Loan Charge 2019: Sir Amyas Morse Review
Peter Dowd Excerpts(4 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Dowd (Bootle) (Lab)
It is a long time since I read Adam Smith, but as I recall, the fourth maxim goes along the lines of, “Take from the taxpayer only that which is needed for the public realm.” Of course, the converse of that is that the more people do not pay their taxes, the more the rest have to pay to balance up, so Adam Smith’s statement is not absolutely unambiguous.
As almost everyone has said today, tax avoidance should not be allowed. It should not be encouraged. It should be discouraged in any way possible, because the rest of us who do pay our taxes have to support those who do not, so I do not have a problem with the concept of clamping down on tax avoidance. Retrospection has been used since the second world war, but it has always been commensurate with the needs of the nation. I do not want to get into a big argument about retrospection, but the issue is there. An excellent document from the House of Commons Library sets it out perfectly reasonably, and people have to take their own view.
I completely accept that many people took advice from a variety of organisations and that advice was wrong. I do not dispute that. These enablers ripped people off. Their scams were like other scams we have had, whether it is the recent leasehold scam, the payment protection insurance scam, or the endowment mortgage scam. These scams have existed for a long time, as the south sea bubble scam shows. They go back an awfully long time—
Peter Dowd
Precisely—before the right hon. Gentleman was a Member, although not much before, I imagine.
Bob Stewart
It might be dangerous to intervene here, but I am quite sure that a lot of these financial analysts and chartered accounts honestly thought they were doing the right thing and everything was legal. They acted in good faith. I do not suppose that all of them were slightly dodgy.
Peter Dowd
Well, that is a view. The hon. Member for Thirsk and Malton (Kevin Hollinrake) talked about how something that looks too good to be true is too good to be true. People have to take that on board when they become in involved in such schemes, as lots of people have, right across the spectrum, from those who are pretty wealthy all the way down to people who earn quite small sums.
It is the responsibility of this House to ensure that people are treated fairly. I do not want to get into the argument about whether HMRC has treated people fairly or unfairly. I accept in good faith what Members have said today about how their constituents have been treated. That has to be set in the context of the issue of HMRC’s resources. A third of its staff have gone since cuts in 2005 and later in 2010. Any increases in the cash amounts available to HMRC for its running have, in effect, been blocked. That is a factor that we must take into account as well.
The primary issue here is whether the enablers—the people everybody has talked about today—are getting away scot-free. I suspect that the Minister will tell us the extent of the Government’s and HMRC’s action to tackle these enablers, but I suspect that it will not be enough and the Government will have to sharpen up their footwork.
Whether HMRC has been aggressive is, again, a moot point. However, we know some of the enablers have also been incredibly aggressive. The Rangers FC issue trundled on for the best part of 13 years, with enablers—the accountants and lawyers—taking it right to the line and beyond, so let us not pretend there was not aggression from those who were attempting to push and push the boundaries, hence the reason for commensurate potential retrospective legislation.
I do not want to take much time, and everything has already been said today. It is important not just that the letter of the report and all its recommendations are put in place, but that the spirit of the report in relation to closed cases and so on is taken into account, and specifically the recommendation for a £30,000, 10-year limit, which the Government rejected.
The Government should have a word—I put it as gently as that—with HMRC about people’s perception of how it has behaved. It is important for Ministers to get that view across to HMRC. As the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) said, it is about balance. We need balance in dealing with this matter, and I hope the Government can get that balance right.
Oral Answers to Questions
Peter Dowd Excerpts(4 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rishi Sunak
I am pleased to say that the Ministry of Housing, Communities and Local Government is undertaking a review of the funding formula for local government, and I am sure that Enfield Council has participated in that. There will be a formal consultation later this year, and I encourage the council to input its particular needs if those are not adequately captured by today’s formula. In the forthcoming financial year, Enfield can look forward to an almost 6% cash increase in the spending power it has available for its residents and communities.
Peter Dowd (Bootle) (Lab)
In addition to the Secretary of State for Housing, Communities and Local Government, has the Chief Secretary had any discussions with the representatives of Hyndburn, Burnley, Leigh, Blackpool South, Colne Valley, Durham North, Keighley, Stoke-on-Trent Central and North or Workington concerning the adequacy of the funding for the councils covering their constituencies?
Rishi Sunak
In my previous role I had many conversations with councils up and down the country. Indeed, in this job I take representations from the Local Government Association, the District Councils’ Network and the Core Cities consortium, among others. The point is that this will be an evidence-based formula that looks at the various needs of all authorities up and down the country. It is being done in partnership with independent academics to help us arrive at a formula that is fair for every part of the country and every local authority.
Peter Dowd
Clearly those discussions were not very productive, were they? I can tell hon. Members that, according to the LGA, the likely outcome is 6.6, 6.6, 6.5, 6.4, 6.2, 10, 10, 9 and 4. I am referring not to Olympic ice skating marks, but to the additional millions that will be lost respectively by the councils of the hon. Members I listed. In all, 37 councils of the 50 new Tory MPs—that is 70%—are set to lose millions under the Government’s so-called fair funding formula. Did the Chief Secretary mention that to his new colleagues, or has he been too busy keeping an eye on the potential job vacancies?
Rishi Sunak
The figures the hon. Gentleman refers to are pure speculation. The formula has not been concluded yet, so it is a bit difficult to talk about the conclusions in advance of that. There will be a consultation. Regardless of the type of area that any Member in this Parliament represents—rural or urban, north or south—it will be an evidence-based formula. All the various criteria that drive local government spend, whether it is rurality or deprivation, will be taken into account. All Members can have input into that process and can have confidence that the final formula will be fair and, importantly, evidence-based.
Andrey Lugvoy and Dmitri Kovtun Freezing Order 2020
Peter Dowd Excerpts(4 years, 3 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Dowd (Bootle) (Lab)
It is a pleasure to see you in the Chair, Mr Robertson, and to see new Members on both the Government and Opposition Benches. I agree with the vast majority—if not all—of what the Minister said, which is a first. I sat on the Committee two years ago for the Andrey Lugovoy and Dmitri Kovtun Freezing Order 2018, which this order extends.
As the Minister said, the public inquiry found that Lugovoy and Kovtun poisoned Alexander Litvinenko in 2006; the freeze on Lugovoy and Kovtun, under the Anti-terrorism, Crime and Security Act 2001, is appropriate. As the Minister indicated, the freeze prohibits individuals and entities from making funds available to the specified persons—that is only right—and is being extended. In the light of the case, the measure is an appropriate, commensurate and proportionate response in relation to the specified persons. To the best of my knowledge, there have been no material changes since the case.
