Speaker’s Committee for the Independent Parliamentary Standards Authority

Kirsty Blackman Excerpts

Monday 7th October 2019 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I do not intend to say much in this debate, but I would like to express an incredible amount of thanks to Bronwen Curtis. I have been on the Speaker’s Committee for just over two years now and, like the right hon. Member for Chesham and Amersham (Dame Cheryl Gillan), I found everything she said in those meetings to be incredibly useful and insightful. It was from a position of great knowledge, and also from a position of not being a Member of Parliament, which I think is incredibly useful because she could perhaps see things from outside and take a step back from those of us involved in the minutiae of problems and discussions with IPSA.

I would not like Members in this House to think that SCIPSA is a Committee where we sit quietly. At every meeting that I have had, particularly when IPSA has been represented, we have taken it to task over various issues and problems that have arisen. I would agree entirely about the issues that there have been with the online system. I would also raise the issue that the online system has cost an awful lot more than we expected it would, and SCIPSA has not been backwards in coming forwards on that. We have said to IPSA on many occasions that this is a real problem.

I think Mr Blausten, if the motion is approved, will find the Committee incredibly interesting. I hope that he will go in trying to learn as much as possible about it and, as the right hon. Lady said, perhaps shadow a Member of Parliament, so that he understands exactly how things work in Parliament and how the Member of Parliament’s job works. As I say, the main thing I wanted to do was to thank Bronwen Curtis for all her incredibly hard work and the way in which she treated me, as a new member, when I joined the Committee. I found she was very kind, and she looked out for me a bit when I first joined the Committee, so I am pleased that she was on that Committee.

Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2019

Kirsty Blackman Excerpts

Monday 7th October 2019 General Committees

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a joy to be here under your chairmanship, Mr Hanson, discussing customs once again. Along with the hon. Member for Bootle, the right hon. Member for Central Devon and many others, I have fond memories of going through the customs Bill in the House.

I have quite a few questions, mostly about the process that the legislation has followed and the logic behind our discussing the regulations today. I am very keen to know why this delegated legislation was not brought before the House in good time, before the Prorogation that did not exist. Given that we knew that the previous legislation, as the hon. Member for Bootle mentioned, took us up to only 1 October, why was this change not made previously?

Added to that, why was the change not introduced in good enough time for it to go to the sifting Committee, the European Statutory Instruments Committee, where it could have gone through the normal sifting processes and been looked at by that group of people? I am a member of the sifting Committee, and I have found it incredibly useful to go through the instruments that require sifting. We are able to give Committee members, and other Members across the House, a heads-up on things that require more scrutiny. More notice for Members is always a good thing. We have a ridiculous number of statutory instruments on the agenda today, and we have had a fairly short time to look at them. I would not imagine that the scrutiny that has been done is the best it could possibly have been, as we have not had as much time as we should have had.

The reason why I believe that the Government should or could have brought forward the information before now is the fact that they mention in the explanatory memorandum that an event was held with industry in January, when HMRC heard from industry that it did not have the capacity to comply with the security and safety changes as of exit day. The Government should have known at that point that changes would be required to the legislation, and should have made them much earlier. I would appreciate it if the Minister could let us know why that has not happened. I am focusing particularly on giving HMRC discretionary power to allow up to 12 months extra for a waiver to be granted to individuals.

Paragraph 13.3 of the explanatory notes states:

“Guidance will be published online and on social media platforms and HMRC have customer contact centres that can provide advice on what to do leading up to the UK departure date.”

Can the Minister confirm whether that guidance has already been published, seeing as this instrument was put forward in made affirmative form, and that the Government could therefore have assumed that it was likely to go through, given the choice of process? Has that guidance been published?

This morning, when I walked to school with my daughter, she asked me how many days until Halloween, because Halloween is much more important to her than Brexit day. I looked at my watch and said, “It’s 24 days.” That is 24 days for these companies to look at potential new guidance that may or may not be online at this moment in time. I do not think that that is enough time for companies to work out what they will need to do, or not do; as the hon. Member for Bootle said, there is not a huge amount of clarity about which goods, companies and organisations will be able to get the waiver, and which ones will not.

There are a huge number of instances, especially in the customs Act, but also in a number of areas around financial services, for example, in which HMRC has been given a huge amount of discretion on how to take things forward. It is being given a huge amount of power as to how to take things forward and write guidance. I understand that HMRC is the expert on this and needs a certain amount of discretionary power, but it seems to me that we are giving quite a lot of discretionary power to HMRC on this basis.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The hon. Lady is making an important point about an area of concern. The explanatory memorandum says,

“HMRC will only use the power if needed to respond to business un-readiness that is greater than anticipated.”

It is not clear how “greater than anticipated” will be determined, how transparent the use of the power will be, or who will not be granted an extension.

[Kirsty Blackman]

I absolutely agree with the hon. Lady. In reality, the legislation does not provide more clarity to businesses. In fact, it provides less, because they do not know whether HMRC will be able to grant them the waiver using this discretionary power. Businesses will still have to prepare to put in safety and security declarations because there is no clarity from the Government on whether they definitely will or will not be included in the new regime. It would have been sensible of the UK Government to lift the clauses from the Union customs code and use them to make the customs Act work, but they chose not to.

[Peter Dowd]

On readiness, as the hon. Lady points out, we are less than a month away from leaving the EU, which we have been told will happen come what may, ditches included. It says on Gov.uk:

“Contact your vehicle insurance provider 1 month before you travel to get green cards for your vehicle, caravan or trailer.”

How many of those who know that they are going away in less than a month have their documentation ready?

[Kirsty Blackman]

Certainly too few. In fact, I discovered relatively recently that France and Spain, for example, have different regulations for those taking caravans, trailers or cars abroad. If someone were planning to do some kind of tour around those countries—that is perfectly feasible, given that they have much warmer weather than us at this time of year—they would need different permissions, depending on the country that they are going to. I am particularly concerned that many individuals will not have contacted their insurer in good time.

More specifically on businesses and the waiver, we know that businesses are not prepared for Brexit. If the Government are setting out to try to make things easier for businesses, they are abjectly failing to do so. In reality, the Government chose not to lift and shift the Union customs code. Had they chosen to lift and shift from the code, they would have had to take out certain parts because of the way that it works, but when the customs Act was written—I made this point at the time—the Government chose to bodge some parts of it and do them completely differently, with no rhyme or reason about the way to take it forward. For businesses, that has made things much more complicated than they needed to be. The Government have chosen that route and made the nuts and bolts and red tape much more complicated for businesses.

