Customs and Borders

Robert Courts Excerpts

Thursday 26th April 2018 Commons Chamber

[Robert Courts (Witney) (Con)]

It is a pleasure to speak in this important debate. Our trading arrangements are of great importance to constituencies and country alike. It is critical that we approach the matter in the spirit of the kind of country that we want to be, and the opportunities that we want to seize. I want this country to have the freedom to seize opportunities, rather than being tied as closely as possible to the EU simply because we are afraid of the future.

When we discuss this matter—it has been raised by others, from all parts of the House—it is critical to understand exactly what a customs union is. As has happened during the debate and, indeed, in the motion, it is often conflated with a free trade area. The two things are often lumped together, but they operate differently. A free trade area achieves reduced or zero tariffs on trade between its members. It is possible to have free trade with the EU from outside the customs union, as Norway and Switzerland do. The motion suggests that being in the, or a, customs union would automatically include frictionless trade between the UK and the EU, and that it would solve the Irish border issue, but that would not automatically be the case. The key to enabling frictionless trade and solving the Irish border issue is a comprehensive free trade agreement that eliminates tariffs, with mutual recognition of standards and the use of new technologies. That is exactly what the Government’s policy is intended to achieve.

To leave the European Union but to remain in the customs union would be the worst of all worlds. It would mean surrendering, subject to whatever agreement is subsequently reached, 100% of our trade policy to Brussels and having zero say on that policy. We would have less say than we do now. I do not see how that is compatible with the referendum, however one voted, and I do not see how it is compatible with this country’s best interests. When we look at the effect of the customs union, I suggest that we can do much better outside it than we can in it.

Britain, which is by nature and instinct a globally trading nation, has always been disproportionately penalised by membership of the customs union. For most of our membership we were the only state—or one of only two—to export more outside the EU than to it. That phased application of the common external tariff in the 1970s hit British consumers and Commonwealth exporters badly, and although there have been improvements, our trade remains distorted. The EU currently has no free trade agreement with the world’s largest economy, the USA, or with rising giants such as India, or with long-standing British allies such as Australia. Where free trade agreements are in place, they are often limited in scope.

In my last 30 seconds or so, I will briefly consider Turkey. I know there is an issue as to what agreement is involved, but Turkey is required to apply EU product standards to its domestic economy, accept the ECJ in those areas, but have no say in the EU’s trade negotiations with third countries. When the EU signs free trade agreements with third countries, Turkey must allow full access to its internal market with no reciprocal guarantee. I do not see how we should seek to emulate that model in this country.

[Several hon. Members rose—]

Digital Taxation

Robert Courts Excerpts

Tuesday 27th March 2018 Westminster Hall

[Robert Courts (Witney) (Con)]

It is a pleasure to serve under your chairmanship, Dame Cheryl.

I start by congratulating my hon. Friend the Member for Harborough (Neil O'Brien) on bringing about this extremely important and timely debate. I know that many points will be made that reflect the strength of feeling in our own constituencies, as well as points about what we will look for from the Government in due course. I declare an interest at the outset as the chair of the all-party parliamentary group for small and micro business.

Online businesses are growing rapidly and will continue to do so. I think we probably all agree that, as that happens, our tax system must catch up. As my hon. Friend said, international tax treaties and much of our domestic tax system were designed in an era when doing business necessitated having a physical presence. Large tech companies are able to create large, complex international tax structures to keep their taxes as low as possible, at the same time as their businesses stretch across borders. Small businesses in west Oxfordshire often ask me whether those large companies, which now take up so much of the market, are paying their fair share of tax. It is a real sore point and a bone of contention for small businesses that are required to have a concrete, bricks-and-mortar presence when many larger companies do not.

Independent high street shops, trading from brick-and-mortar premises, are now competing, in a very real sense, against large online companies that do not pay the same business rates in particular, because they do not have that same physical high street presence. Moreover, large companies can absorb the costs of bureaucracy and overheads—the costs involved in all businesses—much more because they have a larger presence but without the physical footprint.

Small businesses do not have international structures, and they do not have teams of expensive accountants and lawyers to help them to make the system work for them. In many cases they are run by a husband and wife, a father and son or members of a family who have owned a business for years and still work every hour God sends to make it work. The role of Government is therefore to help to level the playing field, to make sure that these engines of our economy and these jewels of our high street are able to compete with the large multinational companies on the internet.

We can all agree that we want our high streets to remain vibrant, buzzing and full of different businesses that sell, make and create all sorts of different products and jobs. I am particularly reminded of that every time I spend a day in my constituency in west Oxfordshire, or when I go around the streets of Witney or Chipping Norton or Woodstock. I know that the shadow Chancellor has a red book that he likes to illustrate his points with. I also have a red book that I will illustrate my point with. I can see the alarm on the Minister’s face as he wonders precisely which red book I am about to brandish, but it is a leaflet for the west Oxfordshire business awards 2018, which I attended last Friday night.

There are an extraordinary number of businesses in west Oxfordshire that do wonderful work, covering everything under the sun that one could possibly imagine: coffee, children’s clothing, travel, gardening and speciality milkshakes—who would have thought it? That is only the finalists for this year’s competition. Hundreds of others were not listed as finalists, and hundreds were listed last year or the year before.

If ever there was an illustration of quite why it is important that the Government pursue the business-friendly policies that they do, it is contained in this little red book—this bible, if you will, of economic success. It is a real testament to the dedication, passion and commitment of people all over west Oxfordshire who wake up one morning, have an idea, take a chance and then, without a large physical presence or large teams of international lawyers and accountants, make that idea a success. It is to help them that I rise today.

