Ways and Means

Peter Dowd Excerpts

Ways and Means resolution: House of Commons
Wednesday 6th September 2017 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

I noted the Minister’s comment that there is no change in policy. From that statement it is clear that the Government have learned absolutely nothing from the result of the general election, which is a terrible shame. The Opposition welcome the Government finally laying before the House the Ways and Means resolutions, which will comprise the so-called “summer” Finance Bill, but the clue is supposed to be in the name. I find it rather odd, as I am sure many of my parliamentary colleagues do, that we stand here in early September debating a summer Finance Bill that was expected to be introduced and passed before the summer recess. Alas, it was not.

I recall the Minister’s predecessor standing at the Dispatch Box only four and a half months ago assuring the House that if the Government were returned, they would immediately bring forward measures dropped from the previous Finance Bill due to lack of parliamentary time. However, they have an excuse for the procrastination: it is called chaos. We have a chaotic Government, chaotically stumbling from crisis to crisis, not knowing one part of their anatomy from another. After the election, we returned to a zombie Parliament where little in the way of business was put forward to be debated in the House. Mr Speaker referred today to the whole question of the scrutiny that we are supposed to be doing, but the Government are not putting anything forward for us to scrutinise.

Not only is the Prime Minister one of the walking dead, but she wants Parliament to join her. On a number of occasions, my colleagues and I wrote to the Treasury to ascertain the date for the Finance Bill. In addition, the issue was raised twice in business questions and the Chancellor was asked about it in Treasury questions, all to no avail and no answer. It was the fifth amendment approach to answering questions. It was only in the waning hours, as Members packed up before the House rose for summer recess, that the Government were forced to publish the date for the Bill’s return.

I know the Treasury lost two Ministers in the election—to rework Oscar Wilde’s observation, losing one Minister is a misfortune, but to lose both looks like carelessness—but surely the country cannot simply hang around because the Government are in meltdown. The Government are making an art form out of uncertainty. We have uncertainty about Brexit, uncertainty about the country’s finances, as the resolutions indicate, and now uncertainty about the Prime Minister’s job prospects. The only certainty we have is the inability of this vacuous, hapless Government to govern with any scintilla of competence or compassion.

The Government had five weeks after the general election to introduce measures dropped from the previous Finance Bill and bring certainty to taxpayers and businesses. Many of those businesses have already undertaken the administrative and financial burden of ensuring that they meet the stipulations of the measures included in the Ways and Means resolutions being debated today. The Minister could have brought forward the resolutions and published the Bill before the House rose for summer recess. That would have allowed Members and the businesses and taxpayers affected time to read through the proposals and examine them thoroughly. Instead, the Government have cynically restricted the debate by scheduling the Second Reading of the European Union (Withdrawal) Bill for tomorrow.

Next week, the Minister intends to push ahead with the Second Reading of the Finance Bill only four days after its publication, with the explanatory notes being published on the day of Second Reading. Once again, the Chancellor and the Treasury are deliberately shying away from the parliamentary scrutiny that we should be having on these resolutions. This is a time of great political and economic uncertainty, and the measures included in the resolutions do little to address the problems at hand. The global economy is on the move, while Britain under the Tories is being left behind. The resolutions are defined more by what is not in them than what is. There is nothing about investment, nothing about productivity and nothing about public services—much ado about nothing.

[Charlie Elphicke]

Will the shadow Minister give the House his view on the points made by his Back-Bench colleague the hon. Member for North Durham (Mr Jones) on the landfill tax question?

[Peter Dowd]

I would not proffer advice to my hon. Friend the Member for North Durham, because he is an expert on that issue, but I will listen clearly to what he says. Unlike the Government, I listen to my colleagues on the Back Benches.

