Accelerated Payment Notices

Steve Baker Excerpts

Friday 18th March 2022 Commons Chamber

[Mr Steve Baker (Wycombe) (Con)]

I am extremely grateful to the House authorities for giving me the opportunity to introduce this Adjournment debate, which I have sought for a long time. I am also grateful to the Minister for being here, to my constituents for their help with the drafting of my speech, and to the House of Commons Library for its support.

I know that all Members in all parts of the House support the efforts of Her Majesty’s Revenue and Customs to secure the tax revenues that are necessary for the running of this country’s public services. To that end, we need procedures that enable those in HMRC to be efficient revenue collectors, especially when faced with the spectre of evasion and contrived but ostensibly lawful avoidance schemes. While these mechanisms need to give HMRC the tools that are necessary for it to work effectively, they must also be balanced and fair so that they do not inadvertently create injustices.

During the debates on the Bill that became the Finance Act 2014, I, along with several of my colleagues, expressed concern about the potentially far-reaching consequences of some of the anti-avoidance provisions being proposed. It was a concern widely held among taxation experts. In July 2014, an article in the Financial Times stated:

“The tax authority’s new powers have been criticised as unfair and even unconstitutional by the Law Society and Chartered Institute of Taxation. Concerns relate not only to the payment of disputed tax before any tribunal decision, but also the absence of a right to appeal.”

Our present Deputy Prime Minister and Justice Secretary, my right hon. Friend the Member for Esher and Walton (Dominic Raab)—whom I have notified of my mention of him—wrote a paper on this subject in February 2017. In one paragraph, he wrote:

“The UK taxman has gained new, punitive powers in recent years, which have corroded the basic fairness of the system...New powers include Accelerated Payment Notices…and Direct Recovery of Debts…Such powers undermine the basic tenets of British justice, allowing HMRC to bully taxpayers into paying debts without proper safeguards.”

I have asked my right hon. Friend if he will please make representations within the Government. He went on to argue that HMRC should be subjected to financial penalties when APNs were wrongly used. He observed:

“This would incentivise greater oversight within HMRC and prevent HMRC bullying taxpayers without proper recourse.”

I agree that the application of APNs has fundamentally changed the basic tax rules and the fairness of the system. The Law Society, the Chartered Institute of Taxation and our Justice Secretary—as well as me—all warned that APNs would create serious injustices.

I would like to illustrate an injustice by reference to the experience of one of my constituents and many like him. In the 2006-07 tax year, my constituent invested a considerable sum in two enterprise zone projects. At the time, this was uncontroversial; enterprise zones were created by the Thatcher Government specifically to attract private sector capital into the regeneration of depressed regions. That is a subject that should be close to everyone on the Conservative Benches under this Government; we are seeking to level up, and we need to do it with private sector investment.

The first example of such a zone was in 1981 in the London docklands on the Isle of Dogs. Those derelict docks were successfully transformed into Canary Wharf, essential to the success of the City of London as a world financial centre. For 30 years or so, the system worked well, and a large number of new jobs were created in erstwhile depressed regions, many of which had suffered from the decline of traditional industries, such as coalmining and steelmaking. This was levelling up 1980s style, and it proved very effective for decades.

Successive Governments offered 100% capital allowances to individuals who invested their money in projects within enterprise zones. My constituent invested in an office project in the Lanarkshire enterprise zone, which was fully let on completion to John Lewis Partnership and Carillion. His other investment was in a warehouse development in East Durham enterprise zone, initially let to a seafood processing firm and now operated by Biffa as one of Europe’s most advanced plastic recycling facilities—all worthy things. Both projects have been highly successful in creating valuable employment and economic activity in two formerly depressed areas—exactly what the Government sought when offering the tax incentives. However, the outcome for investors has not been at all successful; they have lost the whole of their investment.

Let us fast-forward to the banking crisis of the mid-2000s. Due to concerns about the wider state of the public finances, HMRC was instructed to aggressively pursue all opportunities to maximise tax receipts. Following the Finance Act 2014, HMRC levied APNs on taxpayers to recoup those capital allowances. That meant that they lost both their investment and the tax incentives that the Government had offered to induce them to invest. These taxpayers have no right of appeal against their savings being taken from them, and I am told that HMRC is not even prepared to discuss their cases with them, despite all this going back to early 2007. HMRC, having decided to pursue serial litigation, tells taxpayers that they cannot even begin to settle their cases until the litigation has played out. That could take years or even decades.

The then Financial Secretary to the Treasury, David Gauke, made this argument in favour of introducing APNs:

“The Government will not tolerate tax avoidance and Accelerated Payments has been a real game changer. It is no longer possible for these individuals to avoid tax and sit on the money while their affairs are investigated.”

Here is the problem for the Government: there is a real danger that that is exactly the tactic now being used by HMRC against taxpayers. We must be vigilant in ensuring that HMRC is not seizing taxpayers’ savings and then engaging in the same kind of delaying tactics that HMRC itself found unacceptable. It is the case that HMRC is now sitting on taxpayers’ money, including my constituent’s, while investigating those claims.

My constituent is in his 70s and, having seen his retirement savings taken by HMRC in 2016, has absolutely no idea when he will be able to recoup what has been taken from him. In the meantime, HMRC refuses to give any reason why it deems his enterprise zone projects to be undeserving of the promised tax allowances. To me, this is a really serious injustice.

Most of these taxpayers are just ordinary people—I do not particularly like the term, but they are normal people. They are decent, sensible people who were investing where Governments incentivised them to invest. Any of us could have been drawn into such things when the Government specifically offered tax breaks to get people to make those investments. My constituent is a retired surveyor. Many others involved are professional people in sought-after sectors, including the health service.

In 2014, the chief executive officer of HMRC, Lin Homer, apologised for the seven-year delay in settling these capital allowance claims. Some seven years later, we are no further forward, and we may be saying just the same thing in another seven years. I really feel that my hon. Friend the Minister could agree with me that this is wholly unreasonable and that, in a fair and democratic society, we should see things move on.

I think there is a compelling case for abolishing APNs and, indeed, direct recovery of debts. Although I would like that to happen, I will instead make four modest proposals for reform. First, there should be greater oversight of the APN process to ensure fairness; that is something the now Justice Secretary raised in 2017, and I believe it is long overdue. Secondly, APNs should be repaid to the taxpayer when a test case is lost. At the moment, HMRC is obliged to refund APN payments to the successful claimants in a litigation; however, they do not refund APNs to other taxpayers, despite HMRC citing the case as its basis for contesting those other taxpayers’ claims. That is anomalous, and should be changed.

