Jesse Norman
MP for Hereford and South Herefordshire · Conservative · United Kingdom
“In view of the new Prime Minister’s spending priorities, it now seems highly unlikely that the ruinously expensive current plans will be put to the House before the end of this year. Seven months have already passed with no action.”
“10 North have real spending powers of its own? If the answer is yes, then this will be a new kind of cross-departmental Ministry—perhaps a territorial Ministry, like a regional Government but with no defined scope or mandate. We will need to see the legal instruments delegating Treasury authority and functions to it.”
“I rather fear that, given our longevity and at least the level of banter on the Government side of the Dispatch Box, we will be seen over time as the Morecambe and Wise, or perhaps the two Ronnies, of British politics.”
“The past few weeks have brought news of the deaths of Dolly Parton, Tim Curry and Wendell Berry. I am sure that many colleagues will share my sense of shock and sadness at the loss of those extraordinary figures, but also give great thanks for their lives. Truly, we live in a world of change.”
“10 North will not have spending power of its own, then ultimately the Treasury and the Chancellor will continue to sign off on its public spending and on any taxing matters. Decentralisation is really important, but No. 10 North will not be a means of decentralisation in this scenario; it will be just another layer of Government.”
“But we are not going to cast nasturtiums, in the words of a friend of mine, on any of this nonsense—not even on Baroness Lloyd and the hopeless Building Digital UK, who have entirely failed to address the issue of fibre broadband in neglected parts of my constituency and simply repeated the same language of incompetence and failure to me…”
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“I congratulate my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for New Forest East (Dr Lewis) and the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate today, and I thank colleagues on both sides of the House for their contributions. It is a measure of the effect they perceive on their constituents that, in these circumstances, they are here in such numbers. The outbreak of covid-19 has created extraordinary circumstances, and it is important to say up front that the Government are keeping the situation under close review, as elsewhere, and will take a proportionate and reasonable approach to anyone covered by the loan charge who is unable to file their return by 30 September.”
“I thank my right hon. Friend for the question. All he needs to do is attend to the detail of the Morse report, in which Sir Amyas Morse goes through the efforts made at that time, before and after 2010, in some detail. That is the basis for the judgment that he reaches about the appropriate relief.”
“A dictionary definition tries to explain exactly what it is that is being talked about. The dictionary definition of a real loan is, “an amount of money that is borrowed…and has to be paid back”. That accords with our natural experience, as hon. Members will discover if they try to take out a business loan from a bank and not pay it back. If they try to take out a mortgage and not pay it back, they will find the same to be true. Those loans, however, were not designed to be paid back. They were rather different from loans that might be made to employees that then get written off, on which tax is typically chargeable. They were not designed to be paid back. They were employment income in disguise, so they were subject to tax.”
“Of course, that did not reflect the person in question’s true earnings because, alongside that payment, they would receive a further top-up payment described as a loan. In many cases, the top-up payment far exceeded—often by a large multiple—the salary element declared for tax purposes. Those facts are not genuinely in doubt, and all Members who have taken part in the debate have rightly condemned tax avoidance, but I put them on the record again because they highlight how contrived that form of tax avoidance typically was. They also go to the root of the problem. My right hon. Friend the Member for Haltemprice and Howden raised the issue of thesauruses and dictionary definitions. Let me remind him of the difference between a dictionary definition and a thesaurus. A thesaurus gives an alternate word of supposedly the same meaning.”
“I take it that the hon Gentleman rightly refers to the enablers and promoters of such schemes. As he knows, I take that extremely seriously, and I have insisted on that point ever since I became Financial Secretary. I will say more about that shortly. I return to the point that such schemes were contrived tax avoidance schemes that were typically run through an offshore vehicle. A person would receive a monthly amount of pay, often deliberately set at or around the level of the personal allowance to maximise the tax avoided, and above the national insurance lower earnings limit, so as to qualify the person concerned for the national insurance contributions required to receive a state pension.”
“I am not in a position to take the right hon. Gentleman through the legal arguments, and I do not need to, because, as I have said, they have been described in detail by Sir Amyas Morse in his review which, of course, is based, as my remarks would not be, on a detailed interrogation with tax experts on all the specific issues behind it. I do not think we have any sensible reason—no one has in fact offered one—for disagreeing at length or in any detail with his conclusion.”
“The other thing that Sir Amyas pointed to—again, I think rightly, but also picking up on a widely anticipated and understood gap—is the importance of raising standards in the tax advice market. Again, I am pleased to say that, as part of the Budget documentation, we have published a call for evidence on this very topic, “Raising standards in the tax advice market”. I encourage all colleagues and their constituents to contribute to that approach.”
