Oral Answers to Questions

Grahame Morris Excerpts

Tuesday 1st October 2019 Commons Chamber

[Jesse Norman]

I do not know whether my right hon. Friend caught the discussion we had about this matter earlier, but the purpose of the review is to establish whether the Government are pursuing the right policy. It makes no sense at all to change the policy until we have heard from the review. I absolutely sympathise with the concerns that have been felt across the House, and both the Government and HMRC itself have taken steps to try to mitigate them.

[Grahame Morris (Easington) (Lab)]

T2. The former coalfields of England, Scotland and Wales have a combined population of 5.7 million. If they were treated as a single distinct region, that would be the poorest region in the United Kingdom. By any measure or definition, the coalfield communities are left-behind areas, so what fiscal policy steps is the Chancellor taking to address the specific structural and economic weaknesses of former coalfield areas such as mine in going forward with the shared prosperity fund?

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill

Grahame Morris Excerpts

3rd reading: House of Commons & Programme motion: House of Commons & Report stage: House of Commons
Monday 10th June 2019 Commons Chamber

[Peter Dowd]

My hon. Friend makes a valid point. Assessments of the impact of austerity have found that 86% of the burden has fallen on women. The figures indicate that women are the most badly affected by austerity, and all this Bill does is overlay that and up the ante even further. I thank my hon. Friend for making that point, because in effect it is a stealth tax. That is what it amounts to: a stealth tax with no evidence base whatever to support it, other than the Government just wanting somehow to get more and more cash in because of their failed economic policies.

[Grahame Morris (Easington) (Lab)]

I am grateful to my hon. Friend for giving way. The arguments that he is making are sound. There is a concern that this may well open the gates to further measures in the future. I fully understand that this is a charge that is being applied to employers, but it would be instructive if we used plain English and simple terminology. Why do we not use the term “redundancy” instead of “termination awards”, so that people will realise what is happening?

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill (Second sitting)

Grahame Morris Excerpts

Tuesday 14th May 2019 Public Bill Committees

[Peter Dowd]

There we go again. It is the race to the bottom, isn’t it? We are always talking about a statutory minimum. That is what the Tories talk about all the time: the minimum. We do not want people living on the minimum; we want people to have a healthy, full-quality life. This is about the cumulative effect of the Government’s fiscal policies, not one isolated issue; it is about the totality. A person might have a job, but it might be a poor, insecure job. It is not just about having a job; it is about the quality and context of that job.

[Grahame Morris (Easington) (Lab)]

That is a valid point, and the expert witnesses supported that this morning. If an employer is designing and costing a redundancy package—I do not know why we use the term “termination” in the Bill; why not say “redundancy”? —surely the additional tax and national insurance must be a factor, and that may well have an impact on the final sum that the employee receives. Government Members say that we have record levels of employment, but there is a report today that 4 million people in employment are living in poverty. That is a feature that we have not seen before, along with declining and stagnating wage growth levels.

[Peter Dowd]

My hon. Friend makes an important point. The reality is that the only termination under the Tories is termination of the social and economic cohesion of this country. That is the termination that I am deeply worried about.

Another important point was raised. We always get the same old chestnut from the Conservatives. They say that their proposal will raise £200 million or £300 million —though they often do not raise what they say they will, because they are so incompetent at doing it—and that if we do not agree with it, we will have to find the money elsewhere. However, we have set out where we would find that money. It would not be from people getting redundancy payments; it would be people at the other end of the spectrum, who have significant amounts of money, or employers, who would have to cough up. We will get it from the people who are in the best position, psychologically and financially, to pay it.

Finance (No. 2) Bill

Grahame Morris Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Mel Stride]

At the heart of the hon. Gentleman’s point rests the notion, which I agree with, that we expect the banks to pay their fair share and recognise that they received bail-outs some years ago, and tax policy towards the banks has been geared towards making sure that they make a fair and proportionate contribution to our tax take.

The hon. Gentleman mentioned the importance of competition in the banking sector, and I wholeheartedly agree with him on that, which is one reason why we are keen to ensure that as many banks as possible are headquartered in our jurisdiction rather than in others. That goes to the heart of the changes in the Bill to ensure that banks domiciled here are not penalised by being charged on capital assets held overseas—a situation that does not pertain to overseas banks that operate in our jurisdiction.

We have included an 8% surcharge on banks’ profits over £25 million. The package will help to sustain tax revenues from the banking sector in the long term, and it is forecast to raise an additional £4.6 billion over the current scorecard period.

