The Chancellor of the Exchequer was asked—
National Insurance Numbers (Other EU Nationals)
The Government are committed to providing data on active national insurance numbers used by people from other EU countries. HMRC is currently compiling that information and is working closely with the Office for National Statistics, which is reconciling the four main sources of international migration data. The data on active national insurance numbers will be published as part of, or alongside, the ONS’s publication. It is up to that independent statistics authority to decide when it is ready to make public the information.
I have been asking HMRC for the figures since January. The British people have a right to know such facts, particularly in the context of the UK’s EU referendum debate. Will we know before 23 June how many foreign nationals from other EU countries have national insurance numbers?
It does take some time for HMRC to combine and match multiple datasets and hundreds of millions of lines of its own and the Department for Work and Pensions’ data. The intention is to publish the information alongside the ONS analysis. I note that according to its website the ONS plans to publish in May a note on migration incorporating the latest available migration data, and helping to explain further why the two datasets show different trends.
What about the 3.3 million people—one in 10 of the existing workforce—who pay their national insurance and tax and whose jobs are linked to UK exports to the EU? Does the Minister agree that leave campaigners should not just cross their fingers and dismiss reality and that Members on both sides of the House have a duty to spell out the fact that leaving the EU would put real jobs at real risk?
The hon. Gentleman will be aware of the Treasury analysis published yesterday that shows the various models and the consequences were we to leave the EU, including a permanent reduction in our GDP compared with what it otherwise would be and significant damage to productivity growth. The hon. Gentleman is right to highlight that point.
As I said, HMRC has gone through the data and will provide them to the ONS. It is for the ONS to decide the timing, but I have drawn the House’s attention to what it has said.
Returning to the Treasury analysis, it compares one scenario with other scenarios, and all three possible scenarios for leaving the EU would leave this country poorer than we otherwise would be.
The impact of EU membership on jobs is obviously significant. Will the Minister pass on my congratulations to the officials who did the useful analysis that was published yesterday? A regional breakdown on page 65 of the document suggests that 100,000 jobs in the north-east are dependent on EU exports. I had thought that the figure would be 140,000, so will he ask the officials to look at it again with a view to revising it up?
I will certainly take that representation on board. Of course, the north-east of England has the very large Nissan plant, which provides a significant number of jobs. The argument in the Treasury analysis is that we benefit from an open economy. If we leave the single market, we become a less open economy, which will have a cost to the British people in their living standards.
The disgracefully dodgy document published by the Treasury yesterday is, frankly, worthy of the children’s programme “Jackanory”. The immigration figures suggest that there will be 3 million more immigrants in this country by 2030, placing my hon. Friend in clear breach of the Conservative manifesto commitment to reduce immigration to tens of thousands a year. What is his response to that accusation?
The numbers are based on the ONS projection that was used at the last Budget. No account is taken of the achievements of the renegotiation secured by the Prime Minister. On the Treasury analysis, a large number of independent economic commentators have argued that it is broadly in the right direction. My hon. Friends who advocate that we should leave the EU should come forward with their own analysis, setting out exactly what model they would follow and what the economic consequences would be.
We are both building more houses and helping young families afford those homes. Some 400,000 new homes are being built over the years of this Parliament, half of them starter homes for first-time buyers. In the Budget I also launched the new lifetime ISA, so that young people no longer have to choose between saving for a home and saving for their retirement—we are going to help them do both. All this from a Conservative Government who support people’s aspirations to buy their own home and, in time, pass that on to their children.
I am delighted that we can support the community that my hon. Friend so ably represents in Parliament, and provide money for the upgrade of the M40 junction and a new secondary school to go with the new homes being built in Bicester. Of course that comes as part of a suite: we are investing in new starter homes and in shared equity products for people; our help to buy ISA has been used by hundreds of thousands of people; and the new lifetime ISA will also help young people. Those are all things we are doing to make sure this a home-owning democracy.
But there is a problem, because the Office for Budget Responsibility says that lifetime ISAs will increase house prices, as they will increase demand and there is relatively restricted supply. Is the Chancellor confident that his measures to increase the supply of housing will mean that the OBR is able to revise that analysis—yes or no?
