National Insurance Contributions (Increase of Thresholds) Bill

Clive Efford Excerpts

Committee stage
Thursday 24th March 2022 Commons Chamber

Lastly, let us not forget that the Welsh Labour Government will benefit from this levy through the Barnett formula. The Government are fiscally responsible, and committed to spending where needed. For my constituents in Wrexham, this is the deed to match the words “levelling up”.

[Clive Efford (Eltham) (Lab)]

I want to speak to new clause 2. Yesterday, I was shocked by the Chancellor’s response to people’s entreaties of him to do something more for those on low incomes. As I pointed out to him in an intervention, there is an anomaly—I hope it is one—that the Government will want to put right: when those on universal credit who pay national insurance have their threshold raised to £12,500, the £330 that they gain as a consequence will be subject to the 55% taper. That means that they will not get the full saving. Money is being clawed back by the Government from some of the poorest workers in the country. That cannot be right.

Last year, the Chancellor of the Exchequer announced the reduction in the taper, which was very welcome. He announced a number of measures that increased the incomes of the poor, although we should remember that he took away the £20 a week uprating of universal credit. Those people are still going to be better off as a result of the changes yesterday, but the ones on universal credit who I have just referred to will be less well off than they were anticipating ahead of yesterday’s statement. How can that be? The poorest workers in the country number 2.3 million; I suspect that what the Government claw back from them will mean hundreds of millions going back to the Treasury. That cannot be fair and it cannot be right. By my calculation—I will stand corrected if I am wrong—such people will gain £330, of which they will lose £171, so the actual gain will be in the region of £159. That cannot be right.

My new clause 2 would require the Government to confirm in a report whether my fears and estimates are right that people on universal credit who pay national insurance will lose roughly half the money that they gain. Subsection (2) aims to find out how much the Government will gain from some of the poorest workers in the country because of the changes. If we highlight how much that is, I hope that they will attempt to do something about it and compensate such people for their loss. As we have heard all too often in this Chamber, people on low incomes in this country—families, in particular—have to make choices between feeding their children, clothing their children and switching on the heating, and about what food they buy. When people are living on the margins of, or in, extreme poverty, sums of money that may sound small are extremely significant. How did we manage to have a statement yesterday that clawed money back from such people?

Subsection (3) calls on the Chancellor to deliver that report to Parliament in 30 days. It cannot be right that such people are missing out in this way. It must be an oversight by the Government. It would be an extremely callous move if they actually knew that, as a consequence of the national insurance threshold being lifted, people would miss out in this way. I would be interested to hear from the Government, without delay, exactly who misses out, if they do at all, and how much the Government will benefit from it, if they do.

[John McDonnell]

I tabled new clause 1 because, from now on, I do not think that the House should discuss any legislation that has financial consequences without it understanding or at least having information about the effect on poverty and low pay. I would have liked that information for this Bill, although I can understand why we do not have it today. However, in future, the Government should lay a report before the House that explains the expected impact on low pay and poverty of any piece of legislation and assesses the effectiveness of its provisions.

The nature of this debate so far has demonstrated a lack of appreciation or understanding—and certainly a lack of agreement—about the objective realities of what is happening. Many have quoted the comments of the Institute for Fiscal Studies and the Resolution Foundation, but some of this is about hard facts, so let me put on record again the situation that we face. At the moment, 4.3 million children and 2 million pensioners in the UK live in poverty. Overall, 14 million people live in poverty, and that was before the cost of living crisis hit us. A report from a UN rapporteur described people living not just in severe poverty, but in “destitution”. According to analysis today from the Resolution Foundation, 1.3 million more people will be living in poverty.

One reason I am asking for such a report is so that we can ask simple questions of the Treasury. What forecast have Her Majesty’s Treasury and the Department for Work and Pensions, or the OBR, made of how many children, pensioners and people in the UK will be in poverty by the end of 2022-23?

Yesterday the shadow Chancellor asked the Chancellor how many pensioners and children would be pushed into poverty by the failure to uprate benefits and pensions in line with inflation, and the Chancellor failed to give any answer. It would be useful to have an answer today. Child poverty is already up by more than 500,000 since 2010, and it is interesting to note that most of those children—more than 60%—live in households in which one adult works. That, too, calls into question the levels of pay in this country.

The Joseph Rowntree Foundation estimates that the uprating of just 3.1% will drag more than 400,000 more people into poverty, and as we have pointed out time and again during the debate, inflation is forecast to rise over the year to between 7% and 10%. Has the Treasury analysis come up with the same figure as the foundation, or a different one? If the figure is different, we would like to know why, and on what basis.

The other issue raised in the new clause is low pay. A total of 4.8 million workers earn less than the UK real living wage of £9.90 an hour, or £11.05 in London. The rise in the minimum wage this year—a 6% rise to £9.50 —still falls short of the Living Wage Foundation’s real living wage, and, given that forecast of an inflation rate between 7% and 10%, it is a real-terms pay cut. According to the Office for Budget Responsibility:

“Real incomes have been stagnant since the start of 2019 and this is now expected to continue over the next few years”.

The OBR went on to say that we were about to see the largest fall in incomes on record:

“With inflation outpacing growth in nominal earnings and net taxes due to rise in April, real livings standards are set to fall by 2.2 per cent in 2022-23—their largest financial year fall on record”.

A presentation of analysis by the Institute for Fiscal Studies took place this morning. According to the IFS, public sector pay has fallen by 3% in real terms in the last year, and is 2% lower in real terms than it was 12 years ago. The Department for Education’s average pay offer to teachers is 4%, and the fact that inflation is so much higher has obviously hit their wage levels. There is a group among the workforce who are being hit particularly hard by the Government’s changed arrangements relating to loans for tuition fees that they incurred while they were studying, and who will again be impacted severely by what is almost, in effect, an additional income tax.

