Treasury

Stephen Timms Excerpts

Tuesday 19th April 2022 Ministerial Corrections

The following are extracts from the debates on the National Insurance Contributions (Increase of Thresholds) Bill on 24 March 2022.

[Stephen Timms]

The Minister mentioned Martin Lewis, and I wonder if she could provide the information that the Chief Secretary said she might be able to give in winding up this debate about the effect of this national insurance measure on people claiming universal credit. Martin Lewis has made the point that they will lose 55% of the £330 a year benefit. Will she confirm if that is correct?

[Lucy Frazer]

I was going to come back to that point, but I am very happy to deal with it now. The right hon. Gentleman is right that an individual may be affected by the taper, but they will be better off overall as a result of the change. If they are earning below the work allowance, they will get the full benefit. It is important to point out the changes we have already made for those on universal credit. As a result of those changes, 1.7 million households will benefit from the taper rate change, which is £1,000 of additional income for them.

[Official Report, 24 March 2022, Vol. 711, c. 508.]

Letter of correction from the Financial Secretary to the Treasury:

Errors have been identified in my response to the right hon. Member for East Ham (Stephen Timms).

The correct response should have been:

National Insurance Contributions (Increase of Thresholds) Bill

Stephen Timms Excerpts

2nd reading
Thursday 24th March 2022 Commons Chamber

[Mr Clarke]

I would say two things. First, there is a raft of measures in place in the package announced yesterday precisely determined to help people on the lowest incomes, including, notably, the doubling of the household support fund to £1 billion, the action that we have already taken in cutting the universal credit taper rate, and the biggest cut that we have ever made to fuel duty. These are all things we have done, on top of the energy price package announced in February, that are designed to help people on the lowest incomes. Secondly, I hold the office of Chief Secretary, and I remember the Labour predecessor who left the note saying that there is no money left. I do not want to be in a position where I hand over a note to any successor of mine saying that there is an equivalent situation.

[Stephen Timms (East Ham) (Lab)]

rose—

[Mr Clarke]

I give way to another predecessor.

[Stephen Timms]

It has been reported overnight that people on universal credit will see only about half of the gain from the measure that the Minister is bringing forward compared with those who are not on universal credit because the portion of people’s income that will not now be subject to 12% national insurance will instead be subject to the universal credit taper at 55%. Is that assessment correct?

[Mr Clarke]

We are determined to help people on universal credit to keep more of what they earn. I have not seen the assessment to which the right hon. Gentleman alludes, but I will look at it. It is certainly our ambition to keep bringing down the taper rate so that people get to keep more of what they earn. In that regard, I will certainly look at the analysis to which he directs me.

--- Later in debate ---

[Mr Clarke]

Indeed, I absolutely do recognise what my hon. Friend says. The IFS has described raising the NICs threshold as

“the best way to help low and middle earners through the tax system”,

so he is absolutely right in what he says.

[Stephen Timms]

Mike Brewer, who used to be with the Institute for Fiscal Studies, has said this morning about the value of the £330 figure to the average employee:

“If you are getting UC, then you lose 55% of that to a reduced UC award.”

I think that is a major issue for the House in evaluating the measure that the Chief Secretary is bringing forward. Could he please urgently clarify for us whether that is indeed the case?

[Mr Clarke]

As I said in response to the right hon. Gentleman’s earlier remark, I will of course look at what he is saying. I recognise fully that we want to make sure that we allow people to keep as much as possible of what they earn, and it is our ambition to keep reducing the tax burden on the lowest earners, including through action on the taper rate.

--- Later in debate ---

[Mr Clarke]

I thank my hon. Friend for her question. She is a fantastic champion for Hastings and Rye, which I recognise is a part of the south-east that perfectly demonstrates that communities face very significant challenges in all parts of the United Kingdom. Sometimes the levelling up question is seen as the north and the midlands against the south, but her constituency is a very good demonstration of why communities in the south-east also need support. She is absolutely right in what she says. This is a Government with a strong track record of delivering for people who need the most help. It is worth noting in that regard that, as a result of the Bill, over 2 million people will be taken out of paying class 1 and class 4 NICs and the health and social care levy altogether, including, of course, in Hastings and Rye.

