Financial Services Bill

Alison Thewliss Excerpts

Monday 26th April 2021 Commons Chamber

[Alun Cairns (Vale of Glamorgan) (Con)]

Thank you, Mr Deputy Speaker, for calling me to contribute to this debate on the amendments made in the other place. There is no doubt that the Bill represents a major step in our post-Brexit world, enabling us to take responsibility for our own financial services regulation. This is an area of the economy that is important to us all for several reasons, including the revenue the sector raises for public services, the jobs it creates and the impact it has on our financial stability and global presence. My right hon. Friend the Chancellor and my hon. Friend the Economic Secretary have rightly set ambitious targets and objectives to develop the sector for the United Kingdom.

We all know the impact the big bang had in the 1980s, elevating the UK to a leading global position in this field, but it is fair to say also that some challenges stem from such radical change, and that is why I am pleased that, at the heart of the Bill, is recognition of the need to enhance our prudential standards and commitments to maintain the highest regulatory standards. Lords amendments 16 to 19 are welcome in that they extend the reach of the Prudential Regulation Authority and the Financial Conduct Authority to take account of our climate change commitments. That shows how serious the Government are about contributing to our regulatory standards and expectations and enhancing our reputation globally in our attitude to both climate change and strong financial regulation. Lords amendment 7 and the string of amendments relating to the Proceeds of Crime Act 2002 are also welcome, updating legislation to ensure that it remains fit for purpose in the fight against market abuse and the fight against crime, and recognising the status of legislative consent, specifically in relation to Northern Ireland.

In the limited time available, I will focus on Lords amendment 8, which relates to people who are trapped with their current inactive mortgage providers—mortgage prisoners. We need to recognise the seriousness of the issue and the circumstances in which people find themselves. I, like many Members across the House, have constituents paying higher interest rates on their mortgages than would otherwise be necessary. Although I am optimistic about the economy, it is fair to say that there remains much uncertainty, and developing solutions for people in this situation, who could save thousands of pounds, deserves full and proper consideration.

It has been suggested that there are 250,000 people in this situation, although others challenge that by highlighting that many can already switch providers—that is absolutely true—and others are restricted because of arrears and myriad complex reasons. Whatever the data says, the reality is that an individual paying over the odds inevitably wants to gain a better deal or the best deal possible, and we, as Members of Parliament, have an obligation to give support in a range of ways. However, in doing so, we must also recognise the hardship and complexity of individual cases.

In spite of recognising that solutions need to be developed and worked through and recognising the positive motives of those who tabled Lords amendment 8, I do not think it would achieve what many believe or claim it would. It is simplistic in its drafting and it would be merely a short-term fix. I want to see long-term solutions to the challenges for these individuals and families. Even consumer commentators and London School of Economics research recognises that it would be only a short-term stopgap, not the longer-term answer we would like to see. Intervention in the market for some people would create issues and set precedents that may not have been fully thought through. Ultimately, we need to be working to gain market solutions that will be the long-term answer that people deserve. I welcome the comments made by the Minister in his introductory remarks from the Dispatch Box. He absolutely recognises the challenges that people face. The commitment to work with the Financial Conduct Authority is excellent news that offers the potential of a long-term solution. However, an effective market solution would not be the one-size-fits-all-approach that the amendment suggests.

We must also recognise the complexity that the Minister and the Financial Conduct Authority will have to deal with because of the unique circumstances in which each and every individual finds themselves. The reality is that answering those serious issues, with far-reaching effects on the families tied in such circumstances, requires a number of solutions that genuinely reflect the complexity of those individuals’ circumstances. The amendment has been presented as a simple answer, but, as I said, it requires much more work and study. I am grateful that the Minister responded to the calls from across the House that clearly build on the work he has been pursuing up to this stage. I ask the Minister to continue to respond to those Members supporting the amendment by asking them to recognise the complexity of the situation.

Although I am challenging the Minister—in, I hope, a positive way—I want to recognise the changes that he has introduced so far. The changes to mortgage affordability assessments have had a significant impact. They have made a major change, and there is the prospect of supporting a group of people with a more effective market-based answer than that offered by the amendment. That is the type of solution that we need as a long-term answer. I want to act to support mortgage prisoners, but I do not think that the amendment achieves that. There are many people in very many different circumstances, and I do not think that it recognises all the circumstances that exist. It will not deliver what many people believe it will achieve. There are myriad complex situations.

I would also say that it will take time for the amendment to become effective, even if it was passed today. I say to the Minister that we can use this time to come up with alternative long-term solutions. I had not expected the Minister’s response at the Dispatch Box, which commits to doubling his efforts with the Financial Conduct Authority and even setting a specific timescale. That recognises the urgency of this while managing expectations of the challenges and work that they are committed to doing. We are using the time, as I was planning to call for it to be used, to come up with long-term answers rather than the short-term fix that Lords amendment 8 claims to provide.

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

I very much support Lords amendment 1 on the duty of care. As the Minister will recall, we have raised this during the previous stages of the Bill, in Committee and on the Floor of the House. We think that a financial services duty of care has never been more needed than it is just now, given the difficulties that people have had in the past year with the impact of coronavirus and long covid. The Minister’s proposals are really for consultation, to kick the can down the road until August 2022, giving our constituents quite some time before they can get the duty of care that I think we would all agree they deserve.

In particular, the amendment would help those suffering not just from the effects of covid but from cancer, which is why it is supported by Macmillan Cancer Support. Four out of five people with cancer are affected financially, being on average £570 a month worse off as a result of their diagnosis. Without support to manage this financial impact, money worries can spiral out of control. Macmillan estimates that more than a third of people with cancer, 39%, are severely financially impacted by their diagnosis and of those almost one in three had to take a loan or go into credit card debt. Macmillan’s clear ambition is that every person affected by cancer can rely on their financial services provider to give the support they need to cope with the financial impact of a diagnosis.

At the moment, there is a clear gap in the service. Only 11% of people tell their bank about a diagnosis. Why is that? Is it because they do not think that they will get a fair hearing? Is it because they do not want to admit something like that to their bank because they fear some sort of negative consequence? That tells me that the rules as they stand are not working. It is a patchwork. Someone might have the good luck to have a financial services provider who is understanding, but that is not good guidance and it does not help everybody.

People support there being a duty of care. Research by the Financial Services Consumer Panel found that 92% of consumers, 99% of sole traders and 97% of small and micro businesses believe it is important that there is a duty of care in financial services. Health issues could have an impact on them, because they would affect their business and its viability going forward. The duty of care is also supported by Age UK, the Alzheimer’s Society, Fair by Design, the Money and Pensions Service, StepChange Debt Charity, Surviving Economic Abuse and The Money Charity. They believe in it because a duty of care can lead to the necessary change in culture and practice. Customers should be easily able to access forbearance from their provider, including flexibility on mortgage payments and interest freezes on credit cards or loans, without it damaging their credit files. If we put that in place, it would prevent long-term harm and financial exclusion.

There should be a clearer path to compensation when things go wrong because a provider has failed in its duty of care. That leads to a standard that people can expect and we can hold to account people who do not meet that standard. It would make a real difference were the Government to take this on, and it is hugely disappointing that they do not wish to do so today. I suppose there is still hope that the Government could change their mind right now and do this, but kicking the can around until 2022, when perhaps something will happen, does not help people here and now. I urge the Government to consider that and see whether there is any way they can bring it forward more quickly. Lots of the evidence on this issue already exists so we do not need to go into further consultation to prove the evidence that is clearly there.



In other areas the evidence is slightly more contentious and disputed, such as Lords amendment 8 on mortgage prisoners. The number of people affected seems to be part of the contention. The Minister said that he follows the facts and the evidence, but in reality he is disregarding some of the facts and evidence that do not suit his position. As the right hon. Member for Wolverhampton South East (Mr McFadden) said, the evidence is disputed. Although there may be up to 250,000 people stuck on that standard variable rate, many of them have also paid considerably over the odds in their mortgage payments.

There is also a degree of geographical impact. As a result of the location of Northern Rock, 14% of those affected are in the north-east, 16% in the north-west, 12% in Yorkshire and Humberside, and 11% in Scotland. That bears consideration, because this issue has a disproportionate impact on a large and significant group of people and their families, particularly in the context of covid and the challenges that many will be facing, which have deepened this year. It is incumbent on the Government to bring forward some kind of solution.

Finance (No.2) Bill (First sitting)

Alison Thewliss Excerpts

Thursday 22nd April 2021 Public Bill Committees

[The Chair]

[Alison Thewliss (Glasgow Central) (SNP)]

[The Chair]

[Alison Thewliss]

[The Financial Secretary to the Treasury (Jesse Norman)]

[Alison Thewliss]

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

--- Later in debate ---

[Jesse Norman]

[Alison Thewliss]

[James Murray]

--- Later in debate ---

[Jesse Norman]

[Alison Thewliss]

[The Chair]

[Alison Thewliss]

[James Murray]

[Jesse Norman]

[Alison Thewliss]

[Kemi Badenoch]

--- Later in debate ---

[Jesse Norman]

[Alison Thewliss]

[James Murray]

--- Later in debate ---

[James Murray]

[Alison Thewliss]

[Jesse Norman]

Finance (No.2) Bill (First sitting)

Alison Thewliss Excerpts

Thursday 22nd April 2021 Public Bill Committees

[The Chair]

Copies of written evidence that the Committee receives will be available on the Bill pages of the parliamentary website.

We will now begin our line-by-line consideration of the Bill. The selection and grouping list for today’s sittings is available in the room. The list shows how the selected amendments have been grouped for debate, and the order of debates. Decisions on each amendment are taken when we come to the clause or schedule to which the amendment relates.

Clause 15

Extension of temporary increase in annual investment allowance

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move amendment 15, in clause 15, page 9, line 16, at end insert—

“(3) In paragraph 2(3) of Schedule 13 of that Act—

(a) after ‘second straddling period is’ insert ‘the greater of (a)’ and

(b) after ‘of that sub-paragraph’ add ‘and (b) the amount (if any) by which the maximum allowance under section 51A of CAA 2001 had there been no temporary increase in the allowance exceeds the annual investment allowance qualifying expenditure incurred before 1 January 2022.’”

This amendment would amend the transitional provisions for the reversion of the AIA to £200,000 on 1 January 2022, to ensure that smaller businesses with lower levels of qualifying capital expenditure are not disadvantaged by having their effective AIA limit restricted to significantly less than £200,000 for a period.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Alison Thewliss]

It is a pleasure to see you in the Chair, Sir Gary. This is a small technical amendment, on which we have received a representation from the Association of Taxation Technicians. Clause 15 extends the availability of the temporarily increased level of the annual investment allowance for a further year, to 31 December 2021. Although we appreciate that the maintenance of a high AIA will be broadly welcomed by eligible businesses, the wider picture has been, as I said on Second Reading, that the chopping and changing of AIA levels is unhelpful, as it adds complexity to the system and creates traps that can disadvantage some businesses.

