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Category: Economy

  • Mark Hendrick – 2020 Speech on the Trade Bill

    Mark Hendrick – 2020 Speech on the Trade Bill

    Below is the text of the speech made by Mark Hendrick, the Labour MP for Preston, in the House of Commons on 20 May 2020.

    Several of my hon. Friends have made the point that current parliamentary procedure is totally inadequate if we are ​to scrutinise properly and have proper parliamentary oversight of trade deals negotiated by the Government. We are, of course, supportive of mechanisms that will enable the UK to transition from being a member of the EU so that we can enter into our own trade agreements and into international trade conventions through organisations such as the WTO. This Bill, however, does nothing to promote transparency or that proper scrutiny that this House and the country deserve. Therefore, I, and many of my right hon. and hon. Friends will not support the Bill.

    The fact that the Bill is being pushed through in the middle of the coronavirus pandemic means that the importance that would normally be attached to such legislation is being overlooked. The current life-and-death crisis, which has been exacerbated by this Government’s bad management, is totally overshadowing it. The crisis not only overshadows this Bill, but will overshadow much of the legislation that will pass through this House in the coming weeks and months. In addition, the inevitable negative economic impact of a Brexit cliff edge, following the end of the EU exit transition period, can easily be pinned on the coronavirus crisis.

    The Bill will lead to trade deals that will have huge implications for our economy and our global alliances well into the future. At the moment, the current and planned continuity trade talks between the UK and the EU are taking place at the same time as preliminary discussions between the UK and the United States. The crisis provides perfect cover from view, so those discussions can happen with little scrutiny by this House and little attention from the media to inform the public.

    As much as I would like to see a good trade deal with the EU, I am not one of those arguing for an extension of the transitional period. If I thought that the Government wanted anything that looked like a good trade deal with the EU, an extension would probably be a good idea, but I do not think they do. Many Conservative Back Benchers and some of those on the Government Front Bench do not want a deal with the EU and would be quite happy to throw their lot in with any trade deal with the United States—the right hon. Member for Wokingham (John Redwood) is among them.

    If the Conservative party wanted a good EU trade deal, it could have had an agreement with the Labour party last year when we were debating our EU exit, and the path would have been set—but the Government did not want that. Now, of course, in the Government’s proposals for a comprehensive free trade agreement with the EU, they are asking for many of the benefits of EU membership without the costs that that membership brings. Having said that, there will still be a large divorce bill running into billions of euros for the UK to cough up, and the clock is still ticking. My bet is that any agreement on trade with the EU will be a fig leaf to hide the embarrassment of the years of discussion and negotiation.

    The elephant in the room is, and always was, the United States and what the current President wants for the future. I ask myself, “Why are there two sets of trade discussions—UK-EU and UK-US—going on at the same time?” The Secretary of State for International Trade may claim that the fact that the discussions with the EU are already under way might give the UK some leverage to get better terms from the US in specific ​areas but, in a likely no-deal outcome or the fig-leaf agreement that I mentioned earlier, any discussions seem extremely unlikely.

    In addition, for the moment, the US under President Trump will probably seek only a preliminary agreement that he can wave around for re-election purposes in November. However, if Trump wins again, he will demand that the UK has minimal trading arrangements with the EU and that the UK conforms with US norms through mutual recognition agreements, replacing EU regulations on goods, services and agricultural products, for example. This Bill is leading the UK down the slippery slope of a Government who are becoming less accountable to Parliament and the people of this country, trade relations that are not in the best interests of the people of this country and an economic future over which we have less and less control.

  • John Redwood – 2020 Speech on the Trade Bill

    John Redwood – 2020 Speech on the Trade Bill

    Below is the text of the speech made by John Redwood, the Conservative MP for Wokingham, on 20 May 2020.

