Infrastructure
Nigel Evans Excerpts(11 years, 9 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
I inform the House that the Speaker has selected the amendment in the name of the Prime Minister.
Gordon Birtwistle (Burnley) (LD)
I am grateful to the hon. Lady for giving way. Let me point out to her that spending on PFI schemes amounts to billions and billions of pounds—as I understand it, somewhere in the region of £800 billion—and is totally unaffordable. Is it right to spend money on a hospital—[Interruption.] Opposition Members should listen. Is it right to build a hospital under a PFI scheme whereby at the end of 25 years, we will have paid for it 18 times over? It might have cost £120 million to build, but by the time it is finished it will have cost more than £2 billion. I will not agree to spending money on that basis. We should spend money in the correct manner that is affordable for the people of this country; we should not have to pay for something 18 times over. Would you buy a house and pay for it 18 times over?
Mr Deputy Speaker (Mr Nigel Evans)
That means me. Members should speak through the Chair.
Rachel Reeves
I do not know how the hon. Gentleman bought his house, but when I bought mine, I had a mortgage because I could not afford to buy it outright. That is why schemes such as PFI were introduced. I am not sure what school, hospital or children’s centre in the hon. Gentleman’s constituency he would prefer not to have opened during the last Labour Government. I bet a lot more of those things opened under the last Labour Government than have been opened under this Conservative and Liberal Democrat Government.
The reality is that what the Government are doing is hurting business confidence. The director general of the British Chambers of Commerce has described the Government’s plan for infrastructure as
“hot air, a complete fiction”.
Rachel Reeves
I hope the hon. Gentleman is not suggesting that the Government are not going to be able to make the repayments on their debt. We know that their triple A rating is under threat, so if this is a warning that the Government are planning on not paying their debts and the deficit back, it will be interesting news.
The CBI has warned the Government that
“businesses in Britain are looking for action and we haven’t seen any yet”.
Yesterday, the monthly index published by BDO showed that business confidence hit a 21-year low. That is the lowest level of business confidence since Norman Lamont was Chancellor and sterling was ejected from the exchange rate mechanism on Black Wednesday in 1992. I am sure that right hon. and hon. Gentlemen will remember that day. The Prime Minister certainly does—he was working for the Chancellor at the time. Confidence is now at those low levels again.
It is now clear: business has lost confidence in this Government, who do not have a plan for jobs or growth. It is hardly surprising, then, that the Government are failing to attract the private sector funds they need for their infrastructure investment. It is worth remembering how the Government’s plan to target £20 billion of pension funds for investment is going. Responding to a question from my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks), the Chief Secretary to the Treasury had to tell us that the Government were on course for just a 10th of their original target: £2 billion out of £20 billion raised.
The Government lack the policy framework to attract the long-term investment we need. Changes such as cuts to feed-in tariffs have had a detrimental impact on low-carbon investment. The CBI warned the Government that such measures have been
“damaging to business confidence, with implications not just for immediate investment decisions but for longer-term trust in government policy”.
It is no wonder that, last year, 50 companies, investors and industry bodies wrote to the Chancellor asking him to set a firm decarbonisation target for 2030 to give investors the confidence they needed. On energy policy, the Institution of Engineering and Technology has been clear in saying:
“Short-term uncertainty around UK energy policy…is very unhelpful and has the potential to… delay much-needed investment in all forms of energy infrastructure.”
According to the findings of a poll by KPMG, two thirds of businesses believe that the UK’s energy and water infrastructure is unlikely to get any better because of uncertainty about the policy framework.
From the business community, we hear resounding frustration when it comes to the Government’s infrastructure policy. The Government do not seem to understand that businesses long for certainty when attempting to grow, employ more people and build for the future. Those are the people and businesses that we need to encourage, not put off, and infrastructure is vital to that, but the Government’s ideological decision to cut infrastructure investment further and faster is hampering confidence rather than nurturing it.
Small businesses, the engines of growth, are still waiting for the Government to roll out universal broadband. The Government abandoned the commitment from the last Labour Government to provide broadband for virtually every household by 2012. When business needs this Government, they are nowhere to be found.
Fundamentally, the Government fail to understand the need for a comprehensive and long-term plan to build Britain’s infrastructure for the 21st century. That is why the Labour party has commissioned Sir John Armitt, chair of the Olympic Delivery Authority, to consider how long-term infrastructure decision making, planning, delivery and finance can be radically improved. The Olympics taught us what we could achieve together as one nation. With the right leadership and the right investment, and by building consensus around the long-term projects that are essential for our energy, transport and housing needs, we can compete globally, with a national infrastructure that is fit for the 21st century. Labour is therefore making the case for a British investment bank, which would help to support long-term finance for British businesses so that they could take risks and grow. That is especially urgent given that net lending to businesses has fallen by a staggering £13.5 billion over the last year.
Investing in infrastructure is about more than the tarmac on our roads or the bricks that make up our schools. It is about creating skilled jobs for our youngsters. It is about supporting the entrepreneurs who want to export and grow their businesses. It is about ensuring we can grow and operate across the globe. It is about attracting investment from abroad. It is about being ambitious in the face of challenges, and attempting to build a better country for the next generation.
The Prime Minister said in his new year address:
“This is, quite simply, a government in a hurry. And there’s a reason for that. Britain is in a global race to succeed today.”
Whichever way we look at it, however, this Government do not seem to be in a hurry to invest in our country’s infrastructure. Indeed, as I said earlier, they are spending £12.8 billion less on capital investment than the amount specified in the plans that they inherited from the last Government, which amounts to an 8% cut. A Government in a hurry? Hardly. Inertia is the watchword of this Government, at a time when what we need is action.
