Oral Answers to Questions

David Morris Excerpts

Tuesday 18th April 2017 Commons Chamber

[Jane Ellison]

I will look into the specific issue that the hon. Gentleman raises, but I want to make it very clear that HMRC investigates absolutely every report of national minimum wage violations. We take the matter very seriously, and we do enforce it.

[David Morris]

In my constituency I held a public consultation on creating an enterprise zone or a business park. The Labour county council has blocked it considerably and constantly. Would my right hon. Friend the Chancellor like to come to my constituency and listen to what my constituents are saying about having an enterprise zone?

[Mr Philip Hammond]

As it happens, I was just planning my domestic travel arrangements for the next five weeks, and I will keep my hon. Friend’s request in mind when I do that.

Class 4 National Insurance Contributions

David Morris Excerpts

Wednesday 15th March 2017 Commons Chamber

[Mr Hammond]

I am listening carefully to the right hon. Gentleman, but I am not hearing anything worth listening to.

[David Morris (Morecambe and Lunesdale) (Con)]

I was self-employed for 27 years before I came into this House, and I have campaigned long and hard for the abolition of class 2. My hon. Friend the Member for Harrow East (Bob Blackman) said that this is a tax cut, which it is. Will the Chancellor allude to what the self-employed will be getting? As a self-employment ambassador to the former Prime Minister, I know the self-employment sector is very keen to find out exactly what it will get for this extra annuity.

[Mr Hammond]

The self-employed benefit from increased personal allowances, taking 3 million people out of tax altogether, and a tax cut for 29 million people. From April this year, the self-employed, like the employed, will have access to tax-free childcare and the additional childcare offer for three and four-year-olds. That is a new extension of the entitlement to the self-employed. As I mentioned, the extension last year of the state pension to the self-employed on the same basis as employees really was a dramatic step-change in the way the system operates. It is worth noting that with all these enhanced entitlements there has been no change at all to the contribution asked of self-employed people.

Palace of Westminster: Restoration and Renewal

David Morris Excerpts

Wednesday 25th January 2017 Westminster Hall

[Chris Bryant]

We should all read Caroline Shenton’s book and debate that later. The truth of the matter is that everybody was predicting a fire long before 1834 and we did not take any of the action necessary to ensure that we preserved the building. It is only good fortune that we ended up being able to save Westminster Hall, which is one of the most beautiful buildings in the world.

Another problem new to us in the 20th and 21st century is the substantial amount of asbestos in the building, which simply has to be removed. There have already been several asbestos scares.

[David Morris (Morecambe and Lunesdale) (Con)]

I congratulate the hon. Gentleman on securing this debate. On the subject of asbestos, I walk around the estate all the time seeing the little “a” stickers everywhere. Does the hon. Gentleman agree that, if we stay in the building over the period of renovation, asbestos is a health hazard for staff and Members?

[Chris Bryant]

There is a very serious point here. Some people are arguing—I will come on to this point later—that we should stay in the building while the work is being done. That incurs a very significant risk to our safety and that of the people who work here. If we were to take the measures necessary to protect people properly while removing asbestos, that would dramatically increase the cost of and the risk to the project and the public.

Water is penetrating much of the stonework and doing lasting damage. Many of the 3,800 bronze windows, which were a wonderful idea when first installed, no longer work properly and have to be refitted.

We should be thoroughly ashamed that disabled access in this building is truly appalling. It is phenomenally difficult to get around the building for someone in a wheelchair or who has physical difficulties. The roundabout routes that many have to take to make an ordinary passage through the building are wrong. We still expect members of the public to queue for more than an hour in the pouring rain, which is not acceptable in the 21st century.

We have to act because this is one of the most important buildings in the world. It is part of a UNESCO world heritage site. The walls of Westminster Hall date from 30 years after the Norman conquest, the ceiling dates from the time of Richard II at the end of the 14th century and the cloisters date from the time of the Tudors. Every single tourist who comes to this country wants to be photographed in front of this building, and every film, Hollywood or otherwise, that wants to show that it is set in the UK or in London shows this building.

The people of this country have a deep affection for the building. One poll—I am very sceptical about polls, but none the less I am going to use this one—showed this week that 57% of the public want us to do the work and 61% think that we should move out to allow it to be done more effectively, more quickly and more cheaply.

Today’s MPs and peers hold this building in trust. It is not ours—we hold it in trust. Our predecessors got it hideously wrong in the 19th century. They kept on delaying necessary work. That delay made the fire in 1834 not only possible but inevitable, and so we lost the Painted Chamber, St Stephen’s Chapel and what was reputedly the most beautiful set of medieval buildings in the world. They then insisted on staying on site while the new building was built around them and constantly complained about the noise and the design. The result was long delays and a massive budget overrun. They started in 1840, but it was not completed until 1870, by which time Barry and Pugin were dead and their sons were battling about the ongoing design issues. If we do the same today, we will not move back in until 2055 at the earliest.

Of course we have to be careful about money, which is why the Joint Committee, which started with a very sceptical point of view on the project, recommended what we believed to be the cheapest and best option, which is a full decant. I say “cheapest” because, however we cut the numbers that have been put together on a very high-level basis for the two Houses, the option of full decant comes in at £900 million less than trying to stay in the building.

The Earl of Lincoln, the first commissioner of works, told MPs in 1844 that

“if I had been employing an architect in the construction of my private residence, I should have a right to fool away as much of my money as I thought fit; but in the case of a public building, I consider myself acting, to a certain degree, as guardian of the public purse, and to have no right to sanction any expenditure, either for the gratification of any pride, or the indulgence of any fancy I might entertain, as to the proper and efficient construction of the building.”

We should adopt that same attitude today. We should be going for the cheapest option—our constituents would expect that of us—but not a cheap option that does not do the job properly.

Our argument in Committee did not hinge entirely on the money. Three Members in the Chamber were on the Committee—my hon. Friend the Member for Alyn and Deeside (Mark Tami), and the hon. Members for Airdrie and Shotts (Neil Gray) and for North Antrim (Ian Paisley). They would agree that, when we started our consideration, we all assumed we would come up with some kind of plan that meant we stayed in the building—a kind of half-and-half solution. We consulted widely, but every single person we asked told us that that was simply not workable. “Not workable, unfeasible, impracticable, foolhardy, risky and dangerous” were the sort of words people used. We should listen to them.

