Universal Credit Project Assessment Reviews

Debate between Lord Field of Birkenhead and David Gauke

Tuesday 5th December 2017 Commons Chamber

[Mr Gauke]

I very much agree about the importance of a culture in which problems can be identified and passed up the command chain, with that system understood across the board. Clearly, when that does not happen, something needs to be addressed. When I entered this House in 2005—the right hon. Gentleman was a Minister at the time—we were wrestling with the problems of the tax credit fiasco, which was causing misery for vast numbers of people. If Members want an example of a project that failed because there was not a willingness to identify problems early, that is it.

The Infrastructure and Projects Authority’s policy that review reports remain confidential is founded on the position that an effective and trusted system of assurance in government is in the public interest, and that the premature disclosure of review reports undermines that public interest. Those considerations must be balanced with the desire for transparency and parliamentary scrutiny. In exceptional cases, sharing information with a Select Committee, in confidence, can be appropriate.

The motion refers to a number of reports, many of which date back some years, as my hon. Friend the Member for South Cambridgeshire (Heidi Allen) pointed out. To disclose those papers without subsequent reports showing how well universal credit has progressed would give a partial picture. In line with the motion, I will provide, by the time the House rises for the Christmas recess, the reports directly to the Work and Pensions Committee. Let me point out to the shadow Secretary of State that her motion does not require us to publish these reports or to lay them before the House. Specifically, it says that those reports should be provided to the Committee. In those circumstances, it is acceptable for us to do so. As is customary, I will need to consider redacting any appropriate material, such as the names of junior officials and information that is commercially sensitive. I wish to emphasise that it is the Government’s view that this is an exceptional request that will be agreed to on an exceptional basis, and does not set any precedent for future action. Against that background, I shall provide the reports to the Select Committee on a confidential basis. In those circumstances, I hope and expect that the documents will not be disclosed further.

[Frank Field (Birkenhead) (Lab)]

The Secretary of State has hit on a very important distinction between the motion that we are debating today and the one about Brexit documents. That motion said that the documents should be made available to the Brexit Committee and then laid before the House. Today’s motion does not say that; it says that the reports should be given to the Work and Pension Committee. We are not a Committee of Privy Counsellors. We have never been in a position like this before so, if I catch your eye, Madam Deputy Speaker, I would like to develop this theme, because we are in totally new constitutional waters. The motion, which has now been accepted—we can all go home in a minute, or bring on the next business—is different, and puts us in a different constitutional position than the one that was outlined for the Brexit Committee.

[Mr Gauke]

The right hon. Gentleman is absolutely right. I can only assume that those who tabled the motion worded it carefully. They chose its wording on the basis that it was about providing information to the Work and Pensions Committee. As I have said, I do believe that, in these circumstances and for the reasons that I have set out, the Select Committee will treat this matter confidentially, but he is absolutely right to draw attention to that distinction.

Universal Credit

Debate between Lord Field of Birkenhead and David Gauke

Thursday 23rd November 2017 Commons Chamber

[Mr Gauke]

I am sure that there will be an ongoing debate about the taper, which, as we made clear yesterday, we will continue to keep under review, but we acknowledge that there is a particular issue with the first assessment period and helping people over that period, which is why we made changes to the advances system back in October. I said at the time that we would continue to look at this, and that is why we have announced the package we have.

[Frank Field (Birkenhead) (Lab)]

Will the Secretary of State please commit now to bringing forward the loans scheme and keeping open the jobcentres and helplines due to be closed for eight out of 10 days over Christmas, to prevent any of my constituents from going hungry? May I also congratulate him on applying the financial armlock he learned in the Treasury to his then boss to such good effect?

[Mr Gauke]

I should probably thank the right hon. Gentleman for that comment. Relations between the Treasury and my Department are very good at the moment, which perhaps could not always be said.

Oral Answers to Questions

Debate between Lord Field of Birkenhead and David Gauke

Monday 13th November 2017 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right. Part of the purpose of universal credit is to close the gap between being out of work and being in work. Most jobs are paid monthly, and getting people used to that monthly system is a sensible approach. I also very much welcome the fact that my hon. Friend has visited a jobcentre, and I recommend that other hon. Members do so, to hear how universal credit is operating on the ground. I know that many hon. Members have found the experience to be extremely positive.