    You do not need to pay to trade: I welcome the policy behind this legislation and the Bill itself, which makes it very clear that the United Kingdom wishes to be a positive trade partner with as many countries around the world as would like a free trade agreement with us. This Bill ensures that we can carry across the FTAs that the EU has with a range of countries that naturally fall to transit to us as well as to it. Many of us were told that we were wrong when we argued that during the referendum and afterwards, but the Government have proved us right in that of course those countries wish to roll over those agreements. In one or two cases, they wish to go considerably further than the agreements we already have. I welcome the Government’s positive response to that to see what more can be added so that we can have a better deal as we leave the European Union than we had when we were in it.​

    We must see the policy background to this Bill as including the most important letter written this week by our trade negotiator to Mr Barnier about the parallel negotiations for a possible UK-EU free trade agreement. It is an admirably lucid letter which makes it very clear that, just as in this Bill, we are not sacrificing our fish, offering special payments or agreeing to accept the laws of other countries in order to create a free trade agreement with them, and neither should we do so in the case of the European Union. We voted very clearly to leave the single market and to leave the customs union. Many of us who voted that way strongly believed then, and believe even more so today, that we want a free trade-based agreement with the European Union if that is also its wish, but we would rather trade with it under WTO rules and the excellent new tariff we have set out for external trade if it wishes instead to claim that we need to be some kind of surrogate member taking its laws, paying its bills and accepting many of its views on matters like our fish resources.

    It is more likely that we will get a free trade agreement from a reluctant European Union just before the deadline at the end of the year if we have made great progress in negotiating free trade deals elsewhere. That is why the Government are absolutely right to respond very positively to the United States of America, to Japan, to Australia, to New Zealand and to the Trans-Pacific Partnership. In each of those cases, the counter-party is very willing. In each of those cases, there are precedents for good agreements between other parts of the world and those countries, and we can build on those and our own models for a positive free trade arrangement.

    The EU will see how relatively easy it is to make such progress with those countries we have agreements with. When we were in the EU, the EU had not got round to having agreements with some of those countries—big countries such as the United States of America. When we are outside the EU, that will make the EU even keener to want to have a free trade agreement with us. Rather reluctantly, it will have to admit that it has been making a mistake over these past years in trying to make our exit so protracted and so difficult, and claiming that you do need to pay for trade.

    I will vote for the Bill as vindication that, of course, many countries wish to trade with us on as free a basis as possible. I will vote for it as part of a much bigger package of a free trade loving United Kingdom driving a free trade agenda around the world. I will vote for it because it sends a clear message to the European Union that it is negotiating in the wrong way and running the danger of ending up without a free trade agreement that is rather more in its interests than ours, given the asymmetry of our trade.

    Free trade is a good way to promote prosperity. It is even more vital now we need to recover our economies from the covid-19 crisis. I urge the EU to understand that and to co-operate sensibly, just as I give the Government full support to press ahead in negotiating deals with all those great countries and regions of the world that think Britain is a hugely important future partner, and where we see fast-growing trade that can enrich both sides.

  • Darren Jones – 2020 Speech on the Trade Bill

    Darren Jones – 2020 Speech on the Trade Bill

    Below is the text of the speech made by Darren Jones, the Labour MP for Bristol North West, in the House of Commons on 20 May 2020.

    According to research from the Harvard Kennedy School’s Growth Lab, British exports have been declining, concentrating into a smaller number of products and acting as a drag on our economic growth. Remarkably, in the past decade the UK has added only two new export products, and, perhaps embarrassingly, our main new export has been bovine, sheep and goat fat. I declare my interest as an amateur vegan, but I suggest that an economy that is as complex and capable as ours really ought to have done better.

    We know that economic growth can be driven by export diversification, but to do that we need an active industrial strategy that works with the market to make clear what we actually want to achieve while investing in workers with the skills to do it. Some colleagues will say, “Ah, but it was the European Union’s job, and now that we are taking back control, it will be much better and the Bill will help us do that.” I would respectfully compare the UK’s record to, for example, that of France, which is, of course, a member of the European Union. During the same timeframe in which the UK majored on bovine, sheep and goat fats, and added around $2 per capita, with a total UK market of $104 million, France has managed to add 10 new projects, creating a new $1.9 billion market and growing GDP per capita by $28. It has therefore been a question of intent and ability, not a question of power.

    Based on current capacity, the UK has a pretty good spread of manufacturing capabilities, from chemicals and machinery to automotive, gas turbines and aerospace, but the bulk of our goods-based growth has come from aerospace and automotive, whose capacity relies on European supply chains. Based on current Brexit negotiations, those supply chains are at risk, as well as under added pressure from the pandemic. The Government have largely relied on services-based growth in our economy, which of course is an important part of what we do as a country, but they took their eye off the ball in respect of British manufacturing, resulting in a weaker and more exposed market for goods, exports and economic growth.