[Stephen Timms]

Will the right hon. Gentleman give way?

[Mr Clarke]

I should make some further progress, I think.

The Government recognise that implementing the Bill is a big change for many employers and payroll software providers, so I want to add a few words about the timeline for when we are implementing the changes. We believe that the date in early July strikes the appropriate balance between ensuring—this speaks to the point made by my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart)—that people benefit from the increase as soon as possible, while giving employers and payroll software providers time to update and test their systems so that the change can be delivered safely. That will avoid millions of taxpayers having to make manual claims for refunds at the end of the tax year and employers from having to make major payroll corrections. Clearly, that is a situation we want to avoid.

The Government are also acutely aware of the huge pressures faced by those working for themselves but earning low amounts as a result of the rising cost of living. To support that group, the Bill gives the Treasury a power to lay an affirmative statutory instrument. It will mean that from April those with profits between £6,725 and £11,908 will not pay class 2 NICs. That will rise to £12,570 from April 2023. The measure will benefit half a million self-employed people, saving them up to £165 a year. As I just mentioned, that group will still be able to receive NIC credits, just as they have done in the past.

[Mr Clarke]

My hon. Friend is absolutely right to raise this issue. The Financial Secretary to the Treasury will be replying to the later stages of the Bill’s passage and will be able to provide direct confirmation that HMRC is focused on that issue. It is critical that HMRC plays its full role in delivering the measures as seamlessly as possible, and I know that it will.

[Stephen Timms]

Will the Chief Secretary to the Treasury give way?

[Mr Clarke]

I will, I will, I will.

[Stephen Timms]

I am grateful to the right hon. Gentleman and I apologise for intervening once again. He has made it clear that he is not able to answer the question about the effect of this measure on people claiming universal credit. Can he commit the Financial Secretary to the Treasury to giving us an answer on that point before the end of the debate? It is an important issue for the House to take into account when determining its decision on this measure.

[Mr Clarke]

I thank the right hon. Gentleman for that point. My right hon. and learned Friend the Financial Secretary will do her best to provide an answer based on the information that our officials can provide. It is important, obviously, that we answer questions correctly. It is worth noting that the universal credit taper rate has been reduced from 63% to 55% and the universal credit work allowance has been increased by £500 a year to help make work pay. That is a tax cut for the lowest paid in society worth around £1.9 billion in the financial year that is just about to begin. It means that 1.7 million households will on average keep around an extra £1,000. We will do our best to respond to the specific question that the right hon. Gentleman raises.

The effect on an individual’s ability to access contributory benefits and to build up state pension entitlement will be unaffected as a result of the changes to class 2 NICs. Taken together with the increase in the primary threshold and the lower profits limit, we will meet in full our commitment to ensure that the first £12,500 an individual earns is free of tax, clearly illustrating that this is a Government who make good on their promises to the people of this country.

--- Later in debate ---

[Lucy Frazer]

I am going to carry on, because there are a lot of points to which I would like to respond and I have limited time.

My hon. Friend the Member for South Dorset (Richard Drax) made a very powerful speech about freedom, recognising the impact of global challenges. He mentioned the armed forces, and I would like to reassure him that last year’s integrated review was accompanied by the largest cash increase in the defence budget since the cold war, with an additional £24 billion.

The hon. Member for Gordon (Richard Thomson) asked why the Chancellor is not using his £30 billion headroom. I would like to point out that the OBR has said that there is “unusually high uncertainty” in relation to the outlook, and the OBR has also said that the headroom the Chancellor has kept is the same as, or indeed less, than that of previous Chancellors. That is important because, if there is a 1.3% increase in interest rates, that will totally wipe out the headroom the Chancellor has given himself. We are already looking at £83 billion being paid in interest next year. Those of us on the Government Benches think we need to be fiscally responsible in the way we deal with our taxpayers’ money.

The hon. Member also said that to increase the national insurance contributions threshold as we are doing was not the right way to go. I would like to point out that Martin Lewis has said on Twitter:

“This is the big one. Increasing the National Insurance threshold so it now matches Income tax from July.”

He said various other things, and then he said, “Good call”.

