Leaving the EU: Economic Impact of Proposed Deal

Kevin Hollinrake Excerpts

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

No, not at all. The deal would, first, resolve the three critical issues on which the withdrawal agreement focuses: the Northern Ireland-Ireland border; the situation as it relates to EU and UK citizens; and the financial arrangements that we will enter into as we leave the European Union. Critically, it would give us time to put into effect the political declaration, which is the other part of what has been negotiated, until the end of 2020.

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

With the Scottish economy growing at half the rate of the rest of the United Kingdom, can my right hon. Friend offer any advice on economic growth to the Government north of the border?

[Mel Stride]

My advice, although I doubt very much that the Scottish National party will take much advice from me, is, first, get behind the deal and let us get certainty and increase investment; and secondly, accept the result of the 2014 referendum, stay with the United Kingdom and do not end up in a situation that creates a border between the country of Scotland and the rest of the United Kingdom.

Making Tax Digital

Kevin Hollinrake Excerpts

Tuesday 19th February 2019 Commons Chamber

[Mel Stride]

My hon. Friend is absolutely right to observe that the smallest companies are, almost by definition, likely to find this change more onerous, and I will take his points on board. I certainly reassure him that HMRC will take a light-touch approach to penalties in all cases, particularly those involving small companies. Provided that individuals and businesses are not wilfully trying to avoid or change the amount of VAT that is due, we will take a proportionate and light-touch approach.

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

I draw the House’s attention to my entry in the Register of Members’ Financial Interests about my continuing business interests. My right hon. Friend has taken a very considered approach to the threshold of eligibility and the pace of the roll-out. Will he confirm not only that he will continue that approach in the next phase of the roll-out, but that our default position should be to reduce rather than increase the bureaucratic burden on small businesses?

[Mr Speaker]

The nation will be pleased to know that the hon. Gentleman is a distinguished estate agent.

Exiting the European Union (Financial Services)

Kevin Hollinrake Excerpts

Monday 18th February 2019 Commons Chamber

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

It is a pleasure to be called in this important debate. I must say that I am at a bit of a loss as to why the hon. Member for Oxford East (Anneliese Dodds) has such an issue with these statutory instruments. They are simply about bringing current legislation from the European Union into domestic law; there are no significant policy changes. I was also a little mystified as to why she thought this was an appropriate time to take no deal off the table, particularly when this is such a sensitive time in our negotiations.

I would like to raise a couple of points and to take this opportunity, as we bring this legislation back from the European Union, to press for some sensible changes in regulation, principally to make our regulation more effective. Obviously, some of this legislation gives more power to our regulator—the Financial Conduct Authority. As my hon. Friend the Minister will probably recognise, the FCA has had some shortcomings in terms of its regulatory capability. I would like us to move towards having less of an expectation that the regulator will be responsible for all regulation and more towards giving individuals more power to hold our financial institutions to account.

The FCA will always be a watchdog at best, and not a bloodhound—it cannot be in all places at all times. What I have seen in my role as the co-chair of the all-party parliamentary group on fair business banking and finance—a role my hon. Friend the Minister is very familiar with, because we have talked about these issues many times—is the abuses of small and medium-sized enterprises, particularly over the last 10 years. Some 16,000 businesses got very poor treatment from the Royal Bank of Scotland, in particular. At Lloyds HBOS, a number of senior managers ended up going to jail, with a collective sentence of 47 years. Other banks were involved—the CYBG and others—in swaps, interest rate hedging products and payment protection insurance on the consumer side of things.

It was not the regulator that brought those matters to light. Incredibly, 3,500 people work at the FCA and its predecessor, the Financial Services Authority, but it was not those bodies that found out what was going on in the banks; it was determined and committed individuals. A guy called Lawrence Tomlinson, who worked for the Business Secretary at the time, first established what was happening in those financial services organisations and banks, and how they were treating our small businesses. Even when these matters were brought to the attention of the FCA, action was not taken for some years. At HBOS, it was Nikki and Paul Turner who established what was happening. The bank tried to repossess the Turners 22 times, but the regulator did not step in to protect them, even though the evidence that they had produced was later verified and crucial in the investigation and subsequent prosecution. Similarly, at Lloyds HBOS the whistleblower Sally Masterton was disgracefully treated when she brought these matters to the attention of the FCA and the bank. Action was not taken to support her.

We have to try to move away from simply thinking that regulation and regulators can solve all the problems, because they patently do not always do so, and move to a situation in which we give individuals tools to hold the institutions to account. The Minister has done a fine job in persuading the banks to bring forward mechanisms to do that in the historical cases review that will hopefully be brought forward in the not too distant future. UK Finance has come forward with a voluntary scheme—it needs to be voluntary, because many of the cases are outside the statute of limitations. As business banking is not regulated, it also had to use a fair and reasonable test that would not apply in a court of law today. That is welcome progress, although we have some distance to go before we get this right. I thank the Minister for his excellent efforts in persuading UK Finance to come to the table.

The Minister knows that I think that we need to make sure that robust measures are in place alongside the regulator—we are not scrapping the regulator—to allow individual voices to be heard. That is why the all-party group thinks that we should have a financial services tribunal. That proposal has support across the House, and I know that the Minister will continue to look at this. We do not want a huge amount of regulation of commercial lending, because we want to make sure that banks are still confident to lend, but it is reasonable that banks treat their customers fairly and reasonably, and that those principles are actionable if things go wrong. That is not the case at the moment, as he knows, but we want to see that simple change to regulation and a tribunal that works similarly to employment tribunals—if employees are mistreated by an employer, they know they have an affordable mechanism for justice that means they can hold the employer to account. Most employers would do a good job anyway, but they are careful to ensure that they adhere to employment law, because they know that if they do not they could end up at a tribunal. It is pretty easy for an employee to take a case.

We do not need armies of regulators to regulate employment law. In my business, we do not have an employment regulator coming in to inspect our files. We do not need that: we know that we will be held to account if we get it wrong. The same principle should apply in the business banking world, where there is a huge imbalance of power between banks and businesses. If people have the mechanism to be able to hold the bank to account if things go wrong, we will not need armies of regulators. We simply need a simple process. That is far more important than a regulator.

If I had to choose between the FCA—even though some very fine people work there—and a financial services tribunal, I would take the tribunal every time, and I say that as a business person. Many people I speak to who have lost out through the actions of banks feel the same.

I just sound a note of caution, as we bring this legislation back into domestic law, that we should see this as an opportunity to make banks and other financial organisations more accountable, without being over-burdensome in terms of regulation. That would have a profound effect on confidence between businesses and banks and, therefore, UK plc.

Flybmi

Kevin Hollinrake Excerpts

Monday 18th February 2019 Commons Chamber

[Ms Ghani]

My hon. Friend makes a valuable point. If we look at Flybmi’s accounts, we see that they were not healthy for many years, even before the referendum. Smaller airlines across Europe are also struggling, and I mentioned some earlier: VLM in Belgium, Germania, Cobalt and Primera. So this is not a UK thing; it is tricky for small airlines to operate, especially if they are regional, in a global sector.

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

If I was the chief executive of a recently failed business, I would probably blame Brexit, too, but the reality is that Ryanair warned only last month of significant overcapacity in the budget airlines sector. Does my hon. Friend agree that this is far more about competitive markets than it is about Brexit?

[Ms Ghani]

Absolutely. The reason for Flybmi going into administration is that the business has just reached the end of its road. We have an overcapacity here and the power is with the passengers in the choices they make. Those passengers who are now struggling to get home and in distress must be recognised as well, but that is the market we are in.

