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Finance Bill

Volume 628: debated on Tuesday 12 September 2017

Second Reading

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

Earlier this year, before the general election and in agreement with the Opposition, the Government removed a number of clauses from an earlier Finance Bill to ensure that the House had an opportunity to scrutinise the Bill in more detail. The Government announced their intention to return to the House at the earliest opportunity to legislate for the measures that had been removed, and that is the basis for the Finance Bill that they have now presented to the House. Last week we had a good debate on the resolutions on which this Bill is founded. Today I will be reflecting some of the themes of that debate, as well as setting out again the background of the Bill and its main provisions.

This Bill makes a significant contribution to the public finances through sound policies pursued by a Government who are putting a fair and competitive tax system at the heart of their plans. Those plans have ensured that the economy has grown continuously for more than four years to become 15% larger than it was in 2010. It is an economy that is experiencing record levels of employment, including more women in work than at any time in our history; an economy that has delivered the lowest level of unemployment since the mid-1970s, and the lowest level of youth unemployment since 2001; and an economy that is built on sound money, with the deficit reduced by three quarters to ensure that international investors maintain their faith in us. And indeed they have: foreign direct investment was 40% higher at the end of 2015 than it was in 2010. However, the Government are not complacent—far from it. We know that we must continue to press forward with vigour in supporting new growth and productivity.

Let me now turn to the specific provisions of the Bill, and, in particular, to those that will make our tax system fairer. This is a Bill that abolishes permanent non-dom status. Those who are non-domiciled for tax purposes pay about £9 billion each year in tax and national insurance, which is a huge contribution to our public finances. Lest we forget, it is £1 billion more per year than they paid 10 years ago under the Labour party; more, in fact, than they paid in any year during which the Opposition were last in power. The Government, however, are now putting an end to an unfairness whereby people living in the UK could claim that they were non-doms on a permanent basis. That is something that the Labour party failed to end in 13 years of government. Yes: under Labour, many people who had been living here for over 25 years, clearly settled in the United Kingdom, still technically claimed to be non-doms, and while they did make an important contribution, it was not necessarily a fair one. It is this Government who are changing that.

My right hon. Friend has mentioned Labour, and the 13 years of disastrous Labour rule. Is it not ironic that when he commenced his remarks, there was only one Back-Bench spokesperson for the Labour party in the Chamber who was even prepared to contribute to the debate?

I thank my hon. Friend for those observations, which I am sure the House has duly noted.

Let me now deal with termination payments, an issue on which the Opposition divided the House last week. The current rules are unclear and complicated. Some payments are taxed as earnings, some are only taxed above £30,000, and others are completely exempt from tax and national insurance contributions. Although most employers use the current rules as intended, the present system allows some to ignore those rules and deliberately manipulate their payments to minimise their tax by exploiting the differential tax treatment. That is clearly not fair. The Bill makes the rules simpler and fairer by recommending that we exempt the first £30,000 of termination payments from tax, while tightening the rules in respect of what is rightly included within such payments.

In last week’s debate, some Members raised concerns that the Government would be taxing compensation that is paid to employees when it is proved that they have been discriminated against—for example, after an employment tribunal. I am happy to reassure them. All compensation awards caused by proven discrimination against someone in employment will remain completely exempt from tax. All that the Bill does in the way of change is close the obvious loophole that enables an employer to treat part of a termination payment, as opposed to a tribunal award, as an “injury to feelings” in order to benefit from the tax exemption. It is HMRC’s longstanding position that if an employee claims a tax exemption for injury, it must have actually impaired that employee’s ability to work, and the Bill simply reconfirms that position.

Members also raised concerns that the Government intended to reduce the tax-free amount from £30,000. The Bill makes no such provision. If there were ever any desire to reduce the tax-free amount, it would be subject to a statutory instrument and the affirmative procedure, so the House would have to expressly approve any such proposal.

We also need to ensure that the taxation of different ways of working is sustainable, so that we have the funds to invest in the public services on which we all rely. It is therefore important that this tax treatment is fair between different individuals. The Office for Budget Responsibility has highlighted the fiscal risks arising from the growing number of people working through companies. Such individuals can pay themselves in dividends, and, in so doing, can pay significantly less tax than employees and the self-employed, although in many cases their economic activities are broadly the same. Part of the reason for that difference is the entitlement to a £5,000 dividend allowance, which is available in addition to the income tax personal allowance that the Government introduced at £11,500 in April.

Reducing this allowance to £2,000 will help to reduce the differential in tax treatment and help remove some of the working distortions to which I have referred. It will also ensure that support for investors is more effectively targeted: a £2,000 dividend allowance will ensure that around 80% of general investors continue to receive dividend income tax-free. The less well-off will be protected, with those general investors who are affected having investment portfolios worth around £100,000 on average, putting them in the top 10% of wealthiest households in the country. So the Bill will make our tax system fairer in a number of ways.

The Financial Secretary uses the example of someone who works through a company, and compares that with a wealthy investor with a large portfolio. The concern many of us have is for the small businessperson—the owner-proprietor—with a start-up business earning a very modest wage who relies on the £5,000 tax-free dividend in order to make ends meet. What consideration has he given in that regard?

There are other considerations that the hon. Gentleman should focus on when he looks at individuals setting up in business, and there are many successful entrepreneurs throughout our country. We are the party and Government who have reduced taxation on business. It used to be 28% under the last Government and we have brought it down now to 19% and it will be further reduced to 17% over time. So the hon. Gentleman should look at this in the round, and I persist in my point that we need to look at the different tax consequences of the different models—an individual going into business on their own, whether as a sole trader or partner, or in an incorporated structure—to make sure we do not have people effectively just using one model for no other reason than the tax advantages thereof.

My right hon. Friend refers to the importance of working out different tax models and how they affect the economy and the individual. Does he agree that Labour’s policy to increase tax negatively affects individuals’ income, investment to this country and therefore the country’s economy as a whole?

My hon. and learned Friend is entirely right. As I have said, we are the party of bringing down corporation tax and small business tax, and we continue to bring those taxes down. The Labour party’s current policy is to raise corporation tax to 26%, which is going to do very little to encourage entrepreneurship in this country; it will in fact do the reverse. It must also be borne in mind that, on personal tax, it is Labour’s policy to start dragging more people into the higher tax rate, whereas it is this Government’s policy, through increasing the personal allowance, to take people out of tax and lower the tax burden entirely.

Last week the Institute for Public Policy Research published an influential report on some of the major economic challenges facing the British state, not least chronic geographical wealth inequalities. What measures are there in this Bill to meet those challenges?

The Government’s record on income equality is extremely strong. The hon. Gentleman may be aware that we have the lowest level of income inequality in this country for 30 years, as measured by the Gini coefficient. We are assisting the lower paid through the national living wage and national minimum wage and HMRC’s vigorous actions in making sure that that is complied with by businesses, and, as I have already stated, through the personal allowance changes we have made, which have taken many out of tax—3 million individuals, heading towards 4 million as we go up towards £12,500 as the new allowance.

We are a party and Government who recognise that all parts of our economy are equally important in sharing the proceeds of growth. That is why we are investing through our national productivity fund—through the work we are doing on skills, the investment we are making in infrastructure and the northern powerhouse, and through all these approaches—to make sure that prosperity, living standards and household income are improved throughout the length and breadth of our country.

In my constituency, the backbone of business is small and medium-sized businesses. Does my right hon. Friend agree that this Government have put in place a raft of measures particularly to help them, and many are not paying any business rates at all, which is extremely helpful to them?

My hon. Friend raises an important point on business rates, which are very important as one of the key components of costs for businesses. In 2016 we announced a £9 billion package to ensure that business rates were not too onerous for small businesses, and we have of course this year announced a further £400 million-plus to make sure that further funds are available to those who require it.

My right hon. Friend is making an excellent speech. Does he share my concern that the shadow Chancellor does not seem to be present—although he is active on his Twitter account? Does my right hon. Friend know why the shadow Chancellor is not here to hear this excellent speech? Is he stirring up insurrection and urging people to engage in unlawful strike action?

As usual, my right hon. Friend makes some very insightful observations. I have no news, I am afraid, as to where the shadow Chancellor is. Perhaps he has his nose deep in the little red book, but my advice to him is to read my speech and to learn, because there is much to learn from what I have already said and what I am about to share with the House.

It might well be that the shadow Chancellor is trying to cause insurrection outside the Chamber, to try to cause misery to the general public, but does my right hon. Friend agree that he does not seem to be doing much of a job of causing insurrection with his own party in this House, because none of them can be bothered to turn up to this debate?

That is a fair observation—[Interruption.] That is a fair comment from my hon. Friend—[Interruption.]

Order. Even if hon. Members are making a noise in support of the Minister, which I rather think they are, I cannot hear the Minister, and just as others are learning, I am learning from what the Minister is saying, and I would like to hear him.

Thank you for that ruling, Madam Deputy Speaker; I am pleased that you will be able to hear me from now on. I entirely accept the point made by my hon. Friend the Member for Shipley (Philip Davies); if there is to be an insurrection, there must at least be some people present with whom to insurrect.

Rather than proving that Conservative Members are able to count people on Benches—which at times is beneficial to them, but at many other times is not—perhaps the right hon. Gentleman could listen to all the small businesses who are squealing about the massive increases they have seen in business rates and the impact on business start-ups of the changes to universal credit that are going to prevent a lot of people from starting up as self-employed, hitting those in constituencies like mine where there is no support for them.

I think the hon. Lady will have heard my—[Interruption.] The shadow Chancellor has arrived: the troops are in place, so let the insurrection commence.

The Bill will make our tax system fairer in a number of ways, but I want to focus now on how it strengthens our position in tackling tax avoidance and evasion. This is a Government who have already announced more than 75 measures to tackle evasion and avoidance since 2010, and we have secured almost £160 billion in additional tax revenue over this period. We have driven forward international action and will continue to do so. We have published one of the first public registers of beneficial ownership. We have reduced the tax gap to one of the lowest in the world. This Finance Bill introduces new policies to tackle aggressive tax planning, avoidance and evasion. It continues to crack down on disguised remuneration schemes, it introduces a new penalty for those who enable tax avoidance, and it clamps down further on online VAT fraud.

Is it not deeply regrettable that clauses in the previous Finance Bill that would have cracked down on billions of pounds worth of aggressive and abusive avoidance had to be dropped from the Bill because the Labour party would not support them?

My right hon. Friend makes an extremely pertinent observation, as usual. We wanted this 650-page Bill to be considerably smaller so that more of it could be on the statute book already.

Notwithstanding the fact that the shadow Chancellor has now been shamed into taking time out of his insurrection to attend the Chamber, is it not remarkable that so few of the Labour Members who were talking so much about scrutiny last night have turned up to scrutinise the most important Bill that this Parliament passes?

Does my right hon. Friend agree that we have actually received more income since cutting corporation tax and the highest rates of tax, meaning more money to spend on public services? If we had followed the advice of the Labour party and increased taxes, we would have received less tax revenue and therefore would have had less money to invest in our public services.

My hon. Friend is entirely right. The amount of onshore corporation tax that we took in the last financial year is close to £50 billion—50% more than in 2010. As we have brought taxes down, the tax revenue take has increased. We can draw only one corollary from all this: if the Labour party gets its way and starts to put those rates up again, some of that tax take might be damaged.

The Minister just prayed in aid the new penalties for the enablers of tax avoidance, which I welcome. This Bill is riddled with retrospective legislation, which I hope he will say more about later, but will the Minister explain to the House why those new penalties do not kick in until after the Bill receives Royal Assent when there is retrospectivity all over the place in the rest of the legislation?

I believe that that is due to an element of convention, but I am happy to speak to the hon. Gentleman after the debate. We have already clamped down on those who generate such schemes, and we are clearly clamping down on those who use and seek to benefit from them. The third thing is that we will now be actively clamping down on those who enable those schemes through their advice along the way, and they will face penalties of up to the entire amount that they have charged for their services. That is just another example of this Government’s determination to leave absolutely no stone unturned when it comes to clamping down on tax avoidance, evasion and non-compliance.

While the Opposition squeal about tax evasion, does my right hon. Friend agree that it is the Conservatives who have done more in government to tackle tax evasion than Labour did in 13 years?

My hon. Friend is right. Some Opposition Members claimed in last week’s debate that HMRC does not have the resources to clamp down on tax evaders, but that is demonstrably untrue. First, we have provided £1.8 billion since 2010 for exactly that purpose. Secondly, as I have already said, we have brought in £160 billion since 2010 by clamping down on such activities. The truth is that we are succeeding.

At a time when our public finances are still challenged due to the Labour party’s economic mismanagement, is it not important to get as much money as we can from tax avoiders and evaders? Our party is doing that.

My hon. Friend is right, which reminds us of the overall purpose of raising tax and ensuring that we bring it in, namely to live within our means, pay down our deficit and, critically, have the fine public services that are a hallmark of a civilised society. All of us can unite in wanting that.

The Bill legislates for new rules to prevent large multinational businesses playing the system by claiming tax deductions for excessive interest expenses and ensures that companies cannot use losses to pay no tax even in years when substantial profits are made. In last week’s debate, I was somewhat surprised by the concerns raised by some Opposition Members about the provisions relating to the taxation of businesses trading in Northern Ireland. They are nothing new. They were announced in the 2016 autumn statement and do not create a tax loophole. The legislation simply ensures that all small and medium-sized enterprises with trading activity in Northern Ireland will be able to benefit from the Northern Ireland corporation tax regime in the same way as larger companies already can, and it also introduces additional anti-avoidance rules to ensure that the regime operates as intended. The Bill’s provisions do not weaken that at all; they simply mean that more businesses will be able to apply the regime to the taxation of profits genuinely arising, and only arising, from activities carried out in Northern Ireland once the regime is put into effect.

My right hon. Friend refers to the taxation and regulation of business, but once we are in the hard, bracing winds of international free trade after Brexit, does he agree that it is essential that our Government ensure that we have a low-tax, deregulated, pro-business environment so that our businesses can compete on the world market?

My hon. Friend is entirely right. That is why the Government have been clear through our tax planning and the information that we have been signalling to the marketplace. Certainty for business is extremely important, which is why we have lowered corporation tax and have stuck to that position. We are making considerable progress, and I will take my hon. Friend’s point on board.

In short, the Bill continues our hard work to drive down the tax gap and ensures that we will provide a fair and competitive tax system. The other part of the deal is that those taxes must be paid.

On that point, will my right hon. Friend re-emphasise the fact that the tax gaps for large and small companies have fallen by 40% and 50% respectively since we took over from the Labour Government?

My hon. Friend is correct. The tax gap currently stands at 6.5% for all taxes, which is lower than in any year under the previous Labour Government. In fact, the tax gap was 8.3% in 2005-06, so we are the party that has been bearing down on the tax gap.

This Bill introduces significant changes to the clauses in one area that the Government intended to legislate for before the general election. Many businesses of all types and sizes have already gone digital. They do their banking online, pay their bills online, market their products and services online, and buy what they need online. Making tax digital is the natural next step. It will not only make tax administration more convenient for our businesses, but it will reap rewards for the Exchequer. Avoidable tax errors under the current system cost us almost £9 billion in 2014-15. That is more than double the cost of running HMRC and the Treasury combined.

Many Members, including members of the Treasury Committee, as well as business owners, agents and stakeholder groups have had concerns about whether all businesses would be ready for this development. Well, we listened to that feedback, and one of my early decisions as Financial Secretary was to amend the timetable for delivering Making Tax Digital. Digital record keeping will now only be a requirement for businesses with a turnover above the VAT threshold, and they will only have to provide updates on their VAT liabilities.

I thank my right hon. Friend for his announcements about Making Tax Digital and for pointing out that the change will not affect the smallest of businesses. Small businesses are the backbone of our economy, and does he agree that we on the Government Benches put small businesses first?

My hon. Friend is entirely right. We do put small businesses first, which is precisely why we listened so carefully to the feedback we received on our proposals and have made changes that will allow breathing space for businesses to prepare and for us to pilot further the plans we will introduce in due course.

As the vast majority of businesses already submit VAT returns on a quarterly basis, the transition to quarterly updates through Making Tax Digital should not be unduly onerous.

Although the delay in Making Tax Digital gives breathing space for very small firms, those firms will now face additional administrative requirements, possibly alongside Brexit and a dip in the economy. Is that not an added concern for businesses now that they have seen how onerous the proposals actually are?

The hon. Lady may be aware that in the consultation we received the message from businesses that they broadly welcome these changes as we move into the digital age and do things more efficiently and effectively. However, businesses did have concerns, to which we have listened, about the timing and pace of the changes we originally proposed. The policy is robust, but the Government and I are determined to get the changes right and to make them at the right pace that suits those companies.

Does my hon. Friend remember that in 2010, when the digitisation of VAT was introduced, more than half of businesses with a turnover of more than £100,000 signed up voluntarily? Does that show that moving to the new economy and technology is welcomed by many?

My hon. and learned Friend is absolutely right. In my meetings with the Federation of Small Businesses we have all concluded and agreed that this is the right direction. Indeed, we will make provision to ensure that such businesses, although they will not be mandated to become part of this new regime, will have the opportunity to do so voluntarily, and I believe that a very large number of companies will wish to take that opportunity.

I, too, welcome the fact that the Government have listened to many small businesses not just on their concerns about the extra work load but on how many businesses in rural areas have already been able to submit their accounts digitally. Now that there has been a delay, and regardless of whether there will be an extension, will the Minister assure us that the Treasury and HMRC will consider the lessons that can be learned? First, what additional work is required? Secondly, if broadband is not rolled out as quickly as intended, will that also be considered when making any final decisions about the roll-out of this scheme?

My hon. Friend is a doughty champion of small businesses in Northern Ireland, and I value the comments and observations he has made to me during the decision-making process on this issue. On broadband roll-out in rural communities, the Bill has specific provisions to ensure that there is a digital exclusion test such that individuals or companies that genuinely cannot use the systems to the requisite degree can be exempted from the relevant provisions of the Bill.

