Economic Update

Ed Davey Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

Yes and yes.

[Ed Davey (Kingston and Surbiton) (LD)]

People are already suffering from the damage caused by this Government’s economic mistakes. Hundreds of pounds have now been added to mortgage bills, pushing millions of families to the brink, on top of higher food prices, higher fuel costs and higher energy bills. Despite that, the Chancellor refuses to undo one of the Government’s biggest injustices: their failure to impose a proper windfall tax on the record profits of the oil and gas companies, earned only because Putin is killing innocent Ukrainians. After so many U-turns, surely the Chancellor can persuade the Prime Minister to do one more. Will he introduce a proper windfall tax and help struggling families?

[Jeremy Hunt]

Let me tell the right hon. Gentleman that I am not against the principle of taxing profits that are genuine windfalls, but as he will know well, the energy industry is very cyclical and there are businesses that have periods of feast and famine. We have to be very careful that we do not tax companies in a way that drives away investment. We have said that nothing is off the table.

National Insurance Contributions Increase

Ed Davey Excerpts

Tuesday 8th March 2022 Commons Chamber

[Ed Davey (Kingston and Surbiton) (LD)]

On a point of order, Mr Speaker. Hearing the words of President Zelensky should embolden us all. They serve as a reminder of all that we stand for and of all that so many Ukrainians are so bravely fighting for—a bravery exemplified by President Zelensky himself. We should never take for granted our values of democracy, of freedom and of our security. Though we in this House may disagree on many things, we stand together for those values, and we stand together with the Ukrainian people.

It is right that we strengthen our support for Ukraine with military aid and with the toughest of sanctions. It is in that support that we should also recognise the people of Ukraine and, indeed, President Zelensky. I am sure the whole House would agree that President Zelensky should be granted one of our nation’s highest honours—an honorary knighthood. I look forward to the day when we welcome back to this House President Zelensky in person.

Downing Street Parties: Police Investigation

Ed Davey Excerpts

Tuesday 25th January 2022 Commons Chamber

[Michael Ellis]

My hon. Friend makes a powerful point about the pressing international situation, particularly as regards Ukraine and Russia. I know that the Prime Minister is focused on that matter.

I also understand the anxiety and indignation of many who are frustrated by the reports that have been emanating over the course of many weeks about alleged gatherings in the Downing Street area. The reality of the matter is that the Prime Minister is focused, as he has been focused, on delivering for this country as he has succeeded in delivering vaccines and on the manifesto commitments. He will continue that laser focus.

[Ed Davey (Kingston and Surbiton) (LD)]

It is clear that the Government are now in total meltdown. We have story after story about covid laws being broken in No. 10, revelations about hon. Members having constituency funding threatened by Government Whips, and now a Prime Minister and his staff under police investigation. In the midst of a pandemic and a cost of living crisis and with Europe on the brink of war in Ukraine, we cannot go on with this chaotic Government. Does the Minister accept that the Prime Minister’s authority is in tatters? Will he advise his boss to do the right thing in the national interest and resign?

[Michael Ellis]

I thank the right hon. Gentleman for his advice on propriety, but he will forgive me if I decline to follow it.

Downing Street Garden Event

Ed Davey Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

I thank my right hon. Friend for her question. In fact, she is agreeing with the Leader of the Opposition, I think, because it was he who said:

“Let’s let the inquiry play out, let’s see what the findings are”.

Her point is a good one: we should wait to see the results of the investigation, rather than prejudging it.

[Ed Davey (Kingston and Surbiton) (LD)]

Will the Minister set out what he thinks should happen if a Conservative MP is found to have flouted and broken a covid law?

[Michael Ellis]

It is not for me to pass judgment or pass sentence. The natural order of justice, as I am sure the right hon. Gentleman knows, is that a fair and impartial investigation takes place before there is a judge, jury and executioner. That investigation needs to take its natural course in an orderly way, rather than guilt or innocence being judged beforehand.

Budget Resolutions

Ed Davey Excerpts

Wednesday 27th October 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to follow the right hon. Member for Newark (Robert Jenrick), although I cannot express the same pleasure about much of what the House has heard today. We face a looming cost of living crisis, with food prices and energy bills soaring. The Chancellor had a chance to lessen the pain for hard-working families who pay their tax, play by the rules and need his support. Instead, he is hammering them with tax hikes, empty words and broken promises from a Government who are completely out of touch with the people of this country. There is nothing to help families with their energy bills this winter.

The Chancellor says that this Budget is all about optimism, but it is hard to be optimistic when it is our children who will pay the price with their income, their life chances and their planet. Today he could have chosen to invest in their future; instead, he chose to anchor them to the pandemic and the past. Our children, their education already damaged and their futures undermined, are left without sufficient funding for the catch-up classes that they desperately need. Unless the Government provide that funding in full, children who are at school now will face up to £46,000 in lost earnings over their lifetimes. If the Government are serious about investing in our future, surely they should start with those children. Instead, the Chancellor has spent more today on cutting the price of prosecco than on saving our children’s future. That tells us everything we need to know about this Government’s priorities.

The £5 billion of catch-up funding is a third of what the Government’s own adviser said is needed, and it is just a fraction of the £450 billion hit our economy could see from the learning our children have lost to covid.