[Frank Field (Birkenhead) (Lab)]

I will not ask Government Front Benchers for a fifth time whether I should believe the Secretary of State’s statement that the roll-out of universal credit in Birkenhead will be hunky-dory, or the opinion of the food bank, which says that it will need an extra 10 tonnes of food to prevent people from going hungry—if he cannot abide the word “starving”. We will have a debate on this on Thursday, which Members across the House have signed up to. This will be the first time that Conservative Members will have an opportunity to vote on whether they want to reform universal credit. Will the Secretary of State open that debate, hear it and take the message directly back to Cabinet, please?

[Mr Gauke]

The position that we have made clear for a long time is that we want to ensure that universal credit works. This is a test-and-learn system, and we are always looking at ways in which we can improve it, particularly for that first period. I would say to the right hon. Gentleman and to the House as a whole that universal credit is helping us to address the best way to deal with poverty, which is to ensure that people can get into work. That is the argument that I and my right hon. and hon. Friends will continue to make.

Oral Answers to Questions

Debate between Lord Field of Birkenhead and David Gauke

Monday 9th October 2017 Commons Chamber

[Frank Field (Birkenhead) (Lab)]

Given the Secretary of State’s confidence in the roll-out of universal credit to another 150 Jobcentres Plus, can he give the House a guarantee that none of our constituents will face hunger or near destitution through lack of money over the Christmas period?

[Mr Gauke]

Universal credit is about ensuring that our constituents are in a stronger financial position. That is what we are trying to deliver by enabling them to work and providing the support they need. As I said earlier, if we look at where we want to get to by 2022, 8% of claimants are already on universal credit and by January it will be 10%. The process is gradual and measured, and that is enabling us to learn from the experience and make improvements, which we will continue to do all the time.

Corporate Tax Avoidance

Debate between Lord Field of Birkenhead and David Gauke

Monday 7th January 2013 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I congratulate my hon. Friend the Member for Redcar (Ian Swales) on securing the debate, and I thank him and the other 19 Members who participated— 14 Government Members and five Opposition Members. Time is short, but I will make a few remarks before my hon. Friend concludes the debate. I will begin by putting into context the problem that we face on tax avoidance, and then I will lay out in some detail the actions that the Government are taking. I will also try to respond to some of the concerns that right hon. and hon. Members have raised.

As I am sure all Members will understand, it would not be right for me to discuss individual examples of alleged tax avoidance. I therefore do not intend to respond to accusations made this evening against specific businesses. However, I do want to point out that the vast majority of UK taxpayers, whether they be businesses or individuals, pay the tax that is due on time. They do not try to dodge, avoid or delay paying their tax. Large businesses, which are the subject of our discussion tonight, pay about 60% of all taxes in the UK, or more precisely, they write the cheques. The Government are fully committed to ensuring that everyone contributes to reducing the deficit by paying their fair share of tax, and we are determined to clamp down on the minority who engage in tax avoidance.

As other Members have pointed out, tax avoidance not only damages the public finances but undermines the perception of fairness in the tax system and is anti-competitive, which in turn risks harming genuine investment by those who play by the rules. At a time when we all have to tighten our belts, it is particularly unacceptable for some taxpayers to manipulate the system and act to reduce their tax liability in a way that is contrary to Parliament’s intention. It is for that reason that where HMRC finds tax avoidance, it takes action.

It is important that those who should pay do pay. It is also important that we have a competitive tax system. Our intention is to have the most competitive tax system in the G20. That is the best route to economic prosperity. Foreign direct investment plays an important role in that. It is worth pointing out that approximately half our total corporation tax receipts in 2011-12 that came from large businesses was from foreign-owned companies. The Chancellor recently announced a further cut to the main rate of corporation tax, so that by 2014 it will reach 21%—the lowest it has ever been and the lowest in the G7. Having set a competitive rate, we aim to ensure that all businesses, including multinational companies, pay the right amount of tax by taking action internationally and domestically.

[Mr Frank Field]

Will the Minister give way?

[Mr Gauke]

I am very short of time, but I will give way this once.

[Mr Field]

We all want to see the lowest possible competitive rate, but is it not possible to combine that with denying access to our markets to companies that clearly do not pay it?