In circumstances where HMRC does not decide to grant the discretionary waiver to businesses and requires them to submit two separate declarations of security and safety work, how much additional money will that cost businesses? I understand from the explanatory memorandum that an analysis of the cost to businesses has to be done if it is likely to pass a certain threshold. The explanatory memorandum does not state the amount that it would cost businesses to submit those two separate declarations if HMRC decides that it will not use its discretionary power.

The hon. Member for Feltham and Heston mentioned the “greater than anticipated” wording. What level of unreadiness is anticipated? Do the Government anticipate that 50% of businesses making declarations will fail to do so adequately? Does the power kick in only if 51% of businesses fail to do so adequately? What is the anticipated failure rate by businesses before the legislation kicks in for HMRC? I feel that this has been put together in a shoddy way, and that it could have been done much better. Better scrutiny could have been applied if the Government had chosen the better processes that the House agreed for the sifting Committee. The reason we are in this mess today—aside from Brexit in general—is that the Taxation (Cross-border Trade) Act 2018 was not good enough and did not give enough certainty to businesses. That is why we have had to amend it a number of times before exit day.

--- Later in debate ---

[Jesse Norman]

I thank colleagues for the peppering of questions about this piece of legislation. Let me start, if I may, with the hon. Member for Bootle, who was very dismissive of business’s preparedness. He did not recognise the Herculean efforts made to assist businesses with that. If there had not been the delays to Brexit, business would take the current work of the Government more seriously. The Government are attempting to make people understand the reality of the departure from the EU on the 31st of this month.

The hon. Gentleman criticised the Government for making powers via secondary legislation. If the Labour party wished to eschew secondary legislation—if it ever came to power, God forbid—that would be an interesting declaration, and we would look forward to hearing it. Secondary legislation has been a very important part of our system of government for many a long year. It is particularly helpful in areas where regulations can be used to give effect to primary legislation, as in this case.

The hon. Gentleman raised a whole series of questions, which I will go through before turning to others’ questions. He asked why 1 November 2020; as I mentioned, hauliers and carriers have consistently told us that they require 12 months to prepare to submit safety and security declarations. They are increasingly asked to fill these things in directly themselves; they have asked for that extra time, and we are seeking to accommodate them. He asked why there should be a six-month waiver on applying security declarations for empty pallets on exit. The matter is relatively straightforward: if the pallets themselves, or the empty vehicles themselves, are not being exported, there are no goods being carried by them for which safety and security declarations would be required.

The hon. Member for Bootle and the hon. Member for Aberdeen North asked about guidance. There are two forms of guidance. As regards the SI, the guidance the hon. Gentleman seeks is in the explanatory memorandum. As regards the policy roll-out, HMRC has already set out that it will provide guidance and support to assist businesses when the time comes for them to submit declarations.

[Kirsty Blackman]

Will the Minister clarify whether HMRC has published that guidance already?

[Jesse Norman]

HMRC has published some guidance already, and plans to publish more in time for the moment when declarations may come into force.

The hon. Member for Bootle asked whether these powers have the effect of undermining scrutiny. He should be aware that of course Border Force will continue to run checks on goods in the way it does at the moment, and these declarations are independent of customs declarations that might be made.

--- Later in debate ---

[Jesse Norman]

It has always been built into the situation that we cannot control what EU countries may insist or demand. There have been plenty of other areas in which the EU has sought to give reliefs or allow easements for the first period. It has chosen not to do so in this case, but that does not bear on the question of what we require as a matter of import security declarations from our own hauliers and others. That is what the statutory instrument seeks to address.

The hon. Member for Aberdeen North asked about the timing and the process by which the statutory instrument was laid before Parliament. As she will be aware, it was laid on 4 September, which was in plenty of time before 31 October. It should be understood that it was thought at that point that Parliament was going to be prorogued, and that there would have been time to assess the instrument after that, but the timing reflects the reality.

The hon. Member for Aberdeen North asked how the SI relates to the earlier SI introduced by my right hon. Friend the Member for Central Devon. Being in front of him is like being a young priest being pushed up for ordination with the Pope sitting behind him in St Peter’s. It is a great privilege and honour to have him behind me. He will know better than anyone that the SI replaces the earlier one and will come into effect from day one if we have a no-deal scenario.

The hon. Member for Aberdeen North raises an important question about whether too much power has been given to HMRC. She will know that, more widely, I have asked HMRC, alongside Her Majesty’s Treasury, to conduct a serious investigation into the balance of its powers, and to make recommendations on how those can be adjusted. In this case, the power is relatively limited. To remind the Committee, it is a discretionary power, lasting for a year, that allows businesses to submit safety and security declarations for certain exports after the goods have left the UK. It is subject to HMRC’s discretion, but it is required to be exercised according to a public notice.

The broad point is that this is designed to be an intervention that allows HMRC discretion to give additional easements. HMRC does not believe that it needs to do that at the moment; it wishes to have the power to make those easements, conceivably for a 12-month period. In order to do that, it will have to consult Ministers and publish a public notice. It would be a matter of intense public interest if there was any suggestion that those easements picked out a particular subsection in a discriminatory or unfair way, so there are implicit constraints, both of time and of public pressure, on how those powers can be exercised.

[Kirsty Blackman]

I suppose my concern was not just about this SI, but about the fact that I have sat on so many Delegated Legislation Committees, and Committees scrutinising primary legislation as well, that have given additional discretionary powers to HMRC that it can exercise just by means of a public notice, potentially in consultation with Ministers. It seems that HMRC now has a huge amount of these powers that it did not have two or three years ago. I am concerned that it now has too much power, or that nobody is doing an assessment of the powers. I am pleased about the overview. It would be incredibly useful if the Minister could assure me that it will look at all the new discretionary powers that HMRC has gathered.

[Jesse Norman]

That is a very interesting suggestion. The work that is being done at the moment has to do with the way HMRC exercises powers in relation to UK taxpayers, particularly individual taxpayers. Once Brexit has taken place, it would be a very interesting idea to consider whether there should be a further piece of work to assess whether there has been a ratchet in some way that has granted HMRC powers that it ultimately should not have. If the hon. Lady is happy with this, I will take that away and reflect on it, because it is an interesting suggestion. I am grateful to her for it.

I was asked how much declarations and the full panoply of the costs associated with Brexit will affect businesses. The Committee will be aware that this has previously been estimated at £6.5 billion, a fact that has been in the public domain for some time. The impact assessment that has just been published has pushed the figure up to £7.5 billion. Although that is a significant increase of £1 billion, it appears to be related mainly to an increase in business activity and trade over the period measured, and also to a slight tweak to the methodology, rather than to any large rise in underlying costs.

