Autumn Statement

Clive Betts Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

I welcome my hon. Friend to his role as Chair of the Health and Social Care Committee. I know that he will do a brilliant job and that he will hold me and the Secretary of State for Health and Social Care to account strongly and tenaciously on everything to do with cancer and public health. I welcome that, because they are very important areas.

[Mr Clive Betts (Sheffield South East) (Lab)]

To come back to social care, in the Chancellor’s previous role as Chair of the Health and Social Care Committee, he will remember arguing for a £7-billion increase in social care funding. Will he confirm that today’s package is nothing like that? Will he further confirm that much of it is coming from council tax increases, which give most to the richest councils and take proportionately most from the poorest households? Finally, will not the rest of local government face real-terms cuts to essential services? This is austerity mark 2, with the prospect of financial collapse for many councils up and down the country.

[Jeremy Hunt]

I have to say that I think local councils are welcoming today’s announcement because the biggest item of expenditure that worries them the most is their social care budgets, and this is the biggest-ever increase in the social care budget. I am pleased that the hon. Gentleman has read the report into social care that the Health and Social Care Committee produced when I was the Chair—I sometimes worry whether people actually read the reports—and he is right to point to that £7-billion figure. That was made up of about £5 billion in core funding and £2 billion for the Dilnot reforms. Today, we are delivering nearly that £5 billion of funding and the Dilnot reforms will happen at a later stage, so it is not everything at once, but it is broadly consistent with what I recommended.

Oral Answers to Questions

Clive Betts Excerpts

Tuesday 11th October 2022 Commons Chamber

[Chris Philp]

I am pleased to say, as my right hon. Friend the Chancellor said when he introduced the growth plan, that expediting critical infrastructure was an important part of that plan. Without critical infrastructure, we are not going to see the growth in jobs or wages and the prosperity that we all want. The Government will do everything that they can to speed up the delivery of those projects.

[Mr Clive Betts (Sheffield South East) (Lab)]

We do not know much yet about the Government’s new investment zones, but in order to achieve success for the primary investment in them, will the Government have specifically targeted funds for infrastructure projects in those zones? If so, will this be a further unfunded expenditure commitment?

[Chris Philp]

I think the Chancellor set out the investment zone concept very clearly. There will be, by agreement with local authorities, planning freedoms and very significant tax cuts. Infrastructure investments are being handled separately to that, but it would be reasonable to expect a degree of co-ordination between the Department for Levelling Up, Housing and Communities and the Department for Transport, as they consider the way investment zones interact with transport projects.

The Growth Plan

Clive Betts Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

I would be very interested in having a conversation with my hon. Friend about that, and I refer him to my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities, who is engaged in these conversations as we speak.

[Mr Clive Betts (Sheffield South East) (Lab)]

So after 12 years of failure, the answer, apparently, is first to blame workers and their trade unions, and then to blame the planning system—the system for which the Government have been responsible for the past 12 years. On the new investment zones, which sound rather similar to the failed enterprise zones of the 1980s, will the Chancellor explain what planning requirements will be abolished? Will that include the abolition of the requirement to build affordable homes for those who cannot afford to buy? Has he done a detailed cost-benefit analysis of the proposals, and if so, will he put that assessment in the Library by the end of today?

[Kwasi Kwarteng]

As I said, the core principle of the investment zones is consent; they will not be imposed on people. Actually, there have been successes with the enterprise zones—I look at places such as Canary Wharf—and I think that the investment zones will also be successful and we will look back fondly.

Oral Answers to Questions

Clive Betts Excerpts

Tuesday 28th June 2022 Commons Chamber

[Lucy Frazer]

The Government recognise that accounting for VAT can be a burden on small businesses. That is why we maintain the highest VAT registration threshold in the OECD and as compared with EU member states. At spring Budget 2021, to give businesses certainty, it was announced that the VAT threshold would be maintained at its current level until March 2024. Although there are no plans to change the VAT threshold at this time, we keep all taxes under constant review.

[Mr Clive Betts (Sheffield South East) (Lab)]

Last year, at the spending review, the Government announced that after years of austerity there would be a small real-terms increase in local authorities’ spending power—but that was when inflation was around 2% to 3%. Has the Chancellor seen the recent assessment from the Local Government Association showing that, with inflation at a somewhat higher level now, it will cost local councils £2.4 billion extra this year? What steps will he and the Levelling Up Secretary take to have talks with the Local Government Association about extra help for local authorities so that we do not get another round of austerity imposed on our constituents?

