Support for SMEs: Covid-19

Edward Leigh Excerpts

Tuesday 10th November 2020 Westminster Hall

[Sir Edward Leigh (in the Chair)]

We have quite a few speakers, but if everybody keeps to under five minutes, everybody can get in. Before speaking, can you look at the clock and make sure that you sit down within five minutes, however interesting your comments may be? Thank you.

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[Several hon. Members rose—]

[Sir Edward Leigh (in the Chair)]

Order. I call another Yorkshire Member, Mr Hollinrake.

Public Health Restrictions: Government Economic Support

Edward Leigh Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

As the Minister responsible for Government spending on behalf of the Chancellor, I would want to look closely at why the school in the hon. Gentleman’s constituency is saying that that very significant uplift in funding for schools last year does not appear to be reaching the frontline. The education funding settlement in the 2019 spending round should more than cover the cleaning costs. I will happily look at that, but if he looks at the funding settlement allocated in SR19, I think he will accept that it was a very generous one.

[Sir Edward Leigh (Gainsborough) (Con)]

It is not surprising that more and more Members are calling for more Government support, because the Government are forcing more and more businesses, particularly in the hospitality sector, out of business. The Chief Secretary says that his priority is to help business. The best way to help businesses is to let them get on and do business. We are going bankrupt as a nation—there will not be the money to pay for the NHS or pensions. What is the Treasury doing to row back against other parts of the Government and insist that we must allow British business to operate? He did not answer the question from the Chairman of the Select Committee, my right hon. Friend the Member for Central Devon (Mel Stride)—what is the scientific evidence for pubs closing at 10 o’clock? Is he leading the fight to help Britain to stay in business?

[Steve Barclay]

With respect, I did answer it. I pointed to the projection given by the chief medical officer and chief scientific adviser at that time, the SAGE guidance and the fact that the package of measures put in place by the Prime Minister has resulted in a lower infection risk. The CMO and others would recognise that this is a range of measures. My right hon. Friend says that the Government have gone too far and that there is no evidence for the curfew. The tenor of most of the questions one gets is that we have not moved far enough and should be taking more drastic actions. That speaks to the fact that this is a balanced judgment. One needs to look at the range of measures we are taking, and that is what I would refer him to.

Areas with Additional Public Health Restrictions: Economic Support

Edward Leigh Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

We have provided significant funds to Northern Ireland—an additional £2.2 billion—to cope with the pressures of the pandemic, and that has enabled 300,000 jobs in Northern Ireland to be protected through the furlough scheme, along with an additional 78,000 jobs through the self-employed income support scheme. Indeed, the package of measures that my right hon. Friend the Chancellor announced in his winter plan applies in terms of additional support for Northern Ireland as it shapes its response to the pandemic.

[Sir Edward Leigh (Gainsborough) (Con)]

Does the Chief Secretary agree that the best way to help business is to let business get on with the job, as free as possible from Government control? Will he note that when the Treasury argues against further lockdowns for business, scores of Tory MPs and tens of thousands of businesses cheer it on? After all, to quote the Chancellor, is it not our “sacred” duty to “balance the books”? What is the point of solving this problem by borrowing money? Is that not the socialist way? What would be the point of a Conservative Government if we did that?

[Steve Barclay]

As a former Chair of the Public Accounts Committee, my right hon. Friend is quite right to focus on the importance of value for money and protecting the interests of the taxpayer. He knows me well enough to know that I share that sentiment. On our wider response, it is important that we get the right balance between responding to the virus and doing so in a way that is supportive to the economy. It is a false choice to see this as a choice between health and economics; they are clearly intertwined and we need to work together in shaping our response.

Economic Update

Edward Leigh Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

When it comes to capital investment, it is important to put in context what our existing budgets were for this year. I announced £88 billion at the Budget for this year. That represents a 20% increase on our capital investment plans in the previous year and, as a percentage of GDP, the highest amount that we have invested in capital since the ’70s. The starting base level for our capital investment is already exceptionally high. We have brought £5 billion of additional projects forward into this year, but, taken in the round, it will be the most we have ever spent on capital in real terms for a very, very long time.

[Sir Edward Leigh (Gainsborough) (Con)]

Will this young, vigorous Chancellor not be too cruel to an old Thatcherite for making this deeply unfashionable point? There are no good, long-term subsidised jobs. As we saw with the new Labour make-work jobs and with furlough, sooner or later they are subject to fraud and market distortion. Will he confirm that the only good, long-term jobs are based on the Government ensuring deregulation, market flexibility and tax cuts on entrepreneurship, with a plan to repay the national debt? Otherwise, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) once said, there will be no more money.

[Rishi Sunak]

I wholeheartedly agree with my right hon. Friend. He is absolutely right: these interventions are specific to the moment that we face now. They provide support for young people at this moment of acute crisis. In the long term, only a dynamic market economy can provide sustainable, long-term employment for young people and beyond. In the medium term, once we get through this crisis, we must return our public finances to a sustainable place.

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 7th July 2020 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

Whether he plans to (a) reform and (b) simplify inheritance tax.

