Equitable Life

Geoffrey Clifton-Brown Excerpts

Thursday 26th February 2015 Commons Chamber

[Stephen Lloyd]

That is a very important point. The whole system—from the perspectives of finance, prudence and proper rule of contract law—fell apart under Equitable Life. It completely collapsed. When something like that happens in a country like the United Kingdom, the duty of the Government, irrespective of some of the broader issues, is to provide proper compensation, because otherwise the whole fabric becomes extremely vulnerable.

I find it bewildering that none of the senior managers of the old Equitable Life—and none of the people who were in charge of the marketing side or the investment side—went to jail. If I, as a Member of Parliament, find that bewildering, I can imagine the profound frustration that so many of our constituents must feel, given that they were doing the right thing. This was a company that was regulated, regulated within an inch of its life—that was the whole point of the sector—yet, through no fault of their own, it collapsed, and, a few years later, the parliamentary ombudsman said that there had been a systemic failure of regulation. All those senior managers and executives, whom we all knew, must have been aware of what was happening.

I greatly appreciated what was said earlier by the hon. Member for Stretford and Urmston (Kate Green). When she bought an Equitable Life pension which she kept for a few years, all the marketing suggested that the company was rock solid and the purchase almost a steal. She was told “You really must invest in this.” Those people must have known what was happening, and I fail to understand why they were not penalised.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My hon. Friend is putting his case very articulately. When Mr Ralph Williams, along with a large group of my constituents, came to see me about this whole matter, one of the points that they made most strongly was that they were nearly all elderly. According to a parliamentary answer that I received on 10 February, only £990 million of the £1.5 billion total has been paid out. The Government are profiting from people who are dying at this very moment. Is it not only fair for everyone, including the annuitants, to be paid whatever the Government have agreed, in full, now?

[Stephen Lloyd]

I thank my hon. Friend for his powerful intervention, and I look forward to hearing what the Minister has to say in response to it. People are dying: there are no two ways about it, because of the age profile.

Another constituent of mine, David Stevens—a distinguished teacher for many years in Eastbourne, a former mayor and, as it happens, a Conservative councillor, who is also a very decent chap—lost out hugely in the Equitable Life debacle. He lost just under 80% of the worth of the pension in which he had invested for all those years.

This issue is about real people. That is why we are here, and why the all-party parliamentary group receives so much cross-party support. It is not just that we all know many constituents who are suffering and have experienced a profound loss despite having done the right thing, and despite being led to believe that the industry was heavily regulated. As I stressed at the beginning of my speech, I have believed—as others do—that this is a point of honour ever since I was elected in 2010, which is why I joined the all-party parliamentary group.

In a civilised country like the United Kingdom, people are often rightly encouraged to save and be prudent so that they are less of a burden on the general taxpayer. Hundreds of thousands of people did that on the basis of an absolute assurance that this was a properly regulated industry, and then lost out through no fault of their own. I have always believed that senior figures in the Treasury must have known that Equitable Life was wobbly, but many people have received 80% less than they should have received, and that is unacceptable.

I was delighted to speak today. I hope that both the Government and the Opposition will provide some succour.

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[Robert Neill]

My hon. Friend makes an entirely fair point. This should all have been sorted out before the Government came on to the scene. The question of who was to blame and why ultimately requires almost a Crichel Down sort of approach—we must all accept responsibility for what happens under regulators who were not politicians. We must accept that it was done and must now resolve it. Had it been resolved sooner, there might have been more money around to deal with the issue. However, given where we are now and that the economy is improving, we can certainly do justice to people through a sensible series of staged payments, starting with those who are in the greatest need and who are most vulnerable. It is reasonable to ensure in the course of the Parliament that proper justice is done.