My hon. Friend the Member for Redcar (Jacob Young) recognised that there are no easy choices. He reminded us of Labour’s record on the economy, which reminded me that the shadow Chancellor had put forward a total of £170 billion of uncosted spending proposals just by September last year, and she has refused to rule out hiking up income taxes.

[Stephen Timms]

The Minister mentioned Martin Lewis, and I wonder if she could provide the information that the Chief Secretary said she might be able to give in winding up this debate about the effect of this national insurance measure on people claiming universal credit. Martin Lewis has made the point that they will lose 55% of the £330 a year benefit. Will she confirm if that is correct?

[Lucy Frazer]

I was going to come back to that point, but I am very happy to deal with it now. My right hon. Friend the Chief Secretary is right that an individual may be affected by the taper, but will be better off overall as a result of the change. If they are earning below the work allowance, they will get the full benefit. It is important to point out the changes we have already made for those on universal credit. As a result of those changes, 1.7 million households will benefit from the taper rate change, which is £1,000 of additional income for them.

The hon. Member for St Helens South and Whiston (Ms Rimmer) talked about the energy crisis. She will know the measures we have already put in, including the £9 billion of further support, with the £350 that people will get over the course of this year. She mentioned businesses in her constituency, and I hope they will welcome the increase to the employment allowance that we have announced.

I am very pleased to hear how my hon. Friend the Member for Peterborough (Paul Bristow), my almost constituency neighbour, is engaging with his constituents, and that the Oxcart pub welcomes our business rate cuts.

The hon. Member for North East Fife (Wendy Chamberlain) talked about poverty. I am very proud that, if we look at the past 10 years of this Government, there have been about 1.3 million fewer people in poverty. She also talked about pensioners, and this the Conservative Government have consistently supported pensioners. Through the triple lock, we have seen an increase in state pension of 25%—that would be £2,050—since 2011.

My hon. Friend the Member for Rother Valley (Alexander Stafford) made a very passionate speech, rightly recognising the global macroeconomic position. He is absolutely right to talk about the importance of getting people into work, a point that was also made by other hon. Members. I am very pleased that he has held his first Rother Valley jobs fair, and we are getting people into work through the plan for jobs that the Chancellor has set out—whether through restart and kickstart or with the benefit of work coaches.

The hon. Member for Luton South (Rachel Hopkins) talked about low growth and low pay, but I wonder if she is aware that ours was the fastest growing economy in the G7 last year, according to the IMF. I wonder whether she heard the Chancellor’s statement in which he set out a tax plan that focuses on growth. It focuses on what we will do to support businesses in the way of capital, people and ideas. He has already highlighted that he is looking forward to cutting tax rates on businesses, so that they can further invest, in his autumn Budget.

A number of Members talked about how the OBR has said that the package only reverses

“around a sixth of the net tax rises”

that the Chancellor has announced overall. I just want to inform them that the tax plan comes on top of the almost £46 billion in tax cuts that the Government have introduced for this year and next. That includes the super deduction worth £25 billion across two years, business rates and VAT support worth £14.5 billion across two years, and fuel and alcohol duty freezes worth £4.5 billion across two years. These important tax cuts were not included in the OBR’s analysis, which just focuses on the final year of the forecast period.

My hon. Friend the Member for Bury North (James Daly) was right to say that this is not the end of the journey for the Chancellor, a point also made by my hon. Friend the Member for West Bromwich West (Shaun Bailey), who mentioned that this is part of a broader package. The Chancellor has a plan to help families with the cost of living, creating the conditions for private sector-led growth and sharing the proceeds of growth fairly.

The right hon. Member for Hayes and Harlington (John McDonnell) talked about the importance of helping those on low incomes. I absolutely agree with him that that is important, but we are doing it—whether through the universal credit taper rate, raising the national living wage, the 70% cut in taxes that we announced yesterday and are legislating for today, the £9 billion of energy support or increasing the generosity of the local housing allowance. All those measures will support people on low incomes. He made an interesting point about public sector pay, which I noted conflicted with a point the shadow Chancellor, the hon. Member for Leeds West (Rachel Reeves), made on the radio this morning when she recognised that negotiations for public sector pay were independent decisions made by pay review boards.

