Oral Answers to Questions

Derek Thomas Excerpts

Tuesday 19th March 2024 Commons Chamber

[Gareth Davies]

The hon. Lady is right to highlight the fact that we have extended the household support fund for the most vulnerable. That is on the back of £96 billion of support during the energy crisis and nearly £400 billion of support through the global pandemic. I would just point out to the hon. Lady that the fundamental difference between Conservative Members and Labour Members is that we believe the best route out of poverty is through work, and our party is increasing employment.

[Derek Thomas (St Ives) (Con)]

Across Cornwall and the Isles of Scilly, most jobs are supplied by very small businesses, many of which fall below the VAT threshold. Given the economic inequalities around the region, the increase of the VAT threshold to £90,000 is very welcome, but the threshold being that low and the cliff-edge effect of going from zero to 20% have a chilling impact on growing small businesses and providing all-year-round jobs. Will the Minister consider introducing some sort of taper for that £90,000 threshold, and increasing the VAT threshold further—maybe in the region of £120,000?

[Gareth Davies]

My hon. Friend is right: we increased the VAT threshold for small businesses, which will benefit 28,000 businesses across the country. We feel that the £90,000 threshold strikes the right balance between managing public finances sustainably and supporting businesses, but as my hon. Friend knows, we keep these things under review.

Budget Resolutions

Derek Thomas Excerpts

Tuesday 12th March 2024 Commons Chamber

[Derek Thomas (St Ives) (Con)]

Since the Chancellor delivered his Budget last week, I have given a lot of thought to the subject of productivity and how we address it. There are three key ingredients that create the most fertile environment for productivity to grow: aspiration, skills and secure housing.

Aspiration can be nurtured in many ways, but a significant part of that must be to reward work by ensuring that people keep as much of the money they earn as possible. This is a core Conservative value. In recent years, the Treasury has been right to put support for families and businesses first. The obvious examples of that are support for business through grants, and support for employees through the furlough scheme during the pandemic. Alongside that, there has been additional money for the NHS and for schools—both vital public services for any household.

[Darren Henry (Broxtowe) (Con)]

I am sure that many of my constituents will be delighted and relieved at the cut in national insurance. It is right that individuals keep more of their hard-earned money. Does my hon. Friend agree that we must continue to look for responsible ways to ensure that those who are working hard and contributing to our economy keep as much of their wages as possible?

[Derek Thomas]

I agree with my hon. Friend, and I also think it is perfectly reasonable to have an ambition that we can work towards making a commitment.

Support for household energy bills has also been essential, but obviously it has put pressure on the nation’s finances. These measures hinder the Government’s ability to cut taxes, but productivity is compromised if the burden on business and our workforce is too great. It is good, then, that the Government are now able to further address the pressure on household finance further. This year’s cut in pay-as-you-earn taxes for the average worker from 32% to 28% means that households in west Cornwall, on Scilly and across the nation will benefit by keeping more of what they earn. This is a helpful tool to support the aspiration that Conservative Members want our constituents to enjoy.

The increase in the VAT threshold for small businesses is something that I have been keen to see ever since I was elected. Personally, I would like it to be increased to £120,000 as soon as possible. I see the drag of VAT on small businesses in my constituency, which are curtailing their business in order to avoid the cliff-edge threshold. The increase to £90,000 is welcome and will encourage small businesses to stay open for longer, especially in hospitality in coastal communities such as Penzance and on Scilly. Not only will the business stay open longer; owners will also be able to offer more secure employment and look to grow their business—both of which will benefit Government coffers and drive aspiration.

To support aspiration, we also need to support skills. Wherever we look, we see a shortage of the skills we need: in food and farming, renewables, house building and retrofitting, engineering and manufacturing, health and social care, tourism and hospitality, education, and many more areas. I listened carefully to the speech made by the hon. Member for Huddersfield (Mr Sheerman), including his comments about climate change. Addressing climate change is about changing the way we do and make things, so the Chancellor was right to announce in his Budget a further £120 million to support the expansion of low-carbon manufacturing, which will support the creation of jobs and skills that have not even been invented yet for our school leavers. Also, to further address the climate change issue, the Chancellor has committed £427 million to support investment in agriculture, productivity and innovation. That will secure a farming sector that has provided skilled and local jobs to people across Cornwall and on Scilly for generations, and will continue to do so.

