Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 18th April 2017 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

12. What assessment he has made of the potential effect on the tourism industry of a reduction in the rate of VAT.

[The Financial Secretary to the Treasury (Jane Ellison)]

The Government have carefully considered the evidence for applying a 5% reduced rate of VAT on accommodation and visitor attractions, which has come up several times in the House, but we believe, on balance, that the costs of doing so outweigh the benefits. We keep all such things under review, but there are no plans for a reduction in the rate of VAT on tourism activity.

[Mr Carmichael]

That is a disappointing answer. The campaign for a reduced rate of VAT for tourism estimates that a 5% rate would produce a higher tax take and could create 121,000 jobs across the country. That would be of particular benefit to many economically fragile coastal and island communities. Will the Minister meet campaigners to discuss things in more detail?

[Jane Ellison]

I am familiar with the right hon. Gentleman’s figures, and Treasury officials have met campaigners over several years to look at them. We will always look at the evidence, but we disagree with the campaign’s economic assessment. Together with HMRC, the Treasury assesses that such a cut would cost around £10 billion a year—approximately £7 billion for restaurants and bars, and about £3 billion for leisure and accommodation.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 17th January 2017 Commons Chamber

[Jane Ellison]

Absolutely we will. The Government’s finance platform referral policy helps small and medium-sized enterprises whose finance applications have been declined by their bank to explore alternative options. It requires the major banks to refer SMEs that are rejected for finance—with their permission—to finance platforms. We can do a range of other things to support the good point that my hon. Friend makes. I encourage all Members with SMEs in their area that have had finance applications rejected to refer them to some of these schemes, because they are making a difference.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Many small businesses in the Northern Isles are in the tourism sector. Given the Chancellor’s reported comments at the weekend, will the Government look again at the opportunities presented by the tourism industry’s proposals for a lower rate of VAT on that sector?

[Jane Ellison]

The House will not be surprised to learn that the Treasury is receiving a number of suggestions as to what might happen to VAT when we are no longer members of the EU, and I am aware of the pressure from and representations made by the tourism industry. I am meeting the Northern Ireland Affairs Committee tomorrow; this is likely to be one of the issues on its mind. Of course we look at these issues carefully, but we are still members of the EU, and all our legal obligations and so on remain while that is the case.

Autumn Statement

Alistair Carmichael Excerpts

Wednesday 23rd November 2016 Commons Chamber

[Mr Hammond]

I completely agree. To be clear, by the end of the Parliament, an additional £2 billion a year will go into research and development. My hon. Friend is right that life sciences and synthetic biology are an area in which the UK has gained a really significant lead in a disruptive area of technology that will shape the future of our economy and the economy of the world. There are three or four such areas in which we really have to invest now to ensure that we get the critical footprint that will allow us to be leaders in this fourth industrial revolution, just as we were in the first industrial revolution.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

May I welcome those elements of this statement that are positive? I am talking about the spending for infrastructure, especially in broadband and mobile phone signals, the reduction in fuel duty and the changes to universal credit. They are all steps in the right direction, but we wanted extra cash to be given to the NHS and social care, where it is needed, because as winter comes on we risk the problems becoming acute. I understand the difficulties that face the Chancellor today. He has a £122 billion black hole as a result of Brexit. As the hon. Member for Totnes (Dr Wollaston) said, instead of using the NHS as a political football, will he work with people of all parties and none to identify where that money can be found because, frankly, the NHS is too important to be treated like this?

[Mr Hammond]

First, I urge the right hon. Gentleman to look at the figures in a little more detail. The £122 billion that he quotes runs over a fifth year. It includes the £23 billion of discretionary additional commitments that I have made today, as well as more than £20 billion of baseline adjustments due to previous policy changes around welfare benefits and classification changes made by the ONS. He therefore really needs to look at the figures.

On the NHS, as I have said already, there are trust deficits building up across the country. At the moment, they are manageable within the context of the NHS’s own internal cash management system, but we will of course keep a close eye on them. We take the view that the NHS has asked for financing of a specific and defined plan. We have provided that financing. We now need to challenge NHS managers who have asked for that money to deliver the outcomes that they promised. We will watch very closely and stick close by as they do.