The Bill continues the Government’s already vigorous efforts to crack down on tax avoidance, tax evasion and non-compliance. Since 2010, the Government have introduced over 100 avoidance and evasion measures, securing and protecting over £160 billion of additional tax revenue. This has helped reduce the UK’s tax gap to a record low of 6%, which is one of the lowest in the world.

[Grahame Morris (Easington) (Lab)]

The Financial Secretary says that it is a record low tax gap, but it does not take account of the vast treasure trove unearthed by the Bureau of Investigative Journalism in the Paradise papers or of other vast sums of wealth, on which we have no idea how much tax is actually due. So the figure he gave is not really correct, is it?

[Mel Stride]

I am afraid I have to dissent from that view. The simple fact is that the International Monetary Fund has identified the tax gap measure as one of the most robust measures of its kind in the world. At 6%, our gap is among the lowest in the world, and it is the lowest we have had in our history since we have been measuring the tax gap. If we had the same tax gap today as we had under the previous Labour Government, we would be out of pocket to the tune of £12.5 billion a year—enough to fund every policeman and policewoman in England and Wales.

--- Later in debate ---

[Peter Dowd]

The Chancellor did not know what the unemployment figure was the other day. Let us put it like this: no matter how many people are in work, the bottom line is that it is not right that they should have low and stagnant wages, poor terms and conditions, zero-hours contracts or insecure work. The Government should be dealing not just with the employment rate, but with terms, conditions and wages.

[Grahame Morris]

Does my hon. Friend agree that the WASPI women, who had expected to retire at age 60 and who are being compelled to work for another six years, are also furious and feel terribly let down by the Government?

[Peter Dowd]

My hon. Friend makes an excellent point. The Government have reached the stage where they blame anyone they can. The gaffe-prone Chancellor has blamed disabled people for bringing down the productivity rate. He is so out of touch that such comments are water off a duck’s back to him.

As the Minister said, this is the third Finance Bill of the year. All three of them have failed to address the challenge that our economy faces.

--- Later in debate ---

[Grahame Morris (Easington) (Lab)]

I am pleased to be able to speak in this important debate, and to follow the hon. Member for Faversham and Mid Kent (Helen Whately). I am speaking in support of Labour’s reasoned amendment, setting out our opposition to the Finance Bill. That includes our opposition to the £4.7 billion reduction in the banking levy while children’s services are cut, the lack of adequate equality impact assessments, the lack of provision for lifting the public sector pay cap, and the lack of provision for addressing the funding crisis in social care and our NHS. I also oppose what I see as a lack of concrete action to tackle tax avoidance and evasion properly.

There are a number of areas that I will not be able to cover, but I did not want to make a contribution without mentioning the Women Against State Pension Inequality. We in the Opposition want justice for the WASPI women. I am sorry that the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), is no longer in his place, because there will be an opportunity for the Government to do something about the matter on Thursday, after the Backbench Business Committee debate.

I am concerned that the Budget does not do enough for disabled people. I am concerned about stagnant pay and the failure to provide resources to lift the pay cap. I am concerned about the failure to provide resources for local government and the funding of our police and fire services. On housing, the hon. Member for Faversham and Mid Kent said that Labour were not proposing any concrete, tangible solutions. I have been around for a few years, and I can look back at what works. Legitimate concerns have been expressed about the stamp duty proposals, which are feared to be the wrong solution. My understanding is that 40% of council houses that were sold under the right to buy are now in private ownership and, on average, rents in the private sector are twice those for council houses in the social housing sector. That costs this nation £10 billion—not as a one-off, but each and every year.

Surely a sensible person would say that in those circumstances, we should be building many more social houses. The Government’s target is, I believe, about 200,000 or 250,000 houses a year—[Interruption.] It is 300,000; I am grateful for that sedentary intervention. The last time we got anywhere near that was in 1973. As I am sure Members will recall, that is the year that Sunderland won the FA cup. Ian Porterfield scored the goal, and Jimmy Montgomery made a marvellous double save from Trevor Cherry and Peter Lorimer. In 1973, 100,000 council houses were built. That is the scale and magnitude of the challenge we face, and the Government should take that into account.

