Finance Bill (Second sitting)

Kirsty Blackman Excerpts

Thursday 30th June 2016 Public Bill Committees

[Mr Gauke]

The clause makes changes to exclude all remaining energy-generation activities from the tax advantage venture capital schemes, thereby ensuring that the schemes continue to be well targeted towards high-risk companies and that the tax reliefs are in keeping with the original policy intent.

The venture capital schemes offer generous tax reliefs to encourage investment in small and growing higher- risk companies that cannot otherwise access finance. In recent years, there has been a significant increase in tax-advantaged investment in energy-generation companies. Such activities are generally lower risk, with predictable, reliable and regular income streams. The Government have previously made changes to exclude from the schemes those companies that have benefited from guaranteed income streams for the generation of energy. However, those exclusions have resulted in investment shifting to other forms of energy generation, rather than to the higher-risk investment that the schemes are intended to support. The changes made by this clause will ensure that the Government remain consistent in their approach by keeping the venture capital schemes targeted at higher-risk companies.

The clause will exclude all forms of energy generation from qualifying for the venture capital schemes, including the seed enterprise scheme, the enterprise investment scheme and venture capital trusts. The Government also intend to apply the exclusions to the social investment tax relief once it is enlarged. The measure is expected to yield £95 million annually from 2016-17 onwards, helping the Government to deliver on their commitment to tackle the budget deficit.

Amendment 135 would require a report to be published on the impact of the exclusion of energy generation from the venture capital schemes on the renewable energy sector, community energy projects and the energy sector. Such a report would need to be published within one year of the Bill becoming an Act. The Government provide a range of support for renewable energy, and that support will double over this Parliament, reaching more than £10 billion in 2020-21. That represents a sixfold increase in spend since 2011-12. The relief schemes I have mentioned serve a different purpose: to help smaller, higher-risk companies across a range of sectors to access the investment they need to grow and create jobs.

Energy generation is typically a lower-risk activity for which investment can be secured without tax relief. Allowing it to qualify for tax relief diverts investment away from the companies that need it most. In addition, from a practical perspective, companies that raised investment for the purpose of energy generation before its exclusion have up to two years to spend the money. A report in just one year’s time would therefore serve little purpose.

A report as suggested by the amendment would have little value from a practical point of view. The exclusion of energy from the venture capital schemes is a principled decision based on the lower risk profile of the activity. The Government therefore believe the amendment is unnecessary, and I hope it will be withdrawn.

[Kirsty Blackman (Aberdeen North) (SNP)]

With all the changes the Government are making to the support of energy policy and with the lack of a pot 1—established technologies—contracts for difference round in the near future, does the Minister not feel that projects such as onshore wind are much less likely? This measure has to be taken in the round. It may cause problems because the Government are doing many other things that go against, in particular, onshore wind generation.

[Mr Gauke]

Where I agree with the hon. Lady is that these things should be looked at in the round. The Government are committed to supporting the investment and innovation needed to achieve a cost-effective transition to a low-carbon economy while ensuring security of energy supply and avoiding unnecessary burdens on businesses and households. We are making great strides towards our commitments, with emissions down 30% since 1990. Support for renewables from taxpayers and bill payers will double over this Parliament, reaching more than £10 billion in 2020-21, as I mentioned. That is a sixfold increase in spend since 2011-12. We have more than trebled our renewable electricity capacity since 2010. In the round, the Government’s record is strong.

We are committed to supporting small and growing businesses. The presence of low-risk, asset-backed investments such as those described today crowds out investment in higher-risk propositions. It is right that the Government act to exclude such investors.

Finance Bill

Kirsty Blackman Excerpts

Tuesday 28th June 2016 Commons Chamber

As I have said, I welcome the signal that we are reducing the corporation tax rate further, but if we are to help our economy grow over the next few years, we need to send some even stronger signals. There is more that we can do to our corporation tax code over the next four years than this sector is currently planning.

[Kirsty Blackman (Aberdeen North) (SNP)]

I specifically want to talk about clause 43 in relation to vaccine breakthrough. I have issues with a couple of the Government’s proposals. First, it has been made clear that this measure costs the Government very little. In terms of foreign projections, the removal of the relief does not increase the Treasury’s take by a vast amount.

The explanatory notes on this were incredibly helpful and I really appreciated them, but they seem to be missing a few things. First, they say that only 10 firms claimed the relief, but they do not make it clear how many firms research and develop vaccines. After my slightly rudimentary research, I could find only about 10 firms that research and develop vaccines, which means that all of them claim the relief. Therefore, if I am correct, the uptake is quite high. That could be why companies are choosing to research and develop vaccines. I would appreciate it if the Minister confirmed how many companies research and develop these things. If he does not have that information today, perhaps he could write to me with any details he has on that.

The explanatory notes mention the Ross Fund. I appreciate that the fund is a good thing and that it is good that the Government are financially supporting the development of vaccines, but it seems to me that the fund does not necessarily cover everything that the vaccine relief previously covered. The Ross Fund covers the following: antimicrobial resistance, which is a really important thing to be funding in this day and age; diseases with epidemic potential, which, given what happened with Ebola, is a really important area to be funding; and neglected tropical diseases, which is a fabulous area for the Government to support. It is really important to be putting money into the various areas of research that have previously been neglected.

From the research that I have, it seems that vaccine research relief covers HIV/AIDS, whereas the Ross Fund does not. I would really appreciate it if the Government told whether HIV/AIDS research now falls through a gap, because it is an area that we need to continue to research and for which we do not currently have any vaccine or cure. I do not want it to get lost because companies are no longer able to claim aid or funding for such research.

I will not speak at too much length, as my concerns are around clause 43 and the fact that, although helpful, the explanatory notes left me with quite a few questions.

[David Rutley (Macclesfield) (Con)]

I want to add my support to clause 42, notwithstanding the important points made by my hon. Friend the Member for Amber Valley (Nigel Mills), who set out the need for further thinking, perhaps, in the light of the Brexit vote. I was on a different side of the debate from him—only marginally—because I thought that there were concerns about economic risk, but there are certainly opportunities ahead, as well.

We need to ensure that we are ready to explore and realise those opportunities and the Government are absolutely committed to doing that. I hope that the Opposition are as well. It seems that the hon. Member for Wolverhampton South West (Rob Marris) is indicating that. We are up for that. As a result, I am perplexed about why clause 42 is not being supported by the Opposition. Such measures were vital when the proposals were first set out, and it is now even more important to put out a clear signal that we are open for business, that we understand business, that we want business to continue to come to the UK and that we want our exporters to thrive and flourish.

The corporation tax level is an important signal and an important driver in that regard. It is noticeable that the Federation of Small Businesses stated at the time of the announcement that it saw clause 42 as an important statement of intent that will provide a boost for affected firms. Small businesses are of course the backbone of our economy, but it is clear that the clause is an important signal for bigger businesses, too. It helps to illustrate and underline that Britain is open for business.

