Oral Answers to Questions

David Gauke Excerpts

Tuesday 12th October 2010 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

1. What steps his Department is taking to increase the level of tax compliance.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Chief Secretary to the Treasury announced £900 million of investment in Her Majesty’s Revenue and Customs to tackle avoidance, evasion and fraud, sending a clear signal that the spending review will be focused on both fairness and deficit reduction. It will include an increase in prosecutions and steps to tackle organised criminal excise smuggling. HMRC also recognises the importance of helping businesses to get their tax right and has launched additional education and guidance packages in order to do so.

[Nia Griffith]

Given the enormous importance of reducing the tax gap, and thereby reducing the deficit, what assurances can the Minister give that actually he will be taking on more tax officers and ensuring a good geographical spread to make sure we get in the maximum tax revenues possible?

[Mr Gauke]

As was made clear in the Chief Secretary to the Treasury’s statement, the Government are determined to reduce the tax gap. It currently stands at £42 billion. It is too high, but we are determined to take measures to address it and we have already announced proposals by which we can reduce the tax gap.

[Kevin Brennan (Cardiff West) (Lab)]

2. What representations he has received on variations between the English regions and constituent parts of the UK in respect of the effects of the measures in the June 2010 Budget.

--- Later in debate ---

[Mike Freer (Finchley and Golders Green) (Con)]

11. What steps his Department is taking to simplify the tax system.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government are committed to simplifying the tax system. To help to achieve that, the Government have established the independent Office of Tax Simplification. Business and tax professionals have also consistently pointed to the way in which tax policy is developed, legislated and implemented as a contributing factor to overall complexity. We published a discussion document alongside the June Budget setting out proposals for a new approach to tax policy making.

[Mike Freer]

Will the Minister advise on the progress of the interim reports for the Office of Tax Simplification, specifically on IR35 and tax reliefs?

[Mr Gauke]

The OTS is looking at two areas. One is reliefs and exemptions, and although the timing of the publication is to be finalised and that is a matter for the OTS, there will be an interim report, I believe in November, on this area. With regard to the reform of small businesses, including IR35, the OTS intends to report in time for the Chancellor to take into account its views in preparation for the Budget.

[Lorely Burt (Solihull) (LD)]

12. What steps he is taking to make the tax system fairer.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government believe that the tax system should give more support to those on low to middle incomes and reward the efforts of those who choose to work. At the June Budget, we announced a £1,000 increase in the personal allowance for 2011-12, which will remove 880,000 of the lowest-income taxpayers from tax altogether. Our longer-term goal is to raise the allowance to £10,000, with real-terms steps in that direction every year.

[Lorely Burt]

I am grateful for that answer. May I ask my hon. Friend what the coalition Government can do for my constituent Kath Hemmings and many like her? Kath is a single mum who has raised her daughter Victoria with no support and has at the same time worked hard and built her career. She is on the higher rate of tax by just a few pounds. Many children in Victoria’s class have two parents who earn under the top rate and have kept their benefit. What can we do to make things fairer for Kath, Victoria and many like them?

[Mr Gauke]

I understand the concern that my hon. Friend raises. The situation that we face is that there will be difficult decisions to get the deficit down—a point that Government Members appreciate. The difficulty is that looking at the issue on a household basis would mean creating a complex and large bureaucracy. We have come up with a proposal that will ensure that the poorest households are protected and will continue to receive child benefit.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

I welcome the Chief Secretary to the Treasury’s weekend announcement about a rural fuel derogation, which will make the tax system infinitely fairer in the islands and is a victory for common sense. I first raised the issue a few years ago. Does the hon. Gentleman feel that time was wasted by the previous Labour Government, who sat on their hands and did nothing for the islands?

When will the fuel derogation come into being? Will the Minister acknowledge that, despite that welcome step, we in the islands will still be paying more tax per litre than those on the mainland?

[Mr Gauke]

Was time wasted by the previous Government? Yes. What will the timing be? Negotiations need to be had with Europe, and there will be further announcements in due course.

[Simon Kirby (Brighton, Kemptown) (Con)]

13. What recent representations he has received on the time taken by Her Majesty’s Revenue and Customs to provide VAT numbers to new small businesses.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

Treasury Ministers receive representations on a range of subjects from organisations and individuals about aspects of service delivery.

[Simon Kirby]

I thank the Minister. A number of businesses in Brighton have waited a very long time to receive their VAT numbers. Does the Minister agree that the prevention of fraud is as important as providing a prompt service?

[Mr Gauke]

My hon. Friend is right. There is a need to balance the desire for a quick service with ensuring that we do not allow fraudulent registrations. Between April and September this year, 57.4% of applications were processed within the target 10 calendar days. There was an improvement in the rate during August and September, when 71.4% and 79.7% of applications were processed within the 10 days.

[Karen Lumley (Redditch) (Con)]

14. What assessment he has made of the effect on GDP of proposals to increase the level of economic growth in the June 2010 Budget.

--- Later in debate ---

[Karl Turner (Kingston upon Hull East) (Lab)]

15. What representations he has received on the new arrangements for child benefit which will apply to one and two-parent families.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Chancellor has received a number of representations on the planned changes to child benefit. It is not the Government’s practice to provide details of all such representations.

