(5 years, 2 months ago)
Commons ChamberThat is absolutely right. This legislation means that people will be able to buy puppies directly from a breeder or from a rehoming centre. It is vital to recognise that those who bring a rehomed puppy or kitten into their home are really looking after the welfare of that animal. Their efforts should absolutely be praised, and I am pleased that my hon. Friend has done that today.
The activities of these unscrupulous breeders are bad for buyers and also bad for the countless good breeders in this country whose reputations and businesses are at risk when the actions of others less decent than themselves threaten the integrity of the sector overall. That is why we are taking action today, just like we did yesterday.
I would like to thank the brilliant campaigners and animal lovers who have helped to bring this positive change before the House today. The Lucy’s law campaign has been championed by vet and campaigner Marc Abraham and his fellow campaigners at Pup Aid. Lucy’s law is supported tirelessly by organisations big and small, including the Royal Society for the Prevention of Cruelty to Animals, Mayhew, Cats Protection, Battersea Dogs and Cats Home, and the Dogs Trust, all of which do so much to strengthen animal welfare across the country. I should also highlight the important work and support of the all-party parliamentary group on dog welfare so ably chaired by the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who is in her place.
This decision to ban third-party sales of puppies and kittens followed a call for evidence in a public consultation that received over 6,500 responses, of which no fewer than 96% supported the proposal. The call for evidence was launched in response to an e-petition that called for a ban on the sale of puppies by pet shops and other third parties. The petition received over 148,000 signatures and triggered a debate in the House on 21 May 2018. This further demonstrates how Parliament and this Government can respond to public concerns.
Does my hon. Friend agree that we also have to stamp down on those who steal puppies to order? Many puppies are taken from outside people’s houses, outside shops and the like simply because there is a market for them. This measure makes the market more regulated, and that can only be applauded.
I thank my hon. Friend, who makes another really good point. Absolutely—this will help in that dimension, but there is also more that we need to do to make people more aware of where they are sourcing their puppies. We need to do more to tackle puppy theft and dog theft. We will be working on that with various campaigners in the months ahead.
(5 years, 5 months ago)
Commons ChamberIt is a pleasure to follow the hon. Member for Heywood and Middleton (Liz McInnes). This debate has been very good humoured, and it is a pleasure to take part—I’m fed up with this place at the moment! Beer duty has been mentioned, and I should declare an interest: the headquarters of the Campaign for Real Ale, which is in the forefront of the campaign on beer duty, is in my constituency. However, I want to focus on pub business rates.
Generally speaking, people do not go to the pub to get drunk these days. There are so many other things: some pubs run mini-libraries or toy libraries, while others run campaigns to support local people in need or help charities. Some hold darts matches. They are a focal point for many people who have nowhere else to go to meet friends and can be a place for celebrations with relatives as well. A pub is so much more than just the price of the liquid in the glass, and we really have to get that over. That is why I want to focus on the premises in which the liquid is served. A reduction in beer duty would be good, but as a wine drinker I want to focus on how we keep pubs in business so that we all have somewhere to go.
I took part in the previous, very well attended, debate on this issue in Westminster Hall. I am trying to get a meeting with the Financial Secretary to the Treasury to raise this important issue and some of my constituency’s pubs and landlords have come to meet my hon. Friend the Exchequer Secretary to the Treasury, who is on the Front Bench now. But the reality is that those people do not feel that there is a real awareness that the much welcomed reduction in business rates will not reach all the parts that other beers cannot reach. In my constituency, the reduction reaches a mere 50% of the pubs, on average. Many of the pubs have contacted me about a massive hike in business rates; they have to cut staff or close their businesses altogether. That cannot be the message that the Government intended to send out.
This, of course, is not the first time we have had a debate about pubs; we have had them for years, although we never seem to make much progress when it comes to their taxation. The other affected area is the working men’s clubs, a lot of which are now dying out. It is important that the Treasury has a good look at the situation to see whether it can help pubs. At the end of the day, pubs are a catalyst for the community. The hon. Lady is on the right track.
I am pleased that the hon. Gentleman mentioned the community aspect in his valuable intervention. Some pubs threatened with closure are taken on as community assets, but it is incredibly hard to make the business case, given how business rates are. No matter how willing the community is, there are only so many pints of beer that anyone can drink to help provide the income it needs, unless we want to encourage people to be blotto night and day. We have to ask whether the business model is workable, and for many pubs it just is not.
The cut of 33% in rates for businesses with a rateable value of under £51,000 was a major step, but in areas such as St Albans it is not having an impact. Areas with high property values such as St Albans are almost totally overlooked. Many people have mentioned heritage and beautiful buildings: pubs in my area are under a huge threat of being turned into domestic properties. That is a real worry. They are struggling at the cliff edge, and we have to address the issue now.
The 2017 business rates formula for pubs uses a methodology for setting the rateable value based on fair maintainable trade. Nobody seems to understand how that works. The rateable value is driven mainly by the pub’s turnover and it takes into account property valuations. That means that even small pubs in St Albans are having huge hikes in business rates because they happen to be settled among much higher-value domestic properties. The formula does not take that into account, so it penalises small business operators.
The hon. Member for Keighley (John Grogan) mentioned micro-breweries: the formula also penalises the independents, which is a real problem. We may lose some of the quirky pubs on our high streets that offer that level of interest and difference and prove a huge pull for tourists who come into areas such as St Albans and appreciate pubs such as The Boot and Ye Olde Fighting Cocks, many of which have historic backgrounds and architecture to match. That means that it is difficult to expand or increase footfall, because they are extremely small.
Save UK Pubs has compiled a useful document outlining the increases that pubs face. I have given it to the Minister before, but I will send it to him again in case he has lost it. The Boot, which I have just mentioned, is an absolutely tiny heritage pub—some people have bigger sitting rooms. People there reckon they would have to sell an additional 22,000 pints to cover the additional £51,000 in business rates that they now have to pay—a 280% increase. That is unsustainable.
If the Chancellor came up with the model, he certainly was not looking at St Albans when he did. Christo Tofalli of Ye Olde Fighting Cocks told me that unless there is proper reform of the relevant taxes, licensing laws and duty costs, his pub will be finished. He bought this beautiful, historic pub; people can work out from its name that it goes back a long time. Bringing it back to life has cost him a huge amount of personal investment. Having pulled it back from despair, he expects people in this House to get how important a pub is. It is not necessarily a drinking outlet—there are plenty of those. A pub is family to some people and part of the community to many people. Once it has been turned into a posh house, as happens in my constituency, it will never come back. I put in a plea for the Minister not to hide behind all the different things that have been done. It is not enough, and we need to look at the situation again.
I agree with my hon. Friend. Given the increased consumption of cider and the increased tax revenues from it, I would have thought there was a case for looking at the relative taxation levels of the two drinks.
Business rates have been mentioned. I will not go over the details, but we have a ludicrous situation whereby someone who invests in their business and increases their turnover often gets a huge increase in their business rates as well. One example given to me involved somebody who took over a pub that had traded at £200,000. He raised that to £700,000 but then found that his business rates had gone from £8,400 to £37,000. He did get that reduced to £24,000, but the mere fact that he had such a big increase and that it was then revised would seem to demonstrate that the process for evaluating business rates is deeply flawed. I recognise the Government’s attempts to do something about that, but we really need a comprehensive review of business rates so that they are geared in such a way as to promote and reward investment rather than penalise it.
The hon. Gentleman is absolutely right. I have had similar experiences, with pubs putting in the investment and then finding themselves penalised. However, they say that when they put in a challenge, it takes a long time and it is difficult to get an explanation as to why the final figure is arrived at. There is not the transparency over the rateable system that there should be.
I totally agree. The process is opaque and would often appear to be perverse as well. There is a big case not only for revising it but for making it far more transparent so that anybody investing in their business can get a clear idea of what the potential financial penalty—if that is the word—would be on their investment.
I want briefly to touch on the pubs code and the Pubs Code Adjudicator, which my hon. Friend the Member for Chesterfield (Toby Perkins) mentioned. I am the former Chair of the Business, Innovation and Skills Committee, and a member of its predecessor Committees, and we examined time and time again the relative balance in power between the pub tenant and the pub owner, as well as the relatively low level of income that tenants running even the most successful pubs obtained from all their efforts, relative to the revenues accrued by the pub-owning business.
The pubs code was agreed by the Secretary of State for Business, Innovation and Skills in the previous coalition Government, and I give him credit for that. A Pubs Code Adjudicator was appointed to adjudicate and to try to ensure that there was a fair balance of risk and reward between the two parties. It is fair to say that the appointment of Paul Newby was controversial, and a lot of concerns were raised. On the basis of the evidence we are getting back from tenants, those concerns were well founded. The changes do not seem to have affected the rate of pub closures whatsoever; indeed, the number of tenants who are still finding that the reward they get from all their efforts is totally inadequate does not seem to have changed either.
I welcome the fact that the Government are about to undertake a review of the working of the code and the adjudication. The essential thing is for the Pubs Code Adjudicator to act as an adjudicator and not just to enable negotiation between the pubco and the tenant, which actually reinforces the imbalance of power between the two. All too often, pub tenants find themselves negotiating against not only the pub company but their solicitors as well, and they are not in a position to have equivalent legal advice.
I conclude by saying that saving the pub involves two things: a radical transformation in taxation, but also the reinforcement of the legal protections for the pub tenant against the pub-owning business.
(5 years, 7 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I beg to move,
That this House has considered the effect of business rates on pubs.
It is a pleasure to serve under your chairmanship, Mr Bailey, and I am happy to have secured this important debate. Pubs, particularly our historic, independent pubs, add vibrancy and attractiveness to our high streets. They support tourism, help to encourage footfall and add hugely to our local economy. They are the lifeblood of my constituency and, I am sure, of many others. Pubs in St Albans generate over £40 million a year for our local economy; the industry employs 1,600 local people and pays around £20 million a year in wages. In St Albans and Herefordshire, we are net contributors to the Chancellor’s coffers. My constituents, particularly businesses in my constituency, are the Chancellor’s golden goose, and he therefore needs to listen carefully to ensure that that golden goose thrives.