“Among those recommendations were two to which I want to draw the House’s particular attention. The first is Sir Amyas’s insistence, as we have heard across the House today, on the need for the Government to go further in going after and bringing to justice people who enable or promote tax avoidance schemes. I am therefore delighted that, as part of the Budget documentation we have produced today, we have published a policy document on “Tackling promoters of mass-marketed tax avoidance schemes”, and I draw the attention of all colleagues to it. It is a sober and thorough piece of work that looks at lots of different approaches as part of an integrated strategy.”
“Sir Amyas Morse, as has been recognised by colleagues today, is an individual of huge experience and great independence of mind, and he is widely respected across the House. He was independent in his review, and he was given wide scope in expert support. He produced a thorough and exacting piece of work—a 76-page, 30,000-word report—that drew on over 700 individual testimonies and impact statements, and which painstakingly worked through the issues before recommending notable changes to the policy, including substantial carve-outs as to who was affected. Sir Amyas was clinical and at times unsparing in his criticisms, including of Her Majesty’s Revenue and Customs and, be it said, of the Loan Charge Action Group. All but one of these recommendations were accepted by the Government.”
“That has two effects: it deprives public services of the money they need to operate; and it forces other taxpayers to pay more to make up the shortfall. The purpose of the loan charge was to combat this form of abusive tax avoidance. The loan charge was introduced as a new measure in 2017. Following a public campaign last year, we asked Sir Amyas Morse, as has been noted, to conduct a review of whether it was an appropriate policy response to the use of the disguised remuneration scheme. He had full control of the review’s management and recommendations. He took evidence from a very wide range of individuals affected, and he spoke to interest groups, MPs, tax specialists and many other stakeholders. Again, the facts are not in doubt.”
“I am very grateful to the hon. Gentleman, but if I may say so, I do not think that has been true. I think the conclusion colleagues have been pushing in this debate is that they disapprove thoroughly of tax avoidance, and their view is that this is not tax avoidance in many cases. If they accept that this is tax avoidance and that the issue is merely as to the remedy, that is of course a slightly different position, and one that I am happy to respond to. I just want to make it clear that this is a form of tax avoidance. It goes to the wider issue as to whether people should have known what it was. The point is that it is tax avoidance, and it costs the Exchequer hundreds of millions of pounds a year.”
“Friend the Member for New Forest West will recall—he taught economics so he must know about these things—that Smith not only set out the ideals of a well-functioning tax system, which we all aspire to achieve, but was, for the last 12 years of his life, a practising commissioner of customs, attempting to wrestle with an ever-evolving customs market and seeking to extract duty and tax due, and rightly so. I would like to touch on the statesmanlike comments of the hon. Member for Bootle, the shadow Chief Secretary, which perhaps reflected his imminent expectation of taking my seat on this side of the aisle. He recognised that what people do not pay in tax due, someone else must. He is right about that. He noticed that if it looks too good to be true, it probably is. He is right to focus, as others have, on the enablers and promoters.”
“It is notable that Sir Amyas Morse was clear that he supported the essential purpose of the loan charge and that it should remain in force. We have heard a lot about how the law was not settled in 2017. Again, as I said, I can do no better than refer colleagues to section A of the Morse review, which carefully reconstructs the history of the past 20 years of disguised remuneration. Let me quickly turn to the many excellent contributions that have been made. I will start with the excellent contribution made as a point of order by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), who pointed out the excellence of my book on Adam Smith—I thank him for that, although I defer to the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), as Kirkcaldy was, of course, Smith’s home town. My right hon.”
“It taxes a loan outstanding at a future date. It does not change any law previously on the statute book. It has been asked why the loan charge was introduced. In the words of Sir Amyas Morse, it “offers an expedited means of collecting tax that is due”. Is the loan charge unjust? Again, I would suggest not. If one asks the average man or woman in this country, I think they would say, “Everyone should pay their fair share of taxes. People are responsible for their own tax affairs. Real loans get repaid; if someone offered you a loan for which no repayment, no tax and no interest was due, it would probably be too good to be true.” And so it is. The numbers seem to bear that out. More than 99.8% of the tax-paying population have never used a scheme. Even among the freelance population, the take-up has been only 2.5%.”
