Oral Answers to Questions

David Gauke Excerpts

Tuesday 1st December 2015 Commons Chamber

[Philip Davies (Shipley) (Con)]

2. What estimate his Department made of the potential cost to the public purse of a HM Revenue and Customs regional hub being based at (a) Leeds and (b) Bradford.

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

HMRC announced the planned locations of its future regional centres based on a number of key principles that will enable it to deliver more for less. In addition to cost, HMRC has taken account of the quality of local transport links, the local labour market and future workforce supply and the need to retain the staff and skills it needs to continue its transformation. The changes will reduce HMRC’s estates costs by around £100 million a year by 2025.

[Philip Davies]

Does the Minister accept that basing the HMRC regional hub in Bradford would be cheaper for the taxpayer, that there is a suitable location available in Bradford but not in Leeds, and that an effective northern powerhouse does not mean basing everything in West Yorkshire, in Leeds? Will he think again about that matter?

[Mr Gauke]

My hon. Friend is, as ever, a doughty advocate for the interests of his constituents. The point I would make to him is that this is a regional centre for the whole of the Yorkshire and Humber area. To retain as many members of staff as possible and reduce redundancy costs, HMRC’s assessment is that Leeds is a better location for those working in York, Sheffield and Hull from where there is a direct train service to Leeds.

[John Pugh (Southport) (LD)]

rose—

[Jo Cox (Batley and Spen) (Lab)]

3. What steps his Department is taking to enable councils to retain receipts from business rates.

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

The Government have announced a radical reshaping of the state. By the end of the Parliament, local government will retain 100% of business rates to fund local services. The Government will shortly begin consultation on those reforms.

[Jo Cox]

My local authority, Kirklees, estimates that it will lose in excess of £30 million a year as a result of this policy and the changes to the local government grant. By comparison, Westminster Council’s income will increase tenfold. When will the Government provide clarity for councils such as mine on the redistributive element that will mean it will be able to plug that very significant shortfall in funding?

[Mr Gauke]

The devolution of business rates will retain the system of top-ups and tariffs that currently exist, so there will be no immediate loss to any local authority as a consequence of devolution. The point is that it devolves power to local authorities so that they have stronger incentives to boost growth. Local authorities that grasp that opportunity will see their business rates revenue increase.

[Stephen Hammond (Wimbledon) (Con)]

Does my hon. Friend agree that the point about last week’s announcement was that it was a defining moment for local authorities? Those local authorities that accept the principle of devolution of business rates can incentivise strong local business growth, and secure a local economy that is strong and that has jobs for its constituents. That is the key point.

[Mr Gauke]

My hon. Friend is absolutely right. He puts it very well. That is the key point: it is about ensuring that local authorities have the incentives to boost growth, and then local people can hold those local authorities to account.

[Nic Dakin (Scunthorpe) (Lab)]

What consideration has been given to doing something about business rates to support the steel industry in line with the outcomes agreed at the steel summit, which was chaired by the Secretary of State for Business, Innovation and Skills?

[Mr Gauke]

My right hon. Friend the Chancellor made it clear that the business rates review, which we have been undertaking in recent months, will be completed next year. Obviously, we are looking at all the representations that we receive in the context of that review.

[Glyn Davies (Montgomeryshire) (Con)]

4. What assessment he has made of the potential effect of the national living wage on wage growth.

--- Later in debate ---

[Sir David Amess (Southend West) (Con)]

12. What plans he has to raise the personal allowance during this Parliament.

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

The Government are committed to raising the income tax personal allowance from £10,600 to £12,500 by the end of this Parliament. This is alongside our commitment to raise the higher rate threshold to £50,000. More than 30 million individuals will benefit from these changes. The summer Budget 2015 confirmed that the personal allowance will increase to £11,000 in 2016-17, and to £11,200 in 2017-18.

[Sir David Amess]

In the light of what my hon. Friend has said, will he reassure me that, as the economy continues to recover and grow, the Government will follow the sound Conservative principle of allowing people to keep more of the money they earn to spend as they wish?

[Mr Gauke]

Yes. If we are to continue to raise the personal allowance and meet our commitments on income tax, we also need to make sure that we show discipline in departmental spending and, indeed, the welfare budget.

--- Later in debate ---

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

15. What fiscal steps he is taking to help people to keep more of the money they earn.

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

The Government have committed to raise the personal allowance to £12,500 and the higher-rate threshold to £50,000 by the end of this Parliament. In the summer Budget, the Government took the first steps towards meeting those commitments by increasing the personal allowance to £11,000 and raising the higher-rate threshold to £43,000. In 2016-17, 29 million people will pay less tax after those changes, and 570,000 will be taken out of income tax altogether.

[Mr Jayawardena]

Will the Minister outline what measures have already been taken to help married couples to keep more of what they earn? Would he consider helping stay-at-home parents further by increasing the marriage allowance for all taxpayers?

[Mr Gauke]

Since 2015-16, married couples and civil partners have been able to transfer 10% of their personal allowance to their spouse. The Government expect this to benefit up to 4 million couples by up to £212. This will increase in proportion to any increases in the personal allowance, which the Government have committed to raise to £12,500.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

Given that the ratio of savings to household debt has gone down from 11.8% in the first quarter of 2010 to less than 5% today, and that the downward trend appears likely to continue, why are the Government not taking steps to reverse that trend?

[Mr Gauke]

The Government are delivering one of the biggest increases in living standards that we have seen for many years. We have record levels of employment, we are providing economic security and we are one of the strongest growing economies in the G7. That is helping household finances up and down the country.

[Henry Smith (Crawley) (Con)]

19. Will the Minister tell us what measures will be taken to ensure that parents in my constituency and up and down the country who are returning to work do not have to spend every penny they earn on childcare?

[Mr Gauke]

My hon. Friend makes an important point. From September 2017, the Government are doubling the free childcare entitlement from 15 hours to 30 hours a week for working families with three and four-year-olds. That will be worth up to £5,000 per child. From early 2017, tax-free childcare will also be introduced, providing support worth up to £2,000 a year per child for working parents.

[Bob Blackman (Harrow East) (Con)]

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