Tag: 2022

Kirsty Blackman – 2022 Speech on the Finance Bill

The speech made by Kirsty Blackman, the SNP MP for Aberdeen North, in the House of Commons on 28 November 2022.

We have Schrödinger’s Finance Bill. For a while, there was no Finance Bill. Then yes, there was going to be one. Then, no, there was not going to be one. Now, finally, we have come to the decision that the cat is alive and the Finance Bill is here before us.

I am old enough to remember Philip Hammond standing up and being very clear that there would only be one fiscal event in a year, that we would move to having an autumn statement and that would be the fiscal event, and that the spring statement would only be a statement and an update. I would be the first to admit that this year has gone somewhat wrong, so there are some excuses for having a different scenario this year, but I am keen to know what the intention is. Do the Government intend to have one major fiscal event a year, or are they planning to have more than one? If we are going to have a spring statement next year that will, presumably, from what was said earlier, have a Finance Bill attached, will we also be having one in the autumn next year? Will we have an additional one in September that will crash the economy? One would hope not. It would be good to know what the plans are.

We heard from the hon. Member for Warwick and Leamington (Matt Western), in quite a lot of detail, comparisons of the UK’s economy and economic state with that of many other countries. He laid out the figures nicely, which saves me from doing the same thing; I will not repeat what he said. What he said makes it clear that there is a unique issue here. Something is happening in the UK that is not happening in other places, apart from Russia, where there are sanctions, and it is understandable that the Russian economy is not in the best of states. What could possibly be happening to the UK economy? What is it—what uniquely is happening?

I keep wondering what has happened to this Brexit bonus. If our economy is so much better as a result of Brexit—if that has massively helped our economy, and many Brexiteers have made it clear over many years how much of a good thing it would be for the UK economy —can the House imagine the state we would be in if Brexit had not happened? Can the House imagine how dreadful things would be if we had not seen this Brexit bonus, which has still left us somehow, unexplainably, in a worse economic condition than has happened with other countries? I am baffled by this scenario.

We have been hit by a major number of issues. It is absolutely the case that the war in Europe—Putin’s illegal invasion—has had a major impact, and it has also had a major impact on other economies across the EU and the world. It has had an impact not just on energy prices, but on the price of food, for example. All those countries are seeing prices increase, yet none of them is struggling with growth in the way that the UK seems to be. None of them is seeing the level of recession predicted for here, and it is entirely down to Brexit and the decision-making processes of this UK Government. It is also down to the choices made earlier this year, which failed to take into account the scenario we are in. They failed to listen to the situation facing our constituents.

It is all well and good for Government Members to stand up in the Chamber and talk about the importance of growth—I will not for one second deny that growth is important, but if growth means that rich people get richer and people in Aberdeen and our constituencies still cannot afford to buy rice and pasta, that growth is not worth it. It is not worth it to see people get unimaginable amounts of money. Some £29 million in profits from personal protective equipment is an unbelievable amount of money for somebody or a family to get. Most of my constituents and most people across the UK will never see anything like that money in their entire lifetimes, yet it seems to be acceptable to the Government—while the fact that my constituents and people in Aberdeen, across Scotland and across the UK cannot afford to pay for the very barest of necessities is not remarked upon, is not mentioned and does not seem to be happening.

The Conservative Government keep talking about how much they care about vulnerable people—it has been mentioned a number of times—but that is not borne out and it is not what is happening on the ground. People’s lives are not being improved as a result of the decisions being made by those on the Government Benches. We are not seeing people better able to afford their energy bills; their energy bills are still significantly more than they were this time last year. The benefit cap still needs to grow massively to keep pace with its 2013 levels. The childcare allowance included within universal credit is at the same level it was when it was first introduced, when universal credit first started. It has never been increased. These are decisions that could be made that would make a difference to my constituents’ lives on a daily basis, but they are not being made.

We will not get our way out of this with innovative jam. That is not how it will work. We need to ensure that those who need it most—the people who can afford the increases least—are the ones being targeted by Government support and receiving the funding to help them to afford the basic necessities: food, clothing for their children and energy to get them through this winter. That is why the decision-making processes of the Scottish Government have been the way that they have.

As my hon. Friend the Member for Glasgow Central (Alison Thewliss) pointed out, the UK Government have talked about the additional money from Barnett consequentials, but that does not assist people this year, because of the constraints on the Scottish Parliament’s budget and because of the decisions taken by the UK Government. It will not help us to work on our second child poverty action plan, which we are now in the process of doing. We have put tackling child poverty at the forefront of what we are doing in Scotland. The eligibility of the Scottish child payment increased again the week before last, so more children in more families can get it than ever before.

We in the Scottish Government are targeting our support there, because that is where we feel that we need to make the most difference. We need to ensure that children are not living in poverty or in cold homes that their parents cannot afford to heat. We need the UK Government to step up, and not in an empty way by saying that there is an extra £1.5 billion—I do not know—in Barnett consequentials over two years, because that is not helpful. We need the money now—my constituents need the money now—to afford to get through the winter.

Another thing that has been mentioned is that hon. Members regularly use the term “hard-working people”, which is one of my biggest bugbears. When Conservative Members talk about hard-working people, they are talking about people earning £40,000 or £50,000 a year; they are not talking about people working in minimum-wage jobs. When they say that hard-working people have to pay higher taxes in Scotland than the rest of the UK, they are failing to recognise that we have an additional lower-rate tax band that means that people on the lowest incomes pay less in Scotland, and they are denying that people on the lowest incomes are hard-working people. It is the case, however, that a significant proportion of people on universal credit are in work. Just because someone is in receipt of social security does not mean that they are not hard working or that they are less deserving than people earning an awful lot of money from dividend incomes or other sorts of unearned income.

Stats came out earlier this year about the level of sanctions on people receiving universal credit, which said that there had been a monthly increase in the total amount of reductions being levied—money taken back from individuals who are claiming universal credit. Right now, the Department for Work and Pensions should not be trying to increase the amount of money that it is clawing back from people in receipt of universal credit.

We already have the issue that, when the DWP decides to make debt reductions from people’s universal credit payments, it does that not on the basis of whether those receiving universal credit can afford it, but on the basis of an arbitrary 25% threshold. As a result of DWP actions and the failures of the UK Government, we will have a situation where people cannot afford to heat their homes or feed their children purely because of the reductions that are being made to their income.

I have harped on about immigration several times. A number of years ago—I am a veteran of many Finance Bills—the former Chancellor George Osborne stood up and spoke about public sector net debt. In fact, his Red Book that year talked about it specifically and made it clear that an increase in net migration to the UK reduces public sector net debt. By trying to do everything they can to reduce immigration, therefore, the UK Government increase public sector net debt.

The UK Government could decide that one of the best ways to do something about the lack of growth and the amount of debt, about which they are concerned, would be to encourage people to come and live here, and to make that easier. Instead, my constituent is going to move away from the UK because he cannot get a visitor visa for his family to come and visit, so he is fed up and has had enough. As a software engineer, he is somebody who we need to have and whom we should be encouraging to stay; we should not be as obstructive as possible in our decisions.

The UK Government have also failed to tackle—in fact, they have gone out of their way to oppose—our climate change ambitions and targets in this Finance Bill. We are looking at issues in relation to electric cars, as was mentioned earlier, and allowances for oil and gas companies to extract more oil and gas, rather than the allowances that could be given to companies to develop renewable electricity. The electricity generator levy is also being levied on people who are producing renewable energy, which is the kind of energy that we need. We cannot talk about COP only once a year when it is COP26 or COP27—it should be threaded through every single decision that we make.

We have heard about R&D credits and tax reliefs, which I do not have a problem with in principle, although I am concerned that we need to see whether they work. I do have a problem, however, with how decisions are made to give people R&D tax credits. When the UK Government created the Advanced Research and Invention Agency, why did they refuse point blank any amendments that would have put tackling climate change at the heart of its decisions? We said that it should be climate neutral and that the Government could lead the way with a brand-new Government agency working on a net zero basis, but they refused. We said that they could convince or ask it to focus on innovations and inventions that tackle climate change, but they refused to do that, too.

We need to see an actual effort made—actual things done and decisions taken—to ensure that we tackle climate change and meet our net zero ambitions. If we could meet our net zero ambitions even earlier than we have proposed, that would be the best thing for the planet, rather than trying to push things until the last possible moment. We cannot just ignore climate change and pretend that it is not happening—it is!—so it should be in every Government statement, and the Government should talk about the effect on climate change of every spend that they decide to make. The decisions in the Finance Bill take us backwards rather than forwards.