The hon. Member for Aberdeen North raised the issue of the UCC. She will be aware that the Union customs code requires safety and security declarations. We are seeking to waive them and have clarified that we will continue the process of combining export and safety and security declarations. It has been deemed straightforward to incorporate aspects of this directly into our law, rather than to go via the UCC, but I am thankful for the question.

Question put and agreed to.

Resolved,

That the Committee has considered the Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2019 (S.I. 2019, No. 1219).

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 1st October 2019 Commons Chamber

[Sajid Javid]

First, I do not recognise that picture at all. It has been made up by the Liberal Democrats. Secondly, the right hon. Gentleman talks about what is unacceptable. What is unacceptable is for the Liberal Democrats to pretend that the referendum on the European Union never happened.

[Kirsty Blackman (Aberdeen North) (SNP)]

We have heard in the media today that the UK Government will have proposals ready to send to the EU by the end of the Tory conference this week. The Prime Minister’s main negotiating strategy seems to be to convince the EU that we are willing to accept no deal, and hope that it will capitulate at the last minute. Can the Chancellor name one occasion on which the EU has folded at the last minute in international negotiations?

[Sajid Javid]

Can the hon. Lady name a single negotiation in which we have not had the ability to walk away, out of the room?

[Kirsty Blackman]

These are supposed to be questions to the Chancellor, not to me.

Businesses are not ready for a no-deal Brexit. They are already losing EU workers, and are closing down as a result. In a no-deal Brexit, they will be hit by tariffs, and many more of them will sink as a result of that. People will lose their jobs. Given that there is now less than a month until Brexit day, does the Chancellor really believe that there is time to negotiate a deal? If not, will he ensure that the Prime Minister respects the law and requests an extension?

[Sajid Javid]

Significant work is going on to prepare the whole country for a potential no-deal outcome, and that includes helping businesses. I have allocated an additional £2.1 billion on top of the £2 billion that was already there, and that means that we can do much more to help businesses, including sending them more than 750 communications on preparedness and more than 100 technical notices.

Spending Round 2019

Kirsty Blackman Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

I welcome the warm words of my right hon. and learned Friend. I remember all the excellent work he did when he held this position and I hope that I can learn from the way in which he performed his duties as Chancellor.

My right hon. and learned Friend asks me a specific question about the fiscal rules. This spending round is within the current fiscal rules. According to our forecasts, we expect to meet both the key rules of borrowing staying inside 2% of GDP and seeing a further fall in debt as a proportion of GDP. I would, however, point him to some of the other comments I made in my statement about looking again at the fiscal rules, particularly with an eye to taking advantage of record low interest rates and investing more—credibly—in an infrastructure revolution.

[Kirsty Blackman (Aberdeen North) (SNP)]

I thank the Chancellor for advance sight of the statement.

The gimmicks and gems the Chancellor has presented today are nothing more than an effort to distract us from the crippling crisis that the Government are dragging us into. If that was meant to be a pre-election Budget, if I was a Back-Bench Tory I would be quaking in my boots right now. In less than two months, we could face a no-deal Brexit, unless that threat is removed today by the House of Commons supporting the cross-party Bill to secure an extension. The threat cannot be underestimated. We are standing here facing increased uncertainty due to Brexit. The outlook for our economy and for public finances remains extremely uncertain. The economy has already taken a hit, as we saw GDP contract 0.2% in the second quarter of 2019. As Paul Johnson of the Institute for Fiscal Studies put it in The Guardian,

“Making big fiscal announcements in a period of great economic uncertainty means we will have little idea how sustainable or costly decisions made this week will be. The risks are exacerbated by not having up-to-date forecasts from the OBR.”

While the Chancellor has announced increased spending today, this will not help to end austerity; it will only pause some of the hardship in the short term. Meanwhile, Brexit will bring lasting and long-term damage to our economy, and to our citizens’ livelihoods.

With the economy already faltering, the Chancellor’s predecessor has warned that a disruptive no-deal Brexit could have a £90 billion hit on the Exchequer and suggested there would be no money available. A no-deal Brexit would be devastating for Scotland, with the potential to destroy 100,000 Scottish jobs and cost every person the equivalent of £2,300 a year. Brexit caused UK manufacturing activity to contract in August for the fourth consecutive month to the lowest level since 2012. According to the BBC, sterling fell below $1.20 on 3 September to its lowest since October 2016. The Chancellor pretends his Government are putting people first, when in reality they are putting the cult of leave campaigners and their Brexit obsession before the interests of the economy and citizens.

Yesterday in Scotland the First Minister announced our programme for government, putting tackling climate change, protecting our economy and reducing inequality at the heart of our policy-making agenda. Here we are talking about food and medicine shortages, reducing opportunities for our young people and complete Brexit chaos. For the people of Scotland, this is a tale of two Governments, and only the SNP Scottish Government are acting in our interests.

The IFS is clear that pre-election bribes do not mean an end to austerity—that decade of austerity that cumulatively cut the Scottish block grant by more than £12 billion in real terms, left people having to choose between heating their homes and feeding their children and reduced social security payments for disabled people four times faster than the cuts for others.

If the Tories seriously wanted to make life better for citizens, they would give Scotland its fair share. This means the Chancellor should repay the £140 million of VAT owed to Police Scotland in refunds. We have been arguing for years for the convergence uplift moneys to be returned. There are 50 mentions of it in Hansard, 45 of them from the SNP, and most of the others in response to SNP questions. I am pleased with the pressure that we and our colleagues in the Scottish Government have brought to bear on this Government. It also means that Scotland must get its £3.4 billion share of the DUP’s dirty deal Brexit bung. Will the Chancellor rule out any new confidence and supply agreement with the DUP that would give them more money before we get the £3.4 billion we are owed?

Furthermore, it would appear that the Chancellor will overshoot his Government’s borrowing targets. Will he confirm that, and will he tell the House what borrowing rule changes he will introduce in the Budget? Will he guarantee that Scotland will not lose any of the EU funding it currently receives? The UK Government must, at the very least, match the compensation scheme already put in place by the EU and the Irish Government for the beef and suckler sectors in Ireland.

Finally, the Government must scrap the proposed £30,000 salary limit on foreign nationals entering the UK. Scottish Government analysis has found the average EU citizen in Scotland adds £10,400 to Government revenue and £34,400 to GDP each year. The proposed £30,000 salary limit on foreign nationals to the UK has been shown to be unworkable and should be scrapped. While the Tories balance the books on the backs of the most vulnerable and disadvantaged, the SNP Scottish Government are leading the way to deliver a fairer Scotland.

