Financial Assistance to Ukraine Bill

Richard Fuller Excerpts

Committee of the whole House
Wednesday 18th December 2024 Commons Chamber

[Darren Jones]

I welcome the hon. Gentleman’s encouragement, which I take in good faith. He will know that these matters are multilateral and subject to negotiation with other allies and G7 colleagues, but he will also know, as I am sure the whole House does, that we go into 2025 with a strength of resolve across those G7 countries to do all that we can to help Ukraine continue to mount its defence against the illegal invasion from Russia.

Any other payments beyond the extraordinary revenue acceleration loans to Ukraine or any other country that are unrelated to the ERA scheme are not covered by the provisions of the Bill; this money is in addition to other grants and payments that have been referred to in the House previously.

The clause contains provision for the UK to provide funding towards subsequent arrangements that are supplemental to, modify or replace the ERA. This provision allows for flexibility in the unlikely event that the scheme itself should significantly alter. It is not intended to be used without this change in circumstances.

Clause 2 simply sets out the short title of the Bill.

[Richard Fuller (North Bedfordshire) (Con)]

I thank the Minister for opening the debate. The Conservative Government were a vociferous advocate for mobilising Russia’s frozen sovereign assets to support Ukraine. We drove G7 and European partners to try to coalesce around the most ambitious solution possible to achieve that outcome. The announcement on 22 October marked progress on that journey and is a step in the right direction. We understand that the Government’s position is that the United Kingdom’s contribution should be earmarked for supporting Ukraine’s military expenditure, including on air defence, artillery and other equipment. The Opposition would support that. We need to persevere with our efforts to put Ukraine in the strongest possible position to counter Russia’s unprovoked and illegal invasion.

Matters since Second Reading have been fast moving, so let me pose some questions to the Minister. Since Second Reading, the United States has given Ukraine $20 billion, funded by the profits of frozen Russian assets. That economic support forms a significant part of the overall $50 billion package agreed by G7 member nations and announced in June. The US Treasury said that it had transferred the $20 billion to a World Bank fund, where it will be available for Ukraine to draw. Money handled by the World Bank cannot be used for military purposes.

The US Administration had initially hoped to dedicate half the money to military aid, but that would have required approval from Congress, which the President did not seek. Perhaps the Minister can update the House on what discussions the UK Government have had with the US Administration, Canada and the European Union about the use of funds provided for military purposes. Are any strings attached to the funds that will be provided by the UK? As the US has already provided its share of moneys anticipated in the G7 package, can the Minister advise the House on the timing of the UK’s contribution? I think it was made clear on Second Reading, but it would be helpful to have an update, given the move by the US since then.

As the Minister and the Government have advised, the loans that the UK will pay will form part of the extraordinary revenue acceleration loan agreement by the G7. The loans that the UK will provide will be repaid by the Ukraine loan co-operation mechanism, established by the European Union under regulation 2024/2773 on 24 October. The ability of the UK to have its loans repaid depends in large part on a decision by the European Union to maintain its freeze on Russian assets. The EU renews Russian sanctions every six months, and efforts to extend that to a three-year review cycle were rebuffed by Hungary earlier this year. Will the Minister confirm that there is a risk, in the event that the EU does not extend its sanctions on Russia, that the costs of the loan will be borne by UK taxpayers, and what mitigations he might consider if that situation arises?

Finally, the EU controls more than two thirds of Russia’s $300 billion of sovereign assets that have been frozen by western allies following Russia’s full-scale invasion of Ukraine. Of those EU-held frozen assets, 90% are held by the Belgian-based financial services company Euroclear. The profits from the EU-held assets, estimated to be between $2.6 billion and $3.2 billion per year, have been used to arm Ukraine and finance its post-war reconstruction. We understand that the EU’s top diplomat, Kaja Kallas, said in an interview with The Guardian on 12 December that the European Union should use the billions in frozen state assets to aid Ukraine. She emphasised that Ukraine had a legitimate claim for compensation, and described the Russian assets held in the EU as

“a tool to pressure Russia.”

The Minister responded to earlier interventions, but can he confirm the UK Government’s position? Has he discussed the matter with the EU and Belgium, and does he have any plans for the UK to go further on the use of those assets?

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I want to speak to new clause 1, which I have signed, but I first want to reiterate my support for the Government and the Bill. As I said on Second Reading, it is absolutely right and proper that Russia pays for the damage it has done to Ukraine and its people. The Bill is an important first step in providing that financial assistance from Russian assets to Ukraine. Echoing the comments from around the Chamber, we need to move with allies towards a position of seizing Russian assets, but it is a positive first step that we are using the proceeds of the interest on those assets to support Ukraine.

On Second Reading, I mentioned that

“Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars”.—[Official Report, 20 November 2024; Vol. 757, c. 312.]

I asked if the Government could disclose Russian assets held in the UK in the same way. New clause 1 goes a long way to providing that. It would ask the Government to lay a copy of a report before Parliament showing under the Act, as it will hopefully become,

“monies provided by the United Kingdom to Ukraine”

to the following level of disclosure:

“the United Kingdom’s share of the principal loan amount and interest accrued under the scheme”

and

“receipts of extraordinary profits from the Russian immobilised sovereign assets under the scheme.”

It would to an extent mirror what our close ally Canada has done. Although I do not expect to divide on new clause 1, I would appreciate it if the Minister would comment on how he will report progress to the House, disclose the level of Russian state assets that are here, and state how much of the interest accrued from those assets has been mobilised to support Ukraine in its war efforts.

--- Later in debate ---

[Richard Fuller]

On behalf of the official Opposition, I thank the Government for bringing forward the Bill and concluding its stages in this House before we break for Christmas. I also thank the Chief Secretary to the Treasury, the right hon. Member for Bristol North West (Darren Jones), for the way he has handled the discussions on the Bill at each stage, providing Members with all the information they need at any stage and in answer to all questions. He has done an exemplary job.

I note the uniformity of support across this House from Members, whichever party they represent. However, it goes deeper than that: since former Prime Minister Boris Johnson galvanised the west into defence of Ukraine, through former Prime Minister Liz Truss, to my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), and now, with our current Prime Minister, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), the United Kingdom Government have been determined in support of the people of Ukraine. It says something of the depth of support in this country for the people of Ukraine that if we swept away a large proportion of the Members of this House and replaced them with different representatives from across the country, the resolve in support for Ukraine would remain the same.

We must not give up our efforts. Since we started our debates, there have been further actions in Ukraine. I will quote the latest summary from the Institute for the Study of War, which demonstrates the urgent need for the support set out in the Bill that we are passing today:

“on December 14…Russian forces fielded more than 100 pieces of equipment in a recent assault in the Siversk direction and noted that there were 55 combat engagements in this direction on December 13—a significant increase in tempo in this area of the frontline.”

It goes on:

“The GUR reported that a contingent consisting of Russian and North Korean servicemen in Kursk Oblast lost 200 personnel as of December 14 and that Ukrainian drones swarmed a North Korean position, which is consistent with recent reports of North Korean forces engaging in attritional infantry assaults.”

