Schedule 24 - Penalties for deliberately withholding information

Finance Bill – in the House of Commons at 9:45 pm on 24th May 2021.

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Amendment made: 22, page 255, line 40, leave out “transfer” and insert “matter”.—(Jesse Norman.)

This amendment ensures that references to “category 1 information”, for the purposes of penalties for deliberately withholding tax information, operate as intended by reference to “offshore matters”.

Third Reading

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 10:20 pm, 24th May 2021

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

I thank right hon. and hon. Members who have contributed to the robust but, I would say, good-natured debate throughout this Finance Bill’s passage over the past two months. It has been a speedy but thoroughly effective process. Before I get into the bulk of my speech, I know that Sammy Wilson wants to put a question to me, so let me recognise him.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

I thank the Minister for giving way. I tried to catch his eye earlier on; I do not think that he is deliberately avoiding me, but I did not get the chance to talk to him. New schedule 1 refers to VAT on distance selling. It covers 55 pages and was introduced tonight without much chance of consideration. It will affect businesses with a threshold of sales of £8,818, which will require them to register and to do special accounting. What assessment has been made of the likely impact of that on small businesses in Northern Ireland that sell goods into the EU?

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

I rather regret it, having invited the intervention. No, of course, to engage with this, I would not have recognised the right hon. Gentleman if I had not wanted to take the intervention and I certainly was not avoiding him earlier in the debate. He is right to point out that these provisions have been put into the Bill for the first time. I am pleased to say that they have been given proper consideration in the detail that has been put up, which he alluded to. There is a new measure relating to the distance selling threshold, which will affect a small number of businesses in Northern Ireland. By and large, this put into law, in relation to Northern Ireland, a set of measures that has already been adopted elsewhere in the United Kingdom, in recognition of commitments that we made to the EU as part of the process of striking our new trade arrangements. That is that, but if he wishes to have further conversation on that, I would of course be delighted to do so.

This Finance Bill comes at a crucial juncture for our economy and our public finances as the UK recovers from what is—we must never forget this—the greatest economic and social crisis since world war two and the greatest economic recession in 300 years. It delivers on the measures announced in the Chancellor’s Budget to protect jobs and livelihoods and to provide additional support to help people and businesses through the pandemic; to begin the process of fixing the public finances; and to lay the foundations of a resilient future economy. This Bill delivers on all those commitments, and I commend it to the House.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury) 10:24 pm, 24th May 2021

People and businesses across our country need the Government to support them as they begin to get back on their feet after all the damage to people’s lives and livelihoods that the covid outbreak has brought. Six weeks ago, when we began to consider this Bill, it was clear that its provisions and those in the Budget that preceded it failed to provide that support.

We opposed the Bill on Second Reading, because far from helping people to get back on their feet, it would force half of all people in the country, including those earning only just enough to pay tax at all, to pay more from next year by freezing income tax personal allowances. That hit to household finances came alongside an immediate sharp council tax rise, a cut in universal credit later this year and a shameful real-terms pay cut for NHS workers after their unparalleled service over the last year and more. The sense of unfairness was made even more acute as the Bill, at the same time as hitting household finances, gave an immediate tax cut to some of the biggest multinational tech firms, which have done so well over the last year.

Throughout the Committee stage of the Bill, we tried to right some of these wrongs. We voted to reject the Bill’s plans to make all income tax payers pay more from next year, and we voted to stop the tech giants from benefiting from the Chancellor’s tax cut. We did not succeed in making changes to the Bill, despite giving Government Members today, in as straightforward a way as possible, another chance to exclude tech giants from their tax cut.

Throughout the debates on this Bill, we have also seen the Government reject opportunities to support decent, well-paid jobs, to end tax avoidance by large multinational firms and to back British businesses that have been struggling throughout the outbreak. It was telling that the Minister described workers’ rights and the prospect of paying a living wage as “burdensome conditions” when we suggested that they should be basic conditions of large companies taking the Government’s tax break.

As I said earlier today, it is no wonder that the promised employment Bill was absent from the Queen’s Speech earlier this month. The decision to drop it proves that the Government have no plan to tackle low pay or improve protections for working people. My colleagues and I will push the Government to honour their promises on workers’ rights and to go further, from banning the practice of fire and rehire, which has been deployed so shamefully during covid, to ending exploitation by rogue umbrella companies, as cross-party amendments tabled by right hon. and hon. Members earlier today sought to do.

It is also deeply frustrating and disappointing that, before today, Ministers had failed on three occasions since we began discussing the Bill to take up opportunities to back President Biden’s plans for a global minimum corporate tax rate. Today, they refused again, and they voted against our new clause, which would have required them to be transparent about the impact that a global minimum corporate tax rate on large multinationals would have in the UK. Britain should be taking a leading role in striking this global deal. It would bring in billions of pounds of tax every year, which could be invested in British public services and industry. It would level the playing field for British businesses that are currently undercut by a few large multinationals that shift profits overseas. It would also show the world that Britain believes in playing fair when we host the G7 summit next month.

The Government should have used the Bill to help people get back on their feet as we begin to emerge from covid. They should have been supporting British businesses that have been struggling throughout the outbreak. They should have begun building a country that lets neither workers be treated badly, nor a few large multinationals avoid paying their tax. Our tax system must have fairness at its heart, yet this Government are making households right across the country pay more tax, while letting Amazon pay no tax at all and leaving British businesses to be undercut by large multinational firms that shift their profits to tax havens overseas. That is not what our country needs. Those are not the actions of a Government who can claim to be on the side of the British people, and this is not a Bill that we can support.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury) 10:28 pm, 24th May 2021

I want to begin, as others have done, with a few thank yous. I thank the Minister for so politely rejecting all our amendments. I thank those on the Opposition Benches for the good spirit in which they conducted themselves during the Bill. I thank our research team in Westminster—Scott Taylor and Jonathan Kiehlmann—and Mhairi Love in my office. I thank my hon. Friends the Members for Glenrothes (Peter Grant) and for Gordon (Richard Thomson), and I thank the Clerks of the Committee, Chris Stanton and Joanna Dodd, for their patience. I want to pay particular thanks to George Crozier, the head of external relations for the Chartered Institute of Taxation, the Association of Taxation Technicians and the Low Incomes Tax Reform Group, for being a continual source of support and advice, and for his patience in explaining many of the tax measures to those of us who are not as well versed in the tax system as he is.

This Bill fell short in a number of ways. The Government are always keen to talk about the power of the Union, but it is the power of the Union not to extend support schemes, not to cover the excluded, not to keep the universal credit uplift going, not to extend the VAT reduction to hospitality and tourism, not to provide the support and stimulus that this country so dearly needs, rather than further austerity coming down the road, and not to tackle the scourge of dirty money in our country—the ongoing scandal of tax avoidance and evasion. Instead, we would like to see more of Scotland’s priorities delivered by a Parliament closer to home—priorities to build a sustainable green recovery, to provide a much needed stimulus and to give us the full range of levers over our economy so that we can make a real difference to the lives of the people we are proud to have working and living in Scotland, wherever in the world they have come from. All of these things require Scotland to have the full power of independence, which is why I hope it will not be too much longer before we have all those controls in the Parliament in Scotland.

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

Division number 11 Finance Bill — Schedule 24 - Penalties for deliberately withholding information

Aye: 364 MPs

No: 261 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

The House divided: Ayes 365, Noes 261.

Question accordingly agreed to.

Bill read the Third time and passed.

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.