Self-employed Persons: Financial Support

Mark Harper Excerpts

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

The hon. Gentleman speaks to a real concern and a real issue, but I draw attention to the fact that one of the challenges is to communicate what support has already been announced by the Chancellor. To give an example, a family renting in Sheffield with two children would be eligible for around £1,750 a month in support—far more than the £94 per week, if we take account of additional things such as housing and children’s support. It is about what package of support is available, and the Chancellor has already announced considerable measures in that regard.

[Mr Mark Harper (Forest of Dean) (Con)]

I listened carefully to what my right hon. Friend said. He acknowledged that the vast majority of self-employed people were being impacted. If he makes sure that whatever help is given is taxable, we can claw back any money that is overpaid to those who are doing well. However, what self-employed people are looking for is a clear commitment today that whatever scheme is set out is of a similar magnitude to that for employed workers. If the Chief Secretary can say that, it will give people confidence to borrow, knowing that they can pay the money back. That will go a long way towards solving the problem.

[Steve Barclay]

As I have said, the Chancellor held meetings with small business leaders this morning. He is having further meetings on this issue today. He is very aware of the concerns raised by my right hon Friend and other Members, and we continue to work at pace on this issue.

Economic Update

Mark Harper Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

My right hon. Friend the Health Secretary is working around the clock to support our healthcare workers to have everything they need to do the vital job that they are doing for us. They will get whatever support that they require.

[Mr Mark Harper (Forest of Dean) (Con)]

I welcome the scale of what the Chancellor has announced. It is up to the mark. Some of his specific measures will be welcomed by constituents who have contacted me, but may I press him a little on the employment support package? I recognise the importance of coming up with a package that is deliverable, but I fear that if he is unable to say anything more urgently, he needs to give businesses the confidence to keep those employees employed, because some of them will be facing massive reductions in cash flow immediately. Will he look at what he can say quicker than next week to give them the confidence that they will be supported in due course?

[Rishi Sunak]

I very much appreciate the strains that business cash flows are under, which is why, today, we have already taken steps with the announcement of new cash grants of £10,000, £25,000 and an extension of the business rate holiday to thousands more businesses.

Draft Double Taxation Relief and International Tax Enforcement (Gibraltar) Order 2020

Mark Harper Excerpts

Tuesday 25th February 2020 General Committees

[The Economic Secretary to the Treasury (John Glen)]

I beg to move,

That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Gibraltar) Order 2020.

May I say what a pleasure it is to serve under your chairmanship, Ms McDonagh? The order before the Committee gives effect to a new double taxation agreement, or DTA, with Gibraltar. DTAs remove barriers to international trade and investment and provide a clear and fair framework for taxing businesses that trade across borders. By doing that, they benefit both businesses and the economies of the countries signed up to them.

I shall say a few words about this agreement. We have agreed a comprehensive DTA with Gibraltar that is based on the OECD’s model tax convention and the domestic tax laws and the treaty preferences of both jurisdictions. This is a first-time DTA with Gibraltar and will introduce a number of improvements for businesses, individuals and Her Majesty’s Revenue and Customs. It will strengthen our relationship with Gibraltar, promote trade and investment and help to tackle tax avoidance.

I shall outline the agreement’s key features. First, it complies with the minimum standards laid down in the base erosion and profit shifting, or BEPS, project, which is the OECD’s framework for combating tax avoidance by multinationals. That means that our DTA includes a statement in the preamble that the DTA is not intended by the parties to facilitate avoidance or evasion, as well as including the principal purpose test—a provision denying benefits under the DTA where the main purpose of the transactions or arrangements is to avoid tax.

[Mr Mark Harper (Forest of Dean) (Con)]

Does my hon. Friend find it an interesting coincidence, as I do, that at the moment when, in the main Chamber, the Opposition are trying to persuade the House that this Government have done nothing about combating tax avoidance and evasion, the Minister is putting before the Committee a clear example of where the Government are leading our international colleagues in putting in place mechanisms to ensure that we facilitate international trade and business while ensuring that people pay the tax that is rightly due to the British taxpayer?

[John Glen]

I thank my right hon. Friend for that intervention. I am always very interested in what he has to say. I confess that on this occasion I have not been able to attend the Chamber yet. I look forward to hearing the arguments deployed and will reserve judgment, but what I can do is commend to him the logic and value of this intervention by the Government, and I will go on to explain further why this DTA is a positive step forward.

The DTA is comprehensive in scope, and as such covers all income and gains, including dividends, interest and royalties. However, we have ensured that we will retain the right to apply a withholding tax of 15% on distributions from real estate investment trusts. Also, benefits in respect of interest and royalties are limited to persons who can demonstrate a close connection to Gibraltar. That provides an additional layer of protection against residents of third countries exploiting the provisions.

The new agreement also provides for mandatory binding arbitration, which ensures that disputes are resolved and that double taxation is therefore avoided. Finally, the new DTA provides for mutual assistance in the collection of tax debts. That will mean that, for the first time, the UK can ask Gibraltar to collect tax debts on our behalf.

Together, these features strengthen both countries’ defences against tax avoidance and evasion. In summary, the agreement is one that both the UK and Gibraltar can be happy with. It protects UK revenue and provides a stable framework in which trade and investment between the UK and Gibraltar can continue to flourish. I therefore commend the order to the Committee.

Draft Import of and Trade in Animals and Animal products (Amendment etc.) (EU Exit) Regulations 2019 Draft Trade in Animals and Related Products (Amendment) (EU Exit) Regulations 2019

Mark Harper Excerpts

Tuesday 19th February 2019 General Committees

[David Rutley]

I will gladly follow up on that. We are discussing the draft regulations, however, and the points that my hon. Friend has just made, good as they are, are outwith the narrow confines of the legislation—although we have discussed a lot today. Some of the checks that he is concerned about relate to what will happen in the EU, rather than in the UK. Nevertheless, I will give him the specifics and follow up on his points in detail, ensuring that they are fully considered.