Our support, the military support the United Kingdom provides under this measure, is desperately needed, but the need goes further. Since Russia’s invasion of Ukraine, an estimated 8 million Ukrainian citizens have been displaced and 6 million people have left the country as refugees, with many still unable to return. As hon. Members have said, over 200,000 Ukrainian citizens are living in the United Kingdom. Our thoughts and prayers are with them and their families. We should also note the work of British charities and non-governmental organisations, including the British Red Cross, which estimates that, with other Red Cross and Red Crescent societies around the world, assistance has been provided to over 18 million people in Ukraine.

As we take our break, many of us will be celebrating Christmas. I hope that the Christian message of peace and hope will resonate in the new year, and that all of us in western Europe and particularly in Ukraine can look forward to a peaceful future.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

Draft Double Taxation Relief and International Tax Enforcement (Ecuador) Order 2024

Richard Fuller Excerpts

Monday 9th December 2024 General Committees

[Richard Fuller (North Bedfordshire) (Con)]

I echo the Minister in saying it is a pleasure to serve on the Committee under your chairmanship, Mrs Harris.

The Minister will be pleased to know that it is not the intention of the official Opposition to divide the Committee on this tax treaty. However, I have a number of questions —he may be able to answer them today, but I am perfectly happy if he wants to reply in writing subsequently.

This treaty follows on from the agreement signed in Quito on 6 August this year. Can the Minister provide us with an update on the status of Ecuador’s ratification of this treaty? As I understand it, that will be subject to its National Assembly, but there are elections to the National Assembly coming up in March next year and the President only holds a majority through a coalition. I would be grateful for any update on the status and expected date of ratification.

I echo the Minister’s comments about the importance of stimulating exports and trade with Ecuador. We have very limited trade at the moment, and hopefully this agreement will help from the point of view of both imports and exports, and of direct investment.

The Minister mentioned that this agreement was based on the OECD model tax convention. That model, as hon. Members probably know, has been in place for 30 or 40 years—maybe even longer—and many tax treaties around the world are signed around these conventions. However, there is a slight deviation in part of this agreement. In paragraph 5.16 of the explanatory memorandum, relating to article 5 on permanent establishment, it says that the agreement

“has a wider scope than the OECD Model, reflecting Ecuador’s preference. In particular, it has a lower threshold of 183 days for a building site to give a PE. It also deems there to be a PE where services are provided by an enterprise in the other territory for more than 183 days in total in a 12-month period.”

As there is very little for the Committee to note that is different from the OECD model, I hope the Minister does not mind me asking about that one point I have highlighted.

Furthermore, Ecuador is, as best I know, not a member of the OECD, or certainly has not signed up to pillar 2, the agreement on global minimum taxation for multinational enterprises. Any implication in this tax treaty relating to Ecuador’s status on that question would be of interest, but again that is not a matter for us to divide the Committee on today.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Richard Fuller Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[Richard Fuller (North Bedfordshire) (Con)]

I beg to move,

That this House declines to give a Second Reading to the National Insurance Contributions (Secondary Class 1 Contributions) Bill because it breaks the manifesto commitment of the Labour Party not to increase National Insurance; and will lead to lower growth, lower wages for working people, fewer jobs and the closure of businesses.

Today we turn to the latest chapter in this Government’s book of economic incompetence, which is their choice to increase employers’ national insurance contributions—Labour’s job tax on workers across the UK. Today’s measures are the major reason that the public’s immediate reaction to the Budget was negative, with YouGov polling the day after the Budget showing that nearly twice as many people thought it would leave the UK worse off than thought it would be better off. When it came to judging each of the many measures in the Budget in turn, today’s proposal to increase national insurance was rated the second worst decision of all in the Budget, just behind hiking bus fares by 50%. Back in October, 47% of the public thought Labour’s job tax was the wrong thing to do, but as employers have spelled out the impact of Labour’s job tax, the public’s view has soured further. In polling last Monday, those saying that this measure is wrong have increased from 47% to 57%. The public know that the Labour Chancellor has got this choice wrong.

[Dr Luke Evans]

The shadow Minister is an astute man, and he has picked up on some of the indices of concern. One of those is the economic confidence index, which in October was -52. In November, it was -65. That is the second lowest figure on record since the pandemic in 2020. If we had an eminent economist running the Treasury, they would be able to see that this is a bad idea for businesses and the country.

[Richard Fuller]

Obviously it would be useful to have people with business experience in the Cabinet, if they are going to levy taxes on business. Sadly, the Government do not have that. My hon. Friend’s point about business confidence and the reaction from businesses goes to what the Minister was trying to say in his summing up about what the Conservative party would do. The way we raise more taxes is by enhancing business confidence, so that they invest, grow and make profits that can be taxed. This Budget has done precisely the opposite. Each and every day since the Budget, confidence in the financial competence of this Labour Government has been ebbing away. Less than one in four of the public now believe that this Government are handling the economy well.

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

The hon. Gentleman appears keen on polling. Can he talk us through the polling for Liz Truss and Kwasi Kwarteng’s Budget?

--- Later in debate ---

[Richard Fuller]

To be fair, my former colleague did not last quite as long as the lettuce, and the public made their judgment clear on that and many other issues at the general election. The hon. Gentleman’s point is fair, but it is not particularly relevant to the decisions he will be asked to vote on today. Hospices in his constituency will know how he votes. GPs in his constituency will know how he votes. Charities in his constituency will know how he votes. I will be interested to see whether he votes with his conscience or with the party line.

Less than one in four of the public now believe that the Government are handling the economy well. It is not just the public who have lost faith in the economic competence of His Majesty’s Treasury; it is the Prime Minister himself, who apparently on Thursday will ditch the ambition for the United Kingdom to be the fastest-growing economy in the G7, removing at a stroke one of the key planks of Labour’s economic plans. The Bill will add to that lack of faith in this Labour Government, because this measure to raise national insurance contributions directly contradicts Labour’s election promise not to increase taxes on working people.

In the election campaign, the Prime Minister, the Chancellor and the entire Labour Treasury team, including the Minister, repeated the phrase from their manifesto, which stated:

“Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”

Yet today, with the election behind them, increasing taxes on working people is exactly what Labour is proposing to do.

The shadow Minister is shaking his head.

[The Economic Secretary to the Treasury (Tulip Siddiq)]

You’re the shadow Minister.

[Richard Fuller]

I am terribly sorry—the Minister. He shakes his head and says that it is not true. Let me turn to one of his favourite independent economic groups, the Resolution Foundation, whose analyst James Smith said, “Even if it”—the employers national insurance change—

“doesn’t show up in pay packets from day one, it will eventually feed through to lower wages…This is definitely is a tax on working people, let’s be very clear about that.”

[Jonathan Davies (Mid Derbyshire) (Lab)]

It is a little wearisome to listen to the Opposition talk about taxes on working people. We have the highest income taxes since world war two because they did not increase the thresholds, and in 2011 VAT went up to 20%, which was a massive tax on working people. I would like to hear what the shadow Minister has to say about that.

