Landfill Tax Fraud
Debate between David Linden and James Cartlidge(1 year, 10 months ago)
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The Exchequer Secretary to the Treasury (James Cartlidge)
It is a real privilege to respond to today’s Backbench Business debate. I congratulate the right hon. Member for North Durham (Mr Jones) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) on calling this debate. I have only responded to one of these Backbench Business debates before, and it was when I was a Justice Minister, and, sure enough, one of the proponents was my right hon. Friend. It was on the subject of strategic lawsuits against public participation, so he does cover a diverse range of issues, but that is a credit to him.
The shadow Minister, my regional neighbour, referred to the fact that the right hon. Member for North Durham had called himself an anorak on this subject. I agree with the shadow Minister that, what the right hon. Gentleman has shown—as have the hon. Member for Blaydon (Liz Twist) and my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell)—was a clear passion for this subject. He raised some very serious and important constituency matters.
I want to assure all hon. and right hon. Members that we do agree that landfill tax fraud and wider waste crime is an important concern in itself, but it also has a distortive effect on legitimate waste management businesses and the waste management sector, causes significant environmental damage and seriously impacts on local communities. Every single Member who has spoken today—with an emphasis, it should be said, on quality rather than quantity of colleagues participating—has clearly emphasised, above all else, the impact on their communities. I totally understand and sympathise with that point.
I will just canter through the history, as the shadow Minister did, because it is very important. We had a long established habit of landfilling our waste. As recently as the 1990s, more than 90% of household waste went to landfill, with only 5% of household waste being recycled. As he said, a landfill tax was introduced in October 1996 to help remedy that. The idea was to encourage the diversion of waste away from landfill and towards more environmentally friendly waste management options, such as recycling, reuse and recovery.
Having introduced the tax, it is also true, as the right hon. Member for North Durham pointed out, that successive Governments have applied escalators to that standard rate. These escalators increased the rate but also provided lead-in time and certainty that was welcomed by the sector, which was looking to invest in more sustainable waste management options. The tax has been widely recognised as being successful in contributing to the fall in landfill waste.
Where are we now? Since 2000, local authority waste sent to landfill in England has fallen by 90% and household recycling rates are now at around 45%. The tax collected in the last financial year was £667 million, which is in many ways a successful tax. Obviously, I am speaking primarily from the Exchequer’s point of view, but we have achieved a substantial policy goal there. We should think of a parallel universe in which we did not achieve that reduction in landfill—imagine how many square miles of our wonderful countryside would now be taken up by landfill. It is a striking thought.
David Linden (Glasgow East) (SNP)
I do not want to intrude too much on this debate, but the Minister is right when he talks about the importance of moving more towards recycling and less to landfill. Will he join me in calling on Glasgow City Council to reject the planning application from Patersons of Greenoakhill, a landfill site that blights communities in Mount Vernon, Carmyle, Baillieston and Broomhouse?
James Cartlidge
It is fair to say that the hon. Gentleman has got that on the record, but he will appreciate that I am not going to comment—it is devolved, but beyond that it is a planning matter and not a matter for the Exchequer. He has got it on the record, though.
It is true that landfill tax has inevitably been relatively difficult to enforce, and non-compliance is high. The right hon. Member for North Durham is absolutely right that this is partly due to increases in the standard rate but, obviously, as the tax has increased, it has become more effective at incentivising disposal other than landfill. In parallel, there has inevitably been an increase in abuse and non-compliance.
Universal Credit and Working Tax Credits
Debate between David Linden and James Cartlidge(3 years, 2 months ago)
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James Cartlidge (South Suffolk) (Con)
It is a pleasure to follow the hon. Member for Halifax (Holly Lynch).
This is not a decision anybody or any Government take lightly. Members in all parts of the House are right to raise the real-life cases to which they refer; these are our constituents and the people we are sent here to represent. I have the greatest respect for the former Secretary of State, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), and for my hon. Friend the Member for Carlisle (John Stevenson), who I know feels strongly on this subject. He talked about the need to level up through raising real wages. I totally agree with him on that, and I will be coming back to that point.
However, I wish to start by focusing on the opening remarks of the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). I have a lot of time for him. He puts his case in a very reasonable tone, and I am sure he feels as passionately about his views as I do about mine. His argument was, in essence, that Conservative Members do not understand the benefits system and the fact that some people in work receive these benefits. That is very far from the truth. Let me share with him my real-world experience. I have put this point on the record several times in these debates, because it is incredibly important to understand this.