Specifically, the transitional rules that apply when the AIA level reverts to £200,000 on 1 January 2022 could result in businesses having their effective AIA limit restricted to significantly less than £200,000 for a period. The businesses most likely to be hit by that are the businesses least likely to be able to benefit from the temporary increase in the AIA limit. There is an opportunity to amend the transitional provisions in order to ensure that smaller businesses with lower levels of qualifying capital expenditure are not actually disadvantaged by a temporary increase from which they will not benefit at all. I hope that the Minister will consider this amendment.

[The Financial Secretary to the Treasury (Jesse Norman)]

What a pleasure it is to serve under your chairmanship, Sir Gary. I look forward to many happy hours of digestion and deliberation on the Finance Bill in Public Bill Committee.

Clause 15 temporarily extends, as the hon. Member for Glasgow Central mentioned, the increased annual investment allowance of £1 million until 31 December 2021. If I may, I will give some background and then address the amendment.

The annual investment allowance, or AIA, provides businesses with an up-front incentive to invest. It allows them 100% same-year tax relief on qualifying plant and machinery investments, up to an annual limit, and simplifies tax for many taxpayers. The summer Budget of 2015 set the permanent level of AIA at £200,000 from 1 January 2016. At Budget 2018, the level was temporarily increased to £1 million for two years, from 1 January 2019. The measure that will be enacted by this clause was announced in November 2020. The changes made by clause 15 will apply across the UK. The £1 million AIA cap covers the plant and machinery expenditures of more than 99% of all businesses.

There were a forecasted 24.9 million AIA claims in 2019-20, compared with 18 million when the cap was last at its £200,000 limit. The higher AIA cap provides businesses with more up-front support, encourages them to bring forward investment and makes tax simpler for any business investing between £200,000 and £1 million. Extending the AIA cap to £1 million supports business confidence at a time when covid-related economic shocks have severely dampened business investment. It is interesting that Chris Sanger, head of tax policy at EY, said that this measure

“will be particularly helpful for UK manufacturing at a time when, thanks to the announcement of a vaccine, business confidence is returning.”

Amendment 15, tabled by Opposition Members, seeks to change long-standing arrangements that manage the transition from one level of AIA to another. It is important to note that the current arrangements have been used by the Finance Acts of 2011, 2014 and 2019. They are familiar and well understood, and any change would create additional cost for businesses.

The change proposed would also give a benefit to a small subset of firms that have a chargeable period that straddles the date at which the AIA reduces to £200,000. However, those firms also received a benefit at the point of transition to the new £1 million level of the AIA, and therefore the amendment would not, in our judgment, be fair. It also risks encouraging some businesses to delay investment, which many would not think is in the public interest at present. I therefore urge the Committee to reject the amendment.

Overall, the clause and the measure it will constitute were warmly received by businesses at the end of last year as part of the Government’s desire to support business during the pandemic.

--- Later in debate ---

[Alison Thewliss]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16

Meaning of “general decommissioning expenditure”

Question proposed, That the clause stand part of the Bill.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

It is a pleasure to serve under your chairmanship, Sir Gary. The clause makes changes to ensure that decommissioning expenditure incurred by oil and gas companies in anticipation of the approval of an abandonment programme, a condition imposed by the Secretary of State or an agreement made with the Secretary of State qualifies for decommissioning tax relief.

Companies operating oilfields in the UK and the UK continental shelf have always been required to decommission the wells and infrastructure at the end of a field’s life. The tax relief for decommissioning expenditure is an important part of the UK’s overall oil and gas fiscal regime, which is balanced to maximise economic recovery of the nation’s national resources while ensuring that the nation receives a fair return for those natural resources. The changes made by the clause will clarify that appropriate expenditure on decommissioning incurred in anticipation of the approval of an abandonment programme, a condition imposed by the Secretary of State or an agreement made with the Secretary of State qualifies for decommissioning tax relief.

The clause does not have any Exchequer costs and does not alter the original policy intent of decommissioning tax relief. It will provide certainty for the UK oil and gas sector, which supports approximately 260,000 jobs, around 40% of which are in Scotland, and which has paid approximately £350 billion in production taxes to date. The clause will provide certainty that all appropriate decommissioning expenditure qualifies for decommissioning tax relief.

--- Later in debate ---

[Jesse Norman]

I thank the hon. Member for Ealing North for his remarks in support of the previous clause. Clause 18 and schedule 2 make changes to the loss relief rules for businesses by extending the loss carry-back rule from one year to three years for corporation tax and income tax. The change will provide previously profitable businesses that have been forced into loss with extra flexibility to carry back up to £2 million of losses against historical profits and achieve an additional tax refund to help them to continue trading through this difficult period. I note that the measure has been welcomed by both the Institute for Fiscal Studies and the Chartered Institute of Taxation.

In the 2021 Budget, the Government announced that they would increase the flexibility of the UK’s loss regime in order to provide additional cash-flow support to businesses. Currently, a business that incurs a trading loss over the course of its accounting period is able to carry that loss back to be relieved against taxable profits in the previous year. There is no limit on the value of losses that may be carried back to reduce last year’s profit. That is in addition to businesses’ ability to use losses to offset in-year profit or to carry forward against future years’ profit. We are temporarily extending that one-year loss carry-back rule to three years to support business cash flow, giving businesses greater flexibility to monetise their losses sooner, rather than carrying them forward to offset against profit in future years.

The changes made by clause 18 and schedule 2 will extend the loss carry-back facility from one year to three years. Unincorporated businesses will be able to carry back up to £2 million in trading losses incurred in each of the tax years 2020-21 and 2021-22. Incorporated businesses can carry up to the same amount of losses incurred in accounting periods ending in each of the financial years 2020 and 2021. HMRC expects around 130,000 companies to be in a position to take advantage of the policy and to receive additional relief for their trading losses. It is also expected that over 99% of claimant businesses will be unaffected by the overall cap.

The clause and the schedule also include provisions to ensure that the cap is applied proportionately across businesses and groups. Groups will need to allocate the £2 million cap across their companies, but in order to maintain the simplicity for smaller businesses, companies intending to carry back less than £200,000 of losses will not be subject to this requirement, and nor will unincorporated businesses.

Amendment 2 seeks to amend section 127(3A) of the Income Tax Act 2007 to allow for the extended carry-back rule to apply to losses incurred in UK furnished holiday letting businesses. However, the relief granted in the Bill is an extension of relief for businesses that already qualify for loss carry-back relief. There is no intention to make loss carry-back relief in its current or extended form available to other businesses.

I recognise that there is currently an incorrect reference to UK furnished holiday lettings businesses in the Bill as introduced in the House. That was included because UK furnished holiday lettings businesses are treated as trades for the purpose of part 4 of the 2007 Act, which relates to loss relief. However, as those businesses are not entitled to make the necessary claim for the existing loss carry-back relief, they cannot claim the extended relief. I have therefore tabled amendment 16 to remove that reference, and thus make the Government’s intention clear. I therefore urge the hon. Member for Glasgow Central not to put amendment 2 to a vote.

New clause 10 would require the Government to review the impact of clause 18 on levels of tax avoidance, tax evasion and tax revenues. The Government publish information every year on the tax gap, including that part of it relating to tax avoidance and evasion. That kind of information is already in the public domain. The tax information and impact note for the measure before the Committee already indicates its expected effect on tax yields. I therefore do not believe that a review is necessary, and urge Members to reject the new clause.

The policy overall will support businesses by providing accelerated relief for losses in the form of a cash refund of tax paid when times were good, to help them to continue trading through this difficult period.

[Alison Thewliss]

Amendment 2 has the opposite aim, I suppose, to Government amendment 16. We proposed to update the Income Tax Act 2007 so that the extended loss carry-back rules in the Bill, in relation to furnished holiday lettings businesses, would have effect, whereas the Government clearly intend that the measure will no longer apply to those businesses.

In tabling our amendment we assumed that the Government had drafted their measure incorrectly and had accidentally excluded the people in question, but clearly we were wrong. They have not excluded them as much as they had hoped to, and are coming back to double down on that exclusion by means of amendment 16. Our technical amendment would help the sector, and we are keen for the Government to take it on board.

The Low Incomes Tax Reform Group has also raised the wider implications of clause 18 and the potential for unintended consequences and pitfalls resulting from the interaction between any tax refund and universal credit. Has the Minister given that any consideration? The group feels that there has been a significant increase in claims for universal credit during the pandemic—it is clearly evidenced—including from self-employed individuals and limited company directors who may never have needed to claim such support before the pandemic.

Under the universal credit legislation, self-employed income for a universal credit monthly assessment period is calculated by taking actual receipts in the assessment period and deducting any amounts allowed as expenses, tax, national insurance and any relievable pension contributions in that period. The group points out that receipts specifically include any refund or repayment of income tax, VAT or national insurance contributions related to a trade, profession or vocation, so any tax refund made as a result of the provision may therefore fall to be treated as income for universal credit purposes in the assessment period in which it is received, which in most cases will lead to a reduction of universal credit of 63p for every £1 of refund. In addition, further to that, if the refund is large enough, it might trigger the surplus earnings rules, meaning that any excess income in one assessment period can be carried forward and treated as income in the next assessment period, up to a maximum of six months.

It would be helpful if the Minister said whether the Government are aware of the issue and what plans they have to raise new universal credit claimants’ awareness of it, so that they can understand that if they receive the refund while they are in receipt of universal credit, they will need to report it as income for universal credit purposes. They will have to understand the implications fully.

This is an unintended issue arising from the pandemic. People who have never claimed universal credit before, who may have recourse to the provisions that the Government are making, will not understand how the two things interact. They might not have access to appropriate financial advice, and I would not want the Treasury or HMRC to be doing something on one hand that the Department for Work and Pensions did not understand on the other. What discussions has the Minister had with DWP Ministers, and what information does he intend to give out to people? As the Low Incomes Tax Reform Group points out, there could be implications that have not been considered.

[James Murray]

We note that clause 18 and schedule 2 provide a temporary extension to the carry-back trading losses provisions from one year to three years, for losses of up to £2 million for a 12-month period, both for companies and for unincorporated businesses. Those extensions to trade loss carry-back rules for both corporation and income tax have been introduced in response to covid-19 to help businesses that have suffered economic harm as a result of the restrictions placed on them.

We understand that the intention is to provide cash-flow benefit to affected businesses by providing additional relief for trading losses. As we have heard, the Chartered Institute of Taxation has said that it welcomes this measure for giving a cash injection to businesses with a track record of making profits and paying tax, but which have suffered during the pandemic. The Chartered Institute of Taxation points out that, in many cases, this measure will represent a cash-flow, rather than an absolute, cost to Government. The cost will reverse as the business, having used up its losses by carrying them back, makes profits and pays taxes sooner in the future.