[Richard Fuller]

The hon. Gentleman talks about the Conservative record. Shall I talk to him about our record on national insurance? In 2010, when Labour was last in office, it broke the economy and left a note saying that there was no money left. We did have to increase national insurance rates—but not by as much as is proposed today. Thereafter, we increased national insurance thresholds with inflation; these proposals do not do that. We introduced the employment allowance, which admittedly the Government are increasing. We then introduced national insurance reliefs for young workers. We increased national insurance income thresholds in 2022, 2023 and 2024. That is the Conservative record. We do not believe in the jobs tax: we do not think it helps growth, and we do not think that it will increase taxation.

[Sir Desmond Swayne]

rose—

[Richard Fuller]

I will make a bit more progress and then give way to my right hon. Friend.

If the Minister does not like the Resolution Foundation’s judgment on this tax, he should just listen to the Institute for Fiscal Studies, which said:

“Simple economic theory suggests that the incidence of employer NICs and employee NICs should be the same, at least in the long run. It is likely that the long-run incidence of both employer and employee NICs is predominantly on employees”.

The measures in the Bill represent by far the largest part of the tax grab in the October Budget. The Treasury Red Book assesses that these measures will raise £23.7 billion in the next financial year, rising to £25.7 billion, but the Minister knows that behavioural changes means that they will actually raise substantially less; the IFS estimates about £16 billion.

I note that in the Red Book there were three opportunities for this jobs tax to be referred to as “Delivering on our Promises”. There is:

“Delivering on our Promises—New Policy to Close the Tax Gap”,

“Delivering on our Promises—Collecting Tax That is Due”

and even the catch-all:

“Delivering on our Promises—Other Manifesto Tax Commitments”,

but the increase in national insurance contributions cannot be included in any of those, because Labour politicians hid their intentions from the British voters at the election.

[Paul Waugh (Rochdale) (Lab/Co-op)]

The hon. Gentleman refers to the history of the Tory party on national insurance. Can he tell us why he and his party voted for the health and social care levy, which put up national insurance for employees not so long ago?

[Richard Fuller]

That is a very odd question when the Minister himself has said that the objective today is to provide more money for the health service. I guess I will think about what the hon. Gentleman has asked.

[Clive Lewis]

Will the hon. Gentleman give way?

[Richard Fuller]

I will be very happy to give way, but I will make some progress first.

If we take the Government at their word that their intention is to raise funds for public services, this measure is an inefficient way to do so. Under the provisions of the 1992 Acts on social security provision, only a proportion of the moneys raised by this form of taxation will be allocated to public services; the vast majority is essentially hypothecated to the national insurance fund. Will the Minister tell us what proportion of the moneys raised by the Bill will actually be allocated to the national health service? Will he also advise us of why the Chancellor chose this particular tax, which, uniquely, will burden the economy with far more in taxes levied than will actually end up going to support public services?

Employers large and small across the United Kingdom have been pleading with the Government to reverse this measure, letting them know about the impact it will have on jobs and on wages; the particularly harsh impact it will have on female workers and on young people starting out in their careers; the vulnerability of our hard-pressed hospitality businesses and high street retailers; or the pre-Christmas pleas of our charities, hospices and GPs about the way their contribution to public services has been completely ignored. Has the Minister been listening to the voices of people who actually have experience of running a business, creating jobs or delivering public services, who are telling him about the negative impact the Bill will have on jobs and pay, and even on their own viability, or has he been turning a deaf ear?

[Dr Luke Evans]

Is it not the biggest slap in the face for people listening to this that when Labour uses “working people”, it cannot define that term? Pub landlords and people working in charities are by definition working people—they are of working age and earn a living—and they will now be hit by this tax, which will have such a detrimental impact on their livelihoods. Is that not a disgrace?

[Richard Fuller]

I have been listening to questions from Members who believe that this is “not a tax on working people” asking for exemptions from it. When we hear that these taxes are being levied on hospices, charities, GPs and small businesses, we cannot help but believe that Labour thinks that people work only when they work for the Government. The truth of the matter is that working people work in many institutions across the country—in small businesses, large businesses and in the third sector—as well as for the Government. This Government are taxing working people.

[Clive Lewis]

I think sometimes, listening to the Opposition, it is as if that money goes into a complete black hole. Those billions are not just going to go into public services like health, education and social housing; we are also putting that money into people’s pockets—into the pockets of nurses, doctors, engineers and builders—who will then spend their money in those businesses. It is called the multiplier effect. That money will go back into our economy, rebuild our public services, which the Conservatives destroyed, and go into the pockets of people through the economy. What’s not to like?

[Richard Fuller]

The hon. Gentleman asks, “What’s not to like?”, but just a few minutes ago he was saying what he did not like in the Bill. He said he wanted exemptions that the Minister was not prepared to give him; I think his dispute is not with me, but with his hon. Friends on the Front Bench.

The British Retail Consortium—another section of the economy—wrote to the Chancellor detailing the costs of the measures to retailers: £0.57 billion from the rate increase and £1.76 billion for the reduction in the national insurance contributions threshold. It spelled out the consequences:

“For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timetable. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level. This will impact high streets and customers right across the country.

[Ms Polly Billington (East Thanet) (Lab)]

I would just like the hon. Gentleman to apologise for the fact that all the things he has just outlined are the impact of his Government’s kamikaze Budget in 2022.

[Richard Fuller]

Since the hon. Lady is reviewing history, she should look at the Bank of England review by Bernanke, commissioned under the last Government, which looked at the impact on interest rates in the UK compared with other countries and included that period. She will see that the real impact of those changes on interest rates was no different from any other year. The UK stayed in exactly the same place every year. There is a difference between facts and reality and what the Labour party thinks is history.

[Ms Creasy]

Will the hon. Member give way?

[Richard Fuller]

No, I am drawing my speech to a close, because plenty of people wish to speak.

UKHospitality is also concerned. It estimates that our pubs, clubs, hotels and restaurants will have to stump up £1 billion more because of the Bill. It points out that for a typical staff member aged 21 or over earning the national living wage and working 38 hours a week, the jobs tax will increase by 53.9%, from £1,863 to £2,869. Does the Minister honestly think that that will not mean job cuts in the hospitality sector?

The Government claim to have shielded the public sector from the jobs tax, but the reality is murkier. Many of our GPs will have to stump up more money, and our hospices and charities will have to find more money. As we approach the Christmas season, will the Minister give some hope to our charities, voluntary groups, GPs and hospices, and say that they, too, will be exempt from Labour’s jobs tax?

The Labour party in government is stumbling badly. I know from my own experience that no amount of resets will inspire confidence, and certainly not when a Prime Minister is forced into a reset within five months of taking office. The Labour party in government is also getting a reputation for a series of cruel policies motivated by socialism based on hate. The removal of winter fuel payments for the elderly was cruel. The family farm tax, penalising British farmers who have toiled in our fields for generations, was cruel. Today’s jobs tax, attacking businesses, charities, GPs, hospices and employment opportunities and growth is cruel, too. I urge all Members of this House to support our amendment.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

A cornerstone of sound management is economic certainty, but this Government seem to specialise in creating economic uncertainty; most recently they did so by delaying the date for the critical multi-year spending review. It looks like the Chancellor does not have a grip on either her Cabinet colleagues’ spending plans or her own plans for public sector productivity. Which is it—or is it both?