Leaving the EU: Financial Services

Alistair Carmichael Excerpts

Thursday 3rd November 2016 Commons Chamber

[Liz Kendall]

I cannot read the minds of those in charge of the many companies that are considering those options, but my right hon. Friend is probably right to say that there may be a greater likelihood that New York will benefit, although I think some jobs will move to the EU, too.

Financial services greatly rely on employing people from across Europe and the rest of the world. Many people in the sector were dismayed and, quite frankly, appalled by speeches made during the Conservative party conference. They do not care about where people come from; they care about what people can contribute. They understand that the success of their business depends on getting people with the right skills in the right place at the right time. They know that we cannot somehow separate freedom of movement from what is best for businesses and the wider economy, because the two are inextricably linked. Companies in the sector are clear: if they lose their ability to get the best person for the job, when and where they need that person, they will simply take their work elsewhere.

Even worse, young people just starting out in their careers, such as the 700 apprentices that HSBC takes on each year, may no longer have the chances that they currently do to travel and develop their skills. Brexit risks placing an unnecessary limit on our young people’s ambitions and opportunities.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The hon. Lady makes an important point. Is she aware of the particular importance of freedom of movement to the so-called Fintech sector? In the region of 30% of chief financial officers and chief executive officers in one of the major expanding areas of our financial services sector come from countries in other parts of the EU. Does that not illustrate what is at stake?

[Liz Kendall]

It absolutely does. The right hon. Gentleman raises an extremely important point. This growing and developing sector is driven by skilled people from across the globe, and we do not want to miss out on those possibilities.

Oral Answers to Questions

Alistair Carmichael Excerpts

Thursday 9th June 2016 Commons Chamber

[Mr Evennett]

My hon. Friend makes a good point. There is funding for communities to explore local first world war history, through the Heritage Lottery Fund, as well as through the War Memorials Trust for the repair and conservation of local war memorials. Local communities should be commemorating every aspect of their local communities to highlight what happened and remember those who served and gave their lives.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I thank the Minister for acknowledging the contribution of the young people of Orkney to the Battle of Jutland commemorations last week, at which he was present. Is not the lesson that involving young people makes it meaningful and poignant for those of all ages and that, if we want to engage young people, we should involve them, not lecture them?

[Mr Evennett]

I was delighted to be in the right hon. Gentleman’s constituency to experience the moving ceremonies for the Jutland centenary commemorations. It is vital that we engage everybody, particularly young people, so that they might learn about what happened.

Battle of Jutland Centenary

Alistair Carmichael Excerpts

Wednesday 25th May 2016 Commons Chamber

[Mrs Drummond]

I am incredibly lucky to have it in my constituency, and I urge all Members to visit it.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

rose—

[Neil Gray (Airdrie and Shotts) (SNP)]

rose—

[Mrs Drummond]

I will take one last intervention, from the right hon. Gentleman.

[Mr Alistair Carmichael]

The hon. Lady is being remarkably generous in giving way, in a remarkably well attended Adjournment debate. She will know that next week Orkney will be at the heart of the events to commemorate this remarkable episode in our nation’s history, just as we were at the heart of events 100 years ago, when Jellicoe led the fleet from Scapa Flow. I am struck by the range of interventions we have had from Members from right across the country, and it strikes me that what we will be commemorating is not just a memorable naval battle, but an enterprise involving communities right across the length and breadth of this country. That is the spirit in which it should be remembered.

[Mrs Drummond]

Absolutely. I do not think there is a single place that has not contributed to the Royal Navy at some time.

Jutland has always been a difficult battle for lay people to understand, because of the chaos of a naval action in poor visibility and darkness. Despite a massive toll of injury and death, the true impact of the battle was not understood at home, even immediately afterwards. There were some early interpretations of the outcome as a German victory, followed by an understanding that it was in fact a strategic defeat of Germany. Exactly a month later, the horrors of the Somme brought a fresh wave of shock to the population. Although we are here now to commemorate the centenary of the battle, it has spent most of the past 100 years lurking in the shadows of our national consciousness, yet the impact on my city of Portsmouth was profound. Portsmouth provided a major part of the crews of the biggest ships in the fleet. In Portsmouth’s manned ships we lost 3,000 lives in the battle of Jutland, more than we lost at the Somme. The impact of Jutland on families and communities in the city was huge.

