Furnished Holiday Lettings: Taxation

Anne Marie Morris Excerpts

Wednesday 1st May 2024 Westminster Hall

[Peter Aldous]

I agree with my hon. Friend wholeheartedly, and I intend to develop some of those points.

[Anne Marie Morris (Newton Abbot) (Con)]

Will my hon. Friend give way?

[Peter Aldous]

I will give way one more time at this stage, after which I will have to make some progress.

[Anne Marie Morris]

On the basis of the contributions that have been made, does it not seem obvious that what we need is a proper impact assessment of the reform? We need to look at the impact on the economy, the impact on housing and the impact on the tourism sector. I am sure my hon. Friend will also come to the expected impacts on gross value added and on jobs.

[Peter Aldous]

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

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

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

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

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[Peter Aldous]

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

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

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

[Anne Marie Morris]

Is it not also clear, following the Renters (Reform) Bill, that there has been a haemorrhaging of landlords who do not wish to be in the private rented sector? As a consequence, they used to go to holiday lets, so holiday let individuals are hardly going to be going back to the private rented sector, which they wanted to leave and are leaving in droves.

[Peter Aldous]

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

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

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

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

It is a pleasure to serve under your chairmanship, Dame Siobhain. I thank my hon. Friend the Member for Waveney (Peter Aldous) for raising this issue today. It is a topic that I have discussed previously with him and with many hon. Members who have participated in the debate, and I am happy to continue to discuss it. I should say up front that there are no plans for a consultation, but that does not mean that hon. Members cannot engage with me.

At the moment, there is broad recognition that the current system is contributing to some distortions. My hon. Friend mentioned having a bit of déjà vu. In my former capacity as Tourism Minister, I travelled around the country and stood in this Chamber discussing the issue. I had colleague after colleague and industry after industry making claims for and demanding the exact policy that we are introducing, so hon. Members need to recognise that there is another side to the argument.

Although my hon. Friend outlined a different pattern in his part of the country, there are parts of the country where the current regime, with beneficial rates for FHL properties, creates an incentive for a disproportionately large number of properties to be FHL—short-term rentals, rather than long-term rentals—which is causing problems. I have heard hoteliers and owners of B&Bs say that the current system is not fair and reasonable. I have heard owners of pubs, bars and restaurants complain that the large number of short-term lets and FHL properties is undermining their value proposition.

I gently say to hon. Members that we all have colleagues from different parts of the country and there is another side to the argument, although I understand the vehemence and strength of feeling in the Chamber today. I know the pattern is mixed across the country, but the problem is that we cannot do tax treatment, such as income tax relief, ward by ward or constituency by constituency. As hon. Members know, we have a whole range of other initiatives to encourage the supply of housing more broadly and limit the impact, including through local taxation and restrictions on housing.

We are proposing not to abolish FHLs, which play a vital role in our tourism ecosystem across the country, but to change their tax treatment to put them on an equal footing and create a level playing field with long-term lets. The problem is that if I were an investor thinking of buying a property in a certain area, it would make pure economic sense for me to get a short-term let rather than a long-term let. Therefore, in certain communities across the country, when a new property becomes available, there is an incentive for an investor to straightforwardly go for a short-term let rather than a long-term let because there is beneficial tax treatment. We are not eliminating the tax incentives but levelling the playing field so that the perverse incentive no longer exists.

[Anne Marie Morris]

If the Minister is unwilling to undertake a consultation, is he willing to look at a carve-out—an exemption—for properties that cannot be used in the private rented sector because of covenants on them? That was discussed by the Office of Tax Simplification. Will he look at that seriously?