[Mr Simon Clarke]

Of course, we invested £1.6 billion in local authorities in each year of the spending review precisely to help them with all the responsibilities that they must discharge. I would say to all Departments and devolved Administrations that, if we are to live within the spending review, it is vital that they make responsible choices about how to deliver services at best value to the taxpayer. We cannot be in a situation where we chase after inflationary pressures as that will only worsen and prolong the crisis that we face.

Economy Update

Clive Betts Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

I am grateful to my right hon. Friend for his question. He and I have talked about inflation for quite a while. He will know that I have long been concerned about the potential of rising inflation and interest rates. It is something that he and I discussed very early in my time in this job. That is why, from the beginning, I have been careful to protect our public finances against the costs of rising inflation and interest rates. I am glad that we took those decisions. Now, because of that, we are in a position to act and to support people.

[Mr Clive Betts (Sheffield South East) (Lab)]

I have a specific question about the household support fund. The Chancellor says—I think he is saying this—that, wherever people live, if they are in the same circumstances, they will get the same help from this fund. In other words, local authorities will have no control over how much money is spent from the fund. Will he therefore guarantee that councils will get pound for pound from the Government every pound they have to spend for the people who need it?

National Insurance Contributions (Increase of Thresholds) Bill

Clive Betts Excerpts

2nd reading
Thursday 24th March 2022 Commons Chamber

[Mr Clarke]

The hon. Gentleman is a fantastic contributor to this place and he takes a keen interest in looking after people, including the most vulnerable people, in his constituency. I absolutely recognise that we want to make sure that families right across the income spectrum are supported. That is why, as I say, we have put in place a package of measures that has at its heart a desire to make sure that we have a strong safety net in place. We have to consider all the decisions we take in the round. To put it in some context, the United Kingdom spends £243 billion a year on our wider welfare spend, including pensions. This is a country where we do a huge amount to make sure that everyone is supported. We have to consider all our decisions in the context of both wider affordability and how the system operates. The welfare system always operates on the basis of an uprating in September for changes in the ensuing April. If there is high inflation during the course of 2022, as is forecast, that will be reflected in the uprating figures for April 2023, and the triple lock will be in place to protect families.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Minister has talked about one side of the budget. The other side of the budget is spending. Local authorities provide incredibly important services that are of particular benefit to the poorest in society. Local authorities have suffered more than any other part of the public sector from the austerity period. The Government claimed that local authorities would get an increase in their spending power this year, but will he now confirm that, with the predicted level of inflation, they face a significant real-terms cut to their spending that will affect all the services that they provide?

[Mr Clarke]

As a former local government Minister, I hope the hon. Gentleman knows that I do value the impact that good local government can have on people’s lives, which is why we apportioned £4.8 billion extra at last autumn’s spending review to support local authorities in delivering vital services. It is of course the case that all the budgets that we announced at the spending review are affected by inflation, but the Chancellor is rightly clear that we cannot keep on simply mechanically adjusting the spending review decisions in the light of inflation, because that option would not be affordable within our headroom and would obviously not be open to family budgets either.

All Departments—national and local—will have to play their full part in managing the impact of inflation. There is much that can be done in this space through improved innovation and driving down costs. That is why a new Cabinet committee has been established in the last week that will squarely address how we can drive efficiency, including, for example, by doubling NHS efficiency targets so that we can deliver better value for money for the taxpayer. These are difficult times, but we have to ensure that we live within our means.

Financial Statement

Clive Betts Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

I thank my right hon. Friend for his support; I know that this is an area of particular interest and concern for him. The 2.4% comprises two things: what the Government spend and what private businesses spend. I can reassure him that we are more than on track for the Government bit of it: we already spend the OECD average on the 2.4%, and that spending will go up by 50% over this Parliament, so the Government are doing our bit. As I said in my statement and in the Mais lecture, the private sector lags significantly internationally in how much it spends.

The changes that we are making to R&D will all come into effect in the spring next year and will be announced finally in the autumn Budget. My right hon. Friend wrote the foreword to a very helpful report on this topic. I look forward to working with him, with his Committee—the Select Committee on Science and Technology—and with others so that we get these changes right and drive up private sector investment in R&D.

[Mr Clive Betts (Sheffield South East) (Lab)]

May I draw attention to two stories in the Sheffield Star today? Sheffield is still a city of steel. Ben McIvor, president of Forged Solutions Group, which employs 400 skilled workers in the steel industry, is begging for help with the rise in energy costs, because the company simply cannot pass on those costs to its customers. Workers at Liberty Steel are protesting about the Prime Minister’s broken promise that if we left the EU, he would cut energy bills for steel companies. Why has the Chancellor chosen to break the Prime Minister’s promise?

