Section 5 of the European Communities (Amendment) Act 1993

Debate between David Gauke and Cathy Jamieson

Tuesday 24th March 2015 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I am grateful for the opportunity to respond to the motion on behalf of the Opposition. Looking back over the corresponding debate last year, I was interested to see that the Minister’s predecessor, the right hon. Member for Loughborough (Nicky Morgan), told the House that, due to the tight timetable,

“the Treasury has made every effort to provide early copies of the convergence programme document in advance of today’s debate.”—[Official Report, 30 April 2014; Vol. 579, c. 851.]

I acknowledge that today the Financial Secretary indicated the difficulties in providing the document in a timely fashion. I received a copy only on Friday. At more than 250 pages long, it was perhaps not ideal, but it certainly made for interesting weekend reading.

[Mr Gauke]

Does the hon. Lady recognise that many of those pages were familiar, having been in the Budget documents? No doubt, by Friday, she had already read and digested all the Budget documentation.

[Cathy Jamieson]

I was just about to say that I know the Minister is courteous and accommodating, so I understand that the delay might have been unavoidable. As he quite often does, he has anticipated a number of the questions and points I intended to raise—indeed, the whole thrust of my remarks is just how familiar some of the documents and the issues they cover are, given that they have been discussed already and are likely to be debated again tomorrow. I hope to be able to do the subject justice this afternoon.

Some things have changed since last year. Looking across the Chamber, I see that, unlike last time, the hon. Member for North East Somerset (Jacob Rees-Mogg) is not in his customary place. I know what a keen interest he normally takes in European matters, having had the pleasure of his company in many European Committees, including one only this morning. As the Minister last year observed, the hon. Gentleman

“could go on for hours and hours on that particular subject.” —[Official Report, 30 April 2014; Vol. 579, c. 854.]

Given his absence from the Chamber this afternoon, the debate might be shorter than was anticipated.

As the Financial Secretary observed, once again we have been provided with a barrage of figures, accompanied by bouts of backslapping, boasts and congratulations from the Government to themselves. The overarching theme of the document is to show just how well the Government have done—and, no doubt, the Government would say that is entirely in order from their perspective. However, the document—and to some extent this debate—is something of an exercise in repackaging. Bits of the Red Book and bits of the Office for Budget Responsibility’s “Economic and fiscal outlook” are spliced together with a new binding—a theme and variations on the Budget, except there is little theme and scant variation. Although the Government can try to repackage the Budget, I would argue that they cannot mask some of the problems we have already raised and the reality of the failure.

Part of me thinks that the Minister’s tune, like the Chancellor’s last week, strikes a pretty discordant note, because the truth is that, under even the mildest scrutiny, the Government’s economic credibility behaves like a sand castle in the waves, melting away before our eyes. Attempts have been made, through choice language and careful presentation, to obscure the impact that this Government have had, and continue to have, on the people and public services of this country. The theme that runs through the Red Book and the report we are discussing today is that everyone can put away their umbrella, because the sun is shining, people across the country are better off, and we should all be very grateful as we walk hand in hand into the sunlit uplands of peace and prosperity. [Hon. Members: “Hear, hear!”]

I hear the cheers from the Government Benches. Hon. Members may wish to wait for the next part of my speech before further congratulating the Government. The picture is very different for the millions of people across the country who are still firmly mired in the slough of despond because of what has happened to their lives. For example, there are those who are £1,600 a year worse off since this Government took office, or those who are £1,100 a year worse off as a result of the tax and benefit changes made by this Government, including the rise in VAT. The hundreds and thousands of people across the country, including many in my constituency, who are forced to rely on food banks—a persistent and pernicious feature of Tory Britain—are not feeling the benefits of the recovery. For them the sun is not shining. They can see through the smoke and mirrors that the Government use to try to paint a glowing picture.

To judge only by the language and tone of the document in which the Government claim to have laid the foundations for a strong economy and a fairer society, one might be forgiven for thinking that the worst was over. In some ways that is the most troubling aspect, because we know that the worst is yet to come. The Chancellor may have shuffled the numbers around, but no shuffling can conceal the truth about the Government’s economic plans. As the OBR said, the Budget will mean

“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years”,

and a

“sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

Perhaps I do not share the Chancellor’s or the Minister’s sunny disposition, or perhaps I am more in touch with the reality of the lives of people across the country. I do not see much fairness in the document before us or in the Government’s approach. The cuts of more than 5% planned for 2016-17 and 2017-18 are twice the size of any annual cuts in this Parliament. That has resulted in a somewhat erratic trajectory, described by the OBR as a “rollercoaster ride” of public spending. Remarkably, for all the cuts yet to come, the Government continue to repeat the tired mantra that “we are all in this together.”

That is not borne out by the evidence. Wage growth has been stagnant over the course of the Parliament. Energy bills, on the other hand, have gone up by around £300 over the past five years. Although the Government boast of more jobs and high rates of employment, we have to consider what kind of jobs these are. Many are low paid. For evidence of that, one need look no further than the state of the nation’s tax receipts. Income tax receipts and national insurance contributions are £97 billion lower over the course of the Parliament than was forecast in 2010. Jobs are often insecure and uncertain, typified by the over-reliance on zero-hours contracts. Alongside the proliferation of insecure, low-paid jobs, the wealthiest have been handed a £3 billion tax cut, while the poorest have lost out disproportionately from the cuts to tax receipts and the increase in VAT.

Oral Answers to Questions

Debate between David Gauke and Cathy Jamieson

Tuesday 9th December 2014 Commons Chamber

[Mr Gauke]

Yes, my hon. Friend is correct—we have substantially increased the number of prosecutions in that area. The yield brought in by HMRC as a consequence of its enforcement action has also increased substantially, and in the autumn statement it was announced that that yield is anticipated to be £26 billion in 2014-15—around £9 billion more than when we came to office.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The Minister has made much of what the Government are doing on tax avoidance, but will he tell the House by how much tax receipts were revised down in the autumn statement?

[Mr Gauke]

It is the case that tax receipts were revised down, but so was expenditure on debt interest payments. This country continues to face the major challenge of living within our means, and it is important to have a Government who stick to the long-term economic plan that delivers that.

[Cathy Jamieson]

The Minister gave a very partial answer because he did not mention the fact that the Institute for Fiscal Studies has said that tax receipts have been revised down by £25 billion by 2018-19. Is one key reason for that the fact that wage growth has been revised down again, and that the Government’s failure to raise living standards for working people is why they have also failed to meet their promise to balance the books by next year?

[Mr Gauke]

The answer to increasing wage growth is not just to observe that it would be nice if wages went up but to have no policies to do that. If we want wage growth, we need investment in the UK, which we are getting. We want more people in jobs, and a record number of people are in jobs. We want to improve our training and education system, and record numbers of people are taking up apprenticeships. We want to improve our transport infrastructure, and the Government have committed to the biggest road building programme since the 1970s. If we want wage growth, we must stick to the long-term economic plan.

Taxation of Pensions Bill

Debate between David Gauke and Cathy Jamieson

Wednesday 29th October 2014 Commons Chamber

[Mr Gauke]

At the time of the Budget, we set out our estimates of the implications for the public finances, certified by the Office for Budget Responsibility. We have also made a number of announcements since the Budget that will have a revenue impact. The Office for Budget Responsibility will return to this issue at the autumn statement, when it will set out its numbers in the usual way. The estimates have yet to be certified by the Office for Budget Responsibility—as one would expect, given that we are still some way from the autumn statement—but an update on the numbers that were published in March will also be set out in December.

The changes we have announced have resulted in moving some revenue from one year to another, rather than fundamentally changing the face of the public finances, so in broad terms their overall tax impact is not considerable, certainly when compared with the substantial changes that the Government have made, such as increasing the state retirement age or reforming public sector pensions.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

To follow up the question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), there has been a suggestion that the change could lead to a windfall for the Treasury at a time when that would be very helpful for future Budgets. What does the Minister say to that suggestion, which has been made by some in the real world out there?

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[Cathy Jamieson]

Yes, I am indeed aware of that report. I shall go on to raise similar concerns and seek answers from the Minister to them in due course.

In addition to setting the three tests, we have also commissioned a retirement income taskforce, chaired by Professor David Blake of the pensions institute at the Cass business school. We wanted to look at how we could enhance retirement income and ensure that savers had access to good-value products alongside the support that they needed.

I would argue that our position on pensions has been consistent ever since our time in government. When the Labour Government took office in 1997, there was a crisis of pensioner poverty resulting from a decline in the value of the state pension under the Conservatives. There was also a crisis of trust in private pension provision following the mis-selling scandals that previous reforms had opened the way to. Responding to those challenges, the Labour Government built a robust regulatory framework to police and protect people’s pensions. That framework included the Pension Protection Fund. We also laid the groundwork for the universal state pension with a triple lock guarantee, and established the National Employment Savings Trust to help people to save for their retirement.

The reason that I mention those reforms is that none of them was rushed through. They were all based on sound evidence and consultation, and they had the common aim of helping people to make the right choices while affording them the certainty and security in retirement that they deserved. We now have to consider whether the present Government’s approach to pension reform has been consistent, or whether it seems at times to be erratic and contradictory.

To be fair, things began well for this Government. The single-tier pension and the auto-enrolment legislation represented positive steps to build on the progress made by the previous Government. Those reforms were based on evidence, consultation and consensus. That was acknowledged by, among others, Otto Thoresen, the director-general of the Association of British Insurers, who said that

“good consultation and a good period to execute”

improved the chances of legislation being successful.

However, the Government’s approach to the latest pension reforms, announced in the Budget statement, appears disjointed. Prior to announcing the reforms, they did not consult, either consumers or the industry. This has resulted in some of the issues that have been raised today not being flagged up at that time, and in the Government’s argument losing some of its intellectual rigour.