I agree that it is vital that we not only help people afford homes, particularly young first-time buyers, but build more homes. That is the plan we set out in the spending review; a big priority of the capital budget was the additional billions we will be spending on building homes—much more than was spent under the last Labour Government.
As I say, we have the products to help first-time buyers in this country afford housing, but I make this observation on migration: you cannot have access to the single market without accepting the free movement of people. That is an absolutely clear principle, which has been made very starkly clear to this country by Germany and France, and is internationally accepted. If we want access to the single market, we have to accept the free movement of people.
Perhaps the Chancellor will be hearing for the first time that the number of under-35s heading homes they own has fallen by more than 280,000 since 2010. Indeed, the number of affordable homes available to buy has halved since then. Private rental prices rose by 2.6% in the year to February, with incomes failing to keep pace. In September, the Government spoke of a “national crusade” to get 1 million homes built by 2020, but in November that figure was more than halved. Shelter says the Government’s starter homes scheme takes away homes that people on typical wages could afford. Is it not true that home ownership is in freefall because of the housing crisis, with young people who are aspiring to own being the hardest hit?
I have already said that the number of first-time buyers is actually up by 57% under this Government, and I would make this observation: we cannot have a strong and successful housing market, and people getting on the housing ladder, unless we have a strong and successful economy. If we followed the prescription of the Labour Front-Bench team, of nationalising half the economy and imposing punitive tax rates, there would not be anyone able to afford any home in this country.
The lifetime ISA will be a very popular and successful new saving product precisely because it does not require people to choose between saving for a home or saving for their retirement; they can do both. We are also now looking at ways for people to draw on their savings during their lifetime for particular emergencies, or for when they need bits of money, like they do in the United States with the 401(k) scheme. The lifetime ISA will be a radically new savings product, and it will do what we need to do in this country, which is build a savings culture.
Productivity performance in the UK has been weak since the financial crisis, as it has been in all developed countries. The Government published their productivity plan “Fixing the foundations” last year. At the Budget, we announced additional reductions in corporation tax and business rates to incentivise investment, and gave the green light to infrastructure projects such as Crossrail 2 and High Speed 3.
The Scottish National party has continually argued that the UK economy is in dire need of investment to stimulate productivity. Despite the productivity plan, the Chancellor seems determined to persevere with policies that stifle productivity. What policies have the UK Government enacted that will encourage an increase in productivity?
The hon. Lady is right in saying that there is an issue in relation to productivity in this country, but there is an issue across all major developed economies. Over the past year, productivity growth in this country was about 1%, which compares with 0.9% across the G7. On specific measures, we have established the National Infrastructure Commission, protected science funding at the Budget and spending review, introduced the Housing and Planning Bill, announced the apprenticeship levy, which is coming in, and announced a £100 billion infrastructure programme over the course of this Parliament.
Does the Chief Secretary to the Treasury agree that, by being a member of the European Union, this country benefits hugely from a cross-fertilisation of good ideas across the European Union, the supply chain, and foreign direct investment at 50%? Our trade, too, also benefits from our being in the single market—[Interruption.]
Order. No! The hon. Gentleman is very, very wide of the question. I have great respect for him. He has put his thoughts on the record, but they have absolutely nothing to do with the question on the Order Paper, to which the Chief Secretary will not therefore reply.
May I press the Minister? He cannot just hide behind what he claims to be happening in all advanced economies. We are performing worse than most, particularly France. Is the reason for that not to do with the lack of skills of our workers and the lack of good education in our country? Will the Chancellor’s silly policy on forced academisation help or hinder?
We recognise that there is an issue with productivity, which is why we published the productivity plan, but in terms of growth, the UK was the fastest-growing major economy in 2014. Last year, we were in second place; this year we are also projected to be in second place, growing at a healthy rate. Therefore, with regard to growth, this country is doing very well indeed.
Does the Chief Secretary to the Treasury agree that £540 billion invested by foreign businesses in the UK over the past decade is vital to our future productivity, and that, if we left the EU, the uncertainty of our trading relationship with Europe and the world would put that investment in jeopardy?
