Co-operatives, Mutuals and Friendly Societies Bill

Lord Mann Excerpts

2nd reading
Friday 24th March 2023 Lords Chamber

[Lord Mann (Non-Afl)]

My Lords, I congratulate the noble Lord, Lord Kennedy, and Sir Mark Hendrick, on their work and their diligence in bringing to a likely success this piece of legislation. I declare a relevant interest as a member of a mutual, the Yorkshire County Cricket Club, and as someone who has provided, in the last year, some significant work and advice, including on regulatory issues, with the Financial Conduct Authority. I am currently assisting the club in looking at the raising of finances from the capital markets or elsewhere to deal with its ongoing financial crisis. According to the press statements by those at senior levels in the club, there is currently a major financial crisis, and indeed a suggestion that the club is in some peril. There is an annual general meeting tonight. Doubtless more details will be provided in relation to that.

This Bill is very timely. It raises interesting questions about how new powers could be used and how the Treasury could give guidance to allow an inventiveness in use. Take the situation with Yorkshire County Cricket Club, a mutual. The public face states “a mutual”. It is my understanding that it is a community benefit society. However, I have been unable to get absolute clarification on that. The fact that one cannot get an easy clarification on that demonstrates a weakness in the current system.

Concepts of asset lock are often seen in terms of financing. Yorkshire County Cricket Club has set up a private charity, the Yorkshire Cricket Foundation. However, assets come in different forms. The financial crisis of this mutual is primarily because it has had an investment with non-mutuals in building assets—in this case, a stand, for which lots of money is owed and for which lots of money had to be borrowed. That agreement is within the mutual and yet outside the mutual because that is not an asset that the mutual controls and therefore can asset lock. Within the stadium, there is a hotel that is rather significant in terms of income generation for test cricket. It is owned by a third party. The interrelationship with the neighbouring rugby club, in relation to car parking and other assets, is complex, but in essence it is a mixed picture.

One could argue that the community benefit requirements under law—not least the 2014 law—would have required Yorkshire County Cricket Club to take a greater interest in the 2012 report by Tom Fletcher of Leeds Met university on racism in Yorkshire cricket and racist attitudes in Yorkshire cricket. If that had been done at the time, on some of the things that Dr Fletcher was able to evidence, future problems that emerged might have been avoided. That would seem to be a definition of community benefit that was not fulfilled under the requirements of the law and by the regulation under the FCA at the time.

What the Bill can do on the ambiguity of what is a mutual will be incredibly helpful to mutual members—I am a mutual member, and it is ambiguous to me at the moment—and there are other sporting clubs where the same would be found, but the key thing, which is potentially revolutionary for sporting clubs, is thinking through where asset locks could go. Asset locks are generally seen in terms of finances and supporting profits and how they are held on to. However, asset locks can include the pitch, for example. Therefore, if the mutual members of Yorkshire County Cricket Club were to choose to identify the pitch as a community asset and lock that in, it would mean that, should the club be in such a perilous state that it goes into liquidation and has the threat of a takeover by third parties who, in order to survive, may not wish to retain mutual status in the future, it would give this opportunity to the mutual members and empower them. For example, in a very different way, not by mutual but by private ownership, the private pitch owners at Chelsea Football Club locked in the pitch at Stamford Bridge, and not even Mr Abramovich could assuage them with financial offers to give up that ownership.

Given the Government’s intention to regulate football and, doubtless, a desire to have good management, ethics and systems across all sport in this country, this opens up a huge opportunity. I have put this to grass-roots, low-level—non-league, to be accurate—football clubs in the past. Ownership structures could be changed so that the core assets including the name, the pitch and perhaps the youth structures could be owned on a mutual basis, but the more complex assets such as the stands, corporate facilities and spectator facilities could be owned by a separate owner and not necessarily be mutualised. That would allow people to invest in some of the profit-making potential of bars and related foods et cetera, while guaranteeing that such ownership could never take away the essence of that sporting club.

I proposed that some years ago to Worksop Town Football Club. The owner at the time did not accept the concept, but the obvious way of managing sport in this country remains for a football club of that level and size, or in whatever sport: locking in the assets to a particular location; locking in the key thing in the asset, which is the pitch; and debarring. They certainly had a case at Worksop Town where one owner debarred local youth and schools from using the facility. Giving members the ability to determine who will use the core sporting facility is a semi-veto power of management, but not one that would put off any coherent private investor—who might want some kind of venture that they have built, such as a private sports club as part of a new spectator stand that he or she and their entity have profited from but, in reality, cross-subsided the creation of a stand for spectators, which then cross-subsidised the sporting body itself and the mutual.

It seems to me that, at many levels of football and cricket and, I dare say, one or two other spectator sports with similar complexities of finance, this anchors in the community benefit. The beauty and criticality of the Bill by the noble Lord, Lord Kennedy, is that it allows this to happen under any form of mutual. It is a game-changer in how, at that level—which is the level of most sport in this country—assets could be seen, and in how the supporter base and community could ensure that they have a lock on those assets.

I urge support for the Bill and urge the Treasury to move rapidly in ensuring effective guidance. This could revolutionise the grass-roots asset base in our sport and may well be of future assistance to troubled entities such as the mutual that Yorkshire County Cricket Club is at the moment.

Draft Small Charitable Donations Act (Amendment) Order 2019

Lord Mann Excerpts

Tuesday 12th February 2019 General Committees

[John Mann (Bassetlaw) (Lab)]

I will not be abstaining on the instrument; I will be supporting it on behalf of the charities in my constituency, where there are a lot of small charities. This is a minor but eminently sensible proposal by the Government, which will be welcomed by the many small charities in my constituency.

Former coalfield communities do not have large charities and large organisations; they have small charities and small organisations. It might interest the Minister to know that the one large charity supported in my constituency is Help for Heroes. Bassetlaw is not the wealthiest part of the country, but it is the highest per capita contributor to that charity in the entire country. That also goes for small charities—for example, the local mosque, which is the first in Bassetlaw. It was formed by a charity and I supported its establishment. There were some difficulties with extreme elements in the local community. Raising the £200,000 needed to establish the mosque requires a lot of small charitable donations.

The extra 25% that can be gleaned—I appreciate that it is only up to £8,000 annually for small charities—can make a significant difference to churches and to those who have set up small charities, which is particularly common in my area. An example is when a child has died in tragic circumstances and the family has set up a charity. That is a common tradition in mining communities, and it is a fine one. These charities are tiny and make a small but important impact. The fact that they can go that bit further—not least through the use of contactless donations, which has spread rapidly to areas such as mine—is to be welcomed. I fully endorse the Government bringing this measure forward. This is common sense, and I hope that Labour Members will support it rather than abstain.

Oral Answers to Questions

Lord Mann Excerpts

Tuesday 17th April 2018 Commons Chamber

[Robert Jenrick]

The hon. Lady raises an important point. We are working closely with the Department for Environment, Food and Rural Affairs, and my right hon. Friend the Chancellor announced a call for evidence on single-use plastics in the spring statement. We intend to make proposals in due course.

[John Mann (Bassetlaw) (Lab)]

13. What comparative assessment he has made of the size of the national debt (a) today and (b) 12 months ago.

[The Economic Secretary to the Treasury (John Glen)]

Public sector net debt as a percentage of GDP was 85.1% at the end of February 2018, which was 0.9 percentage points higher than last February. The latest forecast shows that debt will fall this year, two years before the fiscal rules require.

[John Mann]

The national debt is going up by £5,000 a second. Can I be helpful? Will the Minister join me in stopping hospitals that are outsourcing staffing to avoid VAT, with an estimated 6% savings on wages lost to the Treasury, from doing so?

[John Glen]

The important point is that the debt is going down this year. We want to avoid a situation like that in the last three years of the last Labour Government, when public sector net debt doubled.

Public Sector Pay Cap

Lord Mann Excerpts

Wednesday 5th July 2017 Commons Chamber

[Elizabeth Truss]

My hon. Friend is right that we need to look at what is included in the wider package that people receive, whether that is support for their pension, additional flexibilities or additional elements of pay and training, because training and progression are extremely important. I remember visiting Chelmsford prison in her constituency, which was looking at training opportunities for prison officers. We are looking at that throughout the public sector, because job satisfaction derives from many things, and although pay is of course important—I would not deny that—job satisfaction is also about working conditions and about people on the frontline feeling empowered to do their jobs well and knowing that they are making a contribution. Being a public servant is incredibly important, and we need to show that we are giving people on the frontline the ability to make decisions and really improve people’s lives for the better.

[John Mann (Bassetlaw) (Lab)]

As a public sector worker, how much has the right hon. Lady’s own pay increased since 2010 and how much has her productivity increased since 2010? Can the country afford her pay increase, and if so, does she agree with me that Britain deserves a pay increase?

[Elizabeth Truss]

I would answer the hon. Gentleman by saying that my pay has gone both up and down since 2010, but my pay is set independently. The important point is that the pay of public sector workers is determined by the pay review bodies, whose recommendations I take very seriously, and that is how we should approach this issue. Rather than trying to politicise the issue and saying that we should have a blanket approach, we have set public sector pay review bodies the remit to make such decisions themselves.

