Double Taxation Treaties (Developing Countries) Bill

Debate between Baroness Laing of Elderslie and Roger Mullin

2nd reading: House of Commons
Friday 16th December 2016 Commons Chamber

[Roger Mullin]

My hon. Friend makes a very good point.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I appreciate that the hon. Gentleman is answering the point made by the hon. Member for Aberdeen North (Kirsty Blackman), but—I am not particularly criticising the hon. Gentleman, who addresses this House with expert rhetoric and I can always hear what he says—I am taking this opportunity to make a point about other Members who are sitting in that corner of the Chamber. It is not just an old-fashioned rule that when you stand up to speak, you must address the Chair; if you do not, your voice goes into the corner and the Minister, other Front Benchers and I cannot hear what is being said. I appeal to Members that, even though they are currently exchanging interventions with one another in that corner of the Chamber, they please address the Chair, because everybody else wants to hear what is being said. I am not criticising the hon. Gentleman; I am just asking for his co-operation.

[Roger Mullin]

Thank you, Madam Deputy Speaker, for your wise words and for giving me the compliment that others in the Chamber wish to listen to me.

On the post-Brexit situation, I am sure that many hon. Members will acknowledge that there has been great concern about the imbalance between the negotiating ability of the UK Government, who have not employed negotiators for many years, and the capacity of the 27 remaining EU countries, which will have access to all the negotiators. It is thought that the Government will be at a disadvantage by having to face large numbers of really skilled negotiators and using people who may be less skilled.

I ask the Government to think about what we are saying about how treaties are negotiated between a country as powerful as the UK and countries such as Malawi and Namibia. I have been in countries that do not have any of their own negotiators. Even worse, they sometimes have to bring in people from a country in the developed world to assist them in negotiating with that very country. When I was in a country in Africa, I worked alongside a German who was funded by the aid organisation GTZ, and part of his task was to negotiate on behalf of that country with the German Government. We can see that there is scope for difficulty—compromise and the like—in all that. We need to make sure that we build capacity in such countries to enable them to ensure fairness. There is an ethical responsibility on us to ensure that we deal with those countries fairly, which is in the interests of everyone.

The Minister is keen to have sufficient time to respond, so I will leave my remarks there, other than to say that I am very grateful to hon. Members for staying and showing an interest in what, for me, is an important matter. I wish everyone a happy Christmas.

Chilcot Inquiry and Parliamentary Accountability

Debate between Baroness Laing of Elderslie and Roger Mullin

Wednesday 30th November 2016 Commons Chamber

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) is not giving way.

[Roger Mullin]

Thank you very much, Madam Deputy Speaker.

I want to compliment one speech that I heard today, and it is that of the hon. Member for North Thanet (Sir Roger Gale). In his usual understated way, he made some of the most telling observations about why we should still care about what happened and about the need to learn the lessons. I cannot see how it can be argued that we can learn the lessons if we are unwilling critically to review the results of the Chilcot process.

I was critical when my constituency predecessor in Kirkcaldy and Cowdenbeath set up the inquiry—as I am critical now—that it was not a judge-led inquiry. I have also been critical in the House about Sir John Chilcot’s decision to invoke the Maxwellisation process, because he was not required to do so. That process allowed those who were criticised in the report to be the only ones to be given notice of what was being said about them and the only ones allowed to introduce new evidence into the process. For those reasons alone, this House needs to review and make its own judgment about the evidence. For me and many hon. Members from whom I have heard today, it is most telling that people recognise that the most important thing about the Chilcot report is not his personal views or interpretation, but the evidence that was presented, which this House is required to review.

I for one have confidence in the Public Administration and Constitutional Affairs Committee, particularly in its Chairman, the hon. Member for Harwich and North Essex (Mr Jenkin), whom we are asking to take this forward. If there is any reason at all for why we need further consideration by the Committee, it was given by the right hon. Member for New Forest East (Dr Lewis) when reporting some of his conversations with Sir John Chilcot in the Liaison Committee. He asked a question about Mr Blair and if I quote him correctly, Sir John’s response was:

“You would have to ask him.”

How does this House ask him without asking him?

Finance Bill

Debate between Baroness Laing of Elderslie and Roger Mullin

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.

Finance Bill

Debate between Baroness Laing of Elderslie and Roger Mullin

Tuesday 21st July 2015 Commons Chamber

[Roger Mullin]

So that, no doubt, explains why you could not think up a reasoned amendment.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I let the hon. Gentleman get away with it the first time, but now that he has done it for the second time, I must point out to him that when he says “you” he means me, not the hon. Lady. I am quite sure that he is addressing his remarks not to me, but to the hon. Lady.

[Roger Mullin]

My apologies, Madam Deputy Speaker.

Our amendment starts by stating:

“That this House declines to give a Second Reading to the Finance Bill because it fails to address the real economic needs of the country”.

As I sat through the Budget speech last week—in growing incredulity, it must be said—my greatest concerns were threefold: first, the crude and brutal attacks on protections for the most vulnerable in our society; secondly, the failure to address adequately the challenge of productivity in our economy—despite the remarks of the Minister at the Dispatch Box today, I will try to demonstrate why the Bill fails to address those requirements; and, thirdly, the impact on regional and national economies, not least in Scotland.

On receiving a copy of the Finance Bill and its associated papers, my concerns have not abated. Indeed, through reading the detail in the Bill, further concerns have come to light, and it is therefore my intention—and that of my colleagues—to table a series of detailed amendments in Committee.

Yesterday’s debate on the Welfare Bill exposed many of the negative effects that Government policy will have on the poor, the disabled, the vulnerable, the young, and in-work families. The Finance Bill adds another burden on hard-pressed families who will face a rise in national insurance premiums as a result of the increase in insurance premium tax.