[Nigel Huddleston]

I thank my hon. Friend for that point, which she has raised with me previously. I should put on the record that many hon. Members in the Chamber have raised concerns about the implementation of this proposal with me. The challenge is that one of the goals is simplification, and when we start moving into the area of carve-outs and exemptions, it opens up the system to challenges and potential abuse. I hear what my hon. Friend has to say. She will always hear from Ministers that we keep tax policy under review, but as soon as we start moving to an exemption here and an exemption there, it causes great difficulties. I also thank PASC for its constructive engagement with me on this issue and for giving me information.

I have had lots of correspondence and have engaged with colleagues, and I want to make this very clear. There is a belief that when we said we were abolishing the FHL tax regime, that meant we were abolishing FHLs. No, of course we are not. As I said, they play a vital role in the visitor economy, but we want to change the tax policy. The intention is for the tax reform to apply to all properties.

There will continue to be benefits. After the abolition of the FHL tax regime, a higher rate paying landlord with mortgage interest costs of £12,000 per year would still get up to £2,400 taken off their income tax bill through the relief. If they spend a further £8,000—for example, on insurance, letting agent fees and replacing domestic items such as sofas, fridges, washing machines—they could save a further £3,200 in income tax by using the reliefs that are available for all landlords. It is about levelling the playing field. There will still be tax incentives, but we do not want that distortion. When somebody buys a new property or an existing property, there is a false incentive that is causing some problems, because human behaviour that naturally seeks a better return on investment leads them towards short-term lets, rather than long-term lets. That is what we are trying to correct.

Tackling Short-term and Long-term Cost of Living Increases

Anne Marie Morris Excerpts

Tuesday 17th May 2022 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

What do we mean by the cost of living? Well, we really mean the cost of housing, utilities and food. The argument has been put that they are all out of the Government’s control because they are driven by international pressure, but housing is a domestic competence.

I am concerned that the Levelling-up and Regeneration Bill has missed an opportunity. Certainly in my part of the south-west in Devon, finding affordable housing is well neigh impossible and social housing is almost invisible, and that is because there is nothing in the planning system to, first, ensure that “affordable” really means affordable—there is no regionalisation of the term —or, secondly, stop the argy-bargy between the developer and the planning authority, which means that the sum set aside for affordable and social housing is, in effect, tiny. Local authorities need more power, and they need to be able to hold the line so that we get the affordable property we need, not what the developers want.

Of course, we also have to deal with those problems that, while not generated by domestic drivers, none the less affect every man and woman on the street, and we have to provide help and support, as the Chancellor did very effectively during covid. The support that has already been provided to the poorest in society is very welcome, but I sometimes think that the Treasury does not recognise that everybody is hurting. We need only look at the statistics provided by the Office for National Statistics to see that everybody needs some support. Pensioners on fixed incomes and those who have done the right thing and invested in a home cannot just move or change their mortgage and utility supplier; they are struggling with the same issue of trying to meet the costs of housing, utility and food bills. They need some help. We should not reject solutions just because they impact on and benefit more people than just the poorest.

I am not a great believer in increasing tax; I am a great believer in reducing it. As I have said on a number of occasions, we could move forward by cutting VAT on energy bills. Now that we are renegotiating the Northern Ireland protocol and looking at talking to Brussels, it cannot be right that the VAT on residents across the United Kingdom is not under the Government’s control. That would be a sensible way forward. Tinkering with having MOTs every second or third year, rather than every single year, will not really cut it.

There would effectively be a windfall on the Treasury, which is more appropriate than a windfall on those who provide productivity and general growth in our country. However, the Government need to make ends meet, so there needs to be a thorough look at the various spending commitments and projects. We talk about HS2, but it is only one of many projects in which there is so much vested interest. I recommend that the Government ask the National Audit Office to set up a commission specifically to look at which projects we can and should cut. They may be nice, but they are not necessary.

There is one area that we have not touched on, which is causing a lot of grief. We rightly say, “Isn’t it wonderful that unemployment is at a low level?” But there is a reason for that: the fundamental reshaping of the labour market that has caused a number of people to fall out of employment. In Devon, a number of people in their 40s and 50s are out of the market, meaning that we have a 25% shortfall in that age group. Something is not working. I have talked to employers in my constituency. Unless we fix the issue, we are not going to help them to survive, and we need them to survive in order to carry on paying wages.