The measures in the Bill will ensure that our national insurance system plays its part in relieving some of the challenges facing families right now as a result of the cost of living crisis. Of course, we have not introduced them lightly. We are conscious that in the next financial year we are forecast to spend £83 billion in debt interest, the highest figure on record. In addition, while the Bill represents an important part of the Chancellor’s tax plan, it is just one element of it.

Yesterday, the Chancellor also announced steps to create the right conditions to enable our businesses to grow, highlighting some potential tax-cutting options for businesses, investment and innovation. He announced action to help to ensure workers see more of their hard-earned cash and a pledge to reduce the basic rate of income from 20p in the pound to 19p in the pound before the end of the Parliament, representing the first such cut in 16 years. Furthermore, the Chancellor announced help for motorists through the biggest cut to fuel duty rates ever, while for the next five years homeowners in Great Britain who have materials such as solar panels, heat pumps or insulation installed will pay zero VAT. He doubled the household support fund, which allows local authorities to distribute financial help to the vulnerable, so it stands at £1 billion.

Help with the cost of living, extra support for the vulnerable, delivering on our pledge to reform the tax system and measures to make sure work really pays all comes on top of the £400 billion of support we provided to individuals and businesses during the pandemic and the £20 billion we have already pledged to help with the cost of living. Let no one say that this Government do not stand by the people of this country. The Bill is yet more clear evidence of how we are making good on our promise to support our citizens through challenging times. That is why I commend it to the House.

Financial Statement

Stephen Timms Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for what he has said, and look forward to discussing those topics with him over the coming months. The document outlines a range of options for cutting taxes on investment. Hopefully he will have a chance to digest those, and I look forward to discussing them with him.

[Stephen Timms (East Ham) (Lab)]

The Conservative party introduced universal credit, but instead of uprating it in line with current inflation, the Chancellor has chosen to increase the size of the household support fund. Those who have heard of it have to go to their local councils to receive it. What evidence, if any, does the Chancellor have that the fund is effective in delivering help to the families who need help most?

[Rishi Sunak]

The feedback that I receive from colleagues suggests that it has been effective, and I trust councils to know who are the people in their areas who most need our help. I used to be a local government Minister, and, as the right hon. Gentleman knows, I have enormous respect and regard for local authorities. However, we did not just do that: in the autumn Budget, we gave a £2 billion cut through the tax rate on universal credit to nearly 2 million people on the lowest incomes.

Economic Update

Stephen Timms Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rishi Sunak]

With the greatest respect to my hon. Friend, I also believe that it is a Conservative approach to be responsible with this nation’s public finances. I believe that, after recovering from the worst economic shock in 300 years, where borrowing spiralled to levels that we have not seen since world war two, it is right and responsible to tackle that and get our borrowing and debt down to sustainable levels. That is why I have had to make difficult decisions, but also fund the country’s No. 1 priority: the NHS and the unacceptably high and growing number of people waiting for operations. That is what that funding will do. It is right that we provide a secure, long-term, sustainable funding stream for the country’s No. 1 priority, and people should be reassured that every penny of that levy is going to go to the thing that they care most about.

[Stephen Timms (East Ham) (Lab)]

There is an obvious unfairness in the massive profits being made by the oil and gas companies at a time when families are facing such great hardship. Surely the Chancellor must make an intervention to address that. He has announced a discretionary fund for local councils. Worried families will have no idea how much that will benefit them, if at all. Will he instead introduce an uplift in universal credit, having cut it so unfairly just four months ago?

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 7th September 2021 Commons Chamber

[Ian Byrne (Liverpool, West Derby) (Lab)]

16. What recent discussions he has had with the Secretary of State for Work and Pensions on the impact on the Exchequer of ending the £20 uplift to universal credit.

[Stephen Timms (East Ham) (Lab)]

18. What discussions he plans to have with the Secretary of State for Work and Pensions on the impact on the Exchequer of ending the £20 uplift to universal credit.

[Alex Davies-Jones (Pontypridd) (Lab)]

21. What recent discussions he has had with the Secretary of State for Work and Pensions on the impact on the Exchequer of ending the £20 uplift to universal credit.

