Finance Bill

Ben Lake Excerpts

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]]

I wish to speak to new clause 8, which was tabled in my name and the names of my colleagues. The new clause seeks to compel the Chancellor to assess the impact of this legislation on poverty, inequalities and, subsequently, our health.

Under the new clause, the Chancellor would be required to

“review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.”

The review would have to consider:

“(a) the effects of the provisions of this Act on the levels of relative and absolute poverty in the UK;

(b) the effects of the provisions of this Act on socioeconomic inequalities and on population groups with protected characteristics as defined by the 2010 Equality Act;

(c) the effects of the provisions of this Act on life expectancy and healthy life expectancy in the UK;

(d) the implications for the public finances of the public health effects of the provisions of this Act.”

You will recall, Mr Deputy Speaker, that in February last year Professor Sir Michael Marmot published his review of health equity in England 10 years on from his initial study. His review revealed that instead of narrowing, health inequalities—including how long we are going to live and how long we are going to live in good health—have got worse. Most significantly, his analysis showed that unlike the majority of other high-income countries, our life expectancy was flatlining. For the poorest 10% of the country it was actually declining, and women were particularly badly affected. He showed that place matters: health-wise, living in a deprived area in the north-east was worse than living in an equivalently deprived area in London.

Sir Michael also emphasised that it is predominantly the socioeconomic conditions to which people are exposed that determine their health status and how long they will live. By analysing the abundant evidence available, he attributed the shorter lives of people who live in poorer areas such as my Oldham constituency here in the north-west to the disproportionate Government cuts to their local public services, support and income since 2010.

Shortly after Sir Michael published the report, covid hit. As the recent National Audit Office report outlined, it was always a question of when, not if, there was going to be a pandemic. Like many of us, Sir Michael has tried to point out the Government’s hubris not only in their pandemic management but in understanding why we have such a high and unequal covid death toll—the highest death toll in Europe and the fifth highest in the world.

In his covid review last December, Sir Michael summarised the four key pre-pandemic factors that have driven the high and unequal covid death toll. First, there were pre-existing and widening inequalities in social and economic conditions, particularly in power, money and resources. These inequalities in life have led to inequalities in health. Secondly, our governance and political culture was divisive, not just before but during the pandemic. Thirdly, there has been Government austerity over the past 10 plus years, including cuts in social security and local authority budgets. Finally, we had pre-existing and declining poor health.

Sir Michael has made a number of recommendations to build back fairer, including the need to recognise that our economy and health are linked. The improvement of our health and wellbeing must be a priority for the Government and an outcome of our economic policy, as others have said. New clause 8 is a practical means to ensure that that happens.

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), with whom I agree on the importance of the Government ascertaining how measures in this Bill may have a differential impact on different areas of the country, depending on different socioeconomic and health conditions.

I rise to speak to probing amendments 27 and 28, which stand in my name. They would encourage the Government to bring much-needed transparency and strategic thinking to the reliefs proposed by clauses 15 and 19. The amendments reflect Plaid Cymru’s constructive approach to this Bill and our priorities of building Wales’s economy and delivering on our net zero commitments.

Mr Deputy Speaker, you will be pleased to hear that I have no intention of detaining the House for very long this evening and so simply wish to reiterate some of the points I made in Committee. Before doing so, I wish to commend the amendments tabled by the right hon. Member for Haltemprice and Howden (Mr Davis) and the speech by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on IR35 and umbrella companies. I very much hope that the Government will take them into consideration with some urgency.

Amendments 27 and 28 would require the Government to analyse the impact of changes to the annual investment allowance and research and development tax credits on the UK economy, their geographical reach and their impact on efforts to mitigate climate change. The amendments reflect a concern not only that existing tax reliefs are being used wastefully, but that we need to better support the levelling-up agenda and the decarbonisation of our economy so that we can achieve our legally binding net zero targets. I say that in the full knowledge that many other hon. Members have made these points far more eloquently than I could this evening. I particularly wish to commend the amendments standing in the name of the hon. Member for Brighton, Pavilion (Caroline Lucas), which would go some way to ensuring that any measures in this Bill would have decarbonisation and our net zero commitments very much at the heart of their endeavours.

More generally, the UK Government have a lacklustre record on the use of reliefs. Both the National Audit Office and the Public Accounts Committee have raised serious concerns in that regard, with the latter concluding that the Government do not fully know their cost and have failed to conduct due diligence to establish value for money, with some 204 reliefs currently uncosted. When we consider that estimates for the 158 reliefs that have been costed suggest that they could cost the taxpayer as much as £159 billion a year, we as parliamentarians are not only justified but duty bound to establish precisely how those reliefs will contribute to levelling up and decarbonisation efforts. I commend the hon. Member for Hackney South and Shoreditch (Meg Hillier) and the work of her Committee, which greatly enhances the quality of our scrutiny in this place.

