Value Added Tax (Tour Operators) (amendment) (EU exit) Regulations 2019

Barry Sheerman Excerpts

Thursday 9th May 2019 General Committees

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am sorry I was late, Sir Henry. It is Europe day, and I was asking a question in business questions about celebrating our membership of the European Union. Does my hon. Friend agree that working people in the travel and tourism industry in our country, which is very important, are extremely worried about their jobs and their future? This statutory instrument is very important indeed to their lives.

[Anneliese Dodds]

I could not agree more. That is absolutely the case. To an extent, I have an interest in this sector, as some of my family members have been involved in it. It is often a route for social mobility, because small, innovative firms can develop a specific offer and, as a result, grow, innovate and create new jobs. It is a dynamic part of the UK economy. We need more information—I hope that the Minister can provide some—about how the Government will try to protect and nurture those firms, given the potential impact of the additional administrative and perhaps financial burden if these measures are required.

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[Mel Stride]

I am grateful to the hon. Member for Oxford East for her usual thorough interrogation of the issues at hand.

[Mr Sheerman]

Yes, she’s good, she is.

[Mel Stride]

The hon. Lady’s colleague says she is very good, and I concur entirely with that sentiment.

I am pleased that the hon. Lady agrees with the premise of what we are attempting to achieve here. She recognised the importance of avoiding potential changes in the unlikely event of a no-deal Brexit, in terms of double taxation. She specifically raised the issue of what would happen, and she set out in great detail what might happen, in the event that we were to leave the European Union and the EU were to then change its relationship in respect of this particular element of the VAT regime and what the impact of that might be on the UK business sector. I would like to make a few brief points on that.

The first point to make is that there is no suggestion at this stage from HMRC or ourselves that that is a likely outcome, in terms of the discussions that we have had with the European Union on our exit. It would introduce a great additional complication on both sides were the EU27 to decide to move in that direction.

The second point I would raise is one that the hon. Lady raised. Under the EU’s current regime, no third countries are treated as having to register for VAT within any of the EU28 member states with which they may be conducting business.

Thirdly, when we look at VAT, where holidays or trips are sold from the UK into the EU27, VAT is generated as a consequence of those trips and the hotel bookings and so on, so the EU and member states are collecting VAT in that way. As the hon. Lady will recognise, the context of this debate is the margin on which the VAT is being accrued.

Finally, if we were to end up in a no-deal situation, which I think unlikely, and the EU were to decide that our businesses had to register separately within the EU27, it would have to think long and hard about the consequences and what we might do in response to that. I do not think it would be in either party’s interest to change from the current status quo.

The hon. Lady also pointed out that the impact assessment foresees limited or effectively no impact on businesses. Of course, that excludes the scenario on which she dwelt at great length in her speech, and rightly so, as I have set out why we think that is highly unlikely. She asked what support we would provide to business in the event that there was a changed response from the EU27. Were we to get into that kind of territory, we would know some time in advance, and would take decisions at that moment in time.

She also asked whether we had encouraged the EU to look at alternative arrangements. I am fairly confident in saying that we have not engaged in those specific discussions with the EU on the basis that we think that it is extremely unlikely, but were it to appear to become more likely, then of course we would look at all those particular avenues. She asked a specific question about what the loss of VAT revenue might be as a consequence of complying with WTO rules and applying the zero VAT rate to those transactions between ourselves and the EU27, in the unlikely event of a no-deal Brexit. I am very happy to write to her to give as accurate an answer as I can.

I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for his comments. I think he said it was disgraceful that we are still planning for a no-deal Brexit, but that is something that we passionately do not want, which is why we are working so hard to try to deliver a deal. However, we must recognise the fact that ultimately a no-deal might be outside of our control. It is to some degree within the gift of the European Union. As a responsible Government, we must make sure we cover that remote possibility. On that basis, I hope the Committee will support the instrument.

Question put and agreed to.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 9th April 2019 Commons Chamber

[Mr Speaker]

When she is not busy vice-chairing the all-party group.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I chair Labour’s Back-Bench environment, food and rural affairs committee.

