Corporate Tax Base

Chris Philp Excerpts

Tuesday 20th December 2016 General Committees

[Jane Ellison]

I thank the hon. Lady for her questions; they were good, as I would expect. As I said, the UK will not give up member state sovereignty over our tax base without very good reason, and we are not convinced that there are such reasons in the directive. On some measures, such as the ATAD measure to which I referred, we have come together and been able to agree something.

Having direct control over our tax base enables us to respond to events in our own jurisdiction. We have debated tax a lot over recent years, and it has become apparent to all of us in this House that the challenges we face are global. Leaving aside the timeline issue, it is quite hard to envisage a situation in which there would be a sufficiently compelling reason—the hon. Lady set out a hypothetical situation—to give up direct control over our tax base, given the global challenge we face with some of these tax issues.

We are working very well domestically, with almost 30 measures passed since 2015—some of them are yet to come into effect, and others are already working—and have co-operated through the OECD. For those reasons, we do not see this proposal as compelling enough to cause us to give up something as important as direct control over our tax base.

[Chris Philp (Croydon South) (Con)]

It is a pleasure to serve under your chairmanship for the second time, Mr Hanson. I sympathise with the points made by my hon. Friend the Member for Mid Dorset and North Poole and the Minister, but I have two questions.

On the question of sovereignty over taxation, does the Minister agree that the UK being a signatory to the OECD BEPS arrangements she referred to entails an implicit loss of sovereignty, because we are making an international agreement? Does the sovereignty argument not apply equally there?

My second question is on European taxation. The Minister made some powerful points about the global nature of taxation and said that acting at a European level alone may not be fully effective. Does she think that European Union member states adopting these proposals would prevent some multinationals—I am thinking particularly of companies such as Amazon and Google—from effectively running their European sales via Dublin and Luxembourg in order to benefit from very low rates of taxation and avoid paying tax in member states where sales and staff are located? I fully accept the reasons the Minister gave, but what assurance can she give the Committee that we will successfully clamp down on those tax-planning—I will not say evasion—measures if we cannot do so via this instrument? What other channels could we use to avoid that happening?

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[Helen Goodman]

I want to take hon. Members back two or three years to debates in the main Chamber when the UK was asked to contribute to the Irish bail-out. I had an extremely interesting conversation at that time with colleagues from the Ulster Unionist party. They pointed out that the Irish had made cuts in their corporation tax in an attempt to attract inward investment. They were extremely irritated by this, because some firms had relocated from Northern Ireland to the Republic; Northern Ireland had lost jobs, output and economic activity. However, the Republic’s tax take, which should have supported it, was not going into its coffers, so there was a double whammy, and we in Great Britain and Northern Ireland were asked to contribute to the Irish bail-out. Understandably, Northern Ireland Members were extremely unimpressed by this sequence of episodes.

That made me think we need to get a handle on competitive corporate tax-cutting around the world. Ministers are trumpeting the possibility of having the lowest corporation tax in the western world, but I am not sure how clever it is for countries to undercut one another constantly. There is a serious risk that we so distort our tax arrangements that we will not raise enough money to run the public services that we need for a modern economy. Yesterday in the Chamber, we discussed the importance of supporting science and R and D, for example. We so undermine our capacity to raise money to do things that we undermine our economic activity.

[Chris Philp]

I thank my Treasury Committee colleague for giving way. How does she respond to the fact that even though we have cut corporation tax, the total pound amount of corporation tax paid has gone up?

[Helen Goodman]

I am not sure what time period the hon. Gentleman is talking about, but we have had a recovery since the great crash; if we have more economic activity, we will get more corporation tax receipts, irrespective of corporation tax rates. I do not subscribe to extreme Lafferism; I am not convinced that going down the path of competitive tax cutting is a good idea. A common consolidated corporate tax base is an aspect of that. I see that the impact assessment states that a CCCTB would increase growth by up to 1.3%. That is an astonishing amount of money—more than twice the benefits that the Government estimate would come from signing the Transatlantic Trade and Investment Partnership. Compliance costs would be expected to decrease significantly as well, which is an extremely business-friendly approach.

