Schedule 6 — Venture capital trusts

Finance Bill (Ways and Means) (Payment of Corporation Tax) – in the House of Commons at 9:13 pm on 26th October 2015.

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Votes in this debate

  • Division number 93
    A majority of MPs voted for the measures in the Finance Bill including an increase in the income tax personal allowance, and to cap the rates of VAT and income tax at their existing rates until the next general election.

Amendments made: 46, page 124, line 30, leave out sub-paragraph (3) and insert—

‘(3) In subsection (3)—

(a) omit the “and” at the end of paragraph (e),

(b) in paragraph (f), after “by” insert “subsection (3A) and by”, and

(c) after that paragraph insert—

“(g) the permitted maximum age condition by subsection (3A) and by section 280C, and

(h) the no business acquisition condition by subsection (3A) and by section 280D.

(4) After that subsection insert—

“(3A) In the second column of the table in subsection (2), in the entries for the investment limits condition, the permitted maximum age condition and the no business acquisition condition, any reference to an investment made by the company (“the investor”) in a company does not include any of the following investments—

(a) shares or units in an AIF (within the meaning given by regulation 3 of the Alternative Investment Fund Managers Regulations 2013) which may be repurchased or redeemed on 7 days’ notice given by the investor; shares or units in a UCITS (within the meaning given by section 363A(4) of TIOPA 2010) which may be repurchased or redeemed on 7 days’ notice given by the investor;

(b) ordinary shares or securities in a company which are acquired by the company on a regulated market.”

(5) For subsection (5) substitute—

“(5) The Treasury may by regulations—

(a) amend the first entry in the table in subsection (2) (the listing condition),

(b) add, remove or amend an entry in the list of investments in subsection (3A),

(c) amend this section so as to make provision to restrict the period for which an investment made by the company is excluded by subsection (3A), or

(d) amend subsection (4).”

Amendment 47, page 125, line 11, leave out “applies” and insert “is met”.

Amendment 48, page 126, line 44, leave out from “means” to the end of line 3 on page 127 and insert “—

(a) a relevant investment—

(i) which is made in a company at a qualifying time, and

(ii) the money raised by which is employed for the purposes of a trade carried on by another company that is, at a qualifying time, a 51% subsidiary of the relevant company (but, if at the latest possible qualifying time it has ceased to be such a subsidiary, ignoring any money so employed after it last ceased to be such a subsidiary), or

(b) a relevant investment—

(i) which is made in a company at a qualifying time, and

(ii) the money raised by which is employed for the purposes of a trade carried on by that company or another person,

Where, at a qualifying time but after that investment was made, that trade (or a part of it) became a relevant transferred trade (see subsection (3F)).”

Amendment 49, page 128, line 23, leave out “neither condition A nor B” and insert

“none of conditions A to C”.

Amendment 50, page 128, leave out lines 37 to 42 and insert—

‘(5) Condition B is that—

(a) the sum of—

(i) the amount of the current investment, and

(ii) the total amount of any other relevant investments made in the relevant company in a period of 30 consecutive days which includes the investment date,

is at least 50% of the average turnover amount, and

(b) the money raised by the current investment and the investments mentioned in paragraph (a)(ii) is employed for the purpose of entering a new product or geographical market.

(5A) Condition C is that—

(a) condition B in subsection (5) or condition B in section 175A(4) (EIS: permitted company age requirement) was previously met in relation to one or more relevant investments made in the relevant company, and

(b) some or all of the money raised by those investments was employed for the purposes of the same activities as the money raised by the current investment.”

Amendment 51, page 129, leave out lines 38 to 47 and insert—

‘(7) “The average turnover amount” means one fifth of the total relevant turnover amount for the five year period which ends—

(a) immediately before the beginning of the last accounts filing period, or

(b) if later, 12 months before the investment date.”

Amendment 52, page 129, line 48, at end insert—

““entering a new product or geographical market” has the same meaning as in Commission Regulation (EU) No 651/2014 (General block exemption Regulation);”.