I would like to draw the House’s attention to the comments of the shadow Minister for Pensions, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East on Second Reading of the Pension Schemes Bill, in which he highlighted the discord between the Government’s stance on pensions in the accumulation and retirement phases. That has been commented on today as well. In the accumulation phase, the Government’s approach—one that the Labour Government had fostered—is founded on the recognition that the pensions landscape is complex and difficult to navigate. That approach harnesses inertia to encourage pension savings, with individuals employed without pension schemes being placed on them by default. That is a sensible approach and it has proved effective.

However, the Government’s approach to the retirement stage, as outlined in the latest reforms, departs from that model, shifting the emphasis from the importance of accumulation to the ease of access. This Bill places the onus of choice back on the individual, working on the assumption that they will be able successfully to navigate what my hon. Friend the shadow Pensions Minister has called the “jungle of financial products”. He referred to there being a “tension” between the two approaches. He has been a friend of mine for many years, and I think that that is typical of his diplomatic way of expressing himself. The Association of British Insurers has also noted that tension, observing that:

“Automatic enrolment has seen millions more people saving for their retirement and further pension reforms should build on this. We are very concerned that the focus of recent discussion around the Freedom and Choice reforms is on early access to cash at age 55 rather than on building assets for income in retirement.”

The Minister referred to the fact that the Bill introduces the option of taking uncrystallised funds pension lump sums. I have to say that I have not been able to think of a better acronym than the one he came up with, try as I might. As he said, that provision will allow people to withdraw money directly from their pensions without first designating it for drawdown. Individuals will be able to take 75% of each withdrawal tax free, with the rest taxed at the marginal rate. This has been described by some as allowing people to use their pension almost like a bank account. More than any other measure in this Bill, it will expedite people’s access to their pension.

I should like to probe the Government’s thinking on this point a bit further. In searching for greater clarity, I repeat the question that my hon. Friend the shadow Minister put to the Pensions Minister in the earlier debate. He asked:

“If auto-enrolment policy was correct to assume that individuals need to be guided, helped and encouraged into better pension decisions, why do we no longer think that is the case at retirement?”—[Official Report, 2 September 2014; Vol. 585, c. 206.]

Perhaps the Minister will be able to respond to that question when he sums up the debate today.

In the meantime, I think we all agree that the Bill will increase innovation and result in a raft of new pension products entering the market. In many ways, that would be a good thing but, as I have said before, the flipside to freedom and choice is risk and complexity.

[Mr Gauke]

As ever, the hon. Lady is making a thoughtful and probing speech. It would be fair to say, however, that her tone is not one of great enthusiasm for greater flexibility and choice in the pensions system. Will she tell the House whether her party is considering reversing the changes that we are introducing today?

[Cathy Jamieson]

I am surprised by the Minister’s comment. I see it as my duty and responsibility as the shadow Minister to make thoughtful and probing speeches. I also said at the outset that we welcomed the opportunities that increased flexibility would bring, but people need to understand that the flipside to that freedom and choice will be risk and complexity. This is the place in which we should debate that, as we discuss the principles behind the Bill. We will also probe the matter further in Committee. The Financial Conduct Authority has observed that firms might devise

“complex, opaque and overpriced products”

that do not represent good value for customers. It is incumbent on us to understand that risk, and to ask questions about how such products would be regulated. Furthermore, the marketing of those new products might not always clearly articulate the risks involved.

Finance Bill

Debate between David Gauke and Cathy Jamieson

Wednesday 2nd July 2014 Commons Chamber

[Mr Gauke]

New clause 13 and new schedule 5 make provision to ensure that individuals who wish to make use of the new pension flexibilities announced by the Government do not face detrimental tax consequences if they take their tax-free lump sum and then defer a decision on how to access the remainder of their pension savings.

On Budget day, the Government announced radical reforms that will enable people with defined contribution pension savings to have more choice and control over their pension wealth from next April. The greater choice and flexibility that these reforms will give pension savers have been widely welcomed. There has been broad consensus that individuals who have been responsible and saved for their future should be trusted to access their pension savings in the way that most suits them.

We announced a consultation on the detail of these longer-term proposals, which has now closed. We will publish a response in the near future, and legislation will be brought forward later this year to implement the necessary changes, but the Government wanted to make sure that people who are approaching retirement now would not miss out. As a first step, we introduced clauses 39 and 40 to ensure that individuals nearing retirement this year can benefit from a wider range of options before next April. We expect that this will enable around an extra 85,000 people to access their pension wealth as a lump sum this tax year. In addition, 400,000 people will have the option of receiving significantly greater withdrawals from their pension savings, but we did not want to stop there.

Usually people lose the advantages of a tax-free lump sum if they do not decide what to do with the rest of their pension savings within six months of taking the lump sum. On 27 March, the Government announced that those who had already taken a tax-free lump sum from their defined contribution pension savings, but had not yet secured their pension, would be given more time to decide what they wished to do with the rest of their retirement savings. We also did not think it would be fair to prevent people from taking their tax-free lump sum now simply because they wished to wait to access their pension savings more flexibly from next April, so the Government promised to introduce new provisions in the Bill to ensure that people do not lose their right to a tax-free lump sum if they would rather use the new flexibility this year or next.

The provisions are technically quite detailed, but their purpose is not. Full pension flexibility for defined contribution savings will be introduced in April 2015, and until that happens we want people to be able to take their tax-free lump sum and to have until October 2015 to make their pension choices without tax consequences. The changes made in new clause 13 and new schedule 5 will enable people to take a tax-free lump sum and to wait until April 2015 to decide how they want to access their pension savings: by transferring the rest of their pension savings to another pension provider to enable them to access them more flexibly; by repaying the lump sum when the scheme that paid it will accept it in order to access the whole of their savings more flexibly; or by receiving the rest of the pension savings as a lump sum under the higher limits that clause 40 provides. Those changes also ensure that people who have the right to receive a tax-free lump sum at an earlier age, or of a larger amount than is normally allowed, can use the new flexibility and keep those rights.

New clause 13 and new schedule 5 help people who have worked hard to save into a pension, enabling them to take some of those savings tax-free now, and to take advantage of the new flexibilities for the rest of their pension savings.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I understand that the Minister is trying to introduce an element of fairness into the new arrangements while avoiding unintended consequences. Can he give us some assurances about the time scale for the rules being brought in, and tell us whether he has done additional work to ensure that there are no unintended consequences?

[Mr Gauke]

We have been engaged in a consultation process, which closed recently, and have engaged fully with all interested parties more generally on this policy. I will address some of these points when I respond to new clause 9, but we will respond shortly to the consultation, setting out the details of how the policy will be taken forward. This is an important matter, and it is important that we get things right. There are a number of aspects to it, and new clause 9 takes us into some of those aspects that, although perhaps not relevant to the Finance Bill, are of significance none the less. I can assure the House that there will be plenty of opportunities to debate the details, given that legislation on the subject will be introduced, as the hon. Lady knows full well.

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[Cathy Jamieson]

I understand the point about the timing of the guidance, and I will discuss that in my speech. The Pensions Minister has said:

“Face-to-face, the Chancellor used that phrase, and we will honour that, of course. But if face-to-face means individuals sitting down for an hour with someone every-where in the country, that would be very, very expensive. Face-to-face could involve groups, for example; a lot of the conversation’s generic.”

Some people may have concerns about what is being referred to in terms of guidance. Will the Minister give us some further information at this stage?

[Mr Gauke]

The hon. Lady, perfectly understandably, is seeking more information at this point. I do not think I am being in any way unreasonable in saying that we will set out the details of this in the near future. We are working very closely with interested parties, whether the industry or consumer groups, to ensure that we get this right. We have set out the broad principles behind our guidance guarantee, and we believe that we can deliver something that provides the protection that all Members want.

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[Mr Gauke]

I used the word “shortly;” I could have said “in due course,” but I hope that my hon. Friend is more encouraged by “shortly.” He will just have to be a little more patient, but I can assure him that it will not be very long before he will be satisfied on those details.

Let me say a brief word about guidance, which I have touched on already. The Government believe that, as people have greater choice over retirement, they will need the right support and guidance to make the choice that is right for them, so we are working to ensure that everyone approaching retirement with a defined-contribution pension can receive impartial, face-to-face guidance on the choices available to them. However, the guidance guarantee is not a tax rule, so I hope that hon. Members will understand that although it is a very important part of the radical reforms that we are introducing from April 2015, it does not form part of the changes being discussed today.

The Government have already published information on the impact of clauses 39 and 40, as well as on new clause 13 and new schedule 5, and have consulted further on their broader proposals. New clause 9 is therefore unnecessary. Whether that is enough to persuade the hon. Member for Kilmarnock and Loudoun not to press her case, I somewhat doubt, and no doubt she will put it very reasonably, but I hope that she considers my response reasonable as well. Whether she considers it reasonable or not, that is my response.

The overall purpose of the changes that the Government are making today is to enable people who had recently taken the tax-free lump sum from their defined-contribution pension savings to use the new flexibility, while remaining in broadly the same tax position. I therefore hope that new clause 13 and new schedule 5 will be added to the Bill, and I request that new clause 9 is not pressed to a vote.

[Cathy Jamieson]

I want first to put something on the record. Earlier, the hon. Member for Redcar (Ian Swales) suggested that when the Labour Government left office the tax gap was £42 billion, but the most recent HMRC figures show that in 2009-10 it was £32 billion. I think that addresses the point that he raised yesterday with my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood).

