Budget Statement — House of Lords, 2017-12-04
Topic: Macroeconomics
Dale Norman Campbell-Savours (Labour, Centre-left): My Lords, I will confine my remarks to Autumn Budget 2017, document HC 587. I will start with paragraph 3.78, which refers to online VAT fraud: "The government will legislate in Finance Bill 2017-18 to extend HMRC’s powers to hold online marketplaces Jointly and Severally Liable (JSL) for the unpaid VAT of overseas traders on their platforms to include all (including UK) traders" On the same issue, it continues: "where the business was not registered for VAT in the UK and that online marketplace knew or should have known that the business should be registered for VAT in the UK" How do they know unless they are aware of the UK business turnover? It suggests that there will be some sort of inquiry by the marketplace of the individual trader; perhaps that could be clarified. It goes on to say: "They will also be required to display a valid VAT number when they are provided with one by a business operating on their platform" What will happen if they are not provided with any number? Will they have to establish the turnover of the UK trader to know whether they have met the VAT threshold? If you take into account the early rumours of the VAT threshold reduction to £10,000 a year, which was mooted in the press over a number of weeks, that provision may well have been devised at the time when we were talking about a £10,000 threshold. It does not seem to apply now that it remains at the present rate I turn now to paragraph 3.41 which refers to alternative fuels. This year, the Government have chosen to end the fuel duty escalator on LPG. We are led to believe that next year there is to be a full review of all fuel duties. I appeal to the Government to further incentivise the treatment of LPG by reducing the fuel duty. It is less polluting for the environment and would greatly help in reducing air pollution. It could be of considerable benefit in conditions of inner-city pollution, such as in London, where it could be accompanied by concessions on the congestion charge Paragraph 3.51 concerns tackling waste crime. The report proposes that, "operators of illegal waste sites will become liable for Landfill Tax" What interests me about landfill tax is to what extent the higher rate of £86.10 per tonne is promoting illegal dumping operations. We all support the tax, but its effectiveness is totally dependent on enforcement. The allocation to the Environment Agency in the Budget of £30 million is clearly intended to fund investigation and the enforcement effort. But local authorities across Britain are complaining about the very substantial costs that are falling on them. They too need additional resources. For every Niramax waste-dumping scandal—where the alleged loss to HMRC was reputed to be over £75 million—there are hundreds of occasions where local authorities are required to deal with problems of fly-tipping, which in many areas is now completely out of control. Will the Government respond and deal with their financial difficulties, which all stem from landfill tax rates The Budget report includes some major reforms to vehicle excise duty. They are very welcome in dealing with pollution, but there is one historic reform that is back-firing. It is turning the law-abiding into Road Traffic Act offenders, causing deep distress to the elderly who unknowingly can make a mistake. It is tying up public officials in enforcement, and is simply unfair. I refer to the ending of the tax disc on the windscreen. The incidence of accidental non-compliance is up, as is the incidence of deliberate evasion. There were supposed to be savings of £10 million a year, and I think we should be told what has been the effect on the public finances. I have seen estimates of up to 1.33 million non-taxed vehicles on our roads and losses of up to £107 million in a year to the Exchequer arising out of this change. The irony is that an AA survey has estimated that up to 3 million drivers were keeping old redundant tax discs in their windscreens as a reminder to renew I raised the issue of the change in stamp duty a couple of weeks ago. The change appears to me to be of little consequence. The problem is housing shortage, as was mentioned by my noble friend Lady Blackstone. The stamp duty changes will work only in conditions of adequate supply. Buyers set a budget when they purchase homes. The budget is adjusted or set dependent on local supply, scarcity, affordability and interest rate forecasts. Whether the purchase price paid includes stamp duty or not is often not the issue. In a steady market, the purchase price paid includes stamp duty or not. The higher the duty, the lower the price. The lower the duty, the higher the price. It is the total cost that matters. The Budget is simply boosting the housing market by pushing up house prices, with a tax loss of £125 million in 2017 and £560 million in 2018-19 I asked the Government in a recent contribution to review the stamp duty surcharge. People are caught in a trap when buying and selling. If you buy and sell in a static or falling market, when houses are difficult to sell, you are particularly hurt as the house that you are selling is treated as your second home and you end up paying the 3% surcharge up front. People carrying bridging loans are particularly badly affected. I have argued for extending the second home resale period from three to five years, with payment payable only at the back end of the transaction and then only if the second home remains unsold I was going to deal with CGT payments, but my time is up.