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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“Taking into account the respective changes, we will raise £4.6 billion over the forecast period as a consequence. My point is that it is simply not right to focus only on the declining part of the equation—the reduction in the banking levy charge—and not on the fact that we are raising more as a consequence of the 8% surcharge and the increased profitability of banks on our watch.”
“Taxpayer confidentiality is rightly a core principle for trust in our tax system and HMRC does not publish details of the amount of tax paid by any individual business. While the Government continue to consider measures to support transparency over businesses’ tax affairs, we must balance that with maintaining taxpayer confidentiality in order to maintain public confidence in our tax system.”
“We have heard the argument this afternoon that we should reintroduce a tax on bankers’ pay. One of the aims of the changes to bank taxation announced in 2015 and 2016 is to ensure a sustainable long-term basis for taxing banks, based on taxing bank profits and the bank levy. By contrast, the bank payroll tax referred to in new clause 3 was always intended as a one-off tax. Reintroducing it would be ineffective and unsustainable compared with the package of banking tax measures that we have introduced. Even the last Labour Chancellor pointed out that it could not be repeated without significant tax avoidance. Opposition Members also propose that HMRC should publish a register of tax paid by individual banks under the levy.”
“Perhaps we can get into the nitty-gritty of this offline. The average revenue from the bank levy between its introduction in 2011 and 2015-16 was around £2.6 billion. As a result of this package, however, yield from the surcharge and the levy in 2022-23 is forecast to be £3.2 billion. By 2023, as I have said, we will have raised around £44 billion in additional bank taxes since the 2010 election. Opposition Members have also suggested that our bank levy is set at a low level compared with other countries. In fact, not all financial centres have a bank levy. The USA, for example, chose not to introduce one at all, and while several EU countries introduced bank levies following the financial crisis, it is not possible to make direct comparisons between these levies as the rules for each are different.”
“I just do not accept that. This goes back to my point about the balance of measures that we are taking. The Opposition are understandably focusing on the bank levy, which is indeed declining over time, but I point to the additional 8% surcharge, which is 8% more on corporation tax than other non-banking businesses are expected to pay. As I have said, the banks are also not permitted to carry forward interest rate charges to the same degree as other businesses, and they are not allowed to offset against tax the compensation payments that they have been making. All those things add up to additional tax and by 2023 will have raised an extra £44 billion since 2010 compared with what would have been raised from non-banking businesses.”
“The limitation would apply only where the group contains a PFI company that has previously made profits that are deemed to be “excessive,” by reference to a statutory test. The changes proposed in the amendments are convoluted. As I have said, it would fall to the public bodies holding the PFI contracts to pay the extra tax resulting from these changes. But even if one could impose additional tax liabilities on PFI providers, this would not be a sensible way to proceed. It would be unlikely to change the tax paid by the PFI company, but would instead sometimes penalise other companies in the same corporate group. More likely, groups would simply restructure to avoid the tax.”
“Instead, they borrow money to finance projects and earn a return on them, in exactly the same way that many other businesses do. It is simply not possible to bring PFI groups within the scope of the bank levy. Most of the design of the tax could not be applied to such groups. The changes proposed by amendments 3 and 4 also would not work as a windfall tax. The last Finance Act introduced corporate interest restriction rules to limit the amount of interest expense that a corporate group can deduct against its taxable profits. The amendments propose modifying those rules by limiting the ability of corporate groups to carry forward and offset their unused interest allowance against future profits.”
“There would be extra cost for the taxpayer whenever the Government next needed to engage the private sector. Secondly, as the hon. Lady knows, PFI contracts—she said that she has read many—are long-term agreements that typically include anti-discriminatory clauses. This means that when legislation is passed that targets PFI companies without applying to similar projects undertaken by other companies, the tax owed can be recovered from the procuring authorities. A windfall tax would therefore only be a tax on local authorities, NHS trusts and Government Departments that hold such contracts, which I am sure is not the outcome she seeks. Amendments 1 and 2 propose that the bank levy could be extended to PFI groups, but PFI groups are not banks.”
