Tax Avoidance and Evasion

John Glen Excerpts

Wednesday 13th April 2016 Commons Chamber

[Mr Gauke]

It is unfortunate that the hon. Gentleman seeks to smear a public servant who has served Governments of—[Interruption.] Let me make this point. This is someone who has served Governments of both colours and with whom I have worked extensively over six years. He has been and is determined to do everything he can to ensure that our tax laws are properly enforced and deal with avoidance and evasion. I suggest to anyone who throws around one line from an article written in 1999 that they look at the entire thing, because his argument is about properly addressing tax avoidance by ensuring that we get the law right. It is unfortunate when accusations are thrown around about dedicated, impartial public servants.

[John Glen (Salisbury) (Con)]

I pay tribute to my hon. Friend’s work over several years in dealing with some of these issues. Will he comment on the fact that this country now has the smallest gap on record between tax owed and tax paid? That is the real story about this Government’s efficiency in dealing with tax collection and the difficulties in the system.

[Mr Gauke]

My hon. Friend is right. The reality is that the tax gap, as a percentage of tax revenues, has fallen considerably over the past six years, which is testimony to the effort put in by not only this Government but HMRC. Bringing the tax gap down involves considerable challenges, such as tax evasion, tax avoidance, and inadvertent error on the part of taxpayers, which does happen from time to time as I am sure all hon. Members will recognise. We are determined to do what we can do improve and strengthen our systems. I am grateful for the opportunity today to make progress on that.

Budget Resolutions and Economic Situation

John Glen Excerpts

Monday 21st March 2016 Commons Chamber

[Greg Clark]

Before the Chairman of the Select Committee comes to Budget debates, he should read the Red Book and do his homework. I am not going to help him in this debate.

Our road investment will complement rail investment. This includes the M62, accelerating progress to the achievement a four-lane smart motorway fit for the 21st century. Other improvements to both road and rail are not quite as high profile, but they are just as important—improving local links to bring home the benefit of national infrastructure.

[John Glen (Salisbury) (Con)]

Does my right hon. Friend recognise that the road improvement of most interest in the south-west is the upgrading of the A303—in particular, for my constituents, the tunnel at Stonehenge—which will transform the whole south-west peninsula?

[Greg Clark]

I do agree, and I note two things about what my hon. Friend says. The first is that this never happened when Labour were in government, and the second is that this could not have happened without the strong economy that this Government have built.

Many of these investments, such as the road just described by my hon. Friend the Member for Salisbury (John Glen), are long overdue. It has fallen to this Government to make improvements that could and should, as my hon. Friend says, have been made in earlier decades. That is why we must continue to make savings across the public sector.

Short Money

John Glen Excerpts

Tuesday 23rd February 2016 Commons Chamber

[John Penrose]

Obviously, the conclusions of the request for views will depend on what views are expressed, and I do not want to prejudge that. We will, however, want to move promptly and swiftly to make sure that any staff who might be affected by any changes that are announced have the maximum time for planning and that there is certainty as soon as there can be.

[John Glen (Salisbury) (Con)]

I regard Short money as a critical part of our democracy, but given the realistic comparison with special advisers, and the steps the Government have taken to have transparency in the publication of senior special advisers’ salaries, does the Minister not think it appropriate for the Opposition to show greater transparency in the salaries of their senior appointed researchers?

[John Penrose]

My hon. Friend, who was involved with administering Short money and policy development grants before he came into the House, knows whereof he speaks. He is right that it is essential that we demand the same transparency for taxpayers’ money in all areas. That should include not just the cost of Spads, which is already transparent, but, equally, policy development grants and Short money.

Short Money and Policy Development Grant

John Glen Excerpts

Thursday 11th February 2016 Commons Chamber

[John Penrose]

I agree with large parts of what the hon. Gentleman says. I think that the public will look at these contributions from the public purse—which taxpayers fund without choice, unlike other forms of political donation about which people do have a choice—and wonder why the political classes think that they should be exempt, particularly because, as the hon. Gentleman rightly points out, it is far more possible nowadays to do this work in an efficient fashion and to deliver greater efficiencies. I believe that he has in the past turned down potential allocations of either Short money or the policy development grant to which he was theoretically entitled, and I compliment him on that principled stand.

[John Glen (Salisbury) (Con)]

Speaking as one who managed Short money and the policy development grant for the Conservative party when we were in opposition, I think that they are critical elements of what we need in order to function effectively in a democracy. I recognise that the grants have increased significantly, but I would gently say to those on the Front Bench that when making proposals about the future of these sums and how they are to be spent, due consideration should be given to the risks of their being spent more broadly in political parties, and also the opportunities that exist to fund a great deal of the work involved from sources outside political parties in the modern age of politics.

[John Penrose]

My hon. Friend is absolutely right, and, as he says, he speaks from personal experience. I think that the crucial point we all need to remember—the guiding star—is that at some point whoever is in government will be in opposition, although I hope it will not be for a great deal of time in our case. We must therefore come up with rules that we are all happy to live with, whichever side of the aisle we are on.

