Public Services in Cornwall: Funding

Gareth Davies Excerpts

Monday 15th January 2024 Commons Chamber

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

I congratulate my hon. Friend the Member for St Austell and Newquay (Steve Double) on securing the debate. He is undoubtedly a strong advocate for his corner of the country and for his constituents. I can think of few greater champions for Cornwall, or for the funding of public services there, than him and my hon. Friends the Members for St Ives (Derek Thomas) and for Truro and Falmouth (Cherilyn Mackrory). I very much value my hon. Friends’ contributions, knowledge, and insights on the local issues they have outlined tonight, and I will do my best to address some of their specific concerns.

Dealing first with local government finance, I certainly recognise that inflation is higher than when budgets were set at the last spending review in 2021. This is true on a global scale, and it presents challenges throughout the world and, of course, throughout our constituencies and communities. Reliable, high-quality public services always matter, but they mean even more to us in challenging times such as these, and in dispersed populations and rural and coastal areas where one’s nearest neighbour might be half a mile away, they can be a real lifeline. The Government are working to ensure that those services are well funded: the provisional 2024-25 local government finance settlement makes up to £64.1 billion available to local governments, an increase of up to almost £4 billion in core spending power on last year. In Cornwall, that has resulted in an almost 7% increase in core spending power. My hon. Friends the Members for St Austell and Newquay and for St Ives have pointed to the rural services delivery grant, which is now £95 million, the highest it has ever been. That fund is distributed to the top quartile of authorities, ranked by super-sparsity, but I take my hon. Friends’ point about its scale, and I will be very happy to take that away to my colleagues at DLUHC.

Our coastal communities are vital to the UK’s economic and environmental wellbeing, as well as being home to hundreds of thousands of people, but as my hon. Friend the Member for St Austell and Newquay has pointed out, they face particular challenges. That is why we have supported so many places along our coast, from the beaches of Cornwall to the bays of Stornoway. Eleven of the 12 freeports across the UK are based in coastal areas, with each receiving up to £26 million in Government funding over the next few years, as well as potentially hundreds of millions of pounds in locally retained business rates to upgrade local infrastructure and stimulate regeneration across coastal communities.

My hon. Friends have mentioned the UK shared prosperity fund. I recognise and commend my hon. Friend the Member for St Austell and Newquay for his advocacy for that fund, which has supported many of our coastal communities and provides—as he says— a significant £132 million to Cornwall and the Isles of Scilly, reflecting their share of previous European structural funds. Local leaders are already using that money to deliver ambitious plans for what they call good growth, while the Government have allocated almost £100 million to the towns fund and the future high streets fund to support Cornwall Council’s ambitions to encourage more economic regeneration and strengthen pride in place. I know that my hon. Friend would like more certainty on the future of the UK shared prosperity fund, which he has asked for tonight. While I hope he can understand that I cannot give him that certainty right now, I recognise his council’s enthusiasm to build on the strong start it has made, and I know he will continue to be a very strong advocate on behalf of his council in this place.

Recognising the importance of transportation in rural areas such as Cornwall to help boost productivity, we have also committed some £32.5 million to local highways maintenance and funding potholes. We went further in the spring Budget last year, with an extra £5 million for that endeavour. Through Network North, further funding totalling £3.6 million has been committed to Cornwall in both 2023 and 2024, with later allocations still to be determined. It is not just Cornwall’s roads that we are funding: last year, we awarded Cornwall Council £50 million from the levelling-up fund for the Mid Cornwall Metro. That transport project will provide new hourly direct train services to improve the current links between four of Cornwall’s largest urban areas, so as well as enjoying some of the best views one can get from a train anywhere in the country, residents will be better connected to employment, education and key services. Local leaders have pushed for that metro service, and this Government are very happy to support it, because we are committed to giving more power to local leaders—who, after all, know the needs of their areas almost as well as the local MPs do.

To that end, the recent level 2 devolution deal for Cornwall, announced at the autumn statement of 2023, provides Cornwall with new funding and powers to support local services. This will help Cornwall to maintain the skills that local people need and help bring clean energy to the region’s shores. There were initially discussions, as my hon. Friend pointed out, about a level 3 deal, which would have seen a directly elected Mayor introduced with further powers and an investment fund. However, as he pointed out, Cornwall Council decided that a level 2 deal was preferable at this point in time, and I of course completely respect that decision. After all, it is up to local people to decide and for us to support them, and that is what we have done on this deal and on other local matters of importance.

My hon. Friend mentioned policing. Because of decisions taken by this central and local government, funding for the policing system will rise nationally by some £842 million in 2024-25, distributed according to population sparsity. Devon and Cornwall police will receive up to £230 million in core settlement grants, but I appreciate what he said about the police funding formula. He will know that a review commenced in 2021, which is continuing to carry out engagement. He may wish it to speed up, and I know he will make representations to my colleagues at the Home Office accordingly.

My hon. Friend was completely right to point out the great many people who in recent times have wanted not just to visit Cornwall but to set up a home and raise a family there. Demand for housing is therefore increasing from permanent and part-time residents who want to buy. However, a lack of affordable housing is causing acute concern—house prices are high relative to incomes when compared nationally—and we understand that. The temporary and emergency accommodation budget has also become increasingly strained in recent years. To address that concern, the Government are committed to building more affordable homes. As recommended at the 2021 spending review, we are investing £11.5 billion between 2021 and 2026 through the affordable homes programme, which is the largest cash investment we have seen in a decade. I also note that Cornwall Council has been supportive of Government plans to enable local authorities to increase the council tax premium on second homes by up to 100%. It is believed that this could provide £20 million of additional revenue. There is always more to do of course, so it is critical that we continue to have open conversations as we are doing tonight.

Finally, let me address the comments on SEND from my hon. Friend the Member for Truro and Falmouth. Nationally, the Government are committed, and have committed, to addressing this. At the last spending review, we committed £2.6 billion to create 30,000 new school places for young people with SEND. It is our hope that this will lead to fewer people having to be transported long distances, as she described, to access the right educational settings. Again, there is more to do, and I know that the Department for Education, which leads on this policy area, is progressing more wholesale reforms of the SEND system. I would be happy to have the relevant Minister from the Department for Education write to her on Cornwall specifically.

