Covid-19
Lindsay Hoyle Excerpts(3 years, 11 months ago)
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Mr Speaker
We now come to the general debate on covid-19. I call Minister Penny Mordaunt to move the motion. I ask her to speak for no more than 12 minutes.
The Economy
Lindsay Hoyle Excerpts(4 years ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Thank you, Mr Speaker, for giving me the opportunity to update the House on our economic response to the coronavirus. Let me say at the outset that I am grateful to Members from all parts of this House, including the hon. Member for Oxford East (Anneliese Dodds), the new shadow Chancellor, for their contributions to this debate.
We should be in no doubt about the seriousness of the economic situation. The Office for Budget Responsibility has published a scenario showing that the coronavirus will have very significant impacts, both at home and in the global economy. More than 1.5 million new claims have been made to universal credit, over 4 million jobs have now been furloughed, and survey evidence suggests that a quarter of businesses have stopped trading. These are already tough times and there will be more to come.
Although our interventions have saved millions of jobs and businesses, we cannot save every job and every business. I understand and share people’s anxiety, but right now the most important thing that we can do to protect our economy is to protect the health of our people. As my right hon. Friend the Prime Minister said this morning, we are making progress. We are beginning to turn the tide but, if we lose control of the virus again, we risk seeing a second spike, which we all want to avoid. The goal of our economic strategy is to provide a bridge over what will be a sharp and significant crisis by keeping as many people as possible in their existing jobs, supporting viable businesses to stay afloat and protecting the incomes of the most vulnerable. In other words, it is to maintain the productive capacity of the British economy, so that, once we are able to refine the public health restrictions, we can as quickly as possible get people back to work, businesses reopening and the self-employed trading again.
The Office for Budget Responsibility has been clear that, if we had not taken the actions that we have, the situation would be much worse. The International Monetary Fund has said that our approach has been “aggressive” and “right”. Taken together, I believe our response has been one of the most comprehensive of any country anywhere in the world. Working closely with the Bank of England, business groups, trades unions, banks, charities and many others around the country, we have developed a plan to protect public services, people and businesses.
Let me address each of those areas in turn. Public services such as the NHS are on the frontline of the fight against coronavirus. I repeat today that, whatever resources our NHS needs, it will get. At the Budget in March, I announced a coronavirus emergency response fund, initially allocating £5 billion. We have now provided more than three times that initial amount, with the NHS and public services receiving £16 billion so far.
We are also providing extensive support for people’s jobs and incomes. Our most important and far-reaching policy is the coronavirus jobs retention scheme to keep people in employment. The scheme launched on schedule last week, and I am pleased to report that the first grants have just been paid. Around half a million employers have already applied for help to pay the wages of over 4 million furloughed jobs—jobs that might otherwise have been lost.
Her Majesty’s Revenue and Customs is also on track to deliver the self-employed income support scheme, as promised in early June, and we will publish detailed guidance this week. Alongside those new interventions, we have strengthened our existing safety net with increases to universal credit, the local housing allowance and statutory sick pay. We have reinforced our social fabric, too, with £750 million for the charity sector.
Of course, the best way to support people is to protect their jobs, and that means supporting the businesses that employ them. Our plan to help businesses means the following: almost half of all business properties in England will pay no business rates this year; almost 1 million business premises can now receive cash grants of up to £10,000 or £25,000; and more than 2 million businesses have been offered a VAT deferral, saving them an average of £30,000.
Another 2.7 million people will be able to defer their self-assessment payments; almost 60,000 people and businesses have put “time to pay” arrangements in place with HMRC; up to 2 million employers will be able to access the statutory sick pay rebate, up to £48,000 per firm; more than £14 billion of lending has been issued through the Bank of England’s financing facility and more than 20,000 coronavirus business interruption loans have now been approved. Of course, all that is on top of our furlough scheme, with payments now arriving.
Taken together, our plans are protecting millions of people and businesses across our country, through a set of interventions in the economy on a scale that we have never attempted before, and they are working. However, I know that some small businesses are still struggling to gain access to credit. They are, in many ways, the businesses most exposed to the impact of the coronavirus, and often find it harder to access credit in the first place. If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through this crisis. Some businesses will not want to take on more debt, which is why our focus has been on cash grants, tax cuts and tax deferrals, but for others, loans will be part of the answer.
Today we are announcing a new micro-loans scheme, providing a simple, quick, easy solution for those in need of smaller loans. Businesses will be able to apply for new bounce-back loans, for 25% of their turnover, up to a maximum of £50,000, with the Government paying the interest for the first 12 months. I and the Economic Secretary to the Treasury have been in close talks with the banks, and I am pleased to say that those loans will be available from 9 am next Monday.
There will be no forward-looking test of business liability, and no complex eligibility criteria; there will be just a simple, quick, standard form for businesses to fill in. For most firms, loans should arrive within 24 hours of approval. I have decided that, for this specific scheme, the Government will support lending by guaranteeing to the lender 100% of the loan.