I want to deal with some of the things that other people have been suggesting. First, something I have heard often, though not so much in the Commons or Parliament, is that we should move to elsewhere in London or outside the capital. I disagree. This is the home of Parliament and should remain the home of Parliament, but there are good reasons beyond the romantic association. If we were to leave the Palace forever, we would still have to do the work to protect it because it is a world heritage site, and we would not save a single penny. If we moved elsewhere in London, we would have to find a space that can accommodate everyone not only in the Palace but on the rest of the parliamentary estate—Portcullis House, Norman Shaw North, Norman Shaw South, Parliament Street, Millbank and all the Lords’ offices—which would be a considerable piece of prime estate to find. If we moved outside London, we would have to move the whole of Government as well, because all Ministers are Members of the Commons or the House of Lords. That option is impracticable and very expensive.

The second thing I hear—this is the most common—is that, if we leave we will never come back. I have been told that by four Members of Parliament today alone. They argue that the Commons should sit in the House of Lords, and the Lords should sit in the Royal Gallery. That is basically the proposal of the hon. Member for Gainsborough (Sir Edward Leigh)—he is not right hon. but he should be, and learned and gallant and all sorts of other things as well. I have discussed the issue with him many times and we can be friendly about it, but there are lots of problems with his proposal.

That proposal would add £900 million to the cost—I have already quoted the point made by the Earl of Lincoln in 1834. Furthermore, public and press access would be very restricted under the hon. Gentleman’s plan, and it would be difficult to have any kind of fully functioning Public Gallery in his scheme, whether for the Commons or the Lords. His plan would rely on keeping a large part of the building open around the work, because of the need for Whips Offices, rooms for Doorkeepers, police officers and Ministers, and—who knows?—some people might even want a Tea Room.

House of Lords Reform and Size of the House of Commons

David Morris Excerpts

Wednesday 19th October 2016 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

I am absolutely delighted to participate in today’s debate, particularly at a time when, owing to Conservative gerrymandering, the UK’s democratic structures look more fragile than ever. Under the previous Prime Minister, as numerous speakers have said, appointments to the unelected House of Lords were made at a faster rate than under any other Prime Minister since life peerages began. Incidentally, the outgoing Member for Witney will be replaced tomorrow—hopefully by the Labour candidate, Duncan Enright. Perhaps we have not seen the last of the former Prime Minister—perhaps we might see him in the House of Lords in future.

Astonishingly, between taking office in 2010 and leaving this year, the former Prime Minister added 261 peers at an estimated cost to the taxpayer of somewhere in the region of £34 million. Frighteningly, it is thought that up to 20% of all appointments to the House of Lords have been people who have given substantial donations to the Conservative party. Others appointed include the former Prime Minister’s cronies, his head of operations, the head of his No. 10 policy unit and the head of external relations.

[David Morris (Morecambe and Lunesdale) (Con)]

Does the hon. Gentleman agree that the same could be said of the Labour party and the unions?

[Ian Lavery]

If the hon. Gentleman looked at the statistics on trade unionists, he would find that appointments by the former Prime Minister were completely different.

The bloated Lords now has over 800 Members and leaves the UK noticeably as the only bicameral country in the world where the second Chamber is larger than the first. Indeed, as mentioned by the hon. Member for Perth and North Perthshire (Pete Wishart), the only Chamber that is bigger is the national assembly of China. It is an absolute outrage. Let us be honest about it: we are a laughing stock in this regard. It is worth remembering, of course, that China’s population is 28 times the size of the United Kingdom’s.

--- Later in debate ---

[David Morris (Morecambe and Lunesdale) (Con)]

I am going to do something very brave and propose a solution to the problem down the corridor. I do not want to get rid of any of the lords, so I will not vote for this motion. Without wanting to be controversial, I have a bloodless solution. If we retired lords at 75 years of age, we would remove approximately 250 of them straight away. Let us not forget that the lords are there not to represent but to scrutinise. We do not want to get rid of every one of them, because there is expertise down there that can outweigh expertise in this Chamber—especially on the SNP Benches.

The average age in the Lords is 70, believe it or not, while the average age of those who actually contribute in the other place is 65. After that age, attendance drops off dramatically. We have to look at this in the round. If we reduced the Lords by 250 Members—those aged over 75—we would bring it down to approximately the size of the Commons. Those lords would then stay on to advise. They would not get paid or claim expenses, but go on to a higher Chamber called the Lords council, and advise their own Committees. They could then feed into the legislative process without any cost to the taxpayer.

Outside this Chamber, nobody is talking about the Lords—it is only us in here. We should not throw the baby out with the bathwater; we should look at a grown-up way of getting the numbers down. Once we have done that, over a period of 15 years, natural attrition will take its toll. The 250 who have been put into the higher status could still call themselves lords, still have the gravitas and the gratification they want, and still contribute. They will go, and we can have an apportioned system, with so many Conservatives, so many from Labour and—dare I say it?—so many from the SNP. We can break it into segments. They will be able to scrutinise sensibly in a cross-party manner. I hope to have brought some kind of sense to this subject.

Savings (Government Contributions) Bill

David Morris Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th October 2016 Commons Chamber

[David Morris (Morecambe and Lunesdale) (Con)]

Does the hon. Gentleman not agree that what Gordon Brown did when he was Prime Minister—taxing pension schemes—was catastrophic? I know that, because I had a pension scheme and stopped paying into it.

[Ian Blackford]

I absolutely agree with the hon. Gentleman that that was the beginning of the end for defined benefit pension schemes in this country. At the time, just about every company in the FTSE 100 had a defined benefit pension scheme. There are hardly any today. My criticism of what the Government are doing with the Bill is that they are once again undermining pension saving. I will come on to the facts of the matter. We cannot get away from this: anybody saving into a pension does so out of pre-tax income. Anybody investing in the LISA will be doing so out of taxed income. That is unfair and unjust. As I mentioned earlier, this is more about a wheeze for the Government to generate taxation income. It is wrong and they should not be doing it without proper incentives for the young people they are targeting.

We would resist any further attempts to undermine pension saving and, specifically, to change the tax status of pension savings. That would be little more than an underhand way of driving up tax receipts—sweet talking workers to invest after-tax income in LISAs when their interests are best served by investing in pensions. We have considerable challenges in ensuring that we take appropriate action and provide the right kind of leadership to encourage pension savings above all else. That is not happening under this Conservative Government. Pension savings are the most tax-efficient arrangement for savers and that is what we ought to prioritise

We also need to revisit the issue of pension tax relief to make it fairer to pension savers. Many commentators and providers, such as Zurich, have suggested that a flat rate of pension tax relief could increase saving among low earners. While ensuring pensions remain an attractive investment for higher earners, it would be inherently fairer. Coupled with auto-enrolment, it would give a powerful boost to the pensions of millions of workers and help the vast majority of people to save more for retirement. It would also end the complexity of the current regime and set tax relief at a sustainable level for the longer term. That kind of approach rather flies in the face of what the Minister has signed off in the impact assessment, which states:

“The government could have done nothing more, relying on existing tax incentives to promote saving among younger people and working families on low income. However, this would have failed to provide the necessary level of support for those who are unable to use existing support to plan and save for their future.”