[Rishi Sunak]

No, we have provided over £2 billion-worth of support for energy-intensive industries over the past several years—including, I believe, over £600 million for the steel industry. That support comes in a variety of ways, including free allowances and compensation for the emissions trading scheme and other carbon price mechanisms. We also announced hundreds of millions of pounds in the spending review to support the industry to make the transition to using cleaner energy.

National Insurance Contributions Increase

Clive Betts Excerpts

Tuesday 8th March 2022 Commons Chamber

[Rachel Reeves]

The hon. Gentleman speaks powerfully on behalf of his constituents, who are struggling with the double whammy of prices increasing, particularly gas and electricity bills, at the same time as this Government are piling on pressure after pressure with higher taxes on the same people who are paying those higher bills. He is absolutely right that people can only take so much, and the national insurance contribution tax hike is, as he says, potentially the straw that breaks the camel’s back.

Politics is about priorities, and it is about choices. So who has the Chancellor chosen to protect—not to tax more? Those who earn huge incomes from a large portfolio of buy-to-let properties or those making large sums from selling stocks and shares will not pay a penny more tax on that income. The super-rich will not be paying more. Roman Abramovich and billionaire oligarchs are not being made to pay more tax. In fact, some of those trying to relinquish their assets now appear to be using offshore vehicles to avoid paying tax. Lubov Chernukhin, wife of Putin’s former finance Minister, and mega-donor to the Tory party, has reportedly lobbied Ministers against higher taxes for the wealthy. As luck would have it, she will not be paying any more tax, unlike people across Britain who work for a living and keep our economy going.

[Mr Clive Betts (Sheffield South East) (Lab)]

My hon. Friend has mentioned not taxing buy-to-let landlords who have a number of properties. I do not think she is aware that the permanent secretary for the Department for Levelling Up, Housing and Communities came to the Select Committee yesterday and confirmed that, where properties are let with council tax and rents being paid in the same bill, the council tax rebate of £150 will go not to the tenant, but the landlord. If the landlord owns multiple properties, as long as they are not owned by a corporate entity, they will get multiple amounts of £150. Some of the landlords are going to be extremely well off, and tenants will have to go and apply to the discretionary fund to get any help at all.

[Rachel Reeves]

I thank my hon. Friend for bringing that to the House’s attention. It is exactly why Labour said that the warm home discount should be expanded to ensure that the money goes to the people who need it, not the landlords.

At the same time as the Government are asking hard-working British people to pay more in tax, they are writing off billions of pounds in fraud. Ordinary people are paying for this Government’s waste. The Chancellor repeatedly ignored warnings about the holes in his covid business support schemes, resulting in £4.3 billion of public money being written off. That does not even include the amounts lost to bounce back loan fraud, including taxpayer cash handed out to drug dealers and organised criminals. That fraud currently stands at £4.7 billion, so that is £9 billion and counting handed to fraudsters. Then there is the colossal Government waste during the pandemic, with £8.7 billion lost on unusable personal protective equipment, all paid for by the taxpayer. Billions has been spent on crony contracts that have not delivered, and every single cheque has been signed by the Chancellor.

--- Later in debate ---

[Dr Caroline Johnson]

Will the Minister give way?

[Mr Betts]

Will the Minister give way?

[Mr Clarke]

I will take one more intervention and then I will make some progress.

--- Later in debate ---

[Mr Clarke]

I heard a lot of warm and fairly vague phrases, but I did not hear a concerted plan, and that of course goes to the heart of this question. The hon. Member for Leeds West said in her speech that the voters are smart and savvy, and I agree with her, but they know an Opposition playing politics when they see it.

The £12 billion average annual investment, which is of course a recurring investment—that is the crucial point—to meet a recurring need, will tackle the elective NHS backlog, while ensuring that the health service has the resources it needs over the coming years. It will strengthen our adult social care system, allowing us to invest at least £500 million to give our army of extraordinary social care workers new skills, and it will enable the Government to roll out the long-awaited reforms to funding for families through a cap on adult social care costs.

This is a transformative policy that will tackle serious and long-standing issues, but to fund such a significant increase in permanent spending we have had to make the tough but responsible choice to increase taxes. Only a broad-based tax such as income tax, VAT or national insurance can raise the sums needed for such significant investment. Using NICs as the base has several advantages. First, it means the levy will be paid for by employers, employees and the self-employed, including, from April next year, by workers over state pension age.