Although we recognise the broad support for the measure from the Chartered Institute of Taxation and the wider importance of helping businesses with cash flow when they have suffered as a result of covid restrictions, we have tabled new clause 10, which relates to tax avoidance and evasion. We do not doubt that most businesses benefiting from the measure will do so legitimately. Given the importance of making sure public money is spent effectively and as intended, however, we believe the Government should identify any risk and take action to mitigate those risks as necessary.

Furthermore, we would also like to raise the issue identified by the Chartered Institute of Taxation’s Low Incomes Tax Reform Group—namely, the potential interaction of any tax refund with universal credit, as set out by the hon. Member for Glasgow Central. I would therefore like to reiterate her call to the Minister to ask whether he is aware of this issue. If so, what plans do the Government have to raise awareness of this issue with universal credit claimants to make sure they understand that, if the refund is received when they are in receipt of universal credit, they will need report this income for UC purposes?

--- Later in debate ---

[Jesse Norman]

I thank the hon. Gentleman for his question and for his support for this important legislation. Although not related to this clause, I thank him for the support the Labour party has given on the issue of the loan charge. These are important ways to curb forms of abuse of the rules that may mean people do not pay appropriate levels of tax, so I am grateful for that support.

On the last point that the hon. Gentleman raised, I am afraid that it was an unfortunate and slightly misinformed debate in Committee of the whole House, in part because there was a suggestion that somehow clause 21 benefited only umbrella companies and should be struck out, and that the effect of striking it out would somehow mean that workers would receive agency rights by working through agencies’ payrolls. In fact, that is not correct. Clause 21 has no bearing on workers receiving rights, and it also ensures that the rules apply correctly to agencies, and indeed to a wider group, such as employees on secondment. The effect of the amendment proposed in Committee of the whole House would have been to gut the legislation, which is why the Government opposed it.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clause 22

Payments on termination of employment

[Alison Thewliss]

I beg to move amendment 1, in clause 22, page 17, line 17, after “then” and before “ – ” insert

“where it is to the benefit of the employee the following calculation may be used”.

This amendment would ensure that, in new subsection 402D(6A) ITEPA03 to be inserted by FB clause 22(7), the method of calculating post-employment notice pay (PENP) for certain employees paid by equal monthly instalments whose post-employment notice period is not a whole number of months continues to be an alternative method that can be used if it benefits the employee, rather than being compulsory.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Alison Thewliss]

This technical amendment would ensure that, in new subsection 402D(6A) of the Income Tax (Earnings and Pensions) Act 2003, which is to be inserted by clause 22(7), the method of calculating post-employment notice pay for certain employees paid by equal monthly instalments whose post-employment notice period is not a whole number of months continues to be an alternative method that can be used if it benefits the employee, rather than being compulsory.

In common with the Institute of Chartered Accountants in England and Wales, we feel that the provisions do not match the intended policy. The institute has recommended that clause 22(7)(c), which inserts new subsection 402D(6A) into the Income Tax (Earnings and Pensions) Act 2003—I will be sending my notes to the Hansard people, given all the figures and facts—needs to make it clear that the method set out for calculating post-employment notice pay is an alternative that can be used, rather than something that must be used. That would make the legislation on termination payments align with the policy intent stated in the Bill’s explanatory notes, the “Notes on the Finance Bill resolutions 2021”, and HMRC’s existing guidance.

Clause 22 amends the income treatment of termination payments. As explained in paragraph 11 of the explanatory notes, clause 22(7)(c) provides for the new subsection to be inserted into the Income Tax (Earnings and Pensions) Act 2003. The clause will apply to individuals who have their employment terminated and receive a termination payment on or after 6 April 2021. We understand that the Institute of Chartered Accountants in England and Wales has identified some technical difficulties with the proposals. It believes that the intention of legislating this point is to put into law the ability to choose to adopt the alternative method, which is in line with HMRC’s policy of enacting extra statutory concessions and other easements following the Wilkinson case. If enacted, however, the Finance Bill will make it compulsory, so we recommend our amendment, and we ask the Government to give greater consideration to it. It is a very technical and detailed amendment, as I have said already, but I urge the Minister, if he cannot accept it today, to bring it back at a later stage.

[James Murray]

As we know, clause 22 focuses on post-employment notice pay, which is the part of a termination payment that is treated as being a payment in respect of the employee’s notice period, and that is subject to income tax and to employees’ and employers’ national insurance contributions. The clause amends the income tax treatment of termination payments in two ways. First, it provides a new calculation for the post-employment notice pay for employees who are paid by equal monthly instalments and whose post-employment notice period is not a whole number of months. That will help avoid excessive tax charges, and we support it.

Secondly, the clause aligns the tax treatment of post-employment notice pay for individuals who are non-resident in the year of termination of their UK employment with the treatment for all UK residents. Currently, post-employment notice pay is not chargeable to UK tax if an employee is non-resident for the tax year in which their employment terminates. This measure will ensure that non-residents are charged tax and national insurance contributions on post-employment notice pay to the extent that they have worked in the UK during their notice period. The change affects only individuals who physically performed the duties of their employment in the UK. That non-residents should make tax contributions on post-employment notice pay for the time that they worked in the UK during their notice period is a fair change, so we support the measure.

[Jesse Norman]

I thank the hon. Members for Glasgow Central and for Ealing North. I do not think that we need to spend too long on this. Clause 22 makes changes to the taxation of termination payments. It was published in draft and announced in a ministerial statement in July 2020. The measure has been set out in the explanatory notes and in Opposition speeches, and I will not spend too much time on them now.

The clause alters the calculation used to define the amount of a termination payment that should be taxed as post-employment notice pay. This is when an unworked notice period is not in whole months but an individual is paid monthly. Secondly, as hon. Members mentioned, the clause brings post-employment notice pay paid to non-UK residents within the charge to UK tax. I am grateful for the support of the Labour Opposition on that.

In terms of the amendment, I am not surprised that the hon. Member for Glasgow Central slightly stuttered over what is a formidably technical matter, but I think we can digest the point very simply. There is currently no single way of calculating the payments. Amendment 1 seeks to make the calculation alternative rather than mandatory for the purposes of post-employment notice pay. I remind her and the Committee that the new calculation is more accurate for employees paid by equal monthly instalments, and that it is more straightforward for employers to administer a single mandatory calculation rather than having to choose between two alternative calculations. It is therefore just a better and more effective way of discharging the policy intent, and I urge her not to put the amendment to a vote.

[Alison Thewliss]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill.

Clause 23

Cash equivalent benefit of a zero-emissions van

Question proposed, That the clause stand part of the Bill.

[Kemi Badenoch]

Clause 23 makes changes to reduce the van benefit charge—the VBC—to zero for employees who are provided with a company van that produces zero carbon emissions. The van benefit charge applies where an employee is provided with a company van by their employer that they use privately, other than for ordinary home-to-work commuting.

At Budget 2014, the Government announced that the van benefit charge for zero-emission vans would be a percentage of the flat-rate van benefit charge for conventionally fuelled vehicles until April 2020. Those changes were legislated for in the Finance Act 2015. At Budget 2015, the Government announced that the planned increases to the percentages for 2016-17 and 2017-18 would be deferred to 2018-19, and the percentages would increase by 20% for each subsequent tax year, rising to 100% in 2021-22. Those changes were legislated for in the Finance Act 2016.

The changes made by clause 23 will reduce the van benefit charge to zero from 6 April 2021 for all company vans that emit zero carbon emissions, giving those vehicles preferential tax treatment over conventionally fuelled vehicles. The Government announced the measure at Budget 2020 to incentivise the uptake of zero-emission vans and to help the UK to meet its legally binding climate change targets.

Transport is now the largest sector for domestic UK greenhouse gas emissions, and a significant proportion of that is accounted for by road transport. Moreover, vans tend to do more mileage and are more polluting than cars. By reducing the level of the tax charge that would otherwise be applicable, the change outlined in the clause will incentivise the uptake of zero-emission vans and support the Government’s environmental commitments.

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[Jesse Norman]

The clause makes changes to ensure that employees who receive certain long-term salary sacrifice benefits do not lose entitlement to a tax advantage if they begin to receive statutory parental bereavement pay.

The optional remuneration arrangement legislation introduced on 6 April 2017 largely removed the income tax and national insurance contributions advantages for most employment-related benefits provided through salary sacrifice schemes. Transitional rules for relevant long-term benefits allow the benefit valuation rules prior to the optional remuneration arrangement legislation to apply until 5 April 2021, provided that there is no variation in an employee’s employment contract. The relevant long-term benefits are employer-provided living accommodation, relevant school fees arrangements and certain employer-provided vehicles. Statutory payments are normally treated as a variation in contract, but those were specifically listed and disregarded in the 2017 optional remuneration arrangement legislation.

On 6 April 2020, a new statutory payment, statutory parental bereavement pay, was introduced under the Parental Bereavement (Leave and Pay) Act 2018. The payment is payable to employed parents or partners of a parent who loses a child, whether biological, adoptive or born to a surrogate, under the age of 18, or who suffers a stillbirth from 24 weeks. This statutory payment is not listed in the 2017 optional remuneration arrangement legislation as one that may be disregarded as a variation in contract, as it did not exist at the time.

Where an employee is in receipt of statutory parental bereavement pay, therefore, and one or more of the relevant long-term benefits through a salary sacrifice arrangement, the variation to employment conditions under the optional remuneration arrangement legislation meant that they would lose entitlement to the income tax and national insurance contribution advantages of receiving the benefit in that manner.

The clause therefore includes statutory parental bereavement pay as a statutory payment that will be disregarded under the 2017 optional remuneration arrangement legislation. The clause will disregard statutory parental bereavement pay as a variation in contract under the optional remuneration arrangement legislation, ensuring that employees in receipt of one of the long-term benefits and statutory parental bereavement pay will be subject to the original remuneration arrangement rules, which continue to provide a tax advantage until 5 April 2021.

New clause 2 would require the Government to publish a report on the impact of clause 27. The Treasury carefully considers the impact of individual measures announced at fiscal events. This clause legislates for a temporary retrospective measure to protect a small number of individuals who receive a transitional benefit under the optional remuneration arrangements and statutory parental bereavement pay from losing their tax advantage in 2020-21. The legislation ceased to apply from 6 April 2021, so the clause will have no further impact. I therefore urge the hon. Member for Glasgow Central not to press the new clause to a vote.

[Alison Thewliss]

We of course welcome all moves to support parents through the difficult time of bereavement. Our new clause would require the Secretary of State to publish reports on the uptake of statutory bereavement pay. It is important that we encourage people to take it up and that we let people know it is available to them. If the Government are not monitoring that, it is difficult to tell how effective the policy is.

