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 entered into negotiations at Ukraine’s request, as part of an exercise it is undertaking to amend its treaties with a number of European partners. The agreements that Ukraine entered into shortly after independence provided for broad exemptions from source-state taxation. It wishes to change that to enable it to tax interest and royalties arising in Ukraine and to raise the rate at which portfolio dividends can be taxed. Ukraine has chosen to do that on a consistent basis across its network as it seeks to reset its position. As such, United Kingdom businesses will not be disadvantaged as compared to their competitors in other jurisdictions. The new protocol also improves the position of UK businesses in receipt of dividends from Ukrainian subsidiaries.”
“The new agreement compares favourably with those that Belarus has agreed with other countries since its independence. For example, we have agreed a withholding tax rate of 5% on dividends, while preserving our right to tax dividends from real estate investment trusts at 15%. We have agreed a 5% withholding tax rate on interest, but with an important exemption for lending by banks. The agreement also contains the most up-to-date provisions to guard against treaty abuse, the latest OECD exchange of information article, and a provision for mutual assistance in the collection of tax debts. Those features strengthen both countries’ defences against taxation avoidance and evasion. The protocol with Ukraine amends our existing 1993 DTA.”
“I will briefly say a few words about each agreement. Belarus is the last country still applying the UK’s 1985 double taxation agreement with the former Soviet Union. When it enters into force, the new DTA will effectively terminate that old agreement. The new DTA with Belarus will mean that the UK has bilateral DTAs with all the countries that once made up the USSR. The USSR agreement provided for broad exemptions from source-state taxation. Belarus takes a different approach to its bilateral DTAs, seeking to preserve taxing rights in respect of dividends, interest and royalty payments that arise there. While the UK takes a different approach, we recognise that states will want to renegotiate treaties to reflect their own circumstances, and nothing would be gained by refusing to engage with Belarus’s wish to replace the USSR DTA.”
“Mr Robertson, it is a pleasure to serve under your chairmanship for, I think, the first time. It is nice to be able to do that, and it is also nice to be in the presence of my right hon. Friend the Member for Maldon, who is the chair of the all-party parliamentary groups on Belarus and on Ukraine. I know he has important matters that he wants to discuss with the Committee imminently. I will speak to both orders before the Committee. The first gives effect to a first-time double taxation agreement with Belarus, and the second contains a protocol amending our existing agreement with Ukraine. DTAs remove barriers to international trade and investment and provide a clear and fair framework for taxing businesses that trade across borders. In doing so, they benefit business and the economies of the countries signed up to them.”
“Thankfully, as he suggested, that is not a matter for me but for Ministers in the Department for International Trade, where I know he will make representations. Question put and agreed to. Resolved , That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Belarus) Order 2018. DRAFT DOUBLE TAXATION RELIEF AND INTERNATIONAL TAX ENFORCEMENT (UKRAINE) ORDER 2018 Resolved , That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Ukraine) Order 2018.— (Mel Stride.)”
“I entirely agree with him about the importance of developing relationships with Belarus for the reasons he gave—the geopolitical reason of its particular leaning towards Russia, and the value of trade with our country in building relationships and encouraging things such as privatisation. I also agree with the important points he made about Ukraine. On corruption, one of the benefits of double taxation agreements is that there are specific measures in place to ensure that we can exchange information on tax matters, wherein a lot of corruption often lies. That is a positive aspect to his point. My right hon. Friend finished by rightly raising the need, post Brexit, to increase trade with Ukraine and Belarus, and with other, similar countries.”
“There are a couple of points on the timing of the orders and why it has taken quite a considerable time for them to come before the Committee. We have now negotiated DTAs with all of the Soviet successor states. We negotiated with Belarus in 1995 and in 2011, but the political situation and EU sanctions meant that things stalled. The situation has now improved, so we have successfully renewed our efforts. Ukraine has not yet ratified the treaty, so the fact that there may have been a delay between the protocol and the order—hopefully—going through this afternoon should not have any impact. I turn to the valuable contribution from my right hon. Friend the Member for Maldon, who shared with us his detailed experience of both Belarus and Ukraine.”
“I am not aware, certainly within my part of the Treasury, of there being a particular list of such matters that are coming forward. Of course, such things are always subject to the timetabling of the business of the House of Commons, as Members will know. In the context of Belarus, the hon. Member for Oxford East raised the permanent establishment arrangements around the temporal threshold—the 12 months—in respect of construction sites, and she asked the perfectly reasonable question of why that was the case. I am informed that it is a standard OECD-based rule. [ Interruption. ] She is looking at me slightly quizzically, which is perfectly in order. If she would like some more information, I am very happy to dig a little deeper on her behalf outside the Committee.”
