Concentrix

Baroness Laing of Elderslie Excerpts

Wednesday 26th October 2016 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Before I call the next hon. Lady, it will be obvious to the House that there are a great many Members who wish to speak this afternoon. We will start with a voluntary time limit of eight minutes for Back-Bench speeches. If that does not work, I will impose a time limit of eight minutes. This time limit, voluntary or otherwise, does not, of course, apply to the spokesman for the Scottish National party, Mhairi Black.

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

Today’s debate is primarily about the HMRC contractor, Concentrix, the delivery of its contract, its customer service and the impact of its work on those receiving tax credits who were wrongly suspected of fraud or error. The hon. Member for Stretford and Urmston (Kate Green) made some valid points about her constituents who have been affected, and other hon. Members have spoken equally movingly about some of theirs. The debate is about more than that, however. It is about the relative value, efficiency and service of third-party contracts as against the direct delivery of services by the Government or by Government agencies. It is also about how the Government—in this case, HMRC—reacted to the unexpected crisis when mandatory reconsideration appeals rose by 95% in August while the “success” in handling calls dropped off a cliff. It is about how quickly contingency plans were put in place, and what those plans were. It is also about whether the structure of the incentives and the contractor’s commission were appropriate for this type of public service delivery.

It is too early to offer definitive answers today, while the internal investigation is still going on. However, the inquiry by our Work and Pensions Committee and the measured comments from the Financial Secretary to the Treasury today offer some clues. To this, I add my own experience as an MP dealing with constituents who have been affected, and the observations that we made in the Select Committee.

The first point has to be that the goal of reducing HMRC’s estimates of fraud and error was the right goal for the Government to have. The 2014-15 estimates, which are the most recent ones, suggest a net £1.2 billion of fraud and error on tax credits, potentially involving 500,000 people. The Government cannot spend billions of pounds of taxpayers’ money on welfare without ensuring that it is spent properly, just as we expect the Department for International Development to ensure that its accounts are correct and its money is spent in the right way. We also expect the European Union to account correctly for the money it receives from its taxpayers, including our own.

The hon. Member for Paisley and Renfrewshire South (Mhairi Black) is absolutely right to say that rich people, and every company, should pay the right amount of tax. I would add that this is not a case of either/or. It is a case of both. The Government were absolutely right to increase HMRC’s resources for collecting the right amount of tax from those who have tax to pay and to ensure that the right amounts of welfare benefits are received by the right people. It is worth noting that the £270 million recovered through this programme will make a decent contribution to reducing fraud and we must ensure that it is made available to the people who need it most.

Secondly, there has been a cost during this process to our hard-working, not-well-off constituents. In each of the dozen or so cases that I or my office staff have replied to, there has been a degree of hardship and, in some cases, considerable hardship. HMRC’s response to such cases is therefore important. My sense, from our Select Committee inquiry, is that HMRC’s chief executive, Jon Thompson, is looking at how quickly HMRC has responded. It is true, however, that the moment HMRC took a grip, beefed up resources and put extra staff on to the MPs’ hotline, my office—and, I suspect, those of other MPs—was able to resolve these tax credits cases very fast. I am unsure whether all the cases were resolved within 48 hours, but all were done within three or four days, and some within a few hours. Indeed, the Work and Pensions Committee Chairman, the right hon. Member for Birkenhead (Frank Field), said that he could not

“recall an experience where, thank goodness, the Executive, whether Government or delegated, has acted so quickly when they have seen a crisis.”

That should be on the record. It is credit to how HMRC responded. In the evidence we took from affected people, there was one particularly gracious “thank you” to HMRC for resolving one individual’s crisis so quickly.

My third point relates to contracts to third parties and the incentive system within them. The National Audit Office recognised this as a complex area, and the jury is still out on how successful the system has been over the past few years. HMRC’s chief executive responded to my question on that with an interesting remark about

“the balance of incentives on third parties in these kinds of contracts”

which

“is essentially based on commission earned.”

He asked:

“Is that the right kind of incentive mechanism for this kind of public service delivery?”

It is a valid question, and other Members have mentioned it. The HMRC chief executive reflected on it. I also have no doubt that the NAO investigation will discuss whether bringing this sort of contract in-house would ensure better quality control, more experience of handling citizens who are on tax credits, and possibly even a reduced cost. From the evidence to the Committee, it broadly looked like Concentrix will have been paid about £27 million by the time its contract comes to an end on £270 million of fraud or error identified, implying a 10% commission. That feels high, but the figures are probably hypothetical at this stage and will need to be confirmed in due course by the investigation.

In all of this, the Government, HMRC and Concentrix have been absolutely right to start with an apology to those who have suffered. When mistakes are made, it is important that they are recognised immediately. HMRC and Concentrix started the Select Committee sessions by making their apologies—the Minister has added hers on more than one occasion—and that was important. There is the issue of compensation for those most affected, and the fact that, as the amendment states, the Government should “ensure that those people”—people on tax credits—

“are treated by HMRC in future with dignity and respect.”

That should happen all the time for everyone with whom the Government deal, particularly where monopolies such as HMRC exist. We all have a duty to treat our constituents with dignity and respect. That is what happens most of the time. My experience is that HMRC is helpful on every occasion with constituent issues.

In conclusion, today’s debate has been measured and the tone has been reflective and thoughtful across the House. Clearly, there are lessons to be learned. It is correct that tax collection is done, that welfare benefits are spent in the right way on the right people, that mistakes are responded to rapidly and that agencies such as HMRC should hold contingency plans. Poor service should be treated and amended as quickly as possible. I therefore welcome this opportunity to discuss some preliminary thoughts on the lessons that can be learned and I look forward to the NAO report in due course.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Although the hon. Member for Gloucester (Richard Graham) spoke for precisely eight minutes, the previous speakers did not, so I must now impose a formal time limit of seven minutes.

Finance Bill

Baroness Laing of Elderslie Excerpts

Tuesday 6th September 2016 Commons Chamber

[Jane Ellison]

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

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

New Clause 2

Review of the impact of the duty regime for high-strength cider

‘(1) The Chancellor of the Exchequer must carry out a review of the impact of the rate of duty charged on sparkling cider of a strength exceeding 5.5%, and lay the report of the review before both Houses of Parliament within 12 months of this Act receiving Royal Assent.

(2) The review must address (though need not be limited to) the impact of the duty regime on tax revenues and on the consumption of alcohol.”



New Clause 3

Review of the operation of the transferable tax allowance for married couples and civil partners

‘(1) The Chancellor of the Exchequer must carry out a review of the operation of the transferable tax allowance for married couples and civil partners under Chapter 3A of Part 3 of the Income Tax Act 2007 and lay the report of the review before both Houses of Parliament within 12 months of this Act receiving Royal Assent.

(2) The review must address (though need not be limited to)—

(a) levels of take-up of the allowance;

(b) the impact of the allowance on individuals with children aged five years or under;

(c) the impact of the allowance on low-income households; and

(d) ways in which the allowance could be changed to target low-income families with young children.”

