Finance Bill Committee of Whole House (Day 1) liveblog

Having passed its second reading the Finance Bill began its committee stage with Committee of the Whole House on Monday 19 and Tuesday 20 November. The clauses selected for debate at Committee of Whole House were grouped so that on the Monday debate focused on tax thresholds and reliefs and on Brexit, and on Tuesday on gaming duty and fixed odds betting terminals, and tax avoidance and evasion.

The full text of all amendments / new clauses can be read on the parliamentary web pages in HTML or PDF. (NB Not all amendments / new clauses tabled are accepted for debate.)

Public Bill Committee, at which a small committee of MPs will scrutinise and approve the remaining clauses of the Bill, will begin on Tuesday next week (Nov 27th) and conclude on Tue 11 Dec at the latest. The Bill is generally expected to get Royal Assent w/c Dec 17th.

You can watch/listen to the debates here.

Liveblog - Finance Bill Committee of Whole House (Day 1)

By Chris Young and George Crozier, CIOT External Relations Team

[NB. These notes are based on a single hearing of the committee's deliberations and we cannot guarantee they are free of errors]

Group One: Thresholds and reliefs 
Debate ran from c4.45pm to c7.45pm

Clauses covered in this group - Clause 5: Basic rate limit and personal allowance; Clause 6: Starting rate limit for savings for tax year 2019-20; Clause 8: Exemption for benefit in form of vehicle-battery charging at workplace; Clause 9: Exemptions relating to emergency vehicles; Clause 10: Exemption for expenses related to travel; Clause 38 and schedule 15: Entrepreneurs’ relief; Clause 39: Gift aid etc: restrictions on associated benefits; Clause 40: Charities: exemption for small trades etc; Clause 41: Relief for first-time buyers in cases of shared ownership; Clause 42: Repayment to first-time buyers in cases of shared ownership - (ALL PASSED)

Amendments and new clauses to be debated in this group:
• Amendment 6 (SNP) - take out provisions removing the legal link between the personal allowance and the national minimum wage - (WITHDRAWN)
• Amendment 18 (Lib Dems) – remove clause 5 (which sets the income tax personal allowance at £12,500 and the basic rate limit at £37,500 (thus making the higher rate threshold £50,000) for the tax years 2019-20 and 2020-21) - (DEFEATED IN A VOTE)
• New clause 1 (Labour) – Chancellor must publish a distributional analysis of (a) the effect of reducing the threshold for the additional rate to £80,000, and (b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000 - (DEFEATED IN A VOTE)
• New clause 2 (Labour) - Chancellor must review and report on the impact of the provisions of section 5 (which raises income tax personal allowance and higher rate threshold) on different groups, including different parts of the UK, and on their impact on child poverty and equality - (DEFEATED IN A VOTE)
• New clause 3 (Labour) - Chancellor must review the effectiveness of the changes made to entrepreneurs’ relief by Schedule 15, against the stated policy aims of that relief - (NOT MOVED)
• New clause 7 (SNP) – Chancellor must review and report on the impact on investment in different parts of the UK of the changes made to entrepreneur’s relief by Schedule 15 - (NOT MOVED)
• New clause 8 (SNP) - would require a geographical impact assessment of income tax exemptions relating to private use of an emergency vehicle - (NOT MOVED)
• New clause 9 (SNP) - would require a report on each of the clauses in this group covering (a) whether a version of the provision was published in draft, (b) if so, whether changes were made as a result of consultation on the draft, and (c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft - (NOT MOVED)
• New clause 18 (backbench, cross-party, led by Debbie Abrahams (Lab)) – Chancellor must review the public health and poverty effects of the provisions of Basic Rate Limit and Personal Allowance changes in section 5 of this Act - (NOT MOVED)
• New clause 19 (SNP) - require a distributional analysis of what the effect would be of increasing the personal allowance to £12,750 - (DEFEATED IN A VOTE)

The debate

Kirsty Blackman (SNP) began proceedings by moving amendment 6 on behalf of the SNP Group and new clauses 7,8,9 and 19. She noted the SNP's support for opposition new clauses 1,2,3 and 18, which she said her party would support if pressed to a vote.

