Finance (No. 2) Bill

Richard Thomson Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

It is a pleasure to speak in support of my colleagues in our opposition to the Finance Bill on Second Reading. This might be the Finance Bill that we have, but it is certainly not the Finance Bill that we need right now. Despite warnings and despite the damage to employment that was caused by previous hard deadlines that the Chancellor set himself on furlough—which turned out not to be such hard deadlines after all—we once again face just such a set of cliff edges with these measures come September. We face a cliff edge with the ending of the support for the self-employed, the ending of furlough and the non-continuation of the equivalent of the £20 universal credit uplift—a policy that has done so much to get families on low incomes through the pandemic, making sure that food was on the table, bills could be paid and the wolf was kept from the door. We will also face a cliff edge in key elements of the Scottish economy thanks to the removal of the 5% VAT rate for hospitality. As things stand, all these cliff edges will be encountered irrespective of the condition of the economy come September or, indeed, the progress that we continue to make in suppressing the virus.

This Bill fails to get to grips with the big issues of ensuring a green recovery and fails when it comes to dealing with the much-vaunted levelling-up agenda. In the time I have left, I wish to highlight two points of particular interest to my constituents and to wider society across the north-east of Scotland: the recently announced sector deal for the North sea and the levelling-up agenda.

First, lest there be any doubt, the sector deal is absolutely welcome. It has been called for for a long time and I know that the Government and industry have been working together closely to deliver the package. Although it might be a sector deal, whatever else it might be it is emphatically not a fiscal deal. There are big numbers in respect of the amounts of investment money that might potentially come in, but the Government are not putting a huge amount of money on the table to achieve that. It may help—I hope it does—to drive the objectives of a just transition and to boost the skills and retain human capital in the north-east of Scotland, but we need to be prepared for the possibility that further incentivisation might be needed.

Secondly, on levelling up, people who listened to my good friends and colleagues from neighbouring constituencies who represent the Conservative and Unionist party would believe that the levelling-up fund was going to leave not a single pothole unfilled, not a bridge unrepaired and not a single social project unfunded in the north-east of Scotland. Instead, when the prospectus was unveiled, the city of Aberdeen was in level 2 and Aberdeenshire was languishing in the lowest level, level 3, despite the urgent need to address the hit that the oil and gas sector has taken and tackle the impact of Brexit on our exporters. It seems that the post-Brexit power grab on Scotland’s devolved Government has morphed into a cash grab on the north-east of Scotland.

In conclusion, this is the Bill that we have but it is not the Bill that we need. Along with my colleagues, I look forward to exposing more of its shortcomings as we see them, as the Bill progresses.

Finance (No. 2) Bill

Richard Thomson Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Felicity Buchan]

I completely agree with the right hon. Gentleman that all the forecasts show a very substantial increase in the tax take by virtue of this move in corporation tax.

I believe that we have the right balance. We are increasing corporation tax, but only for 10% of our businesses and only in two years’ time. Importantly, we are also accelerating and incentivising investment in businesses, which will be critical to our economic recovery.

[Richard Thomson (Gordon) (SNP)]

I want to speak to the amendments and, in particular, the new clauses that have been tabled in my name and those of my colleagues.

First, I will start with the positives. We very much welcome the planned increase in corporation tax rates. For a number of years, there has been an orthodoxy that lower corporation tax rates are one way to economic growth. There was a period in the 1980s through to about the 2000s when it was possible to make the argument, as many did, that lower taxes could be a route to securing an increased level of foreign and direct investment, and that the resulting increase in economic activity could result in higher tax revenues than might otherwise have been the case. I would like to think that we are all just a bit wiser and more savvy now, given that, in the growth of that period, it is impossible to properly separate out the increase in corporation tax take and the general growth in activity that took place independently.

