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Rachel Reeves – 2020 Speech on the Northern Ireland Protocol

Below is the text of the speech made by Rachel Reeves, the Labour MP for Leeds West, in the House of Commons on 20 May 2020.

I thank the Minister for advance sight of his statement and the Command Paper.

During the election campaign, the Prime Minister told Northern Irish businesses that if they were asked to fill in any extra paperwork, they should call him personally and

“I will direct them to throw that form in the bin”.

On 22 January, when the Prime Minister was asked in this House whether that meant unfettered access between Great Britain and Northern Ireland, and Northern Ireland and Great Britain, he said: “Emphatically it does.” But today, for the first time, the Command Paper states that there will be “some new administrative requirements”.

Checks on animals and agrifood will be a significant escalation of what currently takes place and will mean a border management system that is quite new in terms of its scope and scale. The document published today states that we will need to

“expand some existing entry points…to provide for proportionate additional controls.”

Will the Minister confirm what proportion of animal and agrifood products he expects will require additional physical checks? Will those checks take place at ports in Northern Ireland? Physical checks require a product to be taken off the lorry, opened, inspected, tested and quarantined until deemed legitimate. That is quite a burden. Can the Minister confirm that there will be physical checks, or, indeed, that there definitely will not be physical checks?

The document published today states that

“some new administrative process for traders,”

including

“electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK”

will apply.

This is no small matter. Import declarations can require 40 separate data points, and Her Majesty’s Revenue and Customs has estimated that each declaration for shipment will cost between £14 and £56. Can the Minister confirm the number of checks and the costs of those checks to businesses? For the 1.8 million goods vehicles that crossed from Great Britain into Northern Ireland last year, that certainly adds up.

On tariffs, the Government have previously promised that there would be no tariffs on goods traded either way between Great Britain and Northern Ireland. Indeed, they have said that there will be no tariffs, fees or charges or quantitative restrictions. But today, for the first time, the Government have accepted that there will be tariffs on goods entering Northern Ireland. The Command Paper says that

“goods ultimately entering Ireland…or at clear and substantial risk of doing so, will face tariffs.”

So can the Minister say who will be levying or administering those tariffs, what “clear risk” means, and who will define it? Could tariffs be applied and later reimbursed, and if so, what would the timetable for that be? The Command Paper says:

“We will produce full guidance to business and third parties before the end of the transition period.”

That does not give much time for businesses to prepare for what could be quite profound changes.

The Minister says that goods moving from Great Britain do not need to be checked because the majority will remain in the UK. This is a hugely important point. Indeed, 70% of goods that flow from Great Britain are destined for the high street. I hope that a way forward can be found so that those goods can move freely. However, the Command Paper accepts that

“some new administrative process for traders, notably new electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK”

will apply. So can the Minister confirm that that will include rules of origin checks, safety and security checks and import declarations, and if so, where and how will those checks take place? There is no mention in the document published today of a trusted trader scheme, which is surely essential for ensuring the free flow of goods without tariffs from Great Britain into Northern Ireland that we all want to see.

We welcome this statement, but it does expose the broken promises made by the Prime Minister. Today, for the first time, there has been an admission that there will be additional checks and that there will be tariffs on goods at risk of entering the single market. Even now, many fear that the Government are not willing to admit the full extent of those. We have seven months to get this right, and we must.

May 29, 2020
Michael Gove – 2020 Statement on the Northern Ireland Protocol

Below is the text of the statement made by Michael Gove, the Chancellor of the Duchy of Lancaster, in the House of Commons on 20 May 2020.

With permission, Mr Speaker, I will make a statement on the Government’s approach to implementing the Northern Ireland protocol as part of the withdrawal agreement with the European Union.

The protocol exists to ensure that the progress that the people of Northern Ireland have made in the 22 years since the Belfast/Good Friday agreement is secured into the future. The Belfast agreement is built on the principle of consent. It was ratified by referendums in both Northern Ireland and Ireland, and the agreement is crystal clear that any change in the constitutional position of Northern Ireland within the United Kingdom can come only if the majority in Northern Ireland consent to any change.

