Dame Harriett Baldwin
MP for West Worcestershire · Conservative · United Kingdom
“I welcome the Chancellor to his new role. I paid close attention yesterday to the long speech he made to reset the narrative and drive growth Britain. In paying tribute to his predecessor, will he recognise that she left the highest tax burden on record? Instead of postponing the words he could utter to my hon.”
“I welcome the new Prime Minister to the Dispatch Box. I note that in his statement he referred to the biggest issues facing the country as being “the economy and the cost of living crisis”. Will he accept that one of the things that has damaged our economy and caused prices to be higher is the tax-and-spend Budget in November 2024?”
“Could the Leader of the House make a commitment that the new Chancellor of the Exchequer will come to the House on the first day we are back from recess?”
“With a stroke of his Whitehall pen, the Secretary of State has just abolished Malvern Hills district council, Worcester city council, wonderful Wychavon district council and Worcestershire county council. He said in his statement that this is about making “real improvements to people’s lives and…communities”.”
“In recent weeks in West Worcestershire, I have met local police and the police and crime commissioner; the police and crime commissioner is being abolished, and the police are being reorganised. I have met the local health commissioners; they are being reorganised, and Healthwatch is being abolished.”
“Will the Leader of the House confirm that, given that the other place is sitting next week, there is nothing to stop him tabling a business statement to enable this House to sit next week? Given the enormity of the events happening in the Government next week, does he not think that would be a good idea?”
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“To give an example, as a result of the Committee’s current inquiry on tax reliefs, we have finally found out how many tax reliefs there are in the tax code—1,180. The unnecessary complexity in our tax code makes the tax system expensive and difficult for HMRC to administer, makes the tax system confusing and makes it difficult for taxpayers to understand the choices on offer and the consequences of those choices for their after-tax income. A complex tax system can be hugely costly for taxpayers and for those responsible for compliance with the tax code. The Financial Secretary to the Treasury was kind enough to give evidence to our Committee on the VAT system last week, and she described it as the “most complex” part of the tax system.”
“I rise to speak to new clause 2 and amendment 7, which were tabled in my name and those of all the other members of the cross-party Treasury Committee. “Taxes are far too complex.” Those are not my words but the words of the Chancellor of the Exchequer when he gave evidence to our Committee. The amendments to which I am speaking would give legislative effect to the recommendations of the report we published last week on the work of the Office of Tax Simplification. The report is on the Table, and I encourage all hon. and right hon. Members to read it. Across the House, I think we can all agree that, regardless of the level of tax, the tax system itself has become far too complex.”
“I agree with my right hon. Friend’s excellent point. Not only do the wealthiest get the best tax advice, but general financial advice has now become so expensive in this country that only 8% of our constituents can afford to pay for it.”
“The Chancellor told us that he intends to be a Chancellor who makes “progress on tax simplification.” I welcome the simplification of the lifetime allowance, which the Opposition opposed earlier, but the Committee wants the ability to hold him accountable for that. Under new clause 2, the Treasury would report to the Committee annually on the Chancellor’s promise to simplify taxes.”
“However, the most important factor in securing tax simplification in practice would be for the Chancellor to take on the personal responsibility for simplification that he pledged to take, which brings me to the Treasury Committee’s new clause 2. We have heard that, while the Treasury and HMRC focus on new taxes, the Office of Tax Simplification did important practical work seeking to simplify the existing tax system. We also heard in our evidence session that the Office of Tax Simplification did good work listening to taxpayers to understand how the complexity of the tax system works against them. The reports of the Office of Tax Simplification were published very transparently, unlike the private advice given to Ministers, and they facilitated parliamentary scrutiny of tax simplification efforts.”
“It provides disincentives to work, and we see that obstacle to economic growth reflected in the workforce numbers produced by the Office for National Statistics. The Chancellor agrees that “the tax system is overcomplicated and the trend of ever more complication must be reversed.” It is surprising that, on coming to office, he chose not to reverse the abolition of the Office of Tax Simplification. It was established in 2010, and it was given a ringing endorsement by the Treasury in its 2021 statutory review. Disbanding the independent champion for simpler tax sits very uncomfortably with the Government’s insistence that tax simplification is a priority.”
