Oral Answers to Questions

Geoffrey Clifton-Brown Excerpts

Tuesday 28th February 2017 Commons Chamber

[Mr Hammond]

I think the last thing small businesses need is any help from the Labour party. From what I have seen of Labour’s plans, that would be the final straw for most of them.

As we have said, we recognise that some small businesses are facing very substantial percentage increases, even where the actual amounts might not be very large, and that that can be difficult for businesses to absorb. We have committed to coming forward with a proposal that will address those who are hardest hit by that phenomenon.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In Stow-on-the-Wold in my constituency, the actual business rates payable by Tesco, which is five minutes’ walk from the centre, is £220 per square metre, whereas a delicatessen in the centre of the town will pay £500 per square metre. Does not my right hon. Friend think that the system of rating valuation needs to be re-examined?

[Mr Hammond]

The rating system is what it is; it reflects the rental value of properties. I readily acknowledge that in an economy that is changing shape rapidly, where the digital economy plays a much larger role and where some of the biggest businesses are not based on bricks and mortar, there are some very significant challenges for us, which we need to look at. In the short and medium term, business rates play a vital role in providing revenue to the Exchequer—and from 2020, of course, they will be used wholly to support local authorities.

Palace of Westminster: Restoration and Renewal

Geoffrey Clifton-Brown Excerpts

Wednesday 25th January 2017 Westminster Hall

[Chris Bryant]

The hon. Member who represents North West Cambridgeshire—I am very grateful to him for helping me.

The truth, however, is that we did look at the option of our staying in, and so did the original report. The IOA, or independent options appraisal, costed and evaluated both a rolling programme and two different versions of staying in the building. That is all part of the original report provided, so it is simply wrong to say that we did not look at the idea of staying in. We looked at it very seriously, but we came to the conclusion— all of us, from different political parties of different persuasions—that it was simply unfeasible, unworkable and impracticable for us to stay in.

Some people have also asked me, “If the work is so urgent, why don’t we get on with it now?” The truth is that we are getting on with work now: the cast-iron roofs are being restored; three years of work is about to start on the Elizabeth Tower, or Big Ben, which will cost £29 million; and last year we spent £49 million on repairs alone. The point is, however, that the mechanical and electrical elements constitute one very large, single project that needs to be well prepared for—we cannot just start tomorrow.

Furthermore, the Palace authorities do not have the requisite capacity or skills. I am not doing them down; they themselves would argue that they do not have the capacity or the skills in-house to manage such an enormous infrastructure project. We need to put a sponsor body in place, with Members of both Houses sitting on it, and some others, to commission a delivery authority with the expertise and technical know-how to do things properly, much as with the Olympics.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I congratulate the hon. Gentleman on securing the debate. Timing is important in this whole thing. If we are to meet the 2023 target start date, we need to set up the delivery authority pretty soon. It will require a statute of this House to do it, so the authorities need to get on with the matter.

[Chris Bryant]

The hon. Gentleman is absolutely right: we should have started some considerable time ago.

About 10 years ago, when I was Deputy Leader of the House for five minutes, we were already arguing that we needed to get this work on the road. The Committee was asked to delay publishing its report until the local government elections were done, until the referendum was done, until we had a new Prime Minister, and so on, and still there has been no debate. We have to get a move on.

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[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am grateful to have caught your eye, Mr Flello. As one of the few chartered surveyors in the House and as a member of the Finance Committee for more than 10 years, I have been heavily involved with this matter from well before the inception of the Joint Committee on the Palace of Westminster, and all the way through to date. The Palace of Westminster is an iconic symbol of this nation. It is absolutely symbolic of everything the UK stands for. In many ways, the strength of our democracy is upheld by the strength of our Parliament encased in these buildings. As politicians, we have an absolute duty to the people of this country and to future parliamentarians to maintain it properly and get this whole thing right.

Much has been said in the debate, so I will be brief. Over the course of our history, including following the damage caused by the burning of Parliament in 1834 and 14 separate bombings during the blitz in 1940, only piecemeal repairs have been carried out. It is surprising to say the least, considering Great Britain’s prowess for engineering thoroughness, maintenance and ability, that no comprehensive record has been kept of what work has or has not been done on the building.

