Tag: 2022

Peter Aldous – 2022 Speech on the Finance Bill

The speech made by Peter Aldous, the Conservative MP for Waveney, in the House of Commons on 28 November 2022.

For a moment, I thought that you had forgotten me, Mr Deputy Speaker, but that is greatly appreciated.

The purpose of the Bill, as the Minister—my fellow Suffolk MP—said at the beginning, is to put on to the statute book many of the tax and spending decisions that the Chancellor announced in his autumn statement, with some others being deferred until the spring Finance Bill in 2023. The Chancellor was confronted with an incredibly difficult challenge on 17 November, so in many respects, he was between a rock and hard place. I genuinely believe that he struck the right balance and delivered the statement that the nation required in these very precarious times. He was right to protect the most vulnerable and to provide additional funding for health and social care and education, although on the latter, I think that he should also have included further education and colleges, which are so important in improving the UK’s productivity and providing the many, not the few, with the opportunity to participate in the proceeds of growth that we are so elusively seeking. That said, the Chancellor has appointed Sir Michael Barber to provide a skills reform programme, and he is to be commended for confirming support for Sizewell C, for providing Suffolk with a devolution deal, and for committing to a step change in the drive to improve the energy efficiency of our existing homes and businesses.

I feel that my right hon. Friend had no alternative other than to introduce levies on oil and gas producers and electricity generators. I will focus much of the remainder of my speech on that issue. There is a need to avoid any unintended consequences in the way that the levies operate, which could deter inward investment, which is so important to ensuring our energy security, meeting our net zero targets that enable us to tackle climate change, and regenerating the economies of many coastal communities, such as the Lowestoft and Waveney constituency that I represent.

Clauses 1 to 3 detail the changes proposed to the oil and gas profits levy: raising the rate of the levy to 35%; reducing the investment allowance from 80% to 29%, although it remains at 80% for investment on upstream decarbonisation; and extending the levy to 2028. That last provision appears somewhat random, because it takes no account of the fact that our current very high gas prices may have fallen by then. We should remember that, only a few years ago, gas prices were on the floor. I hope that, if we are in a different place before 2028, the Government will look at bringing forward the sunset clause.

I note that HMRC’s assessment concludes that the

“changes to the Energy Profits Levy are not expected to have a significant macroeconomic impact on the level of business investment”

and that the impact on business will extend only

“to around 200 companies operating in the UK or on the UK Continental Shelf.”

Those findings are very different from those of Offshore Energies UK, which is the trade representative of many of the businesses affected and which provides the secretariat for the British offshore oil and gas all-party parliamentary group, which I chair. It states that

“the tax changes would impact not just North Sea operators but the hundreds of other companies in their supply chains”,

which are so important to coastal communities such as Lowestoft and which extend right across the UK. It notes that such businesses

“provide specialised services such as marine engineering, deep sea diving or subsea communications”,

which are not just important to the oil and gas sector, but vital to the emerging industries of offshore wind, carbon capture and storage, and hydrogen production.

Offshore Energies UK points out that the industry—private business—

“is participating in plans to invest £200 billion by 2030 across all energies, including the lower-carbon ones needed to drive the energy transition.”

There is a real worry that disruption to the tax system could deter that vital investment. Although the Bill does not cover the electricity generator levy— I welcome the Minister’s commitment to engage with the industry before detailing the Government’s proposals— that levy’s provisions and implications should be considered alongside the energy oil and gas profits levy. That is because today’s renewables and oil and gas industries are inextricably interlinked and intertwined.

There is a real worry in the renewables sector that the electricity generator levy may deter the investment needed to end our reliance on fossil fuels. The companies that will be affected are those to which we are looking for investments of billions to accelerate the renewable energy transition. It is only by attracting such private sector investment that the UK can successfully grow its capacity in renewable energy. To meet our 2030 and 2050 targets, we need to attract more private investment, not deter it.

With that in mind, it is concerning that electricity generators are due to miss out on an investment allowance for new wind projects. If we are to be a global leader in offshore wind, including being a pioneer in floating offshore wind technology, there is a strong case for tax incentives to encourage new investment. That does not mean helping energy firms to avoid tax, but it does mean encouraging them to invest in the UK’s clean future for the benefit of the environment, of our future prosperity and of our energy security.

There needs to be a windfall tax, but it must be introduced in a form that is predictable, transparent and fair so as not to undermine investor confidence. I fully recognise that the enormous cost of shielding people and businesses from the worst impacts of the gas crisis requires a windfall tax, but there is a concern that the current and updated proposals for the oil and gas levy and the emerging plans for the electricity generator levy may, or might, have the unintended consequence of deterring investment at a time when we urgently need it, with a negative impact on the key policies of energy security, combating climate change, and levelling up.

It is good news that the Government have undertaken to carry out a long-term review of the tax treatment of UK oil and gas production. I also ask them to keep the oil and gas profits levy in place only while there is a windfall, rather than until 31 March 2028 if present conditions do not continue until then. There is much work to be done to create the stable, long-term fiscal environment required to maximise inward investment. Moving to net zero is a monumental challenge; the state of the public finances is such that we need more than ever to unlock private finance if we are to meet our targets.