Amendment 53, page 130, leave out lines 10 to 14 and insert—

““the total relevant turnover amount” for a period is—

(a) if the relevant company is a single company at the investment date, the sum of—(b) if the relevant company is a parent company at the investment date, the sum of—

“transferred trade” means a trade which has been transferred to the company which is carrying on the trade at the time the money raised by the current investment is employed or to a partnership of which that company is a member;”.

Amendment 54, page 130, line 15, after ““turnover”” insert “—

(a) in relation to a company,”.

Amendment 55, page 130, line 20, at end insert—

“(b) in relation to any other person carrying on a trade, also has the meaning given by section 474(1) of that Act (reading references in that provision to a company as references to the person) and is to be determined by reference to the accounts of the person and amounts recognised for accounting purposes (and such apportionments of those amounts as are just and reasonable are to be made for the purpose of determining a person’s turnover for a period);

“(c) in relation to a transferred trade carried on by a company or other person, means such proportion of the turnover of the company or other person as it is just and reasonable to attribute to the transferred trade.”

Amendment 56, page 130, line 36, leave out “previously”.

Amendment 57, page 131, line 40, leave out “and” and insert—

“(aa) any other relevant investment made in a company to the extent that the money raised by the investment has been employed for the purposes of a trade carried on by another company that has at any time in that year been a 51% subsidiary of the relevant company (but, if it is not such a subsidiary at the end of that year, ignoring any money so employed after it last ceased to be such a subsidiary), and”.

Amendment 58, page 133, line 17, leave out “and” and insert—

“(aa) any other relevant investment made in a company to the extent that the money raised by the investment has been employed for the purposes of a trade carried on by another company that has at any time on or before the investment date been a 51% subsidiary of the relevant company (but, if it is not such a subsidiary at the investment date, ignoring any money so employed after it last ceased to be such a subsidiary), and”.

Amendment 59, page 135, line 3, leave out “and” and insert—

“(aa) any other relevant investment made in a company to the extent that the money raised by the investment has been employed for the purposes of a trade carried on by another company that has at any time before the relevant time been a 51% subsidiary of the relevant company (but, if it is not such a subsidiary at the relevant time, ignoring any money so employed after it last ceased to be such a subsidiary), and”.

Amendment 60, page 136, line 40, leave out “or B” and insert “, B or C”.

Amendment 61, page 137, line 9, after “that” insert “—

(a) ”.

Amendment 62, page 137, line 12, at end insert “, and

(b) the money raised by those investments is employed for the purpose of entering a new product or geographical market.”

Amendment 63, page 137, line 12, at end insert—

‘(4A) Condition C is that—

(a) condition B in subsection (4) or condition B in section 175A(4) (EIS: permitted company age requirement) was previously met in relation to one or more relevant investments made in the relevant company, and

(b) some or all of the money raised by those investment was employed for the purposes of the relevant qualifying activity.”

Amendment 64, page 138, leave out lines 3 to 12 and insert—

‘(6) “The average turnover amount” means one fifth of the total relevant turnover amount for the five year period which ends—

(a) immediately before the beginning of the last accounts filing period, or

(b) if later, 12 months before the investment date.”

Amendment 65, page 138, line 13, at end insert—

““entering a new product or geographical market” has the same meaning as in Commission Regulation (EU) No 651/2014 (General block exemption Regulation);”.

Amendment 66, page 138, leave out lines 31 to 35 and insert—

““the total relevant turnover amount” for a period is—

(a) if the relevant company is a single company at the investment date, the sum of—(b) if the relevant company is a parent company at the investment date, the sum of—

“transferred trade” means a trade which has been transferred to the company which is carrying on the trade at the time the money raised by the issue of the relevant holding is employed or to a partnership of which that company is a member;”.

Amendment 67, page 138, line 36, after ““turnover”” insert “—

(a) in relation to a company,”.