To return to issues from today’s debate, as I observed in Committee, the amendment that we moved then and the discussion on it addressed some of the most important clauses in the Bill. The Minister suggested yesterday that I could make the most unreasonable things sound reasonable. I think that today he has done a reasonably good job of putting across the Government’s view. However, I would have to say at the outset that he has not said enough to convince me not to press our amendment—he still has time to say something during the debate—and I will explain why.

As I have said, the reforms provided for in these clauses are very important. Our primary concern in tabling new clause 9 and in pressing it is to ensure that those affected have the information that they need to make an informed choice, because that is very important indeed.

Finance Bill

Debate between David Gauke and Cathy Jamieson

Tuesday 1st July 2014 Commons Chamber

[Mr Gauke]

Again—I hope the record will pick that up—this is for investment managers, not hedge fund managers. That is the argument the hon. Gentleman is making, which is different from the argument we have heard from the Opposition on occasions. For example, in July last year, the Leader of the Opposition accused us of making a tax cut for hedge funds. In the shadow Chancellor’s response to the autumn statement in December last year—he gave a speech that many of us will remember for a long time—he called on the Government to reverse the tax cut for hedge funds. It appears that the Labour Front-Bench position is to accept that there is no tax cut for hedge funds. That, I suppose, is progress. [Interruption.] As the hon. Member for Kilmarnock and Loudoun says, it is for investment managers, not hedge funds. She is still wrong, but she is perhaps less awry than she was. That is progress, and I hope that the Leader of the Opposition and the shadow Chancellor will withdraw any suggestion of a tax cut for hedge funds. We will be looking out to see whether that features in any Labour party promotional material over the months ahead, but I am glad we have made progress on that front at least.

In conclusion, clause 107 supports the Government’s objective to create a more competitive tax system and will increase the attractiveness of the UK as a location for fund domicile. Amendment 67 would serve no useful purpose, given the information already made available about this measure. New clause 7 rectifies a minor omission from clause 105 and ensures that the reduction in the SDLT higher rate threshold to £500,000 operates as intended. I therefore move that new clause 7 be accepted and request that amendment 67 not be pressed.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Let me begin where the Minister left off, on new clause 7. It is worth noting that section 74 of the Finance Act 2003 provides SDLT relief for lessees of flats who collectively acquire the freehold of their block under rights afforded by the Landlord and Tenant Act 1987 and the Leasehold Reform, Housing and Urban Development Act 1993. The relief sets the rate of SDLT according to the consideration for the freehold divided by the number of flats, which brings the amount of SDLT paid by lessees more into line with what they might have paid had they been able to acquire the freehold of their flats separately. As the Minister said, such acquisitions are commonly undertaken by a company in which the lessees are shareholders. Under such circumstances, the 15%, higher rate SDLT charge in schedule 4A to the Finance Act 2003 will apply if the main consideration exceeds the higher rate threshold.

The Minister pointed out that clause 105 reduces the higher rate threshold from £2 million to £500,000 for transactions where the effective date is on or after 20 March 2014. However, clause 105 omitted to apply the reduction to the relief in schedule 74 to the Finance Act 2003, an omission that new clause 7 rectifies. It is welcome that the Minister has brought forward something to deal with that earlier omission and I will therefore not take issue with him on that at present.

Let me turn to amendment 67 and stamp duty reserve tax. I hope hon. Members will forgive me if I confess to having a sense of déjà vu, because it is not the first time we have debated this issue. Not only did we debate it in Committee, as the Minister acknowledged; we also debated it in last year’s Finance Bill. In fact, it is almost a year ago to the day that my esteemed colleague the hon. Member for Nottingham East (Chris Leslie) was standing at this Dispatch Box trying, as I will be, to make the Government see sense and accept our call for a report to be published. [Interruption.] I think my hon. Friend is indicating that he failed on that occasion.

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[Cathy Jamieson]

I thank my hon. Friend for that intervention. I can only hazard a guess as to why the Government consistently refuse to look at producing any report or to accept any of the requests—quite reasonable requests—that we have brought forward, seeking further information, further transparency and these particular pieces of information. I am forced to conclude either that the work has not been done or that the Government, for whatever reason, do not wish to share those facts and figures with us. That is a pity because it would help hon. Members of all parties if this information were put forward. I shall come on to deal in a few moments with some of my hon. Friend’s other points, particularly regarding how his and my constituents will be affected.

As the Minister said, the Government new clause removes the stamp duty reserve tax charge for which fund managers are liable when investors sell or surrender their units in UK unit trust schemes or shares in UK open-ended investment companies. Some people have argued that SDRT could essentially be considered as some form of transaction tax—not a term that everybody would use, but it has certainly been argued in that context—currently levied at what seems to be a not unreasonable rate of 0.5%. This is the element that the Government propose to remove.

As I have indicated, our amendment would require the Chancellor to publish a report—I always try to be reasonable, fair minded and mild mannered in my requests to the Minister, as he knows from our many discussions in Committee—to show exactly who benefits and who would be left worse off through the abolition of SDRT on investments in those units trusts and OEICs. As I said in Committee, in these straitened times, hon. Members—as my hon. Friend the Member for Inverclyde (Mr McKenzie) suggested—could be forgiven for assuming that such a generous tax break would fall to those who really need it, such as the millions of hard-working taxpayers who are £1,600 a year worse off under this Government than they were in 2010.

[Mr Gauke]

rose—

[Cathy Jamieson]

I will give way to the Minister, who I am sure will want to tell me what he is doing for those hard-working taxpayers.

[Mr Gauke]

The hon. Lady raises the question of who benefits, which will no doubt be a feature of our debate this afternoon. At this point, however, will she be clear and put it on the record that this is not a tax cut that is relevant to hedge funds?

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[Cathy Jamieson]

As I said in Committee and as we have seen in some of the to-ing and fro-ing this afternoon, this tax cut relates to investment fund managers. I hope the Minister will listen very carefully to my points. As my hon. Friend the Member for Inverclyde and I have said, the families that, according to the Institute for Fiscal Studies, will be £978 a year worse off by the next election thanks to the Government’s tax and benefits changes will want to know exactly who benefits from this particular tax cut. I am sure that the Minister is now going to tell us how giving investment fund managers that tax cut will provide support and assistance for the hard-working families in my and my hon. Friend’s constituencies.

[Mr Gauke]

I have already set out how this tax cut will benefit those contributing towards their pension. I take it from the hon. Lady’s earlier answer to my intervention that she accepts that this is not a tax cut for hedge funds. Will she explain precisely what the Leader of the Opposition was on about when on 10 July 2013 he told the Prime Minister in Prime Minister’s Question Time that there was a £145 million tax cut for “hedge funds”? The Leader of the Opposition was wrong, was he not?

[Cathy Jamieson]

I am going to come on to the issue of who benefits, but I noticed that, once again, the Minister was not able to say how this particular tax cut proposed by the Government is going to benefit our constituents.

Let me deal with the Government’s tax impact note, which provides some information, saying that the chief beneficiaries of this particular initiative will be the 100 UK fund managers who control 2,500 investment schemes. Hon. Members would doubtless be very concerned if they thought that the overall health of the UK’s investment industry was somehow at risk, which is why the initiative was brought forward. One might think that it was somewhat ailing if it was deserving of a tax cut amounting to, as my hon. Friend the Member for Inverclyde said, £160 million a year. However, if we look at the reality of the industry, we could readily say that it is in pretty good health, raising the question of whether the industry really needs the Government’s help, which could more usefully be put to assisting those hard-working families feeling the squeeze as a result of Government policy.

According to the Investment Management Association, as of January 2014, its members managed over £4.8 billion in the UK on the basis of OEIC funds alone and around £4.5 trillion overall. The association also tells us:

“UK assets under management and funds under management are at record levels, and the UK retains its position as the second largest asset management centre in the world after the US.”

It could well be argued, therefore, that the UK’s investment industry is doing okay— without the intervention or assistance of the Government.

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[Cathy Jamieson]

If the Government, of course, were to produce the report requested in this mild-mannered, sensible and reasonable amendment, we would perhaps have more information on who would benefit—exactly what amendment 67 calls for.

[Mr Gauke]

The hon. Lady always puts forward her proposals very reasonably, but I have to tell her that there is no need for a report on this issue. Schedule 19 stamp duty reserve tax is not paid by hedge funds, so abolishing schedule 19 SDRT does not benefit hedge funds. Does she accept the point that this has nothing to do with hedge funds?

[Cathy Jamieson]

I want to move on to discuss further who exactly it does benefit, which is the crucial point. We sometimes hear from the industry that there is some kind of existential threat presented by people moving to Luxembourg, Switzerland or wherever else, but it seems that despite all that, the industry is, as I said, in pretty good health.

One of the things that worry Opposition Members is that the only people about whom the Government seem to be genuinely concerned are those who are already wealthy and privileged. They have cut the top rate of income tax for those earning more than £150,000 per annum—we discussed that earlier, so I shall not say more about it at this stage—and, as bank bonuses rise again, they continue to oppose our proposal for a bank bonus tax to help young people back into work. They have failed to balance the books, as they promised to do, yet it seems that they can still find £160 million a year for those who may not need it as much as others.

--- Later in debate ---

[Cathy Jamieson]

As I said earlier, one thing that the Government could do and have consistently refused to do would help thousands of people throughout the country: they could abolish the hated bedroom tax. They could also accept our proposal for a tax on bankers’ bonuses, and adopt our properly designed programme to get young people back into work and give them the start that they want. Until we get young people into work, ensure that they have adequate housing and ensure that they can have a decent quality of life, the majority will not have an opportunity to think about saving from one year to the next, let alone trying to invest for the longer term. In Committee, I asked whether it was only me—or only Opposition Members—who held this view. My hon. Friend the Member for Gateshead (Ian Mearns) made a powerful speech in which, like my hon. Friend the Member for Inverclyde, he described the reality of what was happening to young people in his constituency.

