Draft Financial Regulators' Powers (Technical Standards Etc.) (Amendment Etc.) (EU Exit) Regulations 2018

Alison Thewliss Excerpts

Wednesday 10th October 2018 General Committees

[Alison Thewliss (Glasgow Central) (SNP)]

I will not go into the same level of detail as the hon. Member for Basildon and Billericay, but I will touch briefly on some of the issues behind the draft regulations. As far as the Scottish National party is concerned, neither the draft regulations nor the way Brexit is proceeding should mark the end of cross-channel co-operation on financial regulatory enforcement. As was said, we are 10 years on from the financial crash. Some of the issues that came out of that crash have not, for us, entirely been resolved yet. My great fear relates to some of the chat that is around about Brexit being a means of deregulation, and of watering down very important financial regulations that came about through the EU.

The hon. Member for Oxford East talked in some technical detail about how we got to this point and how the regulations were formed. We are passing a lot of the regulations straight from one unaccountable body, as the Brexiteers would have it, to other unaccountable bodies—the FCA and others—with very little scrutiny from Parliament, now or in future. There is no detail on how Parliament will have any control over them.

Regulation 10 of the statutory instrument states:

“A standards instrument may be made only if it has been approved by the Treasury”,

and there are two conditions on which the Treasury may refuse to approve a standard. The first is if it would have “implications for public funds”. Perhaps the Minister will give more detail on that, but it seems to be pretty political. The other is if it would

“prejudice any current or proposed negotiations for an international agreement between the United Kingdom and one or more other countries, international organisations or institutions.”

Again, that is more of a political thing; it is entirely in the hands of the Treasury to approve or not approve it. It worries me that some of the regulations may be watered down in order to get those trade deals—that the very high standards that we have managed to achieve through the EU could be watered down at the expense of trade deal with countries that are not quite as well developed in their regulations, or that have a different regulatory approach from ours.

I echo the points made by the hon. Member for Oxford East about capacity and timescale. To break down the long list of regulations that will be transferred over, the FCA gets 77, the Prudential Regulation Authority gets 26 in its own right and the Bank of England gets 20, but jointly, the PRA and FCA together get 51, and the FCA and the Bank of England get 10 together. The Payment Systems Regulator gets only one to look at, so it will probably be okay, but who knows?

I am not clear whether the communication lines for joint co-operation exist already in each of the 61 areas in which co-ordination is proposed, or whether they are yet to be set up. Are the mechanisms in place for that co-ordination and co-operation? That needs to be done correctly. The lines of communication need to be open and well understood. Mechanisms may well need to be in place, so if the Minister has any more detail on how those mechanisms will operate, that would be useful and reassuring.

There has been a lot of chat about how the City of London will be affected. The BBC quoted the Minister on the Bank of England estimate that 5,000 jobs will be lost in the City. That figure does not appear to be in dispute, and he does not appear to be greatly worried about that. I am deeply worried about it, because there are implications beyond the City: Glasgow has a financial sector that employs around 30,000 people. Our financial services district has grown immensely over the past decade; Barclays has invested in the River Clyde site. We have the biggest insurance centre outside London, which goes back to the 1700s and employs around 8,500 people. They need to know about the regulations and how they will be affected.

In Edinburgh, around 40,000 people are employed in the financial sector, with more than 30 banks having operations there, and three of the UK’s leading insurance companies having their headquarters there. This is not just a City of London debate; it profoundly affects Scotland. I am interested to know what discussions the Minister has had with his counterparts in Holyrood about the risks—or opportunities, if that is what he feels there will be—for Scotland in all this.

For us, it is a retrograde step to lose the European Banking Authority; we have lost the influence that helped us to set up a lot of the rules. The explanatory memorandum stresses that

“UK regulators have the necessary expertise and resource”

to maintain them, because we were part of setting up a lot of the rules and regulations. We are losing not only involvement but influence in that. The EU will continue to make its own rules, create directives, and collaborate and co-operate. We will be playing catch-up with that if we still want to have any engagement with it. We will continue to be rule takers, rather than rule makers. We are losing out because of Brexit, and will lack influence thereafter, which is hugely frustrating. I deeply regret that Scotland is being shackled to that because we are not independent. We would be part of the EU, and want to have a part in all this. We would not want to turn our back on the co-operation that has been so good for the Scottish economy.

