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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“The hon. Lady raises a specific case of a closure of a post office in her constituency. I believe the Post Office is engaged in that particular matter but, on the general matter of post offices, they do provide a number of financial services, supported by the banking framework agreement, such that 99% of individual customers will have access for their financial needs and 95% of businesses likewise.”
“The hon. Lady is right to raise the issue of the taxpayer supporting the Royal Bank of Scotland to the tune of some tens of billions of pounds. It is right that the Government therefore expect the bank to show profitability and to come back into economic health. Our overarching principle is that the best way of achieving that is to leave commercial organisations such as the Royal Bank of Scotland to be in charge of their own affairs, rather than subject to political interference from Ministers.”
“My hon. Friend makes an important point about the speed of broadband roll-out. Of course, on the broadband issue, the Government in Westminster have recently made available £1 billion across the UK to stimulate market delivery of fibre and mobile coverage.”
“As I have outlined, we support the access to banking standard, but post offices have also received considerable support from this Government and are able to provide a lot of the financial services that individuals and businesses require. In rural areas, for example, 99% of residents are within three miles of the nearest post office.”
“The Government are entirely committed to the Scottish whisky industry, which exported over 1.2 billion bottles in 2017, raising £4.3 billion for the UK economy. We have provided cuts and freezes in duty since 2013, with the result that the average bottle of Scottish whisky is now £1.19 cheaper than it would otherwise have been.”
“The hon. Gentleman has entirely overlooked the considerable support that we have already provided in duty cuts and freezes since 2013—a total of £4 billion. We will continue to support that vital sector, recognising its contribution to both the economy of Scotland and that of the wider United Kingdom.”
“My hon. Friend is entirely right. That is another example of why we should support the Scottish whisky industry. I have received many representations, not least from Conservative Members who represent Scottish constituencies, standing up for Scottish whisky and making sure that we make the investments we need going forward.”
“If I interpret the question as relating to financial services specifically around whisky, Mr Speaker, the answer will be the same as for financial services generally. The Government are committed to achieving a Brexit deal with the EU27 that is in the interests of this country, that keeps trade flowing and that ensures we have an implementation period that will provide the opportunity for consistency and certainty going forward.”
“I am pleased to say that we have delivered on that by increasing the frequency of business rates revaluations from every five years to every three years, following the next revaluation. That is an important point in the context of what my hon. Friend said about the difference in the rates being paid by the out-of-town store and by retailers on the high street. If we can have more frequent revaluations, as rateable values on the high street perhaps fall, we can more quickly pass on the benefit of that within the system.”
“Additionally, at spring Budget 2017, we announced an extra £435 million to support those businesses facing the steepest increases in bills, including £110 million to support 16,000 small businesses losing small business rate relief or rural rate relief to limit increases in their bills to the greater of £600 a year or the real-terms transitional relief cap for small businesses in each year. We also provided local authorities with £300 million of funding for discretionary relief to support individual cases in their local area. In parallel to all that, we have taken significant steps to ensure the fairness of the business rates system as a whole. That is why, at spring Budget 2017, the Chancellor announced that we would reform the revaluation process to make it fairer.”
“In the 2016 Budget, we made 100% small business rate relief permanent, at that time increasing the threshold for the relief and taking 655,000 of the smallest businesses out of business rates altogether. We also increased the threshold for the standard multiplier, taking 250,000 properties, including most high street shops, out of the higher rate of business rates. However, that is not all. Following the most recent property revaluation in 2017, we introduced a £3.6 billion transitional relief scheme to cap and phase in bill increases.”
“Inevitably, with every kind of measure or metric that one focused on, they had their own particular drawbacks and complexities and so on. The conclusion that was reached at the time was that business rates were a stable tax that is difficult to avoid because property is static by definition. Of course, as my hon. Friend also rightly pointed out, business rates raise around £25 billion a year, which is a significant contribution to our public services and funds, in turn, our doctors, nurses, policemen and policewomen and so on. The Government recognise that business rates represent a high pressure on small businesses, particularly for high street retailers. Rates are a fixed cost that cannot be avoided, irrespective of whether a business is profitable or otherwise, which is why we have undertaken a series of important measures.”
