Economy Update

Edward Leigh Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

I know that my right hon. Friend the Secretary of State for Work and Pensions is constantly ensuring that those entitled to those benefits do get them, and I am sure she will keep everything under review.

[Sir Edward Leigh (Gainsborough) (Con)]

There is ample evidence that the big retailers, which dominate the nation’s forecourts, have not passed on the cut in fuel duty, and we know that from the Platts price. I urge the Chancellor to take action to put pressure on these companies, but given our experience in this matter, does that not rather underline the fact that we Conservatives understand that there are enormous difficulties in interfering in the marketplace and that the best way to help people is an overall reduction in the tax burden?

[Rishi Sunak]

While I broadly agree with my right hon. Friend that that is the best way to help people over time, in a particular circumstance such as this, and given the types of people we are trying to help, I believe that direct cash transfers are the right way, rather than going through the tax system. I have talked to my right hon. Friend the Energy Secretary about the issue that my right hon. Friend raises. He is right to raise it, and I know that the Energy Secretary is focused on ensuring that the fuel duty cut is passed on.

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 17th May 2022 Commons Chamber

[Rishi Sunak]

The hon. Lady says that we should be asking those with the broadest shoulders to pay, but that is exactly what we are doing. The NHS and social care levy means that those with the broadest shoulders, the top 15% of earners, will pay more than half the money raised from that levy. I think that she believes that that levy should be scrapped. It is an entirely progressive way to raise money to fund the tackling of NHS backlogs, for which there is, I know, huge support in this House. The Government are keen to get on and fix the pressing challenges of this country. We will fund those things in a responsible and progressive way, and that is exactly the plan that we have put in place.

[Sir Edward Leigh (Gainsborough) (Con)]

T8. I am not sure whether there is much point in indulging in a blame game against the Bank of England or the Treasury, given that we are facing the unprecedented attack of a global pandemic and war in Europe. The fact remains that conservative Governments who have increased taxation during recession—such as those led by the first George Bush or John Major—go down to defeat. More importantly, millions of families are now desperately worried about how they will pay their bills. Will the Chancellor now say that his absolute priority, coming up to the Budget, is to reduce the overall tax burden on working families?

[Rishi Sunak]

I can give my right hon. Friend that assurance. That is our priority. We started last autumn by cutting the tax rate for those on the lowest incomes and universal credit. We carried that on in the spring statement by delivering a tax cut for those on lower-middle incomes by raising the primary threshold, and our priority is to keep cutting taxes for those in work, including by cutting income tax, as soon as the public finances allow.

Financial Statement

Edward Leigh Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

Unemployment is at an almost record low level of 3.9% at the moment. The OBR’s forecasts overall are lower than its October forecasts and are still at very low levels of 4.2%-ish throughout the forecast period. We are very proud of this Government’s track record on jobs, with record numbers of people on payroll. Despite the forecasts of millions of people unemployed, we have managed to successfully get everyone back to work, with a record number of job vacancies, and we will continue to focus on that.

[Sir Edward Leigh (Gainsborough) (Con)]

With the world economy facing unparalleled challenges from at least two of the four horsemen of the apocalypse—death from plague and war—and with all the challenges that the Chancellor faces, I wonder whether anybody seriously believes, after a decade of unfunded spending promises, that tax would be any lower under a Labour Government. That is a question that I think the Labour party should answer.

May I ask a question on behalf of people of pensionable age? More and more of them are having to wait a long time—up to two years—for so-called minor operations, which can be very debilitating and very painful. More and more people on middle incomes are dipping into their savings or going into debt to pay for private operations. Will the Chancellor keep an open mind about helping those people with some sort of tax relief—if not on insurance, on the cost of operations that are delayed for up to two years?

[Rishi Sunak]

I am always happy to take suggestions from my right hon. Friend. He has identified a pressing problem faced by all our constituents who are waiting longer than we would like for elective treatment in particular. Every penny of our new health and care levy will go to the NHS and social care so we can make a start on that backlog. We are backing the NHS to help it to reduce its backlogs, and my right hon. Friend is right to raise this issue.

Downing Street Parties: Police Investigation

Edward Leigh Excerpts

Tuesday 25th January 2022 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

When Europe stands on the brink of war and there is a cost of living crisis, can we please have a sense of proportion over the Prime Minister’s being given a piece of cake in his own office by his own staff?

