Oral Answers to Questions

Lindsay Roy Excerpts

Tuesday 29th April 2014 Commons Chamber

[Danny Alexander]

I can confirm that the scheme is meeting our expectations. It is a major scheme for the region, with estimated investment of £102 million. The Secretary of State for Transport, who is in his place, confirms that it is on track and scheduled for completion in December 2014. I am pleased to be able to tell the House that a major milestone was delivered yesterday, as the Elveden bypass opened to traffic for the first time.

[Lindsay Roy (Glenrothes) (Lab)]

If the Government’s economic plan is working so well, why is the Chancellor planning to borrow £190 billion more than previously planned?

[Mr Osborne]

This country was borrowing £150 billion a year when this Government came to office, and we are on course to reduce the deficit by a half this year. We are taking—[Interruption.] What exactly is the Labour party’s complaint? Is it that we are not doing enough to reduce the deficit? Labour said that we were doing it too quickly and opposed all the things we proposed in recent years. Labour simply has no explanation for why the economic growth it said could not happen has happened.

Currency in Scotland after 2014

Lindsay Roy Excerpts

Wednesday 12th February 2014 Westminster Hall

[Ian Murray]

I am grateful for that intervention. That point is ignored because it is convenient for the nationalists to ignore it. They do not care about the rest of the United Kingdom. They do not care about businesses and employment across the rest of the United Kingdom. [Interruption.] If they did, they would put their efforts into ensuring that that worked for businesses and for employment across the United Kingdom, rather than being obsessed with the constitution.

I will try to make significant progress. There is a banking museum in the old HBOS headquarters on the mound in Edinburgh. It says that people think of money today as banknotes and coins, but that the currency used to be things such as tea, shells and even feathers. That has been used in the past. We may need to go back to that, because people need to know what the money will be in their pockets. We cannot run a modern economy on empty ginger bottles. Incidentally, people can press their own coins at the museum. There is a little press that kids can use to press their own coins. Perhaps that will become the Scottish Government’s plan B when they have to decide to print their own coins.

This is too important an issue for the SNP and the yes campaign not to be honest with the Scottish people and businesses about the way forward. The overwhelming weight of opinion is now against a currency union. It is little wonder, as any agreement would mean that our interest rates would be set by a foreign bank and include strict instructions on how much Scotland could tax and spend. Scotland would have no control at all over monetary policy. It would also mean the loss of our UK central bank, which acts as the lender of last resort. The Secretary of State for Business, Innovation and Skills raised the lender of last resort issue last week in relation to the large Scottish financial institutions perhaps being forced to move south to be by the central bank, for the reasons that I highlighted earlier, from the crisis in 2008.

[Lindsay Roy (Glenrothes) (Lab)]

Would keeping the pound not make Scotland a neo-colonised state?

Tourism (VAT)

Lindsay Roy Excerpts

Tuesday 11th February 2014 Westminster Hall

[Lindsay Roy (Glenrothes) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I commend the hon. Member for South Down (Ms Ritchie) on her powerful presentation. Many of the points I wish to make have already been raised, so I will concentrate on constructive reinforcement, rather than on unnecessary duplication. I hope hon. Members are able to distinguish between the two.

Commendably, the Prime Minister has been quoted as saying:

“There are always good cases for cutting VAT on individual items. The leisure industry and the hotel industry make a very good argument.”

I would go further: there is a compelling case. Indeed, it is extremely ironic that the Prime Minister, who wants to negotiate flexibility within the EU and to reduce bureaucratic orthodoxy, has failed to capitalise on one of the key areas on which there is considerable flexibility—the VAT charges on tourism, particularly on the hotel and leisure industries. Indeed, it is shocking that we are at such a disadvantage compared with other European countries, as was highlighted by a number of speakers, when the Government have the power to reduce VAT. It is all the more disturbing that a party that espouses the virtues of innovation, enterprise, grasping opportunity and promoting sustainable growth in business has so far failed to reduce VAT. UK tourism is almost at the bottom of the league table of international competitiveness —we are 138th out of 140—yet it is our economy’s sixth largest export earner.