[Ed Davey (Kingston and Surbiton) (LD)]

My hon. Friend is making a powerful speech on behalf of children, parents and teachers across our country. Is she aware that, in the fine detail of the Budget, banks are getting a tax cut that is bigger than the increase announced today for catch-up funding? Does she agree that is the wrong priority?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. If people are going to intervene, they should at least have the good grace to come in a few speakers before.

The Economy

Ed Davey Excerpts

Wednesday 8th July 2020 Commons Chamber

[John Redwood (Wokingham) (Con)]

I have declared my business interests in the Register.

We need a job-rich recovery. I therefore strongly welcome the measures that the Chancellor has announced today. Some of those measures will save jobs. Some of those measures will create or stimulate new jobs. The Government are right to worry that we have lost too many jobs already over the closures and they are right to worry that we might lose more in the days ahead. They are right to make the changes they are making to the furlough scheme, to encourage as many of those jobs as possible to return, and they are also right to say that we cannot carry on with a furlough scheme indefinitely; there has to be a test of whether there is still a job there. If we roll it on for too long, there will be no real job left, and it becomes just a different kind of benefit, delaying the time when that person can retrain or find a better prospect for their work.

What do we need to extend this jobs recovery? First, we need plenty of money and credit around, so that it is available for the business to pick up and the incomes to rise. The new Governor is a welcome breath of fresh air. As I have mentioned before, the previous Governor went in for extreme austerity, which slowed the economy needlessly. The new Governor has corrected for that and made a very big boost at the beginning of this crisis, which has been extremely helpful. I see no need for the Bank to go to negative interest rates. I do not think the Swedish experiment with them was particularly helpful, and the Swiss experiment is specific to the pressure on the Swiss franc, which we do not have on the pound. I do not think we need to go to negative interest rates, but I would say that the Bank is in danger now of going rather slowly on the quantitative easing and loosening. We see that in some of the figures coming out.

If we compare our figures with those of the United States of America and the Fed, we see that the Fed is doing twice as much or more than the Bank of England, proportionate to the size of the economy. Some might think that perhaps the Fed is doing a little bit too much and the US might end up with some inflation, but we are in danger of not doing enough again, and I hope that progress will be made in getting the right adjustments.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Does the right hon. Gentleman agree that while it is right that the Bank of England is doing quantitative easing, how that money is spent ought to have more democratic input? That money could be used for the sorts of investment we need now for jobs and tackling climate change.

[John Redwood]

The money is used to maintain the price of Government bonds so that the Government can borrow on very low interest rates as much money as they want. Investments are therefore determined by this House and the Government, so I cannot quite understand what point the right hon. Gentleman is making.

The Government are right to borrow a lot of money for six months or so, to get us through the crisis and to speed the recovery, but it has to be a one-off. We cannot live like that. One needs to earn a living, but this is a one-off crisis. The markets are such and the Bank of England’s intervention is such that the Government can borrow a lot of money very cheaply and quite long term. That is the best we can do, and it is the right thing to do to try to save jobs and create new jobs.

This week, we have had the summer forecasts from the European Union for the economies of the European Union, and it has still done a UK forecast. It is worrying, because the forecasts say that the French, Italian and Spanish economies will lose more than 11% of their economic output and income this year. They say Britain will be in high single figures—a bit better than those three—although not as good as Germany, which has come through it the best so far. However, the figures are not acceptable, and most people feel that the United States figures will be considerably better, because the US response to this crisis has been on a far bigger scale, both fiscally and in terms of monetary policy, than the European response. The UK needs to be closer to the American example in this case, because this very severe hit to major economies requires something very big to try to carry them through and rescue those jobs.

I hope that the Government will look at the opportunities for sourcing more in the United Kingdom through its purchasing programmes as we leave the European Union. I am all in favour of strong competition, value for money and good pricing, but I think we have had examples of our not having enough national resilience. We found that we could not buy the things abroad that we needed for our health service, because we were relying on others’ goodwill and they needed it for themselves. We are finding that buying things from China comes with all kinds of difficulties. We will find, if we go down the route of importing more and more electricity, that we have strategic weakness in depending on Russian gas, which is the main source of continental energy. I urge the Government to use their purchasing intelligently to give us resilience and more British jobs. Value for money and competition are good, but let us make sure that the purchasing goes to home purposes, just as they do in other countries abroad, where they look after themselves first.

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[Sir Edward Davey (Kingston and Surbiton) (LD)]

I give almost two cheers for the short-term measures announced today, but less than one for the medium and long-term measures. The Chancellor will have to produce a much more coherent economic strategy if we are to deal with unemployment in the medium term and with inequality and climate change, which are still massive challenges for our country.

In the short term, the job retention bonus looks good, particularly on the back of the furlough scheme. The VAT cut for the hospitality and leisure sector is also good, but there was nothing for the self-employed; they have been left behind—they have been excluded—and that is just not good enough. The kick-start programme for young people looks good, but why only six months of training? If we are really going to help young people come back and retrain, we have to give them far more than that. And I do not think that the stamp duty measure is going to be a huge boost to people. For a start, the housing market is already picking up now that people are able to buy again, as demand was already there. Secondly, this tax cut will get capitalised in the price; house prices will just go up, not serving anyone, and that will mainly go to the better-off. I would rather have seen help for renters, help for homeless people, and building homes—that is the way to tackle the housing problem in our country.

