Bank Accounts

Lord Swire Excerpts

Wednesday 19th July 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, that is why it is important to distinguish between the PEP regime, which has caused problems for people, and questions about banks’ actions in relation to freedom of speech or political views. It is important, though, in both circumstances, whether you are a PEP or you have expressed any view that is lawfully held, that you have access to bank accounts. In taking forward our work on PEPs in particular, we are mindful of always maintaining our commitment to international standards in this area, and our amendments to the Financial Services and Markets Act do just that.

[Lord Swire (Con)]

Has my noble friend had any discussions with her colleagues in the Foreign, Commonwealth and Development Office about the fact that some overseas missions find it impossible to open bank accounts in the UK? This happens the entire time, and it seems rather invidious to ask these people to come here to open embassies and then say they cannot bank when they are here.

VAT: Building Repairs and Maintenance

Lord Swire Excerpts

Wednesday 19th April 2023 Lords Chamber

Asked by

[Lord Swire]

To ask His Majesty’s Government what assessment they have made of the case for applying the same rate of VAT to building repairs and maintenance as to the construction of new homes.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

The Government maintain a zero rate of VAT on new-build residential or qualifying buildings to incentivise the construction of new homes and increase the housing supply. The Government do not have plans to introduce a new VAT relief for building repairs and maintenance. Introducing a new relief for repairs and maintenance would have a significant fiscal cost, which would lead to associated spending, borrowing or tax decisions taken elsewhere.

[Lord Swire (Con)]

I am most grateful to my noble friend, but she will have to concede that new building emits 48 megatonnes of carbon dioxide in the UK each year—equal to the total emissions for the whole of Scotland, and that is before you get to the emissions coming out of the SNP headquarters as we speak. Conversely, if we are serious about addressing climate change, we should look at refitting and restoring existing housing stock. Now that we are outside the EU, I simply cannot understand why we cannot have one level of VAT, or even a 5% level, both for new housing and for refurbishing and restoring old stock.

[Baroness Penn (Con)]

My noble friend raises an important point. He is right that the renovation of existing properties can be an energy-efficient way to bring them back on to the market. There are special reduced rates of VAT for the renovation of properties that are converted either from commercial to residential use or from one residential use to another, if they are renovated after a period of two years without use. A temporary zero rate of VAT applies to installations of qualifying energy-saving materials, such as insulation, to address some of the points my noble friend raised.

Defence Spending

Lord Swire Excerpts

Thursday 16th March 2023 Lords Chamber

[Baroness Penn (Con)]

I think the Secretary of State for Defence has been very positive about the money announced at the Budget and previously, and this Government have overseen the largest investment in defence since the Cold War. The British Armed Forces remain among the best in the world; that is why we are a leading NATO partner. Over the last 10 years, the UK has been NATO’s second largest defence spender, after the US, and we spent almost as much on defence as 20 other NATO members combined. Future Soldier, the Army’s response to the integrated review, will deliver the largest transformation of the British Army in more than 20 years. As the threat changes, we need to change with it, and we have set out a plan to do so.

[Lord Swire (Con)]

I very much welcome the Prime Minister’s recent announcement about the replacement and refurbishment of the nuclear submarine fleet. Can my noble friend say from which budget that money is coming and, critically, can she confirm that the other political parties have signed up to this, given the long-term impact and programme that it will require?

[Baroness Penn (Con)]

I will let the other parties speak for themselves, but this is a long-term commitment to investment in our own security. The money we are investing in the defence nuclear enterprise is additional funding; it is not coming from any existing contingency, and I am happy to confirm that to the House.

Privileges

Lord Swire Excerpts

Tuesday 2nd April 2019 Commons Chamber

[Damian Collins]

We had a similar issue with other witnesses during the inquiry. When Arron Banks gave evidence to the Committee, some aspects of Leave.EU’s work that were relevant to the Committee investigation were under investigation by the Electoral Commission at that time. My hon. Friend may check the official record of the evidence session. We told Mr Banks at that session that we would not question him about matters that were under investigation by the Electoral Commission, as it would not be proper to do so, but there were a large number of other topics on which we wanted to pursue relevant lines of inquiry.

