(5 years, 9 months ago)
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It is my intention in my concluding remarks to stridently condemn the promoters of these schemes, who have ended up luring people into misery through what they have done.
Before closing with this letter, I want to mention that the Chancellor also wrote:
“It is not normal, or indeed reasonable, to be paid in loans that are not repaid in practice. It is not fair to the vast majority of taxpayers who pay their taxes in full and on time for anyone to benefit from contrived avoidance of this sort and that is why this government has legislated the charge on DR loans.”
I agree with the Chancellor that it is not normal or reasonable, but I make it very clear that I place the blame on the promoters of these schemes.
HMRC initially expected 40,000 people to be affected, although in a recent parliamentary question, my right hon. Friend the Financial Secretary to the Treasury gave a new figure of 50,000. HMRC’s impact note stated:
“The government anticipates that some of these individuals will become insolvent as a result.”
The Loan Charge Action Group suggests that the loan charge will end up affecting probably upwards of 100,000 people and their families.
The hon. Member for Eastbourne (Stephen Lloyd) has tabled an EDM criticising the measure, arguing that
“retrospectively taxing something that was technically allowed at the time, is unfair”.
Of course, I would agree. HMRC has argued that the loan charge is a new tax on a new source, and described it as retroactive rather than retrospective. I would like the Minister, if he can, to explain both terms and any difference that the Treasury is implying.
The hon. Gentleman deserves a lot of credit for bringing this issue to the House. Does he agree that we should be working cross-party ahead of the Report stage of this year’s Finance Bill to put together a new clause that deals with the problem, under which any loan charge would come into effect only after Royal Assent of the Finance (No. 2) Act 2017?
I certainly agree with the right hon. Gentleman that there is a job of work to be done across parties to uphold the rule of law, in particular the principle that legislation should not apply retrospectively. That is a subject on which I have made speeches over the years. We end up in a hideous cycle of undesired action, in particular to avoid taxation, followed by the injustice of retrospective action to protect other taxpayers and the misery that causes to large numbers of people. It must be brought to an end, but underpinning that we must be committed to the rule of law.
This House has the chance and the opportunity to put this wrong right. As the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) said at the end of his speech, there will be a Report stage to the current Finance Bill. It will come to the Floor of the House and we—every Member here today of whatever party, whoever signed the early-day motion—have the power to come together, cross-party, and pass a new clause to right this wrong. Frankly, words in a Westminster Hall debate and signatures on an EDM mean nothing unless we are prepared to go through the Lobby to vote this tyrannous legislation down. Constituents, the Loan Charge Action Group and all the people affected will expect their Members of Parliament to vote and act and not simply talk. Today gives us a platform to make sure we send a powerful message to Treasury Ministers that this is a catalyst for the action that was not taken two years ago, but will be taken, I believe, when we get to the Report stage of the Finance Bill.
As has been said by the hon. Member for Wycombe (Mr Baker), there is a fundamental principle here that he and I can agree on: the rule of law. When we talk about British values, about which he and I agree, the rule of law is something the Department for Education says should be taught in every school up and down our country. Well, this is the test. Either Members of Parliament believe in the rule of law and what our children are taught, or they do not. When we vote on the new clause in the Finance Bill, as I am sure we will be asked to, we will see whether we really do believe in the rule of law.
As one liberal to another, it is a delight to agree with the right hon. Gentleman. I hope members of the public will not think I am engaging in too much levity if I say that some of us are engaged in enough rebellion already. I should be very grateful indeed if the Government tabled their own amendment to deal with this matter, so that we do not find ourselves engaged in any sort of rebellion on the Finance Bill.
It was a pleasure to allow that intervention. I have no objection to the way in which the wrong is righted, as long as it is righted properly. If we stick to the principle of the rule of law, as I said in my intervention on the hon. Gentleman, ending retrospection in this tax change means that any charge prior to Royal Assent of the Finance (No. 2) Act 2017 must end. There can be no charges before Royal Assent of that Act; otherwise we are in the area of retrospection.
Like other colleagues, I have had constituents contacting me. Sixteen have contacted me directly, and in my experience that means there are many more out there who have not contacted me. I will read from just one, from Mr Garry Taylor, who talks about the “devastating consequences” that will destroy the finances of “me and my family”. I do not know about other colleagues, but I have had people almost in tears in my surgery over a tax matter, which has never happened before in 20 years.
(9 years, 6 months ago)
Commons ChamberMy hon. Friend is right that network costs account for about a fifth of the average household bill. Of course, the Energy and Climate Change Committee, which he chairs, is looking into this issue and has taken evidence on it. We look forward to receiving his report. If one looks at an historical analysis of network costs as a proportion of energy bills, they have been coming down steeply since privatisation. We obviously want Ofgem to continue to bear down on them, and our regulatory regime is one of the strongest in the world.
My right hon. Friend the Secretary of State has already explained the incompetence of a price freeze. Does he agree that the best way to help families is to use the traditional liberal approach of competition to drive down prices?
My hon. Friend is right: a liberal approach is definitely the best. In the spirit of the coalition, we have together managed to bring down energy bills by reducing policy costs by £50, something opposed by Labour. It is often forgotten that because we have liberal markets in Britain, the UK enjoys the lowest domestic gas prices in the EU15.
(10 years, 9 months ago)
Commons ChamberI was making the case that we have taken action to help people with the cost of living. Look at what has happened to gas and electricity prices. Under Labour gas bills doubled. In the previous Parliament, the average annual rise in gas prices was 12% per annum; in this Parliament it has been 10% per annum—far too high, but less than under the Labour Government. We could say the same about electricity prices. In the previous Parliament the average annual rise in electricity prices was 8% per annum; it is now 7% per annum—too high, but a better record than under Labour. According to recent Office for National Statistics figures for household spending on electricity and gas bills there was a 9% per annum rise in the previous Parliament; that is down to 6% in this Parliament. We want to do better, but we will not follow the record of the Labour party, which was dismal on prices and bills.
Has the Secretary of State made an assessment of how much of the recent price rises are the result of the Labour party announcing its policies and causing people to look forward?
I have not made that analysis, but I know that others have and are concerned that Labour’s policy will put up energy prices in many different ways.
I promised to analyse Labour’s policy and contrast it with the Government’s, and I will do that now. Let us start with Labour’s price freeze. The right hon. Member for Don Valley tried to say that the Government have put myths about. She tried to debunk those myths, but failed completely. We have made it clear that we believe that Labour’s policy is a complete con because prices could go up after the price freeze. The right hon. Lady’s answer to that is the amazing piece of legislation she is going to introduce, which will stop that. It will not, however, because the proposed legislation she described has no price regulation in it. If she is going to say that she will introduce full-scale price regulation, let her get to her feet now. If she is not, she simply cannot say that prices will not go up after her price freeze.