We need to look at what is causing the problem. There are at least two things, but there might be more. One is our benefits system. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) did a grand job and the Government have implemented much of that work, but the market has changed, so the system needs to be reviewed. It seems that what is stopping people is the challenge of losing housing benefit and childcare. We have addressed this to some extent, but there is more work to do. I suggest that the Government ask my right hon. Friend to set up a taskforce to look at that issue, at the whole structure of employment and at how we can attract people from overseas to work in our markets.

The Gracious Speech has many factors to commend it, but addressing the cost of living is not one.

Health and Social Care Levy

Anne Marie Morris Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

There is, without doubt, agreement across the House that funding is necessary for health and social care. The challenge is in how we fund that, how we spend it, and how we ensure that the Government are held accountable for their promises. I will not repeat the powerful words of my right hon. Friend the Member for Rossendale and Darwen (Jake Berry) and my hon. Friend the Member for Wycombe (Mr Baker). They spoke truth to power, and I hope the Government were listening. They raised a second issue—indeed, this has been raised by others: is there a proper plan? We have a document; it is called “the plan”. For me, a plan is something that sets out clearly not just ambition—that is there aplenty—but specifically what will be done, when it will be done by, who will be doing it, and how the Government in this case, and the NHS, will be held accountable. What will be the reporting mechanism? I fear I see none of that. If I am asking taxpayers to pay a very substantial sum, I think that is the least we owe them.

Under this proposal, 80% of the pot will go to the NHS backlog and 20% to social care, which will be split between sorting out the woeful provision that we have now and the cap. I suggest that our priorities here are wrong. Yes, there is a backlog, but social care should not be second class. It should not be dealt with second, after the backlog is fixed; it needs fixing now. To be honest, to talk about fixing the mechanism by which we share the cost between state and individual as the priority seems wrong. If we do not have a social care system that actually delivers, there is nothing to pay for, and there is nothing to debate about how we fund it. I believe that the Government must change that priority.

What, then, could the Government do? With regard to the backlog, they could look not just at longer-term plans—we do not have time for that when it comes to recruitment—but at how we are going to get retired doctors and overseas-qualified doctors back. The Government could do that; they could change the bureaucracy that stopped that happening during the pandemic. They could look at how we can change the way we work flexibly across the different specialisms. That can be done, it has to be done, and it should be the focus.

The Government will not like this, but we also need to look at the immigration rules. I know that there are already exemptions for highly skilled doctors and nurses, but we need more than that across the whole health sector, and that help will come only through immigration. What about targets? Constituents deserve to have specific targets set. We need to know how those are going to be triaged according to need, as I assume they will be, and how they will be reported on.

Then we have social care—what are we going to do there? Can we really afford to wait for a White Paper? No, I do not think we can, but what could we do? We could legislate now. We could mandate proper pay—pay that is fair for the quality of work and the professionalism provided. We could develop a proper, professional system. We could fund local government properly. We could police the quality of the commissioning, as we might under the new Health and Care Bill, which is going through Parliament. Again, we could change the immigration rules, and we could also look at properly supporting carers who are looking after relatives at home, removing extra burden on the NHS.

All this is possible, but without a plan and without accountability, how can we look the taxpayer in the eye and say, “If you pay, we will deliver”?

Spring Statement

Anne Marie Morris Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

Obviously the best way out of poverty is to get people into work, and the proportion of workless households is at its lowest level since records began. The hon. Lady will know that 200,000 fewer children are in absolute poverty than was the case in 2010. We are focused on using our modern industrial strategy to drive economic growth across the regions of our country, and on working with the elected Mayors and the devolved authorities to ensure that the necessary investment is made in all corners of the British economy to deliver the growth that is the only way to get people sustainably out of poverty and into well-paid work.

