Financial Services and Markets Bill (Third sitting)

Martin Docherty-Hughes Excerpts

Committee stage
Tuesday 25th October 2022 Public Bill Committees

[Andrew Griffith]

That is not the position in the Bill, which does not contain that date. Whether or not the Government’s intention at the time was different, nothing in the Bill says that that will happen. The Government will not diverge for divergence’s sake, because we understand the need for continuity to give financial services companies the confidence that they seek.

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

It is good to see you in the Chair, Dame Maria. Does that also apply to financial organisations based in Northern Ireland, Minister?

[Andrew Griffith]

If I may, I will come back to that point later.

--- Later in debate ---

[Dame Angela Eagle]

Could the Minister spend a bit of time explaining what “materially similar” means?

[Martin Docherty-Hughes]

I asked the Minister earlier about Northern Ireland, and SNP and Labour Members would be interested to hear what he means by “proportionality” when it comes to services, EU-derived legislation and what differences there will be between the UK and Northern Ireland. He never mentions Northern Ireland—he keeps talking about the United Kingdom.

[Andrew Griffith]

To the question asked by the hon. Lady, my understanding is that the terms will have the common law usage. It would be inappropriate for me to try to insert my own definition.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.

Financial Services and Markets Bill (First sitting)

Martin Docherty-Hughes Excerpts

Committee stage
Wednesday 19th October 2022 Public Bill Committees

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

I am chair of the all-party parliamentary group on blockchain.

[Gareth Davies (Grantham and Stamford) (Con)]

I am a vice-chair of the APPGs on environmental, social, and governance and on financial markets and services. I also spent 14 years in financial services and my wife works in financial services.

--- Later in debate ---

[Stephen Hammond]

Q So, like you have just said with regard to the first question, we should look at ways of making sure that that is firmly set down, rather than just a principle.

Emma Reynolds: Indeed.

[Martin Docherty-Hughes]

Q May I ask you both about clauses 21 and 22, and digital settlement assets? Ms Reynolds, you talked about high standards. I wonder if you could both say whether you agree that the definition of a digital settlement asset is satisfactory and robust enough to safeguard consumers. It is rather broad.

David Postings: I think it needs to be broad, because the digital asset environment can change quickly, and if you define things too narrowly, you risk missing the next wave of change. Yes, I think it is good and wise to define it broadly.

[Martin Docherty-Hughes]

Q But if the technology is moving that fast, how is Parliament—and, therefore, any legislation—going to keep up with it? That is a concern.

Emma Reynolds: The definition is broad and, as I understand it, it gives both the Government and the regulators a way to regulate in this area and bring things into the regulatory perimeter. It is our understanding that stablecoins will be the first of those digital assets. This is a very fast-moving area; the EU has its MiCA—markets in cryptoassets—regulation, which you will be aware of, which is a very broad framework. I think there is some advantage for the UK in being the second mover here, because there is some concern about some of the things MiCA has closed down. For example, it is not allowing stablecoin wallets to accrue interest. We are watching very carefully in this space, but I understand your concern about consumer protection. I think that is front of mind for our firms, and they want a level playing field as well.

[Martin Docherty-Hughes]

Q Would that include the smaller and medium-sized companies that might be involved, not just the big players? That halo effect is a concern for others, because the definition is literally to safeguard them, not the smaller and medium-sized players in the market.

Emma Reynolds: That could be a concern, yes.

[Emma Hardy]

Q David, may I ask you about the role of banks in tackling fraud? The legislation focuses narrowly on APP scams. Would you welcome the introduction of a broader national strategy to tackle fraud, delivered by key Government Departments and agencies, law enforcement, major banks and wider partners in the financial services sector? Would you welcome something on fraud that is a bit broader than what is in this Bill?

David Postings: I am not sure this Bill is the right mechanism for it. We have been working closely with Government and regulators on a fraud strategy for some time, so anything that takes the agenda forward has to be welcomed, because fraud is a huge burden on society and a rising crime, but I am not sure that this Bill is necessarily the right Bill.

--- Later in debate ---

[Tulip Siddiq]

Q I hear what you are saying, but it is not the same thing. I know those issues still exist with other forms of payment, but for stablecoin and digital assets, consumer protection levels need to be monitored more; consumers are more vulnerable, just because of the lack of knowledge. I am trying to get to whether you have specific tactics to ensure access, consumer protection and competition.

Chris Hemsley: We need to continue working closely with the two other principal regulators that tackle these issues—the FCA and the Bank of England—as we do today. We do that today with other technologies. We want the full framework to be turned on. With the FCA, we for example ensure that individual payment firms protect people’s money. You are absolutely right; in a world where people might not understand what a particular asset is, and its potential to reduce or substantially change in value, there is a really important role for the FCA in ensuring that firms are dealing with their customers properly. There is then a role for us in ensuring that the systems work, and that the rules are open, transparent and protect consumers, system-wide. The Bank of England ensures there is sufficient security and resilience, so that the systems actually work when we need them to, as we increasingly rely on them.

[Martin Docherty-Hughes]

Q Perhaps we could come back, Mr Hemsley, to the issue of stablecoin. Some countries have actually banned its use; the European Union, as we have heard from the markets in cryptoassets regulation, is going ahead, along with the United States in terms of the Commodity Futures Trading Commission and the Securities and Exchange Commission, both at state and federal level, with getting regulation in process.

I am glad to see that there is some regulation in the Bill, but you used terms such as “future-proofing”. With this technology, we bandy around terms such as “innovation” and “future-proofing”. What does that actually mean, in real financial terms? Frankly, it is not the type of language that I, as a legislator, would like to see used in regulation of a market. It is not just that it is unfamiliar; it does not seem like the correct kind of language or descriptives to use when we can have an impact, predominantly on consumers who might use these commodities and assets digitally. What do you mean by “future-proofing”?

Chris Hemsley: That is a very good challenge. I want to ensure that the full regulatory framework that we have in the UK is turned on and applies properly, so that we can manage consumer protection and competition risks. That is what I mean in terms of that definition. That applies particularly to how payment systems regulation works. We have some relatively broad definitions of what can be covered. The Bill helpfully clarifies that those broad definitions of where regulation can apply are sufficiently broad. The way that the regulation works is that it still requires the Treasury to issue a designation—the Minister issuing a designation of a system—and our statutory duties and checks and balances then kick in. It is shorthand. If I try a slightly more precise framework, you need to ensure that the initial definition is sufficiently broad, so that those subsequent decisions on if and how something should be regulated can apply.

[Martin Docherty-Hughes]

Q Forgive me, but you said there are similar issues. Frankly, there is nothing new under the sun. I am a fan of the technology, but it is the technology that has changed, not the issue. My concern is that these broad definitions, using terms such as “innovation” and “future-proofing”, do not give us the proper ability to scrutinise what is in front of us, because we are not talking about the reality on the ground. You face the same issues either in a fiat currency or a digital fiat currency.

Chris Hemsley: I agree with what you said. There are some familiar risks, and some new ones, that we need to be alive to. The fact that for the first time we could see the use of mass payment systems that are not linked to fiat is a new issue, and one that we need to manage.

I come back to an earlier point, which may help you to take decisions on the elements around definitions of what can be regulated. There is a series of gateways, almost: before something is regulated, it needs to fall within the definition of the Bill, and the Bill helps with that. There is then a test in the Financial Services (Banking Reform) Act 2013 that turns on the PSR’s powers: something needs to be designated by the Secretary of State for it to be regulated, and then our powers can apply. I want that to work. I want the definitions, the designation and our powers to work in this new context. I can see these new issues, as well as the familiar competition access issues that we have had to deal with in the past.

