Draft Statutory Auditors, Third Country Auditors and International Accounting Standards (Amendment) (EU Exit) Regulations 2019

Peter Grant Excerpts

Monday 9th September 2019 General Committees

[Peter Grant (Glenrothes) (SNP)]

I am pleased to make a brief contribution. In the Chamber, several hon. Members are still paying tribute to the Speaker; shortly, there will be an application for an emergency debate to force the Government to come clean about what on earth is going on with Prorogation and much else; later, there will be another attempt to force a general election. In Westminster Hall, our colleagues are debating a petition that was possibly the quickest ever to reach more than 1 million signatures. We—the lucky few—are here talking about the Statutory Auditors, Third Country Auditors and International Accounting Standards (Amendment) (EU Exit) Regulations 2019. These regulations will not be the news headlines tonight, but perhaps they should be.

If we get this wrong—I think the Government are still getting it wrong on their second attempt—the consequences will be catastrophic for businesses, homes, jobs and the suppliers of big companies. That is why it is important for us to get it right this time. Part of the reason that we are discussing these regulations is that we did not get them right last time, because everything had to be done in such a panic-stricken rush that they were not as watertight as legislation needs to be. We should have been out of the European Union five months ago. We would have been out six months ago without a deal, if some hon. Members on the Government Benches had had their way. Even on such fundamental questions as who regulates those who regulate the conduct and misconduct of multinational businesses, however, we have still not got it right.

As the hon. Member for Sefton Central mentioned, auditors tend to be anonymous most of the time, but when we look at the causes of almost all the huge corporate failures, of which Carillion is perhaps the most recent mega-failure, there are always big questions to be asked about why the auditors did not do something and how they could not have noticed. I should mention that although I am a qualified member of the Chartered Institute of Public Finance and Accountancy, which may be why I was given the privilege of coming here this afternoon, I am not qualified to conduct statutory company audits, so I do not have an interest to declare.

As well as the questions that always come up about what the auditors were doing, the inquiry almost always concludes, although it is not inevitable, that the auditors did not break any rules at the time. We have had to completely review—realign, reset and turn inside out—the structure of the institutions that regulate statutory auditors and their profession a number of times. Try as we might, we will always struggle to keep up with the multinational chancers who look for every minor loophole in any regulation to allow their misconduct to go undetected for as long as possible—and often unpunished forever.

It is therefore important to get it right this time. The hon. Member for Sefton Central highlighted some of the concerns. When there are a lot of statutory instruments to get through, there is a danger that among some relatively minor consequential technical stuff that nobody could object to, significant changes to Government policy and to legislation are slipped in, in terms that should be brought as specific items for the whole House to consider, rather than in Committee on the upper corridors of the House of Commons on a wet Monday afternoon. I understand that quite a lot of what is in the regulations needed to be put in there, but the Committee needs to say to the Government that it cannot accept the regulations as they are.

[Luke Graham (Ochil and South Perthshire) (Con)]

I am a member of the Chartered Institute of Management Accountants. I am on the Committee and I am happy to dig into the detail, but I am not getting detail from Opposition Members, although I am hearing opposition from them. The hon. Gentleman says that there are things in the regulations to be worried about; perhaps he could outline them for us, as is the purpose of the Committee, point by point and subsection by subsection. I am happy to sit here and go through it. We have other business in the House of Commons, but as he rightly points out, this is an enormously important issue for the whole United Kingdom—it applies to the whole United Kingdom—for my constituents and for the businesses they are in. I ask him to please outline the details, so we can go through them together in a cross-party way.

[Peter Grant]

The hon. Gentleman agrees with some of the points I am making. As he helpfully points out, if Government Members were all that interested in going through the regulations in fine detail, perhaps they should have asked professionals in the various accounting and auditing institutions before the Committee. I have no doubt that Government Members will rise to speak in support of the regulations. When they do so, perhaps they will tell the Committee what could have gone disastrously wrong if they had taken the time to get the policy right on their third attempt, and asked the statutory accounting and audit bodies what the regulations would do.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

Perhaps the hon. Gentleman could help me by telling us, as my hon. Friend the Member for Ochil and South Perthshire asked him to do, which specific parts of the regulations he objects to.