Given the decision made by the public, which I fully respect, it will be very important that we maintain the flow and increase the levels of foreign direct investment. I thought we were exposed in that area for a period of time, and I think that that exposure is still real, but we are currently the biggest destination in Europe for foreign direct investment. We have seen the biggest increase in FDI in projects in the north-west and I want to work with the Government and whichever party is around to ensure that we continue to see that flow. I want to ensure that the success we see in the country continues and that the northern powerhouse can fulfil its full potential. Key initiatives such as the life sciences corridor in Cheshire will require clear signals to businesses in the UK and abroad that we are open and want to move further forward, which is why I will support clause 42 when we vote, as I understand we will.

Finance Bill

Kirsty Blackman Excerpts

Monday 27th June 2016 Commons Chamber

[Mr Gauke]

Thank you, Mrs Laing. I am grateful for those remarks.

The measures I will outline ensure the simple, clear and fair tax treatment of employment income and benefits, strengthen incentives to choose the cleanest cars and vans, and ensure that those who have used artificial arrangements to avoid paying tax pay their fair share. Given the number of measures selected for debate, I will briefly set out how I will speak on them today. I will first discuss clauses 8 to 11, concerning company car taxation and the van benefit charge. I will then outline clause 7 and clauses 12 to 17, which address tax treatment of income and certain benefits. Finally, I will outline clause 18, which addresses disguised remuneration schemes.

I turn first to clauses 8 to 11. Clause 8 will increase the appropriate percentage for conventionally fuelled cars by three percentage points in 2019-20; it will also widen the tax advantage of ultra-low emission cars over conventionally fuelled cars in 2019-20 compared with previously announced plans. As a result of the changes, in 2019-20 a basic rate taxpayer driving a popular ultra-low emission company car will be £113 better off. Clause 9 makes a minor technical update to ensure the legislation works as is intended in 2017-18 and 2018-19. The update applies to a small number of rare company cars. It is estimated that exposure to nitrogen dioxide is linked with 23,500 deaths annually in the UK, costing approximately £13.3 billion.

As was announced in the autumn statement in 2015, clause 10 retains the three percentage point supplement for diesel company cars until 2021. That will support the UK’s transition from diesel cars to cleaner, zero and ultra-low emission cars. As a result, a basic rate taxpayer with an average ultra-low emission company car will save an additional £150 in 2016-17, compared with an employee who has an average diesel company car.

Clause 11 retains the van benefit charge for zero-emission vans at 20% of the rate paid by conventionally fuelled vans for 2016-17 and 2017-18, rather than increasing it to 40% and 60% as currently planned. That means that a basic rate taxpayer who drives a zero-emission van will save £126 in 2016-17 and £258 in 2017-18. Together, clauses 8 to 11 will incentivise business and employees to take up the cleanest cars and vans. That will help to ensure that the market for those new technologies becomes established in the UK, and to support the UK’s carbon emission and air-quality targets.

In anticipation of what we will hear from the Opposition, let me turn to amendments 2 and 3 to clause 10. The amendments would require the exemption of diesel cars from paying the supplement if they achieve the same level of nitrogen dioxide emissions as petrol cars. I appreciate that hon. Members want to incentivise people to purchase the cleanest cars, but the amendments would only introduce confusion and uncertainty. They are not linked to the wider regulatory programme to achieve the latest air quality standards, even when cars are driven on our roads. Clause 10 retains the supplement until 2021 when those new standards will be mandatory for all new cars. That approach is transparent and easy to understand, and it will give consumers confidence that all new diesel cars are comparable to petrol cars. Our approach incentivises people to purchase the cleanest cars, and in anticipation of what will be said later, I hope that Labour Members will not press the amendments to a vote.

Let me consider those clauses that clarify and simplify the tax treatment of income and certain benefits, and ensure fairness in the tax system. Clause 7 will clarify how the cash equivalents of certain taxable benefits are calculated, and ensure that fair bargain does not apply to those taxable benefits in kind where the level of computing the value of the benefit is set out in statute. The Government have made minor technical changes in amendments 22 to 26, which ensure that the legislation works as intended.

Clause 12 and schedule 2 will provide clarity that all income from sporting testimonials for an employed or previously employed sportsperson will be taxable. However, we are aware that careers in sport can be short, so we have also introduced an exemption for the first £100,000 of income received from a sporting testimonial that is not contractual or customary. The Government believe that that is a fair compromise, and the vast majority of employed sportspersons who have testimonials will not be impacted. Clause 13 introduces a statutory exemption for certain benefits costing up to £50 that employers provide to their employees. That will simplify the tax treatment of those benefits and reduce the administrative burden for employers. To ensure that the exemption is not misused, a £300 annual cap will apply in certain circumstances. That sensible and simplifying measure will reduce burdens on employers and HMRC alike.

Clause 14 will ensure that no individual or business can obtain an unfair tax advantage through claiming tax relief on home-to-work travel and subsistence expenses. It is an established principle in the UK that people are not able to claim tax relief on the cost of ordinary commuting, and the vast majority of workers are not able to do so. Individuals who are engaged through intermediaries—such as umbrella companies and their employers—currently benefit from that relief and the cost of commuting from home to work, simply because of the way they are engaged to work.

[Kirsty Blackman (Aberdeen North) (SNP)]

Has the Minister considered whether this measure will have a disproportionate impact on rural communities where travel is much more expensive and sometimes an overnight stay is necessary when undertaking those roles?

[Mr Gauke]

I will say a little more about clause 14, but I believe that this is a matter of fairness. For the vast majority of people, home-to-work costs do not have tax relief, and it is right to apply the same rules across the board. If there is a difference in treatment just because an arrangement is made through an umbrella company or other form of intermediary, clause 14 will put those workers on the same terms as everybody else. That underpins the Government’s commitment to ensure that the tax system is fair and treats all individuals who are doing the same thing in the same way.

--- Later in debate ---

[Kelvin Hopkins]

My hon. Friend suggests that my proposal is Stalinist, but we are talking about a world in which we had several splendid democratically elected Labour Governments after the second world war that did wonderful things. Nobody would call them Stalinist. They submitted themselves to the electorate every five years and were sometimes defeated—sometimes even in this House—so I do not think “Stalinist” is the right word.

I do think, however, that there should be a bigger role for the public sector in regulating employment, making sure that people are properly paid and securely employed, even if they are temporary staff, that taxes are fully paid and that private sector agencies do not rip off both the public purse and employees. I will leave that suggestion with my hon. Friend. I hope that he will bring forward even more radical proposals along the lines that I have suggested.

[Kirsty Blackman]

I shall be brief, as I know nobody wants a lengthy debate tonight. I have a couple of specific points to make about reviewing the income tax treatment of workers who provide services through intermediaries. We are asking for a review. I understand the Government’s point that they feel that their approach is sensible for the majority of workers and that it is levelling the playing field for the majority of people, but there will be unintended consequences on specific issues and in specific areas, and they are going to be a major problem.

We have mentioned that this will have a disproportionate impact on rural communities. That is partly because of geography, as those communities are further away and it is more difficult for people to make cheap travel arrangements to go there and for people to find reasonably priced overnight accommodation. That will have a disproportionate financial impact. We do not want specialist contractors to choose not to go to a rural community on the basis that it will disproportionately cost them money, as that will mean our rural communities will lose out; they will not have the ability to get whatever it is that needs to be done in that community because the contractor will choose to go somewhere cheaper. That is a major issue, particularly in the oil industry, as has been said, and in the whisky industry. The whisky industry may have specialist contractors that need to go to rural locations in order to do things, and we do not want those areas to be disproportionately affected.

