Lord Mackinlay of Richborough
Main Page: Lord Mackinlay of Richborough (Conservative - Life peer)Department Debates - View all Lord Mackinlay of Richborough's debates with the HM Treasury
(6 years, 9 months ago)
Commons ChamberThank you, Mr Speaker. I am glad to have caught your eye.
Much of this issue has an international dimension. We have done more than any previous Government on the annual tax on enveloped dwellings, creating capital gains tax for foreign ownership sales and ending non-dom status. We have opened up shared beneficial ownership information through the OECD and the base erosion and profit shifting initiative. We have introduced the diverted profits tax, so that when there is insufficient economic substance to transactions—particularly where intellectual property is held abroad—and undue payments are made to foreign jurisdictions, that can be stopped and taxed accordingly. We have stopped the shifting of debt interest to the UK to prevent artificial deductions in the UK.
However, there is one tax haven I am really rather proud of, and that is the one for the lower paid in this country. We have created a very low-tax environment for the very low paid. When we look at what Labour did between 1997 and 2010, we see there was a rather paltry increase in the personal allowance from just £4,045 to £6,475 over 13 years. In our seven years in government, we have increased that to £11,500. That is a serious tax cut for every low-paid person.
We are doing something similar with companies, and that, to me, is the key to this. I would like to encourage more companies back to the UK so that they can pay their fair share of tax, and that is being done. In 2010, the corporation tax take was £35 billion, but it is now up to £53 billion. Of course, the wealthy in the UK—the top 1%—pay 28% of all income tax, which is higher than at any time.
In this debate, we must not lose an understanding of what foreign jurisdictions and so-called tax havens are there for. They are actually essential in the mix of international trade. For instance, it is not uncommon for a French investing company to choose the Caymans or the British Virgin Islands as the place of contract for a deal to invest in, say, the Democratic Republic of the Congo. Though I have great respect for the legal system of the Democratic Republic of the Congo, the legal system and common law of the UK are what create legal certainty. These things are not always about saving tax or avoiding tax; they are about trying to make transactions in the right place.
So let us bear down on egregious tax planning. Let us continue the promotion of data sharing with our international partners. Let us make sure that global profits are taxed in the right place. And let us use our influence on our overseas territories. The Conservative party is doing those things more than the Labour party did in 13 years in government.