Thirdly, HMRC should not be permitted to retain APN moneys for more than five years. That is a reasonable timespan over which to settle tax claims, and would act as an incentive for HMRC to expedite the process. If it chooses to take longer, often—as in my constituent’s case—by citing a lack of staff resources, the taxpayer should not be the one to suffer. Fourthly, as the now Justice Secretary recommended in 2017, there must be meaningful penalties where HMRC is shown to have levied APNs unreasonably. That should limit any bullying of taxpayers by HMRC by giving the taxpayer some financial recourse.

The public can only have confidence in our tax collection system if it is honest and fair, and seen to be so. The Government themselves offered investors these tax breaks, and it will look suspiciously like a scam if the system uses delay and unfair tactics to deny investors what they were promised. I believe my constituent’s predicament highlights precisely why some of us expressed concern about the enabling legislation. The basic fairness of the system has been corroded, and we must put that right, not only for taxpayers but for the people who work at HMRC. Having been on the Treasury Committee for a long time, I have seen how hard those people work and with what good intent, particularly during the covid crisis. My goodness, what things they achieved in making sure we built a bridge through this crisis—it is often forgotten that we did so. We need to resolve this system, in the interests of not only taxpayers but everyone who works at HMRC, so we do not end up with Members of Parliament reluctantly standing up in the House of Commons to criticise the work those people do in the public interest.

[The Exchequer Secretary to the Treasury (Helen Whately)]

I congratulate my hon. Friend on securing today’s debate and setting out his argument so clearly. I listened carefully to his constituent’s experience, and I take on board the issues he has raised. As I am sure my hon. Friend knows, I am unable to go into an individual case at the Dispatch Box, but I will set out the Government’s overall position on the accelerated payment notices that are the subject of this afternoon’s debate,.

The top line—as, in essence, my hon. Friend said himself—is that tax is paid for our public services. Without that revenue, schools could not open, roads would go unrepaired, and the NHS would be unable to treat the sick. Therefore, we all agree it is only right that the Government do all we can to make sure the correct tax is paid at the correct time, and that we clamp down on those who shirk their fair share. That is why the Government continue to take tough action to tackle tax avoidance, and Parliament has granted HMRC a range of powers to do so. Accelerated payment notices are one of those tools. As my hon. Friend mentioned, they were introduced through the Finance Act 2014 with the goal of changing the economics of tax avoidance, because tax disputes can often take years to resolve. Before APNs were introduced, users of tax avoidance schemes could purposely string out disputes and unfairly benefit from the cash generated by their liabilities until the matter was resolved. That situation was clearly wrong, especially when contrasted with the behaviour of the majority of taxpayers, who pay what they owe on time and swiftly resolve any queries with HMRC.



There is not, and has never been, any principle that disputed tax should sit with the taxpayer rather than the Exchequer. APNs ensure that the tax in avoidance disputes sits with the Exchequer while that dispute plays out. APNs have meant that the Government could remove this unjust advantage from tax avoiders, so that instead of enjoying unfairly gained cash, avoidance scheme users would have to hand over any disputed tax to HMRC until matters were resolved. That was a significant change.

In the eight years since their introduction, APNs have brought forward over £5.6 billion in revenue to fund those vital public services.

[Mr Steve Baker]

Is not the fundamental problem, though, that whether a scheme is an avoidance scheme is often contested? Is not the problem that whether or not this is a just retention of funds, it is often subject to the judgment of courts to see whether something is or is not lawful?

[Helen Whately]

I absolutely hear my hon. Friend’s point. Let me come to some of the checks and balances, and I take his wider point about HMRC’s powers in that regard.

To take a step back, I recognise, in the specific case we are discussing, how deeply worrying such a dispute can be for the individuals involved. That is one reason why fairness is HMRC’s guiding principle when dealing with such matters and why it is right that although, on the one hand, HMRC has the capability to robustly tackle tax avoidance, that is balanced with checks to make sure that it does not over-reach its powers.

We recognise that tools such as APNs must be carefully targeted. That is why they can be used only in tax avoidance cases and in limited prescribed circumstances, and they have important safeguards. There must be an active dispute between HMRC and a taxpayer either in the form of an open tax inquiry or a live tax appeal. That dispute must be about tax being either underpaid or overclaimed as a result of avoidance. And APNs cannot be issued unless one of the following applies. First, the individual issued with an APN has used an avoidance scheme that has already been defeated in court and they have consequently been given a follower notice—a legal request from HMRC to the individual to settle their avoidance dispute. Secondly, the information on the scheme must have been provided to HMRC under the disclosure of tax avoidance schemes—the DOTAS regime. Thirdly, HMRC must have taken action to challenge the taxpayers’ use of the avoidance scheme under the general anti-abuse rule—the GAAR. In addition to those conditions, APNs can be issued only with the approval of an oversight board of senior policy, technical and legal members of HMRC.

My hon. Friend correctly highlighted that there is no right of appeal against an APN. However, under the legislation, HMRC must examine any representations against a notice, and nothing is due from the taxpayer until HMRC has finished those considerations. I should point out that an APN does not in any way inhibit a taxpayer’s right to continue their dispute with HMRC or to appeal against its conclusions, and taxpayers who believe that their dispute is not being suitably progressed can apply to the tax tribunal to resolve it. I make it clear that if a dispute against HMRC is settled, any disputed sums paid under an APN will be repaid with interest, providing the taxpayer with redress where applicable.

In short, accelerated payments are a fitting response to the problem of individuals who purposefully spin out tax disputes and unfairly benefit from the funds in question. That has been backed up by the courts, which have examined cases where taxpayers have tried to challenge HMRC’s use of accelerated payments and have found APNs to be proportionate, reasonable and fair. Mr Justice Green said in one case that

“the provisions in the Finance Act 2014 are perfectly fair and adequate. There is no need for the Court even to consider the need for supplementation through the implication of additional duties.”

HMRC continues to ensure that APNs are used appropriately. For example, the implementation of APNs was included in a review of HMRC’s powers and safeguards. Following that review, the published guidance on APNs was updated. I stress that APNs do not increase someone’s tax liability. Instead, they simply require an individual to pay the tax they would have owed had they not joined an avoidance scheme.