Paul Johnson of the Institute for Fiscal Studies expressed incredulity—as have many of us—that the Government had done nothing for those on benefits or for pensioners. He pointed out that, according to the OBR, we are seeing the biggest fall in incomes since 1956, and that the inflation rate experienced by poorer households is even higher than the average. He said that it was “hard to understand” the Government’s “lack of action” on benefits. That lack of understanding of the Government’s approach is the reason for my new clause. I think that in future when we are debating issues such as this—Government measures involving public finances, benefits and wage levels—we will at least need to have a detailed report before us which explains the consequences of measures relating to low pay and poverty.

In the new clause, I have also asked the Government to assess alternative measures that they could take, and to provide an analysis of why those measures were not taken or why they might be brought to bear in the future if not immediately. All I am pleading for is a rational debate based on the widest possible information being provided to this House when we consider measures like this, so that we know whether the decisions we are taking will improve or undermine the standing of our constituents when it comes to low pay and poverty.

--- Later in debate ---

[Lucy Frazer]

I recognise the point made by the right hon. Member and I will of course consider it for the future. Considering a variety of hypothetical scenarios is time-consuming, which is why that is not traditionally done, but I will take his point away and consider it further.

I reiterate some of the points we discussed on Second Reading only a moment ago about the impact of the measures on those in lower pay and on universal credit. As hon. Members know, there was an autumn Budget not very long ago, followed now by this spring statement. In the autumn Budget, the Chancellor started the journey of helping to support those on lower pay through the tax system. He announced the first tax cut on his journey to cut taxation—the cutting of the taper rate, which will put £1,000 into the pockets of those on universal credit.

Hon. Members will already know about the increase in the national living wage. They will have seen the £1 billion household support fund, which is helping people in all our constituencies, building on other measures that were announced at the autumn Budget. More recently, we have provided £9 billion in energy support. There is the increasing generosity of the local housing allowance for housing benefit and the holiday activities and food programme. The Chancellor’s plan for jobs—the Conservative plan—whether through the kickstart scheme, the restart scheme, work coaches or boot camps, is to ensure that, where people can get into work, they get into work, and they are upskilled so that they earn more for themselves.

On new clause 4, the increase to the primary threshold and the lower profits limit is a tax cut on earned income that will benefit almost 30 million working people.

[Clive Efford]

Will the Minister give way?

[Lucy Frazer]

I will just finish this point; I will come back to the hon. Gentleman. We are introducing a tax cut for a typical employee that is worth more than £330 in the year from July 2022. The impact of the provisions in the Bill have already been published in a tax impact information note published on gov.uk, and the impact of the income tax basic rate cut will be published ahead of implementation in 2024.

The hon. Member for Bath raised a question about landlords. We have taken steps over several years to ensure that landlords pay a fair tax contribution.

In April 2016, we introduced a higher rate of stamp duty land tax for those purchasing additional properties, recognising that, although the private sector plays an important role in our housing market and people should be free to invest in buy-to-let properties, the purchase of additional properties can affect the ability of other people to get on to the property ladder. We also restricted finance cost relief so landlords no longer get relief at their marginal rate if they are a higher or additional rate taxpayer. Finally, we maintained the 8% higher rate of capital gains tax for landlords compared with the rate for other taxable gains.

[Lucy Frazer]

I am going to give way to the hon. Member for Eltham (Clive Efford) first. He is probably going to ask about the previous point.

[Clive Efford]

I am wondering whether the Minister missed new clause 2, because she did not address the problem. Yes, increases were introduced in the autumn Budget last year, but this year, people are getting less than they were anticipating due to the increase in the threshold of national insurance. People were being told yesterday that they should get an extra £330, but they will actually get less than half of that. What is the Government going to do about that? The Treasury is clawing back several hundred million pounds from some of the poorest workers in the country.

[Lucy Frazer]

I do not know whether the hon. Member was in the Chamber when the right hon. Member for East Ham (Stephen Timms) raised this point and I addressed it. He is right to point out that an individual may be affected by the taper, but overall they will be better off as a result of this change. If those people are earning below the work allowance, they will get the full benefit. I reiterate that the changes that we have already made mean that those who are on universal credit will benefit by £1,000 from the cut to the taper rate.

Financial Statement

Clive Efford Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend, as ever, makes a thoughtful point. Innovation, broadly defined, along with multi-factor productivity, accounts for about half our productivity growth. The pace has slowed recently and we need to reinvigorate it. I set out a strategy to do that at the Mais lecture, and key to that will be driving up private sector investment in R&D and innovation. The tax cuts and reforms we will put in place in the autumn will help us to achieve that end.

[Clive Efford (Eltham) (Lab)]

Can the Chancellor confirm that someone in employment who is on universal credit will see an increase in the taper between £9,500 and £12,500—a £1,290 clawback to the Chancellor? What is he doing to address that issue, which will involve the poorest workers in the country facing a £1,290 increase in their taxes?

[Rishi Sunak]

I think the hon. Gentleman is describing how the taper works. It withdraws benefits as people’s incomes rise. That is how the system is designed. However, I can tell him that, because we took action to cut the universal credit taper rate last autumn, we delivered a tax cut of £2 billion for almost 2 million people. I gave the example earlier of a single mother with two children who is renting and working full time on the national living wage. As a result of all our tax, welfare and wage changes, that person will be £1,600 better off.

Prime Minister’s Chief of Staff Appointment

Clive Efford Excerpts

Monday 7th February 2022 Commons Chamber

[Michael Ellis]

We have had those, and we will continue to have more.

[Clive Efford (Eltham) (Lab)]

We should remind ourselves why we are in this predicament, or why the Government are in it: the Prime Minister made a slur against the Leader of the Opposition during the statement last Monday, accusing him of failing to prosecute Jimmy Savile—something that the victims of Jimmy Savile say has no basis in truth and should be withdrawn. What is it about the Government that makes them think they know better than the victims of Jimmy Savile? Is not that the reason why they cannot find anyone decent to fill these roles?