The Chancellor pleads repeatedly for removing barriers to growth and for promoting investment. The conservative estimates of an independent and reputable academic highlight the potential to boost GDP by £4 billion a year, to create 80,000-plus jobs and to improve professionalism in the industry. Professor Blake confirms that such an initiative would be fiscally neutral, so what on earth is holding the Chancellor back? The tourism industry feels that it has to operate with one hand tied behind its back, with declining opportunities for sustainable growth.

It is economic madness not to reverse the long-term trend of decline in the UK’s tourism balance of payments. We are clearly not operating on a level playing field. My home county of Fife is the Mecca of world golf, yet tourist numbers are declining. In my neck of the woods in Glenrothes, the Balbirnie House hotel, a small country house hotel that achieves the highest standards of excellence and employs more than 100 people, is fleeced for more than £800,000 in tax and rates. That is more than £8,000 per employee, and it is only through innovative marketing, outstanding quality of service and tenacity in the face of adversity that the hotel has been able to consolidate its business.

We are clearly not on a level playing field, so a marked reduction in VAT on UK tourism is a no-brainer, to use a colloquial expression. I urge the Chancellor to heed the powerful arguments presented in this debate and reduce VAT on tourism. That would attract foreign investment and domestic tourists, create employment, encourage much-needed investment, promote sustainable growth and improve further standards in the industry. He must know that makes sense.

Oral Answers to Questions

Lindsay Roy Excerpts

Tuesday 10th September 2013 Commons Chamber

[Sajid Javid]

My hon. Friend is right to draw attention to what is a hugely important plan for the residents of Worcestershire, which includes my constituents in Bromsgrove. We are right to make that investment, because it will make a real difference.

[Lindsay Roy (Glenrothes) (Lab)]

18. What estimate he has made of the annual value of the reduction in the additional rate of income tax to 45% to a person earning £1 million per annum.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The cost of reducing the additional rate of income tax to 45% is set out in table 2.2 of Budget 2013. We have not broken down the impacts on individuals by income ranges because of the significant behavioural response associated with the additional rate of income tax. The behavioural response is estimated in aggregate and reflected in the costing.

[Lindsay Roy]

Yesterday, yet another food bank opened, in Methil in my constituency. Fifty volunteers are doing an exceptional job in difficult circumstances. One of the volunteers asked me, “Why has the Chancellor prioritised tax cuts for the very rich, instead of using the revenue to alleviate family poverty in our society, and in Methil in particular?”

[Mr Gauke]

I would hope that the hon. Gentleman said in response that in the 2012 Budget we saw increases in stamp duty on high-value properties and a clampdown on tax allowances and reliefs for the wealthiest, all of which raised far more from the wealthiest than the 50p rate, which was failing to raise revenue.

Oral Answers to Questions

Lindsay Roy Excerpts

Tuesday 6th November 2012 Commons Chamber

[Mr Gauke]

My hon. Friend will be aware of the Nuttall review, which reported last week. The Treasury is also considering its role in helping employee ownership to support growth as well as options to remove barriers, including tax barriers. That work is being considered in the run-up to the autumn statement.

[Lindsay Roy (Glenrothes) (Lab)]

Does the Minister agree with the chief executive of Sainsbury’s, who said that “trading employment rights” for company shares is

“not what we should be doing”?

[Mr Gauke]

What Sainsbury’s does is a matter for Sainsbury’s, but I also point out the comments made by the likes of the leaders of the Federation of Small Businesses, the British Chambers of Commerce and the Institute of Directors, who have said that this measure will help entrepreneurs, start-up businesses and the fast-growing companies that we need. Surely the whole House should welcome that.

Oral Answers to Questions

Lindsay Roy Excerpts

Tuesday 24th April 2012 Commons Chamber

[Mr Osborne]

My hon. Friend is right to remind us all that the Government have to pay interest on the enormous debts that the Labour party racked up and the budget deficit it bequeathed us. The action we have taken means that we are paying £36 billion less in interest payments over this Parliament, which completely dwarfs any initiative ever put forward by the shadow Chancellor.

