UK Infrastructure Bank Bill [Lords]

Richard Fuller Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[John Glen]

I will not be able to comment on specific investments. As I said, a series of investments have been made in the last 12 months, and I would be happy to correspond with my right hon. Friend and put him in touch with the bank so that the logic behind that decision can be explored with him.

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

May I broaden out the question the Chief Secretary has just answered? Can he explain the oversight of the bank? There will be a report after a certain number of years, but will it be regulatory oversight, oversight by Parliament or oversight by the Treasury?

[John Glen]

I am grateful to my hon. Friend for the work that he did in the Treasury in recent months as my successor as Economic Secretary.

The board of the bank has been filled over the summer so that the right expertise has come in to oversee the investments and metrics for success. They will be accountable through normal processes and accountable to Parliament. Indeed, the chairman and chief executive of the bank have made themselves available to Parliament through the process of this legislation, and I attended meetings with them earlier this year with Members of the House of Lords. I know that they are willing to be scrutinised on the logic of their evolving processes and remit so that they can capture the wisdom of this House and the other place.

With regard to the climate change objectives, significant public and private investment will be needed to achieve the UK’s infrastructure policy goals, and low-carbon investment will need to be significantly scaled up to deliver net zero. That is highlighted by the fact that the UK’s core infrastructure—power, heat and transport networks—account for more than two thirds of UK emissions. Without the bank, the private sector is likely to focus its investment on lower-risk technologies and sectors, and we will not achieve regional and local economic growth without better infrastructure in every region of the country.

Disparity in infrastructure across the country has been identified as a key driver of economic inequalities, and central to the Government’s ambitions to level up is setting up new institutions boosting productivity, pay, jobs and living standards. The bank will help to grow the private sector and support it to deliver opportunities in parts of the country where they are lacking. Without intervention, the private sector is likely to continue to target geographic areas that have historically received higher levels of private capital. Targeted advice, support and challenge from the bank can help raise ambition and boost the capability of regional and local government as they tackle complex infrastructure projects.

Finally, the NIC recommended that the bank be set up in 2021. As I have already mentioned, the bank has been operational since last summer and has £22 billion of capacity. The bank is also operating across the UK and has already invested in each of our four nations. I am pleased that each Government have supported the bank, and discussions for a legislative consent motion are progressing well.

In that context, I come to the provisions of the Bill. It will complete the setting up of the bank as an operationally independent institution. It is a short Bill of 11 clauses, broadly split across three areas. First, the Bill enshrines the bank’s objectives and activities in legislation to provide clarity for the bank and the market on the bank’s long-term purpose. That is covered in clause 2, which includes the bank’s core objectives; its activities, including providing finance for the private sector and public authorities; and a definition of infrastructure.

The definition of infrastructure is inclusive and based on existing definitions in the Infrastructure (Financial Assistance) Act 2012 and the United Kingdom Internal Market Act 2020. Crucially, given the bank’s scope, we have focused the definition on economic infrastructure. As a result of the Bill’s passage through the Lords, we included energy efficiency in the definition to clearly signal policy intent. I am sure that we will discuss that further in this debate and in Committee.

I highlight that we have taken a power to amend the activities and definition of infrastructure to allow the bank to keep pace with an innovative market. We have not, however, taken the same power to amend the bank’s objectives. That is vital in providing clarity to the market and to ensure that the bank is not fundamentally changed without further primary legislation.

Secondly, the Bill will allow the bank to provide financial assistance to the private and public sector including, crucially, giving the bank the power to lend directly to local authorities in Great Britain and to the Northern Ireland Executive. That is covered under the bank’s activities in clause 2 and further defined in clause 10 and clause 5, which allows the Treasury to put the bank into funds.

It is important to note that the bank will be able to lend directly to each UK nation, including their local authorities. In the case of Northern Ireland, we have designed the bank to be able to lend directly to local authorities and the Northern Ireland Executive. That accounts for the fact that the Northern Ireland Executive hold responsibility for most capital infrastructure projects that would be the responsibility of local authorities in the rest of the United Kingdom. As I said at the beginning of my remarks, this is a Bill for the whole UK.

[Richard Fuller]

One of the objectives is that the bank should make a positive financial return. Can my right hon. Friend explain to the House why that is not in the Bill?

[John Glen]

I would be very happy to look into that matter and respond to my hon. Friend at the end. It is probably deemed to be unnecessary, but I will give absolute clarity, or the Exchequer Secretary will when he closes.

Thirdly, the Bill supports the operational independence of the bank by setting out clear governance and accountability in how it will be run. That is covered by the remaining clauses, including board requirements in clause 8, reporting requirements in clause 6, a review of the bank that will also look into its additionality in clause 9, and the ability for the Treasury to issue a strategic steer in clause 3 or a direction in clause 4.

Although the bank is still in its infancy, it is already taking a leading role in the clean infrastructure market. Over time, we expect the bank to catalyse new markets of infrastructure by crowding in private capital to help meet our climate change ambitions and level up across the UK. In much the same way that the EIB helped to catalyse the offshore wind market, where the UK is now a global leader, the UKIB will help to catalyse the infrastructure markets and technologies of the future.

Indeed, the Bill will be at the heart of our focus on our long-term energy security. It will help the Government to deliver more renewables, including more offshore wind. I have no doubt that the bank will grow to be a sophisticated and adaptive tool, which will allow the Government to quickly place capital behind the projects that this country needs. I reiterate to hon. Members on both sides of the House and to the wider public that we have designed the bank to endure and be a long-lasting institution that will deliver the long-term priorities on which we all depend. I greatly look forward to this afternoon’s debate and to drawing on the expertise of hon. Members on both sides of the House.

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

I will set out the views of the Opposition. We will not oppose the Bill today, as it seeks to put the UK Infrastructure Bank, which has been operating on an interim basis since June 2021, as we heard, on a statutory footing. We support the establishment and strengthening of the bank, and we want the new institution to play its part in tackling climate change and supporting regional and local economic growth.

The need for economic growth is central to the challenges our country is facing today, and it comes after 12 years of low growth under the Conservatives. During the last Labour Government, despite the global financial crisis, the economy grew by 2.1% a year. Since 2010, however, the Tories have grown the economy by just 1.5% a year. The outlook under the Tories now is even worse, with growth forecast to be the worst in the G7 over the next two years. As the previous Chancellor recently admitted, under the Conservatives we have been stuck in a “vicious cycle of stagnation”.

That stagnation in our economy has seen real wages fall and the tax burden rise for working people in this country. Even before the disastrous mini-Budget, working people were paying the price for the Conservatives’ record of failure on the economy. What the then Chancellor announced on 23 September poured petrol on the fire, as Ministers unleashed a discredited and reckless economic approach on the British public. Trickle-down economics, unfunded tax cuts and an ideological slashing of protections for workers and the environment—no wonder the former Prime Minister and Chancellor were removed from office so quickly, and no wonder the current Chancellor has had to U-turn on almost every measure. The truth is that this economic crisis was created in Downing Street. The damage has been done, and working people will be paying the price for years to come.

