HMRC Self-Assessment Helpline

Jim Shannon Excerpts

Wednesday 20th March 2024 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

First, let me thank the Minister for a positive response, and for trying to solve the problems; we appreciate that. Constituents have told my office about their struggle to get through to HMRC on the phone lines. There is no doubt that people still rely on services that allow them to speak to an individual. That is so important, as it is for us as MPs. We had 1 million calls unanswered in January alone, which illustrates clearly the problem that the Minister is trying to address. Does he not see that there must be an enhanced service for all of the United Kingdom of Great Britain and Northern Ireland, to ensure that all calls are answered and dealt with? The better option of a personal phone call is right, and we need a drastic change to be made.

[Nigel Huddleston]

It is important that HMRC commands respect—to a broad degree, it does—across the House and among our constituents, because that is how we can ensure that we comply with tax requirements. Where there is confusion, uncertainty or a valid question, it is important that people can get help, advice and support. For some people, it is appropriate to go online to get that, but that is not the case for everybody. As I said, the comments made today are very much appreciated. I suspect that the hon. Gentleman will recognise that, as I have said many times, it is important that all of us encourage and support the digitisation of these services, and the adoption of the app by our constituents, because that will help ensure that the time available is focused on those who most need help and support.

Royal Assent

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 19th March 2024 Commons Chamber

[Nigel Huddleston]

I thank my hon. Friend. It was a pleasure, as always, to meet him in his constituency on Friday, where we discussed this matter and many others. The Government will launch a consultation in due course on how to end this unfairness by administering the HICBC on a household rather than an individual basis. Doing so would require significant reform of the tax system, as our tax infrastructure does not currently have a mechanism to consider household income, but the Government plan to end the unfairness for single-earner families in the child benefit system by administering the HICBC on a household rather than an individual basis by April 2026.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for that. Child benefit income is an integral part of how families make their money last through the whole week. If there are any changes that will reduce it in any way, is it the Minister’s intention to ensure that those who have questions, difficulties or concerns have their concerns and wishes taken on board? It is really important that those facing financial changes can cope with the changes to come.

Wine Duty

Jim Shannon Excerpts

Tuesday 5th March 2024 Westminster Hall

[Will Quince]

My right hon. Friend and constituency neighbour is absolutely right to raise that issue, and she has long championed cutting the red tape and bureaucracy that British businesses face. As my right hon. Friend the Member for Stevenage (Stephen McPartland) said, this unintended consequence means that business faces not just extra cost but the significant administrative burden that comes with cost and time. My right hon. Friend the Member for Witham (Priti Patel) is right to point out that the new system is not simpler or fairer and that it has a huge cost implication.

[Jim Shannon (Strangford) (DUP)]

First, I commend the hon. Gentleman for securing this debate. James Nicholson Wine in Crossgar, which is in my constituency, is one of those excellent wine businesses that draws lots of people, not just because of the quality and wide variety of its wines but because it has also become a bit of a tourist attraction. It does lots of things. When it comes to the retention of jobs, does the hon. Gentleman share my concern that the Government’s proposed changes will undoubtedly—though I hope not—have an impact on job creation and job retention?

[Will Quince]

The hon. Gentleman is right to intervene on that point, because job creation and retention, including in his constituency, is important, as is our flourishing tourism sector. The growth in wine production across our country is something that we should celebrate; we should be proud of that and support it.

This debate is timely because we have some time on our hands. Obviously, the sooner we give notice to industry that the easement can continue, the lower the cost and administrative burden borne by industry. We have until 1 February 2025 to address this issue. I will have an ask for the Minister in a few moments, which I hope the hon. Gentleman will agree with.

I will just touch on one other element first, which is why wine is different. The easement recognises that wine is different from other categories of alcoholic drink. Wine cannot be made to a predetermined strength; the alcoholic strength of wine is determined by climate. I know that I do not need to teach anyone in this Chamber to suck eggs, but wine from warmer climates tends to be higher in alcohol than wine from cooler climates. Wine is not like beer or cider. And wine is subject to strict production rules, so in that respect it is also unlike beer and cider. As a consequence, there is very little that wine makers can do to lower the alcohol content.

It is estimated that there are over 100,000 different wines on the UK market. By comparison, there are less than 1,000 different ciders. Different vintages of wine can vary in strength, as is the case with some wines from the same year. Of course, that is one of the great pleasures of wine; wines from around the world are unique, while different vintages from the same vineyard can differ in strength and taste.

Taxing alcohol by strength, with lower rates for lower-strength products, might seem simpler on paper, but it takes absolutely no account of how different alcoholic products are consumed, including in what quantities and whether the product is diluted. This new system is much more complicated to administer for wine businesses and it penalises wine from warmer climates.

The differences between wine, spirits, beer and cider will remain if the easement ends. In practice, if the easement is abolished as planned, there will be 30 different payable amounts for wine in the 11.5% to 14.5% ABV range.

