All Peter Grant contributions to the Finance Act 2021

Tue 13th April 2021
3 interactions (1,518 words)

Finance (No. 2) Bill Debate

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Department: HM Treasury
Legislation Page: Finance Act 2021

Finance (No. 2) Bill

(2nd reading)
Peter Grant Excerpts
Tuesday 13th April 2021

(6 months, 1 week ago)

Commons Chamber

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HM Treasury
Andrew Griffith Portrait Andrew Griffith (Arundel and South Downs) (Con) [V]
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It is kind of you, Madam Deputy Speaker, to call me in this important debate. I will try to reward that by sticking to the topic we are discussing. This is an excellent Finance Bill for a much-needed recovery. The UK is already a great place to start, grow and run a business, but to increase the rate of economic growth in the UK we need to restate and foster the pro-enterprise philosophy and measures that have served us so well in the past.

To govern is to choose and the Chancellor was absolutely right to choose fiscal discipline. The Bill begins to fix the public finances with a fair and honest plan about how to do so. Nothing is more devastating to enterprise and investment than high and volatile costs of borrowing, which wipes out small businesses like a pyroclastic flow clearing forested slopes. Thousands of otherwise successful businesses were crushed in the recession of the early ’90s caused by the error of the UK's membership of the exchange rate mechanism.

A centrepiece of the Bill is the super deduction. I have spoken to lots of businesses in my constituency, and it is already mobilising significant investment. The Bill also contains two excellent initiatives under the Help to Grow banner. I believe that the Government are really on to something here and that we could see the Department for Business, Energy and Industrial Strategy start to deliver a string of practical interventions to give small businesses a hand up. When the opportunity allows, I encourage them to go further. Only 10% of small and medium-sized British businesses currently export, leaving 90% of enterprises as potential exporters. That is a vast untapped opportunity to grow the scale and productivity of UK plc. Global Britain brings huge scope to increase the number of firms involved in international trade, but for many firms, where time is the scarcest resource, it is a big and uncertain step to take. Alongside the other elements of Help to Grow in this Bill, I suggest we make available grants to support exporting. It would be a natural extension of the support that the Government provide today under the useful, but relatively modest tradeshow access programme.

Like most, I welcome the extension of the lower rate of stamp duty in this Bill. On a future occasion, I encourage the Government to bring forward an exemption to stamp duty for downsizers. In many parts of the country, the real housing crisis is one of under-occupancy. With an ageing population, too many homeowners rattle around in accommodation that would be more suitable for growing families. Stamp duty is a real brake on downsizing. The Treasury will understandably be cautious about leakage, but it should be perfectly possible to define a downsizing transaction based upon the ratio of values and the limited time interval between the two housing transactions.

This is not an academic issue. Right now my constituents are blighted by development proposals on unsustainable greenfield sites in Ashington, Adversane, Buck Barn, Kirdford and Mayfield, all based on the fallacy that, despite the UK already having more than 600,000 empty homes and the highest rate of housebuilding since 2007, the only answer is to pile up even more supply.

For a similar reason, although I fully understand the context in which the decision was made, I regret the freeze on the lifetime allowance on pensions. The UK used to have one of the best systems of providing for retirement in the western world. Freezing the lifetime allowance is another Jenga brick whipped away from that once strong pillar. NHS consultants, headteachers and airline pilots are hardly plutocrats, but they now face a tax on thrift. Money that would have gone into well-regulated, well-diversified pension funds and been allocated to grow UK businesses has instead fuelled a boom in buy-to-let property, putting home ownership for millions further out of reach.

In the year in which the UK hosts the UN climate summit, let me conclude by welcoming two measures in the Bill that help us move towards a low carbon future. The first is part 2, which introduces a plastic packaging tax from next April. We should tax things we wish to have less of, and on that basis this is an excellent piece of legislation that will provide a clear economic incentive to use recycled material in the manufacture of plastic packaging. It is estimated that as a result, the use of recycled plastic could increase by around 40%, equal to carbon savings of nearly 200,000 tonnes a year and saving a lot of plastic from ending up in landfill and incineration. We only have one planet, so as soon as this useful measure is on the statute book, I encourage my Treasury colleagues to look at increasing the rate and lowering the exemption threshold.

