Finance (No. 2) Bill

Charles Walker Excerpts

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op) [V]]

The stamp duty holiday tells us all we need to know about the Government’s priorities. Amid an awful pandemic that has seen the highest death rates in the world, when something like 4 million people have been infected and many of them will face long covid, and when something like 7.6 million people are in hunger, we need investment in the wider economy to get us moving again. In fact, with the stamp duty holiday the Government have spent much of £5 billion, over two years, on second homes. That £5 billion could have paid for 5% increases in nurses’ salaries over 15 years, given that a 5% increase would cost £330 million after allowing for the recovery of the tax on the money given in the first place.

In any case, it is not clear that the stamp duty holiday was at all necessary to stabilise the housing market, because immediately as the pandemic began to hit, the Bank of England reduced interests rates and in so doing reduced mortgage costs, supported prices and increased landlords’ margins at a time when tenants were still required to pay their rents. Given that the Bank of England had already taken action to support the market, the stamp duty holiday simply increased house prices by something like 7% between July and December 2020. That is not the right priority, and it is certainly not the right priority to invest money in second homes for people who are basically making money out of that investment from taxpayers and boosting the prices that first-time buyers face. That is why in Wales, where we have a Labour Government, second homes were not included in the stamp duty holiday, which was quite right. I therefore support amendment 81. Indeed, in Wales, we have made provision so that there are no rough sleepers during this pandemic, whereas in England, of course, there are.

The stamp duty holiday will mean that first-time buyers will find it more difficult to buy a house because deposits will need to be bigger. We are moving to a situation in which young people who want to buy a house will almost always have to depend on their parents to do so, so the distribution of the opportunity to buy a house in Britain is getting worse and worse.

In a nutshell, this Budget should have invested in all our opportunities to raise productivity, increase the number of jobs, focus on the future and keep people healthy. Instead, it has been seen as an opportunity to focus on widening inequality unnecessarily. I very much support the Labour party’s amendments.

[The Temporary Chair (Sir Charles Walker)]

We now go to Christine Jardine, who is joining us virtually.

[Christine Jardine [V]]

[Inaudible.]

[The Temporary Chair]

We will move on to Felicity Buchan.

[Felicity Buchan (Kensington) (Con)]

I speak in support of the Bill and against the amendment. The stamp duty holiday has been an unequivocal success in stimulating the market, and I welcome its extension. Many of my constituents will also welcome the surcharge for non-UK residents. In my constituency, many foreign investors buy flats and houses as financial investments, and often these lie empty; in effect, they are bank balances in the sky. This has real implications for my constituency. It leads to hollowed-out communities, and it makes it very difficult for shops, restaurants and businesses to be viable.

I welcome this Government’s focus on house building. Last year, we built 243,000 houses. That is the most in 33 years. For so many of my constituents, buying a house is almost an unobtainable dream. We need to build more houses, and we need to build more affordable housing. That is especially the case in London, where the Labour Mayor’s record of building housing has been lamentable. In 2016, he was given a budget of £4.62 billion to build 116,000 houses. How many had he done by December? Only 56,000—less than half. It is lamentable.

I also welcome the Government’s new measures on guaranteeing mortgages up to 95%. Again, this will help my young constituents and key workers to get on to the housing ladder. In my borough of Kensington and Chelsea, we have so many private renters. Some 44% of my constituents are private renters, because people cannot afford to get on to the housing ladder. Rent is a huge proportion of my constituents’ incomes. Rent is 26% of the median average income nationally. In my constituency, it is a whopping 75%, so I welcome all the support to get young people in my constituency on to the housing ladder.

I support the measures in the Bill, but like my hon. Friend the Member for Orpington (Gareth Bacon), I encourage Government to be more radical when it comes to stamp duty and to make a fundamental reform. Stamp duty is essentially a tax on social mobility. It prevents people from moving closer to new work opportunities. It prevents young and growing families from moving from one to two-bedroom flats to bigger family houses. It prevents older people from downsizing.

In my constituency, it has led to very perverse consequences. People cannot afford to move, so they start extending their houses. That has led to an onslaught of basement developments. One house in my street went down an extra three storeys below the lower ground floor. That has now been banned by my council, but this causes undue distress to my constituents and intolerable noise and disruption that goes on for prolonged periods. We have to make it easier for people to move.