We want to reaffirm the importance of being as open and as transparent in our dealings in these matters as the Russians are in the other direction. David Anderson, who was appointed to the role of independent reviewer of terrorism legislation under the Data Retention and Investigatory Powers Act 2014, said that the purpose of his June 2015 report was
“to inform the public and political debate on these matters, which at its worst can be polarised, intemperate and characterised by technical misunderstandings”.
His summary went on for several more pages.
The important point is that we have to keep watch on ourselves on this issue. We have several codes of practice on such matters that have been in place for a few years. As I am sure the Minister appreciates, to ensure that we are open and transparent we must review them periodically. He may well wish to take that back to the Department and consider when we might review those codes of practice.
There are, for example, codes of practice for the Proceeds of Crime Act 2002 and the Crime and Security Act 2010. We passed the Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) Order 2018, and there is a code of practice for the Criminal Procedure and Investigations Act 1996. We must keep those codes of practice up to date because they are important to ensuring that we are clear and unambiguous in the way that we deal with such matters. We have to be absolutely open and transparent where other organisations are not.
I am sure that the Minister will fully concur with the Labour party’s sentiments about openness and transparency. Glasnost, I suppose, is the order of the day.
Oral Answers to Questions
Peter Dowd Excerpts(4 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sajid Javid
Yes, I will. May I also welcome my hon. Friend to her place? I remember my visit to her constituency last month; we met some excellent local businesses. She is right to talk about the need for further investment in the midlands. As a west midlands MP, I understand that as well, and I know exactly how much more potential can be unleashed. I look forward to working with my hon. Friend throughout this Parliament to do just that.
Peter Dowd (Bootle) (Lab)
Is that it? The Prime Minister’s special adviser now wants a civil service—perhaps modelled on the Cabinet—comprised of
“Weirdos and misfits with odd skills”.
As a member of that Cabinet, what weird explanation does the Chancellor have as to why, according to the Office for National Statistics, productivity is falling at its fastest annual pace for five years?
Sajid Javid
We have just had an unprecedented decade of growth: it is only the third time since 1700 that we have had an uninterrupted decade of growth, and that is thanks to the work of this Government. When it comes to weirdos and misfits, I know that there are many on the Opposition Benches, but they need not apply.
Peter Dowd
That speaks volumes, does it not? The worst recovery since the industrial revolution—is that what this Government can be proud of? It is absolutely pathetic. More bluster from the Chancellor, but the facts are absolutely clear: most people are worse off under Tory economic mismanagement, working longer hours on flatlining real pay. So, what targets has the Chancellor set for improved productivity? Will he make way for another weirdo or misfit when, inevitably, those targets are not met?
Sajid Javid
We should never forget that the Labour Government gave us the deepest recession in almost 100 hundred years, and the British people were clever enough not to allow them to do it again. Now, they throw stones at the firefighters who put out the fire that they set in our economy. That is what they do. We will not take any lessons from the Labour party.
The Economy
Peter Dowd Excerpts(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sajid Javid
Sound public finances are the foundation of economic prosperity and strong public services, and we have come a long way since 2010. We inherited a deficit of 10% of GDP. At that time, that was the biggest Budget deficit of any advanced economy. It was equivalent to borrowing £5,000 every single second.
Peter Dowd (Bootle) (Lab)
There were around 39 speeches today, so obviously I cannot go through them all, but I would like to thank the right hon. Member for Sevenoaks (Sir Michael Fallon)—although, given all the cuts we have had under the Tory Government, I am surprised it is not “Sixoaks”—for his support for Labour’s policy on share ownership. I also offer my congratulations to the right hon. Member for Central Devon (Mel Stride) on his appointment to the Treasury Committee, and commiserations to the hon. Member for Thirsk and Malton (Kevin Hollinrake).
The right hon. Member for Kingston and Surbiton (Sir Edward Davey) said that the Liberal Democrats were the yellow party. They certainly were the yellow party, in that they did not stand up to the Tories when they were in coalition with them. That is the sort of yellow party they actually are. So I will not be taking any sermonising whatever from that shower at the back of me—none whatsoever.
May I say to my hon. Friend the Member for Ynys Môn (Albert Owen), thank you for all the work that you have done, given that this is your last Queen’s Speech—and yours was an excellent speech, too.
The Chancellor’s performance was excruciating. Judging by the faces of the Members sitting on his side of the House after he had made it, I thought I had walked into an embalmers’ and morticians’ conference. Thinking of the global banking crisis, does he not remember collateralised debt obligations—otherwise known as financial weapons of mass destruction? Has he forgotten that he had a great part in promoting them? That is the cause of the global financial crisis—reckless speculation, dependence on credit and grossly unequal distribution of income. It applies to this day. [Interruption.] Members on his side of the House may mutter all they want; that is the fact. They and their friends were the cause of the global crisis, not this side of the House—[Interruption.] Not this side of the House.
The topic today is the economy—an economy that the Tories are in the process of systematically wrecking. As many have pointed out today, after nine years in charge of the economy, their strategy has proven to be a total failure. Nine years of austerity, combined with Tory infighting over who can deliver the worst Brexit for our economy, has made us all poorer. Wages have stagnated. The queues at food banks have grown almost as long as the incoherent responses of the Prime Minister at PMQs.
Albert Owen
My hon. Friend is talking about the Chancellor’s opening speech in which he tried to mock Labour’s nationalisation plans, saying that we would even go as far as nationalising travel agents. I remind him that Thomas Cook made a profit when it was in public ownership between 1948 and 1972, but it went bankrupt under this Government, with people losing their jobs and their holidays.
Peter Dowd
My hon. Friend refers to just some of the many thousands of workers who have been let down by this Tory Government. We all walk past people sleeping rough on the streets every day, but what have the Government done about that? Nothing. Despite endless promises of jam tomorrow, there looks to be little respite ahead under this Government. Their approach to this is writ large by the smirks on the faces of the members of the Government Front Bench.
Manufacturing output in August dropped at the fastest pace in seven years, with EU-based customers rerouting supply chains away from the UK in anticipation of 31 October. Consumer and business confidence is tumbling. Anecdotally, we know that a worrying proportion of businesses are moving their operations and investment elsewhere.
