Finance Bill (Fourth sitting)

Christian Matheson Excerpts

Tuesday 5th July 2016 Public Bill Committees

[Mr Gauke]

I come back to what I was saying earlier, namely, that doing nothing will mean that many properties, often relatively modest properties, will fall within the inheritance tax bands. Doing nothing will mean that a tax that I think most people in this country would support, on the basis that it is designed for the very wealthy, would apply to people who would not necessarily have had high incomes in their lifetimes. That creates a sense of unfairness. There are certainly parts of Edinburgh where relatively modest properties are of such a value as to create concerns about inheritance tax.

[Christian Matheson (City of Chester) (Lab)]

If the Minister is concerned about rising property prices and an overheating housing market driving more people into inheritance tax bands, perhaps he should do something about the housing market—rather than fiddling around with the tax bands—for example, by building more houses for rent and cooling the housing market in that way.

[Mr Gauke]

I very much support the idea that we need to build more homes. As a Government, we have done so. We are a Government who have changed many of the planning rules. We are a Government who announced a substantial housing package in the autumn statement. This Government are doing much to improve house building in this country. Indeed, the number of building starts last year was high, which is encouraging.

To conclude, the measures before us are a sensible further step to meeting our objective of taking the family home out of inheritance tax. They will also ensure that there is no impediment to people downsizing, creating difficulties in the housing market. I hope, notwithstanding the objections from the Opposition, that clause 82 and schedule 15 will stand part of the Bill.

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

Finance Bill (Third sitting)

Christian Matheson Excerpts

Tuesday 5th July 2016 Public Bill Committees

[Damian Hinds]

It is a pleasure to respond to the pertinent questions put by the Opposition and SNP Front Benchers. They both asked about exploration, which is the lifeblood of the industry’s future. We had a choice: introduce a complex system of reliefs and incentives relating to exploration, or have a simple, straightforward tax cut across the board. We chose the latter. Reducing the tax payable on the economic activity lowers the hurdle point for investments, improves the net present value of projects, and means that more will take place. It is cutting the headline rates of tax, rather than anything else, that provides a clear incentive to invest in the continental shelf. The Government have also twice provided £20 million for seismic surveying to help kick-start those processes.

Allowances came up a number of times. Over the past few years, the Government have been simplifying that system. Allowances mean that projects that are economic, but not commercial at the higher rates of tax, can go ahead. That is good for the Exchequer, as it brings in more income, and good for the companies concerned. The hon. Member for Salford and Eccles, who speaks for the Opposition, asked when the Government would finalise the secondary legislation expanding the definition of qualifying expenditure for the investment cluster area allowances. Draft legislation was published at the end of last year and the technical consultation ended in January. HMRC has been analysing the responses to that and liaising with the Treasury and the OGA to ensure that the legislation works as intended. We plan to lay the new regulation before the House after the summer recess. It will apply to all qualifying expenditure incurred after 8 October 2015.

The hon. Lady also asked about the power to extend the definition of relevant income and the timing. The Treasury will consult with industry shortly, and will ask it to provide information and evidence to inform the design of the inclusion of tariff income in the investment cluster area allowances. It is a complex area, with a range of commercial arrangements that we need to understand if we are to ensure that infrastructure owners and users can benefit from the allowances. The power has been drafted in such a way as to ensure that the inclusion of tariff income can have a retrospective effect. That measure will not delay the introduction of the extension to qualifying expenditure.

The hon. Member for Coatbridge, Chryston and Bellshill rightly asked about the crucial opportunity area of decommissioning. Decommissioning across the shelf is expected to become a multibillion-pound industry, and there are significant export opportunities as other basins around the world become more mature. Decommissioning costs here could be more than £40 billion. As I said earlier, the Government support Sir Ian Wood’s vision of establishing north-east Scotland as a real centre of excellence. That is why we support the creation of an oil and gas technology centre in Aberdeen as part of its city deal. As the hon. Gentleman will know, the OGA will soon publish its United Kingdom continental shelf decommissioning plan.

The hon. Gentleman and the hon. Member for Salford and Eccles asked about late-life assets and asset transfers. We are in constant discussion with the OGA and industry to understand what impediments there may be to value-creating deals going ahead, and we retain an absolutely open mind on that. The hon. Gentleman also asked about Government guarantees. Again, that is something on which the Government have an open mind, in recognition of the importance of the sector. The Government are willing to consider proposals for using the UK guarantee scheme for infrastructure where that could help to secure new investment in assets of strategic importance to maximise economic recovery. Any proposals would need to meet the scheme’s criteria, including those relating to commerciality and financial credibility.