Economy and Jobs

Lord Mann Excerpts

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

I have not got to it yet, but the hon. Gentleman will hear an elaboration of our record since 2010 in just a moment.

I was talking about the 1970s, a decade when the lights literally went out, when inflation was in double digits, the country was crippled by strikes and bully-boy union power, and the Labour Government were forced to go cap-in-hand to the IMF for a bailout. The pretence of fiscal credibility is gone from Labour’s offer. The new pretence is that the cost of its spending spree would fall on someone else—the rich, corporates and foreign investors—but it would not. The cost would fall, as it always does when Labour gets its hands on the British economy, on ordinary people trying to get on with their lives.

If the Shadow Chancellor would put down “Das Kapital” for a few minutes and read an elementary economics textbook, he would understand why. Take Labour’s proposed corporation tax hike. The IFS analysis is pretty straightforward. The right hon. Gentleman quoted the IFS, but it said that

“much of the cost is likely to be passed to workers through lower wages or consumers through higher prices”.

The IFS is not alone. The shadow Chancellor’s predecessor, Mr Ed Balls, agrees. He says:

“The argument from this Labour manifesto that only the rich will pay, I don’t think it stacks up. From opposition, you can say, ‘Don’t worry, someone else will pay’–but you can’t do that in government.”

He might have added, “not if you seriously aspire to be in government”.

[John Mann (Bassetlaw) (Lab)]

Will the Chancellor give way?

[Mr Hammond]

I will in just a moment.

Here is the inconvenient truth for the Labour party about corporation tax. We cut corporation tax to the lowest rate of any large developed economy and two things happened. The private sector created 3.4 million new jobs—something, by the way, that the Labour party used to care about in the old days—and in the process we raised an additional £18 billion in corporation tax to fund our vital public services. That did not happen by magic. Lower corporate taxes attract more investment, more investment creates more jobs and more profits, and more profits deliver higher taxes. It is not very complicated.

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[John Mann]

As the Office for Budget Responsibility confirmed to the Treasury Committee following the Chancellor’s recent Budget, all his tax projections are predicated on an extra 1 million new immigrants entering the country and working over the next five years. Can he confirm that that is still his plan?

[Mr Hammond]

It is the OBR that makes the projections and it has been quite transparent about what its assumptions are about both trade and immigration.

Money Laundering: British Banks

Lord Mann Excerpts

Tuesday 21st March 2017 Commons Chamber

[Simon Kirby]

My hon. Friend is absolutely right. Greater information sharing and transparency are the way forward. The register of people with significant control is an important step forward, and I look forward to additional transparency in the future. Ultimately, people with nothing to hide have nothing to fear.

[John Mann (Bassetlaw) (Lab)]

To counter the impression that he has been promoted beyond his competence, can the Minister tell us which British banks have been convicted of money laundering over the past five years? What specific, individual thing has he learned from reading those judgments? [Interruption.]

[Mr Speaker]

Order. The question was discourteous, but it was not disorderly—there is a distinction. The hon. Gentleman has been practising that technique in all sorts of different forums in all the 30 years that I have known him. The question was not one of the more extreme variants on the theme.

Finance (No. 2) Bill

Lord Mann Excerpts

Monday 11th April 2016 Commons Chamber

[Mr Gauke]

I very much support the hon. Lady’s cause, and she supports my cause that manufacturers and retailers should pass on the VAT abolition to customers, and we expect to see that happen.

I should like to turn to the way in which the Bill will support British business and ensure that our employees have the skills they need. The Government committed in the Budget to put stability first, because it gives businesses the certainty that they need to invest, grow and employ people. The core of our support for British business is low taxes, and the Budget provides the biggest ever cut in business rates, worth over £6.7 billion over the next five years. Measures in the Bill will do more. First, we will again cut the main rate of corporation tax and reduce it to 17% in 2020, ensuring that we have the lowest corporation tax in the G20. By the end of this Parliament, corporation tax cuts delivered since 2010 will save businesses almost £15 billion a year, providing an important boost for our international competitiveness.

Our labour market is delivering the highest employment in our history, but we need to ensure that it has the right skills. The Bill introduces an apprenticeship levy of 0.5% of an employer’s pay bill, where it exceeds £3 million, from April 2017. That will deliver 3 million apprenticeship starts by 2010. By 2019-20, Government spending on apprenticeships in cash terms will be double the level of spending in 2010-11. We will put funding in the hands of employers to ensure that it delivers the training that they need by ring-fencing apprenticeship funding in England.

In the last Parliament, we took important steps to help entrepreneurs who start and grow businesses. We also want to ensure that they can access the investment that they need as they grow, and to that end we are legislating to reduce the higher rate of capital gains tax from 28% to 20%, and the basic rate from 18% to 10% from April 2016. Gains on residential property and the receipt of carried interest will remain unchanged. Those changes will create an incentive to invest in shares over property, and will help British companies to access the finance that they need to expand and create more jobs.

Finally, the recent Budget took necessary and radical action to support the oil and gas tax regime through difficult times. The Bill will legislate for a key part of this strategy in permanently zero-rating petroleum revenue tax. From April 2016, petroleum revenue tax will be reduced from 35% to 0%. We believe that wherever possible, we should use the tax system to stimulate growth and investment, whatever the sector.

[John Mann (Bassetlaw) (Lab)]

I have heard all of this on skills before from the Government. Will the Minister explain the productivity puzzle? Productivity appears to have gone down, rather than up. Why is that, because in every Budget attention has been given to skills? What has gone wrong with productivity in this country?

[Mr Gauke]

The hon. Gentleman makes an important point. It is a long-standing issue for the United Kingdom economy. I would argue that the steps we have taken as a Government to ensure that we have a competitive, business-friendly tax environment, that we invest in skills and increase the number of apprenticeships, and that we spend more on transport infrastructure—we are spending £60 billion over the course of this Parliament—will help to drive up productivity. Without those measures, our productivity levels would not be as high as they are. Further work still needs to be done, but policies that result in, for example, financial crisis so that we cannot afford transport infrastructure spending or that drive investment away from this country by being unfriendly to business will only damage productivity and will not help.

[Mr Gauke]

The Budget brings forward the expenditure on transport infrastructure in this Parliament so that we can gain the benefits of that investment earlier. The hon. Gentleman should welcome that.

Before discussing the measures in the Bill that address avoidance and evasion, I shall briefly address the issue that the Prime Minister covered earlier today—the Panama papers. Those papers have again put the spotlight on the global scourge of tax evasion and avoidance. As the Prime Minister set out earlier today, we are taking further action. First, HMRC and the National Crime Agency will lead a new joint taskforce to analyse the Panama papers and take rapid action where there is wrongdoing. It will initially have new funding of up to £10 million and will report to the Chancellor and the Home Secretary later this year.

Secondly, we will bring forward plans to introduce a criminal offence for corporations which fail to stop their staff facilitating tax evasion, ahead of next month’s summit to tackle corruption in all its forms. For the first time, companies will be held criminally liable if they fail to stop their employees facilitating tax evasion. Thirdly, our Crown dependencies and overseas territories have agreed to provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies. We have finalised arrangements with all of them except Anguilla and Guernsey. Guernsey currently has elections and its Parliament is not sitting, but we expect both those territories to follow in the coming days and months. For the first time, UK tax and law enforcement agencies will see exactly who really owns or controls every company in those territories. This Government’s message is clear: there are no safe havens for tax evaders, and no one should be in any doubt that the days of hiding money offshore to evade tax are gone.

[John Mann]

The Minister is generous in giving way. Are the agreements with the six Caribbean overseas territories still non-reciprocal or has that changed?

[Mr Gauke]

The move is towards reciprocal agreements, but for the first time our law enforcement agencies and our tax authority, HMRC, will have access to information held about beneficial ownership. That is a significant step forward and must be viewed in the light of the fact that we have introduced the common reporting standard, meaning that much more information is provided automatically to our tax authority in respect of money held there.

[John Mann]

rose—

[Mr Gauke]

I want to make a little more progress.

It is vital that we support businesses through low taxes. We must also ensure that tax is paid where it is due. This Government have set out a comprehensive package to tackle avoidance and evasion. In total this package will raise £12 billion by 2020-21. The Bill implements a number of those measures.

First, we are leading the way internationally by being the first country to adopt the OECD recommendations on hybrid mismatch arrangements. The Bill will introduce new rules to stop multinationals avoiding paying their fair share of UK tax through the use of cross-border business structures or financial transactions. It is estimated that this will raise more than £1.3 billion over the next five years. Secondly, we are ensuring that profits from the development of UK property are always subject to UK tax. This will level the playing field between UK-based and non-UK-based developers and raise £2.2 billion in revenue by 2020-21.

