Sir Mel Stride
MP for Central Devon · Conservative · United Kingdom
“May I welcome the Chancellor to his position and thank him for his kind remarks earlier? May I also wish him every success, because I am afraid that under this Government we need some? He will know that if we are to fix the economy, we have to fix the welfare bill.”
“Given all that is going on, this could be the last time. The legacy of this Chancellor has been the highest taxes on record, a benefits bill spiralling out of control, and unemployment 300,000 higher than it was at the last general election. The right hon.”
“The right hon. Lady cannot bring herself to answer the simple question I asked. I will tell her: she is borrowing one quarter of a trillion pounds more than the plans that she inherited—that is her legacy. We hear that the right hon. Member for Makerfield (Andy Burnham) is considering borrowing even more.”
“May I begin by agreeing with you, Mr Speaker, and saying how disrespectful it is that this U-turn on fuel duty has already been released to the media earlier this week?”
“Today’s announcements will bring little comfort to the hundreds of thousands of people who have lost their jobs, the countless businesses that have folded and the high streets that are now hollowed out.”
“The Conservative party has been campaigning for a fuel duty freeze for months. The Chancellor repeatedly rejected those calls, creating unnecessary uncertainty for motorists and businesses. Why did it take her so long to realise that putting up fuel duty during an energy crisis is a bad idea?”
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“We aim to be the safest and most transparent place to do business, leading the race to the top and always championing high regulatory standards in financial services markets. The Bill will ensure that, in a no-deal scenario, the UK’s regulatory landscape will not fall behind its international counterparts. The Government have been clear that we do not want a no-deal scenario, but it remains the role of a responsible Government to continue to prepare for all possible outcomes. That includes the event that we reach 29 March without a deal. In those circumstances, we will have brought on to our statute book the vast body of EU legislation that needs to be operative at the point of exit. However, the powers under the European Union (Withdrawal) Act 2018 relate only to legislation operative immediately before exit day.”
“I thank the hon. Lady for that very appropriate intervention. She is quite right to mention the local presence of financial services across the United Kingdom. My right hon. Friend the Chancellor of the Exchequer has already set out the Government’s long-term vision for the future success of the UK’s financial sector, based on world-leading positions in the markets of the future, whether in green finance or in FinTech, and we are pursuing an ambitious global financial partnership strategy to cement our trading relationships with key partners. However, we also need to ensure that we have appropriate regulations in place, with the right balance between protecting stability and fostering competitiveness.”
“In a no deal and in the absence of the Bill, there would be no effective way to implement those files in a timely manner, as each would require primary legislation. The Bill allows the Government to domesticate each of these files in whole or in part via an affirmative statutory instrument. It further provides a power to fix deficiencies within them.”
“I think this is an example of Parliament carrying out its process and legislation being improved as a consequence. The most important point is where we have ended up. Having listened to the arguments put forward in the other place, the Government chose to embrace the amendments that brought those two particular files into the scope of the Bill. The Bill provides a mechanism through which the UK will be able to implement in-flight financial services legislation. They fall into two categories. The first category of files relates to those that have been agreed while we have been a member of the European Union, but will not apply or be in force prior to the UK’s exit from the EU on 29 March.”
“I will give way first to my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), but wait with great anticipation for the intervention of my right hon. Friend the Member for Loughborough (Nicky Morgan).”
“I thank my hon. Friend for his question. He is quite right, although the reference to the Securities Financing Transactions Regulation is, I think from memory, in clause 1(12), line 35 or thereabouts—the fourth file although the fifth measure in the list, the earlier two being combined. As to the main point on which he seeks clarification, the Bill will bring into effect those measures, as amended or otherwise, by affirmative statutory instrument at the time they are brought in. It will then be a case of the way in which those measures are dealt with in terms of the delegated powers to which he refers.”
“The Bill also allows the Government to domesticate these files, in whole or in part, via affirmative statutory instrument. Given that the UK will not be at the negotiating table when the files are finalised, we will be unable to advocate for the interests of the UK’s financial services sector during those negotiations. The Bill therefore provides the Government with the ability to make adjustments to the files that go beyond the deficiency fixing powers for the agreed files. These powers are clearly defined and proportionate.”
“I would make two points. First, where we will end up with the various files that are the subject of the Bill will, to some degree, be determined by where we end up shortly after or after any no-deal exit. I would imagine that at that point the EU would also wish to be negotiating with us on those measures. Secondly, the files themselves, under the schedule as opposed to clause 1, are being negotiated at the moment. We therefore do not have clarity on the exact form they will take. The second category of files, as I explained, are those that are still in negotiation. These are files that the UK has, in many cases, played a leading role in shaping, and that could bring significant benefits to UK consumers and businesses.”
