Tax Avoidance and Evasion
John Bercow Excerpts(8 years ago)
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John McDonnell
Let me press on. I have given way to the hon. Gentleman once.
We do not have access to the specialist services that Mossack Fonseca and other companies provide. We cannot negotiate with HMRC when and how much to pay in tax. However, for the global elite, tax avoidance is as much a part of their world as the yachts and the mansions. This world is a corrosive influence on our democracy. The more the super-rich can escape the burden of taxation, the more it falls on the rest of us in society.
It is morally wrong that a billionaire oligarch should be paying proportionately less in taxes than the migrant cleaner of his mansion. It is a disgrace that an immense global corporation such as Google should pay no corporation tax for nearly a decade, while small businesses are chased for tiny amounts. It is an affront to the basic principles of our democracy that large corporations should be able to negotiate sweetheart deals with HMRC. [Interruption.] It is also a corrosion of democracy when a revolving door apparently exists between HMRC, charged with collecting taxes—[Interruption.]
Mr Speaker
Order. It is very unseemly when the shadow Chancellor is addressing the House for there to be a side exchange between a member of the Opposition Front-Bench team and the hon. Member for South Suffolk (James Cartlidge). He must not get into this bad habit. His father-in-law is a distinguished Member. He will tell him how to behave properly, and I will do so as well.
John McDonnell
It is always best to keep the in-laws on-side, Mr Speaker.
It is a disgrace that an immense global corporation such as Google should pay no corporation tax for a decade, while small businesses are chased for tiny amounts. It is an affront to the basic principles of our democracy that large corporations should be able to negotiate sweetheart deals with HMRC. It is also a corrosion of democracy when a revolving door apparently exists between HMRC, which is charged with collecting taxes, and major accountancy firms whose business depends on minimising taxes. HMRC’s last director went to work for Deloitte, and now we find that the executive director appointed by HMRC to oversee its inquiry into the Panama leaks is a former adviser to tax havens who believes that tax is a form of “legalised extortion”. The structures of Government are being bent out of shape by tax avoidance. Decisions are warped around the need to protect the interests and wealth of the super-rich and of giant corporations. Democracy becomes corroded.
On party donations, the Conservatives receive more than half their election campaign funding from hedge funds. In public view, here in London, its party leadership has made loud and repeated noises about tax avoidance, yet its MEPs in Brussels have voted six times, on instructions from the Treasury, to block the EU-wide measures against tax avoidance. As we have heard in evidence this week, the Prime Minister lobbied the EU Commission in 2013 to remove offshore trusts from new tighter EU regulations on avoidance. The Conservatives’ own record reveals that people no longer trust them on this issue. Not only have they impeded efforts to clamp down on tax avoidance, but these schemes directly implicate senior figures in the Conservative party. Several Conservative party donors, three former Conservative MPs and six Members of the House of Lords are among those with connections to companies on the books of the offshore law firm Mossack Fonseca.
As the super-rich flee their obligations to society, the burden of taxation is pushed elsewhere. As I have said, independent assessments of the tax and benefit changes introduced since May 2015 show that the poorest 10% are forecast to see their incomes fall by more than 20% by 2020, with 80% of the burden falling on women. It is the poorest and those least able to carry the burden who will suffer the most under this Government. An economic system that allows tax avoidance on this scale is one in which the inventor and the entrepreneur come second to the owner of wealth, the worker comes second to the plutocrat and the taxpayer come second to the tax dodger. It is a system in which inherited wealth and privilege, rather than talent and effort, are rewarded.
There has been criticism of the last Labour Government, and I was not enamoured of all their economic policies, but they did take measures against avoidance. Their measures on corporation tax avoidance are forecast—not by me, but by the Financial Times—to raise 10 times as much revenue as the present Chancellor’s schemes.
The Panama leaks must act as a spur to decisive action. In response to the leaks, the Government have stepped up their rhetoric on tax evasion but much of what has been announced falls short of what is needed or repeats existing announcements. I remind Ministers that page 223 of the Office for Budget Responsibility report that accompanied this year’s Budget outlined a disclosure scheme for companies operating in Jersey, Guernsey and the Isle of Man. The report said that owing to HMRC’s consistent underfunding, it did not have the resources to follow up on the links of the scheme. I again offer some words of advice to those on the Government Front Bench: fewer press releases and more action. It is time to move on and to close down tax havens and clean up this muck of avoidance.
Let us take this step by step. We need an immediate and full public inquiry into the Panama leaks. The Government’s proposed taskforce will report to members of the Government, the Chancellor and the Home Secretary, who are members of a party funded by donors featured in the Panama papers. To have any credibility, the inquiry must be fully independent. We must shine a light on, and start to prise apart, the corrupt networks that operate through tax havens. Part of that will involve creating a proper register of MPs’ interests. Members of this House should not be able to hide behind spurious claims of privacy. We want HMRC to be properly resourced to chase down the tax avoiders, with a new specialist unit dedicated to the task. Foreign firms bidding for Government contracts here should be required to name their owners. Full, public, country-by-country reporting of earnings and ownership by companies and trusts is a necessity if fair amounts of taxation are to be charged.
The measures announced by the EU this week do not go nearly far enough, requiring only partial reporting by companies. The turnover threshold is far too high, and Labour MEPs in Europe will be pushing to get that figure reduced much more to make it more difficult for large corporations to dodge paying their fair share of tax. Banks need to reveal the beneficial ownership of companies and trusts they work with. That means creating a public register of ownership of companies and trusts, and not only of companies, as the Government are currently enforcing. The Prime Minister has a role to play in this, as it was he who lobbied for the exclusion of trusts from the proposed EU measures. Labour will work alongside leading tax experts to lead a review into publishing a public register of the trusts too often used to avoid paying tax and reduce transparency in our tax system.
We must ensure that Crown dependencies and overseas territories enforce far stricter minimum standards of transparency for company and trust ownership. The Government’s current programme for reform is being laughed at by the tax havens. As my right hon. Friend the Leader of the Opposition said today, it was only this week, after signing a new deal on beneficial ownership, that the Cayman Islands Premier Alden McLaughlin celebrated a victory over the UK, saying:
“This is what we wanted, this is what we have been pushing for three years”.
The truth is that the Government are playing into the hands of those who want to abuse the tax system.
Finance (No. 2) Bill
John Bercow ExcerptsMonday 11th April 2016
(8 years ago)
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Kirsty Blackman (Aberdeen North) (SNP)
It is a pleasure to speak in this Second Reading debate. I am delighted that you are back in the Chair, Mr Speaker, not least because I have written “Mr Speaker” throughout my speech and I get totally confused if a Deputy Speaker is in the Chair.
Kirsty Blackman
I am sure that they are many and varied, Mr Speaker.
As a relative newbie to Parliament, I am fascinated by the fact that this House manages to have incredibly complicated and incredibly cumbersome processes and hoops to jump through in order to get legislation through, while at the same time managing to ensure that those processes are entirely opaque and provide the general public with the smallest possible amount of useful information.
I want to speak about a number of things: oil and gas—you will not be in any way surprised by that, Mr Speaker; the travel and subsistence changes, for those in rural areas in particular; and the savings changes, which the hon. Member for Leeds West (Rachel Reeves) mentioned. The UK Government are attempting to undertake a savings swizz. This is not a Budget for hard-working people and young people at all. Increasing the level of tax-free savings will help only those who can afford to save thousands of pounds every year. Most hard-working people will not be helped by this. Just because somebody earns a high income, it does not necessarily mean that they are hard-working. A lot of hard-working people earn pretty low incomes.
Folk who are earning the Chancellor’s pretendy living wage, which is not recognised as being enough to live on, struggle to make it to the end of the month, let alone to have spare money to save for the future. The help to save scheme included in the Budget is welcome, but folk working the minimum 16 hours a week on the pretendy living wage will be earning only £500 a month, and they are hardly likely to be able to spend 10% of that income on savings rather than on immediate concerns.
The tax measures in this Finance Bill disproportionately reward unearned income, and they continue to ensure that tax avoidance is not illegal—only immoral. Many of my constituents find themselves living from pay cheque to pay cheque, and they cannot imagine having the comfort enjoyed by those with six-figure salaries, large savings and stocks and shares—in much the same way, I presume, as those in charge of the Finance Bill have no idea what is like to exist on a low income with a lack of long-term financial security and the absolute necessity of reliance on the state. Some people are unable to have a cache in the bank to fall back on. Rather than all being in this together, too many Members of this House cannot comprehend the real world that most of my constituents live in, and they could do with being given a reality check before they are allowed to make tax policy. The changes to ISAs and the uplift are hardly useful to anyone. As Opposition Members have said, ISAs disproportionately benefit those earning above £150,000 a year. That is not helpful for hard-working, low-income families or for young people.
I am delighted that repetition is encouraged in this place, because I am going to talk once again about oil and gas. That is quite useful, because I can recycle this speech fairly regularly—[Interruption.] Yes, I am also recycling the speech made by my hon. Friend the Member for Aberdeen South (Callum McCaig). Oil and gas are vital for Aberdeen and for Scotland as a whole. Some of the measures in the Finance Bill go a little way towards easing the situation for oil and gas companies in the current economic climate. Nobody quite knows when the oil price is going to go back up, or what level it will reach when it finally does so. Oil prices are completely unpredictable. The UK Government need to show that they are committed to the future of the industry in the North sea in order to ensure investor confidence.
There is positive movement in the reduction of the supplementary charge from 20% to 10%, but oil and gas companies will still pay significantly more than most companies. The oil and gas industry is vital to Scotland, particularly to the north-east of Scotland and my city of Aberdeen. Back in 2014, Sir Ian Wood published the Wood report. The Energy Bill, which is currently in ping-pong and will be discussed again ben the hoose, tomorrow, cements the position of the Oil and Gas Authority in legislation. The principal objective of the OGA, which arose from the Wood report, is to maximise the economic recovery of UK offshore oil and gas resources. That can only happen if the UK Government seriously consider the tax regime for companies extracting oil and gas in the UK continental shelf.
The tax regime has been built up over the last half century, with measures being added and taken away as the Government of the day make changes to the decisions of Governments past—or, in some cases, to their own decisions. Now that the UKCS can be considered a mature basin—in fact, some are calling it super-mature—I suggest that now is the time to look afresh at the fiscal measures in relation to the taxation of the oil and gas industry. Until the UK Government can commit to doing so, some issues need to be looked at as a matter of urgency. If we are doing only minor overhauls, rather than a major overhaul, these are the key issues for us.
Enhanced oil recovery is mentioned in the OGA corporate plan for 2016 to 2021. The OGA intends to issue an enhanced oil recovery strategy to the industry in the first half of this year. If the UK Government took action so that the activity of enhanced oil recovery could count towards a tax allowance to offset against income, rather than count as operational expenditure, I suggest that the OGA’s strategy could easily be more ambitious, but still achievable. Enhanced oil recovery is very important for the UKCS given its super-mature situation. We really need to work in different and new ways to get out the oil, which is much more difficult and costly, so we would benefit from a fresh look at the tax regime in relation to how that spend is considered.
Finally on specific issues relating to the offshore oil and gas industry, I welcome the fact that HMRC will produce updated guidance notes on the decommissioning allowance. It is very important, particularly for new entrants to the industry, to have the ability to take on such assets in the North sea and exploit them for a longer period than a big player perhaps would, so I am really pleased that that is coming in. On decommissioning terms, we suggested during the passage of the Energy Bill that tax incentives and allowances should be put in place in relation to decommissioning in the UK, so that as much as possible takes place in the UK and benefits UK companies. It is really important that the UK becomes very good at decommissioning, because we can then export that expertise. I would very much appreciate it if the Government considered incentivising UK spend in whatever ways are possible. We will talk about that during the next stage of the Finance Bill.
