National Insurance Contributions Bill

Sarah Olney Excerpts

2nd reading
Monday 14th June 2021 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The Bill seeks to achieve a range of aims, but like most things that the Government are currently attempting, it misses the opportunity to achieve a great deal more.

The Liberal Democrats welcome the provisions that will enable a 0% rate of national insurance contributions to be paid by employers of former members of the armed forces. Glass Door, a charity in my constituency that provides shelters and outreach for homeless people and rough sleepers, has described to me how past trauma is a key risk factor in becoming homeless and how the two groups most at risk are survivors of childhood sexual abuse and armed forces veterans. Like many Members across the House, I am deeply concerned about how we care for our servicemen and women, and I support all measures to assist them in their post-service life. The Liberal Democrats unequivocally welcome an incentive for businesses to bring them into new employment.

We also welcome the straightening out of any unintended tax consequences that have arisen from covid payments in the past 18 months. The British public have been extraordinary in their response to the crisis and have willingly played their part in staying at home to protect the NHS and save lives. For many individuals, that will have had a direct financial consequence, and it is absolutely right that any payments made to mitigate such financial consequences should be free from tax and national insurance. There is no doubt that people would willingly have gone out and earned national insurance contribution income if the Government had not asked them not to. It is only fitting that their financial sacrifices be properly recognised in our tax and benefits system.

I support the comments made by the hon. Member for Thirsk and Malton (Kevin Hollinrake) about tax avoidance schemes and the extent to which they are being promoted. I support measures to clamp down on such schemes, particularly where vulnerable taxpayers are being targeted and potentially lured, dare I say it, into investing in schemes that would bring them into default in their tax affairs; we have seen that happening in relation to the loan charge, as he mentioned. I would like to see the Government doing more to clamp down on these schemes, and I welcome any measures to do so.

The Bill also makes provision for 0% national insurance contributions for employers in freeports. The Government have made a great deal of their plans for freeports; they appear to have great hopes for their abilities to bring economic revival to our country following Brexit and the pandemic. The extent to which that looks likely to be achieved remains uncertain. The Government have not yet published an assessment of the likely impact of this national insurance reduction, which leads me to believe that that uncertainty is continuing. If the Government are unable to say how much the Treasury will lose from the cut in national insurance, one can conclude only that they do not yet have any confidence in how much they expect freeports to boost employment.

What is certain is that the Government have not yet brought forward any other plans to boost economic growth following Brexit and the pandemic. I regret that they are missing the opportunity to boost growth in other sectors and in regions that are not lucky enough to benefit from a freeport.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

The hon. Lady says that the Government do not have any additional plans for growth. We launched a plan for growth in the Budget with three pillars—infrastructure, innovation and skills—to tackle net zero post covid and take our opportunities for global Britain on leaving the EU, so she is quite wrong to say that we have not done anything to plan for growth.

[Sarah Olney]

I very much welcome the Exchequer Secretary’s intervention. I am happy to stand corrected, and I very much look forward to seeing the impacts of those plans right across the nation, because as far as I am concerned, the significant weakness of the plan for freeports is that it cherry-picks areas for investment while ignoring the needs of many other communities across the country. That is why I say that the Bill is a missed opportunity: because to target the national insurance cut just at areas that will have a freeport is to ignore the impact that such a cut could have across many sectors that could provide fantastic opportunities for employment as we come out of the pandemic. There is a very real danger that freeports will divert business activity from areas outside freeports, and that this measure will hit the public finances without any subsequent increase in economic activity.

I believe that the Government would make much better use of the national insurance contributions scheme by stimulating economic growth in ways proven to be effective. For example, an increase in the annual employment allowance to £16,000 could benefit every small and medium-sized enterprise. It would allow employers to take on up to five workers each without making contributions, which would be a substantial boost to communities across the country and would do much more to boost employment across the nation than these hand-picked benefits whose impact cannot be measured.

[Madam Deputy Speaker (Dame Rosie Winterton)]

As the next speaker has withdrawn, we will go straight to Jim Shannon.

National Insurance Contributions Bill

Sarah Olney Excerpts

Consideration of Lords amendments
Tuesday 1st March 2022 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

I rise to support Lords amendments 2 and 4, but I will deal first with amendment 4.

