Elizabeth Truss contributions to the Finance Act 2018


Mon 18th December 2017 Finance (No. 2) Bill (Commons Chamber)
Committee: 1st sitting: House of Commons
3 interactions (5 words)
Tue 28th November 2017 Budget Resolutions (Commons Chamber)
1st reading: House of Commons
5 interactions (1,274 words)

Finance (No. 2) Bill Debate

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Department: HM Treasury
Legislation Page: Finance Act 2018

Finance (No. 2) Bill

(Committee: 1st sitting: House of Commons)
Elizabeth Truss Excerpts
Monday 18th December 2017

(2 years, 9 months ago)

Commons Chamber
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HM Treasury
Peter Dowd Portrait Peter Dowd - Hansard
18 Dec 2017, 7:41 p.m.

First, we did not regulate the banks in the United States, where it all started. I ask the hon. Gentleman—I have said this a number of times—to go and look at “Freeing Britain to Compete,” the document produced by the right hon. Member for Wokingham (John Redwood) for the shadow Cabinet in, surprisingly, August 2007.

Elizabeth Truss Portrait The Chief Secretary to the Treasury (Elizabeth Truss) - Hansard
18 Dec 2017, 7:41 p.m.

They were not the Government.

Peter Dowd Portrait Peter Dowd - Hansard
18 Dec 2017, 7:42 p.m.

“They were not the Government” is shouted across the Dispatch Box, but that brings me to the point I am making. The bottom line is that chapter 6 of “Freeing Britain to Compete” called for significantly less regulation of the banks. As I have said before, the right hon. Member for Wokingham effectively said in that document that the Labour Government at the time believed that, if we did not regulate the banks, they would steal all our money. Many people out there believe that that is, in effect, what happened. The taxpayer had to bail out the banks. Why did the taxpayer have to bail them out? Because of the lack of regulation. The shadow Cabinet at the time ratified a policy of less regulation. If we had followed the right hon. Gentleman’s exhortations, as ratified by the shadow Cabinet, we would be in an even worse state. I ask the hon. Member for Brentwood and Ongar (Alex Burghart) to go and have a look at that one.

Budget Resolutions

(1st reading: House of Commons)
Elizabeth Truss Excerpts
Tuesday 28th November 2017

(2 years, 9 months ago)

Commons Chamber
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Department for Business, Energy and Industrial Strategy
Peter Dowd Portrait Peter Dowd (Bootle) (Lab) - Hansard
28 Nov 2017, 6:44 p.m.

As the Chancellor gave his Budget speech last week, there was a collective groan across the country not just at the bad jokes, but at the content of the most uneventful Budget speech of recent times. There was no game-changing investment announcement and no lasting solutions for the growing difficulties facing our country. The Chancellor’s speech personified this Government: out of touch, inconsistent and directionless.

The Cabinet is morbidly and irrevocably split on Brexit and, rather than focusing on their individual briefs, Ministers now spend their days attempting to steal each others’. The International Trade Secretary wants to run Britain’s foreign policy. The Environment Secretary is learning all about hypothecation, apparently fancying himself as Chancellor, and The Times reported that he is busy researching the difference between a J curve and a J-cloth. Meanwhile, the Foreign Secretary continues to scheme for the top job. He is the first to praise the Prime Minister, while constantly plotting to undermine her—Iago on steroids. Ironically, the only person who does not want to be in No. 10 is its current occupant. She remains, as in the Monty Python parrot sketch, nailed to the perch and “off the twig”. The Prime Minister’s metabolic processes are, politically speaking, history.

The most important announcements made last week were not the Chancellor’s recycled policies, but those from the Office for Budget Responsibility. The OBR lowered UK growth forecasts, business investment, productivity rates and wage growth for the next five years, blowing a hole in the Government’s economic credibility. As for balancing the books, under the Government’s current projection, the UK budget will not be in surplus until 2030 at the earliest—a full 15 years after the former Chancellor said that the deficit would be eradicated. Workers who have already endured a decade of stagnant wages and lost earnings will not see their pay return to pre-crisis levels until 2025. And there is more. UK households face the biggest squeeze in disposable income since records began. The message from the OBR is clear: Britain under the Tories is now facing a record 17-year downturn in pay.

The Budget did nothing to eradicate the impact of austerity on women, who have disproportionately borne the brunt of it. The abolition of stamp duty for first-time buyers is of course welcome, but the OBR rightly points out that the move will increase house prices. Many Government Back-Benchers called for action to help the next generation, but the best the Chancellor could muster was a millennial railcard that young people cannot even use to commute to work and that will not even cover the cost of the 3.6% rail fare increase next year.

