Finance Bill

Matt Rodda Excerpts

Report stage & Report stage: House of Commons & Report: 1st sitting & Report: 1st sitting: House of Commons
Wednesday 1st July 2020 Commons Chamber

People point out that they declared what they were doing on their self-assessment form. Even the tax code was okayed by Her Majesty’s Revenue and Customs. They were told that this was a less burdensome way of doing things than starting their own plc. As soon as the first sniff of a discrepancy appeared, they paid the shortfall. The retrospective aspect is worrying; people are now being told that all these other things will be reopened. In the case of my constituent, HMRC mixed this up with a student loan from years ago, which had been was paid off. There are aggressive letters, maladministration, and, for this constituent, health issues. That is just one example from a three-figure number of examples that I could give.

[Matt Rodda (Reading East) (Lab)]

Does my hon. Friend agree that the common characteristic of the people who have contacted many of us is that they are very hardworking? They have tried to play by the rules. They have possibly been sold a scheme that they did not fully understand, and may have been manipulated by unscrupulous advisers, and now they face threatening behaviour from HMRC. It is truly difficult for these people, many of whom work in IT in the Thames valley, and in creative industries. Does she agree that the Government need to show these people some understanding?

[Dr Huq]

My hon. Friend is completely right. HMRC needs to show some humanity in these cases. The scheme was obviously badly implemented, with inadequate impact assessment. The word “scandal” is frequently used and often misapplied, but in this case, all the elements needed are there. People have been pushed into bankruptcy; families have been fractured; people are facing financial ruin and losing their homes. As we have heard, there have been seven suicides. The all-party parliamentary loan charge group, which is very active—I am sure it is in everyone’s inbox all the time—has sent round a letter from the daughter of one of the people who sadly took their own life about the impact that has had on everyone involved.

The Morse review is a start, although the APPG feels that it could do better and go much further. All of us have seen these cases; my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) described the situation movingly.

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[Taiwo Owatemi]

I have been contacted by many residents who are extremely worried about the changes to the furlough scheme and their potential impact on unemployment. One of my constituents, James, recently got in touch with me to say that the company that his partner works for has already announced that it will be letting almost 40 employees go. The reason the company gave, I am told, was that the Government have asked employers to share the load of the furlough scheme from August. As can be imagined, staff at the company have been left heartbroken and have said that they feel this is completely wrong and runs contrary to the much repeated idea that a furlough scheme was a job retention scheme. James has said to me that while he understands that companies must ensure that they can continue to operate on a sustainable financial footing, it seems very unethical of the company to make the decision to reduce its numbers two months before that would start to become a significant financial burden on it.

The Prime Minister has repeatedly said that companies should not use the scheme just to keep employees on their books, only to get rid of them later, but should use it as a scheme to retain jobs. This compounds my view that the furlough scheme masks the true extent of the crisis in our jobs market. Since the start of the crisis, the Government have been too slow to take these threats seriously. We have seen very little from the Government around preventing unemployment since their economic package was created. If we do not take action now, we could see even more people lose their jobs.

This crisis requires a regional response, so that places such as the west midlands are not left behind. The Government’s one-size-fits-all approach fails to understand how our economy works. My own city has seen a devastating impact, with mass redundancies coming at Coventry College. Last week, I spoke about the impact on the aviation industry, with job losses at Rolls-Royce Ansty and in the arts and small businesses such as Exhibit 3Sixty. We need to protect our industries in the west midlands. That is why we need decisive rapid action to boost the economy, to provide small and medium-sized firms with the support they need, and to give businesses the strongest incentive to start creating jobs again.

My office has already started this work. Working alongside Coventry City Council, we are getting ahead of the response. I will not sit idly by while people in my community lose their jobs and vital skills. I have been holding a series of meetings with employment and skills agencies, as well as with Coventry and Warwickshire chamber of commerce and other business groups, to discuss supporting businesses during this time and upskilling people so that they can secure jobs for the future and find new work now. As part of its employment and skills priority for Coventry, the city council has been working with partners to host a series of virtual jobs fairs, with thousands of views and impressions to give people a head start. But this effort cannot be left up to us. The Government must do everything in their power to create support systems for those who become unemployed as well as new opportunities. We need to see the Government working with employers, unions and local government, with a joint approach across government to maximise job creation and comprehensive support to tackle unemployment.

