Economic Update

Meg Hillier Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right; I know that is something she is perhaps bringing up on behalf of her constituents. A price increase of this magnitude impacts almost everybody, and it is right that our response therefore helps almost everybody. That is what we are doing: ensuring that those families who are working hard on household incomes of £40,000 or so will still get £150-worth of support. Four out of every five households will benefit. We are on the side of hardworking families like those, and I make no apology for it.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I see we now have the Klarna Chancellor—“Get it now, pay later.” There is an important issue with council tax: in areas such as mine and other parts of London, there are not many people in those bands, and certainly not in bands A to C. Who will fund the council tax rebate? Will it be fully funded by the Exchequer, and will there be a weighting of the £150 million fund to areas such as mine, where there are poor households in high-value properties?

[Rishi Sunak]

Just to confirm for the hon. Lady, it is council tax bands A to D, so it is four out of every five households across England. Obviously, that will vary by region. I can confirm that it will be fully Exchequer-funded and, on top of that, there will be a discretionary fund of around £150 million, for which the Department for Levelling Up, Housing and Communities will decide the best allocation formula. Local authorities will be able to use that to help those low-income households that happen to live in higher council tax band properties and those people, such as students, who are exempt from paying council tax at all, but whom we would want to get that support to.

Tackling Fraud and Preventing Government Waste

Meg Hillier Excerpts

Tuesday 1st February 2022 Commons Chamber

[Rachel Reeves]

My hon. Friend is exactly right. The Government say that they need to raise taxes to fund public services, and yet at the same time they are writing off billions of pounds-worth of taxpayers’ money. That is why I say it is an affront to taxpayers and to all those businesses who were excluded from Government support when they most needed it. They now know that criminals got their hands on the money while genuine businesses and self-employed people could not get a penny.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Given the rate of return for every pound spent by HMRC in compliance, is my hon. Friend puzzled about why money is not being invested to get back furlough fraud?

[Rachel Reeves]

My hon. Friend is absolutely right that it is good value for money to invest in HMRC to get that money back, but the truth is that it did not need to be like this in the first place. The Government could have avoided these enormous levels of waste and fraud, but they set up the covid support scheme without proper checks and balances. It is not beyond the wit of Government to direct money where it is needed without giving it to organised criminals and fraudsters. It is incredible that the Government were dishing out lump sums of £50,000 to businesses that were not even trading at the start of the pandemic. It just does not make any sense. The Treasury did not even require checks with Her Majesty’s Revenue and Customs to see that self-certifying businesses had made a tax return as proof that they were genuine. What on earth was going on in Government? Those checks take just a matter of minutes. The result of those failures was that criminals created fake companies to receive public money and that is a disgrace.

--- Later in debate ---

[Michael Ellis]

I must make some progress. The measures that we implemented to minimise fraud and error were robust and comprehensive. Some £2.2 billion of what were deemed potentially fraudulent bounce back loan applications were blocked through up-front checks—£2.2 billion that the Labour party has not said anything about. Lenders were required to make and maintain appropriate anti-fraud, anti-money laundering and “know your customer” checks. Specifically, they were required to use a reputable fraud bureau to screen against potential and known fraudsters and, if an application failed the lender’s fraud checks, the lender was unable to offer a loan.

There were measures in place: those lender checks, with the duplicate loan check, incorporation date check and change in director check that were put in place in the following months, were the most impactful of all the checks implemented. The minimum standards were agreed following consultation with PwC and lenders on what would have the biggest impact on preventing fraud while still meeting the policy objective of delivering finance quickly.

It is true that PwC originally estimated the extent of fraud relating to bounce back loans at £4.9 billion, but last December it revised that figure down to £3.3 billion—so, as usual, the Labour party has its figures wrong. We will not be taking lectures from a party that, I seem to recall, left a multi-billion-pound black hole in the Defence budget the last time it was in government.

[Dame Meg Hillier]

I should just pick up on that point. As the Paymaster General knows, those figures are all still highly uncertain. Around £17 billion—another highly uncertain figure—of the £47 billion of loans may never be paid back. Some of that will be fraud and some because businesses have gone under. However, the key point is that he says checks and balances were put in place. He knows that was not the case: they were dropped for speed. We all lobbied for speed but, as my hon. Friend the Member for Leeds West (Rachel Reeves) said, it was the Treasury’s responsibility to ensure that the checks were in place. Why were 61% of loans by value out of the door before checks were introduced in June so that people could not apply twice? That is a simple thing, and the door was shut after the horse had bolted.

[Michael Ellis]

The hon. Lady has fairly said that she and others on the Opposition side did push for the Government to take action. They are right to accept that—and they were right to do so. This Government did take the precautions and, if we had waited any longer, businesses would have gone under. They would have gone down.

