Autumn Statement

John Stevenson Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

I think the right hon. Gentleman is being a little unfair about the autumn statement, but I agree with the challenge he presented to us—how to improve the productivity of the United Kingdom. The measures we take to support postgraduate loans and to support apprenticeships, alongside the education reforms at primary and secondary level that my right hon. Friends the Education Secretary and her predecessor have implemented, are all designed to try to improve the skills in the country. We are all working together to try to address the productivity challenge that we face. Frankly, we faced it for a long time in the past, as our productivity lagged behind some of our European competitors, let alone that of the rest of the world. We need to do more. That can be achieved in London partly by investments in infrastructure, including those in the Tottenham area.

[John Stevenson (Carlisle) (Con)]

For the people of Carlisle, average wages and house prices are lower than the national average. The announcements on the raising of the personal allowance and the stamp duty reforms will be extremely welcome. I fully support them. Does the Chancellor agree that when it comes to discussions about the northern powerhouse, and particularly about local government and civic reform, it is also vital that Carlisle and Cumbria are not forgotten?

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 4th November 2014 Commons Chamber

[Andrew Stephenson (Pendle) (Con)]

10. What progress he has made on his policy to create a northern powerhouse for the UK economy.

[John Stevenson (Carlisle) (Con)]

13. What progress he has made on his policy to create a northern powerhouse for the UK economy.

[The Chancellor of the Exchequer (Mr George Osborne)]

In July I set out my plan to build a northern powerhouse to connect the great cities of the north with the counties that surround them—and, of course, north Wales—by investing in transport science, and by devolving powers from Westminster to elected city mayors. We now have plans for High Speed 3 and for major new science investment. Yesterday I signed an historic agreement with the civic leaders of Greater Manchester to create the first directly elected metro-wide mayor outside London, with powers over transport, economic development and policing. I hope that Manchester will be the first of many cities to take advantage of the greater devolution of powers. Today I have opened my door to discussions with any metropolitan authority that wants to adopt a new model of governance. All that is part of our ambition to reduce the decades-old gap between north and south, which is central to our long-term economic plan.

--- Later in debate ---

[Mr Osborne]

Crucial to the vision of the northern powerhouse is not just supporting the great cities of the north, but ensuring that they are connected with the towns and counties surrounding those cities. We are investing hugely to improve transport links in Lancashire. My hon. Friend, who is such a champion of his constituency, has raised with me the Brierfield Mill site, which is now called Northlight. We are taking a close look at what we can do to redevelop the area and bring more jobs to his constituency, and that is due to his campaigning efforts.

[John Stevenson]

The idea of a northern powerhouse is welcome, as is the introduction of an elected mayor, which I am sure will provide real leadership. However, it is vital for smaller places such as Carlisle to benefit as well, which will mean ensuring that the next generation has the right skills to enable local businesses to succeed and prosper. How will the Chancellor ensure that that happens?

[Mr Osborne]

Thanks in part to the efforts of my hon. Friend and the support he has given to investment in Carlisle, we have seen a 34% fall in the unemployment claimant count in Carlisle in the last year alone. We are also devolving more responsibility for setting the skills agenda to local businesses, so we can have skills that are specific to the Carlisle area. I am always happy to talk to my hon. Friend and to meet people he would bring to see me, to see what more we can do to make sure that Carlisle is part of the strong economic revival of the north of England.

Consumer Rights Bill

John Stevenson Excerpts

Tuesday 13th May 2014 Commons Chamber

[Stella Creasy]

Our presumption is that the fees would then be taken on by the landlord and taken as part of the tenancy agreement. Our approach would resolve the problems we are seeing for tenants and the conflict of interest over whom the agent would act for. Our proposal is about making sure we deal with that conflict, particularly how for landlords and for tenants it creates a series of perverse incentives whereby both can be charged for the same service.

[John Stevenson (Carlisle) (Con)]

The problem is that if the letting agency loses an income it will seek to get it from elsewhere, so it is likely to increase its charges to the landlord. The landlord will then seek to recover that money, and from whom will the landlord seek to recover it? From the tenant.