[Sajid Javid]

The hon. Lady complains about the settlement with respect to Scotland. I remind her that, under the Barnett block grant, Scotland will see an increase of £1.2 billion in its spending power next year. On top of that, it will receive an additional £160 million for Scottish farmers, thanks to the representations of Scottish Tory MPs, who seem to actually care about Scottish farmers. Despite that, she complains.

The hon. Lady talked about uncertainty. I would have thought, therefore, that she would have welcomed today’s statement. I think she referred to it as a Budget. First, there is a spending round, which is focused only on spending, not taxes or capital investment, and designed to give certainty to all Departments across Government on funding for the next year. Without it, they would not have that certainty. She claimed that Brexit uncertainty was damaging the economy. Need I remind her that, since the referendum, we have had record growth in British businesses, record growth in jobs—almost 1,000 new jobs created a day, with more people employed today than ever before—and record inward investment? If she wants to end uncertainty, she should support this spending round and make sure we leave the EU on 31 October.

Income Tax

Kirsty Blackman Excerpts

Wednesday 3rd July 2019 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

Let me begin by thanking the Association of Taxation Technicians and the Chartered Institute of Taxation, which have provided me with some information so that I can help to scrutinise this incredibly technical piece of legislation.

I would first like to raise a couple of issues. The tax information and impact note on these regulations explicitly says that there is

“no impact on civil society”.

This is directly contradicted in the explanatory memorandum, paragraph 12.1 of which says that charitable organisations will be required to keep more documentation and to gather together that documentation, which they currently do not have to do. I would suggest that there is a direct impact on civil society, so the tax impact and information note should be updated to reflect that.

I have the same concerns as the shadow Minister, the hon. Member for Bootle (Peter Dowd), on the decision to implement the relief in this way. In June 2018, the Office of Tax Simplification published a report called, “Accounting depreciation or capital allowances? Simplifying tax relief for tangible fixed assets”. It is hugely riveting, I promise. The report said that the tax system should look to reduce, or at least not increase, the different types of expenditure in classes of assets that have to be identified solely for tax purposes. Unfortunately, the way in which the Government have chosen to do this increases the number of classes of assets that have to be identified purely for tax purposes. As this directly contradicts an OTS recommendation, it would be useful if the Minister explained why the Government have chosen to do it this way, and not to change the current system of capital allowances to include this measure, perhaps along with plant and machinery, as this is already a very difficult distinction for people to make. With the lack of published guidance, I fear that the distinction between plant and machinery, and fixed assets, meaning the building itself, will remain difficult to assess. I have concerns about that.

The other issue is about the timing of this legislation. It was announced as something that would happen immediately as part of the Budget on 29 October 2018. However, we are now considering these regulations in July, without the publication of the guidance. We do not have the guidance to be able to work out whether the way in which the measures are being implemented makes sense. And this is not just about parliamentarians’ scrutiny. Businesses and organisations that have operated under this new system since 29 October have had to keep all the relevant documentation since then without knowing what the relevant documentation is and without knowing the exact classes of assets they can claim against under this tax relief.

Given the huge amount of uncertainty businesses are already experiencing because of Brexit, it is incredibly concerning that they must deal with this additional uncertainty. I get what the Government are trying to do; they are trying to make it a more attractive proposition to create and renovate properties. I understand that logic, but they have actually implemented this measure in a cack-handed way that has increased uncertainty this year, and certainly until we get the guidance and see how things are beginning to work.

Concerns have been raised with me about the fact that the Government have chosen not to include prisons and student housing, for example, in this legislation because they fall under a residential remit, rather than under the remit of a commercial property. I understand why they have chosen to do this, but it seems to be a missed opportunity. We cannot class prisons and student accommodation in the same kind of residential category as we would class a dwelling-house, and there may have been an opportunity—particularly given the pressing need for changes in the prison system—to include some flexibility. I am not saying that this is what the Government definitely should have done, but I do not think they considered it enough; nor did they put forward an argument why they did not do it in the documentation that they have published.

The Treasury has said that this will cost £585 million in 2023-24—that that will be the Exchequer impact. Neither the tax information and impact notes, nor any of the other documentation that I can find—perhaps it was more explicitly mentioned in the Budget and I did not catch it—says what is the expected economic impact in terms of an increase in GDP as a result of these changes, which would presumably result in a commensurate increase in the tax that the Exchequer receives. It would be useful to know whether the Government think that this tax relief is value for money and whether it will generate more tax revenue for the economy than it will cost.

The Government have told us that it will cost £17.7 million for new HMRC systems to be put in to administrate this tax, but they have not been clear about the economic benefit that they see coming out of it. That is partly, I think, because of what HMRC said in the tax information document:

“Since Budget 2018, HMRC has attempted to gather further information on the number of those”

businesses

“likely to claim the SBA.”

However, it has not been able to do so. I do not understand how the Government can tell us that this tax relief will have a positive economic benefit if they cannot even tell us which types and numbers of businesses are likely to claim it. It would be useful to know whether the Government have any firmer details on that since the note was published and any information on whether they think that there will be an economic benefit.

My next point, which I am sure the Minister will get very used to me raising during our future deliberations on SIs and in finance debates, is on when the Government intend to review this tax relief. This is a massive tax relief in terms of the fiscal impact that it will have. The Government are saying, I assume, that it will have a positive benefit in terms of its economic impact. I would like to know when they will review it to see whether it is working as intended, because there is no point in having something that will not work as intended. I am sure the Minister will say that there will be a review in three to five years’ time that will be sent to the Treasury Committee and that I just have to look at the Government’s website at some unspecified point during that period. However, can he provide a bit more detail on the exact timescales for a review of this tax relief, given that it is so significant in nature, so that we parliamentarians can scrutinise whether the Government have actually achieved what they set out to do?

My last point is about the guidance, which I have already mentioned. When the guidance is published, will the Minister be sure to ask somebody in his team to ensure that Labour Front Benchers and I have access to it and are made aware of where it is, because it may be published in some place on the HMRC website that we, as people who do not run businesses that claim capital allowances, will not regularly check? It would be incredibly useful if he committed to fulfilling that small ask as well as answering many of my questions.

--- Later in debate ---

[Jesse Norman]

My hon. Friend is right. The point of the relief we are giving through the structures and buildings allowance is precisely to level the playing field and to enable and encourage more business investment.

The hon. Members for Bootle and for Aberdeen North (Kirsty Blackman) asked about reviewing or monitoring. As they will be aware, the Treasury and HMRC continuously monitor tax reliefs according to the level of risk they pose, and they publish annual statistics on tax reliefs, including cost estimates where they are available.