I have not looked in infinite detail at every aspect of the proposals, so I can believe that they are not satisfactory, but we need to be careful about saying that we will not co-operate with other countries on this. The Minister knows that the OECD process is extremely slow. If the European Union was united on what it proposed in the OECD, we might be able to speed up and improve the international settlement. She is absolutely right to say that we need agreement with the Americans.

On the interrelationship with Brexit and the point made by my hon. Friend the Member for Bootle, I asked the Minister whether she had considered the read-across to the Brexit negotiations, and she did not respond, so I take it that she has not considered that. The Treasury Committee visited Berlin and Rome in September—unfortunately, the hon. Member for Croydon South was not able to be there—and we had interesting conversations. One that comes back to me is the conversation we had with the Bank of Italy about the negotiations with respect to banking.

One issue on the table is banking regulation. We have had a constant stream, if not a barrage, of lobbying from the City—we can see the City if we look out of the window—about its concerns to maintain passporting, common regulations and so on, so that we do not lose activity to Frankfurt, Dublin or even Paris. When the people on the other side of the table, our European partners, consider what concessions and agreements they will make on banking regulation, they will have in their minds the risks for their banks once the UK has left the European Union. One of the really big risks for them is our cutting our taxes on banks. If we cut those taxes significantly, that would make London even more attractive. By resisting these measures, the Minister makes it look more likely that we will reduce our taxes on the banks; that increases the resistance on the other side of the table in Brussels to the kind of regulatory settlement that we would all like to see, for the benefit of the people in the City of London who bring in so much tax revenue to this country.

I am not sure whether the detail of the measures are absolutely right, but I do think that we run a risk of appearing to be sceptical. The Minister does not have a history as a Eurosceptic, but let her not run scared from those in her party who were hard Brexiteers.

Oral Answers to Questions

Chris Philp Excerpts

Tuesday 29th November 2016 Commons Chamber

[Simon Kirby]

The Government have been clear that we will not comment on every turn of the negotiations. Indeed, the negotiations have yet to start. However, we are absolutely committed to getting the best possible deal we can.

[Chris Philp (Croydon South) (Con)]

Does the Minister agree that the City of London plays a very important part in helping businesses to raise capital and that maintaining clearing in euros in the City of London will be an important way to ensure that the City retains that status?

[Simon Kirby]

The City of London is a very important financial centre and we fully intend it to remain as such. Clearing is an important element of the negotiations, and we will do all we can to retain London and the UK as a financial centre of excellence.

Autumn Statement

Chris Philp Excerpts

Wednesday 23rd November 2016 Commons Chamber

[Mr Hammond]

That is not what happened. I am afraid I am not responsible, and neither is my right hon. Friend the Prime Minister, for what newspapers choose to write in their headlines. What she said, what she believes and what she is committed to is ensuring that there are proper channels for the voices of consumers and workers to be heard at board level in companies, so that those voices can be taken into account in a proper way in decision-making processes—and that is what will happen.

[Chris Philp (Croydon South) (Con)]

I join colleagues in welcoming the £1.1 billion infrastructure spending, particularly as the Brighton main line is falling apart and needs fixing if we are to enhance the productivity of Croydon constituents and others. What reassurance can the Chancellor give the hundreds of thousands of people using this line that the Transport Secretary will look at upgrading and fixing that infrastructure?

[Mr Hammond]

I can certainly guarantee that the Transport Secretary will look at it. What I am afraid I cannot guarantee for my hon. Friend is where it will be prioritised in the rail investment programme—as he knows, it is a very long-term programme. What I have done today is announce specific funding for piloting and trials of digital railways. This is another transformative area, because if we can get trains on main line railways running at the kind of headways we are used to on the London underground, for example, we will not need to build expensive additional infrastructure; we will be able to squeeze a lot more juice out of the infrastructure we have, and that is my preferred route forward.

Charter for Budget Responsibility

Chris Philp Excerpts

Wednesday 20th July 2016 Commons Chamber

[John McDonnell]

Let me just finish another paragraph before I give way again.