Bereaved parents must be given the space and the time to grieve at a time of unimaginable tragedy. A lot will not know that they are entitled to this provision should the worst happen. We welcome the Government’s move to introduce a statutory requirement for people in the event of the death of a child, and we welcome the provisions more generally. Our aim is to increase the uptake of the payment and public knowledge of it.

In Scotland, we are certainly doing everything we can, within the constitutional and financial constraints placed on us, to support parents. We are increasing funeral support payments to reflect the cost of living. The 2020-21 Budget includes £1.3 million for funeral support payments in Scotland, increasing the standard rate from £700 to £1,000. The UK Government have not built the cost of inflation into their awards, but we will certainly be doing that for ours. It is important to take that cost into account when considering the whole package of support that can be delivered for bereaved parents.

Finally, my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) has been pushing for an increase in bereavement leave for everybody in all circumstances, particularly given this last year, during which things have been so difficult for so many people across the country. Many employers still do not give the bereavement leave that they should when people are in such circumstances. I urge the Government to consider expanding bereavement leave to everybody in all circumstances. While it is incredibly important for parents, it is important that everybody has the time, space and financial backing to grieve. Sadly, many people do not have that vital support.

[James Murray]

As we have heard, statutory parental bereavement pay was introduced in April 2020. The measure in clause 27 has been proposed to ensure that a payment will not be treated as a variation in contract for certain long-term salary sacrifice arrangements, so that recipients of such payments are not disadvantaged. The clause will bring statutory parental bereavement pay into line with other benefits.

Without the change, if a parent takes such leave, the time they have taken off will factor into the calculation of a salary sacrifice arrangement. In effect, taking statutory parental bereavement pay would lessen their entitlement to salary sacrifice arrangements.

Exemptions for other benefits exist, but they were made before the introduction of statutory parental bereavement pay, so the latter is not included. Clause 27 will include it, bringing it into line with other benefits. That is sensible, and Labour supports the clause.

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[James Murray]

We are pleased to support this important clause, which, as we have heard, introduces an income tax exemption for payments made to victims of modern slavery and human trafficking. As we also heard, the UK has an obligation under the Council of Europe convention on action against trafficking in human beings to assist victims of modern slavery and human trafficking in their physical, psychological and social recovery, including material assistance. The exemption from income tax will have effect from 1 April 2009, when financial support payments started. We welcome this measure, being wholly relieving and with retrospective effect, and are pleased to support its standing part of the Bill.

[Alison Thewliss]

I rise to support the clause; I think it is absolutely the right thing to do. May we have more information on how many people have received such payments since 2009? It would be useful to have a picture of how many people have benefited from this.

[Jesse Norman]

Of course, HMRC does not disclose information about individual taxpayers. It has not made any income tax deductions on payments already made to potential victims. I am not aware of whether it has the data, but I am happy to check and, if it does, I will respond to the hon. Lady.

Question put and agreed to.

Clause 35 accordingly ordered to stand part of the Bill.

Clause 37

Relief for losses etc

Question proposed, That the clause stand part of the Bill.

Finance (No.2) Bill (Second sitting)

Alison Thewliss Excerpts

Thursday 22nd April 2021 Public Bill Committees

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

As the Committee will know, the Government are deeply committed to greening our economy and being the greenest Government ever. As part of our resources and waste strategy, published in 2018, we committed to reducing waste and incentivising more sustainable production. The introduction of this world-leading tax on plastic packaging is a key part of that strategy.

Plastic waste is a pressing global issue. It often does not decompose and can last centuries in landfill, or ends up littering the streets or polluting the natural environment. More than 2.2 million tonnes of plastic packaging are manufactured in the UK each year. The vast majority is made from new plastic, rather than recycled material, because recycled plastic is often more expensive to use than new plastic. To tackle this, our 2019 manifesto reaffirmed the commitment to introduce a world-leading new tax on plastic packaging from April 2022. The tax will apply to the manufacture and import of plastic packaging that does not contain at least 30% recycled plastic.

The tax charge will arise on unfilled packaging manufactured in the UK and to unfilled or filled packaging imported into the UK. Including imported filled packaging in the tax will prevent any potential disadvantage to the UK packaging industry and means that packaging around imported products—for example, the bottle a drink comes in—will be within the scope of the tax.

The tax will provide a clear economic incentive for businesses to use recycled material when manufacturing plastic packaging. That will help to tackle the problem of plastic pollution, creating greater demand for this material and in turn stimulating increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

Clauses 42 to 46 set out the introduction of the plastic packaging tax. They provide the high-level principles around the charging of the tax, including key definitions needed to give businesses clarity about whether they are liable to the tax on packaging they manufacture or import. The Bill also provides powers to make secondary legislation that will provide further clarity to these definitions. That will be supported by guidance, which will also be published later this year.

Clause 42 introduces the PPT and sets out that Her Majesty’s Revenue and Customs will be responsible for its collection and management, in line with its wider responsibilities for the collection and management of taxes. Clauses 43 and 44 set out that the tax will be paid on packaging manufactured in the course of business in the UK, as well as on imported plastic packaging. For packaging manufactured in the UK, the manufacturer will be liable for the tax. For imported packaging, the person on whose behalf the packaging is imported will be liable, as they are better placed to know about the packaging than those providing customs and transport services to import goods.

Clause 45 sets out that the tax will be charged at a rate of £200 per metric tonne of chargeable plastic packaging. We will come later to the clause that sets out the 30% threshold for recycled plastic, below which the tax will be charged. A £200 rate provides a clear economic incentive for businesses to use recycled material when manufacturing plastic packaging. The clause specifies that this rate applies to a single plastic packaging component, such as bottles, lids and wrappers. This will mean that manufacturers and importers have incentives to include 30% recycled plastic in each type of plastic packaging component that they manufacture or import. If this is part of a tonne, the amount is reduced proportionately. For example, 0.5 tonnes would equate to £100 in tax. Clause 46 provides the high-level principles for the payment of the tax in relation to the relevant accounting periods. Further detail on this will be set out in regulations.

I now turn to new clause 8, tabled by the hon. Members for Glasgow Central, for Glenrothes, for Gordon and for Midlothian, and new clauses 11 and 13, tabled by the hon. Members for Ealing North, for Erith and Thamesmead and for Manchester, Withington. These new clauses suggest that the Government conduct future reviews into the tax and the impact that it has, including after six months of passing the Bill for the tax rate and for all aspects of the tax in the year after introduction, or annually after an initial report.

The Government have already set out a large amount of detail about the expected impact of the tax, and a National Audit Office report on environmental taxes recently concluded that Her Majesty’s Treasury and HMRC

“had undertaken extensive work to understand the possible impact of the tax.”

The tax information and impact note published in March this year set out that, as a result of the tax, the use of recycled plastic in packaging could increase by around an estimated 40%—equal to carbon savings of nearly 200,000 tonnes—with expected revenue from the tax ranging from £210 million to £235 million a year between 2022-23 and 2025-26. Further detail on modelling to assess the impacts of the plastic packaging tax was set out by the Office for Budget Responsibility in its economic and fiscal outlook published in March 2020. Most significantly, that included the increase in recycled plastic in packaging and more marginal impacts, such as switching to alternative plastics or materials.

The aim of the tax is to incentivise the use of more recycled plastic, rather than new plastic, in plastic packaging. The tax will complement the reformed packaging producer responsibility regulations, which will encourage businesses to design and use plastic packaging that is easier to recycle, and discourage the creation of plastic packaging that is difficult to recycle. They will also make businesses responsible for the cost of managing the packaging they place on the market when it becomes waste. Given that, the Government have focused analysis of the plastic packaging tax on the objectives rather than wider issues such as the reuse and recyclability of packaging, as suggested in new clause 13.

As with all tax policy, the Government will continue to keep the plastic packaging tax under review, including the level of the tax, to ensure that it remains effective in increasing the use of recycled plastic. Given the substantive information already published and the fact that limited new information is likely to be available before the tax is introduced, six months after the passage of the Bill would not be the right time to conduct and publish a review into the impact of the tax rate and chargeable packaging components.

As regards evaluating the tax annually after its introduction, being able to accurately isolate the impact of particular policy measures alongside other external factors is inherently difficult, and the Government will carefully consider those issues. As set out in the tax information and impact note published in March this year, consideration will be given to evaluating aspects, including the rate, threshold and exemptions, of the policy after at least one year of monitoring data has been analysed and collected.

The Government agree that it is important to understand the efficacy and impacts of the plastic packaging tax, but given that these issues have been previously considered and will be kept under review, we do not think new clauses 8, 11 and 13 are necessary. The clauses in the Bill form the first part of the legislation needed to introduce the plastic packaging tax in April 2022. I therefore move that they stand part of the Bill.

[Alison Thewliss (Glasgow Central) (SNP)]

I rise to speak to new clause 8, tabled in my name and that of my colleagues. I remain interested in the idea of a plastic packaging tax, and I will support it because too many of our natural resources are being wasted. We know from looking around that things are often thrown away that could be used again. We certainly broadly support what the Government are trying to do here, and it is a shame that it does not align with the deposit return scheme, which has been delayed in England but will move ahead in Scotland, because doing these things at the same time would have made a lot of sense and would make for a cohesive and coherent policy.

We tabled our new clause because there are aspects of the Bill where we need a wee bit more detail and aspects where the Government could be more ambitious. It is an ambitious new policy, but I think that more could be done. For example, we understand from the consultation that Her Majesty’s Treasury has closed a loophole that would have allowed people to switch to bringing in packaging from abroad, but there are still questions around the operation of the paperwork and the audit trail that will be required to ensure the success of the scheme. We also understand that the provisions are to be made by regulation under the negative procedure, and we urge the Government to be as clear as possible about how that will work, because it is important. Those in the industry will want to know how that will operate, and it falls to us as elected representatives to scrutinise that as much as we can to ensure that it is done properly.

Having spoken to stakeholders, there are concerns that I want to set out. The first is about the 30% threshold. Last night, I went to pick up a bottle of brand-name lemonade from the supermarket as part of my dinner. It proudly proclaimed on the side that it was 50% recycled, which is already above the 30% threshold—they were already doing more.

Some plastics lend themselves more to a higher level than others. PET, which is used in fizzy juice bottles such as my lemonade bottle, can be commonly and easily recycled up to 100%, so 30% is quite low for that type of plastic. The new clause seeks to look at different types of plastic and the scope for recycling them.

Polypropylene, which is used for food-grade plastics, is much more difficult to recycle. Just before lunchtime, a briefing from the Food and Drink Federation reached me. It queries what will happen about food-grade plastics and whether food businesses can avoid paying the plastic packaging tax when they cannot legally increase the recycled content of packaging in certain polymer types and formats for food contact. There are different regulations for food-grade plastics than for other plastics.

