Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 9th April 2019 Commons Chamber

[Mel Stride]

As the hon. Gentleman may know, £400 million went into social care just at the last Budget. It is the mission of this Government to get taxes as low as possible so that we have a strong economy. Our record is good: we have about the highest level of employment in this country’s history, more women are in work than at any time in our history, and we have halved unemployment since the mid-1970s. All of that is about creating the wealth and the money to make sure that we can afford the public services that the public expect.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

7. What recent assessment he has made of the effect of his fiscal policy on living standards.

[The Economic Secretary to the Treasury (John Glen)]

Distributional analysis published by the Treasury at Budget 2018 shows that decisions taken by the Government on tax, welfare and spending on public services have benefited households across the income distribution, with the poorest households gaining the most as a percentage of net income.

[Drew Hendry]

The £1.7 billion announced yesterday for universal credit does not even touch the sides of the £12 billion of welfare cuts since 2015, nor does it contain provision to repay the debts that universal credit has caused for local authorities, such as the £2.5 million cost that has been borne by every highland household six years into the roll-out. Should Highland Council send the invoice for that debt for council tax payers directly to the Minister?

[John Glen]

No, it should reflect on the range of measures the Government took at Budget 2018, including the new energy price cap, the doubling of free childcare and the steps we have taken to reduce the burden on households by reducing fuel duty.

IR35 Tax Reforms

Drew Hendry Excerpts

Thursday 4th April 2019 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gapes, even though it looks as though that will be brief. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing the debate. Those of us in the Chamber today share common ground on the problems of IR35. The hon. Gentleman said that we all wanted to see what was due to be collected in taxes being collected to pay for the services from which we all benefit. That is an important point to bear in mind, and we share that view, but that is not to take away from the difficulties that have been presented in the Chamber so eloquently today.

The hon. Gentleman referred to the Taylor review and the need to get the recommendations in play with some speed, and to the conflict between agencies and contractors. He also made a good point, on which we need to reflect, about our future relationship with the EU—the crisis that we currently face over EU membership. That should be food for thought for Ministers in relation to a possible delay to the further roll-out of IR35. The hon. Gentleman talked about his constituent and mentioned that large companies often have sophisticated tax systems and resources that are not available to those who are often affected.

[Sir David Amess in the Chair]

The hon. Member for Brentford and Isleworth (Ruth Cadbury) talked about the unintended consequences of IR35, moving on to the loan charge, which I will touch on in a few moments, and in particular the confusion in the NHS and other public bodies. She mentioned those working flexibly with the NHS to meets its needs. Another point that I agreed with was that the effect of rolling IR35 into Brexit is to increase the unattractiveness of going into such jobs and accelerate chronic staff shortages by trying to force into the PAYE system people who do not want to be in it.

The hon. Member for Clwyd South (Susan Elan Jones) also talked about public sector damage, but she reflected on it in terms of IR35 being applied to the private sector. She expressed concerns that this was the wrong time, given Brexit as well as IR35. She quoted her constituents’ worries about additional costs, shrinking talent pools, legal challenges, investment losses and the expenses incurred. She mentioned the impact on IT businesses specifically, which is to make some unviable or unable to operate at all.

The hon. Member for Glasgow North East (Mr Sweeney) talked about how, when IR35 was introduced, the issues around it became relevant and very present, showing up as a genuine concern for many people. He highlighted the real extra costs to businesses and, as was said earlier, the number of IR35 court cases lost by HMRC. The Government must reflect on that when they look at this. The hon. Gentleman also rightly talked about the lack of advice, warning or assistance from HMRC, moving on to the risk of the penalties incurred and of further extension of IR35 making it even less attractive to do business throughout the UK, especially in current circumstances.

The SNP has expressed concerns about the extension of IR35 since it was proposed in 2017. The UK Government must pay close attention to their own technical review and rule out extending IR35 rules until contractors’ concerns have been addressed. HMRC has been described as using a hammer to crack a nut, but this UK Government have had to be dragged kicking and screaming into tackling major, systematic tax avoidance and evasion. The extension was proposed through the Finance Act 2017, and since then the SNP concern has been about the key effect on contractors supplying public sector bodies. It is only right for such contractors to pay their fair share of tax, but they have been left with an unfairly high level of bureaucracy, making it even more difficult for them to play their flexible role within the economy, as those in the sector have confirmed. Experts have expressed concerns that IR35 does not even achieve its stated aim of equalising tax between those in its scope and employees.

IR35 has also made things more difficult for public sector organisations in rural communities, something I know a lot about, being a highland MP. In rural areas, we often rely on contractors to fill vacancies and to employ key staff—teachers, doctors, nurses and such key people in our communities—so we have great concerns about the further impact on contractors if IR35 is extended for the private sector in April 2020, as proposed.

We have expressed such concerns repeatedly. Indeed, my hon. Friend the Member for Aberdeen North (Kirsty Blackman) first warned the Chancellor about the risks of the expansion of IR35 during the April 2017 finance debate. The UK Government failed to listen then and, when we raised it again, later in 2017 and in 2018. Here we are in 2019, once again asking the Minister to listen. Will this be the day when ears are unblocked? I hope so. Will this be the day when the message gets through? Let us hope that as well. The UK Government should use the 2019 Budget and Finance Bill to address IR35’s negative impact on contracted staff and our public services.

Earlier today, in the main Chamber, the loan charge was being debated. That is distinct from IR35, but some tax advisers have reportedly informed clients that IR35 required them to utilise tax vehicles now being tackled by the loan charge. For tax professionals to advise clients to use such loopholes is plainly wrong. People should of course pay their fair share of tax to support public services, but the UK Government must now pursue organisations that facilitated such loans. For those caught up in loan charge issues, there is great concern that HMRC has failed to work constructively with those seeking a loan charge repayment.