My right hon. Friend the shadow Chancellor said:
“We have heard the Prime Minister’s previous crude dismissal of British business. Now we are seeing his words become Government policy.”—[Official Report, 8 October 2019; Vol. 664, c. 1650.]
Businesses are responding in droves. The Centre for European Reform says that the economy is already £69 billion smaller as a result of Tory turmoil and uncertainty since the Brexit vote. That is their responsibility on their watch—nobody else’s. Time and again, they put party over country while the economy suffers. The Government’s false dichotomy of no deal versus a bad deal amounts to an attack on the economic wellbeing of our citizens. Our economy needs cast-iron guarantees of frictionless free trade and strong regulatory alignment with the European Union. It needs a targeted industrial strategy to turn the biggest threat of our time into an economic opportunity, but not with the Tories.
The only threat we face that is equal to the continuation of this Government is the climate emergency. We need a green industrial revolution: a rapid and far-reaching transformation of the UK’s infrastructure, from our homes to our transport and energy systems. That requires investment on a scale that makes the Government’s programme pale into insignificance. Labour is offering—
Peter Dowd
I am sorry, but I will not at this stage.
Labour is offering a national transformation fund and a national investment bank that would invest £500 billion of lending and spending over 10 years, with tackling climate change as a central mission—a concept alien to that lot over there. It will include targeted investment to develop and commercialise new technologies so that they are designed here, assembled here, installed by a well-paid unionised workforce here, and then exported to the rest of the world. It is a far-reaching programme of economic revival that will create the industries of the future here. This is a Government of yesterday. We are the Government of tomorrow.
With its wind and marine resources, the UK has some of the best potential in the world for renewable energy. Renewable energy should be to the UK what tech has been to California, but the Government’s failure to support these nascent industries has held us back. We should be building on our existing strengths, such as the automotive sector, which could, with the right support, lead the world in electric vehicle and battery production. At the Labour party conference, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), the shadow Business Secretary, announced a multibillion-pound package of investment to kick-start the electric revolution. That is the scale of targeted support that our automotive industry needs—not just green number plates. Today, she announced plans to create a carbon-neutral energy system by the 2030s, including insulation upgrades for every home in the UK and enough new solar panels to cover 22,000 thousand football pitches, including Anfield.
This is not just about avoiding a climate catastrophe. The green industrial revolution is about building the world we deserve, not the world that the Tories think we deserve. We will ensure that nothing is too good for the working people of this country. We can tackle climate change while transforming our economy so that it works for the many, not just the privileged few.
As my right hon. Friend the Leader of the Opposition has said, this is not the time for despair; it is the time for action. I hope the Chancellor—hope does spring eternal—will act by accepting amendment (g) so we can begin to rebuild our economy in the interests of the many, not the few. Under this Government of yesterday, I will not hold my breath.
Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2019
Peter Dowd Excerpts(4 years, 7 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Dowd (Bootle) (Lab)
As always, it is a pleasure to see you in the Chair, Mr Hanson. I was confused at the beginning of this Committee when the right hon. Member for Central Devon came into the room; I thought he was going to sit in the Minister’s place again, and that there had been a coup d’état, but alas, there has not.
The Minister spoke about the readiness of business. Well, business is not ready to exit the European Union; that is why we are considering these provisions. The Government have not prepared as they should have done. Instead, they have extended the time for business to prepare. Why? Because businesses are not ready. He said that there will be no safety and security declarations. He gallantly kept a straight face when he said that, but then he went on to talk about introducing this measure in order to avoid checks. The only thing it is avoiding is reality.
I hope that Government Members will not take this personally, but it is not the same pleasure to see them as it is to see you, Mr Hanson, because of the out-of-kilter numbers on this Committee and their dominating effect. The Government have no majority, no authority and no hope, but they have stitched up and stashed out this Committee. The Government majority is fewer than 43, but the proportion of Members on this Committee is still out of kilter. When I was a councillor in local government in 1986, the Conservatives introduced legislation that made it illegal to have a committee on which the numbers were completely out of kilter, but this Committee is out of kilter. I must make that protest today.
The Chair
The hon. Gentleman has put that point on the record, but it is not actually within the scope of the Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2019.
Peter Dowd
You have been completely indulgent in that regard, Mr Hanson. Notwithstanding that point about the nature of the Committee, I start by saying that this statutory instrument follows on from the broad powers that the Executive accumulated through the Taxation (Cross-border Trade) Act 2018 of fond memory, the Trade Bill and the European Union (Withdrawal) Act 2018, which allowed them to make shifts in policy via secondary regulations—powers that make Henry VIII look like a wilting flower. That method seemed designed specifically to undermine proper scrutiny. We are trying to undertake proper scrutiny today, but that is undermined by the lack of balance on the Committee that I referred to. We see the processes subverted time after time.
In recent weeks, there has been an excellent article that the Minister might find useful by Alexandra Sinclair and Joe Tomlinson of the UK Constitutional Law Association. It is called, “Eliminating Effective Scrutiny: Prorogation, No Deal Brexit, and Statutory Instruments”. There are several articles in the series.
As hon. Members are aware, these regulations relate to the Union customs code and Commission Delegated Regulation (EU) 2015/2446. I turn to regulation 2, as you will be pleased to hear, Mr Hanson. It is on the modification of the regulation laying down the Union customs code, and appears to smooth the seams between the Union customs code and the more recent customs Act, the Taxation (Cross-border Trade) Act 2018, which introduced far-reaching powers to amend the UK customs procedure that I mentioned. If I am right, regulation 2 seems to be a tidying-up measure to align UK legislation with the Union customs code. Specifically, it seeks to ensure that an export declaration, as defined by the 2018 Act, is included under the Union customs code definition of a customs declaration, and as we speak, there is an urgent question in the Chamber on the schedule of tariffs in the event of a no-deal Brexit.
Regulation 3, headed “Modification of Commission Delegated Regulation (EU) 2015/2446 supplementing certain provisions of the Union Customs Code”, perhaps provides more interest. Its first part, which inserts a new article 104(6) in the Commission delegated regulation, appears to gives broad powers enabling us to override EU legislation and apply import duty to pallets, which the Minister mentioned, spare parts, containers and means of transport. Can the Minister explain why that waiver is necessary, and in what circumstances he could see import duty needing to be applied to those goods?