I suggest to the House that the news has been good in other ways too. In 2020, a National Audit Office report contained an estimate that as much as 60% of the sums lent might never be recovered. In fact, nearly 80% of the loans are being repaid or have already been repaid, and we are keeping up the pressure. For instance, we have given the Insolvency Service and Companies House new powers to prevent rogue company directors from escaping liability for their bounce back loans. So far, that has been used in respect of—

[Dame Meg Hillier]

On a point of order, Mr Speaker, I am reluctant to make a point of order in a debate, but it is important to reflect on what the Paymaster General has just said and he may wish to correct the impression that he gave. Those loans are 10-year loans, so it cannot be the case that 80% of them have been repaid at this point. He may want to look again at his notes and perhaps correct the impression he gave.

[Mr Speaker]

I think that is more a point of clarification than a point of order, but it is now on the record.

Coronavirus Grant Schemes: Fraud

Meg Hillier Excerpts

Tuesday 18th January 2022 Commons Chamber

[John Glen]

I recognise that the gymnastics club in Kettering, along with so many other clubs of that type around the country, provides an enormously valuable point of contact for young people. I should be happy to examine my hon. Friend’s point in detail and write to him with clarification, rather than dealing with it from the Dispatch Box. The principle of giving discretion to local authorities in order to meet the needs in particular communities has guided the Government throughout this process, and we have used this grant channel a number of times for that reason, but I will look as sympathetically as I can at the question that he has raised.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Minister referred to default as though it were the equivalent of fraud. The Public Accounts Committee has examined in great detail the issue of fraud in this area. As I am sure he knows, there are grants and bounce back loans taken fraudulently that people will be repaying, but the criterion on which they obtained them was itself fraudulent.

The Minister seems to be accepting this level of fraud. Will he make a clear statement that fraud at all levels will be investigated? We gained the impression from HMRC and others who appeared before us as witnesses that they would take the low-hanging fruit and let a lot of fraud continue without being tracked down.

[John Glen]

I know that the hon. Lady’s Select Committee is conducting an in-depth inquiry. I believe that the second permanent secretary and others appeared before the Committee last week, and I look forward to its report.

I can absolutely clarify that we do see the distinction between a credit loss and fraud. What we are talking about here is: what are the most effective mechanisms, and over what timeframe, to get that money back? Also, we have received moneys back from, for example, the furlough scheme: moneys and grants that were made in error. So it is a complicated picture. I am certainly not suggesting from this Dispatch Box that the Government are writing anything off, or do not grasp the distinction between a credit loss and fraud. This needs to be tackled, but it needs to be tackled in a time and money-efficient way. Obviously the law of diminishing returns begins to apply after a certain point, and we will again by led by HMRC and its excellent advice as we pursue the matter.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 7th December 2021 Commons Chamber

[Helen Whately]

My hon. Friend is absolutely right say that we need to have the right skilled workforce for our transition to net zero, and training is part of that. This year we have provided £6.4 million to help 18 training providers to train around 8,000 people, and our £2.5 billion funding for the national skills fund includes funding for employer-led boot camps. I would be very happy to meet her to discuss the part that SGS College and the Active Building Centre in her constituency could play in making sure that we have the workforce we need for the net zero transition.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

A decade ago we saw the failure of the green new deal, and only recently we have seen the complete and woeful failure of the green homes grant scheme. These were supposed to retrofit homes, create jobs and boost the economy. Will the Treasury work with the Department for Business, Energy and Industrial Strategy to get a grip on this, so that they invest taxpayers’ money in achieving net zero and creating jobs rather than throwing good money after bad?

[Helen Whately]

The green homes grant and its associated scheme for the Chancellor’s plan for jobs saw £1.75 billion invested in improving more than 100,000 homes. We are now bringing in a more targeted replacement, the home upgrade grant, to support low-income households, and that received £950 million at the spending review. We will continue to support low-income households to ensure that they become more energy efficient, which is good for keeping bills down and an important part of our net zero transition.

Northern Ireland Protocol: EU Negotiations

Meg Hillier Excerpts

Thursday 18th November 2021 Commons Chamber

[Michael Ellis]

I shall resist the temptation to ask my hon. Friend to join the negotiating team but, as ever, he speaks powerfully for his constituency, which I think is the centre point of this country, geographically, and also a centre for the movement of goods. My hon. Friend speaks with some authority on the matter and I have noted what he said.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

This was all so predictable when, just under a year ago, we in this House voted for the agreement. Is it not the case, first, that the people of Northern Ireland want a compromise, and secondly, that in reality the Government just threw Northern Ireland under the bus when they went into negotiations in the name of Brexit?

[Michael Ellis]

Certainly not.

Budget Resolutions

Meg Hillier Excerpts

Wednesday 27th October 2021 Commons Chamber

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It is always a pleasure to follow the Father of the House.

