Budget Resolutions

Stephen Timms Excerpts

Tuesday 12th March 2024 Commons Chamber

[Darren Jones]

My hon. Friend is right. Ministers should answer this question and I am repeatedly giving them the opportunity to do so. What is the answer to the question? How will the Conservatives fund their £46 billion unfunded tax cut commitment? We can only assume, given that taxes are the highest they have been for 70 years and borrowing is the highest it has been for many decades, that further cuts must be coming from the Conservatives to our national health service and our state pension. The fact of the matter is that the Conservatives’ plan to abolish national insurance is not just fiscally irresponsible but morally abhorrent. In contrast, the Labour party will never promise to do anything it cannot pay for—[Interruption.] I seem to have woken them up on the Government Benches. I encourage them to continue to try to answer the questions we put to them.

[Sir Stephen Timms (East Ham) (Lab)]

My hon. Friend is making a powerful case on national insurance. Does he agree that the plan to abolish national insurance raises fundamental questions about the future of the state pension? Even if income tax were increased by 8p in the pound to pay for it, the question of eligibility for the state pension and other contributory benefits would be very difficult to address.

[Darren Jones]

I thank my right hon. Friend, the Chairman of the Work and Pensions Committee, for raising that important and, I might say, obvious question. The public will want to know the answer. Why are Conservative Ministers not telling the Office for Budget Responsibility how they plan to pay for this £46 billion unfunded tax cut? When do they plan to do so? Why can they not tell the House today how they will pay for this £46 billion unfunded tax cut? The public will have to look at what the Conservatives are offering, and at their record in office over these past 14 years, and make a judgment call.

I started my speech by highlighting my concern for Conservative Ministers, given their obvious state of confusion, delusion and denial, but my real concern is elsewhere. My concern is for working people who are paying more in tax than ever before; for pensioners who are dragged into paying tax out of their fixed income for the first time; for families who are struggling with the cost of living crisis and seeing the economy going in the wrong direction; for our national health service that is now presumably at threat from the £46 billion unfunded promise to abolish national insurance contributions with no plan for how to pay for it; and for our country which, after 14 years of Conservative failure, is exhausted, on its knees and staring into the abyss.

We are all fed up with the weak leadership that the latest Conservative Prime Minister is offering our country. We are bored to the back teeth with the Conservative party’s chaos and infighting taking priority over the country. We want to get our economy back on track and our public services back on their feet, to close the book on 14 years of Conservative failure and to get Britain its future back. I have only one ask of the Conservative party today: to set the date for the general election.

--- Later in debate ---

[Sir Stephen Timms (East Ham) (Lab)]

Let me associate myself with what my hon. Friends the Members for Lewisham East (Janet Daby) and for West Ham (Ms Brown) said about the scale of the hardships being faced by so many residents of the London boroughs that all three of us represent.

In his Budget speech, the Chancellor said that the Government would

“continue to explore how savers could be allowed to take their pension pots with them when they change job.”—[Official Report, 6 March 2024; Vol. 746, c. 843.]

I am pleased that the Economic Secretary is present, because I was relieved that the Chancellor did not commit himself to pursuing that particular course at this stage. The proposal is driven by the laudable aim of consolidating pension schemes to gather resources to invest in the economy, which is an important part of tackling the productivity challenge of which we have spoken today. However, many of the responses to the Government’s consultation on it opposed the particular model on which the Chancellor had consulted—the “lifetime pension pot” model—because it would substantially increase costs and complexity for employers, whose support in pension provision has been important to the progress that has been made. At the very least, adopting this model would have the damaging effect of ending the cross-party consensus on pensions policy that has been so important to the progress of auto-enrolment over the last 20 years.

A major trade body, the Pensions and Lifetime Savings Association, said that there was “no evidence” that the lifetime provider model would help savers, but that it had

“the potential to significantly undermine the successes of AE”.

It warned of a

“sharp increase in marketing and product costs which will ultimately be borne by savers.”