[Ruth Cadbury]

I thank the hon. Gentleman for giving way, and my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) for securing the debate—I am sorry, I should have done that earlier. I was in the loan charge debate, which has been suspended because rain is penetrating the main Chamber, so I came over to this debate. I want to add something now that I said in the other debate. Until the past three or four years, many of the early adopters of the loan charge were doing so with the strong advice of chartered accountants. In my earlier speech, I included at least two pieces of evidence to show that there was no uncertainty about the loan charge—it was legitimate. One was a memo written by an HMRC staff member in 2006 about loan arrangements being legitimate, fine and approved; the other was the Rangers case.

[Ruth Cadbury]

I hope that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) will have a look at some of the contributions made during the other debate. Having done so, he will be able to agree with me that there is a lot of confusion and that people were not behaving illegally.

[Drew Hendry]

I thank the hon. Lady for that intervention, which allows me to agree with her—I too attended the early part of the main Chamber debate before coming here—and to say what a pleasure it is to serve under your chairmanship as well, Sir David. It is a particular problem that the companies that gave such advice are not being pursued, and the Minister must do something. As a final comment on the hon. Lady’s intervention, given the state of politics in this place, it is hardly surprising that the roof has fallen in on Westminster.

Among those caught up in the loan charge issues, there is great and heartfelt concern that HMRC has failed. It has failed to work constructively with those seeking a loan charge repayment plan to pay the taxes demanded. Often, that is bundled up with fines and additional costs. It cannot be right that people are pushed into desperation, or face the threat of losing their family home or of bankruptcy when a more thoughtful, flexible and fair approach should and must be taken. My hon. Friend the Member for Aberdeen North tabled early-day motion 2241, and I encourage Members to sign it. We hope that the UK Government and the Minister will force HMRC to change tack and work constructively with those seeking reasonable treatment of people due to pay fair tax payments for unpaid amounts and to remove the threat of bankruptcy and homelessness.

In conclusion, IR35 is not in a state to be further expanded at the moment. That has been clear throughout, in the comments by Members in this debate and from what we have heard about those who have experienced the effects, such as contractors and the people trying to deal with IR35 in our public services. It cannot be right for the Government to steam ahead without taking that into consideration.

Exiting the European Union (Agriculture)

Drew Hendry Excerpts

Monday 18th March 2019 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

You wait ages for one Drew to come along, Madam Deputy Speaker, and then two come along together.

Agriculture is a critical industry for the rural communities throughout Scotland. It is very important to the people who elected me and many of my colleagues. The regulations are part of a process that takes away rights from people, takes away guarantees and opportunity, takes away power from the Scottish Parliament and puts business and food production at severe risk.

The agriculture sector in Scotland currently depends on 10,000 non-UK migrant workers in the soft fruit and vegetable sectors for the harvest in the summer and autumn, especially in the highlands. Tens of millions of pounds could be lost as there is no certainty about whether the LEADER programme will continue. The programme has provided £50 million from the EU with match funding of £50 million. Nor is there any certainty that funding for agri-environment schemes that support climate-change objectives will be available post-Brexit. That means a potential loss of around £40 million per year.

No rural constituency in Scotland voted for Brexit—none of them voted in favour of leaving the EU—yet Scotland is having to leave with the rest of the UK. All Brexit scenarios are bad for Scotland. We are 11 days away from leaving the EU and we still do not know whether we will leave with no deal or, if there is a deal, how that will affect rural Scotland. All sectors of the Scottish rural economy would be negatively affected by a no-deal Brexit, but the farming and food and drink sectors are particularly exposed. Brexit is bad for our EU friends, neighbours and colleagues.

A no-deal Brexit is projected to result in EU migration falling and potentially turning negative. That would create skills shortages for industries such as agriculture and food processing, which, as I said, rely on EU and seasonal workers. EU citizens who are currently working and living in the rural economy will be able to stay only if they apply for settled status. The Migration Advisory Committee’s proposals and the £30,000 salary requirement for skilled workers would mean that many sectors in Scotland’s rural economy would find it hard to recruit seasonal migrant workers.

Under the common agricultural policy, the EU provides £500 million for Scotland’s rural economy. There have been no guarantees from the UK Government on that funding after 2020. We do not know whether funding will be available to pay farmers and crofters after the scheme year 2021; the UK’s guarantee on agricultural support is to the end of this Parliament only.

The food and drink sector estimates that a no-deal Brexit could lead to a loss of £2 billion-worth of food and drink sales, with implications for the rural communities where many producers are based. We will lose the European Food Safety Authority’s expertise in the risk assessing of marketing applications for genetically modified organisms, unless the UK remains in the European economic area or European Free Trade Association after leaving the EU.

Owing to strict health rules, the EU bans the importation of seed potatoes from third countries with the exception of Switzerland. Therefore, leaving without a deal would close the EU market to around 20,000 to 30,000 tonnes of seed potatoes exported annually, which currently generates around £6 million.

There is no certainty that the alternative markets for this seed, at home and abroad, can be found, resulting potentially in price depression across the whole of the Scottish seed industry. We will no longer be part of the EU’s Community Plant Variety Office and if we leave without a deal, applications for registrations of plant varieties and intellectual property protection will have to be made in both the UK and the EU, resulting in a doubling of registration costs for plant breeders. We will also not have access to the advisory group on food chain and animal and plant health, which covers Scotland’s tree health interests.

The Scottish Government’s position is that the EU organics legislation is devolved and that functions in the proposed regulations could be exercised for a devolved purpose. The provisions in the organics legislation are observing and implementing obligations under the CAP. These should not be transferred solely to the Secretary of State. Food standards, post-Brexit, will be a critical issue and it is crucial that neither food safety nor standards are diluted or diminished. That is a commitment that should be legislated for in the forthcoming Report stage of the Agriculture Bill.

The stockpiling of food in preparation for Brexit demonstrates the drastic effect that the Brexit process has on the most basic of human needs. It is scandalous that this is even having to be considered. The UK Government must now either extend article 50 and set in motion plans to hold a second EU referendum with remain on the ballot paper or revoke article 50. Staying in the EU is the best for all. It is what Scotland and Northern Ireland voted for. It is the only way to protect jobs, living standards, our public services, economy and food standards and supply. Scotland did not vote for Brexit and we should not be dragged out of the EU against our will. The way that Scotland has been treated throughout means that the case for Scottish independence has never been stronger.

