National Insurance Contributions (Secondary Class 1 Contributions) Bill

Sammy Wilson Excerpts

Committee of the whole House & 3rd reading
Tuesday 17th December 2024 Commons Chamber

[Dr Sandher]

I thank the right hon. Member for his incredibly kind words. For me, this is actually rather simple. I follow the Office for Budget Responsibility forecast, which goes through the Treasury policy costing and gets signed off. Those are the numbers I look at, and that is the money that will come in.

We are raising the money, as set out in those forecasts, in a fair way to invest in our future prosperity. We are using that money to build the homes that we need. In the mid-1990s, it took a young person around three years to save for a deposit. Now it is over 14 years, and in London it is nearly 30. That is why nearly half of young people are living at home with their parents, and why we are investing the tax revenue from the measures that we are discussing in the affordable homes programme. That means more homes for young people.

We are also using this money to create good jobs. The idea that someone could leave school and get a decent wage left our nation long ago. There are low-paid and insecure service jobs for some, but many are unable to get a job at all. Today, around 15% of young people are not in education, employment or training. Our warm homes plan, which will upgrade 300,000 homes, will also create tens of thousands of good jobs.

[Sammy Wilson (East Antrim) (DUP)]

Analysis shows that this measure will hit the low paid and the young hardest. It will not help young people to get all the things that the hon. Gentleman describes, because they are the group who will find things most difficult as a result of it.

[Dr Sandher]

The young and the lowest paid work in the smallest businesses. Some analysis, including that from the Institute for Fiscal Studies, does not include these measures, and does not have matched employer-employee datasets. Indeed, Paul Johnson admitted as much when he came before the Treasury Committee.

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[David Chadwick]

The Liberal Democrats agree that the country’s finances are in a mess thanks to the previous Conservative Government. However, we do not agree that increasing national insurance is the way to address the problem, as doing so will undermine efforts to improve public services across the United Kingdom. For example, last month Care Forum Wales issued a stark warning that the rise in national insurance could cause a collapse in the social care system in Wales, creating a £150 million funding gap. Social care in Wales is already on its knees. Over the past four years, 40 Welsh care homes have closed. If yet more are forced out of business due to increased costs, we will have even fewer social care spaces available. We know that the scenes of ambulances left queueing for hours outside our hospitals are the result of them being unable to discharge patients due to shortcomings in social care.

It is not just care homes that are affected, but primary care too. Our GPs, dentists and pharmacies will suffer from this tax rise. A local GP practice in my constituency told me that it will have to cut one day of practice nurse time and one day of GP time from April 2025. That is a direct result of the projected £30,000 increase in its national insurance bill, alongside an overall lack of funding for GPs. A second surgery is projected to have an increase in its NI bill greater than £100,000 in April 2025. Both are clear that without an exemption for health and social care providers, the NHS in Wales could face collapse. It already has the worst outcomes of any nation across the United Kingdom.

Charities and local authorities will suffer too from this decision. In my constituency, the chief executive officer of Powys Association of Voluntary Organisations has stated that the national insurance increase will

“place considerable financial pressure on voluntary sector organisations, many of whom are crucial partners in delivering essential services.”

That is the reality of the decision taken by the Government to use such a blunt tool to try to fix the nation’s finances. Many of my constituents are asking why Labour has chosen to go after the small businesses, charities, and health and social care providers rather than target the big banks, the oil and gas giants, or the social media giants. I urge the Government to reconsider their decision to raise income in this manner and to make exemptions for the health and social care sectors as well as for charities.

[Sammy Wilson]

The outcome of the debate is of course inevitable: we know that when we go through the Lobby, we will be smashed by the overwhelming strength on the Government side, not because their arguments are strong but because of the parliamentary arithmetic. I suspect that even the hon. Member for Walthamstow (Ms Creasy), who indicated in her speech that this measure will hit especially labour-intensive services that employ low-paid people and are vital to the smooth running of the economy, will walk through the Lobby with the Government. Some people might say, “Is that not just the politics of despair?” It is important that the arguments made are at least challenged, despite the fact that, because of the parliamentary arithmetic, it may not come to anything.

I do not actually have a political point to score here, because the DUP will never be the alternative Government in this place—though the country is the worse for it. I therefore hope that all the predictions made here today and by independent bodies that have looked at the impact of the Budget are wrong. I hope that we do not find that small employers have to go out of business, that recruitment goes down, that the real wages of those who are employed—especially at the lower end of the wage spectrum—are cut, and that the services that are so vital to the health service are impacted on. I hope that all those things do not happen. I hope that economic growth is not impacted by it, but all the economic evidence, the economic logic and the forecasts made indicate that the arguments made against this measure by Opposition Members are correct.

[Dan Tomlinson]

My understanding is that the Office for Budget Responsibility says that growth will be higher in the short term, broadly unchanged over five years and higher in the long term.

[Sammy Wilson]

We have seen over the last five months that growth has already been impacted. Of course, the OBR has indicated that in two and three years’ time, growth will be impacted negatively as well. I do not think that one can hide behind those arguments. As I said, I hope that I am wrong, but I suspect that all the economic logic on the impact of this measure and what we are already hearing from employers indicate that that is not the case.

[Jim Shannon (Strangford) (DUP)]

The reality is that those who own businesses in my constituency tell me that they will have to look at reducing wages and reducing numbers. Because of the Government’s policy, those working in doctors’ surgeries will have to look at a reduction in numbers as well. Whether Government Members like it or not, this measure will impact on small and medium-sized businesses and on GP surgeries. That is the reality. The Government are to blame for a recession—there really is talk about it. If a recession comes, the Labour party will be responsible.

[Sammy Wilson]

I thank my hon. Friend for his short speech to back up the points I have been making.

Let me look at some of the arguments presented today. The first is that the Bill will help to fix the NHS. I will not go into the arguments already made, but Members have made it clear that the NHS depends on primary services and, once people have gone through hospital, being able to discharge them into the community. The businesses that provide those services will be impacted by these tax changes. I am sure that there is not a Member here who does not already see that hospital beds are being blocked because there is insufficient capacity. People go into hospital and get mended but still need some respite before they go home, but the NHS cannot find places for them. If that is true now, then the situation will be even worse once these tax increases impact those businesses.

A&E is inundated with people who cannot get GP appointments. If the Government hit GPs, as has been outlined eloquently today, those services will be blocked and not available. Where do people go? They go to A&E. The Bill is meant to help the NHS, yet all the evidence from the people who support it and are part of the supply line say otherwise.

The Minister previously indicated that the people whose services are commissioned from the NHS can renegotiate those services and the payments for them. The very fact that the NHS is in difficulty and is having to be exempt from these national insurance changes is an indication that when they go with the bowl, they will be told that the cupboard is bare and no support will be given.

The second argument made today is that we need these changes to restore trust in politics, even though it was promised that working people would not be impacted. When evidence was given to the Treasury Committee, what did the representative from the Institute for Fiscal Studies say? They said that these changes will affect every working person. We cannot hide behind the argument that it is being done for the good of trust in politics. In fact, it will undermine trust in politics.

