Oral Answers to Questions

Wes Streeting Excerpts

Tuesday 24th March 2020 Commons Chamber

[Rishi Sunak]

I am happy to talk to my hon. Friend further about his particular constituency issue, which I know poses particular challenges. We have committed to providing local authorities—and indeed all Departments —with any funding required to support public services, including local transport infrastructure in their communities.

[Wes Streeting (Ilford North) (Lab)]

On behalf of my constituents who will benefit from the measures that the Chancellor announced last week, may I sincerely thank him for the action that he has taken and for the responsibility that he is carrying? We are all rooting for him to succeed in the task ahead. The challenge, as others have described, is that for those who do not benefit, in particular the 5 million self-employed, the anxiety has increased, because they have seen a ship sailing carrying others but not them. I think they will be reassured that the Chancellor has given a clear commitment to do something, but many are facing a cash-flow crisis right now, so can he say a bit more to reassure them about how quickly he can implement the measures that he is considering?

[Rishi Sunak]

1 am very grateful to the hon. Member for his warm words; I appreciate them. We are looking at pace at what support can be provided. The fact is that the universe of 5 million that we are dealing with contains such a wide variety of different people that we are unable to target support. That is the challenge in designing something that gets to the people who we want to help, while at the same time being affordable and not having to benefit absolutely everybody. That is proving to be problematic, but we are hard at work on it.

In terms of delivery, it is almost certainly going to be the case that we would have to build another brand-new system to deliver any support. I am sure that hon. Members on both sides of the House would agree that, in terms of prioritising system design, the scheme that we have set up for 90% of the workforce who are employed should be delivered first and quickly, and that is what we have committed to do, ideally by the end of April. We are looking at how we can do these things in sequence or in parallel, but I take the hon. Member’s point: people are anxious. That is why we deferred the self-assessment tax return that is due shortly to provide some cash-flow benefit. We have also deferred VAT to a significant degree, which will help with cash-flow benefit, and many self-employed people will benefit from the business interruption loans, which are also interest-free.

--- Later in debate ---

[Rishi Sunak]

My right hon. Friend is absolutely right to highlight the importance of our armed services, and I join him in paying tribute to them for what they are doing, not just to keep us safe every day, but right now when we are calling on them to help us meet this public health emergency. As we speak, they are doing extraordinary work to help our healthcare system to respond to what is coming. We recognise that, and it will be recognised when we think about funding for the armed services not just today, but in the future.

[Wes Streeting (Ilford North) (Lab)]

One newspaper is already reporting that the Chancellor will implement an income protection scheme for the self-employed and make an announcement in the next 24 hours. I must say I got a slightly longer timescale from the Chancellor’s earlier reply, when he talked about the end of April. To come back to the point about reassurance, will he give some real reassurance now to those anxious self-employed people across the country that an announcement will be made very shortly?

[Rishi Sunak]

We hope to have something to say very shortly. Implementation will take longer for the reasons I outlined, when a good point was made about capacity, whether at HMRC or DWP, to deliver brand-new schemes. However, in terms of saying what we plan to do, hopefully we can do that relatively shortly. Implementation will take longer because of the clear delivery challenges that the scheme would pose.

Self-employed Persons: Financial Support

Wes Streeting Excerpts

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

My hon. Friend will recall that the Budget included targeted action specifically on council tax, with a £0.5 billion package to allow targeted support on council tax. I think he is drawing his attention to a slightly wider issue of concern, particularly where one member of a household works in the NHS as a key worker and one is at home, but of course that draws attention to the fact that this is a complex scheme that we are seeking to design. Those are the sort of issues we are working through.

[Wes Streeting (Ilford North) (Lab)]

I have so many self-employed workers in my constituency, including more than 1,000 taxi and private hire drivers. They will understand from what has been said this morning that the Government have good intentions, but they will respond to me that good intentions do not pay their bills. Given that there will be a lag with the new system coming in, what more can the Government do in the meantime, through offsetting tax bills and also encouraging banks to be more generous with free overdraft facilities to help families through this? Let us not forget that we all bailed out the banks when they needed it, so maybe it is time for them to do something now.

