(5 years, 8 months ago)
Commons ChamberMy understanding is that my right hon. Friend the Secretary of State for Defence has put in place special measures to ensure that those members of the armed forces who are disadvantaged by Scotland’s higher income tax rates are compensated, in order to avoid a situation where they regard postings to Scotland as hardship postings.
The Government are committed to delivering a deal that works for the whole of the United Kingdom—for every country and region within it, including Scotland—and Treasury Ministers of course have regular discussions with the Secretary of State for Scotland on just these matters.
The Fraser of Allander Institute reports today that many firms are still ill prepared for a no-deal Brexit, that the worst-case scenario is the equivalent of making 100,000 people in Scotland unemployed, and that we face a recession double the size of that which Scotland experienced in the crash. Does the Minister not agree that the only way out of this Government shambles is to accept that staying in the single market and the customs union is the best compromise we can get?
The best deal for the country, and indeed for Scotland, is the one that the Prime Minister has brought forward, and which she is now looking at with our European partners in Brussels: one that sees a free trade area right at the heart of our arrangements; that has no tariffs between ourselves and the EU27; that gives us control of our borders; that makes sure we put an end to sending vast sums of money to the European Union; that gives us control of our laws; and that enables us to conduct our own international trade affairs.
(5 years, 8 months ago)
General CommitteesIt is a pleasure to see you in the Chair, Mr Evans, and to join the Committee for another session as we hurtle towards EU exit. As I have said in other such debates, it is not something that the Scottish National party wanted to see or that voters supported in Scotland, where 62% voted to remain. However, I will play my part in these things and call for the Government to answer some questions.
As always, I have concerns about a potential reduction in regulatory standards. I seek assurances from the Minister that that will not occur and that at the very minimum we will keep to the standards outlined in current EU legislation. We know the long-term impact that the financial crash has had on our economy; I do not think that anyone would argue that lack of regulation was not a major driver of it. We cannot veer back towards that situation; that would be terrible for all our constituents throughout the UK.
Let me address the central securities depositories regulations first. I note from the impact assessment that the familiarisation cost is £400 per firm—£4,400 to all firms affected. That is a further burden to business from making these changes for Brexit. I am sure that nobody told businesses at the time of the referendum that they would incur such costs as a result of Brexit; it is one of those things that is hidden in the detail.
The Minister mentioned Sir Jon Cunliffe’s letter of 25 October to CSDs. Can he tell us what reply he has received from them? I appreciate that the number of CSDs is rather small, but it is not unreasonable to expect some response. It would be good to have a little more detail about what they are saying about the draft regulations.
I note that there is nothing in the impact assessment about monetised non-familiarisation costs of the central securities depositories regulations, whereas that information is provided about the trade repositories regulations. Is that because the costs are not known, or because there are no costs, as the central securities depositories regulations do not have an impact in the same way?
On trade repositories, will the Minister give us more information about the UK’S future relationship with ESMA? Clearly, ESMA will continue to function, make regulations and do things. How much notification will there be of obligations to apply the rules set up so that we continue to have a relationship? Is there any indication of what formal agreements or other types of arrangements might be put in place?
I note that there is a draft registration form on the FCA website, as well as a consultation on fees, which runs until January for the trade repositories. Will the Minister give more detail about that process? Does a draft registration form become a formal registration form at the point that the UK wishes to leave the EU, or before then? What is the process? Is there much point in those trade repositories that wish to fill out that form doing so in draft if they can do so in a permanent form? Will they have to do the paperwork twice? Will the Minister indicate what level of fees the Government feel are reasonable for the process? If people are asked how much they would like to pay, I am sure that most people will say that they would like to pay no fee, but the Government might have a different idea.
The impact assessment quotes familiarisation costs of the trade repositories regulations as £150 per firm, which is £1,200 for all impacted firms, as there are only eight. However, the wider impact of the monetised non-familiarisation costs to business, as outlined on page 47 of the impact assessment, is quite different, as they could run to £10,000 to £15,000 per trade repository—a total of £80,000 to £120,000. There would also be a cost of £5,000 per firm accessing trade repositories, with an unknown total cost, because it is about changing IT systems and internal processes. If we read the start rather than the end of the document, we get quite a different picture of the impact of the regulations.
The impact assessment states, at the bottom of page 47, that trade repositories are
“currently regulated by ESMA, so the UK regulators do not have direct access to information relating to clients of trade repositories.”
We therefore do not know how many will be affected. Will the Minister tell us a wee bit more about what conversations he has had with ESMA? Is ESMA unable or unwilling to give him that information? Has information been requested? It is difficult to get an idea of the total impact if we do not know how many are currently regulated, so we should be able to access that information.
The Minister will expect me to raise my usual concerns that both sets of regulations put more burden on the FCA, the Bank of England and other regulators, and that we do not have the specialists to deal with it. Registering is a new thing, so will the relevant functions and IT be in place in good time to allow all that to happen?
The regime that we would be onshoring for the future recognition of third countries would be a matter for us to consider, on the same basis that we would be onshoring EU entities that would have a new legal entity in the UK. It will be the same process, but one that we would essentially have to do domestically, rather than relying on the ESMA framework.
I now turn to the points of the hon. Member for Glasgow Central. I acknowledge the recurrent but appropriately made comments about her party’s position. All I can say is that I have tried to conduct this in as professional a manner as possible. The regulators have the resources available. They have a supervisory framework and, through the levy, they have the ability to make the appropriate resources available.
The hon. Lady asked about the temporary registration regime, which is intended to allow existing EU trade repositories to continue to provide services to the UK. It allows the new UK legal entities, which are part of an ESMA-authorised group, to submit an application. In terms of the process for that application, she mentioned the drafts on the site. I cannot give her the responses to the letter of 25 October, but I undertake to write to her on that. I need to speak to the regulators to understand where they are with that.
The hon. Lady also made a point about the degree of engagement that we have had with the EU. We have had a wide range of discussions with our EU counterparts—I have not personally, but my officials have—on matters relating to our withdrawal from the EU and this matter.
The UK Government and regulatory authorities will continue to do everything we can to ensure a smooth adjustment for firms and customers on both sides. Unfortunately, as with many of these matters, we cannot determine the EU’s response. That has been a challenge over this period. It is inevitable that, in a no-deal scenario, hostility will break out. It is in the interests of all market participants, regulator-to-regulator, Government-to-Government, to continue to work closely together, because that is in the interest of stability.
I believe that has addressed most, if not all, of the points raised.
On the point about not knowing the exact number of firms affected, I draw the Minister’s attention to paragraph 124 on page 32 of the impact assessment, which says:
“As the volume of firms affected is so large, and both financial counterparties and non-financial counterparties are affected by the reporting obligation, it is difficult to provide an estimate of the number of firms affected.”
Will he tell me more about what can be done to raise awareness among the firms that may be caught up in this? If they do not know about it, they will not know about their obligations to comply.
The existing reporting obligations for both statutory instruments are enduring and have been established for a long time. The issue of reporting into a different legal entity would come to pass following the enablement and the enacting of this regime.
The hon. Lady referred to the different parts of the impact assessment and the wider cost of familiarisation. She is absolutely right to draw attention to the undesirability of this additional cost and expense. That is why we do not advocate a no-deal scenario. I am not in a position to give her any more information, because I do not possess it. It will be incumbent on the regulator to send out timely information updates on what will be required. There is no meaningful change in what a market participant will need to do, in terms of the information they will need to share.
I hope the Committee has found this afternoon’s sitting informative and that it will support these regulations.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Central Securities Depositories (Amendment) (EU Exit) Regulations 2018.
Draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018.
Resolved,
That the Committee has considered the draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018. —(John Glen.)