With those words, I hope that the Government will urgently take on board our amendments, and those tabled by the Members to whom I have referred, to improve the transparency and effectiveness of tax reliefs to furthering what I think are common goals of levelling up and tackling the net zero agenda.

[Sarah Olney (Richmond Park) (LD) [V]]

I wish to speak to new clause 29, which stands in my name. The pandemic has introduced new ways of working right across our economy and we may need some time before we understand the full impact of these changes and the extent to which they represent permanent changes to how we work. Many of us, MPs included, have been fortunate enough to be able to utilise technology to continue our usual work and receive our full salary for it. Estimates put about 25% of the workforce in this category. I am one of many who hope that some of the changes we have been forced to adopt will be embedded in our normal ways of working as we move out of lockdown. On a national basis, it is possible that the use of digital meeting software may reduce the need for travel, both commuting and longer distance. It will also help workplaces become more accessible for those who have experienced obstacles, such as those with disabilities or those with caring responsibilities. But embedding emergency responses into everyday practice represents threats as well as opportunities, especially to workers. This new clause would require the Government to review the effects of this Finance Bill on certain categories of workers and to report to Parliament.

The workers I am particularly concerned about are those employed on precarious contracts, particularly in the distribution sector. One of the impacts of the stay-at-home order has been an enormous increase in online shopping and home delivery, with a corresponding increase in delivery vans on our roads. The impact that that is having on local congestion is a debate for another day, but tonight I want to draw attention to the contracts under which many of the drivers are working.

Finance (No. 2) Bill

Ben Lake Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Bell Ribeiro-Addy [V]]

I shall speak in favour of new clause 9 in my name, and the amendments and new clauses in the names of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and the Labour Front Bench.

The thread that weaves through these amendments and new clauses is utter outrage at plans for big corporations, including big firms that do not support trade union rights, that pay below the living wage or that avoid tax, to benefit from the Chancellor’s astonishing super deduction tax break giveaway. In particular, new clause 9 would require a meaningful equality impact assessment of capital allowance super deductions that must cover the impact of those provisions on households at different levels of income; people with protected characteristics; the Treasury’s compliance with the public sector equality duty; and equality in different parts of the UK and different regions of England.

For most of us, one of the key consequences of the pandemic has been to illuminate far-reaching health and socioeconomic inequalities in many countries. However much this Government try to conjure otherwise, it is just a statistical and factual truth that, as a result of years of cruel Conservative austerity followed by the callous Conservatives’ handling of the covid crisis, the pandemic’s impact has fallen disproportionately on the most vulnerable individuals and along gendered, ethnic, occupational and socioeconomic lines.

Inequalities in people’s protection from and ability to cope with this pandemic and its tremendous societal costs have stressed the importance and urgency of the societal changes needed to protect population health and wellbeing. According to the statement issued by independent experts of the special procedures of the United Nations Human Rights Council, condemning the Commission on Race and Ethnic Disparities’ report:

“The reality is that People of African descent continue to experience poor economic, social, and health outcomes at vastly disproportionate rates in the UK.”

Women—particularly the poorest women, black, Asian and minority ethnic women, disabled women, lone parents and young women—not only have been badly hit by the pandemic, but have suffered for years under this Government’s brutal austerity onslaught. Yet, coming in at an enormous £12 billion for 2021-22, the Chancellor’s announcement of a super deduction on purchases of capital goods by businesses was one of the largest spending items in the spring Budget. In fact, some argue that it is one of the largest single-year tax giveaways ever enacted by a Government. And who will it benefit? Although the Chancellor claimed in his speech that the Government’s response to covid had been “fair”, women, those on low incomes and those from BAME backgrounds stand to benefit the least from the untargeted tax breaks for large companies through the super deduction. We know that more businesses—and larger ones—are owned by men than by women. As such, it is important to recognise there are many potential equalities impacts to business taxation.

Incentives such as the super deduction are biggest for large firms and the Financial Secretary to the Treasury has admitted that only 1% of firms will benefit this year, as the rest are within the annual investment allowance. How can the Government justify the fact that under this Bill the rich and big business will be treated to mouth-watering tax giveaways and reliefs, despite unclear evidence about whether that will actually create the investment needed?

The Women’s Budget Group argues that this provision is likely to have “substantial deadweight costs”, bringing forward investment rather than generating new investment. The group also raised the point that it is unnecessarily limited to investment in “plant and machinery”, thereby excluding training and other human capital investments, and missing opportunities regarding the transition to a lower-carbon economy that recognises the economic benefits of spending on the social infrastructure that our public services provide. This goes to the crux of the problems with this Finance Bill, and with the Government’s lack of vision for a green recovery based on intersectional socialist economics and progressive taxation.