Another argument that was made is that we have no choice. The Government already made choices, even before this Budget. They chose to spend money even when they knew there was a black hole. They were spending the money that they want to raise from these national insurance contributions on wage increases, quangos and other things. Recently, they will not even tell us how much they are spending. The Energy Secretary went to COP and came back and told us of a £300 billion bill coming down the road for our sin of industrialising in the past, and he will not tell us how much we will have to pay. We gave away the Chagos islands, and we are going to pay for that but it is secret.

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

I am enjoying listening to the right hon. Member. He is an esteemed former Finance Minister in the Northern Ireland Executive, so I defer to his experience. He is setting out his opposition to the measures in the Bill. Now that he has referenced the black hole, can he tell us what he would do to address the legacy of the previous Government?

[Sammy Wilson]

This is a mentality—

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

Order. I, too, enjoy listening to the right hon. Gentleman, but it would really help if he could continue to speak to the Bill at hand, and not make broader comments.

[Sammy Wilson]

The mentality is that with these national insurance increases we are imposing more taxes on small businesses and on all the sectors I have spoken about. I would ask the hon. Gentleman what spending decreases could have been looked at—have any productivity impositions been put on the public sector, for example? That should be the answer, rather than asking, “Who should we tax to pay for the black hole?” Instead, we should be asking how we can reduce and reprioritise the things that we do; looking at some of the things the Government do at present that they do not need to do, or that they could do better, or that they could save money on.

I listened with bemusement to the hon. Member for Dartford (Jim Dickson), who was relieved by a survey in The Guardian in which more than 50% of those surveyed were quite happy with this tax. If there are so many Guardian readers happy to pay more taxes, I am sure the Scottish National party would love them all to move to Scotland, because it might solve some of the problems they have. These are the kinds of strained arguments that we have had from Government Members.

They know the impacts the Bill will have. I am sure they are having the same conversations with their constituents as I have had with the people who have spoken to me in my constituency office—the small businesses, those in the hospitality industry, the GPs and those in the care sector and the charitable sector, who have come to me and told me the impact it will have on their organisation. I do not believe we can run away from this, despite what will happen when we vote later today.

I do not share the optimism of the right hon. Member for Beverley and Holderness (Graham Stuart) that somehow little cabals will form on the Government Benches—that they will all start whispering, and maybe 10 of them will go to see the Chief Whip, and then next week it will be 20, and then, by the time there are 50 of them going to see the Chief Whip, this will all change. I do not share that optimism. What I do hope, however, is that the predictions that have been made about the Bill will finally resonate with the Chancellor, and we will see a change in policy.

[Carla Lockhart]

In my constituency and that of my right hon. Friend, agrifood manufacturing is a big business base and a big sector. As he will know, many agrifood businesses are saying that these changes will increase their bill by £50,000, £60,000 or £100,000. On top of the death tax for family farms, that will absolutely decimate our agrifood sector. I urge the Government to pull back from this measure; otherwise, we will see the cornerstone of our economy destroyed.

[Sammy Wilson]

Of course, agrifood is another sector that I had not mentioned, along with hospitality, food processing, all the charitable sectors and some that are supporting the health industry—all are affected by it; they cannot escape it. I believe the impact will be far worse than what the Government are hoping for. Of course, as a result of the side effects of this measure, the revenue that is hoped for might not even be obtained.

[Adam Jogee]

For accuracy, I want to point out to the right hon. Gentleman that I am far more likely to be seen reading the Antrim Guardian than The Guardian.

[Sammy Wilson]

I am pleased to hear it. I certainly do not read The Guardian, and I certainly do not share the view, held by some of its readers, that we should pay more taxes.

In closing, the Government have a huge responsibility to tax wisely and to spend wisely, and I do not think they have got that equation right. In fact, they are spending recklessly in many areas, and taxing recklessly as well. That will impact on their long-term objectives, but it will also impact on the lives of our constituents day to day.

Finance Bill

Sammy Wilson Excerpts

Committee of the whole House
Tuesday 10th December 2024 Commons Chamber

[James Murray]

I believe that it is fair that the oil and gas industry makes a reasonable contribution to the energy transition. We need to ensure that during the transition from oil and gas, which will play a key role in our energy mix for years to come, the industry contributes to the new, clean energy of the future. The way to have a responsible, managed transition is to work with the industry and make sure that it makes a fair contribution, but to not shy away from making that transition at the scale and pace needed.

[Sammy Wilson (East Antrim) (DUP)]

Let me try to understand the Minister’s logic. First, he recognises that we will need oil and gas. Secondly, he is going to tax oil and gas companies. Thirdly, he is telling them that his Government are creating an environment in which there is no future for oil and gas, but he still expects them to invest. Where is the logic?

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[Harriet Cross]

I recognise that, which is why it is so important that we protect the jobs and the investment. The companies in our supply chain have the skills and expertise that will drive the transition, as will the investment that comes in, and that is why we need to keep them.

[Sammy Wilson]

The hon. Lady makes a good point about the mobility of investment in the oil and gas industry. Is it not ironic that, since we will need oil and gas, if we tax companies on production in the United Kingdom, they will simply produce elsewhere, other Governments will get the revenue from the tax on that production and we will pay more for imports?

[Harriet Cross]

Exactly. There must be a balance between production and demand—I will come to demand later. There is no point reducing our domestic production while our demand stays the same, because we will only fill the gap with oil and gas from abroad, which is produced with a higher carbon intensity in poorer working environments, where overseas jobs and investment will take precedence over investment at home. It makes no sense that while we are using oil and gas—the Minister himself confirmed that we will be for a while—we do not prioritise taking it from our own North sea domestic basins.

New clause 3 also asks for a review on capital expenditure and investment in the UK. In Scotland alone, oil and gas contributed £19 billion of gross standard volume. In the UK, it contributed £27 billion. A 2022 report by Experian showed that for every £1 million of investment by the oil and gas industry, 14 jobs and £2.1 million of GVA are added. This industry is blatantly a net benefit to the UK and the Exchequer, and one in which we should encourage investment and capital expenditure, not an environment where the returns do not justify the risk of investment.

As my hon. Friend the Member for Grantham and Bourne (Gareth Davies) said, the OBR’s own figures show that capital expenditure will fall by 26%, and therefore production of oil by 6.3% and gas by 9.2%, because of these changes. We must ask, can the UK afford this? Maybe those were the parameters that the Exchequer and the Treasury are looking for, if they see them as allowable. But if that is the case, what assessment has been made of the impact on the economy and jobs across the UK?

The OEUK has put the projected drop in production down to a rapid decline due to underinvestment over the decade. Under new clause 3, we can assess the impact of the changes to the EPL and head this off to begin with because, as I said, it is important that while we have demand, we have production. It has been confirmed that we will need oil and gas in the UK for years to come, but through the changes to the EPL in the Bill, in particular clauses 15 and 16, which increase the EPL by 3% and remove the investment allowances, the Government are choosing to make our homegrown domestic energy sector so uncompetitive that current investment falls away and future investment is no longer on the cards.