I have been contacted by many local pub owners since this debate was announced, who have all shared with me their frustrations and concerns about the impact that business rates have had on their businesses. They are under huge pressure. The Government were absolutely right to target business rates as a way of helping small businesses, pubs and the high street as a whole, and the cut of 33% in rates for businesses with a rateable value of under £51,000 is a major step in the right direction. However, in some areas such as St Albans, that rate reform is not having the positive impact that the Chancellor was aiming for. Many landlords expressed the view that the new business rate formula, designed to help pubs, has had a perverse result, with a hike in business rates for their pubs. That hike could mean that they have to cut staff numbers, or even worse, close their businesses altogether.
I fully understand the point that my hon. Friend is making about business rates. I wonder whether she has calculated how much of the problem that pubs have is due to a change in drinking habits and why we go to pubs, and how much of it is actually due to business rates.
I have not calculated that, but if my hon. Friend waits for the rest of my speech, he will hear how the huge hikes in business rates mean that pubs would have to sell so many extra drinks that they cannot possibly make up for those hikes. The fact that some people are declining to go to our pubs is one issue, but I am talking about successful, thriving pubs.
I congratulate the hon. Lady on bringing this issue to Westminster Hall for consideration, and I support her entirely. With some small pubs experiencing a rate increase of some 80%, does she agree that we are at risk of losing the independent retailer—the one who takes the keys off the customer and will ring somebody to come and get them, and says when enough is enough? Does she further agree that this is something that is not provided by the off-licence or the supermarket chain, and that society will lose out if we lose the restraining hand of those small local pubs?
The hon. Gentleman makes an excellent point. Indeed yesterday, I took some representatives of pubs to meet the Minister with specific responsibility for this issue, and interestingly they were all from small independent pubs. The big pub chains can cross-subsidise in other areas if they are hit in this way; it is the small independent pubs, often run by one or two people who have put their lifeblood into those pubs, that are suffering. Those people are the ones whose voices need to be heard today. This cannot be the message that we are sending out as a Government. We must ensure that we are supporting small businesses, such as our smaller pubs, which drive our economy and play an important role in communities.
In high-value property areas such as St Albans, there is not a standard Government model that fits. The average house price stands at over £600,000: if a struggling business closes, it will quickly be snapped up by a property developer who sees it as a lucrative brownfield site ripe for housing, and often turned into an individual house or a pair of houses. That practice of turning commercial space into residential space is affecting businesses across St Albans with, for example, a staggering loss of office space over the past few years since the planning laws were changed. That is a double whammy for pubs. Businesses, particularly pubs, are struggling under the current system, and the new rate simply provides a cliff edge that penalises successful businesses in areas plagued by high property values. We must devise a system that helps all small businesses and pubs to thrive, not just the ones with low retail value.
The 2017 business rate formula for pubs uses a methodology for setting the rateable value based on a fair maintainable trade, which is a difficult phrase to interpret. The rateable value is driven mainly by the pub’s turnover. The calculation also takes into account property valuations in the area, which means that even small pubs, such as many of the pubs in St Albans that have been hit the hardest, can have a high rateable value because the area they are in has high property values. Sadly, the current formula does not take into account the many models of pub ownership that are often used by landlords and owners. That formula effectively penalises small business operators through an arbitrary taxation system that significantly reduces any profits a pub landlord can make while trying to pay staff wages and other costs.
I thank the hon. Lady for bringing this important debate before the House. We are at risk of losing our Glassford Inn, the only pub in its village, because of the issue that she has spoken about: the high rateable value of property in the area. It is the last business in the area, yet the rateable amount cannot be varied. Does the hon. Lady agree that this situation has to be changed to sustain these businesses over the long term?
I absolutely agree with the hon. Lady, because I do not believe that what she has described was the Government’s intention. As I have said, the formula does not take into account the current models: some of these pubs are leasehold, and some are owned; there can be no bigger incentive to sell a pub than knowing it could be worth a heck of a lot more as a house than as a pub.
Does my hon. Friend agree that there should be some business rate relief when a pub has been bought under the asset of community value scheme?
Actually, we have tried to save pubs under the asset of community value scheme, and we have not been successful in St Albans, because the developer wins every time. I can see the point that my hon. Friend is making, but I am not going to take a diversion down too many tracks about the price of beer and community assets. Pubs and businesses in my constituency want a fair system that does not, as the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) has said, discriminate against a business because it is located in a high-value area.
I completely agree with my hon. Friend regarding high-value areas. The Old Griffin Head pub in Gildersome in my constituency has business rates of over £21,000—that is in a little village. Does my hon. Friend agree that that is an extortionate amount of money, and that it is no wonder that 21 pubs are closing every week in the UK?
I absolutely agree with my hon. Friend, and that is why I think the Government need to hear why their best intentions have not hit the mark. As I was saying, and as the hon. Member for East Kilbride, Strathaven and Lesmahagow has described, pubs want a system that does not discriminate against businesses because they are in high-value areas. That is especially the case when they see a neighbouring, lacklustre pub—and by “neighbouring”, I mean literally three doors down in my constituency—that seems to have either had poor management or low investment, but perversely has benefited from a rate cut. How is that for a trading market? Hard-working landlords of successful pubs are penalised for their strong personal investment; they are enduring eye-watering rate hikes for their trouble.
The hon. Member for East Kilbride, Strathaven and Lesmahagow mentioned high rates in her area; I suspect that anyone who comes to St Albans will take a deep gulp. This is not what they expect from a Conservative Government, or any Government, especially one that has recognised the pressures our pubs are under and tried to help. I accept that, as I was told yesterday, the formula potentially has helped up to 90% of pubs nationwide, but it only benefits 60% of pubs in St Albans, and for some of them, the benefit is only marginal. That leaves many of the small, independent pubs that the hon. Member for Strangford (Jim Shannon) referred to facing massive hikes. The formula must be revised. The current methodology for pubs and the high tax-rate multiplier are barriers to new investment in small businesses and pubs, and we have to tackle that issue and find a fairer formula.
In November, I visited several pubs in St Albans—I think it was 10; that is how easy it is to walk around the pubs in St Albans—that are being hit the hardest by these rate increases. The campaign group, Save St Albans Pubs, took me on a tour of the pubs that face huge increases because of the system.
One of the pubs I visited recently, The Boot, is a tiny heritage pub that, as has been pointed out, will have to sell an additional 22,000 pints to cover the additional £51,000 in business rates that it now has to pay. That is a 280% rate increase, which is unsustainable and unfair.
Mr Christo Tofalli of Ye Olde Fighting Cocks told me that unless we have proper reform and relevant taxes, licensing laws and duty costs, his pub is finished. He speaks from experience because he has already come in and pulled the Fighting Cocks back from being closed under a former owner and not trading. He has invested considerable money and effort in the pub since then and has turned a closed, failed business that was an eyesore in St Albans into a successful pub that is an asset. However, under the new model, his taxes and rates have gone up to such an extent that he is now personally funding his pub to keep it open. Who would run a business like that?
Ye Olde Fighting Cocks has seen an increase in its rates of 66%, or £33,000. I hope the Minister will appreciate that that is an enormous increase for any pub owner to cope with and it does not show the level of support that the Government said was needed for small businesses.
The Six Bells, another great pub in my constituency that I visited on my tour, had an increase of 87% in its business rates: £31,000 a year. It has 1,000 square feet of operational space, which is smaller than many people’s homes. It exists in a neighbourhood where the average residential property is valued at more than £1 million. It is vulnerable to property developers wanting to move in, as they did recently with The Blue Anchor, which was located in a similar area and has now turned into a house. As Alan Oliver of The Six Bells said in his letter to me, he simply wants a level playing field for his business. It could take up to three years for Mr Oliver to appeal the unfair rate revaluation system. Meanwhile, he faces enormous penalties. He told me:
“If we put our prices up our customers will go to the pub next door which has the same size and offering but which has not had a rate increase.”
How unfair is that in the trading environment that we tried to achieve? No wonder he feels hung out to dry.
The landlord of the White Hart Tap also wrote to me and said that he risked losing customers if he put his prices up. He, too, has invested significantly in his business, a small heritage pub. When all costs are taken into account, his annual pre-tax profits are £24,000, which results in £12,000 each for him and his partner. They take no other salary. Many pubs operate with a business model that pays about £12,000 to £15,000. It is not sustainable. Those are just two examples. I have all their details and will send them to the Minister.
In fact, 30 of the 50 pubs in St Albans have seen a rate increase. Astonishingly, they need to sell around 180,000 more pints per year to cover those increases. The Blacksmiths Arms has had an 82% increase and The Beech House a 59% increase, meaning they pay £74,000. I invite the Minister to come and see those pubs, which are less than half the size of this room. Pubs in St Albans saw an average increase in rateable value of more than £27,000. That is a 56% increase in rateable value since the business rate reform. So far, 10% of pubs in St Albans have closed because of such pressures. Sadly, further closures are expected. I know the Minister talks to representatives from the industry, but I am concerned, as has been indicated, that he is not hearing the voice of small independent pubs such as The Boot.
CAMRA, which is based in my constituency, recently provided a comprehensive submission to the Chancellor ahead of the Budget in September. It has called for a full review of the business rate system with regard to pubs. It maintains that the current system is not fit for purpose and a review is needed to tackle the unfair penalisation of property-based businesses like pubs, especially given the vastly reduced levels of taxation paid by online retailers. I hope CAMRA will engage with all the pubs I have mentioned today to ensure that everyone is singing from the same hymn sheet and that their voices are heard.
The British Beer and Pub Association has rightly pointed out that pubs pay 2.8% of the total rates bill, yet contribute only 0.5% of rate-paying business turnover. That is an overpayment potentially of £500 million. Not only are pubs hit hard by business rates, but many other shops on our high streets face similar rate hikes. Save St Albans Pubs, the campaigning group in my constituency, is calling for the 33% cut to apply to all pubs for the first £51,000 to prevent the cliff edge that I talked about. If there is an ambition to help all pubs—the Government believe 90% have been helped—why not help the other 10%? I seem to have a lot of them in my constituency and they are also in the constituency of the hon. Member for East Kilbride, Strathaven and Lesmahagow. Why not ensure that all pubs get the help that they need for a favourable trading environment?