New Clause 6

VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service

The Chancellor of the Exchequer must commission a review of the VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service, including but not limited to an analysis of the impact on the financial position of Police Scotland and the Scottish Fire and Rescue Service arising from their VAT treatment and an estimate of the change to their financial position were they eligible for a refund of VAT under section 33 of the VAT Act 1994, and must publish the report of the review within six months of the passing of this Act.”

New Clause 8

Review of changes to tax on dividend income

‘(1) The Chancellor of the Exchequer must commission a review of how the changes to the tax on dividend income implemented by this Act affect directors of micro-business companies, to include—

(a) the impacts across the distribution of such directors’ net income;

(b) the impact on company failure rates; and

(c) options for amending the law to minimise the impact on such directors who are on low incomes.

(2) The Chancellor must lay a report of the review before both Houses of Parliament within six months of the passing of this Act.”

New Clause 15

VAT on Installation of Energy Saving Materials

‘(1) No order shall be made under the Value Added Tax Act 1994 which would have the effect of raising the rate of VAT on installation of energy saving materials, or any individual category thereof.

(2) No order shall be made under the Value Added Tax Act 1994 to vary Schedule 7A of that Act by deleting or varying any description of supply within Group 2 (Installation of Energy Saving Materials).

(3) “Installation of energy saving materials” has the meaning given in Schedule 7A of the Value Added Tax Act 1994.””

New Clause 16

Review of impact of tax measures on intergenerational fairness

‘(1) Within six months of the passage of this Act the Secretary of State must lay before Parliament a report assessing the impact of —

(a) Sections 1 to 3,

(b) Sections 19 to 22,

(c) Section 82,

(d) Sections 92 to 96, and

(e) Section 140

on the burden of taxation by age demographic.

(2) A report under this section must include an analysis of the proportion of taxation paid by working age people under the age of 35.”

New Clause 18

Impact of section 24 of Finance (No 2) Act 2015 on availability of affordable housing

The Chancellor of the Exchequer must commission a review of the impact of changes relating to income tax made by Section 24 of the Finance Act 2015 on the availability of affordable housing, and lay the report of the review before both Houses of Parliament within six months of the passing of this Act.”

New Clause 19

Distributional analysis of the impact of taxation measures

‘(1) The Chancellor of the Exchequer must review the impact of the measures introduced by this Act on households at different levels of income, and lay before each House of Parliament the report of that review within six months of this Act coming into force.

(2) The Chancellor of the Exchequer must review the impact of government fiscal measures on households at different levels of income at least once in each calendar year, and lay before each House of Parliament a report on each review.”

Government amendments 132 to 134, 146 to 148 and 135.

Amendment 179, clause 99, page 185, line 20, at end insert—

“(c) “earning” do not include any amounts that constitute qualifying bonus payments within the meaning of section 312B of the Income Tax (Earnings and Pensions) Act 2003.”

Government amendment 138.

Amendment 141, schedule 3, page 337, line 1, at end insert—

“Provision for small amounts of partnership share money repayable to employees to be exempt from tax if instead applied charitably

10 In section 503 of ITEPA 2003 (charge on partnership share money paid over to employee), after “paragraph 55(3) (partnership share money paid over on withdrawal from partnership share agreement),” insert—

“paragraph 55(3A)(a) or (b)(i) (partnership share money paid over on withdrawal from partnership share agreement),”

11 (1) In Schedule 2 to ITEPA 2003 (share incentive plans), Part 6 (partnership shares) is amended as follows.

(2) In paragraph 55 (withdrawal from partnership share agreement)—

(a) in sub-paragraph (3) after “as soon as practicable” insert—

“, unless the plan includes provision authorised by sub-paragraph (3A)”

(b) after sub-paragraph (3) insert—

“(3A) The plan may provide that, where an employee withdraws from a partnership share agreement—

(a) if the employee does not agree to an arrangement in accordance with sub-paragraph (b), any partnership share money held on behalf of the employee is to be paid over to the employee as soon as practicable, and

(b) with the employee’s agreement—

(i) if the partnership share money held on behalf of the employee exceeds a threshold amount of not more than £ 10 specified in the plan, the full amount must be paid over to the employee as soon as practicable, and

(ii) if the partnership share money held on behalf of the employee is equal to or less than the threshold amount referred to in sub-paragraph (b)(i), as soon as reasonably practicable, the full amount must either—

(3B) Partnership share money paid over to a charity or accumulated for that purpose under sub-paragraph (3A)(b) shall not count as employment income by reason of section 503.

(3C) While the plan includes any provision authorised by sub-paragraph (3A), the company and trustees shall make available to participants and qualifying employees at least annually an account of the total amount of partnership share money that would have been returned to employees were it not for that provision and of the related charitable donations made.

(3D) The Treasury may by order amend sub-paragraph (3A)(b)(i) by substituting for any amount for the time being specified there an amount specified in the order.””

Government amendment 139.

Amendment 180, schedule 25, page 642, line 2, at end insert—

‘(4A) The Chancellor of the Exchequer may not appoint the Chair of the OTS without the consent of the Treasury Committee of the House of Commons.

(4B) The Chancellor of the Exchequer may not appoint the Tax Director of the OTS without the consent of the Treasury Committee of the House of Commons.”

Amendment 181, page 642, line 40, at end insert—

‘(2A) The Chancellor of the Exchequer may not terminate the appointment of the Chair of the OTS without the consent of the Treasury Committee of the House of Commons.

(2B) The Chancellor of the Exchequer may not terminate the appointment of the Tax Director of the OTS without the consent of the Treasury Committee of the House of Commons.”

Amendment 182, page 643, line 3, at end insert—

“References to Treasury Committee

5A (1) Any reference in this Schedule to the Treasury Committee of the House of Commons—

(a) if the name of that Committee is changed, is to be treated as a reference to that Committee by its new name, and

(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which those functions are exercisable.

(2) Any question arising under sub-paragraph (1) is to be determined by the Speaker of the House of Commons.”

[Jane Ellison]

In this final debate, there is an array of amendments and new clauses to consider across a wide range of subjects. I am sure that we will cover a great deal of ground.

Let me first outline briefly the Government amendments, starting with Government new clause 9. To ensure fairness in the tax system, new clause 9 allows for the exemption from income tax of supplementary benefit payments funded by the Northern Ireland Executive. Government amendments 132 to 134 deal with disguised remuneration and Government amendment 139 deals with aqua methanol. Amendments 132 to 134 change the date for withdrawing a relief on returns arising from disguised remuneration for those who have not settled tax due to 1 April 2017, while amendment 139 changes the date on which the new aqua methanol duty rate comes into force to 14 November.

Government amendments 135, 146 to 148 and 138 concern venture capital trusts, the lifetime allowance and dividends respectively. They make changes to ensure that these policies work as intended.

