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House of Commons Hansard
19 December 2017
Volume 633

    (Clauses 8, 33, 40 and 41, Schedules 9 and 11 and certain new Clauses and Schedules)

    [2nd Allocated Day]

    Further considered in Committee

    [Mrs Eleanor Laing in the Chair]

    New Clause 6

    Equality impact analyses of provisions of this Act

    ‘(1) The Chancellor of the Exchequer must review the equality impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.

    (2) A review under this section must consider—

    (a) the impact of those provisions on households at different levels of income,

    (b) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010),

    (c) the impact of those provisions on the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and

    (d) the impact of those provisions on equality in different parts of the United Kingdom and different regions of England.

    (3) A review under this section must give a separate analysis in relation to the following matters—

    (a) income tax (in sections 1 and 3 to 6),

    (b) employment (in sections 7 to 10),

    (c) disguised remuneration (in sections 11 and 12 and Schedules 1 and 2),

    (d) pension schemes (in section 13 and Schedule 3),

    (e) investments (in sections 14 to 17 and Schedules 4 to 5),

    (f) corporation tax and other aspects of business taxation (in sections 2, 19 to 32, 36 and 37 and Schedules 7 and 8),

    (g) the bank levy (in section 33 and Schedule 9),

    (h) settlements (in section 35 and Schedule 10),

    (i) stamp duty land tax (in sections 40 and 41 and Schedule 11),

    (j) air passenger duty (in section 43),

    (k) vehicle excise duty (in section 44), and

    (l) tobacco products duty (in section 45).

    (4) In this section—

    “parts of the United Kingdom” means—

    (a) England,

    (b) Scotland,

    (c) Wales, and

    (d) Northern Ireland;

    “regions of England” has the same meaning as that used by the Office for National Statistics.”—(Dawn Butler.)

    This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of the provisions of the Bill on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a regional basis

    Brought up, and read the First time.

  • I beg to move, That the clause be read a Second time.

  • With this it will be convenient to discuss the following:

    New clause 7—Equality impact analyses of provisions of this Act (No. 2)

    ‘(1) The Office for Budget Responsibility must review the equality impact of the provisions of this Act in accordance with this section within six months of the passing of this Act.

    (2) A review under this section must consider—

    (a) the impact of those provisions on households at different levels of income,

    (b) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010),

    (c) the impact of those provisions on the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and

    (d) the impact of those provisions on equality in different parts of the United Kingdom and different regions of England.

    (3) A review under this section must give a separate analysis in relation to the following matters—

    (a) income tax (in sections 1 and 3 to 6),

    (b) employment (in sections 7 to 10),

    (c) disguised remuneration (in sections 11 and 12 and Schedules 1 and 2),

    (d) pension schemes (in section 13 and Schedule 3),

    (e) investments (in sections 14 to 17 and Schedules 4 to 5),

    (f) corporation tax and other aspects of business taxation (in sections 2, 19 to 32, 36 and 37 and Schedules 7 and 8),

    (g) the bank levy (in section 33 and Schedule 9),

    (h) settlements (in section 35 and Schedule 10),

    (i) stamp duty land tax (in sections 40 and 41 and Schedule 11),

    (j) air passenger duty (in section 43),

    (k) vehicle excise duty (in section 44), and

    (l) tobacco products duty (in section 45).

    (4) In this section—

    “parts of the United Kingdom” means—

    (a) England,

    (b) Scotland,

    (c) Wales, and

    (d) Northern Ireland;

    “regions of England” has the same meaning as that used by the Office for National Statistics.

    (5) The Chancellor of the Exchequer must lay before the House of Commons the report of the review under this section as soon as practicable after its completion.” .

    This new clause requires the Office for Budget Responsibility to carry out a review of the effects of the provisions of the Bill on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a regional basis.

  • New clause 6 stands in the name of my right hon. Friend the Leader of the Opposition and those of other Members on both sides of the House. The aim of both new clauses is basically to help the Government. We want them to set an example to every Department and public sector organisation by fulfilling their own obligation under the public sector equality duty and publishing a meaningful equality impact assessment. The equality duty covers nine protected characteristics: age, disability, gender reassignment, pregnancy, maternity, race, religion or belief, sex and sexual orientation.

    The Prime Minister says that she understands the problems faced by members of protected groups and that her Government are committed to tackling inequality in the ways set out in the equality duty, but one thing confuses me. If she understands all that, why does she allow her policies to undermine and hurt women and other groups with protected characteristics? Such “words over deeds” undermine people’s trust in politics and politicians.

    How can I be sure that the Prime Minister knows these problems so well? There have been two stand-out moments. The first was in 2010, when the Prime Minister said:

    “there are real risks that women, ethnic minorities, disabled people and older people will be disproportionately affected by proposed cuts to public spending.”

    The second was when she said, on the steps of No. 10, that she wanted to tackle the “burning injustices” in our society. But all that she has done is make things worse. She has added fuel to the fire, and those injustices now burn brighter than ever. The Chancellor said that this Budget would be full of new opportunities—for whom? He failed to address the position of women born in the 1950s, violence against women and girls, the crisis in social care, falling wages, and a social security system that is leaving millions of children in poverty.

    I am sure that the Minister will disagree with some of what I am saying, but let me challenge him. This is his opportunity—his moment—to carry out a comprehensive equality impact assessment, publish it, and prove me wrong.

  • One of the issues that my hon. Friend has not mentioned—although I am sure that she will come to it—is the underfunding of women’s refuges.

  • My hon. Friend is right: I will indeed come to that issue.

    As we approach Christmas, I ask the Minister to consider the impact that the Government’s policies are currently having. More than 128,000 children will be in temporary accommodation over Christmas, women’s refuges—as my hon. Friend has just said—are in crisis, and universal credit will leave people penniless and homeless over the Christmas period.

  • It is not nonsense. I challenge the Minister to sit in one of my surgeries and hear that it is not nonsense.

    The Government have made £28 billion-worth of cuts affecting 3.7 million disabled people, and the additional caring responsibilities have fallen on the shoulders of women. It is the same with the cuts in social services—women take up the slack—and the pay cap, which hurts women more than men. Indeed, 86% of the Government’s cuts are falling on women. Labour Members are not the only people who are saying that. In June, the UN Committee on Economic, Social and Cultural Rights said that the Government’s changes adversely affected

    “women, children, persons with disabilities, low-income families and families with two or more children.”

    If the United Nations can see that, and if Labour Members can all see it, why can the Government not see it and do something about it? The best policies are evidence-based policies.

  • How, for instance, have the Government’s policies affected people of colour? Research carried out by the Equality and Human Rights Commission showed that average losses in black households amount to about 5% of net income, more than double the figure in white households. It also concluded that lone parents lose about 15% of their net income—on average, £1 in every £6—compared with other families, who lose from nothing to 8% depending on how wealthy they are. How have the Government’s policies affected people working on low incomes? There are 8.9 million people in working households who live in poverty. That is a record to be ashamed of. It has been seven years! Even Scrooge would have seen the error of his ways by now.

    The Government are failing, even on their own terms, to promote equality, fight discrimination in all its forms and introduce transparency. Equality audits should be carried out at the development stage of any policy. Once a policy has been implemented, there should be post-legislative scrutiny. That is good government. The Government should not be scared of impact assessments; they should embrace them, which is exactly what a Labour Government will do. They should not be denying that there is a problem. We hear that type of rhetoric from the Prime Minister every Wednesday. We tell her that there is a crisis in the NHS”; she says, “Oh no there isn’t”, and we say, “Oh yes there is.” It is like the Christmas panto every Wednesday, and not in a good way.

    Having a detailed understanding of how policy choices exacerbate or eliminate inequality at every stage of the policy-making process is the key to tackling burning injustices and producing good policies. It is no good saying things that one does not mean. The only impact assessments in the 2017 Budget documents are the tax information and impact notes, also known as TINs. They contain only a sentence or two about equality impacts. I say to the Minister, and to the Chancellor, “Be less like the TIN man, and have a heart.” Let us do more than TINs. Let us have a full comprehensive equality impact assessment and publish it, so that we can make this country a fairer place for the many and not the few.

    If the Chancellor and the Minister will not listen to me, or to the Institute for Fiscal Studies, the Equality and Human Rights Commission, the Women’s Budget Group, the Runnymede Trust or the House of Commons Library, perhaps they will listen to the Women and Equalities Committee, which was set up by the Prime Minister with a member of the Conservative party in the Chair. It has said that greater transparency is essential in order for the Government to demonstrate that they have fulfilled their obligations, and recommended that evaluations should be commissioned for the equality analyses accompanying all future spending rounds and fiscal events. I hope that all members of that Committee will join us in the Aye Lobby today. After all, it was their work and their report that helped to generate this debate.

    Before the Minister responds, I want to help him by dealing with some of the arguments that we expect to hear from him. The Government say that it is not possible to do a full impact assessment, but I say, in full pantomime muster, “Oh yes it is!” The Women’s Budget Group and the Runnymede Trust have done just that. One Minister misquoted what the IFS said in 2011. In fact, the IFS went on to describe ways in which the Government could fulfil their obligations with very little effort, and with just the will and the heart to do so. The Government have said that it is not possible to analyse the impact of changes in tax and benefits on women and men in couples, and I say again, “Oh yes it is!”

    Analysis can assume income is shared equally; may I highlight one problem that Labour solved and the Conservatives have now recreated? The decision to pay tax credits to the main carer, rather than the main earner, was a decision made by a Labour Government in 1997, and it was based on evidence—evidence that money paid to women was more likely to be spent on children than money paid to men. Universal credit has just reversed all of that. If this Government conducted proper impact assessments, they would know this stuff.

  • My hon. Friend is making an interesting point. I am sure she agrees that, given that this Government and the previous Government talked about £12 billion in cuts, and therefore universal credit must fit that target, that is why they will not conduct an impact study.

  • Absolutely. My hon. Friend makes a powerful statement, and it points to the crux of the new clauses: if the Government would only do impact assessments even as the policy goes forward, they would be able to say, “Okay, this isn’t working: it’s hurting; it’s damaging people. Let’s do something different.” But, in their arrogance, they refuse to do that.

    The House of Commons Library uses a different calculation in its assessments. I admit that some of the assessments are not straightforward, but that does not mean that they should not be done; after all, they are the Government. Most recently, the Government have argued that the equality impact analysis carried out by the Women’s Budget Group and the Runnymede Trust does not take into account the impact of increases to the national living wage or spending on services that benefit women such as health, education, childcare and social care. I say again: “Oh yes it does.” Their report, “Intersecting Inequalities”, includes the impact of both the national living wage and changes to spending on a wide range of services. When the cuts to services are added, the impact is more severe. The Treasury says that individual Departments are responsible for the equality impacts of their own policies; yes they are, but the Treasury should also be responsible for publishing the equality impact of policies, since it sets the overall budget limits, and any impact assessments carried out should be available for everyone to see, and not hidden away.