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to speak in this debate, Sir Charles. I rise to speak in support of amendment 53, which I hope will encourage the Government to bring some rigour and meaning to their rhetoric of levelling up and the use of taxpayers’ money.

In a Budget that confirmed £17 billion of spending cuts, relative to March 2020 plans, the Chancellor’s decision to announce the super deduction, equivalent to forgoing approximately 20% of the UK’s corporation tax revenues, was certainly a bold one, particularly as the Financial Secretary noted in November 2020 that the existing annual investment allowance already covers 99% of all UK businesses. The House has heard this evening that the super deduction is a major tax break for the top 1% of UK businesses. We have also heard many concerns that it is a blunt tool in need of significant refinement if its perceived benefits are to be targeted to those in greatest need of support. I also point to concerns that the super deduction will disproportionately benefit London and the south-east of England and that it flies in the face of the Government’s commitment to level up the UK economy.

I draw the House’s attention to a finding from the Centre for Progressive Policy, which has calculated that, although the super deduction could amount to a tax break worth up to £513 for London residents, it would be worth only half as much in Wales, whose sum benefit is the second lowest of the UK nations and regions, with only Northern Ireland benefiting less on this measure.

I am afraid that I disagree with other hon. Members who have suggested that the super deduction might, on the contrary, actually benefit and address regional inequality. My fear is the opposite—that the super deduction will, at best, lock in existing regional inequalities and, at worst, exacerbate rather than address the UK’s geographical economic imbalance. That is why Plaid Cymru wishes to amend the Bill to require that the Chancellor considers the impact and geographical extent of the super deduction across all the UK’s nation and regions and would support calls made by other hon. Members this evening that measures should be introduced to establish a deeper evidence base for these changes. Similarly, given the urgent need for climate action and the retooling of the economy for a net zero future, this amendment also requires the UK Government to consider the super deduction’s impact on efforts to mitigate climate change.

I hope that the Government will incorporate guarantees such as these into the Bill to ensure that we truly do rebuild back better from the pandemic, rather than resuscitate the UK’s deeply flawed pre-pandemic economy. Failure to do so would make it clear that their rhetoric of support for all nations, for the levelling-up agenda and for climate action are no more than fine words and lofty intentions.

[Richard Fuller]

It is right, as our hard-working business leaders emerge from the most torrid 12 months, that the Government set a clear course for their understanding of how those businesses will be taxed in future. I would have hoped that it would have been heartening for the people who have been running businesses through these most difficult times to listen in to this debate to hear what Members of Parliament have to say on their behalf. However, personally speaking, I think that most people who run businesses will be rather saddened by what they have heard—largely, a perspective that it is wrong for people to run businesses that are profitable, that there is sin in becoming rich by creating a business that creates products that people want, rather than virtue, and a complete lack of understanding that businesses that make profits are a sign of success, rather than a sign of failure.

Personally, I am rather in favour of us increasing taxes. When this or any Government seek to increase tax on corporations, I wonder whether they realise that, essentially, they are putting a tax on success—that every pound that we take away from a business, from its profits, is a pound taken away from things that the business owner may do him or herself. They might be radical things, such as investing in and expanding the number of people who work for the businesses, investing in machinery that will make their business more competitive in terms of exports, or lowering their debt so that they are on a more substantial and more stable footing for the long term. Every time a state takes away money from enterprise it is putting at risk the resources those companies have to do those things, and the future success of this country. Therefore the Government were right to consider carefully how to balance a change in corporation taxes, and given what has happened subsequently to the Budget, the Chancellor deserves a bit of a pat on the back for understanding what would be going on in the global realm of corporation tax, as well as the crucial importance of providing some short-term incentive for businesses to invest as we emerge from the recession.

--- Later in debate ---

Designation of freeport tax sites

[Ben Lake]

I beg to move amendment 54 in clause 109, page 63, line 14, at end insert—

“(1A) An area may be designated as a special area under subsection (1) only when a motion approving the creation of freeport tax sites has been agreed by—

(a) Senedd Cymru,

(b) the Scottish Parliament, and

(c) the Northern Ireland Assembly.”

This amendment would require the Treasury to have received consent from the devolved parliaments on proposed freeport measures before introducing the changes proposed by Clause 109.

--- Later in debate ---

[Ben Lake]

It is a pleasure to have the privilege of opening the debate on this clause. I rise to speak in support of amendment 54 in my name, which would require the Treasury to have received consent from the devolved Parliaments before it could designate freeport tax sites as outlined in clause 109.

