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Finance (No. 2) Bill - Second Reading
13 April 2021
Lead MP
Jesse Norman
Debate Type
Bill Debate
Tags
EconomyTaxationBusiness & Trade
Other Contributors: 43
At a Glance
Jesse Norman raised concerns about finance (no. 2) bill - second reading in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The Finance (No. 2) Bill aims to enact changes to taxation that support the Government's objectives of protecting jobs and livelihoods, fixing public finances, and laying the groundwork for a robust future economy. The bill includes measures such as extending reduced VAT rates for hospitality businesses, providing tax relief for stamp duty land tax, supporting struggling businesses through trading loss carry-back rules, and increasing corporation tax to 25% from 2023 while protecting small businesses with profits under £50,000. It also introduces a super deduction measure to spur business investment and enables the designation of tax sites for freeports.
Sammy Wilson
DUP
East Antrim
Asked about the allocation of freeport sites in Northern Ireland, questioning whether all measures included in freeport status will be exempt from state aid rules given that Northern Ireland is still associated with EU single market rules.
James Murray
Lab Co-op
Ealing North
Mr James Murray highlighted several issues with the Finance Bill, including the failure to guarantee pay rises for NHS workers, undermining economic recovery through tax policies, and lack of measures addressing family finances affected by council tax increases. He criticised the bill's missed opportunities in levelling the playing field between high street businesses and online firms.
Kevin Hollinrake
Con
Thirsk and Malton
Mr Kevin Hollinrake responded to an intervention by Mr Murray, agreeing that a level playing field between high street businesses and online firms is needed but finding it tricky to implement. He did not provide specific solutions or support for the Finance Bill.
Mel Stride
Con
Central Devon
Mr. Stride supports the Second Reading of the Bill, highlighting the significant challenges faced due to the economic crisis and appreciating the work done by the Treasury and HMRC over the past year. He emphasises the importance of restoring public finances through bold initiatives and points out the improved outlook as indicated by forecasters like OBR and IMF. Stride also discusses specific measures in the Bill, including income tax thresholds, corporation tax, small business rate relief, super deduction for investment, and free ports, arguing that these are necessary steps to support economic recovery and maintain competitiveness.
Alison Thewliss
SNP
Glasgow Central
Thewliss raises concerns about limited powers of the Scottish Parliament, dismissiveness towards expert suggestions and improvements from Members. She highlights impacts on public services due to austerity measures and calls for a review of the VAT rates for hospitality businesses. Additionally, she expresses reservations over freeports' effectiveness and potential tax dodging opportunities.
George Freeman
Con
Mid Norfolk
The hon. Member praised the Treasury for its swift and compassionate response to the economic crisis caused by the pandemic, highlighting measures such as furlough support and financial relief. He also commended the Chancellor for moving quickly during both the 2008 crash and the current crisis, despite criticising previous Labour policies that he believed left the country vulnerable. The hon. Member emphasised the importance of supporting self-employed individuals and apprenticeships to aid recovery. He noted the £700 million package for arts, culture, and sport and highlighted initiatives like town deals and freeports as part of a broader strategy for economic growth. He also discussed opportunities in sectors such as bioscience, nutraceuticals, and biosecurity, emphasising the need for regulatory reform to encourage innovation and investment.
Wes Streeting
Lab
Ilford North
[INTERVENTION] The hon. Member questioned whether current deficit and debt levels should be blamed on Conservative profligacy, suggesting instead that both Labour and Conservative governments had taken necessary measures to prevent worse economic outcomes during crises.
Jesse Norman
Con
Hereford and South Herefordshire
[INTERVENTION] The hon. Member reminded his colleague of historical data indicating that under Labour governments, leverage ratios in the British banking system had increased dramatically compared to previous periods.
Kevin Hollinrake
Con
Thirsk and Malton
[INTERVENTION] The hon. Member suggested that regional mutual banks could be part of a solution for fostering growth in regional economies, focusing on lending to SMEs.