I would go back to the changes made to stamp duty in 2014, in the autumn statement. It was commendable that we got rid of the slab approach, but we made a mistake on the higher levels of stamp duty, because they are punitive. The average house price in my constituency is £1.25 million. The stamp duty payable, when we do not have the holiday up to £500,000, is £68,750. That is just unaffordable. Average earnings in my constituency are 40% higher than the national average, but property prices are 415% higher, and my constituents simply cannot afford this level of stamp duty. People may well say that this is a specific issue to a few constituencies in central London and ask why this matters to the rest of the country, but I can assure them that it does matter. Transactions over £1 million amounted to only 2.5% of the transactions, but in value they equated to 32% of the transactions. So if we see less activity in the top end of the market, it is bad for the Exchequer, and we have seen that reduction in activity over the past five years, since the 2014 changes. In my constituency, the volume of transactions at the top end is down by 33% and in value they are down by 25%. So this tax is the wrong side of the Laffer curve. In summary, I welcome the Bill and the changes in it, but I ask the Government to go further.

[Sir Charles Walker (The Temporary Chair)]

Christine Jardine, welcome back.

[Christine Jardine]

Thank you, Chair. Apologies, I do not know what happened just then, but it is now a pleasure to take part in this debate.

I will be supporting amendment 81, as will the Liberal Democrats, which would ensure that the stamp duty land tax holiday no longer applies to the purchase of second homes. I will keep my remarks short, in the light of the earlier mishap. Suffice it to say that we believe that the SDLT holiday is not effective in helping first-time buyers on to the housing market. Giving a tax break to people who have already saved money for their property and can already afford a mortgage does not entirely solve the problem. Extending the SDLT holiday would serve only to avoid a cliff edge, depriving the Treasury of much-needed funds at a time when there are many extremely pressing calls on our public finances. Combined with the new lower deposit mortgage scheme launched in the Budget, its only effect is to increase demand for housing without increasing the supply of homes. For me, and for the Liberal Democrats, that is crucial. Members can see where I am going with this: we need to increase the supply of homes.

The Government need to take steps to increase the number of homes being built. They first must make and then keep to their targets, support local authorities that want to build new homes and enforce affordable homes targets. That must include building 100,000 new social homes a year. The Liberal Democrats have proposed a new rent to buy scheme, where people can build up shares in housing association homes through their rent. I ask the Government to examine the merits of that proposal. These steps would be more effective in getting people on to the housing ladder. Therefore, I ask that the amendment be supported and I ask the Government to consider the rent to buy scheme as a way of realistically helping people on to the housing ladder without increasing demand for housing that is not there.

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[The Temporary Chair (Sir Charles Walker)]

With this it will be convenient to discuss the following:

Amendment 64, in clause 93, page 54, line 15, leave out

“substitute for the period for the time being mentioned there such other”

and insert “increase the”.

This amendment would ensure that the Treasury can only increase, and not decrease, the period for which the temporary 12.5% reduced rate of VAT for the hospitality and tourism sectors applies.

Clauses 93 to 96 stand part.

That schedule 18 be the Eighteenth schedule to the Bill.

Clause 97 stand part.

That schedule 19 be the Nineteenth schedule to the Bill.

Clauses 128 to 130 stand part.

New clause 16—Review of changes to VAT—

“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to VAT by sections 92 and 93 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider the effects of the provisions on—

(a) business investment,

(b) employment,

(c) productivity,

(d) GDP growth, and

(e) poverty.

(3) A review under this section must consider the following scenarios—

(a) the extension of temporary 5% reduced rate for hospitality and tourism sectors is continued until 30th September 2021, and

(b) the extension of temporary 5% reduced rate for hospitality and tourism sectors is continued until 31st December 2021.

(4) In this section “parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

and “regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause seeks a review comparing (a) the extension of temporary 5% reduced rate for hospitality and tourism sectors being continued until 30 September 2021, and (b) the extension of temporary 5% reduced rate for hospitality and tourism sectors being continued until 31 December on various economic indicators.

New clause 30—Review into the effects of replacement of LIBOR—

“(1) The Chancellor of the Exchequer must undertake a review within six months of the passing of this Act of the effects of sections 128 and 129.

(2) This review must consider—

(a) the implications for tax revenue,

(b) effects on financial stability, and

(c) effects on businesses that use LIBOR as a benchmark, including businesses offering supply chain finance.”