[Mr Baker]

I am extremely grateful to the Minister for giving way. As she goes through her speech, I am reminded of something that I have impressed on Ministers in the past. A problem with DOTAS is that perfectly decent, normal people who want to pay the right amount of tax can get drawn into schemes because the nature of a DOTAS registration is misrepresented. Could we have a boilerplate that firms are required to place prominently before their customers, so that customers can be told, “The reason this scheme is registered with DOTAS is because HMRC thinks it doesn’t comply with the rules. It is not how Parliament intended things to work, and you will probably have HMRC coming after you later”? If normal taxpayers who intend to pay the right amount tax could see such a boilerplate, they would not be drawn into such schemes and we would not have nightmares such as this.

[Helen Whately]

My hon. Friend makes an important point about how, if I understand him correctly, we can help taxpayers have the information and awareness that they may be taking a tax risk—a risk of doing something that could be seen as tax avoidance. HMRC already takes steps to communicate in that way, and I am happy to take up his specific suggestion with the Financial Secretary to the Treasury, whose area this is, to see whether more can be done.

Returning to the point I was in the middle of making, I recognise that individuals in such circumstances can face significant bills, which is why HMRC is committed to working positively and empathetically with anyone with an APN facing payment difficulties, including, where appropriate, agreeing more time to pay. HMRC teams are trained to identify customers who may need extra help managing their financial affairs. I urge anyone who is worried about being unable to make a payment to contact HMRC to work out an individual approach.

In conclusion, I emphasise that Ministers cannot intervene in HMRC’s operational decisions and individual cases, but if HMRC is directly provided with information about this case, its officers will look into it. The Government value every penny of tax revenue. That is true at any time, but particularly so now as we recover from the economic consequences of covid-19 and face new demands on public finances. That is why HMRC must continue to tackle tax avoidance and pursue the tax owed to the Exchequer.

Question put and agreed to.

Oral Answers to Questions

Steve Baker Excerpts

Tuesday 15th March 2022 Commons Chamber

[Helen Whately]

I thank the hon. Gentleman for his question. I also represent a rural constituency with significant agricultural interest, and I assure him that we have protected agricultural funding through this Parliament. We are committed to levelling up across all parts of the UK, in rural as well as urban areas.

[Mr Steve Baker (Wycombe) (Con)]

What steps is the Minister taking with our right hon. Friend the Secretary of State for Levelling Up, Housing and Communities to ensure that areas that need levelling up are able to attract private sector investment?

[Helen Whately]

That is a very important point. Levelling up is not just about public sector investment—indeed, the lion’s share of investment in future growth in our economy will come from the private sector. One important thing that the British Business Bank is doing with its regional fund is crowding in private sector investment, so that we will get more private sector investment on top of the public sector investment we are putting in.

Customs (Amendment) (EU Exit) Regulations 2022

Steve Baker Excerpts

Monday 14th March 2022 General Committees

[Mr Steve Baker (Wycombe) (Con)]

The statutory instrument substitutes “Great Britain” where “United Kingdom” can be found. It does so repeatedly and explicitly. I listened carefully to my right hon. and learned Friend the Minister and to her explanation that it is technical, but here is the problem. According to article 4 of the protocol:

“Northern Ireland is part of the customs territory of the United Kingdom”.

That was an absolutely crucial concession by the European Union in the course of negotiations.

My right hon. and learned Friend said that trade will continue smoothly, but she subsequently acknowledged that there are real problems. I have just come back from Belfast, and I can tell her that temperatures there are running very high in the Unionist community. GB suppliers of note are not shipping to Northern Ireland—they are simply refusing to supply products from Great Britain to Northern Ireland—and other goods arrive in Northern Ireland from Great Britain with customs declarations attached.

People are forgetting that the Belfast agreement operates east-west as well as north-south. This is a matter of the most profound concern to the Unionist community. The statutory instrument, by substituting “Great Britain” where “United Kingdom” should be found, appears to run up the white flag and say that we are not negotiating on the protocol, that we will not use facilities in the treaty that were foreseen.

The protocol was always unfinished business. That is why some of us, when we backed it, said that it was a tolerable path to a great future. The Prime Minister became Prime Minister on the assurance given repeatedly to Eurosceptics:

“The withdrawal agreement is dead”—

his words. We asked him, “You won’t just remove the backstop, replace it with something else and change the destination, will you?” No, the withdrawal agreement is dead. He then went on to do just what he told us he would not do. Now, in a statutory instrument that replaces “United Kingdom” with “Great Britain”, we find that he appears to be doubling down on not fixing the protocol.

Surely we all now agree that the protocol is not doing what it promised. It is dividing the two communities, it has destroyed political confidence, it has ended power sharing and it has caused trade diversion. Those things are incontrovertible. They are good reasons for change. Not only that, they are reasons for change that were foreseen in the protocol itself. It is especially galling that the Government are not using article 16, which is of course limited in what it can do, when during the worst of the pandemic, the EU itself used article 16 to try to deprive the UK of vaccines—an extraordinary and aggressive act.

We must now save the Belfast agreement—I mean, save it—by recognising that it applies east-west. We must take steps to restore power sharing by doing what is necessary to bring Northern Ireland back into the UK single market. That is the problem with this SI: it seems to further entrench—it is very explicit in the regulations—the substitution of “Great Britain” where “United Kingdom” should be found.

We need to use article 16 safeguards immediately, before the Stormont elections. Any suggestion that devolved purdah prevents our national Government from doing what is in the interests of the whole country is entirely risible. Any suggestion that Putin has vetoed action to restore our constitutional settlement is outrageous. Brexiteers would be rightly shamed into silence if we attempted that ludicrous argument in reverse. Violence does not have a veto—neither Putin’s in Ukraine nor any closer to home. It has been reprehensible how many supporters of the protocol have prayed in aid violence, the risk of violence and threats of violence to support their cause. That is not how we do things, and we should never surrender to threats of violence.

In any event, the question of a trade war that plagues us has been asked and answered. There are those saying that the EU would start a trade war if we did what was necessary to alleviate the problems of the protocol, but the public told us to get Brexit done, and they gave the Government an enormous—surprisingly large—majority to do it. The nation overall was willing to do what was necessary to get Brexit done, including possibly risking a trade war. The question was asked and answered, yet still we seem to be too reticent—too nervous—to do what the country instructed us to do.

