Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 26th January 2021 Commons Chamber

[Steve Barclay]

The hon. Gentleman makes a fair point; there are household costs. That is why my right hon. Friend the Chancellor, through the package of measures, has supported the incomes of the poorest. The distributional analysis from the Treasury shows that the poorest working households have benefited most from the measures introduced by my right hon. Friend. The best way of supporting those families is through schemes that the UK, through its broad shoulders, is able to offer, such as the furlough scheme and the self-employed income support scheme, which have supported so many jobs across Scotland.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

The Chancellor’s chaotic stop-start approach to furlough last autumn undoubtedly cost jobs. Failing to continue the £20 universal credit uplift and extend it to legacy benefits is set to plunge struggling families into hardship, and now the Conservatives are signalling tax rises and a return to austerity. To what extent does the Minister believe that that approach has contributed to 20 consecutive polls in favour of Scottish independence?

[Steve Barclay]

There is a factual error in the hon. Lady’s question, in saying that there was a stop-start approach to furlough—

[Alison Thewliss]

There was!

[Steve Barclay]

It continued throughout; that is just a statement of fact. In terms of the wider package, I would refer the hon. Lady to the fact that the UK Government have provided £280 billion-worth of support and that bodies such as the International Monetary Fund have said that the UK’s economic response has been one of the best examples of co-ordinated action globally. We are able to do that because we are working as one United Kingdom acting together and using the broad shoulders of the UK.

--- Later in debate ---

[Jesse Norman]

If I may just say, the hon. Gentleman is wrong. We are not talking about a claim that is not validated by third parties; it is understood internationally that the scheme is one of the most generous in the world. He will be aware that the issue is subject to legal challenge, which limits what I can say, but I can tell him that the Government are well aware that some self-employed people found that their eligibility for the scheme was affected if they had taken time out of their trade in 2018-19, which is why, in June last year, the scheme’s eligibility criteria were revised to ensure that people in that situation were able to claim self-employment income support.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

Since the beginning of the pandemic, the UK Government have consistently failed to prioritise support for women on maternity leave. Despite the issue being raised by me and a host of others repeatedly in this House, the UK Government were taken to judicial review last week by Joeli Brearley and the tireless campaigners at Pregnant Then Screwed. Do the UK Government now accept that it is not a sabbatical, sick leave or a holiday—it is maternity leave? Will they end their discrimination against 75,000 self-employed mothers?

[Jesse Norman]

I am not sure whether the sound system was working but, as the hon. Lady will know from my previous remarks, the issue is subject to legal challenge so I cannot discuss it. I will say, though, that I met maternity groups as part of the excluded in early December, and we have taken steps to remedy the situation, where we have been able to do so, in relation to those who took time out in the year 2018-19.

Financial Services Bill

Alison Thewliss Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP) [V]]

Thank you, Madam Deputy Speaker. I will certainly do the best I can within the constraints of the technology that we have. I wish everybody a guid new year.

As colleagues will see, the SNP has tabled a range of amendments to this wide-ranging portfolio Bill. We have done so because we feel very strongly that the Bill was an opportunity to strengthen consumer protection; to take on the long-running and vexed issue of mortgage prisoners; to look at the wider responsibilities of financial services firms in areas of climate change, the sustainable development goals, ethics, money laundering and criminality; and to try our very best to mitigate the unfolding disaster that is Brexit.

On the first day of trading after the transition period ended, the City of London lost €6 billion in euro-denominated trading to venues in Amsterdam and Paris by companies such as London Stock Exchange Group, CBOE, and Aquis Exchange. Ernst & Young has said that £1.2 trillion of assets and 7,500 jobs had moved from the UK to the EU before 31 December. Trade frictions are apt to make this situation worse. Only last week, the Prime Minister was asking businesses what further divergence they would like to see. On the contrary, the message that we get when talking to City figures is that the only folk pushing for deregulation are Tory Back Benchers. Businesses see the importance of having open access to the EU market. It is vital that the UK authorities take into account the impact of frictions before taking us further away from the rules that the rest of Europe abides by.

SNP amendment 8 would ensure that the likely effects of the rules on trade frictions between the UK and EU are considered before part 9C rules are taken. Amendment 11 does the same for CRR—capital requirements regulation—rules. Our new clause 20 would force the Tories to come clean on the impact of financial services divergence from the EU. We feel very strongly that it is possible that if Scotland had been permitted to negotiate its own EU deal, taking into account our priorities, financial services operations could well have moved to Edinburgh, Glasgow and Aberdeen. It would certainly be better than how things are operating currently, with added layers of complexity. I have heard that a trader in London now cannot speak to an EU-based client without an EU-based trader also on the call to chaperone. The UK Government face a choice of two options: to try to achieve equivalence with the EU, which will essentially leave them a rule-taker with no seat at the decision-making table, or to forget about equivalence altogether and tear up the rulebook. It is expected that this latter option will encourage EU efforts to strip financial services businesses from the UK, losing well-paid jobs and skills not just in London but in Glasgow, Edinburgh, Aberdeen and other places too. We certainly did not vote for such an outcome.

Moving on to money laundering and financial crime, successive UK Governments have failed to tackle money laundering. The Minister gave this a hefty further kick into the long grass of a further call for evidence in his response to the amendments proposed by the right hon. Member for Hayes and Harlington (John McDonnell). The hon. Member for Thirsk and Malton (Kevin Hollinrake) also reiterated the need for action. Our new clause 14 would force Westminster to come clean on tax avoidance and the misuse of Scottish limited partnerships, about which the Minister knows I care a great deal. New clause 14 would show how little impact this Bill has on tax avoidance. With the Chancellor talking of a return to austerity, tax rises and public pay constraint, it is galling that there is no urgency by the UK Government in tackling tax avoidance and evasion on the other side of that balance sheet. It beggars belief, still, that the Tories’ 2018 Bill left an oligarch loophole allowing money laundering by overseas trusts to buy UK property with impunity—and they still have not acted on SLPs.

Clause 31 amends schedule 2 of the Sanctions and Anti-Money Laundering Act 2018 to ensure that regulations can be made in respect of trustees with links to the UK. Without this, any powers that Her Majesty’s Revenue and Customs sought to exercise to access information on such trusts are at risk of being held invalid under legal challenge. The UK Government must introduce a robust and transparent system of company registration in order to combat money launderers’ attempts to register entities for illicit purposes. The UK Government must also act to tackle the ongoing improper use of SLPs via proper, thorough reform of Companies House.

The UK Government really ought to accept cross-party amendment 7 to tackle financial crime and genocide, standing in the name of the hon. Member for Bethnal Green and Bow (Rushanara Ali), my relentless colleague on the Treasury Committee. Failure to take action on this important human rights agenda will never be forgotten. This UK Government are forever keen to talk up their global Britain credentials, so this amendment is a significant opportunity to take that lead. It builds on the UK Government’s adoption of Magnitsky sanctions. I implore the Minister: we should never allow those who have had a hand in genocide to make their investments in the UK.

We also strongly support cross-party new clause 4, which would make it an offence for a relevant body registered by the FCA to facilitate, or fail to prevent, specified economic crimes. That is an area in desperate need of tightening, because too many are getting away with that at the moment.

I have previously given the Minister a wee bit of slagging for the Bill, and I made a pretty safe prediction that our diligent amendments would be dismissed in Committee. The Government’s U-turn on electronic payment legislation, which they dismissed in Committee, shows why our financial safety depends on parliamentary scrutiny, and the introduction of such a measure at this late stage gives me some concern. In Committee, the Government dismissed the need to cover electronic money institutions and the difficulties around DAMLs—defences against money laundering—despite the urgency of that issue, yet today we have a slew of Government amendments, new clauses, and even a whole new schedule.

Electronic money institutions expected to see something in the Bill. The Opposition tabled amendments to correct that. The Minister said that he would update Members on Report, but it is late in the day to bring such comprehensive amendments to the House. I would be grateful for clarity on whether Government amendments missed the boat in the first draft, or whether there is another reason. I am concerned that we have not been given the evidence to ascertain whether the drafting and content of the amendments provides what electronic money institutions are looking for. It would have been good to have such information, so that we could have taken evidence on it at the start of this process. 

This issue goes to the heart of many of the concerns felt by me and my colleagues. Legislation is not done well here at the best of times, and financial services is a huge area that requires legislation, oversight and expertise. The Government say they are taking back control, but they are taking it from Brussels and giving it straight to unseen bureaucrats and regulators, with little role for this House. At the very least, MPs must be afforded the same level of power and influence that MEPs enjoyed. We know that little time and priority is given to SI Committees, and that Committees such as the European Scrutiny Committee have no real impact on regulation. Select Committee business is already incredibly busy, and scrutiny of these new powers must not be squeezed into already limited time and space, especially given the work that the Treasury and BEIS Committees now have, due to the covid fallout and the economic recovery.

With this place not having even a budget committee, SNP Members find it doubtful that the Treasury’s new powers will receive the scrutiny they deserve. That is why we want a specific committee to deal with the swathes of powers that are being handed back to the Treasury, the FCA and the PRA. We must ensure that the use of those powers is subject to the affirmative scrutiny procedure, and new clauses 15 and 16 seek to address that issue. Until the regulatory framework review has been published, and a new oversight structure agreed, such clauses are vital to ensure that Government and the FCA consult Parliament, before using the powers in the Bill in a way that would make Henry VIII blush.

On areas of consumer interest, I fully support new clause 7, tabled in the name of the hon. Member for Walthamstow (Stella Creasy). Her speech in Committee was well-informed and passionate, and I suspect the Minister knows as well as the rest of us that she was correct to raise those concerns. There must be consumer protection for those using buy-now, pay-later schemes of all types. Clearpay and Klarna are on just about every retail website these days, and the lack of regulation around them exposes all our constituents to significant risk. Covid has led to approaching 1 million job losses, with implications for those who have outstanding debts. That toxic situation will only cause hardship in the long run, and the UK Government would do well to listen to the hon. Member for Walthamstow and act today, rather than wait for trouble to be heaped on our constituents in future.

I was glad to see the Minister make moves towards Help to Save accounts which I raised in Committee. I still have serious concerns that people who have managed to save some cash might lose access to it, although his assurances go some way to addressing those fears. It makes a degree of sense to transfer money into the same account that Help to Save bonuses were paid into, but the proportion of accounts where that is not possible must be closely monitored. I would like to know more about how National Savings and Investments will contact those who have poor literacy and may be disengaged, and I assure the Minister that I will be keeping a close eye on that. Saying that customers will be contacted could mean they get a letter in the post that they do not open and it goes into a pile with the rest of the unopened mail—we all have constituents who do that, and they have a right for their savings to be protected, along with those of everybody else.

I intend to press SNP new clause 21 on the financial services duty of care to a vote this afternoon.  Macmillan Cancer Support was incredibly helpful in drafting the new clause, and I pay tribute to all those who are struggling not just through covid, but though cancer treatment as well. Under new clause 21, the FCA must ensure that financial services providers act with a duty of care and in the best interests of all consumers. It would amend the Financial Services and Markets Act 2000 by inserting a “duty of care specification” and bringing that into the FCA’s general duties. There would be an explicit requirement on the FCA to secure an appropriate degree of protection for consumers, and to ensure that authorised persons carrying out regulated activities act with that duty of care.