I have looked at the tax information impact note again, in search of further details of that 22-year-old’s story, but I can find nothing that explains how such people will benefit. The only reference to benefits for investors was this rather disappointing revelation:

“This measure could improve returns on investments (including pensions) but would otherwise have no impacts on individuals or households.”

I do not yet see how the measure can benefit the people we are trying to represent.

I am sure that we would all like to hear the next chapter in the 22-year-old’s life story, and if the Minister has any more information to illustrate the fact that he is just the kind of person who stands to benefit from this measure, I am genuinely willing to hear it. However, in the absence of any such information, I shall return to the subject of amendment 67.

Our amendment invites the Government to lay out clearly and transparently exactly who will benefit from this policy and by how much. In Committee my hon. Friends expressed on a number of occasions the view that this is just another tax break for the Government’s friends in the City. While it does look like that, we are open to giving the Government the chance to prove otherwise. That is why our amendment asks the Treasury to publish the costs to the Exchequer in order to ensure that a list of beneficiaries and a distributional analysis for the abolition of stamp duty reserve tax are put into the public domain. That way we will be able to see all the facts as to who the Government are really concerned about.

Of course, if the Government do not agree to our amendment, we will be forced to conclude that this is just another tax cut for the wealthy, just as we suspected all along. We would also have to conclude, in the absence of any information to the contrary, that any claims of jobs created in regional economies are about as robust as the Prime Minister’s stance on Europe has been, and we would have to look a lot harder to try and find something in this which would create jobs, as seems to have been suggested on previous occasions, because I cannot for the life of me see how that stacks up. If we really want to tackle some of the regional imbalances, let us look at some of the announcements that have been made today, in terms of the reports put forward by the Opposition, about how we can create more wealth and look to ensure that power and resources are devolved to some of our cities and we tackle the issues around infrastructure in the regions.

In the light of the response when we tabled this amendment in Committee, I have to say that I am not at all confident that the Government are going to agree to provide us with the transparency we so urgently need. Again, if we look back to what was said in Committee, we find that the Government were not particularly transparent in terms of the information we were given, because, along with the story of the 22-year-old, speakers on the Government side were keen to stress that, because it is fund investors as opposed to fund managers who will benefit from the removal of SDRT, it would greatly boost investment. Again we have to question whether any increased investment would directly benefit those investment fund managers. Hon. Members were also very helpful in trying to enumerate how many people are currently employed by the industry, but try as they might, they failed, as did the tax information and impact note, to detail that important point about how many jobs would be created by the abolition of SDRT.

We also heard that the tax as it currently operates is

“an uncompetitive charge that puts UK-domiciled funds at a disadvantage to funds domiciled elsewhere”.––[Official Report, Finance Public Bill Committee, 10 June 2014; c. 412.]

That does not square with the idea that the UK investment management industry is doing so well that it is the second largest in the world, beaten only by the US.

I want to draw to a conclusion soon because I put quite a number of questions to the Minister in Committee and it would be useful for us to give him some time to respond to them, as he was not necessarily able to do so in Committee. It is important that we give him the chance again today, therefore. Unsurprisingly perhaps, the Minister is continuing to steadfastly—albeit politely—refuse to countenance our amendment for two reasons. First, he seems to be suggesting that the information requested has already been covered by the tax information and impact note, which, as I hope I have outlined, it does not seem to me to do in any clear and transparent way. The other argument that came up in Committee is that it would be difficult and it would perhaps take longer than six months to do. I am sure—and I am sure the Minister will understand this—that should he wish it to be so, he would be able to utilise all the capacity of the Government to overcome any difficulties, and indeed to ensure more information and a report were brought forward, and I am sure he would also be able to use his good offices to have his Government provide us with considerably more information than is currently contained in the tax information and impact note. It would also be helpful if the Minister could give us more information in his winding-up speech as to why he thinks it would not be possible to do this within a six-month deadline, as we have asked in our amendment.

In conclusion, this is all about priorities. The Government’s measures will reduce Exchequer revenues by more than £800 million over the course of the next five years if this particular measure goes ahead. That funding could be used in a variety of ways, and the Government have to be held responsible for the choices they make. Our amendment simply asks them to undertake that assessment and put the information in the public domain, so that we can see who benefits from this initiative and how it would benefit the wider public. The Government have not made that case; they have not shown how the measure would have an impact on our constituents—for the most part they seem to suggest it would not have any impact on them—and they have not answered the questions put previously about job creation and the impact on the regional economies.

Let me therefore remind the Minister of some of the questions we posed in Committee—I am sure other Members will wish to contribute, but he will also want to answer these in his summing up. The Investment Management Association is saying that the industry is doing very well, so why are the Government handing this tax break to the industry? What evidence can the Minister provide to us, even at this late stage, to suggest that the measure will have a positive impact on the UK economy and, in particular, the jobs market? Unless my memory fails me, he has not so far been able to give me a concrete number on the jobs he expects to be created or any more information about the regional benefits that have been referred to. Can he do that now? It would be helpful if he could do that and if he could set out all that information today. In those circumstances, perhaps I would consider whether our amendment was necessary. I suspect that he will not be able to give that information and will not be able to provide the clarity and transparency we seek, so I strongly suspect that when the time comes, I will seek to press my amendment to a vote.

[Mr Gauke]

It is a pleasure to respond to this short debate. The hon. Lady has an admirable ability to make unreasonable requests in a very reasonable way, and it falls to me once again to decline her offer, as Treasury Ministers have done in the past when a review or report is sought from them during a Finance Bill debate.

Let me quickly try to address some of the points raised, the first of which relates to the impact on the industry, the competitiveness argument and what we can do to assess that. It is worth pointing out that this measure came into effect only on 30 March, and it will take longer than six months for evidence of how the benefits of the change are accruing to investors to become available. So the report requested in amendment 67 will not adequately be able to do justice to that question.

Another area we have debated on a number of occasions is who benefits from this measure, and I will return to our little engagement on hedge funds. It is worth pointing out that the National Association of Pension Funds, the Association of British Insurers and the Investment Management Association stated their disagreement with the Labour party’s position and its policy proposal last year to reintroduce the schedule 19 charge. They say it would

“impose a £145 million annual cost on the ordinary savers, investors and pensioners, who are the beneficiaries of its abolition.”

That would weaken the UK’s competitiveness as a place for funds to be domiciled. If we are competitive in this sector, we will have more growth and more jobs. Let us be clear that this is not about jobs in the City of London—not that there is anything wrong with jobs in the City of London. The fund management industry directly employs 30,000 people throughout the United Kingdom, and about a half of those jobs are linked to fund domiciles. The jobs are located in many, if not all, the regions and nations of the United Kingdom.

--- Later in debate ---

[Cathy Jamieson]

rose—

[Mr Gauke]

I hope that the hon. Lady will share that view.

[Cathy Jamieson]

Of course I recognise the value and the range of those jobs. Will the Minister tell us exactly what assessment the Government have done on the risk of reintroducing the measure, or indeed on the risk associated with producing a report? Surely he will want to investigate fully the number of jobs that he seems to think might be lost if our measure went ahead.

[Mr Gauke]

The hon. Lady puts her finger on an important word, which is “risk”. Yes, a number of jobs are involved. Some 30,000 people are employed in this industry in the UK. About 10,000 jobs are located in regions and nations such as Scotland, the north-west of England and the west midlands. If we have an uncompetitive tax system in the UK, that sector will suffer. There will be a threat to those jobs. We want to see an expanding and thriving sector, but there is a lot of competition from other jurisdictions in which funds can be domiciled. If we do not compete in the sector, we run the risk of losing those jobs.

There is not only the issue of the industry itself and the jobs that can be encouraged and protected in this country if we have a competitive tax regime, but the underlying point that it is the investors who indirectly bear the burden of this tax. That means that contributors to pension schemes—people in auto-enrolment schemes—will receive less in their pension if this tax remains in place. That is something that we should all seek to address. If we want policies that will be good for jobs and good for savers, then abolishing schedule 19 is a good policy. But what do we get from Labour? We get it embarking on a process to reinstate the policy because it misunderstands it. It thought that it was something to do with hedge funds. After it was explained to Labour Members—I have to say that it has been explained to them time and again—they refused to abandon it. I do not know whether it is still their policy to reverse this, or whether they are calling for a report. As I understand it, it is still the policy of the Opposition to reintroduce this tax.

[Cathy Jamieson]

indicated assent.

[Mr Gauke]

The hon. Lady is nodding her head. I will take that as an acceptance, even though, as we have heard, this is a policy that her colleagues and those higher up in her party appear to misunderstand.

Finance (No. 2) Bill

Debate between David Gauke and Cathy Jamieson

Wednesday 9th April 2014 Commons Chamber

[Mr Gauke]

I just make the point that one has to examine the net yield from the bankers’ payroll tax, taking into account the revenue that is lost because there are lower receipts for income tax and national insurance contributions. Just to be clear, the number is £2.3 billion.

[Cathy Jamieson]

Yes, I hear what the Minister is saying and I shall deal with some of that in a moment, because I am concerned to ensure that we get all the sums right and reach figures that everyone would agree on. Again, that is one reason we want this report brought forward, because we are now being told that the levy will generate £2.3 billion in 2013-14, £2.7 billion in 2014-15 and £2.9 billion in each of the following three years. I would give way to him again if he were able to give the details, but perhaps it would be more appropriate if he did so his response later, as it may take time to get them. We do not have the detailed figures, the evidence or the workings to show how those figures are arrived at and whether things are on course to deliver them. That is why it is important to get the report we are calling for today.