I will briefly outline what is wrong in layman’s terms. When any system or service has failed in the past, there has been simply a “make do and mend” response—a pipe added here or a wire added there. The high pressure steam heating system is encased in asbestos insulation, which has remained well beyond its designed lifespan and original capacity. It could burst and produce asbestos fibre at any minute. The main sewage pump needs replacing, as does the electricity supply, which is liable to major failure. It is unacceptable that Parliament could be plunged into darkness at any minute during great occasions, such as the Queen’s Speech during the state opening of Parliament. There is no doubt in anybody’s mind that this work needs to be done.

The timing of the restoration and renewal works is crucial. As a chartered surveyor, my view is that the entire building must be cleared so that all of the asbestos can be removed in one go, and as the hon. Member for Rhondda (Chris Bryant) said, so that all of the services—water, electricity, sewage, internet and so on—can be renewed and separated in one concerted action. Doing that piecemeal or by partial decant is completely impractical.

Other concerns have been raised, first that Parliament will never return. Frankly, after an expenditure of £3.5 billion, that would be a national scandal. The second concern is what will happen to MPs who are here for only one term. The delivery authority will have to ensure that the Chamber is open for at least part of any Parliament. The third concern is the legislative status of the temporary Chamber in Richmond House. For goodness’ sake, surely we can design something that is worthy of this Parliament? If that cannot be done in Richmond House, let us put it in the Foreign Office or the Treasury. That problem can surely be overcome.

I will address the fourth concern for a minute or two. A lot of concerns have been raised, including by me, about the cost and delivery of this enormous project. I have done a little bit of research, and the nearest comparable project I could find was the demolition of Chelsea barracks, which cost £3 billion. That was a third smaller than this place, which covers 73,000 square metres. It is therefore likely that the cost of this project will be well in excess of £3 billion. That cost is well substantiated by Deloitte in its report.

The report is excellent on financial grounds, but the problem is that the report has not scoped the work properly, so I do not know how it can be completely costed. That is why a shadow delivery authority needs to properly scope the work, consult parliamentarians on what is needed in this place and come up with realistic costings. However, Deloitte makes the important point that, for every year of delay, we add £60 million to £85 million to the cost of the project.

The only option is a full decant and a continuous, unbroken period of restoration and renewal. It is our responsibility to get on with this work, so that future generations and parliamentarians do not make the same mistakes as previous generations. Indeed, we are in grave danger of making the same mistakes ourselves if we go for a partial or continuous repair option—options 1 and 2 in the report.

The public support the project. We need to appoint a shadow delivery authority as soon as possible to scope the work, consult parliamentarians on what facilities they want in place—as the hon. Member for Rhondda said, the disabled access is appalling and it is a scandal that we have such poor facilities for our guests—produce proper costings and report back to Parliament. The work must then be enshrined in statute, so that a statutory delivery authority can begin to get on with the work as early as possible in the next Parliament.

--- Later in debate ---

[Michael Ellis]

It is available, but other tours can be organised.

[Geoffrey Clifton-Brown]

I have listened carefully to the Minister’s speech. With great candour and great respect, I say to him that I think he is making excuses on the Government’s behalf. We need to have this debate and to establish a shadow authority as soon as possible, so that the work can be scoped and costed accurately, and we know how to move forward.

[Michael Ellis]

My hon. Friend knows that time is always a precious commodity in this House. Business managers are always under time pressure, now more than ever, but the matter is being given very careful consideration.

Budget Resolutions and Economic Situation

Geoffrey Clifton-Brown Excerpts

Wednesday 16th March 2016 Commons Chamber

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am delighted to have caught your eye, Madam Deputy Speaker, and to welcome my right hon. Friend the Chancellor’s Budget and some of the excellent things it contains. I want to pick out important two statistics. First, as of today, we have a record number of people in employment. Contrary to what is often said, 62.66% of that has come from the high-skilled sector, so we are creating high-skilled jobs in this country. Secondly, I welcome the fact that in this tax year we will again become the highest-growth country of all the world’s major economies. That is a significant achievement by my right hon. Friend.

