Draft Postal Packets (Miscellaneous Amendments) Regulations 2023

Liz Twist Excerpts

Monday 17th July 2023 General Committees

[The Chair]

Order. I must now put the question.

Question put:—

The Committee proceeded to a Division.

[Liz Twist (Blaydon) (Lab)]

On a point of order, Mr Pritchard. Would you confirm that you will be asking only those who are officially on the Committee to vote?

Finance (No. 2) Bill (Fourth sitting)

Liz Twist Excerpts

Committee stage
Thursday 18th May 2023 Public Bill Committees

[Aaron Bell (Newcastle-under-Lyme) (Con)]

It is a pleasure to serve under your chairmanship, Sir Gary. I will confine my remarks to clause 326. I am grateful to the hon. Member for Ealing North for raising landfill tax fraud and the debate on 12 January, which I contributed to at some length. As Members may know, I have the worst landfill in the country in Walleys Quarry in my constituency of Newcastle-under-Lyme. The Opposition Whip, the hon. Member for Blaydon, also has some experience in this area, because her constituents have suffered at Blaydon Quarry. She contributed to that debate, too.

The hon. Member for Ealing North mentioned that the tax was introduced in 1996. The differential between the rates for regular waste and inert waste has grown immensely. Now, they are £3.25 and £102.10 respectively; back in 1996, they were £2 and £7. Just as the hon. Member for Wallasey said earlier in relation to tobacco, that has increased the incentive for people to break the rules, and unfortunately, many people in the waste industry are breaking the rules. What goes on at Walleys Quarry causes misery for my constituents, as fly-tipping and everything else that goes on in the waste industry does for people around the country.

The responsibility falls primarily on the Environment Agency, which I continue to press to do more about Walleys Quarry, as well as about Staffordshire Waste Recycling Centre, which is just over the border in the constituency of my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), who mentioned it just yesterday at Prime Minister’s questions. Will the Minister focus on the role of HMRC in helping the EA to do its work, because prosecutions for fraud may ultimately have more effect than prosecutions under environmental regulations?

[Liz Twist (Blaydon) (Lab)]

It is a pleasure to speak with you in the Chair, Mr Stringer. As the Opposition Treasury Whip, talking about landfill tax is becoming an annual ritual for me.

Landfills are a blight on our society. It is not pleasant to live near one—even a well-regulated one—and it is good that we are considering how to pursue landfill taxes. My particular concern is, as it was previously, about the effectiveness and enforcement of the rates and the recovery of the taxes. As we heard from my hon. Friend the Member for Ealing North, there is still a considerable gap in collection rates, and that must be addressed if we are to treat people properly and minimise the impact of landfill sites.

The Minister may know about Operation Nosedive, which HMRC pursued with great fanfare in my constituency only to drop it quietly six years later. Earlier this year, on 12 January, we had a debate to consider that operation and the wider implications of landfill tax fraud. The joint unit for waste crime was established following the failure of Operation Nosedive, which, incidentally, cost HMRC £3.5 million in public money. There are huge tax implications here. Will the Minister comment on what is being done to close that tax gap?

As I said, landfill sites are not good, and it is good that we do all we can to reduce their environmental impact, but there is also the matter of reducing the gap between what is collected and the expectation, by ensuring that those moneys are recovered. Will the Minister comment on that and on how many enforcement actions and prosecutions have resulted from the work of the joint unit for waste crime on landfill tax?

--- Later in debate ---

[Gareth Davies]

I am grateful for the question. I can tell the hon. Lady that in the period I referenced with the 2,500 waste units, 51 arrests were made as a result of that action. I apologise that I do not have further details to hand, but I am happy to provide them later.

As I was saying—this goes back to what my hon. Friend the Member for Newcastle-under-Lyme talked about—HMRC does have powers to intervene and issue penalties if necessary.

[Liz Twist]

I have two points for the Minister. First, my specific question was whether any prosecutions had taken place as a result of the work of the joint unit for waste crime. Like my hon. Friend the Member for Wallasey, I am pleased to hear that a number of sites have been shut down, although it is worrying that there were so many.

Secondly, will the Minister comment on the landfill tax gap? The issue was discussed in the Public Bill Committee on what became the Finance Act 2022. The then Exchequer Secretary to the Treasury, the hon. Member for Faversham and Mid Kent (Helen Whately), wrote to me following the Committee with an estimate of £200 million—22.7%—for the landfill tax gap for England and Northern Ireland in 2019-20. That was a decrease from the previous year.

If I heard him correctly, the Minister—

[The Chair]

Order. Interventions should be brief and to the point. The hon. Lady and other members of the Committee will not have any difficulty catching my eye if they want to make another contribution.