To move on from oil and gas to a more general point, I want to flag up issues about the Government’s proposal on the taxation of travel provided for those paid through intermediaries. There is no question but that this change will hit rural communities disproportionately. It is perfectly legitimate and sometimes incredibly sensible to pay individuals as contractors or through intermediaries, but I suggest that the Government have not really thought this one through or have not grasped quite how rural some of these communities are. It can absolutely be necessary for people doing work in rural areas to stay overnight to fulfil a task that can in no way be done as part of a daily commute. I understand what the Government are trying to do on daily commutes, but that does not apply in such situations. For example, on some islands off the coast of Scotland, a locum doctor or relief teacher has to stay because there is no regular transport. Surely they should receive tax relief on their hotel stays: it is not a daily commute, but a necessary part of the job, particularly if they cannot possibly get home because there is no boat.
For communities such as Shetland in particular, where there is heavy reliance on oil and gas companies, that may have a significant negative impact. Due to the level of expertise and specialisation in oil and gas, many people in the industry are employed as contractors—disproportionately so—and removing the tax allowance that workers can claim when they stay overnight in Shetland on the way to a rig would be a bizarre way to support either the oil and gas industry or small rural communities. A specific case could be argued for our rural communities, many of which are not diverse in their employment, and such a change may have a significant and disproportionate negative impact on them.
The SNP is concerned both about the future of the oil and gas industry and about the fate of contractors in rural communities. When we go into Committee, we will table new clauses and amendments. The Chancellor has claimed that he is going to listen and learn. We will test him on that claim.
John Mann
So the losses are not as big as they were but they are still losses. Imagine if I had put that argument in 2009 or 2010—I do not have the references with me so I will not waste time by quoting from them, but they are in Hansard because the then shadow Chancellor and the Leader of the Opposition, and many Back Benchers, were happy to make precisely that point. That is a fundamental economic weakness, and it is putting this country at a huge, long-term economic disadvantage compared with our competitors.
My proposal about city regions and broadband was not a shopping list issue; it is fundamental to making this country economically competitive again. How can we have new growth industries in those areas when villages like mine cannot even get simple broadband most of the time and people struggle to get a mobile phone signal? This is not where the world is at any more, and this represents a fundamental economic failure for this country.
There is one more failure. I will end—this is a slightly long ending, Mr Speaker—on what I am sure all Members will agree is an incredibly important point, namely the failure of this Government to tackle tax avoidance and offshoring. We have heard a lot of the theory, but let me tell the House what the people who do the advising on tax avoidance say. They are the best source on this, rather than politicians of any party or persuasion. They are the ones competing for the business of the very people who want to minimise their taxes by offshoring because they are wealthy enough to do so.
Those tax advisers are eulogising the fact that the agreements reached with the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, the Turks and Caicos Islands and Montserrat are non-reciprocal. According to HSBC, that means that UK financial institutions will not have any reporting obligations under the terms of the agreements. That is a fundamental weakness in comparison with what the Americans have done. We are not the leaders in this; we are well behind what the United States has done to enforce transparency.
The British overseas territories that I have just mentioned rely on us for their defence. We pay for their defence, so we have proper leverage. Those territories might be anachronistic quirks of history, but if they wish to remain part of the United Kingdom, they will need to play by our rules and, if you like, speak our language. I am a strong supporter of defending those territories, be it the Falkland Islands, Bermuda or the Cayman Islands, but it is unacceptable to have non-reciprocal agreements for residents of the Caribbean tax havens. There is nothing to address that in the so-called advanced and world-leading proposals in this Government’s previous Budgets that have already been implemented, and there is nothing in this Budget or in today’s announcements that will deal with the matter.
I also want to talk about the Liechtenstein disclosure facility. What does that have to do with those territories and tax havens? I thought that it probably did not have a lot to do with them because someone would have to set up an interest in Liechtenstein in order to qualify for the disclosure facility, but then I read about where we are with financial compliance obligations. Those who advise people who want to avoid paying taxes are absolutely clear about this. Let me quote from an article on a website called taxation.co.uk:
“It may be better to come forward under the LDF now, and clients who could benefit need to be identified.”
Another article says:
“Although there are several ways to make voluntary disclosures to HMRC, the LDF continues to offer extremely beneficial terms, despite the new restrictions on eligibility, and remains one of the most direct routes of disclosing to HMRC”,
and that
“participants…will…achieve immunity from prosecution…There is no need to have held an offshore asset at all in order to access the LDF.”
The only people who cannot do so are those who have already been criminally investigated by HMRC.
There are many examples of this, and that article explained in huge detail how, for example, a self-employed person could theoretically go for a Liechtenstein disclosure facility and—this has been widely advertised across the Caribbean and in other tax havens—why people should shift to it, because for the last three years, until 5 April this year, people could minimise their tax cheaply and beneficially through early disclosure. That is what the tax experts say, what they have advised people to do and what has been going on for the last three years. When the figures finally come out, which they will, we will see the vast numbers who have used that loophole, which was deliberately set up and advertised as such.
When it comes to dealing with tax avoidance, the Government talk tough but play soft. They give the nod, officially, allowing people to circumvent the system. As long as people pay for the right lawyers in countries such as Panama, they get that advice, and because they are competing, it is one of the few things that is publicly available. My advice to the House is this: let us remove these potential and actual loopholes forever. That is why this Bill is wholly insufficient and why the Government are failing on debt and the deficit. The tax is there; people are avoiding it legally. We have a duty to turn that around—a duty to the British economy and the future innovators and entrepreneurs who are being squeezed by the recession. They are the biggest losers of all in this, because they are the ones with brilliant ideas who cannot compete with those using tax loopholes and squeezing them out.
I will end on this, Mr Speaker—[Hon. Members: “Hear, hear.”] I know that Tory Members don’t like it up ’em, but they are failing the British economy, failing innovators and failing entrepreneurs, crowding them out and allowing tax avoidance on a massive scale. They have been caught and had their fingers burnt. There is a minimising—[Interruption.] I hear advice from a sedentary position. The Government have not delivered on tax avoidance, and that is why this Bill must be opposed.
Mr Speaker
The last speaker in the debate before the Front Benchers—not that I am hinting at anything in any way, of course—is Mr George Kerevan.
Section 5 of the European Communities (Amendment) Act 1993
John Bercow Excerpts(8 years, 1 month ago)
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Several hon. Members rose—
Mr Speaker
Order. I will just point out for the benefit of the House that we have an hour and four minutes of the debate left, which should be enough.
Budget Resolutions and Economic Situation
John Bercow Excerpts(8 years, 1 month ago)
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Mr Speaker
Before I call the Chancellor of the Exchequer, I should inform the House that I have selected amendments (b) and (a), so both can be debated together with the Budget motions today. With the leave of the House, I will call the shadow Chancellor to move amendment (b) after the Chancellor has opened the debate. At the end of the day’s debate, the Question will first be put on amendment (b). As long as time permits before 7 pm, I shall then call the hon. Member for Dewsbury (Paula Sherriff) to move amendment (a) formally, and the Question on that amendment will be put. The House will then proceed to decide on the Budget resolutions.
Tim Farron
I thank the Chancellor for giving way, and I want to associate myself with the remarks that he made earlier about the appalling situation in Brussels.
Does the Chancellor agree with me that the one thing that is more dangerous for our economy than his remaining Chancellor is that we might leave the European Union; and does he agree that his being called out by his former colleague as acting not in the economic interests of the country, but in a short-term political way, introduces a risk that the referendum will be a referendum on him, not on the future of our role in Europe? Will he act in the national interest and resign?
Mr Speaker
May I remind Members that interventions should be brief? We want to hear from both Front Benchers, and I want to hear from dozens of Back Benchers. I repeat that interventions should be brief.
Mr Osborne
That was like one of those interminable interventions at ECOFIN. I happen to think that it is better to be in that council than not, but that is a debate for another day. We are talking here about the reforms we are making to welfare and to our economy.
Mr Osborne
I have already said that we are not going ahead with those changes. [Interruption.] I have addressed these issues. The truth is that that family and many more families are getting increased support under this Government. We would not be able to provide any of that support unless we had a strong economy and we controlled public spending, because the people who suffer most when the economy—[Interruption.]
Mr Speaker
Order. I apologise for having to interrupt the Chancellor. [Interruption.] Order. Members are yelling—in some cases, from sedentary positions—very noisily. If people put questions to the Chancellor, they must leave him to respond. The same will go for Government Back Benchers when they no doubt challenge Members speaking from the Opposition Benches. Let us try to restore some sort of order to this debate.
John McDonnell
Mr Speaker, you heard me share the sentiments of the whole House on the issue of Belgium. To bring that into the debate as a political point at this stage is unacceptable. [Interruption.]
Mr Speaker
Order. I made it clear earlier that attempts to shout the Chancellor down were unacceptable. That was made very, very clear and I do not think anybody would doubt or deny it. I make it similarly clear that no attempt in this Chamber will be successful if it is an attempt to shout down the shadow Chancellor. Get the message: it ain’t gonna happen.
John McDonnell
On that Friday before last, there was outrage among disability groups—the Multiple Sclerosis Society, Parkinson’s UK and Disability Rights UK. Why? Because all of them, like many of us, had gone through that process of agreeing the criteria—at least coming to some compromise on what would constitute the criteria for access to this benefit. But the Chancellor moved the goalposts, those already agreed through consultation. Disabled people and their families have been sick with worry about the threats to their benefits.
Tom Tugendhat (Tonbridge and Malling) (Con)
The hon. Gentleman has called into question the morality of the leadership of my right hon. Friend the Chancellor, but would the hon. Gentleman please discuss with this House the morality that allows him to stand with bombers who murdered my friends in Northern Ireland and to question the integrity of the Chancellor? [Interruption.]
Mr Speaker
Order. Before we proceed further, perhaps I can just say to the House, on my own account and on the basis of sound procedural advice, that we must stick to the matter of the Budget. [Interruption.] Order. I do not require any comeback or any comment, agreement or disagreement. Let us proceed in a seemly manner with the debate. That is in the House’s interest, and that is what the country has a right to expect.
Mr Speaker
Order. [Interruption.] Order. Leave me to deal with this. Mr Cleverly, I have known you for years and you have always struck me as a very polite fellow. You are getting over-excited, young man. You will have an opportunity to intervene, perhaps in due course, but you don’t do it like that. Learn from a few old hands.
Pete Wishart
I am surprised that the shadow Chancellor is taken in by some of the crocodile tears from the Tories and this concern for the disabled. Surely he agrees that this is nothing to do with the Tories’ new-found concern for the disabled in this country—it is all about their euro civil war.
Mr Speaker
Let me say to the right hon. and learned Gentleman that he has never been in trouble with the Speaker.
Mr Clarke
I am trying to be reasonably concise rather than too expansive. I apologise to the right hon. Member for Leicester East (Keith Vaz).
I tried to think of what I would have done had I been Chancellor in the present situation. Before the Budget was delivered, I expected a much tougher Budget. Thank the Lord that I am not in my right hon. Friend’s position; I never had to face problems of the kind that he inherited from his predecessor. My instincts are classic, traditional stuff for anyone for whom the iron of the Treasury has entered the soul. This is the first Budget after an election, we have not made fast enough progress in eliminating the deficit and debt, and we will not have sound future progress with a modern rebalanced economy unless we have done that, so my first thoughts would have been to get on with it.
I would have introduced a Budget, as I frequently did in my time, raising taxes and cutting public expenditure. I am glad to hear, for reasons that I shall return to later, that my right hon. Friend has committed himself to his continuing long-term objective, and has decided to pause. I thought this was going to be a popular Budget. People speculate as to why we chose an easier path. [Interruption.] The Chancellor has in the short term relaxed fiscal policy. It is good that the Bank of England is retaining a very relaxed monetary policy, but it will tighten it if we were to abandon fiscal discipline. In the short term, my right hon. Friend has lowered taxation and lowered Department spending targets for cuts. He has eased off on public spending and lowered taxation. I was surprised by that.
