Finance Bill

Debate between Lord Spellar and Jesse Norman

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Jesse Norman]

I am grateful to all of those who have spoken in this debate. As the right hon. Member for Hayes and Harlington (John McDonnell) has just said, this has been something of a wash-up debate. It is fair to say that it is a bit of an omnibus group of measures pulled together, with many different clauses and issues on which colleagues have wanted to speak. That has made it wide-ranging, but if I may, I am going to focus on some of the key themes from across the various discussions we have had.

Let me start with the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) and the question of the non-resident surcharge, which was also highlighted by the hon. Member for Hackney South and Shoreditch (Meg Hillier). They may or may not be aware that in 2019 the Government carried out a public consultation on whether there should be a 1% non-resident surcharge, and decided on the basis of that consultation that the surcharge should be levied at 2%. That is twice as high as was originally contemplated in the consultation. That also should be seen in the context of the additional tax that people pay on second and third properties, many of which will fall into the scope of this measure. That is an important factor to bear in mind.

The hon. Member for Brighton, Pavilion (Caroline Lucas) revisited some of her key themes as regards the climate and environmental policy. I think that there is a misunderstanding at some very deep level of what the Government are doing, which includes: the Environment Bill; the 10-point plan that the Prime Minister has laid out; the net zero work that the hon. Lady highlighted, which was commissioned within and by the Treasury from a very eminent independent economist; and our work through the new UK Infrastructure Bank, which focuses on green policies and levelling up and for which I was pleased to visit new potential office sites in Leeds only on Thursday. It all amounts to a tremendous emphasis, particularly in the net zero review, on the long-term future of creating a sustainable and productive green economy in this country. It is very important to focus on that.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) talked about health inequalities. I remind her that the Government have made an enormous investment in the NHS, over and above the extraordinary interventions supporting the fabric of our society over the past 12 months. We will also have in place a new office for health promotion, designed to support better health and wellbeing across the country.

The hon. Member for Ceredigion (Ben Lake) called for greater transparency in relation to reliefs. I have a great deal of personal sympathy with his position; he is absolutely right about the importance of focusing on reliefs. To take a particular example that I know is of great interest to him, he will be aware that we have under way a review of R&D tax reliefs, an important part of policy.

The hon. Member for Hornsey and Wood Green (Catherine West) highlighted the situation in Belarus, which is not directly a matter for the Treasury or the Bill, but is obviously a topic of great importance and interest for all Members of this House, as today’s urgent question highlighted.

All those points are important to put on the record. I also want to pick up on the important speeches made by my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith).

My right hon. Friend the Member for Haltemprice and Howden focused on the prevalence of umbrella companies. It is important to say that there are legitimate reasons why an agency or an individual might wish to use an umbrella company. To contemplate a series of measures that might include a ban on umbrella companies would be a tremendous burden on the legitimate umbrella companies; my right hon. Friend mentioned that that was not his preferred option. It is important to point out that such companies can perform useful payroll functions for agencies, provide choice for individuals and have multiple engagements. Notably, the Low Incomes Tax Reform Group pointed out recently:

“For freelance contractors who cannot work for their clients on a sole trader or limited company basis…the option to be able to work through an umbrella can be very valuable.”

There is value to umbrella companies, but that is not to say that there is not also abuse. The Government are very focused on that: my right hon. Friend mentioned some of the measures that HMRC is taking to combat umbrella companies that are disobeying the rules or trading fraudulently, and we are committed to extending the remit of the Employment Agency Standards Inspectorate to support best practice in the area.

[John Spellar]

I think the Financial Secretary ought to face up to the reality, which is that many of the people under these companies are not what we would describe in any normal parlance as contractors: they are people working on Test and Trace in their thousands, for example, who should be employed directly either by Serco or by the agency that they work for. There are also great numbers of people in the health service under these companies; they should be employed either by an agency or by the health service. That is where the scandal is, and that is what he really ought to be dealing with—and very promptly.