“Member for Walthamstow argues that a windfall tax on what she sees as the excess profits of PFI companies would help to fund public services; I am clear that it would not. A retrospective windfall tax would instead do damage to any private investment in public services and would tax local authorities and NHS trusts rather than the providers it is intended to target. Even aside from those flaws, her amendments would not work as she intends, and I will set out why in more detail. First, a windfall tax would cost this and future Governments who try to sign contracts with businesses, whether in PFI or in another area. This country has a hard-won reputation for tax certainty, and that important principle would be undermined by a retrospective tax targeting businesses that have legitimately entered into a contract with the Government.”
“There are approximately 700 operational projects that originated under the initial PFI, representing £60 billion in capital investment. The vast majority of those projects were signed between 1997 and the 2010—620, or 86%, of all PFI projects in the UK were signed under the last Labour Government. This Government have taken action to ensure that PFI contracts deliver better value for money for the taxpayer. That is why in 2011 we introduced the operational public-private partnership efficiency programme, which has reported £2 billion of savings. Even where it is not possible to find savings in a project, we are working with Departments and procuring authorities to improve day-to-day effectiveness and management of contracts. We have also made improvements through PF2 to offer taxpayers better value for money on new projects. The hon.”
“It is important to legislate for such changes now in order to give UK banks certainty on their tax position so that they can plan effectively for the future. The changes in clause 33 and schedule 9 complete a package of measures that raises additional revenue from banks in a way that delivers a tax regime that is more sustainable, more aligned with regulation and more supportive of the competitiveness of UK financial services. We should pass them without amendment. In her amendments, the hon. Member for Walthamstow (Stella Creasy) calls for a windfall tax on private finance initiative companies. I pay tribute to my hon. Friend the Member for Stevenage (Stephen McPartland), who outlined his vigorous work in this area in support of his constituents.”
“As my hon. Friend the Member for Croydon South (Chris Philp) pointed out, as we have reduced the overall level of corporation tax from 28% to 19%—corporation tax, of course, applies to banks as it does to non-banking businesses—we have seen the tax take increase by some 50%. We have actually been raising more revenue as a consequence of those changes. Finally, new clause 5 would require the Government to publish further analysis of the impact of the Bill’s bank levy re-scope. The Government have already published a detailed tax information and impact note on the proposed changes, and we have published information, certified by the OBR, on the overall Exchequer impact of the 2015 package of measures for banks.”
“The point was made that the OBR suggested that prices may increase by 0.3% as a result of our SDLT measure, but that observation is based on that measure alone and does not take into account the supply-side measures we are introducing. Amendments 10, 11 and 12 relate to taxis and the vehicle excise duty supplement.”
“Given the limited time remaining, I intend to focus most of my remarks on the amendments and new clauses that have been spoken to in this debate. I shall begin with new clauses 7 and 8, which seek reviews of the operation of the SDLT exemption for first-time buyers. As we know, housing is one of the great challenges of our age. We all recognise—we certainly have done in this debate—the importance of the supply side, which is why my right hon. Friend the Chancellor, whom I am delighted to see on the Treasury Bench, made such important announcements about funding for more housing. We can now look at hitting 300,000 new build homes in the next decade.”
“However, there is no need for that now, as information is available on that. Time does not allow me to explain what that is, but I will speak to him after this debate, and on that basis, I hope that he will not press his amendment. I also take on board his comments about dormant companies and pension fund arrangements, but we do have to look to HMRC to make those judgments so that we ensure that these scams are prevented.”
“Friend the Exchequer Secretary will shortly be meeting representatives from the London Taxi Company and that he will be furthering those discussions with them. In the one minute remaining, perhaps I could turn to new clause 10, which calls for a review of the consequences of not backdating the refund of VAT in respect of the Scottish Fire and Rescue Service. The Chancellor made it clear in the Budget that, after lobbying from our Conservative colleagues in particular, we would allow such refunds going forward. In 2012, when the Scottish Government entered into those arrangements, they did so knowing what the VAT consequences would be, but we are taking action going forward. Finally, I understand the desire of the right hon. Member for Twickenham (Sir Vince Cable) to have information on the effects of increases of income tax by 1%.”
