VAT: Independent Schools

Harriett Baldwin Excerpts

Tuesday 8th October 2024 Commons Chamber

[Damian Hinds]

My hon. Friend is right. That comes from the rushed nature of the legislation. The sloppy drafting means that children who are not of school age get dragged into this tax if they happen to be in the same room as children who are, and there are concerns about what might follow in other borderline cases.

The Government claim that the policy is about revenue, not politics, but having read the Secretary of State’s twitterings, I think hon. Members could be forgiven for mistaking the motivation. It is entirely spurious, for multiple reasons, to link this tax to 6,500 teachers, mental health support or anything else. The money will go into general Exchequer receipts, and anyway, 6,500 teachers is not that many in the scheme of things, given the 468,000 there are now. That is a compound growth rate of 0.3% over five years—and, by the way, a lot fewer teachers than we recruited in the last five years. Mental health support teams are already being rolled out, and they cover primary schools as well as secondary schools. It is not clear what the difference is in the new Government’s policy on mental health support, other than that it will not include primary schools.

To the extent that the VAT revenue could be hypothecated, it looks a lot more like that revenue would reduce cuts to education resourcing, rather than increasing it. If the policy is about revenue, not politics, the Government could easily commit to one simple thing today. They are confident, they tell us, that the policy will raise a large sum of money and not create large costs. Will they commit to measuring and reporting back on that, and if it turns out, against expectations, that they were wrong, will they reverse it?

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I thank my right hon. Friend, who is giving an excellent introduction to the debate. Is it his understanding that our military personnel, and those serving in our diplomatic service, will also be hit by this tax?

Winter Fuel Payment

Harriett Baldwin Excerpts

Tuesday 10th September 2024 Commons Chamber

[The Exchequer Secretary to the Treasury (James Murray)]

This is a serious topic and we know from the debate earlier this afternoon that it is one on which Members across this House and people across this country have strong feelings. We understand that. This is a difficult decision to have to take. By means-testing winter fuel payments, we know that we will be ending future payments to most pensioners while maintaining our steadfast commitment to protecting those in greatest need. But although they do not like to be reminded of it, Conservative Members know exactly why we need to take this step. Because it was Conservative Members—and, indeed, former Members of this House who have now been voted out by the British public—who did such damage to our country’s economy and the public finances. The legacy of the last—

[Dame Harriett Baldwin (West Worcestershire) (Con)]

On a point of order, Madam Deputy Speaker. This is the second Government Minister we have heard from the Dispatch Box today, yet only moments ago we saw the Chancellor sitting on the Front Bench. It was the Chancellor who chose to spend billions on setting up Great British Energy. It was the Chancellor who chose to spend billions giving pay rises to their union paymasters. It was the Chancellor—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I thank the hon. Lady, but she will be aware that that is not a point of order; it is more of a speech that she is seeking to make. Perhaps she will find an opportunity to contribute in the debate.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 3rd September 2024 Commons Chamber

[James Murray]

I welcome my hon. Friend to her place. She is absolutely right to highlight just how much damage the Conservatives’ recklessness in 2022 caused to families in North Warwickshire and beyond. The decisions of Conservative Ministers unleashed economic turbulence that pushed up people’s mortgages and made people across Britain worse off. Our new Government will hardwire Budget responsibility into Government with our new fiscal lock in the Budget Responsibility Bill, which will make sure that the disaster we saw nearly two years ago can never happen again.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

The living standards of nearly 50,000 pensioners in Malvern Hills district and Wychavon district are going to deteriorate very sharply this winter in the face of a 10% increase in their energy bills and no winter fuel allowance. Many of those pensioners have incomes just above the pension credit threshold, and many are too frail and too old to work. Yet within the first few days of coming into office, the Chancellor managed to spend over £22 billion very quickly by setting up Great British Energy and a national wealth fund, and by giving in to the pay demands of her party’s union paymasters. Is it not the case that this Chancellor has made the chilling political choice to balance the books of this country on the very frailest shoulders?

[James Murray]

I am disappointed that the hon. Member is talking down essential investments that we have made in our country’s future. She also seems to be confused: there is a £22 billion black hole because of the unfunded spending commitments made by the Conservative party when it was in government. But she makes an important point about protecting pensioners, which is why it is so important to ensure that all those pensioners who are eligible for pension credit take it up, and I look forward to her support in making sure that they do so.

Public Spending: Inheritance

Harriett Baldwin Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for her question. She speaks from her experience as Chair of the Public Accounts Committee, and I agree with her entirely. The charter for budget responsibility will be published. We have already introduced legislation for the new fiscal lock that we set out in our manifesto, so that we can ensure that a Government can never again do what the previous Government did, which was to overspend by £22 billion within one year.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

What a chilling political choice, to choose to take away the winter fuel allowance from a 90-year-old on an income of £10,000 a year. And that was a political choice. I want to ask the Chancellor more about productivity. She used the word once during her speech. What discussions has she had about improving productivity, which according to the Office for Budget Responsibility is still 5% lower in the public sector and has not recovered since the levels we enjoyed before the pandemic?