[Stella Creasy]

I simply do not accept the picture the hon. Gentleman is painting. Scotland has banned fees on tenants, and the experience there has been an increase in the number of letting agents and no effect on the rents people are paying. The evidence shows that, as with the payday lenders, when we give tenants the muscle to remove this fee, the market shapes up. We have not seen an increase in the fees that tenants are facing; nor have we seen an exit from the market. Some of the fears the hon. Gentleman might have, which I understand, are not well founded, because a lot of the fees tenants are being asked to pay are not indicative of a service being provided; they are indicative of a profit-making machine. We are trying to deal with the detriment caused by the ability of agents to charge fees to two parties at the same time. By making this a fee for the landlord, it is clear whose interest the agent is acting in.

As I say, we have dealt with the particular issue here, because we have listened to the landlords and letting agents who have expressed concerns about tenants who may not be what they seem. In that instance, there would be a case for being able to charge a fee to the tenant which would be refunded, but the alternative of letting this practice continue and seeing the kind of fees that we are seeing, and therefore the problems that are being caused, is also unsustainable. I hope that Government Members, particularly those who have now recognised there is a problem with the fees in themselves, will go that stage further and recognise that there is a problem with this form of double-charging, support our proposals and learn from the experience in Scotland on this issue.

As I am conscious of the time, I shall move on; I appreciate that there are a number of Members who wish to speak in this debate. I am sure that the hon. Member for East Hampshire, who has made many useful contributions this afternoon, will get to speak in the following debate.

I briefly want to speak to amendment 6. It may come as a surprise to some to see the Government resisting the work of the Federation of Small Businesses, which is trying to help small businesses that are struggling with their consumer contracts. Members in this House may have first-hand experience of that, as we are, after all, small businesses and will have dealt with business-to-business contracts, and many may not realise that they have different levels of consumer protection as a result.

The FSB has recently published a report on small businesses which points out that it makes much more sense to give micro-businesses the same consumer protection as private individuals. After all, it is unreasonable to expect a micro-business to have the same level of legal qualification and expertise to deal with a contract as that of a larger body, and that is what amendment 6 addresses. I note that the FSB has given its support to this amendment. I was surprised when the Minister said earlier that the FSB did not support giving consumer rights to businesses. That has not been the briefing that we have had from it; indeed, it supports this amendment. Will the Minister set out when she expects to give small businesses the kind of consumer protection they need, because it will be one fewer worry for them?

I wish now to touch on some of the other new clauses. New clause 14 deals with Ofcom and switching. We certainly think this is a good idea, and we wish to see the Government following it through. I am sorry that the hon. Member for Shipley (Philip Davies) was not here earlier when we were debating new clause 3 and new schedule 1 and making it easier for consumers to be able to switch. We recognise that there are problems. It is unusual for the UK, by comparison with other nations, to have this issue, and it will be interesting to know whether the Minister is considering it.

I look forward to the hon. Member for Shipley making his case for new clause 13. I certainly agree that transparency is important. The laws governing animal welfare at slaughter, at both EU and UK level, require animals to be stunned before slaughter, but they make an exemption to that requirement for religious slaughter, which is carried out by members of the Jewish and Muslim communities.

We are concerned about whether this amendment has a significant effect on animal welfare and implications beyond that. In particular, we must ensure that our laws strike the right balance between concern for animal welfare, which many of us have, transparency for consumers and respect for the traditions of different businesses and different communities. We also recognise that a lot of work has already been done on this matter in the European Union, and it would be sensible to learn some of the lessons on the wider issues such as how goods and foods are labelled. It will be interesting to hear the hon. Gentleman’s views on that—perhaps not on Europe but on the research that is being done.

I am sure that the hon. Gentleman would not want to make a law that caused confusion in this area rather than clarity. He focuses on halal and kosher food, but the Opposition believe that respect implies an active attitude towards others rather than a passive attitude, and certainly our position is to seek proper engagement with all faith groups before we move forward on such a measure.

