member asked an academic there about fuel poverty in Denmark; the response was, “In Denmark, folk can afford stuff.” There is a structural problem in the UK in that the problems are not always acute but are always there.

[Ben Lake]

I agree with my hon. Friend. He makes an important point. Those who had the fortune of being able to listen to the debate in the Welsh Grand Committee last week will have heard that this matter as it relates to Wales was looked into in great detail. Sadly, we have a situation where, too often, I can walk to a petrol station in London, for example, and the price of energy, of petrol from the pump, is the same or cheaper than it is at a place in Felinfach in my constituency, and yet London has the benefit of the tube, the overground and regular bus services, whereas Felinfach is lucky to have two services a day.

To conclude—I have spoken for some time already—we must also bolster local renewable energy supply if we are serious about tackling the longer-term issues of our fuel and energy supply. In closing, I raise Plaid Cymru’s call for the devolution of the management of the Crown estate in Wales. Simply put, with many colleagues from Scotland in attendance this afternoon, if Scotland can, why not Wales? Devolving the management of the Crown estate in Wales would bolster Welsh revenues, increase our bargaining power with the private sector and support renewable energy deployment, all the while ensuring that the communities in which this energy is generated will be where its benefits are enjoyed the most.

In sum, the Government need urgently to do more to tackle the immediate crisis. The cost of living crisis is worsening, not abating, and households and businesses need support now—but let us not forget about the longer-term action that is required if we are not to find ourselves in this situation again in future.

[Jerome Mayhew (Broadland) (Con)]

I am grateful to the SNP for calling this debate. As parliamentarians, it is absolutely right that we should debate in this Chamber the issues that are of most importance to our constituents when those issues are high on the political agenda, so I am grateful for the opportunity to talk about the cost of living and what we can do about it.

In the opening remarks of the Chief Secretary to the Treasury, we heard the long list of targeted assistance that the Government are providing. I will come back later in my speech to dwell on some of those. Overwhelmingly, however, the best solution for cost of living squeezes is high levels of employment and increased levels of pay when in employment. It is because of the Government intervention in response to the covid pandemic that we have an employment field that is so strong at the moment.

The Government intervened right at the start of the pandemic to save jobs through the furlough scheme, which supported more than 1 million jobs in Scotland alone, and other schemes, from the self-employment income support scheme—I refer to my entry in the Register of Members’ Financial Interests—to the business bounce back loan scheme to CBILS, the coronavirus business interruption loan scheme. Those saved thousands of jobs, including in the business of which I formerly had the honour to be managing director. Without a CBIL, that company—which employs more than 1,000 people, including several hundred in Scotland—would likely have gone to the wall. It has not and is now growing again—probably because I am no longer directly involved in it—and it is creating many hundreds more jobs, here and in America.

The impact of all that is that we did not suffer from 12% unemployment, which was the estimate of economists at the time. Now, as we leave this dreadful pandemic behind us—I hope—we have 4.2% unemployment throughout the country. In my constituency, it is at about 3.2%. Instead of having a jobs crisis in which people need jobs, the crisis in Broadland is the lack of people to fill the jobs available as our businesses grow.

It is always better to have good jobs with rising wages —which I will come on to—than to rely on a statist solution of increased benefits under universal credit, with the exception of the taper rate. The reduction of the taper rate from 63% to 55% should make good tabloid headlines. All those involved in that part of the economy know the importance of that injection of about £2 billion into the pockets of those who are least well off, as they move from benefits into employment. That is incredibly important, and I am grateful to the Government for focusing their firepower on the taper rate, rather than on the attention-grabbing £20-a-week part of universal credit, because that is where it can do most good.

There is now more employment in this country than in pre-pandemic times—over 400,000 more jobs—and we should celebrate that, but employment is only the first issue. The second is the amount people are paid when they are employed. I have already referred to the universal credit taper rate, and we should not underestimate how hugely important it is, but the other factor is the hourly rate people receive for their work.

[Angus Brendan MacNeil]

The hon. Gentleman is right that it is not so much about jobs as about earnings. Does he think the average worker would be better off in the UK, or in one of the Nordic countries, such as Norway or Denmark?

[Jerome Mayhew]

There is a trade-off between earnings and taxation: what people get to take home. I do not have the data, and I confess I do not know the full tax rates in Nordic countries, but I can say that the hourly rate in this country has risen consistently under this Government because of the national living wage—a Conservative Government development. The most recent rise of 6.6%, to £9.50, well above the forecast average inflation rate of 4% for the rest of this year, is the latest in a long line of above-inflation hourly rate rises under the national living wage.

From my local experience, I see the localised wage pressures to attract new staff in my constituency. Numerous businesses I have spoken to have told me they are raising their hourly rates above minimum wage to attract good new staff. There is a whole swathe of businesses, like the one I had the honour previously to lead, where, although the hourly rate is not the national living wage, it is in some ways pegged to it. The national living wage has a positive effect on hourly rates right across the economy.

--- Later in debate ---

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

Duly warned and noted, Madam Deputy Speaker. I will not take up much of the House’s time—I am sure that will delight SNP Members more than anyone else—because up and until the hon. Member for Edinburgh East (Tommy Sheppard) spoke, I was struggling for something to say in this debate. The hon. Member for Glasgow East (David Linden), who led the debate, is a passionate campaigner for combating poverty in his constituency and around the country, and I know how hard he works on behalf of his constituents to alleviate the burden that so many people find themselves under across this country.

However, the problem is this: the hon. Member for Edinburgh East said that we would not find any reference to independence in this motion, and he is right, but unfortunately, it does refer to the

“rising costs of the UK leaving the EU”.

Unfortunately, we cannot get away from the deep irony of Scottish National party Members coming here today to talk about the cost of living crisis, which genuinely is one of the most important things we can speak about at this time, and the cost of leaving the European Union while making no reference to the inordinate cost and huge challenges that would be put on businesses and individuals in Scotland if it were to separate from the rest of the United Kingdom. They cannot make one case to answer that.

[Angus Brendan MacNeil]

Is the hon. Gentleman saying that walking out of a trade bloc and increasing red tape, meaning that the UK has to have paperwork with every country that it exports to, is the same as repatriating political powers? Is he saying that Ireland or Finland are not independent, because if he is, he will be laughed at all over Europe?

[Andrew Bowie]

The hon. Gentleman knows very well that separating Scotland from the United Kingdom would be far more than just repatriating powers to Holyrood; it would be the break-up of an economic, political and social Union that has been in existence for 300 years and, in fact, it would make Brexit look like a cakewalk. I understand the concerns of the hon. Gentleman, who stands up and fights for, for example, his exporters and fishermen, who are struggling with some of the burdens that Brexit has brought—I have said openly that I recognise that—but that is as nothing compared with the burden that independence would put on businesses and people in Scotland.