Economy and Jobs

Peter Bottomley Excerpts

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

Let us test that proposition. When these industries were last in public ownership, who were they managed by? They were managed by intervening, interfering politicians and their buddies in the trade unions.

[Sir Peter Bottomley (Worthing West) (Con)]

My right hon. Friend has dealt with amendment (l). Let me now turn to a non-party-political initiative, led by the hon. Member for Walthamstow (Stella Creasy) and me, and by most other Members on both sides of the House, and the discussions that we have been having with the Government about the question of the women in Northern Ireland and whether only the poor should be denied lawful abortions. Is there anything that the Government can say about that?

[Mr Hammond]

That takes me slightly away from my line of attack, but I know that the issue is of great importance to Members on both sides of the House, and that my colleagues on the Treasury Bench have been seeking a solution. I understand that my right hon. Friend the Minister for Women and Equalities either has made or is about to make an announcement in the form of a letter to Members explaining that she intends to intervene to fund abortions in England for women arriving here from Northern Ireland. I hope that the House will consider that to be a sensible way of dealing with the challenge.

Equitable Life Policyholders: Compensation

Peter Bottomley Excerpts

Thursday 23rd March 2017 Commons Chamber

[Fabian Hamilton]

Indeed, I do agree, and I will go on to say something about that, but there is also a third dimension, which is that we have a moral duty to ensure that the Equitable Life policyholders are compensated.

How have we arrived at this situation at this point in time, 17 years after Equitable closed its doors to new investors, and seven years after the previous Government promised to ensure that the losses incurred by Equitable policyholders would be compensated? My first involvement in the Equitable saga was to speak in an Adjournment debate that I secured in Westminster Hall on 24 June 2009. In that debate, I spoke about the serious issues facing all our constituents since the crash of Equitable Life, following its inability to meet its obligations and the promises it had made to investors over the decades. Equitable Life started selling pensions as early as 1913, but it was not until 1957 that the society started selling its now infamous guaranteed annuity rate pensions, which promised a clear and unambiguous return on the capital invested. That carried on until 1988, when the society realised that its rates were so good and so far ahead of the rest of the market that they were, in reality, totally unsustainable. In December 2000, Equitable Life was forced to close to new business.

[Sir Peter Bottomley (Worthing West) (Con)]

In that year, there was the, to me, rather surprising Appeal Court judgment regarding those who had contracts saying that if they put in more money, they would get greater rates of return. The judgment totally missed the fact that all the policyholders were members of the society. The senior judges did not fully understand the consequence of what they were doing, and it was unfair to too many.

[Fabian Hamilton]

I completely agree with the hon. Gentleman. Unfortunately, the time available limits what I can say about the judgment, and I want to talk about what we need to do now.

By the time Equitable was forced to close, it had more than 1.5 million members, and was one of the biggest societies in the world.

--- Later in debate ---

[Fabian Hamilton]

I thank the hon. Gentleman for his intervention, because one of the great things we do in this House is to work on moral issues such as Equitable together, across party lines. I am proud to work with the hon. Member for Harrow East—I hope he will allow me to call him an hon. Friend—because he has done an awful lot, and I pay tribute to him for the work he has done. I have done my best to work collectively and collaboratively as the co-chair of the all-party group, because we need to do this together. This is a moral issue, as I shall come on to elaborate.

In July 2008, the parliamentary ombudsman published her first report on Equitable Life, “Equitable Life: a decade of regulatory failure”. On 11 December that year, the Public Administration Committee produced a report entitled “Justice delayed”, which said:

“Over the last eight years many of those members and their families have suffered great anxiety as policy values were cut and pension payments reduced… Many are no longer alive, and will be unable to benefit personally from any compensation. We share both a deep sense of frustration and continuing outrage that the situation has remained unresolved for so long.”

Well, there has certainly been no shortage of reports, just a shortage of justice for those who, through no fault of their own, suffered huge losses in the life savings they had accrued over years of hard work.

At the core of the problem is the fact that Equitable Life simply could not meet the obligations it had made for itself, because it had made no provision for guarantees against low interest rates on policies issued before 1988. It therefore declared bonuses out of all proportion to its profits and assets.

Following the ruling of the House of Lords in July 2000, the society effectively stopped taking new business in December of that year, which spelled the end for Equitable. More than 1 million policyholders found that they faced severe cuts in their bonuses and annuities, which caused a huge loss of income on which many small investors were depending. After all, as I have said, the average investment among the 500,000 individual policyholders was just £45,000, which even at its height, according to the Equitable Members Action Group, would have yielded no more than £300 per month.

In its December 2008 report, one of the many recommendations of the Public Administration Committee stated:

“We strongly support the Ombudsman’s recommendation for the creation of a compensation scheme to pay for the loss that has been suffered by Equitable Life’s members as a result of maladministration. Where regulators have been shown to fail so thoroughly, compensation should be a duty, not a matter of choice.”

Reacting to the Government’s lack of response to the ombudsman’s report, the then Conservative Opposition expressed their determination to introduce an Equitable Life (Payments) Bill early in the next Parliament, should they form a Government after the general election of 2010. The legislation planned in the coalition agreement did, indeed, include such a Bill and it was introduced in June 2010, shortly after the new Government took office.

On 10 November 2010, I tabled an amendment to the Bill in Committee, supported by my hon. Friend the Member for Harrow East, that would have included the pre-1992 with-profits annuitants—WPAs—who had been specifically excluded from the proposed compensation scheme contained in the Bill. The Bill offered 100% compensation to all with-profits annuitants who had taken out their annuities after 1 September 1992 and, as we have heard, 22% compensation to every other policyholder. Many Members from all parts of the House felt that that was inherently unfair, as the date of 1 September 1992 was somewhat arbitrary. That relatively small group of with-profits annuitants were the eldest and by far the most vulnerable policyholders. Many of them would not even live to enjoy the compensation, were it to be paid. Indeed, that has been borne out in reality.