A new set of rules for fiscal policy is needed. I know that some Members have questioned the need for fiscal rules at all. During the discussions on the Fiscal Responsibility Bill in early 2010, I recall the right hon. Member for Tatton (Mr Osborne), who was then shadow Chancellor, saying that the Bill was a “completely feeble stunt” and the

“biggest load of nonsense that this Government have had the audacity to bring to Parliament in this Session”.—[Official Report, 5 January 2010; Vol. 503, c. 72.]

That was the then shadow Chancellor condemning Gordon Brown for having a fiscal rule. A short while later, when he became Chancellor of the Exchequer, he produced his own fiscal rule: the fiscal responsibility charter. He missed every target in his first charter, so he brought in a second one. He was on course to miss the targets in his second one, so he brought in a third.

[Chris Philp (Croydon South) (Con)]

The shadow Chancellor has just questioned the performance of the economy under the fiscal rule, but is it not the case that the deficit fell from 11% to 4% of GDP, that the economy created 2.6 million jobs—more than in the rest of Europe put together—and that the employment rate increased by 4% and now stands at the highest level in our country’s history? Is not that evidence that the approach of the last Government worked and should be continued?

[John McDonnell]

I remind the hon. Gentleman that under his own Government’s fiscal rule, the deficit should have been completely eliminated last year, and debt should have dropped but it has increased. I will send him a reading list.

Oral Answers to Questions

Chris Philp Excerpts

Tuesday 7th June 2016 Commons Chamber

[Mr Osborne]

Both the downward revisions to which the hon. Gentleman refers—from the OECD and the IMF—are specifically for this year and in both cases the organisations attribute that to the referendum on our membership of the EU and the potential exit from the EU. They say that if the country votes to remain, however, they expect activity to bounce back and they have not revised down growth for next year.

[Chris Philp (Croydon South) (Con)]

Does the Minister share my concern about the activities of ambulance-chasing law firms which encourage fraudulent whiplash claims, of which I have had personal experience? Can the Minister update the House on the Government’s plans to clamp down on this outrageous practice?

Budget Resolutions and Economic Situation

Chris Philp Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Mr Osborne]

That is exactly the position set out by my right hon. Friend the Secretary of State, and agreed by me and the Prime Minister. We understand that if we do not control spending, we will have a fiscal crisis. Because we are controlling spending and have passed difficult welfare legislation in recent months, the deficit is coming down and we are delivering economic security.

[Chris Philp (Croydon South) (Con)]

Given what the Chancellor just said about the importance of fiscal responsibility, will he confirm that, had he listened to the advice of the Labour party over the past five years, our national debt would be £900 billion higher?

[Mr Osborne]

My hon. Friend is absolutely right. The analysis shows that, had we not taken the decisions to reduce the structural deficit, we would have added £1 trillion further to our national debt. That is proof that we can never trust Labour with the nation’s public finances.

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[John McDonnell]

I find a form of electoral politics, where you target a vulnerable group in society just because they do not vote for you, unacceptable. Not a word of apology! One nation Conservativism? It is a contradiction in terms.

[Chris Philp]

May I remind the shadow Chancellor that the richest 20% are now paying 52% of all income tax, which is up from 49%, and that the national living wage is putting money into the pockets of our country’s poorest citizens?

[John McDonnell]

The hon. Gentleman refers only to income tax. If he had looked at last weekend’s analysis of the overall cuts and what has happened with regard to tax and benefits, he would have seen that it is actually the poorest decile who are paying the most. The two groups hit hardest are young women with children and older women with caring responsibilities. Some 81% of the cuts are falling on women. This is a discriminatory Budget.

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[George Kerevan (East Lothian) (SNP)]

Let me begin by associating the SNP with the words of the Chancellor and the shadow Chancellor in expressing sympathy for the people of Belgium—Flemish, Walloon, and recent immigrants—at this tragic hour.