Who would not want to see this? Macmillan has been clear that at present things are quite piecemeal and the current system is just not working for consumers. It has proposed this change for several reasons, not least because its research suggests that only 11% of people tell their bank about a cancer diagnosis. Macmillan suggests that it would be much better if the banks assumed that people may be vulnerable, rather than waiting for people to get into difficulties while going through cancer treatment, which will only add to their stress. One in three people with cancer experience a loss of income from employment following a diagnosis, losing an average of around £860 a month. That makes it more difficult for them to pay their bills, or to meet any other debts and obligations, which is why this proposal is so important and relevant.

Our new clauses 24, 25 and 26 would ensure that no more homeowners have their mortgages sold to vulture funds. As I said at the beginning, the Bill gives the UK Government an opportunity to deal with this long-standing injustice, and I urge them to give it further consideration. Some have argued that those who ended up as mortgage prisoners were somehow just bad borrowers who got into trouble when they lived beyond their means, but more often than not that is actually very far from the reality. As the hon. Member for Thirsk and Malton pointed out, an expert analyst enlisted by the all-party parliamentary group on mortgage prisoners, has concluded that it is not the case, and it is not how markets and ratings agencies see the situation either.

The APPG’s analysis of the mortgage books has established that at the point of origination, Northern Rock loans were all prime mortgages with lower than average default rates, exhibiting good borrower behaviour; that if we adjusted for standard variable rate overpayments coming in line with other high street lenders, not only would these borrowers potentially be up to date with the payments, but their loan balances would also be around 10% lower; and that if we adjusted to competitive rates on the market, the difference would be even more substantial. The bond markets paid over the market value for the books, indicating that anyone in those books is, in fact, paying over the market value for the standard variable rates. People have been stuck in these mortgages for nine years and it is high time for the UK Government to act. I appreciate what the Minister says about other actions, but for those listening there is very little to justify further delay in doing the right thing, on top of the delays that they have already faced.

We will rely on SMEs for our economic recovery, and our new clause 11 would ensure that they are treated fairly by the big banks to avoid the mistakes of last crisis. Many conversations at the Treasury Committee have reflected that the banks and regulators do not want to repeat scandals such as RBS GRG, but we feel very strongly that we must take the opportunity of this Bill to go further. The Federation of Small Businesses has issued a stark warning that around a quarter of a million small businesses could be forced to close this year due to a lack of Government support. In a survey of 1,400 small firms, 5% stated that they expected to pull down the shutters this year. If replicated across the UK, these figures would mean 250,000 firms closing down if the Tory Government continue to sit on their hands.

The owners of these SMEs are often very heavily personally exposed if their business fails. Their family homes are at risk, just as if they were mis-sold a mortgage. The FCA has already recognised in its 2015 discussion paper, “Our approach to SMEs as users of financial services” that they are often no more financially sophisticated than everyday consumers, but are at risk of mis-selling because of product complexity, limited choice and poorly managed expectations. I could say an awful lot more about this, but I appreciate the time constraints. I would just point out that, as things stand, a sole trader with a property empire of £30 million can sue for breaches of the rules, whereas an ice cream van owner whose accountant tells him to incorporate for tax reasons cannot. It is a very illogical distinction between individuals who can take action and companies that cannot. I very much urge the Minister to look at that.

This Bill was an opportunity to do an awful lot more in a number of areas. As I and the Labour Front Benchers have set out, there is still much more that should be done to secure a future for financial services—a future that has been entirely undermined by Brexit, which will make things significantly more difficult. Huge questions on equivalence remain unanswered, and there is still no certainty of an agreement on a regulatory equivalence deal between the UK and the EU. For financial services, this deal is effectively a no-deal Brexit, which neither Scotland nor the City of London voted for. UK firms and their employees can no longer freely operate in the EU, and this has been a source of shockwaves across the sector. Worse still, there is no timescale for any kind of agreement.

Many companies are choosing to move their operations to the EU, rather than hang around for an indefinite period of time for an equivalence deal. The UK Government have given very little consideration to financial services in the negotiations, and there are far-reaching implications—far beyond those who work in the sector, but to each and every one of our constituents who needs that certainty and who needs interactions with financial services to be done properly for their own protection.

[Mr John Baron (Basildon and Billericay) (Con) [V]]

I refer to my entries in the Register of Members’ Financial Interests. I also wish briefly to thank the Leader of the House for eventually listening to sense and allowing virtual participation in debates of this sort; it has been a positive development.

--- Later in debate ---

[Alison Thewliss [V]]

I just want to reflect on the Bill and on where we are. There was a lot of cross-party agreement in Committee and in the debate on actions that we want to see. We all agree on the importance of financial services to our economy. We all agree that there needs to be further action by Government on money laundering, fraud and economic crime. We all agree that we want to protect customers, businesses and our constituents from emerging threats and risks. I think that we are getting to a broader agreement on scrutiny as well and I urge the Minister to recognise that putting the scrutiny in place after the framework and the rules are made fails to meet the Government’s promise of taking back control and of giving powers to this House. If we are taking these powers back from Europe, they should be coming to the House of Commons rather than to bureaucrats elsewhere. We have less power in this House as Members of Parliament than the Members of the European Parliament have, and that is very difficult to understand and accept from a Government who made such a great play of this.

I want to take the opportunity also to thank everybody who has helped and supported me in these debates and in the Bill process generally. I want to thank the Minister and the shadow Minister for the spirit in which our debate has been conducted. I want to thank all the Members who have contributed their expertise to the debates we have had—there is significant expertise in the House, which should be lent to scrutiny.

I thank the Clerks, Nicholas Taylor and Kevin Maddison, for the significant advice they have given. I thank Scott Taylor, Linda Nagy and my member of staff Mhairi Love, all of whom supported us greatly in the research that went into this. I want to particularly thank Macmillan Cancer Support and all who gave evidence on the Bill. It was so good to be on a Bill Committee that was allowed to take evidence, which does not happen for the Finance Bill, and I urge the Minister to take that on board when we come back to the Finance Bill later this year. Lastly, I thank Heather Buchanan of the all-party parliamentary group on fair business banking for helping me understand some of the issues in the Bill.

There is a lot yet to be said and done on financial services; this is only the beginning. It is incumbent on the Government, in the areas where there is cross-party agreement, to take on the measures that have been suggested and to deal swiftly with the risks that we see coming, so that we can all ensure that our constituents and businesses have the protection they need to participate in financial services and the fairest possible deal in the years and months ahead.

Economic Update

Alison Thewliss Excerpts

Monday 11th January 2021 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP) [V]]

I thank the Chancellor for finally gracing us with his presence and for not redacting his statement for once—I suspect that was because there is so little in it that is actually new. What is also missing is the additional £375 million that he promised to Scotland on 6 January. It was lauded by the Tories in Scotland, before the Treasury back-tracked, edited the press release and decided that Scotland’s businesses were not entitled to the £9,000 that English businesses will receive. Why?

Businesses are still struggling with debt and loss of income, so will the Chancellor extend the English business-rate holiday to allow Scotland to do the same? Will he continue the reduction in VAT to assist those in the struggling hospitality sector?

The Chancellor acknowledges the 800,000 jobs lost, but not his role in their loss and the uncertainty that his stop-start furlough has caused. Will he commit to extend the furlough and the self-employment support scheme for as long as necessary, with no more arbitrary stop-start?

Still, the gaps remain—for freelancers, directors of limited companies, those refused furlough and pregnant women who have lost out, as well as those on annual pay-as-you-earn and the newly self-employed. Will those who are now submitting tax returns be included in the self-employment support scheme from 31 January? Hundreds of thousands of people are counting on being able to do that.

Will the Chancellor extend the £20 increase to universal credit, and will he finally expand it to include those on legacy benefits who have seen no increase over these past months? Will he increase the pitiful level of statutory sick pay?

I have said for months now that we will not be out of this crisis quickly, and I am sad to have been proven right. On top of this crisis, Brexit is causing chaos for Scottish exporters trying to get their goods across the border. It is no wonder that Scotland is looking on at this shambolic Westminster Government and deciding in poll after poll that independence offers a brighter prospect for our future than more of the same old Tory austerity.

[Rishi Sunak]

I am happy to address directly the point about funding for Scotland and perhaps clear it up. In recognition of the very difficult circumstances that the devolved Administrations were grappling with—as we all are during this crisis—the UK Government made an unprecedented decision to provide an up-front funding guarantee to provide certainty and clarity for the Scottish Government so that they could make plans in advance of individual announcements being made and the appropriate Barnett sums being made available at that time. That was something that the Scottish Government had asked for, and it was welcomed. It is now clear that the hon. Lady seems to think that that is not a good thing. The point of doing that is to provide up-front certainty, but it is still also right to keep a tally of the various announcements, as they are made, about the additional sums that they trigger for Barnett, which will net against that guarantee, and then over time the guarantee will be adjusted. If I am hearing from the hon. Lady that she would prefer not to have up-front funding guarantees and would prefer the system of knowing Barnett consequentials only on an announcement- by-announcement basis, she should please write to me and let me know. But in aggregate this year £8.6 billion in up-front funding guarantees has been made available for the Scottish Government; the most recent announcement did trigger Barnett consequentials, which will net off against that guarantee. Over time, as we have done, that guarantee will be increased over the year as new announcements are made. I am not sure I could tell from the hon. Lady’s response whether businesses in Scotland have been offered an additional grant of up to £9,000 to help them get through the next few months. Perhaps she can clear that up for Scottish businesses, because that is what the UK Government are providing for businesses here in England. That money has been made available to the Scottish Government through the guarantee, and, of course, we look forward to seeing how they use it.

It is also important that this is not just about Barnett consequentials; we have always adopted a UK-wide approach to our support. Whether we are talking about the furlough scheme, all the things we have done on VAT, supporting people into employment or indeed our loans, many businesses and people in Scotland have been supported, because this is one United Kingdom Government and we will make sure that we provide support for our citizens in every single part of it.

Taxation (Post-transition Period) Bill

Alison Thewliss Excerpts

3rd reading & 3rd reading: House of Commons
Tuesday 15th December 2020 Commons Chamber

[John Redwood]

Indeed. I think my hon. Friend has confirmed that under the previous Prime Minister, when those of us who could not vote for her agreement said that we needed a sovereignty escape clause, we were told that that would not be permissible because it would not be effective implementation of the agreement; which was then reassuring to us, not liking the withdrawal agreement very much and realising that it was a provisional agreement and would be completed only were there to be a satisfactory outcome to the total range of talks. It was a totally artificial constraint that the EU invented that it had to be sequenced, when up until that point everybody had always rightly said that nothing was agreed until everything was agreed.

I would like to hear from the Minister a little more explanation on the detail of the Bill. As I understand it, the Northern Ireland protocol would apply only to goods that are passing from Great Britain to Northern Ireland and then on to the Republic of Ireland, or the reverse—goods coming from the Republic to Northern Ireland and then passing on to Great Britain. Am I right in thinking that that is a very small proportion of the total trade? In what ways will the Government ensure that it is properly defined, so that we do not catch up most goods in those more elaborate procedures? The bulk of the trade will be GB to Northern Ireland and back, or Republic of Ireland to Northern Ireland and back, and it should not in any way be caught up in any of these proposals. I am not sure that we do have a de minimis way of dealing with the so-called things at risk.