We will not mandate other taxes until we are clear that the programme has been shown to work well. My hon. Friend the Member for North West Hampshire (Kit Malthouse) and my right hon. Friend the Member for Loughborough (Nicky Morgan) made some important points on that matter in last week’s debate, and I can confirm that, once we are through the pilot, businesses will indeed be able to use the system voluntarily ahead of its mandating.

In summary, the Bill is about addressing imbalances in the tax system and making it not only fairer but more sustainable. It is a Bill to ensure that the taxes that are due are paid, preventing opportunities for avoidance and evasion, and it is a Bill to take the tax system forward into the digital age while ensuring that the pace of change works for businesses large and small.

The policies contained in the Bill are set to raise billions more for our vital public services—doctors, nurses, paramedics, teachers, police, prison officers, fire services, our armed forces and all those others in the public sector who help make our country great. This Bill is central to our plan to keep Britain moving forward, and I commend it to the House.

It is a pleasure to address the 1922 committee today.

The House considered the Ways and Means resolutions last Wednesday, and today is round two on Second Reading of the Finance Bill. We have just had wall-to-wall complacency from the Minister; it is as simple as that. Sandwiched between the two debates, we have debated the European Union (Withdrawal) Bill. The legislative powers up for sequestration by Ministers are eye-watering and unprecedented, and they cover a range of areas, including finance. Quite simply, that process does not befit a parliamentary democracy. Parliamentarians— I use the word loosely—on the Government Benches should be concerned about their acquiescence last night. The hand-wringing, unprecedented ceding of power to the Executive was unbecoming, and it goes to the heart of the scrutiny on this Bill. [Interruption.] It does.

What next? The devolution of tax-raising powers to the Chancellor without discussion, challenge or scrutiny? Forced loans? Ship money, going back to the civil war? We will have the delights of considering in detail the Finance Bill’s 72 clauses in Committee in October, but that might change if the Government apply the principle agreed in the withdrawal Bill. Last night we saw all the incensed huff, puff and bluster of Conservative Members, their worry about the Government’s land grab on parliamentary sovereignty, evaporate, as if by magic, before our very eyes.

I am listening carefully to the hon. Gentleman. He should be careful of complaining about scrutiny. There are rather more Conservative Members than Opposition Members here to scrutinise the Bill. The EU (Withdrawal) Bill, which he references, specifically excludes Ministers from making taxation measures. He should read legislation before commenting on it.

I saw a few tumbleweeds on the Government Benches last week. If there is a shiver looking for a spine to run up, it need not bother looking on the Government Benches. After last night’s vote, there were none to be found. The national interest is not synonymous with the interest of the Tory party, as most Conservative Members would like to think, although the word “arrogance” is.

The shadow Minister says last night was an outrage. Does he agree with his friends and acolytes in Momentum who said on Twitter that the hon. Member for Bolsover (Mr Skinner) is a “scab” for voting with the Government last night on the EU (Withdrawal) Bill? Does he agree or disagree?

I would make exactly the same point as my hon. Friend the Member for Shipley (Philip Davies). How many Labour Members, including the hon. Member for Bolsover (Mr Skinner), voted in favour of last night’s Bill?

Conservative Members acquiesced in their droves, and it is a shame—it is absolutely shocking—that they did so.

In a moment.

Last week, we witnessed the Brexit Secretary, also known as Britain’s Brexit bulldog and master negotiator, on the receiving end of more punches from my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), the shadow Secretary of State for Exiting the European Union, than a well-oiled guest at a summer Tory Pimm’s party. What a cocktail of horrors it must have been for the Brexit Secretary.

On a point of order, Madam Deputy Speaker. I wonder whether you could help the hon. Gentleman, as he is five minutes into his speech and appears not to have noticed that we are debating the Finance Bill. I thought the debate on the European Union (Withdrawal) Bill, to which he has devoted all his remarks, took place yesterday. [Interruption.]

Order. I could not quite hear the right hon. Gentleman’s point of order, but I am guessing what I thought he probably said. I must say that the content of the speech by the hon. Member for Bootle (Peter Dowd) is not a matter for me, but I am aware that we are discussing only the Finance Bill and we must stick to that. The Bill is, however, wide and varied. I have it here and I have looked at it —[Laughter.] And I will make absolutely certain that nobody speaks outwith the order that is due.

Thank you, Madam Deputy Speaker. Your judgment is wonderful, as ever, on these matters.

What a cocktail of horrors it must have been for the Brexit Secretary. I almost felt sorry for him by the time my right hon. and learned Friend the Member for Holborn and St Pancras had finished his humiliating dissection of his case—but not quite. If squirming was an Olympic sport, the Brexit Secretary would have won a gold medal, hands down.

Will the hon. Gentleman confirm that when a Minister brings a statutory instrument to the House, it can be debated by the House and voted down if the House does not like it? That is a parliamentary process; it means Parliament is in control.

It depends on the nature of the order, so let us move on.

I come to the future economic credibility of the country, where we have David the deluded, Boris the blunderer and Liam the loner—what a team! They would be out of their depth in a puddle. Regrettably, the importance of the Ways and Means resolutions and the Finance Bill has been somewhat overshadowed by the Brexit debate, notwithstanding its significance. That has given the Government a collateral opportunity to sneak the Finance Bill through while everybody else’s attention is elsewhere. That is a murky approach to the respect that should be afforded to Parliament, but this caliginous Government are bent on pursuing it, come what may. The Chancellor, who has now gone, doubtless to check his spreadsheets, commented from a sedentary position last week that the Ways and Means resolutions were just “technical”. There is nothing technical about aiding and abetting non-doms to avoid paying taxes. There is nothing technical about legislating to tax those who have been injured on grounds of discrimination.

Let us consider the following:

“the economy we have today is creating neither prosperity nor justice.”

Those are not my words but the words of the Institute for Public Policy Research in its recent publication “Time for Change”.

I am a bit perplexed by the hon. Gentleman’s comments about non-doms, because those of us with long memories will recall a long stretch under the Labour Government when each year they promised to do something about non-doms but then did nothing at all, until they were humiliated into action by the previous Chancellor. Our Government are now taking further action, but the Opposition are critical of that, whereas I would have thought they would be supportive.

I am afraid the hon. Gentleman’s memory is wrong about that, as are the memories of some Ministers, and I will come on to discuss that in a moment. This Finance Bill does little, if anything, to address the legitimate concerns raised in the IPPR report. On being provided with his speech last week, I suspect even the Financial Secretary asked—if only himself—whether he really had to present more worn out, tired platitudes that pass for Tory economic policy. He drew the short straw—a very short straw; in fact, he was the only one in the ballot. He was both the warm-up act and the main act. The Chief Secretary graced us with her presence for a short time and then went off with the Chancellor, calculator in hand, to work out how they will pay for all their U-turns.

On U-turns and our national debt, will the hon. Gentleman clarify whether it is still Labour policy to spend £100 billion clearing all outstanding student debt?

I do not mind Government Members making up their policies on the hoof, but they should have respect and not make ours up on the hoof.

As I was saying, when the Chancellor and the Chief Secretary waltzed off, they left the Financial Secretary to do the business, and he did a very good job last week. He managed to keep a straight face throughout his adumbration of how remarkably well the economy is doing, but amnesia had taken hold.

I return to the £100 billion costing of university fees, where the hon. Gentleman seemed to be unsure whether or not this was still his policy. We are debating the Finance Bill, so if that was his policy, how would he intend to finance it?

Far be it from me to give advice, but the hon. Lady should go to a dictionary to find out the difference between “a debt” and “a fee”. She clearly does not know what she is talking about. [Interruption.]

Thank you, once again, Madam Deputy Speaker.

In the Financial Secretary’s enthusiasm to explicate the Government’s record on the economy, he made no mention of a number of important elements that the 72 clauses in this Bill do nothing to deal with.

The hon. Gentleman has been asked twice whether or not it is still the Labour party’s policy to clear all student debt—a policy on which the party garnered a great deal of votes at the last election—but I did not hear an answer. Will he tell us, in clear Yorkshire terms of yes or no: is that still Labour party policy? Many people want to know these things. Just a yes or no will do.

It is not for us to provide answers for the Government; it is for the Government to provide answers for us. More importantly, has my hon. Friend noticed that the Government no longer talk about their “economic strategy”? Does he know why that is? It is because they have not got one any more.

Our party’s policy was clearly stated in our manifesto—it was to abolish all tuition fees. That is a damn sight better than the position we have seen this week, whereby the Chancellor has had to ask for 250-word submissions from his Back Benchers on ideas for student finance. They are the Government, but the Opposition have a clearer policy than the people running the country.

They make it up as they go along.

May I jog the Financial Secretary’s memory? He forgot to mention the £1.7 trillion national debt, which, as it happens, has grown by more than £2 billion since he sat down at around 7 o’clock last Wednesday.

Order. Questions have been asked of the hon. Gentleman and I would like to hear the answers. I cannot hear what he is saying.

While I am on the subject, since the Financial Secretary stood up around 25 minutes ago, £4 million has been added to the national debt. If Government Members do not recognise those Office for National Statistics-based calculations, they may wish to make up their own, which is what the Chancellor seems to do fairly regularly.

The Financial Secretary also forgot to mention the fact that median incomes in the north-west, south-west and west midlands are 30% lower than those in London and the south-east, and 35% and 22% lower than those in Wales and Scotland respectively.

No, I have given way a significant number of times already.

In the context of higher unemployment levels, the Financial Secretary forgot to mention the insecure and casual labour market that is taking hold in various sectors, with 15% of people employed in such jobs. He also forgot to mention the 6% of people on short-term contracts and the 3% and growing on zero-hours contracts.

The Financial Secretary forgot to mention any plan to deal with the 4 million children, or nearly a third of them, who live in poverty—and that number is on the up. All that adds up to the UK—this wonderful, halcyon Britain—being one of the most unequal places in western Europe.

So, what have the Government done about it and what are their intentions? British productivity is dreadful: since 2010 it has flatlined, at the very least. We remain 13% behind the average of the G7 richest nations, and when we compare ourselves to Germany, the bête noire of many Brexiteers on the Government Benches, we lag behind by 30%. There has been no action from the Government.

Investment levels are grim. Investment is at the heart of any growth in either the private or public spheres, but it appears to be pretty short-term in many sectors. Brexit uncertainty is exacerbating that, but we should not use that as an alibi because low investment levels pre-date the Brexit debate. There has been no action from the Government on that. The question is: does the Finance Bill do anything of significance to put any of those problems right? What is the answer? No action.

What about inflation? Well, there is no action there either. The inflation rate, now at 2.9%, climbed last month to its joint highest level in more than five years, given the rise in the price of petrol and clothing. According to the ONS, clothing and footwear prices had the biggest impact on the headline inflation rate in August, climbing 4.6% year-on-year to their highest level since records began.

Even the Government’s analysis of the loosening of the rules governing non-dom giveaways, such as the so-called business investment relief, says it has had a negligible effect on investment. While we are on non-doms, we have heard once again the false promise that the Bill will curb it for many. How can we believe such claims when an entire part of schedule 8 is called “Protection of overseas trusts”? That is what this Government like to do: protect people’s overseas trusts. Ministers may not have thought that we would notice, but they made absolutely sure that non-doms knew that nothing would change if they squirrelled their wealth away in trusts.

As a result of the moves to undermine the rules on what can qualify as a Northern Ireland company, corporations will find it easier to shop around within the UK for where to put their brass plates. How does it benefit the people of Northern Ireland if we reduce the amount of jobs and investment that a company must make to qualify as a Northern Ireland company?

The changes to the tax treatment of termination payments will mean that people who lose their jobs may face higher tax bills when they are least able to pay—people like the thousands of HMRC employees in my constituency, and in others, who are being forced to choose between relocating or being given their P45s. They are undervalued, underpaid and under-resourced, and soon to be over-taxed if the Government get their way. The Office of Tax Simplification said that the change

“is likely to have a significant cost impact for some people, particularly those lower paid employees who may more often be the ones receiving smaller termination payments; who are, after all, losing their job.”

No evidence has been produced to show that the proposals will simplify very much. The Government must stop looking to ordinary workers to pay for their mismanagement of the public finances. Instead, they should stop the smoke and mirrors games and get serious on tax avoiders.

The Bill, like the Conservative Government who produced it, is not fit to deal with the problems that the country faces. Even the Tory party membership are recognising that. More importantly, though, the country is recognising that. So, in the spirit of Brexit: auf wiedersehen, au revoir and goodbye!

I felt for the shadow Minister’s being asked to speak in this debate after many hours of toiling away on a different subject yesterday. He obviously struggled, because he produced his notes for yesterday’s debate and gave us 10 minutes or so as if we were still debating ministerial powers and Parliament’s right to control all secondary regulations. Just to clarify the point that I made to him, and which he tried to muddle: everything is a parliamentary process when it comes to legislating by statutory instrument, because those statutory instruments that are tabled for negative resolution—meaning that they would not normally get a debate or a vote—are an invitation to the Opposition. It is their job to go through them all and decide whether Ministers have made any mistakes, and therefore whether those instruments should be brought before the House for debate and a vote. They are all debateable and voteable if the Opposition do their job, but it is clear that this Opposition do not want to do their job; they want to make synthetic points instead.

Thanks to your excellent guidance, Madam Deputy Speaker, the shadow Minister did come to understand that this is the debate on the Finance Bill. We then moved to the interesting issue of the student debts. A number of my right hon. and hon. Friends quite rightly wanted clarification on whether, were we to accept Labour’s advice, we would need to find provision in the Bill to retire £100 billion of student debt. The poor shadow Minister found that even more difficult than working out which debate he was in. I am sure he knows full well that before the election the Leader of the Opposition made a statement on student debt that was interpreted by two shadow Ministers as categorically offering the end of student debt for all those who have incurred it. Now, after the election, we are told that the Leader of the Opposition did not mean that, although he failed to clarify it at the time.

The Leader of the Opposition’s precise words were:

“I will deal with it.”

Those were his words. The hon. Member for Ilford North (Wes Streeting) wandered into the Chamber, made an intervention and has now left. He should have stayed to hear this. His leader said that he would deal with it and has now gone back on that.

My hon. Friend is much tougher than I am and has made it clear that the Leader of the Opposition misled the electors; I was being a little kinder. The right hon. Gentleman used tricksy language, in some ways, but his shadow spokesman did not. More importantly, millions of voters out there heard what my hon. Friend described, believed that Labour was making an honourable offer to get rid of all student debt and voted accordingly. They are now told that they were conned, let down and completely misled.

Had the Treasury team shown the House some respect by publishing the Bill and the explanatory notes in time for us to read them and properly give the matter some scrutiny, Members from all parties, but particularly Conservative Members, might not have had to concentrate on old arguments about Labour from the election that have since been cleared up, and might instead have been able to look at the matter we are meant to be debating.

We think that this is a debate about the Finance Bill, and about how much money we raise and how we raise it. A very important question to consider when deciding how much money we raise is how much we need to spend. We are debating, in part, a very important promise that was made by the Opposition party. My electors—and many other Members’ electors—thought that that party would want to sustain it and come up with ideas about how to raise the odd £100 billion, but we now discover that that promise was not meant to be for any time other than the election and that it has now reneged on it. That is exactly what the people outside this House want to hear about. They want us to be topical and relevant to their lives. Very technical matters that deal with certain kinds of tax abuse are all very important to a limited number of people and in the interests of fairness, but what matters out there, and what should go back from this debate today, is this: does the principal party of opposition have any principles, or did it merely offer to cancel student debt before an election knowing full well that we cannot raise in this Finance Bill, or any other, £100 billion to deal with it?

Given that Conservative MPs want to spend a considerable amount of time on this matter—indeed, they appear to have decided to filibuster their own Finance Bill—and given that the quote from the Leader of the Opposition has been used, let me finish that quote, word for word. He said:

“I don’t have the simple answer for it at this stage—I don’t think anybody would expect me to, because this election was called unexpectedly. We have had two weeks to prepare all of this, but I am well aware of the problem.”

That is the quote.

I am very grateful for that clarification. I think that we can rest our case. It seems very clear that an impression was given. This is relevant because the Opposition now have the opportunity to tell us how they would raise £100 billion. I will let them into a secret: if there was an easy way to cancel everybody’s student debt, I would be delighted, because it would make us extremely popular. Clearly, it made Labour very popular before the election. I am not persuaded that there is a simple way of raising £100 billion, which is why it would be interesting to hear in this debate whether there is something that we have missed.

The hon. Member for High Peak (Ruth George) chided me for not debating what is in the Bill, and said that she did not have time to read it all. That is very odd, because I seem to remember that this Budget was delivered weeks and weeks ago—before the general election. She has had plenty of time to study the Bill and to come up with some principles that the rest of us here could debate today. I wish now to move on to some of the actual measures that the Government are recommending, but, first, I give way.

I thank my right hon. Friend for giving way. He is making an extremely powerful speech. It is relevant, because the shadow Minister mentioned that the deficit was going up under this Government. Will the hon. Gentleman be straight with the country about how much he would add to the deficit if his party were to make good on that pledge on the £100 billion of student debt? Otherwise, he is letting down the young people who voted for him and betraying them cruelly.

Let us move on. Let me summarise the situation by saying that what we have learned today is that the Opposition have no intention of honouring what we thought was a pledge and what they say was not a pledge. Labour does not want to retire the student debt. It does not have a clue how to do it, and it even admits that £100 billion is too big a sum to raise in this Finance Bill to honour that pledge.

My right hon. Friend is being a bit unkind to the Labour Opposition, because they have given us some indication of how they would go about raising the money that they need for their fantasy policies. They have told us that they would adopt the policies that were used in Venezuela. Was my right hon. Friend as surprised as I was when the shadow Minister mentioned how appalled he was at the rate of inflation, given that he wants to adopt the policies of Venezuela? Perhaps my right hon. Friend can tell us what those policies led to in Venezuela.

