Oral Answers to Questions

Gareth Bacon Excerpts

Tuesday 9th May 2023 Commons Chamber

[John Glen]

In previous answers, I have set out a number of the interventions the Government have taken to help the most vulnerable. I have mentioned the household support fund, the benefits that accrue to all those who are on means-tested benefits, particularly pensioner households, and those who are eligible for disability benefit. As I have also said, the money that the Government have made available is designed to focus on those who are most in need, and we will continue to look out for the most vulnerable through this difficult time.

[Gareth Bacon (Orpington) (Con)]

T3.   Does my right hon. Friend agree that fiscal responsibility is vital if we are to cut inflation and grow the economy? Does he also agree that the Labour party’s £90 billion of unfunded spending commitments would put all of that at risk, with higher taxes and more borrowing the inevitable result?

[John Glen]

I could not agree more. Responsible public spending is at the core of getting our economy into a state where it can grow, and the £90 billion of unfunded spending pledges made by Opposition Members will be scrutinised very carefully, I am sure, by many in the months ahead.

Finance (No. 2) Bill

Gareth Bacon Excerpts

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

I am happy to speak in support of clauses 80 to 91 and also new clauses 26 and 27.

Some of the measures in this cluster of schedules and clauses do not apply to Scotland, where the land buildings transaction tax applies instead following the devolution of the stamp duty land tax. That said, I am sure that the extension of the temporary increase to the stamp duty land tax holiday with no rate band for residential property in England and Northern Ireland that will be given effect by clause 87 will be very much welcomed by those who stand to benefit from it. The increased rates for non-resident purchasers given effect by clause 88 and schedule 16 is something that is long overdue. I am also happy to support the relief from annual tax on enveloped dwellings for certain kinds of properties given effect by clauses 89 to 90 alongside schedule 17, as well as the provisions being made under clause 91 for repayment to co-operatives that are also eligible.

I encourage Ministers to look positively on the reforms of property taxation that have taken place in Scotland since stamp duty was devolved. LBTT replaced stamp duty on 1 April 2015. It is very much a progressive tax in that the rates increase more than proportionately in line with the price of the property to which it has been applied. That has a very valuable role in the housing market with regard to easing house price inflation and, at the same time, exempting nearly 80% of first-time buyers from paying any kind of property tax on their first purchase of a home. My party is committed to maintaining current rates and bands within that tax regime while undertaking a review of the effectiveness of the additional allowance supplement that has also been put in place. It is in that spirit of constant review that we find much to welcome in new clauses 26 and 27, which we consider will merit the support of the Committee.

[Gareth Bacon (Orpington) (Con)]

As the Committee is aware, this year’s Finance Bill is presented at an unprecedented time in British peacetime history. The pandemic has hit the economy very hard, and the Government have not stood idly by over the past year. Extensive levels of economic interventions have been introduced to protect jobs, businesses and our people in order to help them through this pandemic. The impact of this on the state of the public finances has been drastic, with the budget deficit rising to £355 million in 2020-21 and our national debt rising to £2 trillion.

That is of course not a sustainable position, but, as we know, the tide is turning. The Government’s excellent vaccine planning, procurement and roll-out means that we can now see the end in sight. The economy and society have begun to open up, but we are not there yet. The Budget introduced by my right hon. Friend the Chancellor of the Exchequer in March therefore had to achieve a very delicate balance in maintaining high levels of economic support during the continuing global health crisis while also laying the groundwork to repair the public finances and support our economic recovery.

The part of our economy that is the housing market comes in both property sales and construction. I will address my remarks primarily to the decision to extend the temporary stamp duty land tax holiday. As my right hon. Friend the Minister said, when the pandemic struck and the first lockdown began in March last year, the housing market experienced a sharp decline in sales, falling by 43% in the second quarter of the financial year compared with the same period of the previous year. Historically, a sharp drop in transactions, if left unchecked, has led to a fall in the level of house building. The Government’s action in introducing revised thresholds at the lower end of the market, abolishing stamp duty on the first £500,000 of the purchase price and setting the level at 5% for the next £425,000, has greatly alleviated the problem. In my constituency of Orpington, the average house price is currently £528,000, and the Government’s intervention has reduced the level of stamp duty on an average transaction by 91%, leading directly to a strong recovery in the local housing market.