The Government have recognised the exceptionally challenging conditions that the industry faces, and in response announced a £1 billion package of fiscal reforms in the March 2016 Budget, which built on the extensive package from the previous year. The package includes halving the rate of the supplementary charge, permanently zero-rating the petroleum revenue tax, and extending the scope of key allowances to incorporate leasing and to encourage investment across the North sea. The Government have also committed £20 million of funding to a second round of seismic surveys to encourage development in under-explored areas.

Despite the extremely challenging conditions, this remains a sector of opportunity for Scotland and the UK; it is estimated that somewhere between 11 billion and 21 billion barrels of oil and oil equivalents are still to be had. More than £11 billion was invested in the sector last year. I am constantly encouraged by the positive attitude of the industry, and all the work that it is doing to get its cost base down and continue to look for new opportunities. I assure you, Mr Howarth, and all hon. Members, of the Government’s absolute commitment to the very positive tripartite approach between the industry, the Oil and Gas Authority, which is really more than a regulator, and the Government, who include the Scotland Office, the Department of Energy and Climate Change and the Treasury.

[Christian Matheson (City of Chester) (Lab)]

There is no doubt that the UK offshore oil and gas sector has a world lead, provides huge revenue and technical expertise to the UK, and needs to be protected, but my hon. Friend the Member for Salford and Eccles raised the spectre of onshore fracking. Can the Minister give reassurance that our efforts to support the offshore oil and gas industry will not be used as a back-door way of giving tax breaks to onshore fracking?

[Damian Hinds]

Mr Howarth, you would not want me to stray on to topics that are not strictly in the scope of the Finance Bill. The Government believe that there is significant potential for unconventional oil and gas—for fracking—and I think that we owe it to future generations, to ourselves and to British industry to make sure that we discover what opportunities are there. Exactly how the regime develops, in fiscal terms, is to be determined, but we know that there will be an absolutely robust safety regime. In the initial phase, the important thing is to find out on how big a scale that opportunity may be.

I had reached the conclusion of my remarks, having reiterated the very firm commitment across Government to supporting this industry. This is a bold package of support in the Budget. We know of no other country in the world that has responded on quite such a scale to the extremely challenging conditions presented by the world oil price. I commend the clause to the Committee.

Question put and agreed to.

Clause 54 accordingly ordered to stand part of the Bill.

Clauses 55 to 59 ordered to stand part of the Bill.

Bank Branch Closures

Christian Matheson Excerpts

Thursday 30th June 2016 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

I beg to move,

That this House is concerned about continued bank branch closures and the damage that this causes to local communities, small businesses and the welfare of senior citizens; and calls upon the Government to help maintain access to local banking.

The motion stands in my name and those of the hon. Members for Wells (James Heappey) and for Ceredigion (Mr Williams). This has been very much a joint effort and I pay tribute to them. I would like to thank the Backbench Business Committee for the opportunity to bring this motion and debate before the House today. When the three of us approached the Backbench Business Committee, hon. Members serving on it graciously offered us the day of the local elections as a possible occasion. Knowing that there was wide support for the debate and not wanting it to get swamped by external events, we declined and asked for a later date. That worked out well, didn’t it?

I have a smartphone in my pocket that has an app—let me explain to more senior hon. Members that that means an application—through which I can access my banking services, pay my bills, check my balance and transfer money between my accounts, none of which, I hasten to add, are sited offshore. I can probably even apply for a loan. Banking is changing, and in many ways it is becoming more convenient and perhaps changing for the better.

Convenience, however, does not rely solely on the possession of a smartphone. The physical presence of a bank is still important. Today, I shall not call for a halt to all technological advances in banking. I do not want to go back to the days of accessing cash by having to cash cheques in a branch, and I certainly do not want to go back to the days of using credit card devices that the shopkeeper used to have to fill in by hand and then run a mechanism over to print the credit card details on carbon paper.

[Albert Owen (Ynys Môn) (Lab)]

In my pocket I have a cheque book and a mobile phone, but when I go to the bank, I do not have much of a choice when it refuses to provide many services. The serious point is that many places in my constituency do not have a mobile phone signal, so people face even greater limitations on how they can provide or access services.

[Christian Matheson]

My hon. Friend makes an extremely useful point, and if he will bear with me, I may come on to say more about some of the areas that are suffering the most from these bank closures.

As my hon. Friend has perhaps alluded to, we need to recognise that for many—the elderly, people with caring responsibilities, and small business owners—high street banks’ programmes to close many of their smaller branches and centralise everything in the centre of large towns create havoc for individuals and businesses and damage local communities.