[Michael Ellis]

The two things are completely unconnected. The hon. Gentleman is wrong to characterise the appointment in that way. It must be recognised by all and sundry that this appointment is of someone who has served this House and the Government in a ministerial capacity for many years; he could hardly be more experienced. He will present the House with the accountability, transparency and quality of administration that it would expect.

Simon Hinchley-Robson: Discharge from the RAF

Clive Efford Excerpts

Monday 10th January 2022 Commons Chamber

[Clive Efford (Eltham) (Lab)]

Over the last few years, I have been supporting Simon Hinchley-Robson in his pursuit of justice for the way he was treated when he was discharged from the RAF in 1986 for being gay.

Mr Robson signed up to serve his country for 22 years in the Royal Air Force in 1980. He came from a family with a tradition of serving their country: his brother was in the Army, his father had been in the Navy and his grandparents had served in the RAF. In 1986, while he was serving as a chef at RAF Brawdy, Haverfordwest, Wales, he became ill and was diagnosed by RAF medical staff as having glandular fever. After the diagnosis, he continued to lose weight and then requested a test for AIDS. The doctor who was examining him became extremely angry, and he was transferred to a civilian hospital, where he took the test. After 10 days, he was discharged from hospital back to RAF Brawdy. Immediately on his return, he was arrested by the RAF police—the Special Investigation Branch. The request for the test was taken as an admission that Mr Robson was gay.

I will read Mr Robson’s own words, which describe what happened to him from the moment he arrived back at RAF Brawdy:

“What happened next was the most horrendous and awful experience no one should ever have had to endure. I was led to an interrogation room, this, unknown to me, was to be my home for the next 4 days. I was denied food, I was denied sleep and only given small amounts of water.

I was immediately searched, asked to strip and searched internally. They said that this was procedure. As a young 21-year-old, terrified, what do you think was going through my mind?

I was asked to list every person in any of the services I had some sort of relationship with, this I refused. On refusing, I was assaulted and again instructed to strip, the medical gloves went on and I was again subject to what I can only say was ‘RAPE’, while I was again internally searched.

After about 12 hours I was taken, handcuffed, to my billet and the SIB (Special Investigation Branch) then searched all my belongings and personal letters, my mattress was slit open and I was told this was because they were looking for drugs.

My mail was taken away and read...they said, I was most likely being blackmailed and as such, they needed to make sure Defence secrets were not being passed on”—

and this is Mr Robson’s emphasis—

“Hello I am a chef, no access to data, aircraft, secrets etc.

After this humiliation in front of many camp personnel as I was paraded to my billet, not driven, in handcuffs, and for all to see, I was then taken back to the interrogation room. I was thinking that this was the end, and that would most likely be the end of my career, how wrong I was.

It was change of shift, and the process started all over again, searched, told to strip, medical gloves on, internal searches again. At this point, I was now convinced this was happening for their…pure sadistic satisfaction, yet I had no recall to complain to any officers in charge as the SIB were a law unto themselves.

With the change of shift the process started all over again, they wanted names, none were given, and I was slapped for not helping them.”

I should add here that Mr Robson has explained to me that the shifts changed every four hours, and on every change of shift he was stripped, searched and searched internally. We must ask what the purpose of these searches was. Given that he was in custody all of this time and had no means of obtaining drugs, how could he have anything to hide? What was taking place was a form of torture of Mr Robson for being gay. The question has to be asked: was this sanctioned by the RAF? This seems likely: after all, there was remarkable consistency in the pattern of behaviour between the shifts. How common was it for gay personnel to be abused in this way, or does the Minister believe, as Mr Robson asks, that it was to satisfy the sadistic pleasures of those inflicting the humiliation?

Mr Robson continues:

“They pulled out a number of birthday cards and a get-well card. In one it read, ‘Hurry up back to the kitchen Si, Paul is missing you’ with a big smile. This comment refers to a colleague chef, who I didn’t see eye to eye with, it was a joke message.

The SIB were now convinced he was involved. This person was married was serving overseas in Cyprus with his family and that, would be the next port of call.”

I should add here that, according to Mr Robson, two members of the Special Investigation Branch were flown to Cyprus to interview this other chef. They interviewed his wife about his sexuality, and they interviewed his primary school aged daughters.

Returning to Mr Robson’s words:

“Throughout the interrogation I was handcuffed and treated like a terrorist, how was this allowed to happen in Her Majesty’s Royal Air Force.

I was a Chef, no access to any classified material unless they wanted the recipes for a lasagne, all this humiliation went on for 4 days, and to their sadistic satisfaction, it wasn’t until the 4th day we had a new female doctor arrive in camp [who] intervened and stopped the interrogation. I was immediately sent home on sick leave to await my discharge.

I had been spat at, hit, examined by individuals that were plain animals, and all because I had admitted I was Gay.”

Mr Robson states that officers from the SIB told him:

“We don’t have gays in HM Royal Air Force”,

and that they

“should all be put on an island and nuked.”

He was also told that he was

“the lowest level of life.”

The irony of all this is that, at the end, when he went back finally to sign his discharge papers, which he had to do to avoid going to prison for 18 months, he was required to sign to join the reserves for three years, meaning that, if needed, he could be called up to serve in an emergency.

At the time that this took place, none of Mr Robson’s family was aware that he was gay. That meant that he effectively lost his job and home and risked being outed. This left him mentally distressed and suicidal. He has told me of others he knows who went through the same treatment, for whom the distress was too much and who went on to take their own lives.

Mr Robson had signed up for 22 years with the RAF and he considered this to be his life and career. He would have received a full pension and lump sum when he left the service, but instead he receives a minor pension. As a consequence of his forced discharge under threat of being charged and imprisoned, Mr Robson lost his income and the pension that he would have been entitled to.