Although the amendment will not be pushed to a vote, the very need for an amendment requiring democratic safeguards and devolved consent is sadly indicative of the Government’s disregard for devolution and the interests, rights and ambitions of the devolved nations. It is jarring that today’s debate, and its pursuit of powers, paid for by taxpayers across the UK, is happening despite the Government’s failure to achieve consensus across all four nations of the UK.

That unilateralism by the Government is not only disappointing but, I would argue, economically self-defeating, as the overwhelming body of evidence, some of which has been gathered by Committees of this place, including the Welsh Affairs Committee, of which I am a member, suggests that freeports will lead to the redistribution of jobs and investment, rather than their creation across the UK, unless the policy is very closely and carefully co-ordinated.

[Jim Shannon]

The hon. Gentleman is absolutely right: one of the prerequisites of the opportunity for freeports is to ensure that every part and every region of the United Kingdom of Great Britain and Northern Ireland benefits. Although every hon. Member is right to claim it for themselves, it is important that we all benefit. Does he agree?

[Ben Lake]

I agree with the point that the hon. Member makes. If the freeport policy is to have real benefit and ring true to the rhetoric of levelling up every single nation and region of the United Kingdom, it is clear that no port—or no nation or region—should be disadvantaged by the location of any other. In effect, we cannot have a situation whereby the Government are asking for Welsh, Scottish or Northern Irish taxpayers, along with English taxpayers, to pay for freeports in certain parts of England that may actively disadvantage those in Wales, Scotland or Northern Ireland. If they did, it would appear that the Prime Minister and his Chancellor would be willing to trample over the devolution settlements in pursuit of this freeport master plan.

The Wales Act 2017 largely devolved the regulation and supervision of ports and harbours in Wales to the Welsh Government, while economic development is also of course a devolved competence. UK Government demands, such as capping the number of Welsh freeports to one—an outcome that would likely lead to an overall reduction in the number of Welsh ports—are direct infringements on the Welsh Government’s responsibility for the Welsh economy.

It is therefore especially dangerous that Wales cannot count, it would seem, on its Secretary of State to defend its interests at the Cabinet table. Instead, rather than side with Wales’s democratic institutions, the Secretary of State for Wales has threatened that a freeport will be implemented in Wales come what may, including if Wales’s Parliament were to reject such a measure.



I am conscious that there are others who wish to make perorations on this topic this evening, so I will draw my remarks to a close. I look forward to summing up at the end. Although I will not press the amendment to a vote this evening, I hope that the Minister will consider my remarks and ensure that freeports are established with the consent of all four nations and supported by an engaged public debate. Refusal to do so would be a tacit admission that this Government will not hesitate to trample over Wales’s economic interests and aspirations if they run contrary to the plans drawn up in London.

--- Later in debate ---

[Jesse Norman]

I thank colleagues, not least my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), for a very entertaining and rowdy end to the debate. Let me pick up some of the points that have been raised on this important subject.

The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) asked about expected revenue for freeports. As she will be aware, it is not really appropriate to comment on that at the moment. These tax sites have not yet been agreed. The revenues, or at least the associated tax costs, are very much site-specific. I am therefore not in a position to comment on that, but of course once the sites have been agreed, the appropriate estimates will be brought forward.

The hon. Member for Salford and Eccles (Rebecca Long Bailey) argued—indeed, it was a recurrent theme—that freeports would have the effect of watering down employment protections. The Opposition have no evidence for that viewpoint at all. There is no deregulatory agenda whatever with freeports. Businesses and freeports will have to abide by UK worker and environmental regulations, national minimum wage standards, workers’ rights and the rest of it, just as any other company would anywhere else in the UK.

The hon. Member for Gordon (Richard Thomson) raised the topic of freeports in Scotland. He did not remind the Committee, but he will be aware, that the Scottish Government originally rejected the idea of a freeport, then rather changed their tune when they saw the local reaction. I encourage him and the Scottish Government, whatever their complexion after the election, to step forward and engage with the Government so that we can agree a freeport in Scotland.

My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) talked about the different elements, and was worried that somehow the offer had been watered down. I reassure him that, although he did not notice that the structures and buildings allowance is legislated for in the Bill, the employer national insurance contributions relief will be legislated for in a forthcoming Bill and the business rates relief will follow in due course.

My hon. Friend the Member for Thurrock (Jackie Doyle-Price) rightly talked about the magnificent port at Tilbury. I have visited it myself, and a thoroughly splendid and impressive thing it is too. Finally, my hon. Friend the Member for Bridgwater and West Somerset put in what I think we can all agree was a typically low-key and restrained performance, for which we very much thank him. He put me ineffably in mind of a great moment in a work of literature and film with which I am sure the House will be familiar: “Animal House”. There is a marvellous moment where John Belushi’s future senator John Blutarsky says, “Was it over when the Germans bombed Pearl Harbor?” There is a pause, and someone says, “Leave him, he’s rolling.” That is what I felt we should do with our dear friend the Member for Bridgwater and West Somerset. With that, I will sit down.

