Oral Answers to Questions

David Gauke Excerpts

Tuesday 10th September 2013 Commons Chamber

[Mr Dave Watts (St Helens North) (Lab)]

4. Whether he plans to introduce a land tax.

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

The Government have no plans to introduce a land value tax at this time. In our view, the complexity and cost of administering such a tax, and, more importantly, the likelihood of a significant increase in tax bills for many council tax payers, particularly those such as pensioners with liquid assets, means that such a proposal is not tenable.

[Mr Watts]

I thank the Minister for his response, but given that we have massive increases in house prices, massive increases in the value of farmland and builders and supermarkets land-banking and pushing up the price of land, and given that 1% of the population own 69% of our total land mass, is it not time for action? Do we not need a land tax?

[Mr Gauke]

The hon. Gentleman will be aware that some of the construction numbers of late are much more encouraging, and the Government are taking action to improve house building, including our Help to Buy proposal. Believe it or not, not every problem this country faces can be solved by another tax.

[Steve Brine (Winchester) (Con)]

5. What recent steps he has taken to support small businesses.

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[Miss Anne McIntosh (Thirsk and Malton) (Con)]

7. What his policy is on the payment of corporation tax by foreign-based companies; and if he will make a statement.

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

The Government are committed to creating the most competitive corporation tax regime in the G20 to support investment that drives economic growth. We want a system that is stable and fair with all companies abiding by the rules and making their contribution. We are cutting the rate to 20% by 2015, clamping down on avoidance and aggressive tax planning and driving forward multilateral efforts to modernise the international tax framework.

[Miss McIntosh]

Will my hon. Friend join me in celebrating the water industry, a flagship industry since its privatisation over 20 years ago? Will he explain to the House the benefit to consumers of deferring corporation tax against current foreign investment received?

[Mr Gauke]

We need investment in infrastructure, including water and my hon. Friend is right to highlight the work being done on that. We want a tax system that ensures that everybody pays their fair share, but also encourages that type of investment.

[Nigel Mills (Amber Valley) (Con)]

12. What recent progress he has made on his plans to tackle tax avoidance.

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

The Government continue to make strong progress on tackling tax avoidance. Following on from our announcement at Budget 2013, we have introduced the UK’s first general anti-abuse rule, which will act as a significant deterrent to abusive avoidance. We have completed our consultations on avoidance using partnership rules and the use of offshore intermediaries, and we have just launched a consultation on new information requirements and penalties for the promoters of tax avoidance schemes.

[Mr Speaker]

I would like to wish the hon. Member for Amber Valley (Nigel Mills) good luck for his forthcoming wedding. I trust all will go as smoothly as his question.

[Nigel Mills]

Thank you, Mr Speaker.

I welcome the measures that the Minister has announced. My constituents want to see everyone paying the tax they owe on their income. Does the Minister think that any measures are required to make sure that trade unions do that as well?

[Mr Gauke]

First, I add to the words of Mr Speaker and, perhaps, wish good luck to my hon. Friend’s future wife. He draws attention to a story that we have seen in the last few days: allegations of tax avoidance against Unite and against Labour. Maybe the links between the two are closer than we realised.

[Stewart Hosie (Dundee East) (SNP)]

While it is right that we all press down on active tax avoiders, a number of small businesses that find themselves categorised as such are simply unable to pay the correct amount. Does the Minister think that the average of 29 minutes that it can take for the Revenue to answer a telephone call, the fact that the tax code has reached 11,500 pages, the closure of local offices and the reduction in Revenue headcount—things for which he is responsible—might be contributing to this, at least in some way?

[Mr Gauke]

On support for small businesses, HMRC has in place a time-to-pay arrangement. On the service that is provided by HMRC, it is always seeking to improve and deal with telephone calls and letters as efficiently as possible. But we have to bear in mind that the yield that HMRC is bringing in is increasing by £10 billion over the course of this Parliament. HMRC’s performance on phone calls and letters is better than it was when we came to office. It has made considerable progress and that should be acknowledged.

[Neil Carmichael (Stroud) (Con)]

15. What recent assessment he has made of the contribution to the economy made by the manufacturing sector.

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[Lindsay Roy (Glenrothes) (Lab)]

18. What estimate he has made of the annual value of the reduction in the additional rate of income tax to 45% to a person earning £1 million per annum.

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

The cost of reducing the additional rate of income tax to 45% is set out in table 2.2 of Budget 2013. We have not broken down the impacts on individuals by income ranges because of the significant behavioural response associated with the additional rate of income tax. The behavioural response is estimated in aggregate and reflected in the costing.

[Lindsay Roy]

Yesterday, yet another food bank opened, in Methil in my constituency. Fifty volunteers are doing an exceptional job in difficult circumstances. One of the volunteers asked me, “Why has the Chancellor prioritised tax cuts for the very rich, instead of using the revenue to alleviate family poverty in our society, and in Methil in particular?”

[Mr Gauke]

I would hope that the hon. Gentleman said in response that in the 2012 Budget we saw increases in stamp duty on high-value properties and a clampdown on tax allowances and reliefs for the wealthiest, all of which raised far more from the wealthiest than the 50p rate, which was failing to raise revenue.

[John Robertson (Glasgow North West) (Lab)]

T1. If he will make a statement on his departmental responsibilities.