On universal credit, the Government finally listened to Labour and scrapped the seven-day waiting time, but they have done nothing about the roll-out.

The Government once again ensured that the NHS and its staff will remain underfunded and underpaid, and the extra money announced in the Budget does not even meet NHS England’s call for extra funding. Far from being dead and buried, the public sector pay cap remains alive and well. Public sector pay is now set to fall to its lowest level by comparison with the private sector, and the Chancellor is trying to divide public sector workers.

As I have said so many times at this Dispatch Box, the UK’s economic growth wholly depends on our ability to raise productivity rates, and there was nothing of any substance whatsoever in the Budget to help that. The Government continue to fail in delivering the infrastructure and investment that the regions so desperately need. Like so many of this Government’s policies, their industrial strategy White Paper released yesterday is thin on details and thinner on ideas—another damp squib. It is about time that this Government went. They should pack their bags, get the Prime Minister out of No. 10 and hand things over to the Labour party to do the job properly and get growth back for this country.

Elizabeth Truss Portrait The Chief Secretary to the Treasury (Elizabeth Truss) - Parliament Live - Hansard
28 Nov 2017, 6:49 p.m.

We have had an excellent debate this afternoon. We heard my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy lay out an optimistic vision for our industrial strategy. We heard my hon. Friends the Members for Banbury (Victoria Prentis), for Mansfield (Ben Bradley), for Dudley South (Mike Wood) and for Hitchin and Harpenden (Bim Afolami) and my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer) talking about the positive measures in the Budget on skills, housing and tax. We also heard the usual fiction and portents of doom from the Opposition.

I repudiate the Opposition’s predictions. Our destiny is not preordained. We have the power to shape the future and to boost our growth and productivity. If we want to know what high productivity looks like, we need look no further than our high-growth companies. When it comes to start-ups, we are world leading, with more than 650,000 companies founded in 2016 alone. We have more than twice the number of $1 billion tech companies than anywhere else in Europe. By enabling companies to grow and, even more, to start, we can make sure all people in this country benefit from our world leadership in areas such as driverless cars and artificial intelligence.

The real revolutionaries in this country are not sitting on the Opposition Front Bench clutching their iPads and looking up debt numbers, while denouncing enterprise; the real revolutionaries are the businesses across Britain that take risks, create jobs and improve our lives. They are the people who are delivering day out, day in for our country. This Budget is about liberating those businesses to achieve their ambitions and to deliver for our future, and it is about making sure that they have the people, the capital and the space to succeed.

Of course we want to attract the brightest and best to our country, which is why we are doubling the number of high-skilled visas that can be granted each year, but we also need to unleash the talents of our own people, both to help power the economy and to make sure they can share in the opportunities that enterprise brings. The fact is that the previous Labour Government let down our children and young people. They left Britain short of skills; they dumbed down the curriculum; they created rampant grade inflation; they failed on technical education; and they left office with rising youth unemployment.

When Labour left office, youth unemployment was at 20%, which is why we brought in higher standards for English and maths, new academies and free schools, and new T-levels. Under this Government, we have seen more apprenticeships and the lowest level of youth unemployment for 13 years. I suggest the Opposition engage with the facts.

We are announcing even more in this Budget. We are tripling the number of computer science teachers and, as my hon. Friend the Member for Chelmsford (Vicky Ford) pointed out, we are giving schools £600 for every additional student studying maths A-level or core maths, the most valuable qualifications in the jobs market. We are learning from the best in the world, and I am delighted that my right hon. Friend the Minister for School Standards is here today because he championed the Shanghai and Singapore maths mastery programme that we are rolling out to a further 3,000 schools. We are also making sure that adults already in jobs have the opportunity to improve their skills through the national retraining scheme.

The Government know that private investment in high-growth businesses benefits us all through new technology, higher living standards and more jobs. This year, a record £2 billion was invested in FinTech alone. This Budget builds on that success by unlocking more than £20 billion of investment to finance growth in innovative firms. As my hon. Friend the Member for Mid Norfolk (George Freeman) said, £1 billion is also being invested in the life sciences sector.

We also want to make it easier for brilliant women founders to access capital. Research shows that, when making identical pitches, women are half as likely to secure early-stage investment, despite investors who invest in female-led businesses being, on average, more successful. We have asked the British Business Bank to look at that so we can see more brilliant women founders and start-ups getting that investment.

