Rail Connectivity

Bambos Charalambous Excerpts

Friday 19th January 2018 Commons Chamber

[Jo Platt]

My hon. Friend is absolutely right. This is not just about my area; it is about connections to all our towns and cities, particularly in the north.

It is outrageous that the Government have only given TfN the powers to prepare a strategy and provide advice, and no power to implement such a strategy. That power still lies with the Secretary of State. Labour would give TfN those powers, but the Conservative Government are treating the north with characteristic contempt by failing to match our offer. However, within the detail of TfN’s plans, I was pleased to see Leigh listed as a major economic centre in the middle of four strategic corridors. The Government’s lack of support for TfN has hampered its ability to set out detailed transport plans, but I hope that when those plans arrive, they will lead to the transport improvements that we need in Leigh.

I have also received a letter from Transport for Greater Manchester this week stating its commitment to review the current lack of rail connectivity in Leigh, which I also welcome. However, following meetings with both TfGM and TfN recently, I have identified two key problems with the relationship between our regional transport bodies and the Government. First, I am concerned that investment from the Government is based on responding to growth rather than creating it. We cannot continue with this failed approach to investment that focuses on areas of existing growth without preparing our towns for the economy of the future.

Secondly, as I will discuss later, the Government are failing in their obligation to adequately fund these bodies. Therefore, TfN’s 30-year plan must ensure that our post-industrial towns are carried with the growth of our northern cities. Leigh was at the heart of the first industrial revolution, and we must now act to ensure that its residents are not merely spectators in the so-called fourth industrial revolution.

Poor rail connectivity is also having a direct impact on social mobility in our towns. The Social Mobility Commission recently concluded in its “State of the Nation” report that the

“worst performing areas for social mobility are no longer inner city areas, but remote rural and coastal areas, and former industrial areas”.

These outer towns such as Leigh are becoming ever more disconnected from our booming cities, and the commission subsequently placed Leigh in the lower rank of constituencies.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

In my constituency, the extension of the London underground to Cockfosters allowed the area to flourish almost a century ago. Does my hon. Friend agree that transport connectivity is vital for social mobility and essential if an area is to grow and flourish?

[Jo Platt]

My hon. Friend is absolutely right. We are naming transport as one of the key indicators for social mobility. There are obviously many others, but transport connectivity is much needed.

Infrastructure is letting down the young people of Leigh. Despite their dedication and hard work, they are struggling to gain the necessary education, skills and employment to remain competitive. They are being let down, and to realise why we only need to read Alan Milburn’s letter of resignation as chair of the Social Mobility Commission. He wrote that the Government

“is understandably focused on Brexit and does not seem to have the necessary bandwidth to ensure that the rhetoric of healing social division is matched with the reality. I do not doubt”—

the Prime Minister’s—

“personal belief in social justice, but I see little evidence of that being translated into meaningful action.”

There is no greater example of this than Leigh, which is in urgent need of investment today—not after our Brexit negotiations or in 20, 30 or 40 years’ time, but today. For the young people growing up in outer towns, we are talking about their futures. There are simply no second chances for them. Unless we act urgently to improve our nation’s connectivity, we are at serious risk of leaving behind a forgotten generation of young people who are unable to access the employment and education opportunities offered in our cities.

That brings me on to the specific transport situation that we face in Leigh. As a thriving town situated between Manchester and Liverpool, with nearby Warrington and Merseyside providing key employment and educational opportunities, transport is clearly critical to my constituents, and yet our town has no rail connectivity whatsoever. Indeed, we are the fifth largest town in the country with no rail connectivity.

It would be remiss of me not to mention the recent transport investment that Leigh has received. The guided busway into Manchester has proved to be a superb project, exceeding expectations, reducing journey times into Manchester and proving the importance of strategic investment into our town. However, the busway does not assist those travelling to work outside the city. For example, one constituent got in touch with me this week to tell me that his journey to work, which takes 40 minutes by car, is a two and a half hour journey by bus. Another constituent, Lynn, highlighted the impact on businesses, saying that if a customer wants to visit her shop from further afield by train, they get put off by having to use the bus for the final leg. The impact is felt not only by our young or our businesses. Cuts to public transport and the process of deregulation of our bus services have a huge impact on our most vulnerable and older people, and that impact cannot be overstated.

Rail connectivity cannot be happen on its own. There must be seamless integrated connectivity with road networks, cycle lanes and other public transport. Reducing congestion, noise and air pollution is also an important aspect of addressing detrimental health outcomes in our less-connected towns. While Leigh is an amazing constituency in which to live, perfectly situated as it is between many northern cities, a great place to bring up a family with its good and outstanding schools, and the fertile ground for businesses to invest, without efficient and comprehensive transport connectivity we are being held back. We are restricting business and economic growth, employment opportunities, and the life chances of our young people. Now is the time to act because, despite the Government’s best efforts, the northern powerhouse cannot succeed unless our towns are positioned as the engine of northern growth.

