CERN Pensions: UK Tax Treatment

Robert Jenrick Excerpts

Thursday 15th March 2018 Commons Chamber

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I can always count on my hon. Friend the Member for Spelthorne (Kwasi Kwarteng) to put me in my place.

I thank my hon. Friend the Member for Poole (Sir Robert Syms) for highlighting this issue. I want to say how proud we are of the pioneering work carried out at CERN and of the work of all those who have retired and returned to the UK. Poole is a beautiful place to retire to, by the seaside.

It seems appropriate to be talking, if only tangentially, about CERN’s work in the week in which we lost that great physicist, Stephen Hawking. One of the few scientific bets that he lost in his career was that the Higgs boson would never be found, so even somebody of his genius can get things wrong every now and again.

The Government are committed to a fair and consistent tax system. This is especially important in pensions, as the Government promote saving through tax incentives and allowances. We want those incentives to work and to be fairly distributed. My hon. Friend outlined the history of the issue before us today. As he said, the Government reviewed this regime at autumn statement 2016, and announced that the UK tax treatment of foreign pensions would be changed to be closely aligned with that of UK pensions. Following that, the Finance Act 2017 legislated so that, with effect from 6 April 2017, 100% of income from foreign pensions has been liable to UK tax; it was previously 90%. This aligns the tax treatment of UK pensioners with the treatment of those who earn their pension overseas, ensuring a fair system. At the outset when contributions are made towards a pension—whether that pension is UK or foreign—they are usually free of any tax paid in the UK. With this change, the tax treatment of contributions and payments are now consistent.

My hon. Friend raised a series of points on which I hope to provide some clarity. He was kind enough to speak to me before this debate and mention a number of international organisations where British citizens work and make a valuable contribution, including the OECD, NATO, the United Nations and others. My hon. Friend noted that pensioners from these international organisations or organisations of a similar type are reimbursed, for example, 50% of their income tax payments. It important to say that this does not arise as a result of any country’s tax rules. It is not because of a particular deal made by the United Kingdom with any of these organisations, but because of the specific provisions within the pension scheme of that international organisation.

It would be CERN’s decision whether it wanted to make a similar provision in its pension scheme either for the future, or to reopen and reassess their past practice for CERN pensioners who had retired, were drawing on their pensions and are now my hon. Friend’s constituents. Any payments received by UK residents are subject to UK tax, including reimbursement. That is the case for all international organisations. I will return to the EU, which, as is so often the case, has special treatment.

The UK only supports special tax treatment for international organisations when the employees have worked for the organisation in the UK, which I hope my hon. Friend will understand is a somewhat different situation for tax purposes. Aside from the EU, the UK has no bilateral agreements in relation to the tax treatment of international organisations with other countries. We do with the EU, which is our only exception, and that is common practice across the Union.

My hon. Friend mentioned international comparisons. We understand that other major economies are typically taking a similar approach to the UK with respect to taxing pensions. Countries such as France, Germany and Switzerland all tax occupational pensions such as CERN’s and the foreign income of their residents. There may be other examples such as those that he raised and spoke to me about earlier. Of course, I am happy to look into that. It may be a topic that we could discuss were we to meet. Certainly, our major international competitors and the countries from which, one presumes, a majority of CERN’s employees are drawn take an approach similar to the one that we have taken.

In our correspondence prior to this debate, my hon. Friend suggested that the Government could introduce a 25% tax relief on CERN pensions to mirror the tax-free lump sum. I understand that that would be an attractive proposition for CERN pensioners. However, the tax-free lump sum is not an allowance. If a qualifying lump sum is not paid, this relief is not available. These lump sums can be paid free of UK tax whether built up in a foreign or a UK pension if the qualifying conditions are met. Allowing for 25% tax relief outside of these circumstances would, we believe—I hope that my hon. Friend will understand this—undermine these qualifying conditions, which apply to all pensioners.

I hope that my comments have at least explained the rationale behind the Government’s policy. I appreciate the concerns that my hon. Friend raises. I assure him that the Government have not sought to target individuals unfairly or to impact on the work undertaken by those at CERN or, indeed, by any other of our citizens who choose to live and work abroad. As he says, this is an incredibly important and increasingly prevalent aspect of the modern labour force, with increasing globalisation and a global market for the most talented individuals, certainly in the scientific and research world.

The changes we made in 2017 stopped people from transferring their pensions abroad to avoid UK tax. That was a consideration, but it was not the primary motivation. Our primary motive was to do this as part of a wider move towards consistency and fairness in pensions and taxation. The Government recognise that those in receipt of foreign pensions do face additional costs in accessing their pension. That was the original motivation behind the 90% rate that was introduced, I believe, in the 1970s. However, we have taken the view that it is not for Government to compensate these individuals for their choice to work outside the UK or to enable them to use this as a UK tax break. It is the Government’s role to encourage a fair and sustainable tax regime in the UK. The changes that we made have equalised the system, from which only overseas-based employees were previously able to benefit.

I again thank my hon. Friend for raising this issue. I also thank his constituents and others who may be paying attention to this debate for the ground-breaking work that they have done at CERN, which the Government and, I think, all Members are rightly proud of. We are proud that UK citizens have played a part in that and that they have chosen to return home to the UK for their well-earned retirement. The Government are delighted to welcome home British expatriates who have worked abroad to spend their retirement in places such as Poole. We recognise that that plays an increasingly important part in our economy.

I hope that my hon. Friend’s constituents will appreciate the Government’s rationale for making these changes over the past few years. We took a decision to treat all UK pensions consistently. Such judgments are difficult ones, and do involve winners and losers, but we appreciate the views of his constituents, and I would be happy to meet him and them in person, if it would help to further the conversation, and to listen to their specific concerns and see what, if anything, we can do.

[Sir Robert Syms]

I thank the Minister for that offer. This is a complex area, and I think that my constituents would be grateful for at least a brief meeting just to go through some of their concerns, outside the public spotlight.

[Robert Jenrick]

I thank my hon. Friend. This is a complicated area. I hope that my comments today have provided some answers to him and his constituents, but of course I would be happy to meet him and to bring along Treasury officials, who might be able to shed further light on this matter and answer their questions in greater detail. They are understandable and important questions, because they concern the financial security his constituents can enjoy in later life.

I hope that this evening’s debate has provided some answers and that the meeting that follows will provide more. We believe that the previous approach was fair. It was driven by a desire for consistency and fairness for all British pensioners, and we hope that right hon. and hon. Members can support that as a principle. Once again, I thank my hon. Friend for raising this important matter.

Question put and agreed to.

Draft Financial Services And Markets Act 2000 (Carrying On Regulated Activities By Way Of Business) (Amendment) Order 2018

Robert Jenrick Excerpts

Wednesday 7th March 2018 General Committees

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I beg to move,

That the Committee has considered the draft Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2018.

