Finance (No. 2) Bill

Ian Paisley Excerpts

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

[Dr Johnson]

It is indeed true that slow broadband speeds can be a challenge for people running businesses in rural areas.

The freezing of fuel duty means that the average car driver in the UK is £850 better off since 2010, which is not an insignificant amount, while the average van driver is £2,100 better off. Therefore, through this measure, the Government are supporting hard-working families and small businesses, particularly in rural areas.

[Ian Paisley (North Antrim) (DUP)]

The economy of our kingdom largely turns on the wheels of white van man. The initiative the hon. Lady speaks in support of is critical to ensuring that our economy moves forward. I would welcome further reductions in that tax.

[Dr Johnson]

I thank the hon. Gentleman for his intervention.

Finally, I welcome the £668,000 the Government have given through LIBOR grant to the International Bomber Command Centre in my constituency. Bomber Command No. 166 Squadron suffered the highest losses of any allied forces unit during world war two, with an attrition rate of 44%. The centre will open next year, the year of RAF100, which is a good time for it to open in terms of remembrance. It will serve as a point for the recognition and remembrance of the sacrifice of people from 62 nations around the globe, 57,861 of whom lost their lives saving the future for us and our children and grandchildren.

The International Bomber Command Centre will record for the future the memories of those who served in Bomber Command. They include people such as 92-year-old William Leslie Anderson, my constituent and relative through marriage. He served as a flight engineer in No. 166 Squadron. A flight engineer works not only on the planes on the ground to ensure that they are fit for take-off, but with the pilot throughout the flight and then again preparing the aeroplane once it is back on the ground. People such as Mr Anderson worked hard to secure our future, and it is important that we think about the future of those who will go ahead. That is why I reject completely the Labour party’s plans to spend, spend, spend. It is our children, our children’s children, and our children’s children’s children who would pay the debt interest on such ever-increasing spending plans.

We have asked Labour Members so many times today—perhaps 25 or 26 times—how much their plans would cost, but still we have had no answer—[Interruption.] I appreciate that we have had an answer. We have been told that we can look it up on the internet, but I would like to know which page and document to look at, please, because I have not been able to find it.

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[Robert Courts]

That is a horrifying suggestion. I am not surprised that that is the attitude of the Liberal Democrats in Scotland, because it is one that we see in many parts of this House—from those who do not understand that when we raise taxation on the lowest paid, it means that those people have less money in their pockets, which reduces their ability to make the decisions that they need to make with regard to themselves, their family and their life chances. When we take money away from people, we remove their freedom of action, their freedom of manoeuvre and the investment choices that they may make for their children. It is a totally unprogressive attitude.

[Ian Paisley]

Does the hon. Gentleman agree that the change by this Government in the manner, timing and way in which VAT is paid by small companies up and down the country has been significant and progressive, and has been welcomed by hundreds and thousands of businessmen and women?

[Robert Courts]

The hon. Gentleman makes a very, very good point. As chairman of the all-party group for small and micro business, that is something that is very close to my heart and the hearts of those for whom I endeavour to speak in Parliament. That matter has been a concern. I know that the hon. Gentleman has campaigned on it, as have I and many others. The simplification of the VAT regime and the ability to pay online will streamline the tax process for small businesses. I am grateful to the Government for the action that they have taken in ensuring that that burden is not too onerous.

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[Robert Courts]

My hon. Friend is absolutely right. It is quite important that we have sensible measures in place to ensure that more money is raised for our public services.

[Ian Paisley]

rose—

[Robert Courts]

I will not give way, as I wish to make some progress in the short time that I have available to me.

I have highlighted the positive attributes and achievements of this Government. There is a range of Budget measures that I am particularly pleased to see, including: the establishment of the National Productivity Investment Fund; the increase in the national living wage; and the rise in the personal allowance, all of which are progressive policies designed to help the lowest paid. I am particularly pleased to see the new house building measures. Homes are what we need to ensure that people in this country have somewhere to live, somewhere that is of high quality, and somewhere that they can afford. I am pleased to see the stamp duty measures, and measures in relation to skills and research and development.

Recently, I was lucky enough to visit Johnstone Safety Products in my constituency in Minster Lovell. It is based in an old mill in the heart of the Cotswolds country, a beautiful, bucolic area. When a visitor arrives at this old mill, what they will see is a thriving factory. When they go around, they see robots churning out up to 40% of the safety products for above neck height. When we see how the world’s market depends on that business in my Witney constituency, we realise quite how important it is to rely on research and development and the robots, which are bringing manufacturing jobs back to this country. They are not taking jobs away from this country because those jobs would not exist without that technology. In the heart of rural west Oxfordshire is a thriving economy based on manufacturing. That is just one of the great many things that the Budget has brought to my constituency and, indeed, to the whole country.

I welcome the air quality measures in the Budget. If I may, I will concentrate on Oxfordshire for just one or two moments more. I very much welcome the £150 million of infrastructure money—£30 million of capital funding a year for five years—that has been promised, and the £60 million for affordable homes. We have heard from my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) that LIBOR funding is going to her constituency. West Oxfordshire has also been the beneficiary of LIBOR funding. I am glad, Mr Speaker, that you have resumed the Chair because you will remember me recently mentioning ZANE: Zimbabwe a National Emergency, and Tom Benyon. Well, that charity has received £1.3 million in LIBOR funding, which is going towards 583 Commonwealth servicemen looked after by ZANE. In addition, RAF Brize Norton has been given £250,000 for renovations.