I anticipate that the Minister will respond by placing the weight of responsibility on regional transport bodies in the north and will insist, rightly, that it is for local bodies to determine the transport needs for local areas. However, the Government have not been funding those bodies adequately to allow investment in the medium to large projects that will mark the much-needed step change in our transport connectivity. Passing the buck to regional bodies, without giving them the resources to deliver, shows exactly how this Government treat the north: without any concern or ambition for the region to succeed.

When talking about the north’s transport woes, the Government must understand that the Opposition are not talking about an extra bus here and a new route there—that simply will not cut it. If the Government are serious about putting the passenger first, they must transform how they invest in all infrastructure, creating seamless connectivity. We need a total revolution in our approach to transport and infrastructure spending. We need the Government to commit to prioritising areas of poor social mobility and to invest in their infrastructure, bringing their local economies into the 21st century and making sure that no town is left behind.

Public Sector Pay

Bambos Charalambous Excerpts

Monday 4th December 2017 Westminster Hall

[Bambos Charalambous (Enfield, Southgate) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend the Member for Warrington North (Helen Jones) for presenting the petition in this debate, and I declare that I am a member of the trade union Unison.

Before being elected to represent my constituency in Parliament, I worked for a local authority and, along with my colleagues, was subject to the pay cap. Since the election, I have been contacted by many of my constituents who work in our essential public services and are struggling to make ends meet. They provide the services that keep our society going. One of my constituents emailed me recently and said:

“I am a highly skilled professional, and yet my pay packet does not reflect this…The Westminster Government’s public sector pay policy has eroded my salary year on year and caused me considerable hardship, including having to move out of the family home for 4 years to make ends meet…Many of my colleagues have left the profession and low pay and other poor working conditions, including excessive workload, are deterring new entrants.”

It is a travesty that we are seeing poor pay and conditions result in people leaving the public sector jobs they love. Local government has huge statutory responsibilities and our local government workers are carrying out necessary, vital and admirable duties in ensuring that our communities are healthy, educated, housed, cared for in old age and living in a clean and safe environment. As the savage and ongoing cuts that local authorities have faced since 2010 have resulted in redundancies, those still working for local authorities are not only enduring unprecedented workloads but, to add insult to injury, are seeing their pay capped, which is in effect a massive pay cut for them.

As in all our public services, the fact that those workers and their families are struggling makes it clear that the Government are failing in their economic and moral arguments, and are oblivious to what makes society flourish. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) pointed out, most public sector bodies are the biggest employers in their borough, town or city, and the knock-on effect of the pay cap affects the local businesses that serve the local workforce. As my hon. Friend the Member for Warrington North referred to in her excellent speech, in the House of Commons Chamber we hear many platitudes from Government Members, praising the work of our public sector workers, but that pat on the back does not put food on the table, keep a family sheltered or give dignity to workers.

[Patricia Gibson]

The hon. Gentleman is correct that we often hear platitudes and warm words from the Government about how valued the public sector is; a number of people have alluded to that fact. Is he, like me, deeply bewildered and alarmed at the fact that today we hear not even platitudes—nothing but silence?

[Bambos Charalambous]

The hon. Lady is absolutely right; the silence is deafening.

[Danielle Rowley (Midlothian) (Lab)]

With more and more children falling into poverty, many of them in working households, does my hon. Friend agree that the Government need to think now and address work inequality and income inequality, and that scrapping the public sector pay cap would be a great place to start?

[Bambos Charalambous]

My hon. Friend makes an excellent point, and I agree 100% with what she has said: ending the pay cap would be a good start to addressing inequality.

Decent pay for a hard day’s work is an easy concept to grasp, but it does not fit with the Government’s view that austerity and stripping the state to the bone are the only way to ensure that privatisation happens hard and fast. Just over a week ago, the Chancellor had a big opportunity to ensure that public sector workers got the pay they richly deserved, but once again the Government showed their true colours and would only consider increasing pay for nurses, and nurses only, if it was linked to negotiation on their terms and conditions. It is shameful that the Government expect people to negotiate away their terms and conditions in order to get the pay rise they deserve.

