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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“As a former tax inspector, my hon. Friend is probably about as popular as I am as a tax Minister, which is never the most popular job in the world. The answer to his question—in a short and pithy response, Mr Speaker—is that we have to move to the more digital-based, data-based and inspection-based system that is facilitated by the very hubs I have been describing.”
“There has been a series of discussions right across Whitehall, led by the Cabinet Office, in the area in which the hon. Lady has framed her question. The hon. Lady levelled the charge of cost, but she then very quickly went on to talk about savings, and there will of course be net savings from this approach of some £300 million by 2025.”
“All requests for face-to-face meetings are of course treated on their merits, and they are certainly not discarded out of hand. I reiterate my point that, since 2014, tax offices have generally not been open for members of the public to walk in and ask to speak to a tax inspector. Indeed, some 80% of self-assessments are now done digitally online.”
“The hon. Lady raises the issue of the tax office in her particular area of Wolverhampton. I am very happy at any point—this is of course an invitation to any Member—to speak to her specifically about the circumstances of the HMRC office in her location. Equally, Birmingham is not a huge distance from Wolverhampton for many of those people to commute to, but if the hon. Lady would like to take up any aspects of that with me, I will be delighted to speak to her.”
“On the IT systems element of my hon. Friend’s question, he is absolutely right. CHIEF has been upgraded, and it is now capable of processing about 90 messages per second, which will be enough to handle the import and export declarations that may be required. On the issue of informing the marketplace or traders about the new circumstances that may pertain after 29 March, we have written to 145,000 exporters that export only to the European Union and are not therefore familiar with customs arrangements. We have issued three iterations of our partnership pack and there is a huge amount of information on gov.uk, where businesses can also sign up to email alerts to make sure that they are aware of the very latest relevant information.”
“I can confirm that services will be improved. All the evidence suggests that is the case as we have upgraded and brought HMRC into the 21st century, and I have already stated that the savings will be of the order of £300 million in the run-up to 2025.”
“I cannot comment on the specific tax office that the hon. Gentleman mentions, although I am of course very happy to discuss that element of his question outside this statement. As I have already set out, having effective manpower at our ports and borders is a matter of making sure that we have adequate HMRC, Border Force and Department for Environment, Food and Rural Affairs staff available for that, and it will not impact on the fact that we are rearranging our HMRC tax offices.”
“I will write to my hon. Friend with the answer to that question, on the basis that these are all individual arrangements that have been entered into. As for lease arrangements, the first stage of the process is to enter into a commitment with the developer to take possession of the building; the lease is signed in due course. I will, of course, write to him with a more specific answer.”
“These are two relatively unrelated matters. Reconfiguring our tax offices is important for the reasons I set out in the statement. As to the hon. Lady’s point about preparedness for the very large increase that there may be in customs declarations, depending on where we land with the deal, I pointed out in answer to my hon. Friend the Member for Yeovil (Mr Fysh) that CHIEF has been upgraded substantially; it will be able to handle the kind of volumes that it may be necessary to handle.”
“I thank my hon. Friend for shamelessly promoting, quite rightly, the properties in his constituency. I would be very happy to meet him to discuss the area.”
“The hon. Gentleman is suggesting that we set all current arrangements in aspic. Going back some decades, there would have been not 170 offices across the country, but several hundred. No doubt if we went back in time, the hon. Gentleman would have been on his feet telling us that we should keep 700 offices, rather than shrinking the number down to 170. The reality is that the way that the tax authority conducts its affairs is effective—I have given the figures—and there is a model that makes that happen. That lends itself to 21st-century hubs that have the right resourcing to do the job.”
“The decision to have a Leeds office as opposed to a Bradford office has been rigorously looked at. It hinged on eight principles, some of which I set out in my response to the hon. Member for Aberdeen North (Kirsty Blackman), who spoke for the Scottish National party. On my hon. Friend’s more general point about the economic impact, the House should celebrate the economic success that we have had; we have the highest level of employment and lowest unemployment since the mid-1970s, and it is this Government’s policies that are providing that.”
“I do not think that we are requiring all the employees at that location to travel in excess of an hour to fit in with the new arrangements. In my statement, I set out at length the various measures—I will not repeat them now—that we have taken to make sure that HMRC does the right thing.”
“My hon. Friend asks a very good question that goes right to the heart of why we are making these changes. If we are to build teams of highly skilled individuals, we need the right locations in which to house them; that will lend itself to the hubs that we are rolling out, which are in locations with good housing, good education, good access to a talent pool, good transport facilities and so on.”
“I can certainly assure my hon. Friend that HMRC engages with apprenticeship programmes and is supportive of apprentices, as are the rest of the Government.”