When it comes to the medium-term, this package is just not up to the moment. We have a serious economic crisis, the like we have never seen, and it comes on the back of the threats that will be posed to parts of our economy from Brexit. We also have the climate change challenge and the global issues caused by the tensions in trade between China and the US. All these things will dampen the global economy and our economy, and I just do not think that the package we have heard today really amounts to anywhere near enough if we are serious about protecting jobs and getting that green transition.

It is difficult to look at the figures and do a proper analysis, given that there is so little data in this plan for jobs, but it looks like this may be the smallest fiscal stimulus in the whole of the G7. So to put this into context, this is not the massive boost that people are saying.

If we really want a fiscal stimulus, we should be talking about the longer term and about the new industries. I was very proud when I was Secretary of State for Energy and Climate Change that we really boosted renewables. We nearly quadrupled renewable power. We became the world leader in offshore wind. We saw jobs created in declining economies such as those in Hull, Grimsby and Lowestoft, thanks to the policies we put in place on the basis of green jobs. Where is that ambition here? I do not see it. There is nothing on hydrogen, as has been said, and no real push for renewables, no real push to make sure that we bring in investment in nature and environmental improvements as part of the climate change challenge, and very little more on green transport.

I say to the Ministers on the Treasury Bench that what we wanted above all, for short-term jobs and long-term benefits for the climate and the economy, was a home insulation package that was much bolder. There is a former Prime Minister who used to say, “Education, education, education,” and I say, “Insulation, insulation, insulation.” I want jobs in every village, town and city across our country. That will be the way to really make sure we do not have a blight on our economy and a blight on young people, and really get a grip.

[Caroline Lucas]

The right hon. Gentleman is making a powerful case. As well as insulation, does he agree that we need to make sure we have zero-carbon homes going forward? Some 2 million homes have been built since the Climate Change Act 2008 came into being that now need to be retrofitted. Does he agree that the Government must bring forward the future homes standard, and that they were wrong to scrap the zero-carbon homes standard?

[Sir Edward Davey]

The hon. Lady, whom I call my hon. Friend, is absolutely right. I was part of the team that brought in the zero-carbon homes regulation, and two months after we left office the Conservative party got rid of it. It was an outrageous act of climate change vandalism, and nothing has happened on that, so the hon. Lady is absolutely right.

The idea that the Conservatives have a good record on climate change is for the birds. All the advantages actually came from things that the Labour Government did before 2010 and things that the Liberal Democrats did when we were in charge of the Department of Energy and Climate Change, and they tried to undo almost everything when they had the chance. I saw them trying to undo all the great things—not just zero-carbon homes, but they cancelled the carbon capture and storage plans, which they are now trying to put back with the timidity of a mouse. They do not understand how big the challenge is. This is an historic challenge; we have to move our economy from a fossil-fuel based economy to a net zero carbon economy, and we cannot wait for 2050. We now have an opportunity to retrain our young people, and our whole workforce, so that we can deliver this, creating a green industrial base and a regional strategy that brings everybody up. However, I fear that this Prime Minister, this Chancellor and this Government are just not up to the job.

Economic Update

Ed Davey Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

I am grateful for my hon. Friend’s support and am happy to talk to him about the matter that he raised. I agree with him that there must be a green recovery—something he has championed for a long time—and it will be a green recovery.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I thank the Chancellor for the positive measures that he has announced, but why was there absolutely nothing serious for the self-employed? With unemployment rocketing—perhaps up to 3 million—and the climate emergency already hitting us, why is the Chancellor’s ambition for a green recovery so small? Surely we need far more green jobs, now and in future. Why is he not being as radical as European countries such as Germany and France, with a massive green fiscal stimulus for the technologies and industries of the future? Surely even his own home insulation plan should be three times as big and last five years to get real investment in our homes, to decarbonise, and to get the green jobs for our young people and for every community throughout our country.

[Rishi Sunak]

The right hon. Gentleman asked about the self-employed; he will know that our self-employment scheme is without doubt one of the most comprehensive and generous—if not the most comprehensive and generous —anywhere in the world. That is considerable support that has already been provided. Also, 40% of those in the construction sector are self-employed. Many of the people installing the new energy-efficiency measures will be in that category and will benefit from that increased demand for their services—something that I am delighted will happen. Lastly, the right hon. Gentleman talks about Germany, as do other Members; it is important to remember that Germany’s plan for this €50 billion is one with unspecified dates stretching over five years. In March, we unveiled a £640 billion investment plan for the next five years.

Finance Bill

Ed Davey Excerpts

Report stage & Report stage: House of Commons & Report: 1st sitting & Report: 1st sitting: House of Commons
Wednesday 1st July 2020 Commons Chamber

[Bridget Phillipson]

The right hon. Gentleman is absolutely right, and I sincerely hope that the Minister will respond to that point, because we have seen this unfairness built into our system. We recognise that this measure takes some steps towards levelling the playing field, but we need to see much more from Government in clamping down on the kind of tax avoidance that we have seen far too often in recent years, because it is not right.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

Can I say how much I support the argument the hon. Lady is making? Does she agree with me that the Government’s digital services tax measure is actually a mouse of a measure compared with the huge profits made by American big tech? Does she also agree with me that the Government need to co-operate very closely with the European Union, which is devising an international tax with much greater teeth, so that these big tech companies do pay their fair share of tax?

