Finance Bill

Debate between Richard Thomson and Zarah Sultana

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.