Consultation and impact assessments were raised by the hon. Members for Stroud and for Motherwell and Wishaw. Again, notwithstanding the fact that there will be significant changes to how we deal with exports and to some extent imports—we are trying to have a friction-free approach to imports from the EU—those changes and impacts are outwith what we are discussing today. Yes, there have been impact assessments and consultations on other aspects, but the specific draft regulations—

[Mr Mark Harper (Forest of Dean) (Con)]

I am listening carefully to the Minister and, I confess, I should really have intervened on my neighbour across the River Severn, the hon. Member for Stroud. Both statutory instruments, as made clear in the explanatory memorandums, include no substantive policy changes. Is that not the reason why there are no impact assessments? We are not changing policy; we are simply tidying up to ensure that the existing law works when we leave the European Union, if we do so without a withdrawal agreement. There is no impact assessment because we are not changing any policy.

[David Rutley]

That is absolutely correct. I thank my right hon. Friend for clarifying the point so well. The draft regulations are about trying to keep things as similar as they can be. The Government’s approach is continuity where at all possible and, as a result, there is no need for consultation or an impact assessment.

Draft Merchant Shipping (Marine Equipment) (Amendment etc.) (EU Exit) Regulations 2019

Mark Harper Excerpts

Tuesday 19th February 2019 General Committees

[Ms Ghani]

The hon. Gentleman has got out of bed on the wrong side this morning. The IMO is indeed across the way, and the secretary-general and I meet regularly on a number of issues. This morning seems to be turning into a discussion about whether we should or should not be leaving the EU, but that decision has been made and this morning we are ensuring that standards continue.

[Mr Mark Harper (Forest of Dean) (Con)]

The Minister, as ever, is covering the regulations comprehensively. I have listened carefully to what the hon. Member for Huddersfield said about changes to the safety standards. My reading of the regulations is that they simply make sure that the existing standards and rules operate when we leave the EU. No one is changing or lowering safety standards. The hon. Gentleman says that he wants to scrutinise the regulations, but perhaps if he read them before asking his questions we would all be better informed.

[Ms Ghani]

It continues to be a glorious morning, as we can see by the amount of interventions that are being made. The regulations do indeed bring on board standards. We are one of the leading countries, helping the IMO to deliver even higher standards, and the hon. Gentleman will be pleased to know that ILO 188, which raises standards for seafarers and fishermen, was delivered by this country this year. We were the first country to deliver that ILO standard. Once again, the UK is the leading champion for our maritime sector.

The regulations make only necessary changes to adapt a system for marine equipment conformity assessments that was designed on behalf of the EU member states into a UK system. With your permission, Ms Buck, I commend the regulations.

Spring Statement

Mark Harper Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

I have laid a written ministerial statement today that sets out the reviews and consultations, and that is among them. If the right hon. Gentleman looks at that after this statement he will see that it is there.

[Mr Mark Harper (Forest of Dean) (Con)]

May I draw the attention of the Chancellor to the recent research published by the International Monetary Fund, which shows that the choice we made in 2010 to deal with the deficit primarily by controlling spending rather than raising taxes, as the Opposition would have done, was the right choice? It meant that the economy grew faster than those of our European competitors and has put him in the position where he can deliver more money for our priorities, while reducing the debt in the balanced way he has set out.

[Mr Hammond]

I am grateful to my right hon. Friend. He is right: it was the right choice. Because we made that choice, throughout that period employment in this country continued to grow. We avoided the very high levels of unemployment suffered by many of our European neighbours. We avoided the catastrophic, generation-blighting levels of youth unemployment suffered by many of our European neighbours, which will be affecting their economies and societies not just for a few more years but for 30, 40 or 50 years to come. It was the right decision. We have executed our plan and we should stick to it.

Oral Answers to Questions

Mark Harper Excerpts

Tuesday 24th October 2017 Commons Chamber

[Elizabeth Truss]

It seems that the right hon. Gentleman cannot take yes for an answer. There is not a public sector pay cap. We have said that individual Secretaries of State will be responsible for making proposals on their workforces dependent on specific circumstances. We are facing very different issues in the NHS and in the armed forces. What is important is that we look at the evidence and make sure that we can recruit and retain the best possible workers in the public sector, but we also need to make sure that we do not price out of the market people working in the private sector.

[Mr Mark Harper (Forest of Dean) (Con)]

Will the Chief Secretary urge her Cabinet colleagues, when they are making these decisions, to bear in mind that public sector pay rises must be fair not only to public sector workers, but to the five sixths of workers in the private sector who face the same pressures and challenges?

[Elizabeth Truss]

My right hon. Friend is right. The fact is that we were left a legacy by a previous Government who spent money that they did not have. We have had to get the public finances back on track. We do recognise that there are areas in which we need to make sure that we can recruit and retain high-quality public sector workers, but we also need to make sure that we have a thriving private sector economy. That is why we have ended up with the lowest unemployment for 40 years.

Finance Bill

Mark Harper Excerpts

Committee: 1st sitting: House of Commons
Wednesday 11th October 2017 Commons Chamber

[Peter Dowd]

This is not relevant to the debate, but a significant number of those jobs are incredibly low paid, and people have not had pay rises for many years. What the hon. and learned Lady says might well be the case, but the reality is that it is not about the quantity; it is about the quality—[Interruption.] Of course it is.

How insensitive and out of touch must this Government be to put clause 5 before Members today of all days? The Prime Minister has vowed that she will do anything and everything she can to help those affected at Bombardier and BAE, so perhaps the Minister would like to withdraw this provision here and now and put the Prime Minister’s warm words into action.

[Mr Mark Harper (Forest of Dean) (Con)]

I agree with the hon. Gentleman about the concerns that those workers will be facing, but he knows perfectly well that the Government’s proposals in this Bill are designed to deal with abuse. He knows that there are no plans to change the rules in a way that would affect people on lower incomes who are not doing anything wrong, and the Minister made that clear on Second Reading. The hon. Gentleman’s scaremongering is making the concerns of those workers worse, rather than reassuring them, which is what he ought to be doing in this House of Commons.

