Tax Avoidance and Multinational Companies
Lindsay Hoyle Excerpts(8 years, 10 months ago)
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Mr Bacon
The Public Accounts Committee found that HMRC as a whole had only 65 specialists in transfer pricing, which was about the same as each of the big four accounting firms. Does the hon. Gentleman welcome this Government’s introduction of more transfer pricing specialists in HMRC?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I say to hon. Members who wish to speak but are now making interventions that I assume they will not mind if they go to the bottom of the list because they have almost used up their time?
Roger Mullin
I thank the hon. Gentleman for his intervention, because I must admit I was not aware that only 65 staff were involved in transfer pricing. That seems to me to be remarkably few, given the challenges they face. I would welcome anything that can be done to strengthen their numbers.
Times have changed. Back in the 1970s, it was never envisaged that huge multinational corporations could quickly arise as a result of operating in the world of the internet. The tax system, which has been built up over many years—as the hon. Member for Warrington South (David Mowat) mentioned, part of it dates from the 1920s or thereabouts—is singularly unable to deal with some of the types of international corporations, such as Facebook and Google, that there are today.
The world has changed fast in other regards. I am old enough to remember being able to go into a café and just ask for a coffee.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The clock is on zero. I think it would be unfair to allow the hon. Gentleman to give way.
Financial Conduct Authority
Lindsay Hoyle Excerpts(8 years, 10 months ago)
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Mr Deputy Speaker (Mr Lindsay Hoyle)
I call Guto Bebb to move the motion. You have 10 to 15 minutes.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I now introduce an eight-minute time limit.
Anna Turley (Redcar) (Lab/Co-op)
I share the hon. Gentleman’s concern about honing in only on the bad news, but that is cold comfort to the many constituents of ours facing these difficult problems. My constituent Mr Lilley and his family own a small glass and DIY business in the village Marske. They were mis-sold an interest rate hedging product by HSBC and are still owed thousands of pounds because of the difference in the premium. Is that not a perfect example of how the FCA is failing to investigate? This issue is of huge personal significance to our constituents—
Mark Garnier
The hon. Lady speaks well, and should take as long as she can to make her point.
Mr Deputy Speaker
Order. I will make that decision. I do not want us mentioning football either, as I watch Bolton Wanderers. I also ask the hon. Gentleman to talk to the Chair, not the Chamber.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I just remind everybody that the Chair certainly will not be favouring any Government, for or against?
Mr Streeter
We all knew that, Mr Deputy Speaker.
It is perfectly possible that the swaps were designed to be so complicated that they could not be understood. Primarily, they were designed in a way as to make the selling bank vast sums of commission, and it was all done in the name of commercial greed. Nobody minds a profit, but this went well beyond that. Although I am a loyal supporter of this Government, we have an FCA compensation scheme that is pitiful and, as a result, we are in danger of letting our constituents down. However, it is not too late for the Government to get a grip on the FCA and sort this matter out.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We will have to drop to seven minutes to get everyone in on time.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to have to drop the time limit again because of the intervention. It will now be six minutes.
Mr Rees-Mogg
I am grateful to my hon. Friend for that intervention, because I think there is a difficulty with time. Reference has been made to the HBOS report, which took a long time to come forward. Again, it started under the FSA, and the failures were of the FSA, not of the FCA. For a body that has been going for only three years, such a timespan is perhaps not that unreasonable, given that for two of those years it was making a specific investigation.
We have made huge progress, thanks to my hon. Friend the Member for Aberconwy, in achieving redress of grievance. That is enormously important, and it is right to do that. However, a vote of no confidence is the nuclear weapon of Parliament. It is something that brings Governments down. If we pass the motion, it ought to lead to fundamental change at the FCA and resignations, but I fear that we are trying to fire this gun before we have loaded it with gunpowder, and that therefore it will misfire. In that respect, I hope that my hon. Friend will withdraw the motion, because I think it has had its effect through the debate.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sorry to say that we are now going down to five minutes, because of interventions. I call George Kerevan.