Regulation 3(3) inserts a new paragraph after article 244(4) of the Commission delegated regulation. That paragraph proposes that the time limits that apply to pre-departure declarations on travelling by different means of transport should continue to apply until November 2020, as the Minister said. If I have got this right, 1 November 2020 will fall slightly before the end of the proposed transition period. Can the Minister explain why?
Regulation 3(4) inserts a paragraph after article 245(2) that extends the power to waive pre-departure declaration in certain circumstances. That paragraph creates a new class of goods for which a pre-departure declaration would not have to be lodged. Unfortunately, though, the class of goods created is
“goods that would benefit from the waiver”
and
“goods that would so benefit if Article 104(1)(e) applied to goods carried under a transport contract.”
That does not clarify matters. This appears to be a rather circular piece of legislation, allowing a waiver to be applied to any good that would benefit from it. I am afraid that that will provide little certainty for businesses that are trying to understand how the regulations will affect them. Where is the Government guidance on this proposal?
Perhaps the Government are too busy using taxpayers’ money to advertise the point that the UK is leaving on 31 October to do what they should be doing, namely pulling their finger out and giving useful or credible guidance that might, God forbid, actually be of some help to businesses. Perhaps the Minister could clarify how a business will know what is waived under proposed new article 245(3). Can he give examples of goods that would qualify for the waiver?
The final regulation, regulation 4, amends the date set out in earlier regulations. I am afraid that the Government appear to have bungled this. The original Commission delegated regulation said:
“Until 1 October 2019, the lodging of an entry summary declaration shall be waived in respect of goods which before then are in transit to or are brought into the customs territory of the Union from a place where, in relation to that territory, such a declaration was not required before exit day.”
As hon. Members will note, it is 7 October—6 days after the end date set out in the above passage. Perhaps the Minister can enlighten us. Has the waiver been dropped since last Tuesday, only to be re-introduced should these regulations be agreed to? What are the implications for this gap in the law for business? Could businesses be legally liable for not lodging an entry summary declaration over the last 6 days? Is this competent on the part of the Government? It is a wonder that they want to centralise all these powers when they get things wrong in doing so. With these regulations, the Government have sown more confusion in an environment where exactly the opposite is needed.
In conclusion, today’s process, aligned with the illegal prorogation of Parliament, the stifling of Opposition day debates in the Chamber, the unprecedented use of “no amendment to the law” clauses in, I think, the last four Finance Bills, the stitched-up Committee membership, the use of unbridled secondary legislation and a Prime Minister who, with the connivance of Conservative Members, cannot even have a veracious discussion with a 93-year-old woman—namely the Queen—is deeply worrying.
Kirsty Blackman
I absolutely agree with the hon. Lady. In reality, the legislation does not provide more clarity to businesses. In fact, it provides less, because they do not know whether HMRC will be able to grant them the waiver using this discretionary power. Businesses will still have to prepare to put in safety and security declarations because there is no clarity from the Government on whether they definitely will or will not be included in the new regime. It would have been sensible of the UK Government to lift the clauses from the Union customs code and use them to make the customs Act work, but they chose not to.
Peter Dowd
On readiness, as the hon. Lady points out, we are less than a month away from leaving the EU, which we have been told will happen come what may, ditches included. It says on Gov.uk:
“Contact your vehicle insurance provider 1 month before you travel to get green cards for your vehicle, caravan or trailer.”
How many of those who know that they are going away in less than a month have their documentation ready?
Kirsty Blackman
Certainly too few. In fact, I discovered relatively recently that France and Spain, for example, have different regulations for those taking caravans, trailers or cars abroad. If someone were planning to do some kind of tour around those countries—that is perfectly feasible, given that they have much warmer weather than us at this time of year—they would need different permissions, depending on the country that they are going to. I am particularly concerned that many individuals will not have contacted their insurer in good time.
More specifically on businesses and the waiver, we know that businesses are not prepared for Brexit. If the Government are setting out to try to make things easier for businesses, they are abjectly failing to do so. In reality, the Government chose not to lift and shift the Union customs code. Had they chosen to lift and shift from the code, they would have had to take out certain parts because of the way that it works, but when the customs Act was written—I made this point at the time—the Government chose to bodge some parts of it and do them completely differently, with no rhyme or reason about the way to take it forward. For businesses, that has made things much more complicated than they needed to be. The Government have chosen that route and made the nuts and bolts and red tape much more complicated for businesses.
In circumstances where HMRC does not decide to grant the discretionary waiver to businesses and requires them to submit two separate declarations of security and safety work, how much additional money will that cost businesses? I understand from the explanatory memorandum that an analysis of the cost to businesses has to be done if it is likely to pass a certain threshold. The explanatory memorandum does not state the amount that it would cost businesses to submit those two separate declarations if HMRC decides that it will not use its discretionary power.
The hon. Member for Feltham and Heston mentioned the “greater than anticipated” wording. What level of unreadiness is anticipated? Do the Government anticipate that 50% of businesses making declarations will fail to do so adequately? Does the power kick in only if 51% of businesses fail to do so adequately? What is the anticipated failure rate by businesses before the legislation kicks in for HMRC? I feel that this has been put together in a shoddy way, and that it could have been done much better. Better scrutiny could have been applied if the Government had chosen the better processes that the House agreed for the sifting Committee. The reason we are in this mess today—aside from Brexit in general—is that the Taxation (Cross-border Trade) Act 2018 was not good enough and did not give enough certainty to businesses. That is why we have had to amend it a number of times before exit day.
Jesse Norman
HMRC has published some guidance already, and plans to publish more in time for the moment when declarations may come into force.
The hon. Member for Bootle asked whether these powers have the effect of undermining scrutiny. He should be aware that of course Border Force will continue to run checks on goods in the way it does at the moment, and these declarations are independent of customs declarations that might be made.
Peter Dowd
I wanted clarity about the declarations because one has to be prepared in advance of the potential for a declaration. Rather than having the guidance only when one gets to the declaration, would it not be much more appropriate to have that guidance laid out clearly and unambiguously much earlier, in advance of the need to make the declaration?
Jesse Norman
I think the hon. Gentleman is making my point for me. The instrument introduces a 12-month transitional period until 1 November 2020, during which there is no requirement for entry summary declarations for goods imported from territories where the UK does not currently require them. That is precisely in order to allow people to adopt guidance as necessary.
