Spring Statement

Alan Mak Excerpts

Tuesday 13th March 2018 Commons Chamber

[Alan Mak (Havant) (Con)]

Fourth industrial revolution technologies are transforming and boosting productivity across the whole country, particularly in the small and medium-sized enterprise sector. As my right hon. Friend considers future spending priorities ahead of the Budget, may I urge him to continue and accelerate support for our entrepreneurs and innovators, who create the wealth of the future?

[Mr Hammond]

My hon. Friend is a tireless advocate of the technology that will fuel the fourth industrial revolution, and the important thing is that, while we are talking about it, this is actually happening across the country. These technologies are actually being used by large, medium and small businesses. They are not just something in the laboratory or the university classroom; they are actually happening in the factories and business parks across Britain, and they will transform the way we live and work.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 24th October 2017 Commons Chamber

[Andrew Jones]

I absolutely agree that broadband and digital progress are critical to the productivity of our economy. I am not aware of that letter. I will look into it with immediate effect, and I apologise for the delay.

[Alan Mak (Havant) (Con)]

As the fourth industrial revolution accelerates, superfast broadband will be key to the productivity of our high-growth technology businesses. Will the Minister continue working with entrepreneurs and businesses to ensure that they get the broadband system that they need?

[Andrew Jones]

I most certainly will continue to work on that. My hon. Friend has consistently spoken up on behalf of entrepreneurs and enterprise since he arrived in this House. The Government’s intention to pursue our broadband investment, whether it is superfast or full fibre, is right at the heart of our efforts to improve productivity.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 18th July 2017 Commons Chamber

[Elizabeth Truss]

We do take notice of what the independent pay review bodies say. We have just approved the recommendations of the teachers pay review body and of the nurses pay review body. Listening to their recommendations, the pay review body for the NHS said:

“We do not see significant short-term nationwide recruitment and retention issues that are linked to pay.”

We followed that advice and gave the pay accordingly.

[Alan Mak (Havant) (Con)]

Increases in the tax-free personal allowance since 2010 have put £1,000 into the pocket of each basic rate taxpayer, including those who work across the public sector. Will the Chief Secretary continue to help public sector workers to keep the money they earn, through lower taxes?

[Elizabeth Truss]

My hon. Friend is absolutely right. The worst thing that we could do is to support the Labour party’s policies, which would, according to the Institute for Fiscal Studies, lead to the highest levels of taxation in peacetime history.

Finance (No. 2) Bill

Alan Mak Excerpts

2nd reading: House of Commons
Tuesday 18th April 2017 Commons Chamber

[Nigel Mills]

Yes, and Ireland has found that that corporation tax rate has been successful in helping to attract investment. I noticed that throughout all Ireland’s financial crises and its desperate need for tax revenue, that rate was one thing on which it was not prepared to move, which is a sign of how successful it thinks it has been.

[Mr Alan Mak (Havant) (Con)]

I hope my hon. Friend will join me in sharing the sentiments of our hon. Friend the Member for Fareham (Suella Fernandes) and celebrate the fact that Britain will have the lowest rate of corporation tax in the G20. To come back to the point made by the hon. Member for East Lothian (George Kerevan) comparing Britain to the German economy, does my hon. Friend agree that although the British and German Governments spend a similar amount on research and development—around 28%—the big deficit is actually in private sector investment? If we are going to lead the fourth industrial revolution, which will be important to ensuring that our economy is strong, we need to get the private sector to invest. That is what the Bill will do.

[Nigel Mills]

I agree with those sentiments. If we are going to get into a debate about the German economic model, though, I should probably step out of the middle of it because it is not an area I have ever looked at.

There is a clause in the Bill on the Northern Ireland corporation tax and how we will make the lower rate there work. This is probably my chance to sneak in a remark, Mr Deputy Speaker: I hope we can get an Executive formed in Northern Ireland so that they can take the decision to have a lower rate of corporation tax. I suspect we probably do not need to rush that clause through the wrap-up, given the current situation, although I guess it is not controversial in Northern Ireland.