Let me deal with the new clauses and amendments tabled by the Opposition. New clause 15, tabled by the hon. Member for Salford and Eccles (Rebecca Long Bailey) and her colleagues is designed to prevent the use of secondary legislation to alter the rate of VAT applied to the installation of energy-saving materials. Since 2001, the UK has applied the 5% reduced rate of VAT to the installation of 11 different types of energy-saving materials. That reduced rate remains in place and is unchanged. The European Court of Justice ruled last year that the UK had interpreted VAT law too broadly. Following that judgment, the Government published a consultation on this particularly complex issue, and we are considering the responses. While this new clause is designed to prevent the use of secondary legislation to alter the rate of VAT applied to the installation of energy-saving materials, the tax lock legislated for by this Government already achieves the same effect. Indeed, it goes further.

Finance Bill

Baroness Laing of Elderslie Excerpts

Monday 5th September 2016 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

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

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

New clause 12—Report on the impact of the criminal offences relating to offshore income, assets and activities—

‘(1) The Chancellor of the Exchequer shall, within one year of the coming into force of the provisions in TMA 1970 relating to criminal offences relating to offshore income, assets and activities introduced by section 165 of this Act publish a report on the impact of the introduction of these offences.

(2) The report must include, but need not be limited to, information about—

(a) the number of persons who have been charged with offences under each of sections 106B, 106C and 106D of TMA 1970;

(b) the number of persons who have been convicted of any such offence;

(c) the average fine imposed; and

(d) the number of people upon whom a custodial sentence has been imposed for any such offence.

New clause 13—Report into the UK Tax Gap—

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, prepare and publish a report, in consultation with stakeholders, on the UK Tax Gap.

(2) The report must include the following—

(a) details of the UK Tax Gap (including individual breakdowns for figures relating to tax avoidance and tax evasion) for the financial years—

(i) 2015-16;

(ii) 2014-15;

(iii) 2013-14;

(iv) 2012-13; and

(v) 2011-12;

(b) a detailed summary of the model used by HMRC for estimating the UK Tax Gap;

(c) an assessment of the efficacy of HMRC’s performance in relation dealing with the UK Tax Gap, including—

(i) a breakdown of specific HMRC departments or units dealing with investigation and enforcement matters in relation to the UK Tax Gap;

(ii) details of the numbers of staff in each of the years listed in paragraph (a) who are located within departments or units dealing with investigation and enforcement matters in relation to the UK Tax Gap;

(iii) details of the budgets allocated to departments or units dealing with investigation above; and

(iv) details of the numbers of prosecutions or the amount of tax recovered in each financial year listed in paragraph (a) as a result of the work of HMRC departments or units dealing with investigation and enforcement matters in relation to the UK Tax Gap in those financial years.

(d) a review of the impact on tax revenues of requiring non-public organisations involved in public procurement processes to—

(i) be registered in the UK for tax purposes;

(ii) have paid UK tax for a period of at least five years prior to the date the relevant contract is awarded;

(iii) publish full details of beneficial ownership for the period of five years prior to the date the relevant contract is awarded; and

(iv) provide company accounts (including those of any beneficial owners) for the period of five years prior to the date the relevant contract is awarded.

(e) a comprehensive assessment of the efficacy of the General Anti Abuse Rule in discouraging tax avoidance;

(f) an assessment of the impact on tax revenues of introducing a set of minimum standards in relation to tax transparency for all British crown dependencies and overseas territories including (but not limited to)—

(i) placing a statutory duty on British crown dependencies and overseas territories to observe a system of good governance and practice in relation to tax enforcement; and

(ii) requiring British crown dependencies and overseas territories to maintain a public register of owners, directors, major shareholders and beneficial owners;

(g) an assessment of the impact on tax revenues of establishing a public register of all trusts located within the UK, British Crown Dependencies and overseas territories, including but not limited to—

(i) details of the names of beneficiaries to such trusts;

(ii) details of the addresses of beneficiaries to such trusts;

(iii) details of assets held by such trusts;

(iv) details of any trustees registered within the UK who have transferred that main residence to non-UK jurisdictions;

(v) details of tax avoidance schemes involving trusts which are currently disclosed to the HMRC.

(3) For the purposes of this section, the “UK Tax Gap” means the difference in any financial year between the amount of tax HMRC should be entitled to collect and the tax actually collected in that financial year which derives from tax avoidance and tax evasion.

Government amendments 136 and 137.

Amendment 167, in clause 163, page 293, line 25, leave out “may” and insert ”must”.

Amendment 168, in page 293, line 41, leave out “may” and insert ”must”.

Amendment 171, in clause 165, page 295, line 9, at end insert

“and that the person had an honest belief that all of the information included was true and accurate”.

Amendment 172, in page 295, line 26, at end insert

“and that the person had an honest belief that all of the information included was true and accurate”.

Amendment 173, in page 295, line 40, at end insert

“and that the person had an honest belief that all of the information included was true and accurate”.

Amendment 145, in schedule 19, page 589, line 29, at end insert—

‘(6) The Treasury may by regulations require the group tax strategy to include a country-by-country report.

(7) In this paragraph “country-by-country report” has the meaning given by the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016.”

Amendment 163, in schedule 20, page 609, line 34, at end insert

“or 100% of any fee paid by Q to P in respect of enabling Q to carry out offshore tax evasion or non-compliance”.

Amendment 164, in page 609, line 40, at end insert

“or 100% of any fee paid by Q to P in respect of enabling Q to carry out offshore tax evasion or non-compliance”.

Amendment 165, in schedule 21, page 618, leave out lines 27 to 34 and insert—

[Roger Mullin]

To those with little knowledge of Scottish limited partnerships, it may seem strange that I rise in this House to move new clause 7 in my name and those of my colleagues, but, despite what the name suggests, Scottish limited partnerships have limited connection to Scotland, and none to the Scottish Parliament. They were introduced in 1907 by the Chancellor of day, Herbert Asquith; despite rumours to the contrary, I was not present at the debates at the time, but the regulation, operation and dissolution of SLPs remain the exclusive preserve of Westminster, hence our moving this new clause.

Scottish limited partnerships have their own distinct legal personality. As a result, SLPs can, for example, hold assets, borrow money and enter into contracts. However, Asquith could never have foreseen that they would become a financial vehicle abused by international criminals and tax dodgers.

Great credit must go to the journalists of The Herald newspaper, particularly David Leask, for doggedly uncovering the truth about SLPs—and isn’t it good that for once we can praise journalism of the highest order delving into important matters, rather than merely dealing in tittle-tattle? Although some users of SLPs no doubt operate appropriately and responsibly, it is claimed that up to 95% of SLPs are mere tax evasion vehicles, including for criminal assets.

While SLPs may be registered in Scotland, they are often owned by partners based in the Caribbean or other jurisdictions that ensure ownership secrecy and low, or no, tax regimes. People operating outside the UK are exploiting opaque ownership structures to hide their true ownership. As Oxfam, too, has recently pointed out, brokers in countries such as Ukraine and Belarus are specifically marketing SLPs as “Scottish zero per cent. tax firms.”

The number of SLPs is growing apace. Data from Companies House revealed by The Herald show 25,000 were in place by the autumn of 2015 and new registrations have been increasing by 40% year-on-year since 2008.