“He was right to highlight in his opening remarks the sheer size and importance of our small business community—there are 5.7 million small businesses, a figure that he cited—and the recent growth that we have had under the coalition Government and this Government. He has worked closely with the British Independent Retailers Association on various thoughts and proposals, some of which he put forward this evening and to which I shall respond in a moment. My hon. Friend is right that business rates are an important tax. When we consulted on business rates back in 2015 and considered the various alternatives, several different suggestions were made, such as turnover taxes, taxes on gross value added and so on.”
“Madam Deputy Speaker, may I say what a pleasure it is to see you in the Chair after the recess? It is also a pleasure to realise that I have an hour and 16 minutes in which to address my response to my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), but I may cut it down just a little bit to please the House. I thank my hon. Friend for bringing this important debate to the House tonight. It is entirely characteristic of him that such a debate is in his name, because throughout his parliamentary career he has been a strong advocate of business both across the country and, importantly, in his constituency.”
“To ensure that ratepayers benefit from this change at the earliest point, the spring statement 2018 included an announcement that the next revaluation would be brought forward by one year to 2021. Before I address some of the specific points raised by my hon. Friend, it is worth highlighting that, at autumn budget 2017, we brought forward the planned switch in the indexation of business rates from RPI to CPI by two years. This switch is worth £2.3 billion over five years, and the move to CPI is worth £4.1 billion in total by 2023. So once more, the Government are making a significant investment to recognise the pressures that rates introduce. My hon. Friend raised the specific issue—”
“The hon. Lady will probably be aware of the Chancellor’s speech at our recent party conference, in which he spoke quite strongly about the importance of a level playing field for online businesses that derive value in the United Kingdom and end up paying very little tax and about the international tax approach that we may look at taking unilaterally as a consequence. The most important thing overall is that the Government recognise that when it comes to high streets and the smaller retailers to which the hon. Lady refers, we should take measures to reduce the burden of rates, particularly among smaller businesses, in the way that I have described this evening. That makes bills fairer for everyone, as they more closely reflect the current rental values and relative changes in rents.”
“I thank my hon. Friend for his intervention. I know that the Valuation Office Agency is thorough in the way in which it conducts revaluations. It is an independent agency. However, I note the point that he has made, and if he would like to write to me or meet me to discuss it in the context of potential undervaluations, I am open to doing so. The points that my hon. Friend made included the idea of an allowance instead of the threshold. I assume that he wanted to apply that allowance to all retail businesses, and of course that would come with some cost. It would mean providing further additional relief to some companies or businesses that do not currently receive it.”
“He is focusing on one of the great challenges of our time for our high streets, which lie at the heart of our local communities. It behoves us all to do all we can to make sure they are live, whole and thriving.”
“He raised the issue of the confidence of small business retailers at the moment, and this is where I would broaden the debate’s scope a little by saying that it is not just bearing down on business rates that is the mission of this Government. We also provide the employment allowance and we are bringing down small business tax rates, with corporation tax having fallen from 28% in 2010 to 19% now and set to reduce further to 17% in time. A lot of small businesses, including retailers, will be benefiting from other measures such as fuel duty freezes. We have just announced that fuel duty will be frozen for yet another year—the ninth year in succession. In conclusion, let me again thank my hon. Friend for this very important debate.”
“I thank my hon. Friend for clarifying that point, and I am sorry that I misunderstood. He asked what the costs of compliance were under the current system and suggested that, if we changed it, we might be able to absolve ourselves from those costs and pass the benefits on to these businesses. That is certainly something that I am happy to look at and discuss with him. The overarching point is that we had a fundamental review of business rates in 2015, and many of the issues that my hon. Friend has raised were carefully looked at. My hon. Friend said that he recognised that change would take some time, and we are likely to be considering these matters over some reasonable period.”
“We will continue to keep this under review in terms of making sure we keep those cost pressures through the business rates system as low as they can be for our important high street retailers. Question put and agreed to.”