Let me turn now to new clause 15, which has been tabled by the hon. Member for Foyle (Mark Durkan). We supported it in Committee and would support it again. It is an incredibly important amendment and I urge Members to listen to what the hon. Gentleman has to say. We do not believe it is acceptable to leave it to consumers to know whether they have a death trap in their house.

Finally, I want to say a bit about Government amendments 14 to 20 and the very welcome U-turn that seems to have been made. In Committee, we were concerned that consumers could be left waiting many months for a refund, but the Minister suggested that the Government believed there were potential disadvantages of introducing a time limit that outweighed the benefits that such a change could bring. We suggested 30 days in which to get a refund, so I am absolutely delighted that the Government have gone one stage further and said that people should get their money back in 14 days. That gives me great hope that while the Minister may be saying “computer says no” at the moment to some of the things that we have been talking about today and in Committee, we will see further concessions in due course. We shall welcome them accordingly.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

What this—[Interruption.] The hon. Member for Islwyn (Chris Evans) should pipe down. What this Government recognise is that infrastructure relies on both public and private sector investment. The Labour party seems to have forgotten that the private sector is involved in delivering infrastructure. Total infrastructure investment in this country is higher in this Parliament than it was in the last.

[John Stevenson (Carlisle) (Con)]

T9. Individuals, households and businesses in my constituency must live within their means. Does the Chief Secretary agree that that is exactly what Governments need to do and that one of the reasons for our current budget deficit is the fact that the previous Government did not run a surplus in the good years?

[Danny Alexander]

I wholeheartedly agree with my hon. Friend that Governments must live within their means. It is because the previous Labour Government did not do so that we have had to make so many difficult decisions to get this country back on the right track, which is what we are doing.

Autumn Statement

John Stevenson Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

I do not have the specific answer with me, so I will write to the hon. Lady.

[John Stevenson (Carlisle) (Con)]

I congratulate the Chancellor on a statement that will provide support for business and employment. If my city of Carlisle is to grow and prosper, businesses need to succeed, and if the young people of Carlisle are to share in that success, they need employment. Does the Chancellor agree that the abolition of the jobs tax for under-21s gives businesses in Carlisle an incentive to employ the young?

[Mr Osborne]

I specifically mentioned in my statement the work that my hon. Friend has done on behalf of his constituents in Carlisle to support important local large employers such as Pirelli. Thanks to his campaign, we are now able to abolish the jobs tax for people under the age of 21, which will help young people in Carlisle to obtain jobs, but we are also helping those who want to go to college. I congratulate my hon. Friend on standing up for his constituents.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 25th June 2013 Commons Chamber

[Greg Clark]

Like you, Mr Speaker, I take a great interest in the hon. Gentleman’s speeches in this House, and I know that he is deeply interested in fiscal policy. Since the beginning of the year, he has spoken 102 times on the subject of public spending cuts, but in each and every intervention he has opposed spending cuts. To cut the debt, we have to cut spending. He should learn that, and the Labour party should as well.

[John Stevenson (Carlisle) (Con)]

Does the Minister agree that one reason why our debt is such an issue is that the previous Government ran budget deficits in the good times as well as the bad and that the only way to reduce debt is to get the deficit down?

[Greg Clark]

My hon. Friend is absolutely right. We know that between 2001 and the time they left office, the previous Government trebled the national debt, yet when the shadow Chancellor was asked whether they were too profligate and had too much national debt, he said no. Labour’s new policy is the old policy: more spending, more borrowing, more debt. It is time they learned.

Financial Services (Banking Reform) Bill

John Stevenson Excerpts

Monday 11th March 2013 Commons Chamber

[John Stevenson (Carlisle) (Con)]

People talk about banking being a very dry subject, but this has been an interesting debate with different views and varying opinions that I have found enjoyable to listen to. I hope I can make a small contribution.

Historically and, indeed, even now financial services and the City have been, and are, a vital part of the UK economy. London in particular and the financial industry in general have made a massive contribution to the prosperity of this country.