--- Later in debate ---

[Rob Marris]

Some of those lower-paid workers may be working for umbrella companies, and a difference between the wording in new clause 3 and in new clause 1 is that Labour’s new clause 3 mentions umbrella companies. New clause 1 refers to “different types of worker”. Does the hon. Lady envisage that concept as including those who are engaged through intermediary or umbrella companies?

[Kirsty Blackman]

Absolutely we do. When we talk about “intermediaries” and “different types of worker”, we mean all those who will be impacted by this change in the taxation measures.

[Mr Gauke]

I am grateful for the various points made in this debate. I will not repeat everything I said in my opening remarks, but I will try to address the questions raised, and we have had plenty of those. Perhaps I should begin by saying how pleased I was to see the hon. Member for Wolverhampton South West (Rob Marris) join us, as one never knows these days who will be on the Labour Front Bench. Given the considerable work that he clearly put into his speech—not forgetting the considerable work put in by Imogen Watson—it would have been a great pity were he not to have been on the Front Bench to ask those questions, so I am delighted to see him.

--- Later in debate ---

The Government are tinkering around the edges of existing climate change policy without a clear strategy for how to meet our targets agreed on the world stage. If we are to have any chance of meeting the said targets, we simply must take more radical action, as evidenced in other nations across the world. The Opposition do not necessarily oppose scrapping the carbon reduction commitment or increasing the rates of the climate change levy, if doing so will be effective in reducing emissions. However, we remain to be convinced that that will be effective, and we will therefore push for a proper assessment from the Government before we support the measure in full. I therefore urge hon. Members to support amendment 183.

[Kirsty Blackman]

I rise to support amendment 183 on the changes to the climate change levy. The UK Government’s idea to have a climate change levy was admirable. It was introduced in 2001, and it has been a positive step. It is completely reasonable that companies should be made to think about their energy usage, and the best way to do that is to tax them on it. The hon. Member for Salford and Eccles (Rebecca Long Bailey) made a wide-ranging speech on a series of matters, some of which I was going to speak about, so I will curtail my speech somewhat.

Although reducing companies’ energy consumption and usage is a great idea, it fails to take into account the fact that some methods of generating electricity are better than others, particularly in terms of climate change. We cannot tax energy usage across the board given that energy generated from, say, onshore wind is much cleaner and better than energy generated from, say, a coal-fired power station. Those two things are very different, and it is completely reasonable to have variable tax rates for those two things.

The hon. Lady spoke about some of the impacts that the Government’s energy policy is having on low-carbon energy. This Government do not have a good record on supporting low-carbon energy. Their support for nuclear has been widely reported, but the situation is very difficult for companies that are innovating in providing other forms of low-carbon energy in this ever-changing climate and in the UK Government’s current policy framework.

It was announced in June that the Scottish Government had managed to meet their target for reducing greenhouse gas emissions by 2014. The target was a reduction of 42%, and it happened six years early. That was an excellent achievement for the Scottish Government and for Scotland as a whole, with everyone working together to reach it. However, it will be very difficult for us to keep up that level of achievement with the UK Government’s current energy policy. For example, there is no clarity about when there will be a new pot 1 for contracts for difference. That pot is for onshore wind, which is very important. It is very clear that onshore wind is an established technology for generating electricity cleanly, and the UK Government need to provide greater clarity about when the next CFD round for it will be.

With Brexit, Scotland will have a major problem in that the funding for low-carbon energy and low-carbon energy projects, particularly the groundbreaking ones, has come from the EU. I know that this is slightly outside the remit of this debate, but I would appreciate it if the UK Government looked at whether this funding will continue to be provided because we should continue to innovate in low-carbon energy in Scotland, which has massive natural resources.

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[Damian Hinds]

The climate change levy makes a significant contribution to the Exchequer’s revenues. It had been on a declining path, but with the changes that have come in, its path has been stabilised. It had been providing increasingly poor value for money, partly because a third of its value was going to generators overseas: that generation does not contribute to UK targets, and quite often benefits from subsidies and other benefits at home.

There was also only indirect support for renewables. This is a really important point that goes to the heart of what the hon. Members for Aberdeen North (Kirsty Blackman) and for Coatbridge, Chryston and Bellshill (Philip Boswell) were saying. The renewables obligation and contracts for difference are much more effective at providing direct support, at a higher level than the £5.54 per hour, to bring on the generation that we need.

The success of the deployment of renewables in this country paradoxically has an adverse impact on the effectiveness of the CCL exemption, such that by the early 2020s it would not be effective in stimulating new capacity to come on stream. Its value to generators would be declining, because the supply of renewables and therefore of the levy exemption certificates would exceed in volume the total potential demand from eligible customers in business and the public sector.

[Kirsty Blackman]

If the Minister is saying that the exemption will not be effective after 2020, does he concede that it would therefore be effective to keep it in place now?

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Increasing the standard rate of IPT by 0.5% will raise revenue to invest in flood defence and resilience, which will enable us better to protect against floods such as those we saw last winter. This clause should therefore stand part of the Bill.

[Kirsty Blackman]

I appreciate the chance to deal with insurance premium tax. Reducing tax was raised by the SNP at some length last year, when the Government increased it by about 3.5%, from 6% to 9.5%. We were a bit concerned that this amounted to an incredible hike with very little warning, possibly setting a precedent.

I want to make it clear that we are not against spending additional money on flood defences. Given the climate change issues that we face and the devastating impact of floods on communities, we think that is a good idea and we completely understand why the UK Government are choosing to spend money on it. My issue is that raising insurance premium tax might be the wrong way of doing so—I do not want people to be discouraged from taking out insurance. The Minister said that the clause might mean only a minor change in people’s bills, but I am concerned less about the 0.5% increase than about the precedent that has been set by what is happening this year and what happened last year. My main fear is that the UK Government will decide on a further increase.

This morning the Chancellor said that the UK economy was affected by the fact that the markets were currently volatile, and that that volatility would continue. In such circumstances, we do not want people to worry about their future finances, and not to take out insurance because the economy is uncertain and they do not know how the financial situation will develop. It is necessary to have home insurance, just as it is necessary to have motor insurance, but premiums have increased significantly, mostly because of problems caused by climate change. Although the average increase will be £1, people who have been hit by flooding are having to pay massive premiums, and the 0.5% increase is likely to have a disproportionate impact on them.

We do not intend to press the clause to a vote, because we do not want Members to have to stay here longer than they have to, but I appreciate the opportunity to speak about it. Let me end by emphasising that our concern relates to the longer term. Although 0.5% is a fairly minor hike, if the amount continues to rise year on year there will be an additional problem for household budgets, and a negative impact every year.

[Richard Burgon (Leeds East) (Lab)]

I am pleased to be able to add my contribution to those already made by Members on both sides of the Committee.