That recovery is also reflected in the picture nationally. According to HMRC figures, in the third quarter of the most recent financial year, housing sales increased exponentially on the previous quarter, and in the fourth quarter transactions were at their highest level since 2007. In the short term, that is extremely welcome because the Government have achieved their objective of stabilising the housing market and maintaining confidence in the construction market. By introducing an extension of the initial stamp duty holiday, followed by a tapering of relief, the Government have taken steps both to remove the danger of a cliff edge that could have reversed all the good work done in the latter half of last year and to prevent an unsustainable long-term boom in house prices. I believe that is the right approach at this juncture.

In the longer term, though, I urge the Government to take a long, hard look at the structure of stamp duty. Stamp duty thresholds have not kept pace with the rise in house prices, meaning that stamp duty has become a significant barrier to purchasing. That is particularly true in places such as Orpington, and even more so in other areas of south-east England in particular, where housing shortages are most acute. In the light of the strong link between house construction and housing transactions, coupled with the Government’s desire to ramp up house building and level up the country, a review of the wider stamp duty regime would bear consideration. However, that is an argument for another day, once the battle with the pandemic is finally won.

For the moment, I believe that the extension of the stamp duty until the end of June is the right move, and its tapering from the end of June until October is both proportionate and unwelcome. I will support the Government on the issue this evening.

[Geraint Davies (Swansea West) (Lab/Co-op) [V]]

The stamp duty holiday tells us all we need to know about the Government’s priorities. Amid an awful pandemic that has seen the highest death rates in the world, when something like 4 million people have been infected and many of them will face long covid, and when something like 7.6 million people are in hunger, we need investment in the wider economy to get us moving again. In fact, with the stamp duty holiday the Government have spent much of £5 billion, over two years, on second homes. That £5 billion could have paid for 5% increases in nurses’ salaries over 15 years, given that a 5% increase would cost £330 million after allowing for the recovery of the tax on the money given in the first place.

In any case, it is not clear that the stamp duty holiday was at all necessary to stabilise the housing market, because immediately as the pandemic began to hit, the Bank of England reduced interests rates and in so doing reduced mortgage costs, supported prices and increased landlords’ margins at a time when tenants were still required to pay their rents. Given that the Bank of England had already taken action to support the market, the stamp duty holiday simply increased house prices by something like 7% between July and December 2020. That is not the right priority, and it is certainly not the right priority to invest money in second homes for people who are basically making money out of that investment from taxpayers and boosting the prices that first-time buyers face. That is why in Wales, where we have a Labour Government, second homes were not included in the stamp duty holiday, which was quite right. I therefore support amendment 81. Indeed, in Wales, we have made provision so that there are no rough sleepers during this pandemic, whereas in England, of course, there are.

The stamp duty holiday will mean that first-time buyers will find it more difficult to buy a house because deposits will need to be bigger. We are moving to a situation in which young people who want to buy a house will almost always have to depend on their parents to do so, so the distribution of the opportunity to buy a house in Britain is getting worse and worse.

In a nutshell, this Budget should have invested in all our opportunities to raise productivity, increase the number of jobs, focus on the future and keep people healthy. Instead, it has been seen as an opportunity to focus on widening inequality unnecessarily. I very much support the Labour party’s amendments.

Oral Answers to Questions

Gareth Bacon Excerpts

Tuesday 1st December 2020 Commons Chamber

[Jesse Norman]

We certainly, of course, share the view that it is important—very important—to protect the low-paid. The purpose of supporting them through the national living wage was precisely in order to raise their incomes, and that increase is worth some £345 a year for a full-time worker. However, it is also important to say that the Government remain fully committed to their longer-term target for the national living wage, which will make an enormous contribution itself towards ending low pay in the UK, and that is before, as I have mentioned, the support we are giving to 2.1 million public sector workers earning less than £24,000 a year.

[Gareth Bacon (Orpington) (Con)]

How many and what proportion of people who have had settlement discussions with HMRC on the loan charge have reached a settlement.

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

About 11,000 employers and individuals settled their use of disguised remuneration schemes between Budget 2016 and 31 March 2020. As I indicated earlier, HMRC is currently preparing a report to Parliament on the implementation of the recommendations of the independent loan charge review, and that is due imminently. The report will include figures up to the 30 September 2020 deadline for taxpayers who settled their use of disguised remuneration tax avoidance schemes.

[Gareth Bacon]

I thank my right hon. Friend for his answer. In circumstances where process failings, errors and delays on the part of HMRC effectively denied people the possibility of settling their claims by 30 September, will he commit to offering an extended settlement period to allow individuals the chance to settle their debts?