[Rachel Reeves]

The hon. Gentleman talks about uncertainty, but he was a Minister in the Treasury under Liz Truss, when huge damage was done to families’ and businesses’ finances. Frankly, I will take no lessons from Conservative Members on how to run the economy. We have already done phase 1 of the spending review; phase 2 will begin shortly and be concluded next year, when we will make multi-year settlements on resource departmental expenditure limits and capital budgets for the next few years.

[Richard Fuller]

The Chancellor may find that in her job, she needs to listen and learn lessons. One of the many criticisms of the last Budget was that the Government fiddled the figures to borrow more money, and still left little headroom for if their forecast went wrong. Since the Budget, business confidence has collapsed, putting further pressure on that headroom. Does the Chancellor have a problem with balancing her books, and will she, like Oliver Twist, be coming back for more?

[Rachel Reeves]

The hon. Gentleman will know that there is more headroom in our Budget in October than was left by the previous Government. The lesson I have learned is that I will never play fast and loose with the public finances, as the Conservative party did, because when it did, interest rates went through the roof and inflation topped 11%, and families and businesses in our country are still paying the price for its disastrous economic management.

Financial Assistance to Ukraine Bill

Richard Fuller Excerpts

2nd reading
Wednesday 20th November 2024 Commons Chamber

[Richard Fuller (North Bedfordshire) (Con)]

Before I turn to the Bill, I just say that the Chief Secretary, in an earlier debate, kindly welcomed me to my new role, and I would like to reciprocate that welcome today. He and I have worked together as members of the Business and Trade Committee, which he chaired and of which I believe you were also a member, Madam Deputy Speaker. We had a shared desire to use Parliament to hold to account fearlessly, factually and, when needed, ferociously those who hold authority and power over our constituents. He now finds himself in such a position of authority and power, and I will hold him to account fearlessly, factually and, when needed, ferociously. However, today is not a day for ferocity.

We welcome this Bill. It is an important signal of the continuing commitment of the United Kingdom to the people of Ukraine, the defence of Europe and the achievement of peace through strength. We join the tributes to the people of Ukraine—the men and women who have had to leave behind their peaceful endeavours in order to stand shoulder to shoulder to defend their land and liberties. Today we are talking about financial contributions, but we should never forget that the greatest sacrifice is being made each and every day by members of the Ukraine military and civilians, upon whom Putin’s rockets rain down destruction each and every day.

Under the strong leadership of former Prime Minister Boris Johnson, the United Kingdom led the world in defending Ukraine, and since 2022 we have pledged more than £12 billion in overall support. We were often the first mover on vital lethal aid, from Storm Shadow missiles to Challenger and main battle tanks. We imposed the largest and most severe set of sanctions that Russia had ever seen, to cripple Putin’s war machine. We sanctioned around 2,000 individuals, companies and groups, and this economic pressure restricts Russia’s ability to prosecute its illegal invasion. More broadly, we built up a formidable sanctions regime during our time in office and brought in a major new sanctions strategy to deter and disrupt malign behaviour, and it is pleasing that the current Government are continuing those efforts.

On behalf of the United Kingdom, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak) hosted the Ukraine recovery conference last year, raising over $60 billion for Ukraine’s recovery and reconstruction. This Bill takes a further step forward in our commitments to Ukraine, and does so alongside our allies. It fulfils the United Kingdom’s part of June’s G7 mandate—confirmed by G7 finance Ministers in Washington last month—to disburse for the benefit of Ukraine approximately $50 billion from the extraordinary revenue acceleration loan, or ERA, as the Chief Secretary termed it. The United Kingdom’s share is £2.26 billion, and this is earmarked as budgetary support for Ukraine’s military spending. I understand that it will be in addition to the UK’s existing annual commitment of £3 billion of military aid. Each loan will be in the form of a bilateral loan, but will be based on common principles to ensure consistency and co-ordination between each loan.

We support the Bill and will support the Government if any other party seeks to divide this House, but I would be grateful if the Chief Secretary or the Minister could provide further clarification on several questions. The first is about disbursements to Ukraine under the extraordinary revenue acceleration loan. Point 5 in the annexe to the G7 statement says:

“Loans will be fully disbursed to the benefit of Ukraine between 1 December 2024 and 31 December 2027.”

The whole House will be aware of the current heightened levels of military activity and the urgent demands from Ukraine for assistance, including UK Storm Shadow missiles. What discussions has the Minister had with the Secretary of State for Defence about the timings and scale of distributions?

Secondly, I want to ask about the asset base. Can the Minister update the House on the total value of Russian assets seized by the G7, and on the total assets seized by UK jurisdictions? The last estimates we had were in March 2023, when the total was £48 billion, of which £18 billion was seized by UK jurisdictions. As the extraordinary revenue acceleration loan refers only to sovereign assets, will the Minister tell us what consideration was given to the inclusion of income streams from other seized Russian assets, and why it was determined that they should not be included? Do the commitments made by each G7 country relate to the amount of Russian assets seized or held by a jurisdiction, or are they done on some other basis? If so, what is the basis for those allocations? Can the Minister give some indication of the allocation of seized sovereign assets by type? As they are sovereign assets, I assume that many will be in the form of cash holdings, but there may be properties and other assets. It would be helpful for the House to have some understanding of the allocation of these assets by type.

Thirdly, I want to ask about the use of anticipated income streams from Russian assets to repay the loans. The Bill’s explanatory notes claim:

“The extraordinary profits on the immobilised Russian sovereign assets will then be divided between the G7 lenders in proportion to their contributions. This will happen as the extraordinary profits accrue, on a 6-monthly basis…in three tranches”.

I have three similar questions on this issue. Has there been any modelling of the future flows of anticipated income from seized Russian assets that will be used to repay the loans? Has the Treasury made an assessment of the expected period for their repayment? Can the Minister provide the House with a forecast or estimate for the anticipated revenues available for repayment in each of the tranches?

Fourthly, I want to ask about contingencies. There are five participants in the loan agreement: the UK, the USA, Canada, Japan and the EU. Can the Minister advise whether the terms of the agreement will still stand if one or more of the participants do not ratify it? In the event of a peace settlement, subsequent to disbursements being made, point 12 of the annexe to the ERA loan initiative says that

“the outstanding balances that cannot be covered by extraordinary profits shall be repaid by Ukraine to each lender.”

Can the Minister advise whether that is the case? In such circumstances, what priority will the repayment of these loans have compared with other loans made to Ukraine?

Finally, I want to ask about the Government’s overall defence expenditure. The Government’s Budget committed to setting out a pathway to increase defence spending to 2.5% of GDP at a future fiscal event. Since then, however, Labour Ministers have been unable to confirm whether it remains Labour’s ambition to meet that target by 2030. Can the Minister confirm whether it is still Labour policy to increase defence expenditure to 2.5% of GDP, when that might be reached and whether the commitments contained in this Bill will be included in such estimates?