I have written and spoken about that in other contexts. I fear that I might be straying a bit far from the strict words of the Finance Bill, but my hon. Friend tempts me. I do remember that the leadership of the Labour party was full of praise for the two last leaders of Venezuela, but we now know that that very expensive experiment has ended in terrible tears with a lot of civil dispute, an inability to buy simple foods in shops, complete chaos in getting in basic supplies, a country near bankruptcy, having run out of foreign exchange, and a country that cannot even run its own oil resources properly because it does not know how to invest, to balance its budget and to run finance prudently. It is very sad that the Labour party backed this particular wrong horse. It is even more bizarre that it will not now distance itself from it and admit that the experiment failed badly. However, it does tell us something very interesting.

When the Venezuela experiment began, it was great. The Government gave more money to the poor, which was extremely popular. In the first instance, the policy just about worked—people had a bit more money to spend—but shortly the Government ran out of other people’s money to spend and they ran out of borrowing capability. Instead of helping the poor, they crushed the poor. Instead of making a prosperous economy, they bombed the economy and they are now all much worse off as a result of their policy of generosity.

I am grateful that the Government understand that we need to have a prosperous and growing economy and to run our finances sensibly in order to pay for the attractive programmes for better public services and to create less inequality of income by giving more money to those who, through misfortune or for other reasons, cannot earn as much as others.

One matter that is in the Finance Bill is in relation to tax avoidance and tax evasion. Does my right hon. Friend remember that the Labour Government committed to recover £8 billion that had been lost through tax avoidance, and that the Institute for Fiscal Studies said that they would not recover even half that sum?

I do remember that. We also have the respective abilities in Government, and we see that this Government have been rather more successful at clamping down on tax loopholes that Parliament has thought unacceptable and that, in turn, has generated more revenue.

Very important to this Government’s strategy is the principle that, yes, we have to tax rich companies and rich people because they have the money, but that there is not enough money if we just tax the very rich. We must tax people who are comfortably off as well. There is also an understanding that, if we try to over-tax the very rich, we would end up getting less money, not more money, because the very rich have privileges and freedoms that the rest of us do not have. They have good lawyers, good accountants, and addresses in other countries. They can shift their businesses around, invest somewhere else, decide to spend their money somewhere else and go and live in a home in another country, which the rest of us are not able to do. Therefore, it is very important that the Government monitor the situation extremely carefully. For example, when the Government are taxing non-doms—they have got £9 billion in tax from non-doms, which is an extremely important contribution to our public services—they should be careful that they do not overdo it, because it would be quite easy to flip the thing.

I am not a particular friend of the non-doms. I have certainly never had the advantage of all these offshore facilities. I have always had a salary in Britain and paid PAYE like everybody else. Everything that I have had has had to go through the tax books quite properly, so I do not speak from any personal experience. However, what I do know is that I would rather live in a country that was tolerant of people who have riches and enterprise and who want to invest here than in a country that was completely intolerant. I would also rather that the non-doms paid some of our taxes for us than live in a country where the rest of us had to pay all the taxes because we had driven all the non-doms away.

So far, the Government have charted a sensible course, but I hope that they will watch the situation very carefully. I hope also that those in the Labour party who are serious about government and want to learn a bit more about how successful Governments, past and future, operate might learn from the corporation tax proposals in this and related Finance Bills. Interestingly, during the time when the Government have taken the corporation tax down from a 28% rate to 19%, they have massively increased the amount of revenue that companies pay. One problem with the Labour proposals before the last election was that Labour recommended a lot of spending that was not going to be financed by tax at all. It also recommended quite a lot of spending that it said would be financed by tax. One of its biggest alleged increases was from raising the corporation tax rate. If we tried that, we might find that we raised less money from corporations, drove marginal businesses away from our country and enabled clever accountants and lawyers in large corporations legitimately to base activities and profits in other countries, because they would no longer find our tax rates so acceptable.

Given that the only numbers in the Conservative manifesto were the page numbers, does the right hon. Gentleman understand why Labour Members are slightly concerned that, despite what he says, the numbers in the Finance Bill do not add up?

No, I do not share that view and I do not think that was a very effective point. There was quite a lot in the Conservative manifesto. Indeed, there were some things in the Conservative manifesto that the Conservatives were rather surprised about, and we have been having friendly family conversations about them ever since. I am sure that my hon. and right hon. Friends will discern that there are some better parts of the manifesto which we are most keen to get on with. However, we certainly did not just have a manifesto of page numbers, as I am sure the hon. Member for Nottingham North (Alex Norris) will remember. The smile on his face tells me that he enjoyed some parts of the Conservative manifesto as well. We are all very pleased about that, even though he was probably amused by different parts of that particular publication from the ones that I was amused by and pleased about.

We wish to see a policy that promotes enterprise and growth. That means taxing people in companies with the money fairly and sensibly, but also setting internationally competitive tax rates that they will stay to pay and ensuring that the country is an attractive place in which people want to do business, invest and employ.

My right hon. Friend is talking about practical application, rather than merely theory. When President Hollande took office in France, he hiked the French tax system in order to squeeze the rich until the pips squeaked, as it were. My right hon. Friend will recall that the wealthy French then moved in very large numbers to Chelsea. The lingua franca of Chelsea changed from Russian to French overnight. People will move to where they find the tax regime benign and fair.

That is quite right. And they will all contribute to our tax revenues and not to the French tax revenues in the process, which means the French state has an even more difficult task.

There was one particularly important thing in the shadow Minister’s speech. He correctly agreed with the Government that we need to raise productivity. He would not take my intervention, in which I wanted to raise one of the sadnesses in the long period of Labour Government from 1997 to 2010. The Labour Government had so much money to spend because they inherited a prosperous economy. In fact, they extended that prosperity in the first part of their government before they went for the crash in the end. However, although they had quite a lot of money to spend, there was no growth whatever in public sector productivity over those 13 years.

In this House, we all say we want to raise productivity. Surely we should take a special responsibility for public sector productivity because that is the sector in which we directly spend the money, employ the people, hire the managers, and set the aims and objectives. As the Labour party is particularly close to the public sector in many ways, it would be good if it shared with us some thinking on having a policy that really does promote higher-quality and better-paid jobs in the public sector. If we have a more productive workforce, we can pay them better and create better conditions. That is what we all want to do.

If we want to improve productivity, why do we not stop the Department for Work and Pensions closures and keep the people who will chase the tax dodgers? Those are the people we want. If we want to improve productivity, we need to keep the jobs, stop the centralisation programme and keep the DWP jobs going.

The idea is to provide a better-quality service, applying modern technology and techniques to serve those who need the scheme. I am sure that the Minister will be interested in any detailed criticisms the hon. Gentleman may have. This Government have spent a lot of our public money on dealing with abuse on the tax side, because they rightly believe that we should be fair, crack down on tax abuse and ensure that people do not cheat the welfare system. Neither is a good thing to do. If we want a sensible financial balance, we should surely be fair to both sides by ensuring that we are not cheated out of public money and that we are not short-changed by people who break the law on tax.

The right hon. Gentleman was waxing lyrical about corporation tax earlier. Of course, private finance initiatives—with companies that Members on both sides of the House have concerns about—have been beneficiaries of the Government’s changes to corporation tax. Those companies benefit from the lower corporation tax espoused by the right hon. Gentleman, even though they signed contracts with the Government to pay a higher rate of corporation tax that was part of the value-for-money assessment for those contracts. If he wants to get the money owed to the public sector, does he recognise that corporation tax may need to be amended in certain ways and with some companies to reflect that?

The hon. Lady is very brave to mention PFI because that was a failed experiment by the Labour Government, who got through an awful lot of public money needlessly by not doing good deals with the private sector and not understanding that they had to be more careful in the kinds of contract they signed.

I welcome the right hon. Gentleman’s concerns about PFI. I would like to hear him talk about Private Finance 2, which is this Government’s proposal, including £23 billion of infrastructure investment that will be done under the same contracts, and which therefore faces the same challenges. Many Labour Members recognise the need to deal with PFI. I would hope to hear the right hon. Gentleman—a man who has been so proud of the role of corporation tax—deal with them equally rather than avoid the question. I am sure that his constituents would like that too.

I did not avoid the question at all. I pointed out that most PFI contracts were signed under the Labour Government. When I was a Secretary of State, I remember being offered a PFI route to financing a new hospital. I looked at the numbers and did not think they worked, so I said, “I’d rather finance it in the normal way by public borrowing because that would clearly be cheaper and give us more control.” That was a bit of a surprise to my officials but they quite liked the advice I gave them on the subject. It is the job of a Minister to understand these things, but a lot of Labour Ministers did not understand the contracts they were signing, and those contracts had weaknesses. If the hon. Lady has problems with contracts that Ministers are currently signing, it is her job as an Opposition MP—she will not be shy about doing this—to give chapter and verse. She has not been specific, but we do not have time to turn this into a debate about individual contracts. I am sure that my ministerial friends, particularly in the Treasury spending department, would be very interested to hear where she thinks they have gone wrong. However. we probably need to move on.

I thank the right hon. Gentleman for giving way again. I am pleased to hear his concerns. I note his intention to increase public sector borrowing. I repeat that the Government are talking about £23 billion of infrastructure spending financed by this Bill. They are looking at PF2, which is “exactly the same” as PFI. They are not my words, but those of the National Audit Office. Will he join me in supporting amendments to the Bill to ensure that those companies pay their fair share of tax and the public sector gets the money it deserves?

I have no evidence that makes me believe they will not pay their fair share of tax. I am sure that my ministerial friends have heard the hon. Lady’s point and will look carefully at the issue. It is good that a lot of our future infrastructure programme will be privately financed, but I always apply a simple test. If the thing is going to be privately financed, I want to ensure that the private sector is bearing significant risk in return for the reward it wants to earn. I do not like phoney PFIs, whereby the private sector cajoles the public sector into taking all or most of the risk while giving a higher reward than one would get on a normal Government bond in order for the contract to be signed. There were quite a lot of those under the Labour Government and the taxpayer is much the poorer as a result. It is part of the reason that we did not get the gains in public sector productivity that we would like to achieve. If we do not discipline the big investment spend, we do not drive forward the productivity gains that we clearly need to make across a large public sector.

In conclusion, the best way to raise the extra money we need to pay wages and improve public services—an aim that is shared across the Chamber, contrary to Labour’s belief—is to drive further growth in the economy so that more people are in jobs to pay tax, and so that more companies are doing things here and making profits here on which they can pay tax. We need a series of tax rates that are not too complicated and that are low enough to be sensible so that we are internationally competitive. Then individuals and companies will have every incentive to do more, invest more, work harder and work smarter in order to carry the economy forward. I trust that is what my hon. and right hon. Friends will be doing.

I do have some worries about the length of modern Finance Bills. It is useful to have another doorstop, but it is a bit of a barrier to our reading every page and giving it the credit that it undoubtedly deserves. It would be good to see whether we could have a period of fewer and simpler taxes so that we do not need quite so much language in Finance Bills. It would also certainly be good to look at what one can learn from the success of raising more revenue from richer income tax earners by going from 50% to 45% and getting more revenue out of companies by going from 28% to 19%. We could apply that principle more generally to other taxes because we would then have a win-win situation. We would have more money for our public services, more economic growth, more people in jobs and more people keeping more of the money they earn. That might make for happier constituents, and that is my main aim in being here.

I am grateful for the opportunity to speak in the debate on behalf of the Scottish National party. The SNP submitted a reasoned amendment to the Finance Bill because we believe that it is a wholly inadequate response to the economic challenges faced by Scotland and the UK. Our reasoned amendment is on the Order Paper, but it has not been taken, and I have noted that.

Order. The hon. Lady will, I hope, be aware that the amendment was not selected, so it should not be debated. I am sure she will want to return to the main business of the House.

I thank you for that, Madam Deputy Speaker. I just wanted to briefly mention that we did table the amendment, but I will not debate it. You will be happy to know that it is not part of the substance of my speech.

As the hon. Member for Bootle (Peter Dowd) mentioned, the House gave a Second Reading to the European Union (Withdrawal) Bill last night. That Bill, the Government tell us, is intended to transcribe EU law into UK law so that there will be minimum fuss on the day the UK leaves the EU, but it fails pretty miserably. The UK’s position is that the UK will leave the customs union, the single market and arrangements for freedom of movement. The economy of these islands will suffer as a result, but the UK Government have not taken that seriously in the Finance Bill, or at any other stage so far.

This Finance Bill derives from the most muddled of processes. The business that comes through this House is pretty difficult to understand and chaotic at times, but this Bill has been one of the most impressive examples. We had the Budget back in March, and the original Finance Bill was published on 20 March. I remember that because it was my birthday, and receiving a Finance Bill was a wonderful birthday present—I was delighted. The Second Reading of that Bill was on the day when the Prime Minister, in her wisdom, announced that she was calling a general election, so she upset a fair few of her colleagues that day, as well as making the debate slightly different from how it was supposed to be.

The further stages of that Finance Bill were a complete and total guddle. Then we had the election, and the Government lost their majority. We have ended up with this bodged-together Bill, based on the remains of what was put forward back in March. My concern is that by the time Third Reading of this Finance Bill comes round, we will be about eight months from the Budget that created it. That is an incredible length of time, and I can prove it.

I draw the House’s attention to some of the assumptions made in the March 2017 Budget. First, let us look at the Office for Budget Responsibility predictions for inflation—Members should remember that the Finance Bill is written on the basis of those predictions, as well as other measures. The OBR predicted that the quarter 1 figure for inflation would be 1.9% and that the quarter 2 figure would be 2.4%. Actually, the quarter 1 figure was 0.2% higher, at 2.1%, and the quarter 2 figure was 0.3% higher, at 2.7%. That means that the money people have to spend is going less far than was predicted in March—the things that people buy are getting more expensive.

At the spring Budget, the OBR had predicted that average earnings would grow by 2.9% in quarter 4 of last year and by 3% in quarter 1 of 2017, but they actually grew by only 2.8%—1.1% less—in quarter 4, and by 2.4%—0.6% less—in quarter 1. That means that people have less money to spend on goods, which we have already said are more expensive.

Perhaps most tellingly, though, the OBR predicted that real household disposable income would drop by 0.2% in quarter 1 of this year. In fact, it dropped by 1.4%—by significantly more than the prediction on which basis the measures in this Finance Bill were created. As I said, that shows that people have less money to spend. Folk are feeling the squeeze, and the situation is worse than was predicted by the OBR when these Budget measures were written.

I spoke on behalf of the SNP on Third Reading of the previous Finance Bill. I would add, for Conservative colleagues, that only four people spoke in that debate, and one quarter of them were from the SNP, so it is grand that Conservative Members are taking the moral high ground today, but they did not pitch up for the last debate. When I ended my speech then, I said:

“I hope that in the next Parliament, the new Government will recognise the financial impact of Brexit on household budgets and jobs. I hope we see real changes that take into account the effects of Brexit.”—[Official Report, 25 April 2017; Vol. 624, c. 1056.]

So far, I have been completely disappointed.

In Scotland, our Government have recognised the combined impact of inflation and wage stagnation, and we have committed to removing the public sector pay cap. That is part of the reason why we voted with the Labour party on termination payments. We do not feel that now is the time to be squeezing people’s incomes further and to make such changes, and we will be looking to scrutinise them in Committee.

Is the hon. Lady aware that there was also a sharp upward spike in inflation in Germany and the United States of America, and that the main underlying cause was, of course, energy prices and world commodity prices?

It frankly does not matter what the inflation figures there were. What matters is that people here are feeling the squeeze, that people here are finding that things are more expensive, and that people here are finding that their wages have not gone up. That is the concern; that is what we are discussing here.

On the subject of investing, our programme for government in Scotland involves creating a national investment bank to support economic growth and to invest in business research and development. We hope to channel finance where it can do the most good. The Government here have the national productivity investment fund. We are still not entirely clear where all that money will be spent and how it will be spent, and I look forward to seeing what will happen. I hope that the UK Government can look at similar measures to the ones the Scottish Government are looking at in relation to the Scottish national investment bank, which will ensure that investment and economic growth are in the right places.

Would it not be better for this Government, instead of allocating spending into the next Parliament, to spend that money now and invest in something like a national investment bank so that they and other bodies will have the ability to mitigate the damage a hard Brexit will cause?

I agree with my colleague. Given the uncertainty that businesses are facing and their concerns, now is the time to make those decisions and to try to raise the confidence of businesses. This is a real issue, and one that the Government have dodged.

When we debated the Ways and Means resolutions, I mentioned the proposals on museums and galleries, which are in clause 21. I raised the fact that the Value Added Tax (Refund of Tax to Museums and Galleries) (Amendment) Order 2017 has not, as far as I am aware, been laid yet. On 17 July, in response to a written question from my hon. Friend the Member for Glasgow Central (Alison Thewliss), the Government said that that would happen as soon as possible, but as far as I am aware the motion has not yet been tabled. If the Minister gets the chance later, I would very much appreciate it if he said when he does plan to lay the order, because that would be very useful for museums and galleries.

I have asked some questions about this. My hon. Friend will be aware that organisations such as the Glasgow Women’s Library have had extensive refurbishment work done to their properties, and the VAT refund they can claim will mean quite a lot to small organisations that have made investments in their facilities.

I think it is the case that that statutory instrument has been laid today, but in the event that it has not, I will chase it up.

I very much appreciate the Minister taking that action. I thank my hon. Friend the Member for Glasgow Central for her tenacity in repeatedly bringing this matter to his and to my attention.