I must give the Chancellor his due. He gave us a bravura performance: in my view, a more assured and more interesting performance than we were given last week. However, I am always worried when he goes into his expansive, emotional mode. What is he hiding? We know what he hid last week, which was the fact that he would have to come back and tear up his Budget and create a new one, but what did he hide this week? He hid what he always hides and never addresses: the crucial issue of productivity. Without productivity growth, there can be no tax growth, no jobs growth and no wage growth. The truth is that, under this Chancellor, productivity has risen at an annual average of 0.1%. Since the top of the boom in 2007, the cumulative increase in UK productivity has been less than 1%. That is the Chancellor’s failure.

I have great respect for the Chancellor, but he is not a Chancellor who ever had a real job. He is not a Chancellor who ever worked in the private sector. He is not a Chancellor who ever had to lie awake at night—as I have, and as, I am sure, have many other Members on both sides of the House—and worry about how to pay the next wage bill. This Chancellor is an intellectual Chancellor: that is his problem.

[Chris Philp]

I have spent the last 15 years setting up and running businesses. As someone who has done that, I am glad that it is this Chancellor who is sitting in that seat, because he is the man who has created jobs and helped businesses like mine! [Interruption.]

[Mr Speaker]

Order. May I just say, for the benefit of the House, that moderation and good humour are the precepts of “Erskine May”. Members on both sides of the House can learn from the right hon. and learned Member for Rushcliffe (Mr Clarke), who has just given a textbook example of a robust speech made with good humour. Many Opposition Members can do the same, and new Members could learn from them.

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[Chris Philp (Croydon South) (Con)]

I would like to start with fiscal responsibility, as the Chief Secretary is on the Front Bench. Fiscal responsibility is very important —for the sake of our children, if nothing else. I have two-year-old twins, and there is nothing noble, moral or ethical about consistently spending more than we can afford and sending the bill to the next generation. Moreover, as the Chancellor eloquently put it earlier, without fiscal responsibility we cannot deliver the services that are so important.

Clearly, a good start has been made on fixing the deficit left behind in 2010; about half of it has been eliminated. Labour Members are right to point out that there is still more work to do, but it does not seem entirely appropriate for them to give angry lectures on the topic, when they have opposed every measure proposed by the Government over the last five years to reduce the deficit. In fact, had we followed their advice during the last Parliament, our national debt would be £900 billion higher than it is today.

During his thoughtful speech, my colleague on the Treasury Committee, the hon. Member for East Lothian (George Kerevan), suggested that high spending during the late 1940s and 1950s demonstrated that we could in fact spend money to grow. I am afraid that I dispute that analysis, because that spending spree ended in 1976, when we had to go cap-in-hand to the IMF. Even Denis Healey, the then Chancellor of the Exchequer, said:

“You can’t spend your way out of a recession”—

a lesson we would do well to remember.

[George Kerevan]

My point was to go not into the 1970s, but into the very specific period of the 1950s, when national debt as a share of GDP was significantly higher—twice as high—in many years than it is now. That did not lead to a burden on the generation that was young then—my generation—which is in fact extremely well-off as a result of that spending. I was trying to look at whether borrowing per se disbenefits future generations, and it does not—it depends on how we spend the money.

[Chris Philp]

I must respectfully disagree with the conclusions of my Treasury Committee colleague. If we look at economic performance in the 1960s and 1970s, we see that the enormous debt overhang, with the state spending too much money, was a drag on the economy and culminated in the 1976 bail-out. That was the natural conclusion of the overspending that started in the 1950s and continued through the post-war consensus period, which ended only in 1979.

The second main criticism levelled at the Budget by Opposition Members is on the issue of fairness. I am afraid I disagree with the comments made over the weekend by my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith). This is a fair Budget, but let me produce some evidence to substantiate that.

Over the last five years, spending on disability benefits has increased by £3 billion, and it is forecast to increase further. That strikes me as fundamentally fair. We are spending more than we ever have on the NHS and on education—particularly on pupils from low-income backgrounds, via the pupil premium. Moreover, we are introducing the highest-ever national minimum wage—the national living wage—which takes effect in about a week’s time. We have taken millions of people out of income tax entirely, which disproportionately benefits people on low incomes. We have frozen petrol duty once again, which also disproportionately benefits people on low incomes, because things such as petrol duty are inherently regressive.

