Finance Bill

Alex Salmond Excerpts

Tuesday 21st July 2015 Commons Chamber

[Sammy Wilson]

Thank you, Madam Deputy Speaker.

[Alex Salmond (Gordon) (SNP)]

rose—

[Sammy Wilson]

I will give way, and I hope it will be a short intervention.

[Alex Salmond]

It will be a very short intervention. My hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) is well enough versed in the procedure of this House to know that this is a debate on a Finance Bill and could potentially go until any hour, if he wanted to extend his interventions or speeches.

[Sammy Wilson]

That is a very worrying intervention for those of us who wish to get to the airport and go back to our constituencies, and I hope it will not be followed up on later in the debate.

Another issue I want to raise is corporation tax. I welcome the reduction in the rate of corporation tax and also the allowances. This has an impact on Northern Ireland, because as the rate set centrally is reduced, the cost of devolving corporation tax to Northern Ireland is reduced as well. That probably reduces Northern Ireland’s competitiveness vis-à-vis other parts of the United Kingdom. However, as the real target of the reduction in corporation tax is our competitiveness vis-à-vis the Irish Republic, a reduction in the cost of devolution—which can affect either what money we have available in the block grant or, indeed, how far we can reduce the level of corporation tax—is welcome.

We recognise the importance of corporation tax in attracting inward investment. Even though there might be lots of capital allowances and so on, the importance of the headline rate has been shown in the Irish Republic. This is something that we in Northern Ireland wish to implement as soon as possible, although given the way that some of the parties in Northern Ireland, including the Social Democratic and Labour party, have behaved in recent times in respect of the Stormont House agreement, the prospect of devolving corporation tax, with the advantages that it might bring, is being pushed further and further down the line. I hope we will not find ourselves hitting even more problems.

The other thing I wish to raise is the whole issue of taxes on energy. The reasoned amendment talks about the removal of the exemption from the climate change levy on the onshore wind. I accept the argument that the Government have given. Given that many of the companies involved are owned abroad, the tax concession given to them was not benefitting people here in the United Kingdom. We also need to bear in mind not only that there is huge opposition to many of the renewable sources, on the grounds of aesthetics and environmental impact, but that people are becoming increasingly aware of the cost of switching from cheap fossil fuels to expensive renewable energy, in terms of fuel poverty and the impact on industry.

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[Sammy Wilson]

Perhaps the hon. Lady takes a different view of what is small and what is large from what I do, but the £13.6 billion of subsidies that go to renewables do not simply come from the Government. They come from households, who pay for it in their electricity bills. That is why I support the Government’s attempts to remove some of the subsidies that consumers have to pay; £13.6 billion, or £190 per household, is hardly to be regarded as a small sum. My only worry is that environmental levies such as the climate change levy and the EU carbon trading scheme will rise from £5.6 billion this year to £16.1 billion by the end of this Parliament, which will add to energy costs and have an impact on industry and on household bills.

[Alex Salmond]

Does the hon. Gentleman accept that on a sunny day in East Antrim, one gets a magnificent view of some of our magnificent onshore wind farms on the west coast of Scotland, and will he concede that the contract for difference on wind energy on shore is lower than that for new nuclear energy?

[Sammy Wilson]

The right hon. Gentleman compares nuclear energy with renewable energy, but of course we have the option of gas, oil and coal. Before the hon. Member from the Green party becomes apoplectic about the impact of those energy sources, let me point out that some of the drivers in Europe who want to push us towards renewables, especially the Germans, are building coal-fired power stations because they are concerned about their industry and their economy. I welcome those aspects of the Finance Bill, and that is one reason why I will not support the reasoned amendment. I think that the Government are right and we have to redress the balance. We have to ask what is important for the UK economy and for UK consumers.

Finally, I turn to the employment allowance, which is important in drawing people into work and encouraging employers to take on new workers. The uptake in Northern Ireland has been very poor. I do not know whether that is because employers have not had sufficient information or because the scheme has not been widely publicised, but when we are trying to find ways of encouraging further employment, the Government should take that on board.

