Oral Answers to Questions

Mel Stride Excerpts

Tuesday 6th November 2018 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

2. What recent assessment he has made of the potential effect on tax revenues of the UK leaving the EU.

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

The Government will be coming forward with a full and appropriate analysis of the impact of the deal we negotiate with the European Union well in time for the meaningful vote.

[Christian Matheson]

The Government’s own figures demonstrate between a 2% and 8% hit on the broader economy after Brexit. Is it not the case that there is no form of Brexit that will not have a massive impact on the public finances and, therefore, on public services?

[Mel Stride]

We are in the middle of a negotiation. At the appropriate moment, when we know exactly what the deal is—the deal that is available and that we have negotiated—we will of course come forward with a full and comprehensive analysis of both the fiscal and the economic impacts of that deal.

[Charlie Elphicke (Dover) (Ind)]

Is it not important that the public and Parliament are able to scrutinise not just the Treasury assumptions on tax as we leave the European Union but the Treasury assumptions on all aspects of the economy under the Treasury’s CGE—computable general equilibrium—model? Will the Treasury publish that model as soon as possible?

[Mel Stride]

As I say, we will come forward with a full and appropriate analysis. Of course, prior to the meaningful vote, the Government will ensure that there is appropriate time to fully debate all these matters.

[Alison McGovern (Wirral South) (Lab)]

Our country already suffers from brutal inequality, so will the Minister say whether that analysis will be broken down by region and sub-region so we can see exactly what the impact of Brexit will be on the communities we represent?

[Mel Stride]

As the hon. Lady will know, under this Government income inequality is far lower than it was under Labour. I am not going to start getting involved in a running commentary on the negotiations and the various impacts thereof, as that would not be helpful, other than to restate that a full and appropriate analysis will be provided to the House prior to the meaningful vote.

[Mr Richard Bacon (South Norfolk) (Con)]

Will Ministers consider moving the trigger point for the application of the zero rate of VAT for new build dwellings as defined in the Town and Country Planning Act 1990, which would end the unintended discrimination, both before and after we leave the EU, against self-build and custom house building projects, while not harming Government revenue?

[Mel Stride]

That is possibly the most ingenious question I have ever heard in this House, and it is indicative of my hon. Friend’s passion for and commitment to this matter. I recognise the issue he raises on the zero-rating of new builds, on which he wishes to extend the scope somewhat. I believe that my office has now arranged a meeting with him, and I look forward to it taking place within the coming days and weeks.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Will the Minister ensure that both he and the Chancellor take steps in advance of the next Budget to ensure that thousands of jobs can be created, particularly in Northern Ireland, by looking at air passenger duty and at VAT in the hospitality sector?

[Mel Stride]

As the hon. Gentleman will know, we have consulted on APD and VAT on tourism in Northern Ireland, and we have now reported back on that consultation. We are setting up a technical working group to look specifically at the issue of short-haul APD to see whether there is some way in which that could be addressed.

[Sir Desmond Swayne (New Forest West) (Con)]

Even before that great day, what reassurance can the Minister give to those of us who hold on to the quaint belief that Budgets should balance?

[Mel Stride]

We take a very balanced approach to the economy, which of course includes ensuring that we stick rigorously to our fiscal rules. We have met the two intermediate rules a full three years early. We continue to bear down on the deficit, and debt as a percentage of GDP will continue to fall throughout every year of this Parliament.

[Kirsty Blackman (Aberdeen North) (SNP)]

Each additional EU citizen working in Scotland contributes £10,400 to Government revenue. What assessment has the Minister made of the reduction in tax revenue as a result of the ending of free movement?

[Mel Stride]

I am sorry to keep reverting to the same answer, but it is effectively the same question that I keep being asked: “What will the analysis look like when the deal is concluded?” Of course that prompts the question of what exactly the deal will be. In the fullness of time, when the deal is agreed, we will come back to the House with a full analysis.

[Kirsty Blackman]

Her Majesty’s Revenue and Customs can collect customs duties only if it has a working customs system, so how is the roll-out of the customs declaration service going? How is HMRC going to achieve the Government’s commitment in the Red Book to halve the time it takes to apply for customs trusted trader status?

[Mel Stride]

The hon. Lady raises the issue of the CDS system. The current expectation is that that will be fully functioning by the end of March next year, which means we therefore have a robust back-up in the extension of the CHIEF—Customs Handling of Import and Export Freight—system. This is to make sure that that gears up for the huge increase in the number of customs declarations that will need to be made in a no-deal situation. We will of course continue to work hard on that matter.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

Further to the answer the Financial Secretary gave to my hon. Friend the Member for Dover (Charlie Elphicke), will he publish, when he is publishing the CGE analysis, the assumptions underlying all potential EU exit scenarios, including those on World Trade Organisation terms and with a free trade agreement?