In moving amendment 6, Ms Blackman spoke of the challenges faced by the lowest paid who she said "suffered most" from the government's tax changes. New clause 19 would bring forward a distributional analysis of the impact of raising the personal allowance further to £12,750 and is line with the SNP's official party policy of further increasing the personal allowance. This would enable low paid workers to keep more of what they earn and help to tackle in-work poverty. At the conclusion of the debate, Ms Blackman withdrew this amendment.

New clause 7 would require a review and report on the impact on investment in different parts of the UK of the changes made to entrepreneur’s relief by Schedule 15. She raised the concerns of CIOT and ATT, each of whom had warned of the "unintended consequences" of the change in policy. She also warned of the wider impact on businesses from Brexit, which would add further complexity to their affairs.

In moving new clause 8, Ms Blackman warned of the impact of tax changes on the most remote communities in Scotland. She said that these would be disproportionately impacted and urged the government  to "sense check" the impact of their policies, not just on Scotland but on other remote areas of the UK.

In moving new clause 9, Ms Blackman quoted Glyn Fullelove, chair of the CIOT Technical Committee, who had accused the government of "tinkering" with legislation and failing to ensure adequate scrutiny of tax legislation. Tax changes needed to be consulted on by stakeholders and required a more transparent approach than had so far been the case. She accused the government of not adopting a progressive approach to tax, contrasting this with the example of the SNP-led Scottish Government which had introduced new rates and bands of income tax last year.

Julian Knight (Conservative) said that the measures contained in the Finance Bill had been well-received by the financial community and commentators. He spoke to the government's decision to increase the personal and higher rate thresholds a year earlier than originally intended. His remarks were welcomed by fellow Conservative MPs in ad-hoc interventions. Mr Knight also welcomed the government's moves to increase home ownership through the tax system, and the moves to extend stamp duty relief for shared-ownership properties. He added that the government's measures to boost property ownership had pushed home ownership rates to their highest level in a decade.

In closing remarks, Knight noted that while the tax gap had reduced to become one of the lowest in the developed world, more still needed to be done, including through international cooperation (in a nod to global efforts to tax digital giants). He said that with the top 1 per cent in society currently paying 28 per cent of all tax and the top 10 per cent paying 60 per cent, his government had done more "than anyone in my lifetime" and in a "laser-like" fashion, to reduce the tax gap. He accused opposition MPs of "churlishness" in their efforts to criticise the government's work in this area.

Peter Dowd, Shadow Chief Secretary to the Treasury, moved new clauses 1,2 and 3 on behalf of the opposition, accusing the government of an "authoritarian" approach to its discussion on the bill that had resulted in weakened scrutiny. He said that "no minister had had the decency" to defend its "arrogant" approach to scrutiny of the bill, forcing the opposition to call for reviews and evaluations of government policy in place of more detailed parliamentary scrutiny.

Mr Dowd said the last eight years of Conservative-led government had increased inequality. Those with the "richest and broadest" shoulders needed to contribute more in tax but, in a nod to remarks made by the Shadow Chancellor, John McDonnell, following the Budget, said the party would not oppose moves to allow people to keep more of what they earn. He was supported by colleagues from the Labour benches who spoke of the impact of austerity on their constituencies.

In moving new clause 3, the Shadow Chief Secretary said that entrepreneur's relief (ER) was a "bloated" tax relief that cost £2.7 billion a year and benefited only 50,000 people. He said that 6,000 people had received relief on gains over over £1 million and noted calls by the IFS and the Resolution Foundation that the government should consider ending this relief. He also cited the CIOT's concerns over ER. In particular, he spoke of the CIOT's concerns over the lack of clarity of reforms in this Bill, their retroactive nature and the potential that reforms will impact small businesses disproportionately. The opposition's amendments would enable a full review of ER but Mr Dowd said that if these were rejected, they would be enacted "when, and not if" Labour forms the next government. In opposition, Mr Dowd said Labour would fight the government "every step of the way".