Coastal Tourism and Hospitality: Fiscal Support

Jim Shannon Excerpts

Thursday 22nd February 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Mrs Cummins. I thank the hon. Member for North Devon (Selaine Saxby) for leading the debate. She is always very enthusiastic and zealous about her constituency. I always like to hear what other right hon. and hon. Members say about their constituencies, because I find it mirrors what I have to say about mine.

I am going to take a wee step down Strangford way, and talk about some of the good things we have back home. I also want to support the hon. Lady in what she put forward, because this issue is so important. She represents and clearly understands a coastal constituency, which she is so passionate about. It is fantastic to be here and support her, as all our constituencies have those similarities. In another debate, she mentioned the impact that the recent storms and weather have had on businesses in her constituency. I was there for that one as well, and that is certainly something that needs to be addressed.

We are here to discuss many things. We look to the Minister, as we always do. He is always receptive to our comments and has an ability to respond in such a way that we all feel encouraged. We will feel better encouraged, of course, if there is some help financially or some ideas at the end. I am sure the Minister will have those ideas; I have no doubt about that. I am also pleased to see the shadow Ministers for the SNP and the Labour party, the hon. Members for Coatbridge, Chryston and Bellshill (Steven Bonnar) and for Ealing North (James Murray), in their places. They are both committed to making lives better and to ensuring that help for tourism and hospitality in coastal areas becomes a reality.

Why do I enjoy these debates? I enjoy them because, right away, there is a subject matter that I can relate to. The hon. Member for North Devon spoke very well about her constituency. These debates give me an opportunity to understand other areas, but also to show off the beauty of my constituency of Strangford. What is known as the Ards peninsula consists of numerous villages such as Ballywalter, Portavogie and Portaferry, which have stunning scenery. Strangford lough is an area of outstanding natural beauty and a Ramsar-designated area as well, so it is really important. I am privileged to live on the edge of that area.

There are many tourism attractions and hospitality businesses that are pivotal to the local economy and play a huge role for local visitors. I will try to do as the hon. Member for North Devon did. The businesses in my constituency are often family run, so when I speak about the individual businesses, I speak with the knowledge of having known them for many years. There is such a variety on offer. What makes Strangford so special is all those businesses that come together in the tourism and hospitality sector along the coastal areas.

We have numerous tourist attractions, such as the National Trust grounds at Mount Stewart, between Carrowdore, Greyabbey and Newtownards. Mount Stewart really is the jewel of the crown for Strangford, with well in excess of six-figure sums of people coming to visit at all times of year. During covid, those numbers did not drop very much. It has fabulous walks and hosts events such as jazz nights in the summer, not to mention the fact that it is a much-used location for weddings.

Another example of what we are doing is the land in Ballywalter that was transformed into a minigolf course as part of the farm diversification scheme. Jim Davidson, the guy I sat beside in primary school—that was not yesterday—is in farm diversification, and that is one of the things he has come up with. It is much loved and visited by families and couples from all over. It is has become a fun day for families whenever they are about. The sheer volume of hospitality that is offered is just incredible. You can probably guess, Mrs Cummins, that I am very enthusiastic and proud to tell others about it. I have told some Ministers here. The Minister in his place will no doubt be booking his trip to Strangford before the day is out, as a former Minister did. She came to visit my constituency and she enjoyed her time across the water.

Glastry Farm ice cream is another example of farm diversification. One of the dairy farmers in that area realised that there was potential for his ice cream. He has been developing that over the years and has done exceptionally well. Echlinville gin distillery is one of many gin and whiskey distilleries that we have across the constituency. The owners of Harrisons of Greyabbey are family friends and my next-door neighbours. It came out of nowhere and they have built it up into a restaurant, a café and a garden centre. The hospitality costs are part of the problem for them. They have a lovely, visual venue that looks right over Strangford lough, which is quite an attraction.

Local DUP councillor, David Kerr, started his own fruit and veg shop from his farm in Kircubbin; fantastic B&Bs in the village of Ballywalter, and a hotel in Portaferry, provide warm and homely accommodation for tourists; and the window of the very much sought after Orange Tree wedding venue—where I attended my niece’s wedding just last year—has a view of Strangford lough, so is coastal in every sense of the word. All the businesses I have mentioned, like those in the hon. Lady’s constituency, create jobs, wage packets in people’s pockets and opportunities for young people who want to have a part-time job or to start off somewhere. It is vital that the tourism and hospitality issue in coastal areas is addressed so that those jobs and opportunities can be retained. The list of what is on offer is truly endless.

As the hon. Member for North Devon said, exceptional circumstances, such as weather conditions, ultimately play a massive role in footfall at coastal areas. Especially after covid, we have witnessed many places shutting down as they cannot sustain the lack of business; it is just impossible for them to carry on. Furthermore, the rise in the cost of living has had a significant impact on businesses’ ability to pay their bills. I know that is true of the retail trade and those involved in hospitality.