As I said, we will not support the reasoned amendment. We have concerns about many aspects of the Bill, but we believe that parts of it will be good for the economy generally and in Northern Ireland.

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[Maria Caulfield]

I assume that Opposition Members will support the wage increase for the lowest earners. I am pleased to see the hon. Lady nod in agreement.

However, we are doing more than just increasing the national living wage. We are also reducing the tax that people pay, not only by raising tax thresholds but by freezing national insurance, VAT and fuel duty levels for this year, to ensure that they have more money in their pockets.

Let me now say something about housing. It is, again, the Conservatives who are helping those on low incomes to reduce their outgoings by lowering social housing rents by 1% a year for the next four years. Opposition Members feel that they cannot support that move, and will either oppose it or abstain. That, I think, shows their true measure. However, the Bill goes a step further by ensuring that social housing occupied by people who have done well, and are earning more than £30,000 a year outside London or £40,000 inside London, will no longer be subsidised by hard-working taxpayers who may be earning less than that themselves. Instead, those people will pay market rents—the same market rents that others in the same position pay in the private housing sector.

In addition, to increase the supply of affordable housing, the Chancellor has announced an increase in the rent-a-room relief, which will enable people to rent rooms without having to pay tax that acts as a penalty. The tax relief for buy-to-let landlords will be reduced, too. That will level the playing field for ordinary families trying to get on the housing ladder, who have been in competition with buy-to-let landlords who have previously been at a significant advantage.

[Alex Salmond]

I represent what is on paper one of the most prosperous constituencies in Scotland, yet more than 3,000 children in Gordon are in working families who will be worse off as a result of the Budget, and I doubt whether there will be fewer children in Lewes similarly affected. What does the hon. Lady say to the children of working families in her constituency who will be worse off as a result of this Budget?

[Maria Caulfield]

There are lots of hard-working families in my constituency and if the right hon. Gentleman visits us he can see for himself that they are fed up with having to go out and work long hours often on low pay to subsidise a benefit system that historically has not been there to help such people.

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[Lucy Frazer]

I am grateful for that intervention. But clearly it is the time, because the SNP has tabled an amendment, and so have the Greens.

[Alex Salmond]

rose—

[Lucy Frazer]

So I come to the points raised.

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[Alex Salmond]

It will not have escaped the hon. Gentleman’s notice that the Government seem to have run out of speakers on the Second Reading of the Finance Bill. Might that be because of the reality that thousands of families with children in every single constituency in this country are going to be worse off as a result of the Budget? Is that why the Tory party seems so unenthusiastic about supporting the Budget?

[Mark Durkan]

The right hon. Gentleman makes a very good point. I think many people will wonder about the paucity of attendance on the Benches at such an important debate today. We have been served notice that there will be various amendments in later stages of the Bill, but I think people would have expected a bigger attendance here today. Given the impact it will have on many people with marginal incomes and the consternation that many people feel about MPs’ pay increases and other matters, they will be wondering where everybody is.

[Mark Durkan]

Maybe they are away celebrating other people’s birthdays. [Laughter.] Maybe the hon. Gentleman, having had so many interventions, can now safely go and celebrate his. We all know he was here and not somewhere else.

In the provisions on the national living wage and some of the other early clauses, the Chancellor seems to be doing exactly what he decried his predecessors for doing: passing legislation to put restraints or constraints on himself. He is advertising in legislation his own behavioural discipline. It is the ultimate political selfie to put oneself into legislation. Some only last for the life of the Parliament, yet are being put into legislation. How gratuitous a political exercise is that? Perhaps that is why other hon. Members cannot see fit to indulge the Bill too much.

Government Members have said that the charter for budget responsibility is a key issue, which it is, but a key aspect of the charter is the welfare cap. In yesterday’s debate, we heard references to the benefits cap—there has been much discussion about the benefits cap, which affects households—but less attention has been paid to the overall implications of the welfare cap, which was first introduced as part of the charter last year. If we look at what the summer Budget, as opposed to the March Budget, does for the welfare cap over the next four years, we find some revealing figures. In the March Budget, the overall welfare cap for the UK for 2016-17 was £122.3 billion; in this Budget, it is £115.2 billion. For 2017-18, it was £124.8 billion in the March Budget; it is £114.6 billion in this Budget. It was £127 billion for 2018-19 in the March Budget, ahead of the election; it is £114 billion in the summer Budget, after the election. For 2019-20, it was £129.8 billion in the March Budget; in this summer Budget, it is £113.5 billion. Over those four spending years, that is a cumulative cut of £46.5 billion, as a result of the charter for budget responsibility and the welfare cap.