This is bunkum. Tax relief can be addressed, as I have said, but we must also take into account the fact that a review of auto-enrolment is due in 2017. We can strengthen auto-enrolment to deliver inclusion and encourage pension saving. We want to work with the Government to strengthen auto-enrolment and pension savings, which are the most efficient way for young people to save.

Just today, as we debate the Bill, the Financial Times has published an article highlighting new analysis on pension savings conducted by Aon. The analysis concluded that UK pension savings have a massive deficit of £11 billion a year. A poll of 2,000 pension savers indicates that only 16% of workers are saving enough to maintain their standard of living when they stop work. Why on earth do we want to take attention away, through the Bill the Government are bringing forward, from pension savings? Why are we not focusing on what we should be doing: fixing the problems in the pension industry? That is the priority of those of us on the SNP Benches.

The Aon analysis suggests that members of defined contribution schemes on average need to pay an extra £1,400 a year to achieve a decent retirement income. That is what we should be addressing in this Chamber here tonight. My message to the Government is this: let us all work together to tackle the under-investment in pension savings, to deal with the many challenges we face, and to enhance the attractions of pension savings. That is the priority. Today, too many people are excluded from workplace pensions.

I commend the introduction of auto-enrolment, but recognise that more needs to be done to enhance auto-enrolment and seek to offer affordable solutions to the low-paid, women and the self-employed who, to use the Prime Minister’s term, have been left behind. We need to tackle the issue of those who are currently excluded, such as the 20% of workers who earn less than £10,000 a year. We need to make sure we have an inclusive approach to pension savings that works for all workers.

The average value of conventional ISAs held by those aged between 25 and 34 is £5,186. The annual allowance for the lifetime ISA as proposed is £4,000, so from experience of ISAs this question needs to be addressed: who exactly will benefit? It looks like yet another policy to benefit the rich who can afford to save at such a level and therefore get the full benefits of the Government bonus. So much for the sermon from the Prime Minister about delivering policies for those left behind. It looks to us more like the same old policies for the benefit of the wealthy. When we look at the news today we see that the UK is looking to spend billions of pounds for the City to access the single market—and we should not be surprised. It is yet another case of the poor subsidising the rich.

We need to address the unintended consequences of quantitative easing, which has driven down yields, moderating expectations of future growth for pension funds and substantially increasing the deficit for many defined pension schemes, as the hon. Member for Salford and Eccles (Rebecca Long Bailey) mentioned. If we add to that the decline in annuity rates, which is cutting expectations of pensioner income, it means that savers have to increase their contributions to defined contribution schemes. This makes for a challenging environment for pension savers, which needs to be addressed.

On 11 July, the former Secretary of State for Work and Pensions, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), said that

“there is a very real systemic issue with DB pension schemes that we need to look at, and my Department will be discussing it further in the months ahead.”—[Official Report, 11 July 2016; Vol. 613, c. 10.]

Since that statement, there has been silence from the Government. Where is the response to the fundamental challenges for today’s pensions and, as some might argue, the crisis in both defined benefit and defined contribution schemes?

We know of the significant factors affecting the BHS and British Steel schemes, and we know that hundreds of other schemes are facing significant deficits. Rather than seeing the Government face up to these challenges and the threat to the many beneficiaries of the schemes, we see a missed opportunity to tackle what ought to be the priorities. When will the Government respond in detail to what the former Secretary of State for Work and Pensions admitted, which we all know to be the case? I give the Minister the opportunity to intervene and tell us what the Government have done since the announcement of the previous Secretary of State. Where is the Government’s response? What do they have to say about the deficit on defined pension schemes? I see Government Members on the Front Bench looking down, but we need answers. What we get from this Government is no action.

--- Later in debate ---

[David Morris (Morecambe and Lunesdale) (Con)]

It is a pleasure to follow my hon. Friend the Member for Gloucester (Richard Graham). I am sure the Bill covers the self-employed, but that has not been brought up today. When I was self-employed 20 years ago, the then Government made a change to taxation which basically meant that a substantial amount of every pound that I put into my pension pot was taken out in cash, so I stopped paying into a private pension. The policy in front of us today proposes a break in that sort of behaviour, particularly for the self-employed. The self-employed have always been worried about the harmonisation of national insurance contributions. When I was the Prime Minister’s ambassador for the self-employed, I worked closely with my right hon. Friends the Members for Bromsgrove (Sajid Javid) and for Chingford and Woodford Green (Mr Duncan Smith) on trying to harmonise national insurance contributions so that self-employed people would eventually have the same state pension.

However, I want to talk about the lifetime ISA proposal, because it should not be confused with an extra pension top-up, about which every speaker in the debate before me has talked. It should instead be seen as a savings guarantee for the future. It was a tidy move by the Treasury and the Department for Work and Pensions in reaching the point of harmonising NICs. This proposal takes us a little further into the realms of the self-employed being able to look after themselves in future.

I do not want the LISA to be confused with a pension supplement. It is not that. It is something that helps to save for the future. To put it in perspective, we hear a lot of doom and gloom, but let us look where we were seven years ago. The then Prime Minister, the former Member for Kirkcaldy and Cowdenbeath, used to say quite often that he had put an end to boom and bust, but we then went bust in the biggest possible way. Near enough 10 years down the line from that, we have to address how we are going to save for our future. As someone who took the decision 15 or 20 years not to pay into a pension plan, I wholeheartedly welcome what the Government are doing.

I want to provide some perspective. Unemployment is dropping in my constituency—so much so that a Labour councillor was boasting about his business and saying that he cannot get enough employees to fill the positions. The workplace pension has its place, but the LISA has a separate place. I hope that it will carry on and enable people to save for their old age.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I do not want to start by correcting the hon. Gentleman, but I am pleased to have a savings account named after me, and the LISA is most definitely a “Lee-sa” and not a “Lye-sa”. Does he agree that financial education in schools is the crux of the matter? Children must learn how to budget in order to learn how to save and have a secure relationship with their finances.

[David Morris]

That is part and parcel of the mix. However, this Bill is about where we are going in the future. I take on board what the hon. Lady says and I am sure that everyone else in the Chamber and in the country more widely will have done, too.

Thank you for allocating this time to me, Madam Deputy Speaker. I wholeheartedly endorse what the Government are doing.

Oral Answers to Questions

David Morris Excerpts

Tuesday 7th June 2016 Commons Chamber

[The Exchequer Secretary to the Treasury (Damian Hinds)]

In fact, spending on disability benefits is going up, not down. There are many more personal independence payments claimants getting the highest rate than there were under disability living allowance; 200,000 more people are getting carers allowance; 22,000 more people are getting help through Motability, and we have a firm commitment to work towards halving the disability employment gap, which is so important for driving up incomes. The gap has remained stubbornly wide, but the most recent quarter showed a small decrease.

