Finance (No. 2) Bill
Debate between Catherine McKinnell and Lindsay Hoyle(10 years, 4 months ago)
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Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I beg to move amendment 3, in page 8, line 25, at end insert—
‘55F Review
(1) Within six months of the passing of the Finance Act 2014, the Chancellor of the Exchequer must undertake a review of the impact of the tax relief for married couples and civil partners introduced under this Chapter.
(2) The review must in particular include—
(a) a calculation of the proportion of married couples and civil partners who are eligible for the tax relief in the financial year 2015-16;
(b) an assessment of the impact of this tax relief on those who are neither married nor in civil partnerships;
(c) the cost to the Exchequer of this tax relief; and
(d) an assessment of alternative tax reliefs that would benefit a greater number of families.
(3) The Chancellor of the Exchequer must publish the report of the review and lay the report before the House.’.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to consider clause 11 stand part.
Catherine McKinnell
It is a pleasure to serve under your chairmanship today, Mr Hoyle. I rise to speak to the Opposition’s amendment to clause 11 regarding the coalition’s proposed tax relief for married couples and civil partners. Before I begin, let nobody be in any doubt that the Opposition believe that marriage and civil partnerships are a force for good in society. Making a binding lifelong commitment to a partner in that way is truly to be celebrated. Let us not pretend, however, that the Government’s marriage tax allowance, introduced by clause 11 of this year’s Finance Bill, is anything other than a complete and utter dud of a policy.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does my hon. Friend agree that one difficulty with this proposal is shown in the analysis by the Institute for Fiscal Studies? Robert Joyce, the senior research economist there, says:
“The policy is not a general recognition of marriage in the income tax system”.
So the argument that has been made by the Government is false, in the sense that it gives an impression about this policy which is not actually true. He goes on to say that
“it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”
The Chairman of Ways and Means (Mr Lindsay Hoyle)
Order. I think we need shorter interventions rather than speeches—I would sooner save your voice for later.
Catherine McKinnell
On the basis of my hon. Friend’s insightful intervention, I am looking forward to his speech on this matter. He makes the point well, and it is the point that I am seeking to make. As the Chief Secretary to the Treasury has said:
“This policy is not about children and families…it does nothing for millions of families with children struggling to make ends meet.”
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I am grateful to my hon. Friend for giving way and for making such powerful points. When these points are put to the Government, they always say that the financial circumstances are such that there must be cutbacks somewhere. Is it not ironic that the Government are putting forward a policy that is so badly thought out that if anyone were asked to choose a priority for public spending, this would not be it? Should we not be taking real measures to tackle problems such as the bedroom tax and the changes in universal credit, all of which will cause much more damage than any benefit that this will bring about?
The Chairman of Ways and Means (Mr Lindsay Hoyle)
Order. I appeal for shorter interventions. We have time, but Members cannot make a speech as an intervention.
Catherine McKinnell
I thank you, Mr Hoyle, and also my hon. Friend whose intervention was powerful and to the point.
Catherine McKinnell
Indeed. Government Members often lament red tape and the complexity of the tax system. I am not entirely sure that they will be thanked for adding to it in this way and putting the burden of implementation on employers.
The apparent onus on taxpayers proactively to apply for this allowance is a concern that has been raised more widely. The Low Incomes Tax Reform Group has pressed the Government to ensure that a claim for the marriage tax allowance can
“be made on paper, as well as online; digital exclusion affects disproportionately people on low incomes, the very people to whom this relief is directed. It is particularly important that a paper copy is available since, in some cases, taxpayers will seek assistance from the voluntary and charitable sector with, perhaps, only one spouse being physically present at such meetings.”
LITRG goes on to urge that
“the claim/election process will be made as simple as possible—preferably a joint election rather than separate claim and election.”
I look forward to the Minister’s response to those concerns.