“I thank the three contributors to this important debate. I turn to the matters raised by the hon. Member for Oxford East, some of which were in unison with those raised by the hon. Member for Glasgow Central. First, on the information provided in advance, I would be happy to take a representation from the hon. Ladies on the specific points that it might have been useful to have had included and perhaps use that as the starting point for considering the more general point they both made. It is probably worth pointing out that when we know that such legislation is coming forward, I am always happy to take any questions by way of letter or to meet and discuss the legislation in advance. I will certainly look into HMRC and its forward programme, as it was described.”
“In the last Budget we abolished stamp duty for first-time buyers for the first £300,000 of a property’s value up to £500,000 in total. That has meant that 95% of first-time buyers have paid less stamp duty and a full 80% of first-time buyers have paid no stamp duty at all.”
“Some 69,000 individuals have already benefited from this vital tax relief and over 1 million will do so over the coming five years. We do not have disaggregated data specifically for Essex, but I can tell my hon. Friend that within the south-east 12,900 individuals have benefited from first-time buyer tax relief.”
“As I outlined to my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) who asked the preceding question, in the south-east 12,900 first-time buyers have benefited from this relief, of whom 9,000 purchased a property of a value of between £300,000 and £500,000 in total.”
“Her Majesty’s Revenue and Customs has taken a variety of steps to reduce overpayments of tax credits including real-time income data in-year, guidance that is very clear on these matters, and of course providing appropriate contact routes with HMRC so that those who have changed circumstances can indicate that to our tax authorities.”
“HMRC is doing a great deal, as I have already outlined to the hon. Gentleman, in terms of making sure that the correct information is provided. Overpayments do not solely emanate from HMRC; there is of course customer error and there can be negligence or a failure to report a change of circumstances. But I can assure the hon. Gentleman that HMRC is always sympathetic and careful in its approach to anybody in the kind of situation he described.”
“The Government have brought in more than 100 measures to clamp down on tax avoidance, evasion and non-compliance since 2010, and the associated powers that HMRC has had in that respect. We have protected and brought in £175 billion across that period, which is substantially more than we invest in our national health service every year.”
“I am pleased to be able to inform the hon. Lady that we have been investing heavily in HMRC to clamp down on the issues she has raised—we are talking about some £2 billion since 2010. We have 23,000 staff in HMRC engaged in that purpose and we consequently have about the lowest tax gap in the entire world, at 6%, which is far lower than it was in any year under the previous Labour Government.”
“We are looking very closely at this policy area, not least in respect of the Matthew Taylor review of the different ways in which individuals choose to work. The Government’s overriding objective is to make sure that the way an individual works is reflected in the way they are taxed, and that they are taxed properly.”
“My hon. Friend raises an important point. I can reassure him that HMRC has written to a total of 800,000 people to inform them of the issue he has raised, which is also set out and made clear on the very first page of the child benefit application form. I can also reassure him that we will review this policy area in the current period to see how we can make changes going forward.”
“I am very pleased to inform my hon. Friend that we have raised and protected £175 billion since 2010 by clamping down on evasion, avoidance and non-compliance. That comes as a direct result of investing in HMRC to the tune of £2 billion, and has resulted in the lowest tax gap in the world.”
“My hon. Friend talks about complexity. The Office for Tax Simplification is looking into the way in which inheritance tax and the regime operate. Changing the way that tax reliefs operate in the way that he describes would add very significant cost. However, we do, of course, keep all taxes under review.”
“I am clearly not going to speculate about future tax changes from the Dispatch Box this morning, but I point out that we have frozen fuel duty for eight successive years at a cost to the Exchequer of over £40 billion.”
“The answer to the hon. Lady’s question is that people should clearly continue to make appropriate changes to their tax returns. I reassure her and the House that Treasury Ministers and HMRC officials are working closely across Government—particularly with the Home Office—on the issues that she raised in order to ensure that we get these matters right.”
“It is an important principle that applies to any Government of any political composition. The concept is, of course, not new. My right hon. Friend quoted the former Home Secretary Jack Straw, whose own White Paper on freedom of information concluded: “Now more than ever, government needs space and time in which to assess arguments and conduct its own debates with a degree of privacy.””
