Farming and Inheritance Tax
Daniel Zeichner Excerpts(3 weeks, 6 days ago)
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The Minister for Food Security and Rural Affairs (Daniel Zeichner)
I am grateful for the opportunity to close this debate on the planned reforms to agricultural property relief. It has been important to hear from people on all sides of the debate and to outline the steps that the Government have taken to reach the decision on agricultural property relief. The reforms to APR are just one of the tough decisions that the Government had to take across the board on tax, welfare and spending to plug that £22 billion black hole that we inherited from the Conservatives and restore our public services.
We have had many contributions to the debate; I am sorry that I cannot respond in detail to all of them. On my side, we started with an excellent account from my hon. Friend the Member for Ribble Valley (Maya Ellis). My near neighbour, my hon. Friend the Member for Peterborough (Andrew Pakes), spoke eloquently about the workforce issues; it is astonishing how rarely they are raised from the Conservative Benches, although there are some noble exceptions. We heard from my hon. Friend the Member for Forest of Dean (Matt Bishop) and from my hon. Friend the Member for High Peak (Jon Pearce), who, along with a number of others, rightly raised issues of profitability in the sector. My hon. Friend the Member for Penrith and Solway (Markus Campbell-Savours) made the important point that we are not discussing the Finance Bill today.
My hon. Friend the Member for Hexham (Joe Morris) asked why it takes Labour Members to raise rural crime issues, because anyone who has been out talking to farmers will know that that is their top concern. From my hon. Friend the Member for North Northumberland (David Smith) we heard a powerful account of the value of rural life. My hon. Friend the Member for North East Derbyshire (Louise Jones) again talked about the national health service. These are the concerns of people in rural areas.
From my hon. Friend the Member for Bassetlaw (Jo White), we heard about rural crime again. We heard from my hon. Friend the Member for Rossendale and Darwen (Andy MacNae) and from my hon. Friend the Member for Rugby (John Slinger), who rightly outlined the Conservatives’ atrocious record over 14 years on public services. Finally, my hon. Friend the Member for Bishop Auckland (Sam Rushworth) rightly dismissed the Opposition motion as a load of tripe—although perhaps that is tough on tripe.
A huge range of figures and analysis have been quoted in the debate so far. I have to say that part of the problem with those figures is that they seem to be about different things. Only one set of figures actually gives guidance on this issue, and that is the Treasury figures showing that about 500 estates a year will be affected. That is based on the hard data of the actual claims. It includes the impact of APR but also takes into account business property relief. I urge some Opposition Members to look at the Chancellor’s letter to the Chair of the Treasury Committee, which outlines all the details, taking into account those personal circumstances, the nil-rated inheritance allowances and the other capital allowances. It is available to all Members. Those figures, of course, are endorsed by the independent Office for Budget Responsibility.
Daniel Zeichner
Opposition Members have had a lot of time to make their points. I am going to make mine. Would Conservative Members have been so interested during the last Parliament? I remember sitting on those Opposition Benches hour after hour on the rare occasions when there were rural debates. They had no interest then; suddenly now.
Daniel Zeichner
No. I am afraid that the right hon. Gentleman came in late, and if you turn up late, you do not get to speak. [Interruption.] I recognise the frustration and anxiety being felt by farmers around the country. [Interruption.]
Madam Deputy Speaker (Judith Cummins)
Order. I am sure that hon. Members want to listen to the Minister. I know that my constituents certainly do, and farmers across the country certainly will.
Daniel Zeichner
Thank you, Madam Deputy Speaker. I am not sure that Conservative Members do want to listen, really.
As a result of the anxiety that we know people are feeling, it is right that the Prime Minister, the Environment Secretary and I have all met with the NFU president Tom Bradshaw to talk about the proposed reforms. The Government have and will continue to engage with the NFU, the CLA, the Tenant Farmers Association and other stakeholders. The reforms will not be introduced until April 2026, so there is plenty of time for people to plan for change and to get, as they always should when running major businesses, professional advice about succession planning.