I have spoken at length about what we are doing for Cornwall, but let me finish by recognising Cornwall’s contribution to our country. I would not be the first MP from Grantham to recognise its virtues. Were I to walk on the sandy shores of Constantine bay, I would be following in the very large footsteps of a certain greengrocer’s daughter, although I am reliably informed that Watergate bay in the constituency of my hon. Friend the Member for St Austell and Newquay is also worth a visit. Cornwall is not just home to incredible natural beauty, delicious pasties, irresistible ice cream and thrilling surfing. More importantly, it is home to some of the finest people our country has ever known. While I have listed the many facts and figures set out by this Government, we should never forget that behind them are thousands of wonderful Cornish people. They could not be better represented than by my hon. Friend, whom I look forward to continuing to work with long into the future.

Question put and agreed to.

Finance Bill

Gareth Davies Excerpts

Committee of the whole House
Wednesday 10th January 2024 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Schedule 12.

Clauses 31 and 32 stand part.

Schedule 13.

Clauses 33 and 34 stand part.

New clause 2—Review of measures to tackle evasion and avoidance—

“(1) The Chancellor of the Exchequer must, within three months of this Act being passed, publish a review of the measures in sections 31 to 33 to tackle evasion and avoidance.

(2) The review under subsection (1) must include details of—

(a) the average sentence handed down in each of the last five years for the offences listed in section 31;

(b) the range of sentences handed down in each of the last five years for the offences listed in section 31;

(c) the number of stop notices issued in each of the last five years to which the measures in section 33 would apply; and

(d) the estimated impact on revenue collected in each of the next five financial years resulting from the introduction of the measures in sections 31 to 33.”

This new clause would require the Chancellor to publish details of the sentences given and stop notices issued in each of the last five years to tackle evasion and avoidance, as well as the revenue expected to be generated from the measures to tackle evasion and avoidance in this Act in each of the next five years.

New clause 4—Assessment of impact of Act on multinational profit shifting and tax competition between jurisdictions—

“(1) Within six months of the passage of this Act, the Chancellor of the Exchequer must carry out an assessment of the impact of section 21 and Schedule 12 of this Act on multinational profit shifting and tax competition between jurisdictions, and lay a report of that assessment before both Houses of Parliament.

(2) The report must consider the efficacy of the measures contained in section 21 and Schedule 12 in achieving the policy objective of combatting base erosion and profit shifting.”

This new clause would require the government to produce an assessment of the impact of the Bill’s “Pillar Two” measures, in order to ascertain whether these measures have been successful in achieving their policy aims.

New clause 5—Tax compliance reporting—

“(1) Within six months of the passage of this Act, the Chancellor of the Exchequer must carry out an assessment of the impact of sections 31 to 34 and Schedule 13 of this Act.

(2) The report must consider the capacity and ability of HMRC to enforce compliance with the measures contained in sections 31 to 34 and Schedule 13 of this Act, including setting out staffing arrangements within HMRC's Customer Compliance Group for undertaking enforcement work relating to sections 31 to 34 and Schedule 13 of this Act.”

This new clause would require the government to produce an assessment of the impact of the Bill’s tax evasion and avoidance measures. The assessment would need to examine whether the capacity and ability of HMRC was sufficient to properly enforce those measures.

New clause 7—Review of effectiveness of section 31 measures in preventing fraud involving taxpayers’ money—

“(1) The Chancellor of the Exchequer must, within three months of this Act being passed, conduct a review of the effectiveness of the provisions of section 31 in preventing fraud involving taxpayers’ money.

(2) The review must evaluate the effectiveness of the provisions of section 31 in preventing fraud involving taxpayers’ money through comparison with the effectiveness of—

(a) other measures that seek to prevent fraud involving taxpayers’ money, and

(b) the approach taken in other countries.”

This new clause would require the Chancellor to review the effectiveness of measures in this Act to prevent fraud involving taxpayers’ money, and to compare them with other measures that seek to prevent fraud involving taxpayers’ money and the approach taken in other countries.

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

Clauses 21 and 31 to 34 and schedules 12 and 13 cover technical changes to pillar 2 of the international tax agreement—doubling the maximum sentence for the most egregious forms of tax fraud—the introduction of new powers to tackle the promotion of tax avoidance, and action against fraud in the construction industry scheme.

The UK’s tax gap is currently at an all-time low, at 4.8% of total tax liabilities. That is due to strong Government action to tackle all forms of non-compliance in the tax system, but we are never complacent. That is why we have introduced more than 200 measures since 2010, including 40 since 2021, to reduce the tax gap even further. The Government are taking action to ensure that individuals and companies pay the taxes that are due in the UK. We want to deter individuals from committing fraud in the first place. That is why we are doubling the maximum sentence for tax fraud.

The Government are also taking action against tax avoidance by introducing a new criminal offence of the promotion of tax avoidance and by expediting the disqualification of directors of companies that promote tax avoidance. The measures are designed to protect tax revenues, which are important for funding our vital public services.

It is also important to protect tax revenues from companies shifting profits offshore. That is why the UK implemented pillar 2 on 31 December 2023. We are updating existing legislation with technical amendments today to ensure that UK legislation is consistent with newly agreed guidance, to address further stakeholder comments to clarify terms, and to avoid unintended consequences.

Clause 31 strengthens our enforcement powers when it comes to tax offences. It doubles the maximum prison term, from seven years to 14 years, for individuals convicted of the most egregious cases of tax fraud. This applies to all taxes and duties administered by HMRC. It also increases the maximum penalty for counterfeiting from 10 years to 14 years. These measures demonstrate, I hope, the Government’s intent to crack down on tax fraud and to deter criminal actions that damage the public purse.

Clauses 32 and 33 and schedule 13 seek to target the promotion of tax avoidance, in order to protect taxpayers and reduce the damage inflicted on the public finances. Recent powers such as HMRC’s power to name promoters and their schemes, and its power to issue stop notices, are effectively disrupting promoters’ activities. None the less, a small number of promoters persist in attempting to sidestep the rules, so clause 32 and schedule 13 enable HMRC to act swiftly to seek the disqualification of directors and other individuals who control or exercise influence over companies involved in the promotion of tax avoidance. They enable the removal of those individuals from the avoidance market and will deter others from becoming directors of companies that promote avoidance.