[Jesse Norman]

It is a very dynamic marketplace, as the right hon. Gentleman will be aware. There are many different aspects to it with which the Government are seeking to engage. One thing that is quite important that I do not think he or others have noticed is that the changes to IR35 that the Government have made have in some quarters been widely welcomed. Let me give an example—it may not be the widest possible welcome, but it is quite noticeable—from the off-payroll advisory firm Qdos, which said:

“In recent months the tide has turned, with thousands of businesses now aware of the fact that IR35 reform is manageable”,

as it was manageable in the public sector some years before. It is important to recognise that that is also the case.

Loan Charge 2019: Sir Amyas Morse Review

Debate between Lord Spellar and Jesse Norman

Thursday 19th March 2020 Commons Chamber

[Jesse Norman]

I have in my hand a detailed document designed to address this very issue. It goes through a whole range of different approaches and integrates them into a strategy. I would be delighted to have any input that she would like to make about other ways in which that can be improved and developed. We work on the basis of the law as it presently stands, and which we have inherited. It is itself the result of previous Parliaments, including of course the parliamentary consideration of the loan charge. We have to work with the hand we have got, and improve it as fast and as comprehensively as we can.

I will now address the motion directly and then, in the limited time I have, turn to the comments that have been made. Is the loan charge retrospective? Again, I think it is clear that it is not. It was introduced as a new measure in 2017. It taxes a loan outstanding at a future date. It does not change any law previously on the statute book.

It has been asked why the loan charge was introduced. In the words of Sir Amyas Morse, it

“offers an expedited means of collecting tax that is due”.

Is the loan charge unjust? Again, I would suggest not. If one asks the average man or woman in this country, I think they would say, “Everyone should pay their fair share of taxes. People are responsible for their own tax affairs. Real loans get repaid; if someone offered you a loan for which no repayment, no tax and no interest was due, it would probably be too good to be true.” And so it is.

The numbers seem to bear that out. More than 99.8% of the tax-paying population have never used a scheme. Even among the freelance population, the take-up has been only 2.5%. It is notable that Sir Amyas Morse was clear that he supported the essential purpose of the loan charge and that it should remain in force.

We have heard a lot about how the law was not settled in 2017. Again, as I said, I can do no better than refer colleagues to section A of the Morse review, which carefully reconstructs the history of the past 20 years of disguised remuneration.

Let me quickly turn to the many excellent contributions that have been made. I will start with the excellent contribution made as a point of order by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), who pointed out the excellence of my book on Adam Smith—I thank him for that, although I defer to the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), as Kirkcaldy was, of course, Smith’s home town. My right hon. Friend the Member for New Forest West will recall—he taught economics so he must know about these things—that Smith not only set out the ideals of a well-functioning tax system, which we all aspire to achieve, but was, for the last 12 years of his life, a practising commissioner of customs, attempting to wrestle with an ever-evolving customs market and seeking to extract duty and tax due, and rightly so.

I would like to touch on the statesmanlike comments of the hon. Member for Bootle, the shadow Chief Secretary, which perhaps reflected his imminent expectation of taking my seat on this side of the aisle. He recognised that what people do not pay in tax due, someone else must. He is right about that. He noticed that if it looks too good to be true, it probably is. He is right to focus, as others have, on the enablers and promoters.

[John Spellar (Warley) (Lab)]

Will the Minister give way?

[Jesse Norman]

I have half a minute left. The right hon. Gentleman has only just arrived, so it is a little impertinent to raise a question at this point.

It is important that we focus on the centrality of the claim. Sir Amyas Morse has looked at it, and he has attempted to find a Jupiterian way through complicated tax issues and to deal, with equity, with the different interests and parties involved. I think he has succeeded, which is why the Government, comprehensively, with one exception, have accepted his conclusions.

The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019

Debate between Lord Spellar and Jesse Norman

Monday 24th June 2019 General Committees

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move,

That the Committee has considered the Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019.

It is a great pleasure to serve under your chairmanship, Mr Robertson. The instrument amends the Value Added Tax Act 1994 to alter the scope of the reduced rate of VAT for the installation of energy-saving materials. That ensures consistency with the 2015 judgment of the Court of Justice of the European Union.

