National Insurance Contributions Bill

Penny Mordaunt Excerpts

Tuesday 23rd November 2010 Commons Chamber

[Mr Gauke]

The focus of the policy has always been on start-up businesses. It is an attempt to encourage new businesses to be set up, given where we are in the economic cycle and the need to encourage private sector growth. That is why the Conservative party’s policy before the general election was focused on start-ups. After the election we considered how best to introduce the policy, and came to the view that we should include the regions where the private sector was at its weakest.

[Penny Mordaunt (Portsmouth North) (Con)]

If the scheme cannot be extended to an entire region, does the Exchequer Secretary accept that there will be pockets of that region, such as my constituency, that would benefit massively from it? The area has historically had very low new business start-up rates and would benefit from what I think is an excellent scheme. When I asked his Department about the costs of administering the scheme in such areas, it said that they would be prohibitive, but I cannot understand why that would be. Can he elaborate on that?

[Mr Gauke]

If we were to choose precisely where the policy applied on a much more closely defined geographical basis, we would have difficulties such as distortive behaviour, problems in enforcing the policy, the bureaucracy that may be involved, the need to establish where a company’s principal place of business was, and the difficulty of policing the scheme. Also, labour markets tend to be somewhat larger than constituency or even local authority areas. My hon. Friend is right to highlight the circumstances in Portsmouth, but there are neighbouring seats with a very low level of public sector employment and quite a high level of private sector employment. Such labour market flexibility can exist.

Oral Answers to Questions

Penny Mordaunt Excerpts

Tuesday 16th November 2010 Commons Chamber

[Danny Alexander]

The welfare reforms that we are proposing are designed to support people off benefit and into work. That is the whole point of the reforms that the Secretary of State for Work and Pensions outlined last week. The reforms that will create a universal credit and some of the changes that we announced in the spending review are all there to help people off benefit and into work, and to help people get jobs, which is what the hon. Gentleman should support.

[Penny Mordaunt (Portsmouth North) (Con)]

Can the Chancellor confirm that, unlike the shadow Chancellor, he is not an instinctive cutter?

[Mr Osborne]

I did see that rather remarkable comment from the shadow Chancellor over the weekend. We are doing what we are doing because we have to—because of the size of the Budget deficit.

Finance (No.2) Bill

Penny Mordaunt Excerpts

Monday 8th November 2010 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

I wish to start by briefly mentioning the public consultation on the Bill. During our discussions about the Bill and the comprehensive spending review, much was said about the previous Government’s mismanagement of the economy and the behaviours that led them to spend £5 for every £4 that they brought in, but the systems that they put in place did not help either. The Minister has referred to the failure of regulation, but the previous Government’s other practices—the prime example is their failure to hold a comprehensive spending review—hindered public and parliamentary scrutiny of their ability to manage the economy. That enabled a bad situation to escalate, with a scandalous overspend, as well as allowing them to adopt the shocking scorched earth policy in their death throes with which we are all familiar.

I therefore welcome any move towards more transparency and public consultation. We have heard that Departments will publish business plans, and we were given reassurances in the summer that the clear line of sight project would allow us to see not just what Departments were spending, but what they were raising. In addition, consultation on Finance Bills is an extremely good innovation in the interests of quality and transparent Government. I hope that in future consultations, a broad audience beyond the usual tax practitioners will let their views be known to the Treasury. That will help to hold Governments to account, and it will certainly give us something interesting to talk about in Committee.

With reference to the Bill, I welcome the amendment to collection procedures for income tax for individuals and the harmonisation of administration regimes for different taxes, which is a further advance towards simplification and transparency. I have received assurances on the issues that I raised on clauses 26 and 27 about the failure to make returns and late payment. I sought assurances that those measures would not overburden taxpayers or impose disproportionate penalties.

I applaud first-year allowances for zero-emission goods vehicles, a genuine incentive for logistics firms to pursue a green agenda, and a sign of the Government’s determination to reward green behaviour. In Committee, there was some discussion about what constituted a vehicle, which at the time I thought might be rather a waste of time, but given that earlier today, at Defence questions, an hon. Member managed to ask a question about aircraft carriers under the topic of vehicles, perhaps the discussion in Committee was not a waste of time at all.