“I have in my hand a detailed document designed to address this very issue. It goes through a whole range of different approaches and integrates them into a strategy. I would be delighted to have any input that she would like to make about other ways in which that can be improved and developed. We work on the basis of the law as it presently stands, and which we have inherited. It is itself the result of previous Parliaments, including of course the parliamentary consideration of the loan charge. We have to work with the hand we have got, and improve it as fast and as comprehensively as we can. I will now address the motion directly and then, in the limited time I have, turn to the comments that have been made. Is the loan charge retrospective? Again, I think it is clear that it is not. It was introduced as a new measure in 2017.”
“I have half a minute left. The right hon. Gentleman has only just arrived, so it is a little impertinent to raise a question at this point. It is important that we focus on the centrality of the claim. Sir Amyas Morse has looked at it, and he has attempted to find a Jupiterian way through complicated tax issues and to deal, with equity, with the different interests and parties involved. I think he has succeeded, which is why the Government, comprehensively, with one exception, have accepted his conclusions.”
“We have cut business rates—referenced in speeches on several occasions and rightly so—for more than half a million of the smallest firms, which pay nothing at all as a result. We are delivering £20 billion of patient capital action—”
“Yesterday’s Budget is emblematic of the sense of purpose and energy that defines this Government as we seek to chart a bold new path for this country in the global economy to ensure that we remain a competitive place to do business; that we deliver the infrastructure and investment necessary to spread jobs, growth and opportunity across this country; and that we build on our historical strengths, referenced on many occasions in this debate, in science, technology and innovation to position ourselves at the forefront of the industries of the future. Thanks to the decisions we have made, we are building on firm foundations. We have kept corporation tax at 19%, the lowest in the G20, so that businesses have more freedom to invest in their own priorities.”
“The fact of the matter is that the banking sector in this country was at 20 times its capital leverage in 1960, at 20 times its capital leverage in 1970, at 20 times its capital leverage in 1980, at 20 times its capital leverage in 1990 and at 20 times its capital leverage in 2000. Between 2000 and 2007, that 20 times went up to 50 times—in seven years. No further explanation need be given for why, when the crisis struck, it had a catastrophic effect, an effect that we are still seeking to remedy. The United Kingdom has entered a new decade and a new era in which our prosperity as a nation will be shaped by the dynamism of our economy, the ingenuity of our entrepreneurs and the success of British businesses of all kinds.”
“PFI costs this country £10 billion a year, and any steps we can take to remove that burden on current expenditure— [ Interruption. ] I am sorry, but as I understand it, the shadow Business Secretary was intimately involved in PFI. I wonder whether, in her seven years in that area, she looked at the PFI project in Hereford, on which I had to run a process that saved £5 million for the taxpayer and greatly improved the delivery of hospital care to my constituents. The fact of the matter is that this Government and their predecessors have had to deal with the terrible crisis of 2008, even now, and I remind the House that the tragedy— [ Interruption. ] Those are desperate attempts by the Opposition Front Bench team to put me off.”
“I was therefore slightly surprised when his first move was to descend into partisan politics, and I am sad that the shadow Business Secretary has done the same. I am struck that one particular measure in the Budget has not received the attention that it perhaps should have done. Paragraph 2.77 on page 76 addresses the support we are giving to assist in opening up and reviewing private finance initiative projects across the public sector. We know that PFI has been a disaster for this country, and it was overwhelmingly initiated and carried out by the Labour party in the hospital sector. The idea that the NHS, in which virtually every PFI project was conceived and executed under a Labour Government, should be a topic of the Labour party’s criticism is astonishing. [ Interruption. ] I welcome you to the Chair, Mr Deputy Speaker.”
“Today’s debate has been on business and innovation, and it is good to see the CBI acclaim it as “a bold Budget at scale…which will help people and business through tough times.” The Federation of Small Businesses calls it an “excellent pro-small business budget”. And the British Chambers of Commerce says: “Much to welcome for UK business communities”. How important is that? I am particularly pleased that Make UK, or the Engineering Employers Federation as it used to be known, says: “Today’s measures to boost R&D will be applauded by industry and will help the UK lead in the technologies”— including, of course, the green technologies— “of the future.” The shadow Chancellor began his remarks by saying this is not a time for partisan politics and, of course, I agree.”
“I also pay tribute to my fellow Ministers for their contributions to the Budget and pay tribute especially to the Chancellor for a new Budget from nothing in weeks; a vast array of measures, including measures not taken up; and a fully integrated cross-Government response to a national crisis of coronavirus, but which also lays the foundations for decades of higher investment in infrastructure. That, to me, speaks of a parliamentarian of enormous ability, mastery of detail, warmth and humanity, for which I salute him. A new Budget, leadership on coronavirus and new energy and direction on infrastructure—I hope my colleagues will agree that he got them done. This Budget has been well received and well supported by many groups across the business sector.”
