Finance (No. 2) Bill

Debate between Kirsty Blackman and Patrick Grady

3rd reading: House of Commons
Tuesday 25th April 2017 Commons Chamber

[Kirsty Blackman]

I wish to discuss the issues raised in this group, including by my new clause 1. The Minister has covered the IR35 issues in some detail, but the Scottish National party still has real concerns about these changes. Just the other day somebody told me that they are no longer bidding for public sector contracts as a result of the tax changes made on IR35. That is a real concern, which we have raised before, particularly in the context of rural communities. In some of our most rural communities, people such as teachers, doctors and nurses are employed through intermediaries, and for very good reasons: it is sometimes difficult to get people to come to some of the most rural parts of Scotland. We are concerned that this move is going to have a real disadvantageous effect, particularly for rural communities that rely on teachers, doctors and other individuals working in the public sector who are employed through intermediaries. I understand that it is already having an effect, but it would be interesting, and I would very much appreciate it, if the Government let us know what difference it has made, not only to the tax take, but to our communities. Having read through the Government’s document on the impact of the tax changes, called OOTLAR—the overview of tax legislation and rates—I do not think they have recognised the impact the changes could have on communities, so it would be interesting to see what that impact is. The change has already been made and people are now working under it, so I imagine that within six months or so we will be able to see the outcomes and whether or not there is a disadvantage.

New clause 1 is on tax avoidance, which the Scottish National party has spoken about at length in this Parliament, and about which we will continue to speak at length. Tax avoidance is a real concern and contributes to the UK tax gap, which is £36 billion. Back in 2014, Credit Suisse published a report suggesting that larger countries such as the United Kingdom struggle to get people not to avoid tax. Smaller countries are much better at it—I am just pointing that out. The new clause would require the Chancellor of the Exchequer to review within two months international best practice in relation to the prevention and reduction of tax avoidance arrangements and combating tax evasion, and to publish a report of the review. We are asking for that because we do not think that the United Kingdom is the best place in the world at tackling tax avoidance. It is certainly not the best place in the world at all the different ways of tackling tax avoidance; we could learn a huge amount from what different countries are doing. The new clause would be a sensible way forward, so I hope the Government are keen to accept it.

Something else we have mentioned in relation to tax avoidance is the protection of whistleblowers. Some whistleblowers tend towards having poor health as result of their whistleblowing. It is really important that people are encouraged to come forward if they see problems, and that we are making it as easy as possible for them to do so, because we need people to be whistleblowers. We need them to tell us where practice is going wrong and where tax dodging is happening. We would support the Government in any action they take to encourage whistleblowers and to create a better environment in which they can come forward.

Lastly, there has been talk of the possibility of the United Kingdom becoming a tax haven after Brexit. We absolutely reject the notion that after Brexit the United Kingdom should reduce all taxes to nearly nothing. For a start, that just does not work if we want to have public services such as the NHS—

[Patrick Grady (Glasgow North) (SNP)]

Some of them do not, though.

[Kirsty Blackman]

I hope everybody present is supportive of the NHS, but I get why my hon. Friend has the impression that some people are not. We need our NHS to continue to be supported, and for that we need taxes to continue to come in.

--- Later in debate ---

[Kirsty Blackman]

If the Minister changes the VAT treatment of the Scottish police and the fire and rescue service, I promise not to raise the matter again in the House. I can see that she is fed up with discussing it, but, frankly, so am I. If the Government were to move on this, we would not have to raise it again.

[Patrick Grady]

The other option open to the Government is to devolve power over VAT to the Scottish Parliament, so that it could make all of these decisions. We were promised the most powerful legislature in the world, so why do the Government not live up to that commitment and give us the powers that we need?

[Kirsty Blackman]

I agree with my colleague. We have a portion of VAT devolved to the Scottish Parliament, which does not make a huge amount of sense. Although we obviously welcome any new powers coming to the Scottish Parliament, it would be much better if we had control over all of VAT, rather than have a portion of the income from VAT coming to us.