[Peter Dowd]

The only people who are scaremongering are this Government who are threatening to tax people’s redundancy payments—that is the scaremongering in this House.

Perhaps the Minister would like to withdraw this proposal. I will happily give way to him if he wants to reconsider his decision—he might have discussed it with the Prime Minister. In some instances, a job loss can be even worse if individuals lose their employment because of base and nasty discrimination, whether because of their age, gender, race, religion or sexuality.

The amendments speak directly to the question of how much money an employee who has lost their job should receive in tax-free redundancy pay, and how much an employee who is discriminated against should receive in tax-free compensation from an employment tribunal.

--- Later in debate ---

[Mr Harper]

I will deal with the amendments and some of the issues introduced by the hon. Member for Bootle (Peter Dowd).

Let me cover first the jobs position. The only criticism I have of my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), who raised this matter, is that, of course, jobs are created not by the Government but by businesses operating under the conditions that are created by the Government. It is important we remember that, because we should not take it for granted. The jobs performance of many countries in the European Union has been pitiful by comparison. Not that long ago, this country created more jobs than the rest of the European Union put together. That is not a trivial point; it makes a difference to millions of people across the country.

The hon. Member for Bootle ought not to sneer at the number of jobs. He is also wrong about the quality of those jobs. Figures from the Office for National Statistics clearly show that most of the jobs that have been created are permanent, full-time and skilled managerial or professional jobs. They are not rubbish jobs, as he calls them in that slightly sneering way. They are good-quality jobs and are providing good livelihoods for people across our country.

[Kelvin Hopkins]

The right hon. Gentleman suggests that Governments effectively have no role in creating jobs. The reality is that macroeconomic policies have an enormous effect on the creation of jobs. Those countries that have chosen foolishly to join the euro and now have a massively overvalued currency, in effect, have lost millions of jobs in some cases. We have fortunately not been part of the euro, and currency flexibility is a crucial part of that; that is Government policy.

[Mr Harper]

I completely agree, but the hon. Gentleman misquotes me. I did not say that Government have no role. I said that Government do not create the jobs, but I explicitly said that Government create the conditions within which businesses operate and can create jobs. He is absolutely right about that, and I do not necessarily demur from what he said. The euro and the straitjacket of monetary policy across Europe has led to appalling situations in some countries where unemployment rates are very high, which I do not think is sustainable. That is why our economic performance is incredibly strong. We should not throw that away.

[Catherine West (Hornsey and Wood Green) (Lab)]

Could the right hon. Gentleman explain how, when he was Chief Whip, Thames Water failed to pay taxation between 2010 and 2014?

--- Later in debate ---

[Mr Harper]

I have not got any idea. I was not Chief Whip between 2010 and 2014. Individual taxpayer matters are for Her Majesty’s Revenue and Customs, and Ministers do not get involved in individual taxpayer decisions. As the Financial Secretary to the Treasury and several other hon. Members have pointed out, we have reduced the scope for businesses to avoid and evade paying taxes. We have closed that gap and are collecting more revenue that we can spend on our important public services, which I want to turn to.

The hon. Member for Bootle mentioned multinationals. He will know that there is nothing we can do unilaterally to collect money from multinationals that operate in different countries. That has to be part of an international process. He will know that David Cameron’s Conservative Government led that process and set up the initiatives. It is not very exciting, Mrs Winterton, but we are part of what I think is called the base erosion and profit-shifting programme. I am a non-practising chartered accountant, and I am afraid that we talk about such exciting things over coffee, but it is important because it relates to a set of international rules for treating where companies earn income consistently so that we tax them where they are genuinely doing their economic work. This Government cannot do that unilaterally; we have to co-operate. This Government have been leading and shaping that work across the world, not following others or trying to avoid it. Not only do we not have anything to be ashamed of, we have a lot to be proud of, which is shown in the revenue that we have been collecting.

Moving on to the substance of clause 5 and the amendments, I want to return to the point I made when intervening on the hon. Member for Bootle. There is nothing in the proposals that should alarm anybody—particularly those on lower incomes—who is playing by the rules. That issue came up when there were votes on the Ways and Means motions, and the Minister made the Government’s intentions clear and they are not what the hon. Gentleman suggested. Anybody worrying about their job at Bombardier, BAE Systems, about which we heard yesterday, or any other company should know that the Government have not proposed to alter the £30,000 tax-free limit at all. If the Government were to bring forward such a proposal, it would be governed by a statutory instrument under the affirmative procedure, meaning that the matter would come to the House and that Ministers would have to make the case at the Dispatch Box and persuade the House to back a change. There is no such proposal. The hon. Gentleman knows that it is not true and in saying that it is he is scaremongering and worrying people when they have no reason to be worried. He should be ashamed of himself.

As the Minister set out on Second Reading, clause 5 is necessary because the rules are unclear and complex and there is some abuse. Some 85% of termination payments are below the £30,000 threshold and will not be affected, but we must make sure that people do not abuse rules that are there for a good reason: to ensure that employees who lose their jobs are properly compensated and have some money to help them as they look for another job. There is no proposal to change that; this is about dealing with abuse.

On amendment 4 and “injured feelings”, there is a clear reason why it is foolish. Were it agreed to, it would introduce a large loophole into the process that would absolutely be abused. If someone wanted to offer some tax-free payments on loss of office, the payment could be labelled as “injured feelings”, rather than as something in the contract, and they could avoid paying tax and national insurance on it. The Minister should be congratulated on thinking things through and ensuring that people cannot dream up loopholes. Dealing with tax evasion is not just about acting after it has happened; it is about smartly drafting legislation so that loopholes are not left open in the first place.

[Charlie Elphicke (Dover) (Con)]

My right hon. Friend is making an incredibly powerful argument. I was just considering his remarks on tax avoidance, loopholes and, indeed, Thames Water, which was mentioned by the hon. Member for Hornsey and Wood Green (Catherine West), and it is important to remember that industrial-scale tax avoidance arose under the previous Labour Government, who did nothing at all to stop this egregious practice. This Government have been passionate, trenchant and active in righting that wrong.