Having spent many hours on the Select Committee on the High Speed Rail (London – West Midlands) Bill over the past year, I have become something of a convert to the Chancellor’s way of thinking about the merit of transport infrastructure projects that are good value for money. I welcome to the Front Bench the Minister of State, Department for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), who is in charge of the HS2 project and who will no doubt pilot the Bill through the House in an excellent manner next week.

If this country is to compete in the 21st century, it needs a 21st-century system of transport. Through HS2 and other transport infrastructure projects, such as Crossrail 2, which the hon. Member for Hackney South and Shoreditch (Meg Hillier) mentioned, and the trans-Pennine rail tunnel, we are easing the burden on our congested roads and building some serious national expertise in areas such as tunnelling. That has enabled us to undertake some projects that we would not have been able to do just a year or two ago. As we have seen with the Thames tideway project in London, we have been able to bring the cost of such major projects down considerably. Competitiveness is the key to a successful economy. We are constantly competing in the global marketplace, whether we like it or not, and the economic decisions that the Chancellor has taken today reflect that reality.

I welcome some of the announcements to simplify our tax system, although we could go further. I particular welcome the measures to abolish class 2 national insurance contributions. However, as income tax and national insurance revenues are slightly larger than the sum required to pay the entire benefits bill, national insurance is still a big burden, particularly for the low-paid. I welcome my right hon. Friend’s measures today to accelerate taking the low-paid out of the tax system, moving the threshold from £11,000 to £11,500 and then to our goal of £12,000.

I come to a slightly discordant note, so I hope my colleagues on the Front Bench will bear with me on it. The VAT system that the Government have inherited is overly complicated. We zero-rate flapjacks but not cereal bars. We zero-rate paper books but not e-books. It was considered a productive use of somebody’s energy to write into the Government’s VAT guidelines—this is true, as hon. Members will see if they go online—that VAT must be applied to gingerbread men covered in chocolate at the standard rate unless

“this amounts to no more than a couple of dots for eyes”.

As some Members in the Chamber will be old enough to recall, the standard rate when VAT was introduced, following the old purchase tax rules, was 8%. It was then increased to 25% for certain items under Denis Healey, and today we find it at 20%. I say to my Front-Bench colleagues that the whole VAT situation needs a thorough review. The problem is that we are governed by the rules of the EU, believe it or not, and the VAT sixth directive, which makes this very difficult. We need to have a conversation with those in Europe if the British people vote to remain in the EU, which I hope they will not.

I sincerely welcome measures in the Budget to make us more competitive, particularly the fact that the Chancellor is going to accelerate the reduction of corporation tax so that it will be reduced to 17% by 2020. That is a really useful measure. Interestingly, chart 1.11 in the Red Book shows that America’s corporation tax is 40%, so it is amazing that its businesses are as competitive as they are. However, it is clear that our corporation tax is not moving quickly enough to keep up with the rapidly changing global nature of modern corporations, and that is leading to perverse outcomes that generate public concern, such as Google’s recent announcement that it was paying only £130 million in back tax. I hope that the newly announced diverted profits tax will improve the situation. As has been said, a number of other measures in the Budget are there to improve the tax generated by some of our big corporations, and I hope that my right hon. Friend the Chancellor is right that those measures will generate £9 billion by the end of this Parliament.

We need to invest more to support small and medium-sized enterprises and encourage them to start exporting. The balance of payments figures in the Red Book are worrying. We could rethink how the Government support companies that want to export for the first time, especially given that we are reducing corporation tax. Bearing in mind that it probably costs a minimum of £50,000 for a company to consider exporting to a new market, we could give companies a complete break on corporation tax for any activity that relates to exporting for the first time. We need to rethink the role of UK Trade & Investment, as our approach is clearly not working. We are not getting enough small and medium-sized companies exporting, so we need to rethink its role under the new chief executive. In some years UKTI’s budget has increased whereas in other years it has reduced, and we need to give it a stable environment in which to operate.

I welcome the Chancellor’s announcement on broadband. The Government plan to invest so that superfast broadband covers 90% of the UK by early 2016 and 95% by December 2017. The trouble is that those are national averages, and rural constituencies such as mine have a disproportionate number of homes and businesses that are not getting a realistic broadband speed to deal with both their business and their leisure in the 21st century.