[Steve Barclay]

The hon. Gentleman is right in terms of the role of the banks, and a clear message has been sent by the Bank of England Governor about the importance of banks showing forbearance at this time. That applies to things such as credit card debts, but also he will be aware that, for example, for many of his constituents in a London constituency, their rent is a significant issue, as well as the measures we have taken on mortgages. We have looked at what we can do to assist on some of those fixed costs, but the banks have had a clear message from the Governor about the need to show forbearance.

Economic Update

Wes Streeting Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his support. I have sympathy with his constituents in that situation. That is why we strengthened our security and safety net last week, but the best thing we can do is help employers get through this and ensure that those jobs are ready for people to go back to as soon as practically possible.

[Wes Streeting (Ilford North) (Lab)]

The reality is that universal credit and statutory sick pay were not generous enough in the best of times, and they certainly are not enough to live on in these worst of times. When the Chancellor comes forward again, will he announce immediate plans to provide income protection for people who suffer loss of earnings, and will he give a tax holiday to freelancers and contractors facing tax bills in July for work that will never materialise in these circumstances?

[Rishi Sunak]

We have taken steps to strengthen the safety net. On deferring tax payments, that is something that is able to happen through Time To Pay. I urge people to contact Time To Pay. The details are available online. HMRC has 2,000 people standing by to talk to individuals. If tax deferrals are needed, it stands ready to negotiate and agree those.

Netflix: Tax Affairs

Wes Streeting Excerpts

Monday 3rd February 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

May I begin by thanking the right hon. Member for Barking (Dame Margaret Hodge) for calling this debate on an interesting and important topic that is of great public import? Members across the House will be aware of the interest that she has taken for many years in matters of tax avoidance, and I am grateful for the opportunity to speak in the debate and to outline work that the Government are doing to address concerns.

As the right hon. Lady will know, although I have overall responsibility for the tax system, I and other Ministers are never privy to information about the tax affairs of specific companies or individuals. This is a basic safeguard for taxpayers that is designed to ensure that Her Majesty’s Revenue and Customs can administer the tax system independently and without political interference. I am not, therefore, in a position to comment on the situation with Netflix as such, although I would like to reassure her that I have taken time to read around the subject of the debate, which excites a range of differing views. She will be aware that many of the wider concerns that she expresses are shared by Members across the House. I myself have written about them at some length and indeed pursued them as a member of the Treasury Committee, as she noted. In particular, she has raised several important general points about the tax system, which I would like to address.

The UK, like most major economies, taxes multinational companies based on the profits attributable to the economic activities they undertake here—for example, product development or manufacturing. That point has been well made by the right hon. Lady. That means that revenues alone are not a useful indicator of the amount of tax that a business should be paying in the UK. It is also necessary to consider the profitability of the business concerned, and the extent to which the activities that generate profits take place in the UK or abroad. However, the Government recognise that some multinational businesses have sought to avoid paying their fair share of tax in the UK by entering into contrived arrangements to divert profits to low tax jurisdictions, depriving the Exchequer of revenues needed to fund the public services on which we all reply. That is completely unacceptable, which is why the Government have taken robust action designed to inhibit or prevent it.

Internationally, the Government have been at the forefront of efforts to ensure that multinational companies pay their fair share of tax. In 2013, the UK used its presidency of the G8 to initiate the OECD’s base erosion and profit shifting project, which carried out a comprehensive review of international tax rules. The BEPS project recommended a range of measures to combat tax avoidance, which the UK has led in implementing. They include rules restricting companies’ ability to shift profits using interest deductions, rules counteracting tax avoidance arrangements involving so-called hybrid mismatches, a requirement for multi- nationals to disclose information about their sales, profits and assets in each country to HMRC, and new rules to prevent the abuse of tax treaties.

The Government have also acted unilaterally where needed. In 2015, they enacted the diverted profits tax, which charges a higher rate of tax on profits diverted from the UK in order to encourage companies to declare the right amount of profits. In 2019, they introduced a tax charge on offshore receipts in respect of intangible property—known in the trade as ORIP—which targets companies that hold valuable intangible assets, such as brands or technology rights, in low-tax jurisdictions. Such measures have significantly curbed the ability of multinational companies to shift profits to low-tax jurisdictions and have collectively raised over £8 billion for the Exchequer.

