Oral Answers to Questions

Debate between Helen Goodman and Jane Ellison

Tuesday 17th January 2017 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

The most useful thing that the Treasury could do for small manufacturers in my constituency would be to announce an objective of staying in the customs union. Up to now, the Treasury has been a beacon in saying that it wants decisions based on analysis, not on rhetoric and ideology. Can the Minister assure the House that that is still under consideration?

[Jane Ellison]

Again, these are issues that we are looking at carefully; the Chancellor has had a series of roundtable meetings with different sectors and industries in recent months, as have all of us Ministers. We are looking carefully at what those detailed issues are. Of course, much more will be said on this and discussed in the House later today, but we are clear that we want to understand the detailed issues that businesses face so that as we move forward to make our future outside the European Union, we can resolve the practical issues that businesses will face in a way that helps the British economy.

Corporate Tax Base

Debate between Helen Goodman and Jane Ellison

Tuesday 20th December 2016 General Committees

[Jane Ellison]

I should perhaps say in anticipation that if I cannot respond to any questions from colleagues, I will of course write to them. I hope that satisfies hon. Members.

I will deal with the points raised. There was a general question about subsidiarity. We do not believe that either the CCTB or CCCTB are necessary for the internal market to function effectively, so we do not accept the assumptions that appear to underpin the Commission’s proposal. At present, we are therefore not convinced that the proposal is consistent with subsidiarity.

The hon. Member for Bootle mentioned ECOFIN’s conclusions. They were high level in nature and do not commit the UK to anything. The Government have made our reservations about the proposals clear. As directives on direct tax, the files require the unanimous approval of member states before they can be agreed. We will continue to engage constructively. As I said, as can be seen from our co-operation on the OECD project and the substantial number of measures we have passed since 2015 alone, we are clearly very supportive of the intended direction of travel. However, we will not sign up to anything that unduly restricts our sovereignty over direct tax, as the current version of the file does.

The legal base was also mentioned, which I touched on. Article 115 of the treaty on the functioning of the European Union provides for EU legislation that directly affects the single market. While we think that it might be possible to make the case that that article is an acceptable legal base, we have broader reservations about whether the proposals can achieve their objectives, as I have set out.

The shadow Minister asks what is envisaged as we go forward; that question quite reasonably arises whenever we debate EU matters. He mentioned the timing, which clearly relates to when we will leave the EU. UK companies that operate in the EU and meet the conditions of the CCCTB would need to understand and operate under its rules if it were to come into effect. The amount of profit allocable to UK activities will remain the same.

From the perspective of double taxation relief, our rules and treaties should continue to operate as they do now. In fact, we have double taxation treaties in place with all of our European partners—as the hon. Member for Kirkcaldy and Cowdenbeath knows; we debated this on Friday—so we are not dependent on EU laws alone on such matters. Those are already in place and will continue to operate as they do now, so we do not think that that is too much of a material concern. I think I have touched on all the key points. Subsidiarity was mentioned, but I think I have alluded to it sufficiently.

[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hanson. I have two questions for the Minister. First, I am not clear whether her primary objection is on principle, or because she dislikes the content of the proposed instrument. Will she engage in a thought experiment with me? Were member states to come together around a table and all agree to move together and change their corporate tax bases in the way that is proposed here, but not through an EU instrument, would she be happy to sign up to that? Does she object on principle, or does she dislike the content of the proposal? Secondly, what consideration has the Minister given to the impact on the Government’s Brexit negotiations of adopting this stance on this instrument?

[Jane Ellison]

I thank the hon. Lady for her questions; they were good, as I would expect. As I said, the UK will not give up member state sovereignty over our tax base without very good reason, and we are not convinced that there are such reasons in the directive. On some measures, such as the ATAD measure to which I referred, we have come together and been able to agree something.

Having direct control over our tax base enables us to respond to events in our own jurisdiction. We have debated tax a lot over recent years, and it has become apparent to all of us in this House that the challenges we face are global. Leaving aside the timeline issue, it is quite hard to envisage a situation in which there would be a sufficiently compelling reason—the hon. Lady set out a hypothetical situation—to give up direct control over our tax base, given the global challenge we face with some of these tax issues.