The battle of Jutland jerked the Royal Navy out of Victorian complacency about its leadership. It had led the way with the building of Dreadnought and its successors at the insistence of Admiral Jacky Fisher, but over that period, and for long before it, the leadership of the Navy had fossilised ideas and played down the importance of initiative; it was constricted by the Victorian class structure.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 19th April 2016 Commons Chamber

[Mr Osborne]

I join my hon. Friend, who is such an excellent voice for Havant in this Parliament, in congratulating the small businesses in the Havant constituency. They are thriving, and we are helping them with major improvements to roads and infrastructure in the area.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

T10. Ministers will have heard the concerns of small business organisations about the change to quarterly tax returns. What are they doing now that that change is in place to monitor its operation and ensure that it does not become unnecessarily burdensome to small businesses?

[Mr Gauke]

Let me be absolutely clear with the House that we are not talking about quarterly tax returns. This is not about having to do a full tax return but about reporting; indeed, the purpose of the changes is ultimately to reduce the burden on businesses. It will start to be introduced in 2018. I hope that we will set out further information about the plans in the coming weeks. The intention is to ensure that we reduce the tax gap and, ultimately, help businesses to comply with the tax system.

Oral Answers to Questions

Alistair Carmichael Excerpts

Tuesday 1st March 2016 Commons Chamber

[Mr Speaker]

Thank you.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

7. What assessment he has made of the effects on the economy of the reduction in duty on spirits announced in the 2015 Budget.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

The 2% duty cut at the March Budget 2015 continues to support the 296,000 people across the sector, including such distilleries as Highland Park in the right hon. Gentleman’s Orkney and Shetland constituency.

[Mr Carmichael]

The Minister will recall that, last year, the Red Book estimated that the cuts in alcohol duties would lead to a reduction of £185 million in revenue. In fact, from April 2015 through to January 2016, we have seen a £190 million increase in revenues. Will he therefore look very carefully at the request from the Scotch whisky industry for a further 2% cut in spirits duties this year?

[Damian Hinds]

I know how much the sector values the cut in the duty—it was the first since 1996—and it is great to see the industry in good health, with the number of distilleries and exports to other parts of the world growing strongly. I have received representations from the Scotch Whisky Association among others in relation to the upcoming Budget.

European Union Referendum Bill

Alistair Carmichael Excerpts

Tuesday 8th December 2015 Commons Chamber

[John Penrose]

The hon. Gentleman is right; the referendum will affect all of us, but the argument that he is advancing applies equally to 15-year-olds and 14-year-olds, and to 55-year-olds and 64-year-olds. So he is right, but I am not sure there is a compelling argument for reducing the age just to 16.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

rose—

[John Penrose]

I will give way once more, then I must make progress.

[Mr Carmichael]

The Minister is being generous in giving way. May I caution him, though, against invoking the somewhat patrician instincts of the Labour Government with regard to the use of sunbeds as a reason for denying 16-year-olds the vote now? He has given us the full list of links, but surely the one link that matters because it comes to the heart of what it is to be represented in this place is that at 16 people pay their taxes.

[John Penrose]

That idea has a long and distinguished history. People were throwing tea into the harbour in Boston, saying “No taxation without representation” a long time ago. However, the argument has grown weaker over time for a number of reasons. First, the number of 16 and 17-year-olds who now pay income tax, though not zero, is a great deal lower than it used to be, partly at least because this Government and the previous one raised the threshold for income tax and also raised the school and training leaving age, so the number of people involved in paying income tax is significantly lower than it used to be. Secondly, there are now many more indirect taxes, so any six-year-old who buys whatever it may be will be paying VAT, among other things. Therefore the advent of indirect taxes rather weakens the logical foundations of that argument, one which I used to cleave to myself. I found myself in slightly uncomfortable positions as a result, because I realised that it was an eroded position.