Part of the reason for the Conservatives’ failure to grow the economy as it could have been growing over the last decade has been their failure to invest in the infrastructure our country needs. As we look ahead to the coming decade, investment in our country’s response to the climate emergency could not be more critical, both to protect the environment and to grow the economy.

That is why Labour’s green prosperity plan is so important. Under our plan, we would invest in wind, solar and nuclear power to make our electricity system zero-carbon by 2030, we would insulate 19 million homes across the country, bringing down carbon emissions and people’s home energy bills, and we would invest in new jobs in industries of the future, from electric vehicles to clean steel.

We recognise that the UK Infrastructure Bank can play an important role in supporting essential investment. We therefore welcome the fact that one of its objectives, set out in clause 2 of the Bill, is to help tackle climate change. But setting up the bank is not enough on its own; we need a Government who will drive forward the agenda of green investment that we need. Sadly, the Government’s record makes it clear that they will fail to rise to that challenge.

There is evidence of that failure littered throughout the past 12 years. Ten years ago, the Government set up the Green Investment Bank. Five years later, they sold it off to a private equity group. The Public Accounts Committee said that the bank had

“failed to live up to original ambitions”.

The Committee was clear that, in selling it off, the Government had been focused on

“how much money could be gained from the sale over the continued delivery of GIB’s green objective.”

Supporters of the current Prime Minister on the Conservative Benches may remember that, two years ago, the then Chancellor published a video on his YouTube channel titled: “Rishi Explains: Green Home Grants”. In that video, the now Prime Minister excitedly announced that the brand-new green homes grant scheme was open for applications. However, I was not able to find any videos of him explaining why the green homes grant scheme closed six months later and saw £1 billion cut from its budget. Although he seems to have forgotten to make a video explaining that, the Environmental Audit Committee was happy to set out its views. In its report, “Energy Efficiency of Existing Homes,” it concluded that the scheme had been

“rushed in conception and poorly implemented”

and described its administration as “nothing short of disastrous”.

[Richard Fuller]

The Opposition spokesman talks about the importance of sticking with plans and of permanence. That is quite right; this is infrastructure, which lasts a long time. Will he therefore use this opportunity on the Floor of the House to give the assurance that, should Labour form a Government in the near future, it will make no changes to the objectives listed in the Bill?

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

It is a pleasure to welcome this sensible Bill, which puts the operations of the UK Infrastructure Bank on a statutory footing. It is pleasing that the Opposition will support the Bill, but it was somewhat worrying to hear the Opposition spokesperson, the hon. Member for Ealing North (James Murray) say that the Labour party was not committed to its objectives. That will send a worrying signal to investors in infrastructure, who want to see a long-term view from both sides of the House on the plan for UK infrastructure. Perhaps he might clarify in his closing speech that Labour will commit today to make no changes whatsoever to the Bill’s objectives. It would be helpful for him to make that indication.

It is right that amendments were made to the Bill in the House of Lords to include issues to do with the circular economy and nature-based solutions. That will broaden its aspect and applicability.

In opening, my right hon. Friend the Minister referred to the European Investment Bank. It is true that the UK used to benefit significantly from investment funds coming from the EIB, but those really came to a close in 2016-17 and, as that was five or six years ago, we should be honest about the need to get the bank moving. I am not trying to push for quicker movement, but this is an opportunity to start getting to the £5 billion or £8 billion that the UK Investment Bank said was its objective in its strategic plan this summer.

I turn to crowding in, which is one of the three parts of the bank’s “triple bottom line”, as it calls it. That is absolutely the right thing. There is plenty more that we can do, and I know that the Government are focused on that. With Solvency 2 and pension fund money being made available for more infrastructure expenditure, will the Minister update the House on the Government’s thinking about that?

The City of London and the Government have made tremendous strides in promoting green finance and London as a centre for that. Again, it would be useful to hear an update from the Minister on the UK’s leadership position, which the bank could play a significant part in helping us to deliver.

One of the most important parts of the 2019 review of infrastructure finance was about how the Government can provide a reliable delivery pipeline. That means that they are clear about the projects that they wish to promote and have a timetable that paces them out over a number of years. The National Infrastructure Commission can—it does not always—do a good job of that. Perhaps we will hear more about that in the near future.

I return to the point that I put to the Minister about another part of the triple bottom line: generating

“a positive financial return”—

which it says is

“in line with the Bank’s financial framework.”

Perhaps that is the answer to why it is not in the Bill, but it would be helpful to have a little more transparency about what the financial framework would be and how it will be brought to the House for some regulatory oversight. Will that be through hearings of the Treasury Committee or other reports that may be made to the House from time to time?

That is an important factor in the UK Investment Bank’s goals and the role that it can play in helping the UK to achieve net zero. Let us be frank: when, I think, four or five years ago, the House committed to achieving net zero in a certain timeframe, there was no price tag attached. It was the biggest commitment ever made without a price tag attached for the British taxpayer. The UK Investment Bank can play a role in making sure that that price tag gets smaller and smaller. In fact, one objective the UK Infrastructure Bank says it wishes to focus on is the transition to subsidy-free models. That is absolutely essential to some key aspects of how we achieve net zero, in particular the decarbonising of home heat where we will need to attract private sector capital and long-term, patient capital. We will need the Government, through the UK Infrastructure Bank, to provide some catholic investment and, most importantly, the product structures that enable drawing in of that capital behind the most effective way, while also being able to show how we get out of the taxpayer funding it all. We cannot afford to make unfunded pledges again and again on not only this generation of taxpayers, but on future generations of taxpayers. That is why I am particularly keen on pressing the Minister and, should I be fortunate enough to sit on the Public Bill Committee, investigating further—[Interruption.] I guess that is a straight no, Mr Deputy Speaker—how we can ensure that the commitments to a positive financial return and to transitioning from subsidy-free models are given more weight in the structure of the UK Infrastructure Bank.

Finally, I draw the attention of those on the Treasury Bench to clause 4, on the power of direction. This is a familiar topic, I think, in various parts of the Treasury at the moment. I would be interested if in his winding-up speech the Minister provided us with a little more of his thoughts. There was a debate on that in the other place. It might be helpful if the Minister updated us on what further thinking there has been on the power of direction.

This is a very sensible Bill. It confirms what is already the case and I am sure it will go through the House with very great speed.

[Mr Deputy Speaker (Mr Nigel Evans)]

The Whip on duty has made a note of your enthusiastic application to sit on the Committee.

Co-operatives, Mutuals and Friendly Societies Bill

Richard Fuller Excerpts

Friday 28th October 2022 Commons Chamber

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

Thank you, Madam Deputy Speaker, for calling me so early in the debate.

