John McDonnell
MP for Hayes and Harlington · Labour · United Kingdom
“It is not a laughing matter—I am sorry for interrupting the flow of the discussion. It would be useful if the review looked at NATS’s long-term investment plans, particularly since its partial privatisation in 2001, which I opposed. I thank the Minister for meeting Unite this morning and thanking the workers, who have worked so hard.”
“On a number of occasions, I have raised the case of Lee Cheuk-yan, who many Labour Members will remember was the general secretary of the Hong Kong Confederation of Trade Unions and founder of the Labour party in Hong Kong. He was detained during the democracy movement five years ago.”
“I thank the Minister for his statement. NATS used to be in my constituency and then moved down to Swanwick. Of course, with Heathrow in my constituency, I receive—as I mentioned yesterday—a large amount of correspondence from a whole range of other MPs’ constituents, who think I am responsible for Heathrow airport.”
“I fully agree, and let me also say that wheelchair compensation is significant in this legislation. Most of us have dealt with cases like that. Going back to accountability in the process, a number of different organisations have provided us with notes on the legislation.”
“I apologise to my right hon. Friend; I should have checked this before the debate. The proposed new section 61G refers to priorities and objectives of the Secretary of State, which include a requirement for the Secretary of State to issue a document setting out those priorities and objectives for the CAA.”
“At the moment, when people in my constituency are faced with these problems, they do not know where to go; it is as simple as that. Finally, the debate that we will have on Heathrow expansion and the new policy statement will be interesting, given that we do not know what the flight paths will be. If I was a constituent of my hon.”
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“Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) moved eloquently, as it is welcome. If passed, it would at least have the effect of creating a robust framework for the House to assess the success or failure of freeports policy, but surely no Members of this House who consider themselves to be serious, rational policy makers can vote for something like this proposal, which is so lacking in any evidential base.”
“The Government are asking us all to take a leap in the dark, and having twice before witnessed that leap in the dark, I think the result will be the same—it will be failure. I know that a number of Members, including some Ministers, have said it will be different because of Brexit and claim that being outside the EU gives greater freedoms than were available to enterprise zones, but if that is the case, why can they not quantify them and put that evidence in front of the House, in some form of rational policy making? The UK Trade Policy Observatory, based at the University of Sussex, has pointed out that as UK import tariffs are already low, any further tariff reduction would “have next to no benefits”. I am pleased that Labour’s Front-Bench team is behind new clause 25, which my hon.”
“The Centre for Cities think-tank found that the jobs that were created were “overwhelmingly low skilled” and therefore low paid. Enterprise zones were not just a disaster; they raised people’s hopes and shattered them in many areas around the country, and in many ways led to some of the disillusionment with politics and Government overall. Tax breaks for corporations in underinvested areas just does not make an industrial strategy. My view is that the Government should be investing, but in a planned upgrading of the infrastructure of this country, not making areas fight for scraps in this form of pork barrel politics. The Conservatives’ strategy of tax breaks for developers and big business as a way of stimulating growth failed in the 1980s and again in the 2010s, and it risks failing again in the 2020s.”
“If there are answers to those questions, where have they come from? Have they been independently assessed? We are asking questions about the future, but we should look back, because this is not a new policy. Those of us who have been in the House a while—and that does not take long—can recognise this as a rebranding of the enterprise zones policy that the Conservative party wheeled out in the 1980s under Michael Heseltine and also in the last decade, when George Osborne fronted it up. Let me remind the House what the Public Accounts Committee said in May 2014. Its report was pretty damning about George Osborne’s enterprise zones, describing them as “particularly underwhelming”. The Committee criticised the Government for over-optimistic claims about job creation. The job numbers did not materialise—it is as simple as that.”
“He continued: “they will therefore be scored at a future fiscal event.” Therefore, what we are being asked to do tonight is sign off a blank cheque that will be filled in at a later date. This is just irrational. Shoddy policy making on this scale is becoming all too familiar with this Government, but this is a bit of a shocker. It is just not good enough, so it would be really useful if tonight the Minister took us through the answers to a few simple questions. What are the annual costs of the proposed tax reliefs when the freeports are set up? What is the estimate of increased economic growth that will come from them? What is the estimate of increased job creation stimulated by the freeports? What is the estimate of increased tax revenues to the Exchequer as a result of this policy? And, to reinforce that, where is the evidence?”