    That is the context for this Bill, because the questions that we are considering today have been with us in one form or another for the past four years. Most of the provisions in front of us today first came before the House a few months after I was elected in 2017. By any measure, this legislation has taken too long. The priorities ​given force in the Bill, and which even now run through all the arguments on trade made by those on the Treasury Bench, are the same arguments we have heard over the period of trading inadequacy that I have just set out. The economy is in recession and we are on the cusp of a once-in-a-century collapse in output. The key test is whether the Government are committed to bringing back British manufacturing as a core component of the British economy.

    In closing, I would like to ask the Minister to answer a number of questions when summing up the debate. First, will he set out for the House whether Parliament will be given the right to full and transparent scrutiny of the trade negotiations, and confirm whether that will be by a new or existing Committee of this House? As a former member of the European Scrutiny Committee, I note that we had such a function when the European Union was negotiating trade deals, but that does not seem to be replicated in the Bill.

    Secondly, local government leaders are in the process of setting out recovery plans post pandemic. What conversations is the Department having with city leaders to ensure that those leaders on the ground have input into decisions made in Whitehall?

    Thirdly, Ministers have long said, whether in Brexit or trade debates, that the Government will stand by their commitment to human rights, workers’ rights and environmental protections, but this Bill does not mention climate change or workers’ rights at all. Britain has an opportunity to set the global expectation on these issues. I would like to understand why the Government have not included such provisions. There is a significant opportunity to couple climate diplomacy with export opportunities as we work to help other countries to transition to net zero. I hope the Minister will confirm that these opportunities are also being considered by the Department.

    As an anti-modern slavery champion for the Commonwealth Parliamentary Association, I have seen first hand the risks of global supply chains that do not have adequate protections and transparency built in. No work or business in the UK wants to be associated with illegal trafficking and exploitation of some of the most vulnerable people on the planet. I hope the Minister can set out how the Government intend to ensure that these protections are included in all future trade deals.

  • Mark Menzies – 2020 Speech on the Trade Bill

    Mark Menzies – 2020 Speech on the Trade Bill

    Below is the text of the speech made by Mark Menzies, the Conservative MP for Fylde, in the House of Commons on 20 May 2020.

    It is my great privilege to follow my friend and Chair of the International Trade Committee in this incredibly important debate. The Leader of the House said earlier that these proceedings sometimes appear stilted and scripted when done remotely. It is my challenge over the next five minutes to prove him wrong.

    In my part of Lancashire, international trade is critical for jobs and prosperity. I am host to fabulous, world-class companies, such as BAE Systems and Westinghouse, the nuclear fuels manufacturer, and smaller companies such as Tangerine Holdings. The Bill is very much about the whole nature of international trade—getting that right and building a framework that will stand the test of time—and that is one reason I support its Second Reading today.

    It is also my privilege to serve as one of the Government’s trade envoys. Indeed, the Secretary of State, in her opening remarks, referred to Chile as an example of one of the 48 countries with which a continuity agreement has been put in place. I would say to her that some of my other countries, through the Andean trade continuity agreements, such as Peru and Colombia, also have arrangements to ensure a smooth transition when the UK eventually leaves the EU at the end of this year.

    T hat has not happened by chance. Those agreements are in place because of the dedication and hard work of people in the Department, not just in London, but especially in post. I take this opportunity to pay tribute to the men and women, many of whom are nationals of the countries they represent, who work tirelessly and understand the nature of their countries in a way that is sometimes difficult to comprehend from London. Their dedication and hard work have got us to where we are today. That sometimes gets missed.

    We also have to recognise that the Trade Bill is only part of the picture. Measures such as the many double taxation agreements—there is one in place with one of my countries, Colombia—are really important to ensuring a smooth transition and the financial flows that will come from trade. The Government have been working very hard on that in the last couple of years, but there is still more work to be done in other key markets across the globe.

    There has been much fixation in recent years on trade deals, but they are only part of the picture; much of this is about a smooth transition from the EU arrangements to what comes next. If we are unable in this House to demonstrate to our key countries and partners across the globe that we can pass a piece of legislation, why on earth should we be asking our officials and trade envoys to make representations to senators and presidents to get agreements in place so that when we leave we can have that smooth transition? I therefore urge the House to get behind the Bill and to give it a Second Reading unamended.

