Budget Resolutions

Debate between Christine Jardine and Anthony Browne

Wednesday 27th October 2021 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

The hon. Lady agreed with the point made by the right hon. Member for Kingston and Surbiton (Ed Davey) on bank taxation. Does she agree that 28 is higher than 27? The corporation tax rate on banks is currently 27%, and after the rise in corporation tax and the change to the bank corporation tax surcharge it will be 28%. By anyone’s reckoning that is an increase in taxation on banks, not a decrease.

[Christine Jardine]

I thank the hon. Gentleman for his point, but I do not want to get involved in nit-picking. [Interruption.] I did not mention either 27% or 28%. I was talking about the disparaging increase in the minimum wage, which has already been eaten up by the national insurance hike. That broken Tory promise means a nurse on an average salary will see her tax bill rise by £310 a year. After 18 months on the frontline of the pandemic, covid heroes will be clobbered by a tax hike and the cost of living crisis. How can it be that NHS staff and care workers are facing a £900 million tax hike while banks are, as my right hon. Friend the Member for Kingston and Surbiton said, being given a £900 million tax cut? No doubt bankers will be toasting their tax cut and the Chancellor’s decision to reduce the bank surcharge with cheaper bubbly tonight. It is clear that this Chancellor’s priorities are not the priorities of the British people.

It could have been so different. The Government could have addressed the labour shortage that threatens to derail our recovery before it gets going. They could have radically overhauled business rates, as they promised, instead of the sticking plaster we got. They could have provided the £10,000 that the Liberal Democrats want every adult to have to buy training in the new skills that they desperately need.

The Government could have provided the £150 billion green recovery plan we are calling for to insulate people’s homes and to protect our natural environment. They could have seized the opportunity afforded by COP26 to lead the way on protecting the planet. Instead, the Chancellor has slashed air passenger duty on domestic flights and admitted that overseas aid will not be restored to the legal target of 0.7% until at least 2024. What kind of signal does that send to our international partners ahead of next week’s crucial climate summit in Glasgow? Then again, the word “climate” did not appear anywhere in the Chancellor’s statement.

It is clear that this is the Budget of a former hedge-fund manager, but we cannot run a country like a hedge fund. There is no column in a spreadsheet for people’s dignity and no formula for investing in our children’s future. Today’s Budget promises a future bitter with the consequences of the Chancellor’s inaction—bitter with the betrayal of future generations. It is a Budget that handcuffs us to the consequences of climate change, fails to invest in our children’s education and hammers families with tax hikes instead of helping them with the cost-of-living crisis. What has it all been for? The suspicion remains that the Chancellor is using old data from the Office for Budget Responsibility so that he can save some spending for later in the Parliament. That is the reality: pain for ordinary families now, but a tax cut before the election to help Tory candidates. The Budget should have been about ordinary people’s jobs up and down this country but was instead all about one person’s next job—the Chancellor’s.

Finance Bill

Debate between Christine Jardine and Anthony Browne

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

[Christine Jardine (Edinburgh West) (LD)]

Again in this place, we are talking about the challenges that have been created by the coronavirus—the challenges to our businesses, to individuals and to those who have been excluded from Government support—and the taxation that will have to be used to try to rebuild. In the Finance Bill that the Government have laid before us, I believe that they have missed important opportunities to do that for the benefit of all our constituents. I would echo what the hon. Member for Ealing North (James Murray) said when laying out new clause 23 and when speaking about Biden’s proposals. We have to look at this crisis in a way that we have never approached any crisis before, and on a scale that we have never done with any crisis before. We have to look for measures that will be enacted on a scale that we have never seen before.

I would also like to express my support for the amendments tabled to address and, indeed, stop the malpractice that is rife. These include an amendment tabled following the inquiry by the all-party parliamentary loan charge group into how contracting should work, to stamp out the malpractice and mis-selling to public and private sector freelance and locum workers by unregulated umbrella companies. Those practices have created a climate where tax avoidance schemes are rife and are being mis-sold.

These amendments follow the powerful report by the loan charge APPG, as I have said. BBC Radio 4 has estimated the cost to the Treasury—£1 billion a year in lost tax revenue—and The Guardian has reported that the hidden cost of umbrella companies in the UK may actually be more than £4.5 billion a year. These are some of the opportunities that I believe the Government are missing.

