Finance Bill

Lord Blencathra Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Lord Blencathra (Con)]

My Lords, I begin by saying how much I agree with the remarks of my noble friend Lord Empey. This is my first day back in the Chamber, and in London, since 18 March. I came down yesterday from Penrith on an 11-coach train. There were two people in my carriage, 30 on the whole train, and I am appalled at the empty streets and inactivity in London: that has to change.

I wish to comment on part 2 of the digital services tax. I approve of this tax, but not because these companies are indulging in so-called tax evasion—they are not, they are simply operating under all the existing rules agreed with the OECD. The trouble is that these rules are now way out of date, because we need the revenue from these companies to repair the damage they are doing to society.

I detest Twitter, Facebook and all other forms of anti-social media. Every week, feeble Governments around the world beg them to take down vile paedophile stuff, terrorist-supporting websites or fake news, and every week, these new masters of the universe tell us to clear off. How many millions of children around the world are now traumatised because of online Twitter abuse? If we cannot get them to stop their activities, which are damaging millions of people, then we have to tax them so that we have the resources to deal with the problems they have created, just as we tax tobacco to get more money for the NHS. In the last 20 years, Chancellors have taxed petrol or diesel more highly to deal with climate change—leaving aside the disastrous policy of Gordon Brown and the then chief scientist, David King, to replace petrol with diesel, which was going to be better for us. These digital companies should pay a digital tax so that we have the money to spend on children’s mental health, anti-terrorist activity and taking down paedophiles.

Then I come to Amazon. I use it a lot and I hate doing so. I desperately try to use physical, local shops, just to keep them going, but it is a losing battle, because Amazon, with its giant warehouses, pays hardly any rates and can undercut everyone else. We all know that our high-street shops are being destroyed, and Amazon is a major destroyer, aided by a rating system that is no longer fit for purpose. These giant Amazon distribution centres are treated like a big farmer’s shed, at ridiculously low rateable values, whereas shops on the high street have excessive rateable values. The Amazon distribution centres are, in effect, giant retail shops and should be treated as such.

Last year, Amazon, which made £8 billion from its total sales in the UK, paid a derisory £63 million in rates. The Debenhams rates bill is £80 million per annum; House of Fraser’s is £18 million per annum. Is it any wonder that these shops are being pushed to the verge of extinction when up against Amazon? John Lewis has a rates bill of £170 million and a net revenue of £172 million, and it did employ 80,000 people: a great British company which looks after all its workers is now just one of many being crucified by Amazon. The owner of Amazon makes $9 million per hour; he could pay the annual UK business rates for Amazon in just nine hours’ trading. Therefore, while I support a digital services tax—but at a much higher rate than 2%—it is only part of the solution. We must have urgent business rates reform to save our high-street shops.