The clause that will be of most interest to my constituents is clause 31, because many people in Portsmouth North are suffering from asbestos-related illnesses. The clause will facilitate compensation payments and is a proper response to the tax liability to which many well intentioned trusts have found themselves exposed. Many of our constituents will suffer from asbestos-related industrial illnesses. The long period from exposure to presentation of symptoms, as well as lack of awareness, means that we will see new cases for decades to come.

Currently, the trusts established to pay compensation to asbestos illness sufferers can be liable for inheritance tax, capital gains tax and income tax on their assets. Clause 31 will introduce a retrospective exemption for trusts established between 6 April 2006 and 23 March this year. Ultimately, that means more money going to victims, and it will be warmly welcomed in Portsmouth. I was reassured to learn during the debate in Committee that other trusts that do not fall into that time frame will not miss out. No trusts that might be affected have been set up since 23 March, and in future the problem can be avoided if new trusts fully consult the Charity Commission and HMRC. This is an extremely important clause in an important Bill, and I urge all hon. Members to support it.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Oral Answers to Questions

Penny Mordaunt Excerpts

Tuesday 12th October 2010 Commons Chamber

[Mr Osborne]

As the hon. Gentleman may know, I have met the First Minister and Deputy First Minister of Northern Ireland and I am looking at the points that they raised with me. If he will forgive me, I will make an announcement on 20 October.

[Penny Mordaunt (Portsmouth North) (Con)]

Does the Minister think that we will stand a greater chance of having fairer taxation now that Finance Bills are published and properly consulted on, and will that stop appallingly unfair policies such as the abolition of the 10p tax rate ever being introduced again?

[Mr Gauke]

We set out in June our plans for making tax policy and ensuring greater consultation, so that there is a clearer process when we develop policies. That has been widely welcomed by business and the tax professions, and we hope to build on the progress that we have made so far.

Finance (No. 2) Bill

Penny Mordaunt Excerpts

Monday 11th October 2010 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

Historically, it has been argued that the secrecy surrounding Budget measures has hindered proper scrutiny, especially as Parliament has but little time to consider their broader implications. Those implications have not always been positive for the Government of the day. Indeed, had a previous Chancellor not guarded his Budget measures so jealously, his blushes might have been spared over the abolition of the 10p tax rate. I remember that time well—in Portsmouth, the average wage was £18,500, and anyone earning below that and above £5,000 was absolutely clobbered. That is why I will never take lessons in fairness from those who now find themselves on the Opposition Benches.

The Government’s publication of the measures in the Bill on 12 July is therefore a welcome departure from the norm, opening a consultation and inviting comment. That is an innovation in the interests of good and transparent government, and I hope that, in future consultations, a broad audience beyond the usual tax practitioners will let its views be known to Her Majesty’s Treasury.

The many people in Portsmouth North who suffer from asbestos-related illnesses are part of that broader audience. The proposals in clause 31 to facilitate compensation payments to those people are a proper response to the tax liability to which many well-intentioned trusts have found themselves exposed.

Asbestos-related industrial diseases are sadly a common occurrence in all our constituencies. The long period from exposure to presentation of symptoms, as well as lack of awareness, means that we will see new cases for decades to come. Indeed, in the next 10 years, the number of cases emerging each year will peak at about 2,500. As a dockyard city, Portsmouth can expect to contribute disproportionately to that number.

Currently, the trusts established to pay compensation to asbestos illness sufferers can be liable for inheritance tax, capital gains tax and income tax on their assets. Clause 31 will introduce a retrospective exemption for trusts established between 6 April 2006 and 23 March this year. That will mean more money going to victims, and will be very welcome in Portsmouth. It will be a relief to sufferers from asbestosis, cancer and even relatively benign conditions such as pleural plaques, which can nevertheless be a precursor of more serious complaints. The extra resource is much needed, as it will also help meet the cost of care. Often, only 35% of the cost of that care—particularly hospice care—is met by the NHS. The provision happily complements the High Court ruling in August this year, which asserted that insurers’ compensation should be used for the care that victims have needed. I am encouraged that the unwitting exposure to tax liability of an essentially charitable endeavour is to be put right, and that the problem can be avoided in the future if new trusts consult fully the Charity Commission and HMRC.