In the Finance Act 2021, the Government introduced rules that allow HMRC to issue stop notices that require promoters to stop promoting specified tax avoidance schemes. Stop notices are an important deterrent tool, as failing to comply with a stop notice can lead to a substantial civil penalty. Clause 33 increases the consequences of failing to comply by introducing a new criminal offence, which will apply to promoters who continue to promote an avoidance scheme after receiving a stop notice. Creating a criminal offence signals the severity of this issue and reinforces the importance of complying with a stop notice.

Finally, clause 34 tackles serious non-compliance in the construction industry. The construction industry scheme requires contractors to withhold tax unless a subcontractor holds gross payment status. Most gross payment status holders are legitimate and compliant construction businesses but, in recent years, gross payment status has been used by organised crime organisations to facilitate fraud. This allows unscrupulous actors to compete unfairly against legitimate businesses. Clause 34 therefore strengthens the tests for gross payment status by adding VAT to the taxes with which subcontractors must demonstrate compliance. This measure is predicted to raise around £300 million over the next five years.

Each of these clauses helps to protect vital tax revenue used to fund our public services. They seek to deter taxpayers from knowingly defrauding the Government and encourage them to act against the promotion of tax avoidance. I therefore ask that clause 21, clauses 31 to 34 and schedules 12 and 13 stand part of the Bill.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I call the shadow Minister.

--- Later in debate ---

[Sarah Olney]

I welcome the hon. Member’s intervention, and—dare I say it—I completely agree with him. Of course, one is constrained by what one can amend in legislation, but I would like to see that as the start of an ongoing process of review. Let us be honest, it is an innovative proposal, not just because it requires an international co-operative effort, but because that very effort is innovative. It is therefore something that we as a sovereign Parliament should be keeping very much under review as the work continues.

I briefly note that the Finance Bill has implications for theatre tax relief, which plays a crucial role in enabling the development of new theatre productions in the UK. UK Theatre and the Society of London Theatre have raised concerns with the Treasury about those implications, which could damage how that essential relief operates. I therefore urge Ministers to liaise with those groups and particularly to provide assurance that international touring will not be hampered due to the Bill’s definition of UK expenditure. That is certainly an area that would benefit from scrutiny in Public Bill Committee.

Although the Liberal Democrats support certain measures in the Bill, such as the extension of full expensing, the Bill as a whole does not have our support, arising, as it does, from an unjust and deceptive autumn statement. I urge hon. Members to support the amendments tabled in my name, in particular new clause 5, which would hold the Government to account to ensure that HMRC is properly resourced to allow it to implement the measures in the Bill.

[Gareth Davies]

I thank hon. Members from across the House for their contributions. I will speak relatively briefly but will try to address some of the points raised. I will deal last with the new clauses, and in the meantime address some of the questions from the hon. Member for Ealing North (James Murray) from the official Opposition. He asked about pillar 1 and the progress being made. This Government fully support pillar 1 and are keen to maintain momentum on its progress as soon as possible. He should take comfort from the recent publication of the substantially agreed text of the multilateral convention. That demonstrates progress, but as I say, we are not complacent on that and are keen to see further progress as soon as possible.

The hon. Gentleman very reasonably asked for more information on sentencing and the action taken by HMRC. I will give him some data. Last year, there were 240 prosecutions. Within that, there were 218 convictions, and 130 of those were custodial sentences and 110 were suspended sentences. That equates to a 90% success rate for HMRC. The hon. Gentleman is right that the average length of a custodial sentence is 24 months. We want to extend a maximum sentence for two reasons: first, to make it clear that we consider fraud and all fraudulent activity some of the most serious crime possible because of its impact on public finances; and secondly, because if the maximum sentence increases, we expect all sentences to rise, as sentences are judged relative to the maximum sentence. However, I stress that it is the Sentencing Council that issues the guidance to judges and it is ultimately judges and the courts who rightly decide what sentences are given to those found guilty.

The hon. Gentleman asked about safeguards for stop notices, and he is right to highlight that that is an important measure for HMRC. I can tell him there have already been 20 stop notices issued since HMRC started issuing them just a year ago, but there are robust governance processes and safeguards in place, including review and appeal rights. However, any criminal sentences are decided by the courts and it is the Sentencing Council that will decide on that. I will look carefully at the other questions he has raised and ask for a written response. If we have that data, I commit to writing to him with that information.

My hon. Friend the Member for North East Bedfordshire (Richard Fuller) has rightly and consistently raised his questions and concerns on pillar 2. I can tell him that the UK is implementing pillar 2 in time and alongside EU member states, Japan and Canada, which I think he would agree are all peers. He asked about China. China has not announced implementation plans for pillar 2, but it is a member of the inclusive framework of countries that are in negotiations right now on pillar 2 and we are monitoring that very carefully, as he would expect. The US Administration have always supported both pillars 1 and 2 and have been one of the strongest advocates for them; as he will know, in 2017, the United States introduced its own domestic version of pillar 2, requiring those companies with foreign income to pay a minimum level of taxation.

The punchline, to answer my hon. Friend’s ultimate question, is that already the agreement has been put in place to ensure that, by 2025, 90% of multinationals will be in play, so we are confident in the robustness of that agreement. He asked about the loan charge; I do not believe that is in scope for this debate, but the Financial Secretary to the Treasury will follow up with him and engage with him and the loan charge and taxpayer fairness all-party parliamentary group in due course.

I will briefly address the new clauses that have been laid down. I will deal with new clauses 2, 5 and 7 together, as they all relate to tax avoidance and evasion, and then I will address new clause 4. New clause 2 would require the Chancellor to provide a report on the average sentence and range of sentences given to offences being amended in clause 31, the number of stop notices issued that clause 33 would apply to and the impact of those clauses on tax revenues. New clause 5 would require the Chancellor to carry out an assessment of the impact of clauses 31 to 34 and schedule 13 on HMRC’s compliance activities and new clause 7 would require the Chancellor to review the effectiveness of the provisions of clause 31 in combating fraud involving taxpayers money.

Let me say straight out of the gate that I agree it is important that we regularly review and evaluate policy. However, the new clauses are unnecessary, as HMRC already publishes detailed information about its compliance and performance on a regular basis. As I have said, the UK tax gap is already at an all-time low of 4.8% and will remain low and stable, given the measures that we are implementing. Every year, HMRC publishes information on the number of custodial sentences received for tax compliance offences and the average sentence length in HMRC’s annual report and accounts. The 2023-24 annual report and accounts will be published this summer, providing a full overview of HMRC’s performance. As most of that information is already publicly available in routine HMRC publications, the assessments legislated for by the new clauses are unnecessary, in our humble view.

