David Gauke
Main Page: David Gauke (Independent - South West Hertfordshire)Department Debates - View all David Gauke's debates with the HM Treasury
(7 years, 10 months ago)
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Clive Lewis (Norwich South) (Lab)
8. What assessment he has made of which groups within the UK population will benefit from planned changes to (a) capital gains and (b) corporation tax.
The Financial Secretary to the Treasury (Mr David Gauke)
Changes to capital gains tax will provide greater incentives to invest in companies. Up to 130,000 individuals a year, including up to 50,000 basic rate taxpayers, are estimated to pay lower tax as a result of the changes to CGT. The further cut to the corporation tax rate to 17% announced at the Budget will benefit over 1 million companies, large and small, supporting UK companies to invest, grow and create jobs.
Clive Lewis
Treasury figures show that just 200,000 individuals will benefit from capital gains tax to the tune of £600 million in the first year—a giveaway of £600 million. On corporation tax, we have the lowest in G7—lower even than Saudi Arabia, Russia and China. At the same time, the Resolution Foundation found that the poorest 20% of families in this country will lose £565 over the course of this Parliament because of the Government’s policies. Where is the social justice in that?
Mr Gauke
One of the hon. Gentleman’s hon. Friends asked earlier about encouraging business investment, which we want to encourage because it is through having an environment in which businesses invest that we see improved productivity, the conditions for growth and people benefiting from higher wages. I say to the hon. Gentleman, and to the House as a whole, that pursuing policies that favour business investment and encourage businesses to invest, such as cutting CGT and corporation tax, is important for all our constituents.
Richard Burgon (Leeds East) (Lab)
In 2010, the Chancellor told this House that raising capital gains tax was necessary to
“create a fairer tax system.”—[Official Report, 22 June 2010; Vol. 512, c. 178.]
Given that the Chancellor is now cutting capital gains tax—overwhelmingly to the benefit of the richest 0.3% of people—what does he think has changed?
Mr Gauke
As I outlined a moment ago, the purpose of the tax measures is to encourage people to invest in businesses. The changes are specifically targeted at companies—the cut in CGT does not apply to residential property—and put in place an environment in which businesses can grow and prosper. That is absolutely the right approach to follow. I remind the hon. Gentleman that there are other countries that have taken different approaches, of which he has been full of praise. It is not quite working out in Venezuela, is it?
Barbara Keeley (Worsley and Eccles South) (Lab)
11. What steps he is taking to ensure that disabled people are not disproportionately affected by reductions in government expenditure.
Owen Thompson (Midlothian) (SNP)
14. What steps he is taking to improve tax transparency.
The Financial Secretary to the Treasury (Mr David Gauke)
The Government have played a leading role in driving forward international action on tax transparency. The introduction of country-by-country reporting has increased the transparency between multinationals and tax authorities, and we are pushing for this to be made public on a multilateral basis. We led the way throughout the development of the common reporting standard, which will see more than 100 countries automatically exchange information on financial accounts, and on a similar initiative for the automatic exchange of beneficial ownership information. We have consistently advocated for public registers of beneficial ownership, with the UK’s going live as of this month.
Owen Thompson
The planned closure of 137 HMRC offices has clearly been affecting employees, their families and communities. What steps has the Minister taken to look into introducing a moratorium on these closures, to support the wider work of improving tax transparency?
Mr Gauke
I commend the hon. Gentleman’s ingenious ability to raise this issue. It is important that HMRC’s funds are spent efficiently, to ensure that they are spent on delivering the tax being collected that we want, rather than on buildings. The savings from buildings are being spent on collecting more tax.
Nigel Mills (Amber Valley) (Con)
The Minister will have seen the different approaches that the French and UK authorities have taken towards cases such as Google’s. What more can he do to ensure that Parliament and the public have faith that HMRC is getting good deals in such situations? For example, will the National Audit Office be allowed to review those most high-profile cases and give some assurance that a good deal was achieved?
Mr Speaker
Order. Let me gently mention that we have already heard from the hon. Member for Newark (Robert Jenrick)—I remember very well his question, and I rather hope he does. It is one per session—[Interruption.] He can try again at topicals, but not in substantives.
Mr Gauke
Thank you, Mr Speaker. What I say to my hon. Friend the Member for Amber Valley (Nigel Mills) is that, some years ago, HMRC brought in an assurance procedure to ensure that all such settlements are properly scrutinised. HMRC is very confident that it has reached a fair and proper settlement with Google. It is worth pointing out that, in recent years, we have seen increases in revenue collected by HMRC and increases in yield from its compliance activities including from large businesses.