This Budget could be described as a pork barrel Budget. The Chancellor talked about a beer barrel Budget, and I have yet to look at the detail of the beer duty, but small breweries in my constituency will be grateful for that measure. That is my thank you to the Chancellor.

The Budget has pulled rabbits out of hats, and there has been a lot of smoke and mirrors. When we look at the detail of the funding, as we do on the Public Accounts Committee, we can see the holes in this Swiss cheese Budget. We have again had the mantra of levelling up, but there is no acknowledgement of the reality of the lives of many of my constituents who will not qualify for levelling up, by the Chancellor’s definition, because of where they live. Of course we are still waiting for the new Secretary of State for Levelling Up, Housing and Communities to define what “levelling up” means.

I have many constituents living in overcrowded housing with one family living in the living room and another family living in the bedroom. They are not street homeless and they are not living in temporary accommodation, although I have plenty of those too, yet there is nothing in the Budget for them on housing. The cost of living is hitting all our constituents very hard, and it is clear that this Budget will not tackle a lot of those problems for a lot of people, many of whom will be made poorer as a result of these decisions.

Of course, the Chancellor has announced £150 billion for Departments this year. We have to be wary of such global figures. It sounds like a lot of money, but it is dwarfed by the spending on covid. Compare that with the steady state of the NHS budget pre-covid, which was about £150 billion, and with the £37 billion allocated over two years to test and trace. I have to wonder where the Government’s priorities are.

[Dame Angela Eagle]

I thank my hon. Friend for the Public Accounts Committee’s report on the spending of NHS Test and Trace. It is 20% of the NHS budget, yet the money was spent in such a way that how effective it was in meeting the main purpose could not be demonstrated. Taxpayers’ money was treated like an ATM. Does she agree that if we are to spend such money, it needs to be spent wisely and properly?

[Dame Meg Hillier]

I completely agree with my hon. Friend, and I hope the Chancellor does, too. I hope the Treasury is acknowledging the lessons that have been learned. We were very tolerant on the Public Accounts Committee, as we understood that spending in those early days would be challenging and money might be spent in the wrong way. The ventilator challenge, for example, means we now have ventilators that will not be used, but it was the right thing to do at the time because that is what the Government thought they needed, and any Minister in that position would have considered making such decisions.

Test and trace is one example where money kept following money without clear outcomes, without clear challenge and without a clear approach to spending taxpayers’ money. These are eyewatering sums. When we think of the NHS backlog, there have obviously been pre-announcements on NHS funding, but there is still so much work to be done to make sure that patients get the treatment they need. The money spent on test and trace could have been much better spent on the backlog.

Once again, we have heard very little about the detail of housing policy. The Government have promised to build 1 million homes over this Parliament, a statement that the Chancellor repeated. There had been a promise of 300,000 homes a year, so the figure is shifting. One hopes it means that the homes will be built eventually, but the Red Book confirms that, of the £11.5 billion that has already been allocated, £7 billion or so is owed from the spending review onward. That is enough to deliver 180,000 affordable homes, and we can add the 160,000 homes being built through mayoral combined authority and local authority funding. We are still getting very low figures.

The affordability of affordable housing, of course, depends on a person’s income. In my constituency, people in receipt of housing benefit, including housing benefit through universal credit, cannot rent a three or four-bedroom property because the rents are above the cap. That is just the market in Hackney South and Shoreditch and across the borough. It is impossible to buy. More people rent privately than own their own home, and more people rent social housing than both of those combined. Those in generation rent and those who cannot get on the waiting list for social housing are left in limbo. They are left out in the cold. Where is the levelling-up agenda for them?

The Father of the House mentioned the terrible issue of dangerous cladding on tower blocks, and this Budget only reconfirms the existing £5 billion set aside for remediation. This is the biggest consumer and regulatory failure in a generation, and many of my constituents, like many people across the country, are living in unsaleable homes. I should declare my interest, as I live in one, too, although my developer has shouldered the entire cost. As the Father of the House said, we need more developers to take that on.

The £5 billion is about a third of what is needed to sort it out. I am the Chair of the Public Accounts Committee, so I do not want to see money given out willy-nilly, but if the remediation is not funded now, there will be no confidence in the sector to get started. Even as somebody who lives in a property surrounded by scaffolding right now, and as an early adopter because the developer paid, it will take many years before the remediation is delivered. For those who have not got to that point, we are talking about well over a decade before this problem will be solved. It is about certainty of funding from the Government. As the Father of the House said, there are ways of getting this money back from developers. We need to be more imaginative. I challenge the Chancellor to work with his Cabinet colleagues on that.