Given that we did not see conspicuously high levels of investment or wage growth over that period, except perhaps in boardrooms, and given the condition of our public finances and the importance of public goods as a driver of wellbeing and sustainable growth and prosperity, we consider that this increase, which will apply a new 25% rate on the top 10% of firms, is fully justified. We are relieved that firms will have until 2023 to plan for this move. We believe it was misguided for the Chancellor to try to increase it from 19% to 20% in September, ahead of any recovery starting, beyond the anticipated return-to-trend growth that we are seeing anyway.

The SNP firmly believes that it is important that our corporate citizens pay their share towards the maintenance and good functioning of the market and the public goods that allow them to flourish. However, domestic corporation tax is only part of that story. If re-elected—obviously, we have elections coming up in Scotland, which I am sure hon. Members are focused on avidly—the SNP Government will be looking to explore the possibility of levying a higher poundage on properties where the owner is registered in a tax haven. That is part and parcel of the package of measures that is needed to ensure that everyone who benefits from participation in the market is making a suitable contribution towards it.

Further, we believe that the UK must seize the opportunity that this moment presents to work closely with the Biden Administration in the USA. We must heed the call of that Administration’s Treasury Secretary, Janet Yellen, to set a global minimum tax take for companies to ensure the global economy can thrive, based on a more level playing field and the taxation of multinational corporations, and help spur innovation, growth and prosperity.

New clause 13 would oblige the Government to review the impact of the changes made by clauses 6 to 14 in all parts of the UK, particularly in respect of business investment, employment, productivity, GDP growth and poverty, and to compare the difference in actual and forecast outcomes between having a deal in place with other OECD countries on a minimum level of corporation tax and not.

Similarly, new clause 19 asks the Government to review these changes but in a way that looks both forwards and backwards. As I said earlier, orthodoxies may change in economics, and the Chancellor’s commitment to increasing the headline rate seems to mark the end of a protracted period of a race to the bottom on corporation tax rates. The Chancellor himself said on 3 March that cuts

“might not be the most effective way to drive capital investment up”.

On that basis, it is very important that the Government should compare the estimated impact of corporation tax changes in the Bill with the impact of the changes in corporation tax rates that we have seen in each of the past 12 years.

New clause 20 seeks a review of corporation tax provisions on the link between corporate profit rates and ownership, and the cost of reintroducing a small profits rate. We believe that the lower small profits rate introduces an unnecessary degree of complexity into the tax system. We were unable to find specific costings for the reintroduction of the small profits rate in the OBR policy costings. Instead, they appear to have been rolled into the costings for the overall rate increase. The Treasury should publish details of the revenue forgone through this measure for the purposes of proper scrutiny.

New clause 21 seeks a report on the impact of the super deduction on progress towards the Government’s climate emissions targets and capital investment in each of the next five years. It is important that we understand properly not just the impact that the super deduction is expected to have but the impact it actually has, because it is one of the most significant spending measures in the Budget and a very significant giveaway to big business.

The super deduction is poorly targeted, since it applies to physical assets rather than investments in software, for example, and seems to mostly benefit larger companies. Smaller investments are already tax-deductible under the annual investment allowance. OBR analysis suggests that some £5 billion of the super deduction will, in any event, be spent on previously planned investments. It is hard to avoid the conclusion that this measure will benefit larger companies in a way that does not necessarily drive growth in the way that the Chancellor would hope and certainly does not target the small and medium-sized enterprises that benefited from those deductions anyway and are the engine of growth in most parts of these islands.

When setting policy, it is always a good idea to know what we are doing and why and to have the most solid evidential base for doing so. The fact that we will not put these measures to a vote does not diminish the significance and importance of what we propose. I can assure the Minister that we will return to these matters and will look to the Government to act, even if these matters are not addressed in the final version of the Bill.

[Andrew Jones]

One of the biggest challenges that the UK economy has faced for many years is its productivity. The UK has some of the highest-calibre companies in the world, among the smartest and most productive on the planet, but outside the south-east, there are areas of the UK where productivity matches parts of southern Europe. For many years there has been a long tail of companies whose productivity is very poor. There are many causal factors in that, including skills—particularly digital—and infrastructure challenges, which I have focused a fair amount of my time on. One of the key issues is a lack of business investment, and one element of the Bill, which I shall focus upon in my few words, goes right to the heart of tackling that: the super deduction.