We cannot afford to lose investment because, as I said, it will drive the transition. It is so important that it is protected now, to help us bring the transition forward quickly and efficiently into the future. Clauses 15 to 18 were introduced without adequate consultation on the impact assessment. New clause 3 simply asks for proper scrutiny of their impact. If the Government are confident in their approach, why resist a responsible request for transparency? My Gordon and Buchan constituents, and people in Scotland working in the oil and gas sector and across the UK, deserve to understand how these changes will impact their livelihoods.

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[Sammy Wilson]

The Government have set a number of objectives that they wish to achieve over the next five years. Central to those objectives are growth, highly paid jobs, energy security, and increased investment. However, when I look at clauses 15 to 17, I ask myself, “Have the Government gone mad?” They are undermining the very objectives that they are seeking to achieve through their policy of taxation, a policy that I believe is driven more by green ideology and by prejudice against some high-earning companies than by any economic logic. The economic logic of these proposals, and indeed the predictions made by those who have fed in the data and the information about them, indicate that, at least in our major oil and energy industry, investment will go down, production will go down, and highly paid jobs will go down.

The hon. Member for Earley and Woodley (Yuan Yang) said that hers was the party that was interested in ordinary workers. As has already been pointed out, no Scottish Labour Members are taking part in the debate. I suggest that the 100,000 workers in Scotland who depend on the oil and gas industry feel abandoned today because there is no one here to defend them—although I have to say that if I were a Scottish Member I might not want to stick my head over the parapet, defend measures such as these, and then have to go back to my constituents to explain. I suspect that they will go through the Lobby and vote for those measures, but—[Interruption.] The hon. Member for Hamilton and Clyde Valley (Imogen Walker) is opening her arms and saying that she is from Scotland. I look forward to hearing her speak later in the debate in defence of these measures, which will cost jobs.

We have heard that those jobs will be replaced by highly paid, skilled jobs in the renewables industry, but there is little evidence of that so far. Indeed, if we look at the sources of the materials and the providers of, for instance, wind turbines, we see that the skilled jobs are not in Britain. We are making ourselves dependent on countries such as China which have control of the earth metals and valuable metals that are required to provide the necessary equipment for the renewables industry.

[Mr Snowden]

The right hon. Member has touched on an important point. Meeting the Government’s 2030 target and creating the green jobs to which he has referred will require two technologies that have not yet been tried and tested at scale, carbon capture and battery storage. Why would we gamble such an important 100,000-job industry in favour of technologies that have not even been tried and tested at scale?

[Sammy Wilson]

It is not just that they have not been tried and tested. There is also an acceptance—indeed, it is the Government’s own stated position—that even with those technologies, we will be reliant on, and will need, oil and gas not until 2030 and not even until 2040, but beyond 2050. If we do not extract as much oil and gas from our own resources here in the United Kingdom, where will we get it from? We will get it from abroad, which brings us to the issue of energy security.

The places where energy is likely to be produced will not be stable countries, countries that will always be favourable towards us, or countries that are ruled by rational rulers. It will come from countries where rulers are irrational, and take political decisions about who they do or do not trade with on a whim. The idea that we will rely on fossil fuels until well beyond 2050 but not produce them ourselves—in fact, we are going to discourage companies from producing them in the United Kingdom, even though we know that we have the resources—and somehow or other we will still guarantee security of supply, and security of energy, for our constituents is just madness.

[Wera Hobhouse]

I have a very simple question to ask the right hon. Gentleman: does he believe that climate change is happening and that we need to get to net zero by 2050, or does he believe it is all a hoax?

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[Sammy Wilson]

Only a fool would say that climate change is not happening. Climate change has occurred in all the time that the earth has been in existence. Of course it happens, and of course it is happening. The hon. Lady asks me a question to which I think anybody could give an easy answer. Yes, climate change is happening, but does that mean that we have identified all the sources of the change in our climate? Does it also mean that we should distort our economy, in such a way as she would suggest, to try to make changes to the world’s climate, especially given that other countries are not making any changes to their economy and are not following our lead? They are simply ignoring us and doing what they believe is best for their own economies.

The second point I want to make is that we are leaving ourselves open to a situation in which companies that we need to invest in energy production will not do so. The OBR has made that quite clear, but even if it had not made its predictions, economic logic should make us understand that if we take investment allowances away from people and tax them, they will have less money to invest.

The Minister makes a great point: by putting all these measures on the statute book, he creates certainty for the industry. He does create certainty, because anybody looking at the Bill knows for certain what the future entails: they are going to be taxed until the pips squeak, so they will look for other places to go and make their investment. He argues that putting out a tax plan somehow gives assurance to companies, but sometimes it confirms their prejudice that Britain will not be a place where they have a future, or where they wish to invest.

I turn to the third impact of these measures, building on a point made by the hon. Member for Earley and Woodley. The Government’s whole approach is to tax oil and gas companies, get money, and help working people by putting it into schools and so on. But the predictions are that we will not get more revenue, because if there is less production, there is less tax to be paid. If there is less tax to be paid, the Government have less revenue to invest in the things that hon. Members on both sides of the House would wish them to invest in. Where does that tax go? It will go to foreign countries, because that is where production will take place and where the oil companies will be taxed. They will get taxed where they make their profits. If they are not making any profits in the United Kingdom, they will not pay any revenue in the United Kingdom. They will take their production and tax revenue elsewhere.

There does not appear to be any economic logic to this proposal, other than that the oil companies are seen as bad so the Government have to tax them, even though they are taxed heavily already, and that the Government want to ensure that we have this transition to net zero, even though we know that we will still need the product that the oil companies produce for many decades into the future and we will be turning our back on that production in the United Kingdom.

If the Government are so sure that this cunning plan is going to work—I think Baldrick would have been embarrassed by this cunning plan, I have to say—they should not fear any examination of it. They should welcome it. In fact, maybe once the assessment is done, they will be able to point to red faces on the Opposition side of the House. If I were as certain as the Minister is that his plan was going to work, I would be saying, “Right, we’ll do the assessment and we’ll make you eat your words.” I suspect that the reason that new clause 2 will be rejected today is that the red faces and the eating of words are going to be on the Government’s side of the House. Unfortunately, the people who will suffer will be the hundreds of thousands of people facing rising fuel bills, the 100,000 workers who will face redundancies and an industry that we very much need in this country going into decline.

[Dave Doogan]

On a point of order, Madam Chair. The last but one speaker, the hon. Member for Earley and Woodley (Yuan Yang), called me out regarding my perfectly legitimate comment that there was not a single Scottish Labour MP in here. I chose my words carefully, taking part in this debate. I appreciate that there is a Labour Member here who, unless I am very much mistaken, is fulfilling the role of a Parliamentary Private Secretary and therefore will not be taking part in the debate. I ask your guidance, Madam Chair, on whether it is legitimate to call somebody out in a debate and not give them an opportunity to respond. I tried to intervene on the hon. Member for Earley and Woodley to correct the record, but she refused to give way. How can we correct the record to underline the fact that there is not a single Scottish Labour MP in here taking part in this debate on Scotland’s energy?

