National Insurance Contributions (Secondary Class 1 Contributions) Bill

Desmond Swayne Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[James Murray]

I will make a bit of progress; I have been generous in giving way.

The choice that we have taken is difficult; it is not one that we have taken lightly. As I have fully acknowledged in the Chamber, the impacts of this measure will be felt beyond businesses, as the Office for Budget Responsibility has acknowledged. Let me put the decision in context and say what we could have done instead. We could have reversed the previous Government’s cuts to employee national insurance. Those cuts were simply not honest because they were based on a forecast that the OBR said would have been “materially different” if the true extent of the last Government’s cover-up had been known. We made a commitment to not increase the taxes that working people pay, and we have delivered on that promise and made a different choice.

[Sir Desmond Swayne (New Forest West) (Con)]

rose—

[James Murray]

I will give way; I am being too generous I think.

[Sir Desmond Swayne]

The manifesto said that Labour would not increase rates of national insurance contributions. The Minister is perfectly entitled to use the argument, “We never realised that it was this bad, so we have had to change what we said we would do”, but to pretend that Labour has not resiled on its manifesto promise is pure sophistry.

[James Murray]

In fact, it is both things: it is true that we have kept to our manifesto pledge of protecting working people by not increasing income tax, the national insurance that working people pay or VAT; at the same time, the situation is far worse than we thought it would be when we won the general election, with the £22 billion black hole and the fact that the OBR said that its forecast would have been “materially different” in March, had it known the true extent of the previous Government’s cover-up. Those are facts that the OBR put out there and from which we cannot hide.

--- Later in debate ---

[Richard Fuller]

The hon. Gentleman talks about the Conservative record. Shall I talk to him about our record on national insurance? In 2010, when Labour was last in office, it broke the economy and left a note saying that there was no money left. We did have to increase national insurance rates—but not by as much as is proposed today. Thereafter, we increased national insurance thresholds with inflation; these proposals do not do that. We introduced the employment allowance, which admittedly the Government are increasing. We then introduced national insurance reliefs for young workers. We increased national insurance income thresholds in 2022, 2023 and 2024. That is the Conservative record. We do not believe in the jobs tax: we do not think it helps growth, and we do not think that it will increase taxation.

[Sir Desmond Swayne]

rose—

[Richard Fuller]

I will make a bit more progress and then give way to my right hon. Friend.

If the Minister does not like the Resolution Foundation’s judgment on this tax, he should just listen to the Institute for Fiscal Studies, which said:

“Simple economic theory suggests that the incidence of employer NICs and employee NICs should be the same, at least in the long run. It is likely that the long-run incidence of both employer and employee NICs is predominantly on employees”.

The measures in the Bill represent by far the largest part of the tax grab in the October Budget. The Treasury Red Book assesses that these measures will raise £23.7 billion in the next financial year, rising to £25.7 billion, but the Minister knows that behavioural changes means that they will actually raise substantially less; the IFS estimates about £16 billion.

I note that in the Red Book there were three opportunities for this jobs tax to be referred to as “Delivering on our Promises”. There is:

“Delivering on our Promises—New Policy to Close the Tax Gap”,

“Delivering on our Promises—Collecting Tax That is Due”

and even the catch-all:

“Delivering on our Promises—Other Manifesto Tax Commitments”,

but the increase in national insurance contributions cannot be included in any of those, because Labour politicians hid their intentions from the British voters at the election.

Finance Bill

Desmond Swayne Excerpts

2nd reading
Wednesday 27th November 2024 Commons Chamber

[Mel Stride]

My right hon. Friend makes a perceptive point, to which I will come momentarily, but first let me deal with VAT on private schools. We have already heard about the displacement effect—the behavioural effect—and the thousands of pupils who will have their education disrupted and the impact on their families, but does not this measure tell us all we need to know about socialism? Those who stretch to try to make ends meet to send their children to those schools are to be denied. Their aspiration is to be sacrificed on the altar of envy. Is it not as simple as that?

My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) is right: the Budget will not create strong foundations for the future; it will create a vulnerable and brittle economy. The Chancellor has very little headroom against her fiscal targets. Against the stability target, because the Government have talked down the economy and gilt rates have responded in turn, it is conceivable that almost all that headroom has already disappeared. I will prophesy that, without doubt, perhaps if the forecasts turn in the wrong direction, or the pressure on departmental spending over the next two years becomes difficult for a profligate Labour Government, or because of some external factor, as my right hon. Friend suggested—maybe tariffs from Donald Trump’s America, or if his deficit-funded tax cuts lead to higher bond yields and higher interest rates here—I almost guarantee the House that, however it occurs, this Government will come back for more in due course.

[Sir Desmond Swayne (New Forest West) (Con)]

May I prophesy too?

[Mel Stride]

I will let my right hon. and gallant Friend prophesy.

[Sir Desmond Swayne]

To be fair to the Prime Minister, he made it absolutely clear that things would have to get worse. The difficulty is—this is my prophecy, if you like—that there is no prospect of them getting better thereafter.