I welcome the freeze on beer duty that was announced by the Chancellor. It will help pubs across the country, and it will certainly help many pubs where the margin is narrow, but it does not help to make up for the major hit on business rates that pubs in St Albans have to endure. As I have said, small pubs, particularly ones with 1,000 square feet of space, cannot possibly have enough people coming through their doors when they are already busy and trading to make up for the huge hike in rates. In the long term, Save St Albans Pubs is calling for a fundamental review of the business rates formula for small businesses, particularly pubs. It rightly points out that pubs are complex with various business models. It is not a one-size-fits-all tax. There are many examples, particularly in high-value areas, where property values drive up the rates, meaning pubs risk being closed.
The Government have rightly identified business rate cuts as a method to support our high streets and pubs. Now we must alter the system to make sure it works for all of them. I hope the Minister will take that on board. Time is running out for pubs. Three years to challenge a business rate is far too long. The whole idea of demonstrating a sustainable trading market is obviously not working. I hope the Minister will come to St Albans. I invite him—in fact, I demand he comes to do the same pub crawl that I did. Pub owners in my constituency would be delighted to welcome the Minister to their pubs so that they could show him their premises and tell him why the model has got to be altered in line with a fairer system that respects the heritage pubs that are the lifeblood of constituencies such as mine.
It is a pleasure to serve under your chairmanship, Mr Bailey. I thank my hon. Friend the Member for St Albans (Mrs Main) for securing the debate, and I do so for two reasons. First, this is an important matter; pubs lie at the heart of our local communities and the Government’s view is that we should do whatever we can to assist and support them, although, as my hon. Friend the Member for Henley (John Howell) pointed out, there are issues other than rates at play when one looks at the pressures that pubs are under. Secondly, I know that my hon. Friend is a strong campaigner on these matters, and this debate is yet another reflection upon the assiduous approach she takes to her duties as a Member of Parliament.
Undoubtedly there are great pressures on pubs, as we have heard. At the same time we should recognise that there are some rays of light in the overall story. The Office for National Statistics has published data showing that the number of larger pubs—those that employ 10 or more—has grown since 2011. In fact, we now have the largest number since 2011. If we look at the pub and bar sector in total, we see that employment has grown by some 6% since 2008, to 450,000 employees. That does not mean that pubs are not under pressure, as my hon. Friend set out at length and in detail, so the Government have taken action, and she has recognised the things that we have done.
For example, in the Budget last year we introduced a discount of one third to the business rates for retailers, including pubs and bars that have a rateable value below £51,000. I know that my hon. Friend’s constituency is in a relatively high-value property area and that the discount will not have had the same impact as it has had on the estimated 90% of all pubs and bars across the country. The figure for her constituency is 63%, so it is certainly the case that the majority of the pubs in her constituency are at least entitled to the discount of one third that we announced.
I encourage the Minister to come and see my pubs. Many of them are in historic listed buildings within a conservation area. They have small square footage and it is difficult to grow a business beyond the growth it has already seen. They are in areas where the house prices drive up their rates to an unsustainable level. I appreciate that some of the bigger ones—not the independent ones—have been helped, but I want to help all the pubs, and particularly the ones I have referred to.
As I said, 63% of pubs and bars in my hon. Friend’s constituency—typically those with lower rateable values, which probably correlates to the kind of pub she describes—will benefit from the one-third reduction that we announced in the Budget. That reduction will be worth about £900 million to the sector over the next two years. She also rightly referred to what we have done in freezing beer duty and spirit duty. In 2013 we withdrew the beer duty escalator, so the price of a pint is now some 14p less than it would have been otherwise, and we froze beer duty yet again in the last Budget. Across the country, around half of the income of pubs is driven by beer sales alone, so those are important measures. The further reliefs that we have been introducing come on the back of a great deal of activity, particularly since 2016. We have introduced a total of about £13 billion-worth of reliefs across the business rates terrain. That includes making 100% small business rates relief permanent, and doubling the threshold for small business rates relief in 2017.
My hon. Friend asked what we are doing for all the pubs in her constituency. That is a valid point. We have changed the uprating from the retail prices index to the consumer prices index. We initially announced that that would come in from 2020, but in the recent Budget it was brought forward by two years. That will lower the level of business rates right across the pub sector, irrespective of the size of the particular establishment. That is worth about £5 billion in additional relief over the next five years. We have doubled the level of rural rate relief to 100% from 2017.
My hon. Friend referred to specific examples of where there have been very large increases in rateable value—I think she quoted a figure in excess of 60% in one case. In 2017, at the time of the revaluation, we introduced the transitional relief scheme, which was worth some £3.6 billion of relief, to ensure that we smoothed out some of those increases. I would be happy to meet her at some point to look in detail at one or two of the examples she raised, which might be useful for us both. An increase in one year of more than 60%, given the transitional relief that would be available, would be on the high side, but I would be very interested to look at that with her in detail.
I thank the hon. Lady for that intervention. I would be very interested in hearing from her and her working group when she is ready.
It is important to say that pubs are typically central to high streets. It is an issue not only of providing whatever support we can in terms of reliefs, many of which I have outlined, but of assisting high streets, and pubs as part of high streets, to evolve and transition. The high street is under a huge amount of pressure, not least through the online retail marketplace, which takes around 18% of all retail sales. A decade ago, it would have been a fraction of that.
The high street, and pubs at the heart of it, will therefore have to transition. That is why we made an important announcement in the Budget about the future high streets fund—£675 million to assist local areas to develop plans to ensure that they transition their high streets into a format that works more effectively. That includes the review being conducted at the moment into the change-of-use regime, and how it operates to allow certain businesses to change to different businesses, or to retail premises.
May I ask the Minister in the few minutes that are left specifically to discuss anomalies such as fair maintainable trade—where the rates of one pub are hugely increased and those of another, which is not making so much investment and effort in the community, are cut? It cannot be right that businesses that are trying their best are penalised. Fair maintainable trade is an undeliverable anomaly, as is the fact that it takes three years to challenge the rates.
My hon. Friend has astutely pre-empted my very next set of remarks, which relate to the fair maintainable trade approach to valuations. The British Beer and Pub Association has looked at that approach with us and is broadly comfortable with it. We recognised the importance of revaluations in the Budget. We have talked about bringing forward the next revaluation, and having more frequent revaluations so that we have fewer changes of a more dramatic nature.
On the way in which the system works, I think it is broadly a fair approach, because it does not take into account the actual value of the property; it recognises, however, the turnover that a pub can achieve if run appropriately. If a pub is extremely well run and is a very successful business, the Valuation Office Agency is not out to penalise the owners or tenants of that particular establishment in its valuations. There is an established check challenge appeal process through the VOA that can ultimately lead to an independent assessment of the VOA’s decision.
I would like to discuss the three-year point that my hon. Friend raised with her after the debate. If there are cases where it is the fault of the VOA that we are not responding across that period of time—of course, there are many reasons for delays that may come from either party—that would be of concern to me. With the VOA, we are in a position where the backlog of valuations, from when we had speculative valuations, before we changed the process, should all be cleared by September this year—and 1 million had to be gone through.
I thank the Minister for making various offers to talk outside the debate. Of course, the debate is being watched hotly by people in my constituency and outside it. I ask that the Minister commits to coming to St Albans, because those conversations need to take place with the people who are running the businesses. They are beginning to think that whatever they say is not listened to. I would like him to come and put to them the same arguments that he might put to me. I am not that closely involved, and would be unable to reply in the way that they could, so please will he come to St Albans?
The commitment that I will give my hon. Friend is that I would certainly be very happy to meet with publicans from her constituency, if she would like to arrange such a meeting. I have some very fond memories from many years ago of having many a very satisfying pint in Ye Olde Fighting Cocks. Perhaps we could discuss it afterwards. Whether I go on a pub crawl with her in her constituency is another matter, but I am certainly happy to meet her and the constituents to whom she refers.
Once again, I thank my hon. Friend for introducing this extremely important debate. She has once again ensured that it is very much at the forefront of the Government’s agenda. I hope that she will accept that we have done a great deal in this area to do what we can. Of course, we keep all taxes under constant review, and I will certainly bear in mind her representations at future fiscal events.
Motion lapsed (Standing Order No. 10(6)).
(5 years, 7 months ago)
Commons ChamberI am grateful, Madam Deputy Speaker, for the opportunity to speak at this stage of our proceedings. I am extraordinarily concerned about new clause 1, because it would delay the implementation of clause 5, which is a key part of the Bill because it sets the very level at which people in this country start to pay tax. If we are to address the issues that affect those in our country on the lowest incomes, the best way to help them will to be allow them to keep more of their money in their pockets.
That is why a key part of this Government’s economic strategy has been to make sure, year after year, that those on the lowest incomes are able to keep more of what they earn and to help themselves to build their way out of poverty. That means that 34 million people in this country are paying less tax than previously, and many millions of people have been taken out of tax altogether. This was the No. 1 recommendation of the tax reform commission, which I worked on back in 2006, and I am absolutely delighted that it was among the first steps taken first by the coalition Government, then by the 2015 Government and now by the 2017 Government. This Finance Bill means that raising the level before anyone pays tax to £12,500 is being introduced faster than we ever thought possible.
Given the Front-Bench speech that we heard from the Opposition, it is worth noting that the allowance was only £6,475 when Labour left power, but is now £12,500 under this Conservative Government.
Absolutely. That is exactly the point, because we know that the best way to address poverty is to make sure that more people can earn their way out of poverty. That does not work for everyone, but for those who can do so, this makes a significant difference, and that is exactly why poverty is now at record lows.
Absolutely. We could spend a long time analysing the decision to flog the gold reserves. It was the same Chancellor who claimed to have abolished boom and bust—to be fair, he was right: he managed to end the boom at the end of his term, although he did very little to take us away from the bust. The economic cycle is still there, and those who pretended it did not exist were deluding themselves. They kept betting that things would always go up and then things started to go down.