The Scottish Government are supporting a just transition in Scotland with £500 million of funding to ensure that we move away from the reliance on fossil fuels that we absolutely have in the UK, particularly in Aberdeen, where there are a huge number of jobs in oil and gas. We need to support a transition that is just and fair for my constituents and for people across the UK. We need to ensure that people in oil and gas are given, or have the opportunity to move into, high-earning jobs in the new industries of the future that do not cause an increase in climate change.

Austerity has been levied on the poorest people for years. Conservative Governments have consistently made decisions at the expense of our worst-off constituents. I have never been less optimistic about the future for the poorest people in the UK than now—not even through the Brexit process and decision-making. The Government have shown no willingness to understand the genuine dire straits that people are living in, to take action on that, and to prioritise the most vulnerable people—not just to say it, but to actually do it—by looking at the universal credit system and the decision-making process to ensure that people can afford rice and pasta, and to heat their homes. How is it that we have to be asking that in 2022? How is it that we have to be living in a situation where the next generation are currently set to be poorer than our generation? We have that lack of optimism, and this Conservative Government continue to hammer that home, rather than attempting in any way to make it better.

That outlines very clearly the difference between the two Governments. The difference is that the Scottish Government are doing everything they can, with their very limited powers and limited ability to do anything in-year with their budgets, to try to make life better for those struggling the most, and this UK Government are continuing to refuse to do so.

November 30, 2022
Simon Baynes – 2022 Speech on the Finance Bill

The speech made by Simon Baynes, the Conservative MP for Clwyd South, in the House of Commons on 28 November 2022.

The Government have made some tough but fair decisions to restore economic stability and tackle inflation. To achieve long-term, sustainable growth, we need to grip inflation, balance the books and get debt falling as a share of GDP. But even with the changes outlined in the autumn statement, which will take effect through this Finance Bill, the UK tax system remains competitive, with a lower tax burden than Germany’s, France’s and Italy’s and the lowest headline rate of corporation tax in the G7. Of course, the UK also has the lowest unemployment rate for almost 50 years.

The hon. Member for Ealing North (James Murray) referred to the Office for Budget Responsibility, which expects the package to reduce peak inflation and unemployment. It also notes that GDP will be 1% higher due to these measures. The Bank of England expects the package to help tackle inflation and keep interest rates lower for borrowers and mortgage holders. All that is vital to ensure sustained public service support and investment in the years ahead, and it is on those two issues that I would like to focus my comments briefly this afternoon.

On public services, the Chancellor’s proposals will increase taxpayer funding for the NHS and schools by an extra £11 billion over the next two years. Looking in more detail, the additional £7.7 billion for health and social care in the next two years means that, despite the challenging economic circumstances, the Government are providing £2 billion to £3 billion in additional funding for the NHS in each of the next two years to bring down ambulance waiting times, tackle the covid backlog and improve access to GPs. The Chancellor is also providing £2.8 billion next year and £4.7 billion the year after for adult social care, which will double the number of people leaving hospitals on time and into care by 2024, addressing unmet needs and boosting low pay in the sector. I call that a compassionate series of policies.

I am pleased that the chief executive of NHS England has said that the extra funding that the Chancellor is making available for the NHS is

“sufficient funding for the NHS to fulfil its key priorities”

and

“shows the government has been serious about its commitment to prioritise the NHS.”

The £4 billion in additional funding for schools will increase the schools budget by £2 billion this year and £2 billion next year. That will mean that the Government have fulfilled their pledge to restore per-pupil funding to record levels, with real-terms per-pupil funding rising at least to 2010 levels, which is more than Labour has pledged to give schools.

The Chancellor’s proposals maintain public capital investment at record levels, delivering more than £600 billion of investment over the next five years. Contrary to the remarks by the hon. Member for Leicester East (Claudia Webbe), the Government remain committed to key national infrastructure projects, such as high-speed rail, Northern Powerhouse Rail and Sizewell C. I am pleased that the £1.7 billion levelling-up fund is protected, particularly as I have seen in my own constituency of Clwyd South the unfolding benefits of our successful £13.3 million levelling-up fund bid; it is benefiting numerous projects along the Dee valley.

The Finance Bill also ensures that research and development funding is protected and reformed. It reconfirms the Government’s ambitions on research and innovation by recommitting to increasing publicly funded research and development to £20 billion by 2024-25.

Anna Firth (Southend West) (Con)

Does my hon. Friend agree that every pound invested in the private sector in research and development returns 25% back every year forever, and that every pound spent by the Government on research and development is met by a 20% increase in research and development in the private sector? Does he agree that this is a down payment on high-paid jobs and growth for the future?

Simon Baynes

I could not agree more with my hon. Friend. Indeed, it goes to the point made by the hon. Member for Warwick and Leamington (Matt Western) about productivity. It is through such investments in research and development and supporting major capital projects that we can drive up productivity over the coming years.

As a Welsh MP, I am particularly keen to strengthen the Union of the United Kingdom, and I welcome the £3.4 billion of additional funding for the devolved nations. There is an extra £1.5 billion for Scotland, £1.2 billion for Wales and £650 million for the Northern Ireland Executive. I am also pleased to see that the Government have announced funding for the feasibility study for the A75 in Scotland, the advanced technology research centre in Wales and a global trade and investment event in Northern Ireland. Making sure that the whole United Kingdom can grow and increase its productivity is a central theme of this Finance Bill and the autumn statement.

In conclusion, the Bill has my full support. It shows that we do not have to choose between a strong economy or good public services—with a Conservative Government, you get both.

November 30, 2022
Matt Western – 2022 Speech on the Finance Bill

The speech made by Matt Western, the Labour MP for Warwick and Leamington, in the House of Commons on 28 November 2022.

It is a pleasure to follow the hon. Member for Darlington (Peter Gibson).

We have heard a great deal about the recent Budget—the last couple of Budgets, I suppose—and where we find ourselves, but we are not just talking about the events of recent weeks or what could be described as global headwinds. We have to understand what has been going on in the wider landscape—the energy price shocks suffered globally, the supply chain shortages and the rising global interest rates—but beyond what could be described as global factors, we have specificities: the factors that set the UK apart from other nations.

I take on board a lot of the comments that have been from the Government Benches, but as the Institute for Fiscal Studies put it, it is clear that the UK is in a much worse position because of its economic own goals. We could talk about the impact of the bodged Brexit deal, which economic forecasters have shown has impacted our growth figure by 4.5%, or the shocking, catastrophic kamikaze Budget of 23 September, but we have suffered a decade of anaemic growth and now we are set for even weaker growth.

As has been said, of course the pandemic impacted on our economic situation, as it has across the world—we need only look at what is happening in China right now and what will be happening to Chinese GDP as a result of all the measures there. However, we face even weaker growth than others. We will have the weakest growth out of all the major economic nations of the G7, and over the next two years we will have the lowest growth out of all 39 nations in the OECD, other than sanction-ridden Russia. In fact, the Office for Budget Responsibility predicts that over the forecast period growth is set to average just 1.4%, compared to an average of 2.7% that we enjoyed over 13 years under the last Labour Government.

Last week, in its “Economic and fiscal outlook” report, the OBR confirmed that the autumn statement measures added nothing to growth in the medium term. Real wages are lower now than they were when the party opposite entered power in 2010. That is the harsh reality of what we are talking about. We can talk about all sorts of statistics in the abstract, but people will know just how hard this is already hurting and how hard it is going to get. I do not know whether any of us will be able to recall this, but the last time we had such a 12-year period of wage stagnation was back in the Napoleonic wars, which is a pretty damning indictment.

This has real impacts for everybody in our society, and I will set out a few markers. My constituents, along with people across the country, will see a staggering 7% real-terms reduction in their income over the next two years, leaving the average worker £40 worse off. To give a different perspective, the Resolution Foundation said that compared with trends seen when Labour was in government, people will be £15,000 worse off, coupled with sky-high inflation that disproportionately falls on poorer households, as the hon. Member for Leicester East (Claudia Webbe) said. While food inflation has increased by 14% across the board, certain basic staple products have increased by as much as 60%, as I can see in the shops in my constituency of Warwick and Leamington.

Businesses are also suffering. I appreciate that measures have been put in place, but the lack of business rate support is a glaring omission by this Government. One of the things that should be concerning them the most is the lack of business investment and the OBR forecast that we will now see business investment growing by 6.7% less over the coming years. That must give all of us concern for our long-term economic growth.

Something else that should concern us is what has happened to the FTSE 100. Okay, it is just a bellwether indicator, but it is now smaller than the CAC 40 in Paris—the first time that Britain’s stock market has lost its position as the most highly valued in Europe. When we look back to 2016, we see the significant reversal of fortune: London was worth about $1.4 trillion more than Paris.