“In its analysis of the Chancellor’s Budget, the Office for Budget Responsibility said of freeports: “Further details have been announced in the Budget but came too late to be incorporated into our forecast.” The OBR have therefore not made a comment—we await it. Freeports were not assessed by the OBR. However, it is not just the OBR that does not know the answer about the effects of freeports; neither do the Government. My hon. Friend the Member for Oxford East (Anneliese Dodds) asked the Treasury on 16 March what estimates it had made of the total annual cost of tax reliefs granted to the freeports. The Chief Secretary to the Treasury replied on 22 March to say—rarely have I seen this from a ministerial response—that “it is not appropriate to comment on estimates at this stage.” This is in the middle of policy making!”
“I am glad you are sitting down, Madam Deputy Speaker, because I do not want to shock you. I want to see if we can try something different tonight. Let us try and undertake some rational policy making. Let us try and base policy on evidence, shall we? I have tabled a number of amendments—Nos. 24, 25 and 26—as a humble seeker after truth, basically, because I do not think the Government have made the case for freeports. I also think that the risks of this policy are huge. It could accelerate tax avoidance in this country on a massive scale and cause economic damage to the neighbouring areas of freeports. We are shovelling huge tax giveaways to corporations and developers for, as far as I can see, literally no return to society.”
“The manifesto continued: “This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.” I just hope that Conservative Members will have the good grace at least to acknowledge that clause 5 of the Bill breaches that pledge, and that incomes are not protected. More of people’s incomes will be hit by income tax, and that is especially harsh on the millions of public sector workers who now face from this Government a pay freeze, a 5% rise in council tax and now this stealth tax rise on their income tax.”
“We know that 2 million workers rely on universal credit to top up their low pay, yet in a few months, the Government are going to cut universal credit by £20 a week. Poverty has been rising in this country, and whether it is the £20 cut to universal credit, the stealth tax in the Bill, or this year’s paltry increase in the minimum wage, the Government’s actions will increase poverty still further, and increase suffering as a result. My amendment would ensure that the tax thresholds for the personal allowance and the higher rate were kept in line with inflation, as per the Income Tax Act 2007. I tabled it because I wanted to draw attention not to Labour party policy but to Conservative party policy, because in the last general election the Conservative manifesto pledged: “We promise not to raise the rates of income tax”.”
“That would have been a much fairer way of raising revenue than increasing taxes for people on low and average wages, which the Government’s proposals on tax thresholds will do. Child poverty has been mentioned, and in my constituency 42% of children are growing up in poverty—a figure that has sadly increased each year since 2015. Child poverty is often a consequence of low pay. The majority of children living in poverty in my constituency live in working households. We should be doing everything we can not just to protect but to boost the incomes of the low paid, not drag them into taxation or increase the taxes on them. The Bill will cut the income of someone working full time on the minimum wage.”
“Those include many of my constituents who have had to make ends meet on 80% of their wages for much of last year. Yesterday—this has already been referred to—it was galling to see the other side of the coin. The Sunday Times rich list showed that during the pandemic more billionaires have been created in the UK than at any time in the past 33 years. The levelling-up policy that appeared last year was the levelling up of millionaires into billionaires. The Chancellor should have used the occasion of the Budget and this Bill to level up capital gains tax to income tax rates, for example. It cannot be right that we tax work more than we tax income from wealth. Ahead of the Budget it was rumoured that the Chancellor was considering equalising capital gains tax and income tax.”
“Friend the Member for Hackney South and Shoreditch about the desperate need for housing and to prevent housing from being used continuously as an investment asset for profit, rather than to put roofs over the heads of our families. I wholeheartedly support and welcome all those appeals, but even if with my Catholic upbringing I believe in the powers of conversion, I somehow doubt we have been able to convert the Minister to a sufficient level for him to accept the amendments. I hope to be surprised, but I doubt it. I tabled amendment 23 not in the hope of converting the Conservative Government, but to enable me to express justifiable anger about the Government’s approach. The Government are attempting to legislate for a real-terms pay cut that will affect millions of low-paid workers through the freeze in the tax threshold.”