The other thing that has made a difference in Torbay, whose economy has many jobs in the service sector, the hospitality industry and the care sector, is the introduction of the national living wage, because of which many people have had a salary increase. It is easy for an Opposition to pledge all sorts of things, but it is very different to actually deliver in government an income rise for the lowest earners. More people are being paid more than the national living wage—local employers in Torbay are paying beyond that level to attract the staff they need, given the fall in unemployment. We cannot say that the Government’s fiscal policies have had nothing to do with that; they have made a positive difference to the lives of people in my community and others across the UK.
I recognise that there is poverty in working families, but I do not agree with her use of the word “trapped”. It is important to ensure that people are in work, because that is the best way out of poverty, and then to ensure that we support people to raise their earnings. One way of doing that is through the support available through the jobcentre when people resume universal credit, which now tends to help people to move up and earn more money, and the other is by looking at the wider economy. As the hon. Lady will know, the minimum wage has risen and is rising, but we are also seeing wages rising independent of the minimum wage as a result of a more productive economy. What is actually key to a better level of wellbeing and fewer people being in poverty is having more people in work, which is the case, and a more productive economy, which means that people earn more. We can achieve that through driving up skills and technology, increasing exports and a swath of other things that would take me into a whole other conversation.
My hon. Friend has mentioned some of the benefits of having a working parent or family member, but it also sets an enormously good example for the children. Children brought up in workless households have low aspirations and ambitions when it comes to obtaining work themselves, so somebody being in work is not just about money, it is about psychological and educative factors, too.
My hon. Friend is absolutely right. While education standards are rising in our schools—readings levels, for example, are increasing substantially, leading to better opportunities for children—low levels of aspiration are still a problem and, as the teacher I was speaking to at a primary school in a deprived area said the other day, raising young people’s aspirations is key.
I am aware that we are fairly short of time, so I will not rerun many of the things I said in Committee—I am sure the Minister and those on the Opposition Front Bench will be delighted to hear that.
I want to highlight a few of the SNP amendments and new clauses in this group. We have a couple of new clauses asking once again whether the Government’s provisions will do what they intend. For example, we want them to review the changes to entrepreneurs’ relief. We also want them to look at the changes in relation to emergency vehicles, because we are particularly concerned about the potential rural impact. Those who have emergency vehicles in rural areas may have more cause to use them outside work time than people who use them in cities. We felt that that issue was not drawn out enough in Committee or in the information the Government provided previously.
New clause 17 is about Brexit analysis. It is important to note that, since the Brexit vote in June 2016, over $1 trillion has been pulled from UK equity funds, which is obviously a really large number. In any changes or preparations the Government carry out in relation to Brexit, therefore, they should note the impact on the economy, which, according to the Bank of England, has cost individual families £900 each so far, and there is also the impact on financial services, for example, which have historically been very strong in the UK.
New clauses 15, 11 and 14 again ask the Government to provide information through consultation reports. It is important that the Government tell us the consultation they did on the draft clauses they brought forward. On the ones they did not bring forward, why did they not do so?
On that point, I should mention that the Government have included a new schedule in this group. That is a relatively unusual thing for the Government to do at this stage, given that they could have included the schedule in the original Bill or brought it forward in Committee. Because the new schedule was not brought forward in the initial stages, the explanatory memorandum provided by the Government does not include details about it. It would have been helpful if it had been considered at an earlier stage or if the Members who sat through the Bill Committee had been notified that it was likely to come forward. Presumably, the Government knew about it before the Christmas recess, and it did not just appear out of the ether. That process could be improved.
The main thrust of my contribution in the short time I have remaining is about the removal of the link between the personal allowance and the minimum wage. I understand that the Government have removed it on the basis that the personal allowance has now reached £12,500 and that they therefore believe they do not need to keep the link. I understand why they are making that case, but if that link had been kept, with the Government required to do a review if the personal allowance threshold was set at less than £12,500, future Governments would have continued to be bound by it. That would have meant that the protection the Government felt was necessary for people on the lowest incomes would still be there in the future. I understand that the Government do not intend to reduce the personal allowance, but that protection could have been left in place without the law causing any problems. That is something I am concerned about.
It is particularly concerning when the living wage the Government have put in place is not a real living wage, but a pretend living wage. It also does not apply to anyone under 25, which is an issue the SNP has raised over and over again. Just because someone is 24 does not mean that their living costs are less than they would be if they were 26—they could have the same number of children and live in exactly the same accommodation. However, the Government believe that it is okay to pay them less just because they are under that age threshold. That is exacerbated by the fact that the minimum wage increases the Government have introduced this year increase by a higher percentage—not just a higher monetary value—the minimum wage received by those who are over 25. The gap is widening: those who are over 25 are getting a bigger increase in the minimum wage, while there is a smaller increase for the younger age groups. The Government need to take seriously the fact that they are saying apprentices are worth pennies, frankly, and that 16 and 17-year-olds are worth far less than people under the age of 25. We raised our concerns in Committee in relation to the removal of the number. I do not think it would have cost the Government anything to leave in the link to protect future generations.
I wanted to have more time to be able to say what a great job the Government have been doing: a 43-year low for unemployment rates, 1,000 jobs a day created and bringing in the personal allowance upgrade even earlier. We do not have time to go through all that, but I believe that getting people into work and out of poverty is the way forward for many families.
The Government were absolutely right to target business rates as a way of helping the high street and small businesses, with a cut of 33% in rates for businesses with a rateable value of under £51,000. In areas like mine with high property values, however, it is not having the impact the Chancellor might have hoped. The new rate simply provides a cliff edge that penalises successful businesses in areas that are plagued by high property values. We must devise a system that helps small businesses and pubs to thrive, not just those with a low retail value. I recently met pub owners in my constituency who have been hit extremely hard by business rates. I have cut out an awful lot of my speech, but I am pleased to say that I have secured a Westminster Hall debate on this matter next Tuesday. I look forward to exploring the matter further with a Minister. Pubs in areas such as St Albans are seeing massive hikes in business rates, not the help that was intended.
Time is pressing, but I want to touch on new clause 26 tabled by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). I have serious concerns about the retrospective nature of the tax being collected. Several of my constituents have raised cases with me and I am extremely concerned about how the process has been handled. Many make the case that this was not illegal tax evasion; they were advised to use the scheme as a way of keeping more of their own money. It is worth remembering that these people are not employees. They take on more risk, with no sick pay, maternity pay or other forms of support offered to an employee. I want to give a couple of personal examples, because I think that is key and we have so little time.
One of my constituents, who worked as an IT professional in the FinTech industries, is being pursued for £900,000 by HMRC for the loan charge. He is extremely worried—many are on the brink emotionally—and this has put him and his family under considerable stress. He had been advised that what he had done was lawful and he considered it to be so. He told me, worryingly, that he tried to settle the case with HMRC for about £700,000, but that that had been rejected. Many people who find themselves in tax difficulties manage to make negotiated settlements with HMRC. It appears that this particular group of people are being treated very unfairly and are being left in the very difficult situation of not knowing exactly how much they owe or how quickly they have to pay.
Other colleagues will be aware that the oil industry had a lot of contractors who were using what effectively turned out to be disguised schemes. Does my hon. Friend agree that there is a duty on HMRC? We have heard today from another hon. Member that customers should not be unduly disadvantaged if they have not managed to settle their claim to date, because after 5 April it will be significantly more.
Exactly. I have also been advised by a former constituent, who, despite no longer living in the UK, is being pursued by HMRC for thousands of pounds of unpaid tax. Another person was advised that this mechanism truly was lawful and it has come as a huge shock to his financial planning that he is left in this position.
There are reportedly over 1,000 people being pursued for unpaid tax. No one is disputing that people should pay tax that is due. The issue is the way it is being requested. People have been badly advised. They have never been able to check whether anything they were doing was illegal, because they were being advised that it was not illegal at the time. It is a loophole that has now been closed.
My hon. Friend is making a very valid point. One of my constituents, an IT contractor, was advised by his own accountant. A review would be very helpful in ensuring that people receive proper advice, so that laws can be followed and taxes collected.
My hon. Friend is exactly right. There are many versions of that story. I have constituents who say that HMRC was made aware of these arrangements but no objection was raised until many years later. That has to be fundamentally wrong. What more due diligence can anyone do?
I will conclude, because I know the right hon. Member for Kingston and Surbiton wishes to speak. The huge pressure and distress—even suicidal thoughts—that this measure has put in people’s minds is totally unacceptable. I say to the Minister: if we do nothing else tonight, can we accept new clause 26? There is a clear ambiguity in the law that applied at the time—perhaps clarity has been provided now. The fact that people cannot negotiate a reasonable settlement even though they acted in good faith at the time, and are being pursued to the point of the destruction of their careers, homes, family lives and marriages, is completely unacceptable. We clearly need a review, and I hope the Minister takes that on board and accepts new clause 26. If it is pressed to a vote, I shall vote for it.
I thank the hon. Member for St Albans (Mrs Main) for her passionate speech. I also thank the right hon. Member for Loughborough (Nicky Morgan), who chairs the Treasury Committee, and right hon. and hon. Members from across the House, who have campaigned as a Parliament against this measure and supported new clause 26. It is my wish to divide the House on the new clause if the Minister does not accept it.
Let me make it crystal clear from the start that I support the Treasury’s aim of closing tax loopholes and stopping tax avoidance. The introduction of loan charges in the Finance Act 2017 to stop future abuse was correct, and the review my new clause proposes would not seek to prevent the Treasury from stopping that abuse from the 2016 Budget announcement. Instead—somewhat inelegantly, due to the rules of Finance Bill debate—new clause 26 aims to focus the minds of Treasury Ministers on the gross unfairness of the way the 2017 Act went about closing an unacceptable tax loophole.
I believe that the review envisaged in the new clause would reveal the unfairness of the retrospective nature of the current loan charge legislation in two ways. First, it would show how that retrospective nature is even more severe than non-retrospective but backward-looking proceedings for the recovery of lost tax elsewhere in our tax legislation. Secondly, it would show that the test of reasonableness included in proposed new section 36A, if applied to the loan charge, would in fact prevent any retrospective tax collection from the loan charge.