Government and business must work together to put in place the long-term, stable tax regime that will ensure that companies make a full but fair contribution. Until recently, Government and business were working well together and a clear industrial strategy was in place, culminating in the 2019 offshore wind sector deal and the 2021 North sea transition deal. There is an urgent need for the Government and the energy industry to renew their marriage vows. I urge my right hon. Friend the Chancellor and his very good team on the Front Bench to set about the task immediately.

November 30, 2022
James Sunderland – 2022 Speech on the Finance Bill

The speech made by James Sunderland, the Conservative MP for Bracknell, in the House of Commons on 28 November 2022.

As a dutiful Back Bencher, I answered the call of the Whips and wrote about an hour’s worth of speech, but with your blessing, Mr Deputy Speaker, I will restrict my remarks to about five minutes. I suspect that this is the Bill that none of us wanted, but as a pragmatic Conservative, I concede the fiscal imperative. Importantly, this is the right thing to do for the Conservative party, as the party of fiscal pragmatism, and for the country. I see the Bill as a short-term necessity and not for the long term. We need to put our country back on track and, essentially, steady the economic ship. Fiscal and economic security must be the foundation of all policy and I believe that the Bill provides that.

I do not want to hark back to the ill-fated mini-Budget, but it recognised the basic premise that Governments do not create wealth—businesses and working people do. Therefore, we have to incentivise them to work harder and create more wealth, which, ultimately, represents economic growth. As a low-tax, low-state Conservative, I want to see a low-tax, low-state economy that attracts investment, incentivises growth, rewards workers so that they can keep most of what they earn and ensures that we all enjoy a meaningful standard of living through rising wages. I accept, however, that inflation, borrowing and debt are the elephants in the room.

I wish to make a few points about the clauses. Clauses 1 to 3 relate to the Energy (Oil and Gas) Profits Levy Act 2022 and include an increase in the levy from 25% to 35%, which is the right thing to do. I would much rather, however, that oil companies pass on their profits to the consumer at the pump and not to their shareholders. That is an absolute no-brainer and I ask the Government to keep the pressure on the oil producers to ensure that the money goes where it needs to.

Clause 5 and 6 are on income tax. I do not like the fact that the thresholds are being kept where they are. It is really important that, with rising wages, working people should keep more of what they earn, but I can live with the proposal for the reasons that have been outlined. The same principles also apply to the dividend rate and capital gains tax. We have to incentivise people to work harder, to save and to try to derive extra income from what they do. Again, I urge the Ministers to review those measures in due course, along with the income tax thresholds.

I am a bit concerned about the vehicle excise duty. I completely understand why we may need to bring that in line with diesel and high-emission cars, but we need to incentivise the drive to net zero at the same time. Again, that measure is worthy of review in due course.

Let me turn briefly to Bracknell, which I am very proud to serve. Bracknell is the silicon valley of the Thames Valley. We have 150 international companies with offices in Bracknell and a lot of small and medium-sized enterprises. Bracknell is the archetypal borough where people benefit from low taxes. In deference to my constituents—those who are working really hard to put food on the table—I urge the Government to make sure that the Bill is seen as a short-term, not a long-term measure.

Lastly, I recognise the predicament in which we find ourselves. After all, the Government borrowed an additional £450 billion to look after people in the UK during the pandemic. That was to put food on the table and to support people, and it stands to reason that that money has to come back into the Treasury. However, with the Ministers in their place, I want to make an important macro point. As the Government of this country, we need a discussion about what the future holds for the UK. We are currently living beyond our means and writing cheques that we cannot cash, so we as a nation need a serious discussion about what we want in this country, for this country and for our people. What will we do in the future? I commend to the Treasury that we need a grand strategic intent that allows us to work out where we will go, because that will drive policy. I also want to see tax reduced at the earliest opportunity, not least to encourage growth and to ensure that the UK remains firmly competitive internationally. That, I am afraid, is a political imperative to ensure that the “Great” in Great Britain stays great.

November 30, 2022
PRESS RELEASE : Government response to the Regulatory Horizons Council report on the regulation of Neurotechnology [November 2022]

The press release issued by the Department for Business, Energy and Industrial Strategy on 30 November 2022.

The Business Secretary has responded to recommendations made by the Regulatory Horizons Council on the regulation of neurotechnology.

Letter (in .pdf format)

November 30, 2022
PRESS RELEASE : Defence accelerates digital skills development with Amazon [November 2022]
The press release issued by the Ministry of Defence on 30 November 2022.

Amazon and the Ministry of Defence are teaming up to scale up and accelerate work on advancing digital skills development across UK defence.

A Memorandum of Understanding (MoU) between the MOD and Amazon Web Services (AWS) will see AWS supporting MOD’s Digital Skills for Defence Programme for the next three years.

It will deliver cloud-based skills development and training to thousands of personnel across UK defence, equipping the next generation of future leaders in the British Armed Forces and wider supply chain with the data and digital skills to defend the UK from emerging threats.

