Finance (No. 2) Bill

Debate between Jacob Rees-Mogg and Jane Ellison

2nd reading: House of Commons
Tuesday 18th April 2017 Commons Chamber

[Mr Rees-Mogg]

There is indeed an advertising industry, but we live in a free country and people ought to be able to advertise products. We have a lot of misinformation, have we not? We now learn that fat is not as bad for people as it was said to be, and that people have put sugar into products from which they have removed the fat in order to make them taste nicer because fat-free products without sugar taste disgusting. Advice that turned out to be wrong has led to manufacturers doing things that then turn out to be unhealthy. I am suspicious of the advice that comes from Government and their ability to get it right. If they end up getting it wrong, force us to change our behaviour and tax us, we get the worst of all possible worlds.

A little bit of sugar does nobody any harm at all—only taking it to excess does so—and the only justification, which has indeed been made, is for children. However, I think that ignores the responsibility of parents, most of whom are responsible, and puts up the cost for responsible parents of giving their children what may, in many households, be an occasional treat rather than a regular habit. It is a tax that falls hardest on the poorest in society, who may occasionally be giving their children something that they like, because of the excesses of others. I do not really think that that is the job of the Government.

That leads me to the issue of hypothecated taxation. Ministers should write out 100 times a day, “Hypothecation is a bad idea.” That has been the Treasury orthodoxy for as long as there has been a Treasury. Hypothecated tax does not work because it produces the wrong amount of money for what it is seeking. We see that with the prospect of putting money from the sugar tax into schools. We now discover that not enough money is likely to come from the sugar tax to meet the obligations given to schools, and that money will therefore have to come out of general taxation.

If it were a good idea to put the money into schools in the first place, it ought to have come out of general taxation in the normal way. If it was not a good idea, but just a clever way of spending the money, taxpayers’ money should not have been used. If we get into the position that something is now being done that did not need to be done because it was promised as money from a tax that has not arisen, that is not a good way of carrying out Government policy. All hypothecation of taxation should be struck off: it simply leads to the wrong amounts.

That leads me to the broader point I want to make about this Finance Bill and the Budget that preceded it. It is very good news that an election has been called, because the Budget has become so hemmed in by the number of promises on taxation and revenue expenditure that have quite rightly been kept. Governments ought to keep their promises, and this Government have been absolutely rigorous in doing so, even ones that I do not like. For instance, I am not in favour of the 0.7% going on overseas aid, which I think has been a wasteful and extravagant promise when money is needed elsewhere. However, the justification was that it was in our manifesto, and in manifestos parties make a pact with the electorate that they ought to continue with except under the most extraordinary circumstances that have not arisen.

Such an approach has led to very many areas of expenditure being fixed, while taxation has been limited at the same time. The deficit has been brought down to a third of what it was when this Government came in—a very substantial achievement, of which this Government and their predecessor ought to be proud—but it has become very hard to take that any further because of the encapsulating commitments that are limiting the Chancellor’s freedom of action. That is why the Finance Bill, for all that it has 700 pages, will not lead to a great deal of fundamental reform. It is tweaking things at the edges—looking at little bits of money here and little bits there—rather than taking a fundamental or basic approach to our tax system.

Our tax system has become overly complex and, from the pressure of having to find little bits of money, it is becoming even more complex, which makes it difficult for taxpayers to pay the right amount of tax. We can see that more anti-avoidance legislation has come in to stop avoidance, because we have overcomplicated the tax system in the first place and a corrective measure has therefore had to be taken to try to prevent revenue from seeping away. A good example is the discussions we are having about perceived employment as opposed to self-employment. The Government were extremely proud of their achievement in making self-employment easier, but a constituent who came to see me explained that the £3,000 national insurance contributions exemption for small businesses had led to all the people working for him having to become individual companies, whereby it cost £3,000 a year less to pay them than if they were directly employed or were employed through one subsidiary company.

Very good ideas come into individual Budgets—particular tax breaks to encourage particular forms of behaviour to lead to certain outcomes that the Government wish to see—but they then have to be corrected by anti-avoidance measures because they get taken and used in a way that was not intended under the initial legislation. That is why the election will be a great opportunity to stand on a platform of tax simplification, and I hope we will achieve the sort of majority that will help to push that through. To achieve tax simplification, it will be necessary to ensure that avoidance is removed at source, rather than by anti-avoidance measures. That means taking away some of the existing exemptions and incentives that encourage people to set up more complex systems than they need to minimise the amount of tax they pay.