I will begin to conclude my opening remarks. If the Government do not resolve the problem of the protocol, they will find themselves going into the next election saying, “Actually, Brexit’s not quite done.” Quite a large number of Members of Parliament in certain seats will not be able to put it on their leaflets and will have to say, “I’m afraid Brexit’s not quite done.” I expected that by now we would have resolved the problems of the protocol by using the facilities in it to improve and replace it. That has not happened. At the moment, the Foreign Office’s approach is strategic patience, I understand. Strategic patience will not do for the people of Northern Ireland. It is not fair and reasonable to Unionists, under the east-west provisions of the Belfast agreement, to continue as we are.

The cover of the Ukraine conflict has enabled the Prime Minister to avoid confronting the problem of the protocol, but I say to the Government that when the Ukraine conflict comes to an end, if it appears to Eurosceptics, and indeed to Members of Parliament recently elected on the promise that Brexit would be done, that Brexit is not quite done, and if Brexiteers lose confidence in the Prime Minister and his ability to deliver change on the protocol, what on earth do Ministers, Whips and party members think that they will do? It seems to me that the answer is obvious.

I know that this will amuse some Opposition Members, but I say to the Scottish National party spokesman that he will be left comically eating his words if he ever gets his way. He just spouted such nonsense about Brexit. Imagine that Scotland had had its independence from the UK. My goodness—the time and effort that they would all spend trying to untangle our Union would eclipse the problems that we have. I am grateful to you, Mr Sharma, for allowing those extended remarks.

Economic Update

Steve Baker Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rishi Sunak]

If the hon. Gentleman looks at the remarks I made earlier, he will see that I was clear that there are 400,000 more people on payroll, and that is the right use of that statistic. It is obviously harder to track those in self-employment because we have real-time information numbers from HMRC for those on payroll. We are proud of our track record on jobs. Unemployment in this country was forecast to reach 12%, with millions of people unemployed, but unemployment has now fallen for almost 10 straight months. It is almost back to the record lows we saw pre-pandemic, and we have record job vacancies and record low redundancies. That is all evidence that our plan for jobs is working.

[Mr Steve Baker (Wycombe) (Con)]

As somebody who supported a VAT cut, may I invite my right hon. Friend to confirm that people in Wycombe will receive more help faster under his plan?

[Rishi Sunak]

I can give my hon. Friend the reassurance that the vast majority of people in his constituency will receive £350. Those in council tax bands A to D will get £150 in April. That is more than a VAT cut would have given them, and it will come faster. I am grateful to have his continued support.

Covid-19: Government Support for Business

Steve Baker Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

The right hon. Gentleman legitimately raises a point about the whole range of businesses affected. That is why the Government’s priority was to give local authorities maximum discretion in how to allocate funds. As the Chancellor has done yesterday, today and every day, he will continue to focus on the needs of the economy and businesses up and down the country.

[Mr Steve Baker (Wycombe) (Con)]

I am reassured that my hon. Friend the Minister will take out his team on Monday. Like him, I took a lateral flow test this morning. However, is it not the case that when officials give advice, it has a massive capacity to herd the public into particular behaviours? Therefore, while the Government have formally allowed hospitality businesses in particular to stay open, the reality in my constituency is that fantastic businesses such as The Old Queens Head in Penn and Tylers Green have seen massive cancellations. What reassurance can he give me that when officials speak—particularly from podiums at press conferences—they stay within the bounds of the policy decided by Ministers, and that what Ministers have decided takes into account the broad spectrum of collateral harms that follow from, for example, encouraging people not to mix together?

[John Glen]

It is really important that we follow the best advice to get jabbed, take those lateral flow tests and wear masks. However, where we possibly can, we should also continue to engage with our local communities and support our businesses at this difficult time. Of course, that means that judgments have to be made, and people must take responsibility for their decisions in the light of that guidance.

Co-operatives and Mutual Societies

Steve Baker Excerpts

Tuesday 14th December 2021 Westminster Hall

[Dame Angela Eagle (in the Chair)]

Before we begin, I remind Members that they are expected to wear face coverings when they are not speaking in the debate. This is in line with current Government and House of Commons Commission guidance. I remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming on to the parliamentary estate. This can be done either at the testing centre in the House or at home. Colleagues may wish to know that I have just had a negative one, so I think I, at least, am safe for now. Please also give each other and members of staff space when seated and when entering and leaving the room.

[Mr Steve Baker (Wycombe) (Con)]

I beg to move,

That this House has considered the contribution of co-operatives and mutual societies to the economy and public life.

I am delighted to serve with you in the Chair, Dame Angela, and I am very grateful to everybody who has attended. I am slightly conscious that today’s other business might have distracted some of my Conservative colleagues who signed up to the application. I lament the fact that they are not here, but there we are—I cannot think what else is going on at the moment. I am very grateful to Co-operatives UK for inspiring this debate and for providing an excellent brief, on which I will rely closely.

A free society—one based on a market economy—really must have within it a place for co-operatives, and the Conservative party might not always have embraced that idea as tightly as I might have liked. Given the length of time for which we have been in power, and given how long we will have been in power by the next general election, I hope that the Conservative party can champion and not merely embrace co-operatives as a really important part of a free society. Co-operatives can be harnessed as tools to expand opportunity, wealth, liberty, pride and aspiration more fairly in the UK, both geographically and socially. They are a powerful tool for funding and implementing the UK’s new net zero strategy.

The co-operative economy is diverse, resilient and growing. There are now more than 7,000 independent co-operative businesses in the UK, with a combined annual turnover of almost £40 billion and more than 250,000 employees. They trade in sectors as diverse as agriculture, renewable energy, retrofitting, the creative industries, manufacturing, distribution, wholesale, retail and finance. In 2020, the turnover of the co-operative economy grew by £1.1 billion, and twice as many co-operatives were created as dissolved. Most co-operatives in the UK are consumer-owned, but in recent years we have seen a marked growth in community ownership, worker co-operatives and freelancer co-operatives. Many of the UK’s largest co-operatives comprise other businesses, such as farmers co-operatives.

By international comparison, though, the UK co-operative economy is small and growing slowly. Less than 1% of businesses in the UK are co-operatives. Germany’s co-operative economy is four times bigger than the UK’s, and France’s is six times larger. That might well derive from history, but I say to the Government that now is a moment when we can choose positively to take a path that makes it more possible for co-operatives in the UK to grow. The UK’s co-operative start-up rate is also comparatively low. In recent years, South Koreans have created 12 times more co-operatives per head of population than we in the UK have. Perhaps the co-operative model is underused and is something of a best-kept secret in our society and economy.