[Rachel Reeves]

The challenge of productivity sits across both the public and private sectors. In the last 14 years, productivity has flatlined in the public and private sectors and we need to boost both. We need to boost productivity in the public sector to ensure that we get better value for money for our public services, but we also need to improve productivity in our private sector so that we can improve living standards and have the money for our public services.

Economy, Welfare and Public Services

Harriett Baldwin Excerpts

Monday 22nd July 2024 Commons Chamber

[Dame Harriett Baldwin (West Worcestershire) (Con)]

May I start by adding my congratulations to the Chancellor on being the first woman to hold that office in the history of our country? At this rate, the Labour party might even have a female Prime Minister some time this century. I also thank the shadow Chancellor, my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt) for everything he did while in office. In particular, I thank the voters of West Worcestershire for returning me here for the fifth time.

I was one of those who was here in 2010. It is ironic that I should be following the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), because he was the one who left that famous note, “I’m sorry: there is no money left.” If people want to know what a bad economic legacy looks like, I was here in 2010 when we received one from the Labour party. The deficit was over 10% and rising and unemployment was over 8%. Inflation was nearly twice its target, and the banking system had just collapsed and had to be bailed out by taxpayers. We can contrast that with the economic legacy of 2024 that the new Government inherit.

Despite the economic costs of the pandemic and the energy crisis, the UK is enjoying the fastest growth in the G7. Unemployment is now half the rate it was in 2010. Inflation is back on target. We have a well-capitalised banking system, almost completely out of taxpayers’ hands. Wages are now rising faster than inflation. We are the fourth-largest exporter in the world. Members do not have to take my word for it; they can take the words of the International Monetary Fund, which in a recently published report said that

“the UK economy is approaching a soft landing”,

with

“growth recovering faster than expected…inflation has fallen faster than was envisaged…The banking system remains healthy”.

So I approach the economic measures in the King’s Speech with a degree of trepidation, because they come at a time when the economy was back on track. While I agree that “securing economic growth” is a fundamental mission of government, I would add the word “non-inflationary”. I have looked and looked through this King’s Speech, and I cannot see any measures that magic up economic growth. Growth does not just happen because it is written into the King’s Speech.

In my time as Chair of the Treasury Committee, we had the opportunity to have a private session with the IMF. It is interesting to observe that many of the measures put forward by the Government in the King’s Speech were in the IMF’s prescription for the UK economy. Reforming planning and building on our beloved green belt were from the IMF, as was strengthening the role of the Office for Budget Responsibility and crowding in private capital on net zero projects via a national wealth fund.

What else does the IMF want? Well, colleagues may not be surprised to learn that it also wants to see more taxes. It does not quite say it like that—it calls it “closing tax loopholes” or “mobilising additional revenues”. Some of the measures we heard about in our private session with the IMF were as follows. The first was setting capital gains tax rates in line with income tax rates. I hope that Ministers will rule that one out. The second was subjecting the sale of primary residences to capital gains tax. I hope that Ministers will rule that one out. The third was ending inheritance tax loopholes for pensions, family businesses and farms. I hope that Ministers will rule that one out. The fourth was revaluing all of England’s homes for council tax, and especially those over £320,000 in value. I hope that Ministers will rule that one out. The IMF also liked the idea of road pricing; I hope that Ministers will rule that one out. It also wants to bring forward considerably the date at which the state pension age increases.

Given that those are all tax measures that the IMF recommends, I am sure that the Chancellor is beginning to contemplate them. When the Government respond to today’s debate, I hope that they will specifically rule those things out, because the tax rises that the Government admit to already—the pensioner tax, the tax on education, and regulatory costs galore—are bad enough. Let us hear some specific denials on those other taxes.

[Madam Deputy Speaker (Dame Siobhain McDonagh)]

I call Georgia Gould for her maiden speech.

The Economy

Harriett Baldwin Excerpts

Wednesday 22nd May 2024 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Treasury Committee.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I welcome the Minister’s statement, which was crammed with useful facts and statistics. Yesterday, our Committee met representatives of the IMF in private, and we had a very interesting and informative discussion. As for yesterday’s report, the IMF points out that none of this good economic news would be happening had it not been for decisions made in previous Budgets. In particular, it states that the Government

“have delivered several helpful measures over the last three budgets…investment tax reliefs for businesses to boost investment, an expansion of childcare, and active labor market policies.”

This good news is not happening by accident; it is happening because a plan is in place, and the plan is working. Does the Minister agree?

[Bim Afolami]

I do agree, but let me draw attention to a specific point that is often ignored. The Chancellor’s decisions over the last two fiscal events have set the country up for growth in the future. My hon. Friend mentioned the policy on business expensing; that was a £10 billion tax cut for business. She mentioned childcare policies; those have helped millions of working families up and down the country. It is because of the cumulative effect of a series of important measures that we are able to stand up here today and say that while we are not there yet, the economy is starting to turn a corner.