[Mel Stride]

The commitment we have made is that the deal agreed between us and the EU—we are confident we will achieve exactly that—will be fully analysed in an appropriate way and delivered to this House so that during the days in the run-up to the meaningful vote all Members of the House will have an opportunity to properly study that analysis.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Last week’s Budget certainly did not end austerity, but we all heard that things could be even worse in the event that the Government fail to get a good Brexit deal. In the Chancellor’s own words, that would necessitate a new Budget entirely, so may I ask the Financial Secretary an entirely straight question: how will the Government react to the loss of even 10% of our tax revenues from financial services in the now likely event that our market access is diminished?

[Mel Stride]

The hon. Gentleman raises the issue of financial services, and of course he will be aware that recent progress has been made on that issue with our European partners in the negotiation. As for the impact of an actual deal, as I say, we do not know exactly what that deal will look like at this stage. When we do, we will come forward to the House with an appropriate announcement.

[Jonathan Reynolds]

The reason the Minister keeps having to give the same answer is that the Government’s answer is woefully inadequate. Business needs certainty and the Government have run out of time, so will he at least acknowledge that securing no more than equivalence to what is already available to third countries would be insufficient? Is it not the case that if people want a Brexit deal that really protects jobs and tax revenues, and they want to end austerity, the only way they can have both is with a Labour Government?

[Mel Stride]

It was all going so well—not that well, actually, but it got a sight worse towards the end. Government Members know that we are taking the responsible decisions to move forward a very difficult and detailed negotiation. At the appropriate time, when we have a deal—we are confident we will do that—we will present it to the House, and the House will then be able to express its view on it.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

3. What recent discussions he has had with the Secretary of State for Work and Pensions on the potential effect on household income of the roll-out of universal credit.

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[Mark Pawsey (Rugby) (Con)]

9. What fiscal steps he is taking to support the high street.

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

As my hon. Friends will know, in the Budget, we allocated £1.5 billion to supporting our high streets, including £675 million for our future high streets fund, and reduced business rates for smaller retailers by one third for the next two years.

[Alex Burghart]

Businesses in my constituency are giddy with excitement at this huge reduction in business rates. Will my right hon. Friend confirm what proportion of businesses on the high street are going to benefit from this?

[Mel Stride]

I am also giddy with excitement about this, and giddy with excitement to be able to inform my hon. Friend that up to 90% of smaller retailers, many of them in our high streets, will benefit from this package. That is in complete contrast to Labour’s policy of putting up taxes on small businesses. That is no way to support our high streets; it is Labour’s way to destroy business and jobs.

[Mark Pawsey]

On 1 December, I will be visiting retailers in Rugby town centre to support the Federation of Small Businesses’ Small Business Saturday. These businesses are in a tough and fast-changing environment. Does the Minister agree that the business rate incentive that he mentioned will go some way towards levelling the playing field between those retailers and those who operate online?

[Mel Stride]

I certainly agree. These changes will boost our high streets, and the FSB is to be congratulated on Small Business Saturday. I shall be in Ramsgate with my hon. Friend the Member for South Thanet (Craig Mackinlay) speaking to some of his retailers about this. I extend a non-partisan invitation to Labour Members to join us: we will go up our high streets talking to retailers about reducing their rates, and they can talk about the tax increases that they have in store for them.

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

The very short-term measure to give some businesses relief was announced at the Budget, but why did not the Chancellor announce the real cause of escalating business rates—the investors on our high streets from overseas who are really exploiting the market?

[Mel Stride]

I am slightly disappointed by the approach taken by the hon. Lady, for whom I have great respect, in pouring cold water on a major fiscal move such as this to reduce high street rates by one third, which will benefit approximately 90% of smaller retailers in her constituency. That is a shot in the arm for our high street and a shot in the arm for British business.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

In truth, this is very small beans for high street stores. It is correct that some people will benefit, but also correct that many of our town centres and shopping centres have vacancies that this will not even touch, so what more can Government do to address the fundamental unfairness in the system?

[Mel Stride]

The hon. Gentleman is right inasmuch as he points to the fact that high streets need to reinvent themselves—to transition—in order to adjust to the growth in online marketplaces. That is exactly what our future high streets fund is all about, with £675 million going out via local authorities, following competitive bids, to make sure that we reshape those high streets in exactly the way that he would like them to be reshaped, get rid of the shops that are shut down and reinvigorate and rejuvenate the very centres of our communities.

[Sir David Amess (Southend West) (Con)]

8. What steps he is taking to support businesses and entrepreneurs.

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[Mrs Kemi Badenoch (Saffron Walden) (Con)]

18. What steps he is taking to tackle tax avoidance and evasion.

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

The Government have brought in over 100 measures to clamp down on avoidance, evasion and non-compliance since 2010, protecting and yielding over £200 billion in revenue.

[Mrs Badenoch]

Some 19% of all businesses declared deliberate tax defaulters by Her Majesty’s Revenue and Customs this year were from the restaurant and takeaway business. Does the Minister agree that companies in this industry that do pay their taxes, such as the Chesterford Group in my constituency, do not have a level playing field?

[Mel Stride]

I cannot comment on a specific taxpayer, but I can say that HMRC does publish quarterly the names of those who deliberately default on taxation, as a method of bringing them forward to settle with HMRC. We have brought in a further 21 measures in the Budget to raise a further £2 billion by 2023-24 by clamping down on avoidance and evasion.