Even if we were convinced that lowering the voting age was the right thing to do, this Bill would not be the place to do it, for two reasons. First, changing the voting age should not be applied to a single vote, even—or perhaps especially—if it is as important as this referendum. It is something that should be considered for all elections collectively and in the round, not piecemeal on an ad hoc case-by-case basis. Given the understandable sensitivity surrounding the EU referendum, making such a fundamental change to the franchise for this vote alone would inevitably and perhaps justifiably lead to accusations of trying to fix the franchise in favour of either the “remain” or the “leave” campaign. That is why we have chosen to stick with the tried and tested proven general election franchise. If it is good enough for choosing the Government of this country, surely it is good enough for the referendum too, and we should not jiggle around with it for a one-off tactical advantage either way.

--- Later in debate ---

[Mr Alistair Carmichael]

Will the Minister give way?

[John Penrose]

Once more, then I will stop and let others have a go.

[Mr Carmichael]

This is probably the most novel aspect of our debate today. It is, of course, for the Speaker to certify whether financial privilege is invoked or not, but it is for the Government to decide whether they are to take advantage of that. The Government did not take advantage of that in relation to the 2014 Wales Bill for exactly the same issue. What is different now?

[John Penrose]

I think I have just addressed that point. We cannot waive privilege and disagree with the amendment for other reasons. We therefore need to engage financial privilege, but I am taking the opportunity of this speech and this debate to make sure that those other issues are given an airing as well. I hasten to add that there is nothing new in this. There is a long-established precedent in this House. I shall leave it to the procedural experts to lecture us all on the historical antecedents of financial privilege. We are not creating any sort of unusual precedent here.

I have not sought to repeat or rebut every argument. As I said, the subject has been debated many times in the Chamber already. I have, I hope, given everybody a taste of the issues and stated the Government’s position. The House has expressed its view on this matter many times, and I ask us all to repeat that once more.

--- Later in debate ---

[Mrs Main]

I am more than happy to say that I meant SNP Members. It seems that whenever the word “Scotland” is mentioned in this place, an SNP Member feels that he or she must stand up and speak on behalf of the whole of Scotland. The Holyrood Parliament has introduced things in Scotland that I would not support in this House. I do not want to jump up and down and argue that everything should be transported across the border. The SNP’s argument that this House should automatically follow its lead in the Scottish referendum is bogus.

[Mr Alistair Carmichael]

Surely the distinction is that it was this House that gave the Scottish Parliament the power to extend the franchise to 16 and 17-year-olds in the Scottish independence referendum. We gave it that power knowing exactly how it was going to be used. We may not have made the change ourselves, but, as the hon. Lady’s noble Friend Lord Dobbs puts it, we acquiesced in it. What is the difference now?

[Mrs Main]

The majority of Members in this House do not support extending the franchise, as has been shown in numerous votes. As my hon. Friend the Minister has said, if every 16, 17 and 18-year-old is allowed to do one thing, there is no obvious logical extension that allows them to do something else. We accept that some bizarre rules apply. On voting, however, many of us believe that it is a step too far to extend the franchise to 16 and 17-year-olds while at the same time exempting them from other things. I have not heard an SNP Member arguing for 16-year-olds to be Members of Parliament. For me, that is the logical extension of extending the voting franchise to them. I do not believe that a 16-year-old would have the experience, life skills or maturity to represent a constituency.

--- Later in debate ---

[Mr Alistair Carmichael]

After my experience in the previous Parliament, the irony of hearing Conservative Members arguing for reform of the House of Lords is never lost on me.

In the brief time available, the point I am making is that there is a fundamental inconsistency in the Government’s position. In the previous Parliament the Prime Minister gave power to the Scottish Parliament to extend the franchise for the Scottish independence referendum to 16 and 17-year-olds. We knew what they were going to do with it and, as Lord Dobbs put it in the other place, the Prime Minister acquiesced in it, and he did so for a number of reasons. He did it because it was the most important vote that we would ever face, because it was to be a once-in-a-generation decision, and because referendums are different. That is exactly the situation that confronts the House today.