I seek reassurances from the Minister, because I am deeply worried about that loss of influence and what it will mean for jobs in my constituency and Scotland. I am deeply worried about the watering down of regulation after Brexit and the overall loss of control from this place that we will see. If only a limited amount rests in the hands of Treasury Ministers, and all this goes to the FCA and other institutions that we do not have direct control over, we will lose any influence that we might have, and the system that we might want to set up. We will face the economic issues that we had in 2008 if we cannot be assured that we have the control, and the tight and robust regime, that will protect us all.

--- Later in debate ---

[Mr Jones]

So basically the Minister is saying, “Take ‘EU’ out and stick ‘UK’ in.” If that is the case—

[Alison Thewliss]

What is the point?

[Mr Jones]

That says a lot about a lot of these things. As this SI goes through, therefore, have those various bodies that will get these powers got the necessary technical expertise to be able to determine that, or is that a Treasury decision?

[John Glen]

They have been given the responsibility where their technical expertise is formed and known, and where their role currently is to deal with this stuff. It is not exclusively about a language change, but I am just trying to give an indication of the lack of policy innovation that is going on here.

[Alison Thewliss]

Will the Minister give way?

[John Glen]

I was trying to bring clarity, but I seem to have done the opposite. I am happy to give way.

[Alison Thewliss]

Let us see if we can get some clarity. The Minister is saying that recommendations will be made by the regulatory authorities to him as the Treasury Minister, but he can overrule that, if that will cost him money or it will cost him in a trade deal.

[John Glen]

Where there are deficiency fixes that the regulator has proposed, they will be subject to approval, but I will be scrutinisable on those decisions, through Select Committees and the normal mechanisms of Parliament.

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[John Glen]

The purpose of this process and this statutory instrument is to provide the framework to onshore the binding technical standards that are needed. Turning to my hon. Friend’s point, I will ensure that the FCA is aware of the issues that have been raised—I am sure it already is. I am told that this summer, it launched a call for input to seek feedback for consumers and firms, which closed on 20 September. Next time I see Andrew Bailey—I see him regularly; I saw him just last week—I will ask him to consider that.

I will come on to the other points and the broader principles. Some of the considerations about where we will be in the future are subject to the deal that we end up with. Again, I do not want to be drawn into hypotheticals at this point. I will come back to my hon. Friend’s point in a minute.

The hon. Member for Oxford East raised a number of other issues about resourcing. The right hon. Member for North Durham also raised this, in terms of the regulators having enough resource. In my travels to Indonesia, Malaysia and Japan over the summer, I have seen that UK regulators are highly regarded and among the most important and most respected in the world. They have the resource and expertise, and the Government are confident that they are ready and able to do what has been asked of them. The hon. Member for Glasgow Central was also concerned about this point. I have had no indications from my conversations with the PSR, the PRA or the FCA that there is a resourcing issue. If that changes, I am sure they will be very keen to come and talk to me about it.

[Alison Thewliss]

Nobody is questioning their expertise. The concern is more about whether we have enough people with the expertise. What assessment has the Minister done of that?

[John Glen]

Given the relationship that the Treasury has with the different regulators, it is for them to raise concerns with me with respect to the resourcing. All parties are intimately involved in a dialogue around the construction of the process. It is not done unto them by me or the Treasury. In terms of the adequacy of the resources, at the moment I have no concerns about that—it is matter that they would need to raise with me.

Draft Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) (Amendment) Order 2018

Alison Thewliss Excerpts

Monday 16th July 2018 General Committees

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Davies. The SNP cautiously welcomes the order, but feels that it could go further. As the powers to tackle tax evasion and avoidance largely lie here, we do not feel that the UK Government are being proactive enough to gather those funds into the public purse. As the hon. Member for Stalybridge and Hyde said, the funds represent a significant amount of money that all our constituents should see the benefit of.