My amendment to the Bill simply read:

“Payments authorised by the Treasury under this section to with-profits annuitants shall be made without regard to the date on which such policies were taken out.”

The Public Bill Office helped me to draft that amendment. The debate on the amendment took just over two hours, but the Division was lost by 76 votes in favour to 301 against. The debate did, however, strongly set out the case for including the pre-1992 with-profits annuitants.

The Bill received Royal Assent in early 2011 and the compensation scheme was set in motion. At first it was slow, but it began to pick up over the subsequent years. By the end of January 2015, more than £1 billion had been paid out to 896,367 policyholders, although more than 142,000 policyholders were still to be found and could not be traced. The scheme, as we know, has now closed. We also know that 37,764 with-profits annuitants, or their estates, were issued payments by the scheme. Those initial and subsequent payments totalled £271.4 million.

In conclusion, I have to give credit to the coalition Government for introducing a compensation scheme from which the majority of Equitable policyholders received 22p in the pound. I am sure we would all agree that that is a lot better than nothing. However, when we examine the compensation that was paid to Icesave investors following the collapse of the Icelandic banks in 2008, from which every investor received up to £50,000 of their losses in full, the Equitable scheme looks rather less than generous. Given that the average policy involved a total sum invested of £45,000, as I have said, it seems rather unfair to Equitable policyholders that they did not receive more. That is why EMAG continues to campaign for full compensation for all Equitable policyholders in a reasonable way—in line with the growth of the economy, not all at once—and why so many Members from all parts of the House continue to support that view.

Equitable policyholders have been very patient. They understand that the recession, at the time, meant austerity and a huge shortage of money for many parts of Government and the state. What they cannot understand is that, as the economy grows, they are denied any further payments against their very real losses. I have heard, as many right hon. and hon. Members will have heard, heartbreaking stories from individuals and constituents, some of whom have lost everything, including their homes, all because of Equitable’s failure and the company’s “catastrophic” regulation.

I have said in all my previous speeches in the House on Equitable Life that this is fundamentally a moral issue. When the Government are supposed to protect the life savings of individuals who have been encouraged to provide for themselves, as was the case with Equitable, they have a duty to ensure that the losses incurred are adequately compensated. That obligation should I believe, come above pet projects such as, perhaps, HS2 and even Trident renewal; otherwise, the whole fabric of trust in the state is damaged, which I believe is exactly what has happened in this case. Finally, I urge all Members of this House to continue to uphold the cause of Equitable policyholders and to try to restore their faith in the ability of Members of this House, as the elected representatives of the people, properly to compensate the victims of one of the greatest financial scandals of our age. After all, I believe we have a moral duty and we should not be afraid to carry it out.

[Sir Peter Bottomley]

On a point of order, Madam Deputy Speaker. I would like to correct an oversight. When I intervened on the hon. Member for Leeds North East (Fabian Hamilton), I should have declared that I have a small Equitable Life policy.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

We are grateful to the hon. Gentleman for his correction of the record.

Budget Resolutions

Peter Bottomley Excerpts

Thursday 9th March 2017 Commons Chamber

[Sajid Javid]

As a midlands MP, the hon. Gentleman will understand that the devolution deal for the region will lead to additional funding of more than £1 billion over the next 30 years, which can be invested in priorities such as transport infrastructure. I believe that the right leadership is in place, and that that is exactly what will happen. That is why I am supporting Andy Street to become the next Mayor, and I hope that the hon. Gentleman will join me in expressing his support for him. Perhaps that is what he was just doing.

The hon. Gentleman will also be pleased to hear that this morning we published details of £392 million of additional funding for the midlands, allocated through the third local growth fund. That money will further unlock the region’s potential, funding infrastructure and creating jobs. Much of it will go to Birmingham, for example. The Budget includes £90 million for the north and £23 million for the midlands from a £220 million fund that addresses pinch points on the national road network. The Chancellor has launched a £690 million competition for local authorities across England to tackle urban congestion and get local transport networks moving again. That is a serious investment in our communities that will make a real difference to the daily lives of millions of people and countless businesses. We can make that investment precisely because of the fair, progressive changes that we are making to the tax system. We are levelling the playing field between employees and the self-employed, and 60% of the self-employed—the lowest earners—will gain from these reforms. We are also continuing to reduce corporation tax on all profitable companies, large and small, so that hard-working entrepreneurs keep most of the fruits of their labours.

We are taking a number of steps to make business rates fairer. I have never made any secret of my support for business, and for small businesses in particular. Seeing my dad’s shop struggle was one of the reasons I came into politics in the first place. From the biggest cities to the smallest villages, the local high street and the local pub form the heart of countless communities across our country. That is why the Chancellor and I listened closely when concerns were raised over this year’s business rate revaluation, and why I was happy to work with colleagues across Government to secure action.

The majority of business will see no increase or even a fall in their business rates, but I know that if someone’s rates are going up, it is no consolation to hear that someone else’s will be going down. The bigger picture will not pay their bills, so the Budget introduces three new schemes that will help businesses facing steep rises. The first involves additional support aimed specifically at small and rural businesses that are losing some or all of their rate relief and are facing large percentage increases in their bills as a result. The additional relief will limit the annual increase in the bill for an eligible business to the greater of either £600 or the cap in increase for small properties in the existing transitional relief scheme. That is 5% in real terms in 2017-18. No small business losing some or all of its relief as a result of the revaluation should see its bills rise by more than £50 a month in 2017-18.

