Labour Market Activity

Debate between Mel Stride and Geraint Davies

Tuesday 28th February 2023 Commons Chamber

[Mel Stride]

The hon. Lady points to an issue that is a focus within the Department. We have taken on more staff, and we are in the process of taking on still more staff. We are also looking at processes and, in the longer term, examining processes that will increase the rapidity of supply of that particular set of support.

I will now turn to where the motion is clearly so wrong.

[Geraint Davies]

A moment ago, the Secretary of State claimed that 500,000 more people are in payroll employment than before the pandemic. Am I not right in saying that the Office for National Statistics says that 400,000 fewer people are in overall employment, because the payroll does not include the massive reduction in self-employment that he has so briskly avoided noticing? Will he now set the record straight: 400,000 fewer people are now in work overall than before the pandemic?

[Mel Stride]

I think it is the hon. Gentleman who has misunderstood what has been said here. There is a distinction between payroll employment, which is clearly those who are on PAYE employed by an employer, and somebody who is self-employed, which is a totally different matter. The statistic, or the fact that I presented, was simply that the level of payroll employment is currently at a record high in this country.

Leaving the EU: Economic Impact of Proposed Deal

Debate between Mel Stride and Geraint Davies

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

The hon. Gentleman says that we have not had the courage to produce an analysis of the deal, as he terms it, but we have done precisely that, as was required by this House, with a range of potential landing points for the deal set out in broad terms in the future political declaration. The Government have done just that.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Father of the House knows better than others that Margaret Thatcher was instrumental in creating the single market and in encouraging Japanese companies to come here to platform into it. Given that the EU now has a free trade agreement with Japan and the Government intend to Brexit, is not the loss of Japanese investment and associated jobs painfully predictable? Is it not now incumbent on the Government to give business and the people, including Honda workers and others, the final say on whether this botched deal is really what they want, or whether they want to stay in the EU to secure future jobs?

[Mel Stride]

The hon. Gentleman overlooks the fact that the trade deal with Japan has been struck at a time when we are members of the EU. There will be an impact on car producers, and we see that as part of the reason why Honda has taken its decision. The most important thing is that we enter into an arrangement with the EU where we minimise the frictions at our borders, have a free trade agreement with the EU27 and make sure that trade continues to flow. The best way to do that is to support the deal we are negotiating with the European Union.

Oral Answers to Questions

Debate between Mel Stride and Geraint Davies

Tuesday 27th February 2018 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

6. What recent assessment he has made of the effect on the economy of the UK leaving the single market and the customs union.

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

The Government are undertaking a wide-ranging set of analyses of the impact of our departure from the European Union. This is changing through time as we develop our approach and we move to a bold and comprehensive agreement with our EU partners.

[Geraint Davies]

The Chancellor knew in 2016 that the majority of people would prefer a soft Brexit to a hard Brexit. I am referring to remainers, plus people such as the Foreign Secretary, who said he favoured a single market and would vote for it. Now that the Chancellor knows that a hard Brexit will cost us £45 billion in lost tax receipts, will he at least acknowledge that people such as me on both sides of the Chamber who support our remaining in both the customs union and the single market do so in the name of prosperity and of upholding democracy?

[Mel Stride]

The Government have made their position very clear: we are leaving the European Union, and that means we are leaving the customs union and the single market. However, we are determined to negotiate a deal under which our trade with the EU27 is as frictionless as possible and we are able, as a globally facing nation, to secure free trade agreements with other countries around the world.

Finance Bill

Debate between Mel Stride and Geraint Davies

Tuesday 31st October 2017 Commons Chamber

[Mel Stride]

My right hon. Friend is entirely right and pre-empts the point that I was about to make, which is that it is quite wrong of the Opposition to castigate all non-domiciled individuals in this country and to characterise them as tax dodgers. In fact, the hon. Member for Bootle made the point that there are over 100,000 non-doms in the United Kingdom. The vast majority of them do not have lots of overseas assets or may have no overseas assets; they are not opening up trusts and putting assets in them. They simply come over here, sometimes for a couple of years or so, to work and contribute to our economy.

[Geraint Davies (Swansea West) (Lab/Co-op)]

What the Minister says is true so far as it goes, but I recently met representatives of Man, with which the Minister will be familiar. At £100 billion, Man runs the biggest hedge fund across Europe. They want robust, predictable and understandable regulation to provide certainty for investors, rather than slackness that allows people to creep through holes and exploit loopholes. They want to know where they are. They do not necessarily want a race to the bottom; they just want a reliable system for investing over the long term.