“Friend the Chancellor of the Duchy of Lancaster said in his opening speech, any papers or analyses created for the Cabinet are rightly confidential. That is a well-established principle. Ministers must be able to discuss policy issues at this level frankly and to debate the key matters of the day within a safe space. There is a real risk that if details of Cabinet Committee discussions were made publicly available, Ministers would feel restricted from being open and frank with one another. The quality of decision making would be diminished, the advice of officials would be exposed in the most unreasonable manner, the tendency to make oral decisions would be amplified and there might even be communication via post-it notes, as my right hon. Friend suggested. I say this not in a partisan manner.”
“This has been a wide-ranging debate. We have covered customs models and second referendums. We have covered the single market. There has even been a spirited attempt by my hon. Friend the Member for Yeovil (Mr Fysh) to challenge the very orderliness of the motion, and the Chair. He is a braver man than I am. We have heard the hon. Member for Bootle (Peter Dowd) extol the virtues and the leadership qualities of Mickey Mouse, with which I am sure he is most familiar on his side of the House. However, I wish to bring Members back to the important matter of the motion, which calls for “all papers, presentations and economic analyses” presented to “the European Union Exit and Trade (Strategy and Negotiations) Cabinet sub-committee, and its sub-committees” to be laid before the House. As my right hon.”
“Friend the Member for Worcester (Mr Walker), has given evidence before Westminster Committees on 10 occasions and to devolved Committees on six occasions, and looks forward to attending the Exiting the European Union Committee once again next week.”
“Whether through debates on primary legislation in this place, Select Committee inquiries, statements to the House, written statements or parliamentary questions, Parliament has been kept updated and informed, and it will continue to be given ample opportunity to scrutinise the negotiations as they progress. My right hon. Friend the Secretary of State for Exiting the European Union has made 10 oral statements in the House, Ministers from the Department for Exiting the European Union have made 84 written ministerial statements to both Houses and the Department has answered more than 1,700 parliamentary questions from Members and peers. Ministers from the Department have also appeared before a wide range of Select Committees in both Houses on 34 occasions. The Under-Secretary of State for Exiting the European Union, my hon.”
“I assure the hon. Lady that the European Union (Withdrawal) Bill, which has gone through the House of Lords, will, in due course, return to this House for further consideration in the normal manner. The concept of which I have spoken has been accepted by successive Governments and Oppositions. It was explicitly recognised in the terms of the last motion for an Humble Address tabled by the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), which called for documents to be made available on a confidential basis—a principle from which he appears now to have departed. By contrast, this Government have been consistent in respecting their obligations to Parliament.”
“It might have escaped the hon. Lady’s attention, but we announced this morning that there will be a further thoroughly comprehensive White Paper setting out all these matters, with further detail on the customs arrangements we may be seeking going forward. On customs in particular, I have in this House led many debates on behalf of the Government. I have led the Taxation (Cross-border Trade) Bill through a Ways and Means debate, a Second Reading and four days in Committee. HMRC officials have sat before numerous Committees to provide evidence on the Government’s position. Before that, the Government published a customs White Paper, to which the hon. Lady referred, on our future customs arrangement.”
“The hon. Lady raises an important issue about the security of Northern Ireland, and the first point I would make is that we are absolutely crystal-clear that there will be no hard border between Northern Ireland and the Republic of Ireland for the very reasons she raises. On her specific question about potentially receiving what would be some very sensitive information, albeit redacted, that would be best taken up with the Secretary of State for Northern Ireland, rather than by me making any specific comment from the Dispatch Box.”
“It is not a motion designed to assist our country at this critical time in our history, to secure our future outside the European Union or to help Parliament to fulfil its duty to our people. No, this is a motion about something rather less noble. It is a motion designed purely for the purposes of party politics and it should be seen for what it is. We should reject this motion today. Question put.”
“We are focused on delivering on the referendum result in the national interest, and that means having a stable and secure policy-making process inside the Government. It would not therefore make sense, and would go against the national interest, to release information that could in any way undermine the UK’s position in our negotiations, a point the House has previously recognised. To provide details of the confidential discussions between Ministers regarding our negotiating strategy to those in the EU with whom we are negotiating would be a kind of madness that surely even the Labour party would find a stretch. We have shown our willingness to share sensitive information with Parliament, but we will not do so to the detriment of our national interests. Let us see this motion for what it truly is.”