Colin Neill is one of those guys who represents the industry; he is always vocal, factual and evidence-based, and he tells us about the pressures these businesses are under. Some smaller and medium businesses were being charged thousands of pounds for electricity and severely struggling to pay their gas and oil bills. This is ultimately not sustainable—it was not for some of them, and unfortunately they had to close or sell on to new management.

I replicate what the hon. Member for North Devon has said, and other Members will do likewise. Although we represent different parts of this great United Kingdom of Great Britain and Northern Ireland, we are probably seeing the same issue. When we look to the Minister for a response, we do so from the basis of facts on the ground and what people are telling us. There is certainly a call for Government to better support local businesses, especially in the coastal constituencies that we all represent.

Government incentives for more local businesses that want to choose to open are crucial to sustain the livelihoods of these areas. Over the last few years—the last two in particular—I have seen quite a few smaller hospitality businesses, shops and venues in my area close; it is important that we keep what we have and that those opportunities are in place. The Government must do more to support local businesses, especially through the Barnett consequentials and the block grant. That is my request to the Minister.

The Northern Ireland Affairs Committee heard from the Secretary of State this week. To be fair, I think he clearly understands that the Barnett consequential for Northern Ireland has not been okay for the last few years, and because of that the Government are committed to a change in the Barnett formula to something more along the lines of the Welsh model. That is where we think we should be, because it would reflect better our population growth—which has jumped up to 1.95 million, whereas it was approximately 1.75 million about 10 years ago—and the peculiarities of costs for Northern Ireland. I am very encouraged by the Secretary of State for Northern Ireland and by the Government’s dedication to making those changes. Although the Secretary of State had outlined a timescale, he did say in answer to my question in the Select Committee that the Government were looking very much at how they could make the process quicker. That would bring substantial moneys in and give equality to the Barnett consequential.

I would greatly appreciate it if the Minister would look at the matter and discuss it with the Secretary of State for Northern Ireland—there is a commitment and I think an agreement can be reached—to see whether any more can be done to support local businesses in coastal areas, including in my constituency, because they need help. I am very pleased, as I think most people are, to have the Northern Ireland Assembly back, because it ultimately ensures accountability in the process, but for us to do well and deliver for our constituents—as a very much integral part of the United Kingdom of Great Britain and Northern Ireland—we need to have that Barnett consequential change, which will enable us to support our businesses across the whole of Northern Ireland.

Independent School Fees: VAT

Jim Shannon Excerpts

Wednesday 21st February 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

Congratulations, Mr Henderson; it is a pleasure to serve under your chairship. I also congratulate the hon. Member for Northampton South (Andrew Lewer) on raising the issue.

In Northern Ireland, schooling is slightly different, in that we still have a transfer test that allows entrants into grammar schools. For that reason, there is not as great a preference for private schools as there would be were grammar schools to be removed. However, I am thankful that the DUP, with a now-working Assembly, has a Minister in place to protect the education system and retain grammar education for people of all classes and backgrounds.

To declare an interest, back in the ’60s—I probably go back further than nearly anybody in the Chamber—my mum and dad sent me to a boarding school in Coleraine, which gave me five years of good education. I am incredibly indebted to my mum and dad. In the ’60s especially, we had no holidays, and our car was an old banger that was kept forever—just so that their sons could have an education. I thank them for that. It gave me a great chance in this world, and I appreciate it.

Taxing private schools out of existence is not the route to take. The education of children is charitable in the extreme, and the only profits that are made are found in well-rounded children and well-paid teaching staff, which should be the goal of every school. That is what we should be looking at—nothing else. We should not achieve that goal by raising fees to such an extent that only the most elite can afford schooling, as in schools in Switzerland, for example.

The boarding school on the periphery of my constituency of Strangford is Rockport School, in North Down constituency. It draws a number of international students to its doors. That can only be good for the local area. It also generates money, cultural exchange and social engagement. I would hate to see that great school—its headteacher, Mr George Vance, cut his teeth at our local grammar school, Regent House, in my constituency —left in a position in which fees rise at an exorbitant rate and the benefits of the school are lost. That would be a tragedy.

There are 16 private schools registered in Northern Ireland, and there is a role for the sector. The work that they do deserves support; we should not set out to tear the sector down by stealth taxation. I am a believer in the public school system. My boys all went to Glastry high school, my granddaughters go to the local integrated school and my grandsons are in the local primary school. I have faith in the schooling system, but that does not mean that I want to abolish the smaller subsidised schools. The VAT proposal is not only aimed against the ultra-wealthy. It will go much further than that, which concerns me. With great respect to what Labour is putting forward, I am concerned that it will have a detrimental effect on the education and economy of this great nation of the United Kingdom of Great Britain and Northern Ireland.

UK Economy

Jim Shannon Excerpts

Monday 19th February 2024 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for all his answers. The questions have not been easy. The Office for National Statistics has revealed that there was a 0.3% decline in GDP between October and December 2023. Given that the strength of the economy was, and still is, the subject of one of the Prime Minister’s pledges, what steps is the Minister taking to reverse this decline, and to re-instil confidence in the Government’s economic plans?

