Budget Changes

Debate between David Gauke and Nicholas Dakin

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

My hon. Friend reminds me about 2007 and 2008. There is a distinction between the two Governments: whereas Gordon Brown doubled the tax rate on low earners, we have abolished tax for low earners.

[Nic Dakin (Scunthorpe) (Lab)]

Some £4.4 billion seems to have fallen out of the Budget. Will the Minister confirm that that is the case? When is the Chancellor going to come here and tell us where he is finding the money?

[Mr Gauke]

If the hon. Gentleman is worried about black holes in the public finances, he really ought to have a word with his own Front Benchers.

HMRC and Google (Settlement)

Debate between David Gauke and Nicholas Dakin

Monday 25th January 2016 Commons Chamber

[Mr Gauke]

My hon. Friend has made an important point. The way in which to change the culture of multinational companies—and, indeed, we have already started to see signs of such a change—is to take the action that we have taken in implementing the BEPS recommendations and introducing a diverted profits tax. Those are the achievements of this Government.

[Nic Dakin (Scunthorpe) (Lab)]

I really cannot believe that the Government see this deal as a major success. Why are they so supportive of sweetheart deals for companies like Google, but so slow and reluctant to address the business rates burden on the steel industry?

[Mr Gauke]

As I have said, we are reviewing business rates, and, in fact, we have cut them by £1 billion in recent years. I should add that there is no sweetheart deal. HMRC does not undertake sweetheart deals. What it undertakes are thorough inquiries, and when companies accept their liabilities, those inquiries can be brought to a conclusion. However, we are ensuring that HMRC succeeds in delivering the revenue that is due under the law.

Oral Answers to Questions

Debate between David Gauke and Nicholas Dakin

Tuesday 1st December 2015 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

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

[Mr Gauke]

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

Finance Bill (First sitting)

Debate between David Gauke and Nicholas Dakin

Thursday 17th September 2015 Public Bill Committees

[Mr Gauke]

I would draw a distinction between a Government who had no reputation for fiscal responsibility seeking to obtain such a reputation by passing such legislation and a Government who have a record of controlling income tax by increasing the personal allowance and not increasing rates, notwithstanding the challenges we face in the public finances. The clause underlines the Government’s commitment not to increase taxes, and income tax in particular, on the British people, because that is the wrong response. That is consistent with what we have done in office. The problem the last Labour Government had was that, in response to the fiscal crisis, rather than coming forward with clear proposals to reduce the deficit or even to accept a need to get to grips with that deficit, they simply sought to pass legislation. That was the wrong response then, whereas this is the right response now.

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure, as always, to serve under your chairmanship, Sir Roger. The logic of the Minister’s argument does not really stack up. If the country has confidence about the Government’s fiscal responsibility, there is no need to pass legislation. I am totally confused by his argument.

[Mr Gauke]

We fought the last general election saying that we would introduce this legislation. We won that general election, which suggests that the British people had confidence in the overall package of our fiscal policies. If Labour Members are worried about fiscal confidence, perhaps they should look somewhat closer to home.

Sixth-Form Colleges (VAT)

Debate between David Gauke and Nicholas Dakin

Tuesday 17th December 2013 Westminster Hall

[Mr Gauke]

I think that is probably a fair description, historically. Schools have been treated one way, in part, because of the relationship with local authorities and funding at local authority level, whereas other elements of the public sector do not get funding for VAT in the way that local authorities do. Sixth-form colleges and further education colleges are examples of that.

[Nic Dakin]

rose—

[Mr Gauke]

I give way to someone who knows a lot about this subject.

[Nic Dakin]

The Minister and I have exchanged words on this matter many times. The historical record is quite interesting. When colleges were incorporated, they had the same VAT rights as schools, because they came from the same part of the womb, as it were, but that was changed at the point of incorporation. Given the way that the landscape of education has changed, it is odd that new provisions, such as university technical colleges or 16 to 19 free schools, are entitled to the VAT, whereas sixth-form colleges are not. That anomaly was created on this Government’s watch. It would be better if it were not so.

[Mr Gauke]

It should be acknowledged—and it was, in earlier interventions—that notwithstanding the points that the hon. Gentleman makes, this is a long-standing issue.

Let me turn to the Government’s position. The academies VAT refund scheme is set up for a specific policy purpose, which is to remove a financial disincentive for maintained schools to convert to academies. As the purpose is specific, the Treasury has no plans to extend the scheme to colleges. Many other providers of public services are expected to cover their VAT costs from their funding allocations. This funding model is applied to bodies delivering—

Changes to the Budget

Debate between David Gauke and Nicholas Dakin

Monday 11th June 2012 Commons Chamber

[Mr Gauke]

As the Chancellor recently said, if there is one thing worse than a Government who listen, it is a Government who do not listen.

[Nic Dakin (Scunthorpe) (Lab)]

Unfortunately, the Exchequer Secretary’s attempt to clarify the skip tax appears to have added to the confusion. Will he engage with the industry in the same spirit as he has engaged with others, and consider the eligibility of fines residue from trommel equipment being eligible for the lower rate of duty?

