Oral Answers to Questions – Northern Ireland – 2nd April 2014
Nigel Mills MP: What recent discussions she has had with political parties in Northern Ireland on dealing with the past.
Theresa Villiers MP (The Secretary of State for Northern Ireland; Chipping Barnet, Conservative): I hold regular discussions with representatives of the Northern Ireland political parties on a range of issues, including dealing with Northern Ireland’s past.
I continue to encourage party leaders to work towards an agreement on the past which is balanced and can command public support.
Nigel Mills MP: I am grateful to the Secretary of State for her reply. Does she think it has become harder to reach a deal on the past as a result of the on-the-runs issue, which was effectively an agreement on partial immunity for people who might be required to tell the truth about various incidents?
Theresa Villiers MP (The Secretary of State for Northern Ireland; Chipping Barnet, Conservative): The concern caused by the on-the-runs issue, and the fact that the scheme was not dealt with transparently, have set back the progress on dealing with the past. However, the proposals set out in the Haass seven document provide a good basis for further discussions and I welcome the fact that many of the parties have said that they can support that kind of architecture, despite the fact that further issues need to be resolved before an agreement is found.
Tobacco Products (Standardised Packaging) – 3rd April 2014
Nigel Mills MP: The Minister must know that she will never satisfy the health lobby on this issue. It has moved on to the idea of banning smoking for anyone born after the year 2000. Will she confirm that that is not part of her strategy?
Jane Ellison MP (The Parliamentary Under-Secretary of State for Health; Battersea, Conservative): The Government have a tobacco strategy that has been published. Today, I am presenting a statement about standardised tobacco packaging and nothing else.
Housing Costs – 3rd April 2014
Nigel Mills MP: I am sure that the Chair of the Committee would agree that the topic was not the easiest one for the Committee to reach agreement on, as the record shows. Does she agree that one issue is that the reforms are still in their early days and it is hard to find the data to work out whether they are being as successful as we would perhaps all like? Further efforts are needed from local authorities, local housing associations and others to ensure we are making the best and most efficient use of the housing stock we have.
Anne Begg MP (Aberdeen South, Labour): That is why we say in more than one of our recommendations that the Government need to encourage local authorities to collect data on how their housing stock is being used. We call for an analysis across councils of the availability of houses for people affected by the policy to move into.
We are going in exactly the right direction in trying to get the main rate of corporation tax down to 20%. That has been the direction of travel for this Parliament and it is the right place to be. I suspect that, if we get it to 20%, that will be the end of the journey, for the very good reason that having a corporation tax rate lower than the basic rate of income tax creates lots of interesting tax planning opportunities, as the previous Government found out when they had a small companies rate of
10%. Lots of strange people incorporated themselves as businesses—they looked a lot like one-man bands who ought to have been self-employed and made interesting tax deferrals or savings when pretending to be companies.
If we get to 20%, that is the end. I suspect that that is why we can no longer have a small companies rate of corporation tax that is lower than the large companies rate. If we lower one rate, we encourage behaviour that we do not want to encourage. It is right that we get both rates down to 20% and to have one rate of corporation tax. We can then scrap the hugely complex marginal relief calculation and everyone will know what rate of tax they pay on their profits. That has to be the right situation. A small growing business, whose profit increases during the year and suddenly hits more than a quarter of a million pounds, will wonder what tax rate it will paying in that year, so losing that whole calculation completely is a huge advantage.
John Redwood MP (Wokingham, Conservative): Does my hon. Friend agree that the review could very usefully come up with a 20% capital gains tax rate, too? I would settle for 20% capital gains tax, 20% corporation tax and 20% income tax. There would then be fewer tricks.
Nigel Mills MP: A symmetry of tax rates would make perfect sense. Whatever form of income one had, one would know what rate one was paying.
James Morris MP (Halesowen and Rowley Regis, Conservative): One of the issues in Britain is that not enough companies are starting up and then growing. One of the reasons for that is that we do not have enough symmetry and the tax system is too complicated. Does my hon. Friend therefore think it would be a good idea to get some simplicity into the system?