When other countries are investing in their infrastructure, aware of the benefits, this Government dither. On infrastructure, as on so much else, the country needs decisive leadership. Instead, we get incompetence, delay and cuts. It is time that we changed course.
Mr Deputy Speaker (Mr Nigel Evans)
Before I call the Financial Secretary to the Treasury, I should inform the House that a speaking time limit for Back Benchers will be announced when he has sat down. I advise Members not to think much beyond eight minutes for the moment.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I inform Members that there is an eight-minute limit on speeches.
Andy Sawford (Corby) (Lab/Co-op)
Thank you, Mr Deputy Speaker, for the opportunity to speak in this important debate. I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) on bringing forward this debate on what the Opposition know to be an incredibly important and urgent issue.
I disagree fundamentally with the hon. Member for St Albans (Mrs Main) when she says that we need to go slowly in bringing forward infrastructure in this country. Given the desperate state of our economy and the number of people who are desperately looking for work, we need a great deal of urgency from the Government, particularly given their appalling record over the past two and a half years.
It was interesting that the Financial Secretary chose to speak mainly about policies from the past. Most of his speech was actually about the last century. Some of the people who are now suffering, such as those who want school places in my constituency while the Government are failing to bring forward infrastructure investment, were not even born at the time of the decisions that he talked about.
The Financial Secretary took on the former Deputy Prime Minister, John Prescott, in particular. I was at the opening of the new St Pancras station when John Prescott was praised by Lord Heseltine for his fantastic contribution to ensuring that the channel tunnel rail link went ahead and that that fantastic building was saved for the nation. The many people who arrived at that station ahead of the Olympics saw what we can do in this country when we commit ourselves to major infrastructure projects. I agree with the CBI and the many other people, including some of the economists who previously endorsed this Government’s plans, who say that this Government lack the political will to take forward major infrastructure projects.
When people get on the train at St Pancras, which John Prescott and the last Labour Government did so much to make possible, they can now come to Corby and see the new railway station that has been built there. If the Minister tells any one of the commuters or the people who use that line for leisure day in and day out that the last Labour Government did not do enough to improve rail services in my constituency, they will laugh him out of town on the next train.
We want to do more and to go further. We want to have northbound routes on that railway line. The other week, the Government made an announcement that was typical of their infrastructure announcements. They said that they were going to electrify the midland main line with £1 billion of expenditure. However, the figure was exactly the same as the amount of money they disastrously took out of the plans for infrastructure spending to which the previous Government had committed in this Parliament. They give us jam tomorrow.
Earlier, the Economic Secretary whispered to the Financial Secretary about the improvement to the A43 in my constituency. Ministers talk about that proudly, but nobody was fooled when that announcement was made—it was just weeks before a by-election. I was surprised there was no announcement today of an Eastleigh bypass or orbital route, a south coast Hampshire link road or some other such potential bribe. Perhaps the coalition parties cannot agree on what appropriate bribe to give.
Labour can give hope to the people of Eastleigh because we have a plan—a five-point plan for jobs and growth. We have talked—[Interruption.] You can laugh.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I think the hon. Gentleman meant to say, “The Financial Secretary can laugh.”
Andy Sawford
Some young people from my constituency were here yesterday to learn about parliamentary etiquette —I should have taken more tips, Mr Deputy Speaker. If the Financial Secretary had laughed in front of those young people when I talked about the desperate need to invest in jobs and growth in this country, they would have given him very little credit indeed.
There is a fanciful picture of how the Labour Government did not invest in infrastructure, but hon. Members should come to Corby and east Northamptonshire and drive past the schools that were built there, such as the brand-new Kingswood school, which is a fantastic facility. My nieces get a fantastic education at the Corby business academy—[Interruption.] The Economic Secretary says that we will pay for those projects, but a combination of funding from the public and private sector—[Interruption.] He should listen to bodies such as the Monetary Policy Committee, which says that we need to find ways of investing in infrastructure in this country.
Corporate Tax Avoidance
Nigel Evans Excerpts(11 years, 10 months ago)
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Mr Gibb
That is why this issue is so important. It is not just about the corporate tax base, which is hugely important, but about the competitiveness of British-based businesses.
Another thing that I found odd about the Amazon structure was that the accounts filed at Companies House report that the company has 2,265 employees, which is vastly different from the 15,000 employees that Andrew Cecil told the Public Accounts Committee Amazon employs in the UK. The other strange thing about Amazon’s group structure is that even the Luxembourg operation, with its €9 billion turnover, appears to have made a post-tax profit of just €20 million.
As we have seen with Starbucks and Google, profits can be siphoned off from individual jurisdictions by payments for intellectual property rights through royalties or technical fees. Starbucks pays a royalty of 6% of its turnover to its company in the Netherlands. Google also pays for the use of its technology. Although that technology was developed in California, the rights to use it outside the USA are held in Bermuda.
Much of this area of law is governed by a network of double tax treaties, of which the UK has signed more than 100. They are based on a model double tax convention that was agreed at the OECD and have been highly effective in boosting worldwide trade and overseas investment over the decades. Britain benefits hugely from that network of treaties. We have £10.9 trillion of investments abroad, which generated £188 billion of income in 2011. The Government are therefore right to want to tackle the problem of corporate tax avoidance through international negotiation. As the Prime Minister wrote in his letter to G8 leaders on 2 January:
“in a globalised world, no one country can, on its own, effectively tackle tax evasion and aggressive avoidance. But as a group of eight major economies together we have an opportunity to galvanise collective international action.”
One such action is the OECD’s study into the transfer pricing aspects of intangibles. In its discussion draft, snappily entitled “Revision of the Special Considerations for Intangibles in Chapter VI of the OECD Transfer Pricing Guidelines and Related Provisions”, published in June last year, the OECD concluded:
“It should be emphasized that not all intangibles deserve separate compensation in all circumstances, and not all intangibles give rise to premium returns in all circumstances.”
