Oral Answers to Questions

Mel Stride Excerpts

Tuesday 17th April 2018 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

2. If he will reduce taxes on small businesses.

[The Financial Secretary to the Treasury (Mel Stride)]

I thank my hon. Friend for his question. The Government are bearing down tirelessly on the tax burden on businesses of all sizes, reducing corporation tax from 28% for large companies in 2010 to 19% today, and for small businesses from 21% to 19%. We will go still further, reducing the burden to 17% by 2020. For unincorporated businesses, we are, of course, increasing the personal allowance, in the previous Budget, to £11,850. That will increase further to £12,500 in 2020—further relief to many small businesses.

[Mr Robertson]

I thank the Minister for that encouraging answer. Businesses are, of course, unpaid tax collectors for the Exchequer and the Federation of Small Businesses recently estimated that businesses spend, on average, three working weeks a year on tax compliance. Is there anything further that the Minister can do to reduce that kind of expensive burden on businesses?

[Mel Stride]

I thank my hon. Friend for raising the FSB’s report. I have not only read it, but met the FSB to discuss the report in detail. I highlight to the House two of its important recommendations: one is around better guidance on taxation, and I have tasked officials on that mission within HMRC; and the second is Making Tax Digital, which we are rolling out for VAT-registered companies in 2019. The report states that this

“presents an opportunity to simplify and speed up tax compliance.”

[Ruth George (High Peak) (Lab)]

Is the Minister not concerned that the Office for Budget Responsibility report into welfare trends from January this year estimates that £1.5 billion of support for small businesses will be taken from them through the minimum income floor in universal credit? The Select Committee on Work and Pensions heard that 70% of small businesses currently last for 18 months, but that that will reduce to 20% for those on universal credit. Small businesses will be strangled at birth.

[Mel Stride]

The hon. Lady neglects to mention the fact that small business confidence in the UK is now in positive territory for the first time in many years. We have gone to great lengths within the tax system, as I have just explained, to reduce the burden on small businesses. We rolled out £9 billion of business rates relief in the 2016 Budget and a further £2.3 billion of relief in the autumn Budget last year. We will continue to be on the side of small businesses.

[Derek Thomas (St Ives) (Con)]

A significant number of businesses in west Cornwall and the constituency of St Ives, which I represent, are facing extreme hardship because of business rate increases in 2017 and 2018. This is becoming a burden that is too great for them to bear. What immediate help can the Minister make available to these hard-working business owners?

[Mel Stride]

As I have just identified, the Government have done a huge amount to reduce the burden of business rates. We recognise the important fact that these taxes need to be paid, irrespective of whether businesses are profitable or otherwise. That is why we have gone to such lengths, providing £9 billion of relief in 2016, including transitional relief for those facing the largest potential increases in business rates, and a further £2.3 billion by way of bringing forward by two years the change in the indexation of business rates from retail prices index to consumer prices index, saving businesses £2.3 billion over the next few years.

[Rachael Maskell (York Central) (Lab/Co-op)]

Business rates are really hitting businesses in York, particularly in the retail sector. This is having a huge impact on our city. On 8 March 2017, the Chancellor promised this House a complete review of business rates, yet we have only seen sticking plasters from the Government. When will that review begin?

[Mel Stride]

The business rates review is being undertaken by the Ministry of Housing, Communities and Local Government.

[Andrea Jenkyns (Morley and Outwood) (Con)]

3. What fiscal steps his Department is taking to increase productivity.

--- Later in debate ---

[Mr Alister Jack (Dumfries and Galloway) (Con)]

9. What assessment he has made of the effect of the recent reduction in corporation tax on employment and wages.

[The Financial Secretary to the Treasury (Mel Stride)]

There can be no doubt that this Government’s record on reducing corporation tax from 28% in 2010 to 19% now, and further on down to 17% in 2020, has driven growth, kept prices down, pushed wages up and, indeed, led to more employment. Since 2010, we have seen more than 3 million more people in employment, and, as the Chief Secretary to the Treasury has just outlined, the lowest unemployment since 1975.

[Mr Jack]

Successful businesses create jobs and pay taxes. What steps are the Government taking to back businesses that play by the rules?

[Mel Stride]

My hon. Friend uses the expression “play by the rules”. I should make it very clear to the House that those that do not play by the rules will be clamped down on by Her Majesty’s Revenue and Customs. We have brought in £175 billion in respect of clamping down on avoidance, evasion and non-compliance since 2010. We have, as my right hon. Friend the Chancellor has outlined, the lowest tax gap in our history, at 6%. Those who play by the rules will benefit from our pro-business policies: bringing taxes down, providing relief on business rates, and other measures such as the employment allowance, worth £3,000 for the first employee as a relief on national insurance contributions.

[Alison McGovern (Wirral South) (Lab)]

When it comes to employment and wages, and the impact that corporation tax cuts have had, we have heard a lot of crowing from Ministers this morning, but we all know that our economy is wildly different, depending on where people live. Has the Minister asked for a distributional analysis of the impacts that he has just been talking about?

[Mel Stride]

We have debated at great length the issue of distributional analysis, in this Chamber and around the Finance Bill and other measures. The hon. Lady will know that all tax measures are subject to TINs and to various assessments. We are also bound by the Equality Act 2010 when we take decisions in respect of taxation. As a Minister, I can assure her that I take my duties in that respect extremely seriously.

