Finance (No. 2) Bill

Debate between James Murray and Andrew Griffith

Committee of the whole House
Wednesday 19th April 2023 Commons Chamber

[Andrew Griffith]

I am sure that the significant number of people—over half a million—who depend on jobs in the financial sector, including in places such as Edinburgh, one of our great financial centres, are listening with consternation to the politics of envy. The hon. Lady singles out individual professions and invites us to set separate tax policies on the basis of a particular profession. That would be entirely wrong. If she had been listening very carefully—I understand that she wanted to get in, because this is a debate and is the opportunity to do so—she would have heard that I was talking about the annual tapered allowance. That is a feature in pensions policy that is there entirely to ensure that it continues to have a progressive nature. A banker who is earning £260,000 a year can get only a reduced amount. They cannot avail themselves of the same annual allowance as the hon. Lady’s friends, colleagues and those she seeks to represent in our public services. I can assure the House that this is not a charter for bankers. In fact, the annual tapered allowance remains unchanged in its operation. We are updating the thresholds here today.

Unless the hon. Lady wishes to withdraw her amendment at this point having heard the strength of our arguments, I will now turn briefly to the remaining clauses that we are debating today, covering collective money purchase pension arrangements and relief relating to net pay arrangements. Collective money purchase is a new type of pension arrangement. Clause 24 will prevent any unintended tax consequences should a collective money purchase scheme wind up. It will ensure that members and their dependants can receive payments and transfer funds without incurring an unauthorised payments tax charge—I do not think that that should be controversial for the House.

Finally, clause 25 relates to the introduction of top-up payments for the lowest earners—another highly progressive measure—who sit within net pay pension schemes. There are two main methods of giving pensions tax relief. Although they provide the same outcomes for most individuals, lower earners can have different levels of take-home pay depending on how their pension scheme is administered for tax purposes, and the Government believe they are right to rectify that.

Clause 25 makes changes to ensure that eligible low-earning individuals whose income sits below their personal allowance receive a taxpayer-funded top-up payment so that they will have broadly similar take-home pay regardless of how their pension scheme is administered for tax purposes. The hon. Member for Ealing North (James Murray) has tabled some amendments in this respect, and I wrote to him yesterday to provide some of the comfort that I think he was looking for. They were well-intentioned amendments, and I hope that the letter I have sent him gives him some of the satisfaction that he seeks. Fundamentally, we do not disagree with what he is trying to achieve, and it has the support of those who have been agitating for low-income earners. That measure could benefit an estimated 1.2 million low earners who save into an occupational pension under net pay arrangements.

In conclusion, as I have set out, we know that there is a problem that needs to be tackled. It is a fact that individuals are choosing to retire early to prevent incurring pension taxes. The changes today, which have been widely welcomed by sectoral representatives across the economy, will ensure that we can retain our most skilled and experienced workers in all sectors while also simplifying and improving the pension arrangements for millions of households. I therefore urge Members to accept that clauses 18 to 25 should stand part of the Bill.

[James Murray (Ealing North) (Lab/Co-op)]

Thank you, Dame Rosie, for the opportunity to respond on behalf of the Opposition. I wish to speak in support of the new clauses in my name and the name of my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare).

In this debate, we get the chance to discuss something rare: a tax cut from this Government. It is rare to see a tax cut from this Government, because we are so used to seeing tax rises from them—24 tax rises in the past few years. We now face a tax burden in this country that has risen to its highest level in 70 years. This month, people across the country are being hit by a double whammy of Tory tax rises. Freezes to income tax thresholds mean stealth tax rises for working people, while, at the same time, families are being hit by the Tories’ council tax bombshell.

Let me be clear about what these tax rises mean: the Government’s six-year freeze in the personal allowance will take its real value in 2027-28 back down to its 2013-14 level, while this year, council tax for the typical band D property will breach £2,000 for the first time. In the middle of a cost of living crisis, made worse by the Conservatives’ tax rises, one permanent tax cut was announced by the Chancellor in his Budget last month. That tax cut, introduced by the clauses we are debating today, sees £l billion of public money spent to benefit only the 1% with the biggest pension pots. It is an extraordinary way to spend £l billion in the middle of a cost of living crisis, which is still hitting people across this country hard. Ministers may claim that their decision was driven by a desire to get doctors back in work, but it is clear that they could have found a fair, targeted fix for doctors’ pensions at a fraction of the cost. The British Medical Association has said that a targeted doctors’ scheme could cost as little as £32 million to implement. The Conservative Chair of the Treasury Committee has said that even she was surprised that the Government did a blanket cut, rather than a bespoke policy for doctors. That is why we oppose the Government’s plans to abolish the lifetime allowance charge in clause 18 as part of their package of changes covered by clauses 18 to 23.