[Bridget Phillipson]

Yes, I support the point the right hon. Gentleman makes, and I will come on to say more in my contribution both about how those companies need to contribute more and how it is essential that we see international consensus on this issue. The measure the Government have put forward today is necessarily time-limited, and we will need to see a much more sustainable, long-term solution with a broader international base.

It is not right that British bookstores and other businesses face a higher tax rate than Amazon. Unfortunately, this measure does not go far enough to address this fundamental unfairness, nor does it really get to the heart of the tax avoidance strategies some of these tech companies have used in recent years. As the Chartered Institute of Taxation points out, this measure is not aimed at stopping profits arising in the UK being shifted by multinationals out of the UK to tax havens. However, for far too long the companies that make the modern economy work have got away with complex ways of moving and hiding the money we pay them.

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[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I draw the House’s attention to interests, which are set out clearly in the Register of Members’ Financial Interests.

I rise to speak to new clause 33, which was tabled by the right hon. Member for Barking (Dame Margaret Hodge) who, alas, for the reasons set out by the hon. Member for Houghton and Sunderland South (Bridget Phillipson) from the Opposition Front Bench, cannot be here today. The House may rest assured that she will be watching every word of this debate from where she is.

The House will notice that not one but three former and current Chairs of the Public Accounts Committee—the hon. Member for Hackney South and Shoreditch (Meg Hillier) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), as well as the right hon. Member for Barking—have signed the new clause. In addition, my hon. Friend the Member for Amber Valley (Nigel Mills), who is unavoidably locked down with his two adorable new children and who has great expertise in this policy area, has also signed it

New clause 33 makes a number of points. The first is that any company that is subject to the new digital services tax, which came into force this April, must publish transparently and publicly a country-by-country report. Although as it stands in the amendment paper the new clause does not include a starting date, that was rectified this morning and the starting date would be April 2021.

The new clause is targeted at international technology giants—that is Google, Facebook and Amazon. These huge businesses are well known for using corporate structures deliberately designed to shield them from the payment of tax. The new clause would allow Parliament, journalists, campaigners and civil society to see clearly whether these businesses are paying their fair share of taxation. If the Government accept the new clause, that would, as the hon. Member for Houghton and Sunderland South suggested, make the UK a world leader in financial transparency. It would give a major boost to country-by-country reporting for all corporations, so that everyone can see that tax is paid on profits in the locations where those profits are earned.

Let me be clear at the outset that it is not our intention to divide the House on the new clause today—subject to the Minister, who is a very clever fellow, showing due respect for advancing this agenda and for the importance of making progress on this issue in due course.

In my submission, there are three reasons why the new clause really matters. The first is that its logic sits four-square behind the priorities of the Conservative-led coalition—I thought the hon. Member for Houghton and Sunderland South could perhaps have given a little more attention and, indeed, support in this respect—who wanted to inject greater transparency and openness into the financial system, in the first instance by championing open registers of beneficial ownership, which were introduced in the UK in 2016.

The open-registers process has been enhanced over the past two years, during which the right hon. Member for Barking and I persuaded the House that open registers should be embraced by the overseas territories and subsequently secured agreement that the Crown dependencies would also implement them. Such progress is a huge advance in tackling money laundering and financial corruption, and it bears down heavily on tax evasion as well. It also makes it more difficult for bent politicians and corrupt businesspeople to steal money from poor countries and their citizens. The new clause builds on that whole approach.

Secondly, at this dreadful time in our country, when our constituents are suffering financially so severely and our Government are rightly seeking to help every family as we combat the economic effects of this crisis, it is frankly obscene and very offensive that some major corporations who rely on UK customers and make huge profits in our country should not pay their fair share of tax. The public and the public finances cry out for fairness and equity, particularly at a time like this, when some companies have benefited from taxpayer-funded rescue packages organised by the Government while not contributing equitably to the public purse. Public expenditure is now at an all-time high. This borrowing will have to be paid for and it is simply not right or fair that while most taxpayers will have to pay more tax—85% of us pay taxation through PAYE—some multinational companies deliberately create financial structures to avoid paying tax.

I also point out to right hon. and hon. Members that those same multinationals are undermining British business by undercutting them on price. They can do that because they do not pay tax at anything like the same rate. In Sutton Coldfield, we are struggling to make a success of our town centre and high street, to renew it and reinvigorate it, but Amazon undercuts bookshops in our high streets and stores such as John Lewis in our shopping centres because it can avoid paying its fair share of tax.

Thirdly—this is of particular importance to developing countries—credible research shows that developing countries lose three times as much each year from tax avoidance as they gain from development aid. The OECD has been pressing for international reform in tax rules for decades. Those countries with the most to lose have been most resistance, so the OECD compromise was that information should be provided confidentially to the tax authorities. While that is progress of a sort, it does not really help developing countries, for obvious reasons to do with cost and with complexity. Clearly, it would be better, as with open registers, for all the data simply to be placed in the public domain so that there is a level playing field and public accountability for the tax conduct of multinational enterprises worldwide.

[Sir Edward Davey]

The right hon. Gentleman may remember that during the coalition Government, we put measures through, agreed at European level, for a directive on transparency on payments made by the extractive industries across the developing world because of concerns about corruption with respect to mining in particular. That created greater transparency. The same approach could be taken on the tax issues that he is raising.

[Mr Mitchell]

Yes, the extractive industry transparency initiative, which has been led by a former Member of this House, Clare Short, for some time, did a huge amount of good as, of course, have open registers, because open registers have continued that agenda of transparency. As I said at the outset, this agenda was championed and driven forward internationally through the British at the G8.