Co-operatives are great vehicles for creating and sustaining decent, rewarding and empowering livelihoods. For example, after five years of trading, the average worker co-operative in the UK supports six times more livelihoods and is almost twice as likely still to be trading as start-ups generally. According to a multi-country study, although they are currently far fewer in number than businesses generally, worker co-operatives are on average larger and employ more people. There are examples of co-operative entrepreneurship, for example the taxi drivers in Cardiff who clubbed together to set up their taxi-hailing co-operative, and of participation in existing freelancer co-operatives, such as the new co-operative mutual aid platform, We-Guild, or the creatives’ co-operative Chapel Street Studio.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The hon. Gentleman mentioned the taxi co-operative in Cardiff. I was delighted to work with a number of local drivers who were dissatisfied with their working conditions in other firms and who got together, worked with the Wales Co-operative Centre—to whom I pay tribute—and set up the remarkable co-operative, Drive, which references the Welsh phrase “Thank you, Drive!” at the end of a journey. I wholeheartedly agree with what the hon. Gentleman said.

[Mr Baker]

Marvellous. I am looking forward to the hon. Gentleman’s contribution later, when I hope he will tell us all about that. It is wonderful to have cross-party agreement on some of these subjects, and I hope we can drive forward the agenda.

Large co-operative employers are at the forefront of good business behaviour when it comes to investing in people. I think that follows directly from the ethos of the co-operative movement—the idea of valuing everybody equally and having open and inclusive membership, for example. I will not go through all the details, because we will be here for an hour, but co-operative models can be used as tools for community-led economic development. There is a wide range of examples from right across the country—I hope Members will share some—which show how co-operatives can be at the heart of bringing people together.

What can co-operatives achieve? They can expand wealth and well-being. The efficacy of the model can lead to a proliferation of co-operatives that can help to strengthen the private sector, including in places that need it the most. That is because co-operatives are distributive by design. Value, wealth and well-being are shared more broadly through day-to-day activity.

A growing body of data shows that co-operatives are especially resilient businesses. At a time like this, resilience could not be more important. Official data in our country shows that co-operative start-ups are twice as likely as start-ups generally to survive the first five years of trading, for example, with similar findings in other countries. Separate research shows that co-operatives in the UK that raise equity via community shares—a crowdfunding model unique to co-operatives—are more resilient still, with a 92% survival rate.

Official data also shows that co-operatives were four times less likely to permanently close in 2020 than UK businesses generally. Research published by Scottish Enterprise shows resilience among employee-owned businesses in Scotland throughout the pandemic. The fact that twice as many co-operatives were created as dissolved in the UK in 2020, when there was a net reduction in the number of businesses in the UK overall, suggests that co-operative entrepreneurship was a comparatively resilient force during the economic and psychological shocks of the pandemic.

Why are co-operatives so resilient? They have purpose, and their ownership and governance dictate long-termism. In an economic shock, it is the members making the tough decisions in their collective, long-term interests; it is not investors demanding lay-offs to protect short-term returns. Co-operatives also patiently build up and re-invest reserves and use members’ capital wherever possible, rather than piling on debt to achieve faster growth. My hon. Friend the Minister knows some of my views about excess debt creation.

I am conscious of time, and I want to give way to other Members, but I will say that at a time like this, when we need to recover to from coronavirus, co-operatives can be an ever more important part of our society in bringing people together and giving them a shared purpose and an equal stake in the business in which they work.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman is speaking about co-operatives now, but I am sure he will come on to mutuals, which are also included in the heading of the debate. Does he agree that it has been remarkable and refreshing to see the members of the mutual society LV= use their power in the past few weeks to demonstrate exactly what he has referred to? They wanted power to go to the membership, as opposed to going to shareholders for a fast buck.

[Mr Baker]

I am grateful to the hon. Gentleman for his intervention. I hope to make a few remarks about mutuals, but I am focusing first on co-operatives. I have been involved in the inquiry into LV= by the all-party parliamentary group for mutuals. LV= made quite a compelling case, but the point is that, as he said, it is up to the members what they do. In a free society, we make progress through trial and error. It might well be that that members have made a mistake in rejecting the bid, but it is their right to do so; it is their right to choose.

I am a huge fan of mutuals, because I can see that they are bound to create a set of incentives that support the people whom the business serves. I remember in my youth being very disappointed that so much carpetbagging was going on, with people taking £500 in exchange for demutualising. I was very disappointed at the time, and even as a teenager I could see that it was not a good idea. In the case of LV=, I fear that things are not going where they should. I very much hope that my hon. Friend the Minister will ensure there is a good quality inquiry into what is going on, and into how regulation can better support people’s desire to support the mutual spirit in the future. I think he would agree that we cannot afford to be romantic and exempt co-operatives and mutuals from the realities of commercial life, or the exigencies of things such as competition law.

I turn to performance and efficacy. The principle of mutual purpose and democratic governance is found in all co-operatives, and it has significant advantages. It is a proven way for people with a shared interest to collaborate effectively, achieving things together that they could not on their own. That is a great way to expand liberty.

Liberty is something that should be exercised in community. One of my favourite scholars said:

“Society is cooperation; it is community in action.”

We should remember that entrepreneurship is a great search to help other people; that is what entrepreneurs seek to do. If people make a profit justly, without breaking the rules or exploiting others, that is a good thing. It shows that those people have served others, according to their assessment of what has been produced. I believe that that combination of mutual interest and service to others through a market means that co-operatives should be a crucial part of our society.

I am conscious of time, so I will wrap up. The Co-operatives UK brief makes a number of suggestions to the Government, including that there could be more co-operatives, and some particular policy suggestions. There are three themes: to have better tailored business support and enterprise finance for existing co-operatives, co-operative entrepreneurs and the conversion of existing businesses to become co-operatives; to have legislative and non-legislative action to provide a more enabling corporate framework, through law, regulation and processes; and to have tax support for investment in co-operatives and co-operative development. I will not go through the full brief, but Co-operatives UK intends to publish it after the debate.

I appreciate this opportunity to hear from Members from all parts of the House about co-operatives. We can all enthuse about co-operatives, even as we remain, as I am sure the Treasury will do, robustly pragmatic rather than romantic. As the Conservative party softens and become more inclusive and society minded in the 21st century, we ought to say that co-operatives and mutual societies are an important part of our society that should be fostered in everyone’s interests, particularly as we come back from coronavirus. We need to build up the mutual relations of interdependence on which we all rely.

