Alistair Carmichael
Main Page: Alistair Carmichael (Liberal Democrat - Orkney and Shetland)
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I am grateful to you, Madam Deputy Speaker, for the opportunity to take part in this debate. It can occasionally be a dangerous debate in which to speak. In my experience, Budgets that are welcomed on Wednesday are often damned by Sunday, but I do not know what would need to happen between now and Sunday for this one to be described as exciting.
Other Members have referred to Brexit as the elephant in the room. It is important that we understand and explain to those on the Treasury Bench why the Chancellor’s failure to address Brexit was so important. As a member of the Select Committee on Exiting the European Union, it is rarely necessary for me these days to stick my hand in my pocket to pay for bacon and eggs. Just about everybody wants to buy me breakfast to explain why Brexit is going to be so difficult for their sector. The one recurring message, whichever sector I speak to, whether it is the Corporation of London or farmers, crofters and fishermen in Orkney and Shetland, is that a hard Brexit and the determination to leave the single market and the customs union, possibly without securing a trade deal, which would leave us on World Trade Organisation rules, would be disastrous for them.
This is the first day since the Prime Minister made her speech at Mansion House on which the Chancellor of the Exchequer has had an opportunity to give some reassurance, and to tell the various sectors of our economy that there was an understanding of their position, but he failed to do that. His failure to say anything on the subject was culpable and could ultimately be catastrophic.
It was also disappointing for Opposition Members that the Chancellor seemed to have nothing to say about the need to tackle climate change. There are so many possible measures, many of which are not particularly expensive. There could have been more measures to encourage energy efficiency, and only a small amount of money would be necessary to develop renewable energy—most notably, in my constituency, through wave and tidal power generation—but there was absolutely no mention of those things. At a time when there are so many other pressures calling for the Government’s attention, it is more important than ever that the long-term issues—of which climate change is probably the most clamant—should not be forgotten.
I am not, however, one of those who think that a determination to tackle climate change means that we should turn our back on hydrocarbons. They remain an important part of our economy, particularly in my constituency in the Northern Isles. I was a little underwhelmed by the Chancellor’s offer of a discussion document, especially since it was the second such offer, but on reflection, and having heard a few other emerging details, I believe that this at least shows an understanding of the need to take continued, serious action to help the North sea oil and gas industry.
The Chancellor did not refer to it, but I understand that the Government have today laid before Parliament a statutory instrument—I have not yet had sight of it—to extend the definition of investment expenditure for certain categories of operating and leasing expenditure. That will be welcomed by the industry. [Interruption.] The Financial Secretary to the Treasury has just indicated that it will be backdated. This measure could have a significant effect on our continued exploitation of resources on the UK continental shelf. We will await the Government’s discussion document with interest and see what it says.
The real story that will emerge from this Budget is the Chancellor’s lack of understanding of small businesses. He is really out of touch, and at no time was that more transparent than when he spoke about the changes to national insurance contributions for self-employed people. There are abuses of self-employed status. In the so-called gig economy, employers such as Uber are taking people on as self-employed agents when they are, to all intents and purposes, employees. That needs to be tackled, and it is something that the Chancellor could usefully have taken on today.
In fact, the Chancellor has introduced a tax increase for some of the most hard-pressed people in our communities. I think he has done this because he just does not understand what life is like for people who work as builders, plumbers, window cleaners or hairdressers, and for the many others who will be affected by this change. He says that this is about levelling the playing field between employment and self-employment, but we all know that that playing field will never be level, and that fact has to be recognised in our tax structures. Self-employed people take risks, sometimes putting their house on the line. The reality is that if a sole trader does not work, they get no sick pay. If their business goes bust, no one will step in and give them a redundancy payment.
Geraint Davies
Does the right hon. Gentleman agree that millions of these people are, in essence, not self-employed by choice? They have just been let out by big companies to save those companies paying national insurance and all the other benefits. They have been left on their own in a position that they do not want to be in, and now they are being punished by the Government.
Mr Carmichael
That was the point I was making about Uber and other companies that take on people as nominally self-employed agents, when to all intents and purposes they are employees. That must be tackled, but this Chancellor seems to have no great enthusiasm for tackling the big corporates. The change will not hurt them; it will hurt the small sole traders who are working in their own right, rather than as agents of a bigger corporate.
Rob Marris
The right hon. Gentleman talked earlier about waking up tomorrow and having another look at the Budget; may I suggest that he does that with regard to this issue? According to the Chancellor’s figures—I do not know whether they are accurate—the increase will raise £146 million a year, and national insurance tax breaks for the self-employed are £5 billion a year. Proportionally, on the Chancellor’s figures, that is not a big increase.
Mr Carmichael
That brings us back to the same crux of the problem, which is that we are treating everybody with self-employed status as though they were living in the same way, but they are manifestly not. There is a distinction to be drawn between risk-takers and entrepreneurs, and those who are effectively employed but are treated as self-employed. That is the issue, but it will not be tackled by today’s change.
Likewise, the digitisation of tax will affect many sole traders and small business people. It is welcome that the proposal has been delayed for a year, but we all know about the problems that will make it difficult and, frankly, I do not see many of them being resolved in a year. All we have done is kick the can down the road.
The Liberal Democrats welcome the extra money for social care, but I fear that it will ultimately be inadequate, and that we will be in the middle of another NHS winter crisis this time next year. I wonder how many more crises our NHS will be able to sustain while retaining good-quality staff and providing the service that we enjoy at present.
My final point is about spirits duty—[Interruption.] I do hope that I am not intruding on the shadow Chancellor.
Madam Deputy Speaker (Natascha Engel)
Order. I do not think that the shadow Chancellor is aware of how loudly he is speaking. It is quite difficult to hear the right hon. Member for Orkney and Shetland (Mr Carmichael).
Mr Carmichael
I am grateful, Madam Deputy Speaker. The shadow Chancellor may not have been aware, but I was.
Mr Carmichael
I am an easy person to miss.
Spirits duty is being increased by 3.9%, which has already been rightly condemned by the Scotch Whisky Association. Not only will that affect an enormously important manufacturing sector for my constituency and for the Scottish and UK economies, but the effect will go beyond Scotch whisky. When I was first elected to the House in 2001, my constituency had what would be called one and a half whisky distilleries. We now have two full-time whisky distilleries and three gin distilleries. [Laughter.] I am not claiming responsibility or credit for that, but we all know that the market supplies when demand increases. The point is that that is typical of many areas of the country. It is a growth area with small, growing businesses that deserve support; they do not need to be clobbered in this way.