Topical Questions

HMRC – in the House of Commons at 10:30 am on 6 March 2008.

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Photo of Philip Hollobone Philip Hollobone Conservative, Kettering 10:30, 6 March 2008

If he will make a statement on his departmental responsibilities.

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

The core purpose of the Treasury is to ensure the stability of the economy, promote growth and manage the public finances.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Will the Chancellor of the Exchequer halt the proposed closure of the tax office in Kettering and its relocation to more expensive premises in Northampton? Given that it is Government policy to increase the local population by one third and create 46,200 jobs in north Northamptonshire by 2021, local residents and businesses need more locally accessible tax advice, not less.

L

It is unbelievable that the government is cramming ever more housing down our throats in Northanptonshire, attracting thousands upon thousands more families and businesses to the area and how the same government happily allows the...

Submitted by Lynda Hayes Continue reading

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

I understand the point that the hon. Gentleman makes, and hon. Members on both sides of the House could make the same point. As the Financial Secretary has just said, it is necessary to reorganise how HMRC does its business. That will mean in many places that the configuration of offices and services provided needs to change. If the hon. Gentleman has specific concerns, he will no doubt make them known, but we all have to recognise that HMRC needs to adapt to be able to provide a service that is up to the mark. That will sometimes mean that office reconfiguration is necessary. If he wishes to make further representations, we will of course listen to them.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

Many of my constituents are elderly pensioners and they have been hard hit by the energy price increases introduced this year. Does the Chancellor think that it is now time to levy the energy companies and use that money to increase the winter fuel allowance from £200 to £300, which would help the elderly in the winter, when they really need it?

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

My hon. Friend should also recognise that annual winter fuel payments, introduced by this Government, now total £2 billion. Warm Front, which has spent £1.6 billion on energy efficiency so far, has helped 1.4 million households to be more energy-efficient, including, I am sure, many in my hon. Friend's constituency. He will have to wait until next week for more clarity on those issues.

Photo of George Osborne George Osborne Shadow Chancellor of the Exchequer

May I ask the Chancellor about the latest confusion at his Treasury: the future of the Barnett formula? Wendy Alexander says that the formula should be reviewed, and Lord Barnett says the same. The Prime Minister is dithering and, for once in his life, does not want a review. The Secretary of State for Justice and Lord Chancellor says that

"the Government would need to engage on this issue...and to deal with concerns in English constituencies about the fairness of the current system."

Does the Chancellor agree with the Lord Chancellor?

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

I wondered when we would hear from the hon. Gentleman, who has been uncharacteristically quiet this Question Time. As the House will know, the Unionist parties in the Scottish Parliament—the Liberals, Conservatives and Labour—have agreed to review arrangements under the Scotland Act 1998. As part of that, the Government have said that they will publish the way in which the Barnett formula has operated over the past 30 years. We are not currently reviewing it, but it will inform debate. There will have to be a lot of discussion. I hope that there will be agreement among those of us who believe that the Union is important. It is important that we have that debate, and I shall publish something—probably in the summer—that will contribute to it. I hope that all parties, the Conservatives included, who have supported the Barnett formula up to now will contribute to that.

Photo of George Osborne George Osborne Shadow Chancellor of the Exchequer

I am sorry that I waited 45 minutes to intervene. I almost lost the will to live listening to the Chancellor for 45 minutes. The whole House is dreading his hour-long Budget speech next week.

I have the minutes of the Cabinet Committee meeting in Downing street on 28 January, at which the Chancellor was present. I know that he is only the Chancellor of the Exchequer, but he did not express an opinion at all, according to the minutes. It says that there is concern in English constituencies about the Barnett formula and that the Prime Minister says that there needs to be a

"period of debate and discussion before concrete proposals could be put forward."

Does the Chancellor agree that if there is to be a period of debate and discussion, as the Prime Minister wants, at the very least the Treasury paper that he wants to produce should make a needs-based assessment of how spending will be allocated across the UK? That would give us the facts on which to have the discussion—and he could show some leadership on the issue.

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

I know that the hon. Gentleman has the minutes, as I understand that they were inadvertently widely circulated, not only within Government but without Government, too. As I said, it is important that people understand the way in which funding of the devolved Administrations has been made for almost 30 years. If we are to change that, we must discuss the implications not only for the devolved Administrations but for the whole UK. I intend to publish the position on the Barnett formula, probably in the summer, but there ought to be a debate. I hope that all parties will join in, especially those that are committed to maintaining the UK, which I believe is of the utmost importance.

Several hon. Members:

rose —

Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission

Order. May I appeal to Ministers and Members alike? We have to get through the Order Paper, and I wish to call as many hon. Members as possible.

Photo of Ian Lucas Ian Lucas PPS (Mr Liam Byrne, Minister of State), Home Office, PPS (Mr Liam Byrne, Minister of State), HM Treasury

The UK's economic stability has helped to secure a £20 billion investment for EADS and Airbus in north-east Wales. Does my right hon. Friend recall that, in 1981, the largest ever single job-loss announcement was made in the same constituency? Does he also recall which party was in power?

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

It is absolutely true that unemployment tends to soar when the Conservatives are in office and plummet when Labour is in office. My hon. Friend's constituency is a case in point. There has been a 53 per cent. fall in unemployment in Wrexham and, as he points out, the new and very welcome investments in both Airbus and Toyota are bringing good, high-skilled jobs with good value-added capacity to the local economy. Unemployment is a Conservative phenomenon; employment is a Labour phenomenon.

Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

Will the Chancellor use the Budget next week to announce the removal of his poll tax on non-domicile qualifiers, on the basis that it hurts small, independent people greatly while doing nothing at all to tackle the rich oligarchs of whom he is so enamoured? Can we instead have a seven-year period in which non-doms pay no tax, after which they pay normal tax, the same as everybody else? Would that be a fairer solution?