New clause 4 would require the Government to report an assessment of the technical changes to pillar 2 introduced in clause 21 and schedule 12. It would consider the efficacy of the technical changes and their impact on multinational profit shifting and tax competition between jurisdictions. The Government consider that such a report is not necessary because the amendments in the Bill are technical changes to enhance the pillar 2 legislation that received Royal Assent just last year. Those amendments simply help to ensure that the policy objectives of the legislation are met fairly and effectively, reflecting both new international guidance and stakeholder comments. Ultimately, it is about avoiding unintended consequences in legislation that has already been passed. Of course, the Government will monitor pillar 2’s overall impact as businesses begin to respond to its implementation around the world—130 countries are privy to it.

I hope to have reassured Members that the additions in new clauses 2, 4, 5 and 7 are not necessary. For the reasons that I have set out, I urge the Committee to reject them. I commend clauses 21 and 31 to 34, and schedules 12 and 13, to the Committee.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Schedule 12 agreed to.

Clauses 31 and 32 ordered to stand part of the Bill.

Schedule 13 agreed to.

Clauses 33 and 34 ordered to stand part of the Bill.

New Clause 2

Review of measures to tackle evasion and avoidance

“(1) The Chancellor of the Exchequer must, within three months of this Act being passed, publish a review of the measures in sections 31 to 33 to tackle evasion and avoidance.

(2) The review under subsection (1) must include details of—

(a) the average sentence handed down in each of the last five years for the offences listed in section 31;

(b) the range of sentences handed down in each of the last five years for the offences listed in section 31;

(c) the number of stop notices issued in each of the last five years to which the measures in section 33 would apply; and

(d) the estimated impact on revenue collected in each of the next five financial years resulting from the introduction of the measures in sections 31 to 33.”—(James Murray.)

This new clause would require the Chancellor to publish details of the sentences given and stop notices issued in each of the last five years to tackle evasion and avoidance, as well as the revenue expected to be generated from the measures to tackle evasion and avoidance in this Act in each of the next five years.

Brought up and read the First time.

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

Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 19th December 2023 Commons Chamber

[Cat Smith (Lancaster and Fleetwood) (Lab)]

1. If he will make an assessment of the potential merits of introducing landfill tax relief for local authorities who are responsible for hazardous waste after companies go into liquidation.

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

A very merry Christmas to you and your staff, Mr Speaker. Landfill tax provides an economic incentive to manage waste more sustainably, which has contributed to a 90% reduction in local authority waste sent to landfill in England since 2000. However, it was not intended to act as a barrier to the remediation and redevelopment of contaminated land. In the autumn statement the Government announced the land remediation pathfinder fund, which will provide £78 million of targeted support to local and mayoral authorities.

[Cat Smith]

Happy Christmas, Mr Speaker. For two weeks now the old Supa Skips site in Lancaster has been burning, and it looks as if Lancaster City Council will be left to pick up the tab for the clean-up. Some of that money has to be spent on landfill tax. Will the Minister meet me and Lancaster City Council to discuss what options are open to my local council to ensure that local ratepayers are not left footing the bill for rogue companies that walk away from sites, such as Supa Skips?

[Gareth Davies]

As I mentioned in my previous answer, the landfill tax has been hugely successful but it was never intended to act as a barrier to remediation. The fund that was announced in the autumn statement will be open for bids in early 2024, and I encourage the hon. Lady’s local authority to apply through the normal way. Secondly, there is an ongoing review into the landfill tax, and reform of current exemptions are within scope of that review. Our belief is that the fund may offer more targeted support in the way that she desires.

--- Later in debate ---

[Jack Brereton (Stoke-on-Trent South) (Con)]

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

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

In the autumn statement, the Chancellor announced an ambitious growth package that will boost business investment by making full expensing permanent, by removing barriers to business investment, by reforming our inefficient planning system, by speeding up electricity grid connection times and by making £4.5 billion available for strategic manufacturing sectors over the next five years, among other measures.

[Jack Brereton]

I thank the Minister for that response. It is very welcome to see full expensing, which will help businesses to invest in the plant and machinery and the technology that are needed. It would also help the ceramics sector, in particular, if it were exempted from the emissions trading scheme. Will my hon. Friend speak to the Chancellor about the possibility of exempting the ceramics sector from the ETS, which would help to give the sector the breathing space to invest in productivity and energy efficiency gains?

[Gareth Davies]

I can think of few greater champions for Stoke’s ceramics sector than my hon. Friend. We recognise that carbon leakage is a significant risk for the ceramics sector, so I can offer him two pieces of information. First, we provide free allowances to the ceramics sector under the ETS. Secondly, just yesterday we announced that ceramics will be included in the UK’s carbon border adjustment mechanism.

[John Penrose (Weston-super-Mare) (Con)]

18. If he will make an estimate of the potential impact of a carbon border adjustment mechanism in the form recommended by the Commission for Carbon Competitiveness on fuel duty.

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

The Government have announced that they will implement a CBAM from January 2027. The UK CBAM will place a carbon price on some of the most emissions-intensive industrial goods imported to the UK and will ensure that the UK’s decarbonisation efforts lead to a true reduction in global emissions, rather than simply displacing carbon emissions overseas. The delivery of a CBAM will be the subject of further consultation in 2024.

[John Penrose]

I congratulate the Minister. A CBAM is the cheapest and most future-proof way to save the planet and UK manufacturing jobs at the same time, but some of the details look troubling. Why have some manufacturing industries been left out entirely? Why are others arriving late, so they will be vulnerable to dumping? And how will he ensure that this is not just a tax and price rise for already hard-pressed families and businesses?

[Gareth Davies]

I recognise and thank my hon. Friend for his work as chair of the Commission for Carbon Competitiveness. I will directly address his two main questions. On speed, implementation by 2027, at the latest, will allow the Government to engage with businesses to ensure that they are well prepared, but next year’s consultation will provide more information on timings. We have identified eight sectors that have the greatest exposure to carbon leakage, from both a trade and an emissions perspective.

[Nigel Mills (Amber Valley) (Con)]

20. What progress he has made on the introduction of investment zones.

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

Since the spring Budget, the Government have announced seven of the eight English investment zones and confirmed the location of four places eligible to host investment zones in Scotland and Wales. The Government are committed to ensuring that funding and tax sites go live in the 2024-25 financial year.

