Finance Bill

Part of the debate – in the House of Commons at 6:12 pm on 12th September 2017.

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Photo of Neil O'Brien Neil O'Brien Conservative, Harborough 6:12 pm, 12th September 2017

The Bill is an excellent bit of work by Treasury Ministers and officials. It is easy for politicians to say airily that we must clamp down on tax avoidance, but it is testament to the incredible amount of complex and technical work that goes into making that a reality that you now have in front of you, Mr Speaker, a Bill that is pretty much big enough for you to put your feet up on.

Several of the measures in the Bill manage the difficult double whammy of protecting the revenues on which our public services rely while improving fairness. For example, by cracking down on VAT fraud by overseas sellers, we can help our own high streets. By stopping the use of artificially high interest rates and complex arrangements to avoid corporation tax, we can level the playing field between big multinationals and our small businesses. By clamping down on disguised remuneration, we can insist that people who are doing the same work pay the same tax.

I am struck by how carefully balanced the measures in the Bill are. Ending permanent non-dom status and limiting non-dom status in other ways will maximise the amount of revenue we can extract from non-doms. Of course, the populist, easy thing to do would be to pretend that we could just sweep away non-dom status altogether, but as no less an authority than Ed Balls has pointed out, that would not be the best way to secure the most tax revenue for schools and hospitals. The Chancellor has wisely chosen the right policy rather than a cheap soundbite.

Very few of the measures in the Bill are what we would call sexy—indeed, we might say they are a bit spreadsheety, if that is now a word—but they enable important investments in our future. They enable us to have fairer funding for schools in Harborough, Oadby and Wigston. They enable us to make massive investment in technical education and to have the biggest increase in science and technology investment since 1979, so that we can have a strong economy in the future. This is serious work, and we can see what a contrast there is with the Opposition. Their basic proposition is that we can spend loads more on absolutely everything, but no normal taxpayer will have to pay anything more. I do not find that plausible. What do non-partisan institutions such as the IFS say about those Opposition plans? They say that tax levels on a national accounts basis would rise to their highest share of GDP since 1946; that plans for an offshore company levy would be likely to raise zero pounds; that there was a basic £2.5 billion mistake in the Opposition’s sums due to obvious double counting; and that their plans for a dramatic hike in the tax on small businesses and for a rise in income tax would not raise what they claim. Therefore, the Opposition’s plans are not serious.

Back in the real world, we have some serious challenges to face. In the early years of the next decade, demographics will start to put increasing pressure on the public finances and whomever is Chancellor will increasingly feel like they are trying to walk up a down escalator. Globalisation will continue to put pressure on our tax base, and we must not plan again on the basis that we can abolish boom and bust; rather we should try to fix the roof while the sun is shining. This Finance Bill is another step in doing just that.

We have already raised £160 billion since 2010 by cracking down on evasion and avoidance. Compared with most other countries, we do a better job at ensuring that people pay the taxes that they are due to pay, and we have reduced the tax gap compared with when Labour was in power. Currently we have unemployment at a 42-year low and inequality at a 30-year low, the deficit down by two thirds, record increases in the minimum wage and a cut in basic rate tax by £1,000 a year. Our plan is working and this Finance Bill is another step in that plan.