Conservative MP Rachel Maclean accused the Labour Party of adopting an "anti-entrepreneurial" approach with its proposals for ER; Leo Docherty (Conservative) intervened in similar terms.

Richard Graham (Conservative) praised his government's economic approach over the last eight years in office. He said that this stood in contrast to the previous Labour-led government, where income inequalities had risen "on most measures", according to an analysis by the IFS. He said that tax policy meant that those on lower and middle incomes have more money in their pockets than they did under the last Labour government. He also said that disparities in income inequality had fallen close to their lowest point at any time since 1986. In remarks on business taxation, he said the "uncomfortable truth" for opposition members was that Conservative reductions to corporation tax had increased the tax take and enabled investment in public services like the NHS. The annual investment allowance, he said, was important in encouraging investment in expensive technologies, growing business and employment opportunities.

Sir Vince Cable (Lib Dem), supporting new clause 18, was critical of the government for badging its income tax measures as help for the lowest paid. He said that while the lowest paid would benefit by £130 per year, those benefiting from the higher rate threshold increase would benefit much more, to the tune of £860. He said the measures were badged in this way to allow political cover for the claim that austerity was coming to an end, not only through ending spending cuts but also through reducing taxes. In respect of the latter, he said this was "dishonest" as other taxes, such as Council Tax, were rising and reducing the benefits that taxpayers would see from any reductions in income tax.

Leo Docherty (Conservative) and fellow Conservative backbenchers spoke to the impact of the Conservative Party's tax policies since 2010 in broad terms during the course of their interventions. Namely, that the lowest paid had been lifted out of income tax altogether, and that HMRC was no longer having to "chase" those on the lowest incomes for tax underpayments (Grant Shapps, Conservative). Lindsay Hoyle (in the chair), warned MPs against straying from the substance of the clauses and amendments under consideration, the debate having ventured into wider political disagreements between the two main parties.

Mr Docherty welcomed the impact of reliefs such as ER in driving innovation and creativity and supporting business investment both in his constituency and across the United Kingdom. However Ruth George (Labour) was less than complementary of ER, contrasting the limited scope of the relief against wider government measures that would impact some small business owners, such as those who lose out via the minimum income floor for Universal Credit.

Labour MP Debbie Abrahams and SNP MP Alison Thewliss spoke of the impacts of the Budget (and tax measures specifically) on rising inequality and poverty among those on low incomes. New clause 18, put forward by Ms Abrahams and others, would require an impact assessment of the poverty and health impacts of changes to the personal allowance and basic rate limit. 

Jack Brereton (Conservative) described the Finance Bill as the "best finance bill seen in some years" and one that would allow people to keep more of what they earn. He said he was a "strong supporter" of moves to increase the personal allowance and higher rate thresholds. Mr Brereton gave a resounding endorsement of his party's tax measures, which won the support of a number of his backbench colleagues. He was challenged by Peter Dowd to support the opposition's amendment to introduce an impact assessment of the government's income tax measures on poverty but he rejected this, saying that the government had reduced income inequality and lowered poverty. He said that he was "shocked" at the "anti-enterprise" measures proposed by the opposition in respect of entrepreneur's relief and voiced concerns at any efforts to restrict this, saying they would damage the "jobs miracle" presided over by his party.

Thelma Walker (Labour) said that society had never been more divided than it has now and that the Finance Bill did little, if anything at all, to address this.

Alex Burghat (Conservative) said that the Bill put more money into the pockets of Britons and encouraged economic growth. He said the only way to increase public spending was to grow the economy, not by increasing taxes. He backed the government's proposals to increase the higher rate threshold and personal allowance to foster a "virtuous cycle" of growth and investment. Further reforms to stamp duty, he added, would build a "home owning democracy" while he said that reforms to Universal Credit would put more money into the pockets of the most vulnerable.