For too long, British business has missed out on an untapped pool of talent, so it was good to hear the Chancellor set out measures to offer new training opportunities for out-of-work older people and confirm the continuation of the “train and progress” element of universal credit, which will also give people a fighting chance to get the skills they need and will help meet the workforce shortages I described. As I say, for far too long, we have not allowed many people to access the work they can do, and have missed out on that pool of talent.

Finally, Conservatives have for years believed in the power of home ownership to give people the opportunity to take a stake in their community, raise children in a secure home, and invest in and improve that home using local skills and local suppliers. The various measures that the Government are taking to make the housing market fairer for people who want to live and work in our communities are very welcome. Owning a home helps to drive productivity: there is nothing quite so tangible and motivating as the sense that hard work can enable someone to provide a safe and secure home for them and their loved ones.

As the Government support councils and social landlords to create the homes we need, will they take a close look at how accessible so-called affordable homes are to local constituents such as mine? For example, properties advertised in Cornwall as three-bedroom affordable homes are marketed at £335,000, and two-bedroom so-called affordable homes are marketed at £265,000. Few people in my constituency are in a position to afford that, and they are effectively abandoned into a rental market that is in great demand.

Productivity is achieved in a low-tax, high-skilled society where a home of your own is within reach. I welcome this Budget’s direction of travel, and ask for much more of the same.

Public Services in Cornwall: Funding

Derek Thomas Excerpts

Monday 15th January 2024 Commons Chamber

[Derek Thomas (St Ives) (Con)]

With your permission, Mr Deputy Speaker, I would like to include in this discussion the Council of the Isles of Scilly, which faces exactly the same kind of challenges. I am in the unique position, among my Cornish colleagues, in that I have two unitary authorities seeking to deliver services to my constituents. I will not speak for too long.

I congratulate my hon. Friend the Member for St Austell and Newquay (Steve Double) on securing the debate. He was right to mention the shared prosperity fund and other funds that recognise the particular challenges that Cornwall faces, but those funds do not pay to deliver rural services, so although it is good and absolutely right that we have that money, we must also consider the money that councils get to deliver services.

My hon. Friend talked about the sheer cost of delivering adult social care. In an area where low incomes are often the norm, people do not have huge amounts of money, and they certainly do not have money sitting in the bank, so when they get to an age when they need social care, it is right that the council steps in. For an older population with a lot of deprivation, it is obvious that the council will have to step in, perhaps in more ways than elsewhere.

Cornwall Council and the Council of the Isles of Scilly have been underfunded for years. We know that urbans councils will receive 37% more in Government-funded spending power per head compared with Cornwall Council. As a result of years of underfunding, rural councils such as those of Cornwall and the Isles of Scilly have had to increase council tax to balance the books, resulting in rural residents now paying on average 20% more than people in urban areas. That is particularly challenging for an area where, as I said, our wages are about a third less than the UK average.

As my hon. Friend said, Cornwall Council services cost more to deliver because of our rurality and coastal stretch. I agree with everything that he and my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) said. The Government have not applied the fair funding formula, and that is the crux of what we are talking about here. As we have heard, in 2016, the Government accepted the challenge, accepted that it costs more to deliver rural services, and accepted that fair funding should be delivered across all local authorities, but they have not applied that in full because of damping and concerns about taking money from urban areas, so will the Minister encourage the Minister with responsibility for local government, my hon. Friend the Member for North Dorset (Simon Hoare), to use the rural service delivery grant to make up the shortfall?

After not delivering the fair funding formula, the Government introduced the rural service delivery grant to address the short-changing that Cornwall, the Isles of Scilly and others have faced. If the Minister takes away one thing from the debate and the brilliant points that have been made, it should be to use the rural service delivery grant to address the shortfall until we can deliver the fair funding formula in full. I say that because predominantly urban constituencies will receive £312 per head from central Government, while Cornwall receives £244 per head. That is a real difference for everyone living in Cornwall and seeking to raise a family and make the most of their lives in Cornwall and on Scilly.