[Gareth Davies]

I completely understand the hon. Lady’s passion. I know that she is a long-standing campaigner in this area, so it is no surprise that she wants to discuss the issue; I completely understand why that is. I can tell her that the tax gap has fallen, I believe, in the period that I talked about by £125 million, from £200 million in 2019-20. To reiterate, in 2005 the tax gap stood at 7.5% and in 2020-21 it stood at 5.1%. As I say, we are not complacent. We must tackle the issue, and we continue to make great efforts to do so. I put on the record my thanks to HMRC for all the work that it does to get the number down, but it is a live issue.

Let me mop up the question asked by the hon. Member for Ealing North about a review of the plastic packaging tax. He is right to raise that. We will be conducting a review very soon, but we are clear that we would like a decent period in which to conduct it so that we can see a clearer picture of the impact the tax is having. I can assure him that a review will be conducted very soon.

[Liz Twist]

I apologise for my previous lengthy intervention, Mr Stringer. May I return to the issue of the tax gap? As the Minister himself said, it was £200 million in 2019-20, a 22.7% gap. I am interested to hear the Minister say that it has reduced so much. If it has, I am hugely pleased, as it means that enforcement action is being taken. [Interruption.] Would he care to comment on the huge gap in the figures and how it might have reduced?

[Gareth Davies]

I apologise, but will the hon. Lady make that last point again? I did not hear her because of the noise in the background.

[Liz Twist]

I was just asking the Minister to explain how the Treasury has managed to reduce the tax gap from 22.7% in 2019-20 to 5% in the latest figures, which is what I believe he said. That seems to be a great difference.

Landfill Tax Fraud

Liz Twist Excerpts

Thursday 12th January 2023 Commons Chamber

[Liz Twist (Blaydon) (Lab)]

I congratulate my right hon. Friend the Member for North Durham (Mr Jones) and the right hon. Member for Haltemprice and Howden (Mr Davis) on securing the debate and on their commitment to exposing this issue over the last decade.

Let us start by stating the obvious: living near a landfill site is not pleasant. In fact, it is very unpleasant, and no one wants to do it. Our ultimate aim through the waste hierarchy must be to ensure that we do away with landfill sites, but the mismanagement of existing landfill sites is an issue that has affected my constituents a great deal over many years.

In 2019, I secured an Adjournment debate to raise the issue of the Blaydon Quarry landfill site, which was then located in the village of Greenside and surrounded by the communities of Winlaton, Barlow, Stargate, Ryton and Blaydon Burn. The site was, thankfully, closed to waste deposits in September 2021, but not before these proud former mining communities had endured years of foul odours, and litter and dust from the site scattered over our fields and trees. It would be a challenge to overstate the sheer amount of correspondence that I and my predecessor received about the site and the persistent upset caused to communities who were unable to enjoy and take pride in the beautiful environment surrounding the site.

Before the site’s closure, multiple enforcement notices concerning management of the site had been given, following repeated breaches of regulations on planning and environmental grounds. A particularly nasty breach in 2015 involved a huge escape of litter from the site during a period of high winds, which amounted to nothing less than environmental vandalism. Despite the scale of the devastation, the Environment Agency legal team told us that it would not be possible to make a prosecution, and we saw that pattern several times over the years. I can only thank the Environment Agency officers who worked on the site in my constituency for the great efforts they made, pushed continually by the community and by ourselves, but there were still no prosecutions.

The site has had a number of operators, all with different problems. The most recent was Octagon Green Solutions; previously it was Niramax, and before that it was Premier Waste.

In 2015, there was huge coverage in our local newspapers and broadcast media of the HMRC-instigated co-ordinated raids on a number of sites across the north-east, including the Blaydon landfill site, as part of the ill-fated Operation Nosedive. The raid involved 180 HMRC officers and many others, and it was widely publicised—trumpeted, even—across the region, with HMRC estimating an alleged fraud of £78 million. I reviewed some of the media reporting on it as I prepared for this debate. Everyone was there in full gear, and there were photos from the site and television reports, all because of HMRC trumpeting this great investigation. Although different from the environmental issues, it was welcomed by people in the community, who were fed up with the operation of these sites.

Given the damage that these companies inflicted on our local communities, my constituents took great interest in Operation Nosedive and did not forget about it over the years. They took great interest in the alleged potential landfill tax fraud, and they continued to write to me throughout the period to inquire about the outcome of the investigation, until HMRC quietly—very quietly—slipped out the news that Operation Nosedive had not resulted in any prosecutions after six and a half years and what we now know was £3.5 million of public costs.