[The Chair]

I call Emma Hardy. You have five minutes.

Cryptoassets: Regulation

Martin Docherty-Hughes Excerpts

Wednesday 7th September 2022 Westminster Hall

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

I beg to move,

That this House has considered the Government’s regulatory approach to crypto-assets and currencies.

It is good to see you at least in the Chair, Ms Rees, and it is good finally to be here to talk about a subject that has produced an awful lot of heat and often little light in this place—that of the regulations on cryptocurrencies. I hope you will forgive me if I go on at some length about the issues that I think we have to debate in Parliament today.

We should start with a few pieces of accountability as, of course, we are not quite in the post-trust era. I am the chair of the all-party parliamentary group on blockchain, as well as being a vice-chair of the crypto and digital assets all-party parliamentary group. I see the chair of that all-party group, my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), in their place today. The latter group is a relatively new kid on the block as it was established just last year, whereas the all-party parliamentary group on blockchain has been around for some time.

Let me come to the first of many aspects of what we can see as a sort of cognitive dissonance around the idea of crypto. Despite the fact that we often talk about crypto as a new kid on the block, it is now a pretty widely accepted concept, even if a poorly understood one, and I am glad to see that we have interest in today’s debate from across the Chamber—at least, I think we have interest from across the Chamber. I hope we will hear a lot of interesting ideas about what the future holds, and I will add a couple of suggestions of my own towards the end of my speech. Given that this is the first debate in the House on the subject, we require something of a tour d’horizon of the landscape as it lies today before we move on to the challenges and some opportunities that recent developments provide for the future of crypto.

Before doing so, however, let me place on the record my gratitude to the secretariat of the all-party parliamentary group on blockchain, led by Professor Birgitte Andersen of the Big Innovation Centre. Her leadership in creating space within the all-party parliamentary group to allow many of the big issues of the day to be debated over the past few years has been vital, and the work put in by her researcher, George Farrer—and indeed by his predecessor, Fernando Santiago—to ensure that the topics remain current and relevant has been much appreciated.

Through the forum that the all-party parliamentary group provides, I was able to meet Dr Robert Herian, now of the University of Essex, and I am much indebted to the work he has done, particularly in his 2018 book “Regulating Blockchain”, which will provide the basis of some of the suggestions I make today. If Members are interested in the subject, they should buy a copy of the book. I am sure Dr Herian will be glad of the plug.

For a movement that is often described as a cult, it is apt that crypto even has its own origin story: it was invented on 31 October 2008 with the release of Satoshi Nakamoto’s “Bitcoin Manifesto”. However, as with much of the myth and legend around the subject, it is unclear whether Nakamoto is a single person, or indeed whether much of the work was singly their own, given that theoretical work had been done on different concepts of blockchains, going back to the early 1980s.

What Nakamoto’s manifesto did, however, was bring the technology to wider prominence. There was a ready pool of adherents in the immediate aftermath of the 2008 financial crisis, who understood the importance of decentralised finance and the potential to move beyond financial institutions as they have been conceived hitherto. Progress was slow but steady at first, but it picked up in the middle of the last decade with the release of books such as Alex and Don Tapscott’s “Blockchain Revolution” in 2016, which was my gateway into the possibilities of the technology. That was followed by exponential growth over the past few years, with the rocketing in value of not only Bitcoin but other cryptocurrencies such as Ethereum and the range of memecoins, which made up so many of the initial coin offerings that we saw around 2018-19.

All the way through, many have predicted a crash, but the pandemic lockdown saw crypto reach unforeseen heights, whether it was furlough cheques or the lack of faith in existing investment that drove the trend. The high watermark seems to have been in November 2021, when the value of one Bitcoin reached about $68,000. The ultimate symbol of the bubble may well have been the adverts during the American Super Bowl half-time break, with Hollywood A-listers such as Matt Damon and Larry David imploring us to buy crypto.

The Super Bowl ads were not just good at showing us what the bubble looked like; they probably go down as one of the supreme examples of what crypto’s contribution to our discourse has been: its unique culture. One had comedian Larry David decrying seminal innovations throughout history—the wheel, the toilet, the light bulb—before doing the same with crypto. “Don’t be like Larry,” the ad exhorted the watching millions, “Don’t miss out on the next big thing.”

FOMO, or fear or missing out—there are plenty of folk in this place who have that—has certainly motivated many to get into crypto, but so have a range of other acronyms that appear on the profusion of online crypto culture forums. I hate acronyms, as many of my colleagues know, but the one that struck me the most is HFSP—have fun staying poor. It is a motto that manages to encapsulate so much: the unscrupulous nature of so much of this mainly unregulated space; the background of so many crypto investors, cut off from access to the traditional markets; and the pervading millennial jokey humour.

I come to the first very important point at which more Government attention needs to be paid to crypto. The market has been allowed to proliferate, drawing in uninitiated small-scale investors, who begin crypto trading because they see only the upside: the market that lies beyond outright scams such as Squid coin or OneCoin, in which investments of dubious provenance have been hyped and pumped, attracting the hard-earned savings of so many people.

I represent one of the poorest constituencies in the country, West Dunbartonshire. I grew up in that community in the ’70s and ’80s and lived through what I believe was its ruination by Thatcherism. It is still a resilient community, but too many feel marginalised and remote even from our neighbour, the city of Glasgow. Many of my constituents are the type of people who have been caught up in the dubious practices around crypto, and I wish more could be done about it, especially as we head into the cost of living crisis. We need to remember that it is often those who feel they have nothing to lose who are the targets of scams.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I thank my hon. Friend for bringing this extremely important debate to Westminster Hall. Given all that he is saying, does he agree that consumer protection needs to be at the heart of a regulatory framework? We should highlight some of the good examples of innovative businesses, including in Scotland, such as Zumo in north Edinburgh and Scotcoin in north Glasgow, which are creating jobs in the industry.

[Martin Docherty-Hughes]

I do not disagree, but I will talk later about the reality of the existing regulation and how we should lead best practice.

It is important that regulation is able to make a clear delineation of where the legitimate business exists and outright scam cannot. Despite the halving of the value of Bitcoin since its peak in November, it remains at a price much higher than it held a few years ago. Although many will argue over the inherent value of crypto, the market remains remarkably buoyant, despite all that has happened.

Many of the challenges begin with the merest definitions involved in the whole business. As I said, I hate acronyms. All the DLTs, NFTs and CBDCs are confusing enough before we even get to the question of what crypto actually is. Is it an asset? Is it a technology? Is it an idea?

Another enduring problem of crypto, encapsulated in that Larry David advert, is its novelty: the idea that we have a genuinely world-changing thing before us. That idea falls apart immediately as it comes into contact with the real world. As an asset class, it has proven to be resilient neither to inflation nor to external shocks, never mind the fact that conventional and centrally regulated currencies have continued to attract a far larger interest as a holder of value in straitened economic times.

It has been difficult to keep up with the pretence of some of the more outlandish claims about the technology’s potential, as they struggle with the evidence of the past few years. International bank transfers, for example, are still cheaper, when taking into account the need to convert crypto into fiat currency. There remains a massive legitimacy problem given that the post-truth aspects of blockchain technology struggle when put beside existing institutions.

