Finance Bill

Debate between Philippa Whitford and David Gauke

Tuesday 28th June 2016 Commons Chamber

[Mr Gauke]

I note what the right hon. Lady says, but I will not let her comments about sweetheart deals pass. We have discussed the matter before, and I point her in the direction of Sir Andrew Park’s review of those settlements and his conclusion that there were no sweetheart deals. This is an issue that she and I have discussed before and no doubt will discuss again, and I fear that we will not reach agreement. I note her points, but I am not persuaded by the case for new clause 8.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Will the Minister give way?

[Mr Gauke]

I am conscious that this is a relatively short debate and that I have already taken up a large proportion of it. I am not quite done, but I will take a short intervention.

[Dr Whitford]

My point is about the NHS, where whistleblowers have suffered exactly the same kind of detriment, but the Government are now trying to change their attitude. I do not understand why we would not want to support whistleblowers within the industry when we have had one scandal after another for the past decade.

[Mr Gauke]

My point would be about the sheer scale of the information provided to HMRC. I quoted the 125,000 pieces of information from the public, but by no means are all of those whistleblowers. HMRC certainly does receive a substantial amount of information from whistleblowers, which is helpful. As for how that works and its contribution to HMRC’s activities, I am not aware of worries that that is not working or that the existing provisions with regards to whistleblowers are ineffective. Of course these matters are always kept under review. If I thought that there was a strong case for returning to this issue, I would certainly be interested in doing so, but I am not hearing that at present.

The right hon. Member for Barking (Dame Margaret Hodge) has been waiting very patiently for me to turn to new clause 9, which would require the Government to estimate the impact on the tax gap of expanding our forthcoming register of persons with significant control to companies in the Crown dependencies and overseas territories. I do not believe that the clause would be effective in achieving its aims. It would cast the net too narrowly by focusing on companies with significant levels of trading activity in the UK. As the Prime Minister announced at the recent anti-corruption summit last month, the Crown dependencies and overseas territories have agreed to hold beneficial ownership information on all companies incorporated in their jurisdictions. Importantly, they will share that information with Her Majesty’s Revenue and Customs and UK law enforcement agencies, which means that our authorities will be able to see exactly who owns and controls companies incorporated there.

Although I understand the aims of the new clause, it would be less effective than the steps that we have already taken to improve transparency and tackle tax evasion. I do have some sympathy with the argument that, no doubt, we will hear from the right hon. Lady, but I am not persuaded by it, and I hope that she will not press her new clause to a vote.

I will not take up any more time of the Committee. I have tried to cover as much ground as I can and to anticipate the arguments that we will hear for the rest of this debate. I hope that the Government clauses, schedules and amendments can stand part of the Bill.

Oral Answers to Questions

Debate between Philippa Whitford and David Gauke

Tuesday 1st March 2016 Commons Chamber

[Mr Gauke]

One of the areas in which we can make progress is the digitisation of the tax system, which could help a lot businesses. I would also make the point that the Office of Tax Simplification has been strengthened and we are putting it on a statutory footing. We are looking forward to seeing a couple of reports from it over the next few days on what we can do to help small businesses in particular.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

T9. When services that have been removed from local authority control and centralised in England have been granted the right to reclaim VAT, does the Chancellor accept that the refusal to grant that right to Police Scotland—making it the only UK force to pay VAT—just looks vindictive? Will he not reconsider that decision?

[Mr Gauke]

To be fair, the position on reclaiming VAT was made perfectly clear when the Scottish Government made the decision to go down this course. The UK Government are simply pursuing the policy that we always said we would pursue.

Air Passenger Duty: Regional Airports

Debate between Philippa Whitford and David Gauke

Tuesday 20th October 2015 Westminster Hall

[Mr Gauke]

What I will say—this is the case for devolution; I suspect that the hon. Gentleman and I might agree on this—is that we shall see. We have the chance to see whether that approach has an impact on tourism levels in that area. We will be able to see that from the evidence that emerges, and that could help to inform future decisions. We have that flexibility, and the Scottish Government are able to exercise the policy that they think fit for Scotland.