There was some mention of street homelessness in the Budget. Getting “Everybody In” was a covid success story; let us not squander that opportunity for the lack of a bit of funding now. The money to make sure that people get into the 6,000 new homes that are supposed to be provided for people who are sleeping rough on the streets needs to be delivered. If it is not and they go back on the streets, it will end up costing the taxpayer and the Exchequer considerably more. The Department for Levelling Up, Housing and Communities—I hope I have got the new title right—has been slow to confirm the figures on progress, so it is right that the Treasury should keep an eye on how the money going into that Department is spent and on whether it will actually deliver those homes, which will, as I say, save the taxpayer money in the end.

I could speak at length about the cost-of-living issue but, given the time, I shall touch only on the main issue. Universal credit has been cut by £20. I welcome the offer to revise the taper, but it will affect only those who are in work and rather plays into a negative narrative that some people are scrounging off the state. People have lost their jobs during the covid pandemic. People have struggled to get back into work, despite the situation not being as bad as some had predicted. On top of that, we see fuel prices increasing, energy bills going through the roof and inflation. That £20 a week is still a real issue for people.

According to the Red Book there will be a 3% real-terms increase in local government funding over the spending review period, but that comes on the back of cuts of up to 40% or more in some boroughs over the past decade. Since 2019, we have seen an increase year-on-year, but 2019 is only two years ago; let us not forget the deep and swingeing cuts to local government, which has proved itself an effective deliverer of vital services during covid but cannot be squeezed further. We are still nowhere near to the previous levels of funding.

On school funding, there is another smoke-and-mirrors promise. Again, increases are talked about, but after years of cuts. Per-pupil funding is still way lower than it was in 2010 and we are only inching back up to that level. A Public Accounts Committee report showed that the per-pupil increase is lower for pupils in the most-deprived areas and much higher for those in the least-deprived areas, thereby widening the gap in funding. The gap in attainment between the least-deprived and the most-deprived was narrowing, but we now see it growing as a result of covid. This is not the time to cut funding, or to reduce funding even if it is not seen as a cut. It is clever how the Government try to present it, but let us be clear that in effect we are talking about a cut to the poorest, with money going to the wealthier pupils.

The Government have also promised a £30,000-a-year salary for teachers; as far as I can see, having read the Red Book quickly, there is not enough in the settlement for schools to pay for that even if, now that the pay freeze has been lifted, the basic pay increase is taken on board—and we do not yet know what that will be.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Lady mentions having read the Red Book and says there is no new money for housing, but the Red Book announces

“an additional £1.8 billion for housing supply”

and for the regeneration of brownfield land; is that not new money?

[Dame Meg Hillier]

It is not clear to me that it is new money. I have acknowledged the figures for housing on brownfield sites and other housing, but let us be clear: the Government promised 1 million new homes over the Parliament, and they had said 300,000 a year, so they are already watering down the promise on the number of homes. Crucially, there is no figure for proper affordable housing that is actually affordable, so many of my constituents who are priced out of the private rented market and home ownership have no option. There is a real gap there and, as I have said, it is not levelling up for many of my constituents.

As I was saying, even if the pay review bodies come forward with an increase to the basic pay for teachers, as we expect they might, it will be very hard for schools. In effect, it will mean cuts to the number of teachers and to other school services to pay for that promised salary, because there is not enough money in the pot to be carved up all ways. Even the catch-up money will not cover that issue.

Let us look at the detail over the coming days and weeks. The flourish with which the Chancellor finished at the Dispatch Box will wither away as we see the reality that this Budget does not exactly deliver everything that he has promised.

--- Later in debate ---

[Dame Andrea Leadsom]

Thank you, Mr Deputy Speaker. I should know that by now.

Of course, those Ministers have gone on to fulfil a fantastic pledge for every baby. I also pay tribute to parents and carers across England for their amazing contribution and their determination to have their voices heard and to make sure that “The Best Start for Life” works for all parents and carers.

I will take a moment to explain why that period of life is vital. Essentially, human babies are unique in the animal kingdom in the extent of their underdevelopment at birth. Every other animal can fend for itself pretty well from minutes, or at least hours, after it is born. Human babies cannot do anything for themselves until they are at least one year old, and often they are two before they can really fend for themselves.

The physical and brain underdevelopment of human babies means that they adapt to the environment in which they find themselves, so the baby who is born into a secure and happy home with a loving family will grow up learning that as an instinct for life. They will be able to do well at school, make friends, learn, get a job, hold down friendships and relationships, and then be a good parent themselves. Conversely, the baby who is born into a situation where there is interparental conflict, drug or alcohol misuse, mental health problems or severe deprivation will not have the same life chances. All the research demonstrates in spades that, for those babies, life is much harder. Their instinct for life is not good and they often go on to have all sorts of problems.

[Dame Meg Hillier]

There was a Sure Start programme that did exactly what the right hon. Lady is talking about. Does she now regret that that was abolished by her Government and that she voted to abolish it?

