Finance (No. 3) Bill

Rebecca Pow Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[Mel Stride]

My hon. Friend is absolutely right; a large proportion of the tax cut that has been delivered is in the form of a significant increase in the personal allowance—that amount someone can earn before they pay any tax—and that of course has benefited the low paid very significantly and will continue to do so.

[Rebecca Pow (Taunton Deane) (Con)]

Will the Minister also confirm that this Government are raising the living wage—the national living wage—and that that really is giving people more money? Although that might be difficult for businesses, it is really beneficial for our constituents.

[Mel Stride]

My hon. Friend characteristically makes an important and insightful point. The national living wage, which this Government brought into being, was raised by 4.4% last year and will be raised by a full 4.9% in the coming year. That is well ahead of inflation, which is why in respect of net income those in the lower deciles of the income distribution have benefited disproportionately compared with those at the top end. I remind the House that the wealthiest 1% pay some 28% of all income tax that the Exchequer receives.

--- Later in debate ---

[Mel Stride]

What I mean by our environmental credentials in that area is that we are consulting, as the hon. Lady will know, on the amount of packaging that contains recyclable plastics. We see that not only as informing what we will subsequently do but as helping to change behaviour, much as the sugar levy changed behaviour in the sugar-based drinks sector. We have a very strong record in this area. We have already done a number of things in the public health area, and we will also make progress on the environment.

[Rebecca Pow]

On that point, I was pleased to see in the Budget that there is money for the planting of millions of trees. That will have a huge impact not only on ameliorating the effects of flooding and on health and wellbeing, but in terms of the carbon that those trees will take in, which will affect climate change.

[Mel Stride]

My hon. Friend is right to highlight that commitment, which will see 11 million trees planted as a direct consequence.

Our country faces the great challenge and opportunity of leaving the European Union. Some say that Brexit has been so all-consuming that we are not capable of seeing beyond it—that we are not able to lift our eyes to the future because we are too fixated with the challenges delivered by the past. However, Conservatives are better than that. On the eve of the D-day landings one of the greatest pieces of legislation passed by this House—Rab Butler’s Education Bill—received Royal Assent. Even war did not stop us then.

As we take our country forward to a world beyond austerity, beyond the toughest of times, beyond the sacrifices that have been endured and, indeed, beyond Brexit itself, our country will show that we are capable of not just enduring but thriving, and that no challenge is too great for us and no opportunity is beyond our reach. This Bill, following this Budget, sets us firmly on that path. I commend it to the House.

--- Later in debate ---

[Peter Dowd]

My hon. Friend, who is a great advocate for his constituency, is spot on. Some 4.5 million children—7,000 per constituency—are living in poverty in the UK. Conservative Members should concentrate on sorting out that kind of problem. That is what the Government should be focusing on.

[Rebecca Pow]

The hon. Gentleman just talked about spurious rhetoric, but I want to take him back to what he said about climate change, because he completely misses the point. The Government are doing more on climate change than any before them. A great deal of it is being done by the Department for Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs and the Foreign and Commonwealth Office—it is about joined-up thinking. We have the 25-year plan, the Agriculture Bill, the green growth strategy and the electric car strategy, and measures in the Budget draw this together. The plastics tax is one very good example of how seriously we take the issue.

[Peter Dowd]

Investment in renewables is down. The idea that the Government are green is itself green—it is a pathetic claim.

The Government promised us a public register of beneficial ownership. I have asked before: where is it? It is another broken promise. I call on the House to support the amendment to give the people of the United Kingdom action on the great challenges facing our nation, which the Government appear incapable of addressing and which have been ignored for too long.

I end on the note I started on: the abuse of power. It was once said that:

“Worse than a corrupt government is an incompetent one, not least because having the second characteristic does not exclude the first”.

Given the way the Government have behaved over the ability of Parliament to do its job, that notion is becoming closer and closer as the days progress. It should be deeply worrying to any democrat.

Folic Acid Fortification

Rebecca Pow Excerpts

Thursday 25th October 2018 Commons Chamber

[Nigel Adams]

My hon. Friend makes a perfectly plausible point from personal experience. Not everyone can see into the future and plan accordingly. A large number of pregnancies are unplanned, so I understand his point.

[Rebecca Pow (Taunton Deane) (Con)]

Will the Minister give way?

[Nigel Adams]

I will. I will get past my second paragraph at some point.

[Rebecca Pow]

When I was pregnant with my third child, I took folic acid supplements and ate lots of green vegetables, which contain folic acid. However, as colleagues have said, many people do not know that they are pregnant early enough to start doing that. Also, they might not have received the right advice from the medical profession. This consultation is important on those grounds, but will my hon. Friend also ensure that it is very wide ranging so that consideration can be given to all aspects, including the appropriate safeguarding of voluntary fortification by the food industry? Will consideration be given to coeliacs, who use gluten-free flour? This has to be a very comprehensive consultation if it is to be effective.

