The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019
Lord Benyon Excerpts(5 years, 5 months ago)
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Richard Benyon (Newbury) (Con)
I have some sympathy with the Minister. As a Minister in 2010, I inherited a situation where the Government were being taken to the European Court and were going to be subject to substantial multimillion pound fines on an occasion when the British Government intended to have a stronger environmental ambition than the rest of the European Union. That continued to happen relentlessly throughout my three and a half years as a Minister, attending international forums where we were promoting ideas and ambitions that were greener and more environmentally friendly than those of the rest of our European partners.
I remember a conversation during the EU co-ordination meeting at a congress of the parties in Hyderabad, in which an appalling person from the European Union—a Brit, actually—threatened the British Government that if we continued to hold out for our high ambitions, which I think were on biodiversity targets, we would go against the principles of the Lisbon treaty and we would be subject to a fine. I have never had my pro-European tendencies tested more than when I was representing Britain in international forums and had to spend hours sitting in European co-ordination meetings, only to hear such a thing.
The Opposition spokesman, the hon. Member for Bootle, can have a bit of fun on these occasions, but because he is a sensible person he knows that if he were in Government he would not want to put the Government in the position of having to pay a huge infraction fine. My friend, the right hon. Member for Warley, knows too that the timetable of such things is not in the Government’s gift. Very quickly we could find ourselves in a position, regardless of where we are in terms of our exit from the European Union, where we are at risk.
It is not something that any of us feels comfortable with. I and other Members are working hard on a proposal to the Government that may be of some assistance in trying to find a way forward, both while we are members of the European Union and soon after we have left.
John Spellar
May I help the right hon. Gentleman with his difficulty? The reason the European Commission behaves like that towards the British is because the British civil service rolls over to it. Were our civil service prepared to be as robust as the French are in response, there could be a much more realistic relationship. One could not imagine French Ministers in a similar position introducing a measure in this way, with this timescale.
Richard Benyon
I respect the way in which the right hon. Gentleman presents that argument, but I think he knows that that is a fallacy. Such things are frequently said, but I assure him that my civil servants were as robust as they could be, and I and my fellow Ministers were as robust as we could be. However, we came up against the legal bulwark of the Lisbon treaty, and there was nothing that we could do.
I wish to probe a couple of points. Some years ago, a similar situation arose regarding VAT on repairs to churches. The Government produced something called the listed places of worship grant scheme to offset that. Could the Minister suggest a grant scheme to offset the cost as part of a future Budget? If we leave the European Union at the end of October, it would be good to have some idea of the Government’s ambitions post exit.
Secondly, under current HMRC guidelines, battery installs can attract the reduced 5% rate only if they are installed at the same time as new solar, unlike all the other technologies defined as energy saving by HMRC, which can be installed separately. However, the proposed HMRC change means that any combined solar and storage system is likely to be over the 60% material/install threshold and, therefore, will attract the full 20% VAT rate. I would like to ask the Minister about the option for HMRC to allow stand-alone battery installs to attract the 5% rate, opening up the battery retrofit market to around 1 million homes that already have solar.
The justification for defining batteries as energy-saving materials is that domestic PV customers in the UK typically self-consume just a quarter of energy generated, because solar generation tends to be in the daytime, whereas UK home power demands tend to be at night. The rest will be spilled on to the grid. If a customer buys a battery, their self-consumption proportion typically would increase to around 70%—a huge efficiency improvement to the overall system for the customer, with the added benefit of reduced energy bills. Would the Minister consider that as a way forward?
Sanctions and Anti-Money Laundering Bill [Lords] (Sixth sitting)
Lord Benyon Excerpts(6 years, 8 months ago)
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Richard Benyon (Newbury) (Con)
I think it is worth saying for the record that there is a chill wind blowing through the financial lives of some of the people who have used our economy, particularly our property sector, for nefarious purposes and money laundering. From my conversations with a current Security Minister, and from what I know the Government are doing to implement the asset freeze legislation, I have no doubt that that is being taken forward aggressively and in a determined way. That is being recognised abroad; it is certainly being recognised by some of those people who have used the ability of our economy, through good title deeds, to make property a means by which to bury nefarious funds.
We are talking about legislation to hold future Governments to account. I entirely accept my hon. Friend the Economic Secretary’s assertion that this a complex situation to get right. I would like a little more clarification, and I am prepared to cut him some slack on this because if this is not done properly, it will be exploited and people will be able to move wealth in a globalised economy in a much freer way. It should be tied down in a way that encourages people still to invest in this country. I welcome the fact that people want to invest in our property, whether commercial or residential, but not, as the hon. Member Bishop Auckland says, just to leave homes empty. I recognise that that is a real issue, but there is the sheer importance of making sure that all of the provisions are correct. I know it has been complicated: in the asset freeze legislation, there was institutional resistance to what are called Magnitsky-lite measures that were introduced. In a classic piece of good ministerial play, the Government faced down those institutional problems that existed in parts of the civil service and elsewhere and took that forward. To their credit, they are now implementing the measures. I would just like some more assurance from my hon. Friend that this complexity will be tackled with urgency.