“My hon. Friend is absolutely right; high streets face a variety of challenges, of which business rates is but one. One of the greatest challenges they face is the change in how we are now shopping, with just over 18% of all retail now going online; that presents a huge challenge and that number is likely to increase in time. That tells us that high streets will need to transition, reinvent themselves, change and come up with new ways to serve their local communities and drive traffic into our high streets. We recognise the importance of making sure that all those things are looked at through the planning system and the reviews we are carrying out at the moment and through the important work we have been carrying out to date. I see this debate as being very important in that regard.”
“Mr Speaker, I echo your welcome to the hon. Lady. It is good to see her in her place. It is absolutely right that all companies in this country should pay a fair rate of tax. The Government recognise that for some businesses—typically online companies—the current international tax regime is not entirely appropriate. We are working with the OECD and the European Union to find a solution to that, and we have made it clear that in the event we cannot reach a position where we can move multilaterally, we will take unilateral action.”
“We are not only working with the European Union; we are also working closely with the OECD. At our persuasion, it has recently decided to bring forward that report to 2019. We are making progress at the multilateral level, but as I have clearly stated, we should all be in no doubt that we are prepared to take unilateral action, should that be appropriate.”
“When it comes to business rates, which are the heart of the taxes that my right hon. Friend referred to, we have done a great deal since 2016. We will by 2023 have provided reliefs totalling some £10 billion, much of which will fall as relief to the high street. I take on board the comments he has made. As with all taxes, we will keep business rates under review.”
“Let me be extremely clear to the House: this Government have an exemplary record on clamping down on avoidance, evasion and non-compliance. We have one of the lowest tax gaps in the entire world, at 5.7%, far lower than was the case under the Labour party. We have brought in a number of rules under the base erosion and profit-shifting project—a project of which we were in the vanguard. For example, tax deductions for interest expense came in in 2016 and yielded £3.9 billion by 2021, and the diverted profits tax that we introduced in 2015 has already raised some £700 million.”
“We have brought in a number of incentives to encourage employee share ownership, not least employee ownership trusts, which provide a capital gains tax advantage to those businesses selling shares into the trust and tax advantages to employees alike. We have also brought in enterprise management incentives, company share option plans, the save-as-you earn scheme and the share incentives plan as well.”
“I have set out a number of the schemes that the Government are moving forward with, and, of course, that has been with great success. In 2016-17, some 3 million employees entered into SIP share arrangements, 400,000 entered into arrangements under save-as-you earn with an average value of shareholding of some £5,000, and 3,500 employees were offered EMI schemes in that particular year.”
“We are proposing a new business-friendly customs model with the freedom to strike new trade deals around the world, a facilitated customs arrangement.”
“Mr Speaker, that is quite an introduction; thank you most graciously for your lovely comments—you will no doubt be injecting some zip into my marriage. The Government have been clear that when we leave the EU we will leave the customs union; this is a matter of fact. And when considering the end state, the Government will not be seeking to negotiate any form of customs union. The Government proposal will create a UK-EU free trade area which establishes a common rulebook for industrial goods and agricultural products. This will maintain common high standards in these areas, but also ensure that no new changes take place in future without the approval of Parliament. As a result, we will avoid friction at the borders and protect jobs and livelihoods, as well as meet our commitment to Northern Ireland.”
“Services are most certainly not less important than goods; they make up about 80% of the economy and we will retain greater freedoms in terms of being able to do deals around the world in that respect. But under this approach, the UK will apply its own tariffs and trade policy for goods intended for the UK and the UK’s tariffs and trade policy for goods intended for the EU. This option meets the UK’s strategic objectives for our future customs relationship with the EU.”
“The White Paper itself states: “The UK and the EU should agree a mechanism for the remittance of relevant tariff revenue. On the basis that this is likely to be the most robust approach, the UK proposes a tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK.” New clause 36 is consistent with the Chequers proposal and the White Paper, so the Government are content to accept it—”
“Friend the Member for Broxtowe, the vital importance of the EU as a trading partner that in turn supports the economy and jobs and prosperity throughout the UK. Let me now turn to new clause 36, tabled by my right hon. Friend the Member for Witham (Priti Patel), which would prevent the implementation of a new arrangement that would see HMRC accounting for duty collected by HMRC to the Government of another territory or country unless the arrangement was reciprocal. The Government have been clear in the White Paper that under their proposed facilitated customs arrangement, the UK and the EU would agree a mechanism for the remittance of relevant tariff revenue. The UK proposes a reciprocal tariff revenue formula taking account of goods destined for the UK entering via the EU and of goods destined for the EU entering via the UK.”