The complexity of the Government’s marriage tax allowance proposal has been commented on by the IFS, which stated, when the measure was first announced:
“One striking feature of the policy is that it complicates the income tax system. A transferable personal allowance for married couples capped at £1,000 and then withdrawn using a cliff-edge at the higher-rate threshold is not the simplest to understand. It is three years since another cliff-edge at the higher rate threshold was announced at the 2010 Conservative Party conference as a way of effectively means-testing Child Benefit, only to be removed and replaced with a less egregious taper at Budget 2012. The amounts involved here are less than in that case, which perhaps explains the willingness to cliff-edge again rather than implement a taper. Nevertheless, it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”
One might think that, as my hon. Friend the Member for Edinburgh East (Sheila Gilmore) pointed out, a Government who have so boasted about being committed to tax simplification would want to avoid further complicating the system. At the launch of the Office of Tax Simplification, the Chancellor commented:
“A decade of meddling and intervening has made the tax affairs of millions of families and businesses across the UK extremely complicated. We need to sort out this mess.”
What does the Office of Tax Simplification make of the marriage tax allowance, which will clearly make the tax affairs of couples and employers more complex? We do not know because, in the words of the Exchequer Secretary in response to a written question I tabled:
“The Office of Tax Simplification (OTS) has not made an assessment of the proposals for a transferable tax allowance.”—[Official Report, 12 February 2014; Vol. 575, c. 642W.]
Why on earth not? What could Ministers possibly fear from the outcome of such an assessment?
It may be clear now that the Opposition oppose the Government’s marriage tax allowance and will vote against clause 11. We believe that the marriage tax allowance is perverse and unfair. It is a poorly targeted use of resources and is overly complex, and our amendment to clause 11 presses the Government to undertake a proper review of the cost, the impact and the benefits for those who will receive it and for the overwhelming majority of married couples and families who will not benefit at all.
Amendment 3 calls on the Government to ensure that any such review includes an assessment of alternative tax reliefs that would benefit a much greater number of families, because we are not just opposing the marriage tax allowance today. Indeed, we have said that a future Labour Government would scrap this policy and use the money saved, together with funding from a mansion tax on properties worth over £2 million, to reintroduce the 10p starting rate of tax, meaning a tax cut for 24 million people on low and middle incomes, by contrast with the 4.2 million couples who will benefit from the marriage tax allowance. Crucially, almost half of those benefiting from a new 10p tax rate would be women.
We know that the Liberal Democrats are apparently implacably opposed to the policy introduced by clause 11 and secured a deal in the coalition agreement to go so far as to abstain on the measure. I believe it was before the 2010 general election that the now Deputy Prime Minister described the Conservatives’ proposal for a transferable tax allowance for married couples as
“patronising drivel that belongs in the Edwardian age.”
I know that Liberal Democrats have, as some might say, an irritating habit of saying one thing before a general election, then doing precisely the opposite—university tuition fees and the VAT bombshell spring to mind—or of saying one thing at any point in the electoral cycle and doing precisely the opposite: for example, 46 Lib Dem peers voted to retain the bedroom tax just 24 hours after their party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), said it was something his party could not “continue to support”. Although the Liberal Democrats may be thinking about abstaining on clause 11 as it stands, it is difficult to see how they could sit on their hands this afternoon and vote against our reasonable amendment.
We know that the Lib Dems apparently secured the policy of free school meals for every child in reception, year 1 and year 2 from September 2014, reportedly in exchange for agreeing to abstain on the marriage tax allowance. We of course back the policy, having piloted the idea in government in County Durham and Newham, with excellent results, but there are very real concerns about the way in which the policy was announced, and how it will be implemented. The initial pledge was for a “hot, nutritious meal at lunchtime”, but that is now being described as an aspiration. Ministers are now simply referring to a free, nutritious school lunch.
Many thousands of schools across the country simply do not have the facilities to ensure this provision. The Liberal Democrats have stated that around £80 million of the additional £150 million capital funding required for the project will come from an underspend in the Department for Education and an additional £70 million would be new money from the Treasury. [Interruption.]