John Glen
I am grateful to my right hon. Friend the Member for Newbury and to the Member for Nottingham North for their further observations. I understand the sentiments of frustration and impatience with the Government on this matter. I hope I have spelled out in some detail—in the areas of land registration; alignment around the different parts of the United Kingdom; and making sure that the penalties are appropriate and that the enforcement measures are set to meet the challenge—that the Government have bold ambitions to get this right and to be a world leader in this area. I acknowledge that this has taken rather longer than it would have done in ideal circumstances, but I can confirm and reiterate to my right hon. Friend that the Government are fully committed to delivering this as soon as possible, and that there is a commitment across multiple Departments and the ministerial team to ensure that this reflects the bold aspirations that we have as a nation. I hope that that would be sufficient for us to move on.
Sanctions and Anti-Money Laundering Bill [ Lords ] (Sixth sitting)
Lord Benyon Excerpts(6 years, 8 months ago)
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Richard Benyon (Newbury) (Con)
I think it is worth saying for the record that there is a chill wind blowing through the financial lives of some of the people who have used our economy, particularly our property sector, for nefarious purposes and money laundering. From my conversations with a current Security Minister, and from what I know the Government are doing to implement the asset freeze legislation, I have no doubt that that is being taken forward aggressively and in a determined way. That is being recognised abroad; it is certainly being recognised by some of those people who have used the ability of our economy, through good title deeds, to make property a means by which to bury nefarious funds.
We are talking about legislation to hold future Governments to account. I entirely accept my hon. Friend the Economic Secretary’s assertion that this a complex situation to get right. I would like a little more clarification, and I am prepared to cut him some slack on this because if this is not done properly, it will be exploited and people will be able to move wealth in a globalised economy in a much freer way. It should be tied down in a way that encourages people still to invest in this country. I welcome the fact that people want to invest in our property, whether commercial or residential, but not, as the hon. Member Bishop Auckland says, just to leave homes empty. I recognise that that is a real issue, but there is the sheer importance of making sure that all of the provisions are correct. I know it has been complicated: in the asset freeze legislation, there was institutional resistance to what are called Magnitsky-lite measures that were introduced. In a classic piece of good ministerial play, the Government faced down those institutional problems that existed in parts of the civil service and elsewhere and took that forward. To their credit, they are now implementing the measures. I would just like some more assurance from my hon. Friend that this complexity will be tackled with urgency.
John Glen
I am grateful to my right hon. Friend the Member for Newbury and to the Member for Nottingham North for their further observations. I understand the sentiments of frustration and impatience with the Government on this matter. I hope I have spelled out in some detail—in the areas of land registration; alignment around the different parts of the United Kingdom; and making sure that the penalties are appropriate and that the enforcement measures are set to meet the challenge—that the Government have bold ambitions to get this right and to be a world leader in this area. I acknowledge that this has taken rather longer than it would have done in ideal circumstances, but I can confirm and reiterate to my right hon. Friend that the Government are fully committed to delivering this as soon as possible, and that there is a commitment across multiple Departments and the ministerial team to ensure that this reflects the bold aspirations that we have as a nation. I hope that that would be sufficient for us to move on.
Sanctions and Anti-Money Laundering Bill [Lords] (Fourth sitting)
Lord Benyon Excerpts(6 years, 8 months ago)
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Helen Goodman
I beg to move amendment 26, in clause 27, page 21, line 8, at end insert—
“(d) the steps taken to promote the adoption of sanctions on a multilateral basis;
(e) a summary of any representations made in relation to the exercise or proposed exercise of the powers and the response of the appropriate Minister to the same;
(f) a review from the Independent Reviewer, appointed pursuant to section 20 of the Terrorism Prevention and Investigation Measures Act 2011 (‘the 2011 Act’), of the operation of this Act in the reports by the Independent Reviewer produced pursuant to the 2011 Act.”
This amendment would require the review of regulations to include consideration of the steps taken to promote the adoption of sanctions, a summary of the representations made in relation to powers under this Act and an independent review of the operation of this Act.
I will not press the amendment to a vote, but moving it gives me the opportunity to make a couple of points and perhaps to ask a question. Proposed new paragraph (d) takes us back to whether we accept the Foreign Secretary’s rhetoric about being independent in how we implement sanctions, or whether we know that sanctions are most effective when we do them multilaterally. It is our firm view that we should implement sanctions multilaterally and that Ministers should explain to the House what they have done to secure international consensus on them.
Proposed new paragraph (e) was inspired by representations made to us by the voluntary sector, which wanted to be reassured that Ministers were listening to NGOs in their assessments. The clause says that Ministers have to explain the reasonableness of their “course of action”. That is a sensible thing to do. People will be confident that it is reasonable if they know that the views and information of NGOs have been taken into account. Mr Browder, whom the right hon. Member for Newbury referred to, was keen to have something along those lines, in order to demonstrate that the Government were in listening mode on the sanctions.