[Jesse Norman]

As my hon. Friend will know, the settlement date has already been extended by eight months. That was a very important recognition of the impact of covid and has given individuals the chance to settle their schemes. He should also be aware that we do not merely seek to support those who are settling; we are also taking robust action against promoters and other enablers of tax avoidance schemes.

Black History Month

Gareth Bacon Excerpts

Tuesday 20th October 2020 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

As has become traditional in opening, I congratulate the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) and those who sponsored her application on securing today’s debate. As a member of the Backbench Business Committee, I commend her on the way in which she put her application together and pitched it. It was not hard for us to agree to the debate—we did so unanimously—and to fast-track it so that it could take place in the Chamber in October.

The hon. Lady was entirely right to say that we should commemorate the contributions and achievements of black Britons in our country’s history. Those contributions are many and varied in the arts, entertainment, culture, politics and current affairs. I would like to discuss black British contributions to the world of sport. That is not to trivialise those contributions at all. Sport is often a cultural leader—where sport goes, society often follows. Sport touches a mass audience in a way that other activities cannot match.

I admit that from an early age I have been a sportaholic. Growing up as a child in the late 1970s and 1980s, black British role models were plentiful. Daley Thompson and Tessa Sanderson, for example, were household names for their heroics in the Olympic games in the early 1980s, as was Frank Bruno, for his achievements in and out of the boxing ring. Chris Oti was an electric presence on the wing of the England rugby union team, and Ellery Hanley and Martin Offiah were even more dominant in rugby league. As a fanatical—and somewhat disappointed, these days—Manchester United fan, I idolised the exploits of players such as Viv Anderson, Remi Moses, Paul McGrath and Danny Wallace.

More recently, on 11 August 2012, I had the pleasure of being with my family among 80,000 people in Hyde Park, watching on a big screen as Mo Farah won the 5,000 metres to complete an historic Olympic double. Seeing tens of thousands of people of all backgrounds cheering themselves hoarse and jumping for joy to celebrate the awesome achievement of a man who emigrated to this country from war-torn Somalia when he was a child was one of the most unifying things that I have ever witnessed. The sight of him draped in the Union flag during his lap of honour was an especially poignant sight.

Sport is one field among many in which black Britons have made great contributions to our country. That is why Black History Month is so important, but it is equally important that it is not hijacked by those with a political agenda who wish to sow division. There have recently been disturbing noises in certain quarters from political activists who wish to attack British history, British tradition, British culture and British institutions. For example, recently attempts have been made to sully the reputations of towering figures in British history because the views of their time do not necessarily conform to today’s values.

It is certainly true that history can be debated and can be interpreted in different ways, but it would be wholly wrong to attempt to rewrite our history to indoctrinate children with anti-British propaganda and to impose an ideological world view. These moves are dangerous; they will do nothing for inclusiveness. Instead, they will foster bitterness and resentment on all sides.

We must not go down this route; instead, as my hon. Friend the Member for Windsor (Adam Afriyie) said at the beginning of this debate, let us celebrate our commonality. Let us have more Mo Farah moments. Let us use Black History Month to celebrate the achievement of black Britons and bring people together across the country, not force them apart.

Economic Update

Gareth Bacon Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

With regard to nurseries, for example, we have already included them in the business rates holidays for this year, and also ensured that the funding that they receive from Government remains constant throughout this crisis. On top of that, they have access to our other areas of support—bounce back loans and others—but of course we keep everything under review.

[Gareth Bacon (Orpington) (Con)]

My right hon. Friend’s support for business and workers has safeguarded the livelihoods of thousands of my constituents in Orpington. Now more than ever, it is vital that we stick to sound economic principles to help our nation’s recovery. Will my right hon. Friend therefore reject the Leader of the Opposition’s hard-left call for a raid on people’s hard-won homes and savings in the form of a new wealth tax, and offer reassurance that the Government will continue to focus instead on policies aimed at creating wealth, rather than simply plundering it?

[Rishi Sunak]

My hon. Friend is absolutely right: at this stage, that is absolutely not the policy that we should be pursuing. What we should be pursuing is policies that will get people back to work, encourage and incentivise businesses to take on new employees and new apprenticeships, and ultimately—he is right—create the wealth that funds our public services.