In other words, the OECD is coming to the view that the huge royalty payments that some international groups make their overseas subsidiaries pay to their home country or to tax havens may no longer be allowable against tax in the overseas jurisdictions. However, the OECD, by necessity, moves slowly. Speedier action could be taken by the UK tax authorities by speeding up transfer pricing inquiries. It is therefore welcome that the Chancellor has allocated additional funding to HMRC to do that. HMRC could also take powers to require companies to disclose in advance all international connected party payments and to supply the associated documentation. There could be tougher penalties when a company’s tax return is wrong because of over-aggressive transfer pricing.
I conclude by touching on a wider issue relating to corporate tax avoidance: the ethics of companies and their boardrooms. In our everyday lives, we are all governed by a sense of morality, not just by law and regulation. Corporations are artificially created legal personalities. The morality of a corporation is determined by its board—by both executive and non-executive directors. It is no good for individual companies or for free market capitalism, which I support passionately, if directors interpret their role too narrowly. Too often, people who sit on company boards fail to ask the simple and straightforward question that governs moral behaviour: is this the right thing for us to do? Too often, directors seem to take the view that their fiduciary duty as directors stops at the maximisation of shareholder value, but section 172 of the Companies Act 2006 makes it clear that the duty of a director to promote the success of the company must be subject to a number of wider considerations including
“the desirability of the company maintaining a reputation for high standards of business conduct”.
I question whether the directors, including the non-executive directors, of the three companies so ably questioned by the PAC were fulfilling that duty.
Action needs to be taken to ensure that the corporate tax contribution of a multinational to a nation’s Exchequer is broadly consistent with the level of economic activity in that jurisdiction. We need to ensure that that action does not hamper world trade: it must be multilateral, but it needs to be swift. There are measures that HMRC can take in the meantime to ensure that it has the intellectual resources to match those of the international accounting firms. There are also questions that the boards of corporations need to take seriously as business leaders and members of society.
Financial Services Bill
Nigel Evans Excerpts(11 years, 11 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203. If the House agrees to them, I shall ensure that the appropriate entry is made in the Journal.
Clause 1
Deputy Governors
The Financial Secretary to the Treasury (Greg Clark)
I beg to move, That this House agrees with Lords amendment 1.
Mr Deputy Speaker
With this it will be convenient to consider the following:
Lords amendment 2.
Lords amendment 3, and amendments (a) and (b) thereto.
Lords amendments 4 to 15.
Lords amendment 16, and amendment (a) thereto.
Lords amendments 17 to 21 and 148 to 178.
Greg Clark
It is a pleasure to be muscling in at this late stage of our proceedings on the Bill, but I feel it is a bit of a cheek to do so given that many Members have laboured many hours over these clauses in Committee—
Public Service Pensions Bill
Nigel Evans Excerpts(11 years, 11 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. This debate will finish at 7 pm, so short contributions will allow more Members to get in.
Income Tax
Nigel Evans Excerpts(11 years, 12 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. There is a 10-minute limit on Back-Bench speeches. Please observe the convention of the maiden speech. Croeso, Stephen Doughty.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The debate will finish at about 4 pm. So that as many speakers as possible can be accommodated, the time limit is being reduced to five minutes.
Harriett Baldwin
I think that I have already taken two interventions, and I have only a minute and a half, unfortunately.
The Government have reduced the number of ways in which people on high incomes can reduce their taxable earnings. The Opposition opposed measures to reduce the amount people could put into their pension fund from more than £250,000 to £50,000. I also voted for the abolition of disguised remuneration, which was quite rampant under the previous Government. That also serves to limit the ways in which people on high incomes can reduce the amount of income tax that they pay.
The relationship between the rate of income tax and the amount of revenue raised by the Chancellor is non-linear. Between 0% and 100% there is a curve, and we need to agree about the optimal point on it—the point where the Treasury can get the most revenue from those at the highest end of the income spectrum. I suspect that 45p will be a lot closer to that optimal rate than 50p was.
The Government are focusing on tax cuts for those who are on the lowest incomes, lifting them out of income tax, and ending this tax cull on millionaires.
Mr Meacher
I believe that second or third homes—and all other non-primary homes—should incur a higher rate of tax. I never supported the discount given for second homes, which has now been raised to a level nearly equal to that for first homes, and there is a case for the rate for empty homes being raised above that.
As I was saying, HMRC’s report shows that the loss will be £3 billion a year, as opposed to the sum that the Exchequer Secretary kept on talking about today: the £100 million that Treasury Ministers signed off originally, on the basis of arcane taxable income elasticity calculations, about which the Government’s own Office for Budget Responsibility said there was huge uncertainty.
A table given in Hansard on 25 April this year, at column 898, is also interesting. It shows that 80% of those earning more than £1 million paid more than 40% in tax. In other words, tens of thousands of people were—and are—paying the 50p tax rate. They were unable to dodge it. That is an important point, because it serves to destroy the Government’s argument that the 50p rate is a very inefficient method of raising tax revenue and that its abolition will have a negligible effect. I think it will have a very significant effect.
The Exchequer Secretary’s other argument in support of cutting the 50p rate was the old Thatcherite canard—which he stated repeatedly in his speech—that we should not tax the wealthy more because we depend on them for our future. That is the old trickle-down theory. However, we know that the opposite is, in fact, the case. Over the past 30 years, there has been a steady trickle-up effect. There has been a ballooning of inequality, with most middle England incomes having stagnated. That would not be so bad if the trickle-up effect made us more competitive.