To give an example of what can happen, in 2014 allegations emerged that SLPs had been used to funnel $1 billion out of banks in the former Soviet Republic of Moldova. The use of an SLP and a bank account in an EU country allows dodgy groups, for example from the ex-Soviet Union, to move their ill-gotten gains to tax havens under the cloak of respectability.

I am aware that the Scottish Government’s Finance Secretary, Derek Mackay, has recently written to the UK Government about SLPs. He sensibly pointed out in his letter that

“it is critical that due diligence checks are able to be made when SLPs are initially registered and when there are changes in partners, and that penalties are imposed on partners where the SLP does not comply with the relevant legislation”.

He went on to point out:

“The threat of serious organised crime does not respect borders and with the significant increase in cyber crime, it is essential that we take every step open to us to reduce this threat as much as possible”.

To that end, our new clause seeks an urgent review of SLPs that would, importantly, include taking evidence from the Scottish Government, from HMRC and from interested charities. We have crafted the new clause in the hope it will attract cross-party support, and I see no reason why anyone, other than those interested in encouraging criminality and tax evasion, would wish to oppose a review of this nature. I therefore urge the Minster to accept our new clause.

Surplus Target and Corporation Tax

Baroness Laing of Elderslie Excerpts

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

My hon. Friend rightly says that as well as reducing corporation tax rates, we did a lot to reduce some of the reliefs that have been used—and some that have been abused. Broadly speaking, that is the right direction of travel for our tax system.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

The prize for patience goes to Nigel Mills.

[Nigel Mills (Amber Valley) (Con)]

That is not a prize I get often. I welcome the Chancellor’s decision to further reduce the rate of corporation tax—I called for it in the Budget debate last week, so I ought to welcome it. To get the most benefit out of that, we need to simplify our business tax system further to make it more attractive. Will he therefore agree to hold a review to try to make our system as simple as it can be?

UK Economy

Baroness Laing of Elderslie Excerpts

Wednesday 29th June 2016 Commons Chamber

[Madam Deputy Speaker (Mrs Eleanor Laing)]

We now come to the Opposition day motion in the name of the Leader of the Opposition. I call John McDonnell to move the motion.

Finance Bill

Baroness Laing of Elderslie Excerpts

Tuesday 28th June 2016 Commons Chamber

[The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)]

Before I call the Minister to move Government amendment 114 and for the sake of clarity, I grant the Minister the Chair’s permission and the House’s sympathy in respect of his requirement to stand throughout the proceedings—or, indeed, to be in whatever position suits him so that he can spend several hours at the Dispatch Box with his current disability. He has the House’s sympathy, as I said, and he may do as he sees fit.

Clause 144

General anti-abuse rule: provisional counteractions

[The Financial Secretary to the Treasury (Mr David Gauke)]

I beg to move amendment 114, page 194, leave out lines 12 to 15 and insert—

“( ) notifies the person of the person’s rights of appeal with respect to the notified adjustments (when made) and contains a statement that if an appeal is made against the making of the adjustments—

(i) no steps may be taken in relation to the appeal unless and until the person is given a notice referred to in section 209F(2), and

(ii) the notified adjustments will be cancelled if HMRC fails to take at least one of the actions mentioned in section 209B(4) within the period specified in section 209B(2).”

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Clause stand part.

Government amendments 115 to 174, 178, 175 to 177 and 179.

Clause 145 stand part.

Government amendments 82 to 86.

Amendment 4, in clause 146, page 209, line 25, leave out from “penalty” to end and insert

“shall be 100% unless the GAAR Advisory Panel or an officer duly delegated by that panel considers that there are exceptional reasons for lessening that percentage.”

Government amendments 87 to 99.

Clauses 146 and 147 stand part.

Government amendments 100 to 110.

Government amendments 112, 111 and 113.

Schedule 18 stand part.

Government amendments 69 to 81.

Clauses 148 and 149 stand part.

Amendment 1, in schedule 19, page 516, line 21, at end insert—

‘(2A) A group tax strategy of a qualifying group which is a MNE group must also include a country-by-country report.

(2B) In paragraph (2A) “country-by-country report” has the meaning given by the Taxes (Base Erosion and Profit Shifting) (Country by Country Reporting) Regulations 2016.”

Amendment 5, page 516, leave out line 39 and insert—

‘(2) The director or directors of the head of the group are personally jointly and severally liable to a penalty of £25,000 if:”.

Amendment 6, page 517, line 1, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 7, page 517, line 5, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 8, page 517, leave out lines 11 to 15 and insert—

‘(5) At the end of that period, the director or directors of the head of the group—

(a) are personally jointly and severally liable to a further penalty of £25,000, and

(b) where the failure mentioned in sub-paragraph (4)(b) continues, are liable to a further penalty of £25,000 at the end of each subsequent month in which no such group tax strategy is published.”

Amendment 9, page 517, line 15, at end insert—

‘(6) Any director held personally liable to pay a penalty under this Part cannot be reimbursed by the head of the group or any entity within or associated with that group.

(7) If the head of the group or any entity as described in subsection (6) is found to have either fully or partially reimbursed a director or directors for the penalty for which they were personally liable, the head of the group or the entity will in turn be liable for a penalty of £100,000.”

Amendment 10, page 518, leave out line 24 and insert—

‘(2) The director or directors of the head of the group are personally jointly and severally liable to a penalty of £25,000 if:”.

Amendment 11, page 518, line 29, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 12, page 518, line 33, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 13, page 518, leave out lines 39 to 43 and insert—

‘(5) At the end of that period, the director or directors of the head of the group—

(a) are personally jointly and severally liable to a further penalty of £25,000, and

(b) where the failure mentioned in sub-paragraph (4)(b) continues, are liable to a further penalty of £25,000 at the end of each subsequent month in which no such group tax strategy is published.”

Amendment 14, page 518, line 43, at end insert—

‘(6) Any director held personally liable to pay a penalty under this Part cannot be reimbursed by the head of the group or any entity within or associated with that group.

(7) If the head of the group or any entity as described in subsection (6) is found to have either fully or partially reimbursed a director or directors for the penalty for which they were personally liable, the head of the group or the entity will in turn be liable for a penalty of £100,000.”

Amendment 15, page 520, leave out line 12 and insert—

‘(2) The director or directors of the company are personally jointly and severally liable to a penalty of £25,000 if:”.

Amendment 16, page 520, line 17, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 17, page 520, leave out lines 27 to 31 and insert—

‘(5) At the end of that period, the director or directors of the head of the group—

(a) are personally jointly and severally liable to a further penalty of £25,000, and

(b) where the failure mentioned in sub-paragraph (4)(b) continues, are liable to a further penalty of £25,000 at the end of each subsequent month in which no such group tax strategy is published.”

Amendment 18, page 520, line 31, at end insert—

‘(6) Any director held personally liable to pay a penalty under this Part cannot be reimbursed by the head of the group or any entity within or associated with that group.