“If we look at bringing forward this exemption, the important thing is that we should look solely at that element that relates to low-emission vehicles, rather than applying it to all taxis, as indeed amendments 10, 11 and 12 do, as tabled by the hon. Member for Ilford North (Wes Streeting). However, having listened to the representations from my hon. Friends the Members for Hornchurch and Upminster (Julia Lopez) and for Rugby (Mark Pawsey) and indeed from the hon. Gentleman who has tabled the amendments, we are minded to look sympathetically at bringing forward the exemption by a year for those taxis that have low emissions, albeit that they cost £40,000 or more. I know that my hon.”
“I thank Members for the quality of the debate during the passage of this Bill, and I thank in particular the Bill Committee and those on the Opposition Front Benches, both Labour and Scottish National parties, for their professional scrutiny and the fair and effective way in which they conducted themselves. This Bill is one of which this Government can be proud. It gives first-time buyers renewed hope of a place on the housing ladder, puts measures in place to boost productivity, and takes another step along the path towards an equitable and sustainable tax system. I commend the Bill to the House.”
“Since 2010 the Government have introduced over 100 avoidance and evasion measures, which have helped to secure and protect over £175 billion of additional tax revenues to go towards our vital public services. But the work is not done, and this Bill furthers that agenda, cracking down on online VAT evasion, making online marketplaces joint and severally liable for the unpaid VAT of their sellers, and preventing companies from claiming unfair tax relief on their intellectual property. Taken together, the measures in the Bill to tackle avoidance and evasion raise further vital funds for our public services.”
“In this Bill we are therefore increasing the lifetime investment limit for knowledge-intensive companies through our venture capital schemes from £5 million to £10 million, and we are doubling the yearly amount an investor can put into these schemes to £2 million, provided that everything over £1 million is invested in knowledge-intensive businesses. Building an economy fit for the future relies on our harnessing technology, new ideas, and the expertise we already have; these changes will help to make that happen. The Government will continue to work relentlessly to make our tax system fairer and more sustainable, and this Bill continues the Government’s work on tax avoidance and evasion, making sure that people pay their fair share.”
“That is why in this Bill we are increasing the research and development expenditure credit from 11% to 12%, thereby increasing incentives to businesses to invest in R&D. We also need to encourage our entrepreneurs and help their bright ideas to become productive business, but, as Sir Damon Buffini pointed out in the “Patient Capital Review”, it is often those companies at the forefront of technological and knowledge-based development with the most productive potential that struggle for necessary capital.”
“This Bill will help more people to negotiate these challenges and exempts first-time buyers from stamp duty for houses worth up to £300,000, and it provides discounts for houses worth up to £500,000. This will save homebuyers up to £5,000 and will mean 80% of first-time buyers will not pay any stamp duty. This Government have presided over 20 successive quarters of economic growth, record levels of employment and a significant decrease in the Budget deficit, as well as among the lowest levels of unemployment in over 40 years. This has been achieved only because of fair and sustainable fiscal and economic policy, but Britain’s productivity growth is subdued and has been since 2008, and I hardly need to tell the House why this should concern us, for productivity is intimately linked to real incomes and to living standards.”
“This Government know that the most sustainable way to improve affordability is by increasing supply. That is why at the autumn Budget we took steps to address this. We announced the Letwin review to look at why planning permissions are not turning into homes, and we increased Government funding for new housing to £44 billion over the next five years. But there are also things we can do in the short term to help young people in particular to get a foot on to the ladder, so this Bill provides for a stamp duty cut for first-time buyers. First-time buyers tend to be more cash-constrained than others, with stamp duty representing a key financial obstacle, on top of a deposit and conveyancing fees for purchases over £125,000.”