There are also specific amendments before us tonight about measures that would require the Chancellor to review separately the effectiveness of furlough and the self-employment income support scheme, the impact of the Finance Bill on small businesses and the impact of the Bill on transitioning to zero-carbon domestic flights by 2030. All of these, I believe, are opportunities that the Government are failing to take.

The coronavirus has caused the worst economic crisis in three centuries and brought real hardship to our constituents up and down the country in all lines of work. The furlough scheme and SEISS have helped countless people so far, and millions continue to depend on them, but the Government need to think again and review their decision to end the schemes in September. They need to think about extending them into next year. We have all been glad to see cases dropping and restrictions being eased thanks to the vaccine and the NHS, but unfortunately this does not mean that the crisis is behind us.

Covid has left businesses saddled with debt and more vulnerable than ever, especially small businesses, and many are worried that they will not make it through the year. Their employees are rightly worried about their future. As experts warn us about the potential dangers of the new Indian variant, there are worries that the final step of the reopening road map might need to be delayed, or that we might not have seen the last of social distancing.

For all those reasons, it is essential to give workers, self-employed people and small businesses certainty about the future and keep job support in place at least until the end of the year. Even at this late stage, the Chancellor must correct the injustice against the 3 million excluded, who have spent more than a year with no help at all, by finally bringing them under the umbrella of Government support.

I would also like the Chancellor to review the impact of the Bill specifically on small businesses and whether it will offer them adequate help with their debt, rent arrears, solvency and ability to employ people. Small businesses are, as countless Prime Ministers have said, the backbone of our economy and the heart of our local communities. They create the jobs that we all rely on, with 16.8 million people working in small businesses and accounting for six out of 10 private sector jobs. Local shops, cafés, pubs, restaurants, hairdressers and florists all serve our communities and bring life to our town centres and high streets. If allowed not just to survive but to thrive, they can be the engines for growth and jobs in the months and years to come. At the moment, they are struggling under record amounts of debt and months of rent arrears; the collective debt burden is more than £100 billion. According to the Federation of Small Businesses, something like a quarter of a million of its members could close by the end of this year. On top of that, they have been badly hit by the terrible EU trade deal. That is why the Chancellor must adopt a revenue compensation scheme that could help those struggling with their finances and fixed expenses to stay afloat. At the very least, the Government should be undertaking a review to assess the state of UK small businesses and offer the necessary support off the back of that.

Opportunities are also being lost to transition to a zero-carbon economy by 2030. These are all opportunities with which this challenge of many lifetimes has presented us, and which we should seize in order to help individuals, businesses, families and communities up and down the country to recover. The opportunity was there with this Finance Bill, but I do not believe that the Government have grasped it in the way that they should. I ask them to reconsider and accept the amendments.

[Anthony Browne (South Cambridgeshire) (Con)]

I, too, will abide by your strictures, Madam Deputy Speaker, to keep my speech as short as possible.

When I was an economics correspondent a very, very long time ago, tax competition between countries was all the rage. There was a sort of mainstream consensus that it was a good thing because it helped give countries an incentive to be an attractive place to do business, but in the last couple of decades it has become clear how easy it is for international companies to run circles around national rules and reduce their tax bills by shifting profits to low-tax jurisdictions, and we end up with this outrageous, unconscionable position of some of the world’s largest companies paying some of the smallest corporation tax rates. That causes anger across the UK and on both sides of this House; we are all aligned in the objective of ensuring that big companies pay a fair share of tax.

This Government have been doing an awful lot, as the hon. Member for Ealing North (James Murray) recognised, to try to tackle this issue both within the UK and internationally, including through measures such as the diverted profits tax, the digital services tax and changes on tax to subsidiaries. When I was chief executive of the British Bankers Association, I was involved with a lot of the implementation of those rules.

We need to take measures internationally as well; this is an international problem, so ideally we need an international solution. The difficulty, though, is getting an agreement between a large number of different countries. Normally these sorts of discussions go through the OECD, which is so big that it is difficult to get agreement and progress is absolutely glacial. That is why, on things such as the digital services tax, the UK has opted to act unilaterally before an international agreement can be agreed. I very much welcome the fact that the initiative is now being led by the G7, because we are far more likely to get agreement from seven major countries, and then to expand that out to the G20 and then to the OECD.