Let us be honest: last month’s protests were not just about APR. Rural communities have felt ignored and let down by this place after decades of failure. The Conservatives sold out British farmers in trade deals with New Zealand and Australia. I listened to the shadow Secretary of State, the right hon. Member for Louth and Horncastle (Victoria Atkins)—did we get any apology for the trade deals? Not a word; no contrition. They have learned nothing. They left farmers facing spiralling energy bills because they refused to invest in cheaper home-grown British power—a decision that sent fertiliser and animal feed costs soaring.
The Conservatives were so incompetent that they failed to get £300 million earmarked for farmers out the door, leaving farmers out of pocket as the money sat idle in Treasury coffers. The disastrous kamikaze Budget crashed Britain’s economy and sent interest rates and mortgages skyrocketing, at massive cost to our farmers and rural communities. As a result of all that, public services are broken; hospital waiting lists are at record highs; schools in rural areas are crumbling—if Conservative Members use them, of course—and roads across country areas are cratered with potholes.
Rural communities are rightly feeling ignored and left behind. This Government will not accept that. These reforms will disincentivise the wealthy from buying up agricultural land to shield their wealth from inheritance tax, and they will also raise the money needed to fix those public services. This is a turning point for national renewal. The Budget also commits £5 billion to agriculture over the next two years.
Simon Hoare (North Dorset) (Con)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.
Oral Answers to Questions
Daniel Zeichner Excerpts(10 months, 3 weeks ago)
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Bim Afolami
I strongly echo the hon. Gentleman’s sentiments. I am very happy to engage with him and his colleagues from Northern Ireland to see what more I can do in the Treasury to work with him and, indeed, the Northern Ireland Executive, particularly to encourage our financial services institutions to invest more in Northern Ireland. I am very happy to discuss ways in which we can do that.
Daniel Zeichner (Cambridge) (Lab)
The Exchequer Secretary to the Treasury (Gareth Davies)
This Government are committed to supporting all parts of the United Kingdom. In October we announced the £1.1 billion long-term plan for towns, which gives 55 towns up to £20 million of endowment-style funding. We are delivering an ambitious programme of investment zones and devolution deals, we ae continuing to support local growth through the UK shared prosperity fund and we are investing billions to improve local transport connections in our regions outside London.
Daniel Zeichner
By their own measures, the Government are failing on almost half of their levelling-up missions in the east of England. Meanwhile, the Cambridge sub-region, which is a net contributor to the Exchequer, has vital transport projects on hold or awaiting finance. When will the Treasury stop stalling growth and give power back to the regions, which know best what needs to be done in their area?
Gareth Davies
This Government are committed to levelling up by boosting growth, raising living standards and spreading opportunity throughout the country in several different ways. The hon. Gentleman talks about giving more power to local areas, and he will know that the Cambridgeshire and Peterborough Combined Authority is getting a £97 million devolution deal. He will also know that Cambridge received some £14 million as part of the shared prosperity fund to spend on local projects. I reject his assertion; the people of Cambridge are benefiting from this Government.
Public Bodies and VAT
Daniel Zeichner Excerpts(1 year, 7 months ago)
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George Eustice (Camborne and Redruth) (Con)
I beg to move,
That this House has considered public bodies and VAT.
It is a pleasure to serve under your chairmanship, Mr Betts. Hon. Members will be well aware that His Majesty’s Treasury tends jealously to guard its primacy on tax matters. Indeed, I remember as a Minister frequently being given a briefing inviting me to respond to questions about tax with the simple words, “This is a Treasury matter.” If I ever sent officials to the Treasury to raise an idea or discuss a particular matter, they would go away with a look of trepidation in their eyes and come back looking rather chastened. However, I never accepted that tax is a matter for the Treasury alone. I have always believed that it is a matter for the Government as a whole because tax affects every industry, every public body and every Department. Its effect on all those things means there is also a vital role for Parliament in scrutinising tax policy.
I want to focus on the Value Added Tax Act 1994 and the way we treat public bodies—especially the unfair treatment of further education colleges. The United Kingdom was forced to introduce VAT when we joined the European Economic Community in 1973, and over the years VAT became one of the big three tools used by Government to raise revenue. It has also been the main go-to tool for Governments when they are trying to deal with a crisis. VAT was slashed after the financial crisis of 2008, and again during the covid pandemic.
