Finance (No. 2) Bill

Alison Thewliss Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP) [V]]

It is a pleasure to follow the Chair of the Treasury Committee. As the SNP reasoned amendment sets out, the Bill falls short in a number of respects. My colleagues and I approach the Budget and the Finance Bill that follows with a sense of frustration, given the limited powers that the Scottish Parliament has over many matters in the Bill, and the imperviousness of the UK Tory Government to suggestions of improvements to their legislation. The most minor suggestions for how they might do things better are dismissed, whether they come from us as Members of the House, or from expert organisations.

That is a symptom of how this Parliament does its work, with no real incentive for compromise. There are aspects of the Bill in clauses 36 to 38 where Ministers are coming back to fix measures from the 2017 Finance Bill to make them work as intended. Expert organisations such as the Chartered Institute of Taxation, the Association of Taxation Technicians, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in England and Wales, and the Low Incomes Tax Reform Group have all pointed out sensible tweaks to the Bill the Government could easily make. I urge Ministers to listen carefully to that expertise and to act.

I ask again for evidence sessions ahead of the Finance Bill. All other Government Bills—even, on occasion, private Members’ Bills—schedule evidence sessions, but not this major piece of legislation, which will impact everyone in these islands. The recent Financial Services Bill had useful evidence sessions where the Economic Secretary to the Treasury asked useful questions of our witnesses. I see no reason why the Government would not make time for that. Indeed, they might make better, more considered financial legislation if the evidence to support it was better examined.

Over the past year, the UK Government, like all Governments around the world, have taken a range of steps to support people and businesses. The Bill gives us an opportunity again to assess those measures, commend those that have worked, and examine which could usefully be extended and enhanced. It also allows us the chance to reflect on how we got here. The overriding context for the situation in which we find ourselves today has been a decade of austerity. The British Medical Association, in an article last October, referred to austerity as “covid’s little helper”, reflecting on how public health services in England have been cut back and undermined, resulting in a stalling of life expectancy in England. That came through the political choices—the budgetary and taxation choices—of this UK Tory Government. The tax breaks and the loopholes of this and previous Finance Bills, and the decisions of the Chancellor, have caused significant damage to public services across the UK, including in Scotland, where people did not vote for this austerity but have been forced to mitigate its impact.

We know that austerity is far from over; a second wave of Tory austerity is rushing towards us. The IFS has said that under current plans

“many public services are due a second, sharp dose of austerity”

and that for non-protected Departments the

“Chancellor’s spending plans are even tighter than they first appeared.”

Departments such as the Ministry of Justice, the Ministry of Housing, Community and Local Government, and the Department for Work and Pensions, will suffer cuts of 3% in 2022-23, which represents an 8% cut relative to pre-coronavirus plans in March 2020. When the Barnett formula is taken into account, that represents a cut of around £4 billion. It is a cut we cannot afford, on the back of so many that have come before. I am sure the Tories will argue that the Scottish Government should simply put up taxes, but they continually fail to recognise that we already pay in to the UK coffers, but we do not have control over what the Chancellor chooses to waste on dangerous vanity projects such as Trident, or on crony contracts to his Tory pals.

The measures in this Finance Bill regarding the coronavirus job support scheme and the self-employment income support scheme show the degree of complexity that we are now left with as a result of schemes being brought in necessarily in haste and extended for longer than the UK Government had anticipated. While the vaccine roll-out is progressing well, we are not yet out of this pandemic, and the scenes of young people out celebrating the end of lockdown last night should give us all a wee bit of pause for thought, along with the new variants that could evade vaccination in the future.

The UK Government have never been able to guarantee, regardless of their rhetoric, that life will be back to normal any time soon, so they should ensure that the support schemes reflect the course of the virus and extend them for as long as is necessary. They must now fill in the gaps in the support schemes and finally give some certainty to the millions of excluded people who have been left with not one penny piece from the UK Government for over a year.

I received some mail this morning with a book called “£xcluded Voices” from Stephen Liddell. It includes 151 stories of those excluded from support, and I hope very much that his book reaches the Chancellor’s desk. Stephen is a tour guide whom I had the pleasure to meet during a demonstration last year, and 95% of his income comes from overseas tourists. It is a sector of the economy that is highly unlikely to get going even when sectors start to reopen, and that will be two summer tourist seasons lost. He is among so many who have been left behind, completely without hope—and entirely without justification.