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 3rd December 2024 Commons Chamber

[James Murray]

My hon. Friend is right to highlight the importance to communities of having access to cash and banking services, which is why we have committed to rolling out more banking hubs across the country—100 by the end of this year and a total of 350 through our commitment. We want to work with local communities across the country to deliver that, so that all areas, like Ossett, can benefit from a local banking hub.

[Sammy Wilson (East Antrim) (DUP)]

The heavy burden of business rates and the national insurance contributions that the Government are going to impose on small businesses is taxing businesses to death. Does the Minister recognise that in doing so, he is going to cause unemployment, higher inflation and lower growth, and that we are heading for higher taxes in future because of the downward economic spiral?

[James Murray]

As the right hon. Gentleman will see in the National Insurance Contributions (Secondary Class 1 Contributions) Bill that we will be debating this afternoon, we have doubled the employment allowance to help small businesses to employ up to four people earning the national living wage without paying a penny in national insurance. That is dedicated support to help those small businesses, in the context of what, I admit, is a tough decision. If the right hon. Gentleman has a chance to contribute to the debate, he might say whether he supports the extra public services funding that comes from those difficult decisions.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Sammy Wilson Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[James Murray]

I thank my hon. Friend for her question, but eligibility for the employment allowance is not changing. It is the same as it was before, and we are maintaining that provision. On protecting small businesses and charities, the crucial thing for us is the doubling of the employment allowance. In individual cases, I would recommend that organisations get the right advice, but the eligibility criteria for the employment allowance will not change as a result of the Bill.

[Sammy Wilson (East Antrim) (DUP)]

Will the Minister give way?

[James Murray]

I will, one more time, and then I will make progress.

[Sammy Wilson]

Is not the fact of the matter, despite what the Chancellor has said, that businesses have been abandoned? There is no safety net for them. To use the words of the Chancellor,

“What we have done with the increase in employer national insurance is leave it to the business to work out”.

Businesses are bearing the brunt of this, and it is really too bad. As far as the Chancellor is concerned, they will have to grin and bear it.

[James Murray]

I am sorry, but there are tough decisions that we have to take, and there are difficult decisions that businesses will have to take. The only people to have abandoned businesses were the Conservatives when they were in government. They abandoned any pretence of economic stability, fiscal responsibility, and supporting businesses to invest and grow. That is the difference between the Opposition and the Government.

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[Sammy Wilson (East Antrim) (DUP)]

The Bill represents a major breach of the promises made by the Government when they stood for election. The previous speaker, the hon. Member for Chipping Barnet (Dan Tomlinson), was right: people should be cynical, and people are cynical about the way in which politics is sometimes conducted in this country. He talked about his amazement at the anger expressed from the Opposition Benches. I assure the House that, were the situation reversed—with the Conservative party on the Government Benches, introducing measures that the Office for Budget Responsibility, the IFS and everybody else said would hurt ordinary working people—Labour Members would be incandescent with rage.

That is the whole point. A promise was made: “We will not tax working people.” At the end of the day, when people have to pay for their goods, their shopping and so on, it really does not matter to them whether their income has been reduced as a result of direct taxation being taken out of their pay packets in the form of income tax, or whether it has been reduced indirectly by taking the money from their employer. In turn, as the IFS, the OBR and others have said, that will impact on real wages. As the IFS pointed out, it will especially impact the real wages of the lowest paid—that is the whole point. We can play with words, but the truth of the matter is that a tax increase has been imposed on employers, and the OBR says that in 76% of cases, the impact on wages will be felt by ordinary working people. That is a broken promise, no matter how we look at it.

The Government’s excuse has been that they will try to alleviate that impact. People have talked about different sectors so far in the debate, and I am not going to go through all of them, but let us just look at two examples. The first is small businesses. We are told that they can deal with the impact because they are geniuses. What will they do? They will increase productivity. Funnily enough, the public sector is to be protected—the Government are not looking for any increases in productivity there.

We are told that small businesses will find ways of decreasing their expenditure, but funnily enough, the Government are actually looking for ways of spending more money. They are spending £9 billion on a quango, Great British Energy. The Secretary of State for Energy Security and Net Zero came back from COP29 and told us that the Government were now committed to giving £300 billion away to foreign Governments for climate change, but he would not even tell us how much the Government were going to pay out to those Governments. For the nationalisation of the railways, again, there is an open cheque book. We are told that there are no alternatives. Businesses have to find alternatives, but the Government happily spend the revenue that they are taking.

Then, of course, the social care sector and GPs are told, “Go to the NHS and renegotiate your contract.” The NHS does not have to pay the national insurance rise itself—it is exempt. Do we really believe that when the GPs and the social care sector go to the NHS and say, “We want to renegotiate our contracts,” the NHS is going to say, “Oh, you need money for national insurance? There you are—take it.” All the excuses have been given today: we are told that there is no money, but it can be spent on other things. We are told that the social care sector and GPs can renegotiate, and that the private sector will be inventive. Let us see some invention by the Government, rather than broken promises.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 7th May 2024 Commons Chamber

[Jeremy Hunt]

My hon. Friend and I have talked about this issue on many occasions. She will know that high-factor sunscreen is on NHS prescription for certain conditions and is VAT-free when dispensed by a chemist. With my Chancellor hat on, I should say that we have had £50 billion of requests for VAT relief since Brexit. It is great to have the freedom to make those changes, but we have to be honest about the trade-offs. In particular, we must ensure that if we do apply reliefs, the benefits are fed through to consumers.

[Sammy Wilson (East Antrim) (DUP)]

This weekend, I spoke to a constituent who has invested heavily in a restaurant in my constituency over the last 15 years. He was in desperation because his business, like two other businesses that have already closed in the town, is being crushed by VAT, business rates and increases in corporate taxes. He finds that he can no longer sustain a business that has become the love of his life. Does the Chancellor realise that the tax burden he is imposing on small and medium-sized businesses is crushing this economy?

[Jeremy Hunt]

We are doing everything we can to support small businesses. Businesses like the one that the right hon. Gentleman mentions have received, for two years in a row, a 75% discount on their business rates. That is a massive leg up for businesses recovering from the pandemic. We have also made sure that any increases in corporation tax apply only to larger businesses. There is only one major party in British politics that wants to bring down the tax burden for businesses, and it is the Conservative party.

Finance (No. 2) Bill

Sammy Wilson Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Nigel Huddleston]

I thank the hon. Gentleman for his positive welcome of today’s news about inflation. He is right that it is welcome but we always need to keep an eye on it. I join him in thanking our farmers, who have played a pivotal role in helping food prices to come down. The supermarkets have a role in that area as well. He raises some points that are slightly outside the remit of the Bill, but I assure him I will continue to have conversations with ministerial colleagues and others, and I am sure he will as well. We always listen to the important farming community in this country, who do so much to create employment and provide us with food.