Under the VAT rules, tax can be levied on goods at either the standard rate—the full 20% tax is levied on sales—or at a reduced rate of 5% for certain items, such as children’s car seats. There are also zero-rated goods—principally food and children’s clothing. Finally, there is another category—exempt goods. That applies to many services, including insurance, finance and, notably, education.
The 1994 Act established a basis for public bodies to reclaim the VAT on their purchases, even though their services were exempt. That applies in particular to councils, the police, schools or academies and, notably, museums. However, there is an anomaly in the way the tax system works, in that FE colleges are not on the section 33 list that would make them exempt.
Daniel Zeichner (Cambridge) (Lab)
The right hon. Gentleman is making an important and useful speech. Does he agree that the VAT trap has sometimes been used as a way to lure institutions out of the maintained sector and into academisation and that that is another lever that the Government have used the VAT system to create? That has affected institutions such as Hills Road Sixth Form College, Long Road Sixth Form College and Cambridge Regional College.
Oral Answers to Questions
Daniel Zeichner Excerpts(1 year, 7 months ago)
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John Glen
Everyone can see that the Government have made a range of interventions over the past two years, which means support for all of those on means-tested benefits—8 million people. Eight million pensioner households will benefit from the non-discretionary payments, effectively. The household support fund, which we repeated, provides another £1 billion to give local authorities discretion in individual circumstances to offer supplementary support. Of course, I recognise that this is an incredibly challenging time for the most vulnerable, but we have tried to target those interventions on them, listening to the Low Pay Commission and increasing the national living wage to £10.42. We recognise that these are difficult times, but we will get through them.
Daniel Zeichner (Cambridge) (Lab)
Richard Burgon (Leeds East) (Lab)
The Financial Secretary to the Treasury (Victoria Atkins)
It is right that everyone contributes to sustainable public finances, and the Government are ensuring that those with the broadest shoulders pay their fair share. The spring Budget took steps to tackle avoidance and to improve the ability of His Majesty’s Revenue and Customs to collect tax debts. That is alongside taking millions out of tax altogether by consistently raising personal tax allowances. An average of more than £3,300 of assistance per household in the UK has been provided for help with the cost of living over this year and last.
Daniel Zeichner
Last week, energy companies announced record profits—some £60 million a day from North sea oil and gas. Today, the Daily Mirror reports that last month 2 million people were unable to pay a bill, so why on earth do the Government not close those huge, huge holes in the levy on North sea oil and gas profits, and get that money to the people who need it?
Victoria Atkins
I do not think that the hon. Gentleman is being quite fair, as he neglects to tell the House the rate of levy for those companies. He will understand why we have said to businesses that want to invest to improve energy security in the United Kingdom that we will support such investment. That is in our interests, as we have heard today concerns raised by Members of Parliament on behalf of their constituents about the cost of living and the impact particularly of energy prices.
Silicon Valley Bank
Daniel Zeichner Excerpts(1 year, 9 months ago)
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Andrew Griffith
As my hon. Friend well knows, the Government are undertaking a review of ringfencing. There is a call for evidence on how we could reform that, following the work of Sir Keith Skeoch into how we mesh the ringfencing arrangements put in place back in 2008 with the more modern resolution arrangements. We will learn the lessons that we can from this but, as I said at the beginning, in this case we have been able to achieve an outcome that has protected customers, the taxpayers and the financial system.
Daniel Zeichner (Cambridge) (Lab)
I, too, had many representations over the weekend from early stage tech companies in and around Cambridge, and they will be much relieved by the news today. To echo the point made by the hon. Member for North East Bedfordshire (Richard Fuller), the reason they banked with SVB was its close understanding of their particular needs. What guarantee can we have that HSBC will be able to replicate that?
Andrew Griffith
How this bank is run going forward is a matter for HSBC. However, HSBC is a prodigiously successful global institution that has bought SVB on the back of a desire to grow and support that sector, and it sees that this Government are firmly on the side of that sector. We see the aspiration and the opportunity now that we have taken back control from Brussels, and we are going to make an enormous success out of our tech and life sciences sectors; we are on their side.