If we consult the Treasury’s distributional analysis, we see that the lowest 20% of earners pay just 6% of tax; we would expect that to be 20% if everything was even. They will pay the same in 2019-20 as they paid in 2010, while the top quintile will pay 52%—up from 49% five years ago. The highest earners will therefore pay proportionately more in five years’ time than they did five years ago. This analysis excludes the effect of the national minimum wage; if that is included, the skew will go even further. I believe that this Budget is a fair Budget. It protects spending on the most vulnerable, and those with the broadest shoulders are bearing the burden.

Let me turn briefly to business. Before coming here, I spent 15 years setting up and running entrepreneurial businesses. There is a reason why our economy has created 2.4 million jobs in the past five years, and why youth unemployment in my constituency is down by an incredible 62%—it is not an accident. It is because corporation tax has been cut, which has encouraged businesses to invest in creating jobs. I am delighted that the Chancellor is continuing this very successful long-term economic plan—[Interruption.] I see it commands widespread support—with further cuts in corporation tax and capital gains tax to encourage investment. My Treasury Committee colleague suggested that lower corporation tax encouraged share buy-backs, which is a bad thing. I would respectfully suggest that share buy-backs cycle money back into the investor community, who can then reinvest in other opportunities.

I welcome the Government’s action on international tax evasion through the BEPS initiative, although they could forerun that with further moves on transparency and disclosure unilaterally in the UK, as has been suggested. There is a consultation document on giving the Financial Policy Committee further powers to direct buy-to-let mortgage lending, which appears to be very high. I urge the Government to look seriously at those proposals and enact them at the earliest opportunity.

I support this Budget. It is good for business and good for our country—and most of all, it is fair.

Budget Changes

Chris Philp Excerpts

Monday 21st March 2016 Commons Chamber

[Chris Philp (Croydon South) (Con)]

Will the Financial Secretary confirm that spending on disability payments has increased by £2 billion over the past five years and will increase by a further £1 billion over the coming five years?

[Mr Gauke]

Actually, the figure is slightly more than that over the past five years. Disability spending has risen significantly under this Government, even though we inherited the largest deficit in our peacetime history.

Enterprise Bill [Lords]

Chris Philp Excerpts

Wednesday 9th March 2016 Commons Chamber

[Jonathan Reynolds]

I admire the attempt to get more people involved in local government by giving councillors more power—all hon. Members would celebrate that—but my point to the hon. Gentleman is this is not real power. It is an attempt to introduce a national liberalisation through the back-door veneer of devolution.

Another disappointment in the process was the Government’s consultation, which hon. Members have mentioned. It has been described to me on numerous occasions as a whitewash. The consultation concludes that the majority of responses were in favour of the proposal to devolve the power, yet in answer to a written parliamentary question to me on Monday, the Minister could not tell me how many of the 7,000-plus responses were against the proposal. How can the Government conclude that the majority of respondents were in favour of the proposal when they cannot even give the House the numbers? I was very disappointed with that answer. It should not be beyond the capabilities of the Department for Business, Innovation and Skills to work out how many respondents are for or against a Government proposal. I hope the Minister will be able to rectify that from the Dispatch Box and provide some much needed transparency.

My fundamental opposition to the clause comes from a passionate desire to keep Sunday special. When Sunday trading rules were relaxed during the Olympics, we were promised that it would be a temporary measure only, and yet here we are not even four years later with this proposal in front of us. The proposal ignores the wishes of retail staff. A staggering 91% of retail workers in larger stores do not want an extension of trading hours on a Sunday. To them, Sunday is a special day, much as it is in my household. I have four young children and two dogs, so I cannot claim that my Sundays are particularly restful or peaceful, but they are special—a time for the whole family to spend together. That should be the same for retail workers, more than half of whom already feel pressured to work Sundays.

[Chris Philp (Croydon South) (Con)]

I share the hon. Gentleman’s desire to keep Sunday special, but is that not a matter of personal choice for him and for me individually, and not something for Parliament to impose by legislation?

[Jonathan Reynolds]

If the hon. Gentleman approaches this with good intentions, I advise him to talk to some of the retail workers in his constituency to see how they feel about the autonomy they have to decide whether they get to work longer Sundays or not. It is worth pointing out that none of us debating this in the House has to work Sundays if we do not want to.