Equitable Life

Kevin Hollinrake Excerpts

Thursday 31st January 2019 Commons Chamber

[Bob Blackman]

I thank the hon. Gentleman for that intervention. I have no doubt that the co-chairman of the APPG, the hon. Member for Leeds North East (Fabian Hamilton), will make a substantial contribution to this debate. He has been involved in this for more years than he probably cares to remember.

The previous Government promised some degree of compensation to the victims of this horrible scandal. I was a candidate at the 2010 general election, and in the run-up to it, the only pledge that Conservative campaign headquarters asked me to sign was that we would give full compensation to the victims of the Equitable Life scandal. I regard that pledge, which I signed, as one to the electorate and it is something I will honour. I believe that the Conservative party should honour it in full, and I welcome anyone else who will join me.

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

I am grateful to my hon. Friend for all his hard work and persistence on the issue over many years. A number of my constituents, like his, have been affected by the scandal, but have received merely a fraction of what they are due and what the parliamentary ombudsman ruled they should receive. The Treasury’s reason for that was pressure on the public finances, but now that the public finances are in a better place, does my hon. Friend agree that it is now time to compensate the victims of this scandal properly?

[Bob Blackman]

I completely agree, and I will come on to our asks in a few minutes.

When we were elected in 2010 and the coalition Government came to the fore, that Government took action, as is acknowledged in the motion, and I was pleased that they did so. The piece of legislation to provide compensation was almost the first to be put through the House after the election.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Tuesday 29th January 2019 Commons Chamber

[Robert Jenrick]

Through our productivity plan, we are investing more in the skills base in all parts of the country, whether that be through apprenticeships, the national retraining scheme or raising standards in our schools. We are also investing more in our infrastructure. Over the last four years, there has been a 50% increase in public investment in infrastructure in Yorkshire and the Humber compared with the last four years of the Labour Government. The hon. Lady and I met recently to discuss her plans in York for the high street and improving the city centre, which we wish to support.

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

Does my hon. Friend agree that well-run city regions are the key drivers of productivity and prosperity and that Yorkshire’s economy is best served by devolution to the city regions of Sheffield, Leeds, Hull and York?

[Robert Jenrick]

We are seeing mayors across the country driving their regions’ economic strategy, including great mayors like Ben Houchen in the Tees Valley and Andy Street in the West Midlands. We want to see more mayors, but we have to be mindful of the original purpose of devolution, which, as my hon. Friend said, is the role of cities and their immediate hinterland in driving productivity and economic growth.

HBOS Reading: Independent Review

Kevin Hollinrake Excerpts

Tuesday 18th December 2018 Westminster Hall

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

I beg to move,

That this House has considered the independent review of HBOS Reading.

It is a pleasure to serve under your chairmanship, Sir Christopher. There are some fundamental business principles that underpin any free market economy: we compete on a fair and level playing field; we all have a fair, fighting chance of success; we all play by the same rules; and our regulations and the rule of law ensure, where injustices occur, that justice is done and is seen to be done.

Many people in the Public Gallery today no longer believe in those principles. They have been subject to scandalous, criminal fraud perpetrated by senior bank managers at Lloyds and HBOS. They have had to suffer further scandal at the hands of those at the highest level in the bank who, when made aware of the fraud, instead of holding their hands up to what had gone wrong, denied any wrongdoing for 10 years. Indeed, there is clear and compelling evidence that the most senior management sought to cover up the fraud, suppressed evidence, and used the HBOS review process, which is supposedly there to compensate the victims, to minimise payments and perpetuate the cover-up. Incredibly, our system—our regulators—stood by and allowed the fraud against the victims to continue.

[Chris Elmore (Ogmore) (Lab)]

The hon. Gentleman knows my view of him. He does an enormous amount of work on these issues, and I pay tribute to him for all that work. He will be aware of my constituent, Mr Alun Richards, whose business went under through the Lloyds Banking Group. He has mentioned public bodies, including the Royal Institution of Chartered Surveyors, the Solicitors Regulation Authority and the Serious Fraud Office, turning a blind eye. He and I have been working for a number of years to try to get those organisations to deal with these complaints. Millions and millions of pounds have gone missing. Does the hon. Gentleman agree that there is a need for a fundamental review, led by the Treasury, of how we can get a better banking system that works for customers and is a lot more ethical about how it conducts its business practices?

[Kevin Hollinrake]

I do agree. The sector is so far away from the banking sector that we need that fundamental reform is needed not only in the regulatory process, but in the mechanisms that enable victims to hold the banks to account, which I will come on to soon.

[Alex Cunningham (Stockton North) (Lab)]

I congratulate the hon. Gentleman on securing the debate. One of my constituents, Michael Field, has been a victim of the banks as well. He borrowed from Lloyds to finance the building of several houses. He maintained his payments and fulfilled the terms and conditions of the loan agreement, yet Lloyds seized his assets and foreclosed on him. He then discovered that his assets had been sold on to another organisation within the bank. Does the hon. Gentleman agree that the Government need to have parallel and very specific inquiries about the operation of Lloyds in relation to these and similar matters?

--- Later in debate ---

[Kevin Hollinrake]

The hon. Gentleman makes his case very well. The difficulty goes back to my point about justice being seen to be done. There is no mechanism currently. I cannot judge the guilt or innocence in the business relationship between his constituent and his bank. The key is to allow mechanisms for these people to take their complaints forward, without having to be subject to the one-sided, partial process that they are subject to today. That is what the Griggs review is.

I will now make a little progress, if I may.

[Alex Cunningham]

rose—

[Kevin Hollinrake]

I will give way briefly.

[Alex Cunningham]

I just want to make the point that my constituent fulfilled all the terms and conditions and maintained his payments, yet he has no recourse. I take the point about being able to make a complaint, but what happened should never have been allowed to happen.

[Kevin Hollinrake]

I agree, and there are many cases like that. I will talk about the redress processes shortly.

There are three elements to what we are discussing: the fraud itself, the potential cover-up of the fraud, and the review that supposedly provides justice for the victims of the fraud. There were finally convictions for the fraud in January 2017. Six people, including three former HBOS employees, were convicted of defrauding business customers over 10 years earlier. More than £250 million in total was defrauded, and the people who were guilty of the crimes got 47 years in jail.

Many people lost millions of pounds—in some cases, it was tens of millions—yet these issues did not come to light because of the regulators. They came to light because of individuals who were so persistent and determined; I am thinking particularly of Paul and Nikki Turner, journalists such as Ian Fraser, and Sally Masterton, who worked for Lloyds. Had it not been for them, the issues would never have come to light. Of course, their efforts have taken a great toll on them and come at great cost to them.

[Peter Kyle (Hove) (Lab)]

I am sorry to interrupt the flow of the hon. Gentleman’s speech. He has referred to the people who are in jail at the moment. One of my constituents was working for a company called Carringworth. Through its dealings with those people who are in jail now, her company was forced into administration. Now, after 10 years of hell, the administrators are putting huge pressure on her to settle. Is it not wrong that she should be forced to settle before the establishment of an independent set of organisations that can adjudicate and ensure that she gets the justice that she deserves?

[Kevin Hollinrake]

Yes. The hon. Gentleman is absolutely right, and he touches on the human cost of these issues as well as the financial cost, which is critical. What we want to see, which I will come on to, is an opening up of all the cases that have been through the Griggs review by means of examination through a completely impartial arbitration process that will fairly adjudicate and arbitrate the claims.

As if the fraud were not bad enough, there was a cover-up. HBOS and Lloyds became aware of the issue from 2006 onwards. The current chief executive, António Horta-Osório, was made aware of the fraud as soon as he took up his post in 2011 by the Turners and many others. Famously, in September 2013, Sally Masterton, a senior risk officer at Lloyds Banking Group, on the instructions of her line manager, produced a report called the Project Lord Turnbull report. Its findings were shocking. There was a corporate strategy within Lloyds and HBOS to conceal the fraud, which caused substantial loss to shareholders and investors.