Proposed new paragraph (f), with the read-across to the Terrorism Prevention and Investigation Measures Act 2011, was also part of our Magnitsky package of measures. Rather than having a separate amendment with a new clause, I thought it was neater to wrap it in to the review at clause 27, to which Ministers have already agreed. I thought Ministers would find it easier to agree if we made this an amendment to clause 27.
Richard Benyon (Newbury) (Con)
The hon. Lady is right that this is a key part of the Magnitsky elements of the Bill. There may be a more elegant way of landing this and I am looking forward to hearing what the Minister says about it.
The review aspects are fundamental to achieving what I was talking about earlier: consistency with other jurisdictions. I know the Government are keen to work with us. It may be that that happens in the coming weeks and we find some mechanism by Report stage. Again, the Minister has this in his gift. There are those who say that what we propose would somehow be more than other countries have adopted as part of their Magnitsky legislation, but the US, for example, has a far more onerous oversight provision. It allows certain members of Congress the right to demand that the Government consider sanctioning certain individuals, and the Government have to respond within 120 days to give the reasons why they did or did not. That is called the congressional trigger, and there are other mechanisms in other jurisdictions elsewhere.
What we would like to achieve is that as soon as practicable after six months have elapsed, beginning with the day the Act is passed, and every 12 months thereafter, the Secretary of State prepares a report about the exercise of the powers conferred by the Act and lays that report before Parliament. Subject to issues of clear confidentiality—I absolutely accept that is a requirement—that report should include a summary of any representations made in relation to the exercise or proposed exercise of powers and the response of the appropriate Minister to do the same.
I think there may be some work to be done on the question of who the independent reviewer should be. I note the form of words, which I was initially attracted to by the hon. Member for Bishop Auckland. There may be machinery of Government issues, which mean that that is not the right place for the independent reviewer to reside, but I think there are many ways of skinning this particular cat. The review element is fundamental, because it is important that those organisations that are taking forward evidence are able to have that evidence independently verified and Government held accountable.
On a related issue, which is not specific to this Bill but that makes my point, campaigners—with very good evidence—have brought cases about people connected to serious organised crime from overseas who operate in this country. They have taken that to agencies such as the Serious Fraud Office, the National Crime Agency and others, but it has not been taken up. When they have done that in other countries, assets have been frozen, people have been subject to visa denials and other measures have been taken. Somehow, people slip between the cracks in our system, and this is an opportunity to close that gap.
On where that independent reviewer resides, I am open to suggestions from my right hon. Friend the Minister or anyone. I am glad that the hon. Member for Bishop Auckland has given us a bit of breathing room to resolve this. By Report, we really need to have a review process that is independent and comprehensive; that addresses the measures that we require to allow people who have access to information to bring it forward; and that holds Government accountable for how they deal with that kind of information.
Sir Alan Duncan
The amendment is important because it overlaps with our earlier discussions about the broader Magnitsky issue. It also introduces two other elements, so it has three distinct elements.
The first element is the issue of adopting sanctions on a multilateral basis, which is what sanctions are really for. It is quite rare for sanctions to be adopted by only one country. Their whole effectiveness depends on multilateral co-operation. UN sanctions, which we are obliged to implement, are multilateral by their very nature. All the other sanctions that we have imposed in the past have also been multilateral, because we have imposed them as part of the EU. Although our departure from the EU necessitates our having an autonomous sanctions regime, we envisage that its operation will almost inevitably be multilateral. We agree that sanctions are more effective when they are adopted by a greater number of countries.
The UK plays a leading role as a permanent member of the UN Security Council in negotiating sanctions measures that build on the entire international community. We also work closely with the EU and other international partners in a range of groupings, such as the G7, and we will continue to work hard internationally to gain the widest possible support for sanctions measures.
In the second element of the amendment, the hon. Member for Bishop Auckland asks us to show our hand at all stages and to show the manner in which we piece sanctions together. However, to publicly reveal our discussions and the steps that we take to work with international partners could be damaging to those efforts. We would not wish to embarrass partners who, for their own reasons, decline to align with our sanctions policy or to risk the targets of sanctions understanding too much about which country was in which position on any given sanctions regime.
A related issue is whether an individual can nominate someone to be sanctioned, which they can. Any person can write to the Government and the Government will respond. Individuals may request that the Government apply new or additional sanctions regimes, and we will of course consider that.
Sir Alan Duncan
I cannot quite say that it happens in that way, although there are some issues, and of course countries being discussed in the UN—because, for instance, they may be developing nuclear weapons—obviously does come across a Minister’s desk. That happens less frequently in the case of any individuals, particularly because at the moment we do not have an autonomous sanctions regime that would make all such representations come directly to the desk of a Minister or his close officials, because we are part of the broader EU system. When we have an autonomous regime, I envisage that that type of thing is more likely to happen than it does now, because it tends to happen much more within the EU system at the moment.