This new clause would require a review into the effects of the provisions of the Bill about replacing LIBOR.

Government Response to Covid-19

Charles Walker Excerpts

Tuesday 3rd November 2020 Westminster Hall

[Taiwo Owatemi (Coventry North West) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Charles.

I thank the hon. Member for South Dorset (Mr Drax) for securing this important debate. All of us here today are saddened that we are heading into another lockdown without the Government having done everything in their power to limit the loss of lives and infections in this second wave. I worry that thousands of lives will be lost and that our health and social care sectors will be pushed to breaking point once again. While I commend the Government for listening to the Opposition and to SAGE and for following the science, I am concerned that it has come a little too late.

We are here to discuss the Government’s effectiveness in dealing with the crisis, and I would not be telling the truth if I did not say that the Government have fallen short in navigating us effectively through the crisis. But here we are, and I look forward to working collaboratively with all Members in the House to move forward and mitigate the worst of what is to come.

The Government have rightly said that the NHS will get whatever it takes to deal with covid-19, and I am sure that the hon. Member for South Dorset agrees that it should be the same for the social care sector. It is imperative that weekly testing of care home residents and staff is prioritised in order to save many lives. As I speak about my friends and colleagues in the health and social care sector, I am sure that the hon. Member for South Dorset would like to join me in paying tribute to all the frontline workers who have put their lives on the line during the pandemic.

Statistics show that 1,320 healthcare workers have died from covid. One life lost is too many and 1,320 represents a dereliction of duty on our behalf. Delays in the early stages of the pandemic meant that healthcare workers were forced to work without the requisite PPE. Staff with pre-existing conditions are still working, despite evidence showing that they are more likely to die, or become very ill, from the disease. The sacrifices that they have made makes it incredibly painful that our nurses and colleagues in the social care sector are not being paid a fair wage. There are about 759 nurses living in my constituency who will be expected to work during the deadly second wave. One way this Government can show us that they value the work of our nurses is by increasing their pay now. It is unfathomable that nurses should still have to wait until April to receive better pay for the important work that they do.

As for social care staff, I hope that the hon. Member for South Dorset will agree that those on the minimum wage should also receive increased pay. A pay rise will not compensate them for the missed birthdays, school plays and other memories not shared with their loved ones, but it will give them—nurses and social care workers—dignity in their work and help them to provide for their families, which is help that they deserve.

I wonder whether the hon. Gentleman will join me in asking the Government to ensure that just three things happen: first, that healthcare workers do not run out of personal protective equipment; secondly, that they receive a pay increase; and, thirdly, that healthcare and social care staff with pre-existing medical conditions are better protected and shielded during the second wave.

As I said, it is really important for us to learn the lessons of the first wave and to work together for all our constituents.

[Sir Charles Walker (in the Chair)]

We are now going to try to keep colleagues to five minutes.

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[Richard Drax]

Will my hon. Friend give way?

[Sir Charles Walker (in the Chair)]

Order. It will have to be quick, otherwise we will run out of time.

[Richard Drax]

This is devolve and divide. Would it not be wise for the Government not to go down the mayoral route in the future for other areas of the country?

[Daniel Kawczynski]

I absolutely agree. This is something that historians will be looking over for many years to come. We have to learn from these mistakes during the national crisis.

We have a very low infection rate in Shropshire in comparison with other parts of the United Kingdom. We are a large rural county that is very spread out. Salopians—people from Shropshire—have been following the rules, but as a result of what has been going on in other parts of the United Kingdom, we now have a lockdown, which will have devastating consequence for many of our businesses. I will be voting for the legislation on Wednesday, but I am sure, Sir Charles, that you have listened to your constituents and many small businesses, which have put so much energy and effort into creating livelihoods. So much is at risk now, and it really pains me to see that suffering.

As I said earlier, I am proud of the fact that when we came to office we reduced the annual structural deficit that we inherited from Labour from £152 billion to £20 billion a year. My hon. Friend the Member for South Dorset will remember the vilification to which we have been subjected for the past 10 years, with talk of savage Tory cuts and austerity. My goodness me, at a time when we are borrowing more than £200 billion, when we have a debt ratio of more than 103% of GDP, when we are already spending £53 billion of taxpayers’ money on debt interest and when the crisis has not even finished, I dread to think of the economic situation that we would now be in if we had followed the policies of the now suspended former Labour leader and gone for massive borrowing when we did not have a crisis.

