Finance (No. 4) Bill

Baroness Primarolo Excerpts

Wednesday 18th April 2012 Commons Chamber

[Several hon. Members]

rose—

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. A large number of Members wish to participate in this debate, which ends in one hour. I ask Members to make shorter speeches in order to accommodate their colleagues, so that the Minister can hear all the views. Interventions from now on must be short, or I will stop the Member from speaking at length on an intervention. I hope that helps the debate.

[Karl Turner]

I shall speak to new clause 6. I am delighted to follow the hon. Member for Beverley and Holderness (Mr Stuart), although I disagree with some of the points that he makes.

This was certainly not a Budget for jobs and growth. For hon. Members on the Government Benches to make that point time and again, as they do, shows me and my constituents how out of touch they are. On the subject of VAT on static caravans, I have three manufacturers based in Hull East. One of them, Willerby’s, the biggest manufacturer, has 700 staff. I said in an earlier intervention that the firm had gone from a full working week to a three-and-a-half day week. The firm tells me that it is probably ridiculous to suggest that there is a possibility of returning to a full working week if the proposed VAT is implemented on 1 October.

I want to address the question of whether there really is an anomaly. I do not think there is. I do not think people buy static caravans for the same reasons that they buy trailer caravans. A static caravan is often a second home, but if I accept that there is an anomaly, surely there should be time for a proper consultation and an opportunity for people to think about the impact on their businesses and jobs. It is the wrong time, while the economy is flatlining, to try to deal with an anomaly, if that is what it is. We need jobs and growth in this country. We do not need a savage attack on manufacturing industry.

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[Nadhim Zahawi]

In my constituency, the Subway franchisee sells cold sandwiches without VAT and must charge VAT when the sandwiches are heated. Spudulike has to charge VAT. The idea that when one serves hot food one has to charge VAT—even in the chip shop in Stratford—is only about levelling the playing field—

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. That is not brief enough and interventions should ask a question.

[Stephen Gilbert]

I understand the point that my hon. Friend is trying to make, but there is a big difference between eating cold fish and chips, which would not be very pleasant, and eating a cold pasty, which, when it is a good pasty, can be enjoyable. My hon. Friend will also see in the amendment paper that I have not tried to oppose any simplification in this area. I have tried to be helpful to the Government by suggesting that no VAT should be charged on products when no effort is made to keep the product warm. By phrasing it in that way, my intention was to encourage the Government to think again about whether we can achieve the aim of hitting the sale of rotisserie chickens while keeping an exemption for baked products. Perhaps when he sums up, the Minister will be able to tell me that he has considered my suggestion and that there are some good reasons why he would agree with me, but I doubt it.

This unfair tax unfortunately plays to the perception that some Government Members do not understand what day-to-day life is like for millions of people in our country. It plays to the perception that an attack is being made on quite an iconic Cornish dish. This is not just about the Cornish pasty, but about the meat and potato pie of my hon. Friends in the north and, as we heard from the Opposition spokesperson, the Scottish bridie. I simply think that the Government do not understand that millions of people eat those every day as part of their routine. We need to reconsider whether we have the balance right.

When my right hon. Friend the Chancellor visited Cornwall in 2008, he said:

“Cornwall is having a tough time with the economy and businesses are finding it hard. There are things that the Conservatives can do.”

I am desperately proud to be part of a coalition Government who have introduced a local enterprise partnership in Cornwall, produced an enterprise zone in Newquay, taken 19,000 Cornish people out of income tax, delivered a council tax freeze and made sure that Cornwall is the first part of the country to have access along its entire length to superfast broadband, but, when my right hon. Friend the Chancellor says that there are things that the Conservatives can do, I ask, please, that this is one thing that the coalition Government do not do. I shall request a separate Division on new clause 5.

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[Several hon. Members]

rose—

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. May I just let Members who wish to speak know that I need to give the Minister time to reply to the debate and intend to call him at 7.40 pm? Hon. Members might therefore want to make their remarks slightly shorter.

[Mr Gordon Marsden (Blackpool South) (Lab)]

I wish to speak principally to new clause 7, but, in passing, I associate myself with the remarks of the hon. Member for Sittingbourne and Sheppey (Gordon Henderson), particularly on seaside and coastal towns. I have received a letter on precisely those issues from my holiday village, Martin Mere, in Blackpool, which has caravan sites as well as wonderful beaches.