These families invested faith in HMRC to bring about justice. Having worked fastidiously with our local landfill liaison committee, Gateshead Council and the Environment Agency to hold the companies to account on waste management issues, we hoped that HMRC’s lengthy criminal investigation would deliver on the issue of alleged financial crime, if it was found. But we have heard that six and a half years produced nothing, at a huge cost.

When HMRC revealed that no prosecutions would be brought after that time, I wrote to the chief executive—twice—asking for an explanation. I was told that this could not be given and nor would there be any clarification on whether civil action would be taken. I wrote first in April 2021 and the response was:

“Unfortunately, I am…unable to provide details of the costs incurred in this specific operation as HMRC does not report the costs of individual cases.”

I wrote back on that and a number of other issues about the failed action, and again the response was:

“As per my response dated 30 April 2021, I am unable to provide details of the costs incurred in this specific operation as HMRC does not report the costs of individual cases.

I hope this helps you to respond to your constituent’s enquiries and explain why we are unable to provide more details.”

Well, frankly, no, it did not—it did not help me at all.

So I really congratulate my right hon. Friend the Member for North Durham and the right hon. Member for Haltemprice and Howden on proceeding with their efforts to get this issue investigated and to reveal the true costs. This is public money—it is taxpayers’ money—and people are entitled to know what has happened to it and why this six-and-a-half-year operation has failed. I think we are now clearer, as we have heard about what happened with the lack of co-ordination and the lack of joint work, but, frankly, it just is not good enough for my constituents.

I am pleased that the National Audit Office and the Public Accounts Committee have looked at this and reported on the financial aspect of Operation Nosedive, but it remains absolutely vital that the Government take decisive action to address the issues it raises. We have to take the necessary steps to tackle the ongoing abuse of the landfill tax system—and other waste crime—which is estimated by the Environmental Services Association to have cost the taxpayer about £120 million in 2021.

[Mr Kevan Jones]

I am grateful to my hon. Friend, who has been pursuing this for many years and we have had lots of discussion as parliamentary neighbours. Would she say that her communities are worried about the future? Although the site she refers to—I know it well—is now closed and possibly the initial blowing of rubbish and so on has stopped, because we do not actually know what is in that site, there could be a ticking timebomb of environmental damage. Ultimately, if it has to get cleaned up, it will come back to the taxpayer to do it.

[Liz Twist]

I most certainly agree with my right hon. Friend. Of course, we have had a history of such sites in previous years; we have no idea what is in them. It is vital that we do know what is in those sites, and it is vital that efforts are made and action is taken to ensure that landfill operators behave responsibly. I hesitated before saying “responsibly”: they need to behave in accordance with the law, treat waste properly and respect the local communities and our environment.

As I was saying, I am pleased that the Public Accounts Committee published its report on waste crime in October 2022. In their response, the Government acknowledged the slow progress on the wider issues of waste crime. I believe we are now awaiting the outcome of the landfill tax call for evidence, which we have not yet seen.

Of particular concern are reports of serious and organised crime in the waste sector. The establishment of the Joint Unit for Waste Crime in 2020 suggests progress on that issue, and we have heard reassurances that the unit will promote co-ordination between HMRC, the Environment Agency and other bodies. I am glad that Members have been able to speak to and meet that body. I will certainly be keeping an eye on its progress. That is a positive move. That co-ordination would go some way to remedy the difficulties in discharging responsibilities between different bodies that have been held responsible for the failure of Operation Nosedive.

However, the National Audit Office reported in April 2022 that the unit does not receive any dedicated funding from Government, and that the Environment Agency’s previously ring-fenced funding for waste crime will be incorporated into its core funding from 2022-23. Furthermore, the report highlights the need for improved data on waste crime, as we have heard, so that resources can be targeted more effectively and progress more accurately assessed. It is vital that resources are available to make that co-ordinating work effective and to protect communities.

If we are to learn lessons from the failure of Operation Nosedive—I cannot imagine who thought up that name, which in itself has caused a lot of issues—and make a difference, the Government must establish a more stable footing for the investigations. Our environment is precious to local communities and waste management is a vital part of its preservation. It must not be placed in the hands of criminals or fraudsters. It must be managed to the highest standards.

--- Later in debate ---

[James Cartlidge]

I will make a bit of progress first and turn to Operation Nosedive, which I think every single colleague raised. First of all, I have no information whatsoever on the etymology—it is fair to say it is striking. As right hon. and hon. Members know, the legal obligations in relation to taxpayer confidentiality mean that it would be inappropriate for me to discuss the specific details of Operation Nosedive. However, the Public Accounts Committee acknowledged in its report that HMRC had been frank about the challenges associated with investigating these types of cases and that a high standard must be met for any criminal investigation to reach the prosecution stage.