It was exactly the same with Dominic Cummings. We could have reached an accommodation, but he was not prepared, in principle, to attend. During the course of our correspondence we set out why we thought he should attend, and it became quite clear that once he was aware that we were determined to issue an order requesting that he appear on a certain day, he would refuse point-blank to appear at all. He then requested all sorts of other conditions—that he would not appear before the DCMS Committee but he might appear before a specially constructed ad hoc Committee of the House, and that members of the Committee should swear an oath before questioning him, in addition to his swearing an oath. This is nonsense. We either respect our rules and the powers that we have, or we do not.

Not just my Committee found this. I am sure that the Chair of the Privileges Committee will speak for herself about her inquiry. During the Treasury Committee’s inquiry before the referendum, different parties were invited to give evidence, and it too is scathing about the experience of dealing with Mr Cummings and the general contempt that he showed. We have to accept that if we do not really take our own powers seriously, other people will behave in a similar way. Other people will look at this case and say, “Actually, you can just ignore the Committees’ requests. There is nothing they can do.”

There are often important reasons why Committees wish to call in private citizens to account for their work. Mr Cummings is not just a private citizen going about his business in a quiet part of the country. He has held a series of important offices, he is a former Government special adviser and he was director of an incredibly important national political campaign. The work of that campaign had been referenced already in a parliamentary inquiry, and we wished to ask him about the evidence that had been given, of which he himself was critical and to which he felt there should have been some right to reply.

[Sir Hugo Swire (East Devon) (Con)]

Over the past few years, the likes of Rupert Murdoch have appeared before Committees, and we have seen Sir Philip Green appearing—not wholly successfully—before Committees. Surely, if people of that stature are prepared to face a Committee, others of lesser stature should do so too.

[Damian Collins]

That is absolutely right. I was a member of the Committee when Rupert Murdoch came to give evidence, in response to a summons of the House. That was right in the middle of the phone-hacking scandal, with legal cases left, right and centre—massive challenges for that business—and yet he considered that it was his responsibility and the proper thing to respond, give evidence in person and answer all the Committee’s questions. If it is good enough for someone of the stature of Rupert Murdoch, surely Dominic Cummings could find time in his busy schedule as well. There was no reason why he should not have done so.

There have been other times when my Committee has struggled to get witnesses to attend and they have attended at the last minute. We are going through that process now with some companies. We may wish to call other organisations as well. We saw during our inquiry that other political campaigns, such as the shadowy Mainstream Network, which was advertising last year on Facebook, were seeking to get members of the public to lobby their MP on what they should or should not do on the Brexit withdrawal agreement. Other organisations, such as We are the 52% and Britain’s Future, are doing that right now. We might want to call in such organisations in future as part of investigations, but they could look at the behaviour of Dominic Cummings and say, “We are disinclined to come, and there is not much you can do about it.”

People often cite the ancient powers of the House to lock people up in a prison under Big Ben or in the House, and those powers technically still exist, but they would rightly be considered to be unenforceable. The House must therefore debate and decide what we want to do when witnesses decline to attend. There should be a proper process; it should not just be down to the arbitrary summons of 11 Members of Parliament. There should be a proper process to check—as the Privileges Committee has done—that the Committee was following due process, that it had good grounds, and that there was a public interest in the witness attending. Then, when they fail to attend, there should be some clear sanction. In other Parliaments in the world, there are rules in such cases—a referral to court or some other body that makes the final decision and imposes a sanction. I believe we now need clearly codified rules, on both summoning witnesses and ordering papers.

--- Later in debate ---

[Damian Collins]

Well, it sort of depends on what Mr Cummings thought he was going to say and whether he thought he was likely to be in that position. As I have said, the Committee wished to discuss a range of issues and topics with him that were not at the time being expressly investigated by the Electoral Commission. Its investigation was largely to do with funding issues and the co-ordination between Vote Leave and other campaigns involved in the referendum. We had lots of questions about Vote Leave’s work with AggregateIQ and about its involvement in data analytics and the way data was being gathered, stored and used during the campaign that were highly relevant to our inquiry. He could have come in to discuss those issues. If there were no grounds for him not to appear, and he just did not want to appear, I do not believe that the House should accept that as an excuse.

[Sir Hugo Swire]

Does my hon. Friend concede that there would be a difference if the gentleman in question had not wished to appear on account of prejudicing an ongoing inquiry with which he was associated, as against his not recognising the legitimacy of Parliament to summon him to appear? I suspect that in this case the latter applied, not the former, and that there might be a difference.