It is positive that banks will be able to effectively comply with the ring-fencing regime and provide crucial regulatory protection for consumers, but we are concerned that the UK Government need to improve the sanctions regime. That cannot wait until 2021 when public services are being cut. Why will the Minister wait until 2021, which is quite some time from now, to review the measure? We may learn lessons more quickly than that. It would make sense to review it and ensure that we are learning, rather than to wait and pick up the pieces afterwards.

In the context of the legislation, which has territorial extent in Scotland, what consultation has been done with the Scottish Government? Our robust anti-avoidance rules on devolved taxes where we have control are among the toughest in the world. We would like the UK Government to follow our lead and crack down on some of the current tax avoidance. We are serious about doing that in the areas that we control, and we would like there to be a consistent approach that uses best practice.

Although the measure is a welcome step in the right direction, the UK Government must take more action and accept the criticisms of the sanctions regime that were raised some months ago in the Committee of the Sanctions and Anti-Money Laundering Act 2018—a much colder room than this one. They should also tackle dirty money as well as tax avoidance and evasion, because huge sums of money are still being laundered through Scottish limited partnerships. I appreciate that that consultation closes on 23 July, but it would be useful to hear anything that the Minister can tell us about when action will be taken following the conclusion of that review.

Scottish Economy

Alison Thewliss Excerpts

Wednesday 27th June 2018 Westminster Hall

[Mrs Anne Main (in the Chair)]

Order. Mr Gray, the hon. Member for Rutherglen and Hamilton West (Ged Killen) has taken your intervention. Please do not carry on your conversation.

[Alison Thewliss (Glasgow Central) (SNP)]

Does the hon. Gentleman support the devolution of employment law?

[Ged Killen]

Perhaps the hon. Lady will tell us in her remarks how her party intends to change employment law, if it is devolved to the Scottish Parliament.

Scotland suffers from under-investment. While the Scottish Government have produced many investment packages, they are often too small, too numerous and too unfocused to deliver the outcomes they are set up to achieve. Those are not my words but the conclusions of recent reports by the Fraser of Allander Institute and the Scottish Parliament’s Economy, Jobs and Fair Work Committee.

Under the current Scottish Government, we have had economic development plans governed by press release. Labour proposes real investment to correct the problems of stagnant labour productivity and GDP growth. We aim to stimulate investment more widely through a national plan that focuses long-term investment on local and national infrastructure, such as information, communication, services and production technologies, as well as in physical infrastructure, such as roads, buildings and town and city centres. That will not only correct the decade of under-investment that led to the productivity problem, but begin the vital future-proofing of the Scottish workforce against the challenges of automation and increasing digitalisation.

Furthermore, we plan to examine the possibility of public sector pension funds using their resources to establish a Scottish public provident fund, which could invest in local production and infrastructure, boost local supply chains and stimulate employment.

We will implement our industrial strategy and invest in Scotland’s economy. We will also encourage and incentivise firms in Scotland to raise the percentage of turnover invested in research and development. Scotland is only ninth in the UK in R&D spend per head, so such measures are sorely needed and will be vital in solving the productivity puzzle. Those kinds of investments will encourage the growth of new industries. An excellent example of that is CST Global in my constituency—a photonics manufacturer that I believe represents the future of jobs in Scotland.

CST Global has shown itself to be a significantly high-growth, high-skill business. It has sustained strong annual growth, with revenues increasing by 88% in a year to £6.7 million in 2017. It is a strong exporter, and the photonics industry is one of the UK’s most productive. On average, each employee in the sector contributes £62,000 to the economy in gross value per year—three times the UK average. These companies also have some of the highest export rates of any industry, exporting an average of 75% of their manufactured output.

Such companies are often city-based, and we would not typically expect them to be found in smaller towns, such as Blantyre in my constituency. However, CST Global has proven that that need not be the case; when conditions are right, those companies can not only do well but thrive in these places. CST Global is very welcome in Blantyre. Supporting such businesses is central to the investment-based economic model. If we want to see the future of the Scottish economy defined by high-skill, high-wage and high-tech jobs, we have to invest.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

I will try, Mrs Main. It is a pleasure to see you in the Chair. I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for securing this spirited debate. Hon. Members have lots of ideas about the Scottish economy, which is always something to welcome.