“I beg to move, That the Bill be now read the Third time. The Bill makes a number of vital changes to our tax system, helping people to buy their first homes, working towards improving productivity in our country, and making our tax system fairer and more sustainable. This Government believe in “a nation-wide property-owning democracy.” That conviction is as strong now as it was when Anthony Eden first said those words in 1946, but it is obvious to all of us in the House that the ideal has been eroded, and that the next generation of potential homeowners are being shut out. In London, prices are nearly 13 times the average wage, and in the rest of England they are eight times the average wage. Home ownership has decreased by 20 percentage points among young people in just the last 15 years.”
“We will continue to demand that the Russian Government do more to co-operate with the investigation into Mr Litvinenko’s death. That includes the extradition of the main suspects, the provision of satisfactory answers and our demand that Russia must account for the role and activities of its security services. I urge the Committee to approve the order.”
“We continue to believe that the freezing order acts as a deterrent, and as a signal that the Government will not tolerate such acts on British soil and that it will take firm steps to defend our national security and the rule of law. Were we not to renew the asset freezes against Lugovoy and Kovtun, we would risk sending a damaging signal that the consequences of murder in the United Kingdom are limited and time-bound if someone chooses to evade the UK justice system by remaining overseas. Our relationship with Russia remains strictly limited because of the Litvinenko assassination and the illegal annexation of Crimea by Russia. We engage with Russia on a guarded basis, defending UK national security where necessary while ensuring that we address the global security issues of the day.”
“The relevant conditions, as set out at section 4 of the Act, are still being met: the Treasury reasonably believes that action constituting a threat to the life or property of one or more nationals of the United Kingdom or residents of the United Kingdom has been or is likely to be taken by a person or persons resident in a country or territory outside the United Kingdom. The freezing order is consequently one of a limited number of measures available to the UK authorities to act directly against Lugovoy and Kovtun. The Russian authorities failed to co-operate at any stage with extradition requests or with the inquiry, which prevented progress on the Metropolitan police investigation into Lugovoy and Kovtun. There is little prospect of bringing them to trial in a British court.”
“Under section 8 of the Act, the duration of a freezing order is limited to two years. During those two years, the Treasury is required by section 7 of the Act to keep the order under review. In order to maintain the asset freeze, the Treasury was required to review the case and decide whether to make a new order. The Treasury has conducted such a review and decided to make a new freezing order. The Treasury believes that making a new order remains an appropriate and proportionate measure to take.”
“The inquiry also concluded that there was a “strong probability” that Litvinenko, an ex-KGB and ex-FSB officer and critic of the Russian Government, was murdered on the order of the FSB, the Russian domestic security service. Furthermore, the killing was “probably approved” by the then head of the FSB, Nikolai Patrushev, and the Russian President, Vladimir Putin. In response to the gravity of those findings, in January 2016 the Treasury imposed an asset freeze on Lugovoy and Kovtun by making a freezing order under the Anti-terrorism, Crime and Security Act 2001. The 2016 freezing order had the effect of freezing any funds or assets that those two individuals held in the United Kingdom or with any UK-incorporated entities, denying them access to the UK financial system and prohibiting UK persons from making funds available to them.”
“I beg to move, That the Committee has considered the Andrey Lugovoy and Dmitri Kovtun Freezing Order 2018 (S.I. 2018, No. 60). Good morning, Sir Edward. May I say what a great pleasure it is to serve under your—I think it is fair to say—popular chairmanship? The order was laid before the House this year on 19 January and came into force on 22 January. That was to ensure that there was no gap in the freezing measures enforced against Andrey Lugovoy and Dmitri Kovtun in response to the Litvinenko inquiry report published in January 2016. The independent inquiry chaired by Sir Robert Owen concluded that Mr Litvinenko was deliberately poisoned in 2006 by Lugovoy and Kovtun through the use of polonium-210.”
“I beg to move, That the Committee has considered the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2018.”