Finally, we will target the unfairness that many small businesses feel when they compete against companies on the internet. Overseas sellers are evading between £1 billion and £1.5 billion of VAT each year on sales to UK customers via the internet, unfairly undercutting British business and abusing the trust of UK customers. The Bill will provide stronger powers to require overseas sellers to appoint a UK tax representative who can be made liable for the VAT owed. This is part of a package of measures designed to level the playing field for firms trading in the UK. Once again, this Government have introduced a Bill which makes it clear that everyone has a responsibility to pay the tax they owe.

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[Seema Malhotra]

I thank the hon. Gentleman for his comments, but I think he will agree that the key issue in addressing the housing crisis is the rapid building of new homes and the strategy to deliver that effectively.

I want to make a few comments about entrepreneurs relief and the Government’s new investor relief. We welcome the endeavours to encourage investment, particularly long-term investment. The question will be whether the measures pass the test of what business is looking for: simplicity, stability and a strategic approach to fiscal policy. Our concern is that tinkering is no substitute for a clear, long-term strategy to support investment. That is why we are undertaking a review of tax reliefs to see what the evidence is for what incentivises business investment and provides real value for money. Our aim is to ensure that there is a strategic approach to supporting investment and the transparency around it. Those are questions we will pursue as we go forward into Committee.

We also welcome clauses on the reduction in oil and gas corporation tax and petroleum revenue tax. The Chancellor announced that he would reduce petroleum revenue tax from 35% to zero, and that he would reduce the corporation tax supplementary charge from 20% to 10%. There is no doubt that the struggling North sea oil and gas industry needs support. In fact, we think that the Chancellor could have gone further and announced the measures that Labour has called for. Our bold new proposal to invest in the industry is based on the creation of a new public body, which would be called UK Offshore Investment Ltd, to identify areas for temporary public investment. The purpose of that new body was spelled out last month by the Scottish Labour leader, Kezia Dugdale. It would conduct an open-book review with the Oil and Gas Authority to identify assets that have long-term viability and profitability. That, in turn, would provide the evidence to allow UK OIL to commit to public investment in strategic infrastructure and potentially profitable assets.

Clause 115 gives the Government power, through a statutory instrument, to reduce the VAT rate on women’s sanitary products from 5% to zero. That is welcome, as are the Minister’s comments. I am glad that the Chancellor has finally recognised that women’s sanitary products are not a luxury. However, it is crucial that the clause should set a firm deadline for the VAT reduction, and although the Minister’s comments signalled moves in that direction, they did not go quite far enough. I am sure that we will continue to address the point as we move forward in Committee and beyond. I congratulate Labour Members, particularly my hon. Friend the Member for Dewsbury (Paula Sherriff), and campaigners inside and outside Parliament on their hard work in forcing the Government’s hand on the issue. It is a sad indictment of the Government that it took a Labour amendment and an embarrassing Government defeat to achieve that result.

Where in the Finance Bill is a clause to reflect the Government’s other U-turn, which was on VAT on energy-saving materials? The Government accepted our amendment to the Budget resolution, which allowed the Government to legislate on the matter in the Finance Bill. The lack of legislation and the contradictory and noncommittal answers from Ministers are causing uncertainty in the industry. We simply call on the Government to make a commitment that they will not include a VAT rise for solar or other green energy measures in this or future Finance Bills.

On tax avoidance, the two key issues we face are structural reforms and public confidence. The rhetoric today, as in the past, has sought to be impressive—in the past, the Chancellor has said that aggressive tax avoidance is “morally repugnant”—but the reality has yet to match the rhetoric. Indeed, the tax gap has grown under this Government to £34 billion. Serious measures to tackle tax avoidance, which is estimated to account for £7 billion of the tax gap, will be even more critical.

It is two years since the Prime Minister wrote to UK overseas territories and Crown dependencies calling on them to publish a public register of firms and individuals sheltering money there, yet virtually no progress has been made so far. Today’s statement did nothing to move us forward on such a public register of firms and individuals. Fundamentally, this issue is about a rotten system that undermines the faith of ordinary families in the fairness of our tax system. Indeed, a definitive analysis by the Financial Times shows that the corporate tax avoidance measures that the Labour Government brought in will still raise 10 times as much as those introduced during the last Parliament.

While we broadly welcome the measures in the Bill, we think that they simply do not go far enough. We believe there must be far greater transparency and enforcement in relation to those who try to hide their wealth and profits in tax havens. As ever, the Chancellor and the Prime Minister give the impression of acting tough, while in reality they are proposing half-measures. Instead, as Labour have set out in our tax transparency enforcement programme, we require the introduction of a general anti-avoidance principle that proactively looks at intent and does not need the consent of the tax profession before it can be used.

Our programme includes an immediate public inquiry into the Panama papers, and more resources for HMRC. Staff numbers having been cut by 6,000 and then added to by 670, we can see that there has been a return of about 10% of those whose jobs were cut, and real concerns have been raised about the impact on tax collection as a result. We have called for a specialised enforcement unit and for greater co-operation with European partners on country-by-country reporting and protection for whistleblowers.

[John Mann]

Far be it from me to make any proposals to Labour Front Benchers, but will my hon. Friend consider some research into the impact of the Liechtenstein disclosure facility and how it has been used during the past two to three years to subvert the Government’s attempts on taxation?

[Seema Malhotra]

I thank my hon. Friend for his extremely well made comment. He is absolutely right that we should explore that area, because we want evidence about what works as we move forward urgently on the issue of gross tax avoidance and evasion. Indeed, if we want to ensure that tax avoiders and tax evaders pay their fair share of tax, the Finance Bill will need to be toughened up considerably. If the Chancellor fails to listen to our arguments, the public will want to know why.

The Bill also fails the fairness test. Resolution Foundation analysis shows that 80% of the gains from this Budget’s changes to income tax will be for the top half of the income distribution, with the top 20% of households getting the lion’s share. It estimates that, during this Parliament, households in the lower half of the income distribution will lose an average of £375 a year, while those in the top half are set to gain £235 a year. We are lucky that it can tell us that. It is a matter of shame that the Chancellor no longer produces his own full distributional analysis. This is a Chancellor who either does not want to know or does not want to tell us what impact his decisions are having. Neither competent nor compassionate—after the Budget, that is the verdict on this Chancellor.

This country faces huge economic challenges—automation, competition from nations such as India, China and other growing economies, our grossly imbalanced economy and our growing current account deficit—yet faced with these big challenges, what do we get? We get cuts to corporation tax that the Office for Budget Responsibility says will do nothing to reverse the deteriorating outlook for business investment, productivity and exports. There are cuts to capital gains tax that will benefit a tiny minority but do nothing for the millions of working people struggling simply to stay out of debt, let alone save for a home or a pension. There are clever accounting tricks aimed at reducing the Chancellor’s short-term political embarrassment that do nothing to secure our long-term public finances or economic stability. Missing was a clear vision of the future—a vision of a Britain that has a strategic partnership between Government and business, and is stronger because prosperity is shared more fairly.

We will vote against this Finance Bill because it is unfair. It is unfair on women, on low-paid workers and on children living in poverty—the number of children in poverty has increased by half a million since this Government came to power. These are people who are seeing their living standards cut to pay for the Chancellor’s tax giveaways to the better off. The Bill is unfair on the workers in our steel and manufacturing industries, who are worried now about their jobs and their families. It is unfair on all the hard-working families and responsible businesses that play by the rules and pay their fair share of tax. We will vote against the Bill because it fails the test of moving this country forward to a more prosperous and secure future for Britain’s businesses and families.

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[Roger Mullin]

Indeed. Failing to meet targets is of course one of the great characteristics of the Chancellor, but to miss it by such a huge margin creates a new category of failure—a right bourach, perhaps. Furthermore, rather than making even modest progress, we find that in the last three months of 2015, the UK had achieved a record-breaking near £33 billion current account deficit.

Part of our declining relative performance speaks to a long-term failure to address adequately the central issue of productivity in our economy. On productivity, this Finance Bill fails to address fundamental concerns. Raising levels of productivity is essential to raising growth in the economy. As my hon. Friend the Member for East Lothian pointed out on 22 March, developed countries with higher levels of growth, including Australia, Sweden, Spain and the United States, to name only some,

“experienced faster…growth than the UK in 2015, largely because they experienced faster productivity growth.”—[Official Report, 22 March 2016; Vol. 607, c. 1412.]

We need productivity growth, too, to enable the cash economy to grow, to enable wage growth and to grow tax receipts.

There are many factors, of course, that affect productivity growth. Some are well known and relatively uncontroversial —areas such as investment in research, development, innovation, and of course, infrastructure. In these areas, the UK lags well behind many of our major competitors. On a number of occasions, I have pointed to the relative decline in investment in R and D compared with our G8 competitors. As things stand, we are bottom of the G8 on R and D spend from both private and public sources, and there has been a reluctance, to put it mildly, to raise infrastructure spend to the necessary levels.

The SNP believes that in order to achieve a sustainable future, R and D expenditure and investment could benefit from a comprehensive, dramatic and territorial review, and that there should be increased planned infrastructure spend beyond the narrow confines of London and the south. As for skills, the subject has already been raised by the hon. Member for—

[John Mann]

Bassetlaw.

