As published in the Derby Telegraph, 11th January 2013
Parliament returned this week and dealt with the important issues of welfare payments and tax avoidance.
On Tuesday we passed the Welfare Uprating Bill, which will see many benefits rise by 1% per year for the next three years as opposed to in line with inflation, as has previously been the case. It’s important to point out here that Disability Living Allowance and Carers’ Allowance will not be affected by these changes – it’s vital that those who are unable to care for themselves, and those who care for others, continue to be supported by the nation. Similarly, it doesn’t affect the state pension – our triple-lock guarantee ensures that the elderly will continue to receive increases in the state pension of the higher of increases in earnings, inflation or 2.5%.
The welfare budget currently accounts for more than we spend on education, health and defence combined. That’s why it’s so important that our welfare system should encourage people to work. It would be grossly unfair of us to expect hard-working families who pay their taxes and whose standard of living is currently being squeezed, to continue to pay for people who can but don’t want to work. Benefits have gone up by around 20% over the last 5 years compared to about 12% for wages, which is not an effective way of making work pay. These necessary changes complement the Government’s wider welfare reform programme, and give us scope to cut back on the welfare budget at a time when, despite reducing the deficit by a quarter, we’re still borrowing around £120 billion this year.
Equally as important as welfare reform was the debate on corporate tax avoidance, in which, as a former accountant, I was pleased to offer my contributions on how the Government could ensure that large businesses pay their fair share of taxes – just like the rest of us.
The Government is already doing much on tax avoidance, but it can go further. The Chancellor is right to be seeking international agreement on tax reform so that countries operate in similar ways and a tax system designed over half a century ago can work for the modern business environment. That will ensure it is more difficult for large businesses to avoid tax while ensuring that they still invest and create jobs. However, as I said in my contribution to the debate on Monday, one additional way we can ensure that corporations don’t avoid their fair share of tax would be to bolster transparency through forcing them to publish their tax returns alongside their accounts.
We are of course an international economy, and we want to encourage businesses to invest and spend here, as well as exporting to other countries, so we need to keep our tax regime competitive while ensuring that it’s fair. One of the ways we could do better in this respect would be to require the disclosure of cross-border transactions of large businesses with related parties, which would enable us to see what is real cost and what is real profit. This in turn would help HMRC in the collection of the right amount of tax from these businesses.
Finally an update on my A38 noise reduction campaign, which I’m co-ordinating to help get a better answer from the Highways Agency and local councils as to how they plan to reduce noise on the parts running through Amber Valley. I’m still seeing quite a few signatures coming through on my campaign web site at www.reducea38noise.com, and I encourage concerned constituents to sign the petition.