Finance Bill

Debate between Steve McCabe and Philip Boswell

Tuesday 6th September 2016 Commons Chamber

[Philip Boswell]

There are several new clauses on which I intend to speak—most of them briefly—and the first is new clause 18.

New clause 18 calls for a review of the impact of section 24 of the Finance Act 2015. I and my SNP colleagues have concerns that the changes made in section 24 may have adverse consequences on the availability of affordable housing in Scotland and beyond. That legislation seems to be yet another London-centric policy that fails to take account of the diversity of the housing market throughout the UK.

Unlike other parts of the UK, where large rental agencies dominate, Scotland has a disproportionate number of landlords who own a small number of properties. That is hugely beneficial to tenants—particularly those on low incomes—as those small-scale landlords are often more willing to rent properties at an affordable price and to those relying on social security as a safety net. Owing to the changes introduced in section 24, we are concerned that those small-scale landlords may be forced drastically to increase rental costs, causing houses to be less affordable, or to sell their properties, potentially resulting in their being purchased by less sympathetic landlords or agencies. Given the UK-wide housing crisis that we are suffering and the rising cost of rented accommodation, it is incredibly important to ensure that landlords who rent at affordable prices and to those who depend on social security as a safety net are not pushed out of the market. New clause 18 therefore calls for a review of the impact of these changes on the availability of affordable housing so that those on lower incomes are not adversely affected.

New clause 6 calls for a review of the VAT treatment of the Scottish Police Authority and the Scottish fire and rescue service. I thank the Minister for her comments and consideration in her introductory remarks. Many in this Chamber may be familiar with the matter of VAT in relation to the Scottish police and fire rescue services, which my colleagues have raised in this House on a number of occasions. This remains an incredibly important matter that this Government have failed properly to address. Since the incorporation of police and fire authorities in 2013, the Scottish Police Authority and the Scottish fire and rescue services have been charged VAT by the UK Treasury. This UK Government have refused to grant an exemption to these vital services in Scotland, despite the fact that since the time of incorporation the HMRC has handed out exemptions to the new transport agency Highways England, and Olympic legacy organisation the London Legacy Development Corporation.

This Tory-backed charge on essential Scottish public services is costing emergency services tens of millions every year that could and should be spent on frontline services. Only in June, it was reported that Scotland’s police force has paid £76.5 million in VAT since it was formed three years ago and remains unable to claim this money. It is worth noting that only the Scottish police and fire services have been expected to pay VAT to Her Majesty’s Revenue and Customs and not English, Welsh or Northern Irish services. This is a disgrace. It seems absurd and unfair for this Tory UK Government to continually expect the Scottish Government to rectify the matter and cover the difference, especially given the consistent cuts to the pocket money they grant Scotland to run devolved matters. New clause 6 therefore seeks a review of the impacts of the VAT treatment on the Scottish police and Scottish fire and rescue services, including analysis of the impact of the financial position of these services arising from their VAT treatment.

I turn briefly to new clause 15, which seeks to prevent VAT from being increased on the installation of energy-saving materials. I agree with the intent of the right hon. Member for Wokingham (John Redwood) to prevent these VAT increases, if not his methods. This Tory Government have consistently instituted regressive policies in relation to clean energy and energy-efficiency measures, from cuts to the solar subsidies—

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does the hon. Gentleman agree that this would be a relatively cheap way of incentivising householders and energy-saving products in addressing some of the damage that the Government and the previous coalition Government did by, in effect, dismantling the green energy policy they claimed to support at the outset?

[Philip Boswell]

I thank the hon. Gentleman and agree wholeheartedly with his comments.

From cuts to solar subsidies, to the scrapping of onshore wind, to the scrapping of the green deal for energy for energy-efficient homes that the hon. Gentleman mentioned, to the selling of the UK Green Investment Bank—there are numerous other examples—this austerity-obsessed Government are taking the UK backwards with regard to renewable energy. I fear that with Brexit looming on the horizon this trajectory is set to continue. Given this environment of cuts, it seems logical for the installation of energy-saving materials to be exempt from a hike in VAT, as a bare minimum.

I will now speak to new clause 8 on dividend income. In Committee, my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) tabled an amendment regarding the proposed changes to the treatment of dividend income by HMRC. My colleagues and I feel that this issue has not yet been sufficiently addressed by the Government. We did not press the new clause to a vote at that time so that we could address the matter at a later date, and we do so now. I do not wish to rehash previous points made, but this is a matter of great importance and, as such, we have tabled the new clause. Numerous stakeholder groups raised concerns with the Committee regarding the regressive impact of the changes to dividend income proposed in this Bill, particularly the effect on small and microbusinesses, which employ between one and nine people. Those raising concerns have highlighted that the changes will have a disproportionate effect on microbusinesses run by owner-operators on modest incomes, given that there are already numerous disincentives to running microbusinesses—as opposed to traditional salaried employment—including, but not limited to, a lower level of job security and a lack of employer pension contributions.