I will now turn to the other points made by the hon. Lady. She says charitable organisations will be heavily affected. The statement that the acquirers of structures or buildings are asked to fill out consists of four factual pieces of information: first, what is the asset; secondly, when was it built; thirdly, when did it come into use; and, lastly, how much did it originally cost? That is not a heavy burden on any institution.

[Kirsty Blackman]

To be fair, I did not say it was a “heavy” burden. The tax information and impact note says that there will be

“no impact on civil society”.

That is not true because there will be an effect on civil society. It may be a minor effect, but there will be one, and I was just asking for the tax information and impact note to be updated to reflect that.

[Jesse Norman]

I perfectly understand, and it is a verbal point. This is subject to a de minimis factor: any Government action will have some minuscule effect on many people, but that does not mean that it is significant enough to register.

The hon. Lady raised a question about process, which I have already addressed. She raised a point about the Office of Tax Simplification. The difficulty with the suggestion it has made is that, if the boundary were removed between buildings that get relief at 2% and plant, fixtures and so on that get relief at 6%, the result would have to be a combined rate of relief somewhere in-between. The effect for many businesses with long-term investments in plant would be that they lost out through reduced relief or delayed relief if the rate went down. There would be a significant number of losers and a negative impact on business investment, when we are trying to have the exact opposite effect.

The hon. Lady raises the issue of student housing. This measure is of course specifically aimed away from residential property and other buildings that function as dwellings and towards commercial properties. For that reason, student housing is not included, but hotels and care homes will qualify because the underlying businesses are service providers whose premises are being used in a trade.

[Kirsty Blackman]

Much of the student housing in my constituency works almost as serviced apartments. They are apartments with one shared kitchen and a number of flats, and they are much more like a hotel or care home in that they are run as businesses and students are there only for a short period. Are those kinds of serviced dwellings for students included or are they not included?

[Jesse Norman]

The answer is that they are not. The hon. Lady is welcome to write to me with specific details of the student housing in her constituency. Of course, many students live in housing that universities would regard as equivalent to hotel accommodation of years ago. However, the general rule is that it is not included, but that hotels and care homes—where there is such trade, as I have described—are included. I think that is a tolerably clear line.

The final point the hon. Lady raised was about the impact on GDP. The independent Office for Budget Responsibility has estimated that the capital allowances package announced at the Budget would increase business investment by 0.4%, so that number has been calculated and put into the public domain.

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Elizabeth Truss]

I can tell the hon. Lady what would lead to greater poverty in this country: a Government who wanted to overthrow capitalism, declare business the enemy and ruin the private sector businesses that are employing people and giving them extra wages.

[Kirsty Blackman (Aberdeen North) (SNP)]

The Chancellor has been at the forefront of arguing that a decade of austerity was necessary. This has led to 24% of Scottish children and 30% of English children being in poverty. If the Chancellor believes that this pain was not ideological and unnecessary, will he vote against a Tory tax cuts for the rich Budget, as proposed by the Prime Minister’s most likely successor?

[Elizabeth Truss]

With respect to the hon. Lady, she clearly did not hear my earlier answer, when I said that absolute poverty after housing costs is at a historic low for children. That is true right across our country. Of course, the Scottish National party Government in Scotland could take steps to help children by improving educational standards; that is what they should be focusing on.

[Kirsty Blackman]

The Minister might not want to tackle inequality, but the Scottish Government do. The polls show that a majority of Scottish people support the tax changes that mean the Scottish Government can fund a £10 a week payment to families with the most vulnerable children, mitigating the ideological austerity obsession of this Conservative Government. If the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) becomes Prime Minister, 53% of Scots will support independence. And who can blame them, given the Scottish Government’s plans to support and help young people, and this Government’s ideological austerity obsession?

[Elizabeth Truss]

The reality is that the Scottish Government are now forecast to bring in lower rates of income tax than expected, because they have not followed through on our raising of the threshold to £50,000, so people in Scotland on £50,000 are now paying £1,500 more tax. The fact is that raising tax reduces incentives for people to get up the earnings ladder, reduces economic growth and means that we do not have the opportunities and funding for public services.

The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019

Kirsty Blackman Excerpts

Monday 24th June 2019 General Committees

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Roberston, and it is very nice to face the new Minister. I am sure we will be in many more Committees together in the coming weeks and months.

I have a few technical concerns and some general comments to make about the order. The explanatory memorandum included a link to the tax information and impact note, but it was not in the place that the link said it would be, and I eventually found it by googling it. The page that we were linked to has not been updated since March 2017 according to the bit at the top. If that can be corrected for future explanatory memorandums, that would be helpful.

The tax information and impact note does not adequately discuss the impact on the industry. It discusses the impact on businesses generally and whether there will be an impact on civil society, but it does not go into the impact on the industry, which is relatively small and will therefore be significantly affected by a change like this. I do not know whether there is an issue with the guidance given to those who draft such notes, or whether that should have been included. I would have expected to see information about the financial impact on the industry in that note so we can make a more informed decision in this Committee. The Government must have received information about that in the consultation responses, so it must have been possible to include that in the information note.

The Conservative Government have not supported the solar and battery industries. There is a climate emergency, so we need much more support for renewables. The UK Government are not supporting onshore wind. We would love there to be more onshore wind in Scotland, but we cannot make that happen because of the lack of support from the Government. If we are to be more reliant on renewables—I think we all want that—and less reliant on fossil fuels for our electricity needs, we need better battery storage. If this order has a negative impact on the development, creation and installation of battery storage, we will be much less likely to meet our climate change obligations and reduce the amount of carbon we are producing throughout the countries of the UK.

The information about the possible differential regional impact that the hon. Member for Bootle presented is important. Choosing a threshold of 60% seems a very odd way to do it. I was looking at the consultation notes, and basically if a supplier pays £400 for the materials and then charges the customer £1,000, they will be eligible for the reduced rate of VAT. However, if they pay £650 for the material and charge the customer £1,000 before VAT, they will not be eligible for the reduced rate, and the customer will therefore be significantly worse off, purely because the labour costs are less in that particular area of the country. That is a really big issue, and it is not adequately discussed in any of the notes—particularly the tax information and impact note. I think that should have been in there because the Government should be considering it.

It seems odd to have this arbitrary method that discriminates against suppliers with smaller labour costs in comparison with the supply cost, and people who have found such suppliers. It would be useful if the Minister explained the reasoning behind choosing this method for working out the costs, because I do not understand the logic behind it.