[Damian Collins]

There is a difference. I do not believe that Mr Cummings ever accepted the legitimacy of Parliament to ask him to appear, which is a matter that we should take seriously in its own right. From the very start, it seemed clear that he thought he should give evidence on his own terms, in his own way, on his own dates—

[Sir Hugo Swire]

And to his own Committee.

[Damian Collins]

And even to his own Committee, yes. He thought it was no business of ours to set parameters for the special ad hoc Committee of the House that should be assembled just to question Dominic Cummings. That is a ridiculous way for someone to behave when they have been asked to give evidence. If he had said at the beginning that he was willing to give evidence even though he did not want to discuss certain topics because of other investigations he was associated with, and that he would discuss other things, that would have been a very different matter. The Committee of Privileges might have taken a different view if that had been the case. It is interesting that he declined to give evidence to that investigation as well, even though it took place sometime after the event. This just shows his general contempt for the House and its practices. He feels that we have no business asking difficult questions or prying into his affairs, but I believe that that is our business and that we have a right to do that.

It is rare for the House to issue a summons—most witnesses come willingly—but when we legitimately seek to summon witnesses to give evidence to our inquiries, we should have that power, and when someone refuses and shows contempt for us, there should be a sanction and we should have a power to act further. Today’s debate is not the end of the discussion on whether Dominic Cummings should have appeared before the DCMS Committee; it is about how we can take this forward and formalise the powers of the House to ensure that we do not find ourselves in this position again.

Gambling-Related Harm

Lord Swire Excerpts

Tuesday 19th March 2019 Westminster Hall

[Sir Hugo Swire (East Devon) (Con)]

I pay tribute to the hon. Member for Inverclyde (Ronnie Cowan) for securing the debate. I would like to feel that I played some part in making his speech happen because, had I not lost Greenock and Inverclyde, which I fought valiantly in the 1997 general election, he might not be here with us—that election in itself was something of a gamble.

I was just reviewing some of the things I spoke about when I was shadow Secretary of State for Culture, Media and Sport between 2005 and 2007, opposite the late Dame Tessa Jowell, whose memorial service I was pleased to attend. Tessa, I think, was slightly conflicted during that time. The Labour party of the day was absolutely obsessed with the idea, which it had imported from America, of inner-city super-casinos as the panacea to all the problems of inner-city regeneration. We debated that back and forth across the House and many people on both sides thought it a terrible idea. In the end, it did not really happen. At the same time, however, the issue of online gambling was beginning to emerge. Although Tessa admitted in 2006 that she had presided over an explosion of online gambling, she was concerned about the regulatory side, particularly about trying to regulate offshore gambling, which remains a problem. The Government of the day, and Governments since, have always been one step behind.

It is the Opposition’s job to be critical of the Government, and I remember being critical of the international summit on remote gambling that Tessa put on in October 2006, rather appositely at Royal Ascot—the home of racing. The conference prioritised crime, competition and safeguards for children and vulnerable people, but had little to say about how to prevent, given the growing online arena, gambling-related harm or its associated social costs.

Reviewing what I said, the questions I laid down and the debates we had in that period, it is salutary to think that we have not moved on that much. The latest Gambling Commission figures show that 48% of adults participate in some form of gambling, and for online gambling the figure is 18%. I should think, but I do not know and the Minister will be able to correct me, that that figure is more likely to increase than decrease.

Problem gambling is defined as behaviour related to gambling that causes harm to the gambler and those around them. The figures look small at face value: problem gambling is confined to 0.5% of adults, with 1.1% at moderate risk and 3.3% at low risk, according to one of the most robust estimates, the problem gambling severity index. Problem gambling is thus defined in that rather tight category, but it is more difficult to estimate gambling-related harms to society, because the term itself does not have a strict definition. The Responsible Gambling Strategy Board, the body that provides independent advice to the Gambling Commission, lists among the social costs of gambling-related harm loss of employment, health-related problems, homelessness and suicide.

[Dr Poulter]

My right hon. Friend makes a very good point. Although according to the headline figure only a small percentage of the general population appears to be affected by problem gambling, the reality is that the harms that manifest in that group are widespread and cause both considerable economic damage to those people and their families and damage to wider society. As my right hon. Friend rightly said, to look at just those headline figures would be misleading.