Draft Transparency of Securities Financing Transactions and of Reuse (Amendment) (EU Exit) Regulations 2019

Drew Hendry Excerpts

Wednesday 27th February 2019 General Committees

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Davies. This is yet another part of a poor attempt to patch up the damage to the financial services industry caused by a Brexit that my constituents, and indeed all of Scotland, did not vote for. It is just another piece of Brexit red tape. Any version of Brexit is bad for Scotland, which voted overwhelmingly to remain.

Financial services firms are already voting with their wallets and have moved a trillion dollars from the UK since the 2016 Brexit referendum. Ten years after the financial crash, in which securities played a major role, our financial services sector needs meaningful reform, not new problems stemming from Brexit. Instead of planning to minimise the damage, we should be using our time to plan a successful future inside the EU. This SI does nothing to protect our economy from Brexit and we cannot accept the UK Government’s attempt to run down the clock in an attempt to force their MPs to back Brexit motions. The UK Government must instead extend article 50.

Leaving the EU: Economic Impact of Proposed Deal

Drew Hendry Excerpts

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

I have been asked this question a couple of times, and the reality is that it is entirely hypothetical. To end up staying within the European Union would be to fly in the face of the result of the June 2016 referendum —the referendum had a higher turnout than any other electoral event in our country’s history—and this Government are going to respect the outcome of that referendum.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

This urgent question was aimed at the Prime Minister, so I can only assume that the Minister is undergoing an audition as the future leader of the Conservative party. On that basis, if he were Prime Minister, would he take cognisance of the analysis published by the London School of Economics that shows a 5.5% hit on GDP due to the incumbent’s plan, or would he, like her, simply ignore it?

[Mel Stride]

What we must do is to make sure that we conclude a good deal for our country; what we must do is to make sure that we avoid a no-deal scenario; and what we must do is to make sure that we respect the result of the June 2016 referendum. That is the mission of this country and of this Government. We are negotiating the final elements of that, and as, I hope, the Prime Minister comes back with changes to that deal in relation to the backstop, if we are to do the right thing and the best thing for the whole United Kingdom, we should support it.

Communities: Charities and Volunteers

Drew Hendry Excerpts

Wednesday 13th February 2019 Commons Chamber

[Martin Docherty-Hughes]

I will come on to answer that question at the end of my contribution. There is a big discussion to be had about the legislative process of the UK Government and a distinct understanding of what volunteering actually means, but I will come back to the hon. Gentleman’s point further on in the debate because he raises a very important point about the difference between volunteering and being told to do something. Volunteering is a free-will activity.

It is essential to understand that, as in England, Wales and Northern Ireland—although I do not see any Members from Northern Ireland in the Chamber—the vast majority of voluntary organisations are small, with no employees; they are founded, organised and able to connect communities solely through volunteers. As a sector, both charities and the many unincorporated voluntary organisations play a central role in the delivery of people-centred services and in ensuring that communities, through a whole host of avenues, are able to inform and shape our nations. We have already heard about how the sector informs participation and democracy.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend is making a good point about the role of voluntary organisations. In the past year, two new food banks have opened in Inverness to cope with the demand caused by the failures of universal credit. Those volunteers are working not just there, but in initiatives such as the hungry lunches project at Inverness Cathedral and MFR Cash for Kids, which provides help and advice. Does my hon. Friend agree that they are not just providing help for people, but actually saving them?

[Martin Docherty-Hughes]

I could not disagree, and that is replicated not just in Scotland, but across the whole UK.

Equitable Life

Drew Hendry Excerpts

Thursday 31st January 2019 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Harrow East (Bob Blackman) for setting the scene, and the hon. Member for Leeds North East (Fabian Hamilton), who is not in his place, for his help in bringing this matter to the House for consideration. It is always a pleasure to follow the hon. Member for Torbay (Kevin Foster). He usually sweeps up on the Government side of the Chamber and I often do the same on the Opposition side, but we often agree. And here we are again agreeing on an issue that he is interested in as the Member for Torbay, and that I am interested in as the Member for Strangford.

We all know the background to this story because we have spoken about it many times, but that does not take away one bit from the fact that, as the hon. Member for Harrow East said, it is as shocking today as it was back then. Like other hon. Members, I believe that we should honour the obligation and the pledge. The hon. Gentleman said that very clearly in his introduction. Well, I will tell the House something: I am also here to ask my Minister, of my Government, to honour that pledge. We look to the Minister for the satisfaction that our constituents need, and that is why each and every Member here is present today.



Let me gently break the issue down one more time, in the hope that the reality of the situation will provoke a greater scale of action some 20 years later. Let us remember that the Equitable Life victims are typically retired nurses, teachers, civil servants, factory workers, shop workers and small business owners who had no choice but to set up a personal pension. Before I was elected to this place in 2010, I was a Member of the Legislative Assembly in Northern Ireland, and one issue that came to my attention then was that of the Equitable Life policyholders, especially as there are dozens in my Strangford constituency. Unfortunately, some of them have passed on, so they never had the satisfaction of seeing this being addressed. I am here to uphold the policies of the people who are still living and to express some disquiet about those who have not had that satisfaction. With all our busyness as Assembly Members and MPs, I tried to address this matter along with many other Members, because this is not just Jim Shannon; this is everybody together—Members of all parties, on both sides of the Chamber—recognising that a wrong has to be righted.

There are people who have worked hard and worked away to secure their retirement, but to date almost 1 million pension savers have received less than a quarter—some 22%—of the losses they incurred when the Equitable Life Assurance Society nearly collapsed. Just before I was elected to this place in 2010, I was contacted by people in my constituency who had been stung by the Equitable Life scandal, and they all pointed to the fact that the parliamentary ombudsman clearly concluded in 2008 that the victims’ loss was directly attributable to a decade of serious, serial regulatory maladministration. In fact, just last year the Treasury admitted that it was culpable for the scandal. That is the story, so we look again to the Minister for his response.