I take issue with the hon. Gentleman’s analysis of a decade of lost opportunity. It is no coincidence that that decade has also seen Tory austerity writ large and a financial crash caused by the previous Westminster Administration. We have had to put up with the consequences and do the best we can with one hand tied behind our back.

[Ged Killen]

Will the hon. Lady give way?

[Alison Thewliss]

My time is constrained, and there are a couple of hon. Members I want to mention, but I will try to take an intervention from the hon. Gentleman if I can.

I would also take issue with anybody who says that the Scottish National party has a lack of ambition; we could not have more ambition for our country than to take control of all the financial levers to improve the conditions for our people. With the powers of independence, that is exactly what we would do.

Scotland’s economy is performing relatively well on many indicators. It is a country with many economic strengths: it is an attractive place to work, live and conduct business.

[Colin Clark (Gordon) (Con)]

The end of property business rates relief in Aberdeen is doing a lot of damage to the business community, which is having, essentially, to knock down buildings. Does the hon. Lady agree that that policy went too far, and that there have been consequences that the Scottish Government did not foresee? Would she recommend that Scottish Government Ministers reverse it?

[Alison Thewliss]

I am sure that the hon. Gentleman has made those representations to the Minister and that the Minister will take them on board.

We have one of the lowest youth unemployment rates, not just in the UK, but in the whole of the EU. We have been described as the most highly qualified population anywhere in Europe, and we are the most successful part of the UK outside London when it comes to attracting foreign investment. Our exports have gone up 44.7% under the SNP, to more than £29.8 billion in 2016, which is no small feat. Scotland was the only part of the UK where employment went up in the last year.

We have a well-deserved international reputation in a range of growth sectors of the economy, such as life sciences, the creative industries, and food and drink, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned. Those sectors are an asset to our country. We are also making great strides in renewable energy. Through Scottish Enterprise, we have invested an additional £45 million in business research over the next three years.

There is no doubt that Scotland is a wealthy nation, but challenges remain. Like other advanced economies, we face long-term structural inequality. The Glasgow Centre for Population Health has found that the decisions taken by the Tory Government in the 1980s are still having repercussions. [Interruption.] The post-industrial impact that hon. Members on the Government side are chortling about has had a long-term effect on my constituents and constituents across Scotland.

It is not only possible to grow the economy while tackling that inequality; it is absolutely imperative. The type of growth that is built on the backs of the poorest and most vulnerable, and that comes at the expense of the environment, is almost not worth having.

The OECD estimates that, between 1990 and 2010, rising income inequality in the UK reduced our economic output per head by 9%. Inequality stunts economic growth, and Scotland is no exception. It is time to shift the focus of the debate away from short-term reckless growth and towards a more sustainable model built on inclusion, dignity and respect. Economic choices are not just about the bottom line; they should reflect the society that we want to live in.

My colleagues in the Scottish Government have received international attention for the work they have done so far on inclusive growth. Putting that at the heart of our economic strategy has led to different outcomes in Scotland. We want to make choices such as a Scottish national investment bank, and I am glad that the hon. Members for Stirling (Stephen Kerr) and for East Renfrewshire (Paul Masterton) welcome that. The hon. Member for Stirling mentioned KfW, a bank in Germany that I visited when I was on the Communities and Local Government Committee. It was set up as part of the Marshall plan in 1945. We know that it works, but we have never done the same for ourselves. It makes absolute sense for us to do that, and it is interesting that the hon. Gentleman looks to pinch the Scottish Government’s ideas for the UK. There should be more of that in future—why not?

We are also researching a citizen’s basic income, and we invest in human capital by keeping university tuition free for all. We also pay better in Scotland. We have more living wage employers per head than anywhere else in the UK, and we seek the real living wage, not the Tories’ pretendy living wage, which has age discrimination baked into it. Although the Labour party might wish to have a £10 living wage, it did not give the Scottish Government power over that policy; we asked for the devolution of employment law, and it stood firmly against that.