Hayes and Harlington
Critiques the Government's Finance Bill for failing to address pre-pandemic social issues like child poverty, rough sleeping, food bank usage, zero-hours contracts, NHS funding cuts, and social care budget reductions. Also argues that the Bill does not discourage employers from using fire-and-rehire tactics, fails to equalise capital gains tax with income tax, and contains no action on climate change.
Sammy Wilson
DUP
East Antrim
Mr. Wilson interjects to support Mr. Afolami's argument regarding the super deduction, clarifying that it applies to new capital equipment rather than second-hand equipment. He emphasises the potential for job creation and income generation in UK manufacturing firms due to this scheme.
Kevin Hollinrake
Con
Thirsk and Malton
Mr. Hollinrake adds that money spent because of the super deduction will also benefit SMEs in the supply chain, further highlighting the positive impact on small businesses.
Peter Dowd
Lab
Bootle
Mr Dowd supports an amendment to emphasise spending on palliative care. He argues that the Finance Bill does not adequately address economic and social challenges, particularly those related to job insecurity, low pay, inequality in education, health, and social care. He highlights the importance of supporting families affected by these issues and criticises the government for continuing with a no amendment of law provision which he believes is undermining parliamentary powers.
Mr Aldous supports initiatives in the Finance Bill such as the extension of furlough, VAT cuts, and the introduction of freeports. He praises measures aimed at economic recovery but expresses concerns about inconsistencies in funding for local areas and gaps in welfare support systems beyond September. He calls on the government to adopt a strategic approach to supporting individuals moving out of poverty.
Stella Creasy
Lab Co-op
Walthamstow
Creasy criticises the Bill for focusing on short-term measures rather than long-term solutions. She points out that millions are struggling with debt, particularly due to tax credit overpayments and utility bill arrears. The MP also questions the effectiveness of freeports in generating jobs and economic growth, arguing they do not address regional productivity issues. She urges for investment in manufacturing, research and development, and renewable energy to futureproof the economy.
Julie Marson
Con
Hertford and Stortford
Marson supports the Bill, highlighting its role in supporting businesses and consumers through measures such as VAT cut extension, business rate holiday, and restart grants. She also commends long-term economic growth policies like super deduction, freeports, UK Infrastructure Bank, Help to Grow, Future Fund breakthrough, and refinements of the tax system.
Sammy Wilson
DUP
East Antrim
Welcomes clause 97 for exempting engineering firms from steel tariffs but criticises other issues not addressed in the Finance Bill such as customs regime costs. Expresses concern about income tax allowances freeze and VAT rate changes impacting economic recovery. Questions increased corporation tax and air passenger duty, suggesting negative impacts on businesses and regions like Northern Ireland.
John Redwood
Con
Wokingham
Mr. Redwood advocates for continued generous government support during health restrictions and emphasises that the current level of deficit is manageable despite being high, given low interest rates and global examples such as the US stimulus measures. He encourages a business-friendly tax climate to stimulate investment and economic recovery, drawing attention to the success of Ireland's low corporation tax rate in attracting inward investment. Mr. Redwood also urges for the Government to promote small businesses and self-employed individuals by ensuring that it is affordable and administrative burden is not too great.
Kevin Hollinrake
Con
Thirsk and Malton
He emphasised the need to avoid repeating mistakes made during the last recession, particularly concerning SMEs. He supported measures like diverted profits tax and digital services tax while pointing out that Amazon's direct sales are not covered by these taxes. Hollinrake urged for VAT as a replacement for business rates, advocated for a German-style social care premium, and highlighted successful loan schemes introduced during the pandemic but expressed concern over future lending when government support ends. He also called for decentralising the banking system and fair treatment of SMEs in forbearance processes.
Davies criticised the botched Brexit deal and its impact on food imports, labour market quality, and productivity. He mentioned that Britain could face food shortages and inflation due to non-tariff barriers introduced post-Brexit. Davies noted that 1 million EU citizens left the UK for Europe last year, affecting workforce size and productivity. He also highlighted issues with younger people's long-term health impacts from covid, causing reduced productivity, and expressed concern about hunger among millions of Britons, particularly children.
Rosie Winterton
Lab
Swansea West
Called for the focus to remain on addressing issues within the Finance Bill.