(7) If the head of the group or any entity as described in subsection (6) is found to have either fully or partially reimbursed a director or directors for the penalty for which they were personally liable, the head of the group or the entity will in turn be liable for a penalty of £100,000.”

Schedule 19 and clause 150 stand part.

Amendment 19, in schedule 20, page 534, line 23, at end insert

“, or P has introduced Q to a person R with whom P has a business relationship, where P knows or should know that R is likely to facilitate Q to carry out offshore tax evasion or non-compliance.”

Amendment 20, page 535, line 5, at end insert

“; and P will be deemed to have known if P wilfully or recklessly failed to make such enquiries that a reasonable and honest person would have made”.

Schedule 20, clause 151, schedule 21, clauses 152 and 153, schedule 22 and clause 154 stand part.

New clause 4—Report on the workings of the General Anti-Abuse Rule—

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report on the workings of the General Anti-Abuse Rule.

(2) The report must include but need not be limited to—

(a) the number of meetings held by the General Anti-Abuse Rule Advisory Panel;

(b) the date by which the procedures of the Advisory Panel were published;

(c) the number of cases referred to the Advisory Panel and by whom;

(d) the number of cases on which a decision has been made by the Advisory Panel;

(e) the number of outstanding cases on which a decision has not been made by the Advisory Panel, and the dates on which those cases were first referred to the Advisory Panel.”

New clause 5—Report on the number of deliberate tax defaulters—

The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report containing the number of deliberate tax defaulters whose details have been published, and an estimate of the number of taxpayers who have been deterred from deliberately defaulting as a result of the provisions contained in section 94 of FA 2009 as amended by this Act.”

New clause 6—Report on the asset-based penalty for offshore inaccuracies and failures—

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report on the impact of the asset-based penalty for offshore inaccuracies and failures.

(2) The report must include but need not be limited to—

(a) how much tax revenue has been recouped due to this measure;

(b) the amount of monies paid in asset-based penalties; and

(c) the number of persons upon whom asset-based penalties have been levied.”

New clause 7—Report on the impact of the criminal offences relating to offshore income, assets and activities—

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report on the impact of the criminal offences relating to offshore income, assets and activities.

(2) The report must include but need not be limited to—

(a) the number of persons who have been charged with offences under each of sections 106B, 106C and 106D of TMA 1970;

(b) the number of persons who have been convicted of any such offence;

(c) the average fine imposed; and

(d) the number of people upon whom a custodial sentence has been imposed for any such offence.”

New clause 8—Whistleblowing in relation to tax evasion—

The Chancellor of the Exchequer shall conduct a review of arrangements to facilitate whistleblowing in the banking and financial services sector in relation to the disclosure of suspected tax evasion, and report to Parliament within six months of the passing of this Act.”

New clause 9—Estimated impact of extending the scope of the Register of People with Significant Control Regulations 2016—

The Chancellor of the Exchequer must, within 12 months of this Act coming into force, publish an estimate of the impact on levels of tax avoidance and tax evasion of extending the requirement placed on UK-incorporated companies by the Register of People with Significant Control Regulations 2016 to publish a register of people with significant control to companies incorporated in the Crown Dependencies and the Overseas Territories which have significant levels of trading activity within the UK.”

This new clause would require the Chancellor to publish an estimate of the impact on levels of tax avoidance and tax evasion of extending the current requirement on UK-based companies to publish information about people who have significant control over them to companies incorporated in the Crown Dependencies and the Overseas Territories which have significant levels of trading activity within the UK.

[Mr Gauke]

I begin by expressing my gratitude for your dispensation, Mrs Laing. I will, of course, take interventions, and I hope it will not disconcert Members if I remain standing at the Dispatch Box while doing so. There is a great deal to cover and a large number of amendments have been tabled by Opposition Members, many of which I shall have to cover briefly. I shall try to provide as much information as I can as quickly as I can and respond to points raised in the course of the debate.

Clauses 144 to 146 make administrative changes to the general anti-abuse rule—the GAAR procedure—and introduce a new penalty for those who enter into abusive tax arrangements. Clause 144 allows Her Majesty’s Revenue and Customs to make a provisional GAAR counteraction where it believes additional tax is due but the assessment time limits are due to expire. Clause 145 is an administrative change to strengthen the GAAR’s procedural efficiency. The GAAR procedure currently requires each user of the same type of marketed tax avoidance arrangements to be referred separately to the GAAR advisory panel. This is an inefficient use of HMRC’s and the advisory panel’s resources, so clause 145 corrects this. Clause 146 introduces a new penalty of 60% for taxpayers who enter into abusive tax arrangements that are counteracted under the GAAR.

The Government have tabled 84 amendments to clauses 144 to 146, making minor changes to ensure that the legislation works as intended, but let me respond now to new clause 4 and amendment 4, which relate to the GAAR clauses I have just outlined. New clause 4 asks the Government to conduct a review of the GAAR in a year’s time. The GAAR advisory panel is already required to publish anonymised reports of the cases it considers. It is difficult to see how this new clause could provide a better insight into GAAR cases than this.

Amendment 4 proposes that a penalty of 100% is introduced for the GAAR. While under HMRC’s existing penalty rules a penalty of 70% to 100% will usually be charged in cases of fraud, it is right for the GAAR penalty to sit just below this. Under the new measure, tax avoiders can be charged penalties under the existing penalty rules and the GAAR penalty up to a maximum of 100%. As such, the amendment does little more than what we are already suggesting, and I therefore urge the House to reject it.

Clause 147 and schedule 18 introduce the new serial avoidance regime and a new threshold condition for the existing POTAS—promoters of tax avoidance schemes— regime introduced by clause 148. The new serial avoidance regime will tackle those tax avoiders who use multiple tax avoidance schemes. It will work by putting avoiders on notice when HMRC defeats a scheme they have used. If they use further schemes and HMRC defeats them, they will face serious and escalating sanctions, including a penalty starting at 20% of tax understated and reaching 60% for a third scheme defeat while under notice. Clause 148 introduces a new threshold condition for the promoters of tax avoidance schemes regime so that promoters who have promoted three schemes that have been defeated by HMRC over an eight-year period risk entering the POTAS regime.

The Government have tabled 27 amendments to clause 148 and schedule 18. The amendments to schedule 18 provide for those who try to avoid tax through companies they own or partnerships to be brought within the scope of the new regime. Amendments to clause 148 provide for POTAS to cover circumstances where tax avoidance is promoted through associated persons. The remaining amendments make minor changes to ensure the schemes work as intended.

Clause 149 introduces a new requirement for large businesses to publish their tax strategies, ensuring greater transparency about their tax approach to HMRC, shareholders and the public. Transparency promotes good tax compliance while providing a fairer, more stable and competitive environment in which to do business. The strategy published by businesses must cover the areas specified in legislation, be updated annually and remain accessible. A penalty may be chargeable if a strategy is not published or if the information contained does not meet the requirements of the legislation.

The Government are also committed to tackling cases of aggressive tax planning. Schedule 19 introduces a new special measures process which will apply sanctions to large businesses that persistently undertake aggressive tax planning or refuse to work with HMRC in a collaborative and transparent way. Taken together, clause 149 and schedule 19 will help to reduce the appetite for aggressive tax planning and improve large business tax compliance.

