(8 years, 1 month ago)
Commons ChamberWe have already made announcements about EU funding during the transition period, giving a Treasury guarantee to underwrite funding that is allocated to projects in the UK, so that people who bid for that funding can do so with confidence. However, as the hon. Lady suggests, after we leave the European Union we will need to review for England, and discuss with the devolved Administrations for Scotland, Wales and Northern Ireland, how we are to replace the streams of EU funding to which many regions have become accustomed. We need to have a debate in the House to ensure that that funding is used in a way that reflects the UK’s priority in the future, not the priority of the wider European Union.
Selsey Bill, in my constituency, is a special case, but the best thing that can be done for coastal areas is to secure stronger growth throughout the economy. Mario Draghi has suggested that UK growth would be lower if, as a consequence of Brexit, the UK economy were less open to trade and investment. Does the Chancellor agree that both the UK and the EU benefit from an open economy, and that, if the European Central Bank is worried about a Brexit shock to the eurozone, he can and should be lobbying EU leaders to press for a high degree of mutual market access in the Brexit negotiations?
(8 years, 1 month ago)
Commons ChamberThe Prime Minister has said many times—I shall undoubtedly repeat this many times today—that it remains our objective to try to get the closest possible trading arrangement with the European Union and the greatest possible access for our goods and services to be sold into European markets after we leave the European Union. In response to the right hon. Gentleman’s question, I think we have to disaggregate two effects. There is of course going to be a period of uncertainty as we go through the process of exiting the European Union, and that has had a dampening effect on business investment, as the OBR has identified. However, we have to rise to the challenge of getting ourselves match-fit to seize the opportunities that this country will have after we complete that process, and I would urge him to think about that longer-term challenge as well as the short-term issues.
I congratulate the Chancellor on delivering a crucial statement for the country. It was a Budget in all but name, and I strongly support his decision to make it the first of many autumn Budgets, for which a number of us on the Treasury Committee have been pressing for a while.
The statement will provide reassurance and certainty for the whole country. Given that the education sector creates export earnings of £20 billion—about the same as the car manufacturing sector—will the Chancellor soon be able to provide our colleges and universities with the certainty and reassurance they need that foreign students will not be caught by the 100,000 migration target?
I am grateful to the Chairman of the Treasury Committee for his remarks and for the Committee’s work on a single fiscal event—it is much appreciated and the right way for us to go. On his specific question, students are included, as he knows, in the 100,000 or tens of thousands target, and my right hon. Friend the Home Secretary is looking at how best to manage student flows in the interests of what, as he says, is an important industry in this country.
(8 years, 4 months ago)
Commons ChamberI am grateful to the Minister for what she has said about the proposals. I am pleased that it has been possible to work out a compromise which I think is very reasonable all round, and which builds on the arrangements made by the former Chancellor for the appointments of the chairman and chief executive of the Financial Conduct Authority earlier in the year. I see no reason why this should not form the basis for a permanent arrangement to ensure that we get the best possible candidate into the OTS, supported by Parliament, in future years.
I thank the Chairman of the Treasury Committee for his indication of support for these arrangements. As he says, we have set out a procedure for the future. I have written to him, and the Chancellor will write to him as well, to confirm that for the record.
New clause 8, tabled by members of the Scottish National party, would require the Government to review the way in which the changes in dividend tax will affect directors of microbusinesses. First, we feel that it would be impossible to deliver such a review, because information from the self-assessment process will not be available until 2018. Secondly and more fundamentally, the dividend tax changes cannot be viewed in isolation, as I pointed out in the previous debate. Small company directors will have benefited from various recent tax changes made by the Government, including cuts in corporation tax and business rates—with more to come into effect in the spring of 2017—and the introduction of the employment allowance, which has made a considerable difference to business people in my constituency to whom I have spoken and, I know, to those in other constituencies. We think that these matters must be looked at in the round, and we therefore do not feel that we can accept the new clause.