I congratulate the hon. Member for Preston (Sir Mark Hendrick) on the Bill, and thank him for his patience as his discussions evolve through the myriad manoeuvres within the Treasury. I add my thanks to Peter Hunt, the chief executive of Mutuo, for the benefit of his extensive knowledge of this sector. I also thank Treasury officials. Much has been said in recent months about Treasury orthodoxy, not always in a polite way. I should just like to point out that there are two aspects of Treasury orthodoxy. There is policy; that is a matter for politicians and Ministers, and of course we can have disagreements about it. But there is another Treasury orthodoxy, which is the way in which the civil servants in the Treasury work. In my brief time with them, I observed a level of dedication, hard work and responsiveness, and a spirit of public service, for which my constituents and the people of this country should be truly grateful. I thank them for that.

I know that you, Madam Deputy Speaker, as I do, would like to talk about my paper from 30 years ago about anomie and the way in which Max Weber has had such an important influence on organisational theory. We could talk at length about methodological individualism and the boundaries between an atomistic view of society and the limitations that places on effective co-operative action.

What it says, essentially, is that people come together in different ways to achieve shared objectives—as charities, as corporations, as Governments, as international organisations, as trade unions, as partnerships and, yes, as co-operatives, mutuals and friendly societies. Each of those organisational forms has its role in enabling us as individuals to fulfil our lives, achieve our objectives and, hopefully, create a better world for future organisations.

It is therefore an important responsibility of Government to maintain a structure of legislation that enables each of those organisational structures to thrive and prosper. Such organisations are the essential “little platoons” of the Burkean view of Conservative ideals and of the co-operative ideals of the Labour party. I congratulate the hon. Member for Preston on putting forward his Bill in such a way that I believe the Treasury Bench will be supportive; I look forward to hearing from my hon. Friend the Minister that that is his intention.

The hon. Member for Preston will be aware that several other issues need updating in the Friendly Societies Act 1992 and other associated legislation. The proposal in his Bill is a defensive one to protect organisations from the vagaries of time and the interests of passing individuals who may temporarily have power over the original principals of the organisations from when they were set up. He is absolutely right to point a way forward on that.

In the hon. Gentleman’s speech, however, he also talked about the positive way in which legislation can be changed to enable friendly societies, mutuals and co-operatives to play a bigger role in society—particularly, as my hon. Friend the Member for Bosworth (Dr Evans) said, in attracting new capital. It is for those purposes that I encourage the Minister to be clear today in his intention to ask the Law Commission to conduct that broader investigation in due course—but as urgently as possible—so that the Bill can be seen as the first step in a much more important set of steps to confirm the role of such organisations in our society.

--- Later in debate ---

[The Economic Secretary to the Treasury (Andrew Griffith)]

It is always a pleasure to follow the hon. Member for Hampstead and Kilburn (Tulip Siddiq). May I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who has joined us on the Front Bench this morning?

I congratulate the hon. Member for Preston (Sir Mark Hendrick) on reaching Second Reading with his Bill and on the committed and passionate advocacy that he and his team have shown on behalf of the mutuals sector. It takes a team effort to get things done, as my colleagues could sometimes benefit from remembering, and this is no exception. I pay tribute to my predecessor, my hon. Friend the Member for North East Bedfordshire (Richard Fuller), for his hard work over the summer, with officials, to bring us to this important moment. I also thank the hon. Member for Cardiff North (Anna McMorrin), who started the ball rolling; it is delightful that she was able to join us today. As the hon. Member for Hampstead and Kilburn says, this is a cross-party endeavour, and it is all the stronger for it.

The fantastic speeches from Members across the House have brought to life the tapestry of co-operatives and mutuals and their contribution to society across the United Kingdom. We heard about the Darlington Building Society’s five-year sponsorship of the Darlington rail heritage quarter. We were reminded of Robert Owen and the origin of the Welsh co-operative movement. My hon. Friend the Member for Heywood and Middleton (Chris Clarkson) took us back to the birthplace of the co-operative movement. My hon. Friend the Member for Hastings and Rye (Sally-Ann Hart) spoke about the contribution of White Rock Neighbourhood Ventures, which is helping to build her society. My hon. Friend the Member for Devizes (Danny Kruger) made a typically thoughtful contribution; he not only auditioned for the support of the wider co-operative movement, but rooted co-operative and community values firmly in the tradition of Disraeli.

Let me say a little about the Government’s intentions for the Bill. I can confirm that we will support it because we believe in, understand and recognise the contribution that the mutual model makes to society and financial inclusion, which is important to hon. Members on both sides of the House, and the diversity that it provides for the financial services sector. We have a fantastic financial services sector in this country, and mutuals are an important part of that and we wish to see them continue. The scale is often not fully understood, but Royal London is the largest mutual life insurance, pensions and investment company in the UK, and has assets under management of £164 billion—8.8 million policies in force. Therefore, as well as contributing to their communities up and down the United Kingdom, mutuals are also a very important part of our financial sector.

We heard, too, from my hon. Friend the Member for North Devon (Selaine Saxby) about Parracombe, from my hon. Friend the Member for Bosworth (Dr Evans) about the contribution being made by the Hinkley and Rugby Building Society, and from my hon. Friend the Member for Warrington South (Andy Carter). This shows the real contribution that these organisations make.

Let me make some progress on the Bill itself. The Government see this private Member’s Bill as a valuable attempt to build on progress, and further support the mutual model by granting His Majesty’s Treasury the power to make changes to what co-operatives, mutual insurers and friendly societies are able to do under legislation.

The House will note that the final Bill is more focused compared with the original long title. Allow me to briefly set out what we aim to achieve through the Bill. The Bill will allow co-operatives, mutual insurers and friendly societies further flexibility in determining for themselves the best strategies for their business relating to surplus capital. More specifically, this allows the Treasury to create regulations to provide these mutuals with the option to restrict the distribution of surplus capital—defined as equity minus members’ shareholdings and share interest—to their members on solvent dissolution of the mutual, or on the sale or conversion of the mutual to a company. The Bill does that by providing the power to create regulations to allow co-operatives, mutual insurers, and friendly societies to choose to adopt legal restrictions on the use of their assets. The intention is that, where the members choose to adopt these restrictions, the use of the assets would be limited to specific purposes in line with the purpose of the mutual society.

The Government anticipate that this will provide additional safeguards against demutualisation for those societies that choose to adopt the so-called “asset lock”. The Government understand that many here today were motivated by the proposed sale and demutualisation of LV= in 2021. Although, ultimately, that sale did not go through, because the vote in favour of selling was not backed by a sufficient proportion of members, we understand that it is right to interrogate the demutualisation process and consider the case for reform.

Voluntary asset locks—to prevent the distribution of legacy assets on the dissolution, sale, or conversion of a mutual—are already successfully adopted and freely entered into by co-operatives, mutual insurers, and friendly societies. The aim of these voluntary asset locks is to limit the financial incentives that many believe sit behind demutalisation processes. For example, many mutual entities have adopted “charitable assignment clauses” into their rules. This determines that any capital surplus on the dissolution, conversion, or sale has to go to a nominated charitable cause and not to the members at that moment in time. Within this, it is an established practice for mutuals to adopt high voting thresholds when members are deciding on decisions that affect the future strategic direction of the mutual.