[Ben Lake]

It is a pleasure to close the debate this evening. We have had a very beneficial debate on two main points about freeports and regional economic development. We had a very good discussion about the merits or otherwise of freeports for the areas in which they are located, and although I think we will continue to discuss whether any growth of investment generated by the sites will be new, partially new or a substitute for or displacement of economic activity elsewhere, it has been a good debate nevertheless.

My final point leads on from the question of whether any growth in investment would be new or a reflection of displacement of activity from elsewhere. That is particularly important when it comes to the question of levelling up and addressing regional inequalities and disparities. We still need to discuss that further. One potential solution in Wales’s case, for example, may be to look again at the cap of just one freeport in Wales. Perhaps we should have at least two. I am looking to other Members—perhaps that is one way to address the disagreements we have had tonight.

Either way, we have had a very good and beneficial debate and although I do not want to press my amendment to a vote, I hope that the Minister will consider how the Government can better work with the devolved Governments to address some of these concerns and the need to co-ordinate policies for our economic development. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 109 to 111 ordered to stand part of the Bill.

Schedule 21 agreed to.

Schedule 22

Relief from stamp duty land tax for freeport tax sites

Amendments made: 43, page 231, line 8, at end insert—

“(ca) Part 3A makes provision about cases involving alternative finance arrangements,”

This amendment is consequential on Amendment 52.

Amendment 44, page 231, line 26, after “sites),” insert

“other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,”

This amendment is consequential on Amendment 45.

Amendment 45, page 231, line 39, at end insert—

“3A In section 81ZA (alternative finance arrangements: return where relief withdrawn)—

(a) in subsection (1), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”,

(b) in subsection (3) (as substituted by Schedule 17 to this Act), at the end insert—

“(c) where the relief was given under Part 2 of Schedule 6C, the last day in the control period on which the qualifying freeport land is used exclusively in a qualifying manner.”, and

(c) after subsection (6) insert—

“(6A) Terms used in paragraph (c) of subsection (3) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule (as modified by paragraph 10A of that Schedule).

(6B) Paragraph 10 of Schedule 6C (as modified by paragraph 10A of that Schedule) applies for the purposes of subsection (3)(c) as it applies for the purposes of paragraph 8 of that Schedule.”

“3B In section 85(3) (liability for tax), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”.”

This amendment makes provision about returns, and liability to SDLT, in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements.

Amendment 46, page 231, line 40, leave out “86(2)” and insert “86”

This amendment is consequential on Amendment 49.

Amendment 47, page 231, line 40, after “tax)” insert “—

(a) in subsection (2),”

This amendment is consequential on Amendment 49.

Amendment 48, page 231, line 41, after “sites),” insert

“other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,”

This amendment is consequential on Amendment 49.

Amendment 49, page 231, line 41, at end insert “, and

(b) in subsection (2A), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”.”

This amendment makes provision about the payment of SDLT in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements.

Amendment 50, page 231, line 44, after “sites),” insert

“other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,”

This amendment is consequential on Amendment 51.

Amendment 51, page 232, line 2, after “81(1A);” insert—

“(azab) in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section);”

This amendment makes provision about interest on unpaid SDLT in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements.

Amendment 52, page 235, line 25, at end insert—

“Part 3A

Alternative finance arrangements

Cases involving alternative finance arrangements

10A (1) This paragraph applies where either of the following applies—

(a) section 71A (land sold to financial institution and leased to person), or

(b) section 73 (land sold to financial institution and re-sold to person).

(2) This paragraph applies for the purposes of determining—

(a) whether relief is available under Part 2 of this Schedule for the first transaction, and

(b) whether relief allowed for the first transaction is withdrawn under Part 3 of this Schedule.

(3) For those purposes this Schedule has effect as if—

(a) references to the purchaser were references to the relevant person, and

(b) the reference in paragraph 3(2)(d) to land held (as stock of the business) for resale without development or redevelopment were a reference to land held in that manner by the relevant person.

(4) The first transaction does not qualify for relief under Part 2 of this Schedule except where it does so by virtue of this paragraph.

(5) In this paragraph—

“the first transaction” has the same meaning as in section 71A or 73 (as appropriate);

“the relevant person” means the person, other than the financial institution, who entered into the arrangements mentioned in section 71A(1) or 73(1) (as appropriate).”—(Jesse Norman.)

This amendment makes provision about the operation of Schedule 6C to the Finance Act 2003 (relief from SDLT for freeport tax sites, inserted by Schedule 22 to the Bill) in cases involving certain alternative finance arrangements.