Let me remind the House why the Treasury should, after the review, ditch the retrospective nature of this measure, delay April’s implementation and amend the charge so it focuses only on payments made after 2016. It is because the loan charge, as introduced, offends against the rule of law. It is the sort of taxation that led the barons to rebel against King John and gave birth to Magna Carta. It is simply not acceptable for a Government to introduce a law that makes illegal something someone did years ago, when that action was considered legal. That is a clear principle.
(5 years, 10 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Government policy is that we have a backstop arrangement in place to fulfil our obligations and we are in negotiation over the timings of that. The Prime Minister will be coming to the House later today and the right hon. Gentleman will have an opportunity to clarify with her the answer to that question.
Can my hon. Friend inform me why he thinks that there is any incentive for the EU to give us a good deal if they think that by dragging their heels they can drag us into being obliged to pay extra money to them?
There is no expectation that this Government will seek to pay more money to the EU. We are in negotiation, as has been set out. We have made considerable progress. We have a small number of items to resolve, but the intention is to get the best possible deal for the British taxpayer in the national interest.
(6 years, 1 month ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I beg to move,
That this House has considered the future of the Scottish economy.
It is an honour to serve under your chairmanship, Mrs Main, and to bring such an important and timely debate to the House. I am pleased to see so many colleagues here, although I am disappointed that the Under-Secretary of State for Wales is the only Government Minister who could join us. I know the Government take a rather apathetic view of devolution these days—[Interruption.]
I must point out that this is a debate about the Scottish economy, so I am not sure whether the presence of the Minister, albeit welcome, is an indication of diary conflicts, or that we are all the same in the eyes of the UK Government. It would have been nice to see someone from the Scotland Office or perhaps a Treasury Minister here to answer the debate.
It has been 10 years since the financial crisis, and in an ideal world we would be looking back on the crisis from a renewed position of strength, with the fundamentals of our economy strong, and with optimism for the future. Sadly, that is not where we find ourselves. Following a decade of economic mismanagement of Scotland by the Scottish National party and Conservative Governments, Scotland’s economy has failed to recover to above pre-crisis levels in a number of areas. The fundamentals of the economy are structurally unsound, with built-in constraints on future growth, and we appear to be trapped between two economic futures: one a Tory hard Brexit, the other supercharged austerity under the SNP’s growth commission.
The Scottish people have lost a decade of economic growth. Under the projections of the Scottish Fiscal Commission, that lost decade threatens to turn into a generation. However, I remain optimistic, because there is a third way: a Labour vision for the economy—an economy driven by investment, not cuts, and a vision that has an optimistic outlook for the Scottish economy, rather than one of managed decline. Today, I will set out where the Scottish economy stands; the two visions before us as posed by the UK and Scottish Governments; and the third way offered by the Labour party.
Ten years on from the financial crisis, the Scottish economy is in a difficult position. Economic growth remains heavily stagnant. GDP growth in Scotland has averaged out at less than 1% per year since the financial crisis, while the rest of the UK has done only slightly better. Unfortunately, things are not expected to get much better, because the Scottish Fiscal Commission does not expect growth to rise above 1% until after at least 2023. If that is the case, Scotland’s economy will not just have been at a standstill for a decade, but will have remained in the freezer for a generation.
I thank the hon. Gentleman for his comments; he is obviously not paying very close attention in the Chamber. The UK Governments have very clear red lines drawn all over the place, and none of them seem to reach any kind of consensus. [Interruption.]
Order. I know the hon. Gentleman’s remarks are provoking comments, but please can those comments be kept to either interventions or speeches?
Thank you, Mrs Main. The Labour party position is quite clearly putting jobs and the economy first. If the hon. Member for Airdrie and Shotts (Neil Gray) intends to contribute to this debate, perhaps he can explain why it is very important for Scotland’s economy to remain in the European Union but his party wants to take us out of the United Kingdom. That is something I would find difficult to square.
The UK Government, the Scottish Government, the Institute for Fiscal Studies and the Fraser of Allander Institute have all warned of serious damage to Scotland’s economy as the result of a no-deal Brexit. Worryingly, recently it has seemed that some members of the Conservative party believe that that is an acceptable outcome. In no circumstances should any public representative be recommending that that risk be taken in pursuit of gains that, in my view, are vastly outweighed by the negatives.
On the other side of the equation we have the SNP Government, who have produced a growth commission to set out how they want to see Scotland’s economy grow in the future. In 2015 and 2017, the SNP stood on a manifesto that claimed that it was anti-austerity. The publication of the growth commission and the endorsement of its policies by the First Minister should represent the day when the mask slipped and the SNP was shown to be the party of austerity that we know it to be.
In the growth commission, the Scottish Government propose reducing Scotland’s budget deficit through an approach that would see spending on public services and benefits fall by about 4% of GDP over a decade. Compare that with the policies of the Conservative UK Government, as set out by the Office for Budget Responsibility. The UK Government’s projections see spending on public services and benefits over a five-year period, from 2018-19 to 2022-23, falling by 0.9% of GDP. The plans set out by the SNP in the growth commission would mean the Scottish Government cutting public expenditure on public services and benefits close to five times faster than this Conservative UK Government.
In its model for the future of an independent Scottish economy, the SNP has given up on monetary policy as a tool for stimulating the economy. By not proposing a new currency and by setting public spending and borrowing targets that even George Osborne would have considered ambitious, the SNP has baked serious public spending cuts into its preferred future economic model. Relying on fiscal policy alone to reduce Government debt and budget deficits, they will have to introduce spending cuts, raise taxes or do a combination of both. That is the dictionary definition of austerity.
Those are the most optimistic of figures. The IFS says that, with an ageing population adding to the pressures on the health, social care and state pension budgets, keeping to the growth commission’s targets would likely require cuts to many public services, with the commission not taking the time to spell out exactly where the axe would fall and who would lose out as a consequence. Furthermore, the IFS also said what all know to be true:
“It is also inconsistent to claim that these plans do not amount to austerity but the UK government’s current policy does”,
particularly while the growth commission’s plans
“imply slightly slower real growth in spending than the UK Government is currently implementing.”
I am sure that the SNP will not cease to call itself the anti-austerity party, even after the growth commission’s publication. However, the facts speak for themselves. These are empty calls and stolen clothing. The growth commission is most disappointing because of its lack of ambition. The two Governments of Scotland have produced plans for the future of the Scottish economy that leave much to be desired, and it is therefore up to the Labour party to present a true alternative.
The Scottish economy has three core structural problems: stagnant GDP growth, low productivity and demographic challenges caused by a projected significant increase in the over-65 population and a shrinking in the relative size of the economically active population. Labour has a vision to address all three problems. The problems of growth and productivity cannot be separated; they are twin problems. The Scottish labour market is strong—we have a relatively low unemployment rate by European standards, and an exceptionally low youth unemployment rate.
However, while unemployment has decreased over the years, wages have stagnated and economic output has not matched the increase in the labour force that would usually be expected. That is because, while jobs have been created, they are predominantly low-skill, low-wage jobs that have not helped to accelerate growth; nor have they been productive enough to increase wages. By introducing a minimum wage of £10 per hour, we can reverse the trend of low wages and encourage investment to improve labour productivity. If we increase the minimum wage, companies will have to invest in technology and training to improve the output of their workforce to match the demands they are under. No longer will low-wage, gig economy jobs serve to undercut the advantages of investment.
The hon. Gentleman will of course realise that we are in the UK Parliament. Scotland has two Governments, and I am talking about Labour’s vision for both. [Interruption.]
Order. Mr Gray, the hon. Member for Rutherglen and Hamilton West (Ged Killen) has taken your intervention. Please do not carry on your conversation.
Does the hon. Gentleman support the devolution of employment law?
It is nice to see that both the hon. Lady and her favourite pantomime villains have turned up to continue the set-to that we often see in the Chamber. I am here to make a speech on what I believe is right for the Scottish economy. She will clearly disagree on several areas, and she can set those out in her remarks. As always for SNP Members, independence is the answer, no matter the question. I am surprised to hear SNP Members now talk about devolution so much, given that they have always opposed it. [Interruption.]
Order. This is becoming somewhat intolerable. No respect is being shown to the hon. Gentleman, who is trying to make his speech. This is not a conversation among Members; it is a debate, which will be held in the proper manner. I ask all colleagues to respect the hon. Members making speeches and to keep their remarks to themselves or to voice them in the proper manner—through interventions.
Thank you, Mrs Main. While we invest in a productive workforce, we must also attract talent to fill those spaces. All of Scotland’s population growth from 2016 to 2041 will derive from inward migration, as deaths will outnumber births in each year. Brexit therefore presents a risk, as it could reduce inward migration from the EU. However, even without Brexit, population growth is too slow and lags behind that of other parts of the UK, both in terms of birth and death rates, and through inward migration. We can correct that by supporting a needs-based immigration system. It is simply unhelpful to focus on an abstract number, as the UK Government are doing—or are failing to do.
However, we must also build the communities that attract the best talent. That is why we have called on the Scottish and UK Governments to get on with the completion of the city deals projects. People move to cities and communities. The delivery of more than £1 billion of funding and the devolution of further powers will allow our cities and communities to make themselves attractive to international talent on their own terms, rather than having terms dictated by Holyrood or Westminster.
Overall, 83% of Scotland’s population—4.5 million people—live in areas covered by existing or planned city region deals. That is a huge amount of talent and aspiration to be unlocked, and we simply cannot wait any longer. However, those deals have been bogged down as both the Scottish and UK Governments cannot bring themselves together to settle the matter. We have seen in the wrangling over the devolution settlement that the SNP and Conservative party can lock themselves in disagreement if it is politically opportune to do so; dare I say that we have seen that today? However, the people of Scotland should not be punished because of the narrow interests of the two governing parties.
In conclusion, Scotland has lost a decade of economic progress under its two Governments. If nothing changes, this decade threatens to turn into a generation of stagnation. However, an opportunity exists to turn this around, and the pathway to growth is best fulfilled by an investment-based economic model.
I thank my hon. Friend for his intervention; I could not agree more. One point on which I do agree with the hon. Member for Rutherglen and Hamilton West is that Scotland has two levels of government—one in Edinburgh and one in Westminster—and they should work together productively to try to improve Scotland’s economic performance, which lags behind that of the UK. As a Member who has just negotiated a city deal for his region, I can say honestly, hand on heart, that the two levels of government are not working well together. The relationship is dysfunctional; it does not work. Powers are being hoarded in Edinburgh and not given down to the local authorities, as they should be.
