Budget Leak Inquiry

Debate between Matt Hancock and David Gauke

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right. Yesterday’s was a Budget of substance, this is a Government of substance and we will continue to get the country out of the mess that we inherited.

[Matthew Hancock (West Suffolk) (Con)]

The hon. Member for Nottingham East (Chris Leslie) based his case on different speculation in the newspapers about the future of the 50p rate. Does the Minister not recall that when the 50p rate was introduced by the previous Government, the first news of it came from a newspaper, not the Dispatch Box?

[Mr Gauke]

I am sure that my hon. Friend is absolutely right. My only query is that I thought it might have been on the television; but if he says it was in a newspaper, I am sure that he is right.

Oral Answers to Questions

Debate between Matt Hancock and David Gauke

Tuesday 1st November 2011 Commons Chamber

[Mr Gauke]

As I said in my answer, we are introducing more apprenticeships, and young people will have priority in the Work programme. The hon. Lady highlights youth unemployment in Halifax. The last estimate showed that it increased by 0.6% from June 2010 to March 2011—but I also have to point out that from 2004 to 2010, youth unemployment increased by 8.5% in Halifax.

[Matthew Hancock (West Suffolk) (Con)]

Does the Minister share my concern that even during the boom years youth unemployment rose? Will he join me in commending the work placement scheme in Haverhill in my constituency? The work programme and the new flexibility at the jobcentre means that young people can be put into work placements, and more than half of those put in placements end up getting a permanent job.

[Mr Gauke]

Clearly the news from Haverhill is very encouraging, and I am delighted to hear it. I agree with my hon. Friend’s comment; it is striking that youth unemployment started increasing in 2004, at a time when the economy appeared to be in good shape.

PAYE Contributions

Debate between Matt Hancock and David Gauke

Wednesday 8th September 2010 Commons Chamber

[Matthew Hancock (West Suffolk) (Con)]

The Minister said that one reason why some payments will have to be so big is that there has not been a reconciliation for two years. Can he explain why moneys were not required back from taxpayers up and down the country last year in the months running up to the general election?

[Mr Gauke]

My blood ran slightly cold for a moment when I thought that the TaxPayers Alliance had managed to get in here, but I know that my hon. Friend is a good representative for taxpayers. As for last year, it is fair to say that the introduction of the computer system was a relevant issue, but none the less the lack of a reconciliation has exacerbated the problem. The fact that nothing was done last year prior to the election has left us with a bigger problem this year. He can draw his own conclusions.

Finance Bill

Debate between Matt Hancock and David Gauke

Tuesday 20th July 2010 Commons Chamber

[Mr Gauke]

If that is the point that the right hon. Gentleman is getting at, I must point out what the OBR made very clear in the Red Book. That point is that it is misleading to make a straight comparison between the growth figures that were projected on the basis of market expectations of interest rates, which were lower as a consequence of the anticipated fiscal tightening that this Government promised to deliver and that we have delivered, and the forecasts that do not take that into account. That is a point that we have gone over a number of times. The OBR said that such comparisons were potentially misleading, so if that idea is what is driving the right hon. Gentleman’s queries, I must point out to him that the OBR would not accept that.

[Matthew Hancock (West Suffolk) (Con)]

Is not one explanation the idea that the OBR came forward with growth forecasts that were reasonable and at least had a hope of being accurate rather than the hopelessly over-optimistic growth forecasts put in place by the previous Government?

[Mr Gauke]

My hon. Friend might well have the answer. One point that we learned from Lord Mandelson in the course of his much-loved memoirs is that the then Chancellor, who is now shadow Chancellor, apparently accused the then Prime Minister of having a “ludicrously over-optimistic” view of what the growth forecasts would be and about

“Britain’s ability to support such a large and expanding deficit.”

That might well be the explanation.

Office of Tax Simplification

Debate between Matt Hancock and David Gauke

Tuesday 20th July 2010 Commons Chamber

[Mr Gauke]

We have not taken a view on that yet. We have to understand what the role of the OTS will be—to publish recommendations that will be, by necessity, in the public domain. People can debate those matters, which we think is a valuable purpose in itself. Whether the Treasury Committee needs to endorse every appointment made by the Government is a debate that we should have.