--- Later in debate ---

[Rishi Sunak]

I do not accept that people will be forced into poverty, because we know, and all the evidence and history tells us, that the best way to take people out of poverty is to find them high quality work. We are creating jobs at a rapid rate, with eight months of continuous growth in employment supported by this Government: traineeships, sector-based work academies, apprenticeships, kickstart. You name it, we are delivering it to help those people in Liverpool to get the skills and the jobs they need to help support their families.

[Stephen Timms]

Forty per cent. of the people who claim universal credit are already in work. Does the Chancellor understand that they will be very hard hit by this cut, which is the biggest overnight benefit cut in our history?

[Rishi Sunak]

Of course there are people already in work who are on universal credit, but our plan for jobs helps them too. We increased the national living wage this year by an inflation-busting amount—£350 a year to help those families. We talked earlier about the lifetime skills guarantee, about apprenticeships, about skills boot camps. Those are all ways the Government are supporting people; each one of those initiatives, by the way, is worth thousands of pounds of support. Those people will benefit from those increased skills and benefit from guaranteed new job interviews or higher wages at the end of it. That is the right strategy to help those people in work.

[Rishi Sunak]

Again, what we know is that children growing up in workless households are five times more likely to be in poverty than those whose parents work. That is why we are supporting their parents to get into work and why almost 800,000 fewer children are living in workless households than when this Government first came into office. That is the right way to support those families. Of course, there are other bits of our welfare system that we have maintained the generosity of, but when it comes to universal credit or employment, we on this side of the House we will support their parents into work and, crucially, with their childcare costs. Mr Speaker, we forget that 85% of childcare costs for people on universal credit are covered to support parents into work, which we know will make a difference to those children.

[Stephen Timms (East Ham) (Lab)]

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

[The Chancellor of the Exchequer (Rishi Sunak)]

Over a year ago, the Government launched their plan for jobs, a comprehensive and ambitious plan to help people back into work to earn more and to gain the skills they need to succeed in the jobs of tomorrow. The latest data shows that our GDP and our economy is recovering quickly, unemployment is falling, jobs are being created, and, indeed, household incomes have been protected. All of that tells me that this Government’s plan for jobs is working.

[Stephen Timms]

Cutting universal credit by £20 a week will hit working families very hard. It will leave support for unemployed families at the lowest real terms level for over 30 years. It will undermine the recovery and scupper the prospects for levelling up. Does the Chancellor of the Exchequer understand why every single former Work and Pensions Secretary since 2010 has opposed his cut?

[Rishi Sunak]

The right hon. Gentleman talks about economic recovery. We are forecast to grow faster this year than any other country in the G7. The recovery is under way. Jobs are being created, people are getting into work, wages are rising. That is the right strategy for us to pursue. Our plan is working and we will stick to it.

Finance (No. 2) Bill

Stephen Timms Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Mrs Flick Drummond (Meon Valley) (Con) [V]]

Like all Conservative Governments, this is one who believe that people should be encouraged to create wealth and invest it wisely without undue interference from the state, bureaucracy or taxation for taxation’s sake. The fundamentals of our economy were strong nationally and in the Meon Valley as we headed into the coronavirus pandemic, and I am confident enough that we are well set to emerge from it and carry on with good growth. Although it is not the topic of this segment of the debate, I must welcome the announcement in the Budget of the Solent freeport, which will bring jobs and investment to the whole region, which includes my constituency.

I want to speak to clauses 5 and 28. The pandemic has created a major challenge for state finances, and I recognise that the Treasury must cover the cost of the measures it has taken to support jobs and society. The two long-running strands of policy covered in these clauses are the reform of personal income tax allowances and the lifetime allowance in pension fund accrual.

The commitment to a £12,500 personal allowance featured in the Conservative party’s 2015 election manifesto, and I am pleased that we are achieving it a year early. Since 2010, the personal allowance has grown more quickly than average earnings, and a huge number of workers have benefited. In announcing a freeze between now and 2026, we will see some of that eroded—around £8 billion of income flowing back into the Treasury by 2025-26—and I hope that Ministers will ensure that we direct the benefits of recovery at the groups on the lowest incomes, whom we have done so much to help in government already. Needless to say, I will not be supporting the Opposition amendment to clause 5.