[Mel Stride]

Certainty for the future is precisely what the proposals deliver, and they were extensively consulted on for a couple of years before coming into effect. We are providing exactly the certainty that the hon. Gentleman wants.

As is characteristic of the hon. Member for Aberdeen North (Kirsty Blackman), she made some fairly thoughtful comments about the importance of ensuring that the tax code is not overly-complicated. She will be aware of the work that we are doing with the Office of Tax Simplification. I was grateful for her at least partial welcome for some of our anti-avoidance measures which, as many Members rightly pointed out this afternoon, have brought in £160 billion since 2010.

My hon. Friend the Member for Braintree referred to the Bill as “gargantuan.” Having spent what feels like most of my life reading every syllable of it, I think that is a rather polite description of this colossus of a Bill, which has 760-odd pages. He mentioned Morecambe and Wise, and it was a nice touch to characterise the way in which the Opposition play the same old tunes. For the Government, of course, the tune is “Bring Me Sunshine”. We believe in an economy that works for everybody; we believe in bright, sunny uplands; we believe in possibilities, we believe in the future; and, above all, while I am a Treasury Minister, we believe in fair taxation.

My hon. Friend was also right to mention the £160 billion. He particularly stressed the importance of getting away from the corrosive message of always beating up those who are an apparently easy target. We need to talk our country up, not do our country down.

[Geraint Davies]

Does the Minister understand the deep concern about the need for transparency, legitimacy and fair returns in the aftermath of the Panama papers? What specific actions have the Government taken, or are they just saying, “Oh, well. It doesn’t matter. We’ll just get on as normal.”?

[Mel Stride]

We are right in the vanguard, as the hon. Gentleman knows. The OECD’s initiative to address base erosion and profit shifting has, among other things, brought in the transfer of information between countries on the very issues he raises. We are no slouch when it comes to addressing such issues.

My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) also talked about tax avoidance. He confessed to the “novelty” of listening to the hon. Member for Bootle, which is perhaps a little harsh as I often learn a lot from listening to him. My hon. Friend also talked about the importance of attracting the best people to our country from all walks of life, and he is right.

My hon. Friend the Member for Brentwood and Ongar (Alex Burghart) made an important point about the setting up of trusts. The trusts of those who become deemed domiciled under the Bill will have to have been in place before that particular moment in time. It is worth stressing that taxation falls due, in the normal manner, only when income in taken out of a trust. My hon. Friend also got us tangled up in a debate about the Beatles and Ringo Starr, but then my hon. Friend the Member for Walsall North (Eddie Hughes) told us that it was Jasper Carrott all along, and we are grateful to him for that.

I begin my response to the hon. Member for Bootle by reminding the House of the significant changes that the Bill introduces to the way in which non-domiciled people are treated in the United Kingdom for tax purposes. The new rules that the Government are introducing fundamentally change the way non-doms pay tax in the UK by ending permanent non-dom status. Under the Bill, non-doms who have been resident in the UK for 15 of the last 20 years will no longer be treated as non-domiciled by the tax authorities. Instead, they will pay tax in the same way as everyone else, bringing £1.6 billion in much-needed extra revenue for our public services.

To maintain fairness and to keep our tax system competitive, the Bill protects non-residents’ trusts from being wholly introduced to the UK tax system. New clause 1 would impose an obligation on HMRC to review the operation of those protections for non-resident trusts. The review would consider the cost of the protections and the effects they have on taxpayer behaviour, including the effect of removing the protections. Although I understand the intention behind the new clause, I do not think it is necessary to legislate for such a review to take place. HMRC and Her Majesty’s Treasury have hundreds of officials monitoring the tax system and assessing the risks, which is right and proper given the Government’s responsibility to ensure that the tax system delivers value for money for the UK taxpayer.

There is a more fundamental case against the new clause—a case about fairness and unintended consequences. The trusts that the Bill seeks to protect are those created before an individual is deemed to be UK domiciled. Many of these complex trust structures will have been set up long before the individual even thought about moving to the United Kingdom and will not have been set up to comply with the UK’s tax rules. In the circumstances, it is not unreasonable that the new domicile rules are introduced in a way that protects trusts from unintended consequences. It would be unfair to ask a non-dom to pay tax on money they never intended to bring into contact with the British tax system in that way.