[David Morris (Morecambe and Lunesdale) (Con)]

In 1945 there was a dream of a link road from what is now the M6 to Heysham port, through which 10% of our GDP comes in. That link road will soon be opening. Does my right hon. Friend the Chancellor agree that part of the long-term economic plan is to show that this area of Lancashire will be regenerated? More to the point, would he, diary permitting, like to open the road?

[Mr Osborne]

I remember visiting the road with my right hon. Friend the Prime Minister just days before the general election. Because our hon. Friend had been such a champion of his constituency, his constituents said, “Let’s have him back in Parliament championing more investment in Lancashire.” Diary permitting, I would be delighted to open the link road. Indeed, when I was at Warrenpoint in Northern Ireland yesterday, I met the company that trades between Heysham and Warrenpoint, and it is investing in new jobs there.

Budget Changes

David Morris Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

Let me deal with this point. During the whole of the last Parliament, we debated in this place measures to reduce spending and the Labour party constantly opposed them. It argued that we should borrow more—I presume this is what the hon. Gentleman means from what he has just said—to borrow less. If that is the position of the shadow shadow Chancellor, it is not much of an improvement on that of the shadow Chancellor. It is right that we try to find savings in the welfare budget, and the spare room subsidy is an important part of that.

[David Morris (Morecambe and Lunesdale) (Con)]

Before I became a Member of Parliament, I was one of a dwindling number of self-employed people in this country. The self-employment sector now numbers 4 million-plus. Does my hon. Friend agree that we have cut back on red tape on self-employment and put more money into the self-employed, which is more than the Labour party did in 13 years? I was a self-employed person, so I can speak with authority on that.

[Mr Gauke]

My hon. Friend brings much expertise to this issue, and I know that he is very pleased that one of the things we were able to do in the Budget was to finally remove class 2 national insurance contributions. That was a tax on the self-employed and it was also a significant administrative burden, so I am pleased that we have been able to remove it.

Budget Resolutions and Economic Situation

David Morris Excerpts

Wednesday 16th March 2016 Commons Chamber

[Tommy Sheppard (Edinburgh East) (SNP)]

I would like to start on a positive note by welcoming the Chancellor’s statement on the sugar tax. He may well want to consider whether he needs to wait a full two years to bring it in, but none the less it is a welcome start, and I commend him for it.

I am afraid that is where my generosity towards the Chancellor, his Treasury team and this Budget must end, because I see the rest of it in exceptionally negative terms. This is a Chancellor, after all, who is making a career out of failure. He has failed every one of the macroeconomic targets that he has set for himself. If we were to score him on a report card, we would have no option but to give him an F-minus. I think that when he began to prepare this Budget he was looking at failing in his final objective, which was to create a budget surplus by 2019. I would like to pause to ask what that is actually about, because a surplus in Government finances is quite a strange thing. It means that the Government are spending less on this country’s public services than they is taking in taxes from the people who depend on them. That is a strange thing to aim for.

I wonder why the Chancellor is so concerned to have a £10 billion nest egg in 2019-20. It would not have anything to do, would it, with the proximity of the 2020 general election and a Chancellor who is determined to see a longer career for himself in this House, perhaps in a different position? In fact, I wonder whether the Chancellor has less of a long-term economic plan for the country and more of a long-term political plan for himself. In order to get the £10 billion surplus, he has decided that he has to have another range of cuts, with £3.5 billion being taken out of non-protected Departments. I dread to think what that will mean when we work through the detail.

We have to ask ourselves: is there no alternative to this austerity being piled on top of austerity? There is an alternative. We said during discussions on last year’s Budget—and we will say it again this year—that rather than cut back on public spending, a prudent Government should have a slow, sustained increase over the lifetime of this Parliament in order to use the public sector as an engine for economic growth to raise revenues, eradicate the deficit and drill down on the debt. That is received economic wisdom in most of the world, including most of our competitor countries, most of the members of the European Union and the United States of America. It is only the City of London and the United Kingdom Treasury that are blinkered to that very obvious approach.

This is also a Budget for inequality. If we look at the middle income range, we will see that someone who earns £35,000 will benefit by about £180 a year from the increase in the threshold for the basic rate of income tax. However, someone who earns £45,000 will benefit by £580 a year—more than three times as much. In what parallel universe could that approach be described as removing inequality in our country?

And that is only if people are lucky enough to be earning enough wages to be taxed in the first place. Even with the Chancellor’s pretendy national minimum wage, if someone is earning £7.20 an hour over 30 hours a week, they will not meet that basic income tax threshold. This Budget does nothing for the millions of people who are in that position. It does nothing for the people who are on fixed or low incomes, or for those who, because of their situation, have to rely on state benefits.

Is not the cruellest thing of all that, while tax breaks will be given to people who can afford to pay their taxes, there will be miserly and parsimonious cuts to the benefits of the most vulnerable in our community? The Department for Work and Pensions is preparing for a £1.2 billion cut in the personal independence payment programme. That will involve assessing 640,000 claimants, 200,000 of whom will be removed from the benefit altogether, while the rest will have their benefits reduced from £85 to £55 a week. What a miserly, mean-spirited, mean-minded approach to providing a welfare system.

The Chancellor has made much of this being a Budget for business. Before I came to this House, I started and ran a successful small business. I welcomed the day that it did well enough to pay corporation tax, because it took a few years to get there. The Chancellor talks about this being a nation of shopkeepers, but there are plenty of shopkeepers in my constituency who are less worried about the rate of corporation tax than they are about whether enough people are coming through the shop door with enough money to buy their products and to keep them and their employees afloat. Rather than tinkering, it would be better to consider a programme for economic growth and regeneration.

Let us not kid ourselves that it is small businesses that will benefit from the one-size-fits-all business tax approach. A business that makes a £20,000 profit pays the same rate of tax as a business that makes a £20 million profit. That means that most of the £15 billion that is being given back in the business tax cuts is being given back to large multinational corporations that are the friends of the Conservative party and of the Chancellor.

[David Morris (Morecambe and Lunesdale) (Con)]

Will the hon. Gentleman give way?

[Tommy Sheppard]

I will not give way, because I have a minute left and others want to come in. I say to the small businesspeople of this country: “Be very wary about what is being done in your name. This is not the way to make your business successful; it is a tiny little bribe.”

I am out of time, but I want to finish on the Chancellor’s suggestion that this is a Budget for the next generation. God help us if he really believes that. The next generation have just had the remaining grants for education removed from them. They are faced with living with their parents well into their 30s and 40s because their housing options have gone, and they are now being told that they may have to work until they are 80 years old. I do not think that those people will thank the Chancellor for this Budget. They will expect the Government to do an awful lot more to provide them with the future that they require.