HDPE, which is used in milk bottles, could reach 30%. The dairy industry road map suggested that it was aiming for 50% of recycled material in opaque milk bottles. Again, we are not quite sure what the 30% makes possible. It would be good to be more ambitious in the areas where we can do more recycling, so that we can storm ahead. In areas where it is more difficult, it makes sense to look at things slightly differently.

The Association of Accounting Technicians commented on the international context. Brands such as Kraft Heinz have committed to make 100% of packaging worldwide recyclable or compostable by 2025. The American Chemistry Council’s plastics division is working towards 100% of plastic packaging being recyclable and recoverable by 2030. The European Commission and the Australian Government are also pushing ahead and say that 30% appears to lack ambition on a global scale.

I gently urge the Government to see if there is a differentiated approach that might be a bit more ambitious and a bit more detailed, to allow those areas where more speed is possible to push ahead. The Green Alliance believe that a differentiated obligation would be useful, because there is potential there. While we want all areas to be recycling 100% if possible, there are real technical difficulties in doing so at the moment.

The Green Alliance is also concerned about perverse outcomes from the Bill around packaging composed of multiple materials, such as card coated in a plastic or other such elements. Such items are very difficult and specialist to recycle. We would not want people to switch to those items rather than plastics; that would make the recycling situation worse because those items cannot be recycled and recovered as easily. Our new clause also addresses that point, as well as ensuring the reporting of recycling rates and the volume use of the relevant plastics.

It is important to note that the price of plastics, both recycled and virgin material, is very volatile, fluctuating with the oil price, which as we all know has moved considerably in recent years. We are worried that the scheme will not deliver the desired outcome in the event of low oil prices. Some experts suggest that plastics recycling is unviable if the oil price is under £65 a barrel. An HMT analysis of the tax level required to balance that volatility and reduce exposure would seem logical.

The £200 per tonne levy could be set higher, and there should be further analysis. At £200 per tonne, it might be more viable for businesses to pay the tax, rather than recycle the materials, which is not the Government’s very laudable aim. It would be useful to understand that fully, as low oil prices will have an impact on the viability of recyclers. Some have attributed the failures of recycling plants in London and Lincolnshire in 2015 and 2017 to that oil-price volatility. We want to ensure that those recyclers are viable businesses. We want to give a future to this sector and to ensure that these businesses can thrive, because they do good work.

A contrast has been drawn with the landfill tax, which has a clear trajectory and clear predictability, allowing people to plan a way for the market to shift to alternatives. We need to make it as easy as possible for businesses to do that. An escalator, as suggested by the Green Alliance, would be useful, so that people can plan and, if behaviour changes or other prices play into that, there is a clear sense of where we are going.

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[Kemi Badenoch]

I will go through the points that hon. Members have raised, and I think I will be able to answer quite a few of their questions. On the point about the 30% recycled plastic threshold being too low to be effective, I would say to the hon. Member for Glasgow Central that a £200 per tonne rate for plastic packaging that does not contain at least 30% recycled plastic will provide a clearer economic incentive for businesses to use more recycled plastic in the production of packaging—at the moment, it is just about 10%—and, in many cases, will make it more cost effective. We as a Government believe that setting the threshold for the level of recycled packaging at 30% is ambitious, reflects the pressing need to act on this issue and is achievable in the foreseeable future for many types of packaging. There is no point setting a threshold that we do not think people will be able to meet.

On the question of consultation with industry representatives and stakeholders, we consulted extensively. All regulations under this part of this Bill will also go through a public technical consultation before they are finalised. We will seek comments from interested stakeholders. HMRC has also set up the plastic packaging tax industry working group and conducted meetings with it to support the implementation of the tax and aid the process of drafting regulations and guidance. I take the point that the hon. Lady has made about the clarity of that guidance, and I am sure—because HMRC is working with the industry working group—that it will get there. The group consists of an independent expert and trade organisations that cover the wide range of sectors affected by the tax, ensuring that a broad range of views are taken into account.

To date, the Government have conducted extensive engagement with the industry on the design of the tax, and held two policy design consultations and one technical consultation about the clauses of this Bill. HMRC also continues to have regular contact with the devolved Administrations, non-Government departmental bodies, and other interested stakeholders about all activity regarding the tax.

[Alison Thewliss]

I am glad to hear that that engagement is ongoing. Can I ask whether the Food and Drink Federation is included within that? I am a wee bit concerned that its concerns came through this afternoon, just before we were due to discuss this issue. Perhaps the timetable that we have gone through with the Bill has surprised people who thought that they had a couple of days longer to get their submissions in, and I would like to know whether the Food and Drink Federation was part of that.

[Kemi Badenoch]

The Food and Drink Federation is part of the industry working group. The other members are WRAP, the British Plastics Federation, the Chartered Institution of Wastes Management, the Foodservice Packaging Association, the Grantham Institute, the Chartered Institute of Logistics and Transport, Inkpen, the British Retail Consortium, the Packaging Scheme Forum, the Association of the British Pharmaceutical Industry and the Forum of Private Business.

I was asked whether there is evidence that the tax will cause any change because of the level that it has been set at, but I think I answered that in my previous answer.

The hon. Members for Erith and Thamesmead and for Glasgow Central asked about the oil price. The Government recognise that the price of oil may impact on the demand for virgin and recycled plastic, which is why we are putting in place a number of reforms to transform the economics of recycling. A stabilisation fund to protect against changes to the oil price would be highly complex to administer and would carry a risk to public finances. We are not going with that, but tax measures are being introduced by the Department for Environment, Food and Rural Affairs, including extended producer responsibility reforms and a deposit scheme. The hon. Member for Glasgow Central mentioned that there is one in Scotland, and we will be introducing one in England as soon as is practical. We are seeking feedback on proposed timelines from DEFRA’s consultations. All of that will help increase the supply and quality of recycled plastic, making it a cheaper and more viable alternative to virgin plastic. That will also make demand for recyclable plastic less susceptible to changes in the oil price.

There was a similar question about complex multi-material packaging. We are not making an exemption for that, because during the consultation on the treatment of multi-material packaging, the Government decided that all packaging in which plastic is the largest material by weight should be within the scope of the tax. This will make it easier for businesses to administer the tax, and it will also rightly focus on packaging components that use the most plastic as a proportion of all material. We are confident that a reformed producer responsibility system for packaging will complement the tax and incentivise businesses to design and use packaging that can be recycled more easily.

[Alison Thewliss]

One of the things that has been raised with me is that, if someone gets a traditional coffee cup from any high street coffee chain, the coffee cup would not be within the scope of the Bill, but the lid would be. Does that not seem a wee bit perverse?

[Kemi Badenoch]

I am not sure that is the case. HMRC and the members of the working group could give specific details on exactly how that would work, but we are having the public technical consultation. That is the sort of question that can be raised there; hopefully, it will receive an answer.

Question put and agreed to.

Clause 42 accordingly ordered to stand part of the Bill.

Clauses 43 to 46 ordered to stand part of the Bill.

Clause 47

Chargeable plastic packaging components

--- Later in debate ---

[Abena Oppong-Asare]

Again, I have relatively little to say on the clauses, which in this case relate to registration. I do note that firms do not have to register or pay the tax if they manufacture or import less than 10 tonnes of plastic packaging. Is the Minister concerned that that is quite a sharp threshold, whereby producing just over 10 tonnes could bring a firm into the scope of the tax? Has the Treasury given any consideration to a more gradual threshold? Also—I am struggling to talk, because I have a mask on my face—let me ask the Minister what monitoring will be undertaken to ensure that all the individuals and firms that are required to be on the register are in fact registered?

[Alison Thewliss]

In practical terms, how many additional staff will be brought into HMRC to deal with compliance? Does the Exchequer Secretary have an estimate of the cost to the Government? Is there any estimate of the cost to firms of complying with the additional paperwork? Firms are already having to do quite a lot of additional paperwork following Brexit.

[Kemi Badenoch]

I believe that the first question from the hon. Member for Erith and Thamesmead was about avoidance risk because of where we have set the de minimis threshold. As with other taxes, the Government intend to implement measures to prevent abuse—including anti-avoidance measures covered in later clauses, which I will come to—and, where appropriate, to enable HMRC to take action to tackle the artificial splitting of a business. Connected persons will also be treated as a single organisation in assessing whether they exceed the de minimis threshold.

On business readiness, awareness and the amount of support and guidance provided, which the hon. Member for Glasgow Central referred to, we have consulted extensively to ensure that businesses are ready. We have been discussing the measure for several years now, as the hon. Lady will remember from previous Finance Bills; it will be introduced in 2022. We are raising awareness through consulting on the tax, including through the technical consultation on draft legislation and through work with industry, which will help us to ensure that the regulations are fit and ready.

On administrative cost, we think that 20,000 manufacturers and importers of plastic packaging will be affected by PPT. For plastic packaging manufactured in the UK, the manufacturer must register for and pay the tax; for plastic packaging imported into the UK, the person on whose behalf the packaging is imported must register and pay. They will usually be the consignee on import documentation, but where a consignee or co-signee can demonstrate that they are acting on behalf of another business that owns the goods, as in the case of freight forwarders, the owner must register an account for the tax.

We have looked at all the measures to ensure that businesses are ready and that costs are proportionate, and we feel that we have struck the right balance.

--- Later in debate ---

[Abena Oppong-Asare]

It is good to have reached the end of the plastic packaging tax clauses. I will speak briefly to our two amendments. Amendment 22 would amend clause 84 to improve scrutiny by making all regulations subject to the affirmative procedure and to prevent use of the made affirmative procedure. Amendment 21 would require consultation on all regulations and require that, in exercising powers, regard must be had to the principles of the waste hierarchy and the need to promote the circular economy.

These amendments simply make the point that I made earlier: much of the detail of this tax will be determined by regulations, and the Government must ensure that they are open to as much scrutiny as possible. The packaging industry will need to be consulted at all stages to ensure that the technical details of the tax work effectively. Environmental groups also need to be consulted, to ensure that the tax fulfils its purpose: to encourage the use of recycled plastic, to increase levels of recycling, to reduce the amount of waste going to landfill and to protect our natural environment. I hope that the Government will take on board the points we have made in Committee as they take this forward in the next year.

[Alison Thewliss]

I very much agree with the Opposition’s amendments. It is clear that, even with all the consultation that the Government say they have done and all the extensive behind-the-scenes work, concerns will still be raised. It is important that, as we move forward with the regulations and other things, we continue the scrutiny in this House to ensure that we get it right and that those who have concerns about the policy can raise them through elected Members in a public forum. I very much agree with that.

I also very much agree with the point relating to environmental non-governmental organisations and other relevant organisations that may still have concerns that have not yet been addressed, despite the extensive discussions that we have had this afternoon. Involving them as we go forward is crucial.

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 (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.