[Dame Andrea Leadsom]

I am glad that the hon. Lady, whom I consider a friend, has given me a chance to tackle that, because the standard response is “What about Sure Start?” I have paid tribute in the House to the excellent efforts of many Sure Start centres and I worked with hon. and right hon. Members across the House on that subject, but Sure Start did not provide what most families need. Unfortunately—I can vouch for this, having led a charity that had to pay rent to provide a parent-infant mental health service within the walls of a Sure Start over 20 years ago—Sure Start did not stipulate services for families. It was all about the buildings, and therein lies the problem.

With the Government’s policy of family hubs, I hope we have something that Sure Start will build into: a welcoming place where families can go to find antenatal classes, meet health visitors, meet other parents and get support, whether for smoking cessation, mental health issues or breastfeeding advice and so on. Multidisciplinary services will be available under one roof, not just physically but virtually. One thing that we learned in lockdown was the incredible value that parents placed on being able to take part in something remotely, whether breastfeeding support or perhaps dads’ mental health support. These things can very well be provided online and remotely in the 21st-century digital age, so that if someone’s baby is crying and will not sleep in the middle of the night they can look at something online rather than waiting for Sure Start to open. Unfortunately, in many cases, a Sure Start centre might be open for only a few hours a week.

I must take the hon. Lady to task, because there are 3,000 Sure Start centres in England as we speak. My hope is that local authority areas will use that as a foundation and build on them to create the family hub model proposed by the Government.

I want to move on to other action areas in “The Best Start for Life: a Vision for the 1,001 Critical Days”. I am delighted that the Chancellor has announced funding for every local authority area to publish its own Start4Life offer. One critical thing that parents and carers said to us in the early years review was that they just did not know what they needed, let alone how to access it if they did know. If someone was pregnant for the first time, why would they know that they might need smoking cessation advice, breastfeeding and weaning advice, support to avoid oral decay and help with brushing their baby’s teeth? They might need debt advice or nursery advice and so on. When someone first finds out the hopefully, but not always, fantastic news that they are expecting a baby they do not know where to go, so the news that local authority areas can publish and offer parents a range of Start4Life services will be transformational.

The third measure for which the Chancellor is offering money is a digital version of the red book. Many of us have a plastic red book, with bits of paper falling out. We forget to take it to health visitor meetings and to immunisations, so the record is incomplete. Sadly, having spoken during the research phase of the project to many foster carers, including some fabulous people who had fostered 40 babies between them, I heard that only two of those babies had turned up with a red book. Those foster carers knew nothing about what had happened to that baby, what the baby’s birth experience was, what the situation was with the birth parents—there was no information at all. That must stop, so in the digital age, a digital version of the red book will be a game changer for every family. It will be important not just for families to see what happened—when did I wean my first baby? When do I need to meet the health visitor again?—but for early years professionals. Very often, parents say, “I have had to tell my story six times this week to six different people. Why don’t you ever talk to one another?” When there is a serious case review, all too often it is a case of “These people didn’t speak to those people” or “This team didn’t know what that team was doing”.

Joining up services in Start4Life for the period from conception to the age of two is the big win in today’s Budget in my opinion. That will be transformational for many millions of babies across England. The next steps will be the implementation—it is not done until it is done—and I want to thank many colleagues and professionals in the early years sectors, as well as many Ministers current and past, for the extraordinary coming-together of views that meant that today is the biggest win for families.

Health and Social Care Levy

Meg Hillier Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Jesse Norman]

I am grateful to the hon. Gentleman, and I am also very grateful to him for actually reading the document, which many of his colleagues may not have done, and he is absolutely right to draw attention to that section. What the levy does, of course, is to provide a very substantial form of funding for social care. The question of the capacity of local authorities, which is of course a matter of great interest to Government and an area that we have supported significantly in the last year or two, will be considered in the Budget in the normal course of things.

If I may, I will now set out why a levy based on national insurance is the best way to raise the funds needed for the Government’s plan for health and social care. The first reason is that there is already a clear precedent. Indeed, in 2003 the then Labour Government increased these same NICs rates by 1% specifically to put more funding into the NHS. Within the NICs system there is, as Members across the House will know, already a long-standing ring-fenced proportion of receipts directed to the NHS.

The second reason is that this is a fair method. Businesses will play their part. In fact, the largest 1% of businesses will contribute 70% of the revenue. However, existing NICs reliefs and allowances will also apply to the levy. That will mean, as I have said, that 40% of all businesses will not be affected due to the employment allowance. When it comes to individuals, those earning more will pay more. Conversely, at least 6.2 million people earning less than the NICs primary threshold will not pay the levy at all.

The third reason why a levy based on NICs is the right approach is that it has worked elsewhere. France, Germany and Japan have all increased social security contributions to fund social care provision. Finally, the question of how to fund health and social care is one that applies to a whole nation. NICs are set on a UK-wide basis, and the levy therefore provides a clear UK-wide solution.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Would the right hon. Gentleman put on the record for the House the consequentials for public bodies that are employers? They would normally be expected to pay this, but I understand there are some mitigations. Perhaps he could explain that, because in the time we have had we have not been able to get to the bottom of it.