Let me give a sense of the impact on individuals. I have one constituent who makes the point that having invested sensibly his income has effectively been cut by some £20,000 a year. To a pensioner, that is an awful lot of money and they have had to downsize from their long-established family home. Another constituent has an acknowledged loss of £61,000 and is some £47,000 adrift with the payments out. That is not fair for somebody who has worked hard and is now in no position to supplement their income for the future.

Another very elderly gentleman had to wait some 18 months—because, frankly, of ineptitude and lost correspondence—to even receive acknowledgement of his entitlement. He should not have to come to his Member of Parliament to escalate these matters. That is something that any sensible and well-run compensation scheme should deal with as a matter of course. I am sure we all hope eventually to overcome the difficulties for our constituents, but they should not be happening in the first place.

[Geoffrey Clifton-Brown]

I am sorry to reiterate the point I made in an earlier intervention, but one member of the group of people who came to see me was elderly and, if he dies, his widow will get only 50% of the 22% he is entitled to, which is already pretty measly. Is it not incumbent on the Government to make payments now, in full, so that at least people can have that small amount of money to pass on to their dependants?

[Robert Neill]

On that basis, it is particularly important that we deal with the pre-1992 people, who are generally the oldest, but it is also important to have a proper, staged programme in place to deal with everyone.

When I was a lawyer, I accepted, as I think anyone would, that it was not possible to deliver for a client everything in their legitimate claim, because money might not be available or there might be delays. A settlement would be reached and a sensible discount accepted as a resolution, but I do not think that anybody would regard 22% as being a fair settlement of a claim. The Minister is an honourable woman and she must tell us today that she recognises that we are obliged, as a matter of honour, to give the people affected a sum much closer to that of their undisputed loss. As has been said, the quantum is not in dispute—it is a proven fact. We now need to say that, because of the improvement in the economy, we can do better than we were originally able to, for whatever reason. That is the honourable and legitimate thing to do, and it would also restore faith in an important element of our financial sector.

I agree with the hon. Member for Coventry North West and I hope there is enough that we can all agree on. The wording of the motion itself gives the Government the flexibility, provided there is good will—I am sure there is—to achieve its aims in a fair way for the people who have lost out through no fault of their own.

Finance (No. 2) Bill

Geoffrey Clifton-Brown Excerpts

Monday 15th April 2013 Commons Chamber

[Mr Gauke]

If the hon. Gentleman looks through the OBR’s analysis, he will see its explanation for growth being lower than it had anticipated, which has an impact on the fiscal numbers. It is more than explained by the disappointing performance of our export markets and the fact that we have not been able to export as much as the OBR had anticipated. The question is: how do we respond to that? Do we try to put in place a competitive tax system that makes businesses and industries want to locate and invest in the UK? We have heard nothing from Labour on that front, whereas this Government’s record is very strong.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In passing, may I say how hypocritical it is of Opposition Members to say what they have been saying about debt levels? Had they not left us with the debt level we inherited, we would not have this problem.

Despite what my hon. Friend might be hearing from the banks, my constituents tell me that they are lending only when they can get copper-bottomed, personal guarantees and that the lending they are getting is becoming ever more expensive. Will he look into the cost of export credit finance, which is a great hindrance to small and medium-sized businesses exporting?

[Mr Gauke]

My hon. Friend is absolutely right that we need to do what we can to ensure access to finance for those strong, viable small businesses that want to expand. That is why we have taken measures such as the funding for lending scheme and why we want to ensure that we have a business-friendly environment. I am grateful for his observations on export guarantees. He will be aware of some of the measures that the Government have taken over the past two or three years to try and support those exporting businesses. I note his comments and calls for us to go further.

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[Mr Gauke]

The hon. Gentleman and I have debated that point on a number of occasions. The important thing is to ensure that HMRC has the right expertise and skills, and the right people doing the job. In truth, there has been a significant reduction in HMRC staff over recent years, the vast majority of which occurred under the previous Government. We are increasing the numbers working in the enforcement and compliance area, but a lot of the answer is about ensuring that HMRC can work in the most effective way. I was struck by the increase in the number of tax professionals being trained by HMRC. We do want to invest in skills within HMRC. This is not simply a numbers game but, as it happens, the number of people working for HMRC in enforcement and compliance is going up, not down.

