Beer Duty Escalator

Debate between Nigel Mills and Cathy Jamieson

Tuesday 5th March 2013 Westminster Hall

[Cathy Jamieson]

The hon. Gentleman knows as well as I do the history of the increase, and I simply say that it was at that stage. This Government have to accept responsibility for the decisions that they have taken: they have not chosen to change the escalator that was introduced by the previous Government.

I am all ears to hear what the Minister will say this morning. I have heard a couple of such debates. In the last one in the Chamber, he was in “listening mode”, as he reassured us several times. He said that

“as an incoming Minister who is new to this portfolio, I plan to keep nothing on the shelf. I will be looking at everything, which includes all duties and taxes for which I have responsibility. That would be a sensible thing for any Minister to do.”—[Official Report, 1 November 2012; Vol. 552, c. 439.]

I agreed with that at the time, because I thought that it gave him the opportunity to introduce changes.

As has been mentioned, The Sun is undertaking a campaign about the increase. In a recent article, a Treasury spokesman was quoted as saying:

“Revenues from alcohol excise duty make an important contribution to reducing the deficit. But where we can take action we have.”

I want to hear from the Minister whether that means that any change has been ruled out or is still being considered. I also want him—I will give him plenty of opportunity to respond—to answer the question asked by the hon. Member for Leeds North West (Greg Mulholland) about the amount of savings and the effect on investment. Is it not now the time for a proper review of the economic impact of the escalator, to give us an evidence base in today’s economic climate? Will the Minister give us his latest assessment of the economic impact of the cancellation of the escalator? Will he simply give us the information that he and his officials have already worked on? Will he address what the impact would be of the Government acceding to our request to cut the rate of VAT temporarily?

[Nigel Mills]

The hon. Lady has gone back to the topic of VAT. Does she regret that when the previous Government reduced VAT in 2008, they increased the duty on alcohol, so that the VAT cut had no beneficial impact?

Small Charitable Donations Bill

Debate between Nigel Mills and Cathy Jamieson

Monday 26th November 2012 Commons Chamber

[Cathy Jamieson]

Again, I hope not to detain the House to any great extent. As the Minister will recall, we consistently pushed the Government to reconsider the matching principle in the Bill as we believed that it was too onerous for many small charities and would mean that many of them could not benefit from a scheme that was supposedly set up to help them.

The Government amendments show that the Minister has bowed to the pressure not just from members of the Committee but from people in the charitable sector who had serious concerns about the impact of the measures from the very start. I will not repeat all the comments made by the different organisations over the course of our discussions about the Bill.

We could of course continue to argue for the matching principle to be dropped completely and could make a case for that. However, given that the Government have seen fit to introduce changes that will take the ratio from 2:1 to 10:1, I think we should recognise that they have moved a significant amount, which has been welcomed by the sector. I look forward to hearing what the Minister has to say about his amendments and I want to make it clear that I do not think our amendments are required at this point as they have been superseded by his.

[Nigel Mills]

I wholeheartedly agree with the hon. Lady. In Committee, the Minister promised to make the situation more generous, but last week I saw that no amendments had been tabled to that effect. I thought that I would just try to help him be a little more generous by reflecting the wishes of a local church in my constituency that had asked me to try to make the figure three times, not twice. I have no desire to be only a third as generous as the Treasury and so welcome this move by the Minister. I think that it is a sign that he has listened to the argument. I genuinely hope that this new-found generosity in the Treasury will extend into next week.

--- Later in debate ---

[Nigel Mills]

I support many of the points made by the hon. Member for Banff and Buchan (Dr Whiteford). I am trying to achieve a similar end result with amendment 2. Having recognised that the Government have some problems, I tried to find a way of future-proofing the Bill so that in a couple of years’ time, when they saw the trend for cashless donation going beyond even what the hon. Lady set out, they could introduce an order to allow electronic donations to count for these purposes.

We have to be careful. The world is moving on. Only a few weeks ago, my credit card company sent me a strange thing that I can stick on the back of my mobile phone. Apparently, I can make payments with it. I have to say that I was not quite ready to go that far. I thought, “What happens if I lose my mobile phone? I will not only have lost all my contact details but my credit card as well.” However, we can see that this direction of travel is with us. I suspect that in many ways the Treasury is quite keen for us all to become even more cashless. Tax avoidance is made much harder if everyone starts to make payments by an electronic traceable means rather than through cash. The UK is the EU nation with the highest propensity to use cashless technologies, and I think that that trend will continue.

In its evidence to the Committee, the Royal National Lifeboat Institution said that it was not yet ready to replace its cash collecting tins with electronic swiping points. I accept that. However, I suspect that in a few years’ time that system will become rather more common and people will be out there with a placard saying, “Swipe your card here and donate a fiver to this charity.” We heard ideas about how people could swipe their Oyster cards to make small donations and how that might help Transport for London to get fundraisers off its stations. I gave the example of how an Oyster card that someone had finished using and that had some cash left on it could be used to donate to the Railway Children charity. At the moment, there is no way in which such a donation could be traced to see whether the donor was willing to give gift aid.