[Mel Stride]

That is an extremely astute observation. The prophecy is that things will get tougher further down the line. It will then be the case that this Government took decisions that left us in a weak and vulnerable position to withstand them. Why has this happened? The Labour party has very little business experience. Very few Members on the Government Front Bench have started up a business or grown a company in any significant manner.

Oral Answers to Questions

Desmond Swayne Excerpts

Tuesday 29th October 2024 Commons Chamber

[Rachel Reeves]

We will set out more details in the Budget tomorrow, including the consequentials that will go to the Scottish Government.

[Sir Desmond Swayne (New Forest West) (Con)]

Investment requires a measure of optimism, not the collapse in business confidence that the Chancellor has engineered. She would have done better to stress some of the positives that she inherited, wouldn’t she?

[Rachel Reeves]

It is good to have an explanation of how to do my job from one of the Conservative Members who crashed our economy. Some £63.5 billion of investment into the UK was announced at our international investment summit—investment in life sciences, investment in data centres and digital, investment in clean energy—because businesses have confidence that this Government are bringing stability back to our economy and working with businesses to seize the opportunities. I am really excited about doing that in all parts of our country and working with business to do so.

Public Spending: Inheritance

Desmond Swayne Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

We have had to make difficult decisions today to cancel road and rail infrastructure projects. These are not decisions we wanted to make, but if the money is not there, we cannot go ahead with those projects. It is as simple as that. The money has to be there and the sums always have to add up, because I will not make the mistakes of the previous Government and Liz Truss, crashing the economy and sending interest rates and mortgage rates spiralling for our constituents. That is why I have had to take these actions today to get a grip on public spending and public finances. I make no apology for that, but I recognise the damage it does to so many constituents with projects that they had expected to see happening.

[Sir Desmond Swayne (New Forest West) (Con)]

When the Chancellor’s legislation enables illegal entrants to leave their current accommodation, where will they go?

[Rachel Reeves]

Under the previous Government, no applications were being processed and so nobody was being sent home. We will process those applications and send people who have no right to be here back home.

Finance (No. 2) Bill

Desmond Swayne Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

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

Last month, my right hon. Friend the Chancellor of the Exchequer set out a Budget to deliver on the priorities of the Prime Minister and his Government, in the context of an improving economic picture. Inflation has more than halved, down from its peak of 11.1% to 3.2%. Real wages have increased for the ninth month in a row and are now growing at an average annual real rate of 1.9%. The Finance (No. 2) Bill builds on these improvements by seeking to reward work, boosting the housing market, improving the tax system and strengthening the economy. This follows on from our national insurance cuts that, when combined with the autumn reductions, mean 27 million employees will get an average tax cut of £900 a year and 2 million self-employed people will get a tax cut averaging £700 a year, all made possible because we have a plan for growth and for better and more efficient public services. The Bill covers 24 different measures in total and I will outline its most substantive powers.

[Sir Desmond Swayne (New Forest West) (Con)]

Will the Minister consider a further measure to right a historic injustice? In Committee, will he entertain an amendment to allow those caught up in the loan charge access to a tribunal?

[Nigel Huddleston]

I thank my right hon. Friend for his comments. We have had a discussion about the loan charge previously. I do not believe an amendment would be in order on this Bill, but I say to my right hon. Friend and others that I am always open to hearing concerns about the loan charge. I have done previously and will happily continue to hear information, evidence and concerns from colleagues.

UK Economy

Desmond Swayne Excerpts

Monday 19th February 2024 Commons Chamber

[Sir Desmond Swayne (New Forest West) (Con)]

What distinguishes this recession is the 800 jobs that have been created every day since this Government came to power in 2010—the very antithesis of anything ever achieved by a Labour Government, who have always left unemployment higher than they found it—is it not?

[Bim Afolami]

It is—and I would add something else: the figures for home repossession were much higher when there was a recession under the Labour Government in 2008-09, in comparison with our record now, and unemployment now is much lower than it was then. Though we are in challenging times, the economy is turning a corner. Our record compares very favourably Labour’s.

Oral Answers to Questions

Desmond Swayne Excerpts

Tuesday 6th February 2024 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Eighty-five per cent of the funds recovered from the loan charge so far—about £3.9 billion in total—have come from the employees, therefore those who were running those schemes, so the hon. Lady is mischaracterising where we have gone so far. There has been one criminal conviction so far; others are in place. I repeat what I said to the Opposition spokesman, the hon. Member for Ealing North (James Murray), earlier: if they were that concerned about ensuring we go after the wrongdoers, they would have voted with us last night in the Finance Bill.

[Sir Desmond Swayne (New Forest West) (Con)]

T9.   At the meeting this evening, will the Financial Secretary review the injustice that prevents loan charge victims who have engaged with His Majesty’s Revenue and Customs, but who cannot agree with their assessment, having any access to a tribunal?

