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Basic rate limit and personal allowance

Part of Finance (No. 3) Bill – in the House of Commons at 4:42 pm on 19th November 2018.

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Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader 4:42 pm, 19th November 2018

What a pleasure it is, Mr Deputy Speaker, to speak first in this debate. I very much appreciate the way the selection has worked out in my favour today. I rise to speak to amendment 6 and new clauses 7, 8, 9 and 19 in my name and the names of my SNP colleagues. For the avoidance of doubt, should the Opposition press new clause 1, new clause 3, or new clause 18, we will support them.

As I am sure that you, Mr Deputy Speaker, and those on the Treasury Bench will be unsurprised to hear, I would like to start by raising my concerns about the process. It is the case that the personal allowance is reserved while matters relating to the upper limit of basic rate taxation are devolved. I therefore have issues with the way that clause 5 is constructed. I request, as I did on Second Reading, that in future years these two sections of the Finance Bill are split and considered separately. I hope that the Minister and officials will take that on board in drafting future Finance Bills. It would make the debate cleaner and easier to follow for MPs and for those outside the House. As I have said previously, there are real issues with the way that the House scrutinises both tax and spending measures, and this would be a simple change that would ensure that better scrutiny could be brought to bear on these matters.

Amendment 6 would take out provisions removing the legal link between the personal allowance and the national minimum wage. The legal link between the two was put in place to kick in in years where the personal allowance was below £12,500. I have two concerns with the removal of this link. First, we have no guarantee that the personal allowance will not in future be reduced to less than £12,500, because this House cannot bind a future House of Commons and a future Government might decide to reduce, rather than increase, the personal allowance.

Secondly, the minimum wage that is in place still discriminates on the basis of age. It is not fair that those under 25 are paid less than those over 25, yet the UK Government are backing this age discrimination. I do not believe that an over 25-year-old can live on the minimum wage as it is set, and neither does the Living Wage Foundation. I also do not believe that a 16-year-old who might reasonably have the same outgoings as somebody over 25 can live on £4.35 an hour. It is also depressing to note that 16 and 17-year-olds have had an increase of only 3.6% in their minimum wage while the rise for those aged over 25 is 4.9%. I do not understand how the UK Government can justify that, and I think they should remove the age discrimination in relation to the minimum wage so that everybody is paid a fair wage and the minimum wage is enough to live on, instead of being at a level that people cannot live on.