    The Government’s arguments are just excuses, allowing them to evade accountability for the impact of their policies. That shows a lack of commitment to tackling the major inequalities in our society. This Government are so evasive: we are still awaiting a response to the cross-party letter sent to the Minister for Women and Equalities on 29 November highlighting major concerns on this very issue.

    If we were in Scotland or Wales, we would be legally obligated to carry out and publish equality impact assessments. We are the mother of all Parliaments and we should be leading the way. What is wrong with getting the facts and making policy based on them? That is sensible and it is right; people outside this place will not understand what the reluctance is all about.

    The Minister will probably talk in his response about “due regard”, but what does “due regard” mean? There is some legal definition of due regard. The courts have said that it means sufficient information, so even on a lower bar of “due regard” this Government and their Departments are still failing, as they tend to produce superficial equality impact assessments.

    I concede that more needs to be done to establish robust analysis, but if Scotland and Wales can do it, why cannot we? Current analysis should be taken as a starting point for Government action, not an excuse for inaction, so I call upon the Chancellor to give the country a Christmas present and to commit to doing things properly.

    As my Christmas gift to the Government, here are three things as a start in that process. First, they should consider the impact of their policies at all stages of the legislative process. That means the Government examining the differential and intersectional impact of their policies and, if necessary, changing course to ensure equality of outcome. Secondly, they should work with organisations such as the Equality and Human Rights Commission, the Women’s Budget Group and the Runnymede Trust to produce analysis with a high level of detail. Thirdly, they should commission the Office for Budget Responsibility to carry out an independent review into the effects of the provisions of this Bill.

    Everyone in this House can help tackle the burning injustices that blight our country today by voting for new clauses 6 and 7.

  • I rise to speak in support of new clauses 6 and 7, moved by my hon. Friend the Member for Brent Central (Dawn Butler).

    Under the public sector equality duty, all public bodies, including the Treasury, are obliged to have “due regard” to the impact of their policies on equality. Yet, once again, this Government have refused to carry out a meaningful equality audit of their Budget.

    I am grateful that the House of Commons Library has done research, and it has consistently shown that 86% of the burden of Tory tax and benefit changes since 2010 has fallen on the shoulders of women. Today, I will tell the stories of women impacted by this, and show how they are bearing the brunt of failed Tory austerity.

    Women make up two thirds of public sector workers so have suffered most from the Tories’ pay cap. Women have to struggle with more caring responsibilities due to the ever-increasing gap in social care funding. Some 54,000 women a year are forced out of their jobs through maternity discrimination. Women in my constituency of Rotherham earn 11.9% less on average than men. And, shamefully, 94 women and 90 children are, on a typical day, turned away from refuges due to lack of space, according to Women’s Aid.

    Let me talk about some specific cases. I want to talk about Martha, a single mother. A recent report by the Runnymede Trust and the Women’s Budget Group shows that by 2020 single mothers like Martha will have experienced an average drop in living standards of 18% since 2010. As a part-time NHS worker, Martha’s real pay has been slashed under the Tories. NHS staff have suffered a 14% real-terms pay cut since 2010. With inflation at a near six-year high of 3.1%, more and more women like Martha are struggling to put food on their table. Martha is not just about managing; Martha is only just about surviving.

    The Women’s Budget Group and the Runnymede Trust analysis shows that black employed women, like Martha, are set to lose the most from cuts and changes to universal credit—around £1,500 a year. These changes include cutting the first child premium, which came into effect this year and would have been worth £545 a year to Martha.

  • A good example of the burden being been put on women is through tax adjustments. In the last Government and this one, women have lost £14 billion in that way. Another good example is Sure Start. Women cannot get out to work because there are no Sure Start facilities.

  • That is the biggest frustration. We need the Government to audit all their policies and start to recognise the trends when certain groups are disproportionately impacted. We all pay our taxes and we all want the same services, but surely the best thing for the economic growth of this country is for everyone to be able to reach their economic potential. That is surely the best way to get this country back on its feet economically.

    According to research by the Child Poverty Action Group, 61% of parents working part time who wanted to work more hours said that the cost of childcare was a barrier, and no wonder, when Government cuts mean that there are now 1,240 fewer Sure Starts than there were in 2010. Yet there was no mention of childcare in the recent Budget. When 41% of women in work have part-time jobs, compared with just 13% of men, it is clear how these policies have a disproportionate impact on women. An equality impact assessment would put a spotlight on those inequalities and on the need for action—but of course we can only assume that that is why the Government refuse to carry out such assessments.

  • It is not just younger women who are being failed by Tory economics. Martha’s aunt, Rita, was born in 1956. She has worked all her adult life in an old people’s home. The Tories moved the goalposts for Rita by accelerating the rise in the women’s state pension age. Rita has done the right thing. She has been planning her retirement for years, and she is exhausted. Now, she has to work years longer than planned and years longer than she is physically able to. Rita is hoping for a healthy retirement, but, like many people of her age, she is deeply concerned that the £6 billion that has been taken out of social care since 2010 will make it impossible for her to have a healthy, secure retirement. More than 1 million of our elderly people are not receiving the care that they need. Where is the reassurance for Rita when we have a Chancellor who does not even mention social care in the Budget? In a leaked 2010 letter to the then Chancellor, the right hon. Member for Maidenhead (Mrs May) said:

    “There are real risks that women, ethnic minorities, disabled people and older people will be disproportionately affected by proposed cuts to public spending”.

    Well, the right hon. Lady, now the Prime Minister, was not wrong. From tax credit cuts to the crisis in social care budgets, it is women who have consistently been hit the hardest by Tory austerity.

    I am immensely proud of Labour’s manifesto commitment to gender audit all our policies and legislate for their impact on women before their implementation. It is shameful that we have to keep challenging the Government to do their legal duty and ensure that their policies are not disproportionately impacting on one particular group. There is virtually no one on the Tory Benches at the moment—and not one woman—so I have to question whether the Government are serious about equality. But if they are serious about equality, and economic equality in particular, they must take action. The simplest way for them to do that would be to support new clauses 6 and 7.

  • I rise to make my case to the five Conservative MPs on the Government Benches today. Inequality is an incredibly expensive business for everyone. I am pleased to see five fellow feminists sitting among the many of us on these Benches—

  • Goodness! The Minister says eight, but I can assure him that we have a good many more than eight feminists in total on this side of the House if he would ever like to test us. Our policies and our manifesto certainly speak to that fact.

    The case that I want to make to the five men on the Tory Benches, given that gender inequality and equality impact assessments can sometimes be seen as special-interest issues, is that everything we are doing today is in everyone’s interest. Inequality costs us all dear. It holds everybody back in our society. Indeed, feminism is not about women; it is about the fact that power is unequally balanced in society so that 51% of those in our communities miss out on achieving their potential. That is what is behind new clauses 6 and 7. Good data help to drive good decisions. It is also good for Governments to follow their own policies. We have a public sector equality duty in this country, but the fact that the Government are not following it themselves makes it much harder for them to force other people to do so. Ultimately, we are here today to make the case that Britain will be better when we know more about the conditions that we face and about what impact policies are having.

    Let me start with that cold, hard economic argument, because I am sure that the Minister, who once proclaimed his feminist credentials, already knows this, but I am not sure whether it has yet been put on the record. Bridging the gender gap would generate £150 billion in GDP by 2025. The economy has been struggling with a productivity problem for decades, and there is nothing stronger or faster that we could do to address that than to ensure that everybody in our society is able to realise their potential, but we should do more to help women in particular. We need to tackle the barriers and the discrimination they face that means they do not have that level playing field. Indeed, studies show the strong correlation between diversity and economic growth, so those who think that this is special pleading do not understand the maths behind the case Labour is making today. I would argue that the reason why they do not understand the maths is that we do not do the calculations, which is why it is so important to get the data.

    Data is a good thing. It leads to difficult conversations. It makes us ask why, after the Equal Pay Act was passed in 1970, we still do not have equal pay in this country. I was born after that Act came into effect, but if the current policy continues, I will be dead before we have parity. That harms us all, because the 14% pay gap between men and women is not stagnating, but growing. There will be women in our constituencies who are missing out on equal pay because we are not acting as a country. Having this kind of data helps us to ask why that is and whether Government policy is helping to minimise the gap or exacerbate it.

    This is not just about gender. The gap is much worse for women from ethic minority communities. The pay gap is 26% for Pakistani and Bangladeshi women and 24% for black African women. This is also not just about ethnicity, because the same applies for disability and age. Only 36% of women in the constituencies of the Conservative male Members here will be getting their full state pension. When those women come to see those Members about the Women Against State Pension Inequality Campaign, they are coming because they have been living with poverty for decades. They are asking for help to make things right, because they do not want to be dependent on the state. They want a level playing field, but historical inequality in our society has held them back, and it is holding us back now. Having the data helps us to understand where that is happening and why. It would show us whether Government policies—individual Budgets—are going to make it easier to tackle that inequality, so that fewer women will come to constituency surgeries asking for a referral to a food bank, or whether they will make things worse.

    If the Government want to tackle inequality, they need to know that data also tells us that this Budget, and the Budgets of previous years, are causing more problems. I do not doubt the sincerity of the five Conservative Members here or that they do want to tackle inequality in our society, but when I look at this Budget I do doubt whether they are going to be able to do that. This Budget will hit women 10 times as hard it will hit men—13 times for women from an ethnic minority background. Going back to the equal pay issue, 43% of people in society do not earn enough to benefit from raising the personal income tax threshold, and 66% are women. We have unequal pay in our society, so 73% of the people who will benefit from changing the higher rate threshold will be male. Having the data and then looking at what is being done with tax and benefit policies will help us to understand just how much further this Budget is moving the goalposts for women and ethnic minorities. This applies to other policies, too. Corporation tax changes disproportionately benefit men, because we still do not have parity in the boardroom, in enterprise or in the number of women shareholders.

    The lack of data also leads to bad decision making. As my colleagues have already set out, this Government have not done any equality impact assessments to understand just how far the goalposts are moving in getting to this House’s shared aim of an equal society. Tax information and information notes dismiss the issue and do not help Ministers to make good decisions. I am sure that the Minister, with his feminist soul, wants to make good decisions, but those assessments claim that there is little or no impact. Indeed, we do not even have TIINs for all the policies that we know have a differential impact such as excise duty rates or fuel duty giveaways, because we live in an unequal society.

    The lack of data also means that Ministers simply cannot come to the Dispatch Box and tell us that any concerns we may have about the differential impact of individual tax and benefit changes can be offset by the impact of other policies. If we do not know the impact of one policy, how can it be said that that can be offset by another? Even if we are concerned that men have received a windfall from Budgets for several years, it is simply not good enough for Ministers to try to tell us that women are being compensated through public services, because they cannot provide the analysis to show us that either case is true. Indeed, when we look at the impact of public service cuts—surprise, surprise—women, ethnic minorities and the disabled tend to be disproportionately hit again.