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[Dr Huq]

The hon. Gentleman is on the all-party parliamentary group and I know that he secretly agrees. Perhaps he is not saying so because his Whips are listening. The EU is our biggest trading partner. For many years before I came here, I used to teach and would sometimes say, “Could do better.” Yes, we support the measure, but we could do better, and this is a glaring example of an issue that is in need of urgent rectification.

The covid-19 crisis necessitating Government help for industry has, I hope, reversed the trend towards laissez-faire economics. It has been remarked by many people that we are missing a trick. We could bring some of these unscrupulous companies—we can call them companies with clever accountants, if Members prefer—to heel. It seems wrong that the Bank of England has made £1 billion of loans available to the German chemicals giant BASF, which has transferred profits to Malta, the Netherlands and Switzerland in order to avoid tax. There are countless other examples, but because these things are shrouded in secrecy, that is the example I am able to give. The easiest way to do it is by enacting what is already agreed, and we do that via the digital services tax, which the hon. Member for Thirsk and Malton (Kevin Hollinrake) hails. These companies could be given time to make adjustments, and the very fact of transparency, rather than overly punitive measures at the start, could shame them into action and make them see sense.

We face a double whammy of the covid financial crisis and uncertainty outside the EU. The Chancellor said, “Whatever it takes”. Those headquartered in the UK already submit all this information to HMRC and to other relevant tax authorities. All we are asking is that we can all see it and that there is full and frank disclosure—including for investors and other stakeholders, who increasingly want to know these things—and then we can see where each company has its economic bulk or footprint. Making public what already exists would be low cost and straightforward. I see no downsides to this. The only people who oppose the proposal are those who usually abuse the rules. I understand that the tax havens of Jersey and Luxembourg are not too keen on it.

We keep being told that, post-virus, things cannot go on as before and, “We shouldn’t waste a good crisis, should we?” Ensuring that very large companies publicly reveal revenue and tax information could be something on which we lead the world, and we can still apply pressure on the OECD and G20—the two are not mutually exclusive. We cannot wait forever for action from the EU, because we are no longer a member of that organisation. Time and again, we were told by the leavers that we could be an independent nation and we were reminded of the sovereignty of Parliament. This proposal has wide cross-party support.

[Sir Edward Davey]

Does the hon. Lady not think it would be right for the Minister to say from the Dispatch Box that the UK Government will work closely with the European Union as it develops its digital services tax, and should not the Opposition parties be calling on the Government to make it very clear that European co-operation on this issue is vital?

[Dr Huq]

Yes, I think we should be working closely with the EU, but we can even beat them to it. Already on the EU Council there are countries such as France—which was called “cheese-eating surrender monkeys” on “The Simpsons”—that have agreed to it. This could be a bit of a trick for our Government if they pipped them to the post—I think we abstained when it last came up in the European Council. Yes, I completely agree that we should be in harmony with those countries, but this is an opportunity to beat them. By the way, not that I endorse “The Simpsons”, obviously—I do not want to cause a scandal—but, for those who are insistent, this presents opportunities. We have now left, after all.

The measure has cross-party support, and Oxfam, Christian Aid, CAFOD, the Churches and a list of development charities as long as your arm are all for it. They are spurred on by the fact that, as has been said, developing countries lose three times as much as they gain from development aid due to tax avoidance.

Regaining the respect of the aid sector, after the cruel surprise of the DFID merger was sprung on it the other day; delivering progressive taxation to ensure that corporations pay their fair share; rebalancing towards ordinary people; levelling up, so that our high street traders are not undercut by online giants with lax morals; levelling the playing field with multinationals, which is good for British business; bringing in billions and leading the way to be genuinely world-beating, which sadly the track and trace app was not; and beating the EU to it, when we have got Brexit done, and reinforcing the role of our sovereign Parliament—what is not to like?

The Nobel prize-winning economist Professor Joseph Stiglitz has remarked:

“It is time for countries to take both unilateral and multilateral actions to tax multinationals.”

Let the UK not drag its feet any more, but be a leader. It was David Cameron who said that sunlight was “the best disinfectant”, and the Conservative West Midlands Metro Mayor said when he was managing director of John Lewis:

“If you think of two companies making the same profit, one of them pays corporation tax at the UK rate, one does not because it claims to be headquartered somewhere else—that is not fair.”

Anyway, that is enough Conservative quotes in a Rupa speech—this is quite unusual for me. The Government should now set a date.

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[Jesse Norman]

I am afraid I just do not have any time. I will come back to the hon. Gentleman at the end if I do.

I want to respond to the hon. Member for Hornsey and Wood Green (Catherine West), who rightly highlighted the importance of local authorities for cycling, walking and tree planting. I agree with her about that. She asked about the replacement strategy for the emissions trading system. I think she is aware that we have framed two alternatives. The first is a UK ETS, and the second is a carbon emissions tax. We are open to a negotiated agreement, but we have the resources, through either of those options, to implement a scheme that addresses the issues that she is concerned about.

Finally, the hon. Member for Cardiff North (Anna McMorrin) called for leadership not rhetoric. I wonder whether she was referring to the Welsh Government, whose tree planting plans have been disastrous. They seem to be way behind, according to their own tree planting estimates.