    I would like to take this opportunity, however, to challenge the Government on how we plan to use some of the data-collection powers in the Bill. For example, I would like to see some of the data sharing in HMRC to be used to reshape and rescope bodies such as UK Export Finance, because in all of my key markets we only ever reach a tiny percentage of the credit facilities that we say are available. Given that London is the global capital ​of fancy credit mechanisms, I urge the Minister—it is great to see him in his rightful place—to use some of the expertise in the City and to challenge whether UK Export Finance needs to be given the opportunity to evolve in order to take advantage of some of the real opportunities that are out there.

    Madam Deputy Speaker, I have followed your example and set a timer, so in my closing seconds let me just say that free trade is important, not just as a sign of national prestige, but because it creates jobs and generates the wealth to pay for public services at home and, more importantly, abroad. At a time of rising unemployment, my goodness, we need free trade more than ever, so I will be supporting this Bill in its passage through Parliament.

  • Stewart Hosie – 2020 Speech on the Trade Bill

    Stewart Hosie – 2020 Speech on the Trade Bill

    Below is the text of the speech made by Stewart Hosie, the SNP MP for Dundee East, in the House of Commons on 20 May 2020.

    May I start by agreeing with the Secretary of State that it is absolutely vital that we keep trade open and recognise the importance of the supply chain, and that it is absolutely essential that we stand against protectionism? We need to do that, because right now there are three main threats to trade. The first is self-evidently from the covid crisis, which the World Trade Organisation has suggested might cause a fall in global trade of something in the order of 13% to 32%. That is a substantial reduction, no matter where on the scale one looks. The second is the impact of Brexit. Assessments suggest that the UK could lose a substantial chunk of its global trade. The third is the more systemic problem that the right hon. Member for North Somerset (Dr Fox), the ex-Trade Secretary, was speaking about, which is the continued implementation of new and the continuation of existing trade restriction measures, with tariffs valuing somewhere around $1.6 trillion in force.

    I am not confident that those problems will be resolved any time soon, not least because there is as yet no cure for coronavirus and restrictions of one sort or another may well remain in force for some considerable time, because of the highly publicised lack of progress on the Brexit negotiations, and also, sadly, because of the absence of a functioning World Trade Organisation appellate body. This Trade Bill does not address any of those matters, other than perhaps at the margins, by trying to roll over and maintain the trade the UK has with third countries via membership of the EU and thereby minimise the losses from Brexit.

    The Bill does do a number of other things, as the Secretary of State set out. It creates procurement obligations arising from membership of the GPA—the agreement on Government procurement; it creates the Trade Remedies Authority; and it gives powers to Her Majesty’s Revenue and Customs to collect and share data. However, it is not without its problems. Let me deal with the powers relating to the devolved Administrations first. The previous Trade Bill, which was under consideration in the previous Parliament, contained provision for regulation-making powers to be available to the UK Government within areas of devolved competence. That Bill also contained a provision that prohibited devolved Administrations from using powers to modify retained direct EU legislation or anything that was retained EU law by virtue of section 4 of the European Union (Withdrawal) 2018 Act in ways that would be inconsistent with any modifications made by the UK Government, even in devolved areas. As a result, the Scottish Government could not consent to that, and that view was shared by the Scottish Parliament Finance and Constitution Committee.​

    That Trade Bill did not complete its passage and fell, and the good news is that those provisions have been removed from this reintroduced Trade Bill. However, there remains no statutory obligation for the UK Government to consult or seek the consent of Scottish Ministers before exercising the powers they have in devolved areas. However, during the partial passage of the previous Trade Bill, the UK Government made a commitment to avoid using the powers in the Bill in devolved areas without consulting and ideally obtaining the consent of Scottish Ministers. The then Minister of State at the Department for International Trade, the right hon. Member for Bournemouth West (Conor Burns), subsequently restated those commitments in his letter to Ivan McKee, the Scottish Trade Minister, on 18 March, and I hope that the Minister we hear from today will restate these non-legislative commitments.

    The Bill is not without its problems, and they do not relate simply to the devolved Administrations. It allows the UK Government to modify retained direct principal EU law, and it appears to me that there are no legislative limits on such modifications. The second problem is the description of an “international trade agreement” in clause 2(2)(b), which states that it may be

    “an international agreement that mainly relates to trade, other than a free trade agreement.”