[Bim Afolami]

I have already laid out the steps that we are taking, and there is a critical need to make sure that all the regions of our country benefit from those steps. That is one of the reasons why we put so much effort and focus into investment zones over the last couple of years. We hope that these investment zones will continue to increase growth in the economy, not only at a macro level, but for people in every region of this country—particularly in Northern Ireland and the other regions that perhaps did not benefit from this country’s previous growth. We are committed to strengthening that regionally.

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 6th February 2024 Commons Chamber

[Bim Afolami]

I thank my hon. Friend for his question, for writing to me and for standing up for the rights of his constituents. It is important the House knows that over 90% of investors voted to accept the scheme of arrangement. It is now up to the court to decide whether to approve it, and I therefore will not comment on it any further. I am happy to be in constant dialogue with him on this matter, as on many others.

[Jim Shannon (Strangford) (DUP)]

As the Minister knows, the Northern Ireland Assembly sits for the first time today to make a change for Northern Ireland. We would very much like to be part of the financial services sector, so what can he and the Government do to support the Northern Ireland Assembly in relation to the financial services sector, and to ensure that we in Northern Ireland can be part of this great country of the United Kingdom of Great Britain and Northern Ireland? Always better together.

[Bim Afolami]

I strongly echo the hon. Gentleman’s sentiments. I am very happy to engage with him and his colleagues from Northern Ireland to see what more I can do in the Treasury to work with him and, indeed, the Northern Ireland Executive, particularly to encourage our financial services institutions to invest more in Northern Ireland. I am very happy to discuss ways in which we can do that.

Finance Bill

Jim Shannon Excerpts

Report stage
Monday 5th February 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

On behalf of myself and my Liberal Democrat colleagues, I express our sympathies to the King and his family, and our hope that his treatment will prove to be successful.

I will speak to amendments 1, 2 and 3, in addition to new clause 5. To reiterate, the Liberal Democrats are not supportive of the Bill, which is a deception from the Government after years of cruel tax hikes on hard-working families. The legislation maintains the Government’s unfair tax rises on working families through the freezing of income tax thresholds, fails to invest properly in our public services, such as the NHS, and takes none of the vital steps needed to grow the UK economy. Some of the measures in the Bill have worthy aims, but the context is important from the outset.

Amendments 1, 2 and 3 make further changes to the new R&D regime defined in the Bill. While the changes may be necessary and sensible clarifications, just last week, colleagues in the other place, sitting on the Economic Affairs Committee, reported their concern

“that the number of significant R&D changes made in the last 5 years has led to a perception of instability in the UK’s R&D tax relief regime and undermined the intended incentive effect of the relief.”

What businesses need more than anything is certainty and stability. The Government’s chopping and changing on R&D is indicative of a wider failure to create a stable and settled environment in which business can flourish.

Perhaps the clearest example of that has been the scrapping of the UK’s industrial strategy and the disbanding of the independent body overseeing it. This short-sighted step has robbed businesses of the stability they need to grow. The constant changes to the R&D relief regime are a clear example of how that lack of foresight and stability can undermine the aim of economic growth. Once again, I urge the Government, even at this late stage, to relaunch an industrial strategy. A proper industrial strategy can create the conditions for sustainable growth, including through effective and clear incentives for R&D investment, especially among SMEs, and ensure that the UK’s regulatory, R&D and tax frameworks are geared towards fostering innovation.

New clause 5 introduces an exemption to the energy generator levy for new plant investments. The Liberal Democrats believe that, although this may help to strengthen investment in renewable energy and contribute towards our net zero targets, the Government’s own assessment of the measure notes that it is unlikely to affect the retail price of electricity for households as energy prices remain tied to gas prices.

The Bill, and the autumn statement from which it arose, does nothing to help families with soaring energy prices or to put a proper windfall tax on the oil and gas giants. The Government continue to sit on their hands as businesses and families struggle with energy price inflation. A windfall tax on the super-profits of oil and gas producers could raise significant revenue which could have paid for a targeted package of support for those worst affected by the energy crisis, by doubling the warm home discount and investing in an emergency home insulation scheme. It remains clear that November’s autumn statement and the Finance Bill both represent a missed opportunity to address the crisis in energy prices.

To conclude, while the Liberal Democrats are supportive of certain measures within the Bill, such as the extension of full expensing, we cannot support any legislation that arises from such a deceptive and unjust autumn statement. Ultimately, British households are seeing the biggest fall in living standards since the 1950s, and households across the country are crying out for real support from the Government, for action on the cost of living crisis and investment in our NHS, but all we have heard is more stale announcements from a Conservative Government who are completely out of touch.

[Jim Shannon (Strangford) (DUP)]

I concur with the comments made by others about King Charles, on my behalf and that of the Democratic Unionist party and his loyal subjects in the United Kingdom of Great Britain and Northern Ireland—especially Northern Ireland. I pray, as I know you do, Mr Deputy Speaker, as well as others in the Chamber, for King Charles and for the royal family. I pray for a speedy recovery to his health. I pray, as we all pray, to the great healer, omnipotent over all, that his family will know the peace of the Lord as they support him at this time.