Let me address that point directly. I have heard calls for the Government to underwrite all our loan schemes with 100% guarantees, but I remain unconvinced by the case for doing that universally. We should not ask ordinary taxpayers of today and tomorrow to bear the entire risk of lending almost unlimited sums to businesses that in some cases may have very little prospect of paying those loans back, and not necessarily because of the impact of the coronavirus. I do not think it is appropriate to provide 100% guarantees on all of our schemes. Instead, these new bounce-back loans carefully target that extraordinary level of state support at those who need it most. The £50,000 cap balances the risk to the taxpayer with the need to support our smallest businesses.
Right now, the most important thing for the health of our economy is the health of our people. We are making progress in our fight against the virus, but we are not there yet. Our strategy is to protect people and businesses through this crisis, by backing our public services and NHS with increased funding, strengthening our safety net to support those most in need, and supporting people to stay in work and keep their businesses going. Our response is comprehensive, coherent and co-ordinated. It is, I believe, the right approach. I hope I can continue to rely on the support and advice of all right hon. and hon. Members as I commend this statement to the House.
Mr Speaker
I now welcome the new shadow Chancellor, Anneliese Dodds, who has five minutes to respond.
Jim Shannon (Strangford) (DUP) [V]
Thank you very much, Mr Speaker. I am here virtually, but at a distance.
I thank the Chancellor for all he has done, is doing and will do in the future. Some in the hospitality sector, in particular private bus companies, do not have premises and fall just outside the present small business support scheme. Will the Chancellor agree to extend the scheme? Similarly, the coronavirus bank loan scheme has had 36,000 applications, but only 16,000 have been approved. Will the Chancellor ramp up underwriting cover from 80% to 100%, as other countries have been doing?
Mr Speaker
Order. That concludes scrutiny proceedings for today. I will now suspend the House for 30 minutes to allow Members to safely leave the Chamber and to allow broadcasting colleagues to make the necessary technical changes prior to the start of substantive proceedings.
Mr Speaker
Welcome to the first substantive proceedings of the House of Commons in hybrid format. As Speaker, I announced last Wednesday that parliamentary privilege applies to all participants in proceedings and the rules and courtesies apply as far as practicable in the same way to all Members, whether participating virtually or here in the Chamber. I remind hon. Members that interventions are not possible and hon. Members present in the Chamber must not give way to other Members in the same position as that is inconsistent with the principle of equality. I advise all hon. Members speaking virtually to use their own timing device to assist them in dealing with speaking limits.
Finance Bill
Lindsay Hoyle ExcerptsMonday 27th April 2020
(4 years ago)
Commons ChamberRead Full debate Finance Act 2020 View all Finance Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Jesse Norman)
I beg to move, That the Bill be now read a Second time.
I congratulate the new shadow Chancellor and her shadow Treasury team on their appointments. Six weeks ago, on 11 March, this House assembled to hear my right hon. Friend the Chancellor deliver his Budget speech. How long ago that seems now when every day feels like a decade. A Budget statement is a central part of our democracy; indeed, it is at the very heart of a parliamentary tradition of accountability for taxation that goes back to the 13th century. It is deeply sobering to reflect that that 11 March moment might be the last great parliamentary occasion we have in this Chamber for some time to come.
Truly, we know better now. We live in a disenchanted world, a world of self-isolation, of social distancing, of shielding, of lockdown. In the Treasury and across Government as a whole we have worked around the clock since then to respond to the extraordinary challenges posed by the coronavirus to people’s lives and livelihoods. The same has been true in this Palace of Westminster. I know that I speak for all my colleagues in saying that I have the greatest respect for the work that you, Mr Speaker, and so many others, including parliamentarians across this House, have done to prevent covid-19 from becoming a threat to our democracy itself. I pay special tribute to all the Clerks and staff of this House of Commons and of the Palace of Westminster for working so quickly and creatively to adapt to this new reality and for their skill in drawing on the flexibility and resilience of our uncodified constitution to create a virtual Parliament.
When this Chamber was bombed and destroyed on the night of Saturday 10 May 1941, with the fires raging, the roof fallen in and the Lobbies and corridors gutted, it was decided that the Commons should sit immediately in Church House. Extraordinary measures were undertaken at great speed to transfer proceedings to the new location. The Commons rarely sat on Mondays, so it duly reconvened in the normal way on Tuesday 13 May, but it did so in Church House. There were oral questions to the Secretary of State for War, including on officers’ outfits and the collection of swill and vegetable waste from military units, followed by a full Order Paper of business and, at the end, a short statement from the Prime Minister in which he reported that the old Chamber was damaged beyond immediate repair and that preparations were already under way for a move to a further location, if that should be necessary. Thus the biggest and the worst raid of the blitz resulted in the loss of not one single day—indeed, not one single minute—of sitting time for Parliament. It is a moment of which this country can be intensely proud.
Why so much determination and so much speed? It was so that, as Churchill said:
“hon. Members may be reassured that the work of our Parliamentary institutions will not be interrupted by enemy action”.—[Official Report, 13 May 1941; Vol. 371, c. 1086.]
