UK Economy: Post-Referendum Assessment

Debate between David Gauke and Robin Walker

Monday 23rd May 2016 Commons Chamber

[Mr Gauke]

The hon. Gentleman is right that under the more severe shock scenario, unemployment would increase by 800,000 and GDP would be 6% lower than it would otherwise have been. These are significant numbers. They are not equivalent to the great depression, but they are still significant numbers that would have a significant effect on his and my constituents. The hon. Gentleman raises an important point, and I hope we will get greater clarity about exactly what leaving the EU would involve. It seems to me that there is a clear trade-off: the closer a country is to membership of the EU, as for example with the European economic area model, the more it will continue to have the attributes of EU membership; the further away it is, it may have that greater freedom and flexibility, but it will clearly face a much bigger economic shock.

[Mr Robin Walker (Worcester) (Con)]

Inward investment is crucial to this analysis, and my constituency attracts it from China, Australia and the United States as well as from Japan. One crucial factor that has led me to believe that we are stronger in is the fact that all those countries and their businesses want to see us as part of Europe. Indeed, some of those inward investments are European headquarters. What estimate has the Treasury made of the potential relief rally in investment in this country, as and when we choose to stay in?

[Mr Gauke]

That is an important point. Anyone who has met international investors who are considering where to locate their European headquarters, for example, will be aware that they value and support membership of the European Union. Without that, it would clearly be harder to attract some of that inward investment. My hon. Friend also raises an important point about whether we would see a recovery. Evidence suggests that there has been a slowing down of investment due to the uncertainty about our relationship with the EU, but that—the Bank of England has supported this view, if not the IMF—there is likely to be a reasonably quick recovery if we vote to remain on 23 June, and we would see the investment coming back without a long-term detrimental impact.

Budget Changes

Debate between David Gauke and Robin Walker

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

That was not even the allegation. The reality is that, if we look at spending on disability living allowance and personal independence payments, it has gone up since 2010 by £3 billion—that is not a Government who are cutting at the expense of disabled people.

[Mr Robin Walker (Worcester) (Con)]

Will the Minister confirm that, as well as continuing to take thousands of my constituents out of paying income tax, and as well as shifting the burden of taxation from small businesses, through business rates, to multinationals, the Government remain committed to a progressive target of halving the disability employment gap?

[Mr Gauke]

Indeed. My hon. Friend makes a good point, and he is absolutely right to raise that. As I pointed out earlier, my right hon. Friend the Secretary of State for Work and Pensions will address that point, I am sure, later this afternoon.

HMRC and Google (Settlement)

Debate between David Gauke and Robin Walker

Monday 25th January 2016 Commons Chamber

[Mr Gauke]

Let me return to this case. There has been a lengthy inquiry by HMRC into the affairs of Google. That inquiry has now come to an end and reached a conclusion. There is nothing to suggest that anything other than the proper enforcement of the law as it stands has led the way to this particular conclusion.

[Mr Robin Walker (Worcester) (Con)]

The Minister has said much about bringing our tax system up to date for the 21st century and about closing the tax gap, which I welcome. None the less, we have in our business rates system, a tax regime that is hopelessly out of date, and the cross-party Business, Innovation and Skills Committee called for fundamental reform of it under the previous Government. May I urge him to be as ambitious as possible in that reform so that we can close the gap between online businesses and the bricks and mortar businesses on our high streets?

[Mr Gauke]

As my hon. Friend will be aware, the Government are reviewing the business rates system, and will report shortly. As far as my right hon. Friends the Chancellor and the Prime Minister are concerned—and as the Chancellor has made clear—we are looking to do that in a fiscally neutral way, and we have received many representations on that point.

Tax Avoidance (HSBC)

Debate between David Gauke and Robin Walker

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

I repeat that, as far as I am aware, no one has come forward with any evidence suggesting that Lord Green was involved in the activities of the Swiss subsidiary about which we have been talking today.