As my hon. Friend the shadow Financial Secretary has said, the Bill is rooted in unfairness, and we fear that this tax change may engender further unfairness if it is passed on to customers. Clause 129 increases the standard rate of insurance premium tax from 9.5% to 10%, initially from this October, and all premiums, including those in the special accounting scheme, will be subject to it from February 2017. The Chancellor also announced in the Budget that the funds generated by the increase would be allocated to increased spending on flood defences. What concerns us is how this will affect the insurance market, how it will affect the millions of customers who need access to insurance, and how effectively it will deliver the flood defences that we so desperately need.

This is the third increase in insurance premium tax under the current Chancellor, following increases in 2011 and in last year’s Finance Bill. The first increase was from 5% to 6%, a comparative leap of 20%. Last year’s increase was from 6% to 9.5%, and there was then a 58% leap. This year’s 0.5% increase to 10% is therefore comparatively smaller. Some insurance companies have welcomed the fact that it was not larger, but it follows hot on the heels of the previous change. The frequency of increases is picking up, and that frequency is causing concern.

In March, Ben Flockton of PricewaterhouseCoopers said that of

“concern to many insurers is the prospect of gradual but frequent rate rises.”

David Jordorson, of the Association of British Insurers, said recently that the association had urged

“HM Treasury and HMRC to revisit the arrangements for how rises are implemented”

in order to

“put members on a clearer footing when future rises come”.

Perhaps the Minister will put us straight on whether the Government expect to hold the current rate where it is after the Finance Bill, for the next five years or for just one year—or will we see a further change in the autumn statement? I am sure that the industry, consumer groups and policyholders will be hanging on to our words in this debate.

The latest increase brings the standard rate of the tax up to a total of 10%, which is a doubling—a 100% increase —since 2011. Cumulatively, these three rate rises being passed on to customers would have a real impact on disposable incomes and on policy uptake. We understand that this change will have an impact on 26 million drivers and 20 million households. It will also hit 3 million pet policies and 3 million private medical policies. Our concern is that the industry will pass on this cost to its customers. Moneysavingexpert.com put it bluntly when it said:

“Millions of households and motorists will pay more...a further rise in the cost of pet, car, mobile, contents, buildings and private medical insurance”.

James Dalton, director of general insurance policy at the Association of British Insurers, said:

“Another increase in Insurance Premium Tax would be a raid on the responsible that laser-targets those who do the right thing. It will hit those on low incomes and increase the risk that some people reduce their cover or stop insuring altogether.”

Chas Roy-Chowdhury of the Association of Chartered Certified Accountants said that

“the rise will affect anyone who has home or car insurance wherever they live.”

More recently, in the last few weeks, the AA has published its latest British insurance premium index, covering the first few months of 2016. It found that the average quoted “shop-around” premium—that is, the average of the five cheapest quotes for each customer in a variety of scenarios—had jumped by 5.4% to £114.52 a year at the end of March 2016. So the emerging evidence is of an increase in cost of insurance to the customer.

I will come to the issue of flood defences later, but the Chancellor stated in his Budget speech that this measure was also intended to help to fund the cost of flood defences. I want to raise the issue of flood insurance, including that provided through the Flood Re scheme, which is already increasing costs for customers. Of course we on these Benches support the introduction of Flood Re, but insurers are having to pay a total of £180 million to Flood Re, and that is being passed on. In a survey by the Financial Times, seven out of the 10 largest home insurers said they would pass all or some of the levy directly to customers. I understand that 350,000 properties are currently expected to benefit. We believe it is vital that those in flood-prone areas can access the insurance they need, particularly as the instances of flooding as a result of climate change appear to be on the increase.

What will be the impact of the insurance premium tax and the Flood Re levy being passed on to customers? Our concern is the effect on take-up for those on the margins—that is, those hit by other attacks on income in this Finance Bill, in the Chancellor's Budget and, who knows, in his emergency Budget yet to come, as well as those hit by successive cuts to pay, pensions and protection of welfare payments over the past six years. The Government’s policy paper relating to the change in the Bill states:

“The measure is expected to have a small impact on individuals and households purchasing insurance which is not exempt from IPT, if insurers choose to pass on the IPT rate rise to customers”.

I would like to take this opportunity to ask the Minister what the term “small impact” means. Which individuals and households will be impacted upon? What discussions did the Treasury hold on the likelihood of the increase being passed on to customers, both with insurance providers and with consumer groups?

The Government’s policy paper also says that no equalities impacts have been identified. The Association of British Insurers has highlighted the fact that many families face insurance bills around £100 higher as a result of last year’s increase. We are concerned that this is a tax burden that will ultimately be paid by ordinary people taking the responsible approach and insuring their homes and motor vehicles. What will it mean for those on lower incomes? Will younger or older drivers be disproportionately adversely affected? How will the change’s impact be monitored? Our worry is about the impact of rising costs, contributing to our overall concern about the Finance Bill as a whole. That is why, when the last change to insurance premium tax was discussed in the previous Finance Bill just a few months ago, my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) tabled an amendment.

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 19th April 2016 Commons Chamber

[Mr Osborne]

The lifetime ISA will be a very popular and successful new saving product precisely because it does not require people to choose between saving for a home or saving for their retirement; they can do both. We are also now looking at ways for people to draw on their savings during their lifetime for particular emergencies, or for when they need bits of money, like they do in the United States with the 401(k) scheme. The lifetime ISA will be a radically new savings product, and it will do what we need to do in this country, which is build a savings culture.

[Kirsty Blackman (Aberdeen North) (SNP)]

3. What assessment he has made of recent trends in the level of productivity; and what steps he is taking to increase productivity.

[The Chief Secretary to the Treasury (Greg Hands)]

Productivity performance in the UK has been weak since the financial crisis, as it has been in all developed countries. The Government published their productivity plan “Fixing the foundations” last year. At the Budget, we announced additional reductions in corporation tax and business rates to incentivise investment, and gave the green light to infrastructure projects such as Crossrail 2 and High Speed 3.

[Kirsty Blackman]

The Scottish National party has continually argued that the UK economy is in dire need of investment to stimulate productivity. Despite the productivity plan, the Chancellor seems determined to persevere with policies that stifle productivity. What policies have the UK Government enacted that will encourage an increase in productivity?

[Greg Hands]

The hon. Lady is right in saying that there is an issue in relation to productivity in this country, but there is an issue across all major developed economies. Over the past year, productivity growth in this country was about 1%, which compares with 0.9% across the G7. On specific measures, we have established the National Infrastructure Commission, protected science funding at the Budget and spending review, introduced the Housing and Planning Bill, announced the apprenticeship levy, which is coming in, and announced a £100 billion infrastructure programme over the course of this Parliament.

Finance (No. 2) Bill

Kirsty Blackman Excerpts

Carry-over motion: House of Commons
Monday 11th April 2016 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to speak in this Second Reading debate. I am delighted that you are back in the Chair, Mr Speaker, not least because I have written “Mr Speaker” throughout my speech and I get totally confused if a Deputy Speaker is in the Chair.

[Mr Speaker]

It is good to know that one has one’s uses.

[Kirsty Blackman]

I am sure that they are many and varied, Mr Speaker.

