Childcare

Debate between Catherine McKinnell and Stella Creasy

Monday 13th September 2021 Westminster Hall

[Catherine McKinnell]

I thank the Minister for that response, but I fear that the more than 112,000 petitioners who signed the petition would disagree with her assessment that there is not a problem to address. Indeed, Joeli Brearley of Pregnant Then Screwed and the 12 organisations that supported the in-depth research and survey of the parent and provider experience of the childcare system would disagree with the Minister’s assessment.

The petition is very reasonable. It is not asking for a specific amount of funding. It is not even diagnosing exactly what should happen. The petition is asking the Government to hand over to experts for a full assessment of what we want our early years and childcare sector to be and to provide.

I agree—I think hon. Members in all parts of the House who spoke in this debate agree—that we need to get the best out of the funding that goes into the sector. I agree that it should not be a party political issue. The way to ensure that that money is spent in the best way possible, however, is not just to turn down the petitioners’ request for an independent review, but to take it away and consider it.

I appreciate what the Minister said: that this does not fit with the current Budget and spending review schedule. However—I implore her again—the petitioners are not asking for a specific amount of money; they are asking for a wholescale review. We can keep going on, sticking plasters over the cracks, pumping some money here or there, or putting a funding pot in place, but in reality we have a postcode lottery, a family lottery, and parents crying out for more help and support. We have many people silently falling out of the workforce, a productivity problem and a crisis point for many families, with many in the most deprived families just not being heard or supported at all.

[Stella Creasy]

My hon. Friend is making a passionate plea for why we need the review. One issue that the review could settle is the Minister’s claim that the country has not seen the closure of any places, although the evidence from the National Day Nurseries Association is very clear: in 2019-20, there was an increase of 300 nurseries in this country; but in 2020-21, there was a net minus of 400 nurseries. The Minister is shaking her head, but does she recognise that at the very least, an independent review could get to the bottom of that, so that we as parliamentarians could make informed decisions and have informed debates, because she seems to think something completely different from what the sector is telling us?

[Catherine McKinnell]

I very much agree with my hon. Friend. With the greatest of respect, I think that petitioners listening to the Minister’s response will feel that hers is an alternative reality, an alternative universe, from the one that they are living in. Parents and providers are struggling. Early years staff are undervalued and underpaid. Childcare is becoming a big political issue, and it will not go away any time soon.

I urge the Minister to take away the petitioners’ request. I appreciate that the answer today is no, but I say, “Don’t close the door on this,” because it needs to be looked at. Not only are parents and providers being let down; ultimately it is the children who would benefit from getting the best early years and childcare system in the world—not just the most expensive, and we are nearly there, but the best in world. Let us aspire to that, and let us ask the experts to guide us in a cross-party way on how we can best achieve that.

Question put and agreed to.

Resolved,

That this House has considered e-petition 586700, relating to funding and affordability of childcare.

Finance Bill

Debate between Catherine McKinnell and Stella Creasy

Monday 1st July 2013 Commons Chamber

[Catherine McKinnell]

It is a pleasure to speak here today on these important issues. I shall focus particularly on those covered by amendment 56 and by new clause 12. First, however, I shall touch on new clauses 4 and 5, and on new schedules 1 and 2, which relate to measures announced in Budget 2013. Together, they introduce three separate rules to combat what the Minister describes as loss buying. That activity goes against the accepted concept that losses brought forward on or after a change in company ownership should be allowable for corporation tax relief to the company and to the trade in which they occurred.

The Government’s new clauses seek to strengthen the loss-buying rules, first by expanding the application of chapter 16A of part 2 of the Capital Allowances Act 2001 so that it applies to “qualifying activities” and not just trades, as is currently the case. The other two rules introduced by the clauses are targeted anti-avoidance rules and will be included in a new part of the Corporation Tax Act 2010. As a consequence of the new clauses, companies will be prevented from entering into arrangements to access, as part of a business transfer, various forms of unrealised corporation tax losses from unconnected third parties. The Opposition support the introduction of these anti-avoidance measures, but it would be helpful if the Minister outlined, in response to this submission, what additional annual yield the Exchequer is expected to receive as a result of their introduction.

Before speaking specifically to the Opposition’s new clause 12, I would like to refer more generally to the Government’s general anti-abuse rule, which will be introduced by clauses 203 to 212, and take the opportunity to probe the Minister on its implementation, because it was last discussed in Committee of the whole House back in April. The Government have made much of the GAAR, their flagship policy for tackling tax avoidance, but, as the Minister knows, several serious concerns were raised about its likely impact, or lack thereof, during our debate in April.

We have been advised that the GAAR will target only “egregious”, “very aggressive” or “highly abusive” avoidance schemes, which the Bill defined as those that use “contrived or abnormal steps” to obtain a tax advantage. Yet the GAAR guidance’s definition of what those entirely subjective terms mean is inadequate. It states merely that they will be interpreted and applied in their “normal” sense. I do not know how Government Members would apply those terms in their normal sense, but I am interested to know whether Opposition Members would know how to apply those terms in their normal sense, given that we will be voting on that tomorrow when the Bill is considered on Third Reading.