Until March 2023, companies can claim 130% capital allowances, which basically means that for every £1 a company invests, its taxes are cut by up to 25p. I have no doubt that this will prompt investment. Investment is a driver of economic growth. While the UK has performed well on growth over the last decade, it has lagged on investment, so if investment rates can be improved, the UK will do even better.

The Office for Budget Responsibility estimates that the UK will rise from 30th to first in the OECD world rankings for business investment. That is a very positive thing. Being a beacon for investment is a positive, not a negative; we should not listen to Opposition Members on this. However, such a rise in the world rankings will not be achieved unless there is real scale to this measure. For the two years that it is in place, it is estimated to amount to £25 billion. It would therefore be the largest business tax cut in modern British history, so there is indeed real scale to it.

When we talk about productivity in this place, there is a danger of speaking in jargon. What people could take away is the message that they will have to work harder, do 40 hours per week instead of 38, or work in a team of six rather than eight but still do the same work. What I know we mean, and what I am talking about, is working smarter, so that there is more economic output for the same input. Investment in new machinery and the latest technology is one way to increase productivity, and the super deduction will increase investment.

There are amendments ahead of us this evening about measuring the impact of those policies. Those amendments are not necessary as the Treasury always reviews the impact of its policies, but as the Treasury does its work it will be interesting to see the impact of the super deduction on different parts of the country. It will simply reflect the different economic mix that we have in different areas, and some will benefit more significantly than others. I think the policy will be very helpful in the levelling-up agenda.

--- Later in debate ---

[Abena Oppong-Asare]

I thank the Minister. I will approach that later in my speech, so I thank him for already guessing what I was going to say.

We really need some honesty and transparency from the Government on this. The estimates of the job creation benefits of freeports made by their advocates so far have been flimsy to say the least. We also need a proper assessment of the risk of job displacement. If freeports simply move existing economic activity around, they risk doing harm to the economic fortunes of neighbouring areas, with no net benefit to the country as a whole. Indeed, a 2019 report by the UK Trade Policy Observatory found that the main effect of freeports was to divert businesses into a port from a surrounding area, rather than creating new jobs, so it is not just Labour saying this; it is the experts saying it too. That may be especially problematic in areas where freeports are situated near a local authority, or regional or even national borders.

Our new clause would require the Government to report on tax avoidance and evasion and criminal activity in freeports and to set out the level of additional staffing and resources required by HMRC and other Government bodies. There are long-standing concerns that freeports allow or encourage tax avoidance and evasion, and there is international evidence that freeports have been used for criminal activity. For example, the OECD has stated that there is

“clear evidence that free trade zones are being used by criminals to traffic fake goods”.

The Financial Action Task Force has said that the lack of scrutiny can facilitate trade-based money laundering through relaxed oversight and a lack of transparency. The TUC and others have warned of the dangers to workers’ rights from deregulation in freeports. We need to take these concerns seriously. As a minimum, the Government should commit to trade union representation in the governance of freeports at local and national levels.

I will now make a few points about the clauses we are considering. First, on the cost of the tax reliefs being introduced, the Government have provided some information on the expected operational costs of HMRC but, as recently as last month, they were unable to estimate the reduced revenue that the Exchequer will receive as a result of these reliefs. I hope the Minister can address that. Clause 110 includes the enhanced capital allowance for plant and machinery spending at 100%, but that is less generous than the 130% super deduction. Presumably, for the period that they overlap, companies will need to consider whether they can claim the super deduction rather than this allowance.