I have set out my stall, but what can the Government do? I submit that they can take a number of actions. In 2017, Amazon—I should say that other large online retailers are available—paid £7.4 million in corporation tax, despite making sales worth more than £7 billion in the UK, because tax is of course paid on profits, not on revenue. I suggest that more can clearly be done, and I know that the Government are starting to look at doing it, to reflect the true value of such companies and to ensure that our tax system is designed for the 21st century, not the 20th or the 19th.

I welcome the Treasury’s consulting on a new tax on the tech giants. We need to ensure that they pay their fair share alongside the smaller companies, and moreover that small companies are confident that the tax system is not stacked against them. I draw a distinction between types of online companies. My point is about large online companies; of course, many tech start-ups are online but are very small. I suggest that any such taxation—whether a new tax or an amendment to the existing tax system—should be reserved for the largest international businesses. What better way could there be to fund the NHS, defence or schools than by ensuring that those larger online companies pay their fair share of taxation alongside the small companies?

I am delighted that the 2017 global start-up ecosystem report from Startup Genome ranked London as the third best city in the world for tech start-ups—the only European city in the top five—behind only New York and Silicon Valley. Large cities tend to dominate the headlines, but as I hope I have illustrated, in the green lanes and rural villages of west Oxfordshire are hundreds of companies that drive our economy every day. It is those businesses that will make a real difference to all our constituents, our constituencies and the nation’s economy overall. We must not burden those start-ups with further administrative costs or further taxation. I welcome the action that the Government have taken to reduce corporation tax, but the additional revenue from any tax on big online retailers could enable us to help small businesses further with their corporation tax or to provide for further relief or exemptions for small firms—particularly those on the high street.

The Government can help with this issue, but I am very keen, in the final moments before I let others have a say, to say that there is more that we can do as well. The Government can help to level the playing field, but we must not forget that we all have a responsibility to shop local whenever we can and to support local businesses when possible. We must try to shop from them and not simply go to the large online retailers. That may make things easy, but it does not support those who are living in our towns and villages. We need small businesses—they are the engines of our local economies and they bring jobs, services and colour to our high streets. I ask the Government to bear those points in mind as they consider a way to tax the large retailers.

Spring Statement

Robert Courts Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

Real income growth is the principal target that we focus on, but the country suffered a recession after the financial crisis that wiped out 6% of our national income, and we are rebuilding our economy from that crisis, hindered and hampered by the fact that the previous Government were ill-prepared for the crisis when it came. As I have made clear today, we are determined to ensure that our economy and public finances are in good shape to deal with the economic cycle in the future, because we do not believe that we have abolished that economic cycle, and we have to prepare for future downturns because that is the nature of economic life.

[Robert Courts (Witney) (Con)]

I welcome the progress made in reducing the debt and the deficit, but will the Chancellor confirm that we are still spending £50 billion in debt interest—more than the armed forces and police force combined receive—and if we do not get control of this, there will be less money for the things we value, such as the housing infrastructure fund, Oxfordshire’s excellent submission for which is so important to my constituents?

[Mr Hammond]

My hon. Friend is absolutely right. This is current spending; this is £50 billion that we could spend on hospitals, on schools, or, if we chose, on investment in infrastructure. The answer to this from the right hon. Member for Hayes and Harlington (John McDonnell) is to increase the amount of borrowing we have, and to increase the amount of money we are pouring down the drain every year on debt interest, reducing the amount of money available for our public services. That cannot be the right way to go.

Sanctions and Anti-Money Laundering Bill [Lords] (Fourth sitting)

Robert Courts Excerpts

Thursday 1st March 2018 Public Bill Committees

[Helen Goodman]

Welcome to cold Committee Room 12, Mr McCabe. As we discussed this morning, clause 27 was inserted by those in another place because it was agreed that we need reviews of what is going on. Amendment 24 would extend the coverage of the reviews. At the moment, the clause proposes one question for review: “whether the regulations” relating to the sanctions

“are still appropriate for the purpose stated in them under section 1(3)”,

which is whatever purpose the sanctions have. That is absolutely fine; we agree with it and think it completely sensible, but we want to add two other things that we think should be covered by the reviews. One is the humanitarian impact, and the other is the impact of the sanctions on British citizens who are not their intended target.

Let me tell the Committee about two episodes in which the humanitarian impact of sanctions was very significant and may have made them counterproductive, because they were simply punishing poor people in the countries involved, who were not responsible for the bad behaviour of their leaders. The sanctions had horrendous negative consequences, which led to a lot of anti-western feeling.

The first example is the comprehensive, multilateral, international sanctions imposed on Iraq in August 1990 under UN Security Council resolution 661. As some of us can remember, it was after the first invasion of Kuwait. Before the sanctions, Iraq had imported roughly 70% of its food, medicine and chemicals for agriculture. Obviously, Iraq was a very wealthy country because of its oil reserves, but with trade sanctions imposed, it could not use that wealth to buy food. Some time later, in 1998, Denis Halliday, the United Nations humanitarian co-ordinator in Iraq, said:

“We are in the process of destroying an entire society. It is as simple and terrifying as that.”

UNICEF came to the view that the sanctions caused the deaths of half a million Iraqi children. That is a terrible death toll and not one that any of us can be comfortable with. Although the idea was to have sanctions instead of hot war, the toll of death and suffering for the Iraqi people was probably as bad from the sanctions as it would have been from hot war. We think that should be taken more into account.

Of course, the situation in Iraq was and is highly contested, but that is why we have tabled amendment 25, saying that the assessment must be done in accordance with the UN Inter-Agency Standing Committee’s “Sanctions Assessment Handbook”. We are saying we should have an agreed methodology for making this assessment, because that way we are more likely to reach an agreed assessment of what the impact of sanctions is; then people can stop arguing about the facts and start considering whether sanctions are justifiable or not. We are not saying that this is the only question to be considered. We are saying the questions should be, “Does it achieve the objectives?” and “What is the humanitarian impact?”