The hon. Lady specifically picked out the Swansea Bay tidal lagoon. As my right hon. Friend the Member for South Northamptonshire said, that project would not provide value for money. It would be a terrible waste of public money. That money could be spent much better.

[Sir Edward Davey]

Absolute nonsense.

[Jesse Norman]

I spent a lot of time looking at it when I was a Minister at the Department for Business, Energy and Industrial Strategy, and the right hon. Gentleman, who is chuntering from a sedentary position, is quite wrong about that. It would provide terrible value for money.

It is also fascinating that the project is not an environmentally wise idea. The hon. Member for Cardiff North may not be aware that the Wildlife Trust of South and West Wales specifically highlighted the major impact on biodiversity, the loss of intertidal habitat and the impact on local ecology, and National Resources Wales talked of a “major adverse impact”. I agree with the hon. Lady that actions matter, not words, and that leadership matters, not rhetoric, and we are seeing that by turning down this very bad project.

The Government are committed to tackling climate change and to being the first generation to leave the environment in a better condition than we inherited it. These measures go towards making that happen.

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[Wes Streeting]

The Minister would be far more persuasive if the Government made any announcements about how they are investing more. In fact, what we got from the Prime Minister this week was a damp squib. I genuinely hoped and expected that the Prime Minister would announce major programmes. For example, retrofitting homes across the country would deliver environmental benefits and job creation, including jobs that would compensate those who will imminently find themselves out of work.

[Sir Edward Davey]

Will the hon. Gentleman give way?

[Wes Streeting]

I probably do not have time, I am afraid.

Those are the sorts of initiatives that we expect the Government to come forward with. I am disappointed by the lack of ambition, which only underpins why our new clause is so important, so I wish to press it to a Division.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Mr McFadden]

It is a pleasure to be facing my old sparring partner from the Treasury Committee of some years ago across the Dispatch Box. In this debate we will cover a number of amendments dealing with IR35 or off-payroll working, through to the loan charge and the impact of this Finance Bill on the crucial issue of jobs.

On IR35, we have always said that we need an approach that brings together the consideration of tax and employment law and that levels up protections for the self-employed, as well as dealing with the current implications of the tax system, which sometimes boosts bogus self-employment. The Chancellor has already hinted at changes to the tax regime for self-employed people as a consequence of the help given to them through the current crisis. Some contractors have raised concerns about being treated like an employee for tax purposes but not for employment rights purposes. Given the huge ongoing labour market difficulties caused by the current crisis, I would like to ask the Minister what consideration the Government have given to the timetable for their proposed changes and, in particular, what their attitude is to the amendments before us tonight calling for a delay in the roll-out of the IR35 changes to the private sector, so that we can get the balance between tax and employment rights correct.

Many Members have also received representations about changes to the loan charge. We have supported attempts to deal with tax avoidance, but also expressed concern for those advised into such arrangements, by either employers or the promoters of such schemes. We will continue to press the Government to review how the promoters of disguised remuneration schemes have been tackled—or not tackled, as the case may be—by HMRC and ensure that those who promote such schemes are held to account.

[Sir Edward Davey]

I agree with what the right hon. Gentleman has been saying. Would he support the option of the House having a vote tonight on new clause 31, which relates to the loan charge? There are many people watching our deliberations who hope that this House will express a view on the loan charge, and I am told that at the moment that is not likely to happen. Will he confirm from the Front Bench that the Labour party would like a Division on new clause 31?

[Mr McFadden]

The matter of what is voted on is of course, a consideration for the Speaker. I do not always get to decide what is voted on in this House.

New clause 26, standing in my name and those of my hon. Friends, focuses on the issue of jobs and does so for the very good reason that that is the principal economic challenge facing us right now. If there was any doubt about that, we need only look at the news over the past 24 hours—1,700 jobs lost at Airbus, up to 5,000 job losses announced by the owners of Upper Crust, 4,500 at easyJet a couple of days ago, another 4,500 at Swissport, and many more around the country that do not make the front page of the national news. These are not just numbers. Every one of them is a human story of a livelihood taken away and a family wondering how they will pay the bills and what the future will hold for them.

Across the country, the claimant count measure of unemployment is up by 1.5 million since the start of the year. In addition to those out of work and the estimated 9 million on furlough schemes, it is estimated that up to 8 million employees are working fewer hours than usual. These stark figures show us that we are facing the jobs challenge of a generation. It is decades since young people leaving school, college or university graduated into a labour market such as this.

Giving my age away, I remember, as a young teenager growing up in Glasgow, attending the people’s march for jobs. Unemployment back then was around 3 million. The vocabulary of it infused the times—“signing on”; “the Girocheque”. It even gave birth to the great band UB40, named after the unemployment card that people got for signing on. The damage caused by that mass unemployment affected not just the city where I grew up, but the Black Country that I now represent, and many similar communities across the country. Long-term social and economic pain was caused by far too many people facing a life on the dole, and we must never go back to those days. If we have learned anything from that experience of the 1980s, it is that the cost of not acting is greater than the cost of acting, and we must do everything we can now to prevent mass unemployment. That is the challenge facing us.

At the start of this crisis we called for wage support to help people through. The furlough scheme and the self-employed furlough scheme were the right and necessary things to do, but as lockdown is eased, and support from those schemes starts to be withdrawn from next month, we can see the danger facing the economy. The danger is that businesses that have been just about hanging on start to let people go, caught between having no income and facing rising employment costs. This is the moment that the Government need to act to preserve jobs, jobs, jobs.