New clause 18 proposes another review, on the impact of section 24 of the summer Finance Act 2015 on affordable housing. Again, we feel that that is unnecessary. The changes made by section 24 are being implemented in a gradual and proportionate way. Only one in five landlords is expected to pay more tax, and we do not expect the changes to have a large impact on either house prices or rent levels owing to the small overall proportion of the housing market that is affected. It is worth noting that the Office for Budget Responsibility has endorsed that assessment.
I gather from my predecessors that the subject of new clause 6, which asks the Treasury to conduct
“a review of the VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service”,
has arisen a number of times in the past, and I am afraid that I cannot add very much to the responses that SNP Members have heard before in the context of this and previous Finance Bills. The Treasury made it clear to the Scottish Government that the proposed changes would result in a loss of eligibility for VAT refunds. They chose to go ahead, which was their legitimate right, but there can be no expectation that we will review the issue, given that the consequences were clear beforehand.
As the Minister knows, the issue of distributional analysis is of great importance to the Committee. The previous Chancellor accepted it in 2010, but resiled from it in 2015, to the Committee’s considerable concern. On the understanding that the Chancellor really is considering reinstating the arrangements that had been in operation for the preceding five years, I would not be minded to vote for new clause 19. Am I to understand from what the Minister has said that a serious reconsideration is taking place, and that she or the Chancellor will return to the House in due course to inform us of their conclusions?
(8 years, 5 months ago)
Commons ChamberI suspect that the founder of the company has not had the benefit of discussions with the acquiring company. I have met the leader of the current management team, who are wholeheartedly supporting the purchase by SoftBank. We have achieved some very hard guarantees—these were volunteered without our having to extract them—about the future autonomy of the company, headquartered in the UK, and about its commitment to double the number of UK employees over the next five years. What became very clear from a discussion with the founder and CEO of SoftBank is that it firmly believes Cambridge will be the global centre for developing the internet of things and ARM will play a key role in developing that industry.
I warmly welcome the Chancellor to his new role. It is probably the job he always wanted—unless of course he wants eventually to move next door. I note that to most questions so far he has said he is going to wait until the autumn statement, so I am hoping I get an answer to this one a bit earlier. Sticking to the fiscal surplus rule has rightly been scrapped by the previous Chancellor, and the automatic stabilisers have been allowed to kick in. The higher deficit implied by that decision will have to be plugged sooner or later. From 2010, the Chancellor’s predecessor planned an 80% consolidation of that to come from spending, with only 20% coming from tax. [Interruption.] There is a question coming, if hon. Members can be patient. Does the Chancellor intend to stick to his predecessor’s target of 80:20 or is he going to vary it?
My right hon. Friend will know that the surplus rule always came with the caveat that if the Office for Budget Responsibility forecast four rolling consecutive quarters of less than 1% annualised growth, the target would be suspended. The consensus among pretty much all forecasters is that that is likely to be what they forecast this autumn statement, so my predecessor’s announcement was merely pre-empting something that almost everybody expects to happen. I am afraid to tell my right hon. Friend the Member for Chichester (Mr Tyrie) that how we are going to respond over the longer term to the resulting deficit will be set out at the autumn statement.
(8 years, 5 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I think that I am not being over-cynical if I wonder whether a proposal by 1,000 lawyers for a commission to deliberate at length might be a delaying tactic. The concern will be not to tie the hands of the incoming Prime Minister or her negotiating team in how we approach this matter. As the hon. Member for Sheffield, Heeley (Louise Haigh) rightly pointed out, we must ensure that whatever we do and however we handle this, we aim to get the best deal possible for this country with not just other European member states, but other countries in the world.
Quite a bit of controversy is already breaking out and we have scarcely started this debate. The Minister has been doing a great job with his outpouring of common sense on a heap of these questions. Will he confirm that all common sense points to not triggering article 50 until it is in the UK’s national interest to do so, as the Treasury Committee has reported, and as the Governor of the Bank of England and many people who have been closely involved with these issues have concluded?