[Jesse Norman]

The overall fiscal approach is set out in detail in the document that has already been referenced by the hon. Member for Sheffield South East (Mr Betts). We will be presenting a Bill in due course, which will have further explanatory notes and a tax information and impact note associated with it, and of course we have a Budget in which the wider fiscal position will become clear, so the House is not going to be short of information about how this will land.

Finally, if I may, I will just remind the House why this levy is so important. As the Prime Minister and the Chancellor set out yesterday, the levy will enable the Government to tackle the backlog in the NHS. It will provide a new, permanent way to pay for the Government’s reforms to social care, and it will allow the Government to fund our vision for the future of health and social care in this country over the longer term.

--- Later in debate ---

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It is a pleasure to follow the right hon. Member for Gainsborough (Sir Edward Leigh), who made a thoughtful speech, but I have to take issue with him about the Labour Government pumping money into the NHS and it going nowhere. Which party set targets for things such as A&E waiting times and the reduction of waiting lists and achieved them while in government? The Labour party. Where the right hon. Gentleman and I agree—he is a former Chair of the Public Accounts Committee, and I have the honour of being the current Chair—is that it is vital that we measure the effectiveness of every pound of taxpayers’ money spent against delivery for citizens and taxpayers. This proposal fails woefully on that.

This is another headline from the Government with no detail attached. Parliament has been bounced, but even the Prime Minister’s party and Cabinet were not involved in the decisions about how the money is to be raised and what it will be spent on. It is clearly an announcement without a plan. There is no plan, other than to put money into the NHS for three years. We all recognise the need there, but the message is being deliberately muddled. Where is the plan for care workers? Nothing. Where is the plan for skills for care workers? Nothing.

Where is the plan for a stable market? There are 25,000 or so care providers or residential care properties in the UK, mostly small, private providers. Their market had been shaken to the core before covid, but covid has really wracked them hard, and there is no support, plan or promise—anything—for them. What about the money for local authorities? I completely associate myself with the remarks of my hon. Friend the Member for Sheffield South East (Mr Betts) earlier and a number of Conservatives yesterday, including my constituency neighbour, the hon. Member for Cities of London and Westminster (Nickie Aiken). There is also no plan on domiciliary care; more of us will receive care in the home than in institutions.

This proposal is about protecting the capital assets of the wealthiest. I am a London MP, and this proposal will protect a lot of people in London who are like me: a homeowner in London with a wealthy asset for whom £86,000 is a small percentage of the home I own. The right hon. Member for Rossendale and Darwen (Jake Berry) made an excellent speech highlighting the real challenge in this respect. I worry that the Government are using this proposal as another opportunity to try to buy votes in London for the next London mayoral election. Nothing seems to stop them in their ability to attack our London Mayor and try to buy people in. We have to make sure we have a policy for the whole country.

There are not even any targets for the NHS funding that is going in. The Minister came to the House and rattled through his speech at pace without answering any of these important questions. It is important that we tackle the NHS backlog, but with £12 billion a year on a base NHS budget of around £150 billion—of course, during the pandemic it has gone up by around £60 billion—that is still going to be a challenge. We need to make sure we are getting outcomes and we need to measure them. The Secretary of State for Health and Social Care himself admits that he does not know whether tackling the backlog will be possible in three years; I think it will be a huge challenge.

Let us look at the challenge on finances. By 2038, compared with 2018, there is a projected 90% increase in costs for adult social care for those aged 18 to 64 and a 106% increase in costs for adults over 65, so of course something needs to be done. The Public Accounts Committee has looked repeatedly at the social care market, of which the Department of Health and Social Care has responsibility for oversight. That includes looking at skills and the supply of places, but it has woefully failed—it has failed on drug prices and on making sure that the market and the workers in it are skilled up properly. Of course, there was also the woeful failure on personal protective equipment, where the Public Accounts Committee concluded, in—of course—a cross-party report, that care homes had been “thrown to the wolves” because of what happened.

The inequality really bites. As others have highlighted, wealthy pensioners on good private pensions will not pay an extra penny. That includes those who have retired early because of the Osborne pension reforms. Senior civil servants and so on who are able to retire at 55 on a full pension can then work again, and they may pay money on their new earnings but not on their pension. They are earning way more in their pension than the minimum wage and will not pay an extra penny from that.