Schedule 22, as amended, agreed to.

New Clause 25

Review of freeports

“(1) The Chancellor of the Exchequer must review the impact of sections 109 to 111 and schedules 21 and 22 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter.

(2) A review under this section must estimate the expected impact of sections 109 to 111 and schedules 21 and 22 on—

(a) job creation within the sites designated as freeports and across the UK as a whole,

(b) revenue from corporation tax and stamp duty land tax within the sites designated as freeports and across the UK as a whole,

(c) levels of artificial tax avoidance and tax evasion across the UK as a whole,

(d) levels of criminal activity,

(e) the necessary level of staffing for HMRC and the UK Border Force, and

(f) departmental spending by HMRC and other departments on enforcement.”—(Abena Oppong-Asare.)

This new clause would require the Government to review the impact of the provisions of the Act introducing freeports and publish regular reports setting out the findings.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Finance (No. 2) Bill

Ben Lake Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

Diolch, Madam Deputy Speaker, for calling me to speak in this debate. It is a pleasure to follow the hon. Member for Bethnal Green and Bow (Rushanara Ali). Last month’s Budget was a missed opportunity to protect jobs and incomes, support struggling employers, and set out a clear vision for a green, sustainable and fairer post-pandemic economy that works for all four nations of the United Kingdom. Instead, the Budget became an exercise in political showmanship, which further undermined devolution and put party politics above the collective good. Supposedly new spending pledges were proven to be nothing of the sort, most clearly at Wales’s expense, where only 5% of the spending announced was new and unconditional. That disappointment was compounded by the proposals unveiled for the so-called levelling-up fund, which I am afraid does a disservice to Wales and to devolution.

The Bill confirms some of the most damaging elements of that Budget-day display. It prematurely ends the VAT reduction to help hospitality businesses across the UK. It neglects fully to correct the exclusionary failures of the self-employment income support scheme, and it fails to guarantee the permanency of the £20 a week universal credit uplift. Those measures alone suggest that the Bill will hamper rather than encourage our short-term recovery.

Equally worrying is the Government’s clear determination to re-establish the pre-pandemic dysfunctional UK economic model through a “Westminster knows best” approach that is openly hostile to devolution. That is why, to ensure that Westminster works with rather than against the devolved nations on policy issues such as freeports, Plaid Cymru will table amendments requiring the consent of the devolved Parliaments before freeports can be established in their respective nations. That such amendments are necessary is sadly indicative of the Government’s centralising tendencies over the economy, despite their appalling record on delivering schemes such as tax reliefs, which worsen rather than address regional inequality in the UK.

For instance, through the UK Government’s two main innovation investment reliefs—the enterprise investment scheme and the seed enterprise investment scheme—between 2015 and 2018, start-ups in London received four times more per head of population than businesses elsewhere. In contrast, only 1.3% of UK-wide investment through the enterprise investment scheme was in Wales.

Noting the significant risk that the proposed capital allowance super deduction might turbocharge regional inequality in the UK, Plaid Cymru will also table an amendment requiring the Government to consider the impact and geographical reach of that super deduction. Given the pressing challenge of climate change, and the need to recapitalise our economy to further decarbonisation efforts, our amendment will require the Government to consider the impact of a super deduction on climate change mitigation efforts. I sincerely hope that the Government will be supportive of that amendment, particularly given the Bill’s overall lack of measures and support for the green transition—except, it is worth noting, a welcome change to the Bank of England’s mandate.

Although I welcome the proposed plastic packaging tax, even that illustrates Westminster’s inability adequately to act on the pressing issues facing society across the four nations of the UK. Only days ago it was reported that the much vaunted deposit return scheme has been further delayed until 2024. Having been unnecessarily tied to Westminster inaction on that issue, Wales will by then have waited six years for such a scheme to come to pass. That outcome is made even worse by the Government’s United Kingdom Internal Market Act 2020, which undermines Welsh efforts to counter plastic pollution, and pales in comparison to Scotland’s ability to deliver a bespoke system by next year.

In conclusion, this Bill fails to correct the flaws in the Government’s pandemic response, fails to live up to their rhetoric on levelling up and fails to match ambitious climate rhetoric with policy action to further the green transition. Instead, the Bill not only reflects the deeply misguided sense that the Treasury knows best when it comes to regional inequality, but misses an opportunity to provide a long-term plan for our post-pandemic recovery.