“We are at a stage in the Bill’s progress that is almost like a wash-up. We are trying to make last-minute appeals to the Government for action on a number of key issues, and all the appeals to the Government so far by the right hon. Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Richmond Park (Sarah Olney) and others are on worthy causes that should be addressed, as are the amendments from the Labour Front Benchers. We must remember the context of the Government’s surcharge policy. It was to spike the approach that the Labour party was making about a levy on overseas ownership, on exactly the grounds laid out by my hon.”
“This is a Queen’s Speech that does not just fail to meet the challenges of our times, but drags us back to mundane politicking, providing no sense of hope or direction at a time when our people are in desperate need, having suffered 12 months of tragic loss of life and 11 years of austerity pay cuts and the undermining of their public services. This Queen’s Speech is a grotesque disappointment and has failed the community yet again.”
“There is nothing to give hope of a secure home to many people, nothing to address low pay and poverty on a scale that we have not seen for a generation, including the rising numbers of the homeless back on our streets and the renewed threat of eviction that is affecting so many of our constituents who rent their properties. The existential threat of climate change is met with nothing more than press releases and, obscenely, international aid is cut and the Government fail to back Biden’s patent-waiving campaign to save lives as the covid pandemic ravages the global south.”
“There is a greater belief that the distribution of rewards in our society should be based on the social value of the contribution that a person makes to our community and not solely on its market value. The mismatch in the Queen’s Speech between these values of our age and what the Government propose is starkly exemplified. There is nothing in the Queen’s Speech that will realistically ensure that the NHS receives the funding to cope with backlog of treatments or, especially, to deal with the impact of long covid. It maintains the pay cuts to NHS staff and public sector workers, forcing many into absolute penury. Social care reform is delayed yet again. We await the outcome of further discussions in the autumn but doubt whether anything productive will come from the Government.”
“The old neoliberal dominance of trickle-down economics, the market always knowing best and “private good, public bad” is under serious challenge. Even this Government have been forced through political expediency to synthetically get with the programme. That is why this Queen’s Speech is so full of rhetoric but so easily exposed as lacking in substance. The pandemic has created a renewed sense of social solidarity. There is a greater feeling that we all stand or fall together and that everyone should have a right to a decent job, education, a home, health and social care, and an income to secure good quality of life. This should not depend on where people live or what their background is.”
“After 11 years of harsh austerity and a year in which the covid pandemic has resulted in such a scale of human suffering, the Queen’s Speech should have been a paradigm-shifting intervention in which were established a new set of ideals upon which the future of our society was at least envisioned. Instead, it was crowded with little more than base, grubby political manoeuvres aimed at corrupting the electoral system and suppressing opposition. It failed completely to capture the spirit of the age. The pandemic pressure-tested our society and exposed the appalling impact of a decade of gross underfunding of our NHS and social care sector. Covid has laid bare the millions who are in poverty and a social security system that has provided no security. Austerity fatigue and the pandemic are prompting a paradigm shift.”
“To attack some of the most vulnerable people, living in fear in our community, is a new low for this Parliament. I thought that we had all moved on. I thought we had moved forward. I hope that sufficient Members of this House still have the humanitarian instincts to reject this appalling measure.”
“The irony is that most will eventually be released and allowed to settle, becoming valuable members of our community. The moral of this story is that we detain too many people unnecessarily and in unacceptable conditions. I believe that, in years to come, people will look back on this system with incredulity but also disgust. I believe that this legislation, in addition to increasing the number of victims of trafficking in detention, will deter victims from coming forward. It will be used by traffickers to discourage victims from escaping. If the SI is passed, traffickers will say to victims, with some accuracy, “If you try to escape, you’ll be locked up anyway in a detention centre or prison.” I believe that, if this House allows the statutory instrument to go on to the statute book, it will be seen as a disgraceful act of inhumanity.”
