Finance (No. 2) Bill

Debate between Alistair Carmichael and Victoria Atkins

2nd reading
Wednesday 29th March 2023 Commons Chamber

[The Financial Secretary to the Treasury (Victoria Atkins)]

I beg to move, That the Bill be now read a Second time.

Before I start the debate, Mr Deputy Speaker, I should declare, to avoid any potential conflict or perception of conflict, that due to a family member’s financial interests, I have recused myself from making ministerial decisions on issues relating to the soft drinks industry levy, which will be dealt with more than amply by my hon. Friend the Exchequer Secretary.

I start the debate by paying tribute to Betty Boothroyd, a groundbreaking Speaker of this House who commanded the Chamber with wit, good humour and gravitas for eight years. She developed a number of subtle and perhaps not so subtle tactics to control a rowdy House, including, I understand, yawning to hint that a speech had outrun the patience of the House. I will try, Mr Deputy Speaker, not to cause you to yawn.

Since the last Finance Bill in the autumn, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked. The Office for Budget Responsibility now forecasts that we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing. We are on the right track.

At the Budget, my right hon. Friend the Chancellor delivered the next part of our plan: a Budget for growth. He was clear that this Government’s focus is not just on encouraging growth as we emerge out of the downturn, but on building long-term, fiscally sustainable and healthy growth with businesses and, importantly, communities.

The Finance (No. 2) Bill delivers on those commitments. It takes forward measures to support enterprise and grow the economy by encouraging business investment and helping to increase the number of people in work. It legislates for announcements made at previous fiscal events, which take advantage of our opportunities outside the EU and reinforce our commitment to financial stability and sound money. It implements the tax measures needed to continue improving and simplifying our tax system, to ensure that it is fit for purpose.

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

On fiscal events, the Minister will be aware that there was dismay in the Scotch whisky industry at the decision not to reverse the double-digit duty hike previously announced, while introducing a freeze on duty for what the Chancellor called “warm ale”. How is that consistent with the Government’s previously stated policy of reforming spirit duty to support the Scotch whisky industry?

[Victoria Atkins]

I am grateful to the right hon. Gentleman for raising that issue. I understand his concerns, and I will go into a little more detail later about the reasoning behind the restructuring of alcohol levies. In the last 10 fiscal events before this one, the whisky industry benefited from either freezes or cuts in duties. The Bill will bring into place the new framework announced some time ago, including the health aspect of being able to differentiate the strength of alcohol used in products—something that I suspect the right hon. Gentleman will want to engage with in his speech.

Let me turn to the substance of the Bill, starting with the measures to support enterprise and economic growth. Those of us on the Government Benches know that a strong private sector will grow the economy, spread wealth and prosperity across the country, help to invest in public services and support the most vulnerable in society. We recognise that central to these ambitions is private sector investment, so we are lowering business taxes to incentivise investment and tackle the productivity gap. My right hon. Friend the Prime Minister put that at the heart of his economic strategy as Chancellor, when he introduced the super deduction for corporation tax.

The next step in encouraging business investment is the full expensing policy announced in the spring Budget. The Bill introduces full expensing for the next three years. That means that for every single pound that a company invests in qualifying plant or machinery, its taxes are cut by up to 25p. That will put more than £27 billion back into the economy over the next three years. It is a corporation tax cut worth £9 billion, which the OBR has said will increase investment by 3% for every year that it is in place. It will also make us the only major European country with full expensing, and will give us the joint most generous capital allowance regime of any advanced economy, making the UK capital allowances regime the most competitive in the OECD on a net present value basis, and securing the UK’s position as a global leader.

--- Later in debate ---

[Victoria Atkins]

I am extremely grateful to the right hon. Gentleman for his question, which I interpret to be about energy-saving materials. I ask him to watch this space. I know how keen he and his colleagues in Northern Ireland are to ensure that we are able to bring forward those measures. I was hoping he would ask me a question that would give me the opportunity to flag my love for Bushmills whiskey—in a healthy way—but sadly I have been denied that.

[Mr Carmichael]

On that point, will the Minister give way?

[Victoria Atkins]

Crikey—if the right hon. Gentleman asks me to list my favourite Scotch whisky, we could be here some time.