Mr Robson made clear what he wants from the Government in a 2018 letter to the then Prime Minister, the right hon. Member for Maidenhead (Mrs May):

“I want the Government to admit that these interrogations and humiliation of gay people were wrong. I should be compensated for this now that it is accepted that LGBT people can serve in the armed forces.

I want my pension, as if I had served my full term, is that not rightful thing to do?

I want a public apology for what I went through and many others and for those who did not have the strength to see it through and took the suicide road.”

At the time of Mr Robson’s ordeal, the Sexual Offences Act 1967 had ended prosecutions against civilians who were gay. This did not apply to members of the armed forces until 1992. Subsequent decisions of the European Court of Human Rights clearly demonstrate that armed forces personnel were discriminated against and had their rights denied at this time. Many suffered the additional personal and physical abuse that Mr Robson endured, and have had no recognition of their treatment or compensation for the salaries and pensions that they have missed out on.

I am aware from answers I have received in letters from Ministers that section 10 of the Crown Proceedings Act 1947 was in force at the time of Mr Robson’s discharge and that although it was subsequently rescinded, this was not applied retrospectively. In a recent answer, the then Minister for Defence People, the hon. Member for Plymouth, Moor View (Johnny Mercer), quoted the Limitation Act 1980, section 11 of which provides a three-year period after the date on which the cause of action accrued in which personnel can make a complaint.

My view is that those regulations cannot be used to deny Mr Robson his right to justice. I would point to the illegal actions of the RAF’s Special Investigation Branch when Mr Robson was in its custody. He was physically assaulted on at least 12 occasions by multiple individuals, he was denied his right to legal representation, and his human rights were violated.

I would argue that there is no statute of limitation that excuses this criminal behaviour and can prevent Mr Robson from being compensated by the country that he wanted to serve. Although 36 years have passed since Mr Robson was discharged from the RAF, I urge the Minister to go away and reflect on his unacceptable treatment at the hands of the SIB, and, having done so, to accept that the Government are morally bound to compensate him for being denied the chance to serve his country as he had planned, and for the physical torment that he suffered for being gay.

[The Lord Commissioner of Her Majesty's Treasury (Alan Mak)]

Let me begin by associating myself with the tributes from Mr Speaker and many others to Jack Dromey. He will be missed across the House, and I send my condolences to the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and the rest of Jack’s family.

I congratulate the hon. Member for Eltham (Clive Efford) on securing an important debate on an important issue. I know that he is a long-standing and formidable advocate for the LGBT+ community in his constituency, and the issue that we are discussing tonight clearly has broader implications for the way in which Defence treats its people. That, however, should in no way diminish the harrowing experiences of Mr Hinchley-Robson in the 1980s. I have no wish to defend that behaviour. It was plainly appalling. It was inexcusable, it was wrong, and it unfairly tainted a promising career. It is certainly to Mr Hinchley-Robson’s great credit that despite receiving that treatment, he has been able to go on and serve his community with distinction, as he once served his country.

I want to address the issue of compensation from the outset. As the hon. Gentleman noted, at the time of Mr Hinchley-Robson’s service in the RAF, section 10 of the Crown Proceedings Act 1947, which barred members in Her Majesty’s forces from pursuing common law claims for compensation against the Ministry of Defence, was in force. As the hon. Gentleman also noted, section 10 was subsequently repealed by the Crown Proceedings (Armed Forces) Act 1987, but that was not made retrospective.

However, in 1999 the European Court of Human Rights concluded that the MOD had discriminated against service personnel in relation to sexuality as a protected characteristic. That led to the Court directing the MOD to provide a remedy for those who were affected, with most pay and pensions claims being settled by 2008. As regards new claims for compensation, the MOD would always advise that independent legal advice be sought. When common law claims are received, they are considered on the basis of whether or not the MOD has a legal liability to pay compensation. When there is a proven legal liability, compensation is paid.

We should not forget that, shocking though Mr Hinchley- Robson’s case is, it is historical. The MOD of 2022 is a very different entity from its 1980s incarnation. Mr Hinchley-Robson was discharged from service in line with the policy in place at the time. That unjust and retrograde policy was rightfully changed on 12 January 2000, and the RAF, in line with the other services, now has a range of policies and processes to ensure that such unlawful discrimination is eliminated.

[Clive Efford]

I did point out in my speech that those regulations were in place at the time, and they have been quoted to me in previous correspondence with Ministers. What I am also highlighting, however, is the physical abuse that Mr Robson suffered at the hands of the Special Investigation Branch, which went way beyond just applying the rules and regulations that existed at that time. Surely the Government have some responsibility to him as a consequence of that behaviour.

[Alan Mak]

I have seen the correspondence to which the hon. Gentleman has referred, and I am aware of the allegations that have been made. They are very serious, and, as I said earlier, my advice is for Mr Hinchley-Robson to make a formal claim to which the MOD will respond.



In 2012, power was conferred on the Home Secretary to formally disregard certain convictions for specified repealed homosexual offences and, in 2017, automatic pardons were introduced for individuals who had had their convictions disregarded, as well as posthumous pardons for those who had died before the provisions came into force. I am proud to say that, at the start of this year, the Government unveiled plans to expand those powers so that more veterans could benefit. Amendments to the Police, Crime, Sentencing and Courts Bill will enable individuals who have been convicted of same-sex activity under any offences that have now been repealed or abolished to apply to the Home Secretary to have those convictions disregarded. The scheme is also being extended to all general disciplinary offences that were used to prosecute men and women for same-sex activity.