It is a real pleasure to serve under your chairmanship, Sir David. The draft order, which was drafted in consultation with the Financial Conduct Authority and the Prudential Regulation Authority, will set out the circumstances in which a business needs a deposit-taking licence to borrow via a peer-to-peer lending platform. Peer-to-peer lending platforms allow any investor, including a consumer, to lend money directly to businesses or to other consumers, but the draft order applies only to business borrowers.

Peer-to-peer lending is still a relatively new financial service: the world’s first peer-to-peer loan originated here in the UK in 2005. At the industry’s request, the Government legislated in 2014 to bring peer-to-peer lending platforms within the scope of financial services regulation. Running a peer-to-peer lending platform is a discrete activity—it is not another type of asset management service, for example—so we introduced bespoke legislation to regulate it as such.

We sought to balance consumer protection, which is extremely important to us, with allowing the sector to grow and evolve, to ensure that we lead the world in peer-to-peer lending and in creating a bespoke regime for it. This approach, which is typical of our commitment to ensuring that regulatory frameworks remain fit for purpose in the face of rapid technological change, has led us to be rated as the best place in the world to establish a FinTech business. The FCA is conducting a full and planned review of peer-to-peer lending and the industry more generally, to deepen our understanding and inform future regulation, should further steps be required.

Let me briefly set out what the draft order seeks to achieve. For a professional lender, there is a degree of responsibility involved in taking deposits from members of the public, who—perfectly understandably—may not have the same degree of financial literacy. A business that wishes to accept deposits from the public to wholly or materially finance its activities must be authorised and regulated by the FCA and the PRA. Such activity is considered as accepting deposits by way of a business, and regulatory permission for it is known colloquially as a banking licence. Requiring businesses to obtain such a licence ensures that depositors are protected from financial harm or loss.

The existing legislation, which was inherited by the industry, could be interpreted as implying that a business that borrows money via a peer-to-peer lending platform is, technically, accepting deposits from the public in the same way that a bank might. Such a business could be deemed to be accepting deposits by way of business and therefore to require a banking licence. In reality, such borrowers do not accept deposits as their core business; for the vast majority of commercial borrowers, using peer-to-peer lending is simply a new way of finding capital to finance working capital requirements, to fund investment in research and development, new equipment or premises, and to drive growth forward.

The current legislation has left some peer-to-peer lending platforms unsure whether a business borrowing via their platform requires a banking licence. The practicalities of obtaining and maintaining a banking licence just to borrow via a peer-to-peer platform are burdensome both for the borrower and for the platform. The requirement for a banking licence increases costs and ultimately risks making peer-to-peer lending unviable for most businesses as a source of finance.

The draft order will provide the clarity for peer-to-peer lending platforms and business borrowers that the industry and businesses require. We believe that it will be welcomed by all sides. It will make it clear that a peer-to-peer borrower that uses deposits solely to finance its other business activity should not need a banking licence. However, it will ensure that regulated financial institutions —those for which accepting deposits is the essence of their business—will still need a banking licence to accept funds from the public, regardless of whether they do so from a peer-to-peer lending platform or another means.

The certainty that the order provides will ensure that legislation that predates the invention of peer-to-peer lending does not place undue burdens on the sector or impede its growth. As such legislation focuses solely on business borrowers, this is a business borrower-facing piece of legislation. It does not affect the existing regulatory protections for consumers, which we agree are extremely important, as consumers increasingly turn to peer-to-peer platforms.

The Government’s approach underlines our commitment to ensure that businesses can access the finance they need to grow and expand and can enhance competition in the financial services industry, while ensuring that we in the UK have a forward-looking regulatory regime adapting to new technology and continuing to lead the world.

--- Later in debate ---

[Robert Jenrick]

I am grateful to the hon. Gentleman, who represents the Opposition, for his positive comments with respect to peer-to-peer lending. We believe it is an important development in financial services, and it is one we want to support, but we must ensure it is appropriately regulated to protect consumers and businesses of all scales, as well as to ensure that the industry has the clarity in regulations and law it deserves so that it can operate with confidence within the law.

That is the essence of the order. It will ensure that the industry can move forward with confidence, knowing that the law is clear and that those who want to use such services—smaller businesses in particular—can have clarity that they are not in breach of the law. It is a question not of deregulation or changing the law but of clarifying it so that everyone benefiting from the peer-to-peer lending industry today and in the future can understand that they are in compliance with the law.

To give a practical example of how the present situation might confuse or concern a business, a manufacturing business seeking to borrow money from a peer-to-peer lender—perhaps to purchase new equipment to help it grow and develop—might be concerned about whether the current law required it to have a banking licence. The industry has come to us proactively and said that it is important that the Government provide the greatest possible clarity for businesses that seek to raise money for perfectly legitimate purposes and are not engaged in financial services—businesses for which taking out money through a peer-to-peer lending platform would be not their sole, or even the majority of their, business function, but purely to service the future growth of their primary activity. We want to clarify the position for that kind of business in particular.

In terms of the future, I point the hon. Gentleman to the FCA’s review. I am sure that it would welcome his comments and his involvement in that review if he or the Opposition had further points to make about the future of peer-to-peer lending.

Question put and agreed to.

Future of ATMs

Robert Jenrick Excerpts

Thursday 1st March 2018 Commons Chamber

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

May I begin by wishing you, Madam Deputy Speaker, and other hon. Members a happy St David’s day? As the subject of today’s debate is cash and its availability, I wish the same to the staff of the Treasury’s Royal Mint in snowy Llantrisant today. I had the pleasure of visiting them last month for the appointment of the Royal Mint’s first ever female deputy master and chief, Anne Jessopp. Anne is the first woman to hold that post since the Mint was founded in 886 AD. It has taken just over 1,000 years, but a woman is now finally in charge at the Mint, and as my hon. Friend the Member for North Dorset (Simon Hoare) said, a woman is the chief cashier at the Bank of England.

One of Anne Jessopp’s first tasks as deputy master of the Mint was to launch the 50p piece that the Mint has created for the 100th anniversary of female suffrage. Unfortunately, although those coins are available online at www.royalmint.com and can be purchased by visiting the Royal Mint, not many of them will enter circulation. That is because there is limited demand for new coinage. Therefore, the Mint, over the course of this year, is unlikely to require new 50ps. Therein lies part of the heart of today’s debate: the use of coinage and notes is in decline, and digitisation is transforming the way we use cash and spend money, as it is every other aspect of our lives.