The second measure is the establishment of a £300 million discretionary fund for local authorities to use over the next four years. Each billing authority will receive a share of this funding and will be able to use it to deliver targeted support to the most hard-pressed ratepayers in its area. This will allow local authorities to more than double the amount they spend on discretionary relief in 2017-18. Finally, there is a new relief for pubs. This will provide a flat £1,000 discount in 2017-18 on bills for all pubs with a rateable value below £100,000. My Department will be publishing full details later, but up to 36,000 pubs—that is approximately 90% of them— could benefit from the relief. The cost of all three models will be met in full with new money allocated by central Government.

Recent consultations have shown little appetite for wholesale reform of the business rate system. However, there is scope to reform the revaluation process, making it smoother and more frequent to avoid the dramatic increases that the present system can deliver. We will set out our preferred approach to delivering this in due course, and will consult on it before the next revaluation is due. In the medium term, we need to find a better way of taxing the digital part of the economy so that online businesses do not enjoy an unfair advantage. This is another example of the way in which this Government deliver lasting reform alongside immediate investment. It is the difference between a sticking plaster and long-term cure.

[Sir Peter Bottomley (Worthing West) (Con)]

The Chancellor has announced that there is to be a Green Paper on dealing with unfair clauses and terms in consumer contracts. I do not know whether the Secretary of State has been paying attention to the difficulties that leaseholders are facing, but will he ensure that, one way or another—preferably one way and another—those are taken into account, if necessary through a super-complaint, so that unfair terms can be struck out and those who exploit leaseholders can be dealt with firmly?

[Sajid Javid]

I commend my hon. Friend on the work that he has done on leasehold abuses. That Green Paper is being led by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, and we are considering whether leasehold abuses could be included in it.

We are not just putting billions of pounds more into adult social care; we are developing a whole new strategy to safeguard it for the long term. We are not just tackling the short-term problems created by the business rates revaluation; we are looking at ways to improve the system for many years to come. We are not just continuing to invest in world-class public services; we have also asked Sir Michael Barber to look at ways of making government more efficient so that we get maximum value for taxpayers’ money.

As we debate the Budget, let us not forget that every last penny invested by any Government ultimately comes from taxpayers—from hard-working employees and fast-growing businesses—and they can succeed only if we have a strong, stable, sustainable economy. Without that, there would be no NHS, no outstanding schools, no social care for the vulnerable and no support for small businesses. We have all seen what it looks like when Governments forget that. After 13 years of Labour rule, their Chief Secretary to the Treasury said that there was no money left.

The Leader of the Opposition stood at the Dispatch Box yesterday and made promise after promise. It was fantasy economics, with billions upon billions of pounds in unfunded and unaffordable measures that would undo in an instant everything the people of this country have worked so hard to achieve over the past seven years. We are cutting the tax burden on businesses; he wants to increase it. We are reducing the deficit; he wants to raise it. We want to borrow less; he wants to saddle our children with the bill for another reckless spending spree. Government Budgets are big, complicated things, but they are simple at their heart: if we want to spend more, we have to borrow more, tax more, or cut spending elsewhere. Anyone who says otherwise is not being straight with the British people. There is no such thing as a magic money tree. Sustainable public services can be funded only by sustainable growth. This Budget delivers both. The Opposition would give us neither.

Scotch Whisky Industry

Peter Bottomley Excerpts

Thursday 12th February 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

I congratulate the hon. Member for Argyll and Bute (Mr Reid) on securing this debate, and I thank him for the constructive points he has raised today. Anyone who has enjoyed a dram will recognise the historic whisky producing names in his constituency. Islay and Jura in the hon. Gentleman’s constituency has some of the finest malt whiskies in the world, and that is something that we should all commend, celebrate and be proud of. The world-famous whiskies and distillery experiences on offer are also key contributors to the tens of thousands of visitors who come over every year. I absolutely understand the significance of tourism in his constituency thanks to the whisky industry, which translates into jobs.

There is no doubt, as we have heard from both the hon. Member for Argyll and Bute and the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), about the wider economic benefits of Scotch whisky to the Scottish and British economy. They are significant and have also been highlighted in the report by the Scotch Whisky Association. It is only fair and right that I should pay tribute to everybody who has spent time engaging with me, including all hon. Members in the Chamber this afternoon and the all-party group. In particular, I thank them for highlighting that Scotch whisky is the biggest food and drink sector in the United Kingdom, representing nearly a quarter of our food and drink exports.

The industry supports, both directly and indirectly, more than 40,000 jobs, 92% of which are in Scotland. The significance of the industry is phenomenal, with a contribution of in excess of £3 billion directly to UK GDP, and an overall impact of £5 billion.

Distilleries and visitor centres add an additional £30 million to the Scottish tourism industry every year. Of course, this is also about the tremendous image that the industry presents of both Scotland and the United Kingdom across the world. The hon. Member for Argyll and Bute talked about the export markets, and in particular the work of UK Trade & Investment, the work we do across Government to ensure that Scotch whisky is a major economic asset to Scotland and the UK, and why it is important that we keep it in its unique position.

For example, we have introduced the spirits verification scheme to protect the integrity and high reputation of Scotch whisky brands in the export market, which is where 90% of Scotch whisky ends up. It is about having high standards and setting standards on production and labelling for producers to sign up to. That particularly helps with non-compliance in the industry, ensuring that those who buy Scotch get the real deal. That is of course a step change and we have worked in conjunction with the SWA. The hon. Gentlemen will be very familiar with that work. Of course, UKTI has an important role to play in supporting Scotch whisky across our worldwide network of embassies and in bringing it to new and emerging markets, from Lebanon to India to Taiwan, all of which have seen exports increase by more than a quarter in the past year alone.

