Topical Questions

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 19th April 2016.

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Photo of Rebecca Pow Rebecca Pow Conservative, Taunton Deane 12:00 am, 19th April 2016

If he will make a statement on his departmental responsibilities.

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

The core purpose of the Treasury is to ensure the stability and prosperity of the economy.

Photo of Rebecca Pow Rebecca Pow Conservative, Taunton Deane

The innovative Claims Consortium Group in Taunton Deane has just received an Investors in People gold standard award, one of only 300 companies in the UK to have done so. It began in a back bedroom in Milverton just a few years ago, and it now employs 300 people. Does my right hon. Friend agree that not only is Taunton Deane an excellent place to do business, as this company demonstrates, but so is the whole of the wider south-west, thanks to the infrastructure and connectivity injections this Government are giving it?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

Let me join my hon. Friend in congratulating the Claims Consortium Group on its award. I am glad that it has been recognised for its hard work. She is absolutely right that Taunton, and indeed the whole of the south-west, is a great place to do business. We are now investing huge sums in the roads and railways, broadband and housing. Of course, without her I do not think we would be having the A358 upgrade. There is a general lesson, which is that when the south-west votes blue, the voice of the south-west is heard in Parliament.

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

It is not just on tax that people are concerned about the behaviour of the super-rich and its impact on the economy. I hope that the Chancellor will join me in welcoming the action taken by shareholders at BP’s annual general meeting against the excessive pay awards recommended by the company’s remuneration committee. The chief executive’s pay in FTSE 100 companies has risen from 50 times the average employee’s in the 1990s to 150 times today. Will he support measures to tackle the remuneration racket? To many, an old boys’ network appears to operate to set each other’s pay. In particular, will he support the widening of shareholder representation and employee representation on remuneration committees?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

It is absolutely right that companies and the shareholders who own those companies think about their pay policy, act responsibly and do not pay excessive amounts to chief executives who do not deserve them. It is this Government who introduced those shareholder votes—they did not exist under previous Labour Governments—and I am glad that shareholders are using the opportunity we have given them. I do not think, if this is what the hon. Gentleman is hinting at, that we should be putting trade unions on company boards, but I do agree that we should make sure that shareholders use all the tools available to them.

Photo of Byron Davies Byron Davies Conservative, Gower

Will the Chancellor update the House on any discussions he has had for a potential city deal for the Swansea Bay city region, and on what he can do to drive growth and create jobs in south-west Wales, particularly in my Gower constituency

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

First, we are now in conversation with Swansea about what we can do for the city deal. We are of course acutely aware that we need to help the steelworkers in Port Talbot. We are working to achieve a sale of the site, but we are also helping those who have already been made redundant. We are also looking very closely at the tidal bay lagoon scheme and at whether we can make that fly as well.

Photo of Rushanara Ali Rushanara Ali Labour, Bethnal Green and Bow

Analysis by the House of Commons Library, including that on the 2016 Budget, shows that, cumulatively, 86% of savings in the period between 2010 and 2020 will come from women’s pockets. What has the Chancellor got against women

Photo of Harriett Baldwin Harriett Baldwin The Economic Secretary to the Treasury

The analysis by the House of Commons Library is fundamentally flawed. First, it assumes that every pound of Government borrowing benefits people. It also does not highlight the fact that it is higher rate taxpaying women such as me, whose child benefit has been ended, who form the largest part of that group. Is the hon. Lady saying that her party wants to reinstate child benefit for higher rate taxpayers?

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Last year when I held a small business breakfast in Wimbledon, the level of business rates was the biggest issue, so my constituents are understandably delighted with the Chancellor’s permanent doubling of small business rate relief. Will my right hon. Friend say what else he is doing and what else the Government can do to support small businesses to ensure that they invest for growth and further jobs?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

Small business is absolutely fundamental to the economy and to job creation. That is why we had such a big package in the Budget to help ease the burden of business rates and why we reduced corporation tax, which is paid by small companies that are in profit. We have also increased the annual investment allowance so that small businesses can invest in the future. To help them with the burden of the national living wage we have increased the employment allowance so that they can employ four people on the national living wage and pay no national insurance at all.

Photo of Martyn Day Martyn Day Scottish National Party, Linlithgow and East Falkirk

The Panama papers unearthed an array of revelations, amid which was the exposure of the relationship between tax and land ownership. What steps are the Government taking to ensure transparency of land ownership across the UK?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

This Government are bringing in a register so that we will know the beneficial ownership of people or structures holding property in this country. We have not had that before, and we are making progress on it.