It is not clear how the system will work for items at risk where we agree that they are at risk—and I hope it is a UK decision about what is a risk, not some other kind of decision with EU inspectors. It would be helpful to me and the wider community interested in this debate to know how a business would proceed if it had such a good at risk, to whom it would answer, and what decisions would be made about such a good in Excise, because it sounds a rather complicated and difficult arrangement, both for the business concerned and for those who are trying to enforce.

I am trying to tease out from the Minister, in pursuit of the interests of my hon. Friend the Member for Stone and myself on sovereignty, whether we are really in control if the trade has started off from GB and is going to Northern Ireland. What kind of external intervention can the EU or the Republic of Ireland engineer—how is that fair, and how will it be determined? I think that is what we are most worried about in this piece of legislation, and we would be more reassured if there were the override that my hon. Friend proposes. I should be grateful for some explanation.

[Alison Thewliss (Glasgow Central) (SNP)]

I come to this debate with many of the same concerns as I had last week. I shall not repeat them because I think everybody is quite clear on what they were. We come to this debate with the clock ticking louder and louder, and with uncertainty ahead.

I must agree with the right hon. Member for Wokingham (John Redwood) when he says that this is a complex, complicated and difficult arrangement. Yes it is, and it is absolutely baffling why we are still not certain what will happen, with such a close deadline looming. It is impossible for businesses to know what to plan for and how they will manage this, because so much is still uncertain. The Institute for Government’s Jess Sargeant went through some of the outstanding issues in the Northern Ireland protocol still to be agreed, and these are not small things but quite significant things in many cases. There is still great uncertainty about the grace period that was talked about last week, what will happen at the end of it, and what the Government are going to do between then and now, whenever this finishes. What work will they be doing in the meantime? It does feel, quite often, that this Government put things off and leave things, and then say, “Oh gosh, suddenly I have to do that at the last minute.” They do that quite regularly.

--- Later in debate ---

[Alison Thewliss]

I also wish to thank the Minister and the Opposition Front-Bench spokesperson, the right hon. Member for Wolverhampton South East (Mr McFadden), for the way in which this debate has been conducted, as well as the hon. Member for Stone (Sir William Cash) for his contributions, which were typically detailed. There is one point of detail that I was quite surprised that he missed. I have been saving this up the end, just in the hope that he might have picked up on it. He has waxed lyrical about sovereignty, as he does in every single debate I think he has ever spoken in, but I am quite surprised that he allowed to fly the EU setting the level of taxation on aviation gasoline. The reason that I am quite surprised about that, in the most ludicrous of ludicrous Brexit-based patriotic ironies, is that avgas is the fuel used not just in private and leisure aircraft, as the Minister set out, but in Spitfires, Hurricanes and other similar planes. There is some mad irony in the UK Government handing over to the EU the power to set the taxation on those vintage planes that bear so much patriotism among so many people.

I suppose that it is typical of the Government’s approach to all of this that there is so much detail in the Bill that we cannot possibly see—

[Jesse Norman]

Will the hon. Lady give way?

[Alison Thewliss]

Of course.

[Jesse Norman]

Will the hon. Lady tell us how much extra cost filling a Spitfire with fuel will incur according to this extra avgas taxation?

[Alison Thewliss]

I think the Minister knows well that it is the principle of the EU continuing to set the fuel duty rate, rather than the cost of it. Conservative Members know well about all these principles—they are principles of patriotism that they hold dear. The Minister has allowed this to slide in and he has done very well not to alert their suspicions on it.

[Jesse Norman]

I think we can all have a patriotism that is rich and bold enough to incur an extra £10 on a 450-litre tank of avgas.

[Alison Thewliss]

I thank the Minister for that detail. If he can tell me the further details on the questions that I have not yet had answered from the previous day’s debate, that would be welcome. I can go through the things that he has not yet answered and have him answer all those, if he has that particular detail to hand. I thank him for that and look forward to letters appearing in my letterbox with the detail at some stage.

Other letters that have not yet appeared are those from Baroness Davidson and the former Secretary of State for Scotland, who both threatened to resign if Northern Ireland got any special treatment in these negotiations, yet that is exactly what we have as a result of this legislation. As the Chancellor of the Duchy of Lancaster said, it gets the “best of both worlds” in this deal—it gets to be in the EU and part of this Union—and yet Scotland is not getting any of that. Scotland is getting thoroughly ripped off as a result of the deal.

The Minister talked about strengthening the Union, but the Union is slipping away from the Government’s grasp. By every action that they take in this legislation, Scotland sees further and further how we are being undermined and left behind by this Government. They do not give much of a toss about Scotland—they are pushing their own Brexit agenda, and the rest of us can put up with it.

The Minister mentioned the additional paperwork that is coming. Northern Ireland in particular is being wound up in a giant Christmas ball of red tape as a result of the legislation. He talked about 11 million extra declarations and paperwork. That is more than 265 additional bits of form-filling that will happen after Brexit. The Government used to talk about getting rid of all the red tape, but in fact they are increasing it. They used to talk about taking powers back from the bureaucrats in Brussels, whereas in fact they are giving them back to bureaucrats in Whitehall, out of sight of this House.

We still do not know whether the transition period is ending, and with 16 days to go we still do not know what we are going to transition to. This Government have made an absolute mess of the four and a half years that they have had. We have absolutely no confidence in the direction that they are going and, with 16 polls in Scotland now showing support for independence consistently over the past months, we can see exactly where Scotland is going. It should be going there as soon as possible.

Taxation (Post-transition Period) Bill

Alison Thewliss Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 9th December 2020 Commons Chamber

[Anneliese Dodds]

With enormous respect to the Minister, the problem with his Government’s approach is the fact that they do not indicate what they have got with that spending. As I said, £4.4 billion has been spent on preparedness for Brexit and for the end of the transition period, and the £80 million that he refers to, but there is no indication from the Government of how many additional customs officers we have received as a result of that spending. I hoped that he was intervening on me to provide an indication of the additional workforce that has been recruited. It is a matter of regret that he was unable to do so.

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Lady is quite rightly querying how money has been spent. I do not know whether she has had letters from the Government asking MPs, as small businesses, to get ready for Brexit. I got two of them, including one that referred to me as an MSP, so perhaps the Government are not spending their money particularly wisely or accurately.

[Anneliese Dodds]

I am grateful to the hon. Member for that very relevant point. I am sure that it is not only Opposition Members but Government Members who have had many businesses contacting them, often in despair, about the communications and advertisements asking them to get ready when there is so little indication of what they have to get ready for.

Yesterday morning, the Business, Energy and Industrial Strategy Committee heard from the Food and Drink Federation, which said that the guidance being published now was already too late. Some 43% of its members who supply Northern Ireland have said that they will not do so in the first three months of next year. That is desperately worrying. TheCityUK said that in the worst-case scenario, 40% of the UK’s EU-related financial activity could be lost. Every day between now and the end of the year counts to get a deal, and failing that, to plan for the no-deal outcome that the Prime Minister himself conceded would represent a failure of statecraft.

With that in mind, Labour supports this Bill passing. Labour is a responsible Opposition, and we are determined to see the minimum disruption possible, but we cannot support such continued lack of clarity on critical issues. When businesses need clarity as a matter of urgency, it is not good enough to state that further guidance will be forthcoming. At the very least, they need a timetable for the provision of that greater certainty. They need to know what rules of origin will apply from 1 January. The continued lack of clarity could create unprecedented new costs. They need to know when appropriate tariff codes will be published. They need to know whether the Government will be providing easements, and they need to know these things in concrete terms, not through the winks and nudges that have substituted for clarity so far.

Businesses need to know whether there will be a pause in penalties arising out of this legislation and, if so, what would be done to counterbalance that and prevent wilful avoidance. They need to know whether the measures in the Bill countermand the existing guidance provided to Northern Irish businesses, some of which was updated just on 7 December. They need to know, as revealed in The Irish Times, whether and when the information on the trusted trader scheme for Northern Irish business—details of which have allegedly been coming out of internal communications —is going to be fully published, so that businesses can follow that scheme.

I want to end my contribution by asking the Minister to place himself in the shoes of a small manufacturing company. We have many excellent such companies across the United Kingdom—in Northern Ireland and in Great Britain. Companies will already have faced enormous challenges during this period because of covid. Potentially, they have staff off because they have to self-isolate. Potentially, there is continuing uncertainty about the future of furlough because of this Government’s unwillingness to provide that certainty. Potentially, they were counting on the job retention bonus, but they are not going to receive it. They are now trying to plan which members of staff they will need to have in the company at work to get ready for 1 January. The stress and strain are immense.

The Minister and his Government must do all they can to overcome those uncertainties and help businesses to plan. That is the least they can do for businesses and the people who work for them, who have had such a hard year.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

The way this Bill has been brought to the House today, less than 24 hours since it was published yesterday, really shows the disrespect the Government have for Parliament and for all of us here today. It is unacceptable that the UK Government are coming so late in the day with these proposals and are blatantly using them as a form of leverage in their negotiations.

The proposals before us today will impact on the daily lives of residents in Northern Ireland and of businesses more widely. I have concerns, not least from what the hon. Member for Stone (Sir William Cash) has just said, that the clauses being taken out could easily be put back in again—if not by him, then by the Government themselves. We have no certainty over that because of the way they have conducted these negotiations.

As MPs, we do not have adequate time to scrutinise what is in front of us this afternoon. Businesses and stakeholders have also been excluded from the process and they are, of course, those who will feel the impact the most. It is typical of the slapdash, chaotic way the UK Government do things, but I would like very much to put on record my dismay and regret at this shambles. I would also like to say that, while I have huge sympathy for those who have worked on the drafting on the Bill, it would not be the first Bill that has come back with errors and drafting issues because it has been prepared in haste. We have also seen that with some of the financial services statutory instruments that have gone through. I am very concerned that this has been done so hastily that we will not find out what the errors are until the UK Government come back to fix them later.

The Northern Ireland provisions have huge complexity and give significant powers to the Treasury to define in regulations the goods that are “at risk” of being moved into the EU. The Minister confirmed yesterday that we do not know exactly what those at-risk goods are, which causes huge uncertainty for those moving goods in and out of Northern Ireland. As the hon. Member for Oxford East (Anneliese Dodds) said, that has a chilling effect on businesses that want to transact their business as normal, but just do not know what it is that they are being expected to prepare for.

The letter that we received earlier from the Financial Secretary to the Treasury confirms that changes to the regulations will be made under the negative procedure, so this House will have no ability to further scrutinise them. The same is true of Stormont and it is crucial that we hear Stormont’s views on these regulations and the effect of them.

“Take back control,” this Government said. Well, it seems that most of the control is either going to the Treasury or to officers in HMRC. All these regulations are being put forward in such a way as to remove scrutiny and to remove control. Throughout the letter that we received earlier from the Financial Secretary to the Treasury, references were made to the use of the negative procedure and, curiously, to powers that there are no plans for the Government to use. It may not be the plan now to use them, but even the best laid plans gang aft agley, as happens so often and so wildly with this Government. How will the scrutiny work should the Government decide to make these changes? Lots of powers are being hived off, as we can well see. The amendment tabled in my name and the names of my colleagues attempts to redress some of the democratic deficit in the way that the Government are conducting themselves.