I am happy to confirm that this is not a question of “if” we leave the EU but “how”, so the calculation that we—particularly the new Prime Minister and her team—need to make is about the best way to structure and time negotiations to maximise our leverage. I am sure that the incoming Prime Minister will have read the Committee’s report with great care, as have we all, and will take those factors into consideration.
(8 years, 6 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
When I became Chancellor, there was a question mark over Britain’s ability to pay its way in the world, and that was reflected in our bond yields, but because of our determined effort over the last six years, when we have hit an economic shock, as we have done in the last two weeks, the response has been a fall in bond yields—because people have confidence in the UK.
First on planning, extensive contingency plans were in place to deal with financial market disorder as a result of a leave vote, and the fact that we are not debating that today shows that those plans have been effective—we remain vigilant, but those plans were in place. Secondly, we must now decide on the new model of our relationship with the EU. That was not on the ballot paper and has to be a decision for Parliament. We set out the options for the country in advance of the referendum debate, and now we must have that discussion.
Thirdly on planning, the fiscal charter specifically provides for the impact of a negative shock, which is what we have had, and as a result the rules of the charter apply. As I say, it is unlikely that the surplus will be achieved in 2019-20—although that will be for the OBR formally to assess—and it will then be up to the Chancellor to produce new plans to restore the public finances to surplus and for Parliament to vote on them. We thought about that in advance: it is in the charter that the House voted on.
The hon. Gentleman talked about investment. On Friday, I met the Labour leader of Manchester City Council, Richard Leese. We talked about how we could redouble our efforts to invest in transport across the Pennines and about devolved powers for mayors and the like. That will be part of our response to the disfranchisement that too many of our citizens in the midlands and the north of England have clearly felt.
Finally, the hon. Gentleman also asked about business confidence and the corporation tax cuts. Not only have our corporation tax cuts given us the lowest corporation tax rate of all the advanced economies of the world, but we have seen a 20% increase in receipts from corporation tax—because businesses are coming to this country, growing their businesses in this country and employing 2 million people. The best response we can send to the world to show that we are open for business is to go on reducing business tax.
The Chancellor has done the right thing to buttress the decisions of the Bank on monetary policy with fiscal measures, particularly by allowing the automatic stabilisers to kick in. The 2020 fiscal surplus target was always likely to be a casualty at the first sound of Brexit gunfire, and so it has proved—hence the need to take advantage of the charter’s flexibility. Does he agree that, in order most effectively to bolster credibility in the coming years, over the next few months we need to develop a rule that sets fiscal policy in a longer-term framework and which is resilient to changes in the OBR’s short-term forecasts?
It is clearly likely that we will be impacted by a cyclical downturn in the public finances—we can already see the growth forecasts being adjusted. The OBR will help us to make an assessment of the referendum result’s structural impact on the public finances and our chances of hitting the target—as I say, it looks unlikely that we will hit it—and then, under the fiscal charter, it will be up to the Government to produce a plan that will be debated and voted on by the House. We have provided for this contingency, and now we need to let the OBR do its work.
(8 years, 7 months ago)
Commons ChamberOver the past five or six years, we have greatly increased the UKTI budget, but as with every Department, since it is paid for by the taxpayers that the hon. Gentleman and I represent, we need to make sure we get value for money. The new head of UKTI is ensuring that the money is going to the frontline to support small and medium-sized Scottish exporters and others in selling around the world. He should welcome the enormous success of many Scottish businesses, from the whisky business to agricultural industries and manufacturing, in exporting around the world, with the support of UKTI—the clue is in the first two letters.
The Chancellor has introduced a subsidy for peer-to-peer lending tax relief on ISAs, which is a high-risk, high-return market. Most people support the intention, which is to increase competition in the SME lending market, but many are becoming concerned that some of these loans are being marketed to those who cannot reasonably be expected to understand the risks. What is the Treasury doing to ensure that the taxpayer does not end up encouraging the marketing of schemes to people who can least afford to lose the money?