I am grateful to my hon. Friend for raising this important issue. The relatively few Members who were able to join us today due to the poor weather is no reflection of the importance of this issue to either the Government or Members of Parliament. First and foremost, I want to assure Members that the Government recognise the importance of widespread access to free cash, and we will do everything we can, with the industry, the regulators and LINK, to ensure that access is maintained.

I want to address three areas, which I hope will allay some of the concerns that my hon. Friend raised and speak to how important this is to the Government. The Treasury and I personally will be following this extremely closely as it develops in the months and years to come.

First, as my hon. Friend laid out well, the increasing digitisation that we are experiencing across society is having a major impact on cash. It has been important already, and I think its impact will be quite profound in years to come. That plays into a wider debate that the Treasury is interested in and in which all parts of Government have to engage, which is how we can embrace the new and ensure that the United Kingdom makes the most of new technology and does not shy away from it. We cannot stop the world and get off it, but we have to protect the vulnerable in society and ensure that the benefits of new technology work for all people in all parts of the United Kingdom, whether in great cities such as London or in rural areas such as Dorset, Nottinghamshire, Cornwall and the others represented here today.

The use of cash has fallen from 62% of all payment volumes in 2006 to 40% in 2016, the last year for which we have reliable figures, and it is predicted that, by 2026, it will make up just 21% of all our payments. As my hon. Friend rightly pointed out, however, claims that we will move any time soon to a completely cashless society are off the mark. The use of cash—both coinage and notes—will continue to decline significantly in the years ahead, but it seems unlikely that any of us will live in a country without any form of cash. That poses an important challenge to Government on how we can manage this period of transition in a way that works for everyone.

Cash remains extremely important in the day-to-day lives of UK consumers and businesses. It is still the form of payment that the UK public reach for the most, and 5% of the adult population rely either entirely or almost entirely on cash to make all their day-to-day payments. Many of them, of course, are the most vulnerable, the most financially excluded and the most elderly members of society.

To provide free access to cash, the UK has one of the most extensive free-to-use ATM networks in the world. Compared with our major international competitors, including the United States, our network is extensive and generally free, and those are important things that we want to continue. There are more ATMs in the UK than ever before, about 54,000 of which are free to use, which represents an increase of 50% in the past decade alone.

[Ged Killen]

Is not the Minister concerned that the LINK decision on the interchange fee might reverse free access to cash? The problem is that LINK is relying on the ATM operators themselves to tell it when cash machines are no longer financially viable. Is it not the case that many machines may already have closed after the event?

[Robert Jenrick]

The hon. Gentleman raises an important point, which I hope I will be able to answer over the course of my speech. One of the motivations for LINK and the industry’s actions is to reduce modestly the number of ATMs in those areas with the greatest density, including cities such as London, but their pledge to the Government and to consumers, which I will go on to talk about, is that that will not be to the detriment of those in rural areas, market towns or harder-to-serve areas, which are not exclusively rural but could be areas of greater deprivation, even in cities such as London. We have had a fairly strong promise from LINK and from the regulator that there will be no detriment to rural areas. I will come on in a moment to how that will be enforced in practice.

We all recognise that there is a decline in the use of cash, which is making it harder to maintain our current level of free access to cash. That is the challenge that the changes hope to address. I appreciate that we have to view the issue through the lens of bank branch closures, which affects my constituents and those of most Members across the House. The Government, the financial services industry and the regulator therefore have to act to ensure that the needs of the consumer continue to be met. My comments, on behalf of the Government, represent consumers, not the regulator or LINK. My hon. Friend the Member for North Dorset is absolutely right that we in this House represent the consumers, and their interests must be our primary concern.

Secondly, I wish to address exactly how we do that, which brings me to the particular role played to date by the Payment Systems Regulator and the role it will play in the future, if it lives up to the Government’s expectations. In November, LINK—the main payment scheme behind the UK’s ATM network—launched a consultation on reducing interchange fees by 20%. As I have said, that was designed to reduce the duplication of cash machines in city centres while protecting the more isolated machines. That is the organisation’s stated objective, to which we will hold it to account. At the time, the Government and many Members of this House were clear that any changes must not have a harmful impact on consumers. If machines are lost in cities, the impact should be generally imperceptible, and if they are lost in rural and harder-to-serve areas, they should be replaced, wherever possible.

[Simon Hoare]

I agree with my hon. Friend about the overprovision of ATMs in a city centre environment, but I just want to make sure that he is alert to the fact that ATM providers—the Cardtronics of this world—often use the moneys they secure from such machines to subsidise rural provision. In effect, they are cross-accounting. The opportunity to use that cross-subsidy spare fund will, in effect, disappear as a result of a diminution of ATMs in large cities. That is one of the big problems.

[Robert Jenrick]

My hon. Friend raises an important point to which the regulator must pay close attention, but it estimates that the impact of the changes will be modest, even in city centres with a heavy density of ATMs. The main operators of card machines—the companies he mentioned earlier—are generally financially successful. This industry has more than £1 billion of revenue a year, and its market caps are between £500 million and £1.5 billion. Generally speaking, these sizable businesses are in sound financial health. There is no reason to believe that the changes will alter that, although the regulator must bear that factor in mind.

The PSR, which the Government established to deal with such difficult issues, has taken the lead in examining the area. It has engaged with LINK and held a consultation. My hon. Friend raised concerns about the scope of that consultation, but the PSR believes that it has engaged with MPs, although perhaps not as much as it could have done. It has spoken to a number of different parties across the country—indeed, future consultations could learn lessons from the number of individuals and parties to whom it chose to reach out.

The PSR has come back with three requirements that LINK’s proposals must fulfil. First, there is a commitment by LINK to do “whatever it takes”—we must remember those words—to protect the broad geographical spread of free-to-use ATMs. Secondly, any cuts in the interchange must be incremental, and at just 5% in the first year. There will be a review after one year, so in July next year there will be a review before the next cut of 5% could, or would, be implemented. I have received assurances from LINK and the PSR that no further cuts will take place unless they are satisfied that there has been no significant material detriment to the rural and harder-to-serve areas. Thirdly, there will be a greater than ever focus on financial inclusion, and LINK will continue filling gaps in the network and protecting those ATMs in areas that are harder to serve.

LINK will maintain all free-to-use ATMs that are a kilometre or more from the next or nearest free-to-use ATM, including where a community loses ATM access because of a branch closure. LINK will increase the subsidy for ATMs in areas with poor cash access to keep free-to-use machines going. It will conduct an annual review not just in the first year but, if the changes continue, every year thereafter. That review will consider the impact of the interchange fee reduction on the provision of free-to-use ATMs as phased in over the four-year period, and take action as and when required.