--- Later in debate ---

[Mr McFadden]

There is no MP from the west midlands who does not care about our manufacturing base. It is a vital part of our economy. It may be true that we make less than we used to, but it is also true that we make more than we think, and we should never be dismissive of the activity and the creativity of making things in this country.

The Government announced their back-to-work plan yesterday, praying in aid President Roosevelt and the new deal. First, the Prime Minister wanted to compare himself to Churchill. Now it is Roosevelt. We have to wonder why he seems so uncomfortable with just being himself. Let us look at the comparison. F. D. R.’s new deal did indeed rescue the United States from the great depression. Millions of workers were hired, 255,000 miles of roads were built, as were 40,000 schools and almost 1,000 airports—major infrastructure projects that modernised the United States and stood the test of time, all at a cost of around 40% of pre-depression United States GDP. By contrast, what the Prime Minister announced yesterday was around 1% of the cost of the new deal—one cent on the dollar, if you will. He has taken the old political maxim, “Under-promise and over-deliver”, and turned it on its head.

I know that the Minister likes a good book. One of the shorter, but nevertheless hugely illuminating, studies of Roosevelt’s approach comes in Doris Kearns Goodwin’s book on leadership. In it, she sets out Roosevelt’s watchwords behind the new deal. I will leave the House to make its own judgment on the comparison between this and the Prime Minister. First, “Strike the right balance of realism and optimism”—not everything has to be claimed to be the biggest or the best in the world. After the events of recent months, systems that just worked would be an improvement. We then have, “Infuse a sense of shared purpose and direction”, “Lead by example”, “Forge a team aligned with action and change”, “Bring all stakeholders aboard”, “Set a deadline and drive full-bore to meet it”, “Address systemic problems. Launch lasting reforms”, “Be open to experiment”, “Adapt and be ready to change course where necessary”, and “Tell the story directly to the people”. That was Roosevelt’s approach, and I will leave it to others to judge whether the Prime Minister’s approach falls short not only in scale but also in spirit.

[Sir Edward Davey]

Like the right hon. Gentleman, I have read books about F. D. R. I have studied F. D. R. The Prime Minister is no F. D. R.

[Mr McFadden]

Quite.

Infrastructure expenditure is, of course, welcome, and we support it. It makes sense to do this when interest rates are historically low.

--- Later in debate ---

[Mr David Davis (Haltemprice and Howden) (Con)]

I rise to speak to the amendments and new clauses tabled in my name and the names of other Members of this House. They include new clause 31 and the consequential amendments relating to the loan charge legislation, and amendment 20 and the consequential amendments relating to the application of the so-called IR35 regulations, which deal with off-payroll taxation arrangements.

It is a pleasure to follow the right hon. Member for Wolverhampton South East (Mr McFadden). I am even older than him: I can remember discussions across the table in my household about the means test when I was too young to understand it.

When I first spoke in this House about the loan charge arrangements, I quoted the Chief Justice of the US Supreme Court who once said that the power to tax is the power to destroy. That description could be used of both the policies that I wish to talk about today. The loan charge destroys lives. To date, at least seven people have taken their own lives as a result of this unfair and retrospective policy—and I will use that word “retrospective” over and over again, even though HMRC fails to recognise it. For many ordinary, decent people, including locum nurses, teachers and contractors—ordinary folk, not big City bankers—who were misled by their employers in many cases, the loan charge has robbed them of their peace of mind, their self-respect and, in some cases, their lives. Some 39% of them have considered suicide, 49% could lose their homes and 71% could face bankruptcy.

New clause 31 would simply stop the Government pursuing any employees who were innocent parties who did not know that what they were doing was illegal and who believed they were acting correctly and in good faith. Yesterday, when I spoke on immigration, I had to deal with a briefing from the Government supposedly rebutting the lines in my proposed amendment, and I have the same again today. A disgraceful and frankly wrong briefing has been handed out by the Government describing what they thought we were saying. I will not go into details, but I hope that others will have time to do so. I will simply say that HMRC seems to have forgotten that in English law you are innocent until proven guilty. It is about time we followed that principle with respect to the loan charge.

[Sir Edward Davey]

As the right hon. Gentleman knows, I am the second name on new clause 31, and he will note from the amendment paper that 54 hon. and right hon. Members have signed it. That is more than any other amendment before the House today, and the only one that comes close to it is another amendment on the loan charge. Does he not think that that is a signal that the House wants to divide on new clause 31, and that whatever the Front Benchers think, the Back Benchers who have signed new clause 31 want a vote?

[Mr Davis]

The right hon. Gentleman makes a good point, but he should make it to the Speaker rather than me, as he well knows. He has been a Member nearly as long as I have.

--- Later in debate ---

[Mr David Davis]

If my hon. Friend thinks that this is the precedent, he should go back to the Finance Act 2008, which gives HMRC a 20-year assessment period in which it can assess whether the taxpayer participated in a transaction knowing that it was part of an arrangement attempting to bring about loss of tax. That is precisely what it says.

[Sir Edward Davey]

It is on the statute book.

[Mr Davis]

Yes, it is on the statute book. The precedent is there.

[Stephen Hammond]

The precedent that I am looking at is very clear that there seems to be an issue with the whole tax system.