At its own request, the peer-to-peer lending industry is now regulated by the Financial Conduct Authority, which is alert to the risks that my right hon. Friend identifies, but I wish to make a broader observation. In the financial crash, we saw the limitations of the UK’s credit system, where many companies were reliant on bank finance. In the last few years, we have tried to broaden the range of financing options for small and medium-sized businesses, in terms of not just capital markets but innovative new products such as peer-to-peer lending. Using things such as ISA wrappers to encourage this new form of finance for small businesses is a good thing for our economy.
(8 years, 8 months ago)
Commons ChamberFirst of all, that was a very good speech. I congratulate the hon. Member for Leeds East (Richard Burgon) on covering quite a lot of ground in a good deal of detail—and with a sense of humour, which I enjoyed. I was also pleased that he got in one or two points—it saves me the trouble—about the OBR and its importance as a precedent for what we are discussing today.
I will also say—although only in a sentence, otherwise I am sure that I will get told to be quiet by you, Madam Deputy Speaker—that this is a very good Bill. In many respects, it implements a good number of the wider objectives for Bank of England scrutiny and accountability for which the Treasury Committee has for many years been pushing. I thank members of the Treasury Committee in the previous Parliament and in this one who have pressed for these measures vigorously. It shows that things can be achieved if one persists.
I am grateful to the Minister for her assistance over a number of days, and to the Chancellor of the Exchequer, who followed up a telephone conversation last night with an exchange of letters. We have now reached an agreement on how to proceed, so I will not need to press new clause 1 to a Division.
Following the exchange of letters, most of the objectives that we sought through new clause 1 are provided for, and it is worth going through the key points, which the Minister effectively clarified by reading out the Chancellor’s letter. First, appointments will be made in a way that ensures that the Treasury Committee can hold a hearing in good time. Before the appointment is formalised, the question of whether there is a pre-commencement or pre-appointment hearing is, in my view, a distinction without a difference. Secondly, if the Committee disagrees with the appointment, it will report that to the House, and if they choose, the Government must find time for a debate on the Treasury Committee’s report. That debate will be on a motion to accept the conclusion of the Committee. The Government will then have to vote it down. The Government further agree that they will respect the decision of the House once that vote has been taken.
Thirdly—this point has already been raised—at the earliest opportunity, the Government will amend legislation to ensure that future appointments of the chief executive of the FCA are made on a fixed renewable five-year term. I expect that legislative change to take place in the next parliamentary Session. I am not sure that the provision would satisfy the long title of a Finance Bill but, if it does, I would expect the Government to include it in that Bill. I also recognise that the Chancellor could not fully commit over the phone that the change would take place in the next Session, since he will have had no opportunity to secure an agreement on the legislative time from his Cabinet colleagues. I expect, however, that he will do that as soon as possible. It will be a pretty small, self-contained Bill. The fourth point, which has not been mentioned so far, is that it is the Chancellor’s clear view—I am not in any way misrepresenting him—that the arrangements that are being put in place should be the permanent method of appointment, rather than something that will just disappear with this Chancellor or, indeed, the helpful Minister at the Dispatch Box, however supportive she may be of the proposals.
Why has the Treasury Committee devoted so much time to this issue? I have a specific and a general answer to that. On the specifics, there have been widespread concerns that the independence of the FCA has been compromised by the circumstances of Martin Wheatley’s departure, and by other apparent interference in the FCA’s work by senior Treasury officials, and perhaps Ministers. We explored those circumstances through cross-examination in Committee and found no such evidence. However, my right hon. Friend the Member for Cities of London and Westminster (Mark Field) got right to the point when he said that the appearance or perception of interference none the less remains. That perception makes it harder for regulators to do their job, so it had to be addressed. Bolstering the perceived independence of this key appointment, and ensuring that the individual cannot easily be removed by the Treasury, seemed crucial to the Committee.
For the record, I do not think there was any undue interference from the Treasury, and I am happy that Andrew Bailey is taking over—he will be a good chief executive. None the less, there was that perception within the square mile and we must hold that fairly close to our hearts.
May I also say how much I approve of the Treasury accepting the guts of new clauses 1 and 9? It is greatly to its credit that we have not had to go through the House of Lords, because it does a discourtesy to this House when such changes are made through amendments in the House of Lords, rather than being part and parcel of discussions in advance of Report.