As I have said, in 2016, the Government accepted the challenge and recognised that it costs more to deliver rural services. However, as they have not applied the fair funding formula in full, Cornwall Council and the Council of the Isles of Scilly have been underfunded for years. In reality, Cornwall Council now has £77 less per head than an urban authority to deliver services that are vital for every person in our constituencies. Will the Minister take all that has been said back to the Treasury, as well as to the Department for Levelling Up, Housing and Communities, and deliver what is only fair for the people of Cornwall and the Isles of Scilly? That is all we are asking.

Business Rates and Levelling Up

Derek Thomas Excerpts

Tuesday 13th December 2022 Westminster Hall

[Derek Thomas (St Ives) (Con)]

It is a privilege to speak under your chairmanship, Mr Mundell. I thank my hon. Friend the Member for Waveney (Peter Aldous), for bringing this subject—a pet subject of mine—to the House once more. I am glad that the debate is called “Business Rates and Levelling Up”, because I want to pick up on both of those, and include the VAT threshold within the levelling-up issue, because it is absolutely relevant to my constituency.

Much of what has been said today does not come as a surprise, but every opportunity to argue for a reform of property-based taxes is one that we should seize. As I said, I will touch on business rates and levelling up in relation to the VAT threshold. I do not think I am alone in the view that business rates are arbitrary, taxing the existence of a business within a building, irrespective of its economic activity. It is unfair and discriminates against large independent businesses, especially in town centres, and favours—in my view—out-of-town and online businesses.

I believe that business rates should be scrapped altogether and replaced, although I know that I differ from my hon. Friend the Member for Waveney on that. We should have the courage to replace business rates with a system that taxes in-town, out-of-town and online equally and fairly.

I have a great news story from my constituency. In Penzance, we have the oldest working dry dock. It is a fantastic business, and Members are welcome to come and see it. It is an amazing bit of infrastructure—donkey’s years old, and quite leaky, which does not really work for a dry dock. However, it would not be there—there is still a real risk of closure, partly because of businesses rates—if not for a local individual, a young man, who decided that it needed to be saved and wanted to have a go at it.

The dock was threatened with closure, but he has secured that business and all the jobs and skills there—and increased them—and is spending a huge amount of money on the infrastructure, trying to plug the holes and level the floor of the massive engineering workhouse. It is a fantastic piece of marine engineering, which is vital, and strategically important for the British coastline, particularly Cornwall.

That young man has invested significantly in that old facility, although much more is needed. New jobs and apprenticeships have been created and significant services have been secured and enhanced for marine engineering, and shipping more generally. However, it operates in a highly competitive market and he must find £4,000 a month just for business rates. That is undermining, as we speak, its ability to be competitive, as he needs to pour money into bringing the facility up to where it should be.

It is actually more tax-efficient—if that is the right phrase to use—to close that strategically important dry-dock facility in favour of housing or hospitality. I have done a lot of work with Cornwall Council, which says that there is nothing that it can do, but we are working to find a way to give that dry dock a level playing field with others in the area, which benefit from an enterprise zone arrangement.

I will move on to levelling up, particularly to the obstacle of the VAT threshold. In a rural coastal area where so much of the economic activity, and jobs supporting it, are compressed into the tourist season—many MPs share that problem—effort has been made for years to extend that activity. In west Cornwall, we have worked hard to extend the tourist season into the shoulder months—much earlier and later in the year. I am sure that is true in other coastal areas. That would increase economic gain, jobs wages and skills; it would provide job security, if nothing else.

However, we have faced challenges as we try to do that. There is an acute issue on the Isles of Scilly where, as we try to increase the shoulder months, we come up against the understandable need that small hotels, guest houses and restaurants have for curtailing their business. As they get closer to the VAT threshold, which I think is about £85,000, they will either close or slow down their business to avoid that threshold. The simple reason is that the minute they go over the £85,000 threshold, even by £1, they are clobbered for £9,000 of VAT. They would have to earn another £45,000 in order just to stand still. The problem with a small hotel is that it just does not have the beds, particularly in the shoulder months or the winter, to grow business to that extent.