I wish to spend a few moments addressing clause 25, which covers a separate pensions matter, unrelated to the package of measures that we have concerns about. Clause 25 introduces, as the Minister has said, a scheme of “top-up payments” for low earners contributing to net pay pension schemes who currently miss out on a Government pension savings incentive. We know that tax relief on pension contributions can be given to individual scheme members in two ways: relief at source and net pay arrangements. In the case of the former, even non-taxpayers are given basic rate tax relief, but in the case of the latter they are not. As the Minister said, this is particularly unfair as individual people have no control over which form of scheme their employer chooses. We commend the efforts of the Low Incomes Tax Reform Group, along with pension providers, Age UK, the TUC, and others, to campaign for a change to the law, which is culminating in clause 25 before us today.

There are, however, a number of points of detail that we would like to raise with the Minister. To help draw these out, we have tabled amendments, three of which— amendments 27, 28 and 29—have been selected for debate today. I wish to put on record my thanks to the Low Incomes Tax Reform Group for its help in drafting these amendments.



We recognise that, under the measures proposed in clause 25, there is an onus on His Majesty’s Revenue and Customs to make payments to eligible individuals. While we hope, of course, that HMRC would always do the right thing, we think individuals should be able to challenge the amount paid if they think it is incorrect. With that in mind, amendment 27 would require HMRC to provide recipients of the relief with a calculation of the payment so that it can be checked. I therefore welcome confirmation from the Economic Secretary to the Treasury in a letter sent to me this morning that

“HMRC are already planning to provide customers with details of the payment and how it was calculated.”

I would welcome any further detail on that commitment that the Economic Secretary is able to give in his closing remarks.

Co-operatives, Mutuals and Friendly Societies Bill (First sitting)

Debate between James Murray and Andrew Griffith

Committee stage
Wednesday 30th November 2022 Public Bill Committees

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve on this Committee with you as Chair, Mr Mundell. I begin by thanking and warmly congratulating my hon. Friend the Member for Preston on securing cross-party support for this important Bill.

Britain has a long tradition of fostering the principles of co-operation and mutual support. The histories of the Co-operative party and the Labour party in this country are closely entwined. That relationship was institutionalised in 1927, when the Co-operative party and the Labour party entered an electoral agreement to stand joint candidates in elections. Nearly a hundred years later, that agreement is going strong—as one of many Labour and Co-operative MPs, I can attest to that.

To this day, both parties continue to make the case for co-operatives and friendly and mutual societies. I have always been proud to work with the Co-operative party to promote the co-operative businesses that are leading the way in improving equality and productivity at work. As a shadow Treasury Minister, I am keenly aware of the role that co-operatives and mutuals play in trade sectors as diverse as agriculture, renewable energy, retrofitting, creative industries, manufacturing, distribution, wholesale, retail and financial services.

Those British businesses play such an important role in supporting working people across the country in gaining greater control over their lives. In the financial services sector for example, building societies provide people with a low-risk, member-focused banking alternative and research has shown that trust in building societies is consistently high. Building societies are also typically well capitalised, making the sector more resilient to financial shocks and better able to lend and plan for the long term.

At the same time, credit unions serve 1.9 million members and 2.1 million depositors across the UK. Currently, around £1.7 billion has gone out in loans to credit union members, providing a crucial lifeline to the most financially vulnerable in society and preventing people from turning to loan sharks and high-interest loans.

With the right support, the co-operative sector has the potential to provide solutions to many of the crises and challenges we face as a country, such as the cost of living crisis or climate change. But despite the distinctly British character and history of mutually and co-operatively owned companies, and the important role they play in promoting financial responsibility and resilience among their members, the sector’s needs have too often been ignored. The number of mutual credit unions has fallen by more than 20% since 2016. Ordinary families have paid the price, with many forced into the arms of unethical lenders. That will only get worse as the cost of living crisis deepens.

Unlike the United States and many other European countries, the UK is uniquely lacking in mutually or co-operatively owned regional banks, which could play a crucial role in providing the affordable credit that small and medium-sized businesses need to reach net zero. The growth of co-operatives in this country is being held back by a legislative and regulatory framework that is not designed for co-operative businesses. Given their unique structure, co-operatives, mutuals and friendly societies are often excluded from traditional investment methods.

Sadly, as we have heard, the sector is also under threat from demutualisation. There was celebration across the co-operative and labour movements last year when members voted to reject the controversial takeover of the insurer Liverpool Victoria by the private equity firm Bain Capital, yet demutualisation remains a real and present threat to the sector. That is why the provisions contained in the Bill are so important and will help to ensure that mutual capital is maintained for its intended purpose.