[Mr Carmichael]

I am well up for that challenge. We know that the Secretary of State for Scotland argued against the increase in duty. One wonders what it was that the Minister found so unattractive in that argument; perhaps we will now get some of the answer. I do not know whether the Minister regards it as a detail, but when will we see spirit duty reform? Can she give us a date?

[Victoria Atkins]

As the right hon. Gentleman knows, I am bound by collective responsibility, so I can neither confirm nor deny what the Secretary of State for Scotland may or may not have said. I do not know, but I certainly intend to continue to support the Scotch whisky industry. [Interruption.] My hon. Friend the Exchequer Secretary to the Treasury reminds me that the changes will be coming in in August. We want to work constructively with industry on this.

Another opportunity is in delivering a better connected country. As announced in the autumn Budget 2021, the Bill delivers a package of air passenger duty reforms that will bolster air connectivity across the UK through a 50% cut in domestic air passenger duty. Set at £6.50, the new domestic band will benefit more than 10 million passengers from April. The reforms will also align with UK environmental objectives by adding a new ultra-long-haul band, ensuring that those who fly furthest and have the greatest impact on emissions incur the greatest duty.

The Bill will also take forward measures to support sustainable public finances, helping to provide the stability and confidence that underpin the economy and supporting businesses and households across the country. Despite energy prices having come down since they reached historic heights after the invasion of Ukraine, we know that many families and businesses still feel the strain. The only sustainable solution to the link between the cost of gas and the price paid by customers for all electricity is to reform the energy market and reduce the reliance on gas generation, so as we announced at the autumn statement, the Government are now legislating for a tax on the extraordinary returns of electricity generators resulting from the spike in gas prices driven by Russia’s illegal war in Ukraine. It is forecast to raise approximately £14 billion over the next five years, to help to fund public services and interventions to support households and businesses with increased energy bills.

To further ensure that businesses pay their fair share of tax, the Government will also legislate to protect the UK tax base against aggressive tax planning by large multinational businesses, and to reinforce the competitiveness of the UK; I know that this is a matter of interest to several right hon. and hon. Friends. The Bill will implement OECD pillar two in the UK, which builds on the historic agreement of over 135 countries to a two-pillar solution to the tax challenges of a globalised and digital economy. The global minimum tax—pillar two, as it is called by those who speak accountancy language—will ensure that multinational enterprises pay a minimum 15% rate of tax in each jurisdiction in which they operate, meaning that those companies operating in the UK contribute their fair share to sustainable public finances.

Prisons Strategy

Debate between Alistair Carmichael and Victoria Atkins

Tuesday 7th December 2021 Commons Chamber

[Victoria Atkins]

I thank my hon. Friend, and I also thank her constituents who do so much to keep our communities safe. On the planning application, I regret that I cannot announce our views at the Dispatch Box; we must leave that to the council. I know that she has been lobbying hard to ensure that the plans meet the needs and concerns of her constituents.

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

There is a lot in this statement that is to be welcomed, but the challenge that faces the Minister is that we can undermine it all by continuing to allow overcrowding in our prisons. Some of the prison estate is more than 60% overcrowded. With the prison population forecast to rise by 20,000 in the next four years, why are we not linking this to sentencing policy? The bottom line is that we still send too many people to prison.

[Victoria Atkins]

Fundamentally, the judiciary and magistrates should be trusted in their sentencing decisions. We need to provide alternatives for people who should rightly be sentenced to alternatives, but that must be a matter for the judiciary. On the question of prison places, this is precisely why we are investing nearly £4 billion in new prisons as well as having a vast programme of work to reshape existing accommodation and put in temporary accommodation so that prisoners are treated safely and decently inside.

Afghan Citizens Resettlement Scheme

Debate between Alistair Carmichael and Victoria Atkins

Monday 25th October 2021 Commons Chamber

[Victoria Atkins]

Very much so. In relation to those who are outside Afghanistan, the Ministry of Defence and others are working very hard with international partners to secure safe routes where it is possible to do so.

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

I ask again the question posed by the hon. Member for Brighton, Pavilion (Caroline Lucas): how many of the 5,000 places currently allocated have already been filled, and how many of those people are already in the United Kingdom?

[Victoria Atkins]

Because the scheme has not been launched yet, as we are still developing it, I do not have a precise figure for the right hon. Gentleman. However, I ask him not to take from that that the figure has been met or otherwise. At the moment, I am not able to help the House with that number; when I can do, I will.