The Chartered Institute of Taxation has raised a number of concerns about the operation of the stamp duty relief in clause 111. One issue is how exactly freeport tax sites will be designated and whether particular buildings can be identified as either in or out the boundary of the tax site. Can the Minister provide some clarity on joint ventures where there is both commercial and residential development? The Chartered Institute of Taxation points out that the clause, as currently drafted, excludes a common commercial arrangement from that relief. Finally, there is the issue of withdrawal of relief for subsequent non-qualifying activity. A small amount of non-qualifying use can potentially lead to withdrawal of all the relief. Is the Minister concerned that the risk of loss of the full relief in such circumstances could discourage investment?

To conclude, the Opposition have real concerns about the Government’s freeports policy. If it is going to succeed and bring the sorts of benefit that those on the Government Benches claim, we need to see more detail on the operation of freeports and how the Government plan to mitigate the risks. We need regular monitoring of the effectiveness and the impact on the country as a whole over the years to come, which is exactly what new clause 25 would require the Government to do. If the Government are confident in their policy, they should be confident in allowing scrutiny of how it works in practice. I call on them to support our new clause.

[Richard Thomson]

I would like to add my support for the Opposition amendments and to seek a commitment from the Government, while the Minister is here, to allow the Scottish Government after the Scottish elections to move ahead with their greenports adaptation of the freeports concept. Freeports do not require Brexit in order to be brought about, and legitimate questions remain about how much additional economic activity they will actually generate, rather than simply displace from other areas of the economy.

[Sir Bernard Jenkin]

Will the hon. Gentleman give way?

[Richard Thomson]

It is very early but yes, of course.

[Sir Bernard Jenkin]

I am most grateful to the hon. Gentleman for allowing me to intervene. There was a freeport in Shannon in the Republic of Ireland before the Republic of Ireland joined the European Economic Community. The tax freedoms that it was granting at the Shannon freeport were significantly curtailed as a result of joining the EEC, because the EEC prevented it from providing those freedoms. That is why we are discussing the question as to whether or not we are using the new freedoms we have, but the fact is we have much more tax freedom outside the EU for freeports than we had when we were in the EU, and hopefully Scotland will benefit from that.

[Richard Thomson]

I thank the hon. Gentleman for that intervention, but I think my point still stands. No matter what the spirit of truth might be in his remarks about how constraints were placed on the Shannon free zone, there are freeports in the European Union. Freeports are not something that intrinsically require Brexit of itself in order to be able to be pursued. But certainly I hope there are benefits for Scotland from this. I think those benefits can be manifested best perhaps through the greenports approach, which I would like to expand upon.

As I say, the Scottish Government have developed their own version, the greenports, which seeks to embrace all the potential benefits that could come through freeports, while aligning that with ensuring the principles of fair work are enshrined, ensuring that workers within the greenports are paid a real living wage and that the reduction of carbon emissions is embedded at the heart of those developments. A re-elected Scottish National party Government will seek to implement those greenports, making public sector support contingent on businesses complying with that fair work first agenda, paying that real living wage and implementing the Scottish business pledge: our values-led partnership between Government and business based on boosting productivity competitiveness through fairness, equality and sustainable employment, and on delivering on concrete plans to reduce carbon emissions in line with supporting the Scottish Government’s ambition to reach net zero by 2045.

The Scottish Government proposals for these economic development zones already have widespread buy-in from stakeholders, who are desperate to start bidding to run the greenports. It was heartening to hear from the Minister his commitment to seeing freeports in all parts of the UK. Nevertheless, if the people of Scotland choose to re-elect a Scottish National party Government, the Government need to accept the mandate that comes from that and, if there has been an element of heel dragging, to hasten the process of coming to an agreement on the rules around these proposed greenports so that the bidding can begin immediately.

Having taken positive steps to end the race to the bottom on corporate taxation, as we heard in an earlier debate, I think it is important that the UK Government do not allow those who take advantage of freeport status to neglect or otherwise elude their obligations to the workforce, to the environment and to the building of long-term, sustainable value in the regions where they are located and the wider economy.