Finally, these high-potential businesses need space to grow and high-quality infrastructure. We are making it easier for businesses to expand their operations through new planning freedom and manufacturing zones. We are also investing a huge amount in infrastructure. As my hon. Friend the Member for Saffron Walden (Mrs Badenoch) pointed out, this Budget includes the highest amount any Government have spent as a proportion of GDP on economic infrastructure for 40 years. How can the Opposition talk about a lack of investment in infrastructure, given that this is the highest for 40 years? It is much higher than anything that happened under the previous Labour Government. This spending includes plans for the Oxford-Milton Keynes-Cambridge corridor and for the northern powerhouse. [Interruption.] Let me say to the Opposition that we are investing £337 million in a new fleet of trains for the Tyne and Wear Metro, and £300 million to ensure HS2 can accommodate future northern and midlands rail services. We are also creating a £1.7 billion transforming cities fund, which will give our great cities the investment they need, and they will be able to invest in local trams or light rail systems as they see fit.

Sir Edward Davey Portrait Sir Edward Davey - Hansard
28 Nov 2017, 6:55 p.m.

Does the right hon. Lady agree that British companies—our new entrepreneurial companies —would like a nice big market to sell their goods to, on our doorstep?

Elizabeth Truss Portrait Elizabeth Truss - Hansard
28 Nov 2017, 6:56 p.m.

Absolutely, which is why our focus is on getting the best possible deal in the Brexit negotiations. Maintaining a tight grip on Government finances is, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) pointed out, vital for any Government, and Opposition Front Benchers would do well to look at that when they are considering—[Interruption.] I see that the shadow Chancellor is on his iPad looking up what the—[Interruption.] I can help him out without an iPad. His plans would mean an additional half a trillion pounds-worth of debt. If hon. Members want to know how much extra interest the British public would have to pay every year, I can tell them that it is £7 billion. I do not need an iPad to know that.

This Government are prioritising our country’s long-term growth prospects. We are investing in the infrastructure and in the skills that our country needs to succeed. Whatever the Opposition say, it is not politicians or Whitehall that will turbo-charge our economy and bring the growth and improved living standards we all want; it is the enterprises up and down the country that are going to deliver that. The Opposition want to tax new industry to the hilt or, even worse, to run it themselves. I cannot think of a more scary prospect for businesses across Britain. We take the opposite view; we want to unleash enterprise and to make sure that businesses have the people, space and the conditions to succeed. This is a Budget that recognises where the true value of our economy is created. It is not through issuing blank cheques that we cannot afford, but by making sure that our enterprises have the skills, talent and space that they need to grow and to ensure that all our citizens benefit from our powerhouse future. That is why the House should support the Budget in the Lobby tonight.

Question put and agreed to.

Resolved,

That income tax is charged for the tax year 2018-19.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

Mr Speaker Hansard
28 Nov 2017, 7 p.m.

I am now required under Standing Order No. 51(3) to put successively, without further debate, the Question on each of the Ways and Means motions numbered 2 to 44, on which the Bill is to be brought in. These motions are set out in a separate paper distributed with today’s Order Paper.

I must inform the House that, for the purposes of Standing Order No. 83U, with which I feel sure all colleagues are personally and closely familiar, and on the basis of material put before me, I have certified that in my opinion the following founding motions published on 22 November 2017 and to be moved by the Chancellor of the Exchequer relate exclusively to England, Wales and Northern Ireland and are within devolved legislative competence: motion 3, on income tax (main rates); motion 35, on stamp duty land tax (higher rates for additional dwellings); and motion 36, on stamp duty land tax (relief for first-time buyers). Should the House divide on any of these motions it will be subject to double-majority voting.

The Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).

2. CORPORATION TAX (charge for financial year 2019)

Resolved,

That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year charging corporation tax for the financial year 2019.

3. Income tax (MAIN RATES)

Resolved,

That for the tax year 2018-19 the main rates of income tax are as follows—

(a) the basic rate is 20%,

(b) the higher rate is 40%;

(c) the additional rate is 45%.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

4. Income tax (Default and savings rates)

Resolved,

(1) That for the tax year 2018-19 the default rates of income tax are as follows—

(a) the basic rate is 20%,

(b) the higher rate is 40%;

(c) the additional rate is 45%.

(2) That for the tax year 2018-19 the savings rates of income tax are as follows—

(a) the basic rate is 20%,

(b) the higher rate is 40%;

(c) the additional rate is 45%.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

5. Income tax (starting rate limit for savings)

Resolved,

That section 21 of the Income Tax Act 2007 (indexation) does not apply in relation to the starting rate limit for savings for the tax year 2018-19 (so that, under section 12(3) of the Income Tax Act 2007 as amended by section 4 of the Finance Act 2017, that limit remains at £5000 for that tax year).