[Anne Marie Morris (Newton Abbot) (Con)]

May I congratulate the Chancellor on his progress to date, but ask him to consider investing in a long-term innovative strategy for transport infrastructure—road, rail, air and sea—in the south-west so as to drive productivity north and south of the peninsula, and to include a commitment to such a strategy in the Budget so that we build a great south-west to rival the northern powerhouse? We thank him for his support for the Peninsula Rail Task Force. It is welcome, but not enough.

[Mr Hammond]

My hon. Friend will have to think of a snappy name for that—if she can, please will she let me know?

We are investing already in the south-west, including, as my hon. Friend will know, in the crucial A303 programme—£2 billion in a vital transport artery feeding the south-west. I know that many of the bids to the housing infrastructure fund come from south-west authorities, and we are acutely conscious that as we ask authorities to build more homes, we must provide them with the resource to build the supporting infrastructure—that is the purpose of the fund. I hope that she will get some good news when my hon. Friend the Housing Minister makes announcements in due course.

Taxation: Beer and Pubs

Anne Marie Morris Excerpts

Tuesday 31st October 2017 Westminster Hall

[Mike Wood]

I could not agree more. The revaluation of business rates was often seen as an issue that affected only businesses in London or the south-east. As for everyone else, it was thought that some gained and some lost out, but that is completely untrue when it comes to pubs, which have experienced huge increases in every part of the country. The 27 pubs run by Black Country Ales across the west midlands and neighbouring counties will have experienced an increase in their rateable value of, on average, 40% by the time the transitional period is over.

[Anne Marie Morris (Newton Abbot) (Ind)]

My hon. Friend makes a very good point. A pub in my constituency has seen its rates go up 83%. Does he agree that it is completely inappropriate for pubs to be measured by turnover? They get measured on their actual turnover, not the perceived turnover for the square footage, so there is no fair comparison with the way in which rates are levied and measured in other industries in our country.

[Mike Wood]

That is right. As well as a large part of that turnover being just business tax, it is a huge disincentive to invest in and improve the property.

We supported the Chancellor when he suggested he would look at business rates in the light of the increase in online businesses and the harm that could cause our beloved high streets. The message that has come from Members on both sides of the House is that the sooner that can be done, the better. We want to ensure that our community pubs, high street pubs and village pubs are properly considered when any new system is put together, so that we can all get together to protect the great British pub.

I applaud the Government’s work in reducing the deficit, and the measures that the Exchequer Secretary and his colleagues are taking to reinvigorate the economy, but I ask him to urge the Chancellor to go further. Hard-pressed UK beer drinkers still pay 40% of all Europe’s beer duty, despite drinking only 12% of the beer consumed in Europe. Some colleagues may think that means we need to drink more beer to keep up, but let us just focus on the duty. As a Yorkshire MP, the Exchequer Secretary will know that the Black Sheep brewery employs more than 100 people in the Yorkshire dales, but he might not know that it pays more in beer duty each year than it does on the combined costs of employing those 100 staff, buying all the raw materials to produce its beer and then distributing it around the country. Beer duty that is more than four and a half times as high as eBay’s UK corporation tax liability seems an undue burden.

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[Anne Marie Morris (Newton Abbot) (Ind)]

Pubs are a core part of my very rural constituency and provide 2,000 jobs overall. In those rural communities, many pubs are the only community centre. The small shop has gone. The post office has gone, and many of the pubs are now becoming the local store, in addition to being the local pub. We really need them but, despite all that, they are being penalised.

We have discussed a number of taxes, but I will focus on business rates. The challenge for pubs, as I said earlier, is that their business rates are based on turnover. As I understand it, the original intent was to base the tax on the turnover that could be generated given the square footage of the public house. In reality, the actual turnover is taxed. Not only does that mean that it is not comparable with how business rates in other sectors are calculated, but it also penalises successful pubs with rises in business rates and effectively gives handouts to unsuccessful pubs. That does not seem right.