My interest in this issue was prompted by a spate of branch closures in the Hoole area of Chester. Last summer, NatWest announced it was closing its branch there. The excuse was that the branch was underused. Yet I and my team undertook a scientific survey of usage by standing outside and counting people going in over several hours that flatly contradicted the suggestions made by NatWest. HSBC had already gone in Hoole, and it was followed more recently by Lloyds, leaving only a Barclays branch as the so-called last branch in town. Bank branches around Chester had been closed previously, including in the Boughton and Saltney districts.

All our banks are now in the centre of Chester, which has several profound effects. First, it increases traffic into the city centre. Ours is already a congested city built on the beautiful River Dee, but when the Romans founded it and when it became a bustling market town in the middle ages, nobody thought to design it with the needs of 20th and 21st-century car use in mind. Keeping satellite branches is, strangely, good for the environment. More importantly, satellite branches support local businesses.

[Nia Griffith (Llanelli) (Lab)]

My hon. Friend hits on the point that it takes up a lot of small businesses’ time if, instead of banking locally, they have to go to another town where the traffic is piling up. That is the complaint I have heard from people in Cross Hands because that is what they will be forced to do when their bank closes.

[Christian Matheson]

I thank my hon. Friend for her intervention, and I was about to make exactly the same point.

People drop into shopping areas such as Hoole to go to the bank and then perhaps to one of the local shops. Incidentally, Hoole recently won the outstanding award from the “Great British High Street” awards, for which I thank the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones). I would be grateful if the Minister passed on my thanks to him.

The bank is very much part of the ecology of the local high street. If we take it away, we damage that ecology and the other small businesses that rely on it for increasing custom, as people pop to the bank and then to one of the small shops. We rely on it, too, to provide easy access to banks for small businesses, as my hon. Friend the Member for Llanelli (Nia Griffith) pointed out. Small businesses feel able to put up a small “back in 10 minutes” sign on their door in the middle of the day as they pop down to the local bank to get change or pay in money, but they would not feel able to put up a “back in two hours” sign if they were they forced to go into the city centre of Chester or indeed any large town. It is tough running small businesses and time away from the shop is business time lost.

For all the advantages of internet banking—and there are many—the blunt truth is that a small business cannot pay cash into the bank through a laptop computer. I cannot help but wonder whether all of this is made worse because of the advertising these banks use. No wonder HSBC moved away from calling itself “the world’s local bank”; yet we still have Lloyds bank saying that it has been “by our side” for 250 years—at the same time as it closes its Hoole branch. It is not by our side any more in Hoole, I am afraid. The very untruths of the advertising campaigns, claiming to be local and supportive of local small businesses, while making access to branches harder, exacerbates the crisis that we face—and it is a crisis.

Reuters reported last week that 600 branches closed in the 12 months to April this year. There is a social division in these closures. It says that more than 90% of the closures were in areas where the median household income was below the British average of £27,600, according to an analysis of Office for National Statistics data on average incomes in the locations where branches were closed. By comparison, five out of the eight branches opened by these banks over the same period were in some of the wealthiest neighbourhoods in Britain: Chelsea, Canary Wharf, St Paul’s, Marylebone and Clapham, all districts in London. That is right: despite the onward march of technology, banks are still opening new branches, but in highly affluent areas.

The Reuters report cites concerns from campaigners that

“banks are cutting too fast in places where people are less able to fall back on digital banking services because of a lack of access.”

That reminds me of the words of my good friend the hon. Member for Ynys Môn (Albert Owen) about the different ways in which access to banking services might be prevented. Problems can be caused by people’s finances, the lack of physical access or the inability to use the internet. The report quotes Fionn Travers Smith of Move Your Money, which campaigns for ethical banking. She says:

“We are witnessing the creation of a dual financial system: one for the middle class and wealthy and another for the poor.”

Indeed, I have found that one of the groups to be hardest hit by the recent closures in Chester are pensioners, not necessarily the most tech-savvy group—although I do not want to make assumptions—who now have to make the journey into the centre of my city.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

On that point, I have been dealing with a constituency case in which a couple were conned out of their life savings—some £50,000—in a sophisticated telephone and online scam. Does the hon. Gentleman agree that forcing people to adopt these services rather than giving them the option of over-the-counter services serves only to enable organised crime and scams?