I am a defender of people taking such an approach. If Parliament legislates for tax to be collected in a certain way, with certain exemptions and thresholds, the individual taxpayer is completely and legitimately entitled to use them to their fullest extent. The approach is the fault not of the taxpayer, but of Parliament for putting exemptions into or leaving them in legislation. We should always be very careful to distinguish avoidance from evasion. Evasion is straightforwardly criminal—not paying the amount of tax that is, by law, due. Avoidance is looking at the tax system and saying, “I do not owe that tax, and I do not have to pay it because Parliament has not legislated for me to pay it.” As individual taxpayers, we are all entitled, as are all our constituents, to pay the tax Parliament requires, not a penny less or a penny more. If we had a system that was simpler overall, that would be hugely beneficial.

There is a lot about anti-avoidance in the Finance Bill, including the new rules for non-doms, about which I would be very careful. We live in a world where some very rich people want to come to the United Kingdom, and when they are here they employ people, spend money and pay taxes. We have a system that has barely changed since the days of Pitt the Younger—I cannot say I remember them, but I wish I did—and that broadly unchanged system was actually very beneficial for our economy because it brought into this country wealthy individuals who then provided economic activity. It is absolutely right to ensure that people who are obviously domiciled here in all normal senses of the word should be seen as being domiciled here, but we do not want such a difficult regime that people who might come here and contribute to our economy feel that they cannot do so.

[Jane Ellison]

I want to give my hon. Friend a degree of reassurance. A new measure in the regime advanced as part of the non-doms reforms will make it easier for anyone to invest in the real economy—business investment —which I hope he will welcome. I entirely take his point that we want to make sure that people can come to this country from anywhere and invest in the real economy.

[Mr Rees-Mogg]

Absolutely. That is an important part of the reforms, but there has perhaps been a tone—more from the previous Chancellor than from the current Chancellor—that the non-doms were using the system. A lot of them could actually go anywhere in the world, but they come here because of the great virtues of investing in the UK: we have clear rights of property; we have an effective rule of law; and we have had simple regulations that have allowed them to be here. However, we have now increased the charges on them and increased their eligibility for certain taxes, and I think we should be very cautious about that because one never knows, with these sorts of things, where the tipping point will come. It may be that the annual charges applied to non-doms seem quite small compared with their wealth, but when we consider that they have families—the charges have to be multiplied for the wife, the number of children and grandparents, or whoever—we may find that the charges become quite high. The people bringing such wealth into the country have enormous mobility: they can go elsewhere. I know that standing up for non-doms six weeks before an election is not necessarily going to be a great rallying call for North East Somerset, but ultimately I think good economics leads to good politics rather than the other way around. A lot of what was done with regard to non-doms was much more about politics and perception than the contribution non-doms make to this country. In the context of Brexit, we want to show that we are genuinely open to the rest of the world. We want people to come here to invest and to spend their money, because that is so important to our long-term economic prosperity.

There is a broad challenge with this Finance Bill, as there will be with its successor which will no doubt come. I have a feeling that this will be one of those happy years where we get more than one Finance Bill. Finance Bill debates are particularly enjoyable parliamentary occasions because they have no time limit. The hon. Member for Aberdeen North (Kirsty Blackman) said that we might go right through the night and not be able to have our debate tomorrow. I look forward to that happening at some point in the future, but I have a feeling it is not going to happen today. Finance Bill debates are the best debates because of their fluidity and flexibility.

When we get to the second Finance Bill, a fundamental choice will still have to be made. This relates to the answer we had from the hon. Member for Bootle (Peter Dowd) on the Opposition Front Bench. There is an absolutely key point at the heart of this Finance Bill, as there will be at the heart of any new Finance Bill. When I intervened on him and said that the tax rate as a percentage of GDP was at its highest since the days of Harold Wilson, his answer to me was that under Labour it would be even higher.

Value Added Taxation

Debate between Jacob Rees-Mogg and Jane Ellison

Tuesday 21st February 2017 General Committees

[Mr Rees-Mogg]

May I take it from the answer given to the hon. Member for Stretford and Urmston that there is at least the possibility that we will get back duty free when we have left the European Union? It would be a wonderful gift to the British people and would increase their joy when they travel.

[Jane Ellison]

It seems unusual for a Government Minister to draw attention to the fact that she did not answer a question, but since I did not answer that question, I made no such speculation or comment. As I have said, all these matters are for the negotiations ahead and a range of different outcomes are possible.

[Mr Rees-Mogg]

I merely asked if it were possible, and the answer, being answerless, indicates that it must at least be possible.

[Jane Ellison]

I will reflect and try to understand what was just said.

NHS (Charitable Trusts Etc) Bill

Debate between Jacob Rees-Mogg and Jane Ellison

Friday 22nd January 2016 Commons Chamber

[Mr Rees-Mogg]

I am grateful for the Minister’s reassurance, and I am more than happy to accept it.