--- Later in debate ---

[Nigel Mills]

I was nearly finished, but the hon. Gentleman invites me into a debate on the tax gap. I do not have the numbers to hand, but it is important to understand what makes up the tax gap. Tax avoidance by large corporates is actually a relatively small part of it. From memory, the largest part is due to people who operate in the black market and do not pay VAT or declare their tax. Another large part is down to errors or mistakes by small businesses or individuals. It is right that the Government should bear down on all those aspects, but I do not think it is possible to get the tax gap down to zero—it would involve some kind of ridiculously heavy compliance burden. We could probably get there only by having zero tax rates or zero economic activity, so there will always be some level of tax that we cannot collect, but the measures that the Government have taken progressively over the past seven years to tackle aggressive tax avoidance have been the right ones. We have the general anti-abuse rule, which we are trying to tighten up in the Bill. When that gets to its five-year anniversary, I look forward to seeing whether we can change our strategy on targeted abuse rules, whether we might not need to have quite so many individual anti-avoidance rules, and whether we can rely on the general one.

Although we have discussed Making Tax Digital, a key part of reducing the tax gap is making businesses report and be more compliant on a more regular basis. We must press on with that and make it work, but we do not want to risk going too far. There are more measures that we could try to take to encourage people not to pay cash in hand to avoid paying VAT. It is very hard for an individual to know whether the person cutting their hedge or driving their taxi is tax registered. Perhaps we should have some kind of registration process so that a person can say, “I want to engage people who are fully tax compliant. If you can show me that you are, I will happily hire you. If you can’t, perhaps I will hire someone else.”

[Mr Mak]

My hon. Friend is making a very good speech about the changing nature of the economy, particularly in relation to the rise of the gig economy. Will he join me in welcoming the review by Matthew Taylor about how we can tax both the individuals and the companies operating in the gig economy to make sure that we strike that fair balance between taxation and innovation in our economy and our employment market?

[Nigel Mills]

Yes, I happily welcome that review. That has become an emerging issue that we need to tackle. It will probably blow up in the national insurance debate. I welcome the measures in this Bill, which propose that where the public sector engages with individuals who try to incorporate themselves, those individuals will not get the tax advantages. That has to be right. We need to find a way of doing that for very high paid individuals outside the public sector who try to do that. We need to ensure that they are taxed on that income in a way that the tax system intends, and not allow them to get an advantage through the corporation tax system. I accept that the reduction in the dividend relief that was announced in the Budget was the right thing to do. As we see our employment market changing, we need to ensure that the tax system is not encouraging unscrupulous employers to try to pretend that their employees are self-employed in order to get a tax advantage for themselves, leaving those individuals in a far worse situation without the security of being employed and without the rights to welfare, holiday, sick and maternity pay to which they are entitled. That review will be very important in enabling us to strike the right balance and to encourage people who are genuinely self-employed and taking risks. I accept that we should have a lower tax rate for people who do that. How we get our tax rules to match the changing way that people work will be extremely important, and that review will have an essential role to play.

I will wrap up my contribution by saying that I welcome this Bill and that, whatever passage it has, I wish it well.

--- Later in debate ---

[Dr Davies]

That is a very good point. A point has also been made about the flexibility to include information on labels such as the number of teaspoons of sugar in a product, which we are currently unable to do. A wide range of benefits could arise, which is interesting.

The soft drinks industry levy has a key role. Soft drinks are the biggest source of dietary sugar for children, but they contain little, if any, dietary benefit. Five-year-olds are believed to consume their own weight in sugar per year, and four to 10-year-olds each consume half a bathtub of sugary drinks per year. That is food for thought. The Scientific Advisory Committee on Nutrition and the World Health Organisation advise that free sugars should comprise less than 5% of daily energy intake; yet the estimated intake among our children is two to three times that figure.

The proposed mechanisms of the levy relate to producers and importers of packaged soft drinks with added sugar. The levy is designed primarily to encourage reformulation, as has been mentioned. The implementation date of April next year gives manufacturers time to pursue reformulation, and many have been doing an excellent job in achieving that. The levy drives manufacturers to reduce portion sizes and to market their low-sugar alternatives. It will be tiered, whereby 18p per litre is levied when the total sugar content of the drink exceeds 5 grams per 100 ml, and 24p per litre is levied when the total sugar content exceeds 8 grams per 100 ml. According to my mathematics, that is about 6p to 8p per can of drink. The levy will apply to drinks as ready-prepared or diluted as directed on the packaging.

