Finance Bill

Stewart Hosie Excerpts

Tuesday 31st October 2017 Commons Chamber

[Kirsty Blackman]

I am delighted to be in the Chamber to talk about the second of the three Finance Bills we will have this year. When the Chancellor stood up and said we would move to having fewer fiscal events a year, I am not sure that this is what he had in mind. I am particularly excited about the third one, which will be coming along soon, and I really hope that it takes account of Brexit because the Government’s Finance Bills have so far failed to do so. I hope we will have a Budget that takes account of the economic shock that will happen as a result of Brexit, puts in place the infrastructure spend that we particularly need and makes it clear that we should stay in the single market.

On our specific concerns about this Finance Bill— I saw you getting a bit edgy, Mr Deputy Speaker, but I will get on to it—I agree with Labour Front Benchers that there have been a number of missed opportunities, and we still have concerns. We have previously mentioned these concerns, but they bear repeating because this place is good like that.

The first issue is VAT on police and fire services. This Finance Bill should have taken the opportunity to remove the VAT paid by Scottish police and fire services. We have made this case time and again and we will continue to do so. I hope that the Chancellor will listen and make changes in the Budget. We would like the VAT that police and fire services have paid to be paid back, and we would like the VAT bill to be got rid of in the future. There is a precedent for doing so—other organisations do not have a VAT bill—and we will carry on making this case very strongly.

[Stewart Hosie (Dundee East) (SNP)]

My hon. Friend makes the interesting point that this is not simply about making a change for the future, but about repaying the money that has been overpaid for some years. Will she re-emphasise to the UK Government the message that we are not simply looking for such a change, but want paid back that which should never have been paid in the first place?

[Kirsty Blackman]

That is absolutely the case, and I thank my hon. Friend for highlighting this point. It is very important that the Government recognise that Scottish police and fire services never needed to pay this money and that they give us back the overpayments that have been made. Frontline police and fire services are losing out as a result of those organisations having to pay VAT.

I have a couple of other points specifically about the Bill. We have already raised the issues involving termination payments, which Labour Front Benchers did a very good job of highlighting. I am very concerned about the impact on vulnerable people and those who have lost their jobs and about the fact that this £430 million tax take for the Treasury means there is £430 million less for people who are made redundant.

I say again that I am pleased by the moves the Minister has made in relation to changing the implementation and phasing in of digital reporting. I appreciate his making it clear that tax measures put in place by the Treasury and implemented by HMRC are constantly under review. My concern is that even though it is said that these things are constantly under review—that is always said during the passage of Finance Bills—there is very little evidence of any reviews actually happening. Certainly, the majority of the reviews that do take place are not made public, so we cannot see the impact of those tax measures. I have done some digging and asked the Library about these matters, but as I say, very few of the reviews have been made public. It would therefore be good if the things the Minister has said will be under constant review were actually under constant review and if that could be shared with Members across the House and not just, for example, people working within HMRC.

I gather that the changes to elections for removing fields from petroleum revenue tax have widely been welcomed by the industry. In two successive Finance Bills, successive Chancellors have committed to changing the tax regime for decommissioning assets, so that it will be easier to transfer late-life assets to a new clearing in the market, which is very important in maximising the economic recovery of the North sea fields. I say again that Chancellors have promised that twice, yet action has not been forthcoming.

The Chancellor has said that the results of the review will be in the Budget. I do not want him to back away from the commitment that he has made. It is very important for the oil industry, not just in Aberdeen and the north-east of Scotland, but for the hundreds of thousands of people who are employed in the industry across the United Kingdom. It is very important that it does happen to maintain confidence in the industry. We have had a period in which things have not been great in the industry. Confidence is beginning to build again and this change would make a huge difference.

Something that we voted against in Committee and that we disagree with is the change to the dividend nil rate. It is being reduced from £5,000 to £2,000. The SNP has argued against that not only because it is the wrong way to go, but because it is being brought in too quickly. People who have set up a small business or become self-employed in the recent past may not know that this change will be coming in and hitting them very shortly, so they will not have built it into their business plan. I am concerned not that it will reduce entrepreneurship, but that it will affect people who have made finely balanced financial decisions about the future fairly soon. We raised those concerns in Committee. For me, this is the worst proposal in the Finance Bill—the one that I disagree with the most and that I would argue against the most strongly.

I have made the key point that the Bill ignores Brexit. I agree with those on the Labour Front Bench that the Bill ignores productivity. Every day, more statistics come out and more issues are raised about the lack of productivity growth in the UK and the ripples that that causes. The Conservatives keep saying how great it is that we have so many people in employment. The problem is that those people are not getting wage rises that even keep pace with inflation. People are getting poorer, even though they are working hard, sometimes in low-paid jobs, simply because wages are not keeping pace with inflation. That is a big concern for us.

When she came to office, the Prime Minister was very clear that she would try to do things for people who are just about managing. Over the past year or so, it has become clear that life for those people has been getting significantly worse. I would like this year’s Budget to take account of that, to take account of the fact that austerity has failed and to take account of the fact that people are poorer as a result of this Government’s policies and make moves to change that.

Question put, That the Bill be now read the Third time.