The Bill covers 24 different measures. I will not go through every single one of them, but want to focus on a few key areas. First, I turn to how the Bill rewards work. We all recognise the simple truth that work should pay. We understand how hard many people up and down the country work. This Government want to ensure they are recognised for that because that approach not only benefits individuals and families, but overall growth and the economy. As I mentioned, that is why we have already taken two Bills to cut national insurance through Parliament, but this Bill goes further.

A key measure in the Bill is to increase the high-income child benefit charge threshold from £50,000 to £60,000. In addition, the rate of the charge will be halved, so that individuals continue to receive child benefit until one household member earns £80,000, taking 170,000 families out of paying this tax charge. These changes are a well-earned reward for working families up and down the country and put pounds back into parents’ pockets.

[Sammy Wilson (East Antrim) (DUP)]

While the changes in the child benefit allowances are important, especially helping parents who want to get into work and have their children looked after, does the Minister accept that one of the biggest impacts of the Budget on people who are working is the way in which they are being dragged into higher tax rates because thresholds have not been raised? That is having a huge disincentive effect on working families.

[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.

--- Later in debate ---

[Sammy Wilson]

The Minister is quite right to point out the dangers of Labour being in charge of finances and the impact that that is likely to have on tax, but does he have the humility to accept that tax is higher under this Government than it has been for decades?

[Nigel Huddleston]

I certainly have the humility to accept and recognise that. Taxes are higher out of the obvious and widely accepted necessity of paying for massive amounts of intervention because of the pandemic and in response to supporting families and businesses through the cost of living challenges. We make no apology for intervening to support lives and livelihoods to the extent that it was necessary. It was absolutely vital that we intervened because not doing so would have been a disaster for the UK economy. However, the general level of taxation, as the right hon. Gentleman is probably aware, is much lower in the UK than in many other countries that also had to significantly increase taxes and Government intervention out of necessity in response to the pandemic. We have much lower levels of taxation than Germany, France, Italy and many other countries. As I said, we had high levels of taxation out of necessity, but we are now in a position to start reducing those levels of taxation out of policy intent and choice, and that is exactly what we are doing.

To conclude, this Finance Bill absolutely rewards hard work, supports our vital industries, boosts the housing market and continues to create a fairer, simpler and more modern tax system. It delivers on the Government’s commitment to prioritise economic growth and will ensure a brighter future for our country. For those reasons, I commend it to the House.

--- 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.

HMRC Self-Assessment Helpline

Sammy Wilson Excerpts

Wednesday 20th March 2024 Commons Chamber

[Nigel Huddleston]

As I mentioned a few moments ago, there has been a trial closure of telephone services. The recently reported results show that the trial worked quite well. As we heard overnight and are hearing again in the Chamber today, the important challenge is that the confidence behind that has not been effectively communicated. The reassurances that I personally received on what will happen to help those who are not able to access online services—including the disabled, those without digital access and those with particularly complex cases—were not communicated. That is important to making sure that, as HMRC moves forward and policy is developed, we move at a pace with which people are comfortable.

[Sammy Wilson (East Antrim) (DUP)]

I hope that HMRC’s screeching U-turn is a result of the Minister’s action. If it is, I congratulate him on stepping in so quickly. Does he agree that, at a time when more and more people are being dragged into complex tax returns because of fiscal drag, when 1 million people had their calls to HMRC unanswered in January and when a record number of people are putting in their tax returns late because they cannot get information, HMRC should not have adopted such a policy? Will the Minister give us an assurance that this is not temporary and that whatever help income tax payers require to pay their tax will be made available?

[Nigel Huddleston]

I give the right hon. Gentleman an assurance on the latter point. As I have outlined several times today, I think we can all recognise that the move to digital, where appropriate, will relieve the burden on the people answering telephone calls and on some other services, allowing them to deliver precisely the end goal that he describes. Simplifying the tax system is a goal of Government policy. I gave an example of people on high incomes with relatively simple tax affairs—those who pay through PAYE, for example—and we are trying to remove as many of those people as possible from self-assessment. I completely understand the right hon. Gentleman’s points.

Loan Charge

Sammy Wilson Excerpts

Thursday 18th January 2024 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

I beg to move,

That this House is deeply concerned that HMRC has confirmed the suicides of 10 people facing the Loan Charge and that, despite the Morse Review, thousands face unaffordable demands, with the risk of further suicides; notes that HMRC has also confirmed 24 cases of serious harm, including 13 suicide attempts; believes that many people who used schemes were victims of mis-selling, and that in other cases employers and agencies pushed people into using them, yet HMRC is demanding all disputed tax from scheme users, not from those who recommended, promoted and operated the schemes; further notes that section 44 of the Income Tax (Earnings and Pensions) Act 2003 deems agency workers to be taxable as employees of those agencies and that HMRC should have collected tax from agencies at the time; criticises HMRC transferring the liability to individuals despite its own failures; observes that HMRC is pursuing open enquiries for schemes before 2011 despite the Morse Review; also notes that HMRC is seeking additional payments from those who settled; further believes that the Morse Review was limited and not genuinely independent of HM Treasury and HMRC; highlights the resolution proposed by tax professionals; calls on the Government to work with all parties to find a fair resolution and for a full independent investigation, including into the conduct of HMRC; and believes that taxpayer rights must be enshrined in law and enquiries closed after four years if HMRC fails to act.

Before we start the debate, on behalf of my party, I pass on our condolences to the family of Tony Lloyd. He served for a short time as the shadow Minister for Northern Ireland. I always found him to be very courteous and well informed, and he wanted to be well informed. He asked the right questions and was always prepared to engage, even though he often did not agree with some of the stands we took. He was always happy to engage with all the parties in Northern Ireland, and we pass on our condolences to his family.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am slightly concerned that there is something wrong with the sound. Let us start again.

[Sammy Wilson]

Thank you, Madam Deputy Speaker. I hope that the point I was making about Tony Lloyd was picked up. I want to pass on the condolences of our party to his family, and I pay tribute to the work he did as shadow Minister for Northern Ireland.

I thank the Backbench Business Committee for granting the debate. It is a timely debate and I know that the many thousands of people across the United Kingdom who have been affected by the loan charge in a very detrimental way will be glad that it is being considered in this House. Over the past two weeks, we have been looking at the dramatic fallout of the Horizon scandal at the Post Office and, quite rightly, we have been focusing on what belatedly can be done to repay and to deal with that great injustice. I say to the House—I do not think that I am being overdramatic when I say this—that we are looking at another Horizon scandal, and the parallels are frightening.

First, because of the actions of a Government Department, 10 people in the United Kingdom have committed suicide and many others have attempted to take their own lives because of the pressure they were put under by officials and by statute passed by this Parliament. We have heard time and again in evidence to the loan charge and taxpayer fairness all-party parliamentary group of the disruption and disaster this has caused in many families.