The Government must put an end to the public sector pay cap with a fully funded real-terms pay rise for all those working in our public services. As my hon. Friend the Member for Crewe and Nantwich (Laura Smith) eloquently put it, we cannot afford not to lift the pay cap. Public sector pay increases generate tax revenues, reduce social security expenditure, inject extra value into the economy and create jobs. Unison research suggests that every 1% increase in public sector pay generates between £710 million and £820 million in increased income tax, national insurance and tax receipts, and means reduced spending on benefits and tax credits. It also adds between £470 million and £880 million to the economy and creates between 10,000 and 18,000 jobs. The Government need to scrap the cap, and do it now.

Tax Avoidance and Evasion

Bambos Charalambous Excerpts

Tuesday 14th November 2017 Commons Chamber

[Sir Vince Cable]

I think I was in political exile at that time so I cannot testify one way or the other, but I was in government when we introduced much stronger anti-corruption measures in 2011.

As far as the register is concerned, the argument that the overseas territories and Crown dependencies advanced was that they had to keep information secret because of privacy concerns, but precisely those same privacy concerns applied to the UK. Where there was a genuine concern about privacy—for example, when people were worried about being pursued by animal rights terrorists—that has been protected, so that was a transparent and weak defence. Many things that the overseas territories do are, in fact, perfectly reasonable. There is no reason why people should pay double taxation, but serious anti-avoidance activity should be pursued.

I hope that the Government will now be much more aggressive in pursuing the issue of the open register. They could give the overseas territories a deadline for the introduction of an open register. If the overseas territories do not comply, a series of sanctions could be introduced—for example, initially stopping companies registered there bidding for public contracts. Of course, the ultimate sanction is what happened in the Turks and Caicos Islands in 2009, when there was direct rule. If overseas territories egregiously avoid taxation in a way that seriously damages the UK, that is the kind of measure that should be introduced.

Much of the discussion we have had—the right hon. Member for Barking said this in her introduction—is not about individuals but about companies, because the scale of avoidance is much greater.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

Will the right hon. Gentleman give way?

[Sir Vince Cable]

I have limited time.

We are all familiar with the way in which some of the big internet platforms avoid large amounts of taxation simply by manipulating prices and by the way they account for intellectual property liabilities. The Government’s response has, frankly, been very weak, and it is significant, in the light of the current Brexit debate, that the one institution that is seriously going after those companies is the European Commission. Margrethe Vestager’s actions in the Competition Commission are highly competent and effective, and many of us worry that, if Brexit happens, all that energy will disappear.

I have one practical suggestion—a very simple thing the Government could do—to deal with corporate tax avoidance. It is a simple regulation that would require large companies registered here to declare, first, their total UK revenues and then their total UK expenses. It would then be immediately apparent whether there was a tax liability that had not been met, and a simple levy in lieu of tax payment would bring some of those companies to book in a reasonable way.

Let me make one final point. The reason there is so much indignation about this question is not simply that tax is being avoided, but that many of our constituents are being aggressively pursued for tax avoidance at a much pettier level. At present, a big crackdown is taking place on what are called IR35 companies. These are contractors for the health service, and they are often software specialists. There is undoubtedly a certain amount of tax avoidance in relation to national insurance, but these companies are being pursued in a highly aggressive way that the Government do not use in pursuing much bigger fish. We are now being told that the VAT tax threshold could be considerably lowered in the Budget to stop tax avoidance, but that would effectively draw a large number of small companies into the tax net. It is the pettiness of such measures, contrasted with what happens on large-scale avoidance, that attracts so much ire and anger from the public.

--- Later in debate ---

[Stella Creasy]

I will not give way at this point, because I have only two minutes left.

Nine offshore infrastructure companies own between 50% and 100% of the equity in 335 PFI companies, which account for 45% of all projects. Twelve companies have equity in 74% of all current projects. At this point, we do not know what tax is being held overseas as a result—tax that was part of the PFI value-for-money assessment. These papers reveal how that happens. Secondly, on avoidance of capital gains tax, these papers reveal that Blackstone avoided stamp duty and capital gains tax on UK commercial property to a value of around £66 billion.

These are all choices. At the end of the day, we know that the lawyers involved are like water moving towards the sea—they will follow the easiest route. The problem here is politicians, not lawyers.

[Bambos Charalambous]

Does my hon. Friend support country-by-country reporting, which will help some of the most deprived parts of the world?

[Stella Creasy]

Absolutely, and I concur with all those who have raised that.

We can take action in this House. Specifically, new clause 2 to the Finance Bill—as my right hon. Friend the Member for Don Valley (Caroline Flint) said, many of us brought forward proposals—looked at the tax loophole relating to capital gains tax on commercial property. I will take no lectures from Conservative Members about how wonderfully this Government are doing on tax avoidance, when, just two weeks ago, they voted down a measure that would have brought in £6 billion a year to our Exchequer and given British businesses a level playing field. The Paradise papers show exactly why there is a problem, and I have mentioned £66 billion of capital gains tax and stamp duty that we are not getting because companies are registered overseas.