The right hon. Gentleman for North Durham mentioned the operational independence of HMRC, to which I would just add—perhaps referring back to my previous role as Justice Minister—that perhaps the most fundamentally independent institutions under our constitution are the judiciary and, of course, the Crown Prosecution Service as independent prosecutors. It is ultimately its decision whether to prosecute, based on the evidential threshold.

[Liz Twist]

Of course I will ask why it happened and ask for details, and of course I got the reply about confidentiality. But does the Minister not accept that after this period of time—six and a half years that we know about, and time before that—it is just not reasonable to say, “We can’t tell you how much it costs”, because that is a matter of public interest.

[James Cartlidge]

As I understand it, the figure is public—[Hon. Members: “It is now!”]—following robust campaigning by colleagues present in the Chamber.

Turning to the linked point about decriminalisation, I emphasise that most of HMRC’s work to tackle fraud makes use of civil powers. HMRC does use criminal powers selectively to focus on criminal investigations at the top end of the highest harm and the most complex organised crime and serious fraud. Just to underline that, in 2021 HMRC closed 700 illegal waste sites, including 200 high-risk sites—I say HMRC, but it might have involved the Environment Agency as well. Significant action was taken, but it was primarily civil in nature.

My hon. Friend the Member for Newcastle-under-Lyme continues to raise Walleys Quarry—

--- Later in debate ---

[James Cartlidge]

I understand where my right hon. Friend is coming from. Speaking generally about all these cases and issues—I will go through all the points that have been raised as best I can, because he also talked about joint working and co-ordination—there is point of principle that we have to accept. We have a tax with a rate that incentivises a behaviour that is a positive policy goal, and that has been achieved to an extraordinary degree in the substantial reduction in waste going to landfill. Precisely because of that mechanism of a financial disincentive, there are some rogue actors—there will always be some—who want to take advantage.

All right hon. and hon. Members raised the point about data. I can confirm that the Government are committed to publishing an annual framework of indicators to track progress towards the objectives set out in the resource and waste strategy, including indicators of illegal waste sites, fly-tipping and littering.

The right hon. Member for North Durham and my hon. Friend the Member for Newcastle-under-Lyme both made points about what constitutes a fit and proper person. DEFRA recently consulted on reforms to the carrier, broker, dealer regime, and those transporting or making decisions about waste must demonstrate that they are competent to make those decisions. DEFRA anticipates phased implementation of the reforms from 2023-24.

[Liz Twist]

It is good to hear that there will be some progress, but the issue lies with the operators and permit holders of landfill sites. Will there be any action on the fit and proper person test?

[James Cartlidge]

The hon. Lady will appreciate that that is a DEFRA consultation, but I strongly encourage her to engage with it. She is an assiduous campaigner and contributor to these debates—I think she has been at every debate I have attended—so I pay tribute to her for that. I am sure she will pursue that consultation with interest.

I will talk briefly about the tax gap. My hon. Friend the Member for Newcastle-under-Lyme made the point that there was a spike with the inclusion of unauthorised sites. The latest figures we have, which are for 2020-21, show a gap of 17.1%. That was a fall, but that was partly because the year before was impacted by covid and the year before that we had the spike because of the inclusion of unauthorised sites.

Of course we want to make progress on that, but I speak for the Treasury as a whole when I say that we should be judged as a Government on the totality of the tax gap, because it will vary between taxes; some taxes are fundamentally easier to collect and some are easier to evade. As my hon. Friend the Member for Newcastle-under-Lyme said, the total tax gap was 5.1% in the last year for which we have figures available—a fall from about 7.5% in 2005-06. That is one of the lowest published tax gaps in the world and it has been in decline, which is very positive and shows that overall we are making effective progress, although I agree that we need to make more progress specifically in relation to landfill tax.

Financial Services and Markets Bill (Third sitting)

Liz Twist Excerpts

Committee stage
Tuesday 25th October 2022 Public Bill Committees

[Liz Twist (Blaydon) (Lab)]

As a member of the European Statutory Instruments Committee, I wonder whether the Minister can offer any assurance that there will be parliamentary scrutiny of the clause in the future. Can he offer any suggestions as to how we might be able to ensure that that takes place?