At the turn of this decade, 20 years after military personnel were allowed to serve as openly lesbian, gay or bisexual, the MOD main building was lit with rainbow colours and both the RAF and the Army were listed among Stonewall’s top 100 employers. In February last year, we began returning medals to veterans who had been forced to forfeit them for reasons connected to their sexuality. And, last November, I was proud to see our LGBT+ military and civilian personnel marching with pride in the Remembrance parade. Today we have a thriving LGBT+ network in the MOD, and all serving personnel and veterans can access a range of support mechanisms, from the 24/7 anti-bullying and harassment helpline to the Veterans’ Gateway.

The fact that things have changed out of all recognition does not mean we are complacent. On the contrary, reports such as those released by Air Chief Marshal Wigston in 2019 and by the House of Commons Defence Committee last year act as constant reminders to keep doing more to ensure that all armed forces personnel can thrive. That is why the MOD’s leadership, from the Secretary of State for Defence down, has been crystal clear in stressing that there is a zero-tolerance policy on unacceptable behaviour or discrimination of any kind within the organisation. Today, all personnel are encouraged to call out such bad behaviour, whether they are a victim or a witness. They will never be penalised for doing so. I also want to reassure the hon. Member that our upcoming veterans’ strategy action plan will include further steps designed to address past wrongs.

Today we are looking to build a force fit for the future, but we will not succeed if we exclude parts of our community. Nor can we claim the moral high ground as a proud defender of global freedom, tolerance and justice if we fail to show the same regard for our own people. Yet our desire to make the MOD a more diverse, more inclusive and more welcoming place has less to do with operational imperatives and much more to do with a fundamental respect for human dignity. Every individual, no matter their sexuality, their gender, their colour, their race or their religion, deserves to be treated with consideration. This commitment to diversity and inclusion is one that I take personally and seriously, as the first ever Member of Parliament of British Chinese heritage and the first ever Government Minister of British Chinese heritage to speak at the Dispatch Box.

We should be especially proud of those courageous individuals who are prepared to stand up and, if necessary, lay their lives on the line for their country. Individuals such as these are the best of us—individuals such as Mr Hinchley-Robson. The fact he and others within the LGBT+ community faced discrimination in the not-too-distant past remains a cause of shame and huge regret, but it is now incumbent on us to use this case as a powerful reminder that such shocking incidents must never happen again.

Question put and agreed to.

Finance (No. 2) Bill

Clive Efford Excerpts

2nd reading
Tuesday 16th November 2021 Commons Chamber

[The Financial Secretary to the Treasury (Lucy Frazer)]

I beg to move, That the Bill be now read a Second time.

On Sunday, MPs across the House remembered all those who died in conflict. It is now 76 years on from the time we started to rebuild our country from the devastation of world war two. The bombs that rained down during that war caused enormous loss of life. They tore our cities apart. In London, air raids wrecked or razed to the ground some 116,000 buildings, and in Liverpool and Bristol tens of thousands of buildings were damaged or destroyed.

While the war left a mark on the nation that lasts to this day, those dark years were followed by a period of reconstruction and renewal. In 1951, the iconic Royal Festival Hall opened in London as the centrepiece and legacy of the Festival of Britain. In the 1960s, Liverpool built its extraordinary Metropolitan Cathedral, while the iconic Severn bridge was constructed near Bristol.

Today, we are living in very different times, and we have thankfully not experienced such devastation here again, but we share some parallels with our wartime predecessors. As we emerge from the pandemic, our cities’ buildings may remain intact, but jobs, families and livelihoods have been at risk, and some have been damaged by the worst economic shock in 300 years. It is right, therefore, that we too now rebuild and turn our attention to creating a better future for this country and its people. Last month, the Chancellor started that work. His Budget set out our plans for the stronger economy that will allow Britain to succeed: an economy of stronger growth, stronger employment and stronger public finances, with higher wages, high skills and rising productivity. This Finance Bill will achieve that.

Before I turn to the Bill’s main measures, I will talk about its context. Our economic situation has improved since the last Finance Bill. We have moved away from emergency support to focusing on our recovery, which is now well under way. In fact, the economy is expected to bounce back to its pre-covid levels by the turn of the year—earlier than was expected in March—while our economic plan to safeguard jobs, livelihoods and businesses has worked. As a result, we can now invest in better public services, in jobs and skills, and in levelling up the country so that we open opportunity to everyone everywhere.

However, we should not forget that debt is still at its highest level as a percentage of GDP since the early 1960s and is set to pass £1.3 trillion. While this level of borrowing is still affordable, it leaves us vulnerable if another crisis hits, so we must continue to create a stronger economy that can withstand financial shocks. That is why the Chancellor announced a new charter for budget responsibility, with two fiscal rules that will keep us on the right track.

I want to focus on three aspects of the Budget in this Finance Bill: support for people, support for businesses and growth, and some underlying aspects of fairness. This is a Government who put people first, and this Bill’s measures complement the wider action we took in the Budget to support individuals and working families right around the country. We have reduced the universal credit taper rate and increased the national living wage so that work really does pay. We have continued our fuel duty freeze, helping to lower the cost of everyday life. We have announced that public sector workers will receive fair and affordable pay rises across the whole spending review period.

This Bill will improve people’s lives by backing the businesses that generate jobs and growth. In March, we extended the temporary £1 million level of annual investment allowance on plant and machinery assets. The allowance was due to revert to its previous level of £200,000, but as the Chancellor said:

“Now is not the time to remove tax breaks on investment”.—[Official Report, 27 October 2021; Vol. 702, c. 283.]

This Bill extends the £1 million level until the end of March 2023, encouraging firms to invest more and invest earlier.

While the changes to business rates that we announced in the Budget will encourage more firms to grow and invest, the Bill will also help the UK’s financial services industry became even more successful. In the March Budget, we said we would increase the corporation tax rate to 25% from 2023, for which we have now legislated. However, to make sure that our banks stay internationally competitive while still paying their fair share of tax, this Bill sets the bank surcharge rate at 3%. In addition, we are increasing the bank surcharge annual allowance from £25 million to £100 million, a move that will help smaller, challenger banks.