UKHospitality has highlighted that, with over 1 million employees in the hospitality sector still on furlough, it was critical the schemes were maintained, and it did welcome that, as do we. Yet moving to business contributions from July could prove difficult for some businesses that are not yet trading or that are off-season, and could yet result in further job losses. The stop-start, on-off furlough dither last autumn caused job losses from employers unable to bear the costs and the uncertainty, and the UK Government must not repeat that mistake.

It almost goes without saying that the SNP wants the £20 universal credit and tax credits uplift to be made permanent, but I have a wee query on the specifics in clause 31 about making the working tax credit uplift match the temporary £20 increase to UC by means of a one-off £500 payment. There are real concerns about the rough edges of this policy from experts such as the low incomes tax reform group. My understanding is that this £500 will be paid automatically, but there will be a charge to income tax where someone receives this in error—an error that would be HMRC’s error, not the recipient’s. There is a lack of certainty about what will happen if people get money they are not entitled to through HMRC’s own error, and what those receiving support are expected to do if they are unsure, especially as there is only a 90-day period in which to notify that error. I ask the Minister to give us some further detail on how exactly he envisages that this will work and what information people will receive.

We will certainly get into further detail next week, but I wish to run through some of the concerns that we and experts have with the measures put forward in this Finance Bill, in the doubtless vain hope that Ministers will start to get moving on improvements to it.

Beginning with the income tax personal allowance uplift and freeze, this would appear to be contrary to the Government’s stated policy on low-income taxpayers. National insurance thresholds will continue to move, and those under the personal allowance threshold, including those on universal credit, will not really see any benefits from this move. As always with the UK Government, there are problems in the detail. I would note that Ministers are also not taking the opportunity to amend the high income child benefit charge, which has proved so problematic for so many people.

We welcome the UK Government’s move on corporation tax, but would push them to work alongside President Biden on his call for global action on corporation tax. This is a golden opportunity for a concerted effort to move away from a race to the bottom.

On the super deduction, I must at least give the UK Government credit for a snazzy slogan, if for nothing else, but we have some queries about how it will work in practice, whether the benefits of the scheme will make a real difference to the wider economy and, as some have said already, whether this will give rise to tax dodges. The SNP has raised concerns for years about the UK’s low productivity, and the UK Government might want to act further to encourage businesses to invest more in staff, skills and technology. A real living wage, rather than their pretendy living wage, might be a better place to start.

We believe there should be a greater focus on pushing investment to meet net zero. The UK Government must ensure that this investment is one for future generations, and I ask how exactly Ministers intend to monitor the effectiveness of this super deduction. There should be safeguards against what Tax Justice has called egregious investments such as Jacuzzis. I note also that the purchase of flags might be on the list of things people could buy through their companies, which will no doubt please all the Tories on Zoom.

The Association of Taxation Technicians has some concerns about interaction with the introduction from 1 April 2023 of the small profits rate. I appreciate that the UK Government may believe they have good grounds for excluding leased or second-hand machinery, but the ICAEW has pointed out that industries that lease plant and machinery rather than acquire it outright make a significant contribution to the UK economy. The Construction Plant-hire Association estimates that the UK’s plant hire industry is worth £4 billion per annum, and the Construction Equipment Association estimates that 60% to 65% of all construction equipment sold in the UK goes into plant hire. This sounds to me to be quite significant, and I would ask Ministers to set out their reasoning in greater detail.

Moving on to clause 15, the annual investment allowance has jumped about over recent years with permanent and temporary limits, so it would be good to get more certainty on that. In the “Tax after coronavirus” report, the Treasury Committee, on which I sit, commented:

“The Annual Investment Allowance is valued by business and it appears well targeted to promote growth in small and medium-sized enterprises. As with all tax reliefs there is likely to be some deadweight cost; but we urge the Government to look favourably on further extension and possibly permanency at the existing level, which would provide welcome certainty to small and medium-sized enterprises.”