[Nigel Mills]

I welcome the investment zone in Nottinghamshire and Derbyshire. Will the Minister confirm that some of the benefits of these zones are not only available in the small number of large sites but are available to any business across the whole zone to apply for?

[Gareth Davies]

My hon. Friend is right to recognise the east midlands investment zone, which will bring significant benefits across the region in the advanced manufacturing and green industry sectors. I am pleased to tell him that it started with a £9.3 million anchor investment and, over time, will leverage some £323 million in private investment, supporting 4,000 jobs overall.

[Theresa Villiers (Chipping Barnet) (Con)]

21. What steps he is taking to reduce inflation.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

The life sciences sector is worth £2.4 billion to the Northern Ireland economy. What steps have been taken, with counterparts in the Northern Ireland Assembly, to increase funding for employment within this worthy sector?

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

The hon. Gentleman is quite right that life sciences is one of the key growth industries for this country. I would be happy to meet him to discuss all the things we are doing for the sector, particularly in Northern Ireland.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Our economy continues to be impacted by the war in Ukraine and denial across the Black sea, and we now must brace ourselves for further economic shocks as global shipping avoids the Red sea. Does the Minister agree that we should be protecting these shipping lanes? Our Navy is now too small by half to protect our maritime interests, so will he now look at investing in our surface fleet to protect our economy?

UK Emissions Trading Scheme and Carbon Leakage

Gareth Davies Excerpts

Monday 18th December 2023 Written Statements

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

The UK is taking rapid action on industrial decarbonisation to meet net zero. This includes the use of carbon pricing through the UK emissions trading scheme (UK ETS). This action creates risk of carbon leakage as not all jurisdictions are moving at the same pace. Carbon leakage is the movement of production and associated emissions from one country to another due to different levels of decarbonisation effort through carbon pricing and climate regulation. It can undermine efforts to reduce global emissions and curtail private investment in decarbonisation—compromising efforts to limit global warming to 1.5°C.

The best solution to carbon leakage is an international one. The UK and many others around the world are working to reduce carbon leakage risk by pushing for ambitious climate action. But progress on international solutions takes time.

The Government therefore consulted on a range of potential domestic carbon leakage mitigation measures. The consultation “Addressing carbon leakage risk to support decarbonisation” ran from 30 March 2023 to 22 June 2023. It covered potential policies including a carbon border adjustment mechanism (CBAM), product standards, and other policy measures to help grow the market for low-emission products, as well as emissions reporting that could support the implementation of carbon leakage policy more broadly.

After careful review and giving thorough consideration to the potential implications, the Government have today published a summary of responses and Government response to the consultation, and confirm that:

The Government will implement a CBAM by January 2027. The UK CBAM will place a carbon price on some of the most emissions-intensive industrial goods imported to the UK from the aluminium, cement, ceramics, fertilizer, glass, hydrogen, iron and steel sectors.

A CBAM will ensure that UK decarbonisation efforts lead to a true reduction in global emissions rather than displacing carbon emissions overseas. It will give UK industry confidence to invest in the knowledge that its decarbonisation efforts will not be undermined.

The UK CBAM will work cohesively with the UK ETS to ensure imported products are subject to a carbon price comparable to that incurred by UK production.

The UK ETS Authority has today also published a consultation on the approach to UK ETS free allocation. The UK Government will work with the UK ETS Authority on interactions between a CBAM and provision of free allowances under the UK ETS.

The CBAM will be designed so that other countries which also have a carbon price will see the CBAM liability on their goods adjusted accordingly.

The scope of the CBAM will be kept under review, and delivery will be subject to further consultation in 2024.

The UK CBAM will be designed in compliance with the UK’s international obligations.

Alongside a CBAM, Government will work with industry to establish voluntary product standards that businesses could choose to adopt to help promote their low carbon products to consumers.

The Government will also seek to develop an embodied emissions reporting framework that could serve future carbon leakage and decarbonisation policies.

Voluntary standards and the embodied emissions reporting framework will be subject to further technical consultation in 2024.

The summary of responses and Government response to the consultation are available here: https://www.gov.uk/government/consultations/addressing-carbon-leakage-risk-to-support-decarbonisation. A copy of the document will be deposited in the Libraries of both Houses.

[HCWS146]

Finance Bill

Gareth Davies Excerpts

2nd reading
Wednesday 13th December 2023 Commons Chamber

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

What a great pleasure it is to close this debate on the Finance Bill on behalf of the Government. I want to thank my hon. Friend the Financial Secretary, who is new in post, and to recognise the work of his predecessor and my constituency neighbour in Lincolnshire, my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins), who carried out a great deal of work on this Finance Bill in the run-up to the autumn statement.

I will address a number of the points raised in this very good debate—it was lacking on quantity, but high on quality from a number of sources—but before I reflect on the comments, let me reflect on the Bill. Be in no doubt but that this Finance Bill will mean that companies will pay less tax if they invest more. It will simplify and strengthen tax reliefs to bolster innovation, and it makes the tax system fairer and more secure. Taken together, the measures contained in it will strengthen our economy and create more opportunities for more rewarding work in every corner of this country.

I will now turn to the comments made by a number of colleagues. I will start with my hon. Friend the Member for West Worcestershire (Harriett Baldwin), the Chair of the Treasury Committee, who has carried out significant work on the tax simplification programme with her Committee. The Government are clear that we want the tax system to be simpler and fairer, and to support growth. As she mentioned, the Financial Secretary has written to her just this week setting out the progress we are making on simplification. This autumn statement, and the Finance Bill in particular, has a number of measures, not least the capital allowances and the R&D expenditure credit consolidation. This a step in the right direction, but we are not complacent and we will continue to go further.

I was heartened to hear cross-party support for full expensing. That is in the context of the lowest headline rate of corporation tax in the G7, but the autumn statement announcement, and the provision in the Bill, is a £10 billion-a-year effective tax cut, called for by the IFS, the CBI, the IOD, Make UK, and many other businesses across the country. It is also in conjunction—this is not in the Bill—with a business rates package that will see a freeze for more than 90% of rate payers in this country.