The MoU sets out a number of initiatives designed to directly push the MOD’s Digital Skills for Defence programme forward at scale and pace. Key aspects of the collaboration will see the provision of:
- Training resources across the defence enterprise and in particular supporting the Digital Foundry, the visionary hub formed within Defence Digital that harnesses emerging technology to tackle some of the country’s most pressing defence challenges.
- A tailored programme of attachments for senior leaders responsible for driving the UK MOD’s digital transformation.
The agreement – the first of its kind globally – was announced at the AWS re:Invent 2022 conference, with the work taking place as part of a wider UK government programme with AWS to boost digital skills.

Laurence Lee, Second Permanent Secretary at the MOD, said:

It is crucial we keep Defence personnel at the forefront of digital skills as we’re faced with emerging threats in an ever-changing battlespace. The speed of digital change cannot be underestimated, and the Digital Skills for Defence programme will help us match global competitors.

This agreement with AWS exemplifies our focus on harnessing cutting-edge ways of working within Defence, drawing on the expertise of the public and private sectors, and we’re excited at the new opportunities for skills development this presents.

Charles Forte, Chief Information Officer at the MOD, said:

Today marks a key milestone in our delivery of our Digital Skills for Defence programme and the development of digital skills across UK Defence. Amazon’s agreement to build upon and scale up our work within the Digital Skills for Defence programme is a crucial priority that will help us realise digital transformation across Defence.

It serves as an important symbol of how we must deepen our work with the tech sector to realise our objectives. We are grateful for this commitment and look forward to developing this partnership with AWS and other companies and organisations across the sector.

The MoU will enable deeper collaboration between AWS and Defence Digital on skills development, outlining plans for equipping defence leaders and military and civilian personnel with game-changing technical skills to sustain military and business advantage.

Chris Hayman, Director Public Sector UK & Ireland at AWS, said:

We are proud to be the first company to sign an MoU of this nature with the UK Ministry of Defence. We are fully committed to supporting the Government’s skills agenda across the whole of the public sector, and this agreement reflects our determination to support the defence community in their development of a world-leading skills environment.

To better help defence organisations with their digital transformations, a clear understanding across Government and amongst senior military leaders about the benefits of emerging technology, such as cloud, to deliver critical missions is needed.

We are excited to be working with MOD to help upskill senior officials and military leaders in their understanding of cloud and associated technologies, such as quantum technology and artificial intelligence.

Digital Skills for Defence aims to deliver a critical digital skills capability uplift, for Defence Leaders, Digital Professionals and the whole Military and Civilian workforce. This is fundamental in building and retaining operational and business advantage, keeping up with and ahead of the competition. This ambition goes beyond education but looks to transform our learning culture and the way we work collaboratively across Defence.
November 30, 2022
PRESS RELEASE : Plans to support students in 2023 exams confirmed [November 2022]
The press release issued by the Department for Education on 30 November 2022.

Decisions for GCSE maths, physics, combined science and modern foreign languages published following consultations.

Proposals to support students taking exams in some GCSE subjects in summer 2023 have been given the go-ahead after 2 Ofqual public consultations.

Permanent changes to assessment requirements in modern foreign language (MFL) GCSEs will also be introduced.

The outcome of a consultation on proposed changes to the assessment of mathematics, physics and combined science and a consultation outcome on proposed changes to the assessment of MFL from 2023 published today show:
- more than 90 per cent of respondents – including students and teachers – supported proposals to continue to require exam boards to provide formulae and revised equations sheets for GCSE mathematics, physics and combined science exams in 2023
- more than 95 per cent strongly agreed or agreed with proposals in GCSE modern foreign language (MFL) to remove permanently the requirement for exam boards to include unfamiliar vocabulary that is not on vocabulary lists. This will take effect for assessments from 2023 onwards
The Department for Education (DfE) confirmed its expectations for subject content in September. Ofqual then published its consultations on the arrangements for each, while the DfE hosted a separate consultation on minor amendments to the MFL subject content.

Ofqual Chief Regulator Dr Jo Saxton said: “In 2023, students will again have the opportunity to show what they know and can do in exams. We have listened to feedback and today’s decisions, together with some protection on grading, offer the degree of support students need as we move towards normality, while guarding against over-testing.”

Ofqual also today publishes the outcome of its joint consultation with the DfE on proposals to build resilience in the exam system for GCSE, AS, A level, Project and AEA qualifications. Ofqual and the DfE have decided to introduce guidance to support schools and colleges to gather evidence of student performance that could be used to determine grades, in the unlikely event that exams are not able to go ahead as planned.
November 30, 2022
PRESS RELEASE : Cyber laws updated to boost UK’s resilience against online attacks [November 2022]
The press release issued by the Department for Digital, Culture, Media and Sport on 30 November 2022.

Outsourced IT providers will be brought into scope of cyber regulations to strengthen UK supply chains.
- Changes will boost security standards and increase reporting of serious cyber incidents to reduce risk of attacks causing disruption
- Laws can be updated in the future to cover new organisations or sectors if they become vital for essential services
Essential everyday services, such as water, energy and transport, will be better protected from online attacks following changes to laws which set the UK’s cyber security standards.