[Andrew Griffith]

The hon. Lady is right to talk about the important role of Parliament. We are giving regulators a great deal more power because we are importing a large body of European laws into the UK rulebook, which is one of the reasons why the Government have contemplated the public interest intervention power in the past. The large number of rules—the hon. Member for Wallasey talked about how large that body is, and painted a graphic picture of all that sifting work—does not lend itself to Parliament being the rule setter in each case. Again, that is at odds with the approach to rule setting in the UK historically, but Parliament will continue to have a voice where it feels the need to.

Draft Social Security (Contributions) (Amendment No. 2) Regulations 2022

Liz Twist Excerpts

Monday 28th March 2022 General Committees

[Lucy Frazer]

I thank my hon. Friend for his question. Those women are not excluded; they just pay a lower rate, so they are included in the NICs scheme. I do not think that they would think that they are excluded. There is nothing to suggest that they were excluded, or that a particular category of women, men or anybody were excluded, so I do not think they will believe they were excluded. Payroll systems are set to include them, and the Government have said on gov.uk that the system is coming in, so the expectation is that they will be included.

As for who the women are, they will be identifiable through various payroll systems, and payroll operators will have to ensure they pay the right amount. If we did not bring in the draft measure, it would be difficult, because we would then have to instruct payroll operators to change their systems, because they are now set up to include that category of women, so it would be more administratively difficult to take them out than to include them.

I should also highlight that this measure is for only a year, because they will be automatically included next year in any event, when the levy appears on people’s payroll.

All that we are doing with this measure is ensuring that this group of women, who were excluded through an inadvertent error, are now included, as we had always intended.

[Liz Twist (Blaydon) (Lab)]

Will the Minister give way?

[Lucy Frazer]

I will now conclude.

It is vital that our NHS recovers from the pandemic and that our social care system benefits from much-needed reform as soon as possible. This measure contributes to that end and I commend it to the Committee.

--- Later in debate ---

[Brendan O'Hara]

That is an excellent idea. I do not see why the Government would look to penalise this tiny number—a minuscule group, as the Minister said—once again. One might have hoped, having put them through the mill with such dreadful communication about why their pensions were being treated in the way they were, that the Government had learnt from that awful experience, but clearly they have not.

[Liz Twist]

Given the experiences of those who were not notified, does the hon. Gentleman agree that it is not enough to say that the computer systems have been upgraded and that the website has been updated? People need individual information about how they have been treated.

[Brendan O'Hara]

The hon. Lady is absolutely correct. At the very least, that group of women are owed by the Government. It is a basic courtesy to notify them of what is about to happen to them. I strongly advise the Minister to accept the suggestion of the hon. Member for Birmingham, Selly Oak: for this one year, set aside this tiny amount of money from a minuscule cohort of women, as some sort of apology for the appalling way in which they have been treated by the Government time and time again.

Public Service Pensions and Judicial Offices Bill [ Lords ] (Second sitting)

Liz Twist Excerpts

Committee debates 2nd sitting & Committee stage
Thursday 27th January 2022 Public Bill Committees

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham. I pay tribute to our police and fire service. I appreciate that the Minister shares that sentiment. I want to underline the points made by my hon. Friend the Member for Hampstead and Kilburn and others that we are just asking the Government to consider this again and to produce a report. That seems to be the very least that could be asked of them at this point.

It is worth remembering that the police and fire service—these valuable services, which are at the frontline of our public service and respond to challenging issues in our communities—have been through the pandemic after 10 years of quite serious austerity cuts in staff numbers. Once again, I ask the Minister to consider this new clause that asks only for a report to be produced, which would allow further discussion to take place.

I have met the Police Federation and the Police Superintendents Association, both of which have genuine concerns, and I understand that the Fire Brigades Union does, too. We should listen to these public servants. They have genuine concerns. This is an important issue about the future and the status of these services. I ask the Minister to consider the new clause very seriously.

[Liz Twist (Blaydon) (Lab)]

I rise briefly to echo the points made by my friend the hon. Member for Glenrothes. The new clause calls for a review to consider the issues further. In responding, can the Minister say what steps he will be taking to resolve those outstanding issues and through what form the discussions will take place?

[Mr Clarke]

I thank the hon. Members for their comments and questions. I entirely echo what the hon. Member for Reading East said about the debt we owe to our police and fire services. Collectively, they are perform enormous public service and we are all in their debt.

We have concerns about the wording of the new clause, particularly where it says that a loss “could be compensated,” implying that compensation should be paid. We are concerned that that creates an expectation on Government.

The Home Office, as the responsible Department, is leading a genuine consultation process about the police pensions services. It will bring forward the outcome of that consultation in due course. To address the issue at this point would fall outside my remit and the remit of this Bill.