The ATT agrees that such extension or permanency would be welcome for many businesses in providing certainty, although for smaller businesses an opt-out provision might be a useful solution.

Part 2, on plastic packaging tax, takes up a substantial chunk of the Bill and is a particular area where I would like to see more evidence and scrutiny of the UK Government’s proposals from experts in the sector. There is certainly a lot in here for businesses to get their heads around. The Green Alliance sent a helpful briefing to Members, which I hope Ministers have also seen. It suggests: differentiated obligations; an escalator for the percentage of recycled material and the level of tax; a price-stabilising mechanism to de-risk investments in reprocessing and ensure that recycled content, as the more sustainable option, is always cheaper than virgin material; removing the exemption from packaging made of multiple materials, which can be difficult to recycle; and, finally, ensuring that a verification mechanism is in place. Those are all worthy of further consideration, and I am sure that as the Bill progresses we will hear from more organisations out there with their views. We have an opportunity to make legislation useful not only for the here and now, but for the future.

Clauses 92 and 93 are on VAT on tourism and hospitality, which is an area long overdue for reform. The UK has had one of the highest VAT rates on hospitality in Europe. It is welcome that the UK Government heeded the calls from industry and from the SNP for a cut in VAT for tourism and for hospitality. With people unlikely to be able to travel for their holidays this year, it is more important than ever to build the local tourism sector up and encourage people to take up the wonderful tourism opportunities on our doorstep. Scotland has done its part in giving 100% business rates relief for hospitality, and the UK Government must now do their part, too.

It is deeply disappointing that the UK Government will extend the 5% rate only until the end of September, as due to the lockdowns people have not been able to take full advantage of the reductions. Increasing the rate to 12.5% until March next year—then presumably it will revert to 20%—will mean that the tourism and hospitality sector will not see the benefit over the October holidays or the Christmas period, and then it will take a further hit next Easter. As I understand it, the reduction also applied to live music, funfairs, shows and events, so it makes even more sense to extend the reduction to a sector that has been unable to open its doors at all for the best part of a year. I urge the UK Government to consider that fully. There are also some practical difficulties for firms in moving the rates and dates, as that may cause confusion. A wider review of VAT more generally would seem sensible. I ask Ministers where that features in their plans.

On clause 113 and schedule 25, on penalties for failure to pay tax, there is no doubt that I support people paying the taxes they should in full and on time and that there should be a penalty for not doing so. That said, the ATT and the ICAEW have concerns that the proposed late payment penalty regime is overly complex and, as a result, will not be understood by taxpayers and not act as an effective deterrent. The ATT in particular feels that allowing HMRC up to 48 weeks in some circumstances to notify a person of the award of a penalty point, and up to two years to assess a penalty liability, is quite excessive. The periods should be further reduced and/or assurances should be given by Ministers that they will be used only in the most exceptional circumstances.

I turn to freeports. We on the Opposition side continue to have concerns about their effectiveness and the potential for tax dodging. The point by the Chair of the Select Committee about displacement was also well made. Their use around Europe and around the world has left many scratching their heads about what the UK Government aim to achieve. Scotland has set out a differentiated approach, engaging in good faith but adapting and improving the UK’s model to address the climate emergency in our green port approach. The Scottish Government stated:

“Operators and beneficiaries will be required to commit to adopting Fair Work First criteria and contribute to Scotland’s just transition to net zero”.

Trade Minister Ivan McKee recently raised concerns about the UK Government’s lack of willingness to engage on that while pushing forward with their own plans. If devolution means anything at all to the UK Tory Government, they must allow Scotland to pursue a model that fits the policies and ambitions of the democratically elected Scottish Parliament and Scottish Government. They must step back from using the United Kingdom Internal Market Act 2020 as a battering ram, driving through policies that Scotland did not vote for.



Where this Finance Bill really does not go far enough is on tax evasion and tax avoidance. Yes, there are some measures here, but there are also some massive gaps. Despite raising it in every Finance Bill, Scottish limited partnerships continue to exist as a means of shifting dirty money around the world. Just last month, the investigative journalist, David Leask, wrote about NovoLine Resources, a shell company with an address in Edinburgh, which was blacklisted by the World Bank following an investigation into the contracts that it won to supply equipment to Uzbekistan’s Health Ministry. If the World Bank can see that this company is up to no good, it baffles me why the UK Government will not act to shut it down. Ministers must get serious about the financial crime that their lack of attention is facilitating.