John Howell (Conservative) and Neil O'Brien (Conservative) both sought to voice their support for changes to stamp duty, with Mr O'Brien offering a reminder of the government's efforts to remove the slab system in stamp duty. Mr Burghat also welcomed the government's extension to ER, saying it was essential to help entrepreneurs start businesses, hire employees and create an "economic dynamism". He said that improvements to the business rates system were particularly beneficial to his Brentwood and Ongar constituency, which he described as a "hive of Thatcherite prosperity".

Ruth George (Labour) cited research from the IFS showing that government tax reforms had hit the poorest the most, resulting in a loss of 10 per cent of their income over the course of the last eight years. She said that the impact of the measures contained in the Finance Bill would reduce this loss by just 0.2 per cent, to 9.8 per cent, while other measures, such as the doubling of insurance premium tax, would have a disproportionate impact on the poorest in society.

The only people to benefit from the Conservatives' measures, Ms George said, were the richest third in society. She said that this was unacceptable and that many of the impacts on the poorest had been keenly observed by the UN special rapporteur who had visited the UK in recent weeks. She was also critical of the government's approach to scrutiny of the Finance Bill, prompting a response from the Financial Secretary to the Treasury, Mel Stride, who defended the government's approach to legislative scrutiny.

Rachel Maclean (Conservative) spoke in support of the Finance Bill and against the amendments offered by the opposition. On increases to the personal allowance and higher rate thresholds, Ms Maclean said the policy was fundamental to her party's philosophy that individuals should have the freedom to spend their money as they see fit. She also said that increases in corporation tax receipts were thanks to the government's policy of reducing rates to encourage business growth. Her claim was challenged by Anneliese Dodds (Labour Treasury Spokesperson), who said that studies had disproved a direct link between the tax reduction and increased receipts.

The Financial Secretary to the Treasury (FST), Mel Stride, moving clauses 5,6,8,9,10,38,39,40,41 and 42, began by returning to an earlier suggestion from the SNP's Kirsty Blackman to reorganise consideration of the bill to better account for the tax and spending decisions of the devolved administrations. He described the present process as simple and straightforward and said that the majority of changes applied across the UK. Speaking to entrepreneur's relief , Mr Stride said the measures would help encourage innovation and investment and accused the Labour Party of being "completely hostile" to its very concept.

The FST said that the government's measures since 2010 had increased the amount of tax paid by the very richest while at the same time reducing the burden of tax on the very lowest earners (a combination of tax, national minimum wage and other policies). He rejected the UN rapporteur's assessment of the impact of government policies on the poorest and challenged Labour to state what its policy would be with changes to the personal allowance.

Mr Stride praised the government's measures, saying that his party was committed to cutting taxes, making it easier to buy a home, simplify the tax system for businesses and charities and helping hard working people to keep more of their money. Clause 5 would ensure that by 2020/21, 2.3 million people will be paying less in tax than in 2015. By removing the link between the personal allowance and national minimum wage levels, as the SNP's amendment proposes, the FST said that this would have the effect of lowering the value of the personal allowance. He said he was unsurprised at the SNP for supporting such a measure, as they were in favour of increasing tax and had done so when exercising their newly devolved tax powers.

The FST said it was unnecessary to produce further distributional analyses, saying that he was already part of an open and transparent government. He then sought to contrast the government's policies with those of the opposition, which would increase taxes and hamper economic growth. Raising the personal allowance by a further £250 would cost £1.5 billion and was an unnecessary step to take. He also noted the impact of the first-time buyer stamp duty relief last year and said that clause 41 would extend this further.

In conclusion, the FST said the clauses would deliver on the government's stated objective of cutting taxes and laid bare the "true blue water" between his party and the opposition, which would damage the economy.

Votes

At the instigation of the Lib Dems MPs voted on whether clause 5 should remain part of the Bill. This is the clause that sets the income tax personal allowance at £12,500 and the basic rate limit at £37,500 (thus making the higher rate threshold £50,000) for the tax years 2019-20 and 2020-21. By 292 votes to 10 MPs voted to retain clause 5 in the Bill.