The affirmative procedure, as with many procedures in this place, is not perfect by any means, but at the very least this would make the UK Government come to this House to explain the reasons for their actions and to be scrutinised on their thinking, rather than just making changes that will make a real difference to the lives and livelihoods of people across these islands and more widely. Changes should not just go through on the nod.

The withdrawal agreement has the consent mechanism for Stormont, which will kick in only at the end of 2024. The UK Government must explain how their engagement will operate on all the mechanisms between then and now. This matter is horribly complicated and my sympathies are with all those who have to operate under these very difficult circumstances. So much of the uncertainty is also swathed in huge amounts of red tape. The red tape that the Brexiteers claimed they were going to remove will now be wrapped around Northern Ireland.

I received very little by way of reassurance from the Chancellor of the Duchy of Lancaster in his statement and his responses to Members earlier today. Too much is uncertain, and a lot of it is mince. The derogation in chilled meat, sausages, mince and unfrozen prepared meals is one such aspect. [Laughter.] Keep up, keep up! RTÉ’s Tony Connelly notes that when the as-yet-to-be-determined derogation period expires, supermarkets in Northern Ireland will need to source products locally or from the Republic of Ireland. That may well be good for those producers and good luck to them, but a clear competitive disadvantage is being placed on food exporters in Scotland, Wales and England and that cannot be justified by the Government.

The trusted trader scheme itself is subject to review three and a half years after the Northern Ireland protocol begins, but what mechanisms exist to hold it to account in the meantime to ensure that it is effective and that it does not have a distorting effect, which we suspect that it may do? What is in place now to ensure that there is not a further panic in a couple of months’ time due to a lack of qualified staff to carry out checks for export health certificates? Given the propensity of this Government to hand in their homework late if the dog has not already eaten it, what concrete assurances can they give?

I turn now to enforcement. The Prime Minister could not answer the question earlier from the Leader of the Opposition on the existence, or otherwise, of 50,000 customs agents, and the Minister today could not answer the same question from the hon. Member for Oxford East. I want to know a bit more about these customs agents. Where are they? How many of them are there? Will they be prioritised for the big ports in the UK, or will the Government run the risk of leaving the door open to smuggling and tax-dodging via the short straits? As the hon. Member for North Down (Stephen Farry) mentioned earlier, there is a risk of criminality as well as just of error.

What assessment have the Government made of the competitiveness of our export businesses with reference to schedule 3 of the Bill? If customs charges now apply, surely it will make it more difficult for people to export as well as to import? This is a general concern that has been raised by my hon. Friend the Member for Aberdeen North (Kirsty Blackman) on multiple occasions. It presents an extra hassle for small businesses as well as an extra unanticipated expense for consumers. I give the House a small example. I ordered a necklace some time ago from the United States and when it arrived a huge customs charge was slapped on it. Had I known about it before I had ordered it, I might not have ordered it, given the scale of the charge. Consumers do not know what they will end up with if they order something online. When we see something online, we see what the price of it is and what the postage is, but we do not see that customs charge, which is really not transparent. The earrings that I am wearing today are from a small business based in Slovenia, which was able to send them with no additional charges because we were a member of the European Union. Some 70% of Irish online purchases come from the UK. I want to know from the Minister what the impact of the changes will be on our own businesses that wish to export to the Irish Republic.

[Andrew Griffith (Arundel and South Downs) (Con)]

The hon. Lady makes an almost persuasive case about the difficulty of fragmenting a customs union that has been in place for only 40 years or so. How much more difficult would it be to fragment the United Kingdom, a customs union that has been in place for centuries?

[Alison Thewliss]

The hon. Gentleman makes a good attempt there, but the issue is really the UK Government and their incompetence in dealing with all these issues, which could well have been anticipated, as well as in taking us out of the large trading bloc on our doorstep from which we have benefited for 40 years and from which our businesses have been able to export their goods. We in Scotland have been able to export our food and drink very easily, very simply and without any barriers. These are barriers that the UK Government wish to put in place—and if they wish to put them in place with an independent Scotland, that is their choice, not ours.

[Katherine Fletcher (South Ribble) (Con)]

Will the hon. Lady give way?

[Alison Thewliss]

I have almost finished, so I want to make a little progress, but I will try to bring the hon. Lady in later.

I am curious about what assessment the Government have made of the chilling effect of these changes. It is also very interesting that the customs duties will benefit the Irish Exchequer and be to the detriment of our people who wish to export. I note that paragraph 12 of schedule 1 will amend the Isle of Man Act 1979, and that part 6 of new schedule 9ZB to the Value Added Tax Act 1994, which is inserted by schedule 2, also relates to the Isle of Man, so I would be grateful if the Government told us what communication they have had with the Manx authorities on the proposals. Obviously those proposals have come out overnight, so I do not know what discussions have been had, but it would be very interesting to find out.

Scotland has not been offered the deal that Northern Ireland has been offered. The Financial Secretary to the Treasury spoke about the benefits of the EU single market that people in Northern Ireland will enjoy. Lucky them. Scotland is the only part of this supposed Union of equals not to get any of what we asked for, and we will see our own industries disadvantaged. To add insult to our very evident injury, Baroness Davidson and the then Scottish Secretary, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), threatened to resign if Northern Ireland was given different treatment. Just a couple of years ago, they said:

“Having fought just four years ago to keep our country together, the integrity of our United Kingdom remains the single most important issue for us in these negotiations.

Any deal that delivers a differentiated settlement for Northern Ireland beyond the differences that already exist on an all Ireland basis (eg agriculture), or can be brought under the provisions of the Belfast Agreement, would undermine the integrity of our UK internal market and this United Kingdom…We could not support any deal that…leads to Northern Ireland having a different relationship with the EU than the rest of the UK, beyond what currently exists.”

Well, that is exactly what we have. It is exactly what the Bill is and what it does, yet those two Members are still about. The Scottish Conservatives really do have more faces than the town clock.

To move on to the Chancellor of the Duchy of Lancaster, he has an absolute brass neck to describe the situation in Northern Ireland as the “best of both worlds”. He said on ITV that Northern Ireland would have

“access to the European single market, because there is no infrastructure on the island of Ireland, and at the same time unfettered access to the rest of the UK market.”

“The best of both worlds”—in Scotland, we have heard that before. The Better Together campaign told us that the only risk of losing our place in the EU was if Scotland voted for independence. Where are we now?

The United Kingdom Internal Market Bill farce undermines yet further the integrity of this crumbling Union, and today’s Bill takes another sledgehammer to the support structures that this Government believe are stronger than they are. The people of Scotland—those who voted no as well as those who voted yes, and those who were unable to vote six years ago—have been watching what has been going on. They do not want a UK Government who drag Scotland out of the EU—they voted very clearly, by 62%, to remain—they do not want a UK Government who threaten to break international law and spoil our standing in the world, and they do not want a UK Government to force Scotland into an insular and poorer future. People want their chance to have their say. The 15 polls in a row that now back independence show clearly to me and everybody else that the people of Scotland believe that things have changed. As Winnie Ewing said:

“Stop the world, Scotland wants to get on.”

[Mr Deputy Speaker (Mr Nigel Evans)]

Members should be aiming to speak for not much longer than four minutes, if we are to get everybody in. I call Sir John Redwood.

Taxation (Post-transition Period) Bill

Alison Thewliss Excerpts

Committee stage & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Wednesday 9th December 2020 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

Sir William Cash is not here, so we go to Alison Thewliss.

[Alison Thewliss (Glasgow Central) (SNP)]

I am very sorry to hear that the hon. Member for Stone (Sir William Cash) is not here, because I am sure that there is so much more that he could have added to this debate that he has not already said.

[The First Deputy Chairman]

He may have withdrawn but I have not been told, so that may explain it.

[Alison Thewliss]

That is absolutely fine. I wish to speak to the amendments in my name and the names of my hon. Friends.

As I outlined on Second Reading, I have real concerns about the scrutiny aspects of the Bill. It is a thick and substantial Bill that gives substantial powers to the UK Government to move things through this House under the negative procedure, which gives very little opportunity for us or anybody else to scrutinise their proposals. We wish to see the proposals come under the affirmative procedure wherever possible, to allow extra scrutiny of the Government.

As I said, I am very concerned about the letter that the Minister sent to Members. It talks about a huge range of duties that the Government are creating but that, at this moment, they do not intend to use. I question why they are creating such duties if they do not intend to use them. At some stage perhaps they will use them, so we need a mechanism to scrutinise them. It is unfortunate, but perhaps not surprising, that the Government see taking back control as bringing it back from bureaucrats in Brussels to give it to bureaucrats in Whitehall, bypassing this place altogether. It should have been an opportunity for this place to get more powers to scrutinise such duties, but no; it all goes to Her Majesty’s Revenue and Customs or to the Treasury, and very little comes here or indeed to the Committees of this House. There should have been an opportunity to look at the new taxation structures that we are bringing in here and that we have responsibility for in this House, but the Committees of this House will not get the opportunity to scrutinise these measures either. I know that some have suggested that an additional Committee would allow that scrutiny to be made.

I very much support what the right hon. Member for Wolverhampton South East (Mr McFadden) said and the questions he asked. We are dealing with complex supply chains when we talk about the movement of food, chemicals and manufactured goods. In my constituency and in the constituencies of some of my colleagues, for example, we have manufacturers of leather, who move raw hides from Ireland to the west of Scotland. They need to know how they will be able to move these goods through different territories, as they really should not be left hanging about for any length of time; they need to be moved quickly to where they are processed. We do not know whether they would fall under what the Government have termed “at risk goods”. It is not surprising that businesses are tearing their hair out with this shambles of a Government, because they do not know whether they will be able to continue with their business come the turn of the year.

There is also the cost and the red tape, whether it is the 265 million customs forms that will need to be filled out compared with the 54 million now, or whether it is the issue of rebates and the processing of fees and money. This is the end of the transition period, but we do not know what we are transitioning to. We certainly know what we had and what we will not have any more: free and unfettered access to a huge market in Europe. We do know that we are losing that, but we do not yet know what the Government’s plans are.

Despite the Government’s attempts to reassure us, concerns remain. Aodhán Connolly of the Northern Ireland Retail Consortium, while acknowledging the progress that has been made, said of the delays:

“We are just 22 days out and retailers are still unsure about the exact processes needed to move food to Northern Ireland. Therefore, the Government needs to assure them how this will be done without additional bureaucracy.”

There are real concerns about the cost and the choice of food that people of Northern Ireland will have if we do not get this right.

The point that I made earlier about customs charges and duties was reflected in an item on RTÉ at about 2.30 this afternoon. It said that customers in Ireland will be faced with VAT and customs duty from 1 January if buying goods from the UK worth over €22. That is significantly lower than the levels that were spoken about earlier. It was said that the Irish Revenue has no way of knowing whether consumers will continue to buy from the UK when additional charges apply. I ask the Minister to consider this and to do some studies on whether these additional charges will have an impact on people in this country who make good-quality goods and export them to Ireland. A total of 70% goes to Ireland, and we need to have some certainty from the Government about the long-term impact.