At that point, there was another opportunity for the bank to hold its hands up and say, “Right, enough is enough. Let’s get all of this out in the open and get to the bottom of these issues.” Did that happen? No, that is not what happened. Sally Masterton was suspended from her job and discredited to the Financial Conduct Authority. Scandalously, she was prevented from working with the police, despite being told that she was vital to the investigation, and then she was fired. The senior management did not make the report available to non-executive directors or the chair of the board for three years. Finally, last month, the bank reversed its position and confirmed that Sally had

“acted with integrity and in good faith at all times”.

There were other elements of cover-up. Thames Valley police said that Lloyds had led them a “merry dance” in their £7-million investigation of these issues. There is evidence of a wider fraud, certainly from victims going through the Griggs review to whom I have spoken. They talk about other senior managers, including Paul Burnett, high risk managing director at HBOS Edinburgh, personally having involvement with HBOS Reading. HBOS compliance officers were embedded in the fraudsters’ operations, and of course gagging orders are used across the board to prevent more disclosures from coming to light.

Let me move on to the review. It was supposed to be an independent review and was headed by Professor Griggs—that is why we call it the Griggs review. It was supposed to provide swift and fair compensation to the victims. However, the SME Alliance, which has done so much work for so many of the victims, instructed Jonathan Laidlaw, QC, who names among his clients the Bank of England, to review the review itself. He determined, in a short report, that the review is “procedurally defective”, and its principles are “flawed and appear partial” to the bank’s interests. That description is consistent with the experiences and stories of the victims. They have described the review to us as corrupt, disgraceful, one-sided and evincing an absence of due diligence, with manipulated documents and lies about evidence. Agreed payments are not met, and the process makes life as difficult and unpleasant as possible. These are victims of fraud.

[Dr David Drew (Stroud) (Lab/Co-op)]

Will the hon. Gentleman add one more element, namely deliberate over-complication? It seems that this whole saga has been made so opaque that it is difficult to get to the bottom of what really happened. Does he agree?

[Kevin Hollinrake]

I totally agree with that. I will come on to the disclosure of evidence shortly, but the hon. Gentleman is absolutely right: the bank could have dealt with this summarily many years ago, as soon as it came to light, but it chose not to. Why it chose not to is an open question.

The basic assumption of this review was laid out by Professor Griggs himself, who was quoted as saying that when he deals with these businesses, he is

“invariably dealing with the financial equivalent of a car crash.”

How can that be the basis for any judgment that these businesses were viable? The judge in the case stated that some “were capable of rescue” and that there was

“deliberate mismanagement of these companies”

by the advisers—by the fraudsters. He added that there were “plunderings made from them”, and that

“fees and any useful assets”

were taken from them. Why would the review ignore a High Court judge? Only four of the 76 cases have been dealt with by means of a consequential loss. All the rest have been dealt with through distress and inconvenience—in other words, all those businesses were dud businesses. That is simply not statistically possible.

[Colin Clark (Gordon) (Con)]

My hon. Friend is making a very forceful speech. This subject is close to many business people’s hearts. Does he agree that because the bank has refused to pay for forensic accounting, victims are left powerless, even if the bank was willing to look at this? As he has just said, the bank simply labelled most of the businesses as failures. It is deliberately making it impossible for the victims to be heard properly with forensic accounting.

[Kevin Hollinrake]

My hon. Friend is absolutely right. It is completely one-sided. It means there is a complete imbalance of power in what is supposed to be an independent review, because the bank itself has phalanxes of advisers, whereas the victims clearly cannot afford to provide for the same number or calibre of advisers.

Offers are not made on an open basis; it is a take-it-or-leave-it offer. Imagine, Sir Christopher, that you have been stripped of all your assets over a period of 10 years. You are desperately trying to seek justice, and finally somebody offers you a cheque. Your only other option is to go to the court. What do you do? It is a take-it-or-leave-it offer. If you say, “Actually, I don’t think that is enough,” you get a secondary meeting, but there is no interrogation of the facts; it is simply take it or leave it. That is the nature of the review.

[Mr Edward Vaizey (Wantage) (Con)]

I am grateful to my hon. Friend for calling this debate. In fact, I called a debate on this very subject 10 years ago, when my constituents Justin Riggs and Karl Capp told me how they were being treated by their bank. This is one of the biggest frauds to hit many hard-working small business people in this country. The simple point is that the bank, rather than hiding behind regulations and technicalities, should be giving generous and quick compensation to many people who have lost their businesses, because of a fraud that was covered up and hidden for years by senior members of that bank.

[Kevin Hollinrake]

My right hon. Friend is absolutely right. The levels of compensation should be determined by an independent third party, not by the bank itself, because there is no methodology. Nobody can contest the findings of Professor Griggs. There is no way of interrogating how he has arrived at a number. They simply say—I have heard this so many times from Lloyds directors—“Well, we settled most of the claims,” as if that is somehow an endorsement of the process. The fact is that the victims had no other option—no appeal process—other than going to court, which would have cost millions of pounds.

Victims cannot even get access to the evidence. In a normal court process there would be disclosure of evidence, so that they could see the evidence they are being judged against. There was no disclosure of evidence. Lloyds has found a better way, according to a letter it sent me on 20 September. It said it had “created an alternative approach” to disclosure, “to protect customers interests”. That is its approach. It is complete obfuscation.

Eligibility is determined by the bank itself. It decides who is eligible for the review and who is not by invitation only. Only directors get to decide, not shareholders or suppliers, nor Her Majesty’s Treasury, which must have lost a lot of money through this process in respect of tax. It only dealt directly with the individuals who were convicted, not their deputies or other people who may well have been involved in the fraud. This is not an independent review. Professor Griggs is paid by the bank. His remit is determined by the bank. I have seen evidence that determinations he has made have been overruled by the bank.

This is in no way an independent process. Of course, everybody who goes to it is subject to a gagging order. The bank provided us with confirmation that clause 4 in its settlement agreements does not prevent victims talking to it or to the press. However, I have seen another agreement, completely different from the one the bank provided to the Treasury Committee, which contains extra clauses that do prevent these victims speaking to the press or to the authorities. Justice must be seen to be done. Lloyds bank is the judge, jury and executioner. The all-party parliamentary group on fair business banking and finance, of which I am now co-chair, said right from the start that this is the wrong way to deal with the process, but Lloyds pushed on anyway.

Moving on to a solution to these problems, the APPG believes that all cases—anybody who has been subject to the Griggs review—should be re-examined through a completely independent process. The APPG has recommended a financial services tribunal, which would judge cases based on a fair and reasonable test, with one-way cost shifting, so the banks cannot simply keep people out of court by writing huge cheques out to their own lawyer. That would mean that people would get an independent examination of their case. Victims can then get compensation and move on.

We believe that a tribunal is required, with an arbitration process for past claims. There have been four different reviews this year of how we can fill this gap, make this process fairer and get back to a more balanced situation, with restitution and redress. Three of those reviews recommended a financial services tribunal, as we do. The one report that did not was sponsored by the banking industry itself and it simply says that we should increase the powers, remit and jurisdiction of the ombudsman schemes. While that is a good step forward, we do not feel that it is enough.

That addresses compensation, but we need to go further. We need to change the culture in the whole sector, as the hon. Member for Ogmore (Chris Elmore) said. In terms of the Lloyds management, I do not see how the position of the chief executive, António Horta-Osório, is tenable. Given the way that the effective whistleblower has been treated, the way this has been covered up and the way that the process has been deliberately partial, I do not see how the Lloyds management have been consistent with the behaviour required under the senior managers regime. I think António Horta-Osório should resign. I also think he should face investigation under the senior managers regime.