“My right hon. and learned Friend will know that the joint report issued in December after the phase 1 negotiations covers exactly the issues to which he refers, and of course the Government will entirely stand by and remain committed to the commitments they made in that statement. The Government have this morning committed to publishing a further White Paper before the June European Council. This will communicate our ambition for the UK’s future relationship with the EU in the context of our vision for the UK’s future role in the world. We have always been clear that we will not provide a running commentary on the internal work being carried out in the Government on these highly sensitive and vital negotiations.”
“Importantly, the changes remove a barrier to UK companies claiming benefits in respect of dividends from Uzbekistan created by the introduction of a dividend exemption regime in the United Kingdom. That will enhance the investment climate for UK businesses in Uzbekistan, to the benefit of both countries. The orders enhance our commitment to tackling international tax avoidance and evasion. They also strengthen the integrity of our network of DTAs and remove barriers to investment by UK businesses. I commend the orders to the Committee.”
“To give effect to DTAs, the Swiss Government transpose them directly into domestic law, so it is much more straightforward for them to amend their law by amending the existing DTA, rather than by adopting the MLI separately. As a result, we agreed with Switzerland to implement modifications that would have been made by the MLI through this order. For Uzbekistan, the order implements many of the provisions available under the MLI, including minimum standards on preventing treaty abuse and improving dispute resolution. In addition, the order provides for a general update to the existing text to reflect changes to the OECD model tax treaty and the domestic laws of the UK and Uzbekistan.”
“To ensure complete clarity for taxpayers, HMRC will prepare consolidated versions of treaties showing how they have been modified by the MLI and will publish those in good time before the modifications take effect. Where possible, it is our intention to agree those texts with our treaty partners. The order ensures that the UK can use the MLI to implement our commitments under the BEPS project and that our DTAs contain robust and proportionate defences against tax avoidance to the benefit of the UK and our treaty partners. Let me now turn to the other two orders, in respect of Switzerland and Uzbekistan. The Switzerland order amends our existing 1977 DTA.”
“Following consultation, the UK proposes to adopt those provisions that are a proportionate and effective defence against the abuse of tax treaties, in addition to the minimum standard provisions. We intend to reserve against provisions that have a disproportionate effect on commercial transactions or that are unnecessary in the light of other measures taken to address the misuse of the international tax framework. At the time of signing the MLI, the UK submitted its list of reservations to the OECD, which was published on the OECD’s website. Some minor amendments to that list have also been published on gov.uk. Those amendments relate to bilateral arrangements that have been agreed since the submission of our original list of reservations.”
“The group adopted the text of the MLI in November 2016 and it has now been signed by 78 jurisdictions, including the UK. It is in the process of being ratified by those jurisdictions. Individual DTAs will be modified by the MLI only if both jurisdictions have signed it and have given notice that they wish the DTA to be covered by it. The UK intends the MLI to cover all our DTAs that are agreements under international law and that do not already include provisions that we want from the MLI. Except in relation to certain minimum standards, parties implementing the MLI are also permitted to reserve against provisions. If either party to the DTA has reserved against an MLI provision, that provision cannot modify the DTA.”
“They develop the UK’s economic relationship with other countries and vice versa. DTAs provide critical certainty for cross-border firms and enhance co-operation in tax matters to stimulate economic growth and prevent tax avoidance. The OECD/G20 base erosion and profit shifting project recommends a number of changes to DTAs, including the introduction of minimum standards to prevent tax avoidance by those who abuse tax treaties, and measures to improve the resolution of tax disputes. In addition, it recommends action to prevent so-called hybrid mismatches and the avoidance of permanent establishment status. To enable those enhancements to DTAs to be made as soon as possible, more than 100 countries in a group chaired by the UK drew up the multilateral instrument.”
“It is a pleasure to serve under your chairmanship again, Mr Hosie. The base erosion and profit shifting—BEPS—order brings into effect the multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting, which is commonly and thankfully referred to simply as the multilateral instrument. The orders in respect to Switzerland and Uzbekistan amend our existing double taxation agreements with those countries. All the instruments bolster the UK’s network of international tax arrangements and deepen our commitment to avoiding double taxation while preventing tax evasion and avoidance. Double taxation agreements—DTAs—are bilateral agreements between the UK and other countries that aim to ensure that profits, income and gains are taxed only once.”
“The general response to that and like matters is that the Government do not believe that they would have any major material impact on what happens with the taxation of revenues from one country coming back into the United Kingdom. Of course, those measures would bring with them various administrative burdens on business, which the Government always seek to minimise where possible. The hon. Lady raised the issue of consultation on digital taxation, slightly at a tangent to the matter at hand. I would welcome her intervention if I have misunderstood her, but I think she was referring to our consultation on the taxation of businesses making profits via digital platforms.”
