Finance Bill

Debate between Alex Norris and John Redwood

Tuesday 12th September 2017 Commons Chamber

[John Redwood]

I do remember that. We also have the respective abilities in Government, and we see that this Government have been rather more successful at clamping down on tax loopholes that Parliament has thought unacceptable and that, in turn, has generated more revenue.

Very important to this Government’s strategy is the principle that, yes, we have to tax rich companies and rich people because they have the money, but that there is not enough money if we just tax the very rich. We must tax people who are comfortably off as well. There is also an understanding that, if we try to over-tax the very rich, we would end up getting less money, not more money, because the very rich have privileges and freedoms that the rest of us do not have. They have good lawyers, good accountants, and addresses in other countries. They can shift their businesses around, invest somewhere else, decide to spend their money somewhere else and go and live in a home in another country, which the rest of us are not able to do. Therefore, it is very important that the Government monitor the situation extremely carefully. For example, when the Government are taxing non-doms—they have got £9 billion in tax from non-doms, which is an extremely important contribution to our public services—they should be careful that they do not overdo it, because it would be quite easy to flip the thing.

I am not a particular friend of the non-doms. I have certainly never had the advantage of all these offshore facilities. I have always had a salary in Britain and paid PAYE like everybody else. Everything that I have had has had to go through the tax books quite properly, so I do not speak from any personal experience. However, what I do know is that I would rather live in a country that was tolerant of people who have riches and enterprise and who want to invest here than in a country that was completely intolerant. I would also rather that the non-doms paid some of our taxes for us than live in a country where the rest of us had to pay all the taxes because we had driven all the non-doms away.

So far, the Government have charted a sensible course, but I hope that they will watch the situation very carefully. I hope also that those in the Labour party who are serious about government and want to learn a bit more about how successful Governments, past and future, operate might learn from the corporation tax proposals in this and related Finance Bills. Interestingly, during the time when the Government have taken the corporation tax down from a 28% rate to 19%, they have massively increased the amount of revenue that companies pay. One problem with the Labour proposals before the last election was that Labour recommended a lot of spending that was not going to be financed by tax at all. It also recommended quite a lot of spending that it said would be financed by tax. One of its biggest alleged increases was from raising the corporation tax rate. If we tried that, we might find that we raised less money from corporations, drove marginal businesses away from our country and enabled clever accountants and lawyers in large corporations legitimately to base activities and profits in other countries, because they would no longer find our tax rates so acceptable.

[Alex Norris (Nottingham North) (Lab/Co-op)]

Given that the only numbers in the Conservative manifesto were the page numbers, does the right hon. Gentleman understand why Labour Members are slightly concerned that, despite what he says, the numbers in the Finance Bill do not add up?

[John Redwood]

No, I do not share that view and I do not think that was a very effective point. There was quite a lot in the Conservative manifesto. Indeed, there were some things in the Conservative manifesto that the Conservatives were rather surprised about, and we have been having friendly family conversations about them ever since. I am sure that my hon. and right hon. Friends will discern that there are some better parts of the manifesto which we are most keen to get on with. However, we certainly did not just have a manifesto of page numbers, as I am sure the hon. Member for Nottingham North (Alex Norris) will remember. The smile on his face tells me that he enjoyed some parts of the Conservative manifesto as well. We are all very pleased about that, even though he was probably amused by different parts of that particular publication from the ones that I was amused by and pleased about.

We wish to see a policy that promotes enterprise and growth. That means taxing people in companies with the money fairly and sensibly, but also setting internationally competitive tax rates that they will stay to pay and ensuring that the country is an attractive place in which people want to do business, invest and employ.