Oral Answers to Questions

Stephen Timms Excerpts

Thursday 9th June 2016 Commons Chamber

[Mr Speaker]

I am sure that the hon. Gentleman’s performance is greatly enjoyed, not least by the hon. Gentleman.

[Stephen Timms (East Ham) (Lab)]

7. What assessment he has made of the potential benefits for the UK digital economy of completing the EU digital single market.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

As I was saying, we have a great broadband Britain in a great European Union. Britain sits at the centre of the digital single market, which, if it is implemented, will increase GDP for Europe by 3%, or some £300 billion.

[Stephen Timms]

This time, I think the Minister is on to something. The UK is Europe’s leading digital economy, and we have the most to gain from the digital single market. That is why 70% of techUK members and 96% of the members of the Creative Industries Federation want us to remain in the European Union. Will the Minister have a go at persuading his right hon. Friend the Secretary of State how damaging it would be for digital jobs in the UK if we left the EU?

[Mr Vaizey]

My right hon. Friend the Secretary of State has a mind of his own, and he quite rightly often takes the view that it is not worth listening to me, which is probably why he is such a successful Secretary of State. I do wish he would listen to me on this issue, however, because tech and digital companies do benefit from our membership of the European Union and they will continue to thrive if we stay in the EU.

Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 7th June 2016 Commons Chamber

[Damian Hinds]

Our projection is that, following the immediate economic shock that would follow from Brexit, 500,000 jobs would be lost and there would be an increase in unemployment. Part of that is from the initial impact on foreign direct investment, but that effect continues thereafter.

[Stephen Timms (East Ham) (Lab)]

It is a concern not just of Hitachi but of any non-European company that has its European headquarters in the UK. The UK is much the most attractive location for them currently, and they would be in great difficulty if we left the European Union. Has the Department made an assessment of what that group of employers contributes and will contribute in future to UK employment, which would be at risk if we left the EU?

[Damian Hinds]

We have modelled the effect on foreign direct investment. One does not have to believe that people currently in the UK would leave. All one has to consider in relation to the detrimental impact on the UK is what will happen to foreign direct investment in the future. There are many good reasons to invest in Britain, but we know that 72% of firms that invest in this country say that our membership of the European Union is a key factor.

Budget Changes

Stephen Timms Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

My hon. Friend puts it very well. This is a Government, and this is a Chancellor of the Exchequer, who have turned round the economy. We are in a position to be growing strongly compared with our international competitors, and we are bringing the public finances under control, having inherited the mess that would did in 2010.

[Stephen Timms (East Ham) (Lab)]

The Chancellor made no effort to justify the cut in disability benefits in the Budget statement, beyond saying that it would save a lot of money. Yesterday, we heard from the former DWP Secretary that the Chancellor’s view is that people claiming disability benefits will never vote Conservative so there is no reason for restraint in cutting their benefits. Will the Financial Secretary respond to that allegation?

[Mr Gauke]

That was not even the allegation. The reality is that, if we look at spending on disability living allowance and personal independence payments, it has gone up since 2010 by £3 billion—that is not a Government who are cutting at the expense of disabled people.

Local Government: Ethical Procurement

Stephen Timms Excerpts

Tuesday 15th March 2016 Westminster Hall

[Richard Burden]

I am very happy for that to happen. I give the Minister notice that there will be six questions on which I am seeking answers.

Did Ministers really take the view that public institutions should not have the same rights and concerns as private institutions when it comes to good business practice and corporate social responsibility? What was it that Ministers were trying to outlaw? The public procurement note published on 17 February appears to suggest much less than the Conservative press release of October; it appears to say that institutions should not impose a blanket ban on contracts with companies on the basis of the nationality of the companies concerned, in line with existing EU and World Trade Organisation rules. We know that the WTO forbids the use of quantitative restrictions, such as a ban on imports—phrased in terms of products originating in the “territory” of another WTO member.

On 9 March, in answer to a question from my hon. Friend the Member for Hammersmith (Andy Slaughter) about whether the occupied territories could be considered part of Israel, the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Bournemouth East (Mr Ellwood), was absolutely clear:

“The World Trade Organisation does not define the territory of its members. The UK does not recognise Israeli sovereignty over the territories occupied by Israel in 1967. We therefore do not consider the Occupied Palestinian Territories to be part of Israel.”