[Christian Matheson]

I have to say that the thought had not occurred to me, but I think that dreadful case illustrates a problem on which we should all focus. We can have a lot more confidence in dealing with a bank when we are inside a physical bank and dealing with an individual as opposed to being subjected to one these terrible scams. I am most grateful to the hon. Lady for bringing that awful case and awful problem to our attention.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

The trend is towards bank branch closures, and we tend to see that more in areas of deprivation and of the greatest need. Given that in these areas people often face high interest rate alternatives, does my hon. Friend think that we should hear more from the Government about how they intend to create more responsible finance options in areas where bank branch closures are happening—such as more support for credit unions and for community banks, of which there are a number in the UK?

[Christian Matheson]

My hon. Friend has a long, proud and honourable history of working within the co-operative movement, and he is an expert in this area. I intend to touch briefly on the role of credit unions as I progress through my speech.

Let me return to the problems faced by pensioners in accessing bank branches. I realise that this is not necessarily the responsibility of the Minister who is present, but at the same time as branch closures in the satellite districts are forcing people into the town centre, privatised bus companies are cutting the bus services on which pensioners rely more than any other group in society, this making it even harder for them to make that journey into the centre.

It is clear that local post offices have taken up some of the demand. Members, both current and previous, have fought long and hard against the closure of those post offices, whose continued existence has been aided by their provision of banking services. I am pleased that they have that role, but it does not constitute a suitable total replacement,

I suspect that Members may criticise the banks for the manner in which they undertake their closure programmes. I, too, am critical of the seemingly hasty and often desperate way in which those programmes are conducted, based solely on cost-saving and with no eye to service. Today, however, I want to be positive, and to propose a new solution which I hope the Minister will consider.

My suggestion is that high street banks should come together where they are closing branches to form local banking hubs. In other words, they should maintain provision on local high streets, as opposed to major town centre high streets, in shared premises and with shared costs. They could provide the automatic paying-in and cash withdrawal machines that we see in bank branches now, along with, perhaps, booths containing phones so that clients could contact bank call centres if necessary. As was suggested by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), it might also be helpful if staff were present to assist.

I accept that there are technicalities to be resolved—who would employ the staff, and who would own or lease the properties?—but today I am concerned only with floating the principle, and, indeed, it is not my role to be prescriptive to the banks about the specific business model. It is possible that various models could be tried and tested, and I wish to offer Chester as a test bed where the banks could come together and provide a model community banking hub. Perhaps Chester’s credit union could be involved as well.

Let me therefore throw down the gauntlet, and challenge the banks to take my proposal seriously. I invite them to come to Chester—or Wells, or Aberystwyth—to set up a joint hub, and give it two years to see if it works. That is a serious offer, and I will help the banks to make a success of it in my patch. Either that, or they should stop using advertising that suggests that they are more human and accessible, while continuing to close local branches and make access harder. Banking is a private sector business, but it is also an essential service. A bank is an essential part of the local high street ecosystem. There must be no more cavalier closures of branches which, in turn, damage the local economy: banks are too important for that. In 2008, we learned that some big banks were—apparently— too big to fail. Perhaps the message today should be that some local banks are too important to local communities to be allowed to close.

--- Later in debate ---

[Christian Matheson]

I am grateful to you, Madam Deputy Speaker, the Minister and the House. In these crazy, turbulent times, we have found some unity. Members on both sides of the House, from England, Scotland and Wales and from rural and—as my right hon. Friend the Member for Tottenham (Mr Lammy) demonstrated—urban constituencies agree that this problem must be addressed.

We have heard solutions proposed, including the mutuals idea from my hon. Friend the Member for Harrow West (Mr Thomas), and some excellent and practical points from the shadow Chancellor. I get the impression that the Minister is willing to listen. She says that her door is open. I hope it will be and that she will put pressure on the banks’ chief executives to respond. I also hope that she will have access to those chief executives, even if the hon. Member for East Lothian (George Kerevan) and others do not. This matter spans many different areas of government: support for small businesses, community cohesion, social isolation, crime prevention, broadband and internet access and, above all, the alleviation of poverty. These issues will not go away. I am most grateful to hon. Members for their contributions, but action is also required.

Question put and agreed to.

Resolved,

That this House is concerned about continued bank branch closures and the damage that this causes to local communities, small businesses and the welfare of senior citizens; and calls upon the Government to help maintain access to local banking.

Oral Answers to Questions

Christian Matheson Excerpts

Thursday 9th June 2016 Commons Chamber

[Mr Evennett]

Indeed. It is very important, for the empire and the Commonwealth, to recognise the contributions of all parts of the communities in the four nations of our country and particularly people from Commonwealth countries such as the Indians, the Canadians, the Australians and the rest. This lies at the heart of what we are trying to do, as we commemorate all those who participated in the Somme.