However, we must be realistic about the scale of the problem, not merely in the UK but around the world. New digital business models continue to pose challenges for international tax rules, and the sad fact remains that the vast majority of the rules were developed prior to the digital revolution of the past two decades. The Government therefore strongly support further work that is being undertaken at the OECD to reform profit allocation rules to ensure that market economies, including the UK, can tax a fair share of the profits of highly digitalised businesses. Only last week, UK officials attended meetings of the OECD in Paris, at which countries agreed to an outline of reforms. It is a complex area and there remains much work to be done, but the Government are optimistic that global agreement will be reached.

[Wes Streeting (Ilford North) (Lab)]

I thank the Minister for giving way. He is right to emphasise the importance of international co-operation, but the passage of time since many of these arrangements were agreed and the prevalence of the problems today suggest that international action has not been sufficient. What about the two examples of unilateral action that my right hon. Friend mentioned: a withholding tax applied in this country, or an extension of the ambit of the digital services tax that the Government currently have under consideration?

[Jesse Norman]

I thank the hon. Gentleman for his question, although it is a pity that he asks a question that has already been asked when we are short of time in a debate, because that does not allow me the time to come back to the right hon. Member for Barking, who asked the question in the first place. If they permit me, I will get to his point in due course after I address another issue raised by the right hon. Lady that is of great importance to the debate.

Turning to creative sector tax reliefs, we need to be clear that the creative industries make an important and extremely valuable cultural contribution to the UK. They are also an important part of a dynamic and diversified economy, with the UK’s world-famous creative industries making a record contribution to the economy in 2017 by breaking through the £100 billion mark. The Government are committed to supporting these highly skilled and innovative industries as they support economic growth across the UK. That is why the Government continue to offer support for the creative industries through eight sector-specific tax reliefs. The most established of those are reliefs for British film and high-end television productions. The reliefs have supported over £19 billion of UK expenditure, including the completion of 90 TV programmes and 245 films in 2018-19 alone. The success and popularity of British films overseas is well known. The UK film industry exported a record £2.6 billion-worth of services in 2017 and employed over 90,000 people across the UK in 2018.

The effect of the tax reliefs, in turn, is to help cement investor confidence in UK creative skills, infrastructure and innovation. Indeed, investment in facilities has spread to projects around the UK and includes new studio spaces such as Wolf near Cardiff, Pentland in Scotland, Church Fenton in Yorkshire, and the Littlewoods building redevelopment project in Liverpool.

I now turn to the questions raised by the right hon. Lady. She asked about the location where IP is created and whether that should determine the taxation of that IP. As she will be aware, I cannot comment on the circumstances of individual businesses, but under international tax rules, the UK is entitled to tax the shares of a company’s profits that relate to those production activities. That is what we are in a position to do, so she should not have concern on that front.

The right hon. Lady also raised the question of Brazil.

Spending Round 2019

Wes Streeting Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

My right hon. Friend speaks with great experience and is right to highlight issues relating to children’s services. I can assure her that in the numbers that I have given today she will see, beyond the excellent investment in schools, investment across the board that will benefit children, especially vulnerable children, through social services in particular. She also made a good and valid point about human capital and the need to view it in a different way, and that is something that I am very interested in pursuing in the Treasury.

[Wes Streeting (Ilford North) (Lab)]

If Dominic Cummings had not sacked his special adviser, he might have come up with a better speech.

I note that the Chancellor did not mention the growth figures, which is not surprising given that our economy is shrinking and every major sector of it—services, manufacturing, construction—is struggling. Is it not the case that, whether we are talking about the future of those industries or the spending plans that the Chancellor has set out today, every single promise is at risk from the no-deal recession that his Government are pursuing with their reckless no-deal policy?

[Sajid Javid]

The hon. Gentleman claimed that I had not mentioned growth figures. There are no new growth figures today because there is no OBR forecast, but I did refer to growth: in fact, I drew attention to the IMF forecast that we would grow faster this year than France, Italy and Japan.