Even the idea of a decentralised and therefore more equitable structure has struggled against the demonstrable fact that so many cryptoassets remain in the hands of so-called whales—the few at the top who managed to get their timing right or to be there when the currency started. Far from being a novelty, the lived experience of the crypto bubble has reinforced the fact that there truly is nothing new under the sun. While so much of it remains a new arrangement of an old song, we hear riffs that echo debates that are being had outwith the crypto bubble; debates that have resonance in the fields of economics, sociology or computer science.

Solutionism is the idea that there is a clever, technological answer for all of life’s problems and that, somehow, human nature can be overridden with the application of the requisite solution. Crypto fits squarely in that space. One wag called it a solution in need of a problem, and a whole range of problems have been hastily set up to be solved by it. As we will see, that gets entirely in the way of the more durable and sustainable uses that it has.

Principal among those is the way in which many adherents seem to revel in the way that crypto offers the opportunity to turn the current logic of most of the internet on its head. The current logic is that we are offered free services in exchange for access to our metadata. Instead, this bold new vision goes, we should—or could—monetise these fractional shares of data, which we give back to, say, Facebook or Google. The value of popular tweets that we make could be released, as could that of those Instagram posts that have been gathering likes but no dollars. There is obviously not the same value to be released for everyone, especially a boring auld guy like me. [Interruption.] I am grateful for the support of my hon. Friends. There is a lot of doubt about how much that value would ever amount to, but the principal argument against this sort of future for crypto is that it adumbrates a dypstopia where every single aspect of our lives that could be monetised can be and where our maximum productivity can be released.

For many, including some in the House of Commons, that is the final step on the way to a new liberal utopia, where we know the price of everything, although the cynic in me thinks that we will miss out on the value of quite a lot. Given the way social media has descended into something of a mess, catering to what seems like a mixture of our lowest common denominator and our basest desires, I am not sure that giving human beings the ability to monetise absolutely everything creates a positive incentive.

This idea makes the assumption not only that the technology is the most efficient way to solve these problems, but that it is the most efficient version of itself. In speaking to those who have worked on the technical side of the crypto industry, it is remarkable how imperfect the technology itself is, mainly because it has humans involved in its creation. To take one example, coders make errors in one out of every 10 expressions, or every three lines of codes—code that is, of course, written in a way that reflects the biases of the person writing it.

In cryptocurrencies that seek to use the technology to incorporate smart contracts, and therefore programming languages, that opens up a whole range of exploits, with systems not working as they should and money being vulnerable to theft. According to one estimate, 5% of all decentralised finance—or DeFi—funds are lost in that way, which is especially problematic when most of those funds are uninsured.

The technical issues are dwarfed by the environmental impact of crypto, which is a truly vast problem that threatens to undo all the good that it could bring. Essentially, the technology inherent in most forms of crypto—nodes competing to solve puzzles to access coins—creates the incentive to use increasingly large, expensive and energy-intensive servers. Not only does that consume vast amounts of electricity—the equivalent of the annual energy use of Argentina, accordingly to legend—but it creates another brick in the wall of a crypto oligarchy, with the largest investors able to control far more of the servers and thus far more of whatever cryptocurrency is held there.

There are certainly workarounds, and I hope to explore some of that in my speech, but as we stand here today, looking at the landscape, it is not only another challenge that cryptocurrency advocates need to overcome but, added together with the other questions I have laid out, it becomes something more significant that needs to be addressed if they want crypto to become part of their daily lives.

Before I am accused of being too much of a negative Nancy, it is important to understand exactly where we are at the moment, because only by doing that can we better understand the potential for blockchain technology. Then we can focus better on the regulation that we need to bring in to ensure that it thrives. My biggest fear is that bringing in regulation means changing so much of the culture in the industry, and dialling down so many of the solutionist expectations of its adherents, that it may not be possible, but I am going to give it a shot.

It will be difficult to push back so much of interest that has been created in the crypto community and it is important to understand what is motivating these investors, many of whom are young or from non-traditional finance backgrounds, especially as we stare down the barrel of a cost of living crisis and the inevitable recession that will follow. Blockchain’s genesis, following the 2008 financial crisis, is central to this.

The possibilities for demystifying finance, and for allowing normal investors access to resources usually only available to those able to access corporate lawyers, is certainly within reach, if the capabilities of so-called distributed autonomous organisations—or DAOs—are realised, not only as an add-on for existing companies, businesses and commercial practices, but as a way of creating a new type of entity that can avoid the pitfalls of oligopolistic capitalism.

Blockchain’s birth as something of a libertarian project has obscured the incredible potential for the technology to improve government efficiency, clamp down on tax avoidance and increase accountability for those in public life. The best existing example of that can be found in the Republic of Estonia; I should probably add that I am chair of the all-party parliamentary group on Estonia. Estonia began a roll-out of blockchain in its governmental processes from the Ministry of Finance, and in doing so made all other Ministries reliant on the technology themselves and ensured that one of the central pillars of the social contract—the relationship between the taxpayer and the Government—was radically accountable.

As things stand, the necessarily slow pace of regulation means there is every incentive for individuals to stay a couple of steps ahead of regulation, exploiting loopholes and bending the rules as much as possible. They are of course supported by an industry of enablers and administrators who find ways for their clients to keep to the letter of the law while evading the spirit of it, although often not even succeeding at that. That means that Her Majesty’s Revenue and Customs is always playing catch-up, with any deterrence factor it represents always being ex post facto.

The radical solution offered by crypto is turning that calculation on its head, as Dr Robert Herian outlines in his book, “Regulating Blockchain”:

“Blockchain may offer an opportunity to recalibrate the power play between those who would engage in aggressive tax strategies and planning, and those charged with regulating or containing them by, for example, more effectively enforcing tax liabilities ahead of settlement on trust, rather than relying on bringing trustees to account post settlement.”

This is the essence of blockchain for good—an idea that the all-party group, of which I am chair, very much tries to promote: both individuals and the Governments they elect should be given the ability to hold third parties accountable in liberal democracies, and hopefully beyond.

In ensuring that crypto plays the role that it could, regtech—regulatory technology—will come increasingly to the fore over the coming decades. Given its traditionally attributed birthdate of 2008, we should note that crypto is now entering its third decade of existence, and I like to think that that could herald a new-found maturity. If there is something that we need to take from the recent crash, it is that the wild west days of crypto are over. Too many people have been affected, and too much is now at stake. The Government now have the opportunity to rein in the crypto bros and ensure they make good on their promises to investors, creating the environment for an industry ready to realise its potential.

In that spirit, I hope to make a few suggestions of my own about I think the Government should proceed. In the spirit of there being nothing new under the sun, which I touched on earlier, it is important to start with the Government and stakeholders understanding how much law is already in place to curb the worst excesses of a supposedly unregulated market. To quote Dr Robert Herian again:

“sandbox culture as the sine qua non of contemporary regulatory standoffishness at the state level has ultimately spawned the problematic regulatory conundrum with which we are now faced, one in which innovations and solutions have been legitimised.”

Quite simply, in pretending that they have no levers at their disposal, the spies and speculators who have proliferated all the way through our economic history have re-emerged in the guise of the crypto bros. The biggest step that the Government could take to redress the balance is to enforce the law that they already have.

Fraud is fraud—there are no two ways about it. The police are overwhelmed dealing with novel scams, but scams are what they are. Better training for those dealing with enforcement, and ensuring that they are able to work with those in industry who are ahead on best practice, is crucial. All of that cascades from an empowered and properly funded Financial Conduct Authority, which is not deliberately, as many have speculated, underfunded and under-resourced as a way of ensuring that many offenders slip through the gaps.