[Michael Ellis]

I completely agree.

Budget Resolutions

Edward Leigh Excerpts

Wednesday 27th October 2021 Commons Chamber

[Robert Jenrick]

Absolutely; I do not demur from that, but we have to find the right balance in our country between public expenditure and ensuring that the private sector can flourish. I worry that we have now reached the moment at which there is not much more that we can spend.

We have to ensure that we grow our way out of this challenge. That was illustrated in some of the Chancellor’s announcements today, including those on research and development relief, the continuation of the investment allowance, the support for skills and also the maths support, about which I would be interested to hear more detail. This is also about ensuring that we have sensible tax arrangements in this country that can incentivise investment and ensure that businesses can prosper. The overall tax burden is at its highest sustained level in peacetime, and I worry that we will not be able to go much further than that.

I want to make one last point briefly before closing, because I appreciate that—

[Sir Edward Leigh (Gainsborough) (Con)]

Will my right hon. Friend give way?

[Robert Jenrick]

I really should not, because—

[Sir Edward Leigh]

It is very pertinent to him.

[Robert Jenrick]

How can I refuse?

[Sir Edward Leigh]

I want to say a fantastic big thank you to my right hon. Friend personally, because it has just been announced this minute that Gainsborough is getting £10 million of levelling-up funds. I relentlessly lobbied him on this, and I have lobbied his successor, so a big thank you!

[Robert Jenrick]

I am grateful to my right hon. Friend for ending on such a positive note. I know Gainsborough well—it is my neighbouring constituency—and I am delighted for him and his constituents.

I shall close where I began, which is by saying that there was a huge amount in the Chancellor’s announcements to be applauded. I commend him and the Treasury team and wish them well. The focus now needs to be on growing the economy and making the UK the most competitive place it possibly can be, rather than seeing taxes rise and expenditure increase, risking the private sector not being able to flourish and build that optimistic vision that the Chancellor laid out.

Health and Social Care Levy Bill

Edward Leigh Excerpts

Committee stage & 3rd reading
Tuesday 14th September 2021 Commons Chamber

[Jesse Norman]

It is a great pleasure to be here today to explain the clauses in this Bill.

The Social Security Contributions and Benefits Act 1992 sets out the earnings and profits on which employees, employers and the self-employed are liable to pay national insurance contributions. Clause 1 of the Bill introduces a new tax, to be known as the health and social care levy, which will be charged on the same basis as national insurance contributions. The levy will be set at 1.25%, and will affect earnings from 6 April 2023 onwards. When individuals or employers are liable for a qualifying national insurance contribution, they will also be liable for the levy. The levy will be payable on the earnings and profits on which those contributions are payable. The qualifying national insurance contributions in question are primary class 1 NICs that employees pay on their earnings, secondary class 1 NICs that employers pay on the earnings of their employees, class 1A and class B NICs that employers pay on benefits in kind received by their employees, and class 4 NICs paid by the self-employed.

This new levy has been introduced to raise funds for health and social care, so it is only right that individuals of all ages who are able to pay should do so. Therefore, individuals over state pension age who would be liable for those contributions were they not exempt will be liable for this levy.

[Sir Edward Leigh (Gainsborough) (Con)]

If we are talking about an insurance system, can the Government explain why they have ruled out state-sponsored insurance? I can understand why they cannot rely entirely on private insurance—the risk is too great—but Dilnot originally came up with the idea that people could take out insurance when they retired which would be a charge on their house, and they would have to pay it back when they died on the basis of the value of their house. I am not asking the Government to accept these ideas now; I am simply asking whether they have an open mind and are prepared to look at them. This is a complicated matter, and we want to have a real insurance system.

[Jesse Norman]

In the collective sense, this is a state insurance system, because it is making long-term provision for catastrophic outcomes in people’s health and social care, but the point that my right hon. Friend has made is an acute one. He will be aware that both the King’s Fund and the House of Lords Economic Affairs Committee have looked at private insurance models and concluded that they have severe limitations that would not make them appropriate. Indeed, no country in the world has a purely private insurance model. It has certainly been contemplated by Professor Dilnot, and it is compatible with the thrust of this legislation, that there should then arise a private insurance market, now that some of these catastrophic risks have been removed from the calculus that individuals have to make about their own social care. I hope that that addresses my right hon. Friend’s point.

