Growth and Infrastructure Bill

John Redwood Excerpts

Tuesday 23rd April 2013 Commons Chamber

[Michael Fallon]

I am very happy to ensure that my colleagues at the Department for Communities and Local Government will discuss that with the LGA, if that will be helpful.

Let me now turn to—

[Mr John Redwood (Wokingham) (Con)]

Will the Minister give way?

[Michael Fallon]

Of course.

[Mr Redwood]

I am grateful to the Minister for giving way, and he need not look so heavy-hearted, as I am going to say that I greatly welcome the changes, and that many Members on the Government Benches feel the Government have listened and come up with a sensible proposal. Will he just confirm that existing permitted development rights are not in any way affected by this new procedure, and that they are still there in perpetuity for people to use without any hassle?

[Michael Fallon]

Yes, I can confirm that, and I can also assure my right hon. Friend that I was not heavy-hearted; I was simply keen to move on to the employee shareholder clause, and I was wondering how long I was going to be occupied in explaining how my right hon. Friend the Secretary of State for Communities and Local Government had fulfilled his commitment last week to listen to the concerns expressed in this House and to come forward with what I suggest is a very reasonable compromise.

Let me now, finally, turn to the employee shareholder clause. It establishes a new employment status between employee and worker. The Government have always been clear that this measure is entirely voluntary, and that it is open to both individuals and companies to use it if they choose to do so. I emphasised that again in our debate a week ago. In response to concerns expressed by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and peers in the other place, last week I reassured both Houses about the wholly voluntary nature of this new status. I made a commitment that no one can be forced to apply for, or to accept, an employee shareholder job. I announced that the Government had revised and clarified the position for those claiming jobseeker’s allowance. The position now is that jobseekers cannot be compelled to apply for or accept an employee shareholder job if they do not consider it right for them.

--- Later in debate ---

Let me emphasise what Lord Forsyth said in the other place. He talked about the £1 billion loss to the Treasury in tax. This is the Chancellor’s pet project that loses the Treasury £1 billion and does absolutely nothing for growth. The Bill is supposed to be a growth Bill; it is nothing like it.

[Mr Redwood]

I am getting confused. The hon. Gentleman first says that the proposal is so awful that no one will implement it, and then that its effect will be £1 billion of lost tax. It cannot be both. Which one does he really think?

--- Later in debate ---

[Ian Murray]

We are back to the same point from the hon. Gentleman. He still refuses to recognise the equation here. That may all be correct, but at the same time fundamental rights still have to be given up. Indeed, those safeguards in the 2006 Act have been wrapped around by many companies in terms of the dilution of share ownership.

[Mr Redwood]

I am interested in the hon. Gentleman’s attack on the idea of some tax privilege in the scheme. I imagine that he is a member of the House of Commons pension scheme, and there is tax relief on all contributions that he makes into the scheme, and full tax relief on gains and income in the fund. That seems perfectly reasonable. How does that differ from the tax advantages of this scheme?

[Ian Murray]

Being a member of the House of Commons pension scheme does not mean that I give up my rights at work. The equation is not there. I am not even sure whether the right hon. Gentleman has spoken in favour of these proposals. Does he support them? I am not sure that he does.

[Mr Redwood]

I am asking about tax avoidance. The hon. Gentleman has just condemned the scheme as tax avoidance. I am asking whether he is against all tax avoidance, or does he practise it as well?

[Ian Murray]

It is a little disingenuous to ask a Member of the House who is at the Dispatch Box whether he practises tax avoidance. That is stretching it a bit far. I am merely quoting from the Treasury’s 2012 policy document, which says that:

“It is hard to predict how quickly the increased scope for tax planning will be exploited”.

The Institute for Fiscal Studies says that there will be a whole new avoidance industry in terms of the capital gains tax on these shares, and in terms of PAYE and national insurance. If Government Members do not believe me, they can listen to what Lord Forsyth—as a Scottish Member of Parliament, I never thought that I would agree so much with him—said last night in the other place:

“I remain concerned as to whether the estimate made that this could result in more than £1 billion disappearing in tax-avoidance schemes is correct. It is not clear to me whether the Treasury has found ways of ring-fencing this scheme, which provides for up to £50,000 of capital gains tax to be relieved, and whether this could not be used as a great tax-avoidance scheme.”—[Official Report, House of Lords, 22 April 2013; Vol. 744, c. 1257.]