--- Later in debate ---

[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?

[David Morris]

Will the hon. Lady give way?

[Helen Goodman]

I would rather not take another intervention, because I am running out of time.

On the skills gap, there is no evidence that changing the governance status of our schools will make any difference to their effectiveness. In four academies in my constituency, GCSE scores have fallen in the past three years. At one point they achieved a figure of 66% of children getting five A to C grades, but last year they were down to 50%. There has been no analysis of such falls.

It is regrettable that the Chancellor has not produced any distributional analysis along the lines of what we on the Treasury Committee have repeatedly asked for—in other words, an analysis of the impact by decile of tax and benefit changes in this Budget. It is absurd that we have to wait for the IFS because the Treasury is trying to hide the impact of the measures in the Budget.

Many hon. Members have pointed to the unfairness of the measures that will give people £700 million through cuts to capital gains tax and give higher rate taxpayers £400 million, but take £1.2 billion from disabled people. This is not only about fairness, but about economic efficiency. The OECD has looked at all economies and has found that more equal societies grow faster. Giving money to the bottom half of the income distribution raises the growth rate by 0.4% for every 1% redistributed, whereas giving money to the rich hinders growth and slows it down.

There are a number of hidden things in what the Chancellor is trying to do. Table 2.1 in the Red Book sets out the £3.5 billion of cuts that he needs to make to hit his fiscal target in 2019, but it does not specify which Departments those cuts will come from. We would like Ministers to explain that.

The Chancellor flunked the tax reforms on pensions, because he is concerned to maintain support in the run-up to the referendum.

[David Morris]

I am waiting to hear what the hon. Lady will say about pensions, but does she not agree that setting up a young people’s ISA so that they can put in £4,000 every year if they are under 40 years of age, with the Government putting in £1,000, will put them in a better position in their old age?

[Helen Goodman]

If I may say so, what the hon. Gentleman says is somewhat unrealistic and optimistic. Even the Treasury’s own figures on Help to Save, which were published this week, suggest that only one person in six will use the new scheme. People’s incomes have been cut, so they do not have the money to set aside large amounts for savings.

On tax reforms, my hon. Friend the Member for West Bromwich West (Mr Bailey) gave a thorough critique of the changes to business rates. We need to change business rates, and I was feeling quite optimistic about that until he spoke. There are questions for the Treasury to which everybody would like answers: what will be the impact on local authorities? What will the distributional impact be—where in this country will the changes to business rates have the most significant effect? Will such changes tip some local authorities into having even more serious financial problems than they have already?

It would be churlish not to welcome the new sugar tax on fizzy drinks and the measures on tax avoidance. The Treasury Committee is doing an inquiry on tax avoidance, and we will look at those measures in more detail.

As hon. Members may know, people who have been advised to have music therapy can go to or listen to operas that deal with their particular problems. At the moment, the Royal Opera House has an opera on about a regent who is trying to become the tsar, but he has to do some rather unpleasant things to achieve his ultimate ambition. I thought it would be ideal for the Chancellor to go to until I discovered that it was called “Boris Godunov”.

Overseas Voters Bill

David Morris Excerpts

Friday 26th February 2016 Commons Chamber

[Mr Chope]

Thank you, Mr Deputy Speaker.

[David Morris (Morecambe and Lunesdale) (Con)]

I thank my hon. Friend for securing this debate. I am intrigued by his proposition on internet voting. As a fellow member of the Political and Constitutional Reform Committee in the previous Parliament, I can bear testament to his prowess and knowledge. He rightly mentioned utilising the armed forces in an experiment on overseas voting. Perhaps Skyping could be used as a method, because face recognition on computers is now very sophisticated; indeed, we use it in airports across this country and in Europe. Does he agree that this could be a way ahead for internet voting by armed forces in overseas territories?

[Mr Chope]

I have to admit to not being an expert in this area at all. If my children were here, they would say to me, “When did you last Skype?”, and the answer would be, “Never.” I know that there is such a thing as Skyping, that other members of my family participate in it, and that it is a very inexpensive way of communicating with friends and family overseas. I imagine that it would fall within the term “internet voting”. However, I do not have the expertise to be able to answer my hon. Friend’s question about whether it would be possible to secure a system of Skyping that would be proof against fraud or misrepresentations. I leave that to the Minister and his officials.

In clause 3 I do not try to set out a prescriptive arrangement for internet voting. That is because this is a really good example of where regulations should be brought forward by the Government using their expertise rather than relying on albeit gifted amateurs to do the job for them. The clause says that the Government “shall bring forward regulations”, and, in subsection (2), that they

“shall include provisions to prevent identity fraud and to ensure that only those eligible to vote can vote.”

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[Ian Lavery]

I fully understand that, but I would not categorise it as a priority. Some 7.5 million people in the UK are not registered, and since the introduction of IER a further 1.4 million people have dropped off the register. The Opposition fully agree that we need to look at encouraging participation in voting, but we do not see overseas voting as a major priority. It should be part of a concerted effort to get as many people as we can to vote. I am not sure that the hon. Gentleman and I are too far apart on that, other than on the question of what should be a priority.

[David Morris]

I congratulate the hon. Gentleman on his first occasion at the Dispatch Box for the Opposition. Is the Opposition’s standpoint that they would like to see internet voting come online in the mainstream, not only in the UK but abroad?

[Ian Lavery]

The Labour party’s position is that we would like to investigate the potential for that. As I have just said, it is important to remember that people have busy lives and they work. As well as online voting, there are other options that we would like to look at, which could play a major role. We have to try to open it up. Perhaps we need to look at polling day. Why is it on a Thursday from 7 am until 10 pm? How long has that been the case? It is generally accepted across the Chamber that we need to look at more innovative ways to encourage people—whether overseas or in this country—to vote and to take part in the democratic process. I do not think the hon. Gentleman and I are too far apart on those issues. It is perhaps, as I mentioned to the hon. Member for Christchurch, just a case of why one should be a priority and others not.

We need to look at the question collectively and try to come up with a way to encourage people to get out there and vote. As politicians, that is really what we want. There are 5.5 million British citizens living abroad, and I think the hon. Gentleman said that only 100,000 of them were registered to vote. To be honest, the figure that I have is 20,000, so it was news to me that that number had somehow multiplied by five. I am encouraged by that, but we need to encourage people into the process, and we can do that together across parties.

Small Businesses: Tax Reporting

David Morris Excerpts

Monday 25th January 2016 Westminster Hall

[George Kerevan]

I am happy to reinforce the hon. Gentleman’s point. Indeed, various Treasury papers suggest that the shift towards a paperless tax system will increase receipts by about £600 million. That is not a bad thing, and no one would oppose it if it happened, but the issue is that the Minister and HMRC are rushing to judgment in introducing the proposed system. They think that moves to put it in place will be so advanced by 2020 that they will be able to start instructing small businesses to update quarterly.