The hon. Gentleman also talked of the risk to the economy. The risk to the economy is the uncertainty of not leaving the EU, and we must leave by 31 October. If he wants to end that uncertainty, he knows what he must do tonight.

Summer Adjournment

Wes Streeting Excerpts

Thursday 25th July 2019 Commons Chamber

[Wes Streeting (Ilford North) (Lab)]

Our new Prime Minister urges us to embrace a spirit of optimism, so I am going to meet him in that challenge as chair of the all-party parliamentary group on taxis. I have good news for the Government, who lack a majority and find it difficult to legislate: this is one area where they would find cross-party support if only they would bring forward the Bill we have been waiting for. When I was first elected as the Member for Ilford North in 2015, we set up the all-party parliamentary group on taxis because it was clear to those of us who represent significant numbers of London taxi drivers and licensed private hire drivers that there is a wild west in the regulation of the taxi and private hire industry. It allows unfair and anti-competitive practices, and also puts passenger safety at risk.

We embarked on a programme of consultation and engagement with stakeholders right across the industry in order to come up with our report on the future of the taxi and private hire industry, which made a compelling case for reform. It was so compelling that, although the Department for Transport itself did not quite embrace the report, it was at least persuaded to commission its own report. An independent committee led by Mohammed Abdel-Haq, a great guy, produced a thorough and comprehensive report that said pretty much exactly what our report had said. So a cross-party report has made the case for reform and the Department for Transport is also making the case for reform—a case that was accepted by the now former Secretary of State for Transport and two successive Ministers, the right hon. Member for South Holland and The Deepings (Sir John Hayes) and the Under-Secretary of State for Transport, the hon. Member for Wealden (Ms Ghani)—yet we still have no legislation.

So, in the spirit of this debate and in the spirit of optimism our Prime Minister tells us to embrace, I am optimistic that my speech will be heard by those on the Treasury Bench and that we will see legislation in the autumn. More than 1,000 of my constituents and their families are looking to the Government to act and I will be relentlessly on their case after the summer. I am afraid, though, that that is where my optimism about our new Prime Minister ends.

Let no one imagine that the heat has gone to my head and I am now persuaded that our new Prime Minister is ready to take our country forward in the way that he suggests. He urges us to judge him on his record. Well, that is what my right hon. Friend the Member for Warley (John Spellar) might describe as a target-rich environment.

I am afraid that the record of the Prime Minister as Mayor of London is not one to be proud of: millions of pounds wasted on a garden bridge that was never built; millions of pounds wasted on a cable car with no passengers; huge amounts of taxpayer money wasted on a vanity project, Boris island airport, which never even made it past the artistic licensing phase; the water cannon that he purchased but was never able to use; the fact that crime, including violent crime, rose before he left office; the ticket office closures; the bluff, bluster and bombast, which we saw so heartily represented at the Dispatch Box today; and a carelessness and lack of attention to detail, which have left a British citizen languishing in an Iranian prison, not because—let us not make excuses for the Iranians—the actions of the previous Prime Minister’s Foreign Secretary led to her detention, but because this Prime Minister, through his careless disregard for briefing and his careless use of language, aided and abetted the Iranian Government in making her suffering and the injustice she is experiencing last that much longer. It is totally appalling.

I am afraid that optimism is no substitute for a plan. In the unlikely event that the Prime Minister were minded to keep his pledge to lay in front of the bulldozer at Heathrow airport, I would be the first to volunteer to drive it. I am afraid that in the Prime Minister and in what we heard from the Dispatch Box today there is no plan for our country. In fact, the spending commitments he made on schools, health and so many other areas of public policy were not about a vision for the future; they were an admission of nine years of failure—school cuts, NHS cuts, police cuts, and every single one imposed by the party he leads and most of which he voted for once he was elected to this place.

We will judge this Prime Minister on his record. It is not a record to be proud of. It does not inspire confidence in his ability to lead our country. It is not a change of Prime Minister that we need; it is a change of Government.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I am delighted to hear the hon. Gentleman speak so well for the all-party parliamentary group on taxis.

