Ways and Means

Lloyd Russell-Moyle Excerpts

Ways and Means resolution: House of Commons
Wednesday 6th September 2017 Commons Chamber

[Wes Streeting]

I wholeheartedly agree—again—with my hon. Friend. It is almost as if he wrote my speech. I only wish I could have written his. I have learned a great deal this afternoon about landfill taxation policy and its importance, and I look forward to studying his speech later as we prepare to grill Ministers on the Treasury Committee.

I turn to resolution 4, relating to clause 14 of the pre-election Finance Bill, which introduced amendments to tighten the income tax treatment of termination payments. I made a point early in my remarks about the sense of unfairness and injustice that people feel about the way the rules are rigged. Many people fear, particularly in the current political and economic climate, and in the context of the Brexit process, that attempts will be made to erode workers’ rights. I was particularly concerned to learn, therefore, when I studied resolution 4, that the measure narrowed the scope of tax relief on redundancy and termination payments, removed any exemption for payments in lieu of notice, enshrined it in statute that injury to feelings—a main aspect of compensation in discrimination cases—was excluded from the tax-free scope of payments for injuries, and gave the Treasury the power to vary the tax-free amount.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

Does my hon. Friend agree that this is perhaps a return to the nasty party, in the sense that this measure will mean that people who may have suffered discrimination as a result of being LGBT or a woman may now be taxed on the compensation they received after being dismissed? That is a real indictment of what is meant to be a modern Conservative party.

[Wes Streeting]

Absolutely. I welcome my hon. Friend to the Chamber. I am unsure whether it is a return to the nasty party or more of a doubling down on being the nasty party. Indeed, I am unsure for how many more debates we can see the nastiness of the Conservative party reflected in public policy. On this or any other measure, if the Government’s intention is to clamp down on the abuse of a particular tax measure, provision, break or exemption, we will welcome that where the problem is genuine, but the Opposition believe that this measure targets termination payments more widely. It therefore follows that there is an obvious concern that workers who are losing their jobs are seen by the Government as a source of increased revenue.

What an outrage it is if the Government are seeking a power to reduce the £30,000 tax-free amount for termination payments without the requirement for primary legislation. That runs contrary to assurances that the Government had abandoned their plans to reduce that exemption, which was consulted on in 2015. Those of us who were in the 2015 Parliament will remember that one of the first measures with which we were confronted was the Bill that became the Trade Union Act 2016, which was an appalling attack on the rights of people at work. The Government consulted on this proposal then, but dropped their plans because they were strongly resisted both by the people and by the organisations that champion the rights of and protections for ordinary working people. Now, early on in the 2017 Parliament, the plans are back, but buried in these motions, with the Government presumably hoping that we would not notice. I bet the Government did not count on such scrutiny of their Ways and Means measures.