The vital importance of consent is recognised in the provision for any alignment in the protocol to be disapplied if Northern Ireland’s political representatives conclude that it is no longer desirable. Embedding that recognition of consent in the protocol was intrinsic to its acceptance by the Government. Therefore, for the protocol to work, it must respect the needs of all Northern Ireland’s people, respect the fact that Northern Ireland is an integral part of the customs territory of the UK, and respect the need to bear as lightly as possible on the everyday life of Northern Ireland.

Although there will be some new administrative requirements in the protocol, these electronic processes will be streamlined and simplified to the maximum extent. As the European Commissioner’s own negotiator, Michel Barnier, has spelled out, the protocol’s procedures must be as easy as possible and not too burdensome, in particular for smaller businesses. As is so often the case, but not always, Monsieur Barnier is right. The economy of Northern Ireland is heavily dependent on small and medium-sized enterprises. Subjecting traders to unnecessary and disproportionate burdens, particularly as we wrestle with the economic consequences of covid-19, would not serve the interests of the people of Northern Ireland, for whom the protocol was designed. The protocol text itself is explicit that implementation should impact as little as possible on the everyday life of communities.

In that context, it is important for us all to recall that the clear majority of Northern Ireland’s trade is with the rest of the United Kingdom, so safeguarding the free flow of goods within the UK’s internal market is of critical importance to Northern Ireland’s economy and people.

Today, we are publishing a Command Paper that outlines how the protocol can be implemented in a way that would protect the interests of the people and the economy of Northern Ireland, ensure the effective working of the UK’s internal market, and also provide appropriate protection for the EU single market, as well as upholding the rights of all Northern Ireland’s citizens. Delivering on these proposals will require close working with the Northern Ireland Executive, underscoring once again the significance of the restoration of the Stormont institutions in January. I would like to put on record my gratitude for the constructive approach that has been shown by Northern Ireland politicians, including by the First Minister and Deputy First Minister, as well as by hon. Members from across this House.

There are four steps we will take to ensure the protocol is implemented effectively. First, we will deliver unfettered access for NI producers to the whole of the UK market. Northern Ireland to Great Britain goods movements should take place as they do now. There should not be export declarations or any other processes as goods leave NI for GB, and we will deliver on unfettered access for Northern Ireland goods through legislation by the end of this year.

Secondly, we will ensure that there are no tariffs on goods remaining within the UK customs territory. In order to ensure that internal UK trade qualifies for tariff-free status, there will need to be declarations on goods as they move from Great Britain to Northern Ireland, but these systems will be electronic and administered by UK authorities. It will be for our authorities to determine any processes that are required, using the latest technology, risk and compliance techniques to keep these to an absolute minimum.

That will also allow us to deliver on our third key proposal, which is that implementation of the protocol will not involve new customs infrastructure. We acknowledge, however, as we have always done, that on agrifood and live animal movements, it makes sense to protect supply chains and the disease-free status of the island of Ireland, as has been the case since the 19th century. That will mean some expansion of existing infrastructure to provide for some additional new processes for the agriculture and food sector, but these processes will build on what already happens at ports such as Larne and Belfast, and we will work with the EU to keep these checks to a minimum, reflecting the high standards we see right across the UK. There is no such case, however, for new customs infrastructure, and as such there will not be any.

Fourthly, we will guarantee that Northern Ireland businesses will benefit from the lower tariffs that we deliver through new free trade agreements with third countries. This ensures that Northern Ireland businesses will be able to enjoy the full benefits of the unique access that they have to the UK and EU markets.

These four commitments will ensure that, as we implement the protocol, we give full effect to the requirements in its text to recognise Northern Ireland’s place in the UK and in its customs territory. As we take the work of implementation forward, we will continue to work closely with the First Minister and the Deputy First Minister, with Northern Ireland MPs from across parties, and with the business community and farming groups that have provided such valuable feedback for our approach.

Of course, we have already guaranteed, in the “New Decade, New Approach” deal, that the Northern Ireland Executive have a seat at the table in any meeting where Northern Ireland is being discussed and the Irish Government are present. Alongside that, there will be a new business engagement forum to exchange proposals, concerns and feedback from across the community on how best to maximise the free flow of trade, and we will ensure that those discussions sit at the heart of our thinking.