[Karl Turner]

Does the Minister agree with my constituent Christopher Sumpton, who points out that it is grossly unfair for a single mother earning £44,000 a year and supporting three children to lose her child benefit, given that the next-door neighbours earning £80,000 will not? Will Treasury Benchers explain why the Government are attacking women in this savage way?

[Mr Gauke]

As I said earlier, we do not currently have the capability to examine the situation on a household basis, but we do need to make difficult decisions. If the Opposition want to oppose each and every cut, including in the child benefit that is given to some of the wealthiest in society, they can take that position, but we are prepared to take those tough decisions.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does my hon. Friend think that the Opposition believe it would be fairer to tax the lower-paid and give the tax revenue to the higher-paid?

[Mr Gauke]

That appears to be their solution given that, as I understand it, they still advocate the increase in the national insurance contributions that we are going to counter by raising thresholds. If the Opposition wish to take that position, so be it.

[Kerry McCarthy (Bristol East) (Lab)]

I am afraid that the answers that the Minister is giving are simply not good enough. Can he explain the logic behind the child benefit proposal, if there is any? Why is the assessment not being made on household income rather than just on the highest earner’s income? Will it apply to a cohabiting high earner or just to married couples, and why will there be a phenomenally high marginal deduction rate? Is it not true that this is just another “back of a fag packet” policy that the Government have not thought through at all?

[Mr Speaker]

There were four questions there, but one answer will do.

[Mr Gauke]

I congratulate the hon. Lady on her appointment to her shadow ministerial position, but I point out what her former colleague Alan Milburn has said:

“In times of plenty, giving child benefit to high earners is a luxury the country can afford; in times of want I don’t think it is. We would be wrong to oppose it. I can’t see it having an adverse impact on social mobility.”

I know Alan Milburn belongs to the centre ground, but the Opposition really should not abandon it.

[Andrew Bridgen (North West Leicestershire) (Con)]

16. What recent estimate he has made of the proportion of the central Government tax take from residents of the east midlands which is spent on that region.

--- Later in debate ---

[Katy Clark (North Ayrshire and Arran) (Lab)]

18. How much tax revenue each enforcement and compliance officer in Her Majesty’s Revenue and Customs collected on average in the last financial year.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

HMRC’s enforcement and compliance officers engage in a wide range of activities, from dealing with relatively low-value errors made by small businesses and individuals to addressing significant risks among the largest corporate bodies, as well as countering criminal attacks on the tax and duty system. For that reason, HMRC does not collect statistics on the average revenue collected by an enforcement or compliance officer. Results of HMRC’s compliance activity were published in its 2009 autumn performance report.

[Katy Clark]

Given that we have already lost more than 9,000 enforcement and compliance officers, and I am told that each officer raises more than £600,000 after their salary, does the Exchequer Secretary not think that he should get those statistics and start recruiting people rather than sacking them?

[Mr Gauke]

As I said earlier, my right hon. Friend the Chief Secretary made an announcement a couple of weeks or so ago of about £900 million-worth of investment in HMRC over the spending review period. It is important to tackle compliance, and the Government, perhaps more than our predecessors, will be determined to do that.

[Bob Stewart (Beckenham) (Con)]

19. What assessment he has made of the effect on GDP of proposals to increase the level of economic growth in the June 2010 Budget.

--- Later in debate ---

[Karen Bradley (Staffordshire Moorlands) (Con)]

T2. Many small businesses in Staffordshire Moorlands tell me that they have enough to deal with without the intricacies and complications of the tax system. Will the Minister provide more information to the House about how the work of the Office of Tax Simplification will help those small businesses?

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

My hon. Friend is right to raise the concerns of business. We have a complicated tax system and the longest tax code in the world. The Office of Tax Simplification will make a very useful contribution to assisting the Government to identify unnecessary complexity and finding areas of reform.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

T4. Many pensioners in my constituency are concerned about the indexation of pensions changing from the retail prices index to the consumer prices index. A pensioner who currently receives a pension of £10,000 will be more than £800 worse off by 2016. Does the Minister think that it is fair for pensioners to be hit in that way?

--- Later in debate ---

[Mike Freer (Finchley and Golders Green) (Con)]

T6. Although my constituents accept the need to tackle Labour’s legacy, many of them have large families and are concerned about the changes in child benefit. Will the Minister consider transitional arrangements to help families to adjust?

[Mr Gauke]

We do have to take tough decisions. The full implementation proposals will be announced next week, but this is one of those occasions when we must make tough decisions, because we must face up to the enormous deficit. The Government are prepared to deal with it.

[Paul Blomfield (Sheffield Central) (Lab)]

T9. Will the Chief Secretary to the Treasury welcome the backing given by Olympic champion Jessica Ennis to the U-mix centre, which is a sports and leisure facility in Sheffield designed by Urban Mixtures, an inspiring group of young people who represent the real big society at work? Funding has been allocated for the project under the myplace programme, but has been frozen pending the comprehensive spending review. Will he share my hope that that funding will be unfrozen and allocated shortly?

--- Later in debate ---

[Penny Mordaunt (Portsmouth North) (Con)]

Does the Minister think that we will stand a greater chance of having fairer taxation now that Finance Bills are published and properly consulted on, and will that stop appallingly unfair policies such as the abolition of the 10p tax rate ever being introduced again?

[Mr Gauke]

We set out in June our plans for making tax policy and ensuring greater consultation, so that there is a clearer process when we develop policies. That has been widely welcomed by business and the tax professions, and we hope to build on the progress that we have made so far.