Similarly, I welcome the removal of red diesel from many sectors, although I am glad there is a continued exemption for agriculture, which makes a significant contribution to the landscape in my constituency of Arundel and South Downs. Red diesel accounts for about 15% of diesel used in the UK and is responsible for the release of 14 million tonnes of carbon dioxide a year. This change will help the adoption of cleaner and greener alternatives, such as hydrotreated vegetable oil, and is yet another meaningful step by this Government, who are absolutely leading the world on climate action.

Peter Grant Portrait Peter Grant (Glenrothes) (SNP) [V]
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I am pleased to be able to contribute to this debate and to expand on the reasons so passionately set out by my hon. Friend the Member for Glasgow Central (Alison Thewliss) as to why the SNP will vote against the Bill this evening. The purpose of the Bill is to give legislative effect to the Chancellor’s Budget. That Budget was a regressive Budget. It was an austerity Budget that turned its back on millions of those worst affected by the covid pandemic. It is a Budget that severely damages the interests of my constituents, so it is a Budget, and this is a Finance Bill, that I cannot and will not support.

Austerity is not an economy necessity. It is a political choice. It has been the first-choice response of almost every British Government of every complexion during my adult life, so it is maybe not surprising that so many people seem to have forgotten that there is a different way, a fairer way, and in fact a much more effective way to respond to an economic crisis. All we have to do is to care as much about the millions in these four nations who do not have enough to live on as we care about the lucky handful whose only problem is that they cannot count how many billions they have.

There is no disagreement about the fact that we need to start to repair the economic damage caused by the pandemic and by the measures that had to be taken in response. There are lessons to be learned, but perhaps the most vital lesson of all is that the inequalities that have been deliberately created and deliberately maintained in our society by successive Governments have also made our society as a whole much more vulnerable to the ravages of the disease. We know that the economic costs of covid have fallen much more heavily on the people who could least afford them. To give just one example, the British Retail Consortium did a survey that confirmed what we would probably have expected: during the pandemic, highly-paid people such as Members of Parliament have got better off and now have more savings than we had before, while most of our constituents on low incomes have been using up their savings just to survive, and many of them effectively have no savings left at all.

Presumably, the way we respond to that is to use the powers in the Finance Bill to redress that balance. Well, no—that is not the priority of this Government. In clause 5, we see a multi-year freezing of the income tax basic rate limit and, much more damaging, a freezing of the personal allowance at £12,570. It is not easy to find a way to change an income-based tax system so that we collect more tax but target the impact on people on lower incomes, but that is exactly what the Government propose to do. If it is accepted that the Treasury needs to collect more money in real terms from income tax, we should at the very least make sure that the impact in real terms is equally spread. In fact, the SNP would argue that whenever the time comes to increase taxes, those of us who are lucky enough to be on high incomes should be asked to bear a wee bit more of the pain.

I know that the Government will point to other provisions, such as clause 31 and the one-off uplift in working tax credit. In principle, that is something the SNP supports, but as my hon. Friend the Member for Glasgow Central mentioned, the way that it is implemented could harm some of the very people it is supposed to help. The eligibility criteria are crude, to say the least. It will not be at all easy for recipients to work out for themselves whether they qualify. What assessment have the Government made of the number of payments that they expect to be made in error, and are they seriously then going to chase down the recipients of those erroneous payments as if they had committed some kind of fraud, when in fact they have done absolutely nothing wrong?

I was interested to hear the comments of the Chair of the Treasury Committee, the right hon. Member for Central Devon (Mel Stride), on freeports. “Freeport” is obviously a buzzword that the focus groups have told the Tories goes down well with the party faithful, so they have decided to invent, or rather reinvent, something that looks like a rehash of 1980s-style enterprise zones but call it a freeport because that sounds like a better term. Leaving aside the terminology, how do the Government know that the provisions in clauses 109 to 111 will create new investment and new jobs, rather than just move investment and jobs that would have happened anyway, as the Committee Chair asked? How will they make sure that those who buy and sell land in a designated freeport area are investing the tax breaks they enjoy in creating jobs on the site, rather than just siphoning the money off into the profit and loss account of an offshore investment trust somewhere?