[Geoffrey Clifton-Brown]

While I strongly support the move in the Budget to reduce corporation tax, it is no good encouraging companies to come to this country if they then avoid paying corporation tax. Is it not important that big multinational companies pay corporation tax on the profits that they make in this country? Equally, is not my right hon. Friend the Prime Minister absolutely right to ensure that, through the G8, we have international agreements so that multinational companies cannot go around the world, especially to third world countries, and make profits without paying the relevant corporation tax?

[Mr Gauke]

My hon. Friend is absolutely right. We want an international tax system that ensures that economic activity is taxed where it occurs. That involves working internationally, and he is right to highlight the Prime Minister’s ambitions while we have the presidency of the G8, which will feed through to the G20 and the work that the OECD is already doing, which we support. It is right to have an international tax system that reflects the reality of how multinational businesses work.

Clauses 203 to 212 introduce the UK’s first general anti-abuse rule—GAAR—which will provide a significant new deterrent to abusive avoidance schemes and strengthen HMRC’s means of tackling them. On top of that, we are taking action to close a further 15 tax avoidance loopholes, which will increase tax revenues by almost £1 billion up to 2017-18, as well as protect future revenues. The Chancellor gave a clear warning in the 2012 Budget that the Government would take action on aggressive stamp duty avoidance. The Bill follows up on that warning by legislating against those who continue to avoid tax on property transactions. All these measures will stop people exploiting legislation to gain tax advantages that were never intended, and they will also encourage fairness.

Oral Answers to Questions

Geoffrey Clifton-Brown Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Osborne]

It is a credit to those who delivered the Olympic games that they came in under budget. The Olympic underspend is money which, if we spent it, would add straight to the deficit. It is not a pot of money sitting in some Government bank account. That would be a difficult decision to take and would have to be balanced alongside other decisions, but I make a broader point: we are trying to sort out the economic problems that this Government inherited. The problems that the hon. Gentleman talks about are problems caused by the deepest recession and the biggest financial crisis of the 21st century, and perhaps one day a Labour MP will get up and apologise for it.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

T6. As somebody who has had a long interest in exempting some of the poorest people in this country from tax—incidentally, an idea I held long before the Liberals pinched it from me—I congratulate my right hon. Friend on almost achieving this target in his autumn statement. When economic circumstances allow, could he be even bolder?

[Mr Osborne]

I am proud to be part of a coalition Government of Conservatives and Liberal Democrats who have delivered that policy and are delivering it. A very substantial increase next year will mean that individuals are £229 better off in real terms as a result just of the increase in April, so that is to be welcomed. As for when we get to £10,000, I have just announced the Budget date and we will have to wait for that Budget for tax decisions, but even if the £10,000 allowance were to increase with our current CPI forecasts from the OBR, it would hit £10,000 in 2015.

Financial Services Bill

Geoffrey Clifton-Brown Excerpts

Monday 10th December 2012 Commons Chamber

[Alison McGovern]

I thank my hon. Friend for that highly appropriate intervention. When the history of Great Britain is written, it will show that that part of the east coast of Scotland has had a great influence on economics throughout. The example from Dundee is a good one.

All hon. Members look back at global financial trading and markets and wonder how we got to the situation we found ourselves in. When the shadow banking market and complex derivatives and products were created, people became much more interested in them than in the real economy and the fundamentals of our economy. They saw the financial system as a servant to the rest of the economy rather than the other way around. I hope that view is shared broadly on both sides of the House. The Minister is nodding, but I am not entirely sure he agrees with that specific point. I will live in hope and imagine he does.