I thank all those who have contributed to this Bill debate, and I thank you, Mr Deputy Speaker, for giving me the chance to participate. Understandably, much of the Bill focuses on the measures that are needed to deliver the autumn statement. The Minister understands that—I would like to welcome him to his place. As he knows, I hold him in great respect, and look forward to his responses at the end of this debate.

For every public sector pay rise that is rightly awarded, money must be raised, and therefore we all support the principle of this Bill in theory. However, in practice, not many of us want to sign off on a Bill that raises taxes for those who are struggling at present. Obviously, as prices have risen, obligations have gone up correspondingly. Northern Ireland has been seeking a complete removal of the air passenger duty as a way of enhancing our connectivity and our attractiveness to international business investment. As a result, the rise in APD is disappointing. I know what the Minister’s response will be. We are all aware of what the renewal of Stormont means: it means that we can look at this matter ourselves. None the less, the renewal of the Assembly has also highlighted the issue of the allocation of finances. It is clear that an overhaul of the funding formulas for Northern Ireland is necessary to meet the need in the long term.

Before I left the office this morning, I heard the Secretary of State for Northern Ireland on the radio saying that he hoped that a new funding formula would be found for Northern Ireland. We on the Northern Ireland Affairs Committee have also put forward that view. It is matter that involves all parties. The hon. Members for Belfast South (Claire Hanna) and for North Down (Stephen Farry) join us in wanting the same. That is three of the political parties in Northern Ireland that want that formula. There are also labour Members who support the view, along with a number of Conservatives with some concerns. We are all pushing for a formula similar to the Welsh system. If that comes into place, we in Northern Ireland would benefit, and that is only fair and right. I am highlighting this because if we as a party wished to do something about air passenger duty in the Northern Ireland Assembly, or if a cross-party group were wishing to do the same, we would need to have that formula in place. As I say, we are looking for fair funding for the future.

The £3.3 billion that has been made available now is money that many of my constituents believe has been withheld, and that is welcomed. Ever mindful of the positivity that came out of the debate last week, I say let us be positive in looking forward—

[Mr Deputy Speaker (Sir Roger Gale)]

Order. The hon. Gentleman understands that he has caught my eye and I have caught his. May I gently remind him that we are talking about the Government’s new clauses and amendments at the moment? There is a Third Reading debate ahead in which more measures can be raised if necessary, but, at the moment, will he please concentrate on the matter in hand?

[Jim Shannon]

I knew when I saw you looking at me, Mr Deputy Speaker, that you were going to tell me to get back on to the subject. I was about to do so. I thank you for that very kind reminder. You spoke to me in a very nice way, which was much appreciated.

I did refer to new clause 7 and air passenger duty, so I will quickly return to that. When I looked at a number of these issues addressed in the Bill, I could see a very clear and obvious theme: air passenger duty to rise in line with the retail price index; plastic packaging to rise in line with the consumer prices index; aggregate levy in line with RPI; tobacco levy in line with RPI plus 2%; and vehicle excise duty for cars, vans and motor bikes in line with RPI. So it continues and, to be honest, that seems to be understandable.

However, what is clear in the Finance Bill is that, although these things rise by RPI or CPI—I understand how the system works—the Government have again chosen to ignore the needs of the working middle class. I wish to make this point. I have done so in every finance debate, Mr Deputy Speaker. I have taken every opportunity I can to bring up this matter. I am seeking the support of the Minister on this. Indeed, I have asked the Minister about this on a number of occasions, so he knows about the issue. It is about the middle-class families who need that extra bit of help. They are paying their tax, but the £40,000 and £50,000 a year threshold is not helpful. If we wish to address the issues of new clause 6 in relation to permanent full expensing and the issue of air passenger duty—the things that people want—then we also have to address the issue of the threshold as well.

I gently say to the Minister that, when it comes to how we help our squeezed middle class—I am not talking about the very wealthy—can he look at changing the threshold? I ask the Minister for a direct response on that. I do not want him to talk about the higher income benefit charge or any other mitigation. I just want him to help us understand why those who pay into the tax system do not get as much as they should when they are struggling in a way that families back in 2013 could not have imagined. The Government know that to be the case—I think the Minister knows it to be the case—so when it comes to legislation that helps us to represent all of the people of this United Kingdom of Great Britain and Northern Ireland, let this Bill tonight be one that does just that.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Minister.

--- Later in debate ---

Some of the challenges with the calculations, and the point about rounding to the pound, have arisen because in April 2023 we cut APD on domestic flights by 50%, but not the rate for private jets, which therefore remained equal to that on short-haul international flights. The Bill provides for the uprating of APD rates by forecasted RPI in 2024-25, rounded to the nearest pound, and then of course there are the multipliers. Some of this is the sheer mathematics of ensuring that we do not have disparities. Current APD rates ensure that passengers in private jets pay significantly more tax than passengers on commercial flights. For example, in 2024-25, the higher rate for domestic private jet passengers will be more than 10 times the economy rate. Since the Government keep all rates, including all APD rates, under regular review, new clause 7 is unnecessary. I note the appeal of the hon. Member for Strangford (Jim Shannon), which I have heard before.