I need to flag up the issue of carbon capture and storage. I have already said that the way in which this Finance Bill has been produced has been a complete guddle. The issue of carbon capture and storage highlights the very worst of the UK Government’s Treasury and how it has behaved in the past. Because the Treasury and the previous Government went, in effect, above the head of the Department of Energy and Climate Change, the £1 billion ring-fenced budget that was in place was pooled with no warning, and carbon capture and storage was left dead in the water. The Scottish Government have recognised the importance of carbon capture and storage to our future energy strategy, and they are providing money to explore the possibility of reviving the project. It is really important that Scotland prioritises projects such as this and that they proceed. This is one of the clearest examples I can remember of the Treasury completely ignoring advice from officials and, indeed, from Ministers. I hope that this Treasury makes different decisions from those of the previous Treasury and moves forward in a more collegiate manner. Particularly because this is now a minority Government, the Treasury can no longer behave how it likes and get away with it. It needs to talk to people and listen to their answers.

Last time I spoke about this, I mentioned the provisions in clause 64, which is about errors in taxpayers’ documents. I raised with the Minister my concern that people will lose out as a result of employing somebody who they think is qualified to help with their tax return, but is in fact not qualified. I was not clear—I am still not clear from this Bill—about exactly how the process will work and whether people will be unduly penalised for something that was not their fault. I look forward to exploring that matter further in Committee with the Minister. I hope that he has heard what I have said and will provide appropriate responses.

This would not be a proceeding on a Finance Bill if I did not bring up the issue of VAT on police and fire services. In its first three years, Scotland’s police force paid £76.5 million in VAT. Highways England, a national body, does not pay VAT. London Legacy, a national organisation, is exempt from VAT. The Tories must now reverse their damaging imposition of VAT on police and fire services, which uniquely applies only in Scotland.

I am looking forward to the Committee stage of this Bill so that we can debate in detail the Government’s lack of action on squeezed households. Whatever happened to the Prime Minister’s support for “just about managings”? Conservative Members talk all the time about how they are reducing inequality and what a great thing that is, but I want to mention the median income for non-retired households—that sounds incredibly technical. In 2007-08, the median income for non-retired households was £28,817. In 2015-16, the figure was lower: £28,481. These stats are from the UK Statistics Authority. It is all well and good for Conservative Members to say that household income is rising, but the income of working households is not rising, and it has not risen for the best part of a decade. That is why people feel like their incomes are squeezed. It is why people are looking at their bank balances and worrying whether they can afford to pay the bills at the end of the month.

The hon. Lady says that we have to protect the income of hard-working households, yet although the First Minister had made a promise not to increase basic rate income tax, she now, in her programme for government, talks about increasing it, which will hurt the very people whom the hon. Lady is talking about protecting.

I do not think that the hon. Gentleman read the programme for government very well—he might want to go and have another look at it.

This Finance Bill is derived from a Budget that did not have inclusive growth and fairness at its heart. If the Chancellor wishes to increase productivity, he could do more to ensure that people receive fair pay for the hours that they work. He could do more to ensure that any growth in the economy is spread equally and that those at the bottom of the pile get a leg-up, as well as those at the top of the pile. He could properly tackle the precarious economic position that young people find themselves in. He could remove the inequity in VAT for police and fire services in Scotland. Lastly, and most importantly at this time, he could fight against a hard Brexit that drags us out of the single market and the customs union.

I am very grateful to be called to speak by you, Madam Deputy Speaker, particularly since we worked so well together in a previous incarnation. I am pleased to be speaking in this debate with you in the Chair.

It is a great pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman), who speaks for the SNP. She referred to the recent general election. I completely agree that while it did not go as well as we would have hoped, it did not go terribly well for her own party. I, for one, am very pleased to be joined on these Benches by a number of excellent Scottish Conservative colleagues. It might surprise her to know that I am equally pleased to be joined in this House by some Labour colleagues who are of a Unionist nature. The one very important thing that came out of the general election was that we strengthen the United Kingdom and the bonds that bring us together, whichever political party people are from, and weaken the forces of nationalism trying to break our country apart.

Obviously this has very little to do with the Finance Bill, but for the sake of completeness, the right hon. Gentleman might want to remind the House that the Scottish National party won the election in Scotland with a majority, which is something that the Tories do not have. As for nationalism, I think he should perhaps look in the mirror and reflect on his British nationalism before he casts aspersions on anybody else.

I was not casting aspersions. I was simply reminding everybody that the Scottish nationalists—that is what they are; they are a nationalist party—want to break up the United Kingdom, and I was simply congratulating my colleagues from Scottish constituencies on helping to strengthen our United Kingdom.

I think that my right hon. Friend is being too generous to the Scottish nationalists. They are not simply nationalists; they are incompetent. They were warned on the question of VAT and the police before they took those reforms though, and they went ahead regardless. It is their fault and their mess, and as usual they are trying to blame everyone else for it.

I am grateful to my hon. Friend for that intervention. By the way, Madam Deputy Speaker, I did not think that it would be out of order for me to make some brief remarks about something other than the Finance Bill, given that the Opposition Front-Bench spokesperson spent 10 minutes talking about yesterday and the hon. Member for Aberdeen North spent quite some time doing the same.

Let me move on to finance and the essential capability of the Bill, which is, of course, to raise revenue. My right hon. Friend the Member for Wokingham (John Redwood) talked about that, and of course the central point is about balancing the public finances. I shall not talk about that at length because I was fortunate enough to secure a Westminster Hall debate on the subject which, much like today’s, was well attended, with more than 20 Conservative colleagues and only one Opposition Back Bencher, the hon. Member for Islwyn (Chris Evans). To be fair to him, he spoke extremely well, but he was the only Opposition Back-Bench Member to speak in that debate, which demonstrated that when it comes to balancing the public finances, Opposition MPs are very good at spending money, but not so good at thinking of ways of balancing the books and ensuring that we have sound public finances. That is important because the sound public finances that the Bill helps to put in place will ensure that the country continues to grow and that we can continue to deliver pay rises for people across the country.

I want to take up the right hon. Gentleman’s challenge. I am sure that he is proud that the previous Government, of which he was part, extended capital gains tax to residential property sales for non-domiciles, so will he join me in suggesting that we close the loophole on commercial property sales? There is one idea that could raise some money for investment in this country.

I am very pleased that the measures in this Bill, which Opposition Front Benchers seem so unwilling to support, raise something like £1.6 billion—I am sure that the Financial Secretary will correct me if I am wrong—on top of the £1 billion we have raised from non-doms. Put together, that is £2.6 billion, which is more than the Labour party raised in all the time it was in government. If the hon. Lady compares Labour’s record in government with ours, she will see that we have been much more effective in raising taxes from non-doms to spend on our public services than her Government ever was.

How does the right hon. Gentleman think that the estimate of £1.6 billion to be raised by increased taxes on non-doms will be affected by the increase to two years in the time they have to transfer their funds into offshore trusts, thereby avoiding that increase in taxation? How will that impact on the figures?

Again, I am sure that the Financial Secretary will correct me if I am wrong, but the Treasury’s estimate of an extra £1.6 billion is, I think, robust. The hon. Lady ought to be aware that in the seven years the Government have been in power, we have introduced significant measures to clamp down on aggressive tax avoidance and evasion, and the Finance Bill continues those measures. We have managed to reduce the tax gap and are collecting more of the revenue that we should collect. Again, that record is better than that of the hon. Lady’s party in office.

The right hon. Gentleman is right that the Government have tried to take measures to tackle multinational tax avoidance, but they have not been very successful, have they? When the diverted profits tax was announced, it was hailed as the so-called Google tax. That was all well and good, except for the fact that Google did not end up paying very much, did it?

The hon. Gentleman has put his finger on an important point. There are measures that we can take here in the United Kingdom to raise more money from multinational corporations, and we have taken some of them, but to do a proper job we have to take measures in accordance with international partners. That is why I am pleased that the Government have been leading a lot of the work on the OECD’s base erosion project to come up with international definitions of profits and international agreements on how to tax those profits. Individual countries are not able to take those steps by themselves.

Imagine lacking both!

The right hon. Gentleman is absolutely right to say that we need more international co-operation if we are to curb the excesses of multinational corporations’ power. Does he therefore share my sadness that we are currently driving a coach and horses through the most sophisticated political and economic alliance in the history of the world—the European Union—which gives us that global power and the leadership to tackle those global excesses?

First, I am clearly not going to get in the way of the sophisticated political alliance between the hon. Members for Walthamstow (Stella Creasy) and for Ilford North. On the EU, I was on the same side of the argument as the hon. Gentleman—I campaigned for remain—but I am also a democrat. The country made a different choice and everyone in the House needs to support the European Union (Withdrawal) Bill, as we did yesterday, to ensure that we have a smooth exit from the EU. However, that does not mean that we should stop co-operating with our international partners. Even when we have left the European Union, I want to work closely with colleagues in Europe on finance, security and trade matters. We can work well with our neighbours, and we can also work with our international partners outside the European Union. Indeed, if we are to deal with global multinationals, we will have to deal with the United States and other countries where those multinationals are headquartered if we are to make progress.

My right hon. Friend is making a sound case, but would it not be right to suggest that it is even more important, in the light of Brexit, for us to be in total control of our finances at home and that we should draw in all the money that is owed to us in the best possible ways? That is going to be so important in keeping us productive.

I agree with my hon. Friend. Indeed, that is why the Financial Secretary to the Treasury set out a number of important areas in the Bill that deal with those issues.

I want to pick up on an issue that, interestingly, has been referred to by a number of colleagues. My right hon. Friend the Member for Wokingham (John Redwood) touched on the question of public sector productivity, and the hon. Member for Aberdeen North, who speaks for the SNP, also alluded to productivity. I think the hon. Lady got it a little wrong, however, when she talked about improving productivity by giving people higher pay. It is actually the other way round. We all want our constituents to get a pay rise—I think that that unites everyone in the House—but the only sustainable way to drive up pay in the public and private sectors is to improve productivity in both sectors. I shall set out a few areas in which we could do that.

First, however, I want to make a slightly humorous point to the Financial Secretary to the Treasury. I do not want to see an increase in the productivity of the parliamentary draftsmen in Her Majesty’s Treasury. Producing Finance Bills as thick as this one is perhaps not what we ought to be doing. I understand the complexity of these matters—I declare an interest as a non-practising chartered accountant—but I know from talking to colleagues in the business that they do not enormously welcome Finance Bills this thick. Much as this might upset them, I have to say that creating jobs for tax accountants is also perhaps not something that we ought to be doing. Slimmer Finance Bills with simpler, less complex legislation introducing lower tax rates from which we collect more revenue are the way to go. If we were to do that, we would be doing everyone a service, and those in the tax business could perhaps find more productive things to do. This gentle chiding is perhaps directed less towards my right hon. Friend the Financial Secretary to the Treasury than towards officials in his Department.

I declare an interest: I am a practising chartered accountant, when I have the time. My right hon. Friend said that lower rates can produce more revenue. Is that not exactly what has happened since 2010 with our reduction in corporation tax rates, which is paying the dividend of a greater return for the Treasury?

My hon. Friend makes a very good point, and he is exactly right. This was one area in which the debate about corporation tax rates during the general election campaign became rather confused. The Opposition kept saying that we were cutting corporation tax, and making it sound as though we were therefore going to collect less revenue. What we were doing, of course, was to reduce corporation tax rates. The purpose of doing so was to collect more corporation tax revenue, both to attract more businesses to locate in the United Kingdom and to enable the businesses that are already here to be more successful. That is an admirable aspiration but it is, as my hon. Friend said, what has happened in practice.

One of my concerns about the Labour party’s plans is that an increase in corporation tax rates would lead to the collection of less corporation tax revenue; and we would have less money, rather than more, to spend on our public services and our hard-working public sector workers. [Interruption.] I see Opposition Members, including those on the Front Bench, shaking their heads, but since we cut corporation tax rates, we have collected more corporation tax—

It is no good the shadow Minister shaking her head. The fact is that that is exactly what has happened. We are in the business of collecting revenue to spend, not putting up rates to punish people in order to make ourselves feel good.

Does the right hon. Gentleman accept that that has been shown to be true not only in the case of corporation tax but, in the Irish Republic, in the case of VAT? When VAT was reduced on aspects of the hospitality industry, tax revenues actually went up because that reduction generated more business. Indeed, there may be lessons to learn on VAT rates for the hospitality industry in the United Kingdom.

I am always grateful to have excellent suggestions from colleagues in Northern Ireland. It is worth remembering that they bring a particular perspective to Brexit, given that they have a land border with the Irish Republic. We need to be very conscious of tax effects across the border as we leave the European Union.

I set out in my Westminster Hall debate, which I will not reprise now, our good record on economic growth since 2010, our reduction of the deficit and the significant number of jobs that businesses in the United Kingdom have generated. That is all very positive. But I am perfectly happy, as are the Government, to accept that there is one area in which the country’s economic record since 2007-08—under both the Conservative party and the Labour party, when it was in government—has been less impressive, and that is productivity. Since the economic crash, productivity growth has stagnated, and the level of productivity is significantly below that of the G7.

As I have said, it is essential to raise productivity if we are going to increase pay in both the public and private sectors. I want—I think all Conservative Members want—to give public sector workers a pay rise, just as much as Opposition Members do. But we understand that that has to be paid for. There is also an element of fairness. Private sector wages fell, in cash terms, after the crash, but that did not happen in the public sector. The work done by the Institute for Fiscal Studies shows that after a number of years of pay restraint, pay in the public and private sectors is now roughly in balance. It is, perhaps, a little ahead in the public sector if we take account of the more generous pension schemes. I want workers in both the private sector and the public sector to be properly rewarded; I do not want to favour workers in one sector at the expense of those in the other. That idea is missing in the comments we have heard today from the trade unions about public sector workers. We have to have a balanced settlement for workers across the economy, not just those in one area of it.

It is not clear what has caused the lack of growth in productivity. It will probably not surprise anyone in the House to learn that according to economists—I apologise if there are any economists in the Chamber; I stopped my economic training when I left university—a number of things seem to be at the root of this, one of which is that there could well be a lack of wage growth, which means that companies are not investing in capital equipment to make work more effective. As a former Minister for Immigration, I think that having unlimited unskilled migration—it is definitely at the lower end of the labour market, keeping wage growth low—has certainly not encouraged companies to invest in machinery and equipment to drive up productivity. Leaving the European Union gives us the opportunity to reduce importing unskilled workers from the current level. That does not mean reducing it to zero, but reducing it a little will help to improve such an incentive.

To help my right hon. Friend, let me say that there is a good reason and a bad reason why productivity has been disappointing. The good reason is that we have generated lots of lower-value jobs—it is better to have a job than no job—and we now need to help those people to work smarter so that they can be paid better. [Interruption.] Labour Members do not want jobs for their constituents, but I do, and I then want to go on and get them, when they have been trained and skilled up, into better-paid work. The bad news is that we have lost a lot of top-end jobs in the North sea oil industry because of the maturity of the fields and the decline of output, as well as the hit on the price, and we have also lost quite a lot of top-end jobs in the City—some people did not like those top-end jobs very much, but the crash destroyed quite a lot of them in the City—and that has obviously depressed the overall productivity figures.

My right hon. Friend makes a very good point. I agree with him that the response to what he said about the growth in jobs was very disappointing. One thing I touched on in my Westminster Hall debate was the comparison between this country and some of our European neighbours. I must say that in Britain, where the level of unemployment for young people has fallen from 20% to 13%—I accept that that is still too high—the record, particularly for younger people, is phenomenally better even than in countries such as France, where the rate remains at 20%, while in some European countries that have completely lost control of their public finances, the rate is—

My right hon. Friend is absolutely right. Half of young people in Greece are unemployed, and that is after a significant number of other young people have come to countries such as the United Kingdom and Germany to work. I must say that that is not a sustainable economic model. I suspect there is going to have to be a shake-up in the eurozone at some point—more fiscal transfers, or looking at the currency—because it is not sustainable for half of a country’s young people to remain unemployed for a considerable period.

Thankfully, we have not had to confront such a problem in our country—we have a different set of challenges—but my right hon. Friend is right about productivity. Let us look at the Bank of England analysis. He has already referred to falling productivity in the oil and gas sector and the financial sector. As I have said, there has been the impact of the financial crisis on allocating capital. I think there is now enough capital in the economy, but the issue is about getting it to the right businesses. There has also been a slowing rate of growth in innovation and discovery, as well as some inaccuracies in the data.

There is no single thing that we can do, which is why I am very pleased that the Government have set out a range of options in the productivity plan published by the previous Chancellor, George Osborne, in his Budget immediately after the general election in 2015, and in the measures set out by my right hon. Friend the present Chancellor, who was in the Chamber earlier. In relation to the national productivity investment fund, the Chancellor has set out some very important areas of spending, which I will briefly mention.

The first area is accelerating the housing supply, which is absolutely critical. I share the concerns expressed by Opposition Members. It is absolutely critical that we look at growing the housing supply urgently so that younger people, and not only younger people, can find affordable houses for them either to rent or to aspire to buy. A very significant sum in the national productivity investment fund will go towards that incredibly important area. The second area is investment in transport. I welcome today’s announcement about the very significant investment in the A303 and the significant amount of money to ensure that we properly protect the ancient monument of Stonehenge. That is very important for me and colleagues from south-west England. We are also seeing improvements to rail, and to the missing link on the A417—the bit of the road that is not dualled—in which the Government are committed to investing. Therefore, there is investment in some important areas of transport.

I also welcome the conversations that my right hon. Friend the Secretary of State for Transport is having with colleagues in the north of England about significant investment that we could make on top of HS2 to connect cities in the north properly. My understanding is that if we see an agreed plan from Transport for the North, the Government will be very keen to fund that to drive productivity growth in the north of England, in the same way that significant investments in road infrastructure have driven productivity growth in London and the south of England.

It is important that we invest in other transport infra- structure such as airport connectivity. Particularly in the light of our leaving the European Union, Britain needs to be able to join up with global markets all around the world. I am particularly keen, as a south-west MP, for the Government to move forward on the Heathrow option and install that extra capacity so that businesses in my constituency, the south-west of England and elsewhere can be joined up properly with the rest of the world.