The Chancellor always impresses me. He is thoughtful, and I like him a lot. He is thoughtful on Europe and on the environment, but can I take him back to what my hon. Friend the Member for Cambridge (Daniel Zeichner) said? Is it not about time we had a modern taxation system that encourages sustainable transport? We are killing kids and poisoning pregnant women. We know that air pollution is of the utmost importance. I appeal to the Chancellor’s radical instinct: let us have a new form of sustainable taxation.

[Mr Hammond]

I am bemused by the disappearance of Mr Angry, who I am quite used to dealing with at the Dispatch Box. As I said earlier, we have a good track record on decarbonisation and addressing air quality challenges. We provide substantial support for ultra low emission vehicles, we have a highly differentiated vehicle excise duty and company car tax regime, which encourages the purchase of the cleanest and most efficient vehicles, and we will go on seeking to change behaviour through a carefully constructed tax system.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 5th March 2019 Commons Chamber

[Mr Hammond]

I knew Chelmsford was going to get in there somewhere.

The additional £7 billion I mentioned earlier is focused on applied research and industry innovation and the commercialisation of the UK’s world-leading science base. Quantum technologies have the potential to be transformative, and the UK is a global leader, so last autumn I committed £315 million for a second phase of the UK’s landmark national quantum technology programme. This investment includes a £70 million industrial strategy challenge fund, which will help leading UK firms such as Teledyne accelerate getting their products to the market.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Chancellor knows very well that Huddersfield in the Leeds city region is a hotspot for new technology and innovation and a tech centre, but many people in Huddersfield and Leeds are demoralised by the future and leaving the European Union. What can the Chancellor do to give them some hope that there is a future for their businesses and universities?

[Mr Hammond]

I am well aware that Huddersfield, like Chelmsford, is a leading centre of industry and technology development. Many of our towns and cities that have traditionally been centres of manufacturing are changing very fast in response to the changing nature of manufacturing industry. What I can say to the hon. Gentleman is that I will be making a spring statement to the House next week in the context of some very important decisions that the House will be making about our exit from the EU, and I will be setting out my vision for Britain’s future.

Transport for Towns

Barry Sheerman Excerpts

Tuesday 19th February 2019 Westminster Hall

[Caroline Flint]

That is an important point about young people. I will talk later about the fatalities in my constituency of young drivers, who are often forced into getting a car as it is the only means of getting around. These young people are not drinking or anything else but are just inexperienced drivers on our country and rural roads. That is a big problem.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My right hon. Friend and I have been good friends for many years, and I think we share the desire for a really good rail link across the northern regions and the northern midlands. That is absolutely essential. We now know that HS2 will cost £100 billion. Does she agree that it would be better if we invested that money in good local transport across the north of England?

[Caroline Flint]

My hon. Friend is right to point out the rising cost of those major infrastructure projects. Many people around the country find it hard to believe how much money is spent on HS2 and other projects—in some cases misspent if the projects are not kept on budget—when they find it hard to find a few thousand pounds for something that could make a big difference locally.

Draft Merchant Shipping (Marine Equipment) (Amendment etc.) (EU Exit) Regulations 2019

Barry Sheerman Excerpts

Tuesday 19th February 2019 General Committees

[The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)]

I beg to move,

That the Committee has considered the draft Merchant Shipping (Marine Equipment) (Amendment etc.) (EU Exit) Regulations 2019.

It is a pleasure to serve under your chairmanship, Ms Buck, on this glorious February morning. Made under section 8 of the European Union (Withdrawal) Act 2018, the regulations correct deficiencies in the Merchant Shipping (Marine Equipment) Regulations 2016 and related legislation that arise from the UK’s withdrawal from the EU. “Marine equipment” is the collective term used to describe a ship’s safety and pollution prevention equipment. Examples include lifejackets, fire extinguishers and navigation lights. Marine equipment is regulated globally by the International Maritime Organisation under three international conventions.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have served on many of these Committees—I will be on more, I would have thought, after yesterday’s events—and the fact is that we come in and every Minister stands up and gabbles right through as though the measure is not important. The rate of knots at which this Minister is speaking means that I cannot follow. Could she slow down and articulate better, so that we can all hear? I am not blaming the Minister; it is the procedure that has been adopted—gabbling through. Please do not gabble.