“The rate for class 3 contributions, which allow people to voluntarily top up their national insurance record, allowing access to contributory benefits, will increase in line with inflation from £14.25 to £14.65 a week. The regulations also make provision for a Treasury grant of up to 5% of forecast annual benefit expenditure to be paid into the national insurance fund, if needed, during 2018-19. A similar provision will be made in respect of the Northern Ireland national insurance fund. I trust that that is a useful overview of the changes that we are making to bring rates of support and contributions to the Exchequer into line with inflation.”
“The level at which employers of people under 21 and of apprentices under 25 start to pay employers’ contributions will rise from £866 to £892 a week. The self-employed pay class 2, 3 and 4 NICs. Class 2 NICs provide access to contributory benefits for the self-employed, such as the state pension. The weekly rate of class 2 NICs to be paid will rise in line with inflation to £2.95, a flat rate for all the self-employed. The small profits threshold—the level of profits at which the self-employed have to pay class 2 NICs—will rise with inflation to £6,205 a year. The self-employed currently pay class 4 NICs at a rate of 9% on profits above £8,044 a year; that limit will now rise with inflation to £8,424. They also pay 2% above what is known as an upper profits limit; that limit will rise from £45,000 to £46,350 a year.”
“The primary threshold of £8,424—the level of earnings at which class 1 NICs have to be paid—will rise with inflation to £162 a week. The upper earnings limit is the level at which employees start to pay class 1 NICs at 2% on all earnings above a certain income tax threshold; the Government have committed to aligning this threshold with the UK’s higher income tax rate of £46,350. Employers have to pay national insurance at a rate of 13.8% above an earnings level called a secondary threshold. This threshold will rise with inflation to £162 a week, as it has been aligned with the primary threshold for employees since April 2017. The Government are committed to reducing the cost to businesses of employing young apprentices and young people.”
“Before I deal with the substance of the draft regulations, I draw the Committee’s attention to their fiscal significance: they will enable the collection of £130 billion in national insurance contributions, which will work directly to support our national health service, pensioners and people who have been bereaved. Let me outline the changes to employee and employer NICs, commonly referred to as class 1 NICs. The lower earnings limit of £6,000 for class 1 NICs—the level of earnings at which employees start to gain access to contributory benefits, including the state pension, employment and support allowance and jobseeker’s allowance—will rise in line with inflation to £116 a week. Employees will have to pay class 1 NICs at 12%.”
“Increases to these rates are part of the Government’s wider commitment to supporting the most vulnerable in our society. The draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations will make changes to the rates, limits and thresholds for national insurance contributions and make provision for a Treasury grant to be paid into the national insurance fund if required. These changes will take effect on 6 April 2018. Re-rating will increase the national insurance contribution rates, limits and thresholds in line with inflation to protect taxpayers from rising prices.”
“It is a pleasure to serve under your chairmanship, Sir David. Let me begin by addressing the draft Tax Credits and Guardian’s Allowance Up-rating etc. Regulations. The Government are committed to a welfare system that is fair to the taxpayer while maintaining our protection for the most vulnerable in society. As in previous years, we are legislating to ensure that the guardian’s allowance and the disability elements of child tax credit and working tax credit increase in line with the consumer prices index, which stood at 3% in the year to September 2017. The draft regulations will maintain the level of support for disabled children in receipt of child tax credit, disabled workers in receipt of working tax credit and children whose parents are absent or deceased.”
“Of course, the increase in the personal allowance will take even more people out of tax, as well as providing a tax break for more than 30 million people.”
“I thank the hon. Lady for her observations, and especially for her broad support for the measures that we are bringing forward today. On the issue of the thresholds and the potential benefit to higher earners as a consequence of upratings in the future, of course at this stage we are not at the £50,000 limit, so that is not a debate for today. A second point I want to make, on the issue of looking after the most vulnerable, is that we are doing a number of things from a Treasury perspective outside the benefits system, which were announced at the Budget, including a national living wage increase of 4.4%. That is well above inflation, something that the hon. Lady understandably referred to. That will begin in April.”