Another area where I hope Ministers can keep an open mind is simplification of our pensions system in the future, but today I would like to concentrate on the lifetime allowance in clause 28. As many other Members will have seen in their postbag, this has been affecting doctors in the NHS, senior teachers and others in the public sector who have taken or considered early retirement to avoid breaching the cap. As well as creating a situation where the Treasury does not see some of its forecast tax take coming in, it means that in some cases, people have gone back to work as contractors or locums, sometimes filling gaps that have been created by this policy on pensions.

The intention behind the lifetime allowance when it was introduced in 2006 was to simplify a large number of regimes. However, freezing it at just over £1 million without the tie to the consumer prices index means that we are seeing some complex reworkings of remuneration schemes, and we will see more unintended consequences as growing numbers of people look to find ways to avoid the cap. The British Medical Association’s survey of GPs indicated that almost half of doctors would consider early retirement to protect their earnings after retirement. While the Budget forecast states that by 2025-26 there will be an additional £300 million of revenue, it does not account for other costs that the policy could contribute to.

Pension policy generally encourages people to forego current consumption, so that they can enjoy a higher standard of living later in life. However, the trade-off here is different, and we risk public services having to cope without staff or pay for them because they are contractors or locums if we carry on eroding the value of the lifetime allowance. I hope the Treasury will look creatively at how we can balance ensuring that people on higher incomes pay their rightful share of tax with the need to ensure that skilled and experienced workers continue to contribute to the wider public good throughout their working lives.

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

Clause 31 relates to the decision to cut the £20 a week uplift in universal credit and working tax credit in six months. I want to focus my brief remarks on that decision, highlighted by my hon. Friend the Member for Ealing North (James Murray), because it will be key in the impact analyses in new clause 23 and amendment 15. A Work and Pensions Committee report in February drew attention to the Joseph Rowntree Foundation’s finding that withdrawing the temporary increase

“will risk sweeping 700,000 more people, including 300,000 more children, into poverty”,

and that

“500,000 more people could end up in deep poverty (more than 50% below the poverty line).”

It goes on to explain that

“people who were already more likely to be in poverty were most affected by the economic storm caused by COVID-19: workers in low-wage sectors or part-time jobs, people living in areas with higher rates of deprivation, families with children, disabled people, or those from BAME backgrounds…around 60% of the families who lose out being in the bottom 30% of the income distribution.”

It goes on to say that

“60% of all single parent families in the UK will experience this overnight cut to their incomes”

when the £20 a week is removed.

Under the Government’s plans, the cut will happen just as unemployment is forecast to peak. The last time anything like this happened in such circumstances was 90 years ago under the national Government of Ramsay MacDonald. It will devastate the finances of a large number of struggling families. Ministers will find it extremely hard to justify, so I particularly welcome today’s reported call by more than 100 Conservative MPs to make the £20 a week uplift permanent.

The Resolution Foundation’s “Living Standards Outlook 2021” in January said that rising unemployment and removing the £20 uplift would push 800,000 adults and 400,000 children into relative poverty—the biggest annual poverty rise since the 1980s. A Northern Ireland woman told the Joseph Rowntree Foundation:

“The £20 uplift to Universal Credit has meant I have just about managed to keep my head just above water. I’m living day to day trying to pay my bills and keep my house warm for my child. Taking this away now or in six months means I will be drowning in debt.”

A London woman said:

“We’ve relied heavily on food banks…That £20 is often the difference between light and heat or no light and heat. If you don’t have gas, you can’t cook.”

A Leeds man said:

“I am aware of the extra—if it wasn’t for that I don’t know how I would survive. Living on Universal Credit is hard; it’s extremely hard. It is literally living day to day and working out where my next food is coming from.”

Twenty pounds a week should not be taken away from people like that just as unemployment peaks. Iain Porter of Joseph Rowntree told the Select Committee that the current benefit level without the £20 uplift is

“at the lowest level since around 1990 in real terms”,

and that as a proportion of average earnings, it is the lowest ever. Inflicting that just as unemployment is peaking is indefensible.