    As I said at the start, it is also a matter of following our own laws. The public sector equality duty came into force in this country in 2011. It is a legal requirement, and it has driven some of these difficult conversations, whether in the Bank of England or in the BBC. It helps us to challenge everyone to do more to unlock the potential of every member of our society by reducing barriers and breaking down the discrimination that means, 40-plus years on, we still do not have equal pay.

    If the Government themselves are not upholding their duties, what hope do we have in asking other organisations to do so? It is important to recognise that the legal duty is not passive. It is a duty not just to manage inequality but to do something about it. It is a duty to know the numbers before we make a decision so that we do not make things worse, as this Budget clearly does, and it is an ongoing duty that cannot be delegated. Ministers cannot leave it to a civil servant in the back office; they have to take direct responsibility. Crucially, it is a duty that, once a problem has been identified, the Government have to act, and not having the resources is no excuse for not acting.

    The arguments Ministers are making against calculating the figures are not just about the practicalities, but they are completely surmountable. As the Women’s Budget Group, the Fawcett Society and the Institute for Fiscal Studies have shown, it is perfectly possible to make these calculations, and it is worth doing because it would help the Government to make better decisions. That it is possible to do it both for individuals and for households is important because, as my hon. Friend the Member for Rotherham (Sarah Champion) said, single parents, who tend to be women, are disproportionately hit by these changes. Even if the Minister were to quibble about calculating the figures across households, we could certainly see the impact we are having on some of the most vulnerable people in our society.

    The reason why we have called it “lady data” is to try to help Ministers understand what they are missing and why it matters, but in truth this is everyone’s data. Getting this right and having that information would help us to make better decisions and would help us to understand why it will take us 100 years from today to have parity, so that women who are still struggling with unequal pay—including women in the communities of the Members to whom I have referred—can have some confidence that they may still live to see that wonderful day when everyone in this society is treated equally and so that people from ethnic minority backgrounds and disabled people living in poverty, and a poverty that is getting worse, can have some confidence that the Government are not ignoring them but understand where the challenges are and are considering a Budget that will do something about it.

    Frankly, when we see the analyses that are being done, we know why the Government oppose new clauses 6 and 7. They do not want to do the maths because the figures tell the ugly truth about the inequality we have in Britain and its stubborn supporters, who unfortunately sit on the Government Benches. Jane Addams said:

    “Social advance depends as much upon the process through which it is secured as upon the result itself.”

    We cannot take the journey to a more prosperous, more successful and more egalitarian Britain if we do not know the direction of travel. The numbers will give us the direction of travel, but it is the political will that will give us the way forward.

    Ministers should not dismiss this case as special pleading but should look at the economic argument for why tackling gender inequality matters and vote accordingly today to put Britain on a better path, because everyone will be richer for it.

  • As my hon. Friend the Member for Brent Central (Dawn Butler), Labour's shadow Minister for Women and Equalities, said, new clause 6 would require the Chancellor to carry out and publish a review of the Bill’s effect on equality. In short, it touches on the fundamental difference between the Labour party and this failing Government, whose policies work for only the richest few. New clause 6 seeks to shed light on the truth of who benefits from Government choices and who does not.

    In order to change society, we must understand society; and in order to have a fully functioning democracy, we need transparency. People in my constituency deserve to know what is going on, not least because this Government are failing the country on so many levels that it is hard to know where to start.

    New clause 6 refers to equality in relation to

    “households at different levels of income”.

    Real pay has fallen and is now lower than it was in 2010. Too many jobs that have been created are insecure and entrench poverty through low pay. These employment models fuel inequality, and certain parts of the country, particularly in my north-east region and my constituency, have a disproportionate number of workers on these contracts, where there has been a long-term move towards casualisation. This poverty is not just about worklessness; 60% of people in poverty live in a UK household where someone is in work. Many professionals have joined the queues at food banks, where, nationally, 1.4 million emergency food parcels were handed out last year—that has to be a perfect symbol of a failed state, does it not—yet the Government just don’t get it.

  • Britain has the fourth highest level of inequality in Europe and the immediate future does not look any brighter, thanks to Government policies. The Institute for Fiscal Studies has predicted that inequality is likely to increase. The shocking facts are that 3.7 million children are living in poverty in the UK, 1.7 million of them in severe poverty—and this in the sixth richest economy in the world! Conservative Members scoff at us for not applauding the increase in jobs and scowl at us for not subscribing to their mantra that work is the best way out of poverty, but this is because we live in the 21st century, where work for many is short-term, low-paid, precarious and far away, and therefore exacerbates the poverty that many in my community face. Of course worklessness is not the solution; secure, good quality, higher paid jobs are the solution.

    The review proposed in new clause 6 is comprehensive and inclusive, addressing economic inequality from a number of often intersecting viewpoints, including from a regional perspective. The national figures are appalling, but in the north-east things are even worse. Let us be clear: in our region and in my constituency we have been left behind. While we have been crying out for investment born of an industrial strategy that gives us our fair share, we have in fact got a long-standing neglect that acts like a scar on the landscape. These policies have real and devastating effects: in North West Durham 21% of children live in poverty.

    What does that actually mean? It means children coming to school with empty bellies; and parents, usually women, reducing their portions or skipping meals to make sure their children get enough—worse, the children know their parents are doing this. It is about the daily grind of people having bills through their door and that sinking feeling that they cannot pay them, and having the fear of the sanctions—further punishments for poverty—and all the while people are working extremely hard for that existence. The latest figures show that households in the north-east have £100 pounds less to spend a week than those in the south-east do.

  • Does my hon. Friend agree that the limit on child benefit now increases poverty? Does she recall that one of the Government’s slogans used to be, “Let’s make work pay”? Well, it does not pay because poverty wages are being paid.

  • Absolutely. We are seeing lots of inadequacies in the universal credit system, which completely smash out of the water the idea that work pays under the Conservative Government.

    Even taking account of housing costs, which I know take a huge slice of wages from people in the south-east, in the north-east we are still £84 a week worse off. The disparities in investment in my constituency create a vicious circle. We cannot attract the large-scale business investment that we desperately need without the infrastructure and the skilled people, and as much as Derwentside College in my constituency is a beacon of excellence in the education it provides, it is like every other further education establishment in the country in that it has a dwindling budget with which to educate the future skilled workforce that we need.

  • My hon. Friend is making an excellent point. There are very good FE colleges all over the north-east of England, with my local one in Gateshead being a very good example, but I am sad to say that when young people are leaving those colleges with skills, they are doing what generations of Geordies have done: leave to come south for jobs because there is not the investment in the north-east of England.

  • It is heartbreaking. Of course we want to keep as many of those brilliant young people in my constituency as possible, with the education they have received being put back into infrastructure and a rich economy, but the long-term employment just is not there.

    New clause 6 would also address gender inequality, because it is women in my constituency and right across the country who have borne the brunt of inequality, as most women always do. Women, particularly working-class women, suffer structural inequality throughout their lives. On average, women earn less than men, have lower incomes over their lifetime and are more likely to be living in poverty. As has been mentioned, women are therefore less likely than men to benefit from cuts to income tax and are more likely to lose out because of cuts to social security benefits and public services.

    In conclusion, I urge Members to support new clause 6 and I call on the Government to carry out equality impact assessments so that my constituents can see, in black and white, the hard facts and the truth. If the Government are so proud of their achievements, why are they not shouting them from the rooftops so that they can receive full credit? Why not let everybody know what Government policy has achieved? Unfortunately, Opposition Members know that the facts will tell the truth and reveal that the Government do not care one jot about my region and that they are happy for wages to stagnate and for people to experience poorer lives with all the consequences that that entails. People in my constituency work extremely hard, and they definitely deserve much better. Please support the new clause so that we can see what the Government are actually doing to our region.

  • I rise to respond to some of the points that have been made by Opposition Members. I shall start with what the hon. Member for North West Durham (Laura Pidcock) said about the Government, or the Conservative party, talking about how work is the best route out of poverty. Do correct me if I have misquoted you, but you went on to say that the work in our economy at the moment exacerbates poverty. You felt that it is currently not the best route out of poverty. Is that correct?

  • Sorry, but is this a debate or a questions session?

  • Order. Is the hon. Member for Hitchin and Harpenden (Bim Afolami) referring to me, because he is saying “you”? He should refer to the hon. Lady, and if he wishes to take an intervention, he must sit down.

  • I give way to the hon. Member for North West Durham.

  • In my speech I was talking about precarious work. In debates on universal credit, Government Members talk about it getting people into work faster, but we know that the system is for people who are in work and that they receive a top-up payment because their pay is low. I meet many people in my constituency, including social care workers who do not get paid for their mileage. They are working, say, 14 hours a day and getting paid for six hours. That entrenches their poverty because they do not have a proper contract and they are not being paid a fair rate, but they have all the outgoings that they would have if they were not receiving state help.

  • Whether it is in respect of the Bill, the new clause or what we are discussing now, the important thing is that it is of course the Government’s intention to create more better-paying jobs. That is what the Treasury team and everybody across Government strives to do every single day. That is not to say that every single person in this country is currently at the level of prosperity we would like, but that is the aim of all the activity that is coming out of the Bill and out of the Treasury.

  • If that is the aim, what data are the Government collecting to be sure that they are achieving it and to find out whether there are any variations? That is what we are talking about. The issue is not the policy, but whether it is having an impact and whether we can understand that impact. Does the hon. Gentleman understand that?

  • I do indeed understand that. There is currently so much data, much of which has already been talked about by Opposition Members, on regional disparities, and on disparities of race and age and between urban and rural areas. There is so much data, so Government policy must aim to bear it all in mind, which is what Ministers do.

  • I am grateful to the hon. Gentleman for his generosity in taking interventions. We need to hear a few facts. The data that he is talking about, which we are citing as evidence of why this is so important, is being collected by charities and the House of Commons Library. With respect to both the duty of care and the provisions of the Equality Act 2010, this work should be done by the Government. That is what we are asking for.

  • If the hon. Lady will permit me, I will make a bit of progress and then I will respond to her remarks in the fullness of my speech.

    It is important to make my next point in relation to new clause 6 clear. We have heard Opposition Members say that women, or certain members of ethnic minorities, are more likely to be lower paid than other members of society. By taking the lowest paid people out of tax and increasing the national living wage, we are benefiting those groups of people who might suffer from low earnings. In addition—

  • When Government Members talk about, and celebrate, the fact that people are being taken out of income tax altogether, what they are doing is celebrating an economy of low pay. They are celebrating an economy where people are being paid so little that they are just above, or just at, the income tax threshold. For me, that underlines what it is actually like out there in constituencies such as mine in Gateshead.

  • I am afraid that the hon. Gentleman is mistaken. It is not celebrating low pay to say that people who are currently earning lower amounts should take home more of their money. That is not a celebration; it is about making their lives, every day and every week, that bit easier. It is worth saying that taking the lowest paid people out of tax and raising the national living wage is having significant benefits for many of the people—

  • The hon. Gentleman is being very generous with his time. I think he may have missed one of the points that we are making. For example, when the Government raise the tax threshold, 66% of the people who do not benefit—because they do not earn enough—are women. Seventy three per cent of the people who benefit from a rise in the higher income rate threshold are men. What he is talking about and what we are talking about are two different things. We are talking about the differential impact of policy, and asking the Government to do the sums that are currently being done in the charitable sector, so that we can make better policy. Surely he wants those sorts of policies to have an equal benefit, but at the moment they do not, because we do not have equal pay.