[Matt Rodda]

Does my hon. Friend agree that there is a role for private sector landlords in this, working with the Government and local authorities? I have been quite taken aback by the approach of a number of commercial landlords who put extreme pressure on tenants at this time, which I believe is quite wrong.

[Taiwo Owatemi]

I agree with my hon. Friend; that is completely wrong.

No business or individual should be left behind. Every livelihood deserves the chance to survive this crisis. Otherwise, who knows what impact it will cause? Where there are job losses, will the Government commit to retraining those workers, whether old or young, through a future jobs fund so that they can harness the jobs that will come out of the crisis? Those jobs should be part of a new, prosperous economy, and they should be green, well-paid and sustainable. We do not need a race to the bottom, the slashing of safety regulations or the austere measures that we have seen in the past 10 years. The Chancellor said that he would do “whatever it takes” and frankly that is the least that my constituents in Coventry North West deserve. We have seen 18 years of growth and millions of jobs lost in two short months. To restore dignity, to save jobs and create new ones and to stimulate this much-needed recovery, bold progressive action is required. Nothing less will do.

Finance Bill

Matt Rodda Excerpts

Report stage & Report: 2nd sitting & Report: 2nd sitting: House of Commons
Thursday 2nd July 2020 Commons Chamber

I turn to new clause 22, much loved by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who is not in his place. It modifies the current enterprise investment scheme and seed enterprise investment scheme so that individuals who made EIS and SEIS investments before a future fund investment in the same company will not lose relief on those previous investments when the future fund loan converts into shares or is repaid. As the House will know, those schemes were intended to encourage investment in smaller, higher-risk trading companies by offering tax reliefs to individual investors who subscribe for new shares in qualifying companies. The Government announced the future fund as part of its business package in response to covid-19. Current EIS and SEIS legislation means that some future fund investors who have used those schemes for previous investments in the same company might lose their reliefs, depending on how and when the loan converts. The new clause intends to ensure that those investors do not lose that relief as a result of investing in the future fund to support innovative UK companies that may have difficulty raising finance during this period.

[Matt Rodda (Reading East) (Lab)]

May I press the Minister on innovative companies getting a lack of support from HMRC? I have come across a case in my constituency where a very innovative British company appears to have had a lack of support from the agency. Would he look into that for me?

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[Wes Streeting (Ilford North) (Lab)]

I thank the Financial Secretary for making the case for the Government’s new clauses this afternoon. Throughout the coronavirus pandemic, the Labour party has made clear as the official Opposition that we seek to work constructively with the Government in response to this unprecedented public health crisis which, as we have seen, has brought about an economic crisis to follow it. In that spirit, and to ensure the smooth passage of legislation, we have helped to expedite the progressive measures taken by the Government, and this afternoon will be no exception.

I wish to speak to new clause 29, which has been tabled in the name of my hon. Friend the Member for Oxford East (Anneliese Dodds), the shadow Chancellor, and other hon. and right hon. colleagues. Yesterday afternoon, I addressed the Government’s poverty of ambition on climate change. This afternoon, I want to address their poverty of ambition on tackling poverty itself.

The Conservative party has now been in government either alone or in coalition for a decade. Over the past 10 years, their record on poverty in this country and on tackling poverty in this country has been absolutely lamentable. According to the Government’s own Social Mobility Commission, 600,000 more children are now living in relative poverty than in 2012, and that is projected to increase further due to benefit changes and the obvious economic impact of covid-19. As of 20 February this year, some 14 million people were in poverty, according to the Joseph Rowntree Foundation, including 2 million pensioners and 4 million children. We know that the impacts of poverty are felt disproportion- ately among different communities. Children from black and minority ethnic groups, for example, are more likely to be in poverty, with 45% of BAME children living in poverty, as compared with 26% of children in white British families.

We believe that the Government are failing on something that should be the most basic of priorities for any Government. That is not just our view as the Opposition party; the Government’s own Social Mobility Commission has said:

“The government should be more proactive in addressing poverty overall.”

