Corporation Tax (Northern Ireland) Bill

Debate between Shabana Mahmood and Baroness Laing of Elderslie

Wednesday 4th March 2015 Commons Chamber

[Shabana Mahmood]

With respect to the hon. Lady, the whole scope of the Northern Ireland regime under the Bill relates to trading profits. Credit unions do not pay corporation tax on their trading profits, so this Bill does not impact on them. I am not sure how many ways there are of saying that; I feel that the different formulations of the point have probably been covered. If the credit unions did pay corporation tax on their trading profits, we would be having a different discussion. If Members wish to see a devolution regime for Northern Ireland that includes activities other than trading profits, so that corporation tax would be paid on investments, income and so forth, that is a big call to make. If provisions were to be applied but limited to credit unions alone, it would mean carving out an exception to the regime. Let me say that that goes beyond the context of the agreement struck between this Government and the Northern Ireland Executive—the agreement that we have supported and the agreement that is the subject matter of the Bill. I would have a huge amount of sympathy if credit unions found themselves caught because they did pay corporation tax on their trading profits, but that is not the case, so—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The amendment has been discussed and withdrawn. We had a lengthy debate on it and we do not have a lot of time for this part of the debate, so we must stick to what exactly is in the Bill—and nothing more.

[Shabana Mahmood]

I am grateful, Madam Deputy Speaker, and I will move on to the rest of my remarks.

Bankers’ Bonuses and the Banking Industry

Debate between Shabana Mahmood and Baroness Laing of Elderslie

Wednesday 25th February 2015 Commons Chamber

[Shabana Mahmood]

I am sorry, I will not because of time.

The Government have failed to provide answers on HSBC in a way that would inspire confidence and they have wasted money challenging the EU bank bonus cap. What can we do to turn this situation around? It is clear that we need to reconnect the level of pay and bonuses of some highly paid bankers with the wider performance of the banks and their wider economic contribution.

A Labour Government would repeat the tax on bankers’ bonuses, which we introduced in 2009, to raise £1.5 billion to £2 billion. This tax—[Interruption.] I will come to that point in a moment for Government Members. This tax, alongside a restriction on—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady must be allowed to finish her speech.

[Shabana Mahmood]

Thank you, Madam Deputy Speaker.

This tax, alongside a restriction on pension tax relief, would fund a compulsory jobs guarantee. Let me deal with the point made by hon. Members chuntering from a sedentary position. The tax would be spent only once and only for one measure—that is, our compulsory jobs guarantee. That has been the case for as long as we have had our compulsory jobs guarantee policy. I find it interesting that the only line of attack that Government Members have on the compulsory jobs guarantee is to imply, incorrectly, that the bank bonus tax is being spent more than once. It is a weak line of attack from Government Members who do not want to engage with the substance of the policy—a compulsory jobs guarantee for the long-term youth unemployed.

Only one point was made about the substance of our policy, which was about the potential scope for tax avoidance. The first outing of the bank bonus tax introduced by the Labour Government had stringent anti-avoidance measures attached to it, and we would repeat those measures to make sure that the tax was not aggressively avoided and that all the revenue that we expect to be raised will be realised in order to fund our proposals for a compulsory jobs guarantee.

Section 5 of the European Communities (Amendment) Act 1993

Debate between Shabana Mahmood and Baroness Laing of Elderslie

Wednesday 30th April 2014 Commons Chamber

[Shabana Mahmood]

I shall deal with precisely what has happened to the personal allowance later in my speech, but let me make this point to the right hon. Gentleman now. It is true that the personal allowance has risen, and the Opposition have supported those changes, including yesterday when we debated clause 2 of the Finance Bill in Committee. However, it is also true that ordinary working people continue to be worse off despite the changes, and will still be worse off in 2015 than they were in 2010. This is a classic case of the Government’s giving with one hand and taking away much more with the other, and it goes to the heart of the “fairness” charge that I am laying at their door.

I was very struck by the suggestion made by a welfare Minister, Lord Freud, that the reason for the massive increase in the number of people who are using food banks and having to rely on food parcels from them was that

“there is an almost infinite demand for a free good.”—[Official Report, House of Lords, 2 July 2013; Vol. 746, c. 1072.]

I had to read that comment several times, because I could not quite believe that such words could emerge from anyone’s mouth during a discussion about food poverty and the fact that people are going hungry in our country. When the story about the huge increase in the number of people using food banks hit the news a couple of weeks ago, I was also struck by the main attack line from those on the Government Benches: the claim that the increase had a lot to do with advertising and the fact that many more people are now aware of food banks.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady will be aware that this is a very narrow motion. I am sure that she is using the matter to which she is referring as an example, which is in order, but I expect that she will be very careful not to stray too far from the very narrow terms of the motion.

[Shabana Mahmood]

I will, of course, be careful, Madam Deputy Speaker. However, the point that I am making relates directly to what is in the Red Book, to the nature of the motion that we are being asked to support, and to whether we are being presented with a true and accurate reflection of what is happening in the United Kingdom economy. My view, and that of other Opposition Members, is that the Red Book implies that the “commitment to fairness” is being met. I do not believe that a situation in the United Kingdom economy in which more and more people are being forced to use food banks while the Government see fit to give a tax cut to the wealthiest in our country indicates a genuine commitment to fairness, and it is for that reason that I have rejected the thrust of the motion—which asks us to approve the Red Book as such an accurate reflection—and supported the amendment.