“They had pride in their community, pride in their history and pride in their own achievements in coming to this House. They also, I thought, showed a wonderful fair-mindedness about predecessors of both political parties and I very much associate myself with that spirit. I congratulate them on that. I salute the men and women of the Treasury and HMRC who made this Budget possible. In fact, they did not just make one Budget possible; they made two Budgets possible, including the one that never got delivered. Their expertise, dedication, good humour and sheer hard work is something that I think everyone in this House should be aware of and thank them for.”
“Madam Deputy Speaker, or may I say Chairman of Ways and Means? What a delight it is to see you in the Chair. It is an epochal moment—the beginning of a new decade, a new Government and a new Chairman of Ways and Means. How delightful is that? I very much support what the hon. Member for Salford and Eccles (Rebecca Long Bailey) said about the quality of the maiden speeches in this debate. We have greatly enjoyed them. I was struck by the crazy golf. I was struck by the Amber seaside express, but what came through all the speeches—not just that from my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart) but also those from my hon. Friends the Members for Warrington South (Andy Carter) and for Leigh (James Grundy)—was the tremendous sense of pride that they exhibited.”
“Member for Wolverhampton South East (Mr McFadden) raised the question of human capital. I know that he will be thrilled that we have a £2.5 billion skills fund—”
“There have been so many interventions and I simply cannot cover all the speeches if I take an intervention now. I know that the hon. Lady will excuse me. We gave the party opposite the chance to intervene. We are delivering a £20 billion patient capital action plan to unlock private financing in high-growth innovative companies, and we have established a regulatory system that strikes the balance between responsibility and opportunity to allow us to embrace the most exciting ideas in technology. Let me touch on many of the important speeches that have been made today. The hon. Member for Glasgow Central (Alison Thewliss) raised the question of Barnett consequentials, and if she looks at page 49 of the Red Book, she will find them in paragraph 1.159. The right hon.”
“What will not be true of us is what was true of Lord Prescott when he was in this place, when he said, “The Labour party supports the green belt and we intend to build on it.” We will not be doing that. My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) raised the question of the “Winds of Change” and gave us a historical dimension. I celebrate that, and I celebrate Lord Hennessy in his wisdom, because he is truly an ornament to the House of Lords. Let me close by saying that this is a Budget for this country as a whole. It will make our economy and our country stronger still.”
“He asked whether we would be monitoring the impact of the reduction in entrepreneurs’ relief. Let me tell him that of course we will. The problem with entrepreneurs’ relief is that it is not very well targeted on entrepreneurship. We wish to support entrepreneurship, small business growth and rapid innovation, and that is what we are seeking to do. The hon. Member for Richmond Park (Sarah Olney) raised the question of green packages and rightly stressed the tough choices involved in a Budget. Let me refer her to the national infrastructure strategy. We already have a green package in this Budget. It is quite wide-ranging, but we intend to do more on it.”
“They will now also get a £3,000 coronavirus cash grant, of course, if they are in receipt of small business rate relief. There should be some bounce already in there, but of course we continue to reflect on business rates. We have a business rates review coming up, and he and my hon. Friend the Member for Arundel and South Downs would be welcome to contribute to that. The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) raised the question of red diesel. As she will know, there is a consultation associated with the changes we are making and she is welcome to support it and to make a petition to it if she wishes. The hon. Member for Birmingham, Selly Oak (Steve McCabe) raised a range of questions, some of which I have already touched on, such as business rates.”
“Those in problem debt will be able to get 60 days’ breathing space, including from HMRC, while they engage with debt advice, and I think that is a very important contribution. What a delight it is to see my hon. Friend the Member for North East Bedfordshire (Richard Fuller) back in this Chamber. He rightly celebrates the small business focus of the Budget and asks us to consider business rates in relation to nurseries, and other petitions have been made in relation to that, including by my hon. Friend the Member for Arundel and South Downs (Andrew Griffith). Let me remind my hon. Friend the Member for North East Bedfordshire that most nurseries will pay no rates if their rateable value is under £12,000 because of the small business rate relief.”