Secondly, despite the fact that alarm bells should be ringing in the Treasury, no action has been taken. Indeed, some Ministers have even refused to meet the group. Others have simply put out the party line and regurgitated the excuses of His Majesty’s Revenue and Customs for what is happening.

[Wera Hobhouse (Bath) (LD)]

Does the right hon. Gentleman agree that it seems to be the case yet again that people acting in good faith are being prosecuted and pursued, whereas the people who absolutely knew what they were doing are getting away scot-free?

[Sammy Wilson]

That is a point I want to come to.

We are seeing that once again Ministers are turning a blind eye, and these lessons should be learned. Apart from two examples of Ministers that I can think of, one of whom—a former Minister—is present, Ministers turned a blind eye for years. We then had the result, but it was not until an ITV programme brought this matter to the nation as a whole that action was taken.

We have had attempts by HMRC to justify what it has been doing. In the past, postmasters and postmistresses who had unblemished records for years were accused of being thieves. We are now being told that the people who HMRC is chasing today are—to use its words—“serial tax evaders”. Minister, I have to say that when I read the letter that you—

[Madam Deputy Speaker]

Order. The right hon. Gentleman knows that he does not address the Minister directly, but through the Chair.

[Sammy Wilson]

When I read the letter that the Minister sent to the joint chairs of the all-party group, he started by once again reminding us that

“As you are aware, disguised remuneration schemes are contrived tax avoidance arrangements that seek to avoid Income Tax and National Insurance contributions”.

It is almost like a warning: “Don’t be taking up these cases, because these are bad people that you are talking about.” That is exactly parallel to what we found with the Horizon scandal.

[Chris Stephens (Glasgow South West) (SNP)]

I agree with how the right hon. Gentleman has introduced the debate. He mentioned the scale of how HMRC is going after people caught up with the loan charge. Is that not in stark contrast with how multinational companies are entering into sweetheart deals with HMRC, such as Google and Vodafone?

[Sammy Wilson]

Indeed, it is, and I will come to the issue of HMRC chasing the individuals, rather than the promoters.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Will the right hon. Member give way?

--- Later in debate ---

[Sammy Wilson]

Let me just make this point: it seems that HMRC is going after those whom it regards as easy targets. The promoters of the scheme have not paid one penny, despite the fact that they have made hundreds of millions of pounds from the schemes, have mis-sold them and have disappeared when there is any attempt to get at them. The promoters are not being pursued and, indeed, HMRC has admitted that it does not intend to chase after the promoters, and yet individuals are being harassed to the point where many of them have taken their own lives.

[Mr Dhesi]

I congratulate the right hon. Member on having secured today’s debate, especially given that at least 10 people have sadly committed suicide. It is of course essential that disguised remuneration schemes are dealt with fairly and effectively, but why does he think the Government and HMRC have not actively pursued the architects and promoters of the scheme, rather than the victims who have been led into the schemes?

[Sammy Wilson]

The answer is easy: the victims are easy targets. They are the ones who are easy to chase. The promoters of the schemes have all kinds of means of defence. Many disappeared when they realised that they may well be pursued. This is the baffling thing, and maybe the Minister can explain it: if these schemes are designed as contrived ways of avoiding tax, why is HMRC not pursuing even some of the new promoters who are establishing themselves today and who will have disappeared by tomorrow, once it is seen that their schemes are being challenged?

[Sir Robert Buckland (South Swindon) (Con)]

I am grateful to the right hon. Gentleman for his courtesy on this occasion. I share his comments about Sir Tony Lloyd, who was a member of the Northern Ireland Affairs Committee, which I chair.

The right hon. Gentleman makes an important point about the regulation of promoters. Where is the regulation of those individuals? This is an ungoverned space. Surely, as they are trying to sell financial service products, they should at least come under the control of the Financial Conduct Authority. We have to not just focus on what has happened in the past, but look at what is happening now, where innocent people are being exploited.

[Sammy Wilson]

I intend to come on to that point.

The parallels, as I say, are frightening. I ask myself this question and the Minister should be asking it of himself, too. In one, two, four, five or 10 years’ time, will we see the same embarrassment and see Ministers who parroted the Department’s line being asked the question, “Why did you not raise the alarm at the time? Why were the explanations not challenged, and why were the calls for help not heeded?” That should be a salutary warning to Ministers.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is very unusual that I agree with every word the right hon. Gentleman says—[Interruption.] I am being generous. The simple truth is that HMRC failed to police this issue. Many people made HMRC aware of their involvement in the schemes and it took HMRC years to get back to them or even to look into the issue. That is one of the real crimes here.

--- Later in debate ---

[Sammy Wilson]

I am glad the hon. Gentleman agrees with everything I have said today. I think he has even dressed to show that agreement, with his red, white and blue outfit, and I appreciate that very much. Maybe he has become a Unionist as well—even for a day, that would be something of a miracle.

Let us look at the role of HMRC and the approach it has taken. It has been rightly pointed out that there should have been much more supervision within HMRC of what was going on. HMRC is now saying that it believes that many of the people who used payroll loan schemes should have been paying pay-as-you-earn, but at the time HMRC was not challenging the schemes, and the promoters were able to say they were legitimate. For years, people were acting in the belief that they were legitimate and were no risk. And here is the ultimate irony: HMRC employed people on contracts to do work for it, knowing that those people were being paid in that way, and never challenged it. That being the case, we have to ask what the level of supervision was, or whether HMRC changed its mind and then, having done so, decided to go after the individuals who had undertaken those schemes.

Some people will argue, “Well, it’s their own fault. After all, they knew that when they went into one of these schemes their tax liability may have been reduced. If people did that, they took that risk.” The fact is that many people did not volunteer to go into those schemes. Many people were forced into them. Some people were put into those schemes and did not even know they were in them. As far as they were concerned, they were employed by a contractor and their tax was being deducted, and they only found out later on that that was not the case.

By the way, this was not rich people employing fancy accountants to tell them how to avoid their tax. Many of the people caught up in the schemes were ordinary workers—nurses, teachers, cleaners—and some were people who wanted to set up a company and, because of the flaws in IR35, this was the only way of dealing with their tax affairs. People did not always volunteer to go into the schemes. One of the ways we discovered that HMRC was involved in this was that one lady came to us and said, “I was employed by an IT consultancy, the contractor was working for HMRC and the only way I could get the job was to be paid through one of these schemes. I did not particularly want to, but I wanted the work, so I had to enter into the scheme.”

HMRC, apparently, was quite happy for that contractor to pay its workers in that manner. In many cases, if people wanted to work, they were forced into these kinds of schemes. For years, although it was quite clear that there was an employer-employee relationship and they were under the direction and supervision of a company, they were treated as if they were separate stand-alone employees or individual self-employed people who could pay tax in that way.