In 2010, I can well remember the Government accepting that victims’ losses amounted to £4.3 billion, and I was disappointed at the allocation of £1.5 billion for compensation—a decision that was justified on the basis of the perilous state of the public finances, as other Members have mentioned. I was a member of the APPG that secured a small victory in 2010 with the passage of the Equitable Life (Payments) Act 2010 and the establishment of a scheme to pay limited compensation to qualifying Equitable Life members. But this payment was not enough, and the people who are missing out are the most vulnerable. The compensation amounted to only 22.4% of the relative losses of 895,000 traced pension savers. This was the sum left after compensating the people with annuities who had already retired. Ensuring that this large cohort of pension savers receive the unpaid balance of the full 100% of their relative losses would cost £2.6 billion. May I suggest that, when our finances are better, this small figure should be considered in order to bring the situation to a conclusion?

In the 2013 Budget, a cohort of 9,200 with-profits annuitants who took out contracts before 1992 received only £5,000 each, or £10,000 if they were eligible for pension credit. I stand today to support the call for these victims, who are the oldest and most vulnerable, to be afforded the same treatment as their younger counterparts, who bought their annuities later. We have a duty to deliver this. It would cost an estimated £100 million and could be funded today from the unspent £140 million in the Treasury’s coffers from the current scheme. If the money is there, let us do what is right. It seems like simple mathematics to me.

I am well known as someone who does not advocate borrowing like there is no tomorrow. I have a bit of Ulster Scots in me—every pound’s a prisoner. We are very careful in what we do, and that was instilled in me by my mum and dad.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Only the good book.

[Jim Shannon]

Absolutely. Joking aside, the mathematics are plain. I understand that it is my children and grandchildren who will be paying off our debts for their whole lives, and I am supportive of efforts to reduce the deficit, although this cannot be done at the expense of those who are vulnerable and ill. More focus should be put on the higher rate tax bracket, but that is a debate for another day.

We have brought down the deficit and are no longer in a position of a financial crisis. I thank the Government for that because they worked hard to make it happen, and we support them—well done. Therefore, there could well be a time when we can do what is right by every person affected by the maladministration.

A briefing provided to me has outlined the fact that Equitable Life victims were pushed to one side as a direct consequence of the timing of the 2008 financial crisis, which saw the UK’s banking corporations bailed out while hard-working and responsible pension savers took the hit. Now that the Government have sold their interest in Lloyds and are reducing their stake in RBS, it would be fitting to use a small portion of the money recouped to finally settle the acknowledged debt to Equitable Life victims. There is a clear cross-party consensus, from right hon. and hon. Members on both sides of the Chamber who have a real heart for their constituents—for Equitable Life members who have policies that need to be delivered. It is so important that we honour that pledge, but to be able to do this we must be able to retain the necessary information.

Like other Members, I ask the City Minister to guarantee that Her Majesty’s Treasury and other relevant agencies will retain indefinitely the necessary data—addresses, policy numbers and amounts paid—to make the further future repayments that we are calling for. If he were to provide this assurance on the Floor of the House, it would provide a great deal of comfort to Equitable Life victims that there is hope for the future. I say very gently to everyone here that our duty is to deliver for our constituents. We are in this House because they voted for us, and we are here today to put forward their case. It is a collective decision of all Members present to request that these things happen.

Time has beaten me but I must stress one last time, on behalf of the Democratic Unionist party, that these people are victims. We have outlined wrongdoings and maladministration, and have paid out a small amount of money that is due. If we are in the position to do more, we must ensure that we do. But, more importantly, we must send the message that we are actually willing to do that; that it what it is really all about.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Today we have heard a powerful and consistent voice across this Chamber to end this scandal. I pay tribute to the hon. Member for Harrow East (Bob Blackman) for bringing this debate to the House. Like all former councillors, he cut straight to the heart of the matter and how it affects people’s daily lives, and he did so with eloquence and controlled anger. He is right to be angry on behalf of the people who have been affected by this scandal. He laid out the history and pointed out that it is a Ponzi scheme, and he is right that it has been a web of greed and exploitation leading people to this point. I add my voice to his clamour for the Government to honour, in full, the support needed by the victims, and I back his three asks in getting past this situation.

The hon. Member for Leeds North East (Fabian Hamilton), who is not in his place, talked about the life-changing negative effects of this issue, and has been a constant champion of the victims. [Interruption.] I am glad that he returned in time to hear me say that. He mentioned the report that described a decade of regulatory failure. It gave a well-informed exposition of the issue, and mentioned two shocking statistics—that 100,000 cannot be traced and over 15,000 people have died. What a disgrace.

The right hon. Member for New Forest West (Sir Desmond Swayne) and the hon. Member for Torbay (Kevin Foster) asked how people having to save for their retirement can have confidence in the system when this matter has been allowed to drag on in this way and left in this state of affairs. They also, quite rightly, pointed out that this is creating a framework for hostility towards pension saving. The hon. Member for North Tyneside (Mary Glindon) underlined those points. The right hon. Member for Haltemprice and Howden (Mr Davis), who is no longer in his place, said that it was a failure of Government to have dealt only partly with this. He should know. He is an expert in failures of Government, so we should listen to him.

The hon. Member for Blackpool South (Gordon Marsden) said that there was a “Bleak House”-type history to this, and, as many others did subsequently, talked about the opportunity to get some of the money back on the RBS shares as a way of settling this scandal for people. That should be taken on board. The hon. Member for Strangford (Jim Shannon) talked about the choices that Governments make. As a DUP MP, he knows about the choices that this Government make in terms of spending their money. There are lessons to be learned by Government Front Benchers on this. The hon. Member for Erewash (Maggie Throup) also underlined some of the things that need to be done by the Government, so I hope that the ministerial earplugs were left behind before the Minister came into the Chamber today.