Buried in the small print of last November’s Treasury press notice is a suggestion as to one of the advantages that will come from the proposal:

“HMRC expects the number of calls”

to its various call centres

“to reduce from 38 million in 2015-16”

to a mere 15 million by 2020. Magically, as a result of the electronic vision being presented to us, about 23 million phone calls will no longer be made to HMRC. Does anyone here, the Minister included, actually believe those numbers?

In the run-up to introducing a new system, the likelihood is that things will go wrong. If we are lucky, we might make something like the proposed saving in calls 10 years from now, but I doubt that that will happen between now and 2020. I have great respect for the Minister, but I would like to hear him swear on his heart that he actually thinks we will deliver 23 million fewer calls.

[David Morris (Morecambe and Lunesdale) (Con)]

From what I can gather, the whole point of having a trial period from 2018 is to iron out that anomaly in the system. Would the hon. Gentleman not agree that it is welcome that we are using small and medium-sized enterprises and self-employed people as a test bed, rather than putting through some sort of virtual reality programme?

[George Kerevan]

I could not agree more. At the risk of repeating myself, I stress that the Scottish National party—I think this goes for all parties—agrees that this is the road to take and that we need to consult, but there is a question over the speed at which this is being done. I understand why the Treasury and HMRC have to sell things and to make promises about what they can deliver but, as the hon. Member for Hertsmere said, experience proves that the introduction of major IT systems rarely works out, particularly when they are on this scale. We are talking about getting 50 million taxpayers and small businesses on this system between now and 2020, but that will not happen.

The Government need to slow down and consult more. The Minister has to stop putting in place arbitrary timetables for when the consultation will work itself out. In particular, he has to stop telling us that he can implement the system in 2020 and impose quarterly returns, which is the thing that is worrying small businesses. Instead, he should concentrate on bringing the consultation to a point where everyone is on board, and then the system will come into play.

I want to reinforce an important point that other Members have made in interventions: we do not have full digital coverage in this country. When Culture, Media and Sport Ministers get up in the main Chamber and talk about getting to nearly 100% coverage, what is the target date? It is 2020, but that may slip. If the new system needs 100% broadband coverage, it makes much more sense to wait until that coverage is in place before switching over the entire British tax system, including the system on which small businesses depend, to a new one. That is another argument for delaying full implementation until 2025 or 2030.

I worry that there is a hidden agenda. Clearly, the Government are attempting to make cost savings. The very Treasury press statement that introduced the idea of moving quickly to a new electronic tax system by 2020 told us that HMRC seeks to make

“£717 million of sustainable resource savings”

by 2020. The system is being put in place at the same time that HMRC is being expected to make major cuts. Again, that does not all stack up.

My real point to the Minister is that no one opposes the introduction of this system, but clearly there has been a catastrophic failure in how the Government have presented it to small businesses. We hear constantly from Ministers that they are pro-small business, so now is the time for them to honour those words. If they simply consult more, delay the introduction of the new system until they are sure that they have everyone on board and set aside the requirement for quarterly reporting until they are sure that the system is actually working, they will achieve success.

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[David Morris (Morecambe and Lunesdale) (Con)]

May I declare an interest and refer hon. Members to my declaration in the Register of Members’ Financial Interests? I am the Government’s self-employment ambassador and as such it is my task to engage with people in the self-employment sector to find out exactly what concerns them and exactly what they would like from the Government on all matters of self-employment.

I was a small businessman for the better part of 30 years before entering Parliament. I know that I do not look old enough but, believe you me, I spent every year building my business up, just as the hon. Member for Hove (Peter Kyle) outlined. It was a steep learning curve of trepidation and fear most of the time, but when one gets a hand on the roller coaster, one begins to make a success of it.

It has just been made clear that this is not going to be a new form of taxation every quarter, but the self-employed sector is frightened that it could become the new VAT. The sector could be given a bill over a period of, perhaps, 10 years from the date when the new policy comes in and becomes law, and HMRC could mutate that to become a collective every quarter. Rightly, the self-employment sector is very worried that that might happen with this policy. From my research and what I have just been given from the Treasury, I am sure that will not happen, and I am sure the Minister can assure me of that at the end of the debate.

The sector is concerned that the proposal could be a predictor of turnover. As I outlined, when I was self-employed, I worked year on year, until I started to be comfortable. Some years were good and some were extraordinarily bad. As the hon. Member for Hove eloquently said, this is not a matter of one size fits all. Self-employment differs across the sphere. Some business may be seasonal, a classic example being a man who grows Christmas trees. He should have a good December, but during the rest of the year he will have to have other self-employment.

We do not want online registration to become a yardstick with which to beat the self-employed. I know from my experience of being self-employed that turnover can fluctuate. We have just been through a deep depression and we have seen its effects on small businesses as well as large businesses. We do not want HMRC to start saying that business X did better in quarter one four years ago than it is doing now. Self-employment does not work that way. Businesses evolve and sometimes they become smaller and sometimes they enlarge. One size does not fit all.

Not all self-employed people are computer-savvy. Some 20% are not online, especially in rural areas. That may include the farming community and its business models, up to 40% of whom are not computer literate and cannot get their heads around online formulations. The hon. Member for Hove, who spoke eloquently and forcefully, said we do not want it to become more complicated for the self-employed to get in touch with HMRC to sort out their problems.

It is welcome that, to introduce the policy by 2020, a voluntary scheme will be looked at. That would be pivotal in the success of the policy. What should also be looked at is wider consultation across the whole self-employment sector. The Federation of Small Businesses should be consulted at length, as should British Chambers of Commerce, the Association of Independent Professionals and the Self-Employed and a whole host of other self-employment bodies with a firm stakehold in the self-employment sector and society.

Some business anomalies come and go and HMRC should recognise that and help. I referred to the chap who grows Christmas trees once a year. I was in the retail and service industry, which fluctuates between holiday periods and between periods when there is more spending on the high street and recessions. That should not be used as a sort of dashboard for small businesses in particular towns or regions or even across the country because they vary from someone running an IT business on the internet and selling small goods all the way to a big business on the verge of going multinational. Such businesses cannot be predicted.

HMRC has estimated

“that £6.5 billion in tax goes unpaid every year because of mistakes made when filing tax returns.”

We do not want that to become £12 billion, which may be a stretch of the imagination, but when any new system comes in, there are new challenges. We must make sure we get this right from the start. We do not want the self-employment sector to feel that Big Brother is on to them with a turnover predictor that becomes the new form of VAT. I do not think that will happen, but it must be said. Will the policy eventually lead to quarterly payments? From what I have seen from the Treasury, I do not think it will and I am sure the Minister will reassure us on that.