The Bill also supports another important industry—shipping. It does this by making our tonnage tax regime simpler and more competitive, and by rewarding companies that adopt the UK red ensign.

Finally, we should not forget that our cultural industries also contribute to our economic success. This Bill therefore extends the tax relief on museum and gallery exhibitions for another two years until the end of March 2024, and it doubles the tax relief for theatres, orchestras, museums and galleries until April 2023, to revert to the normal rate only in April 2024. This tax relief for culture is worth a quarter of a billion pounds.

Tax is of course central to our economic health and to funding the public services that make people’s lives better, but the way we collect tax must be fair and simple too, and the measures in this Bill will help us to achieve that. As Members will be aware, we are tackling the social care crisis with a new UK-wide 1.25% levy on national insurance contributions. This Bill will increase the tax rate on dividends by the same amount, so that those receiving this income will also contribute in line with employees and the self-employed.

[Clive Efford (Eltham) (Lab)]

Can the Minister tell the House just exactly how much of that national insurance increase is going to go to social care?

[Lucy Frazer]

The hon. Member will know that this has been set out. First, the money will go to the NHS, and then afterwards it will be going to social care. It is absolutely essential that we do that. £12 billion will be collected and will be going through to our social care services, as well as to the NHS.

--- Later in debate ---

[Clive Efford]

Will the Minister give way again?

[Lucy Frazer]

I will just carry on to my next point, which is that there will be an increase in the social care budget in the spending review period.

A fairer tax system also means tackling those who avoid paying their share. A new economic crime levy will help to fund measures that will prevent criminals from laundering money in the UK. It will apply to about 4,000 businesses and bring in £100 million. The Bill also contains tougher measures to prevent promoters from marketing tax avoidance schemes. In addition, it includes sanctions to tackle tobacco duty evasion, which costs the Exchequer an estimated £2.3 billion a year. The Bill also clamps down on electronic sales suppression, a form of tax evasion in which a business deliberately manipulates its electronic sales records to reduce its recorded turnover and corresponding tax liabilities.

--- Later in debate ---

[Clive Efford]

I am grateful to the Minister for giving way again; she is being very generous. It is important that we nail down the issue of where the national insurance increase is going. The Minister said earlier that it was going to the NHS and then it was going into social care, but it cannot be spent twice, so when will that money be switched, and what level of cuts will the NHS face then in order to shift that money into social care?

[Lucy Frazer]

I find it disappointing when people talk about cuts when actually there is significant investment—record amounts—going into the NHS. This Budget highlighted not just £5 billion for the diagnostic centres the Department of Health and Social Care will be operating around the country, but £9 billion for covid support, and the hon. Gentleman will know that £36 billion was put into the NHS before that—a significant sum. So it is dangerous when people talk inappropriately about cuts. There are not any cuts; this is investment going into the NHS.

Budget Resolutions

Clive Efford Excerpts

Wednesday 27th October 2021 Commons Chamber

[Clive Efford (Eltham) (Lab)]

I have often found myself wondering what levelling up means and how we know that we have got there. I have discovered the answer in the Budget today. It means that the Tories’ ambition is to get back to Labour’s level of public funding in 2010. Eleven wasted years—the Chancellor and the Prime Minister are trying to create the impression that this Government have only been in power for the last two years, and that they were not part of austerity and the years that followed. We cannot return to a system of austerity that kicks the stuffing out of our public services to the point that they do not have the resilience to respond to something such as the covid pandemic. Covid taught us that we need resilient public services—services that we are not only entitled to, but that we so desperately need to have in place.

The Tory austerity years from 2010 saw the lowest annual increases in NHS spending—lower even than under Margaret Thatcher, so she would be very proud of the Government. There have been cuts to police funding; central Government grants for policing fell by 30% in real terms between 2010 and 2019. There have also been cuts to education funding. According to the IFS, education funding from 2010 to 2019 was the worst since the 1970s. Government funding for local authorities has fallen by an estimated 49% in real terms from 2010 to 2018. Our public services were already stretched before covid came along.

In 2010, funding for Sure Start—we have heard a lot about that today—was £1.8 billion. It was cut by a third by 2018, with over 500 centres closing between 2011 and 2017. We now have today’s announcement of £300 million. That is nowhere near to getting us back to where we were with Sure Start. We have had all the guff about wraparound services, but these could easily have been provided through Sure Start—why was it cut? We heard from the Chancellor about youth spending, with another 300 youth clubs. Youth service spending was £1.4 billion in 2010. By 2019 it had been cut to £429 million, and 700 youth clubs went, as well as 4,500 youth workers.

Then we have the 21,000 police officers that were cut. The Conservatives came here and told us that they were going to cut 21,000 police officers but that it was going to result in more police officers being on the street. They closed nearly 600 police stations. In London, they took £1 billion away from policing; when the Prime Minister was Mayor, we lost our safer neighbourhood teams. My local Tories are now campaigning about closures of police stations—the brass neck! The Tories were warned that cutting 21,000 police officers would lead to rising crime, as it did, and now they are panicking and trying to put 20,000 officers back, as was confirmed in this Budget. Like burglars wanting to be thanked for returning stolen goods, they want to be thanked for reversing the cuts that they made in the first place.

It is the same in the NHS. Capital spending is back to 2010 levels—so we cannot not welcome that. We have 80,000 vacancies in the NHS. The Tories cut nursing bursaries. They were warned that that would lead to a lack of recruitment among nurses. We now have 38,000 nursing vacancies—nearly half the vacancies in the NHS. What was the Government’s response after covid—after everything nurses had done? The Government wanted to give them a 1% pay increase. That is not the way to deal with the recruitment crisis in the NHS. There was precious little about that in the Budget. A Nursing Times survey indicated that 80% of nurses feel that patient safety is compromised due to the severe staff shortage. Health Education England is saying that we need £900,000 per year for training to plug the gaps in nurse numbers in our NHS. In 2015, the Government promised 5,000 doctors, but we are 1,300 down on that figure.