    As we know, modern agreements are as much about regulation, standards, conformance, dispute resolution or food safety as they are about quotas and tariffs. Many people will uncomfortable that Ministers can modify existing agreements in the way in which this Bill permits, particularly without scrutiny and consent.

    That leads me to the fundamental problem with the Bill. The absence of parliamentary scrutiny and a parliamentary vote on significant changes or modifications, or, indeed, in the future, on new trade deals as may be envisaged by the Government, is a huge problem. Modern democracies need to have full scrutiny of trade agreements, from the scope of the negotiating mandate right through to implementation. That is absent from this Bill, as is any provision for scrutiny other than through the voluntary scrutiny proposed by the Government in the Command Paper published in the previous Parliament, to which I will return briefly at the end of my speech.

    These issues also highlight the absence of any formal input into trade deals or significant modification of existing ones by the devolved Administrations—a problem replicated in the membership of the Trade Remedies Authority, where no formal ability exists for the devolved Administrations to propose or nominate a member with expertise in regionally or nationally significant trade.

    I shall turn briefly to the Command Paper that was published in 2019 and covered the previous Trade Bill. Does it still apply? Does the commitment to publishing our negotiating objectives and scoping assessments still exist? Even if it does, does the Minister recognise that that still does not give Parliament or the devolved Administrations any role in approving them? Is it still the intention of the UK Government to provide sensitive information to a scrutiny Committee? Would that be the Select Committee on International Trade, which is ably chaired by my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil)? If it is, will any papers provided be publishable, or will they be restricted? ​If they are restricted, that will still leave Members of Parliament, exporting businesses and other interested third parties none the wiser about the Government’s real intentions. I am conscious of the limited time, Madam Deputy Speaker, so let me end simply by saying—

    Madam Deputy Speaker (Dame Rosie Winterton)

    Order. I ask the hon. Gentleman to bring his remarks to a close. I thank him for his contribution, but we must move on. I am now introducing a time limit of five minutes, and I advise hon. Members who are speaking virtually to have a timing device visible.

  • Rachel Hopkins – 2020 Speech on Finance

    Rachel Hopkins – 2020 Speech on Finance

    Below is the text of the speech made by Rachel Hopkins, the Labour MP for Luton South, in the House of Commons on 19 May 2020.

    The covid-19 crisis has had a dramatic impact on the UK’s economy. A small state, low taxes and pure free market economics have failed to prepare the UK for the public health crisis and the ever-present climate emergency.

    The public health crisis has forced the Government to postpone this failed style of governance, in favour of an interventionist, corporate welfare policy, aimed at protecting the needs of capital, with the hope that benefits will trickle down to workers through business-first schemes. The post-covid-19 economy must have fair taxation and strong workers’ rights at its centre. Self-employed workers will be pivotal in our economic rebuild, and people who are genuinely self-employed deserve fair support while also paying their taxes.

    The Opposition are fundamentally committed to promoting and advancing workers’ rights, so we are deeply concerned that IR35 reduces the rights of the worker and the responsibilities of the employer. It is essential that, during the review of IR35, the Government recognise the overlap between employment law and tax status, and do not see them as exclusive entities. An initial recognition of their interrelation provides the basis for levelling up self-employment protection and ending forms of self-employment that are used as cover for tax avoidance.

    I am aware that some workers are forced into self-employment by employers trying to cut costs and reduce ​their obligations. That was directly referenced by the Taylor review, which stated, based on evidence submitted to it, that

    “the nature of the tax system acts as an incentive for practices such as bogus claiming of self-employed status, by both businesses or individuals.”

    This highlights the importance of not assessing tax law in isolation. A joined-up approach that brings together tax and employment law can ensure that everyone pays their fair share of tax and that no one is exploited by holes in the system. It is vital that the Government recognise the relationship between poor employment practice, exploitative working arrangements and the tax system. Do the Government intend to introduce any additional measures to tackle the enablers of tax avoidance schemes, including those who exploit gaps relating to tax and employment law?

    The precarious nature of certain forms of self-employment has made it difficult for many to access the coronavirus self-employment income support scheme. A large number of my constituents, including those working in the creative industries, cannot access SEISS as they receive less than 50% of their income from self-employment. Will the Minister consider introducing additional support that can be offered to those who receive less than half their income from self-employment, and who may also have been using short-term pay-as-you-earn contracts?