[Stella Creasy]

I wonder whether my hon. Friend, like me, is concerned that the subjectivity and lack of clarity on this subject is a little like the concept of pornography; we all know it when we see it, but defining it is very difficult unless there is clarity. With tax avoidance schemes, clarity is absolutely crucial.

[Catherine McKinnell]

I fear that you, Madam Deputy Speaker, might accuse me of straying into rather unexplored territory if I were to compare tax avoidance to pornography, so I simply acknowledge the point my hon. Friend makes, which is that they are very subjective terms. That point has been made not only by me, but by many experts who are very concerned about the wording in the legislation. That is why it would be useful if the Minister responded to some of the concerns that have been raised during the Bill’s consideration.

The GAAR is projected by the Government to result in an additional yield of only £85 million a year by 2017-18. That is a notable sum of money, but it does not even come close to putting a serious dent in the £5 billion tax gap estimated to arise each year as a result of avoidance activity, and it is a mere drop in the ocean compared with the overall annual tax gap of £32 billion estimated by HMRC, which we know is a conservative projection. We also know that concerns remain about the so-called “double reasonableness” test and the GAAR advisory panel that will judge whether arrangements can

“reasonably be regarded as a reasonable course of action.”

As I have highlighted previously, what one person—let us say, a tax expert who has spent his or her entire career advising companies on how they might reduce their tax liability—regards as reasonable could be very different from what a member of the public or, indeed, a Member of this House might consider to be reasonable.

--- Later in debate ---

[Stella Creasy]

My hon. Friend is making a powerful case about the importance of the measures in question for developing countries. Does she agree that the Exchequer Secretary, having spoken about the importance of acting multilaterally and understanding how international companies operate, should be able to see the benefits of transparency to the UK tax system? Surely one thing that we are concerned about right now is UK companies using overseas territories to avoid paying tax in the UK. If we had the transparency that we suggest and HMRC worked with countries such as Tanzania, there would be benefits for both UK taxpayers and developing nations. It would be a win-win situation for all concerned.

[Catherine McKinnell]

My hon. Friend makes a good point. The Government have trumpeted their commitment to 0.7% of GDP being spent on international aid, but they stand by and say that they can do little to assist in ensuring that that is not swallowed up by the three times more that is lost in tax avoidance every year. If they could assist, that would be a win-win situation for developing countries and the UK.

In new clause 12, we call for additional transparency in what the Exchequer Secretary admitted are four fairly reasonable requests. Those requests are well considered and are made in all sincerity. We want to be able to bring in additional tax receipts for the UK Treasury, but we also want to use our powers and information, and the additional intelligence that we would gain from transparency, not only to benefit the lives of UK citizens, for whom public resources could be funded through the tax receipts, but to support developing countries.

My hon. Friend makes the point that it is a win-win situation, and we very much agree. That is why we urge hon. Members to support our new clause. As I have said, it is completely reasonable and I cannot see why Government Members would oppose it, particularly Liberal Democrat Members—I am pleased that the hon. Member for Burnley (Gordon Birtwistle) is in the Chamber to hear this debate on an issue that I know the Liberal Democrats feel strongly about. Indeed, at their recent party conference they held a debate in support of some of the measures we are proposing. I therefore see no reason why Liberal Democrat Members will not vote with the Opposition in the Lobby this evening.

Public Sector Funding

Debate between Catherine McKinnell and Stella Creasy

Wednesday 23rd March 2011 Westminster Hall

[Catherine McKinnell]

I do not agree with the hon. Gentleman’s assertion. I agree that there are some fantastic voluntary organisations that do not rely on any public funding. They are supported, and have to be supported, across the country, and they are warmly welcomed. However, one of the main issues is that the abilities of those organisations are not necessarily distributed in such as way as to target the most hard-to-reach areas, which require more structured funding to support and assist voluntary activities. That point has been made very clearly by my hon. Friends and, indeed, by Government Members.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

There might be another interpretation of the points raised by the hon. Member for Aberconwy (Guto Bebb), which is that there is a fundamental misunderstanding of the relationship between the voluntary sector and the state, and of the importance of funding in ensuring that the voluntary sector has had the capacity to thrive over the past 13 years. One of the dangers now is that services will be affected when funding is taken away and that the capacity to thrive, as well as the voluntary sector’s ability to deliver activities and to be a voice for many people in our communities, will be damaged. Some of the comments that we have heard reflect a misunderstanding of why it is so important to support the voluntary sector if we want volunteering to thrive and if we want to tap into all the benefits it offers our society.

[Catherine McKinnell]

I thank my hon. Friend for her intervention. That is exactly the point that needs to be made. As my hon. Friend the Member for Worsley and Eccles South said at the beginning of the debate, there is genuine concern that we need to understand how the voluntary sector works, how it is funded and how it is supported. There is huge concern about the Government’s pursuit of an economic policy that is reducing the deficit at a rate that is too fast, that is reckless and that will cause long-term damage to our civil society.

I want to put those issues on the record. The voluntary sector in Newcastle continues to thrive, but it sits in sheer trepidation, because most organisations have no security of funding beyond the end of this month.