Nor will I take lectures from the Minister about loans, given that he passed in the Finance Bill a measure to reduce the share relief that PFI companies can claim on their loans. Those companies own millions of pounds’-worth of our public sector, and are able to trade off the interest that they pay on those loans in overseas companies, but the Minister has just passed an amendment that will make sure they do not even have to pay any tax on that. Those companies can comfortably be held overseas so that we will not even see what is happening.

In the minute I have left, therefore, I want to make some simple proposals. As my hon. Friend the Member for Enfield, Southgate (Bambos Charalambous) said, we absolutely need a public register. However, we also need a moratorium on all public investment in these companies until we know precisely what tax we are missing, and until we can be confident that these offshore companies are not milking the British taxpayer twice—by not paying their taxes and by getting us to pay them through PFI and public infrastructure investments. We must also close the loophole on capital gains tax on commercial properties as a matter of urgency. Nobody who faces cuts in their public services can allow that to continue for a second longer.

Finally, we need to rethink the decision to give PFI companies the tax relief that the Government have just given them. I hope the Minister regrets his actions, because, frankly, this is not about the Paradise papers; it is about parasites bleeding money from our public sector.

Paradise Papers

Bambos Charalambous Excerpts

Monday 6th November 2017 Commons Chamber

[Bambos Charalambous (Enfield, Southgate) (Lab)]

Will the Minister confirm what justification there was for voting against Labour’s amendments to the Finance Bill last week that sought to curb the number of individuals claiming non-dom status and improve transparency with regards to offshore trusts?

[Mel Stride]

If the hon. Gentleman is referring to the trust arrangements for those who become deemed domiciled as a consequence of this Government deciding to put an end to permanent non-dom status—something that his party never did in its 13 years in office—he will know that all is not quite as the Labour party presents it. Any funds coming out of such trusts will, when they are remitted, fall due to tax by the deemed domiciled individual exactly as they would for any other UK citizen.

Finance Bill

Bambos Charalambous Excerpts

Committee: 1st sitting: House of Commons
Wednesday 11th October 2017 Commons Chamber

[Bambos Charalambous (Enfield, Southgate) (Lab)]

One of the strange anomalies in our tax system over the years has been the framework constructed to enable non-doms to avoid paying tax in the United Kingdom. The outdated concept of tax exemption for non-doms, which I understand dates back to 1799, is not fit for purpose in the 21st century. It takes no account of the mobility of the rich and their ability to shift wealth across jurisdictions at the click of a button and of the fact that some non-doms can use tax havens to channel their income overseas so that they can avoid paying tax.

Let us be clear that the idea that the place of birth of a wealthy individual’s parents should affect how much tax they pay in the United Kingdom is nonsensical. The fact that the UK Government should play along with that by setting various inducements in the form of remittance charges of between £30,000 and £90,000 or via business investment relief is also very concerning, as is the potential lack of scrutiny into the non-doms’ affairs and background.

In 2014-15, 84,500 non-doms living in the UK paid the UK Government £9 billion in tax, or a total of £105,000 each. Considering the size of the wealth of some non-doms this is very good business indeed, as some offshore money is brought in to the UK for investment purposes and taxed at these knockdown rates but much of it will remain outside UK jurisdiction. The generous tax breaks given to non-doms do not apply to other UK residents and take for granted the many benefits of life in the UK and of London as a financial capital. Why would nom-doms who have lived in the UK for more than a decade, who perhaps send their kids to schools in the UK, carry out business in the UK and own property here, need further incentives via tax breaks to invest here? There would be an outcry if we gave non-doms a reduced rate of income tax or capital gains tax that was not available to ordinary UK tax payers, so why are we carrying on with this charade right now? The USA makes sure that residents pay tax on their worldwide income and seems to have little problem attracting people to New York.

A good business investment is a good business investment whether it gets tax relief or not, and let us not kid ourselves that the sweetener of business interest relief is anything more than a sugar-coated inducement for non-doms who have already made their money. It is clear that stringent tests are not even done to assess whether someone applying for non-dom status meets the right criteria.

People who are temporarily resident in the UK pay tax on what they earn in the UK, as do permanent UK residents. Everyone else should pay tax on their worldwide income. It cannot be fair to be giving better treatment to some people who have lived in the UK for most if not all their lives but who, because of some convenient accident, can elect how much tax they can be liable for. Any changes to this loophole are of course welcome.