[Mr Gauke]

I do not think the right hon. Gentleman sets out a practical approach by proposing that we should deny those companies markets and engage in protectionism. We have to ensure that all businesses pay the tax due under the law in this country.

There are two ways we can look at this: domestically and internationally. Internationally, it is clear that our tax system, as with all other major economies, works within internationally agreed OECD guidelines—we have heard a number of hon. Members make that point. I know that there are concerns about whether the current corporate tax rules adequately capture the profits generated by multinational companies in the jurisdictions where the economic activity is located. We take those concerns seriously. Reform in this area will require concerted international action. This is an issue that all countries face. We need to work with others to develop the appropriate solutions. We are doing just that through the OECD, on the erosion of the tax base and the shifting of profits to lower-tax rate jurisdictions.

Two months ago the Chancellor issued a joint statement with the German Finance Minister calling for concerted international co-operation to strengthen international tax standards. Following that statement, the UK, together with France, offered voluntary contributions, equivalent to €150,000 each, in order to make rapid progress in achieving concrete results. The OECD’s work is vital in helping to promote a better way of dealing with profit shifting and the erosion of the corporate tax base at the global level, and it will be reporting to the G20 Finance Ministers on progress in February. I should also mention that only last week the Prime Minister wrote to G8 leaders calling for international action to tackle tax evasion and aggressive avoidance. He suggested that the issue should be at the heart of the forthcoming summit’s agenda. We agree that more needs to be done in this area internationally. I hope that the fact that the Chancellor and the Prime Minister have intervened on this issue will reassure Members that it is very much a priority for this Government.

As far as domestic action is concerned, we have strengthened HMRC’s capability in this area. It is worth pointing out that since March 2010 HMRC has collected £14.8 billion in additional compliance revenue through its large business service. In particular, £1.5 billion has been raised since 2010 through increased efforts in tackling transfer pricing. We want to build on that success, which is why we have announced additional sums. In the autumn statement we announced a further £77 million in new investment by the end of 2014-15 for HMRC to expand its anti-avoidance and evasion activity. Together with the package we announced in the October 2010 spending review, we expect to see additional yield, rising from £13 billion a year when we came into office to £22 billion a year by the end of 2014-15. Some of the money we announced recently will be focused on tackling tax avoidance by multinationals.

Let me deal quickly with the point about HMRC staff. The point was made that staff numbers had fallen. The big fall, from around 94,000 to 65,000, occurred under the last Government. Yes, there will be a fall in the total number of staff from 65,000 to 55,000 during this Parliament, but the number of staff who deal with tax evasion—the tax inspectors—is going to go up. The number of people working on enforcement and compliance will go up by 2,500, in contrast to the 10,000 reduction that we saw during the last Parliament.

I should also point out HMRC’s success in other areas, including its litigation strategy. Over the past two years, 85% of tax avoidance cases in the courts and tribunals have gone in HMRC’s favour. We have also taken legislative measures to deal with a whole range of corporate tax avoidance arrangements. Indeed, just before Christmas we closed down a further corporate tax avoidance scheme that sought to exploit tax rules to generate artificial loss relief from a property business. HMRC had become aware of the scheme only a week previously.

We are also bringing in a general anti-abuse rule, following the advice of Graham Aaronson’s committee. He is a distinguished tax QC, and his committee comprised a number of distinguished figures from the tax world. They recommended measures that focused on the abusive end of the matter. We believe that that will not have the disadvantages of the proposals suggested by the right hon. Member for Oldham West and Royton (Mr Meacher), which would create uncertainty for ordinary taxpayers. Also, his proposals contain an exception for any arrangements specifically permitted by legislation, and much avoidance is built on that. His proposals would therefore be defective in some respects. I think that we have struck the right balance, and that the concerns expressed by some of my hon. Friends are unfounded. It is right that we should focus on abuse of the system.