“The hon. Lady is absolutely right to be as passionate as she is about protecting the existing workforce and making sure that we do not lose the workforce’s vital skills. That is why we have taken this approach. We are ensuring that the new locations are viable for those from the old. For example, we are assisting those who need to travel by meeting some of their travel costs over three to five years. We very much want to keep the high level of skills in the organisation.”
“If we look at all the metrics, we can see that HMRC is doing extremely well on customer service at the moment, including time taken to answer telephone calls. There is always more to do, and we will continue to work at this, but it has a good record to date.”
“The main thrust of the hon. Lady’s question seems to be to decry the fact that we are decanting more and more services into one location. There are many logical economic and business reasons why one would do exactly that. As for her charge that Conservative Back Benchers are going up to that location, I would suggest that that says they are very interested in these particular matters.”
“Rather like the question from the hon. Member for Rhondda (Chris Bryant), the suggestion is that we just do nothing and stay exactly as we are. That would not be to the benefit of the taxpayer. Frankly, that would not be to the benefit of the staff, either, who will have increased opportunities as a result of the changes we are bringing in.”
“HMRC has stuck to very clear, very fair and balanced guidelines on how to make the assessments—the eight location principles we have been discussing this afternoon—and I have absolutely no doubt that it was rigorous in adhering to that process. The individuals impacted by this decision are central to the approach HMRC is taking, in the way I have described.”
“There has already been an equality impact assessment. It is in the public domain, but I would be very happy to share it with the hon. Member.”
“What is wrong is the suggestion that we are not good at collecting tax. We are world class at collecting tax. We have a tax gap of just 5.7%. If we had the same tax gap that we had under the Labour party, the missing revenue would be enough to employ every policeman and woman in England and Wales. The Conservative way works; the Labour way squanders resources.”
“When I first became Financial Secretary, one of the early decisions I took was to limit the roll-out of Making Tax Digital to just VAT and those businesses over the VAT threshold. The roll-out was delayed. I am confident that we are now in a position where businesses will be ready for that important change. That will be of benefit to HMRC by way of tax collection and important for the efficient running of those companies.”
“The simple fact is that the Government are adopting an efficient approach to the use of our resources, including across HMRC. We do that for a distinct purpose: it allows us to spend more money on the things that our country expects us to spend money on, such as vital public services, including the national health service, where we will be spending £84 billion more over the next few years than under the previous Labour Government. I make no apologies for doing things that drive efficiency and allow us to support health and public services.”
“Clearly, I am not in a position to comment on very specific remarks about armchairs, but if the hon. Lady would like to raise the matter with me outside of this statement, I would be very happy to discuss it with her.”
“I would be happy to meet the hon. Gentleman to discuss the details of that specific office location. Bill Presented European Union (Revocation of Notice of Withdrawal) (No.2) Bill Presentation and First Reading (Standing Order No. 57) Angus Brendan MacNeil, supported by Pete Wishart, presented a Bill to require the Prime Minister to revoke the notification, under Article 50(2) of the Treaty on European Union, of the United Kingdom’s intention to withdraw from the European Union, subject to the legislative consent of the Scottish Parliament and the National Assembly for Wales; and for connected purposes. Bill read for the First time; to be read a Second time on 8 February, and to be printed (Bill 326 ).”
“In summary, the orders deliver on the shared objectives of the UK Government and the Governments of the Crown dependencies to ensure the continuation of our current customs relationships outside the European Union customs union. They will place our customs relationships with the Crown dependencies on a firm footing for the future, and they underline the positive collaboration that has taken place between the UK and the Crown dependencies since the 2016 referendum. I therefore commend the orders to the Committee.”
“It will also mean that the UK and the Crown dependencies will apply the same tariff as the UK, just as they do now under the EU customs union. The making of these orders is a prerequisite for the making of separate regulations to implement the customs union arrangements. Once the orders are made, we will lay the regulations required to comply with the commitments made in the new arrangements—for example, a regulation to ensure that importers bringing goods into the Crown dependencies can apply for tariff information rulings. While the new customs arrangements to which these orders give effect are compatible with any future customs agreement reached with the EU, these orders and the implementing regulations must be in place when the obligations in the EU treaties cease to apply to the UK.”
“These arrangements have been designed to ensure continuity for UK-Crown dependency trade when the UK leaves the EU, and impose no new direct costs or additional information requirements on businesses in the UK or the Crown dependencies. The two Channel Islands arrangements are identical in all material respects and are new agreements, whereas the new Isle of Man arrangement updates customs aspects of the existing 1979 UK-lsle of Man customs and excise agreement. Under the UK-Crown dependencies customs union, traders moving goods between the UK and the Crown dependencies, or between the Crown dependencies themselves, will continue to pay no customs duty and face the same customs processes as they do now.”