[Nigel Adams]

It does; my hon. Friend makes an incredibly important point. A number of foods already contain folic acid, and the consultation will have to take that into consideration. It will also look into what a safe upper limit is in that regard. This is why we want to ensure that the consultation is as thorough as possible.

[Nigel Adams]

I do not want to prejudge the outcome of the consultation, and I am sure that the hon. Lady would not expect me do so. It will have to take an upper limit into consideration; indeed, that will be an incredibly important part of the consultation. We want to ensure that the consultation is properly done, that it is thorough and that it can advise Ministers. We will be coming back to the House to report back on it.

I shall move on, if that is okay with colleagues. I think from the tone of the debate thus far that the announcement has been well received. We will be properly consulting on and considering all aspects of this very important issue. I note that many colleagues are well informed about it and that they are aware of the reason behind the calls for mandatory fortification, but it might be helpful to summarise again what we are trying to prevent. Neural tube defects are birth defects of the brain, spine or spinal cord. They happen in the first few weeks of pregnancy, often before a woman even knows that she is pregnant. The two most common neural tube defects are spina bifida and anencephaly. These are devastating conditions, and the Government are fully aware of their effect on the individuals themselves and their families. We have already heard the acute interest and strength of feeling on this issue from Members of this House and in the other place, including on what can be done to ensure that pregnant women have healthy pregnancies and give their unborn babies the best protection during the crucial early weeks of development.

Unless someone is pregnant or thinking of having a baby, they should be able to get all the folate they need by eating a varied and balanced diet. Existing pregnancy advice to women who are trying to conceive or who are likely to become pregnant is that they should take a daily supplement of 400 micrograms of folic acid until the 12th week of pregnancy. They are also advised to increase their daily intake of folate by eating more folate-rich foods, to which my hon. Friend the Member for Taunton Deane (Rebecca Pow) referred. Examples are spinach and broccoli, as well as foods voluntarily fortified with folic acid, including a wide range of breakfast cereals.

We know, however, that around half the pregnancies in the UK are unplanned. In those that are planned, it has been estimated that only half of all mothers took folic acid supplements or modified their diet to increase folate intake. This has led to calls for the mandatory fortification of flour with folic acid so that women can get it from dietary sources other than foods that naturally contain it. Successive Governments have not considered that mandatory fortification of flour with folic acid to be the best way to protect public health and have instead promoted the use of folic acid supplements as a part of a wide range of pre-conception and post-conception advice to women of childbearing age. However, we are now taking the opportunity that this consultation presents to seek the public’s opinion on this proposed important change.

My colleague the Minister with responsibility for public health responded to a Westminster Hall debate in May 2018 that was secured by the hon. Member for Pontypridd (Owen Smith), who has campaigned tirelessly on this issue. In his response, the Minister confirmed that the Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment—I shall refer to it as COT from now on—had agreed to take forward for further consideration the issue of tolerable upper limits for folate. COT published its interim conclusions in July 2018, but it has yet to finalise its detailed review. In summary, COT concluded that the potential masking of pernicious anaemia was still an appropriate and relevant endpoint on which to base a tolerable upper level, but that the level at which this effect started to occur was unclear. It concluded that further analysis of the data was necessary, but that the upper level would not decrease—that is, it would stay at 1 microgram a day or could be increased—as there was no convincing evidence that masking occurred at levels of intake below 1 microgram a day.

COT has discussed this again at this week’s meeting, and as soon as the outcome of its consideration becomes available, it will inform Ministers’ thinking in respect of the Scientific Advisory Committee on Nutrition’s recommendations on the mandatory fortification of flour and about folic acid advice generally. We will reflect that outcome in the consultation document, together with whether we need to take any other action, such as discussions with the industry on removing folic acid from products that are currently voluntarily fortified, such as breakfast cereal. We will also be working closely with colleagues in the Department for Environment, Food and Rural Affairs on the consultation, its responses and any resulting conclusions.

[Rebecca Pow]

It goes without saying that it would be worth examining the results of tackling anaemia by fortifying flour with iron and of tackling tooth decay by putting fluoride in toothpaste. Similar things have been influenced by approaches to general health, and we could learn great lessons from such examples.

Oral Answers to Questions

Rebecca Pow Excerpts

Tuesday 11th September 2018 Commons Chamber

[Mr Hammond]

Yes, thanks to this Government’s introduction of the national living wage.