London is recognised as one of the, if not the, pre-eminent financial centres in the world. London is a world city, partly because of its location, our language and our legal system, but also because of the financial industry. In our system, there is huge expertise and skill and many successful companies and businesses, not just banks, have their headquarters in England. It is a city that we should be proud of and a financial capital that we should not underestimate.

Through the financial sector and its successes, we have the most precious commodity of all—jobs, and not just in London but up and down the country. There are financial services in my constituency, Carlisle. It is skilled employment that is often well paid and it creates wealth and prosperity for many that goes beyond the financial industry into other aspects of our economy, such as law, accountancy and consultancy as well as other support industries, creating many jobs in the wider economy.

There is also taxation. We should not underestimate the substantial contribution to the public purse made by the financial sector. We might bash bankers, but taxes pay for public services and a high proportion of the tax take in this country comes from the sector. Bonuses are taxed, profits are taxed and those taxes go towards our public services. They make a positive contribution. The balance of trade supports our economy year in, year out. We would probably have a real crisis were it not for the invisibles that earn us considerable sums, compared with the manufacturing sector.

If this debate were taking place in 2007, we would probably be saying that everything in the garden is rosy and we would believe that nothing needs to change, but we know how different the situation has become. Banks became arrogant and thought they were invincible, Government became complacent—“No more boom and bust”—and where were regulators? It was a lethal combination and we all know what happened. In 2008 there was a failure of policy and regulation on a huge scale. Since 2008 we have been dealing with the fall-out of the previous Government’s failures. Arguably it is this problem, the banking problem, that is still holding back recovery. Since the bail-out there has been much discussion of what direction Government and our country should take in managing and regulating our banks and the banking sector.

We have various choices. We could do nothing and allow banks gradually to recover, carry on as they did before and hope that the banking crisis never happens again. Alternatively, we could split the banks completely—split retail from investment—and create a clear, absolute divide. We could help change the sector completely by creating smaller banks and more of them, in effect creating a banking sector where banks are small enough to fail. Finally, we could pursue the middle way, which is in effect what the Government propose. All these options could be equally correct. They may be different solutions to the same issue, but who knows if one of them might be more successful than the others? However, there appears to be broad consensus that there should be some form of divide within banking services. I therefore support the Government’s proposals as they have a certain degree of flexibility within them, allowing for changing circumstances.

We all acknowledge that the financial sector is critical to the success of businesses up and down the country. Central to that is the success of the banks themselves. The goal for Government must be to ensure that the country has financial stability at the heart of the banking sector. Clearly, stability must be the priority. We do not want our recent experience to be repeated, but we should not lose sight of other considerations for Government: lending to businesses and consumers, which is vital to growing our economy; choice through competition; awareness of the risks to the health of the nation’s finances; and the need to ensure stability and strength in the wider economy. I appreciate that some of these issues are not relevant to the Bill and do not require legislation. Nevertheless, it is important that the Government do not lose sight of the other aspects that support a strong and vibrant economy.

The Government clearly take the issue of banking stability very seriously, and so they should. We have had the Vickers report, the Parliamentary Commission on Banking Standards and the Government’s response to them. We now have the Bill before us. The issue for the House is whether the Bill will achieve the Government’s aims and objectives, and whether those are the right solutions. In general, I support the direction of travel and the thrust of the Government’s aims. The concern, as ever, is the detail. The Bill is a skeleton. Much flesh still needs to be put on the bones. There is clear provision in the Bill for further orders and regulations, which the Minister touched on in his speech. I acknowledge that he will be making further amendments to the Bill and that he has indicated that he will be open-minded about amendments. That is to be welcomed, but to understand the Bill fully we need to see those orders and regulations to judge whether the effect is likely to be successful. I assume that that will be done in Committee. That was the indication that the Minister gave.

I appreciate that those on the Treasury Committee and on the commission have a much better understanding of the issues, but I would like to touch on three aspects of the Bill. First, a number of questions arise from the provisions relating to a ring-fenced body. Which banks will be affected? What will be the de minimis level? If there are going to be only a few such banks, can we name them? As for the reserve power to split up a group structure, the proposal is not for a general industry-wide reserve power, but for a specific power. Is this potentially nonsense if there are only a few ring-fenced banks? The same thing could be achieved by applying the specific reserve power to each of them. In some ways we want our banks to be small enough to fail and we want plenty of them so that they do not need to be ring-fenced.