In the year that the world is coming to Scotland to plan our future at the COP summit, I think it is absolutely fitting that we should be able to develop greenports to demonstrate our ambitions on sustainable, inclusive economic growth as we transition to a net zero economy. A fair, sustainable greenport model can be an exemplar of those values, while adding value to Scottish goods, services and the country’s brand. The UK Government, once the Scottish elections are over, need to get on board with this and back the innovative approach of the Scottish Government model so that we can get the bidding process under way.

[Ruth Edwards (Rushcliffe) (Con) [V]]

The east midlands is one of the regions that was fortunate to benefit from a new freeport in this Budget. Spread across three sites in Leicestershire, Derbyshire and my own constituency of Rushcliffe, we hope to establish a green technology park on the site of one of the UK’s last coal-fired power stations, at Ratcliffe-on-Soar.

Hearing contributions from the Labour party in recent weeks, and from the shadow Minister just now, we would be forgiven for thinking that, with the arrival of a freeport, Rushcliffe will become some sort of wild west, with disputes over stolen art, organised crime activity and tax avoidance settled with a shoot-out in the drinking establishments of Ratcliffe-on-Soar. Quite a picture, but one that ignores the extensive steps the Government have taken to prevent illicit activity, such as background checks for businesses that want to locate in a freeport, including their beneficial owners, and a register of businesses operating in each freeport site, to which HMRC, the National Crime Agency and Border Force will all have access. Successful freeport bids also had to demonstrate their approach to inventory systems, physical security, personnel security, cyber-threats and international regulations.

Finance (No. 2) Bill

Richard Thomson Excerpts

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

I am happy to speak in support of clauses 80 to 91 and also new clauses 26 and 27.

Some of the measures in this cluster of schedules and clauses do not apply to Scotland, where the land buildings transaction tax applies instead following the devolution of the stamp duty land tax. That said, I am sure that the extension of the temporary increase to the stamp duty land tax holiday with no rate band for residential property in England and Northern Ireland that will be given effect by clause 87 will be very much welcomed by those who stand to benefit from it. The increased rates for non-resident purchasers given effect by clause 88 and schedule 16 is something that is long overdue. I am also happy to support the relief from annual tax on enveloped dwellings for certain kinds of properties given effect by clauses 89 to 90 alongside schedule 17, as well as the provisions being made under clause 91 for repayment to co-operatives that are also eligible.

I encourage Ministers to look positively on the reforms of property taxation that have taken place in Scotland since stamp duty was devolved. LBTT replaced stamp duty on 1 April 2015. It is very much a progressive tax in that the rates increase more than proportionately in line with the price of the property to which it has been applied. That has a very valuable role in the housing market with regard to easing house price inflation and, at the same time, exempting nearly 80% of first-time buyers from paying any kind of property tax on their first purchase of a home. My party is committed to maintaining current rates and bands within that tax regime while undertaking a review of the effectiveness of the additional allowance supplement that has also been put in place. It is in that spirit of constant review that we find much to welcome in new clauses 26 and 27, which we consider will merit the support of the Committee.

[Gareth Bacon (Orpington) (Con)]

As the Committee is aware, this year’s Finance Bill is presented at an unprecedented time in British peacetime history. The pandemic has hit the economy very hard, and the Government have not stood idly by over the past year. Extensive levels of economic interventions have been introduced to protect jobs, businesses and our people in order to help them through this pandemic. The impact of this on the state of the public finances has been drastic, with the budget deficit rising to £355 million in 2020-21 and our national debt rising to £2 trillion.

That is of course not a sustainable position, but, as we know, the tide is turning. The Government’s excellent vaccine planning, procurement and roll-out means that we can now see the end in sight. The economy and society have begun to open up, but we are not there yet. The Budget introduced by my right hon. Friend the Chancellor of the Exchequer in March therefore had to achieve a very delicate balance in maintaining high levels of economic support during the continuing global health crisis while also laying the groundwork to repair the public finances and support our economic recovery.