“I have already set out that the UK leaving the EU customs union is a straightforward legal consequence of leaving the EU, so the Government must reject these amendments, as well as amendment 1. The same applies to other amendments before us today: new clauses 1, 3, 4, 11 and 12 and their various consequential amendments, as well as amendments 8, 9, 12 and 14, but that does not mean that we will not seek to enter into a business-friendly and pragmatic arrangement that maintains trade that is as frictionless as possible between the UK and the EU27 as part of our future partnership with the EU. That is because this Government fully recognise, as was set out so eloquently by my right hon.”
“I thank my right hon. and learned Friend for that intervention. I have very little time, but I will come on to his point. The main point is that one has to read paragraph 17a of the White Paper in its entirety to grasp its full meaning, rather than take one part of it. I will now address the amendments before us today. New clause 1 and consequential amendment 2, as spoken to initially by my right hon. Friend the Member for Broxtowe (Anna Soubry), would establish a negotiating objective for the UK to maintain its participation in the EU customs union and make the commencement of parts 1 and 2 of the Bill conditional upon the outcome of those negotiations.”
“I will not give way, no. [Hon. Members: “Give way!”] I have a lot to cover, and I will not give way. Amendment 72, tabled by my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin), seeks to ensure that clause 31 cannot be used to form a customs union between the UK and the EU without primary legislation. As I have set out, the Government have been clear that as we leave the European Union, we will also leave the EU’s customs union, so the Government have no objection to this enhanced level of parliamentary security— [ Interruption. ] I have four minutes remaining, but I will take one intervention if it is brief.”
“It is important for our ability to continue as one of the world’s great trading nations after our departure from the EU and to accommodate our future customs arrangement within our future economic partnership with the EU.”
“It is on this basis that the Government have brought forward amendments 75, 76, 79, 81 and 23, which apply the made affirmative procedure to the powers under clauses 30, 42 and 47—the powers to make general provision in relation to import duty and to deal with retained EU VAT and excise law. Clause 25 permits disclosures for customs duty purposes and makes it clear that disclosures that would contravene the Data Protection Act 1998 are not permitted. We accept the Scottish National party’s amendments 33 and 34, which seek clarity in that regard. Finally, we have had a full, robust and comprehensive debate today, as is entirely appropriate for a Bill of such importance.”
“This would limit our ability to appropriately consider our future VAT policy, and for that reason we reject it. The Government are also making an amendment to a schedule to the Finance Act 2008. Amendment 83 is consequential on the new customs framework provided for in the Bill and is necessary to ensure certain excise penalties remain in place on EU exit. I now wish to turn briefly to the powers in the Bill. It is critical that we have these powers to allow us to respond flexibly, but we accept that in some cases it may be considered proportionate to apply the made affirmative procedure, and I am grateful for the discussion that I have had with my hon. Friend the Member for Eddisbury (Antoinette Sandbach) in this regard.”
“Friend the Member for Tewkesbury (Mr Robertson), would be to ensure that Northern Ireland would not form part of a separate customs territory from Great Britain. This new clause is a straightforward statement of Government policy. It ensures that the Government will not act in a manner incompatible with the commitments made in the joint report of December last year, when we committed to protecting the constitutional integrity of the United Kingdom, as well as to turning the joint report commitments into legally binding form. The Government also accept this new clause. I shall turn now to our future VAT arrangements with the EU. New clause 2 seeks to establish a negotiating objective to maintain the UK’s participation in the EU VAT area.”