    The covid-19 crisis has created a critical juncture in our country’s economy. I urge the Government to ingrain workers’ rights and fair taxation into the post-covid economy.

  • Meg Hillier – 2020 Speech on Finance

    Meg Hillier – 2020 Speech on Finance

    Below is the text of the speech made by Meg Hillier, the Labour MP for Hackney South and Shoreditch, in the House of Commons on 19 May 2020.

    I think it is fair to say that covid-19 has shone a light on the different ways of working. Whether it be freelance work through personal service companies, which are often set up to deal with insurance and liability, or freelance work via short-term pay-as-you-earn contracts, many of these people are falling through the net. That does not even begin to embrace those who are in insecure, zero-hours work. Many in my constituency work four jobs over seven days just to make ends meet, while others earn enough to work a four-day week and can live quite comfortably.

    Hackney South and Shoreditch is a microcosm of all the different ways of working, some of which the Chancellor has supported in his package, and some of which he has not. It is also a hub of innovation, particularly in the tech area in Shoreditch, in the creative industries. We are proud to be the home of many disruptor businesses that start off trying to change the way things work.

    This motion brings to the fore a number of issues. Contractors providing a flexible, agile workforce allow many of the businesses in my constituency to buy in the skills they need when they need them. Those are typically high-cost skills that a business could not put on the payroll, especially at the start-up stage. Businesses have been in touch with me about this measure for that reason in particular. They would not be able to create a full-time job. They do not need this expertise full time, long term on the payroll. They need to be able to hire someone quickly, and if the company does not succeed, there is no direct impact on the careers of the people they have hired for that short contract because they go on to the next contract. It allows start-ups to get the help, support and technical skills they need as a fledgling business.

    Since the Government announced the extension of IR35 to the private sector, many companies in my constituency have already taken the view that they need to move overseas, and many of the individual contractors are moving overseas. They often work in different countries anyway, so where they are physically based is less of an issue than it may seem.​
    Many of the companies that are employing those contractors are taking a very risk-averse approach, designating all contractors as needing to go under the IR35 umbrella. That is having a negative impact on those technically skilled individuals who would be available for work but will end up being employed for tax purposes only, with none of the perks. In pursuing the national insurance contributions of employers, the Government are in danger of throwing out the baby with the bathwater. No one wants to see tax avoidance on a huge scale, but this system has grown up and helped to generate a whole business sector that relies on this flexibility, and the employees caught up in this will have none of the benefits of employees but will be working alongside people who do.

    The issue of national insurance contributions is really important in terms of the Government’s review. We need to know exactly what the timetable is for that review, who will do it and how they will calculate the tax take. Many businesses are presented with evidence, which I am happy to share with the Minister, about why the tax take will not actually increase for HMRC by going down this route. It is really important that we get those fundamental numbers right. Is the research commissioned yet? How will be people be able to contribute, and will it look at the overall tax rate? The delay of a year is welcome, but I completely agree with the right hon. Member for Haltemprice and Howden (Mr Davis) that we are going into an economic contraction, the likes of which this this country has never seen before, and a year is not long enough. We need to delay this further or we will lose these skills, and businesses will not replace these roles as employees, so we will have a double whammy in the economy.

  • Alison Thewliss – 2020 Speech on Finance

    Alison Thewliss – 2020 Speech on Finance

    Below is the text of the speech made by Alison Thewliss, the SNP MP for Glasgow Central, in the House of Commons on 19 May 2020.

    It is a strange day indeed when I end up agreeing with the House of Lords and the right hon. Member for Haltemprice and Howden (Mr Davis), but I very much support a review, as does the SNP, as we had this in our manifesto. Concerns about IR35 have been well raised by myself, my colleagues and colleagues of all parties. I mention in particular my predecessor in this role, my hon. Friend the Member for Aberdeen North (Kirsty Blackman), who in 2018 raised the impact on rural communities where teachers, doctors and nurses may be employed through intermediaries. My hon. Friends the Members for Aberdeen South (Stephen Flynn) and for Gordon (Richard Thomson) and the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) have ​also raised concerns about the impact of these reforms on people working in the oil and gas industry, which is also under significant pressure at this time.