Covid-19: Government Support for Business

Liz Twist Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

I am sorry, but I cannot accept that. The Government have given an additional £12 billion to the devolved Administrations, which also benefit from the reduced VAT, the recovery loans and the other UK-wide measures, and the additional £430 million that was agreed this week.

[Liz Twist (Blaydon) (Lab)]

Two weeks ago, on a very frosty north-east morning, I met small businesses at my business forum. They told me of their concerns about what might happen over the Christmas period with covid-19. They included beauty businesses and businesses such as the Railway Tavern in Rowlands Gill in my constituency. Will the Minister please urgently address the need to support our hospitality and personal care businesses throughout this situation?

[John Glen]

The hon. Lady makes a very reasonable case about businesses in her constituency. As I have said, we will be engaging with the sector to come forward with appropriate interventions based on the data and the experience across the economy.

Oral Answers to Questions

Liz Twist Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Helen Whately]

We are indeed taking steps to support the haulage sector, where there is a long-running situation with vacancies for HGV drivers. The action we have taken includes making available 5,000 temporary visas for the short term, increasing the number of tests available so that there is greater capacity for new drivers to take tests, changing cabotage restrictions, and funding improved facilities for drivers. In the longer term, we need to see both better pay and better conditions for lorry drivers.

[Liz Twist (Blaydon) (Lab)]

3. What recent steps he has taken to help reduce economic inequality.

[The Economic Secretary to the Treasury (John Glen)]

Distributional analysis published at the Budget and spending review last week shows that in 2024-25, tax, welfare and spending decisions made since the spending round two years ago will have benefited the poorest house- holds most as a percentage of income. This Government believe that work is the best route out of poverty. That is why the Government are investing £6 billion in labour market support over the next three years.

[Liz Twist]

Analysis of the Chancellor’s Budget and tax and spending plans for the next six years shows that they will cost women an additional £48 billion over that period. That is a staggering amount of money to be taken from women, and it is in contrast to the planned tax cuts for banks. Is that why the Government have failed to produce an equality impact assessment for this Budget, as they are required to—because the Chancellor knows that his tax choices are totally unfair?

[John Glen]

The hon. Lady must have missed a number of measures announced by the Chancellor in the Budget last week in which significant investment was made to support families through the household recovery fund and support for women in particular to get back into the labour market, alongside a whole range of other interventions.

Working People’s Finances: Government Policy

Liz Twist Excerpts

Tuesday 21st September 2021 Commons Chamber

[Liz Twist (Blaydon) (Lab)]

Let me start by saying that I make no apology for referring to a subject that I have talked about very often in this House and in questions—universal credit and child poverty, which are inextricably linked. I want to talk again about the serious and really disproportionate effect that ending the universal credit uplift will have on people in my constituency of Blaydon and across the north-east.

Many constituents have written to me expressing their concern about the cut—the loss of the £20. I have heard both from people who receive universal credit themselves and know what a huge difference that has made to them, and from those who are concerned about other people in their community who will be affected by the cut. There is a real and genuine concern about how people will suffer as a result of the loss of that £20.

One of the many constituents who got in touch with me, Stacey, will, after the cut, no longer be able to afford to take her child to their hospital appointments as the travel fare is too expensive, leaving her, she says, to choose between buying food and accessing healthcare. Stacey’s story highlights perfectly what we know from the data and what we hear from charities across the region. Forty-six per cent. of families with children in the north-east will be affected by the universal credit cut, and that in a region that already had the second highest level of child poverty in the country before the pandemic. The cut will leave families worse off.

Of the 20 constituencies with the highest increases in child poverty between 2014 and 2019, 17 are in the north-east. In my constituency of Blaydon, 27% of children live in poverty. That is data from before the pandemic.

[Jim Shannon]

The hon. Lady is bringing forward the very important issue of child poverty. Charities have indicated to me that child benefit is a godsend, but they also say that the benefit cap has remained the same since 2013 and that, in the same period, inflation has been 17.56%. That means that people who have been on the same wage for eight years will find that if they go to their boss and ask for a wage increase, they will lose their child benefit. Does the hon. Lady agree that it is time to address that too?

[Liz Twist]

I thank the hon. Member for his intervention; of course, I absolutely agree with the important point he makes.

Some 7,320 households in my constituency of Blaydon, or 21%, will be affected by this cut, which represents a combined loss for low-income households in Blaydon of £146,400 a week. That is £146,400 being sucked out of the local economy each week, virtually overnight. Is that levelling up for my community? I thank the North East Child Poverty Commission for the important work it does to produce such figures, which graphically illustrate the problems we are facing.