There was another serious case a few years later—all of this happened some time ago, but it is significant none the less. In Haiti, following the military coup of 1991 and the fraudulent elections of 2000, the international community reacted by imposing sanctions. Here again the impact on ordinary citizens was devastating. By 1994, the rate of malnutrition among children under five in many health institutions had increased from 27% to more than 50%. The UNICEF view was that thousands of children died as a consequence.

Of course, both those cases involved countries with a history of bad governance, so disentangling the results of bad governance and the results of the humanitarian sanctions is not absolutely straightforward, and I am not saying that it is absolutely straightforward. Nevertheless, these cases reinforce the argument for amendment 25.

We have also proposed adding that the impact on British citizens who are not the targets of the sanctions should be taken into consideration. It is quite easy to stand back in the Chamber and say, “Oh, we think we should impose sanctions on this person or that person.” The hon. Member for Witney is nodding fiercely; I hope he is nodding at what I am saying.

[Robert Courts (Witney) (Con)]

Oh, certainly.

[Helen Goodman]

Of course, sanctions also have an impact on British commercial and economic interests, and on British commercial and economic actors. I will give the Committee a couple of examples of that.

In a more recent example, from 2014, we decided to impose sanctions against Russia after the intervention in Ukraine and the annexation of Crimea. One of the things that the sanctions covered was technology for oil and gas, which is obviously a very big sector in the Russian economy. SMD, a specialist engineering firm in Newcastle, makes sophisticated robots that operate on the seabed, doing the job of deep-sea divers. Those robots were banned and the chief executive of SMD—Andrew Hodgson, who I have met—highlighted the damage to his business. He said:

“Imagine we’re a 500 employee business and 20% of your business doesn’t exist, that’s 100 jobs and obviously we’ve been working hard on the technology”,

which is very modern technology. Normally, the company would have exported £20 million worth of equipment, but that business was lost, straight away. Another reason for considering the impact of sanctions on British citizens and the cost to the British economy is the possibility of counter-sanctions imposed by the person or country we are sanctioning. Russia retaliated by banning imports of agricultural and other produce from both the European Union and the United States, including mackerel from Scotland. That was not great for Scottish fishermen.

Nissan was also extremely badly affected, because the effect of the sanctions on Russia was that the rouble plummeted. Nissan had been paid for its car exports in roubles and was not hedged sufficiently to deal with a big drop in the rouble. It halted all the orders because it could not afford to take the loss, which was significant, although not as bad as if it had sold the cars at a loss.

We are pleased that the Government inserted clause 27 and that they are taking a consensual approach to the Bill—

Oral Answers to Questions

Robert Courts Excerpts

Tuesday 27th February 2018 Commons Chamber

[Elizabeth Truss]

My hon. Friend makes a very good point. Local government funding has not been fair enough. That is why we are consulting on a fair formula at the moment, and I will look with interest at his representations.

[Robert Courts (Witney) (Con)]

20. What progress is being made on reducing the deficit.

[The Financial Secretary to the Treasury (Mel Stride)]

In 2010, we had a post-war record level of deficit at 9.9%, and we have reduced that to 2.3% as of last year. The Office for Budget Responsibility forecast in November is that the deficit will further decline to 1.1% of GDP by 2022-23.

[Robert Courts]

Will the Minister give an estimate of the effect that our deficit reduction measures have had on relieving the tax burden for younger generations?

[Mel Stride]

My hon. Friend raises a critical point about the importance of getting the debt down to make sure that future generations do not carry the burden of it. That is why we have reduced the deficit by three quarters and why we are going to hit our reduction in the level of debt as a percentage of GDP two years early, in 2020-21.

Oral Answers to Questions

Robert Courts Excerpts

Tuesday 16th January 2018 Commons Chamber

[John Glen]

The Government recognise the challenges facing those on lower salaries, which is why we have increased the tax-free allowance, have had the eighth successive fuel duty freeze, and have increased the national living wage above the inflation rate.

[Robert Courts (Witney) (Con)]

Will the Minister confirm that the lowest paid have had a real-terms pay increase of 7% since 2015, showing that this Government’s policies are targeted to help the lowest paid?

[John Glen]

My hon. Friend is right. The Government do not take anything for granted and will look very closely at what is happening with the poorest in our society.

Finance (No. 2) Bill

Robert Courts Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

In conclusion, I would like to know how and when the providers in Bristol South—indeed, I am sure many hon. Members would like to know this about their own constituency—can expect to access additional funding, for which subjects and at what levels so that people are prepared for those qualifications. I want the people of Bristol South to share in the greater prosperity in my city, and indeed in this country. I will support the amendments tabled by our Front Benchers in relation to using this money differently following a review of the bank levy.

[Robert Courts]

It is a great honour to speak in the debate on this very important matter, and particularly to follow the hon. Member for Bristol South (Karin Smyth). She made some very interesting points, and I am glad that she supports many of the technical education measures that the Government are bringing in. I entirely agree with her that this is one of the great challenges the country faces, and I applaud the Government’s work in setting out a framework for technical education in the future.

I want to talk directly about the bank levy. All hon. Members on both sides of the House probably accept that it is very important for the banks to pay a fair contribution towards public services and the tax yield in this country. They are significant employers with significant operations and they are wealthy and profitable enterprises, but it is very important to have a balance. Such a balance throws into relief the fact that banks are responsible not just for being profitable and therefore for paying tax, but for introducing liquidity into the system and enabling us to borrow.