Amendment 68, page 138, line 41, at end insert—

“(b) in relation to any other person carrying on a trade, also has the meaning given by section 474(1) of that Act (reading references in that provision to a company as references to the person) and is to be determined by reference to the accounts of the person and amounts recognised for accounting purposes (and such apportionments of those amounts as are just and reasonable are to be made for the purpose of determining a person’s turnover for a period);

“(c) in relation to a transferred trade carried on by a company or other person, means such proportion of the turnover of the company or other person as it is just and reasonable to attribute to the transferred trade;”.

Amendment 69, page 139, line 42, at end insert—

“Acquisitions for restructuring purposes

15A (1) Section 326 (restructuring to which section 327 applies) is amended as follows.

(2) In subsection (1), for “Section 327 applies” substitute “Sections 326A and 327 apply”.

(3) In subsection (4) for the words from the beginning to “as being met” substitute “Nothing in section 326A treats any of the requirements of Chapter 3 as being met, and nothing in section 327 treats any of the requirement of Chapter 4 as being met”.

(4) In subsection (5), before “327” insert “326A does not treat any requirement of Chapter 3 as being met and section”.

15B After section 326 insert—

“326A  Certain requirements of Chapter 3 to be treated as met

(1) If this section applies, subsections (2) to (6) have effect to determine the extent to which, and the time for which, the following conditions in Chapter 3 are met in relation to the old shares and the new shares—

(none) the investment limits condition (see section 280B);

(none) the permitted maximum age condition (see section 280C);

(none) the no business acquisition condition (see section 280D).

(2) If—

(a) there is an exchange under the arrangements of any new shares for any old shares, and

(b) those old shares are an investment in relation to which the investment limits condition, the permitted maximum age condition or the no business acquisition condition is (or is treated as being) met to any extent,

those conditions are to be treated as met to the same extent in relation to the matching new shares.

See subsections (3) to (6) for further provision about when those conditions are treated as met in relation to the old shares.

(3) If—

(a) the exchange occurs during the period of 5 years beginning with the day after the day on which the old shares were issued, and

(b) those old shares are shares in relation to which section 280B(2)(c) applies,

section 280B(2)(c) is to be treated as applying in relation to the matching new shares.

(4) In determining whether section 280B(2)(c) applies in relation to the old shares—

(a) condition A is treated as met if it would be met if the reference in section 280B(3B)(a)(i) to a company which becomes a 51% subsidiary of the relevant company during the 5-year post-investment period included a reference to a company which becomes a 51% subsidiary of the new company during that period otherwise than as a result of the exchange, and

(b) in relation to investments made or trades transferred at or after the time of the exchange, references to the relevant company in section 280B(3C)(b) and (3F)(a) are to be read as references to the new company.

(5) The permitted maximum age condition is met in relation to the old shares if (and only if) it would be met if—

(a) in section 280C(5)(a)(ii) and (5A)(a) the references to relevant investments made in the relevant company included a reference to the relevant investments made in the new company,

(b) in section 280C(6)(d) and (f) the references to the relevant company included a reference to the new company,

(c) in paragraphs (a)(ii) and (b)(iii) of the definition of “the total relevant turnover amount” in section 280C(8) the reference to a company which becomes a 51% subsidiary of the relevant company after the investment date included a reference to a company which becomes a 51% subsidiary of the new company after that date otherwise than as a result of the exchange.

(6) The no business acquisition condition is met in relation to the old shares if (and only if) it would be met if, in section 280D(2), references to the relevant company were read as including a reference to the new company.”

15C (1) Section 327 (certain requirements of Chapter 4 to be treated as met) is amended as follows.

(2) In subsection (1)—

(a) after the entry for section 291 insert—

“section 292A (the maximum amount raised annually through risk finance investments requirement),

section 292AA (the maximum amount raised through risk finance investments when relevant holding is issued requirement),

section 292AB (the maximum risk finance investments during the 5-year post-investment period requirement),”,

(b) after the entry for section 294 insert—

“section 294A (the permitted company age requirement),”, and

(c) omit the “and” at the end of the entry for section 297, and after the entry for section 297A insert “, and

section 297B (the proportion of skilled employees requirement).”

(3) In subsection (4)—

(a) after “sections” insert “292A, 292AA, 292AB”

(b) after “294” insert “, 294A”, and

(c) for “and 297A” substitute “, 297A and 297B”.