As a relative newbie to Parliament, I am fascinated by the fact that this House manages to have incredibly complicated and incredibly cumbersome processes and hoops to jump through in order to get legislation through, while at the same time managing to ensure that those processes are entirely opaque and provide the general public with the smallest possible amount of useful information.

I want to speak about a number of things: oil and gas—you will not be in any way surprised by that, Mr Speaker; the travel and subsistence changes, for those in rural areas in particular; and the savings changes, which the hon. Member for Leeds West (Rachel Reeves) mentioned. The UK Government are attempting to undertake a savings swizz. This is not a Budget for hard-working people and young people at all. Increasing the level of tax-free savings will help only those who can afford to save thousands of pounds every year. Most hard-working people will not be helped by this. Just because somebody earns a high income, it does not necessarily mean that they are hard-working. A lot of hard-working people earn pretty low incomes.

Folk who are earning the Chancellor’s pretendy living wage, which is not recognised as being enough to live on, struggle to make it to the end of the month, let alone to have spare money to save for the future. The help to save scheme included in the Budget is welcome, but folk working the minimum 16 hours a week on the pretendy living wage will be earning only £500 a month, and they are hardly likely to be able to spend 10% of that income on savings rather than on immediate concerns.

The tax measures in this Finance Bill disproportionately reward unearned income, and they continue to ensure that tax avoidance is not illegal—only immoral. Many of my constituents find themselves living from pay cheque to pay cheque, and they cannot imagine having the comfort enjoyed by those with six-figure salaries, large savings and stocks and shares—in much the same way, I presume, as those in charge of the Finance Bill have no idea what is like to exist on a low income with a lack of long-term financial security and the absolute necessity of reliance on the state. Some people are unable to have a cache in the bank to fall back on. Rather than all being in this together, too many Members of this House cannot comprehend the real world that most of my constituents live in, and they could do with being given a reality check before they are allowed to make tax policy. The changes to ISAs and the uplift are hardly useful to anyone. As Opposition Members have said, ISAs disproportionately benefit those earning above £150,000 a year. That is not helpful for hard-working, low-income families or for young people.

I am delighted that repetition is encouraged in this place, because I am going to talk once again about oil and gas. That is quite useful, because I can recycle this speech fairly regularly—[Interruption.] Yes, I am also recycling the speech made by my hon. Friend the Member for Aberdeen South (Callum McCaig). Oil and gas are vital for Aberdeen and for Scotland as a whole. Some of the measures in the Finance Bill go a little way towards easing the situation for oil and gas companies in the current economic climate. Nobody quite knows when the oil price is going to go back up, or what level it will reach when it finally does so. Oil prices are completely unpredictable. The UK Government need to show that they are committed to the future of the industry in the North sea in order to ensure investor confidence.

There is positive movement in the reduction of the supplementary charge from 20% to 10%, but oil and gas companies will still pay significantly more than most companies. The oil and gas industry is vital to Scotland, particularly to the north-east of Scotland and my city of Aberdeen. Back in 2014, Sir Ian Wood published the Wood report. The Energy Bill, which is currently in ping-pong and will be discussed again ben the hoose, tomorrow, cements the position of the Oil and Gas Authority in legislation. The principal objective of the OGA, which arose from the Wood report, is to maximise the economic recovery of UK offshore oil and gas resources. That can only happen if the UK Government seriously consider the tax regime for companies extracting oil and gas in the UK continental shelf.

The tax regime has been built up over the last half century, with measures being added and taken away as the Government of the day make changes to the decisions of Governments past—or, in some cases, to their own decisions. Now that the UKCS can be considered a mature basin—in fact, some are calling it super-mature—I suggest that now is the time to look afresh at the fiscal measures in relation to the taxation of the oil and gas industry. Until the UK Government can commit to doing so, some issues need to be looked at as a matter of urgency. If we are doing only minor overhauls, rather than a major overhaul, these are the key issues for us.

Enhanced oil recovery is mentioned in the OGA corporate plan for 2016 to 2021. The OGA intends to issue an enhanced oil recovery strategy to the industry in the first half of this year. If the UK Government took action so that the activity of enhanced oil recovery could count towards a tax allowance to offset against income, rather than count as operational expenditure, I suggest that the OGA’s strategy could easily be more ambitious, but still achievable. Enhanced oil recovery is very important for the UKCS given its super-mature situation. We really need to work in different and new ways to get out the oil, which is much more difficult and costly, so we would benefit from a fresh look at the tax regime in relation to how that spend is considered.

Finally on specific issues relating to the offshore oil and gas industry, I welcome the fact that HMRC will produce updated guidance notes on the decommissioning allowance. It is very important, particularly for new entrants to the industry, to have the ability to take on such assets in the North sea and exploit them for a longer period than a big player perhaps would, so I am really pleased that that is coming in. On decommissioning terms, we suggested during the passage of the Energy Bill that tax incentives and allowances should be put in place in relation to decommissioning in the UK, so that as much as possible takes place in the UK and benefits UK companies. It is really important that the UK becomes very good at decommissioning, because we can then export that expertise. I would very much appreciate it if the Government considered incentivising UK spend in whatever ways are possible. We will talk about that during the next stage of the Finance Bill.

To move on from oil and gas to a more general point, I want to flag up issues about the Government’s proposal on the taxation of travel provided for those paid through intermediaries. There is no question but that this change will hit rural communities disproportionately. It is perfectly legitimate and sometimes incredibly sensible to pay individuals as contractors or through intermediaries, but I suggest that the Government have not really thought this one through or have not grasped quite how rural some of these communities are. It can absolutely be necessary for people doing work in rural areas to stay overnight to fulfil a task that can in no way be done as part of a daily commute. I understand what the Government are trying to do on daily commutes, but that does not apply in such situations. For example, on some islands off the coast of Scotland, a locum doctor or relief teacher has to stay because there is no regular transport. Surely they should receive tax relief on their hotel stays: it is not a daily commute, but a necessary part of the job, particularly if they cannot possibly get home because there is no boat.

For communities such as Shetland in particular, where there is heavy reliance on oil and gas companies, that may have a significant negative impact. Due to the level of expertise and specialisation in oil and gas, many people in the industry are employed as contractors—disproportionately so—and removing the tax allowance that workers can claim when they stay overnight in Shetland on the way to a rig would be a bizarre way to support either the oil and gas industry or small rural communities. A specific case could be argued for our rural communities, many of which are not diverse in their employment, and such a change may have a significant and disproportionate negative impact on them.

The SNP is concerned both about the future of the oil and gas industry and about the fate of contractors in rural communities. When we go into Committee, we will table new clauses and amendments. The Chancellor has claimed that he is going to listen and learn. We will test him on that claim.

Budget Resolutions and Economic Situation

Kirsty Blackman Excerpts

Monday 21st March 2016 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

We were told earlier by the hon. Member for Telford (Lucy Allan) that this was a Budget for Telford. Well, it is certainly not a Budget for disabled people, young people or low-income families. It is not a Budget for businesses either. A Budget that projects a systematic reduction in funding for the Department for Business, Innovation and Skills cannot be good for businesses.