Breathing Space Scheme

Kirsty Blackman Excerpts

Wednesday 19th June 2019 Commons Chamber

[John Glen]

I welcome my right hon. Friend’s observations on the Church of England’s interventions on financial literacy. The ongoing challenge is to develop national consistency in the delivery of financial education and advice. A number of initiatives are under way, one of which is trying to get financial services providers, particularly the banks, to work in a more co-ordinated way. I am happy to endorse the work of the Church of England, which has been a significant partner in improving financial literacy across the country.

[Kirsty Blackman (Aberdeen North) (SNP)]

I am pleased that the UK Government have decided to put this in place and have set out the mechanism for doing so. In Scotland we have the debt arrangement scheme, which was launched in 2004 and significantly reformed in 2011, and a breathing space is built into that scheme.

Over £200 million of debt has been repaid since the reforms in Scotland, and 6,000 people completed a direct payment plan between 2011 and 2018, so I am pleased to see in the consultation responses published today that the Government have looked at how the system works in Scotland and have learned lessons. It is clear that, where the Scottish system has the powers to do so, we have the ability to trailblaze and lead the way.

In 2016, because of the debt arrangement scheme in Scotland, we had the lowest proportion of over-indebted people of any part of the UK. As austerity continues, we continue to see increases in the number of people suffering under the burden of debt. In 2017 there were 2.4 million children living in families with problem debt in England and Wales. StepChange, the debt charity, has said that 60% of those in problem debt fell into it because of an unexpected life event, and not because of poor money management—something external happened that changed their life, meaning they could no longer manage their debt.

I am concerned about why it will take the Government so long to implement the changes. Surely, as they already deal with a similar system in Scotland, most creditors should be able to take on the changes fairly quickly and roll them out over a wider group of people. Could this be done any quicker than 2021, which is the date I have seen in the papers?

National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill

Kirsty Blackman Excerpts

3rd reading: House of Commons & Programme motion: House of Commons & Report stage: House of Commons
Monday 10th June 2019 Commons Chamber

[Peter Dowd]

My hon. Friend makes an important point. The Government would have us believe that there is an amount of money that people can raise or earn before the testimonial tax—that is what it is—comes in. I am sure that the Minister will be able to explain that to us, but we have had very little help by way of explanation from the Government on this whole area, and the measure is being introduced without significant or appropriate discussion.

Members will no doubt be pleased that I will only speak for another hour—I jest. This is yet another piecemeal reform designed to penalise employers and workers alike, while raising comparatively small sums for the Exchequer compared with the total amount of national insurance contributions that it receives each year, which I identified earlier as more than £130 billion. Of course, the Government remain wedded to cutting taxes for large corporations and the wealthy alike, leaving our public services and ordinary workers footing the bill. In fact—this is important—the right hon. Member for Uxbridge and South Ruislip has committed to £10 billion of tax cuts should he become Prime Minister, with the Institute for Fiscal Studies saying that the biggest beneficiaries would be wealthy pensioners and people living solely off investments, as neither pay national insurance contributions. Actually, all the Members of Parliament here would also be better off under the proposal by the former Foreign Secretary.

The Opposition will not countenance supporting a Bill that will indirectly lead to workers’ termination pay being reduced, especially when Tory hopefuls are throwing even more money at those who do not need it. Nor will we support a Bill that fails to offer any protection for women, older workers or pregnant women who could be financially worse off as a result of this change. If the front-runner for the Tory party leadership can give £10 billion to supporting wealthy investors, we can afford to support pregnant women who have been made redundant. For those reasons, we will oppose this Bill on Report and on Third Reading. I encourage colleagues from across the House to do exactly the same. Thank you very much for your indulgence, Mr Deputy Speaker.

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to take part in a Report stage where the Government do not have amendments to their own Bill. That is quite unusual these days. Most of the Bills that we have seen recently have had Government amendments to them because there have been errors in the drafting, so I congratulate to the Minister for managing to bring in one that has not. Obviously, it would be great if he could see his way to accepting all the amendments tabled by the Opposition and by me, but he can save that up for his speech and let us know then whether he is willing to do so.

I will talk us through the amendments that we have tabled but also make it clear that we are willing to support the amendments tabled by the Opposition. Our new clause 2 is about the impact of the changes to class 1A national insurance contributions on termination awards. It asks for a number of different things, including

“an assessment of the expected impact on…the total net value of termination payments received by individuals…the average net value of such payments; and…the number of business start-ups that are funded by termination payments…in each region of the United Kingdom.”

We ask for this for a number of reasons, but mostly because I was a bit annoyed by what is in the Government’s explanatory notes, which basically said, “We expect there to be no impact on employees”, but actually meant, “We expect there to be no additional tax liability impact on employees.” But the reality is that there will be an impact on employees as employers will choose to give their employees less in termination awards because they will be liable for this class 1A contribution.

I specifically mentioned the number of business start-ups because I am acutely aware of the number of people, particularly where I am in Aberdeen, who struggled during the oil price fall that occurred in 2015-ish and were made redundant as a result of it. A number of them went on to start new businesses because of the termination payment that they received. I am concerned that reducing the amount of termination awards that people receive will mean that there will be fewer of those new business start-ups, and we may not see some of those businesses that go on to be phenomenally successful just for want of a few extra pounds in the termination award that is made.

Another thing that concerns me is that the Government’s projections show that wages for everybody will fall as a result of this additional charge on employers. The Government have admitted that; it is included within the calculation. Even people who are not receiving termination awards or are not, at any stage, likely to receive them—even those who are receiving only the Government’s national living wage, which is a pretendy living wage that people cannot live on, and those who are under 25 and therefore not eligible for it—will experience a reduction in wages as a result of the Government’s changes to employer class 1A liability in relation to termination awards. It is not fair that we are asking people who already do not have enough to live on to pay this additional contribution. That might seem to be an odd position to take in this Chamber when we have Conservative leadership candidates talking about lowering tax for the very richest, but I do not believe that wages should be lowered for those at the bottom of the pile, to increase what is in the Government’s coffers. If we are to do that, surely we should choose, as the Scottish Government have done, to levy that money through a more progressive taxation system.

The other issue with the termination awards aspect relates to the collection method that is described. Currently—this is from the Government’s website—employers pay class 1A and 1B national insurance on expenses and benefits they give to their employees. They have to fill in the forms only once a year and are given a deadline for doing so. The Government have not yet said how they intend these payments to be paid in real time, or how they intend that employers should ensure that they are recording them and paying them in real time. If the Government expect them to do this, they need to clarify that more quickly. I am particularly concerned about the employers who currently do not pay class 1A contributions in any way, shape or form because they do not allow employee benefits such as company cars or health insurance as part of their deal, yet are now being brought into class 1A contributions because, for some unknown reason, the Government have chosen to use class 1A contributions as the method of collection—the method of liability—rather than choosing a different method. Class 1A contributions are not levied on any cash just now; they are levied only on benefits in kind.