If any hon. Member has ever borrowed to buy a car or a house or to invest in a business—many of their constituents will of course have done so—the money will have come from a bank in most cases. It is very important that banks are enabled to provide precisely that service, so there has to be a balance. Yes, they must pay a fair share towards the economy and society in which we all live, but that share should not be so large that their ability to lend is decreased. I suggest that this Government have got the balance right. In 2010, the Conservative coalition Government increased regulation, and in 2011 they introduced the bank levy, which reflected the risk inherent in the banking sector. It is an inherently risky sector because of the very nature of the way in which it operates, and the bank levy was introduced precisely to recognise that risk. It was introduced to incentivise the banking sector as it then was to invest in a way that was less risky than the ways in which it had operated up until that time.

That spirit of balance, which is the keynote point of my few remarks this evening, is why we need reform now. There is a gradual shift from the levy to taxing profit, recognising that the regulatory regime globally, as well as in this country, has moved on considerably since it was introduced. Since 2016, we have had an 8% tax on bank profits—the corporation tax surcharge—which will raise £9 billion between 2017 and 2022. The bank levy rate will be reduced to 0.1% over the same period. Of course, there is the additional fairness brought by ensuring that the levy affects only UK balance sheets. UK-based banks must never be disincentivised from being based here, rather than being based abroad and operating here. We can make those changes now because of the improvements in global regulation.

Members from all parts of the House should recognise that it is important that we, as politicians, do not become too fixated on the rate of taxation, but rather look at the revenue that is earned. I suggest that this Government have got that balance—that key focus—correct. That is the economic paradox of taxation rates. We heard about the Laffer curve from my hon. Friend the Member for Stirling (Stephen Kerr). If there is 0% tax, 0% taxation is received. If there is 100% tax, 0% taxation is received. The point is where precisely the balance is struck. I suggest that the Government have got it correct.

The measures that we have brought in since 2015 have introduced an additional £7 billion through to 2023, bringing in a total of £30 billion over and above what would have been brought in through corporation tax in any event.

[Peter Dowd]

I am not quite sure that the hon. Gentleman is correct about that, because the Institute for Fiscal Studies states:

“Cuts to corporation tax rates announced between 2010 and 2016 are estimated to reduce revenues by at least £16.5 billion a year in the short to medium run.”

Even the Treasury’s own figures show that the cost has been significant.

[Robert Courts]

I simply do not accept that point, with the greatest of respect to the hon. Gentleman. It is quite clear that the reduction in corporation tax, which I am glad he has mentioned, has led to an increase in revenues over that period. It is accepted that GDP is expected to increase by 1.3% in the long run. The receipts have increased by 50% since the Government have been reducing the corporation tax rate, from £36 billion to £55 billion between 2010 and 2016. That is an increase to £55 billion going to the Exchequer over that period.

[Ian Paisley (North Antrim) (DUP)]

The hon. Gentleman is absolutely right. We have seen the boost in spending generated by the proposed reduction in VAT on the hospitality trade in Northern Ireland before the measure even kicks in. I suggest that if the Government had the bottle to do away with air passenger duty—that would be an exceptionally good move—we would see even more air travel and an increase in tax take overall.

--- Later in debate ---

[Robert Courts]

I thank the hon. Gentleman for those excellent points, which reinforce the point I am making.

Of course there has to be taxation, but we must strike a balance with the level of taxation. I know it is paradoxical, but sometimes when tax is reduced, there is an increase in the amount of tax that is taken because it sponsors the amount of work that business is able to do. When business is able to do more work, it earns more money, it pays more tax, it is able to employ more employees, those employees pay more tax and hopefully their wages increase. I am sure that Opposition Members will be glad to ensure that we have measures that increase wages. That is something we should all aim to do, not least because it increases the tax take and the funding for our public services.

I suggest that the Government’s measures can in no way be described as a bank tax giveaway, because 58% more is being paid in tax than was the case under Labour. An additional £27.3 billion was taken through corporation tax, the bank levy, national insurance, the bank surcharge and income tax in 2016-17 than would otherwise have been the case. A 35% increase in the amount of taxes paid by the financial services sector since 2010 is an extraordinary figure. It has been made possible by this Government’s sensible tax policies.

[Nigel Huddleston]

My hon. Friend is making a very important point about tax fairness. Whether corporations or individuals, the top 1% of income tax payers pay more than double what the bottom 50% pay. It is a similar principle.

[Robert Courts]

It is exactly the same principle with personal taxation. My hon. Friend makes an absolutely outstanding point. He is quite right and we must not forget that the principle is the same for personal taxation as it is for corporation taxation. Not only is the tax yield increasing, it is also borne by those who earn the most. It is indeed progressive and, I would hope, something all Members could support.

I know other Members wish to speak, so I will conclude with this point. An Opposition Member suggested that no one on the Government Benches has spoken about wages, public services and so on. I would very much like to concentrate on them in these last few seconds of my speech. It is through our tax regime, the sensible taxation policies that this Government have put in place since 2010, that we are now able to see an increase in—

[Peter Dowd]

Given those sensible taxation levels and rates, will the hon. Gentleman explain why productivity is the lowest of all our competitors, inflation is higher than our competitors, wage stagnation is almost becoming endemic, investment is slower, and economic growth is on the floor? If having these so-called lower rates of tax is such a fantastic opportunity for businesses, how come we are still in this particular situation?

[Robert Courts]

I am grateful, as ever, to the hon. Gentleman for making his points. He makes a number of them and it will not surprise him that I do not agree with him. We have record investment, an extraordinary economic miracle and a jobs miracle. We are still having to recover from the economic mess the Labour party left us in. There is absolutely no two ways about it: the Labour party left us with record levels of national debt.

Our economy is seeing an increasingly benign environment. That has been made possible by the sensible taxation measures the Government have allowed to take place and have sponsored. It is through that tax regime that there is more to spend on public services: companies can look to increase wages, hire more staff, pay more tax and thereby fund the public services we all need.