The Red Book paints a rosy picture of the goals that have been met and the targets that have been delivered, but, although I looked very carefully, I could not find any reference to the Government’s failure to meet the terms that they had set themselves for their so-called long-term economic plan. The Minister said earlier that the Government were “on track”, which is fair enough, but the track to which she referred is not the track that the right hon. Member for Tatton said that we would be on when he became Chancellor. At the beginning of this Parliament, the Government said that the deficit would be eliminated by 2015, but we now know that that is not the track they are on. The deficit will not be eliminated by 2015; indeed, the current forecast is that it will not be eliminated until 2017-18, when we shall be well into the next Parliament. That is not the test that the Government set themselves for their economic plan, which has failed on its own terms.

Finance (No. 2) Bill

Debate between Shabana Mahmood and Baroness Laing of Elderslie

Tuesday 1st April 2014 Commons Chamber

[Shabana Mahmood]

I will not for the moment. I will make some more progress—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Too many conversations are going on around the Chamber that have nothing to do with the speech being made by the shadow Minister. Members ought to have the courtesy to listen to the hon. Lady.

[Shabana Mahmood]

Thank you, Madam Deputy Speaker. I am not surprised that Government Members do not want to hear about their secret £145 million tax cut for investment managers.

--- Later in debate ---

[Shabana Mahmood]

My hon. Friend makes a powerful point. His experience as a constituency MP is exactly the same as mine. Almost every business that comes to see me at my surgery is struggling with its business rates and energy costs.

What does the Bill say about the top rate of income tax? Well, it remains at 45p. This Government have given an average tax cut of more than £107,000 to the 8,000 millionaires in our country. They seem to think that if they keep talking about the increase in the personal allowance, they will make people forget that the combined impact of the tax and benefit changes is that a typical household is £900 a year worse off, and that the richest in our country are getting an absolutely huge tax cut. The Government are desperate to be able to claim that the 50p rate raised as little money as possible because they want to make it easier for themselves to justify their decision to give a tax cut to the wealthiest at a time when ordinary families are really struggling.

The Government’s own assessment claims that the cost of cutting the rate to 45p, excluding all behavioural changes, was over £3 billion. To justify the tax cut, they argued that most of the potential revenue would be lost as a result of tax avoidance. Government Members were very excitable about the Government’s record on tax avoidance, which I will come to in a moment. But surely a Government as proud as they are of that record would have taken some targeted anti-avoidance measures to stop people avoiding the 50p rate. Instead, they ducked the opportunity.

The Government also claim that tax revenues rose after they cut the top rate of tax, but both the Office for National Statistics and the OBR have said that many of the highest earners moved their income and delayed their bonuses by a year after the 2012 Budget to benefit from the lower top rate of tax. That shifting of income will have cost the Treasury millions of pounds in lost revenue. When the deficit is high it cannot be right to cut the top rate of tax. The next Labour Government will put that rate back to 50p while we get the deficit down.

There was some excitement on the Government Benches about the Government’s record on tax avoidance. Although they like to pretend that that record is strong, it is nothing to write home about. The DOTAS—disclosure of tax avoidance schemes—measures were introduced by a Labour Government in 2004. Every time Government Members stand up and take credit for those measures, I shall pass on their thanks to the previous Labour Administration, who introduced them.

The Government have made a number of assumptions in their calculations of the value to the Exchequer of extending the accelerated payment scheme to both DOTAS and the general anti-abuse rule. Although HMRC is successful in about 80% of the cases it litigates, I find it hard to see why the same 80% success rate has been applied to potential cases under the GAAR when a case on the GAAR has yet to go to court. We will scrutinise the Government’s numbers in Committee: they have a history of overestimating the impact of their avoidance measures. We have spoken a lot today about the Swiss deal, which raised £2.3 billion less than expected. I am sure that the Exchequer Secretary will not—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The House is too noisy. If hon. Members listen quietly, perhaps the hon. Lady will be able to come swiftly to the end of her speech.

[Shabana Mahmood]

Thank you, Madam Deputy Speaker. I will bring my remarks to a conclusion, but I want to give the Exchequer Secretary an opportunity to intervene and explain to the House why he got the numbers so wrong on the Swiss tax deal. He is shaking his head, which implies to me that he is not prepared to stand up for his own record or admit that he has a history of overestimating his numbers. We will look at the numbers closely in Committee.

The Government had an opportunity with the Bill to provide help in the here and now. That is an opportunity they have failed to take. We will be voting against the Bill and in favour of our reasoned amendment, which lists the measures that we believe are necessary to tackle the cost of living crisis and make sure that people on lower and middle incomes start to see the benefits of recovery. We will seek to improve the Bill in Committee and try to persuade the Government to change course, but from what we have heard today and what we are no doubt about to hear from the Exchequer Secretary, I fear that the Government are so blind to the lives of ordinary working people that they will refuse to take the opportunity to do so.