[The Financial Secretary to the Treasury (Jesse Norman)]

Inheritance tax makes an important contribution to the Exchequer. The current threshold of up to £1 million for a qualifying married couple or civil partnership means that 96% of all estates in 2020-21 are forecast to be able to pass on their assets without any inheritance tax liability. Any reform or simplification of inheritance tax would be considered as part of the usual Budget process.

[Sir Edward Leigh]

When are we going to fulfil numerous promises made as long ago as before the 2010 election, by George Osborne, to help middle-class people pass on more of their property to the young? After all, that is a priority for the young. While we are about it, can we hear from the Chancellor and the Prime Minister less about high-spending lefties like President Roosevelt and more about good Conservatives like Ronald Reagan and Margaret Thatcher—less about subsidies and more about tax cuts and tax simplification?

[Jesse Norman]

I hesitate to give my right hon. Friend a history lesson, but he will recall that Ronald Reagan was a deep admirer of FDR and quite a heavy spender in his own right. Inheritance tax is paid on only one in 25 estates, and therefore it is not quite as large an issue in terms of the number of people affected as my right hon. Friend suggests. We take these issues very seriously and return to them recurrently at fiscal events.

Finance Bill

Edward Leigh Excerpts

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

[Dr Huq]

My hon. Friend is so much more knowledgeable than me. Lots of my constituents cannot afford to buy their own home and are in rented accommodation, so that does not even apply to them. They are in beds in sheds—maybe I should not dob them in, but that is a phenomenon in the London Borough of Ealing.

Again, HMRC must accept responsibility for not communicating regularly with people. It could have acted sooner to avoid this sizeable group of people who went into these remuneration schemes having to pay back sometimes hundreds of thousands of pounds at a time. IR35 is being rolled out now, so the deferral is obviously welcome, because these things can be fixed in real time, as long as the deferral is not just pushing punitive measures further away. The Government need to urgently commit to a full review of tax reliefs.

While the debate is about job creation, I want to flag, as my hon. Friend the Member for Liverpool, Wavertree pointed out, that the global pandemic we are in seems to be a bit of a cover for certain companies to behave badly. British Airways and Virgin spring to mind as using the coronavirus job retention scheme—the clue is in the name—to do the very opposite. Having accepted furlough funds from the public purse, they are now using coronavirus as a cover for restructuring plans—plans they were always itching to execute—while they believe the eyes of the world are diverted elsewhere. I say to the Minister that we need a sector-specific deal for aviation.

The situation is the same for the creative, cultural and arts sector. I represent many constituents who work in it. Not for nothing was Ealing long-called a BBC borough. The Questors theatre—the jewel in our crown—is the biggest amateur dramatic venue in the country and it has written to me. It is about to go under. Its rateable value is too high to get any of the reliefs. That is another plea to the Minister.

We were told that, when we left the EU, we would be world-beating on employment rights, and that our rights could exceed those of the bloc after Brexit, but now, with IR35, we are heading for zero employment rights. The Government always said that this would not be a race to the bottom, so they need to put their money where their mouth is. There is nothing like a global pandemic to concentrate the mind. We have heard slogans such as, “We’re all in this together”. To stop all these Government utterances from being just hollow words, we need action. Snappy slogans are not enough.

[Sir Edward Leigh (Gainsborough) (Con)]

It is true that we find ourselves in a very serious situation. The number of workers on UK payrolls was down by more than 600,000 between March and May. Of course, the Government are attempting to redress the situation with the Business and Planning Bill and the Corporate Insolvency and Governance Bill. We also hope that we can end lockdown as soon as possible. Certainly, the Prime Minister is talking the talk in terms of build, build, build. That is all very good. We have infrastructure needs; let us meet them. There are no massive spending projects. The problem with them is that they are often hugely bogged down in cost overruns.

I want to say a bit about tax simplification. That is the genesis of this whole debate on IR35 and the loan charge. There is also our hugely ineffective, inefficient and long tax code—longer than India’s—and that is after 10 years of Conservative Government. I think that there is a new wind breathing through No.10, and I hope that we are going to be bold about tax reform. Are there any taxes that we can abolish completely or replace with simpler alternatives? We have created this massive tax avoidance industry, which has sucked many people with quite moderate means into its claws. Let me cite as one example, inheritance tax at 40%. We have to understand how people act. At a rate of 40%, most people are willing to make a significant investment to reduce the effectiveness of that rate. I am not condoning that behaviour, but if someone were left a million pounds and if the state said that it would take £400,000, they might begin to think that it is worth spending £40,000 or £50,000 on tax advice as a way of lessening their payment of tax. All sorts of complicated trusts and avoidance schemes are available to those who recognise that they can avoid paying tax. The result is less money for the Treasury to spend on the things that we need.