In education, it is a similar situation. According to the IFS annual review of education funding, teachers’ pay has fallen by 9% since 2010. Total spending per pupil in England was just over £6,400 in 2020. Compare that with the high point of £7,200 in 2010, under the last Labour Government. Now we are going back to 2010 levels, the Chancellor claims in the Budget. Overall, the most deprived secondary schools have received a 14% real-terms cut per pupil between 2010 and 2020, compared with just 9% in the least deprived areas. Go tell that to the red wall seats! The IFS says that represents the largest cut in over 40 years. The increase in spending in previous years under the Labour Government was 60%. Cuts to our children’s education just highlight the reality of Tory austerity Britain. Under austerity, our children’s education was expendable. Funding had consistently been cut since 2010. Small wonder that the Tories failed to fund the catch-up that our children need following covid and refuse to feed our children during the school holidays.

Since 2010, as part of austerity, the Tories’ strategy has been intentionally to impose a cut on public sector pay. As a result, average public sector pay is £900 lower today in real terms than it was in 2010. For many, the loss in pay was more than £900 a year. For example, nurses and community nurses at NHS band 5 are more than £3,000 worse off today in real terms than they were in 2010. Residential care workers employed by local government are nearly £1,900 worse off in real terms. Ambulance drivers are £1,600 worse off in real terms. Now we are told that the Government believe that public sector workers deserve a pay rise. Will it be funded? Do they intend to restore public sector pay to 2010 levels in real terms? Will they fund those pay rises no matter what is recommended, or will the Government insist the increases are found from within existing budgets, as they did with nurses’ pay this year?

What does levelling up mean when it comes to poverty? In 2010, 49,000 people received three days’ worth of emergency food from Trussell Trust food banks; in 2019, that number was 1.9 million; and in the last financial year, it was 2.5 million. Is reducing reliance on food banks a measure of levelling-up success? Since 2010, the number of pensioners in poverty has risen from 1.6 million to 2.1 million. The TUC found that the number of children growing up in poverty in working households has risen since 2010 by 800,000 to 2.9 million. Working households comprised 37% of those below the official poverty level in 1994-95. By 2017-18, that had risen to 58%. Most people in poverty live in a family with someone in work—a dramatic change from 20 years ago according to the Joseph Rowntree Foundation. Will we see those people levelled up as a result of this Budget? I think not.

Then there is the cut to universal credit. In my constituency, 8,690 households containing 5,383 children will lose a combined £9 million. That is £9 million they will not have available to survive from day to day. That is £9 million that will not be spent in my local community. They will be facing the costs of inflation, fuel bills and food prices that they cannot avoid. The living wage increase does not touch families living on universal credit. It only affects the 2 million people on the national living wage. As we heard earlier from my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), the taper on that was at 75%. When we take into consideration income tax—income tax relief has been frozen, so that is an increase—and the increase in national insurance, with the marginal rate of tax for people on the national living wage, the change will be minimal. They will be lucky if they end up with £7 a week—not the large figures read out by the Chancellor.

Getting funding back to the levels of 11 years ago is not progress. It is an indictment of the Tories’ record and underlines the fact that we have had 11 wasted years of Tory austerity. Sadly, following this Budget, I think that that will continue.

Budget: Pre-announcement of Provisions

Clive Efford Excerpts

Tuesday 26th October 2021 Commons Chamber

[Mr Clarke]

I thank my right hon. Friend for his question. I will not comment on leaks—[Laughter.] The absolute bottom line is that we are, of course, committed to plan A, and there is no question but that he will find that plan A remains the resolute conviction of both this Government and, I believe, this House in terms of how we can most sensibly take the country through the winter ahead. We are not moving to plan B. We are committed to plan A. He should be reassured that we want to keep our economy and society open as we move through the challenges of the weeks and months ahead.

[Clive Efford (Eltham) (Lab)]

I have been here for many years and have seen many Budgets. I have seen the Order Papers being waved on the day, and then the Budgets fall apart over the following hours and the following days, but this is the first Budget that I have seen fall apart before Budget day. We have heard the announcement about public sector pay, but we have not heard whether, if it is increased, that increase will be funded, or whether it will have to come from within existing budgets. When the Government were forced to increase the pay rise for nurses from 1% to 3%, they did not fund it; they forced it to be funded from within NHS resources. Since we are into leaks, will the Minister tell us whether the Government intend to fund a public sector pay increase?

[Mr Clarke]

Ensuring that we can move out of the shadow of the public sector pay freeze is obviously something that we are all glad to be able to do. The Chancellor will set out the full details of how that will operate in his statement tomorrow.

Health and Social Care Levy Bill

Clive Efford Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Steve Barclay]

I think one needs to see whether these are roles that are driving efficiency and creating savings elsewhere, or whether they are viewed in isolation. That is why one needs to understand the workforce as a whole, where there are overlaps within the NHS but, above all, how we deliver reform, which is something I know that the Secretary of State for Health and Social Care is passionately committed to doing. That relates to the point that was rightly raised by my hon. Friend the Member for Winchester (Steve Brine) on the delivery of reform in order to maximise the value for money of the spend that the levy will unlock.

Finally, we need to fund our vision for the future of health and social care in this country over the longer term. As the Prime Minister said, with proper funding, we can not only tackle the NHS backlog and expand the social care safety net but afford the nurses’ pay rise, invest in the best equipment and prepare for the next pandemic. We can provide the largest investment ever to upskill social care workers and build the modern, more efficient health service the British public deserve.