Let us be clear: the only thing equitable in this whole saga is the name “Equitable”; everything else about it has been rotten. This scandal has simply been allowed to continue beyond any reasonable timeframe. So as Equitable Life is finally wound up, the UK must now, belatedly, ensure that justice is delivered for those affected by this scandal. That means dealing with the issue of compensation, and that can only be done when the loss is fully quantified by negotiating the correct sums involved. The EMAG website states that the £1.5 billion covers only 20% of the losses incurred and argues that there should be Government action to pay full compensation. At the moment, there is a huge gap between what is required and what the Government have set aside in their £500 million fund. I ask the Minister: when will the compensation be fully agreed?

In June 2018, it was announced that Equitable Life would finally be shutting down, with a surprise £6,900-a-head windfall for the last remaining policyholders, while about 261,000 people will have a share in a £1.8 billion pay-out following the transfer of its business, Reliance Life, through unlocked capital. That is good news, perhaps, for those who have hung around, but the 800,000 former policyholders—the vast majority—who were shifted to other providers or encouraged to cash in and cut their losses will get nothing from that. EMAG says that policyholders who left Equitable Life will still remain £2.5 billion out of pocket. As Paul Braithwaite of EMAG said:

“Equitable has crafted an elegant termination strategy for the small number of remaining members, but it will be no benefit to the vast majority of victims. If the remaining members vote in favour of this deal, they are likely to come out ahead. But for every one of them, there are five who left the society who are much worse off.”

That vote, as we know, will go ahead in the coming months.

The UK Government must now finally deal with the outstanding injustices felt by these aggrieved policyholders. Those people saved throughout their lives. They were encouraged—told—to do so by successive Governments in this place. They lost the savings they had entrusted to those whom the Government, in turn, had entrusted to look after them. The Government have not only failed them—they have failed to treat this with the due urgency it requires, or, indeed, the compassion it requires. They failed to compensate them, and that must be put right now. In doing so, the Government must consider the deep impact that scandals such as Equitable Life have on public confidence in pension schemes, and how they could end up actually deterring those who should be saving for their future needs. I therefore say to the Minister: “Let us make a commitment. Let us hear that from you to end the scandal, to belatedly make amends, to make it right, to make it fair, and, with no irony intended, to make it equitable for all those who have suffered.”

--- Later in debate ---

[Bob Blackman]

With the leave of the House, I would like to thank the 10 right hon. and hon. Members who have spoken in the debate and the numerous other colleagues who made interventions. I regard the Minister as an honourable Friend, and I understand that he has to maintain a solid line from the Treasury and the Chancellor. That is clearly his job, but the 1 million people out there who are victims of this scandal will be disappointed with what my hon. Friend has had to say. The reality is that we have a debt of honour. I believe that we should repay that debt. It can be done over a period, not necessarily all at once, as we have said during the debate.

[Drew Hendry]

Will the hon. Gentleman give way?

[Bob Blackman (Harrow East) (Con)]

I am summing up, and I have to keep very tightly to time.

I am grateful for all the praise that has been heaped on me and the hon. Member for Leeds North East (Fabian Hamilton) for the campaign that we have continued to run. I would much rather that the Government honoured the commitment that we all made in 2010 to deliver full compensation for the victims of the scandal. During the debate, our membership of the all-party parliamentary group has increased yet again. We now have 238 members, and we have been joined by no less a figure than the right hon. Member for Doncaster North (Edward Miliband), the former leader of the Labour party.

If the Government do not wake up to the fact that, on a cross-Bench basis, we are determined to get justice for Equitable Life policyholders, they may find that if they do not do the right thing it will be forced upon them.

Question put and agreed to.

Resolved,

That this House welcomes the Government’s acceptance in full of the Parliamentary Ombudsman’s findings in relation to its maladministration with regard to Equitable Life; notes that the Parliamentary Ombudsman recommended that policy holders should be put back in the position they would have been in had maladministration not occurred; further notes that the overwhelming majority of victims have only received partial compensation compared to the confirmed losses directly attributed to regulatory failures; and calls on the Government to make a commitment to provide full compensation to victims of the scandal with the end of austerity now in sight.

Long-term Capital for Business

Drew Hendry Excerpts

Tuesday 15th January 2019 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Stirling (Stephen Kerr) on securing this important debate. I was not aware that he was unwell over Christmas, but I am delighted to see him in the pink of health.

It is a rare treat to be in a debate with two Tories and a Democratic Unionist party Member where I have to pick my differences in their speeches; they made many points that I agree with. In particular, the hon. Member for Stirling discussed productivity. It has long been an issue that I have talked about. It has been holding back business and people for far too long, and I agree with his sentiment. As a result of paying more in taxation, we can invest more in our services—that is the consequence of getting that kind of result in productivity.

I also agree about the lack of focus across the nations of the UK. It does feel like an English Treasury; we make that point regularly. It is also a fact that the south-east gains far more traction than any other part of the UK, including the regions of England, Northern Ireland and Wales. There was a lot to agree with in that regard as well.

It is particularly poignant to have this debate today, as the biggest threat to business access to finance comes from Brexit. Government Members, particularly those in favour of Brexit, would like that to be ignored in this debate, but I do not think it can be. Brexit is already reducing the number of customers, the size of workforces, and the level of confidence. Instead of building our economy, investors are voting with their wallets by pulling nearly £20.6 billion from UK equity funds since the vote in 2016, according to EPFR.

[Luke Graham]

The hon. Gentleman makes a point about Brexit being a threat. Does he agree with a developer in Alloa in my constituency that the biggest threat to raising finances is not Brexit but the threat of a second independence referendum?

[Drew Hendry]

It will come as no surprise to the hon. Gentleman that I do not agree with that. He has gone from making a sterling point about the English Treasury to saying that independence is somehow a threat. I do not think so; I think it is a marvellous opportunity. As he has raised the issue, I will say that it has been brought into sharp focus in this place over recent months.

As Marian Bell of Alpha Economics pointed out, businesses that were told to prepare for a no-deal Brexit have relocated their operations and those decisions may not be reversed, even in the event of the best possible economic outcome—even if that is remaining in the EU. As Brexit inches closer, the UK services sector has recorded the slowest sales growth in two years, according to the British Chambers of Commerce, whose survey of 6,000 British firms shows that labour shortages and price pressures persist.

