Finance (No. 3) Bill

Debate between James Cartlidge and Mel Stride

Committee: 2nd sitting: House of Commons
Tuesday 20th November 2018 Commons Chamber

[Mel Stride]

As I have already said, not only do the wealthiest in our society pay a very large proportion of all tax, but under this Government we have seen significant increases in the national living wage. It rose by 4.4% last April, and through the Bill—I am proud to say—we are putting on to the statute book an increase next April of 4.9%. That is well in excess of inflation and will help the very people that both our parties are committed, in our different ways, to assisting—although our measures are more practical than those suggested by the Labour party.

[James Cartlidge (South Suffolk) (Con)]

On the point about the higher rate, it was my experience as an employer that if, say, a member of sales staff paying basic rate tax did very well in a given month, got commission or a bonus and as a result experienced a sudden, sharp increase in their tax that month, it reduced the incentive on them next time. I welcome the changes to the higher rate because of the impact on incentives and therefore on productivity and so on.

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[Mel Stride]

The hon. Gentleman will, of course, be very aware of the devolution of various elements of our tax system to Scotland, and the issue he identifies is fundamentally driven by the different relative rates of taxation in Scotland and in the rest of the United Kingdom. I would argue that it is incumbent upon the Scottish Government to do as the UK Government do where these matters are reserved, which is to keep taxes as low as possible. I know that Conservative Members representing Scottish constituencies are most keen to deliver that for their constituents.

As we announced at the autumn Budget in 2017, the Government are legislating in this Bill to tax income from intangible property held in low-tax jurisdictions to the extent that it is income that relates to UK sales. Today some large multinationals are able to unfairly reduce their tax bill by arranging to hold their intangible property in offshore entities. That is unacceptable, and we are now going further to level the playing field. Clause 15 requires multinationals that continue to earn intangible property income in low-tax jurisdictions to pay UK income tax on the proportion of that income that relates to UK sales.

Tax avoidance is not limited to large multinationals of course; businesses of all shapes and sizes attempt to unfairly shift UK profits to jurisdictions where they expect to pay less tax or perhaps no tax at all, so clause 16 introduces carefully targeted anti-avoidance rules to prevent these UK businesses from avoiding UK tax by shifting their profits to lower-tax jurisdictions. The clause targets contrived arrangements that, in broad terms, aim to avoid tax by transferring the profits of a UK’s business offshore in a way that would not be agreed between independent parties.

[James Cartlidge]

I very much agree with my right hon. Friend on this point. Is it not also true that our small and medium-sized enterprises, particularly those that are currently struggling, perhaps including high street businesses, do not have a cat in hell’s chance of running such schemes? They do not hide their profits and they do not mix and match around territories, so we need a level playing field.

[Mel Stride]

My hon. Friend is absolutely right. The tax avoidance activities that I am describing are way beyond the reach of many businesses of a certain size up and down the country. Thinking particularly of our high street businesses, we have a duty to ensure that fixed costs in the form of taxes represented by business rates are reduced to the extent that they can be, and the Chancellor was able to announce a 30% reduction in business rates for those smaller retailers that typically populate our high streets. That was an extremely important move as we work, through our future high streets fund and other approaches, to enable our high streets to transition and become more vibrant and successful places.

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[James Cartlidge]

It is always interesting to hear attacks on capitalists from this side of the House. I simply say in terms of the way the property market has gone that we have often focused in the debate on housing on increasing the supply of homes—the statistics just published on new housing supply are incredibly positive—but I have been a mortgage broker and involved in the property sector, and I remember what happened in the wake of the crunch. The impact of fiscal and monetary policy and the stimulus we have had, and measures that have encouraged inward investment, have also been detrimental. We must not forget, as many people might, that in 2011-12 when the euro was facing an existential crisis—who knows, at some point in the future that might well return—huge inflows of capital came into UK residential property, particularly in London, pushing up prices and impacting on first-time buyers.

Having covered that specific point, I welcome anti-avoidance measures in this area. We need a level playing field, and not just in the same way that other anti-avoidance measures give a level playing field for small businesses; we need them for first-time buyers and those in Britain seeking to get on to the housing ladder. I support these measures and the others in the Bill.

[Mel Stride]

We have had a good, rounded and full debate, and I thank all Members for their contributions. I wish to touch briefly on the amendments and new clauses moved this evening. New clause 5 calls for a review of the impact of the clauses in this group on child poverty, on households at different levels of income, on those with protected characteristics and on the different parts of the United Kingdom. As I have stated, the Government already provide impact and distribution assessments and analysis in the Budget, as well as tax impact information and notes on individual tax measures.

Oral Answers to Questions

Debate between James Cartlidge and Mel Stride

Tuesday 27th February 2018 Commons Chamber

[Mel Stride]

As the hon. Gentleman will know, the devolution of ADT has been delayed after consultations between ourselves and the Scottish Government. Both Governments are satisfied with the arrangements. As for Ryanair, I believe that part of the announcement was also that the company would be extending the number of routes out of Edinburgh airport.

[James Cartlidge (South Suffolk) (Con)]

If we want a sustainable rise in wages, we will need higher productivity. Does my right hon. Friend therefore welcome the recent improvement in the figures?

Finance (No. 2) Bill

Debate between James Cartlidge and Mel Stride

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Mel Stride]

The hon. Gentleman raises an interesting idea, but I would argue that that is already effectively in practice in the form of the post office: post offices are able to deal with the customers of the major banks, to take cash, and to offer banking services—albeit not the full range, but certainly the most basic and most important to local communities—and, as I said earlier, there are more than 11,500 of them across the UK.

[James Cartlidge (South Suffolk) (Con)]

All of us who represent rural constituencies are concerned about the issue of access to bank branches and closures, but does that not mean that there is an extra onus on providing access to fast broadband in rural areas so that people can access online banking? To that end, should we not welcome the announcement in The Sunday Times that there will be further help this week for speeding up broadband in the most hard-to-reach rural areas?

[Mel Stride]

My hon. Friend raises an important point about connectivity, particularly in rural areas, including in constituencies such as mine where making sure there is good broadband is often one way of reducing sparsity and people being cut off from each other, and that is why we have invested so heavily in that area.

These changes are expected to increase the additional tax contribution from banks by more than £4.6 billion over the current forecast period to 2022-23.

Paradise Papers

Debate between James Cartlidge and Mel Stride

Monday 6th November 2017 Commons Chamber

[Mel Stride]

As the right hon. Gentleman knows, there are many reasons why individuals use trusts. It may be that I want a trust for my children and I do not want it to be known publicly exactly how that trust will operate, for reasons of confidentiality. People may use overseas trusts because they are looking at dollar-denominated trading and need a jurisdiction in which that occurs. There is a whole variety of reasons. The idea that every time the word “trust” is mentioned it suggests something grubby or illegal is plain wrong.

[James Cartlidge (South Suffolk) (Con)]

With the tax gap at a record low and corporation tax in this country among the lowest in the industrial world, does it not confirm that we have achieved the key balance of a tax system that is both competitive and fair?

[Mel Stride]

My hon. Friend is correct. We have brought the corporation tax rate down from 28% to 19%, and it will go down further to 17%. The consequence is that we are raising twice as much corporation tax as we did in 2010.