Therefore, a number of employers will need to have new computer systems to pay this money. Those who do already pay for benefits in kind will need to have a different computer system that allows them to pay in real time rather than at the end of the year. That will involve a lot of additional work for HMRC and for tax professionals who will have to advise employers on this method. That is an extra cost to employers—not just the actual additional money that they will have to pay but the additional administration cost that they will have to go through. It is incredibly important that if the Government intend to press ahead with this, they do everything they can to ensure that every employer who does not currently have any liability for class 1A contributions, in particular, is well aware of these changes and the new liability that will arise if they make any termination payments in excess of £30,000.

Let me move on to sporting testimonials. My concern is much the same as that raised by Opposition Front Benchers in relation to the donations to charities that are made as a result of sporting testimonials. There will be a new liability for people receiving money as part of sporting testimonials as long as they are not paid through an employee charitable donation-type method. It is a bit much to expect committees that are set up to have to register themselves in this way to pay the sporting testimonial beneficiary through payroll giving. That is a bit of an over-cumbersome situation. A lot of the people who receive money through sporting testimonials give a significant chunk of it to charities. I am therefore concerned about the reduction in charitable giving that there will be as a result of these changes.

The Government have pretty much said that this has a negligible Exchequer impact, but, once again, an additional administrative burden is being built up. This may stop some of these committees going forward with testimonials if they realise that they have to register for payroll giving and have to pay class 1A national insurance contributions as a result.

[Dr Drew]

The hon. Lady will have heard my earlier intervention. It is not uncommon for people to give very generously when they have a favourite sportsperson. It could happen that someone expects to get £30,000 over the course of a year, yet people are so generous that they give £60,000. Should that be backdated? In other words, if the additional £30,000 could be given to charity, does that impact on the whole amount or the part amount? This what happens in real life; it is not as straightforward as perhaps the Government think.

[Kirsty Blackman]

I thank the hon. Gentleman for his intervention. The liability only arises for testimonials of more than £100,000, but I understand his point. For example, I do not know how it would work if a committee were to receive £80,000 on the day of the sporting testimonial and then another £25,000 afterwards in charitable donations. I hope that the Minister will make plain which period the income from a sporting testimonial covers. If the income arises after the sporting testimonial, does it breach the £100,000 cap, and would the liability for class 1A contributions therefore arise, even though it did not occur on the day of the sporting testimonial?

There is also a difference between contractual and non-contractual sporting testimonials. The hon. Member for Oxford East (Anneliese Dodds) made this incredibly clear in Committee and discussed in some detail the definition of “contractual”. The issue is not only the word “contractual”, but whether a sporting testimonial was expected. For example, if everybody who plays centre forward for a football club is given a sporting testimonial, does that mean that everybody should expect a sporting testimonial, or does it just happen that the last five people who played centre forward were amazing at scoring goals and therefore received a sporting testimonial? My concern is that people who did not expect a sporting testimonial will end up, through no fault of their own, in a situation where the Government consider it to be one that they expected to get.

My concern in both cases is the impact on HMRC, which will have a job of work to do in deciding whether the sporting testimonial income creates liability for class 1A contributions. Is it a contractual testimonial? Is it one that the sportsperson should have expected to receive? That will be a difficult set of cases for HMRC to deal with, to come to the correct decisions.

New clause 4 simply says:

“The Secretary of State must, within three years of this Act receiving Royal Assent, lay before Parliament a report on its Exchequer impact.”

Before a Treasury Bill comes before Parliament, explanatory notes and a TIIN—a tax information and impact note—are provided, which we all are able to access. A TIIN projects how much the Treasury expects to receive as a result of tax changes, whether it is a tax relief or an additional tax. I have pushed Ministers before on how we know whether the expected impact was actually received.

The information that I was given in Committee was not as strong as I hoped for. I understand that at an unspecified point in the future, the Treasury Committee will be given a report on the Exchequer impact of tax changes. I do not know who keeps track of when those reports are published or whether a report is provided to the Treasury Committee on all measures that have an Exchequer impact. However, I do know that the Members who serve on the Bill Committee—whether Opposition or Government Members—and who scrutinise the Bill, raise concerns about its progress and ask questions about the potential Exchequer impact do not get a copy of the report. Only the Treasury Committee gets a copy of the report and has the right to scrutinise it.

If the Government cannot accept new clause 4—it would be nice if they did, so that a report was laid before Parliament that we could all see—I ask that when reports are published and sent to the Treasury Committee, all Members who serve on the Bill Committee also receive a copy. It would not be a massive administrative burden on the Treasury to ensure that we were all emailed a copy; I am not even asking for a paper copy. It would mean that Parliament and the Government’s decisions were more transparent. It would also mean that the next time we were asked to take a decision on national insurance contributions or anything else, we could look back at whether the impact that the Exchequer projected was actually received.

I get that there are various reasons why we change taxation. We can change taxation to discourage behaviour that we do not want, to encourage behaviour that we do want, to raise revenue or, as the Government say they are doing in this case, to simplify things—although I have given a number of reasons why this is not the way to simplify national insurance contributions or termination payments. This House can only make sensible decisions about taxation if we understand how accurate the Treasury’s projections are. It would be much better if the Government committed to send us a copy of this report when it goes to the Treasury Committee.

I will not press new clause 4 to a Division, but I am happy to vote with the Opposition on any measures that they press. I hope that the Minister will say yes to the small request I have made, because it would not have a huge administrative impact or cost him anything.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I am grateful for the opportunity to respond to the comments and questions posed by the hon. Members for Aberdeen North (Kirsty Blackman) and for Bootle (Peter Dowd). I shall not detain the House long, but I will try to respond to as many points as possible. I am surprised that the hon. Member for Bootle has raised those concerns and indicated that he intends to vote against this measure, given that he did not divide the House on Second Reading and did not divide the Committee on a single clause.

[Robert Jenrick]

Let me respond to the amendments tabled by the hon. Gentleman and the hon. Member for Aberdeen North. It is a bit like groundhog day, because we have been through these arguments before. I will first address new clauses 1 and 2, which seek to amend the legislation that deals with termination awards, and then new clause 5.