On this debate about the loan charge, it is natural that politicians should want to close down loopholes, but often, in closing down loopholes, we are affecting people of quite modest means. It is true that as a level of complexity involves means, those loopholes are usually available to those who have the resources to investigate them, but not necessarily. An entire industry has been created around how to lessen our tax burden, inheritance or otherwise, and I think that the Government are, in a way, responsible for this kind of behaviour. The people who have taken advantage of these tax loopholes, often of modest means, are simply reacting to our hugely complex tax codes. Taxes need simplifying and they need lowering. I make that point because I hope the Minister will say something in his summing up about this. I hope that he tells us that the Government have an agenda, otherwise we will go on having these debates over and over again. Every time a new loophole is discovered, people will take advantage of it, often with the wrong sort of advice. Then the Government have to close the loophole, creating injustice, which we have heard all about in this debate.

[Sir Iain Duncan Smith]

My right hon. Friend talks about tax loopholes and, yes, that is absolutely clear, but the thing about the loan charge is that HMRC itself was complicit in the process. It was advising and letting people believe that those charges were quite safe and reasonable. Then quietly, it came to the conclusion that they were not and did not make it clear to anybody. In effect, therefore, it is HMRC that has created the tax loophole and then failed to identify it and tell people that they were on the wrong scheme.

[Sir Edward Leigh]

I absolutely agree with my right hon. Friend, and he puts it far more clearly than I have done. I was trying to make the point that he has just made, which is that, ultimately, HMRC and the Treasury are responsible for this in not giving proper advice and in creating an over-complex tax system, and that has created this kind of behaviour. It is natural behaviour and we should not blame the people who have tried to take advantage of these sort of schemes. This complexity kills the economy.

[Sir Christopher Chope (Christchurch) (Con)]

One of my constituents says that because he put in freedom of information requests to HMRC, on two occasions last summer, HMRC paid him a visit at his home. Is that the behaviour we expect from HMRC?

[Sir Edward Leigh]

We have learned to expect that sort of behaviour. As Ronald Reagan said—we have heard about Roosevelt, so why can we not hear from Ronald Reagan, who was a better sort of Conservative as far as I am concerned?—when we tax something, we get less of it, and when we subsidise something, we get more of it. Research from the European Central Bank shows that when the tax burden is raised by 1%, economic growth is reduced by 0.13%. We have heard a lot about job creation, but that change means many fewer jobs. Every time we create taxes, we destroy jobs.

The Office for Budget Responsibility forecasts that the UK tax burden will grow to 34.6% of GDP by 2024, which is the highest tax burden for this country in more than half a century. We think of ourselves as a seafaring, deal-doing, trading nation, but how can we compete when the trend of tax burden is going the wrong way? That is how we will stifle job creation. We must look at a comprehensive reform of our economy, not the usual tinkering under the hood, and we can do some of that through regulatory reform. That is not aiming for deregulation—instead, the Government should ensure that the UK’s regulatory structure is simple, clear, and appropriate. That is the genesis of this entire debate: our tax system is not simple, not clear, and not straightforward.

If we radically simplify the tax system we will spur more activity, so it is a virtuous circle of benefit to the whole of our society. Imagine if all the money spent on corporate or personal tax avoidance—tax avoidance is perfectly legal, I say to the Minister—could be invested in productive activity instead. Imagine all those thousands of accountants going off and taking up machine tools—I know it is unlikely, but at least it is a thought. That would also be fairer, as it would no longer mean that the richer someone is, or the bigger their company, the more they are capable of exploiting complicated tax loopholes.

We know it is simplistic to base our economy on Singapore or Hong Kong—we are a larger country with more complex needs—but on tax policy, the example they have set is applicable. Let us consider per capita GDP of the UK, Singapore and Hong Kong. They were all more or less at a parity in 1989, about five years after I came to this House, with each at around $25,000 a year. All three countries have improved their GDP per capita, but the scale of the difference is notable. By 2016, six years into a Conservative Government, the UK, with its complex tax code, had a per capita GDP of $37,000. Low tax, simple tax Hong Kong was at more than $48,000, and Singapore at $65,000 to our $37,000. We neglect at our peril that opportunity for a huge growth in numbers of jobs, for our per capita GDP and for income for the Treasury. My simple point to the Minister is this: when he sums up, will he say something about tax simplification and tax reduction?

[Mary Kelly Foy (City of Durham) (Lab)]

We are facing an employment crisis unlike anything we have seen in a decade. The impact of coronavirus will undoubtedly weaken much of our infrastructure, leaving many workers unemployed, and businesses on the brink of collapse. Unfortunately, when lockdown ends, the Government seem intent on a return to normality and business as usual, stuck in the past when they should be learning lessons and looking to the future. The Government’s slow reaction cost us as we entered this pandemic, and they cannot repeat that mistake as we emerge from lockdown.

In contrast, my hon. Friend the Member for Oxford East (Anneliese Dodds) has proposed a back-to-work Budget that places jobs at the heart of the economic recovery. That does not mean a sticking plaster solution, however, or jobs with little or no protection for workers. The damage to our economy caused by this awful virus has been severe, but the economic structuring of society was already broken—skewed in favour of the wealthy rather than workers.

Over the last decade of Tory austerity, the Government have launched attack after attack on the rights and protections afforded to working people. Through the promotion of zero-hours contracts, ambiguity in employment status, low pay and lack of protection in the workplace, the Government have encouraged irresponsible employers and abandoned the country’s workers. Before lockdown, 9 million people living below the poverty line—3 million of them children—were in households with at least one person in work. The Government boast of record levels of employment, but they should be ashamed of the amount of in-work poverty. This economic model needs to end.

If this pandemic has shown us anything, it is that the people on whom society relies the most are those least rewarded in pay and respect. Whether it is the poorly paid nurse, the carer on a zero-hours contract or the retail and hospitality staff working shifts so long that they would not be out of place in Victorian society, the people of Britain deserve better. This pandemic has been devastating, but it provides us with an opportunity to shape the economy and society in a way that prioritises the environment and protects workers. That means better pay, shorter and more consistent working hours and job security. Workers need to be able to look ahead into the week knowing that they have work, that their wages will provide a decent standard of living and that their working hours will leave them the time and energy to live their life. The better the conditions and protection for workers, the better their quality of life and the greater their health, wellbeing and sense of worth—it really is that simple.

The pandemic has also exposed the lack of protections for staff in the workplace and how fragile health and safety standards are. The Government must begin to see employment law as a red line, rather than being advisory, and they must properly fund the Health and Safety Executive, so that safety in the workplace is properly enforced. When the Government finally begin to plan for our post-coronavirus society, they must accept that the status quo has not worked, and any attempt to return to business as usual will fail the public. The 33 million workers of Britain deserve more. When society needed them most during this pandemic, they delivered. It is time for the Government to do the same for them.

Self-employed Persons: Financial Support

Edward Leigh Excerpts

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

May I first welcome the constructive tone that the right hon. Gentleman has struck? His offer to come to the Treasury might contravene some of the recent social distancing requirements, but I appreciate the spirit in which it was made. He is right that we need to move at pace and to work together. That is why my right hon. Friend the Chancellor was involved in further meetings this morning, as he will be later today, as we work through how to take this forward.

The Chancellor was drawing attention to the complexity of the target population. I think that a number of Members would have concerns, not least as we look to the future, if we were subsidising some very wealthy self-employed people. I take the point that they are not the ones getting in touch with the right hon. Gentleman, but it is important that our approach is mindful of the target population.

The right hon. Gentleman raised the issue of reassurance, which is a legitimate concern, and one shared across the House. I draw the attention of his constituents, and those of colleagues across the House, to the Chancellor’s comments this morning. We are working at pace on this and we recognise the issue being raised. I hope that provides reassurance, certainly in terms of an announcement, although the operation of any solution may take further time, as the Chancellor set out.

Considerable work is being done, but the population is complex. We are looking at the burdens of different delivery mechanisms, whether on the Department for Work and Pensions or local authorities, which have their own staffing pressures because of the number who are ill. That is why we are exercising flexibility in lots of other areas in order to reprioritise resources, but it is important that the scheme is deliverable and mindful of the other challenges we are dealing with.

[Sir Edward Leigh (Gainsborough) (Con)]

May I make a point from a public accounts point of view by urging the Chief Secretary to the Treasury to consider a system that is humane, rapid and, above all, simple? The Treasury and the Department for Work and Pensions have traditionally been obsessed with complexity, targeting and clawback, but what we need is a simple system. About 40 years ago I suggested having a universal basic income to Mrs Thatcher, and I got an earful for my pains. But we need something like that, which could be rolled out very simply and claimed by taxi drivers, cleaners and those sorts of people, because rich people would not bother with it. So just get on with it, make it simple and do it now.

[Steve Barclay]

My right hon. Friend wants us to get on with it. I refer him to the meetings and the considerable work being done to allow us to get on with it. As a former Chair of the Public Accounts Committee, he well knows that many policy ideas start with the simple but then the devil is in the detail of delivery. I recall many an interview that he has given to draw attention to simple schemes that were then less simple in their delivery. It is worth bearing in mind that a small number of self-employed people—a very small proportion—might be doing quite well in the current climate, while many others are suffering, but that is not what we are focusing on now. The question that we are seeking to address is how we target our measures at those who are most deserving, which is what the attention of the House is focused on, and we need to ensure that the scheme that is brought forward does likewise.

Economy and Jobs

Edward Leigh Excerpts

Monday 20th January 2020 Commons Chamber

[John McDonnell]

I suppose we will have a longer debate at some stage about the outcome of the last general election. I will be straight with the hon. Gentleman: I think the overriding issue was Brexit and that the overriding message was the one the Conservative party put out of “Get Brexit Done”. I ascribe the victory of the Conservative party to that. I cannot be straighter with him than that.

In the last three months in this Chamber, we have had debates on the spending review and the last Queen’s Speech in which hon. Members have highlighted report after report from independent agencies exposing the impact of a decade of austerity. I want to seize on one group as an example—a group dear to all our hearts. If we are to lay any claim to being a compassionate or even a civilised society, surely the most effective test is how we care for our children, and on that count the Government fail appallingly. Surely no Government could ignore organisations such as the Children’s Society and the Child Poverty Action Group, which have reported that more than 4 million of our children are still living in poverty. That means that one child in three is living in poverty in our country in the 21st century. Some 125,000 of those children are homeless and living in temporary accommodation.

The effects on our children of living in poverty are well documented by the Children’s Society. Those children are more likely to be in poor health, to experience mental health problems, and to have a low sense of wellbeing. They underachieve at school, and experience stigma and bullying. The shocking statistic, though, is that 70% of children living in poverty are in households in which someone is in work. The Children’s Society describes that experience as being hit by a perfect storm of low wages, insecure jobs and benefit cuts. The result is remarkable: this Government have achieved the historic distinction of being the first modern Government to break the link between securing work and being lifted out of poverty.

The Chancellor boasted recently that wage rises were at record levels compared with those of the last 10 years. That is a bizarre boast. Wage rises are at a 10-year record high because his Government have kept wage growth so low for the last decade. Average real wages are still lower than they were before the financial crisis. [Interruption.] The Chancellor, from a sedentary position, has again used the slogan “Labour’s crisis”. Let me try to find a quotation for him. George Osborne said:

“did Gordon Brown cause the sub-prime crisis in America? No.”

He went on to say that “broadly speaking”, the Labour Government

“did what was necessary in a very difficult situation.”

The Chancellor, again from a sedentary position, refers to the deficit. Let me quote again. In 2007, George Osborne said:

“Today, I can confirm for the first time that a Conservative Government will adopt these spending totals.”

He was referring to the spending totals of a Labour Government, by implication. Let me caution the Chancellor, because we might want to examine his role at Deutsche Bank, where he was selling collateralised debt obligations, described by others as the weapon of mass destruction that caused the crisis.

As I was saying, average real wages are still lower than they were before the financial crisis. The Resolution Foundation has described the last decade as the worst for wage growth since Napoleonic times. The recent increase in the minimum wage. announced with such a fanfare by the Government, reneges on their minimal commitment that it would be £9 an hour by this year. It certainly is not. The UK is the only major developed country in which wages fell at the same time as the economy grew after the financial crisis.

The Government seem to believe that the answer to low pay is raising national insurance and tax thresholds. When tax thresholds are raised, the highest gainers are largely the highest earners, and raising them and national insurance contributions is the least effective way of tackling poverty. According to the IFS, only 3% of the gains from raising the national insurance threshold would go to the poorest 20% in our society. A £3 billion cut in the national insurance contributions of employees and self-employed people—which, at one stage, was promised by the Prime Minister—would raise the incomes of that group by 0.1%, which pales into insignificance in comparison with the losses endured from benefit and tax credit cuts since 2010. It is also worth bearing it in mind that, while the heaviest burden of austerity has been forced on the poorest in our society, this Government have given away £70 billion of tax cuts to the corporations and the rich.

We have also heard Ministers refer to the so-called jobs miracle. Of course we all welcome increased employment, but when we look behind the global figures we find nearly 4 million people in insecure work with no guaranteed hours and 900,000 people on zero-hours contracts. Britain has one of the highest levels of income inequality in the developed world. A FTSE 100 chief executive will be paid more in three days than the average worker’s annual wage. Surely no Member of this House can think that that is right, can they? The gender pay gap is 17.3% and there is now an inter-generational pay gap of over 20%. There is an 8% pay gap for black workers, and if you are disabled the pay gap is 15%. There is nothing in the Queen’s Speech that will address any of this. There is nothing that will address the grotesque levels of inequality in our society and at work, certainly on the scale that is needed.

[Sir Edward Leigh (Gainsborough) (Con)]

And 30% of all tax receipts come from the top 1% of earners.

[John McDonnell]

That is just income tax. It is interesting that the lowest earners pay 40% of their income in tax while the highest earners pay 34%. We know who is paying more in comparison with what they earn.

There is nothing in this Queen’s Speech that will address the grotesque levels of inequality. Actually, the reverse is true because the Government are now launching another assault on trade union rights and, in particular, the human right of the ability to withdraw one’s labour. The Chancellor has also rejected future dynamic alignment with EU employment rights and standards, and there is a real fear—let us express it now—that this prefaces the fulfilment of ambitions of Conservative Members to undermine workers’ rights and conditions. Maybe that is what some of their campaigning for Brexit was all about. Wage levels are low, in part because this Government have produced a productivity crisis. Over the past decade, productivity grew at its slowest level in 60 years. A German or French worker produces in four days what a British worker produces in five, not because the UK worker is any less industrious; far from it. It is because investment in the UK has been broadly weaker than in the rest of the G7 countries, especially since 2016, and investment is currently stagnating.

This has been exacerbated by the lack of investment not just in capital but in human capital—in training and skills. In his interview at the weekend in the Financial Times, the Chancellor highlighted the role of further education colleges, and I agree with him. He talked about the role they could play in raising productivity by promoting lifelong learning and skills training. As someone who benefited from further education while I was on the shop floor, I fully agree, but the reality is that this Government have brought FE to its knees, with the IFS suggesting that at least £1.16 billion is needed just to reverse the cuts that the Government have imposed on further education. We have seen a decade of a Government denying opportunities to the very people whose skills have been desperately needed, not just to fire up our economy but also to lift their families of poverty.

Alongside skills, a vibrant economy needs to invest in the future if we are to compete in the fourth industrial revolution, but on investment in research and development, the UK is now 11th in the EU. We await the Government’s detailed proposals on investment in R and D, and if they are of a scale we will support them, but it will take a lot to make up for the lost decade in this field. A lack of investment in infrastructure and R&D has resulted in productivity going backwards in many regions of the UK. The 2017 Kerslake report identified a £40 billion productivity gap in the three northern regions compared with the south, which has produced some of the worst regional inequality in all of Europe.

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[Sir Edward Leigh (Gainsborough) (Con)]

I assure the hon. Member for Leeds West (Rachel Reeves) that no Government Member wants to degrade the rights or the dignity of working people—quite the opposite. We are not interested in turning us into some bargain-basement economy by lowering standards.

This Parliament seems to have a much calmer atmosphere. We seem to have passed through a hurricane, and we now have a solid majority. However, some would claim that we are simply in the eye of the storm and that another hurricane will hit us over a so-called hard Brexit and a failure to achieve a free trade deal. I doubt whether the free trade deal will be so difficult to achieve. After all, we start with exactly the same rules, regulations, tariffs and everything. If there is good will on both sides, as there certainly is on ours, I see no difficulty in achieving the free trade deal.

Much has been made of what the Food and Drink Federation said this week, but I see no difficulty there. Are we going to downgrade the Lincolnshire sausage compared with the Bavarian sausage? Are we going to produce low-grade orange juice? Of course not—we will keep our standards. I look at the Chancellor when I say this: there is use in the Government making it absolutely clear, when it comes to environmental standards, working rights and ensuring that we have good-quality products, that we are absolutely top-notch in the world and that we will not downgrade any of our standards. What would be absolutely intolerable is to sign up to a deal that says that for ever more, we have to follow rules made by another jurisdiction. That would be absurd, which is why I am opposed to remaining permanently in some kind of single market or customs union. I know that the Chancellor will be absolutely robust in resisting that, but the free trade deal can and will be achieved, because we are a party of free trade. We are open to the world—that is what we believe in. I am not a believer in a hard Brexit or a soft Brexit; I believe in a Brexit that is good for business—a business Brexit—and I am sure that the Chancellor does, too.

How will we increase our competitiveness in Europe and the world as Brexit takes place, if we are to maintain these excellent standards? I suggest, by way of a Budget submission to the Chancellor, who is sitting on the Front Bench, that we could learn lessons from the past. I think I have now sat through over 40 Budgets in this Chamber, and most have been frankly unimpressive. They have looked to the next day’s headlines in spending a bit more money here and there. The one Budget that really impressed me was Nigel Lawson’s Budget in 1988, because he had a vision. It was a vision of a lower-tax economy from a Chancellor who was determined to strip away the mass of allowances and ensure that we no longer had the longest tax code in the world after India. I remember when the Chancellor arrived as a fresh-faced young Back Bencher in 2010, a man who had been a success in the City of London, and I saw him as a Thatcherite. I want him to remember those early days and at the next Budget to take a leaf out of Nigel Lawson’s Budget.

Nigel Lawson said, “If you reward enterprise, you get more of it”. We are a Conservative Government with a solid majority. Have we got the courage of our convictions? Nigel Lawson reduced the top rate of income tax from 60% to 40%. Throughout the period of the Labour Government, they kept that top rate at 40%, except in the dying days when Gordon Brown increased it to 45%, and it is still at 45%. There is no economic justification for it, nor was there for George Osborne’s attack on young entrepreneurs through national insurance. Has the Chancellor got the courage in this Budget to do what Nigel Lawson did, to be a visionary and to start simplifying our tax system and rewarding enterprise? I would be very happy to give way to him, if he wants to make that clear. As I said to the shadow Chancellor, given that 30% of all income tax receipts come from the top 1% of income tax payers, I accept that it will be impossible, probably, to ever achieve the dream of a truly flat-rate tax system, but we can simplify it and gradually flatten taxes. Businesses are employing thousands of accountants to help them avoid taxation. Why can we not simplify our taxation system? I hope we can make progress on that.

I hope we can be a radical Government in other respects. I hope we do not feel we have to ape the Opposition in promising more and more public money. Of course, we have to spend more on the NHS—we have an ageing population with more and more treatments coming on stream—but we have to be a radical Government in trying to deliver outcomes. What is important is not what we spend on the NHS or social care, but the outcome, so we must not be afraid of promoting within the NHS private sector solutions that deliver more efficiency. What do the public care about? They care about their operation and treatment being on time. How that is delivered is not really a priority for them. I feel in his heart of hearts that the Chancellor agrees and is committed to achieving free-enterprise solutions.

[Wera Hobhouse]

rose—

[Sir Edward Leigh]

I remember that the Liberal party in its heyday was a party of free trade and liberalism, so I hope this intervention will be part of that.

[Wera Hobhouse]

Will the right hon. Gentleman not accept that the many vulnerable people who need help who come to my surgery, and whom I see on a daily basis, need good public services?

[Sir Edward Leigh]

Of course they need good public services, and we are a party of good public services, but we do not believe that the only way of improving public services is by increasing spending in real terms year in, year out. The best way to downgrade productivity and efficiency in the public services is by rapidly increasing spending without tight cost controls on outcomes. I am sure I can rely on the Treasury in that regard.

