Oral Answers to Questions
Debate between David Gauke and Diana Johnson(4 years, 11 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
Probation Reform
Debate between David Gauke and Diana Johnson(4 years, 11 months ago)
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Mr Gauke
Every individual case such as the one mentioned by the hon. Lady is a tragedy. We want to do everything we can to ensure that such cases are kept to a minimum, but there will always be individual decisions made by probation officers in the NPS or CRCs, and such tragedies can indeed occur. My focus is on ensuring that we have a sustainable system for the future, and what I have outlined to the House today provides exactly that.
Diana Johnson (Kingston upon Hull North) (Lab)
I listened carefully to what the Minister said about the failed privatisation of the probation service and the waste of money, but I wondered if he could help me with something that I am intrigued about. Would he tell us what arrangements are being put in place to supervise the serial offender in the Cabinet who causes criminal damage in every Department that he is sent to? Is he being considered for early release?
Mr Gauke
I can see that the hon. Lady has been working hard on her question. In 2014, the probation system was by no means perfect. There was a need for more innovation, and to ensure that we dealt with some of the inefficiencies in the system. Five years on, there are elements of those reforms where we can see real benefits, but I accept that there are also elements that have not worked as intended. It is right that we look at reforming those elements and that we make changes where we need to, and that is precisely what I have done.
Oral Answers to Questions
Debate between David Gauke and Diana Johnson(5 years ago)
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Mr Gauke
The evidence on no-fault divorce is that in a steady state there is not a higher rate of divorce than otherwise. It is also the case that the current fault-based approach to divorce results in divorces that are going to happen anyway being more acrimonious than they would otherwise have been. That is why I believe that it is right that we make this reform.
Diana Johnson (Kingston upon Hull North) (Lab)
Oral Answers to Questions
Debate between David Gauke and Diana Johnson(6 years ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Gauke)
I share the outrage at the distress that this intrusive behaviour can cause to victims, and I am determined to ensure that they can be confident that their complaints will be taken seriously. I am sympathetic to calls for a change in the law, and my officials are reviewing the current law to make sure that it is fit for purpose. As part of that work, we are considering the private Member’s Bill that is being promoted by the hon. Member for Bath (Wera Hobhouse).
Mr Gauke
Let me also acknowledge the unveiling of the Millicent Fawcett statue.
As I have said, I am sympathetic to the idea of our taking action in this regard. There are instances in which people have been successfully prosecuted for upskirting in the context of outraging public decency, and voyeurism can also apply under the Sexual Offences Act 2003. However, those offences do not necessarily cover every instance of upskirting, which is why there is a strong case for looking at the law and considering whether we need to change it.
Diana Johnson
I, too, am using my inner Millicent Fawcett courage to raise this issue. In Scotland, the offences of upskirting and downblousing are covered by the 2009 Act. Surely the Secretary of State accepts that the same could be done in this country.
Oral Answers to Questions
Debate between David Gauke and Diana Johnson(6 years, 2 months ago)
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Mr Gauke
The events in Bedford at the weekend were deeply disturbing and the sympathy of the whole House goes out to that prison officer and his family. Violence against prison officers is at an unacceptable level. There were 8,000 incidents last year and, as I set out in a speech this morning, we must take this incredibly seriously. We must recognise that the driver of a lot of this violence is drugs, and that the driver of a lot of drugs in prison is serious organised crime. I want to ensure we do everything we can to address that, because prison officers do a great job and it is far too dangerous for them.
Diana Johnson (Kingston upon Hull North) (Lab)
With the support of Co-op Funeralcare, Dignity plc, the National Association of Funeral Directors, the bereavement charity Cruse and the all-party group on baby loss, 50 bereaved parents in Hull are still seeking an independent inquiry into what happened to their babies’ ashes. Does the Minister still stand by Hull City Council, which has refused to have that independent inquiry?
Parole Board: Transparency and Victim Support
Debate between David Gauke and Diana Johnson(6 years, 3 months ago)
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Mr Gauke
Well, even though the review has been broadened, and even though we are looking more widely not just at transparency but at whether there should be an opportunity for the Parole Board to look again at decisions, that review will report by Easter. Obviously, the timing will depend on precisely what it recommends, but I am keen to make progress as quickly as possible.
Diana Johnson (Kingston upon Hull North) (Lab)
May I too welcome the extension of the review that has been announced today? However, there are serious questions to be answered about the way that the police and the CPS operated in this case. I do not think that it is satisfactory just to leave it to the Metropolitan police and the CPS. I want to know what the Home Office—the Under-Secretary of State for the Home Department, the hon. Member for Louth and Horncastle (Victoria Atkins), is sitting next to the Secretary of State—and the Attorney General’s Office are doing to look at what happened in those early stages and whether this man should have been charged with further offences.
