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Parliamentary Debates (Hansard) Tuesday Volume 518 16 November 2010 No. 72 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Tuesday 16 November 2010 £5·00 © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 723 16 NOVEMBER 2010 724 it. Can my right hon. Friend assure me that the new House of Commons Office of Tax Simplification will sort out this complexity sooner rather than later? Tuesday 16 November 2010 Mr Osborne: I can give my hon. Friend that assurance. A few months ago, he and I visited some small businesses The House met at half-past Two o’clock in his constituency, many of which were suffering under the burden of a tax code that has grown from 4,900-odd pages in 1997 to 11,500 pages today. The Office of Tax PRAYERS Simplification is specifically looking at the taxation of small businesses as well as at the issue of tax reliefs. The [MR SPEAKERINTHECHAIR] small business report will be coming out later next year, but we will get an interim report in time for the Budget. BUSINESS BEFORE QUESTIONS Alan Johnson (Kingston upon Hull West and Hessle) REDFERN INQUIRY (Lab): I add the congratulations of this side of the Resolved, House to Prince William and Catherine Middleton on their engagement. If they need a photographer, I understand That an humble Address be presented to Her Majesty, That that there is one available now. There has been a nice she will be graciously pleased to give directions that there be laid before this House a Return of the Report, dated 16 November juxtaposition of announcements this morning. Does 2010, of the Redfern Inquiry into human tissue analysis in UK the Chancellor think that he is aiding tax simplification nuclear facilities.—(Mr Goodwill.) by raising VAT to a nice round 20%, and does he agree with his Cabinet colleague, the Business Secretary, who Mr Speaker: I should like to make a short statement once described an increase in VAT as following the announcement from Clarence house today “a tax on the poor to absolve the sins of the rich.” ? of the engagement of Prince William to Miss Catherine Middleton. I am sure that Members from both sides of Mr Osborne: I have to say to the shadow Chancellor the House will join me in congratulating the couple on that his position on VAT is completely incoherent. It is this most happy occasion, and wishing them all the very well known that my predecessor, the right hon. Member best for their future together. for Edinburgh South West (Mr Darling), was planning a VAT increase, had pressed the Prime Minister at the time for a VAT increase, and—he is in the Chamber so perhaps he can confirm this—when asked about it on Oral Answers to Questions “The Andrew Marr Show” after the election, said that of course he would have gone ahead with one. TREASURY Alan Johnson: That was not the question. The fact that one looks at every available tax before reaching a conclusion is nothing new. The conclusion we reached The Chancellor of the Exchequer was asked— is that VAT should not be increased and that national insurance should be. The Liberal Democrats have been Office of Tax Simplification very fair in the way that they have betrayed the electorate. They have broken promises across the age divide—children, 1. Michael Ellis (Northampton North) (Con): What students and pensioners—so there is no age discrimination recent assessment he has made of the effectiveness of there. The Conservatives specifically said that they would the Office of Tax Simplification. [23963] not increase VAT. During the election campaign, we said that if they did not increase national insurance, The Chancellor of the Exchequer (Mr George Osborne): they would increase VAT. The Prime Minister denied May I add my congratulations to the couple and say that and said that they had no plans to increase VAT. that we wish them every happiness? I am not sure that He said that VAT was they will be particularly interested in this answer, but I “very regressive, it hits the poorest the hardest”. hope that the House will be. I can promise Members that it does. We are now in the The Office of Tax Simplification was created by the unique situation in which we face a tax rise that our coalition Government in July to reduce the complexity Prime Minister has promised will affect “the poorest of a tax code that has doubled in size over the past the hardest”. At the time, the Conservatives said that an decade. Last week, the office produced a comprehensive increase in national insurance would be “a tax on jobs”. list of the 1,042 reliefs that now exist in the tax system. The Chartered Institute of Personnel and Development By the time of next year’s Budget, we will have received said that it would lead to 75,000 jobs being lost while an its advice on which reliefs can be simplified or abolished increase in VAT would cost 250,000 jobs. to be consistent with the Government’s wider objectives. Michael Ellis: I congratulate my right hon. Friend on Mr Speaker: Can we have a question from the shadow establishing the Office of Tax Simplification. He will be Chancellor? aware that the tax system in this country is labyrinthine in its complexity, and small businesses in my constituency Alan Johnson: Why is the Chancellor proceeding with of Northampton North have been adversely affected by this tax on jobs that hits the poorest the hardest? 725 Oral Answers16 NOVEMBER 2010 Oral Answers 726 Mr Osborne: This is what the former Chancellor said Mr Osborne: First, next year, the pension will be on “The Andrew Marr Show”. Andrew Marr said: linked to the retail prices index number for September— “We now read from Peter Mandelson’s book”— 4.6%. That will be a welcome support for pensioners remember, he was in the Cabinet with the shadow from April. However, I should make the broader point Chancellor— that of course, re-linking pensions and guaranteeing through our commitment that they will go up either in “that you were quite keen on the idea of VAT going up.” line with earnings or prices, or by 2.5%, is a really Alistair Darling replied, “Well yeah, obviously”. substantial boost for pensioners. That reflects the fact We have taken the decisions necessary to restore that many pensioners have worked hard and saved hard some fiscal credibility to this country. We have a leaked all their lives. I am glad that that was one of the first memo from the shadow Chancellor’s office. It states: policy announcements of this coalition Government. “Fiscal discipline is if anything more essential in opposition than it is in government.” Mrs Grant: What fiscal action will the Chancellor take to assist voluntary sector organisations, which do That is from the shadow Chancellor’s office, but the so much to help our pensioners? truth is that he cannot tell us where a penny of his £44 billion spending cuts would come from. He had two Mr Osborne: The spending review set out a £470 million tax policies until the weekend—on graduates and 50p—and package of support for the voluntary sector, including announced that he did not agree with them. Frankly, an endowment fund and a transition fund. In addition, until he gets his act together and comes forward with a the big society bank, which will be funded by dormant credible economic policy, he will not be heard. bank accounts, will provide a new source of finance for the sector. The Government completely understand the Several hon. Members rose— incredible role that such organisations play in supporting elderly people in our community, and we want to help Mr Speaker: Order. From now on, first of all, exchanges them to do so. must be shorter. Secondly, let it be clear beyond doubt that Ministers answer for the policies of the Government, Nick de Bois: Many pensioners in my constituency not for those of the Opposition. That is the end of the have made representations to me because they are fed matter. up with having to buy annuities at 75. What plans does the Chancellor have to change the flexibility of that Pensioners (Fiscal Assistance) policy? Mr Osborne: We will remove the requirement to 2. Nigel Adams (Selby and Ainsty) (Con): What fiscal purchase an annuity by the age of 75. Draft legislation measures he has introduced to provide assistance for will be published in December, and we want the new pensioners since his appointment. [23964] rules in place by 2011, although we have also introduced transitional arrangements to help those who have reached The Chancellor of the Exchequer (Mr George Osborne): the age of 75 since I made the announcement in the With your permission, Mr Speaker, if I dare ask for it, I Budget. We think that people who have been responsible should like to answer this question with questions 6 enough to save through their working lives are responsible and 7. enough to handle their savings in retirement. 6. Mrs Helen Grant (Maidstone and The Weald) Kate Green (Stretford and Urmston) (Lab): Will the (Con): What fiscal measures he has introduced to provide Chancellor commit to working closely with the Minister assistance for pensioners since his appointment.
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