[Christian Matheson (City of Chester) (Lab)]

2. When part two of the Leveson inquiry will commence; and if he will make a statement.

[The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)]

Criminal proceedings connected to the subject matter of the Leveson inquiry, including the appeals process, have not yet completed. We have always been clear that these cases must conclude before we consider part 2 of the inquiry.

[Christian Matheson]

Let me pin down the Secretary of State. Are we saying that when criminal proceedings have finished, there will be a part 2 or there might be? He told us on 3 March that a decision

“about whether or not Leveson 2 should take place”—[Official Report, 3 March 2016; Vol. 606, c. 1097.]

will be taken afterwards. Is it when or whether?

[Mr Whittingdale]

This will need to be considered in detail once those cases have been concluded. There are still areas that were not fully explored in the original inquiry. There have obviously been events since the original inquiry, not least the proceedings in the courts. All these matters will need to be taken into account when we consider how best to proceed after the conclusion of those cases.

--- Later in debate ---

[Tom Brake]

I am happy to agree with that comment.

[Christian Matheson (City of Chester) (Lab)]

2. What discussions the Commission has had with trade union representatives on the terms and conditions of employees of the House.

[Tom Brake]

The Commission delegates to the Executive Committee responsibility for negotiating changes to terms and conditions of House staff with the recognised trade unions. The House is currently in pay negotiations for the financial year 2016-17 with the unions representing staff in the main A to E pay bands and the catering pay bands. These negotiations are being undertaken in the context of the general pay constraint within the public sector and the requirement for the pay of House staff to remain broadly in line with that of the home civil service.

[Christian Matheson]

I thank the right hon. Gentleman for that answer. I am concerned to learn that certain members of the catering department are having to work double shifts in order simply to make ends meet. Can he confirm that, as part of the pay negotiations, staff will be paid the London living wage, not the Government’s bogus living wage? Does he agree that perhaps paying an extra 5p or 10p for a cup of coffee or a meaty wrap would be money well spent if we were paying our staff correctly?

[Tom Brake]

I am happy to confirm that staff are indeed paid the London living wage, and to ensure that the hon. Gentleman receives a response to his question about double shifts. I am also happy to raise his suggestion that a tariff should be applied to sandwiches in this place to ensure that pay is raised in the way he has indicated.

Budget Resolutions and Economic Situation

Christian Matheson Excerpts

Monday 21st March 2016 Commons Chamber

[Jon Trickett]

I shall make some progress now.

The same people who rely on the personal independence payments, which the Government so recently wanted to cut, rely on home helps and community services, yet nowhere is the pressure greater than the growing crisis being experienced by social care. The Tory-controlled Local Government Association estimates that despite the Government’s measures there is a big funding gap in social care—£700 million this year. Many of the frail elderly in our society are no longer being looked after properly. Lord Porter, the Tory leader of the LGA, put it starkly. He said that

“vulnerable members of the community still face an uncertain future where the dignified care and support they deserve, such as help getting dressed, fed or getting out and about, remains at risk.”

Yes, a Tory leader said that vulnerable elderly people will be denied help to be fed.

A few years ago my own family faced a crisis that so many of us have to confront at some time in our lives. Let me quickly describe what happened. I went to visit my dad in the fabulous St James’s hospital in Leeds, whose staff continue to amaze with their skills and dedication. But the nurse told me that my dad was coming to the end of his life and that he had to be discharged because there was little further the hospital could do. Clearly, he could not go home. By good fortune, I was able immediately to convert a downstairs room in our house into a bedroom and shower room and within days he came to live with me. He died in that room a few months later, but we spent a wonderful time together. The sun seemed to shine into our house every day that he was there. We were blessed to have the space available, and a loving family as well as loving neighbours who helped.

However, we could not have coped without the frequent house visits by the council’s care teams, who came every day, several times a day. Last year I held a fund-raising event at my house. One of our guests that day was a woman I recognised. She had been a carer who had helped me with my dad. She told me that she would always remember her visits to our house, but I felt a chill down my spine when she told me that because of the Government cuts, council carers could no longer provide the level of care to others that my family had received. “Honour thy father and thy mother” is an injunction that a civilised society should never forget.

Local government is facing £10 billion of additional future cost pressures. There are three main threats to council finances in this Budget. First, the Chancellor demands £3.5 billion of spending cuts, as we heard, to help to fill the black hole in the Government’s accounts. On top of that, there is the £4 billion that we heard about today.

The House knows that there are very few unprotected services left. Local government is one of them and is therefore a prime target. It is home helps, children’s centres, libraries, leisure centres, firefighters and youth clubs that are at risk.

