(9 years, 5 months ago)
Commons Chamber8. What plans he has to introduce penalties for financial advisers who promote aggressive tax avoidance and tax evasion schemes.
This Government have been relentless in cracking down on tax avoidance and evasion. We have introduced a tougher monitoring regime and penalties for high-risk promoters of tax avoidance schemes, and the unprecedented common reporting standard will mean that by 2018 more than 90 countries will be exchanging information on offshore accounts automatically, helping Her Majesty’s Revenue and Customs to find and pursue offshore evaders successfully.
I thank the Chief Secretary for that answer. Does he agree that more has been done on tax avoidance in the past five years than was done in the previous 13, so craven were the previous Government before big business and big tax avoidance? Will he welcome the Financial Secretary’s announcement yesterday of further action on tax avoidance-promoting schemes?
The hon. Gentleman is absolutely right in both things that he says. The Financial Secretary’s announcement represented very important further progress, but if we look back over the past five years, we see that the relentlessness of our pursuit of measures to crack down on avoidance, be it the general anti-abuse rule in the tax system, the disclosure of tax avoidance schemes regime, the monitoring regime that we are putting in place or the measures to increase prosecutions for tax evasion, has made it clear that there is absolutely no tolerance for aggressive tax avoidance and tax evasion in this country.
(9 years, 6 months ago)
Commons ChamberThose analyses ignore some of the most important and most progressive policies put in place by the Government. They ignore the pupil premium, which is investing money in the life chances of young people. They ignore the extra early years education provided to three and four-year-olds, and to the most disadvantaged two-year-olds. They are not included in those analyses, but they are helping to ensure that young people have better life chances under this Government.
Does the Minister not agree that it is important to note that real wages are rising, real disposable income is rising, child poverty is down and inequality is down under this Government?
It is very important to note all three of those facts, but it is also important not to be complacent. There is a lot more to do to ensure that we continue to deliver the successful growing economy that is creating jobs, because ultimately getting into work is the best route out of poverty for families.
(10 years, 4 months ago)
Commons ChamberThe measures that my right hon. Friend the Schools Minister has introduced are not actually in the Finance Bill, and I hope that their impact will not be seismic in the literal sense, but I agree with my hon. Friend that they will make a serious difference to schools in his area and in other historically underfunded areas of England that have been campaigning for a long time for a fairer level of funding in their schools. I am glad to hear that my hon. Friend welcomes those measures.
Are not the most important aspects of the Bill the things that it will do for the least well-off? The previous Government abolished the 10p tax rate, resulting in the least well-off paying higher taxes. Is it not right that this Government are helping those people?
I am grateful to my hon. Friend for his comments, and he is absolutely right. The tax system we inherited was, as with so many other parts of the previous Government’s economic strategy, full of holes and leaking revenues all over the place. The Labour party had spent all its time on a prawn cocktail offensive in the City, sucking up to the banks, rather than concentrating on making sure that everyone in this country paid the proper amount of tax. As a result of action we are taking, we are raising—so far—an extra £60 billion in this Parliament, and before the election we expect tens of billions more to be raised in revenue that would not have been raised had we accepted the Swiss cheese that Labour left us.
May I support my right hon. Friend in taking no lessons from the Labour party, which, when in government, was too often the tax avoider’s friend? It allowed a culture of industrial-scale tax avoidance to come into existence, and tax revenues were depleted by its neglect of the system.
(11 years, 3 months ago)
Commons ChamberIf the Government were to go out and borrow £28 billion as some suggest, what would the effect be on fiscal stability and interest rates for homeowners?
My hon. Friend rightly draws attention to the figure of £28 billion—the extra borrowing in the alternative Queen’s Speech put forward by the Opposition. It confirms yet again that their approach is to borrow more and more, taking no account of the consequences. Perhaps that is one reason why the Leader of the Opposition, in a well-known radio interview, refused to accept that his party would increase borrowing and why his proposals have rightly been dubbed a “Milishambles”.
(11 years, 9 months ago)
Commons ChamberRather than the proposal to use revenues from the auction, there are other policies that we can use to support the objective highlighted in the question, including those highlighted by the hon. Member for South West Devon (Mr Streeter)—planning reform, releasing public sector land and other fiscal steps that the Government can take which do not involve committing to this policy now.
Will the Minister confirm answers to my written questions—that the reserve for the auction is £1.4 billion and that half has been allocated to science and higher education investment? Is this a case of Labour spending money that we do not have, yet again?
It is exactly that. The reserve price is £1.4 billion, of which £600 million has been allocated to important science projects, such as the Graphene institute in Manchester. Were we to follow the advice of the Opposition, we would have to cancel significant science projects which are vital to growth in this country. That would be the wrong policy for the British economy.