In response to a public consultation earlier this year, the government today confirms the Network and Information Systems (NIS) Regulations will be strengthened to protect essential and digital services against increasingly sophisticated and frequent cyber attacks both now and in the future.

The UK NIS Regulations came into force in 2018 to improve the cyber security of companies providing critical services. Organisations which fail to put in place effective cyber security measures can be fined as much as £17 million for non-compliance.

But high profile attacks such as Operation CloudHopper, which targeted managed service providers and compromised thousands of organisations at the same time, show the UK’s cyber laws need to be strengthened to continue to protect vital services and the supply chains they rely on.

MSPs provide IT services such as security monitoring and digital billing and can have privileged access to their customer’s IT networks. This makes them an attractive target for cyber criminals who can exploit MSP software vulnerabilities to compromise a wide range of clients.

The UK is able to change the NIS regulations, which were originally derived from the EU’s NIS directive, because the UK has left the EU and can update these laws to better fit the country’s cyber security needs.

Under the new changes MSPs, which are key to the functioning of essential services that keep the UK economy running, will be brought into scope of the regulations to keep digital supply chains secure.

Cyber minister Julia Lopez said:

The services we rely on for healthcare, water, energy and computing must not be brought to a standstill by criminals and hostile states.

We are strengthening the UK’s cyber laws against digital threats. This will better protect our essential and digital services and the outsourced IT providers which keep them running.

The updates to the NIS regulations will be made as soon as parliamentary time allows and will apply to critical service providers, like energy companies and the NHS, as well as important digital services like providers of cloud computing and online search engines.

Other changes include requiring essential and digital services to improve cyber incident reporting to regulators such as Ofcom, Ofgem and the ICO. This includes notifying regulators of a wider range of incidents that disrupt service or which could have a high risk or impact to their service, even if they don’t immediately cause disruption.

The new measures will give the government the power to amend the NIS regulations in future to ensure it remains effective. This change will allow more organisations to be brought into scope if they become vital for essential services and add new sectors which may become critical to the UK’s economy.

The updated rules will allow regulators to establish a cost recovery system for enforcing the NIS regulations that is more transparent and takes into account the wider regulatory burdens, company size, and other factors to reduce taxpayer burden.

The Information Commissioner will be able to take a more risk-based approach to regulating digital services under the updated cyber laws and will be allowed to take into account how critical providers are to supporting the resilience of the UK’s essential services.

These changes to legislation are part of the government’s £2.6 billion National Cyber Strategy which is taking a stronger approach to getting at-risk businesses to improve their cyber resilience and making the UK digital economy more secure and prosperous.

Paul Maddinson, NCSC Director of National Resilience and Strategy, said:

I welcome the opportunity to strengthen NIS regulations and the impact they will have on boosting the UK’s overall cyber security.

These measures will increase the resilience of the country’s essential services – and their managed service providers – on which we all rely.

Carla Baker, Senior Director of Public Policy UK and Ireland, Palo Alto Networks, said:

Palo Alto Networks supports the development of an agile policy framework to reduce cybersecurity risks to our economy and society.

We welcome the opportunity to engage with the UK Government as it reviews the legislation and develops guidance for industry to enhance cyber resilience and combat the risk that malicious actors pose to the UK’s national security.
November 30, 2022
Anthony Browne – 2022 Speech on the Finance Bill

The speech made by Anthony Browne, the Conservative MP for South Cambridgeshire, in the House of Commons on 28 November 2022.

It is a pleasure to speak at the back end of the debate following so many fascinating contributions from the Government and Opposition Benches. I particularly enjoyed the comments from the shadow Minister, the hon. Member for Ealing North (James Murray), positioning Labour as the party of small business. I have long believed that that is true—the best way to create small businesses is to start with a big business and then elect a Labour Government.

I support the Government overall and this well-crafted autumn statement. It balances the books in a way that bears down on inflation without harming growth, and it has been done in a fair way, as many hon. Members have said, helping households who are struggling. The energy price guarantee and the retention of the pensions triple lock are particularly welcome. I also welcome the extra money for health and education. Like my fellow Conservatives, I do not like the fact that taxes are going up to the highest level for 70 years, but I accept that that is necessary and that we must accept sound money before tax cuts.

The main focus of my comments will be on an issue raised by several hon. Members: research and development. I very much welcome the fact that the Government are committing to £20 billion a year of public money for research and development, but my concern is about the changes to the R&D tax relief system. The Government have made major changes, with the system becoming more generous to big firms to make them more internationally competitive, but the rate of relief for small and medium-sized businesses effectively being cut in half, from 33% to 18.6%. It is a bit more complex than that, but that is the gist. Why are the Government doing that? As the Chancellor said in his autumn statement, it is to tackle fraud. Indeed, fraud is a problem—I have looked into that as chair of the Conservative Back-Bench Treasury committee —and we do need to tackle it. However, the trouble with this way of tackling research and development fraud is that it punishes legitimate research companies as much as fraudsters and chancers, lumping them all in together. There are better ways of doing that.

