Oral Answers to Questions
Lord Mackinlay of Richborough Excerpts(1 year, 7 months ago)
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The Deputy Prime Minister
I can absolutely assure the hon. Lady that we remain fully committed to those 40 hospitals from our manifesto. Indeed, we have already provided £3.9 billion-worth of initial capital.
Craig Mackinlay (South Thanet) (Con)
The Deputy Prime Minister
May I pay tribute to my hon. Friend? I know how hard he has been campaigning on this important issue. The Home Secretary will have heard his remarks. The Digital Markets, Competition and Consumers Bill will put duties on those platforms. Ultimately, if fraud is being perpetrated, the police should take action.
Budget Resolutions and Economic Situation
Lord Mackinlay of Richborough Excerpts(1 year, 9 months ago)
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Craig Mackinlay (South Thanet) (Con)
I congratulate the Treasury team on what I thought was an imaginative Budget, particularly on getting people back into work, including through the pension changes to get some key employees back to work, especially in the NHS. I had concerns about the corporation tax rise, but they have been broadly tempered by the full expensing.
I refer to my entry in the Register of Members’ Financial Interests as a chartered accountant and chartered tax adviser. This may come over as a little dull, but it may be instructive to the Treasury Bench. I want to take a quick gallop through corporation tax and dividend tax law over the last 50 years. Dividends were imputed with advanced corporation tax, a system introduced in 1973. It was a withholding tax at source, so the recipients of those dividends, if they were basic rate taxpayers, were deemed to have had the tax paid at source. Of course, because that tax had already been deducted, both charities and pension funds, most notably, could reclaim the tax that had been deducted.
Strangely, one of the first acts of the incoming Labour Government in 1997 was to scrap that advance corporation tax regime. For pension funds, that was a catastrophe. At one time we had world-leading and well-funded pension funds, but today the damage to them is estimated to be £250 billion and defined benefit schemes are virtually extinct. There started a long period of tax-free dividends, up to the basic rate band, for basic rate taxpayers. Because dividends are not a deduction against taxable profits, they were internally imputed to have had that rate of corporation tax attached to them, so in the hands of the basic rate taxpayer, they were free. We had a short period of a strange 10% band, but all toddled along quite nicely, up until 2016, when the 10% tax credit was abolished and replaced with a tax-free dividend allowance of £5,000. The Treasury’s assessment at the time was that owner-managed businesses were using dividends too extensively, and there was an avoidance of both ER and EE national insurance. Well, so be it. That did not last very long, because even at the £5,000 level it was deemed to have been a little overexploited. So the dividend allowance was reduced to £2,000 from April 2018, with dividends above that rate taxed at 7.5%. In the past year, we have raised that to 8.75%. Again, so be it—but we have introduced a double taxation, both as company profits and then in the hands of the recipient.
What concerns me more than anything, and the reason for my speech, is the proposal raised at the second autumn statement last year, which was confirmed today and not overturned, for the tax-free dividend amount to be reduced to £1,000 for 2023-24, and to be reduced still further to just £500 in 2024-25. My plea is for a reconsideration of that and I will give an example.
Consider a retired taxpayer, blissfully paying PAYE all their working life and in receipt of a state pension, perhaps an occupational pension as well, whose coding is working perfectly adequately. They have been in a sharesave scheme, which was the right thing to do. People have been encouraged to do that all their working lives and there are now a million people in the country in a sharesave scheme. They have been blissfully outside of doing a tax return. The system has worked easily for them.
The likelihood of ever receiving £2,000 of dividends was pretty low; possibly, the prospect of even £1,000 of dividends is fairly low. But I am afraid the likelihood of getting £500-plus of dividends through a sharesave scheme in 2024-25 is likely to be very high. Do we realistically want to catch people with fines through the door, because they have not realised what has happened and what has changed? Do we really want to drag potentially hundreds of thousands of retired taxpayers, who have never had to worry about a tax return, into the tax return system? I believe that the £500 threshold is unduly parsimonious.
Let us contrast that with two other aspects of the tax system I know where a small amount of tax-free income can be earned: the property allowance, where people can receive £1,000 of rent, perhaps by renting out a car parking space to a commuter or a holiday property for a week or two, and the trading allowance, where people can earn £1,000 that falls outside tax. So we are allowing £2,000 of tax-free income, which is available even to 60% taxpayers. That means we are potentially allowing £1,200 of tax not to be paid because that makes things administratively easy, it is not worth the hassle and the very small tax loss is worth while.