Leaving the EU: Impact on the UK

Alison Thewliss Excerpts

Wednesday 17th March 2021 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move,

That this House considers that the immediate economic damage, recent uncertainty and the projected long-term damage to business and trade from the UK leaving the European Union has disproven the perceived benefits of leaving the European Union; notes that the Scottish economy, specifically fishing, small businesses and manufacturing, are particularly vulnerable to market disruption; further notes that the failure of the UK Government to remain in mutually beneficial education schemes such as Erasmus+ is to the detriment of education and cultural exchange for people in Scotland and the rest of the UK; shows serious concern at the loss of EU funding and its replacement with the Shared Prosperity Fund; affirms the positive role immigration plays in society; and regrets the impact leaving the EU will have on those who wish to live, study and work in the UK.

The Brexit process has lurched from bourach to shambles to chaos—a lesson in incompetence and hubris. We are assured that, after the next hurdle, things will get better and that we will start to see all the Brexit dividends that we have been promised. So, where are we now? Less than three months after the transition period ended, the UK is facing legal action and the possibility of trade sanctions. The Office for Budget Responsibility said in its response to the Budget that the Brexit trade deal will see

“a long-run loss of productivity of around 4 per cent compared with remaining in the EU.”

Businesses that have struggled through the uncertainty of snap general elections, exit day deadlines coming and going, a rushed last-minute withdrawal deal, and a year of covid-19 now face the possibility of tariffs along with the added paperwork brought by being out of the single market. That comes hot on the heels of a record-breaking drop in trade between the UK and EU in January. The Office for National Statistics said that, after the Brexit transition period ended, UK goods exports to the EU fell 40.7% in the month and imports dropped 28.8%. Those are the largest declines since records began over 20 years ago.

The hardest hit export to the EU was food products—a growth industry in Scotland and a sector world-famous for its quality. Food and drink exports decreased by 63.6% in January this year. Seafood Scotland says that fish and shellfish exports were down 83% in January. That is devastating for the sector, which has relied on the swift movement of goods across borders. Donna Fordyce, the chief executive of Seafood Scotland, has spoken of the reputational damage this is causing, the market share being lost to countries such as Norway and the additional time and cost of processing all the bureaucracy. In evidence to the Environment, Food and Rural Affairs Committee, she said that firms were having to spend around £250,000 to £500,000 extra per year on paperwork. Seafood Scotland has talked of a “one-way trade border” that

“chokes UK exporters, but ushers in EU imports with open arms.”

That is the reality of the shoddy deal that the UK Government negotiated on Scotland’s behalf.

There was a 56.6% decline in exports in the chemical sector ahead of the UK falling out of the EU’s chemicals regulations, and manufacturing output decreased 2.3%, which the ONS directly attributed not to covid-19 but to a fall in exports caused by Brexit. Brexit has also particularly affected an export that my constituency is blessed with: an abundance of live music. Those working in creative industries are being denied the access to the EU that previous generations have enjoyed. They are being denied access to work and access to promoting Scotland and our culture abroad. We on the SNP Benches have been clear that creative professionals and those who support them must be entitled to visa-free travel.

Even for those who simply want to play music, there are barriers. My constituent Richard Traynor recently purchased a musical instrument from a German supplier with which he has dealt for many years. When it was delivered, the keyboard had warped, he suspects due to being held in sub-zero conditions at customs holding stations for a lengthy period. He had to pay customs fees to the UK Government approaching £100 for the instrument and its subsequent replacement, in addition to courier fees for a keyboard that cost £180—a real barrier to trade. Mr Traynor told me that

“the fees charged part of this has indeed been very difficult to swallow, but it does not compare to the empty hollow feeling this particular Brexit experience has left me with. I cannot believe I will no longer be able to buy from the many really nice folk I’ve traded with over the years from various places across Europe. I cannot imagine the damage this must be doing to small retailers such as folks who run small independent record labels or who run specialist shops...I guess this list could go on and on and on.”

There is growing evidence that companies in the EU are declining to send their goods to UK customers. The UK Government may not consider that a significant issue, but as my constituent points out, in so many ways, this chilling effect diminishes not just our trade but our way of life.

Visa-free travel is something that we have all taken for granted for some time. The loss of Erasmus+ and research funding has been a devastating blow to our universities, which already stand to lose so much from Brexit. The Scottish Government said from the outset that we wanted to remain a part of the scheme, and even Jackson Carlaw MSP, the former Conservative leader in Scotland, agreed. He said in the Scottish Parliament in May 2018 that

“it is not acceptable to me if the outcome of our exit from the European Union means that we can no longer participate in the Erasmus+ programme. It is perfectly clear that the direction that the UK Government is taking means that we will continue to participate.”—[Scottish Parliament Official Report, 16 May 2018; c. 61.]

Of course, we know that that did not come to pass. I do not know whether that is a reflection of the relative influence of Conservative MSPs or whether they were also being led up the garden path by their Westminster bosses.

Mon cher collègue, my hon. Friend the Member for Stirling (Alyn Smith), described the removal of the scheme as “economic vandalism” against the higher education sector. On research funding, the Wellcome Trust has said this week that the UK’s ambitions to be a science superpower

“are meaningless if they’re not backed up with funding.”

There were brutal cuts to international research this week, and we still have no clarity on the £1 billion hole in Horizon Europe. But the damage goes further than this.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Has the hon. Lady had sight of the London School of Economics report earlier this year which said that Scottish independence would be three times more costly than Brexit? Could she comment on that?

[Alison Thewliss]

Independence will give us many options. It will give us the opportunity to take our future into our own hands and not be reliant on the incompetence of those on the Government Benches.

Young people in my constituency—many from low-income families—and many new Scots are now being denied access to not just an experience but a European identity that previous generations of Scots have benefited from. More than 2,000 students from Scotland—the highest per head of population in the UK—take part in Erasmus+ each year.

My constituent and good friend Declan Blench is a translator working in European languages. He says that he and his colleagues are now cut off from not only our markets, because trade in services is so hamstrung by this deal, but the culture they have cultivated links with and come to love. Declan says that

“most of us learned our languages in adolescence to adulthood, precisely thanks to EU links, we didn’t all grow up in multilingual households. I was brought up by a single mum in an English-only household in a mining town—how on earth could I ever have done what I’ve done, if not for Erasmus? It is not just heartbreaking but galling—sacrificing these things for the sake of unrealistic notions of imperial grandeur, the ultimate symbol of post-imperial stress disorder that Britain suffers from so acutely.”

I could not have put it better.

I know that many across the House have benefited from studying and working abroad. It is wholly unacceptable for Tory Members to pull the ladder up behind them. The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) recently admitted as much on the BBC “Debate Night” show. He said to a young person who asked a question:

“You and everybody else coming through right now will not have the benefits that I had through Erasmus, work, study abroad…But am I going to sit here and say that Brexit is perfect and your generation is going to reap the benefits? No I’m not. Because you’re not frankly at the minute. And I can see that.”

A moment of honesty from the Tories, but what a statement that is—that young people are not going to benefit in the way that people on the Tory Benches did; that they will take that away from the generations yet to come.

The UK Government’s replacement is a pale shadow of Erasmus+. There has been no meaningful consultation with devolved Governments on the Turing scheme, which seems to have been cobbled together at the last minute, with all the due consideration one would expect from this inept UK Tory Government. It will not pay tuition costs for students. Living costs have been cut to a fifth of what they would have previously been. It does not encompass youth work, culture, sport and vocational schemes, which are a huge part of the Erasmus+ scheme and very important to people in Scotland. We also now know that it will not cover apprentices or trainees not affiliated with further education colleges, and it will not cover teachers, youth workers, volunteers and many more who would previously have been eligible. LEAP Sports in my constituency, which works with LGBTI people, found Erasmus+ invaluable and forged international links, which helped to build the confidence and the skills of the people they support. For example, the three-year Outsport project on preventing violence and discrimination in sport based on sexual orientation and gender identity is vital work as we seek to challenge prejudice and make sport more inclusive for everyone.

Scotland’s economy has its own specific needs that are not being met by this Eton mess of a Government. We have an ageing population. Without inward migration, our population would be in decline, with more deaths than births. Scotland’s Economy Secretary Fiona Hyslop announced “A Scotland for the Future” this week, which examines the significant population challenges our country faces.

[Douglas Ross (Moray) (Con)]

The hon. Lady’s title in the SNP parliamentary party is shadow Chancellor of the Exchequer, so as the SNP’s shadow Chancellor of the Exchequer, and as she is speaking on the economy, can she tell us what currency Scotland would have if it was an independent country?

[Alison Thewliss]

The hon. Gentleman does not even want us to get to that point, so I am not even going to engage with his arguments. [Interruption.] He is not interested because he is not interested in independence. I would rather talk right now about immigration policy, and the damage that his policies are causing to people in my constituency.

We have the worst possible immigration policy. We have arbitrary targets, a hostile environment and cruelty built into every stage of the system. People who come to live and work in Scotland tend to be highly skilled and are net contributors in both productivity and Government revenue. I have seen how non-EU nationals have been treated, causing misery and hardship, unthinkable poverty and deprivation—all of that serving absolutely no economic purpose. It costs more to treat people so abysmally, and the UK Government do it anyway.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

My hon. Friend is absolutely right about immigration policy. Does she agree that it is ironic that earlier the Tories were trying to complain about the projected figures and the shortage of doctors, when they are the ones who are imposing this horrific immigration policy on Scotland?

[Alison Thewliss]

Indeed. There are very many aspects of immigration policy that cause significant damage, including loss of skills and the general hostility, which causes people to feel that they are not welcome in their own homes. It touches me every time that someone at my surgery asks me, “Why would they do this to me? Why would they make me so unwelcome? Can I go back to my country, to the war-torn conflict that I have come from? I would feel better there than I do here, under this Government.” Every time that I can, I say to somebody, “This is your home. Glasgow can be your home and you are welcome here.” I do not hear that nearly enough from the Tory Benches. This Tory Government now seek to extend the hostile environment to EU nationals. They do not do so in our name—ever.

The Expert Advisory Group on Migration and Population has estimated that the impact of post-Brexit immigration policy will be a 50% to 80% reduction in net EU migration to Scotland after 2020, and an overall reduction in overseas net migration of 30% to 50%. It has found that very few jobs in key sectors in Scotland will meet the arbitrary salary threshold this Government have imposed. The Home Secretary is aware of these issues and has done absolutely nothing to address them. There are currently no plans to include a route to jobs below the skills threshold, and the UK Government have rejected the possibility of any regional variation in the salary threshold. There has been no clarity on whether the Scottish shortage occupation list will continue to operate. This is a disaster for our remote communities, who depend on migration to counter depopulation. It is a disaster for businesses, who rely on that pool of talent to gain a competitive advantage in an increasingly global market. It is a disaster for our universities, who face a reduction in international staff and students and the experience and richness they bring. And it is a disaster for Scotland’s cities, whose wonderful cultural offerings are ever-enhanced by our migrant communities.