We welcome the Government’s support for the Bill, and we would like to use this opportunity to urge the Government to consider wider reform, such as giving co-operatives more freedom to issue perpetual capital to fund investment, to secure the future of this important sector. The Financial Services and Markets Bill, which is currently passing through the House, contains some welcome and long overdue provisions, such as enabling credit unions to offer a wider range of products, but if the Treasury wants to unlock the economic potential of the sector, it could go much further. That is why I hope that, alongside supporting this Bill, the Government will consider supporting the amendments tabled by my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) to the Financial Services and Markets Bill, which would give the regulators—the Financial Conduct Authority and the Prudential Regulation Authority—an explicit remit to report on how they have considered specific business models, including mutuals and co-operatives, to ensure they are given parity of esteem with standard providers.

It is time to radically reform the rules governing the sector, to give greater flexibility and to allow mutuals and co-operative financial services to grow. The Labour party and the co-operative movement share a commitment to building a society in which power and wealth are shared fairly. That is why the Labour party and the Co-operative party have agreed an important ambition for government: we will double the size of the co-operative and mutual sector in the UK. We recognise that the Bill represents an important step toward achieving that aim, and we will be giving it our full support today.

[The Economic Secretary to the Treasury (Andrew Griffith)]

It is a pleasure to serve under your chairmanship, Mr Mundell, and it is always a pleasure to follow the hon. Member for Ealing North. I congratulate the hon. Member for Preston on reaching Committee stage with this important Bill and on the role played by him and his team in championing the needs of the mutuals sector. I also congratulate my predecessor, my hon. Friend the Member for North East Bedfordshire, who did so much to pilot the Bill in its early stages and has given it his wholehearted support. It is always a pleasure to work with him, and I am pleased that we can take it forward.

I am pleased with the warm reception that the Bill has received right across the sector and on both sides of the House. A number of my colleagues look forward to their membership of the co-operative movement, and would it not be a wonderful thing if the co-operative movement once again graced both sides of the House? I always pay tribute to my thought leader in this space, my hon. Friend the Member for Devizes, who has consistently advocated the benefits of a place-based approach to policy. We continue to hang on his every word as to how we can make that a reality as we seek to level up the United Kingdom.

My hon. Friend the Member for Gloucester raised some important points. I will write to him with what I consider to be the best legal position on the perfectly fair points he raised in pursuit of facilitating transactions that would protect mutuals, and not seek to undermine them or create a loophole, which I am sure is not the spirit of what he suggests. Nor would the Government want to see that or support that.

UK Infrastructure Bank Bill [ Lords ] (First sitting)

Debate between James Murray and Andrew Griffith

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[Andrew Griffith]

The steer provided from time to time in the context of the wider oversight of the investment bank, under its statutory objectives—effectively, the interpretation layer—is the right place. We do not disagree with the principle, but we could sit here all day and think of various admirable principles that we would like to put into statute. It is the Government’s contention that the provision would over-fetter the discretion of the bank and that it is not the appropriate vehicle. I understand that we will debate this point a number of times as we go through the Bill. The Government want the bank to get on with its job. We want to give it the statutory clarity it needs and to allow Parliament and Government, from time to time, if they wish, to give the steer required.

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve on the Committee with you as Chair today, Mr Davies. As we know, clause 2 concerns the objectives and activities of the UK Infrastructure Bank. Subsection (5) seeks to define the infrastructure and makes reference to the

“structures underpinning the circular economy, and nature-based solutions”,

which reflects an amendment made in the Lords that Government amendment 1 seeks to remove. The Government’s opposition to this measure seems to run counter to subsection (3)(a), which defines tackling climate change as an objective of the bank. I note that the Government do not oppose this objective of the bank, but they do seem to reject its delivery. We naturally oppose the amendment, which highlights how the Government seem to be all talk but unwilling to follow through on solutions to the climate emergency.

The truth is that the Government and the newly appointed Prime Minister have a record of failure on investing in green infrastructure for our country and our economy. While we welcome the bank’s focus on tackling climate change, no matter how well it plays its part, the British people need a Government with an effective plan to make the investments in the jobs, homes and energy supplies of the future a reality.

--- Later in debate ---

[Andrew Griffith]

These amendments are a proof positive of the Government having listened. If the hon. Member is so crushingly sceptical, perhaps he will oppose the amendments, which have been proffered following consultation with the DAs. It was never our intention to pursue these measures without an appropriate mechanism to engage with the DAs. That is why we are happy to bring forward these amendments today.

I would like to put on the record my gratitude to officials in Scotland, Northern Ireland and Wales for engaging so positively to date on the Bill. I think we all support the Bill’s ultimate objectives, and I am hopeful that it will secure a legislative consent motion from each of the devolved legislatures. I hope that hon. Members will support the amendments.

[James Murray]

Government amendment 3 concerns the consultation of appropriate national authorities when using statutory instruments to change regulations pertaining to the definition of infrastructure and the bank’s activities, as outlined in clause 2(7). If changing regulations under subsection (7) fell within the legislative competence of the Scottish Parliament, Senedd Cymru or the Northern Irish Assembly, the amendment would require the Treasury to consult the relevant devolved authority.