“I have two detention centres in my constituency: Harmondsworth and Colnbrook. I have been visiting Harmondsworth for more than 30 years. Years ago, it was a couple of Nissen huts, with no more than about a dozen people detained there. Now we have what are, effectively, two prison-style buildings housing anything between 800 and 1,000 detainees. These detention centres are notorious. Detainees have died, with accusations of neglect, lack of care and abuse. Perhaps the Minister will remember the 83-year-old man who was taken from detention to Hillingdon Hospital and died still in handcuffs. On two occasions, riots have broken out, with Harmondsworth being burned down. Detainees get lost in the system, too, with examples of some being detained for long periods, trapped in detention.”
“We need to recall the people we are talking about. These people are trafficked, exploited and abused, physically, sexually and mentally. They are extremely vulnerable. They are isolated and confused, often even lacking the ability to speak English, and they are suspicious of authority. Often, they have been emotionally abused to the extent that they are traumatised, and many suffer from post-traumatic stress disorder. These are the people that this statutory instrument will increasingly force into detention. And let us be clear: we know now that, in detention, there is little access to legal advice or to emotional or health support, so it is often very difficult for these people to communicate their circumstances and their case. What does detention mean? Well, this is the reality of detention.”
“That has not even been published, yet we are expected to vote into law this statutory instrument—a leap in the dark. If the consultation had been adequate, no Government could have reasonably brought forward this statutory instrument. As other Members have said, the consultation was extremely limited, in both who was consulted and the timescale. Consulting for only two weeks on something so significant is a dereliction of the Government’s duty, particularly on openness, transparency and the consideration of all reasonable factors. As others have said, the Home Office admitted to the Secondary Legislation Scrutiny Committee that more people will be held in detention if the instrument is approved. It will mean more people going into detention, but it will also be more difficult for people to get out of detention.”
“Many of those who are trafficked and then convicted of crimes lack access to legal advice and support even to explain their circumstances and case. The Government appear to be arguing that the threshold of reasonable grounds for determining whether someone has been trafficked is too low. Under the Council of Europe convention on action against trafficking, the threshold was deliberately set low to ensure that people are identified. I believe we have an international obligation to uphold that standard under the convention. People who are referred into the system are referred, as the Minister knows, by first responders, who are professionally trained and authorised by the Government. In detention, virtually all the referrals come from the Home Office itself. As the Minister said, the Government have offered us revised casework guidance.”
“I contend that the Government’s main worry should be their failure to identify and make safe the vast majority of people who have been trafficked into this country. The Government should concentrate on that, rather than on unsubstantiated allegations of abuse in the system. With no data published to prove it, the Government have argued that over the last 12 months, there has been a surge in foreign national offenders claiming to be victims of trafficking to disrupt immigration proceedings. That represents a complete failure to understand everything that we have learned about how many of those who are convicted are convicted of crimes that they were forcibly trafficked to commit in this country. I cite the recent examples from many of our constituencies of the Vietnamese young people who have been trafficked into cannabis farms in the UK.”
“Yesterday, in Westminster Hall, the Government seemed to claim that the reason for this legislation was that the system was being abused somehow. No evidence for that claim has been published by the Home Office, and we have seen no independent assessment of the claim or data that the Government may want to bring forward to argue this case. What we do know, however—this is on the basis of research backed by the Home Secretary and undertaken in 2020 by Justice and Care and the Centre for Social Justice—is that there are estimated to be more than 100,000 victims of modern slavery in the UK. In 2020, only 3,000 people were positively identified as survivors of slavery in the second stage of the decision-making process.”
“Have we learned nothing about the suffering that trafficking imposes on people? I urge the Minister and hon. Members not to support the motion, and to go back and look at some of the reports and investigations that led us to put in place extra protections for trafficking victims. In 2017, Rahila Gupta—a member of Southall Black Sisters and now a famous author in my local community—wrote the book “Enslaved: The New British Slavery”. It was reported extensively at the time, and it shook many of us to the core with its descriptions of trafficking and the impact on our fellow human beings. Many other reports then followed, and we learned something of the scale of trafficking and its consequences in this country.”