This situation has created many of the trust issues that crypto seeks to address: smaller-scale investors get stung by unscrupulous practices that larger entities can use an army of lawyers to protect themselves from. Although we could get into a long philosophical discussion about trust and the possibilities for post-trust, it is important to note that this aspect of crypto has not proven as transformational as many of its adherents promised.

The idea that Bitcoin and other cryptocurrencies would prove to be immune from inflation, speculation and the like has proven to be demonstrably untrue, as has the idea that a new form of stablecoin could come in as a forum of neutral exchange between the various types of crypto. The problems experienced, for example, by the Tether stablecoin demonstrate this. A simple solution whereby every dollar of the stablecoin is backed by a dollar of assets fell apart under the lack of accountability for the company’s owners, and the markets reacted in the way that markets usually do when promises are not met. In this place, vital to the functioning of any sort of crypto culture, the deliberate lack of trust—the post-trust aspect of the crypto stablecoin—came off worse after coming into contact with the entirely rational human instinct to need the sort of trust that has hitherto been provided only by institutions and, in this context, central banks.

My second proposal for regulation is therefore that the Government not only bring forward the regulation expected in the Financial Services and Markets Bill, but do their utmost to ensure that debates around that exceptionally important crypto development are able to be had in the House—and not only when the Bill is in Committee. The Bank of England published feedback on central bank digital currency proposals in June last year. It stated five core principles, the first of which is the most important:

“Financial inclusion should be a prominent consideration in the design of any CBDC.”

Paying heed to that core principle means the scales being tipped back away from the crypto whales, who are increasingly hoarding the new assets, in favour of the average investor, realising the potential that gave so many, previously excluded from the system, some hope that they could be part of it.

Similarly, the opportunities for Government to enable financial inclusion through the development of proposals for decentralised autonomous organisations are vital to ensuring that the benefits of access to stable digital fiat currencies can be extended to the broader commercial sector. I hope that company and contract law can keep pace with such developments in an inclusionary way. At the heart of that is, obviously, the Financial Services and Markets Bill. I hope the Minister will allow time in his remarks to elaborate on those aspects that may not come to the fore in the limited time that will be allocated to the new occupant of No. 11.

I have presented two solid, legalistic opportunities for the Government to regulate crypto, but I should also like briefly to touch on the opportunities that exist for the environmental impacts of crypto to be negated, with the creation of carbon-neutral data centres. It will come as no surprise to anyone who has paid attention to the renewable energy sector that the nation of Scotland is ultimately blessed with resources that should see us well placed to make the transition not only to a carbon-neutral future but—and forgive me for saying it—an independent, sovereign one.

However, thanks to the work of fellow SNP member Stuart Evers, we can see that Scotland also has the opportunity to become a hub for carbon-neutral data centres, which make use of three qualities that Scotland has in abundance: not only the technical expertise to provide new network security in large data centres, but the physical security offered by our natural landscape and the energy security provided by ready access to what are called dual renewable resources, whereby a primary green energy source is always backed by another green source should it fail. That is best accomplished by a combination of wind and tidal energy. Thanks to Stuart’s preliminary work, we can see that Scotland hosts a plethora of potential locations for such centres, primarily along our west coast and in the Orcadian archipelago. That is certainly not crypto-specific, but it is an important point to make when we think about the ways in which the benefits of a well-regulated and well-run crypto industry could be felt across these islands.

I appreciate that I have taken up quite a lot of the time allocated for the debate. I have set out three solid areas where this Government could legislate to better realise the promise of the crypto industry, but my primary objective was to ensure that there was, for the first time, a forum for debate on the many areas for regulation of the sector. I hope that I have provided a suitable introduction to the challenges and opportunities that exist in an increasingly fast-paced industry. I look forward therefore not only to the Minister’s remarks but to what hon. Members have to say about the potential they see in making crypto work better for everybody.

[Christina Rees (in the Chair)]

I intend to start the winding-up speeches at about 10.25 am, so if Back Benchers are kind to each other, there is no need to put a time limit on speeches.

--- Later in debate ---

[Alexander Stafford]

I thank the hon. Member for her intervention and for all the hard work she is doing on this subject. She is right: we need to get these business regulated more quickly. We cannot rest on our laurels; we need to get things going, although that applies to all business, whether crypto or not. The UK needs to encourage more businesses to establish themselves more quickly, and we should have the regulations in place to make the UK accessible.

This new Government must look at increasing the level of public education around cryptocurrencies. The most common crypto-related Google search query is, “What is cryptocurrency?” That is nearly five times more common than any other. The public—from the schoolyard to the retirement home—need to be educated about the risks and rewards of this new financial asset. As with all new technology or financial tools, there clearly are risks. According to Action Fraud, nearly £150 million was scammed and stolen through crypto-related fraud last year. Educating people is the only way to ensure sensible decisions.

That being said, there are significant rewards to be gained from crypto, including instant free transactions, which will help businesses deal internationally. Meanwhile Britons will be able to transact in new ways that were previously impossible: they will be able to pay their energy bills per unit used, have their hourly wages paid on the hour or have increased privacy when paying for goods and services. Britons must be shown that the benefits are there if they approach crypto sensibly, but they must also know the risks.

That being said, given that crypto ownership is already on the rise, we cannot rely on education alone. The estimates of how many Britons own some form of cryptoassets range from 5% up to 20%, with that number clearly increasing year on year. As well as educating the public, we must rethink the regulator’s approach to cryptocurrencies. As I mentioned, there are serious risks involved in investing in crypto, even with the so-called stablecoins, as we saw with the rapid decline of Terra earlier this year. However, the current system serves only to suppress British businesses, without offering enough protection to customers and consumers.

[Martin Docherty-Hughes]

Does the hon. Gentleman not accept, as I said, that fraud is fraud, and that if fraud is being done, it needs to be dealt with by the appropriate authorities? It is up to the Government to make sure they actually clamp down through existing legislation.

--- Later in debate ---

[Abena Oppong-Asare]

I support the hon. Member’s comments about Ukraine. I am not saying that using crypto should be scrapped, but the Government need to take more action to address the fact that there are issues related to the growth in fraud and in activity that is damaging to the UK. Too often, the Government have stood by and let firms responsible for these scams trade with impunity. They have continued to delay the introduction of stronger rules on the advertisement and marketing of cryptocurrency products. A survey by investment platform AJ Bell found that many crypto investors are simply unaware of the high-risk nature of their investments.

[Martin Docherty-Hughes]

I hope the hon. Lady agrees that, as I said in my speech, we have existing legislation that we should be pushing to the fore while we wait on new regulation. I take the point made by my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) about Ukraine and cryptocurrency in that state, but there is clearly a high rate of scamming in relation to the raising of cryptocurrency for the Ukrainian Government and their campaign against the Russian Federation. Sometimes, people might not be giving their money to Ukraine; they might be giving it to some scammer in North Korea, or in the Russian Federation, who says they are raising money for Ukraine.

[Abena Oppong-Asare]

The hon. Member makes an important point—he has expertise in the area—and there needs to be some sort of action from the Government to ensure that there is an overall strategy to address the issue. Some companies are doing good work, but they are not aware of the high risks, which links with what the hon. Gentleman has just said about the high rate of scamming. The high rate of scamming is worrying, particularly as many investors have sunk a huge proportion of their savings into crypto. Half do not have an individual savings account while four in 10 do not even have a pension. The serious collapse in crypto risks not only wiping out the life savings of many people, but significantly disabling the UK’s financial market. I am sure none of us wants that to happen.