[Sir Hugo Swire]

I hope that we will shortly hear from my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), who has done much work in this area, not least on fixed odds betting terminals, which are described as the “crack cocaine of gambling”. He will be better able than me to inform the debate.

I do not want to take up too much more time, other than to say that we have been debating the matter for many, many years and I do not believe that we have it right. It remains a huge problem that is difficult, but not impossible, to regulate. We want to hear from the Government how much more robust they can be.

I have just five quick points to put to the Minister. Will the Government treat gambling as a public health issue, as we do mental health? Will the Minister consider introducing tougher verification checks, which could ensure that young gamblers were not drawn online? Has she considered limiting gambling adverts during sports match breaks to one per break per company? We heard from the hon. Member for Inverclyde how online gambling organisations and organised sport are almost one and the same now. Will the Minister agree to conduct a full review of the social costs of gambling? For example, the Government have never estimated the cost to the NHS of gambling-related harm. Will the Minister ensure that gambling-related harm is included when health education is made compulsory in all state-funded schools, as part of teaching about mental wellbeing? My hon. Friend the Member for Henley (John Howell) has already mentioned schools.

Almost daily, we hear and read about problems to do with mental health, and I am glad that we now talk about mental health in a way that we perhaps never have—it is one of society’s hidden problems. However, I suggest that mental health issues in some cases—not all—can be, and are identified as being, exacerbated by dependency on drugs, alcohol and, yes, gambling. Gambling can be a hidden form of dependency, because if you are online you can do it on your computer in your own room. It is not the gambling that people think about of 50 or 60 years ago, which was a social occasion, be it at the bingo or in a casino; it is a hidden form of playing with money and, often, with people’s lives.

Draft Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019

Lord Swire Excerpts

Wednesday 13th March 2019 General Committees

[Sir Hugo Swire (East Devon) (Con)]

I just wanted to raise a point with my hon. Friend. I fully understand that the aim is to replicate existing EU legislation and he is right to say this is a transition period. I do not want to delay matters but I want to put on record, drawing attention to my entry in the Register of Members’ Financial Interests, some of the tricks we are missing and should consider at the end of the transition period with regard to food labelling.

Many of us have thought for some time that food labelling is woefully inadequate, not least that with which we must comply under existing EU legislation. We want it to be much improved and genuinely to reflect country of origin, regional quotas and so forth within the United Kingdom. I draw the Minister’s attention specifically to something for his future consideration. Forty-three tonnes of honey are consumed in this country every year but 95% of that is imported. The current EU and UK labelling says,

“This honey is a blend of EU and non-EU honey.”

That is extraordinarily vague and disguises the countries of origin. It is well known that the majority of supermarket honey sold as pure honey in this country is not pure honey at all. It is often adulterated honey, cut with corn syrup or fructose syrup from China.

When we look at a new regime of food labelling, rather than emulate food labelling under existing EU legislation, there is an opportunity to do something much better and more honest, to expose some of the practice of recent years.

Oral Answers to Questions

Lord Swire Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mel Stride]

I can enlighten the hon. Gentleman, although it is contained in the documentation that has come out of the negotiations. There will be an enhanced equivalence regime in respect of financial services. It is there in black and white. I am very happy to speak to him after questions and take him through the relevant paragraphs.

[Sir Hugo Swire (East Devon) (Con)]

11. What recent discussions he has had with the airline industry on air passenger duty on UK domestic flights.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government meet regularly with the airline industry to discuss a range of issues, including the future of air passenger duty and the domestic aviation market. I met a number of UK-based airlines earlier in autumn prior to the Budget.

[Sir Hugo Swire]

I make no apologies for continuing to lobby Treasury Ministers on the iniquity of air passenger duty and the discriminatory application of it to Flybe, based in my constituency at Exeter airport, which is the UK’s largest domestic carrier. Will the Treasury look again at Flybe and its particular set of circumstances?

[Robert Jenrick]

My right hon. Friend is nothing if not persistent, but we are not able to vary air passenger duty under EU state aid rules for different regions of the United Kingdom, including the south-west. That will change, or may, depending on the final state of things once we have left the European Union, but we have taken action in government: we have frozen short-haul rates for eight years in a row and exempted children going on family holidays, including to the south-west.