“When looking at the impact of inflation on potential savings such as the hon. Gentleman describes, we have to bear in mind that many costs are going up for the Government as a consequence of increased levels of inflation. It is not simply something that can be looked at in isolation.”
“The total spend on benefits in 1980-81 was £30 billion in real terms. By 2014-15, that had risen to £96 billion. We have to place this debate within the context of that overall fiscal framework.”
“As I have been explaining, the national living wage increases and the rise in the personal allowance are clearly elements of this. We are also now rolling out universal credit, which will increasingly make sure that work pays. We believe that that is the best way out of poverty and the best way to improve living standards. To make some broader points, as a responsible Government we need to balance the costs of benefits with the compelling need to look after and support the most vulnerable in our society. I argue that that is why today’s measures effectively exempt from the freeze the categories of individuals whom we are discussing today, who are indeed among the most vulnerable in our society. Between 2008 and 2015, jobseeker’s allowance rose by about 21%, child tax credits by about 33%, but earnings by only about 12%.”
“So there are many things that are driving up in the direction of improving living standards.”
“Thank you, Sir David. We might be in danger of discussing matters that diverge quite far from the instruments themselves. To deal with the point raised by the hon. Lady, one of the most telling statistics in all of this is that in 2013—the latest year for which these figures were available—this country had the largest percentage of GDP spend on family benefits, including child benefits, of any country in the OECD. In the context of the economic challenges that we face, we need to be fiscally prudent at the same time as growing our economy, as we are. As the hon. Lady will know, we are near record levels of employment. We have the lowest level of unemployment for over 40 years, we have reduced the deficit now by three-quarters, and we go into the coming period after the Budget on the back of 19 consecutive months of growth.”
“My hon. Friend is entirely right, and he will know that prior to the very recent figures, which still show that the level of income inequality is the lowest since 2010, it was the lowest in 30 years.”
“I know that the hon. Lady is itching to tell me about it excluding housing and raise various points, but it is a recognised measure within the Gini coefficient. I do believe that this Government have a record of which they can be truly proud. There is more to be done, but I think we can all agree on these measures, to the extent that they are relieving measures for particular categories of individuals whom we all, on both sides of the Committee, seek to support. I hope that on that basis we can approve these measures. Question put and agreed to. DRAFT TAX CREDITS AND GUARDIAN’S ALLOWANCE UP-RATING ETC. REGULATIONS 2018 Resolved, That the Committee has considered the draft Tax Credits and Guardian’s Allowance Up-rating etc. Regulations 2018 .— (Mel Stride.)”
“In the meantime, I ask the hon. Lady to withdraw her amendment.”
“It is a pleasure to serve under your chairmanship, Ms Buck. Clause 25 permits disclosures for customs duty purposes, but makes it clear that disclosures that would contravene the Data Protection Act 1998 are not permitted. Amendment 117 would provide instead that disclosures that would contravene the Data Protection Act 2018—currently the Data Protection Bill—were not permitted. The Government intend that data protection safeguards will need to be complied with when powers under the Bill are exercised. Given that the Data Protection Bill is not yet in law, it would be inappropriate to refer to it in this Bill, but I am happy to assure the Committee that the Government are committed to ensuring appropriate data protection safeguards and will therefore seek to make the appropriate amendments at the appropriate time.”
“Before the UK joined the EU, none of the provisions that could be made in secondary legislation in relation to import duty were subject to the draft affirmative procedure. For those reasons, the Government do not support the amendments.”
“The Government believe that the negative procedure for regulations made under clause 30 provides an appropriate level of parliamentary scrutiny. The Government need to be able to administer the tax system effectively, for example to collect the right amount of tax from the right person at the right time. That clearly applies to the collection of real-time taxes such as import duties. Changes in circumstances, for example the emergence of a new category of goods or the proliferation of one means of importing goods, may need to be addressed in real time. Therefore, application of the draft affirmative procedure to regulations made under clause 30 is inappropriate. Unlike the negative procedure, the draft affirmative procedure will not be capable of implementing those essential policy changes immediately.”