Finance Bill

Edward Leigh Excerpts

Tuesday 12th September 2017 Commons Chamber

[Mel Stride]

My hon. Friend is right, which reminds us of the overall purpose of raising tax and ensuring that we bring it in, namely to live within our means, pay down our deficit and, critically, have the fine public services that are a hallmark of a civilised society. All of us can unite in wanting that.

The Bill legislates for new rules to prevent large multinational businesses playing the system by claiming tax deductions for excessive interest expenses and ensures that companies cannot use losses to pay no tax even in years when substantial profits are made. In last week’s debate, I was somewhat surprised by the concerns raised by some Opposition Members about the provisions relating to the taxation of businesses trading in Northern Ireland. They are nothing new. They were announced in the 2016 autumn statement and do not create a tax loophole. The legislation simply ensures that all small and medium-sized enterprises with trading activity in Northern Ireland will be able to benefit from the Northern Ireland corporation tax regime in the same way as larger companies already can, and it also introduces additional anti-avoidance rules to ensure that the regime operates as intended. The Bill’s provisions do not weaken that at all; they simply mean that more businesses will be able to apply the regime to the taxation of profits genuinely arising, and only arising, from activities carried out in Northern Ireland once the regime is put into effect.

[Sir Edward Leigh (Gainsborough) (Con)]

My right hon. Friend refers to the taxation and regulation of business, but once we are in the hard, bracing winds of international free trade after Brexit, does he agree that it is essential that our Government ensure that we have a low-tax, deregulated, pro-business environment so that our businesses can compete on the world market?

[Mel Stride]

My hon. Friend is entirely right. That is why the Government have been clear through our tax planning and the information that we have been signalling to the marketplace. Certainty for business is extremely important, which is why we have lowered corporation tax and have stuck to that position. We are making considerable progress, and I will take my hon. Friend’s point on board.

In short, the Bill continues our hard work to drive down the tax gap and ensures that we will provide a fair and competitive tax system. The other part of the deal is that those taxes must be paid.