Secondly, this is a progressive way to raise funds because those who earn more will pay more: the top 15% of taxpayers will pay half the revenue. A basic rate taxpayer will pay about £3.49 per week, while 6.2 million—6.2 million—of the lowest earners will be exempt entirely from the levy and most small businesses will not be affected at all.

[Mr Betts]

Will the Minister give way now?

[Mr Clarke]

I will give way.

[Mr Betts]

The Minister talks about health and social care, but will he confirm that there is not a single penny in this extra funding to enable local authorities to cover their social care costs in their budget, which they are struggling with, or to improve the level of the social care they are offering? This crisis has now been going on for years and years, and the Government have promised to fix it. Given that this is a permanent increase in funding, will he also confirm that we are not going to see a tax cut in the next couple of years, just before the election—up today, down tomorrow?

[Mr Clarke]

On the hon. Gentleman’s point about our support for local authorities, we are giving £1.6 billion extra in each year of the spending review we announced in October to support local authorities with the challenges they face. Of course, the levy will fund £5.4 billion of investment in social care over the next three years, so it is a serious response to a serious challenge.

To return to the advantages of the way we have structured the levy, the third design advantage that stands out is that we have also announced an equivalent increase in dividend tax rates. There is therefore fairness across the spectrum in how this is being paid for.

I know there are some who ask why we need to raise tax at all, and instead say that we should borrow to fund permanent increases in spending. Throughout this speech I have outlined all that the Government have done to protect people’s finances as we recover from the pandemic and deal with the rising cost of living, and those actions mean our economy has made a strong recovery from covid-19. Our GDP has rebounded, and over the past months job vacancies have hit record highs, while the unemployment rate has fallen sharply. However, it is easy to forget that all those steps come at a huge cost. Covid casts a long shadow across our economy. Indeed, our debt is at its highest since the early 1960s. As I have reminded the House on many occasions, that high level of borrowing leaves us susceptible to shocks, including changes in interest rates and inflation.

--- Later in debate ---

[Jerome Mayhew (Broadland) (Con)]

When we discuss whether we should have the national insurance contribution rise, we ought to look at what we intend to use the money for, because, after all, as my hon. Friend the Member for Gloucester (Richard Graham) mentioned, it is a hypothecated tax. The Government are looking to address two crucial elements to improve to our society, which are the covid backlog—currently more than 6 million people are waiting for treatment, of whom 310,000 are waiting for more than a year—and adult social care, where there is a desire widely held by constituents of hon. Members across the House to cap care costs. Such reforms would assist 150,000 people with their care costs at their time of greatest need. There is a degree of consensus that they are good proposals and must happen—we need to spend the money—so the real question is not whether we spend the money but how we pay for them.

[Mr Betts]

The hon. Member mentioned the 150,000 people who will benefit from the cap on care costs, and they are disproportionately people in more expensive homes. Where in that funding is the help for the 1.5 million people that Age Concern has assessed should be entitled to social care but have now been excluded from the provisions?

[Jerome Mayhew]

The hon. Member made a number of interventions on the Minister, and I refer him to the full responses that were given.

The question that I take from that is: how we will pay for the proposals? It seems to me that there can be only three answers. We can take money from other priorities in Government, we can borrow, or we can increase taxation. So far, I have heard no suggestions of other areas of Government spending that should be reduced. The Opposition typically move to defence spending as a simple way of extracting money for other commitments, but that is unlikely to be an area of future reductions in today’s environment; in fact, I submit that it will be the opposite.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

The idea of trying to raise a specific allocated funding source for social care came from a report in 2018 jointly done by then Housing, Communities and Local Government Committee—it has changed his name so many times, I have to think what it was called at the time—and the Health and Social Care Committee. We raised the idea of a national insurance increase but we were very specific about the caveats. We said that no one under 40 should pay it, because young people have been disproportionately hit by the impact of the banking crisis, the austerity measures and then covid. That is exactly the same way the Japanese raise their funding for social care. We said that the threshold at which people start paying national insurance should be higher, which this proposal does not do, and that the ceiling should be raised, which I think the Government now accept should be done. We also said that people on a high private pension should pay, but there is no proposal from the Government for that.