We need only look across the channel to see that every European economy outgrew Britain in the GDP figures for the first quarter. Our productivity rate remains one of the worst in the G7 and is lower than it was 10 years ago. Real wages continue to fall behind inflation. More than ever, we need bold and radical solutions to stimulate growth, raise productivity and encourage investment in our economy. None of the resolutions before us will do that. Even the Archbishop of Canterbury has made that point. Rather than focusing on balancing the budget or tackling our growing debt to GDP ratio, we have a Chancellor who spent the summer in the witness protection programme, rearing his head only to brief against his boss when the coast was clear and the Prime Minister was abroad.

The measures before the House represent the Government’s failure to take the opportunity to begin seriously to tackle the challenges that our economy and country face. For example, it is clear that the Tories have no answers on how to raise productivity and no answers on how to tackle the growing inequality in pay. We are now experiencing the longest period of wage stagnation for 150 years, with nurses having to demonstrate in Parliament Square to make their point. The Tories have no answers when it comes to creating an economy that works for the many and not just for a privileged few.

[Simon Hoare (North Dorset) (Con)]

The hon. Gentleman’s former noble friend Lord Sugar, who knows a little about productivity and running a business, poured a huge amount of cold water on the prospectus that the Labour party put before the electorate a few months ago, which was clearly rejected by the largest number of businesses and business owners. Rather than the vaudeville that the hon. Gentleman seems to be going on about—it is like the Labour party conference speech that he might give, if he is given a platform—why does he not address the issues before the House?

[Peter Dowd]

I remind the hon. Gentleman that businesses are coming to Labour because of the mess that the Conservative party is making of Brexit.

[Graham Stuart (Beverley and Holderness) (Con)]

Name them.

[Peter Dowd]

I can name them.

None of the measures before the House address the growing black hole in the public finances, which is the direct result of the Government’s mismanagement and economic incompetence. As things stand, there is a £3 billion black hole in the public finances, made up of the Chancellor’s U-turn on the proposed increases to class 4 national insurance contributions for the self-employed on low and middle incomes; the unlawful employment tribunal fees the Government have been forced to repay; and, yes, the £1 billion bung to the Democratic Unionist party to buy its silence and compliance. Nor do the Government acknowledge the added cost to the taxpayer of delaying the implementation date for “Making Tax Digital”, which they were warned was problematic by all and sundry.

Make no mistake: this is no ordinary Finance Bill we are talking about. If passed, a number of its measures will create a charter championing tax avoidance and leaving billions of pounds of tax uncollected. Using smokescreens and false titles, the Treasury has hidden to the unsuspecting eye giant loopholes for offshore trusts in complicated tax measures. While claiming to end non-domicile status, the Chancellor is at the same time encouraging people to bend the rules and siphon off money overseas into tax haven trusts. He has excluded from one of the Bill’s key deeming measures non-doms who have inherited their status. The Government are on the side of tax dodgers, not taxpayers.

There is nothing in the measures before the House that will address the resource crisis that HMRC is facing as the Government plan to cut £83 million from its budget, along with the debacle that is its 10-year modernisation programme.

[Rachel Maclean]

Contrary to what the hon. Gentleman just said, the Government have raised more than £9 billion from non-doms. Those funds contribute to the Exchequer, enable us to fund public services and raise the country’s productivity rate.

[Peter Dowd]

The reality is that the Tories support tax dodgers. Full stop.

Several of the measures before the House will create even more work for the falling number of people employed by HMRC and put further strain on them. The Government’s actions will ensure that many of the so-called anti-avoidance measures trumpeted by the Minister will fail before they even begin.

[Mr Jim Cunningham]

My hon. Friend has just touched on how the Minister is going to implement these measures, which is what I asked about earlier. He will probably know that the Government are closing tax offices throughout the country, with a reduction in staff as a result. How can they honestly say they are going to implement legislation to go after tax dodgers?

[Peter Dowd]

My hon. Friend is absolutely right. The proposals for reorganisation will do nothing to help that—they are in a chaotic state.