The principal policy manager at Citizens Advice told the Select Committee:

“At the very least, if the uplift is not made permanent, we think it needs to be in place for at least 12 months while we go through the tricky part of recovery from this crisis.”

I hope Ministers will reflect and, having done so, decide after all not to make this cut in September.

[Huw Merriman (Bexhill and Battle) (Con) [V]]

Thank you very much indeed for allowing me to contribute to this afternoon’s proceedings, Dame Rosie. I want to talk about clause 5, on the freezing of personal allowance for four years from 2021-22, the resulting amendments, which would push the freeze back by a year, and the general position across the proceedings this afternoon with regard to allowances and the freezing or otherwise of them.

In the six years that I have been a Member of Parliament, it has been a matter of great pride that we have reduced the personal tax allowance. It was half the level that it is now, since it was raised to £12,500. That is the highest basic personal tax allowance across all G20 countries and means that a typical taxpayer is saving £1,200 in tax. More importantly, it has really sent out the message that work pays. It is no coincidence that, as well as the increase in personal allowance and the introduction of the national living wage levels that we have, we have seen record levels of employment and record lows in unemployment. It is a great success story. The covid pandemic has put all that at risk, though,which is why I find myself in the bizarre position of supporting the personal allowances freeze and intending to vote against any amendment tabled by those on the left to delay that freeze for a year. Ultimately, if we do not do something about our finances, we will do the country a great disservice and end up costing individual taxpayers—or non-taxpayers —even more by mismanaging our national debt.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 9th March 2021 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right. Our priority economically is to protect, support and create as many jobs as possible, and the support that we have provided to businesses will help to do that. My hon. Friend talks about breathing space; he is right to say that measures to improve businesses’ cash flow in the short term will help give them the breathing space they need to drive our recovery as they begin to reopen in the coming months.

[Stephen Timms (East Ham) (Lab)]

If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Rishi Sunak)]

Last week I presented to the House a Budget to protect the jobs and livelihoods of the British people, confirming more than £400 billion of support over this year and next, ranking as one of the most comprehensive responses of any country anywhere in the world. We also set out a fair and honest plan to begin fixing our public finances while also starting the work of building our future economy.

[Stephen Timms [V]]

How are the crucial EU negotiations on the memorandum of understanding on financial services progressing? Given its importance to the UK economy—by comparison, for example, with fishing—why was it not included in the overall deal?

[Rishi Sunak]

I cannot comment on ongoing negotiations; we remain committed to a constructive dialogue with our European partners regarding the memorandum of understanding, and I can confirm that those discussions are under way. With regard to financial services, I hope that the right hon. Gentleman saw the announcement of our listings review. I thank Jonathan Hill for his excellent work. We will take forward those reforms together with the Financial Conduct Authority to ensure that the UK remains one of the most attractive places anywhere in the world for companies to raise the finance they need to empower their future growth.

Future Relationship with the EU

Stephen Timms Excerpts

Thursday 10th December 2020 Commons Chamber

[Penny Mordaunt]

My hon. Friend is absolutely right in what he says and I thank him for that demonstration of support for the Prime Minister and the position of the negotiating team. I think it will help, in the coming days, for them to have heard that.

[Stephen Timms (East Ham) (Lab)]

In acknowledging its importance yesterday, the Minister for the Cabinet Office told me that he could “see no reason why” a data adequacy agreement with the EU should not be in place by the end of the month. Will the Minister confirm that one has actually been applied for? When is a decision expected? Does she recognise that, in the national interest, we must have one?

[Penny Mordaunt]

The Department for Digital, Culture, Media and Sport is the lead Department on that issue; I will ask the Secretary of State for Digital, Culture, Media and Sport to update the right hon. Gentleman on the precise timetable that the Department is working to. The right hon. Gentleman is right at the heart of what he says: there is no logical reason why all sorts of things cannot be agreed to—they are in the interests of all parties and I hope that that is the conclusion that the EU negotiating team come to in the coming days.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 1st December 2020 Commons Chamber

[John Glen]

The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of more than 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and it will run now until 31 March next year. This obviously comes at a considerable cost to the Exchequer, and while we keep all taxes under review, there are no plans to extend it further. Although the Government want businesses to pass on the benefit to customers if they can, obviously decisions on prices are ultimately for businesses rather than the Government.