The part of our economy that is the housing market comes in both property sales and construction. I will address my remarks primarily to the decision to extend the temporary stamp duty land tax holiday. As my right hon. Friend the Minister said, when the pandemic struck and the first lockdown began in March last year, the housing market experienced a sharp decline in sales, falling by 43% in the second quarter of the financial year compared with the same period of the previous year. Historically, a sharp drop in transactions, if left unchecked, has led to a fall in the level of house building. The Government’s action in introducing revised thresholds at the lower end of the market, abolishing stamp duty on the first £500,000 of the purchase price and setting the level at 5% for the next £425,000, has greatly alleviated the problem. In my constituency of Orpington, the average house price is currently £528,000, and the Government’s intervention has reduced the level of stamp duty on an average transaction by 91%, leading directly to a strong recovery in the local housing market.

That recovery is also reflected in the picture nationally. According to HMRC figures, in the third quarter of the most recent financial year, housing sales increased exponentially on the previous quarter, and in the fourth quarter transactions were at their highest level since 2007. In the short term, that is extremely welcome because the Government have achieved their objective of stabilising the housing market and maintaining confidence in the construction market. By introducing an extension of the initial stamp duty holiday, followed by a tapering of relief, the Government have taken steps both to remove the danger of a cliff edge that could have reversed all the good work done in the latter half of last year and to prevent an unsustainable long-term boom in house prices. I believe that is the right approach at this juncture.

In the longer term, though, I urge the Government to take a long, hard look at the structure of stamp duty. Stamp duty thresholds have not kept pace with the rise in house prices, meaning that stamp duty has become a significant barrier to purchasing. That is particularly true in places such as Orpington, and even more so in other areas of south-east England in particular, where housing shortages are most acute. In the light of the strong link between house construction and housing transactions, coupled with the Government’s desire to ramp up house building and level up the country, a review of the wider stamp duty regime would bear consideration. However, that is an argument for another day, once the battle with the pandemic is finally won.

For the moment, I believe that the extension of the stamp duty until the end of June is the right move, and its tapering from the end of June until October is both proportionate and unwelcome. I will support the Government on the issue this evening.

Finance Bill

Richard Thomson Excerpts

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Zarah Sultana (Coventry South) (Lab)]

I remember when the pandemic first hit and the Chancellor said that we would all be in it together. Well, the reality has not turned out that way. It has been the story of the many and the few. For the many, it has meant food bank use rocketing—it is up 33% on a year ago. Universal credit claimants have doubled in my constituency and child poverty now affects more than one in three children in Coventry South—nearly 7,000 kids in my constituency alone—and nearly 4.5 million across the country.

While the majority have struggled with falling wages, unemployment and rents that they cannot afford, for a wealthy few it has been a bonanza. Last week The Sunday Times rich list revealed a record growth in UK billionaires, of whom there are now 171 in total. Their wealth stands at £600 billion—up nearly 25%. Amazon, which this year has raked in record revenues of £38 billion across Europe, paid nothing in corporation tax. This is not just a broken economic model—it is not just unfair and unequal—it is rigged. It is redistribution, but not in the way that we might traditionally understand: it is taking from the many and giving it to the few. That is what is happening when we see that food bank use is up 35% and billionaire wealth is up 25%. This Conservative Government not only refuse to tackle that but aid and abet it.

There is nothing in the Bill to tackle the tax loophole that means that income earned through wealth, owned overwhelmingly by the rich, is taxed at a lower rate than income earned through work. There is nothing in the Bill to fairly tax the obscene profit that companies such as Amazon have made during the pandemic, with the Government refusing to embrace a windfall tax. There is nothing in the Bill to provide the necessary investment in Her Majesty’s Revenue and Customs to tackle tax avoidance and evasion by the super-rich and big businesses. Instead, the Government are standing by as the tax gap stands in excess of £35 billion.