It also suggested alternative ways in which to tackle lost and small pots, and to deliver the consolidation that is, undoubtedly, very important. The Association of British Insurers said that the model would “re-engineer auto-enrolment ”, and warned that

“We must not lose sight of the great success of automatic enrolment, while acknowledging that there are key reforms already underway…that need to be completed.”

The TUC described the proposal as a “gimmick” and a “dangerous distraction ”, likely to

“lead to higher charges and lower retirement incomes for most workers, with the lowest paid the greatest at risk of getting ripped off.”

Lane Clark & Peacock, where the former Pensions Minister Steve Webb now works, said that the model was “fundamentally flawed”. I was therefore relieved that the Chancellor was not rushing ahead with the proposal.

I wish we had seen more progress elsewhere. The Work and Pensions Committee has reported a widespread consensus in favour of the 2017 auto-enrolment review recommendations. The legislation received Royal Assent last September, but we now need a consultation on how it will be implemented and when. If the Minister is able to tell us when that is likely to happen, it would be of great interest. We also highlighted the

“consensus that many people need to increase their pension contributions if they are to have an adequate income in retirement.”

We said:

“The middle of a cost of living crisis is not the time to ask people to pay more into their pension. However, if they are to do so in the future”—

as they need to—

“work to prepare the ground needs to start now to build consensus”

on the need for the change that must come. It would be good to hear from the Government about when they will get on and move auto-enrolment to the next stage.

I, like other Members who have spoken in the debate, welcome the Chancellor’s extension to the household support fund. It has been crucial in supporting families through the cost of living crisis and in enabling local councils to reach those who most need help, but as we heard from the hon. Member for Motherwell and Wishaw (Marion Fellows), there is a strong case not just for extending the fund for six months but making it permanent.

Local welfare assistance replaced the old social fund in 2014. Money was transferred to local authority budgets, but it has increasingly been squeezed out in subsequent cuts. If the household support fund does end in September, a significant number of councils will end local welfare assistance altogether in their areas. The Government support local provision, but they need to fund it as well, and one important advantage of the household support fund is that a large number of councils have been able to support families with no recourse to public funds when other help is not available to them at all. I very much hope that the campaign to make the household support fund permanent will be accepted by the Government.

UK Economy

Stephen Timms Excerpts

Monday 19th February 2024 Commons Chamber

[Bim Afolami]

My right hon. Friend is correct that things are starting to get better for many people across the country, including small businesses. We have more than halved inflation, which is now down below 4%; we think that in the coming months it will go to 2%, which is the target. Of course, once it hits that target, we hope that interest rates will also start coming down, which will make a big difference to ordinary people up and down the country.

[Sir Stephen Timms (East Ham) (Lab)]

I applaud the Minister’s willingness to take on this unenviable assignment, unlike his right hon. Friends. The international context that he refers to is that Japan and the UK are the only G7 countries in recession. Inflation in the UK, which he has referred to, is the highest in the whole G7. Why is the UK economy doing so much worse than comparable economies elsewhere?

[Bim Afolami]

The right hon. Gentleman makes an interesting point, but I would say that our economy entered difficult times at a different point in the cycle from certain other economies. To fully assess the performance of all economies, we have to wait for the end of this whole period, so I would not prejudge exactly at this stage. I simply say that the difficulties we are facing have affected every single economy, although the nature of different economies means that they are affected at different times. We are putting in place comprehensive growth measures and comprehensive measures to bring inflation down. I also note that UK interest rates are roughly middle-of-the-pack compared with other countries of comparable size. We will keep all this under review and, at the next fiscal event, will take further measures to increase our potential growth rate over the long term.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 6th February 2024 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

In 2020, the former Chancellor set a public sector net investment target of 3% of GDP, but that was abandoned after the 2022 debacle and today we have the second lowest business investment among advanced economies, partly because of that failure on public sector net investment. Can the Minister offer us any reassurance on the future trajectory of public sector net investment?