The fact is that since 1987, when the top rate went down from 83% to 40%, we have not had a surplus on our current account in the balance of payments for the past 35 years. Our share of world trade was 6.5% in 1970, but it has dropped by two thirds to just 2.3% and our deficit on traded goods last year was £100 billion. That is a monument of uncompetitiveness.
Not only did the Chancellor originally impose £18 billion cuts on the poorest families in the country, but he is now proposing a further £10 billion of cuts to fill the gap left by his failed deficit-cutting policies. The housing benefit cuts that are coming in next April will remove thousands of families across the country from their homes because they simply will not be able to pay the rent. The disability living allowance cuts will leave thousands of disabled people housebound. Atos is cutting a swathe through thousands on incapacity benefit who simply cannot get a job. The poor are being punished for what they did not do, and the rich, who have a great deal to answer for, are almost getting off unscathed.
The second reason for keeping the 50p rate is that the very rich are in a far better position at this time to contribute to meeting Britain’s needs. According to The Sunday Times rich list published this April, the richest 1,000 people—a tiny group who make up 0.003% of the adult population—racked up gains in the past three years of austerity of £155 billion. If those gains were charged to capital gains tax, about £40 billion would be raised. Perhaps the real figure would be less and only £20 billion or £30 billion would be raised, but if it were well invested, it would be enough to kick-start the economy and begin to reduce the deficit in a way that we need to do—by real growth.
The third reason for keeping the 50p rate is the real anger building up across the country about what rich individuals and rich multinationals are getting away with on tax avoidance. I return to the Exchequer Secretary’s table, because it shows that 9% of those earning more than £10 million, which is more than £200,000 a week, paid tax at a lower rate than their cleaning ladies—
Small Charitable Donations Bill
Nigel Evans Excerpts(12 years ago)
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Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss the following:
New clause 2—Post-legislative review—
‘The Government shall, within 24 months of this Act coming into force, undertake a review of the operation and administration of the Gift Aid Small Donations Scheme and lay a report of the review before the House of Commons.’.
New clause 3—Complementary gift aid for small donations to small charities—
‘(1) Smaller charities, community amateur sports clubs or recently established charities, which do not meet the eligibility criteria in section (1) shall be eligible to apply to HM Revenue and Customs for complementary gift aid for small donations.
(2) “Small donations” for the purposes of complementary gift aid shall be as provided for in section 3 and the Schedule.
(3) That maximum donations limit for complementary gift aid shall be £5,000.
(4) The “connected charities” conditions in sections 4 and 5 shall also apply for charities making claims for complementary gift aid for small donations.
(5)
(a) HM Revenue and Customs may stipulate the supporting verification it may require from relevant agencies or authorities or designated persons in respect of any claims for complementary gift aid for small donations to small charities;
(b) such agencies, authorities or designated persons may include charity commissions, local government officers, police or police and crime commissioners, members of relevant professional bodies or others designated by devolved administrations in agreement with HM Revenue and Customs for these purposes.
(6) This section shall come into force on 6 April 2014.’.
This would provide for a separate scheme of supporting payments from HM Revenue and Customs, in the spirit of gift aid, to smaller or newer charities including those formed in response to a particular event.
Amendment 9, in clause 1, page 2, line 7, leave out subsection (6) and insert—
‘(6) The “specified amount” for a charity for a tax year is (subject to section 2(1))—
(a) £5,000 for a charity eligible for the full specified amount; or
(b) £2,000 for a charity eligible for the reduced specified amount.’.
This amendment is consequential on amendment 8.
Amendment 8, in clause 2, page 2, line 11, leave out subsection (1) and insert—
‘(1) A charity is an eligible charity for a tax year if—
(a) it has made a successful gift aid exemption claim in at least three of the previous seven years. In such cases, a charity will be eligible for the full specified amount; or
(b) it has made successful gift aid exemption claim in the previous year. In such cases, a charity will be eligible for the reduced specified amount.
This amendment introduces a probationary period for charities that do not have the claims history required in subsection (1)(a) of this clause. It allows them to benefit from a reduced specified amount until a claims history has been established. This also removes the requirement for a start-up period.
Government amendment 24.
Amendment 32, page 2, line 14, at end insert ‘or
(c) the charity is a “small charity”;
(d) the charity has been established for a specific event or project which has concluded.’.
This amendment extends the meaning of eligible charity to small charities and those established for specific events or projects.
Government amendments 25 and 26.
Amendment 10, page 2, line 26, leave out paragraph (a).
This amendment is consequential on amendment 8.
Government amendment 27.
Amendment 11, in clause 4, page 3, line 9, leave out paragraph (b) and insert—
‘(b) are eligible for the same rate of specified amount (subject to section 2(1)) for the tax year.’.
This amendment is consequential on amendment 8.
Amendment 12, page 3, line 15, leave out paragraph (a) and insert—
‘(a) the specified amount (subject to section 2(1)), divided by’.
This amendment is consequential on amendment 8.
Amendment 13, in clause 6, page 4, line 41, leave out paragraph (b) and insert—
‘(b) if less, the specified amount (subject to section 2(1))’.
This amendment is consequential on amendment 8.
Amendment 14, page 4, line 45, leave out paragraph (b) and insert—
‘(b) if less, the specified amount (subject to section 2(1))’.
This amendment is consequential on amendment 8.
Government amendments 28 and 29.
Amendment 15, in clause 9, page 6, line 20, leave out paragraph (a) and insert—
‘(a) two or more charities (“connected eligible charities”) are connected with one another in a tax year and are charities eligible for the same rate of the specified amount (subject to section 2(1)) for the tax year, and’.
This amendment is consequential on amendment 8.
Amendment 16, page 6, line 37, leave out paragraph (b) and insert—
‘(b) if less, the specified amount (subject to section 2(1))’.