We recognise that there will be a wide range of voices and responses to our Command Paper. We will listen to these respectfully while we continue to put our own case with conviction at the Joint Committee. Our approach will of course continue to be informed by extensive engagement with businesses, politicians and individuals right across communities in Northern Ireland. We stand ready to work with the EU in a spirit of collaboration and co-operation so that a positive new chapter can open for Northern Ireland and its people in every community, and it is in that spirit that I commend this statement to the House.

May 29, 2020
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.

May 28, 2020
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.

May 28, 2020
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.

May 28, 2020
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.

May 28, 2020
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.

May 28, 2020
Jesse Norman – 2020 Statement on Finance

Below is the text of the statement made by Jesse Norman, the Financial Secretary to the Treasury, in the House of Commons on 19 May 2020.

I beg to move,

That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year may be made amending Chapters 8 and 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003.

This ways and means motion enables the Government to amend the current Finance Bill in order to implement reforms to the existing off-payroll working rules. We are presenting it separately because we wanted to extend the date at which it comes into force by one year to April 2021 in recognition of the effects of the coronavirus pandemic. The off-payroll working rules have been in place for 20 years. They are designed to ensure that people working like employees but through their own companies pay broadly the same income tax and national insurance contributions as people who are directly employed.

In April 2017, the Government reformed the way in which the rules operate in the public sector by transferring the responsibility for determining whether the rules apply from individual contractors to the public bodies that engage them. Unfortunately, in the private sector, non-compliance with these rules remains widespread, and it is forecast to cost the Exchequer over £1.3 billion a year by 2023-24 if not addressed. This is not a sustainable position. It costs the taxpayer a great deal of revenue that is needed for our public services, it perpetuates an unfairness between individuals working in the same way but paying different levels of tax, and it prolongs the disparity with the public sector, where the rules have been in place now for three years.

At Budget 2018, the Government announced that the reform would be extended to medium and large-sized organisations in the private and voluntary sectors, but it would not apply to engagements with the 1.5 million smallest businesses. It is important to be clear that this is not a new tax. The off-payroll working rules have been on the statute book since 2000. This reform is focused on improving on improving compliance with the rules that are already in place.

Let me turn to the amendment tabled by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) the hon. Member for Haltemprice and Howden. I understand that it will not be moved today, but it is important to be clear about the Government’s position on it. To help businesses and individuals deal with the economic impacts of the coronavirus, on 17 March the Government announced that the reform to the off-payroll working rules would be delayed by one year from 6 April 2020 until 6 April 2021. The amendment would delay the introduction of reform by a further two years to April 2023, but it is hard to see any genuine rationale for this further delay.

The current measure was first introduced at Budget 2018. Since then, the Government have carried out two consultations on the detail of the reform. Her Majesty’s Revenue and Customs has worked extensively to support businesses in preparing for the change. Draft legislation and guidance has been published. There was a further review earlier this year that resulted in several additional improvements. By delaying until 2021, the Government have already ensured that businesses and contractors will not need to make final preparations for this reform until next year. There is therefore no need for further delay. Moreover, such a delay would have very significant drawbacks. It would not address the intrinsic unfairness of taxing two people differently for the same work, it would extend the disparity between the private and public sectors, and it would come at a significant fiscal cost that other taxpayers up and down the country would have to make up.

I turn now to the substance of the measure. I want to address a number of further concerns that have been pressed by colleagues, including, in particular, my hon. Friends the Members for North East Bedfordshire (Richard Fuller), for Barrow and Furness (Simon Fell), for Workington (Mark Jenkinson) and for Watford (Dean Russell). The first of these is that organisations will no longer engage with personal service companies as a result of this reform, reducing the number of contracts available in the labour market. It is important to recognise that the Government are fully aware of the importance of the flexibility for individuals and businesses to agree working arrangements that suit their needs. We know that that has been one of the pillars of the success of the UK labour market in recent years.