[Nigel Huddleston]

Of course, Labour left us in pretty terrible financial circumstances back in 2010. Instead its figure is up £28 billion in real terms at the start of the next Parliament, an increase of 40% in real terms or 7% annually—the biggest ever published.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 19th December 2023 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

My hon. Friend is a great advocate for small businesses. The Government recognise that accounting for VAT can be a burden on businesses, but that is why, at £85,000, the UK has a higher VAT registration threshold than any EU member state and the second highest in the OECD, keeping the majority of UK businesses out of VAT altogether. In the 2022 autumn statement, it was announced that the VAT threshold would be maintained at its current level until 31 March 2026. As always, the Government keep taxes under review.

[Sir Stephen Timms (East Ham) (Lab)]

T2. I echo the Chancellor’s generous and well-judged tribute to Alistair Darling. At the autumn statement, the Chancellor said—mistakenly, as it turned out—that the household support fund was being extended into the next financial year; the Chief Secretary to the Treasury clarified the position a few moments ago. Does the Chancellor recognise that there is a compelling case for him to announce exactly that extension in the Budget, so that councils can continue to provide the last-resort safety net that has been such a valuable feature of the household support fund over the last three years?

[Jeremy Hunt]

I recognise the important role the household support fund has played. As my right hon. Friend the Chief Secretary to the Treasury said earlier, no decisions have been made about what will happen going forward. There were a lot of anti-poverty measures in the autumn statement, including increasing benefits next year by double the rate of inflation, increasing the full-time national living wage by £1,800 a year and increasing the local housing allowance, providing an average of an extra £800 to 1.6 million households.

Autumn Statement

Stephen Timms Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

I congratulate my right hon. Friend on his sterling work as a Minister. When it comes to pollution in the River Wye, he will know that the Government have made changes requiring the water companies to invest more than £50 billion in the years ahead, but he, like me, wants to see faster progress and I will happily give him any support I can.

[Sir Stephen Timms (East Ham) (Lab)]

I welcome the Chancellor’s announcement on benefit uprating. It is not, as he claimed, a mark of compassion but it is at least delivering the essential minimum, and I congratulate the Secretary of State for Work and Pensions on achieving that. For the past three years, the household support fund has enabled local councils to provide an important safety net for families facing the greatest hardship. Will there be a household support fund next year?

[Jeremy Hunt]

Yes, there will.

Autumn Statement Resolutions

Stephen Timms Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

I congratulate the hon. Member for Sevenoaks (Laura Trott) on her appointment as Chief Secretary to the Treasury. I am pleased to see a former Pensions Minister in that role, and I want to make some points about the pensions measures announced in the autumn statement.

First, on benefit uprating, I wrote on behalf of the Work and Pensions Committee to the Chancellor a month ago asking for two things: first, for working-age benefits to be uprated in line with the normal formula, which is September’s rate of inflation; and secondly, for local housing allowance to be rebased to the 30th percentile. I am relieved that both those points were in the Chancellor’s statement. The Joseph Rowntree Foundation reported last month that 3.8 million people were experiencing destitution in the UK last year. A fortnight ago, the Trussell Trust reported that food bank demand is 16% higher this year than it was last year, with 1.5 million emergency food bank parcels given out in the six months from April to September.

How is it that our economy is failing to meet the basic needs of so many in our society? We need the economy to start functioning properly again in a way that it clearly is not and has not been for a number of years. Spurious justifications were proposed for uprating working-age benefits by a lower amount in the autumn statement. Had those been adopted, they would simply have made things even worse, so I welcome the fact that the Treasury resisted those calls. I congratulate the Secretary of State for Work and Pensions on achieving the outcome that we have heard this afternoon.