Oral Answers to Questions
Peter Dowd Excerpts(4 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sajid Javid
Well, it is fiscal policy, Mr Speaker, in the interests of my right hon. Friend, and he is right to raise the matter. He will have heard the Financial Secretary to the Treasury, in answer to the previous question, point to the independent inquiry that is taking place, led by a gentleman who has considerable respect. We will await the outcome of that inquiry.
Peter Dowd (Bootle) (Lab)
The effects of the Government’s fiscal policies on living standards have been devastating, especially for vulnerable people, so is it still Government policy to remove the benefits freeze in April 2020?
Sajid Javid
The hon. Gentleman talks about the Government’s fiscal policy, which is a core part of our overall economic policy, and it is that policy that has led to a jobs boom, with 3.7 million more people in work since 2010, and over 1 million fewer working households in our country living in poverty. The real threat to the living standards of working people is the agenda of the Labour party.
Peter Dowd
It would have been helpful to get an answer to the question. We have a Prime Minister who cannot be candid even with the Queen, a Health Secretary who claims there will be 40 hospital rebuilds when in fact it is just six reconfigurations, and a Chancellor who worked at a senior level for a bank that a US Senate Committee found had caused
“material damage to ordinary people and the wider global economy”.
Why would anyone believe a word that this self-serving Government say? They are led by a Prime Minister who, many claim, believes that telling the truth is an illness to be avoided.
Income Tax
Peter Dowd Excerpts(4 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Dowd (Bootle) (Lab)
The Minister said that he got support from businesses for tax relief. Well, that is not a surprise: when people are offered tax reliefs, they will accept them because it is cash in their pocket.
In a document published on 5 March last year, the Institute for Fiscal Studies said that our current tax system
“does not consistently deduct the cost of investment meaning that some investments are discouraged, some are incentivised and some are unaffected by the tax system.”
It went on to say that there should be
“a clear policy justification”,
which should be focused, and that we should ensure
“that the benefits outweigh the costs.”
The document also said:
“Too many reliefs have weak or poorly articulated policy aims”,
and that
“digging into the details and evaluating how each relief stacks up against a clearly stated tax design”
is important. It continued:
“The bar for introducing any new relief should be high.”
On the very same night, the Chartered Institute of Taxation and the Institute for Fiscal Studies had a debate about business tax reliefs, which asked whether they were
“corporate welfare or essential elements of the tax system”.
The question is, do we think they are an essential element of the tax system? In the debate on the Finance Bill, we raised these matters, but we were not able in any way to amend the law, which is regrettable. However, we did raise, in a sense, the whole question of tax reliefs, and it is a desperate shame to find ourselves here again debating the introduction of what amounts to another corporate tax relief, when so little has been done to sort out the scope of the scores of tax reliefs already in operation.
At the last count, the Government were responsible for managing 115 principal tax reliefs totalling £430 billion, as well as 80 minor tax reliefs totalling an estimated £690 million. However, alongside those, there are up to 235 reliefs in operation for which we have no cost data at all. I repeat: we are forgoing revenue on 235 tax reliefs, but Her Majesty’s Revenue and Customs does not count the cost. I find that quite remarkable. I cannot think of a single other policy area where the Treasury would be uninterested in Government expenditure.
Ministers tell us that the cost of these reliefs is negligible so there is no point making efforts to manage them more effectively. I do not believe that that holds water, especially when we consider that the Government regularly deprive citizens of small but essential sums of social security for the crime of being perhaps five minutes late to the jobcentre. Perhaps the Minister can explain why the Government can give away millions to large companies without counting the cost, while stripping the poorest in our society of the pounds and pence they need to survive. I ask that especially in the light of an interesting article by the Minister in The Sunday Times some weeks ago about our being one nation. It would be interesting to hear him comment on that. I agree with him that we have to bring the nation back together again, and that is an important part of this issue. I would also like to know what efforts the Government have made to improve the management of tax reliefs at HMRC. Will the Minister now commit to a moratorium on introducing further tax reliefs, unless the annual cost data on them can be collected and published by HMRC?
Turning to the measure before the House, it will not surprise anyone here that the pile of opaque and unaccountable tax reliefs is being added to, with yet another tax relief for businesses that does not necessarily fit the robust criteria set by the Institute for Fiscal Studies—criteria that this House should set in relation to the introduction of tax reliefs.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Gentleman was talking about the cost of tax reliefs. Has he worked out the cost to UK business and investment of imposing a policy that would requisition 10% of businesses that have more than 250 employees? I understand that that is Labour party policy.
Peter Dowd
I do not think it is a question of requisitioning; it is about a different approach and taking a different look at engaging workers in our economy. That is it—it is as simple as that. I appreciate and completely accept that the hon. Gentleman does not accept the concept, but that does not mean that the concept is wrong.
The Government boast about their corporation tax giveaways, but it is clear that even those billions, stripped from our public services, are not enough to satisfy their intentions in relation to corporate welfare. Furthermore, it seems that, in their rush to hand out giveaways, they have given no consideration to how this measure will fit into the already complex and convoluted system of capital allowances. It is not necessarily a question of saying whether I agree or disagree with these things; it is a question of saying we have a convoluted system—and it is incredibly complex. We do not have any review mechanisms of these reliefs, and we do not have any sunset clauses on them—in fact, we have debated that in Committee in the past, but the Government seem to have no response.
This new measure on structures and buildings allowances will, as the Minister said, provide relief for qualifying expenditure on new non-residential structures and buildings incurred on or after 29 October 2018 on a 2% per annum, straight-line basis. At the Finance Bill earlier this year, the Government blocked our attempts to require Ministers to publish details of the likely take-up of this new allowance across different-sized businesses.
Despite those concerns, the secondary legislation before us remains vague, with important definitions that would assist in addressing areas of ambiguity delayed and deferred to guidance. We have had lots of this deferral to guidance, secondary legislation and other things—potentially even tertiary legislation in due course. It really is not good enough. We need transparency and openness; we do not need to be told, “This is going to happen, but the detail may come a little later on.” Similarly, the decision by Ministers to delay finalising the details of this new allowance until June, when the final stages of the Finance Bill took place in January, is yet further evidence of the continued environment of uncertainty that business is forced to operate in under this Government.
The Chartered Institute of Taxation rightly criticised the Government over these new regulations, stating at the time of the 2018 Budget that
“it is neither sensible nor responsible for the government to introduce reliefs into the tax system at a time before they have consulted upon the scope and application of the relief or fully considered, and are therefore able to legislate for, the details of the relief.”