Unfortunately, the inevitable and sensible decision for many businesses in Penzance and in my coastal community on St Mary’s on the Isles of Scilly is to close. That immediately puts other businesses in the area at risk, contributes to job insecurity and the challenges we face around that every year, hollows out communities, and threatens transport links. We tried to increase the transport running to and from Scilly in the shoulder months, but it was just not viable because people were booking the ferry, but were then unable to find accommodation or places to eat. It is a real challenge, which I have raised many times since I was elected. The last answer I received was that it was going to be looked at in 2024, but I think that might have been pushed further into the future.

Those businesses cannot grow and they would need to earn another £45,000 just to stand still—that is not an incentive for someone to work in the winter, supporting our local economy but with no gain for their business. As a result, we have a real problem in coastal areas. It is harming our ability to level up and to provide good, skilled jobs. We have seen during and following covid that jobs in hospitality and tourism are beginning to be reasonably well paid and more skilled, but they are not secure, partly because of this problem. There is thus a direct impact on job security, other businesses, transport and so on. I am not sure if this is the right place to raise it, but the simple fix is that when a business reaches the £85,000 threshold, VAT should be applied to all money earned above that. It is so simple and obvious that I am not sure why the Government do not do it.

In conclusion, I differ from my hon. Friend the Member for Waveney; tweaking business rates has actually increased unfairness and depressed growth and aspiration —that is the experience in my constituency. Business rates should be scrapped in favour of a tax that reflects the economic activity, not the building the business occupies. To support levelling up, serious consideration must be given to the chilling impact of an arbitrary VAT threshold.

Tackling Short-term and Long-term Cost of Living Increases

Derek Thomas Excerpts

Tuesday 17th May 2022 Commons Chamber

[Derek Thomas (St Ives) (Con)]

I welcome the opportunity to speak in this debate. We have heard much this afternoon about the hike in energy prices. It is well-documented and concerning. However, I welcome the supercharging of the effort to boost homegrown clean energy, which will drive down costs, take the volatility out of the energy markets and cut our carbon footprint. That is all welcome, but more must be done now to help. Those changes will help in the future, but we need help in our homes now, as we have heard. We also need to look closely at the use of the standing charge—a daily charge on every household—which has risen to 50p plus, putting £150 more on the bill. I am concerned that these standing charges will never come down, so it is important that we raise the matter here and that we keep our eye closely on the use of them by energy companies.

We also know that food prices are on the rise, but we are not seeing the same kind of supercharging in the Government’s response when it comes to increasing homegrown food production. Now that we have left the EU, the Government have the power to prioritise food production, using money already available through the environmental land management scheme to supercharge food production to make sure that farmers have the confidence, security and funding to produce the food that we need. Surely if there was ever a time to boost food production in the UK it is now.

I know from speaking to many people in food, farming and fishing that the sector is willing to step up and increase production, but, at the moment, they are planning to sow less, rear less and fish less because of their concerns about the cost of fertilisers, fuel, energy and so on. The Government must look very closely at how we can supercharge homegrown food production.

The real squeeze is on household budgets, especially for Cornwall and the Isles of Scilly. One area that we have heard little about this afternoon is the cost of housing. Rents in recent years have rocketed. In my constituency, people can barely find a house to rent. If they can find one, a three-bedroom house costs £1,400-plus, which is a massive increase on perhaps a year ago. House prices have also rocketed in the south-west, and action is needed, and needed now, to address the matter.

I welcome the fact that the Queen’s Speech includes a levelling up and regeneration Bill, but it must be a response to the housing challenges in coastal areas in particular. Existing homes must be made more efficient; that would help with energy costs, as we heard from the right hon. Member for East Ham (Stephen Timms). New homes must be protected for permanent residence. It is far easier to get homes built in rural areas such as mine if local people know that they will meet a recognisable need, such as the acute need of housing.

More must be done to safeguard the homes in which people already live. Every week, I meet families who have been turfed out of their homes, and those homes are then flipped for other uses. Landlords are not entirely at fault, as changes in the tax system and the energy performance rating system have discouraged them from providing homes for local families. I welcome the Government’s recent commitment to changing the methodology of energy performance certificates, but more must be done to make sure that being a landlord, or providing homes for people to live in, is both attractive and secure. It is vital that the Government take more decisive action to support home ownership, secure a quality home for everyone who needs one and drive down the cost of those homes through good energy efficiency measures.