The current regulations are a good compromise. Shops can trade on Sundays and staff can work if they want. At the same time, Sunday remains a special day, different from any other day of the week. Retail workers can spend some time with their families.

I do not believe the business case for changing Sunday trading regulations stacks up. Retailers already do very well on Sunday, with lots of footfall during a relatively short time window, which makes for more effective trading. The measure will also have a negative effect on smaller shops and retailers that are not subject to the regulations. Their businesses will suffer. In the most recent example of relaxation of Sunday trading—during the Olympics—retail sales actually declined.

As well as declaring my interest as an USDAW-sponsored MP, I am likewise very comfortable declaring my interest as a practising Christian. Understandably, that forms part of my opposition to any changes to Sunday trading, which I know I share with Members on both sides of the House. Of course, we live in a diverse country—I am extremely glad that we do so—but we should recognise that Christianity is the largest religion in this country. For Christians such as myself, Sunday is a special day. Sunday is when my family and I attend church, and the opportunity to do so should not be denied to people who have to work Sundays, whether in the morning or the evening.

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[Bill Esterson]

There are similar examples up and down the country. My hon. Friend is absolutely right.

Let me turn to some of the evidence we have been given in the lead-up to this debate. During the Olympics, convenience stores experienced a fall in Sunday trade of up to 7%. There was also a displacement of trade to different times of the week, but, instead of an increase in overall trade, there was a slight fall. The Government assumption that people will have more money to spend just because the shops are open longer does not bear scrutiny once we start to look at the evidence.

Meanwhile, the extra Sunday hours would increase costs in those large stores that stay open longer, and while there will be some displacement from convenience stores to larger retailers, as happened during the Olympics, there will be little or no overall increase in trade to pay for the increased cost in most shops.

[Chris Philp]

Will the hon. Gentleman give way?

[Bill Esterson]

I am going to make some more progress before I take any more interventions.

The larger retailers that open longer will have to find a way to reduce costs, which means removing the premium for shop workers. Given that the major retailers operate UK-wide, a change in pay and conditions in England and Wales will mean changes in Scotland and Northern Ireland as well. Premium pay on Sundays is viable across the UK because large retailers in most of the UK are restricted to six hours’ opening. The time and a half paid to many shop workers will be under threat to make up for staying open longer across the UK, which, of course, is why this is a UK-wide matter and why it is entirely appropriate that Members from across the UK have a vote on this very important proposal.

Removing time and a half would cost shop staff who work an average shift in Scotland £1,400 a year, which in anybody’s money is a very significant hit, particularly for those on low pay in the retail sector. The proposed changes in England in Wales would have a profound effect on workers in Scotland, and I am glad that the SNP recognises that Scottish workers will be hit. I was a bit surprised when the hon. Member for Livingston (Hannah Bardell) told us in Committee that, while her concerns focused on Scottish workers, the SNP welcomed the additional employee protections in the Bill, which she ascribed to

“the strong and principled action of the SNP”.––[Official Report, Enterprise Public Bill Committee, 25 February 2016; c. 322.]

We will come to how those protections will not do what the Government claim they will, but I am glad that the letter from my right hon. Friend the Leader of the Opposition and the leader of Scottish Labour, Kezia Dugdale, has had the desired effect. I welcome the SNP’s confirmation that its Members will vote against the Government, and I look forward to them joining us in the Lobby.

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[Bill Esterson]

I am not going to take any more interventions at the moment. We have not got very long, because the Minister took so much time, and a lot of Members want to speak.

The Minister claimed that the Bill would help workers, but 91% of shop staff oppose longer Sunday opening hours and only 6% want more hours on Sundays. Listening to the Minister in Committee, we might have been forgiven for thinking that the figures were the other way around. The Minister says that he is improving workers’ ability to opt out of Sunday working. Let us just go through some of what happens now. Staff who apply for jobs with some retailers are asked whether they will work Sundays. Failure to say yes can mean no interview. Staff who are still in their notice period who try to opt out of Sunday working can and do lose their jobs. Staff who try to opt out of Sunday working can and do lose hours. Staff who want to opt out come under pressure from managers and colleagues not to do so. The reality is that staff already have to work on Sundays in too many large retailers when they do not want to, when they would rather spend more time with their children or—as most people want to do on Sundays—enjoy leisure time or rest. What happened to the family test?