“My right hon. Friend highlights that this is not an easy task. The point I am trying to make with my amendments, which I hope he will support, is that, by abolishing the Office of Tax Simplification, we lose not only a source of valuable advice on how to simplify the tax system but the message that we want to do so, which I know the Chancellor wants to convey. Higher up the income scale, the £100,000 income bracket triggers the withdrawal of the very welcome steps we have taken on tax-free childcare and the personal allowance. This means that a family with two children in full-time childcare, if they happen to live in London, would be better off earning £99,999 than earning more than £150,000 because they would have a more than 100% withdrawal of extra earnings in that income bracket, which is very distorting.”
“I thank the Financial Secretary for that intervention, which is very much in the spirit of what we are calling for in our new clause. Our report set out the sorts of things we would like to see. The report from the Treasury should be annual and it should include international comparisons, where available. It should also set out what the Treasury has done within that year to simplify taxes for our constituents and those who run businesses.”
“As with the simplification of the lifetime allowance, we must ensure that this Treasury and these Treasury Ministers focus relentlessly on how they can simplify the complexity and the behavioural signals that our tax system is sending, which are deterring people from entrepreneurialism, taking on extra work and earning higher incomes. With that, I am happy to have spoken to those two amendments.”
“I thank my right hon. Friend for that intervention, which made me think immediately of the measures in this Bill on the increased rate of corporation tax. That in itself is controversial, but we now have these ladders between 19% and 25%. Our Committee would be interested to see the letter that the Financial Secretary has undertaken to write to us annually include an assessment of not only new measures such as that on the behaviour of businesses—I highlighted the impact of the VAT measures just now—but of the existing body of tax law.”
“The Government have given the Bank of England the task of targeting inflation at 2%, and our Committee has regularly held the Bank of England Governor’s feet to the fire over its performance on that inflation target. Mortgage rates have been increasing because inflation has been higher for longer than expected. In fact, the Governor said in his evidence to our Committee last November that from now on, our grumpy constituents who are having to pay higher mortgage rates should complain to him rather than to the Government. Will the Economic Secretary endorse the Treasury Committee’s campaign to ask the banks why, instead of just raising mortgage rates on the day the Bank of England raises rates, they do not also increase the savings rates that are paid to our constituents?”
“Q9. Will the Prime Minister back our local plans to reopen our much-loved Malvern Hills College, and does he agree that Warwickshire College Group should negotiate the sale in good faith and not resort to using public money to sue our district council?”
“May I add my thanks to all those involved in this crisis? Last week, I thought that the Minister rather swerved my question when I asked how much the overseas development assistance budget had been reduced in Sudan, so I looked online and saw that, starting at the beginning of the 2021-22 financial year, it had virtually disappeared. Does the Minister, who was in the same Lobby as me when we voted on 0.7%, continue to believe that spending in these fragile and conflict-afflicted countries is a really powerful way of preventing conflict across the region?”
“The Minister is speaking about the Valuation Office Agency, which gave evidence to the Treasury Committee last week. It reassured us that it was ready for these changes and on track for its computer system changes. Is that consistent with what she has been told?”
“Q12. Can I tell a tale of two councils? My constituents who live in Conservative-controlled Wychavon District Council have enjoyed six years of council tax freezes and excellent public services, while my constituents who live in the Malvern Hills District Council area, which is run by a rag-tag-bag of so-called independents and Greens, pay nearly 50% more in council tax for a band D property. Does the Prime Minister agree that the best thing my constituents can do on the cost of living is to vote Conservative on 4 May?”
“I, too, am heartbroken for the women I met in Darfur, who only want peace, security and to be able to educate their children; for the young women who protested and brought down al-Bashir, who hoped to see their country move towards democracy instead of another civil war; and for the World Food Programme workers, who deliver food in some of the hardest situations on the planet. My questions are about money. To what extent has the UK had to reduce its bilateral funding in Sudan? Who exactly is it who funds the 100,000 members of the Rapid Support Forces?”