  • I believe that all policy in this area, or, frankly, in any area, should be set to make sure that we are trying to generate as innovative, dynamic and successful an economy as possible. The hon. Member for Walthamstow (Stella Creasy) mentioned cutting corporation tax in her speech. She thought that that effectively benefited more men than women because men are more likely to be shareholders than women. The way we should deal with that, in my view, is to encourage more women to be entrepreneurs. We should work to make sure that women have access to being shareholders and that women have more ability to reap the benefits of that—

  • Will the hon. Gentleman give way?

  • If I may, I would like to make a bit of progress.

    As the evidence has shown, cutting corporation tax increases, rather than decreases, the tax take going to the Exchequer. If that shows this country to be a better and more dynamic place in which to set up and start a business, that will benefit all people in this country. That is the approach that the Government should take. If we want to improve the performance of the British economy and if there happen to be more men than women who are shareholders, it is no answer to say that we should therefore not take action to improve the activity of the British economy.

  • I have a very simple question for the hon. Gentleman, although I appreciate that he is getting some assistance from the hon. Member for Spelthorne (Kwasi Kwarteng): can he produce the data to prove that men and women will benefit equally from the changes to corporation tax?

  • I do not have the data now to be able to respond to the hon. Lady. What I do know is that Conservative Members will never take lectures from the Labour party; we have our second female Prime Minister, the gender pay gap is the lowest on record, and this Government have done more for childcare and support for families than the Labour Government ever did. The idea that this Government should take lectures on this issue from Labour Members is disgraceful.

  • The hon. Gentleman is celebrating two female Prime Ministers somehow drastically pulling every single woman out of poverty. That is not the answer. We need structural change and the evidence to tell us whether women are equal, not the tokenism of two female leaders. Margaret Thatcher did not do much to pull women in my community out of poverty.

  • Before the hon. Gentleman responds, will he give way again?

  • I am sure that the hon. Members around the hon. Gentleman are trying to get him to stop talking, but Labour Members do not mind. It is actually nice to see you go through your journey of trying to put the pieces together and understand the problems we are talking about. You cannot justify any of your statements because you have no data.

  • Order. Too much “you”. The hon. Lady is an experienced Member of the House and she should set an example.

  • My apologies, Mr Owen. I am getting carried away in my enthusiasm to try to educate the hon. Member for Hitchin and Harpenden (Bim Afolami). The Government cannot justify anything you are saying, because you have no data to back it up. We are having to rely on data from voluntary groups and charities, which do an amazing job of crunching the numbers and looking at the intersectionality of the Government’s policies. But in order for you to make your statements, you need to have the data.

  • Order. That was a very long intervention with too many “yous”. Let us get used to the parliamentary language and have a proper debate.

  • I will conclude my remarks by saying that it is important when we talk about these issues—in this House or outside—always to remember that improving the performance of the health service, the economy or anything relating to Government policy will benefit everybody in this country, if we make the right judgments and the right policy.

  • Well, well, well. When it comes to naivety, there is a very fine line; it can often be endearing before it eventually becomes quite offensive. And I did find the speech of the hon. Member for Hitchin and Harpenden (Bim Afolami) offensive. It began in the spirit of naivety. I could see that he was nervous at the beginning of his contribution—quite rightly, it turned out, towards the end—because he did not have the data that was being presented.

    The debate went on and Labour Members presented the data, but rather than actually taking account of it, the hon. Gentleman continued, in a very odd way, to try to defend what most reasonable people would say is a quite indefensible position. He was essentially saying, “Listen—if men are doing okay, surely women will eventually do okay too.” I am not sure whether the solution he came up with to the shareholder conundrum is for women to find wealthy husbands who are shareholders, as if that might somehow lift them out of poverty and allow them to be the beneficiaries of the cuts in corporation tax.

  • We have discovered a new phenomenon: it is called trickle-down gendernomics. It is going to be the resolution to all the problems of poverty and the disparity in earnings between men and women in all our communities up and down the country—I don’t think so.

  • That is a fair point.

  • Obviously, having had two women Prime Ministers, that is quite enough women earning a serious level of income—the 33 million other women in this country do not deserve equal care and attention. This data would help us find out just how much inequality there is and what we could do about it. Does my hon. Friend agree that facts should override fiction?

  • I think that where the hon. Gentleman was trying to get to—I will be generous—was that these things are symbolic and that symbolism in politics is quite important. However, to me, it is more symbolic that 46% of women have to skip a meal so that their children can eat. It is quite symbolic that women continue to be underpaid compared with men, and it is symbolic that the decisions the Government are taking disproportionately affect women on low incomes—the people who are trying to keep households together and who are raising the next generation of young people, who, because of this Government, will not have better life chances than the generation that went before them.

  • Will the hon. Gentleman confirm that it is also important that it was women politicians and women workers who campaigned and argued for the Equal Pay Act 1970? Will he also confirm that outstanding equal pay cases are at an all-time high?

  • That is absolutely right, but let us be honest: the Government are not in listening mode. They do not want to take into account what could have been constructive new clauses—new clauses 6 and 7. What they want to do is to maintain their stubbornness and their silence. They think that if they ignore this issue, there is not a problem in society, when we know that there is.

    In terms of the pressures on income that many people in our communities face, the new clauses go beyond just gender inequality, and talk about disability and race as well. The Prime Minister has been clear that she wants to address the discrepancy in terms of opportunity, incomes, housing and the criminal justice system with members of the ethnic communities in this country. However, when we look at the way the Government have approached the Budget, the evidence just does not support that. If we look at the public sector, for instance, little effort is being made to widen participation in public sector jobs to members of the ethnic minority communities. In my constituency, a third of residents are predominantly Pakistani and Bangladeshi, but they are nowhere near properly reflected in the make-up of public services. In towns such as Oldham, where industry has, by and large, been hollowed out, the public sector is the place where people go for decent-quality, well-paid and, previously, quite secure employment. If people are restricted from entering those jobs, for different reasons, that has a material impact on their ability to lift themselves out of poverty, to get on in life and to do well.

    When the coalition Government came into power, it was interesting that one of their very first acts of many that devastated towns such as Oldham was to cut the funding that went to Remploy. Remploy had a network of factories across this country that used to support people into supported employment. Those were not sympathy jobs, in the way I heard people say they were at the time; they were real jobs, and they produced goods of quality that people wanted to buy. In Bardsley, in my constituency, that meant a full factory employing 114 people making windows that they would sell to industry, housing associations and the private market.

  • The reason we want the equality impact assessment is not handouts; we are looking for a level playing field so that everybody can reach their economic potential and Government policies are not hampering in that. Does my hon. Friend agree?

  • That is absolutely right. This is really odd from my point of view, because I have come from local government. In local government, when people are setting their annual budget, they have a legal responsibility to make sure that these audits are carried out and that proper consideration is given to the impact on protected groups. The Government now seem to believe that legislation passed in this House is good enough for one part of the public sector but not the other, but I am afraid that that just does not hold water. A lot of public bodies—whether it is the NHS, local government, a police force or anywhere else in the public sector—will be looking at the Government and thinking that there is a lot of hypocrisy in the laws passed here, which the Government do not seem to apply to themselves.

  • Specifically on Remploy, yes, there were some great practices there, but the Government made that decision because very few were able to progress into work, and we wanted to create more opportunities so that more people can benefit. That is partly why we have seen an extra 600,000 disabled people find work, which is a great thing.

  • How dare the hon. Gentleman suggest that the 114 people working in that factory in Oldham were not in proper employment? They were producing, they were manufacturing, they were selling, and people wanted to buy the goods because they were of a high quality. It was not a handout or a giveaway. They were not sympathy cases: they were people who were working hard in a supported environment to produce something that people wanted to buy.

    In some ways, this is the problem that we face. When the problem is so disconnected and not part of the everyday experience of Conservative Members, it is easy for them to ignore it. I cannot ignore it. When I go back to Oldham West and Royton, it is my community. I see the impact of cuts, of austerity, and of suppressed wages. I see the hollowing out of our employment structure. All right, people at the top are doing very well, and there are more jobs at the bottom, but the middle has been completely taken out. People talk about an economy that will support people into better employment, while 8 million adults and children are living in poverty in working households.

    That is the economy we have in this country, because the routes of progression in employment simply do not exist. We are happy to be the bargain basement employment capital of Europe in this new relationship—let us be honest. Providing that the bankers and the insurance services are all right, we really do not care what it means for the rest of the economy as long as there are people working at Costa Coffee to serve the coffee in the morning. That is what the Government really believe. It is okay hon. Members shaking their heads, but where has the investment in our key industries gone? We need investment in manufacturing and engineering, creating jobs that produce things that people want to buy, pay decent wages, and support people into a lifelong career so at the end of it they have a decent pension.

    Speaking of pensions, what did the Government do in the autumn statement for the WASPI women? These women have worked and contributed all their lives, doing everything that was asked of them by Government. At the last minute, planning for their future, they were left cut adrift, and when they came to the Government to ask for support, the Government turned away.

  • I absolutely give way to the hon. Gentleman if he can justify that.

  • Would the hon. Gentleman welcome anything at all in the Government’s recently announced industrial strategy, which was, in many respects, targeted towards some of the poorer communities in this country?

  • I am going to give the hon. Gentleman a real answer on this point and not just grandstand, because it is important. I will explain the problem with the industrial strategy as it stands. For a town like Oldham, it is absolutely critical that the UK has an industrial strategy that holds water—that is forward thinking, ambitious, and has a framework of funding to support growth. I would welcome an industrial strategy that did that, and I think that when it started, that is what it tried to do. The problem is that something fairly dramatic has happened in the meantime, and that is Brexit. What I would have expected the Government to do in the context of the referendum result is not just to dominate Parliament’s time with the transitional and transactional relationships with Europe now and when we leave. I would have expected the Government of the day to produce a real, compelling vision of what type of Britain there is going to be when we leave the European Union. That has not taken place. The domestic legislation coming through this place is non-existent. Money is being taken out of vital public services that would be the foundation for the type of industrial strategy that is being talked about. Money is being taken away from our education and skills system, which would be the starting point for any investment strategy in our economy, particularly in manufacturing and engineering.

    So would I welcome anything in the industrial strategy? I would simply welcome the principle of an industrial strategy, but it cannot be done on the cheap. We have seen—let us be honest about this; it transcends different Governments—a complete turning away from UK manufacturing and engineering, at the cost of the communities that people in this place represent. In order to replace that with a forward-thinking industrial strategy, the resources then have to follow, and we have not seen that—we have seen the opposite. Money has been taken away from our Sure Start centres and from our schools. Our colleges are chronically underfunded, with many on estates that are crumbling, struggling to keep up even with basic maintenance. Our apprenticeship system is in tatters since the introduction of the apprenticeship levy. All these things matter if we have a forward view about what type of country Britain can be.