Let me say something about the problems with the levy as we see them. As I have said and as my hon. Friend the Member for Nottingham East has in previous contributions, the Government’s levy lacks ambition. The argument is that the initial levy was set at a relatively low rate, both by international standards and when measured against the scale of the taxpayer subsidies received by the sector during the financial crisis and thereafter. In discussion of the Finance Bill in May 2011, he said:

“The bank levy is a sensible idea in theory, and we broadly support it. However, the yield suggested in the Bill—only £2.6 billion—is not just small but pathetic by international standards”.—[Official Report, 3 May 2011; Vol. 527, c. 482.]

I will happily give way to the Minister if he wants to comment on the international standards, but again, perhaps he will do so when he winds up.

One other problem with the levy is that its two objectives can be seen as a bit of a paradox or even somewhat contradictory. By setting the levy as a tax on bank liabilities in excess of £20 billion and charging a lower rate for more secure long-term liabilities, the Chancellor was actively encouraging the banks to reduce their exposure by moving towards more stable forms of funding.

--- Later in debate ---

[Mr Gauke]

It is a great pleasure to serve under your chairmanship, Mr Bone, and to respond to this debate. It is always a pleasure to hear the hon. Member for Wirral South (Alison McGovern) speak. I am tempted to respond to her characterisation of the labour market, which almost suggested that we had lost 1.3 million people from employment over the past four years, rather than increased employment by 1.3 million people, but in the interests of time, I will focus on the bank levy.

Clause 112 increases the rate of the bank levy that was set for 1 January 2014 to 0.156%, which will help to ensure that future bank levy receipts meet the Government targets. I also want to highlight the changes that we are making to the bank levy’s design following an operational review in 2013, which we will cover when we debate clause 113 and schedule 22 later in Committee. The changes will help to simplify the bank levy’s design and ensure that it continues to complement improvements in the regulatory regime.

I wish briefly to provide hon. Members with some background. In the June 2010 Budget, the Government introduced a permanent tax on banks’ balance sheet equity and liabilities, which took effect from 1 January 2011. It is designed to ensure that the banking sector makes a fair contribution that reflects its risks to the UK financial system and the wider economy. Alongside wider regulatory reform, the bank levy also provides incentives for banks to move towards more stable funding profiles, reducing the likelihood of liquidity shocks, which can trigger and propagate systemic banking crises. The Government believe that those overarching policy objectives remain appropriate, and the changes being made in clauses 112 and 113 and schedule 22 are in line with that.

In 2010, the Government set a target of £2.5 billion for annual bank levy receipts. We have since increased that target to offset the benefit of corporation tax cuts to the banking sector since the levy’s introduction. Bank levy receipts have fallen short of the targets to date, largely as a consequence of greater than anticipated deleveraging in the sector in response to regulation and the bank levy’s behavioural incentives. However, the Government have remained clear that the target for bank levy receipts is unchanged.

The banking sector needs to make a fair contribution that appropriately reflects its historical costs and future risks to the UK taxpayer. That is why the rate of the bank levy has increased from 0.075% in 2011 to 0.142% in January 2014, and why the changes being made in clause 112, which were announced in the 2013 autumn statement, will further increase the rate to 0.156%, which will be treated as having applied from January 2014. Based on those changes, the independent Office for Budget Responsibility forecasts that the bank levy will raise £2.9 billion a year from 2015-16, more than £8 billion in total over the Parliament and close to £20 billion in total by 2018-19.

When the bank levy was introduced, the Government announced that they would review its design in 2013 to ensure that it was operating efficiently. In line with that commitment, a formal consultation was published in July 2013. It considered changes to the levy’s detailed design to make it simpler, fairer and more aligned with recent regulatory developments. The consultation ran for 12 weeks and the views put forward helped to inform a number of changes to the bank levy’s design, which the Government announced in the autumn statement. They included the exclusion from the bank levy charge of protected deposits, which we limited to amounts insured under a deposit protection scheme, with effect from January 2015.

Also from January 2015, all derivative contracts will be treated as having a short-term maturity, the relief that banks receive for their high-quality liquid assets will be restricted to the rate applicable to long-term liabilities, and the bank levy definition of tier 1 capital will be aligned with the new capital requirements directive. Specific liabilities arising from the central clearing of derivatives will be excluded from the bank levy charge, which will be treated as having applied from January 2014. Those changes will simplify the levy’s application and help to ensure that it continues to apply consistently to banks of different size, activity and domicile. They will also strengthen the behavioural incentives for banks to move towards more stable funding profiles and more closely align the bank levy with recent developments in the regulatory regime.

The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) touched upon the redesign of the bank levy. There is no intention to reduce the revenue raised by the bank levy. We are considering allocating banks to different bands on the basis of their balance sheet, equity and liabilities. Each band would correspond with a unique and predetermined charge for the year, paid by every bank falling within that band. We consider that that might provide a more predictable and sustainable model for the bank levy, but we are welcoming views on that as part of our consultation. The changes being considered would have no impact on the forecast yield from the bank levy, and the underlying tax base would remain unchanged and continue to provide incentives for banks to move towards more stable funding.

[Cathy Jamieson]

rose—

[Mr Gauke]

I will give way, but I have very little time left.

[Cathy Jamieson]

I thank the Minister for giving way—I appreciate it given the limit on his time. Will he confirm that his proposal will mean that some of the bigger banks will pay less in bank levy than they have paid previously?

[Mr Gauke]

The Government are consulting on how the measure will operate. The intention is for it to be revenue neutral. Assuming it has some effect, revenue neutral will mean that some banks will pay more and some will pay less. Which ones those will be depends on the precise design, which depends on the consultation.

Amendment 1 was described with customary reasonableness by the hon. Member for Kilmarnock and Loudoun but I will give the customary response, which is that the Government do not consider that there is much to be achieved by accepting it. It would add little to the Bill. HMRC already publishes each year statistics on PAYE, the bank levy, corporation tax and bank payroll tax receipts from the banking sector, although they are not broken down by different groups of banks. The most recent publication—from August 2013—showed that the relevant tax receipts from the banking sector were £21.7 billion in 2012-13.

In the time available, I want to make a point about the bankers payroll tax. In September 2010, the right hon. Member for Edinburgh South West (Mr Darling), the former Chancellor of the Exchequer, said

“it will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and…will find all sorts of imaginative ways of avoiding it in the future”.

An attempt to repeat that tax would be a mistake.

I fear that, because of the time available, I do not have time to do justice to Opposition new clause 5. I have set out the reasons why the Government believe it is right to introduce a balance sheet tax as opposed to a tax on bankers bonuses. We see no reason to change that approach. The future jobs fund failed to create sustainable employment. Almost 50% of participants claimed benefits again within eight months of starting a future jobs fund job. This Government are doing much more. We have delivered more than 1.6 million apprenticeship starts so far this Parliament and are making it cheaper to employ young people.

In order to give the hon. Member for Kilmarnock and Loudoun a moment or so to speak at the end, I shall conclude. The changes made by clauses 112 and 113, and schedule 22, will help to ensure that future bank levy receipts meet Government targets while providing a simpler and fairer basis on which the tax applies. I therefore hope that clause 112 stands part of the Bill and urge the hon. Lady not to press amendment 1 and new clause 5 to a Division.

[Cathy Jamieson]

It was a pleasure to hear the valuable contributions of my hon. Friends the Members for Wirral South (Alison McGovern) and for Oldham East and Saddleworth (Debbie Abrahams) on the impact of the Government’s policies on ordinary people.

The Minister referred to my characteristic reasonableness and gave a characteristic response. I will give him the characteristic response from the Opposition—despite his best efforts, I will press the new clause and the amendment to a Division. Both reports are reasonable requests and would be important. I realise that he had a relatively short period in which to respond, but it is disappointing that he does not see fit to produce such reports. He referred to a number of statistics and figures produced by HMRC, and we know of other places where statistics are produced, such as the Office for Budget Responsibility. It would be useful to have all those reports put together in a report for the House to consider.

As I have said, I intend to press new clause 5 and amendment 1 to a Division. I hope that, even at this late stage, the Minister will reconsider his opinion, but I doubt it. I am sure that the Government will give their characteristic response once again.

Question put, That the clause be read a Second time.

Finance Bill

Debate between David Gauke and Cathy Jamieson

Tuesday 2nd July 2013 Commons Chamber

[Mr Gauke]

It is a pleasure to return this debate to the amendments to clause 38 and schedule 18 to the Finance Bill before us. Before I discuss Opposition amendment 57, I shall say a few words about amendments 30 to 34, which are designed to ensure that clause 38 and schedule 18 work as intended. The clause and the schedule make improvements to the REITs regime. This year’s Finance Bill improves the REITs regime by allowing a UK REIT to treat income from another UK REIT as income of its tax-exempt property rental business. Therefore these amendments do not affect the policy, but rather ensure that it works as intended. The change would generate positive benefits for the REIT industry, and also meets the Government’s wider objectives.

Let me provide some background. During the technical consultation in February, stakeholders told us that the changes as drafted might not work quite as intended. HMRC has consulted further with interested parties, and we agree that minor changes are necessary to achieve the desired policy aims. The problem, as presented by interested parties, concerned the balance of business test, which requires that at least 75% of the REIT’s profits must come from a property business. Interested parties were concerned that in certain circumstances, a REIT that invests in another REIT might fail that test even though the lower-tier REIT derives all of its income from a property business. Consideration of the issue has revealed that minor amendments are required both to the new and the pre-existing legislation. These amendments together will ensure that the Bill’s changes correctly implement the intended policy, which is that profits of a property rental business comprising the new type of tax-exempt income do not include amounts attributable to capital allowances and other tax adjustments.