Finance (No. 2) Bill

Lord Mann Excerpts

Carry-over motion: House of Commons
Monday 11th April 2016 Commons Chamber

[John Mann (Bassetlaw) (Lab)]

As ever with the Finance Bill, the Public Gallery is packed to the rafters.

Unusually, the shadow Chancellor is in the Chamber during my speech, which gives me the opportunity to pass on a bit of advice. This is also an opportunity—not for the first time, the second time or the third time, but for the fourth time—for the Government to recognise the advice I have given the House and that they have accepted. It started with the pasty tax, and the Bakewell pudding and other puddings were saved when the Government listened to the advice I provided. This time, it is the £1,000 threshold for taxation on interest. I proposed that for a different reason. I did not try to pretend that it was in some way an incentive for saving, as the Government are vainly attempting to do; I suggested that it was rather sensible, because so many people every year have the irritation of trying to work out minuscule amounts of interest for their tax returns.

That idea has been accepted, and I therefore have a fifth proposal ready and waiting for the Chancellor—I am sure he is listening—to improve future Budgets. This time, the Chancellor is keen on city regions. That is one of the few things he is doing on which I am not totally in disagreement with him. The Sheffield city region is moving ahead appropriately with the support of Bassetlaw Council, among others. It would be sensible, in the near future, for the Government to devolve arts and sports funding to city regions, as I have already proposed. But to my mind, they should go a lot further.

Broadband is one of the key weaknesses in our infrastructure. I would like the delivery of broadband to be devolved to city regions during the next year, so that areas such as mine can get ahead of the game, and city regions can, as well; they will need to, because one of this Government’s great failures is that when it comes to broadband we are lagging behind too much of the world. We should be leaders, but we are not. It is false comfort that the Government give every year about progress, which is far too slow.

I was in Japan last week, and had the opportunity for a bit of a Skype using the superfast broadband available throughout that country. It gives a connectivity that we do not have in this country. It would be appropriate for broadband delivery to be devolved to the city region level. I hope that idea will be accepted by the Chancellor, because he says he is in favour of being a world leader in superfast broadband.

I will throw in a second idea, about housing delivery. City regions are having to agree targets on housing with Government. I would like to see those targets tied to a borrowing potential so that that housing can be delivered. We should allow a borrowing potential that is directly linked to the agreed housing target for city regions. Those two ideas would allow city regions such as Sheffield to develop superfast broadband ahead of many parts of the world and to get housing delivery moving.

As I have said previously—this has not been adopted yet by my own Front-Bench team, but I am sure it will be—when we talk about housing, the key demand in my area is for bungalows, and prefabricated bungalows are now coming on-stream, with the biggest producer anywhere in the country. Why bungalows? Because the Government ridiculously attempted to use the bedroom tax to force a lot of people out of large three-bedroom houses, because they were single elderly pensioners. We should offer them a cheap-to-heat modern bungalow. Many people would rent them willingly, and others would buy them. The demand would be huge. If we devolved that power away from central Government, housing delivery, which, again, is said to be a key Government priority, would be dramatically faster.

I put that idea forward optimistically, knowing that, as was the case with the community infrastructure levy, the pensions drawdown, the pasty tax and the interest on savings, my idea will be adopted. Of course it need not be attributed to me—none of the others was; the Government can take entire and total credit for it.

My advice to the Labour Front Bench and shadow Chancellor would be to hone in on this Government’s key fundamental weaknesses, and we should stick repeatedly to four key themes. The first is inequality, which has already been well articulated. The rich are getting richer, the poor are getting poorer, and the country does not like that. That is why there was such a huge reaction to the Prime Minister and the issue of offshoring. People do not like the idea that the rich are getting so much richer and the poor are getting poorer; that is not a British value. The Labour party should hone in on that, because it is about economic policy.

Secondly, the Government have a huge dilemma because they are not delivering on productivity. For the skills agenda in this country we have bandied about apprenticeships as if they are anything and everything, including 80,000 hairdressing apprenticeships that never become jobs, through to 60,000 at McDonald’s—

[Andrew Griffiths (Burton) (Con)]

What’s wrong with hairdressing?

[John Mann]

Nothing is wrong with hairdressing, but it is wrong to have 80,000 apprentices who do not go into that industry because there are no vacancies. Instead, we should be spending money in areas where we need apprenticeships, such as manufacturing, and craft or building skills. That is more complex and difficult, and so we and the Government ducked it. That is why productivity fails to grow.

The third area is home ownership. That was regarded—this is an accurate historical comment—as the thing most associated with Margaret Thatcher, and it was fundamental to winning over Labour voters who shifted for a period of time and began voting Tory, particularly in ’79 and ’83, thanks to the concept that the Tory party was the party of home ownership. That concept has been destroyed over the past six years, and we should be taking up that mantle. We are in favour of home ownership. Of course young people in my area want rented accommodation temporarily, but their vision and aspiration is to own their own home. I do not know any people who do not want that, and the Government have repeatedly made that vision harder and more distant. We should be hammering home that core Labour value.

Fourthly, this Government have repeatedly accused the previous Labour Government of mortgaging the future and loading debt on to future generations, but this Chancellor, more than any other in British peacetime history, has loaded up the national debt, with his Back Benchers happily confusing deficit and debt every time it is debated. Under him, the national debt keeps going up dramatically. This year it is up dramatically, and the projections are for it to do that for the next five years. That is a fundamental economic failure of an unprecedented level by this Government.

[Mark Garnier (Wyre Forest) (Con)]

Will the hon. Gentleman give way?

[John Mann]

I will certainly give way for confirmation of the facts from a member of the Treasury Committee.

[Mark Garnier]

I am grateful to represent Conservative Back Benchers and leap to the defence of the Chancellor. Does the hon. Gentleman agree that the rate of increase of the debt was £156 billion a year in 2010, and that the Chancellor has substantially reduced that? He cannot deny that the Chancellor has done a terrific job.

[John Mann]

So the losses are not as big as they were but they are still losses. Imagine if I had put that argument in 2009 or 2010—I do not have the references with me so I will not waste time by quoting from them, but they are in Hansard because the then shadow Chancellor and the Leader of the Opposition, and many Back Benchers, were happy to make precisely that point. That is a fundamental economic weakness, and it is putting this country at a huge, long-term economic disadvantage compared with our competitors.

My proposal about city regions and broadband was not a shopping list issue; it is fundamental to making this country economically competitive again. How can we have new growth industries in those areas when villages like mine cannot even get simple broadband most of the time and people struggle to get a mobile phone signal? This is not where the world is at any more, and this represents a fundamental economic failure for this country.

There is one more failure. I will end—this is a slightly long ending, Mr Speaker—on what I am sure all Members will agree is an incredibly important point, namely the failure of this Government to tackle tax avoidance and offshoring. We have heard a lot of the theory, but let me tell the House what the people who do the advising on tax avoidance say. They are the best source on this, rather than politicians of any party or persuasion. They are the ones competing for the business of the very people who want to minimise their taxes by offshoring because they are wealthy enough to do so.

Those tax advisers are eulogising the fact that the agreements reached with the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, the Turks and Caicos Islands and Montserrat are non-reciprocal. According to HSBC, that means that UK financial institutions will not have any reporting obligations under the terms of the agreements. That is a fundamental weakness in comparison with what the Americans have done. We are not the leaders in this; we are well behind what the United States has done to enforce transparency.

The British overseas territories that I have just mentioned rely on us for their defence. We pay for their defence, so we have proper leverage. Those territories might be anachronistic quirks of history, but if they wish to remain part of the United Kingdom, they will need to play by our rules and, if you like, speak our language. I am a strong supporter of defending those territories, be it the Falkland Islands, Bermuda or the Cayman Islands, but it is unacceptable to have non-reciprocal agreements for residents of the Caribbean tax havens. There is nothing to address that in the so-called advanced and world-leading proposals in this Government’s previous Budgets that have already been implemented, and there is nothing in this Budget or in today’s announcements that will deal with the matter.

I also want to talk about the Liechtenstein disclosure facility. What does that have to do with those territories and tax havens? I thought that it probably did not have a lot to do with them because someone would have to set up an interest in Liechtenstein in order to qualify for the disclosure facility, but then I read about where we are with financial compliance obligations. Those who advise people who want to avoid paying taxes are absolutely clear about this. Let me quote from an article on a website called taxation.co.uk:

“It may be better to come forward under the LDF now, and clients who could benefit need to be identified.”

Another article says:

“Although there are several ways to make voluntary disclosures to HMRC, the LDF continues to offer extremely beneficial terms, despite the new restrictions on eligibility, and remains one of the most direct routes of disclosing to HMRC”,

and that

“participants…will…achieve immunity from prosecution…There is no need to have held an offshore asset at all in order to access the LDF.”

The only people who cannot do so are those who have already been criminally investigated by HMRC.