As I said at earlier stages of this Bill, those who have experience of serving within the armed forces bring tremendous qualities to the workforce through both the skills they have learned while in uniform and their breadth of life experience. Despite our awareness of that and the best efforts of Governments and the third sector, for too many of our ex-servicemen who are leaving the services, the transition to civvy street is far more difficult than it often needs to be.

Having this exemption for national insurance contributions is therefore a very positive step as far as we are concerned, making it even more attractive to employers to hire those ex-service personnel and to bring their skills and experience into the workforce, helping to bring to fruition all the many economic and social benefits that can come from that. In that regard, we are attracted to Lords amendment 4 simply because it gives the Treasury that power to extend the eligibility period attached to the zero rate relief for armed forces personnel and veterans, should that be deemed desirable. That seems to us to be a perfectly reasonable addition to make to the Bill, giving the Treasury a degree of flexibility on how to implement the measure that would otherwise be lacking in the Bill as drafted.

On amendment 2, let me first place on record my satisfaction at the agreement that has eventually been reached by the Scottish Government and the UK Government over freeports, or green ports, of which two will now be established in Scotland, with the bidding process opening in spring this year and the first sites opening, hopefully, in spring 2023. I will go a little bit off piste here to say that that outcome was not always guaranteed, and at times, in at least some of the public discussions, there has been a bit more war-war than jaw-jaw, certainly on the part of individual Conservative politicians rather than between Ministers in Edinburgh and London. For example, the Scottish Business Minister, Ivan McKee, had to write six times to the UK Government to even try to get green port discussions under way in order to get them over the line. He said that the silence was deafening. That is a pretty damning account that rather sits at odds with the impression that we are often given from those on the Treasury Bench as to how they would like to work constructively with the Scottish Government.

The reason for holding out on the variation on the freeports option was quite simple. We felt very strongly that given the scale of the financial support that was on offer, it was vital to ensure that wider policy objectives such as environmental obligations, the commitment to net zero and fair play for those employed within freeport sites, were met. While it is up to the UK Government to decide how those objectives can be met in England, applicants for green port status in Scotland will be required to set out robust plans at the outset on how they plan to contribute to Scotland’s just transition to a net zero economy and how they will benefit the wider supply chain alongside embedding fair working practices such as at least paying the real living wage.

Freeports, it is fair to say, have had a somewhat mixed reception abroad, particularly as regards the relationship that they are perceived to have with criminality and tax evasion. While hardly the “Grand Theft Auto”-style dystopia that they have sometimes been portrayed as, the potential for criminality and non-compliance with taxation, employment rights, health and safety or environmental regulations and obligations is clear, as is the potential for broader economic displacement.

That brings me to the nub of amendment 2. In recent weeks, we have seen significantly increased demand from this House for scrutiny and visibility of financial transactions that take place in this country. We need to have that increased scrutiny over those who spend and invest in the UK, and also over where their money originates. It is very important when setting up freeports that we are able to answer the age-old question, “cui bono?” That is absolutely paramount. A requirement that the freeport deliverance body should be able to make reasonable efforts to verify who the beneficial owners of the business are and to ensure that that information is accessible not just to the relevant enforcement agencies but to the general public is the minimum amount of due diligence that we should expect in exchange for the status and the exemptions on offer.

I listened carefully to the Minister’s arguments about the beneficial register that will be in place and her view that as a third party under the local governance arrangements it would be inappropriate to release that information. Respectfully, I disagree with that. We all know how labyrinthine and byzantine corporate structures can be. Irrespective of any requirement in future legislation that may be coming into force, certainly on freeports, my party firmly believes that we should have transparency and accountability baked into the corporate structure and public reporting at the outset. On that basis, both Lords amendments have our support and we shall be voting accordingly.

[Sarah Olney (Richmond Park) (LD)]

I spoke on Second Reading and at other stages before the Bill went to the Lords, but it is fair to say that I now stand in a very different environment. Since the full-scale invasion of Ukraine last week, so many aspects of our economy, our international relations and our defence strategy have been cast in a new light.

In that spirit, I rise to support Lords amendment 2, which was introduced by my good friend and Richmond Park predecessor, Baroness Kramer. In the past week, we have had cause to look again not just at our defence spending and at the importance of our international relationships, but most importantly at how the UK— London in particular—has become a haven for Russian money, at what it has done to us as a nation and at how it has undermined our efforts to stand with the brave people of Ukraine.