[Jane Ellison]

I thank my hon. Friend. It gives me great pleasure, as a Minister at the Dispatch Box, to receive such a note of approbation from him, given that he is rather expert when it comes to Friday sittings and these technical amendments. I am honoured, indeed, by his intervention.

On amendment 9, my hon. Friend took the opportunity to praise a local charity in his constituency promoting the use of defibrillators. In common with other hon. Friends who drew attention to this, I thank his local charity for its work on this important undertaking. I am glad that, as has been mentioned, the Chancellor was able to give £1 million to this important cause, which is working with the British Heart Foundation to bring far more defibrillators into public places in North East Somerset and far beyond.

I thank my hon. Friend for his question about the use of the NHS logo. I know from his contribution on Second Reading that he has interest in its licensing. I hope I can put his mind at rest by confirming that independent charities, including former NHS charities, can use the localised NHS logo of the NHS organisation for which they raise funds. Independent charities can arrange permission to use the logo, if they are working in partnership with an NHS organisation. We heard examples of local charities working in close partnership. In addition to heaping praise, rightly, on the Torbay Hospital League of Friends, my hon. Friend the Member for Torbay mentioned a Paignton charity working closely with a local NHS body. That is a good example.

The NHS logo generates high degrees of trust and reassurance among patients and the public, as my hon. Friend the Member for Horsham (Jeremy Quin) drew out in his contribution. We all understand why. We can all cast our minds back to the many occasions when that trust and reassurance have been in the public spotlight. I think, in particular, of the opening ceremony of the Olympic games. Who can forget the spelling out of “GOSH”? I am sure will hear far more about that admirable institution on Third Reading.

The use of the NHS logo is carefully controlled because it indicates that the NHS is in some way accountable and responsible for the services or materials to which it is applied. It is a registered trademark and an important public brand, so there are strict rules governing the correct use of the NHS identity. Generally, the NHS identity guidelines do not permit independent charities to use the NHS trademarks in their names or promotional material, as it could cause confusion and give the public the incorrect impression that a charity is officially endorsed or organisationally linked to the NHS, as many hon. Friends have said. As I have mentioned, however, independent charities can seek approval to use the NHS logo, if they are working in partnership with it. An independent charity will often set up an agreement with a local NHS organisation to fundraise on its behalf. We have already heard some examples of close, long-standing links between charity organisations and the NHS, and I am sure that Members will be aware of many more in their constituencies. It is possible for a local organisation to use the NHS’s identity in a supporting position with respect to promotional and fundraising materials—on the proviso that there is a local agreement in place for the fundraising activity to benefit solely local NHS services.

It is fair to say that there has been some slightly wild speculation in the course of our debate about some of the far-flung places to which people might go, using NHS charity resources inappropriately. It is important to ensure that the association with the NHS is guarded. From a legal perspective, however, the amendment would make no change to the current position. The Secretary of State is the registered owner of a number of NHS trademarks. As such, the Secretary of State is already free to license trademarks to independent charities in accordance with his statutory powers and duties. Furthermore, as the registered trademark owner, the Secretary of State may set the terms of any such licence as he chooses, including specifying the notice period required for termination—an important power, as I think Members would agree. In some circumstances, it may be more appropriate to make provision for a licence to be terminated at shorter notice or immediately—where, for example, a charity is in breach of the licence terms.

On that important point, about which Members were rightly expressing a degree of concern, I hope I have been able to provide reassurance. I hope, too, that I have provided clarity as well as reassurance on some of the other amendments.

[Mr Rees-Mogg]

May I ask the Minister about one further point? When the NHS logo is licensed to small charities, I hope the process will not be too bureaucratic or onerous for them and that the application of the regulations will not be too pettifogging.

[Jane Ellison]

My hon. Friend is wholly consistent on this issue. Since he came here in 2010, I have been delighted to hear him stand up on many occasions for people who find overbearing state bureaucracy at either the national or local level. He seeks to ensure that any such bureaucracy is always light touch and appropriate. He rightly seeks reassurance and I think I can give him that. We would never seek to make the process overbearing. It would obviously be inappropriate, given that the central drive of the first part of this important private Member’s Bill is to bring clarity and to avoid double-regulation. It would be nonsense if any aspect of what we have discussed this morning added to the bureaucratic burden. We are trying to head in an entirely different direction—one of which I hope my hon. Friend, given his long-standing role as a champion in this House, will approve.