The hope is that the levy will be passed on to consumers in the same proportion as applied. In other words, there will be no cross-subsidy. One concern raised by the Health Committee was that low or zero-sugar drinks might end up picking up some of the extra costs levied on manufacturers by their sugary alternatives. If that were to take place, it would be a missed opportunity to maximise the positive impact of the levy.

[Mr Mak]

My hon. Friend is making an excellent speech based on his personal knowledge and work as a medical doctor. Will he join me in encouraging children’s charities, such as Magic Breakfast, that play an important role in educating children about health eating and the avoidance of too many sugary drinks to redouble their efforts, and to use the sugar levy as a catalyst to do more work in the area?

[Dr Davies]

I will indeed. I will come on to the positive impact that the potential introduction of the levy has had on the general debate on sugar and obesity.

Coming back to the idea of cross-subsidy in terms of the cost of drinks, we, as a Government, should keep an open mind as to whether that needs to be regulated. The levy excludes fruit, vegetables and milk as a form of added sugar. It also excludes baby formulas, drinks for medicinal and dietary purposes, drinks comprising 75% or more milk, and small producers of under 1 million litres of beverage per year. The revenue raised is due to double the funding for PE, sport and breakfast clubs. It is expected that £1 billion will pass to the Department for Education for this purpose, with, of course, equivalent sums being passed to the devolved nations as per the Barnett formula.

The important thing to note is that, with successful reformulation, companies will pay no additional tax. It has been a mark of the success of the progress made with this policy that reformulation is already taking place, and it is therefore expected that in fact £1 billion will not be raised. I praise the Chancellor of the Exchequer for confirming that he will nevertheless pass on the full £1 billion in this Parliament for the purposes identified. Reformulation is possible—companies are already showing that. There has been success in the past with reformulation of products as to the amount of salt they contain. I mentioned before that this whole debate is causing a discussion throughout our nation about obesity and sugar, and that has to be a good thing. I hope that even this debate will help to further that.

Will such a policy work? There is no direct comparison, but in Mexico when a tax of roughly 10% was levied, it led to a 12% reduction in sugar intake, and in Hungary a 40% tax led to manufacturers reducing sugar content. A 2016 modelling study suggested that thanks to the levy 144,000 adults and children would be saved from obesity each year; that 19,000 would be saved from diabetes mellitus; and that the number of decayed teeth—270,000—would be reduced. We have certainly seen some tentative support among the public. I truly believe that in view of the scale and consequences of the obesity crisis, we do not have the luxury of time to make excuses. We can lead the world in this area and create evidence that other countries can then use and follow.

Money Laundering: British Banks

Alan Mak Excerpts

Tuesday 21st March 2017 Commons Chamber

[Simon Kirby]

I make it clear that I am not aware of any connection. It is right and proper that the FCA and the NCA have been watching that issue for some time. It is a confidential matter; if there is new information, I am sure they will consider it.

[Mr Alan Mak (Havant) (Con)]

Compliance officers across the banking sector play a key role in stamping out some of the behaviour that has been reported. Will the Minister assure the House that the FCA and other regulators are making sure that compliance officers are properly trained and are proactive on the ground?

[Simon Kirby]

I reassure my hon. Friend that that is the case. It is right and proper that the issue of money laundering is addressed from top to bottom. Everyone has a responsible part to play.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 28th February 2017 Commons Chamber

[Simon Kirby]

We want to ensure that British companies have the maximum freedom to trade and operate within European markets, and financial services are one of the areas in which we will be seeking a bold, ambitious agreement.

[Mr Alan Mak (Havant) (Con)]

As the Minister continues his discussions on passporting, will he ensure that he maintains a dialogue with business associations and trade bodies such as TheCityUK, to ensure that we get the best possible settlement?

[Simon Kirby]

I can reassure my hon. Friend that the Treasury is very much in listening mode. We definitely want the best possible deal and we are clear that it is the end result, rather than the mechanism, that is important.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 17th January 2017 Commons Chamber

[Jane Ellison]

Again, these are issues that we are looking at carefully; the Chancellor has had a series of roundtable meetings with different sectors and industries in recent months, as have all of us Ministers. We are looking carefully at what those detailed issues are. Of course, much more will be said on this and discussed in the House later today, but we are clear that we want to understand the detailed issues that businesses face so that as we move forward to make our future outside the European Union, we can resolve the practical issues that businesses will face in a way that helps the British economy.