“The three Orders in Council tabled in draft today will give effect to new customs union arrangements that will maintain our current customs relationships with the Crown dependencies after our European Union exit. Crucially, the arrangements provide that goods moving between the UK and the Crown dependencies will not be subject to import duty. I will now move on to clarify the new customs arrangements the UK has entered into with each of the Crown dependencies. On 26 November, the Government signed new arrangements with each of the Crown dependencies, together forming a new UK-Crown dependencies customs union.”
“May I say what a pleasure it is, Mr Stringer, to serve under your chairmanship and to speak to all three orders? Today marks an important step in meeting the Government’s commitment that the UK’s departure from the EU delivers for the whole UK family, including the Crown dependencies. Before we move on to the orders, it is worth my briefly setting out their context with regards to the Crown dependencies and the UK’s withdrawal from the European Union. The Crown dependencies are currently part of the EU customs union. This provides the legal framework necessary for goods to move between the United Kingdom and the Crown dependencies. The Crown dependencies will therefore leave the EU’s customs union alongside the United Kingdom.”
“The answer is that there are separate agreements; the Crown dependencies are jurisdictions in their own right, so it is only right and proper that there be a statutory instrument for each. In the case of the Isle of Man, as he will know, we are effectively amending an arrangement that was entered into in 1979—a distinct approach from the arrangements with the other Crown dependencies.”
“Gentleman’s suggestion that there has been a lack of scrutiny—I think that is a fair way of summarising his position—I must strongly point out that the primary legislation to which the orders relate went through full parliamentary scrutiny, including on the Floor of the House. Indeed, he may recall that section 31 was amended to restrict our ability to enter into a customs union with the European Union by any method other than primary legislation. I do not think there is any ambiguity about the purpose of the orders or the statutory instruments that will follow, which is to ensure that, after our exit from the European Union in late March, we are in a position to maintain customs relationships with the Crown dependencies. The hon. Gentleman asked why there are separate statutory instruments for each of the Crown dependencies.”
“I thank the hon. Gentleman for his contribution and questions. At the heart of this, it is important to understand the process of what is occurring. The whole process begins with the Taxation (Cross-border Trade) Act 2018. Of course, the hon. Gentleman will be very familiar with that Act and with the provisions section 31 makes for setting in train the process for entering into renewed customs union arrangements with the Crown dependencies. The process operates broadly as follows: having entered into a political agreement with the Crown dependencies, we are required to approve the draft orders, which will then go to the Privy Council. The relevant statutory instruments will then be laid under the negative procedure in the latter part of February, setting out the details of the arrangements with the Crown dependencies. As for the hon.”
“Gentleman’s points around whether we should or should not remain a member of the European Union’s customs union, that is, once again, probably outside the scope of our considerations today, but there has been, and no doubt will continue to be, considerable debate about it outside of this Committee. Question put.”
“I thank the hon. Gentleman for his further points. However, it is important to note that the scope of section 31, which he referred to early in his remarks, is in respect of measures relating to the Crown dependencies. These orders give effect to arrangements entered into with Crown dependencies, and therefore they obviously do not affect the overseas territories. Some of the points that the hon. Gentleman has made in this debate were made at the time the 2018 Act went through this House. At that time, I made it very clear that one of the uses to which we would almost certainly put the powers under section 31 was exactly what we are doing today: to enter—under certain circumstances—into customs union arrangements with the Crown dependencies. As to the latter part of the hon.”
“Other anti-avoidance rules in the new treaty include a tiebreaker provision for determining corporate residence, based on competent authority agreement.”
“Our current DTA with Austria was not listed as one that either state wished to be covered by the BEPS multilateral instrument—MLI—because this new agreement contains all of the provisions that would have been introduced by the MLI, taking into account the respective reservations made by the UK and Austria. These provisions include the statement in the preamble that a purpose of a DTA is not to create opportunities for tax evasion and avoidance, and a principal purpose test that denies treaty benefits in cases of abuse. Together, these provisions ensure that the agreement complies with the BEPS minimum standard on preventing treaty abuse and supports this Government’s agenda of fair and transparent international tax standards.”
“At the same time, our right to tax distributions from UK real estate investment trusts at a rate of 15% is preserved. In addition, dividends received by UK pension schemes will be exempt from taxation in Austria. These reductions will ease the flow of cross-border investment between our two countries, to the benefit of both. The new DTA also brings the mutual agreement procedure up to the minimum standard on improving dispute resolution agreed under the OECD-G20 base erosion and profit shifting—BEPS—project. In addition, the new agreement provides for mandatory binding arbitration, which will ensure that disputes are always resolved and that double taxation is avoided.”