The third issue about the amendment is the question of oversight. May I just say to my right hon. Friend the Member for Newbury that I totally understand that the two key words in what he is pressing for are “independent” and “reviewer”? He suggests the need for some kind of independent entity, force or person that perhaps represents the interests of those calling for sanctions, rather than just the interests of the Government in executing sanctions. I understand what he is saying and we will have to consider this matter further.
However, I have to be firm in my view that the counter-terrorism figure suggested in the amendment is not the suitable person to do this work. The amendment is about counter-terrorism, if it is counter-terrorism, but this measure is more broadly about sanctions. So what would happen under the amendment is that someone whose job at the moment is counter-terrorism would have their job widened. It may be too burdensome; the whole job description would have to be changed. They would not necessarily have the required skillset, so they would be the wrong person to try to designate for this purpose. In simple language, they are not the right horse for the course. However, given what my right hon. Friend has said, we will of course need to discuss this matter further, as we approach Report.
Richard Benyon
I am grateful for that assurance. I am not qualified to say who this person should be and where they should reside. However, my right hon. Friend is right to say that the words “independent” and “reviewer” are fundamental to those who have been campaigning for this change for some time, and they would put the final icing on the cake of the Magnitsky element to this Bill.
However, will my right hon. Friend allow me, in as mild-mannered a way as I can put it, to convey to him that if other forces in the orbit of the postal district of SW1 were to rain on his parade of the assurances he has given us—I am mixing my metaphors here—there would be a problem for him on Report, and I want to make his life easy? I want this Bill to breeze through the Chamber with universal support and adulation for him, and that we will not find any need to argue the point.
Sir Alan Duncan
I both thank and congratulate my right hon. Friend for the elegance with which he has made his point, and I can say in clear and simple language, “Message received.”
Perhaps I can also take this opportunity to inform the Committee, in a little more detail, our feeling and understanding of what we know are the independent oversight powers in the Bill, because they are a central part of the broader picture of oversight.
We think the Bill finds the right balance of powers and independent oversight of those powers, because—rightly—the powers to impose sanctions are placed in the hands of the Executive. As such, the Government will decide whether or not to impose sanctions and on whom. Likewise, in the first instance the Government will decide when to lift sanctions. That is in line with the standard practice of the Executive deciding foreign policy and is consistent with international practice.
However, the role of the courts—as the independent arbiter and judicial authority overseeing the powers in the Bill—is significant. The courts can look at decisions made by the Government under the Bill and judge whether those decisions were correct. If not, the courts’ judgment will of course be binding on the Government. Furthermore, the Bill has significant transparency requirements and the Minister has numerous reporting obligations to Parliament. The reports will all be laid before and scrutinised by Parliament. As is the case now, parliamentary Committees can produce their own independent reports and can take evidence and make recommendations. That will continue. There is far more scope for such independent oversight by Parliament than there is now, where decisions are taken in Brussels and there are limited reporting requirements to the UK Parliament. As such, we believe that the Bill finds the right balance of Executive decision making, independent judicial arbitration by the courts and independent political oversight and scrutiny by Parliament.
Helen Goodman
I am sorry, but I think we are now conflating two things. The Minister is conflating the arguments that were had in the other place on designated persons, and the arguments here. The changes that were made with respect to designated persons were completely reasonable. I would go further than that: I would say that the Minister in the other place, Lord Ahmad, was right to resist the blandishments of Lord Pannick, who wanted to provide a court process for UN sanctions as well as non-UN sanctions, but that is not what we are talking about here. I am disappointed that the Minister has not shown a more flexible posture, and indicated more clearly that he is prepared to think again. His intervention was really a defence of the Bill. He did not indicate that he was prepared to go some way, but not to have this precise wording. That being the case, I think we do want to test the will of the Committee.
Richard Benyon
Perhaps there is an opportunity, in the relatively short period of time between now and Report, for us to work collectively with the Government to try to identify a structure that would read better in the Bill, and that would give the kind of assurances that the hon. Lady is after. Without having gone into the weeds of the issue, I am quite attracted by what Congress has—the congressional trigger is a relatively powerful means of holding the Executive to account. The Joint Committee on Human Rights may be a vehicle in Parliament to give it an added degree of independent oversight. I have not consulted to any great degree with those who have been working on this matter for longer than I have, or with those who understand more about drafting a Bill, but I would be very keen to work with the hon. Lady on trying to achieve that.
Helen Goodman
I am grateful to the right hon. Gentleman. I do not know whether the Minister would like to intervene again in the light of that, or whether he is content with what he has said.
Richard Benyon
I will not detain the Committee long. The Government have an opportunity to show off their virtue here. Yesterday, we saw the first application of the criminal finance powers to go after the people we are talking about. I gather that yesterday the courts granted us the first unexplained wealth order on a foreign person to freeze £22 million-worth of property assets in London. Within the constraints of what is wise in terms of disclosure, I think that some element of this proposal might be acceptable to the Government, although I feel that it could all be drawn together in a much simpler amendment. I refer to my earlier comments about how I think we should take that forward.