Many Opposition Members—or perhaps not many of us, as I think only 20-odd of us voted against the welfare cap when it was introduced—said that what the Treasury was bubble-wrapping as a neutral budgetary tool would turn into a vicious cuts weapon, and now we see it, in the name of the welfare cap. When there is so much discussion about the benefits cap, people forget that the real story is the welfare cap, and that will bear down on people in my constituency and lead to more conflict around the next wave of welfare reform when it comes to the Northern Ireland Assembly.

We heard earlier from the hon. Member for East Antrim (Sammy Wilson) and we heard yesterday what he thinks the implications of the cap will be. If he was still here, I would be saying to him directly that on this issue he and his party need to catch on; they have been wrong in the past, and it is a bit late to be scrambling now, when they have invited this very situation. Many of us told them that their support for the welfare cap, on top of their support for the last wave of welfare reform in the Assembly, would lead to this very situation, but they told us to forget about those concerns because there was nothing we could do about it.

[Alex Salmond]

Will the hon. Gentleman accept that Members from eight political parties last night voted against the welfare Bill, so perhaps it is a case of “better one sinner that repenteth”?

[Mark Durkan]

Yes, I certainly have no problem with that, and I welcome the breadth of opposition. I also welcome the depth of opposition I heard from some hon. Members who, because of their party’s Whips situation, did not vote but whom I know care passionately about a number of issues and have served notice that they will vote in the amendment stages. I hope, therefore, that we can go further in this Bill and yesterday’s Bill to build on that.

However, let us be clear: this Bill purports to cover more than just the issues that we discussed yesterday. Hon. Members have referred to the questions around corporation tax, and of course the Government have served notice that they are going to reduce it. I am someone who has supported the measures to give Northern Ireland the devolved capacity to vary the rate of corporation tax, and I have no issue or argument against that. Indeed, I predicted that one of the reasons why the Conservatives were so keen to devolve corporation tax was that they wanted to create an excuse or cover to do so in England and Wales as well.

However, although that can be welcome in Northern Ireland at one level, because it means that the cost of any variation in corporation tax for us will be less in time, let us be clear that, contrary to what the hon. Member for East Antrim said yesterday, it will not be parties such as mine holding these issues up; it will be the tactics and policies of the Government, who are trying to create a budgetary arm-lock on the devolved Executive. They are basically saying, “Unless you get your Assembly to pass the legislation that we want in respect of welfare reform, we are going to create budget stress”—which in turn will lead to a budget crisis, which in turn will become a political crisis—“as the price of your failure to do so.”

When we are locked in that budget crisis—which will be contrived and the result of the Government bullying us on welfare reform—they will then say, “You don’t have a balanced and sustainable budget; therefore, you’re not getting your corporation tax powers.” Just as the Government said they would not introduce the corporation tax Bill until they were satisfied with what it looked like the Assembly was going to do on welfare reform, so they have built in a clause for Northern Ireland in the Bill that says that, come 2017, they will not switch on the power unless they are satisfied that there is a balanced and sustainable budget.

When it comes to the outstanding measures in the Scotland Bill, I hope that hon. Members present in the Chamber will be mindful of the possible need for a clause to prevent the Treasury from adopting any such tactic on the dual exercise of welfare powers between Westminster and the Scottish Parliament, because the “twilight zone” difficulty that Northern Ireland has got into offers a very salient warning.

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[Barbara Keeley]

rose—

[Alex Salmond]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The right hon. Member for Gordon (Alex Salmond) puts me in something of a dilemma, because he appears to be indicating that he wishes to take part in the debate, but I do not recall that he was here for the opening speeches. I do not think he was, was he? If he wishes to contradict me with evidence, I will of course accept his point. I will allow him to explain.