The chair then moved that the remaining clauses and schedules in this group remain part of the Bill. MPs did not object.

New clause 1 was moved by Peter Dowd (Labour). This proposes that the Chancellor must publish a distributional analysis of (a) the effect of reducing the threshold for the additional rate to £80,000, and (b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000. The new clause was defeated (ayes 262, noes 293).

New clause 2 was moved by Peter Dowd (Labour). This proposes that the Chancellor must review and report on the impact of the provisions of section 5 (which raises income tax personal allowance and higher rate threshold) on different groups, including different parts of the UK, and on their impact on child poverty and equality. The new clause was defeated by just five votes - ayes 287, noes 292. It became apparent that the DUP MPs voted with the opposition on this amendment, in apparent breach of the 'confidence and supply' arrangement with the government.

New clause 19 was moved by Kirsty Blackman (SNP). This would require a distributional analysis of what the effect would be of increasing the personal allowance to £12,750. This was defeated 34 - 290.

That concluded voting on the first group of clauses / amendments / new clauses.

Group Two: Brexit-related

Debate started 8.40pm and can last to 10.45pm

Clauses covered in this group - Clauses 68-78: Carbon emissions tax (enabling provision for if we leave the EU Emissions Trading Scheme); Clause 89: Minor amendments in consequence of EU withdrawal (creates a power for the government to make minor amendments, for example to EU references, within tax law by regulation, where these relate to Brexit); Clause 90: Emissions reduction trading scheme: preparatory expenditure (again an enabling provision for if we leave the EU Emissions Trading Scheme) - (ALL PASSED)

Amendments and new clauses debated with this group:
• Amendment 10 and new clause 10 (SNP) - require a review within 6 months of the expenditure implications of introducing a carbon emissions tax - (NOT MOVED)
• Amendment 14 (backbench, cross-party, led by Chuka Umunna (Lab), with other signatories including Anna Soubry (Con), Vince Cable (Lib Dem) and Stephen Gethins (SNP)) - requires the first use of the powers in clause 89 intended to modify tax legislation in the event of a no deal Brexit to be accompanied by a statement of the circumstances and a comparative analysis of their impact, accompanied by an OBR assessment - (NOT MOVED)
• Amendment 15 (Lab) - no regulations can be made under clause 89 until Chancellor has laid a statement before the House of Commons setting out the powers in relevant tax legislation that the Treasury has acquired in connection with Brexit, and the powers it expects to acquire in certain exit scenarios - (NOT MOVED)
• Amendment 22 (Lab) – before powers can be exercised under clause 89 there must be a review of (among other things) the fiscal and economic effects of the exercise of those powers and of the outcome of Brexit negotiations giving rise to their exercise - (DEFEATED IN A VOTE)
• Amendment 7 (SNP) - would make statutory instruments enabled by clause 89 subject to affirmative procedure - (DEFEATED IN A VOTE)
• Amendment 20 (Lab) - no regulations may be made under clause 89 unless the UK has left the EU without a negotiated withdrawal agreement - (NOT MOVED)
• Amendment 2 (Lab) – clause 89 sunset clause – it would cease to have effect after two years (renewable for an additional period of up to three years) - (NOT MOVED)
• Amendments 8 and 9 (SNP) – require a statement on circumstances (in relation to negotiations) giving rise to the need for, as well as an estimate of the cost of, preparatory expenditure to introduce a charging scheme for greenhouse gas allowances - (NOT MOVED)
• New clause 11 (SNP) – would require a report on each of the clauses in this group covering (a) whether a version of the provision was published in draft, (b) if so, whether changes were made as a result of consultation on the draft, and (c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft - (NOT MOVED)
• New clause 17 (Lab) – require a review of the carbon emissions tax within a year of the provisions taking effect, to determine the effect of the tax on the UK’s carbon price, and the effect of the tax on the UK’s ability to comply with its fourth and fifth carbon budgets - (NOT MOVED)

The debate

The Exchequer Secretary, Robert Jenrick, introduced these clauses, explaining they were designed to prepare for Brexit. The clauses introducing a carbon emissions tax would only take effect if the UK leaves the EU without a deal, he said. The tax would cover the same electricity generators and industrial businesses as those participating in the EU emissions trading scheme. It would initially try to replicate the EU ETS as closely as possible. The minister said that amendments 8 and 9 were unnecessary. In the case of all these amendments the Finance Bill is not the place for detailed examination of expenditure - that is for the Estimates Process. The Finance Bill is about taxes, he argued.