The Economic Secretary to the Treasury (John Glen)
I am grateful to the hon. Member for Bishop Auckland for not seeking to embarrass me again.
Amendment 36 requires the Government to provide quarterly reports on the impact of all sanction regimes, including the number and value of suspected breaches of sanctions. In considering the sorts of scenario that are in play here, hon. Members will remember that sanctions breaches are highly complex and involve multiple parties across various time periods. Sometimes they take place across borders and in different jurisdictions. The complexity of most sanctions breaches means that the investigation process from initial report to action often takes significant time and resources. There is also often a time lag between the breach taking place and being reported. The Government therefore continually adjust their figures as new information comes to light. Hence, it is very challenging to make the process fully accurate. It would be extremely difficult for the Government to report accurately on the number of breaches suspected or found at any one time. That would render the information published in the quarterly reports of little practical value.
The amendment would also place a significant burden on businesses. Currently, the Office of Financial Sanctions Implementation collects information on the value of funds frozen annually, which is onerous on businesses but important for compliance purposes.
Sanctions and Anti-Money Laundering Bill [ Lords ] (Second sitting)
Lord Benyon Excerpts(6 years, 8 months ago)
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The Chair
May I just make some announcements first?
First of all, normally, the announcement from the Chair is that gentlemen may remove their jackets if they wish. The announcement today is that anybody can wear their coats if they wish. It may be unparliamentary but I have just done two and a half hours in another Committee room and it was freezing, so I am comfortable if people want to cover themselves in layers of clothing. Indeed, I have got my coat here in case I get cold.
We are about to resume the line-by-line consideration of the Bill. Unfortunately, we are all blessed with mobile phones. I remind everyone they need to be turned off and that, sadly, we are not allowed tea or coffee or hot drinks in here, although on such a day I almost feel I should be able to make an exception.
The selection list is available in the room and on the webpage, and it shows how the amendments are grouped together. I remind you that the Chair always has discretion to decide whether to allow a separate stand part debate on the individual clauses. I hope everybody understands that that is the usual practice.
Richard Benyon
On a point of order, Dame Cheryl. You anticipated my remarks. I was just going to ask if the House authorities could put 50p in the meter and turn the heating on. I do not want that to be my only contribution to this Committee.
The Chair
I am sure it will not be your only contribution. We do have a small heater over here in the corner, but unfortunately we cannot share it around the room. I am sure the debate will be lively and will keep us all hot. Without further ado, we will begin with amendment 21 to clause 17 on enforcement.
Clause 17
Enforcement
Draft Horserace Betting Levy Regulations 2017
Lord Benyon Excerpts(7 years, 7 months ago)
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Richard Benyon (Newbury) (Con)
I want to start by saying how important the issue is for my constituency. I estimate that between 700 and 1,000 jobs relate directly to the racing industry in West Berkshire. We are one of the three big training centres in the country, and the Lambourn valley is, of course, the home of national hunt racing. A lot of businesses on which my constituents depend have been looking carefully at the sometimes tortuous negotiations that have taken place on the subject over many years. Those of us who are members of the all-party group on racing and bloodstock industries will have sat in on frequent meetings with the Minister and her predecessors on either side of the House about how to fund such an industry fairly.
In addition to Lambourn, where there will be an impact, we have one of the premier racecourses in the country at Newbury. There are direct jobs there, as well as tourism throughout that part of the Thames valley, and the effect will be enormous. To understand the issue, including the reduction in income from the levy, we need to understand the extra costs of putting on a day’s racing at any course—leaving aside Newbury, which has the ability and location to generate other funds. There are racecourses in some of my hon. Friends’ constituencies, and in Scotland, that rely on racing for nearly all their income. We want a system that supports racing across these islands and that makes sure that the industry is set for the future.
The industry has relied for too long on an analogue system in a digital world—the hon. Member for Tooting put it well; it was brought in three years after I was born, when there was no online betting. The system by which people can now bet did not exist. Betting has of course changed in other ways. People can now bet on a place—or, to put it better, a variety of different conclusions to a race. Income to the industry has reduced because of online—and in some cases offshore—betting, from £115 million in 2007-08 to £54.5 million in 2015-16.
To answer the question of the hon. Member for Tooting about the Government’s predictions, according to the explanatory memorandum the figure of 10% will, on 2015-16 predictions, bring in an income of between £72 million and £84 million. That is not back to where we were in 2007-08, but it is certainly a big improvement. It is entirely right to implement a percentage, because then we will not have to rely on an annual review as we go forward.