The Smugglers Inn, a successful pub in my constituency, is a case in point. Before the revaluation, its rateable value was £66,500, and it paid £33,000 in business rates. After the revaluation, its rateable value was £125,000, and its business rates £60,000—a rise of 87%. The advice that the landlords received when they complained was to reduce their turnover. I thought that we as the Government of this country wanted to increase productivity, not cut it.

The rate relief provided in the 2017 Budget was welcome, but the £1,000 for pubs and the discretionary amounts available were not distributed quickly; the guidance from Government was slow. I am pleased to say that much of it has now been distributed, but the Government should look at it again. If the same happens again, we need to ensure that the money needed is distributed.

Fundamentally, the problem is that the system is unfair. If we want our pubs to survive, we absolutely must do more to assist them. As has been said, many of them are rural, meaning that their costs are high: pensions, living wage, tax. Burst water mains and power failures, which are common, cost money. They have to use kerosene and LPG, which are much more expensive and must be bought in bulk in advance—

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On resuming—

[Anne Marie Morris]

I will give an example of the costs I mentioned. One of my publicans told me about the cost of Bombardier. In July 2012, a nine gallon barrel cost him £42.99 plus VAT and he sold it at £2.20 a pint. In July 2017, the same barrel cost him £120 plus VAT and he sold it at £3.80 a pint—not the £6.60 that would have reflected the cost.

We need to properly address the burdens that our pubs face. My focus is on business rates. I endorse other hon. Members’ calls for a thorough review of the whole business rates system. The valuation office often gets valuations wrong because it is no longer staffed by local people and does not visit sites. My local council often pays refunds to schools and doctors’ surgeries, but they are the last types of organisation that should be getting refunds after overpaying.

We need to review the appeals system. If pubs have got it wrong, the appeal system is not fit for purpose—it is slow and hard to afford. We should also look at the turnover methodology for pubs, which clearly does not work. What is supposed to happen, and what happens, penalises the good and gives a subsidy to the not so good. That is not fair and not fit for purpose. Because of these circumstances and their importance, we need to look at a permanent rate relief system for all our pubs.

London Stock Exchange

Anne Marie Morris Excerpts

Tuesday 21st February 2017 Westminster Hall

[Anne Marie Morris (Newton Abbot) (Con)]

My hon. Friend the Member for Stone (Sir William Cash) put it incredibly well, so I will not trouble the House with the detail he put on paper so articulately. As he rightly said, the merger was conceived before the Brexit vote and circumstances have fundamentally changed. Our Prime Minister has said that we will be leaving the single market, and I suspect that we will leave the customs union. That very much puts into question whether in any event the deal remains commercially viable for the many of the reasons he identified. The pooling looks dubious to me, and the cost savings are certainly dubious. The biggest concern is that, post-Brexit, this is on the political agenda as opposed to the commercial agenda, which worries me.

I hear what the hon. Member for Aberdeen North (Kirsty Blackman) said about not being concerned about change of control. I do not agree with her sense of security. If the control of shareholders is with Deutsche Börse, they can change anything that is written into the agreement. I believe the chairman is to be a German, and he will have the casting vote.

The consequences are that we are putting at risk one of our most valuable assets. The headquarters of this wonderful institution could move to Frankfurt. The regulatory environment in which the stock exchange works could change. The eurozone could take on euro clearing. I do not agree with the hon. Lady that that is inevitable—it is still up for negotiation and I would like to clear euros here. Do we really want to take that risk where politics trumps economics, as in the EU project?