The hon. Member for Argyll and Bute was right to talk about the lobbying on the abolition of the hated duty escalator in the Budget last year. I campaigned for that myself, so I am familiar with the campaign. Of course, it demonstrates that we should not punish a successful, world-famous industry with excessive taxation. The all-party group on Scotch whisky and spirits has been very good in its representations and I thank it for that. It is fair to say that although I am naturally not in a position to discuss anything to do with the Budget at this stage, I have heard clearly from all Members this afternoon the arguments that have been made about the level of taxation on whisky, particularly when compared with other alcoholic drinks. Those points have come out in my meetings with stakeholders and the industry, too.

[Sir Peter Bottomley (Worthing West) (Con)]

I speak not as a producer but as a drinker of whisky, as are many of my constituents. The archivists at HMRC and the Treasury might be able to dig out the meetings some of us had with the then Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), back about 19 years ago, when he was convinced that it was better not to increase and to drop the whisky duty. That led to an increase in revenue, so was fair to drinkers, to producers and to the Revenue, which seems to be a sensible thing to do, and we look forward with confidence to the Budget.

[Priti Patel]

I thank my hon. Friend for his recommendations and advice to go back and look in the archives. I shall certainly do that.

I need no persuading of the considerable impact that the industry brings to Scotland and the United Kingdom. Obviously, all decisions on taxation are under constant review, and we are particularly receptive to helping industries flourish in some of our most remote regions. As I have said, decisions on the duty will be made by the Chancellor at the Budget, and I do not wish to pre-empt anything in relation to the Budget. We want to ensure that Scotch whisky continues to be enjoyed around the world for many years to come, and we want Scotch whisky to continue to be a great flagship brand.

Question put and agreed to.

Beer Duty

Peter Bottomley Excerpts

Thursday 5th February 2015 Commons Chamber

[Andrew Griffiths]

I absolutely understand the points that my hon. Friend makes, but I gently point out that seven out of 10 drinks that are drunk in pubs are beer. If we value our community pubs, we can support them by supporting the great British brewing industry. Beer gets people into our community pubs, which are the backbone of our society, and each pub contributes £80,000 a year to the local economy. Of course, some of them offer other services—they are the post office, the local shop, and offer many facilities. We have heard of groups who have meals on wheels in their pubs. Pubs play an important role, and, as I have said before, they form the fabric of our community: the great British pub.

[Sir Peter Bottomley (Worthing West) (Con)]

I congratulate my hon. Friend on winning the beer award at the marvellous evening that we had on the Terrace. Will he join me in thanking the pub trade and the brewers for their help in reducing drink-driving while maintaining the social life of the pub, where more controlled, sensible and responsible drinking takes place than in many other places?

[Andrew Griffiths]

Indeed. If we want to tackle problem drinking, our community pubs are the solution, not the problem. Encouraging people back into the pub is the way to tackle that. My hon. Friend talks about publicans. According to Pub Aid, £120 million is raised for charity each year as result of people supporting initiatives in our pubs. We should all support that.

When Labour’s hated beer duty escalator was introduced in 2008, we saw a duty increase of 42% in those few years. That hit beer sales, made pints less affordable and closed pubs. If we care about pubs, that should worry us.

[Sir Peter Bottomley]

A very short point, and it is not supposed to be too pointed—it is interesting that there is not a single Labour Member present for this important debate on beer.

[Andrew Griffiths]

I recognise the point that my hon. Friend makes. It is not lost on me that it was Labour that introduced the beer duty escalator, but as I said, many MPs on all sides supported the campaign for its abolition.

When the beer duty escalator was introduced, beer consumption fell by 16% across the board, and in pubs it fell by 25%. The decision by that Labour Government closed pubs—7,000 of them—and we lost 58,000 beer-related jobs as a result. The amazing thing is that although beer duty increased by 42%, beer duty revenue to the Treasury increased by only 12%. We can see the impact that the escalator had not only on our pubs and our brewers, but on the Treasury take—the goose that laid the golden egg and that Labour Chancellor choked it. We can see the folly of the escalator.

When the current Chancellor chose to scrap the beer duty escalator in 2013 and cut beer duty for the first time since 1958, he was cheered by 32 million beer drinkers across the country and 170,000 CAMRA members who had worked so hard to bring that about. Last year we saw that historic second cut in beer duty. My right hon. Friend was the first Chancellor in history to cut beer duty in two successive Budgets and I commend him for it. The cut was passed on by the industry. There are some who try to suggest that brewers or pub companies did not pass it on to their customers, but we have seen the lowest increase in beer prices since the 1980s—just 2.2%. When, as we are often told, we are suffering from a crisis in the cost of living, the fact that the Chancellor cut beer duty and therefore delivered lower beer prices so that hard-working men and women could enjoy one of life’s simple pleasures, is important.

Consequently, as I said earlier, we have seen a growth in beer sales for the first time in 10 years. That means brewers, publicans and all the related trades having business through their doors and are on the up, which must be good news. According to the British Beer and Pub Association, those two duty cuts and ending the escalator saved 16,000 jobs. Most importantly, confidence in the industry is up, confidence in the Government is up, and as a result some £1.1 billion is likely to be invested over the next 12 months. I have seen the impact in my constituency. Molson Coors is investing £75 million in its brewery in Burton, and Marston’s has invested over £20 million in its bottling plant in Burton. That is not just brewers on the up, but engineering and manufacturing—another success story.