Does the right hon. Gentleman accept that an important issue in respect of connectivity and airports is the detrimental impact that high levels of air passenger duty have on the opening of new routes and on encouraging people to use existing routes from the United Kingdom to other parts of the world? The Government need to look at that seriously. What should we do about air passenger duty, and how can we stop it being detrimental to the kind of connectivity he is talking about?

The hon. Gentleman makes a very good point. It would be helpful if we reduced the level of air passenger duty, but the Government have to be mindful, since I have heard lots of bids in the debate for money to be spent, that we also have to raise it. If we want to reduce air passenger duty and we think that that will reduce the amount of revenue we collect, we will have to look at areas where we can reduce spending, at other taxes or at growth in productivity in the public sector, as my right hon. Friend the Member for Wokingham said, in order to do that. It is not a simple question. The Chancellor will no doubt look at it in the round as he makes his Budget judgments later this year.

I understand my right hon. Friend’s explanation, but perhaps the point the hon. Member for East Antrim (Sammy Wilson) was making—one with which I have some sympathy—was that, in the same way that we make the argument about corporation tax that if we lower the rate we will collect more money, perhaps if we lowered air passenger duty more people would fly and we would gather more revenue. There may also be more economic activity generally around the airports that would see an increase in passengers.

My hon. Friend makes a very good point. I accept that this is an area that is difficult to model, but when the Treasury does its Red Book and its economic forecasting—I think I understand this correctly —it uses a largely static model for tax forecasting. It assumes that if we reduce the rate of tax, we will collect not more money, but less. I understand that there is difficulty in doing the opposite, which is a dynamic model that tries to take into account the fact that there might be more economic activity and that looks at whether more or less revenue would be raised. I accept that that is a difficult process and I suspect that, on balance, the Treasury is trying to be relatively conservative with a small “c”. However, there is merit in looking at that. The Financial Secretary might want to consider the extent to which the Treasury, in making judgments about taxes, can look at how much we would drive up economic activity if we were to reduce tax rates, and therefore whether we would produce more tax.

There is a particularly strong case where aviation is concerned—a number of airlines, such as easyJet and Ryanair, rely on dynamic pricing and the elasticity of demand to fill their planes. They recognise that the lower their prices, the more likely they are to fill their planes, and that the greater frequency with which they fly their planes, the more people are likely to come. In my view, lower APD would therefore result in more economic activity and more people flying.

My hon. Friend has made that point powerfully and I see that it has landed with the Financial Secretary. We will see whether it fructifies into a policy shift.

Let me make a little more progress, then of course I will give way.

I would like to make two more points before I finish, Madam Deputy Speaker. The other area I wanted to mention in relation to the national productivity investment fund, which is incredibly important for my constituency, is the acceleration of the roll-out of broadband, in particular the full fibre roll-out. We have made considerable progress in rolling out broadband. By the end of this year, I think 80% of my constituents will have superfast broadband. In Gloucestershire we have a plan, with a new supplier, to roll out to the remaining households to meet the Government’s commitments under the universal service obligation. That is welcome. The more we can do to extend that across the country to increase those speeds with full fibre to the home and to business will be very welcome.

Finally, given the competition we face in the world, and the challenges, rightly raised, of ensuring that, as we leave the European Union, we have a global outlook and we remain competitive, it is very important for Ministers to have a sense of urgency in driving forward developments in housing, productivity and investment in road infrastructure. As a constituency MP, I know that the length of time it takes to build new houses and roads and to roll out broadband is very frustrating. I am sure that frustration is shared by Members across the House. One thing Treasury Ministers could do, when thinking about the settlements they make with Departments, is to reward those that accelerate progress. Perhaps Departments that deliver against the Government’s objectives more quickly could be rewarded with more money to go ever faster, and Departments that are a little slower at delivery perhaps might have some of their funding removed and moved to higher-rewarding parts of government where things are delivered more quickly. That might boost public sector productivity, as my right hon. Friend the Member for Wokingham mentioned.

The Finance Bill is a good start. It raises some much needed revenue to help to continue balancing the books. I, for one, will have no trouble supporting it in the Division Lobby today.

I am grateful for the opportunity to make my maiden speech in what has already been a lively and important debate on the Finance Bill.

Members will remember receiving lots of advice when they were waiting to make their maiden speeches. I found that most people were coming to me saying, “You must be light-hearted and you must be funny.” I am not quite sure why they were saying that to me in particular. [Laughter.] I am not sure I am going to succeed in doing that, but the wonderful staff of the Speaker’s office told me that today’s debate is one of the few that can go all night, with Members able to make contributions that last as long as they want. I will not promise to be as funny as Ken Dodd, but I can promise that my performance will not be as long as his. The great Eric Heffer, who was one of my predecessors, talked of having butterflies in his tummy when he made his maiden speech. Right now, I feel like I have two Liver Birds scrapping in my stomach.

I want to pay tribute to my immediate predecessor, Steve Rotheram: popular in Liverpool and popular across this House. I commend in particular his personal contribution to the fight for justice for the 96 and the release of all papers relating to the Hillsborough disaster. In October 2011, standing at this Bench, he delivered one of the most powerful and emotive speeches this House has ever heard. In it, fighting back tears, he forever commemorated the names and ages of the 96, who were, we can now say, unlawfully killed in April 1989. I wish him well as Metro Mayor of Liverpool city region.

The biographer Tony Barnes said of Liverpool:

“where the River Mersey meets the salt of the Irish sea...Waves of immigrants have spiced its unique flavour. Independence, verbal wit and physical toughness are prized, authority resented; at times it seems to crackle with a special charge.”

It is one of the great port cities of the world.

My grandad and dad worked on Liverpool’s docks in the days when they were the engine room of our city’s economic and social life. Casual dock labour gave rise to trade unions, collectivism and working class struggle. We are a city of survivors, and we have had to be. It is one reason we still hold dear our sense of solidarity and why today individuals are strong and communities proud. History, politics, theatre, music all matter. Liverpool’s influence stretches right the way through this nation’s cultural life. It has produced many of our famous and talented musicians, poets, writers, painters, comedians, actors, footballers—the list is endless.

We are home to the oldest and longest-established black community in the UK, the first Chinese community in the whole of Europe and England’s first mosque. Walton has its own proud heritage. L4 is still home to our two great football clubs, Liverpool and Everton, and the Sandon pub, where they both originated, still serves today. Robert Noonan, better known as Robert Tressell, the author of that great socialist manuscript, “The Ragged Trousered Philanthropists”, is buried in a pauper’s grave on the site of Rice Lane city farm, and the terraced houses in the shadow of Goodison Park count as one of our country’s most historic residential areas.

Throughout history, Liverpool has proven it can speak with one voice. There is still one right-wing rag that masquerades as a newspaper that no one would be seen dead reading in my city. In this election, the people of Walton acted as one, giving Labour 85.7% of the vote—a psephological phenomenon but, most importantly, a rejection of austerity and a clarion call for a radical alternative. The issues affecting the lives of people across north Liverpool are stark. When I visit primary schools to speak to 10 and 11-year-olds in year 6, the statistics tell me that 18 out of a class of 30 will not go on to get five good GCSEs. The few children’s centres that have survived the cuts of the last seven years and which should be places of play, supporting the development of babies and toddlers, now have to intervene against the ever more severe consequences of poverty. Hunger, ill health and squalor are returning. Drug, alcohol abuse and domestic violence are on the rise. Merseyside police are facing an impossible task as they are “stretched to the limit”—not my words but those of the police chief constable.

I do not have time to do justice to the agony the Government have inflicted through welfare and disability benefit cuts. It is no wonder that people who visit my surgeries as often as not break down in tears before they can utter a single word. In July, I asked the Prime Minister what her Government were doing to stop children going hungry this summer because schools had become part of the last resort, standing between children and hunger. She said:

“the best way we can deal with poverty…is for people to get into the workplace”.—[Official Report, 19 July 2017; Vol. 627, c. 835.]

In other words: get a job. The average wages in parts of Liverpool are £10,000 less than the national average, almost 40% of children in Walton are growing up in poverty, and we know that 60% of people in poverty are in work. No wonder her answer was met with outrage across Merseyside.

I am a proud Scouser. My mum has served our national health service for over 40 years on the frontline in Liverpool. Politics began to shape my life when in 1995 my dad was sacked, alongside 500 Liverpool dockers, for refusing to cross a picket line. That dispute—of workers fighting casualisation—lasted 27 months and left my dad unemployed for seven years. From the age of eight I stood on picket lines, and I am as proud to stand alongside workers in struggle today as an MP as I was then as a kid.

Nye Bevan said that he had only one concern in politics:

“where does power lie…and how can it be attained by the workers?”

That is what brings me to this House, and that is why I am so proud to have worked for the last five years for the Unite union, alongside its brilliant staff and shop stewards—and Len McCluskey, the best defender of workers in my lifetime and someone whom I am honoured to call a friend.

Reflecting on the maiden speeches of Eric Heffer in 1964 and Peter Kilfoyle in 1991, one cannot help but be struck by the continuity and permanency of the issues of unemployment, lack of investment and industrial decline. Radical new solutions are needed to tackle social problems that have persisted for generations. Today, the economic reality of north Liverpool makes a mockery of this Government’s rhetoric.

While life today may be hard, the future that we are being led towards is so dark that it is Orwellian. Ministers pretend that they are making tough decisions, saying that we are all going to work until we are 70. They do not care that the low-paid, unrewarding jobs done by many of my constituents will physically or mentally break them well before that age. They brag that they have created 2 million more jobs, but there are people in Walton who are doing two, three or four of them, and still struggling to make ends meet.

We are told that there is not enough money, yet there is deafening silence on the accumulation of corporate profits and tax abuses by the richest; on the gains from growth being funnelled into profits, not wages; and on the fact that we are experiencing the longest period of wage stagnation for 150 years, and have the most regionally unbalanced economy in the whole of Europe. I am 30 years old, and I cannot believe that the generation coming up behind me just do not see secure, well-paid employment, or owning their own homes, as a realistic prospect for themselves. They have only ever known the casual, low-paid, zero-hour economy that 21st-century capitalism demands.

We must see an end to the rigged economy. What comes next is up to us. New technology and automation are transforming the future of work. In the Tory dystopia, it will be a race to the bottom in which every working person loses out and there is always someone else to blame. My parents remember talk of a three-day working week, and the media asking, “What will we do with all our free time?” In his “white heat” speech of 1963, Harold Wilson talked of

“undreamed of living standards and the possibility of leisure ultimately on an unbelievable scale.”

He went on:

“if there had never been a case for Socialism before, automation would have created it.”

That could not be truer today. The fourth industrial revolution—the onset of artificial intelligence, robotics, cobotics, 3D printing and biotechnology, in the context of global finance and multinationalism—poses great challenges, but also great opportunities. It will require bold economic planning, and the political will to make it work for the whole of society. That is why the House must now start to consider ideas such as the “universal basic citizen’s income”. We are the sixth richest economy on the planet, and it is time to stop making excuses for the kind of human indignity and poverty that I see all too often in my own city.

At times, my own party lost its way. We failed to define the banking crisis as the result of casino capitalism that it was, and we started to talk the language of austerity and cuts. It was not good enough, and it only served to let this Government off the hook.

But today we have hope: a Labour leadership determined to transform society. We are once again a mass membership party. Like all great social change, it has been led from the grassroots up, and we have won millions to our cause. As Labour representatives in this House, we have a duty to the nearly 13 million people who voted for our radical alternative just three months ago: a fairer tax system; a more even distribution of wealth; regional investment banks supporting local economies; workers in control of their own lives, and democracy in the workplace; and a society where everyone is afforded the means to fulfil their potential.

More and more people in my city and across the country believe that can happen, and in the words of Yoko and John Lennon:

“A dream you dream alone is only a dream. A dream you dream together is reality.”

It gives me huge pleasure to follow such an assured and impassioned maiden speech by the new hon. Member for Liverpool, Walton (Dan Carden). I was born and brought up in south-east London, with a lot of family in Essex in the constituency I now represent, but my mother came originally from Sierra Leone, and the first part of the country that she set foot on when she arrived here in the early 1960s to set up a new life, and ultimately meet my father and have me, was the port of Liverpool. So the hon. Gentleman speaks of the Liver Birds alive in his stomach during his maiden speech, and my mother before she passed away recounted seeing those iconic buildings of the Royal Liver building, the Port of Liverpool building and the other one—

Yes; the three graces. Let me give the hon. Gentleman a piece of advice: never put lists in speeches, because everyone who does always forgets one of the elements of them.

The hon. Gentleman maintains that great Liverpudlian tradition of being a firebrand in the making, and I have no doubt that his contribution to this House will be significant even if I and my Conservative colleagues do not agree in every respect with the points he raises. I look forward, I hope for many years to come, to our crossing swords, linguistically at least, across this Chamber. I congratulate him on his maiden speech.

Turning to our Second Reading debate, Finance Bills are always important, and I will, with your indulgence, Madam Deputy Speaker, start by speaking in more general, almost philosophical, terms, before coming on to address a number of specific clauses. Having read through the briefing notes for the Bill—because, as my right hon. Friend the Member for Forest of Dean (Mr Harper) highlighted, it is in its entirety a bit of a weighty tome, and although I am pretty good at reading well into the small hours of the night, even I would be pushed to cover every single dot and comma of this gargantuan document—I am pleased to speak in support of the general tone of the things contained within it. Its main measures include the shift to reduce the tax burden on the majority of people, particularly those at the lower end of the income spectrum, and to reduce the tax burden for businesses to enable them to grow, recruit and employ, and to build the economy from a broad tax base. That goes back to one of my right hon. Friend’s points about reducing tax rates to stimulate economic activity both in the commercial sector and in people’s private lives, generating the financial fluidity that can then be harvested by Governments in order to invest in the public services that we value the most.

As Conservatives we should not be afraid of the concept of taxing and spending. There, I have said it out loud, and it was not even that painful. We have committed and are continuing to commit to increasing expenditure on the key public services on which we all rely. I spoke about my mother earlier, and she spent her entire professional life in the national health service as a nurse and then a midwife. We agree across the House that the NHS both deserves and demands increased Government investment, but the question is not just about how we spend, but about how we raise the money to invest. The rebalancing, over time, of the route taken by this Government on taxing economic activity is philosophically the right direction of travel. As we have done in Budgets and Finance Bills over the years that we have been in government, we should look at every opportunity to reduce the tax burden on individual taxpayers and businesses.

The topic of small businesses has come up several times already this afternoon, and my view has always been that if we have in our minds the economic impact of our political and financial decisions on the small business sector, we will rarely go wrong when it comes to the economy in general. If we look to relieve the financial burden on small businesses, they will without a shadow of a doubt be able to grow, expand and recruit, and big businesses will continue to do well in a more buoyant economic environment. The Bill contains several measures to relieve pressure on small businesses, but if I were to have a criticism, it is just that I would like to see that go further and faster. Particularly after we end our membership of the European Union, we should consider every opportunity to unleash the potential of the British business sector. Let us use that as the starting gun in a race for good ideas to unlock our small and medium-sized business sector, particularly digitally enabled micro-businesses.

Clauses 48 to 59 specifically address a phenomenon that has been brought to my attention in constituency advice surgeries. Smart, innovative British-based businesses are being unfairly undercut by the fulfilment houses of overseas businesses, which make it impossible for British businesses to maintain a sensible living, driving a number of them out of business. Those international players are not paying their fair share of tax. They are putting the squeeze on the sparky, hard-working, innovative, entrepreneurial, often back-bedroom businesses, many of which have been started by people who, demographically, are not as well represented in the British workforce as they should be; they are often ethnic-owned businesses. Women starting entrepreneurial digital businesses are being put under incredible pressure by big overseas players that are undercutting them unfairly. I am pleased that the Government have taken notice of that concern. This is a big step in the right direction, and I will keep a close eye on how it rolls out.

We continue our drive to ensure that non-doms who—“take advantage” is the wrong term—make use of our services and the positive environment we create also pay their fair share, and in this Bill I am pleased to see the Government continuing on that route to ensure that the people who use our public services and who live under the umbrella of protection we provide also pay their fair share.

I will now bring my comments to a conclusion. [Hon. Members: “Hear, hear!”] That is the best thing I have said thus far. I will be supporting the Government on this Bill, and I would encourage everyone to do so because its philosophical underpinning is exactly right. We need to continue making tax simpler, fairer and more effective.

It is a pleasure to follow the hon. Member for Braintree (James Cleverly), with whom I agree entirely on the support that small, digitally enabled microbusinesses need to compete with the large, global, mention-no-names fulfilment operations. I hope he is right that the Bill delivers the support that smaller businesses need.

It is also a pleasure to follow the hon. Member for Liverpool, Walton (Dan Carden). It is appropriate that he made his maiden speech in such an important debate. Having known him for some years before he was elected, I very much hope and expect that he will use his undoubted talents to change Labour policy so that it no longer supports 70% of the Tories’ cuts and instead backs a genuine alternative to austerity. I am sure that in future debates he will be happy to intervene on me, as I will on him.

I agree with my hon. Friend the Member for Aberdeen North (Kirsty Blackman) that we cannot support the Finance Bill tonight as it is derived from the last Tory Budget. She made it clear that, as many will remember, the Budget confirmed austerity and, in our opinion, woefully failed to mitigate the likely impact of the hard Tory Brexit that now lies before us—a hard Tory Brexit that at its heart, as we have heard confirmed this week, also represents a power grab on Scottish powers and the powers of other devolved nations.

My hon. Friend is also right to raise the issues of prices rising faster than wages, the impact of the continuing public sector pay cap and, most shockingly, the 10-year real-terms fall in the incomes of people who actually work, which speaks volumes for the lack of priority the UK Government are giving to those who put in a shift, 9 to 5, five days a week or more. Those people are substantially less well off now than they were prior to the downturn.

Like all Finance Bills, this one contains particular measures that would be very welcome if they stood alone—I will say a little about some of those measures today—and some that are less welcome. I will mainly concentrate on inconsistencies in the commencement of certain measures, the absence of guidance from HMRC in certain circumstances and an apparent increase in the amount of retrospective legislation. Let me give some examples to demonstrate all those things.