“I am pleased to report that the Bill, as amended in the other place, allows for reporting in respect of the statutory instruments on a six-monthly basis—that commitment is in the Bill—and that there will be four periods in total. The first period of six months will commence from the moment the Bill receives Royal Assent. The report will both look backwards at the powers that have been exercised up until that point and forwards to those powers that may be exercised in the coming period. As to other organisations, such as the Bank of England, there will be a requirement for annual reporting on the basis of the measures undertaken by those regulatory organisations.”
“Having gone through the Bill’s various provisions and outlined its importance both to our future financial stability and to making sure that we are in the right place in the unlikely and undesirable event that we face a no deal, I commend the Bill to the House.”
“As a result of amendments to the Bill during its passage through the other place, the Treasury will be required to publish a draft statutory instrument at least a month before laying it, alongside a report detailing: any omissions from the original EU legislation; any adjustments from the original EU legislation; and the justification for those adjustments. The Treasury will be further required to publish six-monthly reports on how the power has been exercised and how it will be exercised in the following six-month period. Following contributions in the other place, the Government have also introduced a requirement for the financial regulators, the Bank of England and the Financial Conduct Authority, to report annually on their use of any powers sub-delegated to them as a consequence of the Bill.”
“I can confirm to my hon. Friend that the list is exhaustive in the terms he was discussing. In the case of non-performing loans, these matters were considered but it was decided that the number of these in relation to the number within the EU was relatively low and that existing tools that are available were adequate to deal with those particular matters. Hence, that particular issue does not feature within the scope of the Bill. Changes cannot be made in such a way that the implemented files depart in a major way from the effect of the original legislation. However, the Government will have some flexibility to make adjustments in order to take account of the UK’s new position outside the European Union.”
“This instrument makes consequential amendments to those aspects of the income tax regime that are not devolved, to ensure that taxpayers obtain reliefs or are taxed at the appropriate rates.”
“The amendments are minor and technical and affect a small number of people in a limited set of circumstances. The Wales Act 2014 introduces Welsh rates of income tax, which will be implemented in April 2019 and mean that anyone living in Wales and paying income tax will, from 6 April next year, pay the new Welsh rates. Members of Parliament for Welsh constituencies, Assembly Members and Members of the European Parliament for Wales will also pay Welsh rates, regardless of where they live. The Welsh rates will be set by the National Assembly for Wales and will apply to the non-savings, non-dividend income of Welsh taxpayers. Her Majesty’s Revenue and Customs will continue to collect income tax from Welsh taxpayers as usual. The introduction of the Welsh rates will have implications for other parts of the income tax system.”
“I beg to move, That the Committee has considered the draft Devolved Income Tax Rates (Consequential Amendments) Order 2018. It is a pleasure to serve under your chairmanship, Mr Gapes. The order makes changes to ensure that Welsh taxpayers obtain certain tax reliefs, or are taxed on certain types of income, at the appropriate Welsh rates once Welsh rates of income tax come into effect. The amendments follow as closely as possible the situation already in place for Scottish taxpayers, providing consistency of treatment of taxpayers across the United Kingdom to the extent that the different devolution settlements allow. The order makes two parallel amendments affecting Scottish taxpayers. These two changes make it certain that Scottish taxpayers will obtain tax reliefs or be taxed at the appropriate Scottish rates.”
“These minor technical changes are necessary to ensure that all Welsh taxpayers continue to pay income tax or obtain relief at the correct rates following the introduction of the new Welsh rates and that the devolved income tax rates operate as intended. I commend the order to the Committee.”
“The changes will also ensure that Welsh taxpayers are taxed on income from some trusts and deceased estates, or subject to certain special tax charges, at the appropriate Welsh rates. The amendments will provide for the Welsh basic rate to be used when calculating the tax reduction available under the tax allowance for married couples and civil partners who are Welsh taxpayers. In the case of charitable donations under gift aid rules and residuary income from deceased estates, we are taking this opportunity to make similar changes to ensure that Scottish taxpayers are taxed or entitled at the correct rate in the event of the Scottish basic rate differing from that in the UK. HMRC is on track to deliver the Welsh rates of income tax in time for the start of the next tax year, as required by the 2014 Act.”