As we have heard tonight, particularly from my hon. Friend the Member for Wimbledon (Stephen Hammond), these are complex negotiations. There are two interlinked pillars at the OECD: the scope of the tax and the level of the tax if there is a global minimum rate of corporation tax. As my hon. Friend the Member for Devizes (Danny Kruger) said, there is no point in agreeing a global level of corporation tax if all we are doing is taxing companies in California; the two parts of the negotiations are intertwined. I very much welcome the fact that Government are involved in these negotiations. I completely respect that they may wish to negotiate more in private than in public, as that is often the best way; I know that their intentions are absolutely right.

That brings me to new clause 23. It is the wrong review at the wrong time. The new clause asks the Government to review the corporation tax set at 21%, but, as the hon. Member for Ealing North said, it actually looks like Joe Biden and the US are now looking at 15%, so this proposal is already out of date and it has not even been voted on yet. It is also at the wrong time because what we do not want to do in the middle of an international negotiation is tie our hands, display all our cards and show what we are doing. It could create a dynamic in the negotiations that would actually set back the UK’s ambition to ensure that companies pay a fair rate of tax. I therefore fully support the Government in rejecting the new clause. I also fully support them on reaching a strong global agreement to ensure that the world’s biggest companies pay their fair share of tax.

I hope that that was less than five minutes.

Financial Services Bill

Debate between Christine Jardine and Anthony Browne

Monday 26th April 2021 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

I will keep my remarks short, because I know it is late and we have a lot of work to do.

There are many amendments to welcome from the other House, particularly the regulation of “buy now, pay later” by the Financial Conduct Authority, where there is clear risk of consumer harm. The Proceeds of Crime Act 2002 is a remarkably ineffective piece of legislation but it is right that it is extended to e-money, as there is a clear loophole there. On cashback without purchase, there is no risk of consumer detriment there and we need to increase access to cash. It is right that it is brought outside the FCA’s remit.

On Lords amendment 1 and the duty of care, I spent five years of my life trying to get the banking industry to improve the care given to vulnerable customers, and clearly many consumer harms carry on. I launched schemes, actually in this House, for the banking industry to help customers with cancer and customers with Alzheimer’s. I am very attracted to the idea of some sort of blanket duty of care, but I do not support this amendment, for two reasons. The first is that, as written, it is so wide-ranging that there would clearly be massive unintended consequences, which even vulnerable customers would live to regret. The second is that, as the Minister said, the FCA already has very wide-ranging powers, almost certainly enough to deal with all the consumer harms that need to be dealt with. I very much welcome the Government’s move, through their amendment, to push the FCA to look at how to reduce consumer harm and implement an effective duty of care.

On Lords amendment 8, mortgage prisoners absolutely need help. They have suffered massively, through no fault of their own, losing tens of thousands of pounds, if not more. We have rehearsed all the arguments tonight for and against this measure. We agree that we need to help these people, but the question is: how do we do that? The cap of interest rates is, as people say, a sticking plaster—even its supporters say that. I can see the appeal of it, but this sticking plaster comes at great cost: Parliament would be setting out interest rates in primary legislation. That could lead to huge unintended consequences in lots of ways—for example, through the impact on financial stability that we heard about earlier on some of the firms. It would also set an extraordinary precedent, with the Government doing price controls in that way. One does not have to be an historian of the 1970s to know of all the dangers of price controls.

It is also really not the solution we need. Where someone is trapped in a horrible prison with their guards abusing them and they are very uncomfortable, would they want that prison to be made more comfortable and the guards to behave themselves, as this cap in effect proposes, or would they want to get out of the prison? They would want to get out of the prison. We need to make sure that mortgage prisoners can move to other mortgage providers. That should apply to all people who are mortgage prisoners, including those who are in arrears, for the reasons that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) set out. This is very complicated stuff. There are lots of reasons why people cannot move, whether it is their loan-to-value ratio or their income stream, or because they are in arrears. It is absolutely right that they should be helped to go to regular mainstream mortgage lenders that are offering other suppliers, and I very much welcome the Government move to really push on that, working with the FCA. I take on trust their commitment to really push in that direction and get a solution to that for all the mortgage prisoners.

For those reasons, I am happy to vote against Lords amendment 8, so long as the Government do everything they can to help those prisoners.

[Christine Jardine (Edinburgh West) (LD) [V]]

I, too, will keep my remarks brief. In the debate tonight I, on behalf of the Liberal Democrats, will be opposing the Government’s motions to disagree with Lords amendments 1 and 8.

