National Insurance Contributions Bill
Published date : 14 June, 2021
The Bill makes provision for NI exemptions in what we believe are a number of important and necessary areas. We are generally supportive on such matters, but there are issues in each area—both within and outwith the scope of the Bill—that require some attention and that we will likely seek to address or draw attention to as the Bill proceeds. For the moment, however, I shall confine my remarks to the general principles and the remedies offered in the Bill.
First, I made clear the SNP’s support for freeports during the debates on the Finance Bill. We feel strongly that, given the scale of financial support on offer in the Bill, in terms of the customs exemptions and NICs, it is important to make sure that other wider policy objectives—such as environmental obligations, the commitment to net zero and fair pay for those employed in freeports—are met. That is what the Scottish Government’s greenports aim to do, by marrying up all the incentives of a freeport with wider obligations to ensure the payment of the real living wage, the implementation of the Scottish business pledge and the making of contributions towards net zero emissions. All those objectives must be met before companies are able to benefit from the substantial tax status benefits that freeports offer. The fair and sustainable greenport model can be an exemplar of those values while adding value to goods, services and the country’s brand.
If the UK Government wish to take a more laissez-faire approach to the securing of such outcomes, that is a matter of choice as much as it is a matter of regret. However, it should not be allowed to become a matter that contributes to any further delay in allowing the Scottish Government to take their approach or in allowing those who wish to invest in Scotland under the conditions I have set out to do so. I urge the Minister to ensure that the UK Government move quickly to allow the model to proceed so that the bidding process can begin.
Let me turn to veterans. Those with experience of serving in our armed forces bring valuable life skills and experience to the workplace. The NICs exemptions are therefore a positive step, making it even more attractive to employers to hire ex-service personnel and bring their skills and experience into the workforce. We very much welcome that step on its own terms. It is important to provide every support possible to former service personnel as they transition to civilian life.
Anyone who is in contact with the veterans community will be all too aware of the gaps in the support available. The Scottish Government have sought to fill those gaps by funding the translation of military qualifications so that they can be fully recognised by civilian employers—another key step that can help to incentivise the employment of ex-service personnel; setting up the national veterans care network to ensure parity of access to specialist services; actively supporting attempts to improve access to employment for the spouses and partners of those serving in the military, through Can Do hubs and the Forces Families Jobs website; and setting up, in conjunction with the Welsh Government, the Capitalising on Military Family Talent initiative. All those things are key elements in making sure that we deliver the best for our service personnel, and they sit well beside the NICs exemptions.
However important the NICs step will be, it cannot and must not be seen as any kind of substitute or sticking plaster for what we believe is a planned 40% reduction in the budget of the Office for Veterans’ Affairs. That cut stands in stark contrast to the support that we should be offering and my party will continue to oppose it.
Let me turn to the treatment of self-isolation payments—another measure that we are happy to support fully. The purpose of the payments was clearly to incentivise people on low incomes who needed to self-isolate to do so, to help to prevent the spread of the virus without their having to suffer any adverse financial consequences. The intention was only ever to help people to make the right choices for the benefit of themselves and others, with the NICs consequences quite understandably something of an afterthought. The move to exempt the payments from NICs, thereby removing the administrative and cost burdens on local authorities and employers, is therefore a positive step. If the payments can be made exempt from NICs, it makes it harder to justify the continuation—apparently at UK ministerial insistence—of the situation whereby any past or future thank you payments made to NHS and care workers in Scotland remain liable to income tax.
Finally, we welcome the move to allow changes to the disclosure of tax avoidance schemes regime as it applies to NICs avoidance schemes. That may be a small step towards closing another area of potential abuse in the tax code, but it is necessary. However, what is really needed is a workable set of general anti-avoidance rules that tackle tax avoidance in all its forms; do not exempt existing and established abuse from action; include in their scope international tax abuse; give a tax authority the right to take action against tax avoidance, which it defines, in an objective fashion capable of being numerically assessed, without the consent of any unelected authority; and place the burden of proof on this issue on the taxpayer.
We are happy to see the Bill progress, and to address it in greater detail and attempt to improve it as it continues its passage through the House.
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