In 2017, soon after the implementation of the public sector off-payroll working reform, the Government commissioned independent research to assess its effect on the labour market. It found that the Government and independent researchers had not seen any evidence of an overall change in the demand for the services and skills of contractors.

Some organisations have clearly decided to change the balance of their employees and their contractors. That can be for many reasons—for example, where that better suits the evolving business model of that organisation—but many organisations will still choose to engage contractors using personal service companies where that is appropriate to their business.

Nevertheless, the Government remain keen to ensure the long-term flexibility and success of the labour market. We will therefore use the additional time given by this one-year delay to commission further independent and robust research into the long-term effects of the 2017 reform on the public sector. We want that research to be available before the reform comes into effect in other sectors in April 2021, and I can tell the House that the Government will give careful consideration to the results of that further research and thereafter will continue to monitor the effect of the reform on the labour markets of those sectors, including by commissioning independent research six months after this private and voluntary sector reform has taken effect.

Secondly, colleagues have concerns that organisations might take a blanket approach to status determinations, categorising all engagements as employment, regardless of the facts. The Government have been very clear that determinations must be based on an individual’s contractual terms and actual working arrangements. Many businesses and public sector organisations have described processes that they have put in place to ensure that determinations are correct, based on the actual working practices of the individuals concerned. There is a vigorous contractor lobby, which has also shown itself willing and able to highlight cases where it feels that the rules are not being followed. The reforms themselves include a client-led status disagreement process, where contractors can lodge a complaint if they disagree with how they have been categorised.

Thirdly, HMRC is continuing to help businesses to get their employment status determinations right by ensuring that they have access to a wide programme of education and support. The independent research that we are announcing post-implementation next year will also evaluate from an external perspective whether decisions are being made properly.

Finally, HMRC has committed to a light-touch approach to penalties in the first year of the reform and has stated in terms that the reform will not result in new compliance checks being opened into previous tax years unless there is reason to suppose or suspect fraud or criminal behaviour, and the same is true for penalties for inaccuracies.

The Government very much value the important role that contractors play in the labour market and want businesses to be able to design their workforces in a way that makes sense for them. That should not mean, however, that contractors pay less tax than employees where their engagement meets the test of an employment relationship. The legislation is designed to remedy that unfairness and to support the tax base needed to fund our public services, and I commend it to the House.

May 28, 2020
Wendy Chamberlain – 2020 Speech on Constitutional Law

Below is the text of the speech made by Wendy Chamberlain, the Liberal Democrat MP for North East Fife, in the House of Commons on 19 May 2020.

I and my Liberal Democrat colleagues welcome this legislation, which will finally allow police restitution orders to be brought forward in Scotland. As other Members have said, this is long overdue.

As other Members have explained, restitution orders will make a fine payable if somebody is convicted of abusing or assaulting a police officer. The fines will finance an expansion of the support that officers receive, by helping to finance specialist non-NHS support for injured police officers. Today’s debate relates to the fact that Westminster approval is required to permit such restitution orders to be claimed from benefits payable. This is unequivocally a positive step forward for police officers and adds to the victim surcharge, which was finally introduced last year.

It is a sad fact that many police officers are injured on duty, and assaults on police officers are often the cause of those injuries. Members will know that I come from a family of police officers; I, my father and my husband have all served, and I have other family members currently serving in Police Scotland. All of us were assaulted during our police careers. My husband was knocked unconscious during the policing of a football match. My father was head-butted by a prisoner in the police cells and required stitches.

My own most vivid memory is from early in my police career—within months of leaving initial training at the police college in Tulliallan in fact. It relates to attending a call about a report of a domestic dispute in a high-rise block of flats in Edinburgh. On arrival at the landing in question, my tutor and I could hear a loud argument and decided to call for additional officers to make their way to support us in case they were required. I am glad we did so. The door was answered by a man who, after telling us where to go, was then attacked by his girlfriend, but from behind with a knife. A toddler was visible at the back of the flat hallway. My colleague managed to baton the knife from the women’s grasp, and in anger both of them then turned on us, and a violent struggle ensued.