[Mr Robin Walker (Worcester) (Con)]

Of course it is right for us to do all that we can to recover taxes that have been either wrongly avoided or illegally evaded, but is it not just as great a scandal that the Labour Government allowed their friends in private equity—the same people to whom they tried to sell Royal Mail and the Post Office—to avoid tax legally by keeping capital gains tax so low that multi-millionaires paid less tax than their cleaners?

[Mr Gauke]

My hon. Friend has raised an important point. There was a problem with the way in which our system was working, and, as my hon. Friend says, the fact that cleaners paid a higher rate of tax than some people in private equity demonstrates how the last Government went awry.

Oral Answers to Questions

Debate between David Gauke and Robin Walker

Tuesday 21st June 2011 Commons Chamber

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

May I also point out that our tax policies include taking hundreds of thousands of people out of income tax altogether? On the particular subject that the hon. Lady raises, of those taken out of income tax following the announcement in the Budget earlier this year, 56% will be women.

[Mr Robin Walker (Worcester) (Con)]

T8. Which does the Chancellor think is better for low-paid workers in Worcester: the Government taking 1 million of the lowest paid out of tax altogether; or the previous Government’s move to double their tax by scrapping the 10p tax rate?

Hospices (VAT)

Debate between David Gauke and Robin Walker

Tuesday 10th May 2011 Commons Chamber

[Mr Gauke]

Again, hon. Members are raising fair points. To jump to the conclusion, we are looking closely at this area.

The help that we provide to charitable giving is important. Charities are central to our big society agenda. The 2011 Budget announced the most radical and generous reforms to charitable giving for 20 years, including reducing the inheritance tax rate when 10% or more of the net estate is left to charity. From 2013, a new scheme will allow charities to claim a gift aid-style top-up on small donations that they receive without gift aid declarations for up to £5,000 for each charity every year. Overall, 100,000 charities can benefit from the 2011 Budget changes to the tune of about £600 million.

It is also worth mentioning the transition fund that was announced at the spending review. It makes £100 million available to charities, voluntary organisations and social enterprises that are delivering front-line services and are affected by reductions in public spending. The fund provides grants of between £12,500 and £500,000 to help organisations make the changes necessary to thrive in the long term. Funding was made available in 2010-11 and 2011-12, and the fund is focused on helping organisations transit and adapt to the new funding environment rather than merely keep going. The first 18 awards were made on 15 February, with further awards in March, April and May.

The Government continue to examine ways of ensuring that VAT does not act as a barrier to the reform of public services, which was the point that the hon. Member for Cheltenham (Martin Horwood) raised. We are examining such options where they are open to us and affordable within agreed funding arrangements. For example, the Government announced in the Budget that we would continue to consult charities and organisations in other sectors to explore options for implementing the EU VAT exemption for cost sharing. I can tell the House that one of the options under consideration is to issue a consultation paper on the subject within the next two months, and we are exploring that possibility closely.

More widely, there are often ways of mitigating the impact of VAT within the existing system. For example, where local authorities and other public bodies enter into contractual rather than funding arrangements with charitable providers, it can greatly lessen any irrecoverable VAT incurred by those providers in many cases. It has to be acknowledged, however, that such an approach does not offer much scope for services that fall within the health exemption.

As I said earlier, I recognise that there is genuine concern about VAT among people involved in hospices. That was why, in March, I met the hon. Members for Scunthorpe (Nic Dakin) and for Leeds North West (Greg Mulholland) and people working in the hospice sector, including for Sue Ryder. Following that meeting I asked officials to continue the dialogue, and they have met subsequently with the intention of exploring any viable options. I hope that that provides some reassurance, although I cannot give more detail at the moment. I am certainly keen that we explore options.

[Mr Robin Walker (Worcester) (Con)]

Will the Exchequer Secretary respond to a suggestion that has been made by Richard Shaw, the treasurer of the excellent St Richard’s hospice in my constituency? He has suggested that under the NHS reforms, if hospices’ income from doctors’ consortia could be deemed to be VAT standard rating, that would allow hospices to recover a lot more VAT on their charges. Will that be one of the options that his officials look into?

[Bob Russell]

It will now.