(5 years, 9 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
A second referendum would be deeply divisive for our country. It would send a signal—[Interruption.] The hon. Lady has had her say. She and I campaigned on the same side in the referendum. I wanted us to stay in the European Union, but the difference between us is that I am a democrat, and I believe that when we have a referendum, which was widely debated over a long period, and a result is given, on the highest turnout of any electoral contest in our country, that result must be respected.
UK Government analysis in 2014 said that Scottish independence would cost the economy 0.4% to 1%, but HM Treasury analysis today says Brexit will hit the UK economy by 3.9%. With apologies to my former colleague Callum McCaig, the previous Member for Aberdeen South, does the Financial Secretary to the Treasury honestly believe that the UK can afford to be independent?
Yes is the answer. We have a bright future ahead of us. We have the opportunity, with this deal, to go out and do other deals around the world with other countries. The report makes specific reference, for example, to the United States, China, India and other important trading nations. We know that those parts of the world outside the European Union are growing far more strongly than countries within the bloc of the EU27, so I am optimistic about the future of my country.
(5 years, 9 months ago)
General CommitteesIt is not just the enthusiasm from the Finance Bill but from the Scotland win last night, that has brought me here this morning. I am delighted to be here, and to report that news to the Committee, if Members have not already heard.
I have many of the same concerns about this instrument as the hon. Member for Stalybridge and Hyde. I continue to be concerned that we are putting an additional burden on the FCA and the Treasury, and I am yet to be convinced that we have not just the expertise, but the numbers of staff and the capacity, to take this on in addition to all the other SIs that have already been laid before the House, or will be in the weeks and months ahead. I would like some more information from the Minister about the detail of that.
Secondly, with all these powers going to the FCA and the Treasury, what will be the role of this House in scrutinising the measures as we go forward? Obviously, these are very important regulations, given the issues that arose in the 2008 crash, which might not have happened if we had had greater scrutiny at the time. After 10 years of progress on developing regulations, we do not want to slip back again once we fall out of the European Union mechanism for co-operation. I want safeguards to be put in place to make sure, should we move away from the current co-operation mechanism, that we do not end up in the same circumstances as we were in during the financial crash.
I was concerned to hear the Minister discuss the deleting of co-operation provisions. Clearly, that is a result of coming out of the EU, but I want to know a bit more about what might replace those provisions in future, or what mechanisms will be set up for European co-operation in this area. It is in all of our interests to have those mechanisms—to have some means of working together—and just saying, “We will find a way of doing that in future” does not really cut it when we are talking about something that, if it is not done absolutely correctly, could bring down the entire economy.
Further to my intervention on the Minister, and regarding the point that the hon. Lady has eloquently made, there appears to be an assumption that the volume of activity that this instrument may lead to will just be absorbed by the existing resources. Combined with the fact that it is not going to be business as usual post-Brexit, or indeed in the run-up to Brexit, does the hon. Lady agree that the issue of resources needs to be looked at more seriously as a result of this and other measures?
I absolutely share the hon. Lady’s concerns. As I said, we already have many SIs, and lots more are coming down the line. I am sure that many more exciting Committee sittings will take place to examine the details of those SIs. I would like a bit more clarity about the numbers of people who will be required to implement this regime, monitor it, and make sure that it works in future.
I would also like to know a bit more about the implications of this SI. The explanatory memorandum states:
“Wherever practicable, the proposed approach is that the same laws and rules that are currently in place in the UK would continue to apply at the point of exit”,
and it goes on to talk about continuity, certainty and all of those things. It would be useful to know how tightly we need to remain aligned to existing measures, now that we no longer follow those rules or have any influence in making them. I would question the whole point of leaving the EU in the first place if we have to stay that closely aligned—what is the point in leaving and having an inferior deal? Of course that is not what Scotland voted for, and that remains the case. Those are my questions. Other points were raised by other hon. Members, so I am happy to sit down and let the Minister reply.
(5 years, 9 months ago)
Commons ChamberMy hon. Friend is making a very good point about the public health impact. Does she agree that people in some of the communities that she and I represent are already struggling with multiple deprivation, and gambling being concentrated in their areas only makes that worse and worsens their life chances?
Absolutely. There is a correlation between multiple social deprivation factors and problem gambling, which is why certain communities have a higher concentration of betting shops housing these machines—the crack cocaine machines of gambling—than there otherwise would be.
I say to the Minister, and I know he is listening, that we absolutely and urgently need a review of the public health effects of gaming provisions. On that basis, I urge the House to support new clause 12—
I have certainly heard my right hon. Friend the Chancellor talking about ensuring that Britain has competitive tax rates, that Britain is a competitive and good place to do business, and that we have a fair balance between raising taxation to pay for our public services and also ensuring that our tax system encourages rather than stymies economic activity in this country.
We heard earlier about the reactions of the EU27. I would point to the Republic of Ireland, which has a lower corporation tax rate than us. If we were to move towards the Republic of Ireland’s rate, it would be somewhat strange for it to say, “How dare you copy us.” This is not about encouraging a tax competition. States in Europe, whether they are inside or outside the EU, will look to provide the conditions for growth in their countries, and it is absolutely right that that is what the Chancellor and Treasury team in this country are looking to do. I certainly praise them for that. This is not about becoming a tax haven, although we might reflect on the fact that, judging by the actions of the Scottish National party and the Scottish Government, they are trying to turn England into a tax haven by shoving up tax rates in Scotland.
With that, I will draw my remarks to a close. I welcome what I see in this Budget. I do not think that the Opposition amendments and new clauses are necessary, for the reasons the Minister outlined at the Dispatch Box. This welcome Bill will bring in more tax, deal with avoidance and, at the same time, help to push our economy forward.
The renowned Nobel laureate in economics Joseph Stiglitz has said that what we measure shapes what we strive to pursue. I tabled new clauses 14 and 15, in my name and the names of my hon. colleagues, to ensure that we are effectively striving to pursue the reduction in the tax gap and to consult fully on the provisions of this Bill. I support very much what the hon. Member for Oxford East (Anneliese Dodds) said and support her new clause 5 and amendment 23. She made some excellent points, most of which I fully agree with and endorse. I will not repeat what she said, however, as she made her points very clearly; she did a fantastic job in putting across the Labour party’s view.
It was bizarre to watch Government Back Benchers tie themselves in knots yesterday in opposing new clause 7, tabled by my hon. Friend the Member for Aberdeen North (Kirsty Blackman), in relation to entrepreneur’s relief. If the UK Government are confident that their policies are effective, they must not be afraid to review them. Indeed, reviewing them is all we can do under this Bill; as the hon. Member for Oxford East said, we are limited in what we can do here. So we do propose a review on that.
Likewise on the provisions on tax avoidance, we must gauge our progress by continually measuring the value and effectiveness of those policies. The hon. Member for Torbay (Kevin Foster) mentioned the Dutch sandwich. I am sure that was sensible when proposed and I am sure that the Dutch Government then looked at it and decided that actually it was not working. They then will have reviewed the policy and looked at the detail and clamped down on that loophole; I am sure they must have done that as otherwise it would still be an issue. Likewise, this Government should do better at reviewing their policies, testing them, seeing how effective they are and making changes as a result.
Our proposal is in the spirit of achieving better, more robust policies in the future. We should also look to the world to see where the best polices are and see what we can do to adapt them, and we should collaborate with our near-neighbours in Europe, particularly to make sure we are not allowing companies to move around at will seeking the best policies to save money, rather than paying the taxes that they ought to.
There are many reasons why HMRC does not always collect the tax that it ought to be paid, whether through criminal activity, through evasion or avoidance or just through human error, and there is much more that can be done to address that. While a greater focus on the non-compliance of corporations is welcome, there is still ample opportunity to avoid paying into the system, and we need to look at that very seriously.