There are many examples of this, and that article explained in huge detail how, for example, a self-employed person could theoretically go for a Liechtenstein disclosure facility and—this has been widely advertised across the Caribbean and in other tax havens—why people should shift to it, because for the last three years, until 5 April this year, people could minimise their tax cheaply and beneficially through early disclosure. That is what the tax experts say, what they have advised people to do and what has been going on for the last three years. When the figures finally come out, which they will, we will see the vast numbers who have used that loophole, which was deliberately set up and advertised as such.

When it comes to dealing with tax avoidance, the Government talk tough but play soft. They give the nod, officially, allowing people to circumvent the system. As long as people pay for the right lawyers in countries such as Panama, they get that advice, and because they are competing, it is one of the few things that is publicly available. My advice to the House is this: let us remove these potential and actual loopholes forever. That is why this Bill is wholly insufficient and why the Government are failing on debt and the deficit. The tax is there; people are avoiding it legally. We have a duty to turn that around—a duty to the British economy and the future innovators and entrepreneurs who are being squeezed by the recession. They are the biggest losers of all in this, because they are the ones with brilliant ideas who cannot compete with those using tax loopholes and squeezing them out.

I will end on this, Mr Speaker—[Hon. Members: “Hear, hear.”] I know that Tory Members don’t like it up ’em, but they are failing the British economy, failing innovators and failing entrepreneurs, crowding them out and allowing tax avoidance on a massive scale. They have been caught and had their fingers burnt. There is a minimising—[Interruption.] I hear advice from a sedentary position. The Government have not delivered on tax avoidance, and that is why this Bill must be opposed.

[Mr Speaker]

The last speaker in the debate before the Front Benchers—not that I am hinting at anything in any way, of course—is Mr George Kerevan.

Pilgrim Fathers (400th Anniversary)

Lord Mann Excerpts

Wednesday 9th March 2016 Commons Chamber

[John Mann (Bassetlaw) (Lab)]

As you are aware, Mr Deputy Speaker, 2020 will mark the 400th anniversary of what we generally call the Pilgrim Fathers and what the United States call the Mayflower Pilgrims, because there were, of course, mothers and daughters, as well as fathers, on that boat.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I reassure the hon. Gentleman that I am well aware of that, because Myles Standish, who was the officer in charge of the Mayflower, came from Chorley.

[John Mann]

At first glance, nonconformity and its influence on democracy are a series of extraordinary coincidences based in the beautiful setting of rural Bassetlaw, and they are all linked by geography, message and history. The modern history of our great ally and special partner, the United States of America, comes from a tiny group of men and women who, in the autumn of 1620, arrived on board the Mayflower at Cape Cod in Massachusetts. They were a group of religious and political nonconformists who risked their lives, and at times lost their liberty, in order to establish the basis and values of the society they wanted. It was a society that, through the Mayflower compact—which was the basis of that first settlement on the east coast of America—created both the foundations for the constitution of the United States and the model for parliamentary democracy.

The leaders of these pioneers were neighbours. We start in Scrooby, whose manor house under the Archbishop of York was lived in by Cardinal Wolsey in 1530 after his fall from grace, and was visited by King Henry VIII when it was a hunting lodge. Scrooby is 17 miles and 30 minutes from Epworth, 3 miles from Austerfield, 7 miles from Babworth, 14 miles from Sturton le Steeple, 9 miles from Worksop, and only 45 minutes from Lincoln cathedral and 60 minutes from York Minster.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

As the hon. Gentleman knows, the Mayflower left, ultimately, from Plymouth in order to go and found the American colonies. We are in the process of setting up an all-party parliamentary group and I very much hope that he will join me as its co-chair, and we can try to get some other people to join us, too.

[John Mann]

I thank the hon. Gentleman. Should hon. Members, following the usual rules, deign that to be appropriate, I would be honoured to join him. The Bassetlaw-Plymouth amalgam cross-party group would be a powerful way to spread the message of the values and principles of the Mayflower Pilgrims.

The key 16th-century village of Scrooby was, as it is now, on the Great North Road. This tiny village was called

“a pleasing land of drowsyhead…broad meadowlands…hummocky plots of stiff soil”

and

“a raised area served by the River Idle.”

The postmaster—an important position in such a strategic transport route—was John Brewster, and the real story of the pilgrims begins in 1587, when his son, William Brewster, returned to the place of his birth and childhood. It was at the manor house that William Brewster created the religious separatist church, the Pilgrims, and held its first sessions. Who were the neighbours in attendance? Along with William Brewster, there was John Robinson, of Sturton le Steeple. The separatist church named after him in Gainsborough was opened in 1896 by the US ambassador, the honourable T.F. Bayard. That was the last time, but I am sure it will not be the only time, that an American ambassador visited the origins of the modern United States.

[Jim Shannon (Strangford) (DUP)]

I am very interested in history, and I have come across the Pilgrim Fathers in my study of history. I congratulate the hon. Gentleman on securing the debate, and it is a real pleasure to take part. Who would have thought 400 years ago that the Pilgrim Fathers would do something that would last 400 years? Does he welcome the strong economic, physical, emotional, cultural, military, and political ties between the United States and the United Kingdom, which are also united by language?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am not quite sure that that fits in with the Pilgrim Fathers on the 400th anniversary, and I think you need to sit down. We must be careful not to extend this debate beyond where the hon. Member for Bassetlaw (John Mann) wishes to take it, and I am sure that he will not be tempted that easily.

[John Mann]

There are huge principles that unite us and our strongest ally. They come from villages such as Scrooby in Bassetlaw, and from the other partners who from across our fair and pleasant land created the Mayflower compact. They included William Bradford of Austerfield, who became the first governor of the Pilgrim colony in Massachusetts; Richard Clyfton, the rector of Babworth, in Bassetlaw, whose preaching drew in the neighbours in creating the non conformity and the ideology of individual freedom that were so powerful in the setting up of America; Henry Brewster of Sutton-cum-Lound; Richard Bernard of Epworth and later of Worksop; Gervase Neville of Worksop; John Smyth of Sturton; and Francis Cooke of Blyth. Those dissenters and champions of conscience and liberty were all from the Bassetlaw area. They left the hamlet of Scaftworth on the Idle and went down to West Stockwith on the Trent. From there, they went to Amsterdam, and from Amsterdam to Leiden in Holland, where they recreated their Scrooby and Babworth churches in 1607. Having deepened their church and their philosophy, they set sail via Southampton and Plymouth to the new world, first in the Speedwell and then on the Mayflower.

On board, the Pilgrim Fathers finalised their original philosophy into the Pilgrim compact, which contains the foundation of the US constitution. The compact states that they would establish:

“a civil body politic…to enact, constitute, and frame such just and equal laws, ordinances, acts, constitutions and offices, from time to time, as shall be thought most meet and convenient for the general good of the Colony, unto which we promise all due submission and obedience.”

John Quincy Adams, President of the United States, described the compact as

“the only instance in human history of that positive, original social compact…the only legitimate source of government. Here was a unanimous and personal assent, by all the individuals of the community, to the association by which they became a nation.”

That was a recognition of equal consent as the source of authority, and its birthplace was that tiny corner of England in Bassetlaw.

In setting up the Plymouth colony, the Pilgrim Fathers agreed a compulsory seven-year partnership between everyone who arrived, which involved a pooling of profits, an equal division of wealth and full rights for women, including widows and dependants. Most of the wives died in the first year. Only five survived beyond the first year: Mary Brewster, Elizabeth Hopkins, Eleanor Billington, Susanna White and Elizabeth Tilley. Many of the daughters survived, and they grew to be adults. Through their marriage vows, they replenished the community, to build the United States of America from that tiny group of people.

The context is vital to understanding just how significant the achievement was to the modern day. Feudalism was still the order in the United Kingdom. This was the period soon after Cromwell and the Star Chamber. It was a few years after Guy Fawkes attempted to destroy Parliament. Soon afterwards, William Tyndale, who translated the Bible, was burnt at the stake as a heretic, at Vilvoorde near Brussels.

These dissenters, democrats and visionaries advanced not just religious freedom, but human emancipation. Their story needs expounding, because the ripples of their influence continued beyond their settlement in the United States. In 1703, when John Wesley and his family lived in Epworth, where one of the Pilgrims came from, the influence of the Pilgrims helped to formulate his religious vision and views. He shared the same ethos, and drank from the same well of wisdom.

In 1740, another Bassetlaw pioneer, John Cartwright—his family coat of arms happens to adorn my current property in Bassetlaw—wrote “The English Constitution”, which for the first time stated the principles of universal suffrage, the secret ballot and equal electoral districts. That became the template for the Chartists, and provided the basis of and the detail for the Great Reform Act of 1832. As Thomas Jefferson said, his work must be held in “high veneration and esteem”. It was in East Retford in Bassetlaw that Cartwright witnessed the original rotten borough. There were 200 voters for the two seats, which were sold at 20 guineas a vote or 40 guineas per voter, until the Great Reform Act, which came from the principles established by the Pilgrims. It is hardly a surprise that Cartwright’s last act was to build a mill in Retford that he called Revolution Mill.