“Friend the Member for South Holland and The Deepings (Sir John Hayes) rightly stressed the importance of long-term investment and as little bureaucracy as possible in making capital investment, and how right he was. My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) asked us to reach for wartime analogies in fighting coronavirus. He will have seen that the Chancellor made it perfectly clear that we are prepared to do whatever it takes to assist the British people in dealing with this temporary crisis. We will continue to do that. The hon. Member for Makerfield (Yvonne Fovargue) asked about free debt advice. I think she knows that the Government are investing an initial £12.5 million in HMRC in 2020-21 to begin implementing the breathing space initiative.”
“I will not give way, for the reasons I have already described. I can continue to waste the hon. Lady’s time and the House’s time responding to these interventions, but we need to press on. I am sure that the right hon. Member for Wolverhampton South East will also enjoy the investment we have made in further education colleges—more than £1.5 billion for further education capex over the next few years. The hon. Member for Kingston upon Hull North (Dame Diana Johnson) asked where the revenue from the tampon tax would go. The tampon tax fund supports women’s charities, as she knows, and I am happy to tell her that the revenue will go to that. The competition for the next round of funds will be launched by the Department for Digital, Culture, Media and Sport shortly for the 2019-20 VAT receipts. My right hon.”
“Might it be worth my reminding my right hon. Friend that bank leverage, which had been 20 times capital for 40 years between 1960 and 2000, on average, went from 20 times capital to 50 times capital in seven years under Labour? Therefore, when the bank crisis struck, it was all the worse because the whole sector was wildly over-leveraged.”
“The proposed legislation increases the rates of those benefits in line with prices. I hope hon. Members will join me in supporting the regulations.”
“I beg to move, That the Committee has considered the draft Tax Credits, Child Benefit and Guardian’s Allowance Up-Rating Regulations 2020. As hon. Members will know, the Government are committed to delivering a fair welfare system for claimants and taxpayers while providing a strong safety net for those who need it the most. The regulations will ensure that tax credits, child benefit and guardian’s allowance will increase in line with the consumer price index, which set inflation at 1.7% in the year to September 2019. The effect is to meet the Government’s manifesto commitment to end the benefits freeze, with most elements and thresholds of tax credits and both rates of child benefit being increased. The Government will spend an additional £800 million to support tax credit, child benefit and guardian’s allowance claimants.”
“I am pleased to see that work is being done to assess whether the correct measure of poverty has been adopted, because there is a question not just about the level but about the composition. The Government are looking quite closely at that. On food banks, let me simply point out that Germany, which on many accounts we would regard as having not merely a much richer Exchequer and more robust economic growth over the last few years—although not at the moment—than this country, and which has a more generous benefits system, has an escalating food bank problem that is every bit as bad as the one that we find in this country.”
“The reason for that was that between 1997 and 2010 welfare spending had risen by 65%—£84 billion in real terms—and unfortunately, combined with the mishandling of the financial sector that caused the damage from the crisis, when it took place, to be so bad, it cast a very long and quite painful shadow. The hon. Gentleman mentioned food banks, but may I offer two or three reminders? One is that poverty, as I am sure he would agree—he is a very thoughtful man—is a complex issue. It is not just a matter of income; it is also a matter of costs, such as fuel costs and housing costs, and of childcare. The approach that the Government have taken in many cases is to pinpoint specific concerns—childcare being an obvious example.”
“I am very grateful to the hon. Member for Inverclyde and of course I understand the concerns that he has placed on the record. They do not bear directly on this uprating, which I think he will support, but he has made his position clear and it is well understood. May I focus on the more substantive comments made by the hon. Member for Stalybridge and Hyde? He suggested that the original benefits freeze was politically motivated. Nothing could be further from the truth. The fact is that the economy had a very long period of recovery—I am pleased to say that it has recovered under this Government and their predecessors—and the view was taken that the whole of Government spending ought to be constrained.”
“Of course not, but the point that I was making was that there is no simple link between income, poverty and food bank usage, and Germany is the example that gives the lie to that claim. As for an assessment, legislation is of course given an impact assessment when it is introduced, and that is the case here as elsewhere. I remind the hon. Member for Stalybridge and Hyde that more than 700,000—I think it is 730,000—fewer children are living in workless households than were in 2010, and that there are more than 1 million fewer people in workless households overall? The Government’s focus on employment and the benefits of employment has delivered that achievement, which is a very important improvement not merely to economic wellbeing, but to people’s social and emotional wellbeing. Question put and agreed to.”
“I trust that that is a useful overview of the changes that we are making to bring rates of support and contributions to the Exchequer in line with inflation, and I commend the draft regulations to the Committee.”