Clause 89 is designed to ensure the tax system works effectively in the event of the UK leaving the EU without a deal, by providing the government with the power to make minor and technical changes, the Exchequer Secretary said. He promised it would not do anything other than allow existing tax legislation to remain in effect. He has placed a copy of the changes the government plans to make in the House of Commons library, and sent a copy to the Shadow Chief Secretary (Peter Dowd). In response to an intervention he said that after the transition period the UK would be able to set its own VAT rates including zero rates for, eg, tampons.

Regarding amendments 14 and 15 he promised that, ahead of a parliamentary vote on the proposed withdrawal agreement, analysis would be published bringing together evidence from across government considering long term costs and benefits of moving to new trading relationships with the EU and the rest of the world, and the baseline for the comparison would be the status quo (i.e. EU membership). The analysis would consider a model 'no deal' scenario on WTO terms, a modelled FTA scenario and a modelled analysis of the proposed deal. Amendment 14 would not require the analysis to be published until after Royal Assent and after the meaningful vote. He hoped MPs would support the government's announcement and not amendment 14. Regarding amendment 15 the minister promised that all such powers have passed as primary legislation and the list is in the public domain. The list did not need to be reprised and the amendment was unnecessary, he said.

Amendment 20 asks that no amendments be made under the power unless the UK has left with no deal. The minister stressed how tightly drafted the power the government are seeking is. He wanted to ensure the government could deliver continuity in any scenario. He called this 'pragmatic' and 'responsibly preparing for any eventuality'.

Jonathan Reynolds, Shadow Treasury Minister, replied for Labour. He began by explaining how Labour's approach to Brexit would differ from the Conservatives'. We should be deeply worried about the unprecedented transfer of powers to government in the Brexit legislation, he said. Clause 89 gave the government powers outside the usual tax law process. Labour amendments sought to tackle the 'democratic deficit' these changes would create. For example amendment 2 meant clause 89 would cease to have effect after two years. The shadow minister defended Labour's policy against a series of critical interventions from Conservatives. He explained the customs union Labour sought was a new customs union with the EU not a continuation of the existing customs union. Labour would negotiate a 'say' for the UK in future trade deals, he added.

Mr Reynolds welcomed that the government had conceded on transparency around analysis of different relationships with the EU, though suggested it may not have been entirely voluntary, given the parliamentary arithmetic. He said amendment 15 was necessary to assist with the eventual return of powers to the House of Commons where they belong. 

Jo Johnson (Conservative), the former transport minister, spoke to amendment 14. He said it would help ensure parliament voted with the fullest possible analysis before it. It would expose that neither choice (the proposed withdrawal agreement, and 'no deal') is better than the current situation, he said. He added there was a need for analysis of impact sector by sector, region by region and by group within the country. He asked the minister to confirm that this would form part of the appraisal the government would publish. He also asked if the OBR would be providing independent appraisal of the analysis the government would be publishing.

Chuka Umunna (Labour) said amendment 14, of which he is the lead signatory, sought to provide MPs with all the information needed to come to an informed decision. He said that the amendment was framed in such a way that the powers under clause 89 would not be usable unless the analysis called for had been published. He attacked MPs - mostly Conservatives he said - who had 'routinely denigrated' civil servants by questioning their independence and impugning their motives when making forecasts. Given the minister's earlier commitment (see above) he would not be pressing amendment 14 to the vote.