On the amendments tabled by the Opposition, amendments 5 to 18 would collectively introduce a requirement for directors of a business to be personally, jointly and severally liable for a penalty of £25,000 should the business fail to comply with the legislation, rising to a monthly charge of £25,000 after the initial 12 months have passed. Amendments 9, 14 and 18 also propose that the said named directors should not be reimbursed in any way and would impose further penalties.

These amendments are disproportionate and go against the principle of encouraging behavioural change across businesses. Boards take a collective responsibility for any decisions made on behalf of their businesses and their tax strategy is no exception. Ultimately, this Government believe any penalty is a business responsibility, not one to be pursued across a group of directors. In summary, these amendments would result in less clarity around any sanctions, not more, and I urge the House to reject them.

The amendment to clause 149, tabled by the right hon. Member for Don Valley (Caroline Flint), seeks to require large multinational enterprises to publish a country-by-country report on their activities within their published tax strategy. As I have set out, this Government fully share her aims of increasing transparency and clamping down on avoidance and evasion wherever it occurs. Indeed, this Government have led the way in calling at an international level for public country-by-country reports. However, I do not believe that her amendment would help to achieve the objectives that we all share. It is technically flawed, and hence would not achieve the stated transparency or pro-business objectives that we all espouse.

The right hon. Lady has said that multinational businesses such as Google would be forced to publish headline information about where they do business, the money that they make and the tax that they pay, but that is not the case. According to Government legal advice, the amendment would, in practice, place such a requirement only on UK-headquartered multinationals. Foreign-headquartered multinationals such as Google would not be caught at all, and that undermines the transparency objective of the amendment.

The amendment also risks putting UK multinationals at a competitive disadvantage by imposing a reporting requirement that does not apply to foreign competitors operating in the same market. For example, a company headquartered in the UK, whether on the mainland or in Northern Ireland, would have to file public reports, but a company headquartered in the Republic of Ireland—or, indeed, pretty well anywhere else—would not. That, I think, contradicts the level playing field objective whose importance the right hon. Lady has emphasised. At a time of increased uncertainty, we should be particularly cautious about disadvantaging UK-based businesses and imposing on them a further commitment that does not apply to their foreign competitors.

Finance Bill

Baroness Laing of Elderslie Excerpts

Monday 27th June 2016 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

I beg to move amendment 22, page 14, leave out lines 7 to 10 and insert—

““(1A) Where this Chapter applies to any living accommodation—

(a) the living accommodation is a benefit for the purposes of this Chapter (and accordingly it is immaterial whether the terms on which it is provided to any of those persons constitute a fair bargain), and

(b) sections 102 to 108 provide for the cash equivalent of the benefit of the living accommodation to be treated as earnings.””

[The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Government amendments 23 to 26.

Clause stand part.

Clauses 8 and 9 stand part.

Amendment 2, in clause 10, page 15, line 29, after “omit”, insert

“, except in the case of a low emissions vehicle,”.

Amendment 3, page 15, line 38, at end add—

“(3) For the purposes of this section, a “low emissions vehicle” means any car first registered on or after 1 April 2017 which emits 0.06g or less of nitrous oxides per kilometre.”

Clauses 10 to 12 stand part.

That schedule 2 be the Second schedule to the Bill.

Clause 13 stand part.

Government amendment 27.

Clauses 14 and 15 stand part.

Amendment 180, in clause 16, page 24, line 35, at end add—

“(2) The Chancellor of the Exchequer shall undertake a review of the impact of the abandonment by HMRC of its valuation check service for Small and Medium-sized Enterprises, including its associated impact on employee share ownership schemes, and report to Parliament within six months of the passing of this Act.”

Clause 16 stand part.

Government amendment 28.

That schedule 3 be the Third schedule to the Bill.

Clauses 17 and 18 stand part.

New clause 1—Review of income tax treatment of workers providing services through intermediaries—

“The Chancellor of the Exchequer must conduct a strategic review of the impact on workers defined as providing services through intermediaries of their treatment for income tax purposes, including the differential impact on different types of worker, and must publish the report of the review within six months of the passing of this Act.”

New clause 3—Tax treatment of workers employed through intermediaries—

“The Chancellor of the Exchequer must, within six months of the passing of this Act, publish a report on the impact of the current system of employment through intermediaries on the treatment for tax purposes of the employment income of workers employed through an intermediary or umbrella company, including the role of intermediaries and umbrella companies.”

New clause 10—Employee share schemes: value for money—

“The Chancellor of the Exchequer shall, within six months of the passing of this Act, publish a report giving HM Treasury’s assessment of the value for money provided by each type of employee share scheme.”

[Mr Gauke]

It is a great pleasure to speak on the Government measures in this group. I will say at the beginning of my remarks that, as I mentioned to Mr Speaker earlier, and as you will have no doubt noted, Mrs Laing, I am somewhat incapacitated by a back strain. I will of course take interventions, but with your permission, I will remain standing during those interventions—bobbing up and down will be a little discomforting. May I have your permission?

[The First Deputy Chairman]

Please—[Interruption.] No, do not sit down. I was about to say that if the Minister had not made that point I was going to offer my permission. Having once been in the dreadful position of standing at that Dispatch Box on crutches with a broken leg, I know that although it is possible to stand still, going up and down is exceedingly difficult. I am sure the whole House has every sympathy for the Minister and will concur in giving him permission to remain on his feet.

[Mr Gauke]

Thank you, Mrs Laing. I am grateful for those remarks.

The measures I will outline ensure the simple, clear and fair tax treatment of employment income and benefits, strengthen incentives to choose the cleanest cars and vans, and ensure that those who have used artificial arrangements to avoid paying tax pay their fair share. Given the number of measures selected for debate, I will briefly set out how I will speak on them today. I will first discuss clauses 8 to 11, concerning company car taxation and the van benefit charge. I will then outline clause 7 and clauses 12 to 17, which address tax treatment of income and certain benefits. Finally, I will outline clause 18, which addresses disguised remuneration schemes.

I turn first to clauses 8 to 11. Clause 8 will increase the appropriate percentage for conventionally fuelled cars by three percentage points in 2019-20; it will also widen the tax advantage of ultra-low emission cars over conventionally fuelled cars in 2019-20 compared with previously announced plans. As a result of the changes, in 2019-20 a basic rate taxpayer driving a popular ultra-low emission company car will be £113 better off. Clause 9 makes a minor technical update to ensure the legislation works as is intended in 2017-18 and 2018-19. The update applies to a small number of rare company cars. It is estimated that exposure to nitrogen dioxide is linked with 23,500 deaths annually in the UK, costing approximately £13.3 billion.

As was announced in the autumn statement in 2015, clause 10 retains the three percentage point supplement for diesel company cars until 2021. That will support the UK’s transition from diesel cars to cleaner, zero and ultra-low emission cars. As a result, a basic rate taxpayer with an average ultra-low emission company car will save an additional £150 in 2016-17, compared with an employee who has an average diesel company car.