“For employers, the secondary threshold determines where they start to pay employer NICs. This will rise with inflation, from £8,632 to £8,788 a year. The level at which employers of people under 21 and of apprentices under 25 start to pay employer NICs will remain frozen at £50,000 a year. Finally, class 3 contributions allow people to top up their national insurance record voluntarily. The rate for class 3 NICs will increase in line with inflation, from £15 to £15.30 a week. The regulations also make provision for a Treasury grant of up to 5% of forecasted annual benefit expenditure to be paid into the national insurance fund, if needed, during 2020-21. A similar provision will be made in respect of the Northern Ireland national insurance fund.”
“The lower earnings limit will rise in line with inflation, from £6,136 to £6,240 a year. The upper earnings limit, where employees start to pay 2% NICs, is aligned with the higher rate threshold. As announced at the 2018 Budget, it will be frozen and remain at £50,000 per year. The self-employed pay both class 2 and class 4 NICs. The rate of class 2 NICs will rise in line with inflation, from £3 to £3.05 a week. The small profits threshold is the point above which the self-employed must pay class 2 NICs. This will rise with inflation, from £6,365 to £6,475 a year. For class 4 NICs, as already outlined, the lower profits limit will rise to £9,500. The upper profits limits is where the self-employed start to pay 2% NICs. This is also aligned with the higher rate threshold and will remain at £50,000 a year.”
“The primary threshold and lower profits limit indicate the points at which employees and the self-employed start to pay class 1 and class 4 NICs, respectively. These thresholds will rise from £8,632 to £9,500 a year. These changes, promised in the Conservative’s 2019 manifesto, underline the Government’s commitment to ensure that work pays, putting more money into the pockets of hard-working people. They will benefit about 31 million taxpayers, with a typical employee £104 better off compared with 2019-20. Legislating now ensures that taxpayers will benefit from April 2020. Increases to the primary threshold and lower profits limit do not affect eligibility for a state pension. That is determined by the lower earnings limit for employees and payment of class 2 NICs for the self-employed.”
“I beg to move, That the Committee has considered the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2020. It is an honour to see you in the Chair, Mr Hosie. The regulations set the national insurance contributions rates, limits and thresholds for the 2020-21 tax year. They will allow the Government to deliver their manifesto commitment to cut national insurance contributions for 31 million people across the United Kingdom. National insurance contributions are social security contributions. Payment of NICs determines eligibility for the state pension and other contributory benefits. NICs receipts go towards funding the NHS and those same contributory benefits. I will first outline the changes to the class 1 primary threshold and class 4 lower profits limit.”
“All employees earning above £9,500 will benefit by the same amount, and some 1.1 million people will no longer pay NICs as a result. Those are important properties.”
“I thank the shadow Minister for her remarks. She raised a range of issues, and touched first on what she described as lack of targeting. Of course it is the nature of the legislation that it is universal in its applicability. It is not designed to be a targeted benefit, and that is not its function. Its job is to improve the national insurance situation of 31 million people, which it does. The question of targeting is better addressed to many other aspects; it is not actually relevant to national insurance contributions, which for years have been legislated for on a universal basis. I do not think that the hon. Lady is correct that this change is regressive in the way that it will operate. It is certainly not a tax cut for higher earners.”
“It is the Government’s ambition to increase the threshold to £12,500, and decisions will be taken at future fiscal events. Increasing the NICs threshold to £9,500 this year is a first step towards that ambition. The hon. Lady also mentioned additional measures and statutory sick pay. It would be foolish in the extreme for me to comment on that matter two days before a fiscal event, and I therefore think we should leave it for a future discussion in the House. Question put and agreed to.”
“If we look in full at the 31 million people affected, we will see that those in employment and earning above £9,500 will receive the same amount. The hon. Lady rightly mentions universal credit, and she understands that its effect is to smooth, via tapering, various cliff edges. That is a helpful and good property—I am sure she does not regret it—and it interacts with this measure. The broad picture, however, is the one I describe. As the hon. Lady has acknowledged, the measure has elements of a contributory scheme, so it will have effects on people who do not have a full contributions record. On the Government’s future ambitions, she will understand that a statutory instrument debate is not the place to unveil such a strategy, and certainly not in the lee of a Budget two days away.”
“The majority of work carried out under that relief was for extension purposes rather than for maintenance, and the relief did not deliver the original point and purpose of the legislation. I am afraid that, in so doing, it deployed large amounts of taxpayers’ money in ways that were not contemplated by Parliament when it passed the legislation. That is why that legislation was withdrawn as part of the 2012 Budget.”