The principles underlying the Bill are sound. Our commitment to the defence of Ukraine is reinforced. Our prayers are with the people of Ukraine and the cause of peace and freedom. We support the Bill.

--- Later in debate ---

[Richard Fuller]

I will respond briefly to the debate for the Opposition. First, I commend all the speakers, and particularly the hon. Member for Amber Valley (Linsey Farnsworth). It is rare for so many in this House to congratulate a Member on their maiden speech, but it was warranted because she spoke so nicely and kindly about her constituency, as well as with great generosity about her predecessor and very movingly about her father. She should take away the great support from all Members across the House, and we wish her the best of luck in her future here.

The Minister will be aware, having listened to the debate, of the comprehensive support for the Bill. She will have heard calls from some quarters to extend the provisions of the Bill to include seizing not only proceeds from the profits, but the assets. Such a move would be a very large step for the UK to take, and I do not think the official Opposition would support that without very strong convincing from the Government. But on all the other aspects, she will have seen the comprehensive support.

[Stephen Gethins]

On the seizure of assets and the $300 billion, we were trying to make the point that this needs to be explored very seriously. It would be transformative for the Ukrainian war effort and would therefore be transformative for our security. I take on board the hon. Gentleman’s point that this is not easy and about the impact that it might have. However, will he join me in encouraging the Treasury to look at this and come back to us with further details about the possible implications and how it might take this forward, so that we can all, as a House, examine it in greater detail?

[Richard Fuller]

I think I can assure the hon. Gentleman that the Treasury looks at these options on a continuing basis, but, consistently, the point of view held by the previous Government—and I would assume by the current Government—is that that is not the right step to take. But perhaps the Minister will update the House on her views on that in a moment.

Given the support, there was the opportunity for the Government to move forward with all stages of the Bill, so that it could proceed and be completed in this House today. Will the Minister say why that decision was not made and perhaps provide some sense of the timetable for when the Bill will be brought to the House for its concluding stages? But the Opposition’s general message is that we fully support the intentions of the Bill, and we will support it on Second Reading.

Independent Schools: VAT and Business Rates Exemptions

Richard Fuller Excerpts

Tuesday 8th October 2024 Westminster Hall

[Bradley Thomas]

I will not; I will make progress. Labour committed in the House of Commons in 2023 that armed forces families need not be concerned about proposals to charge VAT. With the current retention crisis in the armed forces, and the current volatile state of world affairs, the Government need to confirm what impact analysis has been carried out on the effect of taxing education on military personnel.

We then get into issues around the implementation of the policy. Implementation in January will put pressure on local authorities to find rare and academically disruptive in-year placements. Those will be difficult, as state schools will be full and many will be oversubscribed, with areas that have a high number of pupils attending independent schools having some of the busiest state schools.

[Richard Fuller (North Bedfordshire) (Con)]

My hon. Friend is speaking eloquently about the impact on children’s education, on children with special educational needs and on children being ripped out of their schools, perhaps in the year of their GCSEs or A-levels. This is obviously a debate about education. There are Members of Parliament in the Chamber from the Conservative party and the Liberal Democrats, as well as independent MPs and Members from Reform—

[Jim Shannon (Strangford) (DUP)]

And the DUP.

[Richard Fuller]

And the DUP.

[Jim Shannon]

I am always here, by the way.

[Richard Fuller]

It is not always about the hon. Member for Strangford (Jim Shannon). The Labour party has marshalled all but two of their MPs, one of whom hates the policy—I do not know what the other thinks.

Does my hon. Friend the Member for Bromsgrove (Bradley Thomas) think that it is shocking that not a single member of the Education ministerial team of the Labour Government has bothered to show up today, yet they continue to use the airwaves to spew out spiteful and divisive messages about this Labour policy? The Minister present, the hon. Member for Ealing North (James Murray), does not care about education; he cares about money—he is a Treasury Minister. He knows that the policy will not raise any money, but it is going to cost taxpayers.

[Bradley Thomas]

I agree wholeheartedly with my hon. Friend. The Government have shown the true intent of the policy over the weekend with the divisive, “us and them” mentality that was revealed on social media.

I call on the Government to pause and reconsider this education tax, with a view to abandoning it. It is unethical and will damage a British success story. It will not fulfil its stated aims. The policy will not raise significant money, but is being forced through at the expense of state and independent schoolchildren to further the Government’s divisive ideological agenda that so many in this House have recognised.

If the Government refuse to abandon the policy, there are some sensible and practical steps that they can take to minimise the impact that it will have on parents and children. First, delay the imposition of VAT until September and the start of the next academic year. There has been no proper impact assessment of these policies on state schools, SEND provision or faith schooling; a full consultation and impact assessment is needed before changes are announced. Secondly, assess how very small schools can be protected from VAT and tax changes. They are a vital community resource and charge much lower fees; that should be acknowledged. Thirdly, exempt service families on continuity of education allowance from VAT. Those who rely on independent education to serve our country should absolutely not be penalised. Furthermore, the Government should protect children currently applying for an education, health and care plan, as parents should not be penalised for the delays in the process.

I would like the Minister to provide clarity on the following points. Will the Government be issuing guidance for state schools on how to deal with applications from parents, to prevent parents from being asked to prove that they cannot afford to fund independent education? During the general election campaign, the right hon. Member for Islington South and Finsbury (Emily Thornberry) commented that state sector classes must increase and that they will just have to cope. What assessment have the Government done to determine whether state sector classes have the resources available?

When it comes to students transitioning from the independent to the state sector, what provision will there be to prevent disruption to their education in subjects that may not be taught at their new state schools? In the event of academic performance failures due to the disruption caused by transitioning between schools, will academic leniency be granted to students? I also seek clarity on what funding and support will be made available for students with special educational needs who are transitioning between the independent and state sectors.

I hope that the House will clearly appreciate that this short-sighted policy will hit hardest those in society who it claims to be supporting, that it will damage the wider education sector as a whole, and that it will worsen academic and social inequalities while being a net cost to society, the education sector and the British taxpayer.

The Economy

Richard Fuller Excerpts

Wednesday 22nd May 2024 Commons Chamber

[Bim Afolami]

I am afraid I disagree with the hon. Lady on points of fact. I have already set out so many statistics that show that things are significantly improving in the economy, and at a faster rate than that experienced by most of our competitors in Europe. I completely disagree with her assessment.

[Richard Fuller (North East Bedfordshire) (Con)]

The Minister was right to update the House on the positive progress that we are making with inflation; right to make the point that people are continuing to find economic difficulties, and that we need to stick with the Prime Minister’s plan; right to point out the terrible risks to the economy posed by the Labour party’s polices on labour markets and taxes; and right to say that there have been external factors, and that policies to tackle one-off external factors are different from one’s policies looking forward.