When we made the case to the Chancellor two years ago, we said, “Cut beer duty and beer sales will go up; cut beer duty and the Treasury’s tax take will increase.” In results that would make Jonathan Isaby of the TaxPayers Alliance dance around his office in glee, we have proven that lower taxes for the brewing industry result in a better return for the Treasury. Even sales in pubs, which we have all been concerned about, have declined by less than 1% over the past 12 months. That is clear evidence that we are beginning to see a change, with investment and growth in our pubs. The last time we saw such a performance was in 1996, and strangely enough that was the last time we had a Conservative Government—cause and effect.

What has been the result for the Treasury’s tax take? Over the 12 months to November 2014, beer duty revenue actually increased by £39 million, and it is £15 million higher than it was in March 2014. Add the additional VAT and jobs-related taxes and we can see that cutting beer duty is great news for the Treasury. The Government have also cut business rates, helped with apprenticeships, and followed a long-term economic plan that is supporting small businesses. That all means the brewing industry and the pub industry have a great deal more confidence and are on the up.

However, hard-pressed British beer drinkers still pay 40% of all Europe’s beer duty, despite drinking only 13% of the beer. If we could cut beer duty just a little more, we would see more great British products being consumed. Of course, we are now exporting that great British product around the world, not only to France, Germany and other European countries, but to Japan and China. The industry has massive potential.

Madam Deputy Speaker, having listened to the facts and the evidence, I am sure you will agree that the Minister must now be thinking, “Why on earth wouldn’t I cut beer duty a third time?” The economic case, the social case and the jobs case have all been made. However, I want to remind her of one final consideration that she might not be aware of: her last two predecessors who decided to cut beer duty are now in the Cabinet—cause and effect. Cutting beer duty is good for the Treasury, good for the industry and good for our communities. I am sure that she is listening, and I hope that we will see a hat-trick in the Budget this year.

--- Later in debate ---

[Priti Patel]

Of course, the answer is yes to the delegation. My hon. Friend is right that the wine industry makes an enormous economic contribution. Earlier, he referred to English wines. I speak proudly as the Member of Parliament for Witham as I, too, have a good vineyard in my constituency. The wine sector is to be supported and commended as well. I will take him up on his offer; he is very welcome to come and meet me at the Treasury.

As my hon. Friend the Member for Burton pointed out, the previous Government’s beer duty escalator hit the industry hard. It led to pub closures and cost people their jobs. Of course, we have made changes to the escalator. In recognition of what happened in the past, we went on to cut tax on a typical pint of beer by one penny at Budget 2013 and another penny at Budget 2014. I am delighted that he celebrates the fact that the duty on a typical pint of beer is now 8p lower than under the previous Government’s plan. According to the British Beer and Pub Association, the jobs of 16,000 people have been secured by our duty cuts, and for them the duty cuts have been fundamental to their livelihoods. The duty cuts have also boosted confidence in the brewing and pub sector and, importantly, they have led to greater investment and greater economic security when it comes to jobs.

Research for the British Beer and Pub Association estimates that an additional 186 million pints will be sold in the on-trade this year as a result of our beer duty cuts. To meet that increase, it estimates that there has been a 12% rise in investment—in monetary terms, an additional £44 million—in the sector in the last year directly as a result of the cut in duty. According to a recent survey, 86% of its members are planning to increase their investment in the UK. That strengthens our economic case, and shows that we are serious about supporting the pub sector.

As my hon. Friend said, nearly two thirds of all the alcohol sold in pubs is beer, but other drinks are important to pubs. To ensure that help is extended to pubs that have diversified away from beer, at Budget 2014 we froze duties on spirits and ordinary cider. Of course, we ended the escalator on wine as well; I am somewhat familiar with the campaign in favour of that.

Pubs are benefiting from the wider changes that the Government have made to support business. Three quarters of pubs are benefiting from a £1,000 reduction in their business rates this year. The reduction will rise to £1,500 next year. We have extended the doubling of small business rate relief to April 2016, which, as my hon. Friend knows, will particularly help the eight out of 10 pubs run as individual small businesses. Pubs will benefit from our national insurance changes. The £2,000 employment allowance has reduced employer national insurance contributions for all businesses. Pubs will also benefit from the reduction in employer NICs for young people, which is particularly important because 46% of the people employed in pubs are aged between 18 and 24. We have introduced regulatory changes to make it easier for pubs to play live music, and to allow beer and wine to be served in glasses of different sizes.

As I am sure my hon. Friend will know, there is no such thing as a typical pub. There are as many different types of pub as there are types of customer, so pubs should have the flexibility to meet customers’ needs. It is fair to say that customers want reasonably priced drinks, naturally, and I am glad to say that our duty cuts are translating directly into more beer for your buck. Beer prices in the on-trade are rising at their lowest rate for more than 25 years: 96% of British Beer and Pub Association members have said that they plan to reduce or freeze their prices as a result of our policies. That is fantastic news for the 32 million people in the UK who drink beer each year; incidentally, that is more than the number of people who voted in the last general election.

Our customers want choice. It is great news that more than three quarters of respondents to the British Beer and Pub Association survey intend to launch new products directly as a result of the cut in beer duty. Small brewers relief has reduced the beer duty paid by micro-brewers by up to a half. That has encouraged new micro-breweries to be set up and to expand. There are now 1,000 more breweries in the UK than in the year before small brewers relief was introduced.

I am particularly interested in how we can do more to help those industries, because there are many associated benefits from having more thriving breweries, not just in exports, but in the tourism offer, as my hon. Friend has said.