The provision of tax relief for pensions advice in clause 3 is welcome, as is the mirroring provision in clause 4 of tax relief for other necessary legal advice. I, like the rest of the SNP, certainly welcome the extension of the existing reliefs in those areas, but I see from the explanatory notes that the commencement of both clauses is retrospective, being from 6 April 2017. I have no issue with that on those provisions, except that I am not sure retrospective legislation is a good thing in principle.

It is equally sensible, as part of the process of tax simplification, to make changes, in clause 6, to the process of PAYE settlement agreements. They will not have effect until next year, and I have no problem with that. The explanatory notes state that the new regime will be “a largely automated process” and, again, that is probably sensible, but the commencement date for that largely automated process does not fit well with the recent changes announced for the implementation of a fully digital tax system, which has been put back until 2019. Indeed, the explanatory notes for clause 62 state:

“Regulations providing for digital record keeping cannot come into force before 1 April 2019.”

I hope that the people who undertake to go digital quickly do not suddenly find that they fall foul of regulation and guidance issued the following year. Given that this measure is expected to be in place in six months’ time, will the Minister tell us whether the promised strengthened HMRC guidelines will be available to businesses? When will that happen?

As has been mentioned in earlier speeches, a deal of attention has been paid to clause 15, which deals with business investment relief, and, in particular, the ability of partnerships, previously excluded from BIR, to now be eligible if they carry out commercial trades in their own right. I just wonder what the scale of those commercial trades will have to be for an application to be able to be made for BIR. Will it be one, two or 10 trades? Will it be half of the turnover? A little clarity on that would be very helpful. The Minister might want to explain further why those changes have been proposed, given that I was not aware of any particular demand from partnerships to have BIR associated with them in the first place. The clause is also retrospective, having effect for investments made after April this year.

Clause 26, dealing with the elections in relation to assets appropriated to trading stock, applies for appropriations made since 8 March this year. Clause 38, dealing with the first-year allowance for expenditure on electric vehicle plug-in points, has been in effect since 23 November 2016. Clause 19, relating to losses and the counteraction of avoidance arrangements, applies to all losses on or after 1 April this year, whereas changes to reference property losses, in certain circumstances, came into effect on 13 July this year.

I have given a handful of examples, some to be welcomed and others the subject of debate, where we have in one Bill retrospective commencement dates of 23 November 2016, 8 March 2017, 6 April 2017 and 13 July 2017. That demonstrates the serious issue of the level of retrospective tax law in the UK. The Bill also contains future implementation dates for 2018-19, which is inconsistent with other measures the legislation is supposed to complement and support. That quick glance allows us to understand perfectly well the criticism that the tax code is not only too long but far, far too complex.

I alluded earlier to the fact that one measure is not being implemented retrospectively: clause 65 and schedule 16, dealing with penalties for enablers of defeated tax avoidance. Of all the measures that any reasonable person might have assumed could—indeed, should—have been made retrospective, surely it should be the penalties for those the legislation says design, market or facilitate abusive tax avoidance. But no: lo and behold, the new penalties will not come into effect until after the Bill receives Royal Assent. The Minister prayed in aid HMRC’s efforts to clamp down and raise more money by tackling tax avoidance and abusive tax evasion. I very much welcome that, so I find it odd that given the measures in the Bill that are subject to retrospectivity, the penalties for the enablers of defeated tax avoidance are not.

I wish to raise three other small matters. First, the explanatory notes for clause 62, on digital reporting and record keeping for VAT, say that for those who are unable to use digital tools because of, for example, their geographical location—I assume that that means the absence of sufficiently fast broadband—alternatives will be provided. Will the Government guarantee that that means we will keep the current manual system and that there will be no unnecessary change and complexity?

The second matter relates to the Government’s failure to explain what Brexit really means—other than Brexit, as the soundbite goes. Clause 21 and schedule 6 cover relief for the production of museum and gallery exhibitions, as mentioned by my hon. Friend the Member for Glasgow Central (Alison Thewliss). The explanatory notes tell us that at least 25% of the qualifying expenditure must come from the European economic area. I know that the EEA is different from the EU, but as the UK withdraws from the EU will the Minister clarify whether, if all the qualifying expenditure is spent in the UK, that will apply as it would had it been spent elsewhere in the EEA?

Finally, I make no apologies for returning to clause 8 and the change to the income charged at the dividend nil rate, from £5,000 to £2,000 in 2018. To some extent this relates to the point made by the hon. Member for Braintree about small and microbusinesses, which start up and begin to just about make a profit, but from which the owner-proprietor earns barely the minimum wage, let alone the living wage, while their company grows. Many such people use that £5,000 tax-free dividend to make ends meet. I understood what the Minister said earlier about those who actually work for a third party but are nominally self-employed, and indeed about those with substantial share portfolios, for whom some extra tax-free money is simply a bonus, but surely to goodness the legislation can be drafted in such a way that it does not penalise or appear to act as a disincentive for those who wish to start a business, by taxing what might be the first modest dividend that that business might ever have had. I hope that, even at this late stage, the Government will look again and table some sensible amendments to ensure that the change captures the tax revenue from those from whom the Minister wants to see it captured but does not act as a disincentive to those who wish to start a business.

That was a gentle canter through some technical matters; I am happy to leave the broad-brush stuff to my hon. Friend the Member for Aberdeen North.

It is a pleasure to follow the hon. Member for Dundee East (Stewart Hosie). Thank you, Madam Deputy Speaker, for the opportunity to deliver my maiden speech in this important debate. I particularly welcome the further action to be taken against tax evasion and avoidance that is outlined in the Bill.

Being elected as Member of Parliament for Moray comes second only to marrying my wonderful wife Krystle as the proudest moment of my life. For the son of a farm worker and a school cook to be elected to serve his home area as Member of Parliament is a huge honour and privilege, and one that I will never take for granted. I was born in Moray and educated in Moray, and I have also been a farm worker there. I served for 10 years on Moray Council as councillor for Fochabers Lhanbryde, before representing Moray as part of the wider region as a Member of the Scottish Parliament following the 2016 Scottish election.

Everything I have done, and everything I do, is focused on this wonderful part of the country that I am proud to call home. Of course, others before me have also had that privilege. Alex Pollock was the last Conservative MP elected for Moray in 1983—the year in which I was born. Alex was a hard-working local MP. I still regularly see him in Forres, where he lives with his wife, Verena, and where I have my constituency office.

Margaret Ewing will be remembered by many in this House as a member of the nationalist Ewing dynasty but, locally, she was more fondly remembered for the caring way in which she fought for all her constituents. Even 11 years on from her sad death, she is still very fondly remembered.

My immediate predecessor and I held widely different views on a number of policy areas, none more so than on the future of Scotland. I supported Scotland remaining a strong part of the United Kingdom while Angus Robertson proposed separation and an independent nation. As MP for 16 years, he built up a formidable reputation as a consummate politician who transformed his party and played a significant role in the constitutional debate that we held in Scotland three years ago. Angus was a conscientious constituency MP, supported by a fantastic local office, but as leader of the third biggest party in this Chamber between 2015 and 2017, he played an integral role in national politics as well. Even though he is no longer in this House, I know that his service to Moray, to Scotland and to UK politics will not be forgotten.

It will not surprise hon. and right hon. Members in this Chamber to hear me describe Moray as the most beautiful part of the country—[Interruption.] No ifs, no buts; it is! It rises from Tomintoul on the southern edge of the Cairngorms national park to the shores of the Moray Firth in the north, where dolphins and seals are regular visitors. From Brodie as the entrance from the west to Keith as we leave in the east, we pass through some of the most stunningly beautiful and productive landscapes imaginable.

Forres has been a royal burgh since 1140, making it one of Scotland’s oldest towns. Grant Park—gifted by Sir Alexander Grant, the founder of the digestive biscuit—is a focal point of many visits. The gardens in the park are carefully tended by the fantastic volunteers of Forres in Bloom, and they have rightly received many UK and Scottish accolades for their outstanding displays every year. The natural amphitheatre of Grant Park makes it a fantastic venue for major events such as the European pipe band championships. Where else could we witness not only the very best bagpiping, but the local MP failing miserably in the world tattie scone baking championships?

Along the coast, many traditional communities remain vibrant and thriving. Lossiemouth is a bustling coastal town with outstanding beaches, making it a popular destination for holidaymakers and residents alike.

Returning inland to the largest settlement in Moray, the cathedral city of Elgin continues to grow. New homes and business start-ups are common, confirming the desire of many people to live and work in this part of Scotland. Crossing the border into Banffshire, Buckie is proud of its seafaring past and optimistic about its future. Yesterday’s announcement of the contract for difference award for Moray’s largest proposed offshore windfarm means that Buckie harbour has a real opportunity to support this major investment. Events such as the Buckie Christmas Kracker and the Portgordon fireworks display are just two gatherings held on this coastline that bring local people together every year. They are only possible thanks to the effort and dedication of so many volunteers.

Keith is the last of the main settlements. Mid Street hosts a whole range of shops for even the most discerning customer, as well as its own kilt school. If Members travel around the area just now, they will see the imaginative ways in which members of Keith Young Farmers Club have displayed and designed their silage bales to celebrate the 70th anniversary of the club’s formation. They have transformed the mundane winter animal feed wrapped in plastic into works of art.

Speyside completes this tour of the constituency. Although the area may be more sparsely populated than the rest of Moray, it more than makes up for it with community engagement and co-operation. For example, there is the annual tea in the park event. Throughout August, Glenlivet Hall is a hive of activity as volunteers cook, bake, serve and wash up for customers who come from far and wide.

During the month of August, and the months of planning before then, volunteers work together to ensure that tea in the park goes from strength to strength. Next year, they will celebrate their 15th anniversary. If anyone is unlucky enough to visit on the day when I don my pinny to help out, I can only apologise for my very limited waiting skills.

Although many people visit Moray for its beauty, they leave with its bounty. Moray is home to world-renowned companies such as Walkers Shortbread, Baxters Food Group and Johnstons of Elgin woollen mill, to name just a few. And, of course, we have a little whisky. We produce more of this iconic Scottish drink than any other part of the country. There are 47 Scotch whisky distilleries in Moray out of a total of 199 across the country. That means that nearly 40% of Scotch whisky distilleries are in the Moray constituency.

Everyone will have their favourite tipple from a Moray distillery, but the one that I am particularly interested in currently sits in warehouse No. 1 at Glenfarclas distillery. The cask that sits in that warehouse was filled in 1994 by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who was Chancellor of the Exchequer at the time. As he sealed the barrel, he stated that it could only be opened and the whisky bottled when Moray once again elected a Conservative Member of Parliament. I know that good things come to those who wait, but I was relieved that the people of Moray decided that, by 2017, the whisky had matured long enough. I certainly hope that the Father of the House will join me in sharing a dram of this 23-year-old from the cask when it is opened in the very near future.

As well as places and produce, Moray is proud of its people, including inspirational individuals such as Lucy Lintott. When doctors diagnosed Lucy with motor neurone disease at the age of just 19, she took the decision not to dwell on her diagnosis, but to embrace life. Anyone who watched her recent documentary could not fail to be impressed by her courage, infectious laughter and zest for life.

Others who have contributed heavily to the area are the men and women of our armed forces. Moray’s proud tradition of supporting military personnel continues today with the 39 Engineer Regiment at Kinloss and the RAF base at Lossiemouth. The future looks bright as we prepare for the arrival of the new Poseidon P-8 aircraft, which could be delivered only due to investment by the UK Government to support the United Kingdom’s armed forces.

In the time that remains, I want to focus on some of the key issues that I will tackle as Moray’s MP. The first is a theme that has been addressed in several maiden speeches and, indeed, by many Members across the House: broadband. Although some parts of Moray are well served with connections and speeds, too many are not. It is of no comfort to those who tell me that their broadband speeds are little better than the old dial-up connections to hear that 94% of Moray premises have access to fibre broadband. If the costs are prohibitive or people are part of the 6% who cannot even access it if they want to, people are right to demand better.

Secondly, I will use my time in this House and my position on these Government Benches to promote the Moray growth deal at every opportunity. The ambitious projects that are being formulated are designed to transform our economy, to address concerns around encouraging young people to live, work and remain in the area, and to tackle gender inequality in employment. To ensure that the Moray growth deal truly delivers what local people want and expect, the council is encouraging individuals and communities to respond to its survey to shape the growth deal. The project is titled “My Moray” but, with the influence of and input from local people, we can ensure the final outcome is “Our Moray”—a vision that delivers for everyone and every part of this great constituency.

The issue of delivery charges has been raised with me since day one in this post and I promised to highlight it in my maiden speech. I live in Moray, and I know that it is part of mainland United Kingdom. It is just unfortunate that many businesses and delivery firms are not quite as observant. They believe that we live on some far-flung island because we have an AB or an IV postcode. They duly add extortionate delivery charges or, in some cases, refuse to deliver at all. That is not only dumb; it is disrespectful. It is not just an inconvenience; it is inexcusable. It is not right; it is just plain wrong. There is a solution, but it needs companies and delivery firms to work together. In that way, Moray customers can feel as valued as any others in the UK. It is a simple request, but one that would make a big difference in our area.

My hobby is football refereeing, and I imagine that the full-time whistle is about to be blown on my maiden speech. When I came to this House, some suggested that my involvement in our great game, trying to manage two opposing sides performing on a green surface, might qualify me to consider a role in the Speaker’s Chair. I confirm that I have no such desire. Twenty-two unruly individuals are more than enough for me to try and control—I cannot imagine what 650 must be like. However, I have found that when I am struggling with 22, flashing a red card and reducing the numbers can help somewhat, so if the Procedure Committee were interested in evolving a red and yellow card system for the Chamber, I would be more than happy to provide the necessary tools.

This Chamber and those of us who make up the United Kingdom Parliament are often held in low regard by the public who send us here. They see politics as distant from them because of the partisan point scoring that emanates across these Benches or between the various Parliaments around this country. As a proud Scot, I welcome the fact that I have two Parliaments—one in Edinburgh and one in London. We will find a lot more favour with our constituents if we spend our time working together where there are common goals, rather than seeking division where there may be none.

To paraphrase John F. Kennedy, let us not seek the Conservative answer or the Labour answer, but the right answer. Let us not seek to fix the blame for the past; let us accept our own responsibility for the future. If we do that, we may begin to restore the reputation of this Parliament and those of us who serve our constituents from here. This is the philosophy I will adopt during my time in this House.

I congratulate the hon. Member for Moray (Douglas Ross) on a wonderful maiden speech. He paints a fantastic picture of a part of the country that I have yet to visit and that clearly has many delights to try, although, on his advice, I will pass on the home-made scones, if I may.

May I offer the hon. Gentleman some advice, as somebody who has been here all of seven years? He will find watching “Monty Python” a very useful guide to what goes on in Parliament. Sometimes this Chamber can feel like the argument clinic, where some people have been paid to argue. The Brexit Secretary also appears to be taking his lead from the Spanish inquisition in his approach to the negotiations, and he is equally effective. Ultimately, Brexit is really like the big Monty Python foot, slamming down on everything we do in the Chamber in this Parliament.

That is why this Finance Bill is so important and why I look forward to the many hours we will spend debating it in Committee. It is vital that we do not let Brexit deter us from dealing with some of the many problems we have in our country. The test we must therefore set for all proposed legislation in this House is, does it progress the needs of our communities and our country? I have to say that I find this Bill wanting in many different ways. The Government seem to have an economic plan based on personal debt, not UK productivity.

This week, I heard the Chancellor desperate for ideas. I want to be a helpful contributor to this House and to our debates, so in my speech today I shall set out for Ministers—I hope they will listen to some of our ideas—some suggestions on how we could get this country on to a sound economic footing. One of the Ministers is a former sparring partner of mine on the Public Accounts Committee, so he will know my personal commitment to value for money for the British public.

However, we first need to understand the context in which the Finance Bill is proposed—how we got to this position, why the legislation represents so many missed opportunities and why my colleague from the Scottish National party, the hon. Member for Aberdeen North (Kirsty Blackman), was right to talk about people feeling the squeeze. We know that for many of our constituents there is too much month at the end of the money. Therefore, when we are looking at tax measures, we are looking at how we might help our constituents, and we have to ask first about those who will bear the brunt of a Government who do not do things to tackle the impact on their lives of rising inflation, stagnant wages, low productivity and, indeed, that Brexit Monty Python foot.

Our country has an eye-watering £200 billion of personal debt. In every single legislative measure we make we must ask what we are doing to reduce that debt, because the consequences for so many are so great. My concern is that that debt is so high because the Government are balancing the books out of the pockets of our constituents.

In 2010, I sat on the Opposition Benches—a new MP, like the hon. Member for Moray—and listened to a Chancellor promise that the deficit would be eliminated. In 2016, I read the note from the Office for Budget Responsibility that recognised that the Government had broken their own deficit rule. The hon. Member for Moray talked about being a referee. We are not even on yellow cards with this Government as regards economic competency—it is a straight red card, as far as I am concerned.

Previous Chancellors have claimed time and again that they would get a grip on the public finances. Time and again, they have moved the goalposts. They changed the targets in 2014 to 2017 for eliminating the debt. In 2015, they changed the target to running a surplus in normal times by 2020-21. Then, in 2016, they changed the target again to reduce net borrowing to below 2%. Now, in the Tory manifesto, it has changed to 2026, and we are hearing that in the autumn Budget it could be changed to 2027. Last year we borrowed £52 billion, and it is expected that this year we will borrow another £60 billion. So forgive me, but I will not take any lectures from Government Members about fiscal responsibility. If, in these seven years, you had been on a business board and the finance director had come to you every single year, as Conservative Chancellors have, asking for more money because yet again they have not got to grips with how they were spending it, you would sack them. That is certainly what I hope the British public will do.