So my second question to the Minister is this: is there anything in this public procurement notice or that is intended by the Government that in any way changes that?

European Union rules are also mentioned in the public procurement notice. They allow public institutions, on a case-by-case basis, to exclude companies from tenders on the basis of their behaviour, specifically where grave misconduct may be involved. What could that mean? Let us turn again to the Government’s own documents—to their 2013 national action plan on implementing the UN guiding principles on human rights and business. An extract from that states that the UK Government

“are committed to ensuring that in UK Government procurement human rights related matters are reflected appropriately when purchasing goods, works and services. Under the public procurement rules public bodies may exclude tenderers from bidding for a contract opportunity in certain circumstances, including where there is information showing grave misconduct by a company in the course of its business or profession. Such misconduct might arise in cases where there are breaches of human rights.”

My third question to the Minister is therefore this: does the February 2016 public procurement note in any way change or add to that advice?

My fourth question is about whether the Minister considers that a breach of the fourth Geneva convention is a breach of human rights. If he does, would the public procurement note restrict a public institution from resolving not to deal with a company that was involved in aiding and abetting breaches of that convention?

If the public procurement note is prompting these and more questions, so, too, are the changes that the Cabinet Office says it is going to introduce in relation to investment decisions of local government pension funds. So my fifth question is this: pension fund trustees are already covered by a fiduciary duty, but will the changes being introduced in any way fetter the judgments that they make in line with that fiduciary duty in relation to, say, not investing in fossil fuels, tobacco or the arms trade?

My sixth question logically follows from that: in order to be clear on these points, will the Minister outline what plans he has for parliamentary scrutiny of these changes to pension fund guidance? Specifically, will he commit to consulting on any draft guidance he intends to issue in respect of local government pension scheme investments before it is published and before Parliament, through whatever procedure, is asked to make any kind of decision on these changes?

[Stephen Timms (East Ham) (Lab)]

My hon. Friend is setting out a clear set of questions, and he has made it clear that there is some ambiguity about precisely what the impact of the guidance note is. Is his reading of it that the kind of disinvestment by a local authority pension fund that was referred to earlier—Barclays and activities in South Africa—would be ruled out?

[Richard Burden]

I should say in answer to my right hon. Friend that I honestly do not know. That is the whole point—the Minister has to answer these questions. The wording of the Conservative party press release would certainly indicate to me that that kind of thing would be outlawed, but the Minister has to give specific answers today to these specific questions. That is important because it simply is not acceptable for councils, pension funds or other public institutions to feel threatened away from acting in line with their best judgments, in line with their duties, as a result of innuendo broadcast by the Cabinet Office Minister at the Conservative party conference—or indeed, broadcast more recently in Israel.

Enterprise Bill [Lords]

Stephen Timms Excerpts

Wednesday 9th March 2016 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I congratulate the hon. Gentleman on the holy alliance that he has assembled behind his amendment. A member of USDAW is quoted as saying:

“I’d be under pressure to do more hours on Sunday, making it impossible for me to go to church.”

Is that not an undesirable aspect of the proposal?

[Mr Burrowes]

The Government have tried to deal with that concern by putting forward additional religious protections in the Bill, and my amendment would not delete those. Whether the pressures are explicit or implied, they are a factor.

The Government did have a pilot in one sense, because such a measure was road-tested during the 2012 Olympics. A specific opt-out was created so that staff could avoid working the longer Sundays if they did not wish to, and retailers claimed that they would cover only those hours when staff volunteered to work. However, I understand that 564 representatives in stores that opened for longer hours found that in over half those stores—56%—despite the right to opt out, staff came under pressure to work the extra hours. Those who asked not to work the extra hours were threatened, or punished by being refused overtime.

Tax Avoidance and Multinational Companies

Stephen Timms Excerpts

Wednesday 3rd February 2016 Commons Chamber

[Mr Gauke]

I will come on to transparency, but let me first return to this Government’s record on changing domestic law and leading the way in updating the international system.

This Government have led internationally on the G20 and OECD base erosion and profit-shifting project, making the international tax rules fit for the 21st century. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer, in particular, took on highly prominent roles in initiating those discussions and taking them forward through the G20 and the OECD. The outcome will be to level the playing field among businesses, give tax authorities more effective tools to tackle aggressive planning, and help us better align the location of taxable profits with the location of economic activities and value creation. This is a major step forward in addressing the underlying causes of aggressive tax avoidance.