This amendment is consequential on amendment 8.
Amendment 21, page 7, line 10, at end add—
‘(8) The Treasury must, within 24 months of this Act coming into force, prepare a report assessing the impact of—
(a) the connected charities provisions; and
(b) the community buildings provisions
on the ability of charities to benefit from the Gift Aid Small Donations Scheme and lay it before the House of Commons.’.
Government amendment 31.
Amendment 33, in clause 18, page 12, line 20, at end insert—
‘“small charity” means a charity whose gross income for a tax year is no more than £25,000.’.
This amendment defines a small charity as one whose gross income for a tax year is no more than £25,000. This figure is consistent with that given for lower-income charities in the Charities Act 2011 and the Office of the Scottish Charity Regulator’s Routine Monitoring Policy.
Cathy Jamieson
I look forward to further interesting debates on the proposals—we had interesting debates both on Second Reading and in Committee. This large group includes significant proposals, although a number are consequential on acceptance of the main amendments.
We discussed a number of the significant proposals on Second Reading and in Committee. They follow a pattern. I thank the Minister—it might be one of the few times I do so—for listening to some, but not all, of the concerns raised in Committee. At the time, it was not always clear that he would introduce amendments or deal with other things, but I thank him for listening. Crucially for the charities, if not for the Opposition, he has responded to points that the charitable sector raised with us.
Today we have once again heard concerns from the wider charity sector about the reported deficit of more than £300 million in 2011, which it has brought to public attention. That shows the current difficulty of getting donations and income into charities while at the same time they are facing increased burdens on the services they provide—not that the sector sees its services as burdens. Hopefully, more charities will benefit from the Bill now than would have benefited from it when we debated it in pre-legislative scrutiny, on Second Reading and in Committee.
We had long debates in Committee on some clauses and amendments. I am sure the House will be relieved to know that I have no wish to repeat them verbatim—that would be unhelpful—but it is worth noting that the same issues came up in Committee time and again, which suggested that further work needed to be done to amend the Bill. We also need to continue to scrutinise what the Bill will do in the light of subsequent amendments.
There is an extensive list of proposals in the group, and I want to refer to a number of them. It would be wise of me to put on record that we have tabled new clauses 1 and 2 because they would deal with a number of concerns that the Opposition and the charity sector have raised throughout the Bill’s progress. Perhaps the Government have acknowledged—in their amendments in Committee and on Report—that the original Bill was not drafted as tightly as it might have been, or in a way that ensured as much fairness and equity as possible.
It is therefore right and proper that we return to the issue of formally reviewing the Bill after a two-year period. The Minister said many times in Committee that he was willing to look again at the measures and acknowledged that he wished to amend the Bill—we will discuss that later. However, when the Chancellor first announced the scheme, he said he wanted it to deliver
“gift aid on the contents of the collecting tin and the street bucket”—[Official Report, 23 March 2011; Vol. 525, c. 962.]
He also pledged that the reforms would be “bureaucracy-lite”. That theme has run throughout our discussions.
The Bill will doubtless benefit a number of charities and community amateur sports clubs, which is welcome, but the Government need to reassure charities that they are committed to making the Bill the best it can be. Given that many of the concerns that have been outlined will not result in changes to the Bill before Royal Assent, we can know how well the scheme is performing in practice only if there is a formal review. In any event, it would be good practice to review legislation after a period of its operation. That theme ran through a number of proposals that the Opposition tabled in Committee.
The Minister will note that we are trying in new clauses 1 and 2 to add extra detail to the report that we originally asked for in Committee. Let me say a few words about why a detailed report is so important. I do not want to go through all the arguments again, but we heard in Committee that anywhere between a third and a fifth of charities would benefit as a result of both the strict eligibility criteria and the community buildings and connected charities provisions, which we have debated extensively at various stages. The corollary to that is that a significant number of charities will be unable to benefit. The scheme could therefore be divisive, favouring some types of charities over others. That theme also ran through the debate.
Attempting to solve one problem often produced unintended consequences and difficulties—I am thinking of our debates on churches, and on large versus small charities—and that is why we ask in the new clauses for a breakdown and a review that gives more detail. That is important. New clause 1 mentions registered charities, exempt and excepted charities, and charities in different regions. That would mean that we can fully understand the impact of the scheme once it is in operation and redress any inequalities as soon as possible.
We spoke extensively in Committee about the complexity of the Bill. As we heard, it is estimated that 160 pages of guidance on Her Majesty’s Revenue and Customs website will be needed to explain it. There are 80 pages on registering for gift aid, so perhaps we can agree that the Bill is more complex than we would like it to be. Not just the Opposition and the charity sector understood that and raised such particulars; the Minister, in the sixth sitting of the Bill Committee on 23 October, admitted that the rules were complex in response to one of my hon. Friends. He said:
“I readily admit that this part of the Bill is complex and that we do not know exactly how it will work until it comes into practice.”––[Official Report, Small Charitable Donations Public Bill Committee, 23 October 2012; c. 207.]
In another Committee sitting, he said that
“the very nature of trying to capture issues such as connectivity—whether it is here where we are dealing with charity, or in other laws where we are dealing with trusts—is complex.”
He has also said that:
“Clearly HMRC is like any organisation; mistakes can always be found.”––[Official Report, Small Charitable Donations Public Bill Committee, 25 October 2012; c. 223-5.]
I make those points simply to reinforce the rationale for building into the process a formal review, because of the nature and complexity of the Bill and the amount of guidance that will be required. At one point in Committee, I said that if a charity had £1 for every word of guidance needed, there would be a fairly significant donation to good causes. It is important that the Bill requires a formal review, so that we can understand the provisions and ensure that we keep tabs on the costs of the scheme.