LINK has promised to place a page on its website from 1 July that will have sufficient specificity for every Member of the House to look at their constituency. It will show every free ATM across the country, so MPs will be able to view availability in their part of the world. The website will highlight any areas where free ATM availability is in danger of being lost and state what action is being taken to tackle that. For example, my hon. Friend will be able to look up the ATM that we have heard about in his constituency and see whether it is in danger and what action is being taken to address that. That is important to ensure that MPs and people across the country—including those local councillors who were mentioned—can continue to monitor and ensure that LINK lives up to its promises.

Finally, the way that the PSR will police LINK’s commitments can, and should, be stringent. We set the PSR up in 2015 with a specific statutory objective to ensure that the interests of the users of payment systems—not those of the banks—are promoted, with robust powers to enforce that. We expect the PSR to step in and act if needed. I have spoken to the PSR and to LINK, and the PSR understands the importance that the Government place on free access to cash, and the strength of feeling in Parliament and the country. Both organisations have made an explicit commitment to do whatever it takes to maintain the network and provide an additional subsidy per ATM at whatever level is required, to ensure that any machine that is in danger of being lost is replaced by another within a reasonable distance.

In conclusion, I again thank my hon. Friend the Member for North Dorset for raising this important issue that affects my constituents and people across the country. I have been assured by LINK and the PSR that the motivation for these changes is to ensure that the proliferation of ATMs in urban areas is sustainable, and that we continue to have a free-to-use ATM network—an important issue for the whole country and one that sets it apart from many others—but not at the cost of harder-to-serve areas: the rural areas and the market towns. The promise made to me by LINK is that it will do whatever it takes. The pledge has been made to me by the regulator that it will robustly hold LINK to account for that. The Treasury and I will be watching both very hard to ensure that those pledges are fulfilled on behalf of the people of the country.

Question put and agreed to.

Oral Answers to Questions

Robert Jenrick Excerpts

Tuesday 27th February 2018 Commons Chamber

[Damien Moore (Southport) (Con)]

4. What recent assessment the Government have made of the effect of the national productivity investment fund on road and rail infrastructure in the north-west.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

This Government have put raising our national productivity at the heart of our mission. From the national productivity investment fund, we have already announced over £50 million of investment in road and rail in the north-west, and this is in addition to the transforming cities allocations to Manchester of £243 million and to Liverpool of £135 million.

[Damien Moore]

Does my hon. Friend agree that the £31 billion national productivity investment fund, targeted at transport, digital communications, research and development and housing, will boost the infrastructure of the UK economy?

[Robert Jenrick]

The latest statistics show that we have had the best run of productivity growth since before the financial crisis, but we are certainly not complacent. The national productivity investment fund is improving passenger journeys, our roads and our broadband connections and delivering more homes, all of which are key to raising the wages and living standards of people in Southport and across the country.

[Derek Twigg (Halton) (Lab)]

The problem is that the national productivity investment fund is not doing anything to stop the disrepair on our roads and motorways. The Government are simply not putting in enough money for local councils and the national agency to make sure that repairs on motorways and local roads are brought up to standard. We now have a greater crisis than we have seen for some time.

[Robert Jenrick]

I am afraid that I do not agree with the hon. Gentleman’s analysis. The Government have put a record amount of investment into our roads and rail. As the Chancellor announced in the autumn, there is further money for transport projects in the north. There is £13 billion in total to improve transport across the north of England.

[Lee Rowley (North East Derbyshire) (Con)]

rose—

[Bill Esterson (Sefton Central) (Lab)]

This Government have done nothing to deliver local rail infrastructure in the north-west, which is vital for jobs and the economy. When are they going to invest in decent local rail services, including those used by my constituents from Southport to Manchester? If the Government will not do it, they should stand aside and let us get on with the job.

[Robert Jenrick]

The Government have been investing more in railways across the country than any Government since Victorian times, including in the north of England. Across the country, the Government have invested £0.25 trillion in infrastructure projects since 2010, 4,500 of which have already been completed.

[Julian Sturdy (York Outer) (Con)]

5. What plans the Government have to invest in major infrastructure during the 2017 Parliament.

--- Later in debate ---

[Mike Amesbury (Weaver Vale) (Lab)]

15. What fiscal steps he is taking to support regional infrastructure development.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

As the Institute for Fiscal Studies has confirmed, under our plan, public investment will reach levels not sustained since the late 1970s by the end of this Parliament. We want to see that investment across the United Kingdom. We are delivering £13 billion of transport investment in the north and have launched a £1.7 billion transport fund to transform our great cities.

[Mike Amesbury]

Devolution in the Labour-controlled Liverpool city region and Greater Manchester is beginning to unlock opportunities for investment in infrastructure, research and development, and innovation in the north-west, allowing facilities such as the Daresbury campus in my constituency to develop and prosper. Does the Minister agree that if we are to be able to realise the full potential of our regions, devolution needs to extend to the many of my constituents and not the few?

[Robert Jenrick]

I am delighted to hear the positive story that the hon. Gentleman has given to the devolution that we have created as a Government. In the past week I have met the Mayors of Liverpool and Greater Manchester. We are committed to working with anyone who shares our commitment to the economic growth and prosperity of the north of England.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

16. What recent assessment he has made of the effect of Government investment on the Scottish economy.

--- Later in debate ---

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

I am very much in favour of gift aid, but some large charities say that they receive no direct support from Government but do receive gift aid and the Exchequer will not publish those figures. Will the Chancellor reconsider this?

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Revenue does not disclose the sums that individual charities receive from gift aid due to its obligations to respect taxpayer confidentiality under the 2005 legislation. Of course, some large charities do so voluntarily. Cancer Research is one example, and receives £31 million in this way. I am sympathetic to my right hon. Friend’s argument and will take the matter forward.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

Ryanair has announced the slashing of more than 20 Glasgow airport routes, a cut of more than 1 million passengers and the loss of up to 300 jobs. The high level of APD and the delay in introducing the air departure tax—caused by this Government’s not notifying the European Commission regarding the ongoing exemption for the highlands and islands—have been cited as a reason. Another is the Brexit uncertainty in the aviation sector. With more routes and jobs likely to go, what are the Chancellor and his colleagues doing to support the aviation sector during Brexit negotiations?

Draft Soft Drinks Industry Levy (Enforcement) regulations 2018

Robert Jenrick Excerpts

Wednesday 7th February 2018 General Committees

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I beg to move,

That the Committee has considered the draft Soft Drinks Industry Levy (Enforcement) Regulations 2018.

It is a pleasure to serve under your chairmanship, Sir Edward. The draft regulations will help to complete the legislative framework for the soft drinks industry levy, which is well known to right hon. and hon. Members and will take effect from 6 April this year, as they may be aware. The levy is an important part of the Government’s childhood obesity plan, and the aim is for it to be a significant element in reducing the problem over the next 10 years. As well as encouraging children and families to make healthier dietary choices, the plan will help children to enjoy an extra hour of physical activity every day.