Mr Gauke
I know that both the Home Secretary and the Attorney General have been very focused on this case. I hope that the hon. Lady will understand that my focus has been on the immediate issues, which relate not only to the consideration of judicial review but to the issues of transparency and support for victims. Of course there are questions that probably do need to be asked about how the IPP system, which this Government have abolished, operated in terms of whether it met the test of honesty in sentencing, but perhaps that is a debate for another day.
Work, Health and Disability
Debate between David Gauke and Diana Johnson(6 years, 5 months ago)
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Mr Gauke
First, I thank the hon. Lady for the work she does with the all-party group, and for her kind words about its engagement with my Department. She raises an interesting point about procurement. She will be aware that, when it comes to procurement issues, Departments and sectors very often have different asks, and the Cabinet Office obviously has to take a view. However, we are considering the issue, and I encourage all major companies, particularly those that have engagements with the Government, to look very carefully at what being a Disability Confident employer involves.
Diana Johnson (Kingston upon Hull North) (Lab)
Will the Secretary of State update the House on the progress made for people damaged by the state when they received contaminated blood products during the contaminated blood scandal, particularly in relation to passporting benefits to them so that they do not keep having to go through regular assessments?
Pensions
Debate between David Gauke and Diana Johnson(6 years, 9 months ago)
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Mr Gauke
One thing I would highlight, as my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) did a moment ago, is what we have done on auto-enrolment. That means 10 million more people saving for retirement, which is a huge step forward. I am delighted with the success of auto-enrolment—the very low opt-out rates—and that is one example of how the Government are ensuring that people will have a dignified retirement, but we must remember that the public finances need to be in good order as well.
Diana Johnson (Kingston upon Hull North) (Lab)
Bearing in mind regional health inequalities, what steps will the Government introduce in terms of social security to support those who will not be able to work until this later age?
Mr Gauke
As a country we spend very large sums—something like £50 billion a year—on support for people with health and disability issues, and we will obviously continue to do that. That is the best way of supporting people who have health difficulties, rather than by having a lower state pension age, which would be unaffordable.
UK Economy: Post-Referendum Assessment
Debate between David Gauke and Diana Johnson(7 years, 11 months ago)
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Mr Gauke
First, the report is for the next two years. As my right hon. Friend will be aware, even if we vote to the leave the European Union, we will continue to be members of it for those two years as we negotiate our departure. During that two-year period, we would continue to make contributions to the EU budget. May I also point out what the International Monetary Fund has said? It said that, essentially, if the economy shrinks by 1% or more, any fiscal gain from ceasing to make contributions to the EU will be wiped out by lower tax receipts and greater costs. Indeed, under the central scenario set out in the report, the public finances will be £24 billion worse off as a consequence of our leaving the EU.
On interest rates, the assumption in the report is for no changes to fiscal or monetary policy. I point out to my right hon. Friend that one of the predictions in the report is that we would see the pound falling in value and inflation increasing. The Monetary Policy Committee has made it clear that it would have a difficult trade-off to try to get the economy going at a time when there would clearly be a slowdown. At the same time, the pound would be falling and inflation would be rising. In those circumstances, the safest thing to do is to make no assumptions on what monetary policy would be.
Diana Johnson (Kingston upon Hull North) (Lab)
Has any assessment been made of the impact if we leave the EU on 23 June on companies such as Siemens, which invest in new industries in this country such as renewables?
Mr Gauke
The hon. Lady’s point is particularly significant because of the long-term impacts. It is very clear to any of us who engage with those who invest in the UK—businesses that make decisions on where to locate investment—that access to the single market is an important attribute for the UK. It is clear within the report that business investment would fall significantly in both the short and long term as a consequence of leaving the EU.
HMRC and Google (Settlement)
Debate between David Gauke and Diana Johnson(8 years, 3 months ago)
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Mr Gauke
My hon. Friend raises an important point. There is a need for international co-operation at an OECD level, which is the principal focus, and at an EU level. He will be aware of action that the European Commission has taken in respect of other member states that have had concerns about state aid.
Diana Johnson (Kingston upon Hull North) (Lab)
The Minister says that this deal does not amount to a 3% tax rate for Google, so for the sake of public confidence will he say what the actual tax rate is?
Mr Gauke
No—[Laughter.] That is because of taxpayer confidentiality. The point that I was trying to make was that the rate cannot be calculated by looking at profits from sales in the United Kingdom. The tax rate is currently 20%, and that applies to everybody, but the effective tax rate depends on the particular circumstances of any business.