Connaught Income Fund

John Glen Excerpts

Tuesday 12th January 2016 Commons Chamber

[Guto Bebb]

Again, I fully agree with my hon. Friend’s comments, and I do think that tonight’s turnout indicates the concern across the House on this issue. It is important to point out again that the proposed mediation was described as the fastest way of getting some compensation to investors, which is why the APPG welcomed it, although with some reservations. A deadline date of 31 October 2014 was offered for the completion of that mediation. Subsequently, in November 2014 the FCA announced a new date of the end of January 2015, and then in January 2015 it announced a new date of the end of March.

On 9 March 2015, I was asked to meet Martin Wheatley, the now former chief executive of the FCA, in Portcullis House, where I was informed that the FCA was withdrawing from the mediation process—that was announced the following day. Again, the decision was unilateral. In effect, the decision to go for mediation was a unilateral one made by the FCA without consulting other stakeholders, as was the decision to end the mediation. As chair of the APPG, I think it essential that the FCA explains why it took those decisions. It needs to explain why it thought it was better to end the mediation rather than continue with a method of dealing with this issue that it had claimed would be the most effective way to proceed.

[John Glen (Salisbury) (Con)]

My hon. Friend is getting to the crux of the matter. For an organisation that many of our constituents see as being an appropriate regulator and an arbiter of what should happen, this lack of accountability is totally unacceptable. The number of vulnerable people who are reliant on this organisation to act wisely means that it is outrageous that this situation is allowed to continue. Does he agree that urgent action needs to be taken by the Minister to ensure that the FCA steps up to the mark immediately?

[Guto Bebb]

I agree entirely with my hon. Friend, who has been a firm supporter of the APPG since its establishment. He makes the point we wish to make: we might be annoyed that the all-party group has not been kept informed, but we should be outraged that the investors and the stakeholders involved in the fund have also been treated with such disrespect.

Spending Review and Autumn Statement

John Glen Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

I do not know whether the hon. Gentleman misread the table, but public sector net borrowing is shown on page 14 as falling in every year, then it reaches a surplus.

[John Glen (Salisbury) (Con)]

I thank the Chancellor for his unswerving commitment to welfare reform, enabling him to invest in schools, defence and the NHS, and in particular for his investment in infrastructure. Can he confirm that he will continue to take a close interest in the future of science jobs at Porton and the planned investment in the A303 at Stonehenge?

[Mr Osborne]

I can give my hon. Friend that assurance. I am very keen to support the Porton science hub that he has championed and to make sure that as the public health laboratories move over a period of years, we build up a strong science hub there. That will be helped by the improved transport connections, including the huge billion-pound or so investment in the A303 past Stonehenge in his constituency.

Tax Credits

John Glen Excerpts

Thursday 29th October 2015 Commons Chamber

[Frank Field (Birkenhead) (Lab)]

I beg to move,

That this House calls on the Government to reconsider the effect on the lowest paid workers of its proposed changes to tax credits due to come into force in April 2016, to carry out and publish an analysis of that effect, and to bring forward proposals to mitigate it.

Thank you for your ruling, Mr Speaker. On behalf of the House, I thank the Backbench Business Committee, which not only acted quickly in giving us this debate but decided that we should have a whole day to debate the issue given the importance of the matters we are discussing to many of our constituents, particularly those who have the least money.

Members will have seen from the motion on the Order Paper, signed by a large number of my hon. Friends from both sides of the House, that we want to touch on three themes today. First, we call on the Government to give us more data so that we can, secondly, consider the impact of the tax credit cuts on our lower-paid constituents. Thirdly, given that there is now a debate raging in this House as well as outside it, we wanted to give the House the opportunity to suggest means by which the Government might mitigate the measures, although the debate has moved so fast that I do not think that those on the Treasury Bench are thinking merely of mitigation.

In this opening contribution I want to touch on three themes. First, I congratulate the House of Lords not on causing a constitutional crisis, but on giving the Government a well-earned opportunity to think twice about their proposals. Secondly, I shall outline the data that we need in this place to consider how the biggest change in the Budget will impact on our constituents. Thirdly, I want to start introducing the proposals that Members are putting forward not merely for mitigation, but for reform of the tax credit proposals.

First, on the lucky break that has been dealt to the Chancellor, when the Lords rejected the statutory instrument giving the Government authority to go ahead with the tax credit changes, I began to pity that no doubt young adviser in the Treasury who had thought up the wheeze of putting the measure in a statutory instrument rather than in the Budget itself. Although on many subjects we would disagree with Lloyd George, he had a certain wisdom in deciding how to protect money resolutions in this House from interference from the other place. The convention that had been developing before and was reaffirmed with legislative force then was that if a Budget motion goes from this House, the other place might wish to debate it but could not interfere with it. I pitied the career of that young adviser who suggested a wonderful wheeze not to debate it here on the Floor of the House, but to take the very essence of the Budget in a Committee stage upstairs.