[Rebecca Pow (Taunton Deane) (Con)]

14. What steps the Government are taking to ensure that the UK remains at the forefront of green finance.

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

Green finance is a key Government priority. The Chancellor recently announced the creation of a new green finance institute to ensure that our world-leading green finance expertise is available to UK and international firms. This was the first recommendation of the green finance taskforce, and further responses from the Government will come in due course.

[Rebecca Pow]

I commend my hon. Friend for the action that the Government have already taken in this area, but does he agree that we should encourage green investment to support new technologies, especially in the energy sector, to help develop devices that can bring down household bills, make us more efficient, waste less energy and cut down on our greenhouse emissions? That is the subject of my ten-minute rule Bill tomorrow.

[John Glen]

I agree with my hon. Friend. It is absolutely the case that every household and small business will have those advantages by 2020 through the supply of smart meters. According to data from a leading energy supplier, we are already seeing energy efficiency savings of around 4% on annual consumption.

Oral Answers to Questions

Rebecca Pow Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Mr Hammond]

No, and I should tell the hon. Lady that the proportion of people in absolute poverty is at a record low. Since 2010 there are 1 million fewer people in absolute low income; there are 300,000 fewer children in absolute low income and 200,000 fewer pensioners in absolute low income, and 881,000 fewer workless households. That is a great result and a great record, and we are proud of it.

[Rebecca Pow (Taunton Deane) (Con)]

3. What assessment he has made of the effect of the tax regime on the ability of the forestry sector to deliver value for money.

[The Financial Secretary to the Treasury (Mel Stride)]

The evidence from the Forestry Commission is that UK timber production is globally competitive. Our 25 year environment plan sees the Government committed to increasing timber supplies and to the greater use of home-grown timber within the UK construction sector.

[Rebecca Pow]

I fully support this Government’s ambition to plant more trees, but do the Minister and the Chancellor agree that any tax incentives towards this endeavour should include a requirement not only to own woodland, but to manage it as well, so that we have the right amount of timber to fuel the timber industry? Will the Minister agree to meet me to discuss this?

[Mel Stride]

My hon. Friend is absolutely right that forestry ownership and the management of woodland is extremely important. We keep all taxes under review—including some of the distortionary effects that taxes may have that I know she might be concerned about—and I am delighted to confirm that my right hon. Friend the Chancellor is looking forward to meeting her shortly.

Budget Resolutions

Rebecca Pow Excerpts

Thursday 23rd November 2017 Commons Chamber

[John McDonnell]

Debt under the hon. Gentleman’s Government has gone up by nearly £800 billion, and it is debt to pay for failure rather than to pay for investment. If we borrow to invest, we grow the economy, which means that we can put more people to work with more skills and higher wages. They pay more taxes and it pays for itself. That is the lesson that the Government still have not learned.

The Government appear, as is demonstrated today, to be completely out of touch with the mess that our economy is in. They have no understanding of the consequences of their choices for the lives of our people. They do not seem to grasp the scale of what is happening to our people out there. The Chancellor has tried to claim that income inequality has fallen, but he does not seem to be aware that more than a million food parcels have been handed out in this, the sixth richest economy on the planet. Inequality is not falling. He may well be aware that London is home to more billionaires than ever before, but does he know that there are more people homeless than ever? How can he claim that inequality is falling when that stark comparison is made? This Government’s decisions will make the poorest poorer still. Buried away in an annex, at the very back of the Treasury’s own distributional analysis, is the truth on this. The poorest fifth are being made poorer by the changes this Government is implementing. Those in the poorest fifth will lose almost £250 a year.

The House of Commons Library has confirmed that the burden of cuts—86%—made in tax and benefits measures since 2010 have fallen on women. Is that what equality is under this Government—86% of cuts on the shoulders of women?

[Rebecca Pow (Taunton Deane) (Con)]

rose—

[John McDonnell]

I will come back to the hon. Lady.

On housing, the Government’s proposed solution to the crisis is inept, and counterproductive. The stamp duty cut for first-time buyers will not bring forward the new homes that we need. No wonder the OBR expects only 3,500 additional sales to happen because of the change. It says that thanks to the price rises

“the main gainers from the policy are people who already own property.”

The problem is simple, but perhaps it needs explaining: you cannot solve a problem of housing supply by driving up housing demand. We are not the only people saying that. Conservatives Ministers reviewed a previous stamp duty reduction and said that the cut had

“not had a significant impact on improving affordability for first time buyers”.

Setting a target of 300,000 homes a year for the mid-2020s does little for a housing crisis today.

[Rebecca Pow]

rose—

[Jo Churchill (Bury St Edmunds) (Con)]

rose—

--- Later in debate ---

[Rebecca Pow]

I was going to intervene on a previous point. The people of Taunton Deane have more money in their pockets, which is what they want. We have put up the national living wage, cut income tax by raising the personal allowance, and, again, frozen fuel duty. People actually have thousands more in their pockets than they had under the Labour Government.