I want to ask the Minister about something that a Conservative candidate in the forthcoming local elections has asked. Mrs Susan Coleman wants confirmation that everything is being done for ladies who are pregnant so that when they go through the process in hospital, their partners are given covid tests as quickly as possible and can be present throughout the whole process of giving birth to the child.

Finally, the leader of the Conservative group in Shrewsbury Town Council wants me to ask what happens if the R rate falls below 1 during this lockdown. Will it be possible for it to be lifted sooner than 2 December?

[Sir Charles Walker (in the Chair)]

Mr Hunt will get 5 minutes if Mr Green takes just 5 minutes and colleagues do not intervene on him, and then everybody will be treated fairly.

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[Sir Charles Walker (in the Chair)]

Thank you very much, Mr Green. Last but not least, Tom Hunt.

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[Daniel Kawczynski]

You always run out of other people’s money.

[Sir Charles Walker (in the Chair)]

Order.

[Alison Thewliss]

It is all of our money. The Member talks about other people’s money. It is all of our money. We all pay in and we all deserve to have things when we need them. Part of the situation we are in is because of that. I shall wind up, Sir Charles, because I can see the clock.

There is much talk of scientists and different scientific opinions, and that is fine. Scientists are the experts in many ways on this. We should not judge them too harshly, because we have been finding out more all the time. Those scientists have the experience and qualifications that most of us in this room do not. We can have our opinions on which scientists we want to believe, but in the end we have to take the best possible evidence, do the best we can, and try to prevent any more people from losing their lives to coronavirus in the weeks and months ahead.

[Sir Charles Walker (in the Chair)]

Ms Hayes, if you take 10 minutes and the front Bench takes 10 minutes, Mr Drax will get two minutes at the end and we will have landed this thing perfectly.

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[Helen Hayes]

I am afraid that I will not, as time is short. The consistent pattern across the world is that the countries with the highest levels of coronavirus infections also have the worst economic impacts. The two are linked. An effective approach to infection control is also protective of the economy. The tragic reality is that the UK has both the highest number of deaths of any European country and the deepest economic recession of any G7 country. The key question at this point is why the Government’s response has been riddled with so many failures. The UK entered the pandemic with a PPE stockpile which had been depleted and without emergency supply chains in place, leaving health and social care workers unprotected at the frontline of infection control. Despite the horrific data and dire warnings from Italy, Spain and France—and the knowledge that the pandemic in the UK was running just weeks behind them—the Government were too slow to introduce the first lockdown.

When faced with the challenge of PPE and ventilator procurement, and the need to establish a test, trace and isolate system, the Government instinctively turned to outsourcing companies—many without any proven track record of delivering the goods and services required but, on too many occasions, with strong links to the Tory party—instead of looking to public services. Documents leaked this week reveal Cabinet Office contacts and others were helping VIPs sell PPE to the Government outside normal procurement channels. Contact tracing—the critical tool in preventing infection spread—was suspended in mid-March, at which point the Government lost control of the virus. Since it started again, the privatised Serco test and trace system has entirely failed to reach the baseline hurdle of reliable—still less the promise of world-beating—while much more effective contact tracing has been done by hard pressed local public health teams.

The hon. Member for Ipswich (Tom Hunt) highlighted issues around compliance. Yet in failing to hold his closest adviser, Dominic Cummings, to the same rules that he had ordered the public to obey, the Prime Minister himself undermined public trust and confidence in his approach, confirming in the minds of residents across the country that we are not all in this together. For months, the social care sector was left entirely abandoned, without PPE or access to testing, but was forced to accept patients who were covid positive, resulting in huge numbers of tragic, avoidable deaths. Unlike in Wales, social care workers in England are not entitled to full sick pay if they need to self-isolate, forcing many to choose between health and safety and putting food on the table. Now the Chancellor has increased the tax on PPE by reinstating 20% VAT, affecting people buying face masks. Why have the Government introduced a mask tax in the second wave of a pandemic?