The Government are saying that when the levy comes in formally next year, people of pensionable age who are working will pay, but for this next year, 2022-23, those of pensionable age will not pay anything at all for the national insurance rise, which seems particularly strange as the money that will be spent will disproportionately help older people. We also said that people who are getting unearned income should pay. The self-employed pay national insurance based on their profits but not on a whole range of self-employed income, which would be a very different tax—a very different premium indeed. The changes to the cap will disproportionately benefit people in the most expensive homes, who will pay less of their asset when they die than people with lower value homes. We said that, rather than deal with this convoluted arrangement with the cap, everyone above a certain threshold of home value should pay a percentage of that asset towards the social care premium on their death. That again would be a much fairer way to raise money.

What we have here is a regressive form of taxation. I accept that people at the lower end—the people at the very bottom—on a £10,000 income will not pay, but beyond that, the hit to family incomes is going to be much greater for a family earning £30,000 than for a family earning £130,000. And at the end of the day, this does not deliver more money for social care. It should not be called a social care premium. It delivers the money through the disproportionate raising of the cap, which I have explained. It does not give any extra money for councils to fund the gap in social care funding, which has grown wider over the last 10 years. As social care funding has gone up and council budgets have shrunk, the amount for other services has shrunk with cuts of up to 50%—the National Audit Office has done an excellent report on this—whether it be planning services, environmental services, bus services, libraries or road repairs. We are looking for a funding stream that will stop that happening. There is no more money for local authorities to provide social care to the 1.5 million people that Age UK believes would have been entitled to social care 15 years ago and do not get it now.

At the same time, we will see a disproportionate rise in national insurance premiums hitting some of the poorest families hardest. What else will the Government do to fund local councils? They will make sure that councils have to put up council tax by around 3%. Council tax is a disproportionately unfair tax for poorer families. Look at the relationship between the value of homes and the amount of council tax people pay. The Resolution Foundation did a very interesting analysis five years ago showing that the level of council tax paid by those at the top end was 3.3 times higher than those at the bottom end, but the value of homes was, on average, 6.8 times higher at the top end, and that gap has grown larger as the value of houses has grown over the years and there has not been a council tax revaluation since 1991.

We have a double whammy. On top of the increases in food and fuel prices, which are disproportionately hitting poorer families, we have a disproportionate national insurance rise and disproportionate council tax increases, too. The Government should stand back and consider how we fund social care properly and fairly on a long-term basis, while at the same time addressing the problems of unfairness in council tax through revaluation and reconsidering the bands so that people in lower-value homes do not pay a disproportionate amount of council tax compared with people in higher-value properties. That would be fair. Let us see some fairness from the Government in addressing our future funding needs. They should not continue with the national insurance rise and the council tax increase this year, as they disproportionately hit the poorest families hardest.

Economic Update

Clive Betts Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rishi Sunak]

I can confirm that the Welsh Administration will receive £175 million or so in Barnett consequentials, which will enable them to provide a similar discount. The Chief Secretary to the Treasury will speak to the Welsh Government later and will very much make the point that we would like to see that happen, to the benefit of all my right hon. Friend’s constituents and people throughout Wales.

[Mr Clive Betts (Sheffield South East) (Lab)]

On the council tax rebate, some of the poorest families do not pay significant amounts of council tax because they are on council tax support schemes. Even if their council tax bills are less than £150 a year, will they still get the full £150? Will their local authority pay that to them in cash in April? On the £150 million discretionary fund, will it truly be at the discretion of councils to decide how they spend it, or will the Government direct how it is spent?

[Rishi Sunak]

The hon. Gentleman is, of course, well informed on these issues. Our intention is that those people will benefit from the £150, which is why we are providing the discretionary fund. It has been sized with a sense of who those people are and how many they are. We will of course provide some guidance to local authorities on whom we would expect the support to go to, but ultimately they will be able to make those decisions for themselves.

Covid-19: Government Support for Business

Clive Betts Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

I thank my hon. Friend for his question. He is absolutely right to draw the House’s attention to the wider impact across related businesses, which is why Ministers will this afternoon meet a range of representatives, to ensure that the full understanding of the Government is grasped.

[Mr Clive Betts (Sheffield South East) (Lab)]

I simply say to the Minister that unless he acts today to help hospitality businesses they will not be there next year to be helped—that is the simple reality. People choosing not to go to hospitality events, following guidance not to go to the office, is having a big impact on the revenues of public transport operators—bus, coach and Supertram operators in Sheffield. Will he have urgent conversations with the Transport Secretary about extra help for those operators—already we have seen massive cuts to services—and give the money to the transport authorities so that it can be best spent in the interests of passengers?

[John Glen]

Of course discussions will take place across government. The hon. Gentleman draws attention to the transport sector, where of course significant support has been given. However, I take on board his point.