On financial privilege, it appears that having lost the argument, the Government now want to play their trump card or pull out a joker to thwart a very laudable aim. The hon. Member for St Albans (Mrs Main) said that we were opposing the use of financial privilege because we do not care about where the money comes from. We do care about where that money comes from because it is paid by—among others—16 and 17-year-old taxpayers. They pay it, so they are entitled to a say.

[Stephen Kinnock (Aberavon) (Lab)]

In the 20 seconds that remain to me—[Interruption.] It is now 19 and counting, so I will not take any interventions. I wish to argue that this measure makes sense. We need to trust our young people and empower them. Let us give them this vote and this chance.

Question put, That this House disagrees with Lords amendment 1.

Tax Credits

Alistair Carmichael Excerpts

Tuesday 20th October 2015 Commons Chamber

[Mr Clarke]

I do not want to take as long as the Front Benchers, so I will make a little progress.

Why do this now? There is never going to be a better time again to make more substantial progress in loosening our dependence on this subsidy to pay. I will not repeat what the Minister said admirably from the Dispatch Box about all the other things that are being done in more sensible areas, where we support the income and help with the expenditure of working families. That of course has to be key. That is the alleviation that everybody is demanding of what is bound to be difficult when we move forward. I am not naive. Politically, I point out to my Conservative colleagues that this is early in a Parliament, six months in, and my guess is that if we do not take this decision now, everybody will run for the hills if we decide we are going to do it in two years’ time. If we are looking, as a governing party should do, to what we are going to be able to show to the public by way of a successful economy when we next face them in five years’ time, we will see that now is the time to take the necessary decisions to get on with this.

More substantially, as has been mentioned by, among others, my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald), the former Solicitor-General, the employment situation is extraordinarily strong. This is the time to do it, because we are never going to get all the full compensating reactions in the labour market if we do not get them at a time when employment is at a record-breaking high, unemployment is very low and real incomes are rising at an amazing 3% a year.

In all the figures that keep being cited about what will happen to those who lose tax credit, there is one great incalculable, although people have tried to estimate it: what will employers do as they realise that their staff are losing their tax credit? We have already seen various firms lining up to say that they are going to pay my right hon. Friend the Chancellor’s living wage, some straightaway. That is because the labour market has changed, they do not want demoralised staff and they want to race ahead of the Government and say that they are giving a big pay rise. I accept that not everybody will be able to do that, but I think that employers, finding that the subsidy of tax credit is being drained away again, are in a better position now than they have been for years to say, “Perhaps we are going to have to give—perhaps we ought to give—a reasonable pay rise to the staff working for us because we can no longer rely on the Government setting in behind us.” Again, if we do not do it when the employment market is so strong, we will never do it at all—now is the time.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I thank the right hon. and learned Gentleman for giving way, because I agree with an awful lot of his analysis of the problems caused by the whole system of tax credits. The difficulty is that we do not start with a blank sheet of paper. The fact is that the cuts are in the here and now, whereas the possible increase in wages will come only in the future. Can he really see any employer giving somebody a wage rise because they have just had a third child who will not be eligible now for tax credits?

[Mr Clarke]

Quite a lot of low-paying employers will realise the effect on the morale of their staff, some of whom will tell them that they are losing their tax credits. I am not naive and know that this will not mean that nobody loses. Not everyone will be able to do that. The downsides of the change—my hon. Friends on the Front Bench explained the upsides that will affect a lot of these working families—may not be totally eliminated, but there will be fewer problems now if we go ahead with this. I have already said that getting rid of electoral bribes, which most parties have given over the years, always proves to be terribly difficult. I have seen some dreadful things introduced and then nobody has the nerve to vote against them. Perhaps I should not worry. I receive a free bus pass, free television on which I do not pay a licence, and a winter fuel allowance to save me from winter poverty. I know that I was meant to say to the previous Labour Government, “God bless you, Mr Brown. You are a worthy man, and I shall vote for you from now on.” My political views are more complicated than that. Tax credits were about the Labour Government bumping up people’s income on the eve of an election.