Mr Deputy Speaker (Mr Lindsay Hoyle)
In that case, we can still have six minutes. I call Michelle Thomson.
HMRC Office Closures
Lindsay Hoyle Excerpts(9 years ago)
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Helen Goodman (Bishop Auckland) (Lab)
On a point of order, Mr Deputy Speaker. I do not know whether you are aware that cinema distributors in this country have refused to carry an advertisement for the Lord’s prayer by the Church of England, despite the fact that it has been approved by the British Board of Film Classification and by the Equality and Human Rights Commission. What action do you think I might take to draw this to the attention of the Secretary of State for Culture, Media and Sport, who might do something about this fundamental attack on free speech?
Mr Deputy Speaker (Mr Lindsay Hoyle)
That is not a point of order, but the good thing is that you have raised it on the Floor of the House, it is now on the record, and I am sure that, quite rightly, people will look at it closely. I hope that at some point people will come back to you on the point you raise.
Royal Bank of Scotland
Lindsay Hoyle Excerpts(9 years ago)
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Grahame M. Morris (Easington) (Lab)
I agree with the hon. Gentleman’s point about some of the business practices, but does he accept that the motion is a reasonable and moderate proposal, and the contention of my hon. Friend the Member for Edmonton (Kate Osamor) that we should consider other models, such as the Sparkassen model in Germany? Does he agree that bankers’ bonuses have been a significant factor in driving the misbehaviour that led to the downfall and the financial crash in 2008? Is it not true that the German banking system is geared towards supporting jobs and the real economy, and it would be a far better approach altogether if we did the same?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Interventions need to be a little bit shorter. I am bothered that hon. Members are all down to speak and they will have nothing to say because everything will have been covered in interventions.
Welfare Reform and Work Bill
Lindsay Hoyle Excerpts(9 years, 1 month ago)
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Owen Smith
I could, of course, refer, as I have done repeatedly, to not cutting inheritance tax for people passing on million-pound houses; I could talk about not introducing the millionaires’ tax cut; I could talk about clamping down on tax avoidance and evasion. But the real question is for the working families in the hon. Gentleman’s constituency, thousands of whom are going to see 10% of their income carved away at the stroke of a pen, in a letter arriving just before Christmas. It is a disgrace what this Government are doing. We are clear that we are opposing it tonight and will continue to oppose it. Asking working mothers to shoulder 70% of the cuts is no way for any Government to continue.
This Bill is a litany of broken promises. The risk of job loss, sickness, bereavement or retirement faces all of us at some point, yet this is a Tory bid to undermine the basic case for support and security for individuals through the collective pooling of risk. The Bill is a naked attempt to turn people against one another, in order to undermine any concept of a safety net—young against old, disabled people against non-disabled people, those in work against those looking for work.
The Opposition will not play that game. We are not interested in those divisive Tory tactics. We all want to bring down the welfare bill by making work pay, getting the homes we need built, bringing down unemployment and growing our economy, helping our foundation industries, such as the steel industry, which is being abandoned by the Government—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Bacon, you are getting carried away. That is not like you. You are usually a man who wants to hear both sides of the argument. Don’t spoil it tonight.
Owen Smith
I am very grateful to you, Mr Deputy Speaker.
The Tories faced a humiliating and deserved defeat last night in the House of Lords, in part due to their failure to outline where cuts will fall and being less than open about their intentions. Just like their cuts to tax credits, this Bill breaks the Conservatives’ manifesto promises—pledges to protect pensioners, to support the young, to help the disabled into work and to back working families. This is a cruel Bill that shows that the Tory manifesto was not worth the paper it was printed on. It penalises children, takes money from low and middle-income workers, drives families from their homes, punishes disabled people and will push hundreds of thousands of children into poverty. We will oppose it tonight.
Peter Heaton-Jones (North Devon) (Con)
It was a pleasure to serve on the Public Bill Committee along with hon. Members from both sides of the House who I can see in the Chamber. I sat through many sittings of the Committee, listening intently to all that was said, and I simply fail to recognise a lot of what the hon. Member for Pontypridd (Owen Smith) said about what the Bill will do. I do not know how much of the Committee he sat through.