We think these aims are laudable, but what the Government want to do is to build on the safeguards already in place to preserve the mutual movement. By placing an ironclad guarantee in legislation, we aim to support mutuals to make these locks harder to unpick in the future so that a mutual’s funds continue to be used for their social purpose and the social contract with its members and future members continues to be honoured, where the members choose to implement it.

By bringing forward this legislation, we are granting these efforts with a statutory footing should a mutual and its members decide that this is the best route for them. The optionality of the statutory asset lock is key, for it leaves the decision on the future of a mutual in the hands of mutuals and their members. Throughout, we have been guided by the core value of what it is to be mutual—with the interests of their members and communities at the heart of what they do.

If possible, I would like to go further: in alignment with the spirit in which the hon. Member for Preston has introduced this Bill, we are exploring the options for delivering reviews of key legislation underpinning the sector, including engagement with the Law Commission to help us to finalise our approach. I cannot go further than that today, as my hon. Friend the Member for North East Bedfordshire pressed me to, but that is something we are looking at and will move forward with.

[Richard Fuller]

I am very grateful to my hon. Friend for the opportunity to press him again. As he makes these considerations, will he commit from the Dispatch Box that, at Committee stage, he will come forward with the framework of the recommendations and, if he is minded to pursue this with the Law Commission, what issues it might cover?

Stamp Duty Land Tax (Reduction)

Richard Fuller Excerpts

Monday 24th October 2022 Commons Chamber

[The Economic Secretary to the Treasury (Richard Fuller)]

I beg to move,

That—

(1) Part 4 of the Finance Act 2003 is amended as follows.

(2) In section 55(1B) (amount of stamp duty land tax chargeable: general), for Table A substitute—

--- Later in debate ---

[Richard Fuller]

I listened with interest to the shadow spokesperson, the hon. Member for Ealing North (James Murray), who seemed to be using up all his greatest hits of criticism ahead of Second Reading, so I am not sure what he will say when we come to that. We always look forward to hearing Labour Members talk to us about the economy—they did such a good job with it last time they were in power.

Let me turn, more constructively, to the amendment tabled by the hon. Member for Westmorland and Lonsdale (Tim Farron). His concerns come from a good place. I have had the privilege of listening to him, on the Front and Back Benches, talk about this issue and the impact on his constituents. I know that he comes from a good place and not, as he said, from the politics of envy.

[Steve Double (St Austell and Newquay) (Con)]

As the Minister will know, there is a lot of concern on the Government Benches about the proposal’s impact on second homes and holiday lets, and there will be a lot of sympathy for the amendment from the hon. Member for Westmorland and Lonsdale (Tim Farron). Last week, the Chief Secretary to the Treasury gave me an assurance that the Treasury was looking at this issue. Will the Minister reaffirm that the Treasury understands that this is an issue and that we will look at how we can address it as the Bill progresses through the House?

[Richard Fuller]

My hon. Friend is absolutely right. He echoes some of the points made by the hon. Member for Westmorland and Lonsdale about the broad range of opportunities to address the issue, because there are such wide-ranging effects. The purpose of the amendment, however, is to create a separate schedule of rates in the stamp duty land tax system for those purchasing an additional property. That would mean that the purchase of additional property would not be included in the scope of the resolution or the ensuing Bill.

The Government already have higher rates for additional dwellings, which were introduced in 2016 and which apply a 3% surcharge to the standard residential rates of stamp duty. That surcharge will continue to apply. This means that, although the Government’s changes to stamp duty will ensure that around 43% of transactions will pay no stamp duty land tax, none of those will be purchases of second homes or investments in buy-to-let properties. The Government have taken meaningful action to support local communities on second homes. I assure my hon. Friend that we will continue to look at that.

[Selaine Saxby (North Devon) (Con)]

I reiterate the concerns raised by my hon. Friend the Member for St Austell and Newquay (Steve Double). Would it be possible to meet the Treasury team as the Bill progresses to ensure that coastal communities such as mine in North Devon do not continue to be blighted by the march of second homes?

[Richard Fuller]

I am always happy to engage with colleagues across the House. As I was saying, the Government have taken meaningful action on a range of issues, most recently through the Levelling-up and Regeneration Bill, which will introduce a council tax second homes premium.

[Tim Farron]

I am grateful to the Minister for the tone of his response, but I am disappointed that it looks as though he will not accept my amendment, not least because it lays the ground to take seriously the points made by the hon. Member for St Austell and Newquay (Steve Double) about proactively tackling excessive second-home ownership and holiday lets. We need to do something now at least to not make the situation worse, and I fear that, unamended, the Minister’s proposals will make things worse. We have been trying to amend the Levelling-up and Regeneration Bill in Committee so that there are measures that can control, through planning, the number of second homes and holiday lets in communities such as mine, but we have had no success so far. Will he meet me and others who are concerned to look at how we can table amendments and make proposals through the Treasury that would make a material difference to communities such as mine?

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[Richard Fuller]

As I said to my hon. Friend the Member for North Devon (Selaine Saxby), I am very happy to engage with the hon. Member for Westmorland and Lonsdale about this issue, but I say again that there are multiple ways in which we can deal with these issues through different aspects of Government. I hope that he will take this up with other Departments as well, and I urge him to withdraw his amendment.

Question put, That the amendment be made.

Stamp Duty Land Tax (Reduction) Bill

Richard Fuller Excerpts

2nd reading
Monday 24th October 2022 Commons Chamber

[The Economic Secretary to the Treasury (Richard Fuller)]

I thank Members for their contributions to the debate. At its start, my hon. Friend the Exchequer Secretary to the Treasury set out the critical importance of the Bill and the Government’s cut to stamp duty land tax. The Bill is important to home movers and to first-time buyers; it is important for jobs and businesses connected to the property industry; and it is important for our economic growth. Stamp duty land tax at high levels can reduce a household’s willingness to move. This tax cut will enable more people to move home each year, which will, in turn, boost economic growth through the businesses and jobs the property industry supports.

The Labour Opposition spokesman, the hon. Member for Ealing North (James Murray), made points about the cost of mortgages due to recent economic uncertainty and interest rate rises. I just point out to him that interest rates and mortgage rates have been rising since last autumn in response to global trends, including Putin’s illegal invasion of Ukraine, and the UK is not immune to these trends. Crucially, interest rates are not solely rising in the UK; the US Federal Reserve has been raising its base rate since March 2022.

[Karl Turner (Kingston upon Hull East) (Lab)]

I just want to be clear: how sure is the Minister that the new Prime Minister is not going to overturn this stamp duty stuff?