[Dr Whitford]

Do we not have an example available to us in the Republic of Ireland? It got rid of its tax and certainly has reported a massive upsurge in tourism. The point is that when someone is looking at choices of where to go, they do not think about the money that they will spend having a meal out; they are looking at how much it costs to get there and how much the hotels are. The issue is what they see on the internet up front. We are a tourist area, as the Republic of Ireland is, so we would get a similar benefit.

[Mr Gauke]

The hon. Lady refers to the increase in tourism in the Republic of Ireland, but according to the last numbers that I saw, the percentage increase was not very different from that for tourism in Northern Ireland. That suggests that APD perhaps is not that significant a factor in bringing tourists to a particular area. In the context of Scotland, however, no doubt the hon. Lady will be keeping a close eye on the impact of the APD changes on the tourism industry in her area, as indeed will the UK Government.

While I am on the subject of Northern Ireland, I shall pick up the points raised by the hon. Member for South Antrim and the right hon. Member for Belfast North (Mr Dodds). We do recognise that Northern Ireland is the only part of the country with a land border with another country that has a lower rate or no rate of APD. Many Northern Ireland passengers drive to Dublin to catch flights; I acknowledge that. APD is not the only reason why Northern Ireland passengers travel to Dublin for flights, but I accept that it could well be an important factor.

We have already devolved direct long-haul APD to the Northern Ireland Assembly. It has now set long-haul rates at zero, effective from 2013. We have not had a request from the Northern Ireland Executive, as far as I am aware, for full devolution of short-haul APD. Obviously, we would have to consider any such request if it was made, but the principles set out by the hon. Member for Salford and Eccles do apply when it comes to devolution within a member state of the EU. The funding would have to be found locally, so any cost from forgone APD would have to be taken, as it were, from the Northern Irish block grant. The same principle applies in relation to corporation tax and devolution.

Some people have suggested that the way forward might be to offer an APD holiday, under which new routes could benefit from no APD liability for the first few years of their operation. We recognise that that kind of approach might encourage operators to open new routes—routes that currently do not exist. However, the Government also have a number of obligations to be fair and transparent in how we levy taxes. We would probably have to offer any tax holiday policy to all airports, rather than focusing on regional or underused airports.

The result of such a policy would be that some operators of flights to certain destinations would pay less tax than others that served the same destinations. Existing operators would be placed at a considerable commercial disadvantage. It would clearly be nonsense if two different flights from the same departure airport to the same destination airport were charged different levels of tax. The operator of the more expensive flight would, we suspect, mount a legal challenge against any discrimination, which they might win. There is also the potential for airlines to game any APD holiday. For example, the operator of an existing Manchester-Dusseldorf route might easily switch to Liverpool and/or Cologne to lessen its tax bill, which would offer no advantages to the UK.

Scotland Bill

Debate between Philippa Whitford and David Gauke

Monday 29th June 2015 Commons Chamber

[Mr Gauke]

As I understand the situation that the hon. Gentleman set out, if services were funded through local taxation, the refund scheme was available. That is no longer the case, as the changes have been made. It therefore does not fall within section 33 as it currently stands. As the hon. Member for Caerphilly (Wayne David) acknowledged, it is technically valid that the refund scheme does not apply.

Many arguments are made in respect of the VAT refund schemes, and requests are made that they be broadened and applied to additional organisations. It is customary for the case to be made that charities, for example, should benefit from such refunds. That comes with significant fiscal cost. Now is not the time to run through the whole argument, but there may well be a case for reconsidering the position, but we should not look at it in isolation because of a particular decision that was made in one case. If there is a case to do that, the matter should be looked at in the round, not just on the basis of one case.

[Dr Philippa Whitford]

Is this not just a dry technical issue? This is the only police force and the only fire service in the whole of the United Kingdom that pays VAT and does not get it back. Members of the Front-Bench team agreed that it would be sensible to bring Police Scotland together and said that they would do the same. Surely now is the time to use some common sense and get rid of this anomaly—£33 million a year that could be going to front-line services.

[Mr Gauke]

But the reason for that is the decision that the Scottish Government took, with full information. This did not come as a surprise or as an unexpected consequence of a decision. It was a decision that the Scottish Government made, fully informed and understanding the situation. I am not criticising the decision because, according to the business case made by the Scottish Government, the benefits far outweighed the costs. But the costs were there and identified to the Scottish Government in advance.