(3 years, 8 months ago)
Commons ChamberI congratulate the right hon. Member for Chesham and Amersham (Dame Cheryl Gillan) and the hon. Member for North West Durham (Mr Holden), and on behalf of the Opposition Front-Bench team I thoroughly welcome the Bill.
I support the Bill—indeed, I was present in the Chamber when we discussed the initial concern about my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) not being able to deal with the Bill herself physically. My hon. Friend the Member for North West Durham (Mr Holden) came in and helped to fill the breach, so I thank him for and congratulate him on what has been achieved.
I thank my right hon. Friend the Member for Chesham and Amersham for her foresight in choosing this topic for the Bill that she wanted to promote. Few things are more important for our constituents who are sadly in prison than to ensure that although they are in prison for punishment—the deprivation of liberty—they are not there to become drug addicts or to be subjected to extortion or other illegal behaviour. If, by facilitating our keeping on top of new substances, the Bill leads to fewer people getting addicted and leaving prison fully addicted, that would be great. I have challenged my hon. Friend the new Minister to be the first prisons Minister to create a truly drugs-free prison in the United Kingdom—a dream that I very much hope will be realised.
(5 years, 9 months ago)
Commons ChamberI hear that.
We are told that the Chancellor was forced into ditching the policy only because Conservative Members were up in arms. It seems quite clear, therefore, that there are political rather than technical reasons for what we choose to exempt and not to exempt from VAT.
We should also understand that fraud continues to be a serious issue for the Exchequer in relation to the collection of VAT. On Government estimates, VAT fraud currently costs the UK about half a billion pounds a year, with an extra £1.5 billion of uncollected debts and around £100 million of avoidance. VAT fraud was discussed at length during the Committee stage of the Finance Bill in October 2017, when the Government introduced a new clause to place new obligations on fulfilment houses to help tackle VAT fraud, which has worsened with the rise of online sellers who obtain goods through third-party vendors based abroad.
The Opposition believe that small businesses need more support in getting to grips with the tax if we are ever to close the VAT gap. The situation has been worsened by the Government’s disaster-struck attempts to transition to making tax digital, which have thankfully been delayed until next year to give businesses the chance to adapt.
Many of us spend a large proportion of our lives online, so it is unsurprising that more UK consumers than ever buy a larger proportion of their goods through online marketplaces such as Amazon, eBay and others. In 2016, 14.5% of UK retail sites were online—up from 2% in 2006. Just over 50% of these sales were through online marketplaces, rather than directly from the seller.
The Campaign Against VAT Fraud on eBay & Amazon in the UK—a snappy title, which was possibly created by accountants—estimated that online VAT fraud
“equates to £27 billion in lost sales revenue”
and
“additional taxes to UK businesses and the public purse in the last 3 years.”
Her Majesty’s Revenue and Customs has stated that it does not have data on online fraud and other losses before 2015-16.
Sadly, the slowness of HMRC in responding to growing fraud online has been criticised by the Public Accounts Committee, which first raised concerns in April 2013. It found that HMRC had only recently begun to tackle the problem seriously, despite the fact that such fraud leads to significant loss of revenue to the Exchequer. It found that HMRC, rather than trying to use its existing powers, waited until the introduction of new measures under the Finance Act 2016 before even attempting to hold online marketplaces responsible for the VAT fraudulently evaded by traders. HMRC has been too cautious in using these powers, and the Government have refused to name and shame complacent traders. To my knowledge, they have not prosecuted a single one for committing online VAT fraud.
As the UK leaves the protection of the EU VAT area, the possibility of VAT fraud will, arguably, rise. It is therefore logical that any new legislation on VAT should consider additional measures to tackle online VAT fraud. I understand from the Treasury Committee that HMRC believes there is a £3.5 billion VAT gap resulting from mistakes made by businesses when they submit their VAT returns. The overall VAT gap in 2016-17 was £11.7 billion. I am sure we can all agree that that is a high number and therefore probably requires some fairly urgent, radical action.
The Chartered Institute of Taxation has six recommendations to help address this gap. I want to focus on just one of them today, in the interests of time and sanity, which is
“resisting the temptation to introduce widespread changes that are disruptive to the majority of compliant businesses”.
Possibly, this connects to a concern about the clause we are addressing.