Clause 11 retains the van benefit charge for zero-emission vans at 20% of the rate paid by conventionally fuelled vans for 2016-17 and 2017-18, rather than increasing it to 40% and 60% as currently planned. That means that a basic rate taxpayer who drives a zero-emission van will save £126 in 2016-17 and £258 in 2017-18. Together, clauses 8 to 11 will incentivise business and employees to take up the cleanest cars and vans. That will help to ensure that the market for those new technologies becomes established in the UK, and to support the UK’s carbon emission and air-quality targets.

In anticipation of what we will hear from the Opposition, let me turn to amendments 2 and 3 to clause 10. The amendments would require the exemption of diesel cars from paying the supplement if they achieve the same level of nitrogen dioxide emissions as petrol cars. I appreciate that hon. Members want to incentivise people to purchase the cleanest cars, but the amendments would only introduce confusion and uncertainty. They are not linked to the wider regulatory programme to achieve the latest air quality standards, even when cars are driven on our roads. Clause 10 retains the supplement until 2021 when those new standards will be mandatory for all new cars. That approach is transparent and easy to understand, and it will give consumers confidence that all new diesel cars are comparable to petrol cars. Our approach incentivises people to purchase the cleanest cars, and in anticipation of what will be said later, I hope that Labour Members will not press the amendments to a vote.

Let me consider those clauses that clarify and simplify the tax treatment of income and certain benefits, and ensure fairness in the tax system. Clause 7 will clarify how the cash equivalents of certain taxable benefits are calculated, and ensure that fair bargain does not apply to those taxable benefits in kind where the level of computing the value of the benefit is set out in statute. The Government have made minor technical changes in amendments 22 to 26, which ensure that the legislation works as intended.

Clause 12 and schedule 2 will provide clarity that all income from sporting testimonials for an employed or previously employed sportsperson will be taxable. However, we are aware that careers in sport can be short, so we have also introduced an exemption for the first £100,000 of income received from a sporting testimonial that is not contractual or customary. The Government believe that that is a fair compromise, and the vast majority of employed sportspersons who have testimonials will not be impacted. Clause 13 introduces a statutory exemption for certain benefits costing up to £50 that employers provide to their employees. That will simplify the tax treatment of those benefits and reduce the administrative burden for employers. To ensure that the exemption is not misused, a £300 annual cap will apply in certain circumstances. That sensible and simplifying measure will reduce burdens on employers and HMRC alike.

Clause 14 will ensure that no individual or business can obtain an unfair tax advantage through claiming tax relief on home-to-work travel and subsistence expenses. It is an established principle in the UK that people are not able to claim tax relief on the cost of ordinary commuting, and the vast majority of workers are not able to do so. Individuals who are engaged through intermediaries—such as umbrella companies and their employers—currently benefit from that relief and the cost of commuting from home to work, simply because of the way they are engaged to work.

The Economy and Work

Baroness Laing of Elderslie Excerpts

Thursday 26th May 2016 Commons Chamber

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

After years of abandoning and punishing the most vulnerable people in society, we get a Queen’s Speech that talks about introducing legislation to tackle some of the deepest social problems and to improve life chances for the most disadvantaged. However, we all know the truth: this Government’s grand rhetoric is rarely matched by policy. In fact, their policies tend to be regressive and punitive, pushing more and more people into poverty. No one living in poverty is there as a result of their own doing; the perpetuation of poverty and the rise in child poverty since 2010 is a clear failing of Government.

A recent report from Sheffield Hallam University, also referred to by the hon. Member for Glasgow Central (Alison Thewliss), looks at the uneven impact of welfare reform, revealing that the north yet again takes the biggest hit on welfare reform while the south, outside London, remains largely unscathed. Some 83% of the overall financial losses fall on families with children. The north-east alone is set to lose £620 million a year by 2020-21, which is a loss per working-age adult of £380 a year. South Tyneside, the council which covers my constituency, is the sixth worst-affected local authority. Even the introduction of the living wage has left the lowest-paid workers little better off, if at all. One of my constituents, a carer, is now in a desperate financial situation because the new living wage has taken her over the threshold to be eligible for carer’s allowance. An extra £8 a week has cost her £62 in lost benefits.

If this Government really care about life chances, they would not be running into the ground the services people that people rely on the most. They would not have closed over 800 Sure Start centres. They would not be presiding over a crisis in teacher recruitment. They would not be focusing resources on adoption to the detriment of social work that can keep families together. They would not be presiding over the collapse of the NHS and social care. They would not have made such a mess of the benefits system to the extent that more than 1 million food parcels have been handed out. Disabled people would not be losing more than £1,500 a year. The terminally ill would not be being declared fit for work and having their income slashed. Homelessness would not have doubled since 2010. We would not have rising wealth inequality in areas blighted by high unemployment. The Children’s Society has reported that children and young people in Britain are among the unhappiest, unhealthiest, poorest and least educated in the developed world.

This Queen’s Speech identifies an impotent and careless Government whose numerous U-turns reveal deep problems at the core of their policy making. Of the 30 announcements, we have heard 28 of them before, because we have for the past year had to put up with a Government obsessed with internal politics. We all know that the EU referendum has nothing at all to do with whether or not we are better off in or out of Europe. The Government have taken up precious parliamentary time with a prolonged, unedifying fight between—[Interruption.] You can have your say later. It is a fight between two middle-aged public school chums over who is going to run the country.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Even though that was said from a sedentary position, it is not “you” who has had your say—it is “he” who has had his say.

[Mrs Lewell-Buck]

Thank you, Madam Deputy Speaker. I am going to end by saying that if this is the Prime Minister’s last Queen’s Speech, I am sure it is not a legacy that he or anyone on the Government Benches should be proud of.

[Several hon. Members rose—]

[Madam Deputy Speaker]

Order. After the next speaker, I will have to reduce the time limit to three minutes. People will have to start speaking very quickly and take limited interventions. Still on four minutes, however, is Mr Craig Tracey.

--- Later in debate ---

[The Secretary of State for Work and Pensions (Stephen Crabb)]

It is a real pleasure to conclude this debate on the Gracious Speech. I thank all hon. Members, on both sides of the House, who have made contributions today. A wide range of subjects has been covered by Members from all parts of the United Kingdom and from both rural and urban communities. It has been a very good debate.

As the Prime Minister made clear, the Queen’s Speech is about using the strong economic foundations we have built to make a series of bold choices that will help to deliver opportunity for all at every stage of their lives. Improving life chances starts as a foundation for ensuring a healthy, strong and growing economy. Through our long-term economic plan, that is what we are doing: the deficit is being cut, the economy is growing and it is forecast to grow faster than in any other G7 economy this year.