“Many measures in the Bill will be warmly welcomed by businesses and households in West Worcestershire. However, clause 346 abolishes the Office for Tax Simplification. I do not think that anyone would say that the tax system is simpler than it was when the OTS was established. Could the Minister outline how we on the Treasury Committee can hold her accountable for continuing to simplify our tax system?”
“Yesterday’s inflation numbers were a sobering reminder of how terrible a tax inflation is on our economy. It is a tax that harms everyone, but it harms the poorest most. Does the Minister agree that, while Government fiscal policy this year needs to help in terms of halving inflation, the primary responsibility for getting inflation under control has been set in a remit letter given to the independent Bank of England? It is the Bank’s job to make sure that inflation gets back in its box.”
“There was a significant tax cut in the Budget that has been greatly welcomed by drivers in my constituency and elsewhere, namely the extension of the 5p cut in fuel duty and the freezing of the escalator, but does the Chancellor accept that by postponing that decision until an election year—next year—he is simply continuing the fuel duty fiction that our Committee has highlighted?”
“Speaking briefly as a constituency MP, I welcome the help for swimming pools, for pubs, for levelling up, for Malvern theatres and for childcare providers and nurseries. There is a lot of very good news for them today. The Chancellor has had some luck since November and he has shared that luck with UK households today. He has a clear intention to bring down inflation, to grow the economy and to reduce debt. May good luck continue to follow him, and may the extra billions of pounds he has secured for the defence budget help our Ukrainian friends have good luck and to beat back the Russian invaders. Slava Ukraini.”
“There are still cliff edges, taper rates and disincentives to work galore in our benefit and tax systems, whether they are around free school meals, childcare limits, child benefit tapers, tax-free childcare cliff edges and the withdrawal of the tax-free allowance. The very welcome measures announced today on all those fronts, and the pension cap abolition, will all be studied in detail by the Committee. We plan to work closely with our colleagues on the Work and Pensions Committee to find recommendations to smooth some of those cliff edges and distortions. The Chancellor can see how these cliff edges are disincentives to working more hours, and every hour of work should pay. We have made huge progress towards that today. At any stage in life, and at any age, people should be rewarded more the more they work.”
“The Treasury Committee looks forward to exploring all these issues in detail with our expert witnesses and with the Chancellor in our next evidence sessions, because the details really matter. The Treasury Committee has highlighted the new benefit cliff edges that my right hon. Friend introduced last November, when he announced that, next winter, only low-paid households will receive the £900 help with their cost of living. We asked for it to be spread over six instalments to reduce the risk of cliff edges. We are sorry to hear that a somewhat clunky computer system means there will be three instalments instead. We worry that, if a person loses their job just after the qualifying date, they will miss out on a lot of help.”
“The third economic policy of growing the economy in a non-inflationary way will involve all of us working more productively. The Stride review, named after my illustrious predecessor, has rightly focused on this key question. Many helpful measures have been announced in today’s Budget. With over 1 million job vacancies in our economy, we are still, as a country, working fewer hours than we were before the pandemic. Unlocking that human and economic potential is key to strong, productive, non-inflationary growth. The steps that have been announced today on childcare and on pensions will help to ease the labour shortages that are pushing up wage demands and help to counter those inflationary pressures.”
“It is good to see that they are being implemented because of better public finances, and that these tax cuts can be seen as consistent with the Government’s second priority of reducing debt. In our recent Treasury Committee report, we called on the Chancellor to think again about the fiction that lies behind fuel duty forecasts. Every year, they get embedded in the fiscal outlook, and every year Chancellors realise that it is not an ideal time to raise fuel duty. I welcome the fact that the fuel duty cut has been extended for another year and that, once again, the fiction has not been followed through into reality, but we need to think long and hard about why a tax that is inflationary, that harms growth and that is heading the way of the dodo, as we all move to electric cars, is still in the forecast numbers.”