I assume that this was partly caused by the considerable uncertainty that the economy faces. No one has addressed that issue in any of these debates, although the Chancellor did in his Budget speech. The global economy is slowing down, and mainly as a consequence of that, the British economy is slowing down. The uncertainties for our economic prospects over 2016 are very concerning. There are many uncertainties, all of which would threaten most of the developed economies if things go wrong. We still do not know whether China, for example, is going to achieve a soft landing; I think it will. In the emerging markets—there are associated problems with emerging market debt—there is volatility and some unsoundness in the financial world.
And there is the risk of Brexit. I am very glad that the Governor of the Bank of England decided to reassure people by setting out publicly that he was prepared to take action if we had a flight of capital from this country should people be alarmed about the referendum. So far, such risk has led only to a big decline in the value of sterling and the freezing of most people’s investment plans. One would be a bit of an idiot to invest in the British economy in anything that had the slightest risk when we do not know what the circumstances and trading patterns are going to be in six months’ time.
I assume one reason why my right hon. Friend took a more relaxed view than a traditional Chancellor would have done and did not make those big spending cuts or increase taxation—in fact, he eased taxation for businesses and the low-paid—was to avoid the mistake of being too severe when circumstances might well worsen as the year goes on. That underlines the point that, in the long term, one cannot forecast and fix these kind of things further forward.
A great deal of the debate around the Budget centred on the forecasts and the Office for Budget Responsibility. The fact that the OBR’s forecasts keep changing so rapidly just underlines what I am saying about the uncertainties for the immediate future. Fortunately, thanks to my right hon. Friend, the British economy has been the fastest growing developed economy in the last 12 months, and we are probably less at risk than most others. However, the fact remains that this was a time to be cautious. Personally, I would have maintained the squeeze—it has all been put off until the latter half of this Parliament, and into the next if we are not careful—because so long as the economy continues to grow, and there is a reasonable prospect that it will, we should not be running a deficit of this percentage of GDP, piling up more debt for our successors.
My doubt is whether this pause was totally justified. I accept that it probably was; but certainly we must resume things. I listened to a shadow Chancellor who plainly does not have an idea in his head about how he would save any money or do anything other than continue spending and borrowing. It is totally profligate stuff, as we have seen very much in the past.
I am very glad that my right hon. Friend made the changes to business taxation. When I was in office, I put up taxes, but I never put up business taxes because I was trying to encourage growth. We still need to make our economy stronger, so it is welcome that the Chancellor stepped in, keeping our corporation tax level at a competitive rate. I particularly welcome the help he has given to small and medium-sized businesses. Encouraging business is, of course, the best way of protecting ourselves against economic risks for the future in this uncertain world.
My right hon. Friend has not been wholly generous towards big business. He and the Government have been leading in the OECD on attempts to tackle the problem of tax evasion and tax avoidance on the part of big multinational companies. He has incorporated the first serious attempt for a long time to attack the problems of tax relief on interest when it is exploited and misused, on royalties and on past losses. I get told a lot about how the Chancellor should be collecting more from big international companies, but no Government have done a blind thing about tackling this tax avoidance for the past 20 years. This Government are leading international discussion towards agreement, which is what is needed, and in this Budget, the Chancellor has started to act.
We are told that we are relieving tax on the rich, but everybody knows—I certainly know, and not just from the newspapers—that the Treasury has been looking at the idea of doing more on tax relief for the wealthy when they contribute to their pension funds. If they have very high earnings, tax relief on pension funds is the way of avoiding tax and it is a great way of ensuring that 45% tax is not paid on a very considerable part of one’s income. That was the case, but we have now put a cap on it. I feel that we are still rather too generous, but in today’s politics that was another lobby, and when someone leaked it, it was seen off by the pensions industry in about 10 days flat. So my right hon. Friend was not allowed—on that occasion, I suspect, because of fear about what would happen on this side of the House—to proceed with fairly modest changes in tax relief for the rich.
As far as other tax moves that my right hon. Friend has made, on personal allowances and the thresholds for the higher rate, because the higher paid—the rich—now pay such a huge proportion of tax, it is almost impossible for Chancellors to ease the tax burden on the low-paid and the ordinary citizen without it being possible to demonstrate mathematically that they have done quite a lot for the rich as well. If Chancellors bought that argument every year, they would never move the threshold at which people start to pay tax, and they would never raise the 40% rate for the people who are currently in modest jobs and find that they are subject to a marginal rate of 40% because Gordon Brown started the habit of freezing the threshold in order to secure stealth taxation. Raising these thresholds is welcome, and I am glad that my right hon. Friend felt able to do it.
Other measures should be seriously canvassed. The pensioner benefits, to which I am entitled, are discussed every now and again. I am always told that we have put things in a manifesto, but I have yet to meet a candidate or an elector who read the last general election manifesto, which, although it seems to contain considerable detail, was certainly not crucial to my constituency victory, or, I suspect, to anyone else’s. We have ruled out ever raising income tax, ever raising national insurance, ever raising VAT; we appear to have ruled out doing anything at all that would stop the very wealthiest people having free bus passes and receiving the winter fuel allowance. I am not going to advocate the breaking of manifesto pledges, but I know of no prosperous pensioners, and certainly none who are in full-time employment like me, who would object to, at the very least, those benefits being made taxable.
I think that there is a case for considering those measures and various alternatives, but I will not risk going into it any further, first for reasons of time, and secondly because, given today’s populist politics, I fear that if I do, some lobby yet unknown to me will descend on me in the next two or three days in order to mount a campaign, through our ridiculous media, to blow that case out of the water.
Of course we must judge the Budget on its own merits, and I understand why my right hon. Friend has got to where he is. No two Chancellors have ever done the same in respect of every measure. Within our system, a Chancellor makes an overall judgment, and this Chancellor retains my full confidence: I am prepared to support his judgment.
I have another reason for supporting my right hon. Friend’s judgment. As I have already said, the present Government are in a strange position. Absolutely no alternative proposition is being advanced by anyone outside. Some pundits, and, as a result, some politicians, seem to believe that we are wrong to maintain our target of a balanced budget over the cycle, or however we choose to put it. They suggest that, actually, there are no problems, and the answer is simply always to run a deficit, on and on and on. After all, it is free money. It is a bit troublesome that interest rates might return to normality one day, but meanwhile, just let it pile up: it will sort itself out.
People on the far right say “Tax cuts, that is all you want. Tax cuts will inspire such tremendous entrepreneurship that jobs will be created, wealth will be created, and it will all be paid back. You will not be in debt for long.” On the left, the argument is “Boost every welfare payment, increase public spending on every public service, and that will generate such demand from the grateful taxpayer recipients that they will pump it into the economy, and it will pay for itself.” That is Mickey Mouse economics, as practised by the last Labour Government, and it got us into this trouble that we are still—thanks to my right hon. Friend—getting out of now.
As for my final reason for backing my right hon. Friend’s judgment, his record, after eight Budgets and six years, is absolutely amazing. I must concede, having been one of his competitors at one point, that he is far the most successful departmental Minister in this Government to date. If anyone had said, when he took over the state of affairs that he took over more than eight Budgets ago, that he would stand here, in charge of the fastest growing economy in the developed world, with near-full employment and with employment at record-breaking heights, able to demonstrate the steadily improving state of not only the public finances but the condition of the poor, as well as the alleviation of social problems across the country, that person would not have been believed. It is a quite remarkable performance.
So I back my right hon. Friend’s judgment. I am also delighted that he is helping us all to avert the risk of Brexit in the forthcoming referendum, because, if the public were so ill advised to vote for it, that would be the only thing that could really send this economic recovery off the rails in a big way.
Several hon. Members rose—
Mr Speaker
Order. Before I call the spokesman for the Scottish National party, it may be convenient for the House to know that, owing to the level of demand among those wishing to contribute to the debate, a five-minute limit on Back-Bench speeches will have to take effect immediately after his own speech.
Chris Philp
I have spent the last 15 years setting up and running businesses. As someone who has done that, I am glad that it is this Chancellor who is sitting in that seat, because he is the man who has created jobs and helped businesses like mine! [Interruption.]
Mr Speaker
Order. May I just say, for the benefit of the House, that moderation and good humour are the precepts of “Erskine May”. Members on both sides of the House can learn from the right hon. and learned Member for Rushcliffe (Mr Clarke), who has just given a textbook example of a robust speech made with good humour. Many Opposition Members can do the same, and new Members could learn from them.
George Kerevan
Thank you, Mr Speaker. I serve on the Treasury Committee with the hon. Member for Croydon South (Chris Philp), and I did not take what he said personally.
If we do not get productivity, what happens? We do not get growth. The right hon. and learned Member for Rushcliffe (Mr Clarke) gave us a wise presentation, as he normally does, but he slipped up a little. He said that, under this Chancellor, the United Kingdom had experienced the fastest growth in the developed world. That is not true. As he phrased it, it is not true—unless, of course, Australia is not developed; unless, of course, the United States is not developed; unless, of course, Sweden is not developed; unless, of course, Korea is not developed; unless, of course, Spain is not developed. All those countries experienced faster GDP growth than the UK in 2015, largely because they experienced faster productivity growth. That is what this Chancellor has not delivered. That is not what this Budget contains. And that is this Budget’s weakness.
If we look at the failure of productivity growth in the UK under this Chancellor, we see that productivity is lagging in practically every commercial and industrial sector. Crucially, productivity has been falling by an average of 1% a year in the financial services industry—our flagship industry, our key service industry, the industry that is leading our service exports. This Chancellor has devoted a lot of time and effort to reconstructing the financial services sector—I grant him that—but what have we got? Falling productivity. According to the Office for National Statistics, productivity in the British financial sector, including insurance, is now behind the level of financial services productivity in France and Italy. That is not a great record, Chancellor. Here is the bottom line: if we do not have productivity growth, the cash economy will not grow, wages will not grow and income to the Treasury will therefore not grow.
Several hon. Members rose—
Mr Speaker
Order. I am afraid that, so that I can try to accommodate the maximum number of Members who have not yet spoken, I must reduce the time limit on Back-Bench speeches to three minutes, with immediate effect.
Rachael Maskell (York Central) (Lab/Co-op)
This was a Budget about words, not wisdom. I want to focus on that because we have now had six years of the Chancellor presiding over a very worrying economic picture while using a narrative to disguise the fragile place into which he has put our economy. It is also a Budget that exposed the worst aspects of the cruel, callous and uncaring Conservatives, crushing disabled people and some of the most vulnerable and economically disadvantaged groups in our society. Those actions over the past six years have worried me as the weaknesses in the structure of the economy have not been addressed and the economy has been used to deliver a political agenda, not productivity and not fiscal security.
This is leading to a risk shift, increasingly away from Government to local communities and individuals—those who cannot weather the storm. Politicians can use any words they want, but what lingers behind those words is what matters. Apprenticeships are not apprenticeships any more, the living wage is not a living wage, and affordable housing is unaffordable. Remember the phrase “long-term economic plan”? I will let hon. Members work that one out for themselves.
I know the impact of all this in my local community and on my local economy. York has a low-wage, insecure and high cost of living economy where housing is now inaccessible. We heard about the next generation being better off. With the debts that young people now carry and the difficulty in accessing housing, I was interested in the lifetime ISA, which will mean that the people who are least worse off will get £1,000, while those struggling with tax credit cuts and increased in-work poverty will feel the pinch.