Ten days ago, there was a political choice in respect of the Budget: stealth taxes on working people, or a fairer tax system. I fear that the Chancellor has gone in too hard on hard-working people when it comes to footing the bill. He claimed to be fair, but he has not been. The recent Bank of England monetary policy report spoke of the impact of UK-specific factors on borrowing costs. The Financial Times estimates at just under £17 billion the real-terms spending increase in the mini-Budget due to the increase in the gilt rate. This economic crisis was made in Downing Street and its cost is being put on the shoulders of working people: the tax burden is the highest since world war two.

The Prime Minister’s decision to give oil and gas giants such large untargeted tax breaks has been surprising. It will cost the taxpayer £8 billion over the next five years. He and his Chancellor could have closed the tax loopholes, introduced VAT on private schools, tightened the energy profits levy, abolished non-dom status, launched a massive, much needed investment in skills and support for SMEs, and turned the UK into a green superpower. What we have instead are stealth taxes, which will take us backwards. I accept and agree with some of points made about corporation tax, particularly those of the hon. Member for Amber Valley (Nigel Mills). We saw a dreadful experiment under George Osborne that actually yielded very little for the UK but lost us a lot of tax take.

Under clause 6, there are changes to income tax, and the concern is how those will affect a lot of earners across the UK. What analysis has been done on the upper decile, or the top 2% of taxpayers? How does the impact on them compare with that on the lowest decile of earners?

As chair of the all-party parliamentary group on electric vehicles, I have a particular concern about clause 10, although I make these comments personally. The introduction of vehicle excise duty for zero-emission vehicles risks stalling the entire electric vehicle industry. We have already taken away consumer support, apart from some support for business users; we are the only major nation in Europe that does not provide such support for electric vehicles. There could be a real challenge as a result of the vehicle excise duty supplement, which will unduly penalise more expensive vehicle technologies when we should be ensuring that the sector expands and is successful. If we are to meet our net zero obligations, we have to persuade the consumer to come with us and increase the uptake in new electric vehicles.

We needed a framework that would encourage consumers and businesses to buy electric vehicles and get the industry to invest in the infrastructure network of EV charging points. Like the industry, I am really concerned that the change will have a serious impact and that investment, including from vehicle manufacturers, will be lost.

Labour’s plan would be to reboot the economy, to create the frameworks for businesses to operate within, to scrap business rates and to replace the apprenticeship levy with a skills and growth fund. We need to invest in skills and further and higher education, particularly to address the matter of productivity; it is disappointing that we did not hear about that from the Minister. Productivity is one of the greatest challenges for the UK, yet we have heard far too little over the last 12 years about how that will be addressed.

I will not support Second Reading, although I will, of course, support the Labour amendment. The Bill raises taxes unfairly on working people and introduces what will essentially be a fiscal drag over the coming years. We should have started by going after the easy money—the tax status of non-doms and further reductions in the tax allowances available to oil and gas companies. We should have replaced business rates with something far more progressive that would help our local businesses and maintain and restore our town centres.

Since 2016, 1.2 million zero-carbon homes could have been built; it would have meant zero heating bills for 1.2 million families. Sadly, the legislation got scrapped in 2011—just think of the impact that would have had on our energy demand and the relative prosperity of those households. Instead, we have austerity. Under Obama, the US had the American Recovery and Reinvestment Act 2009—and look at its trajectory since.

I am afraid that this Finance Bill has sold the UK public and UK businesses short. We have had 12 years and the last 12 weeks—far too long. We need a Labour Government.

November 30, 2022
Peter Gibson – 2022 Speech on the Finance Bill

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

It is a pleasure to be called so early in the debate. At the outset, I want to put on record Darlington’s thanks for the £250 million that came to us during covid.

In the autumn statement, we saw increased spending on education, health and social care; the largest ever increase in the living wage, to £10.42, putting us within pennies of our ambition to reach £10.50 in this Parliament; the triple lock guaranteed for pensioners; virtually all benefits, and the benefits cap, increased in line with inflation; and support for those struggling to meet energy costs. The autumn statement and the Bill continue our commitment to deliver for those on the lowest income.

We all know that these are challenging times. We also know that inflation makes us all poorer. However, the challenges of inflation, energy prices and interest rates can all be tracked back to Putin’s illegal invasion of Ukraine. I know the Chancellor has had to make some difficult decisions, but I believe that he has been fair and done much to restore economic stability, while continuing to invest in vital services and infrastructure.

Prior to being elected to this place I was an employer running a small business, and I know that businesses will warmly welcome the news in the autumn statement, particularly those on our high streets facing a much needed reduction in rateable value, and therefore a lower rates bill. That reduction would ordinarily be phased in over three years, so the fact that they will receive the benefit immediately is welcome indeed. That is something that I have been pushing for and that I was delighted to see. In addition, the current 50% discount available to hospitality and retail businesses will now be increased to a 75% reduction, with no impact on income for our local authorities. The Government really are on the side of small businesses.

When the Chancellor comes to visit the Darlington economic campus, where my right hon. Friend the Prime Minister was working from on Friday—just as my hon. Friend the Exchequer Secretary to the Treasury did last week—I look forward to taking him to see some of our amazing local businesses, such Origins Home, Leggs Fashion and The Art Shop, and the transformation taking place in the Darlington yards thanks to investment from the towns fund.

We all know that talent and ability are spread throughout the country, but opportunities have not been. The north-east has lagged behind for too long, under Governments of all colours, but this Government’s ambitious levelling-up agenda is already paying dividends to communities such as mine in Darlington. As such, I welcome the Chancellor’s commitment to infrastructure spending, with continued support for key infrastructure projects, and the protection of the £1.7 billion levelling-up fund. I am keeping my fingers crossed for the forthcoming announcement on levelling-up fund round 2, to which Darlington has submitted an excellent bid.

In Darlington we are already ticking boxes on levelling up: £139 million at Bank Top station, delivering three extra platforms and improving regional connectivity; £35 million invested in our rail heritage quarter, delivering on our commitment to heritage and driving more visitors to Darlington; and £23.3 million invested in our town centre, seeing real change in the High Row yards, Northgate and Victoria Road. I could also point to investment in green technology at Cummins and investment in life sciences, so key to our vaccine success, at the Centre for Process Innovation, together with investment in Darlington College. It would be remiss of me to not mention the fantastic job opportunities afforded to local people through the creation of the northern economic campus, ensuring that people in Darlington can stay local but go far.

Darlington said goodbye to its Labour council in 2019, ending a 28-year period of decline, and it is now going from strength to strength with the Conservatives at the helm, working hand in hand with our Tees Valley Mayor, Ben Houchen. However, the Chancellor knows that my council, the third smallest unitary in the country, faces economic challenges because of a funding formula that disadvantages areas like mine. That is long overdue for reform, and I hope that he will pay that issue close attention. I know that the Exchequer Secretary is making notes, so I hope he is listening too as he works on local government settlements.

The cost of living support payments that have been distributed by the Government over the course of the last year and into this year have already totalled in excess of £39 million for the people of Darlington, and the announcements in the autumn statement amount to a further £18 million for them. At its heart, the autumn statement set out a compassionate plan, meeting the real challenges faced by our public services and the fears of people facing increased energy costs, and continues our commitment to our ambitious levelling-up agenda, including delivering real improvements on business rates for the nation’s high streets. This Finance Bill is good for the country and good for the people of Darlington.

November 30, 2022
Claudia Webbe – 2022 Speech on the Finance Bill

The speech made by Claudia Webbe, the Independent MP for Leicester East, in the House of Commons on 28 November 2022.

Contrary to what we have heard, the Bill is not about growth. It goes nowhere near what is needed. It is not fair, and it is not just.

The median annual pay per person in my Leicester East constituency is, at £20,300, the lowest in the country according to the latest figures from His Majesty’s Revenue and Customs, which were published in April 2022. The national average for the same period was £31,461, meaning that the people of Leicester East are lagging £11,000 behind the national average, and are losing a third of their income to inequality. People in Leicester East are also paid less than the comparable figure for the east midlands region, which was £24,700. Child poverty in my constituency runs at a horrific 42%, perpetuating and deepening the disadvantages that our children already face. Furthermore, people in constituencies such as mine face a life expectancy 10 years shorter than that of the better-off.

Ordinary people in this country are already struggling after a decade of ideological cuts and conscious cruelty by successive Conservative Governments. Now, their situation is being compounded. The reality is that we face the longest recession ever, coupled with skyrocketing costs of living. That crisis is driven by corporate greed and Government mismanagement, through which the biggest burdens—rampant inflation, soaring interest rates and public spending cuts—are placed on the shoulders of those least able to carry them.