I agree with my hon. Friend. Leaving the EU would damage UK productivity. It has the potential to deny access, or to make access more difficult, to markets and investment. It is worth noting that the UK, with 28%, is the No.1 EU destination for foreign direct investment, and a large part of that is to do with our status as an EU member.
It was five years in office before we saw a productivity plan, and what happened last year? Productivity in the UK was 18 percentage points below the average for the rest of the G7. One sector that needs help is the UK steel industry. It needs more capital investment to be more competitive. How much money will the Government invest in steel in the next 12 months to improve productivity and save British jobs?
The hon. Gentleman mentions the figure of 18 percentage points, and I refer him to an earlier answer in which I said productivity has been a long-standing issue in the UK. In fact, the figure was 17 percentage points back in the 1990s. As he well knows, the action we have taken on steel includes securing state aid to compensate for energy costs, securing flexibility over EU emissions regulations, ensuring that the procurement rules can also allow social and economic factors to be taken into account, and continuing to tackle unfair trading practices. The Government have been very active on steel, and that has not ended today.
The Government are leading the world in the fight against tax evasion and it was Britain that first demanded that multinationals publish, country by country, where they pay tax. Thanks to our leadership, that is now being taken up at a European level. Multinationals selling into Europe will be required to report the tax they pay, including in ultra-low tax locations. Britain has also got its leading allies to agree to share information on the beneficial ownership of companies. We are now seeking international leadership on a blacklist of tax havens, with punitive action against the jurisdictions on that blacklist. We want the rest of the world to follow our example; where we lead, others should follow.
I thank the Chancellor for that answer, but Conservative MEPs have voted six times on instruction from the Treasury to block EU-wide measures against tax avoidance. What action will the Chancellor take to get all Crown dependencies to establish a public register of beneficial ownership?
At a European level, we are now getting agreement to ensure that multinationals should disclose where they pay tax around the world, including in ultra-low tax jurisdictions. We have just agreed with our leading European allies, France, Germany, Italy and Spain, that we will exchange information on beneficial ownership. In terms of public registries, we are literally one of the very few countries in the world—one of only two or three countries in the entire world—to have committed to a public register, but we want all jurisdictions, not just our overseas territories but all the other advanced economies of the world, to follow our lead.
Last month, I tabled a series of written questions about the tax gap resulting from individuals and businesses using overseas territories and Crown dependencies. All seven questions were grouped into one answer from the Financial Secretary, which basically said, “We have no idea.” Now that the Government have been shamed by the Panama papers into hasty action, will they finally rectify the extraordinary situation whereby the Government have no idea how much is lost to the Treasury in this way each year? Would a public register of beneficial ownership not help in this regard?
We have published more detail on the tax gap than the previous Government and we have shown that it is at one of its lowest levels in our history. This Government have collected £26 billion more than was being collected by a Labour Government in extra compliance.
Tax havens are merely a symptom of a much wider problem, which is that too often the wrong values are at the heart of our financial system. There is too much greed. There is insufficient reciprocity. There is still too great a disconnection between the real economy and the needs of our society. Eight years on from the financial crisis, what is the Chancellor’s genuine assessment of how much has changed for the better?
That is a perfectly reasonable question, and it was well put. A huge amount has changed. There is much tougher regulation of the financial system, and we have better regulators. Banks are more on the case of bad action in their areas, but it is true that more needs to be done to create a proper culture in the banking system in which they treat customers fairly and seek to do the right thing. That is happening, and the banks that do it will get rewards from customers in the marketplace. Like other professions, the industry is seeking to improve its standards of conduct.
The Chancellor will be aware that the reporting requirements for private companies are a lot less stringent than those for publicly listed companies. Although the register of beneficial ownership is an improvement, we need to know not just who owns a particular company but how much tax they are avoiding. If a company gets away with not publishing income, turnover or profit, that will not do. May I ask him what steps he will take with our overseas territories to ensure that this is rectified?
The recent information-sharing agreement that the Chancellor has just referred to could turn out to be a very significant step in the fight against tax evasion, and I support it. The public are right to be upset when businesses or individuals do not pay their fair share of tax. Evasion needs to be rigorously pursued, but does the Chancellor agree that when that is caused by tax avoidance, it is the job of Government to simplify the tax code and close the loopholes exploited by the avoiders?