[The Chair]

Order. The point has been made, Mr Sheerman; thank you.

[Ms Ghani]

I apologise for my speed of speech; I would probably put that down to my passion for the subject. If the hon. Member for Huddersfield would like me to slow down and extend the sitting, I will do so. I hope that I can now be heard by the hon. Gentleman— I can project my voice more if he so wishes—and even by my own colleagues, if they are not yet awake.

The three international conventions require flag state administrations to ensure that marine equipment complies with safety requirements as regards design, construction and performance standards. The UK’s flag state administration for these purposes is the Maritime and Coastguard Agency. Historically, each EU maritime administration had its own systems for approving marine equipment, so the EU adopted legislation to harmonise the way in which EU member states implement International Maritime Organisation marine equipment requirements. That legislation allows member states to designate conformity assessment bodies to issue an EU-wide approval for marine equipment.

The MCA, on behalf of the Secretary of State, has designated 10 conformity assessment bodies for the EU. The MCA intends to convert those 10 bodies from EU notified bodies to UK approved bodies after the UK’s withdrawal from the EU. That will provide continuity in approval of marine equipment in the UK and ensure that the UK continues to meet its international obligations.

[Mr Sheerman]

We hear many Ministers telling us whom they have consulted. I chair the Transport Safety Commission, so I know a little about this area. The last time that I served on one of these Committees, it was about air safety, and I discovered that the Minister had met not one leader of note of an airline—a chairman or chief executive—and nor, he thought, had the Member of the House of Lords whom he said led on that territory. How many people in the industry—chairs and chief executives, even the ones who do not have any ships—has this Minister met?

[Ms Ghani]

I am grateful for the hon. Gentleman’s intervention, because it allows me to explain the number of organisations that I have indeed met. I chair an inter-ministerial group for maritime, which reflects not only the views of Maritime UK, the UK Chamber of Shipping and all the large maritime ports in our country but the views of shipowners. Regular meetings take place, across the country. Indeed, if the hon. Gentleman follows my Twitter feed, he will see all the meetings that I have had at ports with shipowners and with the organisations that represent these people.

[Mr Sheerman]

The Minister is very generous to give way again. I talk to the Yorkshire ports people, and they say that they have not met her. There will be tremendous stress on the regional ports, but they have not met her. Could we have a list of the people whom Ministers have actually met—the names and dates?

[Ms Ghani]

The hon. Gentleman raises an interesting point. I would like to know which port has made that point, considering that—

[Mr Sheerman]

I said Yorkshire ports.

[Ms Ghani]

I spend considerable time at Associated British Ports and all the associated bodies that represent these ports, but if there is a port that feels that it has not had the appropriate attention from the maritime Minister I will, indeed, engage on that.

[Mr Sheerman]

That is a fair offer.

[Ms Ghani]

It is a fair offer.

The MCA regularly meets the 10 bodies—another bunch of meetings is reflected here—and it has kept them informed of the proposals, which they fully support. Similarly, the MCA regularly meets manufacturers of marine equipment and has received only positive feedback on the proposed regulations.

The regulations make changes that are essential to adapting the EU approval system to one that can function effectively as a UK system after exit. The regulations will allow ships to continue to use marine equipment that has been approved under the EU system. However, they also establish a new UK approval system, making simple changes that enable that system to work, for example by changing references to “member state” and “the Commission” to references to “Secretary of State” and “the United Kingdom”. The regulations establish a UK conformity mark for the UK system, and UK ships will carry equipment that bears either the EU’s wheel mark or that new UK mark.