What of the ring-fenced institutions themselves? They may be separate legal entities, but how independent will they be? What of the boards? Who will the directors be? Will they be entitled to be on the board of the subsidiary as well as of the parent company? How independent will they be? What of the employees? Who are they responsible to? Who will key and talented employees look to as their bosses? Will it be the parent company or the ring-fenced company that they are actually working for? They will obviously be considering their careers, and that could have an impact on their judgment.

What about the systems of the ring-fenced institutions—the computers, the customer information? How separate will these be from the parent company’s or those of the other institutions within the group? What about management? Will it be totally separate? It could be argued that even the buildings would have to be separated. Who has access to information and decision making? Human resources, systems and management issues need to be addressed to ensure that the whole structure of the proposals will work.

With reference to core services, the proposed primary legislation deals only with deposits. Is that it? What other services may be included or specifically excluded? I appreciate the need for flexibility, but we still need to have a clearer idea of the proposals or at least of the Government’s thinking. On the core activity, the acceptance of deposits, what about small and medium-sized enterprises and high net worth clients? What is the definition of an SME or of a high net worth client? That could mean different things to different banks and to different people. There are still many issues that need to be addressed so that we have a better understanding of what we are being asked to support and to ensure that we pass legislation that will work.

We all want to see a strong, stable and successful financial sector. Within that we want a robust and competitive banking industry, which is itself stable but able to finance and support the wider economy. Although I support the Government’s intentions in the Bill, I encourage the Government always to remember that a competitive market with low barriers to entry and sensible regulation robustly applied should always be at the centre of a successful banking and financial sector. That should be our goal and it should certainly be the goal of the Bill.

Tax Transparency (FTSE 100)

John Stevenson Excerpts

Wednesday 6th February 2013 Westminster Hall

[Stephen McPartland (Stevenage) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts.

Many Members over many years have spoken eloquently in this House about the differences between tax avoidance and tax evasion and how the lines between them have become blurred. Tax evasion is clearly wrong, illegal and unfair to the rest of society, because everyone else has to pay more in taxes to make up for those who do not pay their fair share. We cannot have mob rule and many Members are very much in favour of the positive contributions that large FTSE 100 companies make to the larger overall tax take.

Just before Christmas, there was an explosion of public interest after the Public Accounts Committee named and shamed some well known companies that use transfer pricing to offset their tax liabilities in the UK—basically, to avoid paying tax. I am aware of the strong argument that UK tax authorities could do more to enforce tax payments. The Government have done a lot of work on tackling tax avoidance—so much so that I fear that the general anti-avoidance rule that will be introduced might be too severe and end up penalising sole traders and small and medium-sized enterprises more than larger companies.

[John Stevenson (Carlisle) (Con)]

I am grateful to my hon. Friend for securing this important and topical debate. Does he agree that it is incumbent on us as legislators to ensure that tax legislation is robust but fair?

[Stephen McPartland]

My hon. Friend makes a valuable point, which has been put to me in the more than 60 responses I have received from FTSE 100 companies. I agree that we need to get the legislation right, but later in my speech I shall explain how there are more companies registered in Jersey than in the whole of China, despite tens of billions of pounds of trade with that country.

My interest in tackling tax avoidance stems from a meeting I had with Christian Aid supporters in my constituency last September, when the “tax justice” bus visited Stevenage. The tax justice campaigners believe that tax dodging by international companies costs the UK about £35 billion and developing countries an estimated $160 billion a year. Many of the FTSE 100 companies that replied to me questioned the figures, but, in reality, the figures are large, irrespective of the measure used. Imagine for a moment the dramatic difference such a huge sum of money would make, if it were available to invest in public services, infrastructure and other services essential for economic growth both at home and abroad.