The Government responded to their consultation on the regulatory approach to cryptoassets, stablecoins and distributed ledger technology in April, and there are measures to bring stablecoins into the regulatory perimeter in the upcoming Financial Services and Markets Bill. We will of course scrutinise the Bill carefully and look closely at what progress is being made through Parliament, but I have a number of questions to ask the Minister, particularly in relation to this debate.

Why have the Government introduced legislation relating only to stablecoins, and not a comprehensive regime for crypto more broadly? It is simply not good enough that they will not even consult on such a regime until later this year, as the stats show that urgent action is needed. If we do not have a comprehensive framework to address the risks and opportunities presented by cryptoassets, we risk falling behind our global competitors in the crypto space, including the US and the EU, which has just agreed a comprehensive regime for regulating the cryptocurrency industry.

How will the Government crack down on misleading advertising promotions, beyond regulated stablecoins? Members from across the House have discussed fraud today, and the Government need to take responsible action on it. I do not want consumers to be left to deal with it and take responsibility for it. Does the Minister accept that the Government have failed to address money laundering and fraud in this sector, and have allowed criminals to get rich at the public’s expense?

How will the Government ensure that enforcement agencies have the powers they need to crack down on digitally savvy criminals operating through electronic money institutions and cryptoasset firms? The industry is fast-moving at the moment, so does the Minister believe that there is the necessary capability and expertise in the Financial Conduct Authority and other agencies to deal with crypto? Labour is calling for greater powers for regulators and enforcement agencies to crack down on anonymity-enhancing technology, misleading advertising and the criminals operating in the crypto space.

The Government have ignored these serious and important issues for far too long, and the former Chancellor, the right hon. Member for Richmond (Yorks) (Rishi Sunak), seemed more interested in his NFT gimmick than a proper regulatory strategy. We still do not know the cost of that project, despite responses to parliamentary questions confirming that the Treasury holds that information. Perhaps the Minister can shed some light today on what that information is. The lack of transparency on how much taxpayers’ money has been thrown down the drain on that gimmick is frankly shocking, but hardly surprising from this Government.

A Labour Government would be serious about attracting fintech companies to the UK and safely harnessing the progressive potential of blockchain technology. To do that properly, we need thorough and thoughtful regulation of the sector, and I look forward to the Minister setting out how the Government intend to do that.

[The Economic Secretary to the Treasury (Richard Fuller)]

It is a great pleasure to serve under your chairmanship, Ms Rees. I join all hon. Members who have spoken in congratulating the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), first, on securing the first parliamentary debate on this topic and, secondly, on his tour de force speech covering the opportunities and risks of crypto technology. I expect that this will be the first of many debates on the subject.

During today’s debate, hon. Members have rightly focused largely on the risks of the new technology, concerns about consumer protection and areas for regulatory clarity, but I suggest that we all share the hope that, through innovation and creating the right conditions, we can achieve opportunities for the crypto industry in the UK to contribute largely to the growth of the wider economy.

I hope to cover a number a points that the hon. Member made in his opening speech. I will start with three of them: financial inclusion issues, particularly with regard to central bank digital currencies; requirements for carbon neutral data centres; and enforcing the existing law against fraud. I hope to cover those points in my speech, but if I do not, I look forward to engaging with him, the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) and her APPG in the future.

Throughout the debate we have spoken about a wide range of related but distinct terms, and I would like to take a moment to separate some of them. First, distributed ledger technology is exactly what it says: it is a form of technology that allows ledgers to be kept up to date despite being in multiple places or distributed. Secondly, blockchain is a type of DLT that uses encryption, adding security and new functionalities. That is the technology that underpins crypto, although it also facilitates innovation in many other sectors, such as trade finance. Thirdly, cryptoassets are privately issued digital assets that rely on distributed ledger technology such as blockchain for their workings and security. So-called cryptocurrencies are the most well-known cryptoassets today. I will use the phrase “crypto technologies” to refer to cryptoassets and the blockchain that underpins them in the round. Stablecoins are cryptocurrencies that seek to maintain a stable price by pegging to a real commodity or a currency, but there are other forms of stablecoins that have their supply regulated by algorithm. Again, there are two separate terms under that overall heading.

I and other hon. Members have mentioned the central bank digital currency, which is a form of digital money issued by central banks. CBDCs are structurally different from cryptocurrencies, which are almost always decentralised whereas CBDCs are controlled by a central bank. The Government have already committed to issuing a public consultation on this topic, jointly with the Bank of England, later this year.

A number of hon. Members pointed to the issue of financial inclusion. There has been no decision on the issuance or design features of a CBDC, or indeed whether we will do one. In those decisions, considerations about financial inclusion and accessibility of central bank digital currencies will be at the heart of any technical design decision. I hope that addresses one of the concerns raised by hon. Members.

In all its forms, we are still on the cusp of the technology breaking through, and its uses are likely to evolve dramatically in financial services. As hon. Members have said, thousands of cryptoassets, including Bitcoin, have been issued, and together these have a total market capitalisation of around $1 trillion today.

[Martin Docherty-Hughes]

There is so much value. Does the Minister recognise that this technology is not new? It has been around for nearly three decades.

Bank Branch Closures

Martin Docherty-Hughes Excerpts

Wednesday 16th March 2022 Commons Chamber

[Ms Qaisar]

I thank my hon. Friend and constituency neighbour for raising that important point. She has raised it on a number of occasions and I fully support her in all her comments.

While we are trying to become this more digitally inclusive and digitally literate society, there are projects going on in that regard. For example, in my constituency, a project funded by Connecting Scotland, a Scottish Government initiative, has been working alongside the community to help people to get online and into the digital age at Lorne Gardens retirement complex in Salsburgh. The project supplies elderly constituents with 200 digital devices and mi-fi boxes so that on Tuesday nights tenants can meet to share skills with an aim to building up relationships and increasing their confidence when using their devices. I am delighted that projects such as this are providing older constituents with vital digital skills that could be used for navigating online banking. However, this should not detract from the fact that many older people still ultimately prefer traditional methods of banking. The really important point about such projects is that they teach people transferable skills, because once they get online and are able to use digital banking, they can use those skills to navigate other websites—and maybe not become too addicted on online shopping.

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

In countries such as Estonia—I am delighted to be co-chair of the all-party parliamentary group—it is a constitutional right for all citizens to have access to the internet, and therefore the transition to the digital age is a far more equal process. Does my hon. Friend agree that this is something the United Kingdom needs to think about?

[Ms Qaisar]

I thank my hon. Friend for his contribution. As I said, if we are able to help people across all sections of society to get online, even in just one aspect such as digital banking, these are transferable skills that they can then use in digital literacy. That is absolutely key and it has to be an initiative for the UK Government.

Although the move towards digital banking is happening rapidly, it is vital that we as politicians, banks and Governments make a conscious effort to ensure that everyone is included in this process. While 46% of Londoners are using digital-only banking, this is far from the reality for people north of the border. The responsibility of ensuring that everyone across the country is financially included therefore falls at the feet of this Government. It is imperative that we do everything we can to ensure that no one is left behind.

[The Financial Secretary to the Treasury (Lucy Frazer)]

It is a privilege to respond to this debate on behalf of the Government. I congratulate the hon. Member for Airdrie and Shotts (Ms Qaisar) on securing her first Adjournment debate on an issue on which she has been vocal and campaigned hard. My hon. Friend the Economic Secretary to the Treasury takes the issue of bank closures very seriously, and he would have represented the Government’s position here today were he not on ministerial business abroad.