Scotland is a world leader in patient long-term capital, but Brexit risks lenders following the example of a well-known hon. Member, the hon. Member for North East Somerset (Mr Rees-Mogg), in moving business to Dublin or the continent. We are being Mogged over Brexit.

In the face of austerity, we have to make different decisions to support business. The Scottish Government are introducing the Scottish national investment bank, which will provide patient long-term capital to support Scotland’s firms. In contrast, as we have heard, the UK Green Investment Bank, which was privatised by the Government, is now bereft of its UK focus.

The aim is for the Scottish national investment bank to invest in businesses and communities by 2020, subject to regulatory approval. It is backed by our commitment of at least £2 billion of investment in the first 10 years, which paves the way for a step change in innovative and inclusive growth.

We also welcome the plan for a Scottish stock exchange in the second quarter of 2019, with a focus firmly on social and environmental companies that are worth between £50 million and £100 million. The plan has now secured a partnership agreement with the major European stock market operator Euronext, meaning that the first Scottish stock exchange will operate since the closure of the trading floor in Glasgow in 1973.

That is all being done in the shadow of Brexit, which was a vehicle aroused solely to calm Tory infighting. As chaos reigns on the Conservative Benches, there is as much chance of success for business as for the economy of our people, who will ultimately pay the price in the long term.

[Mr Charles Walker (in the Chair)]

I call Marion Fellows to speak for the Scottish National party for up to five minutes.

2019 Loan Charge

Drew Hendry Excerpts

Tuesday 20th November 2018 Westminster Hall

[Sir Edward Davey]

It was a pleasure to allow that intervention. I have no objection to the way in which the wrong is righted, as long as it is righted properly. If we stick to the principle of the rule of law, as I said in my intervention on the hon. Gentleman, ending retrospection in this tax change means that any charge prior to Royal Assent of the Finance (No. 2) Act 2017 must end. There can be no charges before Royal Assent of that Act; otherwise we are in the area of retrospection.

Like other colleagues, I have had constituents contacting me. Sixteen have contacted me directly, and in my experience that means there are many more out there who have not contacted me. I will read from just one, from Mr Garry Taylor, who talks about the “devastating consequences” that will destroy the finances of “me and my family”. I do not know about other colleagues, but I have had people almost in tears in my surgery over a tax matter, which has never happened before in 20 years.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Does the right hon. Gentleman agree that people are living in genuine fear of bankruptcy and losing their homes, and it is not acceptable that the Government have handled the matter in that way?

[Sir Edward Davey]

I could not agree more. I have never seen people so distressed and distraught by one particular measure, which appears to target pain on just a few people. Those people work hard in our NHS, our industry, our schools and our civil service. Why do the Government want to target so much pain on so relatively few people? The charges involved are massive: hundreds of thousands of pounds. It is completely iniquitous. I believe the Minister knows that and I hope he will therefore put it right. Everyone in this House is clearly against tax scams; we want to close them down, but as other hon. and right hon. Gentlemen have said, people were advised by professional accountants and HMRC appeared to be happy. It was notified of the tax schemes and did nothing. Yes, let us crack down on tax avoidance, but let us not go after victims, the people simply trying to earn a living for themselves and their families.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

I appreciate being called in this debate, Mr Walker, and I thank the hon. Member for Wycombe (Mr Baker) for securing it.

In previous years, the SNP has raised concerns about the implementation of IR35 legislation, and during discussions on the Finance Bill I suggested a review into the way that it was being implemented. It was not necessarily that the legislation was a bad idea, but the way it was implemented did not work for people because they could not navigate the system appropriately. I raised that issue in 2016, just as my colleagues did previously.

I have been approached by many constituents about the loan charge. Some were recommended to join these schemes by the companies they worked for, which wanted them to move on and become contractors. One person told me that a presentation was given in the company’s boardroom by another company running one of the schemes. Individuals were encouraged to go to that presentation and transfer into one of the schemes rather than being employees of the company. That is a real concern.

I am concerned about the way that this measure is being implemented. I have a constituent who filled in his details before 30 September, as he was requested to do, but has not yet received a settlement figure from HMRC. Another constituent in the same boat has been told that they will receive a settlement figure by 5 April next year, although the Treasury promised that those figures would arrive by 30 November this year. People are being told that the settlement figures will not be calculated until 5 April, but they have also been told that they will need a payment plan in place by then in order to be compliant. If that settlement figure is not calculated until April and the payment plan will be required immediately, people do not have enough time to make the decisions they need to make on any settlement figure.

Clarity about timelines would be hugely appreciated. This has been a moveable feast, and the Treasury and HMRC have regularly changed the dates and times by which people have been required to submit information. It is important to have clarity so that people know when they need to have a payment plan in place.

It is important that people pay the tax they owe. At least one of my constituents is disputing the calculation made by HMRC. They have not been given a breakdown of the calculation and cannot work out why HMRC has come to that figure. There needs to be transparency so that people understand why HMRC thinks they owe what it says they owe, and they can then make rational and reasonable decisions about payment plans.

I have been clear with any constituent who has approached me, and with HMRC, that we need a mutually beneficial payment arrangement. We cannot have people being made bankrupt as a result of these payments. The change from 12 months to a five-year period for repayments is welcome, but if someone is being asked to pay back hundreds of thousands of pounds when they are existing on jobseeker’s allowance, it is not possible to pay that money back over five years.

I am also concerned about individuals who are being asked to sell or move out of their family home and have it repossessed. That causes problems for local councils as well as for the family involved, and just passes the buck. If HMRC wants to recoup the money, it would be sensible to do that in a way that means people can pay it, rather than having to be made bankrupt. We need give and take by HMRC, as well as transparency and clarity about dates.

[Drew Hendry]

Does my hon. Friend agree that one of the biggest problems facing people in this position is the uncertainty of not knowing how they will cope with paying these large amounts back over a period of time, when no assistance or guidance has been provided as to how they might make those payments?

[Kirsty Blackman]

As I said, this has been an incredibly moveble feast and HMRC keeps moving the goalposts. It is important to have clarity about the future timeline. Constituents need to understand what they will need to pay back, the timescale involved, and why they are being asked to pay back the amount requested.