What must also be taken into account is that cash flow can be very unpredictable and many businesses are paid on a 90-day cycle, which is one quarter. That could skew and distort the figure that comes across a business’s dashboard with HMRC if it goes online.

To sum up, I hope this will not become the new VAT. I was a self-employed businessman for the better part of 30 years and I have seen all sorts of changes over that period from successive Governments of all political parties that had an effect on the way my business and others in my area ran. HMRC should set up special classes. The change should not be something that is just learned online. There should be a dedicated centre where self-employed people can be told what to do, so that they are not pressured into becoming semi-accountants, instead of earning money and being an entrepreneur and creative.

One part of the “Making tax digital” myth-buster that concerns me is where it says that people

“who genuinely can’t use digital tools…will be offered alternatives, like nominating someone else to update their information for them, or giving information by phone.”

In plain English, that reads to me like using an accountant. That should be taken into due consideration with these classes to ensure that people do not spend more and more of their time and money on employing more accountants to deal with quarterly returns.

It must also be asked what the penalties are if a quarterly return is not filed on time. Again, that concerns the self-employed sector. Those people want to know what the new system will look like, what it will involve and how, in reality, it will affect their business. We must get this right. We cannot let the estimated £6.5 billion of losses get any larger. It is good that the Government are grasping this nettle. It is a fact, whether we like it or not—everyone in this Chamber knows—that this kind of taxation filing will be done online eventually, because that is the way things are going. It is inevitable; that is the way of life. We all, from whichever side of the political divide, accept that. However, we must ensure that we do not place extra burdens on businesses and that they remain productive and creative, as we have one of the largest sectors for self-employment not in Europe, but in the world.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I commend all the speeches that we have heard so far, from across the party political divide, but particularly that from my hon. Friend the Member for Hove (Peter Kyle), who touched on the spirit of entrepreneurialism that many hon. Members speaking in the debate care about and has motivated them to take part. I think that it was the hon. Member for East Lothian (George Kerevan) who correctly said or implied that no one should turn their face against employing new technology to simplify or streamline what might otherwise be bureaucratic, wasteful paper-based systems. I do not think that that is really at the heart of the debate. I am less concerned about the shift from paper to digital than I am about the potentially even more seismic change from annual to quarterly reporting, updates, summaries, returns—call them what you will, there is definitely something that a small business will have to produce. In fact, I was wondering what the difference is between a return, a summary and an update. Perhaps the Minister was updated at the last general election rather than returned. I do not know, but it is on that specific point that we will want some answers.

My apologies, by the way, Mr Davies, if I am not able to remain in the Chamber until the end of the debate. I should also say that possibly we should all declare an interest—I point to my entry in the Register of Members’ Financial Interests—as individuals, because this proposal will not just affect businesses. In the Treasury’s update in the autumn statement and spending review, it was clear that the proposal will take in very many businesses and self-employed people, down to levels well below the VAT thresholds and others. I do not think, even though there are 110,000 signatures on this e-petition, that most people have quite realised the ramifications that the proposal could have for them as individuals submitting an individual tax return, as well as for those businesses that are affected.

This is not just about the move to doing things online; it is very much about the process of lodging the tax return or even update, because that is the thing that many people find particularly laborious. This is not about how things are written down; the issue is the process that takes up so much time and soaks up so much effort when a company is taking stock of the income that has been generated gross, of the expenditure that has gone out and of any gains or losses that have been incurred. When the Government say that in four years’ time there will be “at least quarterly” requirements to file “summaries” with HMRC, the Minister should not be too surprised if people hear that and feel that there will be at least a quadrupling of the administrative effort and exertions and the sweat and tears that sometimes go into that process.

My hon. Friend the Member for Hove has articulated sufficiently the broad points about why we should support SMEs; I have just a few specific questions about the Government’s proposals so far. Will the option of an annual tax return be abolished? Will companies still be able to make the return annually? Will this quarterly—or perhaps more frequently—arrangement be supplementing that? What exactly is proposed? The Minister says “at least quarterly”. Will he elaborate on how often he means by that?

Many small businesses and individuals will liaise with their accountants annually. They will collect together all the receipts or invoices and hand them over en bloc to their accountant, who will of course help with the recording of income, business expenses and so on. The accountant will examine those, perhaps audit them and agree a verified and checked final figure; and that is the point at which information is dispatched to HMRC. I want to drill down into whether the Minister is now saying that businesses and individuals will in effect be asked to submit raw, unaudited, almost “real-time” income and expenditure data directly to HMRC—disintermediated, if I can use that term, by taking the accountant out of the picture?

Will the Minister say a little more about where the accountancy and audit stage will fit into this process? That is a crucial thing for many businesses. They want to ensure that they are submitting information about their business activities in full, so that it is accurate. They will be anxious about what will happen if they make mistakes in those data, because they are going in on a real-time or near-real-time basis. They will be anxious about how that could ever be disentangled should administrative mistakes be made. Will not businesses now feel that they ought to incur even more accountancy costs, perhaps four times a year instead of annually, just to be on the safe side? The Minister can say, “There’s no need to do this. Just let us have access to your books and we’ll press send on Sage,” or whatever software the Minister envisages. However, I think that many businesses will want to take a precautionary approach. I can understand why they would do that, so will the Minister elaborate on that point?

What happens to the actual payment of tax owed? When will that be forthcoming? I think that the hon. Member for South Ribble (Seema Kennedy) touched on this point. Will an annual sum still be required, or are we in effect moving to some sort of pay-as-you-earn for small businesses? I have often found it a bit of an anomaly that many people who are employed have the tax deducted—dripping out as monthly payments—at source, but others have the option of making their tax payment sometimes 18 months further down the line. There is no particular incentive in that respect. There was, when interest rates were higher, the opportunity for people to forestall the payment of their tax and perhaps gain the benefit of holding on to that cash before parting with it and giving it to the Treasury. In this case, if we are moving to a sort of PAYE for small firms, it would be better if the Minister was honest and straightforward about it, because that would be a big change in the way business accounting works.

The hon. Member for Morecambe and Lunesdale (David Morris) made the point about seasonal businesses. He mentioned Christmas tree growers. There are many seasonal companies, which will do well in the summer months and perhaps less well in the winter or vice versa. Examples include window cleaners, sports coaches and people involved in holiday lettings. Of course, quarterly reporting arrangements will therefore be quite volatile over an annual period. Taking snapshots at a particular point in time will not necessarily give the final, smoothed, annual, true report of what the business may or may not owe in tax terms. There is a real question about peaks and troughs across the year and how that can be taken into account in a quarterly reporting arrangement.