[Peter Grant]

It has already been pointed out. As I said, if there has not been consultation with the bodies whose purpose it is to regulate the profession, why would the Government ask a group of lay people to agree the regulations?

[Mrs Murray]

Will the hon. Gentleman give way?

[Peter Grant]

No, I will not give way again. The hon. Lady will get a chance to speak if she wishes. I would be interested to know why the Government did not have that consultation. Why are they making significant changes to policy during a process that the House agreed could be used to make technical, consequential, minor and non-controversial changes, of which there would need to be millions to get us even vaguely ready for 31 October? Why are they trying to put in much more significant and substantive changes that should have been tested on the Floor of the House before they passed into law?

[Sir Oliver Heald (North East Hertfordshire) (Con)]

Will the hon. Gentleman give way?

[Peter Grant]

I can see that lots of Members want to speak, so perhaps the best thing is for me to sit down and give them a chance to do so.

[Kelly Tolhurst]

I thank the hon. Member for Sefton Central for his comments, but I must pick him up on one point. He questioned whether the Government respect democracy. We have sat across from each other numerous times in Committees this year, and I point out to him that respecting democracy is exactly what we are doing. The regulations ensure we are fit and ready for when we exit the European Union. That is respecting democracy and the 2016 democratic vote. I need to point that out, and it is exactly why my Department has been doing the work that is required for us to ensure that we are fit and ready to leave with or without a deal.

I remind the Committee that the regulations are part of what will enable us to ensure that the EU retained law that comes into UK law is fit and proper for when we leave the European Union. We are ensuring that we can communicate that to business, and that the current laws will continue to operate correctly in the UK. As the hon. Member for Glenrothes pointed out, the limitations in the withdrawal agreement set out what the Government can do when bringing secondary legislation through the House. He will note that the only change in the regulations is to ensure the smooth and effective running of regulatory systems when we leave.

Members also commented on the quality of audit and on their concerns about the performance of some UK companies. As the hon. Member for Sefton Central will know, we had the Sir John Kingman review of the Financial Reporting Council, and the Government are working through that and consulting where possible to make modifications and changes within the FRC. That ongoing piece of work by Government is not necessarily completely related to these regulations.

The hon. Gentleman will know that the IFRS is a high-quality, internationally accepted and supported set of financial reporting standards that is regarded as a benchmark throughout the world by listed companies.

[Peter Grant]

The Minister seems, rightly, to be recognising the importance of that organisation of experts. Why will the Government not listen to other organisations of experts in their consideration of the Brexit proposals?

[Kelly Tolhurst]

I am here to speak to the regulations that are in front of us. I assure the hon. Gentleman that the experts in the Department for Business, Energy and Industrial Strategy, as well as our stakeholders and partners across the sectors, have been spoken to. I challenge him to name the organisations that I have ignored or chosen not to speak to.

[Peter Grant]

The Minister will be aware that there are six recognised chartered accounting bodies in the United Kingdom. Can she name the ones that were consulted over these regulations, or is she saying that those organisations are not experts?

[Kelly Tolhurst]

As part of our ongoing engagement with stakeholders across all the Department’s responsibilities, we have regular dialogue with those organisations, whether it be on this statutory instrument or on any of the Department’s other business.