There are so many things in the Budget, and I could go on; I wish I could. [Hon. Members: “Hooray!”] I am delighted that the entire House is so keen to hear me continue to speak, but I will now draw my remarks to a conclusion.

Finance Bill

Ian Paisley Excerpts

Committee: 1st sitting: House of Commons
Wednesday 11th October 2017 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

Does the Minister accept that the introduction of this will allow for the rebalancing of the Northern Ireland economy in a very beneficial way? It will allow us to generate more investment and, potentially, more private sector jobs. Of course, this corporation tax will not apply to the financial service sector, so it will not wrongly attract businesses away to Northern Ireland.

[Mel Stride]

My hon. Friend makes the very powerful point that this is not about brass-plating and shifting profits; it is about generating growth in a very important part of the United Kingdom.

Since we legislated in 2015, we have heard that some small businesses want the option to benefit from the Northern Ireland corporation tax rate on the proportion of their profits generated by trading activity in Northern Ireland. The changes made by clause 25 will give all SMEs trading in Northern Ireland the potential to benefit from the devolved rate, should they choose to do so. That will be done without watering down the rules, and it will ensure that the regime is focused on incentivising genuine economic activity in Northern Ireland. Like large companies, those SMEs that opt to take advantage of this measure will be required to calculate their Northern Ireland profits according to well-established principles. These changes deliver a fair outcome for small companies.

Let me be clear that under these rules a company’s trading profits will be taxed at the Northern Ireland rate only if the company has a substantial physical presence in Northern Ireland and if that is where the economic activity that generates the profit takes place.

New clause 2 would require HMRC to conduct a review of the impact of the changes in schedule 7 on the corporation tax system, the location of companies and the levels of employment across Northern Ireland and Great Britain. A mandated formal review is not an appropriate response to a regime that has been carefully designed to be robust in relation to avoidance and abuse, and one that, as I have said, builds on tried and tested rules when doing so. As with all policies, the Government will monitor the regime closely once it is commenced to ensure that it operates as intended. I urge the Opposition not to press the new clause.

[Ian Paisley]

Does the Minister accept that those who espouse the peace process also want to see an economic dividend post that process? Therefore, why would anyone want to vote against something that allows that economic dividend, building upon the peace in Northern Ireland?

[Mel Stride]

My hon. Friend makes a powerful point. This is about strengthening Northern Ireland’s economy, society and infrastructure, to the end that we all seek, which is a stronger and more united Northern Ireland.

In conclusion, these provisions include changes that will ensure that the regime is robust against abuse, in order to maintain the regime’s focus on encouraging genuine additional economic activity in Northern Ireland.

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[Jonathan Reynolds]

I take the hon. Gentleman’s point, but I would not agree with his characterisation of the situation. We are making the case that our amendment will really benefit Northern Ireland, because if the relationship was abused and firms sought to benefit from the lower rate without investing in Northern Irish jobs or business production, that would surely defeat the purpose of having a lower corporation tax rate—that is the sole point of trying to devolve the rate to Northern Ireland. Our concern is that loosening the rules could lead to brass-plating, where UK businesses are given a loophole that allows them to domicile their businesses in lower-tax jurisdictions while they continue, in reality, to operate in the UK.

[Ian Paisley]

The hon. Gentleman recognises that the one sector in which the proposals might be abused, the financial services sector, is specifically precluded from taking advantage of them. Could he provide the House with an example of a sector that he thinks would abuse the rules?

[Jonathan Reynolds]

I do not agree with the hon. Gentleman’s assertion that only the financial services sector will seek to do that. We are proposing a very reasonable review of the measure after one year, and he has nothing to fear from such an amendment.

Labour, more than any other party in this House, has consistently made the case for a level playing field between larger and smaller businesses, but a level playing field cannot be simply an equal race to the bottom in which smaller businesses are given the same tax avoidance opportunities as larger ones. That is not to say that the rule changes will necessarily lead to a flight of small and medium-sized enterprises rushing to domicile in Northern Ireland. We note that the majority of enterprises operating in the UK are honest and committed to paying their fair share. We should be vocal in praise of that contribution and its role in making the UK economy a success. However, opening what could become a loophole is significant, and it is critical that we protect against unforeseen consequences.

At this stage we have little indication of the potential impact of this measure, because behavioural effects are notoriously unpredictable to model. For that reason, we have tabled an amendment that calls on the Government to review the measure as soon as is practicable after the completion of the first financial year in which it has been fully in force. The report of that review would be presented to the House within one month. That would allow us to understand fully the impact of chargeability, see how companies are responding and react accordingly if the measure is being treated as a loophole. In turn, if evidence shows that the measure is forging stronger business links between Northern Ireland and the rest of the UK, and that the impact to the Exchequer is minimal, at least a proper assessment will have been made.

We are at a critical time when the UK economy simply cannot afford to lose revenue to tax avoidance. We have heard in the Chamber many times the arguments about why it makes little sense to drop corporation tax rates to below European averages. To do so betrays a lack of confidence in the many attractions of the UK as a domicile for ambitious companies that seek to grow their businesses. We should not be compounding revenue loss by opening a back door to even lower corporation tax rates without a framework in place to assess the impact properly.