The result was, of course, that when it was decided that the schemes were not tax compliant and there were years and years of back tax, Ministers were persuaded to introduce the loan charge in the Finance Act 2017. It was very convenient for HMRC to have that arrangement in place, because using the loan charge enabled it to decide what tax an individual was liable for and people could not challenge it in the normal way tax disputes can be dealt with, through either tribunals or courts. That was ruled out for them. In many instances, HMRC did not even have to explain how the tax bill was reached. If people do not have any redress to a court or tribunal, they really have no chance of negotiating whether or not the tax they have been deemed liable for is a liability and a correct liability.

Added to that was the fact that many employers saw the schemes as an advantage, because they could employ people without paying employment taxes or having to deal with pensions or holiday pay. That is why many employers forced individuals to be paid in that way. Those who argue, “Look, these people tried to avoid paying tax, so slap it up them now, they have reaped the consequences and they should just grin and bear it.”. should bear in mind that thousands of people are affected by this because they were impotent to stop that method of payment being used and were told by the promoters that it was all compliant and that there was no risk. In fact, 93% of those in the schemes were assured there was no risk and that they were compliant.

Indeed, they probably were compliant until, in later years, HMRC decided they were not compliant. People were left with tax investigations going back to 2010, which have resulted in many of them finding it impossible to pay. I want to mention a couple of case studies, because the confusion in HMRC made it very difficult for people to settle. HMRC did not seem to have the capacity to tell people. In one particular case, an individual was told after six years, “You owe £91,000.” He wanted to settle rather than be put in the loan charge. He was told, despite the fact that that was not in the criteria, “We don’t believe you can afford to pay £91,000 on the terms you have given.” So no settlement was granted and he was put in the loan charge, and the man who could not afford to pay £91,000 was then hit with a bill of £124,000. He could not afford to pay £91,000 in a settlement, but he was pushed into a loan charge where he had to pay £124,000.

We have the back charges, tax years that people thought were closed have been reopened, the confusion and some people now have to pay more in tax than they actually earned. HMRC does estimates; I think one person was told, when an explanation was sought of why they owed so much, that it was because everybody else paid that amount—and of course there is no redress.

[Ashley Dalton (West Lancashire) (Lab)]

I congratulate the right hon. Gentleman on bringing such an important debate to the Chamber. I have been contacted by several constituents who have described themselves as victims of this situation. Does he agree that those people who are being asked to pay what my constituents describe as incomprehensible amounts of money, while their employers and the people who provided those schemes are not being pursued for one penny, are victims, but are assumed to be criminals? Does he agree that they must be treated as victims and that this must be covered by a truly independent inquiry?

[Sammy Wilson]

That brings me to the very last point— I promise it is my last, Madam Deputy Speaker. I will simply list the points and other people can take them up and expand them later on. There are a number of issues the Minister must consider. First, while I have no evidence of this, we have been told that HMRC officials, just as Post Office officials were, are on commission for the money that they bring in through the loan charge. The Minister must confirm whether that is the case, because if so, it would act as a huge incentive for them to pursue individuals relentlessly.

Secondly, I trust that the Minister, in his new position, will challenge the Department’s lines on this matter. We need a greater challenge than we have had so far. Thirdly, I believe that the loan charge needs to be repealed because it is not fit for purpose and is having a detrimental effect. Fourthly, the employers and promoters must be pursued. Under the law, they were responsible for collecting tax from the employees. That is the basis on which tax demands are now being made of people—that they were employees, not self-employed.

Fifthly, of course we recognise that the Government have to collect tax when it is due, but the current method of pursuing this will not bring in tax revenue because people are going bankrupt. A group of professionals has proposed that the Government could claim back an affordable proportion of the tax that is owed. They would get at least some tax revenue out of it while stopping this relentless pursuit of individuals. In the longer run, I think we need a Bill of rights for taxpayers, and for tax fairness to be built into legislation, but that is a matter for a longer debate.

There are people who are suffering today because they are being battered by the cosh that HMRC officials are using on them to extract money that they do not have and which many of them do not believe they owe. I ask the Minister to grasp this nettle and ensure that we do not have another Horizon scandal.

[Madam Deputy Speaker (Dame Rosie Winterton)]

As colleagues can see, this is a very well-subscribed debate, with another debate to follow. In order to give equal time to Back Benchers throughout the afternoon, my advice—I would rather not put a time limit on—is that colleagues stick to about seven minutes. I am sure that Greg Smith will lead the way.

--- Later in debate ---

[Nigel Huddleston]

That is another important point to which I will come in a moment. I will now make some progress before I take further interventions, because I fear that otherwise I may ruin my responses.

As I said, the way in which we recover tax owed is important, including the interactions that individuals have with key bodies such as HMRC. The Government recognise that there were areas where the impact of the original loan charge was disproportionate to its aims. We have listened to concerns raised by hon. Members in the years since the loan charge was announced, and I have had conversations with HMRC about how it has, for example, endeavoured to improve the tone of communication with impacted individuals.

Changes in approach were also made following Lord Morse’s review, about which I have heard many comments today. Many people may not be aware, but in September 2019, the Government asked the former Comptroller and Auditor General of the National Audit Office, Lord Morse, to lead an independent review of the loan charge policy and its implementation. Lord Morse had full discretion over how the review was run, who he consulted and the recommendations made. That consultation included the APPG and many of the people in the Chamber today.

Following the review, Lord Morse recommended notable changes to the policy, and the Government accepted 19 of his 20 recommendations. Those changes benefit about 30,000 people and meant that the loan charge would apply only to outstanding loans made on or after 9 December 2010, rather than April 1999. That was the date when the Government announced anti-avoidance legislation that put beyond all doubt that the schemes were taxable—a very important date. The loan charge would also not apply to outstanding loans made in any tax years before 6 April 2016 where a reasonable disclosure of the use of a tax avoidance scheme was made to HMRC, but HMRC did not take action—again, some have made that point today. Taxpayers were also given additional flexibility in the way they pay in line with their individual circumstances, but Lord Morse was clear that the loan charge was necessary and in the public interest, and should remain in force.

[Sammy Wilson]

Does the Minister accept that HMRC officials helped to service the Morse review, and restricted its grounds and parameters? The original of that review has not been disclosed, and we do not know how it was changed in the meantime. There are great doubts about whether or not the Morse review was ever an independent review, and ever came to conclusions that would have dealt with the issues and the unfairness we have been discussing today.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before the Minister replies, I do want to say that I have given him more time than would normally be allocated for a Backbench Business debate. Several colleagues have tried to intervene, but do be aware that we have another important debate to follow. I am sure the Minister will be cognisant of that fact.

--- Later in debate ---

[Sammy Wilson]

Since time is short, I will not go through all the speeches, but I thank Members for taking part and for the powerful speeches they have made. There are two points that I will take away. First, there is the frustration, fear and powerlessness that many of our constituents feel in the face of oppressive Government bureaucracy, and the pursuit of those individuals by people who are not and currently cannot properly be held to account. Secondly, to repeat what the right hon. Member for Hayes and Harlington (John McDonnell) said, I hope that we will not be sitting here in four years’ time finding out that, although we had this debate, we heard platitudes from the Minister and there was no action. I do not want to take part in a debate similar to the one we have taken part in today. I think it is the duty of the Minister and the duty of Parliament to hold those who have this power to account and to make sure that it does not continue to be abused.