We have made great progress on the economy since 2010, and it is worth recording some facts. I stress that they are facts. Employment is now at a record high of more than 31 million, up more than 2 million since 2010. That represents a record employment rate of 73%. I am always proud to talk about my constituency of North Devon, and the JSA claimant rate there is just 0.9%, a record low. Unemployment is almost back to its pre-recession levels—a recession, let us remember, caused by the Labour party—[Interruption.] The number of workless households is at a record low as well, down nearly 700,000—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I expect the same courtesy from Opposition Members as I expected from Government Members.
Peter Heaton-Jones
Thank you, Mr Deputy Speaker. They do not want to hear the truth, that is the problem.
Our welfare reforms over the last Parliament, every one of which was designed with the aim of supporting those who are able to work in getting closer to employment, were undoubtedly part of achieving the success story I have cited.
Finance Bill
Lindsay Hoyle Excerpts(9 years, 1 month ago)
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Sir Edward Leigh (Gainsborough) (Con)
On a point of order, Mr Deputy Speaker. In the other place not two minutes ago, their Lordships voted for a Labour amendment to in effect kill off—[Interruption.] Not for 100 years has the House of Lords defied this elected House. This is a serious matter, and I ask you or Mr Speaker to make a statement to protect the rights of the elected representatives—not just for us, but for the people of this country.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Sir Edward, as you well know, it takes both Houses to agree. The subject has come before this House and I am sure that this is not the end of the matter, but you have certainly enabled us to be informed.
Wes Streeting
Further to that point of order, Mr Deputy Speaker. The very fact that the hon. Member for Gainsborough (Sir Edward Leigh) raised that point of order in the manner he did underpins the importance of Members of this House—I believe the majority of them are also opposed to the changes—trooping through the right voting Lobby to ensure that there is in fact an alignment of opinion between the two Houses, even though the Government Whips colluded last week to ensure—
Mr Deputy Speaker
Order. I am not getting into a debate on the merits or not of the subject. I have given my answer and I am sure that all hon. Members have taken it on board. I want to get back to the debate. We still have a lot of speakers to come.
Mr Baker
In ascending order of difficulty, there are another four things the Government could do. The first is to do what new clause 7 would impose on them, which is to negotiate within the existing EU framework to deliver a zero-rating on tampons and sanitary products. The second would be to renegotiate the power to set such taxes. I commend that to the Minister, and I hope he will comment on the Government’s willingness to repatriate all tax powers, particularly VAT, back to this country. The third is to legislate, notwithstanding the European Communities Act. It seems to me that that would be a bold move, but I would certainly support it to end the problem swiftly, and I hope that Members on both sides of the House would support that. The final thing that could be done would be for us to leave the European Union and, as my hon. Friend the Member for St Albans (Mrs Main) said, decide for ourselves in this House matters of taxation that apply to all our constituents.
This evening, I want to listen extremely carefully to what my hon. Friend the Minister says. It is quite clear that we can no longer go on saying that this issue of the taxation of tampons and sanitary products is too difficult to push through all the member states and the European Commission. Clearly, action must be taken that is robust and dynamic. I must say to those who criticise us for being Eurosceptics that we know we are taking a risk. Unlikely as it seems, the Commission and the member states may well rise to the occasion and solve the problem. Well, good on them if they do. I should be very glad indeed to see no tax on these products right across the European Union.
Tax Credits
Lindsay Hoyle Excerpts(9 years, 1 month ago)
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Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We can only have one Member on their feet at once. We cannot have the whole Chamber trying to get in at once.
Clive Efford
I am taking my time, Mr Deputy Speaker.
The Prime Minister and others were asked specifically, “Will you cut tax credits?”, and the answer was no.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to introduce a two-minute limit, so that everyone will have a chance to speak.