My plea to those on the Front Bench is that it may be too late to stop the £1,000 threshold coming into play for 2023-24, but it is certainly not too late to give consideration to the £500 threshold. As I say, we have allowed £2,000 of other earnings, for other things, to fall out of tax. I think the £500 limit is far too low and will drag innocent taxpayers into the tax system who perhaps have never been in it before. That is my recommendation to Ministers on the Treasury Bench.
Gender Recognition Reform (Scotland) Bill: Section 35 Power
Lord Mackinlay of Richborough Excerpts(1 year, 11 months ago)
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Craig Mackinlay (South Thanet) (Con)
I am rather concerned that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) might have a seizure at the end of my speech, but we will do our best to keep him calm.
I have the words of my hon. Friend the Member for Moray (Douglas Ross) ringing in my ears—that as the Bill was making its way through the Scottish Parliament, politicians received no legal advice such as that we have received today in the form of this good document, which, whether we agree with it or not, is available for analysis. It seems that as the Bill went through the Scottish Parliament, there was no such advice on overtones and issues regarding section 35 or the Equality Act 2010.
I do have issues with the whole concept of this—I am not going to stray into that too much, but I find the provision on the age of 16 scarcely believable. Even in Scotland a 16-year-old cannot drive or buy alcohol or cigarettes.
Christine Jardine
In Scotland a 16-year-old can vote and get married without parental consent—[Interruption.] And join the armed forces. I urge the hon. Gentleman to take credence of the actual situation in Scotland.
Craig Mackinlay
I was going to cover the things that people can do at 16. I understand that in education in Scotland, access for the armed forces to encourage a future and a career in the armed forces is actively discouraged, which is taking a lot of people away from credible and superb future employment. In Scotland—I always like to give the sunbed rule—someone cannot even go on a sunbed, and they cannot contract, yet here we are—[Interruption.] We all wanted to do lots of things aged 16. I rather wanted a tattoo and an earring, but here I am aged 56, and I am damn pleased I did not go down that route. It means that when I lie on beaches, most people sort of point at me say, “Look at that. There’s a guy without a tattoo on this beach.”
The other safeguards I am concerned about regard sex offenders. Are we really so naive as to think that those who are so minded will not exploit some of these rules to do things that we know they want to do? Are we so naive as to think that people will do the right thing in all circumstances? I am an absolute libertarian C4onservative and I have no interest in how people want to live—that is a matter for them. I have completely no interest, and I do not bring my opinions on it to this place for legislation. That is not my interest or concern. I steadfastly say that—people can do exactly as they please.
Alicia Kearns
I question some elements of the Bill, in particular why the amendment regarding anyone being charged or on trial for sexual offences should be excluded—I think that was madness. But I would question one part of my hon. Friend’s argument. What evidence is there that by a man becoming a woman, he somehow has more privileged access to children than he currently does as a man? That is what I cannot understand in his argument.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Lady has not been here for the whole debate, and I am getting concerned that people who have been here will not get in. I will reduce the time limit to three minutes, and I urge the hon. Member for South Thanet (Craig Mackinlay) to bring his remarks to a close, because otherwise he will have taken a lot more time than that.
Craig Mackinlay
I thank my hon. Friend the Member for Rutland and Melton (Alicia Kearns). I could go into quite a story about a nurse, a transsexual woman, who was presented to a constituent of mine and their daughter for an intimate examination, but that is a story for another day and I do not have time to examine it here.
I am concerned that the process for obtaining a GRC would be much easier and much reduced under the Bill, as opposed to what I think has been a well debated, well rehearsed, and settled argument across the UK up to this date. The settled will has been that a GRC can be obtained where someone has lived as a different sex for two years, had some medical advice and intervention and guaranteed that they shall live in that way for the rest of their days. I think that is sensible; I am fully in agreement with that.
As I said, I am a libertarian Conservative, so I really do not mind what people want to do, but this is an issue about section 35 of the Scotland Act. The Bill would change the Equality Act 2010 and change how we live. I support the Government.