The SNP has long argued that the tax system is unnecessarily cumbersome and complicated. There are layers and layers of regulations and exemptions, which lead to loopholes appearing. The system seems to get more complex every year when we look at the Finance Bill, and there also appear to be armies of tax avoidance specialists seeking to exploit whatever gaps they can find.
Was my hon. Friend not astonished when the Minister admitted that no data is held on any of the higher-rate Scottish taxpayers who are registering themselves elsewhere in the UK, as peddled and promoted by the Scottish Tories last week?
That is indeed astonishing, and if it is a problem, the Government ought to be looking at it. People living in Scotland should pay the appropriate amount of tax, because that is the price we pay for living in a civilised society. That is what the Minister said in his speech earlier. We also have to look at what we get for our taxes in Scotland. We get a better, fairer society, which is good for us all. All the academics in this field recognise that a fair society is better for us all.
Last year, this Government opposed my amendment to the Sanctions and Anti-Money Laundering Bill that would have increased the transparency of Scottish limited partnerships by ensuring that those partnerships had bank accounts. We are still waiting for a response from the Department for Business, Energy and Industrial Strategy on the consultation that closed on 23 July this year.
I served on that Bill Committee with my hon. Friend, and the work that she did was excellent. Does she share my concern about the damage being done to Scotland’s reputation by Scottish limited partnerships? The partnerships are nothing to do with the Scottish Government, they have not been legislated for in Scotland and we have no power over them there, but they are doing serious damage to Scotland’s reputation internationally, and the UK Government need to act.
This Government absolutely do need to act on this issue. It cannot be right that something we have no control over becomes a noose around our neck when it comes to our reputation internationally. I expect this Government to come forward with something on this soon, because their not doing so allows this to continue to happen. The Herald, whose journalist David Leask has been a constant campaigner on this issue, has reported that
“in the year to March 2016, 95% of SLPs were set up by offshore tax havens.”
That ought to ring alarm bells for this Government, given the likely sums of money involved in these tax havens. I have tabled more parliamentary questions on this today, but the last time I checked, no fines had been issued to those SLPs that have not yet registered a person of significant control. Even pursuing those fines against SLPs could have brought large sums of money into the strapped Treasury coffers, never mind dealing with the underlying lack of transparency surrounding SLPs.
It is no secret that SLPs are being abused to carry out crimes abroad and launder money and that the anonymity they provide enables all this, but this Government are simply not doing enough to stop it. There was some progress after the Salisbury attack, and there was talk of clamping down specifically on Russian dirty money, but we have not yet seen that happen. We need to know what the Government’s plans are, because we cannot allow this to continue. I commend to the Minister the investigation on Uzbekistan by David Leask and Richard Smith, because the sums of money and levels of corruption involved are absolutely hair-raising.
The SNP has put forward many sensible proposals to crack down on tax evasion and avoidance, but they have been rejected by this Government time after time. No action has been taken on enforcing the people of significant control rules governing SLPs. No action has been taken on the alternative investment market loophole that allows families to register homes as business properties, effectively overriding inheritance tax. No action has been taken to make online retailers liable for tax avoidance when they falsely classify their goods as gifts. And no action has been taken to create a legal framework to combat tech firms who avoid corporation tax by registering implausibly low profits in the UK.
On top of all that inaction, does my hon. Friend share my concern about the centralisation of HMRC offices? Highly skilled staff will lose their jobs because of this Government’s centralising agenda. In my constituency, more than 1,000 jobs are being moved from West Lothian to Edinburgh, which will create huge issues.
I agree that that loss of expertise is a huge issue. I have a constituency interest, because many of these centralised offices end up being in Glasgow Central, but this also comes at a significant cost to the taxpayer. It is no secret that city centre office space in Glasgow is expensive, and there would be greater benefits in keeping those services in areas such as the Clyde Gateway, which is also in my constituency but much cheaper, or in Livingston. That would provide better value for money for the taxpayer than having them all in city centre offices.
I thank the hon. Lady for giving way. She is making some good points about decentralisation. Would the SNP join me in looking at some of the Scottish Government’s new powers? Instead of basing offices in Dundee, offices should be located in more affordable areas, such as Clackmannanshire or Perth and Kinross.
Dundee is affordable. There is a balance—[Interruption.] The hon. Gentleman is not listening, but there is a balance here. We need local infrastructure, transport and so on to support such things, but there is an argument for doing all that. It used to be UK Government policy to decentralise large office blocks, but they have cut that back over the years, and offices are now disappearing. He can give me no lectures about that. There are countless examples of the UK Government cutting offices. So many jobcentres in the city of Glasgow have been cut that my constituents now have to take two buses just to get to one, and I do not see any Scottish Conservatives standing up for that.
My hon. Friend makes an excellent point. I am just about to go on to talk about not only the crumbling PFI schools that we are now left with and which the local authorities are paying for—there is no transparency and accountability on these contracts—but alleged criminality that has taken place around these contracts in my constituency of North Ayrshire.
I share my hon. Friend’s frustration with this. When I was a councillor in Labour-run Glasgow City Council, if we wanted to see a contract, we had to go and sit in a room and read the contract; we could not even take it away. When the council discovered that the company had managed to build IT and home economics rooms without ventilation, it cost the council a fortune to reopen the contract and get those things put right.
Again, my hon. Friend points to the lack of accountability and the hotchpotch—the rushed contracts put together by PFI, which benefited somebody, but did not benefit our local authorities or our children, and they do not benefit the patients in hospitals.
There is no better example of the need for new clauses 14 and 15 than North Ayrshire Council in my constituency. This Labour-run council had a PFI process that was severely flawed and was uncovered by local journalist Campbell Martin. Some have even insisted that criminal activity was involved, since while the council appeared to have two bids for construction projects—therefore seeming to provide the genuine competition required by EU procurement rules—in fact, the evidence suggested that one of those bids was from a subsidiary of the other company submitting a bid, so there was actually no competition at all. The Labour council was made aware of this before the contracts were awarded, but awarded them regardless. In the opinion of one ex-detective, the evidence showed
“criminality from start to finish.”
Another former officer stated that a common law crime of forgery and uttering should have been pursued. Right there we see the need for more transparency. I for one would like to see more transparency on the tax arrangements of such companies, as this is very much in the interests of the UK’s public finances.
All this information relates to a public-private contract now costing taxpayers over £1 million every month in North Ayrshire. Add to that the schools that are crumbling across cities such as Edinburgh, and we have real questions about these PFI firms. For projects of a capital value of £4 billion in Scotland, we will repay £22 billion, with our schools spending 8% of their budgets on paying off these Labour PFI debts. Can we really allow any lack of transparency around the tax affairs of such companies?
It is absolutely essential that there is more transparency around how UK public finances finance public sector projects. The tax affairs of these companies and their wider financial affairs need to be open to scrutiny because they build or have built our public assets. I urge the Committee to support new clauses 14 and 15.
I refer the Committee to my entry in the Register of Members’ Financial Interests.
Several provisions in the Bill will help to deal with money laundering and tax avoidance, and I want to touch on a few of them, as well as on some of the comments that have been made by Labour and SNP Members, but first I would like to echo some of the Minister’s comments about tax in general. Conservative Members pride ourselves on having a low-tax but fair system that rewards work and enterprise, but ensures, in all things, that when someone has a tax liability, they should indeed pay it.
Tax should be low right across the United Kingdom. One of my Scottish colleagues referred to charges for higher-rate taxpayers in relation to the movement of residency between Scotland and England. As I am sure that SNP Members will appreciate, it is not just higher-rate taxpayers who are affected. As has been well documented over the past few months, anyone earning over £26,000 in Scotland is now worse off than if they were anywhere else in the United Kingdom. In fact, it had to be confirmed by one of the senior generals in the British military that because of the SNP’s changes, men and women in the British armed forces would pay more tax in Scotland than they would anywhere else in the world. These changes are disadvantaging my constituents and companies.