[Lindsay Roy (Glenrothes) (Lab)]

Why are the Government now forecasting that they will borrow £150 billion more than they envisaged a year ago? Has not cutting back too far, too fast completely backfired?

[Mr Osborne]

As a former teacher, the hon. Gentleman read that very well. He should also study the Institute for Fiscal Studies’ statement that if we had stuck to the plan left to us by the Labour party we would be borrowing £200 billion more than we are borrowing at the moment and, as I just said, paying £36 billion more in interest payments to creditors of the British Government.

Amendment of the Law

Lindsay Roy Excerpts

Thursday 22nd March 2012 Commons Chamber

[Ed Balls]

I will make it absolutely clear: we will vote against the change in the Budget debates and I hope that he will join us in the Lobby. We will vote against it, but the Chancellor knows very well that I will not go through every tax rate, relief, allowance or spending commitment and make commitments for three years’ time. But if the election were called tomorrow, our manifesto would be clear—we would rescind the measure and the Government would go ahead with it. That is the difference.

[Lindsay Roy (Glenrothes) (Lab)]

I am a relative newcomer to the House, so can my right hon. Friend explain what he means when he says, “The same old Tories”?

Fuel Prices

Lindsay Roy Excerpts

Tuesday 15th November 2011 Commons Chamber

[Robert Flello]

I could not agree more. All our poorest communities, whether they are people with any form of disability requiring a mobility allowance or special vehicles, or the poorest communities trying their best to get to work in difficult circumstances, are the people most heavily affected. The point was made earlier about who is paying the tax. It is being paid by the poorest. Who is not paying the tax? The oil companies and the speculators, who are taking the opportunity of the Arab spring and in some cases the continuing troubles to speculate a little more in the belief that the price will go up, until that becomes self-fulfilling. We end up with petrol prices continually going up, irrespective almost of fuel taxes. We should have a thorough root-and-branch review of that.

In the few minutes available to me, I want to turn my attention predominantly to the impact on the haulage industry and the associated industry, the road rescue services. I place on record my thanks to the Road Rescue Recovery Association, the Scottish Vehicle Recovery Association, the Road Haulage Association and the Freight Transport Association for the campaigns that they have been running, alongside the FairFuelUK campaign, and the pressure that they have been bringing to bear to get the issue debated seriously on the Floor of the House.

[Lindsay Roy (Glenrothes) (Lab)]

Does my hon. Friend agree that the high fuel duty is having a particularly damaging effect on the construction industry, which is going through a difficult time at present?

[Robert Flello]

Indeed. Every aspect of what we do is affected by the price of fuel, whether at the pumps, domestically, or at the heavy duty pumps that the haulage industry and other industries use. All sorts of other issues then come into play. For example, hauliers will be looking to ensure that their vehicles are running as efficiently as possible, yet on the European stage there is the possibility of a reduction in the height of trailers to 4 metres, which will have a negative impact on our haulage industry in the United Kingdom, exacerbate the problem of the price of fuel and increase the need for a cut in the fuel duty.

As has been said, a temporary VAT cut would be absolutely the right thing to do to secure an immediate impact for the domestic motorist, but something different is needed for the haulage industry in the longer term. A VAT cut would obviously have a wash-through effect, but we need a more serious change and a restructuring of the way the fuel costs of the industry and associated industries are met.

Other factors that impact on the haulage industry, such as London’s low emissions zone, also have a knock-on effect. I wish that Mayor Boris would respond to my letters and agree to meet to discuss the impact on the haulage and haulage recovery industries. It has a direct impact on fuel efficiency and keeping traffic moving on London’s streets if vehicles that should be on the streets helping to recover other vehicles and keep traffic flowing are prohibited from doing so. That will of course become a greater concern in the run-up to the Olympics.

Indeed, other aspects of the price of fuel will affect the membership organisations—I will not name them—that come out when their members break down by the side of the road, and those organisations’ costs are passed on to their members through the running costs of the yellow or orange vehicles that assist people at the roadside. That industry will also be hit by Green Flag’s terrible announcement that it is devastating the number of contractors who work for it. Some of them will unfortunately end up unemployed.