[Dame Angela Eagle (in the Chair)]

It is my intention to call the Front-Bench speakers from 10.30 am, so you can do the maths yourselves in order for everybody to get the chance to speak.

--- Later in debate ---

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

Thank you, Dame Angela. You will be pleased to hear that I will not inflict 20 minutes of Plymouth co-operatives on everyone. However, I would like to thank the hon. Member for Wycombe (Mr Baker) for introducing this debate. It is really important that co-operatives and mutuals have a voice in Parliament; that is why, for the past many decades, we have had a Labour and Co-operative group of MPs that has been making the case for co-operatives. I am proud to be a Co-operative party MP; those are not just some extra syllables in my job title. Being a Co-operative MP is not just a label; it is an instruction to campaign for mutuals, fairness, co-operation, doing business in a fairer way and sharing wealth and power. Those of us in the Co-operative party take every opportunity to put forward the huge advantages of co-operative and mutual business models.

We have seen huge changes and progress in recent years, both under the last Labour Government and, where campaigns have been successful, under the current Government. However, we are seeing the context change; we are seeing a hollowing out of our communities and a more precarious environment for businesses. However, we are seeing no less entrepreneurism and no less drive and creativity from our businesses. People are now looking at alternative models to organise their business to make a difference.

When businesses fail, it is often because those in charge have become removed from the realities of the shop floor. That is where mutuals and co-operatives have an advantage over other business models. When workers have a stake in their own business, they can contribute to the decisions that are made; they can see that businesses can be better run, more sustainable and better focused on not only the product and service they offer to their customers, but the people who work in that business to make it better every day.

Co-operatives provide an opportunity to renew our high streets and villages and to give everyday people a say in how their local community works. The opportunity to expand the co-operative and mutual sector is immense. I would like to see the Government adopt Labour’s policy of doubling the size of the co-operative sector. It is a bold, challenging ambition; however, if Ministers put in place the right conditions to make it happen, it is also achievable.

Doubling the size of the co-operative sector would lead to more sustainable, greener and better jobs in all our communities, more people having a stake in the businesses they work for and, as we heard from the hon. Member for Wycombe, better productivity and better outcomes at the end of it. It is a win-win-win situation. There are only two things that hold it back: a view that the market will provide for itself—in which case, let us remove the legislative blocks that sometimes discriminate against co-operative and mutual businesses—or a view that it will not provide the type of future we need. I do not see a future that does not include more mutual and co-operative businesses. That is what we heard from the hon. Member for Wycombe, and I hope that is what we will hear from the Minister when he gets to his feet.

In the south-west, we have long believed in the power of co-operatives to strengthen our economy. In Plymouth, we have co-operatives such as Nudge Community Builders, which works to transform life chances in one of our poorest communities—not just in Plymouth, but in Britain—by rebuilding and refurbishing buildings along Union Street and Stonehouse. It is transforming that community by not only improving the buildings, but creating spaces for start-ups, social enterprises and community services. It is helping to restore pride in something by allowing people to invest in their own community through that effort.

I bought shares in Nudge’s co-operative share issue to help reopen the notorious pub The Clipper, on Union Street, taking it from a 24-hour boozer to an amazing community space. It has transformed that community just by changing one pub. I have also bought shares in its latest effort, to reopen the Millennium building—a former nightclub and cinema, and the scene of far too many antics to discuss in polite company—as a new hub for live music, with a brewery, a shop and restaurants, and a place for people to come together. That building has stood derelict for decades, and it is a co-operative and community venture that is bringing it back to life. That share issue is still open, if the hon. Member for Wycombe wants to show his support. I know that Nudge would welcome a final push to help get it over the line.

However, it is not just Nudge that has done brilliant things using co-operative share issues. I also praise Plymouth Energy Community.

[Mr Steve Baker]

The hon. Gentleman has spoken with such passion and enthusiasm—he could not see, under my mask, the enormous smile he put on my face. If he sends me a link to Nudge’s site, I will have a look at investing. I would be delighted to consider it.

[Luke Pollard]

I thank the hon. Gentleman for his enthusiasm. I am really passionate about this issue, and people in Plymouth that have invested are passionate too. It is not just about investing. Co-operative share issues have not had the press they deserve, because it is not just that putting that 50 quid in a co-operative share issue or a mutual will return more financial benefit than leaving it in a bank where interest rates are low. It is about the social purpose—the social multiplier—and the economic multiplier that will come from that investment. It is taking place not only in Plymouth, but right around the country.

Plymouth Energy Community has funded solar panels on the roofs of our city’s primary schools and our largest leisure centre, as well as on the top floor of all our car parks. It has opened Plymouth’s first solar farm in Ernesettle and it is about to apply for planning permission for a second solar farm at Chelson Meadow—next to Saltram House—which is the scene of Plymouth’s largest landfill. I will support that share issue when it opens, too.

CATERed is another superb example of a co-operative in Plymouth. Faced with the challenge of poor school food, the Labour council brought together food provision into a co-operative, which our primary schools and some secondary schools have now bought into. That provides not only healthy, nutritious food but an investment in the staff who provide that food—in the kitchen and serving—which is unbelievable. What is important is that those staff feel valued, the food is healthier, the profits are reinvested and there is not a turkey twizzler in sight. It really is a model for others to follow.

--- Later in debate ---

[Mr Baker]

I have immensely enjoyed this debate and everybody’s contributions to it. It is an honour to be the person who happened to have their name on the top of the application, so it is with some humility that I speak last. I particularly want to say how much I enjoyed the remarks of my hon. Friend—and on this issue, he certainly is my hon. Friend—the Member for Plymouth, Sutton and Devonport (Luke Pollard). The sheer enthusiasm he has for the contribution of co-operatives to his community said more than any number of statistics that any of us might have cited. That is the reality of co-operatives and mutuals in our society. They are deeply loved institutions, precisely because their members feel part of them: “It is my mutual. It is my co-operative. I am part of it.” I only hope that all of us might aspire to the degree of earnest and heartfelt support for those institutions that the hon. Gentleman has put on record, and I hope he will not mind me embarrassing him by expressing such gushing support.

I am very grateful to my hon. Friend the Minister for what he has said. He has been very clear that the Government want to support mutuals and co-operatives. I will write to him later today with the Co-operatives UK brief, which is quite extensive, and will specifically draw its recommendations to his attention, in the hope that he might be able to take up some that do not conflict with his justified pragmatism and his desire not to be too romantic. I know that my hon. Friend would not want to be accused of an excess of romanticism.

