This week Parliament has returned to session after the summer recess. My SNP colleagues and I have already been incredibly busy upon our return, particularly given the lack of clarity provided by the Tory UK Government over what Brexit will actually entail.
Over the past few days, as a member of the Finance Bill 2016 Committee, I have been in the Chamber debating the final stages of the Bill, the Amendment stage and Third Reading.
It is worth noting that the Bill itself was written based upon economic figures calculated prior to the EU Referendum, and based upon the assumption of a Remain vote by the Tories.
I was pleased to lead the SNP in the afternoon session of yesterday’s debate. As such, I was given the opportunity to highlight a number of issues which we felt would have an adverse effect on Scotland.
Housing Affordability
Last year’s Finance Bill included a new measure targeting large-scale, primarily London-based landlords and rental agencies.
However, given that the measure applies to all landlords across the UK, we have serious concerns that the measure may adversely affect the availability of affordable housing in Scotland. Unlike other parts of the UK, Scotland has a disproportionate number of small-scale landlords who are more willing to rent properties at affordable prices, and to those who depend on social security as a safety net.
The London-centric measure introduced last year by the Tories may force these small-scale Scottish landlords to either raise rent on their affordable properties, or sell to less sympathetic agencies or landlords. This could significantly affect housing affordability in Scotland.
Given these concerns, we introduced New Clause 18, which calls for a review on the impact of the measure on the availability of affordable housing. Unfortunately, the clause was not accepted by the UK Government and was therefore not included in the bill.
VAT on Scottish Police and Fire Service
Since they were formed three years ago, the UK Government has charged the Scottish Police Authority and Scottish Fire and Rescue Services VAT, with the bill for the police force alone totalling £76.5 million over this time period.
It is absolutely disgraceful that this Tory UK Government charges Scottish emergency services VAT, yet it does not charge English, Welsh, and Northern Irish emergency services any VAT at all, forcing the Scottish Government to cover the difference while simultaneously cutting funding to Scotland.
We therefore submitted New Clause 6 to the Finance Bill 2016, which called for a review by the Treasury of the financial impact of this VAT charge on Scottish emergency services. The cause was not accepted by the Government.
Microbusinesses
81 percent of the businesses in Scotland are microbusinesses, a category of small business which employs between one and nine people. They are a vital part of both local economies, and the Scottish economy as a whole.
The bill proposed a new measure, altering the way in which HMRC treats dividend income. While this was intended to target the wealthy few, we have concerns that it may seriously adversely impact these vital microbusinesses, particularly those where the owners are already on modest incomes. The changes could mean that the owners of these businesses may not be able to continue to employ their small workforces, or even cause these businesses to fail completely.
In previous stages of this bill, the Tory Government has argued that the new measure was not expected to have any significant macroeconomic impacts. However, in an evidence session to the House of Lords, an HMRC representative stated that the changes will, in fact, affect many of these microbusinesses.
As such, we introduced New Clause 8, which called for a review into the impact of these changes on microbusinesses, including the failure rate. Unfortunately, the New Clause was voted down by the Tories.
The Bill ultimately passed through the House of Commons with the support of the Tories, and without any of these new clauses accepted by the UK Government or included in the bill. It now goes to the House of Lords before formally receiving Royal Ascent.
You can watch my full speech below:
