Oral Answers to Questions

Flick Drummond Excerpts

Tuesday 7th May 2024 Commons Chamber

[Gareth Davies]

It is right to acknowledge that funding has gone in. I completely appreciate the specific challenges that coastal communities face, but it is important to look at the package of measures to level up—not just funding such as the shared prosperity fund, levelling-up fund and towns fund, but the 13 devolution deals, 13 investment zones and 12 freeports. These are all packages and measures that will help areas such as my hon. Friend’s, but I will always keep his area in mind.

[Mrs Flick Drummond (Meon Valley) (Con)]

11. What fiscal steps he is taking to support households with the cost of living.

[Nadia Whittome (Nottingham East) (Lab)]

18. What fiscal steps he is taking to support households with increases in the cost of living.

[The Chancellor of the Exchequer (Jeremy Hunt)]

Over the last two years, cost of living support has totalled £96 billion, or an average of £3,400 per household. As a result, living standards, which were predicted to fall 2% last year, rose by nearly 1%, and we are on track to reach pre-pandemic living standards two years early.

[Mrs Drummond]

I welcome the support that the Government have provided throughout covid and the recent energy crisis for my constituents in Meon Valley—I thank the Government. It has made a huge difference to people’s domestic budgets, but now inflation is falling and the economy is improving, can we look forward to the Government’s continued support with a range of fiscal steps, including cutting taxes?

[Jeremy Hunt]

We can absolutely do that. I thank my hon. Friend for pointing out that the biggest single thing we can do to help people with cost of living pressures is to bring down inflation. That seems to be something that escaped the shadow Chancellor this morning, when she said it was not a big deal to get inflation down to its target. It is a very big deal for families facing a cost of living crisis, and she needs to know that inflation falls by design, not by accident.

Oral Answers to Questions

Flick Drummond Excerpts

Tuesday 19th March 2024 Commons Chamber

[Paul Holmes (Eastleigh) (Con)]

16. What fiscal steps his Department is taking to support small businesses.

[Mrs Flick Drummond (Meon Valley) (Con)]

18. What fiscal steps his Department is taking to support small businesses.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

Small businesses drive our economy and we support them to thrive using levers across Government, whether that is through our small business rate relief, by increasing the VAT registration threshold, by providing reliefs such as the annual investment allowance or through various programmes offered by the British Business Bank.

--- Later in debate ---

[Gareth Davies]

My hon. Friend is right. Business rate relief is a great way to support small businesses in Eastleigh and across the country. Our small business rate relief means that one third of all properties in England already pay no business rates at all. We have frozen the small business multiplier, protecting more than 1 million properties from a multiplier increase. As I was just saying, we are supporting high streets with our retail, hospitality and leisure relief.

[Mrs Drummond]

Just after the Budget, I met some of the small businesses in my constituency at the Flower Pots in Cheriton. While they were pleased with some of the Budget, they talked about improving productivity and growth by raising the VAT threshold far beyond £90,000, and possibly to £250,000. They felt that that would incentivise sole traders and small businesses to expand and work longer hours. They feel at present that growth is restricted because of the level of the VAT threshold. Has the Chancellor given any thought to increasing the threshold to improve productivity?

[Gareth Davies]

My hon. Friend is right to engage in the way that she is with her small businesses. We believe that the £90,000 threshold, which has just been increased, strikes the right balance between managing the public finances and supporting small businesses. I encourage her to look at the wider package of support that the Government are providing for small businesses, not least the business rate relief that I was just talking about.

Wine Duty

Flick Drummond Excerpts

Tuesday 5th March 2024 Westminster Hall

[Will Quince]

My hon. Friend is right to raise that point on behalf of the small wine supplier he represents in York. Of course, this change will have a massive impact. When Majestic originally brought this matter to my attention, it did so not just on its own behalf, but on behalf of the thousands of wine organisations and companies across the country, ranging from one-person bands through to small and medium-sized enterprises, all of which will bear the administrative burden of this cost.

I want to reiterate one point. If this easement ends—I hope it is “if”, as I very much hope the Minister listens and it will not end—there will be 30 different payable amounts for wine across the 11.5% to 14.5% ABV range. Prices will range from £2.45 to £3.10 per bottle. The practical arrangements that would need to be made as a result of this change are countless, including the reality that two wines from the same independent vineyard in France, say, would have to be labelled differently.

[Mrs Flick Drummond (Meon Valley) (Con)]

Other right hon. and hon. Members have mentioned wine merchants, but what we have so far not discussed are the wine growers in the UK. I had better declare an interest, being the chair of all-party parliamentary group for wine of Great Britain. Wine production is one of the fastest growing agriculture sectors, employing about 2,300 people, with a predicted 50% growth in jobs by 2025. Last year, 2023, was an absolutely vintage year, with an estimated 25 million bottles. This easement affects not just wine merchants, but a very important and fast-growing agriculture sector.

[Will Quince]

My hon. Friend is absolutely right. It is not just about wine merchants, of course; it is also about the growers. It is a boom industry in this country, and not just for tourism, as the hon. Member for Strangford (Jim Shannon) said, but because English wine, and wine from across our four nations, is being consumed far more frequently than ever before. It is something that we should encourage as a country. I know the Chancellor is keen, in particular, to encourage sparkling wine.

I want to reiterate a point made by my hon. Friend the Member for York Outer (Julian Sturdy) and my right hon. Friend the Member for Witham (Priti Patel). I am sorry to labour this point, but it is important. The abolition of the easement would introduce massive ongoing red tape costs that concern supermarkets and large retailers, which, of course, we are concerned about. However, what I am more concerned about, as my right hon. and hon. Friends have eloquently pointed out, is the disproportionate costs for smaller wine businesses in constituencies across this country.

As I have said, wine has far more stock keeping units, or SKUs, than other alcohol categories. It is estimated that there are in excess of 100,000 wine SKUs on the UK market. A specialist SME wine retailer, for example, will carry more than 2,000 SKUs at any one time, while larger wine retailers may carry up to 10,000 SKUs. If the easement ends, the duty will have to be calculated individually for each SKU; this will have to be done on an annual basis, as alcoholic strength can vary between vintages.

Oral Answers to Questions

Flick Drummond Excerpts

Tuesday 6th February 2024 Commons Chamber

[Nigel Huddleston]

The hon. Gentleman knows that the IMF has forecast us greater growth than France, Italy and Germany over the next few years. If he is so enthusiastic about supporting growth, including helping businesses across the United Kingdom, perhaps Scottish National party Members could have joined us in the voting Lobby last night instead of voting against, for example, full expensing and investment in research and development. They voted against that—how on earth is that in the interests of their constituents?

[Mrs Flick Drummond (Meon Valley) (Con)]

3. What fiscal steps his Department is taking to help increase the level of business investment.

[The Chancellor of the Exchequer (Jeremy Hunt)]

Mr Speaker, may I add my comments to yours yesterday about His Majesty the King? I wish him and his family well, as well as saluting his courage in being so open about his condition.

At the autumn statement last year, I announced an ambitious growth package, which will boost business investment by about £20 billion a year. We are making full expensing permanent, which the CBI welcomed as a game changer that will fire up the British economy.

[Mrs Drummond]

I also welcome those measures. Business rates are among the biggest issues for small businesses in Meon Valley, so I welcome the Chancellor’s £4.6 billion package of support in the autumn statement. However, following covid, there are a number of empty offices where landlords are still having to pay business rates. Does the Chancellor have any measures to support those who are struggling with a lack of income to pay business rates?

[Jeremy Hunt]

My hon. Friend is absolutely right to highlight the pressures caused by business rates. That was why in the autumn statement we introduced the 75% discount for retail, hospitality and leisure. All I would say is that the reason we were able to introduce those large cuts in business rates was that we did not embark on a spending spree of £28 billion a year, which is Labour’s policy on Mondays, Wednesdays and Fridays, but not apparently on Tuesdays, Thursdays and Saturdays.

Oral Answers to Questions

Flick Drummond Excerpts

Tuesday 19th December 2023 Commons Chamber

[Bim Afolami]

As the hon. Lady knows, the industry leads the roll-out of banking hubs. We are supporting it—I say this again—to speed that up as much as possible. I have not seen the Labour pledge—I suspect that I will not support it—but it is important that the industry hears the views of constituents and Members from across the House and that we speed up the roll-out of banking hubs in communities that need them.

[Mrs Flick Drummond (Meon Valley) (Con)]

8. What steps his Department is taking to incentivise pension schemes to invest in the UK.

[The Economic Secretary to the Treasury (Bim Afolami)]

At the autumn statement, we set out a series of measures to improve pension saver returns, increase opportunities for investment and boost the UK’s capital markets and high-growth companies.

[Mrs Drummond]

Merry Christmas, Mr Speaker, and to all those in the House. The UK’s pension funds lag behind their counterparts in the USA, Scandinavia and Australia for investing in technology firms. Can my hon. Friend continue his work on reforms and ensure that more pension fund investment stays in the UK, to boost our tech sector?

[Bim Afolami]

Under the industry-led Mansion House compact, 11 of the UK’s largest defined contribution pension schemes have signed up to the objective of allocating at least 5% of their funds to unlisted equities by 2030. We believe that could unlock £50 billion of investment in high-growth companies and should help increase returns to savers.

IMF Economic Outlook

Flick Drummond Excerpts

Tuesday 31st January 2023 Commons Chamber

[James Cartlidge]

It is very far from a unique mess when 14 European Union countries have a higher rate of inflation than we do. That is why we are focused on reducing inflation, which, to be clear, will take some difficult decisions. It would help in that regard if Labour Members, instead of living in a parallel universe where their leadership and their shadow Chancellor talk about sound money but not a single one of them even ventures to understand it, started showing what difficult decisions they would actually take. That is how you run the country.

[Mrs Flick Drummond (Meon Valley) (Con)]

Getting the economy moving forward more quickly will depend on supporting investment in research and development. Will my hon. Friend look at ensuring that R&D continues to be incentivised as a means to boosting our growth?

[James Cartlidge]

My hon. Friend is absolutely right. I spoke about high-growth sectors; one of the ways those sectors drive up sustainable growth is through R&D. That is incredibly important. The Government are on track to spend £20 billion in public expenditure by 2024-25. We are also committed to a competitive regime of R&D tax credits to ensure that the private sector does its part to enable the highest possible level of R&D so that we can deliver investment and research into the industries of the future.

Economic Update

Flick Drummond Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

I understand why the hon. Gentleman has asked the question. I believe that wealthier people should pay more as we go through a difficult period, but the mechanism of the cap, with which we were doing that, was not working. We will get more money out of the pockets of those rich bankers through what we are going to do now.

[Mrs Flick Drummond (Meon Valley) (Con)]

Many of our more advanced manufacturing businesses are in the defence sector, and they welcome our commitment to growing defence spending. They have no problem with paying more corporation tax, as long as there are incentives to support their cutting-edge research and development. Will my right hon. Friend commit to ensuring that those incentives are available across all industries?

[Jeremy Hunt]

That is a very important point. We have an issue in that we need our companies to invest more in R&D. We have a fantastic opportunity to be the world’s next silicon valley, with all the potential of our great universities and incredible levels of innovation, but I absolutely think there is more that we can do, and I will bear in mind my hon. Friend’s comments.

Alcohol Taxation

Flick Drummond Excerpts

Thursday 7th July 2022 Commons Chamber

[Mrs Flick Drummond (Meon Valley) (Con)]

I congratulate my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this important debate.

It is a pleasure to speak in this debate on the taxation of alcohol and the Government review, and I should first declare that I am the chair of the all-party group on wine of Great Britain. I am also fortunate to have some fantastic producers in my Meon Valley constituency, who will have an interest in these policies, including brewers of beer, cider makers and, most importantly, vineyards. I have kept in close touch with them throughout the process of the consultations and review, and the points I make here are heavily influenced by their comments to me over many months.

In Britain we are increasingly a maker and exporter of wine. Our tastes as consumers, technological advances, and—we must face it—climate change have driven change and growth in the industry. I very much welcome the removal of the supertax on English sparkling wine. We have some brilliant vineyards around the UK. Hambledon Vineyard in my constituency is at the forefront with its award-winning wines. This will help it develop the market at home alongside its continuing success in the export market.

Vineyards face high start-up costs, and in the case of sparkling winemakers up to a decade of careful work before they have a wine they can market. I was pleased that the vineyards of Sussex recently achieved protected designation of origin status and hope that their counterparts in Hampshire and other counties will be able to achieve a similar designation. I will do whatever I can to help them get that recognition of their excellence.

In view of the challenges that winemakers and merchants face, we must look again at the proposals on wine duty. I appreciate the desire to simplify what has become a complex regime that dates from a time when we neither consumed as wide a variety of wines nor had so many made in Britain. However, the current proposals would increase the price of around 70% of wines, which would affect many small and medium-sized enterprises in the wine trade. It would also create a regime of 27 different bands, as we have heard, and the burden that that would impose on independent wine importers and merchants is a mountain of red tape, which we are generally trying to reduce.

The Wine and Spirit Trade Association has put a range of proposals on wine and spirits to the Treasury, including bringing small producers of wine and spirits into the small producers scheme that is available to brewers and cider makers. I favour a solution with duty based on 12% as the midpoint of the 8.5% to 15% range, which would cover three quarters of all wine. Fortified wines have a midpoint of 18%, which would provide a logical basis for another band. That would also tie in with the global market, which regulates all wines between 8% and 15% as just one product.

Turning to brewers, I ask the Treasury to look again at the Make it 20 campaign, led by the Society of Independent Brewers. The introduction of the draught duty rate has been welcomed across the industry and by CAMRA. Supporting smaller brewers has been a long-term aim of the Government but, in order to get the best out of the draught duty rate, we need to reduce the container size to which it applies to 20 litres. The 20-litre and 30-litre containers are the mainstay of supply for small brewers and, with the limit at 40 litres, there is a good chance that many would miss out.

When we look at the health of the pub sector, consumers want to see smaller brewers represented. YouGov recently surveyed pub drinkers and found that more than three quarters of respondents cited that as an important factor.

I will turn to cider, mentioned by my hon. Friend the Member for Weston-super-Mare (John Penrose), which is the area of business that has benefited most from Government support in recent years. I urge the Government to act at that same level for our winemakers and brewers. Cider is a great British success story. Having talked to cider makers such as Meon Valley Cider, I look forward to them going from strength to strength.

Pubs faced a tough time during the pandemic. I argued strongly for restrictions on them to be lifted as quickly as possible and I wanted them to be able to continue off-sales while they were closed for on-sales. The sector initially recovered strongly during the pandemic, thanks to the Chancellor’s eat out to help out scheme. However, even with the good weather that we are having this summer, it is clear that pubs and restaurants are still operating below pre-pandemic levels—a figure of minus 20% is often mentioned—and that leaves a potential black hole in their margins, which are tight at the best of times, with some fairly rapacious major businesses in the supply chain. Macro brewers and pubcos have not been good friends to the pub trade, and that is why it is vital that we support our smaller producers. The Treasury has generally been constructive throughout the process, and I am confident that my colleagues will continue to ensure that we get the right policies in place to help our small brewers, cider makers and, in particular, vineyards.

Oral Answers to Questions

Flick Drummond Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Rishi Sunak]

Obviously it would not be right for me to comment on the individual circumstances of any business, but HMRC’s time to pay service has supported tens of thousands of businesses through the crisis with flexible repayment periods. Similarly, the bounce back loan scheme introduced by my hon. Friend the Economic Secretary comes with a pay-as-you-go option to ensure that businesses can settle on a payment plan and stretch out repayment in a way that suits their cash flow.

[Mrs Flick Drummond (Meon Valley) (Con)]

My pubs and brewers are pleased with the reduction in beer duty, but may we have clarification on keg size, as my small brewers ship their beer in different sizes, including 20-litre pins? May we also have an indication of when the changes to the small brewers relief will be announced, ideally removing the 2,000-hectolitre limit and the cliff-edge at the 5,000-hectolitre limit?

[Helen Whately]

We are delighted that we are introducing the draft relief to support the on trade for people purchasing drinks in pubs and hospitality venues. We will consult on the details, including keg size. We will also bring forward the technical changes to small brewers relief, which my hon. Friend asks about.

Finance (No. 2) Bill

Flick Drummond Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

Finally, our new clauses 12 and 22 seek to get more evidence on the impact of changes to capital gains tax. There is very little done to drill into the impact of decisions made through the Finance Bill. Again, evidence sessions beforehand might be useful, but assessing the effectiveness afterwards—particularly the impact in different parts of these islands and on the people who live here—is vital. These assessments are not an add-on or a nice-to-have; they are essential. If the UK Government truly believe their measures to be fair, they should have no fear of that evidence.

[Mrs Flick Drummond (Meon Valley) (Con) [V]]

Like all Conservative Governments, this is one who believe that people should be encouraged to create wealth and invest it wisely without undue interference from the state, bureaucracy or taxation for taxation’s sake. The fundamentals of our economy were strong nationally and in the Meon Valley as we headed into the coronavirus pandemic, and I am confident enough that we are well set to emerge from it and carry on with good growth. Although it is not the topic of this segment of the debate, I must welcome the announcement in the Budget of the Solent freeport, which will bring jobs and investment to the whole region, which includes my constituency.

I want to speak to clauses 5 and 28. The pandemic has created a major challenge for state finances, and I recognise that the Treasury must cover the cost of the measures it has taken to support jobs and society. The two long-running strands of policy covered in these clauses are the reform of personal income tax allowances and the lifetime allowance in pension fund accrual.

The commitment to a £12,500 personal allowance featured in the Conservative party’s 2015 election manifesto, and I am pleased that we are achieving it a year early. Since 2010, the personal allowance has grown more quickly than average earnings, and a huge number of workers have benefited. In announcing a freeze between now and 2026, we will see some of that eroded—around £8 billion of income flowing back into the Treasury by 2025-26—and I hope that Ministers will ensure that we direct the benefits of recovery at the groups on the lowest incomes, whom we have done so much to help in government already. Needless to say, I will not be supporting the Opposition amendment to clause 5.