I am sceptical about how much investment into the real economy any changes to the business investment relief scheme will bring to the UK. If the Government do not decide to abolish the whole concept of non-doms, they should not allow non-doms to keep their assets outside the jurisdiction if the overseas trusts were created before they were deemed domiciled, and the Government should clamp down on any tax avoidance from mixed funds brought in to the UK.

Ways and Means

Bambos Charalambous Excerpts

Ways and Means resolution: House of Commons
Wednesday 6th September 2017 Commons Chamber

[Mr Jones]

The problem is not only that the hon. Gentleman’s constituents have to live next door to those illegal dumps, but that there is the expense of clearing them up, which falls back on the taxpayer.

There is another widespread scam. This morning I tried to find the figure for the number of fires at waste transfer stations, but I could not. For the uninitiated, I will explain. Having been a chair of public health in Newcastle, I could bore on about waste: when waste is being transferred, it usually does not go straight to the actual site, but goes first to a waste transfer station where it is either sorted or graded into different things. The number of fires that occur at waste transfer stations is out of all proportion to the probability of that happening. The reason for that is that once there is just a pile of ash, there is nothing to dispose of. That is the problem, and, again, organised crime is involved in that.

We have had some instances in County Durham of the point raised by the hon. Member for Newark (Robert Jenrick). There are frauds such as those he describes—to be fair to Durham police, they have cracked down on some of the individuals concerned—but there are some people who have bought into this business. If we look back at what they did or how they got their money, we find serious questions about whether they should be allowed anywhere near the waste industry.

We all know why, for example, in the 1970s the mafia got control of waste in New York: because there is money to be made in it. It is the same in this country, but unfortunately we are not taking the robust approach needed to address that.

One of the issues is about who is responsible for that. The hon. Gentleman mentioned the Environment Agency. It is a good organisation in one respect; it is full of some very good and committed people, but they do not have the killer instinct to be enforcers. The agency needs to have a certain mindset and to take robust action, rather than just looking at the odd illegal site. It needs to closely monitor some of the existing organisations. Without that mindset and enforcement, this will never succeed.

This is also a matter that falls between the Environment Agency and HMRC. I give credit to Durham police for taking a lead in trying to get people together and for saying, “Look, wait a minute. We know that the people behind this are involved in x, y and z, which has mostly nothing to do with rubbish. It is to do with other serious organised crime.” The police have worked with HMRC and others and tried to concentrate on these issues.

I have a concern about HMRC’s approach to this problem, and the Minister might want to reflect on it. I shall not go into details because the case is ongoing, but when I raised one particular matter with HMRC, I was told that no enforcement action would be taken because the fraud was not worth more than £20 million a year. That seems like a lot of money to me. Another case that is ongoing at the moment involves fraud totalling £78 million a year. I wonder whether these decisions are the result of a lack of resources. I have spoken to a lot of the investigators in HMRC and I pay tribute to them for the work they do. Some of the people they are dealing with are very dangerous, and it is a complex matter to put these cases together. What we need in this country is a joined-up approach by HMRC, the Environment Agency and the police. I had a meeting earlier this year with the Minister for Security, the right hon. Member for Wyre and Preston North (Mr Wallace), to discuss where all this money goes. The amounts being generated are huge, and I have seen evidence that it is going into the drugs trade or other illicit organisations. That has an impact on society.

There are some things that could be done. As I have said, we need to adopt a joined-up approach—dare I say the Eliot Ness approach—and take a robust line on this. As the hon. Member for Newark has just said, the people who have to pay for the clear-up are the taxpayers. In many cases, that involves local authorities that are already under a lot of pressure. We need to adopt a hard-headed approach, and the Minister needs to look at the figure of £150 million. I think that the figure is way more than that.

Self-certification and the loss on ignition test just need to be binned. I know that there are pressures, and people have talked about cuts in HMRC—[Interruption.] Oh, there is more yet, don’t worry! The hon. Member for Chelmsford (Vicky Ford) is looking exasperated. What is needed is one single rate for landfill, whatever it is. That test is not enforceable; every shipment going into a landfill site would have to be tested. People have talked about leaving this up to the industry, and I am not besmirching the reputation or integrity of any particular party, but it is open to anyone who wants to do so to abuse the system. I therefore think that those tests need binning, and that we need one single rate.

People ask whether landfill sites could be monitored. Yes, we have the technology. I have raised the matter with the Minister’s policy people and asked whether we could have a system similar to those at weighbridges and slaughterhouses in which cameras can record how many vehicles are going into a site. In one case that I have examined, the owner was clearly not paying the landfill tax despite the fact that a ridiculous number of vehicles were going into the site. If we had people in Revenue and Customs checking these things, I think it would pay back very quickly.