[John McDonnell]

I know that the hon. Lady is well intentioned, but she has displayed ignorance of what large numbers of people are experiencing. May I suggest this to her—[Interruption.] I do not wish to be patronising. [Interruption.] If that is the way it is interpreted, it is not how it is meant to be. I just say that all of us, who are on relatively high wages, need to be very careful when talking about levels of income and levels of wealth because many people, including 4 million of our children, are actually living in poverty. Two thirds of those children are living in households where someone is in work, which says something about low pay to me, as it should do to all of us.

--- Later in debate ---

[Sajid Javid]

The hon. Lady will know that we are currently consulting on how councils across the country, however they are led, should assess housing need. Once the proposals go forward, it will be clear that no council will be able to avoid building the houses it needs to.

In the areas where supply and demand are most badly mismatched, where most homes are unaffordable to most people, we will increase local authority housing revenue account borrowing caps by a total of £1 billion. That will allow ambitious councils to invest in new homes where they are most needed. We will bring together public and private capital to support the delivery of five new locally led garden towns in areas of high demand. We are committed to building up to 1 million new homes in the Oxford-Milton Keynes-Cambridge corridor by 2050, and we have agreed one of our first ambitious housing deals, with Oxfordshire, to deliver 100,000 homes by 2031.

[Rebecca Pow]

Taunton has been made a garden town, and I am very proud to be part of it. Will the Secretary of State confirm that as well as building more homes, we are going to build homes that people really want to live in? We are going to make good communities and good places to live, with the right infrastructure and all the facilities that people want. We are going to be the Government who bring housing into the 21st century.

[Sajid Javid]

My hon. Friend is absolutely right. It is not just about building homes; it is about building communities. That means, among other things, supplying the infrastructure that is required, and I will come on to that.

--- Later in debate ---

[Rebecca Pow (Taunton Deane) (Con)]

I am pleased to follow the hon. Member for West Bromwich West (Mr Bailey). I welcome the many positive announcements in the Budget, which demonstrate that the Government are listening, are in touch and are acting to make people’s lives better. Some of the announcements will certainly put money in the pockets of people in Taunton Deane and improve their lives, particularly increasing the personal allowance, freezing fuel duty and, judging by the number of texts and calls I have received, extending the railcard to 26 to 30-year-olds. The extension will please a lot of people, not least my 25-year-old daughter, who was wondering how on earth she would ever be able to come home again to visit us in Taunton because rail tickets are so expensive—the railcard extension has gone down exceptionally well.

I welcome the Government’s commitment to housing. In Taunton and Wellington we are already making a major contribution to meeting national targets. Yes, there is often opposition, but there is a demand for housing. I often meet constituents who are pleased to have gotten on the housing ladder by using Help to Buy to buy their first home. The more we can help people, the better.

I am proud to say that Taunton has garden town status, which attracts funding to set up a framework to develop the kind of housing and places to live that I believe people want. It is a great opportunity to develop sustainable, energy-efficient, environmentally friendly properties with sustainable drainage in settlements that have connectivity and green spaces where nature can live among the people. If we design such places, they will inevitably be more accepted.

It is essential that we have the right infrastructure in such housing developments, and I will give an example. A planning application has just been agreed for 1,600 houses in Staplegrove, but the application is controversial because it needs a small piece of road to go through the development. The developers say they cannot afford to put in the road and the 25% affordable housing as that makes the scheme unviable, so now they are committed to just 15% affordable housing. Luckily, help is on the horizon, because the council has applied for housing infrastructure fund money, which would enable the funds to come forward for this road to be built. I make no bones about the fact that I am very supportive of that. If that money was granted, we could build the road and build the school in advance, and everyone would be happy. I believe firmly that the Government are listening on this, because in the Budget we have put another £2.7 billion into the HIF for exactly these sorts of examples. If we can get these right, people will not be averse to the building of these houses that we so need.

Also on the housing front, I welcome the announcement that the Homes and Communities Agency is going to metamorphose into Homes England, as this will be a catalyst for bringing the right kind of housing forward and putting in money to help underwrite borrowing for developers to put in infrastructure and to work with local authorities on delivery. Before I leave the theme of housing, I would like to put in a bid to the Minister, if he is listening, for rural housing. I have met so many groups that actually want some houses in their villages; they do not want to be preserved in aspic, because if villages are to survive we need people to live in them. I ask the Minister to listen on that. I met the Blackdown Hills AONB Partnership recently and it raised this issue. We really need to pay attention, as this could help with our house building targets.