My right hon. Friend the Member for Exeter (Mr Bradshaw) eloquently described the broader issue. I do not want to dwell on the architectural glories of churches, but in my constituency, churches and places of worship have done immensely valuable work in adapting their buildings for community and voluntary sector use. That is why I was mystified when I raised the issue in Prime Minister’s questions today. He had a bizarre brief on swimming pools in Tudor houses. We do not have many swimming pools in Tudor houses in Blackpool, but we have many of the churches and places of worship to which I referred. Incidentally, although it will suffer massively from this proposal, this is not just an issue for the Church of England. Many of the reformed and independent Churches, the Roman Catholic Church and other denominations and religions also do immensely valuable work.

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[Several hon. Members]

rose—

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. I remind Members that I will turn to the Minister at 7.40, which means that I will stop the Member who is making a contribution at that time.

[Andrew Percy (Brigg and Goole) (Con)]

I rise to support the comments that have been made by my right hon. and hon. Friends from across east Yorkshire, who have outlined the terrible impact that the so-called caravan tax will have on the county. For the sake of brevity, I shall not repeat their arguments.

Instead, I shall concentrate on a particular document that has caused me considerable alarm. It has also alarmed one of the park owners in my constituency. My constituency also covers part of Lincolnshire, which contains a large number of holiday parks that will be affected by the measure. The HMRC document that outlines a summary of the impacts says of the economic impact:

“This measure might lead to a small increase in the price of static caravans”.

Even I can do the maths on that one, even though my bank balance might suggest otherwise. Applying 20% VAT to the price of a static caravan is not a small increase; it is a considerable increase. One of my park owners told me that the manufacturers sell their units for an average price of £25,000. Doing the math, as the Americans would say, we discover that that will mean an increase of £5,000, which is not a small increase at all.

That same park owner also wanted me to pass on to Ministers a point that I thought we all understood—namely, that businesses make decisions based on the tax regime that is in place, and that they look forward and make those decisions for the many years ahead. Another of my constituents has invested £500,000 this winter to extend the number of pitches on a holiday park that currently has 450 pitches. He said that the tax change would make it almost impossible for him to continue to employ the same number of people that he does at present, or for that expansion, in a relatively depressed area, to go ahead. I urge colleagues across the House to vote tonight to save that industry.

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Question proposed, That the clause stand part of the Bill.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss amendment 8, page 532, line 14, in schedule 23, leave out sub-paragraphs (2) to (5).

Amendment 52, page 532, line 29, after ‘journey’, insert ‘or relevant Scotland journey’.

Amendment 53, page 532, line 41, at end insert—

‘(4E) A passenger’s journey is a “relevant Scotland journey”—

(a) in the case of a journey which has only one flight, if the flight begins in Scotland, and

(b) in any other case, if the first flight of the journey—

(i) begins in Scotland, and

(ii) is not followed by a connected flight beginning at an airport or aerodrome in the United Kingdom or a territory specified in Part 1 of Schedule 5A.’.

Amendment 43, page 533, line 13, after ‘duty)’, insert—

‘or section 30B (Wales long haul rates of duty)’.

Amendment 54, page 533, line 13, after ‘duty)’, insert—

‘or section 30B (Scotland long haul rates of duty)’.

Amendment 44, page 533, line 16, after ‘30A’, insert ‘and 30B’.

Amendment 55, page 533, line 16, after ‘30A’, insert ‘30B’.

Amendment 45, page 534, line 45, at end insert—

‘30B Wales long haul rates of duty

(1) This section applies to the carriage of a chargeable passenger if—

(a) the carriage begins on or after the relevant day,

(b) the only flight, or the first flight, of the passenger’s journey begins at a place in Wales,

(c) the passenger’s journey does not end at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A, and

(d) if the passenger’s journey has more than one flight, the first flight is not followed by a connected flight beginning at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A.

(2) Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate determined as follows.

(3) If the passenger’s journey ends at a place in a territory specified in Part 2 of Schedule 5A—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph, and

(b) in any other case the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(4) If the passenger’s journey ends at a place in a territory specified in Part 3 of Schedule 5A—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph, and

(b) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(5) If the passenger’s journey ends at any other place—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph, and

(b) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(6) The rate of £0 may be set for the purposes of any paragraph.

(7) The same rate may be set for the purposes of two or more paragraphs.

(8) Any rate set must not exceed the rate that would apply if this section were not in force.

(9) Subsections (5) to (7) and (10) to (12) of section 30 apply for the purposes of this section as they apply for the purposes of that section.

(10) “The relevant day” means the day appointed as such by an order.

(11) Section 42(4) and (5) does not apply to an order under subsection (10).

(12) An Act of the National Assembly of Wales means an Act passed under Part IV of the Government of Wales Act 2006.’.