[Nigel Huddleston]

I know my right hon. Friend has been campaigning on the issue. I respect and appreciate the information he has provided, and his contributions to the debate. I assure him that I am in listening mode and looking forward to the meeting this evening, because I want to ensure that I hold HMRC to account to make sure everyone involved is treated fairly and respectfully.

Loan Charge

Desmond Swayne Excerpts

Thursday 18th January 2024 Commons Chamber

[Sir Desmond Swayne (New Forest West) (Con)]

If, as Ministers insist, the law was clear in 2010, it would have been entirely unnecessary to have the 2017 legislation open up previous tax years, because my constituents who have been affected by this mis-selling scandal—for that is what it is—made their tax arrangements entirely clear in those years and were unchallenged by HMRC within the proper windows available. It was entirely unnecessary, and the reality is that the vendetta that HMRC is now pursuing, notwithstanding the obfuscation of the written answers to parliamentary questions, is exclusively against the victims of that mis-selling scandal.

Happy are those Members of this Parliament who were not here in 2017 and did not vote in favour of the Finance (No. 2) Bill of 2017, which contained the measure that is now torturing so many of our constituents. We are culpable for not having spotted, not having asked about and not having examined the consequences and implications of the measure that was brought before us. It is a measure that cries foul against every tenet of proper legislation with, first, its retrospective aspect, and secondly, its taking away from our constituents the right to appeal to a tribunal with an administrative or quasi-judicial process to have their case fairly considered. It made HMRC both judge and jury in their case—and what a judge and jury it turned out to be!

We now come to another of these debates in which we recount the latest injustices and enumerate the rising tally of suicides, and the Minister will in all probability make the same speech as his predecessor made the last time. I ask hon. Members: what is the point? The point, as I see it, is that it affords a recurring opportunity for hon. Members to recant what the House did when it created this injustice. Drip by drip and Member by Member, the tally will increase, and ultimately it will reach the public consciousness.

The right hon. Member for Kingston and Surbiton (Ed Davey) served on the all-party group, and we are indebted to him for his chairmanship when he was in the chair of the group. He has been hounded over the last few weeks and found himself in a very unfortunate position for being the postal affairs Minister at the height of the Horizon scandal, notwithstanding the fact that he was lied to on an industrial scale. Nevertheless, it has been very uncomfortable for him to have the charge that he did not ask the right questions, he did not pursue it enough and he did not spend time with the victims. Let that be an object lesson to us and to all those Ministers who stood at the Dispatch Box giving us flannel and peddling the fiction that the limited inquiry was in some way independent.

My advice to my hon. Friend the Minister today is this: set aside the brief that you have been given, and end this debate by just saying that you have sat here, you have heard what we have said and you are going to go away and ask the awkward questions and spend time with the victims. Because ultimately this will reach the public consciousness—we may even have our own TV drama; the reality is that there is plenty of scope for such a drama—and when it does reach the forefront of public consciousness, we will rue the day that we did not take the action when we could.

Financial Services Reforms

Desmond Swayne Excerpts

Tuesday 11th July 2023 Commons Chamber

[Andrew Griffith]

Yes.

[Sir Desmond Swayne (New Forest West) (Con)]

This is an excellent package, but one way to ensure that investment flows to productive enterprise is to prevent it from being crowded out by growing Government debt, isn’t it?

[Andrew Griffith]

Our objectives are threefold in that respect: to bear down on inflation; to reduce Government debt, with the benefits that my right hon. Friend seeks; and to grow the economy. These are long-term plans and ambitious programmes, and ultimately, the acid test will be how we can grow our economy.

Mortgage Charter

Desmond Swayne Excerpts

Monday 26th June 2023 Commons Chamber

[Jeremy Hunt]

I often do not agree with what the right hon. Gentleman says, but I thank him for the constructive tone of his comments this afternoon, because he is absolutely right to talk about external shocks. He will know, as we do, that interest rates have gone up by similar amounts in the United States, Canada, Australia and New Zealand and that core inflation is higher in 14 EU countries. We need to look at all the tools at our disposal. Whether the Bank of England Governor issues forward guidance is a matter for the Governor, but I am sure he will have heard the right hon. Gentleman’s comments. It is important, because we respect and support the independence of the Bank of England, that I allow the Governor to make those judgments. I disagree with the right hon. Gentleman’s suggestion of reviewing the target for inflation. That target is the right target, and it is important that we give everyone confidence of our total commitment to hitting that target, which we will.

[Sir Desmond Swayne (New Forest West) (Con)]

Given the significant tightening in the measures of monetary growth, is the Chancellor absolutely sure that the Bank of England has got it right?

[Jeremy Hunt]

The Bank of England Governor himself has been very open about the fact that the Bank’s inflation forecasting has not been accurate, and it is conducting an independent review to see how it can do that better. It is clear that there have been some issues with how that process has worked, but what I would say to my right hon. Friend—