The hon. Member for Airdrie and Shotts talked about the importance of people going into banks. The reality is that the way that consumers engage and interact with their banks is changing, with increasing numbers using digital services to manage their affairs. It was interesting to hear her talk about her own experience and that of her generation in terms of how people are now accessing their money.

[Martin Docherty-Hughes]

The reality is that the experience of those states that have moved to a digital framework, such as Estonia, highlights the fact that this transition needs to recognise those who find it most difficult. Therefore, we need to be in a position where people who still use cash are able to do so whenever they need to.

[Lucy Frazer]

The hon. Member makes an important point. I will come on to the ways in which we are ensuring that those who need to access a physical location are indeed able to do so.

According to UK Finance, as of 2019, half of adults in this country used mobile banking. In the 12 months to February 2020, half of adults with a day-to-day bank account carried out their banking activities face to face in-branch, down from almost two thirds— 63%—just three years earlier. The Government want to ensure that people have appropriate access to banking services, and the transition towards digital banking brings many opportunities for individuals and businesses. It is our view that the Government cannot and should not seek to reverse the changes we are seeing in the market and in customer behaviour. Nor should the Government determine firms’ commercial strategies in response to these changes. Having the flexibility to respond to changes in the market is part of what made the UK’s financial services sector one of the most competitive in the world, and the Government want to protect that success.

Cost of Living Increases

Martin Docherty-Hughes Excerpts

Wednesday 16th March 2022 Commons Chamber

[Ian Murray]

My hon. Friend raises a critical point and we have to keep dragging the Government back to their responsibilities as a result of being in power. Much of the crisis in our public services, including the NHS and social care, also predates covid but the Government keep telling us that perhaps that is not the case.

Inflation hit 5.5% in January and is expected to rise even further. Scots are facing the prospect of council tax, water bills and train fares rising while wages, as I have said, are falling in real terms. Perhaps unsurprisingly, the Conservative party failed to back the fully costed plans of the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), to tax the oil and gas companies’ excess profits to reduce people’s energy bills. Instead, the Chancellor’s response to the crisis has been to make matters worse, not better. We have already heard about the buy now, pay later scheme using taxpayers’ money to lend money back to taxpayers via the energy companies that they will have to pay back on future bills. That is not helping; that is deferring the problem.

The Government have refused to exempt VAT on skyrocketing energy bills, which was supposed to be one of the much-vaunted Brexit dividends.

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

When the Minister winds up the debate, I wonder whether he will address the point that, as the hon. Gentleman rightly alludes to, part of the energy cost is pre-Ukraine. We left the European Union and its single energy market, which is detrimental to the rest of the UK.

[Ian Murray]

Those are some of the consequences that we start to see when the chickens come home to roost.

When the Minister responds, perhaps he can also clarify the Government’s policy on VAT on energy bills, because VAT is one of the most regressive taxes. By removing VAT on energy bills, the Government would remove a regressive tax that affects the poorest the most. I understand that if they remove the VAT, they help everyone, but perhaps it could be done temporarily and perhaps the £2.5 billion-plus, and increasing, that is taken from VAT on energy bills could be diverted to those who are required to pay higher energy costs.

There will be the largest tax burden since the 1950s, which is astonishing for a Conservative Government, and a more than 10% increase in national insurance, not just for working people but for businesses. We have a Conservative Chancellor who is high tax and the highest-taxing Chancellor in more than 70 years.

--- Later in debate ---

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

It is interesting to follow the hon. Member for Blackpool South (Scott Benton). It was nice to hear that he believes his Government are not doing well enough. We on the SNP Benches certainly agree with that, if not with everything in his speech.

Modelling carried out by the fuel poverty campaigners Energy Action Scotland on the impact of energy price rises in April suggests that 41% of households in West Dunbartonshire will be living in fuel poverty following the increases. Indeed, the front page of the Lennox Herald in my constituency has had the headline, “Families are turning down food because they can’t afford to cook”. This was a quote from the local food bank in Dumbarton, Food For Thought, which revealed that people in need are actually turning away meals because they cannot afford the energy required to heat them. At the beginning of the century, food banks were a rarity in our communities, but after years of the austerity-driven agenda from the Conservative Government that caused great hardship to vulnerable households while letting big business cronies and foreign owners off scot-free, they have become life rafts in a sea of inequality.

My right hon. Friend the Member for Dundee East (Stewart Hosie) alluded to the 1970s, which some of us are old enough to remember, as well as growing up in the 1980s. It is woeful in this day and age that anyone should consider that people now turn off their washing machines and wash their clothes and bedlinen in cold water, or would use a brush and a pail rather than a Hoover. It seems absolutely ridiculous. I remember a single-parent family who had to do the exact same thing. They were lucky that they had family who could help them with that impact of the aggressive politics of the British Conservative party. How my father, as a single parent of four kids—one of them profoundly disabled; he never made to adult life—got through it, I have no idea. But all is not lost for the Government. They need to take urgent, real action before the irreparable damage that was done in the ’80s is foisted yet again on households such as those in West Dunbartonshire—indeed, across the whole of the UK. Introducing immediate emergency cash payments would make a difference for many households and save many from falling into hardship. It is the right thing to do from a moral point of view but also from an economical point of view.

While much attention is quite rightly focused on rising energy costs, there are other factors impacting on the cost of living that need to be addressed. Colleagues have alluded to them and will continue to do so, so I will raise just two factors and how they are affecting my own constituency caseload. My office has been inundated by families who, despite working, rely on universal credit to help make ends meet but who are now desperately calling for further help. The Government’s callous £1,040 cut for millions claiming UC in the middle of a cost of living crisis has had a devasting impact on these families, and the further price increases are leaving them vulnerable, scared and, indeed, impoverished. The Chancellor’s autumn Budget announcements barely tinkered around the edges and will not come close to compensating for the cuts to universal credit.

The UK has one of the lowest sick pay rates in the OECD. The current rate of £96.35 per week is wholly inadequate, and one in five workers is not eligible for it. The specific groups most likely at risk are women and those in insecure work. The UK Government must surely believe that increasing statutory sick pay in line with the real living wage, and removing the threshold and extending it to 52 weeks instead of 28, is long overdue given the traumas of so many during the pandemic.

If the Chancellor needs any pointers on how to tackle this issue, we need only cast our eyes to the Scottish Parliament and its Government, and the priorities that they are setting with the limited powers of devolution. In many areas where the Scottish Parliament has devolved powers, Scotland enjoys lower than average costs compared with those in England and Wales, be that average household water charges, council tax bills or rail fares. The Scottish Government are delivering their game-changing child payment, one of five family social security benefits, and unique in the UK. I say “social security” because it is not a hand-out: we pay for it; it is what socially progressive Governments do. That will double in value in April, impacting immediately on 110,000 children in Scotland. The Scottish Government are also committing more than £3.9 billion for social security expenditure in 2022-23, providing support to more than 1 million people; that is £360 million above the level of funding to be received from the UK Government. It will help low-income families with their living costs, including heating, and enable disabled people to live full and independent lives; it will pay for the new adult disability payment.

Those are just some of the actions taken by the Scottish Government, who care for the people they govern: a Government who are serious about tackling the inequalities that exist in our country—systemic inequalities founded in the traumas of the ’70s and ’80s —and who want to create a fair and better country for all.

The Scottish Government can only do so much at the moment with the limitations of devolution, but with the full powers of national self-determination delivering independence they can deviate from both the previous courses of British Governments and the present Government, who have never worked for the people of Scotland, as well as the people of England, Wales and indeed Northern Ireland.

As I have said, serious times call for serious measures and I, like my constituents, have no faith that the UK Government are able to, or capable of, delivering them.