Finance Bill

Debate between Lord Field of Birkenhead and David Gauke

Tuesday 3rd July 2012 Commons Chamber

[Mr Gauke]

The hon. Gentleman is absolutely right to say that not just the Church of England is involved. I said earlier, however, that the Church of England had led on behalf of all the churches on this matter. On his second point, we have made the transitional rules more generous for churches that were close to commencing work at the time of the Budget. I obviously cannot comment on the specific case in his constituency without knowing all the details, but I think that he will find that many cases in which plans had reached an advanced stage will benefit from the transitional rules. He mentioned the funding for the scheme. We believe that this is a generous settlement, but we will of course keep such matters under review. He also mentioned bureaucracy. The scheme is organised by the Department for Culture, Media and Sport, but the Treasury will also take a close interest in it. The two Departments have worked together very effectively on this matter, and we are keen to ensure that the scheme works in an adequate way. I would underline the point that the representations that we have received from the churches suggest that they are happy with the arrangements.

[Mr Frank Field (Birkenhead) (Lab)]

The Minister says that the two Departments are now working closely together on the scheme. Was there a similarly close working relationship when the Treasury was thinking up the proposal? Did the DCMS know about the proposal and approve it—before it was modified, of course?

[Mr Gauke]

The right hon. Gentleman is attempting to draw me into dangerous, and perhaps more interesting, territory. All I would say to him is that all decisions are for the Chancellor, although of course the Department for Culture, Media and Sport was involved at an appropriate level.

The Budget proposal for self-storage changed the liability of supplies of facilities for self-storage from exempt to taxable. Following consultation, we planned to avoid creating a competitive advantage for those larger operators with more expensive facilities. These businesses can partially mitigate the impact of the change by using the capital goods scheme to claim back some of the VAT they had previously paid on the purchase of these facilities, whereas smaller businesses with less expensive facilities cannot. We will therefore make a separate provision by statutory instrument to amend the capital goods scheme so that self-storage providers affected by the measure whose individual capital items are worth less than a £250,000 threshold for the scheme can opt into it and have the same input tax recovery benefits as larger providers with capital items that would already qualify for the scheme.

We also propose to ensure that the storage of live animals will remain exempt, as the original proposal might inadvertently have applied VAT to stabling, and we propose to introduce an anti-avoidance provision so that if the storage is used by a third party with the permission of the person who contracts for the storage, it is taxed in the same way as if it were self-storage. This will prevent someone from avoiding taxation by getting a third party to contract with the supplier. We have revised the exclusion for storage facilities provided to persons connected with the supplier so that it is more directly targeted on facilities that are subject to the capital goods scheme. This fine-tuning reflects the benefit of consulting and listening to what respondents say, but it does not undermine the rationale for the measure.

For hairdressers’ chairs, the schedule provides a clearer description of the services typically provided under a chair rental agreement and excludes services that could legitimately be provided with a simple supply of a right over land. The schedule also reflects a change to make it clear that the supply of a whole building to a hairdresser will not become taxable unless it is supplied along with other goods or services.

Finally, regarding the measure to apply VAT to all sports drinks and to clarify the definition of premises for the purposes of determining whether food is consumed on or off the suppliers’ premises, we are proceeding as planned in the Budget.

Finance (No. 3) Bill

Debate between Lord Field of Birkenhead and David Gauke

Monday 4th July 2011 Commons Chamber

[Mr Gauke]

We will make further announcements as and when necessary, but we are publishing much more information on distributional analysis than any previous Government have. It is right to do so, and to take steps to ensure that the House and the whole country can debate such matters with as much information presented in future. A striking contrast can be drawn with regard to one policy—the doubling of the 10p rate—about which the hon. Gentleman and the right hon. Member for Birkenhead (Mr Field) had concerns. It was difficult to obtain any information on that policy’s impact, although we have learned in recent weeks that much of the information about that was available to Ministers at the time.

Amendment 30 seeks to provide a one-off £250 reduction in the tax liability of all public sector employees earning less than £21,000. In the June 2010 Budget, we announced a two-year pay freeze for public sector workers earning a full-time equivalent of £21,000. That is one of the many difficult choices that we have had to make to help put the UK’s public finances back on track, and it does not mean that we do not value the work done throughout the public sector. All Members know that those in the public sector work hard for the benefit of society. However, pay freezes of this sort save jobs. Given that we are having to constrain public spending and given that the fiscal deficit requires cuts, a pay freeze will help to mitigate the effect of those cuts. Because we recognise that the freeze will be hardest on the lowest-paid public sector workers, it was announced in the June Budget that those earning a full-time equivalent of £21,000 or less would receive an uplift of at least £250 in both years of the freeze.