Productivity is lower than it was in 2010 and the gap between Scottish and UK productivity is wider than it was in 2009. Scotland has the lowest rate of business growth in the UK and is forced to pay the highest business rates in Europe. In addition, the SNP broke a major manifesto promise and raised tax on more than 1 million Scots earning over £26,000, ensuring that Scotland’s wealth creators have less of their wealth to create more through further investment.
We talk about powers a lot in this place; the issue dominates a lot of our debate, but let us be clear. The only power given back was that to vary income tax by 1p, and it was given back to Westminster by the SNP, having originally been devolved under the Scotland Act 1998. The Conservatives do not give away powers; the SNP does. [Interruption.] Between 2010 and 2016, Scotland’s economic growth rate was 1.7%, compared with—[Interruption.]
Order. The hon. Member for Edinburgh North and Leith (Deidre Brock) must control herself. She is not down to speak, but she can speak if she wishes to rise. Will she please limit her remarks to either interventions or a speech, instead of barracking?
Scotland’s economic growth rate was 1.7%, compared with 1.9% for the UK, and that was even before Brexit, showing that Scotland’s economy consistently performs worse than that of the United Kingdom.
Last year the SNP Administration set up the Scottish growth scheme—a £500 million fund designed
“to help businesses thrive and grow”.
They have spent only £25 million of that fund. Similarly, they have failed to spend a single penny of the £36 million digital growth fund since it was announced in March 2017. Meanwhile, last Thursday, the Cabinet Secretary for Finance and the Constitution, Derek Mackay, announced that there was a £453 million underspend by the SNP Administration in the last financial year. It is the fourth year in a row that the SNP Administration have underspent their budget. In total, it is more than £1.2 billion that they have chosen to deprive the Scottish economy of since 2014. That is unacceptable.
Meanwhile, my local councils in Clackmannanshire and Perth and Kinross are forced to increase council tax and cut services for our local residents. That means cuts to music tuition, public transport and the upkeep of our paths and roads. It is unacceptable and it cannot go on.
This is not about Brexit. It is about the deliberately dysfunctional devolution overseen by the Scottish National party. The SNP is failing our constituents through its woeful mismanagement of the Scottish economy and its refusal to invest the money that we already have and the money that comes from this place, which should be going directly to our constituents. If they do not want to use the levers of administration to improve the Scottish economy, perhaps it is time to stand aside for the Conservative and Unionist Opposition, who certainly will.
You mentioned the lack of free-market forces. Do you agree with your shadow Chancellor when he says that he wants to overthrow capitalism and bring down Britain’s system of free enterprise? That would mean fewer jobs, less money for public services and untold damage to the Scottish economy. Do you agree with his position?
Order. Please speak through the Chair. I do not agree with any of that. Ask the hon. Lady if she agrees with that.
Order. The wind-ups will start at 3.30 pm. I hope not to impose a time limit on speeches. If all hon. Members confine their remarks to about five minutes or less, we will not need one.
Order. Before I call Mr Drew Hendry, I remind colleagues that I will call the Front Benchers at around half-past.
If the hon. Gentleman had been listening to what I said, he would know I said “or any of his team”. [Interruption.]
It is such a shame: I was going to offer some unusual, uncommon praise for the hon. Member for Stirling (Stephen Kerr), with whom I commonly duel across the Chamber, where we fervently disagree. However, his speech today was unusually positive. It may have been slightly off track, as he admitted, but judging by its tone he was at least looking for some opportunity.
I would also almost make an honourable exception of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). Until he took an intervention, which unfortunately did not point out that Highlands and Islands Enterprise still operates exactly as it did in the past, or mention the new south of Scotland enterprise agency to go with it, he was talking about Scotland’s strengths. Otherwise, what a desperate collection of speeches talking Scotland down—
No, I am not going to give way. I am going to make some progress; there is limited time in the debate.
The hon. Member for Ochil and South Perthshire also talked about the Scottish Government having a surplus this year. The Scottish Government work with a fixed budget; they cannot overrun on that. Other Members have mentioned Governments working together, but the present Tory Government cannot even work with the other parties in the Scottish Parliament on Brexit, so how can they be trusted to work with the Scottish Government? The other falsehood—I am sorry, I will take back that word. The other erroneous suggestion made was that Scotland is under a high-tax agenda. That was to forget conveniently that 70% of people in Scotland now pay less tax than they did last year.
The biggest threat to Scotland’s economy comes from the Tory Government’s reckless—[Interruption.]
Order. The hon. Gentleman’s comments will be heard. Hon. Members will please refrain from barracking.
Thank you, Mrs Main.
The biggest threat to Scotland’s economy comes from the Tory Government’s reckless obsession with a hard Brexit. That is not being challenged by the Labour Front Benchers. We have no protection from it. The Scottish Government have put forward, in “Scotland’s Place in Europe”, an option to enable Scotland to avoid the worst effects and stay in the single market and customs union. Incidentally, this week the EU chief negotiator Guy Verhofstadt said that that would be entirely acceptable. Scotland is likely to be hammered by a hard Brexit.
No, I am going to carry on, because I have only a minute.
The UK Government are paying no real attention to stimulating the oil and gas industry. Fortunately there is now an upturn in oil and gas prices, and we need investment from the UK Government.
I have much more to say, and as we are the third party in Parliament I should have hoped for more time to say it, but unfortunately that is not the case—
Order. The hon. Gentleman is not under a time limit. I was just indicating that other colleagues wish to speak.
In that case I will keep going; thank you very much for allowing me to do that.
Unfortunately I am a bit late to the debate, but I have been paying attention. I am amazed by the efforts of Conservative Members, in relation to thinking of Scotland as a country. They are the people who want to see Scotland as a region. [Interruption.] They should remember that the Norwegians have an oil fund, whereas they have squandered Scotland’s oil.
Order. The hon. Gentleman should resume his seat. He was not making an intervention, but engaging in a debate with the Opposition. He attended the debate very late.
Thank you, Mrs Main.
The other issue I wanted to touch on was the opportunity for carbon capture and storage development in Scotland. There is a measure of co-operation between the UK and Scottish Governments, but there is nowhere near the required level of ambition from the UK Government. The rug was pulled out from under Peterhead, where £1 billion of investment was supposed to be put into the carbon capture and storage operation. At the time, that was judged to be just about enough. Now, the UK Government’s overall investment in carbon capture and storage is set to be about £100 million, which is desperately insufficient for the needs of the carbon capture industry, and nowhere near the amount needed to show the ambition that we should be showing to lead that industry. I will draw my remarks to a close, and I thank you, Mrs Main, for allowing me the extra time.
The hon. Gentleman was not on a time limit. With the permission of the Front Benchers, I will take four extra minutes from them and place a two-minute time limit on the last two Back-Bench Members, who have been here for the entire debate.
It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) on securing this debate.
After a decade of the Scottish National party and eight years of a Conservative Government, what will the future of Scotland’s economy be? Where are the jobs, the finance and the security for our next generation of young workers as we enter the uncharted waters of life outside the European Union? After a recent trip to Brussels, we were told that Brexit is over. In Europe, we have already left—only the paperwork has to be filled in. Deal or no deal, we are out of the European market.
Section 11 of the European Union (Withdrawal) Act 2018 should have been fixed in time for Scotland’s voice to be heard, but without the SNP’s approval, and with a Tory party that could not make amends or recommendations, the buck was passed to the House of Lords. The SNP could only huff and puff and walk out of the House for five minutes as it was blowing down, with their instructions to walk out following behind them.
I sympathise with the Scottish Government, who, like us, waited on our amendments to section 11. For the Tories to fail to deliver on the will of the Scottish people puts our devolution settlement at risk, with fewer powers and a breakdown between the two Governments.
What will the future of the economy be when we have low wages, fewer working hours, temporary jobs, agency work and, of course—the way to get unemployment figures down—zero-hours contracts? What chance do our Scottish youth have of building a future, securing housing, raising a family or providing for themselves before caring for others? It really is a game of survival. In 2018, it is sad that the only growth and development in Scotland is in food banks.
Before I call the SNP spokesperson, Alison Thewliss, I ask her to try to confine her remarks to eight minutes.
(6 years, 8 months ago)
Commons ChamberIn St Albans, we are very grateful for the Chancellor’s abolition of stamp duty. Is the hon. Gentleman saying that the Labour party is against it, and that he does not wish it to happen?
I have just explained that the policy was our idea to begin with, but it is effective only if it is accompanied by measures to increase supply.
I want to talk about the cut to stamp duty for first-time buyers, but before I do so I would like to take the opportunity to briefly remind Ministers on the Treasury Bench that in March my constituency suffered a terrible disaster: the gas explosion in New Ferry. The Department for Communities and Local Government currently has Wirral Council’s plan for the rebuild. I trust that, in the context of discussing new housing, Treasury Ministers will look kindly on the plan should it come before them.
I want to argue against the cut to stamp duty and for the Opposition amendment, which calls for a review of the policy, and a review of the place of first-time buyers in the housing market and the supply of housing. My argument against this specific policy is, first, that it looks set to fail against the targets the Government have set themselves; and secondly, that in the current economic context it is simply the wrong policy priority. Perhaps we might consider this policy if we were experiencing the same growth as other countries in Europe or we had dealt with our budget deficit, but even if it was not set to work against what the Government have tried to achieve, it would still be the wrong policy because it is not the country’s priority.
I imagine this policy coming before Treasury Ministers during the Budget preparations and their thinking to themselves, “Well, this might be attractive on the face of it, but ought we not to ask our bevvy of economists here in the Treasury what the likely impact might be?” The hon. Member for Spelthorne (Kwasi Kwarteng) just rolled his eyes at me, and he did so because he knows as well as I do—we have debated it often enough—that the advice from the OBR was entirely predictable.
It was entirely predictable that anyone looking at the policy in the current economic climate would say that we have clear, credible evidence from previous changes to stamp duty that the value of this tax change will accrue not to first-time buyers but to those who already own properties. That is what the OBR says, and it is what advice from the specialists in the Treasury would have told Ministers. I do not know—I have no evidence of this—but I have confidence in the Government Economic Service and I think they would have told Ministers that.