Oral Answers to Questions

Peter Grant Excerpts

Tuesday 16th October 2018 Commons Chamber

The Secretary of State was asked—

[Peter Grant (Glenrothes) (SNP)]

1. What assessment he has made of the effect on business growth in Scotland of the UK leaving the EU internal market.

[Patrick Grady (Glasgow North) (SNP)]

17. What assessment he has made of the effect on business growth in Scotland of the UK leaving the EU internal market.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Reaching a good agreement with the European Union will have a positive effect on business growth in Scotland and in every other part of the United Kingdom. In Green GB Week, it is important to highlight the huge clean growth opportunities in Scotland in a sector that supports tens of thousands of jobs and brings £11 billion into Scotland’s economy.

[Peter Grant]

Yesterday, AstraZeneca joined a long line of major UK employers that have put investment plans on hold because of Brexit uncertainty. The Governor of the Bank of England has indicated that, even before we leave, Brexit has already cost £900 per UK household. Does the Secretary of State agree with the Governor’s estimate? If he does not, what is his estimate of what Brexit has cost us to date?

[Greg Clark]

The hon. Gentleman’s point underlines why it is important that we secure a positive deal, and the implication of that analysis is that if we do secure that deal, as I hope and expect that we will, there will be a substantial upside for the economy. The hon. Gentleman is interested in the negotiations because they provide us with access to European markets, but it is a matter of record that the Scottish National party wants to take Scotland out of the internal market of the United Kingdom by dint of leaving the rest of the UK, with which Scotland does four times as much trade as it does with the rest of the EU, so I would call for a bit of consistency from the hon. Gentleman.

European Union (Approvals) Bill

Peter Grant Excerpts

3rd reading: House of Commons & Committee: 1st sitting: House of Commons & Report stage: House of Commons
Tuesday 10th October 2017 Commons Chamber

[Andrew Bowie]

Each application has to be looked at in its own individual context. It is obviously not for me or this House to decide where each state is in terms of its candidate status, but for the Council of the European Union. I know that that is going through at this very moment.

The third and fourth decisions of the EU Council are necessary to implement a co-operation agreement between the European Union and Canada on competition enforcement. Canada is one of the United Kingdom’s oldest and closest partners: we have been allies in conflicts for over a century and we have a shared past, strong family links and shared values. As if to underline that closeness, Canadian and British troops, as well as European and other NATO service personnel, are working closely, side by side, as part of Exercise Joint Warrior along the north coast of Scotland. It is because of this closeness, and our shared history and values, that many in this House and beyond find it so frustrating that it has taken over eight years for the Comprehensive Economic and Trade Agreement to be agreed between the European Union and Canada. Even then, it almost came unstuck due to the complex internal machinations of Wallonian politics—I was going to make a comment about unchecked devolution, but I have thought better of it. I just wonder whether a UK-Canada free trade deal might take a slightly shorter time.

[Peter Grant (Glenrothes) (SNP)]

I am grateful to the hon. Member for giving way and for reminding us that as well as the co-operation with Canada, subject to this proposed Act, a much more significant and detailed co-operation agreement was finalised not so long ago. He will be aware that while the Bill has been offered a potential six hours debating time on the Floor of the House, the CETA deal was agreed without a single minute’s debate on the Floor of the House. Does he believe that that allowed the House to properly influence such an important trade deal?

[Andrew Bowie]

As the hon. Gentleman knows, that was well before my time in this House so I would not feel entirely comfortable commenting on that. This debate is not about CETA.

The decisions taken in the EU Council being approved by us today for agreement by the European Parliament will replace the 1999 competition and co-operation agreement. As the Minister said, the agreement replicates and builds on the provisions in the earlier agreement by allowing the European Commission and the Canadian Competition Bureau to exchange evidence obtained during investigations, including confidential information and personal data. These decisions will further help British businesses thrive internationally, as both Canadian and European business benefit from strong international competition law. On anti-competitive business practices, we must continue to work with Europe and Canada after we leave the European Union. We on the Conservative Benches know that the only way to reliably increase long-term living standards is through trade. Fair competitive trade is, as we know, the catalyst for reducing poverty, spreading prosperity and fostering innovation.