It was so British democracy should not be thought to have been destroyed amid the burning ruins of the Commons Chamber, and so that the great thread of public scrutiny and parliamentary accountability that gives legitimacy and authority to our Government should not be broken. So it is again today, Mr Speaker. For that, we are, and we will always be, profoundly grateful. I hope that we shall soon return to the close combat of political business, whether that be the intimate interrogation of the Chamber, the camaraderie of the Lobbies or the noise and clamour of a full House packed to the rafters with MPs, press and public looking on, all fully intent on our national political business; the House of Commons as the cockpit of the nation.
Here again, history can be our guide. When the Chamber was rebuilt, special care was taken to make it, as it had been, too small for the number of Members. That was at the specific insistence of Churchill. In his words, the essence of good House of Commons speaking is the “conversational style”. This requires a
“fairly small space, and there should be on great occasions a sense of crowd and urgency…a sense that great matters are being decided, there and then, by the House”.
Not for Churchill the vast, empty hall of Deputies, the amphitheatre, or what he called “Harangues from a rostrum”. Without that collective sense of crowd and urgency and the ever-shifting energy of the House in action, we lose something vital.
Mr Speaker, I ask you this: can we not also gain from this great virtual experiment? Through new forms of questioning and calmer, more dispassionate cross-examination of Government, may we not find glimmers of new possibility amid the present gloom? I believe that we can. The significance of today’s debate lies not just in this Finance Bill, important though it is; it marks a new legislative beginning for Parliament. As we go forward together, I hope that we in this House can restore not merely our old ways, but what was best in them, and use this moment to add, to develop, to reform and to make them better still.
When my right hon. Friend the Chancellor addressed the House on 11 March, he announced a Budget focused on delivering the Government’s manifesto commitments from the general election last year. He did not only that; he also set out and carefully explained the reasons for a very ambitious and wide-ranging set of measures designed to tackle the coronavirus head-on, to buttress our frontline services and to support people, families and businesses affected by the pandemic.
Since then the Government have gone much further still. Indeed, we have announced what we believe to be the most comprehensive and far-reaching economic response to covid-19 in the developed world, and Ministers and public servants across Government have worked to deliver it. Among its many different packages, that response includes a job retention scheme, which guarantees 80% of the wages of furloughed workers, and which has been conceived, developed and launched by Her Majesty’s Revenue and Customs in just a few weeks.
Alongside the job retention scheme is a similarly generous scheme aimed at supporting the self-employed for 80% of taxable trading profits up to £50,000. This covers some 95% of those who are mainly self-employed, including cleaners, taxi drivers, plumbers, musicians, journalists, electricians, childminders and many others. Businesses can also benefit from more than £300 billion-worth of Government-backed loans, numerous tax cuts and grants, with a business rates holiday for the worst-affected sectors of the economy. There has also been a further package of measures aimed at the charitable sector.
These are unprecedented measures for unprecedented times. The impact of the coronavirus falls not only on businesses, but directly on the well-being of some of the most vulnerable people in our society, whom the Government are determined to protect. For that reason, the Government have raised by £1,000 the universal credit standard allowance and working tax credit basic element for a year. Almost a billion pounds has been allocated so that the local housing allowance can cover at least 30% of market rent, and the Government have offered vouchers or meals at home for children who would otherwise be eligible for free school meals.
This Bill goes beyond the immediate response to covid-19 by delivering the Government’s manifesto commitment to make the tax system fairer and more proportionate. For example, care leavers who start apprenticeships will pay no income tax on bursary payments that they receive. I am delighted to say to recipients of payments under the Windrush compensation scheme and the troubles permanent disablement payment scheme that those payments will be exempt from income, inheritance and capital gains tax, and inheritance tax will not be collected on Kindertransport fund payments.
Taxes are rarely popular or straightforward, but they are necessary to support our public services. Now, more than ever, the Government have a duty to ensure that the rules are applied correctly. Last month, my right hon. Friend the Chief Secretary to the Treasury announced that, in the light of covid-19, the Government will delay the introduction of reforms to the off-payroll working rules in order to give businesses more time to adapt. However, he was clear that the Government remain fully committed to introducing these reforms to ensure that people working like employees but through their own limited companies pay broadly the same tax as individuals who are employed directly. That has not changed, and the Government will introduce an amendment to the Bill in due course to legislate for a new commencement date of 6 April 2021. The Government will use the additional time to commission further external research into the long-term effects of the reforms in the public sector, with the intention that that research will be available before the reforms come into effect in the private sector in April 2021.
Meanwhile, this Bill implements the recommendations of Sir Amyas Morse’s independent review of the loan charge. It will mean that the loan charge no longer applies to loans entered into before 9 December 2010, which is the point at which Sir Amyas found that the law put beyond doubt the fact that disguised remuneration schemes were a form of tax avoidance. The Bill also brings forward legislation to repay taxpayers who voluntarily settled for years that are no longer in scope, while those still able to pay will be able to spread their loan balance over three tax years to suit their finances.