European Union (Withdrawal) Act

Lord Swire Excerpts

Thursday 6th December 2018 Commons Chamber

[Sir Hugo Swire (East Devon) (Con)]

No one ever said it was going to be easy. I never shared the lofty visions of the founding fathers of the EEC, the EC and the EU—Schuman, Adenauer, Monnet and others—but I totally understand where they were coming from in post- war, post-consensus Europe and what they were trying to achieve. I never shared the vision of wanting an ever closer set of federal European states or a European army. I am pleased we were awkward members of the club, as de Gaulle always knew we would be, and that we maintained our own currency, and so on.

We had a failure of understanding and a failure of negotiation when my friend David Cameron, the former Prime Minister, went to try to persuade Chancellor Merkel that he needed to be given something to bring back to the United Kingdom. She did not quite understand his predicament.

None the less, I voted to remain because I believed that the EU is immeasurably stronger with the United Kingdom as a moderating force. I questioned who would benefit from a weakened EU, and I still maintain that that is Russia. I have no doubt that people living in Sweden or the Baltic states would share that view. As a former Northern Ireland Minister, I did not understand how we could address the issue of the Northern Ireland border, which I was sure would come up.

My constituents in East Devon, by a small margin, voted to come out of the EU, and I respect that view. Nationally, 1.3 million more people voted to come out of the EU, and we must respect that view. I have been perturbed and variously alarmed and horrified by the way our negotiations have been conducted over the past few months. How we could have agreed to pay a sum of up to £40 billion without securing an agreement I do not know, and I hope my right hon. Friend the Secretary of State for Exiting the European Union will look carefully at the idea of paying the EU with a Brexit bond, linked to the EU’s co-operation with us, to ensure our economy actually prospers.

Normally, as a former remainer, the House would expect me to endorse the withdrawal agreement in the vote next week, but I am currently unable to do so because of the Northern Ireland protocol. I cut my political teeth in Scotland as a Conservative and Unionist candidate, as did my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames), who made such a good speech earlier, and as did you, Mr Speaker. I served in Northern Ireland as a Northern Ireland Minister. [Interruption.] You are now denying it, Mr Speaker, but I think you did fight a Scottish seat, unless I am entirely wrong.

[Mr Speaker]

Order. Stop the clock. I did in 1987, but I have not the slightest recollection of expatiating on the matter of the European Union and, by definition, I certainly could not have done so on the matter of the withdrawal agreement.

[Sir Hugo Swire]

I did not say you did. I was just suggesting that you cut your teeth there, and I was right.

From all my experience in Northern Ireland, I know the nervousness of the loyalist community about how it is often treated by the Northern Ireland Office and the Foreign Office, both institutions in which I have served. We cannot possibly place part of the United Kingdom in a position that is different from the rest. It would be an appallingly dangerous precedent.

I beg my right hon. Friend the Prime Minister, whom I salute for even just standing up at this stage, to try to get us some movement on that part of the deal. If she does, she will find that there are those like me who will feel able to support it. If she does not, she will find herself short of votes next week, as there are those of us who put the Union and the integrity of the Union above all other matters.

--- Later in debate ---

[Mr Speaker]

I am extraordinarily obliged to the hon. Gentleman for what he has said. As far as I am concerned, it is a great honour and privilege to occupy this Chair. The matter that we have been discussing is perhaps the most important and momentous subject that we have debated in decades, and it may well prove to be the single most important issue that we will discuss here in the course of our careers, so for me as Speaker to seek to ensure that the maximum number of colleagues can participate and to have the opportunity to listen to all the points of view is, as I say, an honour and a privilege. I do not look for any thanks, but the hon. Gentleman is characteristically gracious, and I accept his warm remarks in the spirit in which they are intended. Thank you. We come now to the Adjournment—

[Sir Hugo Swire]

rose—

[Mr Speaker]

The right hon. Gentleman is quite fortunate; he is making two orations in the course of a day. He may have made orations outside the House as well—I do not know—but certainly in the Chamber, this will be his second oration.

Finance (No. 3) Bill

Lord Swire Excerpts

Committee: 2nd sitting: House of Commons
Tuesday 20th November 2018 Commons Chamber

[Anneliese Dodds]

As always, my hon. Friend has made an important point. We are seeing the loss of many experienced staff in these offices, which is not only a problem for HMRC, but an enormous problem for local economies.

Over the past couple of months, I have visited 10 of the locations where HMRC offices have either already closed or are set to close, and I must say that there is huge concern about the implications for those local areas. They are often ones where it takes a long time to travel to other destinations and where it is impossible to travel to work to the new regional centres. As a result, we are losing much expertise within our Revenue service.