Oral Answers to Questions

Gareth Bacon Excerpts

Tuesday 7th July 2020 Commons Chamber

[Steve Barclay]

My hon. Friend is right to identify the benefit of pooling through the UK approach, and the specific issues relating to the oil and gas industry. That is why industry leaders met the Department for Business, Energy and Industrial Strategy on 11 June. Work is ongoing, particularly in relation to what support can be provided to the sector. We are very mindful of its significance to the economy of Scotland.

[Gareth Bacon (Orpington) (Con)]

What fiscal steps he is taking to support local authorities during the covid-19 outbreak.

[The Chief Secretary to the Treasury (Steve Barclay)]

Last week, the Government announced a comprehensive package to support councils in responding to the pressures caused by covid-19. We have now provided more than £3.7 billion of additional grant funding for councils, and announced a major new scheme to reimburse them for their lost income.

[Gareth Bacon]

Fears have been expressed that the Government will fully bail out financially poorly managed local authorities, while better managed local authorities, such as the London Borough of Bromley, may have to meet covid-19 shortfalls through their reserves. Will my right hon. Friend offer reassurances on that point? If covid-19 funding shortfalls remain, will he consider allowing a capitalisation directive to enable councils to fund one-off shortfalls through capital receipts or borrowing?

[Steve Barclay]

We have always taken the approach that borrowing is allowed for infrastructure and capital projects, but not day-to-day revenue. That policy will continue. At the same time, all councils have received support, and £16 million has been allocated to Bromley. It is right that the support addresses councils’ varied needs, and that is very much the approach that we have taken.

Tax Avoidance and Evasion

Gareth Bacon Excerpts

Tuesday 25th February 2020 Commons Chamber

[Mr Gareth Bacon (Orpington) (Con)]

There have been some very thoughtful speeches on both sides of the House today, but I must open by particularly commending the excellent maiden speeches from my hon. Friends the Members for West Bromwich East (Nicola Richards) and for Stourbridge (Suzanne Webb).

The central contention of the Opposition motion is that the Conservative Government have failed to address tax avoidance and evasion over the last 10 years, but that is simply not borne out by the facts. The range of the tax gap involved that the Opposition have stated is £35 billion to £90 billion. The £35 billion is the HMRC’s estimate, so we will accept that, but the provenance of the £90 billion is rather less certain, and I spent some time searching for it before I came in here. The only reference I can find to it is a blog post by Professor Richard Murphy. Members will remember that Richard Murphy was previously hailed as the founder of Corbynomics and was held up in lights by the Opposition as the answer to the economic problems we have. That was of course before he made the mistake of criticising the Leader of the Opposition, stating that he had

“no policy direction, no messaging, no direction, no co-ordination, no nothing”,

for which of course, in true Corbynista style, he was purged, and the shadow Chancellor later said, “we doubted his judgment.”

The shadow Chancellor is not the only one to doubt Professor Murphy’s judgment, of course. The Oxford University Centre for Business Taxation has done so, as has the Institute for Fiscal Studies, which previously described his estimate of the corporate tax gap as

“likely overstated (possibly by a wide margin).”

Many Members have highlighted the fact that tax avoidance and tax evasion have continued to drop. The country’s tax gap is now below 6% and is one of the lowest in the world, and the trajectory continues to be downwards.

The same Labour party that moved this motion voted against many of the measures that have led to that reduction. By voting against the Second Readings of both the 2018 and 2019 Finance Bills, Labour voted against 39 measures that will raise in excess of £7 billion by 2023-24. So if they have any intellectual honesty, they would be far better off congratulating the Government on closing the tax gap and on having a better record on these issues than they had themselves when they were last in government.

By and large, the evidence shows that the Government are making progress in tackling tax avoidance, and I strongly commend Ministers on their efforts. However, as part of wider efforts to reform the tax system there are individual policies that would benefit from a little more attention. One of them is the issue of off-payroll working, which many of my constituents have written to me about, and I have in turn written to Ministers to outline their concerns to them. Those concerns include reports that clients are already beginning to refuse to engage as a result of the complexity of the rules, and that projected earnings are being drastically reduced without the receipt of equivalent benefits or protections as salaried employees.

It is true that the services economy has changed drastically since off-payroll rules were originally introduced 20 years ago, so I believe that the Government were right to look at reforms. However, it is extremely important that in seeking to close those loopholes the Government avoid unintended consequences that limit our future competitiveness. At a time when maximum labour flexibility is surely a long-term benefit to the UK, I urge Ministers to take that into account.