It concluded that these regulations will only complicate matters, particularly given that plant and machinery are excluded. That means that taxpayers are still required to identify the plant and machinery in buildings, with the same grey area that currently exists between buildings, fixtures, plant and machinery. The administration of this new allowance will be substantial and burdensome for businesses, flying in the face of the Government’s initial promise to simplify the tax system.
The demotion of much of the detail of this allowance to secondary legislation remains of great concern to the Opposition, particularly given that capital allowances are yet another means of extending tax breaks to large businesses, many of which do not necessarily need the relief. The reality is that many small and medium-sized businesses that desperately need support from the Government will struggle to access this relief without incurring substantial costs as a result of hiring tax experts to guide them through its complexities.
Rather than continuing this piecemeal approach, which seems only to confuse and deter businesses in need, Labour remains committed to carrying out a review of tax reliefs once in government to evaluate individual reliefs against their effectiveness and value for money. It seems that, again, this opaque Government will not commit either to a proper review of the measure before us or to a wider review of the full plethora of their corporate relief giveaways.
This is no way to run the country. Once again, the devil will be in the detail of the guidance that HMRC publishes, particularly when it comes to what constitutes qualifying expenditure, the definitions of terms such as “dwelling-house” and “mixed-use building”, and clarification of the treatment of successive leases and the new flexible rules in instances where expenditure is incurred after a building comes into use.
Although the Opposition remain sceptical about the introduction of yet another poorly-considered allowance on top of the 1,200 allowances that already exist—many of which have existed for decades without review—we will not be voting against the secondary legislation today. Instead, we will wait to scrutinise the guidance when HMRC publishes it later this year. [Interruption.] I can hear Ministers sniggering. A responsible Opposition will vote against something when they disagree with it and will support something when they agree with it. When we want to consider the detail, implications and other information that comes from the Government, we will hold back. That is what a responsible Opposition should do—not automatically vote against or support things willy-nilly—and that is what we are trying to do, because we are being responsible. Ministers can snigger at that responsible approach if they want to, but we will continue to be responsible, and we will continue to oppose this Government as and when we feel it is necessary to do so.
Peter Dowd
The Minister ought not to put words in my mouth. I exhort him to read what I said. Unlike the leadership candidates, who are spending money left, right and centre, the Opposition are responsible. The point I was trying to make is that it is important to review reliefs. There are 1,200 of them. Many other countries review reliefs—there is nothing particularly radical about that, and I exhort the Government to do so.
Jesse Norman
It is hard to make swingeing criticism of the idea of reliefs and then not indicate any that a Labour Government would propose to abolish. It raises the question whether the Labour party is serious about this. The hon. Gentleman described these reliefs as “corporate welfare” and giving away millions of pounds to large companies. All companies benefit that have qualifying investments and are subject to UK taxation in the way indicated; it is not just larger companies. Many of the reliefs he describes are negligible and therefore should not necessarily be the target of extensive review. He talks about the reduction in corporation tax as though it is a bad idea but neglects the fact that significantly more corporation tax has been raised following these reductions.
Jesse Norman
The answer is that they are not. The hon. Lady is welcome to write to me with specific details of the student housing in her constituency. Of course, many students live in housing that universities would regard as equivalent to hotel accommodation of years ago. However, the general rule is that it is not included, but that hotels and care homes—where there is such trade, as I have described—are included. I think that is a tolerably clear line.
The final point the hon. Lady raised was about the impact on GDP. The independent Office for Budget Responsibility has estimated that the capital allowances package announced at the Budget would increase business investment by 0.4%, so that number has been calculated and put into the public domain.
Peter Dowd
The Minister is talking about numbers and putting the record straight. He referred earlier to the bank levy and bank surcharging. In 2017-18, they raised £2.6 billion and £1.9 billion, totalling £4.5 billion, and in 2023-24, they will raise £1.1 billion and £2.1 billion, totalling £3.2 billion, so they will raise considerably less than they raise now, not the billions more that the Minister suggests they will raise.
Jesse Norman
If I may, I will just correct the record. I said that they have raised billions more—and they have raised billions more—than the pre-existing Labour tax. That is a fact of the financial environment that surrounds banks, just as this is a new fact for the financial environment that surrounds corporations more generally. And on that point, I will sit down.
Question put and agreed to.
Oral Answers to Questions
Peter Dowd Excerpts(4 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Robert Jenrick
We have received representations from the midlands engine, and from Midlands Connect in relation to transport, about both road and rail east-west connectivity. We are considering them carefully, and they will form part of the spending review.
Peter Dowd (Bootle) (Lab)
I spot the Leader of the House on the Treasury Bench, but I do not know whether he wants his old job back.
The Exchequer Secretary talks a good talk on fiscal steps to support the northern powerhouse, but the broader facts speak for themselves. Since 2015, for the first time in 50 years, the UK Government no longer provide regional investment aid in England, according to the Industrial Communities Alliance’s evidence to the Business, Innovation and Skills Committee inquiry. What is his explanation for that?
Robert Jenrick
We give many other funding streams to northern communities, including £3.3 billion through the local growth fund and £13 billion for wider transport schemes.
Peter Dowd
So that’s an unambiguous no. The north is home to 15 million people in five major city regions, 265 towns and 1,000 villages and smaller communities. It has 29 universities, the UK’s largest airport outside the south-east and eight major ports, one in my constituency. Does the Exchequer Secretary agree that changing those eight ports, as suggested by the Foreign Secretary and the former Foreign Secretary, into not economic hubs of excellence but potential revenue-draining, tax-avoiding, money-laundering free ports—more like free-for-all ports—is no substitute for a focused, well-resourced and sustainable economic strategy for the north?
Robert Jenrick
Perhaps unlike the hon. Gentleman, I am interested in any proposal that can drive economic growth in the north of England. Free ports are an interesting proposal, which we have discussed with a number of communities. We have urged them to come forward with well-thought-through business cases. We have yet to receive them from many places, but we have received one from Teesside and we will consider them carefully in future.
The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019
Peter Dowd Excerpts(4 years, 10 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Dowd (Bootle) (Lab)
It is a pleasure to see you in the Chair, Mr Robertson. I think this is the new Financial Secretary’s first outing, certainly in Committee, so I welcome him to the role. However, I do not welcome his comments, which were a “not me, guv” statement. “Nothing to do with me, nothing to do with this Government; it’s all about the EU. Let’s blame them.” That is what his statement was about.