The regulations also include important saving and transitional provisions. First, UK conformity assessment bodies that are, immediately before exit day, designated EU notified bodies will automatically be converted to UK approved bodies on and after exit day. Secondly, any application for conformity assessment lodged with a UK body before exit day for EU approval will be treated as an application for UK approval on and after exit day, so that a manufacturer will not need to make another application for conformity approval if it is not determined before exit day. Thirdly, existing conformity assessment certificates issued by EU notified bodies before exit day will be treated on and after exit day as if they had been issued by a UK approved body.

Importantly, and to clarify, the regulations do not change the design, construction and performance standards applicable to marine equipment, the methods for conformity assessment of that equipment, the requirements to become a designated conformity assessment body for that equipment, or the mechanisms for protecting the UK market against fraudulent or unsafe equipment. The only significant difference between the UK and EU approval systems is that the EU system requires a manufacturer established outside the EU to appoint an authorised representative in the EU and the UK system does not. An authorised representative fulfils responsibilities for the manufacturer in the EU—mainly those of retaining documents. The UK has made the appointment of an authorised representative voluntary to ensure that our system matures as quickly as possible. The EU took the same voluntary approach for nearly two decades to enable its system to mature.

[Mr Sheerman]

I have to say that the Minister is getting up her speed again. Does she agree that if something goes wrong in shipping after Brexit—if there is a cataclysmic collision or sinking and oil pollutes half of the coastal area of Britain—it will be a terrible environmental and human tragedy? Is she telling me that there has been no risk assessment of the transition and the equipment, which is so sensitive? Or is she telling me that a risk assessment by her highly paid officials has come to the conclusion that there is no risk?

[Ms Ghani]

The hon. Gentleman conflates many different scenarios. The MCA already undertakes work. All we are suggesting through the statutory instrument is that it will continue to do that, but it will work with UK bodies, as working with EU bodies will no longer be appropriate once we exit the EU. The MCA and the marine accident investigation branch are of world standard in their dealings with issues that arise on our waters.

The MCA has other mechanisms through which to obtain the same documents, either directly from the manufacturer or from the relevant approved body.

[Mr Sheerman]

Will the Minister give way?

[Ms Ghani]

I will—

[Mr Sheerman]

Again, I am sorry, but the Minister is talking about the MCA—

[The Chair]

Order. It is up to the Minister whether she decides to give way.

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[Karl Turner (Kingston upon Hull East) (Lab)]

It is an absolute pleasure to see you in the Chair, Ms Buck, and a privilege no doubt to serve under your chairmanship. I do not intend to detain the Committee long. As the Minister has already set out, the instrument seeks to maintain and update existing regulations covering the application of the international standards for marine equipment produced and certified in the UK and the EU used on UK and EU-registered ships after Brexit. The marine equipment covered includes life-saving appliances, crew accommodation and equipment for navigation, fire protection and marine pollution prevention.

Merchant shipping notice 1874 lists the bodies certified by the Maritime and Coastguard Agency to issue approval of marine equipment.

[Mr Sheerman]

I intervene on my hon. Friend because I could not get in to ask the Minister about the safety of vessels and whether there was a real problem with the danger of marine pollution. My hon. Friend knows well the port of Kingston upon Hull and the Yorkshire ports. I am getting feedback from them. They are extremely concerned about a major problem with this transfer. We have to remember that some of the worst disasters at sea were not predicted. They could very well happen in the turmoil post Brexit.

[Karl Turner]

My hon. Friend is right to raise safety issues, but I have to be honest. I am, indeed, the Member for Kingston upon Hull East, but it is not true to say that the port has approached me to raise safety issues with me. My hon. Friend has a great deal of knowledge in this area, and he is right to raise concerns about what happens once we leave the EU, but the reality is that the regulations continue to ensure safety standards in the UK when we leave the EU. I do not like the fact that we are leaving the EU; I have made my position on that matter very clear. But the truth is that we are leaving, and we need to ensure that safety regulations that already exist apply in domestic law once we have left.

MSN 1874 was reissued in June 2018. I note that paragraph 6.3 of the explanatory memorandum refers to a draft MSN 1874, but this does not appear to be available. The international market in marine equipment, especially for marine pollution prevention is likely to grow significantly in the coming years and will be accompanied by further regulations at IMO level.