The counter-argument is that somehow those tax changes will make things fairer for my constituents, that they are providing huge opportunities, and that we should be ashamed of ourselves for not doing more. As my hon. Friend the Member for Walsall North (Eddie Hughes) said, the tax changes introduced by this Conservative Government have increased constituents’ income by £1,250. The tax changes made by the SNP in Scotland have given my constituents 38p a week. That is it—all this change, all this cost and all this disadvantage for 38p a week. If the SNP Government are going to make changes, they must make real changes that make people’s lives better and follow some of our copybook.
A key point has been raised about Scottish limited partnerships. I sat on the Committee that considered last year’s Finance Bill, and when we discussed that matter with several Opposition Members, I voiced my support for changing these partnerships. We saw a change in the law in 2017, and there are now disclosure requirements for those in a limited partnership, but I want to ensure that the context of these partnerships is understood. They were originally enabled under the Partnership Act 1890, and then confirmed again in 1907 by Scottish, English, Welsh and Northern Irish MPs, so this measure was not somehow imposed in Scotland.
Does the hon. Gentleman acknowledge that the regime of persons with significant control has not been enforced to any extent? SLPs owe the UK Government £2 billion in fines. Would he not welcome that money for his constituents?
I thank the hon. Lady for her intervention. Whenever we have made a law, we should enforce it. I recognise the Government’s contribution through investing more money in HMRC, but another key area is Companies House, where a lot of this information is held. I would argue that it certainly could do with extra resources to ensure that things can be properly cross-referenced. A number of issues in my constituency have revolved around significant control and ownership of different corporate entities across the United Kingdom. Companies House would benefit from additional resourcing to help to tackle some of these issues.
The hon. Member for North Ayrshire and Arran (Patricia Gibson) talked about PFI schemes. She was very critical of Labour’s schemes when it was in administration in Edinburgh. It is important that the SNP takes some responsibility for the fact that it has been in power for over a decade, as the implementation and management of a number of these PFI schemes was overseen by the SNP. Although they have now converted to the PPP scheme, there are still a number of criticisms, including of the healthcare facility in North Ayrshire. It is right to be critical, but that criticism should be even-handed.
I will just make a bit more progress.
The successes that we have seen from this Government include lowering corporation tax, which has led to record income from corporation tax, and collecting an additional £185 billion of revenue since 2010, which we would not have been able to achieve were it not for the Government’s tightening of tax and tax avoidance measures.
The Conservative party prefers to have a low-tax and fair system. Some of the measures in the Bill are specifically fit for purpose in this more globalised and complicated economy. For example, schedule 4 is on profit fragmentation, which means that Government can focus on where profit is earned rather than getting caught between the different jurisdictions in which corporate bodies lie.
Clause 83, on international tax enforcement, is particularly important. Before I came to this place, I worked in international finance. With multinational companies, it is very difficult to track where income is earned and where it will finally end up, and that may not be due to deliberate action by such companies. New tax enforcement measures that give HMRC and the Treasury additional powers of disclosure will be very valuable and will increase transparency in our tax system.
The hon. Member for Oxford East (Anneliese Dodds), who is no longer in her place on the Labour Front Bench—
The problem is that it is not being comprehensively enforced. About £2 billion is due in fines from SLPs. If the Government are not going to collect £2 billion, why on earth are they putting forward austerity cuts? They could have that money easily.
It will not have escaped the hon. Lady’s notice that by the fifth year of the five-year period there is a fiscal loosening of £30 billion—that is hardly austerity—and that the NHS will receive a huge amount of extra money, including the NHS in Scotland via Barnett consequentials. I think that we can say very clearly that this was not an austerity Budget. I agree, however, with her more serious point. As my hon. Friend the Member for Ochil and South Perthshire said, where a law is passed, it should be properly enforced, and if there is more scope to enforce this law, it should certainly be done.
A further legislative measure was announced over the summer in relation to transparency. By 2021, we will start recording the ultimate beneficial ownership of property owned by companies, which is an important measure, because some properties, particularly very expensive, high-end properties, are often owned in offshore companies, but there is currently no transparency in respect of who owns those companies. As of 2021, we will know who the ultimate beneficial owners are, and that will also create an interesting taxation opportunity that I strongly commend to the Financial Secretary.
At the moment, when an ordinary property is bought or sold by an individual, it triggers residential stamp duty, but when a transaction takes place whereby the company owning the property is sold, no residential stamp duty is paid, because, as far as the Land Registry is concerned, no change of ownership has taken place. At the moment, we have no visibility over any change of ultimate beneficial ownership, because it is not registered, but from 2021 we will, because that change will have to be registered. I suggest, for a future Budget, that a change of ultimate beneficial ownership should trigger a stamp duty charge as though for a direct change of ownership, as would happen if any of us bought a property. That would yield significant extra residential stamp duty.
I will give an example. I am aware of a transaction in Belgravia, not far from here, that took place two or three years ago. It was a collection of luxury houses developed by an offshore company—based in the Cayman Islands or British Virgin Islands—and sold to a Chinese gentleman for £110 million, but he did not buy the property and therefore no stamp duty was payable. He bought the offshore company and no stamp duty was paid. Had that change of ultimate beneficial ownership been registered and had stamp duty been payable, a stamp duty charge of about £16 million would have been crystalised for the Exchequer’s benefit.
I suggest we collect that sort of money in the future. Of course, that property is liable for annual taxation on envelope dwellings, because it is held in a company, but that only levies at a rate of £226,000 a year, so the payback period is 73 years, and most of these properties are traded more frequently than that. I challenged the hon. Member for Oxford East earlier to come up with some ideas for raising revenue and combating non-compliance. There is my idea. I hope that a future Budget adopts it and takes it forward.
I will conclude—I know the shadow Chancellor wants to hear more, but I have to disappoint him—by briefly addressing Government clauses 15 and 16 on intellectual property charges and charges in relation to fragmented profits. This is an extremely important area, because a number of large corporates are using intellectual property charges to spirit away profits attributable to UK operating activities.
Most notoriously, Starbucks used this about five or six years ago. It managed to extract almost all its UK profits by levying an intellectual property charge in relation to its beans. It said the beans were special beans and had a very high charge on them, and it managed to register pretty much zero UK profit. That is precisely the kind of intellectual property charge that these measures are designed to combat. An arm’s-length, third-party intellectual property charge cannot possibly result in zero profit for the company paying that charge, and it is right that the Government are taking further action.
Multinationals take their profits out of the UK and into, typically, the Luxembourg, Swiss or Caribbean jurisdictions, and intellectual property charges are more often than not the means by which they do so. I strongly commend clauses 15 and 16 for taking direct action to prevent avoidance measures that have undoubtedly cost the Exchequer. I think that I have spoken long enough about these clauses, which I shall be extremely happy to support if there are Divisions in 10 minutes’ time.
It is a pleasure to follow my hon. Friend the Member for Croydon South (Chris Philp), although, as ever, the problem with following him is that he has done such a thorough and detailed job of going through the minutiae of pretty much every single piece of the Bill that there is not a huge amount left for me to say. However, I will do my best and raise a few points that I know are particularly important to people and businesses—particularly small businesses—in East Renfrewshire.
One reason why these measures are so important comes back to the perception of fairness. Action to deal with tax avoidance and evasion is important because people often perceive that they are playing by the rules and doing everything right, while other guys—often the big guys with lots of money, who can afford to pay the “big four” huge sums—are able to find clever ways of reducing their tax liability.
There have been many examples of companies diverting profits, in a way that is not fair and is not right, to other jurisdictions with much lower tax levels to save themselves money. They are taking money that was produced when taxpayers in this country went into their shops and bought their goods, supporting them and their products, but that money is not being kept in our economy or reinvested in our economy. It is being shunted offshore to other jurisdictions, where it is swept up and often manoeuvred around other areas, particularly when a global business is moving it around to prop up less competitive and less successful parts of that business offshore.