I broadly agree with my right hon. Friend. I welcome the welcome that he gives to the agreement that we have with four other European countries on the exchange of information on beneficial ownership. We hope that will set an example that not just the rest of Europe, but the rest of the world will follow.
On tax avoidance, of course it is the responsibility of the House of Commons and the Government to try to make sure that the tax code and tax law are simple and do what is intended, but we are in a constant race, as has always been the case, against highly paid accountancy firms and the like, who design very contrived systems to avoid tax and avoid the intention of Parliament. There has been a significant development in our jurisprudence whereby the Supreme Court now takes into account the intention of Parliament, as well as the letter of the law. I think that is right, because as I say, there is sometimes a bit of an arms race in relation to the tax code, and the wishes of Parliament should be taken into account by our courts.
I congratulate my right hon. Friend on the agreement that he has just reached. Is it not the case that HMRC employs 26,000 investigators who work to stop tax evasion and avoidance, and that they have brought in more than £2 billion over the past six years from offshore tax avoidance? Does he agree that we should congratulate HMRC on doing the good job that its investigators are doing, and thank them for their work, and that anyone who criticises HMRC in that respect is just plain wrong?
My hon. Friend is right to highlight the good work that HMRC does. It has never been popular to be a tax collector in any country at any point in history. HMRC is doing a good job in that respect. We are putting more resources in so that it can target particularly wealthy individuals who are evading tax. We now have 26,000 people employed by the Government to ensure that people comply with our tax laws.
I congratulate the Chancellor on the work that he has done to close loopholes—more than any previous Chancellor—but does he recognise that a low-tax economy will attract wealthy people from all over the world to invest in our economy, create jobs and pay more tax, so the Exchequer draws more tax in the end?
I entirely agree. We as Conservatives believe that there should be low taxes, but taxes that are paid. That is the right approach. That is why we have reduced corporation tax, and why we are reducing income tax by raising the tax-free personal allowance. When we cut the top rate of tax, we collected more income for the Exchequer.
My hon. Friend, who is an excellent Member of Parliament in the west of England, is right. We get lots of suggestions from the Labour party about what we should do about tax. Labour was in office for 13 years and had Treasury Ministers answering questions for 13 years. Not a single one of these things happened when they were in charge, and no one believes that if Labour were ever back in charge, it would be tough and take action.
Shall we bring the discussion back to today? In the Panama revelations about the behaviour of offshore companies, the Chancellor could not fail to notice the key role played in many of those deals by UK-headquartered banks and UK-based intermediaries. For example, HSBC and its affiliates created more offshore companies through Mossack Fonseca than any other bank. In view of the significant role played by UK banks, will the Chancellor support the new clause tabled by Labour to today’s Bank of England and Financial Services Bill, requiring British financial institutions to record the true owners of any companies or trusts that they work for? Will he also, like me, welcome the proposal from my right hon. Friend the Member for Birkenhead (Frank Field) for a register of the beneficial owners of property in the UK to tackle money laundering, often linked to tax evasion?
First, we are introducing a register of the beneficial ownership of companies and trusts that need to pay tax, and of course banks must therefore comply with it. Secondly, we are introducing—this will be in the Queen’s Speech—a new criminal offence of facilitating tax evasion, which will apply to the corporate sector in Britain as well. That is in addition to the criminal offence we have introduced that says ignorance is no defence when someone comes before the courts if it is found that they have been evading taxes.
Tax havens lead to a loss of revenue here as individuals can hide through opaque structures and businesses simply do not pay UK tax in respect of where economic activity takes place. Given the revelations from Mossack Fonseca, has the Treasury carried out a new assessment to calculate the scale and size of the revenue lost to the UK?
There are already a large number of ongoing investigations in respect of Panama, which we hope will lead to prosecutions, and the Government already had data on Mossack Fonseca. If there is additional information available in the Panama papers—despite our requests, the media organisations have not yet handed all that information over to us—we will act on it.