[David Morris]

One thing that concerns me from what the hon. Gentleman is saying is that, if quarters are compared to relative years and HMRC thinks that something is amiss, it could enforce an investigation. Would the powers of investigation for HMRC be doubled overnight because it would have more of a dashboard—for want of a better word—on the computer to look between years and sectors and also types of businesses?

[Chris Leslie]

Many hon. Members will have filled in all sorts of electronic forms when purchasing goods and services. I can envisage an HMRC drop-down menu saying, “Pick the type of business that you are.” My concern is that not all businesses fit neatly into the categorisations provided by the computer. Whether the computer says yes or the computer says no, that does not always tally with the realities of those businesses’ needs. There is some virtue in the annual tax return arrangement, because it provides a smoother, more strategic overview of the tax liabilities of a business that is complex, even if it is small or micro.

There are bigger concerns about the design of the Minister’s proposal. For me, it is a bit of a distraction to get bogged down in the question of online versus paper. The core question is what is involved in moving to the quarterly summary and update arrangement. There are administrative issues, too, which people will worry about. HMRC has not exactly covered itself in glory in recent years in terms of customer responsiveness. I think 18 million phone calls went unanswered last year, and only 50% were picked up in the first half of 2015. Given that track record, I do not think the Minister should be surprised if people are a little bit wary about another big transformation coming, when they may want some help and support.

The Public Accounts Committee looked into HMRC customer responsiveness, and it was not exactly satisfied with some of the answers that it got. We need full assurance about HMRC’s competence on that matter. Principally, we need assurance about whether the Government are carefully thinking through this significant change, which could affect not only businesses and the self-employed, but many other individuals—perhaps tens of millions. The debate has been a worthwhile opportunity to pause and urge the Minister to think more carefully about the proposal.

--- Later in debate ---

[Sammy Wilson]

That is exactly the kind of question that any reasonable business would want answered when deciding whether the change is good or bad. It is easy to hide everything behind a term such as “quarterly, digitally-gathered business records” but the detail, as the hon. Lady says, is significant for businesses.

If the information is to be looked at in detail, that will affect how businesses go about collecting and verifying it. Most businesses do not want to make mistakes. They are not all treated—unfortunately, Minister—like the Googles of this world. Many businesses fear HMRC—they fear the taxman. They are afraid of making a mistake and of that being interpreted as them somehow trying to pull the wool over people’s eyes. Inevitably, instead of one visit to the accountant or auditor, there will be three or four visits. I do not think that this is just speculation, because one only has to look at what happened when VAT filing started. That was sold on the same kind of basis, because we were told, “You just fill in all the stuff,” but that was not what happened. People started going to accountants to get them to verify that they were sending in the proper information.

Will more queries be raised with businesses and will more time be tied up dealing with those queries? As businesses see the quarterly returns as something of great significance that have an impact on the tax they pay and how that might be scrutinised, will they face more compliance costs due to their asking professionals to do their returns? Alternatively, as some Members have described it, is it simply that they will have all the information on one spreadsheet, and that they can click a button to send it to HMRC, with that being the end of it? I doubt very much that that is how businesses will regard this, and HMRC has already accepted that there will be set-up and hardware costs.

[David Morris]

Does the hon. Gentleman agree that the best way to sort out such hardware and software costs will probably be to look at examples elsewhere? The Estonian Government, for instance, do not use paper at all; everything is done online. We have imported the car tax system from Estonia, and perhaps it would be good to look at how other countries manage similar taxation programmes.

[Mr David Hanson in the Chair]

[Sammy Wilson]

If we have long enough consultation and lead-in periods, there will be opportunities to find out where similar changes have been made and what lessons can be learned from them. I hope that that elementary step is taken so that we iron out some of those things. If the software is free, it does not mean that there will be no disruption to businesses because they will have to adapt to a universal form of data collection, which might be different from what they use at present. Of course, that requires training and changes to how things are done.

Many people in my constituency who have set up small businesses or become self-employed did so because they are good plumbers, carpenters, builders, mechanics or whatever, but they are not into the administrative stuff. Even if there is help and this standard software is provided free of charge, they will pay somebody to carry out the process, and if they have to pay that person four times a year, it will add to their costs.

As several hon. Members have said, while we talk about all this information being supplied online, that is not an option for many businesses throughout the United Kingdom. A report that was published on Friday by a group of hon. Members stated that it was accepted that the internet programme has not been rolled out as well as the Government had hoped. The report made substantial recommendations and asked whether we could implement them without breaking up BT’s monopoly.

One thing we know is that HMRC has accepted that 19% of businesses have no digital contact, and that 42% need assistance, so a substantial number of businesses will not find the transition easy. Connections in this part of the United Kingdom are much better than those in Scotland, Northern Ireland or other areas of England and Wales where the population is perhaps more dispersed, so the burden of not being able to comply with digital returns will be felt much more heavily in some constituencies than others, and that needs to be taken into consideration. I do not want to make a point that others have made, but if the system needs to involve other ways for people to contact HMRC, we already know that there will be difficulties. I do not want to go through all the statistics about phone calls not being answered—

--- Later in debate ---

[Sammy Wilson]

I have three points to make in conclusion. First, although more than 100,000 people have signed the petition, I believe, despite what the Government have said, that that is probably an indication that many businesses are not even aware of the changes. If the policy announcement has not percolated down to those who will be affected, how can we be sure that they will be fully aware of the substantive changes to come until they are hit by them? There is a lesson to be learned about just how effective the announcement and the consultation have been. Secondly, although the Government argue that they want to reduce the regulatory burden on businesses, I cannot for the life of me, for the reasons I have given, understand how the approach will reduce that regulatory burden.

My third point is about political perception, but it is important, and I would have thought that the Minister’s party would have been particularly concerned about this. There is increasing cynicism that somehow big business gets away with things that small business does not. The measure will apply to small businesses but not to large ones, yet all the time the headline news is about how the latter—whether it is the Googles or the Starbucks —seem to walk away from their tax responsibilities. People will find it difficult to understand why there should be a greater onus on small businesses to declare their earnings and business details when some of the larger ones can get away without paying tax for 10 years and then get a slap on the wrist. As we discussed earlier in the main Chamber, they seem to get away with paying very little.

[David Morris]

I would like the hon. Gentleman to try to look at the matter this way: self-employment is the largest growing sector in the country, and that has to be taken into account when considering how taxation should be simplified. As my hon. Friend the Member for High Peak (Andrew Bingham) said, the sector is the powerhouse—the engine room—of our economy. I hope that the hon. Gentleman agrees that two different styles and sorts of businesses are being discussed in parallel. Our earlier proceedings in the Chamber were about the Googles of this world, and this debate is about the self-employed and small and up-to-medium-sized enterprises.