[Rosie Duffield (Canterbury) (Lab)]

The Chancellor, in his Budget speech, offered nothing at all for our vital children’s services, which are already struggling and stretched. He was, however, able to find £5 billion of tax relief for bankers, so it is certainly a happy Christmas for them this year. The additional new surcharge on banks and the changes announced to the bank levy mean that the amount received will reduce by a third over time.

A less happy Christmas awaits the staff, parents and children who use the Riverside Sure Start children’s centre in my constituency. On Thursday, I was told that Kent County Council is considering plans to close this beloved centre. The council talks about making efficiency savings and bringing services in house, but we all know what that could mean: more victims of Kent County Council’s ruthless cost-cutting drive in line with this Government’s. When it comes to cuts, it seems to me that Kent County Council is doing its very best not just to throw metaphorical babies out with the bathwater, as real children and babies are being betrayed by this heartless agenda to keep the council in the black.

Kent County Council does not know when to stop. Many families in my community and from local schools rely on the services provided by our children’s centre. Those services include stay and play sessions, vital family support and outreach for parents. They also include advice and help with all aspects of childcare, school choices, breastfeeding support, health visitor and midwife clinics, post-natal depression advice, parenting skills, and speech and language services. Furthermore, the centre threatened with closure in Canterbury also offers advice on employment and opportunities to engage in adult education and training. Riverside children’s centre celebrated its 10th birthday last year. Since it opened in 2006, almost 7,000 children have attended the activities provided and nearly 2,000 families have registered with the centre.

--- Later in debate ---

[Jonathan Reynolds]

I am grateful to my hon. Friend for sharing his expertise with the Committee. It truly is an appalling record of failure.

As every Member knows, there are enormous problems in the private rented sector in respect of affordability, quality and security of tenure. By forcing service families into the private rented sector, we risk reducing the quality of their accommodation and their quality of life. It might therefore impact on recruitment and retention rates.

The Government have so far offered little detail on which members of the armed forces will be entitled to the new allowance or what the rate will be and have not said whether the Treasury has done an impact assessment on local housing supply. The proposal ignores the fact that there is not a supply of affordable housing to buy or rent near many military bases.

It seems clear that the Government are attempting to rush the proposal through to make short-term savings, without considering the potential repercussions. Labour is demanding more consultation with armed forces personnel and a full and robust impact assessment of any proposed changes. Clear communication with armed forces families must be a top priority throughout this process and their long-term interest must be considered, as well as the long-term value for money for the taxpayer. Committing to sell this Government-owned housing risks shackling the public purse to ever-rising rents, as well as poor outcomes for armed forces personnel.

Given Labour’s concerns over the lack of detail over the armed forces allowance and any potential safeguards for members of the armed services in the private rental sector, Her Majesty’s Opposition have tabled an amendment that calls on the Government to publish a review of the measure to Parliament before it is enacted.

Overall, the measure forms part of a housing package that barely scratches the surface in addressing the country’s housing crisis. All the measures are too minimal to make a serious difference to the housing pressures that people face and too late to make up for the Government’s lack of action over the past seven years.

[Robert Courts]

It is a great pleasure to speak in this debate. I only wish to make some very brief comments because I have already spoken this evening and I am conscious of the fact that other Members wish to speak.

I will make a few comments about the armed forces exemption that we have just been discussing, because it has particular relevance to my constituency, where a great amount of the Royal Air Force is based at Brize Norton. We are awaiting the redevelopment of the two REEMA sites, which are particularly important. Already, a great number of Royal Air Force and Army personnel live either on the base or outside it, in particular in Bampton, Witney, Carterton and Brize Norton village.

I am glad that the Government have proposed this welcome measure. It falls into a similar bracket as the Armed Forces (Flexible Working) Bill, which we have discussed in the House over the past few weeks and months. It is important that we understand that expectations are changing. The armed forces offer must be able to stand alongside what can be received in the civilian world. This measure has the potential to provide exactly that.

At the moment, there is the anomaly that if personnel live in Ministry of Defence accommodation, it is essentially provided tax free, but if an armed forces allowance is given, there is taxation on it. That is how the rules work at the moment, so clearly personnel would be disadvantaged. We have to accept that in many cases, armed forces personnel wish to live outside a base, perhaps close to where their spouse works or where their children go to school. I welcome the measure because it moves us a step along the road towards realising that.

[Sir Mike Penning (Hemel Hempstead) (Con)]

The people who serve in our armed forces today—I have some experience of this—are looking for a different model and a different way of life for their families to grow up in. In the old days, they would have been in the garrisons or the ports. My constituency is further from the sea than anywhere else in the country, yet I have Royal Marines bringing their families up in the town. They are penalised for doing that because of the way the scheme works now. The new scheme will help them and they tell me that they are looking forward to it.

[Robert Courts]

I am very grateful to my right hon. Friend for making that point. His constituency is very similar to mine in that respect. I welcome this measure and I anticipate that my constituents will as well.

Those brief comments are the only ones I wish to make. I very much welcome this measure because it is in the interests of west Oxfordshire, in particular Brize Norton. It helps to bring forward the offer to which my right hon. Friend refers. We have to accept that there is a change in expectation on the part of many members of the armed forces and this is welcome.

[Sandy Martin]

I am concerned about the lack of impact that financial incentives for first-time buyers appear to be having on encouraging housebuilding. The recent pay-offs for Persimmon Homes executives are surely good evidence that a substantial proportion, if not all, of the Government’s money is going into exceptional profits for private housebuilders, rather than genuinely making homes more affordable. We need to know that any money or tax incentives that the Government put into housing will genuinely help people to achieve the housing they need.