I do not think “cruelty” and “malice” are too strong a set of words for what is being done. What else should we call it when this Government have hunted for ways to make workers and communities pay for the so-called cost of living crisis, instead of getting the billionaires and millionaires, who have flourished and profited during the crisis, to pay up? The mere existence and normalisation of billionaires and millionaires in society and high office shows a broken political and economic system that can never work for everyone in society.

In my Leicester East constituency, people are no longer able to make choices between eating or heating. That choice is no longer meaningful because they are destitute and relying on food banks and warm banks. They need help right now. In communities such as mine the lowest-paid workers are being punished by this Conservative Government. Workers are turning up to Victorian sweatshops and being sent home without work or pay, having been denied their rights. Their contracts are not worth the paper they are written on. My community has been at the epicentre of wage exploitation for decades. There is nothing in this Finance Bill to address that.

The local authority in Leicester is already on its knees. It is still recovering from 12 years of austerity, which saw central Government grant funding cut from £289 million in 2010 to £171 million in 2019, with the shortfall in the current financial year expected to be around £50 million. The council has long since closed all its youth clubs, meaning that not only the people working in public services but the people using them suffer.

The Finance Bill does nothing to address the fact that, according to the Office for Budget Responsibility, the Chancellor’s autumn statement means that household disposable income will fall by a further 7%. The Chancellor claims that his mission is to sort out the cost of living crisis, but in reality the Finance Bill is turning the screw on many of the poorest and most vulnerable. Wealth is not meaningfully taxed and fortunes are simply left sitting around idle, enabling a class of people who never have to work for a living to live off interest, rents and dividends now and for the next 1,000 years, while the poorest go under.

This is not a plan for growth. The Office for Budget Responsibility does not forecast any growth for at least another half a decade. It predicts that the autumn statement will deliver economic stagnation, not growth. That means that, under this Government, wages and investment will suffer. In reality, the Chancellor has announced austerity 2.0, with real-terms cuts to public spending, cuts to international aid and cuts to capital spending on infrastructure—[Interruption.] Yes, cuts to capital spending on infrastructure. He is also freezing the threshold for paying income tax and national insurance. Thus, the Finance Bill increases taxes for people on low incomes, whose wages are already falling in real terms. This is a stealth tax in all but name, but the Chancellor has barely even bothered to disguise that fact.

The autumn statement is austerity, and the Finance Bill is its delivery tool. It will cause substantial hardship and lengthen the recession, while protecting the wealth of the 1% and allowing corporations to get away with massive profits. At the same time, working people and the vulnerable will suffer.

Uprating pensions and benefits by 10.1% in line with inflation for the first time since 2016, but not backdating that change, just scratches the surface and will not protect struggling families. The standard out-of-work benefit is now worth just 13% of the average weekly wage. The UK state pension lags far behind the average EU pension and is worth just a quarter of earnings, compared with 63% for the average EU pension.

Where is the equality impact statement that should have been published alongside this Finance Bill or the autumn statement? That would have made clear the impact on low-income households and those from African, Asian, Caribbean and other racialised groups, as well as on women and disabled people.

The autumn statement and this Finance Bill do nothing to address precarious and insecure work, zero-hours contracts, in-work poverty, high childcare costs or the rising cost of travel to work. The Government chose to force workers to meet work coaches to increase their hours or earnings, instead of tackling exploitative and scrupulous bosses, bringing rail and other public transport back into public ownership and ensuring that childcare is made affordable.

Private rents are growing at their fastest rate. Families are being driven out and made homeless as landlords pursue ever higher rents and for less space. The autumn statement and the Finance Bill could have offered a ban on evictions and a freeze on rent increases. Instead they do nothing for the millions in privately rented accommodation.

Meanwhile, fossil fuel firms can avoid paying most of any windfall tax by offsetting their investments in more oil and gas drilling. The Finance Bill is meaningless if we continue to subsidise and rely on fossil fuels. We need public ownership of energy to protect jobs, minimise prices and deliver a green, clean and sustainable future.

The effects of the autumn statement have rightly been compared to boiling a frog slowly. However, in Leicester East and places with similar levels of deprivation, the water started deeper and hotter, and the Chancellor has lit a big fire. According to the United Nations, all of this could easily have been avoided.

We need to see problems tackled at their root. We need public ownership of energy, transport and other vital services to keep costs under control and to ensure that profits are invested in improving those services and the fabric of our society. A complete reversal of cuts to local authority budgets is essential. Councils were long ago past the point where they could cope and maintain even essential services at the levels needed.

The Chancellor needs to think again about his plans and about his evident lack of concern or compassion for those who are going under because of the political and ideological choices that Governments have made. We must challenge and change this unjust and unfair economic system, not just put a sticking plaster over it. We need a society that cares for all so that no one is left behind. We cannot be happy that the annual median income in my constituency is £20,300. The Finance Bill fails on all counts.

November 30, 2022
Paul Holmes – 2022 Speech on the Finance Bill

The speech made by Paul Holmes, the Conservative MP for Eastleigh, in the House of Commons on 28 November 2022.

Thank you for calling me so early in this debate, Madam Deputy Speaker—presumably the answer is that you are saving the worst for first.

I rise to speak in favour of the Bill because in it we have the outlines of the clear steps necessary to ensure a solid financial footing and the path to growth in the medium term. I congratulate both of the Ministers on the Front Bench, my hon. Friends the Members for South Suffolk (James Cartlidge) and for Louth and Horncastle (Victoria Atkins), who are friends of mine. I am delighted to see them in their place, and I know they will take their roles seriously and deliver that much-needed economic growth.

We have to remember the context in which we find ourselves and this Bill: not just the £400 billion that we have spent on support for businesses and people during the covid pandemic, but the terrible situation we see in Ukraine. Those are the reasons why the nation finds itself in this situation today, as do many nations across the globe. I think the Minister said that one third of the world economy will be in recession over the next year, and that includes the United Kingdom. We need to set out that context and those reasons why we have to take the tough, difficult but fair decisions outlined in the Bill.

I remain convinced that the actions taken last week in the autumn statement and in this Bill put us on a path to growth and to a stable financial footing. I think that is what the public expect. When I go into my constituency every week and speak to people, they now want—dare I say it—boring leadership. They want us to have a stable and sound economic plan for the future, meaning that in the end they will have more money in their pockets and will know what this Government stand for. This Bill, the Minister and the Chancellor last week have all outlined that very clearly. As I say, that is what the public expect. They expect to be treated in a fair way, and this Bill outlines that fair way, with an equal base of spending cuts and tax rises.

I want to focus on some specific things in the Bill that we can achieve because of the tax measures that we are outlining, and what they will deliver. Because of this Bill, the most vulnerable in society will be protected. The announcements made in this Bill and the autumn statement mean that welfare and social security will rise in line with inflation and pensioners will be protected by maintaining the triple lock. That is incredibly important to the 19,500 pensioners in my Eastleigh constituency, as is the £300 they will get this year to support them with the rising cost of energy.

Particularly in areas such as Hampshire, we do not have particularly cash-rich pensioners; they may live in quite large houses in my constituency, but that does not mean they are cash rich. They have invested and saved and they have lived responsible lives. They are people who have paid into the system and deserve to get some stuff out of the system. That is why I am delighted that the Government are protecting the triple lock and have announced that extra support to pensioners, going some way to reassure them as they go through some of the challenges that we all face over the next year or so. We have also seen, through this Bill and the measures that the Minister has outlined, a total of £12 billion of support for the most vulnerable in our society. I am proud that the Conservative principle of protecting the most vulnerable is in full force.

Added to that is the £7 billion being spent on health services. I am sorry to see the Labour party this evening speaking against a Government measure that will see unprecedented amounts of investment going into our national health service as we come out of the covid pandemic and with the backlogs we have. I never thought I would see the day when Labour Members would stand up in this Chamber and argue against record amounts of investment in the national health service, but they have done so. I hope their constituents will see that when they watch this speech—or when they watch this debate. They will not be watching this speech, but they might watch the debate.

Crucially, we have also outlined £4 billion-worth of investment in our schools. When I went round my constituency during the covid pandemic, many students had missed out on vital schooling. The Government helped with that by putting in place measures such as remote learning, but we have to put in that investment to ensure that those students—often in some of the most deprived areas of my constituency, which does have areas of deprivation—are brought back up to the expected attainment levels.