In particular, I would like to focus my comments on Lords amendment 8. This amendment would offer significant relief, I believe, to thousands of so-called mortgage prisoners caught in a vicious cycle of debt through no fault of their own. We have already heard the arguments rehearsed and some terrible stories of what they have been through. All that has been the result of the original decision, after the collapse of the mortgage providers, to sell off those mortgages to investment funds, and that has left as many as a quarter of a million homeowners trapped in spiralling mortgage costs for more than a decade now.

It is a situation that the Government have failed to address, even though there is clear evidence that it is jeopardising wellbeing. A recent study found that mortgage prisoners experienced higher rates of physical and mental health problems, and that they are up to 40% more likely to default as a result of coronavirus. The significance of this amendment is that it would finally unlock this trap and offer an escape from the nightmare of the past decade. Significantly, it would lower interest payments through a cap on the standard variable rate of interest for mortgage prisoners who are borrowing from a firm that no longer lends to new customers. The cap would be no higher than 2% above the Bank of England base rate, which is currently a mere 0.1%. It would also require lenders to offer mortgage prisoners new fixed interest rate deals in certain circumstances—for example, if they have kept up with payments in the past 12 months, if they have an outstanding loan amount of over £10,000, or if they have not received consent to let the property.

The misery caused to tens of thousands over the past decade and the continuing threat it poses demand that we act. We have heard tonight why. To me, it seems simple. It seems the correct thing to do, and therefore I strongly urge the House to reject the Government’s motion to disagree with this amendment—Lords amendment 8 —as well as with Lords amendment 1.

Finance (No. 2) Bill

Debate between Christine Jardine and Anthony Browne

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

[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.

[Anthony Browne (South Cambridgeshire) (Con)]

I very much welcome many of the measures in the Finance Bill, particularly the measures on stamp duty. Like many people who called for a stamp duty holiday, I welcomed it when the Government announced it and I am glad to see that it has been one of the most successful stimuli to economic activity that the country has seen. The moribund market is now racing ahead, albeit possibly slightly too fast. I recognise that homeowners need certainty—many of them are in the middle of transactions —so this is good. We are not out of the pandemic yet, so I welcome the Government’s move to extend the stamp duty holiday to the end of June. I also welcome the fact that they are removing the steep cliff edge and replacing it with a smaller cliff edge by tapering it out and extending it at a lower rate until the end of October. Those are both good measures that will keep the housing market going and give certainty to homeowners.

I do not support amendment 81, which proposes that these measures should not apply to second homes, although I understand the social justice argument behind it. The purpose of the stamp duty holiday is to stimulate economic activity, and whether a home is being bought to live in or as an investment property, that still involves economic activity in the housing market. Our focus here is on stimulating the market, and both those activities have equal effect.

Back in 2012, I co-founded an organisation called the HomeOwners Alliance, Britain’s first and only consumer group for homeowners. Our aim was to champion homeowners and aspiring homeowners and to help people to get into the housing market, recognising that home ownership is a valid aspiration for all young people, and indeed older people, and that the primary role of homes is to be lived in. They are not investments or casinos; they are to be lived in, and that should be the role of Government policy.

I wrote various papers on the reform of stamp duty. I will not go on about the details, but there were two particular reforms that I called for. One was an increase in the stamp duty on second homes, investment properties and buy-to-lets. The other was an increase in the stamp duty for non-residential buyers. The Government have already introduced the first of those, and I think they have raised almost as much money from that as they do from residential stamp duty. Now, in this Bill, they are introducing the stamp duty surcharge for non-residential buyers—the people who want to buy homes in this country but who have no intention of living in them. As a country, we have been very generous to such people—far more generous than most other countries—but, as my hon. Friend the Member for Kensington (Felicity Buchan) said, this has a real cost in terms of preventing other people from buying a home that they actually want to live in.

It is very welcome that the Government are introducing the 2% surcharge for non-residential buyers who do not want to live in the UK. It is right that it should start low—2% is quite low; that is often the fee that we pay to the estate agent—but the Government should monitor it. There will be an opportunity to increase that rate, while ensuring that doing so does not have really bad effects on the market but that it does have an effect on demand and helps to free up properties for people who want to buy a home to live in. The money from these measures is being used to house rough sleepers, which is very welcome, but in the longer term as we raise the rate and more money is brought in, I would use that revenue to reduce the burden of stamp duty for those buying homes that they want to live in. As my hon. Friend the Member for Kensington so eloquently said, stamp duty is a big burden for homeowners. Following those thoughts for the future, I will be fully supporting the Government’s policies.