There are also gaps around trusts, and we are still waiting for the much-delayed Registration of Overseas Entities Bill. I really do have to question whose interests this serves: it is now three years since I implored the Government to stop fannying about on this matter during the consideration of the Sanctions and Anti-Money Laundering Act 2018, and very little has happened since.

This is another great big chunk of a Finance Bill, but there is so much still that is missing. It is a point of some frustration that the Scottish Parliament, with its ambitious agenda for fairness, sustainable growth and a green recovery, does not have access to the levers and the powers that it needs and that, in so many instances, the UK Government, who do, do not even want to make use of them. We will do our best in diligently trying to improve this Bill. We will engage with experts and we will move our amendments, which the UK Government will almost certainly choose to reject. I look forward to the day when these financial powers are vested much closer to the people of Scotland, in our own Parliament, where we can make much better use of them.

Finance (No. 2) Bill

Alison Thewliss Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Andrew Jones]

The right hon. Gentleman makes a good point, as he always does. I have considered that point, and I know that the Government have also considered it, but this is about striking a balance between encouraging the recovery and choking it off. Part of that recovery is ensuring that we have sound public finances. We have had two supposed once-in-a-century events in just over 10 years, and the lesson we should draw is that financial responsibility allows Governments to respond to crises at scale. That is what we have just seen here, and that has helped the finances of families across our nation when they needed it most.

That is also why the economic recovery, with its focus on growth and investment and on households and Government, cannot be put off. The personal allowance measure in the Bill should proceed. We should not listen to the Labour party because, quite frankly, its Members have voted against all the personal allowance increases in Budget measures over the past 10 years. We need to get the focus that we have had on saving lives back on to recovering livelihoods.

[Alison Thewliss (Glasgow Central) (SNP)]

I will speak to new clause 10. This UK Government said they would be led by data, not dates, and the Chancellor has stood in the Chamber on several occasions and said he will do whatever it takes to ensure recovery, yet in this Finance Bill he has seen fit to put an arbitrary date on ending the furlough scheme. The Labour shadow Chancellor has been critical of the Government’s previous dithering on extending the job retention scheme, so I hope her colleagues will support the SNP’s new clause, which will protect jobs and workers across the UK.

New clause 10 would introduce a reporting requirement to compare the effect of continuing the coronavirus job retention scheme and the self-employment income support scheme until both 30 September 2021 and 31 December 2021. Reports would be required on the specific impacts of continuing to both dates on business investment, employment, productivity, GDP growth, and poverty. SNP Members believe that the furlough and self-employment support schemes should be continued for as long as our economy requires them. It is economic recklessness to confidently predict the end of a pandemic that has thrown us curveballs time and again. Any winding down of support schemes should be linked to the numbers of covid cases in the population, with proper care taken to make sure that no badly hit areas are left behind.

We have seen the potential of new variants such as the Kent and South African variants, with the Indian variant causing the country to be added to the red list and prompting the Prime Minister to cancel his travel plans just this week. On the variants and support for people who need tests, I welcome the change to exempt coronavirus tests from income tax, but SNP amendment 93 would seek to extend the income tax exemption for payments to employees in respect of the cost of obtaining antigen coronavirus tests to cover specific antibody coronavirus tests, too. There is a wider argument for broadening the provision to future proof the Bill for future pandemics and other such incidents, so I hope Ministers will give the proposal some consideration.

Businesses have found themselves in a position of having to make payments on VAT deferred last year in the first week of the crisis while we are still in lockdown in the second peak of the crisis, and now the biggest lifeline supporting our economy is being pulled away without any due consideration for the impact on jobs.