I also welcome the rebasing of local housing allowance. By next April, it will have been frozen for four years, when rents have risen sharply. The freeze was causing widespread homelessness among working families who were doing perfectly decent jobs, but could no longer afford the rent. That was then imposing enormous costs on local councils for temporary accommodation, so I am pleased the allowance has been rebased, but I want to call for annual rebasing of the local housing allowance. It should be at the 30th percentile each year. I hope we will be told that it will. I am also glad that the temptation to water down the pension triple lock has been resisted.

Last week, the Work and Pensions Committee published a report on the Government’s cost of living support payments in which we identified a number of gaps in payments made. I was relieved that the Chancellor said in answer to my question that the household support fund is being maintained. There is a strong case for making it a permanent feature of our system so that local authorities know that they will have funds each year for providing local welfare support. That has been important in the crisis over the last few years. I hope that we can make it longer term and that its rules do not keep changing as they have over the last few years, making it difficult for local authorities to make a good job of administering it. I am glad that it will be there next year and I hope that the rules for it will not change next year as well.

The consultation on proposed changes to the work capability assessment, which were mentioned by the Chancellor, has been rushed and is inadequate—only eight weeks to consider major changes. Those changes that he said will go ahead will make things difficult for a significant number of people. We are told in a document that I think has been published since the Chancellor sat down that the vast majority of those who have already been assessed as having limited capability for work-related activity will not have to go through another work capability assessment, because that assessment is to be abolished. That, of course, will be of some relief for many, but it remains unclear what will replace it in the long term and when the promised legislation will come forward.

I am glad that the Chancellor is progressing the aims he set out at the Mansion House to increase pension fund investment in the economy to increase returns to pensioners, as he said, as well as to improve outcomes for investors and unlock capital for our growth businesses. There is a good deal of benefit in that approach, but where is the pensions Bill? I am genuinely mystified by that. In July, when the Chief Secretary was the Pensions Minister, her Department promised a “permanent regulated regime” for pension superfunds

“as soon as the parliamentary time allows”.

Evidence to our Committee has been clear that in the absence of a permanent statutory framework, superfunds will continue to struggle, undermining the Chancellor’s aims. I think the Chancellor reiterated his commitment to a regulated regime for pension superfunds, but there is no sign of legislation. I wonder if anyone can tell us what is proposed.

The Select Committee called on the Pensions Regulator to make changes to the new scheme funding regime—the Chief Secretary will be familiar with this from her previous role—to enable open defined-benefit schemes, like the railways pension scheme, to continue to invest in the economy, as the Chancellor rightly wants to happen. The Department has told us that concerns about the wellbeing of open defined-benefit schemes will be addressed, but they have not been yet, and the new code, which is causing a lot of anxiety, is, as the Chief Secretary knows, due to be introduced in April. Any clarification of the intention there will be gratefully received. I look forward to hearing more about the role in consolidation among smaller defined-benefit pension schemes that the Chancellor mentioned in his statement, and the role he envisages for the outstandingly successful Pension Protection Fund in taking on that task.

The Chancellor has talked about a consultation on a “pot for life” approach to pension saving. There are certainly benefits to that approach, and he referred to them, but there are problems as well. He said that there will be a consultation, and I think that is appropriate. In particular, there is the challenge for employers of having to manage lots of different pension funds among their different employees. There will be a significant increase in employer costs of handling that, and I hope that will be properly explored in the consultation.

I welcome the changes announced in Monday’s written statement to improve the support for people out of work on health grounds and with disabilities, including better employment support, plans for a severe disability group and, as the Select Committee recommended, trying out matching ill health benefit claimants with an assessor with experience of their primary health condition. There were ideas for assessing fluctuating health conditions, which I hope will be helpful. I wholeheartedly welcome the expansion that the Chancellor mentioned of integrated placement and support, which was recommended in the Committee’s report on the Government’s plan for jobs. The evidence is clear that it is helpful for people with mild to moderate mental health conditions to get back into work. The increased access to talking therapies is welcome too.