(11 years, 11 months ago)
Commons ChamberI had the pleasure of spending some time in Cornwall earlier this year, and of driving down that stretch of road. I understand the case that my hon. Friend makes. It has been made to me by Cornish colleagues from both coalition parties, and we will of course look sympathetically at any requests that might be made. It is always welcome to see local funding coming forward, and to see a local area taking responsibility for what it wants to do.
The way in which the guarantees will be structured will be incredibly important for the planning by the financiers who wish to unlock these important projects. Will this involve credit support for the land or undeveloped infrastructure, credit support for the development finance piece, or credit support for the off-take or use of the infrastructure at the end of the day?
As I shall explain, we are not seeking to circumscribe unnecessarily the nature or structure of the guarantees, either through the Bill or through the announcements that the Government have made. We are willing to have discussions with those involved in projects that meet the criteria that have been set out, and it might well be that different structures of guarantee will be appropriate for different projects. I do not wish artificially to circumscribe the flexibility of the scheme in advance of the discussions with the individual projects. I am sure that those involved in the projects will be well able to have discussions with Infrastructure UK about the nature of the guarantee that would suit them best.
I was explaining the convention that the Government should not rest significant expenditure under common law powers on the sole authority of general supply legislation. Accordingly, to offer the support we want to see, Government need Parliament’s authority to incur expenditure in connection with agreements to provide financial assistance and to pay out on liabilities should they be called upon.
Today we seek authority for the Treasury to incur up to £50 billion of expenditure in connection with giving financial assistance to infrastructure across the UK. That financial assistance might take the form of guarantees, loans, indemnities or other support backed by public funds. It could be used—
The Secretary of State will have to make a decision in the normal way. I am sure that he will have heard my hon. Friend’s comments, and I shall ensure that they are passed on.
I must make some progress, but I will give way again later.
Housing guarantees, alongside a wider package of housing and planning reforms, will contribute to the construction of up to 70,000 homes, including affordable housing, and opportunities for first-time buyers to get on to the housing ladder. That will ease conditions in overcrowded and overpriced residential areas, and will enable people to locate near to jobs.
The steps that we plan to take, and which the Bill enables us to take, will help more companies in a wide range of sectors to grow and flourish, not just in the south-east of England but throughout the UK, and will give more people access to a wider range of opportunities. The benefits will also be felt in Scotland, Wales and Northern Ireland. The UK’s hard-won fiscal credibility should benefit the whole of the UK.
I hear the case that the hon. Gentleman is making. We have made important announcements recently, particularly in relation to rail links in and to Wales, which I hope he welcomes. I will not support specific projects that may be in gestation, but we will work with the Welsh Assembly Government, who are principally responsible for such proposals. If there are projects for which a guarantee is appropriate, we will consider that very positively in the light of the representations made to us.
As the hon. Gentleman will know, great interest has already been expressed by investors and those involved in projects since the UK guarantees idea was launched six weeks ago. Since then, about 40 companies and project sponsors have come forward, responsible for projects worth well over £5 billion and covering high-priority investment in areas such as energy, transport, water, waste and telecommunications. Detailed discussions are already taking place with, for example, those involved in the Mersey Bridge Gateway project, which is considered to be one of the world’s top 100 infrastructure projects. We have also indicated that we would be willing to consider a guarantee relating to the green deal.
There should be no doubt that the Government are in a position to deliver this policy, and the investment it will unlock, only because of the decisive action that we have taken to reduce the deficit, and the credibility that that has secured for this country. When we came to office, the UK taxpayer was paying interest rates comparable to those of Spain and Italy. Were that still the case, the course of action that we are taking now would be impossible. Because we made tough decisions to regain control of our public finances, we now enjoy interest rates of only about 2%. That is the result of a responsible approach to spending and a credible long-term commitment to regaining control of the public finances.
Despite those tough decisions, we are already spending more on critical transport and communications infrastructure directly as a Government than was spent at the height of the spending boom. We are providing £18 billion-worth of rail investment, supported by the spending review, and a further £9.4 billion of infrastructure enhancements for the rail network was announced in the summer. Ten super-connected cities—the hon. Member for Swansea referred to super-connectivity—will enjoy ultrafast broadband and high-speed wireless connectivity as a result of Government investment, with funding set aside for a further 10. We are also focusing on how we can reduce burdens and keep costs low so that investment, whether public or private, goes as far as possible.