Another area where I hope Ministers can keep an open mind is simplification of our pensions system in the future, but today I would like to concentrate on the lifetime allowance in clause 28. As many other Members will have seen in their postbag, this has been affecting doctors in the NHS, senior teachers and others in the public sector who have taken or considered early retirement to avoid breaching the cap. As well as creating a situation where the Treasury does not see some of its forecast tax take coming in, it means that in some cases, people have gone back to work as contractors or locums, sometimes filling gaps that have been created by this policy on pensions.

The intention behind the lifetime allowance when it was introduced in 2006 was to simplify a large number of regimes. However, freezing it at just over £1 million without the tie to the consumer prices index means that we are seeing some complex reworkings of remuneration schemes, and we will see more unintended consequences as growing numbers of people look to find ways to avoid the cap. The British Medical Association’s survey of GPs indicated that almost half of doctors would consider early retirement to protect their earnings after retirement. While the Budget forecast states that by 2025-26 there will be an additional £300 million of revenue, it does not account for other costs that the policy could contribute to.

Pension policy generally encourages people to forego current consumption, so that they can enjoy a higher standard of living later in life. However, the trade-off here is different, and we risk public services having to cope without staff or pay for them because they are contractors or locums if we carry on eroding the value of the lifetime allowance. I hope the Treasury will look creatively at how we can balance ensuring that people on higher incomes pay their rightful share of tax with the need to ensure that skilled and experienced workers continue to contribute to the wider public good throughout their working lives.

[Stephen Timms (East Ham) (Lab) [V]]

Clause 31 relates to the decision to cut the £20 a week uplift in universal credit and working tax credit in six months. I want to focus my brief remarks on that decision, highlighted by my hon. Friend the Member for Ealing North (James Murray), because it will be key in the impact analyses in new clause 23 and amendment 15. A Work and Pensions Committee report in February drew attention to the Joseph Rowntree Foundation’s finding that withdrawing the temporary increase

“will risk sweeping 700,000 more people, including 300,000 more children, into poverty”,

and that

“500,000 more people could end up in deep poverty (more than 50% below the poverty line).”

It goes on to explain that

“people who were already more likely to be in poverty were most affected by the economic storm caused by COVID-19: workers in low-wage sectors or part-time jobs, people living in areas with higher rates of deprivation, families with children, disabled people, or those from BAME backgrounds…around 60% of the families who lose out being in the bottom 30% of the income distribution.”

It goes on to say that

“60% of all single parent families in the UK will experience this overnight cut to their incomes”

when the £20 a week is removed.

Under the Government’s plans, the cut will happen just as unemployment is forecast to peak. The last time anything like this happened in such circumstances was 90 years ago under the national Government of Ramsay MacDonald. It will devastate the finances of a large number of struggling families. Ministers will find it extremely hard to justify, so I particularly welcome today’s reported call by more than 100 Conservative MPs to make the £20 a week uplift permanent.

The Resolution Foundation’s “Living Standards Outlook 2021” in January said that rising unemployment and removing the £20 uplift would push 800,000 adults and 400,000 children into relative poverty—the biggest annual poverty rise since the 1980s. A Northern Ireland woman told the Joseph Rowntree Foundation:

“The £20 uplift to Universal Credit has meant I have just about managed to keep my head just above water. I’m living day to day trying to pay my bills and keep my house warm for my child. Taking this away now or in six months means I will be drowning in debt.”

A London woman said:

“We’ve relied heavily on food banks…That £20 is often the difference between light and heat or no light and heat. If you don’t have gas, you can’t cook.”

A Leeds man said:

“I am aware of the extra—if it wasn’t for that I don’t know how I would survive. Living on Universal Credit is hard; it’s extremely hard. It is literally living day to day and working out where my next food is coming from.”

Twenty pounds a week should not be taken away from people like that just as unemployment peaks. Iain Porter of Joseph Rowntree told the Select Committee that the current benefit level without the £20 uplift is

“at the lowest level since around 1990 in real terms”,

and that as a proportion of average earnings, it is the lowest ever. Inflicting that just as unemployment is peaking is indefensible.

The principal policy manager at Citizens Advice told the Select Committee:

“At the very least, if the uplift is not made permanent, we think it needs to be in place for at least 12 months while we go through the tricky part of recovery from this crisis.”

I hope Ministers will reflect and, having done so, decide after all not to make this cut in September.