We are working very well domestically, with almost 30 measures passed since 2015—some of them are yet to come into effect, and others are already working—and have co-operated through the OECD. For those reasons, we do not see this proposal as compelling enough to cause us to give up something as important as direct control over our tax base.

--- Later in debate ---

[Helen Goodman]

Very good questions.

[Jane Ellison]

They are indeed good questions. The latter point is something to which we have all given a great deal of thought. I might write to my hon. Friend the Member for Croydon South with further reflections, if that is all right. He is right to say that these issues exercise us all, but they are not purely European issues. Indeed, some of the challenges with famous companies’ taxation arrangements actually have their roots in the US tax code, more than EU taxation, but I might write to him with a more thought-out response.

On my hon. Friend’s first question, it is true that we have agreed files in Europe that impact on direct tax. As he said, the UK has been actively participating in multilateral action through G8, G20 and the OECD to reform international tax standards and prevent tax avoidance and aggressive tax planning by multinationals, as part of the Government’s objective to align the taxation of profits with economic activity, which relates to his second point.

We have supported EU-level action where appropriate but are keen to ensure that it fits with the way multinational enterprises are taxed globally. We fully supported the European Commission’s work to implement the recommendations from the BEPS project through the anti-tax-avoidance directive, but the crucial point is that those actions are targeted at particular issues, and the degree of co-ordination required between countries’ tax regimes is limited to the extent necessary to address them. We feel that agreeing a common consolidated tax base at EU level is a more fundamental change in the way companies are treated. For the reasons I laid out in my opening statement, it goes too far for us to agree that it is the right way to proceed.

--- Later in debate ---

[Jane Ellison]

A fair point, and I welcome the clarification, but I would still slightly disagree. The debates we have been having about the challenges of international taxation and multinationals, which were laid out eloquently by the hon. Member for Bishop Auckland, are ongoing. They have taken place in the context of the G20 and the OECD, and will continue to take place in the EU. We will continue to have those debates after our exit from the EU because, as people have said, we are leaving the EU, not Europe, and we will continue to have very important relationships. It is important that we engage with this direction of travel, because this is hardly going to be an overnight process.

There was a slight implication in the contribution from the hon. Member for Bishop Auckland that compared to the OECD, the EU was a model of speedy progress; that is where I would sound my only note of scepticism. It is clear that we will be engaging on these matters for a long time to come, in a range of international forums, so the debates that we have are useful. They have been echoed in other countries. Other people have expressed issues and concerns, as we have as a country, and there have been other reasoned opinions offered.

[Helen Goodman]

Will the Minister tell us which other countries have been resistant? She said there were seven.

[Jane Ellison]

No, I said several. I think I am right in saying that Ireland has offered a reasoned opinion, and there has been debate in other countries as well. On the issue of direct tax and sovereignty in particular, the UK is not taking a stand-alone point of view.

I want to address the points made by the hon. Lady about wider co-operation and competitive corporation tax. My main reason for pushing back against the points she made is that although it is true that UK corporation tax was 28% in 2010 and will be 17% by the end of this Parliament—we have already legislated for that—the backdrop to that is our active engagement and, indeed, leadership in international forums to address some of the issues that we are all concerned about to do with multinational tax avoidance and aggressive planning.

Our mantra is that taxes should be competitive and fair, but paid. The Chancellor has been clear about the path that we have set for this Parliament to the figure of 17%, and that it is right in the circumstances. We have no plans to go further at this time, but as I mentioned, we have brought forward a number of measures—about 30 since 2015 alone.

On one hand, it is true that we have set the most competitive corporation tax in the G20, but on the other, we are extremely proactive in international forums in leading on measures to clamp down on international tax avoidance. We shall continue to do that post-Brexit, within the OECD and with European partner countries. That is a balancing point to put against the slight implication in what the hon. Member for Bishop Auckland said that we are in a race to the bottom. We want to be competitive, but also to make it clear that taxes must be paid. The measures that we have passed underline how seriously we take that.