    The new clauses are important in that context because if we want to create, after Brexit, an inclusive and fair Britain that allows everybody to benefit, we have to make an honest assessment of where Britain is today. We are not in a good place. Our economy is shot. Our job market has been hollowed out, and the good, well-paid jobs in the middle have been taken away. Our housing stock is not fit for purpose and we are investing £9 billion a year into the pockets of private landlords, although we know that 40% of that stock does not even meet the decent homes standard. Those are the really important issues that Members need to think about. If they do not take proper account of what the information tells us, how on earth can we collectively make informed decisions that send us in a different direction?

  • In this Parliament—people keep saying that it is the mother of all Parliaments, and surely because of that we ought to set the bar higher—Members passing through the voting Lobbies ought to be informed. We ought to know absolutely everything about what we are voting on. Let us be honest, on Brexit, the Government are deliberately denying us key information that is critical to the country’s future—whether it is the sectoral analysis or information about a range of other issues—and would inform our votes in this House. We are being denied quite an important foundation of our democracy.

  • My hon. Friend is making a powerful case. Whether Members on either side of the House agree with the policies, having good data to enable us to understand their impact helps us to make or dispute an argument. I am struggling to understand why any MP would be against having the facts about the impact of policy, which is all that the new clauses will do. If we had that information, Government Members could confidently tell us what great proposals they are making to improve the country’s prosperity, rather than using anecdotes—or two women.

  • I believe it comes down to priorities. If the Government were determined to do something about this, having the evidence base would be of great benefit to them. They do not want to do anything about it, so the evidence base is a hindrance because the Opposition can use it to attack the Government about the fact that progress just is not being made. That is the real reason why Government are not making progress, and why they are determined not to support the new clauses. It would be far better for the country if the Government were to step up, to be honest and to recognise that the country has some really ingrained challenges that we need to face. Understanding the scale of the challenge from day one is important in making sure that we get into a better position.

    My challenge is this: why not? If the Government believe that they are doing the right thing, and that by virtue of their second female Prime Minister they are the party of gender equality and the champions of all that is equal, now is the time to prove it. Members have two choices: they can go through one or other of the voting Lobbies. Perhaps they have a third choice, which is to stay away completely. They can get behind the new clauses and support our request for the data set, which will inform decisions; they can shirk responsibility entirely and stay away from both voting Lobbies; or they can keep their heads down and maintain their own position on the Government Benches, and vote against the new clause because it happens to have come from the Opposition. I would say that that is not putting the interests of the country first.

  • I would like to start by correcting an omission that I made yesterday. I should have said that our thoughts are with the Chairman of Ways and Means and his family at this time. It sounds like a really horrendous thing for a family to go through, particularly at Christmas time.

    I thank the shadow Minister, the hon. Member for Brent Central (Dawn Butler), not just for tabling new clause 6, but for the way in which she engaged with us in advance of the debate. I appreciate the time that she took to speak to us about the new clause so that we could discuss how it looked. I think it is absolutely brilliant; it is one of the best new clauses that we have seen in a Finance Bill, and I have tabled a few in my time. I want to speak in favour of the new clause and state our support for it.

    I will start by covering why we need the new clause. Although there has been a bit of discussion, we have not talked about what it means in its widest sense. Subsection (2) talks about

    “the impact of those provisions on households at different levels of income”,

    as well as on protected characteristics, the public sector equality duty and

    “equality in different parts of the UK and different regions of England.”

    A lot of the debate today has focused on women, which is completely reasonable, but the new clause captures several other things that could have been more fully discussed.

    Why do we need an assessment of the impact on various groups, particularly those mentioned in new clause 6? We need it because people in the protected groups or at the lower end of the income spectrum have been disproportionately hit by the actions of this UK Government, as can be seen in a number of ways. It can be seen in the fact that we have young people in jobs on zero-hours contracts. We have those jobs, and the Government say it is wonderful to have so many people in employment, but despite that, we are not seeing an increase in household disposable income because people are not receiving the wages they should receive for such employment. They are in precarious jobs and they are not receiving enough money, and the benefits freeze has been a major added factor. It means that people are earning even less, because the benefits freeze has hit them doubly.

    The Government have caused another issue by reducing disability payments. The UN has said that the UK has not done enough to ensure that the UN convention on the rights of persons with disabilities is being met, and no Government in any developed country or nation should seek to be in such a position. We have not had a proper assessment of the impact on disabled people of the changes that this UK Government have made.

    The UK Government have also not taken seriously their responsibility to young people in society. We have a living wage that people cannot live on: it is not calculated as something that people can live on; it is a pretendy living wage put forward by the Government. It is not applicable to people younger than 25. Therefore, we have a living wage that people cannot actually live on, but the Government somehow think that the labour of people under 25 is worth less than that of those over 25, even though they may be in exactly the same job and should therefore be earning the same amount.

    As has been pretty widely covered, the Budget and successive policies of this UK Government have a disproportionate impact on single parents, the majority of whom are women. We see a disproportionate number of them coming through the doors at our surgeries. Do you know what, Mr Owen? It is absolutely and totally ridiculous that we are seeing a rise in rickets in this country. We are seeing people who cannot afford to eat or to give their children nutritious food because of the decisions of this UK Government.

  • Does my hon. Friend agree it is a scandal that many children will be getting food and presents this Christmas only through the actions of food banks and charities, such as Moray Firth Radio’s Cash for Kids in my constituency? That should not be allowed to happen. With universal credit, this is happening far too often across the nations of the UK.

  • I absolutely agree. This year—in 2017—my office has referred 35 people to food banks, and we have gone to the food bank on five occasions on behalf of constituents who have come through the door and told us that they have not eaten for a number of days. This is supposed to be a country that cares for people who are just about managing, but it is failing them. The people who go to food banks nowadays are working. They are not earning enough money from their jobs to feed their families, so they are having to go to food banks.

    We have seen this Government attack people who have protected characteristics, but we have not seen any impact assessments because the Government do not want to admit what they are doing. We have seen attacks on the WASPI women, who, despite having worked all their lives, are being asked to wait even longer for their pensions. We have seen changes with the rape clause and the two-child policy, meaning that women should not have more than two children and, if they conceive as a result of rape, they must write that down on a form and say so explicitly. Why should they have to relive that just to please this Government? We have seen increasing household debt—that has been raised as an issue by the Bank of England—and decreasing household savings. We have seen young women unable to go to school because they cannot afford tampons and towels to provide themselves with a basic level of human dignity.

    Another change that has not been talked about hugely in this place is the attack on a group of people with protected characteristics. A massive and increasing number of people come to my surgery because they have no recourse to public funds. It is a particular issue with those fleeing domestic violence, the majority of whom are women. The UK Government have determined that they should have access to public funds for only six weeks if they are from outside the EEA, and not at all if they are from inside the EEA. If they have been living on a joint income with their partner and are fleeing domestic violence, they have no protection from the UK Government because they are giving them no recourse to public funds. That is an attack on a group of people with protected characteristics, and we should no longer tolerate that.

    The hon. Members for Oldham West and Royton (Jim McMahon) and for Brent Central (Dawn Butler) mentioned what local authorities have to do in relation to impact assessments. I was a local councillor for eight years before being elected to this place. When we produced budgetary measures, or anything we were going to do in the city that would have an impact on communities, we had to produce an impact assessment specifying how it would affect people with those protected characteristics. If a local authority making decisions for the third largest city in Scotland has to do that, why are the UK Government making decisions that affect every man, woman and child across these islands without producing an impact assessment? Is it because they are ashamed of what they are doing and unwilling to be honest with the people?

    In Scotland we are looking at having a progressive taxation system. We are lifting the pay freeze and next year we will be the fairest taxed part of the United Kingdom. [Interruption.] The hon. Member for Beverley and Holderness (Graham Stuart) says that we will be the highest taxed part. Some 70% of taxpayers in Scotland will pay no more tax next year than they do this year. Only the highest earners will be paying moderately more. [Interruption.] No one earning less than £33,000 next year will pay any more income tax than they would in England.

  • Is it not a bit rich for some Government Members to try to shout down my hon. Friend, complaining about people on high incomes paying a bit more tax but saying nothing about disabled individuals losing £30 a week in benefits?

  • Absolutely. If Government Members cared about what they were doing to disabled people, they would produce the impact assessments that are being requested today, and they would be honest about the changes they have made and how the heaviest impact has been on the most vulnerable in society.

    There are folk who have been left behind by this Government. There are folk who have been failed by the safety net. Those are the people we see—I am sure that Government Members see them, too—walking into our surgeries on a regular basis. They say, “I have worked hard all my life, but I still cannot afford to feed myself and my family.” People who have worked every day for years now find that their state pension is being pushed back as a result of this Government’s policies. People find themselves homeless because they have made one or perhaps two bad decisions in their lifetime, which is far fewer than those of us who have bought a safety net and have support structures in place are able to make.

    We need a culture change. The conversations we have had in this Chamber are along the same lines as those that have been had in the context of the #metoo hashtag. Women have come forward with #metoo to say that they have been sexually harassed, sexually assaulted or even raped, and people have replied, “We don’t believe you,” “It can’t be that bad,” or “You’re trying to make a big thing of this.” What the SNP and the Opposition are trying to do in this debate is highlight the fact that these disadvantaged groups are being actively disadvantaged by the UK Government’s policies. We are asking the UK Government to produce the impact assessments, because if they deny that that is the case, they should not be scared of producing them.

  • This Government are committed to equality. That is not to say that no further steps need to be taken—a situation that pertains perhaps to every Government who have ever been in office—but we have a strong record on equality. More women are in work than at any time in our history, at 70.8%. Last year, over 60% of growth in employment was through women joining the workforce. We have the lowest gender pay gap for full-time employment on record and we have taken action to ensure that companies with 250 employees or more will, from next year, be required to publish details of their gender pay gaps.

    For those who are disabled, we are spending more than £50 billion a year on benefits for disabled people and those with health conditions. In the Budget, the Chancellor announced an extra £42 billion for the disabled facilities grant to encourage and assist those with disabilities into the world of work.

    For ethnic minorities, when our Prime Minister assumed office last year, one of her first actions was to announce an audit into the differing impacts on ethnic minorities in terms of their use of public services. The report was published in October and will inform our policy going forward.

    In the Budget, we increased the national living wage by 4.4% from April, which will disproportionately assist ethnic minority people. We are committed right across Whitehall to ensuring an increase in the uptake of apprenticeships and employment within our police forces and our armed services for ethnic minorities.

  • I am grateful to the Minister for giving way, but I am afraid he has to stop talking absolute guff when it comes to the national living wage. The Government continue to talk about a national living wage, but that is in fact a con trick because it does not apply to under-25s.

  • It applies to a large number of people and there is the national minimum wage as well. My point is that the 4.4% increase in April will be well above inflation, and will disproportionately assist women and those from ethnic minority communities.