The Budget also included changes to help businesses to prosper for years to come. This Bill will implement the Government’s manifesto commitment to increase the research and development expenditure credit rates from 12% to 13% in order to help drive growth and productivity across the UK, and to continue to support this country’s proud history of innovation. It also raises the structures and buildings allowance rate from 2% to 3%, which should help to stimulate long-term capital investment in the United Kingdom by strengthening the business case for investment in shops, factories and agricultural buildings. Those changes apply nationwide, underlining the fact that, even in these times of uncertainty, the Government are seeking to level up investment and opportunity right across the whole United Kingdom.
The Government have made successive cuts to the rate of corporation tax since 2010 and we now have the lowest headline rate in the G20. That has helped to create a corporate tax system that supports British businesses, boosts economic growth and strengthens the UK’s pull for inward investment.
However, the extra benefits of lowering corporation tax rates still further must be balanced against other objectives, such as funding the NHS and the public services on which we all rely. That is why the Chancellor announced that the Government will not cut the corporation tax rate further this year, but instead will maintain it at 19%, in line with their manifesto commitment.
Likewise, while the Government are committed to encouraging entrepreneurial activity, the evidence indicates that entrepreneurs’ relief in its current form is neither effective in stimulating new business growth nor good value for money. By reducing the lifetime limit from £10 million to £1 million, we are returning the relief to its original purpose while continuing to promote and reward enterprise.
Finally, following an extensive period of consultation, the Bill will implement the digital services tax. Digital businesses providing search engines, social media platforms and online marketplaces derive significant value from their UK users, but current international corporate tax rules mean that that value is not reflected in the level of UK tax they pay. Setting a tax on revenues from those digital services at a rate of 2% will make the system fairer and should raise up to £2 billion over the next five years, but the Government’s ultimate goal is to secure a long-term global solution. We are working with international partners through the Organisation for Economic Co-operation and Development to agree a way forward.
Covid-19 is the most pressing challenge for the country—and, indeed, the world—at the moment, but it is by no means the only one. Notwithstanding our intense focus on tackling the pandemic, the Government have not lost sight of longer-term public concerns, notably the need for the UK to move to a greener and more sustainable economy in the years ahead. Now that we have left the European Union and as we prepare to leave the EU emissions trading system, this Bill introduces legislation for both a charging power to create a UK emissions trading system, and a carbon emissions tax.
This twin-track approach is designed to ensure that, whatever the circumstances, the UK will have an effective carbon pricing regime in place. In the Budget, the Chancellor also revealed key elements of the plastic packaging tax, which should significantly increase the use of recycled materials in packaging. This Bill allows preparatory spending ahead of its introduction.
The Bill will also encourage the uptake of zero-emission vehicles by removing them from the vehicle excise duty expensive car supplement, which will mean that employers and employees pay no tax on zero-emission company cars in 2020-21. The United Kingdom has led the world in introducing legally binding carbon emissions reduction targets; these measures underline once again how serious the Government are about meeting those targets.
My right hon. Friend the Prime Minister has made it quite clear that we will do what it takes to support our public services and key workers as they respond to this pandemic, and to safeguard jobs and businesses so that our economy can bounce back as quickly as possible. Yet we must also look to the future. The advent of a virtual Parliament is a chance to chart new territory, and this Bill is a first step on that journey.
The Bill also redeems the manifesto promises of the last election. It points the way to a fairer tax system and a greener and more sustainable future. With the support of Members from across the House, and as we look beyond lockdown, it gives us all an opportunity to cement the United Kingdom’s place as one of the most innovative, exciting and enterprising nations in the world. For all those reasons, I commend this Bill to the House.
Oral Answers to Questions
Lindsay Hoyle Excerpts(4 years, 1 month ago)
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Duncan Baker
Clearly, we are living through unprecedented times, and I want to say thank you to all the Treasury team for the incredible work they are doing—working throughout the night—to help businesses up and down the country. Many sectors will be hugely impacted by coronavirus, not least my home of North Norfolk. We are now seeing shops being shut on the high street—quite rightly so—and I just want the Minister to consider that they will be hit enormously. When we come out of this pandemic, a 2% or 3% VAT-style tax rise to help high streets would be very well considered and welcome. Let us just remember that our last great leader was Margaret Thatcher, who said that we are a nation of shopkeepers—let us help them.
Mr Speaker
Order. I think the hon. Gentleman ought not to take advantage. We are just starting. I think he has got the message.
Jesse Norman
I speak for all my colleagues in saying how grateful I am to my hon. Friend for his kind regards and wishes. Of course, all taxes are taken into account and monitored by the Treasury, and will be subject to consideration at future fiscal events. We are living through very unusual times. I hope my hon. Friend understands that the high street, which was under pressure years before the current outbreak, is something we have supported over a period of time, most recently with a comprehensive package of support. He will be aware of the specific measures we have taken to support eligible retail, hospitality and leisure properties.
John Glen
I am very aware of the 1,700 people who work in this area in the right hon. Gentleman’s constituency and across Wales and Scotland. I am also aware that he wrote to the previous Exchequer Secretary, who moved post before he could get a reply. At the moment, renewables are five times more expensive than wind and solar, but the Government will engage in a dialogue with the industry as we look to resolve this and move forward constructively.