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

6. Transferable tax allowance

Resolved,

That—

(1) Chapter 3A of Part 3 of the Income Tax Act 2007 (transferable tax allowance) is amended as follows.

(2) Section 55B (tax reduction: entitlement) is amended in accordance with paragraphs (3) to (5).

(3) In subsection (2) (conditions for entitlement to tax reduction)—

(a) for paragraph (a) (individual is spouse or civil partner of maker of election in force under section 55C) substitute—

“(a) the individual is the gaining party (see section 55C(l)(a)) in the case of an election under section 55C which is in force for the tax year,”, and

(b) in paragraph (d), for “individual’s” substitute “relinquishing”.

(4) After subsection (5) insert—

“(5A) In this section “the relinquishing spouse or civil partner”, in relation to an election under section 55C, means the individual mentioned in section 55C(l)(a) by whom, or by whose personal representatives, the election is made.”

(5) In subsection (6) (reduced personal allowance for transferor)—

(a) after “under subsection (1)” insert “by reference to an election under section 55C”, and

(b) for “individual's” substitute “relinquishing”.

(6) Section 55C (elections to reduce personal allowance) is amended in accordance with paragraphs (7) and (8).

(7) In subsection (l)(a) (individual may make election if married or in civil partnership)—

(a) after “the same person” insert “(“the gaining party”)”, and

(b) in sub-paragraph (ii), after “when the election is made” insert “or, where the election is made after the death of one or each of them, when they were last both living”.

(8) After subsection (4) insert—

“(5) The personal representatives of an individual may make any election for the purposes of section 55B that the individual (if living) might make in relation to—

(a) the tax year in which the individual dies, or

(b) an earlier tax year.”

(9) Section 55D (procedure for elections under section 55C) is amended in accordance with paragraphs (10) and (11).

(10) In subsection (3) (elections which are not automatically continued in force for subsequent years), after “is made after the end of the tax year to which it relates” insert “or is made after the death of either of the spouses or civil partners”.

(11) In subsection (4) (election may be withdrawn only by individual who made it), after “by whom the election was made” insert an election made by an individual's personal representatives may not be withdrawn”.

(12) The amendments made by this Resolution—

(a) come into force on 29 November 2017,

(b) have effect in relation to elections made on or after that day, and

(c) so have effect even where a relevant death occurred before that day.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

7. Deduction for seafarers’ earnings for duties performed outside UK

Resolved,

That provision may be made in connection with the application of Chapter 6 of Part 5 of the Income Tax (Earnings and Pensions) Act 2003 in relation to employment in the Royal Fleet Auxiliary Service.

8. Exemption for armed forces’ accommodation allowances

Resolved,

That provision may be made exempting, from income tax, amounts paid as accommodation allowances to, or in respect of, members of the armed forces of the Crown.

9. Benefits in kind: cars

Resolved,

That provision (including provision having retrospective effect) may be made amending Chapter 6 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003.

10. Foreign-service relief for benefits on termination of employment

Resolved,

That provision may be made amending Chapter 3 of Part 6 of the Income Tax (Earnings and Pensions) Act 2003 in connection with restricting, in relation to payments and other benefits received in connection with the termination of a person's employment, relief given by that Chapter by reference to service within the definition of “foreign service” given by section 413(2) of that Act.

11. Employment income provided through third parties

Resolved,

That provision may be made in connection with—

(a) the application and operation of Chapter 2 of Part 7 A of the Income Tax (Earnings and Pensions) Act 2003, and

(b) the operation of Part 11 of that Act in connection with Schedule 11 to the Finance (No. 2) Act 2017

12. Disguised remuneration schemes (earnings charged to tax)

Resolved,

That—

(1) In section 554A of the Income Tax (Earnings and Pensions) Act 2003 (employment income provided through third parties: application of Chapter 2 of Part 7A), after subsection (5) insert—

“(5A) Subsections (5B) and (5C) apply where—

(a) a payment to a person other than A, or to A as a trustee, is of earnings from A's employment with B, and

(b) the earnings are, in whole or part, charged to tax under the employment income Parts otherwise than by virtue of this Part,

and for this purpose it does not matter whether all or some only or none of the tax is paid (but see sections 554Z5 and 554Z11B).