This Government have ended the period of quantitative easing, or printing money, and moved to quantitative tightening, or paying back money. The IMF’s report says that, by 2025, the balance sheet for the Bank of England should be settled. Will the Minister look at the longer-range forecasts that the Office for Budget Responsibility has put out, and see what flexibility they provide for the Government to cut taxes or increase expenditure?

[Bim Afolami]

I thank my hon. Friend for a characteristically thoughtful and informed question. I will indeed look at what he said about the Bank of England’s balance sheet being settled by 2025, and I will talk to him about that in due course.

Finance (No. 2) Bill

Richard Fuller Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Nigel Huddleston]

The right hon. Gentleman will be aware that, back in 2010, the tax-free allowance was, I think, £6,475. Actions taken by this Government since then have increased the tax-free allowance to more than £12,500, a significant real-terms increase, which means that take-home pay is higher than it otherwise would have been. When taken in combination with other measures, it is a really important move.

Furthermore, I am sure the right hon. Gentleman would not want to detract from the significant changes in national insurance, which have put money back into people’s pockets. We have eliminated by a third a whole category of taxation—national insurance—and that will help working people in this country as well.

[Richard Fuller (North East Bedfordshire) (Con)]

Just to reinforce this point about the increase in thresholds, the Minister says that it has been a significant real-terms increase, but it is actually a 21% increase, which is very significant indeed. My question is on the part of the HICBCs that were announced in the Budget but that he did not quite mention, which was the plan from 2025-26 to base the benefit on the household budget rather than the individual budget. Can he just reassure the House that His Majesty’s Revenue and Customs will be up to speed to be able to implement that part of what the Chancellor has outlined?

--- Later in debate ---

[James Murray (Ealing North) (Lab/Co-op)]

I am grateful for the chance to respond on behalf of the Opposition in this Second Reading debate.

The Finance Bill follows last month’s Budget, in which the record of the Conservatives’ time in office was laid bare. After 14 years, the Conservatives have shown what they can deliver for the British people: higher taxes, falling living standards and lower economic growth. The truth is that after 14 years, they are out of time, out of ideas and out of touch with reality. They are out of time because whatever they say or try to do now, it is too late to repair the damage that they have done to the economy and to people’s standard of living. The Conservatives may now have implemented a reduction in national insurance—a cut that we support—but that comes amid a tax burden that is set to rise to its highest level in 70 years, and to rise in each and every year of the forecast period. The Government simply cannot escape the reality that under their plans, for every £5 they are giving back to families, they will be taking £10 in higher taxes. Giving with one hand and taking twice as much with the other—that is the reality of life under the Conservatives.

The Government are not just out of time, but out of ideas. In the Budget from which this Finance Bill came, the Conservatives performed what may be the biggest U-turn of this Parliament yet, and there is some tough competition on that. After years and years of the Conservatives opposing tooth and nail our plan to scrap non-dom status, the Chancellor stood in this Chamber last month and adopted our approach as his own. I recall the Financial Secretary’s immediate predecessor, the right hon. Member for Louth and Horncastle (Victoria Atkins), being a particularly passionate defender of non-dom status. I remember her declaring less than a year ago, during the Committee stage of a previous Finance Bill, that

“We have come to the conclusion that non-domiciled status is right”.––[Official Report, Finance (No. 2) Public Bill Committee, 16 May 2023; c. 44.]

How times change!

Despite the Government’s apparent U-turn, we have learned since the Budget through our careful analysis of the Government’s plans that loopholes remain in their approach to abolishing non-dom tax status. Alongside an unnecessary discount in year 1, there is a loophole that appears to have been intentionally designed to allow non-doms to stash money away in offshore trusts, so that they can avoid being subject to inheritance tax, as any other member of the public is. Those loopholes must be closed, because if a person makes their home and does their business in Britain, they should pay their taxes here, too. People will look at those loopholes and rightly conclude that despite the Budget’s U-turn, this Prime Minister just cannot bring himself to sort out the non-dom problem once and for all.

[Richard Fuller]

If I may say so, the hon. Gentleman is clutching at straws. There may be a few hundred million pounds here or there in what the Government propose doing to tighten up supposed loopholes, but as he is aware, the Labour party wants £28 billion spent on its green investment. Which taxes will he raise to pay for that?

[James Murray]

I fear that the hon. Gentleman is slightly out of date. Going into the general election, we have set out very clearly our plan to invest in the transition that we need in our energy supply and our economy, and how we would pay for that—through a strengthened windfall tax, alongside prudent investment. He may scoff at what we say about the non-dom tax loopholes, but we are talking about £1 billion in the first year and £2.6 billion over the course of the next Parliament. That money should go to our public services, rather than intentional loopholes allowing some people to get away with paying hundreds of millions of pounds less in tax.

The Conservatives are not just out of ideas, but out of touch with reality. They made that very clear in last month’s Budget, from which this Finance Bill arose. At the end of his Budget speech, the Chancellor made an astonishing £46 billion unfunded commitment—leaving a gaping hole in the public finances—when he pledged to abolish national insurance altogether. Since then, Government Ministers have had countless opportunities to row back from or U-turn on that commitment, but they have been determined not to. Earlier today, the Prime Minister had three chances to rule out cuts to the NHS, cuts to the state pension or tax rises to pay for his £46 billion unfunded tax cut. Each time, he refused to do so.

--- Later in debate ---

[Richard Fuller (North East Bedfordshire) (Con)]

I wholeheartedly support the Bill. I have a couple of points to make to the Minister, and a couple of responses that the shadow Minister might be interested to hear. In response to the point made by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) on the loan charge, the Minister said that he was not minded to accept an amendment, but would always listen. I like the Minister. He will be aware that the loan charge has created significant concerns and problems for people. He will be aware that the loan charge policy has been in place for a long time and has not made the progress anticipated initially. May I say to him that it is time to draw a deadline on that policy and for HMRC to find a different way to provide resolution and, may I say, relief to those affected?

[Sammy Wilson]

Would the hon. Gentleman accept that the policy has not only failed to bring in the revenue that the Government intended, but led to a number of people committing suicide because of the pressure put on them by HMRC?

[Richard Fuller]

My right hon. Friend has voiced the concern that I know will rest on the conscience of my hon. Friend the Minister, and he is right to add that. May I put a second conscientious point to the Minister—this point was also made by the shadow Minister, the hon. Member for Ealing North (James Murray)—which relates to the scoring for contaminated blood? That was not included in the Budget, which will have disappointed a considerable number of Members of Parliament from all parts of the House. It would be helpful if the Chancellor came forward with some view on that. Will my hon. Friend look at that?

Thirdly, will the Minister be encouraged by the words of my right hon. Friend the Member for Wokingham (John Redwood) and his analysis of the charges imposed on the Treasury by the Bank of England as a result of the quantitative tightening policies? The UK’s policies on quantitative tightening are exceptional. Few other central banks—many of which indulged in the bizarre quantitative easing policy 15 years ago, after the financial crash under the last Labour Government—do it, and it is now a real charge that has real effects on the real economy in the country. The exceptional way in which we are treating quantitative tightening charges—essentially, we take them on the books, the Treasury gets charged for it, and it has to go into the scoring that the OBR and others do—does not go on in other European countries. There is discretion on how it can be put across, and in the US the charges are absorbed but the Government are not charged. That is an important policy point, and I would be interested to hear whether the Minister would accept an amendment on that in Committee, although I think not.