[Geraint Davies]

Is the Minister saying it is fair for someone to tax plan to leave the country, make a load of money and hide it in various places where tax is not charged before coming back to live in the British environment, where they always wanted to live, and avoid all that tax?

[Mel Stride]

I am not saying that at all. What I am saying is that, where a non-dom has a family trust or some other perfectly legitimate arrangement—they might not have been to this country at all when the trust or arrangement was set up—and is subsequently deemed to be domiciled in this country, it is not unreasonable that the contents of that trust should be protected, with the important caveat that tax is due to the UK tax authorities as soon as income is taken out of the trust.

[Geraint Davies]

In terms of tax planning, a merchant banker or whatever in their twenties could plan to leave Britain for a number of years, make a lot of money and protect that money in a tax haven before coming back and receiving all the benefits—sending their kids to public school and all the rest of it—without paying tax in Britain.

[Mel Stride]

I think I have answered that question. It is probably time to move on.

Even with these protections in place, non-doms who become deemed UK domiciled will be protected from tax, as I have said, only on income and gains that remain in the trust. Any moneys withdrawn or benefits provided will lead to a tax charge on the individual. This is a fair system that has been carefully considered and consulted on since it was announced more than two years ago. It is simply unnecessary to introduce legislation to place additional bureaucracy and additional reporting burdens on HMRC, which already scrutinises non-doms’ compliance with the UK tax regime.

Government amendment 17 will remove and correct a minor inaccuracy in schedule 8 to ensure that the policy is delivered as intended. The change applies to part 4 of the schedule, on the cleansing of mixed funds. For the purpose of these rules, a qualifying individual is one who was not born in the United Kingdom and whose domicile of origin is not in the United Kingdom. The amendment simply corrects the Bill by replacing “or” with “and” when defining a qualifying individual. I therefore urge the House to accept the amendment.

These reforms have been carefully drawn up to ensure that we get the right balance between protecting the public finances, remaining internationally competitive and showing how much we value the contribution of non-doms in the UK. I therefore urge the House to reject new clause 1.

Oral Answers to Questions

Debate between Mel Stride and Geraint Davies

Tuesday 18th July 2017 Commons Chamber

[Mel Stride]

As I said, we recognise the value of merging national insurance and income tax where that is practical and achievable, and there are some measures coming up in the Bills in the autumn that will address that in certain circumstances, but to do it right across the piece at this stage is perhaps a long-term aspiration rather than one we will be addressing in the short term.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Minister will know that as people go into the higher tax threshold they stop paying more national insurance, so would one of the impacts of merging the two be to reveal that the British tax system is not as progressive as people think, and make the case for those with the broadest shoulders to pay more?

Tax Fairness

Debate between Mel Stride and Geraint Davies

Tuesday 12th March 2013 Commons Chamber

[Geraint Davies]

Exactly. The Chancellor, no less, decided to announce that half a million people would be sacked but did not say who they were, so people stopped spending and started saving, consumer confidence fell and the economy has been flatlining ever since.

[Mel Stride]

The hon. Gentleman refers to employment. Does he recognise the fact that there are 1 million new private sector jobs net, unemployment is falling and the level of employment, which is currently about 30 million, is the highest on record?

[Geraint Davies]

I am grateful to the hon. Gentleman for that intervention. If 1 million more people are in work but there is zero growth—in other words, there has been no overall increase in production—that implies that people who had been in full-time jobs are now in part-time jobs and that aggregate production has not increased, which is a complete failure. It is symptomatic of Tory Britain, with people scratching around for anything they can find in difficult times.

There has been some discussion of the 50p rate of tax. As I have mentioned, the reason the Treasury thinks it would not make any money from a 50p rate is that it knows that millionaires can move money between tax years, which is precisely what they have done. They knew that their Tory mates would reduce the top rate of tax the next year and so simply shifted their income to that year. The point that I had wanted to make in another intervention—I appreciate that two were taken—relates to the idea that the 50p rate does not work and is therefore dead. However, people earning between £32,000 and £42,000 already pay 52% marginal tax—12% for national insurance and 40% for income tax—but of course no one talks about that. How does that change their behaviour, and why is it fair that they pay the higher rate while people on £150,000 do not because they have accountants? It is ridiculous.