Turning to Opposition amendment 57, we have had a very broad debate this afternoon. Indeed, it has felt more like an Opposition day debate on housing than a debate on the clause and the schedule. The amendment proposes that the schedule shall come into force after the Chancellor has conducted a review of the interaction of REITs with the housing market, and I hope to address the issue of REITS and the housing market in my remarks.

[Cathy Jamieson]

I hoped the Minister would understand that the nature of the debate reflected Opposition Members’ genuine concerns about the Government’s record on housing. But specifically on REITs, when he responds to the arguments in favour of the review, will he be able to say something more about the future of REITs and social housing?

[Mr Gauke]

The hon. Lady can rest assured that I will address that very point, if not necessarily every point made in the wide-ranging debate.

The proposal set out in amendment 57 is that

“The Review shall consider…tax measures in place to support house building; and…what steps HM Government have taken to support house building”

but the Government’s view is that there is no need to postpone the changes to the REIT regime, as the proposed review would add little value at this time. There is something of a routine here of the hon. Lady requesting a review and me turning it down, and she asks so nicely that I feel almost pained in doing so, but the reason we believe in this case that a review would add very little is that there are not yet any REITs with substantial housing assets on the market, so it is too early to assess any interaction of REITs with the housing market. We do not accept the amendment and I urge her not to press it to a vote.

The new changes to the REIT regime are an example of tax measures to support house building. As REITs represent the supply side of the property market, any improvements to the REIT regime are expected to have a positive impact on the market.

The hon. Lady made a couple of points on how the REIT regime works: the first, which I believe we touched on in Committee, was whether the regime could support people who want to own their own home. It is worth pointing out that residential REITs can provide accommodation only in the private rented sector, so they are not designed, nor could they be used, for the purpose of home ownership.

The second point, on which the hon. Lady intervened, was on the relationship with social housing and what role REITS could play in that sector. There was full consultation in summer 2012 involving a number of one-to-one and group meetings with interested parties in the social housing sector. The reality is that yields on, for example, affordable rents do not appear to be high enough to attract investors into that sector, but I assure her that discussions are ongoing with non-social housing entities and other interested parties to explore the possibility of residential REITs. If a workable residential model can be found, it might be possible to use it to further a move into social housing, and we certainly would not rule that out. At the moment there appears to be no interest in using REITs for those purposes, but we are entirely pragmatic about that.

We believe that REITs have a valuable role to play and we do not want to delay the implementation of the schedule while we conduct a review from which there is little to be gained. For those reasons, I urge the hon. Lady to withdraw the amendment.

We discussed wider housing policy, but I do not intend to be drawn into a lengthy, general debate on housing. I just point out that we announced £5.4 billion of additional support for housing in the last Budget, building on the £11 billion this Government have already committed to investment in housing over the spending review period. Last week’s spending round announcement confirmed a total of £5.1 billion-worth of investment to support housing in England from 2015-16 to 2017-18; £3.3 billion of that new funding is for affordable housing over those years and will support the delivery of 165,000 new affordable homes in England over the next three years. I can also point out some of the recent housing numbers. Housing building starts in England rose by 4% in Q1 2013, seasonally adjusted. Housing starts are 15% higher than in the same quarter last year. Starts are now 62% above the 2009 trough.

[Mr Gauke]

No, I want to give the hon. Lady a moment or two at the end of the debate to respond to the points that I make.

The amendments before us, alongside the changes that already form part of the Bill, show the Government’s continued support for REITs and the UK property sector. I believe the Government amendments will be welcomed by interested parties. The delay that would result from Opposition amendment 57 would be unfortunate and I urge the hon. Lady to withdraw it.

[Cathy Jamieson]

I find myself in the same slightly pained position that the Minister described. He said no so nicely, as he normally does, that I hesitate to come back with extremely critical comments. I am disappointed once again that he has not heeded our arguments, especially the argument for a review and a look at how the wider tax regime deals with housing issues.

Finance Bill

Debate between David Gauke and Cathy Jamieson

Monday 1st July 2013 Commons Chamber

[Mr Gauke]

My hon. Friend takes a sceptical view of the Opposition, and events may well turn out to justify it. I want to take a more charitable view, however—although perhaps it is, in fact, a different form of scepticism or cynicism. My view is that they are not really serious about the 50p rate at all; much though they talk about it, they will not, in truth, pursue this policy because they know it is so damaging and that it does not do anything to raise revenue. That is why, despite repeated questions earlier, the hon. Member for Kilmarnock and Loudoun, who does like to be straightforward with the House, refused to say whether Labour would support a 50p rate after the next general election. She makes the argument that Labour will have to delay and wait to see what the state of the economy is, but given that we know this does not raise any substantial amount of revenue, it cannot be dependent on the state of the public finances; instead, it is a matter of political calculation. I hope my hon. Friend is wrong and that the Opposition are trying to edge away from a position that they saw as populist but which, in truth, is economically incoherent.

[Cathy Jamieson]

I am intrigued by the amount of advice being given to the Labour party by those on the Government Benches. Given that the Minister said he wanted to be in charitable mode, to return to the new clause, will he not concede that there is an argument for looking at the matter more thoroughly and having this review in order, as the Treasury Committee concluded in its report on the 2012 Budget, to discover what the actual impact of reducing the rate would be?

[Mr Gauke]

I am not persuaded by that argument. I hoped the hon. Lady would take that opportunity to provide some clarity on the Labour party’s position, but she did not do so. We do not need another review. We have evaluated the impact of the 50p rate. It was an economic failure. It failed to raise revenue. It in effect put up a “closed for business” sign over the UK economy. It was about politics, not economics.

I urge the Opposition to withdraw the new clause, and I hope they will also return to their approach of a few years ago. As my hon. Friend the Member for Gainsborough pointed out, when Tony Blair was in charge he was making pledges not to increase the top rate of income tax. That at least demonstrated a sense of where the UK needed to be and its place in the world, but that has, I am afraid, been long forgotten by the Labour party which just drifts ever leftwards.

[Cathy Jamieson]

Following the Minister’s example, I will be brief. We have had a useful debate containing some impassioned speeches, not least those from my hon. Friend the Member for Islwyn (Chris Evans) and from the hon. Member for Gainsborough (Sir Edward Leigh), who, interestingly, sought to give advice to the Labour party. My hon. Friend gave an interesting critique of Laffer curve economics but related it, importantly, to what happens in the real world. He spoke with a great deal of passion and experience from his time working in the financial services sector. He was absolutely right to say that not everyone working in the banks was wrong, and many people working on the front line are trying to change things and to clear up the problems. These people did not adopt the principles that got the banks into such difficulty.

Earlier, I read out a couple of quotes from various hon. Members about cutting the top rate, but, to keep a balance across the coalition, let me cite one that I missed from the president of the Lib Dems. The hon. Member for Westmorland and Lonsdale (Tim Farron) has said:

“Cutting the top rate was a stupid thing to do. It probably raised up to £3bn a year. We should pledge to restore the 50p rate at the next election. It’s not enough to be fair, you have to be seen to be fair.”

That has been one of the threads running through this afternoon’s debate. [Interruption.]

Again, I hear Government Members muttering from a sedentary position about what the Labour party is going to do. I outlined this earlier, but I will state it again: we will, of course, set out our manifesto in due course, in time for the general election—that is absolutely the correct thing to do—but we will not make false promises. We will not make promises that we will not be able to keep. Let me remind the House of that quote from the Prime Minister:

“I have been very clear—we have all been very clear—that we have to do this in a way that is fair so that the broadest backs bear the biggest burden.

That is why we haven’t changed… the 50p tax rate.”

As I outlined, that particular pledge was not kept and those with the broadest backs do not appear to be carrying the biggest burden.

The Minister said that he wanted to be charitable and to understand why we tabled the new clause, and I know from Finance Bill Committees that he does at least reflect on things. He rarely gives in to temptation to resist the advice he is given to reject all amendments and new clauses, but he does at least give the appearance of reflecting. In this case, I cannot understand why he will not accept a mild-mannered proposal that simply seeks to have a review of the impact of this measure and to bring forward further information for the interest of hon. Members across the House. That is a reasonable and sensible thing to do, and I know that the Minister, certainly in opposition, has regularly argued for this type of review. We have heard nothing from him today to explain why, suddenly—[Interruption.] Given the side conversation that is going on, I am sure that the Minister never got any of those reviews into the legislation at that time, but I say to him that there is a first time for everything. He could, even at this late stage, decide it was the correct thing to do to allow the review to go ahead and ensure that the House had further information.

I do not want to repeat all the points made earlier, as that would not be helpful at this stage. However, I simply remind the House that it is not only Opposition Members who are claiming or suggesting that there are concerns about this measure. To go back to the IFS, it stated:

“By giving out £3 billion to well-off people who pay 50p tax…the Government is banking on a very, very uncertain amount of people changing their behaviour”.

Much of the Government’s argument has been predicated on the notion that people will change their behaviour, but I have heard nothing from the Government that suggests to me that behaviour would be changed in such a way that there would suddenly be a huge influx of resource into the Treasury. The IFS went on to say:

“There is a lot of uncertainty, a lot of risk on this estimate.”

Finance (No. 2) Bill

Debate between David Gauke and Cathy Jamieson

Thursday 18th April 2013 Commons Chamber

[Mr Gauke]

I would give way to the hon. Gentleman, but he was not here for the early part of the debate. He may not have read the new clause, but the policy depends on the definition of “strong growth” and the Labour party has not provided a definition.