[Sir Peter Bottomley]

Regional brewers also matter. Will my hon. Friend allow me to pay tribute to Hall & Woodhouse, which is one of the many? It set up the community chest in Dorset and West Sussex, which gives grants to good organisations. Not all of the organisations are run in the pubs, but the pubs and brewers want to support them.

Money Transfer Accounts and Remittance Sector

Peter Bottomley Excerpts

Wednesday 22nd January 2014 Westminster Hall

[Sir Peter Bottomley (Worthing West) (Con)]

I apologise for not being here at the beginning of the debate and because a long-standing constituency commitment will prevent me from being here for the end. I shall therefore make a very brief contribution.

First, I hope that we will hear from my hon. Friend the Minister that there are international discussions, because this is not a problem just for Britain and for Barclays. Secondly, we must accept that people will get remittances to their families one way or another. The real question is whether the cost is excessive and whether there is an audit trail. Nearly everything that goes outside the ordinary banking system has a much higher cost and no audit trail. I hope that the Minister will be able to talk today, or will ensure that we hear soon, about an internationally acceptable way in which remittances can be passed to people’s families in their home countries at a reasonable cost and with some kind of audit trail.

Sixth-Form Colleges (VAT)

Peter Bottomley Excerpts

Tuesday 17th December 2013 Westminster Hall

[Mr Gauke]

I am not entirely surprised by the hon. Gentleman’s comments. I have no doubt that he would not hesitate to put up income tax by 1p. In the context of the current fiscal situation, we have to be very careful with public expenditure. The Department for Education will, of course, keep the sector’s funding under review.

Although I recognise that colleges have concerns, the reform of 16 to 19 education is one of the Government’s priorities. The Government remain committed to moving towards fairer funding of 16 to 19 education by levelling the rate of funding for schools and colleges by 2015.

[Sir Peter Bottomley (Worthing West) (Con)]

I am sorry that I missed the earlier remarks about 18-year-olds and the £700 cut in funding, which will mostly affect people in poorer postcodes. Does my hon. Friend the Minister accept that if the schools budget was increased by 0.8% rather than 1%, there would have been no need for a 17.5% cut in 18-plus funding to Worthing college and other sixth-form colleges?

[Hugh Bayley (in the Chair)]

Order. Minister, you have two minutes.

--- Later in debate ---

[Mr Gauke]

Department for Education Ministers have decided to make savings in the academic year 2014-15 by reducing the participation requirements for 18-year-olds in full-time education. It is worth pointing out that most 18-year-olds will have already benefited from two years of post-16 education. We are of course in a situation where difficult choices must be made about public finances; my hon. Friend the Member for Worthing West (Sir Peter Bottomley) is well aware of that.

The Department for Education is introducing a series of reforms in partnership with the sector to help drive up standards and improve the quality of provision by implementing Alison Wolf’s proposals for 16 to 19 education, by introducing new traineeships for school leavers, and by reforming the apprenticeships programme to route funding directly to employers.

To conclude, while the Government recognise the concerns raised by sixth-form colleges, this position is not unique to such colleges. The Government have no plans to make any change in this area in the near future, given the fiscal climate.

[Sir Peter Bottomley]

rose—

[Hugh Bayley (in the Chair)]

Order. The Minister having sat down, I am bringing this debate to an end.

I want to put on record—an unadvisable thing to do to any statement from the Chair—that more than 20 Members were present for a half-hour debate, which is extremely unusual and indicates the importance that many hon. Members attach to the subject. I apologise to the Minister and the hon. Member for Wigan (Lisa Nandy) for the manner in which the debate was interrupted by a Division in the House.

HM Revenue and Customs

Peter Bottomley Excerpts

Tuesday 5th February 2013 Westminster Hall

[John McDonnell]

That excellent point about simplification of our taxation system, and focusing on priorities, is made time and again, and I fully agree. We shall return to it, and perhaps new measures that the Government are presenting this year will help. However, there is no use in our introducing measures or making policy demands without the staffing resources and professionals to implement them.

Last week’s PAC interrogation of the big four accountancy firms revealed the scale of the resources that they plough into advising their clients—the big corporations, and the wealthy—on how to avoid tax. Private sector accountancy firms, including many of the banks—it is not just the big four, but some banks and other financial advisers—have a long history of devising ingenious tax avoidance schemes on what I believe the Minister once described, with reference to a scheme that Barclays Bank once operated, as an industrial scale. Schemes to enable companies to avoid tax have been operated on such a scale. It has been going on for at least the past two decades.

Although the big accountancy firms, along with banks and financial advisers, have been investing in staff recruitment and training on a scale that has produced this massive base of tax avoidance opportunities for companies, there have been massive staff cuts in HMRC and the department feels, therefore, that it has one hand tied behind its back when trying to confront the issue.

[Sir Peter Bottomley (Worthing West) (Con)]

The greater part of the hon. Gentleman’s speech is obviously about the collection service and HMRC’s resources, but as he has talked about some of the bigger companies and the accountancy firms, does he agree that it is right to consider whether each company should state on the front of its annual accounts its turnover, surplus, calculated profit, and tax paid other than on staff wages and national insurance? That would bring things out in the open, and directors might ask themselves, “Is this justifiable?” let alone lawful.

[John McDonnell]

That is an excellent proposal. The hon. Gentleman has hit the nail on the head regarding transparency and openness. It is not only the directors; the shareholders have a responsibility as well. The veil of secrecy over tax avoidance, and the advice given on it, undermines the opportunity for shareholders to hold directors and companies to account. Many shareholders are institutional ones, and they have a commitment to their companies behaving morally as well as legally.