Last week we announced a package of measures to reduce burdens on business still further, including the reform or removal of more than 3,000 regulations to reduce their impact. That constitutes the most ambitious action ever proposed by a modern British Government to set business free. Our spending plans have prioritised capital spending that supports balanced sustainable growth across the country, and our efforts to reduce burdens on businesses mean that investment has gone even further. That approach is producing results despite difficult conditions. More than 1 million private sector jobs have been created under this Government, and this year we rose from 10th to eighth in the World Economic Forum rankings of international competitiveness. The Bill could allow us to unlock even more investment without placing material additional burdens on the public finances, enabling the Treasury to support infrastructure delivery so that we can make better use of private sector finance, skills and incentives, while also managing exposure to the taxpayer.
Under the previous Government, the UK fell in the infrastructure world rankings from seventh in 1998 to 33rd in 2009—behind Namibia, Slovenia and Cyprus. We are now up to 24th and taking the necessary steps to make the further improvement this country needs. There can be no argument with the view that we are delivering far more than under the plans we inherited from our predecessors.
The Bill contains appropriate safeguards and checks to ensure transparency and accountability to Parliament for actions taken under it. It imposes an upper limit on the amount of expenditure that the Treasury and Secretary of State may incur, which can be increased through affirmative resolution. It also requires the Treasury to update the House regularly. In answer to a point that was made earlier, where expenditure is charged on the Consolidated Fund, the Bill requires the Treasury as soon as practicable to lay a report before Parliament specifying the amount paid. Any expenditure or contingent liabilities will be reported in the whole of Government accounts.
One of the key sensitivities is that one does not want a guarantee to end up like quantitative easing, whereby guarantees are issued and nothing actually comes out the other end. To what extent and how will the Treasury monitor the situation, to ensure that this is a results-based guarantee that brings forward such projects and really makes them happen?
I am not sure I accept my hon. Friend’s characterisation of quantitative easing. One of the strengths of the tight fiscal policy that this Government have run and will continue to run is precisely that it allows the monetary activism that we have seen in this country and, indeed, in other parts of the world. However, he is right that the purpose of the Bill is to enable infrastructure projects to come forward quickly. That is why one of the key criteria by which we will decide whether to issue a guarantee to a particular project is that it can get under way within 12 months of the guarantee being issued, and that it has the necessary consents in place. This is about bringing forward projects now; it is not about offering guarantees now for projects where nothing will happen for many years to come.
(12 years, 4 months ago)
Commons ChamberNo, I will make some progress, because, as my hon. Friend also said, and as the House knows, the Government have already set out plans to reduce the main rate of corporation tax to 23%, but this year’s Finance Bill goes even further for precisely the reasons that he gave.
Clauses 5 and 6 will reduce the main rate of corporation tax to 22% by 2014—a headline rate that is dramatically lower than that of our competitors, the lowest in the G7 and the fourth lowest in the G20.
On that point, it is incredibly important that the Government are reducing the rate of corporation tax. That is great news for British business. However, British business pays corporation tax. Should not we take proper action against multinationals that rip off our country and do not pay proper taxes, and ensure that they pay a fair share of tax, like every British business, so that we have a level tax playing field for all companies?
I am grateful to my hon. Friend for his support for our measures on corporation tax. The fact that they have been welcomed not just by hon. Members, but by the CBI and a range of business organisations—and, indeed, that they have been shown to increase business investment—will help this country retain its international competitiveness, which declined markedly when the Labour party was in government.
My hon. Friend is right that we must deal with tax avoidance by companies, and there are a number of measures in the Bill that are precisely aimed at ensuring that businesses pay their fair share of tax, which I am sure he would wish to support. Furthermore, through clause 180, we are introducing vital reforms to the controlled foreign companies rules, and, through clause 19, a patent box to allow UK businesses to operate in an ever-more globalised world. Hopefully, we will encourage some of the businesses to which he refers to return to the UK. The latter measure has already secured a major investment in this country by a major chemicals company.
As well as creating the competitive conditions for enterprise to thrive, we must ensure that businesses have the support they need to seize the opportunities in the recovery. That is why we are taking action in the Bill to support the small businesses, the start-ups and the entrepreneurs that are critical to creating new jobs in the recovery. Clauses 39 and 40 increase the annual investment limit for enterprise investment scheme and venture capital trusts to £5 million. In that spirit, through clause 28, we are introducing a new scheme—the seed enterprise investment scheme—to encourage further investment in small, start-up companies, which are the kind of companies this country needs more of as the recovery continues. Those are significant steps to encouraging new growth, galvanising new sectors, and broadening access to finance for UK business, helping to rebalance our economy away from its over-reliance on one sector and one region.
We are committed to supporting a private sector recovery right across the UK. Clause 44 introduces a new, enhanced capital allowance regime for businesses in seven enterprise zones in England, three in Scotland and one in Wales.