Prosaically, or simply, HMRC has been in the headlines for not answering phone calls and for saying it would go on holiday. I am pleased that the Minister reversed that straightaway, and I know many taxpayers will be pleased about that. Many who will be looking to fill in their self-assessment forms will be surprised that they cannot download form SA100—they have to call HMRC to download a copy, whether or not they want to file it by paper. That seems a little odd, if HMRC’s phonelines are under pressure. Will the Minister, who has been responsive on points to date, look into that?

I will turn to the shadow Minister’s speech—I like him too. As he in his own mind “prepares for government”, he and his colleagues may wish to get a better grasp on reality. When he rightly talks about the importance of setting clarity for investment, it is important that those looking at investment think that those in charge of the public finances know what is going on. He talked about record tax rises under this Government. Let me ask him these questions. Did he disagree with funding of the furlough programmes? Did he disagree with the energy price support? Did he disagree with the increase in funding for the NHS? Did he disagree with record numbers of police officers? If he did not disagree with any of those, he would recognise, if he had a grasp on reality, that he would have to fund those through increased taxation or increased—[Interruption.] He has an answer, so would he like to come in? [Interruption.] Mr Deputy Speaker, I thought he had an answer.

[James Murray]

The hon. Gentleman is asking me what I disagree with. I disagree with the low growth that has been true of this Government. I disagree with billions of pounds being wasted in covid fraud and in other ways by the Government. I disagree with how the Government are now overseeing the highest tax burden in 70 years and have no plan to get the economy growing. That is what I disagree with.

[Richard Fuller]

The hon. Member mentioned growth rates, fraud and the record tax burden. I was making a point about the record tax burden, and he cannot respond to that challenge by repeating that he is concerned about it. He talked about low growth—he should go to Germany or France, which have lower growth than the UK. He should go to the majority of G7 countries, where he will find lower growth than in the UK. He is mistaking—[Interruption.] Would he like to intervene again? No.

I am trying to be helpful, obviously. The hon. Member and the shadow Treasury team wish to be taken seriously, but he will know that the points about growth are difficult to work through, with western economies not growing as fast as they have done. The UK is growing faster on average than other countries, and he needs to give some credit for that rather than just say that low growth is the case.

More importantly, if the hon. Member and the Labour party believe in furlough, the energy price schemes, the record increase in NHS funding and more police—they supported most of those programmes—they must recognise that those must be paid for in government, and that means hard choices. What the Prime Minister and the Chancellor have done is make those hard choices. Making people feel bad about historical hard choices is not a policy for a future Government.

[James Murray]

We seem to be engaging in an unexpected back-and-forth. The hon. Gentleman did not mention covid fraud. As he might know, we have set out our plans for a covid corruption commissioner. Would he support that—yes or no?

[Richard Fuller]

Of course, everyone supports cracking down on fraud, and I would be very happy—[Interruption.] If I may, I would be happy to look at the Labour party’s specific proposals. But the hon. Member will also know that when the Labour party talks about fraud, particularly when it comes to personal protective equipment and the furlough programmes, it conflates two things. For example, with the coronavirus loan programmes, Labour is conflating moneys that have not repaid because businesses have gone bust, or because companies have not paid them back yet, with moneys that have been lost fraudulently. When I look at his proposals, I want to ensure that when Labour talks about the amounts that have been lost, they relate to actual examples of fraud and not to the ways in which, in a difficult situation where people’s businesses could have been closed, money was given out by the Treasury to others. If that is the case, I am happy to look at that.

My second point to the Opposition—before I get on to what I want to say—is that I hold no torch for the former Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), but when the hon. Member and his colleagues talk about crashing the economy and about people’s mortgage rates, as I think the Leader of the Opposition did at Prime Minister’s questions, may I gently urge them to look at the Bernanke review that has just been completed on Bank of England forecasting? That has a number of important points about how the Bank of England could improve its forecasting. It also compares interest rates for the seven central banks that Ben Bernanke, the former head of the US Federal Reserve, has used as his comparators—in figure 12 in the report. If the hon. Member looks at that, he will see that UK interest rates in 2019 were in the middle of the pack, UK interest rates in 2020 were in the middle of the pack, UK interest rates in 2021 were in the middle of the pack, UK interest rates in 2022 were in the middle of the pack and UK interest rates in 2023 were in the middle of the pack. UK interest rates as we enter 2024 are in the middle of the pack. It is simply not true to say that something exceptional happened to UK interest rates in any part of this Parliament. Again, if the hon. Member wishes to be taken seriously in government, he needs to get a grip on reality, not on fantasy.

I will now turn, if I may, to the things that I would like to say. [Laughter.] I did promise the Whips that I would take only 10 minutes, so I promise to take only 10 minutes, from now. Clause 12 sets the corporation tax rate. I see my friend the hon. Member for Mid Bedfordshire (Alistair Strathern) in his place on the Opposition Benches. I think that both he and I are pleased that Government and Opposition Front-Bench Members have made clear their commitments for full expensing. That is particularly important to the people of Bedfordshire because there is a potential investment pending in his constituency. I would like to put on record our thanks to the two Front-Bench teams for setting out the clear future framework for how that will work.

Let me turn to income tax rates in clause 2, because it is important to look at the history. As my hon. Friend the Minister mentioned, the record of successive Conservative Governments from 2010 for working people in this country is strong. He mentioned the increase in the personal allowance from £6,475 in 2010 to £12,570 this financial year. That is a 21% real increase. However, my hon. Friend did not mention the change in the minimum wage, which has gone up from £5.80 in 2010 to the living wage now of £11.44. That is a 23% real increase in wages. Higher wages for working people and lower taxes for those on lowest incomes is a very strong record.

However, my hon. Friend needs to look at the higher rate threshold, because in 2010 it was £37,400, and now it is £37,700. In today’s money, the 2010 amount would be set at £59,800. In essence, there has been a 37% decrease in earnings when people hit the higher threshold. It may not be popular politically, but economically such a substantial differentiation in the way we tax people on middle and high incomes from those on low incomes has long-term implications. After the Budget, people who have retired, have been thrifty and saved money and have a private pension now find themselves complaining that, although they are getting their increase in the basic pension—or maybe not—they are being dragged into the higher rate of taxation. Successive Conservative Governments have rewarded work—they have wanted people to work hard, be entrepreneurial, and grow their businesses and the economy—so please, can we look at the ways in which that particular threshold should change?