The other thing is the checking of sites. The Environment Agency has responsibility for most of the checks, but I do not get the sense from HMRC that there is robust enforcement even when questions are asked. The right hon. Member for Loughborough (Nicky Morgan) raised the issue of retrospection. Can I suggest to the Minister, if he wants to get some back tax in, how he might do it? Once a landfill operator has finished with a site, it puts a cap on it, and that is the end of it. I have been told of an operator in the north-east that has done that, and I know from evidence I have seen that it did not pay the right tax. The question was raised with the Environment Agency and HMRC of how to make sure the right tax is paid. The easiest thing is to put a borehole through and check what is actually in there. If we did that on a few sites, I think we would find that what incurs the lower rates is not what is there. That is an important point.

In policy terms, as I have said to the Minister’s policy officer, we need to make the producers of the waste responsible for where it goes. At the rates that some waste collection organisations advertise, they could not possibly make a profit if they were paying landfill tax. The problem is that because local government and others are being squeezed, many local government organisations have got into bed with these operators because they charge the lowest rates, but they can do that only because they are either not paying landfill tax or paying it at the incorrect rate. The onus should be on large organisations to take responsibility for what happens to their waste; their responsibility should not end once the waste operator has taken it away. The rates being paid by quite a few public bodies in the north-east of England make one wonder how these organisations can be making any money, if they are paying landfill tax.

Operators are also making claims that are completely unachievable, such as 100% or 98% recycling of commercial waste, which is not possible. If that is the case and they are collecting at a certain price, what is happening to the 10% or 15% they cannot recycle? Its collection would be completely uneconomic if they were paying landfill tax. If HMRC had its eyes open and looked at some adverts, it would be thinking, “Wait a minute. There’s something wrong here.”

[Bambos Charalambous (Enfield, Southgate) (Lab)]

Does my hon. Friend agree that local authorities and the Local Government Association could play a greater role in monitoring the amount of waste going to landfill?

[Mr Jones]

Yes, I do, but the problem is that local authority budgets are under tremendous pressure, so they are going for the cheapest price. If somebody goes to them and says, “I can get rid of your waste for less”, what are they going to do? One council in Wales was trucking its waste up to the north-east. Can someone tell me, if the operator was paying the proper amount of landfill tax, how that could be economically viable? It cannot be. The onus is on local authorities to start asking questions about who they are contracting with.

There is also an issue with the individuals who can now operate licences. It does not take a genius to look at some operators who get involved in the industry and ask, “What is their experience? Where is the money suddenly coming from to set up a business?” This is fraud, but it is also an environmental concern.

Scotland has huge great policies about zero landfill waste and things like that, but the reason for that is very simple: the waste is coming over the border. Operators in Scotland are avoiding the cost of having to dispose of waste and of separating it at source, which the Scottish Government pride themselves on, by taking it to the north-east of England or anywhere else where things are cheaper. Parts of the UK are becoming Scotland’s rubbish tip because the Scottish Government have no control over where Scotland’s waste is going. There is some evidence that we may be making money through the landfill tax that is paid when it comes over the border, but I suggest that quite a lot of landfill tax is not being paid. That is the problem, and there are things that need to be done.

What the Minister would find if he spoke to the industry is that, behind closed doors, everyone knows that this is going on. It is no great secret. If he is going to come back with regulations later in September, I want them to be robust, because I have a niggling feeling that the policy people at HMRC see the problem as one that will go away of its own accord. In 15 or 20 years’ time, when we are no longer using landfill, we may not have large-scale problems, but we will have lost millions if not billions of pounds in the meantime and, as the hon. Member for Newark said earlier, many communities will have been blighted by unscrupulous operators. I ask the Minister to talk to the Minister for Security, because this is not just about waste, but about the cost to society as a whole.

When I asked the Minister whether the regulations would be published, I was not being provocative; I just want to see what they are and know what the process will be. The industry and others who have been involved should be able to react to them before they come into force. One simple thing that could stop a lot of fraud would be the ignition test, for example, so if the Minister lets me know when the regulations are coming up, I would be happy to meet him or even make some suggestions about the proposals.

I now want to change the subject entirely and talk about air travel. The resolutions include a commitment to look at air passenger duty. We have been promised reform for a long time—I looked it up this morning, and this matter has been raised at least since 2011. I do not want to be accused of raising problems relating to Scotland this afternoon, but air passenger duty is of great concern to the north-east due to the Scottish Government’s new air departure tax. That decision is entirely up to them as part of the devolution settlement, but the new tax will reduce air passenger duty in 2018, which will have an impact on regional airports such as Newcastle. As I say, that is no criticism of the Scottish Government, because they have the devolved responsibilities and can do that, but if they abolish air passenger duty altogether, that could have a devastating impact on those airports. Members from Northern Ireland have also made representations because the same situation applies there to Belfast International, Dublin City and City of Derry airports due to differential rates in the Republic of Ireland.