We have talked a lot about jobs as well, because universal credit is as much an in-work benefit as it is an out-of-work benefit. Some 40% of those on universal credit are in work, many doing really important key worker jobs that did so much for our society during the last 18 months of the pandemic. This is not about people being lazy and wanting handouts. Low wages, poor-quality jobs, zero-hours contracts—they all mean that being in work is no longer enough to be out of poverty in this country.

[Jessica Morden (Newport East) (Lab)]

My hon. Friend is making an excellent point. She refers to the fact that 40% of universal credit claimants are in work. Does she agree that that means that one in 14 British workers might be affected by this cut?

[Liz Twist]

I thank my hon. Friend for her intervention and share her concern about the number of people who will be affected by this cut. Being in work is not enough; we need better quality jobs, with proper conditions and adequate pay.

I want to mention the energy price cap rise and the inevitable cost rises that will follow. Many of these families will feel the impact of that. Many may be living in poorly insulated homes and may feel the need to increase the heating in their properties. We know that there are links between poor quality housing and poverty and, indeed, poor health, so the energy price cap rise will have a significant impact on those families—probably more significant than for some of us. Labour wants to keep the uplift until we can replace universal credit with a better, more compassionate social security system that properly supports those who need it.

I want to refer also to the increase in universal credit claims as a result of the pandemic. I have managed to get information from Gateshead Council showing a significant increase in council tenants across Gateshead claiming universal credit. Indeed, from April 2020 to the end of March 2021—almost exactly that whole year of the pandemic—there were 1,758 new universal credit claims. Some of those dropped off during the year—perhaps they were not eligible, or whatever—but there was still an increase of nearly 1,100 tenants claiming universal credit.

One other issue, which we have talked about often and must not forget, is the five-week wait, which leads to incredible arrears, certainly in Gateshead. By 31 March, 69% of Gateshead tenants were in arrears by an average of £666. Clearly, those arrears need to be resolved at some stage. They are a debt around the neck of those people.

I want to talk about the national insurance rise. Research from the New Statesman and the Resolution Foundation shows that people in the north-east will lose a higher proportion of their disposable income than those in the south of England due to incomes on average being lower in the north-east: people in the north-east will lose up to 25% more income than those in the south-west. When it comes to social care, people will still need to sell their home to fund their care, especially people with lower value homes. They will still face a substantial cost before the cap kicks in. Homeowners in the north-east could face care costs of up to three fifths of their assets, including the value of their home, while homeowners in London face costs of just 17% of their assets due to the difference in the value of housing. That is deeply unfair, on top of the additional contribution for many workers who, as I said, are in relatively low-paid jobs.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making a compelling and powerful speech about a wide range of issues affecting her region, and I commend her speech to the whole House. I was particularly moved by the point about housing and the difficulty for many tenants. Does she agree that there is a huge need for more council houses in this country?

[Liz Twist]

I absolutely agree about the need for additional council housing.

The rise in national insurance will disproportionately affect younger people and those on low incomes. It is absolutely right that we need more money for the NHS and social care after years and years of cuts, but it cannot be right that it is the lowest-paid earners who pay for it. The Government’s plan will not end the crisis in social care or help to fix the backlog in the NHS.

[Alex Cunningham]

The hon. Member for Aberdeen North (Kirsty Blackman) talked about the Conservatives not really understanding the plight of people living on universal credit. Does my hon. Friend agree with me that it might be a good idea for some of them to spend a month living on the income of a person on universal credit? Not just that, however. Let us load them with a debt of £10,000 and say that they have to pay off some of that debt out of their income as well, and maybe they might understand a little bit more.

[Liz Twist]

I would not like to load anyone with debt, frankly, but I do wish that people would understand what it is like to live on universal credit, and not just for a week or a month, with no recourse to a cash pot in the bank on which they can draw if they run out of money. Many of us will not understand that, but it came home to me very clearly when I became a councillor and an MP just how much on the breadline some people are, with no access to credit cards or other finance. It is a really difficult life for people.

I was talking about social care. As I said, the Government’s plan will not end the crisis in social care or help to fix the backlog in the NHS. It will take money from those already struggling financially, without fixing the problems. What my constituents want to know, when we talk about social care, is what services they will be able to access. We have talked about money and the need to address that, and we have talked about caps. What we have not talked about is what the Government’s social care plan means for those of my constituents who actually receive social care, with people coming in to look after them. Will they receive a better service? Will the staff, many of whom will be caught by the universal credit cap, see decent pay and conditions, and recognition for the really important work they do? We are missing a huge piece of the jigsaw and the Government need to address that. Labour has said that there are many other ways to raise the money, including taxing the incomes of landlords, and of those who buy and sell large quantities of financial assets, stocks and shares. Labour has been clear that we want those with the broadest shoulders to carry the burden.