Again, I am sorry that Members across this House—not on the Conservative side; or not yet, anyway—have again spoken against measures that would see record amounts of investment in our public services. Over the next two years, there will be £11 billion more for schools and the NHS. We will tackle the post-covid backlog and deliver for the future of this country by bringing in measures that we so desperately need after the shock that our economy has gone through in the past few years. The Chancellor has firmly set out the actions necessary for reducing inflation. The Minister has—ably, if I may say so—outlined the measures that the Chancellor has taken. The shadow Minister, the hon. Member for Ealing North (James Murray), who I have a lot of time for—I used to work with him when he was London’s Deputy Mayor for Housing—refused to accept, or at least did not put the necessary emphasis on, the fact that the international crisis we are in has caused many countries and many of our neighbours to go through the same issues we are going through.

The Chancellor has outlined measures to bring down inflation, including the £6 billion-worth of investment in capital spending for businesses, which is crucial. I do not expect you to remember this, Madam Deputy Speaker, but you were in the Chair when I made my maiden speech about the crucial investment needed in infrastructure across the United Kingdom. Investing in infrastructure across the United Kingdom means employing people, keeping businesses in work and bringing inflationary pressure down. That is why I am so pleased that the Chancellor outlined that last week, along with the measures in the Bill. The Government are protecting R&D spending and providing £14 billion of relief for small businesses by cutting the rates of tax that they have to pay.

Labour criticised the lack of inclusion of the Office for Budget Responsibility in the financial measures that were taken a few months ago. The Government have now included an OBR outlook, which states that 1% will be added to our GDP over the next year. Now, Labour suddenly wants to say that the OBR is very important. I agree, but Labour cannot have it both ways by pooh-poohing the OBR’s findings—that this Budget will help to grow our GDP—and then not necessarily taking its advice as read as we go forward.

Overall, the Bill is hard for now and takes some really tricky decisions, but I am convinced that it will deliver a stable economic outlook for everybody. I will go into a bit more detail on the measures that will reduce inflation. The Bill is split equally between tax rises and spending cuts. We are protecting and maintaining public spending for the next two years at the level set out in 2021, and then increasing spending by 1% in real terms every year until 2027-28. We have invested in our NHS and schools, which is, as I have said, important for the attainment and health outcomes of my Eastleigh constituents.

In the difficult measures that we will go through over the next few months, we are, vitally, protecting people from the shock of their living costs and energy bills going up. That is the most crucial thing: this Government have stepped in. The Labour party might not want to recognise that billions of pounds were spent during the covid pandemic. That has to be paid back at some stage, but we are now spending billions of pounds to protect people from the shock of energy bills.

I say again that I have a lot of respect for the shadow Minister, but I will not take lectures from him when he says that we are not taking the necessary action on nuclear or energy planning. It was his party that pre-emptively scrapped nuclear energy as an option for this country, which is partly why we are in the situation we find ourselves in today. I think he should go back and possibly rewrite his speech, and then come back and outline that his party is partly responsible for the crisis we are in.

I know that Ministers will not have been immune to hearing the press and some colleagues saying that the Bill, and some of the measures that have been outlined this evening, are not Conservative enough. Despite what many colleagues on my side of the Chamber may think, I am a fiscal Conservative, but I have to disagree with some of those assertions. In the Chancellor’s statement and in the Bill, we have framed the narrative on four things that I think are important: protecting the vulnerable, investing in public services, fairness in the tax system and delivering growth in the economy.

Standing here today, I am 100% fine with the measures outlined by this Conservative Government, because they are asking people with the broadest shoulders to pay the most, on a temporary basis, while we look after the most vulnerable in our society and target support during a troublesome time on people who genuinely need our help. If that means I am not a Conservative—I do not think it does, because the Budget and the measures are based on solid conservative principles—I am quite happy with that, but I think that this is a Conservative approach and one that we should be all proud of.

As is usual in these debates, we have opposition from the Labour party. In my seat, I often contest Liberal Democrats, but there are no Lib Dem Members here to outline their lack of plan for the cost of living crisis—but there we go. I am massively in favour of what is set out in the Bill. I am grateful to the Minister for outlining the measures that he has taken, because I know that, over the medium term, we will have growth back in the economy and people will see and be grateful for the Government’s actions.

November 30, 2022
Alison Thewliss – 2022 Speech on the Finance Bill

The speech made by Alison Thewliss, the SNP MP for Glasgow Central, in the House of Commons on 28 November 2022.

It is a pleasure to follow the hon. Member for Amber Valley (Nigel Mills), who gave a characteristically thoughtful speech. How strange it is that we agree on so many things in this debate, and yet on so few other things. It would be nice if those on the Government Front Bench listened to some of the considered and sensible remarks from their colleagues.

This Finance Bill really does illustrate that we are all having to pay more tax, because of the very misguided steps taken by the former Prime Minister and her Chancellor, who crashed the economy in 26 minutes, leaving us all £30 billion worse off. That will have an impact on this broken UK economy not just now, but for many years to come.

Let me start with the energy profits levy. That additional tax on UK oil and gas profits will increase from 25% to 35% from 1 January 2023. As the hon. Member for Amber Valley observed, this is being extended until March 2028, which illustrates the extent of the mess into which the UK Government and their Chancellors have got themselves.

We think that the Government should go in a slightly different direction. They should look beyond just a levy on energy profits. They might want to look at a windfall tax that includes share buybacks as well. That is something that Biden has done in the United States. That has had the effect of bringing more money into the American Treasury’s coffers—Canada is also doing this—and encouraging firms to put more money into research and development, into investing in their companies and into investing in the UK, rather than spending all their excess profits on share buybacks, That seems like an entirely sensible thing to do, given the state of the UK economy. This year, BP has earmarked £7.15 billion to buy back its own shares. The Treasury should look at what more can be done here.

The reduction in the investment allowance is to be welcomed, but that it exists at all remains a barrier to decarbonisation. The allowance creates a perverse incentive for companies to favour new oil and gas exploration over renewables by effectively offering them a tax break for doing so. Shell paid zero windfall tax under the previous scheme, as it invested heavily in oil and drilling instead of filing profits to be taxed against. That is hardly worth a candle compared with the net zero commitments that the Government tried to make at COP26 last year.

We are also concerned about the decision to impose a 45% tax on electricity generators as that can then undermine investment into renewables at the same time as allowing oil and gas companies to drill more. The chief operating officer of SSE has said that the company may have to “give up” on some of its plans when the tax comes into effect. He said:

“It’s going to take money away from us…and we won’t have as much to invest.”

The CEO of Renewable UK also said:

“Any new tax should have focused on large, unexpected windfalls right across the energy sector, instead profits at fossil fuel plants are inexplicably exempted from the levy.”

Scotland has a significant renewables sector. It has been a great success story. Anything that makes that sector less profitable and more uncertain is something that we are deeply worried about.

The ordinary rate of income tax is now frozen until April 2028. Significant stealth taxes are coming in, as the Treasury stands to raise considerable revenue due to inflation. The Institute for Fiscal Studies has estimated that this could raise £30 billion by 2026 due to high inflation rates. It is unacceptable for this money to be raised by taxing those already struggling with spiralling living costs. Of the many options available to the Chancellor, it would have been better to tip the balance more in favour of those who can afford to contribute more, by which I mean greater taxes on wealth and income made from wealth, and also taxes on the non-doms, which could bring in £3.2 billion to the Treasury’s coffers. It is unacceptable that the Treasury would turn down the chance to bring in £3.2 billion and instead choose to freeze the thresholds, so that people on lower and middle incomes will receive less in their pay packet each month.

AJ Bell has found that if allowances are frozen rather than linked to inflation, an average earner on a salary of £33,000 in 2021-22, before the income tax threshold freeze began, will end up paying £2,600 more in income tax if the policy is extended to 2027-28. Someone on £50,000 will pay an additional £6,570 in tax because the allowances are frozen rather than being linked to inflation. I ask Ministers to consider the fairness of those measures.

Moving on to the research and development expenditure tax credit rate, the scheme has provided tax reliefs to companies subject to corporation tax that carry out eligible R&D activities. I appreciate what has been said about the efficacy of R&D tax credits and whether they are useful. I hope that topic will receive more consideration in the months and years ahead, because the UK tax code is full of different types of credits, tax breaks and incentives—or disincentives—and we need to properly understand how effective they are.

Small and medium-sized enterprises provide around three fifths of the UK’s private sector jobs and have historically been drivers of innovation and growth. They are a significant part of solving the UK’s productivity puzzle. SMEs are less likely than larger companies to have access to formal credits to fund R&D, and in the wake of the pandemic and with recession forecast across the next year, it is more important than ever that SMEs are supported in driving growth and investing in research and development.

