Finance (No. 2) Bill

Priti Patel Excerpts

Wednesday 25th March 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

It is a great pleasure to close this debate on Second Reading. I would like to thank everyone who has spoken for their contributions, particularly the hon. Member for Edmonton (Mr Love), who has served this House with such distinction. I wish him well. We have had an interesting debate. I should like to set it in the context of the Chancellor’s Budget last week.

A number of points about living standards have been raised. I reiterate that living standard will be higher in 2015 than they were in 2010, real household disposable income per capita will grow at its fastest rate since 2001 and, according to the Institute for Fiscal Studies, families are now set to be £900 better off this year than they were previously. That is all in line with our plan to fix the British economy, take us out of the dreadful mess we inherited back in 2010 and, quite rightly, give the British public the recovery they deserve.

The Bill marks the next step in that plan. It puts more money in people’s pockets, delivers further growth and puts fairness, which has been mentioned, at the heart of our recovery. We continue to put fairness at the heart of the recovery through our increase in the personal allowance. We will take people on the national minimum wage and working up to 30 hours a week out of income tax altogether by 2017. That is about rewarding work and raising living standards, which is what this Government stand for.

I will address a number of points that have been raised. The hon. Member for Edmonton spoke about £5 billion in tax avoidance. To answer his question, yes, it is a realistic achievement to bring in the revenue that has been spelt out. There is no reason to doubt that the Government can raise the figures we have already announced, so we will proceed with that. On the point about the tax code, we established the Office of Tax Simplification in 2010, and the Bill includes a number of measures that build on its recommendations.

Points were also raised about oil and gas. The Bill introduces radical measures to support the oil and gas industry, giving investors long-term certainty. We have been working very constructively with the industry to ensure that the package will provide it with the right fiscal environment.

On clause 12, which the hon. Member for Nottingham East (Chris Leslie) mentioned, the exemption will not apply where expenses are paid under a salary sacrifice arrangement. That will stop employers artificially lowering their national insurance contribution bills by replacing some of their employees’ salaries with expenses.

Clauses 13 and 14 implement recommendations set out by the Office of Tax Simplification. On clause 20, which relates to gift aid, more details will be set out in regulations, which of course will improve donor understanding of tax to cover. On clause 28, I should like to reassure the hon. Gentleman that it applies to expenditure on consumable items only if the item is transferable in the ordinary course of the relevant person’s business.

Flooding was mentioned. In the spending review the Government committed an unprecedented £2.3 billion to tackle flooding and coastal erosion. In addition, clause 35 supports business contributions to alleviate the impact of flooding.

The hon. Gentleman also mentioned clause 29, which sets out film tax relief opportunities. The structure of the current relief is completely different from that introduced under the previous Government’s scheme, which was prone to abuse, so there are no issues of avoidance in this case. He also mentioned zero-emission bands. Stakeholders have asked for rates to be announced four or five years ahead, and the Government have been committed to announcing rates three years in advance, which is why we have done so.

Let me move on to the whole issue of tax avoidance. The UK is demonstrating further leadership by implementing the diverted profits tax, which is also consistent with the principle of aligning taxing rights to economic activity. The Bill quite rightly ensures that everybody contributes fairly to the Government’s long-term economic plan. During this Parliament, Her Majesty’s Revenue and Customs has secured £100 billion in additional revenue, thanks to this Government’s avoidance and evasion policies. Over a third of the Bill’s provisions will enact measures that go even further in tackling avoidance and evasion, including new measures on corporation tax and offshore evasion and avoidance and, of course, increases in the bank levy. That will raise nearly £8 billion more over the next five years, helping to reduce the deficit and strengthen the country’s economic recovery.

The Bill will help households up and down the country with the cost of living, make the country even more competitive internationally and, through the tax avoidance and evasion measures that we are putting in place, ensure that everyone pays their fair share of tax. The Bill marks the next step forward in our long-term economic plan, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, 24 March).