Northern Ireland

Debate between David Gauke and Julian Smith

Thursday 5th September 2019 Commons Chamber

[Julian Smith]

I hope to table a motion for the statutory instrument early next week.

[Mr David Gauke (South West Hertfordshire) (Ind)]

It is clear from what my right hon. Friend is saying that if we have a no-deal Brexit and Stormont is not up and running, to protect the rights of Northern Ireland, we need to take powers; to take powers, we need to legislate; and to legislate, the House needs to be sitting. Is it not also clear that if the House does not pass that legislation by the end of October because it has been prorogued or dissolved, the rights of the people of Northern Ireland will be detrimentally affected?

[Julian Smith]

Again, the priority has to be getting Stormont up and running. I have been honest and open to the House about the need for powers, and clearly my right hon. Friend is right that at the very heart of the need for those powers are the rights of citizens in Northern Ireland.

Future Government Spending

Debate between David Gauke and Julian Smith

Wednesday 4th March 2015 Commons Chamber

[Mr Gauke]

If the Labour party will not meet our spending plans and is going to borrow more—it is giving itself more wriggle room, even though it has signed up to the charter, which commits it to £30 billion of fiscal consolidation—where is the money coming from?

[Julian Smith (Skipton and Ripon) (Con)]

Small businesses across north Yorkshire are really worried about the fact that Labour has not yet ruled out a jobs tax, should it be elected. Are they missing something?

[Mr Gauke]

That is the key to the matter. The truth is that there will be either a tax bombshell or a borrowing bombshell if the Labour party is in office. It fought the last general election campaigning for an increase in the jobs tax. I have a strong suspicion that a future Labour Government will look at precisely that to fill the gap.

Tax Avoidance (HSBC)

Debate between David Gauke and Julian Smith

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

I think the hon. Gentleman has just made the point that my hon. Friend the Member for Wellingborough (Mr Bone) raised in the previous question.

[Julian Smith (Skipton and Ripon) (Con)]

Last week, Bill went missing. This week, it is Ed, who had sole responsibility for these issues in 2007. Why does the Minister think that no substantive action was taken in those years?

[Mr Gauke]

That is a very good question for the shadow Chancellor. It is a pity he is not here today.

National Insurance Contributions Bill

Debate between David Gauke and Julian Smith

Monday 4th November 2013 Commons Chamber

[Mr Gauke]

The Bill will result in a big simplification for 450,000 businesses, because they will no longer have to pay any employers’ national insurance contributions. That is significant progress. We have established the Office of Tax Simplification, which has produced a number of reports. Anyone who has studied recent Finance Acts closely will have seen that a whole range of measures have been introduced as a consequence of the OTS’s recommendations. Of course, there is more work to be done and we as a Government remain committed to that, but there have been a whole range of measures. The OTS is looking at employee benefits at the moment, and that is significant.

[Julian Smith (Skipton and Ripon) (Con)]

One of the concerns that small businesses had about the national insurance holiday—which was an excellent policy, despite the Opposition’s comments—was about the forms that had to be filled in to qualify. Will the Minister clarify how easy it will be for businesses to take advantage of the new proposal?

[Mr Gauke]

My hon. Friend makes a good point. I want to turn to the employers’ national insurance contributions holiday, because I suspect it will feature in the speeches of Opposition Members. They will make the point that take-up was not as high as we had anticipated. [Interruption.] Let me give the numbers: 26,000 employers and 90,000 employees have benefited from it. Our expectation was that take-up would be much higher. [Hon. Members: “How much?”] Don’t worry; I am going to set it out.

We said that 400,000 businesses and 800,000 employees would benefit from the scheme. I think that the reason why that did not happen is closely aligned to what my hon. Friend has just pointed out: a scheme that was, essentially, quite targeted and required businesses to apply—even though we worked hard to try to make the application process as simple as possible—simply meant that fewer businesses applied for it than we had anticipated. Take-up was lower than expected and there are lessons to be learned from that. We should be open about that.

We need a system that is simple and that can be applied easily. Under the new proposal, no application process is needed as such. Businesses will receive the benefit of the employment allowance simply by using up-to-date payroll, and the introduction of real-time information makes that much easier to apply. We believe that this is a much-improved policy. It contrasts with the employers’ NICs holiday, because that was a targeted regime. It also contrasts both with the policy advocated by Labour in its five-point plan, which was even more targeted, and with the policy we heard about yesterday on the living wage. Complicated, temporary schemes requiring applications are likely to have disappointing levels of take-up, whereas permanent schemes automated through the payroll system will, we believe, apply much better.