Children in the UK are consuming far too much sugar—three times the recommended level. The soft drinks industry produces our favourite soft drinks, which are a major source of sugar for children and teenagers, as well as adults. The levy, which has been introduced to encourage soft drinks manufacturers to reduce their sugar content, is already working, even before it comes into force in April: we estimate that approximately half the soft drinks that were above the sugar threshold when the levy was announced in 2016 have been reformulated to reduce their sugar content. We have seen the reformulation from major brands and household names that we are all aware of—Sprite, Fanta and Tango, to name just a few—and other producers have announced plans to reduce the size of larger packs.

All of this is good news for our nation’s children and adults, our health, our teeth, our waistlines and the cost to the national health service. The reformulations have meant that our original revenue forecasts have been lowered, but as we set out clearly when the policy was mooted, our objective was never to raise money from the taxpayers as an end in itself; it was always to improve public health. The revenue will be less than first suggested, but regardless of how much is raised, the Government remain committed to funding the Department for Education with the £1 billion that we originally expected, and providing the devolved Administrations with the full amount that we promised at the time.

Every penny of England’s share of the spending raised by the levy will go towards improving children’s health, including by doubling the primary sports premium to improve the quality of PE in schools. We will also provide extra funding for school breakfast clubs, which can help the most disadvantaged children in society to have a healthier start to the day. Finally, we will provide £100 million in 2018-19 for the healthy pupils capital fund, which helps schools to upgrade their sports grounds, playing fields and changing rooms.

To continue to deliver our objectives, it is vital that we have the enforcement measures we need to ensure that the levy works, and that Her Majesty’s Revenue and Customs has effective compliance powers to prevent evasion, if that proves necessary further down the line. The primary legislation behind the levy is the Finance Act 2017, section 54 of which enables the draft regulations to provide HMRC with the same powers that it uses to tackle every excise duty evasion, including alcohol duty. That makes sense because the supply chains for alcohol and soft drinks are comparable and often involve the same people and similar risks. Enforcement is expected to come under the control of the very experienced compliance teams at HMRC.

The draft regulations specify that, of the enforcement powers in the Customs and Excise Management Act 1979, only those powers that are really useful and relevant will be available for enforcing the levy. That includes powers of entry, search of premises and seizure of drinks, all of which are essential for tackling excise duty evasion and ensuring that legitimate suppliers are not adversely affected by those who engage in criminality. As with the enforcement of other excise duties, the powers will be used only where there are reasonable grounds to suspect non-compliance, and all use will be subject to strict governance procedures. Were HMRC not to have these powers, the risk of fraud would increase significantly and the legitimate businesses that manufacture soft drinks would not be able to compete on a level playing field.

In summary, the Government believe that the soft drinks industry levy is a vital part of our plan to tackle childhood obesity. It is only one of a number of measures being taken by the Government today, and we would like to take more in future. It has had a proven impact. We are seeing that impact in all household brands of soft drinks on the shelves; they will contain less sugar and provide a healthier drink for our children and adults. The regulations provide HMRC with enforcement powers that are proportionate and have been well scrutinised through extensive public consultation, so I hope colleagues will join me in supporting the regulations, which I commend to the Committee.

--- Later in debate ---

[Robert Jenrick]

I am grateful to the hon. Gentleman for his support for the levy, which will play an important part in tackling childhood obesity. As I was at pains to stress in my opening speech, the levy is only one element of a much wider Government strategy. The Opposition and other right hon. and hon. Members will have seen the childhood obesity plan that was published. Nobody pretends that the soft drinks industry levy contains all the elements of that plan, but it is a significant element and, again, I am grateful to the hon. Gentleman for his support.

The levy is working, and we have seen that in the large number of suppliers of soft drinks that have already reformulated their products. As a result, the tax will raise less revenue than was previously expected. It was never designed as a tax-raiser; it was always designed to stimulate improvements in public health. In the autumn Budget of 2017, we laid out our expectation that the levy would raise around £275 million, yet the Treasury remains 100% committed to the original promise of over £1 billion of extra money for the Department for Education.

[Clive Lewis]

While we welcome the £1 billion—the extra funding—to plug those gaps, if the Government then cut 3.9% of spending on public health and, it is predicted, millions by 2020, does the Minister not concede that they are giving with one hand and taking with the other?

[Robert Jenrick]

I dispute the hon. Gentleman’s analysis of our funding of the NHS, which has risen in every year of this Parliament. In the autumn Budget of 2017, the Chancellor committed to providing more money for both the NHS and adult social care.

The levy is an example of where the Government are taking action. We are using the tax code to change behaviours for the public benefit, and we are committed to significant increases in spending for school sports, breakfast clubs and all the other important things that will benefit from the funds coming from the levy. Every single penny raised by the levy will go to support school sports and the public health initiatives that I mentioned, plus the additional revenue that the Treasury committed to and is in no way backing down on, despite the success of the levy.

[Clive Lewis]

rose—

[Robert Jenrick]

If the hon. Gentleman does not mind, I will press ahead on this occasion; I have given way to him in the past.

As for the capacity of HMRC, this is a task that HMRC is very used to and has expertise in. It uses that capacity for all forms of alcohol excise duties, such as those that apply to the spirits industry and so on. There is no reason to question whether HMRC can do this work. Indeed, the powers that we are considering today are those that HMRC has requested. The levy has been fully subject to a public consultation with the industry. HMRC’s voice has been heard in that consultation and we believe that HMRC will be effective in enforcing this levy and in ensuring that there is no criminality, or only minimal criminality, involved with it.

As for the question of whether or not we have reviewed, or will review, the impact of the levy, we have committed to such a review—in 2020, I think—so that will be the point at which we can clearly see the impact of the levy on both public health and the industry. With that, Sir Edward, I commend the regulations to the House.

Stamp Duty Reform

Robert Jenrick Excerpts

Tuesday 23rd January 2018 Westminster Hall

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

It is a pleasure to speak under your chairmanship, Mr Streeter—I almost said Mr Speaker there; perhaps that is a Freudian slip. I am grateful to my hon. Friend the Member for Carlisle (John Stevenson) for organising this debate and for bringing to it his customary thoughtful style and experience as a solicitor. I was also a solicitor before coming to this House, although not a property one. I am aware of some of the experiences that he has had and in my prior life, before being appointed as a Minister, I was very interested in the property market and some of the questions that he has raised today. I will try to respond to as many of those as possible, but let me first raise some of the background to stamp duty and the Government’s recent reforms, because it is fair to say that there has been a great deal of activity in the area over the last few years.