I want to talk a little bit about the excluded, because so many of my constituents during the pandemic, including the self-employed, have found themselves facing real problems. They were excluded from any schemes that the Government brought forward and in many cases they were excluded from universal credit because of money that they might have put away for tax, or small amounts of money. Lots of single people running dance schools or hairdressers or working from home have found it hard to get through. It is really important that we recognise the pandemic’s impact on them. I know from Zoom calls with my constituents—people who own beauty salons, people who were creative—how much they have been affected. They really have suffered.

Lastly, I pay tribute to Gateshead food bank, Gateshead Council and the many other local organisations that have picked up a lot of the slack. They are doing a great job, but for goodness’ sake, it should not be necessary in this day and age.

--- Later in debate ---

[Jessica Morden]

My hon. Friend has made an extremely valid point. I see that at first hand in my constituency, and I hope that Ministers will note what he said, take it away and actually do something about it.

People are using credit, including high-cost credit, to cover essential outgoings—spending on groceries, energy bills, and school books and stationery for children. Those on the lowest incomes are also bearing the brunt of the rising food prices that we have talked about today. I pay tribute to Raven House Trust food bank, Caldicot food bank, and all the other food banks that serve Newport East for the fantastic work that they do to support people. I also pay tribute to the community and the churches for supporting those food banks during what has been a very difficult time.

[Liz Twist]

During the pandemic, we have seen our community groups, our churches and others come to the forefront and help people. Without that help, would not many more people have been in real difficulties?

[Jessica Morden]

My hon. Friend is right. We owe a debt of gratitude to all those out there in the community—in churches and in other organisations—who have stepped up to help those who are suffering the most.

According to the BBC food price index, food prices have risen by 8.3% since January, with meat and fish up by 22% and fruit and vegetables by 14.7%. As has already been said today, the Government have done very little to address the supply chain issues which are leading to higher prices yet again. We are seeing HGV driver shortages and delays at borders and ports, and we need the Government to address those problems. As we have seen in many news reports, the costs of raw materials for many goods and services have risen as well, affecting the cost of furniture, women’s clothes, vets’ bills, second-hand cars and more. So much for the positive strategy from this Government for shaping our future post Brexit.

National Insurance Contributions Bill (First sitting)

Liz Twist Excerpts

Committee stage
Tuesday 22nd June 2021 Public Bill Committees

[Jesse Norman]

I thank the hon. Gentleman for his questions. He repeated the question from Second Reading of why the measure is for one year, contrasting it with the freeports measures, which are for three years. The Exchequer Secretary was absolutely right, but it is important for me to add more colour.

The freeports measure is set at a lower upper secondary threshold, but for a longer period, because the goal is to bring people into an environment that has already been greatly supported by taxpayers, but to create circumstances in which they can have long-term secure employment, in particular with all the employment rights that come with more durable employment. The NICs relief for veterans is at a higher level for a shorter period, because the goal is to support a very specific process of transition, which veterans have as they come out of the armed forces.

Many people in the room have constituencies in which there are veterans or serving armed forces personnel, so they will appreciate the importance of the measure. Veterans are extremely skilled individuals who have extraordinary life experience, but there is often that process of transition. Therefore, the more effective approach is to provide more support for a shorter period to assist that transition in as flexible a way as possible.

[Liz Twist (Blaydon) (Lab)]

I understand the concept of the transition, but does the Minister not share my concern that it might go against the grain of what he is trying to do if we were to find that, after a period of one year of having the national insurance relief, people were out of employment? The proposal to look over a longer period would be beneficial to veterans in maintaining long-term employment.

[Jesse Norman]

I fully understand the concern of the hon. Lady, and precisely because the Government have been concerned about transition, we have introduced the relief. If it were the case that veterans still had a serious problem of finding secure and stable employment, of course that would be a matter that the Government would wish to reflect on and consider. I thank her for raising it.

To go to the second point raised by the hon. Member for Ealing North, he asked about the timing and the issues of real-time payments that the Bill contemplates. I understand the concern, in particular at this moment of pandemic when the Government are seeking to protect and support the cash flow of businesses and have done so across a vast number of them, across the whole of the United Kingdom, in many different forms. The Committee is aware of that.

The hon. Gentleman asked if we would look at that. Of course, I am happy to consider the matter further and to ask HMRC to consider it, but as he will recall, the matter has been given extensive consultation and internal discussion, and the IT and other problems that I described are not ones that can be wished away.