[Jim Shannon]

The Minister knows that I am particularly fond of him, but if he has heard my request before, let us now have action.

[Nigel Huddleston]

We always try to act; I cannot do everything, though. I note the hon. Gentleman’s comments. In a similar vein, my hon. Friend the Member for Totnes (Anthony Mangnall) raised the importance more broadly of the tourism, hospitality and leisure sector, and of the creative sector. He is absolutely right. Measures in the Bill and elsewhere will support all those sectors. Of course, business rates relief is vital to the tourism, retail, hospitality and leisure sector. My right hon. Friend the Member for Wokingham made a range of comments, some outside of my direct remit. I assure him that I will raise his points, which ranged from bonds to public sector efficiency—a vital area—with colleagues in the Department.

I was somewhat entertained by the comments of the Labour spokesman, the hon. Member for Ealing North, who was effectively asking me to commit to Conservative party policies as enthusiastically as he does, which is quite a turn up for the books. Of course, we welcome Labour’s support for the policies that we have announced, but there is clear blue water between the Labour party and the Conservative party in terms of principles about the size and scale of Government and the level of taxation. We have seen Labour’s flip-flopping over the £28 billion. I am not sure what the policy is today. It was rather rich of him to ask for commitments from me, given the flip-flopping that is so prevalent in every area of Labour policy.

At one point, the Labour party was supportive of Brexit. Now I do not know. Are Labour Members against it? Were they supportive of the right hon. Member for Islington North (Jeremy Corbyn) being Prime Minister, or do they not want him in the party? Are they in favour of nationalisation, or against it? Are they in favour of private sector involvement in the NHS, or against it? In a whole host of policy areas, we have seen persistent, perennial flip-flopping from the Opposition. I literally have goldfish whose commitments I would trust more than those from the Labour Front Bench. On those points, we will have to respectfully agree to disagree.

As I said, new clause 5 and the six amendments that the Government have tabled will help to ensure that the changes in the Bill apply as intended, and deliver a vital policy to protect renewable investment. They will make the tax environment more easily understood by business and protect vital tax revenue used to fund our public services. I therefore urge that they be added to the Bill. The six new clauses tabled by the Opposition seek to get the Government to publish data and information that is already being published through other sources, as I have outlined. I therefore urge the House to reject them.

Question put and agreed to.

New clause 5 accordingly read a Second time, and added to the Bill.

New Clause 6

Assessment of the impact of permanent full expensing

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the measures in clause 1 of this Act on—

(a) business investment, and

(b) economic growth.

(2) The review under subsection (1) must—

(a) assess the impact of full expensing being made permanent, and

(b) consider what other policies would support the effectiveness of the measures in clause 1 of this Act.”—(James Murray.)

This new clause would require the Chancellor to publish an assessment of the impact on investment and growth of the measures in this Act to make full expensing permanent, and to consider what other policies could support the effectiveness of permanent full expensing.

Brought up, and read the First time.

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

Future of UK Capital Markets

Jim Shannon Excerpts

Tuesday 30th January 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for Vale of Glamorgan on securing this debate, and I am pretty sure he will agree with what I am going to ask. Does he not agree that we cannot live up to the potential in the City market without implementing the necessary changes to promote safeguarding and safety? Those are critical. Does he believe that the Government and the Minister must be more proactive in that matter?

[Alun Cairns]

The hon. Member makes an extremely important point, and I will come on to it as I progress. He is right about the importance of standards. London’s reputation on standards is essential not only to London, but to every part of the United Kingdom and well beyond.

I was highlighting the challenges we have had in the UK. If there are challenges here in London, there are even greater challenges elsewhere. London still dominates the European market. However, the market is always evolving and we need to react. That being the case, I am pleased that the Government are already alive to change and, along with others, have launched a series of initiatives to analyse and act on what the UK needs to do to secure London’s important international role. We have seen the wholesale markets review, the UK listings review, the Kalifa review, the UK secondary capital raising review and the London stock exchange UK capital markets industry taskforce. Those are just some examples of what has been going on in recent times.

The influence of some of the reviews led to the Edinburgh reforms and the Chancellor’s Mansion House speech last year. Those are positive steps but, 12 months on from the Edinburgh reforms and six months on from the Mansion House compact, this is a good time to take stock. There is a need for co-ordination and assessment of developments. I am concerned that there has been a series of reviews, including those I mentioned earlier, but securing outcomes for the benefit of companies and investors must be our focus.

There is clearly a balance to be struck between evolution and revolution. The Chancellor is on record as saying that he favours evolution, which is fair enough, but we do need to see progression, too. We also need to consider the freedom that Brexit provides, against the diversion from standards in our closest markets. I am not saying that is easy, but regular review of progress is a positive step. There are wins available for the United Kingdom, and I look to the Government to respond.