[Chris Philp]

Will the hon. Gentleman give way?

[Bill Esterson]

No, I am not going to give way.

The Prime Minister said that the family test should apply to all legislation. I understand that it is in the impact assessment. I have not had time to read it in detail, because we had only two hours’ notice of its publication, but I understand that it says that when it comes to the family test, the overall impact is unclear. It is clear enough to families of shop workers up and down the country that the measure will have a profound effect on them and on what happens on Sundays.

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[Chris Philp]

Will the hon. Lady confirm that if these proposals are passed, they will increase protections for workers in Scotland? Will she also confirm that the arrangements in Scotland and England would be identical, meaning that she will be voting against arrangements that already apply in Scotland?

[Hannah Bardell]

As I have just said, employment protections will increase, but no Minister has said anything about pay protection, which I shall speak about later.

Low-paid workers might lose out even further if they lose their premium pay. USDAW has expressed significant concern that when universal credit is rolled out in May 2016, any loss of Sunday premium pay by families working in retail would trigger the end of their transitional protection at tax credit rates and they would be transferred to the far lower rate of universal credit. That is an extremely important point.

It is an interesting phenomenon that a greater proportion of lone parents work in retail on Sundays than on any other day of the week, yet if one of those lone parents was to lose their premium pay and to be transferred to the lower rate of universal credit, they would have over £2,000 less in their pocket. I and my SNP colleagues are not prepared to gamble with the pay packets of some of Scotland and the UK’s lowest-paid workers.

Moreover, it is an obvious point, but the erosion of premium pay as a result of Sunday trading hours is a real threat not just to Scottish workers, but to shop workers across the UK. We said ahead of the 2015 general election that the SNP would be a progressive force in Westminster and that we would work with others to pursue progressive policies and protect the most vulnerable—and not just in Scotland, but across the UK. In voting against these ill-conceived measures, that is exactly what we are doing. We in the SNP do not just write our manifesto commitments down; we actually deliver on them.

Although the crux of our argument is about the erosion of premium pay, there is a wider debate going on. We should focus our minds on the wider issue of fair pay. In my maiden speech, I spoke about the importance of decent pay for decent work, and about my own family heritage, being from mining and shop worker roots. My grandfather was a miner and believed firmly that no worker should have to seek overtime to make ends meet. Therefore, while we must protect the premium pay of the lowest paid, we should also be continuing the fight for fair pay for the lowest paid in our society. That means a real living wage, not the fake one dreamt up by this UK Government.

We have challenged the UK Government to give assurances and to provide safeguards for the provision of premium pay in Scotland, and they have failed to do so. There is not a single clause in the Bill, or any sentence that any UK Government Minister has uttered in our proceedings on it, that is significant enough a reassurance that Scottish shop workers, and indeed shop workers across the UK, will not lose out because of a lack of protection for their traditional rates of pay. We will oppose anything that puts in doubt the premium payments that lower-paid shop workers in Scotland have for Sunday working.

Tax Avoidance and Multinational Companies

Chris Philp Excerpts

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

I am going to press on.

We all supported the changes to public procurement rules that enabled the Government to prevent public contracts from being awarded to companies found to be engaged in tax avoidance schemes. Staggeringly, it is understood that no company has been denied a public contract on those grounds and that, even though its tax affairs were under such lengthy investigation by HMRC, Google was awarded public contracts to supply services—who to?—to HMRC.

[Chris Philp (Croydon South) (Con)]

On the point about international agreements, the United Kingdom Government have been at the forefront of the base erosion and profit shifting initiative. Richard Murphy, who describes himself as the author of Corbynomics, told the Treasury Committee yesterday that he was “pleased and very surprised” by the progress the Government have made since 2010.

[John McDonnell]

I support the Government in that action, but this deal flies in the face of that action and undermines the agreements that we are trying to make.