The cost of housing for residents is not just about the building itself, but the costs of running the building. New houses are still being built which make short-term savings for the builders at the cost of a long-term expense for their owners or tenants, and also at a long-term cost to the environment. Ipswich Borough Council had a substantial plan to install solar PV panels on all suitable roofs on its substantial council housing estate. It was all set to go in 2013 when the Government moved the goalposts and blew a hole in the business case. The Government seem to be willing to promise vast sums as guarantees for new nuclear powers stations, but they are not willing to use the extensive potential tax powers at their disposal either to incentivise housebuilders to install photovoltaics in original buildings or to adequately incentivise owners to install them on existing buildings.

Increasing the number of solar panels on the roofs of this country would be one of the most cost-effective ways of generating the electricity we need. It would be more beneficial to the residents of those buildings. It would take effect far sooner than waiting for the construction of nuclear power stations and it would predominantly employ working people and small businesses in this country.

Many of us were hoping that the Government would have found further substantial incentives for solar panels in the Bill. I can only hope that a review of the operation of housing finances and an equality impact assessment of the way the Bill will affect low-paid people might encourage the Government to look again at how they can make housing less expensive for those who live in it.

Finance (No. 2) Bill

Robert Courts Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Dr Johnson]

My hon. Friend brings me to my next point. These investments are welcome, but we also need to invest for those people who are currently receiving poor service. Church Lane in Kirkby-la-Thorpe in my constituency has among the lowest broadband speeds in the entire country. In some parts of this country, downloading a film takes longer than flying from London to Sydney. There are children in that area who are unable to do their homework, while shopping is impossible and dealing with tax online is difficult. The Government have invested strongly in this, and now over 90% of people have access to superfast broadband, but I urge them to take any steps they possibly can as soon as possible to ensure that those few remaining homes that cannot yet do so can receive superfast broadband and are connected to this vital utility which, as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) said, will be vital for the provision of healthcare.

People in rural communities face long travelling distances when they go from their home to school or work. That is why I welcome the Chancellor’s freezing of the fuel duty for the eighth consecutive year. This is the longest such freeze for 40 years.

[Robert Courts (Witney) (Con)]

My hon. Friend is making many excellent points. Does she agree that there is a link between the point she has just made about broadband and what she is saying about long travelling distances? The quicker the broadband speed, the shorter the distance anyone will have to go to work, because instead of having to go to an office, they might just have to go from their kitchen to their living room.

[Dr Johnson]

It is indeed true that slow broadband speeds can be a challenge for people running businesses in rural areas.

The freezing of fuel duty means that the average car driver in the UK is £850 better off since 2010, which is not an insignificant amount, while the average van driver is £2,100 better off. Therefore, through this measure, the Government are supporting hard-working families and small businesses, particularly in rural areas.

--- Later in debate ---

[Robert Courts (Witney) (Con)]

It is an honour to follow my hon. Friend the Member for Redditch (Rachel Maclean), whose impassioned speech took in so many detailed points with respect to the Opposition Front-Bench team. It was a forensic dissection of their economic policy from which they will struggle to recover for months and years.

This is a Budget and Finance Bill that the people of Witney and West Oxfordshire will warmly welcome. It is strategic and finely focused on the challenges that the country faces. Moreover, it operates within a constrained and careful financial climate. The Government understand the requirement for sensible fiscal policy. They understand that it is not possible simply to promise endless spending without any idea of how it will be paid for. They do not think it is simply a matter of appealing to certain groups by promising them whatever it is suggested might be wished for at the time. The Government take a sensible, practical attitude—one of financial probity and, one might even say, prudence, a concept that was once respected and beloved by the Labour party. For all those reasons, I welcome the Bill, which forensically and strategically identifies the challenges the country faces and puts in place methods and means by which to combat them.

I start my brief remarks by looking at the positives achieved by the Government and their predecessors since 2010. It is worth repeating this because it is an extraordinary record, and I hope very much that the Minister will repeat some of it, if he thinks these achievements are worthy of repeating. We have an extraordinary financial and economic record. The Government have achieved an economy that has grown by 15.8% since 2010. The deficit has been cut by two thirds and debt is scheduled to start to fall next year.

[Alex Chalk]

Does my hon. Friend, like me, welcome the fact that at the same time as the economy has been growing the tax system has been made more progressive so that the top 1% now pay 27% of the entire tax revenue—

[Alex Chalk]

I am corrected: they pay 28%, which is a higher proportion than ever before.

[Robert Courts]

My hon. Friend makes an extremely good point that we have not heard often enough. We should absolutely keep making the point that although we hear talk of a progressive tax system from the Opposition, we see action from the Government. The 1% of highest earners now pay 28% of tax. That proportion is higher than it ever was under Labour. That is a record to be proud of. It is real progressive, practical politics from the Conservative Government.

[Stephen Kerr]

My hon. Friend quite rightly talks about the progressive nature of the tax regime that has been very carefully fostered by this Conservative Government. Is he aware that, for the Scottish Budget this Thursday, the Liberal Democrats in Scotland are proposing to increase income tax on people who earn £18,000 a year? Can he tell me what he thinks about the progressive nature of such a suggestion from the Liberal Democrats in Scotland?

[Robert Courts]

That is a horrifying suggestion. I am not surprised that that is the attitude of the Liberal Democrats in Scotland, because it is one that we see in many parts of this House—from those who do not understand that when we raise taxation on the lowest paid, it means that those people have less money in their pockets, which reduces their ability to make the decisions that they need to make with regard to themselves, their family and their life chances. When we take money away from people, we remove their freedom of action, their freedom of manoeuvre and the investment choices that they may make for their children. It is a totally unprogressive attitude.

[Ian Paisley]

Does the hon. Gentleman agree that the change by this Government in the manner, timing and way in which VAT is paid by small companies up and down the country has been significant and progressive, and has been welcomed by hundreds and thousands of businessmen and women?