[Mr Harper]

My hon. Friend is right. We hear a lot from the Opposition about clamping down on evasion and aggressive tax avoidance, and I give them credit for talking about it a lot. Unfortunately, they did not do anything about it when they were in government. The Minister and this Government talk about it a little bit, but we spend most of our time dealing with it and collecting the money, which is the right balance.

[Catherine West]

The list definitely dates from 2010—if I am not mistaken, that was when the Tory Government came to power—and includes Google, the Vodafone sweetheart deal, and Amazon. Government Members should concede that, despite some gradual improvements, we are still not where we ought to be and that this group of amendments includes things that taxpayers would like to see this House take much more seriously.

[Mr Harper]

There are a couple of things in what the hon. Lady says. She is absolutely right that we need to do more to ensure that multinational companies pay tax in the appropriate jurisdiction, but we cannot do that unilaterally. We have to work with other countries, because we need international agreement on where a company’s profits are earned. The media sometimes does not understand this, but companies pay tax on profits, not revenues, so the whole argument is about where the profits land and that has to be addressed internationally. This Government are leading that international work, not following it—[Interruption.] It is no good the hon. Member for Oxford East (Anneliese Dodds) shaking her head. UK tax professionals have been leading this work and continue to drive it forward. We have a proud record.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I have seen some of this from the inside, within the European Union. For example, I have seen measures against trusts and measures to introduce country-by-country reporting blocked by Conservative MEPs, and I frequently saw measures to attempt to introduce international co-ordination blocked by Conservative-related politicians.

[Mr Harper]

No. First, it cannot just be done at European Union level—[Interruption.] No, we have to do it globally, because many of the companies involved are US companies. The base erosion—[Interruption.] I do not know why the Opposition Front-Bench team are laughing. The base erosion and profit sharing programme comes from the OECD.

[Catherine West]

Will the right hon. Gentleman give way?

[Mr Harper]

I cannot take an intervention when I am still dealing with the first one. The base erosion and profit sharing programme is a global initiative, and we are leading on that work.

As for the point of the hon. Member for Oxford East about the EU, if I remember rightly, the reason why the Government blocked the French-driven proposals for country-by-country reporting was that they were part of an EU plan to try to drive up the total amount of tax that we take from business, not to ensure that companies pay tax in the right way. We are not an anti-tax country. That move was part of an EU plan to avoid countries being able to have competitive tax regimes and to avoid businesses locating in the United Kingdom. The French wanted to stop that because many of their businesses and smartest people now work in London or other parts of the UK, but the change was not in our national interest and I believe that that was why we blocked it. However, we need to continue the international work, and I am pleased that we have been leading on it.

My final point is about workers’ rights. I understand that the hon. Member for Bootle has to do this stuff to please people on his side, but he is absolutely wrong. This Government have absolutely no agenda of the sort that he mentioned. When talking about our leaving the European Union, my right hon. Friend the Prime Minister has made it clear that we want to protect workers’ rights. We stand four-square behind the rights that are in place, and we will be legislating for them in the European Union (Withdrawal) Bill, which I am sure will provide many hours of joy and fun in Committee. You may even be in the Chair, Dame Rosie, to listen to some of those exciting debates. We are going to protect workers’ rights, and there is nothing at all in the proposals to concern somebody who is worried about losing their job. This is about cracking down on people who have been abusing the provisions that protect legitimate workers who lose their jobs, using them as an excuse to get tax-free cash out of the system and cheat the taxpayer. That is what the proposals are about and that is why I hope that the Committee rejects all the amendments and supports clause 5.

[Kirsty Blackman (Aberdeen North) (SNP)]

It is good to be back in the House after a bit of a recess and to be here again talking about the Finance Bill. It is our second such Bill this year—our second of three—so we are here for the long haul. I want to discuss termination payments and the relevant amendments tabled by the Scottish National party and Labour. The Government have been clear that they are just closing a loophole, but the Budget suggested that the measure will generate an extra £430 million a year. That is £430 million a year that these workers will not be getting when they receive their termination payments. However the Government want to dress it up, this is additional tax on these people who are losing their jobs and receiving termination payments. These people are in a vulnerable situation, as they are receiving a termination payment and are no longer in employment and they will be taxed more as a result.

--- Later in debate ---

To return to our previous discussion and the points made by the right hon. Member for Forest of Dean (Mr Harper) and the hon. Member for Dover (Charlie Elphicke), measures to deliver change on an international level have been blocked by the Government.

[Mr Harper]

The hon. Lady made a relevant point in the previous debate that I did not mention at the time. Some of the things that we had to deal with early in the last but one Parliament involved multinational tax arrangements that were put in place under the previous Labour Government. We did our best to get at least some money from those multinationals. It was not enough, but we did at least move things in the right direction. Profit shifting can only be dealt with internationally by agreement. If we do not do that, we will not make any progress. As I said in the previous debate, we are leading that international effort, which did not happen under the Labour Government.

[Anneliese Dodds]

I am sorry, but it is not the case that Governments are completely unable to do anything unilaterally to prevent profit shifting. They can, for example, decide whether to execute secret sweetheart deals with large multinationals through their tax authorities, or they can decide to be transparent.

Finance Bill

Mark Harper Excerpts

Tuesday 12th September 2017 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

It is a pleasure to address the 1922 committee today.

The House considered the Ways and Means resolutions last Wednesday, and today is round two on Second Reading of the Finance Bill. We have just had wall-to-wall complacency from the Minister; it is as simple as that. Sandwiched between the two debates, we have debated the European Union (Withdrawal) Bill. The legislative powers up for sequestration by Ministers are eye-watering and unprecedented, and they cover a range of areas, including finance. Quite simply, that process does not befit a parliamentary democracy. Parliamentarians— I use the word loosely—on the Government Benches should be concerned about their acquiescence last night. The hand-wringing, unprecedented ceding of power to the Executive was unbecoming, and it goes to the heart of the scrutiny on this Bill. [Interruption.] It does.