Where the Opposition have a point, and where we do have an argument, is that some of the big companies, particularly the American digital companies and tech giants, are not paying their fair share of tax. There is also an increasing feeling in this country—this is the one nation point—that the employment rights of some of the people at the bottom of the heap are being downgraded. The Conservative party has an historic opportunity to build on its alliance with working people to improve standards, workers’ rights and the ability of those big companies to pay taxes, and we can do that while also being an enterprise Government and rewarding hard work. By doing that, we can achieve a great deal.

The last part of the jigsaw—this alliance with working people—is the question: why do they vote Conservative? Why did they vote for Brexit? It is because they are fed up with cheap labour being imported into this country and fed up with their rights and employment opportunities being downgraded. If the Chancellor is now looking to the world in terms of immigration, let him ensure that we will no longer downgrade the rights of workers in this country by importing cheap labour. Let us have good-quality labour—people who have something real to contribute.

I believe that there is a real, historic opportunity for the Conservative party to build on this alliance with the working people in the north of England who have felt forgotten for so long. That opportunity is here, and I am confident that this Chancellor will deliver it.

[Madam Deputy Speaker (Dame Rosie Winterton)]

It is a great pleasure to call Beth Winter to make her maiden speech.

--- Later in debate ---

[Jack Dromey (Birmingham, Erdington) (Lab)]

I congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) and the hon. Member for Arundel and South Downs (Andrew Griffith) on giving their maiden speeches. They come from two different traditions and two very different constituencies, but Cynon Valley and Arundel and South Downs both have strong voices in this House.

Labour was accused by the Chancellor earlier of being out of touch, so I hope he forgives my saying that I represented workers in the world of work for 35 years. What I learned from that is that key to the success of any company or country is its workforce and how they are treated. I used to argue that there are two simple truths: that the difference between the average and the world-class lies in the extent to which we untap the endless potential and creativity of employees, and that how workers are treated is key to the quality of the service they provide or the product they produce. I worked with many world-class companies in world-class sectors, such as Jaguar Land Rover, Airbus, Siemens, British Aerospace, Rosyth and Devonport dockyards—all good employers that are rightly praised by their workforces.

However, there is another world of work on which we must also focus in this debate: the growing gig economy and the growth of work insecurity. Some 3.7 million people now work in insecure jobs, and 8 million work in relative poverty. Even in companies that purport to be good employers, the sad reality is different, and I want to focus on Amazon, which employs 27,000 people here in Britain. I have worked with the GMB both to stand up for the workforce and to challenge some pretty shameful practices.

I remember one particular woman—a team leader—who was asked to attend a disciplinary hearing. She was 38 weeks pregnant. The charges were for gross misconduct, and her crime that caused downtime during work was pregnancy. She was made to attend a five-hour disciplinary hearing and was not offered food or drink. She got off as a consequence of representation by a GMB official, but when she sought to appeal against the final written warning, Amazon set up the appeal on her due date. She was distraught at how the company had treated her. I also met a young man at the gates of the giant depot at Rugeley who had been sacked at 6 o’clock in the morning, and he had his child with him because of the difficulties of managing life and shift patterns. He wept, as did his child in the back of his car.

One can look at the evidence given to the Business, Energy and Industrial Strategy Committee—I praise the work done by my hon. Friend the Member for Leeds West (Rachel Reeves) in rightly focusing on this situation—about the targets being set for Amazon workers. One worker said:

“In Amazon, there is—I am not sure if this is the correct expression—a rat race. There is always a fight for the target. You need to hit the target, and if you do not,”

they come after you. Drivers complained that they sometimes have to do 200 drops in one day. A worker at Rugeley was asked, “What’s it like to work for Amazon?” and they responded, “Prison camp.” Another worker at Rugeley was asked, “In your own words, is Amazon a safe place to work?” and the answer was, “No. Productivity is put first. It could be much safer.” A worker at the Dunstable depot was asked, “What’s it like to work for Amazon?” and the response was, “They act in a cynical way. If someone raises a complaint, they—the management—will start to do things until that person feels undervalued and leaves Amazon.” People are being pushed out by the company.

A worker at Peterborough was asked, “Are there enough facilities for everyone, such as washrooms, toilets, drinking water, canteens, etc.?” and the answer was “No! Given the size of the building and the number of people working there, there are not enough toilets or handwashing facilities.” A worker at Tilbury was asked, “In your own words, describe what it is like to work for Amazon” and they said, “To work for Amazon in my opinion is slavery in a modern world.” Finally, a worker at Gourock was asked the same question and the answer was, “This is the most stressful environment in over 40 years of working” that they had experienced and endured.

[Sir Edward Leigh]

For what it is worth, I agree with everything the hon. Gentleman says. Amazon is taking us for fools based on what it is doing to our high streets and on how little tax it pays. We need to find a creative solution—I am looking at the Treasury Bench—to ensure that these American digital giants are paying their fair due and treating their workers properly.