“I think that is an ingenious attempt to open up a wider debate about the provisions of the 2014 Act and the basis on which taxation, or income tax in this instance, will be devolved. However, as the hon. Gentleman will be aware, what we are about this afternoon is some of the consequential changes that need to be made to UK-wide income tax legislation. The changes made by this instrument will establish that Welsh taxpayers receive tax relief or tax credits at the appropriate Welsh rates on their pension contributions to relief-at-source pension schemes; on their contributions to charities under gift aid rules; from settlor-interested trusts; or when calculating deficiency relief available when a life insurance policy ends.”
“The relief that will fall due to the donor under those circumstances, given that they would be a Welsh taxpayer, would be the difference between that and whatever the Welsh higher tax rate or additional tax rate was at that time. At the moment there is no change about to occur due to the decisions taken by the Welsh Assembly in respect of its own tax rate. However, I will write to the hon. Lady on her question about the potential Exchequer impacts from the way in which that system works. On that note, I hope that the Committee can agree to the order. Question put and agreed to.”
“It is a pleasure to respond to the hon. Member for Oxford East on this occasion, because normally she has 20 or 30 questions. Today there is but one, which is a great relief—although that denies me the opportunity of selecting which of the 20 or 30 questions I will respond to. I will respond directly to the one question that she has put, on the matter of gift aid, which is a perfectly reasonable question. The way that gift aid will operate under these circumstances will be that the charity, or the recipient, of the gift will receive relief at the UK rate, that being 20%, as our current basic rate tax is set at that level.”
“Last year, the Government published a comprehensive assessment of the impact of our departure from the European Union, covering four different scenarios and looking at the effect on GDP and GDP per capita on exports and imports. That analysis is available on gov.uk.”
“What we will continue is our extensive planning for the possibility of a no-deal, day-one exit to make sure that our ports are indeed flowing and goods are moving, including food. But the best way to ensure that we have the right conditions for UK consumers is to back the deal that has been negotiated with the European Union.”
“This country will achieve a range of additional flexibilities when we are outside the European Union. We will, of course, assess them all in due course, taking into account the fiscal costs of some of the measures that my hon. Friend has raised.”
“The simple reality of the situation that Parliament finds itself in is that, in the event that we do not conclude a deal successfully with the European Union, this country may well leave without a deal. I urge the hon. Lady, in order to address the concerns that she has rightly raised in this House, to get behind the deal.”
“My hon. Friend raises two issues. On non-tariff barriers, we have made it very clear that we will implement a solution in the event of no deal, for example, that will be as friction-free as possible. But there will be requirements in that scenario for us to handle pre-custom declarations and various checks, which will come with having a border under those circumstances with the EU27. On our tariff policy, we will come to that in due course.”
“The questions I have just responded to are in a similar vein and all lead back to one conclusion, which is that, if we are to avoid a no-deal scenario, there has, by definition, to be a deal that is agreed with the United Kingdom. We have a very good deal that the Prime Minister has negotiated and will be negotiating further with the European Union. It sees us respecting the outcome of the 2016 referendum but, most importantly, making sure that flows across our borders are as frictionless as possible.”
“The loan charge is not retrospective. The schemes that were entered into and to which the loan charge relates have always been defective—they never worked, including at the time when they were entered into. That has been evidenced by a number of court cases, including one put before the highest court in the land, the Supreme Court.”
“An important principle lies at the heart of the whole debate around the loan charge, which is that individuals should pay the tax that is due. If they enter into arrangements that basically mean they disguise income as a loan that they have no intention of ultimately repaying—money that is, more often than not, routed via low or no-tax jurisdictions overseas, via a trust, then brought back into the United Kingdom by way of payment—the Government believe that that is wrong, and the tax should be paid.”
“My hon. Friend will know that the loan charge was brought into effect in 2016. It allowed three years for individuals to clean up the loans—if they were loans, they could be refinanced on a proper, commercial basis—or to come to an arrangement with HMRC. The most important message that I can give from the Dispatch Box today to those involved in these schemes is to get out of avoidance, to get in touch with HMRC and to settle their affairs. They will have a sympathetic and proportionate hearing.”
“I thank my hon. Friend for that question. The creative industries are vital to our country. This Government have provided an array of very important tax reliefs to that sector—they were valued at £850 million in 2017-18. We will continue to support the sector.”
“As the hon. Lady may know, the way the loan charge works is that those who have been involved in this form of tax avoidance have until April to settle their affairs, in which case no penalty will be applied at all. We have also said that those earning £50,000 or less will automatically qualify for a five-year minimum repayment term. My message, as always in these circumstances, is that those who are involved in these schemes should come forward, speak to HMRC and sensibly sort out their arrangements.”