Owen Smith
I have heard this several times over the past few weeks—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I presume that Conservative Members would want to hear their own Front Bencher, and I am sure that the rest of us would like to hear the Labour Front Bencher now.
Owen Smith
I am grateful to you, Mr Deputy Speaker.
I have heard this nonsense from the Government several times; I heard it from the Exchequer Secretary earlier today. The truth is that when this variation of tax and child credits came in in 2003-04, the original bill was £19 billion. It went up to about £23 billion under Labour, and then in 2009, after the crash, it went up to £29 billion. Under the Chief Secretary’s Government, it has been £30 billion each year, so the largest bill we have paid for tax credits has been under the Tories. Why is that? It is because the low-welfare, low-tax, high-wage economy that he talks about is a myth—the Tories have failed to deliver it. Instead, we have a tax credit system that is a vital lifeline for working people on low and middle incomes who have relied on it to make ends meet over the past few years and still rely on it. The Tories will be pulling the rug out from under those people if they persist with this policy tonight. They know that none of the measures they have talked about—the personal income tax rise or the childcare provision—will offset the vast losses we have seen. It is an absolute con, just as it was a con from the Prime Minister when he told the country that he was not going to cut any tax credits.
I would like to be able to point to a Government impact assessment that would tell us the truth of this, but it is so thin it is barely worth mentioning. It is about as useful and reliable as a Volkswagen engine test. However, we have not needed an assessment because we have had one from the Chief Secretary’s own Back Benchers. Successive Back Benchers have stood up today and offered their view—their impact assessment—of what this Government are going to do to our constituents, and to Conservative constituents, across this country. I referred earlier to the hon. Member for South Cambridgeshire (Heidi Allen), who made a scintillating speech. I will quote a few words for the delectation of the Chief Secretary. She said that these measures were “betraying who we are”—that is, who the Conservatives are. She said that they would lead to working people having to choose between heating and eating.
The hon. Member for Plymouth, Moor View (Johnny Mercer) gave another excellent speech in which he said that his blue-collar city opposes these reforms. He pleaded with his Front Benchers, as a compassionate Conservative, to think again. The hon. Member for Stafford (Jeremy Lefroy) talked about the impact we would see on carers and on people on low incomes. The hon. Member for Waveney (Peter Aldous) said that as a one-nation Conservative he could not support these reforms without significant mitigation. We heard interventions from the hon. Members for Gainsborough (Sir Edward Leigh) and for Brigg and Goole (Andrew Percy). Those are just some of the Conservative Members who are opposed to these measures.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am struggling to hear the Minister. I wish to hear what the Minister has to say. Has the Minister given way?
Greg Hands
I thank my colleagues from across the country for their thoughtful speeches.
In conclusion, the reforms must be considered as part of a package—the tax credit reforms, the big rise in the personal allowance and a £9 an hour national living wage by the end of this Parliament. The changes we are putting in place will deliver a new settlement for working people, one where they keep more of the money they have earned, where work pays and where employers pay decent wages without requiring them to be topped up by the state. Under Labour, tax credit spending doubled; we are bringing it back to the spending levels of 2007-08.
These reforms are necessary and fair, and will deliver a lasting settlement. I urge Members to vote—
Wes Streeting (Ilford North) (Lab)
On a point of order, Mr Deputy Speaker. I was wondering whether it was disorderly or simply discourteous that in his winding-up speech the Chief Secretary to the Treasury neglected to congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her maiden speech.
Mr Deputy Speaker (Mr Lindsay Hoyle)
If that was the case, I am sure it was not deliberate. No hon. Member would miss out a maiden speech.
Tax Credits
Lindsay Hoyle Excerpts(9 years, 2 months ago)
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Damian Hinds
Time is short, so I am going to make some more progress.
For too long in this country—[Interruption.]
Mr David Anderson (Blaydon) (Lab)
On a point of order, Mr Deputy Speaker. For clarification, will the Minister please explain that the wages of public sector workers are going up not by 2.8% this year, but by only 1%?