Nigel Mills MP: My hon. Friend is exactly right. I think many Members, not least the Minister, know of my commitment to tax simplification. I was tempted, knowing that we were debating corporation tax, to table my amendment yet again on rewriting the whole corporation tax code to one that is more understandable and less complex.
Andrew Love MP (Edmonton, Labour): The hon. Gentleman seems to be arguing that we might need a different policy mix for small businesses and for larger businesses. May I therefore invite him to reject the idea that the amendment somehow splits off small businesses from large businesses? We need a different policy mix.
Nigel Mills MP: I agree with the hon. Gentleman. There is eminent sense in having a lighter-touch tax regime for small businesses, with perhaps lower taxes in some areas for small business. We clearly do that: there is a separate regime for filing accounts. There is less expectation on small businesses, and, if only in the business rates field, there are exemptions for the very smallest businesses. I think we actually have that graduated system.
Andrew Love MP (Edmonton, Labour): Notwithstanding small business rates relief, does the hon. Gentleman accept that for a significant minority of small businesses, business rates are now greater than the rental payments they have to meet, and that therefore there is some merit to the proposal being put forward?
Nigel Mills MP: I might be tempted to agree that there is some merit in looking at the level of business rate cost, but I am not sure there is much merit in the proposal we are debating here this afternoon for yet another review. I welcome the measures the Government have taken to reduce business rates, or least reducing the increase through the 2% cap and discount for high street businesses. I think we are all very keen to see how we can help our high streets grow. That reduction has to be the right way forward.
Returning to the earliest of the series of interventions, on a 20% capital gains tax rate, companies that realise a capital gain will be paying at 20%. It is only individuals who will end up paying the higher rate. There is sense in having symmetry restored to that situation. I wholeheartedly support getting the corporation tax rate down to 20%. We could trumpet it around the world that we have one of the lowest rates in the G8. That long-term direction of travel has to be one of the most powerful ways to encourage investment in this country by the large corporations we want to see operating here. It would perhaps stop them setting up their headquarters in Switzerland, Ireland or elsewhere. This is now a trend we can see: large corporations choosing to bring more jobs to, and paying tax in, the UK.
Ian Swales MP (Redcar, Liberal Democrat): My hon. Friend is making a very good speech, as he always does on these matters. Will he join me in welcoming the fact that Hitachi has decided to relocate its rail headquarters to the UK, in the north-east?
Nick de Bois MP (Enfield North, Conservative): Some people may be seduced by the idea that it is only 1%, going from 20% to 21%, but for corporations coming into a tax level of 20%, the Opposition are effectively saying that they would increase corporation tax by 5%. Let us make that clear.
Nigel Mills MP: I am sure my hon. Friend’s maths are absolutely right.
If we are to review taxes and rates, I am intrigued by the idea of having, as my right hon. Friend Mr Redwood said, a wide-ranging dynamic assessment of tax rates. Let us have a look and work out exactly the right rates for various taxes. Are we in the right place, or are we throwing away revenue and destroying business activity by having certain rates
in the wrong place? I would like to understand the impact on small businesses of the jobs tax or employees’ national insurance. I would be keen to know the impact of fuel duty rates and of the tax on energy bills. I suspect those measures are doing far more damage to our small businesses, and the number of jobs they can support, than other things. A wide-ranging study of the impact of tax on small business could be an interesting exercise and could direct the way forward for policy. I suspect that it would not go in the area the Opposition want. They seem to want an expensive hike in the indirect taxes on manufacturing that do so much damage.
We ought to welcome people moving in the right direction. In 13 years in government, Labour favoured property taxes via the council tax. They hiked it up thinking that people would not notice. It is intriguing that they have now realised that it is extremely unpopular for those taxes to get too high, and that perhaps it is easier to try to focus on direct tax rates.
In conclusion, the Opposition amendment is in many ways a complete waste of our time. It is absolutely right to get the corporation tax rate down to 20%. I suspect that that is the end of that journey and then we can look at various other measures to support small businesses. Reducing the main rate down to 20% will not stop our support for small businesses. Let us get on and do it: it is the right thing to do.