“I find it hard to believe that we are having this debate today, and that this delegated legislation has been introduced at all. Emotionally, many Members of the House will find it hard to take, especially those of us who have taken any interest in detention, and specifically modern slavery and trafficking, over the last two to three decades. After all the years of campaigning to expose modern slavery and trafficking, and after Parliament’s achievement of the Modern Slavery Act 2015, which we are all proud of, this is like stepping back in time. It is a hugely retrograde step. After the exposure of trafficking and the recoil from the policies of the hostile environment, I thought we would never see this sort of legislation again. It is shameful that it has been brought before us.”
“We all accept that the overriding concern during the pandemic was to keep people safe, but immediate action is needed to provide support and assistance to these often extremely traumatised people, many of whom have already been diagnosed with PTSD. That means decent, settled accommodation and advice and support, ensuring that those families are fully engaged in determining their own futures. This has been a shameful, disgraceful performance by this Government.”
“Since then, there have been sudden removals of families from those hotels. Although we had been assured that there would be adequate notice, people have sometimes been given just two hours to move, and not told where they are going or where they will eventually be put. Local teachers have contacted me extremely distressed about the impact on already vulnerable children, who had just begun to settle in their schools. We were assured that everything would be done to provide settled accommodation, but we now discover people have simply been dispatched around the country into more hotels and often into appalling standards of accommodation.”
“To respond, I set up a working group, with representatives from the Home Office, the contractor Clearsprings, the local NHS, council and community groups. I commend the Bell Farm Christian Centre, and Diane Faichney and Stuart Mathers in particular. Despite all the hard work of those involved, major problems have arisen due to the basic administration of the scheme. For instance, outsourcing food provision to a hotel resulted in people going hungry, and the Bell Farm Christian Centre’s foodbank being overwhelmed, as refugees simply sought food to feed their families. The small financial support allowance is often not paid and backlogs build up. At one point a curfew was imposed, causing real anxiety because detainees felt they were almost in a prison. We also struggled to get agreement with the local council on school places.”
“I have two detention centres in my constituency, Harmondsworth and Colnbrook. I will come back in another debate to explain the brutality of the regime in those detention centres, which is abhorrent. One of the opportunities given to us by Westminster Hall debates is to explain to Ministers what is happening on the ground, as against some of the advice they might be getting from officials. Since last June, two hotels in my constituency have been used to house 600 asylum seekers, as a response to the covid pandemic. I welcome those people into my constituency. I have met them and they are largely seeking refuge from Syria, Iran and other oppressive regimes or war-torn or impoverished areas of the world. Many arrived here with little more than the clothes they stand up in.”
“I warn the Government: if they do not act and change the legislation, there will be more industrial action and more disputes, so they need to act with urgency.”
“There is real resentment because those companies have made vast profits and taken furlough money from the Government, and they were simply using a short-term crisis to impose long-term pay cuts. Owing to the resolution of my community, individual workers, Unite the Union and others, we fought back and have settled as best we can to protect people, but the protection can come in the longer term only if the Government act and introduce legislation to ban the practice of fire and rehire once and for all. Lord Hendy reminded us a couple of days ago that fire and rehire is not a new practice. The general strike was provoked by it when the miners were sacked and brought back to work only if they accepted wage cuts.”
“That is all people wanted. The reaction to the attempt to cut wages on such a scale and to tear up employment agreements was, first, absolute anger. The frustration among the workers at Heathrow was palpable. The staff were so loyal. They were proud to work for British Airways, the national carrier, and many had worked there for decades. Whole families depend on the airport, working for either BA or Heathrow Ltd. They faced wage cuts, even though house prices and rents in my area are so high, and were under real stress, and they were looking at whether they could maintain their livelihood and keep a decent roof over their head. That stress has brought about almost a mental health crisis in our community.”