Now, as more hon. Members have begun to realise the consequences of the tax credit changes, I began to think that maybe that official is for promotion, in that the procedure gives wonderful cover for the Government to engage seriously with us here and with our constituents on what might best be done both to meet the Government’s target to reduce the deficit and to make sure that any reduction is not disproportionately or to any extent put on those with the weakest shoulders. It is a huge opportunity and I hope that in the course of the debate we will see the changes and the movement that has taken place since that Budget debate.

Secondly, I make a plea for the data that this House requires so that it can understand what is involved for all our constituents, particularly those strivers who get up and work, doing some of the least privileged jobs in our society, and whom successive Governments of different complexions thought we should encourage rather than deter. It is worth remarking, although I do not wish to add any conflict to this debate, that we have to go back to Lloyd George’s debates to look at the information that he provided to the House on who would pay for his 1909 Budget—that Budget in which he enshrined it in our constitution that Budget measures were for this place and not for the other place.

Lloyd George provided far more information than the Government provided this year on who would be affected by his Budget. I know it was simpler then—he was after the landlords’ pay and he made it plain that they would pay for the measures, and that the Budget would redistribute not just to the poor, but to the poor who were not in trade unions and who at that point had no one to protect them. The Government have achieved a first—and I hope they will withdraw from this innovation—in starving the House of the necessary information.

What I would like to see from the Government is how we break down among decile groups—each 10% if the income distribution—the impact of this £4.5 billion cut in tax credits. May we have that information by each data group? There are three big changes that the Government wrought in the Budget statement. First, they reduced the earnings threshold from £6,420, lowering it to £3,850 next April. Secondly, they are abolishing the family element—the £500 that was put into the calculation —which will disappear in 2017. Thirdly, the child element, which is valued at £2,780 a year, will be lost for all children after the second child in a family.

Those measures will obviously affect different groups in all our constituencies. Given that there is a unity across the House on the idea that the necessary reductions in the budget deficit should be borne by those with the broadest shoulders, we need to look at the impact of those measures, both individually and collectively, on each decile group. Then we need to look at the impact for each type of family and for each year up to 2020.

To be fair to the Government, many of us wish them to include in that analysis the four compensatory measures that they argue will mitigate most, if not all, of those changes. For example, the Prime Minister has told the country that eight out of 10 families will be better off as a result of this year’s Budget. The truth is that eight out of 10 might well be better off, but practically all of our constituents who draw tax credits are in the two out of 10 who will be substantially worse off. I therefore hope not only that we will see a careful analysis of the cuts affecting individual families, but, in order for it to be rounded and fair, that it will include the four compensatory measures that the Government argue will mitigate the impact.

One such mitigating factor is the welcome increase in the tax threshold. When the Exchequer Secretary replies to the debate, perhaps he will be able to tell us whether all those claiming tax credits will be covered, or is the figure more like half? Let me say now—I might not have an opportunity later—that I have huge regard for him. I am sympathetic to the position he is in, because he is defending a Government brief that is on the move. I will mention a precedent that I think will cheer him. Those of us who have been in this place for some time will remember when Mrs T insisted that John Major come to the Dispatch Box to defend her policy on cold weather payments. She then heard the eruptions from the Benches behind him and decided to change the policy that afternoon, but she instructed him to tell the House that something much better was in store. I hope that the Chancellor, who is now in listening mode and thinking about what changes to make, will be similarly generous and allow the Exchequer Secretary to announce those changes, rather than seeking to take any kudos himself.

One of the big changes is the increase in the tax threshold, but only half of those who will lose out as a result of the tax credits changes will be compensated, or partly compensated, by that increase. Probably the most important positive measure that the Government will introduce in this Parliament is the significant increase in childcare for all our constituents who have children under the age of five: the number of hours of childcare for the poorest two-year-olds and all three and four-year-olds will increase to 30 a week.

The Minister who will reply to this debate has probably the most important brief of any Minister, because he now has overall responsibility for life chances. If this House is serious about ensuring that the life chances of children in the poorest households are raised to the level of children in more privileged households, we must look very carefully at how that extra money is spent and, in particular, whether our very poorest and youngest constituents get the best deal out of that childcare. The increase in childcare is probably the most important social measure that the Government are likely to introduce in this Parliament, but following close on its heels is the introduction of a national living wage.

[John Glen (Salisbury) (Con)]

The right hon. Gentleman is making a characteristically thoughtful speech, but in discussing amelioration of the third element will he acknowledge that many employers are going further than the schedule for the national living wage uplift requires? That will be massively welcome to many people across the country and will have a material impact on the four elements he is describing.

[Frank Field]

Many employers are doing so, but some are not, hence the importance of the Chancellor’s making it a statutory requirement. That demonstrates the role of law when it is used cleverly. A number of employers who previously were not interested in introducing a national living wage—in correspondence with me, they said that they would not do so—are now among those that have, in a sense, jumped the gun in introducing the Chancellor’s national living wage. That is welcome.