Finance Bill

Alison Thewliss Excerpts

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

Thank you, Madam Deputy Speaker. I am sure the House will benefit from your strictures towards my speech, and I welcome the opportunity to make a short contribution on the amendments. As the hon. Member for Ealing North (James Murray) rightly says, the OECD-Biden proposals are an attempt to ensure a multinational, legal framework to ensure that multinational countries pay tax in the countries from which they derive that revenue. Unlike him, I think any sensible look at history will show that this Government have led the way on this since 2010. There can be no suggestion that they have not led the way on ensuring that multinationals should not be able to shift profits to avoid taxation. They have tried to lead the arguments on securing, over many years, a multinational, multilateral agreement on where revenues and profits are derived and how those are taxed. Across the House, we ought to recognise that the Government have been trying to achieve that and that they support it. It has been true since 2010. One of the former Chancellors, George Osborne, led the way on the matter.

The OECD proposals, as the hon. Gentleman put it, are in two pillars, as we all recognise. Pillar one rightly seeks to address the matter of base erosion, as the UK Government have done historically and continue to do. Pillar two, however—I think he failed to recognise this point—would go well beyond what is normally considered to be within the ability of national states, in terms of using the flexibility of fiscal policy to ensure that investment and incentives are properly rewarded within their economies, and may well have some perverse effects on a number of multinational industries, such as the insurance industry. Given your strictures, Madam Deputy Speaker, I shall not give my long peroration on that matter.

However, the key point is that there is a difference between what the Government have been trying to achieve—a multilateral, multinational agreement on the need for a combined approach, which I have no doubt that the Prime Minister and the Chancellor will wish to speak about at the G7—and a legal, minimum international tax rate. It is right that Governments still retain the ability to set fiscal measures according to their economic circumstances. Therefore, I wholeheartedly support—as the Government do—the international agreed approach to ensure that we tax multinational companies on where they derive their revenues and profits.

The problem with new clause 23 is that it talks about a review of the impact of the global minimum tax, but in reality, it is superfluous, because many of the consequences of setting a tax rate of 21% can easily and readily be calculated. The OECD discussions on the precise nature of the agreement are still under review. Therefore, speculating about how that might assess and impact on different economies could hinder the global efforts to achieve that aim.

Finally, as I am sure the Financial Secretary will wish to assure the House, the Government have already agreed that as, when and if there is a global agreement on minimum taxation, they will—when they are a party to that—ensure that the Office for Budget Responsibility assesses the impact for the UK economy and globally. So while this new clause is an interesting amusement for the House tonight, it is superfluous and I wholeheartedly encourage the Government not to accept it.

The hon. Gentleman spoke a bit about the need for investment and for addressing the historical UK underperformance in that area. We all agree with that. As we seek economic recovery post-pandemic and, in the longer term, as we build a cleaner, greener and stronger economy, clearly, the problem of underinvestment has to be addressed on a long-term, sustainable basis. However, it is clear that what the Chancellor has done, with what is popularly known as a super deduction, is likely to bring forward investment in the economy at just the time it is needed. There is an element of saying that, of course, we want to concentrate that on any number of small businesses that may not benefit from investment relief and this may or may not be at the margin, but it may or may not be at the margin that it has the greatest impact. I think the super deduction, which the Opposition seek to criticise, will do exactly that. They want the OBR to assess the impact in other areas of the Finance Bill, but the OBR has already made an assessment of this particular measure in the Bill, which is that it will derive at least 10% extra investment in the UK economy. At this stage of our economic recovery, that seems to me to be fundamentally important, so I hope that the Government will push ahead with the super deduction, as they are doing in this Finance Bill, and even consider it on a longer-term basis as well, because it is hugely important that we address the under-investment in both physical and human capital. Therefore, Government amendment 2 to clause 9, which will allow leased buildings to qualify for that super deduction, seems to be eminently sensible.

Given your stricture, Madam Deputy Speaker, although I could share with the House another 15 minutes of brilliance, I shall now sit down.

[Alison Thewliss (Glasgow Central) (SNP)]

I will also bear in mind what you have said, Madam Deputy Speaker, and keep my comments fairly brief.

I wish to start with the words of the US Treasury Secretary, Janet Yellen. She said:

“Competitiveness is about more than how US-headquartered companies fare against other companies in global merger and acquisition bids…It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”

That is something that this Government ought to be getting behind, as it makes absolute sense. It is exciting to see that the Biden plan for a global minimum corporation tax rate is gathering pace. It is reported that the G7 is close to a deal, perhaps paving the way for an OECD deal later on in the year. The action is described in the Financial Times as

“the largest shake-up in corporate taxation for a century.”

