Income tax (charge)

David Mundell Excerpts

Monday 16th March 2020 Commons Chamber

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I am pleased to have the opportunity to speak in this debate. Harold Wilson said that a week was a long time in politics. During Brexit we found out that a week was even longer, but the Budget, only last Wednesday, seems a lifetime ago. Even when listening to the Chancellor, I still harboured hopes of a long-planned personal visit to New York this weekend, but for all the reasons we see around us that is simply not able to happen. Three weeks ago, I was in Rome for the Scotland-Italy rugby match. At that point, the talk was of difficulties in the north. No one envisaged that instead of the crowds in St Peter’s Square or outside the Colosseum there would be nobody.

As a Member of Parliament, I am often asked about the most difficult issue and time I have had to deal with. For me, the answer is very straightforward: the 2001 foot and mouth crisis, which affected my constituency deeply. I want to be very clear that I am not making any comparison between that disease and coronavirus. The comparison relates to the impact of an event of that scale on businesses and their continued prosperity, and on the wider community. There was also, as a report from Strathclyde University and others identified, the impact of isolation. During that period, very stringent measures were taken and many farmers had to be isolated on their own properties and could not leave. The report, two years later, made very clear the long-term consequences of isolation. We need to take those findings on board and think about them. We need to learn the lessons of such events, with measures that might come into place. I am sure those issues will be debated when we have more focused debates on coronavirus.

The businesses most affected by those circumstances were the self-employed and contractors, so we need to give those groups the maximum possible support. The hospitality industry was also very badly affected. One lesson from that experience is that small businesses need grants not loans. I remember taking part in a demonstration—I know that that will surprise you, Mr Deputy Speaker—outside the offices of Scottish Enterprise Dumfries and Galloway with colleagues in small businesses to make just that point. Grants, not loans, were needed to see them through. Rates relief is to be welcomed and I welcome the package of measures the Scottish Government have announced, but it is capped and we need to look again at whether that is appropriate.

The other big players are the banks. From my perspective, the situation that we face will be easier to deal with because it affects the whole United Kingdom, so the banks that are based outwith the south of Scotland and that are being asked to support businesses understand what is happening on the ground. We need that unity of purpose from the banks. Hon. Members who have dealt with the banks know that they always say the right thing, but doing it is something else, especially when the computer says no. We need to make sure that they follow through on their commitments, and on the positive tone that the Chancellor set in the Budget.

We need a uniformity of approach from the Government at all levels—the UK Government, the Scottish Government and local government. The underlying philosophy of all those institutions must be that we want to keep our businesses going and that we are not jobsworths who want the returns in on the exact date. That is why I welcome what the Chancellor said about VAT holidays and flexibility with Her Majesty’s Revenue and Customs. I am sure, however, that hon. Members on both sides of the House have experience of HMRC not being particularly flexible, so we need that to be followed through. That unity of purpose from government will be vital.

As has already been said in an intervention, the hospitality and tourism industry is the most vulnerable in a constituency such as mine. Often, as I found out during the foot and mouth crisis, businesses that have done well and are planning for the future are the worst hit. For example, the Gretna Green Famous Blacksmiths shop in my constituency, one of the most visited tourist attractions in Scotland, has won numerous awards for its attempts to attract Chinese visitors. A large number of Chinese visitors go to that location, but not any more—there are none. Its business model has already been seriously disrupted by these events. It is a bigger business, not a small business, but it needs help and support too, if that sector of the economy is to survive after these events.

Hotels in my constituency were already in difficulty; many, such as the Moffat House hotel, have closed. One local hotelier told me that they were facing a perfect storm of events, of which, at that stage, coronavirus was not one. I appeal directly to the Scottish Government on that issue, because the way that our business rates system in Scotland works for the hospitality industry, and particularly hotels, is still not right.

As I indicated, there are lots of lessons to learn. I hope that there is still the institutional knowledge in the Scottish Parliament and the Scottish Government to learn lessons from 2001, and that the Government can take some of those lessons on board, particularly in relation to isolation, as I said.

I welcome the Budget as a whole for Scotland, in particular the £640 million of additional funding for Scotland, which was £172 million more than the Scottish Government had anticipated. By any analysis, the Scottish Government got extra money. In my experience, they have not always welcomed, or even acknowledged, extra money—indeed, sometimes it was the wrong kind of money, even if they did acknowledge it. I hope that on this occasion, and in these circumstances, they will acknowledge the extra money.

As I said, I am pleased with what the Scottish Government have had to say about spending on business support in relation to coronavirus, but I would also like the money that is coming forward to be spent on infrastructure. Back in the ’90s, before the Scottish National party was in power, and when it held the constituency of Galloway and Upper Nithsdale, as it then was, the A75 and A76 were described as the most important forgotten roads in Scotland that needed to be substantially upgraded. Of course, since 2007 there has been an SNP, or SNP minority, Scottish Government, but that investment has not been forthcoming. I use this occasion to plead for the needs of the A75 and A76. I am sure that there is somebody in the SNP who remembers those previous commitments.

Obviously coronavirus is significantly affecting today’s debate, and rightly so, because it is the issue that most affects our constituents at the moment, but I want to highlight one other issue on which I wrote to the Chancellor ahead of the Budget, together with 15 Conservative colleagues, the Association of Convenience Stores and the British Retail Consortium: access to cash. It is a big issue; in a crisis, many people like to have some cash available, so that they have flexibility in how they approach difficult circumstances. There is a crisis in access to cash, and it affects large rural constituencies such as mine in particular, but also many other communities.

Some of the most deprived communities in our country bear the hardest impact. I had not realised until relatively recently that the average withdrawal from a cash machine is around £10 or £20. A fee of up to £3 to take £10 out of a cash machine is a very significant mark-up. A report has indicated that about 8 million people in our country are not ready to cope with a cashless society. A cashless society may come; indeed, when I travel from my constituency to central London, I feel that central London is, in many ways, a cashless society—in which there are, ironically, hundreds of cash machines. We need to do something about this issue. I welcome the Chancellor’s promise in his statement to legislate to secure the long-term future of cash, but it is very important that the steps that he takes are the right ones.

[The Economic Secretary to the Treasury (John Glen)]

indicated assent.

[David Mundell]

I am pleased to see the Minister nodding; I hope that he will nod when I say that those steps should include reversing the arbitrary cuts to the LINK interchange rates paid by banks to fund the network; exempting free-to-use ATMs from business rates; and recognising that ATMs are the only infrastructure through which we can guarantee national access to cash. Of course, cashback at convenience stores and other places has a role to play, but it is very important that we have a sustainably funded network of cash machines throughout the whole country, given the many branch closures we have seen in our constituencies—particularly Royal Bank of Scotland branch closures in Scotland.

I agree with the hon. Member for Ellesmere Port and Neston (Justin Madders). The consequences of these events—such as the foot and mouth crisis that afflicted much of the south of Scotland 20 years ago—go on for years. They do not just end when someone declares that the crisis is over. They go on for a long, long time for the businesses, individuals and communities that have been affected. We do not just pledge support to those individuals and communities today; we pledge it to see them all the way through the consequences. I think that that will mean revisiting some of what was announced in the Budget and some of what was announced by the Scottish Government, and if that is necessary, so be it.