Oral Answers to Questions

Derek Thomas Excerpts

Tuesday 15th March 2022 Commons Chamber

[Rishi Sunak]

The right hon. Gentleman talks about exceptionalism with regard to policy. Part of the reason we are in this situation with energy prices is the decisions made by the previous Labour Government, in particular on nuclear energy, which we are now rapidly having to make up for. We are also committed to tackling the unprecedented backlogs in the NHS, getting the waiting lists down, and recovering from covid. Every single penny of the health and social care levy will go to the people’s No. 1 priority and, although things are difficult, I know that is what people want to happen.

[Derek Thomas (St Ives) (Con)]

I represent an area in Cornwall where a large number of people are on the state pension. I know, from conversations that I have had with the Chancellor, that he is particularly concerned about that demographic. Given the critical rise in the cost of living, I wonder whether one of the easier routes to address it would be to reinstate the triple lock for next year.

[Rishi Sunak]

My hon. Friend is right to highlight pensioners and to support them in the way that he does. He will know that we made a decision temporarily to move to a double lock this year because of the anomaly in the reported earnings, which would have meant a very large rise statistically that would not have been justified or fair in the circumstances. That said, I am pleased to say that pensions are now at their highest level relative to earnings in over three decades because of the Government’s policy on the triple lock, and we continue to be the party that will support those who need our help.

Oral Answers to Questions

Derek Thomas Excerpts

Tuesday 1st February 2022 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

8. What fiscal steps he plans to take to help reduce the impact on households of the rise in the cost of living.

[Derek Thomas (St Ives) (Con)]

17. What steps he is taking to help people with the increasing cost of living.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

18. What fiscal steps he plans to take to help reduce the impact on households of the rise in the cost of living.

--- Later in debate ---

[Rishi Sunak]

Although I do not know the specific circumstances of the hon. Gentleman’s constituent, it sounds like she will benefit from two measures that we have already announced: the significant increase in the national living wage by 6.6% in April; and the cut in the universal credit taper rate, which will mean that a single mother working full time on the national living wage will be an extra £1,200 better off. That will help significantly with energy and other bills, and of course the warm home discount provides a £140 rebate to those who need it.

[Derek Thomas]

I have met a number of pensioners in my constituency who are on the state pension, but who also worked hard and saved for a private pension; not a huge pension, but a pension that they believed would help them meet the cost of living. Unfortunately, years of low interest rates and now the rising cost of energy, food and other things have made them begin to worry and they are very concerned about the year ahead. Can the Chancellor provide more information on how he will monitor the situation, and support the families and pensioners whom we encouraged to get private pensions but now find that they cannot meet the cost of living?

[Rishi Sunak]

My hon. Friend is absolutely right to highlight pensioners and their needs. As I said, I am proud of the Government’s track record in supporting them. I can also provide him with the reassurance that we continue to look at the best way to provide support to all those in need, as we have done over the last year of two. In the meantime, he will be reassured to know that we have protected pensioners this coming year with the double lock and, as I said, the winter fuel payments providing up to £300.

Coronavirus Grant Schemes: Fraud

Derek Thomas Excerpts

Tuesday 18th January 2022 Commons Chamber

[John Glen]

I listened very carefully, as I always do, to the hon. Lady. I totally agree that we must not accept any fraud and error as inevitable, and we will continue to bear down on that. From the start we designed the schemes to involve “know your customer” and anti-money laundering checks on application. Measures were put in place by the British Business Bank to detect multiple applications—indeed, there was co-operation among UK Finance members on that. Subsequently, we have developed further interventions involving the National Investigative Service, the Insolvency Service and Companies House data to prevent rogue company directors from escaping liability. We will continue to bear down on the fraud that may have occurred. But initial data on the repayment of bounce back loans shows that in only 2% have borrowers defaulted, and only 7% are behind repayments in any form. There is no complacency in the Government’s approach, and we will continue to look at ways to maximise what we can reclaim where there have been errors and fraud.