Paul Bristow (Peterborough) (Con)
Rishi Sunak
The detailed eligibility criteria are online and will be provided by local authorities. The grants of £10,000 are done on a per premise basis for businesses that are in receipt of small business rate relief and rural rate relief. There are larger grants for those in the retail, leisure and hospitality sector of up to £25,000. The Business Secretary has written already to local authorities, which are, as we speak, writing to businesses that are eligible for those grants to seek their bank details and start making cash payments as soon as is practically possible.
Mr Speaker
Before we move on to the urgent question, I should say that I am bothered that Members are rather close in some areas of the Chamber. If it is possible to spread out, I would be very grateful.
Self-employed Persons: Financial Support
Lindsay Hoyle Excerpts(4 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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The Chief Secretary to the Treasury (Steve Barclay)
We know that many self-employed people are in real distress, but we are working urgently to address this problem, and I say to the self-employed: we have not forgotten you—help is coming. But the policy and delivery are complex, and we cannot and should not rush to announce a scheme that gives rise to more questions than it answers. The Chancellor has held meetings this morning with representatives of the self-employed and will continue to meet them this afternoon.
It is important to remember that covid-19 is an urgent challenge to our entire economy, affecting workers of all types. It is essential that we respond swiftly, so that people can keep their jobs and businesses can carry on. That is the basis of our coherent, co-ordinated and comprehensive plan. It is a plan that gives those on the frontline the tools they need to tackle the virus, with all the support the NHS needs, backed up by an initial £5 billion fund for public services. It is a plan that puts a shoulder behind business with a statutory sick pay relief package for small and medium-sized enterprises, business rates holidays for all retail hospitality, leisure and nursery businesses in England, and grant funding for small enterprises, as well as support through Her Majesty’s Revenue and Customs’ time to pay scheme. As of yesterday, businesses with cash-flow concerns are also able to access the coronavirus business interruption loan scheme, offering up to £5 million for SMEs through the British Business Bank. For larger firms—[Interruption.]
Mr Speaker
Order. It might be easier if Members pass notes down the line, rather than going round and speaking to everybody.
Steve Barclay
The coronavirus business interruption loan scheme, on which Members across the House have raised questions, is now available, offering up to £5 million for SMEs through the British Business Bank. For larger firms, the Bank of England is providing a new facility to help support liquidity.
I urge all Members of the House to continue speaking—as I know many are doing—to the business leaders in their constituencies and ensure they are aware that they are not alone and that help is coming. In this House, we are all standing behind business and everyone who works in it. To encourage businesses to retain staff, we are deferring VAT, and my right hon. Friend the Chancellor has announced the job retention scheme to facilitate that.
Taken together, this is a huge programme of support, and we will keep thousands of workers in jobs, but we know that there are thousands of self-employed people who have been wondering what the future holds for them. My right hon. Friend the Chancellor has already set out a range of measures in support. Sole traders and freelancers will be able to access the business interruption loan scheme as long as activity is channelled through a business account. We are also removing the minimum income floor for the self-employed workers affected by coronavirus so that they too can access universal credit in full. That is not only the standard allowance, but a wider package of support for those with children, disabilities or, indeed, housing needs. At the same time, the next self-assessment income tax payments will be deferred until January 2021, helping those who have set money aside for those payments with immediate cash flow. That means there is a package on tax, on loans and, more widely, through universal credit, to support those with that safety net.
Let me reassure everyone in this House and the self-employed people they represent that further help is indeed coming, but we have to make sure we get this right and that we target the right support to those who are most in need. The Chancellor will provide a further update on support for the self-employed in the coming days.
Several hon. Members rose—
Steve Barclay
May I first welcome the constructive tone that the right hon. Gentleman has struck? His offer to come to the Treasury might contravene some of the recent social distancing requirements, but I appreciate the spirit in which it was made. He is right that we need to move at pace and to work together. That is why my right hon. Friend the Chancellor was involved in further meetings this morning, as he will be later today, as we work through how to take this forward.
The Chancellor was drawing attention to the complexity of the target population. I think that a number of Members would have concerns, not least as we look to the future, if we were subsidising some very wealthy self-employed people. I take the point that they are not the ones getting in touch with the right hon. Gentleman, but it is important that our approach is mindful of the target population.
The right hon. Gentleman raised the issue of reassurance, which is a legitimate concern, and one shared across the House. I draw the attention of his constituents, and those of colleagues across the House, to the Chancellor’s comments this morning. We are working at pace on this and we recognise the issue being raised. I hope that provides reassurance, certainly in terms of an announcement, although the operation of any solution may take further time, as the Chancellor set out.
Considerable work is being done, but the population is complex. We are looking at the burdens of different delivery mechanisms, whether on the Department for Work and Pensions or local authorities, which have their own staffing pressures because of the number who are ill. That is why we are exercising flexibility in lots of other areas in order to reprioritise resources, but it is important that the scheme is deliverable and mindful of the other challenges we are dealing with.
Several hon. Members rose—
Mr Speaker
I am sorry that we have to come to an end. There will be disappointment, but if we had helped each other, nobody would have missed out.