  • I thank the Minister for giving way and I am listening to the case he is making. If he is so confident that the Government’s policies promote equality, why is he against having an independent Office for Budget Responsibility equality impact assessment to tell us all the good news?

  • I ask the hon. Lady to be a little bit patient, because I am coming to those very points shortly.

    On assessments, we are required, under the Equality Act 2010, to take due regard of protected characteristics, but it is not just for that reason that we do so. It is not just for that reason that I and my fellow Ministers took those issues into account at every stage; it is because we believe it is the right thing to do and we wish so to do.

    To come to the hon. Lady’s intervention, a number of reports are already out there. We have heard about tax information and impact notes. I do not think the Opposition should dismiss them. They did not mention the distributional analysis the Treasury provides and publishes at the time of the Budget, or the public expenditure statistical analysis, which looks at how expenditure affects different protected characteristics and runs to hundreds of pages in length. What the Opposition are calling for is fundamentally impractical. That is the heart of the matter and the answer to the hon. Lady’s question. Such analyses almost invariably focus on the static situation. They focus on the effect of tax and income changes on individuals without considering the behavioural changes they induce and the implications of changes in the wider economy, such as the level of employment. They are selective and tend to avoid focusing on those who benefit from public services or are affected by taxation. For example, the provision of childcare, social care and health services is normally exempt from such analyses.

    The final point, which has been raised already and which the hon. Member for Walthamstow (Stella Creasy) indeed recognised, is that where an individual’s income changes, that individual will almost invariably live within a household with other individuals. She said that the personal allowance increase for taxation disproportionately benefited men, but of course men often live in households with women, and income is distributed across the household. The same is true, of course, where a woman benefits and brings income into a household in which men are also present.

  • It is extraordinary that the Minister does not understand the concept of doing both individual and household analyses, or indeed behavioural alongside static analyses. There are many different ways the Government could be doing equality impact assessments. The problem is that they are not doing any.

  • The hon. Lady is right: there are many ways it can be done, and the Government are indeed doing it in many ways. She need not only look to me for the observations I have made; the IFS has recognised my very point about household income. We will, however, continue to look at how we provide information and assess policies, and we will work with the ONS, as the Chancellor set out in the recent Budget.

    In conclusion, the Government have a vision for a society that is equal, not in terms of levelling people down, but in terms of giving people the opportunity to go up. In yesterday’s debate on the Bill, the Labour party chose to vote against a measure to encourage young people to get a foot on the housing ladder. That is not acceptable, and that is an example of what we will do to promote equality of wealth and opportunity at every turn. I urge the Committee to reject new clauses 6 and 7.

  • The Minister referred to distributional analyses. The distributional analysis carried out by the IFS, the non-gendered and gendered analyses of the Women’s Budget Group, and others, such as those carried out using the Euromod tax-benefit model for EU countries, all share the same characteristic: they are static. The exact same method is adopted by the Treasury itself when it assesses the distributional impact of Budget measures in Budget and IFS documents. If the Treasury does not like other people using the model, perhaps it should not use it itself. The Government cannot criticise others for using the same method as them to analyse their own Budget.

    The Minister said several times that the Government believed in equality, but their actions fail to carry that through. They say one thing and do another, and they are exacerbating inequality in our society. [Interruption.] The Chancellor says from a sedentary position, “Unlike the Labour party”. The Labour party is more competent than this Government have ever been in ensuring that this country is more equal. All the equalities legislation has come from a Labour Government—[Interruption.] Productivity, growth, all the equalities legislation has come under a Labour Government, not a Conservative Government. In fact, every time the Conservatives enter government, everything starts to go down. Food banks were not part of the Department for Work and Pensions scheme when Labour was in government. Period poverty was not part of everyday life for young women when Labour was in government.

    I say to the Minister, “If you in any way believe in equality, you should not lead your merry men into the No Lobby. You should lead them into the Aye Lobby, and vote with us.

    Question put, That the clause be read a Second time.

  • Division 77

    19 December 2017

    The Committee divided:

    Ayes: 273
    Noes: 309

    Question accordingly negatived.

    View Details

    New Clause 8

    Analysis of Effectiveness of Provisions of this Act on Tax Avoidance and Evasion

    “(1) The Chancellor of the Exchequer must review the effectiveness of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.

    (2) A review under this section must consider—

    (a) the effects of the provisions in reducing levels of artificial tax avoidance,

    (b) the effects of the provisions in combating tax evasion, and

    (c) estimates of the role of the provisions of this Act in reducing the tax gap in each tax year from 2018 to 2022.”.—(Anneliese Dodds.)

    This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effectiveness of the provisions of the Bill in tackling artificial tax avoidance and tax evasion, and in reducing the tax gap.

    Brought up, and read the First time.

  • I beg to move, That the clause be read a Second time.

    It will not have escaped Members’ attention that Christmas is coming. In fact, some of us may even have thought that Christmas was already here given that we enjoyed the previous debate so much. However, I must say that discussing this Finance Bill again feels like an alternative celebration on this side of the Chamber: Groundhog Day. For the third time since entering this House, I rise to speak about yet another woefully thin and inconsequential Finance Bill that fails to take the action that our economy so clearly requires.

    The consequences of a Government focused on the management of internal party disputes, not sustainable economic growth, have become clear for all to see over the past few weeks: growth levels the third lowest in the OECD during the first half of this year; productivity growth lower than in the eurozone and well below the average of the EU as a whole; falling living standards, with wages under their longest squeeze since Napoleonic times; and a Government who have had to revise their targets for eliminating the current deficit no fewer than five times, and who are now resolved to eliminate the deficit only by 2030—15 years after the end date promised during the 2010 general election campaign. It’s behind you, to use a pantomime phrase—my hon. Friend the Member for Brent Central (Dawn Butler) was keen on them in the previous debate. In that context, it is depressing to see the Government yet again pass up the opportunity to deal with aggressive tax avoidance and evasion in a steadfast manner.

    Labour’s new clause 8 would require the Chancellor of the Exchequer to carry out and publish a review of the effectiveness of the provisions of the Bill in tackling artificial tax avoidance and tax evasion, and in reducing the tax gap, within six months of it entering into effect.

  • I congratulate my hon. Friend on the first part of her speech. Some three or four years ago, the distinguished tax expert Richard Murphy estimated the total tax gap at £119 billion a year. To my knowledge, that figure has never been seriously challenged or debunked, and it may now even be higher. Does my hon. Friend accept that if the Government were serious about dealing with this matter, they could pay off the deficit and have plenty more to spend on public services?

  • I am grateful to my hon. Friend. The calculations made by economists and accountants, such as Mr Murphy, reflect the cost to our Exchequer of international profit shifting, which the Government’s estimate of the tax gap does not.

  • Does my hon. Friend agree that low wages mask inefficiency? One of the big problems with the economy is that we have 4 million or 5 million people in that category, which encourages less efficiency, not improvements.

  • I agree with my hon. Friend. In fact, a problem that underlines our productivity gap is the worryingly low levels of private investment in our economy, which is reducing efficiency and places Britain outside the sphere of many comparable nations on investment. Sadly, the Government did not grasp that problem in the Budget.

    The Opposition are calling for a review in the absence of the ability to call for more wide-ranging changes to the Bill given the Government’s unwillingness to table a general amendment to the law as part of this Finance Bill. That is unfortunate given the lack of new measures in the Bill, the limitations of the measures that are included, and the fact that much of the Bill represents a cleaning-up of previously announced but ill-thought-through measures. I will deal with each of those matters in turn.

    It is, to say the least, regrettable that Members from across this House are unable to introduce new measures to the Bill. Labour’s tax transparency and enforcement programme sets out several areas where the Government should be taking action to tighten up our leaky ship, but we see no such ambition from the current Administration. Again, there is an unwillingness to engage with those who do have the energy and expertise to promote new measures.

    When it has been possible for Members to amend Finance Bills, they have often done so to good effect. So it was that my right hon. Friend the Member for Don Valley (Caroline Flint) amended what became the Finance Act 2016, giving the Government the power to introduce public country-by-country reporting and requiring multinational firms to indicate their profits, staff and tax paid in the different jurisdictions in which they operate. The measure is already in practice in the banking and extractive industries, where it has effectively promoted tax transparency and has offered a lot of evidence and information that has been very helpful to investors in those fields, but Members on both sides of the House who are keen to see the Government use the powers already available under the 2016 Act to make country-by-country reporting public, and who believe the Government should be playing a leadership role in this area, are sadly emasculated by the Government’s unwillingness to allow colleagues to table proper amendments to this Bill.

  • In this case, the Government are flying in the face of public opinion, with more than three quarters of the public reportedly stating that multinational firms with a significant presence in the UK should report publicly, per country, on the size of their profits and on the tax they pay.

    The same frustrations about the inability to amend the Bill apply to the Government’s limited willingness to promote transparency on beneficial ownership. By excluding Companies House from the coverage of anti-money laundering regulations, there is little to no oversight of the more than 600,000 companies formed every year in the UK, many of which then seem to sink without trace. There is little point in creating a register of beneficial ownership if no due diligence is exercised to ensure that the information is accurate.

    Additionally, I can reveal today that the Government are yet again behind the curve of other European nations in continuing to fail to subject trusts to coverage in registers of beneficial ownership. Of course, as we know, David Cameron himself intervened personally to prevent the European Council from agreeing to the measure back in April 2016, but the Council’s negotiators recently appeared to have overcome those objections. I can reveal that, as of Friday afternoon, there is now agreement at European level to include business-like trusts on registers of beneficial ownership, so I hope the Minister will inform us today of whether and when he will act to include business-like trusts on the British register of beneficial ownership, or whether our Government will continue to act as a drag on international co-operation in this area.

    If colleagues had the power to amend this Bill, I imagine they would also want to promote measures to stem the haemorrhage of Her Majesty’s Revenue and Customs staff, as ably argued in this House by my hon. Friends the Members for Coventry South (Mr Cunningham), for Stockton South (Dr Williams) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney), and by Members for many other constituencies affected by the cuts to HMRC. They are concerned that their constituencies face the prospect of losing thousands of skilled jobs to HMRC restructuring, which is reducing HMRC’s resources at the very time the demands being placed on it are heavier than ever before, not least due to the additional burden of post-Brexit arrangements for customs and for taxing highly mobile profits.

    I find it astonishing that we still have no indication from the Government of how they will deal with the competition challenge that small and medium-sized companies will face once the UK leaves the EU and its competition-regulating powers. Just this week, the European Commission announced that it is to investigate the tax affairs of Ikea under state aid regulations, which are intended to prevent multinational companies from making use of tax arrangements that are not available to small and medium-sized companies, yet it is unclear whether our Government intend merely to increase the number of their sweetheart tax rulings on multinationals after Brexit, or whether they intend to adopt a more muscular, effective approach to tackling profit shifting and, if the latter, how they will co-ordinate that with other countries.