Tax Avoidance (HSBC)
Debate between David Gauke and Diana Johnson(9 years, 2 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
The Minister said a couple of times that there was no information or evidence against Lord Green at the time of his appointment. Can the Minister spell out exactly what due diligence was carried out at the time of his appointment?
Mr Gauke
On HSBC generally, there are clearly questions that need to be answered about what happened at HSBC between 2005 and 2007. HMRC has been taking action against about 1,000 people who were involved in this matter, where there is evidence that they have broken the UK law. HMRC will continue to take action in the event of any further evidence arising; I make that point about our approach. On Lord Green, what I would say is that he was a successful trade Minister. There is no suggestion, and no regulator has suggested, that he was at fault with regard to what happened with the Swiss subsidiary.
Oral Answers to Questions
Debate between David Gauke and Diana Johnson(11 years, 1 month ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
17. Instead of spending £3 billion on cutting the 50p rate for the richest, why not put the money towards 100,000 social rented homes of one and two bedrooms to make the coalition Government’s bedroom tax work?
Mr Gauke
This figure of £3 billion that is repeated time and again is simply inaccurate. It makes no assumption for behavioural effects whatsoever, and this was never the position of the Labour party. The fact is that the cost is £100 million, recouped several times over by other measures contained in the last Budget that are getting more money out of the wealthy.
Finance Bill
Debate between David Gauke and Diana Johnson(11 years, 10 months ago)
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Mr Gauke
I certainly will, although at this point I am just setting out what we set out at the Budget. I will turn to each individual measure in more detail in a moment and happily give way to my hon. Friend at that point.
We propose to remove the anomaly whereby approved alterations to certain listed buildings are zero-rated while alterations to other buildings and repairs to and maintenance on all buildings are standard-rated. We included transitional arrangements for alteration works to listed buildings which had been contracted before the Budget, and we wanted to put beyond doubt the fact that VAT applies to the rental of hairdressers’ chairs.
Finally, we proposed to ensure that holiday caravans are taxed consistently at the standard rate of VAT. The proposal, as set out in the consultation document, was that all the changes would take effect from 1 October via secondary legislation, supported by anti-forestalling provisions in this Bill. The consultation was opened on 21 March, and overall HMRC received some 1,500 responses. Owing to the volume of interest in the consultation, we decided to extend it, and since it has closed we have reflected fully on the points made during the process.
As the House will be aware, in two areas—hot food that is cooling down naturally and static holiday caravans—the Budget proposals created a high degree of business uncertainty, so the Government wanted to let people know our preferred course of action as soon as possible; we did that on 28 May. Last Thursday, we published a consultation response document and tabled the new schedule setting out our approach to all the measures on which we consulted. We stand by the rationale for removing anomalies, but have made several refinements, including those we announced on 28 May. They are intended to improve the policy and reflect the practical concerns raised in the consultation.
Diana Johnson (Kingston upon Hull North) (Lab)
HMRC produced a document on the impact of the caravan tax, but can the Minister provide enlightenment on the impact of the 5% VAT imposition? There are no figures now on how many jobs will be lost and by how much demand for static caravans will decrease, and I was hoping that the Treasury had worked that out.
Mr Gauke
Clearly there is a substantial difference between 20% VAT and 5% VAT. We set out our estimates in relation to the 20% rate, and some of the concerns that people took from what HMRC set out were, I think, somewhat greater than the reality warranted, because the impact set out and the assumption regarding the reduction in demand related solely to that element to which the change from zero-rated to standard-rated applied. On many caravans that are sold, the VAT is recovered—VAT already applies to an element of the price of a static caravan: that of the fixtures and fittings.
We do not think the impact of the 5% rate is likely to be substantial. In the usual course of business there are tax changes—national insurance contributions and rates are the subject of regular fluctuations—and in many cases the VAT change may well be absorbed. In addition, we have given industry much more time by deciding not to implement the change until April next year. Caravan manufacturers will have the opportunity to sell more caravans in advance of next year’s summer season—the information we have is that spring tends to be the busiest period. The overall impact on the industry is therefore unlikely to be significant.