The Chancellor has announced an expansion of the restart scheme. We do not know how good that is because, until now, the Department has refused to published the outcome data for restart. I am glad that, in response to the Select Committee, it has said that it will start publishing that data, so we will see whether the scheme is doing a good job. The Committee took evidence this morning on the UK shared prosperity fund, which targets inactivity. One of the problems with the scheme is that the allocations were made in the middle of the year in which the money was supposed to be spent, so it is not surprising that people have not been able to set up the programmes that the funding supports. I hope that the Government will get their act together and ensure that the allocations are announced in good time for local authorities to award providers contracts to deliver the help that is needed.

The promised improvements for employment support have been matched by announcements of harsher sanctions. It is clear that sanctions are already high for people claiming universal credit and the other working-age benefits. There is no evidence at all that what is proposed will make people more likely to move into work. Particularly, where people are out of work because of a mental health problem, there is growing evidence that increasing sanctions makes matters worse. There has been a large response to the Government’s announcement, particularly for people out of work on mental health grounds, that the proposed increase in sanctions will make people less likely to get into work.

Yesterday, I received a letter with 70 signatures from single parent groups, children’s charities, domestic abuse charities and others, asking that the Select Committee look at the newly increased work obligations imposed on carers of young children. At the moment, carers of young children expect to work 16 hours a week—that is to be nearly doubled to 30 hours a week. The letter challenges those proposals for reasonableness and feasibility. If someone is looking after young children, is it appropriate to demand such large working weeks—far greater than the requirement until now?

After the misery of the past few years, we must all hope that the plan set out by my right hon. Friend the Member for Leeds West (Rachel Reeves) in answer to the Chancellor’s statement is put in place next year, finally, to reignite much needed growth in the UK economy.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 5th September 2023 Commons Chamber

[Victoria Atkins]

I would be delighted to meet my right hon. Friend and those businesses. In fact, the UK is leading world economies with our focus on life sciences and on tech. In that little golden triangle between Oxford, Cambridge and London, we have more tech businesses than anywhere else on the planet other than New York and silicon valley. I hear the cheers opposite, so keen are Labour Members to support British business, but I would be delighted to meet her and to underline the support that this Government give to such important businesses.

[Sir Stephen Timms (East Ham) (Lab)]

I welcome the new focus on engaging pension funds with productive investment, after many years when regulation has pushed the funds into Government gilts instead, but does the Minister have proposals specifically to secure those investments for UK businesses rather than their going overseas?

[Andrew Griffith]

The right hon. Member makes a significant contribution to the debate about the nation’s pension funds. Our objective to increase investment—to drive increased returns for pension savers, but also to benefit the wider economy—stops short of mandating. There is a philosophical difference between this side of the House and the Opposition. We do not believe it is right for the Chancellor to tell pension funds where to invest, but it is our job to knock down barriers, frictions and impedances to pension funds investing in brilliant British companies.

Financial Services Reforms

Stephen Timms Excerpts

Tuesday 11th July 2023 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Work and Pensions Committee.

[Sir Stephen Timms (East Ham) (Lab)]

Defined-benefit pension funds have long been under pressure to invest in Government gilts rather than the productive economy, so I welcome the change of direction that the Minister has announced. He has indicated how much extra pension fund investment will go into high-growth companies in future. Will he indicate what share of that he expects to go into UK high-growth firms rather than overseas? He has indicated, I think, a replacement for the current charge caps on pension funds, with a wider value-for-money assessment, but can he indicate when we are likely to see the detail on what exactly he and the Under-Secretary of State for Work and Pensions, the hon. Member for Sevenoaks (Laura Trott), have in mind for that?

Finance (No. 2) Bill

Stephen Timms Excerpts

2nd reading
Wednesday 29th March 2023 Commons Chamber

[Sir Stephen Timms (East Ham) (Lab)]

Will the Minister give way?

[Victoria Atkins]

I am so sorry, but I must make progress; I am sensing your yawn coming on, Mr Deputy Speaker.