I hear hon. Members on the Government Benches chuntering from a sedentary position. They seem very disturbed by the Liberal Democrat policy of free school meals and do not see how it is linked to the marriage tax allowance. Would they like to confirm that that was not an agreement, as has been reported?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The advice is not needed. There is a definite link, and if Members were to listen a little more closely, they would understand where the link is between the choice and where the money can be spent. Less advice and more listening might help all of us.
Catherine McKinnell
I thank the Deputy Speaker for his clarification. The link is clear. It is to do with the allocation of resources and the agreement that has been made. It also goes fundamentally to the heart of the Liberal Democrats and how they intend to vote on the matter. We believe they are likely to abstain on the measure, although we have not had that confirmed. We hope and assume that although they will abstain on the Government’s motion in relation to implementing the marriage tax allowance, they will support our call for a review. If the measure goes through, they would have as much of an interest as we would in ensuring that it is properly reviewed and monitored in the months to come, and that the Government take seriously the proposals for possible alternatives that benefit a larger number of families throughout the country.
The Opposition believe that the money allocated to the marriage tax allowance could be put to much better use elsewhere. That is why we have pressed the Chancellor to scrap it, and to use the money to give tax help to many more working people instead, including more married couples and more families.
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend agree that one of the problems of the married couples tax allowance as proposed by the Government is the situation of what might traditionally have been called the deserted spouse, often the wife who was left? What would happen in that situation? That is a very real issue to be answered.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I say once again that we must have shorter interventions? I know that many Members wish to speak. We have been going for a long time and have not even got to the Back Benches yet.
Catherine McKinnell
Although my hon. Friend’s intervention took longer than Mr Deputy Speaker might have liked, it was a very good intervention.
I would be interested to hear what Government Members think about the fact that this provision could very much reward men who desert their spouses, leave them with the children to care for, and then receive a tax benefit, but only if they marry the woman they ran off with.
Finance Bill
Debate between Catherine McKinnell and Lindsay Hoyle(11 years, 1 month ago)
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Catherine McKinnell
I thank the Minister for his comprehensive account of new clause 7 and for responding to our queries. As he has said, the Government want to introduce a number of new clauses and amendments to the Bill. Could you clarify, Mr Deputy Speaker, whether we are dealing with just new clause 7 at this stage, or are we taking any other amendments?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are wandering away from the amendment, and I know the hon. Lady just wanted to make a point on the amendment.
Catherine McKinnell
My point relates specifically to the amendment, Mr Deputy Speaker. Many businesses that manage to obtain funding are often required to provide their home as security. If this provision has a detrimental impact on small businesses and puts family homes in jeopardy, will the Government keep it under review?
Basketball (Funding)
Debate between Catherine McKinnell and Lindsay Hoyle(11 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Catherine McKinnell
I, too, congratulate the hon. Member for City of Chester (Stephen Mosley) on securing the debate. I had not realised that we had a little extra time, so I tried to be as quick as possible with my previous intervention—
Mr Deputy Speaker (Mr Lindsay Hoyle)
I hope the hon. Lady will be quick again.
Catherine McKinnell
I will try, Mr Deputy Speaker.
I have attended a few of the Newcastle Eagles’ games, and I am sure that my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) will share my enthusiasm for the amazing family-friendly atmosphere at them. Everybody should experience it as it is quite something.
Public Spending
Debate between Catherine McKinnell and Lindsay Hoyle
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
This morning, when I asked the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), for clarification of the Government’s commitment to funding for the reinvigoration of the Tyne and Wear metro, I was told to wait for the statement from the Chief Secretary to the Treasury. Unfortunately, his statement has made it no clearer to the people of Tyne and Wear whether that vital transport infrastructure will be given the investment that it needs in order to survive—investment that has not been made for 30 years—or whether it will be left to die on its feet.