Both the Labour party’s manifesto at the time of the last general election and the 2009 pre-Budget report announced a 1% increase for public sector workers across the board, apart from the armed services. No distinction was made between the low paid and the high paid. Under a Labour Government, none of those earning less than £21,000 a year—including nurses, teaching assistants, police community support officers and hospital porters—would be receiving a £250 increase.

[Mr Frank Field]

What we said at the last general election is not very relevant, because we lost. The other side won, and made a commitment in the Budget. The Chancellor stood at the Dispatch Box where the Minister is standing tonight, and said that 1.7 million low-paid workers in the public sector would receive an increase of £250. What we now want to know is how many are being paid the £250, and, if 1.7 million are not being paid that sum, what steps the Government will take to ensure that they are paid it.

[Mr Gauke]

The policy advocated by the Labour party when they were in government would have resulted in none of these public sector workers receiving £250.

We will ensure that the policy on pay increases for low-paid local government workers is applied across the civil service and to work forces with pay review bodies. That will include civil servants, NHS staff, teachers, members of the armed forces and those working in prisons. Many civil servants, nurses and prison officers, and the armed forces, have already received the £250 increase this year and can expect a further £250 increase next year, but other work forces have responsibility for negotiating their own pay deals. Decisions on the pay of local government work forces are for local government employers, rather than central Government, to negotiate. Provision was made in the local government settlement for local authorities to pay the £250 increase, but the fact remains that the decisions are made by local authorities. We gave them the opportunity to pursue the policy that we are pursuing at national level, but it is ultimately for them to decide how to pay their employees.

[Mr Field]

At the Dispatch Box, the Chancellor said that 1.7 million low-paid workers in the public sector would receive increases of £250 this year and next year. Will the Minister please tell the House how many of those 1.7 million have received the promised sum—promised by the Chancellor, not by me?

[Mr Gauke]

Where it is within the Chancellor’s control because the money is paid through central Government, those low-paid public sector workers will receive the £250. For those who work in local government, which is not within the control of central Government, we have provided local authorities with the funding to be able to meet that policy objective.

--- Later in debate ---

[Mr Gauke]

No. The funding settlement with local authorities was made on the basis that the money would be available for them to pay to low-paid public sector workers, but it is ultimately their decision.

Returning to the amendment of the right hon. Member for Birkenhead, I understand that it is intended to help enforce the Government’s policies, and I am sure he intends to be helpful. However, we do not believe that using the tax system is the right way to address this; we do not think that will be practical. It would add complexity to the tax system, and I therefore urge him to withdraw the amendment, especially as I know he will return to this subject at a later date.

[Mr Frank Field]

rose—

Scotland Bill

Debate between Lord Field of Birkenhead and David Gauke

Tuesday 21st June 2011 Commons Chamber

[Mr Gauke]

Of course, and there are regional variations within all the four nations. The point is that there are strong views on this issue. I am making the case for why it is difficult to address it in the Bill. Reforming the Barnett formula is an entirely separate issue from those we are considering in the Bill, and from the matters that the Calman commission looked at. As I said, the formula does not appear in any legislation as such, and there would be disadvantages in trying to come up with a legislative answer. However, I appreciate that this is an opportunity to debate the matter.

[Mr Frank Field (Birkenhead) (Lab)]

rose—

[Mr Gauke]

I am sure that the right hon. Gentleman will continue this debate.

[Mr Field]

Might the Minister tell the House whether he thinks that the Barnett formula is now fair? If it is not, when do the Government intend to do something about it?

[Mr Gauke]

The Government understand the concerns expressed about the devolved funding arrangements, but we have also made it clear that the priority now must be to reduce the deficit, and any change to the current system and Barnett formula must await the stabilisation of the public finances. The Bill does not rule out or rule in reform of the formula in the future, but we do not believe that now is the right time. A change in the Barnett formula is not the purpose of the Bill, and it would not be appropriate to legislate for it here. As I said, I look forward to this debate, as right hon. and hon. Members will clearly take the opportunity presented by the Bill to express their views on this particular point.