Will the Minister give a little more explanation of how the governance of the levy will work and what systems will be in place following the ending of the current arrangements with the levy board? I felt at times that this issue was as difficult for Ministers of all parties to deal with as trying to pick up mercury with a fork. I congratulate the Minister on not only nailing this, but doing so with agreement right across the industry. There may be some outliers who disagree, but the conversations I have had seem to suggest that she has achieved the alchemy that has been missing; perhaps it will set her straight for a future career in negotiating a power sharing agreement in Northern Ireland.
As things stand at the moment, we are now able to say that all betting—offshore, online, onshore or in the traditional way on racecourses—will be subject to a system that will result in a fair income for racing. I congratulate the Minister on achieving that.
Sir Edward Garnier
“No chance”, he says. There we are—there is a God.
While we are getting excited about what my hon. Friend may think is the unfair nature of this new arrangement on the bookmaking industry, I think it is important that we also discuss the unsung heroes of the racing world who work at and run, shall we say, the less famous racecourses throughout the country.
The last time I went to Leicester Racecourse—last summer, for one of the summer meetings—the number of people working backstage was probably just as great, proportionally, as it would have been at Cheltenham, Newbury or Aintree. However, the cash flow and the money going through that particular racecourse is not nearly as great as at some of the great festival racecourses.
Richard Benyon
Does my right hon. and learned Friend also agree that the cost of putting on a day’s racing and complying with all that we now require—on crowd management, health and safety and all of the other good policy changes that have been made for the public’s safety—is extremely burdensome on precisely those smaller courses?
Sir Edward Garnier
My right hon. Friend makes the point I was trying to make rather better than I was making it myself; I am grateful to him for having done so.
It is perfectly true that the number of people from the medical services, vets, stewards and other officials now needed to put on a day’s racing is enormous. From the stable yard right the way through to the car park, there are lots and lots of people, all of whom have to be paid, apart from some of the kind volunteers who help out for the love of it. Those are not racecourses that are putting on tens of meetings a year or attracting the greatest of the prize money. Of course, the famous yards that my hon. Friend the Member for Shipley mentioned will no doubt benefit from the regulations, but I hope the money will trickle down and enable racecourses such as Leicester and—is there a racecourse at Hexham?
Battle of Jutland Centenary
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Mrs Drummond
Absolutely. I do not think there is a single place that has not contributed to the Royal Navy at some time.
Jutland has always been a difficult battle for lay people to understand, because of the chaos of a naval action in poor visibility and darkness. Despite a massive toll of injury and death, the true impact of the battle was not understood at home, even immediately afterwards. There were some early interpretations of the outcome as a German victory, followed by an understanding that it was in fact a strategic defeat of Germany. Exactly a month later, the horrors of the Somme brought a fresh wave of shock to the population. Although we are here now to commemorate the centenary of the battle, it has spent most of the past 100 years lurking in the shadows of our national consciousness, yet the impact on my city of Portsmouth was profound. Portsmouth provided a major part of the crews of the biggest ships in the fleet. In Portsmouth’s manned ships we lost 3,000 lives in the battle of Jutland, more than we lost at the Somme. The impact of Jutland on families and communities in the city was huge.
The battle of Jutland jerked the Royal Navy out of Victorian complacency about its leadership. It had led the way with the building of Dreadnought and its successors at the insistence of Admiral Jacky Fisher, but over that period, and for long before it, the leadership of the Navy had fossilised ideas and played down the importance of initiative; it was constricted by the Victorian class structure.
Mrs Drummond
I am unable to, as I do not have much time. At Jutland, there were various examples of squadron commanders failing to act on their own initiative and a conservatism in the standing orders of the fleet, which were based on the outmoded premises of the Victorian era. There was an automatic assumption by almost everyone that the commander on the flagship must already be aware of what they saw. There was a reluctance to break wireless silence at night when important developments occurred. Generally, there was a disinclination to act and an eagerness to defer to authority—all those things are seen as the inevitable outcome of the structured rationalist certainties of the late Victorian fleet. By the prescriptive, centralising premises on which his elaborate battle orders were based, Jellicoe had acted correctly—but they were the premises of the Victorian era. Arthur Marder, writing in 1966, described the Royal Navy of the turn of the 20th century as follows:
“though numerically a very imposing force, it was in certain respects a drowsy, inefficient, moth-eaten organism”.
On the other side, the Germans had a technical and tactical understanding among their commanding officers that surpassed ours. The German navy arguably came into being as a distinct separate organisation only in 1888—indeed, most of its ships were named after Prussian soldiers. Alfred von Tirpitz became chief of staff to the German navy’s high command at the age of 48, after being a specialist in torpedoes and mines. He recognised that the torpedo could be as vital as the gun, and ensured that tactical exercises replaced formal manoeuvres. The Germans practised a manoeuvre called “battle turnaround”, which was a simultaneous turnaround for all ships in the convoy, rather than the turn in succession. It made it easier to escape bombardment, and this was so successful at Jutland. Every encouragement was given to German subordinate officers to act on their own initiative whenever they could better further their commanding officer’s intentions, rather than have rigid compliance with orders. Admiral von Tirpitz was instrumental in the appointment of Admiral Scheer as head of the German high seas fleet who, likewise, was a torpedo specialist. Although it is not quite as true of the Royal Navy as it was of the Army in world war one that they were “lions led by donkeys”, there were clear deficiencies, and it is to the credit of the Royal Navy that they rapidly learned the lessons.