As I was saying, individuals over state pension age who would be liable for those contributions were they not exempt will be liable for this levy. That means that pensioners in work will now contribute 1.25% of their “NIC-able” earnings, or profit, to health and social care in the same way as working-age employees and self-employed individuals.

Clause 3 discusses in more detail how NICs legislation applies to the levy. However, clause 1 also ensures that when an employer benefits from a zero rate of secondary class 1 NICs, such as employers of people under 21, of apprentices who are under 25, of veterans or of employees in freeports, those earnings that are subject to the zero rate will not be liable for the levy. That will ensure that businesses continue to invest in young people developing strong skill sets, and in those who have served this country.

Health and Social Care Levy

Edward Leigh Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

For a low-tax Conservative, it is relatively easy to attack this measure—indeed, I could spend my entire five minutes doing so. I could quote the fates of previous conservative Governments, whether led by President George Bush in America or John Major here, who have put up taxes dramatically—John Major did so in a recession—and been punished at the polls. It is relatively easy to attack this measure but much more difficult to provide an alternative. The manifesto point need not be laboured. Labour produced a manifesto with all sorts of spending promises in 2005 and, arguably, they had more chance of foreseeing the global crash in the markets that followed during that Parliament than we ever had in foreseeing a pandemic. So I do not think the manifesto attack holds water.

I declare an interest, as it has always been a principle that once someone reaches pensionable age they get their state pension and do not go on paying national insurance contributions. Many people will feel aggrieved about the position on that; a constituent has written to me angrily saying, “I am 68. I stopped paying NICs at 65 and now you are asking me to pay them again.” That is a fair point, but this meets the challenge of, “Why should we subsidise pensioners at the same time as we are increasing NICs on the young?” Again, it is easy to attack but difficult to come up with an alternative.

The point about London and the south-east is an easy point of attack. Someone can buy a pleasant house in my constituency for less than £100,000 but that would not buy them a shoebox in London. Are we actually subsidising people who own million-pound houses in London? They can spend 30 years in a care home and can pay a very small proportion of that, because they can leave £900,000 to their children.

All these attacks can be made, but what is the alternative? That is what I ask the Labour party. They will not be a credible alternative Government unless they come up with a plan. I will happily give way to any Labour MP who says, “Right, I do not want to increase NICs. I shall increase income tax.”

[Wera Hobhouse (Bath) (LD)]

I am struggling to understand the argument made by those on the Government Benches. In 2016, £350 million per week was promised to the NHS once we left the European Union. We have left the EU, but what has happened to the £18 billion? Should the NHS not automatically expect that money, given that on 1 January we left the EU?

[Sir Edward Leigh]

It is very nice to be intervened on by somebody who has no chance of forming a Government.

I am afraid that all this talk of a wealth tax or a tax on dividends does not even begin to meet the problem. If we have a wealth tax, what happens in respect of two old-age pensioners who have almost no income and just have a capital asset? Is it fair—

[Jake Berry]

Does my right hon. Friend accept that this may be a fairer system if those in receipt of a pension but not working were asked to contribute to it in some way? Let us consider the position of people who are going to work in Tesco in Haslingden—it is in the constituency of my hon. Friend the Member for Hyndburn (Sara Britcliffe), but on the border with mine—and are struggling to buy school shoes for their kids or pay their mortgage. Why should they pay so that a relatively well-off pensioner does not have to?

[Sir Edward Leigh]

May I say to my right hon. Friend that he gave one of the best speeches this afternoon? It was thoughtful and incisive, and at least he is trying to develop an alternative argument. The Government—this is the problem with being in government—are faced with a crisis now and they have to find the money now. Regretfully, nobody has come up with a better plan than this. I am no toady to the Government, and I say to them that I do not think they can solve these problems by our constantly becoming a tax-and-spend party, as that is simply not going to wash.

We have been spending money like there is no tomorrow. I know there is a pandemic on, but the furlough scheme is riddled with corruption. I know from massive anecdotal evidence in my constituency that many companies are ripping us off left, right and centre. So the Government have to have more of a vision that they articulate: that we accept that there is a pandemic, that the NHS is in crisis and that we have to do something about care homes, but we do have a plan to control public spending. I know that the Chief Secretary agrees with me, but he may not want to leap to the Dispatch Box to say that now, especially as a reshuffle is imminent.