Similarly, Government amendment 4 would require the Treasury to consult the relevant devolved authority before including in a statement of strategic priorities for the bank matters within the legislative competence of the devolved authority.

Government amendment 6 simply defines “appropriate national authority” to mean the Scottish Ministers, the Welsh Ministers, or the Department for Infrastructure in Northern Ireland.

We are supportive of these amendments, as we are supportive of the Union. Labour recognises the very real importance of working closely with devolved Administrations, and we recognise the great work of Welsh Labour. Indeed, the Government could learn a thing or two from Welsh Labour, given its record for infrastructure investment. The Welsh infrastructure investment plan has already allocated more than £12 billion for key capital projects to transform and maintain the NHS estate, deliver 20,000 affordable homes and deliver rail infrastructure improvements.

Amendment 3 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Griffith]

Clause 2 is of central importance to the policy remit in which the bank will operate. I think that is why we have heard so many different—sometimes contrasting—views about how prescriptive that remit should be. The clause sets out the bank’s objectives and activities, as well as an inclusive definition of infrastructure, which is central to its scope—it is the UK infrastructure bank, after all. The clause also creates delegated powers to enable the Treasury to change the bank’s activities or the definition of infrastructure using secondary legislation under the affirmative procedure, so Parliament will have its say. The bank’s objectives to help the Government meet their climate change ambitions and to support levelling up across the UK are currently set out in the framework document. Clause 2(3) puts those on a statutory footing, which we hope sends a signal to the market about the Government’s commitment to these policy aims and the bank’s central role in helping deliver them.

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[Andrew Griffith]

My hon. Friend makes a very fair point. I will be happy to facilitate meetings between her— expert in transport as she is—and the infrastructure bank to get into some of those potential projects in more detail. She made a significant contribution as roads Minister.

Clause 2(5) sets out the definition of infrastructure. We have taken a power to amend the bank’s activities and the definition of infrastructure, using the affirmative procedure in both Houses. Across these different areas, clause 2 is the bedrock on which the bank will operate, and I commend it to the Committee.

[James Murray]

We know that after 12 years of low growth from the Conservatives there is a vital need to invest in the infrastructure of the future. Across the country, we need to invest in new transport, new digital infrastructure, new sources of energy that are sustainable and secure, and new high-quality jobs with decent pay. That is why we support the establishment of the UK Infrastructure Bank, and the Bill’s aim of putting it on a statutory footing.

We wanted the bank to address the deep economic inequalities across the country, which is why we sought to amend clause 2(3). My hon. Friend the Member for Erith and Thamesmead emphasised that, in supporting regional and local economic growth, the bank should reduce economic inequalities within and between regions of the United Kingdom to improve productivity, pay, jobs and living standards. In the same subsection, we wanted to add a third objective: for the bank to support supply chain resilience and the UK’s industrial strategy.

We wanted to retain two Lords amendments that strengthened the Bill: one that included the circular economy and nature-based solutions in the Bill’s definition of infrastructure, and one that Labour introduced to ensure that the Bill would focus on creating jobs and reducing economic inequalities. It is deeply disappointing that the Government have blocked those measures to make the UK Infrastructure Bank succeed and be fit for a modern, prosperous Britain. A Labour Government would deliver investment and loans in a way that supports the entire country, to meet the challenge of regional inequality and the commitments of our climate ambitions.

Question put and agreed to.

Clause 2, as amended, accordingly ordered to stand part of the Bill.

Clause 3

Strategic priorities and plans

Amendment made: 4, in clause 3, page 2, line 26, at end insert—

“(4A) The Treasury must consult the appropriate national authority about any provision which the Treasury proposes to include in a statement under this section and which concerns a subject matter provision about which would be within the legislative competence of—

(a) the Scottish Parliament, if contained in an Act of that Parliament,

(b) Senedd Cymru, if contained in an Act of the Senedd, or

(c) the Northern Ireland Assembly, if contained in an Act of that Assembly made without the Secretary of State’s consent.

(4B) The duty to consult imposed by subsection (4A) may be satisfied by consultation carried out before the passing of this Act.”—(Andrew Griffith.)

This amendment would require the Treasury to consult the relevant devolved authority before including in a statement of strategic priorities for the Bank any provision which the Treasury proposes to include in the statement and which concerns a subject matter within the legislative competence of the authority in question.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Griffith]

Clause 3 gives His Majesty’s Treasury the power to issue the bank with a strategic steer. We talked about that earlier as a mechanism by which the Government of the day can flexibly, and in an agile fashion, give the bank some direction. That steer will set out what, in the Government’s view, the bank should prioritise and focus its activities on. The strategic steer, and any revisions of it, will be required to be laid before Parliament.