On the day we got a climate change denying letter from Lord Lawson, we also have this order before us. The Solar Trade Association, which is deeply concerned, wrote to us, saying that MPs’ actions must match our rhetoric. Today, we have had lots of rhetoric but no actions. I will touch on that a little more. I will also touch on the European Court of Justice judgment, which I know everyone in the room will have read—no doubt several times, to get the nuances of it.
As the Minister laid out, the order narrows the scope of the UK’s reduced rate of VAT for installations of energy-saving materials in residential accommodation, with effect from 1 October. Under the new rules, the reduced VAT rate will no longer apply to wind or water turbines. Perhaps the logic is that they are not energy saving but energy producing, so they will not be eligible for this VAT reduction. That is a rather bizarre, almost Orwellian approach, which flabbergasted me.
Just months after the Labour party secured a parliamentary declaration of a climate emergency, introducing high taxes on energy efficiency and low carbon solutions for our homes while retaining a 5% rate on fossil fuels simply does not make sense. To add to the absurdity, a motion to approve a statutory instrument relating to the draft Climate Change Act 2008 (2050 Target Amendment) Order 2019 is being debated on the Floor of the House—if not today, perhaps in the next few days. How on earth can the energy-saving materials instrument fit in with that commitment? How can we understand it as anything other than favouring fossil fuels over renewable technologies?
Despite the rhetoric, which the Solar Trade Association mentioned, and grandstanding, the instrument makes it clear that, not only do the Government not take the climate crisis seriously, but they continue to support fossil fuels via the tax system. It is okay if they do that and also support renewables, but to do one without the other is a bit odd. Indeed, clauses 36 and 37 and schedule 14 of the Finance Act 2019, which we opposed, create a favourable tax mechanism to allow companies buying equity in UK oil and gas fields to acquire the tax histories of the selling companies. I say that only to juxtapose it with the Government’s position today. It is probably to be expected, given that some Cabinet Ministers have denied the scientific consensus on climate change, and several of the Tory leadership contenders have close links with organisations and individuals who promote climate change denial. I refer, for example, to Lord Lawson and his letter today, which, if anybody has bothered to read it, is bizarre.
Meanwhile, figures released in April show that the UK is set to miss its own carbon targets by an ever wider margin. Can the Minister clarify the Government’s position and explain how the order fits in with the fact that they are so widely off track in meeting their own targets?
We are told that the instrument is required because of an ECJ decision made in 2015. Colleagues will remember that, following the 2016 Budget debates, the Labour party forced a Government U-turn on their proposals to implement the decision, so why is it being introduced now—a point my right hon. Friend the Member for Warley made? The timing is particularly unfortunate and incongruous because the view in Europe on VAT has evolved considerably since the 2015 ruling. The European Commission continues to consider its action plan on VAT and has proposed,
“regular review(s) of the list of goods and services eligible for reduced rates”,
and/or abolishing the list altogether. Did the Government bother to ask them about that? I suspect not in the negotiations that the Minister referred to. While the consultation continues, it would surely be unwise for the UK to pre-empt it.
My right hon. Friend also made the point that if we are to be out of the European Union by 31 October—apparently—why not kick the can down the road a little bit further? We have been kicking it down the road for about three years, so another few months will not make much difference. Taking far-reaching action now, only for changes to have to be made shortly, could risk imposing costs on businesses and individuals. A better approach is for the UK to work closely with the Commission to determine what minimal changes ought to be planned for, while still allowing action to tackle the climate emergency. That is the sensible way forward. That is what the Government should do instead of navel gazing with Tory party leadership elections while the country and our climate go to the wall.
A written ministerial statement refers to the meeting of the Economic and Financial Affairs Council, held in Luxembourg on 14 June 2019, discussing,
“a strategic long-term vision for a climate-neutral economy.”—[Official Report, 13 June 2019; Vol. 661, c. 37WS.]
Given both the current ambiguity as a result of ongoing legislative reform in Europe, as well as the UK’s planned imminent departure from the EU, it does not seem appropriate for the UK to use the 2015 ECJ judgment in this way.
Furthermore, the ECJ judgment says only that the UK could not apply reduced rates in a blanket way,
“irrespective of the social context in which such operations take place”.
That suggests that, had the Government redesigned the scheme so that it took social context into account, they would not necessarily have had to scrap lower-rate VAT on energy-saving materials. Will the Minister tell us whether the option of adapting the Government’s scheme to take into account social interest—as opposed to scrapping the subsidy entirely for the installation of wind and water turbines—was considered? We are not convinced that the SI is the only option for the future.
Despite the statement in the explanatory memorandum— that there
“is no, or no significant, impact on businesses, charities or voluntary bodies”—
many stakeholders argue that the final price paid by customers for measures that save energy and reduce emissions could be significantly increased. That might discourage the uptake of solutions that are key to making our homes energy efficient and low carbon in order to meet our climate change targets.
Rules based on the proportion of installation cost versus capital cost could disproportionately disadvantage people in less prosperous areas of the country where installation costs tend to be lower. This measure might also hit heat pumps and combined solar and storage systems, as the cost of the materials is likely to exceed the 60% limit. Will the Minister respond to those concerns, and will he clarify the process with regard to the impact assessment—the process that resulted in that stated conclusion?
Alternatively, Labour is committed to protecting and safeguarding investment in renewable energy and green infrastructure to help insulate homes. Recently, we announced plans to reduce energy bills by installing solar panels on nearly 2 million homes. Indeed, the shadow Secretary of State for BEIS, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), recently challenged the Government on their climate change actions in Prime Minister’s questions, after they scrapped the subsidies for domestic solar panels in April. The Government have form on this—a big long list of all previous convictions and antecedents, as people used to say.
Climate change is clearly an existential threat. We owe it to ourselves, our communities and future generations to protect and safeguard the world in which we live. Labour takes those responsibilities seriously, so we cannot support the order.
I will now touch on how the Government did not do a good enough job in the negotiations or with the information they submitted to the Commission and to the Court. I could go through that in detail, but, as an example, I will refer to paragraph 37 of the judgment. This is important, because it goes to the heart of the Government’s slapdash approach—
The Chair
Order. Will the hon. Gentleman speak up? I want to hear what the judgment says.
Peter Dowd
You are about the only one in the room who does, Mr Robertson. I am pleased about that and thankful for it.