It is a happy coincidence that the launch of the consultation period on Finance Bills comes with a Bill that offers so many positive measures. In addition to clause 31, I welcome the amendment to collection procedures for income tax for individuals and the harmonisation of administration regimes for different taxes—a further advance towards simplification and transparency. We must all recognise the exasperation that many individuals and businesses in our constituencies have felt in their dealings with HMRC, and measures to ensure that taxation is fair, straightforward and transparent are always to be applauded. However, I hope that the Economic Secretary will dwell on clauses 26 and 27 about the failure to make returns and late payments. Given HMRC’s track record, I seek assurance that those measures will not over-burden taxpayers or impose disproportionate penalties. I am especially anxious that the size of fixed penalties for small businesses be given careful consideration.

I also applaud first-year allowances for zero-emission goods vehicles, a genuine incentive for logistic firms to pursue a green agenda and a sign of the Government’s determination to reward green behaviour.

It is also worth noting what the Bill omits. The long period of consultation has afforded us adequate time to enjoy the absence of some measures favoured by the last Government. Happily, we can pass this Bill without unfairly impinging on the landline user or the cider drinker.

Equitable Life (Payments) Bill

Penny Mordaunt Excerpts

Tuesday 14th September 2010 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

May I first offer my congratulations to my hon. Friend the Member for Congleton (Fiona Bruce) on her excellent speech in this important debate? I also want to congratulate the Minister on the progress he has made, and the speed with which he has been dealing with this issue; that is much appreciated. I also thank him for the time he has spent on discussion and correspondence with me and my constituents.

I want briefly to make four points. The first of them is about the independence of, and support for, the independent payments commission. There is much concern among EMAG members about the terms of reference for the panel and the inappropriate inclusion of Chadwick’s work as the central building block. Can the Minister reassure the House that he has not accepted Chadwick and that the panel will have wide scope in its deliberations? Can he also confirm what resources will be available to the panel, what independent actuarial advice it will receive, and whether he expects its members to appear before a Select Committee of this House?

Secondly, will the Minister insist on an administrative cap? If so, what level of cap is he minded to call for, or will that be entirely for the panel to decide?

Thirdly, I turn to the issue of the pot of money, which will be announced later in the year. That goes to the heart of this matter. I deeply regret that that is being resolved now, rather than at a time when the country had deeper pockets, and I know that the Minister will want to do everything he can to put right this injustice. I press him to ensure that no stone is left unturned in that respect, and I also want to be reassured that he is considering where other funds may be found. For example, I have learned from a Library paper prepared for the 2007 Pensions Bill of the right hon. Member for Birkenhead (Mr Field) that there is still about £1 billion available in unclaimed insurance and pension accounts—so-called widows and orphans accounts—aside from that which has already been repatriated or given over to social enterprise funding. The public purse currently has no claim on those funds and there is no definition of what constitutes a dead account in respect of them, but that could be remedied. I know the Minister appreciates what we all want to see happen, and also that we all want it to happen quickly. We, in turn, appreciate the difficult circumstances in which this has to be done, so let us give ourselves every option and opportunity to do the right thing.

Finally, I want to pay tribute to a constituent of mine, Brian Aitchison, and EMAG for all their hard work. In my dealings with them they have been constructive, courteous and very pragmatic. They have a sophisticated view of this situation. They are very clear in what they are asking for; they are very clear about why they do not have it yet; they are very clear about why it will not be easy to deliver; and they are very clear about where the fault lies. The last Labour Government are responsible for these poor public finances and the delay in Equitable Life members getting justice. It is this coalition Government who must put both those things right.

Alignment (Clear Line of Sight) Project

Penny Mordaunt Excerpts

Monday 5th July 2010 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

I broadly welcome the motion. I particularly welcome the proposal that parliamentary time must be provided to debate spending reviews and the annual pre-Budget report, and I hope that in future that will be the case—mind you, in the light of recent Treasury reporting standards, just to have a spending review at all would be a marked improvement. However, I have some concerns about the clear line of sight project, and I hope that the Minister will be able to reassure me and the House about those.