There is growing anger and concern about the fact that some large companies are hiding behind complex accounting rules that may be strictly legal, but are considered to be unethical by the public. The problem of the missing billions in tax is not just a problem for the UK; it is worldwide, and it does the greatest damage to poor and developing countries that cannot stand up to massive corporations. ActionAid told of a lady selling beer in Ghana who paid more in tax than the large brewer in the facility next door. That large brewer’s parent company in the UK declared profits of £2 billion. Governments all around the world will agree with the sentiment of greater tax transparency—I know that the Minister agrees with it—but they will struggle to introduce it, because every nation competes in the global race.

I welcome the Prime Minister’s initiative to make tackling tax avoidance a priority when the UK takes over the presidency of the G8. He made strong references to a particular company needing to

“wake up and smell the coffee”.

I must be one of the few Members who does not have any such coffee chains in my constituency. The Chancellor, with whom I do not see eye to eye on many issues, has also agreed that aggressive tax avoidance is “morally wrong” and “abhorrent”. We have had the words; it is now time for action.

My first question to the Minister is, what plans do the Prime Minister or Chancellor have to convene a cross-Whitehall meeting with tax justice experts and campaigners to identify what a tax transparency policy would look like in practice? There is real concern and feeling that transfer pricing is at the heart of the problem, so what measures will the draft finance Bill include to create enforcement in respect of transfer pricing and put a stop to it?

As I mentioned, ActionAid commissioned interesting research in October 2011 into the use of tax havens by FTSE 100 companies. It found that the FTSE 100 companies at that time had 34,216 subsidiary companies, joint ventures and associates and that 38% of their overseas companies were located in tax havens. Ninety-eight groups had declared tax haven companies; only two groups, Fresnillo and Hargreaves Lansdown, did not. There were 623 companies registered in Jersey—a tiny island just off our shores—and despite our tens of billions of pounds of trade, only 551 are registered in China. ActionAid struggled to get the research and, like me, would like to see Companies House enforce sections 409 and 410 of the Companies Act 2006, so that information on UK-registered multinationals is more accessible to the public.

The Minister and Government have the best of intentions, but in the end, it will be up to the companies themselves to lead the way, and they will do so only if their customers—the British public—drag them kicking and screaming towards tax transparency and a fairer tax system for all. With that in mind, last November I wrote to the chief executives of all the FTSE 100 companies asking them individually whether they were willing to pledge their support for corporate tax transparency and whether they would support a new international accounting standard for country-by-country reporting.

The current international accounting standards require multinational companies to report accounts on a global consolidated basis only, which makes it incredibly difficult to know where taxable economic activities are occurring and where profits are declared. I gave the example a few moments ago of a lady in Ghana paying more in tax than a massive, multi-billion dollar, multinational company. Companies, particularly multinational corporations, move billions of pounds of profit between jurisdictions in order to reduce their tax bills, and large companies are allegedly manipulating their centres of interest through the use of holding companies, offshore accounts and intellectual property rights.

I am not saying that FTSE 100 companies are engaged in tax avoidance or aggressive tax planning; the point I am trying to make is that whether it is tax avoidance or tax evasion, illegal or immoral, the British public and most Members believe that it is wrong and should be stopped.

A recent inquiry by the Select Committee on International Development called for

“legislation requiring each UK-based multinational corporation to report its financial information on a country-by-country basis. Such information should include the names of all companies belonging to it and trading in each country, its financial performance in each country, its tax liability in each country, the cost and net book…of its fixed assets in each country, and details of its gross and net assets in each country.”

Some of the FTSE 100 companies that replied to my letters believe that there could be greater tax transparency. All agree that they are as transparent as they possibly could be and that people would not like them to be even more transparent because it would make their accounts more unwieldy.

I look at the extractive industries, the work coming out of America on the Dodd–Frank Wall Street Reform and Consumer Protection Act and the proposals for EU directives on transparency and accounting, and I wonder whether such legislation could be used for our multinationals. The extractive industries are being forced down a line of country-by-country reporting with more focus on transparency, because it has been felt over many years that they have not been as clear as they should have been. Do we need a more even playing field?