New clauses 1 and 2 seek to commit the Government to report to Parliament on the impact of the changes to termination awards legislation within one year of implementation. They both seek further information on the impact of this measure on individuals whose contracts have ended and on employers. New clause 1 also asks specifically about distributional analysis, while new clause 2 asks the Government to consider the impact on businesses using termination payments to fund a start-up—a matter that we also discussed in Committee.

First, the Government consider that producing such reports is unnecessary, because we have already considered these issues in detail as part of the policy development and extensive consultation process. As we have discussed on a number of occasions, this Bill has been known about for some time. It was published for the first time in 2015. It has been restated in Budgets. It has been consulted on. This is not a new measure; it is well known to individuals and stakeholders who might be affected and to the tax and professional community who will be involved in advising businesses. There is little more to be said on that.

[Kirsty Blackman]

As the Minister has said, we discussed this in Committee, as well as on Second Reading. As we have discussed it before and he knew this question was coming, can he tell us how many businesses use termination payments for their start-up and how many fewer will use it for their start-up as a result of these changes?

[Robert Jenrick]

As I said in answer to the hon. Lady in Committee, that is not information that HMRC collects. Studies are made by independent bodies, some of which I highlighted to her during the previous stage of the Bill. I could direct her to them, but I cannot vouch for the veracity of those studies, which are produced by independent bodies. Of course, there is anecdotal evidence of the number of start-ups created in the event of significant redundancies at particular businesses, but that is not something HMRC collects or would be able to do easily. With great respect to the hon. Lady and the point she is trying to make, I do not agree that that is something we should attempt to do in this case.

The point the hon. Lady raised in her closing remarks was about the review that HM Treasury does in the ordinary course of business. We do intend to do that, and we do so within three to five years of Royal Assent to a Bill. As I explained in Committee, the conclusions on the Bill will be communicated publicly to the Treasury Committee. I understand the point she has made on a number of occasions that we could at that point specifically notify certain Members of this House should they be in this House and remain interested. However, again with respect, I suggest it is perfectly reasonable that we send that to the Treasury Committee, which will publish it. It will be in the public domain, and if she or other right hon. and hon. Members are interested at that stage, they will be able to view it and take it from the Treasury Committee website.

[Kirsty Blackman]

Could the Minister please let us know whether that will be in three years’ time or five years’ time, or at what point in that two-year period should I be watching the Treasury Committee’s website?

[Robert Jenrick]

I cannot tell the hon. Lady that at the present time, and for good reason. We do not know at this moment when will be an appropriate time to review this particular tax. Clearly, it can take time to gather the correct evidential base, and that will vary from tax to tax. We will choose the correct moment when we have the greatest degree of evidence to make an informed decision, but it will be within the three-to-five year window.

The existing processes I have described allow time for the Government to consider an adequate amount of evidence, including administrative and taxpayer data. These do take time to collect. They often involve external research, stakeholder views and other relevant analysis. After one year, as is proposed in new clauses 1 and 2, is rarely the appropriate time to review a new tax. Accepting these new clauses at this stage would mean rushing into reviewing these polices prematurely, without proper consideration and without enough evidence to do so robustly, which is what I think all right hon. and hon. Members would wish us to do.

Secondly, the Government have already explicitly considered the impact on employers and individuals as part of this policy development and the consultation process I have already outlined. We decided on an approach that protected those losing their jobs—for example, by retaining the important £30,000 exemption. We have stressed on a number of occasions throughout the passage of the Bill that the Government certainly have no intention of changing that. Were this or a future Government to do so, it would require an affirmative statutory instrument, which could then be debated and voted on by the House. We have also chosen not to change employee national insurance contributions as well, which we could have done for even greater simplification. We chose not to do so to protect employees in a difficult period in their working lives.

At this point, I would add that this policy has been costed. That was certified by the independent Office for Budget Responsibility, and the methodology for this assessment is described in the Budget policy costing document. The suggestion from the hon. Member for Bootle that this was not properly costed is not correct; it has been independently certified.

New clause 1 also requests that the Government conduct a distributional analysis. As I have set out on a number of occasions, the Government have already assessed the distributional impacts of this policy using the information that is available to us. We are confident that the termination awards affected by these changes will be disproportionately paid by higher and additional rate taxpayers. It will not be possible to make a further assessment until we have collected the administrative data on the impact of this policy, which we will do in due course, and it will of course inform the review we have already described in three to five years’ time.

New clause 2 asks that we consider the impact on start-ups. I have answered the question from the hon. Member for Aberdeen North: we do not hold this data. It is not an easy statistic to collect. It requires tracking the behaviour of an individual across time and between different employments.

--- Later in debate ---

[Kirsty Blackman]

The Bill does not do what the Government set out to do, which is to simplify the tax system. The tax system is not simpler as a result of the changes that are being made. It will be more complicated and companies will have a larger administrative burden. It also reduces wages. I raised concerns about the fact that those who are already at the bottom of the pile will be receiving less in wages as a result of the changes the Government are making. I am happy to vote with the Opposition.

Having said that, I felt that the Committee was good-tempered and we discussed the issues at some length. It was really nice to have an evidence session in Committee. Hopefully, we will move on to the Finance Bill Committee taking evidence so that we can have more informed debates.

Finally, I would like to thank a couple of our staff members who have been involved in the progress of the Bill—Emily Cunningham and Chris Mullins-Silverstein—for their work in supporting us. My speeches would have been much less informed if it had not been for their help and support.

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

Oral Answers to Questions

Kirsty Blackman Excerpts

Tuesday 21st May 2019 Commons Chamber

[John Glen]

Conversations are going on among Treasury Ministers. The Chief Secretary has heard that representation, and announcements will be made in the autumn Budget.

[Kirsty Blackman (Aberdeen North) (SNP)]

In evidence to the Work and Pensions Committee, the Child Poverty Action Group said of the two-child cap:

“You could not design a better policy to increase child poverty than this one”.

Will the Minister use the spending review to ditch that policy?

[John Glen]

We spend £95 billion on working-age benefits, hardship payments, benefit advances and budgeting loans. Obviously all matters are under review in the context of spending decisions, which will be made clear in the autumn Budget.

[Kirsty Blackman]

That is not good enough. Analysis by Cambridge Econometrics states:

“In all of the Brexit scenarios, real wages for low-pay workers are depressed due to increases in prices and reduced levels of productivity, due to skills shortages and lower industry investment.”

Faced with this child poverty double-whammy, does the Minister agree that it is no surprise that the Tories are set for an absolute drubbing on Thursday?

[John Glen]

I listen to the Office for Budget Responsibility, which is forecasting sustained real-wage growth for every one of the next five years. The latest statistics capture household income up to April 2018, but since then we have had a year of real-wage growth.