The year 2020 provides a historic opportunity—in Leiden, Southampton, Plymouth, Massachusetts and of course Bassetlaw, as well as elsewhere—to reinvigorate the Pilgrim compact in relation to our shared values and, through Parliament, our democracy. In Bassetlaw, the Churches, acting together, have begun our local preparations with their Illuminate 400 project. We welcome the offer of financial support that the Chancellor of the Exchequer has already made, and we look forward to that support being specified in detail in the near future. We foresee a celebration of sound and light to illuminate the Pilgrims’ stories, and their churches and locations.

We will recreate the experience of the world’s first international tourism a century and quarter after Americans—they travelled on cruise liners—came to Bassetlaw as the first mass tourists. We will welcome the Pilgrims’ descendants, whether they are famous ones such as the Rockefellers, Clint Eastwood and Richard Gere, who are all direct descendants of the Bassetlaw Pilgrims, or less famous ones. Each and every one will be equally welcome, as indeed will you, Mr Deputy Speaker, and Mr Speaker, to participate in the historic celebrations.

Let this Parliament recognise the importance of the Pilgrims and welcome these celebrations. Their courage, their organisation and their political philosophy of freedom—the rights of the individual, and the responsibility to one another—formed the bedrock of the US constitution. It did more than that, however, because it provided the ethical vision for Wesley and the democratic template for John Cartwright, with the spreading of religious tolerance and freedom, and the emancipating of feudal society to become a representative and participatory parliamentary democracy. Our shared history with the United States of America, our joint purpose today, our unwavering commitment to parliamentary democracy in the United States and the United Kingdom and our resolve to protect it across the world, which we have bequeathed to the world, are what the Pilgrims gave us.

--- Later in debate ---

[Mr Evennett]

I am grateful to my hon. Friend for enlightening us on that matter.

It is only right that all parts of the United Kingdom that were involved in that momentous occasion can profit from the renewed interest that the citizens of the USA will have in visiting the UK as part of the 400th anniversary commemorations in 2020. This matters not just for the constituencies involved, but for tourism and the economic benefits brought by those tourists from America and other parts of the world, because we have a great story to tell. American tourists spent nearly £3 billion in this country in 2014.

The Plymouth area has received financial support from the Government, with £35,000 announced to upgrade facilities at the Mayflower museum. However, I would like to allay any fears that the people of Bassetlaw might have that all Mayflower-related financial support is going to Plymouth and will not be distributed across the country: £500,000 worth of support was announced in the autumn statement 2015 by my right hon. Friend the Chancellor, as we heard, for Mayflower-related celebrations across the country. VisitEngland is in the process of allocating that sum and will involve in its work a number of areas across the nation, not just the city of Plymouth.

[John Mann]

I am delighted that in response to a question on the record from me to the Chancellor, he confirmed that additional money will be made available on top of that £500,000.

[Mr Evennett]

I am grateful to the Chancellor for the support he is giving.

Other support might be available as well. To date, the Heritage Lottery Fund has not given any Mayflower-specific grants, although I understand that it is in discussions with other organisations across the UK, including in Bassetlaw, regarding possible bids.

I congratulate Plymouth on the proactive approach it has taken to deepen the cultural, educational and tourism links with large US target audiences, because all those aspects are vitally important. I congratulate Bassetlaw and other areas of England on getting together with Plymouth and other areas to discuss how they can all get involved in this historic event and make the most of this opportunity to encourage tourists to discover their areas. I understand that Bassetlaw Council, as a member of the Mayflower 400 organisation, is currently in discussions with the Heritage Lottery Fund about a bid for funding to support a planned series of events for the 400th anniversary celebrations. The result of that bid has yet to be decided, but I wish Mayflower 400 every success in its efforts.

That is exactly the type of collaboration, spreading the economic and cultural benefits of tourism right across the country, that this Government are seeking to encourage through our five-point plan for tourism. On that point, I welcome the fact that the hon. Member for Strangford (Jim Shannon) is in his place this evening. We all want to see as many visitors as possible coming to the UK and getting out and about across our fantastic country to see our heritage, because it is not just in London but across the country. The hon. Member for Bassetlaw made some powerful points about the people, the times they lived in, the effect they had on this country and their contribution to the creation of the United States of America.

--- Later in debate ---

[Mr Evennett]

I am pleased to note the hon. Gentleman’s positive points. We want to ensure that the whole of the United Kingdom of Great Britain and Northern Ireland has more tourists and more opportunities to show what fantastic places we have across our nations.

Our second priority has been jobs and skills. We want to boost apprenticeships in tourism and to promote it as a career choice for the brightest and the best. Tourism is a growth area and it is exciting for people to get involved and have a career in it.

Thirdly, we realise that regulation is an issue for small business. We are looking at what we can do to ensure that regulation and how it is enforced is both proportionate and common sense.

A moment ago, my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) mentioned transport. We need good transport, high-calibre locations, and great hotels and hospitality, but we need a joined-up approach. When visitors want to discover England, it is right that the transport offer is easy and straightforward to access—when they get off the train, ideally there will be a bus to take them to their final destination. I am working with colleagues in the transport and tourism industry to explore what more can be done, but it is important that we have a joined-up approach to ensure that people coming from America or wherever else around the world have not only a good experience—a high-calibre experience of history, culture, heritage and tradition—but good facilities and hotels. We do pretty well in this country, but we can always do better. That is what we are looking at most passionately.

We want to ensure that all visitors receive a great welcome. That means we must drive improvements in our visa service and ensure that tourists to the UK are greeted warmly when they arrive. Most recently, we have had negotiations on two-year visas for people coming from China, which would make a lot of difference—they want to visit on several occasions but do not want to apply for a visa every six months. My hon. Friends in the Home Office are dealing with that, and we have had considerable success.

We want people to go home with great memories and experiences, highlighting the best of Britain. We want them to go home and tell other people what has been achieved, and that Britain is not only open for business, but a top-level tourist attraction across our nations.

We want to ensure that our history is celebrated. That is why it is so important that we celebrate the 400th anniversary of that fantastic experience, so that we can learn about it, and so that our young people in schools and colleges know about it. We should talk about it and promote it. I am passionate that this has been a great opportunity this evening to highlight that and put it on the record. We have a little time to prepare, which is important. What I have heard from the hon. Member for Bassetlaw is encouraging and we want to do anything we can to assist. It is very important that we understand such a historic milestone. I have learned so much from what he has told us about his constituency, its people and what life was like at that time. We need to ensure that that is transmitted to the Americans, particularly so that they come back over here and see what life is all about.

I look forward to working with the hon. Gentleman to encourage as many tourists as possible to the Bassetlaw area during the coming years. The anniversary represents a great opportunity to commemorate an important historical event, which changed lives. As he highlighted, it was the opportunity to be the basis of what became the United States of America. We have learned a lot this evening about the history of Bassetlaw and the people involved.

[John Mann]

Before the Minister finishes his speech, I cordially invite him to Bassetlaw. I offer a personal guided tour of the site. He will have the opportunity to stay in the historic Sherwood forest. Of course, the majority of the Sherwood forest that still exists is in Bassetlaw. That is surely an offer that no tourism Minister could ever refuse.

[Mr Evennett]

I will certainly take that kind invitation on board. I will put it forward and have a look at the diary to see whether it is possible.

Bank of England and Financial Services Bill [ Lords ] (Fifth sitting)

Lord Mann Excerpts

Tuesday 23rd February 2016 Public Bill Committees

[Harriett Baldwin]

The website is well used. The feedback on face-to-face interactions has also been positive.

[John Mann (Bassetlaw) (Lab)]

Is not the clause a huge wasted opportunity? I can confidently predict that this will be the next major mis-selling scandal, which in five to 10 years’ time will come to haunt us for failing properly to enact effective legislation. People will have thrown away their pensions, mis-sold to them by the industry for short-term gain. The advice, people have told me, is that they are liable to die so they had better get the money quickly in order to spend it before it disappears. That is the kind of mis-selling that is going on. The clause is a huge missed opportunity, is it not?

[Harriett Baldwin]

I sense that the hon. Gentleman does not welcome the freedoms that the Government are proud to have given British retirees. We no longer require them—this was the case for so long—to purchase an obligatory product that might not be right for them at the time. Indeed, the evidence suggests that two thirds of people were not shopping around to get the right price, so I accept that awareness and education are an important part of the reforms. I cannot agree with him that the reforms have not made a huge step forward in trusting people who have worked hard all their lives, saving their money, and they now have more freedom to do what they want with it.

[Harriett Baldwin]

Again, I could not agree more that we need to take a long, hard look at the provision of advice in this country. As the hon. Gentleman is aware, the financial advice market review was launched last summer and the consultation closed at the end of December. A large range of people have been supportive of the aspirations set out in the review to make advice more widely available and more affordable for all our constituents. It is an ongoing piece of work, and he should wait for more exciting announcements—[Interruption.] He and I share excitement about many things, including the leptokurtic distributions that came up the last time we were on a Committee together. Clause 27 is narrowly focused on extending the Pension Wise service to those who are going to be accessing the additional freedoms that will come into force next April in relation to the secondary market in annuities.