When the Minister is consulting on whether to broaden the Bill’s reach from the indices that I have mentioned to commodities, will he consider the impact of escalating food and oil prices not only on his constituents and mine, but on those who live closest to the extreme poverty line in the poorest countries? Will he consider the price of maize and wheat in very poor countries, where there is no social support system and no welfare state security net of the sort we have in this country? Will this country take a leading role in properly understanding what is happening in that market?

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

To use the increase in food commodity prices as an argument for increased control over derivatives trading is a little far-fetched. Surely increased prices have much more to do with the increased world population and the weather than they have to do with commodities trading.

[Alison McGovern]

As I have said, this morning I listened to a presentation from the UN Secretary-General’s special representative on global food security. We discussed the matters that the hon. Gentleman mentions, but there was strong interest in whether the trading of commodity derivatives has played a role or had an impact in increased prices. The hon. Gentleman may suggest that its effect is negligible, and I would be happy to see any evidence he can forward to me. As I try to understand the phenomenon, I am happy to look at numbers and think about the evidence. I am an empiricist if nothing else; we should always consider the evidence. One of the problems to date, however, has been the availability of information, and making it clear and evident for all to see. I have tried to make the point that people looking at the world economy could not, for specific reasons, necessarily see the problems relating to sub-prime mortgages. As my hon. Friend the Member for Nottingham East has suggested, we should try to get ahead of the problem and ensure that there are no longer problems that we simply do not see.

Finance Bill

Geoffrey Clifton-Brown Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Bill Esterson]

I thank my hon. Friend for her comments —[Interruption.] If the right hon. Member for New Forest West (Mr Swayne) would like to make an intervention, I will happily take it.

My hon. Friend is absolutely right that we are seeing a repeat of what happened in the ’30s, and we have none of the policies necessary to get us out of this situation.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Will the hon. Gentleman give way?

[Bill Esterson]

No, I am not going to take any more interventions; the hon. Gentleman can sit down.

We should be seeing the investment from the bank bonus tax and a temporary cut in VAT. The Bill—[Interruption.]

Eurozone Crisis

Geoffrey Clifton-Brown Excerpts

Thursday 3rd November 2011 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely right. I can think of far better ways to spend the money the previous Government wasted on preparing for the euro.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Will my hon. Friend assure the House that before the IMF gives any money to bail out the eurozone, sufficient stringent financial conditions are put in place to ensure that there is a realistic prospect of that money being repaid?

[Mr Hoban]

My hon. Friend makes an important point. Stringent conditions are linked to the packages offered to Greece, Ireland and Portugal, to ensure that the money is used well and wisely, and that the structural reforms that are needed to generate growth in those countries are implemented.

Public Service Pensions

Geoffrey Clifton-Brown Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

Of course I recognise that we must win that battle for hearts and minds. That is why I am providing so much information today, and urging public sector workers to look at the Government’s deal directly rather than necessarily relying on the information that they receive from their trade unions.

I do not think it right to suggest that the current teachers’ pension scheme is fair and sustainable. Let us consider the relevant contribution rates. When the scheme was introduced many decades ago, employer and employee each contributed 5%. Now the employer contributes 16%, while the employee contributes about 6%. There has been a big change in the affordability of the scheme, and so far all the cost has fallen on the taxpayer.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Does my right hon. Friend agree that the public sector should examine very carefully the generous revised terms that he has announced before considering strike action? Such action would merely serve to hurt millions in the private sector who pay their taxes in order to produce public sector pensions that they themselves can only dream of.

[Danny Alexander]

I do indeed hope that the trade unions will examine the proposals carefully. I was encouraged when they said that they would at our meeting this morning. Of course trade unions need to take time to understand the impact of the changes, but I hope that on reflection they will accept that the new offer constitutes a generous enhancement from the Government, and a fair and reasonable basis on which to reach agreement in the scheme-by-scheme talks that will take place during the next couple of months.