[Mrs Trevelyan]

We face a challenge on the universal service obligation, which has been committed to but which is currently weakly defined, and those of us who have constituents in very rural parts of England will struggle to see that commitment met. We need to continue to push the Chancellor and the Treasury to understand that a commitment will be required to make sure that every household in the UK has superfast broadband.

[Geoffrey Clifton-Brown]

My hon. Friend has an even more rural constituency than I do, but we both have very rural constituencies, and she is spot on in what she says. We need to make sure that every house and every business gets a reasonable broadband speed as quickly as possible. I was coming on to say that we need to provide support for bespoke solutions, and I am sure that applies in her constituency, as it does in mine, where the Gigaclear contract, which was the first such contract in the country, will enable another 6,495 homes to have a reasonable broadband speed by 2017.

The Chancellor had a free shot about the EU, so I feel that I, as a humble Back Bencher, am entitled to have one, too. While I am talking about competitiveness, I must briefly mention our EU membership, as the issue has been receiving a small amount of attention lately. As a nation, we face a choice between remaining part of an institution that is fundamentally anti-competitive and is collapsing under the weight of its own bureaucracy, and seizing our own destiny and becoming a great trading nation once again, being fleet of foot, free of excessively burdensome regulation and able to make our own deals around the world.

As my right hon. Friend the Member for Wokingham (John Redwood) said, we will have an additional £10 billion net to spend if we leave. We will be part of a free and fair immigration system that allows us—this country, this Parliament—to attract and retain the best and brightest from countries such as India and China, without having to put in place arbitrary caps and restrictions simply to counteract the number of people coming from Europe, over which we currently have no control. Britain should be a place of equal opportunity for anyone who wants to come here with something to contribute, not simply a place for anyone who happens to reside in the EU. The recent EU deal with Turkey threatens to exacerbate the situation.

We live in uncertain times, as the OBR’s growth forecasts clearly show. The Chancellor has said that there are storm clouds gathering, both at home and abroad. The Government are right to push ahead with reducing the deficit. There are naysayers who tell us that a national deficit at 4% of GDP is sustainable, but I say to them that a national debt at 82% of GDP certainly is not. We inherited from the previous Government a rate that was higher than it had been at any time since the 1960s, so I welcome the measures taken in this Budget to reduce it to 74% of GDP by the end of this Parliament. Our debt interest payments alone are equal to the annual budget of the Ministry of Justice and the Home Office combined. Just imagine how much extra we would have to spend, or we could save on taxes, if we did not have to pay that debt. The high level of debt leaves us extremely vulnerable to global shocks that could put up interest rates. Serious efforts to tackle the deficit, so that we can start to bring down our debt, must be accompanied by a sustained effort to continue to reduce regulation, to simplify our outdated tax system, to reduce public expenditure, to get the best possible value for money, and to give us infrastructure fit for the 21st century and for one of the world’s best performing economies, if not the best performing.

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[Pat Glass]

Yes, and I doubt whether he even sees the irony. I watched that session of the Select Committee. What I recall is that he could not even tell us what his salary was—it was so large, and it was made up of so many different kinds of dividends and so on, that he had no idea what his salary was.

There are 62 individuals who now have the same wealth as the poorest 3.5 billion people in the world. Those same 62 people have seen their wealth increase by $542 billion since 2010, while the poorest 3.5 billion people have seen their wealth fall by $l trillion over the same period. Those in the poorest 10% of the world’s population have seen their income rise by just $3 a year over five years, whereas 62 of the world’s richest people have seen their income rise by $500 billion over the same period.

As is always the case when we are talking about who is rich or poor, it is women who are at the bottom. Some 53 of the world’s richest people are men, and the countries with the largest inequalities have seen the gender gap widen in terms of not only income, but health, education, labour market participation and representation.

The current system of tax havens, with what has become an industry of tax avoidance across the globe, damages our economy in this country and economies across the world, and it needs to be addressed and closed down. It is absolutely clear that trickle-down economics does not work, except for the richest 1%, in which case it works beautifully for them and their mega-rich pals.

The Government’s view that low taxes for the richest individuals and for companies are somehow good for the rest of us is just plain wrong. If the Googles of this world, and the Vodafones, Starbucks, Amazons and the rest, paid their taxes properly, like the millions of hard-working people who understand that paying taxes is the cost of living in a civilised society, we could wipe out the deficit in the UK, and the poorest across the world could begin to see improvements in their grindingly poor lives.