Luckily for us, colleagues came quickly, and both people were arrested. The man, in particular, struggled violently throughout the arrest and attempted to spit at all the officers, claiming that he was HIV-positive. It then transpired that he had been responsible for an assault and robbery nearby earlier that evening. Other than bruising, my colleague and I were unharmed, but it was a salutary lesson to me in being prepared for any eventuality and in being responsive to events.

Police officers, like other key workers during the current covid-19 pandemic, are leaving their homes and families every day to carry out vital work and without knowing what that day will bring them. Restitution orders are not simply about a financial penalty for those who assault officers in the course of their duties, but about showing police officers that the work they do for us on behalf of society is valued. Now more than ever, we are relying on the police, who are doing a very difficult job in strange times. They are enforcing new emergency laws and keeping us safe from coronavirus, alongside tackling other types of crime. Other crimes, such as domestic abuse, are now more difficult to prevent and detect, and the police are therefore working on more innovative ways to encourage reporting of offending.

I pay tribute to my former colleagues in the Police Service for doing so much to get us through this crisis. I welcome the positive impact that the restitution orders will have on support for police officers. However—I do not believe that this is politicising; it is asking legitimate questions—while the end result of restitution orders is indeed positive, I am incredibly disappointed that these measures are being introduced far later than was ever envisaged. It is a matter of regret that this order is being brought forward nearly seven years after it was initially announced by the Scottish Government. The Victims and Witnesses (Scotland) Act 2014 was passed by the Scottish Parliament in 2013 and received Royal Assent in January 2014. The legislation was brought forward by the then Cabinet Secretary for Justice in Scotland, now the hon. Member for East Lothian (Kenny MacAskill), who has already spoken in the debate. The measures were welcomed at the time by the Scottish Police Federation, yet for a very long time two of the flagship features of the Act were missing.

All that was needed was a minor statutory instrument to be passed in the UK Parliament—in other words, what we are debating today—but for whatever reason the Scottish Government have chosen not to bring plans forward to make these features operational until this time.

The victim surcharge was finally established last year and now, almost seven years on, restitution orders are being brought before this Parliament. This is a flagship policy of the Scottish Government, yet, despite legislating, police officers are still waiting for support. There is clearly an unanswered question about why this has taken such a huge amount of time. As I mentioned, this proposal won the backing of the Scottish Parliament in the days of the tenure of the hon. Member for East Lothian (Kenny MacAskill) as the Scottish Cabinet Secretary for Justice. At that time, Police Scotland, the amalgamation of the previous eight Scottish forces, was just a few months old. Sir Stephen House was the chief constable and Vic Emery chair of the SPA. Since then, we have had another two Justice Secretaries in Scotland, two more chief constables and three more SPA chairs.

Clearly, these have been challenging times, and I note the turmoil of the SPA in particular. When the most recent chair, Susan Deacon, resigned in 2019, she stated that governance and accountability arrangements for the police service in Scotland were fundamentally flawed. A permanent replacement for the role of chair has yet to be appointed. But that does not excuse the extraordinary length of this delay. Someone who was undertaking their initial training at the Scottish Police College when the then Justice Secretary was championing the scheme and heard the promises made will now be in the seventh year of their police service.

There are huge questions to be answered by the Scottish Government as to why this delay has occurred. Indeed, my Scottish Liberal Democrat colleagues at Holyrood have been asking this question consistently since the Victims and Witnesses (Scotland) Act 2014 was passed. Each time they were assured that preparatory work was ongoing. It gives a sense of an idea, very laudable, but with no thought or plan on how best to implement it and no real impetus to prioritise it, despite the complexities that other Members have referred to. I hope that the passing of this legislation will be swiftly followed by the introduction of the scheme.

Where will the money raised by the orders go to exactly? At the time, the then Justice Secretary said the Police Benevolent Fund as well as the Scottish police treatment centre, Auchterarder, which has previously benefited members of my own family—yes, I did contribute to it myself financially—were going to benefit. Is that still the case? How much are restitution orders estimated to raise every year, so that we can establish potentially how much money the police support services have missed out on over the past six years?

