Economy Update

Nigel Mills Excerpts

Wednesday 16th June 2021 Commons Chamber

[Steve Barclay]

It is slightly odd to criticise me when I am literally in the Chamber answering the hon. Lady’s question. The point is that there has been a comprehensive package of support for those on the self-employment income support scheme, which has been further extended. Many of those who were of most concern to colleagues on both sides of the House in earlier debates have come into scope of those schemes as we have gone through extensions, and I understand that my colleague the Financial Secretary has met groups to hear representations on these issues.

[Nigel Mills (Amber Valley) (Con) [V]]

I welcome the measures announced today to help business tenants resolve any arrears disputes with their landlords. Does the Chief Secretary think that money could be found for a similar scheme for residential tenants who have gone into arrears with their landlords, to help to contribute to clearing those arrears so that tenants can have a fresh start once the pandemic is over?

[Steve Barclay]

Today’s announcement clearly pertains to commercial rents. Of course, colleagues continue to listen to Members from across the House on other issues as they arise. I am very happy to have further discussions with my hon. Friend.

Financial Services Bill

Nigel Mills Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[Dame Margaret Hodge (Barking) (Lab) [V]]

I will speak about new clause 4, which is in my name and those of others from across the House. I start by thanking Sue Hawley and Spotlight on Corruption for their support in our work.

Historically, Britain has prided itself on offering honesty and integrity, particularly in financial services, but, tragically, the Government’s actions and inactions have helped to breed an environment where fraud and corruption flourish. Today Britain is the jurisdiction of choice for too many villains and kleptocrats. The National Crime Agency estimates that £100 billion is laundered through Britain annually. The recent FinCEN leaks named 3,267 UK-incorporated shell companies and nearly £70 billion flowed from Russia into the UK’s overseas territories. The banks and those who run them often get away scot-free if they turn a blind eye to dirty money or engage in fraud.

New clause 4 would provide law enforcement agencies with a powerful tool in their fight against money laundering and fraud. A new criminal offence would hold individuals, corporations and their directors to account for either facilitating or failing to prevent economic crime. The argument is overwhelming; everyone agrees that the existing powers are weak and ineffectual. We need criminal as well as regulatory powers.

A new offence would provide both an effective deterrent and stronger consequences.

We are way behind our international competitors. We pursue small businesses and let the big banks and well-heeled bankers off the hook. The British public hate feeling that there is one law for the powerful institutions and their leaders and another for the rest of us. As we build Britain outside Europe, it is foolish and wrong to think that we can create a sustainable and strong finance sector on the back of dirty money and fraud. Losing our reputation for integrity will over time damage our prosperity, so we have to clean up our act, and clean it up now, not promise to do so some time in the future.

It is shameful to find that America is more effective at pursuing corporations and their directors than we are. Let us consider Standard Chartered, a British-headquartered bank. In 2019, it was fined for money laundering failures and breaching sanctions—£102 million in the UK, but £842 million in the USA. In both the LIBOR scandal and the subsequent rigging of foreign exchange rates, most of the outrageous behaviour took place here in the UK, but most of the fines were imposed in the US. In 2019, the US dished out £1.67 billion-worth of money laundering fines. We took less than £300 million. The Government may want to promote outsourcing, but does that really mean we want to outsource enforcement to the Americans?

That is why the director of the Serious Fraud Office has called for corporate liability reform. Last October, she said:

“So, what would be on my wish list for the SFO, if I had a magic wand?

Unsurprisingly, a ‘failure to prevent’ offence still tops it.”

I agree, and I agree with the Financial Times comment, after the Barclays fraud case failed, that,

“the bank could not be held accountable for the actions of the chief executive, but neither could the chief executive be accountable for the actions of Barclays.”

Is that really what the Government want? The right hon. and learned Member for Kenilworth and Southam (Jeremy Wright) described the LIBOR scandal as demonstrating,

“weaknesses in our current law”,

and noted the

“clear implications for the reputation of our justice system.”