Like the rest of the UK, Scotland has an ageing population. It is great that people are living longer, but it presents several challenges to our economy—not least an increased old-age dependency ratio. With fewer working-age people in proportion to the number of older people, tax revenues become lower and public spending on pensions and healthcare becomes higher. That makes it more difficult to keep public finances stable for the future. There are two ways to improve the situation. One is to increase labour market participation, which we are trying to do. We have created free childcare services, which are a known driver for getting women into work. Increased female employment has also been linked to higher productivity, to economies that are more resilient to recession, and to a multitude of improvements to health and wellbeing outcomes.

The other way to protect our economy from the problems arising from an ageing population is to increase immigration. The Tories have stood against devolving immigration law to Scotland, despite our particular circumstances, which the hon. Member for Rutherglen and Hamilton West recognised in his speech. Immigration law is a reserved matter. At constituency surgeries every single Friday, I see the impact of a Government keen to decrease immigration and ignore the large net contribution to our economy of those who choose to come and make their home in Scotland. I see the devastating effects of a hostile environment created by a UK Government Home Office hellbent on reducing migration for no economic purpose whatever. That includes the highly skilled migrants group, on behalf of which I have been campaigning. They come here, pay taxes and have not taken a day’s benefits in their life, yet the Government see fit to deport them for making entirely legitimate changes to their tax returns.

[Kirstene Hair (Angus) (Con)]

At the Home Affairs Committee yesterday, we had experts in. We questioned them on a separate immigration policy. They used the word “shambles” directly to describe having a separate immigration policy in any region of the United Kingdom. Does the hon. Lady agree that the SNP should maybe start listening to experts? We would then see the best outcomes for Scotland.

[Alison Thewliss]

Coming from the party that regularly likes to run down experts and their views, that is a bit rich. What is a shambles is the situation I see for my constituents week in, week out. Their lives are made an absolute misery by the Home Office. My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) has been to Canada and has spoken about how a differentiated immigration policy can work in practice. There is no reason why Scotland cannot do that.

[Christine Jardine]

Will the hon. Lady give way?

[Alison Thewliss]

No, I am conscious of time, and I am running out of it. It is estimated that each additional EU migrant working in Scotland pays £10,400 in tax towards our NHS and other public services. The Fraser of Allander Institute at the University of Strathclyde used advanced modelling techniques to estimate the impact of reduced migration after Brexit on Scotland’s economy. In its Brexit scenario, aggregate GDP is 9% lower by 2065, all other things held constant.

If there is one thing that is certain for Scotland after Brexit, it is that all other things will not be held constant. It is estimated by the Scottish Government that leaving the single market—a position backed by both the Conservatives and Labour—will reduce output by 8.5% by 2030, which is equivalent to a loss of £2,300 a year for each person in Scotland. Of course, the UK Government do not agree with the figure, having conducted their own analysis of the impact of Brexit on Scotland’s economy. Their analysis presents an even worse scenario, with output reduced by 9% over the next 15 years.

We are at a crucial point in determining the future of our economy. We have to take into account that we are having Brexit as a result of an internal debate within the Conservative party that got out of hand. Only one party has a clear and meaningful vision for the future of Scotland’s economy: the SNP. We have looked at the issue. We have the Sustainable Growth Commission, a suite of recommendations and a robust plan for the type of Scotland we would like to see. The report calls for more investment to grow Scotland’s economy by increasing population, participation and productivity. Some of that can be done now, but some of it cannot. We require cross-party support for some of the things we want to see, whether that is devolving some of those powers to Scotland to let us get on with the job, or whether it is independence, where we could have the full suite of powers without having one hand tied behind our back. Through that, we could make changes for the benefit of all our population, not just the Tories and their cronies.