[Mr Sheerman]

Does my hon. Friend agree that it is our job as the Opposition to make sure that we tell the British public the real danger of a major incident in the turmoil post Brexit, which could pollute the seas right round this wonderful island of ours? Is that not the case? The Government have not done a risk assessment, or published a risk assessment, and they should reassure the British public that the possibility of disasters has been assessed and they are okay.

[Karl Turner]

I am assured in various Committees on which I have served that various standards have been tested and safety provisions are in place. We can only rely on what Ministers tell us, but I have been assured on a number of occasions that those factors have definitely been considered.

[Karl Turner]

The hon. Gentleman is extremely optimistic. Safety protections to guard against potential pollutants are better done collectively, in my view. We can always improve safety standards.

The instrument preserves the status quo for the shipping industry post Brexit, which is some reassurance to seafarers who rely on compliant equipment including in emergencies at sea, as my hon. Friend the Member for Huddersfield rightly mentioned. There are issues with the marketisation of marine equipment, especially safety and pollution prevention equipment, but they are deferred by the provision. Merchant shipping notice 1874 has not been made available as part of the process, although a draft version is referred to in the explanatory memorandum.

[Mr Sheerman]

I promise my hon. Friend that this is my last intervention on him. I have much more memory of this than the hon. Member for North Cornwall: until we were in the European Union and had European regulation, people swam in sewage all around the coast of Britain. It was a European regulation that cleared up our seas and oceans and made them decent. We stopped pumping sewage into the seas. Does my hon. Friend agree that the problem is that, without European regulation, we will be back in that situation and pollution will, again, make us the filthy man and woman of Europe?

[Karl Turner]

My hon. Friend is right that the regulations have improved standards. There is no doubt about that, in my view.

MSN 1874 was last issued in June, but a draft was not attached to the explanatory memorandum. When will the updated notice be distributed, and have the addresses of UK-based notification bodies changed since June? The explanatory memorandum refers to “minor familiarisation costs” that will result for the public sector and for business. What will that mean in practical terms for the shipping industry and for seafarers who use the equipment?

Finally, can the Minister explain a little more about the instrument’s effect on the new IMO regulations that cover marine equipment that are introduced after the instrument come into effect and before any future trade deals between the UK and the EU are agreed and implemented?

--- Later in debate ---

[Ms Ghani]

The hon. Gentleman makes an important point. He will know that it is not just the EU that guides maritime. Maritime is a global sector, and the IMO, which has the highest standards, is just across the river from us. We are part of the high ambition coalition, so as a country we are a driving force on maritime regulations and standards. Given that we lead that group and are trying to bring the rest of the world up to our high standards, it would not make sense at any point to lower standards.

In response to another point about the reduction in standards, I mentioned in my opening statement that the regulations retain the existing international standards that apply to marine equipment. They in no way undermine, devalue or reduce standards, and I find it peculiar that the hon. Member for Huddersfield, who made a number of interventions, assumes that the act of Brexit alone will create a dire situation on our waters. I think he should come to terms with what we are trying to do.

[Mr Sheerman]

Will the Minister give way one last time to me?

[Ms Ghani]

I will just go a little bit further, thank you.

The hon. Member for Kingston upon Hull East asked whether the bodies had changed since 2018. The answer is no. He asked why MSN 1874 had not been published. MSN 1874 Amendment 3 was put to the House for sifting and will be published by the MCA on commencement. I will write to the hon. Gentleman to make him aware of the timeline.

[Mr Sheerman]

One last intervention, Minister?

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[The Chair]

That is very gracious.

[Mr Sheerman]

I am sorry if the Minister does not like my interventions. We have been sitting for about 14 minutes, and the British public expect us to scrutinise this legislation. That is why I got up early this morning. It is my job to ask for my constituents and the people of this country what is going on. I have asked whether the Minister has evaluated the safety of these legislative and regulatory changes. She said that the IMO was just across the river. Has she been over there physically to talk to them? What steps has she taken?

[The Chair]

Order. The hon. Gentleman has made his point.