The Chancellor issued the bank with its first strategic steer in March in order to inform the development of the bank’s inaugural strategic plan, which was published in June. That gave the opportunity to share an update on the Treasury’s interpretation of the bank’s strategic objectives and to clarify the definition of infrastructure that the bank should be working with. It highlighted the role that the bank can play in improving energy resilience, as well as setting out the outcome of the Treasury’s review of environmental objectives, confirming that there is significant scope in the bank’s existing objectives for it to invest in nature-based solutions.

We do not expect a steer to be issued more than once a Parliament, which will ensure that the bank has certainty in the long term to plan its investment strategy while keeping pace with Government priorities and ensuring policy alignment across infrastructure investment.

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[James Murray]

I beg to move amendment 19, in clause 4, page 2, line 38, at end insert

“and any subsequent, consequential, or relevant correspondence between the Treasury and the Bank.”

This amendment increases transparency surrounding directions issued by the Treasury to the Bank.

I will briefly set out what the clause will do, because that context is necessary to understand what our amendment would do in turn. Clause 4 would grant the Treasury the power to give directions to the UK Infrastructure Bank about how to deliver on its objectives. Subsection (2) would require the bank to comply with those directions, but the Treasury would be unable to give those directions until it had consulted with the bank’s board of directors. The Treasury would be required to publish the directions as soon as practicable, and under an upcoming framework document the bank would have the right to publish a reservation notice in respect of the direction.

The bank has been described by the Government as operationally independent, but we know that the Treasury is the sole stakeholder in the bank. It is therefore possible for the Treasury to exert influence on the bank’s activities as a result of its ownership stake under the normal principles of company law. The Bill’s explanatory notes set out the Government’s position, stating:

“The Government’s policy is that such influence should be used sparingly in practice, and that the default position should be that the Bank is independent as regards its operations and investment decisions.”

Given that the Treasury is the sole stakeholder in the bank, however, we have concerns about the procedural transparency of the clause. We are conscious that the clause provides the procedural framework for the Government to direct the bank. As we have heard several times this morning, the Prime Minister’s infamous Tunbridge Wells speech indicates the need for an extra degree of caution.

The explanatory notes state that the Government’s use of influence will be constrained by the need

“to act rationally and proportionately”,

but the record of the Government causes us to have doubts. We therefore wish to enhance the safeguards in the Bill and ensure that the Government do not exert undue influence over the activity of the bank. Conservative Governments have recently rejected Treasury orthodoxy, and the bank may in future raise concerns about the direction of Government policy. As the bank is compelled to abide by directions given by the Treasury, it is important that we have a transparent process to allow for scrutiny in those circumstances. That is why we tabled amendment 19, which seeks to insert a requirement that

“any subsequent, consequential, or relevant correspondence between the Treasury and the Bank”

be made public. The purpose of the amendment is to increase transparency surrounding directions issued by the Treasury to the bank. It will simply require the Treasury to publish additional relevant correspondence between the Treasury and the bank, providing fuller context to any directions issued and enabling the proper scrutiny of investments made with public money.

[Andrew Griffith]

The hon. Member’s amendment is a solution in search of a problem. The bank is constituted with taxpayers’ money, for which Ministers are accountable to Parliament and to Select Committees, which have the power to compel information and witnesses. There is a strong degree of accountability, and it is entirely appropriate that Ministers, from whichever side of the House they may one day hail, have the ability to direct the bank as necessary, as part of the matrix of ministerial accountability. I therefore reject the amendment. The Government will not support it, simply because we consider it to be wholly unnecessary.

[James Murray]

I take no reassurance whatever from the Minister’s comments, so I will push this amendment to a vote.

Question put, That the amendment be made.

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[Andrew Griffith]

Clause 4 contains a provision for His Majesty’s Treasury to issue the bank with a direction of a general or specific nature about how the bank is to deliver its statutory objectives. To address the concerns raised by the hon. Member for Ealing North, the bank must be consulted before any direction is given, and any direction given must then be published by the Treasury. Ministers are rightly accountable to Parliament for this bank, and for any element of risk to the Exchequer or taxpayer that its activities create. That is right, even though the bank will be operationally independent for its day-to-day operations and its own investment decisions.

It is therefore considered necessary and entirely appropriate that the Government have a reserved power to direct the bank about how it is to deliver its objectives. Without a power of direction in statute, His Majesty’s Treasury could still direct the bank; however, there would be situations where the board would refuse a direction if the power were not in statute, given directors’ obligations under the Companies Act 2006. The two things could conflict. The purpose of the clause is to clarify where that conflict could arise, and the power of direction in statute removes that potential.

I assure right hon. and hon. Members from both sides of the House that the Government expect to use the power infrequently. Constrained powers of direction are a relatively common feature of similar institutions, such as the British Business Bank and HMRC. I commend the clause to the Committee.