Global Economy

Geoffrey Clifton-Brown Excerpts

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

Of course we need to fill vacant properties, but we also need to allow new development. I think that we all want to protect areas of outstanding natural beauty in our country, and I have a constituency in the green belt, but planning decisions in this country are so lengthy, so bureaucratic and so costly that almost every study of the British economy that has been commissioned in the last decade has identified planning as an obstacle to further economic development. I think that we need to simplify those planning controls so that we can—yes—protect the countryside, but also secure decisions in reasonable time that allow development to take place. That is why we have introduced the presumption of sustainable development into the planning system.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

What further help can the Chancellor give small businesses, 4.5 million of which employ fewer than five people? If a quarter of them employed an extra person, that would make a huge dent in the unemployment register.

[Mr Osborne]

Small businesses are, of course, the engine of job creation in our country. As I have said, 500,000 new jobs have been created in the private sector over the last year. That is the second highest rate of job creation in the G7. As for specific help for small businesses, we avoided the increase in small business taxation that the Labour party included in its last Budget.

Finance (No. 3) Bill

Geoffrey Clifton-Brown Excerpts

Tuesday 3rd May 2011 Commons Chamber

[Mike Gapes]

Obviously I am not as accomplished as my hon. Friend at making contact with the criminal elements in London. However, he has raised a serious matter: there are criminal elements who exploit differentials in duty. We have seen that in Northern Ireland, when terrorist organisations financed their activities by smuggling fuel across the border from the south to the north and vice versa, and we have seen it in other contexts.

If we are to have a policy on fuel taxation, we need to ensure that if we introduce measures that discriminate in favour of certain people in remote rural communities, we do not also create loopholes that will be used in a discriminatory way to undermine the sense of justice and fairness that our people want us to exercise. If we have high levels of fuel taxation in this country, which we do, and if that causes problems for our road haulage industry and discrimination between rural and urban areas, when the review is conducted—I hope that the Government will support the amendment, because it is vital that we look at these issues in—

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

On a point of order, Mr Hoyle. The amendment is very narrowly drawn. I have listened to the debate very carefully. Can you tell the Committee whether it is in order to discuss the matters that have been raised in it, ranging from the abolition of child benefit to the widening of the A1 and, now, the abuse of red diesel?

[The Chairman]

The Chair will decide that. I find it strange that the hon. Gentleman, who is a very senior Member of the House, is questioning the judgment of the Chair.

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[The Chairman]

Order. I think we are now beginning to stray a little from the subject under discussion. I am sure we will return to the topic of the fuel levy.

[Geoffrey Clifton-Brown]

Hear, hear.

[The Chairman]

I do not think we really need to hear from the hon. Gentleman at this stage.

Autumn Forecast

Geoffrey Clifton-Brown Excerpts

Monday 29th November 2010 Commons Chamber

[Mr Osborne]

I think that is one that was prepared earlier. UK growth is forecast to be higher than that of Germany, France, many other European countries or the United States of America. It is also the case that the OBR is forecasting the creation of a million jobs. When it comes to the sovereign loan to Ireland, that is of a totally different nature from industrial support. It will be set out in the terms that I bring before the House of Commons. It is £3.25 billion, rather than the number that the hon. Gentleman gave.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My right hon. Friend has today reinforced the need for exports to help our recovery. What can he personally do to help reverse the situation whereby we export more to southern Ireland than we do to all the BRIC countries—Brazil, Russia, India and China—put together?

[Mr Osborne]

Since the Government were created there has been an absolute focus in foreign policy and trade policy on trying to increase our exports to those BRIC countries. The Prime Minister led major trade missions to India and China, the Business Secretary was very recently in Russia and I think that a trip is being proposed for Brazil, so we are seeking to expand our exports to the BRIC countries and, indeed, to some other important emerging economies such as Indonesia, Turkey and so on. We do not want to export less to southern Ireland or to anyone else in the advanced world; we just want to increase our exports to emerging economies.