Almost a third of the Bill’s clauses relate to the plastic packaging tax, and no doubt the Bill Committee will want to spend a proportionate amount of time scrutinising the details, but for now, I draw the Minister’s attention to the National Audit Office report on 12 February this year. The report found that, although the Chancellor in his Budget speech last year was able to tell us how many tonnes of carbon the tax would save,

“the exchequer departments did not set these as measures of success in the Tax Information and Impact Note”.

A previous Tory Government brought in tax information and impact notes in a blaze of publicity, announcing that they would support better parliamentary scrutiny of tax policy, but how can Parliament scrutinise the success of this new tax if the key measure of success announced by the Chancellor does not even appear on the success radar of the Department that has to implement it?

My hon. Friend the Member for Glasgow Central raised the more general point about the woefully inadequate scrutiny that the often massive decisions in Finance Bills receive. I know that the Government will point to the number of minutes, hours, days or weeks that people have spent talking about it in Parliament, but talking about it and reading prepared speeches is not the same as proper scrutiny. For example, in this Bill we can accept, reject or amend clause 32 on the tax statement of payments under the self-employment income support scheme, which is fair enough for those who qualify, but we cannot redress the glaring injustice of the excluded millions who do not qualify at all. We can accept clause 31 or amend it to make it a lot better, to support working people whose income has been affected by covid, but we cannot vote to remove the 30 September cliff-edge when the furlough scheme is removed, because that would be an inadmissible amendment. Although the Bill can be improved in Committee and made slightly more fit for purpose, we are powerless to force the Government to undo some of the deliberately disastrous flaws and omissions in existing support schemes.

It is right that this Budget and this Finance Bill should start the process of rebuilding the economy after covid, but as the right hon. Member for Hayes and Harlington (John McDonnell) mentioned, the Government seem hellbent on taking us back to exactly the same unfair, unequal and divided society that we had before. In fact, they will probably succeed in making it even worse than before. Of course, the Tories do not want to talk about the fact that their own analysis shows that the long-term economic damage of the covid pandemic will be less than the damage of the self-inflicted and totally avoidable disaster that is Brexit.

It is an indication of how out of touch the Government are with my constituents, and with the people of Scotland generally, that the Tories, the official Opposition in Scotland, have already surrendered in the Scottish Parliament elections. They are not even pretending that they want to try and form an alternative Government after 6 May. They are delivering glossy six-page leaflets that literally have no policies on them. They are not even pretending that they have anything positive to say or to offer in Scotland—which, after all, is kind of what Scotland has been saying to them since 1955.

The Bill will get its Second Reading tonight, it will get through the Committee and it will become law. Its regressive provisions will be imposed in Scotland against the will of three-quarters of our people, no doubt to great cheers from the socially distanced Government Benches. But let me say this to them: enjoy imposing this Finance Bill on Scotland’s people, because in just over three weeks’ time, those same people will take a decisive step towards making sure that their time for imposing their policies on our country comes to an end.

Eleanor Laing Portrait Madam Deputy Speaker (Dame Eleanor Laing)
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I appreciate that this is a Finance Bill and technically it can go to any hour, so the House could be sitting until 11 o’clock or midnight, but I ought to say something to Members who are not in the Chamber but who I hope might be listening. It sometimes seems that Members who are at home and participating virtually do not pay attention to the rest of the debate. If they are listening, let me say to them that there is something a little bit distasteful about those who are sitting at home making very long speeches and keeping the entire operation of the House of Commons going till well into the evening. Everybody has the right to speak on the Finance Bill and it is very important that they do so, but it is generally recognised, and I particularly recognise it today, that that which can be said in 10 minutes can usually be said more effectively in five.