The hon. Member for Richmond Park (Sarah Olney) made a comment about the oil and gas sector. Let me be clear: this Government have resolute support for our domestic oil and gas sector, and its 210,000 jobs. She called for a “proper tax” on oil and gas companies, and I can tell her that we already have one of the highest rates of windfall tax in the world. The energy price levy strikes the right balance between providing support for families and businesses through an energy crisis—namely through the energy price guarantee, which effectively paid 50% of people’s energy bills—while also encouraging investment to bolster our energy security. Conservative Members want to see the sector’s profits reinvested to support our domestic economy, our jobs, and our domestic energy security. Investment allowances within the EPL help to do that, and the energy security investment mechanism, which I announced in June, will help to provide banks with certainty in their modelling as they provide financing to the oil and gas sector, and as they are part of the transition to net zero.

Along with SNP Members, the hon. Member also said that she would like an increase in tax on banks, but she failed to mention that tax on banks has increased in recent times from 27% to 28%. She failed to mention that the tax revenue contribution from banks has increased significantly from £17 billion in 2010, to more than £33 billion today. That helps to pay for our NHS, our education, our defence, and many other public services that we all rely on. We want our banking system to be internationally competitive, and to keep the 1 million jobs that it employs stable and secure.

Many Opposition colleagues have mentioned living standards, and they are right. Conservative Members care deeply about that issue. That is why as part of the autumn statement, we increased the state pension by 8.5% as part of the triple lock which, by the way, has brought 200,000 pensioners out of poverty since it was introduced by a Conservative Prime Minister. We have also uprated benefits by 6.7%, and uprated the local housing allowance, which will benefit 1.6 million households across the country. That was on the back of a £289 billion welfare budget. Under this Government 400,000 children have been brought out of absolute poverty, and we have seen the Government step in with significant support through two global shocks of covid and the energy price spike, with £500 billion of support to get people through.

[Drew Hendry]

Will the Minister give way?

[Gareth Davies]

I will not give way. We are going to proceed I’m afraid; the hon. Gentleman has had his chance.

I pay tribute to my right hon. Friend the Member for Witham (Priti Patel) who has great consistency when it comes to reducing the tax burden. She has made clear her views on our tax system, and we agree with her. We have a keenness to bring taxes down, but we will do it in a responsible way that is in line with sustainable public finances. She also made clear her consistent campaign on pillar 2, and we are very alive to her concerns. I am pleased that the Chancellor recently met and wrote to her, following the two fiscal statements. I understand her concerns about sovereignty, and I assure her that the pillar 2 provisions do not impact on sovereignty or indeed on competitiveness. The provisions in the Bill are technical amendments that we will discuss in more detail as it goes into Committee.

Finally I thank, as always, my hon. Friend the Member for Poole (Sir Robert Syms) for his positivity about our economy, which does not always get reported. For me, his critical point was about looking at the long-term performance of the economy, not just at the provisions we are putting in place. Instead of looking month by month by month, we should look at long-term provision.

In conclusion, in January this year, the Prime Minister set out his priorities for the Government. Three of them were economic and, since then, we have seen our inflation cut in half and our economy is expected to grow in every year of the OBR’s forecast period. That is half a decade of uninterrupted growth. Because we are reducing borrowing, debt is now forecast to fall. Put simply, we have turned a corner, and it is because of the actions of this Government, this Prime Minister and this Chancellor.

This is a Conservative approach through supply-side reform, and it is in stark contrast to the Labour party’s debt-driven ambitions. We know that its plans to borrow some £28 billion every year for green initiatives will put at risk the great progress that we and the British public have achieved. The independent Institute for Fiscal Studies has issued a stark warning for Labour’s plans. It said they will increase inflation and drive up interest rates, leading to more debt, higher rates, higher inflation, fewer jobs and more tax. That is the Labour party’s playbook. We cannot let that happen, and we will not.

We want an economy driven by enterprise, and by workers and by businesses throughout this country who push and strive, making us more competitive abroad and resilient at home. We want a tax system that pushes up businesses and workers who want to succeed, not that pulls them down when they do succeed. The autumn statement was a statement for growth, investment, work and reward. The measures in the Bill will deliver much of that, so I strongly commend the Bill to the House.

Question put, That the amendment be made.

North East Investment Zone

Gareth Davies Excerpts

Monday 27th November 2023 Written Statements

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

On Friday, the Government and the forthcoming north-east mayoral combined authority jointly announced that the north-east investment zone will focus on advanced manufacturing and green industries, building on the region’s long-standing sectoral strengths and increasing prominence as an international hub for clean energy. Aligned to the arc of innovation—running from Northumberland down to Sunderland and Durham, with opportunities along the Tyne corridor—the north-east investment zone builds on the trailblazer deal announced for the north-east and will bring benefits to businesses and local communities across the whole of the region.

Furthermore, a new Nissan-led investment worth £2 billion is being made into the north-east to develop two new electric vehicle models. This will create demand for a major expansion in the local electric vehicle supply chain, which the investment zone could support.

Building on the region’s existing strengths, including as a world leader in automotive and advanced manufacturing, electric vehicle production, battery manufacturing, the offshore wind sector and advanced low-carbon materials, together with its strong natural assets and strategic geographic location, the north-east investment zone will bring opportunity into the region through a total funding envelope of £160 million over 10 years, following the extension of the investment zones programme that was confirmed at autumn statement 2023. The investment zone has been developed with strong support from the region’s universities and Catapult centres and is aligned to their existing research and innovation excellence. Local partners expect that the investment zone will help leverage significant private funding, including the £2 billion Nissan-led investment announced on Friday, and help support more than 4,000 jobs over the first five years of the programme.

The Government, the forthcoming north-east mayoral combined authority and other local partners will continue to work together on the investment zone to jointly agree the outstanding elements of the programme, including the breakdown of how the north-east investment zone’s funding envelope will be deployed, with a view to setting out further details in due course.

[HCWS71]

Investment Support

Gareth Davies Excerpts

Tuesday 21st November 2023 Written Statements

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

The Chancellor is announcing new measures to drive innovation and help pension funds and other investors to invest in high-growth businesses.

