Finance Bill

Nusrat Ghani Excerpts

2nd reading: House of Commons
Tuesday 12th September 2017 Commons Chamber

[Ms Nusrat Ghani (Wealden) (Con)]

It is an honour to follow the passionate and detailed speech made by my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton).

I am not sure, Mr Deputy Speaker, if, like me, you were reminded on reading the Bill of the reason you sought elected office: the desire to provide security and opportunity for our constituents. The Government have a proud record of 3 million extra jobs, Labour’s deficit cut by two thirds, and some of the strongest growth figures in the G7. The economy is in good shape thanks to the sound and responsible policies implemented over the past seven years, and we are delivering a strong economy with strong public services.

The Bill delivers an alternative to Labour’s black hole. It is about a fair taxation system that delivers for ordinary working families, that does not place a stranglehold on individual entrepreneurialism or burden people with tax bills they cannot afford, that is fair and robust, and that tackles tax avoidance and evasion. We have a good record on taxes, too. We have reduced corporation tax from 28% to 19%, meaning that SMEs, which are so important to our economy, including Wealden’s economy, can keep more of their own money. This has generated more income for the Treasury: corporation tax receipts have increased from £37 billion to £50 billion.

One nation Conservatism is perfectly explained by the raising of the personal allowance, which has given 30 million people a tax cut of £1,000 and lifted 1.3 million out of income tax entirely. In combination with the national living wage and the freezing of fuel duty for the seventh consecutive year, this means that ordinary families are better off thanks to a Conservative Government.

By contrast, over 13 years in government, Labour failed to deliver on tax avoidance. The tax gap—the difference between the taxes owed and the taxes received—stood at 10%, and it allowed the Mayfair loophole to go unchallenged, which let hedge fund billionaires off the hook to the tune of millions of pounds. Labour was weak on tax avoidance in the Finance Bill that the House debated before the general election, demanding that the measures we are discussing today be stripped from the wash-up Bill. Labour cannot be trusted on tax avoidance. Its Members occasionally talk the talk, but they will never walk the walk.

Where Labour failed, we are delivering. The Bill contains important measures to crack down on individuals and corporations when they do not pay what they owe. Tax avoidance by larger companies and wealthy individuals not only short-changes the Treasury, but short-changes the SMEs that drive the economy, and that is a message we are sending very clearly today.

Like every other Member in the Chamber, I have many small businesses in my constituency. It is our job to stand up for those businesses in this place. They are not able to use complex tax schemes and clever accounting to shuffle their money around the world, reducing their tax bills to near zero; instead, they pay their fair share. By 2020, the contribution that SMEs make to the economy will be more than £200 billion and, importantly, they will be employing more than 15 million people.

The Bill will deliver on our promises and commitments, helping to level the playing field. It will ensure that our public finances are in order, allowing us to invest more in our public services and better preparing our economy. Above all, supporting it is the responsible thing to do, and that is why I shall support the Bill tonight.

Finance Bill

Nusrat Ghani Excerpts

Committee: 1st sitting: House of Commons
Wednesday 11th October 2017 Commons Chamber

[Eddie Hughes]

I think I remember the hon. Gentleman saying, “Let’s not talk about the past. Let’s talk about what this Labour Government might do for you in the future.” Well, there is not going to be a Labour Government. There is going to be a Conservative Government who will continue to increase the minimum wage. If my constituents are going to trust anybody in the House, it should be the Conservatives. We have no intention of taking more tax off people. If we did, we would have to come back to the House to get approval anyway.

[Ms Nusrat Ghani (Wealden) (Con)]

Thank you Madam Deputy Speaker—sorry, I mean Dame Rosie. I have just been thrown by that magnificent speech by my hon. Friend the Member for Walsall North (Eddie Hughes). His constituents must be very proud of him.

Let us ground ourselves for a moment. I am proud of this Government’s record on tax avoidance. Since 2010, our policies clamping down on tax avoidance and evasion have collected more than £140 billion, ensuring that our tax system is just and that everyone pays their fair share. Clause 5 makes the tax system fairer, which should be the ambition of all responsible political parties. A fairer tax system means that we can fund our vital public services without increasing taxes or passing more debt on to future generations. It is not rocket science; these are the basic rules for responsible government. To that end, I welcome the clauses we are discussing today, especially clause 5. They tighten the rules and close loopholes that have been exploited for too long, denying the Treasury what it is owed and short-changing the vast majority of individuals and small and medium-sized enterprises that pay their fair share.

I cannot be the only Member of Parliament who represents a constituency whose jobs, prosperity and opportunities are dependent on small businesses thriving, and I take every opportunity to stand up in the Chamber and back small businesses across Wealden. But back to clause 5. The tax rules on termination payments are currently unclear and confusing. Clause 5 tightens and clarifies the rules governing the tax due on these payments. The changes make the rules fairer, minimising the potential for manipulation by some larger employers, which often give the most generous pay-offs.

[Colin Clark (Gordon) (Con)]

The oil downturn has had an enormous effect in my constituency and that of the hon. Member for Aberdeen North (Kirsty Blackman). Like my hon. Friend the Member for Redditch (Rachel Maclean), I am a business owner. There are already too many barriers to employment. The Bill seeks to give clarity and the amendment would add to the complexity of employment. We do not want further barriers to employment. Does my hon. Friend the Member for Wealden (Ms Ghani) agree that we want clarity, which will ultimately help employment and small businesses?

[Ms Ghani]

My hon. Friend is spot on. We want absolute clarity. As I continue with my speech, the Committee will realise that the changes in clause 5 will barely have an impact on most people in our constituencies.

The changes are not asking someone who has been made redundant to pay more tax. The first £30,000 of the termination payment remains exempt from tax as well as national insurance contributions. As a result, the changes in clause 5 will not have an impact on 85% of people who receive termination payments. If we have constituencies where 90% of businesses are SMEs, our figure will probably be even higher than 85%. On average, 25% receive a payment of more than £54,000, so they are not exactly the least well-off in society. Those who are not following the rules and are not manipulating the loopholes will pay no additional tax. It is simply about clarifying the fine details.

--- Later in debate ---

[Kirsty Blackman]

My complaint was about the fact that people are being allowed to not pay tax on stuff they are doing in this country. My complaint is that the background note provided by the Treasury does not mention anything to do with £1.6 billion and that the overview of tax legislation put forward in December last year does not mention £1.6 billion. Despite our asking the Government for that figure on a number of occasions, this is the first time it has been forthcoming. I am very pleased that it is and that we can have a reasonable discussion about whether we should increase the ability of people from other countries to come under this.

I did not want to talk for a very long time, because we have already had a number of votes and two hours of debate on the Bill. As I said, the House has spent an incredible amount of time on this, and it probably should not have. The Labour party has tabled a new clause along similar lines to the new clause tabled by the Scottish National party.

[Ms Ghani]

I am concerned that we must not put inaccuracies on record. The HMRC figures published in August 2017 show that over £1.6 billion has been invested in UK businesses under the BIR scheme. We must not say that figures are not available when they are; we just have to go to the right place to find them.

[Kirsty Blackman]

I am very glad that those figures are there, but sadly, when we asked about them in September during our discussion on the Bill, after their production, they were not mentioned. I appreciate that they are being brought up now—that is great—but they were not brought up then.

As I said, I do not want to take up much of the Committee’s time discussing this matter. We have asked the Government to provide us with more data. We have also asked them to provide data on what effect they think this change will have on the amount of investment coming in. We would very much like to see that.