“In some cases, it is not necessary, as our treaty contains substantial provisions. Our first-time DTA with Colombia would be one example. The hon. Lady asked whether Switzerland taking these tax changes directly into domestic law, rather than less efficiently through the MLI, was a unique circumstance. I believe that it is relatively unique—my officials have just nodded. It is something of an unusual situation. That is the reason that both countries have decided to approach the matter in this way. The hon. Lady mentioned permanent establishments and various related issues, asking why we were reserving against those particular matters.”
“Lady after the Committee and look at them in more detail. On advertising and the reservations that we might be seeking from the MLI, we have provided information on the OECD website and subsequent changes appeared on the gov.uk website, so the information is in the public domain. We will be required to provide that information to the OECD some four months before this measure comes into effect and it in turn will advertise the reserved elements that we decide on at that time. The hon. Lady asked why we do not include all the DTAs. She is absolutely right that the UK has a large number—from memory, I think it is around 130—and about 121 will be potentially covered by this measure. The answer is that, in some cases, the DTAs largely conform to the changes that would be introduced were they to be subject to the MLI.”
“I thank the hon. Member for Oxford East. It is not long since we jousted and debated, and it is good to be back doing exactly that. I welcome the overarching support for the MLI in her early remarks, particularly in respect of tax avoidance and the double taxation avoidance measures, although I understand that she has some issues around arbitration, which I will come to in a moment. I too have fond memories of clause 32 of the Finance Bill last year, which provided the powers under which the MLI is being brought forward for consideration. The hon. Lady posed a large number of questions and I will attempt to answer as many as I can—I was busy thinking about the answers to some when the next two or three arrived in train, so if I do not cover everything, I would of course be very happy to take a representation from the hon.”
“We have debated mandatory arbitration before. The essential point is that, in order to enter into a DTA, both sides have to agree that it is an appropriate treaty to enter. Both sides have to be comfortable in the round with it. There is no circumstance in which the United Kingdom could therefore force a country against its will to enter into agreement with mandatory binding arbitration.”
“I thank the hon. Lady for that clarification. I take this in two parts. These are different situations. When it comes to taxation of profits derived from digital platforms, be they social media, search engines or online marketplaces, the critical thing is to ensure that we tax the value that accrues to the interaction of consumers with those marketplaces. We are working with the OECD and the European Union, as the hon. Lady pointed out, to come up with an appropriate way to address that particular challenge of the current international taxation regime. As to the Chancellor’s remarks about whether we might go it alone or have to wait for America, I am not entirely sure that he said what was reported. That is the information I received, although I did notice those comments in the press, as did the hon. Lady.”
“Resolved, That the Committee has considered the draft Double Taxation Relief (Base Erosion and Profit Shifting) Order 2018. DRAFT DOUBLE TAXATION RELIEF (SWITZERLAND) ORDER 2018 Resolved, That the Committee has considered the draft Double Taxation (Switzerland) Order 2018.—( Mel Stride. ) DRAFT DOUBLE TAXATION RELIEF AND INTERNATIONAL TAX ENFORCEMENT (UZBEKISTAN) ORDER 2018 Resolved, That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Uzbekistan) Order 2018.—( Mel Stride. )”
“The Government’s view is that mandatory binding arbitration is a very useful element of these agreements. In the absence of that, the process undertaken might be ultimately inconclusive. In order to ensure that these agreements work efficiently, we believe there is great merit to that approach. I lastly turn to parliamentary scrutiny. Matters reserved against will be for the Government to determine in time although, as I have indicated, we have already put out preliminary suggestions of what we will do. As time goes forward, this or any other Government may decide to remove some of those reserved powers. It is down to this Committee and this moment to take a decision on whether in the round all those possible changes are agreed to or not. On that basis, I urge that we move forward with the recommendations. Question put and agreed to.”
“Together, they will transform new home creation for years to come.”
“Housing stock is on track to be higher than ever before during the upcoming decade, and the Government are committed to supporting those people who aspire to make their dream of home ownership a reality sooner rather than later. That is why measures such as the stamp duty relief for first-time buyers are so important. More than 95% of first-time buyers paying stamp duty will benefit from the relief. The Government are committed to ensuring that everyone in this country can afford to buy a home if they choose to do so, and the Government have taken steps to make home ownership a reality for many more people. Targeted policies such as the first home buyers stamp duty relief are supported by other robust, ambitious and groundbreaking reforms to housing policy in the United Kingdom.”