Landfill Tax Fraud
Daniel Zeichner Excerpts(1 year, 11 months ago)
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Daniel Zeichner (Cambridge) (Lab)
I congratulate my right hon. Friend the Member for North Durham (Mr Jones) and the right hon. Member for Haltemprice and Howden (Mr Davis). They make a formidable partnership, and I suspect they have been talking about this subject for quite a long time. My right hon. Friend described himself as an anorak, but I would say he is very persistent and determined. He should keep on going.
We have had well-informed and passionate contributions from everyone who has spoken in the debate. My hon. Friend the Member for Blaydon (Liz Twist) outlined the problems that her constituents have faced over many years through the unfortunately named Operation Nosedive, and I say to the hon. Member for Newcastle-under-Lyme (Aaron Bell) that the shadow DEFRA team is well aware of the dismal saga of Walleys Quarry.
I suspect there is considerable agreement on both sides of the Chamber on these issues, and I am sure all Members will be disappointed to hear that I am duty bound to reprise some of the arguments that have already been made. I gently say to Conservative Members that, although it is not in my remit to defend the Environment Agency, there will inevitably be consequences to cutting the agency’s funding by half over a decade. Although it is not just a question of resource, that might have played a part.
Landfill tax fraud is a blight on communities across the country. It causes lasting damage to the environment and, of course, deprives the Exchequer of revenue. Back in 1996, when I was a councillor, landfill tax was much talked about as an innovative policy instrument that aimed to divert waste away from landfill and towards more environmentally friendly management options, including recycling, reuse and recovery, but specific issues of concern were identified right from the beginning, including the potential cost to local authorities, the tax’s impact on fly-tipping and the whole issue of perverse unintended consequences.
Over my seven years in the House, I have been struck by our complete failure to follow through with enforcement on the legislation we pass, which is a source of endless frustration to us and, more importantly, to our constituents.
Clearly, the issues we are discussing today are not a new phenomenon. According to the Office for National Statistics, although this tax has had a positive effect of a 65% reduction in recorded waste reaching landfill sites—I emphasise “recorded”—between 1997 and 2014, it is clear that the regulatory framework needed to protect those positive environmental objectives has been piecemeal, slow and unable to react to the changing circumstances.
In October 2021, the Environment Agency estimated that waste crime costs the English economy more than £900 million a year alone, with its 2021 national waste crime survey describing waste crime in England as endemic. As we have heard, this crime is also associated with other criminal acts, including offences against persons. I want briefly to quote a traumatic account referred to by the Environment Agency’s chief executive last year from an anonymous victim:
“Last Wednesday, they invaded our home. A peaceful night shattered by the roar of engines and the glare of headlights. I opened the front door and was confronted by a large group of men who declared they now lived here. We were harassed. Our safe was smashed. Our keys were stolen, and a new lock was put on the gate, trapping us. They dumped piles of waste and trash. We were threatened: ‘I’ll smash your face in.’ By midday they were gone, leaving behind tonnes of rubbish, boasting it would cost £50,000 to remove.”
That shocking account from a victim demonstrates not only how unpleasant these people are, but the lengths that some criminals will resort to. Illegal methods of evasion include the misdescription of waste; the operation of illegal waste sites; the burning and burying of waste; fly-tipping; illegal exports; offences relating to producer responsibility obligations; and abuse of exemptions to the requirements for waste permits, to name just a few.
In response to a Treasury call for evidence last year, the misclassification of waste was described by the Chartered Institution of Wastes Management as
“an environmental catastrophe waiting to happen.”
As we have heard, it also said that the differential between the lower and standard rate of tax was a “massive incentive to misclassify” waste. According to HMRC’s most recent annual estimate of the tax gap, the gap between landfill tax due in the tax year 2020-2021 and the revenue collected in that same year is a staggering £125 million; that is a gap of 17.1%; which is much higher than the overall tax gap for this year. According to HMRC’s own report, the uncertainty rating for the landfill tax gap estimate is “high”. Again, as has been said, it is therefore reasonable to conclude that the actual tax gap is even greater; other things could have been included, for example, fly tipping. That is reported by local authorities to have risen year on year to more than 1.13 million incidents reported in 2020-21, which is an increase of 16% from the 2019-20 figure, according to the ONS. So to give us a sense of the real scale of the problem, will the Minister indicate whether the Government have any plans to include other categories of tax fraud into future estimations of the landfill tax gap? On that £125 million tax gap identified in 2020-21, will the Minister tell the House exactly how much of the due tax has been recovered by HMRC and what resources have been allocated specifically for its recovery?