Stamp duty as we know it was introduced in 2003. It replaced the former stamp duty regime, which my hon. Friend will remember from his time as a solicitor and required the physical stamping of documents. It raises over £11 billion a year, which makes an important contribution to our public services, as he said—we should remember that in the context of this debate—including £8.6 billion a year from residential property transactions. Although we continue to seek ways to reform stamp duty, we have to bear in mind its importance to the Treasury and our public services.

Over the last few years, stamp duty has played a significant part in a number of different budgets, and the Government’s objectives when considering it and its impact on residential property purchases have been above all to support first-time buyers, and to sustain the tax base. We are trying to keep the tax as simple as possible and to reduce it where possible. We are aware of the distortions that the tax can inevitably lead to, which deters people from moving home, from downsizing and from upscaling, and the effect that has on quality of life. Buying a home and changing where a person lives is obviously one of the most important decisions that they make, and we want to make sure that, where possible, the tax system does not interfere in that. We see it as an important lever in the housing market, but not the only lever. The housing market requires supply-side reforms as well as tax changes, and any reform of stamp duty can only be one potentially small element in our housing policies.

With those priorities in mind, the Government have taken a succession of significant actions to reform how stamp duty works. In 2010, the stepped structure of stamp duty through the most widely applicable price bracket created distortions in the housing market, which everyone was familiar with, particularly people such as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) who have worked as estate agents. We wanted to iron out some of those problems for both sellers and buyers. The stepped increases in rates meant, for example, that those moving up the housing ladder were met with large increases in tax when properties fell into higher brackets.

In 2014, we took action to reform stamp duty on residential properties at the autumn statement, which many hon. Members will remember. We changed the stepped increases to a variable rate that increased with the price of the property purchased. That was an important and successful reform and led to about 98% of people liable for stamp duty finding their bills reduced. There were new, higher rates for properties of the highest value, which increased the tax paid by so-called prime and super-prime properties particularly focused on areas of central London, but the vast majority of homebuyers in our constituencies across the country were better off as a result of the changes.

Since becoming a Minister, I have asked to see the figures on transactions in the higher price brackets. There has been quite a significant amount of press coverage of that. At present, the Treasury does not believe that there has been a material change in the number of transactions at the highest price brackets, but we will continue to keep that under review, bearing in mind the public interest.

In April 2016, we introduced higher rates of stamp duty on additional properties, which was designed to tip the scales in favour of first-time buyers and away from those who want to purchase second homes or invest in buy-to-let. Of course, it is perfectly acceptable for people to want to do that. We understand that and do not want to make it impossible for people to enjoy a second home or to invest in buy-to-let property for their pension and their future or for their children and grandchildren, but we did believe that it was important to make changes to help others to get on the property ladder.

Since those changes were introduced, more than 400,000 people have bought their first home and first-time buyers make up an increasing proportion of those in the mortgaged property market. However, it remains very challenging for young people to get on the property ladder—we all acknowledge that—and therefore in 2017 we made the largest change so far, which was to remove stamp duty for first-time buyers.

At the autumn Budget, we permanently abolished stamp duty for first-time buyers who were purchasing a property for £300,000 or less. First-time buyers purchasing a house for between £300,000 and £500,000 will save £5,000 and, to ensure that the relief is targeted at those who need it the most, purchases above £500,000 will not benefit. We appreciate that in parts of the country properties are of such a high value that the benefit is more limited, but even in London the average amount of stamp duty paid by first-time buyers has been halved, so the change is still significant and an improvement for anyone trying to get into the property market for the first time.

To turn specifically to the points made by my hon. Friend the Member for Carlisle, his suggestion about transferring stamp duty from the buyer to the seller was thoughtful and one that, he will not be surprised to hear, the Treasury has given thought to. We have done considerable research into it. It would be a significant step and therefore one that we should take only if the benefits are clear. The legal liability for stamp duty rests with the purchaser, but evidence suggests that the cost of stamp duty is reflected in the value of the property. That is of particular concern with respect to my hon. Friend’s suggestion, because it means that switching the formal liability to the seller would be likely to have a limited effect on the overall cost of purchasing a house. My hon. Friend’s argument would have been stronger before we changed stamp duty for first-time buyers. Now the vast majority—80%—of first-time buyers have no stamp duty and 95% benefit from our changes. Before those changes, of course his proposal would have made a significant difference.

Another point, made by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle), with respect to those downsizing, would be of concern to us, because there might be a reason for people not to downsize when we want those who are a bit older with larger homes to consider moving into smaller homes—if they wish to, of course—freeing up properties for the next generation. We will give the suggestion thought, and I am happy to meet anyone about it, but it is not something that we are considering at present.

The other suggestion made by my hon. Friend the Member for Carlisle, on the stamp duty land tax form, was interesting. I would like to take it up with him and hear more. I am happy to meet him with my officials to take it forward. I think Her Majesty’s Revenue and Customs would be interested in considering the idea.

I have only a minute or so remaining, so I will conclude. The Treasury is extremely committed to improving the housing market. Members on all sides of the House appreciate the fact that our housing market is broken and needs fundamental reform. We see tax as an element of that, and I hope that over the past several years right hon. and hon. Members have seen a number of significant interventions to make that better. One argument is that we now need to move into a period of stability with respect to stamp duty, so that those selling and buying homes and those operating in the market have the confidence to make choices in the future. We will, however, consider future options, and we will do everything we can with the Ministry of Housing, Communities and Local Government to ensure that we continue to increase the supply of homes throughout the country, particularly focused on first-time buyers.

Question put and agreed to.

Oral Answers to Questions

Robert Jenrick Excerpts

Tuesday 16th January 2018 Commons Chamber

[Sir Hugo Swire (East Devon) (Con)]

3. What recent discussions he has had with the airline industry on air passenger duty.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

Her Majesty’s Treasury regularly engages with the airline industry on air passenger duty. At the autumn Budget, we froze 2019-20 APD rates at 2018-19 levels for all short-haul passengers and for long-haul economy passengers. That provided a freeze for 95% of passengers.

[Sir Hugo Swire]

May I congratulate my hon. Friend on his appointment? He has done extremely well.

Airlines such as Flybe, which is based at Exeter airport in my constituency, undertake a disproportionate number of domestic flights. As my hon. Friend will be aware, domestic flights, unlike international ones, are currently hit twice by APD—at both take-off and landing. Treasury officials, of course, will tell a new Minister that any change is impossible and hide behind EU rules, but as we exit the EU, will my hon. Friend look at addressing that anomaly?

[Robert Jenrick]

I am grateful to my right hon. Friend for his kind remarks. I pay tribute to my predecessor, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who was well regarded across the House.