Can I ask the Chancellor to be more assertive and to go much further? Mossack Fonseca is the fourth biggest such firm in Panama, and I presume that there are dozens, scores or hundreds of smaller ones, and there will be many, many more in other countries. The scale and scope of this are likely to be astronomical. He and the Government need to go much further. We need to have a much clearer understanding of the scale of this. I ask him to make all the representations he can to the Panamanian authorities and other jurisdictions where similar activities are taking place.
To be frank, representations are not going to be enough with some of these jurisdictions. That is why we want international agreement to a blacklist that jurisdictions will go on if they do not comply with the norms that we are establishing on transparency, exchange of information and the like. Once they are on the blacklist, they are subject to penalties and punitive action—sanctions, if you like—so that it is clear that they cannot carry on doing business in the way they have been. If the whole world comes around on that—there was welcome support for this British-promoted concept at the G20 last week in Washington—so that we get that blacklist and that punitive action, I think that we will help to solve this problem.
Corporation tax cuts have been a central part of the Government’s economic strategy, and that strategy is working; there are 2.3 million more people in employment since 2010. The further cuts in the main rate announced at the Budget, which will bring it down to 17% by 2020, will benefit over 1 million companies, large and small. Lower corporation tax rates will support UK companies to invest and grow, creating jobs as they do so.
One of the justifications for the corporation tax cut was that businesses would pass it on to workers through the increase in the living wage. Evidence is now emerging that some companies intend to pocket the tax cut and squeeze conditions for their employees, so what steps do the Government intend to take to monitor that?
The cuts in corporation tax will result in greater investment in this country, and greater investment drives productivity growth, and productivity growth is what will drive higher living standards. Let us remember that it is this Government who have brought in the national living wage, and we have seen very large numbers of people see increases in their wages and salaries.
Owing to changes in personal independence payments, people with disabilities are set to lose £1 billion at the same time as corporation tax is being cut, so can the Minister honestly say that he is comfortable with prioritising big business over disabled people?
We are providing more support to help the disabled get into employment, but let me just make this point to the hon. Gentleman, and to the House: the way this country is going to be prosperous and able to afford good public services and support for the most vulnerable is by having a strong, growing economy, and competitive business taxes help us to have that strong, growing economy.
Is my hon. Friend aware that the Federation of Small Businesses has said that the decision to further lower corporation tax to 17% is an important statement of intent and will provide a boost for the affected firms? Does he agree that that will help to further underpin the enterprising economy that we need?
Does my hon. Friend agree that it is easy to trot out phrases such as “tax cuts for companies”, but it is vital that we have low corporation tax to attract investment into this country and to ensure that we have jobs here? The Chancellor has repeatedly encouraged companies to pass on tax cuts to workers, which is where they should go.
My hon. Friend is absolutely right to highlight that. All taxes are ultimately paid by people, but business taxes that discourage investment discourage the economic growth we need in this country, and that growth is what this Government are determined to deliver.
General Anti-tax Avoidance Principle
A general anti-avoidance rule was considered by an independent study group led by Graham Aaronson QC in 2011. The group recommended an anti-abuse rule for the UK because it felt strongly that it would strengthen and complement existing tools available to HMRC. The Government accepted the recommendation and introduced a general anti-abuse rule in 2013, striking the right balance between protection against avoidance and certainty for taxpayers.
One way to put an end to aggressive tax avoidance is a general principle—a principle, not a rule. I am sure the Minister understands there is a difference: people can find a way around a rule, but it is not easy to do that with a principle. Will the Government therefore back their public statements about tackling aggressive tax avoidance and legislate for a general principle of tax avoidance?
I remind the hon. Gentleman that the last Labour Government looked at this issue and declined either a general anti-abuse rule or a general anti-abuse principle because of fears of uncertainty. We believe we have got the balance right. However, alongside the introduction of the anti-abuse rule, we have brought in measures to deal with accelerated payments and promoters, we closed 40 tax loopholes in the last Parliament and we have announced 25 closures in this Parliament already. It is worth pointing out that avoidance is coming down.