[Richard Fuller]

I am more sure of that than I am that I will be in my position tomorrow. This is a serious debate and an important point about mortgage rates has been made. I am just trying to point out the two issues: rates have been rising since autumn; and this is a global change in interest rates.

Our stamp duty cuts will help the situation by reducing the up-front costs of moving. This Bill will save a family moving into an average home in England £2,500. As the Exchequer Secretary mentioned, we are returning money that can be spent to help cover moving costs, improvements, new furniture or appliances.

The Opposition spokesman asked questions about the processing of the Bill, but he missed the fact, of course, that the stamp duty change is already in effect and the Government are continuing with the legislation. The right hon. Member for Hayes and Harlington (John McDonnell) made some good points about house building. I just point out to him that in 2019-20 almost 243,000 net additional dwellings were delivered, which was the highest amount in nearly 20 years; and that at the spending review 2020-21 the Government confirmed £11.5 billion of funding for the affordable homes programme from 2021-22, which is the largest cash investment in affordable housing for a decade and is providing up to 180,000 new homes across England.

The hon. Member for Westmorland and Lonsdale (Tim Farron) repeated the points he made earlier about issues to do with purchasing additional property. I just repeat that the Government’s stamp duty cut will ensure that about 43% of purchases each year will pay no SDLT whatever and that none of those will be purchases of second homes or buy to lets.

The hon. Member for Hampstead and Kilburn (Tulip Siddiq), in closing for the Opposition, said that the Government somehow seem to be encouraging foreign buyers and she talked about introducing a charge for foreign buyers. I just remind her that there is already a 2% charge for non-residents on SDLT.

Let me conclude by reminding this House of what this Bill is all about. It will mean that about 43% of transactions—

[John McDonnell]

Will the Minister look at the issue of the 100% offset that incorporated landlords now have against profits?

[Richard Fuller]

Of course I am happy to look at all suggestions, including the one the right hon. Gentleman has made.

This measure will mean that around 43% of transactions each year pay no stamp duty whatever, which will help to support the housing market. I say to both Opposition spokesmen—the hon. Members for Ealing North and for Hampstead and Kilburn—that as result of this measure first-time buyers in their constituencies who would not have qualified for zero stamp duty will now qualify, and Labour will today be voting against that. I would also say to the right hon. Member for Wolverhampton South East (Mr McFadden) and the hon. Member for Leeds West (Rachel Reeves), the shadow Chancellor, who are not in their places, that the average mover buying the average house in their constituencies would not have qualified for zero-rate stamp duty land tax before this measure, and Labour will again be voting against that tax cut today.

This measure will boost labour mobility, support hundreds of thousands of jobs and businesses, increase transactions to boost the property industry, and continue the Government’s record of supporting people, including younger people, into home ownership. For those reasons, I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

Cost of Living: Support for Young People

Richard Fuller Excerpts

Tuesday 18th October 2022 Westminster Hall

[The Economic Secretary to the Treasury (Richard Fuller)]

What a great pleasure it is, Ms Ali, to serve under your chairmanship. I thank the hon. Member for Leeds North East (Fabian Hamilton) for securing the debate, and I thank the hon. Members who have contributed, including the hon. Members for Bath (Wera Hobhouse) and for East Dunbartonshire (Amy Callaghan). I thank my friend, the hon. Member for Sheffield Central (Paul Blomfield), for a number of very useful interventions, and the SNP spokesperson, the hon. Member for Glasgow Central (Alison Thewliss), and my colleague on the Front Bench opposite, the hon. Member for Ealing North (James Murray), for their contributions.

It was good that the hon. Member for Leeds North East started by referring to the YMCA publication entitled “Inside the cost of living crisis: The experiences of young people living at YMCA”, which was published earlier today, along with some other reports. I would like to draw colleagues’ attention to the statement with which that report starts, with which I am sure we can all agree:

“Everyone should have a fair chance to discover who they are and what they can become.”

The YMCA does great things across the country to enable people to achieve that objective.

There are real challenges facing our economy after two decades of low inflation. The world is now confronted with a high bout of fast-growing prices and the United Kingdom is not immune. While that takes place, we should all remember that our friends in Ukraine are at war, and the United Kingdom will continue to support them in a number of ways. We recognise that Putin is using energy as a weapon of war, pushing up prices and piling pain on citizens across the free world and particularly in Europe.

We should also recognise that young people can be in a particularly precarious position, because they are still in education or just starting out in their careers. They may not have had time to build a financial safety net. Many are at a critical stage of identifying and then seeking to accelerate their potential. I want to be clear: this Government are responding to help the most vulnerable to get through these tough economic times.

I want to answer some of the questions that have been raised. Very directly, on the uprating of welfare benefits in line with inflation, I will be honest: there are difficult decisions to be made. I want to reassure people that helping the most vulnerable will continue to be central to our decisions, just as it was when we announced support of £1,200 for millions of the most vulnerable households. The Government are required to review the rates of benefits annually to determine whether they have kept pace with price inflation. The Work and Pensions Secretary is yet to conduct her annual review of benefits and more will be said in the medium-term fiscal plan.

I think I heard the hon. Member for Glasgow Central ask why the universal credit standard allowance is lower for people under 25. That is to reflect that those claimants are more likely to live in someone else’s household and to have lower living costs. However, it is acknowledged that some claimants under 25 do live independently, which is why universal credit includes separate elements to provide support to claimants for those additional costs.

I want briefly to talk about the trend of poverty since 2009-10. Between 2009-10 and 2021, 2 million fewer people were in absolute poverty after housing costs—a figure that includes 500,000 children. In 2021, 536,000 fewer children were in workless households than in 2010. The youth unemployment rate fell by 1.3 percentage points in the quarter to August 2022 and is at a record low of 9%, which is around a quarter below its pre-pandemic level.

That progress requires us to talk about economic stability, which is vital for everyone and particularly for young people who may be looking for their first jobs or next steps. Instability affects the prices of things in shops, the cost of mortgages and the value of pensions, meaning that bringing stability to the economy will ease the cost of living for everyone. As the Chancellor has said, the United Kingdom will always pay its way and we remain committed to fiscal discipline. There will be more difficult decisions to take on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term. We will publish a medium-term fiscal plan to set out our responsible fiscal approach more fully at the end of the month.

The only real way to create better jobs, deliver higher wages and spread opportunity is growth. Growth is what frees us to invest in the services that ordinary people need and to give people the financial security to live their lives as they want. Stability is a prerequisite for growth.

[Wera Hobhouse]

I do not think anybody could disagree that we all want growth, but the question is, how do we make that growth happen? My point was that we need to invest in people, particularly young people, to make that growth happen.

[Richard Fuller]

Yes of course, but the hon. Lady did not answer her question. The question is, how do we tap that potential? It is important to design policies that tap that potential. I was struck by a point made by the hon. Member for Glasgow Central about migrant families coming to this country and how they start their life. It is a fact around the world that first-generation migrant families, more often than not, contribute a greater proportion to the growth of the country that they go to than the population that they join. That seems to be a fact. I have not forgotten previous discussions with her before I took this role. The hon. Member for Bath said that we have to focus on people’s potential, but we have to find that strategy to achieve growth.