On education, I just want to praise the £20 million for the T-levels and the emphasis on maths. My maths teaching was terrible and I only hope that young people in future will have a much better maths education. This Government are putting the tools in place for that, as well as the digital skills training and the distance learning. Of course we can do distance learning only if the digital broadband and everything else is working properly, so I make a big bid for that, too.

I cannot end without mentioning the environment. It was music to my hears to hear the Chancellor say

“we cannot keep our promise to the next generation to build an economy fit for the future unless we ensure our planet has a future.”—[Official Report, 22 November 2017; Vol. 631, c. 1050.]

He has been listening, not only to “The Blue Planet” but to lots of colleagues in here who say that we cannot have an economy that works unless the environment is sustainable. So “Hear, hear” to that, to looking into a tax on single-use plastics and to the money for the clean air scheme.

Finally, on cider, may I make a plea to the Minister? I understand why we are going to put more duty on white cider, but please can we look at the position of traditional cider makers in my constituency, who may go out of business unless we can put a different definition in place for them? On that note, let me say cheers to this Budget and all the good things I think it is going to bring.

Tax Avoidance and Evasion

Rebecca Pow Excerpts

Tuesday 14th November 2017 Commons Chamber

[Dame Margaret Hodge]

I agree entirely with my hon. Friend. Indeed, I was about to say that those who pay their taxes are completely fed up. By 8 o’clock this morning, nearly 156,000 people had signed a petition going to the Prime Minister. This is an issue that angers people across the country, men and women, supporters of all political parties, people of all ages and people in every income group.

[Rebecca Pow (Taunton Deane) (Con)]

Obviously the right hon. Lady is making a very good point—everybody wants tax evasion clamped down on—but I, too, have some statistics. The Government have invested £1.8 billion in HMRC to tackle tax avoidance and reduced the tax gap by 2% more than Labour did. We are on the right track.

[Dame Margaret Hodge]

If the hon. Lady looks at the HMRC figure on the tax gap, which is about £34 billion to £36 billion, and then at the figure that tax campaigners talk about, which is a gap of £120 billion, I think she will share my determination to see much more action to deal with this ill in our society.

Paradise Papers

Rebecca Pow Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

I am not going to get into the business of providing moratoriums on any particular matter at the Dispatch Box, tempting though the hon. Lady’s suggestion may be. That is not a path I am going to go down.

[Rebecca Pow (Taunton Deane) (Con)]

I want to highlight the new criminal offence we have created for firms that do not stop their staff facilitating tax evasion. For the first time, under the Criminal Finances Act 2017, companies will be held criminally liable if they fail to stop their employees facilitating tax evasion. Does my right hon. Friend agree that this truly demonstrates that the Government take tax avoidance extremely seriously, and, indeed, have done more than our colleagues on the Opposition Benches have ever done?

[Mel Stride]

My hon. Friend is absolutely right. This is but one further example of making companies criminally responsible where their employees try to facilitate tax avoidance. That is the right way to go and is just another measure the Government have brought in.

Finance Bill

Rebecca Pow Excerpts

Tuesday 12th September 2017 Commons Chamber

[Mel Stride]

We are a party and Government who recognise that all parts of our economy are equally important in sharing the proceeds of growth. That is why we are investing through our national productivity fund—through the work we are doing on skills, the investment we are making in infrastructure and the northern powerhouse, and through all these approaches—to make sure that prosperity, living standards and household income are improved throughout the length and breadth of our country.

[Rebecca Pow (Taunton Deane) (Con)]

In my constituency, the backbone of business is small and medium-sized businesses. Does my right hon. Friend agree that this Government have put in place a raft of measures particularly to help them, and many are not paying any business rates at all, which is extremely helpful to them?

[Mel Stride]

My hon. Friend raises an important point on business rates, which are very important as one of the key components of costs for businesses. In 2016 we announced a £9 billion package to ensure that business rates were not too onerous for small businesses, and we have of course this year announced a further £400 million-plus to make sure that further funds are available to those who require it.

--- Later in debate ---

[Mr Harper]

First, I am clearly not going to get in the way of the sophisticated political alliance between the hon. Members for Walthamstow (Stella Creasy) and for Ilford North. On the EU, I was on the same side of the argument as the hon. Gentleman—I campaigned for remain—but I am also a democrat. The country made a different choice and everyone in the House needs to support the European Union (Withdrawal) Bill, as we did yesterday, to ensure that we have a smooth exit from the EU. However, that does not mean that we should stop co-operating with our international partners. Even when we have left the European Union, I want to work closely with colleagues in Europe on finance, security and trade matters. We can work well with our neighbours, and we can also work with our international partners outside the European Union. Indeed, if we are to deal with global multinationals, we will have to deal with the United States and other countries where those multinationals are headquartered if we are to make progress.