I am aware that there is something of a live debate on registration thresholds. There were several briefings ahead of last year’s Budget that moves were afoot to reduce the threshold and force more small businesses to register for VAT. There are, I honestly believe, arguments both in favour and against such an approach. I have actually debated this over my breakfast table with my husband, who just happens to be a small business owner. A concern about the threshold is not an argument for a particular threshold, because I think the only way to address such a concern would be to reduce the threshold to zero, which is something we certainly do not support. Conservative Members may claim that by setting the threshold too low we are disincentivising businesses. There are some who claim that the existence of health and safety legislation or, indeed, employment law is a disincentive to business—I know that to be true because I have done many Friday mornings—so we should be very careful where that argument takes us.
There is much in this Bill that I am sure the hon. Member for Christchurch would agree needs further consultation. First, I am not sure how the shift in threshold for registering taxable supplies in this Bill, from £85,000 to £104,000, has been worked out. It would be great if the hon. Gentleman, in his summing up, could let me know. It would also be useful to know how much consultation has gone into the exemptions for the use of coal, oil and gas as domestic fuel or power, because it is not clear to me that, as we seek to reduce fossil fuel emissions, the use of such fuels should be subsidised. I am sure he would agree that, again, this needs a broader consultation and consideration of how such a measure sits alongside other measures being taken, including by this Government—
Let me finish my sentence. Such consultation should include how such a measure sits comfortably alongside other measures being taken by the Government—for example, through the Climate Change Act 2008. If I finish the next bit, just to wrap it all up, the hon. Gentleman may find that easier. I wonder how workable or sensible it is to propose exempting VAT from items already subject to excise duty, such as alcohol and tobacco, and whether this could be counterproductive as it could amount to two policy measures pulling in different directions, with excise duty increases to try to discourage consumption and a VAT exemption in effect reducing the price.
Does the hon. Lady recall—perhaps she does not—the 1993 Christchurch by-election, after the Government had introduced VAT on fuel? In that by-election, the Government’s argument for introducing VAT on fuel was that it would promote fuel efficiency, and the electorate in Christchurch gave the Government’s argument a big raspberry.
Can I say that I am not at all surprised—not at all—by that? No, I do not remember the 1993 Christchurch by-election. However, I assure the hon. Gentleman that, after I have driven to my friends’ this evening, I will ask them to look it up for me so that as soon as I get my gin and tonic, I will have an opportunity to refresh my memory of the politics of that by-election.
I am genuinely delighted—I mean this sincerely, which is why I wanted to say this at the end—that the hon. Gentleman wants to exempt women’s sanitary products through this Bill. There has been ongoing work, driven by some of my Labour colleagues and, to be fair, by some Conservative Members as well, to allow lower VAT rates or even a zero rating for sanitary products. I wholeheartedly agree, and I genuinely believe that we should be striving massively to do it. There is real poverty in some sections of our communities and poverty in relation to sanitary products really should not be exacerbated by having VAT on them. In January last year, the European Commission came back to us with revised proposals to allow countries in the EU to introduce lower rates for sanitary products, and in part that was in response to campaigns from this Chamber. As we know, the proposals still have to be agreed at EU level, and of course the UK has yet to finalise its relationship with the EU.
This has been a genuinely interesting debate, and I thank the hon. Member for Christchurch for entertaining me so thoroughly on a Friday morning. He will be unsurprised to hear that should the Bill be pressed to a vote, sadly I will not be able to support him in the Lobby.
(9 years, 12 months ago)
Commons ChamberTrust me—I am not suggesting he does; it is just that I know the hon. Gentleman of old, and I know he will come to those figures in due course. The figures I am using are robust, and he knows it.
It is estimated that one in eight renters has chosen not to ask for improvements or to challenge a rent increase because of fear of eviction. This reduces the incentives for landlords to improve their properties. Rather than pay for repairs, unscrupulous landlords can take a short cut by evicting their current tenants and replacing them.
I am grateful to the hon. Gentleman for raising that point. I am very clear that there are good landlords and there are bad, and I am talking about the bad. He said to my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), who is no longer in her place, that he hoped she would have reported the unscrupulous landlord she was discussing to the council or to the environmental health services. Let me tell him that if someone has their complaint referred by an MP, that does not stop them being evicted by a landlord who takes umbrage at being forced to do repairs—as some of my constituents, sadly, know to their cost.
The effects of this shameful practice cannot be overestimated. Over the weekend, I read about the—literally—shocking case of Lela Lewis. Lela suffered a minor electric shock after taking a shower and, having discovered that it was due to faulty wiring, complained to her landlord. Much to her chagrin, the landlord responded by serving her with an eviction notice. There was the case of Greg and Laura Moore and their three children, who were served an eviction notice on their rented home in Norfolk just three weeks after reporting damp.