“The negotiating strategy of the UK Government is to seek reciprocity in this respect, and that is set out very clearly in the White Paper. Importantly, amendment 72 does not interfere with the Government’s purpose. We have no objection to the principle behind the amendment and we therefore accept it. Amendment 73, tabled by my hon. Friend the Member for South Thanet (Craig Mackinlay), will remove a specific power that will enable HMRC to make regulations covering the application of VAT to goods in circumstances where we reach a customs union agreement with other customs unions or territories under clause 31. The Chequers agreement does not propose such an arrangement with the European Union as part of the future economic partnership, so the Government accept this amendment. The effect of new clause 37, tabled by my hon.”
“Thank you, Mr Speaker. The instincts on our side are often divided, but not on this matter. We are at one in accepting amendment 33, as well as amendment 34, tabled by the Scottish National party.”
“We would also have a common rulebook, which means that for regulation pertaining to goods and agricultural products, we would not, at least initially, have any regulatory misalignment between ourselves and the EU27. The significance of that is that we will therefore not require border and customs arrangements between ourselves and the EU27, and indeed between Northern Ireland and the Irish Republic.”
“In terms of the cost of the kinds of frictions we might have with some of the scenarios that have been conjured up this afternoon, the head of HMRC tallied the cost of the additional customs declarations that would have to be entered into as a consequence of a border between ourselves and the EU27 at about £20 billion a year. Those are not insignificant costs to business, which the Government most certainly recognise. The model we are now looking at is a facilitated customs arrangement, where we will act effectively as the agent for the European Union at our borders when it comes to goods coming through the UK into the EU. We will be collecting the European Union’s tariff at that point. For goods going directly into the United Kingdom for consumption or end use in our jurisdiction, we would apply the UK tariff at that point.”
“While Members made extremely valid and well-put points about the downsides of an arrangement in which we perhaps have no deal and there is a hard border between us and the EU27, I am not so sure that the merits of the proposition that the Cabinet agreed at Chequers have come through. As we all know, the main problem with a hard border or even with the maximum facilitation arrangements is that we would have a border between ourselves and the EU27. We would have various degrees of friction that we would seek to reduce under the max fac model through various facilitations and the use of technology, but we know there would be costs associated with that kind of arrangement. That is why at the Chequers meeting we wisely moved towards something that works much better in that respect.”
“I will certainly leave two minutes for my hon. Friend the Member for Wimbledon (Stephen Hammond). It is a pleasure to serve under your chairmanship again, Mr Streeter. It is also a pleasure to follow the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). I believe we might be facing each other next week on another occasion. There seems to be a sense that something is happening on Monday or Tuesday next week. I also congratulate my hon. Friend the Member for Wimbledon on securing the debate. As many have suggested, it might be worth me injecting as much clarity as I can on the Government’s position.”
“I point the hon. Lady to her question about the White Paper. There will be more detail to come on just those kinds of questions, and of course much of this will remain to be negotiated. Our estimate is that the vast majority—well in excess of 90%—of goods coming in could be charged directly at the border as an EU good, or would be non-tariff anyway under both EU and UK arrangements, or face the UK tariff accordingly. A very small proportion might fall into the category to which she refers.”
“The fact that we have a common rulebook between ourselves for goods and agricultural products means that the issue of regulatory barriers, which might otherwise be in place for us in doing FTAs and bringing goods into the UK that might then go on to the European Union, would also be substantially resolved.”
“We are, of course, extremely cognisant of that risk, but once again, it applies if we need border and customs arrangements in place at the port of Dover, Holyhead and the other ports that have been mentioned. Under this model, that would clearly not be the case. My hon. Friend the Member for Wimbledon also made a point about free trade deals and how the approach of the facilitated customs arrangement would facilitate them. Most importantly, as distinct from being in “the” customs union, or in a customs union with the customs union, we would not operate a common external tariff, so we would be free to set our own tariffs.”
“We have made it clear that we are looking in the negotiations to ensure that we have the best of the arrangements that are there at the moment, in terms of systems and making our VAT interactions as smooth as possible, albeit we will look to control rates of VAT. In the recent Budget the Chancellor commented on the abolition of acquisition VAT and the move towards import VAT. We recognise that there are certain cash-flow impositions on the part of business that we will want to take into account. A number of hon. Members rightly mentioned ports, and I think a couple specifically suggested that a two-minute delay could lead to a 17-mile tailback at Dover.”