It is not just avoidance though. On January 7, I read —in The Daily Telegraph, so it must be true:

“Tax fraud has reached its highest level since the onset of the financial crisis, as VAT evasion has exploded, costing Britain more than £3bn a year…The size of the so-called ‘VAT gap’ due to fraud, the difference between the amount of tax HMRC expects to receive and what it actually collects, is reckoned to have reached £3.3bn, or enough to fund a 1p reduction in the tax of every UK taxpayer.”

So it is not just evasion and avoidance; it is VAT fraud as well. It is no wonder there are problems. I again quote from The Daily Telegraph—I am going to have to give up reading it:

“taxman embroiled in 20,000 tribunal cases”.

According to the article, HMRC estimates that because of the lack of staff the backlog of cases will take “38 years to clear.” That is how bad it has got.

The Institute of Chartered Accountants briefing states simply that, in the view of independent accountants, the system is not working. Why not? One reason is the scale of the cuts. HMRC has been charged with finding a 25% reduction in expenditure. I accept that that was under the previous Government, but I was critical then also. Under this Government, it is expected to find another 15%. What does that mean? The Minister and I were involved in a discussion about this in the main Chamber a few weeks ago. That scale of reduction would be startling for any organisation. In 2005, HMRC employed 97,000; by 2015 it is planned that the total staff numbers will be 55,000—almost half the staff cut. Since this Government were elected, 7,000 HMRC jobs have gone. The objective in all this is to save what? Some £1 billion. That makes no economic sense when there is a tax gap—tax that remains uncollected—of, according to Government figures, £40 billion or, according to other people, potentially £120 billion.

To be frank, HMRC is woefully under-resourced to tackle the tax gap, and fraud and evasion, and the view of professionals in the field is that the staff cuts seriously hinder the department’s effectiveness. The Government have claimed that they have recently overseen a rise in staff levels, and that is true. There have been some additional staff, and I congratulate the Minister on that. Overall, however, staff numbers have dropped by 7,000 since the Government were elected.

Finance (No. 4) Bill

Peter Bottomley Excerpts

Wednesday 18th April 2012 Commons Chamber

[Mr Marsden]

I thank the right hon. Gentleman for that intervention and I pay tribute to his work as chairman of the Historic Chapels Trust. I can only say, however, that I know of no examples in Blackpool where such a process has been the driver. The driver in Blackpool has been to make churches, such as the town centre church, St John’s church, and Holy Trinity church in South Shore, accessible for community meetings and so on. As has rightly been said, this is the big society in action.

Blackpool also has a Salvation Army citadel. It does an immense amount of good work, not least with the homeless community. If it wants to make alterations to its buildings to expand the outreach services and community use it currently offers, it will, as a result of this proposal, face a whopping 20% extra in VAT on any building or alteration work. That is a recipe for stopping all that good work nationwide. As I indicated to the Prime Minister earlier, that is shooting the big society in the foot. It is absolute nonsense.

My right hon. Friend the Member for Exeter referred to the listed places of worship grant scheme. I deplore Ministers’ attempt to cloud the issue by saying that they have thrown £5 million into the pot for the grant scheme. Treasury Ministers and the Secretary of State for Culture, Olympics, Media and Sport are perfectly aware that that will not address the issue, in any shape or form, of the losses that will be made under this process.

[Sir Peter Bottomley (Worthing West) (Con)]

Would it be appropriate for the Minister to say whether the Government consulted the Churches’ Legislation Advisory Service and whether they were aware that the Churches were responsible for nearly half the grade I listed buildings that this proposal will affect?

[Mr Marsden]

It would be absolutely appropriate, not least because there seems to have been scant consultation with any of the Churches or other religious groups or places of worship on this issue. Perhaps the Government would like to start taking notice of the e-petition on this issue, which already has more than 16,000 signatures. Anne Sloman, chair of the Church Buildings Council, wrote to the Chancellor last week stating:

“a very large proportion of the alterations to these buildings…are concerned with making these buildings viable for use by the wider community by installing meeting rooms, lavatories and kitchens. This is the Big Society in action. The imposition of 20 percent VAT…means…most of it will simply stop.”

In conclusion, this is a nonsensical policy. At the end of holy week, the Prime Minister piously talked about the Church in action, but at the same time he let this howler through in a Budget that he claimed to have read line by line. I appeal to the Treasury Front-Bench team, if it is worth appealing to them on this matter, to take notice of what is being said across the Committee. They ought to do a little more line-by-line consideration of this proposal’s perverse effects if they want to dissuade people from the general judgment often passed—possibly very cynically—that some officials and others in the Treasury do indeed know the price of everything and the value of nothing.

Amendment of the Law

Peter Bottomley Excerpts

Thursday 22nd March 2012 Commons Chamber

[Sir Peter Bottomley (Worthing West) (Con)]

The House will appreciate that parts of the speech by the hon. Member for Ellesmere Port and Neston (Andrew Miller) were his own words and that others sounded a bit like a Whip’s handout. His birthday is to be welcomed.

I suggest to colleagues that it would be worth their while going through chapter 2 of the Red Book, because its 250 paragraphs contain all kinds of things, some of which are important and others of which are even more important.

As we all recognise, everything that we are discussing must be put in the context of the Government’s receipts and expenditure, which are shown on page 18. The attempt to close the gap between the two underlies everything that we are considering. Some of the matters in chapter 2 of the Red Book will not matter to many people, such as VAT being put on the rental of hairdressers’ chairs. Others have not been spotted by many, such as VAT relief being taken off alterations to listed buildings.