In the Minister’s deliberations in Committee, he often spoke of having to be a good guardian of the public purse. I would have thought that it would therefore be only right and proper for the Government to commit formally to reviewing the costs of the scheme after an appropriate period—reviewing the spending, because the Minister said that as many charities as were eligible would be able to take part in the scheme, and to ensure that the money was equitably distributed, identifying any problems in the regions of the different nations that make up the UK.
There are a number of concerns about the data on which we begin the process. The Minister was good enough to write to the Opposition to answer a number of the questions we raised in advance of the debate. He mentions in his letter amending the matching rate; amending the eligibility period to two years; introducing a power to amend the eligibility criteria in future; and changing the powers in some of the clauses. He goes on to give some information about organisations that can claim gift aid but are not covered by Charity Commission data. He gives figures, and that is helpful, although—as is often the case in these scenarios—the answers to questions immediately prompt a series of other questions. Some of the responses that we have subsequently had from the charity sector suggest confusion in some areas, and I hope that the Minister will be able to clear that up. He could also help us to establish that baseline from which the success or otherwise of the scheme could be judged in the future.
For example, in the Minister’s letter he suggests that 60% of the organisations claiming gift aid in 2009-10 were registered charities. I am not entirely sure what that 60% represents. Was that 60% of the 68,357 charities to which gift aid repayments were made in 2009-10? That figure comes from HMRC’s own release. If that is the case, it would suggest that just over 41,000 registered charities were claiming gift aid in that year, which of course means that some 40% of the total were claiming other types. It would be helpful if the Minister could clarify the point and reassure us.
The Minister also indicates in his letter that HMRC does not hold data on the number of charities making gift aid claims. That is a bit confusing because HMRC has been able to provide some statistics and figures, so it seems that it does hold some underlying data, if perhaps not all of the data that we have sought. It would be helpful to have some clarity on that point. Does HMRC not hold up-to-date data on the number of registered charities or have we somehow misunderstood the Minister’s letter? If so, the charitable sector is saying that it too could have misunderstood, and that does not bode well for good communications.
It would be helpful if we were able to ensure that we have such provision in the Bill. As we know, Ministers come and Ministers go. This Minister is relatively new in post and it is good to see that he is still here to reap the benefits and take the plaudits when the Bill passes—as it no doubt will—but another Minister may come along in due course who may not have paid quite so much attention to the Bill and perhaps has not fully appreciated the amount of attention to detail from this Minister and the commitments that he made in Committee. For that reason, it would be helpful to have something on the face of the Bill, as outlined in new clauses 1 and 2.
I fully appreciate the fact that the Minister has tabled some amendments, to which he will speak in due course. Depending on what he has to say, those amendments may make some of the amendments that we have tabled superfluous or redundant, but it is important to place on record our reasons for tabling them.
A whole series of consequential amendments flow from amendments 8 and 9, which provide for a sort of probationary period for charities before they qualify. The Minister will no doubt already be thinking that his amendments on the claims history would give more benefits to some charities than our amendments. That may well be the case, but the counter-argument would be that under our amendments charities would be able to benefit sooner.
The Minister will also remember that in Committee we tabled several amendments pushing him to reconsider various aspects of clause 2. We did that because the sector essentially felt that the three-year history of successful gift aid claims and the requirement that charities must have been in existence for at least three complete tax years before they could benefit from the scheme were overly onerous and out of proportion to any risk of fraud. The Government have tabled some amendments in this area and I take that as a sign that they have listened to our concerns and taken steps in the right direction.
Banking Union and Economic and Monetary Union
Nigel Evans Excerpts(12 years ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. Before I call the shadow Minister, let me remind the House that the debate is time-limited and will end at 6.29 pm. When the shadow Minister sits down, I will announce the time limit to ensure that all Members who have indicated that they wish to speak get in.
Mr Deputy Speaker (Mr Nigel Evans)
Order. We will start with a six-minute limit, but it will have to be lowered. I call Mr Cash to move his amendment.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The time limit has been reduced to five minutes.
Mr Brian Binley (Northampton South) (Con)
I remember well those long-gone days when we were told that monetary union would bring strength to the EU, be enduring and serve to bring our economies together. By golly, how time does fly, and how truth changes the vision. Recent experience has shown that political ambitions exceeded economic reality, and fault lines were built into the single currency from the start. Structures have been put to the test and, quite frankly, been found wanting.
The problems facing the euro might not have started in financial services, but the crisis has certainly highlighted those fundamental flaws. Sovereign debt might not be limited to the eurozone, but its constraints within the economic and monetary union exacerbated the crisis. Unless Europe gets to grips with those problems, the entire project could disintegrate before our very eyes. That is the situation we are facing. We are debating a desperate attempt to apply sticking plaster to a serious wound. The flaw is inherent; the mistake already made. Membership of the single currency was extended way beyond that initially envisaged, and therein lies the fault, which is not dealt with by any of the measures proposed today. Banking union may sound like a measured response, but the creation of a European banking union is a world away from a co-ordinated international response. President Barroso revealed his agenda in his “State of the Union” speech, raising the issue of banking union in the context of a push towards a federal European state. That is the truth of the matter.
Our first priority must be to resist any financial transaction tax. That is not a new idea; in 1984, Sweden introduced a 0.5% tax on the purchase or sale of shares. By 1990, 30% of all Swedish equity trading had moved offshore—more than half of it to London—and the volume of bond trading had declined by 85%. That is the damage that a financial transactions tax can do to this country. It is vital that the Government have the courage to resist it.
Will the Minister expand on the references to fiscal probity that allow for spending on social fairness? Is that a get-out clause for grossly indebted Governments who want to keep spending they do not have? It sounds very like it to me.