Damian Hinds
For too long, low pay has been addressed in this country not by genuine reform and driving productivity, but by subsidising it through the tax credit system. In the decade to 2010, tax credit expenditure more than trebled in real terms. The changes introduced in this order will build on the last Parliament’s reforms and return real-terms tax credit spending to its 2007-08 levels—a decade into the Labour party’s tenure in government. It is not a stand-alone measure, but part of what my right hon. Friend the Chancellor called a “new contract” with working Britain. It says to businesses, “You will have to pay higher wages, but you will get lower business taxes and a stable economy”; it says to people, “You can get higher pay and lower tax, but with less benefit top-up”; and it says to the country, “We are going to spend less and live within our means”. These regulations are an important part of that, and I commend them to the House.
Seema Malhotra
I am unclear—[Laughter.] I am unclear about why the hon. Gentleman wishes to make this an issue about the Labour party, and not an issue about why his Government have presented the House with a measure that will have a negative impact on his constituents as well. He will have to account to his constituents for the decision that he chooses to make today when they come to his surgery, knowing that—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I certainly want to hear the shadow Minister, and I would expect Conservative Members to want to hear her as well. If they do not, I am sure that the Tea Room awaits them.
Seema Malhotra
Thank you, Mr Deputy Speaker.
As I was saying, this measure is ideologically driven, it is cynical, and it will directly increase levels of poverty in Britain.
Seema Malhotra
I thank the right hon. and learned Gentleman for his intervention. He may first want to explain why he voted against the national minimum wage when it was put to this House. We agree about people needing to come off tax credits, but we would do that through an increase in wages and in productivity.
The Government have sought to argue that working people will be compensated for the cuts by the increases in the minimum or living wage. That is contested by the Institute for Fiscal Studies, which says that it is “arithmetically impossible”. Although we welcome the increase to the personal allowance and the introduction of the so-called national living wage, as the Low Incomes Tax Reform Group has stated, any gains from those measures will not negate the impact of these tax credit cuts from April 2016. The IFS recently concluded that families will lose over £1,000 a year on average from cuts to tax credits, while they will gain between £100 and £200 a year at most from the proposed national living wage, and even that is seen as optimistic.
The IFS analysis has also shown that those on the lowest incomes are hit hardest by the Government’s tax and benefits changes. The reduction in annual income over the next five years is most marked for the poorest four income decile groups, highlighting the regressive nature of this Government’s fiscal choices.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. A lot of Members want to get in, so let us crack on with a four-minute limit on Back-Bench speeches.
Richard Graham (Gloucester) (Con)
Conservative Members are clear that the macro picture is absolutely right and we have to reduce the welfare bill. Does my hon. Friend agree that the Government could do one specific thing that would help enormously? The BBC has withdrawn its online calculator for people who want to know how much they will be affected by this, and online forums suggest that different calculations are produced by different newspapers. Could the Government produce their own calculator so that our constituents can find out—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Graham, you know you are pushing your luck. The hon. Gentleman has already given way twice and you are taking up your colleague’s time.
Mark Garnier
A very wise idea.
The second reason I am very supportive of these changes goes back to the old argument about reducing the deficit. Conservatives made it perfectly clear at the last election that we would seek to find £12 billion through benefit changes, and that was a manifesto pledge. We were elected with an increase in our number of Members of Parliament and a rise in the sitting MPs’ majorities. We have been asked by the country to deliver on our manifesto pledges, and this is part of that delivery.
We still have a budget deficit, and the tax credits system costs the taxpayer about £30 billion a year. The IFS this morning said that it expects these changes potentially to deliver £6 billion in savings. It is worth remembering that, as has been said, tax credits cost just £1.1 billion when they were first introduced, but that has now ballooned to the current level and that is simply not acceptable. It is also worth remembering that they ballooned in a period of so-called “high economic growth”. The then Chancellor, famous for many things but in particular for claiming to have ended boom and bust, was running a bizarre programme of increasing benefits at the same time as telling us that the economy was fine and growing steadily. Perhaps he knew something that he was not telling us, increasing benefits in anticipation of the collapse caused by the crisis—perhaps he knew it was coming. By 2010, 90% of families with children were receiving tax benefits. Do 90% of families actually need these tax credits, even after all those years of the Labour Government, when we would have thought that the families would be doing better? Apparently, they are not. These tax changes take us back to the real levels in 2007 and 2008.