Tobacco Products (Standardised Packaging)

Debate between Jacob Rees-Mogg and Jane Ellison

Thursday 3rd April 2014 Commons Chamber

[Jane Ellison]

Once the Government have made a final decision—and in the event that that decision is to proceed and it is approved in this Parliament—there will be a transition period, as there always is with any tobacco regulations. Because we have not yet made a final decision, we have not decided what that period will be, but there would always be a sell-through period—that has been the precedent set in the past. We are not able to be absolutely definite at this point because of that sell-through period, but I am happy to talk to the hon. Lady about previous sell-through periods for similar legislation.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I thank the Minister for making it possible for Back-Bench MPs to go to the Ministry to read the report this morning. That was a great courtesy and was helpful to parliamentary scrutiny. I bring to her attention two points from that report. First, Sir Cyril Chantler notes that it is

“too early to draw definitive conclusions”

from what has happened in Australia. Secondly, in paragraph 4.21, he says that the research that has been done has been based on “stated intentions” and that those are known to be ones that have to be used with care. He says:

“This caution is justified, and to that extent the findings are essentially indirect and ‘speculative’.”

As the Government may be taking away a freedom from the British people, ought they not to be more certain of their ground than they can be of the ground they currently have from Sir Cyril Chantler?

[Jane Ellison]

The Government are not proposing to take away anyone’s freedom. Our tobacco control measures aim to prevent children from taking up smoking in the first place, which is quite a different thing. On my hon. Friend’s detailed point, Members of Parliament will, like anyone else, be able to make submissions to the final consultation. Once Members have had the chance to read the report thoroughly, any submissions they may wish to make will, of course, be most welcome and they will be considered.

Budget Resolutions and Economic Situation

Debate between Jacob Rees-Mogg and Jane Ellison

Friday 22nd March 2013 Commons Chamber

[Jacob Rees-Mogg (North East Somerset) (Con)]

The Budget shows that this Government’s policies are beginning to work in the context of what Governments can realistically do to help an economy. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) suggested a fantasy world in which Governments can send a Chancellor to the Chamber on a Wednesday morning to press a growth button and introduce a new policy that will suddenly do this, that and the next thing. That is what some rather poor economists thought in the 1960s, but they have been proved comprehensively wrong. What Governments can do is set the framework within which businesses and individuals can lead economic growth. Governments cannot of themselves—they even failed to do this in the Soviet Union—create real growth just by the fiat of the Government.

How can we see that the Government’s policy is beginning to work? Two crucial statistics are now available. The first is the reduction in Government spending—the cut from 47.4% of GDP to 43.6%. That is a substantial reduction in the Government’s share of the nation’s income. It has taken some years to achieve and it needs to be reduced further, because, on average, it is very hard for Governments to get more than 38% of GDP in taxation—if it remains at 43%, there will still be a big deficit—but it is a huge move in the right direction to create stability in the economy, which will then allow businesses and individuals to lead economic growth.

[Jane Ellison]

Does my hon. Friend therefore share my surprise that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) said from the Opposition Front Bench earlier that the Government were making no progress in rebalancing the economy?

[Jacob Rees-Mogg]

Opposition Members are talking about their new path. There was a Shining Path in one country at one point, but that was not very successful, although the Opposition are probably looking for the Via Dolorosa. We are definitely making progress.

I want to pick the hon. Member for Glasgow North East (Mr Bain) up on his wonderful reference to the 1930s. I was pleased that he reminded us of our splendid slogans, which I will certainly use in my election campaign. I think that this was a “Safety First” Budget, and quite right too. What the country needs is genuine prudence, rather than the prudence of the late ’90s and early 2000s.

Lawful Industrial Action (Minor Errors) Bill

Debate between Jacob Rees-Mogg and Jane Ellison

Friday 22nd October 2010 Commons Chamber

[Jacob Rees-Mogg]

My hon. Friend makes an extraordinarily good and wise point. This would have been a better Bill if it had sought to raise that cap and made unions responsible for their unlawful errors.

[Jane Ellison (Battersea) (Con)]

As I might not get the chance to make my own contribution, I wonder whether my hon. Friend shares my concern that, throughout this debate, this new concept of “substantial compliance” has not been properly addressed. It has been introduced to us in this small, “minor-errors Bill”, but it is actually a big idea and quite a concerning idea. However, at no point has anyone on the Labour Benches risen to make any attempt at giving us a definition. This debate would have been a great deal more substantial had someone attempted to put some flesh on the bones of that small phrase.

[Jacob Rees-Mogg]

My hon. Friend is spot-on. We had a discussion about that on this side of the House. My hon. Friend the Member for Dover (Charlie Elphicke) elucidated for us what was meant by “substantial”, and said that in law, it meant an 80:20 level. I am not lawyer, but I was interested by that.