Since 2010, an extra £180 billion or so has been brought in as a result of some of the measures that we have introduced. That is a huge amount, which is being reinvested in the country in which it was produced. It means more money for our schools, hospitals and small businesses—the sort of money that can give people a bit of a break.
I want to touch briefly on the new clause tabled by the hon. Member for Glasgow Central (Alison Thewliss). She talks frequently, and with a great deal of knowledge, about Scottish limited partnerships—rightly, I think, because they are being increasingly scrutinised and are coming under the spotlight. They have been around for a long time, and previously no one paid much attention to them—no one really understood what they were being used for. They fall within a slightly odd grey area in terms of the Companies Act 2006. In my former job as a pensions lawyer, they were used as a vehicle to allow companies to put an extra step between them and an investment. They helped companies to reduce their tax in relation to employer contributions that they had made through the sweeping round of funds.
That was a legitimate funding mechanism, but there is no doubt that because of where Scottish limited partnerships sit in relation to the wider tax system, they are being used pretty unscrupulously. A lot more stuff has been coming out about them, and I think that the hon. Lady is right to go on probing and testing to establish whether their proper use is being properly enforced and checked.
I am glad that the hon. Gentleman agrees with me about Scottish limited partnerships. Does he also agree that the whole scope of the issue needs to be investigated, and that the Government need to bring their consultation report back? It is clear that when one loophole is closed another opens, and there seems to be some evidence that people are now moving to Northern Ireland to try to get around the rules. The Government must do something very soon before people jump over and do something else.
The hon. Lady has highlighted the key point that I made at the beginning of my speech about highly trained and well-paid accountants. The Government are always playing catch-up because she is right: what happens is that a loophole is identified, it takes quite a long time to get a measure to close it through the process, and by then everybody has already moved on to the next thing. We need to get better at pinpointing—almost like in a game of chess, thinking two moves ahead and saying, “If we close this down, where are they going to move next?” These people working in the private sector are able to find these money-saving methods, so there is no reason not to have people working in government thinking along the same lines.
I support what the Government are doing to reduce the tax gap. It is important to bring in the extra money that is properly due in this country by closing loopholes and stopping the feeling that the big corporate guy is getting away with something while I, the guy struggling with my own small business, am paying what is due. There is a real sense of unfairness in the practices that these measures are designed to tackle, and I look forward to supporting them in four and a half minutes’ time.
(5 years, 9 months ago)
Commons ChamberI of course support my hon. Friend’s point on increasing the minimum wage for under-25s. Is she aware that the gap between the rate for 16 and 17-year-olds and the higher rate has widened over the past three years?
I am not surprised that that has happened, because any Government who believe that a 16-year-old can live on less than an over 25-year-old are not going to make rational decisions in relation to pay for those at the younger end of the age spectrum. It would be a very good move if the UK Government were to change their policy and move to a situation where 16 and 17-year-olds, and those all the way up to 25, and in fact those over 25, were paid an amount they could actually live on, rather than an amount that does not enable them to buy the day-to-day essentials.
My hon. Friend is totally right. Those budgets were ring-fenced to start with, but they are now absolutely emaciated. This is stopping us doing the prevention work that we should be doing. We made massive investments in public health, and they were having a real impact in terms of health gain. I am afraid that that is now going by the bye.
We know that there are 14 million people living in poverty in the United Kingdom, 8 million of whom are working—the highest level ever. It is fine for Conservative Members to speak on a positive note about employment rates, but they should be asking themselves why we have such high levels of in-work poverty. That, too, brings shame on us. Two thirds of the 4 million children living in poverty are from working households. How on earth are young people expected to learn and to excel at school if they are constantly hungry?
The hon. Lady might not have had a chance to read it yet, but the all-party parliamentary group on infant feeding and inequalities, which I chair, produced a report that came out last week. It found that even working families are now struggling to meet the cost of infant formula, so they are having to stretch it out, to the detriment of their children’s health. So this problem is starting even before children go to school, because babies are not getting the nutrition that they need.
That is absolutely right. I will come on to some of the really worrying figures about how, from birth, our children are being affected because of the poverty that they are experiencing.
What about disabled people? Disabled people are twice as likely to live in poverty as non-disabled people because of the extra costs that they face around their disability. We have seen their social security support become absolutely emaciated. Given that we are the fifth richest country in the world, that is shocking—absolutely shocking. Four million disabled people are already living in poverty, with many now continually finding that they are becoming more and more isolated in their own homes.
Since 2015, as analysis from the Institute for Fiscal Studies and others has shown, those who are in the lowest income decile have lost proportionately more income than any other group as a consequence of personal taxation and social security changes. That is the important thing. My new clause is not just about taxation. We cannot see that in isolation from how we then ensure, as a country, that we are supporting people on low incomes—and that support is completely inadequate. What was put forward in the Budget does not go anywhere near repairing the damage that was done in the summer Budget of 2015.
Last month’s Budget produces only marginal gains to the household income of the poorest, while reducing the number of higher-rate taxpayers by 300,000. The Government’s regressive measures have done nothing to reduce the gap between the rich and the poor. When cuts to household incomes are combined with the cuts to public spending and services, the impact is even more dramatic, and again with disproportionate cuts to Government funding to towns and cities across the north, as evidence has repeatedly shown.
The effects of all this on life expectancy are now being seen, with health gains made over decades now falling away. Life expectancy has been stalling since 2011, and it is now flatlining, particularly in older age groups and for older women. In the same week—the very same week—that these data came out last year, the Government actually increased the state pension age. We know that our life expectancy is flatlining. For women—think about the 1950s-born women—it is going backwards, yet we are still putting up the state pension age. What is going on?
On top of this there are regional differences in how long people will live, with these health inequalities reflecting the socioeconomic inequalities across the country. Life expectancy for men in Windsor and Maidenhead stands at 81.6 years, while in my Oldham and Saddleworth constituency it is 77. Even within these areas, there are differences in how long people will live. Again, in the Windsor and Maidenhead local authority area, the life expectancy gap is 5.8 years for men and 4.8 years for women, while in my constituency it is 11.4 years for men and 10.7 years for women. These health inequalities are reflected right across the country. The gains Labour made in reducing health inequalities are now being reversed.
Similarly, the Royal College of Paediatrics and Child Health reported last month that infant mortality has started to increase for the first time in 100 years. Four in 1,000 babies will not reach their first birthday in the UK, compared with 2.8 in the EU. These are the unacceptable consequences of austerity. I welcome the Department of Health and Social Care commissioning Public Health England to investigate the causes of this declining health status, but it is very late in the day. Public health specialists—renowned epidemiologists such as Professor Sir Michael Marmot, Professor Martin McKee and many others—have been calling for this for the past 18 months. We already know from the work that they have been doing that they are pointing the finger towards austerity. It is imperative that in addition to stopping austerity, and the misery and poverty that is being wrought, we tackle the inequalities within and between regions and communities.
An analysis of the effects of the Budget’s personal taxation measures is part of this, but it should not be seen in isolation. This would be outside the scope of the Bill, but the Government should be doing an analysis of their social security and public spending cuts. Reducing the gap between the rich and the poor is not just good for the economy. As evidence from totemic reports such as “The Spirit Level” shows, life expectancy then increases, as well as educational attainment, social mobility, trust, and much more. Fairer, more equal societies benefit everyone. Inequalities are not inevitable—they are socially reproduced and they can be changed—but to tackle them in all their forms takes commitment, it takes courage, and it takes leadership.
I thank my hon. Friend for his comments.