Support for the Economy (South-west)
We announced at the Budget an extensive package for the south-west covering both rail and road: a new marine hub enterprise zone in Cornwall, a £4.5 million boost for ultra-fast broadband across the region and, to top it off, a £900 million devolution deal with the west of England. The south-west will also benefit from the income tax cuts and business rate reductions announced in the Budget.
One item that went largely unnoticed in the Budget was the £19 million for community land trusts in the south-west to mitigate the impact of second home ownership. How will that money be allocated? Will my right hon. Friend work with me and fellow Conservative MPs in the south-west to ensure that that money is put aside to help people to purchase plots and to help working people to get on?
My hon. Friend is right that we will be releasing £19 million for community-led housing in the south-west. I look forward to discussing with him how we might best approach that issue. We are also introducing a new right to build and reforms to planning, which will boost the custom-build sector in Cornwall and beyond.
Does my right hon. Friend agree that the Labour Government underfunded infrastructure projects in the south-west, resulting in lower productivity in the region and hence less of a contribution to the national economy than we should have had, but that it is this Government who are turning that around with their huge £7.6 billion commitment to infrastructure and connectivity?
I welcome the opportunity to say something about what this Government are doing on infrastructure in the south-west. We have 35 projects in the infrastructure pipeline in the south-west with a value of £23.2 billion. At the Budget alone, we announced improvements to Exeter St David’s station, at Weston-super-Mare and at Cheltenham Spa station. I have already mentioned community housing. There is also a fund to provide more and better roads in the south-west.
We are continuing our support for solar, keeping the small-scale feed-in tariff scheme open beyond January 2016, setting tariffs on a path to help transition the industry to a sustainable, subsidy-free future.
I thank the Exchequer Secretary for that very short answer. Given that the EU’s VAT reform action plan will give Governments discretion in applying rates of VAT, including on solar power, will he confirm categorically to solar installers in my constituency that the UK has officially and permanently dropped the proposal to hike solar VAT to 20%?
The reduced rate of VAT remains in place on all 11 of the categories of energy saving materials. Following the decision by the European Court, we have consulted interested parties on the issue and, given the complexities involved, we are still considering the responses.
Does my hon. Friend agree that about 90% or more of the solar-powered energy available in Britain has been put in place under this Government? Does he also agree that, in order for intermittent renewable power to provide a steady baseload, the investment with which the Government are supporting battery technology is absolutely key?
My hon. and learned Friend is, of course, right on multiple counts. Solar has been a great British success story: more than 99% of the installed solar PV capacity has happened since May 2010. He is also correct to say that the development of battery technology here and elsewhere is incredibly important for the future.
I am sure that the Exchequer Secretary will welcome the report published today by the Environmental Audit Committee, which finds that membership of the European Union has been overwhelmingly positive for the UK’s environment. Our Committee is also conducting an inquiry into the Treasury’s approach to sustainability and the environment. Will he encourage his colleague the Chancellor to come before the Committee to discuss the Treasury’s approach to solar power, offshore wind, waste and recycling policy?
I look forward to reading the hon. Lady’s report. The Treasury takes a balanced approach to making sure that we stay on target to meet our commitments. We are on target to meet our commitment of 15% of renewable energy by 2020, but we must do so in a cost-effective way, recognising that the subsidies to early stage technologies can only be paid for by taxpayers.
Will the Exchequer Secretary join me in congratulating the UK solar power industry on being one of the top 10 in the world? It is larger than that in Australia and slightly smaller than that in Spain, despite having a rather less advantageous climate.
Indeed. Were it only the case that the sun would always shine. Under Labour, we had the highest dependency on fossil fuels in the G8 and the lowest contribution from renewable energy of any major EU country. As I said earlier, the deployment of solar power has been a great success story since 2010.
One of the big things this Government could do to help solar and, indeed, all renewables is to remove the double charge on storage, whereby storage is charged when it takes on the power and charged again when it gets rid of the power and puts it back in the grid. Will the Treasury consider changing its approach and helping storage? It could do so with a stroke of a pen and it would make a huge difference. I urge the Treasury to stroke that pen and make sure that that change happens.