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[Ms Ghani]

It continues to be a glorious morning, as we can see by the amount of interventions that are being made. The regulations do indeed bring on board standards. We are one of the leading countries, helping the IMO to deliver even higher standards, and the hon. Gentleman will be pleased to know that ILO 188, which raises standards for seafarers and fishermen, was delivered by this country this year. We were the first country to deliver that ILO standard. Once again, the UK is the leading champion for our maritime sector.

The regulations make only necessary changes to adapt a system for marine equipment conformity assessments that was designed on behalf of the EU member states into a UK system. With your permission, Ms Buck, I commend the regulations.

[Mr Sheerman]

On a point of order, Ms Buck. The fact of the matter is that we are racing through this. There is almost resentment on the Government Benches; a feeling that we have to get through this, get out and get on with our day job. Our job as an Opposition is scrutiny, and I am not able as a Member of Parliament in this Committee to scrutinise the regulations sufficiently.

[The Chair]

Order. That is not a legitimate point of order. It was for the hon. Gentleman to make a speech if he wanted. We will move on. Has the Minister concluded her remarks?

Making Tax Digital

Barry Sheerman Excerpts

Tuesday 19th February 2019 Commons Chamber

[Mel Stride]

The short answer is yes; it can be found on gov.uk. Indeed we have also produced a partnership pack for intermediaries, which sets out in very clear language exactly what is involved and what will be expected of those businesses and individuals.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I do not know whether the Minister is familiar with young children’s literature, but Roger Hargreaves is a popular choice as the inventor of the Mr Men. I am not accusing the Minister of being Mr Tickle or Mr Silly, but perhaps today he is Mr Smug. The fact is that small and medium-sized enterprises in my constituency and around the country have been knocked sideways by the changes in the training levy, which relates to how they get their people skilled and trained. They have not yet digested that, but now we have another onslaught with digitisation. Is he aware that many of my constituents are going to be forced into the hands of so-called professional people—accountants—who will charge them a great deal of money to do this process for them?

[Mel Stride]

I am indeed familiar with the work of Roger Hargreaves. I am not sure whether there was a Mr Cautious or a Mr Sensible, but I think they would be more appropriate than Mr Tickle or Mr Silly. To answer the hon. Gentleman’s question, in terms of navigating around the various options, we are providing clear guidance that is very easy to follow, and 98% of those businesses and individuals that will be impacted are already filing their VAT returns digitally. Among the software products available, there is bridging software that allows companies to continue to make use of spreadsheets while using the software, some of which is free, to make their submission to HMRC.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 29th January 2019 Commons Chamber

[Robert Jenrick]

We do agree with that. All the evidence suggests that small businesses would benefit from better quality advice across a range of areas. Recently in the Budget, we have supported extra funding for networks, to bring businesses together, and we are working across the Government to think about ways in which we can improve the quality of advice and increase competition within business advisory services.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister should take some advice from someone who has been in the House a long time: bragging about being an “every 75 minutes” Minister is very dangerous. I have just checked and in Huddersfield it is cloudy but not cold, but the economic temperature is freezing: start-ups are not starting, the new creative businesses are putting everything on hold, and until they have some reassurance about Brexit, they will not move.

[Robert Jenrick]

If the hon. Gentleman wanted to give greater certainty to businesses in his constituency, he would support the deal. He did not do so in the recent vote, but I hope he will come forward and do so shortly. I would not be so negative about the business community and the state of the economy in Yorkshire. We have record levels of employment, the jobs market is the second best in the country and real wages are rising. In Yorkshire, real wages and household disposable income are rising above the national average.

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[Mr Hammond]

The Government have made a cross-departmental assessment of the medium to long-term effects of different Brexit outcomes, which the Government have published. The Bank of England, because it is better equipped to do so, has made an assessment of the short-term impacts of leaving the EU under different scenarios, which it has published.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

You’re the Chancellor of the Exchequer. You should have made it yourself.