The scrutiny mechanisms that we suggest give us ample opportunity to do that at every stage of this process, not just today while we are considering this Bill, and then putting it in a box and leaving it, but on an ongoing basis. This Government definitely need to be held to account.

The First Deputy Chairman of Ways and Means (Dame Rosie Winterton): I believe that the Members who were numbers five to 11 on the call list spoke in the earlier debate and have withdrawn from this one, which means that we go straight to Andrew Griffith.

[Andrew Griffith (Arundel and South Downs) (Con)]

It is a pleasure to speak under your chairmanship, Dame Rosie.

I welcome this set of pragmatic measures. The Bill is a building block on the way to regaining our national self-determination in this very important area. I will oppose the amendment, although not on the principle— greater scrutiny and giving business greater certainty are things that I hope that those on both sides of the House can support. However, we should recognise that we are in a fast-moving environment. The Treasury team have been working incredibly intensively in the context of the pandemic and I think it is unfair to impose on them a specific timeframe when I know they will—perhaps the Minister will address this point—use their very best endeavours to give the very greatest amount of certainty as quickly as possible.

I follow the hon. Member for Glasgow Central (Alison Thewliss), who I have to say takes something of an 18th-century approach to customs, borders, forms and tariffs. The reality is that, as my right hon. Friend the Member for Wokingham (John Redwood) said earlier, we are in an age of online forms and digital electronic surveillance. Any good that passes across any internal or external border is tracked through a multiplicity of different technologies. I made the observation to the hon. Lady that of course when one introduces any customs border—this is one reason why Government Members are so keen to keep our United Kingdom together—there is an added level of complexity, but we should not overstate the complexity or understate the ability of business to innovate and deal with that.

[Alison Thewliss]

I thank the hon. Gentleman for allowing an intervention. Is he aware that we were told in the Treasury Committee that the UK could have adopted the French customs system, which was up and running before ours? Ours is not ready, as the Business, Energy and Industrial Strategy Committee heard yesterday. Technological solutions exist, but they do not exist in the UK, and we do not have them up and running to get this moving by the turn of the year.

[Andrew Griffith]

I beg to differ with the hon. Lady. There will be different systems for different territories, but on the business side of things there is already sophisticated tracking of stock, sales and data, which can be used to feed into accounting systems.

What I really want to do is to celebrate—I hope that those on both sides of the House can do that—the absolute game-changer that is contained within clause 7 to crack down on the leakage of the important tax revenues that fund our valued public services, and, most importantly, to create a level playing field for the nation’s small and online retailers. That has needed to be addressed for far too long. I welcome the Minister to his place and what clause 7 will do for the enterprising small businesses of our nation.

Taxation (Post-transition Period) (Ways and Means)

Alison Thewliss Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure, I guess, to follow the hon. Member for Stone (Sir William Cash). He was talking about 1688; I think we travelled there in real time, but I thank him very much for the comments that he made.

This time last year, we were all in the throes of a slightly surreal Christmas general election, pounding the streets and chapping the doors in the freezing cold, listening carefully to the concerns of our constituents. My constituents were deeply concerned about the state the UK was in, and they remain concerned today.

It is difficult to believe that we are a full year on since the Conservative party won a majority in this place with promises of a Brexit deal that was “oven ready”. I say it is difficult to believe because we are now just a couple of weeks from the end of the transition period and there still is not anything of substance in the oven. I am not even convinced, actually, that the Government have an oven. The only thing the Prime Minister has driven a bulldozer through lately is his own reputation, treating these negotiations as a game and continuing to pursue a no-deal Brexit in the middle of a global pandemic as households and businesses in this country struggle with the second wave of covid-19.

[Anthony Browne]

I wonder whether the hon. Member would like to join me in making it clear to the British public that the phrase “oven ready” was used about the withdrawal agreement, which we did indeed vote into law one week after the general election, not about the trade deal. The Prime Minister never described the trade deal as “oven ready”. Would the hon. Member like to join me in making it clear to the British public that that is the case?

[Alison Thewliss]

It is very difficult to understand anything that the Prime Minister says because he swivels around on just about everything that he has ever said. He had two positions on whether we should leave the EU, so who knows whether he has an oven-ready deal, an oven or even a microwave? Who can really tell? It is quite difficult to establish that. Perhaps, Madam Deputy Speaker, we could have a TV mounted in the Chamber somewhere showing BBC live news so that we can keep track of what is happening in the negotiations, as the new Brexit countdown calculator they have in the corner ticks away.

It is no secret that these negotiations have been difficult and that the UK Government have not helped themselves as we have gone through them. The UK’s leaving the EU, because of the attitude that the UK has taken, was always going to be the messiest of messy divorces, but the Government have done absolutely no favours in the way they have approached things.

The hon. Member for Stone talked for 21 minutes, I think, about things that he could not see in terms of the Bill that is supposed to be being brought forward tomorrow. The Minister said from the Dispatch Box that he was no better sighted on where things are at with the negotiations than the hon. Member for Stone, who also regards this whole situation as extraordinary. The Minister says that this is going to be debated in the normal way, but there is nothing normal about this situation here today. We go to the Public Bill Office and ask it for advice on what is in the Bill and it does not know; we ask the Library what is in the Bill and it does not know. None of this is their fault; it is the Government’s fault that we do not know what is in this Bill. It is an absolute farce.

These six resolutions and this phantom Bill are a prime example of the procedural chaos that has dominated the Government’s handling of Brexit. Before the taxation Bill has even been published, the Chancellor of the Duchy of Lancaster says he

“will keep under review the content”

relating to the Northern Ireland protocol. Yesterday, a statement from 10 Downing Street stated:

“Good progress continues to be made regarding the decision as to which goods are ‘at risk’ of entering the EU market. Talks continue this afternoon. In the light of those discussions, the government will keep under review the content of the forthcoming Taxation Bill.”

At 1.16 this afternoon, we had a tweet from Maroš Šefčovič, one of the negotiators, but we still do not know the implications of today’s announcement and it is very difficult to see exactly what is going to happen. The joint statement talks about determining the criteria for goods to be considered not “at risk” of entering the EU, but we do not know what that means. It mentions an agreement in principle, but the Government have not been very principled in the way they have approached anything. How the EU can trust them I do not know.

[Kevin Hollinrake]

Every business person would ideally like to have seen the deal done and dusted some months before, but on the basis that the European Union made a commitment to an ambitious free trade agreement, are there no words of criticism that the hon. Lady is willing to use regarding its part in these negotiations that are taking so long?

[Alison Thewliss]

I think the EU has been more than patient for some time, to try to get some kind of agreement and something sorted out. The UK Government have held two general elections in that time, and we have had several different Prime Ministers. The Government have been an absolute shambles from start to end, and that is where we are today.

[Alan Brown]

Despite the valiant efforts of the hon. Member for Thirsk and Malton (Kevin Hollinrake), is it not the case that if the EU was not so patient, we would already have suffered a no-deal crash out months ago, perhaps even a year ago?

[Alison Thewliss]

The EU has done everything it can because it knows it is everybody’s interest to have a deal.

[John Redwood]

Will the hon. Lady give way?

[Alison Thewliss]

I will make some progress and bring the right hon. Gentleman in later on. It is interesting that Tony Connelly from RTE said that the EU nations are watching closely to ensure that the relevant clauses are effectively withdrawn from the Bill. If I were them, I would be looking very dubiously at the UK Government on that issue, because we do not know what is going to happen.

It is quite surreal to prepare for a Bill that we have not yet seen, and from which clauses that do not yet exist could still be removed or added, after being rubber-stamped by the House. The six ways and means resolutions on one side of A4 paper represent a significant volume of very detailed VAT resolutions. Resolution 6 alone refers to a Commission decision that runs to some 39 pages on the treatment of CFC group financing exemptions to state aid, and there is still no detail on specifically how the Government wish to amend the substantial pieces of taxation legislation.

We would have advance notice of a Finance Bill, for example. We would have Second Reading, Committee, and Report over an extended period. That time would allow evidence and engagement with stakeholders, but that is not so with these resolutions. To take an example, the Finance Bill earlier this year contained a solid five and a half pages on the detail of call-off stock arrangements. We debated them in the Bill Committee at great length, and it was tremendously exciting.

[John Redwood]

Will the hon. Lady give way?

[Alison Thewliss]

If the right hon. Gentleman can tell me something about call-off stock arrangements and what the Government are proposing, I will let him in.

[John Redwood]

I would like to know why the hon. Lady supports the EU position on everything. On the question of fish, does she support the general EU smash-and-grab raid for most of the fish, or does she prefer the French version, which is to take practically the whole lot?

[Alison Thewliss]

I would prefer it if the Government would listen to the concerns of west coast fisheries in Scotland that do not want their fish to die and rot in lorries at Dover because the Government have not sorted out the trading customs.

Members of the House are expected to scrutinise the new tax regime in a fast-tracked timetable with no time for debate or consultation with businesses. There are a host of details in the VAT resolutions. I went through them this morning. I copied them and pasted them, and took them from the VAT regulations that currently exist. That runs to some 20 pages of detail on those VAT resolutions. [Interruption.] I can see the hon. Member for Thirsk and Malton waiting for me to read through those 20 pages, but I am not going to do that. I will send him a copy if he would like to read it over later. We will certainly be further forward than we are with the Government concluding anything.

There is a lot of detail in the resolutions and we need to know what exactly is going to happen with them.  There are issues on penalties relating to VAT in the Taxation (Cross-border Trade) Act 2018. There are issues to do with the importing of goods as well, and how that is going to work. The guidance on the resolution

“Value added tax (online sales by overseas persons and low value importations)

That provision may be made for the purposes of value added tax in cases involving—

(a) supplies of goods by persons established outside the United Kingdom that are facilitated by online marketplaces, or

(b) the importation into the United Kingdom of goods of a low value.”

runs to 11 pages on the UK Government’s website. There are 11 pages of detail, but we do not know what the Government are proposing to change here. We do not know what the Government are proposing to do here and that is very unfortunate. The issue really does follow on from that: we do not know what the Government are going to do and we do not have adequate time to scrutinise all the papers and see what is in them. We do not know whether the Government’s drafting will actually work, when it has been done in such haste.

[Patrick Grady]

My hon. Friend is providing a ray of sunshine in between the dark clouds of the Maastricht rebels who are featuring so heavily on today’s call list. Is it not the case that it is not just us and the Opposition who do not know what is going on? Clearly, the Government do not know what is going on either. The Bill has not been published because there is a massive copy-and-paste job going on somewhere in Her Majesty’s Treasury right now, so that they can have it ready. That is probably why we are going to be speaking until 7 pm—they will need that length of time to get the thing finalised, printed and in the Vote Office.

[Alison Thewliss]

My hon. Friend is absolutely right. Perhaps I should send the Minister my copy-and-paste job from earlier and that would help him out.

But this really matters. The right hon. Member for East Antrim (Sammy Wilson) talked earlier about people, supermarkets, food arriving and places, and what the impact will be. The Road Haulage Association’s director, Martin Reid, has warned:

“Regardless of whether there is a deal or not, there will still be customs requirements and it’s the customs requirements that will cause the delays. Those delays could run on for at least the first quarter”

of next year. The post-transition situation will be chaotic and that will be devastating for business, particularly the way the Government are going about it. Further to that, speaking to The Press and Journal, Mr Reid said the fact that issues still remain to be resolved is shocking:

“The hauliers’ handbook that they produced contains links that take you nowhere, so we’re nowhere near the level of information that is required basically. For goods moving to Ireland, we are still not 100% sure what it’s going to look like; as for moving through the short straits, we still have a great deal of concern as to the government’s capability either to have the right people in place.”