The only way to resolve the problem is to introduce greater transparency. Members will be pleased to learn that, in the interests of transparency, I have published all the responses that I have received on a website: www.taxchallenge.co.uk. The responses from over half the companies are online. With the responses, I have given people an opportunity to sign a petition to demand greater tax transparency.

The responses from the FTSE 100 companies have been wide-ranging, but generally disappointing. HSBC offered to help design a tax transparency standard. BT and others welcomed the transparency initiative, but not the new accounting standard. Hargreaves Lansdown, which we now know was one of the few FTSE 100 companies not to have tax havens at the time, questioned the value that it receives for the taxes that it pays.

More positively, the chief executive of Sainsbury’s agreed that consumers are best placed to encourage companies to pay the tax that they are supposed to pay, as they can vote with their wallets if they do not think that the company is making a fair contribution to society. Capita stated that it was both interested in and supportive of the establishment of a new international accounting standard. Morrisons suggested that the Government should force all companies to disclose their corporation tax payments in the UK. Does the Treasury have any plans to do that? The refreshingly honest response from Aggreko summed up what many other companies felt—that they pay lots of tax and probably more than is needed, but that greater tax transparency is “a lousy idea”.

--- Later in debate ---

[John Stevenson]

I understand my hon. Friend’s arguments on transparency, but does he believe that the Government should also look at how we tax companies?

[Stephen McPartland]

I agree. My hon. Friend makes a valuable point, and has a wonderful legal mind. Many of the companies believe that they have a responsibility to their shareholders, but shareholders, to push up their returns, are interested only in the overall amount of tax that they have to pay globally. In their responses, some companies claimed that their overall tax rate is more than 45%, while others claim that it is about 25% to 28%. Although they all believe that they are as transparent as possible, it is perfectly clear that they are not being as transparent as the general public would like to see and understand.

We must move to a simpler tax system, in which it is much easier to see what is going on, and what companies have to pay in tax. I do not want this debate to appear to be anti-business or anti-FTSE 100. I am a Conservative Member of Parliament who is going to end up in the Morning Star as a result of this debate—probably the first one to do so—but the reality is that FTSE 100 companies make a huge contribution to Britain, including through the whole range of taxes that they pay. I understand that the FTSE 100 are responsible for almost 10% of the tax take in the UK, including the income tax and employer’s national insurance contributions that they collect on behalf of the Treasury.

The FTSE 100 are therefore massively good companies for the UK, and I am delighted that we have them in our country, but I want them to be a little more transparent, so that we can all have a bit more faith. As I have said, I believe that we have to lead the way in forcing them to accept the idea of tax transparency. Aggreko has said that it pays lots of tax and probably more than is needed, but that greater tax transparency was “a lousy idea” because it sees that as 500 new pages of the tax code and a great load of regulations that it does not want.

I could go on about the responses—I will if hon. Members wish—but the general thrust is pretty simple: the biggest companies in Britain believe that they all pay their taxes honestly and make a huge contribution to the economy by employing people who pay taxes. So far, most responses clearly show that they are not prepared to be proactive, and will comply only with current laws. Unfortunately, fancy corporate lawyers can blur the lines between tax avoidance and tax evasion, but that is clearly wrong, illegal and unfair to the rest of society, as I have mentioned.

I firmly believe that most employees in most of the FTSE 100, the FTSE 250 and other companies in the United Kingdom would expect their employers to pay their fair share of tax in the UK. We must start thinking about tax and tax transparency as a measure of corporate social responsibility.

Taxation (Living Wage)

John Stevenson Excerpts

Tuesday 22nd January 2013 Westminster Hall

[Robert Halfon (Harlow) (Con)]

It is a pleasure to serve under your chairmanship, Mr Robertson.

Tax cutting is as much about politics as about economics. Of course, the economics have to work too, but here is a statistic that should worry us: the Institute for Fiscal Studies and the Joseph Rowntree Foundation have shown that almost all the growth in household income since 2001 was wiped out by the financial crisis. At kitchen tables up and down Britain, it feels as though the last decade of growth simply did not happen.