[Rebecca Pow]

My right hon. Friend is making a sound case, but would it not be right to suggest that it is even more important, in the light of Brexit, for us to be in total control of our finances at home and that we should draw in all the money that is owed to us in the best possible ways? That is going to be so important in keeping us productive.

[Mr Harper]

I agree with my hon. Friend. Indeed, that is why the Financial Secretary to the Treasury set out a number of important areas in the Bill that deal with those issues.

I want to pick up on an issue that, interestingly, has been referred to by a number of colleagues. My right hon. Friend the Member for Wokingham (John Redwood) touched on the question of public sector productivity, and the hon. Member for Aberdeen North, who speaks for the SNP, also alluded to productivity. I think the hon. Lady got it a little wrong, however, when she talked about improving productivity by giving people higher pay. It is actually the other way round. We all want our constituents to get a pay rise—I think that that unites everyone in the House—but the only sustainable way to drive up pay in the public and private sectors is to improve productivity in both sectors. I shall set out a few areas in which we could do that.

First, however, I want to make a slightly humorous point to the Financial Secretary to the Treasury. I do not want to see an increase in the productivity of the parliamentary draftsmen in Her Majesty’s Treasury. Producing Finance Bills as thick as this one is perhaps not what we ought to be doing. I understand the complexity of these matters—I declare an interest as a non-practising chartered accountant—but I know from talking to colleagues in the business that they do not enormously welcome Finance Bills this thick. Much as this might upset them, I have to say that creating jobs for tax accountants is also perhaps not something that we ought to be doing. Slimmer Finance Bills with simpler, less complex legislation introducing lower tax rates from which we collect more revenue are the way to go. If we were to do that, we would be doing everyone a service, and those in the tax business could perhaps find more productive things to do. This gentle chiding is perhaps directed less towards my right hon. Friend the Financial Secretary to the Treasury than towards officials in his Department.

Finance (No. 2) Bill

Rebecca Pow Excerpts

2nd reading: House of Commons
Tuesday 18th April 2017 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House declines to give the Finance (No. 2) Bill a Second Reading because it derives from the 2017 Budget which confirmed the continuation of austerity, it fails to provide the necessary stimulus to compensate for the economic impact of Brexit, it fails to address the inequity of VAT being charged on the Scottish Police Authority and the Scottish Fire and Rescue Service, it fails to provide concrete measures to support the oil and gas industry, it increases Insurance Premium Tax above the level of inflation, it increases duty on Scotch whisky, and it is a wholly inadequate response to the economic challenges being faced by Scotland and the UK.”

We oppose this Finance Bill—well, someone has to—not so much because of what it does but because of what it does not do. Let me take as an example the inequity of Scotland’s police and fire and rescue authorities paying VAT. It is a long-standing problem, and this Government could and should have taken the opportunity of this Finance Bill to rectify it, but they did not. In the Budget, there was at least a recognition of the problems faced by Scotland’s oil and gas sector, but no specific measures were announced—just another options paper, which was effectively announced last year. This Finance Bill should have been the opportunity to make concrete proposals for UK content and for oil exploration and decommissioning allowances to ensure that the sector continues to thrive, to flourish and to provide substantial tax yields for decades, but of course it does not. It does, however, put up the duty on Scotch whisky, and increase insurance premium tax again by 20%, which is way above the rate of inflation. Effectively, the Bill treats the Scotch whisky industry and the insurance sector as cash cows for the Treasury.

Having said that, we do welcome some of the measures in the Bill, particularly those that are intended to clamp down on tax avoidance and evasion. I welcome what the Minister said about restricting the use of past losses, disguised remuneration, the initial penalties for tax avoidance enablers, and the removal of the permanent non-dom status. However, it is hard to see how this Bill will assist in any substantial way to address the long-term UK challenge of improving productivity or even helping to make society a little less unequal, which is vital to unlocking our growth potential. That is particularly the case when one considers that alongside this Finance Bill are a set of welfare proposals that do not support inclusive growth but, rather, drive a coach and horses through it. They include the cut of £30 a week to employment and support allowance for claimants placed in the work-related activity group; a 55% cut in the rate of ESA for disabled people under the age of 25; the freezing of the lower disabled child element of universal credit; and the changes for full-time students who receive disability living allowance or personal independence payments who are now not treated as having limited capability for work and are therefore not entitled to universal credit until they have been assessed, which means that they face long delays without support.

I do not want to digress too far from the Bill, but delivering those cuts when disabled people and those on low to middle incomes are already facing a barrage of cuts from this Government is a disgrace. Moreover, those cuts not only fly in the face of the Tory party’s last manifesto commitment to help more disabled people into the workplace—something that is vital—but undermine the essential drive for real inclusive growth, which is vital if we are to grow the economy and maximise our potential.