[Robert Courts]

The hon. Gentleman makes a very, very good point. As chairman of the all-party group for small and micro business, that is something that is very close to my heart and the hearts of those for whom I endeavour to speak in Parliament. That matter has been a concern. I know that the hon. Gentleman has campaigned on it, as have I and many others. The simplification of the VAT regime and the ability to pay online will streamline the tax process for small businesses. I am grateful to the Government for the action that they have taken in ensuring that that burden is not too onerous.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I thank my hon. Friend and neighbour for giving way. Is he aware that since 2010 we have raised £160 billion from tackling tax evasion, yet the shadow Chancellor says that he will raise even more from tackling tax evasion. Does that not show that he is living in fantasy land?

[Robert Courts]

My hon. Friend is absolutely right. This is a Government who are cracking down on and taking serious, practical and effective measures against tax evasion. What we hear from the Opposition are measures that will drive businesses and investment abroad. They will not invest in the businesses that we need to help grow the economy and grow jobs. What we see from the Government is effective management of the economy, and what we see from the Opposition is, as my hon. Friend quite rightly said, fantasy. The irony is that their measures will destroy jobs, destroy the economy, destroy productivity and destroy the tax revenues on which our public services depend. The policies from the Opposition will mean less, not more, for the public services.

[Rachel Maclean]

As my hon. Friend is explaining so clearly, when we lower taxes on small businesses, we raise more money—in fact £20 billion more, which is a significant investment.

[Robert Courts]

My hon. Friend is absolutely right. It is quite important that we have sensible measures in place to ensure that more money is raised for our public services.

[Ian Paisley]

rose—

[Robert Courts]

I will not give way, as I wish to make some progress in the short time that I have available to me.

I have highlighted the positive attributes and achievements of this Government. There is a range of Budget measures that I am particularly pleased to see, including: the establishment of the National Productivity Investment Fund; the increase in the national living wage; and the rise in the personal allowance, all of which are progressive policies designed to help the lowest paid. I am particularly pleased to see the new house building measures. Homes are what we need to ensure that people in this country have somewhere to live, somewhere that is of high quality, and somewhere that they can afford. I am pleased to see the stamp duty measures, and measures in relation to skills and research and development.

Recently, I was lucky enough to visit Johnstone Safety Products in my constituency in Minster Lovell. It is based in an old mill in the heart of the Cotswolds country, a beautiful, bucolic area. When a visitor arrives at this old mill, what they will see is a thriving factory. When they go around, they see robots churning out up to 40% of the safety products for above neck height. When we see how the world’s market depends on that business in my Witney constituency, we realise quite how important it is to rely on research and development and the robots, which are bringing manufacturing jobs back to this country. They are not taking jobs away from this country because those jobs would not exist without that technology. In the heart of rural west Oxfordshire is a thriving economy based on manufacturing. That is just one of the great many things that the Budget has brought to my constituency and, indeed, to the whole country.

I welcome the air quality measures in the Budget. If I may, I will concentrate on Oxfordshire for just one or two moments more. I very much welcome the £150 million of infrastructure money—£30 million of capital funding a year for five years—that has been promised, and the £60 million for affordable homes. We have heard from my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) that LIBOR funding is going to her constituency. West Oxfordshire has also been the beneficiary of LIBOR funding. I am glad, Mr Speaker, that you have resumed the Chair because you will remember me recently mentioning ZANE: Zimbabwe a National Emergency, and Tom Benyon. Well, that charity has received £1.3 million in LIBOR funding, which is going towards 583 Commonwealth servicemen looked after by ZANE. In addition, RAF Brize Norton has been given £250,000 for renovations.

There are so many things in the Budget, and I could go on; I wish I could. [Hon. Members: “Hooray!”] I am delighted that the entire House is so keen to hear me continue to speak, but I will now draw my remarks to a conclusion.

Finance Bill

Robert Courts Excerpts

Tuesday 31st October 2017 Commons Chamber

[John Redwood]

That is correct. Tax havens have helped to drive down tax rates in other centres. We only have to look across to Ireland to see how attractive it can be if a mainstream country decides to take its corporation tax rate down to very low levels. Ireland attracts a lot of company-based investment. Each country has to decide where it wishes to be on that spectrum. A high enough rate is required to collect serious money, but a low enough rate is needed to not deter some of the best prospects for coming, staying and paying taxes. In the light of what America is about to do and what some of the smaller European countries are doing, this country is in danger of becoming uncompetitive on taxation.

[Robert Courts (Witney) (Con)]

My right hon. Friend makes a very important point: how important it is that this country does not deter people who bring in money, which in turn funds our public services. Does he agree that if we were to take the course of action urged upon us by the Labour party, we would put at risk the £9 billion of investment into our coffers brought in each year by those who are not domiciled in this country?

[John Redwood]

That is exactly the kind of sum of money I am talking about. That is a serious sum of money for our economy and it is a nice balance. All of us want to collect serious revenues. We are here because we want good-quality public services, but we also want a productive, growing and exciting economy. We need to have realistic tax rates and tax rules. All the evidence is that every time the coalition and Conservative Governments have had the courage to cut rates, they have raised more revenue. That shows that our rates have been on the high side for optimising the revenue.

Taxes on Small Businesses

Robert Courts Excerpts

Wednesday 18th October 2017 Westminster Hall

[Ms Nadine Dorries (in the Chair)]

Order. It is appropriate etiquette for any Member who wishes to speak to rise and catch my eye. Is Mr Davies the only remaining Member who wishes to speak?

[Robert Courts (Witney) (Con)]

rose—

[Ms Nadine Dorries (in the Chair)]

I call Mr Courts.