Photo of Chloe Smith Chloe Smith Conservative, Norwich North

In the Budget, the Chancellor outlined measures on tax avoidance and evasion to bring in about £12 billion. How much more does he expect to bring in from the measures announced since, which we all welcome, to make every business in this land pay its fair share

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

The Office for Budget Responsibility assesses and puts on the scorecard the estimated revenue that we will raise from tax avoidance, but it will be around an extra £1 billion a year just from the measures in the Budget. In last year’s Budget after the election, we had measures to raise £5 billion from clamping down on aggressive tax avoidance and evasion. The fight continues.

Photo of Judith Cummins Judith Cummins Opposition Whip (Commons)

Following reports in this morning’s

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

As we covered earlier, the tariff system in place to encourage renewable energy has to deliver a balanced portfolio of energy, and it does so. Of course, we encourage energy firms always to pass price cuts that they benefit from on to their customers.

Photo of Alan Mak Alan Mak Conservative, Havant

All 31 local firms that have reached the final of my Havant small business awards will benefit from the Government’s corporation tax cut. Will the Chancellor join me in congratulating all the finalists and confirm that the Government will continue to support small businesses across the country

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

I join my hon. Friend, who is such an excellent voice for Havant in this Parliament, in congratulating the small businesses in the Havant constituency. They are thriving, and we are helping them with major improvements to roads and infrastructure in the area.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

Let me be absolutely clear with the House that we are not talking about quarterly tax returns. This is not about having to do a full tax return but about reporting; indeed, the purpose of the changes is ultimately to reduce the burden on businesses. It will start to be introduced in 2018. I hope that we will set out further information about the plans in the coming weeks. The intention is to ensure that we reduce the tax gap and, ultimately, help businesses to comply with the tax system.

Photo of Charles Walker Charles Walker Chair, Procedure Committee

I thank the Chancellor and the Economic Secretary for their good humour in their dealings with me over the past few days. This afternoon I will be moving new clause 9 to the Bank of England and Financial Services Bill. Are the Government now minded to accept new clause 9?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

It is quite right that we take action against money laundering. That cannot only be done in this country—it needs to be done internationally. We should focus our effort, our resources and the force of the law where the risks are greatest. Like other Members of Parliament, I have been concerned that banks are at risk of going too far and being disproportionate when applying their rules to politically exposed persons in Britain, and their families in particular. I have written to the chief executives of the individual banks. My hon. Friend has worked with us on this issue and has tabled his new clause. We are happy to accept it because we are all trying to achieve the same goal.

Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee

The Public Accounts Committee report issued last week highlighted the £16 billion of the tax gap that is tax fraud. The money brought into the Treasury for that has stayed pretty static, at 3% of total tax liability. Does the Chancellor think that there is more to be done, and does the fact that the number of the wealthiest individuals being investigated will increase from 35 to 100 by 2020 not demonstrate that he has missed an opportunity?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

We are taking strong action on tax evasion and significantly increasing the number of criminal investigations—I understand that around 90 investigations into offshore tax evasion are currently ongoing. We announced in the Budget last summer an additional £800 million for Her Majesty’s Revenue and Customs to support its activities, and through the common reporting standard—and ultimately through registers of beneficial interest—we are now getting access to much more information so that we can take on offshore tax evaders.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

Order. Quite a lot of people whom I would have called have toddled out of the Chamber. There seems to be a bit of a lack of stamina—very unfortunate—although not from Lucy Frazer.

Photo of Lucy Frazer Lucy Frazer Conservative, South East Cambridgeshire

I welcome the fairer funding consultation that has just closed. When taking into account figures for growth in pupil numbers, will the Minister consider the actual numbers for the new school year, rather than the previous one, to ensure that we have a truly fairer funding formula?

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The national funding formula will address historical unfairness. As now, school budgets will be set on the basis of the pupil census in the October prior to the start of the funding year, giving schools the certainty they need. The Department’s consultation also proposes to include a new factor to recognise in-year growth, targeting funding to schools with significant increases in pupil numbers.

Photo of Tom Elliott Tom Elliott UUP, Fermanagh and South Tyrone

Nobody has ever accused me of a lack of stamina, Mr Speaker. Am I right and accurate in my assessment that LIBOR funds can be used only for charitable purposes and will not go to a Department?