I am not an economist or an accountant, but I have seen enough episodes of “Yes Minister” to take a cautious approach to projects that seek to allow the cleansing light of scrutiny to fall on less information. I am concerned that “clear line of sight” might become “out of sight” in relation to some high-spending and income-generating Departments. For me, the Sir Humphrey element of this project concerns net accounting throughout—in other words, less information being presented, with potentially less transparency as a consequence.

Other Members have raised that issue, so I will not dwell on it. However, I wish to address the underlying assumption that Departments should be allowed to spend that additional income. It is stated as an advantage of this proposal that it will encourage Departments to be more frugal and squeeze better value for money for the taxpayer. I would argue that, paradoxically, the contrary might transpire, as Departments used the licence of net estimates to indulge in non-core activities aimed at increasing revenue for the Department. That would, in effect, be spending by stealth. Additional income raised would have to be spent in order to maintain the net figure, and presumably if the net figure were maintained Parliament would be content. Surely we would do better to have a system that set out gross expenditure and that enabled Parliament to choose how any additional income should be spent, held in reserve, or used to reduce the burden of that expenditure on the taxpayer. Unless we guarded against that, over time, we might see a distortion in the price of purchasing services such as passports, which are now practically compulsory, or in fees that might be paid, for example, to the UK Border Agency.

A second scenario might see a Department creating an income-generating activity that failed to deliver value for money or came at the expense of the statutory service that that Department was charged with carrying out. I will give the House a quick example from real life, not “Yes Minister”, although it could well have been used for that. When I was a director of Kensington and Chelsea council, I discovered that one of our local hospitals was hiring out one of its closed, but fully equipped, wards to a film company to use as a film set. To add insult to injury, the movie was a pornographic one. Although I cannot claim to have seen the final picture, as I understand that these things are no longer claimable on parliamentary expenses, it was a big-budget affair and it generated substantial income for the hospital—but apart from cheering up a few of the in-patients, it could not be said to be contributing to the objectives of the primary care trust.

The absence of scrutiny on gross income and expenditure is the equivalent of saying to the public, “Don’t bother to fill out your tax return—just tell us what your net income is and we’ll take it at face value.” Tax inspectors should see what items an individual is claiming against their income, and Parliament should be able to do the same. I hope that my hon. Friend the Minister will provide me with that reassurance when he sums up.

Office for Budget Responsibility

Penny Mordaunt Excerpts

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

We have demonstrated that the OBR, alongside some of the other things we have done, is a commitment to the long-term sustainability of the British public finances, and I remind the hon. Gentleman of the following words of the Governor of the Bank of England:

“The most important thing now is for the new Government to deal with the challenge of the fiscal deficit. It is the single most pressing problem facing the United Kingdom”.

[Penny Mordaunt (Portsmouth North) (Con)]

One of the consequences of the previous Chancellor playing fantasy forecasts with this country’s growth projections is that the men and women of my constituency—and, I am sure, of elsewhere—feel they have been treated with contempt and as mere collateral damage of an election campaign. It is vital that we restore these people’s trust and confidence in Treasury reporting; it is, after all, they who are going to put this country back on its feet again. What will this Treasury team do to support that?

[Mr Osborne]

First, I will tell the Prime Minister what I am up to, because another thing that emerged over the weekend was that the former Chancellor of the Exchequer hid the numbers not only from the rest of the country, but from his own Prime Minister.

Government Spending Cuts

Penny Mordaunt Excerpts

Wednesday 26th May 2010 Commons Chamber

[Mr Laws]

We certainly do not expect that. I welcome the hon. Gentleman back to this House.

[Penny Mordaunt (Portsmouth North) (Con)]

I am sure that the Chief Secretary knew about Labour’s mismanagement before coming to office, as did many others, which is why Labour Members now sit on the Opposition Benches. However, did he know about the scorched-earth policy that we have heard so much about in the past few weeks and leading up to the general election? What will his Department do to ensure that that abuse will never happen again?

[Mr Laws]

I am grateful to my hon. Friend. I agree that there seems to have been a scorched-earth strategy as regards not only the state of the public finances but the way in which the Government were spending money at the end of their term. We are looking very closely at all the decisions that have been made, and we will be making further announcements shortly about the action that we will have to take.