The central piece of the Mansion House speech was an agreement with the largest UK defined contribution fund managers to invest at least 5% in private equities by 2030. There are also clear ambitions for defined benefits schemes, and I hope the Minister can provide a further update on that in his response. After all, when we consider that just 1% of the UK’s near £5 trillion assets are in private companies, the 5% target is a major step. I press the Minister by saying it is a good start but we need to go even further, and monitor progress towards that 2030 target. I also look to the Minister to provide further details on the defined benefits reforms and ambitions.

I recognise that the Chancellor announced plans to consolidate the local government scheme. As he said, when it comes to pension pots, big is beautiful. I get that, and the wider benefits that consolidation will bring. I would, however, add a note of caution. Large funds need large investments, which in general is a good thing, but we could end up squeezing small and mid-sized companies out of the equation. Guidance to secure the role of smaller private equity funds, which usually focus on smaller firms, would be helpful. I am concerned that large pension funds will have few places to go, other than to large private equity firms in the US, defeating much of the Government’s objectives.

The London stock exchange plans for an intermittent trading venue also offer new opportunities to bridge the gap, but it would be helpful to gain feedback on the timing of the regulatory approval. I also welcome the Treasury’s commitment to the replacement of the EU prospectus regulation with the Public Offers and Admissions to Trading Regulations 2023 that stem from Lord Hill’s listings review. That is welcome and will streamline the process significantly.

We obviously await detailed Financial Conduct Authority rules, and look to it to act swiftly in that respect. To credit the FCA, it has streamlined the listings process and loosened the rules for related party transactions. These reforms and others are very welcome, and I pay tribute to the Minister and his colleague for the part they have played. The scale of the reforms should be recognised and will have effect. However, the speed of change and the scale of reform need to increase. The capacity of the regulator will be a challenge, but we need to do whatever possible to support it to make the necessary changes we are asking of it, at pace.

In this technical debate, however, we need to remember why we are doing it, and what else can be done. We need to make it easier to raise capital in London, and the process of listing less clunky, while also focusing on attracting capital from domestic and foreign investors to provide the liquidity and funds for growth. London’s reputation for high standards is a good thing, and something we need to work with. We should continue the momentum to review the access for early stage business finance, to expand the scope and remove the potential cliff edge.

Tax incentives and greater digitalisation of capital markets processes can help too. Enterprise management incentives could play a part in widening the opportunity for staff to take a stake. Stamp duty changes are also relevant. We need a new approach to investing at both fund manager and retail level. Current regulations force fund managers towards bonds and Government debt to de-risk, which almost came back to bite us just a little over 12 months ago. Savers have also been encouraged to remove risk. The classification of investments needs to be reviewed, and better research needs to be available, akin to Rachel Kent’s report.

We need to re-engage the retail market in the opportunities of equities. I can recall—as I am sure you can, Ms Nokes—the privatisation of public services in the 1980s and 1990s, and the opportunities that provided for the public to invest. I have already mentioned, “If you see Sid tell him.” Regulations aimed at protecting the public from risk have removed legitimate opportunities like those. It is almost impossible for an adviser to facilitate investments directly into equities, in spite of today’s reduced costs and swifter processes. Proportionate regulations are required, along with further ISA reform. I can well recall the personal equity plans of the ’90s, which had a specific allowance for a single company PEP. That made capital investment accessible and relevant to the masses.

In closing, I want to recognise the changes and reforms that have taken place but to suggest that we need regular—at least annual—reviews of progress and of the impact of change, with all stakeholders involved. That would show the world that we are determined to get it right and to continue to evolve to ever-changing needs. We must always remember that gaining and accessing new capital is essential to growing business and the economy. By getting this right, we can offer greater returns for the public through better pension and investment returns, while maintaining the UK’s prominence in this vital industry.

I started off by talking about Arm, and I want to highlight a quote from Craig Coben, a prominent journalist in the field. He wrote that

“Arm should float in the US not because London has any particular flaws as a listing location, but rather because the scale, scope and depth of American capital markets make it a more compelling venue… Nasdaq-only flotation offers the broadest access to investors without the complications of two primary listings.”

That is just one example of the sort of change that can be brought about. I look to the Minister to continue his positive agenda.

Loan Charge

Jim Shannon Excerpts

Thursday 18th January 2024 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I thank my right hon. Friend the Member for East Antrim (Sammy Wilson) and the hon. Member for Buckingham (Greg Smith) for setting the scene, securing the debate and bringing this matter to the Chamber.

I believe that the job of this House is to act on behalf of our constituents. Although HMRC is independent, it is a tool of the Government, so there has to be some accountability. With great respect, I believe that the ball will lie at the feet of the Minister, whom I am very fond of, at the end of this debate. He will tell us what is going to happen.