Whatever we think of the merger, this is not the right time. We will cause instability in the market if we carry on with it. My plea to the Minister, and indeed to the Prime Minister, to whom I have written, is that the decision should be delayed until 2019. We have the power to do that. As my hon. Friend indicated, the Bank of England can do it, the Chancellor of the Exchequer can do it, the FCA can do it and the Competition and Markets Authority can do it. The risks are huge. The competition authority in Europe has yet again moved the date for its decision, to 3 April. If it makes the decision, there will be unstoppable momentum behind the merger and we risk all the events that my hon. Friend identified becoming a reality. It will then be very difficult to stop.

I agree with my hon. Friend that FDI is a good thing, but this is not FDI. Why would we threaten our national economy? Why would we threaten our national security? The stock exchange, just like the NHS and BT, is one of our crown jewels. When we look at these commercial transactions, we must ensure that we make exceptions for things that are important to national wealth, national health and national infrastructure. The City supports that. I have now spoken to more than 50 individuals, and they will be named shortly.

Budget Resolutions and Economic Situation

Anne Marie Morris Excerpts

Monday 13th July 2015 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

The Prime Minister has a vision—a vision of one nation—but recognises that it must be built from the bottom up. I applaud the view that devolution is the way forward, and I very much look forward to the creation of the south-west powerhouse.

[Oliver Colvile]

Does my hon. Friend agree that if Cornwall is to be given devolution, it should have to work with all of us in the south-west?

[Anne Marie Morris]

I have no doubt that it will.

Before the election, the Government set out a six-point plan for the south-west. They said that we needed to increase the long-term growth rate; sustain job creation and create 150,000 more jobs by 2020; transform connectivity, by which they meant transport and broadband; support the region’s key industries, defence and high technology; boost science and promote skills; and support tourism. That was a great agenda, but let us see how it has been delivered on.

The Government have a good record so far, and the measures in the Budget show a degree of promise. On growth, as my hon. Friend mentions, there is the prospect of devolution in Cornwall, and I am absolutely convinced that Devon and Somerset will be looking at exactly the same thing. We have a number of key enterprise zones—Plymouth has been a great success story, and my local enterprise partnership, the Heart of the South West LEP, had an incredible settlement under the local growth fund. We get £103 million in 2014, one of the top 10 awards, and £65 million in 2015, the top award. That is great news.

On job creation, the south Devon link road will produce 7,960 jobs, and the growth deal will deliver 13,000. The city deal in Plymouth will deliver 9,000 jobs, which is great. Unemployment has fallen. In the south-west in 2010 it stood at 83,769; in 2015 it is 38,410. There is the same good story for youth unemployment. In 2010 it was 22,525 in the south-west, and in 2015 it is 8,250. That is a great result.

On connectivity, rail is dear to my heart and the railway line at Dawlish has been preserved, and will be preserved for the future—good on the Government! They have also promised £4 billion on electrification and more frequent trains at 140 mph. There is a new stations fund of £20 million, which is definitely good news and—best of all—we look forward to a dedicated south-west rail franchise. Great!

On the roads, the story has also been good, and as has been mentioned, £7.2 billion has been spent on a number of projects such as the A30, A303, M5—the list goes on. We now have the road fund that was created from the excise duty changes. That will enable Devon, which has more roads than Denmark, to move forward and get some of those potholes filled. Pinch point funding has been increased by £3.5 million for local congestion. Newton Abbot welcomes that, and would love a chunk of it.

On broadband, yes there have been challenges but we got £32 million in phase 1 and £22.75 million in phase 2. Some of the highest settlements in the country were for Devon and Somerset—bring it on! Broadband Delivery UK is considering providing an extra £25 million, and in the Budget we were promised an extra £10 million for ultrafast broadband. Does that not sound great for those of us who live in those areas and are rather cut off? Mobile 4G connectivity is also promised, which is fantastic compared with the Labour promise of 2 megabits per second. We are doing very well. I will not say that there have been no problems, but the Government have taken some good steps forward and we will keep pushing them.