Finally, the Financial Conduct Authority itself—our regulator—has many questions to answer. Why did it approve the scheme? Did it approve the scheme? We have heard conflicting evidence on that. It is a national disgrace that Lloyds has been allowed to operate this sham of a review process. Andrew Bailey himself has questions to answer. Why did he allow the process to continue? Why was he not aware of the patent defects in the process? Nevertheless, the FCA should take charge and undertake an investigation of the senior management under the senior managers regime.

We in this place are defenders of free markets. For me, this is the most important issue that any of us will ever deal with. Certainly, as far as I am concerned, I cannot rest until the matter is settled. My life has been transformed through the opportunities of free markets. In the main, the bankers I have dealt with over 25 years have done a tremendous job—a fair job—to help my business to thrive through some difficulties. I was one of the lucky ones. Not all bankers are the same. Most people in the industry are decent people trying to do the right thing, so it is even more important to hold those who are not to account. We have to make sure that everyone has the opportunities that I have had—that we have had—including all our children and grandchildren. We must all demand, for the sake of the victims, that justice is done and is seen to be done.

--- Later in debate ---

[Kevin Hollinrake]

I thank the Minister for his comments. I hope the people watching the debate, either in the Gallery or at home, understand that they have many friends in Parliament who want this issue to be dealt with. I know that he does as well. There is such universality of support for dealing with it properly that we will get there in the end, although we are not yet where we need to be.

I appreciate that the Minister is going further than others have gone in the past. Nevertheless, people will be sceptical about the ability of a bank or an independent reviewer, as he called it, to look at the issues and to provide proper redress and a proper method of investigating the complaints. I tried to illustrate in my speech that it was not just about fraud, but about how the corporation itself sought to suppress evidence and a proper investigation of the issues. People are simply not going to accept that anything done voluntarily is fit for purpose.

The Minister is right that I think that a tribunal is the right way forward, rather than simply expanding the ombudsman scheme. For historical cases, it sets a limit of £350,000 as compensation, but every case we deal with is over that figure, so that does not go anywhere near addressing our concerns. It is not the compensation scheme that we need.

I also do not accept that small business lending will suffer if we have more regulation. We simply need a fair and reasonable test for deciding the claims. Ireland introduced regulation for small business lending a few years ago, and its lending has increased significantly since then, so the Minister’s fears are misplaced. We need to ensure that small and medium-sized business interests, which are the most critical interests to our economy, are protected and supported through the process.

Question put and agreed to.

Resolved,

That this House has considered the independent review of HBOS Reading.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mr Speaker]

Order. I think we should hear from my favourite estate agent. I call Mr Kevin Hollinrake.

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

Thank you, Mr Speaker. Banks that are guilty of the scandalous mistreatment of small businesses are allowed to design and oversee their own redress schemes, including determining the level of compensation paid to the victims. Does the Minister agree that Parliament and the regulator should take control of those processes?

[John Glen]

I have always said that the banks need to do more to restore their relationship with SMEs, and I welcome the scheme that UK Finance has announced to address unresolved historical complaints. I look forward to meeting my hon. Friend next week, with the Chancellor, to discuss the Government’s position.

Finance (No. 3) Bill

Kevin Hollinrake Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is lovely to see you in the Chair, Dame Rosie, and thank you for calling me to speak for the Opposition on our second grouping, which includes clause 89. As the Minister has helpfully explained, this group deals with the operation of tax law in the UK after our withdrawal from the EU, with a consequential set of Brexit-related amendments. This week, we have all seen the complete chaos the Government have unleashed on the country with their disastrous handling of the Brexit negotiations. We are just months away from the UK’s exit, and it seems the Conservative party remains as divided as ever over what to do next. As the Leader of the Opposition explained in his address to the CBI earlier today, this proposed Brexit deal offers no certainty at all and in many ways is the worst of all worlds, offending remain and leave voters in equal measure. So after two years of negotiations, we are teetering dangerously close to a no-deal Brexit, which should simply never have been an option. It would be bad for individuals, for businesses and for the economy, and Labour will do all we can to prevent it.

As we have said repeatedly, Labour wants the Government to negotiate a comprehensive and permanent customs union that gives the UK a say in future trade deals and ensures that there will be no hard border in Northern Ireland. We would protect workers’ rights, block any race to the bottom and negotiate a strong single-market relationship that gives businesses continued access to European markets for goods and services.

I would like to think that we are heading for a more stable time, but that seems unlikely. I was appalled to read press reports at the weekend that Downing Street’s alleged strategy is to encourage a crash in the financial markets should the deal fail to pass through Parliament, to pressure MPs into voting for it a second time. I can only hope that those reports were false. We should never forget that the markets reflect people’s savings, investments and pensions. They should not be used as a political device by the Conservative party.

It is also worrying that the Government are steadfastly using Brexit to substantially transfer powers from Parliament to the Executive. The Opposition have warned about this repeatedly, throughout the passage of each piece of legislation connected to the UK’s withdrawal from the EU. We should be deeply worried about this unprecedented transfer of powers.

We see another example in this Bill. In clause 89, which is rather innocently named “Minor amendments in consequence of EU withdrawal”, Ministers give themselves the power to make amendments to tax law outside the normal due process. Good checks and balances make for good government, which is why the Opposition have tabled a series of amendments that would help to address the democratic deficit that the provisions in the Bill would create, if passed unchecked. We do not believe it is possible to make a democratic case for the transfer to the Treasury of powers to make changes to tax law in perpetuity, which is why Labour’s amendment 2 proposes a sunset clause to the Brexit powers that the Bill will confer on the Treasury. It would ensure that those powers can only be used within two years of the passage of the Bill. Surely that offers sufficient time for the Government to use them as is required.

As the Minister outlined, the Government’s case is that during our withdrawal from the EU there may be a situation in which some elements of tax law need changing urgently or at short notice. However, we do not believe that there is a case for the powers, unless the UK crashes out of the EU with no deal. The agreement of a deal, with an attached transition period, should provide room for preparation, without the need to furnish the Executive with powers to make changes to the law unilaterally.

The number of Treasury-related statutory instruments that are currently being passed to create a new financial regulatory regime proves the point. Although it has been far from ideal for Ministers and their shadows, the use of secondary legislation is an improvement on the taking of such decisions behind closed doors in the Treasury.

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

The hon. Gentleman said earlier that in his relationship with the European Union he would expect to have a say in trade deals by being part of a customs union, but even when we were full members of the European Union and it agreed the Comprehensive Economic and Trade Agreement with Canada, his party refused to vote for that deal in this House. How on earth does he think that that will work on a completely third-party, third-nation basis?

[Jonathan Reynolds]

I am happy to take that point, which although a little outside the remit of the Bill is none the less interesting. For us, the relationship that we would seek with the EU would be based quite simply on a solid cost-benefit analysis of what is in the UK’s best interests. If we look at the various options on offer, given that half the world is already in a regional trading bloc or a customs union of some sort, it is absolutely clear that what we would risk losing by losing frictionless trade with the European Union would never be gained by external trade deals with the rest of the world. A customs union is therefore the right way to go forward. Were the UK to enter one, we clearly could not have a situation in which we were unilaterally exposed to the deals that the EU did with other countries without having a say, so it is a pretty logical position. That does not mean that those deals would always receive the backing of all parts of this House. Elements of those deals might be unacceptable.