[Mr Alan Mak (Havant) (Con)]

Access to capital is vital for small businesses in my constituency and across the country, and a refusal from a big bank should not be the end of the line. Will the Minister continue to support the bank referral scheme, which helps so many small businesses to access alternative sources of finance?

[Jane Ellison]

Absolutely we will. The Government’s finance platform referral policy helps small and medium-sized enterprises whose finance applications have been declined by their bank to explore alternative options. It requires the major banks to refer SMEs that are rejected for finance—with their permission—to finance platforms. We can do a range of other things to support the good point that my hon. Friend makes. I encourage all Members with SMEs in their area that have had finance applications rejected to refer them to some of these schemes, because they are making a difference.

Charter for Budget Responsibility

Alan Mak Excerpts

Wednesday 20th July 2016 Commons Chamber

[John McDonnell]

This is the slowest recovery in our history. The last time a date was put on it was 1066. The way in which we are recovering is on the basis of increased household debt, low incomes and insecure jobs. I do not think that any Government should be proud of that record.

[Mr Alan Mak (Havant) (Con)]

Will the hon. Gentleman give way?

[John McDonnell]

Let me just finish another paragraph before I give way again.

A new set of rules for fiscal policy is needed. I know that some Members have questioned the need for fiscal rules at all. During the discussions on the Fiscal Responsibility Bill in early 2010, I recall the right hon. Member for Tatton (Mr Osborne), who was then shadow Chancellor, saying that the Bill was a “completely feeble stunt” and the

“biggest load of nonsense that this Government have had the audacity to bring to Parliament in this Session”.—[Official Report, 5 January 2010; Vol. 503, c. 72.]

That was the then shadow Chancellor condemning Gordon Brown for having a fiscal rule. A short while later, when he became Chancellor of the Exchequer, he produced his own fiscal rule: the fiscal responsibility charter. He missed every target in his first charter, so he brought in a second one. He was on course to miss the targets in his second one, so he brought in a third.

--- Later in debate ---

[John McDonnell]

As always, my hon. Friend is spot on. We are on the same page as almost every organisation that has an interest in the economy in this country: the CBI; the Federation of Small Businesses; the British Chambers of Commerce; and the TUC. All of them are saying exactly as he has said.

[Mr Mak]

Controlling welfare spending has been a key element of this Government’s economic plan and has helped to make the fiscal charter a reality. How would the hon. Gentleman plug the black hole? Would he raise taxes, raid pensions or print more money?

[John McDonnell]

The problem with the hon. Gentleman’s contention is that we were told the way to control welfare spending was to introduce a welfare cap, and this was part of the charter. The Government have now breached that charter consistently and are forecast to breach it in every year throughout their Administration. The point I am making is that the fiscal charter is almost redundant now, because it is so ineffective. Housing benefit did rocket, but the way to control welfare is by building council homes again, so we are not pouring money into the pockets of private rented landlords.

--- Later in debate ---

[Mr Gauke]

There are those who will argue, in the light of Brexit, that we should not worry about borrowing and debt. They are usually—not always, and I certainly exclude the hon. Gentleman from this—the same people who have argued consistently for the past 10 years that we should not worry about borrowing and debt; it is the reasons that have tended to change. First, they argued that we need not worry about borrowing because the business cycle had been abolished and there would be no downturn, so that was all right. Then their argument was that we should borrow because we needed a fiscal stimulus, and then because gilt rates were so low. But with debt last year at almost 84% of our GDP, maintaining fiscal credibility must absolutely remain our priority. If we had not taken the measures we have on public finance over the past few years, we would be in a far worse position still. Analysis shows that from 2010 to 2020, if the structural deficit had remained the same we would have borrowed an additional £930 billion. That is a huge sum to add to our current debt total.

We have already set out our plans for finding departmental savings and in my new role I will be working closely with my fellow Ministers to make sure we stick to those plans. We have a strong record on delivering such commitments—we have done so every single year we have been in government, and we are not going to let up in our efforts now.