(4) After subsection (4) insert—

“(4A) If—

(a) there is an exchange under the arrangements of any new shares for any old shares,

(b) that exchange occurs during the period of 5 years beginning with the day after the day on which the old shares were issued, and

(c) those old shares are shares in relation to which the requirement of section 292AB (maximum risk finance investments during 5-year post-investment period) applies and is met,

that requirement is to be treated as applying and met in relation to the matching new shares.

(4B) But, where that requirement applies in relation to the old shares, it is met in relation to those shares if (and only if) it would be met were—

(a) the first reference to the relevant company in section 292AB(4), and

(b) the references to the relevant company in section 292AB(5) and (7)(a)(i),

read, in relation to times in that 5 year period which fall at or after the time of the exchange, as references to the new company.

(4C) For the purposes of subsections (4A) and (4B), the requirement in section 292AB is treated as applying in relation to the old shares if condition A or B in that section would be met if references in section 292AB(5) and (7)(a)(i) to the relevant company were read as references to the new company.

(4D) The requirement in section 293 (the use of money raised) is met in relation to the old shares if (and only if) it would be met if references to the relevant company in section 293(5ZA) were read as including a reference to the new company.

(4E) The requirement of section 294A (permitted company age) is met in relation to the old shares if (and only if) it would be met if—

(a) in section 294A(4) the reference to relevant investments made in the relevant company included a reference to relevant investments made in the new company,

(b) in section 294A(5)(d) and (f) the references to the relevant company included a reference to the new company,

(c) in paragraphs (a)(ii) and (b)(iii) of the definition of “the total turnover amount” in section 294A(7) the reference to a company which becomes a 51% subsidiary of the relevant company after the investment date included a reference to a company which becomes a 51% subsidiary of the new company after that date otherwise than as a result of the exchange.

(4F) If—

(a) there is an exchange under the arrangements of any new shares for any old shares,

(b) that exchange occurs during the period of 3 years beginning with the issue of the old shares, and

(c) those old shares are shares in relation to which the requirement of section 297B (proportion of skilled employees requirement) is met,

that requirement is to be treated as met in relation to the matching new shares.

(4G) The requirement of section 297B is met in relation to the old shares if (and only if) it would be met in relation to those shares were references to the relevant company, in subsections (1) and (3) of that section (and, in the definitions of the terms mentioned in subsection (4) as they apply for the purposes of those subsections), read as references to the new company in relation to times in that 3 year period which fall at or after the exchange.”

Amendment 70, page 140, line 13, at end insert—

‘( ) Regulations under this section may, so long as they do not increase any person’s liability to any tax, be made to have retrospective effect in relation to any time in the tax year in which they are made or the previous tax year.”—(Mr Gauke.)

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

On a point of order, Mr Speaker. In the light of the votes in the other place this evening, the Chancellor has, I believe, informed the media that he will bring forward measures to respond to the Government’s defeats. It is the responsibility of Ministers, as you know and as you have ruled to make this sort of announcement to this House first. While there are indeed Treasury questions tomorrow, given the level of interest from Members in all parts of the House and the significance of this matter, I am asking that the Chancellor make an oral statement to this House tomorrow, promptly.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

I am grateful to the shadow Chancellor for his point of order. Those on the Treasury Bench will have heard what he has said. It is open to a Minister to do that tomorrow. Given that a Treasury Minister is present on the Treasury Bench, he is welcome to rise to his feet if he wishes.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

So be it; the House will understand. It is not a matter for the Chair; I am simply playing fair. It is a matter for the Government, and the Minister could speak now if he wished, but he is not under any obligation to do so. The point of order has been heard. John McDonnell will be in his place tomorrow—and so will the Chancellor be—and we will await the development of events.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (House of Lords)

Further to that point of order, Mr Speaker. Given the result of the vote in the other place tonight, I would appreciate it if, in addition to Treasury questions tomorrow, the Prime Minister could assure the House that he will not flood the other place with more cronies and donors.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

Perhaps I can just say to the hon. Lady and the House that, while I hear what she has to say, the late Lord Whitelaw was the author of a vintage phrase in British politics. As he put it, “I tend to prefer to cross bridges only when I come to them.” It seemed to be a very sagacious utterance by Lord Whitelaw. All I will say to the House now—as much for the benefit of those outside this place as of Members—is this. Two sentences: first, the parent Act specifies that the Government cannot make the regulations unless a draft has been approved by both Houses. I think we can all agree upon that. Secondly, it is up to the Government to decide how to proceed. We will leave it there for now.