It is hard for any Government to tackle that situation. Why? Partly because we—I am talking about the Conservative-led coalition—have allowed our political opponents to caricature tax cuts as measures that are only for our rich friends in the City, rather than a means of creating and sharing the wealth in society. Now, more than ever, we have to show that tax cutting is a moral creed that is about lifting workers on low incomes out of poverty and creating jobs for the unemployed. Hence my campaign to restore the starter rate of income tax at 10p, which was scrapped in 2008 by the last Government.

I believe that restoring the 10p rate would help the coalition to counter the war cry of its political opponents that it is only interested in cutting taxes for millionaires. It would prove to the public that “lower taxes for lower earners” is not just a soundbite but that it can be a reality, first by raising the threshold to £10,000 and then by bringing back the 10p rate for the lower-paid.

The Treasury has confirmed to me in a written answer that the move would cost around £7 billion a year, if it benefited everyone. Interestingly, the Chancellor told the House last year that the same amount of money was lost when Labour brought in the 50p rate of tax, and that has been confirmed by the IFS. I am arguing that when the top rate of tax falls to 45p the extra revenue that the Government say will be raised ought to be put towards restoring the 10p rate of income tax.

Not everyone agrees with my view. The campaign for a 10p tax rate has been opposed from the left, from the right and by our colleagues, the Liberal Democrats. Let me deal with each one in turn.

When Labour was in power, its main response to low wages was tax credits. The aim was a noble one—to help the poor—but the policy was flawed. For example, Dr Jamie Gough from Sheffield university recently told The Guardian:

“Tax credits enable employers to pay below a living wage, and thus subsidise their profits.”

Tax credits have also left the Department for Work and Pensions with a hugely complex system of overlapping handouts that taxes workers on low pay only to recycle the money back as benefits. Reporting on tax credits, the ombudsman has said:

“Many are unaware of them and DWP staff often fail to invite claims.”

The idea is fine in theory, but many people lose out in practice.

Other people take a gentler approach. The Living Wage Foundation has been asking employers to voluntarily pay £8.55 an hour in London. Again, that is a worthy aim, and perhaps larger corporates can afford it, but what about smaller firms and micro-businesses that cannot? I am a supporter of the minimum wage, but recently the Low Pay Commission warned against forcing it higher, because

“Firms may be reluctant to create jobs by recruiting inexperienced or young staff, because they are put off by the increased wage bill.”

[John Stevenson (Carlisle) (Con)]

I am grateful to my hon. Friend for giving way and for securing this debate on an important subject. Does he agree that linking the personal allowance with the minimum wage would be an excellent way to take everyone who is on the minimum wage out of income tax?

[Robert Halfon]

My hon. Friend has an interesting idea, which I would like to explore further, but I believe that the focus of all the resources that the Treasury has, which of course are not much, should be on restoring the 10p rate, for the reasons that I will go on to describe. I have argued that we need a solution for everyone, not just for the lucky few. That is why I was pleased to see Kevin Maguire in The Daily Mirror today supporting the 10p campaign.

Autumn Statement

John Stevenson Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

We have provided billions more for social care—[Interruption.] I just want to make this point to Labour Members. They want to be in government, and they claim that they want to cut the deficit, but what would they cut? They object to the local government settlement, the defence settlement, the NHS budget and the education budget, even though the budgets on the NHS and schools are going up, so what exactly would they do? It was evident from the shadow Chancellor’s response today that they do not actually have anything to say on these matters. If they had a credible deficit plan, we would listen to their questions about the priorities for these plans.

[John Stevenson (Carlisle) (Con)]

The investment of £270 million in schools and further education colleges is extremely welcome. If schools and colleges in my constituency have plans on the runway that are ready to take off but just need a little additional financial support, will the Chancellor help them to take the leap?

[Mr Osborne]

I am very happy to look personally at the case that my hon. Friend makes for his local education facilities. These are of course decisions for other Departments, but we have provided the money for further education, for new free schools and academies, and for expanding places, and I am sure that Carlisle should be near the top of the list.