    In my constituency, many people working in IT are already finding that their contracts are not being renewed. This is having an impact on their industry because of the ongoing uncertainty with this policy. I should also like to mention the possibility of an equality impact assessment. Many of those people have come here to work from other countries because of their expertise, and if they are not able to work, that could have an impact on their immigration status and their ability to stay in this country, where they have made their home. I ask the Minister to consider that.

    The House of Lords Economic Affairs Committee has set out very well the issues with IR35. Its report states that the Government should reassess the flawed IR35 framework and give serious consideration to the fairer alternatives to the off-payroll working rules. The report sets out a number of options that the Government may wish to pick up. In the Chancellor’s earlier statements on support for self-employed people, he hinted about the support the Government are offering to some of them—not all of them; there are still big gaps in the scheme—but there is an inconsistency in contributions between the self-employed and the employed, with a bit of uncertainty as to what exactly that means when we come out of coronavirus. What will people be expected to contribute? Any clarity that the Government can give on this would be extremely useful. The House of Lords also makes it clear in no uncertain terms that IR35 is not a good base to build on. Yes, it has been in place for 20 years, but for 20 years it has been plagued with these types of problems and by bolting more on to it and trying to reform it, the Government are building a house on the sand. We cannot rely on that house standing any longer.

    The Taylor review that the Government carried out made it very clear that there are options open to the Government. The Financial Secretary spoke of reviews past and reviews yet to come, but there is a real lack of proper assessment and understanding of the impact this has already had in the public sector and there is a need to understand how this will work fully when it comes to the private sector. Further, the House of Lords Committee points out that shifting responsibility on to business for a scheme that is not fit for purpose is the Government and HMRC ducking a degree of responsibility.

    I want to raise this with the Minister because we, and many in the industry, have concerns about the future of contracting because we do not know what the impact will be. As I have said, this ongoing uncertainty has led to people not having their contracts renewed. A deferral for a year gives the Government and HMRC some time, but they must use it wisely. Although some research has been carried out already, other people have looked at this and the industry understands what they need and what the norm is in their sectors, the outcome is still very unclear. The Government have said that they will use this year, but can the Financial Secretary say when that review will be completed and when it will actually be available for people to see and reflect on? Coming to this in nine months’ time will be too late for lots of people to make those changes; it needs to be much ​sooner than that. If the Government can say categorically that it will be six months, that is different—it provides a bit more time—but I am not quite convinced yet that the Government know what they want from this and what they are going to achieve.

    Overwhelmingly, we are concerned about employment rights. I have seen from my casework, as we all have, people who are uncertain about what they are able to do, what their rights are, and what they are obliged to do by their contracts and by their employers. I think the Government need to reflect carefully on the situation that many have ended up in during the period of coronavirus, when some people have very little at all on which to survive.

  • David Davis – 2020 Speech on Finance

    David Davis – 2020 Speech on Finance

    Below is the text of the speech made by David Davis, the Conservative MP for Haltemprice and Howden, in the House of Commons on 19 May 2020.

    In the light of the impact that coronavirus is having across all sectors of the economy, the Government have ​rightly committed, in the motion, to postponing the planned reforms to IR35, but only until next April. The effects of the pandemic are going to be felt for considerably longer than one year. On this basis, in April next year self-employed contractors will be hit with unnecessary costs, confusion and uncertainty, just as many of them are getting back on their feet after the coronavirus has wreaked havoc across the economy. It is the self-employed and small businesses that make up the beating heart of our economy, and they will power the recovery of our economy out of this crisis.

    The IR35 rules, as the Minister said, have long applied to the public sector. This is about applying them across the private sector. In that light, they were studied by the House of Lords Economic Affairs Committee in a report referred to by the shadow Financial Secretary to the Treasury. The report stated that the rules

    “have never worked satisfactorily, throughout the whole of their 20-year history. We therefore conclude that this framework is flawed.”

    The report found a system riddled with unfairness and unintended consequences and called for a wide-scale independent review—not just a few research reports, Financial Secretary—focused on how the reforms would affect the wider labour market and the costs that would be forced on businesses. The Lords Committee said that IR35 had the effect of reducing contractors to

    “an undesirable ‘halfway house’: they do not enjoy the rights that come with employment, yet they are considerably employees for tax purposes. In short, they are ‘zero-rights employees’”.