I hang my head in shame at the way that disabled people are treated in the Budget. No compassion there. That takes me back to the economic picture which I worry so much about. The Chancellor has borrowed more than all Labour Chancellors put together throughout history, and wants to borrow even more now. The question is what he will do with that money. We know from our economic experts how to invest that money to lead not to a growing debt, but to growing productivity. When the Chancellor has had to cut his own growth targets twice in the past six months, from 2.4% to 2.2% and now to 2%, he is admitting that his economic plan is not working. He did not clear the deficit in the previous Parliament, and it seems that with this omnishambles Budget he will not do so in this Parliament either.
I am worried, and I am most worried about the people I represent. In six years of low productivity, their insecurity and risks are rising, the local economy in York is totally inequitable—a two-speed economy, as it is known, speeding up for those who are well off—
Greg Hands
It is always good to hear from the shadow shadow Treasury team. I can tell the hon. Lady that more will be outlined in the course of this year in the autumn statement. However, we remain on course—[Interruption.]
Mr Speaker
Order. Members are becoming a little over-excitable. The Chief Secretary must be heard.
Greg Hands
We remain on course to deliver our budget surplus in 2019-20, which is far more than Labour ever achieved. I would have thought that the hon. Lady would take the opportunity to congratulate the Government on the new commitment to flood defences in Leeds, which she did not mention.
I will be working to find a further £3.5 billion of efficiencies by 2019-20 so that we deliver that surplus by the end of this Parliament. That means that we keep our economy on course, and we refuse to pass on the burden to our children and grandchildren.
At the same time, we will continue to reward aspiration, back growth, invest in education and help people get on in life—because this is a Budget that backs Britain’s businesses. It cuts the burden of business rates by £6.7 billion over the next five years, taking 600,000 of our smallest firms out of business rates altogether. It cuts the rate of corporation tax even further, to 17% in 2020, giving us the most competitive rate in the G7 and benefiting more than 1 million businesses. Through a £1 billion North sea oil and gas package, it is a Budget that helps Britain’s largest industry succeed in difficult economic times; through cuts to both the higher and basic rates of capital gains tax, it encourages investment—the lifeblood of Britain’s businesses; and, through the abolition of class 2 national insurance contributions, it creates a simpler tax system and a tax cut of more than £130 for the 3 million-plus self-employed people in Britain—this Government stand squarely behind them.
This is a Budget that puts cash into people’s pockets. It raises the tax-free personal allowance to £11,500 from next year, and the higher rate threshold to £45,000. We recognise that money should be in savings accounts as well as in pockets, so this is also the Budget that creates the lifetime ISA, helping people to buy their first home or save for their retirement. This is a Budget that freezes fuel duty, helping people every time they fill up their tank. It is a Budget that supports responsible drinkers; helps the nation’s pubs and gives a further boost to the Scotch whisky industry.
I recall seeing on the morning of the Budget the Scottish National party’s lead spokesman saying that he had three asks in this Budget, and he listed them on Twitter. They were to freeze fuel duty, to keep down duty on Scotch and to have a fiscal package for oil and gas. We have met all three of his asks and much more, and this is a very good Budget for Scotland, too.
It is a Budget that strengthens our tax base, through reforming the tax system so that it is in line with the realities of global, 21st-century economics. As I said, in this Budget we take action on the scourge of obesity, which, as well as putting unsustainable pressures on the NHS, ruins people’s health and quality of life, and costs the country about £27 billion a year.
Mr Speaker
I am now required under Standing Order No. 51(3) to put, without further debate, the Question on each of the Ways and Means motions numbered 2 to 69 on which the Bill is to be brought in, and on the motions on Procedure and Finance (Money). I should point out that motion No. 13 includes a schedule. These motions are set out in a separate paper distributed with today’s Order Paper.
I must inform the House that, for the purposes of Standing Order No. 83U, and on the basis of material put before me, I have certified that in my opinion the following founding motions published on 16 March 2016 and to be moved by the Chancellor of the Exchequer relate exclusively to England, Wales and Northern Ireland and are within devolved legislative competence. I am referring, as I feel sure colleagues are keenly aware, to the following motions:
45. Stamp duty land tax (calculating tax on non-residential and mixed transactions);
46. Stamp duty land tax (higher rates for additional dwellings etc.);
47. SDLT higher rate (land purchased for commercial use);
48. SDLT higher rate (acquisition under home reversion plan);
49. SDLT higher rate (properties occupied by certain employees);
50. Stamp duty land tax (co-ownership authorised contractual schemes);
57. Landfill tax (rates); and the motion on Procedure (Future Taxation) relating to rates of landfill tax.
Any of these motions on which the House may divide will be subject to double majority voting. With the leave of the House, I will put the Question on motions 2 to 7 together.
The Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
2. Income tax (charge and main rates)
Resolved,
That—
(1) Income tax is charged for the tax year 2016-17.
(2) For that tax year—
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
3. Dividends etc.
Resolved,
That provision may be made about distributions (within the meaning of the Tax Acts), including provision about rates of income tax on dividend income (within the meaning of the Income Tax Acts).
4. Taxable benefits (application of Chapters 5, 6 and 7 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003)
Resolved,
That—
(1) Part 3 of the Income Tax (Earnings and Pensions) Act 2003 (employment income: earnings and benefits etc treated as earnings) is amended as follows.
(2) In section 97 (living accommodation to which Chapter 5 applies), after subsection (1) insert—
“(1A) In determining for the purposes of this Chapter whether this Chapter applies to living accommodation provided for an individual it is immaterial whether or not the terms on which it is provided constitute a fair bargain.”
(3) In section 114 (cars, vans and related benefits to which Chapter 6 applies), after subsection (1) insert—
“(1A) In determining for the purposes of this Chapter whether this Chapter applies by virtue of subsection (1) to a car or van made available to an individual it is immaterial whether or not the terms on which the car or van is made available constitute a fair bargain.”
(4) For section 117 substitute—
“117 Meaning of car or van made available by reason of employment
(1) For the purposes of this Chapter a car or van made available by an employer to an employee or member of an employee’s family or household is to be regarded as made available by reason of the employment unless subsection (2) or (3) excludes the application of this subsection.
(2) Subsection (1) does not apply where—
(a) the employer is an individual, and
(b) the car or van is made available in the normal course of the employer’s domestic, family or personal relationships.
(3) Subsection (1) does not apply where—
(a) the employer carries on a vehicle hire business under which cars or vans of the same kind are made available to members of the public for hire,
(b) the car or van in question is hired to the employee or member in the normal course of that business, and
(c) in hiring that car or van the employee or member is acting as an ordinary member of the public.”
(5) In section 173 (loans to which Chapter 7 applies), after subsection (1) insert—
“(1A) In determining for the purposes of this Chapter whether a loan is an employment-related loan it is immaterial whether or not the terms of the loan constitute a fair bargain.”
(6) The amendments made by this Resolution have effect for the tax year 2016-17 and subsequent tax years.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
5. Taxable Benefits (diesel cars)
Resolved,
That—
(1) In section 24 of the Finance Act 2014 (cars: the appropriate percentage), omit the following (“the repealing provisions”)—
(a) subsection (2),
(b) subsection (6),
(c) subsection (10),
(d) subsection (11), and
(e) subsection (15).
(2) Any provision of the Income Tax (Earnings and Pensions) Act 2003 amended or omitted by the repealing provisions has effect for the tax year 2016-17 and subsequent tax years as if the repealing provisions had not been enacted.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
6. Taxable Benefits (vans)
Resolved,
That—
(1) Section 155 of the Income Tax (Earnings and Pensions) Act 2003 (cash equivalent of the benefit of a van) is amended as follows.
(2) In subsection (lB)(a), for “2019-20” substitute “2021-22”.
(3) In subsection (1C), for paragraphs (b) to (e) substitute—
“(b) 20% for the tax year 2016-17;
(c) 20% for the tax year 2017-18;
(d) 40% for the tax year 2018-19;
(e) 60% for the tax year 2019-20;
(f) 80% for the tax year 2020-21;
(g) 90% for the tax year 2021-22.”
(4) The amendments made by this Resolution have effect for the tax year 2016-17 and subsequent tax years.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
7. Income tax (exemption for trivial benefits provided by employers)
Resolved,
That—
(1) The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
(2) After section 323 insert—
“323ATrivial benefits provided by employers
(1) No liability to income tax arises in respect of a benefit provided by, or on behalf of, an employer to an employee or a member of the employee’s family or household if—
(a) conditions A to D are met, or
(b) in a case where subsection (2) applies, conditions A to E are met.
(2) This subsection applies where—
(a) the employer is a close company, and
(b) the employee is—
(i) a person who is a director or other office-holder of the employer, or
(ii) a member of the family or household of such a person.
(3) Condition A is that the benefit is not cash or a cash voucher within the meaning of section 75.
(4) Condition B is that the benefit cost of the benefit does not exceed £50.
(5) In this section “benefit cost”, in relation to a benefit, means—
(a) the cost of providing the benefit, or
(b) if the benefit is provided to more than one person and the nature of the benefit or the scale of its provision means it is impracticable to calculate the cost of providing it to each person to whom it is provided, the average cost per person of providing the benefit.
(6) For the purposes of subsection (5)(b), the average cost per person of providing a benefit is found by dividing the total cost of providing the benefit by the number of persons to whom the benefit is provided.
(7) Condition C is that the benefit is not provided pursuant to relevant salary sacrifice arrangements or any other contractual obligation.
(8) “Relevant salary sacrifice arrangements”, in relation to the provision of a benefit to an employee or to a member of an employee’s family or household, means arrangements (whenever made, whether before or after the employment began) under which the employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of the benefit.
(9) Condition D is that the benefit is not provided in recognition of particular services performed by the employee in the course of the employment or in anticipation of such services.
(10) Condition E is that—
(a) the benefit cost of the benefit provided to the employee, or
(b) in a case where the benefit is provided to a member of the employee’s family or household who is not an employee of the employer, the amount of the benefit cost allocated to the employee in accordance with section 323B(4),
does not exceed the employee’s available exempt amount (see section 323B).
323B Section 323A: calculation of available exempt amount
(1) The “available exempt amount”, in relation to an employee of an employer, is the amount found by deducting from the annual exempt amount the aggregate of—
(a) the benefit cost of eligible benefits provided earlier in the tax year by, or on behalf of, the employer to the employee, and
(b) any amounts allocated to the employee in accordance with subsection (4) in respect of eligible benefits provided earlier in the tax year by, or on behalf of, the employer to a member of the employee’s family or household who was not at that time an employee of the employer.
(2) The annual exempt amount is £300.
(3) For the purposes of subsection (1) “eligible benefits” means benefits in respect of which conditions A to D in section 323A are met.
(4) The amount allocated to an employee of an employer in respect of a benefit provided to a person (“P”) who—
(a) is a member of the employee’s family or household, and
(b) is not an employee of the employer,
is the benefit cost of that benefit divided by the number of persons who meet the condition in subsection (5) and are members of P’s family or household.
(5) This condition is met if the person is—
(a) a director or other office-holder of the employer,
(b) an employee of the employer who is a member of the family or household of a person within paragraph (a), or
(c) a former employee of the employer who—
(i) was a director or other office-holder at any time when the employer was a close company, or
(ii) is a member of the family or household of such a person.
(6) In this section “benefit cost” has the same meaning as in section 323A.”
(3) The amendment made by this Resolution has effect for the tax year 2016-17 and subsequent tax years.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
8. Travel expenses of workers providing services through intermediaries
Question put,
That—
(1) In Chapter 2 of Part 5 of the Income Tax (Earnings and Pensions) Act 2003 (deductions for employee’s expenses), after section 339 insert—
“339A Travel for necessary attendance: employment intermediaries
(1) This section applies where an individual (“the worker”)—
(a) personally provides services (which are not excluded services) to another person (“the client”), and
(b) the services are provided not under a contract directly between the client or a person connected with the client and the worker but under arrangements involving an employment intermediary.