If we are to be critical of naval leadership, we should, at the same time, remember the burdens that fell on Admiral Jellicoe. He had, at all costs, to avoid a major defeat. In fact, he showed the Germans that the Royal Navy, even at the huge cost of life at Jutland, had the strength to fight battles on that scale repeatedly while they did not.
The lead that we built up in the Dreadnought race before the war was simply too great. The consequences of Jutland were that our naval supremacy on the surface remained unchallengeable. Germany largely kept its surface fleet in port and resorted to the unrestricted submarine warfare that eventually brought the United States into the war and doomed Germany. Jellicoe and Beatty led a Navy that stuck to its tasks and bravely undertook its duties despite horrendous hardships.
We find ourselves now in a new era of development, with two new aircraft carriers shortly to enter service; the introduction of the excellent Astute-class submarines, and a clear plan for renewing the nuclear deterrent. There is no doubt that, technically, our Navy is at the forefront of technology and doctrine.
However, it is not enough for us in this House to allow the Royal Navy to acquire the most up-to-date equipment if it is to rest idle in the docks in Portsmouth, Plymouth or Faslane. We must provide the resources to enable the Navy to recruit and retain a highly motivated team. We must provide them with the resources to work out the best way to utilise the equipment to enable them to develop tactics.
Today it is tempting to believe that, with the internet, satellite communications, and video-stream links, we can have centralised systems and that, just like Jellicoe, we can control those people in the field. However, just like at Jutland, there could be a misplaced assumption by those in the field that those in the centre already know what is going on.
In the battle of Jutland, there was one flag signal every 67 seconds. In the Falklands, HMS Hermes handled 170,000 signals in 10 weeks, or one every 39 seconds. Too much signalling can lead to information overload. It can also centralise decision making and stultify initiative.
In times of peace, the value of experience fades and is replaced by rational theory as a result of new technology discrediting previous experience. We might do well to remind ourselves of the quote from Sun Tzu, the Chinese general who wrote some 2,500 years ago:
“The supreme art of war is to subdue the enemy without fighting”.
That encapsulates the object of our strategy of deterrence, and so we must demonstrate to all our potential enemies that not only do we have the most up-to-date equipment, but we also know how to use it.
The people who have served in our forces in the past, now, and who will serve in the future must always be at the centre of our thoughts. At this time of year, our forces have fought crucial battles in other wars besides world war one. On this day in May 1941, the fleet led by Admiral Cunningham, supported by my father-in-law, on HMS Hereward, began the evacuation of Crete, one of the Navy’s grimmest tasks but one it carried out with devotion and sacrifice.
Thirty four years ago, all three services were fighting 8,000 miles away to liberate the Falklands. Today, 25 May, is the anniversary of the sinking of HMS Coventry. A total of 19 of her crew were lost and a further 39 were injured. Our hearts go out to the friends and relations of those who were killed in that battle.
Most of us in this House were alive during the Falklands war, and it is through our memory of that conflict, including that of the fate of HMS Coventry, that we have a greater understanding of the shock suffered by the nation after the battle of Jutland. Likewise, it is through the people we know who fought in that battle that we have some understanding of what it must have been like at Jutland as bombs and missiles hit magazines in those ships too.
While we have enjoyed decades of peace in Europe, around the world our service personnel have been in action in difficult circumstances, and suffered injury and death. We must listen to their experiences and keep on learning the lessons that they can teach us. I am proud of the thinking behind the armed forces covenant, but there is still more that we can do to ingrain it in how public services support veterans and those still serving.
There are always lessons to learn in victory or defeat, or in between. Jutland was a victory, although it did not resemble the second Trafalgar that public opinion had become conditioned to look for. Beatty said during the battle:
“There is something wrong with our bloody ships and something wrong with the system”.
Within a year, the standing orders of the fleet were updated to encourage initiative and the taking of responsibility by junior commanders.
Among the crews at Jutland in junior positions there were no fewer than eight future First Sea Lords, and there is no question that the Navy went into the second world war better led as a result of the lessons learned in 1916. Admiral Sandy Woodward wrote in 1996:
“The Navy had to rediscover from bitter experience of 1914-16 much about warfare which it should never have forgotten”.
The differences of opinion about Jellicoe and Beatty were settled before they both died. The country honoured both men with burials in St Paul’s cathedral and busts in Trafalgar Square near Lord Nelson, thus recognising their huge contribution to the security of this country.
It has always been the nature of the Royal Navy that it recruits from all over the country, inland as well as from the historic ports, and every village and town will have made its contribution to the work of the Navy at some time. But it is an honour as the Member of Parliament for Portsmouth South to commemorate the lives of all those who fought at Jutland, and let us be thankful that a repeat of such conflict between the nations of Europe today seems so unthinkable.