That is reflected in the statistics from surveys of HMRC staff. We see that HMRC staff morale is incredibly low, but we have no recognition of that by the Government or any understanding of the implications of that for the services that HMRC provides. Indeed, as Members have mentioned, that would become even more of a problem if HMRC had to attempt to sort out the customs and VAT chaos that would be caused by a no-deal Brexit.

Our uncertain future relations with the EU are at the root of the penultimate Opposition amendment that I will speak to, amendment 23. The amendment requires a consideration of the implications for cross-border tax information sharing of no deal and of the Government’s withdrawal Bill arrangements. The European Scrutiny Committee asked for

“the Government’s view on the value of continued UK participation in the wider system of exchange of information created by the DAC Directive”—

the directive on administrative co-operation—

“after the post-Brexit transition period ends, and how it will seek to secure the desired level of cooperation when it becomes a third country for the purposes of EU law.”

The Financial Secretary to the Treasury, who is sitting on the Front Bench again today, sent a letter in response at the end of April. On this point, however, his letter simply said that

“the Government recognises the value of the exchange of information in tackling tax avoidance and evasion and will address procedures for ongoing administrative cooperation, including the exchange of information framework set up—”

under the directive—

“within the scope of the wider EU exit negotiations.”

It is one thing recognising the value of information exchange, but it is quite another ensuring that it will continue. We really need clarity from the Government, not only about administrative co-operation but about other forms of information exchange.

For example, will the Government continue to participate in the code of conduct group, potentially with observer status? I have asked about that repeatedly, but as of yet I have received no answer. Will we participate in the pan-EU database including information about trusts, which I referred to and which is due to be created as a result of the new iteration of the anti-money laundering directive? Will we continue to share information about tax rulings, those sweetheart deals concluded between HMRC and large taxpayers, which are not available to smaller taxpayers and which in some cases have rightly caused uproar when details of their provisions have leaked out?

The hon. Member for South Suffolk (James Cartlidge) referred to the need for a level playing field. Surely that applies in spades when it comes to transparency on tax rulings, so I am very disappointed that his Government have not yet provided that transparency. It is not clear how they will share that data with the EU27 in the future.

The Conservatives’ mood music on this issue so far has been worrying. Not only has the Chancellor damaged relations with the EU27 by threatening to turn our country into a tax haven, but his party’s MEPs—[Interruption.] He has. A number of Government Members are claiming, from a sedentary position, that that never happened, but many Opposition Members will recall precisely when he made those kinds of threats. I have talked to many colleagues from different political parties in EU27 countries who viewed those comments—

[Sir Hugo Swire (East Devon) (Con)]

Will the hon. Lady give way?

[Anneliese Dodds]

I will give way when I have finished my sentence. I am so pleased that the right hon. Gentleman is so excited about participating in this debate. As I have said, I have talked to many politicians in EU27 countries who interpreted those comments—discussing a shift towards a Singapore-style model—as a threat. Of course, often when Government Members talk about a Singapore-style model, they omit to mention the huge amount of social housing, for example, in that nation, and other aspects of its business model. I suspect they have a rather different approach in mind when they talk about it.

[Sir Hugo Swire]

The hon. Lady, who speaks for the Opposition, said she can specifically say when my right hon. Friend the Chancellor made these assertions or claims. When were they made?

[Anneliese Dodds]

I would be more than happy to look up that reference and send it to the right hon. Gentleman immediately. I regret that he cannot remember his own Chancellor’s words and that he is unaware that there have ever been comments from his Government suggesting that the UK may at some point shift towards a Singapore-style model. I regret that he is unaware of the comments that have so soured our relationship with the EU27, because I know that they have caused enormous problems for us. They have presented a picture of our country as seeking to undermine and undercut tax arrangements in the rest of the EU27. For that reason, it is enormously important that those comments should be counted.

If the right hon. Gentleman believes that his Government will no longer use that threat, I will be very pleased to hear it, and I would suggest that he perhaps has conversations with those members of his Government who have advocated that point of view.