Third Reading

Photo of David Gauke David Gauke The Financial Secretary to the Treasury 9:43 pm, 26th October 2015

I beg to move, That the Bill be now read the Third time.

I would like once again to briefly outline the provisions of this Finance Bill. These measures demonstrate the Government’s commitment to support working people, support business and protect the public finances by tackling tax avoidance and evasion. They mark the next steps on our path to economic security, building on the economic foundations laid in the last Parliament and continuing our long-term plan for the economic stability and prosperity of this country.

Let me turn first to the support that the Bill provides for working people. This Government are committed to the principle that hard-working people should keep more of the money they earn. That is why, following the measures introduced in the last Parliament, 27.5 million individuals saw their typical income tax bill reduced by £825, but we want to go further. This Bill increases the tax-free personal allowance to £11,000 in 2016-17 and to £11,200 in 2017-18. We will also increase the higher rate threshold, from £42,385 in 2015-16 to £43,000 in 2016-17. The Government also believe that individuals working 30 hours a week on the national minimum wage should not pay income tax. That is why we are enshrining it in law that once the personal allowance has reached £12,500, it will always be at least the equivalent of 30 hours a week on the national minimum wage.

It is a basic human aspiration to pass something on to one’s children, an aspiration the Government are committed to supporting. The Bill will help people to provide for their families after they have gone by phasing in a new £175,000 per person transferable allowance, when a person’s home is passed on at death to their direct descendants. By the end of the Parliament, the effective inheritance tax threshold for married couples and civil partners will therefore be £1 million.

Photo of Anne Main Anne Main Conservative, St Albans

Does my hon. Friend agree that all the very welcome movements in the tax bands for lower earners have helped to readjust the inequality created by Labour when it managed to remove the 10p tax band?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

My hon. Friend is right. Whereas the previous Labour Government doubled the 10p rate of income tax, this Government and the coalition Government increased the personal allowance very substantially from below £6,500 to the levels I have set out this evening.

I turn now to the support that the Bill will provide to business. We want to provide certainty to businesses, increase investment and improve our infrastructure, because that will drive growth and job creation in the coming years. First, it is clear that we need a business tax regime that is stable, competitive and fair. This is essential to make the UK more competitive and to support growth. In the previous Parliament, the main rate of corporation tax was cut from 28% to 20%, which led to more businesses coming to the UK to carry out their activity. Given the global competition that the UK faces, we must go further. This Bill cuts the corporation tax rate to 19% in 2017 and to 18% in 2020, saving businesses more than £6 billion in 2021 and giving the UK the lowest rate of corporation tax in the G20. The Bill also sets the annual investment allowance at the permanent higher level of £200,000. This will provide long-term certainty to businesses and encourage them to invest in plant and machinery.

Finally, I would like to turn to the measures in the Bill that tackle tax avoidance and evasion, tax planning, compliance and imbalances in our tax system. Hon. Members will recall that the summer Budget announced a raft of measures to tackle those who do not pay their fair share of tax. The measures will collectively raise £5 billion a year by 2019-20. I am proud to say that the Bill will implement a number of those measures and will make an important contribution to the further £37 billion in fiscal consolidation that is required over the course of this Parliament to run a budget surplus by the end of this Parliament.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

Let me make a little progress.

First, the Bill ensures that investment fund managers cannot exploit tax loopholes to avoid paying capital gains tax. We will also address a tax planning risk in which corporate groups could exploit tax rules for asset transfers between connected parties. This ensures that profits are brought to tax.