[James Murray]

I rise to speak briefly, as I set out our views on clause 4 more widely in the context of amendment 19, which I am disappointed that the Government chose to oppose. We were simply aiming to improve procedural transparency; it makes me wonder why the Government are so keen to avoid that being part of the Bill. Having lost that amendment, we will not be opposing the clause as it now stands.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Financial Assistance

Question proposed, That the clause stand part of the Bill.

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[James Murray]

Amendment 12 seeks to limit the maximum number of directors on the board of the bank, moving it down from 14 to eight. Amendment 13 stipulates that at least four of the board members must be non-executive directors. We will be opposing amendment 12, as we believe that it is important for a range of views and expertise to be represented on the board of the bank. We believe that narrowing the board simply narrows the potential for diverse insight and ideas. As we will push for in amendment 20, which I will speak to shortly, we believe it is vital that there be a workers’ representative on the board. Narrowing the maximum figure reduces the board’s capacity to gain workers’ insight. On amendment 13, we will abstain.

[Andrew Griffith]

I thank my hon. Friend the Member for North East Bedfordshire for rightly raising the important subject of governance, which relates to the arms length body in scope today. It is a very important point when considering how we manage efficiency and the will of Parliament through arms-length bodies. While not disagreeing in principle, the Government will not be supporting amendments 12 or 13, but I would be very happy to engage with my hon. Friend to see if there is something practical we can do.

My concern is with reducing the maximum board size to eight in the UK governance structure under the combined code, which my hon. Friend may have views on as well. Unlike in the US, in the UK we have a large number of committees of boards—rather more than is the case in the US. The limit of eight may present the challenge of not being able to successfully staff and structure those committees. That would be a concern to me.

The amendment requiring non-executive directors to hold a majority on the board is sensible, but I believe that would be the objective of the organisation anyway, and it complies with the corporate governance code to have a majority of non-executive directors. I do not think we need a requirement in legislation, but it is something I am happy to explore with my hon. Friend to give him the comfort he seeks without us moving out of potential compliance. I would ask him to withdraw his amendment.

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[David Linden]

I rise to indicate my support for amendment 20—[Interruption]—which I gather is also being given by Comrade Fuller on the other side of the Committee. It is very welcome that the Labour party, having recently departed from its relationship with trade unions and workers, is finally seeing the light and coming back to the idea that it ought to have a strong association with trade unions. The amendment probably could have been tidied up slightly, perhaps to include somebody from the Trades Union Congress, but on the broad thrust of the argument I very much support the idea that the Labour party is once again deciding to go back to its roots, rather than flirt too much with the policy of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer).

[Andrew Griffith]

I shall strongly resist the temptation to debate the fundamental merits of workers on boards, overturning the existing system of UK corporate governance, or indeed the nationality of any particular worker. Why stop at one English worker when one could have representatives of workers from all the DAs?

In thoroughly opposing the amendment, I confirm that the bank will comply with the corporate governance code, which provides, as the hon. Member for Ealing North outlined, a number of options through which a company can achieve the desired representation. The bank has already designated Marianne Økland to take on the role of facilitating engagement with the workforce. That will be set out in the annual report when published. I ask, perhaps fruitlessly, the hon. Member not to waste the Committee’s time by pressing the amendment to a vote, given that the bank is complying with the existing UK corporate governance code.

[James Murray]

While I welcome the Minister’s assurance about the bank’s compliance with the UK corporate governance code, I am disappointed that he feels that a vote on worker representation on the board would be a waste of time. It is an issue of great importance to the Opposition, so we will press the amendment to a vote.

Question put, That the amendment be made.

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[Andrew Griffith]

The clause sets out the core provisions on the make-up of, and appointment to, the bank’s board of directors. The clause requires that the board has a number of directors that is broadly consistent with comparable boards. It allows for the appointment of directors to have a spread of expertise across banking, infrastructure finance and climate change mitigation, as well as the appropriate balance between executive and non-executive directors. The clause sets out that the chair, chief executive officer and non-execs will be appointed by the Chancellor of the Exchequer.

All non-exec directors are recruited with reference to guidelines set out by the Office of the Commissioner for Public Appointments, and are being appointed based on the skills that they could bring to the board around the UKIB’s mandate. Throughout the process we have been conscious of the need to ensure a broad spread of expertise, as well as cognitive diversity. Finally, the clause contains provisions on the circumstances that would prohibit a person from continuing as a non-exec director, such as bankruptcy, or mental or physical incapacitation. I recommend that the clause stand part of the Bill.

[James Murray]

As the Minister outlined, clause 7 concerns the appointment and tenure of directors to the board of the bank. We note that it requires at least five but no more than 14 directors; that the board’s chair, chief executive officer and non-executive directors be appointed by the Chancellor of the Exchequer; that the tenure of non-executive directors not exceed four years; and that a person may not be appointed as non-executive director more than twice.