Secondly, there is the overhaul of the business rates system. We welcome the extra help being given to small business in rate relief. That was in our manifesto; we campaigned for it, and it will cost about £7 billion. The Government have said they will compensate local government for this loss. The Secretary of State quotes page 84, line 15 in the Red Book, but he is wrong. That does not indicate where a single penny is coming from. Where is that £7 billion coming from? The Tory-chaired LGA has said that this will mean that once the 100% rate retention has been brought in, the resources to be retained will be less than previously projected as a consequence. By contrast, we would have financed these cuts to small business rates because we would have maintained, not cut, the level of corporation tax.

The third threat that the Budget outlines is the decision to ring-fence business rates in London, ahead of the rest of the country. But Westminster alone takes more business rates than Manchester, Liverpool, Sheffield, Birmingham and Bristol combined—£1.8 billion. If prosperous Westminster keeps this £1.8 billion, there will be a significantly smaller pot of money to be redistributed to less affluent areas. Tucked away in the Office for Budget Responsibility’s report are the implications of all this for the hard-pressed council tax payer—something on which the Secretary of State was silent.

The OBR estimates that 95% of councils will increase council tax by the maximum allowed, and they are being encouraged to do so by the Government. This means that for the first time ever, the average council tax bill payer will be paying £1,500 a year. Over the next five years local residents face a 14% increase above inflation in council tax. In return they will get a worse service. So much for the Tories being the party of low taxation: capital gains tax cuts for the well-off and council tax increases for ordinary families. It is an unacceptable set of priorities.

[Christian Matheson (City of Chester) (Lab)]

Is my hon. Friend aware that the Chancellor’s decision to remove retail rate relief for small shops will mean that more than 400 shops in Chester will be paying about £1,300 a year extra? Is that consistent with the argument that he has just made?

[Jon Trickett]

Of course. The Tories are not interested in looking after ordinary people and small businesses. They are interested in directing money at the privileged few.

Let me turn briefly to the subject of devolution, which the Secretary of State mentioned. In his Budget statement the Chancellor announced a number of devolution deals, about which concern has been expressed in all parts of the House. The Minister cannot say we did not warn him that there would be trouble on that from the Labour Benches. The whole process is far too top-down. The insistence on a single mayoral model has caused much resentment, especially in cities where the idea was recently voted down by local people in referendums.

It is not councils’ fault that there are these tensions—our councillors are under enormous pressure to get whatever they can for local residents. The fault lies entirely with the process imposed, not by the Secretary of State, but by the Chancellor, who is stubbornly refusing to allow ordinary citizens to have a say in how their areas should be governed.

DRAFT Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2016

Christian Matheson Excerpts

Thursday 3rd March 2016 General Committees

[Christian Matheson (City of Chester) (Lab)]

I intend to speak only briefly to seek reassurance from the Minister on one particular matter. My hon. Friend the Member for Salford and Eccles and the hon. Member for Banff and Buchan both spoke eloquently about the problems that this measure may cause to people in insecure, low-paid work or on zero-hours contracts—some of the most vulnerable members of society. We hear a lot from Government about helping such people, but we are seeing less and less practical assistance. My hon. Friend the Member for Bristol South mentioned the problems with HMRC, and anybody who has tried to phone HMRC over the past few years will know of the difficulties there.

It could be that I need to apologise to the Minister as I have may have misunderstood this, but something that has not yet been mentioned is the effect that the requirement for real-time reporting will have on businesses, and small businesses in particular. They may have to report from week to week or month to month on fluctuations or changes in their employees’ pay. I am not talking about large corporations with big payroll departments and good IT infrastructure that can perhaps report automatically. Real-time reporting will be an additional strain on small and medium-sized businesses that are already doing monthly VAT returns and other returns for HMRC. Is not there a danger that, in addition to a burden on the lowest paid, there will be a burden on small and medium-sized businesses, in having to keep up with payment week to week and month to month? I should be grateful if the Minister could clarify that.

HMRC and Google (Settlement)

Christian Matheson Excerpts

Monday 25th January 2016 Commons Chamber

[Mr Gauke]

My hon. Friend puts it very well. It is a pity that previous Governments have not taken this matter as seriously as we have.

[Christian Matheson (City of Chester) (Lab)]

The problem is that the Conservatives have form when it comes to arranging mates’ rates for taxation. They gave a massive tax cut to big City banks, particularly in relation to profits brought in from abroad. They also gave a massive tax cut to hedge funds, £25 million of which arrived in the Conservative party’s coffers last year, and now we have this deal. City banks, hedge funds and globalised corporations—the three bodies the modern Conservative party exists to serve. So let me ask the Minister: why should my constituents in Chester, who work hard and play by the rules, subsidise these big globalised corporations?