“We are truly the party for working people, as my hon. Friend states, unlike the Labour party. We are the party that raised the personal allowance to £12,500 one year ahead of our manifesto commitment to do so, taking well over 4 million of the lowest paid out of tax altogether. We are also the party of the national living wage, which will go up by 4.9% this April and be of great benefit to the very lowest paid in our country.”
“As HMRC gears up to manage the workload resulting from exiting the European Union, it is also providing additional space in regional centre cities for additional staff and retaining some space for longer so that the planning can benefit from the knowledge and experience of existing personnel. To transform the services that HMRC delivers for the United Kingdom, we are modernising almost every aspect of what we do. I am proud that HMRC is at the forefront of this change within the civil service, and I commend this statement to the House.”
“Not only will this enable HMRC to provide its customers with good service while cracking down on the dishonest minority, it is also excellent value for money, saving over £300 million in the 10 years of the programme up until 2025 and then saving a further £90 million a year from 2028. The route to this transformation is balanced by the recognition that, to protect HMRC from business disruption, current staff and their expertise should be retained wherever possible. HMRC believes that about 90% of the staff that it had at the start of this transformational journey will move to a new regional centre or finish their careers in their current offices. To further manage potential disruption, the Department is keeping eight transitional sites that will be open for longer to help to maintain continuity.”
“NHS Digital will be taking space in the Leeds regional centre, for example, and the Department for Work and Pensions will be taking space in Birmingham. The Cabinet Office is responsible for the wider Government hubs programme and it plans to align Government policy so that it is efficiently used and maximises opportunities for, and productivity of, civil servants. HMRC’s 13 regional centres are the first phase of delivering this vision. I am proud that the public sector is stepping up to the forefront of industry, thinking about what an effective, flexible and inclusive working environment looks and feels like. Far from lagging behind the private sector, HMRC is delivering offices that are suited to the 21st century, maximising current technology and planning ahead for what further change might be in the pipeline.”
“It is by making better use of technology and working differently that HMRC can become a more highly skilled organisation, maximising revenue, increasing compliance and further reducing the tax gap. Its Croydon regional centre is already open, impressing those who visit it with a new understanding of what it means to work for the civil service and providing a valuable prototype for the remaining offices. Securing the locations of these 13 offices is an important step in the wider Government plans to create hubs across the country, and to move civil servants out of London and the south-east. The regional centres are not just offices for HMRC, but form part of Government hubs and sites for cross-Government work.”
“This year will see two regional centres open in Belfast and Bristol —the first to follow the pilot in Croydon and to learn from the Department’s findings there. I will be receiving the keys from the developer on behalf of Her Majesty’s Government in the handover next month in Bristol. The HMRC offices in 2015 varied hugely in size, quality and accessibility of location, but HMRC has since worked towards offices that are well equipped and large enough to offer serious career progression in city centre locations that allow for travel across the country as well as the recruitment of local graduates. The higher standard of building, designed to support digital, flexible ways of working, is an integral component of HMRC’s broader plans to better provide service to the taxpayer at a lower cost.”
“With permission, Mr Speaker, I would like to make a statement relating to Her Majesty’s Revenue and Customs estate transformation. In the 2015 spending review, the Government announced HMRC’s locations programme to transport the Department’s office accommodation across the United Kingdom, moving from 170 legacy offices to 13 regional centres over the space of 10 years. I am pleased to report to the House that HMRC has now successfully secured sites for each of these 13 regional centres. This is a significant milestone in the Department’s trajectory towards serving the taxpayer from buildings that facilitate more efficient and technologically adept working across every region and country of the United Kingdom.”
“The purpose of these changes is to ensure that we continue the excellent work that HMRC is carrying out in clamping down on avoidance, evasion and non-compliance. The proof of the cake is in the eating: some £200 billion has been brought in or protected since 2010, and we have one of the lowest tax gaps in the world at 5.7%. That does not happen by magic; it happens by having an HMRC that is lean, efficient and up to the job. I commend this statement to the House.”
“In determining the locations of the regional hubs, HMRC mapped out the journey to work of the staff who would be impacted, to ensure that that was one of the principles taken into account when assessing where the locations should be. Those who have extended travel arrangements as a consequence of any move may be given assistance with additional travel costs for between three and five years. Transitional offices, which the hon. Lady raised, will provide additional opportunities for continuity of HMRC’s work and the opportunity of employment for those within these arrangements. There is a purpose to this. It is not just about saving money, closing offices, suggesting that we are ready for the 21st century or making change for the sake of change.”