Spending Review 2020 and OBR Forecast

Ben Lake Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

I am grateful to my right hon. Friend for his comments. I would distinguish between two things. The borrowing that we are carrying out this year, which is, as he knows, at a peacetime high, is financed through the gilt markets. He will be pleased to know that we push as much as we can to the long end of the curve relative to our international peers; the average maturity of our debt stock is about 14 or 15 years, which is almost double the average of the G7. He is right that we should do that. I would differentiate that from an ongoing structural deficit, which is with us for many years. As he said, our first priority coming out of this will be to get growth going again.

[Ben Lake (Ceredigion) (PC)]

On average, Wales received £400 million a year from EU structural and investment funds, sadly well above the UK per capita average due to our greater relative need. Promises have been made that Wales will receive not a penny less from the UK shared prosperity fund. The Chancellor has stated that he will match total UK funding, but will he also confirm that Wales’ share will not be diminished, that it will represent additional investment, and that the fund will be allocated according to need?

[Rishi Sunak]

We have said that as the EU funding that we are currently financing runs off, we will step in and replace it up to the tune of about £1.5 billion, which is the UK amount. Obviously there are conversations to be had about how best to allocate that, what kinds of projects, and how it should be done. Some initial thoughts on that are published today, alongside more than £200 million of funding to start piloting the approach and working with communities to see what works best. I know that people in Wales will welcome that and I look forward to seeing the proposals that they come up with.

Small Breweries Relief

Ben Lake Excerpts

Monday 9th November 2020 Commons Chamber

[Kemi Badenoch]

My right hon. Friend asks a really good question. The truth is that there is never a good time according to the industry; there is never a perfect time. When people have a dispute, it depends on which side of the argument one listens to. This will be addressed in the technical consultation. We must remember that this measure is not coming in until 2022, so there will be time. We will publish more information about the evidence that we have received as part of our upcoming consultation, which will be towards the end of the year.

[Ben Lake]

I appreciate the Minister’s point that there is never a good time to try to get consensus from the industry, but surely we can agree that the past nine months has seen quite exceptional circumstances that have had an impact on the entire industry, whether that is small breweries or the bigger ones, particularly given the uncertainty with the on-trade. Breweries such as Mantle Brewery and Penlon Brewery in my constituency of Ceredigion are also so dependent on tourism. Surely introducing these changes at a time of such uncertainty is unwise and should be reconsidered.

[Kemi Badenoch]

That point would be valid if it were proved that every single business was going to be negatively affected. If hon. Members let me get to the point, they will see that that is not actually the case. My officials could probably give me enough material to talk about this issue alone for an hour. However, I will summarise and make the key points. All the evidence points to the fact that small breweries relief does not match industry production costs. Economies of scale in brewing are rather gradual and do not match the all-or-nothing approach adopted by the current scheme. In fact, some of the evidence suggests that there is a growth trap, whereby brewers in a certain range enjoy lower production costs than brewers many times their size as a result of small breweries relief. This is not healthy for any industry.

The amount spent on the scheme has grown rapidly, from £15 million in 2002 to over £65 million in 2019, despite the fact that beer volumes were down over 30% during this period. We owe it to taxpayers to make sure that these growing sums are being used in the most effective way.

Future of Financial Services

Ben Lake Excerpts

Monday 9th November 2020 Commons Chamber

[Rishi Sunak]

The hon. Gentleman is absolutely right about the importance of credit unions in providing credit to those who need it. My hon. Friend the Economic Secretary recently hosted a roundtable to make sure the industry is getting the support it requires.

[Ben Lake (Ceredigion) (PC)]

The announcement of a sovereign green bond is to be welcomed as an important step forward in the financing of infrastructure and industry, and is essential to achieving net zero, but what sort of access will the Welsh Government have to this important source of green finance to ensure that projects and priorities that fall within its remit are adequately supported, given that the Chancellor seems to have ruled out empowering the Welsh Government to issue their own green bond?

Lockdown: Economic Support

Ben Lake Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Steve Barclay]

My right hon. Friend makes an interesting point. She will know that in terms of the epidemiology and the guidance, that is for my right hon. Friend the Secretary of State for Health and Social Care, but she is right with these questions to point to the economic impact of the measures. That is something on which we continue to have close dialogue with colleagues in the Department of Health and Social Care to ensure that she gets the clarification she seeks.

[Ben Lake (Ceredigion) (PC)]

Yesterday, the Prime Minister stated in the House:

“The furlough scheme is a UK-wide scheme and will continue to be available wherever it is needed.”—[Official Report, 2 November 2020; Vol. 683, c. 54.]

Will the Minister therefore confirm whether the Prime Minister was right and that furlough support will be available to Wales in the future, should public health priorities require restrictions to be reintroduced? A simple yes or no will suffice.

[Steve Barclay]

Several times now I have quoted what was said. The Prime Minister said that the Government will always be there to provide support to all parts of the United Kingdom. It is worth taking a step back and looking at the fact that the UK-wide ability to act is how we have been able to provide so much support across the UK with schemes such as the furlough scheme, the self-employed scheme, the loans, extensions and so forth. It is our ability to act across the United Kingdom that has helped many businesses to weather the storm.