As other Members have referred to, there were more than 1,600 assaults on police officers between April and June 2019, a five-year high. These orders might go some way to acting as a deterrent, so we have to ask: how many officers would have benefited from additional special support if restitution orders had been in place? There has been a human cost, sadly, to this delay, but this is about not just individual officers, but the public as well. How many officers have been forced to retire due to ill health as a consequence of an assault on duty? We are losing good people from the police service. How can we quantify the effect of this lack of prioritisation on police wellbeing and morale? These are questions that I wholly expect my Scottish Parliament colleagues to be pressing the Scottish Government on.

The significance of the support that the orders will provide to injured police officers has been overshadowed, sadly, by the seven-year wait for the scheme. I hope the Minister will agree that it is imperative that the Scottish Government now implement the restitution orders as quickly as possible. I thank all Members for their positive contributions and say that police officers cannot afford to wait any longer.

May 28, 2020
Christine Jardine – 2020 Speech on Constitutional Law

Below is the text of the speech made by Christine Jardine, the Liberal Democrat MP for Edinburgh West, in the House of Commons on 19 May 2020.

It is delightful to take part in this debate on something that, as has already been alluded to, may not appear as important or groundbreaking as some of the legislation we discuss but is vital to the everyday lives of our constituents. Let me take the opportunity to welcome back to the Front Bench the hon. Member for Edinburgh South (Ian Murray) and associate myself with his remarks about Scottish football—although perhaps the less said about the most recent decisions, the better for us all.

It is also an honour to follow the hon. Member for East Lothian (Kenny MacAskill), who, as he said, introduced the Victims and Witnesses (Scotland) Bill to the Scottish Parliament. I, together with my Liberal Democrat colleagues, welcome the opportunity to enable the Act to be fully enacted through this order. It was fascinating to hear the hon. Gentleman’s account of the genesis of the Bill, which is now coming to fruition no less than seven years after he introduced it at Holyrood.

None of us dispute that, currently, Police Scotland, in common with police and other emergency services up and down this country, is working in extremely challenging circumstances. It has to balance its daily responsibilities of maintaining order with its extended role of protecting the public in the context of the pandemic. Police Scotland deftly responds to its emergency powers and protects the public by ensuring that we observe lockdown and social distancing, but, as the Minister mentioned, that has come at a price, with no fewer than 100 direct coronavirus-related attacks on our police service.

Until recently, safe working was something which many of us were lucky enough to be able to take for granted. But the police service as a profession never can, and its daily routine is not without significant risk of abuse or assault. In fact, over the past five years in Scotland, while we have been coming to this point with the Bill, there has been a gradual but sustained increase in the number of reported assaults on police officers. More than 3,000 police officers were assaulted—that is an average of almost 20 a day— between March and September last year. To assault a police office is of course already a crime under Scots law, but, as we have heard, this legislation allows for restitution orders to finally be brought forward into law. For those convicted of impeding or assaulting a police officer, a court will be able to impose this new financial penalty. This significant step ensures that police officers who are victims of crime receive support for their individual needs so that they continue their duty serving and protecting the public. It is perhaps fitting that this week is Mental Health Awareness Week as many victims of crime—police officers and others—suffer mental health issues as a consequence.

Victims of crime engage with support services whose funding will come as a direct result of restitution orders, something whose day has finally arrived in Parliament. That perhaps brings me to a slight difference of opinion with colleagues I am following in this debate. Like many others, I am extremely disappointed that it has taken so long for this legislation to reach this point—the length of delay by the Scottish Government in what was a flagship policy for the SNP. It went through the parliamentary process as the Victims and Witnesses (Scotland) Bill in 2013 and was given Royal Assent in 2014.

Police restitution orders which require this change were a vital part of that legislation, and just in case there is any doubt, this delay has not been in any way, shape or form the fault of the UK Government or Parliament. It is, however, reassuring that we can, at this final stage of the Bill, work together to make sure that our police officers in Scotland receive the restitution they deserve. I hope that none of us will use this as a political opportunity either to bash or to congratulate the Scottish Government. It is simply a fact that we have now come—finally—to the point where restitution orders can be put in place. I will take great pleasure in supporting this order.

May 28, 2020