“Some of the 170 legacy offices that the hon. Lady seems so intent upon protecting had under 10 staff in them. Most of the processes carried out by those staff were manual in nature rather than technology-driven, so they were far less efficient. For example, over 80% of self-assessment returns are now done in a digital format, which is why it is important that we move to this model. I turn to the hon. Lady’s remarks about the staff themselves, who have been at the heart of our considerations as we have rolled out this process. All staff are given at least one year’s notice of any proposed change. They are quite rightly given face-to-face meetings with their managers to discuss the changes and assistance that they may require.”
“One driver of additional value for money is that we will be able to unpick the unfavourable arrangements that her party’s Government got us into in the first place. The hon. Lady asked about the cost of redundancy. I said in my opening remarks that some 90% of those who will be impacted by these moves will either conclude their career in their existing offices or relocate to the new regional hub. The overall thrust of these changes is to ensure that we are better equipped at getting in more tax. It is very much a Labour philosophy that every solution has to involve more money and more people, whereas our approach is adjusting with the times and getting offices in place that are fit for the 21st century, often using complicated data-based interrogation techniques, for which large regional hubs are the way forward.”
“The debate this afternoon will rightly focus on preparedness, among other matters, and HMRC and its transformation programme lies at the heart of the issues that will be debated. The hon. Lady asked for the locations of these sites. I believe they are all in the public domain, but I am happy to provide her with a list. She also made several observations about the NAO report and value for money. We are still confident that we will meet our roll-out end date of around 2025. In terms of value for money, there will be savings of some £300 million across the 10 years. I remind the hon. Lady that we will be getting out of a substantial number of private finance initiative contracts that the existing offices are engaged with—PFI contracts that were brought in under her party’s Government in 2001.”
“I thank the hon. Lady for her response. I will pick up on some of the points that she has raised. The hon. Lady asked why this statement is being delivered today. I think that she partly, at least, supplied the reason for that herself, in that she has shown a very keen interest in these matters, as have many other Members across the House, quite rightly. It is right, as we have always said, that we will be transparent in the roll-out of this transformation programme, and today is part of that process. Towards the end of the hon. Lady’s remarks, she called for a review of our arrangements in the context of Brexit and the customs arrangements that our country may face. That is the second reason why it is important that we consider these matters.”
“I thank my hon. Friend for his question. As he will be aware, we have announced that we will retain the Southend office until the end of 2022, but I am happy to meet him to discuss that matter.”
“I think I can reassure her that, quite outside this whole process of the transitional arrangements, we will of course ensure that Border Force, HMRC and the Department for Environment, Food and Rural Affairs have the personnel available at those locations to make sure that they are able to run imports and exports efficiently. There is a general premise, however, in the suggestion that the offices somehow need to be close to people all the time. In fact, since 2014, it has been the case— [ Interruption. ]”
“They include transport connections, which are of course excellent in both Edinburgh and Glasgow, and the talent pool there, such as in universities—for example, Edinburgh and Glasgow have world-class universities—as well as the housing that is available, the quality of the schools and all the matters that will sustain the recruitment of the teams we will be bringing together in these 21st-century and much more sophisticated hubs for dealing with our tax purposes. The hon. Lady raised the issue, which I know she has raised on previous occasions, of the location of these hubs in relation to our ports and points of entry into the United Kingdom.”
“I have also raised the issue of the transition offices, which are of course there, among other reasons, to provide employment opportunities for the staff. The location principles—this comes to the questions the hon. Lady asked about why we have chosen one particular location rather than another, or indeed the existing location of the legacy offices—come down to eight key principles.”
“If the hon. Gentleman gives me a moment, I will do precisely that, as I always do. The answers to the hon. Lady’s questions relating to staff and the way in which we will be handling the staff are as I have set out. All staff will have at least one year’s notice of any impending move. The mapping process that HMRC undertook, as it went into the detail of where to locate the regional hubs, was very thorough. It took into account a number of principles, which I will come on to in a moment to answer another of the hon. Lady’s questions. Among those principles is the issue of the travel-to-work time, and every single employee’s home location was mapped against the possible new alternatives under consideration at the time those decisions were being made.”
“I can only apologise, Mr Speaker, and I obviously accept your guidance on this matter. I believe I was asked about 20-plus questions between the two Front Benchers, but I take your point. I will deal with one last point. The hon. Member for Aberdeen North (Kirsty Blackman) specifically asked me how many of the 5,000-plus personnel that HMRC is recruiting in the context of our Brexit planning will be based in Scotland. We are up to about 3,500 currently, and I will write to the hon. Lady to make sure that we provide her with the information she has sought.”