Nothing the Minister has said this afternoon—or indeed, the scuttling that is going on, on the Government Front Bench just now—gives us any reassurance as to what is going to happen.

Business bodies in Northern Ireland’s legislative committees have expressed concern about potential compliance costs for the future operation of VAT and excise, and nobody knows what it is going to look like. Businesses and farmers in Northern Ireland have been clear that they are not ready for a no-deal scenario. They have said it will place them under unbearable and unnecessary strain. The UK Government are providing no technical detail and very little guidance to those businesses. As my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) pointed out so well earlier on, the IT system to support all of that just is not there. We heard similar evidence to the Treasury Committee. Businesses have begged the UK Government to reach an agreement, but the UK Government have indulged in bad faith negotiating at every turn.

[Sir William Cash]

On the question of bad faith, I do not know whether the hon. Lady heard what I said yesterday, but I will say this: there has never been a more egregious example of bad faith than the manner in which the EU sought to bounce the Government in the middle, and indeed at the end, of the negotiations. It is quite outrageous and in itself warrants the use of article 46, which is there to terminate the agreement if the Government cannot get what they need to preserve our sovereignty.

[Alison Thewliss]

I do not really agree with the point the hon. Gentleman makes. That probably will not surprise him. The difficulty with all of this is that the UK has never really known what it wanted.

[Sir William Cash]

Sovereignty.

[Alison Thewliss]

The hon. Gentleman says sovereignty. I am not sure he really understands that either.

The UK Government have not known what they wanted from this situation from the start. I commend the Brexiteers on the Conservative Benches. They have taken this as far as it can go and they have got what they wanted. Perhaps they knew what they wanted, but the Government have not had a clue. That has been clear all the way through and that is part of the reason we are in the difficulties we are in.

The resolutions in front of us do not represent clever negotiating tactics by the UK Government. On the Opposition Benches, on the Government Benches and in Brussels, everyone can see quite plainly the Government’s recklessness in this scenario. At every stage of this laborious and unnecessary process, they have sought to undermine trust in proceedings. Any remaining shreds of goodwill that the UK Government have internationally are in absolute tatters. The UK Government are at the wind-up at a time when we no longer have time to waste. An EU diplomat quoted in the Financial Times this morning said that the moves of the UK Government amounted to the UK

“trying to use rogue behaviour as leverage”.

Presumably the UK Government have caved today in taking the clauses out of the Bill, but we have to ask why they were there in the first place. How does it help us to say that we will break international law? It is a pretty basic principle that the Government have breached. Presumably, if the negotiations take a further slide backwards, the clauses can be put back in again. With apologies to Mark Durkan, because it is the kind of thing he would have said, it is hokey-cokey legislation.

It is perhaps not a surprise to those of us in Scotland that the Prime Minister and this Tory Government would sell a devolved nation down the river in order to appease those on the more extreme fringes of their party—

[Jesse Norman]

Did the hon. Lady say that the Government had sold someone down the river?

[Alison Thewliss]

Devolution. If the Minister was paying attention, I said devolution has been sold down the river—

[Jesse Norman]

That is a most inappropriate term to use, if I may say so.

[Alison Thewliss]

But devolution has been fundamentally undermined—perhaps the right hon. Gentleman will like that phrasing better. Devolution has been fundamentally undermined by the actions of the Government in the internal market Bill yesterday, ripping up the very principles by which devolution was established 20 years ago. Scotland did not vote for any of this—not in the EU referendum, not in either of the snap general elections this Government have called, and not in the European elections—not once, but we are being dragged off the cliff edge anyway.

Even before the pandemic, modelling suggested that a no deal would decrease Scotland’s GDP by 6.1%, considerably more than even the 2008 crash. The Office for Budget Responsibility estimates that a no deal Brexit on 1 January would inflict a cost on the UK economy of about £40 billion, and increase unemployment by 300,000 next year. All this while the UK economy is already among the worst performing in the OECD due to the UK Government’s shambolic handling of covid.

Jim Harra, the head of HMRC, confirmed at the Treasury Committee yesterday that doing the paperwork alone for this will cost business an eye-watering £7.5 billion a year. That is £7.5 billion that businesses will not have to spend on improving their businesses, increasing staff wages or investing in productivity. There will be 265 million customs forms after Brexit, compared with 54 million now. What a complete and utter waste of everyone’s time and money, and nobody put that on the side of a bus.

Not content with inflicting damage on our economy, these resolutions and the behaviour of the UK Government throughout this process permanently damage and erode trust in the devolution settlement. We are seeing a shameless power grab of state aid powers that should have been devolved, quite rightly, to the Scottish Parliament.

There is still time to pull back from the no deal cliff edge. The choice is entirely the Prime Minister’s to make. It is as clear as day that Westminster is acting against Scotland’s interests. It is little wonder to any of us on these Benches that the majority of Scots now support independence. One of those people who supported Scottish independence relentlessly was Craig Munro, who passed away just recently, and our thoughts are with his sister Gail and his son Sam. They will be devastated that he will not be here to see independence when it comes, because it is there to be won for all of us. More and more people are seeing the urgent need for independence to protect Scotland’s place in Europe and all the powers that we have come to enjoy through devolution. Scotland will complete that journey. The UK Government’s behaviour through all of this is only hastening that journey’s end.

--- Later in debate ---

[John Redwood]

The answer is that I campaigned for this Parliament to take control and use it in the interests of the people, which is why I am making the speech that I am making. Why does the hon. Gentleman not listen to it instead of planning an intervention for a speech I am not making? I am urging the Government to take back control and use it in the way that the public would like to see them use it.

I must take up the point of sovereignty. My hon. Friend the Member for Stone (Sir William Cash) is quite right to go back to that. The simple truth about Brexit is that Brexit voters knew exactly what we were voting for. We understood the slogan “Take back control”, and we think control—the right of self-government, the right to trust people in these Houses of Parliament to make decisions for us or the right to throw them out if they are useless—is fundamental to our freedoms and living in a democracy. You do not bargain those away in some kind of dispute about tariffs. You do not argue about those in the context of making compromises.

This is the fundamental truth of Brexit. Like practically every other country in the world that is not a member of the EU, we just want to be free to make those decisions and laws that we can make and have representative institutions—a great Parliament—in order to do that. We clearly need to train some of the parliamentarians in the idea that we can make better laws here than people can make for us abroad and that we can modify European laws that we currently have so that they work in our interests better.

[Alison Thewliss]

Does making better laws not start with letting MPs see a Bill before it exists?

[John Redwood]

I do not disagree with the hon. Lady. I have said that I want to debate a real Bill. I am giving ideas to the Minister because I do not think what he has in mind for this Bill is going to quite suit me. I want to pep it up. I want to make it more exciting so that we can go out to the public and say, “This is the party that is going to level up. This is the party that knows how to recover an economy that has been damaged by covid”, and that requires lower taxes and different taxes and requires that we use the powers that only the House of Commons has. The House of Lords has very limited abilities to intervene, and on this occasion I am very pleased about that, because it nearly always wants to take the European answer, and the European answer is the high unemployment answer, the high taxation answer and the very complicated taxation answer.

VAT is an extremely complicated tax. We had to adopt its complications and we are now trying to add to those complications to try to avoid items slipping through. We are trying in these proposals to deal with small transactions that sometimes escape the net. They try to find ways of making online organisations, for example, responsible for levying tax between two people trading with each other.

--- Later in debate ---

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I add my comments to those of my hon. Friend the Member for West Bromwich West (Shaun Bailey), with his optimistic tone. I, too, am optimistic about the future; despite the fact that I have never looked at Brexit through rose-tinted spectacles, I have never argued that this country cannot succeed economically outside the European Union. I welcome some of the measures in this proposed Bill, particularly on creating a fairer and more level playing field for our small and medium-sized enterprises—I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Before talking about that, however, I would like to talk about the national interest. I think it was Churchill who said that in our parliamentary duties we should put country first, constituency second and party third, yet all I have heard from the Opposition and the SNP today is putting their party interests first.

[Alison Thewliss]

What the hon. Gentleman is missing is that we have a different definition of nation, and our interpretation of Scotland’s national interest is quite different from the UK’s national interest that he sees.

--- Later in debate ---

[Kevin Hollinrake]

Of course, the European Union is negotiating in its interests and is obviously trying to protect its interests in that negotiation, but one thing the European Union has done much better than we have on this side of the channel is negotiate with one voice. In this place, we have not—we absolutely have not—and that has undermined the UK’s negotiating position. If the Opposition think that the European Union does not hear what this place says, that is clearly a naive position. If the Opposition think that the European Union does not hear what this place says, that is clearly a naive position. I would argue, at this very late stage, that we work together, cross-party, to try to bring about a situation where we can get the free trade agreement that we all know is possible and can be delivered within the timescale we have left.

[Alison Thewliss]

The hon. Gentleman is making an interesting point about working cross-party. We entered into this in the spirit of cross-party working. The Scottish Government put forward constructive proposals on cross-party working that the UK Government rejected. For a long time during this process, it has been his own party that has been undermining his Government’s negotiating position. Does he not accept that that has been part of the problem?

[Kevin Hollinrake]

No, I do not. The UK Government have to take a number of matters into consideration. They have a collective position. Clearly, we cannot always get exactly what we want in terms of negotiation. My point is that we could have done better in these negotiations and there could have been less drama around them. The fact that these negotiations are concluding so close to the deadline for businesses has been brought about partly because of the divided nature of this Parliament. The hon. Lady and the Opposition should take responsibility for that position.

My point about a fair and level playing field is about the fact that many of our small businesses in the UK compete with online platforms—online marketplaces, as they are called—such as Amazon and eBay. How can it be right that for so long many of those small businesses have been competing at a 20% disadvantage? Many retailers selling into the UK are not paying VAT on those sales. I am pleased that the Government have acted on this and closed the loophole. They have closed a number of loopholes in recent years through measures such as the digital services tax and the diverted profits tax. This creates the fairer and more level playing field for the rest that I very much welcome. There is one more loophole that we could close, not in this legislation, but in the Financial Services Bill, which is going through Parliament at the same time.

Country-by-country reporting would also have a profound effect in closing loopholes that some companies are using to divert profits out of this country.

Financial Services Bill (Eleventh sitting)

Alison Thewliss Excerpts

Committee stage & Committee Debate: 11th sitting: House of Commons
Thursday 3rd December 2020 Public Bill Committees

How will that be received by the sector? We heard in oral evidence that such a strategy would be welcomed by the sector, and we might even call this the TheCityUK new clause, because it has called for such a such a strategy. The new clause could link together all these things—the Bill, the future regulatory framework, the pipeline of legislation—with some of the issues that I outlined. We all want the UK to succeed in this sector and to succeed in the future. We have done this elsewhere through the Automotive Council UK, and there is every reason why we should want to do this for our world-leading financial services industry.