The clause also requires that a person ceases to be a non-executive director as soon as they cease to be a director by virtue of any provision of the Companies Act 2006, or are otherwise prohibited by law; they become bankrupt or their estate is sequestrated; a registered medical professional treating them provides the written opinion that that person is incapable of serving as a director due to physical or mental incapacity for more than three months; or the person has resigned from the position in accordance with the notification procedures of the bank. We recognise that the number of directors is broadly consistent with comparable boards, such as the Bank of England board. We also understand that the intention behind that is to provide flexibility and a wide spread of expertise.

Health and Social Care Levy Bill

Debate between James Murray and Andrew Griffith

2nd reading
Tuesday 14th September 2021 Commons Chamber

[James Murray]

The right hon. Lady raises points about the backlog in the NHS. We have had 10 years of a Conservative Government, of whom she has been a key part. She is responsible for the backlog, along with all her colleagues on the Conservative Benches. They should take some responsibility for the mess they have caused.

We know that social care desperately needs more funding, but are the Government raising taxes for those with large portfolios of stocks and shares? No. Are they increasing taxes on landlords who rent out multiple properties? No. Are they going further to tackle large online multinationals that shift their profits overseas? No. The Government have gone for a tax rise on working people and businesses creating jobs.

Last week, the Government tried to soften the blow by claiming that their tax plans are fair because this tax rise on working people is accompanied by a tax rise on dividends. So where is the tax rise on dividends? The Government’s proposal documents last week admitted that that might be legislated for in the next Finance Bill, and indeed there is nothing on raising taxes on dividends in the Bill in front of us today. They are pulling out the stops to increase taxes on working people as quickly as possible, ramming this legislation through in one day, but when it comes to dividends and a tax that the Prime Minister acknowledged last week would affect

“better-off business owners and investors”—[Official Report, 7 September 2021; Vol. 700, c. 154.]

suddenly there is no rush. Let us not fall for the claim that the dividend tax rise will make the Government’s proposals fair. The dividend tax—if it ever happens; we have only the Prime Minister’s word for that, after all— would raise only 5% of the total revenue. Some 95% of the tax bill would land on employment.

If we want to understand the impact of this tax rise on people and their jobs, let us start by looking at the Government’s own view. Their own tax information and impact note on this tax rise was signed off personally by the Financial Secretary to the Treasury and published on 9 September—curiously, this was a couple of days after the Government’s proposals were announced. It says in no uncertain terms:

"There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

Five years ago, the Prime Minister’s predecessor began her time in office claiming to be an ally for people who are “just about managing”. Now we have the Government’s own report admitting that they are the ones who will suffer.

The report is blunt too about the impact of this tax rise on businesses. It makes it clear:

“Behavioural effects are likely to be large, and these will include...business decisions around wage bills and recruitment.”

It is there in the Government's own analysis: this will be a tax blow to jobs and wages. Others agree, with the chair of the Federation of Small Businesses saying last week:

“Breaking a manifesto promise by increasing National Insurance Contributions just at the moment when firms are struggling to get back on their feet would be devastating for small businesses and the local communities they serve...If this hike happens, fewer jobs will be created by the UK’s small business community over the crucial months ahead.”

The British Chambers of Commerce agrees, warning:

“A rise in National Insurance Contributions would represent a hammer blow to jobs growth at this crucial point in the UK's economic recovery.”

The CBI president said:

“National Insurance increase will directly hurt a business’s ability to hire staff, at a time when businesses have faced a torrid 18 months and are now fighting crippling labour shortages.”

Do the Financial Secretary and the Chief Secretary think the Federation of Small Businesses, the British Chambers of Commerce and the CBI are all wrong? Perhaps the Financial Secretary will get up to tell me the answer to that. [Interruption.] Sorry, I thought the Financial Secretary was keen to get to his feet to respond to my question. He does not want to, no. He does not want to answer whether he thinks the FSB, the BCC and the CBI are all wrong. Do other Members from his party think they are wrong?

[Andrew Griffith (Arundel and South Downs) (Con)]

rose—

[James Murray]

Perhaps the hon. Gentleman would like to intervene to answer that question.

[Andrew Griffith]

I am just wondering whether the hon. Gentleman’s tax primer in low corporate taxes has enlightened him with any ideas of his own as to how his party would propose to fund this. The proposal on the table is a broad-based tax. How would he fund this?

[James Murray]

We have been absolutely clear that when it comes to funding the NHS and social care, those with the broadest shoulders should pay the most. The idea that this is a “broad-based” tax rise is completely wrong. The hon. Gentleman knows that, we know that and the British public know that. I note that when he got to his feet, he did not answer the question as to whether he thought the FSB, the BCC and the CBI are all wrong. Next time another Conservative Member gets to their feet, I would like to hear their answer to that. I would also like to know whether they think TUC general secretary Frances O’Grady was wrong when she said last week:

“We know social care needs extra funding. But the prime minister is raiding the pockets of low-paid workers, while leaving the wealthy barely touched.”