Like several of my hon. Friends, I want to concentrate, in the short time I have, on making the case for more investment in integrated transport networks, particularly in the north-east—we have heard about the north-west; I want to put the case for the north-east. The Budget is the time when the Government make political choices, and they should be held to account. I acknowledge that the Government have announced an investment in the Metro on Tyneside, which is certainly important, but the Metro is 40 years old, and the investment is to replace the rolling stock.

I represent the constituency of Easington, and I would love to see the Metro extended to the hinterland of Tyne and Wear, providing opportunities for expansion to towns such as Seaham and Peterlee in my constituency. That would naturally promote economic growth in the north, help to join up communities, and allow access to jobs in places such as Sunderland, Gateshead and Newcastle.

I know that Ministers like to have an evidence base, and I draw their attention to an excellent Library publication, “Transport Spending by Region”, published just last month. It gives transport spending totals overall, with the margin of discrepancy, with population factored in, between investment in the north-east and London. Overall, there is 10 times more investment in London and four times more in the south-east than in the north-east, while for railways there is 20 times more investment in London and five times more in the south-east. They say there is a big investment in the Metro system, but we have to recognise that, in the five years from 2011 to 2016, there has been a massive lack of investment. We have had terrible under-investment during that period.

[Kevin Hollinrake]

The hon. Gentleman makes a very good point about the disparity in investment, but he might be interested to know that the moneys from central Government are very similar across the country. What lies behind those figures is the ability of London to leverage in private sector and local authority investment, because those local authorities also get a much better deal.

[Grahame Morris]

I thank the hon. Gentleman for his intervention; I am sure that what he says is true. I have had conversations about the nature of the very large-scale transport infrastructure investments that are, in effect, self-funding, and I think we should apply those principles. I was a great fan of the documentaries about opening up the west with the railways, in which Michael Portillo argued that investment was not put into the existing cities on the east coast, but into the west, to open it up and bring in jobs and investment. There is an enormous case for doing that.

I want to speak briefly about the A19, which is vital to the economic health and wellbeing of my constituency. However, it is a dangerous road, and at this time of year it is a nightmare for people travelling on it. I want the Government to future-proof our regional transport infrastructure. There are multiple housing developments in my constituency, which will create tens of thousands of more vehicles and journeys in my area. We want to encourage new businesses to locate on the A19 corridor, but the road is already too dangerous and not fit for purpose.

If Ministers do not believe me—I do not have a Library paper to support this—I urge them to google the A19, and they will find a whole list of terrible headlines. One, about an “11-CAR pileup on the A19”, is from the Daily Mail. They may be more inclined to believe that newspaper than the Sunderland Echo, which has reported this afternoon that the A19 has reopened after a six-vehicle crash near Seaham in my constituency brought traffic to a standstill. They will find a whole list of accidents and crashes.

The Government need to future-proof our transport infrastructure, and the Budget is an opportunity to do that. There is the possibility of investment north of Nissan, linked to the automotive hub, and in my constituency, preparatory work has begun on a 55-acre industrial park, the Jade Park development, adjacent to the A19. I welcome the fact that that will bring new, bespoke manufacturing jobs and a variety of others, but the failure of the A19 will make it more difficult to attract future businesses. If we are to accommodate new developments, I urge the Government to use the Budget to take action.

The A19 is one of the principal economic drivers in my constituency. It is vital for manufacturing, export-focused businesses such as Caterpillar, NSK and, until it closes the week before Christmas, Walkers crisps. The lack of investment, maintenance and upgrading of that vital economic highway is holding back business in my constituency. I have raised the issue several times: I have tabled questions and even an early-day motion, but we need the Government to recognise the problem. They need foresight; they need to realise the value of investment, try to future-proof our economy, and support our regional development.

Tax Avoidance and Evasion

Grahame Morris Excerpts

Tuesday 14th November 2017 Commons Chamber

[Mel Stride]

I am pleased that the hon. Gentleman has raised the issue of investment in HMRC, because we have a very good record in that respect. Some £1.8 billion of additional money has been invested in HMRC since 2010, of which £800 million will relate to the period after 2015, bringing in £7.2 billion by 2020-21. We will also be trebling the number of investigations of the wealthy to ensure they are paying their appropriate level of tax, as a direct consequence of all that additional investment.

[Grahame Morris (Easington) (Lab)]

Will the Minister please explain to the House why only 420 HMRC staff are engaged in chasing tax avoiders and evaders, yet 10 times that number of civil servants are engaged in addressing benefit fraud in the Department for Work and Pensions?