As my right hon. Friend says, the Government are unable to exempt the return leg of a domestic flight. Of course, as we leave the European Union that could change, and the Treasury will keep the issue under consideration. We certainly recognise the economic significance of regional airports such as my right hon. Friend’s in Exeter. For that reason, we have kept short-haul rates frozen since 2012. In 2015, of course, we took the significant step of exempting children.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Government’s own figures show that Newcastle airport will be most affected by any cuts to air passenger duty or air departure tax in Scotland. The continued uncertainty about this issue is also incredibly damaging. From his newly elevated position, will the Minister tell us what progress has been made on the issue? Is he in a position to confirm how English regional airports will be protected from the effects of any cuts?

[Robert Jenrick]

The hon. Lady is right to raise this issue, as Newcastle airport and others are very important to the economy of the north-east. As she heard during my response to the previous question, EU rules prevent us from changing the rules regarding the return leg of a domestic flight. We will keep the matter under consideration. We have, of course, taken other important steps, such as keeping the rates frozen and exempting children. It is worth saying that air passenger duty raises more than £3 billion a year, so it makes an important contribution to public services.

[Sammy Wilson (East Antrim) (DUP)]

There would be substantial benefits from reducing or removing air passenger duty, including GDP growth, job creation, and an impact on trade, foreign direct investment and tourism. The duty particularly distorts trade between airports in Northern Ireland and the Irish Republic. There was a commitment in the Budget to have a review of air passenger duty. Will the Minister give us an update on where that review is?

[Robert Jenrick]

I am grateful to my hon. Friend for that question. As he knows, in the autumn statement we committed to a review of not just air passenger duty, but the impact of VAT on tourism in Northern Ireland. That review is under way and will report back in time for this year’s autumn Budget.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

4. If he will bring forward legislative proposals in respect of the imposition of inheritance tax on direct personal donations to campaign groups involved in referendums.

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[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

8. What assessment he has made of the effect of autumn Budget 2017 on public spending in Wales.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

Decisions announced by the Chancellor in the autumn Budget resulted in an increase of £1.2 billion to the Welsh Government’s budget. For the first time, this included more than £65 million thanks to the new Barnett boost agreed with the Welsh Government’s fiscal framework. This ensures that the Welsh Government’s block grant will increase in real terms over the spending review period.

[Jonathan Edwards]

The headline-grabbing announcement in the Budget was the alleged £1.2 billion uplift to the Welsh public finances, which the Minister has just repeated in his answer. It was an example of financial trickery best suited to the Foreign Secretary’s big red buses. Is it not the case that more than half that money will be in the form of repayable loans—in other words, financial transactions?

[Robert Jenrick]

I do not agree with the hon. Gentleman’s analysis or with his slightly cavalier attitude to £650 million of taxpayers’ money. This money is at the disposal of the Welsh Government and can be used for important things such as helping to support businesses and helping people to get on to the property ladder through Help to Buy.

[Michael Fabricant (Lichfield) (Con)]

Given that the tolls on the Severn crossing went down last week for the first time ever, there is going to be greater demand for use of the M4. However, since 2012 the Labour Welsh Government have done nothing about using the public money available to them to extend the M4. Is it not the case that public money should be spent on that, and that it has been made available to Wales from this Government?

[Robert Jenrick]

My hon. Friend makes a good point. As I said in my answer to the previous question, we have increased the budget for the Welsh Government. How they choose to spend that money, and how wisely they do that, is another question.

[Mr Bob Seely (Isle of Wight) (Con)]

9. What progress is being made on creating jobs and reducing unemployment.

Finance (No. 2) Bill

Robert Jenrick Excerpts

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

[Robert Jenrick (Newark) (Con)]

In 2010, tax receipts from the financial services sector amounted to about £53 billion; today they amount to £71 billion. We are making the banks and the wider financial services sector pay their fair share, but we do not want a race to the bottom. We want the sector to be competitive, because tens of thousands of well-paid, highly skilled jobs throughout the country—not just in London but in cities like Nottingham, near my constituency—depend on it.

[Mel Stride]

My hon. Friend is entirely right. The additional tax raised from the banks amounts to £9 billion between 2010 and the present time, and a further £25 billion is projected over the current forecast period. Far from taxing the banks less over time—as, no doubt, the Opposition will shortly have us believe we have done—we are securing more tax revenues than we did in the past.

--- Later in debate ---

[Robert Jenrick]

Will the Minister re-emphasise the point he has just made: that the practical effect for our constituents of the move he is making today will make it much more attractive for important British international banks such as HSBC and Standard Chartered, who have a choice of locations in which to be registered—HSBC recently considered whether to move to Hong Kong or even mainland China—to remain in the City of London?

[Mel Stride]

As is so often the case, my hon. Friend has hit an important nail on the head: in terms of improving our competitiveness, it is clearly deeply unattractive to have a situation where UK-domiciled banks are being taxed on their foreign operations whereas foreign banks are not being taxed by us on their foreign operations, but are only being taxed on their operations in the UK. He is right that the future of HSBC, Standard Chartered, Barclays and other banks, who make a huge contribution to our tax-take and our economy, are much more secure if they are not being disadvantaged by being taxed on overseas operations unlike their foreign counterparts. As part of these changes, the schedule also provides for a reduction in the amount on which the levy is chargeable for certain investments a UK bank makes in an overseas subsidiary.

I shall now briefly turn to the amendments tabled by Opposition Members. For the reasons I have described, we believe that a combination of taxing profits and balance-sheets is the most effective and stable basis for raising revenue from the banking sector. The bank payroll tax was intended as a one-off tax; even the last Labour Chancellor pointed out that it could not be repeated without significant tax avoidance. I can assure the House that information about the bank levy will continue to be published as part of the normal Budget cycle. Official statistics are published on the pay-as-you-earn income tax and national insurance contributions, bank levy, bank surcharge, and corporation tax receipts from the banking sector as a whole. The Government have published a detailed tax information and impact note on the proposed changes introduced by part 1 of the schedule. We have also published information about the overall Exchequer impact of the 2015 package of measures for banks, and these figures have been certified by the Office for Budget Responsibility.

Finally, new clause 2 proposes that HM Revenue and Customs should publish a register of tax paid by individual banks under the levy. Taxpayer confidentiality is an essential principle for trust in the tax system, and HMRC does not publish details of the amount of tax paid by any individual business. While this Government continue to consider measures to support transparency over businesses’ tax affairs, we must balance that with maintaining taxpayer confidentiality in order to sustain public confidence in our tax system.

--- Later in debate ---

[Peter Dowd]

I thank my hon. Friend for his advice, which I will take.

In 2017, we are still feeling the effects and economic consequences of the actions of the banks. Every day we are told by the Government that there is no money to invest and that austerity must continue, yet the Government have gone out of their way to undermine any remuneration from the banks that caused this sorry state of affairs in the first place.