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

The aim of the residence and domicile changes that were announced in the pre-Budget report was to make the tax rules fairer while supporting UK competitiveness. I do not recognise the hon. Gentleman's description of the situation, but we do acknowledge that the special rules for non-domiciles make an important contribution to the overall attractiveness of the UK to international talent and investment. That is why those special rules are going to be staying in place.

Photo of Robert Goodwill Robert Goodwill Shadow Minister (Transport)

Farmers who are struggling under a mountain of Government-imposed paperwork are likely to be extremely irritated if rules on income shifting require them to keep detailed records, including timesheets, of the family members who make a great contribution to the survival of their businesses. What assessment have the Government made of the cost that will be imposed on farms and other small businesses by the proposed changes?

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

The rules on income shifting are out to consultation. I hope that, if the hon. Gentleman has constituents who have worries about them, they will contact us and let us know. It is important for hon. Members to know that I have had many meetings with tax representatives who are worried about the matter, and we are listening. The idea of the rules on income shifting is to prevent people from gaining unfair advantages by shifting income from one person to another in a way that ordinary taxpayers cannot. That is what we are trying to get at, not genuine businesses that suffer from simplification or complication issues. I hope that the hon. Gentleman will talk to me about his constituents' worries if he wishes.

Photo of David Taylor David Taylor Labour, North West Leicestershire

The Chartered Institute of Purchasing and Supply's activity index for February was published yesterday, and showed the level rising to 54.0, the highest since 1996. That is a barometer of inflationary pressure and shows how right pensioners and others are to be concerned about inflation, as revealed by the consumer prices index. Will the Chancellor tell the House how our performance in relation to the CPI compares with the other countries in, for example, the G7, the euro area and the EU27?

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

The answer to my hon. Friend's question is that inflation here is less than in the euro area and half that in the United States. The reason for that is that when we gave the Bank of England independence to deal with monetary policy and interest rates, we gave it a very clear remit. That has resulted in our inflation being historically low. We are in an infinitely better position than we were in the 1970s and 1980s.

Photo of David Heath David Heath Liberal Democrat, Somerton and Frome

I imagine that all hon. Members continue to have constituents who have problems with tax credits. Several of my constituents have gone to the tax credit office in the past few weeks and been sent from there to me to sort out their tax credit problems. Is that an innovative way of giving underemployed Members of Parliament enough casework, or is it, as I suspect, a way of fobbing off my constituents by not dealing with their problems properly in the first instance?

J

I applaud this example of Hon Gentleman's excellent constituency work.

Submitted by John Hyde

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

I am sorry to hear of the hon. Gentleman's experience—

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

The experience of tax credits—given the other matter, he will have a lot more time to consider it. Will he write to me about the detail? I would like to look into the allegation, which is serious. I assure him that HMRC staff are working extremely hard through the transformation programme to improve the service to customers. He will have followed closely the changes that we have made in the past year or so, and I hope that in future hon. Members will not have experiences such as those that he describes.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

The Chancellor will know that the Post Office offers a very competitive savings account with a rate of 5.5 per cent. What advice would he give to sub-postmasters around the country who are seeing an outflow of those savings to an even more competitive savings account—that of Northern Rock, which is offering a rate of 6 per cent., subsidised by the taxpayer? Is that not a further blow to the post office network as a result of this Government's incompetence?

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

No. I am not sure whether the hon. Gentleman was present earlier, when we discussed Northern Rock, but I made it clear that the board of directors of Northern Rock is looking at the products that it offers, with a view to ensuring that they are not competing unfairly against other financial institutions. As for the Post Office, the Government have made very substantial sums available to support it, which was not the case in the past.

Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

I am grateful to the Treasury for its recent reply that revealed that the former Chancellor's decision to sell the nation's gold reserves cost the country more than $8 billion net of interest, which is more than the losses incurred by rogue traders such as Jérôme Kerviel and Nick Leeson and a multiple of the losses on black Wednesday, and cost every household in this country more than £200. In the words of my constituent, Sonia Chohan, who has referred the former Chancellor to the "Guinness Book of Records", is not

"Gordon Brown...the biggest rogue trader in history"?

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

The right hon. Gentleman is being completely absurd, and he knows it. If it is such a terrible policy, why on earth are many other countries divesting themselves of their gold reserves to get a more balanced portfolio? He knows as well as anyone else that the then Governor of the Bank of England, Eddie George, when he was asked about it in 1999, said that it was a perfectly reasonable portfolio decision that spread risk and reduced the risk of the national reserves by 30 per cent.

Photo of Tim Loughton Tim Loughton Shadow Minister (Children)

I am grateful for your charity, Mr. Speaker.

I need to declare a personal interest, because yesterday I had cause to ring the late-filing penalty helpline of the Inland Revenue, having filed my tax return and had the cheque cashed on 30 January. The very helpful lady I spoke with said that she could not help me because the address she had for me was 12 years out of date, and for my wife 17 years out of date, despite our filing tax returns every year. She ended up by saying, "As you are an MP, perhaps you will take away from this call the complete chaos we are in." Does the Minister share that view and, if she does, why are so many of her colleagues getting paid a bonus?

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

I am sorry to hear the hon. Gentleman's report of his experience with the self-assessment process. I shall take it away and investigate, but I point out that, despite the problems on the day, HMRC dealt with a very large number of cases. As he knows, people always leave it until the last minute, and HMRC experiences a huge surge in the number of self-assessments. All I can say is that I will investigate the hon. Gentleman's case and look into exactly what reports he has made to HMRC in recent years.