    The initial signs are worrying. Only last week, Conservative Members of the European Parliament abstained on a crucial vote on the European Parliament’s investigative report on the Panama papers. Appallingly, we have still not heard whether our Government will back those whistleblowers and investigative journalists who allowed the world to see what was hidden in the Paradise papers.

    Will the Minister inform us today of whose side this Government are on—those who promoted the public interest in revealing how some are profiting from mismatches and secrecy in the international tax system, or those who profit from such obfuscatory arrangements?

  • Does my hon. Friend agree it is disgraceful that some of those named in the Paradise papers are now threatening court action against those whistleblowers and are trying to scare people into not releasing such information in future?

  • I absolutely agree with my hon. Friend on that. There is a particular onus on the Government to be steadfast and clear in their rejection of those legal challenges and the problems they potentially pose to our democracy. Of course it is just the BBC and The Guardian that have been threatened with legal action, not any of the other 90 or so media outlets based in other countries. It is UK-based firms and media organisations that have been threatened with that action, so I hope the Minister will make clear to us today whether or not he agrees with Appleby’s threat of legal action against those who revealed the details of the Paradise papers in the public interest.

    Many of the measures in the Bill intended to prevent aggressive tax avoidance and evasion do not go far enough. I have already referred in this House to clause 21, which seems to adopt a confusing new approach to measuring profit shifting, rather than aiming to reduce it per se. Yet again, there sadly appears to be deafening silence here concerning the need for tax simplification, with only minor measures that do not meet the required standard of a thoroughgoing, holistic assessment of the overall impacts of tax reliefs, which we desperately need in this country if we are to have proper Government accounting.

    Finally, we see in the Bill a number of additional measures that seem intended mainly just to clean up previous mistakes by this Government, many of them following criticism from Labour Members. In clause 35 and schedule 10, for example, we find anti-avoidance provisions in relation to payments and benefits made from offshore trusts, no doubt reflecting the concerns we raised about the potential misuse of offshore trusts by non-doms. Let us be clear, before this issue crops up yet again in this debate: this Government have not abolished long-term, non-dom status. The new measures do not apply to those whose parents are non-doms, as is often the case, and a 15-year window is provided for individuals to get their affairs in order. In another example, clause 28 closes the loophole introduced by the coalition Government in 2011 that allowed foreign companies to hold on to an asset-stripped subsidiary for six years until they were then able to claim loss relief in excess of any genuine economic loss to the group. Again, the measure tidies up a problem that was created previously by those involved with this Administration.

    To conclude, this Finance Bill was a chance for strong action against aggressive tax avoidance and evasion, but, sadly, we have here a paltry Bill, which some Conservative Members have praised in some of these debates for being thin. It is not thin because it is concise; it is thing because, sadly, just like this Government, it is lacking in ideas and ambition. We need a change now, more than ever.

  • I welcome this Finance Bill, because it does three things so far as taxation is concerned: first, it prioritises increasing the total pot for public services while recognising the common-sense proposition that we must live within our means; secondly, it entrenches and enhances the fundamentally progressive nature of the tax system; and, thirdly, it redoubles our country’s efforts to tackle tax evasion and aggressive tax avoidance. The theme that unites those three strands is a relentless focus on discharging our obligation to the next generation: on ensuring that we are laying the foundations for a better, fairer country; one whose best days are yet to come. In doing so, we are observing our solemn duty to those who will come after us. We must not fail them, not just because history will condemn us if we do not, but because we ought to be able in this House to recognise that moral obligation for ourselves.

    On tax avoidance and evasion, there has rightly been a sense that multinational corporations have been seeking to game the taxation system, using their market power to their financial advantage. That sticks in my craw, the craw of my constituents and the craw of Members across this House, because when we talk about the rule of law, that is about ensuring that we are all equal before not only the criminal law, but taxation law. Few things are more corrosive to public confidence in the enterprise economy than the sense that large corporations are wriggling out of their responsibilities to society—these responsibilities provide free healthcare and education, as well as a safe and secure environment to operate in. So I welcome the fact that the tax gap in our country has been driven down significantly, from 8% to 6%. That translates into an additional £12.5 billion per annum, which is more than the entire Ministry of Justice budget and far more than the entire annual spend on the prison system. We have the lowest tax gap in the world.

  • Does the hon. Gentleman recognise that that 6% does not take into account profit shifting? It comes from HMRC effectively marking its own homework and patting itself on the back.

  • Absolutely not. It is an internationally recognised statistic that shows that this country bears comparison with any other developed nation in the world, and it marks a significant improvement on the situation that prevailed under the previous Labour Government. The fact is that more than £160 billion extra has been received since 2010. To put it into context, that is more than the entire annual NHS budget.

    We have addressed egregious loopholes that allowed some foreign nationals not to pay capital gains tax when they sold houses in the UK. That allowed people to live in the UK permanently but claim non-dom status; and it allowed people to avoid paying tax by calling their salary from their own company a loan. Those were abuses and we have closed them down. It is important to note that the UK has spearheaded a groundbreaking initiative to share information on beneficial ownership with more than 50 jurisdictions, including every British overseas territory and Crown dependency with a financial centre.

  • Will the hon. Gentleman give way?

  • No, because I am going to conclude.

    All that I have described shows the UK’s commitment to transparency and that we are at the cutting edge of financial propriety.

    It is absolutely right that the Government take further action to raise £4.8 billion by 2022-23. First, we are tackling online VAT evasion by making online marketplaces jointly liable for their sellers’ unpaid VAT; secondly, we are investing an additional £150 million to fund HMRC staff and the latest technology; and thirdly, we are tackling further disguised remuneration schemes, because if people are gaming the system, we should call it out.

    In short, the Bill bears down on aggressive tax avoidance and evasion. It sends out the clear message that we in this country believe in innovation, modernisation, investment and employment. We will back businesses that unlock human potential and generate jobs and wages, but we expect businesses to play by the rules, honour their dues to society and respect the next generation. The Bill meets those priorities and lays the foundations for a country that is fit for the future.

  • Does my hon. Friend agree that above all else, this is about persistent, detailed work over time to close the loopholes and deal with the tax gap? It is not about making a speech and pretending we can spend all the money that is being lost; it is a question of grinding away over time and getting the tax gap down from 8% to 6% and so on.

  • As always, my right hon. and learned Friend hits the nail on the head. There is no substitute for hard, detailed work. Ultimately, it is a game of cat and mouse, because those who seek to avoid tax will be ever more inventive. It requires detailed work to ensure that the loopholes are closed, and the Government are absolutely committed to that task. The Bill shows that and I am happy to support it.

  • I shall speak briefly. I congratulate my hon. Friend the Member for Oxford East (Anneliese Dodds) on her excellent Front-Bench speech.

    Early in his speech, the hon. Member for Cheltenham (Alex Chalk) talked about morality. There is morality in paying tax: we cannot have a civilised society without people paying tax to pay for public services and income being redistributed from those who have more than they need to those who have less than they need.

    The crisis in 2008 and the problem of tax avoidance and evasion, overseas tax havens and so on, all arose as a result of Geoffrey Howe’s disastrous decision in 1979 to abolish exchange controls immediately. That led to the crisis and the massive flows of money across national boundaries around the world, causing all sorts of problems. Even the then Governor of the Bank of England, Mervyn King, suggested to the Treasury Committee at the time of the 2008 crisis that if things got really bad, we might have had to reintroduce exchange controls. I am not suggesting that I will be able to persuade the Government to do that at this stage, but in time we are going to have to look at how we manage the vast flows of money across national boundaries around the world. It is the bankers who are the crooks—not the good bankers who look after our ordinary accounts, but those who gamble with money and often worthless bits of paper on the foreign exchanges.

    The hon. Member for Cheltenham talked about morality. Millions of ordinary people in this country do have a very moral sense. Many of them, including me—I am very well paid compared with ordinary people—say that they would pay a bit more tax if they could guarantee that the money went to the health service and to people who are less well off than themselves. At the same time, the mega rich, the corporates and the bankers are resisting any kind of constraint on their activities. I see where the morality lies: it lies with decent ordinary people, not with bankers. We must constrain those bankers somehow and have serious measures that will actually have the effect of stopping the tax avoidance and tax evasion that has bedevilled our society for so long.

  • I support my hon. Friend the Member for Oxford East. This Bill is weak; it needs to be much stronger. I look to a Labour Government in the very near future introducing serious measures to deal with tax avoidance and tax evasion.

  • The discussion that we had earlier on today and that we are having now in relation to tax avoidance really goes to the heart of the question: what kind of country do the Government want to be in charge of. It was clear from the earlier debate that the Government do not want to be in charge of a country that is open and upfront about tax changes and the impacts that they will have. They also have issues with tax avoidance and evasion and with the choices that they make. Their choices are very much not the ones that Scottish National party Members would make, nor indeed, I think, ones that the Opposition would make.

    On the issue of the tax gap in particular, the UK Government took the decision that it was more important to have immigration officers who were concerned with ensuring that the “wrong sort of people” did not get into the country than it was to have customs officers. We have ended up in a situation where there are very few customs inspections, which is a major contributor to our tax gap. We are talking about tax avoidance and tax evasion and about going forward into a situation in which we will need to make many more customs checks, when the UK Government have got rid of most of the people who know what they are talking about in relation to customs. We have a major problem that needs to be solved if we are to fix those issues.

    A Transparency International report mentioned 766 UK companies that had avoided tax. A quarter of those companies are still active in the United Kingdom. The UK Government do not seem to have taken any action to ensure that they cannot dodge tax in the way that they have. Among the actions that we have been talking about is protection for whistleblowers. We continue to call for whistleblowers to be better protected. It is really important for people to feel that they can come forward safely and that they can uncover major problems that exist at the heart of some organisations that operate within this country, and at the heart of some schemes that operate within these islands. If the UK Government produced stronger guidance and stronger protection for whistleblowers, it would allow and encourage more people to come forward.

    On the issues around the general anti-avoidance rule and the complexity of the tax code, we have been consistent in our criticism of how complex the tax code is. Someone posted a picture recently of the new version of the UK tax code that had just appeared: the thing was almost as tall as me. An absolutely huge number of bits of paper are required to make up the tax code. Is it any wonder that there are unintended loopholes that people can exploit? If the tax code was much simpler, if there were fewer tax reliefs and if the UK Government chose instead to give money to people rather than a tax relief, it would make things slightly better.

  • The hon. Lady suggested that there is a confusion in the tax codes. It is only in recent days that the Scottish SNP Government have introduced a raft of new bands for tax and indeed increased tax. I find that anomaly quite strange.

  • It is not actually a raft of new tax bands. As far as I know, it is one more band in the tax system with slightly different numbers for the pennies. But that is only in relation to income tax. Some 70% of people will pay less tax and 55% will pay less tax than they would in England. Does the hon. Gentleman believe, therefore, that the English system is taxing people unfairly compared to the Scottish system?

  • I thank the hon. Lady for indulging me. She says that 70% of Scottish taxpayers will pay less tax, but will she accept the fact that that is largely due to the changes made by the UK Government in raising the personal allowance?