The loan charge is a controversial tax policy that has affected thousands of employees, freelancers and contractors who were persuaded or, in many cases, coerced into using loan schemes to reduce their tax bills. The policy, introduced as a tax-related measure in 2019, gives HMRC the ability to collect taxes going back to April 1999. Some people have faced bankruptcy or depression, or even committed suicide, because of this. I ask the Minister how it is possible for HMRC to investigate individuals for unpaid taxes going as far back as 20 years, given that its limit for holding information on taxpayers is only seven years. I cannot quite get my head around that. How does a person challenge a 20-year-old tax demand? Does HMRC breach the GDPR by holding such information for this length of time?

The loan charge policy is unjust and unworkable. It is a retrospective tax that violates the principle of legal certainty and the rule of law. It is a punitive measure that targets innocent taxpayers who acted in good faith and followed professional advice. It has resulted in disastrous consequences, causing immense hardship, distress and tragedy for thousands of people across the country. It is a retrospective tax of an insidious nature, because it changes the rules after the game has been played. Imagine winning a football match 3-0 and then someone comes and says, “By the way, you didn’t win 3-0. You lost 3-0, and here’s how it happened.” That is what has happened with the loan charge. It ignores the fact that many people used schemes because they had no choice, as they were forced to do so by their employers or clients. It disregards the fact that many people who used schemes did not benefit from them, as they paid fees, interest and taxes on their loans.

We all seek professional advice daily in our jobs. If we follow it because we believe that it is legal and correct, we expect to be protected. In this case, people have not been protected. The loan charge is a retaliatory measure, and imposes disproportionate and unreasonable demands on taxpayers who have already paid their fair share. It calculates the tax liability based on the total amount of loans, regardless of the actual income or profit derived from them. It adds interest and penalties on top of the tax, inflating bills to astronomical levels. It denies the right to appeal, challenge or settle tax disputes at a fair and independent tribunal. It forces people to pay the tax in one lump sum, with no regard to their current financial situation or ability to pay.

HMRC employs a process that has caused immense hardship and distress for thousands of people across the country. It has pushed people into debt, poverty and homelessness. It has ruined careers, businesses and reputations. It has damaged mental health, wellbeing and relationships. It has driven people to despair and suicide. According to the Loan Charge Action Group, at least 10 people have taken their own lives because of the loan charge—a sobering figure. It has also identified 13 suicide attempts and 11 cases of serious self-harm. We need to remember that these are not just numbers, but human lives. These are constituents, colleagues, friends and family members. How many more lives will be lost before the Government listen and act? There is an immense responsibility on the Minister and I hope, on behalf of our constituents, that he can give us reassurances on this issue.

Perhaps the most striking feature of all this is the brutality of HMRC’s ruthless approach, which extends to cruelty. It is no stretch to say that people are effectively pursued to the grave and beyond, because bereaved families are ruthlessly pursued by HMRC for its demands. HMRC continues to be unyielding and relentless. It defends its actions by claiming that it has a duty to collect tax that is owed, and that it offers support and flexibility to those who are struggling. I believe that, above else, HMRC has a duty to be competent and to uphold its charter, which states that it will always act to “get things right”. HMRC is in breach of its own charter, and the Minister needs to come clean and give us some reassurance on that.

The loan charge policy has failed on every level—fiscal and human. It has failed to collect the tax that it claims is due. It has failed to uphold the principles of justice and fairness that underpin our tax system. It has failed to protect the rights and interests of taxpayers who have done nothing wrong. It has failed to prevent the harm and suffering that it has inflicted on thousands of people. It has failed to acknowledge the errors that have been made in implementing and enforcing the policy. It has failed to respond effectively to the recommendations and criticisms that have been made by various bodies, including the House of Lords Economic Affairs Committee, the loan charge and taxpayer fairness APPG, and the independent review led by Sir Amyas Morse.

To conclude in adherence to the timescale that I was given, the loan charge is a policy that must be abolished. It is not too late for the Minister and the Government to do the right thing. It is not too late to end this injustice. It is not too late to save lives. I urge the Minister and the Government to listen to the voices of reason, compassion and conscience, and to abolish the loan charge once and for all. The quicker it is done, the better.

--- Later in debate ---

[Nigel Huddleston]

I will give way to the hon. Member for Strangford.

[Jim Shannon]

Further to the point made by the hon. Member for Bath (Wera Hobhouse), I think of those who were unknowingly brought into the scheme by their employers and then found themselves with a financial burden that they were not aware of. I am reminded of the TV programme about the Post Office Horizon scandal, in which the terminology “the little people” was used. With the greatest of respect, these people are “the little people”—people who accept the systems that are put down before them. There must be a way to help them.

[Nigel Huddleston]

I completely understand where the hon. Gentleman is coming from in relation to going after employers that have been deceptive. The loan charge ensures that tax is paid in respect of individuals who entered into the schemes and received payments with no tax deducted, but where possible, HMRC has been seeking that tax from the employer in the first instance. I would like to reassure hon. Members that 80% of the revenue collected to date has come from employers, so we are targeting the employers, as he rightly points out.