The Government were warned weeks ago that a short, sharp circuit break would be effective in limiting infection spread and mitigating the impact of a second wave. If anybody has any doubt about the need for that, I invite them to make—as I did just a week ago—a visit to their local hospital, to see how exhausted staff still feel coming into this second wave. When we talk about the need to protect our NHS, we are talking about those staff being overwhelmed by the numbers of patients who are so sick and who they have to treat. But when Labour called for a short, sharp circuit break, the Prime Minister ridiculed the idea, and the Chancellor doubled down to block it. It is clear that the delay has cost both lives and livelihoods, and has deepened the scars to our economy. We now face a much harder lockdown with a far higher cost, because the Government have once again acted far too late.

While the Government have our support for the additional measures this week, their response to this deadly pandemic has been characterised by a lack of preparedness, dither and delay, prioritising who they know over who is best placed to deliver, and failing to heed and act on the advice of scientists. Families and communities across the country are paying a devastatingly high price for their incompetence.

[Sir Charles Walker (in the Chair)]

Paymaster General, could you leave two minutes at the end for the proposer of the debate? Thank you.

Finance Bill

Charles Walker Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[Sir Charles Walker (Broxbourne) (Con)]

The chief medical officer has said that we will have to learn to live with covid-19 for perhaps the next 18 months. I have received scores of emails from constituents who are fearful of losing their business, their employees and ultimately their homes because of the current crisis, so living with covid-19 also has to mean working with covid-19.

This is not a lives versus the economy argument, as some have disgracefully suggested. Most hon. Members know that the economy is lives and that the two march hand in hand. As each day passes, fractures in supply chains and the onward routes to market grow deeper and will therefore take longer to repair. If producers do not have the raw materials to produce, they do not produce. That is a real problem, so it is no good suggesting or thinking that in two or three weeks, in two or three months or in six months we will be back to work and everything will be fine. It will not; supply lines will take time to gear up again, and I hope that the Finance Bill will take that into account. Without cement and without plaster, it is very difficult to build homes.

I hope that the Bill will address the following concerns. Will it look again at the business interruption loan scheme? It is just not sensible for banks to ask desperate businesses, “Can you give us a cash forecast for the next nine months?” Of course they cannot; nobody can. The Government cannot give a cash forecast for the next nine months, let alone a business.

Can we look again at extending the £25,000 grant scheme to all businesses that have rates assessed at £51,000 or less? There are many good businesses not directly involved in leisure, tourism or hospitality, for example, who are nevertheless feeling the pain of this crisis and fear for their futures and that of their colleagues.

Can we also look at dividends? In my constituency, PB plumbing has been in business for 30 years. It is a great little family business that supports the pub trade in the constituency and surrounding constituencies. The founder/owner of that business pays himself with dividends, mostly—he is not a greedy man. This is the way that he structured his business but he is really not now eligible for any form of support, and I think that that needs to be addressed.

We heard this afternoon—the hon. Member for Oxford East (Anneliese Dodds) mentioned this during the statement earlier—that there needs to be some flexibility in furloughing. It would be really useful for many businesses to be able to have a member of staff in for one or two days a week, just to keep things ticking over and going during busy periods. I know the Government say that this is a very difficult thing to achieve, but lots of things are very difficult to achieve and this Government are the Government to achieve them. I say this very generously: the Government are getting things right. They just have to get things even more right, if that is possible.

We have a fantastic Treasury Minister here today, and we need a dedicated Treasury Minister responsible for filling in the gaps. I sometimes think that the media have better access to Ministers not only than I do, but, more worryingly, than my constituents do, so let us have a consultation with all colleagues. How can these schemes be made better? There are these Downing Street statements every evening, where the media get to ask questions. I think there are some fabulous people in the media. There are a few moderate ones, but there are some very good ones. However, let us allow small businesses—they are the engine of our economy—to ask questions.

In my remaining minute, I will focus on one constituency business, called Kupros Dairy. It makes fabulous, award-winning cheeses, which it was selling to 200 great restaurants in London and a few specialist food shops. All of these restaurants are no longer open, so its market has entirely disappeared. Supermarkets will not take specialist cheeses in the main, because they cannot stock them from Land’s End to John O’Groats—by the way, the supermarkets have done a simply fabulous job in rising to this challenge. Could the Minister get in touch with Dave Lewis of Tesco and others and ask them to have a dedicated aisle, or part of an aisle, for local produce? That would save Kupros Dairy and allow it to start making cheese again, stay in business and employ people and pay mortgages.