As the shadow Minister set out, the Government have been ducking questions on this and ducking responsibility. It feels to me at the moment that an agreement will take place in spite of the UK Government’s hesitancy—less global leadership, more like pulling teeth. Why would the UK Government be in favour of the types of profit shifting that this international co-operation is trying to stamp out? Why would they let our businesses be undercut? Why would they forgo valuable tax revenues?

Our new clause 12 is asking the UK Government to prepare a report on an OECD agreement, which seems very much like the direction of travel, as it would cover 135 countries and the largest corporations in the world. It is important that the UK Government fully understand the impact of such an agreement on each and every part of these islands: on business investment, employment productivity, GDP growth and poverty. The impact of not reaching a deal has been included in new clause 12, too, as it is important that we can fully understand the impact should the UK pursue some kind of crazy isolationist stance against this global growing consensus.

The SNP has great sympathy with new clause 22 and amendment 31. Those using tax havens and with a history of corporate tax avoidance should not seek to obtain benefit from schemes intended to support businesses that already pay their fair share. I ask Treasury Ministers what safeguards they intend to put in place if they do not accept these sensible and logical amendments.

I am glad that, in Government amendment 2, there is some recognition of the issues facing those who have background plant and machinery in leased properties, allowing them to qualify for the super deduction. I remain hugely frustrated that there is yet to be any wider support and any wider recognition of the many businesses both involved in leasing and those that lease machinery themselves. I seek assurances from Ministers that they will continue to hold the door open on this issue and to look at it, because there are so many companies that would benefit from the super deduction if it were not for the fact that they have always leased machinery. They contribute hugely to the productivity of this country and there should be some recognition of that within the Government’s proposals.

[Dame Margaret Hodge (Barking) (Lab) [V]]

I wish to speak to amendment 31, which stands in my name and in the names of hon. and right hon. Members from across the House. I shall try to keep my comments brief, too. I will go back to first principles and try to convince Ministers that what we propose is simply fair, just and practical.

Eighty-five per cent. of the British public pay their tax without question through the pay-as-you-earn system. For many of those hard-working taxpayers really struggling to keep their families going, particularly after the pandemic, it is simply unconscionable to watch the big corporations that have made so much money during the pandemic—the Googles and the Amazons—continue to create financial structures that have no other purpose than to help them avoid paying corporation tax. Shifting their profits simply to avoid tax is not only unfair but utterly immoral.

--- Later in debate ---

What is clear above all is that while that option is not a great outcome, it is much better than the existing outcome. We cannot keep this failed status quo. The Treasury and HMRC’s confused approach to the whole sector enabled the shameful loan charge scandal with thousands of people in financial ruin, families torn apart and seven people so trapped that they tragically ended their own lives. Failure to act on the mis-selling and illegitimate operation of umbrella schemes risks another scandal on a similar scale. That cannot be allowed to happen. We have a duty to act. Just as our key workers have protected us over the past year, it is time we started protecting them.

[Alison Thewliss [V]]

I rise to speak to new clauses 9, 10, 11, 13, 14, 15 and 16, which are in my name and those of my colleagues. It is certainly a very large grouping of amendments, and I will not speak to all of them, you will be glad to hear, Mr Deputy Speaker, but I will highlight a couple of them.

First, I want to speak about the very large amendments and new schedules concerning Northern Ireland and VAT. It concerns me greatly that we are looking at this huge new swathe within the Finance Bill that has not been considered at any other point in the Bill’s passage and that we have been given very limited time to delve into it at very short notice. That speaks to some of the complexity that Brexit has imposed on Northern Ireland. There needed to be a great deal more scrutiny of the measures prior to now, and the Government should not be bringing forward huge swathes of new schedules at this very late stage of the Bill.

I am very keen on new clauses 4, 5, 8 and 21, because Finance Bill scrutiny is limited after we have passed the Bill. We do not really think very much about the environmental impact, the equalities impact, the public health impact or the impact on poverty, and we do not think very much about the significant impact on the environment of the measures in the Bill. We do not do enough within Finance Bills to understand the full impact of the measures we have, and I would support a full range of other mechanisms to do so, which I will come back to on Third Reading.