[Colin Clark (Gordon) (Con)]

Businesses in my constituency welcome the cut in corporation tax, but does not my right hon. Friend share my concern that businesses in Gordon are being damaged by punitive business rates and the highest income tax rates in the United Kingdom?

[Mel Stride]

My hon. Friend raises an important issue, which is probably best listened to very carefully by some of those on the Opposition Benches. I can only speak for the UK Government here in this House, and we will continue to be on the side of businesses, small and large, to ensure that their tax burden is as low as possible.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Lines ag and bg of the spring 2017 Budget predicted that the cuts in corporation tax would cost the Treasury over £24 billion by 2022. If the Treasury had had that money to invest in infrastructure and construction, how many well paid construction jobs could the money have created?

[Mel Stride]

Let me make two simple points. First, corporation tax cuts are clearly to the benefit of businesses who employ people, create wealth and generate the taxes we need to fund our vital public services. Secondly, we have cut corporation tax from 28% to 19% since 2010, and the corporate tax take has risen by 50%.

[Mr Speaker]

A moment ago the Financial Secretary was banging on about TIMS. I was not informed about this matter, but the Clerk has consulted his scholarly cranium and he tells me that it stands for Treasury information management systems.

[Mel Stride]

Tax impact notes, Mr Speaker.

[Mr Speaker]

Oh, TINs! Well, I am sure everybody attending to our proceedings was perfectly well aware of what the right hon. Gentleman had in mind. I am sure I was in a minority of one in not knowing. And what are those pigs I see flying in front of my very eyes?

--- Later in debate ---

[Dr Paul Williams (Stockton South) (Lab)]

11. What progress has been made on implementing the Building our Future programme.

[The Financial Secretary to the Treasury (Mel Stride)]

Progress has been excellent on the Building our Future programme. We have now secured locations for 12 of the 13 regional hubs and negotiations are continuing on the final site.

[Dr Williams]

The HMRC office in Stockton South is closing. Hundreds of staff are being offered jobs in Newcastle, which involves a three-hour minimum round trip that people say they cannot make, because their family lives are built around a job that they are proud of. Will the Minister please meet me given what we now know about the impact that the closure will have on Teesside and its people?

[Mel Stride]

The hon. Gentleman will know that all staff who may be affected will have face-to-face consultations with HMRC staff a year before any changes occur. Some 90% on average of those across the programme will be in a position of having left employment or retired, or finding it perfectly acceptable to move, in this case to Newcastle. I would be delighted to meet the hon. Gentleman to discuss the issue.

[John Howell (Henley) (Con)]

12. What discussions he has had with Cabinet colleagues on ensuring that people have high-tech skills to increase productivity.

--- Later in debate ---

[Nigel Huddleston (Mid Worcestershire) (Con)]

T2. Does the Chancellor agree that consideration should be given to making expenditure such as gym membership tax deductible in recognition of its health benefits and, ultimately, cost-saving benefits for the NHS?

[The Financial Secretary to the Treasury (Mel Stride)]

Perhaps I am in need of the gym, Mr Speaker.

I shall take that as an early Budget representation, and my hon. Friend should be aware that we already have various tax-free reliefs in respect of health in the workplace—check-ups, eye tests, the cycle to work scheme, on-site workplace gym membership and welfare counselling. Of course, our soft drinks industry levy has led a number of companies to improve the quality of their products healthwise.

[John McDonnell (Hayes and Harlington) (Lab)]

In advance of today’s debate on Syria, I welcome financial measures to sanction the Syrian regime. According to past Government figures, £151 million of assets belonging to leading figures in the Assad regime in Syria have been frozen by authorities here. Since then, 261 Syrian individuals have been listed as financial sanctions targets in the UK. Can the Chancellor tell the House what the Treasury’s best and latest estimate is of the total value of assets held in the UK by individuals connected with the Syrian regime?

--- Later in debate ---

[Alex Chalk (Cheltenham) (Con)]

T5. What assessment have the Government made of the prospects for real wages in our country?

[Mel Stride]

As my hon. Friend will know, this morning we were given the good news that we are now back in positive real-wage territory. He will also know from the projections of the Office for Budget Responsibility at the time of the last Budget that we anticipate an increase in real wages throughout the projection period.

[Paul Blomfield (Sheffield Central) (Lab)]

T6. The number of people with unmanageable payday loan debt has more than halved since the Financial Conduct Authority introduced a total cost cap more than three years ago following pressure from Members on both sides of the House. New analysis by Citizens Advice suggests that extending the cap to doorstep-loan and rent-to-own markets would have the same impact on problem debt in those sectors, and could save consumers up to £154 million a year. Will the Chancellor consider taking such action?

--- Later in debate ---

[Liz Twist (Blaydon) (Lab)]

T9. Many NHS trusts have set up subsidiary companies to take advantage of a VAT loophole to save money, often at the cost of the lowest-paid staff. Does the Chancellor have any plans to close this tax loophole and place the NHS on the same VAT footing as local government?

[Mel Stride]

I thank the hon. Lady for her question. Perhaps this is something that I could take up with her offline so that I fully comprehend the exact point she is raising.

[Alex Burghart (Brentwood and Ongar) (Con)]

Last year, more businesses were created in the UK than in any other developed economy. Does that not show that the Government’s policy towards businesses is working, and what will the Treasury do to build on that success?