[Sir Edward Davey]

The hon. Gentleman has heard from the right hon. Member for Haltemprice and Howden (Mr Davis) that the way that new clause 31 has been designed has used words already on the statute book, so he cannot make that argument. Moreover, the real precedent that he ought to be worrying about is the loan charge itself and its retrospective nature. I know he is concerned about that, so should he not therefore be voting for new clause 31, which is based on existing tax vocabulary, and opposing the real precedent, which is the appalling way that taxpayers have been treated?

[Stephen Hammond]

I have already made the point about retroactive behaviour and retrospectivity. I have said that there is much that the Government can do. I want the Minister to set out exactly how a person who has no assets, is on benefits or is on earnings less than the national average could get forgiveness. I have explained what I am concerned about. I hear what my right hon. Friend the Member for Haltemprice and Howden has said, and perhaps the Minister will want to address the point I am raising. I may be wrong, but it seems to me that this is quite a dangerous precedent to embark on.

Economic Outlook and Furlough Scheme Changes

Ed Davey Excerpts

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

I thank my hon. Friend for his question. I am in awe of his ability, without notes, to recall exactly the same wording of his question when asked to give it a second time. That is magnificent. He was obviously an actor in a previous life.

Let me respond to the point my hon. Friend made. He is absolutely right about apprenticeships. He will know that, because he will know of all the work we are doing in Hereford to set up a new model in technology and engineering; a university combining higher education and further education specifically in order, in due course, to be able to extend to degree and degree apprenticeships. He will also know that the Budget—people have forgotten this—and the spending round before it have been very supportive of further education. That is a commitment of this Government. As he will know, the Education and Skills Funding Agency published guidance in this area, and the job retention scheme provides funding for businesses. We will continue to look closely at the issue he describes, and I thank him for his question.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

May I, like others, pay tribute to and remember our much-missed colleague Jo Cox?

Ministers hint that their recovery plan will at last see real climate action. Liberal Democrats advocate a massive green economic recovery plan and I hope the Government will match it. Will the Treasury Minister confirm that the Government are considering reversing their previous opposition to onshore wind farms in England and Wales, tidal power investment, zero-carbon homes regulation and the many other green economic policies advocated by my party and opposed, abolished and voted against by this Prime Minister and the Conservative party?

[Jesse Norman]

I do not agree with that characterisation of the Government at all. We have done an enormous amount to support the green economy, but I do agree with the right hon. Gentleman that this provides an opportunity for a big recalibration—a big opportunity for all people across the country to think about whether there is more we can do in terms of green. Those of us with responsibility for the national infrastructure strategy are thinking very hard with colleagues in the Treasury about how we can improve green infrastructure, to go alongside all the measures we have taken to improve and support green businesses.

Finance Bill (Ways and Means)

Ed Davey Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 19th May 2020 Commons Chamber

[Sir Edward Davey (Kingston and Surbiton) (LD) [V]]

I am beginning to fear that this Government do not understand the self-employed. I fear that, yes, because of the IR35 proposals in front of us, but also because of the loan charge and the way that a large group of the self-employed have been kept out of the support programmes during the coronavirus crisis—I am talking about the people who are newly self-employed and the people whose self-employment operates through a limited company, all of whom have had no help. I am afraid that the evidence is mounting up. That is why there should be a review, not just of IR35, but of how self-employment is viewed—the way we tax it and the benefits that people get—so that we can get a proper balance, rather than the piecemeal approach that we have.

I am really struck by the Government’s approach, which is, as the right hon. Member for Haltemprice and Howden (Mr Davis) said, creating zero-rights employment —employees without employment rights. That is not acceptable and it is why there needs to be a review before this goes any further. I had expected a review because the former Chancellor of the Exchequer said so during the last general election campaign. On Paul Lewis’s “Money Box” programme on BBC Radio 4, he made it clear, and he tweeted afterwards that there would be a review of IR35, but there has not been a review. The Liberal Democrats argued for one in the election, as did others, but there has been no such review. That is a breach of a promise to people, which has made them very angry.

The Minister today is promising a review once the legislation is on the statute book. That is not a review—that is trying to make good once the stable door has closed. Any review must take place ahead of any legislation, if it is to be done in good faith. I am afraid that the way that the Government are treating the self-employed, breaking their promise at the election and now proposing to have a review after the legislation is in place is a breach of good faith to the 5 million self-employed people in our country. That is just not acceptable.

On the details of IR35 in front of us, the Treasury Minister talked about the fact that the measures were trialled in the public sector before the private sector. He seems to think that this can therefore be taken straight across, but that is not real life. The public sector, its HR and payroll look at risks such as tax liabilities in a very different way from the private sector, and I would have thought that he would know that. Therefore, I do not think we can draw the conclusions that he is trying to draw. I am afraid that the evidence, even ahead of this legislation as people were preparing it, expecting it to come in this April, shows that the private sector takes a very different approach. That is why lots of people have ended up going abroad and why the Treasury will lose money as a result of this proposal.

That is my final point. The Treasury Minister trots out the idea that there is a lot of tax avoidance and that this measure closes those loopholes. He should think again, because there are benefits that people are forgoing. I think that this will end up costing the taxpayer and the country, and it will mean that there is less money for our public services if the measure goes through. It is the wrong measure at the wrong time. The Government should withdraw it, review and proceed in a wholesale—not this piecemeal—way.