In the area where I live and which I represent, I have heard about the case of a constituent who I will call Chris. He is an assured shorthold tenant who has been in the same property since 2010. The property has damp, mice and a hole in the roof. His children’s health is suffering as a result of those poor conditions. He complained to the letting agent and it visited, along with the council, which agreed that the property was in a poor state of repair. Shortly afterwards, he received a notice to leave—a section 21 notice. He has been informed by the letting agent that the landlord will not renew his tenancy next May.
No; I have given way to the hon. Gentleman already.
Despite the innovative and sterling efforts of Newham council to bring some order and better standards to the private rented sector, it cannot prevent such retaliatory evictions. This will happen to more and more people as the housing shortage forces more and more people into private renting.
This Bill is a real opportunity for us to put an end to this unacceptable practice. As I will set out, the private rented sector needs far more radical and sweeping reforms, but the Bill can, and will, make a real difference. It provides protection for assured shorthold tenants against retaliatory evictions where they are suffering from poor or unsafe property conditions. It does that by preventing a landlord from giving a section 21 notice for six months from the date of service of a notice from the local authority regarding conditions in the property, such as an improvement notice, a hazard awareness notice, or a notice of emergency remedial action. It provides the power for the Secretary of State to prescribe legal requirements which, if a landlord were in breach of them, would prevent them from serving a notice.
There are also important safeguards for landlords. They are protected in cases where the poor condition of the property may have been caused deliberately by the tenant, or where they genuinely need to sell the property. The banks and mortgage companies are also protected where they have repossessed a property and need to sell it with vacant possession. We believe that those protections are more than ample to protect the very good landlords in the sector who would not dream of evicting their tenants from their property following a complaint.
Labour is pleased to support the Bill and to help bring an end to completely unacceptable practices, but we also believe that the sector is in need of more fundamental reform. We have set out far-reaching proposals to reform the sector to get a fairer deal for private renters. First, a Labour Government would legislate for three-year tenancies, not short-term tenancies, as the standard for those who rent their homes in the private sector. They will become the norm.
We will build in protections for landlords, which, crucially, will also provide much-needed stability for private tenants. The nature of the sector and the people who rent has changed, and we need to create stability for the growing numbers who live in the sector for longer. They are crying out for a better deal, especially—but not solely—the growing number of families with children who are renting privately and who need and deserve our support. There are now 2 million children living in the private rented sector, and this House and this Government must ensure that their homes, their home lives and their future chances in life are not put in jeopardy as a result of the lack of access to a stable home environment.
Secondly, we will act on unpredictable rent rises, because the new, longer-term tenancies will put a ceiling on excessive rent rises. We will make sure that families have the stability of longer-term tenancies and that they will no longer have to live with the uncertainty that their rents could jump up from one year to the next. Labour wants to promote as much stability as possible for families. That is what happens in Ireland, Spain and many other European countries, and it gives families and people the peace of mind and stability they need.
The reforms will be good not just for tenants, but for landlords, too. We know that the last thing landlords want is a home standing empty, which means that they are not collecting rent or that there is constant churn where tenants come and go, often costing landlords hundreds of pounds in fees.
Thirdly, we will ban letting agent fees for tenants. Too many letting agents charge extortionate fees every time there is a change of tenancy, and often both landlords and tenants are being charged for exactly the same thing—otherwise known as double charging. It is disappointing that the Government chose once again to vote against our amendments to the Consumer Rights Bill in the other place earlier this week.
Finally, we have set out plans to introduce a national register of landlords and to help make it easier for councils to introduce licensing schemes in their areas. Although the Tenancies (Reform) Bill will help to drive up standards, it will not be enough on its own.
I pay tribute again to the hon. Member for Brent Central for promoting the Bill. Although we believe that reform of private renting must be more far reaching, there is no doubt that this Bill will bring about very real improvements in the lives of thousands of renters. The act of retaliatory eviction is completely unacceptable. It creates a climate of fear and families are afraid to complain about mould, damp and even worse because they may lose their home. It leads to huge instability, as too many who do complain are then served with notice to leave. Moreover, in effect it encourages poor conditions. Unscrupulous landlords take the easy way out, evicting their tenants rather than carrying out needed repairs. We therefore welcome the Bill and will be pleased to support its passage through the House.