--- Later in debate ---

[Kevin Foster]

That is what we have to balance in considering this new tax, because we do not want to shut down the entrepreneurial spirit in many companies and see such provision affecting those who are looking to set out for the first time to get a business going and perhaps to do something that changes the marketplace and really makes a difference. Some of the largest tech companies literally grew out of someone’s garage 10 or 20 years ago. Twitter did not exist when I joined the Conservative party. Facebook did not exist when I first stood for a local council back in 2002. We can see the way that those companies have grown and exploded. We do not want to set up a tax that knocks back genuine entrepreneurialism, but we also have to have a debate about how we ensure that there is a level and fair basis of taxation.

Reference was made earlier to high streets. The point is that a small shop in the centre of a town is paying business rates, collecting VAT, paying its staff and paying corporation tax, and we have to get to a point at which economic activities are fairly taxed. If a large online platform is taking millions of pounds in revenue and paying next to nothing, that is when the annoyance comes and there is a sense of unfairness.

We must have a mature debate on the future of tax in the online space, where activity is much more moveable. My hon. Friend was right to allude to that. These industries can shift much more easily than those that need a physical presence to trade and reach out to customers. A digital service company could be based in New Zealand, and we could all be using its services today from this building via smartphones, tablets or a standard internet link, in a way that would have been unimaginable 30 years ago.

We have to distinguish between genuine activity—for example, paying a company in New Zealand for a website design service—and a fake transaction or transfer of profits, where no one did anything other than raise an invoice in a convenient jurisdiction, into which the money was paid, even though all the economic activity was done elsewhere, the reason being there was an opportunity to avoid a layer of taxation. In such cases, one might see structures set up that link the corporate shell in that jurisdiction to another jurisdiction that is a tax haven or a place with a very low rate of taxation. The Dutch sandwich, which I mentioned earlier, started out as a good idea to encourage tech investment and ended up as a way to reroute profits and, when combined with the so-called double Irish, as a way of strongly minimising taxation liabilities.

[Sir Hugo Swire]

My hon. Friend is making some extremely good points with which I agree, but it is not only online companies such as Amazon that we need to work out how best to tax, but others, such as offshore gambling companies, that retain huge revenues generated by doing things in this country. Is he convinced that the thinking is going on in the Treasury on a root-and-branch reform of all taxation? It seems to me we are trying to play catch-up but that the world is changing quicker than our ability to tax this changing economy.

[Kevin Foster]

I thank my right hon. Friend for his thoughtful intervention. Obviously, I cannot speak for the Treasury, as a mere Back Bencher—[Interruption.]. I appreciate the confidence that my hon. Friend the Member for Walsall North has in me, but I cannot speak for the Treasury. I do not want to say too much about gambling taxation, given that we have just debated it, but we do need to look at the situation in the round, so my right hon. Friend was right to mention it.

My right hon. Friend is a distinguished Member of the House. He has been here for I think 17 years, during which time the economy has changed remarkably. Who would have thought back then that companies such as Woolworths would have faced a challenge from online competitors? Who would have thought that every one of us would be sat in this Chamber with a device that would allow us to buy the entire contents of a department store, order virtually anything we want, and access casino-like gambling opportunities for which not that long ago we would have had to make a trip to Monaco? We now have that all in our pockets—we can literally walk out of the Chamber and do it.

I share my right hon. Friend’s concern, but the economy is moving on. As I said in response to my hon. Friend the Member for Redditch (Rachel Maclean), we must not destroy the good, and we have to be careful not to chuck out the baby with the bathwater. The Treasury will have to look at that. The nature of work is changing, too, and that raises not only challenges for employment rights, but questions of how we tax fairly, given that it will be less and less the case that there is a big employer with lots of staff who are paid regularly, to which it is easier to apply restrictions.

EU Customs Union and Draft Withdrawal Agreement: Cost

Lord Swire Excerpts

Monday 22nd October 2018 Commons Chamber

[John Glen]

The Government have made an assessment that means it is imperative that we come out with a solution that is right for those employers in the hon. Lady’s constituency and gives the certainty that they need, because that is what her constituents will require.

[Sir Hugo Swire (East Devon) (Con)]

I think we can agree that any extension to the transition period will be costly—£15 billion, £16 billion or whatever it is—but the problem is that we will have no MEPs to represent us, no say and no influence on any legislation introduced during that period. Does my hon. Friend agree that there should be no taxation without representation?

[John Glen]

My right hon. Friend makes a factual point, and no doubt those conducting the negotiations will have that at the top of their mind.