We have been at the forefront of implementing this agenda, acting swiftly to change the rules on hybrid mismatches and country-by-country reporting. Because we consider it important not to rely solely on international rules, we have also legislated domestically to introduce a world-leading measure to address the contrived shifting of profit from this country—the diverted profits tax. The diverted profits tax targets companies that divert profits from the UK, principally those with substantial activities in the UK who are trying to avoid creating a UK permanent establishment. Under our rules, those companies either declare the correct amount of profits in the UK and pay the full amount of corporation tax on them, or risk being charged a higher amount of diverted profits tax at a rate of 25%. By the end of this Parliament, the diverted profits tax will raise an extra £1.3 billion, both directly and as a result of associated behavioural changes. The tax is already having that effect, and multinationals will pay more corporation tax as a result.

[Stephen Timms (East Ham) (Lab)]

Of course, the diverted profits tax was referred to as the Google tax. My hon. Friend the shadow Chancellor has alleged that under the terms of the deal Google will not pay a penny. Is he right about that?

[Mr Gauke]

The purpose of the diverted profits tax, which came into effect in April, is to ensure that companies stop diverting their profits and pay corporation tax like everybody else. I repeat that I cannot talk about the Google case beyond information that is in the public domain, but if this tax is effective in driving companies to stop diverting their profits, it is a success.

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[Stephen Timms (East Ham) (Lab)]

I am highly enamoured of the record of the last Labour Government, and particularly enamoured of their Treasury policies.

I am grateful to my hon. Friend the Member for Hayes and Harlington (John McDonnell) for drawing attention to an assessment by the Financial Times of the comparative records of the Labour Government between 1997 and 2010 and subsequent Governments. The article, written by Vanessa Houlder in February last year, made three very important points to set the record straight. First, it stated that the current Chancellor

“has raised much less income than the last Labour government from reforms to tackle corporate tax avoidance”.

The second point was referred to by my hon. Friend in his introductory remarks. The article stated:

“Measures put in place by Labour during its 13 years in power to counter corporate tax avoidance are projected to raise ten times as much over the next four years as those introduced by the…coalition government.”

Thirdly and importantly, the article stated that the coalition

“eased laws aimed at stopping companies using tax havens, which had been repeatedly tightened under Labour.”

That is the difference between the record of the Government when I was a Treasury Minister and the current Government. Labour in government did the heavy lifting on corporate tax avoidance. The new Government, when elected, had different priorities, as they were entitled to have, but they cannot claim to have maintained the progress Labour made, because they have not.

I welcome the Government’s seeming support for country-by-country reporting, but those close to the process find it difficult to recognise that the Government have led on it since 2010, as they have claimed. We certainly led on it prior to 2010. The original idea was devised, I think, by Richard Murphy, about whom we have heard a good deal more in the last couple of years, but it was first brought to me, when I occupied the Minister’s office, by Christian Aid. I pay tribute to its work on this. It came to see me in early 2009. We had a series of international meetings in Berlin, Paris and elsewhere in 2009, at which I put the issue on the agenda, and that culminated in the first joint meeting of the OECD tax and development committee in January 2010 in Paris. That kicked off the process that I am delighted the Government are now swinging behind. But Labour in government started this off and Labour is entitled to the credit for that.

Oral Answers to Questions

Stephen Timms Excerpts

Wednesday 9th December 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right to raise that case. We all saw the tragedy that befell the family of the “Strictly Come Dancing” presenter and the campaign that her family have undertaken to change the regulations. It is true that we do not have the same flame-retardant regulations for children’s fancy dress costumes. That seems wrong. I know that my right hon. Friend the Business Secretary is looking at the matter and will ensure that that changes.

[Stephen Timms (East Ham) (Lab)]

Q11. Will the Chancellor take this opportunity to correct the bizarre claim made yesterday by Donald Trump about parts of London being no-go areas for the Metropolitan police? Will he point out to Mr Trump that relationships between the Muslim communities of London and the police are in fact excellent?