This includes new vehicles tailored to the needs of pension funds to help them invest the capital unlocked through the Mansion House compact. The Government will provide £250 million to support successful bidders under the long-term investment for technology and science (LIFTS) initiative, subject to contract, and is confirming plans to launch a new growth fund within the British Business Bank to give pension funds access to investment opportunities in the UK’s most promising businesses,

In addition, the Chancellor is announcing new measures to support innovative businesses to access the finance they need to start and scale up. These include:

At least £50 million of additional funding for the British Business Bank’s successful ‘Future Fund: Breakthrough’ programme—that will provide direct investment to support the UK’s promising pipeline of R&D-intensive firms;

A venture capital fellowship scheme to support the next generation of world-leading investors in our renowned VC funds, similar to the successful US Kauffman fellowship; and

A £20 million investment to foster more spin-out companies that are created using research done in universities.

Spin-outs are start-up companies that are created based on intellectual property (IP) generated through a university’s research. The Government are announcing the publication of the independent review of spin-outs.^[1] The review has been led by two leaders in the field of academia and venture capital—Irene Tracey, vice-chancellor of Oxford University, and Andrew Williamson, managing partner of Cambridge Innovation Capital—and makes a series of recommendations to improve the performance of UK universities at spinning out companies.

The recommendations include best practice licensing deal terms—10-25% university equity for life sciences spin-outs, as per recently published guidance, and 10% or less for less IP-intensive sectors. The Chancellor is accepting all the recommendations and announcing £20 million for a new cross-disciplinary proof-of-concept research fund. This will help prospective founders in our universities demonstrate the commercial potential of their research. The full Government response will be published as part of the autumn statement.

^[1] https://www.gov.uk/government/publications/independent-review-of-university-spin-out-companies.

[HCWS58]

Investment Zones and Freeports

Gareth Davies Excerpts

Monday 20th November 2023 Written Statements

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

The Government are announcing that the investment zones programme in England will be extended from five to 10 years. Each investment zone will be provided with a £160 million envelope from 2024-25 to 2033-34, which can be used flexibly between spending and tax incentives, subject to ongoing co-design of proposals and agreement of delivery plans with the Department for Levelling Up, Housing and Communities and His Majesty’s Treasury.

The Government are also announcing that the window to claim freeport tax reliefs in England will be extended from five to 10 years until September 2031, conditional on each freeport developing a satisfactory delivery plan agreed by the Department for Levelling Up, Housing and Communities and HM Treasury. This extension will provide long-term support to businesses looking to invest, delivering growth and jobs, and levelling up the country.

The Government will work with the Scottish and Welsh Governments with the intention of delivering the same extension for freeports and investment zones in Scotland and Wales, and will continue to work with stakeholders on how best to deliver the benefits of the investment zones and freeports programmes in Northern Ireland.

Alongside this, the Government and the West Yorkshire Mayoral Combined Authority have jointly announced that the West Yorkshire investment zone will focus on life sciences, and digital and tech, building on existing local strengths in these sectors. This will bring benefits to local communities and businesses across West Yorkshire, including in Huddersfield, Bradford and Leeds.

Paxman Scalp Cooling, a pioneering health tech company, and digital healthcare company Dedalus have committed the first new investments into the investment zone worth a total of £26 million. Paxman Scalp Cooling is investing £5 million to bring its innovative health tech products to global markets and Dedalus is investing £21 million to deliver digital and diagnostic tools for the NHS.

Building on the region’s research strengths and its existing base of businesses in life sciences, digital and technology, the West Yorkshire investment zone will bring opportunity into areas that have historically underperformed economically through a total funding envelope of £160 million over 10 years. It is expected that the investment zone will help leverage more than £220 million of private funding and help support more than 2,500 jobs over the next five years.

The Government and the West Yorkshire Mayoral Combined Authority will continue to work together on the investment zone to jointly agree the outstanding elements of the programme, including the breakdown of how West Yorkshire’s envelope will be deployed, with a view to setting out further details in due course.

[HCWS50]

Advanced Manufacturing: Funding

Gareth Davies Excerpts

Monday 20th November 2023 Written Statements

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

On Friday 17 November, the Government announced £4.5 billion in funding for manufacturing to support private sector investment in eight strategic sectors across the UK. Together with our existing manufacturing support and plans for the net zero transition, the funding will level up communities across the country with higher-paid jobs and improve our energy security.

The funding will be available for high-quality proposals from 2025 for five years and therefore help unlock private investment by providing longer-term certainty. It is targeted at the UK’s strongest, world-leading sectors, and where the industry is undergoing fundamental changes as the world transitions to net zero.

Over £2 billion has been earmarked for the automotive industry, supporting the manufacturing and development of zero-emission vehicles, their batteries and supply chain.

The sum of £975 million has been earmarked for aerospace, supporting investment in energy-efficient and zero-carbon aircraft equipment.

Further, we have committed to £960 million for a green industries growth accelerator to support clean energy manufacturing, and £520 million for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s research and development strengths.

The green industries growth accelerator investment will support the expansion of strong, homegrown, clean energy supply chains across the UK, including: carbon capture, utilisation and storage; electricity networks; hydrogen; nuclear; and offshore wind. This will enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and strong deployment offer.

More information, including on the application processes, will be made available by the Government in due course.

The funding forms part of the Prime Minister’s pledge to grow the economy, and his focus on making decisions for the long term. It does not just focus on the most successful sectors today but looks ahead to how we keep pace internationally and build the UK’s expertise for the industries of the future. The funding will also help to ensure that the UK remains at the forefront of the global transition to net zero and can seize growth opportunities in the new green economy.

This approach is part of the UK’s wider offer for advanced manufacturing. The Government have also published Professor Dame Angela McLean’s pro- innovation regulation of technologies review on advanced manufacturing and the Government’s response^[1], and announced commitments to extend the connected and automated mobility research and development programme and expand the Made Smarter adoption programme for manufacturing SMEs. The Government will shortly set out more on their actions to support investment and growth in the manufacturing sector with the publication of the advanced manufacturing plan and UK battery strategy.

^[1] https://www.gov.uk/government/publications/pro-innovation-regulation-of-technologies-review-advanced-manufacturing.

[HCWS48]

Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 14th November 2023 Commons Chamber

[David Duguid (Banff and Buchan) (Con)]

5. What fiscal steps his Department is taking to support the growth of the energy sector.

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

Since March 2021, the Government have committed a total of £30 billion in public investment for the green industrial revolution. Since then, the Chancellor has announced £6 billion for clean heat and improving energy efficiency, and £20 billion for carbon capture, usage and storage. Alongside the launch of Great British Nuclear and the small modular reactor competition, the Government have also invested £1 billion in Sizewell C.