There are innovative solutions we can use to try to encourage people to take more control of their healthcare. John Major was hardly a fanatical right-wing Conservative, but he offered tax relief to pensioners who took out healthcare—we have never even considered that. The argument could be made that rather than having arbitrary limits such as £86,000, we could base this on the value of the house. So there are alternatives available.

I wish to articulate one thing before I sit down, and it relates to state insurance. I am trying to develop an alternative plan in the future. We know what Germany does and we know that it has an excellent system. Lord Lilley argued yesterday in a paper, and the Dilnot commission argued, that there is an alternative to all this. The Government dismiss private insurance straightaway. It is true that private insurance companies will not take over this burden alone, because they cannot foresee how many people will be very frail and stay in care homes for a long time. But why can we not have a system by which we underwrite private insurance? The state would offer insurance. Once someone is of pensionable age, they would enter the scheme. There would be a modest charge on their home, based on the value of the home. The premium, on average, would be covered by the Government, not by the person. On average, it would be £16,000 a year and it would be the covered by the Government, but that individual would have that peace of mind. That is an innovative scheme. It was suggested by the Dilnot commission. I do not understand why the Government have simply just ruled it out and said, “We have looked at private insurance and it simply will not wash.”

Many of us will be supporting the Government tonight—I know it is a bit of a cliché to say, “With a heavy heart”. We will be doing so because we recognise that the NHS is in crisis. However, we say to the Government: “When you just pump more and more money into a socialist construct like the NHS, you get lower and lower productivity. So we want to look at outcomes. We don’t want to just accept this argument that we are in an arms race with the Labour party, because they will always offer more than us.” So we want some answers from the Government on serious plans for the future and on controlling waste and low productivity in the NHS. We want to know how much of this money will actually go into the care home system. We can then vote for the Government with an easier conscience.

Levelling-up Agenda

Edward Leigh Excerpts

Tuesday 15th June 2021 Westminster Hall

[Several hon. Members rose—]

[Sir Edward Leigh (in the Chair)]

Order. We have 13 Back-Bench speakers. If there is to be any chance of everybody getting in, we will have to have a tight time limit. I will set it at three and a half minutes at the moment, but that may have to come down to three minutes. I would be grateful if speeches were kept below three minutes.

--- Later in debate ---

[Tim Farron]

Once the announcement was made, they did act swiftly, but I first raised the issue with the then junior planning Minister, who is now the Chancellor of the Exchequer. It took quite a long time to get to the stage where they made the announcement, but I thank the Minister anyway.

[Sir Edward Leigh (in the Chair)]

Minister, could you please give the hon. Member for Isle of Wight (Bob Seely) a couple of minutes to make his closing remarks?

[Jesse Norman]

I think I have 30 seconds before we get to that point.

--- Later in debate ---

[Bob Seely]

I thank everyone for taking part in the debate. I thank the Minister for his eloquent and detailed responses, and I thank you, Sir Edward, and my right hon. Member for Basingstoke (Mrs Miller), for your chairmanship.

[Sir Edward Leigh (in the Chair)]

Thank you for a very good debate on the levelling-up fund—I wish that Gainsborough could get some levelling-up fund too, but that is not for me to say.

Question put and agreed to.

Resolved,

That this House has considered the levelling up agenda.

0.7% Official Development Assistance Target

Edward Leigh Excerpts

Tuesday 8th June 2021 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

There have been some very moving speeches today. I could spend the time allotted to me repeating the humanitarian points, which by the way I believe in, that we have a duty to the world’s poorest, but my criticism of the Government’s action is based not so much on that as on the question whether this is the right way of proceeding if we are seriously concerned about running the public accounts in an efficient way.

Leaving to one side the fact that there is a manifesto commitment, which is important, I accept that the situation has changed with the pandemic and our economy has declined. Of course, the Government could have cut £2 billion from the overseas aid budget without any adverse criticism, because it was linked to the 0.7%. As our economy declined, we could very easily have cut the aid budget by £2 billion with no argument, but the Government decided to cut it further. What they should have done at that stage was be completely honest with the House and the people and say, if that was their view, “We don’t actually believe in this commitment to 0.7%”—but no, they said, “We still believe in it—this cut is entirely temporary.” But what does “temporary” mean: six months, a year, two years?