[Mr Gauke]

My understanding is that Her Majesty’s Revenue and Customs is continuing to work with the industry to provide clarity in this area. There have been concerns; I think there was a misinterpretation of earlier advice and I believe that that is in the process of being addressed.

Finance (No. 3) Bill

Debate between David Gauke and Nicholas Dakin

Monday 4th July 2011 Commons Chamber

[Mr Gauke]

As I said, where this is within our control, public sector workers earning less than £21,000 are getting the £250. Where it is not within our control, we have funded local authorities; they are funded to make this payment, but it is ultimately for them to decide.

[Nic Dakin]

As a former council leader, it occurs to me that Governments were for ever putting conditions on how money for local government should be spent, so surely that could be the case in this respect as well?

[Mr Gauke]

This Government believe in localism. I do not know whether the hon. Gentleman wants to return to the days when local authorities were highly prescribed as to how they could spend money and everything was ring-fenced, but that is not how we want to operate.

Hospices (VAT)

Debate between David Gauke and Nicholas Dakin

Tuesday 10th May 2011 Commons Chamber

[Mr Gauke]

I wanted to apply this initially to the broad issue of costs incurred by charities as a whole. Clearly, there can be an issue in the provision of care and welfare services more generally, and I was looking at it in that context rather than specifically with regard to hospices.

It is true that the NHS can recover the portion of its VAT costs that relate directly to out-sourced services used in the provision of free healthcare—for example, cleaning, laundry, catering and estate management. That amounts to about 20% of the total VAT incurred across the NHS. This ability to reclaim some VAT costs is taken into account as part of the overall funding arrangements for the NHS. Refunds do not extend to VAT paid on goods and services purchased to support business activities that are exempt from VAT, such as private health care and property rental.

In addition to the obligation placed on the Government to ensure that the VAT system is fiscally neutral and does not distort competition, it is not within our gift to change unilaterally a VAT system unanimously agreed in Europe and applying in the single market. We need to apply the mandatory exemption in relation to the business supplies of health care providers, with the associated block on recovery. Similarly, under European agreements the Government cannot extend existing VAT zero rates or introduce new ones. Reduced rates can be applied only to a specific list of goods and services, and there is no such reduced rate that applies to all supplies made by all charities.

[Nic Dakin (Scunthorpe) (Lab)]

rose—

[Mr Gauke]

I give way to the hon. Gentleman, who takes a great interest in this matter.

[Nic Dakin]

The Minister is giving a detailed explanation, which is very helpful. May I refer back to situations in which a hospice, for example, takes over services that were previously run by the NHS, for which the NHS could recover VAT on non-business services? Surely such an imaginative Minister can find a way of transferring that across to the hospice movement so that it is cost-neutral for the Exchequer, but beneficial to the community.

[Mr Gauke]

If the hon. Gentleman will forgive me, I will come back to that point. It is kind of him to say that I am going through this in a detailed way. If I may, I will proceed and then come back to what we can do. It is worth making the point that the last time we tried to change the list of matters that can be zero rated for VAT, it took six years and some negotiation.

It is worth highlighting the help that Government provide for charities. We are limited in the support that we can give through changes to the VAT system, but it is important to understand that the Government can and do support charities more widely through the existing VAT system and in other ways. We are committed to retaining the existing VAT zero rates that apply specifically to charities, which provide a benefit of about £200 million a year. Those include VAT zero ratings for qualifying charities on sales of donated goods, for medical and scientific equipment, and for goods for use by disabled people. Charities are not charged VAT on the costs of advertising and public media. They also qualify for zero rating on the construction of certain buildings to be used for charitable purposes. All those zero rates are derogations from the normal EU VAT rules and are not enjoyed by charities in other member states. Charities also benefit from the more widely available VAT zero rates that are applicable to purchases.

The UK has one of the most generous tax systems in the world for charities. Our existing reliefs for charities are worth more than £3 billion a year. Gift aid is the largest single relief, and it is now worth nearly £1 billion to charities each year. Our position, which is in line with that taken by successive Governments, is that the most appropriate way of supporting charities is to encourage charitable giving, rather than to create a complex and burdensome system of additional reliefs or refunds.

Oral Answers to Questions

Debate between David Gauke and Nicholas Dakin

Tuesday 16th November 2010 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

15. What mechanism he plans to use to ensure that households which include one or more higher rate taxpayer cease to receive child benefit payments.

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

From January 2013 Her Majesty’s Revenue and Customs will withdraw child benefit from higher rate taxpayers using PAYE and self-assessment systems. The vast majority of claimants will continue to receive child benefit, and will not be affected by this change.

[Nic Dakin]

Earlier this year, the Prime Minister said he wanted this Government to be the most family-friendly Government we have ever had in this country. How does this proposal support a family where one partner stays at home to look after the children while the other partner earns over £45,000 a year?

[Mr Gauke]

It does families and everyone else in this country no good if we do not get to grips with the fiscal crisis. If the Opposition are saying households paying higher rate income tax should continue to receive child benefit while those who do not earn so much contribute towards that, it once again shows that they are not getting to grips with the scale of the crisis.