We heard earlier about the joint unit for waste crime, which brings together law enforcement agencies, environmental regulators, HMRC and the National Crime Agency to tackle waste crime, but the National Audit Office has suggested that the Government still do not have the data they require to assess the true scale of waste crime. The NAO reported that 60 organised crime groups monitored by the JUWC have extensive involvement in other types of crime, with 70% involved in specialist money laundering. We have heard that issue raised here, particularly by my right hon. Friend the Member for North Durham. Given the scale of the tax evasion, it would be helpful if the Government could tell us about the actions being taken to address the prevalence of money laundering, and publish specific revenue recovery figures and detail the number of investigations being undertaken. Frankly, the Government need to get a grip on this. Last year, as my right hon. Friend quoted, a Public Accounts Committee report concluded that the regulatory regime for waste crime is considered to be close to decriminalisation, with fines seen as a mere business expense for waste criminals. The Committee’s report went on to outline that, over recent years, the landfill tax regime has
“increased the incentive to commit waste crime”—
that is a strong charge—
“with HMRC being too slow to prosecute offenders.”
That highlights the lack of a deterrence posed by the current sanctions regime and rate of prosecution.
As confirmed by the Committee and in response to written questions to my right hon. Friend the Member for North Durham, it is extraordinary that there has still not been a single successful prosecution into landfill tax fraud. We have heard about the huge, staggering cost to the public purse of Operation Nosedive. We have heard also about the fact that sanctions are not nearly punitive enough to be a real deterrent against future offending.
According to findings from the National Audit Office in 2022, the most common action taken is to issue advice and guidance. I rather share my right hon. Friend’s view about how likely that would be to be effective. There was advice and guidance in 52% of cases, and warning letters to 37%—that is hardly likely to be a major deterrent to some of the criminal operations that we have been hearing about. It is important that all relevant Government agencies work together to develop a proper plan for making enforcement more effective.
The Committee recommended that DEFRA work with the Treasury and HMRC to ensure that the ongoing review of landfill tax
“takes account of the incentives that the tax as currently designed creates to commit waste crime.”
We heard a number of Members, including my hon. Friend the Member for Blaydon (Liz Twist), refer to Treasury minutes from December 2022 confirming that the Government largely agree with that recommendation and highlighting that, as part of their review into landfill tax, the structure of the tax will be considered. I would be grateful if the Minister confirmed that this is the case.
To conclude, the Government need to do much more to get a grip on waste crime, which is endemic, and ensure that the tax system does not lose revenue to criminality and deception. At a time when working people are facing the highest tax burden in 70 years, the Government need urgently to close the tax gap and reclaim the missing revenues owed to the Exchequer by those engaged in landfill tax fraud. Waste crime lays waste to the environment and damages people’s lives. It makes it much more difficult for legitimate operators working in the waste sector, and, at the same time, undermines investment, jobs and growth. As on so many other issues, it is time for DEFRA in particular, and the Government in general, to get a grip.
Oral Answers to Questions
Daniel Zeichner Excerpts(2 years, 1 month ago)
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Daniel Zeichner (Cambridge) (Lab)
I hear the answer, but this issue is so important not just for the arc, but for unlocking the transport and housing issues in a city such as Cambridge. On different days of the week, we get different views from different Secretaries of State. Can we hear what the Treasury’s view is on the importance of restoring the rail link?
James Cartlidge
As a fellow East Anglian MP, it is great to see the hon. Member working in partnership with colleagues on these important matters for his constituency. He will know that the region was singled out by The Economist in August 2022 as being vital to invest in if the UK is to achieve growth and proper investment, and that East West Rail was a key recommendation in the National Infrastructure Commission’s 2017 report to unlock the potential of the Oxford and Cambridge area, including Milton Keynes. That has not changed and we are committed to it.