This is subject to the following provisions of this section.
(2) Where this section applies, each engagement is for the purposes of sections 338 and 339 to be regarded as a separate employment.
(3) This section does not apply if it is shown that the manner in which the worker provides the services is not subject to (or to the right of) supervision, direction or control by any person.
(4) Subsection (3) does not apply in relation to an engagement if—
(a) Chapter 8 of Part 2 applies in relation to the engagement,
(b) the conditions in section 51, 52 or 53 are met in relation to the employment intermediary, and
(c) the employment intermediary is not a managed service company.
(5) This section does not apply in relation to an engagement if—
(a) Chapter 8 of Part 2 does not apply in relation to the engagement merely because the circumstances in section 49(1)(c) are not met,
(b) assuming those circumstances were met, the conditions in section 51,52 or 53 would be met in relation to the employment intermediary, and
(c) the employment intermediary is not a managed service company.
(6) In determining for the purposes of subsection (4) or (5) whether the conditions in section 51, 52 or 53 are or would be met in relation to the employment intermediary—
(a) in section 50(l)(b), disregard the words “that is not employment income”, and
(b) read references to the intermediary as references to the employment intermediary.
(7) Subsection (8) applies if—
(a) the client or a relevant person provides the employment intermediary (whether before or after the worker begins to provide the services) with a fraudulent document which is intended to constitute evidence that, by virtue of subsection (3), this section does not or will not apply in relation to the services,
(b) that section is taken not to apply in relation to the services, and
(c) in consequence, the employment intermediary does not under PAYE regulations deduct and account for an amount that would have been deducted and accounted for under those regulations if this section had been taken to apply in relation to the services.
(8) For the purpose of recovering the amount referred to in subsection (7)(c)(“the unpaid tax”)—
(a) the worker is to be treated as having an employment with the client or relevant person who provided the document, the duties of which consist of the services, and
(b) the client or relevant person is under PAYE regulations to account for the unpaid tax as if it arose in respect of earnings from that employment.
(9) In subsections (7) and (8) “relevant person” means a person, other than the client, the worker or a person connected with the employment intermediary, who—
(a) is resident, or has a place of business, in the United Kingdom, and
(b) is party to a contract with the employment intermediary or a person connected with the employment intermediary under or in consequence of which—
(i) the services are provided, or
(ii) the employment intermediary, or a person connected with the employment intermediary, makes payments in respect of the services.
(10) In determining whether this section applies, no regard is to be had to any arrangements the main purpose, or one of the main purposes, of which is to secure that this section does not to any extent apply.
(11) In this section—
“arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not enforceable, and any associated operations;
“employment intermediary” means a person, other than the worker or the client, who carries on a business (whether or not with a view to profit and whether or not in conjunction with any other business) of supplying labour;
“engagement” means any such provision of service as is
mentioned in subsection (l)(a);
“excluded services” means services provided wholly in the client’s home;
“managed service company” means a company which—
(a) is a managed service company within the meaning given by section 61B, or
(b) would be such a company disregarding subsection (l)(c) of that section.”
(2) In section 688A of the Income Tax (Earnings and Pensions) Act 2003 (managed service companies: recovery from other persons), in subsection (5), in the definition of “managed service company”, after “section 61B” insert “but for the purposes of section 339A has the meaning given by subsection (11) of that section”.
(3) After section 688A of the Income Tax (Earnings and Pensions) Act 2003 insert—
“688B Travel expenses of workers providing services through intermediaries: recovery of unpaid tax
(1) PAYE regulations may make provision for, or in connection with, the recovery from a director or officer of a company, in such circumstances as may be specified in the regulations, of amounts within any of subsections (2) to (5).
(2) An amount within this subsection is an amount that the company is to account for in accordance with PAYE regulations by virtue of section 339A(7) to (9) (persons providing fraudulent documents).
(3) An amount within this subsection is an amount which the company is to deduct and pay in accordance with PAYE regulations by virtue of section 339A in circumstances where—
(a) the company is an employment intermediary,
(b) on the basis that section 339A does not apply by virtue of subsection (3) of that section, the company has not deducted and paid the amount, but
(c) the company has not been provided by any other person with evidence from which it would be reasonable in all the circumstances to conclude that subsection (3) of that section applied (and the mere assertion by a person that the manner in which the worker provided the services was not subject to (or to the right of) supervision, direction or control by any person is not such evidence).
(4) An amount within this subsection is an amount that the company is to deduct and pay in accordance with PAYE regulations by virtue of section 339A in a case where subsection (4) of that section applies, (services provided under arrangements made by intermediaries).
(5) An amount within this subsection is any interest or penalty in respect of an amount within any of subsections (2) to (4) for which the company is liable.
(6) In this section—
“company” includes a limited liability partnership;
“director” has the meaning given by section 67;
“employment intermediary” has the same meaning as in section 339A;
“officer”, in relation to a company, means any manager, secretary or other similar officer of the company, or any person acting or purporting to act as such.”
(4) In Part 4 of the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682) (payments, returns and information), after Chapter 3A insert—
“Chapter 3B
Certain debts of companies under section 339a of ITEPA (travel expenses of workers providing services through employment intermediaries)
97ZG Interpretation of Chapter 3B: “relevant PAYE debt” and “relevant date”
(1) In this Chapter “relevant PAYE debt”, in relation to a company means an amount within any of paragraphs (2) to (5).
(2) An amount within this paragraph is an amount that the company is to account for in accordance with these Regulations by virtue of section 339A(7) to (9) of ITEPA (persons providing fraudulent documents).
(3) An amount within this paragraph is an amount which a company is to deduct and pay in accordance with these Regulations by virtue of section 339A of ITEPA in circumstances where—
(a) the company is an employment intermediary,
(b) on the basis that section 339A of ITEPA does not apply by virtue of subsection (3) of that section the company has not deducted and paid the amount, but
(c) the company has not been provided by any other person with evidence from which it would be reasonable in all the circumstances to conclude that subsection (3) of that section applied (and the mere assertion by a person that the manner in which the worker provided the services was not subject to (or to the right of) supervision, direction or control by any person is not such evidence).
(4) An amount within this paragraph is an amount that the company is to deduct and pay in accordance with these Regulations by virtue of section 339A of ITEPA in a case where subsection (4) of that section applies (services provided under arrangements made by intermediaries).
(5) An amount within this paragraph is any interest or penalty in respect of an amount within any of paragraphs (2) to (4) for which the company is liable.
(6) In this Chapter “the relevant date” in relation to a relevant PAYE debt means the date on which the first payment is due on which PAYE is not accounted for.
97ZH Interpretation of Chapter 3B: general
In this Chapter—
“company” includes a limited liability partnership;
“director” has the meaning given by section 67 of ITEPA; “personal liability notice” has the meaning given by regulation 97ZI(2);
“the specified amount” has the meaning given by regulation 97ZI(2)(a).
97ZI Liability of directors for relevant PAYE debts
(1) This regulation applies in relation to an amount of relevant PAYE debt of a company if the company does not deduct that amount by the time by which the company is required to do so.
(2) HMRC may serve a notice (a “personal liability notice”) on any person who was, on the relevant date, a director of the company—
(a) specifying the amount of relevant PAYE debt in relation to which this regulation applies (“the specified amount”), and
(b) requiring the director to pay to HMRC—
(i) the specified amount, and
(ii) specified interest on that amount.
(3) The interest specified in the personal liability notice—
(a) is to be at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 86 of TMA, and
(b) is to run from the date the notice is served.
(4) A director who is served with a personal liability notice is liable to pay to HMRC the specified amount and the interest specified in the notice within 30 days beginning with the day the notice is served.
(5) If HMRC serve personal liability notices on more than one director of the company in respect of the same amount of relevant PAYE debt, the directors are jointly and severally liable to pay to HMRC the specified amount and the interest specified in the notices.
97ZJ Appeals in relation to personal liability notices
(1) A person who is served with a personal liability notice in relation to an amount of relevant PAYE debt of a company may appeal against the notice.
(2) A notice of appeal must—
(a) be given to HMRC within 30 days beginning with the day the personal liability notice is served, and
(b) specify the grounds of the appeal.
(3) The grounds of appeal are—
(a) that all or part of the specified amount does not represent an amount of relevant PAYE debt, of the company, to which regulation 97ZI applies, or
(b) that the person was not a director of the company on the relevant date.
(4) But a person may not appeal on the ground mentioned in paragraph (3)(a) if it has already been determined, on an appeal by the company, that—
(a) the specified amount is a relevant PAYE debt of the company, and
(b) the company did not deduct, account for, or (as the case may be) pay the debt by the time by which the company was required to do so.
(5) Subject to paragraph (6), on an appeal that is notified to the tribunal, the tribunal is to uphold or quash the personal liability notice.
(6) In a case in which the ground of appeal mentioned in paragraph (3)(a) is raised, the tribunal may also reduce or increase the specified amount so that it does represent an amount of relevant PAYE debt, of the company, to which regulation 97ZI applies.
97ZK Withdrawal of personal liability notices
(1) A personal liability notice is withdrawn if the tribunal quashes it.
(2) An officer of Revenue and Customs may withdraw a personal liability notice if the officer considers it appropriate to do so.
(3) If a personal liability notice is withdrawn, HMRC must give notice of that fact to the person upon whom the notice was served.
97ZL Recovery of sums due under personal liability notice: application of Part 6 of TMA
(1) For the purposes of this Chapter, Part 6 of TMA (collection and recovery) applies as if—
(a) the personal liability notice were an assessment, and
(b) the specified amount, and any interest on that amount under regulation 97ZI(2)(b)(ii), were income tax charged on the director upon whom the notice is served,
and that Part of that Act applies with the modification in paragraph (2) and any other necessary modifications.
(2) Summary proceedings for the recovery of the specified amount, and any interest on that amount under regulation 97ZI(2)(b)(ii), may be brought in England and Wales or Northern Ireland at any time before the end of the period of 12 months beginning with the day after the day on which the personal liability notice is served.
97ZM Repayment of surplus amounts
(1) This regulation applies if—
(a) one or more personal liability notices are served in respect of an amount of relevant PAYE debt of a company, and
(b) the amounts paid to HMRC (whether by directors upon whom notices are served or the company) exceed the aggregate of the specified amount and any interest on it under regulation 97ZI(2)(b)(ii).
(2) HMRC is to repay the difference on a just and equitable basis and without unreasonable delay.
(3) HMRC is to pay interest on any sum repaid.
(4) The interest—
(a) is to be at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 824 of ICTA, and
(b) is to run from the date the amounts paid to HMRC come to exceed the aggregate mentioned in subsection (l)(b).”
(5) The amendment made by paragraph (4) is to be treated as having been made by the Commissioners for Her Majesty’s Revenue and Customs in exercise of the power conferred by section 688B of the Income Tax (Earnings and Pensions) Act 2003 (inserted by paragraph (3)).
(6) The amendment made by paragraph (1) has effect in relation to the tax year 2016-17 and subsequent tax years.
(7) The amendment made by paragraph (4) has effect in relation to relevant PAYE debts that are to be deducted, accounted for or paid on or after 6 April 2016.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
Budget Changes
John Bercow Excerpts(8 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Gauke
First, may I thank the shadow Chancellor for promoting me to Chief Secretary to the Treasury? Secondly, may I just make this point about disability benefits? There is no question of this Government cutting disability benefits to the level we inherited in 2010. Spending on disability benefits has gone up by £3 billion in real terms. Thirdly, does the shadow Chancellor really want to talk about fiscal black holes? Does he really want to do that? [Interruption.]
