Oral Answers to Questions

Jane Ellison Excerpts

Tuesday 25th October 2016 Commons Chamber

[The Financial Secretary to the Treasury (Jane Ellison)]

In negotiating double taxation treaties, the UK’s objective is to reach an agreement that allocates taxing rights on a basis that is acceptable to both countries.

[Patrick Grady]

Restrictive tax treaties inhibit the ability of developing countries to spend money on public services, such as schools and education. Research from ActionAid shows that, along with Italy, the UK has the highest number of such treaties. Is the Minister willing to work with the Department for International Development to change that?

[Jane Ellison]

I disagree with the hon. Gentleman. In fact, double taxation treaties help developing countries. They often remove uncertainty about the way in which businesses choose to make investments, and they open up the route to fairer and more open trade. The majority of the UK’s double taxation treaties are based on the OECD model double taxation convention, and we work very closely with countries to reach mutually acceptable treaties.

[Mr Sharma]

What plans does the Minister have to carry out assessments of the impact of the UK’s tax treaties on developing countries, and will her Department offer poorer countries the opportunity to renegotiate treaties that do not do enough to support their development?

[Jane Ellison]

As I have said, there is a rolling programme of renegotiation to make sure that treaties reflect modern standards. More broadly, the UK has a very proud record on capacity building in this area. We lead international efforts to support developing countries in tax capacity building. One example is that DFID funds the Global Forum, the World Bank and the OECD to provide technical assistance to partner countries. We can be proud of that record.

[Charlie Elphicke (Dover) (Con)]

In negotiating double taxation regimes with developing and advanced nations, will the Minister look at transfer pricing in terms of establishment provisions so that we can broaden the tax base and stop the likes of Apple, Amazon and Google gaming our tax system?

[Jane Ellison]

The UK is committed to ensuring that UK companies pay a fair share of tax in the countries in which they operate. On all the wider aspects of international tax fairness, I reiterate that the UK has taken a very strong stance across the board on a number of issues. I am always happy to speak to my hon. Friend about this issue because he is very much an expert, and I would welcome his views on all such issues.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

3. What fiscal steps he is taking to support the manufacturing industry.

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[Christina Rees (Neath) (Lab/Co-op)]

10. What steps his Department is taking to compensate people affected by incorrect withdrawal of tax credits as a result of errors by Concentrix.

[The Financial Secretary to the Treasury (Jane Ellison)]

If anyone feels their tax credits have been incorrectly withdrawn owing to errors by Concentrix, they should urgently contact Her Majesty’s Revenue and Customs, which will review all complaint cases and will, and indeed does, pay redress where appropriate.

[Christina Rees]

Labour welcomes the cancellation of the Concentrix contract and the fact that it will be administered in-house by HMRC staff. Will the Minister reassure the thousands of single parents and families, many in my Neath constituency, that their tax credits erroneously stopped by Concentrix will be reinstated immediately so their children can be kept safe and warm and not go unfed as winter approaches?

[Jane Ellison]

The hon. Lady is absolutely right to draw the House’s attention to the importance of prioritising vulnerable claimants. HMRC held a further drop-in for colleagues recently, on 19 October; it was attended by 15 Members, and a number of complaints and issues were raised, which we are on the way to resolving.

On restarting claims, the key is to get the right information. HMRC has taken back a vast number of cases, and I will say more about this tomorrow. The priority is to get the right information, to get claims started again as soon as the facts are established.

[Helen Jones (Warrington North) (Lab)]

When the Minister wrote to me after I asked a previous question, she said:

“Amounts to be paid to the supplier are reduced if actual performance fails to meet standards set in the contract.”

Does that include penalties for withdrawing tax credits when they should not have been withdrawn?

[Jane Ellison]

The terms of the contract between HMRC and Concentrix are obviously in the public domain, and it is right that when performance is not as per the contract there are associated deductions, but I will be in a position to give the House more information about the contract in tomorrow’s Opposition day debate.

[Hannah Bardell (Livingston) (SNP)]

A number of my constituents have been affected by this issue, not least a frontline police officer who had her benefits withdrawn, which meant her childcare could not be paid and she was potentially not going to be able to go to work. Luckily, my office intervened and we were able to get her benefits, but what is the Minister going to do to compensate people for upset and unjust treatment?

[Jane Ellison]

There are two points here. First, as I have said, if people feel their tax credits have been incorrectly withdrawn because of errors they should contact HMRC, which will review that and redress can be made. Secondly, customers can ask for mandatory reconsideration if they do not feel that their circumstances have been correctly identified. Sometimes that is because people do not send through the right information.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

11. What assessment his Department has made of the potential effect on the economy of the UK no longer having access to the single market.

--- Later in debate ---

[Suella Fernandes (Fareham) (Con)]

T2. Kevin Lancaster and Simon Davis started their business, Aqua Cooling, from scratch in Fareham in 2000, and it now generates £1.7 million in profit and is a leading industrial cooling firm. Last week, the Institute of Physics awarded Aqua Cooling its business innovation award for its innovate application of physics to generate jobs and profit. Will the Chancellor join me in congratulating Aqua Cooling and outline what the Government are doing to support research and development, so that other self-starters like Kevin and Simon can grow their businesses?

[The Financial Secretary to the Treasury (Jane Ellison)]

I think that all Treasury Ministers would be delighted to congratulate Aqua Cooling on the innovation award it has won. As has been said, the Government have committed to supporting research and development in British businesses, providing one of the most generous R and D tax credit schemes in the world to UK small business. I am delighted to say that it was claimed by more than 18,000 small and medium-sized enterprises in 2014-15.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

T7. Why does the Chancellor believe that corporation tax receipts collapsed in September 2016 to their lowest level since 2009? Why does he believe borrowing will overshoot the Office for Budget Responsibility’s forecast by an extra £17 billion this financial year?

--- Later in debate ---

[Nigel Huddleston (Mid Worcestershire) (Con)]

T5. . Will the Chancellor provide an update on what the Government are minded to do about air passenger duty, in response to impending APD changes in Scotland?

[Jane Ellison]

The Government are reviewing the potential options to support regional airports, following the discussion paper that was published last year, and of course we will set out full details of our response in due course. We received 53 responses to the consultation. They were good, constructive, valuable responses and we are looking carefully at them.

[Derek Twigg (Halton) (Lab)]

What is the Chancellor’s assessment of the effect of inflationary pressures on the prices of goods and food over the next 12 months?