Cabinet Office
Daniel Zeichner Excerpts(2 years, 11 months ago)
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Bob Blackman (Harrow East) (Con)
Daniel Zeichner (Cambridge) (Lab)
Nick Smith (Blaenau Gwent) (Lab)
Oral Answers to Questions
Daniel Zeichner Excerpts(3 years, 1 month ago)
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Mr Clarke
My right hon. Friend is absolutely right. Kickstart is providing valuable jobs and work experience to thousands of young people. As of last week, nearly 95,000 young people had started a kickstart job, compared with 56,000 young people at the equivalent point for the last Labour Government’s future jobs fund. That shows that it is a very successful programme. With the current pace of starts, we are confident that earlier this month, 100,000 young people will have started a kickstart job.
Daniel Zeichner (Cambridge) (Lab)
Education is central to highly skilled jobs. This week, a report by the all-party parliamentary university group, which I chair, showed that young people from the most disadvantaged backgrounds most understand the value of a university education. Will the Chief Secretary celebrate the work of universities across the country and perhaps suggest to some of his colleagues that they stop devaluing courses by describing them as of low value?
Mr Clarke
The hon. Gentleman is right to champion the university sector. We in this country are fortunate in having such a fantastic set of universities, and it is important for young people to have the opportunity to enrol on courses that will meaningfully improve their life chances and career prospects. However, it is also important to balance a strong offer for the university sector with an equally strong vocational offer, and we are keen to strike that balance through the new T-levels and our investment in skills—which was a defining theme of this Budget and spending review—so that whatever young people decide to do, they have a strong and credible route to employment and success.
Better Jobs and a Fair Deal at Work
Daniel Zeichner Excerpts(3 years, 7 months ago)
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Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to speak on better jobs in the week that the task of improving skills in Cambridge—indeed, Cambridgeshire and Peterborough—has been taken up by the excellent Dr Nik Johnson, our newly elected metro Mayor, and in the week that Cambridge United secured promotion to league one. No need for skills improvement there—Paul Mullin’s 32 goals are the most ever scored in a league two season, and we are very proud of the team’s success—but in the east, as elsewhere, we have a skills challenge.
The Government have known for years about the skills gap. They have estimated that we will have a shortfall of some 4 million highly skilled workers across the country by 2024. Adult participation in learning is falling and continues to be unevenly distributed, with the poorest adults with the lowest qualifications still the least likely to have access to training. Under the Conservatives, the number of colleges has declined by a quarter, and we are down 350,000 further education students in the last five years. A simple question for the Government: will they listen to the Sixth Form Colleges Association, which speaks for excellent colleges in my constituency, and raise the rate to at least £4,760 per year, and will they protect threatened applied general qualifications, such as widely respected BTECs?
For Cambridge and the area around it, there is a particular problem, because future economic success can never be taken for granted. For our universities and world-leading life sciences and tech sectors, we need to attract and retain people—people who have choices because they can go elsewhere, here or abroad. If homes are too expensive, and transport too difficult, the environment becomes stressed and unattractive. Those are not only problems in themselves; they threaten the very engine at the heart of a future green UK economy.
We have not yet seen the details of the Government’s planning proposals, but if they in any way reflect last year’s White Paper then the row over housing numbers will be as nothing when people realise that for huge swathes of our country the Government are giving a green light to developers to build. “Newt counters” is how the Prime Minister described us. Every person who cares about our countryside, and there are millions upon millions of us, had our concern and our love of our precious land disrespected by him. “Build, build, build,” he says, in his ignorance of what it is that makes our country special.
Homes for all, yes, but without proper regulation and enforcement we know where it leads. Given the appalling experience of so many of my constituents trapped in homes that are unsellable because of the cladding scandal, and facing rocketing insurance costs and huge fees and charges, it beggars belief that the Government’s answer is less regulation—unbelievable until, as The Sunday Times has expressed, one notes the unhealthy and close relationship between the Government and their developer friends. No wonder they want to curb the right to protest and fix the voting system. That is why these proposals should be rejected.