Last week the Chancellor of the Exchequer reported on an economy set to grow faster than any other major advanced economy in the world. With wages up, the deficit cut by almost two thirds and 1,000 more people in work every single day, our economic plan is delivering for Britain. It is a Budget that continues this economic recovery, a Budget that takes us into surplus by the end of this Parliament, a Budget that backs British businesses, protecting jobs in difficult economic times, a Budget that helps more people buy their first home or save for their retirement, a Budget that builds our young people’s skills and invests in educating the next generation, and a Budget that helps to close the gaps between rich and poor and between north and south, because we believe in helping people to succeed wherever they come from. Since 2010, inequality is down, child poverty is down, pensioner poverty is down, the gender pay gap is smaller than ever, while the richest—[Interruption.]
Mr Speaker
Order. When the Minister is addressing the House, he is entitled to be heard. I know the Minister is raising his voice, but there should be no requirement to do so. Experience shows that all sides of the argument will be heard. Members need have no worry on that score. In the first instance, the Minister must be heard.
Mr Gauke
The richest 1% are paying a greater proportion of income tax revenue than in any single year of the Labour Government. This is the Government that introduced the national living wage, the Government that increased the personal allowance—in a year’s time, a typical basic rate taxpayer will pay over £1,000 less in tax than they paid in 2010—and the Government that are helping to generate record numbers of jobs, helping young people get on the property ladder, increasing spending on health and education, and disability benefits too, and protecting pensions and helping people achieve their aspirations at every stage of their lives. Delivering for Britain, creating economic security, jobs and growth—that is the record of this Government and the record of this Chancellor, and it is a record to be proud of.
Budget Resolutions and Economic Situation
John Bercow Excerpts(8 years, 1 month ago)
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Mr Speaker
Before I call the Secretary of State for Communities and Local Government, from whom we look forward to hearing—we also look forward to hearing from his shadow—I simply point out that some dozens of colleagues want to speak in the debate. There will have to be a very tight time limit on Back-Bench speeches, but I know that the Secretary of State and his shadow, who are both very considerate Members of the House, will, while wanting to treat comprehensively of the issues within their domain, wish to facilitate contributions by colleagues.
Mrs Gillan
On a point of order, Mr Speaker. I wonder whether you could advise me on something. I have asked the Minister, who is speaking so ably and fluently at the Dispatch Box about a Budget, certain elements of which have been well welcomed on both sides of the House. I have asked her to give way on two specific points that I raised in my contribution to this debate. Could you advise me whether it is in order for the Minister to decline, on account of the amount of time left for speaking, when a considerable number of minutes are left until 10 o’clock?
Mr Speaker
It is a matter for the judgment of the Minister, but the discontent of a former Cabinet Minister has been registered.
Harriett Baldwin
In that case, I will simply commend this Budget to the House.
Ordered, That the debate be now adjourned.—(Julian Smith.)
Debate to be resumed tomorrow.
Mrs Gillan
On a point of order, Mr Speaker. I wish to seek your guidance on the next item on tonight’s Order Paper. I gather that Standing Order No. 9(6), which deals with sittings of the House, states:
“After the business under consideration at the moment of interruption has been disposed of, no opposed business shall be taken, save as provided in Standing Order No. 15 (Exempted business).”
As I read it, the Order Paper contains a sittings motion on the business of the House on the High Speed Rail (London - West Midlands) Bill and if it comes to the Floor of the House after 10 pm, it does not have to be debated. It is possible to object to that business of the House. Of course, Mr Speaker, you will appreciate that I raised a point of order earlier—[Interruption.]
Mr Speaker
Order. It is fairly uncharacteristic of one of the Whips on duty, the hon. Member for Croydon Central (Gavin Barwell), who normally behaves in a most seemly manner, but the amount of noise he is making prevents me from attending to the right hon. Lady’s point of order, which I am keen to hear, so she will doubtless now continue.
Mrs Gillan
If this motion is heard after 10 o’clock in this House, I want to confirm that there is no debate, that a Member can object to it and that the Government can bring it back and put it on the Order Paper on the following day. It is important that we understand that anybody who chooses to object to this piece of business on the Order Paper is not impeding the Government at all, as it is perfectly in order for them to bring it back on to the Order Paper tomorrow, and indeed, if it is objected to tomorrow, it can be put on the Order Paper the following day, but without the penalty of taking time out of the very valuable debate that I have been trying to get extended and would want to protect in terms of the measly three hours the Government have given us.
Mr Speaker
The interpretation by the right hon. Lady is entirely correct. I trust that she is satisfied with that matter.
Budget Resolutions and Economic Situation
John Bercow Excerpts(8 years, 1 month ago)
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Callum McCaig (Aberdeen South) (SNP)
It is a pleasure to speak in this Budget debate. After close to a year of asking for action on oil and gas, it would be churlish of me not to welcome what the Chancellor has announced today. However, it is important to take that in context: we have seen significant movement, but essentially we are back to what Oil and Gas UK says is the tax level from 2003.
There is positive movement on the supplementary charge, but to suggest that the tax has been cut in half is a bit of the smoke and mirrors that we are used to. Although it has been cut in half, from 20% to 10%, oil and gas fields will still pay 40%. If we compare that with the announcement of 17% for corporation tax, we see there is a stark contrast.
The effective abolition of petroleum revenue tax is perhaps more welcome. It will affect fewer fields, but by virtue of their age and their important infrastructure, those fields are vital to ensuring the continuing success of the North sea. If they lose out and that infrastructure is decommissioned, the potential domino effect could drastically reduce the profitability of the North sea.
I welcome the proposed manoeuvring of decommissioning allowances, allowing changes between the companies that would and would not have the decommissioning liability. That is fundamental. The Red Book talks about encouraging new entrants into the industry. It is very important for the future of the industry to have new capital, new expertise and, above all, new ideas and new ingenuity coming in and not to be burdened by artificial barriers in relation to decommissioning. What has been announced is very helpful, but in and of itself, it is not enough. This will not be the end of the requests from industry, from trade unions, and from me and the SNP, for further action to support this vital industry.
We have missed out on anything relating to fiscal support for exploration. The support for seismic surveys is welcome, but beyond that more action needs to be taken. There is also nothing in terms of—
Mr Speaker
Order. I am extremely grateful to the hon. Gentleman for his contribution. I think Mr Tommy Sheppard wishes to speak. No?
Tommy Sheppard (Edinburgh East) (SNP)
The clock has not been working, Mr Speaker.
Callum McCaig
I will continue to orate, and I will be as brief as I can to allow my hon. Friend the Member for Edinburgh East (Tommy Sheppard) to get in.
There is nothing on exploration, beyond seismic. There is nothing about removing the fiscal barriers for enhanced oil recovery. The activity of enhanced oil recovery will count as operational expenditure; it does not count towards the tax allowance that can be offset against income. Such a simple fiscal measure would allow these activities to happen to a far greater extent, and then everyone would be a winner.
On the effective tax rebate rate for onshore oil and gas, tax allowances for that sector are 75%, whereas the effective rate for offshore oil and gas is 62.5%. I see no reason why there should be such a difference in the investment allowance. The North sea is a far more harsh environment in which to carry out this kind of exploration activity, and I do not see why it should be penalised vis-à-vis onshore oil and gas.
There has been nothing on loan guarantees for the oil and gas sector. The Prime Minister has talked about building the bridge to the future of oil and gas. Access to finance is vital in this regard. Companies are being turned away by banks, which see the industry as something they do not wish to invest in. I hope that the measures announced today will go some way towards allaying the concerns about finance, but more can and should be done. Lots of companies have the ability, expertise and imagination to drive the innovation that the oil and gas industry will require. If they cannot access the funding and finance that is required to develop these ideas, it will be incredibly difficult for them to bring their skills and expertise to the marketplace to benefit the industry and secure the innovation and cost reductions that it has been pursuing.
While this is a welcome step, it cannot, in and of itself, be the last thing that the Government do to support the oil and gas industry. The industry has produced £300 billion in tax revenue; it contributes immensely to the UK’s balance of payments. We may not be seeing the astronomical tax revenues from oil and gas that we did before, but we cannot overestimate the importance of the role that the industry has to play for the United Kingdom and my neck of the woods in particular, in future.
Helen Goodman (Bishop Auckland) (Lab)
I am pleased to follow the hon. Member for Edinburgh East (Tommy Sheppard), and I agreed with much of what he said about equality. Everybody understands that the Chancellor was in a tight spot when he came to construct the Budget, but it is difficult to feel very sympathetic towards him, because he has constructed that tight spot. He drew up fiscal rules to bring the budget into balance without taking account of the economy’s need to invest in capital infrastructure, and that is why he is in a tight spot. The Treasury Committee took evidence from a whole range of economists, and we did not find one who agreed with the Chancellor’s approach to fiscal policy.
Another problem is that the Chancellor’s focus has been very short-term, and he has failed to do the things that need to be done for the long term. He boasted that unemployment in the north-east had fallen rapidly recently, but that has to be set in the context of the fact that it is the highest in the country.
Many hon. Members have talked about the productivity problem. Productivity fell in all the major economies when we had the big crash in 2008, but whereas in America and the other G7 countries it is back above where it was before the crash, we are still just about reaching that level. The Chancellor highlighted the economic headwinds coming from the international economy. However, the downgrading of productivity, which is why his growth forecasts are down, is solely due to domestic factors. We cannot blame other countries if we have not invested enough in our infrastructure and skilled our workforce adequately. Those are the things that we need to do more of.
I have a couple of questions for the Exchequer Secretary to the Treasury, and I hope that I will get answers to them.
Mr Speaker
Order. It is very important that our proceedings should be intelligible to all those who follow them, and I just remind the hon. Lady that there are no Front-Bench wind-up speeches tonight. Answers may or may not be forthcoming, but they will not be forthcoming from the Dispatch Box this evening. I am sure that the hon. Lady is a notably patient person.
Helen Goodman
I do not mind whether I get the answers today, next week or even in a letter from the Treasury. One of my questions is about infrastructure in the north. The increase in spending on that infrastructure is only £300 million. We see in the Budget:
“£75m to fast-track development of major new road schemes including…the…A66”.
When is the A66 going to be widened? I am not talking about getting some little feasibility study done. When will we actually get a change to the infrastructure, which is so essential for people who make things in the north-east and sell them to the rest of the country?
Enterprise Bill [Lords]
John Bercow Excerpts(8 years, 1 month ago)
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Mr Speaker
As I informed the House yesterday, my provisional certificate, based on changes made in Committee and expected Government amendments tabled for Report stage, is available in the Vote Office and on the Bills before Parliament website.
At the end of the Report stage on a Bill, I am required to consider the Bill as amended on Report for certification. At that point—later today—I will issue my final certificate.
Clause 33
Extended Sunday opening hours and Sunday working
Mr David Burrowes (Enfield, Southgate) (Con)
I beg to move amendment 1, in page 50, line 33, leave out subsections (1) to (4).
Mr Speaker
With this it will be convenient to discuss the following:
Amendment 19, in page 51, leave out lines 3 to 13 and insert—
2A (1) The Sunday trading authority for an area may publish a notice (a “consent notice”) in accordance with this paragraph providing for large shops in tourist zones (as defined in sub-paragraph (2)) in the authority’s area to be permitted to do either or both of the following—
(a) to open on Sundays falling between 21 March and 1 October and on the three Sundays before Christmas Day for a continuous period of whatever number of hours is specified in the notice (in addition to the continuous period of six hours mentioned in paragraph 2(3)),
(b) to open on Sundays falling between 21 March and 1 October and on the three Sundays before Christmas Day at specified times beginning earlier than, or ending later than, the times mentioned in paragraph 2(3).
(2) A consent notice published by a Sunday trading authority may only apply in relation to those parts of the authority’s area that is a “tourist zone” which is defined as—
(a) a retail area where tourists from outside the United Kingdom are responsible for a significant proportion of the retail sales, or
(b) a leisure and retail area, such as a coastal resort, which a significant number of tourists from outside the local authority area visit
and in deciding what is significant in either case the local authority shall have regard to guidance issued by the Secretary of State.”