Before becoming an MP, I ran a small business. We decided to award pay rises, and I was shocked when three members of staff declined: one declined the actual pay rise and the other two would not work more than 16 hours. I admit that at that point I did not know about the tax credits system—I had never claimed on it myself and I had not employed people on it—but I then discovered the hard reality of its cliff edges. When two skilled members of staff said to me, “James, I’m sorry but I just can’t do more than 16 hours because of this cliff edge,” I realised the insanity of that—of the state spending billions to put a ceiling on people’s working life and ambitions and on the limits to what they can achieve.
We should never have any ceiling on ambition; we should always seek to enable people to make the most of the natural talents with which everyone is born. That is a fundamental view that I hold, so although this issue is very difficult—I accept that people will be affected, including in my constituency—the Government are, fundamentally, doing the right thing.
We have to consider three key points, the first of which is the impact on individuals, which is the hardest part. It is a question of the extent to which one has faith that individuals can work the extra hours, and that in a vibrant economy with 1.2 million vacancies they can recover that income—and far more, over time—either by working more hours if they are in work or, if they do not have a job, by moving into work.
David Linden
Just short of two hours ago, the shadow Secretary of State, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), asked the hon. Gentleman how many households in his constituency will be affected by this cut; has he been able to work that out in the past two hours? If he does not know that figure, it would be reckless for him to go through the Lobby today and vote for this cut to his constituents.
James Cartlidge
That was quite an odd moment because, as the hon. Gentleman will have noticed, I intervened on the shadow Secretary of State and, slightly cheekily, he then intervened on me, in a completely novel form of Commons procedure. No, I do not know that figure off the top of my head. I represent those households in this House and I know some of them, and we all know that this change will cause issues. This is not an easy decision, and, as I said at the beginning of my speech, it is not taken lightly, but I have faith in our economy. There are 1.2 million vacancies and the owners of small and medium-sized enterprises—such as me—and the owners of big businesses are crying out for labour. They are desperate for staff.
On 5 August, the Governor of the Bank of England, Andrew Bailey, said something incredibly important:
“The challenge of avoiding a steep rise in unemployment has been replaced by that of ensuring a flow of labour into jobs.”
What a position to be in. At the start of the pandemic, we were all fearful that we would see a huge rise in unemployment—probably one of the biggest in generations. The peak was predicted to be 2 million higher; that is an entire recession’s worth of unemployment. I am proud of what we have achieved in keeping unemployment far lower than that, because it is so damaging.
On the impact on individuals, therefore, we must look to the economy and the extent to which people can work the extra hours to make up the lost income, which I am confident people can. The second key point is the impact on the public finances. It would be extraordinary for us, who are charged with being in Parliament to hold the Executive to account for the moneys they raise, not to consider that impact. The hon. Member for Stalybridge and Hyde said from the Labour Front Bench that we could use the headroom to fund the £6 billion, which basically means borrowing the money. But this commitment will be permanent. The hon. Gentleman wants to use what is potentially a short-term position in the public finances to fund a permanent increase in the welfare state.
Here is the context. Labour has said that, one way or the other, it will keep the triple lock—perhaps not the exact scheme, but it would cost several billion pounds more than the cost of the decision we have made. Labour has also said that it would keep the overseas development spend at 0.7%. Those commitments amount to more than £10 billion, and possibly to £15 billion. It is not good enough simply to say, “Use the headroom.” We know what happened when we had a Labour Government who were irresponsible with public money: we had the great recession and all that that meant for people’s livelihoods and for the poorest in society in particular.
The third key point is the impact on the wider economy. As the Governor of the Bank of England said in the quote that I read out, the issue that we now have is not mass unemployment, as we all feared, but a lack of workers. In many ways, that brings its own headaches. Going back to the point made by my hon. Friend the Member for Carlisle, the upside is that we could be moving into a new era in which those on lower wages see much higher real-terms pay growth than they would otherwise have had. That is an incredibly important development. The focus of Government policy should be to improve real wages, bring unemployment down even further, manage the public finances responsibly and drive the economic recovery forward. That is the correct thing to do.