I am aware that I have a very short time, but I want to briefly mention city deals. The Aberdeen city deal, with £125 million from the UK Government, was announced earlier this year. That is roughly a third of what Manchester got per head, so I suggest that the UK Treasury is not particularly for Aberdeen either.

It has been suggested that the lifetime ISA, which was mentioned earlier, will be helpful for families, but the technicalities mean that it will not be helpful for anybody not looking either to buy a home or to support themselves in their retirement. For example, the money could not be withdrawn to support a couple who have just started having children.

As a Member for Aberdeen, I might be expected to talk about oil and gas, and we welcome the changes made, such as the effective abolition of the petroleum revenue tax and the halving of the supplementary charge, but there are still major issues for the oil and gas sector in relation to banking. It is difficult for companies to find finance at the moment. I am talking not about large infrastructure projects, for which there is the opportunity for loan guarantees, but about day-to-day business. Given the oil price just now, it is really tough for companies, and they are struggling to find finance. Some of the banks, although they are saying nice words to parliamentarians, are not actually lending to oil companies. They are pretty much saying, “Nah,” to supply chain companies, for example, which are the companies we need to be supporting just now.

I welcome the measures on decommissioning, but the UK Government will have to shell out about 62% of the cost of decommissioning oil rigs, so the longer it can be pushed out, the better for the UK Treasury, and this would be a benefit. It is very important that the UK, as one of the first fields to reach maturity, learns fast and becomes good at exporting that expertise. We need to support that.

[Patrick Grady (Glasgow North) (SNP)]

My hon. Friend commented on the lack of time available. Does that not speak to the wider concerns expressed several times, not just about the budgetary process but about the estimates process in the House? Does she agree that this is an urgent matter for the Procedure Committee to consider?

[Kirsty Blackman]

I thank my hon. Friend, who is a member of the Procedure Committee, for bringing that up, because it plays nicely into my next point, which is about how the Budget process works. We have had very little time for speeches today.

The Budget and the documentation we are provided with contain a total lack of clarity about Barnett consequentials in relation to the budget lines. For example, there are budget lines around cathedrals and cultural investment but no clarity, even in the statement of funding policy, about whether those things will generate Barnett consequentials and, if so, what the percentage of comparability is. It is very difficult for MPs to scrutinise these matters. The Tax Law Review Committee said:

“the House of Commons has neither the time nor the expertise nor, apparently, the inclination to undertake any systematic or effective examination of whatever tax rules the government of the day places before it for its approval”.

That is partly because of the complexity of the tax rules. Obviously, tax is levied on individuals personally, and then tax reliefs and benefits are provided to families, so it is quite a complex thing to work out. MPs lack the time—we have hardly any time to discuss it today—and the information to scrutinise the Budget effectively. This process needs to be improved as a matter of urgency.

House of Lords Reform

Kirsty Blackman Excerpts

Thursday 14th January 2016 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I am delighted to speak on behalf of the SNP in this Backbench Business debate on the House of Lords. I am pleased that my hon. Friend the Member for West Dunbartonshire (Martin John Docherty) secured the debate, although I am rather glad that he spoke some time ago, so that everyone could forget how brilliant his speech was by the time it came round to mine.

As has been mentioned, this issue is not something that gets people exercised. However, I would suggest that, in Scotland, membership of the SNP is not insubstantial. There are quite a few members of the SNP, and at the SNP conference in Aberdeen, at which there were 3,500 delegates, there was a huge cheer when it was suggested that the House of Lords should be abolished. This is something that gets members of the SNP excited. It is something that genuinely gets mentioned on the doorsteps when we knock on doors. It is perhaps not the first thing that comes up—absolutely not—but parliamentary and constitutional reform come up a lot on the doorsteps in Scotland.

I am particularly pleased that this debate follows the one on space policy, because this place—these Houses of Parliament—is in another world from the one I normally inhabit. I have spoken to people previously about why they should dislike the House of Lords. Within the SNP and among people I have spoken to, there is a visceral, immediate dislike of the House of Lords, but people should not dislike it because the Lords swan along in ermine robes; they should dislike it because of the level of power that the House of Lords has.

This is not a way to run a democracy. Nobody creating a democratic system afresh would come up with the undemocratic, unwieldy and unaccountable second Chamber that we have. The hon. Member for Cleethorpes (Martin Vickers) mentioned that the UK muddles along, and that is what has happened. It has happened with parliamentary reform and, as I will mention a little later, with reform of the Standing Orders in this place as well.

This is bicameralism at its worst. Of the 192 parliaments recognised by the Inter-Parliamentary Union, 77 are bicameral and only the UK, Belgium, Zimbabwe and Lesotho have hereditary legislators. Belgium does not really count, though, because its hereditary legislators are related to the monarch and do not vote on anything, so the wonderful United Kingdom—proud defender of democracy; the mother of parliaments—is a member of a very select group that allows landed gentry to make law for our countries. Zimbabwe and Lesotho and us—there is nothing good about this situation.

I would like to take Members back to 1997. It is some time ago now, and things have changed a fair bit since then: I was still in primary school, Hanson were topping the charts with “MMMBop” and the Labour party was popular in Scotland. The Labour manifesto in 1997 said:

“The House of Lords must be reformed…the right of hereditary peers to sit and vote in the House of Lords will be ended by statute.”

Despite a massive majority for the Labour party in 1997 and a clear manifesto commitment to rid our democratic system of hereditary peers, nearly 20 years on we still have 92 of them—92 Lords who are allowed to make legislation because their family owned land.

I was talking to a peer recently about hereditary peerages. The defence mentioned was that there was a hereditary peer who could trace her family back 400 years. The nature of humankind is that all our families can be traced back 400 years; otherwise, we would not be here. It is ridiculous, patronising and wrong to argue that a tithe paid to a monarch hundreds of years ago should qualify any individual to make legislation. The Conservative Government make all sorts of claims about working hard being the best way to get on in life and achieve a high-salary job, for example. There is a wilful downplaying of the inbuilt advantage accorded to those whose families owned large country estates. Many of those estates were won by force and held by oppression. There is not a meritocracy in these islands. Working hard does not necessarily get anyone anywhere; where they are born and who their family are does.

Having said that and made clear my absolute disagreement with any system that accords a higher level of importance to anyone simply because of an accident of birth, I want to make clear my absolute lack of regard for the appointments system for life peers. Cross-Bench peers tell me how rigorous the process is for appointing them. I agree that it is thorough and they have to make major commitments to how much time they are going to spend in the House of Lords. However, there is no compulsion on the Prime Minister to ensure that non-Cross-Bench peers—or even Cross-Bench peers, for that matter—are appointed in that way. There is also no limit on the size of the Chamber, and one of the best ways to receive an excellent salary for life is to donate money to either the Conservative or Labour parties and be appointed to the House of Lords.

I want to expand on what my hon. Friends the Members for North Ayrshire and Arran (Patricia Gibson), for Paisley and Renfrewshire North (Gavin Newlands) and for Glenrothes (Peter Grant) have said about former parliamentarians. Since 1997, 152 former parliamentarians have been ennobled. Twenty of them were given peerages within five years of losing an election to the House of Commons. So within five years of being rejected by the electorate, they were given a seat in the other House to make legislation for the people who had rejected them. It is a ridiculous situation.