Photo of Greg Hands Greg Hands The Chief Secretary to the Treasury

The question is, I hope, about Air Ambulance Northern Ireland, and I confirm that we are working with the charity and the Northern Ireland Executive on how those funds are delivered. They will go to the air ambulance charity, which I know will be broadly welcomed across all communities in Northern Ireland.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

In his document published yesterday, the Chancellor posed the question:

“Is our national security best served by retreating from the world?”

I hope that he is not foolish enough to suggest that those of us who wish the United Kingdom to leave the European Union want to retreat from the world, because the truth is far from that. We want the United Kingdom to break free from the sclerotic shackles of the EU and its superstate, and embrace the exciting world out there that befits the world’s fifth largest economy, a nuclear power, and a permanent member of the United Nations Security Council.

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

Of course I respect my hon. Friend’s views. We are having a referendum, and his vote and my vote count equally. I would make the point that our membership of the European Union enhances our national security—that point was also raised by the Secretary-General of NATO last week. Not one of this country’s allies or friends abroad are recommending that we leave the EU.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Health)

The number of people sleeping rough on our streets has doubled since 2010 and increased by 30% in the past year alone, which is a shocking indictment of Government policy and society as a whole. Will the Chancellor step in and intervene in the shambles that is the Housing and Planning Bill, and ensure that support for homeless people such as hostels and specialist accommodation is protected?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

In the Budget we provided more than £100 million extra to help with the problem of homelessness and the particular problem of rough sleeping. We have provided money for second-stage accommodation for people as they leave hostels, to ensure that they have secure accommodation to go to. I am always happy to listen to further representations or ideas from the hon. Gentleman or any other Member.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

The Treasury cannot even get its forecast for growth and the deficit correct for next year. Does the Chancellor realise that instructing his officials to produce a speculative report based on thoroughly tendentious figures about what might or might not happen in the event of Brexit simply belittles the reputation of the Treasury for economic competence and forecasting? Instead of relying on fear, why does he not give us his vision, compared with our vision of a free people in a free Parliament, controlling our own borders and leading the world towards free trade?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

Our positive vision is that by being part of a reformed EU we can raise living standards, create more jobs and make sure that consumers have access to lower prices. We have set out in the Treasury analysis a range of possibilities for the alternatives that might happen if Britain leaves the European Union. All of them would make Britain permanently poorer, but if my hon. Friend and the leave campaign want to produce their own plan and their own analysis, then be my guest.

Photo of Callum McCaig Callum McCaig Shadow SNP Westminster Group Leader (Energy and Climate Change)

Last week, the Financial Secretary confirmed to me that details obtained from Crown dependencies and overseas territories and shared with the UK would not be passed on to other tax jurisdictions. If that remains the case, there is a real chance that the UK would be complicit in tax evasion. Will the Chancellor urgently review the situation to ensure that tax is paid where it is due?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

It is the case that the Crown dependencies and overseas territories are, at our prompting, ensuring that they have got registers of beneficial interests. It is also the case that the UK is co-operating, as my right hon. Friend the Chancellor has made clear, with other jurisdictions. I hope we move to a position whereby public registers are the norm, but even before we get to that point, clearly we will look at the opportunities for the information on the central registers to be shared among co-operative economies and jurisdictions.

Photo of Stewart Jackson Stewart Jackson Conservative, Peterborough

I remember the good old days when the Chancellor regarded Treasury predictions as so discredited that he established the Office for Budget Responsibility instead. I cannot think what could have changed. The GDP projections in his dodgy dossier are predicated on breaking our manifesto commitment on immigration, while the cost implications of his new policy of mass migration for school places, housing, health and transport are not made explicit in the document. Why is that?

Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State

We are having a referendum, and people are going to take different views on the prospects of the United Kingdom as we go forward, but the public want facts and information. We have set out in the analysis produced by the Treasury what we think the likely impacts on the economy will be, and this analysis has now been supported by the London School of Economics. It gives out a similar message to that provided by the Bank of England on the economic shock that would come if we leave. Then there are bodies such as the International Monetary Fund and others saying a similar thing. The weight of evidence and the weight of opinion is clear: there would be an economic price if we left the EU. Some regard that as a price worth paying, which is a perfectly respectable argument, but it is not one that I agree with.