“It is a tax paid particularly by the very poorest, who spend the highest proportion of their income on food and energy, so the Chancellor must not listen to the siren voices urging him to increase or abandon the inflation target that he gives to the independent Bank of England. The top priority for our economy this year must be to at least halve inflation. It is to be welcomed that in his Budget today, the Chancellor has tried to focus on measures that help to achieve that inflation target. The extension of the fuel duty freeze and the cap on household energy costs will all help to keep inflation almost 1% lower than it would otherwise have been. These might not feel like giveaways but they do cost money against the do-nothing counterfactual option.”
“What has changed most perniciously since the last Budget in October 2021 is inflation. It was only just beginning to rear its ugly head back then, and as a member of the Treasury Committee throughout this entire period, I have been like Cassandra in highlighting some of the inflationary risks that we faced. Far from being transitory, as the independent Bank of England hoped, inflation has become quite deeply embedded in the UK economy in wage inflation and in expectations. That is why I welcome the news today that the OBR is expecting inflation to go back down to 2.9% by the end of this year. Inflation is the worst tax that we have on our economy.”
“Our world-leading NHS vaccination roll-out has ended the severe contagion of the pandemic, but Putin’s evil and illegal invasion of Ukraine has sparked the worst inflation for 40 years. The challenges that those events have placed on the public finances have been extraordinary, and the spending cannot all be borrowed and passed on to the next generation. That is why I welcome today’s news that the Chancellor is forecasting 3% lower debt in years to come. The Treasury Committee welcomes the fact that the Budget is accompanied by forecasts from the Office for Budget Responsibility. We think it is important that that stands alongside a Budget. It is a key part of the independent framework for Chancellors and we will be taking evidence from the OBR next week on the underlying assumptions behind its forecasts.”
“Thank you very much, Madam Deputy Speaker; it is wonderful to have you back in the Chair. After that torrent of socialist declinism from the Opposition, I want to start by saying how lucky we are to have a lucky Chancellor. He has been lucky this winter because the weather has been a lot warmer than it was when he stood here in November, and as a result the price of energy has come down. But he has also made some of his own luck. Thanks to the steps that he took, the financial markets have stabilised and he has had to pay less in interest than he was expecting to—about £4 billion. It is hard to believe that this is the first official Budget we have had in this Chamber since October 2021. A lot of things have changed since then.”
“Finally, given that other banks have collapsed in the US—other small banks, including one that specialised in crypto—does he think that crypto is in any way contributing to financial instability?”
“May I put on the record my gratitude to the Minister, his colleagues and officials, and to people at the Bank and in the City in general, who have obviously worked flat out all weekend to deliver what turns out to be the best possible outcome in these difficult circumstances? On the importance of the sector to the UK economy, did the Minister and the Bank treat this situation any differently because of the sector in which SVB was operating, or would they have tried for the same sort of solution for a bank in any sector? Was the Minister as concerned as I was about reports that investors required the firms that they were funding to put money into the bank as a condition for investment?”
“The Treasury Committee recently published a report titled “Fuel Duty: Fiscal forecast fiction”, because we do not think the Chancellor will really be able to raise fuel duty by 12p, as is currently baked into the Office for Budget Responsibility numbers. Will the Chancellor be able to respond to our report before the Budget?”
“The Treasury Committee has opened an inquiry into crypto, and this morning we had a session at which the chief executives of the major high street banks appeared before us. The real question we wanted to ask them was why they have been paying our constituents so little on their savings since the Bank of England started to increase rates. Is not the logical conclusion of the consultation process that my hon. Friend has opened today that each of us should be able to hold a digital currency account at the Bank of England, and to earn the Bank rate on our holdings and disintermediate the entire banking sector?”
“I cannot see the Chancellor coming to the Dispatch Box on 15 March and increasing fuel duty by 12p—I would be astonished—because the temporary one-year reduction of 5p will expire and there is the cumulative impact of the ratchet over the years. I just wanted to highlight that there is some element of a work of fiction in the Office for Budget Responsibility forecast. It would be healthier for all concerned if a more realistic approach could be taken to the forecast for fuel duty not just in the short term, but in the medium term, because I think we all recognise that there will have to be a change, as more and more people are buying electric cars, in how we tax transport and drivers. I also wanted to publicise how our Committee has come together on a cross-party basis to make that point.”
