Welfare Benefits Up-rating Bill

Debate between Stephen Timms and Nigel Evans

Monday 21st January 2013 Commons Chamber

[The First Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Before I call the first group of amendments I must tell the Committee that the amendments to the schedule have been marshalled in error before the new clauses. The Committee will deal with the new clauses before it considers the schedule. I invite Members who wish to speak to clause 1 as a whole to do so in this debate, as I do not anticipate that there will be a separate debate on clause 1 stand part.

Clause 1

Up-rating of certain social security benefits for tax years 2014-15 and 2015-16

[Stephen Timms (East Ham) (Lab)]

I beg to move amendment 12, page 1, line 4, leave out ‘by 1%’.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Amendment 7, page 1, line 4, leave out ‘1%’ and insert

‘the Retail Prices Index measure of inflation.’.

Amendment 10, page 1, line 4, leave out ‘1%’ and insert

‘the percentage by which the general level of earnings is greater at the end of the period under review in that tax year under section 150(1) of the Social Security Administration Act 1992 than it was at the beginning of that period’.

Amendment 20, page 1, line 22, leave out subsection (5).

Clause stand part.

[Stephen Timms]

In this Bill the Government are punishing people who are already hard up for the failure of their economic policy. We were promised that the policy would lead to steady growth and falling unemployment, but it has failed. We have had a double-dip recession, and some predict that this week we will learn we are in a triple dip. Unemployment is now officially forecast to go up next year, so spending on unemployment benefits will go up, and borrowing will go up too.

The Chancellor’s policy has failed and the Government have decided to respond by forcing down the incomes of those whose incomes are already the lowest of all. Roughly speaking, the saving over the two years to which the Bill refers will be about the same as the increase in welfare spending resulting from the rise in unemployment forecast just between the Budget last year and the autumn statement.

The Government want to cut the incomes of the least well-off in real terms, not just for the coming year but, through this Bill, for the year after and the year after that. At the same time, in April they will give a tax cut to everybody earning more than £150,000 per year. That combination of policies will force up poverty in every part of the country, and it is a disgrace that Ministers are forcing this Committee stage into a single day.

This Bill is a bitter blow to large numbers of families—in work and out of work—who are on low incomes at the moment and struggling to make ends meet. Three new food banks open every week; last year a quarter of a million people received help from a food bank because they could not afford enough to eat, and this Bill will make matters significantly worse. It means that for three years, low-income families will get below-inflation increases. The number of people visiting a food bank will be higher this year and, because of this Bill, it will be higher still next year and higher again the year after that.

As Citizens Advice points out:

“The cumulative impact of capping the uprating of most benefits to no more than 1%”,

for the next three years, will lead to an exponential increase in net losses each year. Child Poverty Action Group stated that

“the poorer you are, the greater your loss.”

Finance Bill

Debate between Stephen Timms and Nigel Evans

Thursday 15th July 2010 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

Schedule 4 provides for the exemption from income tax of expenses paid or reimbursed to MPs, following the introduction under the Parliamentary Standards Act 2009 of the popular new scheme for paying the expenses of MPs administered by the Independent Parliamentary Standards Authority. I understand that that will broadly have the effect of maintaining—[Interruption.]

[The First Deputy Chairman]

Order. Far too many conversations are taking place in the Chamber. Will those who are leaving please do so quietly?

[Stephen Timms]

I appreciate that the arrangements will broadly have the effect of maintaining the tax treatment that applied to similar expenses paid under the previous arrangements. Tax treatment of MPs’ expenses used to be dealt with by specific legislation or long-standing extra-statutory concessions. As hon. Members will know, a long-term project has been undertaken following the judgment in the Wilkinson case of 2006 to place all the statutory concessions on a proper legislative basis. Can the Minister confirm that the previous concession, which I think is numbered A.54—Members of Parliament: accommodation, allowances and expenses—has, with this legislation, been withdrawn, and whether any of the other extra-statutory concessions outstanding are affected by the Bill?

--- Later in debate ---

[Stephen Timms]

Clause 8 and schedule 5 amend the corporation tax rules on loan relationships and derivative contracts that apply to amounts not fully recognised for accounting purposes. This is a good example of the way in which the obligations that the previous Government introduced in 2004 on the disclosure of tax avoidance schemes are bearing fruit by revealing forms of avoidance that represent loopholes that need to be closed, which is what the clause does. The intention behind the clause was announced by the previous Government at the time of the March Budget. The provision is tightly targeted. I am not aware of any adverse reaction, and I certainly support the clause, but will the Exchequer Secretary give us his assessment of how much tax avoidance will be prevented by blocking the loophole?

I was pleased that the coalition agreement included the commitment:

“We will make every effort to tackle tax avoidance”.

Clauses 8 and 9 are the first concrete signs of that commitment being delivered. However, will the Exchequer Secretary tell us a little more about how those efforts will be pursued and what is meant in the coalition agreement by the commitment to

“detailed development of Liberal Democrat proposals”?

If I understand correctly, Liberal Democrat proposals in this area include: changing the taxation of benefits in kind; increasing the proportion of HMRC time spent on income tax evasion; a new general anti-avoidance provision for corporation tax, with companies paying a commercial rate for HMRC pre-clearance—I imagine that that is being subsumed in the wider discussion about a general anti-avoidance rule; and legislating to establish the beneficial ownership of property that is sold to prevent the avoidance of stamp duty land tax. Will the Exchequer Secretary confirm what the coalition agreement meant? Are all those initiatives—

[The First Deputy Chairman]

Order. I think that the right hon. Gentleman is going much wider than the provision before us. Will he confine his remarks to what is contained in clause 8?

[Stephen Timms]

Of course I will, Mr Evans.

I accept that there will always be areas in which there is legitimate uncertainty among business and their representatives about how the law applies. However, I am pleased that clause 8 and schedule 5 are being brought forward to block one more unwanted loophole.

Finance Bill

Debate between Stephen Timms and Nigel Evans

Monday 12th July 2010 Commons Chamber

[Stephen Timms]

I beg to move amendment 31, page 6, line 16, leave out ‘28%’ and insert ‘25%’.

[The First Deputy Chairman of Ways and Means (Mr Nigel Evans)]

With this it will be convenient to discuss the following: amendment 32, page 6, line 20, leave out ‘28%’ and insert ‘25%’.

Amendment 33, page 6, line 25, leave out ‘28%’ and insert ‘25%’.

Amendment 10, page 9, line 29, at end insert—

‘, provided that the Chancellor of the Exchequer has laid before the House of Commons a report on the implications of aligning rates of capital gains tax with rates of income tax.’.

Schedule 1 stand part.