Finance (No. 3) Bill

Drew Hendry Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[Colin Clark]

I do not know and I really cannot understand it. Now that the Scottish Government are getting tax independence, one would think that they would want to grow the entire economy, instead of damaging parts of it. This should be a salient lesson that tax divergence is damaging; making your country uncompetitive will hurt services. It will cost higher rate taxpayers in Scotland £2,000 to £3,000 more per £100,000 of income. That means that a consultant in Newcastle may not choose to come to Aberdeen Royal Infirmary, which supports my constituency, and that would be very damaging for the public services.

The Finance Bill stimulates the economy; lower taxes will grow the economy. The hon. Member for Aberdeen North (Kirsty Blackman) is no longer in her seat, but she mentioned a transferable tax history, which is estimated to stimulate the oil and gas industry by £30 billion of investment. I consider that an enormous figure, not a small change. Fiscal stability will benefit the oil and gas industry, and we are grateful to the Chancellor that that is still the target of this Government. Slashing business rates, as the Chancellor has promised, will benefit businesses. However, of course, slashing business rates is not going to happen in Scotland, because that is a devolved matter; the north-east of Scotland got half of the increase in tax, which is damaging businesses in my constituency and other north-east constituencies. Buildings in the north-east of Scotland are being demolished because empty building rates—

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Am I hearing the hon. Gentleman right? Is he completely ignoring the some 100,000 small businesses that have benefited from paying no business rates at all because of the Scottish Government’s small business bonus?

[Colin Clark]

I remind the hon. Gentleman that businesses in the north-east of Scotland—large employers there—are considering knocking down warehouses and large offices, which are not redundant, as they are still fresh and good buildings. That is happening in the north-east of Scotland. One such building in my constituency, which had 2,500 office workers, may well be lost very soon.

[Drew Hendry]

Evidence it—

[Colin Clark]

I shall carry on speaking to you, Mr Deputy Speaker, rather than to the hon. Gentleman, who speaks from a sedentary position. I would welcome the Chancellor’s business rates commitments—

[Drew Hendry]

rose—

[Colin Clark]

I will give way, as the hon. Gentleman has got back up again.

[Drew Hendry]

I am keen to see how the hon. Gentleman provides evidence to support these accusations that people are knocking down buildings and fleeing their country.

[Colin Clark]

I could recommend to the hon. Gentleman that he reads the famous The Press and Journal, which I was in just under a year ago, standing in front of a building that had just been knocked down and which used to house 500 people in an office—I shall send him a signed copy of it. Buildings are being demolished in the north-east of Scotland.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I was accused earlier by the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) of being a bit miserable in my Budget speech—of failing to point out the good things in the Budget. Well, it is pretty easy to be miserable with a miserable Budget, but I did welcome the freeze on whisky duty and the support for electric vehicles, among other things. There were slim pickings, but I did my best to be positive wherever I possibly could. But how rich is it to hear that accusation from those on the Government Benches? They would rather turn to stone than welcome the fact that Scotland’s crime level is at a 42-year low; welcome the best accident and emergency performance in the UK; or welcome that 100,000 small and medium-sized businesses pay no business rates at all, thanks to the Scottish Government’s small business bonus. And what about the 70% of people in Scotland who are now paying less tax, or the lowest-paid people who are paying less tax? Or our record social house building programme, with council houses being put in place to fill the Government’s deficit?

It is clear for all to see that austerity lives on for those who can least afford it. In delivering this Bill, the Government continue their attacks on the poorest in our society. In my response to the Budget, I recounted many ways in which the Government are failing to deliver for Scotland—for our workers, industry and people. My hon. Friend the Member for Aberdeen North (Kirsty Blackman) said earlier that the Chancellor admitted that the Government would need to look at “a different approach” on the economy; if and when the Prime Minister fails to secure a deal with the European Union, this Bill will not be worth the vellum it is printed on.

After a decade, Tory austerity is far from over. Scotland’s block grant for 2019-20 is down £2 billion in real terms compared with 2010-2011. The paltry £2.7 billion for universal credit does nothing for people currently struggling and goes nowhere near reversing the years and billions of pounds of social security cuts that people have endured. After five and a half years of this failed experiment in the highlands, after seeing the misery that people have endured on universal credit in Inverness and the surrounding area, and after having ignored not just me but all the agencies, including the Government’s own support agencies, this Government should hang their heads in shame that they are not doing something to help people instead of continuing to punish them in this way.

In contrast, the Scottish Government are helping those on low and modest incomes. This Tory Budget gives tax cuts to the richest. The Scottish Government, in the face of austerity, are building an economy of the future, with measures to unlock innovation and productivity. They do that while the Government in Westminster recklessly pursue, at the very best, a bad Brexit for the nations of the UK—actually it is looking more like a disaster that they are pursuing. The Tories should accept that the only way to minimise the damage to jobs, the economy and business is to stay in the customs union and the single market.

As my hon. Friend the Member for Aberdeen North asked earlier, where is the oil and gas sector deal? After £350 billion in tax revenues, the industry deserves better; it needs the sector deal. The news of yet another nuclear failure with the withdrawal of Toshiba underlines the fix that this Government are in over their Paris climate change commitments. Having betrayed Peterhead and having pulled the rug from under the industry three years ago, incidentally wasting £100 million in the process, this Government must now make a proper serious commitment to carbon capture and storage.

[David Duguid (Banff and Buchan) (Con)]

I am sure the hon. Gentleman will join me in welcoming the commitment of the Department for Business, Energy and Industrial Strategy not only in at least considering the sector deal for oil and gas, but, on the subject of carbon capture and storage, in looking at a project in St Fergus, just off the coast of Peterhead in my constituency. It looks like being part of a Scotland-wide cluster, because the system is already connected by a pipeline from St Fergus to Grangemouth.