What is in the Bill is £15 billion more in annual cuts to Government Departments and a super deduction tax cut in capital spending that the rich are already reported to be using to purchase jacuzzis. To top it all off, there is the Tory Government’s refusal to embrace plans to tackle global tax avoidance. The plans put forward by the US could prevent the likes of Amazon, Google and Facebook from dodging tax and refusing to pay their fair share, and end the race to the bottom on corporate tax rates. Even at a moderate rate of 21%, such a measure could raise £13.5 billion for the UK Treasury, according to Tax Justice UK.

We should not really be surprised by the Government as they are on the side of big business and the super-rich. For a decade they have been cutting taxes while cutting the budgets of schools and hospitals throughout the country. They are also funded by a third of UK billionaires and, of course, they are led by the super-rich, too—not just an old Etonian Prime Minister who complains that his £150,000 salary is not enough, but a Chancellor who went from an elite private school to Oxford to investment banking, before becoming the wealthiest Member of Parliament in this House and using his power to cut the services of the working class.

Instead of this rigged and rotten system, we could make the super-rich pay their fair share to fund our public services and end poverty for all. That is the least the Government should be doing, so they should back the plan for a global minimum corporation tax. They should also back my proposed new clause, which would shine a light on the scandal of tax dodging. Instead of entrenching inequality, the Government could be building an economy for all.

[Richard Thomson (Gordon) (SNP)]

I rise to speak in favour of new clause 12, which was tabled in my name and those of my Scottish National party colleagues.

We have previously welcomed the planned future increase to the corporation tax rate and we also very much welcome, as have other speakers in the debate, the news reported today in the Financial Times that the G7 nations, or at least some of them, seem to be close to an agreement on minimum rates of corporate taxation. Like other speakers, I take this opportunity to praise and put on the record my admiration for the Biden Administration for having brought the situation about. It is imperative that the UK Government rise to the moment and seize the opportunity to embrace the emerging consensus on global taxation and ending the race to the bottom on corporate tax rates. For a global minimum tax rate for companies will reduce the opportunities for companies to minimise their tax liabilities by funnelling revenues through other jurisdictions. That will help to ensure that more tax gets paid in the jurisdictions where those revenues have been earned. In the process, that helps to uphold living standards and ensure that a fair contribution is paid to the common good by our corporate citizens for the public goods they consume.

New clause 12 follows our efforts at previous stages of the Bill’s progress in trying to oblige the Government to review the impact of the proposed corporation tax changes on all parts of the UK in respect of investment, employment, productivity, GDP growth and poverty, and to compare the difference between actual and forecast outcomes in the event of a deal with other OECD countries on a minimum level of corporation tax, such as I have mentioned, and in the event that such a deal cannot be reached. I also find much to support in new clause 22, as well as amendments 30 and 31.

Frankly, it should be taken as a given that any company qualifying for tax reliefs should be domiciled in the tax jurisdiction offering those reliefs. It should have an exemplary history when it comes to paying taxes that are due on its activities in that jurisdiction and an exemplary record of behaviour towards its employees, in terms of recognising the right to organise their labour and paying a living wage for that labour.

To conclude, in difficult times or in better times, there is nothing that sticks in the collective craw more than large corporate entities that seek to take almost as much from society as they give in return, and which pay much less than they are able and often end up paying proportionately far less than many of their smaller competitors. I am very happy to support these amendments.

--- Later in debate ---

[Madam Deputy Speaker (Dame Rosie Winterton)]

We were having a little difficulty getting hold of the speaker at No. 2 on the list, so I will call Richard Thomson and then come back to David Simmonds.

[Richard Thomson]

I rise to support new clause 25. It is a pleasure to follow the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) and I would like to echo much of what she said.

We have had freeports before in the UK, as recently as 2012, and our EU partners still have them, with 72 free zones across the EU territory. Some contributors in these debates have taken an excessively, I think, dim view of freeports. I would like to take a more balanced view, but I still think we are absolutely right to proceed cautiously, and that is why I am happy to support new clause 25. Given the incentives on business rates that are on offer, the potential national insurance exemptions and the exemptions on customs duties, it is absolutely vital to make sure that the economic activity attracted to freeports is not simply being displaced from elsewhere, and that the activity is new, adding value and resulting in economic output that is greater than would otherwise have been the case.