[Mr Osborne]

The right hon. Gentleman speaks for everyone in this House. The Metropolitan police do a brilliant job, and they have fantastic relations with British Muslims. British Muslims have made a massive contribution to our country. Donald Trump’s comments fly in the face of the founding principles of the United States, which have proved such an inspiration to so many people over the past 200 years. The best way to defeat such nonsense is to engage in robust, democratic debate and make it very clear that his views are not welcome.

European Union Referendum Bill

Stephen Timms Excerpts

Tuesday 8th December 2015 Commons Chamber

[John Penrose]

The hon. Gentleman will be aware that the franchise for Scottish parliamentary elections is rightly devolved and is a matter for Holyrood. This decision is to be taken in the House across the UK as a whole: it is not a devolved matter but a reserved one. While it is entirely open to the Holyrood Parliament to make decisions on its franchise—and we all honour its ability to do so—it is an inevitable result of devolution that there are different views in different parts of the country, locally nationally, if I can use that phrase, on different franchises.

[Stephen Timms (East Ham) (Lab)]

Notwithstanding the answer that the Minister has just given, does he not accept that the participation of 16 and 17-year-olds in the referendum in Scotland went well and that voters behaved responsibly? We ought to take advantage of the interest of 16 and 17-year-olds and their knowledge of these matters to support the coming EU referendum as well.

[John Penrose]

That is an entirely justifiable point, and it is noticeable that the Scottish referendum resulted in an upwelling of democratic engagement, not just by 16 and 17-year-olds but right across the age spectrum. I do not think that democratic engagement and involvement are the only tests that we should apply, but they are a factor that may weigh on other people’s minds—the right hon. Gentleman is exactly right. I do not think that that is enough on its own to justify changing the franchise either in the Bill or in other measures.

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[John Penrose]

That idea has a long and distinguished history. People were throwing tea into the harbour in Boston, saying “No taxation without representation” a long time ago. However, the argument has grown weaker over time for a number of reasons. First, the number of 16 and 17-year-olds who now pay income tax, though not zero, is a great deal lower than it used to be, partly at least because this Government and the previous one raised the threshold for income tax and also raised the school and training leaving age, so the number of people involved in paying income tax is significantly lower than it used to be. Secondly, there are now many more indirect taxes, so any six-year-old who buys whatever it may be will be paying VAT, among other things. Therefore the advent of indirect taxes rather weakens the logical foundations of that argument, one which I used to cleave to myself. I found myself in slightly uncomfortable positions as a result, because I realised that it was an eroded position.

Even if we were convinced that lowering the voting age was the right thing to do, this Bill would not be the place to do it, for two reasons. First, changing the voting age should not be applied to a single vote, even—or perhaps especially—if it is as important as this referendum. It is something that should be considered for all elections collectively and in the round, not piecemeal on an ad hoc case-by-case basis. Given the understandable sensitivity surrounding the EU referendum, making such a fundamental change to the franchise for this vote alone would inevitably and perhaps justifiably lead to accusations of trying to fix the franchise in favour of either the “remain” or the “leave” campaign. That is why we have chosen to stick with the tried and tested proven general election franchise. If it is good enough for choosing the Government of this country, surely it is good enough for the referendum too, and we should not jiggle around with it for a one-off tactical advantage either way.

[Stephen Timms]

On that specific point, as far as I know nobody has made any such complaint about the result of the Scottish referendum. I do not understand why the Minister feels that if it was done in this case, that criticism would be made.

Spending Review and Autumn Statement

Stephen Timms Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

The apprenticeship levy and the commitment we have made to 3 million apprentices is a huge boost to skills in this country, and it addresses one of the endemic weaknesses in the British economy that has bedevilled us for many decades. Small businesses are a big winner from the scheme: they do not have to pay the levy, but they get the advantage of the funded apprenticeships. We are also increasing the amount we pay for some of the apprenticeship courses. Indeed, there is a general uplift in apprenticeship funding. This will help small businesses, which do so much to support our economy, but which did not always get the support they wanted for training in the past.

[Stephen Timms (East Ham) (Lab)]

The local government grant is available because some local authorities have a lower tax base than others. Can the Chancellor reassure us that the same necessary degree of rebalancing will be delivered once the grant has been phased out?