[Mel Stride]

I challenge those figures: a far larger number than the hon. Gentleman suggests are engaged in clamping down on tax evasion and avoidance. About 50% of the 2,100 largest corporations in this country are under investigation at any one time—not necessarily because they have done anything wrong, but because they have complex tax affairs. So we are investing in that.

--- Later in debate ---

[Nigel Mills]

I agree with the hon. Lady exactly, but the point I was trying to make was that I do not think that the size of the tax gap is down to a lack of effort or attempts to introduce new rules or measures. The problem is that the avoiders and evaders are perhaps one step ahead and move on to different things. That is why the Panama papers and the Paradise papers show that people are now just going offshore, or finding artificial ways to go offshore, rather than trying to do artificial domestic planning to get around the rules.

[Grahame Morris]

Is it not the case that the problem lies in our tactics of applying these complicated rules and regulations and in the fact that expensive minds—the accountants—can devise a way around them? Should we not be looking at a general principle, because people cannot get around a principle?

[Nigel Mills]

I agree with that view. The Government did introduce the general anti-abuse rule. It was quite a large step for them to take, as it said that HMRC can effectively ignore what is written in the law and apply what should have been written in the law. There is scope to extend that and to improve behaviour. It is right that we now expect large businesses to publish their tax strategy. It means that we can get the board to say that it does not condone such behaviour, it does not engage with it and it does not want its tax advisers to do such a thing. That is the way that we change the behaviour and the culture. We have seen advisers changing their codes of conduct, which is welcome. Some now say that artificial and aggressive abuse will not be committed under their management, but, clearly, there is still a long way to go.

Before I talk about the various measures that we could take, I should be clear that we will not be able to close the whole of the tax gap by tackling aggressive avoidance by the rich and the large multinationals. Obviously, we should narrow the gap by as much as we can, but the fact is that it is the small and medium-sized enterprises that form the largest group of companies not paying tax. Of a tax gap of £38 billion, £15.5 billion can be attributed to SMEs. The single biggest reason for the tax gap is not aggressive avoidance, which accounts for only £3 billion, but failure to take reasonable care. Therefore we cannot look at the whole tax gap of £38 billion and say that that is all being lost to us because of the awful behaviour of large corporates. Sadly, it is much more to do with individuals in the UK who are working and not declaring VAT, or who are working in the hidden economy. It is not quite fair to say that this is not about ordinary people, because, sadly, quite a lot of it is. We need to find ways of tackling that issue as well.

What has been exposed by these papers is a crisis of confidence. We need our tax system to be fair and our financial system to be legally compliant and as clean as we can make it. There are some further measures that the Government can take to improve the reputation of our financial system and to increase the confidence of our constituents in the tax regime. The good news is that most of these issues are Government policy already. It is just a matter of bringing them forward and perhaps finding some implementation dates. Let us get country-by-country reporting by multinationals in the public domain so that we can all see how much profit they are making and in which territory and compare that information with their turnover there, how many employees they have and what assets they have. That is perfectly fair information. It is not greatly enhanced disclosure.

If we look at the accounts of large plcs, we will see that they are required to disclose segmental information and tax reconciliation from their profits down to what tax they are paying. We want that information made available in a meaningful and useful way, so that we can work out how they are not paying the right amount of tax. That measure is on the statute book. Let us have a date when we require that information to be put in the public domain. It does not have to be tomorrow, or even next year. Let us have a date in 2019 so that we can see that information.

The other issue of transparency is related to who is buying the very expensive properties in the UK. We need to know who they are and how they have raised the money to buy those properties. It cannot be right that someone can buy a property here for £15 million or £50 million and not live in it and we have no idea where they got the money from to do that. Let us go ahead with the promise we made to have a transparent register of overseas owners of very expensive property in the UK. That will help to show that we are not encouraging kleptocrats or Russian oligarchs or people who have stolen from developing countries to put their money here in a safe UK asset.

Let me turn now to the overseas territories. The papers revealed some really shocking behaviour. For example, when Apple, one of the world’s largest and most reputable companies, was being chased by the EU through Ireland, it chose to try to move its affairs to Jersey to avoid the tax we all think it owes. Again, that shows why we need to get transparency into those territories of ours so that we know who is operating there and where their money has actually come from. Those territories have a right to exist, a right to choose their own tax rates and a right to be competitive, but they do not have a right to hide money that has been stolen from elsewhere in the world or to move profits that are not being earned there and try to give them a beneficial rate.

