Finance Bill

John Lamont Excerpts

Tuesday 12th September 2017 Commons Chamber

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

This second Finance Bill of the year brings forward measures that the House did not have time for before the general election. Without that election, I would not be standing here today to represent the people of Berwickshire, Roxburgh and Selkirk and I therefore very much welcome the opportunity to contribute to this debate. I am also delighted to speak so soon after my colleague, my hon. Friend the Member for Moray (Douglas Ross). I know Douglas from our time together in the Scottish Parliament, where he was an excellent Member, and I am confident that he will be a first-class representative in this place for the people of Moray. I congratulate him on his excellent maiden speech.

As a whole, this is a Bill that prioritises fairer taxation and economic stability—two policies that have served my constituency in the Scottish borders well. Indeed, the number claiming out-of-work benefits in Berwickshire, Roxburgh and Selkirk has fallen by more than 50% in the past five years and remains below the Scottish and UK average. Around 200 new businesses have been created in my constituency since 2013. That means more people in work and paying tax, and 200 more businesses making contributions to the public purse and providing local jobs. This has been achieved by encouraging growth, not through more and more public spending. Our deficit is now a third of what it was, and we remain on course to have a budget surplus within the next few years. This approach can be contrasted with that of Opposition Members, who stand for more spending, more borrowing and more debt. Labour Members stood on a manifesto that was completely uncosted and fiscally irresponsible. Their spending plans have a £58 billion black hole and their planned tax rises will drive away businesses and reduce investment.

The Conservative approach in successive Finance Acts also stands in stark contrast to that of Scottish National party Members, who want to drag Scotland out of the United Kingdom. This would leave Scotland with a £13 billion black hole in its public finances. While the UK’s deficit is now down to 3% of GDP, an independent Scotland would have a deficit worse than those of Spain or Greece, and one that would saddle our children, our grandchildren and probably our great-grandchildren with significant debt. Despite trying for years to get one, I have yet to hear a straight answer from an SNP Member about how they will plug that gap. That will need to be done with spending cuts, tax rises, higher borrowing or a lot of all three. To put that figure in context, £13 billion is more than Scotland spends each year on our health service. I ask: where is this money going to come from? Luckily, the vast majority of Scots seem to agree that that is not a price worth paying, which is why support for separation continues to fall.

My consideration of the Bill has given me the opportunity to reflect on my general views about fiscal matters. It will come as little surprise to Members that as a Conservative, my instinct is for taxation to be kept as low as possible. Doing so encourages growth and innovation, and it encourages the best and the brightest to move to the United Kingdom to work and do business. That view is all the more important for me because I represent the Scottish borders, so my constituents bear the brunt of different approaches to taxation in our United Kingdom. It is too easy for a business, or a higher-tax earner, to relocate south of the border if Scotland ceases to be an attractive place to do business, and I fear that that is increasingly becoming the case.

Taxation powers in Scotland are shared between the United Kingdom and the Scottish Parliament, after a considerable transfer of power to Holyrood, but the approach of the two Governments could not be more different. The Conservative Government here are backing Scottish business with lower corporation tax rates, investment in broadband and shortly, via the borderlands growth deal, significant investment in the south of Scotland. Personal taxation has been reduced by increasing the personal threshold, benefiting more than 2.5 million Scots. In contrast, the SNP has made Scotland the highest-tax part of this United Kingdom. Middle earners pay more income tax and more council tax per higher-banded property, and the large business supplement is twice the rate applicable in England. It is little wonder that Scotland has only narrowly avoided falling back into recession at a time when the UK economy is growing at a healthy rate.

I turn to the legislation that we are considering, in which there is much to welcome. My constituents will be happy with the provisions designed to crack down on aggressive tax measures, particularly the changes in part 4 that will prevent individuals from using artificial schemes to avoid paying the tax they owe. Those measures include new penalties for those who design or enable tax avoidance schemes that are later defeated by HMRC, building on the £160 billion in additional tax revenues that it has secured since 2010.

I think the time is right to abolish permanent non-dom status. It is only fair that those who have lived here for a considerable time pay tax in the same way as UK residents do. The idea that a person can move and live here for 40 years, or even be born here, and avoid certain taxes is a ridiculous way of exploiting our tax regime, and I welcome the steps to change that. I am also pleased with the introduction of a simplified corporation tax deduction for companies that make contributions to grassroots sports. For recognised sport governing bodies, the deduction will be unlimited. I know of a number of small and medium-sized businesses in the Scottish borders that will be encouraged by the measure to contribute to local sports teams.

As a Member representing a population with an above-average number of pensioners, I am encouraged by the introduction in clause 3 of a new income tax exemption to cover the first £500 of pensions advice provided to an employee. That reflects the fact that pensioners have been given greater freedom by the Conservative Government to spend their pension fund, but that with that extra freedom some might benefit from greater advice. The provision will make seeking that advice more affordable and encourage employers to offer it to their staff.

There is also a range of measures designed to make our tax system fairer for all taxpayers. Clauses 5, 7 and 8 tighten the rules over termination payments, the recycling of pension savings and incomes paid through dividends. Governments need to be responsible to all taxpayers, so it is correct to make changes that might be unpopular with the few for the benefit of the many. The measures to progress the Making Tax Digital initiative in clauses 60 to 62 are common-sense in this day and age. I am generally supportive of the Making Tax Digital programme, as well as the decision by the UK Government to slow down the pace of implementing these changes.

I am pleased that the Bill will put in place exemptions for businesses that cannot meet the requirements due to their geographical location, and I hope that the regulations will be drafted widely on this point. In my own area of the Scottish Borders, too many businesses suffer from unreliable internet connections, and I would not want them to be penalised because of local infrastructure issues. By closing the tax gap further and making taxation fairer, we will boost the nation’s tax revenues—not by hiking up taxes like the Opposition parties want us to, but simply by ensuring that people pay what they ought and are due to pay.

I conclude by welcoming the Bill, and I look forward to supporting further measures to make the economy of Scotland, and of all the United Kingdom, stronger and more prosperous.