The Bill will simplify pension tax by increasing the annual allowance and removing the lifetime allowance. It also legislates for a range of administrative changes to deal with technical issues, improving and modernising the tax system and making it easier for businesses to interact.

This Finance Bill takes forward important measures that are needed to support enterprise and growth, including incentives for investment and support for employment in, for instance, the NHS. It seizes freedoms that are available now that we are outside the EU, it deals with threats posed to the sustainability of our public finances by the energy crisis and aggressive tax planning, and it supports our long-standing goals of modernising and simplifying the tax system. It delivers on an important part of the Government’s commitments in the spring Budget to create long-term economic growth, and for all those reasons I commend it to the House.

--- Later in debate ---

[Sir Stephen Timms (East Ham) (Lab)]

I am very pleased to follow the hon. Member for Amber Valley (Nigel Mills), whose pensions expertise we benefit from greatly on the Work and Pensions Committee.

I want to comment fairly briefly on two aspects of the Bill: first, the decision, at a time when the pension burden on ordinary families is rising so fast, to give a big tax cut to the wealthiest pension savers; and secondly, the abolition of the Office of Tax Simplification—and to reflect on the history of that initiative that led us to where we are today.

Table 4.1 in the Red Book tells us that the abolition of the lifetime pension allowance will cost the Government £1.8 billion in uncollected tax over three years. At a time when the tax burden on ordinary families is being raised to the highest level since the second world war, it seems extraordinary that the Chancellor thinks it is right to cut the tax on the 1% largest pension pots.

It is a big challenge for pensions policy that tax relief support for pension saving is so massively skewed in favour of the wealthiest. There are suggestions from time to time about how to use that relief more progressively to encourage pension saving among lower-paid workers. Instead, the Chancellor has made the unfairness £1.8 billion worse. It is difficult to understand how that can be justified.

It is a problem that Chancellors, Prime Ministers and Ministers completely unavoidably spend their time talking to people who are in that 1% wealthiest group—they are the people who make representations, who they sit next to at their dinners and so on. By giving a £1.8 billion tax cut to that group, the Chancellor has chosen the wrong priority. The hon. Member for South Thanet (Craig Mackinlay) rightly made the point in passing that it is creating a large tax avoidance opportunity for a large number of people. They will simply not pay the tax that the Bill imposes on them, but will instead choose to put an unlimited amount of money over a lifetime tax-free into their pension.

The Work and Pensions Committee’s report on saving for later life, published last September, highlighted the collapse of pension saving among the self-employed. In the late 1990s, about half of self-employed people were saving in a pension. By December 2021, that was down to 16%, compared with 88% of eligible employees, thanks to the success of auto-enrolment, which is not available to self-employed people. Pension saving for them is now at a very low level. Our report recommends that the Treasury and the DWP should set a date to trial ways to default self-employed people into pension saving, to work out how to replicate the success of auto-enrolment among self-employed people. Tax relief of £1.8 billion could have been a valuable incentive to make a success of an initiative along those lines. Unfortunately, the Government’s response to our report rejected our recommendation. Instead, the Bill is giving away that support to those who already have the largest pension pots. It is difficult to understand how that can be justified.

I was elected to the Commons in June 1994. As is usual, I served on the Finance Bill Committee the following year—some of my recently elected hon. Friends will have a similar privilege with this Finance Bill. One of the other members of that Committee was the Conservative Back Bencher Tim Smith, the MP for Beaconsfield, who no doubt you will remember, Mr Deputy Speaker. He moved an amendment in that Committee to require the Inland Revenue to prepare a report on tax simplification and to lay it before Parliament. To the fury of the Conservative Front Benchers on that Committee, not only did he move the amendment—that is a fairly normal thing to do—but he pressed it to a vote. Of course, all the Labour Committee members voted in favour of it, so it was agreed to and the Bill was amended in Committee. Ministers were absolutely livid. It was unheard of for the Government to be defeated in the Finance Bill Committee. I do not think that the relationship between Tim Smith and his party’s Front Benchers ever recovered.