[Stephen Timms (East Ham) (Lab)]

What assessment he has made of the economic effect of increasing legacy benefits by £20 per week in line with the recent increase to the standard universal credit allowance.

[The Chief Secretary to the Treasury (Steve Barclay)]

The £20 per week increase to universal credit and working tax credit is benefiting claimants by a total of £6.1 billion this year and is just one part of the wide-ranging package of Government support during this crisis.

[Stephen Timms]

The Joseph Rowntree Foundation points out that raising social security benefits not only helps hard-pressed families, but boosts the economy because the increase is likely to be spent. Does the Chief Secretary recognise that raising legacy benefits in line with the £20 a week increase he has referred to that has already been introduced in universal credit would boost the economy while also addressing the current unfair discrepancy between them?

[Steve Barclay]

I recognise that the right hon. Gentleman has, as Chair of the Work and Pensions Committee, raised this issue on a number of occasions, and he will know that the uplift continues until the end of March; the benefit to which he refers continues until then. The Government are not ruling anything out for the future, but it is right that we wait for more clarity on the national economic picture before making any further decisions.

Black History Month

Stephen Timms Excerpts

Tuesday 20th October 2020 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

In opening the debate, my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare), whom I congratulate, called for a review of the national curriculum so that we have a better understanding of the history being taught and the struggles and contributions of black people in it. She is absolutely right, and I am glad that proposition has had widespread support in this debate.

I was pleased to see that in the comprehensive improvement plan for the Home Office, which was published last month in the wake of the response to the Windrush scandal, recommendation 6 is to implement a learning plan on UK history in the Home Office. It is definitely needed in the Home Office, but it is also needed in schools and in wider society. I want to make the case for including in the review important recent contributions in the borough I represent.

I was in the borough in the early 1980s, when the first generation of Asian young people was making its way through the education system. In September 1983, after a series of incidents in and around Little Ilford School—just a few months before I became a governor of that school—racist thugs started to attack young Asian pupils, and the young people started to organise to defend themselves. Eight Asian youngsters, who were essentially the victims of racism, were arrested and charged with conspiracy. They were the Newham Eight. They secured massive community support, not least from other young people, and they were eventually cleared, or given minimal community sentences, because the courts recognised that they were acting in self-defence.

That campaign and many others secured change. Racism was defeated and the culture was changed. I pay tribute to those who, despite being young, took a stand and won. My friend and colleague Unmesh Desai, who is now a member for City and East in the London Assembly, where he serves with the hon. Member for Orpington (Gareth Bacon)—indeed, my hon. Friend the Member for Erith and Thamesmead was also one of his colleagues—and chairs the Police and Crime Committee, played a key role in the Newham campaign. I pay tribute to him and the Newham Monitoring Project, which started at that time and has planned a teachers’ resource pack on the Newham Eight story for next spring. We need our curriculum to cover important parts of our history such as that. One of the lessons is that the battles, having been won, often have to be fought all over again when the problems recur.

My hon. Friend also called for a race equality audit of Government policy, and I want to focus on one policy in particular: no recourse to public funds. Under that policy, many hard-working, law-abiding black families, during the 10-year period in which they have to pay thousands of pounds in fees to renew their leave to remain every two and a half years, are barred from applying for social security when they lose their employment, as many have done in this pandemic. There are 1.4 million people across the UK who cannot access the benefit system for that reason, including families with 175,000 children. Some 100,000 families have had that condition imposed on them in the past year.

The Unity Project, which does superb work on that issue, recently reported that, out of a group of 140 families with that condition imposed on them that it is working with, 77% are black African and 12% are black Caribbean. Certainly, the overwhelming proportion of those affected are from ethnic minorities. There is a disproportionate impact on black British children. Eighty-five per cent. of the families in the Unity Project research contained at least one child who is a British citizen.

That policy would not survive the race equality audit proposed by my hon. Friend. As the Unity Project puts it:

“NRPF is inherently more likely to affect BME British children than white British children indicating the indirect racially discriminatory impacts of the condition.”

Is that the intention of the policy? No, it is not, but it is the impact of it, and we need to address it.