On industry, defence is key for Plymouth—as my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) said—and with a 2% promise of GDP spend we are moving in the right direction. On high tech, we have Hinkley Point C nuclear power station, and South Yard in Plymouth has been redeveloped to improve marine businesses and advanced manufacturing. On science and skills, £23 million has been put aside for new digital economy centres, and Bath will be one of them. GCHQ has already recruited 150,000 new cyber-specialists, and 200,000 more are promised. We also have science parks: Exeter, Plymouth, Bridgwater—fantastic! Better still, there will be a network of national colleges to look at the skills gap, and I am pleased that some of that will be in the south-west. For tourism, the jewel in our crown, there will be an additional £90 million for the coastal communities fund, and we in the south-west will benefit from £10 million of that. I have already benefited in Teignmouth with my Carlton theatre—good on the Government!

In general, the Government have done a first-class job, but more could be done and I am sure that they will be listening to my request, alongside those of the other 50 south-west MPs. We have a challenge with underfunding. The Education Secretary recognised that and last year gave us an extra £16 million, but health and social care is a challenge. The south-west is a wonderful place to live. Lots of people come and retire there, and many are rather elderly and the costs are significant. I urge the Minister and his colleagues in the Departments for Education and of Health to consider reviewing the formula so that we get a fair share and can properly support individuals who live in our beautiful south-west.

This is a great Budget and I commend it to the House. It is excellent for local growth in the south-west.

Tourism Industry and VAT

Anne Marie Morris Excerpts

Tuesday 17th March 2015 Westminster Hall

[Mr Williams]

I am grateful for that intervention. My hon. Friend is right: the name “English riviera” speaks for itself about the importance of the tourism sector to his constituency. He is right that more generally it would benefit just about all component parts of the UK: cities and rural areas alike. That is the spirit in which the debate and the Cut Tourism VAT campaign’s call has been made.

[Anne Marie Morris (Newton Abbot) (Con)]

Does the hon. Gentleman agree that there is perhaps a particular challenge in those parts of the country that are overly dependent on tourism? In the south-west, tourism is a substantial part of our economy.

[Mr Williams]

My hon. Friend is right that the debate has a strong, important regional dimension. That is borne out by the representatives here today.

Such is the nature of the debate, with it being a few weeks before Dissolution, that it could be something of a damp squib. However, I would rather raise this matter with the Minister before the Budget than after it. In many ways this is an opportune moment to remind ourselves of the importance of the tourism sector. In Wales, we are celebrating Wales tourism week in which thousands of our local hoteliers and attraction owners will be showcasing what Wales has to offer. What better way is there not just to celebrate what is happening in the industry at the moment, but to promote its opportunities for growth? That is what the debate is all about.

The tourism sector currently contributes £3.1 billion to Wales’s GDP, which is 6% of its total. It also accounts for 8% of jobs in Wales—a huge number. When we add in those supporting businesses down the supply chain, we see that the sector contributes about £7 billion to Wales’s GDP, which accounts for 14% of the Welsh economy and 15% of jobs.

Quite rightly, the promotion of the Welsh tourism sector is a devolved responsibility. Visit Wales does a lot of excellent work in promoting the Principality, but on VAT it is the Treasury and this place that has primacy and that is why we are asking for action. The debate is about sustaining the tourism sector, but, critically, it is also about growing it. I believe that this could give the industry the financial jolt that it needs.

Autumn Statement

Anne Marie Morris Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

The reason is that we started with a 10.5% budget deficit, which we have had to reduce. Interestingly, the International Monetary Fund assesses that we have had the longest and most sustained reduction in the structural deficit, and that we are forecast to have the strongest reduction in the headline and the structural deficit in the future. The IMF assessment of how we have done shows that we are restoring economic stability to this country.