Finally, the Bill modernises HMRC collection powers by allowing HMRC to recover tax and tax credit debts directly from a debtor’s accounts. This measure will tackle those who seek to play the system and who are avoiding paying their fair share of tax, which they can afford to pay. This measure will also, of course, be subject to robust safeguards and the most vulnerable will be protected. Taken together, these measures will protect our public finances and send a clear message that everyone in Britain must pay their fair share of tax.

Photo of George Kerevan George Kerevan Scottish National Party, East Lothian

In terms of helping business, would the Minister care to comment on press reports this morning that the Government are planning to abolish research grants to industry and replace them with loans, on which interest would be paid?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

That is not a measure contained in the Bill. Let us be clear: as a consequence of the Bill, the UK’s competitive position has been strengthened, not least in a reduction of the rate of corporation tax from 20% to 18%, a measure I am delighted to say that the Labour party supported in Committee.

Before I conclude, I want to thank hon. Members on both sides of the House for their scrutiny of the Bill. In particular, I want to thank members of the Committee, who provided diligent but efficient scrutiny, concluding our proceedings in just nine hours. This smooth and efficient running was due in part to the support of the Whips, my hon. Friend Mel Stride, Conor McGinn and, before him, Nic Dakin.

I also want to thank the Opposition. We did not always agree in full, especially on the need for a fair number of reviews, but I was grateful for their insightful and reasonable scrutiny and their gracious support where we did agree. Finally, I want to thank the Economic Secretary to the Treasury, my hon. Friend Harriett Baldwin, and the Exchequer Secretary to the Treasury, my hon. Friend Damian Hinds, for their support in setting out the Government’s case, and my hon. Friends on the Back Benches for their valuable contributions.

In conclusion, the Bill supports working people and business and protects our public finances, and it marks the next step forward in securing the country’s economic security. I therefore commend it to the House.

Photo of Rob Marris Rob Marris Shadow Minister (Treasury) 9:50 pm, 26th October 2015

This is a mixed Finance Bill. It contains some measures with which the Opposition agree: the changes to personal allowances; the welcome increase in the annual investment allowance; the surcharge on banks; the provisions to encourage more to be spent on research and development; the provisions on carried interest—though they do not go far enough; and the anti-avoidance provisions for enterprise investment schemes, venture capital trusts and controlled foreign companies.

But the Bill also discloses some wrong priorities, which I shall list in no particular order. The changes to inheritance tax—it will not surprise Members to hear me mention this, in the light of our debate earlier—are a giveaway to the most well off in our society. The cut to corporation tax is a beggar-my-neighbour, downward, low-tax regime competition measure aimed at covering up the failures on productivity. We disagree with lowering the bank levy rate. The provisions on vehicle excise duty take us backwards by favouring gas guzzlers and penalising drivers of less dirty vehicles. Some 16 or 17 years ago, journalists would have called the marked increase to insurance premium tax a stealth tax.

The changes to the climate change levy are a step backwards that indicates the Government have lessened their commitment to the environment and can no longer make the laughable claim to be the greenest Government ever—it is one of a host of changes indicating that they are not serious about our environment. We disagree with the provisions on the direct recovery of debt that allow HMRC to take money out of someone’s bank account without a court order. They are doing this because they find, as so many people do, that the court system is costly and slow, but rather than change the court system, for which they are responsible, they are simply introducing a different rule for themselves. They have done the same in clause 48 with interest on judgment debts. It is one rule for them and another rule for the rest of us.

I warn the Government: they are straining our constitution. Late last week, they tabled about 75 amendments for Report stretching to 40 pages and dealing with highly technical matters, which suggests that they are not entirely sure what they are doing. Last week, we also saw the longest Standing Order in living memory detailing the changes to English votes. This is not a great way to treat our constitution.