I wish to finish by discussing one point. I was very struck, as were many Members, by the election whose result we saw on Saturday. I was particularly struck by the number of young people who were voting in that leadership election. They were voting in the name of voting against austerity. They were objecting to what they see as cuts being delivered to them today. In 20 or 30 years’ time, they will have to take responsibility for the mess that they find—we have to do something now. If we hand over the shop to them as we found it five years ago, austerity would not mean some managed cuts; it would mean devastating cuts that would be unbelievably painful. We have to take responsibility for the way things are now. I am not in the business of mortgaging the next generation’s future. I want to take responsibility for the problems we have today and not kick the can down the road. This is not austerity-heavy; it is common sense.
National Insurance Contributions (Rate Ceilings) Bill
Lindsay Hoyle Excerpts(9 years, 2 months ago)
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Paul Maynard (Blackpool North and Cleveleys) (Con)
A brief Bill deserves a brief speech. I am pleased to see the shadow Minister back in her place. She checked her phone several times, perhaps concerned that she had been reshuffled by text message for disloyalty. I am glad that she has survived until at least 4 o’clock.
I rise to speak in favour of the entrepreneurs in my constituency. Like my hon. Friend the Member for Bexhill and Battle (Huw Merriman), I have a town that needs regeneration. I have met many of those who have taken advantage of the new enterprise allowance to set up businesses around the kitchen table. The Economic Secretary referred to that in her speech. Whether they are lady funeral directors, stained glass window repairers or supermarket ready meal manufacturers, they all want to grow their businesses from the very smallest roots. To do so, they need three things: confidence, security and certainty. The Bill will give them confidence, security and certainty. My town needs such jobs. We need the Bill. Please get on with it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We now come to the Front-Benchers. With the leave of the House, I call the shadow Minister to speak again.
Finance Bill
Lindsay Hoyle Excerpts(9 years, 2 months ago)
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Barbara Keeley (Worsley and Eccles South) (Lab)
I beg to move amendment 1, page 59, line 19, at end add—
“(6) The Chancellor of the Exchequer shall, within three months of the passing of this Act, undertake, and lay before both Houses of Parliament, a review of the impact of any further rise in the standard rate of insurance premium tax with particular attention to the impact on—
(a) the price charged for insurance policies; and
(b) the take-up of insurance policies”.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to take clause 43 stand part.
Barbara Keeley
The change in the level of insurance premium tax from 6% to 9.5% will have an impact on insurance premiums, and it will mean increased costs for families. Treasury figures show that the increase will have one of the biggest impacts on Government finances of any policy revealed in the summer Budget. By 2021 Ministers will have brought in an extra £8 billion from the measure, a cost that is likely to be passed on by insurance companies to consumers, so as we debate clause 43 and Labour’s amendment I want to ask the Minister to explain the reasons behind the level of this tax rise and to ask whether Ministers have fully considered where the impact of this rise will be felt and which groups will be most affected.
In 2010 the coalition Government announced a similar but much smaller rise in insurance premium tax from 5% to 6%, but this most recent change increases the tax by 58%. I want to ask the Minister for the reasoning behind that scale of change.
A colleague of the Minister in the Lords, Lord Northbrook, has described the insurance premium tax increase as an easy target. Taxes should not be increased just because they are easy targets. Indeed, any decision to increase Government revenue should be undertaken after a robust analysis of the impact the changes will have on individuals and businesses. There are still many questions to be answered about the impacts of this measure on family finances and on the take-up of insurance. So in addition to other questions later, I want to start by asking why the Government have chosen to make such a marked increase in insurance premium tax from 6% to 9.5%, an increase of 58%.