[Mr Speaker]

Order. The hon. Gentleman is a cerebral denizen of the House. I know he is arguing the toss about what he thinks is the inapplicability of the personal views or the professional opinion of the Chancellor, but he should not offer a lecture from a sedentary position. We are accustomed to hearing this eloquence when he is on his feet. We do not need to hear him when he is in his seat.

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[Mr Hammond]

The Labour party will have to get its act together, and organise a discussion between its Front Benchers and its Back Benchers.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

You ought to get your act together.

[Mr Hammond]

Well, I know where the deep divisions lie. [Interruption.] We have heard many Opposition Members express concern about a lack of investment and the potential relocation of businesses, but now the hon. Member for Bootle (Peter Dowd) has popped up on the Front Bench suggesting that we hit business with an additional tax charge. Labour is the party that is proposing to increase corporation tax for businesses, including the smallest in our country. We will remain the party that is encouraging businesses, large and small, by ensuring that ours is an attractive jurisdiction for investment to take place.

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[Mr Hammond]

The Department for Transport has complied with all the Treasury’s Green Book procedures in letting the contract in question, and the decision to go ahead will have been taken with the consent of the Department for Transport’s accounting officer.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

On a point of order, Mr Speaker. I may have erroneously misled the House when I said that the Minister said that the Government were creating 75 businesses a minute. It has been pointed out to me that he actually said 75 businesses a second.

[Mr Speaker]

No, I think that the Minister said a business every 75 seconds.

[Mr Speaker]

It is not for the Speaker to be the arbiter of truth. Knowing the ambitions of the hon. Member for Rhondda (Chris Bryant), it is important that he knows what he is letting himself in for. He would have important responsibilities, but the adjudication upon the matter of truth would not be one of them.

[Mr Sheerman]

Further to that point of order, Mr Speaker.

[Mr Speaker]

In deference to the seniority of the hon. Gentleman, I will hear his point of order if he insists.

[Mr Sheerman]

I just wanted to thank you for correcting the record, Mr Speaker. I would be glad if the record could be put straight. As you said, the figure was 75 businesses a second. [Interruption.]

[Mr Speaker]

I am getting advice that is the product of the scholarly cranium of the Clerk of the House, but I think I will leave the hon. Gentleman to find his own salvation. We will leave it there.

Draft Double Taxation Relief and International Tax Enforcement (Austria) Order 2018

Barry Sheerman Excerpts

Monday 21st January 2019 General Committees

[The Financial Secretary to the Treasury (Mel Stride)]

I beg to move,

That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Austria) Order 2018.

May I say what a pleasure it is to serve under your chairmanship, Mrs Main? The order gives effect to a replacement double taxation agreement with Austria. DTAs remove barriers to international trade and investment, and provide a clear and fair framework for taxing businesses that trade across borders. By doing so, they benefit both businesses and the economies of the countries signed up to them.

Our current DTA with Austria dates from 1969 and is therefore in need of a comprehensive update to reflect changes to the OECD’s model tax convention and the domestic tax laws and treaty preferences of both states. The new DTA also introduces a number of improvements for businesses, individuals and Her Majesty’s Revenue and Customs. The new agreement will first create certainty for businesses, boosting vital trade between our two countries. Cross-border dividends between group companies in the European Union are currently exempted from source state taxation under the EU’s parent-subsidiary directive. The new agreement ensures that UK businesses with subsidiaries in Austria will not be affected by the UK’s exit from the European Union.

Our current DTA permits Austria to tax dividends paid to UK residents at a rate of 5% for amounts paid in respect of direct investment, and 15% on portfolio holdings. The new DTA reduces the rate on direct holdings to zero, and that on portfolio holdings to 10%. At the same time, our right to tax distributions from UK real estate investment trusts at a rate of 15% is preserved. In addition, dividends received by UK pension schemes will be exempt from taxation in Austria. These reductions will ease the flow of cross-border investment between our two countries, to the benefit of both.

The new DTA also brings the mutual agreement procedure up to the minimum standard on improving dispute resolution agreed under the OECD-G20 base erosion and profit shifting—BEPS—project. In addition, the new agreement provides for mandatory binding arbitration, which will ensure that disputes are always resolved and that double taxation is avoided. Our current DTA with Austria was not listed as one that either state wished to be covered by the BEPS multilateral instrument—MLI—because this new agreement contains all of the provisions that would have been introduced by the MLI, taking into account the respective reservations made by the UK and Austria.