The point about sovereignty, which comes from Brexiteers in the main, is so important, because people say, for instance, “Let’s not do a customs union, let’s do a deal with Donald Trump’s America,” but would our constituents really accept unilateral access to the NHS for American healthcare providers? Of course they would not. Would our constituents accept hormone-treated beef in the supermarkets? Personally, I do not think they would. The question is always about the balance between what is in the proposed economic relationship and the political oversight that should go with it. That position is fairly logical and straightforward.

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[Jonathan Reynolds]

That is what we are proposing that we would negotiate. That is the entire basis of the proposal. I have no doubt that such an arrangement was on offer and may still be on offer from the European Union. The hon. Gentleman is well-informed and I always look forward to his contributions in these debates. I am sure that he has contacts as we do in other European Parliaments or perhaps in the Commission itself. If he does some investigations, he will see that that was always a preferred option for many people and it is, without question, the right way of going forward for the national interest of this country.

[Kevin Hollinrake]

rose—

[Jonathan Reynolds]

We will try one more intervention

[Kevin Hollinrake]

The hon. Gentleman mentioned earlier in his remarks that a certain deal might be a betrayal of the leave voters. There were plenty of myths flying about during the referendum campaign, but one area that probably was quite plausible was that if we left the European Union, we would be able to do independent trade deals—not through the European Union, but independent bilateral trade deals. Does he not see that his customs union would effectively mean that we could not do independent trade deals and that would be a real betrayal of leave voters who expect to be able to do exactly that?

[Jonathan Reynolds]

I think quite the reverse. What leave voters were promised was that the economic relationship would not leave anyone worse off and, in effect, would not be ruptured at all. That was the promise made in explicit terms by leading leave campaigners. Where there were concerns that motivated that leave vote, they were heavily about sovereignty and also about immigration. I do not think that the specific trading relationships that this country has with other parts of the world were a particularly paramount issue in the campaign. I know that it is a sensitive issue for leave campaigners to talk about the fact that immigration was a big part of that campaign, but, without question, it was in my constituency. In terms of that future trading relationship, it is by far the best thing to focus on what is simply in the best economic interests of the country once we leave the political side of the European Union with all of the objections that leave voters had to it. I do not think that leaving in such a way that preserves the best of our economy, minimises the disruption and honours our commitments under the Good Friday agreement is a betrayal at all. Many people want to see that economic relationship continue, even if they were of a position and a viewpoint that we are leaving the political side of the European Union with all that entails.

I will now get back to amendment 15, Dame Eleanor, before we are all rightly admonished for straying from the Finance Bill. The measure lays out a stipulation to provide clarity around which powers in relevant tax legislation have been transferred to the Treasury since June 2016 in connection with the UK’s exit. It also covers the powers that the Treasury expects to acquire, and, most importantly, it requires Ministers to set out a timeline for when these powers are to be returned to Parliament—I think the Minister missed off that last point in his speech.

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[Chuka Umunna (Streatham) (Lab)]

It is a pleasure to follow the hon. Member for Orpington (Joseph Johnson), who kindly spoke in favour of amendment 14. The amendment is in my name and in those of the right hon. Member for Broxtowe (Anna Soubry) and 70 other Members from all parts of the House. I want to take this opportunity to thank all the Members who have supported this amendment.

As the Minister said, what we were seeking to do with this amendment to clause 89—as he says, the clause allows the Government to make amendments to UK tax law—is to ensure that this House is provided with all the information needed for it to come to an informed decision. The Prime Minister made a very important admission last week, both outside No. 10 and in this House, where she moved on from the falsehood that has been peddled by too many, which is that this House has only two choices: the withdrawal agreement that has been presented by the Government, or leaving without an agreement at all. She moved on from that to the very clear choice that we now know faces this country: no Brexit, no deal or the agreement that the Government are putting forward. As may already have been said in this debate, this is arguably the biggest decision that this House will be making since the second world war, and it is absolutely vital that we are provided with the requisite data in order to come to an informed decision.

For the benefit of the record, our amendment seeks to make the exercise of the powers sought in clause 89, which the Minister mentioned, subject to the publication of a proper economic impact assessment of, and comparison between, each of the three scenarios the Prime Minister has set out before any meaningful vote on the withdrawal agreement takes place under the provisions of the European Union (Withdrawal) Act 2018. It is true, as the Minister said, that this Bill is likely to become an Act after the meaningful vote, but the amendment we have tabled is worded in such a way that its provisions will need to have been complied with before the meaningful vote in order for the powers under clause 89—to keep the tax system running in the event of no deal—to be usable.

I want very quickly to explain why we felt it was necessary to table this amendment and to deal with the three principal objections, which have been made in the House before, standing in the way of providing the information that this House needs to make a decision.

[Kevin Hollinrake]

I think it was Mark Twain who first said, “You should never make predictions, particularly about the future”. The hon. Gentleman refers to these forecasts as data, but does he accept that they are not data? They would simply be predictions, and as predictions they are inherently unreliable because they cannot take into account the reaction of business to the different scenarios we may be in. Does he accept that they are simply a forecast and cannot be relied on as facts?

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[Justine Greening (Putney) (Con)]

I was a signatory to amendment 14 because I think that good policy making needs good evidence at its heart. That is what the amendment sought to do. I think we all recognise that the debate on our future relationship with the European Union has often been characterised by facts that have turned out not to be facts, and, far too often, by lofty ideals and phrases that have had little meaning to back them up in practice. It is now time, as we come to possibly the most crucial parliamentary debate in 50 or 60 years, for Members to have the information they need to be able to take an informed decision—and, dare I say, for members of the public to have the information they need to be able to convey to their own Members of Parliament what they think about that information and why they want their MP to vote accordingly.

I welcome the statement the Minister made at the beginning of this debate, in which he set out his plans to provide more information to the House. Along with the rest of the Treasury, he will play a vital role in ensuring that we have an informed debate. I was one of those MPs who earlier this year went to the Reading Room—I actually went three times—to wade through the Treasury analysis. I would like a similar level of detail so that, again, Members are able to analyse the impact of the three different choices facing our country, as the Prime Minister has now set out: whether we have the deal that she proposed, whether we leave effectively with no deal, or whether we keep the existing deal with the European Union. I would like a level of analysis that includes a sectoral split in relation to the different impacts of the different deals on different sectors, as well as a regional and geographical split, so that we, as Members of Parliament representing very different communities in very different parts of the country, can really understand what the geographical impact of Brexit and the options will be.

I would like the analysis perhaps to go beyond what we originally had from the Treasury, so that we can understand what the impact on GDP might be for employment and jobs. There will be many MPs who do not believe that unemployment is a price worth paying for some of the options on the table. I believe that MPs and communities have a right to be informed about the risks to local jobs before casting their votes in favour of different options. Of course, we need to see, for all the options, the impact on public finances, both in the short and longer terms. I know that the Minister has in mind a period of 15 years for forecasting. I think that that is absolutely necessary for us to see not just the immediate shorter-term effect, but the medium and longer-term structural impacts of any route forward on our economy.

[Kevin Hollinrake]

I know that my right hon. Friend is in favour of a people’s vote that would have three different options—deal, no deal, or remain—but as she will concede, it was difficult enough to explain the different implications to people in the first referendum, even with a binary choice, and there were a lot of different opinions about those implications. How easy does she think it will be to explain what the outcomes and implications of all those three different options might be?

[Justine Greening]

I have no doubt that at the last election, at which my hon. Friend was elected, there were many different candidates on his ballot paper, and I do not think that his constituents were prevented from making the very fine choice they made. They were quite capable of working their way through the different options. This House has MPs representing very different parties and communities, and again, the electorate have been perfectly capable of working their way through what, as we all know, are often very lengthy and different party manifestos. Like any election, this is a choice about the future. There are different choices, just like in any election, and we should not limit the choices to two just for the sake of it. Arguments can be made for having a two-choice referendum, but saying that it is too complicated for the British public is not one that holds in practice. This is a British public who regularly choose between many different alternatives and indeed, in some elections, are sophisticated enough to vote tactically to get the outcome that they want.