In my constituency, we have more private renters than homeowners and more people who rent socially than either of those two options. They do not have assets that need to be protected; they need the insurance to get good social care. They do not have income from assets that they will ever benefit from. Of course, many of the people who do own their own homes have interest-only mortgages. A whole generation is coming through—generation rent—without an asset, worrying about whether they can afford to pay into a pension and unable to afford today’s rent. This proposal just hammers that generation to the benefit of people like me—as I move through my 50s towards retirement—who have an asset. This proposal does not work. There is no plan.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 7th September 2021 Commons Chamber

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The hon. Member for Wycombe (Mr Baker) and I may not have the same views on net zero, but we share a concern about how the Government will fund it. We will see, for example, a reduction in petrol vehicles, so what will happen to the tax on them? We have also seen yet another failure recently with the green homes grant. What is the fiscal plan for making sure that net zero achieves its targets while we maintain the Exchequer balances?

[Kemi Badenoch]

I thank the hon. Lady for that question. We recognise that this is an issue under intense speculation. We will publish a strategy that will set out many of the answers to the questions she is posing. What we have said is that we will put affordability and fairness at the heart of our reforms to reach net zero. The fact is that everyone in this House agreed with us when we set that target. For example, we have put in place plans to bring in electric vehicles by 2030. These will require changes not just in how we spend, but in our tax and regulatory system. The answers will come in due course.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 22nd June 2021 Commons Chamber

[Mr Speaker]

We now come to the Chair of the Public Accounts Committee, Dame Meg Hillier.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Thank you, Mr Speaker.

More than 1 million people still use only cash, and approximately 4 million use cash regularly, so it is vital that they have access to it. This is now the second consultation that the Treasury is going through, but as the PAC has seen, all the distribution of cash is in the hands of private providers. Can the Economic Secretary give any indication of the type of legislation that he can introduce to ensure that if people are very poor, they can get cash? That does not mean going to the supermarket and getting it out when they do not even know what is in their own account.

[John Glen]

I congratulate the hon. Lady on her recent elevation. I take her points on board, but this is a complex area. There will need to be a range of interventions from industry, working with regulators. The LINK scheme already has a £5 million fund to help areas of great deprivation and provide extra access points for cash, but we need to recognise that technology will have to play a significant role. We will also use the extensive network of 11,500 post offices to make good on our pledge to ensure that access to cash remains available across the country.

Finance Bill

Meg Hillier Excerpts

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Sir Iain Duncan Smith]

I am grateful to my right hon. Friend. I will not risk repeating what he has said, but it is the reality. I was one of those who gave evidence to the review of the loan charge set-up because it was quite clear that it was causing huge problems for many decent people in my constituency. I am sure it was the same for Members on all sides of the House; I do not for one moment pretend that it was a problem for my constituents alone.

I recommend to my right hon. Friend the Financial Secretary some of the amendments and new clauses that we have been speaking about. I will not go through all of them, but I do want to make this point. Amendment 33, which allows an umbrella not to be an intermediary and still operate, provides strict conditions. My right hon. Friend the Member for Haltemprice and Howden laid out those five conditions, which are critical. I recommend those to the Financial Secretary; I am not going to repeat them, because we would just go on doing that all night.

I want to deal with amendment 34 in a bit more detail. The important thing about amendment 34 is that, in reality, all inside-IR35 workers could easily be paid via a recruitment agency payroll—that is the key bit here—and umbrella companies are of benefit to recruiters, not to workers. Under the original drafting of the off-payroll rules, an umbrella company could classify as a payment intermediary, so payment would have to be made to the umbrella net of tax, reducing an incentive to exist. The behavioural effect will mean agencies will put workers on payroll if they are not outside IR35. The key thing is that this would give the sector a year to re-gear and provide its service as agencies in a payroll payment bureau-type manner, instead of the Government taking other decisive action, including banning certain practices and statutory regulation.

I am trying to be reasonable about this to the Government. I do think that this is really important. I am going to conclude on this. Overall, if we look at the purpose of the amendments and new clauses in this area, I think they set out what the problem is. The people who will get hurt by all of this in the end, when the Treasury finally decides to do something about it, will be the people who were the victims of this, not those who set these schemes up.

There are five points here that are critical: the whole purpose is to stop overnight aggressive tax avoidance schemes introduced and encouraged by some unscrupulous agencies; stop overnight the exploitation of contractors, forced into schemes that adopt malpractice to skim moneys from contractors; stop overnight the kickbacks being used that encourage malpractice; provide sunset clauses to ensure that the sector has until 6 April 2022 to prepare for the changes; and make agencies and clients liable for any malpractice, thereby removing the incentives to encourage it.

These are very simple, basic points. We are not asking for a revolution; we are asking for sense. I know exactly where this is going because in 29 years I have seen this time and again—do not move; later on, blame somebody else; and back comes the Treasury to say, “We’ll now get that money back”. I think the loan charge—I come back to this—is the biggest example of where, when things goes wrong, it is those who have suffered who end up paying the penalty, not those who skimmed off the top and are now living somewhere outside the reach of Her Majesty’s Treasury. I simply say to the Financial Secretary, with all due deference: please, please give consideration to this and at least have a proper review so that we may engage with this in due course and settle it.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

First, I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

I rise to support my colleagues on the Front Bench and new clause 24 about the surcharge on overseas buyers: the extra stamp duty that is charged. Although we are seeing a 2% uplift, it is not what was originally promised, and even that, I would say, is still not enough to prevent people from speculating, particularly in my constituency and elsewhere in London, on the expensive London housing market and overheating that housing market.