These provisions include the statement in the preamble that a purpose of a DTA is not to create opportunities for tax evasion and avoidance, and a principal purpose test that denies treaty benefits in cases of abuse. Together, these provisions ensure that the agreement complies with the BEPS minimum standard on preventing treaty abuse and supports this Government’s agenda of fair and transparent international tax standards. Other anti-avoidance rules in the new treaty include a tiebreaker provision for determining corporate residence, based on competent authority agreement.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister is gabbling through this at a rate of knots. I have had to come here at 6 o’clock on a Monday evening, when I should be somewhere else along the corridor. The impact assessment states that there will be no significant impact on businesses, charities or voluntary bodies. What the hell is this all for if there is no impact on anyone?

[Mel Stride]

Well, I am not sure that I would use quite the terminology that the hon. Gentleman has just introduced to the Committee. The purpose of any DTA is clearly to ensure that those entities that are trading across international boundaries do not suffer double taxation—so they are not taxed in both jurisdictions—and to ensure that trade is facilitated.

[Mr Sheerman]

Can the Minister explain to me why this relates only to Austria? I know of countries around the world where there are real concerns about double taxation, about people dodging tax and all those other things, but one country that would never enter my imagination when thinking about that is Austria.

[Mel Stride]

The hon. Gentleman might not be aware that we have double taxation agreements with a whole variety of countries. In fact, he has missed some of the best debates ever held in the House of Commons, because in this very Committee Room we have recently discussed DTAs with countries such as Lesotho—that was a fairly feisty debate between myself and the hon. Member for Oxford East. It is not a treaty in isolation, but one of many that we have entered into with other jurisdictions.

The provision in the capital gains article preserves UK taxing rights on gains from shares that derive their value from property in the United Kingdom. Finally, the new DTA provides for mutual assistance in the collection of tax debts. Together, those features strengthen both countries’ defences against tax avoidance and evasion.

In summary, the agreement protects UK revenue and provides a stable framework in which trade and investment between the UK and Austria can continue to flourish. I therefore commend the order to the Committee.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Chancellor does not like it when I use what he calls my “synthetic passion”, so, very quietly, may I beg him to take very seriously indeed where we are as a nation? It looks like we are heading for financial meltdown: people are losing their confidence in this country—[Interruption.] People are losing their confidence. My high street retailers—the big people and the small people—have their heads in their hands, and householders see a real likelihood of a 30% drop in their home value. Will he do something to stop this madness?

[Mr Hammond]

There are a couple of points there. First, I should just say to the hon. Gentleman that I was actually congratulating him the other day on his display of synthetic anger, which is one of the best in the House. On the wider point, the high street is facing challenges because of the uptake of online retailing across the UK at a faster rate than in any other large economy. That means that our high streets will have to adapt. The Government cannot save the high street from the need to change. What they can do is support it as it goes through that process of change.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 6th November 2018 Commons Chamber

[Mr Hammond]

My hon. Friend is absolutely right. As I said in my Budget speech, after considering representations to scrap entrepreneur’s relief, I reached the conclusion that, unless we support entrepreneurs, we will not have a dynamic and vibrant economy that can support our first-class public services. Those two things go hand in hand.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Chancellor aware that the businesses and entrepreneurs I speak to look back fondly to the time of the global economic collapse—not a Labour recession, but a world economic collapse—when a man called Alistair Darling, who was a real Chancellor, led us through that crisis? [Interruption.] At a time when everyone is totally depressed about Brexit, our businesses and entrepreneurs want a real statesman and a real Chancellor to lead this country.

[Mr Hammond]

The hon. Gentleman’s synthetic anger, which I have been enjoying for the best part of 20 years, is always a spectacle worth observing. I thank him for another episode. If he really thinks that businesses look back fondly to the financial crisis, he needs to get out a bit more.