One other issue is the apparent statutory protection against dismissal, which came into question as a result of Martin Wheatley’s departure. Whatever the reality, the current statutory protection appeared inadequate, which was perhaps because he was appointed only for a three-year term. Five years—a goodly and longer term—will provide more protection. To put it even more simply, the changes rectify in another way the risk of arbitrary dismissal. For example, if the Treasury Committee strongly supports keeping the incumbent after four and a half years, it can make that abundantly clear in a report and recommend to the House of Commons that any other candidate is voted down. So in practice, with the letter, we already have the protection that we wanted.
The FCA needs a strong and demonstrably independent chief executive, accountable to Parliament. It endured a difficult birth and struggled to emerge from the rubble of the failed FSA. Some of its best staff have been poached by the Prudential Regulation Authority, the Bank and the private sector, and it has been hitting the headlines for all the wrong reasons, not least with the breach of its own listing rules, which wiped 20% off the share value of the life assurance sector. With what will amount to a requirement for parliamentary approval of future appointments or dismissals of the FCA chief executive, the incumbent will now be in a strong position to resist pressure from Ministers and officials, and their authority will be bolstered.
The fact that this is a non-statutory change—unlike new clause 1, which would have been in the Bill—does not perturb me a great deal. Any attempt by the current or future Chancellor to circumvent these arrangements is likely to lead to a complete collapse of trust between the Treasury Committee and the Government, and I do not foresee that happening.
Does my right hon. Friend have some small concern that if a measure is not included in the Bill, no precedent will be set? To return to an earlier exchange that I tried to have with the Minister, that might give the Treasury licence to take this as a sui generis case, rather than recognising that the Treasury Committee should perhaps have a more important role in approving the appointments of a number of senior figures in the financial services firmament.
That argument can be turned on its head. One can argue that this sets a precedent that is more easily rolled out, without the need for statutory change, to other bodies. In the Treasury field, we now have a statutory double lock for the appointment and dismissal of the head of the Office for Budget Responsibility, which was recently found to be of some use following controversy about alleged interference in the production of the forecast—again, we did not find any evidence of that, but the perception of it might have weakened the OBR. We have a requirement for a resolution of the House prior to the appointment of the chairman of the Office for National Statistics, and now we also have these arrangements. So we have a battery of different arrangements on which to draw.
I congratulate my right hon. Friend on achieving this great success for parliamentary scrutiny, and I suggest that it is better to proceed in a non-statutory way. Bringing statute into the proceedings of the House always presents longer term problems, and setting a non-statutory precedent has lots of advantages.
I always like listening to my hon. Friend, who is a member of the Treasury Committee and, of course, a constitutional expert. It is certainly true in this place that a good deal of quasi-constitutional change, which is what we have here, tends to take place gradually and often due to the development of informal arrangements. I think that that is all to the good, which is what I think my hon. Friend is saying.
Does the right hon. Gentleman not feel the slightest hint of disappointment in the intervention by the hon. Member for North East Somerset (Mr Rees-Mogg) because it was surely a historic first that he signed a new clause to amend the British constitution?
Of course my hon. Friend the Member for North East Somerset (Mr Rees-Mogg), as a great and learned constitutional expert, will explain this apparent contradiction to the House in, I hope, a lengthy disquisition in a few minutes’ time.
I really am trying to conclude, but I have just one more point. It is essential in a 21st-century democracy that appointees to an increasing number of quango positions—this was the general point I said I would refer to earlier—should be forced to explain their actions before Parliament and also should feel accountable to Parliament. To achieve that, the means of their appointment and their protection from dismissal are relevant, and that is why a change such as this can offer us something.
Over decades, successive Governments have offloaded their responsibilities to quangos, leaving the public with the sense that nobody is ultimately democratically accountable for anything. I believe that accountability for decisions that were formerly taken directly by Ministers, but now sit with unelected appointees in quangos, needs thorough scrutiny and cross-examination, and that is what we have been trying to do in the Treasury Committee over the past few years.