[Alison Thewliss (Glasgow Central) (SNP)]

I very much support what the right hon. Member for Wolverhampton South East says. It is important that we look at this in the round, and particularly at the newer technologies coming into force that we will need as part of our economy going forward.

[John Glen]

I very much appreciate the sentiment behind the new clause. The right hon. Member for Wolverhampton South East set out all the different areas of focus involved in financial services, taking me through all our different calls for evidence and ongoing pieces of work—there are a number of others, too. However, the new clause is unnecessary.

Only a few weeks ago, the Chancellor made a statement to Parliament on the future of the UK financial services sector. Indeed, Miles Celic from TheCityUK described it as an “ambitious vision” for financial services. Across the range of different elements that the right hon. Gentleman set out, a lot of activity is ongoing. Indeed, a number of consultations are out at the moment. As the Chancellor stated, we are at the start of a new chapter for the industry, and our having an open, green and technologically advanced industry that serves the consumers, communities and citizens of this country and builds on our existing strengths, including our world-leading regulatory system and standards, was the essence of that vision. The UK will remain the most open and competitive place for financial services in the world by prioritising stability, openness and transparency.

The Chancellor set out new proposals to extend our leadership in green finance, including by taking the key step of introducing mandatory requirements for firms to disclose their climate-related risks within five years, making the UK the first country to go beyond the “comply or explain” principle. He also announced plans to implement a green taxonomy and, subject to market conditions, to issue the UK’s first ever sovereign green bond next year. He set out his intention that the UK will remain at the forefront of technological innovation, to provide better outcomes for consumers and businesses.

The UK’s position as a global and open financial services centre will be underpinned by a first-class regulatory system that works for UK markets. The Government already have several reviews under way, including the future regulatory framework review and the call for evidence on Solvency II, to highlight two. We also have the FinTech review, which will report early in the new year. That is the Government’s strategy for financial services now that we have left the European Union.

I hope that I could not be accused, as the City Minister, of being unwilling to come before the House to provide updates on the Government’s work relating to financial services, whether in the Chamber, Select Committees—I think I have made about 12 appearances now—or in Westminster Hall, or of doing that infrequently. The Chancellor and I will continue to provide updates at the appropriate times in the normal way.

Having considered the issue carefully, I ask the right hon. Gentleman to withdraw the new clause.

--- Later in debate ---

[Mr McFadden]

I beg to move, That the clause be read a Second time.

This new clause is directed at reducing harm to heavily indebted people by clamping down on imposter or clone websites that might direct people away from legitimate avenues of advice without their knowledge. It was suggested to us by the charity StepChange, which reports a serious, large-scale and ongoing problem with imposter or clone sites posing either as StepChange itself or as another reputable charity and preying on vulnerable people in debt. In fact, StepChange estimates that as many as one in 10 people searching for the organisation online are inadvertently led to someone else.

This is not just one of the traditional issues of having time-consuming and frustrating discussions with web providers to get them to take some responsibility for what is on their platforms; it is also a matter of regulation. The new clause proposes to close a regulatory loophole: the activity of introducing an individual to a credit provider is regulated by the FCA, but the activity of introducing an individual to a debt advice or debt solution service is not. That loophole represents a gap in the picture, and the new clause seeks to close that gap by bringing lead generators for debt advice and debt solution services clearly within the FCA’s remit.

The new clause is, perhaps, about quality control. It would protect consumers from clone sites and from unscrupulous operators who would prey on their financial problems. I argue that that becomes all the more important in the context of clause 32 and the establishment of statutory debt repayment plans, because the gateway to them will be through seeking advice from reputable debt advice and debt solution services. It would be entirely with the grain of the Bill, and the Government’s policy intent, to ensure that that gateway is properly regulated by the FCA.

The Minister has been consistent in resisting every amendment and new clause over the past couple of weeks, and I appreciate that he has probably come armed with advice not to accept any amendments, even if they look okay, because there may be a drafting issue or something. However, if there is some reason in his folder why he cannot accept this new clause today or—hopefully this is not the case—if the optics of doing so, because it has been suggested by the Opposition, are somehow too difficult to contemplate, will he at least take the matter away and consider introducing a provision either on Report or at a further stage in the Bill’s passage?

It is very much in the interests of the statutory debt repayment plans, for which he feels—I credit him for this—a big degree of personal ownership, that this regulatory loophole is closed, and that we do what we can to prevent people seeking that kind of help from being led away by unscrupulous operators on the internet. Instead, we must ensure that they are channelled to reputable advice organisations and solution providers—be it StepChange or somewhere else.

[Alison Thewliss]

I rise to support the new clause. It is typical of the eagle-eyed way that the right hon. Gentleman has approached this Bill that he found this particular loophole. I am not sure which of his pots he thinks the Government might think it falls into, but it is a sensible, minor change. The Government would do well to take it on now or bring it back at a later stage. We want to protect people who have fallen into that situation in every way we can. We all know that there are vultures on the internet who want to cut a share of that and exploit people. The new clause is a sensible and reasonable way of addressing that and I commend it to the Minister.

[John Glen]

I take this issue very seriously. I recognise the work of StepChange and I note the letter from Marlene Shiels, chief executive officer of the Capital Credit Union and her support for this. She makes a significant contribution to the Financial Inclusion Policy Forum that I chaired just last week.

The Government are taking strong steps to ensure that lead generators do not cause consumer harm.  As the right hon. Member for Wolverhampton South East said, lead generators identify consumers in problem debt and refer them to debt advice firms and to insolvency practitioners. That can help consumers access appropriate debt solutions and support their recovery on to a stable financial footing. However, I readily recognise the risk that unscrupulous lead generators could act contrary to their clients’ interests. To mitigate that risk, debt advice firms and insolvency practitioners are already required to ensure that any lead generators they use are compliant with applicable rules to prevent consumer harm in the market.  

Under Financial Conduct Authority rules, that includes ensuring that lead generators do not imitate charities or deliver unregulated debt advice, and that they are transparent with clients about their commercial interests. As such, the FCA, as the regulator of debt advice firms—and the Insolvency Service, as oversight regulator of insolvency practitioners—already influences lead generators’ impacts on consumers.

New clause 5 would not materially improve the FCA’s influence over lead generators. Its scope would be incomplete, applying only in respect of lead generators’ referrals to debt advice firms, not to insolvency practitioners. The Government have already issued a call for evidence on whether changes are needed to the regulatory framework for the insolvency profession and will publish a response next year. In the light of our recognition that the matter needs a focus and that work is being done on a response, I ask the right hon. Gentleman to withdraw the motion.

--- Later in debate ---

Even if the Minister does not accept these new clauses, I hope he will explain how he will make sure that consumers get a better deal from the FCA, because I really do not believe that he can defend what happened with the payday lending industry. I know that he is looking at the buy now, pay later industry and the guarantor loans industry, and that he has looked at the issue of consumer credit data on credit cards. Above all, I know that in the current environment somebody will visit his constituency surgery soon—as happened to me, which is why I got involved in all this in the first place—holding letters from the Financial Ombudsman Service and red letter bills, with fear in their eyes because they are in a hole they think it is impossible to get out of, asking who can help them. The answer should have been the FCA. It was not over the past seven years, but if we get this Bill right, it can be for the next seven.

[Alison Thewliss]

I am very pleased to follow the hon. Member for Walthamstow, because she has been a force of nature on this issue, and I do not disagree with a single word she has said about high-cost credit. The Government really should be listening to her, given her expertise.

I want to speak to new clauses 38 to 42, which stand in my name and that of my hon. Friend the Member for Aberdeen South and focus on duty of care. I pay tribute to Ceri Finnegan from Macmillan Cancer Support, who got in touch when the Bill received its Second Reading and suggested a duty of care. I also pay tribute to the people on the ground in Glasgow who are doing amazing work through Glasgow libraries to support those with cancer and their families, intervening and supporting them when they face financial issues, so that they do not end up getting into greater debt and greater financial difficulties. That prevention aspect is incredibly important.

It is clear to me and to many in the sector that the current situation with the FCA is not working. The StepChange briefing states:

“It is notable that after 20 years of FSMA, the FCA is still talking about culture and has recently consulted on substantial new guidance to ensure firms treat their customers who are particularly vulnerable to detriment fairly. We strongly support this guidance but note that the FCA states that ‘the guidance itself is not legally binding’.”

The fact that it is not legally binding is the problem here, because if no one is being forced to do these things, they are not going to do them in a lot of cases. Some will, but that cannot be relied on, and customers cannot rely on that either. It could well be that one financial services organisation treats people fairly and another one does not, which, again, causes greater stress and confusion.

Financial Services Bill (Twelfth sitting)

Alison Thewliss Excerpts

Committee stage & Committee Debate: 12th sitting: House of Commons
Thursday 3rd December 2020 Public Bill Committees

It is not about whether BNPL bears interest. One of the reasons such companies are not regulated right now is that they do not, in theory, charge interest. They make their money from retailers such as ASOS, Marks and Spencer, H&M and so on. If any Members present are not fully listening and are instead on their phones doing some internet shopping, they will see that buy now, pay later is offered as an option in the drop-down window on many different sites. It is very easy to think, “Well, that makes payments more affordable.” That is particularly an issue for younger consumers. Some 54% of 18 to 24-year-olds report using BNPL in the pandemic, and they are also the group most likely to be made redundant or to fail to find a new job.

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Lady is making a very good point. Is she aware that the Young Women’s Trust has suggested that 1.5 million young women have lost income during the pandemic?

[Stella Creasy]

Absolutely. We know who such companies are targeting, and they are doing so deliberately. I hate to say this, as I do want to win over the Committee, but we might not be their target audience at this point in our lives, because we might not be actively reading the social influencer media posts. I might be completely wrong—I am sure some Government Members are regularly on their Instagram accounts looking at posts by ASOS.

Some 20% of those young people say they have missed a payment in the last year—the figure has doubled in the last year—because they thought that a purchase would cost a certain amount and that they had an income, but that income has gone. The companies will say that they are very good to their customers because they do not lend more than people need and they do not charge interest—the companies’ interest is in people paying back the money—but those companies go silent on what they do when people do not pay back. What happens to people’s credit references? How do they chase money? Do they use debt collection agencies?

Those companies are growing rapidly, just as the payday lending industry did. We watched that happen and, in that Cassandra-like way, all tried to warn of it, but it took too long for us to act. In 2019 Klarna was boasting that it had signed a partnership with a new merchant every eight minutes in this country. By the end of 2019, 6 million people had used its product, and it said that 55,000 were using it weekly. Imagine what it is like now, with people having been stuck at home and stuck on their phones.

The Money and Mental Health Policy Institute found that more than 3 million people with mental health problems have found it harder during the pandemic to control their online spending, and two in five said the BNPL industry has been “harder to resist”. Because it is not regulated, it does not have to follow any of the rules we might want to point to that protect consumers. That is why we see all those adverts saying, “No interest, no fees—don’t worry about it.” The industry does not have to provide the normal financial information we see in other forms of credit because it is not regulated in that way.

Just as with the payday loan industry, as soon as we started talking about these companies, along came the offers of dinners and discussions and talks, where the industry says it is in fact a misunderstood new technology. Those of us who are not regularly on the internet have obviously missed them.