I am talking about this because it is a particularly big issue in my constituency. South Cambridgeshire is the life sciences capital of Europe. I have literally hundreds of life science companies, from the global headquarters of AstraZeneca down to the newest start-ups. Almost every village has a science park packed full of life science companies. Those small start-ups are at the cutting edge of research and development in life sciences. More research and development in life sciences is now done in small businesses than by the big pharma companies. Without them, innovation would be very slow and the UK would lose its position as a life science superpower. We talk about becoming a life science superpower, but we are one already, and most of the rest of the world recognises that.

It is in the nature of those small companies that they are research-heavy, but clinical trials mean that it could take 10 to 15 years to bring a product to market before they make any revenues. They are funded not by revenues from global sales of blockbuster drugs, like big pharma companies, but by investors who fund research for a decade or more before they have any chance of a return. Their financial models depend on the research and development tax credit regime, which is fundamental to them in leveraging funds from investors from around the world. It has been successful in making the UK an attractive place to do research.

Jim Shannon (Strangford) (DUP)

It is important to have research and development. It is also important that those companies can do their research on Parkinson’s, diabetes and heart disease, and all those things must have research and development investment. Does the hon. Member feel that the Government need to enhance that to their betterment and find cures for Parkinson’s, pancreatic cancer, diabetes and heart disease?

Anthony Browne

Absolutely. Many companies in my constituency and publicly funded institutes are doing research on those diseases. That is critical to people living healthy lives as well as to the economy, and the Government are absolutely right to support it.

The sudden cutting in half of research and development tax relief is a major challenge to the life science companies in my constituency, which are shocked at what is proposed —seemingly out of the blue. Many, if not most of them, are suddenly having to rethink their research plans. They are in shock particularly because it was proposed at such short notice—it will come into effect next year—and without consultation. They are having to go to their investors now and say that they will no longer have the money they thought they would and that they will have to cut back research and jobs.

Let me give the House a few examples of real companies in my constituency that I have been working with. PhoreMost combines artificial intelligence with drug research. I went to the opening of its laboratories in the village of Sawston. Neil Torbett, the chief executive officer, said:

“The current R&D tax system has been instrumental in our growth as a Cambridge-based Biotech, which has grown to over 50 highly skilled staff, raised £45 million in investment and entered into multiple pharmaceutical industry partnerships. Receipts from R&D tax credits form a critical part of our funding equation, and the proposed SME R&D tax relief cut will materially adversely affect our future growth plans within the UK.”

I opened the offices of bit.bio, another company in my constituency, which does the most amazing genetics research—I have mentioned it before. Mark Kotter, the chief executive officer, said:

“The assistance at the current level is a cornerstone of our financial projections, which also help us to attract equity funding, and any reduction in the claimable amount will have a significant impact on our ability to invest and grow at the desired rate.

As part of our forecast, we will be looking to increase our current headcount of 175 by approximately 30% in the next year, but quite simply this will not be possible if the tax relief changes announced in the Autumn Statement become reality.”

I could give countless other examples. This is dramatically changing the prospects of life science research in Cambridge.

I know that the Government want to champion life sciences as part of their ambition to ensure that we are a life sciences superpower. I have worked with the Government on that. Indeed, I welcomed the life sciences Minister—the Minister of State, Department of Health and Social Care, my hon. Friend the Member for Colchester (Will Quince)—to my constituency just last week. I know that they want to tackle fraud in the R&D tax credits regime. As a taxpayer, I very much want us to do that; it is a duty of Government to ensure that the taxpayers’ money is well spent. We share those dual objectives, but there are better ways to tackle fraud without harming research. We can throw out the dirty bathwater without throwing out the baby.

Here are some suggestions. We can ban contingent fee—no-win, no-fee—tax agents. A whole industry of people are trying to make money out of encouraging other people to put in fraudulent tax credit claims. We could ban that. We should resource HMRC so that it can scrutinise the claims. Most claims are automated and there is no scrutiny of what is put in. That encourages and gives an easy ride to fraudsters.

We can also limit claims for soft innovation—that is, technical maintenance and updates that would have been made anyway and which people would not normally think of as research and development. They should not be getting research and development tax relief in the first place. Lastly, to distinguish between the life science companies that we all want to encourage and the fraudsters and chancers, the Government could create an R&D tax regime for knowledge-intensive companies, which are already recognised in the tax codes; there would be no definitional issue, because those companies are already in the tax code. I am talking about companies with under 500 employees carrying out work to create intellectual property and expecting the majority of their business to come from that work within 10 years, or companies where more than 20% of employees are doing research roles requiring a master’s degree, a PhD or beyond.

If the Government take those steps, they can promote research while tackling fraud. I urge them, on behalf of all the businesses in my constituency—dozens of which have been in contact—to delay the implementation of the change, consult the industry on it and to look at more specific ways to tackle fraud, so that we can distinguish between genuine research that we want to encourage and the fraudsters and chancers. Will the Financial Secretary or the Exchequer Secretary—I am not sure whether this applies to him or her—meet me and industry representatives urgently to talk about the impact of the changes in the regime on life sciences research in the UK? With that caveat—I realise that it is a big one for my constituency members—and assuming a positive answer, I support the Bill overall, and I commend it to the House.