It is true that, thanks to the strength in the economy, we have seen some remarkable things in our labour market in recent years: we have seen the highest level of employment on record ever and the annual rise in the employment rate is the largest anywhere in the G7. Now, we are not complacent. We know we need to go further. However, we also know that behind this picture of national economic recovery are hundreds of thousands of individual stories of people whose lives have been transformed. In the past year alone, over 400,000 people have moved into work. We have more women in work than ever before. In the past two years, more than 300,000 more disabled people have moved into work. We have also seen big increases in youth and long-term employment. I am delighted that the shadow Work and Pensions Secretary, for the very first time in six years, has at the Dispatch Box welcomed the fact that unemployment is falling.

Let us just remind ourselves that since 2010 more than 2.5 million people have moved into work. That is more than the whole population of the fantastic city of Leicester moving into work each and every year we have been in government. It means 764,000 more households in work. It means nearly half a million more children growing up seeing a mum or a dad go out to work each day. By any measure, that is a really encouraging record. We salute, in particular, our small businesses and our entrepreneurs who are the real engines of this jobs recovery, something recognised in the excellent contribution from my hon. Friend the Member for North East Hampshire (Mr Jayawardena).

This recovery has not happened by chance or by accident, and we know that we need to go further. It happened because we had a clear economic plan for jobs and growth. I see a couple of Opposition Members shaking their head. Let us remind ourselves of what they left behind in 2010. Unemployment had risen by nearly half a million. The number of women out of work went up by a quarter. Youth unemployment rocketed by 44%. Long-term unemployment doubled. Nearly 1.5 million people had spent most of the previous decade on out-of-work benefits. That was an appalling record of wasted lives and wasted potential left by the previous Labour Government. The fact is that during 13 years in government, the Labour party stopped believing in the power of work to transform people’s lives. The Labour party gave up on welfare reform. It became the party of welfare over work. It was far too relaxed about parking people for a whole lifetime on benefits. That is why it takes Conservatives in government, with Conservative values, to bring the reforming spirit needed to transform the life chances of people in our—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. It is impolite to make a noise when the Secretary of State is speaking. Members should be arguing with him, not chattering about him.

[Stephen Crabb]

Thank you, Madam Deputy Speaker.

As one nation Conservatives, we will not be complacent, write people off or walk by on the other side, and that is why we are developing a plan for transforming life chances.

Bank of England and Financial Services Bill [Lords]

Baroness Laing of Elderslie Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

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

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Amendment (a) to new clause 12, after paragraph 2A(1)(b) insert—

“(1A) If, before the term of office has begun, the Treasury Committee reports to the House that the appointment should not be confirmed, the Treasury shall not continue with the appointment unless the House of Commons resolves that the appointment should be confirmed.”

Amendment (b) to new clause 12, at end insert—

“In Schedule 1ZA to the Financial Services and Markets Act 2000, in paragraph 3(1), at the end insert “, except in the case of the chief executive of the FCA, who shall be appointed for a reappointable term of five years”.”

New clause 1—Chief Executive of the Financial Conduct Authority—

‘(1) Schedule 1ZA of the Financial Services and Markets Act 2000 is amended as follows.

(2) After paragraph 2(2) insert—

“(2A) The Treasury shall not appoint a chief executive without the consent of the Treasury Committee of the House of Commons.”

(3) After paragraph 4(1) insert—

“(1A) But a chief executive appointed under paragraph 2(2)(b) is not to be removed from office without the consent of the Treasury Committee of the House of Commons.”

(4) After paragraph 27 insert—

“References to Treasury Committee

28 (1) Any reference in this Schedule to the Treasury Committee of the House of Commons—

(a) if the name of that Committee is changed, is to be treated as a reference to that Committee by its new name, and

(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which those functions are exercisable.

(2) Any question arising under sub-paragraph (1) is to be determined by the Speaker of the House of Commons.””

New clause 2—Composition of the Court of Directors of the Bank of England—

“In making nominations to the Court of Directors of the Bank of England, the Chancellor of the Exchequer must have regard to the importance of ensuring a balanced representation from the nations and regions of the United Kingdom.”

New clause 3—Change in title of the Bank of England—

“The Bank of England shall be known as the Bank of England, Scotland, Wales and Northern Ireland; and any reference in any enactment to the Bank of England shall be taken as a reference to the Bank of England, Scotland, Wales and Northern Ireland.”

New clause 5—Sterling Central Bank—

“The Bank of England is renamed the Sterling Central Bank.”

This new clause would change the name of the Bank of England to reflect its position as the UK central bank and the UK’s shared currency.

New clause 6—Membership of the Monetary Policy Committee of the Bank of England—

“(1) Section 13 of the Bank of England Act 1998 is amended as follows.

(2) At the end of subsection 2(c), add “of whom one each must be nominated by the Scottish Government, the Welsh Assembly Government and the Northern Ireland Executive.”

This new clause seeks to ensure representation of the four nations of the United Kingdom on the Monetary Policy Committee.

New clause 7—Objectives of the Monetary Policy Committee—

“After subsection 11(a) of the Bank of England Act 1998 there is inserted—

“(b) maximum employment, and.””

This new clause would expand the mandated objectives of the Monetary Policy Committee to include maximum employment.

New clause 8—Bank of England Accountability and Devolved Legislatures—

“Within three months of the passing of this Act, the Chancellor of the Exchequer shall lay a report before both Houses of Parliament on the merits of ensuring that the members of the policy committees of the Bank of England, including the Governor, appear before the respective economy committees of the devolved legislatures of the UK at least once a year.”

New clause 13—Freedom of Information—

“(1) Schedule 1, Part VI to the Freedom of Information Act 2000 is amended as follows.

(2) In the entry relating to the Bank of England, leave out all the words after “England.””

Amendment 6, in clause 9, page 7, line 19, at end insert—

‘(6A) The Comptroller may enquire into the Bank’s success in achieving its stated policy objectives but shall not enquire into the desirability of such objectives having been set.

(6B) The Comptroller shall submit reports arising from the exercise of his powers under subsection (6A) to the Treasury Committee of the House of Commons (or any successor committee exercising the same or equivalent functions).

(6C) The Comptroller shall lay before Parliament, and publish, each report arising under subsection (6B) promptly unless, in the opinion of the Treasury Committee, publication of a particular report would be likely materially adversely to affect the stability or functioning of the UK’s financial or banking system.”

Amendment 7, in clause 11, page 12, line 2, at beginning insert

“Subject to section 7ZA(6A) of the Bank of England Act 1998,”

Government amendment 3.

[Harriett Baldwin]

I would like to start by emphasising that the Treasury Committee is an esteemed Committee of this House and provides exceptional scrutiny of the Government and their regulators. Through its programme of pre-commencement hearings, it questions appointees to several posts before they start work. After appointees have started, they can expect to appear regularly before the Committee, and the public can expect the Committee to hold appointees firmly to account.

The Government welcome that scrutiny of appointees—it is a critical democratic function. That is why we have tabled new clause 12 to ensure in statute that the Committee always has the chance to scrutinise a new Financial Conduct Authority chief executive before they start work.

Budget Resolutions and Economic Situation

Baroness Laing of Elderslie Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. There are still a great many Members who wish to speak, so I will have to reduce the limit to four minutes.