I am also determined to look at what further scope there is for delivering the value for money that the taxpayer deserves. I have spent the past six years working hard to make sure we get the tax revenues in, so am not about to see those revenues spent without delivering as much for our money as possible. I will therefore also take forward our work on finding further efficiencies across the public sector. That work was announced at the last Budget and I will be taking it forward straightaway, to explore all avenues for making innovations, finding reforms and saving time and money across the public sector.

This is without doubt a time of considerable uncertainty. That has its own implications for the current stability of our economy. We anticipated short-term turbulence in the event of a decision to leave the European Union, and that has been reflected in the economic developments that have unfolded. It is clear that we must pursue policies that help us grow in the future. That means pursuing pro-business tax policies, improving our skills and our infrastructure, and looking out to the world, enabling us to trade and benefit from globalisation, as there are real signs of opportunities ahead from such an outward-facing approach.

[Mr Mak]

I congratulate the Chief Secretary to the Treasury and the Financial Secretary on their promotions. Does my right hon. Friend join me in welcoming the Prime Minister’s proposals for infrastructure bonds, which will boost economic growth and give the country vital infrastructure?

[Mr Gauke]

My hon. Friend raises an important point about how the Government are doing all they can to support infrastructure in this country. As I said, we have a proud record on that, and an infrastructure pipeline worth, I think, £480 billion. We have taken steps to reform our planning system to help infrastructure, and established the National Infrastructure Commission. My hon. Friend is right to highlight the proposals set out by the Prime Minister in that area.

We can take measures to help improve infrastructure in this country, but all measures to help growth—whether our outward-looking approach to trade, our pro-business tax policies, or improving infrastructure or skills—can and must go hand in hand with the need to take our public finances seriously, and the Government will pursue that balanced approach.

What we hear from the Labour party continues to be unbalanced, and there is a failure to take into account the need for credibility with the public finances. Labour may have changed a lot of its personnel, but I fear that there is a degree of continuity in the failure to face up to challenges in the public finances, and the motion reflects that. I therefore urge the House to oppose the case for fiscal indiscipline that we have heard today, and to oppose the motion before us.

Surplus Target and Corporation Tax

Alan Mak Excerpts

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

The contingency plans that we had in place were joint plans of the Treasury and the Bank of England and require the authorisation of a Chancellor in certain aspects. Based on the assessment we made before the referendum of the different models available to the UK, we now have to make a decision about how we want to proceed as a country. I am clear that we want the closest possible economic links, so that vital industries—not just manufacturing, but financial services, which is important to the Scottish economy—are able to trade as freely as possible with our European neighbours.

[Mr Alan Mak (Havant) (Con)]

The UK is a world leader in the financial services sector, which employs hundreds of thousands across the country and contributes substantially to corporation tax receipts. Will the Chancellor continue to do all that he can to protect this vital sector?

[Mr Osborne]

Financial services is our largest private sector employer, and two thirds of its jobs are outside our capital city. It is a vital industry in the many different towns and cities of the United Kingdom. One of our key priorities is ensuring not only that our financial services industry continues to be a real success and that it is able to sell its services into Europe, but that we strengthen our links with other great global financial centres and economies. For example, becoming the offshore trading centre for the renminbi has been one of the real success stories of recent years.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 7th June 2016 Commons Chamber

[Greg Hands]

The hon. Gentleman is ignoring our amazing record on youth unemployment since we took office six years ago. Youth unemployment has fallen by 102,000 this year. Youth employment is up 94,000 over the year and is close to the highest proportion on record. On why the national living wage does not apply to those who are under 25, I remind him that the national minimum wage does apply to those who are under 25 and is increasing under this Government. For younger workers, the priority is to secure work and gain experience. Youth unemployment remains higher than the unemployment rate for those aged over 25.

[Mr Alan Mak (Havant) (Con)]

Since 2010, nearly half a million fewer children and young people are in households where there is worklessness. Will the Chief Secretary confirm that the Government will continue to help households into work and to cut poverty?

[Greg Hands]

My hon. Friend is quite right, and we will continue to take action in this space. The number of households where nobody had ever worked doubled under Labour. Thanks to us, youth employment is up 94,000 over the year and continues to rise.