My proposal, as my hon. Friend may be aware, is that people have not just one but two other choices. That will enable them to pick their own compromise, because it is clear to me that this House will not be able to reach a compromise and will just vote against all the different paths. I have no doubt that we will come back to that debate and I very much respect the different views that people have in this House. This is an important debate and we need to get a route forward. I simply reflect on the fact that my view remains as it was back in July. Regrettably perhaps, this House is gridlocked, and my advice now, as it was back then, is that, rather than ignoring that fact, we have to confront it as a Parliament, however difficult that is. We need to make a proposal on how to get through it, so that ideally, we do not reach that moment of crisis when we have seen every single option ahead of us on Brexit voted down.

I was quite surprised, when the Treasury did its previous impact assessment, that more MPs did not go to the Reading Room to look at it. As I understand it, about 60 MPs out of 650 booked themselves time to look through the analysis. It is crucial that MPs look at it. I thought it was important to do so, but clearly if MPs find it hard to go to the Treasury, the Treasury must go to MPs. I would very much recommend that that analysis be sent out to every Member and, if he can, that the Minister finally sets out what he means by publishing analysis “in good time”. If Members have parliamentary questions to submit, clearly it is important that the House should have time to scrutinise it all properly.

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[Vicky Ford]

That brings me back to the point I was making: EU taxation matters can be hugely controversial, partly because decisions affecting tax at an EU level are often unanimous decisions, and therefore it would be very difficult for one member state to change them if a decision has gone wrong. Because they are so controversial it is worth thinking about the delegation of powers given to Ministers here. Indeed, during my time looking at European matters, I long argued for the concept of better regulation before decisions were made. People should be consulted and impact assessments published. Only after the assessments have been made public and the views of stakeholders who might be affected taken into consideration should decisions be made.

That is why I sit on ESIC, the European Statutory Instruments Committee, to which the hon. Member for Aberdeen North (Kirsty Blackman) referred. It was a Committee that I argued we needed. She suggested that when it decides to change a negative instrument to an affirmative instrument, that is because of some controversy with the Government’s decision, but by establishing that Committee, under the excellent chairmanship of my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin), we can ensure extra transparency in these complex decisions. I genuinely believe that we should think carefully before giving delegated powers to Ministers. However, clause 89 is very much about making minor decisions. It is tightly worded, and I do not believe that the amendments tabled by Opposition Members are necessary, as they would cause over-complexity. Amendments under clause 89 would be necessary, were we to leave the EU without a deal.

I am absolutely convinced that leaving the EU without a deal is not in the interests of this country, and I am glad to hear Ministers confirm that. However, I would also be glad to hear Ministers confirm that they will give Members a great deal more detail about the impact assessments of a no-deal scenario and a deal scenario, and also how that compares with remaining a member of the European Union, before our final vote on the withdrawal agreement, so that we can all be fully apprised of the impacts and make our decisions wisely.

[Kevin Hollinrake]

I want to speak first to amendment 14. The hon. Member for Streatham (Chuka Umunna) is no longer in his place, but he said that all the choices before us were the worst possible choices and worse than the deal that we have today. I was certainly not someone who campaigned to leave the European Union—I have my reservations about our departure from an institution of which we have been a member for effectively 45 years—but we should not ignore the opportunities that lie ahead of us.

I do not look at these things through rose-tinted spectacles, but many years ago, following protests by those concerned about the impact on their livelihoods of imports from India by the East India Company and the successful lobbying of their Members of Parliament, legislation was introduced from 1700 called the Calico Acts, which banned all imports of calico—rough-cotton cloth—from India. That gave rise to the industrial revolution, because at that point we could not produce enough calico, so Watt linked his steam engine to Hargreaves’s spinning jenny and mass production resulted.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

The hon. Gentleman mentions the historical Calico Act. He does know that it also impoverished the people of India, rather than just creating the industrial revolution.

[Kevin Hollinrake]

The hon. Gentleman may well be aware of that fact, but that is not the point that I was making. I am not keen to impoverish people from any nation; the point is that what happened gave rise to a huge opportunity. Amendment 14 looks at one side of the equation, as if we can rely on a Treasury forecast simply as fact. It does not take into account the other side of the equation, which is that business will respond to the future framework that it is part of. There are concerns about the future, but there are also opportunities.

I want to talk mainly about clauses 68 to 78, which concern our carbon emissions. The hon. Member for Stroud (Dr Drew) seemed to imply that we were not succeeding at reducing our carbon emissions, but actually the UK is fifth in the world in the climate change performance index, a German-based index published every year by Germanwatch. We are ahead of many countries that people might think would be ahead of us, including France, Italy and Germany. I cannot say that our climate change credentials are second to none, but they are second to those of only four other countries. Every other country that we might mention—other than, I think, Norway, Sweden and Lithuania—is behind us on that performance index. We are performing admirably in carbon emissions, but we need the right mechanisms to enable us to continue that success. The carbon emissions tax that the Exchequer Secretary to the Treasury described earlier is a good framework to ensure that the carbon price is right and business has stability in the undesirable event of a no-deal situation.

[Vicky Ford]

Does my hon. Friend agree that stability in the carbon pricing regime is as important as any other area of business legislation? That is why it is important that we deal with the devil in the detail in the Bill.

[Kevin Hollinrake]

My hon. Friend makes a good point. Above all, business is looking for stability. It is absolutely right that in the worst-case scenario, in which we end up with no deal, we have a stable framework to enable us to manage our future trading relationship with the European Union.

[Vicky Ford]

Does my hon. Friend agree that although the clause is helpful in giving some stability, it does not give anything like the level of stability that would be delivered by a negotiated exit?

[Kevin Hollinrake]

It is hugely important that we have the negotiated exit that we all want. No deal is the worst possible option, and it is not where we want to go. Nevertheless, we cannot take no deal off the table.

I return to my key point about our future energy emissions and ensuring that we reduce our carbon emissions wherever we can. We are world leaders in moving our electricity production away from coal, which we have committed to phasing out by 2025, and into gas.

[James Heappey (Wells) (Con)]

My hon. Friend has done an awful lot of research into the energy mix that we might require to achieve those targets. Does he agree that carbon pricing sends an important signal to ensure that the phase-out of coal is delivered on time and that other technologies—such as gas and renewables—come online to enable us to hit those targets?

[Kevin Hollinrake]

My hon. Friend is absolutely right. He has a great deal of knowledge in this area, too, and I absolutely defer to it. This discussion about the most energy-efficient way to produce our electricity has run throughout my parliamentary career. I know that my hon. Friend is not a big fan of shale gas, but there are petroleum exploration and development licences right across my constituency. Over the last three years I have not had a frack-free day; in fact, I spent some time out in Pennsylvania looking at shale gas exploration out there. The US has used shale gas to excellent effect in reducing its carbon emissions.

[James Heappey]

My hon. Friend is very kind to give way a second time. The issue is not necessarily where the gas comes from, but the fact that it is an important part of our future generation capacity and it is, for now, indispensable to the delivery of heat. Whether it is delivered onshore or elsewhere is not necessarily the important part of that debate.