John McDonnell (Hayes and Harlington) (Lab)
If we are to tackle tax evasion and avoidance effectively we need to remain within the EU. Will the Chancellor and the Minister join me in calling on all MEPs to support the new anti-tax avoidance directive being voted on in the European Parliament tomorrow? Conservative MEPs abstained at the Committee stage, and this morning there are worrying noises that they may be thinking of abstaining once again. Will the Minister make it clear now that Conservative MEPs will be voting for the directive?
Mr Gauke
The anti-tax avoidance directive was discussed a couple of weeks ago at the ECOFIN meeting, which I attended. The UK made the case for us taking strong action and working through an anti-avoidance tax directive. What we suggested and proposed was taken on board. The matter will also be addressed at the ECOFIN meeting next week. The UK is pushing for progress and it is working co-operatively with other member states to ensure that we do make progress.
John McDonnell
I am mystified as to whether Conservative MEPs will be voting for the directive tomorrow. I just live in hope that they will. The European directive did show the value of European Union co-operation in tackling tax avoidance and evasion. As part of that co-operation, following the raids on Google’s Paris offices, will the Chancellor inform the House what arrangements are in place with the French authorities for sharing information from the raid? If new evidence comes to light, will the Chancellor stand ready to reopen his deal with Google?
Mr Gauke
The first point of which I must remind the shadow Chancellor is that all settlements are reached by HMRC. Operational matters are rightly for HMRC, and not for Treasury Ministers. Of course if there is new evidence, HMRC will take it into account. The position is that HMRC has made it very clear that, under the law that existed between 2005 and 2015, it believes that it has reached a settlement that ensures that the right amount of tax has been collected—and that is what its job is. Our job is to ensure that it has the tools and the rules, and that is what we are delivering.
Mrs Flick Drummond (Portsmouth South) (Con)
T1. If he will make a statement on his departmental responsibilities.
Martyn Day (Linlithgow and East Falkirk) (SNP)
T4. In Scotland, we have introduced robust anti-avoidance rules—they are among the toughest in the world—on devolved taxes. The Scottish National party has repeatedly called on the Chancellor to embolden compliance by guaranteeing that the beneficial ownership of companies and trusts is made public. Has he taken steps to assure the people of the UK that this progressive step will happen?
The Financial Secretary to the Treasury (Mr David Gauke)
The UK is bringing in a register of beneficial ownership for companies. On trusts, where there are tax consequences that will also be included. So, yes, the UK is leading on that, and we are pretty much the first country to do so.
Maggie Throup (Erewash) (Con)
T2. I have been contacted by a number of constituents who are having difficulty with this year’s online HMRC self-assessment system, particularly with the level of customer service they are getting from the helpdesk. Will the Minister look into this issue as a matter of urgency so that we can get a speedy resolution to the problems and ensure that my constituents are not penalised?
Mr Gauke
I would be very happy to meet my hon. Friend to discuss the specific points, but I would also say that the customer performance of HMRC last year was clearly not at an acceptable level. In the run-up to the self-assessment deadline at the end of January 89% of calls were getting through first time and the average waiting time was less than five minutes. That can be improved on, but we should note that it is a much higher performance than has been achieved in HMRC’s previous history.
Cat Smith (Lancaster and Fleetwood) (Lab)
T5. I note that the Minister has yet to respond properly to the shadow Chancellor’s question about the new anti-tax avoidance directive in the European Parliament, which is being voted on tomorrow. In light of Conservative MEPs’ abstention at the committee stage, will someone now confirm whether they will support it tomorrow?
Mr Gauke
Just to be clear, the text of the anti-tax avoidance directive has not been finalised. It was discussed at the ECOFIN meeting a couple of weeks ago and will be discussed again in a week’s time, on 17 June. It has not been finalised. What I can say is that the UK Government’s position is very clear: we want something strong and effective, and that is the case that we have been advocating in the Council of Ministers.
James Berry (Kingston and Surbiton) (Con)
T3. The devolution of business rates, allowing local areas to shape their own future, will be of a real benefit to my constituents in Kingston, who pay some of the highest council taxes in the country and receive one of the lowest Government grants in return. Will my right hon. Friend confirm when the first business rate devolution deals will be rolled out and whether Kingston can be at the front of the queue?