Question put and agreed to.

Resolved,

That this House is deeply concerned that HMRC has confirmed the suicides of 10 people facing the Loan Charge and that, despite the Morse Review, thousands face unaffordable demands, with the risk of further suicides; notes that HMRC has also confirmed 24 cases of serious harm, including 13 suicide attempts; believes that many people who used schemes were victims of mis-selling, and that in other cases employers and agencies pushed people into using them, yet HMRC is demanding all disputed tax from scheme users, not from those who recommended, promoted and operated the schemes; further notes that section 44 of the Income Tax (Earnings and Pensions) Act 2003 deems agency workers to be taxable as employees of those agencies and that HMRC should have collected tax from agencies at the time; criticises HMRC transferring the liability to individuals despite its own failures; observes that HMRC is pursuing open enquiries for schemes before 2011 despite the Morse Review; also notes that HMRC is seeking additional payments from those who settled; further believes that the Morse Review was limited and not genuinely independent of HM Treasury and HMRC; highlights the resolution proposed by tax professionals; calls on the Government to work with all parties to find a fair resolution and for a full independent investigation, including into the conduct of HMRC; and believes that taxpayer rights must be enshrined in law and enquiries closed after four years if HMRC fails to act.

Autumn Statement Resolutions

Sammy Wilson Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

Let me say first of all that I welcome the Chancellor’s statement. It is good to see that, at long last, the light has come on and he has realised that, “You cannot tax your way to growth,” and that some of the wrong policies that were followed by him, and by the Prime Minister when he was in that post, are now being reversed.

All the economic evidence shows that the more you tax people the less growth you will have, and the more you tax businesses the less money you will have to invest, and therefore you will have low levels of growth. I know that a lot of people have spent a lot of time criticising the Chancellor today, but I am pleased that a sinner has come to repentance. There should be great rejoicing about the fact that this Damascus road experience in the Treasury is now going to bear some fruit in our country. The models contained in many studies conducted by, for instance, the Cardiff macroeconomics research group, the Centre for Brexit Policy, and the Growth Foundation have already shown that a low-tax economy can benefit in terms of growth, which then helps to increase tax revenues, reduce debt and finance public services. It is a virtuous circle.

There are some measures that I particularly welcome, including some of the tax changes. It is good to see a reduction in national insurance contributions, especially at a time when the OBR is forecasting that GDP growth per head will rise by only 0.7% and inflation will rise by 5.1%. While those figures show that the cost of living problems will continue for ordinary individuals, it is good for them to have some of their own money to keep or spend, enabling them to pay those higher prices. I also welcome the corporation tax allowance. Again, this is targeted not just to give companies profits to distribute to shareholders but, more importantly, to incentivise them to invest. That targeted way of reducing corporation tax is important.

I also welcome the business rates commitment, although I hope that the Secretary of State for Northern Ireland has paid close attention to what has been said about the importance of keeping business rates low, because one of the suggestions being made around Northern Ireland at present is that, as he has some responsibility for bringing budgets forward due to the Executive not being in operation, business rates might be one of the areas where he could save some money. I hope we do not have a policy of the Government in London saying that reducing business rates is important while the Minister in Northern Ireland says, “Oh well, it’s a different situation here.”

I would point out, however, that despite all these tax cuts, there are tax increases coming down the way for businesses. On green taxes, the Government have made much of wanting to try to reduce the cost of their net zero policies. The OBR forecasts suggest that environmental taxes are going to soar to £20 billion, that emissions trading taxes will go up by 50% in the next year and that environmental levies will be up 100% by 2026. That is a burden on businesses, and of course the planning policies that are being introduced are simply to allow for the expensive roll-out of the grid due to net zero policies.

I also want to mention the fact that there are Barnett consequentials in this statement for Scotland, Northern Ireland and Wales. The Barnett consequentials for Northern Ireland are meant to be about £185 million, but none of that is likely to be spent in Northern Ireland even though these measures were designed to promote growth and help to expand the economy. They will be taken back. We know for certain that some will be taken back by the Treasury to repay the overspend that occurred as a result of the incompetence of the Sinn Féin Finance Minister who oversaw a budget overspend in Northern Ireland. This is happening in a week when Northern Ireland has been denied money from the levelling-up fund as well.

I hope that the Chancellor will listen to the arguments from Northern Ireland and from the Fiscal Council that, despite the claims being made, Northern Ireland is actually underfunded in relation to Scotland and Wales, because need is not taken into account. On top of that, when money is allocated in statements such as these, it is not even made available in Northern Ireland. The Government cannot ignore this issue if they want to bring up the level of growth in Northern Ireland.

I welcome the fact that the Government are going to encourage people to get into work. That should not be regarded as some kind of bullying tactic. It should be seen as important for those people who are unemployed. Whatever their reason for being unemployed, they will be encouraged to get back into work and make a contribution, and of course raise their own self-esteem as well.

We also welcome the triple lock on pensions. When we had some influence in this House, we made it a condition of working with the Government that the triple lock be maintained, and I am glad that that has continued to be the case, especially at a time when the cost of living is increasing so much. Pensioners on fixed incomes require the support that the triple lock is providing.

I welcome the fact that the Government are now turning around, and I look forward to more tax reductions. As other Members have pointed out, people have been dragged into a higher tax rate as their wages have gone up, and some find that it is no longer worth their while working. Let us take a single parent on a £50,000 income who needs to pay for childcare if they want to go out to work. Some find that, by the time they have paid their childcare costs, their marginal rate of taxation is nearly 68%. If we are looking for a supply-side measure, there is one. We could release a lot of skilled people into the workforce by ensuring that their childcare costs do not prohibit them from working.

Only time will tell, but I hope that the measures taken today will have the impact that the Government hope they will have, because that will be good for the economy, for individuals and for public services.

Autumn Statement

Sammy Wilson Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

I reassure my hon. Friend that we want to do everything possible to make our tourism and retail industry competitive. We want to encourage international visitors. We changed policy on this issue a year ago because it cost around £2.5 billion a year and we did not think we could afford to continue it, but we are looking again at the numbers in the light of the most recent data and we can see what has happened to comparative shops in Paris and Milan. We will review this to see if it is still that expensive, and I hope that it is not.

[Sammy Wilson (East Antrim) (DUP)]

Many of the measures in the statement today will have spending consequences that will apply to England and Wales. I welcome many of them, because they are growth measures, such as getting the long-term unemployed and long-term sick into work, helping the creative industries and supporting business rates. Will the Chancellor confirm that those measures will be subject to Barnett consequential payments, and if they are, will the freeze on Barnett consequential payments to Northern Ireland apply?