It is quite perplexing the Chancellor has prioritised R&D in larger firms, which are more likely to invest their profits elsewhere or perhaps invest them in share buybacks further down the road. The Chancellor has said that the aim is to reduce fraud, but reducing the R&D expenditure credit for all SMEs in an attempt to prevent its being abused seems a bit like throwing the baby out with the bathwater. It is quite poor targeting to affect all SMEs rather than just those that might be abusing the system.

The Federation of Small Businesses has said that the cut to R&D tax credits, which the Government presented as a way of tackling fraud, would “crush innovation and growth”, creating a “doom loop” that

“makes a mockery of plans for growth.”

The Minister should listen carefully to the FSB when it raises such concerns.

The current situation is quite worrying and will have significant impacts on the Scottish budget. The Fraser of Allander Institute has said:

“The lack of any real ability on the part of the Scottish government to be able to flex its budget within year in response to unanticipated shocks remains a real limitation of the existing fiscal settlement…a strong case can be made for enhancing the Scottish government’s ability to borrow and/or draw down resources from its Reserve.”

It concludes that

“this level of inflexibility does not seem tenable.”

The Scottish Government face a £1.7 billion shortfall this year as a result of inflationary pressures, and that is just this year’s budget. John Swinney has gone back and tried to strip out anything he can from the Scottish budget to try and deal with the problem, but that shortfall remains. The Chancellor’s answer to that was £1.5 billion in Barnett consequentials over the next two years—nothing for this in-year shortfall and half of what we need across two years. That is not going to fix the pressures that the Scottish Government face. It is not going to fix the significant issues with pay deals that trade unions are legitimately asking for in Scotland to support their members. If the UK Government does not come up with that money, it will cause extreme difficulties for the Scottish Government’s ability to meet their expectations of what they want to do.

What we are seeing from the UK Government is something of a doom loop. The OECD says that the UK will contract more than any other G7 country and that, of the G20, only Russia will fare worse than the UK. We see stagnant growth and no plans to get the economy back on track. The Chancellor and the Government want to bring forward plans to try to cut their way out of recession. That will not work. As the hon. Member for Amber Valley pointed out, consumers see that, and it affects both consumer and business confidence. Unless we hear a lot more about investment rather than cuts, this Government are going to sink the economy and take Scotland down with them.

November 30, 2022
Nigel Mills – 2022 Speech on the Finance Bill

The speech made by Nigel Mills, the Conservative MP for Amber Valley, in the House of Commons on 28 November 2022.

It is a pleasure to speak so early in the debate. It is also a great pleasure to have a Finance Bill that is so short. I must have spoken on a dozen of them in my time in Parliament and to have one that has only 12 clauses is some sort of miracle. During this week, we have probably about as much time as we normally have for one of several hundred pages, so we can really scrutinise the 11 substantive clauses. Perhaps that is progress, compared with what we normally expect.

I start by comparing this Finance Bill with ones we had at the start of the previous recession a decade and a half ago and ones we had at the start of previous measures to tackle a large budget deficit. If I recall rightly, the single biggest measure we had 14 years ago was a VAT reduction at the start of the recession, which cost something like £15 billion. I am not sure it had the effect we wanted. Interestingly, as we sadly slip into a recession, which we hope is shorter and shallower than that one, what we have not seen in this Finance Bill is any attempt to boost consumer confidence. We can argue that we tried that in September and it did not go so well, and probably the right thing here is to focus on how we reassure the markets that we can keep borrowing under control and therefore not risk a rise in interest rates.

However, if this recession looks like it might be any longer or deeper than the Government’s forecasts, I urge them to think carefully about how we get consumer confidence to turn around. I fear that what we will see in the new year is a big retrenchment in people’s personal spending. We will spend the money for Christmas because we have to, but people will then take a very cautious approach in the early part of next year, knowing that energy bills will go up in April and that tax changes are around the corner. We would not want them to go too far and retrench too fast. So I hope the Government will think about the role that tax can play in turning the economy around if we need that next year.

The other interesting comparison is with the approach George Osborne took in his Budgets in the first half of the last decade to introduce austerity to tackle the big public deficit we had. Let us look at what he prioritised. He had a VAT increase, which we are rightly not doing in this situation, but he increased the personal allowance and reduced corporation tax to try to put more money into people’s pockets from work and to encourage business investment in the UK. Interestingly, the Government are doing the complete opposite now. I am not sure whether we have worked out that that plan did not work, but there is evidence to suggest that the lower corporation tax rates we had for a decade did not achieve the additional investment that we wanted them to and we are probably better off sticking at about 25% than going lower.

I am slightly intrigued. The great claim we made was that we were taking people out of the scope of income tax. We are now at great risk of putting them all back into the scope of it again. I accept the Minister’s point that the personal allowance by the end of this five-year period will still be £2,000 higher than it would have been by inflation, but I think that is not enough of an increase. I hope that the Government regard these personal allowance freezes for another five years to be a kind of last resort and if we get any improvement in the economic outlook they can be reversed. Especially at the lower end of the level, keeping people out of tax, letting them keep more of the income and making sure that work pays are strong arguments. Frankly, I am not absolutely sure why we need to legislate for personal allowances in five years’ time. We will have another five Finance Bills before we get to those and we could have brought those into law at any point. I accept that we want to give the market a clear steer that we are serious about closing the budget deficit. If we need those measures, fine, they are probably less bad than a rate increase, but what is the point of legislating for them in this situation?

There is another contrast with what we have done on national insurance this year. We chose to—and I accepted the argument that we needed to—increase the headline rate of NI, but the compensation for that, when it became clear that that was a real problem at the start of the economic downturn, was to increase the personal allowance for NI—the starting point at which someone pays that tax. Yet now, rather than increasing the headline rate, we are effectively holding back the starting points of those taxes. So we have a tax on income and a tax on wages where we are taking one approach, and on the other tax we are doing something completely different.

As we go forward from what I accept are emergency measures that we need to use to fill a hole, the Government need to have a clear strategy for what our tax system should look like. They should consider the things we are trying to tax and the things we are trying to incentivise. They should try to give people some long-term stability so that they can plan and understand and we can get the behavioural changes and incentives that we want, rather than having a clear direction one way, and then doing a U-turn and wondering why people do not do the things that we would really like them to do. Now we are through the real firefighting, I hope the Government can produce a strategy and plan for where they think the tax system should go, so that people can understand it and respond accordingly. I think that that is what we had under the Gauke doctrine in 2010. We need to revisit that, now we seem to have changed our mind on so many of those things.

The bleakest bit of news in this Finance Bill was extending the windfall tax to 2028. I was hoping that the energy crisis might be over quite a bit before then and we would not need to have those measures in place. The fact we have done that suggests we are not expecting energy prices to come back down any time soon. Clearly, the windfall tax is the right thing to do. I have always taken the view that this is a level of profit that nobody could ever have thought they could get. These companies are earning it from extracting our natural resources; they are not their natural resources. We have given them permission to extract them, and they have rightly made some profit from doing so. However, we should limit that profit and accept that those are our resources and that we should take the right return from them, rather than the exploiter doing so, so I hugely welcome the introduction of the windfall tax.

I am quite intrigued by the research and development stuff. It is right, even at the most difficult time, to say that we want to make sure that we are incentivising R&D. That is a sensible, long-term measure that shows some long-term planning. I remember being at work as a young accountant when R&D tax credits were introduced—in 2000 for small companies and in 2002 for large companies. The journey they have been on, with rates going up and down and approaches changing—above the line, below the line, cash incentives and all those things—makes me wonder whether, 22 years on, we are really sure that R&D tax credits are delivering the outcome that we want. I suspect that the speeches in the Finance Bill debates in 2000 were that these measures would make us a science superpower in the next generation. I think that we are still giving those speeches, and we have not quite got the superpower bit. I wonder whether the Government should stop at some point and ask whether those are working. I know that there is an ongoing review on combining the reliefs, but are they triggering the right thing?

One piece of data that did worry me was that a disproportionate amount of those are claimed by companies in London and the south-east and they are not spread around the country in the way we would like. Is there a way we can use these tax measures to encourage that kind of investment and those kinds of skilled jobs in the regions of the UK, and not just focus them in the most prosperous parts?

I have expressed the view previously to many Treasury Ministers that, outside the EU, the one thing that we can do is take a regional approach to certain taxation to encourage activity in different parts of the country that we do not need to encourage in London and the south-east. I urge the Treasury to look seriously at whether we could take a regional approach to some taxes so that we can get those differentiating incentives to move wealth outside London and the south-east. That would fit entirely with our levelling-up agenda, but we have not chosen yet to be that creative with our tax system.