As I was saying, allowing taxpayers to keep more than it would have been possible to do previously is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage, thanks to this Government. We are seeing the lowest paid paying less tax but also bringing home more money. The annual earnings of a full-time—
Does the hon. Gentleman not accept that the national living wage is not actually a wage that one can live on, and that it does not apply to those under the age of 25? In fact, the gap for those aged 16 and 17 has been going up every year.
The national living wage is a critical part of ensuring that some of the lowest paid in our society earn much more and take home more pay. Earnings for a full-time minimum-wage worker will have increased by £2,750 since it was introduced in April 2016.
(5 years, 9 months ago)
General CommitteesIt is a pleasure to join you and everyone else in the Committee today, Mr Hanson.
I reiterate the concerns expressed by the hon. Member for Stalybridge and Hyde about this process and the necessity for it. From the Scottish National party’s point of view, whatever processes and procedures we put in place, all of these regulations will fall woefully short of what we have at the moment as a member of the European Union and the customs union. The Government cannot hide from this: regardless of what deal comes back, it will not be as good, effective or efficient as the system we have at the moment as a full member state. However the Government try to dance around that, it is the reality.
I appreciate what the Minister said in his statement this morning, but there is still an awful lot of uncertainty around this issue. Membership of SEPA is not a done deal and we will not know for some time when it will be a done deal. It would be incredibly useful if the Minister elaborated on the timescale, because we do not even fully know what it will look like to be an adjunct or extra member of this scheme. The reality is that we will have to continue to align with the scheme. We will be a rule taker, accepting all that comes as part of being an additional member of SEPA, without having much influence over how its rules work and how they affect us.
That is detrimental not only for financial services, but for consumers, who have seen the huge benefits of being able to make transactions in euros easily and efficiently, almost without thinking about it. We all see that when we go abroad on holiday and use our credit card or whatever else. We no longer have to have travellers cheques and things are no longer difficult when we go away. Financial transactions have become something that we do not need to think about, because they happen so easily and quickly, whether online or in person. That has been a huge benefit of being in the European Union. I do not think we have talked enough in the debate on the EU referendum about the simplicity that this has brought to people. They no longer need to think about these technical matters—these things just happen.
In moving out of the regime, we will have to set things up ourselves. The Minister mentioned that the FCA will take on some of the financial regulatory framework and standards, and that HM Treasury will take on other matters to do with credit transfers. Again, that creates further burdens on Government, such as the costs of setting up the regimes and ensuring, as I have mentioned previously, that we have the necessary staff, expertise and continuing engagement with the SEPA regime to ensure that we are not caught out if something else changes that we are not involved in setting up. We will have to take whatever comes, or we will risk falling out of the system altogether.
The Minister mentioned that we could offer to share our information on a discretionary basis. Is the reverse also true? Will the regimes under SEPA engage with us on the same basis? We do not know that yet. I ask the Minister to clarify that. It is all very well saying, “We will do our bit and we will help,” but if there is no reciprocal arrangement, it is pretty much worthless.
Finally, it would be worthwhile if the Minister outlined clearly the full implications of not being in SEPA. Will it mean, in a no-deal scenario, that transactions will cease? That would have a detrimental impact across all industries and areas. We have to know absolutely clearly what the implications are of no deal and not getting some kind of membership arrangement with SEPA, because if we do not have that, the impact on our economy will be hugely detrimental. We need to know what kind of catastrophe we may face.
I will respond to the substantive points raised by the hon. Members for Stalybridge and Hyde and for Glasgow Central. First, I remind the Committee that these statutory instruments are needed to ensure that the regulatory regime that applies to payment institutions, electronic money institutions and account information service providers works effectively if the UK leaves the EU without a deal or an implementation period, and to maximise the prospects of the UK maintaining participation in SEPA.
The hon. Member for Stalybridge and Hyde spoke about the undesirability of this process. I acknowledge that going through 30 or so debates in this place is an interesting experience, but we are doing it to ensure that, in the unlikely scenario of no deal, we have a comprehensive regime in place.
On the overall situation with financial services, the negotiations are ongoing. I acknowledge the speculation over whether we have reached a deal. I am not able to confirm anything, but we are seeking to establish a strong bilateral relationship with EU regulators to fully mitigate the risks of being subject to equivalence decisions that are, at the moment, inadequate. I cannot comment further on that, nor on the progress on the deal as a whole. Members will appreciate that, as a relatively junior Minister at the Treasury, I am not privy to that information.
I can comment on some meaningful points. Concerns were raised about changes to consumer safeguarding as a result of the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations. The Payment Services Regulations 2017 require that payment and electronic money institutions safeguard consumer funds to protect consumers in the event of an institution becoming insolvent. The most prevalent method used to safeguard funds is for the firm to hold them in a segregated account with a credit institution. A significant number of UK firms hold safeguarding accounts in the rest of the EU, and they will still be able to do so once the statutory instrument comes into force. They will also have the option of using safeguarding accounts based elsewhere in the world, subject to adequate guarantees of consumer protection. That is in line with existing practices for protecting client assets in investments.
On the consultation undertaken, the hon. Member for Stalybridge and Hyde quite reasonably said that the usual process has been somewhat truncated. None the less, the draft regulations were published on 5 September and laid on 9 October. Consultation took place with key lobby groups in the industry, in particular UK Finance. We held a series of bilateral conversations with banks, FinTechs, payment providers such as PayPal and lawyers to verify the credibility of the statutory instruments. Although we have not undertaken a formal consultation on the statutory instruments, we have submitted them for approval in terms of the impact assessment and we expect that to come through imminently—next week, I hope.
I was asked about the impacts if the UK loses access to SEPA. SEPA enables efficient, low-cost euro payments to be made across participants. If, as expected, the UK secures a withdrawal agreement from the EU, EU law will be applicable in the UK during the implementation period and the UK will automatically remain within the geographical scope of SEPA. The Government’s approach to onshoring legislation is designed to maximise the prospects of the UK maintaining participation in SEPA in a no-deal scenario.
On the determination of the application to SEPA, which was raised by the hon. Member for Glasgow Central, UK Finance has made an application. Applications from non-EEA countries are determined by the European Payments Council, which is an international not-for-profit association; it is not part of the EU institutional framework. I cannot give the hon. Lady a categorical assurance over the timetable, because it is a matter for the EPC. UK Finance is in dialogue with it and has made the necessary provisions to do that in a timely way.
The hon. Lady also raised the impact of the UK losing access to SEPA. I think I have covered that.
I am sorry: what are the impacts if the UK loses access to SEPA? In the unlikely scenario that the UK does not maintain participation in SEPA, UK consumers could face higher transaction costs and longer transaction times when making euro payments. That is precisely why we are making these provisions and I am happy to concede that. That is what underpins the whole of this legislative effort through statutory instruments.
The hon. Member for Stalybridge and Hyde asked why safeguarding goes beyond the EEA. In order to protect consumer interests, we wanted to make it possible for firms to use as wide a range of safeguarding accounts as possible. Restricting them only to UK accounts could place a burden on firms and restricting them only to EEA accounts would not be legally viable under World Trade Organisation rules on a most favoured nation status.
I hope that I have answered all the questions that were raised. There are two more, possibly. The hon. Member for Glasgow Central asked if the EU will engage with UK authorities on the same information sharing basis. Obviously, that is ultimately a matter for the EU and will be determined by EU law after we leave, but we hope that the UK authorities and the EU authorities maintain a constructive working relationship. Having visited two EU countries last week, I think there is a lot of good will towards the maintenance of that relationship, and that underpins our approach to the negotiations.
We should not assume that in a no-deal scenario there would be outright hostility to the UK; we hope we would be able to manage that. [Interruption.] I am seeking to be as constructive and reasonable as possible. I do not mean to be flippant about it. We are doing everything that we can to ensure that those relationships are as strong as possible. Throughout the last 40 years, we have played a leading role in influencing the regulation of financial services and many are uncomfortable with us leaving, but that means that the dialogue can still be very constructive in terms of our influencing future regulation.