It is worth bearing in mind that behind every statistic is a child, and 30 years ago I was one of those children in the child poverty statistics, growing up on a council estate in London’s east end, sandwiched between the bright lights of the City of London and the glistening lights of what was then the blossoming London Docklands Development Corporation land, which has become Canary Wharf. Today, they are two global financial centres at the centre of our global city. In between is a vista of poverty that was bad then and remains bad now.

One of the things I find most frustrating about the experience I had growing up in a council flat in the east end in the 1980s is that I look back, and I think about the conditions of the council flat I lived in and the embarrassment of not wanting to bring friends home from school because the conditions were not ones that we were proud of. It was a source of shame and embarrassment. I think about the experience of relying on free school meals, and the stigma that arises from having to collect a dinner ticket while other children go and pay for their food quickly—and get the best food, I hasten to add, while handing over their cash. I think about the difficulties my mum had as a single mum, balancing the challenge of bringing up a child while relying on the benefits system, and having to make compromises in choosing how she spent the family budget: the choice between putting food in the fridge or some extra money in the electricity meter.

One of the things that makes me most angry is that, when I think about my experience, which I thought was bad in the 1980s, and compare it with that of children growing up in the same circumstances today, as seen in my own constituency casework, things have got worse for children in the decades following my childhood, when things ought to be getting better. Whereas I had the stability of a council flat—albeit not a nice one—and a roof over my head, children in my constituency today, and no doubt in those of so many others across the Chamber, are growing up in temporary bed-and-breakfast accommodation, being moved from pillar to post and living in substandard accommodation, with disruptive consequences for their education and their schooling, and the inability for them to form lasting friendships and for their families to build supportive networks and family relationships.

When I think about the enormous strides that were made, particularly by the last Labour Government, in tackling educational disadvantage, I think it is outrageous that, in this country in the 21st century, children still today arrive at school at the age of five with their life chances already limited and in many cases predetermined, because we failed to get early years right. Sure Start centres have closed, and the support for families is no longer there. As a result, children arrive at school, at five, less prepared than their peers from more affluent backgrounds. It makes me angry that, for all the difference made to my education through programmes under the last Labour Government and the impact they have had on children since—the London Challenge and Excellence in Cities—today children are leaving school at 16 at a time when the attainment gap between children from the most advantaged backgrounds and the least advantaged backgrounds is actually widening, and where the further education system in which many working-class young people go on to study has been described by the Government’s own Social Mobility Commission as “undervalued and underfunded”. This is at a time when the changing nature of our economy and the changing nature of the world of work make post-16 adult education delivered in further education settings more important, not less. We should be making progress, but we are in reverse gear.

[Matt Rodda]

My hon. Friend is making an extremely powerful speech, which focuses us, as we should be, on this vital issue. Does he agree with me that a central part of the problem many families face is that the costs of food and of rent have risen so dramatically, with the impossibility of being able to afford a home? In my constituency in Reading, it is very difficult for many people to get on to the housing ladder. Many young professionals and young families are crammed into flats, which are hugely expensive. They are also suffering huge problems with the high cost of food. Does he agree with me that this is a very significant part of the problem?

[Wes Streeting]

I strongly agree with my hon. Friend, and that brings me neatly on to the next point I was about to make about employment conditions in our country. For my mum, as a single mum, it was difficult to hold down a steady, stable job and often she was reliant on temporary, casual, low-paid work to help make ends meet. Looking at the picture in the labour market—and this was pre-pandemic—even in households where one or both parents are working, children are still growing up in poverty. As my hon. Friend said, over the last decade we have seen the bills going up, but the wages failing to follow.

We have also seen labour market conditions that mean that, even when people are doing the right thing, as the vast majority of people want to do—going out to work, often with two, three or even four jobs in a week, and working all the hours God sends to try to make ends meet—they are still unable to make ends meet. It should never be the case, especially in a country with the wealth and opportunity available here, that when someone goes to work and puts in a full week’s work, at the end of the day they still do not have enough to make ends meet. Things are likely to become even more challenging in the wake of the economic fallout from coronavirus. Unemployment statistics from recent months have been not only jaw dropping but unprecedented, and the pace at which our economy has collapsed as a result of the necessary shutdown has been astonishing. I welcome and recognise the steps that the Chancellor has taken to try to protect people’s incomes, but unless he goes further than he has already announced, many people will face greater poverty and hardship later this year.