Before discussing each of the anomalies and saying more about static caravans, I would like to give the House a little bit of history about the VAT system. As I am sure all hon. Members know, the VAT system was introduced in 1973 and amendments and adjustments were being made as early as 1974. The then Labour Government added confectionary, soft drinks, ice cream, potato crisps and certain other savoury snacks—
Mr Gauke
One can never rule out the fact that some people will be litigious and try to take a creative view of any particular guidance. However, we believe that we have reached the right position after much consultation and discussion with the industry and with hon. Members, many of whom have been very engaged in the matter. I look around the House and see at least two Members who have been in my office to make representations on this point. We believe that we have reached a position that is sustainable and fair, and that is what we are putting to the House in the new schedule. The additional criteria will ensure that hot food will generally be taxed at the standard rate of VAT, but if food that would be zero-rated when cold is bought when it happens to be cooling down, but is not yet cold, it will still be zero-rated provided that it does not meet any of the criteria that I set out. These changes will add further tests to make the relief less open to abuse and provide a level playing field for all businesses supplying their customers with hot food.
Turning to the issue of holiday caravans, which we have touched on briefly, the VAT zero rate was originally intended to apply to the sale of caravans used only for residential purposes. To achieve that objective, the rules drawn up in the 1970s applied tax only to the sale of smaller caravans that could legally be towed on UK roads by a typical family car. However, over the years, an increasing number of large caravans have been used for holiday purposes. Those caravans inadvertently benefit from the VAT zero rate that was intended for residential caravans. That has led to widespread inconsistency in the VAT treatment of the sale of holiday caravans.
Under the current legislation, any caravan wider than 2.55 metres or longer than 7 metres is zero-rated as a residential caravan. The Government propose to replace the definition of a zero-rated caravan based on size with a new definition based on whether the caravan has been designed for residential use. To achieve that, we propose a new test that links the zero-rating with British Standard 3632, which indicates that the caravan has been designed and manufactured for continuous, all-year-round occupation and is therefore suitable for residential accommodation.
We consulted on whether the additional criteria should be added to ensure that the zero rate applies only to caravans intended for residential use. Given the reaction to the proposal, we decided that rather than having a single dividing line between a zero rate of VAT on residential caravans and a rate of 20% on static holiday caravans, static holiday caravans should be subject to VAT at the reduced rate of 5%. Static residential caravans—those that meet BS 3632, or early equivalents in the case of second-hand sales of older caravans—will remain zero-rated, as per the Budget proposal. We do not intend to restrict the zero rate further by adding additional criteria.
Diana Johnson
I wonder whether it is sensible to make decisions on tax policy based on manufacturing standards. Manufacturing standards will change and no doubt get better, so is that a sensible way of operating tax policy?
Mr Gauke
In this particular circumstance, the manufacturing standard provides a better definition or borderline than the size criteria that I set out. It was put to us in the consultation that it would be very easy for manufacturers to do a bit more here and there, and that a static caravan that was once not BS 3632-compliant suddenly would be. When we investigated that, we concluded that it was quite expensive and difficult to meet BS 3632. Genuine residential caravans meet that standard, but non-residential, holiday vans do not. It seems to be an effective borderline. Of course these matters will be kept under review, but we think that this is a sensible conclusion and one that the industry recognises. The evidence that the industry has put to us is that BS 3632 adequately distinguishes between residential caravans and static caravans.
It is worth pointing out that BS 3632 caravans tend to be more expensive and are built to a higher specification. For those reasons, they tend to be used more in the residential market than in the holiday market. It is worth coming back to the intention of the 1970s definition for zero-rated caravans.
We recognise that static holiday caravans fall in a grey area between residential property and temporary holiday accommodation, which have different tax regimes. We have therefore produced the fair compromise of a 5% VAT rate. The argument was sometimes made to us that static holiday caravans should be treated like a second home, on which VAT is not paid. However, council tax is paid on a second home, which is not the case with static holiday caravans. Imposing the council tax regime on static caravan homes would have placed a significant burden on their owners and holiday parks, so we believe that we have made a fair compromise. As I said earlier, to give the industry more time to adjust, the measure will be delayed until 6 April 2013. All the other measures that we are discussing today will proceed as planned on 1 October this year.
Diana Johnson
The National Caravan Council has said that the caravan industry is fragile after the problems that it experienced in 2008. Based on the figures in the KPMG report, there would have been 6,000 job losses if the imposition of the 20% rate had gone ahead. Am I right to assume that with the 5% rate, the Treasury is working on the assumption that the impact will be a quarter of that number, which means 1,500 job losses?
Mr Gauke
Perhaps it will help the hon. Lady if I run through the situation. We have to raise a certain number of taxes, and VAT probably does less harm to the economy than almost any other tax that one could mention, whether it be employers’ national insurance contributions, which reduce the number of jobs, or corporation tax, which reduces investment. There is an issue with any tax.
On this particular policy, however, we are talking about a 5% rate on 80% of the price of a caravan, the other 20% being standard rated already, and on 85% of sales, the other 15% being standard rated already—or rather the purchaser being able to recover input taxes on it. There is then an elasticity of demand, and the 5% rate might result in a 5% reduction in demand, but of course that involves various assumptions and some uncertainty. As my hon. Friend the Member for Brigg and Goole (Andrew Percy) said, however, much of the industry does not think it will have a significant impact.