People have rightly asked me about scams, and I want to put it on the record that there is absolutely no complacency about the potential for scams. However, the numbers thus far do not support the case that there has been an increase. Some people have a constant desire to take advantage of people, particularly the vulnerable elderly, in many ways. Nobody should ever accept a telephone call about pensions from anybody unless they have a pre-booked appointment for such a discussion. The single most important thing that we can do to alert people to the horrendous activities of people who prey on the elderly is to get that message out in our constituencies. The over-65s are the victims of some 80% of all attempts at financial crime. They are less familiar with the technology and more vulnerable when someone sounds plausible on the telephone. If any Member wants to work with me to spread the message more widely in their constituencies, I will be wholeheartedly in favour.

[John Mann]

Will the Minister give way?

[Harriett Baldwin]

I will give way in a moment, but I first want to mention the National Crime Agency’s Project Bloom, a taskforce that includes the regulators, anti-fraud groups, Action Fraud and police forces. The FCA also runs ScamSmart and the Pensions Regulator has its Scorpion campaign, both of which give advice to businesses and consumers in writing about how to protect against scams. Action Fraud is the UK’s national reporting centre for fraud and internet crime. I am keen to work with hon. Members to see how we can get information disseminated widely in our areas.

[John Mann]

I thank the Minister for the offer to help her get the word out. We may be occupied with other things over the next four months, but, even beyond then, is it not Parliament’s role to legislate for regulation? Anyone who is a conduit to information or puts out information should be effectively regulated. Instead of hoping that the word will somehow get out, the Minister should be introducing legislative changes in regulation to improve the system. A gentleman came to see me and said that he had less than a year to live and wanted to get hold of his pension. He came back a year later, having survived through the NHS, and was doubtless reassured that he did not need to fritter his pension away, hoping to spend it on trips around the world because he was about to die. We do not need to get the word out; we need regulation. Will the Minister come back with additional proposals?

[Harriett Baldwin]

Clearly, it is regrettable that although we often pass regulations in this House—this is a very regulated area—people still choose to prey on the vulnerable, particularly older people, and do things that are illegal and completely against the regulations. We ought to combine regulation with informing people about the regulations and when they should have their antennae twigged to the fact that something might not be a good idea.

The hon. Member for Wolverhampton South West raised a range of important points about auto-enrolment, the reports in The Times today and master trusts. I can let him into a little secret on that: the Government will bring in legislation on master trusts and on the points he raised as soon as practically possible. We had considered bringing it in as part of this piece of legislation, but we felt that since the Bill had gone through the House of Lords it would be very late on in the legislative process to introduce something as extensive as that. That was my judgment, and I hope that he will support me on that. However, we aspire to find very soon the first appropriate vehicle that could be scrutinised by both Chambers to bring in the regulations relating to master trusts and auto-enrolment.

--- Later in debate ---

[John Mann]

What a palaver, when we have Governments bringing in Bills via a group of entirely appointed peers—or, in 92 cases, birth-designated peers—and then having to amend the legislation precisely because it has been brought in by a group of unelected people. Parliament should initiate all legislation through the House of Commons. All Governments, whatever their colour or persuasion, and whatever crisis they may be in at any time, should use the House of Commons, the elected Chamber, when bringing forward legislation.

There is only one other place in the world where this happens, and that is China. All other countries that have second Chambers, or part-appointed second Chambers, do not allow legislation to be formulated through them. Even the states of the former Soviet Union, now disintegrated into 16 countries, which have, and love to have, this patronage power that we retain, do not allow their second Chambers to initiate legislation. So this country—and now this Government—and China are the only two places where that happens.

It seems absurd that in the place where democracy is centred, which is dear to all our hearts at the current time, and therefore very important—and this is getting to the fore of the public’s attention—Governments are initiating legislation through the House of Lords. I suggest that they should not do so. The absurdity of having to amend legislation because they have done so would then no longer be needed. Let us therefore hope that this is the last time that such an absurd position is reached in Parliament.

Amendment 7 agreed to.

Clause 38, as amended, ordered to stand part of the Bill.

[The Chair]

We now come to new clauses, some of which have already been debated in our proceedings, but new clause 1 has not.

New Clause 1

Illegal money lending

(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) After Part 20A insert—

“Part 20B

Illegal Money Lending

333S Financial assistance for action against illegal money lending

(1) The Treasury may make grants or loans, or give any other form of financial assistance, to any person for the purpose of taking action against illegal money lending.

(2) Taking action against illegal money lending includes—

(a) investigating illegal money lending and offences connected with illegal money lending;

(b) prosecuting, or taking other enforcement action in respect of, illegal money lending and offences connected with illegal money lending;

(c) providing education, information and advice about illegal money lending, and providing support to victims of illegal money lending;

(d) undertaking or commissioning research into the effectiveness of activities of the kind described in paragraphs (a) to (c);

(e) providing advice, assistance and support (including financial support) to, and oversight of, persons engaged in activities of the kind described in paragraphs (a) to (c).

(3) A grant, loan or other form of financial assistance under subsection (1) may be made or given on such terms as the Treasury consider appropriate.

(4) ‘Illegal money lending’ means carrying on a regulated activity within Article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (regulated credit agreements) in circumstances which constitute an authorisation offence.

333T Funding of action against illegal money lending

(1) The Treasury must, from time to time, notify the FCA of the amount of the Treasury’s illegal money lending costs.

(2) The FCA must make rules requiring authorised persons, or any specified class of authorised person, to pay to the FCA specified amounts, or amounts calculated in a specified way, with a view to recovering the amount notified under subsection (1).

(3) The amounts to be paid under the rules may include a component to recover the expenses of the FCA in collecting the payments (‘collection costs’).

(4) Before the FCA publishes a draft of the rules it must consult the Treasury.

(5) The rules may be made only with the consent of the Treasury.

(6) The Treasury may notify the FCA of matters that they will take into account when deciding whether or not to give consent for the purposes of subsection (5).

(7) The FCA must have regard to any matters notified under subsection (6) before publishing a draft of rules to be made under this section.

(8) The FCA must pay to the Treasury the amounts that it receives under rules made under this section apart from amounts in respect of its collection costs (which it may keep).

(9) The Treasury must pay into the Consolidated Fund the amounts received by them under subsection (8).

(10) In this section the ‘Treasury’s illegal money lending costs’ means the expenses incurred, or expected to be incurred, by the Treasury—

(a) in connection with providing grants, loans, or other financial assistance to any person (under section 333S or otherwise) for the purpose of taking action against illegal money lending;

(b) in undertaking or commissioning research relating to taking action against illegal money lending.

(11) The Treasury may by regulations amend the definition of the ‘Treasury’s illegal money lending costs’.

(12) In this section ‘illegal money lending’ and ‘taking action against illegal money lending’ have the same meaning as in section 333S.”

(3) In section 138F (notification of rules), for “or 333R” substitute “, 333R or 333T”.

(4) In section 138I (consultation by FCA)—

(a) in subsection (6), after paragraph (cb) insert—

“(cc) section 333T;”;

(b) in subsection (10)(a), for “or 333R” substitute “, 333R or 333T”.

(5) In section 429(2) (regulations subject to affirmative procedure), for “or 333R”

substitute “, 333R or 333T”.

(6) In paragraph 23 of Schedule 1ZA (FCA fees rules)—

(a) in sub-paragraph (1) for “and 333R” substitute “, 333R and 333T”;

(b) in sub-paragraph (2ZA)(b) for “section 333R” substitute “sections 333R and 333T”.—(Harriett Baldwin.)

This new clause gives the Treasury power to make grants and loans, and provide other financial assistance, for the purpose of taking action against illegal money lending. It provides for certain Treasury costs relating to illegal money lending to be recovered from authorised persons by a new levy, administered by the FCA.

Brought up, and read the First time.

[Harriett Baldwin]

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

The new clause gives the Treasury a power to provide financial assistance to bodies for the purpose of taking action against illegal money lending. It also gives the Financial Conduct Authority an obligation to raise a levy, which will apply to consumer credit firms, in order to fund that assistance. Illegal moneylenders prey on some of the most vulnerable people in society. The new clause will ensure that the perimeter of the consumer credit market continues to be enforced effectively, and that vulnerable consumers remain protected from loan sharks.

The Government have fundamentally reformed consumer credit regulation, transferring the responsibility from the Office of Fair Trading to the Financial Conduct Authority, and we have ensured that the FCA has a wide enforcement toolkit to take action where its rules are breached. The FCA regime is already having a substantial positive impact, which is helping to deliver the Government’s vision for an effective and sustainable consumer credit market that meets consumer needs. However, the FCA is not best placed to investigate and enforce certain types of illegal money lending such as the type practised by loan sharks.