There are few starker examples than Brexit of how a Westminster Government are willing to sideline Scotland’s interests for their own cheap political gain. A differentiated approach to migration works well in Canada and Australia, and there is no sound economic reasoning not to do it, but the UK Government would rather put Scotland’s future at risk to appease the worst excesses of the Tory party.

Many people are beginning to realise that Brexit was a pig in a poke and the much-vaunted schemes that have followed it are merely a mirage. I spoke recently about the shared prosperity fund, the UK Government’s replacement for EU structural funds. It is almost unbelievable that we are now five years since the Brexit vote and still awaiting detail on how this scheme will operate. What we are certain of, however, is that this scheme will, due to the United Kingdom Internal Market Act 2020 and the power grab, bypass Holyrood entirely. This UK Government have made sure that decisions are taken out of the hands of the people of Scotland and restored to the backrooms and corridors of Whitehall.

When we have the choice in Scotland, we invest in projects that meet the needs of our population. The Scottish Government built the stunning Queensferry crossing—toll-free and clearly adored by the hon. Member for Moray (Douglas Ross) as he delivered his keynote speech to the Tory party conference in front of it.

[Douglas Ross]

I was just surprised it was open.

[Alison Thewliss]

The hon. Gentleman says that, but actually it is a bridge designed to cope with the extremes of Scottish weather. [Interruption.] It is not always shut, and I want to take this head on. The previous Forth bridge was far more subject to the weather and to diversions, and the UK Government did absolutely heehaw about it. The Scottish Government built a bridge; it is a good bridge—it is a brilliant bridge—and the hon. Gentleman loves it so much that he stands in front of it and lets the cars drive through his ears on the telly.

There is also the Kessock bridge, and the £90 million of projects in the Outer Hebrides over the past 25 years for ferry terminals, bridges and causeways, the bulk of which came from European Union funds, and which nobody on the Conservative Benches would ever have thought to fund. By contrast, the UK Government built that bridge over troubled waters, the Skye bridge, and it cost the then Scottish Executive more to buy out the private finance initiative contract than the actual cost of the bridge. And now they want to chuck money at a £20 billion bridge over the Irish sea. I have with me my second-year high school geography project, which might give the Tories an idea as to why disturbing the second world war munitions dump at Beaufort’s dyke might be problematic.

The shared prosperity fund has been described as “a direct attack” on devolution by the Labour-run Welsh Government. This cannot be dismissed as grievance politics or anything remotely like it; it is a real erosion of the hard-won rights of all those in the devolved nations of the UK. Be under no illusion: it is a power grab by the Tories, who never wanted devolution in the first place. The Prime Minister has gone as far as to call it a disaster and Tony Blair’s worst mistake—I am sure we can think of other mistakes, but I will leave that for the Minister.

I am much more confident now than ever before that the people of Scotland see through the lies and spin of this Tory Government. Brexit has been a wake-up call for so many, and I welcome them all to Scotland’s cause. We need policies which meet Scotland’s needs, not an insular little Britain driven by the whims of the Tories and their crony pals. Alasdair Gray argued that a truly independent Scotland will only ever exist when people in every home, school, croft, farm, workshop, factory, island, glen, town and city feel that they, too, are at the centre of the world. This is what we seek. An increasing number of people are seeing their role in that world, and looking forward to the day when they decide to take their future into their own hands, and to take our place in the world and Scotland’s place as part of the European family of nations. I cannae wait.

--- Later in debate ---

[Penny Mordaunt]

The hon. Gentleman has my assurances that we will continue discussions within the framework of the joint agreement. He knows that there is tremendous concern about and focus on those issues. But no, I was not surprised by some of the things that were missing from the Scottish National party’s opening remarks. I was not surprised that there was no offer to help the efforts to resolve these issues for business. Businesses in Scotland want their representatives to do that. They do not want political grandstanding about another referendum. They want the Scottish Government to focus on improving the situation and not to be distracted by scandal.

[Alison Thewliss]

The right hon. Member is talking about asking the Scottish Government to help out in some way. The Scottish Government have put forward their proposals on many occasions, including “Scotland’s Place in Europe” and proposals on many other aspects of Brexit, but they have been roundly ignored on every single occasion. It is for the UK Government to take on the Scottish Government’s offers of help and assistance, rather than to shut the door in our face on every single occasion.

[Penny Mordaunt]

That is not the case. We have done a huge amount. I have been part of that engagement with Scottish Government Ministers and officials. It would be nice if Scottish National party Members would start talking up the opportunities for their businesses, goods and services, because there are many—from financial services to manufacturing to world-renowned Scottish products—that will remain protected in the EU through geographical indicators, as they were before the end of the transition period. The trade and co-operation agreement is only one of many agreements as the UK enters the global stage as a sovereign trading nation. We have already struck deals with countries including Canada, Japan and Singapore, with many more to come, and we will grow our GDP and increase our trade with the rest of the world, creating new opportunities for exporters, and delivering better choice and value for money for our consumers.

--- Later in debate ---

[Penny Mordaunt]

There was, I am sure, an electoral dividend, as the citizens of the United Kingdom were fed up and wanted to get Brexit done, but I wish we had not had to go through quite the gymnastics that we have over the last few years.

The SNP’s relentless mission to stir up hatred, division and mistrust—

[Alison Thewliss]

That’s outrageous!

[Penny Mordaunt]

I refer the hon. Lady to her opening remarks. I think the Scottish people deserve better than that. The real political heroes of the last few turbulent years, to which the hon. Member for Bermondsey and Old Southwark (Neil Coyle) referred, were not those who won referendums; they were those who lost referendums and adhered to the results. They were those who voted for an independent Scotland and accepted the result of that once-in-a-generation vote, and those who voted to remain in the EU but accepted the mandate to leave.

That faith in democracy, that respect for their fellow citizens, is the ultimate expression of mutuality—equality— in which we all share. It can be found in our NHS, in the vaccine programme, in our welfare safety nets, in every charity and voluntary organisation across the land, and in every gesture of good will and kindness towards a neighbour, including neighbours across borders. These deeply felt connections, responsibilities and care we have towards each other are at the heart of the Scottish nation, and they are at the heart of every nation—the four nations—of this United Kingdom. They are what makes those nations and our country great, and the SNP’s selfish, self-absorbed separatist rhetoric will never destroy that.

--- Later in debate ---

[Douglas Ross (Moray) (Con)]

I would like to make an offer to the hon. Member for Glasgow Central (Alison Thewliss), because in my intervention on her she said that I was not interested in the SNP’s currency plans. Well, I am interested, and the people of Scotland are interested, so I am willing to give up all of my time for the hon. Lady, the SNP’s self-declared shadow Chancellor of the Exchequer, to stand up and explain to me, and explain to the people of Scotland, in simple terms, what the SNP’s currency would be in an independent Scotland. I give up the remainder of my time to the hon. Lady. [Interruption.] I cannot believe that the shadow Chancellor of the Exchequer for the SNP will not take an opportunity to tell this House this—to tell the people of Scotland what independence would mean for them, just in terms of their currency. That is all I am asking for, but in two debates today, with multiple opportunities, the SNP has refused to tell us. It wants people in Scotland to vote for independence but will not tell them what that will mean. That is unacceptable.

My disappointment was only reinforced when I did as you asked me to, Mr Deputy Speaker, and looked at the voting records from the earlier Divisions that we had. It has now been confirmed by Parliament—by the Vote Office—that every single SNP MP today voted to say that they do not agree that

“the priority of the Scottish people is to recover from the effects of the covid-19 pandemic, and that it would be irresponsible to hold a referendum at this time.”

That is all that SNP MPs were asked to support, but every single one, all 47 of them, and the one independent suspended SNP Member, voted against that. I hope they go back to their constituencies in Scotland and explain to the people they are supposed to represent and to the whole of Scotland, on behalf of their party, why they do not think that our priority during this pandemic should be recovery rather than another irresponsible referendum.

[Alison Thewliss]

rose—

[Douglas Ross]

I am not sure whether this is on the vote or on a future currency for an independent Scotland, but I will give way to the hon. Lady.

[Alison Thewliss]

Can the hon. Gentleman explain to me what “at this time” means? Nobody is proposing that we hold an independence referendum at half-past 5 on a Wednesday night.

[Douglas Ross]

The SNP has allocated £600,000 to hold a referendum and campaign for one this year. The hon. Lady’s leader in this place, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), has said that the referendum should be in 2021. In the earlier debate, the hon. Member for Edinburgh East (Tommy Sheppard) said it will happen in the next 12 months—whether it is in December or January of next year, it will be within a year. While we are still struggling to fight this pandemic, while we are still seeing lives lost and livelihoods on the line, the SNP priority is, as always, separation. That is their mandate and all they are interested in.

We also have had no comment from the SNP today, in a debate about Brexit and the EU, on the EU’s roll-out of the vaccination programme and how we in Scotland have benefited from decisions taken by the UK Government, led by the Prime Minister, to procure and develop vaccines right at the start of the pandemic. These vaccines are protecting people in Scotland, England, Wales and Northern Ireland. How does our vaccine roll-out in this country compare with that in the rest of the EU, which the hon. Lady would like to take us straight back into?

The hon. Lady also spoke about all the great infrastructure that has been built and developed in Scotland during the SNP terms in office. I tried to intervene on that point, because I would be interested to know what she thinks of the actions of one of her party colleagues, an SNP Cabinet Minister in the Scottish Government, Fergus Ewing, writing to his own Government asking their Transport Secretary to give his constituency some good news ahead of purdah—ahead of the period in which the Scottish Government are not allowed to make any further announcements. SNP MPs know that their 14 years are coming back to haunt them: their inability to get ferries into the water and to get hospitals open to take patients. It has been a litany of failure over the past 14 years and it has come to the extent that SNP Ministers have to ask their own Government to try to sneak out some more information because they have let down so many communities.

Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 9th March 2021 Commons Chamber

[Steve Barclay]

I join my hon. Friend in marking International Women’s Day yesterday, and he raises a very important issue. That is why my right hon. Friend the Chancellor at the Budget last week committed a further £90 million of funding; that, of course, builds on the £125 million announced at the spending review and indeed the earlier £25 million that had also been provided, recognising the 65% increase in calls to the national domestic abuse hotline and the renewed focus within Government on this important issue.

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

Charities across these islands have done amazing work through the pandemic, so with the Finance Bill coming up will the Treasury reward the efforts of these charities and encourage the public to donate by temporarily increasing the rate of gift aid from 20% to 25% and expanding the small donations scheme to make gift aid much easier to claim?

[Steve Barclay]

I join the hon. Lady in recognising the huge contribution that charities have made. In respect of specific tax measures, obviously they were dealt with by my right hon. Friend the Chancellor in the Budget last week, but I remind the hon. Lady of the £750 million of dedicated funding that has been provided to date in recognition of that important work.