At the same time as we are borrowing more and failing to tackle the debt, our productivity is worse. I agree with the right hon. Member for Forest of Dean (Mr Harper), who is sadly no longer in his seat, that this is a challenge we cannot ignore, whatever is going on in Europe. A typical French person need only work Monday to Thursday compared with a typical Brit, and it is the same for Germany, which has a 29% higher GDP per hour than the UK. We have seen a lost decade of productivity in this country, and our communities and businesses are paying, so that we are now in an extraordinary position where it is more expensive than ever before to employ somebody, despite the squeeze on wages. Stagflation is upon us. Inflation is up by 12% since 2010, but wages are down by 6%. It is little wonder that so many in our communities are borrowing.

When we come to legislate on income tax or on the increasing numbers of people who are self-employed—the small business owners whom we all cherish in our communities—let us ask what we can do to help them. Let us not be blind to these challenges, or to the inequality that is stubborn in our country. During this time, the people who benefit from many of the measures in such legislation have done rather well. In 2000, FTSE 100 chief executives were paid, on average, £1.4 million a year. Now, it is £4.5 million—a 220% increase. That is not market forces, but it shows a failure by us as a country to invest in people. Our productivity reveals that challenge, and the personal debt of our communities is paying for it.

Ministers may ask what I would do to raise money—we have heard that question before—so let me give them some examples of things that we could put into this Bill. We could, for example, look at clause 16 on capital gains tax. Earlier I asked Government Members whether they might join me on this. After all, there has been much talk about tackling the issues of non-doms. Indeed, the previous Chancellor changed the legislation to put capital gains tax on to residential property sales, but now there is a loophole around commercial property sales. Let me reassure Government Members that if they choose to follow our advice on this matter, it has been tackled in the United States, in Canada and in Australia. It is not crazy economics but sensible planning.

We could apply the same rate of tax on carried interest to hedge fund managers. Why are they not paying the same rates of income tax as the cleaners who clean their offices—still, on this Government’s watch, seven years on? We could change business property relief, too often used to avoid inheritance tax, restricting it to small businesses and perhaps bringing in a cap of, say, £5 million, so that people do not use that to avoid taxation. We could deal with commercial real estate in cases where people are avoiding the 5% stamp duty by putting it into companies. Those are all things that could be put into clause 16 to raise money and to be fair about who is paying all the taxes that are avoided.

Clause 69 talks about gathering information. We should be dealing with the information about the debts that our communities are based around. Forty-one per cent. of consumer debt is on credit cards. Hon. Members should talk to the people in their communities who are now called zombie debtors, paying the interest but not the capital on the money that they owe. They are borrowing to stay afloat because their wages have not risen, and they are borrowing for basics—to put food on their table, to keep a roof above their head, and to put petrol in their car to get to their jobs where they are not getting the pay rise that they deserve. Nothing in this Bill will tackle the squeeze on them from that debt or help the third of people who are now in debt because they are behind on credit card repayments. Clause 69 could introduce an FCA consultation, as despite the fact it is looking at credit card debt it is not considering the lessons that Ministers could learn from the cap on high-cost credit companies. When some people are paying £2.50 for every £1 they are borrowing in this way to stay afloat, it is time to extend the cap on high-cost credit and payday loans to credit card companies. We could do that in this Bill; we could certainly gather the information on the impact it would have.

We could also look at the creditors we as a country owe. Members on both sides of the House will know of my interest in private finance initiatives and my recognition that Governments of all colours have used them and continue to use them. I note that Ministers have talked about the £23 billion they wish to invest in infrastructure and I am sad that the right hon. Member for Wokingham (John Redwood) is not in the Chamber given the concern we share about whether private finance is the best way to do that. Of the additional money put into the NHS in the spending review, 22% will leach out to PFI companies as profit, and every constituency in this country has one of these deals.

Let me give an example of the kind of money we are talking about. The company that owns University College Hospital in London has made pre-tax profits of £190 million out of the £735 million that we as taxpayers have paid it. That is enough money to build another hospital outright. This country now owes £300 billion in PFI debts on projects that should have cost £55 billion. Nobody in this House can be smug about PFI. When PF2 is as expensive and the preferred model for how the Government intend to invest in infrastructure, Members on both sides should be asking whether their communities can avoid such contracts.

With eight companies owning 92% of the equity stakes in the hospital sector, there is certainly more work to be done to look into them. Indeed, the Bill gives an exemption to the very companies for the interest that they pay on shares. These companies signed deals with the public sector to pay a certain rate of corporation tax and to commit to paying UK taxes. Indeed, the value for money assessments of the deals was predicated on that, and I note that the Government have not updated the value for money deal to take account of this information from 2013, despite promising more than four years ago that they would.

Schedule 10 to the Bill allows those companies to claim back the interest without the cap. How can we, as a society, give these companies more money through that investment relief as we see our public sector struggling and that money being leached out of it? Surely we should change that, and I hope that Members from all parties will listen and support changes to proposed new section 439.

While Brexit is a Monty Python foot, for many of our small businesses VAT is their biggest compliance issue. Many of them trade in Europe and therefore have to reclaim VAT from other countries. The clock is ticking for us to leave the European Union and the lack of information in this legislation about how companies will manage VAT post-Brexit is alarming. In particular, articles 170 and 171 of the Council of Ministers’ 2006 directive—I hope that the Minister is writing this down—are matched by section 39 of the Value Added Tax Act 1994. That allows companies in Britain to seamlessly reclaim VAT through intra-EU legislation. Those options will be gone for our companies when we leave the European Union unless we have alternative arrangements, so when the Government are making legislation through part 4 of the Bill on VAT, the lack of any correlation between the 14th directive and the importance of aligning those measures so that businesses have a seamless transition and can be confident that they can manage their VAT if they trade with other countries is very frightening.

The hon. Lady’s point about VAT and the arrangements that may or may not pertain when we leave the European Union will be dealt with in the upcoming customs and excise Bill.

I thank the Minister for that point, but obviously the Bill is about Making Tax Digital and the intra-EU process is digitised. That is what makes it so seamless for so many companies. When we are making legislation about making VAT a digital entity and working online, surely we should be joining these things up to make it as easy as possible for our constituents who have to deal with these issues, rather than separating it out. My point is simply that this Bill is now coming towards the House at the same time as those negotiations are happening. Our constituents deserve clarity on how these things are going to work together.

That applies particularly to our self-employed constituents. Clause 64 could help many of them who have to deal with the errors relating to their welfare entitlement and their tax entitlement. We know that 18% of self-employed people get tax credits, compared with 10% of people who are employed, yet there is nothing in the Bill to help them. I am sure that my colleague—another gentleman from the SNP, whose constituency is I am sure as beautiful as Moray but unfortunately I have forgotten what it is—would agree that we could help those people through this legislation by joining up the way in which the state works with self-employed people. Issues such as how they deal with VAT, with universal credit and with insurance will all be covered in the Bill, but there is an absence of ideas from the Government on how to help those people.

The Government also seem to be overlooking some of the poorest people in our society. I know this because, 18 months ago, I took part in the consultation on tips, gratuities and service charges—the disguised remuneration that the Government are so concerned about—yet, 18 months on, we are no further forward on finding out what the Government are going to do to prevent some of the poorest workers in our retail industries from being ripped off by employers who dip into their tips and use them to prop up their businesses. I have given examples of this to the Treasury and to HMRC, and these issues could have been dealt with in this Bill, but there is nothing there. There is nothing in the Bill to protect workers who get their tips through an electronic system or to ensure that their employers are not taking a surcharge from them. There is nothing in the legislation that even gives a legal right to a payslip—a very basic piece of information that would help to stop those people being exploited.

Those 10 ideas reflect the things we could have done, through this Bill, to help the poorest hard-working people in our communities who will be stamped on by that Brexit “Monty Python” foot. I look at the gaps in the Bill and at the ease with which non-doms will slip through the loopholes, and I see a Government who are not only running out of ideas but running out of road on Brexit. God willing, with the work that we will do, they will also run out of time soon.

This second Finance Bill of the year brings forward measures that the House did not have time for before the general election. Without that election, I would not be standing here today to represent the people of Berwickshire, Roxburgh and Selkirk and I therefore very much welcome the opportunity to contribute to this debate. I am also delighted to speak so soon after my colleague, my hon. Friend the Member for Moray (Douglas Ross). I know Douglas from our time together in the Scottish Parliament, where he was an excellent Member, and I am confident that he will be a first-class representative in this place for the people of Moray. I congratulate him on his excellent maiden speech.

As a whole, this is a Bill that prioritises fairer taxation and economic stability—two policies that have served my constituency in the Scottish borders well. Indeed, the number claiming out-of-work benefits in Berwickshire, Roxburgh and Selkirk has fallen by more than 50% in the past five years and remains below the Scottish and UK average. Around 200 new businesses have been created in my constituency since 2013. That means more people in work and paying tax, and 200 more businesses making contributions to the public purse and providing local jobs. This has been achieved by encouraging growth, not through more and more public spending. Our deficit is now a third of what it was, and we remain on course to have a budget surplus within the next few years. This approach can be contrasted with that of Opposition Members, who stand for more spending, more borrowing and more debt. Labour Members stood on a manifesto that was completely uncosted and fiscally irresponsible. Their spending plans have a £58 billion black hole and their planned tax rises will drive away businesses and reduce investment.

The Conservative approach in successive Finance Acts also stands in stark contrast to that of Scottish National party Members, who want to drag Scotland out of the United Kingdom. This would leave Scotland with a £13 billion black hole in its public finances. While the UK’s deficit is now down to 3% of GDP, an independent Scotland would have a deficit worse than those of Spain or Greece, and one that would saddle our children, our grandchildren and probably our great-grandchildren with significant debt. Despite trying for years to get one, I have yet to hear a straight answer from an SNP Member about how they will plug that gap. That will need to be done with spending cuts, tax rises, higher borrowing or a lot of all three. To put that figure in context, £13 billion is more than Scotland spends each year on our health service. I ask: where is this money going to come from? Luckily, the vast majority of Scots seem to agree that that is not a price worth paying, which is why support for separation continues to fall.

My consideration of the Bill has given me the opportunity to reflect on my general views about fiscal matters. It will come as little surprise to Members that as a Conservative, my instinct is for taxation to be kept as low as possible. Doing so encourages growth and innovation, and it encourages the best and the brightest to move to the United Kingdom to work and do business. That view is all the more important for me because I represent the Scottish borders, so my constituents bear the brunt of different approaches to taxation in our United Kingdom. It is too easy for a business, or a higher-tax earner, to relocate south of the border if Scotland ceases to be an attractive place to do business, and I fear that that is increasingly becoming the case.

Taxation powers in Scotland are shared between the United Kingdom and the Scottish Parliament, after a considerable transfer of power to Holyrood, but the approach of the two Governments could not be more different. The Conservative Government here are backing Scottish business with lower corporation tax rates, investment in broadband and shortly, via the borderlands growth deal, significant investment in the south of Scotland. Personal taxation has been reduced by increasing the personal threshold, benefiting more than 2.5 million Scots. In contrast, the SNP has made Scotland the highest-tax part of this United Kingdom. Middle earners pay more income tax and more council tax per higher-banded property, and the large business supplement is twice the rate applicable in England. It is little wonder that Scotland has only narrowly avoided falling back into recession at a time when the UK economy is growing at a healthy rate.

I turn to the legislation that we are considering, in which there is much to welcome. My constituents will be happy with the provisions designed to crack down on aggressive tax measures, particularly the changes in part 4 that will prevent individuals from using artificial schemes to avoid paying the tax they owe. Those measures include new penalties for those who design or enable tax avoidance schemes that are later defeated by HMRC, building on the £160 billion in additional tax revenues that it has secured since 2010.

I think the time is right to abolish permanent non-dom status. It is only fair that those who have lived here for a considerable time pay tax in the same way as UK residents do. The idea that a person can move and live here for 40 years, or even be born here, and avoid certain taxes is a ridiculous way of exploiting our tax regime, and I welcome the steps to change that. I am also pleased with the introduction of a simplified corporation tax deduction for companies that make contributions to grassroots sports. For recognised sport governing bodies, the deduction will be unlimited. I know of a number of small and medium-sized businesses in the Scottish borders that will be encouraged by the measure to contribute to local sports teams.

As a Member representing a population with an above-average number of pensioners, I am encouraged by the introduction in clause 3 of a new income tax exemption to cover the first £500 of pensions advice provided to an employee. That reflects the fact that pensioners have been given greater freedom by the Conservative Government to spend their pension fund, but that with that extra freedom some might benefit from greater advice. The provision will make seeking that advice more affordable and encourage employers to offer it to their staff.

There is also a range of measures designed to make our tax system fairer for all taxpayers. Clauses 5, 7 and 8 tighten the rules over termination payments, the recycling of pension savings and incomes paid through dividends. Governments need to be responsible to all taxpayers, so it is correct to make changes that might be unpopular with the few for the benefit of the many. The measures to progress the Making Tax Digital initiative in clauses 60 to 62 are common-sense in this day and age. I am generally supportive of the Making Tax Digital programme, as well as the decision by the UK Government to slow down the pace of implementing these changes.

I am pleased that the Bill will put in place exemptions for businesses that cannot meet the requirements due to their geographical location, and I hope that the regulations will be drafted widely on this point. In my own area of the Scottish Borders, too many businesses suffer from unreliable internet connections, and I would not want them to be penalised because of local infrastructure issues. By closing the tax gap further and making taxation fairer, we will boost the nation’s tax revenues—not by hiking up taxes like the Opposition parties want us to, but simply by ensuring that people pay what they ought and are due to pay.

I conclude by welcoming the Bill, and I look forward to supporting further measures to make the economy of Scotland, and of all the United Kingdom, stronger and more prosperous.

It is a great pleasure to follow the two excellent maiden speeches of the hon. Member for Moray (Douglas Ross) and my hon. Friend the Member for Liverpool, Walton (Dan Carden). I will not try to expand on the points made so well by my hon. Friend the Member for Walthamstow (Stella Creasy). She gave us a masterclass in why Labour Members have no cause for shame on our economic record, whereas Government Members have many questions to answer. I look forward to hearing the replies to those questions in the Minister’s response.

As a relatively new Member of the House, I must echo the concern I expressed earlier today about how a Bill is not only of such weight and length, but has been published, together with the explanatory notes, only today. The right hon. Member for Wokingham (John Redwood) said that the Bill had been written at the time of the Budget back in March, but in that case why could it not have been published sooner? Anyone would think that the Government were keen to avoid scrutiny and to prevent Members from being able properly to debate what is in the Bill. That may be why so many speeches have been not about the Bill, but about the economic record of the Labour party.

I echo the points made by Members from both sides of the House who have set out the economic challenges of productivity that are so important to making sure we have an economy that is sustainable for the long term and works in the interests of all our people. The lack of certainty that certainly exists among businesses in my constituency and across the country is leading to a downturn in the level of investment that they are able to make. As my hon. Friend the Member for Walthamstow said, household incomes are dropping, and the higher taxes on lower-income households—VAT has an impact on households with very low incomes—means that they are now paying far more tax than they did in 2010. That has an impact on the incomes that, in lower-income households, are primarily spent in the UK, not overseas. Those are the people who support our economy and our local businesses on a day-to-day basis.

The same is true of public sector workers. We heard earlier about the way in which our public sector workers have been treated, and how the Government feel that they have not managed the economy well enough to be able to give our public sector workers the pay rise they deserve. That is a shame for millions of public sector workers, who work hard—day in, day out—to help all the people of this country.

Does my hon. Friend share my concern that in today’s announcement by the Home Office of a 1% rise for the police with a 1% conciliatory bonus, it recommends that police forces pay for that out of their reserves, which are dwindling in the extreme, and does she agree that that would be fiscal irresponsibility in the extreme?

I absolutely agree. That is not the way to treat the public finances, and it is not the way to treat police forces, which have already had a 20% drop in their budgets since 2010. In my own area of Derbyshire, there are 341 fewer police officers, and the blue line is very thin indeed. The measures announced earlier today will do nothing to incentivise our hard-working police officers.

I was pleased to receive the assurances from the Financial Secretary earlier, with the guarantee that the £30,000 of tax-free money on termination of employment would continue and that there would be no taxation of discrimination compensation payments following a tribunal. However, Ministers need to recognise the ill feeling and hurt feelings that are often caused when an employee is made redundant. Those payments can be genuine and Ministers need to look again at that matter.

We should contrast the treatment of people on low incomes and public sector workers with the treatment of non-domiciles. The Government claim to be acting on non-doms, but the limit is only 15 out of the last 20 years for someone to be deemed a domicile. Even then, as I mentioned earlier, the Government have given them a loophole of two years to transfer their money to an offshore trust. That shows the attitude the Government take towards non-domiciles and tax avoidance by people who can afford to pay it. The Government claim that they will raise £1.6 billion from that measure, but they have no idea how much will be raised because they have created a loophole that I am sure non-doms and their advisers will be all too keen to take advantage of.

The Bill increases the scope of business investment relief

“to make it easier and more attractive to potential investors to bring their money in from overseas.”

That includes investments in commercial property. Although there has been a dip in commercial property prices in the City, that reflects market forces. That dip is important to encourage new firms to come into the City. We do not want those properties to be snapped up for tax relief purposes by non-doms who are simply seeking to make a quick buck. That will push up prices, making it harder and more expensive for companies seeking to trade in the UK to create real jobs and wealth in our country. Again, there is an extension of the time limit for those non-doms to avoid any clawback of their business investment relief when a company comes to the end of its profitability or to the end of an investment.

That is not a plan for investment in viable UK businesses; it is yet another loophole for the super-wealthy. It contrasts with the Government’s response to public sector workers and their entirely legitimate demands. I am afraid that that really shows whose side the Government are on.

I, too, congratulate my hon. Friend the Member for Moray (Douglas Ross) on his fantastic exposition. I know that he is a Member of Parliament, but he is obviously also an unpaid advocate for VisitScotland. I will do my best to visit his beautiful part of the country, having had a fantastic February half-term there just this year.