[Several hon. Members rose—]

Downing Street Parties: Police Investigation

Martin Docherty-Hughes Excerpts

Tuesday 25th January 2022 Commons Chamber

[Michael Ellis]

As I said in this House last time, the Prime Minister is going nowhere.

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

Last night, the food critic Jay Rayner, quoting the late, great Julia Child, said

“a party without cake is just a meeting. Johnson’s staffers supplied a cake. Ergo, it was a party.”

Does the Paymaster General agree not only with Jay Rayner, but with the late, great Julia Child?

Downing Street Garden Event

Martin Docherty-Hughes Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

The Prime Minister has personally thanked all of those who have worked to protect people during this pandemic and will continue to do so. He has visited hospitals, spoken to medical professionals—doctors, nurses, scientists—and to those directly involved and has repeatedly thanked them. He feels that thankfulness from the bottom of his heart. He himself was served at St Thomas’s Hospital by medical professionals who helped to save his life when he was admitted to intensive care. He knows this at first hand.

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

As of yesterday, across Clydebank, Dumbarton and the Vale of Leven, 300 men and women—my constituents—have died of covid-19. Most were intubated, the vast majority were alone, and many were without access to the burial traditions of our ancestors. I ask the Paymaster General whether they agree that if a Tory party in Downing Street took place during a global public health emergency, and if the Prime Minister participated and/or sanctioned it in any shape or form, and if senior members of the British civil service in Whitehall did the same, or were even invited and did nothing to advise against it, that is a fatal blow not only to the Prime Minister’s premiership but to the independence and impartiality of the civil service in Whitehall?

[Michael Ellis]

It is not appropriate to prejudge. The hon. Gentleman wishes to prejudge what occurred. We will await the outcome of the investigation.

Downing Street Christmas Parties Investigation

Martin Docherty-Hughes Excerpts

Thursday 9th December 2021 Commons Chamber

[Michael Ellis]

It is certainly true, as a matter of geography, that No. 10 Downing Street is a very large property with a multitude of offices and with many, many people working inside it. In that sense, of course—geographically—my right hon. Friend is absolutely correct.

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

On 16 December, on national television, the Prime Minister asked everyone to exercise

“the greatest possible personal responsibility.”

London also went into tier 3 restrictions, which stated:

“No person may participate in a gathering… You must not have a work Christmas lunch or party,”

whether it was in an office or in somebody’s flat upstairs.

On 18 December, Dr Katherine Henderson of the Royal College of Emergency Medicine stated on the BBC:

“We are at a really dangerous point which could tip into finding it incredibly difficult to manage.”

The same day, 514 people died of covid-19. I am sure the NHS and those in care homes were already over the tipping point.

On 18 December, the Prime Minister stated:

“If you are forming a Christmas Bubble, it’s vital that from today, you minimise contact with people from outside your household.”

The evening that statement was given by the Prime Minister in Downing Street, a Christmas party was held in No. 10, where officials knocked back glasses of wine during a Christmas quiz and a secret Santa. I wonder whether the Paymaster General agrees with me that if something looks like a duck, walks like a duck, quacks like a duck and it is at a Christmas party, it is usually a duck.

Draft Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2021

Martin Docherty-Hughes Excerpts

Wednesday 8th December 2021 General Committees

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

It is good to see you in the Chair, Mr Davies. I have a few points for the Minister. It was interesting that they wanted to be clear that the checks were not required before we left the European Union. That is a basic reality. I wish to draw clarity with the OBR’s statement that, so far, the data we have seen on the impact of Brexit, especially taking into account the fact that the new trading arrangements came in in January, is broadly consistent with previous assumptions that our long-run GDP would be reduced by around 4%. That is double the impact of covid on the economy.

It was notable that the Minister utilised the terms “Great Britain” or “UK”, but when she mentioned Northern Ireland in relation to the protocol, she did not mention the fact that it has full access to the single market and has seen an increase in trade with the rest of the European Union, while the rest of the UK has seen a dramatic decrease. I bring to the Minister’s attention the points made by the National Farmers’ Union in Scotland that the UK Government’s decision to further delay the introduction of border controls on imports from the EU is, at least from their perspective, a

“bitter blow to Scottish farmers”.

Will the Minister accept the OBR’s statement, recognise the improvement for Northern Ireland from its full access to the single market, and recognise the grave concerns held by farmers in Scotland?

--- Later in debate ---

[Lucy Frazer]

I am happy to answer that point and those made by my right hon. Friend at the same time. We need to bring in the checks, as well as the staged controls, which we committed to in January, because we are required to do so for customs in the round under the terms of our arrangements. I was addressing the element of security risk. As we are simply maintaining the status quo, there is no additional risk in continuing that arrangement.

I will touch on border security more broadly in terms of migration. Border Force regularly reviews its capacity, plans and resources, and it deploys and recruits staff when necessary to maintain border security. The reason why we are not bringing in and extending those arrangements at this time is simply to do with timing and the disruption that has hit businesses so far.

The hon. Member for West Dunbartonshire mentioned a whole range of issues that really relate to Brexit as a whole. That decision has passed; we have left the EU and we are now dealing with the arrangements that we need to bring in as a result of that decision.

[Martin Docherty-Hughes]

The Minister must recognise the point made by the OBR. Also, GB may have left the European Union, but Northern Ireland has full access to the single market.

[Lucy Frazer]

As the hon. Gentleman knows, one of the arguments put forward at the time of the referendum was about the opportunity to trade not only with the EU, but outside the EU. He will know that we have entered into more than 60 trade agreements with partners across the world, and that trade with those countries is encouraging. For all those reasons, I comment the draft instrument to the Committee.

Question put and agreed to.

Conduct of the Right Hon. Member for Uxbridge and South Ruislip

Martin Docherty-Hughes Excerpts

Tuesday 30th November 2021 Commons Chamber

[Bim Afolami (Hitchin and Harpenden) (Con)]

This has been an interesting and fiery debate. I have listened carefully to every contribution. It has fundamentally been about the approach to governance; the conduct—not the character—and actions of the Prime Minister; and the principles of public life.

When I think about those principles, I think of words, which Members have read out, such as accountability, leadership, probity and transparency. We all agree with those things, but we have to then think about how they are translated in one’s conduct and actions. I put it gently to SNP Members that working hard for the people who elected us is a pretty good way to put in place the principles of accountability and leadership.

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

Will the hon. Gentleman give way?

[Bim Afolami]

No, I will make some progress.

Let us look at the contrast between what the Prime Minister is doing and what is happening in Holyrood. There is a new covid variant. We do not know how serious it will be, but it is right that we should be watchful. The economies of the United Kingdom and of Scotland are on the brink of recovery. In the face of that, the SNP’s priority is an independence referendum. Is that working hard for the people who elected it, bearing in mind the challenges that exist?

--- Later in debate ---

[Alexander Stafford (Rother Valley) (Con)]

I rise today on behalf of the people of Rother Valley to put on the record our strong and unwavering support for the Prime Minister and the transformative work he is doing for our communities and areas like ours across the north and the midlands. There is no doubt that this Prime Minister gets things done. I have been very disappointed by the tone of the debate. SNP Members, in typical SNP fashion, snipe from the sidelines—they are literally doing it now—and make wholly unsubstantiated claims for purely political gain. This Prime Minister, however, focuses on the job at hand of levelling up for everyone. It is clear that he is radically improving public life. To prove that, my constituents would point to a panoply of evidence.