Secondly, the cost of this measure will be £12 billion to £13 billion a year. How will that be paid for—an issue raised by my hon. Friend the Member for Peterborough (Mr Jackson)? Will it be through higher taxes, a reduction in spending or—as we believe—an increase in borrowing? What consideration has been given to the impact on the cost of borrowing? A 1% increase in Government bond yields would add around £8 billion to annual debt interest payments by 2017-18 and result in an increase of £12 billion in households’ mortgage interest payments—the equivalent of £1,000 for a household with an average mortgage in its first year. Has the Labour party considered the consequences of that discretionary fiscal stimulus?

What is Labour’s view on the profile of deficit reduction? We believe that over the whole deficit reduction period, 80% should be achieved through spending cuts and 20% through tax increases. The Darling plan had two thirds on spending cuts and one third on tax increases. What is the view of the Labour party, given that it has put in front of the Committee a proposal for a £12 billion or £13 billion tax cut? Does it suggest that the ratio should lean more towards public spending cuts rather than tax rises? What assessment has Labour made of the impact of different taxes on the economy? My right hon. Friend the Member for Wokingham mentioned the fact that VAT is, as many economists would argue, less harmful to growth than other taxes. Is that the view of the Labour party? Why has VAT been picked as a particular issue?

The Labour party does not come forward with policies often, but I am pleased that it has done so today so that Labour Members have the opportunity to tell the Committee exactly what their policy is. They can explain that policy, and if they would care to answer those questions the Committee will be able to judge whether it should support new clause 2. My advice to my right hon. and hon. Friends is that this is just more of the same from the Labour party. It is more borrowing and more debt, and it fails to get to grips with the fiscal situation and the mess in which the Labour party left this country and which we, the coalition Government, are addressing.

[Cathy Jamieson]

It is an interesting experience to see Ministers ask a whole range of questions without addressing why we introduced the proposal. The Minister failed to recognise work that shows how VAT hits those on lower incomes disproportionately hard. He shakes his head but we can point to research which backs that up and businesses that say—I have spoken to people personally as I am sure have other hon. Members—that a temporary cut in VAT would help to stimulate the economy and growth. The Minister asks what the definition of strong growth would be. It certainly is not what this Government have provided.

[Mr Gauke]

The Opposition propose a new clause that depends on the definition of “strong growth” but do not tell us what that means. They object to questions being asked about what the new clause means. It is the hon. Lady’s new clause, so will she tell the Committee what she is getting at, why she has chosen VAT, what the fiscal implications will be, and what will happen if borrowing goes up by £12 billion or £13 billion?

--- Later in debate ---

[Mr Gauke]

As the Financial Secretary to the Treasury points out, people should be angry about the state of the public finances left to us by the Labour party. I described Labour as the “repository for people’s anger” and as a “simply fellow-traveller in sympathy”, not leaders, because those were the words of the last successful leader of the Labour party, Tony Blair. I am afraid that Labour is too often in its comfort zone. We know that there are pressures on living standards, but ignoring the deficit is no way to deal with them. The Government are prepared to take those difficult decisions, while Labour is failing to address them.

[Cathy Jamieson]

I am disappointed to hear the Minister resort once again to the same tired old mantra.

We have listened this afternoon to some passionate speeches from Opposition Members talking about the very real experiences of their constituents, and it is disappointing that once again the Government choose not to recognise them. They do not seem to recognise their responsibility for the deficit and debt now—for the fact that they have to borrow more, for the lack of growth, for the fact that people are not getting back into work in the way we would want and for the problems with living standards.

Sadly, we saw some crocodile tears from the Minister, who on the one hand wants to say, “Yes, we understand the impact on people”, but on the other is not prepared to do anything about it. Opposition Members are rightly angry on behalf of their constituents. They are angry about the bedroom tax and about the fact that the Government have chosen today not to do something on VAT that would have made a difference to people in our communities who will also be angry that the Government will not even accept a mild-mannered request, as I described it earlier, for a report on the impact of the Government’s policies on basic rate taxpayers. For that reason, I intend to press the amendment to a vote.

Question put, That the amendment be made.

Finance Bill

Debate between David Gauke and Cathy Jamieson

Tuesday 3rd July 2012 Commons Chamber

[Mr Gauke]

I confirm that I remember the adverts and that milk will not be standard rated for these purposes. I refer my hon. Friend to the remarks the Chancellor made in respect, I think, of the 2010 Budget—that everyday essentials will not become standard rated. However great the advance of Accrington Stanley and the decline of Liverpool, that will remain the case.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Will the Minister provide a bit more clarity, as I believe the industry has been extremely concerned about the definition of a sports drink as opposed to sports nutrition products? I understand that some drinks would not be caught within the definition, but that some products legitimately used by athletes—by weight-lifting participants, for example—would be. Given the concern about it, further clarification from the Minister would help.

Finance Bill

Debate between David Gauke and Cathy Jamieson

Monday 2nd July 2012 Commons Chamber

[Mr Gauke]

My hon. Friend and other hon. Members have made the case for a cap on the number of children receiving child benefit. I hear his point about an alternative policy, but we must ensure that the child benefit regime provides support for those who need it most. The policy for which we are legislating maintains that principle—those on the lowest income will retain support.

The Government strongly discourage anyone from not registering for child benefit on the birth of their child, even if they decide to opt out of receiving payments. The child benefit system does not process only child benefit, and failing to register can affect state pension entitlement and make it less straightforward for the child to receive a national insurance number when they turn 16. It is therefore important that children remain registered.

Amendments 21 and 22 would allow those on the taper who have opted out of child benefit retrospectively to receive the payment. I am pleased to confirm that HMRC will apply the legislation as it is to enable such a claim to be made. I can therefore reassure the hon. Member for Kilmarnock and Loudoun that the amendments are not necessary. As I have said, the legislation provides a claimant whose income, or whose partner’s income, is more than £50,000 with the opportunity to elect not to be paid child benefit, so they are not liable for the high income child benefit tax charge. A claimant who has elected not to be paid child benefit can subsequently revoke that election and ask HMRC to reinstate payment of child benefit.

The payment of child benefit would then normally be made from the first pay day after the revocation has been received by HMRC, and not from the date when child benefit was first stopped. That is because it would make no sense to pay arrears of child benefit to those whose income, or whose partner’s income, is more than £60,000. However, the legislation provides for retrospective revocation when a claimant discovers that, contrary to their original expectations, they do not have an income of £50,000 or above. That retrospection will be limited to two years after the end of the tax year to which the original election applies. That means that child benefit can be paid for up to that two-year period.

When a child benefit claimant or their partner has income of between £50,000 and £60,000, the decision whether to elect to receive child benefit is not so clear cut, because the amount of the tax charge is dependent on their income. HMRC recognises that a couple might be nervous about making an election if a later decision to revoke the election would apply only to future payments, leaving them worse off. The legislation provides HMRC with the power to issue directions as to how the election process will be administered. I hope I have cleared up that point.

Let me try to deal with the few remaining points. Draft guidance is being prepared over the summer, during which time HMRC will consult external representatives, including the Social Security Advisory Committee and the HMRC benefits and credits consultation group. The directions will confirm that an election that has been made by a claimant whose income or whose partner’s income is between £50,000 and £60,000 can be revoked retrospectively, to the point at which the child benefit ceased.

I have dealt with this point on the state pension, but it is possible to be registered even if people are not receiving cash. I have also dealt with the point on the definition of partners used in the Bill. As for the argument that the measure is complicated, we have looked at alternatives, but we think the measure is the best available to us. On the principle of individual taxation, HMRC is committed to protecting confidentiality. For taxpayers who are unable to discuss their incomes with each other, HMRC will develop a process with appropriate security checks so that they can answer yes or no to simple questions about the income of their partner.

As I have said, the Government have had to make difficult decisions. The measure means we can continue to provide child benefit, and so, in a sustainable manner, protect those who need it the most. We accept that this is not an ideal situation, but the budget deficit left by the previous Administration is the challenge we must overcome if we are to avoid a far worse predicament. I urge the Opposition to withdraw their amendment.

[Cathy Jamieson]

In the very short time available, I want to say that we will press amendment 24 to a Division, although I accept what the Exchequer Secretary said about amendments 21 and 22 not being necessary. The only other point I would make is that it seems odd for him to say that he did not want a more complicated means-test system and then to introduce an extremely complex taxation system. It does not make any sense, and does not pass the test of competence or the test of fairness.

Question put, That the amendment be made.

Child Benefit

Debate between David Gauke and Cathy Jamieson

Tuesday 22nd May 2012 Westminster Hall

[Mr Gauke]

As my hon. Friend knows, the Office for National Statistics will make an assessment of whether the measure constitutes a tax increase or a spending cut. However, child benefit is spent on households with people who earn more than £60,000.

[Cathy Jamieson]

Will the Minister give way?

[Mr Gauke]

I will, but I am conscious that we have got into the political knockabout before I have tried to address some of the concerns that were raised, which I hope to do.

[Cathy Jamieson]

It is just a brief point. The Minister correctly referred to the ONS. When will that assessment be made, and when will we be told what it decides?

[Mr Gauke]

If memory serves, the ONS will make that assessment after the policy has come into effect, in January 2013.

As I said, we face a large deficit and seek to reduce it in a way that is both fair and reasonable. It is only right and proper to ask those with the broadest shoulders to bear the greatest burden; because of this measure and others announced by my right hon. Friend the Chancellor in the Budget, that will be the case. Considering the universality of child benefit was never our first choice, but that is the position in which we have been left.

I recognise that many are concerned about the change. Some argue that child benefit must be sacrosanct. However, it is not fair that an individual who earns £15,000, £20,000 or £30,000 should be paying for benefits for those earning £80,000, £90,000 or £100,000. When Government need to raise revenue, it makes sense for them to turn to a measure with a broad base because significant numbers of recipients will not be reliant on the additional payment they receive. Child benefit is just that sort of payment.