[Derek Thomas (St Ives) (Con)]

It is right that we look carefully at how council tax payers’ money is spent, but let me refer to the current covid grant scheme, particularly for Cornwall. We in Cornwall need reassurance that Cornwall Council has absolute discretion in how to ensure that current leisure grants, for example, go to the businesses that most need them. At the moment, the council is saying that it has to pay the money to whoever applies, irrespective of how well their business is doing. My understanding from the Government is that, if a business is impacted by omicron, staff shortages, or reduced consumer demand, that is when the grant is paid. Could the Minister confirm to me, and to Cornwall Council, that it is for the council to ensure that the money goes where it is most needed, and that is what the Government intend?

[John Glen]

I can certainly confirm that the intention behind the range of interventions was to find the most appropriate delivery mechanism for the different support payments, and obviously we have worked with local authorities to give them that discretion. Every authority will need to be held to account for how it has decided to deliver the grants. My hon. Friend has made a clear case for where those priorities need to lie, and we are clear about the intention behind the grants, but it will be for local authorities throughout the country to make their decisions in the right way.

Spending Review 2020 and OBR Forecast

Derek Thomas Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

We have said that as the EU funding that we are currently financing runs off, we will step in and replace it up to the tune of about £1.5 billion, which is the UK amount. Obviously there are conversations to be had about how best to allocate that, what kinds of projects, and how it should be done. Some initial thoughts on that are published today, alongside more than £200 million of funding to start piloting the approach and working with communities to see what works best. I know that people in Wales will welcome that and I look forward to seeing the proposals that they come up with.

[Derek Thomas (St Ives) (Con)]

The Chancellor is quite right that people want to look back and see that their community is better off than before. To pick up on the point about the shared prosperity fund, Cornwall also received European funding and has been promised the shared prosperity fund, but it is often difficult in areas where the population is not so large to demonstrate value for money to the Treasury, and as a result we miss out. As he sets out more on the levelling-up fund and the shared prosperity fund, wages in Cornwall remain stubbornly low. Can he reassure me that those funds will address low wages, provide good jobs, improve skills, and provide the pathway to the skills and opportunities that people in Cornwall need?

[Rishi Sunak]

I commend my hon. Friend, because he consistently comes to the House to champion his constituents and talk about increasing the opportunities available to them. He is right that we want to make sure that we target our resources at the places where they can make the most difference. I look forward to hearing from him what projects he thinks will be able to transform the lives of his constituents and the communities that they are proud to call home.

Lockdown: Economic Support

Derek Thomas Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I am terribly sorry, but I missed out the hon. Member for St Ives—Derek Thomas.

[Derek Thomas (St Ives) (Con)]

Thank you, Madam Deputy Speaker. I hope it is worth waiting for.

Can I thank the Chief Secretary for all that is being done to help my constituents in west Cornwall and on Scilly? One of the great successes of recent years is the job growth across Cornwall, and that is because small businesses have been set up by entrepreneurs—individuals who know they cannot get a big job in big business, because they do not exist in Cornwall, so they have set up their business. The problem is that they are very early in their business, and they are growing, maturing and flourishing, but this year has been a disaster for them. They are at a point now where they just do not know if it is worth continuing, because of his second lockdown being announced, and they just do not know what the future holds. Will the Chief Secretary look very carefully at how we can encourage these people to stick with it, but also look at, as we have discussed already this afternoon many times, the support that is available to these fledgling businesses so they really have the finances to sustain these jobs? We must make sure these businesses can be part of the recovery that we will so badly need next year and beyond.

[Steve Barclay]

As my hon. Friend knows, it was largely down to his representations that specific support was put in place—for example, to maintain the ferry link that I know was critical for his constituents—and he deserves great credit for the convincing case that he presented to the Treasury, which secured that additional funding. On the wider point about support to the business community, it is in recognition of the importance of those small businesses that the Government have allocated over £13 billion of support to the self-employment income support scheme, but it is also why the Chancellor has put in place additional measures, such as extending the loans that are available to help those businesses get through this period to, hopefully, the more beneficial period as we come out of the winter period.