I am extremely grateful for this opportunity to sum up the debate, and to all hon. Members who have spoken. On a day like today, it is a treat to have spoken in unity rather than in division.

[Dame Angela Eagle (in the Chair)]

I think romance is always required in politics.

Question put and agreed to.

Resolved,

That this House has considered the contribution of co-operatives and mutual societies to the economy and public life.

Oral Answers to Questions

Steve Baker Excerpts

Tuesday 7th December 2021 Commons Chamber

[John Glen]

The Government very much recognise the challenge that people are facing, which is why we have introduced a range of interventions, including: the warm home discount; the household support fund, giving £500 million to local authorities to distribute; changes to the taper rate; and an increase in the national living wage. That range of interventions will help with the cost of living challenges, and will help many of the hon. Lady’s constituents.

[Mr Steve Baker (Wycombe) (Con)]

Is it not the case that the dreadful seeds sown by years of ultra-cheap credit and quantitative easing are now bearing their awful fruit through inflation, the ultimate stealth tax?

[John Glen]

I do not agree with my hon. Friend’s characterisation of the causal relationship, but I recognise that the Bank of England continues to be responsible for monetary policy. My hon. Friend has always held distinct views that represent a particular school of economists, and I will continue to listen carefully to what he has to say to the House.

Value Added Tax (Distance Selling and Miscellaneous Amendments No. 2) Regulations 2021 Customs Tariff (Establishment and Suspension of Import Duty) (EU Exit) (Amendment) (No. 2) Regulations 2021

Steve Baker Excerpts

Thursday 18th November 2021 General Committees

[Mr Steve Baker (Wycombe) (Con)]

I am delighted to have this rare opportunity to speak in a Delegated Legislation Committee. It seems these days that I only obtain this pleasure by swapping with a colleague, and I cannot think why there is a reluctance to appoint me.

I absolutely welcome the simplified accounting schemes, and I commend to Ministers the idea of going further to simplify them. In particular, I hope the Minister could tell us whether it is possible to increase the £135 limit on the IOSS, because the more people who are drawn into simpler schemes, the better. Since he raised the issue, I hope that the hon. Member for Gordon will cast his mind forward with his own arguments to the idea of Scotland leaving the UK while the UK remains out of the European Union. His arguments this morning might come back to haunt him.

It is tempting to say that, until today, I had no idea that our excellent Government and officials could make minor or consequential errors, but that would be to mislead the Committee. I am grateful that these corrections are being made. These instruments enable UK companies to participate in EU member state VAT schemes. Will my right hon. and learned Friend the Minister reassure me that EU law and the jurisdiction of the European Court of Justice will not end up extending over UK businesses, other than those that actually do business in the EU?

Paragraph 8.1 of the explanatory memorandum to the VAT regulations says that the legislation ensures

“that the UK’s e-commerce VAT regime operates as required by the NI Protocol.”

Will my right hon. and learned Friend set out the extent to which she thinks the Northern Ireland protocol constrains the UK’s e-commerce VAT regime overall? I very much hope the Government are able to suspend other tariffs, and keep them suspended, in the interests of free trade.

[Lucy Frazer]

It is great to see Parliament working at its best—when there are constructive comments in which everybody agrees with the principle of what the Government are doing. I am grateful that the Opposition Members are not opposing these necessary measures.

The hon. Member for Ealing North mentioned errors. I want to highlight that there are 16,000 tariff lines and 8,000 pages of legislation, and we are correcting six errors. The legislation was put in place at pace. Of course, errors are unfortunate, but these were very small. he also asked about a cumulative impact statement. We do produce impact statements, but I will take his suggestion away.

I would like to address the points made by my right hon. Friend the Member for Wycombe—

[Mr Baker]

Only honourable!

[Lucy Frazer]

Then I will address the points by my hon. Friend the Member for Wycombe. It is the Government’s policy to simplify taxation more broadly. We want to simplify our relationship with Northern Ireland, and we are progressing negotiations to achieve that. He has asked me a couple of questions that, unfortunately, go beyond the ambit of this narrow debate on VAT legislation and correcting minor errors about the relationship between businesses, EU law, the jurisdiction of the Court and the Northern Ireland protocol. I know that those matters are dear to his heart, but all I can say is that we are trying to achieve an appropriate landing point that is satisfactory to the people of Northern Ireland and the EU in the negotiations between Lord Frost and the EU negotiators. On that basis, I commend the statutory instruments to the House.

Question put and agreed to.

CUSTOMS TARIFF (ESTABLISHMENT AND SUSPENSION OF IMPORT DUTY) (EU EXIT) (AMENDMENT) (NO. 2) REGULATIONS 2021

Resolved,

That the Committee has considered the Customs Tariff (Establishment and Suspension of Import Duty) (EU Exit) (Amendment) (No. 2) Regulations 2021 (S.I. 2021, No. 1191).

Health and Social Care Levy

Steve Baker Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Alison Thewliss]

The hon. Gentleman makes an excellent point. For young people who have perhaps struggled through this year, who have graduated and who are going out into the world of work, it is a real hammer blow to their prospects.

Many families are already facing a historic £1,040 cut to their annual incomes and are staring down the barrel of impending cuts to universal credit and working tax credit. The Joseph Rowntree Foundation has described the new levy as adding “insult to injury”. The New Economics Foundation has calculated that 2.5 million working households will be affected by the £20 a week cut to universal credit and the increase in national insurance. On average, they will lose out by £1,290 in the next financial year. Working households are doing their very best to put food on the table and support their children, and this cruel UK Tory Government caw the legs from under them.

[Mr Steve Baker (Wycombe) (Con)]

rose—

[Alison Thewliss]

If the hon. Gentleman can explain why that is fair to the families who have been working so hard, I will be glad to give way.

[Mr Baker]

I wonder whether the hon. Lady has popped out to the Vote Office and picked up the distributional analysis that the Government have published, which shows the impact across the deciles of income in this country: it just does not bear out what she is saying. I encourage anybody out there to pick up that analysis and have a look.

[Alison Thewliss]

I have seen a different analysis from the New Economics Foundation; I urge the hon. Gentleman to look at it, because it gives a very different picture from the one that the Government are presenting today, which is why we need more analysis of the policy before the Government go forward with it.