The Minister is wrong: when the Government called for evidence on a new corporate liability offence, three quarters of respondents urged the Government to toughen up the regime with criminal sanctions, and most of those were private companies and law firms. Why are the Government reluctant to act? They promised action in their 2015 manifesto. They took forever to complete a consultation and now they are parking the proposal with the Law Commission. Why? The House should not need to divide on this issue. Most people strongly agree with our proposal. If Ministers kick the proposal into the long grass, they will anger the public, damage the long-term integrity and reputation of our financial services sector, and fail to build a better Britain. I urge support for our new clause.

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the right hon. Lady. I want to speak in support of new clause 4, and I will start where she finished by reminding the House that this was a manifesto promise of the Conservative party back in 2015. We said that we would introduce criminal sanctions for failure to prevent economic crime. We got as far as introducing sanctions for bribery and tax evasion. What those two measures have shown is that these “failure to prevent” rules actually work: they do crackdown, they do change behaviours and they do stop businesses allowing their staff to carry out the activity or turning a blind eye to it. When the main counter-argument is that these regulations would be too expensive or too hard to implement, we have to understand that the world has carried on with those two powers in place; that is not a compelling argument for not extending them to the rest of the economic crimes as this clause would do. Most economic crime around bribery or tax evasion includes some money laundering as well, so all that we are really doing is tidying up the rules to make sure that they are consistent across the piece.

I think that it is probably fair to say that, since we made that manifesto promise, we have been a little busy on other matters, but now we are through most of those it is time to get back to delivering on that promise. I suspect that we will not convince most Members this evening to accept this new clause, but, hopefully, when we see the Law Commission review later in the year, we can then make some rapid progress on getting our law to the right place.

The Minister said at the start of this debate that the Bill was a part of our taking back control following Brexit, that we will try to make our regulations world-leading and that that was our aspiration. Surely as we embark on our vision of global Britain, we should make it very clear that our values are to be the cleanest financial services sector in the world—not the dirtiest, not a magnet for dirty money, and not one that tolerates any kind of bad behaviour. We need the powers in the new clause so that we can say clearly to the whole world that this behaviour is not tolerated here and that we will go after not only those who behave in that way, but those who allow it to happen: we will go after those businesses that seek to profit from allowing their staff to behave in such a way. That is the kind of vision that a global Britain should have—more beacon than buccaneer in this kind of situation.

Finally, if we are really after world-leading regulation in this area and setting an example, I personally would support more divergence. That is one reason why I supported Brexit, but I am not sure that the best place to start diverging is by not following the EU’s anti-money laundering rules. Last month, it introduced its sixth anti-money laundering directive, which included the requirement that member states take criminal sanctions for failure to prevent money laundering. We did not opt into that directive before the end of the transition period. I would have thought that, as a signal of goodwill when we want the EU to recognise our financial services regulation, it would be a good thing to adopt. It is the right thing to do. It is the right measure. It is one that, given the size of our financial services industry, we should be leading on, not following. Let us not make that our first divergence. Let us introduce these rules. Let us pass this new clause and have real powers in place which we need to tackle this awful economic crime.

[Several hon. Members rose—]

Future Relationship with the EU

Nigel Mills Excerpts

Thursday 10th December 2020 Commons Chamber

[Penny Mordaunt]

Clearly, the information on tariffs has been published. It is on gov.uk, but I stress to the hon. Gentleman that we are working to secure a deal that is in the best interests of our farmers, our hauliers, our businesses and our citizens, and we will continue to do that until all hope is exhausted.

[Nigel Mills (Amber Valley) (Con) [V]]

Would my right hon. Friend accept that even if a deal is done now, it will be very late for businesses to have a chance to understand and interpret it? Will she therefore urge the EU to go further than in the announcement that it made this morning and mirror our proposals not to impose the full import formalities for a period of six months to give a period of time for business to understand and get used to the new rules?

[Penny Mordaunt]

I thank my hon. Friend for that suggestion. I think it is in everyone’s interests if a pragmatic stance is taken on all these issues. That has, by and large, been the case to date. We should continue to do that as we go into the new year, no matter what the outcome of the future relationship.