[Victoria Atkins (Louth and Horncastle) (Con)]

I urge caution on the hon. Gentleman before he throws around wild accusations about the Government supporting tax dodgers. For what it is worth, in my previous life I used to prosecute massive tax fraudsters. I am very happy with the fact that I have helped fraud prosecutors to put a lot of nasty people into prison, so I take great offence at the hon. Gentleman’s attempt to cast all Conservative MPs in that way. The best way to deal with tax evasion and tax dodging is not to throw empty words across the Chamber but to work with the Government to reduce and stop something that we all want to see the end of: tax dodgers not paying their dues.

[Peter Dowd]

I hope the hon. Lady will be busier in her job.

I find it baffling that, at a time when the Government are introducing some of the most complex plans to make tax digital, and while there is so much uncertainty about how taxation and customs will work post-Brexit, they are choosing to fire HMRC staff rather than hire them. To put it simply, were the Government truly serious about wanting to close the tax gap, which costs the UK taxpayer a minimum of £36 billion every year, they would give it the resources it so desperately needs. Given the thousands of accountants and lawyers across the world whose sole occupation is to advise and enable tax avoidance, it will never be a fair fight.

The sieve-like measures on non-doms which I have mentioned are perforated even further by the plan to loosen the rules on business investment relief. That measure will allow non-doms to remit funds into the UK without paying the usual taxes. There is little evidence that such relief has been effective in encouraging greater investment in business, so expanding it is only a giveaway to non-doms. If any of us wish to invest, we have to pay the appropriate taxes. There should not be different rules for a privileged few, which maintains the Government’s view that the UK can only ever be attractive as a tax haven. The Government’s race to the bottom begins in earnest and enthusiastically.

[Steve McCabe]

On business investment relief, it was suggested a moment ago that we should work with the Government. Does my hon. Friend agree that they should publish details of which companies and businesses benefit from such investment, and what part of the country they are located in? That way, we will be able to see whether there is anything to work with.

[Peter Dowd]

My hon. Friend makes a good point; I hope the Government will listen carefully to what he says and, more importantly, act on it.

The devolution of corporation tax rates to Northern Ireland has been debated in the Chamber many times, and we do not seek to reopen the debate. Nevertheless, we have not debated and will not welcome the clear attempts by the Government to loosen the definition of a Northern Irish employer and water down the requirements for claiming the lower corporation tax rate in Northern Ireland. Under the measure before us, corporations would effectively use Northern Ireland as an onshore tax haven. They would set up small offices with a brass plate on the door, but bring in little of the real investment and jobs that Northern Ireland needs.

We see special treatment for corporations and non-doms, but the news is less good for workers at risk of losing their jobs. The proposed measures on termination payments, if they reflect what was before the House before the election, will target sacked workers as a source of revenue. If there is genuine evidence of the abuse of payments in lieu of notice, that needs to be acted on, but the Government have tacked on a power for the Treasury to reduce the tax exemption on termination payments without primary legislation. That would be a U-turn on their previous statements about dropping such plans. If there is no intention to use the power to reduce the exemption, then the measures should be amended so that it can only be uprated, not reduced. The Government also heartlessly want to enshrine the taxable status of “injury to feelings” compensation. Even when that reflects HMRC’s practice, why is it seen as a priority for legislation?

So there we have it: these motions will introduce a summer Finance Bill that stretches the meaning of summer and will leave taxpayers and businesses with months of uncertainty. It is a Bill that will do nothing seriously to tackle tax avoidance, with the Government claiming to take on non-doms while in the same breath legislating to protect the offshore trusts; a Bill that fails to address the growing black hole and the Conservatives’ mismanagement of our public finances; and a Bill that will protect the privileged few while doing nothing for the many.

This is a dark, miserable, barren winter Finance Bill with a wrathful nipping cold. We have waited a whole season for these resolutions, and they only reaffirm what we already knew: that the country can wait no longer for this disastrous and divided Conservative Government to step aside and make way for a Labour Government who will invest to grow our economy, balance our public finances and take on the tax dodgers—which the Conservatives won’t do.