[Kevin Hollinrake]

It is interesting; my hon. Friend says that the point is not where gas comes from, but imported gas has a larger carbon footprint. That is particularly true if it is put in large ships that go from Qatar to the UK, in which case its temperature has to be reduced to about minus 156 °C in order to liquefy it. If we produce gas domestically, its carbon footprint is much smaller, and that is why shale gas makes sense. As he knows, we import about half our gas, but by 2030 we will be importing about 70% of it. It makes sense to produce something that we would otherwise have to import. On that point, I am happy to conclude, and I am grateful for the opportunity to speak.

Question put and agreed to.

Clause 68 accordingly ordered to stand part of the Bill.

Clauses 69 to 78 ordered to stand part of the Bill.

Clause 89

Minor Amendments in consequence of EU withdrawal

Amendment proposed: 22, page 66, line 30, at end insert—

‘(1A) The Chancellor of the Exchequer must, no later than a week after the passing of this Act and before exercising the power in subsection (1), lay before the House of Commons a review of the following matters—

(a) the fiscal and economic effects of the exercise of those powers and of the outcome of negotiations for the United Kingdom’s withdrawal from the European Union giving rise to their exercise;

(b) a comparison of those fiscal and economic effects with the effects if a negotiated withdrawal agreement and a framework for a future relationship with the EU had been agreed to;

(c) any differences in the exercise of those powers in respect of—

(i) Great Britain, and

(ii) Northern Ireland;

(d) any differential effects in relation to the matters specified in paragraphs (a) and (b) in relation between—

(i) Great Britain, and

(ii) Northern Ireland.”—(Jonathan Reynolds.)

Question put, That the amendment be made.

Finance (No. 3) Bill

Kevin Hollinrake Excerpts

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

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

Will my right hon. Friend confirm that, for somebody on the minimum wage, if we combine the increases in the national living wage with the increased personal tax threshold, somebody in full-time work is £3,955 a year better off in cash terms than in 2010?

[Mel Stride]

My hon. Friend, as usual, makes a very significant point, which is that by increasing the national living wage by, as I said earlier, 4.4% last year, and by 4.9% coming up in April next year, and by raising that personal allowance to take more and more people out of tax altogether, we are supporting the lowest paid in our country.

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[Peter Dowd (Bootle) (Lab)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House declines to give the Finance (No. 3) Bill a Second Reading because it derives from the 2018 Budget which confirmed the continuation of austerity and tax cuts for the wealthiest, failed to introduce a fair taxation system which protects middle and low earners but requires a greater contribution from the top 5 per cent of highest income earners, implied real terms per capita cuts for unprotected departments between 2019-20 and 2023-24, failed to halt roll-out of Universal Credit with planned social security cuts still to come, failed to raise the funding needed for mental health services, failed to provide the long-term funding needed for long-term adult social care, failed to provide adequate school funding, failed to address the funding gap that local councils face, failed to end the funding crisis facing public services, with police, teachers, nurses and doctors having no reassurances that the public sector pay squeeze will end in 2019, failed to tackle child poverty and growing inequality across our country, failed to tackle the fact that 87 per cent of the impact of the Government’s tax and benefit changes since 2010 has fallen on the shoulders of women, failed adequately to address climate change and delayed the much-needed reduction in the maximum stake for fixed-odds betting terminals until October 2019, and because the Bill is not based on an amendment of the law resolution, thus restricting the House’s ability to properly scrutinise and improve the Bill.

I have to give credit to the Financial Secretary to the Treasury: he managed to keep his face straight throughout his delivery. We had lots of flowery words from him, and I am surprised that we did not have phrases in his cliché-ridden speech such as “sunny uplands”, “green shoots of recovery” and “the end of the rainbow”. Why were those clichés not in his speech as well?

We have been asked to scrutinise a Finance Bill under the most difficult circumstances the Government could create, short of barring the Opposition from actually attending the House. The timetable set for the Bill meant we were expected to table amendments on Second Reading before the Bill had even been published—an abuse of power. To add insult to injury, printed copies of the explanatory notes to the Bill only arrived in the Vote Office earlier today. How busy Members are expected to provide proper scrutiny under these conditions is beyond me. It is an abuse of power. Worse still, the Government’s refusal to table an amendment to the law for the third Finance Bill in a row means that we will be unable to meaningfully amend this proposed legislation following Second Reading. As I said in my speech on the Budget resolutions, that is unprecedented. It is another abuse of power.

Last week, the President of the United States fired his Attorney General to undermine an investigation against him. Mr Trump also barred a journalist asking legitimate questions from the White House. Perhaps he gave the Prime Minister the odd tip on how to side-step conventions and constitutional process. Stitching up Committees with a false majority, obstructing scrutiny of the Finance Bill and giving a £1 billion bung to a minority party to keep the Prime Minister’s Government alive are further abuses of power. In any other country, we would use a word for this behaviour: malfeasance, plain and simple.

This is a desperate state of affairs, especially given how much the Bill is in need of change. The Government’s policies announced in the Budget fail to tackle a single one of the great challenges now facing this country after eight years of austerity. Most notably, this Bill of broken promises fails to end austerity, as the Prime Minister said it would during her conference speech—once she had finished gyrating. As our reasoned amendment points out, this promise has been broken: £4 billion of Tory social security cuts are still on their way. Only half the money cut from universal credit work allowances was returned to the programme. There was nothing on the social security freeze or the two-child limit.

[Kevin Hollinrake]

The hon. Gentleman mentions the reasoned amendment, which refers to the long-term funding of adult social care. Two Select Committees, the Health and Social Care Committee and the Housing, Communities and Local Government Committee, recommended a social insurance system in their inquiry’s report. Is he willing to support that cross-party recommendation as a solution to the future funding of adult social care?

[Peter Dowd]

The hon. Gentleman needs to speak to his own Government about cross-party support. My party cannot discuss these issues in this Chamber, let alone outside it. He would be better off engaging with his own Government on these matters.

What we have in the Budget is more spent on potholes than on our schools, not a penny more for everyday policing or fire services and nothing to begin to unravel the 40% budget cuts that have taken place across local authorities.

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[Peter Dowd]

A Conservative Member of Parliament talking about opportunism! It is not quite as bad as the Liberal Democrats talking about opportunism, I grant you, but there we are—[Interruption.] I think the hon. Gentleman should worry about working people in his constituency who, overall, are £800 a year worse off after the longest fall in wages since the Napoleonic era—I suspect that one or two Government Members were here at the time. The Prime Minister has stood staring at the Brexit menu for two years while her Cabinet devours itself in the queue behind her.

[Kevin Hollinrake]

According to the economist David Smith, if Labour policies at the last election had been implemented, people who were earning between £100,000 and £120,000 a year would have been paying, on that element of their earnings, a marginal rate of taxation of 72%. Does the hon. Gentleman feel that that is a fair burden of taxation on earners at that level?

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[Sir Vince Cable]

Yes. All the evidence we have shows that net migration has had a positive effect not only on the economy, in per capita terms, but on Government revenue because, by and large, these are young people who work and pay tax revenue to the Government. I totally share the hon. Lady’s concerns about future immigration legislation.

[Kevin Hollinrake]

The right hon. Gentleman spoke earlier about cross-party consensus on social care. Is he aware of the joint report of the Health and Social Care Committee and the Housing, Communities and Local Government Committee? One of its recommendations was for a social care premium—social insurance of the type used in Germany—to solve this problem. There are no Liberal Democrats on those Committees but will his party nevertheless support such a cross-party approach?

[Sir Vince Cable]

That was at the heart of the Dilnot proposals that Lib Dem Ministers sponsored and supported in government. If that is the idea, we do not have any problem.