UK-EU Future Relationship Negotiations and Transition Period

Nigel Mills Excerpts

Monday 7th December 2020 Commons Chamber

[Penny Mordaunt]

I am sure that the hon. Gentleman has done his homework and done his best to help his constituent. I do not know whether he has used the toolkit that was sent to his casework team on, I think, 26 November—[Interruption.] Okay. That will give contact details for him to get in touch with officials who are standing ready to talk to businesses to give them the bespoke advice that many of them will need. If he wishes to pass the details of the company to me after this, I will ensure that the relevant official can speak to them—I mean this very genuinely; I am not trying to get one over on him. We are making every effort to ensure that all Members of the House have the information that they need if people need further help than what is on gov.uk and the webinars and so forth that are going on. We want to ensure that every business is supported in these efforts and, if he passes me the details, I will ensure that his constituent is.

[Nigel Mills (Amber Valley) (Con) [V]]

What does my right hon. Friend say to those on both sides who seem to believe that now is not the best time to make a deal and that perhaps it will be better to come back next year when a better deal could be done? Surely that is ridiculous and this is by far the best time for a deal. It is pretty much now or a long time in the future.

[Penny Mordaunt]

I am tempted to say no, no, no. I think my hon. Friend makes a very good point. We know that delaying negotiations—extending the period of negotiations—is not a possibility now, but it is also the wrong thing to do. We need the focus and resolve for both parties to come together and agree a deal. It is very clear what that needs to look like from our point of view, but the negotiations are still continuing and I remain optimistic.

Spending Review 2020 and OBR Forecast

Nigel Mills Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

Those in the public sector who earn less than £24,000, which is the UK national median wage, will receive a fixed increase of at least £250. That is 2.1 million people—38% of the workforce. [Interruption.] Well, it will depend on each worker’s exact salary, but there will be a fixed increase of £250 for all of those 2 million workers.

[Nigel Mills (Amber Valley) (Con) [V]]

I welcome much of the Chancellor’s statement, and look forward to sending him the bid for the Ripley-Codnor bypass. Is he able to offer any encouragement to the supply chain of the hospitality industry? He is supporting the restaurants and pubs that are closed, but not the important businesses that supply them and also cannot trade because they have no customers to sell to.

[Rishi Sunak]

Obviously those businesses will be able to use the generous terms of the furlough scheme for their staff through the winter period. The more than £1 billion of funding that we made available to local authorities before the start of the latest national restrictions was also to support businesses and local economies in the way that authorities saw fit throughout the winter period. That funding is available at a local level, perhaps to do some of the things that my hon. Friend mentioned.

Future of Financial Services

Nigel Mills Excerpts

Monday 9th November 2020 Commons Chamber

[Rishi Sunak]

Sovereign gilt issues will remain a reserved competency, but one of our hopes is that creating a sovereign green bond market will catalyse a domestic green bond market, as we have seen elsewhere, which would provide a benchmark for private companies to issue private green credit. I hope that will provide more capital for more companies in every part of the UK.

[Nigel Mills (Amber Valley) (Con) [V]]

I thank the Chancellor for his statement. Does he agree that our financial system should also be the cleanest in the world and free from dirty criminal and corrupt money? Would he look further at the failure to prevent economic crime across our financial sector?

[Rishi Sunak]

My hon. Friend has focused on that issue for as long as I have been in this House—and rightly so. He will know that we passed the Sanctions and Anti-Money Laundering Act 2018 the year before last, and in the Budget we said we would consult on introducing an economic crime levy that would provide additional funds to combat the scourge of crime in our financial system. My hon. Friend the Economic Secretary will be outlining further measures on market abuse in the debate on the Financial Services Bill.

Areas with Additional Public Health Restrictions: Economic Support

Nigel Mills Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

The hon. Lady says that there should be a package for the Liverpool city region of £700 million of additional funding. That would equate to over £23 billion if applied evenly on a per head basis across England. It is important that we are proportionate. Of course, the £7 million is not in isolation; it sits alongside the many other things that have been announced, including £130 million of un-ring-fenced funding to the Liverpool city region in March; but I am happy to continue to work with colleagues across the House in considering our wider response.