(12 years, 9 months ago)
Commons ChamberThe hon. Gentleman can certainly ask that and I certainly will do so. The Government are setting out this new offer, which is conditional on agreement being reached. The Government will continue to work very hard to achieve that agreement, both in the scheme-specific discussions and in the central process, which we will also continue.
Does the Chief Secretary agree that, as longevity is still increasing by about two years a decade and is likely to carry on doing so, we cannot stick our head in the sand or sit on the fence, as we have seen the Opposition do? All parties need to work together to reach a proper consensus, so that we can achieve a long-lasting, sustainable settlement.
I think that it would be in the national interest to have a proper cross-party consensus on today’s proposals. The hon. Gentleman is right to highlight the increases in longevity. By linking the normal pension age to the state pension age we can ensure that the taxpayer is protected from that in future, because as longevity increases, the state pension age can be changed. That is the right way to protect pensions, rather than the previous Government’s cap and share arrangement, which would have meant complex negotiations every three years. That would have resulted in both increases in contributions and reductions in benefits every three years. By setting out this scheme now, we have one that can last for 25 years without the need for further negotiation.
(12 years, 11 months ago)
Commons ChamberI am aware of the survey, and of course many businesses are experiencing difficulties, not least owing to the headwinds in the global economy that we—along with other countries—are encountering. That is why we are taking measures to help businesses such as those to which the hon. Lady has referred, through our plan for growth and in relation to regulation, the planning system and investment in the transport infrastructure. I am sure she agrees that constitutional uncertainty about independence in Scotland is causing serious damage to businesses and business investment there.
Is not the most important contribution that the Government can make to economic growth to be “united at the top” and to have “a credible economic policy”?
I agree very much with that. I believe that it is a quotation from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). We are united at the top and we have a credible economic policy, while the Opposition—if I may use the former Chancellor’s phrase—are “not at the races”.
(13 years, 2 months ago)
Commons ChamberCertainly not. That is why in Merseyside, we have announced a new enterprise zone that will encompass the Liverpool Waters and Mersey Waters regeneration projects. The regional growth fund has announced several projects in Merseyside, and the Work programme in Merseyside will help to deliver support for people to get off benefits and into work; the second contractor got under way yesterday. I hope the hon. Gentleman agrees that is a serious programme to help people off benefit and into work in Merseyside.
Will the Minister confirm that the recent announcement of the sharpest fall in unemployment in a decade and the creation of 500,000 jobs in the private sector over the past year shows hope that things are going in the right direction for unemployment?
We always said that the economic recovery would be choppy, but it is none the less welcome that we have seen significant job creation in the private sector over the past year. That offsets some of the job reductions in the public sector that are necessary as part of our deficit reduction programme.
(13 years, 10 months ago)
Commons ChamberIf anything demonstrates the independence of the OBR it is the appointment of the head of the IFS to be the head of the OBR, and I hope that will put an end to any such criticisms from the hon. Gentleman’s side of the House. The analysis was interesting, but the analysis we published at the time of the Budget was robust and soundly based. I have carefully studied the IFS’s additional analysis, and I think it makes some assumptions that push the boundaries. As a result it is not an analysis the Treasury would stand by. I would stand by the view that the measures we announced in the Budget were progressive and fair and hit the people on the highest incomes hardest.
Can the Chief Secretary tell the House the benefits that the regional growth fund will have for neglected regions, in particular coastal and seaside towns?
I fear that the hon. Gentleman will have to wait until a week tomorrow for the spending review announcement to hear details of that sort, but I can tell him that the purpose of the regional growth fund is precisely to ensure that areas hit hardest by public spending cuts or areas most dependent on the public sector have an opportunity to put forward proposals for measures that would support their economic growth. The regional growth fund has been established to meet those proposals.
(14 years, 1 month ago)
Commons ChamberI am going to make progress for a few moments, or the former Chief Secretary will never get a chance to have his say.
Clause 4 takes further action to tackle the deficit by increasing the standard rate of insurance premium tax from 5% to 6%. The higher rate of insurance premium tax will increase from 17.5% to 20% from 4 January 2011, to bring it into line with the new VAT rate. The increases are both fair and sustainable.
(14 years, 2 months ago)
Commons Chamber10. What recent assessment he has made of the level of growth in the UK economy compared with those of other OECD countries.
The independent Office for Budget Responsibility will publish forecasts for growth in the UK ahead of the emergency Budget.
There is too much deprivation in Dover and Deal. We need more jobs and money locally. What action will the Government take to increase the trend growth rate of this nation, so that the people of Dover and Deal get more jobs and money, and Britain does better?