“Again, this practice goes back many Chancellors and many Governments, and it is about putting into the projections for future tax revenue a ratchet up every year of fuel duty, yet for the last 12 or 13 years, every Chancellor coming to the Dispatch Box has decided not to implement it. It would be astonishing—I note that the Chief Secretary gave me a little cheeky smile—to see what is currently projected for fuel duty in the Office for Budget Responsibility forecast, which is for an extra 12p to go on to fuel after the Budget if the Chancellor does nothing. I think we can all agree that that is fiction.”
“A Chancellor can certainly make an argument about why they may take issue with some of the elements going into the forecast, and there is often a more dynamic quality to tax revenues than is perhaps put into some of the external forecasts referenced this evening. A Chancellor can certainly have a debate about the numbers, but we do need to remind ourselves of the importance of this process and its external nature. The other point I want to raise is about the fiction, which the Treasury Committee highlighted in one of our recent reports, that clouds the Office for Budget Responsibility forecasts for fuel duty.”
“In fact, I did not hear any suggestions at all for solutions to the criticisms that he raised. This evening, I reiterate, for those who were not here in early 2010, the rationale for the setting up of the Office for Budget Responsibility. It was because, in the Treasury of 2008, 2009 and early 2010, it was far too easy for the Government simply to make their own forecasts and to mark their own homework. I think there is merit in having someone external to the Treasury and oblivious to ministerial pressure come up with a set of forecasts. We all acknowledge that none will be perfect, or have perfect foresight about the future, but that externality means there is a way of marking the Treasury work and the Treasury projections.”
“Thank you very much, Mr Deputy Speaker, and may I associate myself with those passionately expressed words from the Chair? I did think there might be a few more people here this evening to talk about the charter for Budget responsibility, after we have had so much debate across the country about the Office for Budget Responsibility and its forecasts over the last year or so. This was the year when the Office for Budget Responsibility made it into the headlines on numerous occasions, so I thought there might have been a bit more of a heated debate. I listened to the words of the right hon. Member for Wolverhampton South East (Mr McFadden), and I am not sure I understand at the end of his speech whether the Opposition are in favour of tonight’s motion and of the charter. I am not sure whether they are in favour of Budget responsibility.”
“Will the Minister take this opportunity to reflect on last year when, despite the headwinds of the coronavirus, the invasion of Ukraine, huge hikes in energy costs, rising interest rates and high inflation in this country, UK businesses managed to generate more than 4.1% of economic growth—twice that of the United States, 25% higher than China, and higher than the eurozone?”
“The hon. Gentleman is making a typical, anti-aspirational socialist rant straight out of the book called “Politics of Envy”, but he is not actually speaking to the motion on the Order Paper. Why has he put “28 February” in that motion when he could just wait for the Budget on 15 March?”
“On a point of order, Mr Deputy Speaker. Is it in order for the Opposition spokesman to be talking in such general terms about a wide range of things, without actually addressing the motion on the Order Paper?”
“I hope that the data still show the good impact and powerful value for money that that funding produces, and that the UK can therefore lead on that important work and crowd in other countries to contribute to it. To conclude my brief remarks on this incredibly important subject, I again thank my right hon. Friend for securing the debate. On behalf of my constituents, I also thank the Minister for the work the UK does to make the world a safer, healthier and more prosperous place by investing in education—not just in this country, but in countries that cannot afford to educate all their children. I urge the Minister to look particularly favourably on the work that is done for children in refugee situations by Education Cannot Wait.”
“It is not just girls in Afghanistan, but millions of children in countries all around the world—including our own—who are missing out on education. It is particularly difficult to educate children in refugee settings, which is why I commend the work I saw at first hand when I was the Minister responsible for that budget in the international sphere. The work done to help children get an education is often delivered very rapidly by Education Cannot Wait, and I want to highlight the opportunity for the UK to continue to show its global leadership in this area with the upcoming replenishment of the Education Cannot Wait budget. I am sure the Minister and her officials will be carefully studying the results that Education Cannot Wait has delivered in settings around the world.”