Stephen Hammond
Con
Wimbledon
Supported the extension of universal credit uplift and restart grants. Raised concerns about the English language teaching sector's lack of support and the loan charge issue for small businesses involved in tax avoidance schemes.
Sarah Olney
Lib Dem
Richmond Park
The Liberal Democrats are critical of the Government’s approach to public procurement, highlighting preferential treatment for friends and personal connections. The speaker argues that the Chancellor's Budget benefits selected groups but fails to address national economic needs comprehensively. She advocates for business rates reform to level the playing field between high street and digital retail. Concerns about long-term plans for small businesses are raised, with worries over unemployment spikes once furlough ends. Olney also criticises the lack of support for hard-hit sectors like culture and travel, and emphasises missed opportunities in fighting climate change despite warm words from the Government. She calls for a bold green recovery plan to invest £150 billion over three years in tackling climate change and creating new green jobs.
Steve Double
Con
St Austell and Newquay
Steve Double expresses concerns over the removal of red diesel entitlement for mining and quarrying businesses, which will cost them more than £10 million annually. He argues that this sector does not have alternative technologies to replace diesel-powered equipment at present, making it difficult for businesses to absorb these costs without job losses or increased expenses.
Richard Burgon
Lab
Leeds East
Richard Burgon criticises the Government's handling of the coronavirus crisis and its economic impact, mentioning how some private companies have profited from contracts during the pandemic.
Eleanor Laing interjects to remind MPs that the debate is about the Finance Bill and its clauses only, urging Richard Burgon to stay on topic.
Andrew Griffith
Con
Arundel and South Downs
Griffith supports the Finance Bill, praising it as an excellent bill for economic recovery. He emphasises the importance of fiscal discipline to foster a pro-enterprise environment. He highlights the super deduction as a centrepiece of the bill, mobilising significant investment from businesses in his constituency. Griffith also welcomes initiatives under the Help to Grow banner and suggests additional support for exporting small businesses. He supports the extension of the lower rate of stamp duty and recommends an exemption for downsizers to address housing issues. Griffith expresses regret over the freeze on the lifetime allowance on pensions but welcomes measures towards a low carbon future, such as the plastic packaging tax and removal of red diesel from many sectors.
Peter Grant
SNP
Dundridge
The SNP opposes clause 5 as it freezes the personal allowance and basic rate limit, targeting lower-income individuals rather than spreading tax impact equally. The speaker raises concerns about potential errors in the working tax credit eligibility criteria and questions the effectiveness of freeports policy to create new investment and jobs.
Eleanor Laing
Con
Epping Forest
Suggests that speeches should be concise and not unnecessarily prolong the debate, implying support for the Finance Bill. She criticises long virtual speeches for keeping the House sitting late.
Jo Gideon
Con
Stoke-on-Trent North
Supports the Finance Bill, highlighting its provisions to extend furlough, reduce VAT for tourism and support grants for the self-employed. Acknowledges the Office for Budget Responsibility's prediction that GDP will reach pre-COVID levels within a year. Emphasises the need for investment in plant and machinery as part of economic recovery efforts.
Rushanara Ali
Lab
Bethnal Green and Stepney
Critiques the Finance Bill, arguing it fails to adequately address unemployment, particularly among young people and minority groups. Expresses concern over council tax hikes and a stealth tax introduced by freezing personal income tax allowances. Points out that only one in 49 young people are eligible for support through the kickstart scheme.
Ben Lake
PC
Ceredigion Preseli
Critiques the Finance Bill, highlighting issues such as ending VAT reduction prematurely and neglecting to correct exclusions in the self-employment income support scheme. Expresses concern over the Government’s centralising tendencies towards devolution.
Jacob Young
Con
Redcar
Teesside’s freeport is pivotal in creating jobs and reversing industrial decline. The site, which has been through a journey of devolution and transformation, aims to create 18,000 jobs over five years. This initiative represents a significant step towards economic recovery and levelling up the region.
Claire Hanna
SDLP
Belfast South and Mid Down
The Bill lacks ambition on climate change action, missing the opportunity to deliver transformative investment needed for a green recovery. It fails to address economic precarity exposed by the pandemic and does not offer hope or opportunities to young people. The Government's recent moves contradict their commitment to net zero.