Amendment 56, page 534, line 45, at end insert—

‘30B Scotland long haul rates of duty

(1) This section applies to the carriage of a chargeable passenger if—

(a) the carriage begins on or after the relevant day,

(b) the only flight, or the first flight, of the passenger’s journey begins at an airport or aerodrome in Scotland,

(c) the passenger’s journey does not end at an airport or aerodrome in the United Kingdom or a territory specified in Part 1 of Schedule 5A, and

(d) if the passenger’s journey has more than one flight, the first flight is not followed by a connected flight beginning at an airport or aerodrome in the United Kingdom or a territory specified in Part 1 of Schedule 5A.

(2) Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate determined as follows.

(3) If the passenger’s journey ends at an airport or aerodrome in a territory specified in Part 2 of Schedule 5A—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the Scottish Parliament for the purposes of this paragraph, and

(b) in any other case the rate is the rate set by an Act of the Scottish Parliament for the purposes of this paragraph.

(4) If the passenger’s journey ends at an airport or aerodrome in a territory specified in Part 3 of Schedule 5A—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the Scottish Parliament for the purposes of this paragraph, and

(b) in any other case, the rate is the rate set by an Act of the Scottish Parliament for the purposes of this paragraph.

(5) If the passenger’s journey ends at any other airport or aerodrome—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the Scottish Parliament for the purposes of this paragraph, and

(b) in any other case, the rate is the rate set by an Act of the Scottish Parliament for the purposes of this paragraph.

(6) The rate of £0 may be set for the purposes of any paragraph.

(7) The same rate may be set for the purposes of two or more paragraphs.

(8) Any rate set must not exceed the rate which would apply if this section were not in force.

(9) Subsections (5) to (7) and (10) to (12) of section 30 apply for the purposes of this section as they apply for the purposes of that section.

(10) “The relevant day” means the day appointed as such by an order.

(11) Section 42(4) and (5) does not apply to an order under subsection (10).

(12) An Act of the Scottish Parliament means an Act passed under section 28 of the Scotland Act 1998.’.

Amendment 46, page 535, line 11, after ‘30A’, insert ‘or 30B’.

Amendment 48, page 535, line 16, after ‘Ireland’, insert ‘and Wales’.

Amendment 58, page 535, line 16, after ‘Ireland’, insert ‘and Scotland’.

Amendment 49, page 535, line 18, after ‘operators’, insert ‘in—

(a) Northern Ireland and

(b) Wales.’.

Amendment 47, page 535, line 22, after ‘30A’, insert ‘or 30B’.

Amendment 50, page 535, line 27, after ‘30A’, insert ‘or 30B’.

Amendment 51, page 536, line 12, at end insert—

‘41B Wales long haul rates of duty: disclosure of information

(1) An officer of Revenue and Customs may disclose to the Secretary of State, the Treasury or Welsh Ministers any information for purposes connected with the setting of rates of duty under section 30B above, including (in particular) to enable the setting of rates under that section to be taken into account for the purposes of section 118 of the Government of Wales Act 2006 (Payments into Welsh Consolidated Fund: grants).

(2) Information disclosed under subsection (1) above may not be further disclosed without the consent of the Commissioners (which may be general or specific).

(3) In section 19 of the Commissioners for Revenue and Customs Act 2005 (wrongful disclosure) references to subsection 18(1) of that Act are to be read as including a reference to subsection (2) above.’.

Amendment 60, page 536, line 13, at end insert—

‘41B Scotland long haul rates of duty: disclosure of information

(1) An officer of Revenue and Customs may disclose to the Scottish Ministers, the Treasury or the Secretary of State any information for purposes connected with the setting of rates of duty under section 30B above, including (in particular) to enable the setting of rates under that section to be taken into account for the purposes of Part 3, section 64, subsection 5 of the Scotland Act 1998 (Scottish Consolidated Fund).

(2) Information disclosed under subsection (1) above may not be further disclosed without the consent of the Commissioners (which may be general or specific).

(3) In section 19 of the Commissioners for Revenue and Customs Act 2005 (wrongful disclosure) references to subsection 18(1) of that Act are to be read as including a reference to subsection (2) above.’.

Amendment 61, page 536, line 17, at end insert—

‘(1) The Scotland Act, Schedule 5, section A1 (exceptions) is amended as follows:

(2) After ‘rates)’, insert—

“(1) Air Passenger Duty on all flights that are—

(a) originating from an airport or aerodrome in Scotland and,

(b) not part of a connecting flight from—

(i) a domestic UK airport or aerodrome, or

(ii) a territory specified in Part 1 of Schedule 5A of the Finance Act 1994.”’.

That schedule 23 be the Twenty-third schedule to the Bill.