“The up-front lump sum gets paid to the school that receives the child, but if they are there for only a little while, the money does not go any further. The Minister will probably not be able to respond today, but will she commit to write to me about how that could be better tackled in the system? I endorse the points that were made about those poor girls in Afghanistan. There is not a day when I do not think about how terribly they are suffering from not being allowed to go to school. The medieval cruelty of the Taliban regime in preventing their daughters from being educated is appalling. We must speak out about it whenever we can, because it is only by keeping that focus that we can ever hope for the situation to change.”
“I thank all the families in Worcestershire who have been so good about welcoming refugees from Ukraine into their homes. We are proud to have welcomed 1,000 Ukrainians into Worcestershire, and half of them are children who are being educated in our local schools. I thank the families, but I also thank the schools and teachers for welcoming those children into our educational settings. I have a point for the Minister to take back to her colleagues at the Department for Levelling Up, Housing and Communities. There is rightly a payment to the school when it takes in a Ukrainian refugee child. If the child moves to another school after a short period of weeks, that payment does not follow them, and that has led to a few problems.”
“Regrettably, I had to hand on those responsibilities when I was given the honour of chairing the Treasury Committee. I am delighted that my right hon. Friend has embraced the opportunity that those marvellous groups offer to champion this important cause. In my right hon. Friend’s powerful opening speech, we heard about the important ways in which enabling every child in the world to get a quality education could make our future so much brighter. Growing the world’s economies, making sure we are all healthier, and helping to tackle climate change are all powerful and provable implications of ensuring that every child gets a good education. I will focus on those—particularly refugee children—whose education suffers because they have to flee conflict.”
“It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my right hon. Friend the Member for Chelmsford (Vicky Ford) on securing the debate. I thank her for making it possible for hon. Members who are passionate about this issue to make the case for every child in the world to have 12 years of quality education. Nothing could be more important, and nothing is less politically controversial, but because we all agree how important it is, it does not get enough debate in this place. That is why I am so sincere in my congratulations to my right hon. Friend. Over the last few years, I have had the privilege of chairing the all-party parliamentary group on global education—more recently, I have been co-chairing it— and I was also a co-founding chair of the International Parliamentary Network for Education.”
“Will my right hon. Friend commit to writing to the Secretary of State for Levelling Up, Housing and Communities to make the point that the money for Ukrainian refugee children in the UK, which I believe comes from the official development assistance budget, is not necessarily following that child if they move to a new school?”
“Although we cannot discuss a specific case, “Wagner Group” is written on the Annunciator and I wanted to add a further question about the regime that we are operating within the Treasury. I urge the Minister to go further than he committed to doing in response to my hon. Friend the Member for Rutland and Melton (Alicia Kearns), the Chair of the Foreign Affairs Committee, because the Wagner Group is clearly such an evil organisation and what it is doing in Ukraine and across north Africa is so evil. Will the Minister today, from the Dispatch Box, ask OFSI officials to have a red flag system whereby anything related to the Wagner Group is flagged up individually to the Minister responsible?”
“I know that the Minister is as keen as those of us who have signed this amendment to see a fee established that will ensure that the regime at Companies House has sufficient resources to manage the budget. We know that software upgrades cost money and, as we all experience rising economic crime in this country, it is important that we do everything we can to ensure that Companies House has the resources to undertake this important work.”
“I acknowledge that we do not want to set a fee at a level that could act as a deterrent to anyone starting up a small business, but the work that we did last year in the Committee suggested that the current levels of fees, benchmarked against international comparators, were very low. It was clear that we needed more resources to enable us to understand the identity of those who are establishing businesses in this country, so we pulled a number out of thin air. I acknowledge that the figure of £100 was pulled out of thin air, although I think we probably also got evidence recommending it, but I think it is a reasonable and plausible amount at which to start these discussions.”