First, and very importantly for those on the Conservative Benches and the people of the country, this is the Prime Minister who got Brexit done where others failed. He achieved Brexit when we were told that we could not leave and there was no deal that we could make. Despite that, he overcame the gridlock and delivered on what the people wanted, Brexit, which was no easy feat. He secured a deal that everyone else said was impossible and negotiated an unprecedented free trade agreement with the European Union, which no other country in the world enjoys. Crucially, he achieved a full and complete Brexit: not some Brexit in name only which was advocated by many of the liberal elite, but a full and proper Brexit.

[Martin Docherty-Hughes]

Will the hon. Gentleman give way?

[Alexander Stafford]

On Brexit, of course. I love Brexit.

[Martin Docherty-Hughes]

Given that Northern Ireland now has access to the single market as part of the island of Ireland and voted to remain within the European Union, why has Scotland not been offered the same opportunity?

[Alexander Stafford]

I am a bit unsure about the hon. Gentleman’s point, because the United Kingdom as a whole voted for Brexit, including a large number of people in Scotland, lest we forget—an awful lot of people. I think we should all obey the will of the people. As we have already established, when we talk about standards, SNP Members do not like listening to the will of the people, whether on Brexit or independence. They are having their cake and eating it.

Another aspect that my constituents—even SNP constituents—care passionately about is the roll-out of the fastest vaccine programme in the world under this Prime Minister. By taking the brave choices and backing myriad horses, almost nine in 10 people aged 12 and over have now received a first dose of the vaccine. Undoubtedly, the Prime Minister’s actions have led to the saving of thousands upon thousands of lives.

The Prime Minister has placed great emphasis on inventing and manufacturing vaccines here in Britain. We must recognise the Prime Minister’s foresight in placing bets on multiple vaccine options, in over-ordering doses, in ensuring the provision of boosters and in backing our British scientists and companies. Not only that, but we have provided vaccines to the rest of the world, leading the way at the G20 on vaccine donation, committing 100 million doses, including the entire Janssen UK supply and half of the UK Oxford-AstraZeneca vaccines for countries in need.

Turning to Rother Valley, this Prime Minister has the backing of Rother Valley and is delivering for it. There is his support for the green industries of the future, with visible Government support for ITM Power and Government measures to protect Sheffield and Rotherham steel.

We have heard about the levelling-up fund, from which Rother Valley was pleased to get £11 million. Contrary to what SNP Members claim about the funding going to well-off areas, £4.5 million of that went to a town that they may only have heard of called Maltby. It is one of the most deprived parts of the country—in fact, it is in the lowest 5% for poverty in the entire country. I therefore believe that people there should get that funding. It is right.

The Prime Minister has listened to the people of Rother Valley and scrapped the HS2 2b arm, which is great. The area has received much coronavirus support throughout, including from bounce back loans and the like. On top of that, the Government are delivering the biggest increase in police numbers in 10 years. Government funding and the police precept will mean that, by 2022, police numbers in South Yorkshire will rise by 228—[Interruption.] Despite what SNP Members may be chuntering—there are not many of them, admittedly—by 2023, there will be more police than there were in 2010, so we are overdelivering.

Let us look at the evidence for why the people back the Prime Minister. I point to the local election results in Rotherham this year: the last time we had election results, we got a grand total of zero Conservative councillors, but this time in May, we had 20. That is the biggest increase of any council in the country and the most Conservative councillors that have ever represented Rotherham. In Rotherham, that bastion of socialism since time immemorial, Labour came within 94 votes of losing their majority. If that is not a backing for this Prime Minister, his way of doing things and getting things done, and his action, I do not know what is. Surely the test of all politicians is election results and, in May this year, the electorate gave its resounding support to the Prime Minister.

I believe that this House offers its full backing to the Prime Minister, and that Rother Valley and those areas that need levelling up support him to get things done.

--- Later in debate ---

[Pete Wishart (Perth and North Perthshire) (SNP)]

This has been some debate. I have to say at the outset that I did not think our modest little motion would trigger Tory Back Benchers in the way it has done. There have been some amazing speeches in response to what we put forward, in a very reasonable motion about the behaviour and conduct of the Prime Minister. I wish to discuss their speeches, because some of them were truly fascinating and I want to go into some of the details.

First, however, I wish to congratulate my colleagues on some outstanding contributions. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) was absolutely right to highlight and list that litany of sleaze and corruption. He reminded us of the Nolan principles of public life. He was right to use the “L” word. I have been 20 years in this House and it has not become commonplace for that to be used here, but today it is the only word that is appropriate—no other alternatives can be found. It is the only way we can describe some of the Prime Minister’s conduct. The Chairman of Ways and Means was absolutely right to make her ruling today because there is no other way to describe what the Prime Minister has said to this House. I am reluctant to use the word, as I have been in this House so long, but lie it is.

There were some great speeches from my right hon. Friend the Member for Dundee East (Stewart Hosie); from my hon. Friends the Members for Coatbridge, Chryston and Bellshill (Steven Bonnar) and for Airdrie and Shotts (Ms Qaisar); from my hon. Friend the Member for Midlothian (Owen Thompson)—that was a fantastic speech; from my hon. Friends the Members for Motherwell and Wishaw (Marion Fellows), for Paisley and Renfrewshire North (Gavin Newlands) and for Kilmarnock and Loudoun (Alan Brown); from my hon. Friend the Member for Aberdeen South (Stephen Flynn), whose toddler I would rather have addressing the CBI than the Prime Minister any day; from my hon. Friend the Member for Gordon (Richard Thomson); and from the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts).

Then there were the Conservative speeches. Well, Madam Deputy Speaker, where do you start? First, Conservative Members come here and tell us that we should not be debating this motion and should be debating something else. They said exactly the same thing the previous time we had an Opposition day. Perhaps we should ask the Leader of the House for permission and to tell us exactly what we should debate on our own Opposition days. What a hard neck Conservative Members have: they pockled half a day from our Opposition day so that they could discuss the wearing of face masks in England. If they do not know what pockled means, let me tell them: it means misappropriating, taking away and stealing, which is exactly what they did today.

I thought we were doing Conservative Members a favour: I thought they would all be queuing up and jumping over each other to get to their feet to defend the Prime Minister and tell us what a wonderful character he was, about all his attributes, that he was the most honest man in the world and that he was corruption and sleaze-free. But none of them did it—not one. [Interruption.] There was one, and I think somebody else might have mentioned just how valuable the Prime Minister is to them, but none of the rest of the Conservative Members were even going to prepare to start to defend their Prime Minister. They wanted to talk about absolutely everything other than what the motion is about. They tried to get us to talk about everything else other than the motion, but let me tell them that although they think it is unimportant, it will be their downfall.

Conservative Members actually believe their own rhetoric and that nobody cares about Tory sleaze and corruption, but it is all anybody is talking about. Why do they think their opinion poll rating has dropped by something up to eight percentage points? It is not because the SNP is not debating education or health; it is because Conservative Members are mired in a sleaze and corruption scandal on the scale of those in the 1990s. That is the reality of what people are discussing the length and breadth of the country and that is why their ratings are falling.

[Martin Docherty-Hughes]

rose—

[Pete Wishart]

This is the only time I am giving way.

[Martin Docherty-Hughes]

I am very grateful to my hon. Friend. The Intelligence and Security Committee stated recently:

“Russian influence in the UK is the new normal. Successive Governments have welcomed the oligarchs and their money with open arms, providing them with a means of recycling illicit finance”

and with

“connections…to UK companies and political figures.”

That is corruption at the heart of the British Government, is it not?