Given that we have plenty of time for detailed questions on clauses on Wednesday, I will just say that I accept the need for this Finance Bill. I will support all the measures in it and I will happily vote for it later. I will not be voting for the Opposition amendment, which I suspect will not come as a great shock. I think I support ending non-dom status, but we should have temporary residence relief. If somebody comes here on a secondment or for a short period, we should not try to force them to move all their tax affairs here. We should tax them on the income that they earn here. There would be a big disincentive and it would be out of step with other countries if we did not have a short period where somebody had that different situation to reflect the fact that they are not ordinarily resident here.

The fact is that a person’s non-dom status depends on where their father was born. In theory, they can become a non-dom even if they have lived here all their life and never been resident anywhere else in the world. That shows how ludicrous those rules are. I urge the Government to look at modernising all our residence tests, including that on non-dom status. They are all far too complicated. We could have a far more effective system that works better and would achieve the advantages of attracting investment here. There is a real problem with just scrapping non-dom status; it may drive some people we do want here to leave. On balance, a change is better and we should continue with the direction of travel that we had a decade ago of restricting the time period. I think that we could restrict it with a more modern relief that would achieve what we want without having the big downsides.

With that, I will happily support the Bill and oppose the amendment if there is a Division later.

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

The speech made by James Murray, the Labour MP for Ealing North, in the House of Commons on 28 November 2022.

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House declines to give a second reading to the Finance Bill because, notwithstanding the importance of increasing the energy (oil and gas) profits levy, it raises taxes on working people through its freeze of the personal allowance threshold; because it fails to take advantage of other sources of revenue, such as ending non-domiciled tax status and further reducing the tax allowances available to oil and gas companies; and because it derives from an Autumn Statement which fails to set out plans to arrest the 7 per cent fall in average living standards forecast over the next two years, and to grow the UK economy, including through replacing business rates, supporting start-ups, giving businesses the flexibility they need to upskill their workforce, investing in clean and renewable energy, insulating homes across the country, and creating jobs in the green industries of the future.”

After 12 years of economic failure from the Conservatives and 12 weeks of economic chaos, we now have this Finance Bill from a party that is holding Britain back. It is a Bill from a party that has, of course, lost any claim that it might once have tried to lay to economic competence; but more than that, it is a Bill that shows a party making the wrong choices time and again, and a party with no plan to grow our economy and halt the decline in living standards.

As people across the country know, the Conservatives’ economic failure is hitting households hard. We are living through the longest period of earnings stagnation for 150 years, with real wages lower this year than when the Tories came to power in 2010. Living standards are forecast to fall by 7% over the next two years—the biggest fall on record, taking incomes down to 2013 levels. No wonder the director of the Institute for Fiscal Studies described the forecast drop in disposable income as “simply staggering”. This will truly feel like a lost decade for people across the United Kingdom: a decade of low growth, with incomes now set to fall back to where they were a decade ago.

I know that Conservative Members are desperate to make out that global factors are entirely to blame for the economic reality of today, but although no one denies the deep impact of covid and of Putin’s invasion of Ukraine, it is simply not credible—and it is frankly insulting—to pretend that the occupants of Downing Street, now and over the past 12 years, have had nothing to do with the mess that we face. It was decisions taken by the Conservatives in office that left us uniquely exposed to the inflationary shock of oil and gas prices rising—they took misguided and damaging decisions to shut down our gas storage, to stall on nuclear power and to ban renewable technologies such as onshore wind—and it was decisions taken by the Conservatives in office that have denied the UK the opportunity to grow our economy over the past 12 years as we could and should have done.

Richard Fuller

Will the hon. Gentleman please check his facts? If he looks at the period from 2010 to just before the covid pandemic and compares the UK’s average rate of growth with that of our OECD competitors, particularly the G7, he will find that the UK outstrips all of them bar the United States and Germany.

James Murray

I seem to be engaging more with the hon. Gentleman now that he is on the Back Benches than when he was briefly on the Front Bench. If he looks at the statistics, he will see that, over the last 12 years, the UK’s growth rate has been a third lower than the OECD average, and a third lower than it was during the previous Labour years. I will take no lessons from him or his colleagues on the need for economic growth.

I take this opportunity to give the previous Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), some rare credit. At least he took responsibility for the mess he inherited from his colleagues when he confirmed that our economy is stuck in a “vicious cycle of stagnation.” On that point, he was absolutely right.

Over the Conservatives’ 12 years in power, as I said to the hon. Member for North East Bedfordshire (Richard Fuller), the UK economy grew a third less than the OECD average and a third less than during the previous Labour years. What is more, we are now the only G7 economy that is still smaller than before the pandemic. Over the next two years, we are forecast to have the highest inflation in the G7 and the worst economic growth of any country in the G20 except Russia.

What is more, we are the only country in the G7 whose governing party chose to inflict profound damage on its own economy. Although the Prime Minister and the Chancellor refuse to take responsibility, the British people can see through them and will hold them to account. What the British people want and need is a Government who will get on and do the right thing without having to be pushed, dragged and forced into doing so. That is one reason why people across the country have been so exasperated by the Government’s reluctance at every turn to implement a windfall tax on oil and gas producers’ huge profits this year.

My right hon. Friend the Member for Leeds West (Rachel Reeves) first called on the Government to bring in a windfall tax in January. It took five months of pushing the Government along a painful journey to get them to act. In those months, Conservative Ministers tried to defend their position, saying that oil and gas producers were struggling. They said a windfall tax would be “un-Conservative”, and the current Prime Minister said it would be “silly” to use this money to offer people help with their energy bills. Conservative MPs voted against a windfall tax three times, and then, when they finally realised their position was untenable, they did a U-turn.

Even then, having been dragged kicking and screaming into introducing a windfall tax, the current Prime Minister coupled it with a massive tax break for the oil and gas giants. This tax break will be given to the oil and gas giants for doing the things they were going to do anyway, which helps to explain why some of them have paid zero windfall tax in the UK this year, despite record global profits.

Despite having another go at windfall tax legislation with this Bill, the massive tax break is still there. It is set at a level that will, to quote the explanatory notes,

“maintain the overall cumulative value of relief”.

This tax break leaves billions of pounds on the table. These profits—the windfalls of war—could go towards helping people facing the difficult months ahead. This tax break is set to cost the taxpayer £80 billion over five years. This tax break was brought in by decisions that this Prime Minister took when he was Chancellor, and it is staying thanks to the decisions of the Chancellor he appointed from No. 10. What clearer evidence could there be that, no matter which Conservative goes through the revolving door of Downing Street, it is all more of the same?

All we get from the Conservatives is the same vicious cycle of stagnation. This doom loop has been dragging wages down, forcing taxes up and hitting public services, all of which come round again and keep economic growth low.

Jonathan Edwards

I agree with many of the hon. Gentleman’s points. Much of the narrative around the autumn statement and the Budget is about restoring market credibility after the implosion of the previous Administration. In reality, the one thing we could do to restore market credibility is to have a more sensible trading relationship with the European Union. There is no hope from the Government, but will the Labour party offer us that hope?

James Murray

Later in my speech I will talk about our plan for growth, which will involve fixing the holes in the Brexit deal with which the Conservatives left the European Union. Alongside other measures, it is important to make sure that the deal has a proper plan for growth that is sorely lacking from this Government.

This Finance Bill is a bill in more ways than one, because as well as being legislation, it represents a bill landing on working people’s doormats. It is a bill that working people are being forced to pay for the Government’s failure. Working people are paying for the Tories’ decisions that, for the last 12 years, have held back the economy, and for the last 12 weeks have crashed it.

This Bill freezes the income tax personal allowance, which will leave an average earner paying over £500 more income tax a year by 2027-28. In the autumn statement, the Government announced a council tax bombshell that will force a £100 tax rise on families in the average band D house from next April. As a result of all the tax measures announced in this Parliament, middle-income households will see their tax bill rise by £1,400. That is what it looks like when working people are made to pay the price.

It is all the more galling for people to be asked to pay more when the Conservatives are so slapdash with public money. Today, new figures show that the current Prime Minister wasted a staggering £6.7 billion on covid payments to businesses and individuals that were fraudulent or mistakes. Despite wasting public money so carelessly, he is now happy to put up taxes on working people across the country.

It could have been different had the Government made fairer choices. The Government could have chosen to close the unfair private equity loophole that gives hedge fund managers a tax break on their bonuses. They could have chosen to reverse their tax cut for banks. Perhaps they have forgotten what their position is, having voted for the cut at the start of the year, before U-turning on it a few months ago and then, more recently, U-turning again.

