Finance Bill — House of Commons, 2020-07-02
Topic: Social Welfare
Alison Emily Thewliss (Scottish National Party, Centre-left): The hon. Gentleman seems to think that Scotland just hangs about and waits for a Labour Government, and everything is going to be fine. We would rather have Scotland’s powers in our hands than have one hand tied behind our back in this Union. So we are stuck with the policies that this Government and Parliament propose, which the people of Scotland, in many cases, have not voted for and do not want It is difficult to assess the impact that no recourse to public funds has on poverty in constituencies across the UK. I asked for a breakdown by constituency of the number of people with no recourse to public funds, but the Government said that that information could not be provided to me. So I cannot tell how many people in my constituency have no recourse to public funds and are struggling. It falls to the Scottish Government to try to fix some of these problems, because as soon as anything is proposed to get around no recourse to public funds, the UK Government shut it down and say it cannot happen. The Scottish Government therefore have an anti-destitution strategy for no recourse to public funds, to take a degree of responsibility for the serious situation many people face—these are our people and we want to try to help them. When that strategy comes forward, I call on the UK Government not to stand in the way of trying to support people in society who need help Academic research has shown that the single most effective policy to reduce child poverty in Scotland would be for universal credit payments to be increased, and the Scottish Government are using the powers we have to invest in the new Scottish child payment, which will lift 30,000 children out of poverty. With UC applications more than doubling since this time last year, we badly need sustained investment in the welfare system from the UK Government, and it is disappointing that the Prime Minister has failed to rule out a return to austerity. The UK Government’s welfare cuts are estimated to reduce social security spending in Scotland by up to £3.7 billion in 2020-21. The Scottish Government are spending more than £100 million a year to mitigate the worst of those, including by mitigating against the bedroom tax. However, as Professor Alston, the United Nations special rapporteur on extreme poverty and human rights, wrote in his report on poverty in the UK: "Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue. Scotland and Northern Ireland each report spending some £125 million per year to protect people from the worst impacts of austerity and, unlike the United Kingdom Government, the three devolved administrations all provide welfare funds for emergencies and hardships But mitigation comes at a price, and is not sustainable. The Scottish Government said it had reached the limit of what it can afford to mitigate, because every pound spent on offsetting cuts means reducing vital services." Professor Alston was absolutely right in that assessment We cannot, in any circumstances, return to the austerity of the past. The welfare state and public services have been devasted in the past 10 years, leaving our economy vulnerable. Unfortunately, we still do not know if or when a second wave of covid-19 might happen, so we must use this opportunity to build resilience, if possible. We can allow a more flexible labour market response by increasing the generosity of universal credit, which will give people the financial headroom to gain new skills to meet the changing demands of the economy. The Chancellor said that he would do whatever it takes to protect jobs, after a recent Treasury Committee report revealed that more than 1 million people have fallen through the gaps in support schemes. At this critical stage, it is vital that the Treasury strengthens and extends the schemes to ensure a strong economic recovery from the crisis. It is extremely concerning that the Government are pushing ahead with plans to wind down support schemes, and in particular that new clause 19 will designate grants to help businesses, employers, individuals and members of partnerships affected by the coronavirus crisis as taxable income It is also concerning that HMRC will be given new compliance powers to enforce those rules and that that has not been effectively communicated to businesses. Any new powers granted to HMRC must be proportionate and serve to aid recovery, rather than providing a further barrier for businesses to overcome. Those concerns have been backed by tax experts, such as the Chartered Institute of Taxation, which has said that it is vital that HMRC "take a reasonable approach to enforcement in cases where recipients of CSPs were not entitled to the amount they received…there will be cases where people have made inadvertent errors in claims which may not come to light for some time. There will be cases where the person just did not know of the requirement to notify an overpayment. It is imperative that HMRC obtain a full understanding of the facts in every case and take a proportionate and targeted approach in their compliance activity in the months ahead." It is extremely important that HMRC and the Government get those details right. Many businesses are already on their knees and vulnerable to further shocks. Many businesses in my constituency are struggling to deal with HMRC, with errors in reporting systems meaning that they are not entitled to the payments that other businesses have received. It is difficult to address those problems If businesses are left to fail as support is withdrawn, the billions of pounds that have already been spent by the Government will be money wasted. As I did in Committee, I highlight the concerns raised by the Association of Business Recovery Professionals, R3, about the plans to grant preferential status to HMRC in insolvency procedures from December, covered by our amendments 9 to 15. It and UK Finance are concerned that that will undermine business lending and make it harder to rescue businesses from administration. Many companies across the UK in recent weeks have been struggling and going into administration, so the Treasury should carefully consider whether its plans will help businesses or hasten their demise Countries all over the world are facing the same choices and growing levels of public debt, but if we are to recover fully from the crisis, we need to prioritise growth and wellbeing over deficit reduction. This week, the Scottish Government laid out a plan for a fiscal stimulus package of £80 billion to stimulate growth for the whole of the UK. That would be used to accelerate major investment in low-carbon energy efficiency and digital infrastructure and deliver a green new deal for UK. The value of that investment can be recognised by assessing the Government’s fiscal sustainability in terms of its public sector net worth It is regrettable that the UK will, of course, miss out on the European Commission’s €750 billion stimulus. That makes it even more critical that the UK Government commit to their own stimulus—a proper stimulus, not the pretendy one that was announced by the Prime Minister this week—in the wake of covid-19, such as a reduction in VAT and job guarantees for young people Speaking of even younger people, I make a plug for my small and uncontentious amendment 4, which seeks to clarify that human breast milk is part of the vehicle excise duty exemption for vehicles carrying blood. It would be an important signal of support and recognition from the UK Government to those operating milk banks and to the mums donating their breast milk, which helps some of the most vulnerable babies in intensive care units across the UK. Among them is the extraordinary woman who, last week, donated an astonishing 32 litres to the milk bank that covers all of Scotland The Scottish Government and my colleagues in Westminster have put a considerable amount of work into formulating a meaningful strategy for Scotland’s recovery and future progress in delivering inclusive growth. I sincerely hope that those policies are taken seriously by the Treasury and that we can look back on this time as a pivotal one for making progress towards a fairer and more equitable society.