What next? The devolution of tax-raising powers to the Chancellor without discussion, challenge or scrutiny? Forced loans? Ship money, going back to the civil war? We will have the delights of considering in detail the Finance Bill’s 72 clauses in Committee in October, but that might change if the Government apply the principle agreed in the withdrawal Bill. Last night we saw all the incensed huff, puff and bluster of Conservative Members, their worry about the Government’s land grab on parliamentary sovereignty, evaporate, as if by magic, before our very eyes.

[Mr Mark Harper (Forest of Dean) (Con)]

I am listening carefully to the hon. Gentleman. He should be careful of complaining about scrutiny. There are rather more Conservative Members than Opposition Members here to scrutinise the Bill. The EU (Withdrawal) Bill, which he references, specifically excludes Ministers from making taxation measures. He should read legislation before commenting on it.

[Peter Dowd]

I saw a few tumbleweeds on the Government Benches last week. If there is a shiver looking for a spine to run up, it need not bother looking on the Government Benches. After last night’s vote, there were none to be found. The national interest is not synonymous with the interest of the Tory party, as most Conservative Members would like to think, although the word “arrogance” is.

--- Later in debate ---

[Peter Dowd]

In a moment.

Last week, we witnessed the Brexit Secretary, also known as Britain’s Brexit bulldog and master negotiator, on the receiving end of more punches from my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), the shadow Secretary of State for Exiting the European Union, than a well-oiled guest at a summer Tory Pimm’s party. What a cocktail of horrors it must have been for the Brexit Secretary.

[Mr Harper]

On a point of order, Madam Deputy Speaker. I wonder whether you could help the hon. Gentleman, as he is five minutes into his speech and appears not to have noticed that we are debating the Finance Bill. I thought the debate on the European Union (Withdrawal) Bill, to which he has devoted all his remarks, took place yesterday. [Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I could not quite hear the right hon. Gentleman’s point of order, but I am guessing what I thought he probably said. I must say that the content of the speech by the hon. Member for Bootle (Peter Dowd) is not a matter for me, but I am aware that we are discussing only the Finance Bill and we must stick to that. The Bill is, however, wide and varied. I have it here and I have looked at it —[Laughter.] And I will make absolutely certain that nobody speaks outwith the order that is due.

--- Later in debate ---

[Mr Mark Harper (Forest of Dean) (Con)]

I am very grateful to be called to speak by you, Madam Deputy Speaker, particularly since we worked so well together in a previous incarnation. I am pleased to be speaking in this debate with you in the Chair.

It is a great pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman), who speaks for the SNP. She referred to the recent general election. I completely agree that while it did not go as well as we would have hoped, it did not go terribly well for her own party. I, for one, am very pleased to be joined on these Benches by a number of excellent Scottish Conservative colleagues. It might surprise her to know that I am equally pleased to be joined in this House by some Labour colleagues who are of a Unionist nature. The one very important thing that came out of the general election was that we strengthen the United Kingdom and the bonds that bring us together, whichever political party people are from, and weaken the forces of nationalism trying to break our country apart.

[Stewart Hosie]

Obviously this has very little to do with the Finance Bill, but for the sake of completeness, the right hon. Gentleman might want to remind the House that the Scottish National party won the election in Scotland with a majority, which is something that the Tories do not have. As for nationalism, I think he should perhaps look in the mirror and reflect on his British nationalism before he casts aspersions on anybody else.

[Mr Harper]

I was not casting aspersions. I was simply reminding everybody that the Scottish nationalists—that is what they are; they are a nationalist party—want to break up the United Kingdom, and I was simply congratulating my colleagues from Scottish constituencies on helping to strengthen our United Kingdom.

[Charlie Elphicke]

I think that my right hon. Friend is being too generous to the Scottish nationalists. They are not simply nationalists; they are incompetent. They were warned on the question of VAT and the police before they took those reforms though, and they went ahead regardless. It is their fault and their mess, and as usual they are trying to blame everyone else for it.

[Mr Harper]

I am grateful to my hon. Friend for that intervention. By the way, Madam Deputy Speaker, I did not think that it would be out of order for me to make some brief remarks about something other than the Finance Bill, given that the Opposition Front-Bench spokesperson spent 10 minutes talking about yesterday and the hon. Member for Aberdeen North spent quite some time doing the same.

Let me move on to finance and the essential capability of the Bill, which is, of course, to raise revenue. My right hon. Friend the Member for Wokingham (John Redwood) talked about that, and of course the central point is about balancing the public finances. I shall not talk about that at length because I was fortunate enough to secure a Westminster Hall debate on the subject which, much like today’s, was well attended, with more than 20 Conservative colleagues and only one Opposition Back Bencher, the hon. Member for Islwyn (Chris Evans). To be fair to him, he spoke extremely well, but he was the only Opposition Back-Bench Member to speak in that debate, which demonstrated that when it comes to balancing the public finances, Opposition MPs are very good at spending money, but not so good at thinking of ways of balancing the books and ensuring that we have sound public finances. That is important because the sound public finances that the Bill helps to put in place will ensure that the country continues to grow and that we can continue to deliver pay rises for people across the country.

[Stella Creasy]

I want to take up the right hon. Gentleman’s challenge. I am sure that he is proud that the previous Government, of which he was part, extended capital gains tax to residential property sales for non-domiciles, so will he join me in suggesting that we close the loophole on commercial property sales? There is one idea that could raise some money for investment in this country.

[Mr Harper]

I am very pleased that the measures in this Bill, which Opposition Front Benchers seem so unwilling to support, raise something like £1.6 billion—I am sure that the Financial Secretary will correct me if I am wrong—on top of the £1 billion we have raised from non-doms. Put together, that is £2.6 billion, which is more than the Labour party raised in all the time it was in government. If the hon. Lady compares Labour’s record in government with ours, she will see that we have been much more effective in raising taxes from non-doms to spend on our public services than her Government ever was.

[Ruth George]

How does the right hon. Gentleman think that the estimate of £1.6 billion to be raised by increased taxes on non-doms will be affected by the increase to two years in the time they have to transfer their funds into offshore trusts, thereby avoiding that increase in taxation? How will that impact on the figures?

--- Later in debate ---

[Mr Harper]

Again, I am sure that the Financial Secretary will correct me if I am wrong, but the Treasury’s estimate of an extra £1.6 billion is, I think, robust. The hon. Lady ought to be aware that in the seven years the Government have been in power, we have introduced significant measures to clamp down on aggressive tax avoidance and evasion, and the Finance Bill continues those measures. We have managed to reduce the tax gap and are collecting more of the revenue that we should collect. Again, that record is better than that of the hon. Lady’s party in office.

[Wes Streeting]

The right hon. Gentleman is right that the Government have tried to take measures to tackle multinational tax avoidance, but they have not been very successful, have they? When the diverted profits tax was announced, it was hailed as the so-called Google tax. That was all well and good, except for the fact that Google did not end up paying very much, did it?

[Mr Harper]

The hon. Gentleman has put his finger on an important point. There are measures that we can take here in the United Kingdom to raise more money from multinational corporations, and we have taken some of them, but to do a proper job we have to take measures in accordance with international partners. That is why I am pleased that the Government have been leading a lot of the work on the OECD’s base erosion project to come up with international definitions of profits and international agreements on how to tax those profits. Individual countries are not able to take those steps by themselves.

[Wes Streeting]

rose—

[Stella Creasy]

rose—

[Mr Harper]

I will give way to the hon. Gentleman again.

[Stella Creasy]

I thank the right hon. Gentleman for—

[Mr Harper]

I am sorry; I meant to give way to the hon. Member for Ilford North (Wes Streeting).

[Stella Creasy]

Age before beauty.

[Wes Streeting]

Imagine lacking both!

The right hon. Gentleman is absolutely right to say that we need more international co-operation if we are to curb the excesses of multinational corporations’ power. Does he therefore share my sadness that we are currently driving a coach and horses through the most sophisticated political and economic alliance in the history of the world—the European Union—which gives us that global power and the leadership to tackle those global excesses?

[Mr Harper]

First, I am clearly not going to get in the way of the sophisticated political alliance between the hon. Members for Walthamstow (Stella Creasy) and for Ilford North. On the EU, I was on the same side of the argument as the hon. Gentleman—I campaigned for remain—but I am also a democrat. The country made a different choice and everyone in the House needs to support the European Union (Withdrawal) Bill, as we did yesterday, to ensure that we have a smooth exit from the EU. However, that does not mean that we should stop co-operating with our international partners. Even when we have left the European Union, I want to work closely with colleagues in Europe on finance, security and trade matters. We can work well with our neighbours, and we can also work with our international partners outside the European Union. Indeed, if we are to deal with global multinationals, we will have to deal with the United States and other countries where those multinationals are headquartered if we are to make progress.

[Rebecca Pow]

My right hon. Friend is making a sound case, but would it not be right to suggest that it is even more important, in the light of Brexit, for us to be in total control of our finances at home and that we should draw in all the money that is owed to us in the best possible ways? That is going to be so important in keeping us productive.

[Mr Harper]

I agree with my hon. Friend. Indeed, that is why the Financial Secretary to the Treasury set out a number of important areas in the Bill that deal with those issues.

I want to pick up on an issue that, interestingly, has been referred to by a number of colleagues. My right hon. Friend the Member for Wokingham (John Redwood) touched on the question of public sector productivity, and the hon. Member for Aberdeen North, who speaks for the SNP, also alluded to productivity. I think the hon. Lady got it a little wrong, however, when she talked about improving productivity by giving people higher pay. It is actually the other way round. We all want our constituents to get a pay rise—I think that that unites everyone in the House—but the only sustainable way to drive up pay in the public and private sectors is to improve productivity in both sectors. I shall set out a few areas in which we could do that.

First, however, I want to make a slightly humorous point to the Financial Secretary to the Treasury. I do not want to see an increase in the productivity of the parliamentary draftsmen in Her Majesty’s Treasury. Producing Finance Bills as thick as this one is perhaps not what we ought to be doing. I understand the complexity of these matters—I declare an interest as a non-practising chartered accountant—but I know from talking to colleagues in the business that they do not enormously welcome Finance Bills this thick. Much as this might upset them, I have to say that creating jobs for tax accountants is also perhaps not something that we ought to be doing. Slimmer Finance Bills with simpler, less complex legislation introducing lower tax rates from which we collect more revenue are the way to go. If we were to do that, we would be doing everyone a service, and those in the tax business could perhaps find more productive things to do. This gentle chiding is perhaps directed less towards my right hon. Friend the Financial Secretary to the Treasury than towards officials in his Department.

[Craig Mackinlay (South Thanet) (Con)]

rose—

[Mr Harper]

I shall give way to a fellow chartered accountant.

[Craig Mackinlay]

I declare an interest: I am a practising chartered accountant, when I have the time. My right hon. Friend said that lower rates can produce more revenue. Is that not exactly what has happened since 2010 with our reduction in corporation tax rates, which is paying the dividend of a greater return for the Treasury?

[Mr Harper]

My hon. Friend makes a very good point, and he is exactly right. This was one area in which the debate about corporation tax rates during the general election campaign became rather confused. The Opposition kept saying that we were cutting corporation tax, and making it sound as though we were therefore going to collect less revenue. What we were doing, of course, was to reduce corporation tax rates. The purpose of doing so was to collect more corporation tax revenue, both to attract more businesses to locate in the United Kingdom and to enable the businesses that are already here to be more successful. That is an admirable aspiration but it is, as my hon. Friend said, what has happened in practice.

One of my concerns about the Labour party’s plans is that an increase in corporation tax rates would lead to the collection of less corporation tax revenue; and we would have less money, rather than more, to spend on our public services and our hard-working public sector workers. [Interruption.] I see Opposition Members, including those on the Front Bench, shaking their heads, but since we cut corporation tax rates, we have collected more corporation tax—

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

indicated dissent.

