PAYE Contributions

Lord Brennan of Canton Excerpts

Wednesday 8th September 2010 Commons Chamber

[Mr Gauke]

My hon. Friend is right that we are consulting on moving towards a real-time system. I do not pretend for a moment that it is an overnight solution, but we are examining it so that over the next few years, we can move to a system that gives HMRC, which will of course continue to administer it, information that is up to date and adjustable in-year. That will ensure that we get a much greater level of accuracy in our tax system.

[Kevin Brennan (Cardiff West) (Lab)]

Like all hon. Members, the Minister will have constituents visiting him who have underpaid tax and who will feel that that is no fault of their own, and yet, under the system as it exists, they will be expected to pay back in full. Has he given any consideration to recognising clearly in the amount that must be paid back that our constituents have acted in good faith and that the fault lies elsewhere?

[Mr Gauke]

As I said earlier, concession A19 is for taxpayers who have acted in good faith when HMRC has had an opportunity to respond. However, I should also make the point that PAYE has always involved circumstances in which information comes to light after the tax year is completed and an adjustment must be made. That has happened throughout the existence of PAYE, but it has increased over the years as working patterns have changed, which is why we need to look at more fundamental reform of PAYE.

Oral Answers to Questions

Lord Brennan of Canton Excerpts

Tuesday 13th July 2010 Commons Chamber

[Danny Alexander]

Supporting people with mental health problems through protecting the NHS budget is the best way to achieve the outcome that the hon. Lady suggests. There is also the Work programme, which is being developed by the Department for Work and Pensions to bring together and replace many of the employment initiatives of the previous Government, some of which were highly ineffective. Conditioned management of mental health problems will be part of that programme, which will help people with mental health problems back into work, which is, after all, the best route out of poverty.

[Kevin Brennan (Cardiff West) (Lab)]

15. In what sectors of the economy he expects the export growth forecast contained in the June 2010 Budget to be achieved.

[The Economic Secretary to the Treasury (Justine Greening)]

The export growth forecast produced by the Office for Budget Responsibility did not break it down by sector. However, we know that in 2009 manufacturing accounted for just over half of our exports, so there is a big opportunity here. We currently export more to Ireland than to Brazil, India, China and Russia combined. That is why the Prime Minister met the Indian Commerce Minister earlier this month to talk about economic opportunities for us over there. Later this month, he will lead a taskforce of UK business men to India to investigate export opportunities.

[Kevin Brennan]

I am afraid that the Minister has not seen this morning’s report from Cambridge Econometrics, which examines the effect of the Budget on manufacturing, and predicts a decline in manufacturing share and an expansion in the financial sector to its highest share ever. Is that what the Minister means by rebalancing the economy?

[Justine Greening]

Many people would consider that a bit rich coming from a member of the last Government, given that manufacturing declined at a steeper rate under them than under the previous Conservative Government. We aim to support manufacturing and, indeed, companies throughout our country through a robust and ambitious corporation tax package, through progress on national insurance, and through largely getting rid of the jobs tax that the last Government would have introduced. What we would like to hear from the Opposition is more constructive discussion about how to improve our exports.

--- Later in debate ---

[Danny Alexander]

We have announced a pay policy that involves a pay freeze for people earning above £21,000 a year. People earning below £21,000 a year will have a pay rise of at least £250.

[Kevin Brennan]

Pro rata.

[Danny Alexander]

That pay rise will be pro rata, but people will benefit from the changes to tax credits, for example, and the significant increase in the child tax credit for those with children. That will help to ensure that many of the people with children in the hon. Lady’s constituency whom she is describing will not be driven into poverty, as they were in many instances were under the previous Government.

Finance Bill

Lord Brennan of Canton Excerpts

Tuesday 6th July 2010 Commons Chamber

[Mr Byrne]

My hon. Friend is absolutely right. Like so many words that we heard during the election from those now in government, those ones turned out to be rather empty.

Perhaps we would not be quite so worried about what we have heard from the Chief Secretary this afternoon if we did not know that the risk of failure for this Budget was so great. The Office for Budget Responsibility, which is supposed to know, has said that there is just a 40% chance of the Chancellor hitting his growth forecast for next year, yet the VAT increase in the Bill will tax consumption so hard that we will be forced to rely on a history-making burst of exports and business investment. Last week we heard that just once since 1966 have we had the kind of rise in investment and exports on which the Chancellor will be banking in each of the next three years. The House would therefore be right to ask what measures exist in the Finance Bill to help. On close inspection, there appears to be no help at all for exporters, yet the Chancellor needs Britain’s exporters to grow their trade abroad by £100 billion for his plan to come true. That is the equivalent of our trade with America rising threefold, our trade with China rising by 20 times or our trade with India rising by 40 times. It is fair to say that that is not a bet that any of us would take.

[Kevin Brennan (Cardiff West) (Lab)]

Was my right hon. Friend surprised when he saw the Deputy Prime Minister in Germany—he is obviously fluent in German, but not in economics—persuading the Germans to cut their expenditure, when Germany is exactly the sort of market that we rely on for export growth?

[Mr Byrne]

Precisely. We need the German Government to contribute to growth right across the European area. One would have thought that the Deputy Prime Minister might have a word to say about encouraging the German Government to do more to help British exporters, but there we are—not a word about that from him.

Budget Resolutions and Economic Situation

Lord Brennan of Canton Excerpts

Tuesday 22nd June 2010 Commons Chamber

[Mr Tyrie]

In my new job, I am doing my best to avoid putting things in such trenchant terms, but I feel that not enough has been accepted by the Labour party about the scale of the mismanagement on the economy—requiring us to do something about it now.

This was an astonishing and phenomenal Budget—a tour de force. It really was a further addition to the early economic radicalism of the coalition Government. We have already had announcements about a complete overhaul of financial regulation and an innovative body, the Office for Budget Responsibility, has been created. We have also had announcements about vigorous action being taken on the deficit as well as major proposals for tax and benefit reform. The first of these measures is needed, among other things, to change the culture. The politics of plenty have to give way to the politics of thrift in Whitehall. That, above all, is why it is right for the Government to make the £6 billion-worth of cuts.

On the second of the measures that I have just mentioned, we must have tax reform and simplification if we are to have any chance of improving Britain’s long-run growth rate, which has been imperilled by immense complexity in the tax system.

[Kevin Brennan (Cardiff West) (Lab)]

On taxation, when the Prime Minister said on 1 April, when he was the Leader of the Opposition:

“Our plans don’t involve an increase in VAT”,

did the hon. Gentleman believe him?

[Mr Tyrie]

As I recall, all three parties talked about having no plans to increase VAT, and it would not have surprised me a scrap, had the positions been reversed, if we had had an increase in VAT. How would Labour have filled the £45 billion deficit? We have not heard a word on that. That brings me to a point that I had decided, on the grounds of non-partisanship, not to make, but that I now think needs to be made. It was irresponsible and damaging to British democracy not to have had a spending review on which to judge the decisions to be taken. In my current job, if I were to find the coalition Government as evasive as that, I would do everything in my power to call them to account and to make sure that they told us the facts.