As the Committee will know, this Government are deeply committed to greening our economy and our society and bid fair to be the greenest Government ever. It is of huge regret to us that we have felt compelled to make this change because of EU regulation.

Under current UK VAT rules, a reduced rate of 5% applies to the installation of energy-saving materials such as insulation, solar panels and other technologies in residential properties. Under EU law, it is not possible to remove VAT from those materials, so the reduced rate of 5% applies. The VAT relief aims to lower the cost for consumers and families to install those energy-efficient products in their homes.

In 2011, the European Commission launched an infraction proceeding against the UK, arguing that the scope of the UK’s reduced rate for the installation of energy-saving materials was too wide and needed to be changed. The Government did not agree with the European Commission’s infraction proceeding, so the matter was heard by the Court of Justice of the European Union. In 2015, the Court agreed with the Commission and found that the scope of the UK’s reduced rate for energy-saving materials was indeed too wide.

Under EU rules, the UK is obliged to comply with the decision of the EU Court of Justice. If it does not, the European Commission will be required to issue infraction fines against the UK.

[John Spellar (Warley) (Lab)]

Given that the Prime Minister and others, including the Conservative leadership candidates, say that we are going to leave the EU on 31 October, why is the Minister rushing to comply rather than ignoring this and waiting until then?

[Jesse Norman]

As the right hon. Gentleman will know, it is hardly rushing to respond to an infraction proceeding that began in 2011 and involved a European Union Court of Justice appeal in 2015. While we remain a member of the EU, we are required to obey its laws. When we leave the EU, we will of course be in a position to revisit the issue.

[John Spellar]

I understand the build-up—it always takes this long—but given that Britain may leave the EU in only a few months, why does the Minister feel it necessary to do this now?

Oral Answers to Questions

Debate between Lord Spellar and Jesse Norman

Thursday 5th July 2018 Commons Chamber

[Jesse Norman]

I can certainly confirm that we will be consulting shortly on E10 and that we are looking closely at the issue of fuel labelling, which, as the hon. Gentleman knows, has to be addressed relatively quickly.

[John Spellar (Warley) (Lab)]

Does the Minister accept that what is really needed is an overall, measured, strategic approach to the propulsion mix for vehicles? That will rightly include E10, but it will also include diesel. What has been so damaging to that industry has been the Government’s war on diesel, which has been hugely damaging to our automotive sector, as well as our engine manufacturing.

[Jesse Norman]

I can only salute the right hon. Gentleman’s expertise in crowbarring a question about diesel into exchanges about E10. We are taking a strategic approach. We introduced changes to the renewable transport fuel obligation earlier this year. We have changed the status of the crop cap. We are pushing for the increased use of waste-based biofuels, and we are supporting the introduction of higher-performance fuels in other sectors of the transport world.

Oral Answers to Questions

Debate between Lord Spellar and Jesse Norman

Thursday 13th July 2017 Commons Chamber

[Jesse Norman]

My right hon. Friend has made his point eloquently. All I would say is that the major roads network that we announced last week, along with the bypass fund, is specifically designed to be part of a wider strategy whose purpose is to provide the infrastructure that new housing development requires. That should be part of the solution for any of these schemes.

[John Spellar (Warley) (Lab)]

rose—

--- Later in debate ---

[John Spellar]

Mid Sussex. Does the Minister accept that the road system to Mid Sussex would be considerably improved if money was diverted from the ever-deepening, bottomless pit of HS2, thus enabling those projects to move forward much more quickly? May I join my hon. Friend the Member for Bolsover (Mr Skinner) in calling for a reassessment of this increasingly troubled scheme?

[Jesse Norman]

Mr Speaker, it is a mark of your grace that you were able to allow the right hon. Gentleman to proceed with a question so evidently unrelated to the issue, so much so that he was not able to make it to the actual name of the constituency or the area concerned, although that came in the first 10 seconds of his question. The answer to his question, if I may dignify it with an answer, is that there will be plenty of investment in both sides of that equation.