Finally, the hon. Member for Stalybridge and Hyde asked about the prioritisation of the SEPA measure. It is a priority, as part of the Government’s approach to onshoring legislation. It is designed to maximise the prospects of the UK maintaining participation in SEPA. We are having a complex series of engagements in these Committees, but I am reassured that we have had a full discussion. I hope that the Committee is reassured and has found the sitting informative, and that we will now be able to support the regulations.
Question put and agreed to.
DRAFT ELECTRONIC MONEY, PAYMENT SERVICES AND PAYMENT SYSTEMS (AMENDMENT AND TRANSITIONAL PROVISIONS) (EU EXIT) REGULATIONS 2018
Resolved,
That the Committee has considered the draft Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018.—(John Glen.)
(5 years, 9 months ago)
Commons ChamberIt is always a pleasure to follow the hon. Member for Walsall North (Eddie Hughes), although I sometimes wonder how one can follow that. It was certainly very interesting.
I want to touch on a point made by the hon. Member for Thirsk and Malton (Kevin Hollinrake). I congratulate him on receiving Royal Assent for his private Member’s Bill. It was good to see in the Red Book that the Parental Bereavement (Leave and Pay) Act 2018 is moving forward. He spoke at length about business; I know he is a doughty champion for that. He would do well to look at what the SNP Government in Scotland have done in lifting 100,000 small businesses out of business rates since 2008. They have been doing that for 10 years, so the Scottish Conservatives can come north on occasion to see that.
I rise to support the reasoned amendment in the names of my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) and other hon. Friends from the Scottish National party. As the Bill derives from the Chancellor’s recent Budget, I want to make a couple of comments more widely about the Budget—and what was missing from it—before moving on to talk specifically about clause 5.
One minor benefit of not being able to speak in the Budget debate was that I had time during the weekend that followed to take the temperature of my constituents concerning the Budget. The general feeling on Shettleston Road is that austerity is far from over, and that is something that my hon. Friends and I hear week in, week out at our Friday surgeries. The Budget in fact prolongs austerity. The Prime Minister said that austerity was coming to an end, but the Budget failed every single test when it comes to the claim that the end of austerity is now in sight.
For example, there were no transitional measures to support the WASPI women, such as Anne Dalziel from Garrowhill. Anne received no notice from the DWP about the changes to her state pension age and is one of the many women in this country who have been shafted time and again by the British Government. To give an example of just how arbitrary the changes are, Anne has friends who were also born in 1953 and they received their state pension in 2016, but because Anne was born on 23rd December, her pension age was deferred three years to 2019. There were no measures in the Budget to help Anne Dalziel, and it is little wonder that the WASPI women in the Gallery staged their protest in the way they did. They have wholehearted support on these Benches.
Likewise, there were no measures in the Budget to halt and fix the roll-out of universal credit, which is due to be unleashed on my constituency next month and will undoubtedly cause social and financial misery just in time for Christmas. The amazing work that has been done by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) on Inverness, where universal credit has already been rolled out, shows the deep damage it has caused. The fact that the Government will not listen to my hon. Friends and halt the roll-out of universal credit in Glasgow, especially at Christmas, shows how mean they are.
My hon. Friend’s constituents, like mine, visit Shettleston job centre. Does it concern him as much as it concerns me that someone making a claim there on the first day universal credit rolls out—5 December—will not be entitled to any money until 9 January?
My hon. Friend is absolutely right. Of course, one reason that we share that jobcentre is that the British Government, in their wisdom, closed Bridgeton jobcentre in her constituency, in addition to closing Parkhead jobcentre and another six jobcentres in the city of Glasgow. Although Conservative Members paint a rosy picture about the work they are doing in their local communities, the work we see in Glasgow shows that they are absolutely out of touch and are pulling the rug from under our constituents’ feet.
Clauses 61 and 62 address gaming duty. My hon. Friend the Member for Inverclyde (Ronnie Cowan) has campaigned on fixed odds betting terminals. Like other hon. and right hon. Members, I was genuinely sorry to see the hon. Member for Chatham and Aylesford (Tracey Crouch) resign from the Government, but she was right to do so. The reality is that fixed odds betting terminals have become a massive public health issue in our constituencies. I see that in Baillieston Main Street, where we have three betting shops lined up next to each other. The proliferation of these terminals is undoubtedly one of the worst things for public health. Whether it is the knock-on effect of depression, debt or even suicide, it is clear that fixed odds betting terminals need to be considered through the prism of public health, and not Treasury revenue.
I am happy to join you.
Some 2.4 million households will keep an extra £630 of income per annum, and I am sure that those who need support will continue to receive it. It is no longer a wicked system where if someone wants to work beyond the 16 hours, they lose money.
The hon. Gentleman says that it is no longer a wicked system, but it is a wicked system for those who have more than two children. Why does he think it is justifiable to take so much money out of the mouths of kids in his constituency?
The system is set, and it is what is affordable to the taxpayer. You have to plan your children and what you can afford to bring up, as I planned—[Interruption.] It is not a crime to plan—[Interruption.] It is not a crime to plan your children and how you manage those children, and whether you have one—[Interruption.] That is the choice of the individual; it is not the choice of Government.
Is the hon. Gentleman aware that this benefit will apply to all children, regardless of when they were born, and could not reasonably have been planned for from next year? Is he also further aware that the social security system is supposed to be a safety net for us all and not meant to punish people for the circumstances they are in?
I thank the hon. Lady very much for that intervention—I do not agree with what she says. It is a safety net—it is a security net. My family have benefited from it. Nobody is saying they want to dismantle the welfare system. It has to be a manageable and affordable welfare system for the taxpayer and it must support the individual, as it does—[Interruption.] Thank you very much.
I have previously in this House expressed my delight at the freezing of duties for beer and whisky. That was agreed on, and we certainly found common ground across the Floor. We all like a dram and I am delighted that duties were frozen, particularly given that businesses in Scotland, not least in the whisky industry, will benefit from that freeze.
Having been a smoker, I was among those who noted an increase in duty, but I believe that this increase is fair. Together with the introduction of a duty on heated tobacco, this may guide people and cause them to reflect on their smoking or vaping habits in future, with the obvious health benefits. As one who has given up, I would advocate giving up smoking, whether vaping or conventional smoking, and that way the Chancellor will not get people with the extra duty. I realise that for many, that can be challenging, but giving up smoking is the best way to avoid tax on cigarettes. [Interruption.] It is lawful tax avoidance, as the hon. Member for Glasgow South West (Chris Stephens) said.
Similarly, the modest increases in vehicle excise duties for cars, vans and motorcycles to bring them in line with RPI inflation from 1 April 2019 may cause people to think about the type of vehicles that they own. People do not need to drive a gas-guzzler that consumes a lot of fuel, and there is the cost of fuel. They could improve the environment and increase the amount of money in their pocket. It would have a positive effect on the environment. The freeze on heavy goods vehicle excise duty for 2019-20 will, however, assist many small and medium-sized businesses throughout Scotland and the UK.
Opposition Members have sought to criticise the Chancellor for the suggestion that the Budget may need to be revised upon our leaving the EU. I do not see any logic in a notion that a reappraisal would be unhelpful after our country has left the EU. Surely such a reappraisal is entirely sensible and pragmatic, if it is indeed needed. The Opposition seem to concentrate on the same old chestnuts, but I would prefer that we concentrated on the little acorns in the Bill—for out of these little acorns, oak trees will grow. They will help the UK to flourish and austerity will indeed become a thing of the past, if we are all self-disciplined and unite behind the Chancellor, his Budget and this Bill.