Therefore, when we are measuring that impact, it is important to make sure that the Government do not get to mark their own exam paper by choosing their measures of success after the fact. That is why it is important to be able to report back on job creation, skills and productivity, the impact on tax revenues, the levels of financial criminal activity that have resulted around a development and the details of the resourcing needed to ensure compliance with the law, and also to understand the extent to which the mix of industries that will have grown up around a freeport development match those sought in the original bids.

The Scottish Government have sought to build on the freeport model with a green port version of it that embraces all the potential benefits of freeports, while ensuring that the principles of fair work are enshrined at their heart—the principles of fair work and fair pay through a real living wage—and putting environmental concerns to the fore, through placing carbon reduction at the heart of these developments. These proposals for green ports from the Scottish Government already have widespread buy-in from business, industry and investors in Scotland. The Scottish Government stand ready, armed with the fresh mandate they received from the Scottish people earlier this month, to press ahead as soon as the UK Government are willing to do so.

At the conclusion of the Committee stage, the Minister gave—I hope he will not mind me describing it in this way—a somewhat editorialised account of the development of freeports and green ports in Scotland. We could back and forth roundabout that, but I would much rather move forward, just as the Scottish Government would. I hope the Minister would like to do that, too, and will commit to working as quickly as possible with the Scottish Government to bring green ports to fruition in Scotland.

[David Simmonds (Ruislip, Northwood and Pinner) (Con) [V]]

My constituency is not one of those that has the prospect of playing host to a freeport, or indeed being very close to one, but it is a subject of interest to my constituents for a number of reasons. I want to set out briefly what those are and why it is so important that the Government are pressing ahead in this direction.

My constituents are part of outer London, a part of the country which for many years and many generations has had an enormous economic pull factor, including for people like me. I grew up in the south Wales valleys. Following the disappearance of a lot of the heavy industry that was there, and despite a huge amount of effort by the Westminster Government and significant investment by what was then the European Economic Community to develop things such as roads, it is a place that has taken a very long time to see a significant financial and economic regeneration. While I remain sceptical, as many in the House are, about the tax situation of freeports in general, it seems very clear that they are a fantastic opportunity to play a big part in the economic regeneration and levelling up of parts of our country that have really struggled.

As a Conservative politician, it seems to me clear that a policy that is about ensuring people have access to work, a policy that is part of a wider agenda of raising people’s earnings and addressing things from child poverty to health inequalities, which still blight some parts of our country, and a policy that is very much about setting the principles of what we want to see as our economy develops, rather than taking a laissez-faire approach—we want to see the wealth not simply created, but spread and shared—is absolutely the right way forward. Freeports can be a significant part of achieving that.

It is absolutely right, as we have heard from a number of Members, that we have a balanced approach to the use of freeports. I think the port of Tilbury was the last of the UK freeports, but they are in common use around the world, The feedback is clearly very mixed about their economic impact. However, it is very consistent that they act as a draw, as a focus for a local economy, that helps to contribute to creating jobs and opportunities. As a country, we need to do that in places that have simply not had the opportunity for that in the recent past.

My constituents, who have significant concerns, for example, about the pressure on land to be released for housing to provide homes for the people who are currently being drawn in large numbers into our capital—contributing to significant housing waiting lists and significantly rising house prices, sometimes meaning that the children of people who have grown up and live locally are simply not able to settle in that area—see a direct benefit, too, to the whole country having the opportunity of economic levelling up. I therefore see this as a direct benefit to my constituents. It is important to the medium to long-term future of our country, and it is absolutely an inherent and appropriate part of the regeneration and levelling up strategy that we have for the whole of the United Kingdom. I absolutely 100% support this direction of travel and I commend it to the House.