Autumn Statement

Lord Hollick Excerpts

Thursday 5th December 2013 Lords Chamber

[Lord Deighton]

On universal credit, I can tell your Lordships from a personal point of view that the individual whom we have brought in to manage that programme, Howard Shiplee, worked on the Olympic Games and delivering the Olympic park, so we have got the right people focused on getting the delivery of universal credit absolutely right. Our current planning assumption is that universal credit will be available in each part of Great Britain during 2016, with new claims to the benefits that it replaces having been closed down and the majority of the remaining caseload moving to universal credit in 2017. I do not have the particular numbers on how much it has cost, but I will work with DWP and provide the noble Lord with a response to that question. On capital gains tax for non-residents, we are introducing it in the normal way. The efficacy with which we have approached closing down these loopholes puts the previous Government to shame.

[Lord Hollick (Lab)]

The Statement recognises that we have a cyclical recovery and that in order to turn that into a sustainable, long-term recovery, we need investment—we have had a number of discussions on that—and an improvement in productivity. The Statement references a report, presumably prepared by the Treasury, showing that the policy pursued by this Government and their predecessor to reduce corporation tax has increased investment and raised productivity. In the light of this, is it not strange that the Government have so comprehensively rejected the recommendation of a report prepared by the Economic Affairs Committee of this House and enthusiastically endorsed by all sides in a recent debate that we take measures to ensure that all companies pay corporation tax, particularly those international companies which currently do not, and that UK companies using complex and—frankly—dodgy procedures not to pay tax here should all be required to pay tax? As a result of that, the tax rate to both large and small companies could be substantially reduced, to the benefit of productivity, and the Treasury would be no worse off.

[Lord Deighton]

I thank the noble Lord for his analysis of our need for investment. We also talked about productivity. The review that the noble Lord referred to that the Treasury did on corporation tax is what we describe as dynamic modelling, which means understanding the long-term effects of the tax cuts and demonstrating that the increase in income that flows afterwards pays for the majority of them. The way that we are dealing with making sure that overseas companies pay their fair share is through the OECD and taking leadership internationally. I think that is the only way that you can do it. You have to be able to deal with these international companies on a global basis, otherwise it is impossible to close them down, so that is probably the right way to approach it. The general trend of getting people to pay less tax and making sure that everybody pays that tax is the right strategy, and one that is working well for this country.