The agreement with the Chancellor is a sizeable step in the right direction. Of course, in an ideal world, I would like access to the statute book to write exactly what, on behalf of the Treasury Committee, I feel should be on it. However, we live in the real world, and I am very happy with this exchange of letters and grateful to Ministers for their agreement. I shall not press new clause 1 to a Division today.
I agree with the right hon. Member for Chichester (Mr Tyrie) that there is a lot to be commended in the Bill, although some of the good things, as with new clause 12, were pushed on the Government. I also think that there are still some negative aspects to the Bill, which brings me to a conclusion—[Interruption.] As usual, it will be quite a long conclusion!
The Bill began as a tidying-up operation, which is why it was launched in the House of Lords. It was seen to be about just tidying up a few things, making a few additions and changes to the Financial Services Act 2012. As the Bill proceeded through its various stages, however, the more it became apparent that it exposed a whole series of issues in the financial regulatory system that were not fit for purpose.
We have convinced ourselves—or at least the Government have convinced themselves—that bar a little tidying up, all has been done to resolve the crisis of 2007, but that is not true. What we discovered time and again as the Bill proceeded were issues with the operation of the Bank of England and issues with the functioning of the regulatory bodies and how fit for purpose they are. Furthermore, new issues have emerged only in the last few weeks regarding tax havens. All those problems have appeared. I do not see this Bill putting the problems away and putting the issues to bed. Rather, we are seeing the start of a whole series of pieces of legislation coming into force until we get it right. Far from it being a tidying-up operation, we have started something new.
I am speaking to new clauses 2 and 3, which stand in my name and those of my SNP colleagues. I believe they get to the nub of the issues we are facing as a result of what has been uncovered. In the last 20 years, and more particularly in the last 10, the Bank of England has acquired an extraordinary range of new powers. I do not mean just forecasting or supervising powers over banks, because fundamental policy levers for running the whole economy have been transferred from this House and the Executive to the Bank of England itself. This began with the transfer of powers over interest rates to the Bank of England in 1997, along with the power to set the exchange rates, which no one seemed to notice at the time. This gave the Bank de facto control over our external sector. More recently, of course, with quantitative easing, the Bank has forced interest rates down to the zero band. If monetary policy cannot be manipulated, what else can be done? Gradually, the Bank has been given powers over large swathes of fiscal policy.
Nowadays, the Bank of England even operates our housing policy, as housing determines the whole direction of economic growth. In recent weeks, the Bank has been deciding between buy for let or buy for homeowners. Micro-decisions have been transferred, and my worry is that we have crossed a line of accountability with respect to the Bank of England. This is not a criticism of individuals working for it or indeed of the Governor of the Bank of England, for whom I have high regard. Gradually, however, we have allowed it to take over from this House far too much of the operational policy that directs the economy.
That is why I am happy to support new clause 12 as a step forward in beginning to redress the balance of accountability. New clause 12 and the Government’s acceptance of the general line of march from the Treasury Select Committee means that we are beginning to move to the point where key members of the regulatory regime can be confirmed in their appointments by this House.
We now have two precedents in that direction, with the Treasury Committee as a servant of the House confirming the appointment of the director of the Office for Budget Responsibility and now the head of the Financial Conduct Authority. That is the line of march, but I want to put on record, however, that SNP Members view this as a down payment. We are moving in a direction where the Governor of the Bank of England and all the key members of the regulatory agencies have to be confirmed by this House. I know that will take a long time and that there is always a struggle—sometimes gentle, sometimes not—between the Executive and the House over who has the real say. What we are seeing is a move towards more democratic accountability being held by the House, which I welcome.
Let me move on briefly to new clause 2, which takes this process a little further. Given the policy direction and powers that now lie with the Bank of England, we have to make sure that its committees and, above all, its ruling court of directors are democratically accountable. That is why we tabled this simple new clause, stating:
“In making nominations to the Court of Directors of the Bank of England, the Chancellor of the Exchequer must have regard to the importance of ensuring a balanced representation from the nations and regions of the United Kingdom.”