November 30, 2022
Shaun Bailey – 2022 Speech on the Finance Bill

The speech made by Shaun Bailey, the Conservative MP for West Bromwich West, in the House of Commons on 28 November 2022.

I could say so much about what we are debating today that I do not know if I can contain myself. I am fortunate that procedurally there is no time limit for Finance Bills, so I could speak for hours about the Government’s proposals, but I will be as circumspect as possible. We have heard some fantastic contributions, including from my hon. Friend the Member for Eastleigh (Paul Holmes); I assure him I listened to his speech and it was a fantastic contribution.

We have had the usual back and forth, with Labour playing the blame game while also failing to understand that when we spend £440 billion to keep the economy going—to keep people in work, to keep jobs, to keep people sustaining what they are doing—there is going to be a price to that, as there is from Putin’s illegal and aggressive invasion of Ukraine.

We are facing some of the most difficult economic circumstances ever, and it is right that our tax measures have made those with the broadest shoulders carry the largest burden, because they know that is vital to ensure the longer-term recovery of our economy. In doing that, we strike a balance between making sure those people carry that burden and ensuring that the most vulnerable get the support they need.

Hon. Friends have talked about the ways in which that has been achieved, including the £600 million investment in infrastructure. Some suggested that investment was not happening, but I can assure them that it is: my local authority and borough are being supported with £60 million of investment from the Government’s towns fund, with a further £20 million in levelling-up funding bid for at the moment, so we have absolutely seen support from this Government. Some 125 small and medium-sized manufacturing businesses in my constituency—or, as we say in the Black Country, metal bashers, because that is ultimately what we do —benefit from the infrastructure investment and R&D support.

The protections to the triple lock were a dividing line. I point out to the Labour party that when it left power in 2010, we had some of the worst rates of pensioner poverty in Europe, yet Labour Members never talk about that, do they? They never mention that and they have never apologised for it. Under this Government, we have had the triple lock for pensioners—people who worked hard, contributed and have paid in for all their lives.

I have a lot of respect and time for the hon. Member for Aberdeen North (Kirsty Blackman)—I have worked with her on a number of bits of legislation—and when I think of hard workers, I think of the people on the minimum wage in my local factories and those manning shops and working in retail, in unforgiving jobs. It is those people who have paid in their whole lives and want to see that return. Notwithstanding the points that she made about Scotland—I heard and understood them—investing in and safeguarding the triple lock is exactly what we need to do.

I do not wish to repeat too many points made by hon. Members today—I am conscious that at this point in the debate there is a risk of doing that—but it has been vital that we strike a balance in this Finance Bill. That balance is about being fiscally prudent, as my right hon. Friend the Chancellor made clear, but not on the backs of the most vulnerable. It is also about ensuring that investment in good public services, which was at the heart of the Government’s promise and the contract we made three years ago, is maintained. We have safeguarded investment in levelling up, safeguarded investment in infrastructure, safeguarded and increased investment in education and safeguarded investment in the NHS to ensure that our public services are there. As far as I am concerned, if the Labour party thinks that is some sort of abhorrent thing to do, I do not know where its head is at. If it means that my constituents get the services that they want, pay for and rely on—that they can access a GP, get into a hospital and see their kids go through a decent education system—I will back that to the hilt, because ultimately I was put here to safeguard their public services. We know that we are in a tough situation, but my hon. Friends on the Treasury Bench have struck that balance. It is vital that, as we move forward, we continue to assess the situation.

In finishing, I have a few asks, as I often do—I see my hon. Friend the Exchequer Secretary looking at me in anticipation. I was pleased to hear mootings of an industrial strategy. Those of us in the Black Country, where we are proud of our industrial heritage and our infrastructure, can be at the forefront of the new industrial revolution, particularly on the green agenda. I know that the Government are particularly concerned about energy security, and I am more than happy to meet my hon. Friend about that.

My ask is that we ensure that areas where we have good industrial capacity are not forgotten. One point relayed to me is that there is sometimes a feeling that those who are not in financial services or a service industry are a bit left behind. I see my hon. Friend looking at me; it is vital that we have an industrial strategy focused on our manufacturing base—he and I have had discussions about that and are passionate about it—to ensure that good, strong manufacturing and engineering jobs can be part of our growth and recovery, particularly in the Black Country. We already have the infrastructure, so let us make the most of it.

The Bill strikes the right balance by protecting public services and safeguarding the most vulnerable. As far as I am concerned, we are fulfilling the contract that we made with the people three years ago.

November 30, 2022
Clive Efford – 2022 Speech on the Finance Bill

The speech made by Clive Efford, the Labour MP for Eltham, in the House of Commons on 28 November 2022.

I was struck by a quote I read a while back of the head of the Institute for Public Policy Research centre for economic justice, as it sums up the problem we face as a country:

“There is a massive structural flaw in the economy that whatever the economic shock the wealthier get wealthier. If we’re going to get the whole economy into recovery, and leave no one and nowhere behind, we need to change this. Societies that are so unequal are bad for everyone and policymakers need to address this dangerous gap, or risk people losing trust in our economy and democracy.”