The Scottish police and the fire and rescue service are charged VAT unlike Highways England, which is a national English body, and unlike London Legacy, which is a national UK-wide body. The UK Government have created exemptions for both of those organisations, but not for Scottish police and Scottish fire. This costs the Scottish people, because Scottish police and Scottish fire are having to pay this VAT bill to the UK Government rather than having this money to spend.

Standing Orders (Public Business)

Debate between Kirsty Blackman and Patrick Grady

Tuesday 7th March 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I first saw these proposed changes to Standing Orders on the Order Paper last Tuesday and, as any competent, capable parliamentarian would do, I decided to find out what they meant. I spoke to the Clerks and to the more senior members in my group. I also went to the Leader of the House’s office and asked his officials to produce an explanatory memorandum, so that we could understand the changes that were being made and the reasons behind them. Having spoken to the Clerks, I realised that these were in fact fairly innocuous changes that were intended to tighten up the language.

I am against English votes for English laws. I do not like the way the arrangements have been implemented through Standing Orders. I do not think that that was the right way to bring forward such a significant constitutional change in this House. It has shown up at least one technical problem with the drafting. That is a concern, and it would not have arisen had we had proper scrutiny and primary legislation to make the change. I am against EVEL because of how it has been implemented. I am against the fact that significant decisions can be taken on things that have a major impact on Scotland’s public finances and on Barnett consequentials without Scottish Members being able to take a full part in the debate and have a full say in the votes. That is not right, and the change was not an appropriate way to implement EVEL.

We were reassured by the former Leader of the House, the right hon. Member for Epsom and Ewell (Chris Grayling), that Scottish Members would be able to have a full say in the financial processes and the departmental budgets in the estimates process, but the estimates process is utterly rubbish. It does not allow MPs in this House, whether Back-Bench Conservatives or anybody in the Opposition, to scrutinise departmental budgets. The only people who have a say over departmental budgets are those in the Treasury. The Treasury puts them forward in the form of estimates, which we are not allowed to debate. We were promised that we would still have our say under EVEL on all the financial implications through the estimates process. If the Government are to change EVEL, instead of the change they are making today they should make meaningful changes to allow Scottish MPs to have a say on things that have a financial impact on Scotland’s public finances.

My hon. Friend the Member for Perth and North Perthshire (Pete Wishart) said that income tax has been “properly devolved”, which is an interesting phrase, particularly in this context. The Standing Order allows for decisions around the main rates of income tax, which are wholly devolved, to be classed under EVEL. I do not like EVEL at all and I do not think that we should have EVEL, but if we are going to have it, it is probably sensible to have it on something that does not have direct impact on Scotland’s public finances.

The hon. Member for Edinburgh South (Ian Murray) mentioned the great repeal Bill, which is important in this context. The great repeal Bill cannot be subject to EVEL, and the Leader of the House should bring a further amendment to the Standing Orders or commit to suspend the Standing Order when we discuss the great repeal Bill, because it is not appropriate for Standing Orders relating to EVEL to apply during the great repeal Bill. Scottish Members should absolutely have a say at all its stages. We are being dragged out of the European Union against our will, and we should have a say in the great repeal Bill.

[Patrick Grady]

My hon. Friend is making an important point. We have always been worried about the EVEL Standing Orders placing the Chair in an invidious position. Will that not increase if the Scotland Office, and the Government as a whole, cannot be clear about what powers will be devolved to Scotland in the event of Brexit? The Scotland Act sets out that if something it not reserved, it is devolved, but if the UK Government start to legislate, how on earth will the Chair know whether something should be subject to the EVEL process?

[Kirsty Blackman]

My hon. Friend makes an incredibly clever point. The waters are muddy, because the Secretary of State for Scotland has not been clear about what will actually be devolved. He keeps saying that more things will be devolved, but he has been utterly unclear about whether agriculture and fishing will be devolved. The Chair will be in an even worse position when making decisions about the great repeal Bill due to the mud in the water.