Once again, the Opposition’s ability to amend this Bill is hamstrung and limited by the Government’s continued use of arcane and outdated parliamentary procedure. In football parlance, not only have they moved the goalposts but they have put boards across the goalmouths so that the Opposition cannot score any goals—a recreant act, if ever there was one, from a pusillanimous Government frightened of their own shadow.

By tabling new clause 1, we seek, first, to require the Government to carry out a review of the bank levy, including its effectiveness in relation to its stated aims—Sir Roger, you will be glad that we are back on the bank levy. Secondly, we seek to establish the extent of the revenue effects of the cuts made in 2015. Thirdly, we seek to calculate how much would have been raised if the Government had stuck with Labour’s bankers bonus tax. Let us have the comparisons.

Such a report would shine a light on the Government’s malpractice in cutting frontline services while offering tax giveaways to the banks. It would require the Minister to reassure the House directly that certain banking practices are not simply in hibernation. “Once bitten, twice shy” is a fair assessment of most people’s views, including many in the sector itself. A by-product of the process would be to show that far more would have been raised under Labour’s bankroll tax.

We are also calling for a separate review of the changes introduced by clause 33 and schedule 9 and their overall impact on revenue and risky behaviour. That review would make the Treasury explain the rationale for further limiting the scope of the bank levy and forgoing billions of pounds while, at the same time, pushing for more cuts to departmental budgets and frontline services.

It is, of course, unsurprising and indicative of the Government that they have failed to keep track of the banks that regularly pay the levy and a full list of what they have paid. That is why, in the name of transparency—a very novel concept for the Government—we would ensure fiscal accountability. The Opposition have tabled an amendment that seeks to create a public register for the bank levy.

The Minister talks about commercial sensitivity. Well, that old chestnut is brought out time after time. When we supported the banks with billions upon billions of pounds, nobody talked about commercial sensitivity then. In this particular case, I am sure many in the banking sector would be happy to have such transparency. It is shocking that the Government consider this tax cut for the wealthy few to be a good use of nearly £5 billion.

Alongside demanding that the Government change course, we must also understand the impact of the lower levy rate introduced in 2011, as well as the revenue effects of lowering the levy in 2015. That, among other things, is what our amendment seeks to tease out.

[Robert Jenrick]

I am confused by the hon. Gentleman’s position on the bank levy. He says that he voted against it in 2011 because it was set at too low a threshold, but between 2011 and 2015 the then Chancellor raised the bank levy seven times and, on each occasion, the Labour party voted against it. Why did it do that?

[Peter Dowd]

I suggest that the hon. Gentleman goes back and reads Hansard when it is printed to see exactly what I said.

Once we can see the true costs of the Government’s policies, we can grasp the extent of the choices they have been making and how they have favoured a small, wealthy group over the many citizens of this country time and again. Let us look at the example of children’s services. Only a week before the Budget, the chief executive of Action for Children, Sir Tony Hawkhead, described the “devastating cost” of cuts to children’s services, which he said have been left on a “dangerous and unstable” footing. These prevention and protection services are vital to provide proper care for our nation’s children, and the banking levy could help with that, yet we have seen deep cuts of 55% of funding for local government and a gap of £2 billion in funding by 2020.

There is widespread talk and reports of local councils having to seek permission from the Government to raise council tax to cover the costs, in effect, of cuts to the bank levy—this money may have been available for children. So cuts to bankers and council tax up seems to be what we are being told today. As these services have been decimated over the past seven years, we have seen a doubling of serious child protection cases and twice the number of children put into care protection plans. Last year, 70,000 children were placed into care. The support for foster care, adoption and Sure Start children’s centres has all been reduced. Youth centres are closing and parenting classes are being axed. Short breaks for disabled children, provided by local councils to give their parents a little respite from full-time care, are being taken away and are under strain.

Taken together, those cuts mean that some of the most vulnerable children in our country are paying the price for seven years of failing economic strategy. When are the Government going to change their strategy? It is still shocking to see the Government put the needs of others ahead of those of our youngest citizens, who are picking up the bill for austerity

Tax Avoidance and Evasion

Robert Jenrick Excerpts

Tuesday 14th November 2017 Commons Chamber

[Dame Margaret Hodge]

It is also not in the interests of the many developing countries that lose more tax through tax avoidance than we do in proportion to their budgets.

[Robert Jenrick (Newark) (Con)]

The right hon. Lady’s central contention is that those territories should publish open registers of beneficial ownership. First, does she acknowledge that the United Kingdom is now one of the only countries in the world to do so, as a result of action by this Government? That was a huge achievement on the UK’s part. Secondly, in an international context, virtually no other major developed country in the world has done it. The state of Delaware, in which 90% of US corporations are registered—

[Mr Speaker]

Order! When I say “order”, the hon. Gentleman must resume his seat. I do not wish to be unkind to him. He is always very fluent, but he usually takes too long, and that was not just too long; it was far too long.

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[Mr Mitchell]

My hon. Friend is absolutely right. The first of my two points was about trying to tackle head-on the counter-arguments that are sometimes made by some territories.

On tackling and having zero tolerance towards corruption, in 2010, when I had responsibility for international development, we targeted funding specifically at the City of London police, which has expertise on pursuing and recovering stolen funds. We should do as much of that as possible.

[Robert Jenrick]

I agree with a great deal of what my right hon. Friend says. Given that the majority of the economy of the British Virgin Islands, in particular, is in financial services and the islands have recently been completely devastated by hurricanes, is now the right time to be imposing on the islanders rather than working with them?

[Mr Mitchell]

My hon. Friend makes a fair point in view of the humanitarian crisis that is afflicting the BVI, which are of course one of the most transparent of these havens. What I hope will be a temporary crisis in the BVI following the hurricane damage should not in any way detract from my argument that, in a defined, perhaps short, period of time, these open registers are essential.

Paradise Papers

Robert Jenrick Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

The Finance Bill, which has just gone through the House, contains important provisions to clamp down on those who enable tax avoidance—the category of individual and company to which the hon. Lady refers—and those are some pretty stiff penalties.

[Robert Jenrick (Newark) (Con)]

Will my right hon. Friend confirm my understanding that the profits of the Duchy of Lancaster are used exclusively for official purposes, that its investment board is at arm’s length from the Government and that if anyone wants to question who was overseeing the investment board at the time of any suspicious transactions, they should go and see the Labour Ministers at the time?

[Mel Stride]

The accounts of the Duchy of Lancaster are readily available, transparent and audited in the normal fashion, and there has been no suggestion to date, as far as I am aware and certainly not in the television programme last night, of any mischief related to any aspect of its dealings.