Finance (No. 2) Bill
Lord Benyon Excerpts(10 years, 7 months ago)
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Chris Leslie
We should be cutting business rates for small and medium-sized enterprises. I am very surprised that the Government are focusing their help predominantly on the 2% of the largest multinationals—the big firms—and not doing, in my view, sufficient for that 98% of British business, the small and medium-sized enterprises. They will be the backbone of a recovery and we have to do much more to support them.
It is a shame that in the Bill the Government are choosing to go to that 20% rate in April 2015. We could instead use that resource and focus it on the multiplicity of small firms. They should be getting a cut in business rates. We calculate that it would deliver an average tax cut of at least £400 for 1.5 million properties through the business rates system, benefiting small and medium-sized enterprises, which after all are the backbone of the economy. They provide the dynamism to get the growth going, which we so desperately need.
Richard Benyon (Newbury) (Con)
I know it is the Opposition’s job to oppose, but does the hon. Gentleman wonder whether sometimes this is not good politics? He will be getting the same message from his chamber of commerce as I am getting from mine, as well as from hard-working families who are benefiting from the Budget, pensioners and people on low incomes? Instead of the reasoned amendment, surely there is something that he can welcome in this remarkably popular Budget—go on, have a go.
Chris Leslie
It is simple. It is easy to do a Budget in which the Chancellor gives a few little things back, such as that penny off a pint of beer—buy 300 pints, get one free—and we are supposed to be grateful for such generosity. The hon. Gentleman should be advising his constituents to check their wallets. The thing about this Chancellor is that he takes far more with the other hand than he gives in the first place. That is his fundamental problem.
Interest Rate Swap Derivatives
Lord Benyon Excerpts(11 years ago)
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Guto Bebb
That is certainly a call that some of the organisations campaigning on this issue have made, and I am sure that other hon. Members and members of the all-party group will expand on that theme in their speeches.
We thus need to look carefully at the alternative product issues. It is fair to argue that businesses might have been looking for interest rate protection, but it is difficult to argue that they would have been tempted by an expensive product in 2006-07, when a cap offered such good value for money at that time. I am unpersuaded of the arguments for a complex derivative.
Richard Benyon
I am grateful to my hon. Friend. Many of these products were sold on the basis of a projection for interest rates to go up. There is a slam dunk case against some of these companies for showing a graph of projected interest rate rises when, of course, the opposite happened. Surely that should be a factor when it comes to whether or not firms’ were sophisticated about the product that was eventually sold.
Guto Bebb
I could not agree more with my hon. Friend. The expectations back in 2007 were that interest rates would go down, yet there were numerous examples of bank sales teams informing businesses that they needed to protect themselves against a rising interest rate scenario—contrary to the information that the banks themselves had.
Another key call is why there is no appeal process within the redress scheme. There would be much more confidence in that scheme if there were an appeals process. I understand that the Financial Ombudsman Service offered to provide an appeals service, but the offer was rejected by the FCA. It would give some comfort without complicating issues too much if, for example, assessors working for one bank in the redress scheme were able to provide an appeals process for another bank in it. That may not be perfect, but it would help to avoid over-complicating what is already a complicated redress process and it would give businesses the confidence that there is an appeal process and that they can turn to somebody else to argue their case. We should be very concerned about having a redress scheme without any appeal process, as it goes against the principle of natural justice, while opening up the door to litigation, when the whole point of the redress scheme was supposed to be to avoid litigation.
Embedded or hidden swaps, which are currently excluded from the redress scheme, are another key issue to highlight and a matter of huge concern. If we think about it, a hidden swap is quite possibly worse because businesses were not even aware that they were also taking out with their fixed-rate loan an interest rate derivative product. The American author, James Riley once said:
“If it walks like a duck, and swims like a duck and quacks like a duck, then it must be a duck.”
The same point needs to be made about these hedging products. If the impact of an embedded swap is the same as the impact of a separate hedging product taken out with it, it is difficult to argue that the small businesses that were sold those products should be excluded because of a technicality relating to whether they are subject to the FCA regulations. I ask the Minister to respond on that specific issue.
A publican from Aberystwyth, Mansel Beechey, was sold one of these embedded products. I know Mansel very well because when I was a student in Aberystwyth, I was financially illiterate and used to cash cheques in the pub. I used to do that on a Wednesday evening and pay 50p for the privilege. On a Saturday evening, I would want to cash a cheque again, and Mansel would say, “Well, make it one for £30, and I will give you back what you gave me on Wednesday, only charging you the 50p once.” Mansel Beechey thus showed me more respect and consideration, in behaving properly towards me, than the bank that sold him the hidden swap showed to him. That business had been built up over a long period. If Mansel Beechey could show to me a degree of responsibility that had not been shown to him, there is clearly something wrong with our banking sector.