(5 years, 9 months ago)
General CommitteesIt is a joy to be here with everyone again this afternoon.
I echo the comments of the hon. Member for Oxford East about the whole process and about the way in which the measure is being scrutinised. I too have huge concerns about how close we are to the point of Brexit, which is 144 days today—not very much time at all. It is quite worrying to hear that the Bank of England is only now consulting, with 144 days to go; that seems a little late in the day, considering how far we now are from the point of the vote.
There are still many, many more SIs to come before us in this time and I am concerned about the burden that puts upon everybody—on financial firms, on Government, and on the Bank of England and other institutions—when they could be doing far better things with their time. They could be regulating and reforming the financial services sector, trying 10 years after the crash to fix the problems that we have not yet fully repaired. Instead, all we are doing is copying and pasting, and spending a huge amount of time and effort doing these things when we could be doing something far more useful.
I remind Members that Scotland did not vote for this. Scotland voted to remain by a considerable margin, and we would very much like to remain in the EU single market and customs union as the best worst option, as it seems to be the only mechanism by which the financial sector would be able to continue with market access and with the connected jobs investment. That would be the greatest means of reducing the risk of Brexit.
I remain concerned about the lack of certainty, and I am not the only one. Mark Carney has also been clear that there is not a great deal of certainty about the relationship between the EU and the UK over future derivative trading. In June, on the publication of the Bank of England’s financial stability report, Bloomberg reported:
“Firms may find themselves unable to service insurance policies and as much as 96 trillion pounds…of cleared and uncleared derivatives contracts”.
That is deeply worrying, and I would be grateful if the Minister gave us an update on what is being worked on with the EU in that respect. The temporary recognition regime relies on co-operation with the EU, with the EU making good on its side of the bargain. The Government’s own Brexit paper states that
“without EU action, EEA clearing members and trading venues will no longer be able to use UK CCPs to provide their clearing services. In addition, EEA customers could no longer meet the requirement to centrally clear for some products that are in scope of the clearing obligation by clearing through UK CCPs, such as interest rate swaps.”
That is from the UK’s own no-deal Brexit publication, and it remains very worrying that that is the case.
I am also concerned, as I have previously mentioned, that we are burdening the Bank of England with an extra layer of responsibility in addition to the regulatory responsibility in the other SIs—we saw the huge list of responsibilities in a previous SI Committee. I seek further reassurance that the Bank of England has not just the skills but the staff it requires to meet the obligations, to ensure that the resources are in place in good time and that everything runs smoothly. There would be nothing worse than having the regulations and no one to enforce them. That would be a huge concern.
I note that regulation 26 states:
“The Bank of England may require central counterparties to pay fees in connection with the discharge of any of its functions under this Part.”
I would be interested to know what the scale of fees might be and whether they could lead to a lessening of competition or to further barriers to markets as we leave the EU—perhaps we will become a less desirable place to do financial services. Putting an additional financial burden upon firms as a result of the Bank of England fees could create a serious problem. I wonder whether the fees are to meet the cost of the extra staff and legislation, and everything else that is being done, and I seek clarification on that.
Finally, paragraph 17 of the impact assessment states:
“Transitional relief could be granted to particular firms, classes of firms, or to all firms to which a particular onshoring charge applies, including firms that are entered into one of the transitional regimes referred to above. Firms would not need to apply for transitional relief…regulators will issue ‘directions’… It will be within the regulators’ ‘discretion’ as to how to exercise this power.”
I seek clarification on that; it sounds a little woolly.
I am concerned about enforcement. If there are many other things to do, will that aspect of enforcement and regulation go by the wayside and we will let firms get on with it? We need to be robust and to ensure that when things move over, regulation and enforcement move along with them, so we do not end up as we did with the crash, due to light-touch regulation. We cannot use Brexit as a means of moving away from the regulations that the financial services sector needs to have in place.
We need more clarity about the detailed points that the hon. Member for Oxford East and I have raised, and the concerns of Members in the Lords. It is a matter of concern that such measures come along with great regularity, with huge questions being unasked, and with little underlying scrutiny.
To be honest, I will have to write to the hon. Lady to clarify that detail. The essential point is that the statutory instrument is for a no-deal scenario; if we get a deal, we will not need the SI because we will be in a close working partnership and we will have the implementation period. I will need to write to her about the precise mechanism that we would use to get rid of the SI or withdraw its provisions, but that is my attempt to answer her six questions.
The hon. Member for Glasgow Central asked about fees and, quite reasonably, echoed a number of other points. There has been dialogue with the industry on the fees, which will be proportionate to the process that the Bank of England will need to go through. In practice, these firms do not exist in massive numbers. I cannot give her the cost in pounds and pence, but it will be aligned to industry expectations and will not impede the choice to register.
Can the Minister give any indication whether the fees will start straight away, or be phased in over a longer period?
On the fees that will be necessary to go through the process of authorisation with the Bank of England, it would be best if I wrote to the hon. Lady to give clarity on how they will be applied.
I have had conversations with the relevant people in the Bank of England and am confident that it is making adequate preparations and effectively allocating resources ahead of March 2019. As demonstrated by the letters published in December 2017 and in March and October this year, the Bank will continue to work closely with CCPs to provide guidance on applications with a view to making the process run as smoothly as possible.
The hon. Lady made a wider point about resourcing and skills. I have checked the position, after previous debates in which the right hon. Member for North Durham made similar reasonable points, and there is provision for regulators to extend their resources if required.
I hope that I have adequately responded to points raised, that the Committee has found this afternoon’s sitting informative, and that it will join me in supporting the draft regulations.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018.
(5 years, 10 months ago)
Commons ChamberI am grateful for that intervention. It is true that men need to discuss this, but not dominate. It is also important that they listen. I have often stood here and been critical of social media, but if we examine social media today, we see that the support for World Menopause Day out there is very positive. A huge amount of work is being done; there is a huge amount of medical and academic research, and it is good to see people drawing attention to it. Today has also been an opportunity for women to share their experiences on television, radio and social media, which in itself is a huge step forward in breaking the taboo, and it is for men to listen.
I commend the hon. Gentleman for bringing this debate to the House. He is making some very good points, but I just want to ask that we do not lose sight in this debate of women who have the menopause brought on earlier in life than they may have anticipated by chemotherapy treatment. Some younger women also experience it earlier than others might expect, so we need to have an understanding of the full spectrum of the menopause and not just assume that it affects only women of a certain age.
That is an excellent point. One of the most important things to come out of today, particularly with the work that Michelle is pushing forward, is that society’s view of what the menopause is just happens to be wrong—I use those words carefully. We need open discussion, with women being able to talk about symptoms when they attend clinics and go to their general practitioner. On behalf of the NHS, I must say that a huge amount of good work is going on in explaining to women who present for other matters what the potential outcomes of treatment are, but this should never be a frightening experience for a woman to speak about, whatever her age. We should live in a society where women can share that and expect to be heard empathetically and with respect.
As I move on to the request being made of employers, let me say that society should be able to amend its ways to facilitate dealing with these symptoms, because women who are going through the menopause have enormous amounts to contribute, and employers should not see it as a barrier and as an excuse to leave work. We should have facilities and methods of support—it does not take a lot to provide those. I know some of my colleagues have fans, but here we are in 2018 unable to cool or heat buildings to a point where they are acceptable to work in. These are the simple things that would make a huge difference to people’s lives. As I have said, these are people who are still expected to contribute to society, to be driven and to make changes and take steps up—and why shouldn’t they? The menopause should not be a blockage to that.
I am aware that others wish to speak, and it would unforgivable for a man to steal all of their time. I would just like to finish by saying that I ask all men, myself included, to take up the challenge of discussing the menopause with the people close to us. We should discuss it openly at home and in the workplace, so that for once our mothers, wives, sisters and friends do not need to feel that they suffer in silence.