  • The Scottish Government’s new starter rate of 19%, rather than 20%, for the first £2,000 that people earn is really positive. It is an incredibly progressive taxation measure, and it is something that the UK Government cannot claim; it is something that the Scottish Government are doing.

  • If Conservative Members wish to debate the progressive taxation system introduced by the Scottish Government, maybe they should stand for the Scottish Parliament.

  • I thank my hon. Friend for his comments. I do, however, want to say one more thing on the Scottish tax system, so I hope he will indulge me.

    The Scottish tax system is progressive. It is making a difference by ensuring that people who earn under £24,000 pay less tax. That is a positive measure and a good way forward. If members of the UK Government have concerns about the Scottish Parliament’s choices on tax, perhaps it would be better for them to support an increase in the block grant. They could also tell us whether they would cut the money that is going to be made up from the Scottish Government’s tax changes from education, local authorities or the health service.

    I will bring the Committee back to tax avoidance. I am sorry, Sir Roger, for testing your patience slightly. The Scottish National party has been consistent in its criticism of Scottish limited partnerships. My former colleague, Roger Mullin, was like a dog with a bone; he would not let go of this matter. That was to his credit because the UK Government decided to make changes to the SLP regime as they recognised that it is massively used for tax avoidance and dodging. There was a review of SLPs, but we are yet to see changes as a result. Will the Minister let us know at least the timeline for making those changes in order to ensure that SLPs are no longer used as a tax-dodging mechanism? This is an important change that really needs to be made, preferably sooner rather than later.

    Talking about the UK Government not working as they should regarding tax avoidance and evasion, the Panama papers and the Paradise papers have both been published in my time as an MP. It is very clear that the tax system—not just the global tax system, but even the system in the UK—is failing. It is allowing people and organisations to dodge tax. It is all well and good to talk about overseas trusts. In fact, this frustrates me a huge amount because the Government try to give the impression that overseas trusts are used by organisations such as rural churches in order to fix their roofs. It is not the case that they are used by organisations like that; they are used by people who are trying to dodge tax. We need the hardest possible line on that.

    We cannot see the United Kingdom turn into a low-tax, deregulated tax haven. If the UK Government are deciding what kind of country they want the United Kingdom to be, they should not choose one that involves deregulation. With Brexit, they have the opportunity to put their stamp on the future, but I am incredibly concerned about the way that it will go. In bringing back control, some of the reins that have perhaps been put on the UK Government will be taken off and they will be free, for example, to take away the working time directive, and to make changes to our world-class social security system, fair society and good business practices. That is incredibly concerning.

    We have called before, and we will not stop calling, for powers to deal with tax avoidance and evasion to be devolved to the Scottish Parliament. We believe that we would do a better job because we could not really do a worse one. We would put forward a fair and moral tax system and a general anti-avoidance rule in order to discourage people from dodging tax, and we would ensure that our tax gap was way smaller than the UK Government’s.

  • This Government are committed to bearing down on tax avoidance, evasion and non-compliance like no other Government in history. While I have enormous respect for the hon. Member for Oxford East (Anneliese Dodds), the shadow Minister, and I respect the spirited nature of her attack on our record, I am afraid she is misguided.

    We have a strong record. We have brought in and protected £160 billion of potentially avoided tax since 2010 as a result of over 100 measures that we have brought in. We have, as we have heard in the debate, one of the lowest tax gaps in the entire world, at just 6%. Contrary to some of the suggestions from those on the Labour Benches, that is a robust and firm figure; it is described by the IMF as one of the most robust in the world. It is, indeed, produced by HMRC, but it is produced to the strict guidelines set out by the Office for National Statistics.

  • The Minister mentioned HMRC. One of the things the Government have done over many years now is to squeeze HMRC, which has fewer offices and not enough staff. Does he not accept that every single additional tax officer collects many times their own salary? If the Government were serious about tax collection, they would expand HMRC substantially.

  • The hon. Gentleman may know that, in the last Budget, £155 million was set aside to be invested in HMRC, for exactly the activity that he has described. That is expected to bring in £4.8 billion through a further reduction in tax avoidance over the forecast period.

    The other point I would make to the hon. Gentleman is that HMRC’s effectiveness is not all about having lots of regional offices staffed with tax inspectors. Tax is collected today using sophisticated intelligence-led and data-led techniques. We need to invest in that if we are to continue to achieve the outstanding results we are achieving at the moment.

    We have borne down with penalties for developers and enablers of tax avoidance schemes. On the international side, our country has been in the vanguard of the base erosion and profit shifting project. We now have over 100 countries involved in common reporting standards, so HMRC can access information in real time to bear down on non-compliance in those jurisdictions. We have introduced new measures in this Budget in relation to clamping down on the abuse of overseas trusts. Since 2010, we have brought in £2.8 billion in additional revenues as a consequence of clamping down on the activities of UK residents hiding their wealth inappropriately in overseas trusts.

    We have, of course, been the Government that abolished permanent non-dom status. I have to disagree, I am afraid, with the hon. Member for Oxford East, who suggested that if someone’s parents were non-domiciled, that in some way suggests that that person would not be subject to the rules we have brought in. That is simply not the case. If someone has been resident for 15 of the previous 20 years, they will be deemed domiciled, irrespective of who their parents happen to be.

    New clause 8 suggests we should have yet another assessment. We have heard consistently in all the debates we have had on the Floor of the House on this Bill about having more and more assessments, but I would say to Opposition Members that we already have a robust figure for the tax gap. As I have said, it has been described by the IMF as one of the most robust in the world, and we certainly do not need even more information out there to prove just how successful this Government have been in bearing down on avoidance, evasion and non-compliance.

    However, as a consequence of this Bill, we will go even further than we have to date. Clause 38 relates to online VAT fraud, and we will make online platforms jointly and severally liable where VAT avoidance occurs, extending that approach from overseas sellers to domestic sellers, and ensuring that they are responsible for supplying accurate and appropriate VAT information on their sites. That will raise £1 billion by 2023.

    Clauses 11 and 12 will complete our work on disguised remuneration, and bearing down on that will have brought in £3.6 billion by 2019, when we will be closing down on those schemes.

    Clause 42 ensures that where there is illegal landfill activity, we apply the tax that would have been in place had those activities been legal, bringing in a further £145 million. There are also the changes brought in by clauses 20 and 21 to address avoidance involving intellectual property within companies.

    This Government have a record that is second to none when it comes to clamping down on avoidance, evasion and non-compliance. Labour had 13 years in which to address such measures, and did very little. In fact, the tax gap under the previous Labour Government was such that if we had it today, we would be over £12 billion short every single year—enough to fund every policeman and woman in England and Wales. We will continue to bear down, as appropriate and with vigour, on tax evasion and avoidance to ensure a fair and civilised society where those who are due to pay their fair share do so, to support our public services. I urge the Committee to reject new clause 8.

  • It is a pleasure to serve under your chairmanship, Sir Roger.

    First, let me respond to the Minister’s comments. I said before that it feels a little like groundhog day, although that is in February rather than at Christmas time. While I have a huge amount of respect for the Minister, and I am very grateful for his gracious comments, I suggest that in a moment he may be in the position of the Mayor of Wisconsin, who, he may remember, was nipped by the groundhog on groundhog day. I fear that the Minister is going to be nipped slightly after saying that Labour in government did very little on tax avoidance and tax evasion. He will be very much aware, because I have said this many times to him and to other Government Members, of the huge role that was played by Dawn Primarolo when she chaired the Code of Conduct Group. [Interruption.] The hon. Member for Beverley and Holderness (Graham Stuart) makes a comment about the tax gap. We have already discussed some of the conflicts around the calculation of the tax gap, such as the fact that, sadly, it does not include international profit shifting. If it did, we would have a much larger tax gap.

    I have mentioned the role of Dawn Primarolo, for Labour, chairing the Code of Conduct Group, which identified, published and eliminated 68 harmful tax measures. I can now reveal that there is much, much more that Labour Governments did. Perhaps, regrettably, the Minister has not been given sight of the letter to the Chancellor by my hon. Friend the Member for Walsall South (Valerie Vaz), the shadow Leader of the House. When she asked the House of Commons Library exactly what Labour Governments had achieved in the field of tax avoidance and evasion, it provided very full information, which she has sent on to the Chancellor. The Library made it very clear that under Labour Administrations there were 14 Budget reports, each of which included measures on preventing tax dodging. As well as those instances of action, there was the introduction of the disclosure regime and the Primarolo statement, which, in practice, revolutionised HMRC’s ability to tackle tax dodging. Labour Members will not take lessons from Government Members when we have a strong record in this area.

    The Minister did not make clear what the Government’s approach will be to the inclusion of business-like trusts in registers of beneficial ownership, as is now EU policy. Will that be the UK’s policy? That has been resisted by Conservatives so far; I hope that they will now change their tune. He also did not enlighten us on his opinion of the legal action that is being taken against a British newspaper and the British Broadcasting Corporation because of their revealing the reality of international tax planning by some actors who are giving others in that area a terrible name. I regret that he did not respond to my direct questions on those matters.

    I would like to respond briefly to comments made by other Members. The hon. Member for Cheltenham (Alex Chalk), when asked about whether HMRC’s figure on the tax gap included international profit shifting, refused to respond, sadly. I want to respond to the point about whether the Finance Bill protects governmental revenue. I do not want to go over the debates that we had yesterday and the many comments made by Labour Members, but I regret that in their new approach to the bank levy—reducing its rate and scope, and imposing an inadequate surcharge—the Government have decided voluntarily to reduce by a third the funds that come from the banking sector. Conservative Members can broadcast as much as they like about the additional tax that has arisen because of the banks’ profitability, but that is a natural consequence of the British economy’s return to profitability after the financial crisis. In practice, the Finance Bill does not act up to those goals in any sense.

    My hon. Friend the Member for Luton North (Kelvin Hopkins) has campaigned on tax transparency for many years, and he made several prescient points. The hon. Member for Aberdeen North (Kirsty Blackman) referred to the personnel challenges being experienced by HMRC. They are of enormous concern, as she said, in the context of Brexit, as a result of which we may have more customs challenges. There has been a substantial reduction in HMRC’s headcount of, I believe, around a fifth since 2010. I take on board the points that the Minister made about having the right capabilities and the right technical facility. However, when I look back at the Home Affairs Committee’s discussion of whether HMRC would be ready with the new CHIEF system and have the capability to deliver it, I am filled, I am sad to say, with concern rather than confidence.

    At this point, I will finish my remarks by commending to the Committee our new clause, which asks for a review of the provisions and whether they genuinely tackle tax dodging.

    Question put, That the clause be read a Second time.

  • Division 78

    19 December 2017

    The Committee divided:

    Ayes: 271
    Noes: 311

    Question accordingly negatived.

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    The Deputy Speaker resumed the Chair.

    Bill (Clauses 8, 33, 40 and 41, and schedules 9 and 11) reported, without amendment, and ordered to lie on the Table.