Loan sharks are currently investigated and prosecuted by the England and Wales illegal money lending teams and the Scottish Illegal Money Lending Unit. Those teams are made up of local trading standards officers who accordingly have broader powers than the FCA to prosecute the particular criminality that loan sharks are involved with, and relevant expertise in educating vulnerable consumers. They are also able to draw on geographically dispersed community intelligence officers who are crucial in identifying localised illegal lenders. The teams work alongside the FCA in policing the regulatory perimeter specifically to target loan sharks and to provide support and advice to the victims of illegal moneylenders. They also help educate local communities about the dangers of borrowing money from loan sharks.

The teams have been identified as the most efficient and effective way of combating loan sharks and they have a proven track record. The England and Wales teams have secured hundreds of prosecutions for illegal money lending and related activity and have written off £55 million-worth of illegal debt, helping nearly 24,000 people in the process.

Funding will be provided by the Treasury via a levy on consumer credit firms, which will be collected by the FCA. The Government believe that all participants in the consumer credit market benefit from the teams’ work and the credibility that comes from keeping illegal moneylenders out of the market. The current cost of the enforcement regime is about £4.7 million a year, so the cost to individual firms in the £200 billion consumer credit market is anticipated to be small. The FCA will consult on how the levy will be collected in its annual fees consultation.

The Government want a safe and fair regulatory framework for consumer credit that protects consumers from harm. As part of that, it is important that the market’s boundary is adequately policed. The illegal money lending teams provide crucial support to the FCA’s work in effective enforcement in the regulatory perimeter, which boosts confidence in the market. The new clause will ensure that funding for the enforcement of rules against illegal money lending is given a sustainable framework for the future and that the illegal money lending teams will continue to receive the funding they need to do their work. I hope that all hon. Members will support this move

[John Mann]

This is a most excellent new clause, which I hope my hon. Friend the Member for Leeds East and I will be able to use against those who may be doing illegal money lending in sports in the Leeds area. It prompts an interesting question, because the powers on claims handlers—the other side of consumer protection—are not vested in the Treasury. We would not expect them to be. They are vested in the Ministry of Justice, but here we see a power grab by the Treasury. We have the Chancellor versus the Justice Secretary, with the two battling for power. I appreciate that that may cause some concern and divided loyalty. It is essential, in supporting this new clause, that I give my wholehearted support to the Chancellor in his power grab. The Treasury, not the Ministry of Justice, is the best place for powers such as this to be vested in.

Should the Bill become law, I hope that the Minister will go back to the Treasury team and look at other powers that have been grabbed by the Ministry of Justice under previous Governments and used appallingly badly in protecting the people, from my experience—the coalminers’ compensation claim scandal being the prime, but certainly not the only, example. Let us have the Treasury take on those who fleece our constituents out of money, with the full might of the Chancellor, strongly supported by his party’s Back Benches—he is even more strongly supported on some matters these days by the Labour Benches. On this occasion, he has my entire endorsement in his battle against the Justice Secretary.

[Rob Marris]

What a pleasure it is to follow my hon. Friend. It is an historic moment when he is fully backing the Chancellor of the Exchequer.

My hon. Friend talks about power grabs, but I must say that I do not think it is just the Ministry of Justice involved in this area; it is the Department for Communities and Local Government and the Department for Business, Innovation and Skills as well, with which this overlaps. The fact that this is a cross-cutting area is perhaps another reason why it would be logical for the Treasury to have these powers.

Labour Members welcome the stability of funding. I am grateful to John Ludlow, who works in the office of my hon. Friend the Member for Makerfield (Yvonne Fovargue), for giving me some background information, of which I was not fully aware, on the lack of stable funding for the inelegantly named illegal money lending teams. There is one such team based just down the road from me in Birmingham. They work in England and Wales and have a relationship with trading standards, as has been mentioned—hence my reference to the DCLG. I understand that since 2004, when the teams were established, more than 26,000 victims of illegal money lending have been helped, with £62 million of illegal debt written off and 300 loan sharks prosecuted.

I say indirectly to the Ministry of Justice and to the Chancellor of the Exchequer that some of this stuff is rather simpler than is made out, in terms of the relationship with trading standards. Under section 21 of the Theft Act 1968, blackmail is a common-law criminal offence when someone makes “unwarranted demand” for money “with menaces”. The Minister quite properly referred to illegal moneylenders as loan sharks; that is the vernacular, which we all understand. As a description, “loan shark” highlights rather better what almost always goes on: behind illegal money lending is a pattern of people saying, “If you don’t pay up, you’ll suffer a physical injury.” Those are the menaces.

The 1968 Act is an elegantly worded piece of legislation. Section 16 of that Act, which is sadly now gone, is on obtaining pecuniary advantage by deception. Section 1 of the Act, which still obtains, has a wonderful definition of theft. It was a great piece of legislation in terms of its wording. New clause 1 is not quite so elegant. It refers in proposed new section 333T(1) to

“the amount of the Treasury’s illegal money lending costs.”

That is a bit inelegant, because what it means is the amount of the Treasury’s anti-illegal money lending costs. The Treasury has costs associated with illegal money lending, but I hope it does not have any illegal money lending costs. The new clause is inelegantly worded but, to be fair, we know what it means and we have had a helpful explanation from the Minister.

--- Later in debate ---

I spend a lot of time reading this stuff, and I may have misread new clause 7, but on the face of it those two things—the penalty for moving and the actuarial reduction for taking the pension early—are conflated, because it mentions “charges”, “expected retirement date” and so on. Will the Minister unbundle those two in the new clause? I think that most if not all hon. Members would agree with the principle that penalising people for moving beyond a certain level of administrative costs is just not on, and 10% has got to be way more than the administrative costs, unless the pot is tiny. Absolutely, agreed, those penalties can in some cases be too high, so legislation is good. For legislation to stick its nose into actuarial reduction, however, is a bit different and a bit difficult.

[John Mann]

May I disagree with my Front-Bench colleagues on their analysis? I have exactly the same question, but I am anticipating that this is a listening Chancellor—not least to the very point I made to him in the Treasury Committee three years ago, which he rebuffed in his stylistic way in giving a non-answer. I am seeking to clarify whether he is the listening Chancellor and that this is a bit of a roll, so that I can back him again, because he has listened to me on the issue, which I raised in some detail, including in correspondence and in other questions. At the time I did not get a sufficiently satisfactory response. This could be a significant moment. I am hoping that the Minister will clarify that the power being given to the FCA will be all-encompassing and include all ways of ripping off our pensioners, including the couple from Clayworth in Bassetlaw who first raised the issue with me some three and a half years ago.

[Harriett Baldwin]

I want to put on record that of course the Chancellor is a listening Chancellor. I am delighted that some of that listening includes listening to the hon. Gentleman, whose views on pasties I remember the Chancellor also listened to at one time. I see why his Whips put him on the Committee—because of his extensive and deep knowledge of so many of these things.

Let us face it, the topic of pensions can cause people’s eyes to glaze over—not of course those of hon. Members in Committee, but potentially those of people avidly reading the record in Hansard—so I want to clarify that the pension freedoms apply to defined contribution schemes. Those regulated by the FCA are covered by the new clause. The hon. Member for Wolverhampton South West asked about actuarial reductions, but schemes such as those that most Members of Parliament are members of are in the defined benefit section of the market. That is presumably why he has not found the language clear enough; the new clause does not apply to defined benefit schemes. In cases where actuarial reductions might be applied unfairly, we think it is important for the FCA to be given flexibility in the new clause.

The hon. Gentleman asked about the level of the cap. It is important to emphasise how well and constructively the industry has been working with the new pension freedoms to enable hundreds of thousands of people to take advantage of the freedoms. It is worth citing how excellent, innovative and adaptive many firms have been with the new freedoms, which came in with a degree of rapidity. However, there were some cases—I cited the example of a 10% cap—where charges were clearly egregious. The FCA will do further work in this area, in terms of its cost-benefit analysis process, but there have been efforts to collect evidence of the scale of the charges. In the vast majority of cases—I think that I am right in saying, off the top of my head, more than 90%—the charges have been under 2%. The industry, by and large, has worked very well with the reforms; I do not want people to get the impression that it has not. However, we think that where there are unreasonable barriers, in terms of charges that we would all regard as outrageous, the FCA is right to have these powers.

There will be cases in which, when someone removes their pension, the provider is right to apply a market value reduction, to readjust the value of the fund properly to reflect the performance of the market. Not all funds mark to market on a daily basis. We would not regard that as an early exit charge. It is right that market value reductions are specifically excluded from the new clause.

I hope that by answering all those questions, I have satisfied the Committee that this is another excellent clause from a listening Chancellor, and I commend it to the Committee.

Question put and agreed to.

New clause 7 accordingly read a Second time, and added to the Bill.

New Clause 3

Nomination of the Chief Executive Officer of the Prudential Regulation Authority: parliamentary oversight

“The Chancellor of the Exchequer shall not nominate a person as Chief Executive Officer of the Prudential Regulation Authority without the consent of the Treasury Committee of the House of Commons.”—(George Kerevan.)

Brought up, and read the First time.