Finance (No. 3) Bill

Sarah Wollaston Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Chuka Umunna]

I have to say that when I gave way to the hon. Gentleman I did not imagine I would actually end up agreeing with what he said. He pre-empts my final point, which is that I understand the general worry about the accuracy of official forecasts. The bottom line is that we are never going to get forecasts that are 100% accurate, but we have to work with a certain number of assumptions to make policy, as I am sure he will discover if he has the privilege of serving in government.

On the point he makes about the OBR, I was quite careful in how I drafted the amendment. Its powers and capacity from a resource point of view are circumscribed, but there is no reason why we should not change the statutory remit of the OBR. At the very least, for those who worry about the accuracy of forecasts, we could see whether the OBR would be prepared to do an evaluation on the methodology and the techniques it uses to produce the forecasts by the Treasury.

[Dr Sarah Wollaston (Totnes) (Con)]

Does the hon. Gentleman agree that this issue relates not just to future forecasting? The Health and Social Care Committee has been hearing that hundreds of millions of pounds are already being spent by pharmaceutical companies on no-deal contingency planning—money that would be far better invested in our NHS.

[Chuka Umunna]

I could not agree more with the hon. Lady.

I will finish by saying this: the reason we tabled the amendment, and why I think so many colleagues on all sides of the House supported it, is because ultimately it is an assertion of parliamentary sovereignty. If the House were denied this really important information in order to come to a considered informed view, it would make a mockery of the argument that says the reason for withdrawing from the European Union is to assert parliamentary sovereignty.

I did not expect to be in this position at the beginning of today. I am grateful to the Minister for making this important concession and for making the promise, at the Dispatch Box, that we will get the economic impact assessments that we sought to secure through the amendment. Given the firm commitment he has made to the Committee, I will not be pressing the amendment to a vote. I would like to take this opportunity to thank all Members who supported it. Ultimately, we have done this because we think it is important that our constituents understand why we make the big decision that we are going to have to make in the next few weeks.

Finance (No. 3) Bill

Sarah Wollaston Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

Unless Parliament agrees a deal, the UK will leave the European Union on 29 March with no deal, as that was the agreement we all knew when we voted to trigger article 50. That is now the law, and amendment 7 does not change that simple truth.

[Dr Sarah Wollaston (Totnes) (Con)]

Will the Minister clarify his last sentence? Is he saying that if the deal is voted down next week, it will become the Government’s stated objective to deliver no deal?

[Robert Jenrick]

The point I have just made is that the law of the land is that the UK will leave the European Union on 29 March, and nothing contained in amendment 7 will change that. As I will come on to say, the only difference that the amendment will implement is to make the UK somewhat less prepared for that eventuality. The purpose of clause 89 is to provide taxpayers and—

--- Later in debate ---

[Mel Stride]

Given the limited time that is available to me to summarise a debate that has covered a large number of amendments and new clauses, I shall confine my remarks principally to the issue that has been raised most frequently, which relates to new clause 26. The new clause requires the Government to lay before the House a report reviewing the effects of changes made by clauses 79 and 80 no later than 30 March 2019. While I should note that such a report will come too soon for the measures to have had a real effect, the Government of course remain committed to setting out the rationale for their policies as well as their impact, and in that spirit we will not oppose the new clause.

I do, however, echo many of the comments made by Members about what these schemes are truly about, which is gross aggressive tax avoidance. The way in which disguised remuneration typically works is that, instead of an employer’s paying an employee by way of a salary in the normal way, which attracts PAYE income tax and employees’ and employers national insurance, the payment is made as a loan. Typically, those so-called loans, which are not really loans at all—there is no intention of ever repaying them—are routed out via an offshore trust in a low or no-tax jurisdiction, and then routed back to the United Kingdom to be received by the end recipient. That is extremely unfair. It is unfair to our public services, because we have a duty as a Government to collect the tax that is due to fund them, and it is unfair to the vast majority of taxpayers who do the right thing, which is not to get involved in aggressive tax avoidance schemes in the first place and to pay their fair share of tax.

One issue that has been raised on a number of occasions is the question of whether HMRC’s loan charge arrangements are themselves retrospective. They are not retrospective because, critically—this is where I take issue with the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—at the time when they were entered into they were defective. No matter how far we go back, the scheme typically—I have described the way it works—was defective. It did not work then, it does not work now and the tax is due.

These schemes have been taken through the courts on many occasions. A scheme used to the benefit of Rangers Football Club was taken to the Supreme Court—the highest court in the land—and was found to be defective.

[Dr Wollaston]

Will my right hon. Friend give way?

[Mel Stride]

I will not, simply because I have two minutes and 30 seconds left and I want to cover some of the other issues raised this evening.

However, as I have said, the Government will accept this new clause. It is absolutely right that, when HMRC deals with the public, it has a strict duty of care, a duty of proportionality and a duty to be as sympathetic as it can be relevant to the circumstances of those with whom it is dealing. In my dealings with HMRC, I have made those points forcefully clear. As the right hon. Gentleman will know, HMRC has recently come forward to say that those earning £50,000 or less—which is over twice the average national salary of somebody working in our country—will automatically be granted, without requirement for additional paperwork, a minimum of five years’ time to pay as an arrangement to settle their affairs. Of course for those who come forward before April there is effectively in most cases no penalty as such; they will simply be required to pay that tax which was due in the past—and it was always due in the past—plus the interest that is rightly applied.

I have less than a minute left and want to say a little about amendment 12, tabled by the hon. Member for Aberdeen North (Kirsty Blackman), on the national minimum wage lock. She will know that, because we have increased the personal allowance now to £12,500 for every year of the forecast period, there will be no necessity for that lock to be in place. She makes the point that there could be a projection beyond that point. That will be a matter for a future Government of course and it is not for this Parliament to bind its successors.

I conclude on the suggested entrepreneurs’ relief review and new clause 2, which the hon. Member for Oxford East (Anneliese Dodds) spoke to. We had a review that was published in December 2017, which reported on this particular matter, and it showed that a third of those using entrepreneurs’ relief went on to reinvest in new businesses and half of those who were aware of entrepreneurs’ relief said that it significantly influenced their decision to enter into an entrepreneurial activity. It is an important element of the business tax landscape and we will of course, as we do with all taxes, keep that relief under review.

In the six seconds I have left, I urge that the House accepts the Government new clauses and, with the exception of new clause 26, rejects the Opposition amendments.