[Rebecca Pow (Taunton Deane) (Con)]

I just want to point out that, under the Scotland Act 2016, we are devolving benefits worth £2.8 billion to the Scottish Parliament. That is almost a fifth of Scottish spending. It would be really interesting to hear what the hon. Gentleman thinks about that. Indeed, he could even welcome the fact that this Government have created such a strong economy that Scotland is able to have that much money gifted to it.

[Stewart Hosie]

I am sure that the Scottish people will be delighted to hear that the hon. Lady thinks that somehow they do not pay taxes and that they are dependent on the largesse of ladies like her to fund our welfare system. We have had a very small amount of welfare devolved. If she wants to make such a contribution, she can read out the rest of the Whips’ briefing note when she catches your eye later, Mr Deputy Speaker. [Interruption.] The Tories can groan all they like, but they have called a snap election, and on the same day we are debating the Finance Bill.

In this Bill, the Minister wishes to reduce the dividend nil rate from 2018-19 from £5,000 to £2,000. I will listen carefully in the next 10 days or so to what the Government say about that. Perhaps they can prove that only very wealthy people benefit from that allowance and that it may be a reasonable change. Equally, it may be the case that many small and start-up business owners depend on that money to tide them over and that the measure will be nothing more than a tax on enterprise—a disincentive to start a business, to create jobs and to power local economies.

I did find it slightly jarring when the Minister explained that wealthy people could put lots more money in individual savings accounts. That is fantastic news for people who are already wealthy: they can save tax free. Let us juxtapose that with a change to the dividend nil rate from a modest £5,000 down to £2,000, which might act as a disincentive to people who genuinely want to start a business, while allowing already wealthy people to save tax free. That might be the kind of error we would have seen under the old fiscal charter and its requirement to run a permanent surplus quickly, almost irrespective of the economic conditions. However, the new fiscal charter is more flexible than the last one, which should make such a measure unnecessary. The Government are still targeting a surplus early in the next Parliament. Let us see how early it is in the next, next Parliament.

Again, without digressing too far, the numbers and the timescale for even a modest surplus within four or five years look precarious. The forecasts for a current account surplus are tiny, not even reaching 1.5% of GDP. If there is any external shock or capital flight if sterling suffers further devaluation, which is quite likely if the Brexit negotiations go wrong—again, highly possible—the figures could fall apart very quickly indeed.

At its heart, this is a Finance Bill delivered with the pretence that the hard Tory Brexit is not happening. It sits in splendid isolation from reality. We cannot assess whether it will assist with the challenges that lie ahead. We cannot even assess properly what the consequences of the limited measures in it will be, because the Office for Budget Responsibility told us about Brexit at the Budget:

“There is no meaningful basis for predicting the precise end-point of the negotiations as the basis for our forecast.”

In short, this Finance Bill, like the 2017 Budget, is effectively based on a central assumption that pretends that Brexit does not exist. That is a ridiculous thing to do, given that article 50 has already been triggered.

--- Later in debate ---

[Mr Rees-Mogg]

I do apologise for a lack of humility. I shall try to do better in that regard. I am, however, flattered that the hon. Gentleman remembers my speeches from years ago. I admire his attention to the debates in this House. The point I was making then was that a deficit of £150 billion a year, or 10% or 11% of GDP, was completely unsustainable. It is now down to about £50 billion and about 3.5% or 4% of GDP. It is at a manageable level. That is the achievement of the previous Chancellor and the current Chancellor.

[Rebecca Pow]

Is not one of the fundamental reasons why the economy is in safe hands with those of us on the Conservative Benches that Conservatives have an understanding of the importance of business? My hon. Friend is still in business. Unless one understands how business works and what makes it tick, we cannot raise the revenues necessary to pay for what we need in this country.

[Mr Rees-Mogg]

My hon. Friend comes from Somerset and her parents are constituents of mine. For both those reasons, she is invariably right and on this occasion particularly so. There is no money tree. It has to come from the success of businesses. It is a matter of balance. The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) wishes to get away from that balance, but it had to be done at the right rate to ensure the least economic problems as taxes were raised and expenditure cut. That has been achieved.

--- Later in debate ---

[Rebecca Pow (Taunton Deane) (Con)]

There is much to welcome in this Finance Bill and I am very pleased to be taking part in this fascinating debate.

Contrary to the ill-informed comments of the hon. Member for Aberdeen North (Kirsty Blackman), this Bill provides the framework for making the UK one of the most competitive fiscal regimes for oil and gas in the world. I was going to intervene to make that point but decided to save it for my speech.