HMRC Self-Assessment Helpline

Harriett Baldwin Excerpts

Wednesday 20th March 2024 Commons Chamber

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

May I thank the Financial Secretary and the Chancellor for listening to the howl of pain that came from ordinary taxpayers when they saw the announcement yesterday? Those who contact the HMRC hotline are the most law-abiding, tax paying people across this land.

This morning, the Treasury Committee has published more data showing that it is increasingly difficult to contact HMRC by telephone. While I fully endorse what the Minister has just said about the long-term strategy to move people online, it cannot be done by randomly shutting down HMRC’s telephone lines.

The Minister had an excellent digital track record in the private sector before he came into Parliament. May I urge him to use that experience to make this much more of a gradual transition for those law-abiding citizens of ours?

[Nigel Huddleston]

I thank my hon. Friend and the Select Committee for their work in this area. I know that HMRC customer service has been an area of focus for her and others for some time, and we appreciate the input. I recognise that she acknowledges the potential opportunities and the upside to encouraging more people to go online, but the point she makes is really important. HMRC has taken the feedback with good grace, because it is important that we move at the speed at which the public are willing to move. Of course, some people are not willing or able to move to purely online services.

I am sorry for not responding earlier to the hon. Member for Ealing North (James Murray) on whether the telephone lines will stay open. Yes, of course they will.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 19th March 2024 Commons Chamber

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

Did the Chancellor see an article yesterday in which the independent director of the Institute for Fiscal Studies confirmed that the average earner in the UK now has the lowest effective personal tax rate since 1975—lower than in America, France, Germany or any G7 country? Someone on £35,000—the average earnings for those working full time—faces an income tax and national insurance bill of nearly £2,000 less than they would have done on the same real earnings back in 2010. Does the Chancellor agree that now he has changed the rules on residence and domicile, the Opposition’s unfunded spending plans could lead to higher taxes—

[Mr Speaker]

Order. These are topical questions, and I want to get to the Members who have not yet been called.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 6th February 2024 Commons Chamber

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

If the Chancellor had an ambition to spend an additional £28 billion a year on something, will he explain to the House what level of tax that would impose on ordinary households?

[Jeremy Hunt]

I thank my hon. Friend for asking that question. I am curious to know where that figure of £28 billion has come from, but as she has asked the question, I will tell her that, if we were to stick to the fiscal rules, as the Labour party claims it will do, to increase spending by £28 billion would mean increasing income tax by 4% or increasing corporation tax, which Labour says it will cap, by 8%.

Finance Bill

Harriett Baldwin Excerpts

Report stage
Monday 5th February 2024 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

I will not detain the House for long, because I have the feeling that not all my colleagues are here to listen to my remarks. However, I want to make a couple of points.

First, having heard the Opposition complain about the measures in this Finance Bill, one would think that they did not like them, but they are not here this evening, they are not voting against Third Reading, and they have not tabled any solid proposals themselves. The only economic policy anyone has heard from the Opposition is the extra £28 billion that they want to impose in taxes on our businesses and our families.

[Katherine Fletcher (South Ribble) (Con)]

Does my hon. Friend agree that it is almost as though the Opposition do not have a plan?

[Harriett Baldwin]

I would agree with my hon. Friend.

I point out that the 110 pro-growth, pro-supply side measures in this Finance Bill have not stoked inflation. Indeed, inflation has fallen from over 11% down to 4%, and according to the Bank of England’s forecast, it is on track to reach 2%, so one has to commend the measures taken in this Bill, and I look forward to voting for that progress shortly.

I add my thanks to the officials from the Treasury and HMRC who have worked so hard on this legislation, only to hear that in a month’s time there will be another Budget and another Finance Bill. One has to recognise the hard work that has gone into this Bill, but I do worry that HMRC is being asked to do more and more. I worry about the fact that various thresholds have been frozen, and in particular, as the Minister knows, that the high-income child benefit charge is affecting more taxpayers up and down the land.

I am worried about one of the 110 measures—one that is within HMRC’s bailiwick. It is the measure allowing people to put fractional shares into their individual savings accounts. That was a very welcome announcement in last year’s autumn statement. I tried to put down an amendment to the Bill about it, but it was found not to be orderly because that change has not been legislated for this time around. In fact, the word is that HMRC will not be able to put that in place until at least the next tax year. Can I ask the Financial Secretary to convey the sense of urgency that I think we all feel about making these pro-growth, pro-investment changes?

There is a wide range of measures in this Finance Bill that I welcome, and I look forward to the Budget on 6 March. I think we can pay tribute to all the hard work that the Financial Secretary, his team, and all the Treasury and HMRC officials have put into this excellent piece of legislation.