Over the weekend we also heard from Mr Jones, the Google whistleblower. In his view, HMRC ignored his exposure of Google’s tax avoidance methods. That evidence was received by the Treasury Committee on a cross-party basis.

We all accept that the existence of tax havens and the complexity of national tax systems present an ongoing challenge to national Governments. As a result, we have all supported the negotiation of international agreements on tax collection. The UK is a signatory to some of these. As the hon. Member for Croydon South (Chris Philp) said, the Government have agreed in successive steps to abide by the base erosion and profit shifting programme under the auspices of the OECD. We supported that.

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[Mr Gauke]

I want to make a little progress, but let me give way to my hon. Friend the Member for Croydon South (Chris Philp).

[Chris Philp]

Does the Minister agree that the reason why this announcement is welcome is that we collected £130 million of tax from Google, while Labour collected nothing?

[Mr Gauke]

It certainly appears that next to nothing was collected in that case.

--- Later in debate ---

[Chris Philp (Croydon South) (Con)]

In preparing for this debate, I was keen to see some facts about the Government’s record, so I turned to a study published by the Oxford University Centre for Business Taxation, probably the most academically reputable institution in the area of corporation tax. The report it published in February of last year identifies 42 separate measures that the Government have taken since 2010 to clamp down on corporation tax avoidance and evasion. They are forecast to raise £34 billion. I strongly welcome the measures that the Financial Secretary and his colleagues have taken in this area, which include the diverted profits tax and the general anti-abuse rule. The Government have also increased capital gains tax from 18% to 26%, dealing with a loophole that was being widely exploited by some hedge funds to end up paying rates of tax below that of their cleaners. The Government’s record in this area does bear scrutiny. Indeed, Richard Murphy, who describes himself as the “father of Corbynomics” declared himself pleased and surprised at the progress made in this area since 2010, which includes the BEPS initiative, which the UK Government have been strongly pushing.

I noted with interest that the shadow Chancellor did not repeat a claim he has made in the past about £93 billion of what he has called “corporate welfare”, implying that there is some sort of evasion or avoidance going on. Richard Murphy said yesterday, before the Treasury Committee, that he would question whether that figure was correct, as it includes things such as capital allowances, and research and development tax credits, which of course support companies that are investing in productivity, a topic that we all care about very much.

On Google, I said in an intervention that this Government have collected £130 million of tax more than the last Labour Government, who collected precisely zero. As such, we are talking about a welcome step in the right direction. The 3% tax rate has been mentioned but, as some Conservative Members have pointed out, such an analysis completely ignores the fact that Google’s staff headcount and intellectual property reside disproportionately in the United States. Were we to adopt the approach being suggested, UK companies, particularly those in the music, pharmaceutical and other industries, would suffer greatly.

That is not to say that there is not more that can be done—more can be done. I particularly suggest to the Financial Secretary that we should look carefully at how things such as transfer pricing rules are applied. Two or three years ago, Starbucks successfully levied a 6% brand fee from an offshore jurisdiction into the UK which almost completely extinguished its UK profits. Any brand levy that results in a zero profit is, almost by definition, too high, so I ask him to give guidance to HMRC on that topic, but I support the Government’s initiatives and hope they go further.

HMRC and Google (Settlement)

Chris Philp Excerpts

Monday 25th January 2016 Commons Chamber

[Mr Speaker]

Order. This is very unseemly. Let us hear these important exchanges. People beyond this place might be taking an interest in them, and I think that they would like a decorous atmosphere. Let us hear what Mr Philp has to say.

[Chris Philp (Croydon South) (Con)]

Thank you, Mr Speaker. Is the Financial Secretary to the Treasury familiar with the report from the Oxford University Centre for Business Taxation that was published a short time ago? It itemised 42 anti-tax-avoidance measures that the coalition Government put in place, including the general anti-avoidance provisions, the banking code of conduct and the diverted profit tax, which will raise an additional £34 billion between 2011 and 2020.

[Mr Gauke]

Yes, I am aware of that report and I am grateful to my hon. Friend for drawing the House’s attention to it.