At the core of that problem is the way we treat wealth in our taxation system. In an earlier intervention on the Minister I mentioned that the National Audit Office says that the total the Government invested in the economy during covid was £368 billion, which is roughly equivalent to £5,600 per head. Whichever Government had been in office at the time would have done something similar; they would have introduced a furlough scheme and helped businesses. That happened under the last Labour Government when there were crises: we stepped in on foot and mouth and the banking crisis, so forms of assistance were put in place. I therefore accept the assistance that the Government put in place, and I am not arguing about it, but it is ridiculous for the Government to argue that that money was paid and is now in the bank accounts of the people who received money during furlough or of the businesses who received assistance. It was paid to those individuals and businesses and it was used, and it has therefore moved on in the economy. That is £368 billion that has gone into the economy, and my question is: where is it now?

Most analyses of what happened in covid that are worth reading find that the wealthiest did extremely well during covid, so my question to the Government—and I would ask this of any Government—is this: what do we do about that? These people were already wealthy and now they are getting even more wealthy, which will drive the inequality the Government themselves say they want to deal with through levelling up.

Matt Rodda (Reading East) (Lab)

My hon. Friend is making an excellent speech. Is he, like me, thinking about all the people who wrongly profited from selling personal protective equipment to the Government and the lack of proper assessment of some of those offers of help and the lack of proper procurement processes being followed? Does he agree that many ordinary members of the public and NHS staff found that quite wrong?

Clive Efford

My hon. Friend’s intervention speaks for itself and I absolutely agree; that is an example of where this Government go wrong by treating the wealthy differently from others.

During covid, the number of millionaires and billionaires grew; we have the highest number of billionaires ever in The Times rich list and their combined income during that period grew by one fifth. So we can clearly see that inequality has been turbocharged by the money the Government put into the economy. I do not criticise the Government for putting that money in, but I do ask: where is that money now, where are the people who have benefitted most from it, and should they not, with their broad shoulders, bear more of the burden?

We have consistently had low growth over the last 12 years under Conservative Governments. The Resolution Foundation’s recent report “Stagnation Nation?” found that in each decade from the 1970s real wages rose by an average of 33% until 2007, but that that fell to below zero in the 2010s. So today average household incomes are 16% lower in the UK than in Germany and 9% lower than in France, having been higher than both in 2007. Under the Conservatives there has been a consistent shift of wealth from average household incomes to the wealthiest in the country. The policies they have pursued have been driving inequality, and my point is that until we reform how the taxation system deals with wealth we will not address that growing divide between those at the bottom and those at the top. This Finance Bill completely fails to address that problem.

November 30, 2022
Tom Hunt – 2022 Speech on the Finance Bill

The speech made by Tom Hunt, the Conservative MP for Ipswich, in the House of Commons on 28 November 2022.

On the point that has just been made that those of us on the Conservative Benches have some kind of income threshold in mind when we talk about hard-working people, I can assure the hon. Member for Aberdeen North (Kirsty Blackman), who made the comment, that that certainly is not the case for me. When I think about hard-working people and hard-working constituents in my patch, I recognise that some of those on the lowest incomes are among the hardest working. They make the decision to get up in the morning, scrape the ice off their windscreen and go to work because they think that is the right thing to do, so that certainly is not my view, and I do not think it is the view of many of my colleagues either.

On the point about Brexit, I think it is beyond the debate in this place, in that we have had Brexit and then afterwards we have had the pandemic and the biggest war in mainland Europe since the second world war. The reality is that it will be a long time before we can truly assess whether Brexit was the right thing to do and come to a conclusion. Coming to a conclusion two to three years after it has been delivered, given that we have just come through a pandemic and we are grappling with the biggest war in mainland Europe since the end of the second world war, is quite childish and not the right thing to do.

I spoke last week about the fiscal statement, and I welcomed many of the measures. I welcomed the fact that universal credit has gone up in line with inflation, I welcomed the protection of the triple lock, and I welcomed the fact that the national living wage is going up. I also spoke about the international context in which this debate is happening, and the fact that when we look around the world, particularly at comparable countries, we see countries that are all grappling with levels of inflation that those countries have not seen for many decades. That is something we have to bear in mind, but at the same time I think we have to be open and honest about some of the mistakes that were made by the previous Administration.

However, it is high time that the Opposition started dealing with what is in front of us, and by what is in front of us I mean the statement that was delivered only a few weeks ago. More often than not, I hear the Opposition engaging with the previous Administration, not the current Administration. The longer this current Administration get going with their package of reform, the harder that will be for the Opposition to do, because the current Prime Minister was of course the one who predicted many of the negative consequences of what the previous Administration did. When it comes to economic credibility, I say that the Prime Minister, in lockstep with the Chancellor, has by far and away the highest capital when it comes to these issues.