The report on EMU accepts that public opinion is key, but that is another way to justify spending taxpayers’ money on propaganda. Our Government have stopped the money-go-round in local government and quangos. It would be totally inconsistent to allow Eurocrats to deploy hard-earned taxpayers’ money to propagate grand visions that have already proved to be failures.
Earlier comments on the document made it clear that fiscal integration is about a continued movement to a federal Europe. I could quote page after page, but I will not bore the House. The truth of the matter is that we need to be sure that our Government’s promises to us are absolutely watertight, fast and hard-held. If they are not, the House will be doing a massive disservice to our children and grandchildren. That is what this measure is about.
I noticed a slight smile on the face of the Minister when I made a point about social well-being. If he looks into it a little more, he might begin to agree with me. If I had the time, I would explain.
Finally, as my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) said, we need to take this opportunity as a base to renegotiate—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am calling the wind-up at 6.24 and we have two speakers left.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I call Mr John Baron, and I ask him to sit down no later than 6.24 pm.
Mr John Baron (Basildon and Billericay) (Con)
Like many other Members, particularly on the Government Benches, I have a healthy respect for the Ministers sitting on the Front Bench this evening—the Financial Secretary to the Treasury, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) and the Minister for Europe, my right hon. Friend the Member for Aylesbury (Mr Lidington)—but I believe that they are trying to defend the indefensible. I find it hard to understand how a Government who are prepared to use the veto, and who have used it in defence of City interests, can be prepared, by passing these regulations unamended, to enter negotiations without being able to assure the House that cast-iron guarantees are in place to ensure that qualified majority voting will not be allowed adversely to affect the City.
I have asked the Minister at the Dispatch Box where those concrete guarantees are. Unfortunately, I have not heard anything to convince me that they actually exist. The idea that the European Central Bank would not be allowed to overrule or override non-members of the eurozone is, I am afraid, not a strong enough guarantee. I do not see where that stands up, particularly given that the legal opinion that has been sought and confirmed brings that sort of red line very much into dispute. There is no guarantee there at all. I very much look forward to hearing what the Minister has to say about what other concrete guarantees exist in defence of the City. Going into negotiations or allowing these regulations to pass without a clear idea of what the guarantees are could, I suggest, turn out to be a fool’s errand.
We all know how the eurozone has got into this mess. The eurozone went for monetary union, courtesy of the single currency, but we all know that there cannot be monetary union without fiscal union, so now it is playing catch-up. Easy credit and easy money have led to Governments borrowing too much, and the eurozone is trying to sort out this mess.
I have to say to the Minister, if he is listening, that having just returned from Germany with the Foreign Affairs Committee and having asked about the possible solution, I know that fiscal union or fiscal compact is definitely on the table—despite the fact that most members of the fiscal compact that is coming into effect next year have already broken the parameters of the financial limits set. The universal answer, whether one spoke to politicians of the left or the right or to trade unions, businesses or lobby groups, was more integration and more political union in order to make the fiscal compact work. We are on a collision course with the proposals that are now coming out of the eurozone.
My suggestion is that that is fine: let the eurozone members get on with it; we wish them well in their endeavour. I doubt whether it will succeed, because the economics do not stand up and time does not allow any further exploration. Let them proceed, but my concern as they do proceed along that journey is what damage they will do to our interests. My deep concern is that, if we are not careful, we are going to walk into negotiations without having the ability to call upon cast-iron guarantees if they are needed, and that our interests will be adversely affected as a result.
We all accept that in this country we perhaps need to rebalance the economy somewhat and to get manufacturing up. We cannot, however, ignore the importance of the City to our economy. We have been prepared to use the veto in the past, and it makes no sense for the Government’s proposals to proceed without those cast-iron guarantees in place. There is little doubt that if we enter into negotiations without those safeguards in place, we will stand a real risk of allowing others adversely to affect the City’s interests and, in the end, our prosperity as well.
I look to hear from the Minister what those concrete guarantees are. If, as I believe, they are not forthcoming, I will have no hesitation, having put my name to the amendment of my hon. Friend the Member for Stone (Mr Cash), in supporting him in the Lobby—[Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
I am grateful to the Minister for agreeing to cut back his winding-up speech to just five minutes so that every Back Bencher who wanted to could participate in the debate.
Air Passenger Duty
Nigel Evans Excerpts(12 years ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. The time limit is being reduced to seven minutes.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To accommodate the remaining Members, I am shaving a minute more off the time. The limit is now six minutes.
Naomi Long (Belfast East) (Alliance)
I am pleased to participate in today’s debate. I am a member of the Northern Ireland Affairs Committee, which has spent some considerable time considering this issue, and I am sure that more of my Committee colleagues would have been here today had they not been in Dublin on an official visit. I also congratulate the hon. Member for Witham (Priti Patel) on bringing this matter to the Floor of the House.
I am committed to rebalancing the Northern Ireland economy from its current over-reliance on the public sector, but I believe that that must primarily be achieved by growing the private sector rather than cutting the public sector, and the current APD regime is a significant obstacle to that agenda. APD is a commercial challenge to Northern Ireland business and it conflicts with the positive measures being taken to boost tourism and related employment, and to encourage foreign direct investment. It adds to the cost of indigenous businesses, particularly those seeking to grow their export market. The Committee received evidence of that just last week from a large fish processor in Northern Ireland now exporting to the far east but finding APD a huge burden on business. At best, it adds to cost; at worst, it could jeopardise connectivity between Northern Ireland and other UK and international markets.
Although APD was originally relatively affordable, it has increased significantly, particularly on long-haul flights. The increases have been very steep since 2007—up to 260% for short-haul flights—and between 2008 and 2011, for example, the number of passengers carried by Virgin Atlantic decreased by 7.7%, but the amount of APD paid by its passengers increased by more than 45.5%.