The policy will also have an impact on our recovery from the pandemic. Businesses, which have weathered such a challenging year, have spoken out against it in the strongest terms. The Federation of Small Businesses has called the national insurance hike

“anti-job, anti-small business, anti-start up”,

pointing out that the increase to national insurance will

“stifle recruitment, investment and efforts to upskill and improve productivity in the years ahead.”

--- Later in debate ---

[Mr Steve Baker (Wycombe) (Con)]

I want to begin by thinking through what Labour would do if it were in power. [Interruption.] I am very grateful that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) has just outlined some of the things that he might do. If I understand the Labour Front Benchers correctly, I think they suggested that they would use stamp duty or various transaction taxes on assets. I am grateful that Ministers are here, because I think that they know, as I know, that there is no way that the money needed would be raised—[Interruption.] I am grateful that the Minister says, “Correct”. It says in the document that not enough money would be raised from stamp duty and transaction taxes on assets. It is fanciful, and the hon. Gentleman’s proposals are likewise, I am afraid.

We would need to change one of the big taxes. Would Labour Members put up VAT from 20%? Of course they would not because it is regressive. It is a bad idea. It is already too high and it already hits everyone, so they would not put up VAT. Would they put up income tax? I think they would get the same advice that these Ministers have had from the same officials. I think they might be advised that we are already in a position where income tax is rather too dependent on the decisions of a small number of top earners. This is the sort of evidence we have had at the Treasury Committee for a very long time, so I think that we would find that, actually, they were not able to put up income tax.

So where would that leave Labour? That would leave it with the big tax that has always, as the document points out, been used to fund health and social care: national insurance contributions. I think that Ministers, if they were from Labour, would be presented with a distributional analysis like the one I have here, which our Ministers have. Labour Ministers would look at it and see that actually, distributionally, it is really only the top two deciles who are net losers. Deciles from the bottom through to No. 8 are either gaining or, in the case of the eighth decile, right there in net overall, neither gaining nor losing. I think that what Labour would do if it was in power is what it did last time it was in power and needed money for the NHS: it would put up national insurance contributions.

My constituents in Wycombe are very reasonable people. While knocking on doors in Marlow Bottom just last Saturday, I discovered constituents who recognise that we have suffered an enormous pandemic that has done so much to damage the public finances and people’s lives, as other hon. Members have said. But where are we going? That is the second point that I want to touch on. This is what I think Labour would do in power, and that is the problem—sorry, Ministers.

If we look, as I am sure colleagues have done, at the future debt trajectory for the United Kingdom produced by the Office for Budget Responsibility, we can see that our public finances are in an unsustainable state. I could easily give quotations—they are in my pocket—but if I recall correctly, the OBR’s 2018 report describes debt getting to about 260% by about 2057 and says something like, “Of course, policy would have to change by then.” I have always taken that to be a euphemism for “Of course, we would have to default on our age-related spending promises.” That is the consistent finding of the Office for Budget Responsibility on our long-term public finances. Sooner or later—in all our lifetimes, hopefully—we will find that the state cannot afford the promises that it has made to older people.

That is the problem that we face today. It is not about the national insurance contribution rise planned today, which I believe is a levy that the Labour party would adopt if it were in power; the problem is that we have no better ideas than putting up taxes to raise more money for public services.

[Mr Peter Bone (Wellingborough) (Con)]

My hon. Friend makes the powerful point that this is what Labour would do in power. Why are we doing it as Conservatives?

[Mr Baker]

That is the fundamental problem that I face today, because I believe that this is just the beginning of the generational crisis of our inability to fund the promises that have been made progressively for more than 100 years, since the National Insurance Act 1911. I have talked about it ad nauseam, particularly in relation to a Bank for International Settlements paper that sets out charts showing that all western welfare states, and indeed Japan, are in the same boat. Some of the cuts to age-related spending that would need to be made to balance the books are just implausible.

We are in a dreadful position. Historically, when this country has been in a dreadful position economically and socially and on a trajectory towards ruin, there has proven to be only one party capable of rescuing the situation, and of course it is the Conservative party. At some stage in our lifetime, the Conservative party will have to rediscover what it stands for, because I have to say that at the moment we keep doing things we hate because we feel that we must.

My hon. Friend the Minister for Covid Vaccine Deployment stood at the Dispatch Box today and explained that vaccine passports go against his instincts and those of my right hon. Friend the Prime Minister; at one point I think he said that they went against everything that he stood for. We have heard hon. Members say—there are quotes on the internet from former Ministers and Cabinet members—that they hate raising taxes, but do not see how they cannot vote for it. Tonight, colleagues will say, with a good heart, “I just must,” because we all know that we cannot let NHS waiting lists get to where they are going as a result of the pandemic. Well, I know that too, but this I also know: we are going to have to do things differently.

We have to rediscover our confidence as free market Conservatives and the radical reforming zeal of the 2010 Parliament and the big society. We have to show people that we can secure a bright, prosperous and free future that provides for their needs in their old age, but without coming back to higher taxes every time there is a squeeze on the public finances. Down that road is ruin. We all know that eventually socialists run out of other people’s money.

I am sorry, Ministers, but I cannot vote with the Government tonight. Some of us have to be seen to stand for another path.

[Several hon. Members rose—]

Oral Answers to Questions

Steve Baker Excerpts

Tuesday 7th September 2021 Commons Chamber

[Kemi Badenoch]

As I said, the report will be published in advance of COP26, but we have published other things that the hon. Member does not seem to have heard of or read. We have set out ambitious plans about the net zero target and published the energy White Paper, the industrial decarbonisation strategy, the transport decarbonisation plan, which has not happened anywhere else in the world—we are the first country to do a transport decarbonisation plan—and a hydrogen strategy. We will publish the heat and building strategy in due course. The Government have been busy setting out plans on net zero, and we would appreciate it if Opposition parties took some time to read them.

[Mr Steve Baker (Wycombe) (Con)]

The Government’s measures will have important consequences for taxpayers and energy bills. Will my hon. Friend therefore set out in detail the cost of net zero and the calculations behind that cost?

[Kemi Badenoch]

We will put affordability and fairness at the heart of our reforms to reach net zero. Our latest estimates put the costs of net zero at under 2% of GDP—broadly similar to when we legislated for it two years ago—with scope for costs of low-carbon technologies to fall faster than expected. Most of those represent increased investment in growth markets of the future. However, I take my hon. Friend’s point. All I would say is that he should wait until the net zero review is published.