On the income tax changes, and particularly the lifting of the higher-rate threshold at a cost of about £1.3 billion, I certainly do not regard people on £50,000 a year as rich—they have a lower income than we do, among other things—and, in an ideal world in which there was plenty of tax revenue and the economy was booming, lifting the threshold would be perfectly reasonable, but given other priorities it is a bad choice. As it happens, that £1.3 billion is equal to the shortfall between the amount of money the previous Chancellor took from universal credit two years ago and the amount that was reinstated this year. Filling that shortfall would be a much better use of the funding.

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

It is a pleasure to follow the hon. Member for Enfield, Southgate (Bambos Charalambous). Although I do not agree with all his views, I thought that the way he put them across was clear and impassioned, and I congratulate him on that.

I must draw the House’s attention to my entry in the Register of Members’ Financial Interests, because I want to focus most of my remarks on business and I was in business for most of my life before entering Parliament, but I will begin by touching on other elements.

As the co-chair of the all-party parliamentary group on poverty, I particularly welcome the measures relating to the personal allowance and the increase in the national living wage. When combined, those measures mean that people who are in full employment and earning the minimum wage will be £3,955 a year better off in cash terms than they were in 2010, which will transform many lives. We simply could not continue with a situation in which the Government were supporting business through tax concessions and tax credits; it is right for business to stand on its own two feet. I hope that the national living wage will increase at some point, as it must if we are to reach a real living wage. The gap is narrowing, but our aspiration should be to ensure that, in a prosperous society, everyone prospers.

I also welcome the extra measures for universal credit, which were called for by many Conservative Members. The extra £2 billion a year will make a big difference to a system that is already working well in many ways. It is not without its faults, and we need to focus on the areas in which it is not right as well as those in which it is, but it, too, will make a huge difference. It was introduced in Ryedale, in my constituency, early in 2017. There were initial problems with some of the payments, but following measures that the Government introduced at the end of that year, most of them have been alleviated.

The 33% rate reduction for many businesses is welcome, as is the fund for investment in our high streets. However, the main issue affecting the retail environment is not the level of business rates, but the migration of consumers from shopping in retail premises to shopping online. We cannot simply cut business rates to deal with that problem. The Chancellor’s contribution is welcome, but we need other measures, too. At some point, we will need a structural review of the business rates system for retail premises. There is no doubt that online retailers pay a much smaller proportion of their turnover in business rates than retail high street premises—about four times less.

Local authorities also need to do their bit. Too often, they are giving permission for out-of-town shopping centres. Consent has been given to four in York, all of which will offer free parking. The city centre car parks run by the local authority are charging £2.50 an hour, which is massively disadvantaging businesses in the city centre. Businesses were telling the local authority that this was going to happen many years ago, and it has had a devastating effect on many high street businesses.

I am most pleased with the Government continuing their corporation tax reductions; it is absolutely the right thing to do. I am also pleased that they are continuing provisions such as entrepreneurs’ relief, the seed enterprise investment scheme and the new enterprise incentive scheme. The Opposition think, “We can simply increase corporation tax. It’s a victimless crime. We’ll collect all this extra money and then the corporations will pay.” That is not how it is. When the Opposition speak on these issues, whether about requisitioning parts of businesses or taxing companies more, they remind me of the Churchill quotation—that some people look at private enterprise as a tiger to be shot or a cow to be milked, when it is actually

“the strong horse that pulls the whole cart.”

And that is the reality.

The Opposition simply want to raise corporation tax, and they think that corporations will just pay and that will be it. Of course they will pay extra tax, but the consequence in a competitive market is that prices will go up. At the end of the day, all consumers pay all taxes. The reality is that excess returns in a competitive marketplace get competed away right down to the cost of capital. Therefore, if we put up corporation tax, the pre-tax profit has to rise to ensure the same return on a post-tax basis. All that will happen in a competitive market—most of our markets—is that prices will go up and the consumer will pay. That is the reality, so I welcome the reduction in corporation tax because it encourages inward investment in this country.

Not all our markets are competitive and not all our enterprise is in competitive markets, so I welcome the fact that we have brought forward a digital services tax for one market that is not competitive—the huge technology giants that are dominating the landscape and not paying their fair share of taxes. It cannot be right. Those companies benefit from the fact we have a well-funded education system, hospitals, welfare system, social care system and pensions system. They cannot just trade in this country, switch the profits to a foreign jurisdiction and avoid tax. It is absolutely right, historic and brave that the Chancellor has acted on this, outside an agreement with the OECD. It would clearly be better if we worked internationally, but it is right to take this first step.

There is one area where the market is not competitive and which I am heavily involved in as the co-chair of the all-party parliamentary group on fair business banking and finance—that is, the relationship between business and banks. Some 90% of business lending is dominated by the four biggest banks—Royal Bank of Scotland, Lloyds, Barclays and HSBC—but when something goes wrong, there is no way on earth a small business can compete with a bank when trying to resolve disputes. It simply cannot be right that these banks can use their financial power in order not to be held accountable when something goes wrong with their own customers. We have seen many cases and have talked about this issue before in Parliament. I know that this is not part of the Finance Bill, although I would very much have liked it to be.

The Chancellor has said that he will support the recommendations of the Financial Conduct Authority to expand the Financial Ombudsman Service from its current jurisdiction of £150,000 compensation limit to £350,000, but most cases we deal with in the all-party group are in the millions of pounds. I am delighted that the Chancellor has just walked in while I am talking about this issue. There is a very good example in an article by Jonathan Ford in today’s Financial Times. The bank sold Arthur Holgate & Son—a company turning over £2 million—an unsuitable interest rate hedging product, sending it under; it went into administration. How on earth is Arthur Holgate & Son supposed to deal with that and take Barclays to court? The company was offered £311,000 in compensation, but it eventually managed to insure the legal fees for the court action and got a settlement off Barclays of £10 million. Most companies that have gone through this process simply do not have the funds to take a bank to court. That cannot be right.

[Stephen Kerr]

I pay tribute to my hon. Friend for the work he does in the APPG on fair business banking. Many thousands of small and medium-sized businesses were mistreated by the banks during the period that we often discuss in the Chamber. Does he agree that it is vital for capitalism in this country and the enterprise economy that justice is done and seen to be done for them?

[Kevin Hollinrake]

My hon. Friend is right. Capitalism depends on a fair and level playing field, and that is not where we are at the moment. As well as the expansion of the Financial Ombudsman Service, which we fully support, our all-party group proposes the introduction of a financial services tribunal that works in pretty much the same way as an employment tribunal. A company could take a bank to court without standing the costs of that bank, with full powers of disclosure, and justice could be seen to be done, which is critical.

[Jonathan Reynolds]

The hon. Gentleman knows that I share his view on this issue, and I commend his work as chair of the all-party group. There is considerable agreement on both sides of the House that this needs to be resolved, and it is not a satisfactory position. As we have the Chancellor in the Chamber—or we did; he has disappeared—may I ask the hon. Gentleman whether he agrees that the will of the House on this issue should not be underestimated?

--- Later in debate ---

[Kevin Hollinrake]

I agree with the hon. Gentleman. This will come sooner or later, and we should grasp this opportunity. It is clearly in the interests of businesses that they should be able to seek resolution fairly in the courts. The courts are all about dispute resolution. Anything else is an alternative, and it cannot be right. There is a saying that the High Court is open to everyone, just like the Ritz hotel. We cannot have that situation.

We need a fair and level playing field. We need businesses to be able to take a bank to court if they have a valid dispute. That is good for the banks; it gives them certainty about what the rules are, and they can get adjudication on key questions that they will want the answer to. It will give confidence to borrowers, and businesses will borrow more, which is good for UK plc. As well as the fine things that Treasury Ministers are doing through the Finance Bill, I urge them to look at this issue and seek to introduce a financial services tribunal at the earliest opportunity.