--- Later in debate ---

[Stephen Flynn]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 29

Review of Impact of Scottish National Investment Bank Powers

“(1) The Chancellor of the Exchequer must review the effect of the use of the powers in this Act in Scotland and lay a report of that review before the House of Commons within six months of the date on which this Act receives Royal Assent.

(2) A review under this section must consider the effects of the changes on—

(a) business investment,

(b) employment,

(c) productivity,

(d) inflation,

(e) financial stability, and

(f) financial liquidity.

(3) The review must also estimate the effects on the changes in the event of each of the following—

(a) the Scottish Government is given no new financial powers with respect to carrying over reserves between financial years,

(b) the Scottish Government is able to carry over greater reserves between financial years for use by the Scottish National Investment Bank.

(4) The review must under subsection 3(b) consider the effect of raising the reserve limit by—

(a) £100 million,

(b) £250 million,

(c) £500 million, and

(d) £1,000 million.” —(Alison Thewliss.)

This new clause requires a review of the impact of providing Scottish Government powers to allow the SNIB to carry over reserves between financial years beyond its current £100m limit.

Brought up, and read the First time.

[Alison Thewliss]

I beg to move, That the Clause be read a Second time.

New clause 29 would require a review of the impact of providing the Scottish Government with powers to allow the Scottish National Investment Bank to carry over reserves between financial years beyond its current £100 million limit. As Members may know, the Scottish National Investment Bank has been firmly established as a public limited company and has a proposed mission to focus the bank’s activities on addressing key challenges and creating inclusive long-term growth, including

“supporting Scotland’s transition to net zero, extending equality of opportunity through improving places, and harnessing innovation to enable Scotland to flourish.

It will provide patient capital—a form of long-term investment—for businesses and projects in Scotland, and catalyse further private sector investment.”

The bank’s first investment, announced the other week, was £12.5 million to the Glasgow-based laser and quantum technology company, M Squared, to support the company’s further growth in Scotland, which speaks to the bank’s proposed core missions.

The Scottish National Investment Bank will help to tackle some of the biggest challenges we face in the years to come, delivering economic, social and environmental returns, but currently there is a slight barrier, in that the Scottish Government can only roll over £100 million of their annual reserves. We are asking for the UK to look at increasing that to allow the Scottish National Investment Bank to get on with the job that it is set up to do.

As the Committee can see, the new clause asks the Government to introduce an impact assessment—because that is what we can do in this Committee; we can ask for reports and impact assessments—looking at increasing the Scottish Government’s reserves by £100 million, £250 million, £500 million or £1 billion for business investment, employment, productivity, inflation, financial stability and financial liquidity. We need the Government to come on board with that and provide some help to us. It is a huge and important project, so much so that the UK Government seem to be copying it by having an investment bank.

We would like to have an infrastructure bank for Scotland that can meet Scotland’s needs and priorities. It is desperately important that we do that. The bank will learn from banks such as KfW in Germany, which was set up after the war by the UK, and then we learned nothing from it ourselves. We want to be able to get on and do this and invest in Scotland’s future, but unfortunately we need the Government’s co-operation at this point to do that.

[John Glen]

The UK Government are committed to supporting investment across the whole of the United Kingdom. Indeed, at the spending review, we confirmed our intention to establish a new infrastructure bank in the UK that will help to support infrastructure projects across the whole of the UK, including in Scotland. I was therefore pleased to see the Scottish Government launch their Scottish National Investment Bank on 23 November.

The new clause seeks to establish a review process for considering whether the Scottish Government’s reserve flexibility should be increased and expanded for use by the Scottish National Investment Bank. We have already agreed significant financial flexibilities with the Scottish Government as part of the Scotland Act 2016 and their fiscal framework, which provide unprecedented policy levers to shape Scotland’s economy, including a £700 million Scottish reserve. The Scottish Government are able to manage the Scottish National Investment Bank through those existing arrangements if they choose to prioritise that.

Furthermore, we have agreed to undertake a review of the Scottish Government’s fiscal framework. That will include an independent report, jointly commissioned with the Scottish Government, next year in 2021, followed by a renegotiation of the fiscal framework in 2022. I therefore think in light of that information that the hon. Member might consider withdrawing the new clause.

[Alison Thewliss]

I am not going to withdraw it. The Minister has an absolute cheek, and he knows it. We were working on the bank for quite some time, and it has opened its doors and is already lending money while the UK Government are still only talking about their bank. Help us do the job and help us make sure that we can make this work for Scotland’s future, because, frankly, we do not trust the UK Government to do that for us, and we have good grounds for that.

When the UK Government invested in things in Scotland before, we ended up with things such as the Skye bridge, for which we were paying well over the odds. When Scotland is able to invest in things, we build bridges such as the Forth replacement crossing—sorry, the Queensferry crossing—which is an excellent bridge for us all to use in the future. I will press the new clause to a vote.

--- Later in debate ---

Brought up, and read the First time.

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss new clause 34—Review of impact of Act on UK meeting UN Sustainable Development Goals—

“The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on the UK meeting the UN Sustainable Development Goals, and lay it before the House of Commons within six months of the day on which this Act receives Royal Assent.”

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on the UK meeting the UN Sustainable Development Goals.

[Alison Thewliss]

I will be brief. It is important that the Government take their obligations under the Paris climate change commitments and the UN sustainable development goals seriously. I did not know when we tabled these new clauses that my son would be studying the sustainable development goals at his school this week. It would be very good if the Government took the sustainable development goals quite as seriously as the primary 6 pupils I know.

[John Glen]

It is clear that this new clause is similar to other amendments. We have discussed the issues in relation to Basel and PRIIPs measures, and new clauses 33 and 34 would mean that they would apply to a Bill as a whole. As I have set out in previous responses, we are committed to meeting international obligations and strongly support the aims of the Paris agreement and the sustainable development goals. That will mean a combined effort across the whole economy, especially with the involvement of financial services. As the Chancellor set out in his statement, they will be at the heart of that effort. We are pursuing world-leading standards, and ahead of COP26 the Prime Minister’s COP26 finance adviser, Mark Carney, will advise the Government on embedding climate considerations into every financial decision.

These new clauses would require the provision of an assessment of the impact of the Bill, specifically on the UK’s ability to meet its commitments to the Paris agreement and sustainable development goals. We published in June 2019 a voluntary national review, setting out in detail our progress towards those goals, and a comprehensive account of the further action to be taken, and we remain committed to supporting the implementation of those goals. We therefore cannot support these new clauses, as we believe that we are held to account through other mechanisms. That is probably all I need to say. I suggest that the clause may be able to be withdrawn on that basis.

[Alison Thewliss]

I am happy to do so. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 35

Money laundering and overseas trustees: review

“(1) The Treasury must, within six months of this Act being passed, prepare, publish and lay before Parliament a report on the effects on money laundering of the provisions in section 31 of this Act.

(2) The report must address—

(a) the anticipated change to the volume of money laundering attributable to the provisions of section 31; and

(b) alleged money laundering involving overseas trusts by the owners and employees of Scottish Limited Partnerships.”—(Alison Thewliss.)

This new clause would require the Treasury to review the effects on money laundering of the provisions in section 31 of this Act, and in particular on the use of overseas trusts for the purposes of money laundering by owners and employees of Scottish Limited Partnerships.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[John Glen]

Further to that point of order, Dr Huq, I thank the right hon. Member for Wolverhampton South East for the courteous and constructive way in which he led the Opposition scrutiny of the Bill. I thank all members of the Committee for their contributions. I looked carefully at all amendments, and I did not categorise them in buckets. I thank you, Dr Huq, and your colleague Philip Davies, and the team of Clerks, as well as my officials from the Treasury, who sit silently at the end and do a great deal to support me and the much wider team back in the Treasury who have helped to prepare the Bill. Clearly, we shall now move on to its further stages, and there is more work to do. I thank my hon. Friend the Member for Macclesfield for his support, in particular, as well as my hon. Friend the Member for Montgomeryshire, who has given me enormous support throughout.

[Alison Thewliss]

Further to that point of order, Dr Huq, I thank you for your time in the Chair, and Philip Davies as well. I want to thank colleagues for their contributions, the Clerks for all their assistance, and the Treasury officials, who were good about meeting us ahead of the proceedings. That was really useful. I thank our team of researchers, Scott Taylor and Linda Nagy, who have been great in providing support to us. I also thank those who sent evidence to the Committee. That was extremely useful for briefings, and we were grateful.

The Minister said earlier that he was not saying no or never; I live in hope that some time he will say mibbes aye. We might get there, yet. I said on Second Reading that we would bring forward constructive amendments and the Government would ignore them, and that turned out to be what happened, but we hope that on Report perhaps some of the good Opposition suggestions, made with the best intentions to make things better for all our constituents, will be taken on board. I thank the Minister for his work on the issue.

[The Chair]

Yes, it has been epic, and we have had the Oscar-type speeches that everyone makes at the end. I am sure that all right hon. and hon. Members were actively engaged in their own way, whether they were trying out the financial products on their screens, or whatever. A few letters are on their way, I believe, from the Minister about some points of detail raised by Members.

Bill, as amended, to be reported.

Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 1st December 2020 Commons Chamber

[Rishi Sunak]

There is no barrier to support for anyone to access any of the various things that we have put in place. I am glad that the hon. Lady mentioned the culture recovery fund. At £1.5 billion, it is something that I do not believe any other country has done at such a scale, coupled to which is our further support for the creative arts and the film and TV production industry, which my right hon. Friend the Financial Secretary to the Treasury will be talking about later. We agree that this is an important sector and we want to ensure that it can get back to work.

[Alison Thewliss (Glasgow Central) (SNP)]

I would never accuse the Chancellor of misleading the House, but he certainly seems to have misled “Good Morning Britain” when he told viewers that he had spoken to, and had back and forth with, representatives of excluded groups. Those groups are clear that he has not. Will he apologise for the oversight and make amends by meeting MPs and representatives of all groups that have been denied financial support?

[Rishi Sunak]

I know that my right hon. Friend the Financial Secretary to the Treasury is meeting with that particular group. In that interview, I was making a general point about the fact that I and my team had met with various representatives of those who are self-employed. It is something that we did right at the beginning of this crisis as we looked to design the self-employed scheme and we have continued to do so throughout.

--- Later in debate ---

[Rishi Sunak]

I am happy to provide that information. The new national infrastructure bank will invest in projects like transport, digital infrastructure and renewable energy through a series of loans, guarantees, equity and other hybrid products. The levelling-up fund will fund what I call the infrastructure of everyday life—projects up to £20 million that can be delivered quickly—make a tangible difference to our constituents and increase the pride we feel in the places we call home.

[Alison Thewliss (Glasgow Central) (SNP)]

Yesterday, Scotland’s First Minister announced her intention to award a £500 thank you payment to Scottish health and social care staff in recognition of all they have done throughout the pandemic. Powers over tax allowances, exemptions and national insurance are reserved to the UK Government, so will the Chancellor do the right thing and ensure that this festive gift of good will is not clawed back by Her Majesty’s Revenue and Customs?

[The Chief Secretary to the Treasury (Steve Barclay)]

As the hon. Lady should know, the income tax on these payments is actually paid to Scotland, not to Westminster. The Scottish Government have the power and the funding to gross up the payment if they wish. The UK Government have provided over £8.2 billion extra funding for the Scottish Government this year to support people, businesses and public services.