That is the fundamental unfairness at the heart of this Government’s tax rise.

The Prime Minister and Chancellor are desperate to pretend this is the only way to raise the money, but that simply is not true. A fairer approach would see funding for the NHS, social care and all our public services borne by those with the broadest shoulders—this would include those with incomes from large financial assets, multiple rental properties, and other income from wealth contributing more. But they have not been considered by this Government, who would prefer to hit workers instead.

This Government are landing a tax rise, which they claim will go toward social care, on low-paid social care workers themselves. The truth is that this is a tax on working people and their jobs. This tax rise tells us nothing about how the Government plan to fix social care, but it tells us everything we need to know about the instincts of the Tories when they are in power. That is why it is wrong. That is why we will be voting against this Bill. And that is why Conservative MPs would do well to join us tonight if, come the next election, they want to be able to look their constituents in the eye.

Finance (No. 2) Bill

Debate between James Murray and Andrew Griffith

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

[James Murray]

I thank the hon. Member for setting out some of the figures about the impacts of the Bill. I can add to that by saying that if we take the freezes to the personal allowances, along with the cuts to NHS workers’ pay, the council tax hike and the cut to universal credit, the real scale of the impact of the Government’s decisions becomes clear. A newly qualified nurse living with their partner and two children in rented accommodation will lose more than £1,100 a year. It is plain wrong to hit families across the country in that way, but that sense of injustice is made all the more acute by the fact that that increase of costs to families comes years before any rise in corporation tax. At the same time, through the Bill the Government are letting tech giants stop paying tax altogether.

Last week, we voted against the Bill on Second Reading. Our reasoned amendment made it clear that key to the decision was its effect on family finances, through what it does and what it does nothing to stop. Today, we have the chance to stop the measure in the Bill that will make every income tax payer in the country pay more next year. We will seek a vote on clause 5, and I urge Conservative Members to join us in knocking this attack on families out of the Bill. By doing so, we would allow the Government to come back in their next Finance Bill with a fairer approach—one that does not put a misguided tax break for big business ahead of the money that families have in their pockets.

The other clauses that are being debated concern a range of other matters. Clauses 24 to 26 relate to the impact of covid on those benefiting from enterprise management incentives, cycle-to-work schemes and employer-provided coronavirus tests. Meanwhile, clause 31 exempts those receiving tax credits from paying income tax on the one-off covid-19 support scheme payment. Clause 32 clarifies the tax treatment of payments made under the self-employed income support scheme. Clause 33 provides for a relief where businesses repay covid support payments that are no longer required. Finally, clause 28 freezes the standard lifetime allowances for pensions immediately until 2025-26, while clause 40 does the same for the capital gains tax annual exempt amount and clause 86 does the same for inheritance tax thresholds.

Through our new clause 23, we ask that all the measures being considered today are considered for their effects on the finances of different households across the UK. We want to see a fair, progressive tax system in this country, so we want the Government to be transparent about the effect that their changes will have on people’s lives. The question of how changes affect the people of this country should always be the Government’s overriding concern when introducing changes to the tax system.

That is why our new clause would require that the Government analyse, review and be transparent about how their changes will affect households at different levels of income. It would further require Ministers to set out how the changes would affect people on the basis of age, disability, race, sex and other protected characteristics, and how they would affect people living in different nations and regions of the UK. There is significant evidence that women, those from black, Asian and ethnic minority communities, young people and disabled people have been disproportionately affected throughout the pandemic. The Budget report itself says:

“The economic impact of restrictions has not been felt equally. Staff in the hardest hit, largely consumer-facing sectors, such as hospitality, are more likely to be young, female, from an ethnic minority, and lower paid.”

It is therefore indefensible that not one of many supporting documents to last month’s Budget statement, nor the Bill, was an equality impact assessment.

Our new clause gives the Government a chance to right that wrong, but while that analysis is vital in setting out how different people will be affected by the Government’s choices, we know already that the biggest and most immediate impact of the changes in the Bill—and of the Government’s wider policy choices, on which the Bill is silent—will be to take money from the pockets of people across the country this month, this autumn and next year.

[Andrew Griffith (Arundel and South Downs) (Con)]

We hear from the hon. Gentleman that his party seeks to strike out the single largest intervention that will help the recovery, in the form of the super-deduction, which businesses have already told me is mobilising incremental investment. I would be fascinated to hear his view of new clause 7, which was put forward by many of his recent colleagues, including many of those who were on the Front Bench, to increase the rate of income tax to 55%. What does he think of that?