[Mr Gauke]

The fact is that in the last Parliament we increased taxes on banks and on hedge funds. The hon. Gentleman’s constituents should be asking why their Member of Parliament could not ask a better question.

Oral Answers to Questions

Christian Matheson Excerpts

Wednesday 9th December 2015 Commons Chamber

[Mr Letwin]

We are fully committed to bringing more under-represented groups into electoral participation. That is why we are working with Operation Black Vote and other such groups to bring people in from the black and minority ethnic communities. I also draw my hon. Friend’s attention to the very interesting experiment being tried at Sheffield University to nudge the student population to sign up for an automatic registration system. We are looking very carefully at that.

[Christian Matheson (City of Chester) (Lab)]

T7. If it does indeed transpire that there are fewer people on the new electoral register after the introduction of independent electoral registration, will the Government consider that to be a success or a failure?

[Mr Letwin]

I think what the hon. Gentleman is missing is the fact that, as a result of the measures that have been taken, people who were not at the addresses at which they had previously been registered will be eliminated. The creation of an accurate register is an aim of democracy, not a defect of democracy.

Finance Bill

Christian Matheson Excerpts

Monday 26th October 2015 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend share my concern that the Government have been unable to drive forward the economy on any basis of productivity and are therefore relying on property price speculation, and that this would be a way to drive up property prices to cover up their failings in other parts of the economy?

[Rob Marris]

I agree with my hon. Friend, and if I can catch the Speaker’s eye on Third Reading I will be making points along those lines. The true state of our economy, driven by a housing bubble and household debt, is actually quite frightening. In terms of inheritance tax, new clause 9 simply asks the Government, after the Budget is in surplus, to look at the inheritance tax regime. Of course the Government could do it now, and I would welcome a commitment from the Minister, if he is able to make one, that the Government will do so, because the tax breaks in this Finance Bill will be about £940 million a year by 2020-21. That does not seem a wise use of revenue when it is coming in from some of the most well-to-do families—a small number of estates, as I said. It is not a good idea to be in one sense spending money in that way. I appreciate that it is not actually spending money because, technically, it is a case of simply not collecting it in taxes, but in everyday terms it is spending money, because so much of what we do in this House is to do with priorities, and so much of the prioritisation we decide on is predicated on how much money there is with which to do those things.

[Christian Matheson]

Does my hon. Friend agree that we cannot afford this measure in this Parliament, not least because it will cost, as the Budget Red Book tells us, about £2.5 billion in this Parliament?

[Rob Marris]

It is difficult to tell what we can afford as the Conservative party, in government since 2010, has consistently failed to meet financial targets for dealing with the deficit. The Opposition agree with the Government that the deficit needs to be tackled, but we disagree on the way in which it should be done. Forgoing £2.5 billion —if that is the exact figure, and I think my hon. Friend is probably right that it is of that order of magnitude—in a very regressive way is something that Labour Members would not countenance, but we need to look at the whole regime, hence the wording of new clause 9.

There will also be complications with the wording of the inheritance tax provisions. There is a feeling of unfairness among some as to the definitions—which I will not go through tonight—of a linear descendent. Many, if not all, Members will know from our own lives, advice surgeries and places we live that the definition of a family and those who are regarded by someone as being a member of their family are somewhat fluid in our society, and have become much more fluid in the last 50 years in terms of social recognition. For example, the Labour Government introduced civil partnership legislation, which I welcome—it is possible this Parliament will extend that to opposite-sex couples—and, commendably, in the last Parliament gay marriage was put on to the statute book. Those are concrete examples, dealt with by this House, of the fluidity and changing nature of family structures, but the provisions in this Bill rather lock in whether somebody is, or is not, regarded as a member of a family. Inheritance tax in this Bill is a bit of a problem, therefore, and I urge the Government to accept new clause 9 and amendment 89, which in a sense is a stand part motion.

I will now turn to value added tax, enforcement by deduction from accounts and the climate change levy—unless any Member wishes a quick run-around again on inheritance tax, but I suspect not.

Finance Bill (Sixth sitting)

Christian Matheson Excerpts

Thursday 15th October 2015 Public Bill Committees

At the end of that process, to recover that cash, HMRC—believing it is still owed money by a taxpayer—can seek a court order, in the same way as anybody else who says they are owed money, using the court system; it might be the High Court or the county court. Why should HMRC be any different? I do not think it should be. Giving the rationale that—again to put a bit of a gloss on it—“The courts don’t work very well, so we’ll just bypass them”, is not acceptable.