[Drew Hendry]

I thank the hon. Gentleman for his intervention. Indeed, I do welcome the work at St Fergus. It perhaps would have been proper to point out that the Scottish Government are also driving that St Fergus development. It perhaps also would have been appropriate to point out that the funding that has been put forward by BEIS is one tenth of what was removed three years ago. Three years after the point at which it could have taken advantage of world-leading cutting-edge technology, it thinks it is good enough to put in a tenth of the funds and hope that that lip service will pay dividends. It just will not wash.

[Stephen Kerr]

rose—

[Drew Hendry]

I will give way to the hon. Gentleman later.

This Government also continue to fail the young. [Interruption.] Thank you for that direction, Mr Speaker. I will do my best to keep the pace going.

This Government also continue to fail young people. They could have ended wage discrimination, but they chose instead to keep punishing them. Those young people deserve the same pay for the same work and they deserve a real living wage. As my colleagues pointed out earlier, there is nothing—nothing—for the women born in the 1950s who were short-changed on their pension entitlements. It is no wonder that the argument for an independent Scotland has never been stronger. The Tories’ obsessions make the case for us in Scotland.

I do want to refer to the hon. Member for Stirling (Stephen Kerr), because we rarely agree on anything, but the one thing that we do agree on tonight is fixed odds betting terminals. Delaying the reduction of stakes in fixed odds betting terminals is a disgrace; it will only take more money from vulnerable addicts and put it in the pockets of the bookies and those with vested interests. It is a disgrace that is felt right across this House. Research from Landman Economics has shown that the average fixed odds betting terminal user loses £192 a month, with the average user of a machine capped at £2 a spin losing just £22 by comparison. There is no justification for delaying this action.

It is also clear, from this very debate, how the Tories want to muddy the waters on tax avoidance, as they have on the IR35 changes. If they are not pointing the way to tax avoidance, even when they look to clamp down on it they miss the mark, as we can see with the implementation of the IR35 changes. The loopholes absolutely need to be closed. However, the employers and agencies benefiting most from these schemes have, for the most part, got away with it. With HMRC implementing stringent measures on many who were duped, many are now fearful of being forced to repay immediately with no provisions that reasonable time will be allowed and a payment scheme be made available. Folk are genuinely worried about becoming bankrupt.

Austerity lives on for those who can afford it least. The Prime Minister and the Chancellor spin the line that austerity has ended, or is ending; well, maybe, depending on who you hear it from. But everyone knows, even their rare supporters, dwindling though they are, that that is just a toom tabard of a statement—another Government rebranding exercise. My constituents are making the choice between putting food on their tables and heating their homes. They have had enough of it. Those on universal credit with spiralling debt because they do not know when the next payment is coming, or whether, if it does, it will be correct, have had enough of it.

Universal credit impacts on other communities. After five and a half years, we know the truth. As the OBR Budget document details, the changes to the work allowance reverse only half of the cut that was made to it in the 2015 Budget. Are we seriously expected to cheer this Government for putting back in less than half of what they removed, after years of punishing those who could afford it least? Millions of people have been dragged through this system already, with misery, heartache and poverty—and what have they been told? They have been told that the system works—that they are all wrong—but there are now voices joining theirs.

Even in the Minister’s small concessions, he is admitting this Government’s failure. They should be utterly ashamed of what they have inflicted on people. If Ministers had a shred of decency, they would come to the Dispatch Box and apologise to my constituents and to the far too many others who have had to endure the roll-out of universal credit. Let us not forget that these people will not be benefiting from transitional funding announced in the Budget; instead they are left trying to piece together their lives following the impact on their families, sometimes shattered by this move. They are left wondering how on earth a Government supposed to provide them with a safety net to which they and their families have contributed are left counting pennies while those who have the most still avoid paying their share.

For those to be transitioned to universal credit, £1 billion for the transition does not even touch the sides of what is needed. If this Government were serious about mitigating the impacts, they would migrate people to universal credit without expecting them to process a new application. People who need universal credit support simply do not have anything spare to get them through the transition weeks, be it two weeks or five weeks.

Then there is the new funding for universal support to be announced. I will welcome that; any support is better than none. But again it is more fudge, because, as anyone who has any idea about this mess knows, most of the issues people experience with universal credit are long-running and ongoing well after the initial application. So where is the fund for ongoing universal support? While that was omitted from this Bill and by this Government’s PR machine, the chief executive of Citizen’s Advice made it very clear in her letter to the Work and Pensions Committee when she said:

“Our current agreement does not include funding to provide support to people once their claim is complete.”

Of course, I hear the Government’s other rhetoric that for most people the process is simple and problem free.

I do not want to see any more people in tears in my constituency office. I do not want to see any more families struggling to get along. I do not want to see any more families going to food banks and having to prostrate themselves to get what is essentially a handout in order to keep them going when they should be properly protected under a decent social security system that any forward-thinking country would have. Perhaps that country should indeed be an independent Scotland.

--- Later in debate ---

[Bill Grant]

I take the hon. Lady’s point, but I understand that the saving she refers to is very modest to the tune of £24 a year for some, which equates to less than 50p a week. It is a step in the right direction, but a very small step and hardly a progressive tax system. As one whose mother cleaned other people’s houses and made beds at Butlin’s on Saturdays, I am not minded to accept lectures on poverty from Scottish National party Members.

I disagree with the suggestion that the Budget failed to provide funding for a social security system that treats people with dignity and respect. The Chancellor was listening. The entire ethos of the evidence-based and empowering system of universal credit is that work should always pay, and that work brings with it dignity and respect. No one can disagree with that. The dignity of work is important to all constituents in all parts of the United Kingdom.

The Bill will facilitate an additional £1.7 billion per annum being invested to increase work allowances by £1,000 from April 2019. I hear Opposition Members cry “More!” Everyone’s an Oliver—they want more, more. That “more” has to be earned and this Government have an economy that works and is earning more.

[Drew Hendry]

Come to Inverness.

[Bill Grant]

I am happy to join you.

Some 2.4 million households will keep an extra £630 of income per annum, and I am sure that those who need support will continue to receive it. It is no longer a wicked system where if someone wants to work beyond the 16 hours, they lose money.