(5B) For the purposes of subsection (5C), an arrangement is a “redirected- earnings arrangement” if it (wholly or partly) covers or relates to redirected earnings; and for the purposes of this subsection and subsection (5C) “redirected earnings” means—

(a) the payment mentioned in subsection (5A)(a), or

(b) any sum or other property which (directly or indirectly)—

(i) represents, or

(ii) is derived from,

that payment.

(5C) The circumstances mentioned in subsection (5A)—

(a) do not prevent a redirected-earnings arrangement being within subsection (l)(b), and

(b) do not prevent rewards or recognition or loans being in connection with A's employment with B for the purposes of subsection (l)(c) where there is use of redirected earnings for the provision of the whole, or part, of the rewards or recognition or loans.”

(2) The amendment made by paragraph (1)—

(a) come into force on 29 November 2017,

(b) has effect for the purposes of the operation of Part 7 A of the Income Tax (Earnings and Pensions) Act 2003 in relation to relevant steps taken on or after 22 November 2017, and

(c) so has effect in the case of payments within the new subsection (5A)(a) whenever made (including ones made before 6 April 2011).

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

13. Trading income provided through third parties

Resolved,

That provision may be made about information for the purposes of the operation of Schedule 12 to the Finance (No. 2) Act 2017.

14. Pensions

Resolved,

That provision (including provision having retrospective effect) may be made about the application of Part 4 of the Finance Act 2004 in relation to—

(a) pension schemes that are Master Trust schemes,

(b) pension schemes established under section 67 of the Pensions Act 2008,

(c) pension schemes that have a dormant sponsoring employer, and

(d) pension schemes treated as registered by virtue of paragraph 1(1) of Schedule 36 to the Finance Act 2004.

15. EIS, SEIS, SI and VCT reliefs

Resolved,

That provision may be made about reliefs under Parts 5, 5A, 5B and 6 of the Income Tax Act 2007, including—

(a) provision having retrospective effect, and

(b) (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year.

16. PARTNERSHIPS

Resolved,

That the following provision relating to partnerships may be made—

(a) provision as to how tax legislation applies where a partner is a bare trustee;

(b) provision for determining the income tax liability of indirect partners;

(c) provision about income tax returns for partnerships.

17. Research and development expenditure credits

Resolved,

That provision may be made amending section 104M(3) of the Corporation Tax Act 2009.

18. INTANGIBLE FIXED ASSETS

Resolved,

That provision may be made amending Part 8 of the Corporation Tax Act 2009.

19. Corporation tax treatment of oil activities: tariff receipts etc

Resolved,

That provision may be made about the meaning of “tariff receipt” for the purposes of Part 8 of the Corporation Tax Act 2010.

20. Hybrid and other mismatches

Resolved,

That provision (including provision having retrospective effect) may be made amending Part 6A of the Taxation (International and Other Provisions) Act 2010.

21. Corporate interest restriction

Resolved,

That provision (including provision having retrospective effect) may be made relating to Part 10 of the Taxation (International and Other Provisions) Act 2010.

22. Corporation tax: Education Authority of Northern Ireland

Resolved,

That provision (including provision having retrospective effect) may be made relieving the Education Authority of Northern Ireland of liability to corporation tax.

23. Chargeable gains (indexation allowance)

Resolved,

That provision may be made restricting indexation allowance for gains chargeable to corporation tax.

24. Chargeable gains (transfer of assets to non-resident company)

Resolved,

That provision may be made amending section 140 of the Taxation of Chargeable Gains Act 1992.

25. Chargeable gains (depreciatory transactions)

Resolved,

That provision may be made amending section 176 of the Taxation of Chargeable Gains Act 1992.

26. First-year tax credits

Resolved,

That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made about first-year tax credits paid in connection with relevant first-year expenditure under the Capital Allowances Act 2001.

27. DOUBLE TAXATION RELIEF

Resolved,

That the following provision relating to double taxation relief may be made——

(a) provision in relation to counteraction notices given under Part 2 of the Taxation (International and Other Provisions) Act 2010;

(b) provision restricting credit relief under that Part, or deductions for foreign tax paid, by reference to amounts attributable to an overseas permanent establishment of a company that are used to reduce a foreign tax;

(c) provision (including provision having retrospective effect) to secure that the double taxation arrangements to which effect may be given by Order in Council include arrangements modifying the effect of earlier such arrangements and arrangements conferring functions on public authorities within or outside the United Kingdom.

28. bANK LEVY

Question put,

That provision may be made amending Schedule 19 to the Finance Act 2011, including (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision taking effect in a future year.