Finance (No. 3) Bill

John Lamont Excerpts

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

[Patricia Gibson]

Again, my hon. Friend points to the lack of accountability and the hotchpotch—the rushed contracts put together by PFI, which benefited somebody, but did not benefit our local authorities or our children, and they do not benefit the patients in hospitals.

There is no better example of the need for new clauses 14 and 15 than North Ayrshire Council in my constituency. This Labour-run council had a PFI process that was severely flawed and was uncovered by local journalist Campbell Martin. Some have even insisted that criminal activity was involved, since while the council appeared to have two bids for construction projects—therefore seeming to provide the genuine competition required by EU procurement rules—in fact, the evidence suggested that one of those bids was from a subsidiary of the other company submitting a bid, so there was actually no competition at all. The Labour council was made aware of this before the contracts were awarded, but awarded them regardless. In the opinion of one ex-detective, the evidence showed

“criminality from start to finish.”

Another former officer stated that a common law crime of forgery and uttering should have been pursued. Right there we see the need for more transparency. I for one would like to see more transparency on the tax arrangements of such companies, as this is very much in the interests of the UK’s public finances.

All this information relates to a public-private contract now costing taxpayers over £1 million every month in North Ayrshire. Add to that the schools that are crumbling across cities such as Edinburgh, and we have real questions about these PFI firms. For projects of a capital value of £4 billion in Scotland, we will repay £22 billion, with our schools spending 8% of their budgets on paying off these Labour PFI debts. Can we really allow any lack of transparency around the tax affairs of such companies?

It is absolutely essential that there is more transparency around how UK public finances finance public sector projects. The tax affairs of these companies and their wider financial affairs need to be open to scrutiny because they build or have built our public assets. I urge the Committee to support new clauses 14 and 15.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

I want to discuss the clauses in the Bill that seek to tackle tax avoidance and evasion. Combined, these measures will seek to raise billions of pounds for our public services by further clamping down on this serious matter. My hon. Friend the Member for Walsall North (Eddie Hughes) identified clearly that these measures will raise much needed extra money for our public services.

Rather than raising taxes for businesses, this Government are focusing on making sure that tax liabilities are paid. They have a strong track record of clamping down on those seeking to avoid paying their fair share. This Budget builds on that track record, with no fewer than 21 measures to protect revenue and bring in more tax by tackling fraud, avoidance and unfair outcomes.

On a related point, I very much support the introduction of a new digital services tax, which is not technically a measure designed to tackle tax avoidance, but which will nevertheless make our tax system more fair and fit for purpose in the digital age. The Chancellor is right to try to find a global solution, but in the meantime this measure is a step in the right direction that will make the tax system fairer for small businesses in high streets in my constituency in the Scottish borders that are struggling to compete with the likes of online giants such as Amazon. Of course, in Scotland, these businesses are also struggling with the high tax regime imposed on them by the SNP Scottish Government in Holyrood.

Other clauses in the Bill, such as those to ensure that HMRC is a preferred creditor in business insolvencies, that more tax is paid to the public purse and that we crack down on insurance companies routing services through offshore territories, are certainly welcome.

[Jim McMahon]

Does the hon. Gentleman accept, though, that the trade-off with the digital sales tax and the relief being offered to some premises in town centres just is not enough? Take, for instance, the former Textiles Direct unit in my local shopping centre, which has been empty for some time, but has a rateable value of £500 per square metre. Compare that to the Amazon warehouse near Manchester airport that pays just £44 per square metre. How can it be right that the gap is so large?

[John Lamont]

Clearly, I cannot speak about the circumstances in the hon. Gentleman’s constituency, but these measures are clearly a step in the right direction. I know the number of businesses in my constituency that contact me. They are competing with online businesses and other digital platforms to provide the same or similar types of services. It is just not fair when businesses are able to run very profitably, making a big turnover from a garage or attic, when at the same time the same service or shop on the high street is paying significantly higher business rates. Of course, in Scotland, we have the additional challenge of the additional taxes that businesses are having to pay through the Scottish Government’s high-tax agenda.