It is worse than that. The Government are, in a sense, hoist by their own petard. They have said that this is only temporary, so they have ordered the civil servants in the Department to go on cutting all these programmes. The one way to build in a lot of waste is cutting too quickly, which is almost as wasteful as increasing spending too quickly—I was often critical of the Labour Government when they increased spending too quickly. A lot of waste has now been caused by these civil servants going around cutting all these budgets.

I will leave aside the terrible humanitarian effects, because the point has already been made very effectively by colleagues, but if we accept the Government’s own logic, in six months’ or a year’s time, the same civil servants will be running around restoring all these programmes. There will be a huge amount of waste, and in the meantime, incidentally, a lot of people will have died, a lot of wells will have run dry and a lot of girls’ education will have been ended. People will have died and there will be a huge amount of waste.

Let me offer this compromise to the Government: just be honest, be transparent, be open with Parliament and accept parliamentary democracy. They could set a date—if they wanted, it could be by the Budget or some time early next year—when they will come honestly to Parliament with a policy. I am prepared to be open-minded about this 0.7% and to accept that although it is a manifesto commitment, there may be occasions where it might cause feast to famine to feast, but let the Government make their argument honestly. After all, this is the law; we are supposed to spend 0.7% of our budget by law. If we no longer believe that, we have to come to Parliament to repeal that Act or come to Parliament in the Budget debate and present an alternative. I am not even asking the Government to commit now in the Budget next year to restoring the 0.7%. I am just reaching out to them, with a compromise, to ask them to announce shortly, to end this debate, now and forever, that there will be a transparent, open debate within the next 12 months, so that we can determine this issue forever. Put Parliament first.

Better Jobs and a Fair Deal at Work

Edward Leigh Excerpts

Wednesday 12th May 2021 Commons Chamber

[Rishi Sunak]

The hon. Gentleman makes an excellent point. It is one that, I hope, we have already addressed. He is right about the importance of companies having the cash flow to bounce back strongly, which is why late last year we introduced something called “pay as you grow” to help the 1.3 million small and medium-sized companies that have taken bounce back loans. It means that automatically, at their choice, they will be able to turn those loans from five-year repayment loans to 10-year repayment loans, which almost halves the monthly repayments. Furthermore, it gives them the option to go for interest-only repayment periods of six months or for payment holidays, none of which will impact their credit rating as long as they do it in advance. That should be automatically communicated to businesses by their bank. I hope that is helpful to the small and medium-sized companies in his constituency.

[Sir Edward Leigh (Gainsborough) (Con)]

All the pressure on my right hon. Friend has been from one direction, so let me try to right the balance. When this is over, in terms of a smaller state, deregulation and lower taxes, are there any Thatcherites left in the Government?

[Rishi Sunak]

Well, my right hon. Friend and I strongly agree on the role of the private sector in driving our recovery. What is important, as the hon. Member for Strangford (Jim Shannon) said, is businesses having the confidence to invest, which is why the Government have provided support for businesses not just to get through the crisis, but, through tax cuts such as the super deduction, to help them invest and drive our recovery forward. Both my right hon. Friend and I know that the prosperity that we all want can only be created by those private sector companies. I hope that gives him the reassurance that he is looking for. I should make some progress.

Talking of those businesses, I do believe that they are also now beginning to feel more confident. Although many firms have been hit hard by the pandemic, the latest data shows that the number of businesses becoming insolvent actually fell by nearly a quarter last year compared to the year before, and in aggregate firms have been able to build up an extra £100 billion of corporate deposits since the start of the pandemic. Since we announced our super deduction tax cut, businesses now have a virtually unprecedented incentive to invest and create jobs. Bank of England surveys show that businesses expect to invest around 7% more than they would have done over the next two years, and Deloitte’s recent survey of business leaders shows that their intention to invest is stronger than it has been at any point since 2015.

It is, of course, going to take this country and the whole world a long time to recover fully from the shock that saw the largest fall in output in 300 years, but although our recovery will be long and difficult, it is beyond doubt now that our plan is working. We will, however, never be complacent. Eight hundred thousand people have lost their jobs through this crisis, and no Chancellor could guarantee that there will not be more jobs lost. People losing their jobs is the thing that weighs most heavily on me. Work is the best route out of poverty. It brings people financial independence. It improves long-term outcomes for families and children. Work is not just another economic variable—it provides us all with purpose and fulfilment. That is why every job lost is a tragedy. That is why jobs are our highest economic priority. That is why we have a plan for jobs, and that plan is working.