“The new DTA also introduces a number of improvements for businesses, individuals and Her Majesty’s Revenue and Customs. The new agreement will first create certainty for businesses, boosting vital trade between our two countries. Cross-border dividends between group companies in the European Union are currently exempted from source state taxation under the EU’s parent-subsidiary directive. The new agreement ensures that UK businesses with subsidiaries in Austria will not be affected by the UK’s exit from the European Union. Our current DTA permits Austria to tax dividends paid to UK residents at a rate of 5% for amounts paid in respect of direct investment, and 15% on portfolio holdings. The new DTA reduces the rate on direct holdings to zero, and that on portfolio holdings to 10%.”
“I beg to move, That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Austria) Order 2018. May I say what a pleasure it is to serve under your chairmanship, Mrs Main? The order gives effect to a replacement double taxation agreement with Austria. DTAs remove barriers to international trade and investment, and provide a clear and fair framework for taxing businesses that trade across borders. By doing so, they benefit both businesses and the economies of the countries signed up to them. Our current DTA with Austria dates from 1969 and is therefore in need of a comprehensive update to reflect changes to the OECD’s model tax convention and the domestic tax laws and treaty preferences of both states.”
“Well, I am not sure that I would use quite the terminology that the hon. Gentleman has just introduced to the Committee. The purpose of any DTA is clearly to ensure that those entities that are trading across international boundaries do not suffer double taxation—so they are not taxed in both jurisdictions—and to ensure that trade is facilitated.”
“In summary, the agreement protects UK revenue and provides a stable framework in which trade and investment between the UK and Austria can continue to flourish. I therefore commend the order to the Committee.”
“The hon. Gentleman might not be aware that we have double taxation agreements with a whole variety of countries. In fact, he has missed some of the best debates ever held in the House of Commons, because in this very Committee Room we have recently discussed DTAs with countries such as Lesotho—that was a fairly feisty debate between myself and the hon. Member for Oxford East. It is not a treaty in isolation, but one of many that we have entered into with other jurisdictions. The provision in the capital gains article preserves UK taxing rights on gains from shares that derive their value from property in the United Kingdom. Finally, the new DTA provides for mutual assistance in the collection of tax debts. Together, those features strengthen both countries’ defences against tax avoidance and evasion.”
“She asked whether I would write to her with further information on that point, and I will be glad to do so. Question put and agreed to.”
“First, clearly, a negotiation between two parties will typically lead to some divergence from the model—that is a standard situation, so there is nothing unusual in this case. Secondly, if the hon. Lady will write to me to highlight the particular differences from the model and where there were choices within the model, I will be happy to provide answers. I also point out that, as she may know, a review of our policy on DTAs is being conducted. It will report back soon and, as the relevant Minister, I will look at its conclusions in some detail. The hon. Lady raised a specific point about the lack of a reference to stateless persons in the agreement. I took particular note of the various issues that she understandably raised about that.”
“I thank the hon. Lady as usual for her thorough set of questions, and I will endeavour to do my best to answer them. She asked which other treaty negotiations we are currently engaged in. I can inform her that DTA discussions are under way with Greece, Luxembourg and Romania. On her general point that it would be useful for her and others to have sight of the programme of discussions—she did not use that terminology—that we might have, I would be happy to provide that to the best of my knowledge at this point. Perhaps I could do that outside this Committee. The hon. Lady raised the differences between the double taxation agreement and the OECD model and asked about the reason for some of the choices that may have been made around those differences.”
“When it comes to making work pay, which lies at the heart of many of the arguments, universal credit does exactly that. People no longer have the 16-hours-of-work cliff edge, beyond which they lose all their entitlement.”
“They drive the economy, jobs and entrepreneurship. They make sure that we have, for example, halved the level of youth unemployment since 2010. He cited the very good example of Greece and other countries where they have taken a different way and have paid the consequences. The Government remain committed to lower taxes and to simplifying them to the extent possible and to making sure that the anomalies raised today are addressed. On the benefits system, much has been said about universal credit. We all recognise that when the Labour party was in government, its benefits system was overly complicated. People had to go to the DWP, to the local housing authority and to HMRC to qualify for a variety of benefits, but we have simplified that to one benefit.”
“In case it is felt that only the lower paid face very large rates of marginal income tax, we must bear in mind that, under the current system, once someone earns beyond the large amount of £100,000, the personal allowance is tapered away at a rate of £1 for every £2 earned. At that point in the income distribution, wealthy people pay a marginal rate if we include national insurance of 63%. A necessarily complicated tax system, because it tries to do many things at the same time, throws up all sorts of deeply unsatisfactory anomalies. The complexities of the tax system and the interaction with the benefits system means a complicated challenge ahead. Low tax matters. My hon. Friend the Member for South West Bedfordshire (Andrew Selous) put it eloquently. Low taxes matter for reasons other than fairness.”