“I want briefly to outline some of the implications of fire and rehire in its latest use for individuals, families and communities. I refer to my entry in the Register of Members’ Financial Interests, and I thank my hon. Friend the Member for Jarrow (Kate Osborne), who has been an asset to her constituency and the House since she was elected. The latest wave of fire and rehire, which is not a new phenomenon, started in my constituency at Heathrow through the activities of British Airways and Heathrow Airport Ltd. Both companies saw the pandemic as an opportunity to implement their long-held strategy of cutting wages and undermining working conditions and terms of employment. The wages and the terms of employment were fought for over generations by trade unions to ensure that people got a decent wage and were treated properly at work.”
“It is manifestly unfair that income derived from wealth is taxed at a lower level than income derived from work. I hope that the Government will look at this issue ahead of Report stage. I urge the Government to consider accepting amendments 2, 3 and 4 at a bare minimum—better still, leave out clause 5 altogether. Do not force the lowest paid in our economy to shoulder what could be the heaviest burden.”
“That demand is really created by the people—these are the people who will spend, not hoard. If the House is not minded to leave out clause 5, perhaps the Government can compromise and accept amendments 2, 3 and 4 in my name and those of other hon. and right hon. Members. These amendments would ensure that the stealth tax on working people was delayed until 2023-24—the same year that the corporation tax rise kicks in. Low-paid workers should not be hit with an extra year of tax that the corporations are not hit with. Another point that I hope the Government will consider incorporating into the Bill before Report stage is the case for equalising capital gains tax rates with income tax rates. Ahead of the Budget, I was heavily briefed that this was being considered by the Chancellor.”
“We know that half of all care workers earn less than the real living wage and the majority of children are living in working households. What does that say about low wages? The last thing any Government should be doing is raising taxes on low-paid workers, especially when that Government have broken their promises on raising wages and have failed to reach the target they set for the minimum wage. Some Members may recall the Rooker-Wise amendment; it was a long time ago—44 years ago. That amendment overturned a similar proposal from the Callaghan Government. With many low-paid workers not getting a pay rise and facing mounting household debts, we should not be taking more of their income in tax. With high street retail needing an urgent stimulus, there cannot be a worse policy than removing demand from the economy at this time.”
“Now they are being hit by a stealth rise in income tax that was not pledged at the last election and that any fair reading of the Conservative manifesto would have thought was completely ruled out. The Labour party also stood on a manifesto that said there would be no rise in income tax for 90% of earners, and has recently said that now is not the time for tax rises. I hope that Members across the whole House will stand by their commitments at the last general election and oppose clause 5. This would allow the threshold to rise with inflation, as legislated for way back under the last Labour Government in the Income Tax Act 2007. Low pay is endemic in our society. In 2015, the then Chancellor, George Osborne, promised a £9 minimum wage by 2020. It is 2021 and the minimum wage is still below that level. Let us look at an example.”
“In the last general election, the Conservative manifesto pledged: “We promise not to raise the rates of income tax…This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.” Clause 5 breaches that pledge; incomes are not protected. More of people’s incomes will be hit by income tax. It is especially harsh on the millions of public sector workers who have faced from this Government: first, a pay freeze; a 5% rise in council tax; and now a stealth rise in their income tax. These people are low earners who struggle to make ends meet as it is. Low earners are heavily indebted. Some have been furloughed, losing 20% of their income for a year.”
“With the greatest respect for the previous speaker, I think there is a view across the House and in all parties that we need to manage the economy effectively in the interests of everybody. That means addressing the debt to GDP ratio—of course it does—but the question always arises, “Who bears the burden? Who carries the heaviest burden?” I believe that the Bill shifts too much of the burden on to those who are the least able to bear it. That is where we disagree, and it is an honest disagreement. I will speak to oppose clause 5 standing part and to support amendment 2, and consequential amendments 3 and 4, which stand in my name and those of a number of my colleagues. Some of this is about confidence in politics, which at the moment is receiving a bit of a drubbing.”
“We have seen how they can be abused. We have seen how ineffective they can be. We have also seen an industry develop, with accountants and lawyers who have profiteered from tax reliefs that the Government have introduced over decades. To add now to that abuse of taxpayers’ money in this way, I deeply regret. I urge the Government to think again. I give the Government this warning: in a few years’ time, if the Bill goes through as it is now, I bet we will be returning to this debate with example after example of how this system has been abused, to all our cost.”