The steps that we are taking will raise £1.8 billion for the Exchequer by 2014-15. That is why my right hon. Friend the Chancellor announced in 2010 that we would seek to withdraw child benefit from higher-rate taxpayers. We have always said that we would consider the ways in which to implement the measure, but we made it clear that a new complicated means test is not a sensible way forward. Instead, we should look to the existing systems and processes to ensure that we can achieve our goal.

Let me turn to the changes that we are introducing.

--- Later in debate ---

[Mr Gauke]

The alternative method, which would have been to do this on household income, would mean applying the tax credit system to all 8 million child benefit recipients. That would widely expand the tax credit system and impose a burden on a far greater number of people.

We propose to withdraw the financial gain from child benefit from those families where one partner has income of more than £60,000, and reduce the gains where one partner has income of more than £50,000. By applying a tax charge on those on high incomes using existing processes, we are doing it in the most efficient and pragmatic way. The charge will apply to an individual in receipt of child benefit, or their partner, where they are married or in a civil partnership, or living as if they are married or in a civil partnership. I hope that that answers the point about what a household is. It uses the current definitions of partners within social security legislation, and means that other adults living within the household do not affect the liability.

It will remain the case that two earners just below the threshold will not have their child benefit withdrawn. To introduce a new means test for family income would be complicated, costly and confusing—the very things that we wish to avoid. We would need to assess all of the 8 million households receiving child benefit, and we would need to do so each year.

Let me turn to the mechanics behind the changes that we are introducing. First, the changes will not affect those receiving child benefit who have income under £50,000, or whose partner does. That will mean that 85% of families receiving child benefit need not be troubled by the changes—85% means more than 7 million families. Where an individual or their partner has income of more than £50,000, the charge will be tapered depending on their income. The equivalent of 1% of the child benefit award will be charged for every £100 increase over £50,000 in adjusted net income. That means that child benefit is fully withdrawn at an income of £60,000. Furthermore, the thresholds between which the taper operates are not dependent on the number of children.

Those affected—around 1.2 million taxpayers—will declare their liability through the income tax self-assessment process, though just over half are already within the SA system. Although we recognise that the charge will bring some taxpayers into self-assessment for the first time, using self-assessment means that the tax can be calculated on the basis of the amount of child benefit received, and the taxpayer’s actual income. That is preferable to including an estimate in a taxpayer’s PAYE code, only to discover an underpayment or overpayment of tax at the year end as actual income proves to be different from estimated income. Even as small a change as £100 will change the amount of tax due for an individual on the taper. As a third of taxpayers affected will benefit from a reduced liability as they are on the taper, using PAYE rather than self-assessment would generate large numbers of under and overpayments.

The changes will take effect from 7 January 2013, with individuals affected including information relating to the charge for the first time in their self-assessment returns for the tax year 2012-13. The first payments of the charge will be due by 31 January 2014 if a taxpayer chooses to pay in a lump sum. Otherwise, the amount due for 2012-13 will be collected through the tax code in 2014-15.

[Cathy Jamieson]

I have a quick point. The Association of Chartered Certified Accountants is concerned that there will be further confusion over the fact that although the new scheme starts in January, the tax year does not start until April. How does the Minister answer that criticism?

[Mr Gauke]

Initially, we said that the scheme would be introduced from 1 January 2013—actually, it is from 7 January because that is the first day on which child benefit is payable. Such a time scale is perfectly operational, and there is no reason why we cannot run it from that particular point. Obviously, were we to delay the introduction of the scheme until April, there would be a cost to the Exchequer.

The introduction of the taper means that the vast majority of taxpayers with income between £50,000 and £60,000 will still gain from taking on extra work or getting a pay increase, even if it does take them over the £50,000 threshold.

A taxpayer or their partner would need to receive child benefit for at least eight children before the tax due on their additional income equalled the amount of income itself. Equally, an individual’s income may reduce so that they are no longer liable to the charge. That may also mean that tax due in respect of previous years can no longer be collected through the tax code. In such cases, HMRC will use its usual debt management processes.

Let me address the issue of opting out, which has been raised by a number of hon. Members. We are enabling individuals to opt out of receiving child benefit. Understandably, the point has been raised about state pensions and so on. Let me be clear. National insurance credits, which protect a person’s future entitlement to basic state pension and the state second pension, will remain available to all those who take time out of work to bring up children. The protection is given to anyone claiming child benefit for a child under the age of 12, even if they do not receive any payment or if they or their partner has to pay the new tax charge. The introduction of the tax charge will not affect a person’s right to claim child benefit. Child benefit will remain available to be claimed by anyone responsible for the child.

Parents and carers will have two options to safeguard their state pension, and they will be made clear on the child benefit claim form. First, they can claim child benefit and receive the payments. If liable, they or their partner can pay the new charge. Alternatively, they can submit a claim form for child benefit to establish their entitlement for state pension purposes, but choose not to receive the actual payments. That means that neither they nor their partner will be liable to pay the new charge, but the national insurance credits will still be received.

As for compliance, our approach means that we can use the current HMRC systems. That reduces the cost of implementation both for HMRC and the individuals affected. HMRC will use existing penalty regimes for those who choose not to tell it that they are liable to the new charge or who declare the wrong amount on their self-assessment return.

In the interests of time, let me turn to the issue of taxpayer confidentiality that the hon. Member for Bishop Auckland (Helen Goodman) raised. We have some disagreement over the meaning of independent taxation. It is about individual allowances and assessment of own income. In the 1980s, it replaced the system whereby a husband declared his wife’s income on his return, which increased his income. I understand the concern over taxpayer confidentiality. Information that should be shared between partners relates to whether child benefit is being claimed and which of the partners should have the tax charge—in other words, which tax partner is earning the most income.

The mechanisms in place will provide the minimum of information. Partners who may not be talking to each other can discover who is earning the most, but not the full details and whether or not child benefit is being claimed and for how many children. That is the extent of the information that needs to be shared, and HMRC is developing a process that enables it to share limited information with an ex-partner.

As I have already said, the Government have had to make difficult decisions. To continue to provide child benefit, we must do so in a sustainable manner. The current cost to the Exchequer for those recipients less in need is too high. To pay almost £2 billion to higher-rate taxpayers does not represent good value for money in these challenging times. We also recognise that we must withdraw child benefit to higher earners in a fair manner. The increase of the threshold to £50,000 and the introduction of the taper ensure that we are taking this action only in relation to those who can most afford it.

Finance (No. 4) Bill

Debate between David Gauke and Cathy Jamieson

Thursday 19th April 2012 Commons Chamber

[Cathy Jamieson]

My hon. Friend makes a very interesting point, and I shall come on to address the effect of this measure on many families on that borderline.

Many Members will have come from, or know, families for whom child benefit—or the family allowance, as it was called in days gone by—was a lifeline. No doubt some on the Government Benches will characterise our position as Labour trying to give more cash to high earners.

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

indicated assent.

[Cathy Jamieson]

But that argument simply does not wash from a Government and a Minister who have continued to support a tax cut to millionaires while millions of ordinary people, including Mrs Morris and many people in my constituency, are feeling the pinch. Article 27 of the UN convention on the rights of the child, which the UK has signed, outlines an obligation to assist parents in meeting the material needs of their children.

Finance (No. 4) Bill

Debate between David Gauke and Cathy Jamieson

Wednesday 18th April 2012 Commons Chamber

[Mr Gauke]

My hon. Friend continues to make his case very strongly. We are, of course, listening to the arguments, but we think it right to have a VAT system that deals with some of the anomalies, and that is why we have finally addressed some of the problems that have remained in our VAT system for too long.

[Cathy Jamieson]

At the outset of this debate there was a bit of laughing and joking, but the tone quickly changed as people realised the seriousness of the issues under discussion. The Minister’s contribution reminded me of the well-known phrase, “When you’re in a hole, you’d better stop digging”—particularly when Members on the Government Benches are looking so miserable.

I hope the Minister has listened to what has been said. In order to be helpful—and recognising that it was, perhaps, lack of attention to detail and unintended consequences, rather than malevolence, that prompted the Government to introduce these proposals, which would affect jobs and the economy—I beg to ask leave to withdraw the clause, but I shall press other new clauses in this group to a Division.

Clause, by leave, withdrawn.

Oral Answers to Questions

Debate between David Gauke and Cathy Jamieson

Tuesday 24th January 2012 Commons Chamber

[Mr Gauke]

With the work that my right hon. Friend the Secretary of State for Work and Pensions has undertaken, the Government are determined to ensure that work will always pay and that we do not have people trapped on benefits.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Yesterday, we heard the Prime Minister say that jobs in retail are a vital part of the economy. Why are the Government making changes to working tax credits that will hit part-time workers in the retail sector hard? Is that a fair deal for parents who are trying to do the right thing? Can the Minister tell us how many couples who work between 16 and 24 hours a week will lose out, and by how much?

[Mr Gauke]

We are taking measures to ensure that work will always pay. On the Labour party’s complaints, I point out that its flagship policy at the last election to increase national insurance contributions for employers would have hit the retail and other sectors very hard.

Scotland Bill

Debate between David Gauke and Cathy Jamieson

Tuesday 21st June 2011 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Perhaps the reason the Scottish Government have not yet been able to produce the figures is that some of the international studies are not to their liking because they show that lower rates of corporation tax do not necessarily lead to higher growth rates.

[Mr Gauke]

The hon. Lady may speculate about the reason, but it is not for me to do so. Perhaps I have done enough speculating as it is—