[Jack Dromey]

I totally agree with the right hon. Gentleman, and I am going to go on to that topic next. To add insult to injury, not only is there the treatment of workers employed by Amazon, but there is, to be frank, tax dodging. The Guardian reported in September 2019 that Amazon UK Services, one of Amazon’s key British divisions, paid £14 million in tax despite making £2.3 billion in sales and £75.4 million in pre-tax profits. In March 2018, the Daily Mail reported that Amazon paid only £20 million across its eight British-based companies— £4.5 million in corporation tax—despite registering £2.9 billion in UK sales. The issue was also focused upon by the Public Accounts Committee, which found:

“Amazon has a reported turnover of £207 million for 2011 for its UK company (Amazon.co.uk), on which it has shown a tax expense of only £1.8 million, however it shows a European-wide turnover of €9.1 billion for its Luxembourg based company (Amazon EU Sarl) and a tax of €8.2 million.”

I could go on, but the figures are stark and tell the story to which the right hon. Gentleman referred. It is completely unacceptable. Amazon is owned by Jeff Bezos, one of the wealthiest men in the world, and shame on him that he presides over a company that treats workers in such a way on the one hand and dodges paying the tax on the other.

What should be done about this situation? I applaud the tremendous work done by the GMB in standing up for the workers of Amazon, and there is now a global network, because the problem exists not just in Britain, but in Amazon’s companies worldwide. The Government talk about the dignity of labour and respect. The Government talk about wanting to be the champions of working people. What are the Government going to do or say about how Amazon conducts itself? There is a set of commercial relationships between various arms of Government and Amazon, so where do the Government stand? Why not call upon Amazon to do what I proposed when I went into the giant Rugeley depot? I was told, “We are very interested in that idea,” but nothing was done about it. There have been 600 ambulance calls to that and other depots. Why not agree to the proposal that there should be an independent investigation conducted jointly by the HSE and the GMB into the health and safety practices? The Government have power, including the power of advocacy, but will the Government speak out?

In conclusion, I have certainly dealt with some bad employers throughout my life, but I have also dealt with many good employers, and I celebrate how they treat their employees. This country is seeing the growth of insecure employment, under which millions of people endure a difficult life, so the Government should not only bring forward the Taylor proposals, which do not actually go far enough, but speak out. When it comes to the response to today’s debate and to what the Government have to say to Amazon, I am not holding my breath, but I hope the Government say, “Amazon, you need to up your game in terms of your working practices and agree to sit down with the GMB and sort the undoubted and deep-seated problems within the company.”

Spending Round 2019

Edward Leigh Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

What I can confirm to the right hon. Lady, and I hope she will find this helpful, is that for the Home Office my starting point was to roll over all funding in real terms that it had received this year, so that was the baseline, which had not been done before. I added to that the extra costs that would be required, with the major cost being for the extra officers. So the real-terms increase in the Home Office budget is £800 million. That is an increase in the real-terms growth rate of 6.3%, the biggest real-terms increase in the Home Office budget in 15 years.

[Sir Edward Leigh (Gainsborough) (Con)]

As we saw on the Public Accounts Committee during the Labour years, if there are rapid increases in public spending, particularly on health, they are invariably accompanied by increasing levels of unproductivity, so how is the Chancellor going to maintain his laser-like focus on economy and efficiency and ensure that a greater proportion of our spending is not sucked into administration, away from the frontline? In other words, tax and spend on its own does not work.

[Sajid Javid]

My right hon. Friend makes an important point. He talked about it in the context of health, but we could apply it to the spending of many other Departments. He is absolutely right that as we allocate this new spending, especially if it is multi-year funding amounting to billions of pounds, it is imperative that we make sure every penny is spent wisely. That work is done jointly with the Department, but also in a unit in the Treasury. We will have a laser-like focus on efficiency, and if we need to take action we will not hesitate.

Breathing Space Scheme

Edward Leigh Excerpts

Wednesday 19th June 2019 Commons Chamber

[John Glen]

The hon. Lady raises two points. I was not familiar with the Debt Hacker app, but I will seek it out because it sounds like a very worthwhile initiative. I respectfully say to her that in the fourth quarter of 2018 debt as a percentage of household income was 139%, whereas 10 years previously it was 160%. I recognise that households are experiencing strain, but it is not quite as dire as she makes out.

[Sir Edward Leigh (Gainsborough) (Con)]

Loan sharks are the unacceptable face of capitalism, but this is a complex area and the Government should proceed with caution. Confidence in the market, and in capitalism more generally, depends crucially on the payment of debt. I very much hope that the Government will consult widely with the industry, particularly with credit card companies, and consider piloting, because there are unintended consequences of Governments, in their dying days, trying to virtue-signal and regulate more but actually doing more damage than good. Therefore, please may we have piloting and widespread consultation?

[John Glen]

I am grateful to my right hon. Friend for his observations. This is not virtue-signalling; it is delivering on a manifesto commitment with the sectors involved, carefully and methodically. We rightly have a robust regulator with powers to deal with exploitative credit providers. As I indicated earlier, we are not complacent. I observe his concerns about ensuring that we implement this appropriately and with the wide assent of the industry.