Covid-19: Economy Update

Ben Lake Excerpts

Thursday 22nd October 2020 Commons Chamber

[Rishi Sunak]

I can give my hon. Friend that assurance. He mentioned some numbers, and that is ultimately what it is about. We stand in this place and talk about many billions of pounds and policy, but often it is about the people and the jobs and livelihoods that we are trying to protect. I am delighted to hear that the 20,000 people he mentioned have benefited from the support that this Government have put in place, and I can give him and them the assurance that we will continue to do exactly that.

[Ben Lake (Ceredigion) (PC)]

As Wales enters a firebreak lockdown tomorrow evening, there are concerns that there will be a week-long gap in support between the end of the furlough scheme and the introduction of the new wage support scheme. It would be good if the Chancellor could consider giving Welsh businesses early access to that scheme. May I ask him to clarify the eligibility criteria, in particular whether seasonal workers will be eligible for support?

[Rishi Sunak]

There will not be any gap in support, I am pleased to tell the hon. Gentleman, because, as he knows, the CJRS runs all the way to the end of this month and the job support scheme starts on 1 November. There will be complete coverage and no interruption. We provided Barnett funding on the grants from the moment I announced them, so that is also available to the Welsh Government. With regard to the specific treatment of seasonal workers and the computation of the reference earnings, that is set out in the guidance for the CJRS and that will remain consistent in the new job support scheme.

Additional Covid-19 Restrictions: Fair Economic Support

Ben Lake Excerpts

Wednesday 21st October 2020 Commons Chamber

[Steve Barclay]

My hon. Friend is absolutely right, and we debated this yesterday. Much of the debate is about tier 3, but there are businesses that are feeling the impact in tier 2, and we are acutely aware of that and we are discussing that with business leaders. The key issue there is that we have taken toggling measures, for example, the cut in VAT and the extension of the loans. |As he knows, as a senior business figure himself, cash flow is a huge issue for businesses, and the Chancellor has been very keen to work constructively with all business leaders, the trade unions and others, and to consult widely. We have been willing to listen and to extend, for example, the loans that were available in order to pick up exactly the point my hon. Friend makes in terms of businesses in tier 3.

[Ben Lake (Ceredigion) (PC)]

The Minister mentioned earlier that he will meet the Finance Ministers of Wales, Scotland and Northern Ireland later this afternoon. Is he in a position to tell the House whether he expects further support packages for Wales to be announced at that meeting ahead of the two-week firebreak that will come in on Friday?

[Steve Barclay]

We have a long-standing and established methodology in terms of support across the United Kingdom through the Barnett process that allows the broad shoulders of the United Kingdom—[Interruption.] I suspect that the hon. Member for Glasgow North (Patrick Grady) wants to come in on that point, so I will give way. It will be done through the Barnett process, but there are some specific issues raised, such as the guarantee, which we have discussed previously.

Areas with Additional Public Health Restrictions: Economic Support

Ben Lake Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

My hon. Friend is right that the youth investment fund is a very important allocation—£500 million was allocated in September 2019 under the fund. However, he speaks to a more fundamental point, which is that many of those most affected by covid’s economic consequences are the young, who tend to concentrate in areas such as hospitality that are most impacted. That is why the Chancellor has set out measures such as the £2 billion for the kickstart scheme, the tripling of traineeships, the £2,000 for apprentices and the doubling of work coaches. We recognise that it is not just the number of young people whose jobs go, but the length of time that they are out of the labour market that is absolutely crucial. Both of those are key areas of focus and I look forward to working with him in our response on them.

[Ben Lake (Ceredigion) (PC) [V]]

Further to the question asked by the hon. Member for High Peak (Robert Largan), what consideration have the Government given to the impact of local lockdowns on businesses and supply chains located beyond the lockdown areas? What support will be made available to businesses that are materially impacted by restrictions imposed elsewhere?

[Steve Barclay]

As I said to my hon. Friend the Member for High Peak (Robert Largan), it is absolutely valid for colleagues across the House to raise the wider impact. That is partly why we gave the guarantee on Barnett consequentials, which has meant that the Welsh Government have benefited to the tune of £4 billion. It is why we are engaging very closely with the Welsh Government, among others, on shaping our response, and why the Chancellor set out, through the winter plan, the package of additional measures, building on his plan for jobs—the £30 billion that was announced in July. We recognise that it is not only the areas most affected by lockdown that have pressures in terms of retaining jobs or cash flow challenges; the winter plan spoke to the issue much more widely across all parts of the United Kingdom.