29 JUN 2017

The pay cut amendment to the Queen's Speech

The pay cap of 1% on public sector workers may need to be revised as some of my colleagues are suggesting. However, this needs to be planned and properly costed; not done on the hoof. This was what was wrong with yesterday's amendment put forward by the Labour Party in the debate on the Queen's Speech. This failed attempt to try to attack austerity is all the more shocking given that it is Labour who are the ones who left the record deficit we have been clearing up over the last 7 years.

Of course, I understand the sacrifice that has been made to deal with Labour's debts, including by public sector workers. But we need the proposed end to the pay cut to be well costed and we must also ensure that we continue to protect jobs and deal with our debts.

Independent public sector pay review bodies are already making recommendations to the Government and I await these and the response we will make in the Budget.

On the question of tax avoidance, I am pleased that the Government has introduced a new tax on diverted profits. This will prevent companies from creating tax advantages by using transactions or entities that lack economic substance. I am also pleased that the 2016 Budget included measures to stop the complex structures that allow some multinationals to avoid paying any tax anywhere or to deduct the same expenses in more than one country. .Since 2010, HMRC has secured around £140 billion in additional tax revenue through tackling avoidance, evasion and non-compliance. In the UK, the tax gap - the difference between the amount of tax due and the amount collected - remains one of the lowest in the world.

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