Furthermore, it is very unlikely that the Treasury does not have the full analysis requested by my right hon. Friend the Member for Warley (John Spellar). All Members across the House know in their own minds whether their constituencies will benefit from this, and all members of the Cabinet know whether constituents in their constituencies—which are largely in the south-east of England—will benefit. Those of us who have watched house prices in our constituencies barely grow at all in the past 10 years will know that our constituents will benefit very little from this very expensive tax change.
I am listening carefully to the hon. Lady, because obviously I have a constituency in one of the higher value areas. I am confused. The shadow Minister just said that the stamp duty cut was not appropriate because the right measures were not in place for affordable housing, whereas she seems to be saying that a stamp duty cut is not what she would like to see. Which is it? Does she think that the stamp duty cut should not happen at all? I would like a simple yes or no answer.
I thank the hon. Lady for that intervention, but I have already answered her question. I said that in better economic circumstances this might be something that we might want to do, but it is not a priority for now. I answered her question before she even asked it.
Given what the OBR has said, I ask Ministers once again to look at that and at the evidence. The value of this tax cut will not go to first-time buyers. That is absolutely clear. If Ministers think that they can come back to this House after having a review and persuading the OBR that the Treasury is correct and the OBR is wrong, then fine, we can look at it, but I see no reason to think that, and here is why. When we asked the Chancellor about this measure in the Treasury Committee, he gave the same line as the Minister just gave at the Dispatch Box. He said, “Ah, yes, but the OBR assessment —their model—doesn’t take into account our reforms, which will make a huge difference to the supply of housing.”
Anybody can look at page 28 of the Budget—at the Budget scorecard. This year, the stamp duty land tax cut will cost us £125 million. How much extra will we spend on the housing infrastructure fund? A big fat zero. Next year, 2018-19, the stamp duty land tax cut will cost us a whopping £560 million. How much extra will we spend on the housing infrastructure fund? A big fat zero. In fact, according to the Budget we will not spend anything on extending the housing infrastructure fund until 2019-20, when we will spend £215 million. In the same year, we will spend £585 million on the tax cut. And so it goes on, and on. We are frontloading a tax cut and pushing back spending on housing infrastructure. How can the Chancellor come to this House and say, “Oh no, the OBR has got it all wrong, because we are going to build all these houses and that will sort out the housing market”? Honestly, Mr Owen, I do not know what he is talking about.
(6 years, 9 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I am delighted to serve under your chairmanship, Mrs Main. I thank the hon. Member for Amber Valley (Nigel Mills), my colleague and friend, for securing and introducing this debate. I will focus on the case that investors are now making for public country-by-country reporting; an interesting development is that more and more investors are concerned about the behaviour of the companies they invest in, including whether they are paying their fair share of tax on their economic activity around the world.
Principles for Responsible Investment is a United Nations-backed organisation with more than 1,860 signatories —asset owners, investment managers and service providers. It is trying to develop a dialogue with firms about responsible tax strategies. Its website defines its mission as follows:
“Responsible investment is an approach to investing that aims to incorporate environmental, social and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.”
Its guidance for dialogue with firms includes the following observation:
“An aggressive corporate approach to tax planning should be a concern to investors as it can create earnings risk and lead to governance problems; damage reputation and brand value; cause macroeconomic and societal distortions.”
Under the subheading “Why now?”, it further observes:
“Stronger enforcement around the world and increased media and civil society scrutiny have made multinational companies much more vulnerable to unexpected tax assessments and increases in tax liability and reputational damage.”
In a section headed “Transparency on tax strategies, tax-related risks and country-by-country activities”, PRI’s working group on tax disclosure makes the following recommendation:
“Detailed reporting would provide an overview of…country-by-country reporting details, including a list of all subsidiaries and their business nature…as required by the appropriate OECD-BEPS templates”.
That would be helpful. The welcome dialogue encouraged by PRI is a sign that awareness of the implications of aggressive tax avoidance is growing and that investors want to know more about company tax strategies.
Last night, I was at a dinner organised by Fair Tax Mark and SSE to discuss approaches to tax transparency with other companies, including investment organisations. It was interesting to hear from a number of firms that increased openness about how much tax they pay and why has become an important part of boards’ discussions and has benefited how boards approach the issues. A number of representatives also pointed out how positively their own workforce had responded to increased openness, because it made them feel good about what their employers were doing—not only creating jobs, but putting something back for the wider good of the communities where they work and create wealth.
As MPs, we often receive information from companies in our constituencies and elsewhere about how much they contribute to the public good in the United Kingdom. They should be praised not only for the jobs and wealth they create, but for what they put back into communities. Firms put money into the environment, encourage their employees to be volunteers, and make efforts in many important areas; a number of children’s football teams local to me have benefited from football strips funded by corporate concerns. However, what I want to hear more than anything else from companies in my constituency and multinational companies in London or our big cities is how transparent they are about the tax they pay. That needs to be the headline, because any doubt that they are paying their fair share of tax undermines all their good work for the public and the community.
I believe the world is moving towards greater transparency. I would be interested to hear the Minister explain, when he replies to this debate, why companies in the extractive and financial sectors already have to put this information into the public domain and why they do not see that as a risk in terms of competition. They have accepted that it is something they have to do. Why is it okay for the companies in those sectors to provide this information, but somehow there is a barrier to other companies in other sectors joining forces and providing this information?
When the Minister sums up, I would love to know what level of multilateral co-operation is necessary. How many other countries does it take to form a critical mass and enable the UK to move forward? Should this be through the EU or through the UN? It would be really interesting to know what threshold we are working towards to bring into being the enabling power already contained in the Finance Act 2016—because the Government adopted my amendment, which was a cross-party amendment—to introduce country-by-country reporting.
I really believe that the world is moving towards greater transparency, and the Government have a choice, as my friend the hon. Member for Amber Valley said. Is the UK going to be a leader or will we just follow the pack?
Before I call the next hon. Member, let me say that there are three Members who wish to speak, and I will begin calling the Front Benchers at 5.10 pm.
The Minister is nodding his head, but the Government should be honest with us. The figure of £160 billion that is currently used—I have heard it used time and time again—is simply an HMRC estimate of the money due from tax avoidance that it has uncovered. It does not tell us how much has been collected or how much has been added to the coffers.
Since the Minister used the figure in a debate last week, I have tried to identify how much we have actually got in. I have asked everybody. I have asked the National Audit Office and the Library. I have tabled questions to the Minister, to which he has yet to reply—perhaps he will reply this afternoon. No one actually tells one how much has been collected in tax avoidance. My guess is that it is a tiny, minute amount of that £160 billion that the Government claim they have got in. Please be honest with us. A little bit of honesty will enable us to have a proper debate.
The final point I want to make, adding to what others have said, is that if the Minister showed the bold leadership we want him to show by having public registers of beneficial ownership, he would be incredibly popular. I would have thought that there could not be a better time than now for Conservative Members to try to gain some popularity. I will give three examples of what has happened recently. After the release of the Paradise papers, the Tax Justice Network launched a petition that gained more than 200,000 signatures. It has now presented that petition to Downing Street. Oxfam did some polling that showed that eight out of 10 members of the public think that multinationals with UK headquarters should publish information publicly about the size of their profits, where they are made, what taxes are paid and the countries in which they operate. Some 70% of Conservative voters believe that the Government should be more active in tackling tax avoidance by companies. Some 80% of Conservative voters are in favour of tougher transparency rules for companies.
The final survey I wanted to refer to was of the FTSE 100. Four out of every five of the top 100 FTSE companies would not oppose the introduction of a legal requirement to make their country-by-country reports public. In fact, a large number would support it. The hon. Member for Amber Valley eloquently made the point that the reporting requirements in other legislation to date are pretty open. Why not put this requirement into the mix? It is supported by the analysis.
This is the fourth debate on these issues in the past month that I have participated in, and I will carry on holding such debates time and time again. I am sorry if the Minister feels it is not the best use of his time, but we will carry on doing this. This is a campaign we are absolutely determined to win, and part of that campaign is public country-by-country reporting.
I remind Members that I will call the Front-Bench spokesman for the Scottish National party at 5.10 pm.
Thank you, Mrs Main, for your stewardship of this debate. I welcome the debate, and congratulate the hon. Member for Amber Valley (Nigel Mills) on securing it, and thank him for his considerable work promoting tax transparency, building on his experience professionally before entering this place. Of course, I also want to hail the work of others in promoting public country-by-country reporting, not least that of my right hon. Friend the Member for Don Valley (Caroline Flint), who has strenuously promoted it many times, and that of my right hon. Friend the Member for Barking (Dame Margaret Hodge), who has ensured that this matter has been promoted consistently by the all-party parliamentary group on responsible tax and many others. I also commend my hon. Friend the Member for Ealing Central and Acton (Dr Huq), who importantly drew our attention to the fact that this is about not only tax transparency, but trying to deal with corruption and money laundering.
I will try to keep my remarks succinct, but I want to first say how pleased I am that we are having this debate, because of the huge amount of public concern around tax matters, as highlighted by other hon. Members. My right hon. Friend the Member for Barking has already referred to public opinion polling that shows that there is enormous support for more transparency around taxation matters, particularly for multinational enterprises. That is particularly important, because public country-by-country reporting enables us to focus on profit-shifting activities. Often when we talk about aggressive tax-avoidance in this place we hear the Government claim that the tax gap is reducing—of course, there is a debate and discussion around that—but their own figures for the tax gap do not cover profit-shifting by multinational enterprises. That is becoming an increasingly large problem, especially with issues around digitisation, which my right hon. Friend rightly referred to.
I remember having a discussion with representatives of Facebook when I was in the European Parliament, before I joined this place. Information about the amount of tax it was paying and how much it paid its staff had been leaked—Facebook had not made it public—and it appeared to be paying incredibly low levels of tax. A representative of Facebook said to me, “Oh, you just don’t understand.” I said, “No, I do understand; I have the figures. I just don’t agree with them—that’s where the difference lies.” I think everyone should be able to have those figures, so they can properly assess them.