I want to talk about two issues that I did not really talk about last week to do with the Finance Bill. The first is education. I do think it was an achievement: the Government had to make some incredibly difficult decisions to get our public finances on a surer footing, but, even despite that, they were able to bring forward £2 billion of extra funding in education for schools. This is something that I care passionately about. I would, however, say that I have been contacted by Suffolk New College, the principal further education college in Ipswich, which does fantastic work that not just our local area but the country will rely on to equip local people with the skills necessary to make a success of Sizewell C and also of the freeport at Felixstowe and Harwich. I would like to bring forward its request that the further education sector is considered for any potential underspend in the school system between the years 16 and 18. It is right that the Government highlight the importance of skills, apprenticeships and further education. Of course, we have an Education Secretary who was an apprentice herself, and I am confident that the Government will bring forward, in time, solutions to the way in which we fund our further education sector. I made a promise to Viv from Suffolk New College that I would make that point in this speech today, and I have just done so.

I have spoken constantly since I was elected about the importance of special educational needs. I have also spoken about the fact that there are ways in which we can improve special educational needs provision, and it does not all involve more money and more spending. I have come up with ways in which that can happen by reforming the way Ofsted assesses schools, so that it is always an incentive for schools to prioritise first-rate special educational needs and disabilities provision, but a lot of it is to do with resources.

Only recently, I was in the constituency of the Exchequer Secretary to the Treasury, my hon. Friend the Member for South Suffolk (James Cartlidge). He allowed me to step foot in his constituency. There is a part of his constituency that is essentially Ipswich—he is incredibly lucky to have a little bit of Ipswich in his constituency—and he allowed me to step foot in a very special school called the Bridge School. I went there to see a community café that has been opened by the Bridge School, and the whole purpose of that café is to increase the opportunities for the pupils at that school to interact with members of the community to build their confidence and their ability to integrate and play a positive role within their community.

I went into the school afterwards, and I saw some fantastic best practice in supporting some of the most vulnerable young people. For example, it has an indoor swimming pool, and I saw the way that that was used. The reality is, though, that all of this costs money, and some of the most powerful interventions for the main special educational needs cost money. My argument would be that this is an investment; it is always an investment. Utilising the talent and the ability of young people with very special needs—neurodiverse thinkers—is an investment. When we look at some of the depressing statistics when it comes to how many people in the criminal justice system have special educational needs because they have not got the support they need, we know that investment is morally the right thing to do, but it is also the right thing to do from the point of view of the Exchequer. I would also say that at some point I would like to look at the way that Suffolk SEND in particular is funded, because I still think that, when we are compared to other areas, we do not get a fair deal in SEND funding.

Secondly, I would like to talk about devolution. The Suffolk devolution package was announced as part of the fiscal statement, which has confirmed £480 million over a 30-year period. I think this is really good news, and what I quite like about the Suffolk devolution package is that it will not be creating a new tier of bureaucracy. I have intimate or a lot of experience of mayoral combined authorities—I worked at a mayoral combined authority in Cambridgeshire and Peterborough —and I have to say that the structure in place is not working. I think that plonking a new level of bureaucracy on top of an existing local government structure created unnecessary tensions, and having a way of delivering devolution that does not create another tier of bureaucracy, but actually devolves power and funding directly into the existing county council, is the right thing to do. It will save the Exchequer money, it will lead to better and more streamlined decision making, and it will avoid some of tensions and the conflicts that have come about as result of the devolution in Cambridgeshire and Peterborough, so I welcome that.

I also welcome a key aspect: the devolution of the adult education budget. Adult education often does not get the attention it deserves in the educational sphere. I saw the way adult education was devolved in Cambridgeshire and Peterborough, when decision making was put into the hands of local politicians and local specialists, and the difference that can make. Money was directed into the areas where it could make the biggest difference, and I saw the transformative effect that that was having in the most deprived parts of Cambridgeshire and Peterborough.

I think it is important, when we talk about the fiscal statement, that Suffolk was at the heart of it, and it was at the heart of it because of Sizewell C, which could potentially bring forward 10,000 new jobs. So we in Suffolk need the Government’s help to ensure we can step up for our education sector to get the high-skill people necessary to make a success of Sizewell C, which will have huge implications at national level. There is an opportunity therefore, and it is almost uncanny that we have the news about Sizewell C while at the same time we have the devolution of skills associated with Suffolk devolution, because by devolving those budgets and powers we are better able to deliver for the country the skills we need to make a success of Sizewell C.

My final point on devolution is that, even with the steps we have made on devolution over the last decade or so, we remain one of the most centralised democracies in the world. Not all my colleagues are supporters of devolution, but I am; I think there is something to be said for the American expression, “Laboratories of democracy”. To have proper devolution, we must have an element of fiscal devolution; I know some in the Treasury would be cautious of this movement, but that should at some point be explored. Devolution can work, because ultimately it is about putting power closer to people, and in principle that is a good thing that no one can disagree with, but we need to do it in the right way.

I have gone on for far longer than I anticipated—11 minutes in total; a precedent was set before my speech. I welcome the fiscal statement and the Finance Bill, which represents a fair and compassionate approach and which, even in the most challenging times, finds a way to invest in education, and that will always have my support.

November 30, 2022