I want to touch on the worthy amendments that those on the Labour Front Bench have tabled. The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) talked knowledgably about the issues around financial crime. Some of the evidence we heard in the Treasury Committee during our inquiry highlighted the fact that that is a hugely under-investigated and under-prosecuted crime. There is still very little progress by the Government in closing loopholes in Scottish limited partnerships or in other areas. As she pointed out, we had pre-legislative scrutiny of the draft Registration of Overseas Entities Bill in the Joint Committee with the Lords. Now the Bill has disappeared, but the problem has not. There are still huge numbers of people using the UK, within the property sector in particular, to launder dirty money. The Government are not acting on it. The longer it goes on without action, the more we have to ask who is benefiting if the Government are choosing not to act.

On our new clause 9, I was in a meeting earlier with representatives of Lloyds Banking Group where Philip Grant, one of its representatives, made an excellent point about the asymmetric economy that we are currently in. There are some who can restart their businesses and some who cannot yet get restarted. Some of those will not be restarted for quite some time yet to the point where they do not know if they will be able to break even. The economy has not restarted and opened up for everybody. Many sectors of the economy will not be back to normal for quite some time.

Our new clause 9 calls for a report on the extension of the self-employment income support scheme and the coronavirus job retention scheme until September and until the end of the year respectively. For those who are watching and are unfamiliar with Finance Bills, if they are wondering why we keep talking about reports and reviews, the rules of Finance Bills are such that we cannot just ask for the extension in a simple way. We are not allowed to do that—it is part of the restrictions that these Bills have—so we ask for reports. However, we do very much see merit in asking for action rather than just reports.

Some sectors have been able to modify and their staff are working as they were before the coronavirus pandemic, while some are working partly or entirely from home. Yet, as we all know, there are other sectors that are still waiting—culture, hospitality, conferences, events, weddings, tourism and travel. Employers who may already be carrying a significant burden of debt and arrears without having their cashflow back to normal still have to pay more of their employees’ wages, eventually tapering off to nothing at all coming from a Government contribution. Many businesses may decide that it is just too much of a cost and that they cannot continue to employ those people or cannot continue with their business. We know that the scheduled end of the schemes last year caused job losses. The Treasury must not make the same mistakes again, and at least carrying out such a report would help us to understand the consequences of the UK Government’s actions in this area.

We are not out of the woods yet with this pandemic, and it is vital that the UK Government take all the steps they can to strengthen support rather than pulling it. We in the SNP cannot forget, although the UK Government clearly have, about the millions of people excluded from support schemes altogether. It is unjustifiable that the year has come and gone with so many people left without a single penny piece in Government support, many in sectors that have not yet come back and may not for some time.

Further to this, we call again in our new clause 10 for a review of the extension of the 5% reduced rate for hospitality and tourism. This was a call that we made before the Chancellor announced it last year. The VAT rate for tourism has been too high for too long, and this year, when we are being strongly encouraged to holiday at home, it makes absolute sense to extend this provision, which many people have not had sufficient opportunity to benefit from. The provision would also cover events, including funfairs, which have had a very tough year, with many traditional fairs up and down the country being cancelled. Maintaining the VAT reduction could help to provide a much-needed stimulus to an events, tourism and hospitality sector that is crying out for such a boost. I am sure that if we had this power in the Scottish Parliament we would be using it, so I encourage the Minister to act or to devolve the power and let us get on with the job.

On our new clause 13 on stimulus, we agree with the principle of boosting it like Biden. One of the mistakes of the crash is that it was used to set us on a course of austerity. This has had a huge and devastating impact on all our constituents. We need to know from the UK Government what will be the impact of future austerity plans they might have compared with investment. While this Government have the levers in their hands, they should be clear about the impact that their action or inaction will have.

Our new clause 14 returns to some of the issues that we have with the technicalities of the plastic packaging tax. We are trying to be helpful to the UK Government in this regard. I genuinely hope, against previous experience, that they will at least listen to these concerns and make provisions that will maximise both the recyclate and the tax take. Not all plastics are equal, and the Government should recognise that in the provisions they put forward. Some lend themselves more to being recycled and can be brought to 100% reusable content, and some are very far away from that. We should not treat them all the same.