If we get transparency in the territories and we show who is operating there and where the money is coming from, those territories can show how clean they are and whether their claims are true. They can then compete on their reputation. They do not need to compete on being closed and dirty. They all assure us that they are not after dirty, corrupt, illegal and laundered money but are after real business. If they go ahead with that transparency, they will get a competitive advantage. As a country with so many territories, we cannot say that we will follow the herd; we are the herd, so let us set an example.

Paradise Papers

Grahame Morris Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

The most important message for the hon. Lady’s constituents is the merits of getting on top of tax avoidance, evasion and non-compliance, which is exactly what this Government have done, and which is in turn raising the vital taxes for our public services so we can have the kind of public services that are a hallmark of a civilised society.

[Grahame Morris (Easington) (Lab)]

We probably need a time-out for a fact check on the £6 billion tax gap figure that the Minister is consistently quoting. May I refer him to the private Member’s Bill promoted by the former right hon. Member Michael Meacher, which set out detailed plans for a general principle on tax avoidance? We can get around a rule, but we cannot get around a principle; that seems to me to be a solid and sensible way forward.

[Mel Stride]

The hon. Gentleman referred to a £6 billion tax gap, but the figure is not £6 billion; it is 6% of all tax that should be collected. On his suggestion that there should be a general principle or general rule, there is already a general anti-avoidance rule for exactly the purpose to which the hon. Gentleman has alluded.

HMRC Closures

Grahame Morris Excerpts

Thursday 2nd November 2017 Westminster Hall

[Mel Stride]

A number of Members in the debate raised the costs mentioned in the National Audit Office report, the Public Accounts Committee report and so on. Certainly, the business plan has gone through various iterations, but where we are is quite clear: the total investment over the next 10 years will be £552 million. The NAO has disputed some of our figures, and the Government’s view is that the NAO has looked at those figures on a different basis—for example, over a 10-year period, whereas we were initially looking at figures over five years.

We have some cost avoidance of £75 million per annum from 2021 through getting out of the private finance initiative arrangement—which, incidentally, we entered into in 2001, which was of course under a Labour Government. On top of that, we will have £300 million-worth of savings over the next 10 years, and we will have annual cost savings of £74 million in 2025-26 compared with 2015-16, rising to around £90 million from 2026-27. The savings are ongoing and will be long standing.[Official Report, 27 November 2017, Vol. 632, c. 2MC.]

[Grahame Morris (Easington) (Lab)]

On value for money, I happen to agree with a number of points made about the opportunity here to rebalance the economy, but I do not understand how it can be any more cost-effective to relocate these major tax offices to very expensive city centre locations. The issue of future-proofing was raised by the hon. Member for Glasgow South West (Chris Stephens). The Government have signed, through HMRC, a number of long-term leases on large offices in Croydon and Bristol without break clauses. Clearly it is essential that the capacity of HMRC to collect taxes is not impeded, but is it in our long-term interest to sign such long contracts for very expensive city offices?

[Mel Stride]

The hon. Gentleman makes two points. One is a general point about the economic sense, or otherwise, of locating the services in larger hubs. The arguments on that are, broadly, extremely strong. They are that we can have larger groups of people and more collaborative working and can ensure that the infrastructure and technology are there. HRMC operates very differently today from how it operated some decades ago. We take a risk-based approach to chasing down tax that should be paid and is not being paid. That involves a lot of data and analysis. Frankly, the idea—if anyone here is entertaining it—that for the last few years people have been able to walk into their local tax office or have appointments there is just not correct. We need centres of excellence that can work in the manner that I have described.

The hon. Member for Easington (Grahame Morris) raises the issue of long-term leases, and he is right to say that in some cases there are no break clauses. I make three points on that. First, we get a much more competitive rate if that is the basis on which we enter into a lease. Secondly, that of course does not mean that leases cannot be broken at some future point by way of negotiation. That is quite typical in the commercial property market. Thirdly, we have flexibility within those leases, such that other Government Departments and employees would be able to use the buildings as well. There are therefore at least three very good reasons why that approach has been taken.

Let me now make some progress. We need a tax system that offers digital services in an age in which people increasingly expect and rely on them, that makes use of technological developments to deliver as efficient a service as possible, and that is suited to the dynamic and fast economy of today.

[Graham Stringer in the Chair]

I hope that the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East would agree that just dispersing employees across a wide area is not an efficient way to run any organisation, let alone one with responsibility to the taxpayer.