[David Duguid]

According to a recent survey, 90% of North sea oil and gas operators have reduced spending since the energy profits levy was introduced. I therefore welcome recent announcements on new North sea licences and the announcement before the summer of the energy security investment mechanism, by which the EPL will be removed when appropriate. Can my hon. Friend tell me when we can expect a response to the consultation on the ESIM and what plans this Government have to legislate for the mechanism? Will he meet me to discuss how investor confidence in our home-grown industry can be assured further?

[Gareth Davies]

Introducing the price floor for the oil and gas industry comes from the principle that, while it is right that oil and gas companies pay a higher share of tax during exceptional times, it is also right that when prices fall to normal levels, so do their tax rates. That is why we introduced the price floor in June and we have extensively engaged with the industry since then. I know that legislating will provide some certainty; we are looking carefully at that and will respond soon. I will always be happy to meet with my hon. Friend.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Labour party and the Co-operative party have set out a shared ambition for more community-owned energy. That is not new: in Denmark, 52% of wind energy is community owned, and in Germany half of all onshore wind is community owned. Will the Government do far more to join that ambition of community-owned energy here in Britain?

[Gareth Davies]

We have ambitious plans for energy generation and our energy security. We want to bring communities with us, and we look at all options as we do so.

[Rachael Maskell (York Central) (Lab/Co-op)]

6. What recent assessment he has made of the potential merits of introducing a wealth tax.

--- Later in debate ---

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

14. What fiscal steps he is taking with Cabinet colleagues to help support households in fuel poverty.

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

The Government have taken significant action to help households with rising energy prices and the costs of living by providing one of the largest packages of support in Europe, totalling £94 billion.

[Mr Carmichael]

Orkney and Shetland have the worst rates of fuel poverty of anywhere in the country. Provisional figures show that, for last winter, both Orkney and Shetland recorded record levels of winter mortality. In his new office, will the Minister bring his colleagues together from across Government to hear from agencies such as THAW—Tackling Household Affordable Warmth —in Orkney that are working to tackle fuel poverty, because if we can tackle fuel poverty in Orkney and Shetland, we can tackle fuel poverty?

[Gareth Davies]

We are incredibly sympathetic to the right hon. Gentleman’s constituents, who have suffered a very difficult time. That is why we introduced the energy price guarantee, which will remain in place until March 2024 as a safety net. We continue to engage with lots of stakeholders and we are very happy to include the ones he suggests.

[Nick Fletcher (Don Valley) (Con)]

16. What steps his Department is taking to support homeowners with their mortgages.

--- Later in debate ---

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

The Government continue to stand by households with one of Europe’s largest support packages, amounting to some £3,300 a household on average across 2022-23 and 2023-24.

[Ben Lake]

The Minister will be aware that a big concern for rural constituencies is the cost of fuel. The RAC has found that the margin enjoyed by the big supermarkets on fuel sales in October was double the figure for the year to date at 14p per litre. That reflects concerns raised by the Competition and Markets Authority that although wholesale fuel prices fell in September and October, retail prices did not. What is the Treasury’s assessment of the impact that these higher margins will have on households in the coming winter?

[Gareth Davies]

Fuel duty is a major cost for households and businesses. We recognise that. That is why in the spring Budget 2023, the Chancellor extended the 5p temporary duty cut. That was a £5 billion saving for motorists, worth £100 for the average motorist, but we always keep these things under review.

[Priti Patel (Witham) (Con)]

23. What steps he is taking to support economic growth in Essex.

--- Later in debate ---

[Julian Sturdy (York Outer) (Con)]

24. What fiscal steps he is taking to support the growth of the life sciences sector.

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

Life sciences are one of the Chancellor’s key growth priority areas. In May, he announced a significant new policy package, backed by more than £650 million of funding, reaffirming the Government’s commitment to supporting a thriving life sciences industry.

[Julian Sturdy]

I thank my hon. Friend for that answer. Life sciences are incredibly important, so will he focus investment on them in projects such as BioYorkshire on the edge of my constituency, which brings together private, public and academic institutions for huge benefits right across the board?

[Gareth Davies]

My hon. Friend is absolutely right to highlight the benefits and importance of life sciences to the country. We are genuinely a world leader: I was out in Boston in the United States seeing the other world-leading area for life sciences, and it is not a patch on ours. That is why, as an example, we are looking to support life sciences through the investment zone programme, but, as I said, they are a key priority for the Chancellor as part of his growth agenda.

[Marco Longhi (Dudley North) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I know that the Chancellor is aware of just how important the whisky industry is to the economy of rural Scotland. It was very disappointing that the policy of a duty freeze was not continued in the Budget. Can he offer any reassurance that we will return to the policy of duty freeze in the autumn statement, and in next year’s Budget?

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

We are incredibly supportive of the Scotch whisky industry. In fact, the Scotch Whisky Association was my first meeting in post. In nine out of 10 previous fiscal events we either cut or froze duty on whisky, and we have acted to remove punitive tariffs on Scotch whisky in the US market. It will not be a surprise to my right hon. Friend that all taxes remain under review and he will not have long to wait until the next fiscal event.

[Richard Burgon (Leeds East) (Lab)]

T6. Banks are taking advantage of higher interest rates to make bumper profits. A new poll shows that people have had enough, with big support for a one-off windfall tax on bank profits, yet the Government have chosen to slash the surcharge on bank profits. Is it not time for a windfall tax on excess bank profits to help people who are hit hard by this crisis?

[Peter Gibson (Darlington) (Con)]

I thank the Exchequer Secretary to the Treasury, my hon. Friend the Member for Grantham and Stamford (Gareth Davies) for his recent visit to Darlington, where he opened a new branch of Darlington Building Society. He will know from that visit the impact that Treasury jobs are having locally, including an additional £80 million of spending in our local economy. Does he agree with me that Darlington Economic Campus is a fantastic levelling-up project, ensuring that people can stay local but go far?

[Gareth Davies]

It was a great pleasure to visit my hon. Friend and open the Darlington Building Society in his town, a very prominent business that is important for in-service banking facilities. The Darlington campus is an important part of our Treasury levelling-up agenda and long may that continue.

[Stephanie Peacock (Barnsley East) (Lab)]

T8. More than 3 million households in the UK owe an estimated £2.7 billion in the unregulated buy now, pay later sector. The Labour party has set out plans for urgent regulation of the sector. Can the Minister confirm when the Government will do the same?