The tariffs are designed to make sure that there is a reasonable and appropriate return to investors. They have to be adjusted periodically when costs come down. Of course, one of the great parts of the success story of solar is the fact that costs have come down by about two thirds since 2010.
According to the Solar Trade Association:
“Government will be spending just 1% of new expenditure under the Levy Control Framework supporting solar power…yet mainstream analysts expect solar power to dominate future energy supply.”
With that in mind, will the Chancellor promise to do much more to ensure that Britain becomes a market leader in the industry, or are we going to let China take the lead yet again?
UK-Iran Financial Transactions
The Government fully support expanding the UK’s trade relationship with Iran. The Treasury is actively liaising with UK banks and industry bodies, to understand concerns and help re-establish financial channels between the UK and Iran.
Despite the improving diplomatic relations between the British and Iranian Governments, UK businesses still face significant barriers to completing legitimate banking transactions for trade purposes. Will the Minister look at what more can be done to help to facilitate financial transactions between UK and Iranian banks, so that the UK economy can begin to benefit from this new market?
I thank my hon. Friend for her question. She is right that the situation with the payment channels between the UK and Iran is quite challenging, particularly because the US still has its primary sanctions in place. We have been speaking to banks at the highest levels. We have also been liaising with the US authorities to push for further clarity for UK banks. It is worth pointing out that some banks have a more extensive US business than others do, and that therefore it might be worth companies in my hon. Friend’s constituency and elsewhere considering switching to banks that have less exposure in the US.
Given the opportunities for British businesses in Iran as a result of the relaxation of sanctions, could the Treasury have a word with our friends the Americans to make sure that they do not seek to use their banking regulations to prevent some of the commercial deals that may flow to British companies as a result of that relaxation of sanctions?
My right hon. Friend is right to highlight one of the key issues. I assure him that we are working at all levels in discussions with the US authorities to ensure that British companies selling to Iran are able to put that money into UK bank accounts.
It is Export Week, and I can announce that UK Export Finance has provided more than £15 billion of support to exporters since 2010 and UK Trade & Investment has more than doubled the number of businesses that it helps to more than 54,000.
UK industrial production and manufacturing output suffered sharp falls in February, and they remain well below 2008 levels. Meanwhile, the Office for National Statistics reported that house prices in London have reached an average of £524,000, which is 49% higher than their pre-recession peak and out of the reach of all but those who are on six-figure salaries or who have benefited from a trust fund inheritance. When will my constituents see the Britain held aloft by the march of the makers, and the economy rebalanced towards the north of England, as the Chancellor promised?
I encourage the hon. Lady to seek an Adjournment debate to elaborate further on her question. I am sure that she and her constituents will welcome the fact that employment in the north-west is at the highest level on record; that more than 89,000 businesses in the north-west will not pay business rates; and that 360,000 people in the north-west will now benefit from the living wage.
British exports to China have more than doubled since 2010, led by Havant-based manufacturers such as Colt and Lewmar. Will the Minister join me in congratulating those businesses, and will she encourage others to follow their lead by supporting and maintaining the Government’s pro-export policies?
It is wonderful to hear during Export Week about Colt and Lewmar, and their fantastic work exporting overseas. It is a key priority of the Government to continue to encourage more firms to export. In fact, we have ambitious aims to have another 100,000 businesses exporting over the life of this Parliament.
The current account deficit is at a post-war high of more than 5% of GDP, and 44% of our exports go to the European Union. It took Canada seven years to negotiate a free trade agreement with the European Union. Does the Minister agree that the last thing that exporters need, and the last thing that the one in 10 jobs that depend on our exports to the EU need, is the uncertainty that the referendum is bringing—and, indeed, that Brexit would bring—to them and to those jobs?
The last time I looked, I thought it was also Labour policy to have such a referendum, but I agree with the hon. Lady that it is very important that she and others get out the message about the value of exports and the importance for manufacturing of the UK’s membership of the single market. That is why I shall vote in the same way as her on 23 June.
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
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?
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.
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?
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.
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.
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?
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.
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.
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.
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.
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.
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.
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?
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.
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?
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.
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?
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.
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.
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.
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.
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?
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.
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?
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.
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?
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.
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?
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.