The reforms enacted in 1999—which I admit were good and took us a step along the way, but nowhere near far enough—did have an effect on the behaviour of the House of Lords, including on the turnout figures. However, they also made the House of Lords more powerful, because peers felt that they had more of a right to be there and to make decisions about legislation, but that is not the case. The House of Lords is still an unelected legislature and it should not be making laws for this country. There is no accountability. Members of the public cannot access the Lords—they do not know who they are. Peers are out of touch. There is no compulsion on them to listen to people in the general community. What they learn about the general community is often garnered from newspapers, and we all know that they are not a true reflection of society.

The House of Lords is also massively lacking in diversity, which has been mentioned by various Members. Only 26% of peers are female, which is even worse than the figure for this place. The record in the House of Commons is deplorable, but the record in the House of Lords is much worse. In June 2015 there were more people who had been peers for more than 30 years than there were peers under the age of 50, and there were only two peers under 40 among the entire 800-odd Members of the House of Lords. That compares hugely unfavourably with elected politics in the UK. It does not constitute representative democracy.

The youngest age at which a current Member of the House of Lords received a life peerage was 32. Although I fundamentally disagree with appointments for life, it is bizarre that half of our legislature should exclude anyone who I would class as young. It is no wonder that, as a result, young people do not trust the democratic system. They look at this place and they see a bunch of old people who they cannot relate to. If we look at elected Members as a whole, we will see that we are still woefully unrepresentative.

As has been said, some peers, particularly Cross Benchers, work very hard, but that cannot be used to legitimise the existence of the second Chamber, which is incredibly expensive. Some Cross Benchers have been, and continue to be, very active in their areas of work and fields of expertise, but there is no check on that. As the hon. Member for South West Wiltshire (Dr Murrison) has said, people become ex-experts—their expertise goes away—very quickly.

The House of Commons has utterly failed to amend or rewrite the Parliament Acts to make any meaningful change to the House of Lords, which has not happened for the best part of 20 years. Actually, we have not made much change to the powers of the House of Lords since the Parliament Act 1911 and, subsequently, the Parliament Act 1949, which just tinkered with it. As I have said on previous occasions, I do not believe that the procedures of the House of Commons are fit for purpose. Given the opportunity, I would tear up the Standing Orders and start again, dramatically reducing the Executive privilege accorded to the Government of the day, thus requiring them to use their majority far more often.

The situation in the House of Lords is even worse. It is all done on the basis of convention. The Government got into such a pickle over tax credits because there is a convention—there is nothing in legislation—that the House of Lords does not vote on such things. On paper, the House of Lords is an incredibly powerful institution, and that is something we need to change.

The House of Lords is not a revising second Chamber. Nobody who makes the case for a revising second Chamber can hold up the House of Lords as the place that can revise legislation. It can still introduce primary legislation. It is not elected, but it can introduce legislation on behalf of the people of this country. It should not do so.

[Martin Vickers]

The hon. Lady is making a powerful speech. As she knows from mine, I share her ambition to do away with an unelected second Chamber. However, can she explain her party’s support for membership of the European Union, where real power lies with the unelected European Commission? The European Parliament is really a sideshow.

[Kirsty Blackman]

The hon. Gentleman makes an interesting point, which I am sure will be discussed at length during European debates. Today, however, we are discussing the House of Lords, which is something that we have the power to change. Members of this place could pass a new Parliament Act. Elected Members have the ability to make mass changes to the House of Lords, and we should make big changes to it.

[Peter Grant]

Does my hon. Friend agree that it would be beneficial to introduce some of the European Parliament and European Commission’s ways of working to this place? For example, the European Parliament has the power to sack the entire European Commission. Does she support giving the House of Commons the right to sack the entire House of Lords? I think that is what the hon. Member for Cleethorpes (Martin Vickers) was referring to.

--- Later in debate ---

[Kirsty Blackman]

I would be delighted if the House of Commons had the ability to sack the entire House of Lords. In fact, I think the Conservative Government would have been quite keen to sack the entire House of Lords earlier in the Session.

[Martin Vickers]

I just remind the hon. Lady and her colleagues that this Chamber has the power to sack the Government.

[Kirsty Blackman]

I am coming to the end of my speech, so I will now wrap up. The power of the House of Lords is dramatically greater than it should be. It has the ability to appoint people who have been rejected at the ballot box. People troop into that House rubbing their hands with glee at the untaxed £45,000 a year they can now earn. The expenses system and the payments system for the House of Lords—getting £300 day, which is classed as an allowance, and is not taxed—are abominable. That should not be happening.

The composition of the House of Lords is ridiculous. It is unrepresentative, and in no circumstances should it include hereditary peers and those appointed by religious organisations, whether from the Church of England or of any other religious organisation. I do not think there is any place for religious appointments in a legislative system. Lifetime appointments to any legislature are undemocratic. There are peers sitting there who have been peers for 70 years, which is an incredible length of time. Some of them are no longer active, but they still have the right to troop into the House and vote. How good is a peer at voting if they have been a peer for 70 years? They have a length of experience behind them—fair enough—but most people want to sit with their feet up and watch TV by the time they get to such an age. Appointments for high heijins and party donors are wrong and should not be happening.

The House of Lords is beyond reform. People have tried to reform it in the past, but it is still not an elected, accountable second Chamber. We need to abolish it.

--- Later in debate ---

[John Penrose]

That is one of the principles that underlie the support of the many people who are in favour of an increase in democratic legitimacy. With a democratically elected second Chamber, it is much, much harder for the forces of reaction and special interests to win through, because the antidote to most of those things is normally greater democratic involvement. So I think the hon. Lady’s question enclosed its own answer, if I can put it that way; I certainly support her point.

Our problem therefore is choosing—not if, but how. There are currently too many different forms of possible election that could be looked at. There is the alternative vote, for example, and dozens of different forms of proportional representation. I regularly get letters from people who are cleaving to one or more of dozens of different kinds of electoral system. I am not sure what the democratic consensus would be on which one would be right, but I know that without a democratic consensus on choosing one, we will not be able to win the argument and get it done.

My hon. Friend the Member for Beckenham (Bob Stewart) interestingly suggested something based on occupation rather than on geographical constituencies, and all these ideas are possible. They would all create alternative franchises that would not clash directly with the one used for this Chamber. Finding a non-clashing democratic mandate would be an advantage, but until such a thing can be done, we are inevitably on the back foot.

[Kirsty Blackman]

I hope the Minister is not saying that because it is so difficult, we should not do it. As the hon. Member for Cleethorpes (Martin Vickers) suggested, now might be a good time for this Conservative Government to think about taking this forward. If hardly any Members keen to maintain the House of Lords in its current form are willing to pitch up, it clearly means that there is an appetite for reform. Now is the time.

[John Penrose]

The hon. Lady made a series of powerful points, many of which I agreed with, but on that particular one I am respectfully going to disagree with her for a couple of reasons. We have heard from a number of different sides that the level of unprompted interest in the Dog and Duck in reform of the House of Lords is remarkably low. It might be quite high if we went along to the Bishops Bar, but that is probably the only bar in the entire country where that topic of conversation would come up naturally. Members of all parties are right to say that, when prompted, many people will agree that it is important to reform the Lords in some way. Without that prompt, however, it ranks a long way down people’s lists of priorities.