[Anne Marie Morris (Newton Abbot) (Con)]

May I again congratulate the Chancellor on being a friend to small and micro-businesses? His autumn statement is first class. His extension of national insurance and business rate reliefs is much appreciated, and it is inspirational that he is going to have a full review of business rates, the most-hated tax for all small businesses. While he is feeling inspired in the demolition business—getting rid of the slabs in stamp duty—will he look at the cliff in VAT? It is a real barrier to growth, despite the fact that it is a European tax.

[Mr Osborne]

As my hon. Friend knows—this is the problem of previous Governments having handed over various powers and rights of this country to Brussels—we are constrained by the VAT threshold that we can levy in this country. I think that it is already the highest in Europe, so we are restricted in what we can do. That is why we are seeking to help small businesses in her west country constituency both through the measures on business rates, and through investment in infrastructure, such as the A303, the Dawlish rail line and the Kingskerswell bypass. As I saw a few weeks ago, the bypass is proceeding very well in her constituency.

National Insurance Contributions Bill

Anne Marie Morris Excerpts

Monday 4th November 2013 Commons Chamber

[Mr Gauke]

I am grateful to hear of the experience in Tamworth, and my hon. Friend is right to raise that point. Particularly for those small employers taking on their first person, the fact that they do not have to pay employer’s national insurance contributions at 13.8% will help them. In many cases, the Bill will have exactly that effect. I welcome what appears to be broad support for the measure.

[Anne Marie Morris (Newton Abbot) (Con)]

Following on from the earlier point about confidence, does the Minister agree that, although all the surveys indicate that confidence is at an all-time high, the challenge is investment? A Federation of Small Businesses survey has said that the measure will enable 28% of businesses to take on additional staff; that is what businesses want to do. Some 25% of those surveyed would invest in new machinery and equipment, and 21% in new staff training. That is exactly what we need; we need to turn confidence into a deliverable result.

[Mr Gauke]

My hon. Friend raises an important point. I pay tribute to the work that she does on the all-party parliamentary group on micro-businesses. She provides a very strong voice in the House for smaller businesses, and she is absolutely right to do so. She is right to draw the House’s attention to the FSB survey. We have already talked about the contribution that the measure will make to the taking on of more staff, but where more staff are not taken on, there will very often be investment in the business, which will clearly help it to expand.

The Bill cuts the jobs tax for 1.25 million employers and takes 450,000 of them out of employers’ national insurance contributions altogether, making it less expensive for businesses to take on new staff, so the Bill will help job creation. It contains four main measures. We have touched on the employment allowance. I will also say something this afternoon about the fact that the Bill gives effect to the general anti-abuse rule on national insurance contributions. It also amends the Social Security Contributions and Benefits Act 1992 to allow regulations to be made on the certification of non-UK employers of oil and gas workers, and makes changes in connection with two elements of the partnerships review carried out by Her Majesty’s Revenue and Customs. The Bill also makes a small number of technical corrections that I am happy to take the House through, should there be demand for that; if there is not, I am sure that we can cover them in some depth in Committee.

Returning to the employment allowance, as part of our efforts to remove barriers to growth for businesses and to equip the UK economy to compete in the global race, the Chancellor announced in this year’s Budget the creation of a new employment allowance, as my hon. Friend the Member for Dover (Charlie Elphicke) pointed out. It will take effect from 6 April next year. Businesses, charities and community amateur sports clubs in the UK will be entitled to a £2,000-a-year allowance towards their employer national insurance contribution liability.

The employment allowance builds on action that the Government have taken to make the tax system more competitive, and to encourage growth. That includes cutting corporation tax, increasing the rate of the research and development tax credit for small and medium-sized enterprises, increasing the annual investment allowance to £250,000, and giving a cash-flow benefit to those who invest in plant and machinery.

The objective of the employment allowance is to help businesses with the cost of employing their staff by reducing their employer class 1 national insurance contributions bill each year. It will support thousands of small businesses that aspire to grow, perhaps by hiring their first employee or expanding their work force, as well as those already employing others, or facing temporary cash-flow problems.