Paragraph 37 sums matters up:
“However, the documents in the file submitted to the Court, without more, make it impossible for the Court to consider that argument, relied on for the first time by the United Kingdom in its rejoinder, to have been made out and to hold that the ‘zero-rate system’ remained, in accordance with Article 110 of the VAT Directive, actually applicable to such operations and covered such operations in their entirety. That argument consequently is not sufficient ground to call into question the Commission’s complaint that the national legislation at issue, with regard to the application of reduced rates of VAT on the conditions laid down in Article 98 of the VAT Directive, read together with Category 10a of Annex III thereto, does not limit its scope to operations of renovation and repair of private dwellings.”
I and other people read that to mean that the Government could have presented more documents, better evidence and a better case because the Commission was open to it. I repeat:
“However, the documents in the file submitted to the Court, without more”—
without more documents, it does not say more details—
“make it impossible for the Court to consider that argument”.
The information and the will from the Government to make the case were lacking. They failed, and they should take responsibility for their failure and stop blaming the European Union, the Commission and the European Court of Justice. It is like in any case: they lost in court. They did not have somebody protecting, proselytising, and prosecuting their case, and they lost. They are responsible for the fact that this order is before us today. They should take responsibility and ’fess up to their failures.
Jesse Norman
I thank all colleagues who have spoken in the debate. Let me start in reverse order, with the issues raised by my right hon. Friend the Member for Newbury. He is absolutely right to highlight the extent to which this country has been in the vanguard of legislation and change to combat climate change and to improve our energy efficiency, often ahead of the EU—he is right to focus on that and I identify to a degree with his experiences. He is also right to suggest that it is quite wrong to imply that somehow our officials or lawyers are soft on these matters. When we send legal teams in to negotiate or fight battles, that is done at the highest level in the European Court of Justice and with the gloves off, as one might expect from any high-quality legal adviser or barrister. The same is true of policy officials. We have a rule-of-law society, possibly more developed than anywhere else in the EU. That is why, as a general matter, we take it upon ourselves to be compliant with EU law and in good time.
My right hon. Friend raised two interesting ideas. One was a grant scheme on the model of the churches scheme that he described; the other was whether batteries should somehow be accommodated by HMRC to create a new battery industry. Both are interesting ideas; they are tangential to the scope of this debate but I am happy to take them away and write to him with proper advice about whether we could do something in both areas. We will need to, and want to, comply with relevant EU law, but within that there would be some scope for discussion and I would be happy to take that up with him.
The hon. Member for Aberdeen North raised a series of more technical questions. First, I will ask my officials to make sure that the link to the tax information impact notes has been corrected. She asked about the impact on industry; if she has specific impacts in mind, she is welcome to write to me about her constituency or Scotland more generally and I will be happy to discuss that. In this case, the Government consulted twice: once on the policy and once on the statutory instrument. I assure the hon. Lady that officials meet the industry regularly and have shared aspects of the negotiation as they have gone forward, to bring that consent with them.
The hon. Lady closed by asking about the logic of the 60% figure, which is an improvement on the original EU suggestion. As I think she understands well, having read the explanatory memorandum and researched the matter, EU VAT law allows the reduced rate to apply to all installation costs except where the cost of the goods is significant. The question is: what does “significant” mean? The original suggestion was 50%; in negotiation, that was pushed up to 60%. That was a better outcome than was anticipated—certainly a better outcome than was anticipated by the other side. Our judgment has been that it strikes the right balance—certainly the right negotiable balance—between the twin concerns of complying with EU law and minimising any adverse impact on UK businesses.
It is important to note—certainly, the comments of the hon. Member for Bootle show that it is easy to forget—that we are talking about a very small change in terms of impact. Some 95% of installations are projected to be unaffected by this change, and its overall effect on the Exchequer is negligible—less than £5 million. As we have spent £30 billion supporting renewable energy over the last few years, one can see the magnitude of the contrast.
I come now to the comments of the hon. Member for Bootle. This is our first debate together, and I hope future debates are not characterised by the approach that he has taken today. There was a lot of bombast and windbaggery in his remarks, and I do not think it dignified him or the debate. Let me pick up some of his points. First, he tried to suggest there was great conflict in the position into which we have been forced not merely by EU regulation, but by a prolonged process of litigation and negotiation.
The hon. Gentleman contrasted our position with other aspects of Government policy over the past few years. Let me remind him that this is the only Government to announce that the country is exiting the coal industry entirely. There is the Renewable Transport Fuel Obligation Order 2007, the Energy Act 2013 and the “Road to Zero” transport strategy—a vast array of measures have been taken to comply with our international obligations and electrify the economy.
Wind power, particularly offshore wind—an area with which I was closely associated when I was a Minister at BEIS—has been a conspicuous success story precisely because we have taken the kind of energetic international action that characterised the forward position we have taken as a country, to which my right hon. Friend the Member for Newbury referred. Before the hon. Member for Bootle accuses the Government, he needs to tell us whether he would accept the EU Court judgment if he were part of a Labour Government, or whether he would propose allowing the situation to drag on and endure significant infraction costs.
Peter Dowd
The premise of my argument is quite simply that we are in this position because the Government failed to do proper negotiations and discussions. That is the whole of it. The Minister is now asking me to close the door after the horse has bolted, but it is his horse and his door.
Jesse Norman
I am absolutely not proposing that. Members will recall that the original infraction case has dragged on for many years. It is a problem that any Government would have faced. The hon. Gentleman is not prepared to say whether a Labour Government would accept the EU judgment or incur the infraction costs, which illustrates the hollowness and bombast of his position. We are in this position despite a very prolonged process of litigation and negotiation, and it is fatuous to suggest that he would somehow work more closely with the EU than the Government have done to agree proposals. He was not in the Court when the judgment was made, and he was not present at the negotiations. He has absolutely no reason to second-guess the intelligence, wisdom, advice or good intentions of the officials and legal advisers who were involved. We must treat what he says as essentially evidence free.
The hon. Gentleman refers to paragraph 37 of the European Court judgment. From what he read out, it appears to concern zero rates of VAT, which does not bear on the matter at all. This issue has been taken to the highest level in the EU judicial framework: the European Court of Justice itself. A better outcome has been negotiated than was originally sought. The order will have a negligible impact because 95% of installations will not be affected. I therefore commend it to the Committee.
Question put.