Quite rightly, the Prime Minister and the Chancellor have indicated that they wish to simplify taxation on working people. That is completely consistent with the long-run approach of the Conservatives to taxation on work. The aspiration to reduce national insurance is an excellent way of looking at that. Unlike the Opposition, I would say that there is a difficulty in politics of finding times to make quite significant changes. This may be such a time—I know that Ministers will be looking at this—partially because we have quite significant issues of overall taxation that we need to reduce, but there is the opportunity for other reasons as well. Reallocation of existing taxes is easier when the tax burden is exceptionally high. I am a low-tax Conservative. I recognise, unlike some, that when we buy things, we have to pay taxes on them. But we know that this tax rate is unusually high, and we know that we will reduce that tax burden. It is a propitious time to look at ways of reducing national insurance contributions over the next five years.

The Budget forecasts fiscal drag to be £28 billion to £33 billion per annum for the next three or four years. There is an ethical and moral case for wanting to give back more money to people by reducing national insurance contributions. However, my proposal is for the Government to consider not that national insurance reductions should go directly into pay packets, but that national insurance contributions should be added to people’s long-term savings through compulsory savings schemes. Many countries have recognised that the idea of state pensions being based upon the “never, never” is not a secure way to provide for long-term pensions. We have never really grasped the nettle in this country—Singapore did it right at the start and Australia did it in the 1990s. There is an opportunity for us to build on the work that Sir Stephen Webb did in the coalition Government through changes to national insurance contributions. That would ensure that working people are the first generation to have a truly secure pension that is their money, where they do not have to rely on the vagaries of what a particular Chancellor of the day might do to pensions, and they would have only one tax on their wages during their career. Finagling people in other parties like to increase taxes, and having two taxes to increase gives them more flexibility. An opportunity would be provided to extend the savings stake—the way that people save for things—beyond providing for their retirement, so that they could, as they do in Singapore, put money into their first home. By looking in a new way at how we treat citizens in this country, we could move towards a savings state and away from a socialist never-never state. I leave my hon. Friend the Minister to consider those comments.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 19th March 2024 Commons Chamber

[Jeremy Hunt]

That is absolutely what we are trying to do. Film and TV is a good example here, as it has now become an offshoot of the technology industry. Films such as “Barbie” have been filmed in Hertfordshire but have the look of the Californian sunshine; they can withstand the British rain because of the use of high-tech devices that simulate Californian sunshine, even in my right hon. and learned Friend’s constituency. What he sets out is our absolutely our plan and we will stick with it.

[Richard Fuller (North East Bedfordshire) (Con)]

In response to covid, this Government introduced the furlough scheme, and delivered and funded the world’s first vaccine. In response to the energy price spike, this Government introduced comprehensive support for families. The Office for Budget Responsibility, so beloved of the shadow Chancellor, had its long-range forecast for 2025 to 2028 showing GDP increasing every year, GDP per capita increasing every year, average earnings increasing every year in real terms and productivity increasing in real terms. So does the Chancellor agree that when the shadow Chancellor says that we face a 1979 moment, she is right: a choice between a Labour party still in hock to its union bosses and a Conservative party committed to growth?

[Jeremy Hunt]

I have nothing to add to my hon. Friend’s brilliant list of statistics, except to cite another independent organisation, the International Monetary Fund, which says that in the next five years this country, under Conservative leadership, will grow faster than France, Germany, Italy and Japan.

National Insurance Contributions (Reduction in Rates) (No.2) Bill

Richard Fuller Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[Gareth Davies]

My hon. Friend is right to point that out. I would add to those figures: since 2010, we have lifted millions of people across the country, including in Southend West, out of paying any tax at all by doubling the point at which people start paying tax in our country. People can now earn £1,000 a month without paying any tax, and that is a great achievement of a Conservative Government.

Although I welcome the fact that Labour Members will apparently vote for our tax cuts today, I hope that they will forgive me for sounding slightly sceptical about their sudden conversion to the cause of lower taxes for working people. While they do not oppose the measures, they also did not propose them. In fact, Labour has consistently voted against successive Conservative-led tax cuts between 2010 and 2021, which delivered a doubling of the personal allowance, as I mentioned to my hon. Friend the Member for Southend West (Anna Firth). On the one hand, they bemoan the level of taxation, but cannot tell us a single tax that they propose to cut, or what the level of taxation would be under Labour. On the other hand, the shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), described our ambitions to remove unfairness in the tax system as “morally abhorrent”. Labour Members still cannot tell us how they will pay for their many spending commitments. They are completely all over the place. It is only the Conservatives who truly believe in reducing taxes on working people.

[Richard Fuller (North East Bedfordshire) (Con)]

The Minister is giving a clear explanation of why the Conservatives want to cut tax, and the economic benefits of cutting taxes for working people. He will know that the origins of national insurance were basically a form of social insurance: having paid national insurance, it would look after us later in life. The Labour party took the insurance out and put the socialism in, which is why we have ended up with a system that is essentially the same as income tax. As we think beyond today’s welcome cuts to what is in the Opposition new clause, has the Minister thought about using any further cuts to go into the compulsory savings of individuals introduced under the coalition Government after 2010—essentially building, in place of a dependency state, a savings state built on Conservative principles?

[Gareth Davies]

Yet again my hon. Friend makes a valuable contribution. I commit to taking his idea away to consider, as we look at reducing the unfairness in the tax system in future and reducing national insurance contributions when it is prudent and responsible to do so.

The Labour party is completely all over the place on this. As a Conservative Government, we have delivered a clear message to the British people, and it is based on the delivery of the lowest personal taxation level since 1975. We have almost doubled the personal allowance, bringing the lowest earners out of paying any tax at all, and we have delivered a thriving jobs market, which is ultimately the best way to ensure that people are brought out of poverty.

--- Later in debate ---

[John Redwood]

No, I do not think that is the main point. I think the two main points are the ones I have made—the covid lockdown and the tax regime affecting the ability to set oneself up. I will meet the hon. Member a little of the way, because I do think that the 2021 reforms in particular put companies off dealing with the self-employed, and the self-employed often need business from other companies, as well as directly from the public, and that has been a problem. If he and his party are seriously interested, they should look at the 2017 and 2021 reforms, which I think they supported, to understand how they have backfired. That is a good example of the OBR and the Treasury thinking that they can get more money out of the self-employed by forcing more of them to be employed but ending up with a far less successful economy with far fewer people working.

[Richard Fuller]

It is an absolute pleasure to listen to my right hon. Friend. I want to reinforce his point about IR35 so that our colleagues on the Government Front Bench are clear about how important this is. He talked about how Labour in the past supported those measures, but does he share my concern that perhaps Labour has now recognised that those changes to IR35 have backfired and that it would be disastrous for the Conservative party to go into the next election not having made those changes while the Labour party is offering to do so?

[John Redwood]

I will not join my hon. Friend in suggesting that it could be disastrous to go into the election—I hope that, when we get to the election, it will be looking rather better. But I do agree that it would be great to have sorted out the IR35 taxation mess before we get to the election—after all, there could still be many months of happy Conservative Government ahead if that is the Government’s wish—as that would be a much better outcome. Failing that, it would be good to put it in the manifesto, but the self-employed would be quite right to say to the Conservatives, “If you have now got to the point of putting it in the manifesto because you think it needs changing, why didn’t you just fix it?”