I remind hon. Members that while tackling these economic challenges, the fundamentals of the UK economy remain resilient. Unemployment is at its lowest in nearly 50 years. Our growth rate since 2010 has been higher than that of Germany, France, Italy and Japan, and it is forecast to be higher than that of any G7 country this year. The Labour spokesperson, the hon. Member for Ealing North, is shaking his hands, but these are the facts.

Our need for competence and stability is not at odds with the help that we are providing to those struggling with the cost of living. That is why the Government are focused first and foremost on helping everyone with the cost of living, most notably the cost of energy. The energy price guarantee and the energy bill relief scheme are supporting millions of households and businesses with rising energy costs. The Chancellor has already made clear that they will continue to do so—

[Amy Callaghan]

rose—

[Richard Fuller]

I must finish up, if I may. They will continue to do so from now until April next year. The Government have also announced £37 billion of targeted support for the cost of living this financial year.

Many young people will have benefited as their wages got a boost from the national minimum wage increase. As a result of our changes to the national minimum wage, from April 2022 people aged 21 or 22 saw a 9.8% uplift, to £9.18 an hour, while 18 to 20 year-olds received a 4.1% rise, to £6.83 an hour, and 16 to 17 year-olds had an equivalent 4.1% increase, to £4.81 an hour.

[Alison Thewliss]

rose—

[Richard Fuller]

I just have one more minute—I think that is correct.

[Rushanara Ali (in the Chair)]

You can take an intervention if you want to.

[Richard Fuller]

In that case I would love to.

[Alison Thewliss]

Can the Minister explain why people of a younger age are not worth the same as someone older?

[Richard Fuller]

Yes I can. The fundamental point is that we are investing in young people. Many businesses wish to invest and add additional costs for training and support to tap into those skills, so that people can earn higher wages later on. It is because companies have the incentive to invest in young people that young people can then earn more. The hon. Lady shakes her head, but she should recognise that the national minimum wage is not a cap on what people can be paid but a floor. If companies invest in young people to get those skills, they can earn more.

Our youth offer provides guaranteed foundation support to young people searching for work on universal credit. That includes 13 weeks of intensive support to help new claimants into suitable opportunities and provision. Youth hubs are co-delivered by the Department for Work and Pensions and local partners, and youth employability coaches are available for those with complex needs.

We will always encourage labour market participation and make it pay to work. Through universal credit, the Government have designed a modern benefits system that ensures that it always pays to work and that withdraws support gradually as claimants move into work, replacing the old legacy system, which applied effective tax rates of more than 90% to low earners.

Questions were raised by the hon. Member for Bath about free school meals and breakfast clubs. The Government spent more than £1 billion on delivering free school meals to pupils in schools. Around 1.9 million disadvantaged pupils are eligible for free school meals, as well as an additional 1.25 million infants who receive a free meal under the universal infant school meal policy. The Government are also providing an additional £500 million toward the cost of extension, which has come via a six-month extension to the household support fund.

The hon. Member for Leeds North East talked about breakfast clubs. The Government are providing over £2 million a year to continue the holiday activities and food programme, which provides free holiday club places to children from low-income families. The Government are providing £24 million over two years for the national breakfast club programme, benefitting up to 2,500 schools.

The hon. Member for Sheffield Central and others asked questions about support for university students. He may know that the Government have increased maintenance loans every year, meaning that disadvantaged students now have access to the highest ever amounts in cash terms. He may know that the Government have made £260 million available through the Office for Students, which universities can use to boost their own hardship funds. He may know that many students also benefit from the wider package of cost of living support, and he will know that maximum tuition fees will be frozen until 2025. He mentioned one particular idea on thresholds, which I would be grateful if he could write to me about.

[Paul Blomfield]

I will write to the Minister on that point. It is all very well saying that the maximum loan has been increased, but people cannot access it because the threshold has not changed. I think there is some serious work to be done by the Government on that. It could make a very real difference to some of the most hard-pressed students.

[Richard Fuller]

I would be grateful for his insight on that issue. I want to close on the issue of mental health and young people, which is an issue close to my heart. We are all aware that the response to covid had a dramatic effect on the mental health and wellbeing of young people more than others. The Government appreciate the importance of responding to the significant demands on children and young people’s mental health. The Government are delivering record levels of investment in mental health services. These investments are part of the NHS’s long term plan and include an extra £2.3 billion per year for mental health services by 2023-24. This will give an additional 345,000 children and young people access to NHS-funded services or school-based support by 2024.

It has been an interesting and pithy debate. It is clear that we owe it to the next generation to deliver higher wages, new jobs and improved public services. We owe it to young people to deliver stability and a strong economy on which they can build their future securely. We must make sure they have the safety net they need now. The Government will help them with the cost of living today and continue to invest in them for the future; that is what young people will benefit from, and that is what the Government are focused on delivering.

Health and Social Care Levy (Repeal) Bill

Richard Fuller Excerpts

2nd reading
Tuesday 11th October 2022 Commons Chamber

[The Economic Secretary to the Treasury (Richard Fuller)]

It is a pleasure to close this debate on behalf of the Government. I thank all hon. Members for their contributions to this relatively short debate. I think it is fair to say that none of us came here expecting to find a perfect consensus, but it was rather pleasing to hear the measure welcomed by the Opposition spokesperson, the hon. Member for Ealing North (James Murray), the SNP spokesperson, the hon. Member for Gordon (Richard Thomson), the Liberal Democrat spokesperson, the hon. Member for Richmond Park (Sarah Olney), and the hon. Member for Glenrothes (Peter Grant). I thank all those Opposition Members for their support.

I thank my hon. Friend the Member for South Suffolk (James Cartlidge) and my long-standing hon. Friend the Member for Macclesfield (David Rutley) for their speeches and my hon. Friends the Members for Winchester (Steve Brine) and for Salisbury (John Glen) for their interventions. If there was one message from the four of them, it was on the importance of fiscal responsibility. That was heard loud and clear, and it has been resonated by the Chancellor again and again, including today. Truly, it is the essence of conservatism, as my hon. Friend the Member for South Suffolk said. I noted what my hon. Friend the Member for Macclesfield said about the Treasury working more closely with the OBR and about the engagement requested by the Chair of the Treasury Committee. I assure him that the Treasury team will engage as he has suggested.

This has been a serious debate for the most part. It looked like it was getting into levity at one point, when the hon. Member for Arfon (Hywel Williams), who unfortunately is no longer in his place, volunteered to be a member of the anti-growth coalition. He said it was important that there was a free lunch. The hon. Member for Gordon spoke about not joining a club and invoked Marx, although not the Marx who was the favourite of the former Opposition spokesperson on finance.