Loan Charge

Wes Streeting Excerpts

Thursday 11th April 2019 Commons Chamber

[Wes Streeting (Ilford North) (Lab)]

Tax is the price that we all pay for a civilised society. I certainly come from the “pay your bloody taxes” school of thought when it comes to disguised remuneration schemes.

With the short time that is left, may I explain to the Minister, from what I have seen both on the Treasury Committee and from my own casework, the weaknesses in his and HMRC’s argument? First, HMRC knew about these schemes for many years. Year after year, in successive tax returns, in individual cases and collectively, it signed off those returns, and failed to take action against promoters.

Secondly, people took advice and acted in good faith year after year on the basis of that advice. That is certainly what happened in my constituency cases. The Government should be taking far sterner action against promoters than individuals who were misled.

Thirdly, in the way it has conducted itself, HMRC has fallen woefully short of the standards we should expect, both in its lack of timely communication with taxpayers and in the way it has misled legislators in calling for them to legislate for the loan charge.

Taking all those things into account, even now, there are people in my constituency and across the country who face demands for six-figure sums. No one—at least no one from an ordinary background, which my constituents are—can afford to pay them back. People are being compelled to settle now, while the situation is under active consideration by parliamentarians. When we look at how many MPs have signed the early-day motion and the letter to the Minister, it is clear that this policy no longer commands the support of the majority in this House.

Clydesdale Bank and SMEs

Wes Streeting Excerpts

Tuesday 19th March 2019 Commons Chamber

[John Glen]

Yes. I am happy to take up the case of Mr Lightbody and ensure that he gets a conversation with the right people.

[Wes Streeting (Ilford North) (Lab)]

It is not just in calling for a financial services tribunal that the Treasury Committee has joined the consensus. We have also echoed the concern, based on widespread evidence we received, that the regulatory perimeter needs to be looked at in respect of commercial lending. We urged the Government not to adopt a “wait and see” approach. Having looked at the Government’s response to our inquiry into SME lending and listened to the Minister this afternoon, I think the Government do indeed appear to be taking a “wait and see” approach. When will we see more concrete action to give all business owners the confidence they need that whenever malpractice occurs—it does occur, and it is too widespread—they will see justice and accountability?

[John Glen]

I thank the hon. Gentleman for his question. I have set out the expanded remit and role of the ombudsman service and the extension of the money that can be provided. I have also set out the engagement I have had with UK Finance on historical cases. I respectfully say to him that these are very early days—it is only two months since this decision was made, and I look forward to seeing urgent progress.

Oral Answers to Questions

Wes Streeting Excerpts

Tuesday 5th March 2019 Commons Chamber

[Mr Speaker]

This one-sentence model could catch on; that would be splendid. I call Stephen Kinnock.

[Wes Streeting (Ilford North) (Lab)]

No chance.

[Stephen Kinnock (Aberavon) (Lab)]

No pressure there at all. Question 23, Mr Speaker.

Oral Answers to Questions

Wes Streeting Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mr Hammond]

Obviously, we are disappointed by Hitachi’s decision to suspend work on the Wylfa project, but we have not given up hope. It retains the site and we hope that the work we are doing on a possible alternative financing model may yet allow the project to go ahead, but I am very happy to meet the hon. Gentleman.

[Wes Streeting (Ilford North) (Lab)]

11. What discussions he has had with the Secretary of State for Exiting the European Union on the Bank of England’s forecasts for the economy after the UK leaves the EU.

[The Economic Secretary to the Treasury (John Glen)]

On 28 November, the Bank of England published analysis on how the short-term impact of leaving the EU could affect the Bank’s ability to meet its objectives for monetary and financial stability. That analysis is published independently and reported to Parliament, but in line with normal practice, no comment will be made on discussions between Ministers.

[Wes Streeting]

The Bank of England knows that no deal will be a disaster, and so do Ministers and the Chancellor, yet the Prime Minister is whipping her MPs to vote today for an amendment that will make it more likely. What does that say about the Chancellor? Does the continued presence of no deal on the table speak to his lack of influence, his lack of authority or his lack of courage?

[John Glen]

I very much regret the hon. Gentleman’s tone. As he knows, the reality is that the best way of avoiding a no-deal scenario is to get behind the Prime Minister’s deal and vote for it.