Members will be aware that this is an issue I have raised frequently in the House. I apologise if what I say today has been heard before, but until it is fully acknowledged and acted on, it bears repeating. I concur with a lot of what other hon. and right hon. Members have already said, but I want to focus on the impact on Northern Ireland. Northern Ireland is unique, but it offers an effective demonstration in microcosm of the impact that APD can have more widely in the UK. The last time I raised the issue with Treasury Ministers, I was mildly scolded for not first acknowledging the work that the Treasury had done on APD for direct long-haul flights from Northern Ireland. In an attempt to be more charming and to heal those wounds, I will therefore refer to that first on this occasion.
The United Continental flight was hugely important, as our only long-haul direct route, for a number of reasons. First, of the 600,000 passengers it carried in the last six years or so, 40% were in-bound tourists and business visitors. Furthermore, the route’s success is a demonstration to others of the viability of Northern Ireland as a tourism and business destination for direct long-haul flights, and provides a base on which we can build. APD placed the flight in jeopardy because the rates are so much lower in Dublin, which is less than two hours away. I give credit to the Treasury for responding to lobbying by MPs, the Northern Ireland Assembly and businesses and to the report of the Northern Ireland Affairs Committee inquiry into air passenger duty by reducing APD for long-haul flights from Northern Ireland and indicating recently in the Budget that it would be devolved to the Northern Ireland Assembly.
Having I trust paid due regard to the progress made, I still have to acknowledge that the change does not assist with the unfair burden placed on Northern Ireland by air passenger duty on necessary regional flights or the double duty that is paid, as our access to the UK hubs often requires separate flights owing to the small number of through carriers. UK economic policy remains to focus development on the south-east;, so other regions need to access that market to develop. In addition, the main hub airports in the UK for international travel are based in the south-east. Connectivity to and through the south-east is therefore vital, yet for those of us living on an island off an island it can only be achieved by flying.
The case for a review of APD is strong across the UK. We are island nations and aviation is crucial. However, in Northern Ireland the situation is more acute, as we are the only region with a land border with another EU member. Price-sensitive advantage in the Republic has directly affected Northern Ireland, which is something we need to be conscious of. I have mentioned the Irish Government’s intention to abolish the tax. We should note that, despite the huge economic pressure on them to reduce their deficit, low rates of corporation tax and APD are two things on which the Irish Government refuse to budge because they recognise them as key economic drivers.
APD also has a detrimental effect on tourism in Northern Ireland. Ultimately, if people fly to Dublin, they stay in the Republic of Ireland and spend there. We are lucky in Belfast if we can extract a day trip out of their visit. We need people to come and have bed nights in Northern Ireland. We need them to spend their money in Northern Ireland, which is best achieved by getting people to fly there.
I recognise that APD is lower on regional flights, but it is also paid on both legs of a journey. When combined with passenger landing charges for those on regional flights for which Heathrow or Gatwick is the destination airport, APD significantly increases costs for travellers. There is a disproportionately negative effect on those travelling from Northern Ireland, and there are few practical travel alternatives for us.
I want briefly to reflect on two other key issues: the environmental impact of aviation and the financial impact of change. APD was introduced as a means of taxing aviation to reflect the environment impact. I have no objection to aviation paying its fair share in that regard, but APD has long since parted company with that objective and is now merely a revenue raiser for the Treasury. That may sound dismissive, but it is not intended to be. Raising revenue is hugely important, given the context of the deficit, but the international evidence suggests that taxation on aviation is such a constraint on other revenue that it outweighs its benefits. I am therefore pleased to be able to support the motion today, which seeks a proper review of the situation.
In the few seconds I have left, I would like to reflect on the need for us also to consider the impact on outbound travel—
Multiannual Financial Framework
Nigel Evans Excerpts(12 years ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. To accommodate more Members in the debate, the time limit is being reduced to five minutes, with the usual injury time for interventions.
Public Service Pensions Bill
Nigel Evans Excerpts(12 years ago)
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Mr Tom Harris (Glasgow South) (Lab)
On a point of order, Mr. Deputy Speaker. I apologise for interrupting the flow of the debate, but I need to raise an important matter. It will be recorded in tomorrow’s Hansard that the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), told Members that the Government’s commitment to introducing a ban on the use of wild animals in circuses was confirmed by the fact that such a commitment was made by Her Majesty in the Queen’s Speech to Parliament. You will, I know, agree that that is a powerful riposte to those of us who had dared to doubt the Government’s good faith on this issue. However, a subsequent inspection of the two most recent Queen’s Speeches of this Parliament finds no mention whatever of such a commitment. Is it in order for any Minister to pray in aid of his argument a part of Her Majesty’s Gracious Speech that turns out to be wholly fictitious? Has the Minister in question contacted you or Mr Speaker to schedule an apology to the House?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Gentleman for his point of order. I have not been notified that any Minister wishes to make a statement on this matter or any other matter from the Dispatch Box this evening. As for whether the Minister was in order to give the response that he did, Ministers and, indeed, all right hon. and hon. Members are responsible for their own speeches.
John McDonnell
Further to that point of order, Mr Deputy Speaker. On a serious matter such as this where a Minister has inadvertently misled the House, it is the norm for him to be asked to return to the House as soon as possible to correct the record and explain his position. May we now express the view on the Floor of the House that the Minister has time now to come back to the Chamber to explain the situation?
Mr Deputy Speaker
I thank the hon. Gentleman for his point of order, which I am sure those on the Treasury Bench will have heard. Should a request be made to make a statement or to raise a point of order, the Chair will be notified and I will make sure that the House is informed in the usual way.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The winding-up speeches will begin at 9.30 pm.