[Christian Matheson (City of Chester) (Lab)]

My hon. Friend the Member for Wolverhampton South West has given his usual detailed and forensic objections to the clause. Mine are a little bit more about the Minister’s tone and presentation. First, I associate myself with his comments about those who seek to evade their taxes. I have no time for such people. If people are able to pay their taxes, they should do so. That is the price that we pay for a having a stable society that is paid for by taxation. I have no time for people who are, frankly, freeloading on the hard work of others. The hon. Gentleman was correct on that.

My concern with the Minister’s presentation is the tone compared with the tone of the previous discussion about compliance for those who seek to hold their assets offshore. In the discussion on that clause, the hon. Gentleman seemed to suggest that enforcement action would be very much a last resort—a route that HMRC would not necessarily want to go down. With this measure, the enforcement action seems to be a whole lot tougher. If I am doing the hon. Gentleman a disservice, I apologise; this is a genuine point. The impression I get is that once again it seems easier, and the Government seem more ready, to go after, shall we say, the little man, rather than those who have substantial assets elsewhere. However unacceptable individual tax evasion is, I cannot help but wonder whether the real issue we face is large-scale corporate avoidance of tax. I realise that is not part of the clause, Sir Roger, but I hope you will allow me a little latitude. The Government are focusing on small individuals rather than tackling the big issues of corporate taxation. If I am doing the Minister a disservice, I apologise, but I felt that the tone of his presentation focused too much on smaller-scale enforcement.

[Mark Garnier (Wyre Forest) (Con)]

I sympathise with some of what the hon. Gentleman says, but his party surely cannot be advocating that just because someone is a small person, they can avoid paying taxes. The Government are bringing in measures to tackle every level of tax avoidance. Clearly, some cases will be more obvious than others, but where someone has blindingly obviously not paid tax and has a cash asset, rather than go to the huge trouble and cost of taking them to court, seizing their assets and selling those assets, why is this the wrong thing to do? Surely we must collect tax from everybody who owes it.

[Christian Matheson]

I certainly do not think we should not take enforcement action against people who can but do not pay their taxes. That is not the issue. I agree with much of what the hon. Member for Wyre Forest said about enforcement for non-payers. I was slightly concerned that in the tone of what the Minister said, there was much more zeal for enforcement action at the lower end of the market than at the higher end. If that is a mistaken impression, I apologise, but there has to be more focus on large-scale corporate taxation, which may of course be covered in other parts of the Bill.

[Mr Gauke]

Let me say first that I am disappointed the Labour party will not be supporting the measure. I reiterate: these powers will be used at the end of an exhaustive process, whereby there will have been many opportunities for a debtor to have paid the debt and to have challenged the application of the debt to them. It is a measure targeted at individuals and businesses that are making an active decision not to pay or to delay paying the money they owe, despite having sufficient funds in their accounts and despite attempts by HMRC to contact them and encourage them to put their affairs in order. We must remember that we are talking about allowing £5,000 or so to remain in an account, so that people have the sums to make ends meet in the short term. I accept that court action is appropriate in some circumstances, but it imposes significant costs on both the debtor and HMRC.

--- Later in debate ---

[Mr Gauke]

I come back to the practical operation of this power. Let us remember that the existence of this power will encourage some debtors to pay tax at an earlier stage in the process, knowing that HMRC is able to pursue them more effectively. In Committee, and on the Floor of the House, we often debate the need to reduce the tax gap. The shadow Chancellor made that point on the Floor of the House yesterday. Of course, the tax gap consists of many things, including corporate tax avoidance, which I did not specifically address in my remarks because this clause does not specifically relate to corporate tax avoidance, but these powers could apply to any debt owed to HMRC, including debt involving corporate tax avoidance. If it is determined that a debt is owed, HMRC may pursue it in that way.

[Christian Matheson]

Will the Minister confirm that this clause will not simply apply to personal accounts but will also apply to corporate and business accounts of corporations that owe tax?

[Mr Gauke]

The clause will apply to both individual and business accounts, so it could be used in such circumstances. I will not detain the Committee for long on this subject but, on corporate tax avoidance, we have strengthened the capabilities of HMRC’s large business teams, introduced a diverted profits tax and led the way on the OECD’s work on base erosion and profit shifting. The Government have a proud record in that area.

However one looks at the tax gap, and there are different views on the size of the tax gap, corporate tax avoidance is a relatively small proportion. Whether one looks at the authoritative and well-respected HMRC numbers or at Richard Murphy’s numbers, no one claims that corporate tax avoidance is a large part of the tax gap. That is not to say that corporate tax avoidance is not important. It is important, but we also need measures that address all types of people who fail to pay the taxes that are due.