Justine Greening (Conservative) said she was also a signatory to amendment 14. She welcomed the minister's statement setting out the plans to provide more information to the House. She argued that the Commons was gridlocked and therefore should go back to the people with another referendum, this time on the three available choices, including remaining in the EU.

Kirsty Blackman (SNP) spoke in support of SNP amendments 10, 7, 8, 9 and new clauses 10 and 11, and also indicated her support for amendments 14, 15, 22, and new clause 17. She suggested people were getting mixed up between an FTA and trade deals - "it is perfectly possible to make arrangements which improve the flow of trade without actually signing a free trade agreement". She added that any trade agreement between any countries involves compromise. A UK-US trade deal would involve the UK giving things away as well as gaining things, she said. 

Amendment 7 asks that clause 89 powers be subject to the affirmative procedure, she said. As a member of the EU sifting committee she said that some of the regulations coming to it which the government are proposing as negative resolutions should never have been negative resolutions because of their significance. (A negative resolution or statutory instrument is one which passes automatically without a debate unless objected to by MPs. An affirmative resolution or statutory instrument is one which has to be debated by MPs (and by peers in some cases) and voted on before it passes.) She said she did not trust that the government would only move truly minor and technical amendments using clause 89. She drew the minister's attention to a Lords committee that met recently in relation to the Finance Bill, and to an article by Wendy Bradley that talked about 'power creep'. She emphasised the importance of regular review of powers held by government.

Ms Blackman praised Chuka Umunna for the amendment he had proposed (amendment 14). She said the analysis produced by the government ought to be scrutinised by the OBR - its remit should be widened to do this. She said the analysis needed to be brought forward in good time. She cited the lack of time between publication of the Finance Bill and second reading debate as evidence of government's poor record on this. Yes the analysis would be a prediction, but every forward looking figure in the Red Book was a prediction. New clause 11 was designed to highlight the number of measures in the Finance Bill not consulted on in draft.

Clause 90 was, she said, 'just bizarre'. It gives the government carte blanche to spend money (amount unspecified) to stand still so nothing changes when we leave the EU, she argued. She then launched a wider criticism of the 'estimates process' which is designed to scrutinise government spending but is done retrospectively and inadequately because of the laws of Parliament. On tax policy she attacked the government for not bringing forward an Amendment of the Laws motion, forcing the opposition to propose reviews rather than making more substantial proposals in committee.

Grant Shapps (Conservative) addressed his remarks to clause 89, highlighting a particular issue around VAT on pilot training which, he said, was a factor in deterring women and other under-represented groups from becoming pilots. He asked the minister to think about what the UK could do under the clause to make aviation more inclusive.

Vicky Ford (Conservative), a former MEP, also addressed clause 89, saying EU tax proposals were frequently deeply controversial, from a financial transactions tax to VAT rules. As a fellow member of the EU statutory instruments committee with Kirsty Blackman she said that the committee did its job well. She supported the need for clause 89 and thought the proposed amendments to it were unnecessary.

Kevin Hollinrake (Conservative) spoke to amendment 14. He had supported remaining in the EU but now thought that we must take advantage of the opportunities of leaving. He thought Treasury forecasts would not capture the full picture. On clauses 68-78 he defended the UK's record on tackling climate change.

Votes

The chair moved that clause 68 stand part of the Bill. This was agreed without opposition.

The chair moved that clauses 69-78 stand part of the Bill. This was agreed without opposition.

Amendment 22 was moved by Jonathan Reynolds for Labour. This states that, before powers can be exercised under clause 89, there must be a review of (among other things) the fiscal and economic effects of the exercise of those powers and of the outcome of Brexit negotiations giving rise to their exercise. The amendment was defeated by 295 votes to 271.

Amendment 7 was moved by Kirsty Blackman for the SNP. This would make statutory instruments enabled by clause 89 subject to affirmative procedure. The amendment was defeated by 296 votes to 41.

The chair moved that clauses 89 and 90 stand part of the Bill. This was agreed without opposition.

The debate concluded and will resume tomorrow, not earlier than 12.30pm.

By CIOT External Relations team.