This amendment would allow the relaxation in Sunday opening hours for larger shops to apply between Easter and the end of September and before Christmas to areas that attract significant numbers of tourists, such as central London and coastal resorts.
Government amendments 2, 13 and 14.
Mr Burrowes
Amendment 1 is in my name and those of 24 of my right hon. and hon. Friends, as well as hon. Members from across the House. I think seven different parties have signed up to the amendment. I could not quite convince the UK Independence Party Member to unite with me on the amendment, although I may continue to try to persuade him if he attends the debate. Nevertheless, there is significant cross-party support for the amendment.
In many ways, I would prefer not to be here; I am sorry that we have to deal with this issue. We are having to do so not least because the proper procedure has not been followed, but also because of the issue of substance around Sunday trading. Some hon. Members will remember debates on the matter in the ’90s and the ’80s, which took up a considerable amount of the House’s time and attention. The previous time the matter came before the House, it took some two years of debate to reach the compromise that we reached. We have some three hours today either to unpick that settlement or, as I seek to do in the amendment, to delete the Government’s provisions.
Let us remind ourselves of what the Bill is about, and how Sunday trading fits into it. As I understand it, when it first came to the House, the Bill’s aims were clear. They were to
“make sure that Britain is the best place in Europe to start and grow a business and that people who work hard have the opportunity to succeed”
and to
“cut red tape for business, encourage investment in skills, and make it easier for small firms to resolve payment disputes by setting up a Small Business Commissioner”.
So say all of us, or certainly those of us on the Government Benches. The Bill is important, and I support it up to the point of its conclusion about Sunday trading.
Mr Speaker
Order. Mr Chalk is a most courteous Member of the House. Just as he is courteous to the House, the House must be courteous to the hon. Gentleman. Let us hear from Mr Chalk.
Alex Chalk
Thank you, Mr Speaker. How can it any longer be right for politicians in Westminster to block local people in Cheltenham, for example, from amending trading hours if that is what they choose to do?
Mr Burrowes
The hon. Gentleman makes a good point. We should also consider the potential domino effect of the Government’s proposals. Another shop worker told me, “The idea that Sunday working is optional, and that this is enshrined in law, is laughable. They make you pay one way or another for objecting to working on a Sunday.”
When a policy is opposed by the small business community, by a good number of large businesses, by the majority of shop workers, and by Churches and other faith communities—the Chief Rabbi recently spoke passionately about properly respecting the special character of Sundays—we must ensure that we consider it carefully. There has already been deregulation in many forms, but there is still a special character that we can preserve. This does matter, because Sunday is still special for many people, and the Government should not chip away at that unfairly, unreasonably and without due process. We should ensure that there is a proper place for Sundays for families, businesses and workers.
This issue has come before the House on previous occasions. Mrs Thatcher’s Government were defeated by a large majority on an entire Bill in the House of Commons. I remember attending my first ever public meeting in 1986—it was my first foray into the world of politics—which was hosted by my local Member of Parliament, Michael Portillo. He appeared before a packed public meeting and completely misjudged the views of those present, many of whom had never been to a public meeting before. He saw for himself the huge concern in the community, having misjudged the strength of feeling about amending the hours of Sunday trading. Time has moved on, but there is still a strength of feeling out there—from shop workers, families, small businesses and others. That meeting was a formative political experience for me. We heard a statement from the Health Secretary earlier about learning from mistakes, and I urge the Government today not to make the same mistake again.
Mr Speaker
Order. Before we proceed with the debate, I have now to announce the result of the deferred Division on the question relating to EU measures to combat terrorism. The Ayes were 302 and the Noes were 217, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Several hon. Members rose—
Mr Speaker
Order. Before I call the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) as the next speaker in the debate, I would point out that we have two hours and 20 minutes left. If the Minister wishes to do so, I will shortly call him to speak from the Front Bench. A simple nod of the head will suffice.
Mr Speaker
I appeal to colleagues to have regard to each other’s interests. We do not keep a formal list on Report, but I suspect there will be intense interest in these exchanges, so colleagues should look after the interests of each other.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Thank you, Mr Speaker. I will certainly endeavour to do so.
I rise in support of the amendment in the name of the hon. Member for Enfield, Southgate (Mr Burrowes), to which I have added my name, as have many other hon. Members on both sides of the House. I am completely opposed to any changes to Sunday trading regulations, whether it is their extension or their devolution to local councils. I am sceptical of what benefits, if any, it would bring to our economy but, more importantly, my concern lies with retail workers and my desire to keep Sunday special.
As a Greater Manchester MP, I am a huge supporter of devolution, particularly to a city as great as ours. However, to me the measure does not feel like beneficial devolution; rather, it feels like a dishonest manoeuvre from a Government who seem obsessed with introducing the policy even though there appears to be no public demand for it. I also have concerns about how the Government have gone about the process, in particular their flawed consultation, which I will address.
I am happy to declare an interest, in that I am an USDAW-sponsored MP, which I am particularly proud of. USDAW has led from the front in this campaign, representing the concerns of ordinary retail workers and ensuring that their voice is heard.
Lots of good, strong arguments were put forward in the excellent speech from the hon. Member for Enfield, Southgate. I, too, intend to focus my speech on the family and faith aspects of Sundays but, first, I want to express my serious concerns about how the Government have gone about attempting to introduce the change. I believe it is at best mischievous and at worst a borderline fantasy when the Government say that the Bill in itself will not enact any changes to Sunday trading regulations, but leave that open to local councils to decide. They know as well as all hon. Members do that the measure will result in extended opening hours on Sundays. As soon as one council does it, neighbouring councils will soon fall, one after another, until extended hours are uniform.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
I am deeply concerned about this issue, and my name is attached to amendment No. 1. I listened to what the Minister said this morning, when we spoke at some length about the proposed pilot. I would be willing to support that pilot if the Minister would give us a clear assurance that it will not just involve looking at economic drivers, but will take account of the overall impact, and apply the family test. A great many people who work shifts are put on the bottom of the list and end up working on Sundays because they cannot get to the top. We must make sure that that does not happen in this instance. [Interruption.]
Mr Speaker
Order. First, may I appeal for as orderly an atmosphere as possible? The Chair seeks to facilitate as many contributors as possible. Secondly, Members are of course free to say what they like, but I would gently point out that no amendment or new clause on the subject of pilots is to be taken today. There is material before the House, but that subject is not among it.
Ms Angela Eagle (Wallasey) (Lab)
On a point of order, Mr Speaker. Will you confirm again that the manuscript amendment that the Government attempted to sneak on to the amendment paper at the last minute today, which would have covered the compromise on which the hon. Member for Berwick-upon-Tweed (Mrs Trevelyan) seems to have done a deal, is in fact not on the amendment paper and not before the House?
Mr Speaker
It was not selected. For the benefit of people attending to our proceedings, I shall be explicit. It is for the Speaker to select or not to select, and I did not select that late-submitted manuscript proposal. I need add nothing.
Brandon Lewis
My hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan) makes a strong point, and she has been consistent on this matter. She makes a clear, passionate and strong point on the importance of family values and of our social fabric. If she will bear with me, I will touch on that matter in just a moment.
I would say to Opposition Members that we need to think about where we are with Sunday trading. Let us be very clear: none of us would put up with a Government banning cinemas from opening on Wednesday evenings, so why on earth would we put up with a Government telling us when we can and cannot open our businesses and run our shops, and telling us how we should be spending our time if we want to go shopping on a Sunday?
Jim Shannon (Strangford) (DUP)
On a point of order, Mr Speaker. Is it in order for the Minister to proceed with a promise of legislation that is not on the amendment paper for us to consider, and for Members therefore to vote on something that they do not have in front of them? The measure we are voting on is not promises; it has to be in front of us, so that we can discuss it here in this Chamber.
Mr Speaker
Let me explain the position to the hon. Gentleman, to whom I am genuinely grateful for his point of order, and for the benefit of the House. There is nothing disorderly in the Minister giving an indication of how the Government would propose to proceed. If a Minister wishes to say to the House, “Our intention is to proceed with pilots”, it is perfectly in order for the Minister to do that. But of one thing, procedurally and constitutionally, the House needs to be made again aware: Members are voting on that which is on the paper and which the Speaker has selected. Members are not voting on a Government proposal or words about pilots; they are voting on that which is on the paper. The matter under discussion is the amendment standing in the name of the hon. Member for Enfield, Southgate (Mr Burrowes). We are voting on that, not on a Government proposal, and I hope that that is clear.
Several hon. Members rose—
Mr Speaker
Order. We have just under 50 minutes and many people wish to contribute. If everyone speaks for four minutes, we could have another 10 or so contributors. I ask Members to consider each other.
Mr Lammy
I was very pleased to add my name to the amendment proposed by the hon. Member for Enfield, Southgate (Mr Burrowes). I did so because although I recognise that none of us wants excessive regulation for our communities and that people should have the freedom to shop at convenient times for them, I think that the settlement reached by this House in 1994 was the right one, and I do not see the demand across this country to change that arrangement.
My primary concerns are twofold. First, there is the protection of family life. Some 75% of parents in this country feel that work impinges on their family life. Many of us have been abroad—in Spain, Portugal or France, for example—and we found real restrictions when it came to finding things open on a Sunday. We have been out at lunch time and found that the shops are on siesta. Why is it that in this country, this Government think we should put the free market above everything else? It is conservative to protect the family, and the family is worth protecting.
Several hon. Members rose—
Sir Gerald Howarth
I am delighted to support my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) by being a co-signatory to his amendment. The Minister is a great man, as befits being the hon. Member for Great Yarmouth, but he has had an impossible task today. I have never seen new, serious legislation affecting our country introduced in such a shambolic way. It looks like something delivered by lastminute.com and makes the back of a fag packet look like a sophisticated form of engagement. He has known, the Prime Minister has known and everybody has known for months that many Conservative Members are deeply unhappy with this. I was in the House 25 years ago when we hammered out the compromise over years, not hours or months—
Several hon. Members rose—
Joan Ryan
As they say, you may not realise what you’ve got till it’s gone—I think that applies to all of us and not just to you, Mr Speaker. Once our special Sundays are lost, it will be impossible to get them back. Hon. Members often say, “I don’t know which way I am going to vote. I’m going to listen to the debate.” Frankly, I defy any rational person—any Member of this House who has listened to the debate—to explain why they would vote with the Government. If they had really listened to the debate, they would surely support the amendment tabled by the hon. Member for Enfield, Southgate (Mr Burrowes). We have heard so much information from Populus surveys and USDAW surveys—perhaps I should declare an interest as an USDAW member—showing us that just about everybody is against the changes. Nobody wants them—including, apparently, the Prime Minister before the election—yet here we are.
The changes would be bad for business. All the evidence set out today has demonstrated that, so I will not repeat it. They would be exploitative to shop workers and others who work in the retail sector, who do not want them. The public and consumers do not want them. There is no evidence that anybody wants them, yet the Government have consulted on the deregulation of Sunday trading hours three times in the past four years. It has been somewhat unseemly to see the Government scrabbling around today trying to patch together some kind of last-minute deal that would in no way protect us against deregulation in the future. I urge hon. Members to vote for the amendment and to see the end of proposals on this matter for a considerable period to come.
Clive Efford
On a point of order, Mr Speaker. In response to a previous intervention, the Minister said that my local authority, Greenwich, had asked for this power to be passed to it. That was not correct. My local authority said that if the change is made, it should come to the local authority, not the Mayor of London or the Greater London Authority. How do we get the Government to put the record straight?
Mr Speaker
I think that the hon. Gentleman has found his own salvation, as he will be keenly aware. His attempted correction is now on the record.
Ms Angela Eagle
On a point of order, Mr Speaker. The House has spoken on the very contentious issue of Sunday trading, which would have affected millions of workers. Can we now hear from the Government that they will respect the will of this House and abandon their tawdry attempts to reintroduce this proposal? And I mean the Chancellor.
Mr Speaker
The hon. Lady has made her point, but it is not a matter for the Chair.
The Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).
Schedule 5
Sunday opening hours: rights of shop workers
Amendments made: 13, page 91, line 25, at end insert—
“7A In section 48 (complaints to employment tribunals), after subsection (1) insert—
“(1YA) A shop worker may present a complaint to an employment tribunal that he or she has been subjected to a detriment in contravention of section 45ZA.””
This amendment is consequential on new section 45ZA of the Employment Rights Act 1996 (inserted by paragraph 7 of Schedule 5 to the Bill) and ensures that a shop worker can present a complaint to an employment tribunal in connection with a detriment suffered in contravention of that section.
Amendment 14, page 91, line 46, at end insert—
“8A In section 108 (qualifying period of employment), in subsection (3) after paragraph (d) insert—
“(da) subsection (2) of section 101ZA applies (read with subsection (3) of that section) or subsection (4) of that section applies,””.—(Brandon Lewis.)
This amendment is consequential on new section 101ZA of the Employment Rights Act 1996 (inserted by paragraph 8 of Schedule 5 to the Bill) and ensures that the two year qualifying period of employment for unfair dismissal cases will not apply in relation to cases involving a refusal to work additional hours on Sunday or the giving of an objection notice to working such hours.
Mr Speaker
Our consideration having been completed, I will now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my decision on certification being communicated, the Government will table the appropriate consent motions, copies of which will be made available in the Vote Office and distributed by the Doorkeepers.
Mr Speaker
I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. I have made no change to the provisional certificate issued yesterday. Copies of my final certificate will be made available in the Vote Office and on the parliamentary website.
Under Standing Order No. 83M, consent motions are therefore required for the Bill to proceed. Copies of the motions are available in the Vote Office and on the parliamentary website, and they have been made available to Members in the Chamber. Does the Minister intend to move the consent motions?
Mr Speaker
I believe I have had the necessary nod. We must now under the relevant Standing Order forthwith resolve into the Legislative Grand Committee (England and Wales), and thereafter into the Legislative Grand Committee (England).
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).
[Mr Lindsay Hoyle in the Chair]
Kevin Brennan
On a point of order, Mr Speaker. I hope that it is a point of order. My understanding is that the passing of amendment 1 does not affect the presence of schedule 5, which is entitled “Sunday opening hours: rights of shop workers”, and that, as we send the Bill to the House of Lords, those workers’ rights are enshrined in it.
Mr Speaker
The short answer to the hon. Gentleman’s point of order is that the passage of amendment 1 does not affect the presence of the schedule in the Bill. As I am not an expert on legislative interpretation and impact, and it is not for me to speculate upon that, I will not, but I stand by—on, of course, the basis of advice, and my own study—the first part of my answer to the point of order. I have sought to give that information in a dispassionate way, responding to a factual inquiry with what I understand to be a factual response.
Sajid Javid
Thank you, Mr Speaker.
Last May I launched the Bill at an event in Bristol, the city where I grew up. It is the city where I saw, in my parents’ shop, the special values that are needed to build and run a business. This is a Bill for people who share those values. It does not matter whether they are behind a shop counter or behind the wheel of a van, or whether they are working in a high-rise office or from their kitchen table. If they are striving to do what my parents did—if they are working to build a business, to grow the economy and to create jobs—the Enterprise Bill will help them to do just that, and I commend it to the House.
Oral Answers to Questions
John Bercow Excerpts(8 years, 2 months ago)
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Mr Osborne
The point I make to my hon. Friend is that, of course, we will have to handle the situation if the British people choose to exit, and I would always want to stress that we are a great country to invest in, but I think that that argument will be weaker if we are not in the EU.
Mr Speaker
We are deeply grateful, but we must try to attend to the questions asked, and to do so in a timely way, because progress is desperately slow. Members can do better than that, one would hope.
Chris Leslie (Nottingham East) (Lab/Co-op)
Would there not be a double whammy if Britain left the EU? First, there is the widely predicted risk of depreciation, which will lead to higher interest rates. Secondly, any notion that our exporters would benefit from a cheaper pound is more than offset by the additional tariff barriers that those firms would encounter worldwide.
Greg Hands
The IMF has been clear in its endorsement of the charter for budget responsibility:
“The transparency of the new rule—with a focus on headline balances and a simple and well-defined escape clause in the event of very low growth—is welcome.”
It goes on to commend us on having the “appropriate level of flexibility” in the charter. In respect of any external advisers that are taken on by the Labour party, it would appear from The Sun this morning that Labour MPs are extremely unhappy—
Mr Speaker
Order. Sit down. It is a terrible waste of time—long-winded, boring and unnecessary.
John McDonnell (Hayes and Harlington) (Lab)
In the debates at the time of the charter, I and many others warned the Chancellor of the potential impact of global adverse headwinds. The Chancellor responded by boasting
“of having an economic plan that actually produces better results than were forecast”.—[Official Report, 25 November 2015; Vol. 602, c. 1385.]
Since then, we have seen business investment fall, his export target recede into the distance, the trade deficit widen, manufacturing and construction enter recession, and the biggest productivity gap for a generation. Last week, to crown it all, the Chancellor told us the economy is smaller than we thought. I say to him that if his economic plan is now producing worse results than forecast, imposing more stealth taxes and cuts in the Budget will only—[Interruption.]
Mr Speaker
Thank you. We need a question mark. [Interruption.] Order, order. I said what I said because Ministers are responsible for answering for Government policy, not that of the Opposition. People who ask questions, be they from the Front or the Back Bench, must do so pithily. A pithy reply, Chief Secretary.
Greg Hands
All forecasts at the moment still show the UK performing extremely well, with strong rates of growth compared with other G7 countries. The Chancellor was right to say over the weekend that we may need to undertake further reductions in spending because this country can afford only what it can afford. He went on to say:
“I’m absolutely determined that first and foremost in this uncertain time we have economic security. That’s what people rely on.”
I am equally clear that it would be a fundamental disaster for this country if we pursued the policies that the hon. Member for Hayes and Harlington (John McDonnell) has been promoting in the six months that he has been shadow Chancellor.
Greg Hands
I remind the shadow Chancellor that, over the past five and a half years, this Government have been fixing the problems in our banking system, after the poor regulation and tripartite regime that we inherited from the previous Government. We have been taking action. On economic policy, I just have to look around at the Labour party and see what kind of reactions there are.
Mr Speaker
Sit down. This is about Government policy, and progress is slower than at previous Treasury questions. The Minister should try to stick to Government policy, upon which briefly he can, and should, speak.
Huw Merriman (Bexhill and Battle) (Con)
5. What fiscal steps he is taking to help first-time homebuyers.
Neil Gray
I thank the Minister for that helpful answer. My constituent David Duncan is currently being pursued by HMRC’s mutual assistance in the recovery of debt team for a tax payment relating to a time when he was residing in Germany but working in South Korea. Mr Duncan had been assured by his employer that he would have to—
Mr Speaker
Order. I am sorry but this is just too long. This is a story, not a question. One sentence. What is it?
Mr Alistair Carmichael (Orkney and Shetland) (LD)
7. What assessment he has made of the effects on the economy of the reduction in duty on spirits announced in the 2015 Budget.
Damian Hinds
I know how much the sector values the cut in the duty—it was the first since 1996—and it is great to see the industry in good health, with the number of distilleries and exports to other parts of the world growing strongly. I have received representations from the Scotch Whisky Association among others in relation to the upcoming Budget.
Andrew Griffiths (Burton) (Con)
Any changes or reductions in spirit duty will impact on the market for other drinks, such as beer. I draw the House’s attention to my entry in the Register of Members’ Financial Interests, but this Government and this Chancellor scrapped Labour’s hated beer duty escalator and cut beer duty three times, which led to more beer sales and more revenue for the Treasury, and which saved hundreds of pubs. Will he continue that support in future?
Mr Gauke
Overall, the Government are clear that HMRC’s target is to reduce the burden on businesses by £400 million by the end of this Parliament. Moving towards a digital taxation system is something that can help businesses to reduce their costs. We are consulting on the details, but let me make it absolutely clear that there will be no quarterly tax returns, as it has been wrongly reported that there will be in some cases.
Jack Lopresti (Filton and Bradley Stoke) (Con)
13. What fiscal steps he is taking to help people keep more of their earnings.
Helen Goodman (Bishop Auckland) (Lab)
The Chancellor chose to give a puff to his desire for Sunday trading liberalisation, but is he aware of the study produced yesterday which showed that all there will be is a switch of activity from small shops to big shops, and that that will mean a loss of thousands of jobs? [Interruption.]
Mr Speaker
The hon. Member for Lichfield (Michael Fabricant) says that the Chancellor has already dealt with that question. As I have often had cause to observe, repetition is not a novel phenomenon in the House of Commons.
Mr Osborne
To repeat myself, Mr Speaker, I do not agree with the hon. Lady, because it has been the case that when we have extended opening hours we have not seen not a displacement of jobs, but an increase in jobs. That is the assessment from the retail industry. Of course, these arrangements exist in Scotland, in many European countries and in the United States. Many of those are countries with strong Christian faiths, so I do not think there is a contradiction there. We cannot in this House constantly say that we worry about our high street and then not allow high street stores to open on the day when the biggest level of internet shopping takes place. This is one of the answers to helping our high street. It is not the only one, but it is an important one.
Mr Osborne
We are providing support to Scotland, and that support is entrenched in the fiscal framework that we have agreed with the Scottish Government. The hon. Gentleman cannot duck his responsibilities. He wanted Scotland to be independent on 24 March—this month. If we had gone ahead with that—if the Scottish people had voted for it—there would have been a fiscal catastrophe in Scotland, because oil revenues have fallen by more than 90%. We had a question earlier from a Scottish National party Member—[Interruption.]
Mr Speaker
Order. I apologise for interrupting, but that was a very unseemly gesticulation by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I remind him of his status in this House as the Chair of a Select Committee. He is an aspiring statesman and must conduct himself accordingly.
Lucy Frazer (South East Cambridgeshire) (Con)
In response to an earlier question on productivity, my right hon. Friend mentioned the drivers of growth being investment in schools and investment in science and technology. Does he, like me, welcome the Government’s commitment to train 17,500 more teachers in science, technology, engineering and maths, and does he think that there is absolutely no time to waste in recruiting those teachers?
Several hon. Members rose—
Mr Speaker
Order. We must now move on. Demand invariably exceeds supply. No one is keener to facilitate questions than I, but we do need pithy questions and pithy answers.
Short Money
John Bercow Excerpts(8 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
John Penrose
I am happy to reassure the hon. Gentleman that the cost of Spads, as I mentioned when we last met to discuss this, has fallen since the general election. The request for views is entirely clear about the various different causes of the rise in Short money, and the consultation asks for views and expressions of how it might be amended point by point, so the hon. Gentleman is quite wrong about how the request for views is done.
Even if no changes are made to some of the proposals in the request for views, the Labour party will still receive more funding in real terms than did the Conservative party in 2009-10. It will receive an estimated £11 million of taxpayers’ money over this Parliament. There will be no real reduction in cash terms; in fact, there will be a small increase in cash terms, even after a 19% cut, compared with 2014-15. [Interruption.]
John Penrose
I was hoping for a more constructive response. I was hoping for a more balanced response. I was hoping for a set of proposals I could use as a response to the request for views. I am afraid that that is not what we have had, and I deeply regret that. I hope there is still time for us to move forward in a more constructive fashion.