Ways and Means — House of Commons, 2017-09-06
Topic: Macroeconomics
Wesley Paul William Streeting (Labour, Centre-left): It is a pleasure to follow my hon. Friend the Member for North Durham (Mr Jones), who gave a very comprehensive speech. I personally felt that there were some areas of the Ways and Means resolutions to which he did not do justice, but I am sure we will get a chance to return to those on another occasion "A revolutionary moment in the world’s history is a time for revolutions, not for patching"— those were the words of William Beveridge 75 years ago in his landmark report that paved the way for the modern welfare state. There is no doubt that we live in a similarly revolutionary moment. We are still in the long tail of the biggest economic crash since the great depression and the consequences that follow. We are on the brink of leaving the most sophisticated political and economic alliance in the history of the world, with consequences for our economy, a wide breadth of public policy and our citizens. We are also at the beginnings of an industrial revolution of a pace and scale that the world has never seen. Against that backdrop, the resolutions we are debating and the summer Finance Bill firmly fall into the category of patching In the time I have today, I will: specifically address the patching provisions in the Ways and Means resolutions; talk about the issues that are not addressed by the summer Budget and the Ways and Means resolutions; and touch on areas of Government policy that run completely contrary to our national economic interest. Ultimately, the patching measures in the Ways and Means resolutions are pretty small and fairly inconsequential given the wider economic impact of Government policy if that policy continues on the course that the Government have set out I turn first to the issue of patching. We heard from the new Chair of the Treasury Committee, who I am absolutely delighted has been elected. I have no doubt that she will fill the enormous shoes of her predecessor. As I have been re-elected to the Committee from this side of the House, I very much look forward to working with her and other cross-party colleagues. As both she and the Minister set out today, the Treasury Committee raised a number of concerns following our evidence gathering. We listened to a wide range of evidence from tax specialists, representatives of small and medium-sized businesses and, indeed, those businesses themselves on the consequences for them of pursuing the Making Tax Digital policy as it was originally conceived As other hon. and right hon. Members have said, there is no doubt that there are many benefits for the Revenue and potentially for businesses against the wider backdrop and the move to digitalisation. But there was a serious concern for small and medium-sized businesses in particular about the impact, which—granted—could be unintended. None the less, it would be red tape and bureaucracy for small and medium-sized enterprises that cannot really afford the extra burden. It should be the intention of the Government in any case when pursuing policy to try to implement it in a way that is not burdensome for SMEs or large corporations. We should seek to legislate and regulate effectively, which does not necessarily always mean heavily There was a concern that the timing of Making Tax Digital, as it was originally conceived, would have created an unnecessary and unwarranted burden on SMEs. There are more than 5,000 SMEs in my constituency alone. Since being elected to the House two years ago, I have made it my mission to speak up in their interests. I was therefore pleased, during the summer Budget and when listening to the Minister this afternoon, to see that the concerns expressed by the Treasury Committee have been taken on board, that the deadline has been moved back and that there is still some degree of flexibility about when mandatory provisions will kick in. None the less, Ministers ought to take into account some further cautionary notes, particularly following the points made by my hon. Friend the Member for Bootle (Peter Dowd), the shadow Chief Secretary As the implementation timeline stands, we will be looking to implement Making Tax Digital for SMEs in spring 2019—an auspicious year because it happens to coincide with our departure from the European Union. If that departure is smooth, perhaps the Making Tax Digital process can be equally smooth, but I have yet to see any evidence that it will be, be that in Government position papers, the reaction in the Cabinet to different Government position papers, the reaction of colleagues on both sides of the House to the Government’s position, the reaction of all 27 EU member states to what the Government have put forward or the reaction of the European Commission. As far as I can see, there is currently no hope of a smooth exit from the European Union; in fact, we are in danger of crashing out of the European Union. If that is the case, and we are not able to provide stability and certainty to businesses at least over a transitional period while we exit the European Union, we will be adding Making Tax Digital on top of the new customs and border checks and the new compliance and regulatory regimes that businesses will be wresting with—if those are, indeed, in place by that time. Ministers need to keep an eye on wider events and to think about Making Tax Digital in that context. I hope that is something the Minister will reflect on There was an interesting exchange between my hon. Friend on the Labour Front Bench and Government Back Benchers over tax avoidance and non-doms. No one pretends the issue is easy. There is a booming business in tax avoidance; indeed, individuals and corporations pay huge sums to very clever accountants to minimise their tax liability. Of course, much of that is perfectly legal, but that does not make it right or ethical. What is often missed in the debate about tax avoidance, particularly when we listen to the protests of people who face a larger tax liability, is that, in the aftermath of the financial crash, with everything we have seen in terms of the impact of austerity on public service provision, the burden of taxation and wage stagnation—I will come to those wider, structural economic problems shortly—there is sometimes a real sense of detachment among those who have benefited enormously from the current economic order and those who have been at the sharp end.