--- Later in debate ---

[Rishi Sunak]

What we have done is provide a scheme called Pay as You Grow to give businesses incredible flexibility and generosity in how they repay bounce back loans. Those loans at an instant can be turned automatically into 10-year loans, which reduces the monthly cash payment by almost 50%. Beyond that, there are opportunities for interest-only periods and payment holidays, all of which will support the cash flow of businesses. We also have to get a balance with the taxpayer in all of this, which is why we have taken the approach we have. I am sad that the right hon. Gentleman did not also welcome the £25 million of investment in his local community through a town deal in this Budget, which will help local businesses there as well.

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

The Save our Salons campaign presented to the gaps in support all-party group this morning. It remains hugely frustrated that the hair, beauty and holistic service industry has had no sector-specific support from the Chancellor, despite contributing £9.2 billion to the economy. Can the Chancellor explain why he has decided to ignore the calls from this largely female industry to chop VAT to 5%?

[Rishi Sunak]

With regard to VAT, I am sure the hon. Lady knows that the majority of businesses in the personal care sector are below the VAT threshold, so they do not actually pay any VAT. What we did do is include that sector in the more generous restart grants, so, depending on their rateable value, businesses in that sector, like those in hospitality, will be able to receive grants of up to £18,000.

Government's Management of the Economy

Alison Thewliss Excerpts

Tuesday 23rd February 2021 Commons Chamber

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

I thank the Opposition for bringing this motion to the House. I very much agree with the assertion that, this time last year, the UK was not in the best situation to handle the devastation that coronavirus would wreak on our economy. Let me quote this to the Chamber:

“The UK’s resilience has been weakened under sustained Tory cuts. Wages have barely grown in the last decade. The welfare state safety nets have been torn to shreds. Public services have struggled through chronic underinvestment and asset stripping, and some parts of the UK that have still not fully recovered from the 2008 financial crisis are ill-equipped to cope with a further recession. Coronavirus has the potential to have a lasting impact.”—[Official Report, 12 March 2020; Vol. 673, c. 486.]

If the words sound a wee bit familiar, it is because I have said them before—in response to the Chancellor’s Budget plans almost a year ago. I congratulate those on the Labour Benches for finally catching up with what the people in Scotland have long known: we have had 10 years of damaging austerity and five years of Brexit uncertainty crushing investment, and it is likely that the UK would have fallen into recession in 2020 anyway, even before the pandemic began to take hold. Even in the face of the most harmful economic crisis that our generation has seen, the Tories have pressed ahead with a Brexit deal that has delivered near-fatal blows to our export sectors and has cost countless jobs.

The labour market statistics of the Office for National Statistics make grim reading. They state that, in January 2021, 726,000 fewer people were in payroll employment when compared with February 2020, of whom 425,000—58.5%—were under 25. This is both symptom and cause of the precarious and damaging employment practices that have been allowed to run rampant under this UK Tory Government. The Government have not dealt with zero-hour contracts. They have trapped young people in discriminatory and exploitative rates of the minimum wage—a minimum wage I should point out, not the pretendy living wage as the UK Government like to badge it— and they have failed to act on fire and rehire, despite being given options by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). Young people deserve better than this. The UK Government must now devolve all powers over employment law to the Scottish Government. We do not forget that Labour blocked devolution of those powers as part of the Smith commission, preferring to leave Scotland at the mercy of the Tories rather than letting the Scottish Government progress a fair work agenda for our people.

I agree with the hon. Member for Oxford East (Anneliese Dodds) that withdrawing furlough in April is too early. Realistically, if we are to prevent a cliff edge of unemployment when the job retention scheme ends, businesses will require the furlough scheme for at least two months after the current lockdown measures come to an end and perhaps longer if the course of the virus does not go as we all dearly hope—we have been here before. The Chartered Institute of Personnel and Development has called for an extension to the end of June and for much greater certainty from the Chancellor to allow businesses to plan properly. Many people lost their jobs unnecessarily due to the previous insistence from the UK Government that the scheme would end in October, which was followed, of course, by a last-gasp U-turn, by which time it was too late for too many.

The CIPD also points out that there is a clear imperative for a lower limit to the furlough scheme so that the incomes of those on the lowest rates do not fall below the national minimum wage. People have been struggling to make ends meet, and 80% of what was already a very low wage is not enough to live on. We on the SNP Benches have long argued that Scotland should have the powers to provide its own furlough scheme as well as the borrowing powers that would be necessary to save jobs.

Labour’s policy of recovery bonds are all well and good, but it is not exactly groundbreaking. The Resolution Foundation has described it as unnecessarily complicated, but not actually harmful. I am afraid that that is probably the best that can be said about it. Let us not pretend that it will have a huge impact on recovery. Money could be much spent on a further uplift to universal credit and legacy benefits, which would put money directly into the pockets of those who need it most. It could be spent on ending the benefit cap, which the Child Poverty Action Group has reported will already affect 35,000 households in the new year, 77% of which are households with children, followed by the capping of a further 41,000 households after the first few months of 2021 as their grace period expires from January through to March. The money could go towards scrapping the appalling two-child limit, which the British Pregnancy Advisory Service has found recently is driving up the numbers of women opting for an abortion rather than bringing a child into the world. This Government should be ashamed of those statistics and they must end the two-child limit now.

Unemployment is expected to peak later this year, so keeping and extending the £20 uplift would help to alleviate some of the uncertainty that families are facing at this difficult time. The UK Government’s plans to scrap this support will take the basic level of support to its lowest level since 1991. The National Institute of Economic and Social Research figures out this week also demonstrate that destitution levels have risen from 0.7% of all UK households to 1.5% in the space of a year under this Tory Government. So even with an uplift, families are struggling to make ends meet. The UK Government know this, and it would be utterly despicable of them to go ahead and remove that vital support, knowing what we all know.

Research by the Scottish Parliament Information Centre has shown that the single most effective policy in alleviating child poverty would be a generous increase in universal credit, and the Scottish Government are doing their bit through the Scottish child payments. The relationship here is very simple: the more money paid in benefits, the fewer children in poverty. It is time—it is beyond time—for this Government to scrap the two-child limit and bring payments in line with the OECD average.

The Opposition are tinkering around the edges of existing policy here, and it is really not good enough. The Labour motion seems stuck in the past by failing to acknowledge that the active state does not have to stop at the end of Whitehall. Holyrood currently has only very limited borrowing powers, leaving us always at the mercy of Tory decisions. Scotland needs bold, ambitious plans to fund large-scale investment and to stimulate the economy. An overwhelming majority of voters in Scotland now believe that Scotland should have the power to borrow on its own terms, but the Opposition have failed to share in that simple ambition.

The Scottish Government are already delivering policies such as the youth guarantee, which will ensure that everyone aged between 16 and 24 has the opportunity of work, education or training. We are putting money into growing the economy while tackling the deep-seated inequalities we have seen highlighted by the covid-19 pandemic, but without the powers of a normal country, Scotland still cannot do things like extending the furlough scheme. We cannot deliver our own tailor-made support schemes for those who have been excluded from the UK’s support, such as self-employed people and certain women on maternity leave.

The Scottish Government are delivering on capital investment through the Scottish National Investment Bank, the single biggest economic development in the history of the Scottish Parliament and the UK’s first development bank. The bank will provide finance and catalyse private investment to grow the economy through innovation and accelerating the move to net zero emissions and a high-tech, connected, globally competitive and inclusive economy. However, it is hampered by a rule that does not allow the Scottish Government or the investment bank to allocate funds between years. The Treasury must stop standing in the way when Scotland wants to get on with the job.

Scotland has bold ambitions for the future, but the hard reality is that we need more powers to deliver a bigger-scale fiscal stimulus to future-proof our economy. This lack of powers is going to have real-life consequences for the tens of thousands of Scots whose jobs are on the line. Reading the Labour motion, we can see clearly how little the Union has to offer to the people of Scotland. It is little wonder that more and more Scots—now in 21 consecutive polls—are waking up to the reality that only an independent Scotland can provide the fair, just economy that we all need.

Ministerial and other Maternity Allowances Bill

Alison Thewliss Excerpts

2nd reading & 2nd reading: House of Commons
Thursday 11th February 2021 Commons Chamber

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

I too would like to start by congratulating the hon. Members for Enfield North (Feryal Clark) and for Walthamstow (Stella Creasy) and the right hon. and learned Member for Fareham (Suella Braverman) and wishing them all the very best in their pregnancies.

Like many others, I come to this Bill with a sense of frustration. The progress is welcome, but the Government have missed an opportunity to put many other things right. I would not argue for a second that Ministers should not get maternity leave, but the Bill does not go far enough. I agree with the hon. Member for Edinburgh West (Christine Jardine) that it should deal with, for example, adoption. It is also a bit of an insult to working parents across these islands, who have found their own maternity and paternity leave compromised during the pandemic. It is a sign that the Government move fast when they want to, but not for everybody who needs that.

At the start of the pandemic, I asked the Chancellor how he intended to protect the rights of those who were pregnant. Some had been asked to take statutory sick pay or holidays or to start their maternity leave earlier than they should, thereby losing out on time with their baby and on the pay they needed. When I raised the matter, a cloud of bemusement swept across the Treasury Bench. It was clear that it had not even occurred to Ministers. The account by the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) shows that not much has changed when it comes to male Ministers not taking account of maternity.

Almost a year from the start of the pandemic, Pregnant Then Screwed has been forced to take the Government to judicial review to tackle what appears to me to be blatant discrimination in the calculation of the self-employment income support scheme. I wish Joeli Brearley and her team all the very best in their challenge, but it should not have come to this. The UK Government have repeatedly been told about the flaws in the scheme. As with so many other issues, they have chosen to ignore those flaws and the women who have been excluded from the support schemes and disadvantaged. They must take action to put that right, regardless of what happens with the judicial review. It is simply not fair that women are losing out because they took time out of their business to look after their babies.

Bethany Power has also found that women on furlough have been told that they will lose their accrued annual leave as part of what has happened to them. The Government must correct that as soon as possible, because it is simply not right that women are losing out on their holidays because of how things have been calculated.

NHS exemption certificates should be extended for 12 months, because women have not been able to access the dental care they would usually get in the year after having their baby. That unfairness must also be addressed. They have been not been able to access the service because in many cases, dental services have been suspended.

There are so many more things I could say about maternity provision in this country, and so much more needs to be done. Maternity Action has been campaigning for a very long time to get those issues addressed. The Government are letting women down. Maternity should be a special time they get to spend with their wee one. It should not be a time of stress, poverty and wondering how to make ends meet. Too many women are still losing their jobs and being failed by their employers, but are not able to challenge that because of the structures the Government have put in place.

I urge the Government to act now on all those issues, and take them as seriously as they are taking this one case for one Minister. They should ensure that nobody gets left behind when they take maternity leave.