Anyone who has had dealings with English Heritage, as I have, will know that sometimes it is very helpful and that at other times it adds to the cost of what one is trying to do. If we have to take the VAT relief off alterations, perhaps we should consider giving VAT relief to the maintenance and repair of such buildings, or to a portion of those costs, because meeting the requirements of the listed buildings authorities can be expensive.

Paragraph 2.40 is on charitable giving. The Chancellor suggested that philanthropy in a person’s lifetime should be subject to a limit of 25% of their income in any year. I can imagine circumstances in which someone would have a very high income in one year, perhaps through the sale of an asset that is not protected by capital gains tax relief. If somebody gets £1 million over and above their normal income and wants to give away two thirds of it, what is the Chancellor thinking of in saying that they can give away only a quarter? It seems to me that we ought to have the same ability to give away our earnings as we have to give away our assets in death.

I ask the Chancellor, when he has his consultation with philanthropists, to ask a number of well-known philanthropists—without giving their names—how they would react to that. For people with established charitable funds, such as Dame Vivien Duffield, who gives fantastic support to charity, there is no problem, but there is a problem for people who, by chance, have a very high income for one year or a number of years and who want to give away a lot of money. That is a matter that the House should consider, but I would like to hear the Government’s response to a consultation before taking up the matter further.

I also have a question, not for answer immediately, about the lifetime limit on savings for self-invested pensions. The limit has come down from £1.8 million to £1.5 million. That does not affect me personally—not on my salary. However, somebody who has got to £1.6 million can now write in and say, “Please protect this amount.” What happens if the value of their investment goes up by 15% in the next five years? Or by 150%? Will they lose 55% of that increase? They have to take the risk that the amount of money might go down, but if it goes up, the Chancellor will say, “I will have more than half of that.” I may misunderstand the provision, and I am not saying that it was new in yesterday’s Budget, but it does matter and we ought to give it some consideration.

I welcome the provisions on employee ownership and the enterprise management initiative, some of which are really interesting.

I am not absolutely certain that I understand the gift aid and charitable giving provisions completely, but they are to be welcomed. Simplification matters, and the headline title in the Red Book is, “A fairer, more efficient and simpler tax system”. I should like to talk about that.

Some of the accusations that the Opposition have made about the so-called granny tax are exaggerated, and we have to realise that we need to get more people to have more provision for their old age. The Government are right to say that £140 should be the minimum pension level, but we need to apologise to people who did not have the chance to receive that. They often worked for much longer than the current qualifying period, but get lower pensions and are more likely to have to get means-tested support. It is unfair to them when we make things better for people in the future, and we have to apologise to those most affected.

I want to ask the Minister why we use the retail prices index for some things that people have to pay and the consumer prices index for some things that people receive. People can rightly go through the Government’s provisions and ask whether there is a philosophy to that or whether it is just what is now called fiscal consolidation, which means, “We’ll take all we can and pay out as little as we can.” That is a perfectly reasonable attitude for the Government to take, but would they like to say openly what the philosophy is?

I end by saying something about child benefit. I ran a campaign in the early 1970s to bring in family allowance for the first child, and I ran a campaign against Denis Healey when he said, “There’s no need to increase family allowance or child benefit—look at the married man’s tax allowance.” Half of that allowance went to people who had no children, and half of it went to people who had working spouses, so it was the least well directed way of supporting those caring for children.

Some of the arguments put forward over the past year, since we first heard about the proposal to cut child benefit for a certain number of people, have been grossly insulting. The idea that someone on £20,000 a year or less will support a person on £120,000 is nonsense. I saw one bit of paper suggesting that I could write to my constituents explaining why people with between £60,000 and £800,000 a year in earnings were being subsidised by the poor, but the difference between the taxation of someone earning £800,000 and someone earning £20,000 would pay for child benefit over and over again. The advantage of child benefit is that people register to get it when they are entitled, and stop getting it when their child ceases to be of eligible age. The amount of family formation, reformation and deformation, and the number of times people change or lose their jobs, will cause a lot of problems.

I say to the Government that whatever they get through this year against my wishes, they should not stick to this mistake. Amalgamating the value of the child tax allowance and the family allowance was right, and child benefit was the right way of doing it. It puts money in the purse more often than in the wallet. The Government are making a mistake, although less of a mistake than when the announcement was made a year ago. If they would like to have a serious debate about the matter, please count me in.

--- Later in debate ---

[Jack Dromey (Birmingham, Erdington) (Lab)]

Just about the only announcement that was not flagged up in advance of the Budget yesterday was the £3 billion granny tax grab, which means that those men and women in my constituency who built Birmingham and Britain, who are coming up to retirement next year, will face a cut in what they had hoped and planned for of £314.

There are many laughable examples from the historical lexicon of the politically disingenuous—for example, the spokesman in the dying days of the Nixon Administration who said at the height of Watergate that “all statements heretofore issued are now considered to be inoperative”—but to describe this granny tax grab as “simplification” takes some beating. There is one thing that the Business Secretary and I have in common: we are both follicly challenged. Neither of us detains hairdressers for too long. Following yesterday’s Budget announcement, the next time I go to Imad’s, the barbers on Slade road, I will ask for my hair not to be cut, but to be “simplified”.

Why has this happened? Quite simply, it is a granny tax grab to fund a £40,000 tax cut for 14,000 millionaires.

[Sir Peter Bottomley]

The Labour Government were in power for about 150 months. For fewer than two of those 150 months they had the 50p tax rate. Why?

[Jack Dromey]

I will contrast the record of our Government with the record of the hon. Gentleman’s Government, any time. After 13 years of a Labour Government, Britain was a stronger, fairer, better country. We have now been given a Bullingdon Budget whose first priority is millionaires, by a Cabinet who are oblivious to the consequences.