[David Hanson (Delyn) (Lab)]

How does a £200 million cut, announced in the Red Book, help with HMRC’s collection of taxes?

[Mel Stride]

HMRC has had an additional investment since 2010 of £2 billion. It has 28,000 full-time equivalent staff engaged in the mission of tax inspection and clamping down on avoidance and evasion. We have one of the lowest tax gaps in the entire world, at 5.7%. That is far lower than was the case under the previous Labour Government. In fact, if we were stuck with the poor levels of tax collection under the Labour party, we would lose revenues equivalent to employing every policeman and policewoman in England and Wales.

[Mr Speaker]

The hon. Member for Gainsborough (Sir Edward Leigh) is a very lucky boy today.

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[Sir Edward Leigh (Gainsborough) (Con)]

19. What recent steps he has taken to reduce the amount of tax payable by small and medium-sized enterprises.

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

My hon. and gallant Friend always gets there in the end and in my experience he is very good when he does. I can tell him that we do a great deal to support small businesses. We announced our one third reduction in the small business rate. Our tax rate for small business is declining. It is now 19% and it will fall to 17% in the next couple of years.

[Sir Edward Leigh]

Can the Minister assure me that by the end of this Parliament small businesses in Gainsborough will be paying less tax than they are now?

[Mel Stride]

I can assure my hon. and gallant Friend that the smaller retailers in his constituency will be paying about a third less in rates. He will see a further diminution of the general corporation tax rate. It was 28% in 2010 and it is now coming down to 17%. Of course, they will also benefit from other measures, such as the freezing of fuel duty, which will help many small businesses.

[Sir Edward Leigh (Gainsborough) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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[Fiona Bruce (Congleton) (Con)]

T2. Four thousand current and former employees of Roadchef, many of whom are elderly, including some 150 who worked at Sandbach services, will be pleased that there has been success in their campaign for money that they are entitled to from HMRC, but can Ministers provide an assurance from HMRC that there will be no tax payable on these moneys going in or out of the Roadchef employee benefit trust?

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

I obviously cannot comment on the specific case of the Sandbach services employees, but I assure my hon. Friend that I have looked extensively at this matter and consulted various Members across both sides of the House. I am satisfied that HMRC in general has conducted itself appropriately over this whole issue, but I am happy to meet her to discuss the specific point that she raised.

[Alex Norris (Nottingham North) (Lab/Co-op)]

T3. There were over 9,000 words in the Chancellor’s Budget speech, but not one mention of Nottingham or the east midlands. In the east midlands, we have multiple investable schemes that will drive growth in our region. When will the Treasury back the east midlands?

[Craig Tracey (North Warwickshire) (Con)]

T5. I welcome the announcement in last week’s Budget of investment in our high streets, which will be particularly welcome in Bedworth in my constituency. I had meetings with local businesses recently on this very issue, and particularly on their frustrations at the lack of ambition of the local borough council. Can the Minister advise how local councils such as Nuneaton and Bedworth can best take advantage of this excellent opportunity?

[Mel Stride]

I recognise the huge amount of work my hon. Friend has put into the issue of revitalising our high streets, and his representations to me and other colleagues. The £675 million future high streets fund will be bid for on a competitive basis through local authorities, so it is very important that all Members encourage their local authorities to come forward with their bids.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

T4. The co-operative movement in the UK has a turnover of £36 billion. Given that it employs thousands, and that thousands will benefit as a result of the economic and social benefits that co-operatives bring, why was there no mention of the co-op movement in the Budget?

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[Stephen Morgan (Portsmouth South) (Lab)]

What role, if any, have the readiness for Brexit and resource levels of Her Majesty’s Revenue and Customs played in influencing the Prime Minister to consider extending the customs transition period?

[Mel Stride]

HMRC has a central role in ensuring that we are ready for Brexit, specifically in the unlikely event of a no-deal day one scenario. That has included the recruitment of 2,300 additional staff, and we will have an additional 5,000 staff by the end of the year. We are ready, and we will be ready, for wherever this deal lands.

[Alex Chalk (Cheltenham) (Con)]

Motorists want to see the earliest possible end to the traffic misery on the A417 caused by the air balloon pinch point. Does my hon. Friend recognise that the Budget, through its extra firepower for roads, provides the best possible platform for such a vital scheme?

[Neil Gray (Airdrie and Shotts) (SNP)]

I welcome HMRC’s rather belated decision to return tax wrongly paid by the Roadchef employee benefit trust. It is clearly now necessary to honour previously made commitments in respect of tax implications for beneficiaries. Did HMRC use its discretion to make that payout, and, if so, on what basis?

[Mel Stride]

The hon. Gentleman and I have had a number of discussions about this issue, both formal and informal, and have engaged in an Adjournment debate on it. I have always been very attentive to his specific questions, but if he would like me to meet him again to discuss the issue further, I should be more than happy to do so.

[Henry Smith (Crawley) (Con)]

Previous independent assessments of the impact of air passenger duty have shown that it costs the economy more than it brings into the Exchequer. May I have an assurance that the Treasury will do its own modelling to ensure that this island trading nation can compete better in the future?