On our new clause 16, we have been concerned for some time about problem gambling, and my hon. Friend the Member for Inverclyde (Ronnie Cowan) has campaigned doggedly on the issue, along with the all-party parliamentary group for gambling related harm. It would therefore be useful to understand the impact of clause 104 on the volume of gambling and whether further fiscal measures are required to tackle the harm that is done to people.

I would like to touch on some of the amendments tabled by the right hon. Member for Haltemprice and Howden (Mr Davis) on the loan charge and related issues. The loan charge continues to be a running sore for many, and I ask the UK Government to consider the merits of the amendments and what more can be done to support people. Stopping the malpractice of umbrella companies would be another step forward in closing loopholes and protecting those who may be tempted to sign up to, or coerced into signing up to, such schemes in the future. Those promoting such schemes always seem to be a step ahead, and the Government should not let them get further steps ahead and become a dot on the horizon.

There are many amendments in the group that I would like to speak to, and many have significant merit and should be considered by the Government. The flaws in this process mean that many of them will not even be considered or voted on tonight, but I urge the Government to take up those that they can.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I rise to support the amendments standing in the names of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), myself and my colleagues.

Let me start by making it very clear, as my right hon. Friend—wherever he is—did so well earlier, that we have a problem here, and I am surprised that the Government do not really want to recognise it and are avoiding it. The unacceptable practices of umbrella companies have now become very clear. Contractors are being forced into schemes and are being forced by recruitment agencies to use umbrella companies, which they may not wish to do and may be concerned about. Opting out of the conduct of employment regulations is often mandatory, which removes the rights contractors had as agency workers. We are seeing kickbacks, problems over holiday pay and the skimming of the assignment rate. We are also seeing mini umbrella companies, which some contractors sign up to, believing them to be compliant, only to then discover that they are employed by a company with a different name and owned by a director in, say, the Philippines—my right hon. Friend mentioned “File on 4”, which has raised this issue.

The problem is that the worse the level of malpractice, the greater the rewards and kickbacks for the agencies, reducing the revenue for the Treasury. I have huge respect for my right hon. Friend the Financial Secretary, who is on the Treasury Bench and who will respond to all of this, and I am sure he and his colleagues in the Treasury are alert to this issue and understand that it is a major problem, but I cannot quite understand why we are not using this Finance Bill to start putting some of this right.

--- Later in debate ---

[Alison Thewliss]

I want to begin, as others have done, with a few thank yous. I thank the Minister for so politely rejecting all our amendments. I thank those on the Opposition Benches for the good spirit in which they conducted themselves during the Bill. I thank our research team in Westminster—Scott Taylor and Jonathan Kiehlmann—and Mhairi Love in my office. I thank my hon. Friends the Members for Glenrothes (Peter Grant) and for Gordon (Richard Thomson), and I thank the Clerks of the Committee, Chris Stanton and Joanna Dodd, for their patience. I want to pay particular thanks to George Crozier, the head of external relations for the Chartered Institute of Taxation, the Association of Taxation Technicians and the Low Incomes Tax Reform Group, for being a continual source of support and advice, and for his patience in explaining many of the tax measures to those of us who are not as well versed in the tax system as he is.

This Bill fell short in a number of ways. The Government are always keen to talk about the power of the Union, but it is the power of the Union not to extend support schemes, not to cover the excluded, not to keep the universal credit uplift going, not to extend the VAT reduction to hospitality and tourism, not to provide the support and stimulus that this country so dearly needs, rather than further austerity coming down the road, and not to tackle the scourge of dirty money in our country—the ongoing scandal of tax avoidance and evasion. Instead, we would like to see more of Scotland’s priorities delivered by a Parliament closer to home—priorities to build a sustainable green recovery, to provide a much needed stimulus and to give us the full range of levers over our economy so that we can make a real difference to the lives of the people we are proud to have working and living in Scotland, wherever in the world they have come from. All of these things require Scotland to have the full power of independence, which is why I hope it will not be too much longer before we have all those controls in the Parliament in Scotland.

Question put, That the Bill be now read the Third time.