I also congratulate the hon. Member for Liverpool, Walton (Dan Carden), who is not in his seat, on his maiden speech. He and I were brought up about a mile and a half apart. We obviously had fairly similar experiences of the city we both come from, but we have gone different ways in politics. I am slightly older than him, so I guess that I experienced the Liverpool of the hard left and he experienced the city where the hard left had broadly been expelled and that had started to recover. Having heard his speech, I think perhaps the hard left is back, but I nevertheless welcome him to his place.

Before I start, I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I am a small business founder and owner, and my business will be affected by some of the measures in the Bill. I am happy to say that it will no longer be affected by Making Tax Digital. I offer my thanks again to the Financial Secretary for his reasonable and sane approach to the revision of that policy.

My right hon. Friend will know that I ran a low-level campaign to advise the Government of the error of some of the measures they had put into Making Tax Digital early on. Frankly, I am pleased to see that the parliamentary system worked: the Government proposed something; Members scrutinised it and opined upon it; the Treasury Committee, on which I sat and still sit, issued a report on the policy; and the Government listened to lots of industry groups and amended the policy to one that was roundly and warmly welcomed by industry generally. That is the way things should work and I am very pleased that they have in this particular instance.

I am pleased to hear the Minister announce from the Dispatch Box that the scheme, although delayed, will now be open for voluntary participation. I assume that will also be the case for corporation tax purposes, and not just for VAT. The new measure applies only to VAT, but the Government, I think, are going to consider including corporation tax from 2020. It might be sensible to allow companies to participate on corporation tax earlier than 2020, so that the system could operate like the old self-assessment system did when it came in. That was entirely voluntary for the first few years until 60% compliance was achieved, when it then became compulsory for everybody. Notwithstanding that people always grumble about paying their taxes, the transition was pretty smooth and seamless. It is now an accepted part of the tax landscape, as I hope Making Tax Digital will be in the future.

One area the Government might think more about in the next two or three years as they move towards greater implementation of the scheme, is the notion of quarterly reporting, in particular for corporation tax. As I have said in the past, VAT quarterly reporting is a relatively simple exercise for the vast majority of businesses. They do not need advice on a quarterly basis to compile their VAT returns—it is a simple calculation. Corporation tax, however, is an entirely different exercise of deep complexity and, frankly, fear for a lot of companies. No one communicates with the Inland Revenue on corporation tax unadvised. This is where the problem exists, because the compliance cost of corporation tax, particularly for small businesses, is extremely high. The Federation of Small Businesses estimated that the compliance cost for Making Tax Digital would be about £2,500 to £3,000, even for the very smallest companies. For medium-sized companies, it can run into the tens of thousands of pounds just to make sure they get their corporation tax calculation right, because our system is incredibly complicated—about which, more in a moment. So, Making Tax Digital—fantastic. I will be an enthusiast for it on the basis that it is voluntary at the moment.

I am very pleased with the anti-avoidance measures in the Bill. Anti-avoidance is not just good for the Exchequer; it is good for all the other taxpayers. Recovering more tax from those who avoid and evade it means that the taxes for those who pay their tax on time and to regulation do not have to rise quite as high as they otherwise would—indeed, they could be cut. We ought to bear in mind the Government’s proud record of recovering, I think, £140 billion under anti-avoidance and anti-evasion measures. That says something about how the tax system was run before they came into office. That this amount of excess was squeezed out of the lemon says something about the way previous Chancellors ran the system, and perhaps about how they would in the future.

I join my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) in welcoming the end of the permanent non-dom status. It seems insane to me that people who have lived in this country for decades could have a more beneficial tax arrangement than those who were born here and have lived here for exactly the same amount of time. The Government are doing the right thing in plucking the goose of non-doms enough to recover the money that they should be paying, but not so much that they migrate elsewhere.

I want to raise with the Government two areas on which I recognise that something needs to be done, but where there are wider implications for the economy. The first is the change to the nil rate band for dividend taxation. I declare an interest as a business owner who is, from time to time, in receipt of dividends. Like many small business owner-managers, I will be affected by the change. I recognise that I have to shoulder my share of the burden of dealing with our national finances. We are still running a deficit. We have massive and increasing national debts that need to be addressed at some stage and it falls to my generation of business people to help to do that. However, we have to take care in this party about what signals our taxation policy sends to people about how they should behave, what we value in society and the nature of capital.

We are incredibly good in this country at inventing things. We have the largest agglomeration of scientific research on the planet and more Nobel prizes in one Cambridge college than in Germany and France combined. In fact, Trinity College, Cambridge has more Nobel prizes than Japan, the third-biggest economy in the world. We are incredibly inventive but not very good at turning those inventions into companies. We used to put capital and idea together, under the great Queen Victoria, when we built our wealth on ingenuity and buccaneering capital, but since then we have not done it quite so well or with such frequency.

Of the top 500 companies in the world, only two were created in Europe in the last 40 years, while dozens have been created in other parts of the world in that time. Those two are both British—Vodafone and Virgin—but there should be a lot more. There are lots of 18th, 19th and early 20th-century companies in the top 500 from this part of the world but no recent ones, and that says something about the dynamism of capital in this country.

As we look towards the future economy, we know that our success is not guaranteed. It is likely that we could be squeezed between the United States, with its incredible appetite for ideas and its romping capital constantly looking to invest in those ideas, and China, with its incredible ability to spend enormous amounts of public money and its disrespect for intellectual property derived elsewhere in the world. If we cannot close this gap between idea and capital, we could find ourselves squeezed.

There should be a relationship between risk and reward, should there not? It is a delicate balance. What is my hon. Friend’s view on whether the balance is right in the measures before us?

I was about to come to that. The rise in taxation on dividend says something about how we treat the proceeds of risk. The argument has always been that dividends should be taxed less than income to recognise that risk. More times than not, if someone invests in a company, they lose their money. In some spheres, such as life sciences—a specialist area of mine—nine times out of 10 they lose their money. If someone invests in a drug discovery company, it is quasi-charitable giving—nine times out of time, they are giving to the economy for the good of their health, hopefully. The notion that dividends should be taxed just like every other income starts to erode the idea that as a Government and a society we want to reward risk taking.

In future Budgets, I hope that Chancellors will find a way to re-instil the sense in ordinary working people that they should think about starting and building their own business. Sadly, over the last couple of years, the number of people contemplating starting their own business has dropped. A couple of years ago, it was about 39% to 40%; according to the latest survey, it is now only about 14%, and the single largest barrier that puts them off is access to capital—the ability to get the money to start a business.

What is my hon. Friend’s view of the fact that many economists, notably the American economist Tyler Cowen, have recently discussed how innovation has been slowing down not just in Britain but in America and across the developed world? Not disregarding his point about taxation, I think that points to something more fundamental about western economies and how the economic system is working.

That is a very good and broad point, and I could talk for a long time about it—[Hon. Members: “Go on.”] I wish. It is definitely my perception, and the evidence certainly shows, however, that the operation of capital is becoming more and more sluggish across the western world.

As I said earlier when I mentioned those top 500 companies, capital is incredibly sluggish, particularly in the EU. In this country it has long been said that that is partly the fault of the housing market, in which so much private capital is tied up because we like to own our homes. In other countries, such as Germany, where that is not the case, capital may be more dynamic, and there may be more capital for investment. Whatever the problem—and we think there is a problem—Governments have a role in unlocking and lubricating the capital that is out there.

I think that both the enterprise investment scheme and the small enterprise investment scheme are good and worthy. Over the last couple of years, however, I have been pressing for them to be deregulated so that it becomes easier for people to invest, and they will not need an accountant, a lawyer and pre-approval from the Revenue to achieve—in the case of the EIS—modest tax reliefs and benefits in the future. We need a scheme that recognises the quasi-charitable nature of giving. I would like to see a system in which people who invested in a business would receive 100% tax relief up front, and then, if they ended up owing capital gains tax, would pay the tax. That would be a nice problem to have. When I have started my businesses, the last thing on my mind has been whether there is any capital gains tax to pay. What has been mostly on my mind has been raising the money, getting going, paying the staff, finding an office, and all the rest of it. I think that such a system would be simple, easy and understandable, and would encourage a great deal more investment in the drugs, therapies and technologies that we need for the future.

The Government have a patient capital review on the cards. It kicked off about a year ago under the chairmanship of Damon Buffini, who, as Members will know, is one of those much benighted private equity guys, and I shall be pressing the Government, hopefully, for its conclusion quite soon.

The second thing that we must bear in mind about the signal that we send with the change in dividend taxation concerns young people. We have talked a good deal about home ownership for young people, but their ability to access assets in general is something that should trouble us all. Those assets include shares. It might be a good idea to give young people an incentive by suggesting that it would be beneficial for them to build up small share portfolios. The Government will say, quite rightly, that they can start individual savings accounts, and of course they can. Dividends are tax-free in an ISA, and given that the ISA allowance rose to £20,000 a year in April, it is possible to accumulate huge amounts of money. The problem with ISAs, however, is that most people hold significant amounts of cash in them. There is no limit to what can be held in a cash ISA, and far too much money in ISAs is held in cash rather than being invested in the productive economy. People should be sent signals that they should be investing in companies.

Is not the problem that young people do not have enough money to save, rather than not enough different methods of saving? There is a lack of money in the system. Wages are not rising and inflation is increasing, and young people cannot afford to save because they are spending too much on rent and they are in precarious jobs.

As I have said, part of the problem is related to housing. However, the Government have made huge strides in trying to increase the take-home pay of the lowest paid. There is the rise in the personal allowance, which will increase even further. There is the national living wage, which has raised wage rates altogether. There is the apprenticeship scheme, which is giving young people a route to higher-paid jobs by giving them more and more skills. There are plenty of things that can be done.

There will be no overnight solution, but once the Government manage to move young people up the income scale, and as they get older and more money accretes to them, we should encourage them to think about saving—not just about home ownership but about saving for their futures. We are doing that in the case of pensions: through auto-enrolment, we are making employers responsible for instilling in young people the idea that they should be joining pension schemes. I am trying to think in decadal terms about the signals that we send about the operation and dynamism of capital in this country. Unless we start planting some acorns now, we will not have oaks to sell in 20 or 30 years’ time, as we have been able to do in the case of all the companies that have been founded in the last couple of hundred years.

The second issue that the Bill raises in my mind is the nature of the tax system in general. This Finance Bill is incredibly thick for what is actually a relatively short Bill, because the complexity of it is incredible. In some of its measures, the Government are rightly closing loopholes, such as through the disguised remuneration rules, and when we look at them we suddenly realise that our tax system has become a game of 3D chess, whereby the Government are engaged with business and individuals in a constant cat and mouse game around what has become a Byzantine system that is choking economic growth and development and distracting entrepreneurs and others far too much from their day-to-day work of creating wealth and jobs. Most small businesspeople I know spend far too much time on compliance costs, with taxation regulations, and this Bill illustrates that in no uncertain terms.

The Bill also illustrates that it is going to become ever harder for the Government to tax the new economy. We have heard talk today of the fourth industrial revolution, and even in my working lifetime of 20-odd years the nature of work has changed almost completely, as has the way we work. My business is almost entirely cashless. There are vast corporations that operate without cash, and that trade in one jurisdiction, fulfil in another jurisdiction, bank the money in a third, and pay tax in a fourth. Chasing this money around, combined with this incredibly complicated system, is going to become harder and harder. Part of the reason for this Bill, as the Minister said, is to maintain the sustainability of the tax base. The Government are worried that it is getting away from them; it is like a wild horse straining at the leash or reins, and galloping off across the field given half a chance. [Interruption.] Leash or reins; I do not know what we hold a horse with.

All of this means that we are going to have to do some pretty heavy fundamental thinking over the next couple of decades about the way we tax. We often talk about how much we tax, but rarely talk about how we tax. How are we going to tax these enormous corporations that are bigger than nations? How are we going to make it fair between them and small businesses? How are we going to tax a changing economy of individuals, who might have four, five or six different jobs, with somebody in this country perhaps performing a job in another country, but doing it digitally? All of these matters raise questions, and it is perhaps becoming harder to tax in a direct way and easier to tax in an indirect way.

I have talked in this House before about the notion of getting rid of business rates— which are biased against small businesses, and certainly small retail business on the high street, and which favour the massive internet companies—of getting rid of corporation tax, which is hard to collect and for which compliance is not great, and of thinking about moving to an easy, collectible turnover tax. A huge company like Amazon, which is completely electronic and totally cashless, could pay its turnover tax every day: at the end of the day it knows how much money it has made, and the computer can tell how much tax there is and transfer the money across to the Government. That would be an enormous win.

The advent of the cashless society means it is much easier to track people’s turnover, and to take that little clip that the Government want to pay for all the services we need. In time—perhaps not in my political lifetime, but in the future—we might even move to a situation where there are no direct taxes on individuals, and where tax becomes voluntary, with people paying it as part of their spending, in the form of indirect taxes through VAT, duties and so forth. Certainly that is the tax that those at the lower end pay; the only tax those who earn less than £11,000 will pay is indirect, such as VAT, which they pay voluntarily when they spend. These are the broad themes we are going to have to think about over the next couple of decades if we are going to be able to raise the money to pay for the services the country rightly needs.

While welcoming the Bill, therefore, I would like the Minister, certainly as the Budget approaches, to think in decadal terms about the foundations we need to create now for a sustainable tax base and a vibrant economy for the future.

I hope that the hon. Gentleman feels that in the course of his comparatively brief contribution he was at least able to clear his throat.

I rise to welcome the Finance Bill and to recognise the success of this Government’s financial policy, and I am delighted to follow the eloquent speech of my hon. Friend the Member for North West Hampshire (Kit Malthouse). Opposition Members often endeavour to play down the United Kingdom’s economic success—three million jobs have been created nationally since 2010—but my constituency has blazed a trail in the north-east of Scotland. In Gordon, which is to the north-west of Aberdeen, unemployment is at 1.6%, which is up from 0.8%, but the past few years have been painful for the big north-east employers: the oil and gas industry and the service companies that support it. Many jobs have been lost in the sector, and particularly hard hit have been the people who live elsewhere in the UK, but the green shoots of recovery are beginning to show. I am sure the Minister will join me in welcoming Oil & Gas UK’s economic report, which shows that confidence and investment are returning.

I have visited the European offshore oil and gas exhibition, which is on the boundary of the Gordon constituency. The hon. Member for Aberdeen North (Kirsty Blackman) had to point out to me that it was being held just inside her constituency, but she is welcome to visit the new £400 million Aberdeen exhibition centre, which has been built in my constituency. The exhibition displays a showcase of many Aberdeenshire and Aberdeen-based companies, and the technology is breathtaking. The sector has made it a priority to be outward-looking, exporting equipment and skills to wherever there is oil and gas and, increasingly, renewables. It is imperative that oil and gas are at the heart of the Government’s industrial strategy and at the top of their fiscal priorities.

A key part of our recovery is attracting investment to the UK continental shelf, and Oil & Gas UK recognises that the UK’s fiscal policy puts it in the top quartile of places to do business. Coupled with competitive corporation tax and attractive levels of personal income tax, companies and skilled professionals are choosing to operate in the UK. I thank my right hon. Friends the Members for Forest of Dean (Mr Harper) and for Wokingham (John Redwood) for highlighting the oil and gas industry in their speeches. The Government’s fiscal policy is key to the continued prosperity of many areas in the UK that depend on oil and gas. Without a raft of attractive tax policies, we would risk a brain drain, and the oil industry moves rapidly, so the availability of facilities and skilled employees is essential. It is therefore disappointing that the Scottish Government’s empty property rates policy has led to the tearing down of properties in my constituency.

I do not know whether the hon. Gentleman has seen the Finance Secretary’s announcement today about the Barclay review, but it would be a good idea for him to have a look at it, particularly the part about property rates for new empty properties.

I welcome that intervention. Considering how long I have been sitting here, I will have to read it after I have left the Chamber.

The UK oil and gas industry employs 300,000 people—largely well-paid workers who contribute to the Exchequer. It underpins a highly skilled workforce and invests vast amounts in training and R and D, such as at the centres that the hon. Lady and I have visited. I ask the Minister to look closely at the tax history of oil assets, their transferability, how that will affect decommissioning and how best to promote the UK to be decommissioning experts for offshore oil and gas.

SMEs are the bedrock of the UK economy, and, like my hon. Friend the Member for North West Hampshire (Kit Malthouse), I am a businessman and must declare an interest here. At £200,000 a year, the value of the annual investment allowance is significant for small to medium companies. Instead of the spending that the Opposition would have us do, the allowance encourages investment, leading to more jobs, and it is important that the Treasury concentrates on investment in our economy. I ask the Minister to consider widening the AIA to include facilities, potentially creating local construction jobs.

Finally, whisky is a mainstay of the Scottish economy and probably the most popular export—very popular in the bars of this House. My constituency is home to several distilleries and, along with the rest of the north-east of Scotland, produces malting barley, but the constituency of my hon. Friend the Member for Moray (Douglas Ross) clearly takes the title of having the most distilleries. Perhaps the Minister will look fondly on the whisky and spirits industry when sampling Scotland’s greatest export, so I have a suggestion: if I invite the Treasury team to partake of the distilleries in my constituency and in those of my hon. Friends the Members for Moray and for Banff and Buchan (David Duguid), perhaps the Finance Bill will not be so painfully long.

I was fascinated by the discussion of student loans in the opening speeches, and it is pertinent that I return to that discussion in my opening remarks. Notwithstanding the Labour party’s desire to cover and obfuscate this matter in a haze of chaos and confusion, not to mention the odd car-crash interview by the shadow Secretary of State for Education, the hon. Member for Ashton-under-Lyne (Angela Rayner), from time to time—she is no longer in the Chamber, but she enjoys giving car-crash interviews, as does the shadow Secretary of State for Justice, the hon. Member for Leeds East (Richard Burgon)—the Labour party made a very clear pledge to write off £100 billion, and that sum is entirely unfunded.