[Mr Harper]

It is no good the shadow Minister shaking her head. The fact is that that is exactly what has happened. We are in the business of collecting revenue to spend, not putting up rates to punish people in order to make ourselves feel good.

[Sammy Wilson]

Does the right hon. Gentleman accept that that has been shown to be true not only in the case of corporation tax but, in the Irish Republic, in the case of VAT? When VAT was reduced on aspects of the hospitality industry, tax revenues actually went up because that reduction generated more business. Indeed, there may be lessons to learn on VAT rates for the hospitality industry in the United Kingdom.

[Mr Harper]

I am always grateful to have excellent suggestions from colleagues in Northern Ireland. It is worth remembering that they bring a particular perspective to Brexit, given that they have a land border with the Irish Republic. We need to be very conscious of tax effects across the border as we leave the European Union.

I set out in my Westminster Hall debate, which I will not reprise now, our good record on economic growth since 2010, our reduction of the deficit and the significant number of jobs that businesses in the United Kingdom have generated. That is all very positive. But I am perfectly happy, as are the Government, to accept that there is one area in which the country’s economic record since 2007-08—under both the Conservative party and the Labour party, when it was in government—has been less impressive, and that is productivity. Since the economic crash, productivity growth has stagnated, and the level of productivity is significantly below that of the G7.

As I have said, it is essential to raise productivity if we are going to increase pay in both the public and private sectors. I want—I think all Conservative Members want—to give public sector workers a pay rise, just as much as Opposition Members do. But we understand that that has to be paid for. There is also an element of fairness. Private sector wages fell, in cash terms, after the crash, but that did not happen in the public sector. The work done by the Institute for Fiscal Studies shows that after a number of years of pay restraint, pay in the public and private sectors is now roughly in balance. It is, perhaps, a little ahead in the public sector if we take account of the more generous pension schemes. I want workers in both the private sector and the public sector to be properly rewarded; I do not want to favour workers in one sector at the expense of those in the other. That idea is missing in the comments we have heard today from the trade unions about public sector workers. We have to have a balanced settlement for workers across the economy, not just those in one area of it.

It is not clear what has caused the lack of growth in productivity. It will probably not surprise anyone in the House to learn that according to economists—I apologise if there are any economists in the Chamber; I stopped my economic training when I left university—a number of things seem to be at the root of this, one of which is that there could well be a lack of wage growth, which means that companies are not investing in capital equipment to make work more effective. As a former Minister for Immigration, I think that having unlimited unskilled migration—it is definitely at the lower end of the labour market, keeping wage growth low—has certainly not encouraged companies to invest in machinery and equipment to drive up productivity. Leaving the European Union gives us the opportunity to reduce importing unskilled workers from the current level. That does not mean reducing it to zero, but reducing it a little will help to improve such an incentive.

[John Redwood]

To help my right hon. Friend, let me say that there is a good reason and a bad reason why productivity has been disappointing. The good reason is that we have generated lots of lower-value jobs—it is better to have a job than no job—and we now need to help those people to work smarter so that they can be paid better. [Interruption.] Labour Members do not want jobs for their constituents, but I do, and I then want to go on and get them, when they have been trained and skilled up, into better-paid work. The bad news is that we have lost a lot of top-end jobs in the North sea oil industry because of the maturity of the fields and the decline of output, as well as the hit on the price, and we have also lost quite a lot of top-end jobs in the City—some people did not like those top-end jobs very much, but the crash destroyed quite a lot of them in the City—and that has obviously depressed the overall productivity figures.

[Mr Harper]

My right hon. Friend makes a very good point. I agree with him that the response to what he said about the growth in jobs was very disappointing. One thing I touched on in my Westminster Hall debate was the comparison between this country and some of our European neighbours. I must say that in Britain, where the level of unemployment for young people has fallen from 20% to 13%—I accept that that is still too high—the record, particularly for younger people, is phenomenally better even than in countries such as France, where the rate remains at 20%, while in some European countries that have completely lost control of their public finances, the rate is—

[John Redwood]

Fifty per cent.

[Mr Harper]

My right hon. Friend is absolutely right. Half of young people in Greece are unemployed, and that is after a significant number of other young people have come to countries such as the United Kingdom and Germany to work. I must say that that is not a sustainable economic model. I suspect there is going to have to be a shake-up in the eurozone at some point—more fiscal transfers, or looking at the currency—because it is not sustainable for half of a country’s young people to remain unemployed for a considerable period.

Thankfully, we have not had to confront such a problem in our country—we have a different set of challenges—but my right hon. Friend is right about productivity. Let us look at the Bank of England analysis. He has already referred to falling productivity in the oil and gas sector and the financial sector. As I have said, there has been the impact of the financial crisis on allocating capital. I think there is now enough capital in the economy, but the issue is about getting it to the right businesses. There has also been a slowing rate of growth in innovation and discovery, as well as some inaccuracies in the data.

There is no single thing that we can do, which is why I am very pleased that the Government have set out a range of options in the productivity plan published by the previous Chancellor, George Osborne, in his Budget immediately after the general election in 2015, and in the measures set out by my right hon. Friend the present Chancellor, who was in the Chamber earlier. In relation to the national productivity investment fund, the Chancellor has set out some very important areas of spending, which I will briefly mention.

The first area is accelerating the housing supply, which is absolutely critical. I share the concerns expressed by Opposition Members. It is absolutely critical that we look at growing the housing supply urgently so that younger people, and not only younger people, can find affordable houses for them either to rent or to aspire to buy. A very significant sum in the national productivity investment fund will go towards that incredibly important area. The second area is investment in transport. I welcome today’s announcement about the very significant investment in the A303 and the significant amount of money to ensure that we properly protect the ancient monument of Stonehenge. That is very important for me and colleagues from south-west England. We are also seeing improvements to rail, and to the missing link on the A417—the bit of the road that is not dualled—in which the Government are committed to investing. Therefore, there is investment in some important areas of transport.