[Nigel Mills (Amber Valley) (Con)]

May I return to the sectors that are effectively closed by the lockdown rules? Will my right hon. Friend ensure that when the Chancellor is looking at what support he can give, he thinks about companies in the supply chains to those sectors, which have lost all their orders but so far have not had the benefit of some of the help, such as the business rate reliefs?

[Steve Barclay]

One of the difficulties when people talk about extending the furlough is that those supplying particular sectors do not simply supply one sector; they usually supply across sectors. In the wider discussion about extending the furlough, not only is there the question of how long, because we do not know how long it will be until a vaccine arrives, but it is often unclear from those seeking an extension which sectors it would apply to and how it would apply to the supply chains of those sectors. The reality is that people do not simply supply one sector; supply chains reach across many sectors.

Covid-19: Economic Package

Nigel Mills Excerpts

Tuesday 12th May 2020 Commons Chamber

[Mr Speaker]

Let us go over to Derbyshire now to Nigel Mills.

[Nigel Mills (Amber Valley) (Con) [V]]

I thank the Chancellor for his announcement today, which is exactly what Amber Valley businesses have been asking for. Is there any way he can allow them to bring back some employees part-time, earlier than his extension, so that they can perhaps reopen their businesses next month rather than having to wait until a later date?

[Rishi Sunak]

That is a very fair question and one that I have looked at. There is an issue of operational complexity in designing the part-time aspect of the scheme in consultation with business and unions to ensure that we can enforce it properly. I think that the earliest that we can reasonably do it is in the extension period, as I mentioned. Of course, if there are ways for us to do that sooner, we will, but I would not want to commit to that today as it is a complicated thing to get right.

Tax Avoidance and Evasion

Nigel Mills Excerpts

Tuesday 25th February 2020 Commons Chamber

[Steve Barclay]

I will not comment on that individual decision, which I have not been involved in, but the House has in the past questioned whether the Government have been moving quickly on the wider principle of using our estate in the most value-for-money manner, by pooling expertise to work more efficiently and offering career progression through the greater flexibility that bigger teams in bigger centres often allow. It is right that we look at what the right estate mix is and at how we can pool expertise to achieve our common goal of closing the tax gap, particularly by using technology.

[Nigel Mills (Amber Valley) (Con)]

Would my right hon. Friend consider setting a target to be met by the end of the current Parliament, to give HMRC greater encouragement to introduce whatever further measures and actions are needed? Perhaps he would commit himself to a relatively gentle target of, perhaps, 5%.

[Steve Barclay]

The target is a gap that is as narrow as possible, and I do not think HMRC’s commitment to that can be questioned. As I have said, the gap is now at a record low, but I entirely share my hon. Friend’s desire for us continue our efforts to reduce it further, because there is a common purpose: to reinvest that money in levelling up all parts of the United Kingdom and in our public services.

Part of this requires domestic action, but part of the action must be international. That is why in the 2018 Budget we announced 21 measures forecast to raise a further £2.1 billion by 2023-24, including measures to bear down on those using offshore structures to hide their profits and avoid tax; it is why the UK is at the forefront of international action to address global tax avoidance and evasion, including the OECD’s base erosion and profit shifting project, which seeks to align the taxation of profits with the underlying economic activities and value creation; and, indeed, it is why in 2016 we led the world with the first public registry of company beneficial ownership in the G20, to provide for analysis of suspicious patterns of behaviour, and to disclose inconsistencies in supposedly factual information and reveal wrongdoing.

--- Later in debate ---

[Nigel Mills (Amber Valley) (Con)]

Let me start by congratulating my hon. Friends the Members for West Bromwich East (Nicola Richards) and for Stourbridge (Suzanne Webb) on their excellent maiden speeches. They certainly brought a crowd to a tax debate, which we perhaps do not always see.

It is a pity that we have such a divisive, political motion today. There is a lot of cross-party agreement on this issue, but as there is clearly no way any Conservative Member will be voting for the motion, we have lost a chance to show that agreement. A fairer summary of the current situation would have been that for 15 years or so, successive Governments have been trying incredibly hard to tackle this and have made significant progress, yet there is still a hell of a lot more to do. It is fair to say that we have been running as fast as we can and largely stood still. As the Minister said, we have introduced 100 or so measures in the past 10 years, and yet the tax gap is at a similar percentage to what it was at the start of that period.