The Government could have finally chosen to scrap non-dom tax status, an outdated and unfair tax break that costs the taxpayer £3.2 billion a year. A tax break for non-doms should have no place in the UK in 2022. As if evidence were needed that this tax break belongs in a different era, the law makes it clear that people can inherit non-dom status only from their father, unless their parents were unmarried. More fundamentally, this loophole ignores the principle of fairness that should be at the heart of our tax system. If a person makes Britain their home, they should pay their taxes here.

There are theories going around about why the Government are so reluctant to modernise the tax system and abolish the non-dom tax break. Perhaps the Minister will be able to confirm at the end of the debate, or in writing afterwards, whether the Prime Minister has been consulted on the option of abolishing non-dom tax status. Perhaps he can confirm whether the option was ever considered. When the current Prime Minister was Chancellor, did he recuse himself from discussions on this matter? I see the Exchequer Secretary to the Treasury acknowledging my request, so I look forward to his response either later today or in due course.

We know that the Conservatives’ choices on tax are deeply unfair, but we also know that the lack of economic growth is the deep root of the rising tax burden in the UK. Over the last 12 years, the UK economy has grown a third less than the OECD average and a third less than during the previous Labour years. We are now the only G7 economy that is still smaller than it was before the pandemic, and over the next two years we are forecast to have the lowest growth of any country in the G20 bar Russia.

A plan for growth has been missing for a decade, and its absence is having a greater impact than ever. In its report this month, the OBR confirmed that measures announced at the autumn statement will make no difference to growth in the medium term. The CBI’s director general, Tony Danker, put it starkly following the autumn statement:

“There was really nothing there that tells us that the economy is going to avoid another decade of low productivity and low growth”.

We cannot afford another decade like the last. We cannot afford another decade of being held back, another decade of lost growth. That is why Labour’s plan is so crucial to raising wages and living standards, supporting and sustaining public services and driving business investment and job creation in the decade ahead.

Karin Smyth (Bristol South) (Lab)

My hon. Friend is making an excellent speech, in stark contrast to what we have heard from the Conservative party. It is about people, working people and building back better. Does he agree that, for the people, particularly young people, who lost out so much during covid and are now facing another decade of low growth, we are particularly disappointed about the lack of support for further education and colleges to support the skills agenda for both 16 to 18-year-olds and adults who desperately need retraining and skills? That is starkly absent from what we have heard from this Government.

James Murray

I thank my hon. Friend for her contribution. She is a great advocate for investment in skills training and making sure that young people have opportunities in the decade ahead, which they have been denied in the last decade under this Conservative Government. The points she makes fit well within a wider plan for growth, which is at the heart of what Labour Members are proposing and pushing the Government to adopt.

That plan is wide ranging. It covers business rates being replaced with a fairer system that makes sure that high street businesses no longer have one hand tied behind their back. It relies on us implementing a modern industrial strategy to support an active partnership of government working hand in hand with businesses to succeed. Labour’s start-up reforms will help to make Britain the best place to start and grow a new business. Small businesses will benefit from our action on late payments and we will give businesses the flexibility they need to upskill their workforce. As I mentioned, we will fix holes in the Brexit deal so our businesses can export more abroad. Crucially, our green prosperity plan will create jobs across the country, from the plumbers and builders needed to insulate homes, to engineers and operators for nuclear and wind. We will invest in the industries of the future and the skills people need to be part of them. That is what a plan for growth should look like. As John Allan, the chair of Tesco, said recently, when it comes to growth, Labour are the

“only…team on the field.”

The truth is that the need for an effective plan for growth has exposed the emptiness and exhaustion of the Conservative party. All we have to show from 12 years of Cameron, May and Johnson is chronic economic stagnation.

Madam Deputy Speaker (Dame Rosie Winterton)

Order. The hon. Gentleman knows that he should not refer to existing colleagues by name.

James Murray

I apologise, Madam Deputy Speaker. All we have to show from those three former Conservative Prime Ministers in the last 12 years is chronic economic stagnation. This autumn, the Conservatives tried desperately to make their economic strategy work, but their decisions crashed the economy, imposed a Tory mortgage premium, put pensions in peril and trashed our reputation around the world. Now they are trying again. We face tax hikes on working people, the biggest drop in living standards on record and growth still languishing at the bottom of the league. It seems that Conservative MPs are beginning to realise they have come to the end of the road and their time is up. In a timely echo of the popular TV show, hon. Members from Bishop Auckland to South West Devon are declaring: “I’m a Tory, get me out of here.” It seems the Conservative party is finally beginning to realise what the rest of us already know: the Tories are out of time and out of ideas, and Britain would be better off if they were out of office.

Our amendment makes it clear that, although Ministers have been dragged, kicking and screaming, into action on oil and gas giants’ windfall tax, this Finance Bill fundamentally fails the UK economy and comes from a Government holding the British people back. Be in no doubt: the mess we are in is the result of 12 years of Conservative economic failure. With this Bill, they are loading the cost of their failure on to working people. The Government still have no plan to grow the economy and to stop the fall in living standards that is filling people across the country with dread. We need a Government with a plan to get our economy out of this doom loop, to support businesses to grow and to raise living standards again. We simply cannot afford another decade of the Conservatives. Now is time for change, now is the time for them to get out of the way, now is the time to let Britain succeed.

November 30, 2022
PRESS RELEASE : 97% of English bathing waters meet required water quality standards [November 2022]

The press release issued by the Department for Environment, Food and Rural Affairs on 30 November 2022.

97.1% of bathing waters in England have passed water quality standards following testing at over 400 designated sites carried out by the Environment Agency (EA).

The results, released today (30 November), show that for the 2022 bathing season, 72.1% of beaches and inland waters met the ‘Excellent’ standard, the highest since new stringent standards were introduced in 2015. 92.8% of beaches and inland waters gained an ‘Excellent’ or ‘Good’ rating, while 4% achieved the minimum ‘Sufficient’ rating. This compares with 99% passing the required standards in 2021.

Bathing waters are monitored for sources of pollution known to be a risk to bathers’ health, with up to 20 samples taken from each site during the bathing season. Each sample is tested for bacteria, specifically E coli and intestinal enterococci.

The EA has been monitoring bathing water sites since the 1990s, and in this time there have been significant improvements. In the early 1990s, for example, just 28% of bathing waters met the highest standards in force at that time. Based on today’s data, over 97% of bathing waters meet the minimum standard, with 72% reaching the highest standards. While progress has been made, there is still much more to be done to ensure cleaner and healthier waters for people to enjoy. The Environment Agency is clear that more needs to be done on the part of water companies, and is taking robust action to support businesses, farmers and councils to help clean up our waters.

Since 2015 the EA has required water companies to install Event Duration Monitors at bathing water sites. This captures data on the frequency and duration of storm overflow discharges, with all the data published online so the public can see what is happening in their local area. More than 12,000 of England’s 15,000 storm overflows now have these monitors, and the remaining 3,000 will have them by end of next year.

As part of the Government’s Storm Overflows Discharge Reduction Plan, water companies must improve all storm overflows discharging into or near every designated bathing water by 2035; and improve 75% of overflows discharging to high priority nature sites by 2035. The Government has also committed to consult on policy options in 2023 to review the Bathing Water Regulations and revise guidance to make applying for new bathing water designations easier.

Knowing more about water quality helps people make informed decisions on when and where to swim. The EA’s Swimfo website provides detailed information on each of the 400+ bathing waters in England, and notifies bathers when Pollution Risk Forecasts have been issued.

Environment Agency Chair Alan Lovell said:

“Public confidence in our bathing waters is key to the tourism industry as well as people’s health and wellbeing.

“Overall bathing water quality has improved massively over the last decade due to targeted and robust regulation from the Environment Agency and the work carried out by others. In most places it is now better than it has been for many years, but there is much more to be done to ensure cleaner and healthier waters for people to enjoy.

“We know that improvements can take time and investment from the water industry, farmers and local communities, but where the investment is made, standards can improve.”

Water Minister Rebecca Pow said:

“I welcome the good news that more bathing waters than ever have met the highest standard of excellent at just over 72% of all our bathing waters – an increase from last year – but there is more to be done to improve our bathing waters and we must not rest on our laurels.

“That is why we are going further and faster than any other government to protect and enhance these precious sites.

“We have brought in strict targets to protect our bathing waters and new rules to crack down on water pollution will require water companies to deliver a £56 billion infrastructure improvement programme – the largest in their history.”

This is the first year that the Wolvercote Mill Stream at Port Meadow, Oxford, and the East Cowes Esplanade in the Isle of Wight have been given official classification after being added to the list of bathing waters in 2022.

Designation does not guarantee clean water for swimming. Bringing rivers up to bathing water standards will be a challenge and places greater responsibility on farmers, water companies and communities to remove pollution that is harmful to swimmers.

November 30, 2022