The Minister argued in Committee that there is no need to take account of that type of giving because it is not that widely used and, where it is, it is still easier to get a gift aid declaration. I am not sure that that argument will stand firm in the next couple of years. We will start to move towards that type of giving and people will see it as an alternative to the quick cash donation. They will think, “I’ll swipe my card and give you £1, £2 or £5, and I don’t fancy stopping to fill out a gift aid form any more than I do with cash. I don’t fancy having some e-mail come from my card provider saying, ‘If you click here you can have gift aid on that.’” We need to try to future-proof the Bill so that in two or three years’ time we are not faced with charities moaning and saying, “Look, we’re getting more and more donations by some electronic means that we can’t use to claim gift aid. Can’t you change the Act?”

I have tried to find an easy compromise for the Minister and to assuage his concerns that this is perhaps too risky, not popular enough, or not needed. I suspect that it is quite unusual for a Back Bencher to offer a Minister the power to make a change in law by order. Usually Back Benchers—I am one of them—say, “I’m a bit concerned that the Government are taking too much power to change this, and we don’t want them to have that power.” Today, I am offering the Minister a power. He does not have to use it now, this year or next year, but at some point, if this became something that would help charities and fit with the aims of the scheme, he would have a nice simplified method of making the change without needing to come back to the House with primary legislation. He has already tabled amendments to give the Treasury powers to change things by order, and none of us had a problem with that. My amendment is a gentle, helpful one, and I commend it to the House.

[Cathy Jamieson]

Many of us who served on the Bill Committee or listened to the Second Reading debate and have heard the representations made by the charitable sector have a degree of sympathy with the comments made by the hon. Members for Banff and Buchan (Dr Whiteford) and the for Amber Valley (Nigel Mills), particularly in relation to ensuring that the Bill does not become out of date before it gets under way.

The hon. Lady made some powerful arguments. Indeed, her case is reflected in our amendment 22, which relates to some of the difficulties involved in getting information from those who have made donations by means other than cheques, such as JustTextGiving, or—this issue was raised a number of times in Committee—if they have placed a cheque on a plate or in a collection box at an event such as a funeral.

We had hoped that the Minister would give an indication—he may well do so—that he would at least be minded to consider this proposal at some point in the future. I understand that there may be technical reasons against that at present and that the Cabinet Office is engaged in ongoing work on the different methods of making donations and on following up on gift aid. Although I support the principles of amendment 34 and want action to be taken—that is why we have tabled our own amendment on the issue—I understand that there may be some difficulties. It would be odd, however, if the Minister said that at no point would he consider moving in the direction suggested, particularly when the Cabinet Office is engaged in those schemes.

I hope that the Minister will be able to comfort us by saying that he will consider the proposal at some stage. I also hope that the order-making powers that the Government will adopt under the Bill could, if necessary, be utilised at some stage to extend the way in which donations can be made. It seemed odd during Committee that, while someone can donate using whatever currency they choose, donations by electronic means do not count.

I look forward to hearing what the Minister has to say. I hope that he will take account of the persuasive case that has been made and that he will take a further look at the proposals in the amendments tabled by the hon. Lady and in my amendment 22.

Finance Bill

Debate between Nigel Mills and Cathy Jamieson

Monday 2nd July 2012 Commons Chamber

[Cathy Jamieson]

My hon. Friend has made a good point. We will have an opportunity to discuss that subject in more detail tomorrow.

The Government once made much of their commitment to fiscal responsibility. Deficit reduction was to be their defining mission. Today, however, that task has been made even harder by the failure of their own economic plans, which involve £150 billion of extra borrowing. Their pledge to clear the deficit by the end of this Parliament has been blown to pieces, yet they still find the money for a tax giveaway to the top 1%.

[Nigel Mills (Amber Valley) (Con)]

rose—

[Cathy Jamieson]

Perhaps the hon. Gentleman would like to comment on that in his intervention.

[Nigel Mills]

Am I right in thinking that the impact of amendment 1 would be to take away the 45p rate and leave the highest rate at 40p, thus in effect giving a double tax cut? Can the hon. Lady explain the technicalities of how her amendment works?

[Cathy Jamieson]

I am a relative newcomer to this place, and I sometimes find its procedures and conventions bemusing. I have learned from my time in the parliamentary process, however, to take advice from the Clerks and others who know about drafting legislation, and that is what we did in respect of these amendments.

The Minister will no doubt protest that the higher rate was not raising any money, but the Government’s attempts at justification have not withstood the scrutiny that has been undertaken. The Office for Budget Responsibility, for example, says that Her Majesty’s Revenue and Customs’ estimates of the reduced tax avoidance that would result from the reduced rate are “highly uncertain”. They are based only on the first year’s yield from the new top rate, which was always expected to be artificially depressed by people’s ability to bring forward their income. No real basis is therefore offered for estimating the revenue-raising potential of the 50p rate. It is for that reason that the Institute for Fiscal Studies said that it is

“too soon to form a robust judgement.”

The claims that new funds would flood into the Treasury as a result of people relaxing or reversing their efforts to avoid paying the top rate have been shown to be notoriously speculative. Again, as the IFS explained,

“you’re first giving out £3bn to well off people who are paying 50p tax...you’re banking on a very, very uncertain amount of people changing their behaviour and paying more tax as a result of the fact that you’re taxing them less...there is a lot of uncertainty, a lot of risk with this estimate.”

A written answer provided by the Exchequer Secretary to my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chief Secretary, on 19 June shows that in 2010-11 more than 73% of people earning over £250,000 were paying more than the top rate, as were more than 80% of people earning between £500,000 and £10 million, implying that many tens of thousands of people were paying the 50p tax rate of last year and are now in line for a very large tax cut if this measure comes into effect.