[Robert Courts (Witney) (Con)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I welcome the chance to speak in this important debate, which I congratulate my hon. Friend the Member for St Ives (Derek Thomas) on securing. I declare at the outset my chairmanship of the all-party group on small and micro business, and my practice at the Bar, both of which have a clear bearing on the debate. I also refer hon. Members to my entry on the Register of Members’ Financial Interests.

There is no doubt that small businesses are the drivers of our economy—the agile, risk-taking job creators. It is no exaggeration to say that they are the very fabric of our society. That is never clearer than when I walk around my constituency of Witney and west Oxfordshire and see many hundreds of brilliant examples of small businesses that have started from scratch in small premises. As my hon. Friend the Member for Newark (Robert Jenrick) says, many of them start around a kitchen table. I recently launched the West Oxfordshire Business Awards, at which I saw some fantastic examples of such businesses. They make the importance of small business crystal clear.

It is essential that we continue to work towards a low-tax economy. I entirely concur with my hon. Friend about this Conservative Government’s attitude to support for small businesses and the low-tax economy they have fostered. I thank them for it. There is no doubt that the burdens of taxation on small businesses are significant: it is estimated that they spend about £3,600 per year and three hours per month on administering the tax burden and complying with its obligations. It is incumbent on us to reduce those obligations to as limited a level as realistically possible. The chief culprits are VAT, corporation tax, income tax and PAYE.

Making Tax Digital is a key plank of the Government’s agenda. I freely confess that when I practised at the Bar before being elected to Parliament, I did not hugely look forward to filling in my annual tax return or my quarterly VAT return, so I was not wildly enthusiastic about the prospect of doing either more frequently. Setting aside that immediate reaction, once the system has bedded in and people have got used to it, it will clearly make it easier in the long run for small businesses and microbusinesses—as well as sole traders like me—to do tax returns online and more frequently, rather than in a massive chunk at the end of the year.

I welcome Making Tax Digital, and I think its benefits need to be explained to all businesses, but I ask the Government to ensure that complying with it is not an onerous burden for small businesses. Chief among my concerns are training and software. I make a plea that the software be fully tested before digital taxation is rolled out, so that it works smoothly and unintentional difficulties are not introduced. I also applaud the amended timetable that was laid out in July; I think it was the Minister who is here today who did that. Clearly the Government have listened to some of the concerns that have been expressed by small businesses and that amendment will assist them greatly.

I welcome the national living wage and the start of auto-enrolment for pensions. Those measures have done so much under this Conservative Government to help the lowest paid in our society and to ensure that people have planned for a successful, safe and financially secure retirement; they are much to the Government’s credit. However, there is an impact upon small businesses, especially those with lower margins and those for whom the staff costs—childcare, social care and so on—are particularly high.

I ask the Government and the Minister just to consider whether they might be able to support employers further by looking at increasing the employment allowance, simply because that is something that companies tend to use to put into investment in technology, hiring more staff or raising wages. The small business community would welcome such an increase.

It would not be right for me to make a speech in this debate without mentioning business rates, which of course are a major concern to many small businesses. Again, when I walk around my constituency—including the streets of Witney, Burford and Chipping Norton—and see the wonderful small businesses that are so unique, I am reminded how important it is that we never reach a situation in which we have identikit high streets and essentially the same chains populating towns.

I thank the Government for having listened to the concerns expressed earlier this year with regard to the discretionary relief fund—the £300 million that was produced and given to local authorities. I pay tribute to my council, West Oxfordshire District Council, which is well on its way to distributing the help that has been given by central Government to local Government. I would like to make it quite clear at this stage that there is good evidence in Witney that that help has made a real difference and saved some businesses that might otherwise have been unable to cope. So, as I say, I thank the Government for that.

However, I have some concerns about the administration that is involved in any business rates system, particularly with regard to the valuation office. A constituent has been locked for four years in an unresolved dispute over the valuation of their property. The layers of bureaucracy, which are confusing enough for those of us who regularly deal with these matters on a casework basis, are particularly challenging for small businesses. I would like to see a quicker and more efficient appeal process for the purposes of business rates valuation.

I will just say a few words about the online environment, which I know the Government are working on. An incredible world exists for us now. When we are sitting here having made our speeches, we can order things online—all sorts of products from all over the world. Gone are the days of needing to visit another country to get their products; we can get their products brought here to us. That is extraordinary but there is a real issue when small businesses, such as those I have referred to, that are trading from brick and mortar premises are up against large companies that are not paying the same business rates because of their obvious lack of such a physical presence. It is very difficult to compete against those companies, and likewise against the larger multinationals or nationals who can more easily absorb the costs, the bureaucracy and of course the taxation that is involved. I know that the Government are aware of that and that they are doing something about it; I simply flag it as something that is very important for small businesses.

We must also remember that there is an element of choice for consumers, and that it is incumbent upon all of us to spread the word among our constituents about the brilliant small businesses that we have in our local area. In my constituency there is a great local bookshop in Woodstock. Well, if we want to have that shop, or the florist in Witney, we need to go in there and buy things, and not buy everything from Amazon. Those shops need to be there and we need to support them and actively make that choice. And let us not forget what such shops can give, because there is the real customer service—the care and dedication—that one gets from businesses that their owners really feel about, when they have set them up from their own kitchen table and grown and sustained them through their own blood, sweat and labour.

I will conclude by saying that as we leave the European Union we have an extraordinary opportunity to make Britain the most business-friendly environment in the world—the best place to start the small businesses that really are the lifeblood of our local economies. I am entirely confident that that British entrepreneurial spirit will ensure that we continue to thrive outside the European Union and make the most of those global opportunities that are there for the taking.

However, we all need to continue to ensure that we have the business-friendly environment that encourages and unlocks the talent that we have, which means a low-tax and low-regulation environment, to make sure that our local businesses not only continue to survive but continue to thrive. I know that is the case under this Conservative Government, and I applaud all activities in that regard and in that direction.