DRAFT ALTERNATIVE FINANCE (INCOME TAX, CAPITAL GAINS TAX AND CORPORATION TAX) ORDER 2022

Peter Grant Excerpts

Tuesday 17th May 2022 General Committees

[Peter Grant (Glenrothes) (SNP)]

It is a pleasure to serve on this Committee under your chairmanship, Sir Edward. I thank the Minister for his opening comments. I commend the comments of the hon. Member for Hampstead and Kilburn, with which I would almost entirely associate myself.

I have a few brief comments. I support the proposal, which moves in the right direction. There may be some other steps that could have been taken, as has been referred to. One thing that still grates with me a wee bit is that we talk about conventional and alternative finance. I think, if I was a Muslim, I would not think this was alternative finance—it would be entirely conventional. It may be different from the way we have traditionally done things in Britain, but it is becoming part of a different convention. I do not like terminology that appears to imply that one way of doing things is better and more intrinsically valuable than another.

Whether it is an individual or someone operating as a business, the fact that somebody follows the Muslim faith should never be a barrier to their being able to live their life to the full. There are a number of businesses in my constituency run by devout Muslims that make a significant contribution to the local economy and community. It is only right and proper that if they need to raise finance to expand their business or get over cash-flow difficulties, they should be able to do that in a way that is compliant with their deeply held religious beliefs and that does not put them at a disadvantage for taxation, consumer protection or regulatory purposes, compared with somebody who chooses a different method of financing. This order is another step in that direction, but there are still areas where Muslims and others who choose to follow Sharia law find themselves at a disadvantage. If there is no justification for that, we should legislate the disadvantages out of the system as soon as possible.

For that reason, I hope the Minister can tell us when similar steps will be taken in relation to stamp duty land tax and innovative finance individual savings accounts—ISAs. I am a great fan of ISAs—I have had them for almost as long as they have existed—but I did not realised until today that if I had been a Muslim, I probably would not have been allowed to do that because of the way they are set up. If they are deemed to be paying interest, it is prohibitive for somebody who is a Muslim. If there are other ways that ISAs can be set up to allow Muslims and other followers of Sharia law to participate in them, I do not see why we cannot change the law to allow that to happen.

If there were significant objections—if changes to the legislation would undermine the intention behind it—that would be a different matter, but I have not heard any. I have not heard any suggestion that carrying out our proposed reforms to SDLT would in any way go against the purpose of the legislation. If it allows the legislation to achieve its stated purpose while making it fairer for everybody, we should get on and take those steps.

I look forward to seeing further draft orders in the near future to address the issues I have raised, and which were picked up in the consultation responses to this order. I am happy to support this order, and I look forward to more on a similar theme before too long.