As has already been mentioned, in February 2016 the Government required multinational companies to provide their tax details, as well as other details relating to revenue, total employment and so on, to the Exchequer, which was obviously a good first step. Then, in the Budget, the Chancellor maintained that he had introduced new measures to improve large business compliance, including the publication of tax strategies. On that point, we have not seen the level of publication of tax strategies that some of us might have hoped for—I hope that will be coming soon.
None the less, that hook at least enabled my right hon. Friend the Member for Don Valley to table an amendment to the Finance Bill to include public country-by-country reporting. I remind Members of what she said of her amendment, which was passed by this House. She said that it
“will enshrine in law support for the principle of public country-by-country reporting with the power for the Government to introduce when the time is most appropriate.”—[Official Report, 5 September 2016; Vol. 614, c. 136.]
That statement includes no qualification that it should happen only when there is multinational agreement on that principle. Rather, my right hon. Friend stated that it should be introduced when the time is most appropriate. I believe that the time is appropriate now, and other hon. Members have articulated very strongly why that is the case.
It is right for the Government to aim to take a lead on this issue. As was mentioned, there is a blockage at EU level at the moment. The European Parliament supports public country-by-country reporting, but there is disagreement in the Council. That is partly because this issue is now bundled in with debates at EU level about having a blacklist of tax havens run by the EU, which is a contentious issue. As a result, we have an opportunity to make a clear statement and push other countries in the right direction by setting an example. In fact, I know the UK has been arguing for disaggregation of figures at EU level. I am pleased to see that, but we now need to show an example. Above all, we need to show how this kind of activity need not lead to comparative disadvantages for our nation—quite the opposite. There is a good deal of existing evidence about the impact of public—
Order. I ask the hon. Lady to bring her remarks to a close.
I beg your pardon, Mrs Main; I certainly will do. There is lots of evidence already about country-by-country reporting in extractive industries and in banking. Reports from PwC, for example, have shown it to be very successful for companies; it has not been negative for them. We have the examples of SSE, Pearson and others. It has made business sense, and it would make business sense for the UK as well.
(6 years, 9 months ago)
Commons ChamberThat is a very good point. If we are to ensure that everyone benefits from a growing economy—we just about have growth, but not very much of it—we must have an inclusive economy and an inclusive economic strategy that works for every member of all our communities.
The Government might respond by saying, “It’s okay Labour Members. There is a productivity investment fund worth £7 billion.” “Hurray,” we all say, but the money will not start until 2022-23. Why on earth do we have to wait five years for a productivity investment fund? We all recognise the desperate need to improve our productivity, so why wait five years before putting money and support into doing that? I should have thought that it would be an urgent priority for the Budget, not something that could be kicked down the road for five years.
Let me now deal with the issue of housing. I am afraid that I am much less optimistic about the Government’s plans than the hon. Member for Mid Bedfordshire, because over the last hour or so, I have been looking at the Office for Budget Responsibility’s “Economic and fiscal outlook”. I know that not everyone likes to listen to experts, but I am one of those people who still think that they are worth listening to. If we believe what the experts at the OBR are saying, all the housing measures—not just the stamp duty measure—in the Budget will increase house prices by 0.3%, and there will be no change in the supply of housing compared with that set out at the March Budget. Notwithstanding all today’s fanfare, the OBR’s verdict, which is on page 53 of its document, is that there will be no change in supply, just an increase in house prices, which is the exact opposite of what we need if we are to ensure that more young people and families can get on to the housing ladder. Although I think we all share that objective, it is not met by the measures that have been announced today.
I understand the hon. Lady’s interpretation of the report and her concern about it, but in areas such as St Albans where the average house price is more than £500,000, young people were helped on to the housing ladder by the previous Chancellor, and the present Chancellor will be helping young people to save some more of their money and put it towards buying their homes. That will be welcomed by many areas with high house prices. Surely the hon. Lady accepts that the stamp duty measure is welcome.
I am not making my own forecasts; I am taking those of the Office for Budget Responsibility. What people in St Albans, Mid Bedfordshire and Leeds West want is affordable housing and the ability to get on to the housing ladder, and that requires stable house prices and an increase in housing supply. According to the OBR, however, there will be no improvement in supply on the basis of the measures announced today, and house prices will be 0.3% higher than they would otherwise have been, so the measures will not have the desired effect. I understand that the hon. Lady wants her constituents to have those opportunities, but it does not sound as though her Chancellor’s Budget will enable them to do so. In fact, I think it will have the opposite effect.
Yes, indeed. I hope that the public sector, as well as the private sector, takes that fully on board, because the Government and local government, with representations and leadership from a range of parties in this House, have a great opportunity to do more to promote, encourage and mentor. As the Chancellor has indicated, we are going to face a major revolution in robots, artificial intelligence and all kinds of applications of the digital economy. Great digital companies are making huge changes that have a big knock-on effect for more traditional businesses. We need to put all our weight behind a Government who wish to understand that revolution and try to ensure that more people are winners from it by changing jobs and developing new skills so that their careers can respond to the huge changes under way.
Quite rightly, a focus of attention for the public sector—in this Budget as in any other—is whether there will be enough money to do a decent job for public services. I, like any Labour MP, want to ensure that my local schools have enough money to pay good teachers and to have enough of them, and that my local hospital and surgeries have enough financial support to do a good job. I see from this Budget that there is a £6 billion overall fiscal relaxation in 2018-19 and a £10 billion relaxation in 2019-20, mainly on the spending side. I am quite sure, from what the Chancellor said, that as some relaxation of pay agreements occurs, money will come forward to meet those bills. It is important that when pay deals are reached, the health service, schools or whoever have the money to be able to meet those requirements. A modest fiscal relaxation like that is eminently affordable.
The current levels of debt or deficit are not alarming. I am pleased that the Government think that the level of debt as a percentage of GDP will come down very shortly, but we need to take into account the fact that the state now owns quite a lot of the debt itself. That makes a bit of difference. The United States of America is now embarking on a programme of cancelling and reducing the debts because it controls both sides of the balance sheet through the Federal Reserve Board.
I want to concentrate a little more on house building and housing. I am pleased that the Government are to have a speedy—and, I hope, thorough—investigation into the issue of how existing planning permissions can be better used and can translate into more homes more quickly. That is very much an issue in the Wokingham borough part of my constituency, where the borough has issued around 11,000 planning permissions for individual homes—more than enough, one would think, to allow the fast build rate required under the agreements in the local plans. There has been considerable delay, however, in bringing forward some of those houses. There is also a wish by others to try to get planning permissions elsewhere and to build outside the areas where the plan would prefer the building to take place. There is a lot to be said for concentrating the areas of building, because then the moneys can be applied in a planned and predictable way to the surgeries, primary schools and extra road capacity that are needed, whereas if inspectors grant permissions in a variety of different places around the borough on account of a slow build rate, far more capital will be required to keep up with the demands, because distance would become an issue for people needing to get to those facilities.
Looking at the national picture on house building, I welcome the idea that we should be able to have five new garden cities. The garden town movement was a fine one, many years ago, and there were some great successes with new towns and new cities in our country. I am not going to start choosing places where the new ones should go, because none of them will be in my constituency as we already have an awful lot of house building and development going on.
(6 years, 9 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Owen. This is an excellent debate, which is timely, coming just before the Budget, as my hon. Friend the Member for Dudley South (Mike Wood) has said.
St Albans is an extremely high property value area. It is a desirable area and its proximity to London makes it a destination for many families fleeing London for a better quality of life. That puts pressure on pubs in St Albans. Many of them are in small listed premises, in heritage buildings. The pubs struggle to survive in a world where big is beautiful and they generate footfall. St Albans is where the Campaign for Real Ale has its headquarters and it has a strong voice within the pub industry. I pay tribute to the landlords and owners of historic public houses in St Albans for the work that they do to keep their brand alive. It is not enough to say that pubs can survive in this day and age without considering the strains put on them. The historic Boot in French Row is a small, quaint, gorgeous pub that went through trials and tribulations trying to expand its kitchen because it has historic listing.
Similarly, we have the Fighting Cocks, one of the oldest pubs whose name derives from the history that encompassed it. Seeing historic pubs with historic pub names is what draws tourists into St Albans.
In my constituency, King’s Lynn also has a historic heart. CAMRA has been really proactive in driving forward all the issues, not least the issue around business rates and the impact on older buildings, which are much more expensive to maintain.
My hon. Friend is absolutely right. Indeed, CAMRA provided me with statistics. There are 62 pubs in St Albans supporting 1,651 jobs with an estimated £32.6 million in gross value added. That is a huge amount put into the local economy. I wrote to the Chancellor about this matter pre-2016 because the rateable value for many of the pubs is enormous. I pay tribute to Sean Hughes of the Boot in St Albans, who is busy collecting signatures. I can do no better in the short time that I have than to read what the petition calls for, because I fully support it. As the hon. Member for Chesterfield (Toby Perkins) said, those who stood in 2015 stood on a manifesto of speaking up on pub business rates. I am afraid I did not read the 2017 manifesto because, like many, I was caught on the hop, so I do not know whether a review of business rates was in it. However, in principle I support that. The petition calls for an interim pub cap
“and a full review of the business rate system.”
It states:
“Pubs in St Albans and parts of England have been hit with extortionate business rate increases due to property values increasing over the past decade. We believe there needs to be a fundamental review on the business rate system to stop pubs disappearing from our villages, towns and cities. We are calling for an immediate interim "Pub Cap" limiting increases in rates bills to 12.5% in England (currently operating in Scotland) and a fundamental review of the whole system to ensure that pubs can survive and this British community asset will not be lost forever.”
I wholeheartedly agree with that.
Warm words will not save our pubs. Anything we say today about how important they are, how much they do for charities and how much they are a part of our constituencies will do absolutely nothing unless we have something along the lines of what that petition suggests. I know we are under pressure in St Albans, with an average house price of more than £500,000, but other areas are equally affected. We do not want to be lamenting the loss of our pubs because we did not take the issue seriously and do something about it when we had time to. Now is the time to take action, and I hope the Chancellor is listening. [Interruption.]