While we remain in the EU, the Government will continue to engage with EU tax files, championing the approach to business tax that encourages investment in jobs and growth, places proportionate administrative requirements on business, and ensures that businesses large and small pay their fair share of tax. As I said, that will happen through the tackling of avoidance. We will also scrutinise proposals to ensure that they are proportionate and effective; proportionality, and questions as to effectiveness, are obviously germane. We will not compromise member state sovereignty when it comes to direct tax.

I hope that what I have said provides an update for members of the European Scrutiny Committee on the Government’s stance on these matters, and that I have sufficiently reassured the hon. Member for Bishop Auckland that we will continue to be engaged. I welcome the interest in these important issues. I will review the Hansard report of the debate, and if there are any matters that I did not deal with in sufficient detail, I shall write to hon. Members. It was a good debate. We will continue to debate and engage with some of the issues raised by the hon. Member for Bishop Auckland beyond our membership of the EU, because we are, and want to continue to be, a leader in international forums in ensuring that businesses can operate in a fair and competitive environment, that the taxes that are due are paid, and that—as we have already sought to do, and are continuing to do—we use reasonable ways of clamping down on aggressive international tax avoidance and evasion.

Question put and agreed to.

NHS (Government Spending)

Debate between Helen Goodman and Jane Ellison

Wednesday 28th January 2015 Commons Chamber

[Jane Ellison]

I will make some progress; the hon. Gentleman has made a contribution.

Not only has NHS funding in England been protected; it has risen in every year of this Parliament. That is an indisputable fact that flies in the face of the Opposition’s financial scaremongering. As a result of the additional £2 billion funding for 2015-16 the Chancellor announced in the autumn statement, funding in 2015-16 will be £16 billion higher in cash terms than in 2010-11. Those are the facts. That equates to an increase of £6.8 billion in real terms. That additional investment is a down-payment on the NHS’s own plan, which was set out in the “Five Year Forward View”. The chief executive of NHS England, Simon Stevens, has said that the autumn statement gives the NHS what it needs for next year.

Winter is always challenging for the NHS. This year, it comes on top of a significant increase in A and E attendances, which have been higher than in any year since 2010. On average, 3,000 more patients each day are being seen and treated in under four hours than under Labour. As my hon. Friend the Member for Stourbridge (Margot James) set out clearly in going back over the past few years, the additional funding the Government have put in emphasises the priority we place on the NHS. That makes utter nonsense of the claim that we are going back to 1930s levels of funding. That is ludicrous, and Opposition Members parroting that because they have been told to insults the intelligence of every Member of the House. It is nonsense.

[Helen Goodman]

The OBR says that the Government’s plans involve cutting 1 million public service workers. Will the Minister say from the Dispatch Box which 1 million public service jobs are going to be cut?

[Jane Ellison]

I remind all Opposition Members of their predictions about employment at the beginning of this Parliament. If any of them wants to remind us of those, they can be my guest.

We recognise the significant and continuing pressure on services in the short term and the need to invest in new ways of providing care for the future.

This Government have put more performance data in the public domain and have put an unprecedented emphasis on transparency. Indeed, some of the statistics Members quote in these debates are in the public domain only because the Government have put such an emphasis on transparency. Transparency is one of the key drivers of safety in our system.

As public health Minister, I welcome the focus on prevention in the “Five Year Forward View”. I think this is common ground across the parties. Prevention has to be a key part of the NHS’s plans. When we keep people healthy and out of hospital, it is a win for them and a win for the NHS. Mention has been made of the national diabetes prevention programme. We will be the first country in the world to implement such a programme at scale to help prevent the onset of the disease and reduce demand on the NHS. Investing in the NHS with a focus on prevention is one of the keys to a sustainable footing for the NHS in the long term.

Thanks to the work of NHS staff and the funding protection provided by the Government, the NHS is treating more patients than ever. Again, that flies in the face of all the dire threats about its peril. There are 9,000 more doctors and 3,300 more nurses. The additional funding announced by the Chancellor in the autumn statement will enable the NHS to continue to meet the rapidly rising demand in the short term, while making investments in new services and facilities to transform care for patients and ensure that the NHS is sustainable in the long term.