Channel 4 revealed this year that Barclays, which had signed up to the banking code on taxation and therefore promised not to engage in tax avoidance, actually employed a range of tax avoidance schemes to dodge an estimated half a billion pounds in tax in the UK alone last year. That is the worst kind of hypocrisy.

When the bank’s tax avoidance practices were reported on by Channel 4, Barclays responded that it had

“voluntarily disclosed to HMRC in a spirit of…transparency that it had repurchased some of its debt in a tax efficient manner.”

Will the Chancellor’s announcements today change that? Without transparency in the system, I doubt it. Presumably, Barclays made that declaration fully understanding that its actions would result in fewer doctors, fewer nurses, fewer teachers and cuts for the poorest and most vulnerable in this country.

Boots the chemist, which earns every penny of its income in the UK, moved its headquarters from Nottingham to Zurich to avoid paying any tax in this country. Quite frankly, that should be illegal. I doubt very much whether, without transparency in the system, anything the Chancellor said today will change that, bring the Boots headquarters back to this country or make Boots pay its tax here.

Companies that are household names in the UK now routinely use a technique called transfer pricing, trading goods and services internally—within a network of the same multinational company’s subsidiaries, each of which is in a different jurisdiction—to avoid paying tax. Without transparency and routine, mandatory reporting, that will not change, even after what we have seen in today’s Budget.

When companies are caught out and their practices are highlighted, as happened recently with Facebook, they simply reach a sweetheart deal with HMRC, paying a tiny, tiny proportion of the tax they owe, while announcing to the world what good citizens they are because they now pay their tax.

Yesterday, Oxfam published a report called “Ending the Era of Tax Havens: Why the UK government must lead the way”, which pointed out that tax havens are at the heart of the inequality crisis, enabling corporations and wealthy individuals to dodge paying their share of tax. Oxfam analysed 200 of the world’s biggest companies and found that nine out of 10 have a presence in at least one tax haven, with corporate investment in those tax havens in 2014 almost four times bigger than it was 10 years ago. Tax avoidance in our largest companies has become routine and obscene, and it is growing.

Tax havens are estimated to cost poor countries at least $170 billion in lost tax revenues every year. They fuel the inequality crisis, leaving poor countries without the funds they need and effectively wiping out the benefits of any international development funding those countries receive. If we are to address that, the Government must require multinational companies to make country-by-country reports publicly available for each country in which they operate. The Government must also support efforts at European and international level to achieve that standard globally. That has not happened in today’s Budget.

[Geoffrey Clifton-Brown]

I have great sympathy, as I mentioned in my speech, with the point about the avoidance of corporation tax by large corporations. Does the hon. Lady not agree that the real damage is in poor countries, where these corporations get away with paying no corporation tax whatever, while we are, at the same time, giving these countries foreign aid? We need to tackle this issue internationally, through the OECD, the G7 and the G20, which is exactly what the Chancellor has been trying to do.

[Pat Glass]

I agreed with everything the hon. Gentleman said until he said that this is “exactly what the Chancellor has been trying to do”, because unless there is mandatory reporting, and it is transparent, it will not make any difference.

The Government need to ensure that the mechanisms for public country-by-country reporting benefit developing countries as well as the UK. We did not see that in today’s Budget. The Government must require the UK Crown dependencies and overseas territories to set clear timetables for public registries of beneficial ownership. After all, the Prime Minister promised this three years ago at the UK’s G7 summit in Lough Erne and has failed to deliver it, and again it is not in today’s Budget.

We cannot call ourselves decent people and cannot claim to be a decent country if we stand by and allow the inequalities that exist between the rich and the poor to grow. The British people understand the unfairness of the current situation, and they want it to change. They understand that despite opportunities such as today’s Budget to address some of this, the Chancellor has chosen not to do so. This country, and this world, is not short of wealth, and it makes no economic, political or moral sense to allow the current obscene situation to continue. It is wrong that 62 people have more wealth than the poorest 3.5 billion people on this planet, wrong that companies operating in the UK routinely avoid paying the tax they owe, and wrong that the Government and the Chancellor seem content to allow this to continue.