Richard Holden
Con
Basildon and Billericay
Mr. Holden supports the Finance Bill, highlighting its importance for constituencies such as his in both short-term relief measures like business rate holidays and VAT holidays, and long-term investments like the super deduction aimed at manufacturing centres. He emphasises the importance of productivity gains through technology adaptation and lifelong learning opportunities provided by the Bill. Mr. Holden also commends the Government's levelling-up fund and freeports initiative, particularly mentioning Teesside as an example. Furthermore, he criticises Labour councils for raising council tax while spending on new buildings, illustrating his fiscal responsibility concerns.
Clapham and Brixton Hill
Ms. Bell Ribeiro-Addy argues against the Finance Bill, asserting that it falls short in tackling poverty, low pay, insecure work, and social inequalities exacerbated by austerity policies. She highlights the financial hardship caused to families with children due to cuts in working tax credit and universal credit, and criticises the Government's racial disparity report for downplaying institutional racism. Ms. Ribeiro-Addy calls for meaningful equality impact assessments considering cumulative impacts, intersectional effects, individual and household impacts, lifetime impacts, and unpaid care work. She questions the government’s justification of wealth benefits to big businesses despite unclear evidence on investment creation and criticises the lack of green recovery measures.
Duncan Baker
Con
North Norfolk
Mr. Baker supports the Chancellor's Budget focusing on supporting people and businesses during recovery from the pandemic. He notes that North Norfolk benefits greatly from various government initiatives, including tax measures and a focus on renewal funds. Mr. Baker argues for the appropriateness of increasing corporation tax in a couple of years to ensure fair taxation without austerity, while also questioning why only limited companies benefit from the super deduction.
Mike Amesbury
Lab
Wirral South
Mr. Amesbury opposes the Finance Bill on three grounds: 1) cutting real-term salaries of NHS and key workers, 2) imposing a regressive council tax rise on local authorities, and 3) excluding millions from financial help during the pandemic. He also criticises job losses in his constituency due to an unregulated shadow banking crisis.
Ruth Cadbury
Lab
Brentford and Isleworth
Ms. Cadbury expresses deep concerns about clause 21 of the Finance Bill, which she believes undermines workers' rights by facilitating tax avoidance schemes through umbrella companies. She calls for legislative changes to protect contractors and agencies from exploitation, urging the Government to address ongoing malpractice in the supply chain.
Richard Thomson
SNP
Moray
Richard Thomson spoke against the Finance Bill, arguing that it fails to address key issues such as a green recovery and levelling-up agenda. He highlighted concerns over the removal of the 5% VAT rate for hospitality in Scotland and criticised the lack of significant fiscal commitment in the sector deal for the North Sea. Thomson also noted the poor distribution of funds under the levelling-up fund, which he believes has left areas like Aberdeen underserved.
Jim Shannon
DUP
Strangford
Jim Shannon expressed disappointment with the lack of support for the aviation sector in the Finance Bill. He pointed out that air passenger duty is set to increase at a time when the industry is recovering from significant losses due to the pandemic. Shannon also highlighted the need for substantial grant-based funding, similar to what other European countries are providing, and criticised the removal of VAT-free shopping at airports, which affects up to 40% of their income.
Pat McFadden
Lab
Wolverhampton South East
Mr. McFadden argues that the Finance Bill lacks a plan for recovery and rebuilding the public realm to make it more resilient in the future. He raises concerns about practical effects on taxpayers, highlighting impacts in Hartlepool where 11,732 households on universal credit will lose £20 weekly uplift. He questions the accreditation process of lenders under the new recovery loan scheme.
Kemi Badenoch
Con
North West Essex
The Minister thanked Members for their contributions and addressed key issues raised during the debate, such as the impact of tax measures on businesses and industries. She explained that the Bill supports struggling businesses, maintains personal allowances and thresholds at current levels, and introduces a 25% corporation tax rate from 2023 while protecting small firms earning under £50,000. She also detailed measures like the super deduction for investment, anti-avoidance provisions, and improvements in tax transparency.
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