[Mr Osborne]

The reallocation of business rates, which takes place after we allowed local authorities to retain 50% of their business rates in the last Parliament, will be in place from day one. Thereafter, local areas, such as the right hon. Gentleman’s, will have strong incentives to attract businesses to their area. They will be able to cut business rates, if they would like to bring in those businesses. Frankly, I think that will also help with speeding up planning decisions and encouraging local economic development. We all know that the trouble is that there is always a cost to local councillors saying yes to developments in our constituencies. It is often controversial and they do not see the benefits. Councillors will now see the benefits, and, more importantly, so will local communities.

Tax Credits

Stephen Timms Excerpts

Tuesday 20th October 2015 Commons Chamber

[Maggie Throup (Erewash) (Con)]

I am delighted to speak in this debate as it gives me the opportunity to speak up for the hard-working families I meet on the doorsteps of Erewash. My constituents tell me that they want a fair welfare system, one that is there for the most vulnerable in our society and provides a safety net when things do not work out. They tell me that when they pay their taxes, they want the money to be spent on the NHS, education and social care, not on subsidising employers who think they can get away with paying just the bare minimum wage. They also tell me they want to be paid a fair wage for the work they do and do not want to be dependent on state handouts. The people of Erewash are a proud people and I am proud of them.

That reflects the way in which I was brought up. My parents did not expect handouts from the state, but looked for ways to boost the household income. My dad worked hard during the day and took on a second job in the evening. Even when my mum was entitled to attendance allowance in her later years, she did not want to claim it because she thought that someone else would need it more.

The tax credit system is so complex that it is not fit for purpose. I am sure that my casework is no different from that of other hon. Members. Time and again, residents who receive tax credits get a pay rise and inform HMRC, but then find that they rack up huge debts with HMRC. Those people tell me that they would much rather earn more money than have to claim tax credits. That is exactly the environment that the Government’s changes are bringing about. We are introducing a national living wage between now and 2020, and are continuing to increase the income tax threshold.

[Stephen Timms (East Ham) (Lab)]

Will the hon. Lady give way?

[Maggie Throup]

We are short of time, so I will move on.

When we include the extra childcare that is being provided by Government, virtually zero inflation and mortgage rates at an all-time low, it can easily be seen that we are putting families at the heart of our welfare changes. I also believe that we are putting women at the heart of our changes. The extra free childcare will allow more women to get back into work, and those who are already in work will be able to do more hours. That will definitely boost family incomes. Wrongly in my opinion, women tend to be in lower-paid jobs, partly owing to the sacrifices that they make to bring up their families. The introduction of the national living wage and the increases in the income tax threshold will disproportionately benefit working women.

I am not saying that everything is perfect. We need to continue to narrow the skills gap between men and women. That is why I am backing a project spearheaded by the Erewash Partnership in my constituency, which aims to help women to set up their own business and realise their dreams. Some may question why we need women-only support. It is well recognised that some women lack self-confidence when it comes to going it alone in business and having the self-belief that they can do it. The support is tailored to meet those specific needs and it is working.

I want to finish by reminding people of the principle that was set out by John Bird, who founded The Big Issue: it is far more effective to offer a hand up than a handout. The culture of tax credits has become too much of a handout, rather than a hand up. I am confident that the proposed changes will create the hand up that Erewash residents want and deserve.

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[Mr Alan Mak (Havant) (Con)]

This is a Government on the side of hard-working people, elected with a mandate and a majority to transform our country from a high-welfare, high-tax, low-wage economy to a low-welfare, low-tax, high-wage economy. The reforms brought in and passed through this House must be viewed in the wider context of the summer Budget and the broader package of help for working people. Conservative Members believe the best route for working people is to let them keep more of the money they earn. All Members should welcome our new national living wage—a pay rise for 2.5 million people—while income tax, national insurance and VAT have been frozen.

[Stephen Timms]

The national living wage is being phased in over five years. Surely the tax credit cuts should be phased in over the same period, rather than taking huge ill effect next April.

[Mr Mak]

This is a national minimum wage that gives 2.5 million hard-working people a salary rise, which is the right approach. We have also increased the tax-free personal allowance and doubled free childcare for working people, while the fuel duty has been cut and council tax has been frozen as well. These reforms are all linked: they go hand in hand; they should not be seen or analysed in isolation. As many hon. Members have said, these are all part of a coherent, long-term economic plan, and it is simply not acceptable to deliver higher wages through the national living wage while at the same time leaving tax credits unreformed when they are such an important part of our reform package.