That new clause was carefully written. There is no suggestion that the court should be a federal body. Our suggestion is that in the balance of its make-up, there should be representation for the whole nation. Rightly or wrongly—much more rightly than wrongly in my opinion—there is a perception that the City of London and its major banks and financial institutions have historically had too big a sway over the court and the Bank.
In responding to the debate, I will perhaps leave aside the comments of the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell), as I do not recall him participating in the debates on Second Reading, in Committee or earlier today, and his speech did not reflect the full view of other parties in this House that the Bill is a very good Bill, in the words of the Chair of the Treasury Committee.
I want to respond to some of the points raised in the debate and, in particular, to put on record how pleased I am that everyone welcomes Government new clause 12, which is supplemented by the text of the letter from the Chancellor to the Chair of the Treasury Committee that was sent earlier today and that I read out in my opening remarks. This has been an important opportunity to put on record how our amendment recognises the important scrutiny role of the Treasury Committee.
I would also put on record the important role of this House in scrutinising the Executive. This is another opportunity for us to emphasise the importance—the necessity, even—of preserving the independence of the FCA chief executive’s operational role, apart from Government. Our amendment reaffirms that commitment to continued independence of the FCA. It is vital consumers and firms know that regulatory decisions are being taken in an objective and impartial way. The FCA is an operationally independent regulator and must carry out its functions in line with the framework of objectives and duties established in statute and the independence of that chief executive is protected by statute, with clear provisions requiring the terms of appointment to be such that the appointee is not subject to direction by the Treasury or any other person.
Throughout their appointment, the FCA chief executive is scrutinised on an ongoing basis to ensure their continued independence. It was notable that in the course of the debate nobody could point out anything as regards the allegations made in the press about operational interference. I look forward to seeing the Treasury Committee’s report, because I know that it has carried out a thorough investigation into the matter.
Our new clause ensures that the Treasury Committee will always have time to scrutinise an appointee before they get their feet under the desk. I have also put it on the record that the legislation is very clear that once they are appointed the Government absolutely cannot dismiss an FCA CEO except in the limited circumstances set out in statute. I will not read out paragraph 4 of schedule 1ZA to the Financial Services and Markets Act 2000 again, but I referred to it in my opening remarks and reiterate that it applies not only to the CEO but to the chair and the external members.
We heard from my right hon. Friend the Member for Chichester (Mr Tyrie) about his reaction and his decision to withdraw his new clause 1. He asked whether he could expect legislation in the next Session outlining the five-year term. As he knows, he has our commitment to find an early opportunity to put that into legislation. He is aware of the strictures that exist in relation to writing round and getting Cabinet agreement, but he has that commitment now from the Dispatch Box. He asked whether the legislation is permanent—a good question. It is possible that legislation becomes permanent, but it is also possible for a future Government, a future House of Commons and a future Treasury Committee to change legislation.
I am grateful to the Minister for what she says. The clarification that I seek relates not to legislation, which stands or falls like any legislation, but to the arrangement. Is it intended that the arrangement between the Treasury Committee and the Chancellor, put in place in the exchange of letters today, will be permanent?
The Chancellor has many powers, but not necessarily the power to ensure permanence, which is a very long time. I can assure my right hon. Friend that it is the Chancellor’s intention that that remain the case for the length of time that he is able to exert power and influence over the matter. I hope that answers the question in the spirit in which it is asked.
The hon. Member for Leeds East (Richard Burgon) asked me to confirm that the NAO can look at the Bank’s success in meeting its objectives, but not necessarily at the desirability of those objectives. I have already said that that is exactly what the Bill achieves. The arrangements set out in the Bill have been agreed by both the Comptroller and Auditor General and the Governor, and the terms of reference have been made available to the House. The CAG is content that the scope of his powers is appropriate and the Bank is content that they do not go too far.