Coronavirus: Employment Support
Lindsay Hoyle Excerpts(4 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Several hon. Members rose—
Mr Speaker
To assist the House, I can say that I expect this to run until around 11.15.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my hon. Friend and I agree with him—that is something that the Government should be moving on now, but there is something else the Government could do literally today. Universal credit has three basic levers that can all be pulled now enormously to help people who are in work. First, the taper could be lowered dramatically at this stage, which would push the floor right up underneath people in work at the moment, allowing them to fall back on that if employers cannot deal with them. Secondly, Ministers could change benefit rates, allowing a greater expanse of money to flow to claimants: that could be done today. The third area where my hon. Friend could act is to look at the waiting time and reduce that almost immediately. Those three things were always built into the system for flexibility and they can be done today. They can be delivered within days by a Department that already has the ability to do that while he gets on with the other facilities.
Several hon. Members rose—
Rob Butler (Aylesbury) (Con)
There are more micro-businesses in Buckinghamshire than in any other county in the country. I pay tribute to Buckinghamshire Business First, which is working extremely hard to try to support them, but may I urge my hon. Friend to take the unique needs of micro-businesses into account in the measures that he is developing?
Matt Western (Warwick and Leamington) (Lab)
I am afraid that it is quite evident that the Government have lost support and confidence across the Chamber, and that is echoed by the markets. We have seen a 5% drop in sterling, which will translate into higher food and energy prices for already hard-pressed households. In Warwick and Leamington, we are losing jobs and good businesses. Will the Minister support the comments of the right hon. Members for Chingford and Woodford Green (Sir Iain Duncan Smith) and for Tunbridge Wells (Greg Clark) and introduce some form of universal income support to restore both the supply and demand side?
John Glen
I acknowledge the point on the minimum income guarantee, which I have responded to previously. On co-ordination with the Bank of England, we have worked with the Financial Conduct Authority to introduce better forbearance measures for the banks so that they can act effectively and use their flexibilities. Obviously the bridging facility that the Bank of England has brought forward for bigger businesses is also important.
John Glen
I understand the use of the word “desperation”—I recognise that, and that is why we are working urgently to have a package of measures, and extend that package of measures, so that there are a range of options to businesses of different sizes in different situations, based on their sector and the risks that they face.
Jim Shannon (Strangford) (DUP)
The first coronavirus death has been confirmed in Northern Ireland, and I wish, through the House, to convey our commiserations to the family.
I have been contacted by a school bus driver on a zero-hours contract who normally works 45 hours a week but has now been told that there is no work for him until further notice. Does his employer not have an obligation to pay his wages, and the wages of others in the same boat? What is the Minister’s message to help this employee?
Economic Update
Lindsay Hoyle Excerpts(4 years, 1 month ago)
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Sir Edward Davey (Kingston and Surbiton) (LD)
Our economy is suffering a heart attack, one deeper and bigger than in 2008, so the Chancellor has a serious responsibility and he deserves constructive engagement from everyone in this House, including my party. His main task is to ensure that there is confidence among the business community and the British people. I have to tell him that although he has made a good start, this is still very much a work in progress. His package for the business sector was large, but may I urge him to say far more about the loan terms he is putting forward? Many small businesses will be very worried about taking on this debt. May I also urge him to go much faster to give confidence to the ordinary people who are suffering in our constituencies?
Tax Avoidance and Evasion
Lindsay Hoyle Excerpts(4 years, 2 months ago)
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Paul Blomfield (Sheffield Central) (Lab)
Each year I organise an annual community consultation, and each year there has been growing anger among my constituents about the sense that they are paying their fair share from very ordinary incomes while the level of corporate tax avoidance has been growing out of control as successive Conservative Governments have failed to step up to the mark in tackling it. We are apparently losing over £1 billion of tax due on UK earnings from just five of the biggest US tech firms; that is money that could pay for more than 42,000 rooms in care homes for people who desperately need them. So does my right hon. Friend agree that there is enormous public support for tough action on corporate tax avoidance?
Mr Speaker
Order. I can put the hon. Gentleman’s name down if he wishes to make a speech, but we must have shorter interventions.
John McDonnell
May I thank my hon. Friend for that wonderful speech?
Whoever is in government needs to accept that this is an issue that we have to address, because there is now an increasing lack of confidence in the tax system, and I know from meeting companies, including some in the City, that fulfil their obligations that they feel anger towards those that do not; so this anger is felt within the wider community, but also within the business community. It destabilises the whole process of tax collection and undermines confidence in the system, and also undermines confidence in Government overall.
As I have said, some have suggested that the tax gap could be as high as £90 billion. Let us look at who is not paying: it is the rich corporations, and in particular the multinationals. Successive Conservative Governments have been, I have to say, weak on multi- nationals. According to analysis by Tax Watch UK the top five tech companies alone avoided around £5 billion in UK tax over the last five years. We need to recognise that this is money that could be used by whichever Government for useful purposes. That sum is enough to reverse the cuts to homelessness services—we should remember that 700 of our fellow citizens died on the streets last year. It is enough to provide support for families to prevent children from being taken into care, and Members will recall that when we had a debate not long ago we had the report that there are record numbers of children coming into care because of the cuts in early interventions to support families.