Oral Answers to Questions

Lindsay Roy Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Justine Greening]

When the Labour Government came to power in 1997, fuel duty was 36.86p per litre. By the time they left office, it had risen to 57.19p per litre. As I am sure my hon. Friend is aware, one of the architects of those tax rises was then the chief economic adviser to the Treasury; he is now the shadow Chancellor.

[Lindsay Roy (Glenrothes) (Lab)]

4. What assessment he has made of the effect on levels of employment of the increase in the standard rate of value added tax.

[Mike Gapes (Ilford South) (Lab/Co-op)]

8. What assessment he has made of the effect on levels of employment of the increase in the standard rate of value added tax.

[Lindsay Roy]

I thank the Minister for that answer. Will he tell us what impact the VAT rise has had so far on himself and his family?

[Danny Alexander]

The VAT rise of course leads to increased prices in the shops, and that affects everyone in the House.

Scotland Bill

Lindsay Roy Excerpts

Monday 14th March 2011 Commons Chamber

[Fiona Bruce]

My hon. Friend makes a valid point.

Let me turn now to the proposals in the Bill. It is only right that I should explain why complete financial independence would not, in my view, be beneficial for the Scottish or wider UK economy. Members of the Scottish National party might say that the Bill’s financial provisions do not go far enough but devolving full economic responsibility while retaining various regulatory and other competences would create a two-tier system that would serve to weaken our economy. Devotees of the two-tier system argue, I believe, on the basis of a fiction, if not a fantasy, that such a fragmented system could exist without disastrous consequences. The Calman commission and the Scottish Parliament’s report on the Bill both rule out financial independence on the grounds that it would create havoc for taxpayers and break up the Union.

In its final report, the Calman commission gave its reasons why income tax should not be fully devolved, including that it would not, in the commission’s view,

“be consistent with the social Union”.

We can add a further reason. There are certain areas of government that a responsible country will retain at a national level, such as defence and national security. They should remain UK-wide in the interests of the shared public good, and fragmenting them would be both inefficient and dangerous for national security. The same basic principles apply to immigration and trade. Unco-ordinated approaches in those areas could lead to potentially disastrous consequences so it is important that we act responsibly and in the whole country’s interest.

Such protections can be afforded only under a single economic framework and any moves to meddle in that area unnecessarily will create more damage than good. It is therefore refreshing that the Scottish Parliament recognises the merits of the Bill’s provisions and, rather than running before attempting to crawl, its report on the Bill does not go so far as to recommend full financial responsibility.

The Bill is about improving the devolution settlement and promoting economic growth. The income tax proposals in the Bill retain the reservation of overall fiscal management within the UK Government, which will ensure that the needs of Scotland are supported alongside a UK-wide strategy of promoting growth and economic stability. I welcome the Scottish Parliament’s Committee’s report on the Bill, which states in paragraphs 36 and 39, with reference to fiscal decentralisation:

“The evidential base was, in our view, remarkably weak, and the claims made did not stand up to challenge or scrutiny…the overwhelming balance of expert economic opinion in Scotland and internationally was that the existing evidence base supports neither any clear link between fiscal decentralisation and an economy’s long-run rate of growth, nor…a precise numerical link between fiscal decentralisation and an increase in GDP.”

It goes on:

“The Scotland Bill is about good government. It is intended to improve how Scotland is governed and align decisions on spending and taxation more closely so that the Scottish Parliament will be more accountable and, in the long run, take better decisions. Better decisions will, in the longer term, mean improvements to many aspects of Scottish public life.”

In true political fashion, I have a favourite section of the Scottish Parliament’s Committee’s report, which was mentioned earlier. In paragraphs 43 and 44, the report states:

“Full Financial Responsibility was the Scottish Government’s alternative to the plans in the Scotland Bill. The Committee did not examine this in detail, as there was no detail to examine. We received no costings for these plans, no material explaining the practical implications for taxpayers, employers, Scotland’s financial sector or collection plans. However, we were able to come to several obvious conclusions. Firstly, as was made clear in evidence to us, fiscal systems serve constitutional ends. Full Financial Responsibility is no exception. The constitutional aim it serves, however, is not the preservation of the UK. Secondly, it is plain that under fiscal responsibility, Scotland would run a substantial deficit…Finally, it is clear that no thought has been given to the effect of these plans on the economy of the UK, to which Scotland will inevitably remain linked…The Committee is clear that the evidence shows that full financial responsibility or autonomy is not a serious alternative to the fully worked out plans in the Scotland Bill.”