At some point, we will have to accept that we are papering over the cracks. We will have to reimagine our tax system to work out what we are going to tax and how we are going to collect that money. The longer we try to perpetuate a system that was effectively based on taxing people, property and profits, the longer we will keep finding that all those things are under real pressure. Adding in the fact that, with regard to all the sins that we tax quite extensively, people are stopping sinning in those ways, we are going to find a large budget gap. The solution to this in the long term is to rethink what we tax rather than just keep adding another 500 pages of Finance Bill every year and wondering why the single biggest part of our tax gap is in legal interpretation or error. That is partly because we cannot follow the rules, do not understand them and cannot comply, or because they are so complex that we end up creating conflicting bits and loopholes that people can then exploit. There must be a better way of doing this if we really want to get the tax gap down to the sort of level we want.

It is important to stress that £1.8 billion, or 5%, of the tax gap is now down to avoidance. There is no way we can legislate our way out of avoidance and get the tax gap down. The majority of the tax gap is now on different taxes. VAT is the largest tax where there is a gap. The largest group of taxpayers who are not paying all the tax they owe comprises small businesses. We need a whole different approach to this.

As I said to the Minister at the beginning, we could start by setting a target for what we think we can get the tax gap down to, so that we can then measure how effective we are being. A relatively gentle target would be to get it down to 5% in the next five years. That would raise about £4 billion a year—a significant amount of money going towards the public services. That is not an impossible target. Looking at the history of our performance, we see that we are bumping along at somewhere between 5.5% and 6% each year, depending on the calculation.

What else can we do? Lots of people have talked about the need for more transparency through the various measures on the public registers and country-by-country reporting. There is no reason why we cannot turn on country-by-country reporting now. It is it is generally accepted that large corporations around the world have to disclose so much in their accounts to the public anyway that there is no harm to them in disclosing the extent of their turnover, assets, employees and profit in each of the territories they operate in. That is not sensitive commercial data that will harm their commercial interests. We can do that as soon as we want to.

Seven or eight years ago, I proposed an amendment to a Finance Bill to require company tax returns to be made public—to be added to the company’s accounts and kept at Companies House. I see no reason why we cannot do that. It would dramatically increase confidence that the vast majority of these companies are paying the amount of tax in their tax return that their accounts suggest they should be. It would also expose those that are not, and we could see where the differences are. Again, I do not regard that as sensitive private data. I think there would be cross-party agreement that we could move in that direction.

We have had the general anti-abuse rule since 2013. There was a plan to review how it was working after five years to see whether we needed to keep doing the individual measures each year that are cluttering up our tax system and to see where we could extend it. I do not quite know where that five-year review has gone. Perhaps now would be the time to have a proper look at the general anti-abuse rule to see whether we need to strengthen it and what else we could do.

We have a very big issue—perhaps the Minister will be grateful to me for raising this—with how we define employment for tax purposes and what is the right amount of tax to collect in that situation. As a Parliament, we are strongly saying today that we want to tackle tax avoidance. However, there has been a lot of noise in recent months about the loan charge and IR35, and it has almost felt as though Parliament has moved away from addressing those things and is perhaps thinking that we should allow them to continue because they are the right sort of tax avoidance. We need to have, pretty quickly, a full review of what we mean by employment and how we should tax it, because it is not right that two people sitting at adjacent desks doing the same job are paying dramatically different amounts of tax. That cannot be allowed to continue. Yes, we need to get the measures right and not too blunt, but we should not be backing down in those areas.

My final suggestion is on advisers. When advisers are so incompetent that their clients are filing incorrect tax information, or are engaging in such unacceptable activity around tax planning that they should not be allowed to continue, HMRC should refuse to deal with them. It should refuse to let them file tax returns and refuse to engage in correspondence with them. In that way, we could drive them out of the market and let their clients know that there are responsible tax advisers who will get the calculations right, and they should use them instead.