We need to form and forge a democratic consensus, but it is difficult for all of us to do so when the issue is low down the list of priorities because other things are more urgent, more immediate or loom larger. It would be wrong to overstate the appetite for reform and wrong to ignore the practical difficulties of achieving it. I do not want to assume that because something is desirable but not simple, it can therefore be wished for and produced with a wave of a magic wand. We all understand, as elected politicians, how hard this is, and we can all see the trail of failed attempts to make big reform changes. We have seen how difficult equally talented politicians, some of them extremely talented politicians, have found it.

That said, there is a possibility for smaller steps to be made. In the last Parliament, there was a series of small reforms. I do not want to let anyone get the impression that we think that small reforms are a substitute for more thoroughgoing things, but in many cases they represent progress in the right direction. It would wrong to let the best be the enemy of the good. When in the last Parliament, the House of Lords chose to change the rules on the retirement of its Members, this House agreed with it and it was a step in the right direction.

Many other issues are currently being discussed in the House of Lords, led by senior parliamentarians at that end of the building, including further reduction of the size of the House of Lords, looking at retirement ages and doing all sorts of other things. Those might not be to everybody’s taste as a complete answer—many certainly do not deal with the point about democratic legitimacy—but they are steps in the right direction, and I think we should encourage their Lordships to proceed with them. We must not be guilty of saying that just because it does not fulfil our perfect world scenario, we should not give it at least the time of day.

I encourage House of Lords Members as well as hon. Members here present and others elsewhere—anybody who is interested—to try to address the question of how to achieve greater democratic legitimacy. What kind of franchise can be chosen that will not clash with the franchise of this Chamber? What levels of powers do we think should be approved for the upper Chamber?

Incidentally, there has been some criticism of the Strathclyde review today. Let me gently suggest to those who are critical that, while they may wish that the review had a broader mandate, at its heart is the aim of making the primacy of the elected House apply. I hope that Members can at least agree that that is desirable. The outcome will of course depend on which of the options are followed, but the current formulation would move us towards a much more regularised and clearly defined system of powers between this House and the upper House. A series of options are being considered in respect of the length of stay of those who are currently in the upper House, under the existing system, along with such matters as retirement ages. All those things are vital, but if we are to have reform, I urge all Members who are present today to try to create a democratic debate, and perhaps form a democratic consensus, with the aim of reaching a conclusion.

I want to give the hon. Member for West Dunbartonshire a chance to sum up the debate for a couple of minutes—and perhaps to give us a little bit more Robbie Burns; I do not know—so I shall do something unusual for a politician, and sit down and keep quiet. I thank everyone who took part in the debate for their useful and thoughtful contributions. I should also respond to some of the comments made by the hon. Member for Glenrothes (Peter Grant), because he asked me particularly to do so. He made a number of specific suggestions about people who might or might not be appointed to the House of Lords. I will take that as a submission, and will relay it to those in the House of Lords so that they can consider it as part of their current deliberations.

I look forward to hearing the hon. Member for West Dunbartonshire sum up the debate.

Finance Bill

Kirsty Blackman Excerpts

Monday 26th October 2015 Commons Chamber

[Mr Speaker]

So be it; the House will understand. It is not a matter for the Chair; I am simply playing fair. It is a matter for the Government, and the Minister could speak now if he wished, but he is not under any obligation to do so. The point of order has been heard. The hon. Member for Hayes and Harlington (John McDonnell) will be in his place tomorrow—and so will the Chancellor be—and we will await the development of events.

[Kirsty Blackman (Aberdeen North) (SNP)]

Further to that point of order, Mr Speaker. Given the result of the vote in the other place tonight, I would appreciate it if, in addition to Treasury questions tomorrow, the Prime Minister could assure the House that he will not flood the other place with more cronies and donors.

[Mr Speaker]

Perhaps I can just say to the hon. Lady and the House that, while I hear what she has to say, the late Lord Whitelaw was the author of a vintage phrase in British politics. As he put it, “I tend to prefer to cross bridges only when I come to them.” It seemed to be a very sagacious utterance by Lord Whitelaw. All I will say to the House now—as much for the benefit of those outside this place as of Members—is this. Two sentences: first, the parent Act specifies that the Government cannot make the regulations unless a draft has been approved by both Houses. I think we can all agree upon that. Secondly, it is up to the Government to decide how to proceed. We will leave it there for now.

Third Reading

House of Lords Reform

Kirsty Blackman Excerpts

Tuesday 23rd June 2015 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

I must apologise, Mr Hollobone—I have not spoken in a Westminster Hall debate before and so am not quite sure what I am doing.

I am the SNP spokesperson on the House of Lords. Our policy is no longer to have a second Chamber, but I understand that this debate is about finding a way forward by reforming the House of Lords rather than getting rid of it. The way forward that has been suggested is really interesting and would reduce the number of Lords. The hon. Member for Isle of Wight (Mr Turner) mentioned that some Lords are active and effective over the age of 75; that was an interesting point and should be taken into account.

One concern I have with the proposal of the hon. Member for Morecambe and Lunesdale (David Morris) is that in the interim period of 20 years he suggested there is a risk that the House of Lords as a whole will continue to get older. If we are aiming to reduce the number of Lords, presumably we will not be appointing many more in that interim period, which will push the average age up, even with a cut-off point of 75.

[David Morris]

I agree with the hon. Lady. I have looked into this, and if we do the maths, as I said earlier, the average age in the Lords is around 70, and the average active Lord is 65 years of age. She is correct that there is a mathematical schism, in that not appointing new Lords would push up the average age. However, over a period of 20 years it would come down to how many Lords were appointed in the initial stages. We could have a calculated assessment that kept in mind the ages of the Lords and how many might be around in 20 years, which would allow us to work out a taper.

--- Later in debate ---

[Kirsty Blackman]

Absolutely. If the youngest Lords at the moment are in their 30s and we do not appoint any more, in 20 years the youngest will be in their 50s, which is a concern.

There could be a degree of election for the pool of life peers, as well as for the hereditary peers. The SNP policy is to abolish the House of Lords entirely, but if that is not going to happen, we want something that is closer to representative democracy. That would mean some form of election, and a House that represented the breadth of the population. A mean age of 70 is nowhere near doing that—I am not in any way being ageist, but simply suggesting that there is a lack of representativeness. If there were a system whereby a group of the current life peers was chosen democratically to continue in the House, we would be more likely to have a swathe of peers who were more representative of the population.

[David Morris]

I understand where the hon. Lady is coming from and share some of her sentiments. However, we looked at that in the previous Parliament and could not get the proposals through the House. I think the House of Lords should be kept as it is now; the issue is how we get the numbers down. I do not have a panacea and am hoping that this debate will be the start of a process. I share her sentiments, which could be looked at in future.

[Kirsty Blackman]

Absolutely.

I do not have much more to say. I appreciate the chance to contribute to the debate and hope that we can find a constructive way forward that includes reform of the House of Lords and, in particular, reduces the number of its Members.