--- Later in debate ---

[Mr Gauke]

My hon. Friend is absolutely right. It is worth bearing it in mind that tax plays an important role in the cost of living. If taxes are put up, it increases the pressure on the cost of living. Ultimately, that is where the policies of the Labour party would lead.

[Julian Smith]

Will the Minister confirm that he will take no lessons from the Labour party, because during the debates on the national insurance contributions holiday, it advocated more bureaucracy in the form of annual reports and the like?

[Mr Gauke]

My hon. Friend is right. The policy of providing a NICs break only for new employees raised all sorts of practical questions such as who constituted a new employee and what perverse incentives might have been created. That is not dissimilar to the point that my hon. Friend the Member for Stourbridge (Margot James) has made about Labour’s current policy.

I will turn to the other elements of the Bill. Clauses 9 and 10 relate to the general anti-abuse rule. The Government announced at last year’s Budget that they accepted the recommendation of the Aaronson report to introduce a GAAR targeted at abusive tax avoidance schemes. The GAAR was introduced in part 5 of the Finance Act 2013 and has been in force since July. This Bill will apply the GAAR to national insurance contributions.

Clause 11 relates to oil and gas workers. In this year’s Budget, the Chancellor announced that the Government would strengthen the legislation on offshore employment intermediaries. The Bill will address the non-payment of employer’s national insurance contributions in the oil and gas industry through the placement of the employer of oil and gas workers who are working on the UK continental shelf outside the UK. The measure has been subject to consultation. The consultation document, “Offshore employment intermediaries”, was published on 30 May 2013 and the consultation closed on 8 August 2013. The summary of responses was published in October.

The Government intend to address those offshore employment schemes largely by using existing powers contained in social security legislation. The Bill supplements those with a new certification provision for the oil and gas industry. That provision will apply where the national insurance obligations are fulfilled by someone on behalf of the person deemed to be the employer for national insurance purposes.

Clause 11 is part of a measure that, as a whole, is expected to bring in the region of £100 million per year to the Exchequer, without having a significant economic impact on the oil and gas industry. Staff costs for some businesses may increase if they had not previously been accounting properly for all tax and NICs. There will be little cost to the Government through additional administration, other than HMRC implementing the new certification system, and I hope hon. Members will agree that this is a straightforward and uncontroversial provision.

Finally, I wish to refer to provisions in the Bill concerning HMRC’s partnership review, which are contained in clauses 12 and 13. Following the Chancellor’s Budget announcement, HMRC carried out a consultation on two aspects of the partnership rules between May and August this year, and the Government are bringing forward measures in the Bill as a result of that review. The Government are proposing two sets of changes, the first of which was not part of the consultation proposals but resulted directly from information received during that consultation. It concerns a tax issue that can arise from the interaction of the alternative investment fund managers directive—AIFMD—and existing partnership tax rules. Only those alternative investment fund managers who operate as a partnership will be affected by the proposed changes in the Bill.

A provision in the Bill will allow regulations to be made to modify the class 4 NICS liability of partners whose profits will be deferred under AIFMD, which aims to improve investor protection and reduce risk. The regulations will be based on new tax legislation that will be included in the forthcoming finance Bill. Measures will be included in the NICs Bill, the forthcoming finance Bill and secondary legislation to reclassify certain limited liability partnership—or LLP—members as employed earners for tax and national insurance purposes, to tackle the disguising of employment relationships through LLPs.

The tax and NICs changes are expected to bring in approximately £125 million to the Exchequer in the first year, while the broader economic impact is expected to be negligible. There will be changes to the NICs liability for certain partnerships and individual partners in the alternative investment fund sector. The Bill will also result in some LLPs in certain industry sectors where disguised employment has been most prevalent paying increased amounts of NICs.

Oral Answers to Questions

Debate between David Gauke and Julian Smith

Tuesday 1st November 2011 Commons Chamber

[Mr Gauke]

As I say, we will be updating the House with all those details shortly, but there are 1,600 or so businesses in the north-west region that are benefiting from it. I visited one of them not far from her constituency a few weeks ago which was very appreciative of the scheme. Where the scheme is available, I encourage hon. Members to highlight it to their constituents.

[Julian Smith]

May I urge the Minister to reconsider auto-enrolling new businesses on to the scheme, so that rather than their having to apply for it they are placed on it automatically?

[Mr Gauke]

We looked at auto-enrolment but one of the difficulties was the fact that it would have been years before we could have put it fully in place and we wanted to move quickly to have the scheme in operation. It is important that we highlight the scheme and make sure that publicity is available and that businesses are aware of it. The businesses that I have met that have taken up the scheme are very appreciative of it and it helps them in those difficult first few months.