At times, there were clear points of ideology in respect of the plan. It is clear that the purpose of the Chancellor’s growth plan is to improve lives across the country over the long term. Growing the economy must be our guiding mission, and with this Government it is. We will do so through lower taxes, through improved infrastructure, by supporting skilled employment, by removing barriers to investment, by getting the housing market moving, by making Britain an even better place to do business and by ensuring that people who earn money keep more of it so that they can make their own decisions—that includes our businesses.

I heard from the Opposition spokesperson that their plan comprises two aspects. First, it is the Government—a Labour Government—who should decide the right way to achieve growth in this country, rather than the wealth creators and businesses. Labour wishes to make those decisions on behalf of all of us. Many of us on this side of the House know where that sort of central planning ends up.

Secondly, those with the broadest shoulders should bear the burden. I just warn hon. Members to measure how broad their shoulders are. My fear is that it is not those with broad shoulders but anyone with shoulders who bears the burden. My point is this: the starting position for Labour’s plan is that this year, 2022-23, those in the top 1% of the income distribution are estimated to receive 13% of all income, but already pay 30% of all income tax liabilities. Those in the bottom 50% of the income distribution are estimated to pay only 8.3% of all income tax. When Labour says that it wants to fund its plans through general taxation, it is not looking for the 1% to pay; it is looking for people on average and low incomes to pay. The Conservative party does not think that is the right way to achieve growth.

[Peter Grant]

Will the Minister give way?

--- Later in debate ---

[Richard Fuller]

I will come to the hon. Gentleman if I have time.

The Liberal Democrat spokesperson gave a very good speech and raised important broader issues. She welcomed the measure and spoke about the costs that have been paid by people and businesses—she gave the figures £2.5 billion and £3.8 billion. That underlines the important contribution this measure will make by putting money back into the pockets of households as they face the winter crisis and into the hands of businesses as they make their investment decisions.

The hon. Lady kindly spoke about her past as an accountant—not everyone would necessarily volunteer their past as an accountant. She spoke about some of the disruption there has been. I assure her that I have spoken, as has HMRC, to payroll software companies to assess what the level of disruption has been and whether this additional change will cause further disruption. In my conversations with them, they have said that there have been minimal costs to date and that the reversal will have minimal costs for them. That is just a selection of payroll software companies—there are others—but I can give her some assurance that there has perhaps been less disruption than she feared.

[Sarah Olney]

I thank the Minister for that assurance, but the point I was making was not so much about the technical implementation; I totally take his point that it is a software change. The point I was making was more about headcount forecasts and how many staff businesses can afford to take on. Changing the national insurance contribution that businesses make has a material impact on those forecasts and will have had an impact on how many new jobs have been created.

[Richard Fuller]

That is an interesting point, and it probably is worthy of further investigation. On the day when we have announced that the country has more vacancies than unemployment, and unemployment is at a long-term low, one would think that that impact has not been significant, but it is an issue that is worthy of further investigation. The other point that the hon. Lady made about the impact that hospital discharges may be having on social care—she talked about the hospital in her constituency—is a relevant one, and I am sure that it will be taken up by my right hon. Friend the Secretary of State for Health and Social Care.

The hon. Member for Liverpool, Riverside (Kim Johnson) asked, as others did, whether the changes to the levy will change the funding previously announced. I can assure her that the levy change makes no difference to the funding outlined.

Other points were made, and we will have further discussions in Committee. My right hon. Friend the Chief Secretary to the Treasury made the point that the reversal of the levy is part of a much greater sum. Above all, it is about achieving the sustainable growth that this country needs and deserves. That is our mission as a Government, and it is the purpose of the Bill. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).

Health and Social Care Levy (Repeal) Bill (Money)

King’s Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Health and Social Care Levy (Repeal) Bill, it is expedient to authorise:

(a) the payment of sums by the Secretary of State out of money provided by Parliament to His Majesty’s Revenue and Customs for payment into the National Insurance Fund, and

(b) the payment of sums out of the National Insurance Fund into the Consolidated Fund.—(Amanda Solloway.)

Question agreed to.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 11th October 2022 Commons Chamber

[George Freeman (Mid Norfolk) (Con)]

8. What fiscal steps he is taking to support research and development.

[The Economic Secretary to the Treasury (Richard Fuller)]

At the 2021 spending review, the Government announced an increase in public expenditure on R&D to £20 billion a year by 2024-25, including funding for association to EU programmes.

[George Freeman]

I thank the Chancellor and his team for making the Treasury a growth Department. Do they agree that innovation-led growth is particularly important if we want to drive up productivity, competitiveness and inward investment, and that our high-growth sectors such as space, agritech and fusion have a big role to play? Will the Economic Secretary specifically reassure those in the R&D community that he will not be tempted to reduce the allocation for Horizon or for science and research in the comprehensive spending review? That would reassure the markets.

[Richard Fuller]

Very few Members can look back on a track record of commitment to R&D as significant as that of my hon. Friend, both as a Minister and as a Back Bencher. I am happy to confirm to him that we will abide by the spending review 2021 decisions, and that that includes funding for core Innovate UK programmes, for association to Horizon Europe and for the Advanced Research and Invention Agency.

[Valerie Vaz (Walsall South) (Lab)]

The Minister needs to be much more specific about the Horizon Europe programme. Is he aware that the Nobel laureate Sir Andre Geim has said that top academics are leaving the country in despair because the Government are not negotiating on Horizon Europe? When will the Government do something—now?

[Richard Fuller]

The right hon. Lady is right about the importance of this issue. The United Kingdom absolutely wishes to move forward, and we would hope that the European Union would move forward apace with us to reach an agreement.

[Mike Amesbury (Weaver Vale) (Lab)]

9. What estimate he has made of the revenue that will be raised by the loan charge.

[The Economic Secretary to the Treasury (Richard Fuller)]

The loan charge was announced in the 2016 Budget as part of a package of measures to tackle disguised remuneration tax avoidance. In the 2022 spring statement, it was estimated that the package would produce an overall Exchequer yield of £3.4 billion. The changes resulting from the 2019 independent review of the loan charge have reduced the Exchequer yield by an estimated £620 million.

[Mike Amesbury]

Too many ordinary people are facing huge bills, untold distress and, in some cases, personal harm and indeed suicide because of the loan charge scandal. Can the Minister and the Government now commit themselves to finally commissioning a truly independent review to deal with this mess?

[Richard Fuller]

I do not think that any Member who has met constituents who have been affected by the loan charge can have failed to be moved by the emotional and psychological impact that it has had on many of them. It is therefore right for me, as a Minister, to look at the issue carefully, and I can say to the hon. Member that I will engage all interested parties.