We have had discussions in the House about this, therefore. Recent years have seen secret sweetheart deals between HMRC and tech giants, and they have only been made public as a result of the tireless work of tax justice campaigners. The Government have trumpeted their digital services tax. It was trumpeted before the election, but that tax has been widely criticised. It is aimed only at digitalised business models, and many have said—and I agree—that it is hard to administer and becoming impractical. It creates a pitiful 2% tax on the revenues of a very small group of businesses and is predicted to raise £5 million only this coming year —and that is if it is brought into force on 1 April. Now there is talk of the Government dropping even that hollow half-measure. So let us be clear: if the Government drop or delay the digital services tax, as is rumoured, it will effectively be another tax giveaway to powerful multinationals.
Let us look at non-doms again. Non-dom status is another tax giveaway. My right hon. Friend the Member for Barking (Dame Margaret Hodge) has been raising this issue consistently for quite a while. This is just another area where the Tories have said a great deal but have not had an effective clampdown. It is a colonial hangover from 1799 that allowed colonists to shelter their property from tax—a carve-out from the general rule that UK tax residents pay tax on income wherever it is earned. It is a carve-out that applies only to some who might have their domicile outside the UK.
George Osborne, one of the many Chancellors I have dealt with over the years, tinkered with the process and introduced an annual charge of £30,000 to be paid by some non-doms and £60,000 by others. The Government now will claim they are abolishing non-dom status, but actually it is being kept intact for a significant number of years despite the evidence that those who use this status are the wealthiest individuals, able to pay, able to contribute to the funding of our public services, and able to contribute to our society, which they enjoy living in for long periods. Previous estimates have said that fully abolishing now the status of non-doms could raise £1 billion for our public services—think what that could do now to assist families whose homes are flooded.
There are many other ingredients; non-dom status is just part of an array of ingredients that enable abuse of our tax system. Secrecy is at its core; it is financial secrecy, and especially the exploitation of overseas territories and Crown dependencies to avoid tax.
Last week, to this Government’s shame, the Tax Justice Network judged that the UK had increased its secrecy score by more than any other country since it last measured financial secrecy. It said that the UK had been backsliding in recent years by building its “spider web” of satellite tax havens. Some of us were in this House when the Panama papers were exposed. They revealed that the most popular haven in the world is the Virgin Islands, which is a British overseas territory.
A lot of words have been said about enablers, but there has been a history of failure to clamp down on the enablers of avoidance and evasion, including the auditors and, yes, the lawyers. One recent paper said—my hon. Friend the Member for Wallasey (Ms Eagle) made this point—that
“the tax services industry, propagated by the Big Four—”
the big four accountants—
“is essentially the apex of this pyramid of factors that helps build, manage and maintain”
the tax havens, but the Government have said and done little to crack down effectively on the tax services industry.
There has also been a history of failure to recognise how the City of London is complicit in the financial misconduct affecting the global south when it comes to tax collection and the hiding of taxation. According to Oxfam, the global south is losing £170 billion in tax revenue due to the wealth of individuals and corporations hidden in tax havens associated with this country. Surely it is our responsibility to ensure that London is not used as a global laundromat for washing dirty money. It is the Government’s duty to protect our citizens by stopping that dirty money undermining the rule of law internationally and undermining international stability. What goes around comes around, and allowing the City of London to be used in that way will have its consequences in the long term for all of us. To collect taxes we need tax collectors, yet Her Majesty’s Revenue and Customs has seen its staff numbers plummet from 105,000 in 2006 to 65,000 in 2019.
As we have raised before, there is a litany of legal loop- holes that the Tories have not acted on or have actively created. The general anti-abuse rule that many of us argued for has proved to be toothless—far weaker than anti-avoidance rules in other legislations. The use of legal professional privilege in tax avoidance cases is little short of a disgrace. George Osborne promised the “march of the makers”, but Nicholas Shaxson has said that the Tories have only created the “march of the takers”. I concur. A number of us have been working with a range of tax experts, accountants, the Public and Commercial Services Union, the HMRC staff union, tax justice campaigns and corporate reform groups. Labour has developed a plan to tackle each of those issues, and there is a range of expertise in this House on all sides arguing for more action.
On secrecy, we believe, as others have said, that we need a stronger public register of trusts and beneficial ownership of companies. We need to put an end to financial secrecy, because the current register of trusts, so often a vehicle of tax avoidance, is not truly public and the penalties for non-compliance are pathetic. The current register of who controls companies is not being verified properly and has a high threshold for disclosure. We have a plan for working with overseas territories and Crown dependencies to accelerate their move towards tax transparency. It is just not good enough that the deadline for establishing public registers of company controls has slipped to 2023 at the earliest.