Static Caravans (VAT)
Debate between David Gauke and Diana Johnson(12 years ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
I congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing this debate. He has already made his case to me, leading a delegation of MPs to see me on 17 April, as he said, and I know that he has also made representations to my right hon. Friend the Chancellor. He also spoke passionately about the proposal in our debate on the Finance Bill on 18 April. I am pleased to have the opportunity in the time available to respond in more detail to the concerns that he and other Members have raised.
Let me begin with some general points to put the measure in context. Removing the zero rate of VAT from static holiday caravans is one of a series of VAT measures announced in the Budget that are designed to make the VAT system fairer to all traders and easier to administer and comply with. It will help to create a level playing field by ensuring that all holiday caravans are taxed in line with the sale of other forms of holiday accommodation that have restrictions on permanent occupation, such as touring caravans, camper vans, narrowboats, timeshares and new holiday homes.
Let me address two issues that were raised in my hon. Friend’s speech and in interventions. The first relates to revenue and costings, the second to the impact on businesses. First, the conventions used in the Treasury’s policy costings were set out in the 2010 Budget policy costings document. In brief, policy costings take account of direct effects on the tax base, but do not include indirect behavioural effects—for example, on employment, wages and salaries, or general consumption. However, the indirect economic effects are not ignored; instead, they are captured in the Office for Budget Responsibility’s economic forecast, taking into account, for example, the changes on the relevant sectors.
Diana Johnson (Kingston upon Hull North) (Lab)
I am listening carefully to the Minister. There are 43 people chasing every job vacancy in my constituency this month. The Treasury is not going to make any money from introducing VAT on static caravans, as it has failed to take into account the undoubted unemployment that will result from this measure.
Mr Gauke
As I have said, the Office for Budget Responsibility takes into account the second-round effects of all measures in the Budget.
Time is short, so let me turn to the demand reduction estimates and the figure of 30% that a number of hon. Members have quoted. HMRC has estimated that, as with what are described as “discretionary leisure durables”, expenditure on static holiday caravans will be impacted by the measure, with a 1.5% fall for every 1% increase in price. However, we should all be clear that this reduction in expenditure will apply only to static holiday caravans sold to the final consumer, and only to the proportion of the price of such caravans not already subject to VAT. The reduction in expenditure does not, therefore, apply to the approximately one third of caravans sold to caravan sites for rental. Their price should not change, as the caravan site will normally be able to reclaim the VAT in the usual way. That part of the static caravan market will not be affected by the measure. Neither will the measure affect the 20% of the price of a static holiday caravan that is already subject to VAT in respect of its removable contents.
Taking account of those factors, the overall fall in expenditure should be less than the 30% reduction indicated in the impact assessment. That is because the estimated 30% reduction refers only to the specific parts of the market that will be impacted by the measure: sales to private individuals who cannot reclaim the VAT.
Oral Answers to Questions
Debate between David Gauke and Diana Johnson(12 years ago)
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Mr Gauke
I can assure my hon. Friend that we will listen carefully and sympathetically to the arguments that are put to us. He, indeed, has already made strong representations on this point, and we have of course extended the consultation period to 18 May, as the Chief Secretary to the Treasury pointed out earlier.
Diana Johnson (Kingston upon Hull North) (Lab)
Can the Minister explain to my constituents why VAT on ski lifts in the Chief Secretary to the Treasury’s constituency is being reduced, but in my constituency thousands of people are going to lose their jobs with the implementation of the Government’s plans to increase VAT on static caravans?
Mr Gauke
VAT is chargeable on mobile caravans, camper vans, narrowboats, beach huts and tents, and we are seeking greater consistency in the area.
With regard to ski lifts and other forms of cable-based transport, there is a reduced rate in France, Germany, Austria and Italy, and most areas of public transport are zero-rated.
Budget Leak Inquiry
Debate between David Gauke and Diana Johnson(12 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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This information is provided by Parallel Parliament and does not comprise part of the offical record
Diana Johnson (Kingston upon Hull North) (Lab)
The Liberal Democrats were briefing extensively in the past few days, and I just wonder whether the Minister would like to investigate why they seem to have preferential access to information before Parliament does.
Oral Answers to Questions
Debate between David Gauke and Diana Johnson(13 years, 5 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
16. What estimate he has made of the cost to the Exchequer of redundancy and retraining requirements arising from implementation of proposals contained in the comprehensive spending review.