Why does that matter? The north-east of England is the poorest region in the UK with, sadly, the highest unemployment. Newcastle airport has been a success, for which I give credit to the local authorities that own it and their private sector partners. It sustains some 7,800 jobs, 3,200 of which are directly at the airport, but the knock-on effect throughout the region is also important. The airport brings some £57 million of tourism a year to the north-east, sustaining some 1,750 jobs.

London has four airports, so the economic impact of each is possibly not as great as the impact of an airport in a region such as mine. Regional airports provide connectivity for people who want to travel not only for leisure but for business—some £173 million of exports go through Newcastle airport each year, nearly £150 million of which go through just one airline. The Emirates flight from Newcastle to Dubai moves goods not just into the middle east but into the far east and Asia. The airport is important not only in carrying people but in supporting the region’s businesses.

At the 2015 general election the then Prime Minister, David Cameron, said that he would not allow regional airports such as Newcastle to be at a disadvantage if Scotland were to reduce the rate of APD. We all know what happened to a lot of David Cameron’s promises, so I will not hold the present Minister to that one, but it is important that the issue is addressed.

The Government could use APD more imaginatively. Obviously it was introduced for environmental reasons, but we all know that it is now a big cash cow for the Exchequer. If we had differential rates to try to encourage airlines to relocate to regional airports, it might help to reduce the overcapacity at airports in London and the south-east. It would also be a cheap way of regenerating regions such as the north-east.

The present rate of APD puts Newcastle airport at a disadvantage because, unlike London Heathrow, we have a relatively small number of business travellers. If we wanted to think creatively, we could introduce an incentive. I understand from the media that the new metro Mayor of Tees Valley made an election pledge to nationalise, reopen or somehow expand Teesside airport, which is a little ambitious. He may find that that election promise is difficult to translate into action. Again, if the APD rate goes down in Scotland and Newcastle airport is affected, trying to get any new flights to a place like Teesside will be virtually impossible. The issue is important to the north-east, and it is not just about passenger travel and tourism flights; it is about the broader economy. Our regional universities need access to international students, and a region where jobs have not boomed would be severely affected if the airport’s passengers leaked to Scotland.

Let me turn to small business and some of the issues raised earlier. I am not opposed to the use of new technology or to recognising that we have to change the way we do things. My party made mistakes when it was in Government by closing a lot of DWP offices and going directly to doing things by phone, which made it difficult for people to have interaction, and we are in danger of making the same mistake on tax offices.

A constituent who came to see me last year runs a one-person business. If she had a problem with her tax, she would drive to Durham tax office and meet somebody she knew, and they would explain the situation to her. I am not saying we should keep tax offices open just for that one person, but if we are going to go into the digital age—I have no problem with that, as it might be easier for some businesses—we need to ensure that we have either telephone access or dedicated processes whereby people can at least get assistance. I believe it was the right hon. Member for Loughborough who mentioned webchats, which are a way of doing this and are used by a lot of service providers. That needs to happen before any roll-out of the changes, because there is nothing more frustrating than not being able to get through. My constituent told me that when she eventually did get through, she got through to three different people. I do not know whether this could be done, but perhaps we could use a case-management approach, with individuals taking control of certain areas. People might think personal relationships between small businesses and their tax inspectors would be hostile, but in my experience they are not. If the relationship works well, it helps the business in terms of how it operates and it helps how HMRC can collect.

I now wish to discuss HMRC’s priorities. HMRC comes in for a lot of criticism, but it has a huge task to do. Even so, I sometimes wonder whether it gets its priorities wrong and I wish to give an example from my constituency. I have just spoken about the lack of enthusiasm for cracking down on landfill tax fraud, but an overzealous approach is taken to some small businesses. I have written to the Chancellor about a constituent of mine, Mr Marshall, who runs a bathroom business in Chester-le-Street. I have not yet received a reply, even though I have written twice—obviously, the Chancellor has been very busy. This is an example of where HMRC uses a sledgehammer to crack a nut. Mr Marshall and his family—it is a family business—have a showroom, where people can order and pay for a bathroom, and then they will organise everything that needs to be done. They do not employ anyone—they fit bathrooms, but they do not employ the plumbers, electricians and so on. Mr Marshall subcontracts the work to plumbers and electricians, and the client then pays them, as is common in the industry.