The hon. Gentleman asked whether the Bank should have practitioner representation. The Prudential Regulation Authority has a practitioner panel, which ensures that the interests of those who must put the PRA’s rules into practice are communicated to the PRA. That panel includes representatives of banks, insurers, building societies and credit unions, among whom the hon. Gentleman’s new favourite publication, City A.M., is widely read. Consumers also have an input through the FCA consumer panel, which has a statutory right to make representations to the PRA.
Speaking to her amendment, the hon. Member for Bishop Auckland (Helen Goodman) asked about the Bank of England and the extent to which it is subject to the Freedom of Information Act 2000. It is thanks to this Bill that the Bank is subject to the FOI Act. There are three specific limited exclusions from the Act as it applies to the Bank and, as I explained earlier, those are entirely sensible. The Bank of England is not alone in having particular elements of its work carved out from the Act. Other organisations to which specific exclusions apply include the Verderers of the New Forest, S4C in Wales, the Competition Commission and the BBC.
On the hon. Lady’s question about the Governor’s analysis supporting selling RBS shares at prices substantially above the price at which the shares are trading today, the Governor has explained that his analysis is based on commercially confidential information obtained as part of the PRA’s supervisory responsibilities. In the Freedom of Information Act there is, rightly, a standard exemption for commercial interests.
The hon. Member for East Lothian (George Kerevan) said that there was a lot to be commended in the Bill. He asked about the range of expertise and perspectives on the court. He raised an interesting philosophical question, which is that in the past the court has been a much larger organisation, with 19 members—unwieldy, in the Treasury Committee’s view—but that it should represent the views of the entire UK. All members of the court should consider the whole UK, rather than acting as a representative of a particular part. He seems to have forgotten our exchange in Committee, when we talked about the trade union representation of the court and I assured him that we have said nothing during the passage of the Bill that would change the post-war reality.
(8 years, 8 months ago)
Commons ChamberThe recent information-sharing agreement that the Chancellor has just referred to could turn out to be a very significant step in the fight against tax evasion, and I support it. The public are right to be upset when businesses or individuals do not pay their fair share of tax. Evasion needs to be rigorously pursued, but does the Chancellor agree that when that is caused by tax avoidance, it is the job of Government to simplify the tax code and close the loopholes exploited by the avoiders?
I broadly agree with my right hon. Friend. I welcome the welcome that he gives to the agreement that we have with four other European countries on the exchange of information on beneficial ownership. We hope that will set an example that not just the rest of Europe, but the rest of the world will follow.
On tax avoidance, of course it is the responsibility of the House of Commons and the Government to try to make sure that the tax code and tax law are simple and do what is intended, but we are in a constant race, as has always been the case, against highly paid accountancy firms and the like, who design very contrived systems to avoid tax and avoid the intention of Parliament. There has been a significant development in our jurisprudence whereby the Supreme Court now takes into account the intention of Parliament, as well as the letter of the law. I think that is right, because as I say, there is sometimes a bit of an arms race in relation to the tax code, and the wishes of Parliament should be taken into account by our courts.
(8 years, 10 months ago)
Commons ChamberI believe that the best way to help the UK steel industry is both to take action at home and through being part of a large economic bloc—in other words, the European Union—raising our concerns about, for example, Chinese steel dumping. Frankly, when we make that argument with China, our voice will be amplified if we make it as part of the EU as opposed to making it alone.
In the event of a no vote, the Government have committed themselves to triggering article 50 straight away. I cannot see the point of that. Why do not the Government give some time between a no vote and the triggering of article 50, to enable a discussion to take place with counterparties and see the extent to which good faith could be established with the countries of the European Union? It seems illogical to restrict ourselves in that way.
It is not illogical that if the country votes to leave, we leave the European Union. That is the choice for the people of this country. The only available mechanism is the triggering of article 50, which gives a two-year time limit. Of course, we would try to negotiate in good faith and an extension can be achieved, but only with the consent of 27 other nations. People need to be aware that there are not going to be two referendums. It is decision day on 23 June. People need to choose and I think that voting to remain in the EU is the best outcome for our economic and national security.