I came across this level of investment in my early days in this place—I have now been here for 16 years—when I discovered that whole blocks of new developments were being bought up overnight. I could not work out who was doing it. I then managed to inveigle my way on to the distribution lists of some of the estate agents, which were advertising the properties in Hong Kong and Dubai, and they sold over a weekend.

These were not homes for local people. They were often bought up by finance companies overseas and sold on. The original reason for the extra stamp duty surcharge was to try to curtail that to some extent, but I do not think it is enough. Foreign investors are buying homes, which are becoming commodities; they are advertised with yield—it is simply about increasing the rent. As the shadow Minister, my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare), highlighted, at least £53 million and counting in revenue has been lost from the Exchequer at a time when we need it more than ever. The excuse is often that developers need the money because they cannot operate without that cash-flow model. I think they would adapt pretty quickly. In my constituency, there are blocks that local people have kept their eye on, wanting to try to buy, only to find they have already been sold en masse overseas. A stamp duty increase would help a little bit.

The stamp duty holiday has been helpful to many people, but all that contributes to fuelling demand for housing while the Government are not increasing supply. Those rising house prices put homeownership out of reach of so many of my constituents and people up and down the country. It is having a major dampening impact on people’s lives and livelihoods and on the economy in the long term. It does nothing for private renters and nothing for those in desperate need of affordable housing.

We are now able to go out and do our normal roving surgeries on doorsteps, and I will give some examples of people I have met in the last week alone. Faisal works in the NHS. He has three children in a two-bedroom council flat, and he has been bidding to move to a bigger property for 10 years, but such is the demand in my constituency that someone in housing need does not get to move. If they are homeless, they now get stuck in a hostel room for years, whereas only five or so years ago it was for about six months. Jane—not her real name—and her husband live with two large teenage boys in a two-bedroom flat. I have known her for some years, having seen her at surgeries. I happened to be on her doorstep the other day, and she made sure that I saw how big her boys have become. She has been coming to see me since they were toddlers, yet she still cannot get rehoused. This is no criticism of Hackney Council, which is doing a fantastic job of trying to build, and is building, affordable social housing, but it cannot keep pace with the demand. In the last week alone, two women I knocked on the doors of were sharing beds with their 12 and 13-year-old sons respectively.

One of the saddest cases is an NHS porter I met less than 10 days ago who shares a room in a private rented home with his 16-year-old daughter. He works. He could not qualify for affordable housing even if he wanted to, because he has no recourse to public funds, despite propping up our NHS in one of the most challenging years in its history. He is doing all the right things—working, trying to be a good father—but he cannot afford private rents. That is not surprising: it is at least £1,500 a month to rent a two-bedroom flat in my constituency; £750,000 to buy a two-bedroom flat; and rent for a three-bedroom house is not much shy of £3,500 a month.

We need to increase stamp duty immediately, while monitoring its effect, and we should increase it further for overseas purchasers. We should not have a housing market that has led to homes being owned by finance vehicles or absentee landlords who have no interest in it being a home but simply see it as an investment. Homes should be homes. Investment is all very well, but this is really damaging the future prospects of children in my constituency, some of whom will never have not only their own bedroom but maybe even their own bed between now and when they hopefully earn enough money to leave home, although frankly we are a long way off their earning enough money to buy a £750,000 flat. The Government really need to step up. They talk about levelling up, but that is certainly not happening for many people in my constituency.

--- Later in debate ---

[Meg Hillier]

I have to challenge the Minister on IR35. He is speaking as though it is somehow all fine. It has decimated sections of the tech and IT industry in my constituency, where groups of people came together to deliver short contracts and were actually paying as much tax as the Exchequer was getting from them. I can provide figures if he would like to take this up further, but let us not pretend that it is all fine.

[Jesse Norman]

There is no suggestion on my part that it is all fine. One cannot make meaningful change to a market that is not performing as one would like and expect everything to be perfectly fine within weeks of the implementation of the measure. The point that I am making is that there are important players in the industry that recognise that—in the quote that I have given—“thousands of businesses” are

“now aware… that IR35 reform is manageable”,

and so it is.

As the hon. Lady will well know, under the previous arrangements there were people who were performing like employees—often working side by side with them—but not paying that tax, and it was important that they did so. If she doubts that, she might want to reflect on the question of what the tax revenue raised from those organisations is used for. The answer is that it is used to support the NHS, our public services and all the other things that the Government are trying to do to get this country through a difficult moment in our history.