Then we see the potential constitutional tussle with the House of Lords over tax credits, brought about by this Government’s decision to proceed with a fundamental change to tax credits, which will cost working families thousands of pounds, by using a statutory instrument rather than putting the provisions in this Finance Bill. Clearly, this Finance Bill, like all Finance Bills, would never have gone near the House of Lords. This Government tried to box clever by putting the tax credit changes in a statutory instrument and they have been caught swimming without trunks when the tide went out. It is a constitutional tussle that we did not need and it would not have happened if they had put those provisions in the Finance Bill.

We need to see this Finance Bill in the context of the economy. It is great news that employment is up, albeit that too many of the jobs are low paid and insecure. It is great that, at last, we have some economic growth that extends outside London and the south-east. Before Conservative Members start cheering too much, there are ill winds blowing domestically. The deficit on the balance of payments, at 6.5% of gross domestic product, is the highest in peacetime. Inflation targets have been missed, and productivity stalled, which the Government try to mask with a change in the corporation tax rate. GDP per capita, after six years of the Conservatives leading a Government in this country, is still in recovery. Living standards are, at last, starting to rise, which is welcome, but this is happening in the private sector, not in the public sector, where the Government continue their wage freezes. Living standards have stalled for five years because of the—

Photo of Philip Davies Philip Davies Conservative, Shipley

On a point of order, Mr Speaker. Rob Marris is droning on about all sorts of stuff. My understanding is that Third Readings are supposed to be about what is in the Bill, not just a general drone about the economy. Will you rule on that, Mr Speaker? [Interruption.]

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

Order. I was listening closely, and allowing Rob Marris some latitude, but the thrust of the point of order is correct. I should emphasise that this is not a portmanteau debate for the airing of a miscellany of grievances. This is a relatively narrow Third Reading about what is in the Bill, upon which I know the hon. Gentleman will now dilate for the remaining two and a half minutes.

Photo of Rob Marris Rob Marris Shadow Minister (Treasury)

I thank you for that guidance, Mr Speaker. I prefaced my remarks by saying that I was putting the Finance Bill in the context of the economy in which it takes place. That is what I said, as

Hansard will show. I think that the context of the Finance Bill is important, Mr Speaker, because otherwise one cannot judge whether the provisions are adequate for the country in which we live.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

I entirely understand the point, but there are two minutes left, so the context has to be very pithily stated before the hon. Gentleman gets on to the substance.

Photo of Rob Marris Rob Marris Shadow Minister (Treasury)

It will be, Mr Speaker. I was on to my peroration before Philip Davies raised his point of order.

The national debt is up by 60% at the end of the tax year, so what is all this about protecting the next generation? The Government have missed their targets for five years, and they have been privatising debt for the next generation when it comes to student loans and costs for home buyers. We have a household debt bubble growing. This Government have slashed public investment and are substituting it with the private finance initiative. The measures in this Bill will not be sufficient to address the problems our nation is facing. What we need is public investment—and we need it in housing, in energy and in skills. This Government have mishandled the economy, and trouble will be brewing unless they change course. They should invest in infrastructure and skills.

Photo of Roger Mullin Roger Mullin Shadow SNP Spokesperson (Treasury) 9:59 pm, 26th October 2015

In a style becoming familiar to this House, let me say that Barbara from Kirkcaldy says:

“This Finance Bill is a disgrace to hard-working people”,

and I always agree with my wife! It is a deliberate slight on the people of Scotland, and it deserves and will get no support from SNP Members. The Government have once again denied the rightful exemption of VAT for our emergency services. Once again, they are harming the environment, and once again they are favouring the rich. We oppose this Bill.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

Thank you, Mr Mullin. There are 12 seconds remaining, but no hon. Member is getting to his or her feet. Time is running out, the moment is arriving—and I do believe that we are going to have the vote.

Debate interrupted (Programme Order, this day).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

The House divided:

Ayes 316, Noes 278.

Division number 93 Finance Bill 2015-16 — Third Reading

A majority of MPs voted for the measures in the Finance Bill including an increase in the income tax personal allowance, and to cap the rates of VAT and income tax at their existing rates until the next general election.

Aye: 317 MPs

No: 278 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 50 MPs

Absents: A-Z by last name

Question accordingly agreed to.

Bill read the Third time and passed.