My hon. Friend the Member for Perth and North Perthshire and the shadow Leader of the House said that this is a matter of principle. I get that. I am against EVEL and do not think it should have been implemented in this way. We should not have a constitutional convention; we should have independence. If the Labour party is so concerned about voting against the Government on matters of principle, I suggest that the one to have started with would have been the article 50 Brexit vote.

Industrial Strategy

Debate between Kirsty Blackman and Patrick Grady

Thursday 20th October 2016 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I have spent a lot of the past two days in the Chamber, and it has been pretty instructive. Yesterday I learned the word “contemporaneous” and today the word “oligopoly”, which I had not heard before, so I feel as though I am learning things. The thing that I have not yet learned is what an industrial strategy is, because everybody in the entire Chamber has come up with a different idea of what they think it is and what it should be. I am not going to break with that; I am going to say what I think an industrial strategy should be.

As Members would expect me to say, oil and gas should be top, front and centre of the UK Government’s industrial strategy. It is, without question, the most important industry in the UK. Over the five years from 2008 to 2013, the average annual tax revenue from the oil and gas industry was £9.4 billion. That figure represents direct production taxes; it does not include all of the economic benefits to wider economic areas that the UK Government have also seen.

The industry is not having the best of times: the oil price is low and we are struggling and losing jobs. Things are not all that much fun in Aberdeen and the north-east, which is why it is even more important that this Government commit to ensuring that the oil and gas industry is right up there in the industrial strategy. The oil and gas industry has a bright future, but we need to ensure that Members in this place in particular understand what is happening in the industry and take positive action to secure its long-term future.

Aberdeen city, Aberdeenshire and, indeed, the UK as a whole are the absolute gold standard for the oil industry across the world. If a technology is being used on the UK continental shelf, companies know that it will be accepted anywhere across the world and they will say, “That’s brilliant. It’s the gold standard and we should do that.” The Government need to ensure that that continues.

There is no doubt that we will be taking oil out of the North sea for a long time yet. People can have a discussion about exactly how many billion barrels of oil are left, but everybody agrees that there are billions left. We need to ensure that we maximise the amount of oil that we extract from the North sea, and that our supply chain companies are supported to continue to do the brilliant work that they do on the UKCS and in exporting. It is an export industry. In 2013, Aberdeen had the fourth highest number of patents per head of population of any city in the UK. It was not quite the highest, but we have done an amazing amount of innovation in our city, and we are acknowledged to be a centre of excellence. It is impossible to overstate how valuable that has been to the UK Treasury. We have paid taxes to it for years and we will continue to do so.

[Patrick Grady (Glasgow North) (SNP)]

Until we are independent.

[Kirsty Blackman]

Absolutely. We need to ensure that we get UK Government support now and that companies are incentivised to invest. If they stop investing, the industry will not have a bright future. Some companies are struggling with cash-flow issues. The UK Government need to inspire confidence in the industry by ensuring that private equity people invest and that banks continue to do so. The industrial strategy must express the UK Government’s confidence in the future of the oil and gas industry. That is really important for Aberdeen, the north-east and the wider UK. So many jobs are indirectly linked to oil and gas, and we need to keep them.

I want to address a couple of the things that were mentioned earlier. On apprenticeships and the young work force, Aberdeen has an initiative called “Developing the Young Workforce North East”, which is a brilliant piece of work linking industry with schools. It resulted from Ian Wood’s 2014 report, “Developing the Young Workforce”, which was presented to the Scottish Government. We are making really positive moves and it is being widely welcomed and recognised. The UK Government should consider incorporating it into the industrial strategy.

I thank the Minister for listening and ask him please to make sure that the oil and gas industry is at the top of the industrial strategy.

Budget Resolutions and Economic Situation

Debate between Kirsty Blackman and Patrick Grady

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.