“They do not adequately report to Parliament or the public on whether reliefs are working as intended and what they cost and whether they represent good value for money.” She went on: “HMRC does not effectively monitor changes in the cost of tax reliefs so is slow in identifying instances where a relief is being exploited for a purpose” beyond what Parliament intended. I think that is an accurate but damning indictment and one that should concern the whole House, but especially Treasury Ministers. New clause 6 specifically recommends that the Public Accounts Committee is tasked with reviewing the effectiveness of existing capital allowances and that this House then votes on the clauses that provide for super deductions in the light of that evidence. I urge the Government to get a grip on the whole process of tax reliefs.”
“The Public Accounts Committee has previously looked into the operation of UK tax reliefs, and its findings painted a worrying picture. These reliefs already cost more than £100 billion a year in forgone tax, and HMRC does not even know how many reliefs exist or monitor their cost, let alone their effectiveness. Let me quote my right hon. Friend the Member for Barking, who is the former Chair of the Committee. She said: “HM Treasury and HM Revenue and Customs…do not keep track of those tax reliefs intended to influence behaviour.”
“Historically, tax reliefs have been introduced, and over the years an accumulation of tax reliefs have never been reviewed and never really been tested for their effectiveness in the way they should be. The Office for Budget Responsibility stated in its March “Economic and fiscal outlook” that the super deductions, as others have said, are expected to cost at least £25 billion in total between 2021-22 and 2023-24. This is a huge commitment, and it is surely in the public interest that we have an assessment of policies’ effectiveness and also ensure they deliver on social and environmental goals. In new clause 6, I seek to create an evidence base on which this House can assess the merits and drawbacks of the super deduction policy.”
“The Chancellor of the Exchequer made much of his compact with unions and business groups over the furlough scheme. This modest new clause 1 puts in legislation the approach I am putting forward. I believe that it is within the spirit of that relationship between Government, trade unions and employers, and I just urge the Government to think again about accepting it. New clause 2, in my name and those of other hon. and right hon. Members, combines a request for an evidence base for super-deductions in respect of capital allowances and to explore what economic benefits could be derived from attaching social and environmental conditions to the receipt of super deductions. I heard one hon. Member in this debate say that the Treasury monitors these policies and does indeed review them; unfortunately, it does not.”
“As has been said in debate after debate, even by Government Ministers, in many instances the greater involvement of the workers in a company increases productivity. These are just low barriers for companies to pass. It does not take long to recognise a trade union or to be accredited as paying the living wage. Companies that do not currently meet these extra criteria could easily do so during the passage of this Bill and its enactment. I also back the Front-Bench amendments in the name of the Leader of the Opposition, and I pay tribute to my hon. Friend the Member for Ealing North (James Murray). He is right that companies such as Amazon that dodge their taxes and evade their responsibilities to their workers should not be given tax breaks on top.”
“Unlike Ministers, in dealing with business, I do not believe in a something-for-nothing culture. If the Government are giving tax breaks to businesses, the Government, as guardians of the public purse and the public interest, should demand something in return. New clause 1, in my name and those of other hon. and right hon. Members, asks simply that, in return for companies being eligible for these super deductions, they should pay their workers the real living wage and should recognise trade unions for collective bargaining purposes—two simple things that reflect that they are responsible employers. I regret very much the Minister’s reference to these as “burdensome” requirements. Paying a decent wage and recognising trade unions are not a burden, but actually things that enhance the role of an individual company.”
“Members have raised example after example in recent years, including the entrepreneurs allowance, the patent box and the tonnage tax, all of which have not only failed in their objectives but lined the pockets of company directors and shareholders, exactly as my right hon. Friend said. Accountants, lawyers and others have been using them effectively for tax avoidance. The scope for perverse incentives and unintended consequences is even greater with these super deductions. If the Chancellor wants a sweetener to go alongside his corporation tax rises, surely at a time of rising unemployment it is more urgent to incentivise job retention through a temporary cut to employers’ national insurance contributions rather than introduce what has been described as this dog’s dinner of untargeted super deductions in clauses 9 to 14.”