    That is, zero-rights employees effectively created by the state.

    The Lords recommended that the Government adopt the Taylor review proposals, which we as a Government promised to do years ago, as they offer the best long-term alternative solution to the off-payroll rules and provide an opportunity to consider tax, rights and risk together, as they should be. Despite what the Financial Secretary said, however, the Treasury has neither the time nor the capacity for a wholesale review right now. Therefore, the only sensible course of action is to pause these reforms and take the time to properly review the impact they will have on the self-employed. So, I will vote for this motion today, if we have the opportunity, but only in the expectation that will be back here in nine months’ time to do all this again.

  • Dan Carden – 2020 Speech on Finance

    Dan Carden – 2020 Speech on Finance

    Below is the text of the speech made by Dan Carden, the Shadow Minister for Finance, in the House of Commons on 19 May 2020.

    I am delighted to contribute to this debate as shadow Financial Secretary. May I start by acknowledging the significant interest and the strong feelings of people across the country on this issue? We are considering a technical change to our tax system, reforming compliance on IR35 rules for the private sector, but for many people watching us, there is genuine concern that this technical change—this attempt to strengthen the system against tax avoidance—may affect their incomes and their livelihoods. I and the Labour party approach this matter with the seriousness and the consideration that it merits.

    The ambition of IR35 rules and the associated difficulties have been a long-running saga over three decades, and it is a near impossible task to do the issue justice in the five minutes I have to contribute today.

    Provisions were introduced by the last Labour Government in 2000 for HMRC to investigate and identify the relationship between businesses and contractors and to ensure that, where individuals actually perform the role of employees, they were contracted as such, to pay the correct tax and benefit from the correct employment protections, two issues that remain at the heart of the difficulty around IR35.

    The nature of today’s economy, with the weakening of workers’ rights and employment protections and with zero-hours contracts, demands a radical overhaul. We need a progressive tax system, and we need to rebalance the relationship between those at the top and those at the bottom. In the meantime, what we have are piecemeal attempts to stop some, perhaps the more blatant, tax avoidance arrangements utilised by some ​companies. The challenge for tax authorities and for us is to understand, and differentiate between, fair and correct contractual relationships for the genuinely self-employed who are providing a crucial service to business and those who are all too often forced into bogus self-employment by unscrupulous employers, a practice that has become all too common and is designed to cheat the tax system and to deprive working people of their rights and even their entitlement to a minimum wage and fair pay. HMRC estimates such bogus self-employment schemes cost around £3 billion a year in lost tax revenue, and the February 2020 Treasury review put the cost of non-compliance with IR35 at £1.3 billion a year by 2023-24.

    Having taken effect in the public sector in April 2017, these measures were initially meant to be rolled out to the private sector last month, but that is being delayed by a year due to the current pandemic, and the Labour party broadly supports the decision to delay. We have raised concerns about the implementation of this reform and have called for a proper and thorough review before the roll-out to the private sector, and, as the Financial Secretary recognised, the additional time now available gives him an opportunity to get to grips with these concerns, but we do need reform.

    The Labour party is committed to modernising the law around employment status, including new statutory definitions of employment status, and the Government’s own Taylor review was right to conclude that the nature of the tax system acts as an incentive for practices such as bogus claiming of self-employed status, both by businesses and individuals. It called on the Government to make the taxation of labour more consistent across employment forms while at the same time improving the rights and entitlements of self-employed people. I would also add—as we consider these changes in the midst of the coronavirus pandemic that has forced 2 million people on to universal credit and millions to rely on the Government’s furlough scheme, unsure of their future—that we need a social security system fit for the modern era that can protect all of our people in one of the wealthiest countries on the planet.

    I would just like to finish with a few points that I hope the Financial Secretary can respond to when he winds up. Can he explain how reforms will only affect people working like employees through a company, and does he agree that there can be no space in our economy for zero rights employment? Will he respond to concerns most recently set out by the House of Lords Economic Affairs Finance Bill Sub-Committee that lessons have not been learned from the roll-out to the public sector, and will he look again at serious problems highlighted with the “check employment status for tax” online tool?

    We need a joined-up approach in the consideration of tax regulations and employment law. We need better protections for the self-employed, and we need to tackle tax avoidance, and the Labour party will work constructively to achieve that end.