An outward-looking global Britain, as we will be, must continue to fight fair for business practices across the globe to ensure that free trade works for everyone. I hope the European Union recognises that the approval of its agreements is done in good faith, because it benefits citizens and businesses across the United Kingdom, Europe and Canada. In approving these decisions, we not only signal our commitment to the future of a peaceful and prosperous Europe, reaffirming our position as its closest and most dependable friend, but signal our continued desire to promote fair competition, free trade and an ambitious future for ourselves and our partners across the world.

[Peter Grant]

I am happy to speak in support of the Bill. As I mentioned in my intervention, it seems ironic that something that appears to attract little opposition and not even a great deal of concern across the House could, if necessary, be granted a total of six hours of debate—tonight’s allocation and what we had on Second Reading—on the Floor of the House, yet massively important and much more contentious EU legislation, such as the CETA deal, is guaranteed no time whatever on the Floor of the House. The Government were eventually dragged kicking and screaming into an upstairs Committee room for an hour and a half after the CETA deal had been signed off but before it was finally ratified. That was after months, if not years, of determined efforts by the European Scrutiny Committee, whose scrutiny process was ignored and overridden by the Government on that and on so many other matters. I will come back in a moment to explain why that is so vital, but it seems ironic that something relatively non-contentious requires an Act of Parliament before the Minister can sign it when Ministers from all parties have quite happily signed much more contentious EU documents in the past without any appropriate reference back to this House.

I want first to speak about the applications from Albania and Serbia. We should enthusiastically welcome the movements in those two countries. I am one of a fairly small number in here who can remember the days when Albania was like the North Korea of Europe. Even before the fall of the iron curtain, even when the Stasi were in charge in East Germany and even when the Ceausescu regime was in charge in Romania, Albania was seen to be the most isolationist place of all. We should welcome the fact that it now wants to move closer to the more modern family of European nations. And look at where Serbia has come from in the past 20 or 25 years; we should enthusiastically welcome the fact that it is now asking to be allowed to co-operate much more closely in the protection of human rights and the eradication of racism and xenophobia. We should encourage the Serbian people and Government to continue on that journey.

--- Later in debate ---

[Andrew Percy (Brigg and Goole) (Con)]

I have spoken during a previous stage of this legislation and am happy to do so again. Before I begin on the Bill, I have to take issue with the shadow Minister’s use of the phrase “Trump regime”. This really is the sort of childish politics that we have come to expect from the Opposition. Never mind various shadow Ministers popping along on certain strong leaders’ particular TV channels without seemingly any notice at all—no criticism of that. But describing the democratically elected Government of our biggest ally and friend as a regime is silly, childish politics. The shadow Minister could do better, but he showed why the Labour party is unfit to hold any sort of ministerial office at any time soon.

I take issue with a couple of things that the hon. Member for Glenrothes (Peter Grant) said. It is not true that Parliament has not discussed, debated and questioned Ministers on CETA. I declare an interest as a previous vice-chair of the all-party parliamentary group on TTIP, now the all-party parliamentary group on transatlantic trade. We have had Backbench Business debates in which TTIP has been debated and the CETA deal has been smeared by certain Members as a Trojan horse for American interests, which is a deep insult to our Canadian friends and allies. Ministers have responded to those debates, and of course the issues have been raised time and again in questions. I partly understand his point, but it is not the case that we have not examined and discussed the CETA provisions in depth in this place, both in the Chamber and elsewhere. It is a consequence of its nature that the trade treaty with Canada passes in this form. There is nothing unusual about it. It is part of our constitutional system.

I also take issue with one other thing the hon. Gentleman said, which in my mind was the biggest nonsense I have heard for some time: that the reason the British people voted to leave the EU was that the British Parliament, even in cases of the direct applicability of EU law and an activist European Court of Justice, has not got in the way of things forced on Britain, even sometimes against the wishes of the British Government. It was a bizarre argument. I suppose it is just another example of people failing to accept the democratic will of the people. Seven out of 10 of my constituents voted to leave the EU. They have pretty much been smeared since the referendum campaign for daring to vote a different way from certain establishment types in this place.