This Bill brings with it the specific tools we need to keep the economy soundly on track. It demonstrates that this Government have a clear understanding of what is needed to run the country, keeping it on a firm financial footing while enabling businesses to grow and thrive, as my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) said. It enables hard-working individuals and families to live within their means. It enables funds to be raised through our fair tax system to provide the necessary public services we all need. It enables us to have the vital funds to treat and to help those who are not so able to help themselves. That is always something essential that we, the Conservatives, should not and never will forget.

All this has been made possible in challenging times. I welcome the Chancellor’s announcement that we have just been able to allocate another £2 billion of additional funding for adult services, another £100 million to the NHS, and an additional £300 million to fund 16 to 19-year-olds in the new technical education system of T-levels. I applaud that because we absolutely have to skill up our young people to keep our economy strong and growing, but also, in this Brexit world, we need to be on top of our game to maintain and grow our global position.

I applaud the increase in the personal tax threshold to £11,500. This is often mentioned on the doorstep in Taunton Deane. People see it as a real bonus and a real benefit, and say thank you for it. Keeping corporation tax low generates more tax revenue, so that has to be applauded. Given the number of times that businesses collar me to mention this, I have definitely got the message, and certainly the Chancellor has.

I am not going to go on any more about the nitty-gritty of those aspects of the Bill because I want to turn to my own constituency. If the Government, with their solid plans for a strong economy, can get it right for Taunton Deane, they can get it right everywhere—and they are getting it right with their sound economic plan. Since I have been the MP for Taunton Deane, as I am absolutely delighted and honoured to be, it has attracted much more funding than ever before, especially for infrastructure. Traditionally, Taunton Deane, and indeed the rest of the south-west, has been completely underfunded under the Liberal Democrat regime that has held sway there, but this is changing, and I am delighted to be a part of that.

[Mrs Main]

Where are they?

[Rebecca Pow]

Indeed. Where are they, to speak up for themselves?

Having made a strong case with my Conservative local council, my Conservative county council, and the line-up of all the other Conservative MPs in Somerset, we have money coming forward to upgrade the A358 and create a super-expressway to the south-west. We have had £7 million for a smart motorway on the M5, £6 million for the Tone Way and the Creech Castle junction, and £4.6 million to upgrade Taunton rail station, which is the hub of the south-west and will welcome everyone to the south-west. This is absolutely phenomenal, and none of it would have been possible without a sound economy. It is helping to drive up productivity, which is much needed in the south-west, and it is working. It is creating jobs; indeed, unemployment has never been so low in Taunton Deane, at 3.6%. Get this right and everything works.

Finally, I will touch on an unusual area to mention in a finance debate, namely the environment. With a sound economy and appropriate funding, if we want to have healthy air, clean water, flood-resilient measures and wider catchment processes, and if we want to protect our special landscapes, including ancient trees and sites of special scientific interest, we need to fund farmers and landowners to manage the habitat appropriately for all of us. I say to the Chancellor that that will not happen without a thriving economy. If we want to encourage businesses not to use microbeads in their products, they need the time and money to invest in research, so they also need to be thriving. Indeed, if we want to encourage businesses to go along the lines of the circular economy, they need to invest to find the right way to do it. They might have to invest, but in the end it will pay dividends.

That all needs to be done within the positive framework of a sound economy. I applaud the steps that the Chancellor has taken. The right framework is in place, regardless of Brexit, so let us continue to build on it. Thank you, Madam Deputy Speaker, for including my name last on the list.

Equitable Life Policyholders: Compensation

Rebecca Pow Excerpts

Thursday 23rd March 2017 Commons Chamber

[Bob Blackman]

I believe that this is a debt of honour. I do not expect my hon. Friend the Economic Secretary to the Treasury to announce that he will open the Treasury chequebook and pay the full compensation today. I have sympathy with the suggestion that, because of the most recent decisions on national insurance, the Budget has not yet been brought into balance. As the motion states, however, I believe that in the long run, as the economy recovers, this debt of honour should be satisfied, and I think that there is a way to do so within the remit of the legislation and the capability of the Treasury.

[Rebecca Pow (Taunton Deane) (Con)]

My hon. Friend is making a very good case. I, too, have been contacted by many constituents about this issue. I understand the Government’s position, but the public finances are looking better than they were when this all hit and we have cut the deficit by two thirds. On behalf of my constituents, I urge the Government to continue to look at the matter to see whether they can help these very deserving people, and I am sure that he will support me.

[Bob Blackman]

As I have said, this is a debt of honour and the economy is recovering. In the long term, we should compensate in full all those who suffered, through no fault of their own. We are encouraging people from across the country to invest in savings for their retirement, so they need to know that the regulator and the Government will safeguard and look after their savings and make sure that they are not short-changed as the vulnerable people we are discussing have been.