Within a few weeks, the then Chancellor Ken Clarke was making a virtue of the fact he would bring forward proposals for tax simplification. The idea rapidly gained currency and Tim Smith’s idea was embraced. The spade work was done by Michael Jack, who became the Financial Secretary in 1995. What emerged from it—the hon. Member for South Thanet mentioned this—was the tax law rewrite project, which brought forward a series of five Bills under the Labour Government, which made tax law easier to understand. It certainly did not shorten tax law, but I think it made it easier to understand.

The Conservative party returned to the theme in 2010, with its manifesto commitment to set up the Office of Tax Simplification, which is abolished by the Bill. Michael Jack, a previous Financial Secretary to the Treasury, was the first chair of the project, and John Whiting of the Chartered Institute of Taxation did a lot of the spadework.

The Office of Tax Simplification was made statutory in 2016, so we understood it would be a permanent feature of the landscape. It had its first quinquennial review in 2021, when the current Prime Minister was Chancellor. That review concluded

“that the need for the OTS’s statutory function to advise the Chancellor on simplification of the tax system remains undiminished.”

What has happened in the past 18 months to mean that it is now being abolished?

PricewaterhouseCoopers makes the point that when Tim Smith’s amendment was moved in 1995, the volume of tax legislation was 5,000 pages and his aim was to reduce it. The hon. Member for South Thanet is correct that it is now 23,000 pages, so it is not clear that the need for simplification has ended. PricewaterhouseCoopers says the Office of Tax Simplification has a “high level of engagement” with the tax profession and that when the office consults on issues, it receives a lot of ideas and contributions about how to do things. PwC goes on to say:

“It has produced a number of insightful reports… The response from the Government has been mixed, however, and whilst some of its recommendations have been accepted, many have been watered down or simply ignored.”

The real reason that it is being abolished is that, in the end, the Government are not that interested and there are other priorities that have a higher weight than simplifying the tax system.

The closure was announced in the disastrous mini-Budget last September. For that reason alone, we ought to be a bit sceptical about whether it is a sensible thing to do. At the time, the then Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), said, rather as the Minister said in her opening speech:

“I have decided to wind down the Office of Tax Simplification, and mandated every one of my tax officials to focus on simplifying our tax code.”—[Official Report, 23 September 2022; Vol. 719, c. 937.]

If everybody is responsible for something, in reality nobody is, so I do not think we will hear much about further progress on that in the future. It sounds very much like the end of the project.

The Chair of the Treasury Committee, the hon. Member for West Worcestershire (Harriett Baldwin), asked about that in her intervention on the Minister. She has written to the Chancellor on behalf of her Committee to ask why the Office of Tax Simplification is being abolished; we will all be interested to see his reply. The Office of Tax Simplification has done valuable work and, having followed the progress of work on the issue since 1995, I am sorry to see it go. I will be interested to hear the Minister’s justification for the decision.

[Several hon. Members rose—]

Digital Pound

Stephen Timms Excerpts

Tuesday 7th February 2023 Commons Chamber

[Andrew Griffith]

My hon. Friend and, indeed, predecessor highlights one of the potential concerns: one is either instinctively too early or too late in bringing matters to this House. Although this is a long-term project—the consultation makes it clear that a digital pound would not be introduced before the second half of this decade—it is right that we start conversations on precisely the important matters that influence the liberty of every one of us at this moment in time. So while I will eschew his choice of words, I assure him that liberty remains paramount, which is one reason why it is very clear that any digital pound should not replace, but should sit aside, the anonymity that is currently offered by physical cash.

[Sir Stephen Timms (East Ham) (Lab)]

I welcome the Minister’s statement. Firms setting up to deliver blockchain-based financial services in the UK complain that getting a licence here takes far too long because the Financial Conduct Authority does not have the capacity to process the applications. A number of very successful firms have been forced to leave the UK altogether as a result. What plans does the Minister have, as part of this work, to tackle that particular problem?