I also welcome the conversations that my right hon. Friend the Secretary of State for Transport is having with colleagues in the north of England about significant investment that we could make on top of HS2 to connect cities in the north properly. My understanding is that if we see an agreed plan from Transport for the North, the Government will be very keen to fund that to drive productivity growth in the north of England, in the same way that significant investments in road infrastructure have driven productivity growth in London and the south of England.

It is important that we invest in other transport infra- structure such as airport connectivity. Particularly in the light of our leaving the European Union, Britain needs to be able to join up with global markets all around the world. I am particularly keen, as a south-west MP, for the Government to move forward on the Heathrow option and install that extra capacity so that businesses in my constituency, the south-west of England and elsewhere can be joined up properly with the rest of the world.

[Sammy Wilson]

Does the right hon. Gentleman accept that an important issue in respect of connectivity and airports is the detrimental impact that high levels of air passenger duty have on the opening of new routes and on encouraging people to use existing routes from the United Kingdom to other parts of the world? The Government need to look at that seriously. What should we do about air passenger duty, and how can we stop it being detrimental to the kind of connectivity he is talking about?

[Mr Harper]

The hon. Gentleman makes a very good point. It would be helpful if we reduced the level of air passenger duty, but the Government have to be mindful, since I have heard lots of bids in the debate for money to be spent, that we also have to raise it. If we want to reduce air passenger duty and we think that that will reduce the amount of revenue we collect, we will have to look at areas where we can reduce spending, at other taxes or at growth in productivity in the public sector, as my right hon. Friend the Member for Wokingham said, in order to do that. It is not a simple question. The Chancellor will no doubt look at it in the round as he makes his Budget judgments later this year.

[Kit Malthouse (North West Hampshire) (Con)]

I understand my right hon. Friend’s explanation, but perhaps the point the hon. Member for East Antrim (Sammy Wilson) was making—one with which I have some sympathy—was that, in the same way that we make the argument about corporation tax that if we lower the rate we will collect more money, perhaps if we lowered air passenger duty more people would fly and we would gather more revenue. There may also be more economic activity generally around the airports that would see an increase in passengers.

[Mr Harper]

My hon. Friend makes a very good point. I accept that this is an area that is difficult to model, but when the Treasury does its Red Book and its economic forecasting—I think I understand this correctly —it uses a largely static model for tax forecasting. It assumes that if we reduce the rate of tax, we will collect not more money, but less. I understand that there is difficulty in doing the opposite, which is a dynamic model that tries to take into account the fact that there might be more economic activity and that looks at whether more or less revenue would be raised. I accept that that is a difficult process and I suspect that, on balance, the Treasury is trying to be relatively conservative with a small “c”. However, there is merit in looking at that. The Financial Secretary might want to consider the extent to which the Treasury, in making judgments about taxes, can look at how much we would drive up economic activity if we were to reduce tax rates, and therefore whether we would produce more tax.

[Kit Malthouse]

There is a particularly strong case where aviation is concerned—a number of airlines, such as easyJet and Ryanair, rely on dynamic pricing and the elasticity of demand to fill their planes. They recognise that the lower their prices, the more likely they are to fill their planes, and that the greater frequency with which they fly their planes, the more people are likely to come. In my view, lower APD would therefore result in more economic activity and more people flying.

[Mr Harper]

My hon. Friend has made that point powerfully and I see that it has landed with the Financial Secretary. We will see whether it fructifies into a policy shift.

[Sammy Wilson]

rose—

[Mr Harper]

Let me make a little more progress, then of course I will give way.

I would like to make two more points before I finish, Madam Deputy Speaker. The other area I wanted to mention in relation to the national productivity investment fund, which is incredibly important for my constituency, is the acceleration of the roll-out of broadband, in particular the full fibre roll-out. We have made considerable progress in rolling out broadband. By the end of this year, I think 80% of my constituents will have superfast broadband. In Gloucestershire we have a plan, with a new supplier, to roll out to the remaining households to meet the Government’s commitments under the universal service obligation. That is welcome. The more we can do to extend that across the country to increase those speeds with full fibre to the home and to business will be very welcome.

Finally, given the competition we face in the world, and the challenges, rightly raised, of ensuring that, as we leave the European Union, we have a global outlook and we remain competitive, it is very important for Ministers to have a sense of urgency in driving forward developments in housing, productivity and investment in road infrastructure. As a constituency MP, I know that the length of time it takes to build new houses and roads and to roll out broadband is very frustrating. I am sure that frustration is shared by Members across the House. One thing Treasury Ministers could do, when thinking about the settlements they make with Departments, is to reward those that accelerate progress. Perhaps Departments that deliver against the Government’s objectives more quickly could be rewarded with more money to go ever faster, and Departments that are a little slower at delivery perhaps might have some of their funding removed and moved to higher-rewarding parts of government where things are delivered more quickly. That might boost public sector productivity, as my right hon. Friend the Member for Wokingham mentioned.

The Finance Bill is a good start. It raises some much needed revenue to help to continue balancing the books. I, for one, will have no trouble supporting it in the Division Lobby today.

Oral Answers to Questions

Mark Harper Excerpts

Tuesday 18th July 2017 Commons Chamber

[Elizabeth Truss]

We have made sure that basic rate taxpayers are paying £1,000 less tax by raising the personal allowance. We are also introducing the national living wage, bringing in a £1,400 rise in take-home pay for the lowest earners.

[Mr Mark Harper (Forest of Dean) (Con)]

The important thing for ensuring that people get a wage from an employer is to make sure that they have a job. Will the Chief Secretary to the Treasury welcome the record fall in unemployment to a 42-year low, particularly among young people, which is giving them much better opportunities in Britain than those available in most other European Union countries?

[Elizabeth Truss]

My right hon. Friend is right. We now have the lowest levels of unemployment since 1975, thanks to the economic policies pursued by this Government to improve skills and infrastructure, and to take sensible decisions on public sector pay.