We believe there should be a clampdown on enablers through the introduction of stronger laws on facilitating tax evasion and, yes, harsher penalties for those who promote schemes. The current law has a wide defence for those accused of facilitation, and penalties for promoters of tax avoidance and evasion are just too weak. We urge the Government to introduce an overseas loan transparency register. That would tackle injustices of the kind that we have seen in, for example, Mozambique. We met a group of women from Mozambique, who told us what had happened in their country. Some of their politicians had undertaken secret lending using UK law and had ripped billions from the budget of Mozambique. Then, when the effects of climate change were felt through flooding following a major cyclone, Mozambique did not have the resources it needed to protect its own people.
We urge the Government to introduce a plan to increase targeted audits undertaken by HMRC to raise the nearly £3 billion owed by self-assessment taxpayers. The majority of the self-assessment tax gap is owed by a small number of self-assessment taxpayers, who could be effectively targeted by such audits.
Our concern is that far from moving forward on tackling tax avoidance in the coming Budget, the Government are opening up the opportunity for more abuse, specifically with their proposals for freeports. The evidence suggests that freeports simply relocate jobs and investment, rather than creating new jobs and investment. Far too often, they become hubs for the abuse of workers’ rights and tax evasion.
Let me be straight with the Conservative party. There is a concern about why the Tories will not tackle tax evasion and avoidance effectively. It is argued by some that they are in the pockets of the City, and in the pockets of the avoiders, the evaders and the enablers. It is hardly surprising that some will be able to level that charge. For example, they could come to that conclusion when only this month we discovered that Lycamobile, which donated £2.1 million to the Conservative party, is embroiled in three tax disputes with HMRC over £60 million in unpaid tax. Indeed, the French auditors were blocked from accessing that company’s records in this country. The problem, however, may also lie closer to home: not just with donors, but with the Chancellor himself.
I put it on the record that there are questions I believe the Chancellor himself, given his past associations, has to answer about his own attitude to tax avoidance. I have written to the Chancellor with a series of questions on this matter. In recent weeks, it has become clear that the Chancellor of the Exchequer, the right hon. Member for Richmond (Yorks) (Rishi Sunak), has had close associations with tax avoiders and tax havens. If people are expected to have any confidence in this Government’s commitment to tackling tax avoidance, it is critical that the Chancellor is fully open and transparent about his own past activities. A former close business associate in two companies in which the Chancellor held senior positions was ordered to repay £8 million after engaging in an unlawful tax avoidance scheme. Two of the firms in which the Chancellor held senior positions have made use of the notorious tax haven of the Cayman Islands.
On our side, we will continue to press the case for a fair taxation system. To do that we need first of all to close the loopholes that allow tax avoidance and evasion to flourish. However, we also need to deal with the overall regulatory architecture of finance, a challenge raised by a report published this morning by the True & Fair Campaign. Let me quote from that report:
“the last four years have seen a multiple pile-up of mis-selling scandals and incidents of regulatory failure. It has witnessed the repeated and wanton abdication of responsibility by leading market participants...Worst of all, it has demonstrated a breathtaking betrayal of the trust...rightly owed by so-called financial services professionals to their investors and employees.”
That report is called “Asleep at the Wheel”. It singles out for criticism the Financial Conduct Authority, and in particular Andrew Bailey, appointed by the Government to be the next Bank of England Governor. On several occasions I urged the previous Chancellor, in this House and by correspondence, to delay the appointment and installation in office of Mr Bailey until there has been an independent review of his role at the FCA. This report adds urgency to that recommendation. I urge the new Chancellor to act on it now.
In conclusion, the forthcoming Budget will be a test of whether the Tory party has, as it claims, turned a page. From the evidence so far it looks like a bit more Johnsonian bluster. There is nothing on the scale needed to address in any serious way the damage Conservative Governments have inflicted on our community over the past decade, and certainly nothing on the scale needed to tackle the climate crisis. Any realistic policy to end and reverse austerity and invest for the future needs, at its base, a fair taxation system. We will wait, therefore, to see whether in this Budget, the Government will at long last effectively confront the scandal of tax evasion and avoidance. All I can say is that judging on past form, I am not holding my breath, and I do not think many others are either.
Oral Answers to Questions
Lindsay Hoyle Excerpts(4 years, 2 months ago)
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John Glen
Yes, I will. There are 7,000 co-ops across the United Kingdom, employing nearly a quarter of a million people. I have had numerous meetings over the past two years with representatives of co-ops and mutuals, and we had a mutuals workshop last July. I am very happy to meet the hon. Gentleman to discuss the recent Manchester mutuals report and to see what we can do together.
Mike Wood (Dudley South) (Con)
Thank you, Mr Deputy Speaker—[Interruption.] I am sorry, Mr Speaker—it has been so long!
Perhaps I should declare an interest as a member of the Midcounties co-operative. Will my hon. Friend consider broadening the eligibility for social investment tax relief so that more mutuals and social enterprises can deliver excellent services and outstanding social value?
Economy and Jobs
Lindsay Hoyle Excerpts(4 years, 3 months ago)
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Mr Speaker
I inform the House that I have selected amendment (d), in the name of the Leader of the Opposition, which will be moved at the start of the debate, and amendments (b) and (e), which will be moved formally at the end of the debate.