[Dan Jarvis (Barnsley Central) (Lab)]

12. What fiscal steps his Department is taking to fund the Government’s levelling-up agenda in the north of England.

--- Later in debate ---

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

14. What fiscal steps his Department is taking to encourage business innovation.

[The Economic Secretary to the Treasury (Richard Fuller)]

The Government are encouraging business innovation in many ways, of which I will enumerate four. As I mentioned to my hon. Friend the Member for Mid Norfolk (George Freeman), there is a significant uplift in R&D expenditure, with £150 million of innovation loans over the spending period, research and development tax relief, long-term investment in technology and science—a competition is providing up to £500 million in Government support—and the British Business Bank is supporting innovative businesses, including through the future fund.

[David Simmonds]

Owners and entrepreneurs behind small businesses such as Code Ninjas in Bridge Street in my constituency are a key part of the Government’s growth agenda. What steps does my hon. Friend have in mind to enable such small and medium-sized enterprises to create further jobs and growth?

[Richard Fuller]

I am not sure if I got the name quite correct. Was it Comms Ninjas?

[David Simmonds]

Code Ninjas.

[Richard Fuller]

Oh, right. Perhaps I can visit my hon. Friend’s constituency to learn what the company does.

More generally, the growth plan focuses on important measures to support small businesses that wish to grow, including by making the £1 million annual investment allowance permanent, by looking to expand the amount of money that can be given through the seed enterprise investment scheme to help small businesses to grow and, most importantly, through the Government’s energy price support this winter.

[Stephanie Peacock (Barnsley East) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Caroline Ansell (Eastbourne) (Con)]

T4. Early results from my local business survey strongly suggest that a lower VAT rate would increase investment, which would boost recovery and growth in the hospitality sector in my beautiful constituency. Will my right hon. Friend be reviewing the case for a lower rate, to bring us back into line with some of our international competitors?

[The Economic Secretary to the Treasury (Richard Fuller)]

Eastbourne is indeed beautiful, as are North East Bedfordshire and many other parts of the country. My hon. Friend is right to talk about the importance of VAT to the hospitality industry, particularly as we moved through the period of covid recovery. As we now move towards the growth plan, we need to look at the level of taxes on small businesses in general. That is a key part of the work I will be looking at as part of the tax simplification plan.

[Kirsten Oswald (East Renfrewshire) (SNP)]

T2. Push payment fraud losses increased by 71% in the first half of 2021, surpassing card fraud losses for the first time. What steps is the Chancellor taking to tackle this huge surge in fraud, and importantly, to ensure that victims, including my constituents, are reimbursed for their losses, instead of being unfairly penalised for falling victim to these increasingly sophisticated scams?

Interim Infected-blood Compensation Payments and the Welsh Government Jobs Growth Plus Scheme: Clarification of Tax Treatment

Richard Fuller Excerpts

Tuesday 11th October 2022 Written Statements

[The Economic Secretary to the Treasury (Richard Fuller)]

Interim infected blood compensation payments

Following Sir Brian Langstaff’s recommendation, the Government previously announced that infected individuals and bereaved partners currently registered on the existing UK infected blood support schemes, and those who register from now to the inception of any future scheme, would receive an interim compensation payment of £100,000¹.

The Government are today announcing that they will ensure that no income tax, capital gains tax, national insurance contributions or inheritance tax are charged on these payments. In addition, these payments will not be included as income for tax credit purposes. The Government will legislate to exempt these payments in due course.

In the interim, His Majesty’s Revenue and Customs will exercise its collection and management discretion and will not collect any tax on these payments once issued.

Jobs Growth Plus scheme

In addition, the Government will legislate in the Finance Bill 2022-23 to ensure that payments made under the engagement and advancement strands of the Jobs Growth Plus scheme by the Welsh Government will be exempt from income tax. This legislation will apply retrospectively from 1 April 2022, when payments from the scheme started.

HMRC will exercise its collection and management discretion and will not collect any income tax that may have been due on payments made from 1 April 2022 to the date the legislation takes effect.

These measures are being announced outside of the normal fiscal process in order to provide certainty regarding the tax treatment to those making the payments and the recipients.

¹ https://www.infectedbloodinquiry.org.uk/sites/default/files/2022-08/16082022_Minister%20for%20the%20Cabinet%20Office%20to%20Sir%20Brian%20Langstaff.pdf

[HCWS308]

Tax Exemptions for Compensation Payments by Post Office for Overturned Historical Convictions

Richard Fuller Excerpts

Friday 23rd September 2022 Written Statements

[The Economic Secretary to the Treasury (Richard Fuller)]

This House is aware that the Post Office Horizon scandal has had a devastating impact on the lives of many postmasters since it began over 20 years ago. The Government previously announced funding for final settlement compensation payments for postmasters who have had their convictions overturned. So far, the vast majority of postmasters who have had their convictions quashed have each received an interim compensation payment of up to £100,000. The Post Office, supported by Government, is now working towards agreeing final settlements with the claimants who have come forward.

The Government want to see these postmasters with quashed convictions compensated fairly and swiftly. That is why the Government are announcing today that victims will pay no income tax, capital gains tax, national insurance contributions, inheritance tax or VAT on compensation payments for overturned historical convictions, including on payments already made. The Government will legislate to exempt these payments in due course where necessary.

HM Revenue and Customs will not collect any tax that may have been due on payments made already up to the date the legislation takes overriding effect.

With the Government being the sole shareholder in the Post Office, we will continue to work across Government and with the Post Office to ensure the postmasters get the full compensation they deserve.

[HCWS303]

Health and Social Care Levy (Repeal) Bill

Richard Fuller Excerpts

Thursday 22nd September 2022 Written Statements

[The Economic Secretary to the Treasury (Richard Fuller)]

Today the Government have introduced the Health and Social Care Levy (Repeal) Bill.

This Bill delivers the Prime Minister’s promise to reverse the temporary 1.25 percentage point increase in national insurance rates from 6 November and will cancel the levy coming in as a separate tax from April 2023.

In cancelling the tax rise for employees, the self-employed and employers, the Government are acting to support individuals with the cost of living by allowing them to keep more of what they earn, as well as to support businesses to pursue growth, innovate and invest.

This will be an average tax cut of around £135 for workers this year and around £330 next year. Taking into account the increase to national insurance contributions thresholds at the spring statement and the levy reversal, almost 30 million people will be better off by an average of over £500 in 2023-24.

Around 60% of businesses with NICs liabilities will see a reduction in their NICs bill, with 20,000 of these businesses being taken out of paying NICs entirely due to the combination of this measure and the employment allowance. The average savings for businesses will be £9,600 for the 2023-24 tax year.

The Government are implementing the change as soon as possible, to maximise the cash benefit for people and businesses this year. Most employees will receive a cut to their national insurance directly via payroll in their November pay.

The self-employed will pay NICs at 9.73% on earnings between £11,909 and £50,270 per annum. The blended figure is equivalent to seven months at the higher rate 10.25% and the remainder at 9%

While the tax rise will be cancelled, funding for health and social care services will be maintained as planned. The additional funding used to replace the expected revenue from the levy will come from general taxation. The Government remain committed to ensuring fiscal discipline over the medium term.

[HCWS301]