[Lindsay Roy (Glenrothes) (Lab)]

Is it the hon. Lady’s contention that full financial accountability is a euphemism for independence?

[Fiona Bruce]

It is my contention that full financial responsibility would not benefit either Scotland or the UK more widely.

In conclusion, it has been made clear by the Scottish Parliament and acknowledged by the Calman commission report that reform of the devolution settlement in Scotland is essential. It is fair to assume that the Bill would exist regardless of which party was in government, and I hope it receives the support it deserves. Any futile disagreements with its premises discredit the fine work undertaken by the Calman commission and serve only to play partisan politics. It is difficult to argue against the income tax proposals laid out in the Bill as they further cement the coalition Government’s commitment to the localism agenda. That agenda is about devolving power to meet more local needs, but that does not mean that all powers can or should be devolved. Powers should be devolved to the most local level possible if feasible and responsible. I hope that if the Bill is successfully passed and implemented, Scotland will be able more effectively to deliver Scottish solutions for Scottish needs and the Scottish people. I support clause 26.

--- Later in debate ---

[Mr Gauke]

The hon. Gentleman is right. There are circumstances in which anti-avoidance measures have been retrospective and go back further. As I say, the power would take us only to the beginning of the relevant tax year in which the order is made. Other sorts of anti-avoidance measure would not fall under this power because of the constraint within it. The Bill is not designed to meet that purpose. I hope that provides the hon. Gentleman with some clarity. I hope also that my comments on amendments 68 to 70 are helpful and that he now feels able to withdraw the amendments.

Amendments 42 to 44 and 47 to 50 seek to make the process by which the Treasury appoints tax years to bring into effect the provisions relating to the new Scottish rate of income tax and the effective date that UK stamp duty land tax and landfill tax are disapplied subject to the consent of the Scottish Parliament. This is to be indicated by way of resolution. I consider this to be unnecessary. We have stated our intention to commence the Scottish rate of income tax from April 2016, and to devolve the landfill tax and stamp duty land tax by April 2015.

The Scotland Bill Committee in the Scottish Parliament welcomed these proposals, as it stated in its report. The Scottish Parliament has now given its approval to the measures included in the Bill through the legislative consent motion. The Bill provides for the new Scottish rate of income tax to be brought into effect in such tax year as is appointed by the Treasury as a precautionary measure. Appointed day orders will be issued in advance of disapplying the stamp duty land tax and landfill tax. We have also tabled Government amendments, which I will come to later, to ensure that this process is completed by order made by statutory instrument so that these are printed and published for transparency.

[Lindsay Roy]

Given the points made by my hon. Friend the Member for Edinburgh South (Ian Murray) and various other points about the need for operational effectiveness, is it likely that the introduction of the Scottish income tax rate will create additional HMRC jobs and, if so, are they likely to be based in Scotland?

[Mr Gauke]

If the hon. Gentleman will forgive me, I want to deal with the amendments first, as I stated in my opening remarks. I will then deal with some of the questions that have been raised as a consequence, and touch on some of the administrative consequences of the changes.

We made it clear in the Command Paper that accompanied the Bill that if the Scottish Parliament is not ready to introduce the smaller taxes in April 2015, we would consider delaying the switch-off of the UK-wide versions of the taxes in Scotland. That said, we must be clear that clauses 29 and 31 enable the disapplication of the existing tax in Scotland. Should the Scottish Government and Parliament decide that they do not wish to put in place a Scottish version to cover the existing tax base, we will not leave the current stamp duty land tax or landfill tax in place. It will be for the Scottish Government to decide what, if any, arrangements they wish to put in place in this area once it is devolved to the Scottish Parliament.