[Alex Salmond]

I am grateful for the opportunity, Madam Deputy Speaker. I have been here for some substantial time in this debate—not for the opening speeches, but longer than just about any Labour or Conservative Member, apart from those on the two Front Benches. Indeed, I was here when the total number of Labour and Conservative Members present was in single figures. I am well aware of the rules of the House, Madam Deputy Speaker—[Interruption.]

[Madam Deputy Speaker]

Order. It is not for anyone else to judge who will speak and not speak in the Chamber. The right hon. Gentleman is, indeed, well aware of the rules of the House, as a seasoned performer in this Chamber. I know that he will appreciate that I also am aware that he was here for much of the debate, but not for the opening speeches. There are other people whom I have prevented from speaking earlier this afternoon because they were not here for the opening speeches. It is, however, obviously open to the right hon. Gentleman to intervene during the winding-up speeches that are about to begin from the Front Benches.

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[Madam Deputy Speaker]

Normally, speeches from the Treasury Front Bench and the Official Opposition Front Bench count as the opening speeches. But I have to say that that is a very narrow way of looking at the issue. If a Member wishes to take part in a debate—[Interruption.] Order. If a Member wishes to take part in a debate, it would be courteous and proper to be here for the whole of the debate. I am making no criticism of the right hon. Member for Gordon, who was here for much of yesterday’s debate and for much of today’s debate. I am just not allowing him to make a speech; it is not that I am not allowing him to say anything.

[Alex Salmond]

On a point of order, Madam Deputy Speaker. May I just point out that it is not immediately obvious to Members that a Second Reading debate on the Finance Bill will not be able to fulfil its time slot—they are not aware of that at the start of a debate? But, Madam Deputy Speaker, may I say that, as ever, your ruling has been most gracefully made, and therefore will be most gracefully accepted.

[Madam Deputy Speaker]

I thank the right hon. Gentleman for his graceful point of order.

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[Barbara Keeley]

I do not believe that is the case. We have been through the whole of the last Parliament being the official Opposition and we are still in that position again after the election, much to our chagrin. I know there are a lot of new Members in the House, but I must say that a Bill does not pass through the Commons in one sitting—it does not pass through the Commons in one day—because it goes to Committee. When we come back in September we will have a Committee of the whole House, and we have started to table amendments for debate on those days. There are also Public Bill Committee sittings, Report and Third Reading, so there are many occasions when speeches can be made.

[Alex Salmond]

As my hon. Friend the Member for Edinburgh East (Tommy Sheppard) pointed out, the Labour Opposition have divided the House on the Finance Bill for every Budget since 2010. What is it about this Budget—this extraordinary, regressive Budget—that makes it such that the Labour party does not want to support our opposition to it?

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

It is a pleasure to close this wide-ranging and lively debate. The right hon. Member for Gordon (Alex Salmond) reminded us, in a timely intervention, that it could have gone to any hour, but in the event it was not to be. We were helped in our timeliness by the Labour party. It has only been a short week so far, but it has not been a great week for Labour unity. Nevertheless, it has discovered a new answer to the question of how not to show disunity, which is preferably not to show up at all.

This Government have set out a bold plan for the next stage of Britain’s economic recovery and this Finance Bill helps us to deliver it. The Bill will help move our economy from a low-wage, high-tax, high-welfare economy to a higher-wage, lower-tax, less welfare-reliant economy. It rewards work and ensures that hard-working families can keep more of the money they earn. It cuts taxes for businesses, helping them to create jobs and deliver the growth we need to secure the future prosperity of our nation. And it tackles avoidance.

[Alex Salmond]

Let us get to the nub of this. Is it not the case, confirmed by a number of analysts, that in every single constituency in this country, thousands of families with children will be worse off as a result of the Budget? What does he say to those low-paid families who will be substantially worse off as a result of this Budget?

[Damian Hinds]

What “he” says is that eight out of 10 families will be better off as a result of the blend—the complete set—of measures in the summer Budget.