[Clive Efford (Eltham) (Lab)]

It seems to me that we are spending this money twice, so can the Minister tell the House specifically how much will go into the NHS from this increase and how much will go into social care? What I am hearing from him is that we are going to deal with the backlog, which will take us back to pre-pandemic levels. That will leave us with a 2 million waiting list, so can he tell us specifically how much is going into the NHS and how much is going into social care?

[Steve Barclay]

Of the £36 billion, £5.4 billion is going to adult social care, with the rest going into the NHS or through Barnett. That is over three years.

--- Later in debate ---

[Jeremy Hunt]

As it happens, we are currently conducting an inquiry into how to deal with the covid backlog, so I commit to my hon. Friend, with whom I so enjoyed working at the Department of Health and Social Care, that we will certainly do that.

[Clive Efford]

rose—

[Jeremy Hunt]

I will give way and then make some progress.

[Clive Efford]

I have heard what the former Secretary of State has said about the record on social care, but can he explain what he did to try to prevent the Conservative Government from taking £8 billion out of social care?

[Jeremy Hunt]

First, we passed the Care Act 2014, which put in place the legislative foundations for the proposals that we are now going to fund. Secondly, I happen to agree with the hon. Gentleman: the social care system has needed more money for some time. That is why it is so extraordinary that his party is to vote against this Bill.

If we are going to take £12 billion a year out of people’s pockets, we need to avoid falling into three traps—and I say this as someone who has fallen into more traps in this policy area than anyone else in this House. The first trap that we need to be careful of is the workforce. If we put an extra £8 billion into the NHS but we do not have £8 billion-worth of additional doctors and nurses to do the extra treatments, the risk is that that money will hit the ground without touching the sides. That is why we need a workforce plan.

The Health Foundation says that the backlog will require 4,000 more doctors and 18,000 more nurses, but we have not had any workforce plan from the DHSC. I suspect that in the short term we will have to relax all the immigration requirements for doctors and nurses. That will not be great for developing countries, but it may well be our only choice. In the medium term, the best suggestion is what my Select Committee and many others have proposed: we should give Health Education England the statutory responsibility to produce independent workforce estimates and create a discipline, a bit like the OBR does for Budgets, to make sure that we are training enough doctors and nurses. That is the first trap.

Health and Social Care Levy

Clive Efford Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Clive Efford (Eltham) (Lab)]

This national insurance increase is a point of no return for the Tories. It is an unfair way to raise the money needed for our NHS and social care, with those who earn the least and the young paying for those who are already well off. It is the biggest single tax increase in 70 years, which will see the highest level of tax paid in the UK in peacetime, and as my hon. Friend the Member for Sheffield South East (Mr Betts) pointed out, the Government’s own document says there is more to come in council tax increases. We have already had increases and precepts imposed on council tax. When the Tories got caught out because they cut 20,000 police officers, they put a levy on council tax to pay for police officers and this year they put on a 3% levy—£600 million—to go into social care. They have had their hands in people’s pockets for several years now and they have not taken them out.

Let us be clear: the claim that the Tories are the party of low taxes and a small state is over. The argument in the future will be about how we invest in public services and how we value the workers who work in them. People earning as little £10,000 will pay the increase. People who can afford to pay more, such as hon. Members on these Benches, should not rely on them to pay increased taxes: they should be asked to pay their fair share. People who have to count every penny to survive on a daily basis—to buy food and to pay rent, travel costs and household bills—have to budget day by day to live and they will have to tighten their belts, but those of us on higher incomes who could pay more and whose lives will not be changed by this increase will not have to tighten our belts at all.

My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) pointed out one of the areas that will suffer most. It is those areas where the Tories talk about levelling up that will be the hardest hit by this tax increase. What of their local economies, with the tax the Government are taking out of those economies that will not be there to be spent in local businesses? There is no levelling up in this tax the Tories are imposing, and there will be less money to circulate in those economies. It is not fair that those people we clapped during covid—care workers, delivery workers, shop workers, postmen and postwomen, and many more who kept our economy going during difficult circumstances—will be asked to pay a disproportionate amount through this tax increase.

There is no going back for the Tories from this day forward. Whatever happened to the pledge the Prime Minister made in 2019 that no one would have to sell their home to pay for care and that he would co-operate across the House and discuss the way forward on how to deal with the issue of social care? That is yet another broken promise from this Prime Minister. If a person is property rich and cash poor, how are they going to be able to avoid having to sell their homes? The £86,000 is a Kensington cap. Outside London, in many areas the cap is far too high and will lead to people losing their homes.

There is no plan for social care in what the Government have announced so far. The Tories have behaved here today as if these problems had just been created and had just emerged because of the pandemic, but nothing could be further from the truth. The waiting list was 2 million before the pandemic hit, and they took £8 billion out of social care. Where was all the hand-wringing and all the concern about social care and the NHS back then? They are using the pandemic as cover for 10 years of cutting public services and underfunding our national health service. How are they going to explain to their constituents that they are being forced to pay this increase to pay for 10 years of Tory neglect?

Ministerial Code/Register of Ministers’ Interests

Clive Efford Excerpts

Tuesday 18th May 2021 Commons Chamber

[Clive Efford (Eltham) (Lab) [V]]

MPs make mistakes from time to time and when that is drawn to their attention they apologise and we are severely admonished for them, but it is extraordinary that the new register of ministerial interests has not been published yet, and when Ministers start to double down and reports are not published, people start to wonder what the Government have to hide. Is the Minister saying to us today that no one has breached the ministerial code of conduct and that this is all just a misunderstanding that will be sorted out when various reports are published?

[Penny Mordaunt]

The hon. Gentleman’s question again betrays what is actually taking place this afternoon. I do not know; I do not have a crystal ball to see into the future. I am in the same position as everyone else, but what I do know is that to make unsubstantiated allegations about people is quite wrong.