[Peter Grant]

I will not rise to some of the nonsense the hon. Gentleman is speaking. Will he confirm whether he is familiar with the resolution of the House requiring Ministers to get either clearance or an agreement to waive scrutiny from the European Scrutiny Committee, and will he confirm that when the International Trade Secretary—I think it was him, but I cannot be sure—signed CETA, he did so knowing he did not have the Committee’s approval? The resolution does not say it has to be discussed at a Backbench Business debate or by an APPG; it quite clearly says it has to be cleared by the Committee, but it was not at that time—

[The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)]

Order. We are a little more lax because this is Committee stage, but I kind of forgot the hon. Gentleman was intervening rather than making a speech. I should not have let him go on for quite so long, but I am sure he has made his point now.

Euratom Membership

Peter Grant Excerpts

Wednesday 12th July 2017 Westminster Hall

[Mr Edward Vaizey (Wantage) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Gray. I am very pleased indeed that Euratom is now getting the attention it deserves, and I congratulate the hon. Member for Ynys Môn (Albert Owen) on securing this debate.

It is wonderful to see the support that Euratom is getting outside the Chamber—for example, from former Conservative party leader William Hague, writing in The Telegraph yesterday. It has also been on the front page of the Evening Standard; The Times today came out in favour of Euratom; and no less a luminary than Dominic Cummings, the man who ran the leave campaign so effectively, has used quite strong language—he nevertheless makes his point effectively—to argue that we should not leave Euratom. The reason, of course, he shares that view is that Euratom has nothing to do with our leaving the European Union.

This is a debate not about stopping Brexit but saving our membership of Euratom. Indeed, as my right hon. Friend the Member for Clwyd West (Mr Jones), the former Brexit Minister, pointed out, we served our intention to leave Euratom on a technicality. It was quite clear that the Government had received legal advice that put it into their mind that it might be an ineffective serving of the article 50 notice if we did not serve notice that we were also leaving Euratom. The trouble that those of us who support our membership of Euratom have is that none of us has seen that legal advice. It is obviously unprecedented for the Government to publish legal advice, but it would be very useful at the first meeting of the working group, which no doubt the Minister will announce in his remarks, to have some distilled version of the legal advice that the Government received on the link with Euratom.

[Peter Grant (Glenrothes) (SNP)]

Without wishing to go over old scores, the right hon. Gentleman will no doubt remember that the Government were also given legal advice that there was absolutely no need whatsoever to have a parliamentary vote on triggering article 50. Does that make him wonder whether the Government’s legal advice on this should be subject to some scrutiny before it is implemented?

[Mr Vaizey]

That is a very effective point. It is certainly the case that those of us who wish to remain in Euratom will now seek our own legal advice, but it would be nice to know where the Government stand on this. The other point that has emerged is that no assessment has been made of the impact of leaving Euratom or, rather, of the Government’s current position, which is to leave Euratom and then rejoin it. The Government are being offered a time-saving opportunity.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

The sentence that I think sums up how we got into this mess came from the hon. Member for Stone (Sir William Cash), who said that we have to start getting answers to some of these questions. How about getting answers to the questions before we had the referendum, or how about Members asking those questions before they trooped through the Lobby to vote for the shortest and most destructive Act that this Parliament will ever pass, and possibly the only Act of Parliament for which the explanatory notes were half a page longer than the Bill? The fact is that the first full day of debate on the triggering of article 50 lasted almost 11 hours, and Euratom was mentioned once by a Conservative Back Bencher—hats off to the right hon. Member for Wantage (Mr Vaizey). His mention of it came nine hours into the debate.