Last year, Mr Marshall had a visit from HMRC, which said that he is now responsible for the VAT payable by those individuals, even though he does not directly employ them, because they are small businesspeople. He freely admits to me that he does not use the same person every time; it depends on who is available. He is now being hit with a tax bill for some £24,000, which to a small, well-respected business is a little harsh. As I say, I have written to the Chancellor twice without receiving a reply. HMRC will not discuss this because it is under its veil of secrecy, as it always is, but I want to know why one person has taken it upon himself to deem that the VAT liability of these individuals—if there is one—should fall on someone who is procuring a service. If that is the case, and if I was regularly employing someone to do some work on my behalf and they went above the VAT threshold, would HMRC suggest that I, as the person employing them, should pay their VAT?

I would like the Minister to look at that case. As I said, I have tried writing to the Chancellor, without success. I am happy to email him the details and copies of the letters I have. I was going to say that such cases give HMRC a bad name, but that is not hard to do. No one likes to pay taxes, but the point is the disproportionality between a family business—this is not a multinational corporation—and the Googles of this world and the landfill operators that completely ignore the actual tax situation without any grievance falling upon them from HMRC. It is about proportionality in some of the enforcement. The new Chair of the Treasury Committee might want to look at how HMRC deals with small businesses. It is not only about the forms, but about what is facing my constituent. The process is time-consuming, but it can cause anxiety if someone suddenly has to find such an amount of money.

There is another issue I want to raise—I have moved on from rubbish; I am going to speak about cosmetic surgery. I tabled a parliamentary question a couple of weeks ago about the Government’s proposals for collecting VAT for cosmetic surgery. I have looked at the issue and got into the subject. I will not hasten to go through the whole issue of the regulation of cosmetic surgery, but it is another area I am pursuing.

--- Later in debate ---

[Bambos Charalambous (Enfield, Southgate) (Lab)]

Although any attempts to clamp down on tax avoidance schemes are welcome, I do not feel that the proposed measures go far enough or that HMRC has the capacity to go after corporations that have in the past paid less tax than their cleaners.

By 2021, HMRC is projected to have lost 34% of its staff since 2010, including those in departments dealing with the very largest corporations. That is a huge number, and with the big accountancy firms willing to take on former HMRC employees for their knowledge and expertise, is it any wonder that the tax-avoiding corporations are one step ahead of the game?

The Bill makes no reference to dealing with offshore tax havens, which, as we all know, are a popular device for avoiding tax wherever the profits have been made. That scam has been estimated to be worth £13,000 billion worldwide in avoided tax. Some of those profits will have been made in the UK, and some in other countries, including many developing countries. Oxfam has estimated that the cost of tax avoidance to developing countries is £78 billion. That money could go a long way to providing schools, healthcare and clean water, and it could actually save lives.

What is required is greater transparency and a mandatory requirement for public, country-by-country reporting on where profits have been made, so that multinational companies pay their fair share of tax along with everybody else and make a contribution to society in the countries in which they operate. It is estimated that unpaid tax could be worth as much as 16% of Government revenue in some developing countries. It cannot be right that multinational companies should be able to choose where they pay tax or whether to pay it at all.

In the UK alone, tax avoidance was estimated to be approximately £11.4 billion for the last fiscal year. It is scandalous that some of the corporations using tax avoidance measures in the UK benefit from having been granted lucrative Government contracts. At a time when public sector workers have to go to food banks to survive, it is hard to imagine a more insulting parody of fairness than greedy corporations directly profiting from the public purse, using every trick in the book to avoid paying tax.

At a time when there is massive underfunding of the NHS and schools, as well as of local authorities for the services they provide, we cannot allow half-measures to prevail. More needs to be done to secure the money for our much needed cash-strapped public services. Everyone knows that further investment in HMRC is needed to recover these large sums and that any additional staff who are brought in would, in effect, pay for themselves within weeks. More needs to be done, but action is needed right now, because these measures do not go far enough.

Public Sector Pay Cap

Bambos Charalambous Excerpts

Wednesday 5th July 2017 Commons Chamber

[Elizabeth Truss]

That is right. Future generations will pay for the services that we are enjoying today, and that is wrong. We need to live within our means and make sure that people are properly rewarded. We need to make sure that things are fair between the public and private sectors. That is what the Government’s balanced policy is achieving.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

My union Unison represents workers across the public sector. The hard-working nurses, teaching assistants, cleaners and local government workers in my constituency of Enfield, Southgate who are not subject to increments have been asking me when they will get fair pay for the hard work they do for all of us. Does the Chief Secretary agree with me and some of her colleagues that in the light of the increases in inflation and the cost of living, the public sector pay cap must end now?