[Matthew Hancock (West Suffolk) (Con)]

Is the Minister aware that one tax expert has described the “Gauke doctrine” as one of the most important changes in improving the competitiveness of our tax system—so long as it is delivered properly? Will he assure me that the Government will work to ensure that what has been put down on paper in the Budget will be delivered properly over this Parliament?

Finance Bill

Debate between Matt Hancock and David Gauke

Monday 12th July 2010 Commons Chamber

[Matthew Hancock]

I shall keep this contribution extremely brief, given the hour. I was surprised by some of the arguments made by Opposition Members. I am not all that surprised that the right hon. Member for East Ham (Stephen Timms), the shadow Minister, does not support amendment 21, which was moved by the hon. Member for Nottingham East (Chris Leslie), not least because before the election he said we would need any bank levy to be globally agreed. Indeed, the current shadow Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said:

“Countries can’t go it alone. It is very important that we do this internationally”.

Conservatives and Liberal Democrats campaigned during the election for a unilateral bank levy, no matter what happened in the rest of the world, so it is not surprising that we do not listen to Opposition Members who argue that they are now in favour of one. They have performed a U-turn in an extremely short time.

Another point I want to make is that the shadow Minister said that his party’s policy is that corporation tax should be the lowest in the G7, but Italy’s corporation tax is now 27.5% and Canada’s is set to be reduced to 27.2%, which means that Labour’s policy is to reduce corporation tax, including on the banks, as he just confirmed, without the bank levy. A bank levy would more than offset the corporation tax reductions, so Labour Members are in all sorts of a tumble on this.

Everybody will note the difference between the Government, who argued before the election that we needed a unilateral bank levy and who are delivering it within seven weeks, and Labour Members, who argued that we should not have a bank levy, before performing a U-turn within 10 weeks.

[Mr Gauke]

Amendments 21, 34 and 50 relate to the impact of the corporation tax cuts on the banking sector. Amendment 21 would leave the

“main rate of corporation tax for financial year 2011…at 28%”

for

“banking institutions”, disapplying the 1% decrease, and amendments 34 and 50 ask for an assessment of the impact of the rate reduction on banks.

The proposals are helpful. Understandably, there is a frustration with the banking sector and a desire that it pay a fair share. The Government share that belief. We think that banks should make a fair contribution in respect of the risk that they pose for the UK financial system, which we have seen in the past few years. That is exactly why we announced in the Budget the introduction of a bank levy from 1 January 2011. Tomorrow, my hon. Friend the Financial Secretary to the Treasury will announce a public consultation with a view to implementing the levy on that date, and the measure will be included in next year’s Finance Bill.

The levy is a surgical approach, intended to encourage banks to move to less risky funding profiles, and a contribution reflective of economic risk. A tax based simply on profits, such as corporation tax, is not related to risk and will not create the behavioural effect that we believe the banking levy will achieve.

The overall impact on banks of the proposed reduction in corporation tax depends on a number of factors, and I will provide some details in a moment. None the less, I should like to put it on record that it is entirely right that hon. Members ask such questions. My hon. Friend the Member for St Ives (Andrew George) made a thoughtful and probing speech, and I was also interested to hear the comments of the right hon. Member for East Ham (Stephen Timms). However, I wondered, given his concern about the impact on the banking sector, precisely which angle he was coming from. Those who remember the debate prior to the general election will recall, for example, the remarks of the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling) who, in an interview on “The Andrew Marr Show” on 21 March, argued against proposals for a unilateral bank levy, saying that he thought it could work only if there were international agreement, as my hon. Friend the Member for West Suffolk (Matthew Hancock) said.

Of the Conservatives’ policy of introducing a unilateral bank levy, which was also a policy of the Liberal Democrats, the then Chancellor said that we were taking a hell of a risk, given that the banking industry employs more than 1 million people in this country. He seemed to be somewhat concerned that we were going to far and too hard. I do not know whether the shadow Minister is worried because the proposals are too tough on the banks, or because they are not tough enough.