The Government’s entire White Paper on leaving the European Union devoted only eight sentences to Euratom. It is described as an important priority for the Government—so important that it is mentioned on page 44, paragraph 831. Even then, there is no recognition whatsoever of the need for life-saving medical isotopes, which were mentioned by my hon. Friend the Member for Central Ayrshire (Dr Whitford), who is no longer in her place. She has had an illustrious career saving lives in the NHS using radioisotopes. Without the Euratom treaty, the United Kingdom will have no—I repeat “no”—reliable source of those radioisotopes.

[Kit Malthouse (North West Hampshire) (Con)]

Does the hon. Gentleman recognise that plenty of countries outside Euratom have easy access to medical isotopes and that there is no reason why, if we leave, we will suddenly become an international pariah and be denied those treatments?

[Peter Grant]

I accept that membership is not essential, but this is not the only item on which we need negotiations finalised and ready to implement within a ridiculously short and entirely self-inflicted timetable. If Euratom were the only thing the Government had to negotiate between now and March 2019, there would be no problem. But there are areas that will have an essential long-term impact that the Government will not have time to negotiate properly in order to get the best possible deal. With a bit more candour from the Government about how difficult that process will be, we might all be better off.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Does the hon. Gentleman agree that the Government need to be candid about all the costs of the various options being explored—associate membership, third-country membership and remaining in Euratom—and about the difference in costs? We know that during the referendum campaign a lot of inaccurate information was circulated about the cost of remaining and the associated benefits of leaving. We need some frank information about the costs associated with retaining membership of Euratom or leaving.

[James Gray (in the Chair)]

Order. Interventions must be brief.

[Peter Grant]

I fully agree with the hon. Lady. The figure of £357 million comes to mind for some reason —it must be because I got the bus to work this morning. There has not been the necessary degree of openness and detailed debate on any of this. That is why one of the biggest mistakes was to call the referendum and then have the vote in such short order. We were told repeatedly by the Conservatives that we had been talking about this for years, but we have not been talking about the detail in relation to important agencies such as Euratom, the European Medicines Agency and many others.

It is good to see, albeit belatedly, so many Government Back Benchers now demanding that the Government do what some of us were asking them to do beforehand. All I can say to them is this: “The next time you want to demand that the Government do something different, please do so before voting for the Bill that makes it impossible for the Government now to listen to what you are asking for.” I say that because the Government are now claiming that we are in this situation because their Back Benchers, some of whom are here today, voted obediently for the article 50 Bill, without any queries about the implications for Euratom and other important institutions. Members here who are bemoaning the impact of that Act need to go home, look the mirror and ask themselves what responsibility they have.

[Suella Fernandes (Fareham) (Con)]

Will the hon. Gentleman give way?

[Peter Grant]

I am about to finish and cannot give way again.

Those hon. Members need to ask themselves, “What responsibility did I have for this mess, and what can I do to ensure that I don’t allow obedience to the Whips to make me vote for such a disaster in future?”

[Several hon. Members rose—]

Taylor Review: Working Practices

Peter Grant Excerpts

Tuesday 11th July 2017 Commons Chamber

[Margot James]

Perhaps the hon. Lady would like to write to me with more details because this is the first time I have heard of that particular practice. It certainly sounds wrong, and I would be delighted to consider it further within the powers that currently exist.

[Peter Grant (Glenrothes) (SNP)]

Page 11 of Mr Taylor’s report says:

“we have to examine why, with employment levels at record highs, a significant number of people living in poverty are in work.”

For as long as I have been here, when Members have asked questions about poverty, it has been the Government’s practice to respond with statistics about employment and unemployment. Will they now finally accept that such a thing as in-work poverty not only exists, but is a brutal fact of life for millions of people on these islands?

[Margot James]

We have always been absolutely committed to reducing poverty, wherever it exists. The national living wage has gone a long way towards providing workers with a framework so that they need not sink into poverty, and I urge the hon. Gentleman to consider that fact further.