Draft Double Taxation Relief and International Tax Enforcement (Belarus) Order 2018 Draft Double Taxation Relief and International Tax Enforcement (Ukraine) Order 2018

Alison Thewliss Excerpts

Monday 4th June 2018 General Committees

[Alison Thewliss (Glasgow Central) (SNP)]

Many of my questions have already been asked by the hon. Member for Oxford East, which is great. Obviously, the Scottish National party welcomes both treaties. I very much echo the point the hon. Lady made about getting more information on the process behind them ahead of time. I asked in the Library, but it was not able to provide something at such short notice. It would be useful to have more narrative information in advance of these Committees so that we are well versed on what is happening.

It would be useful to get a better understanding, as the hon. Member for Oxford East mentioned, of the forward plan and of the timescale of these treaties. As she mentioned, it was October for Ukraine, and it was September for Belarus—the agreement was signed on 26 September—so it would be useful to know the Government’s timescale for future agreements. Where are they at the moment? When are they likely to be signed off and to come to the House? We want a clear idea of when they are coming, so that we can prepare adequately for them and engage with all-party groups that may have interest in talking about such things, so that they, too, are well prepared.

That is about all the information that I was seeking. It is interesting that it has taken this long to get to a treaty to replace the USSR one—it must have been an interesting, as well as long, process to get from that point to now—so it would be useful to know the Government’s timescales. Some of the African double taxation treaties have issues as well, because of references to countries that have not existed for quite some time. It would be useful to see the detail of anything that the Government are preparing, so that we can see who the agreements are with and perhaps prioritise those that might be overdue for being looked at.

Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Mr Philip Hammond]

I am tempted to wonder whether my hon. Friend might have discussed that question with the Mayor of the West Midlands before asking it. It would be remiss of me to stand at the Dispatch Box and say that I would accept any bid, but I am certainly willing to consider any proposals from the Mayor of the West Midlands, or from any other elected mayor, to address the skills challenge that we face across the country.

[Alison Thewliss (Glasgow Central) (SNP)]

Several of my constituents who are highly skilled migrants made entirely legitimate and timely changes to their tax returns and are now facing removal by the Home Office under immigration rule 322(5). Will a Treasury Minister confirm that people should make entirely legitimate changes to their tax returns? Will they also have a conversation with their Home Office colleagues to prevent these highly skilled contributors from being removed from the UK?

[Mel Stride]

The answer to the hon. Lady’s question is that people should clearly continue to make appropriate changes to their tax returns. I reassure her and the House that Treasury Ministers and HMRC officials are working closely across Government—particularly with the Home Office—on the issues that she raised in order to ensure that we get these matters right.

Financial Services

Alison Thewliss Excerpts

Thursday 26th April 2018 Westminster Hall

[Alison Thewliss (Glasgow Central) (SNP)]

I am glad to be able to speak for the Scottish National party in this debate.

I am sure the Brexiteers will accuse me of not being optimistic enough, but having looked the issues for financial services in the UK post-Brexit, I cannot help but have some apprehension. I understand that a lot of people in the industry are apprehensive as well. The challenges are huge and significant.

We have the best possible set-up in financial services with the EU, whether with regard to co-operation, influence or regulation. We are part of the decision-making process and have been key players in the set-up of financial services across the EU. There is no doubt that we will not be able to replicate the influence we have, because that influence is born from being part of the EU and a member of the single market and the customs union. The UK Government must seriously consider that reckless approach. The financial services sector provides a good illustration of why remaining in the single market and the customs union is the least-damaging option for the UK’s and Scotland’s economy. Brexit is a key risk to that sector.

The financial services industry is huge—the figures were mentioned by the hon. Member for Chelmsford (Vicky Ford)—and, as she said, Scotland is a key part of it. Many financial services jobs are outside London. Edinburgh has 49,800 employees in the industry—a significant number—but Glasgow has 36,300 employees or thereabouts. Nearly 60% of employment in financial and related professional services in Scotland is concentrated in those cities. Edinburgh has an important international financial centre and a strong presence in banking, life insurance and investment management activities, and Glasgow has strengths in insurance, legal services and accountancy, but Aberdeen and Fife employ a large number of people in the industry.

As the Member for Glasgow Central, it would be remiss of me not to talk about Glasgow which, since 2001, has developed its international financial services district. That has rejuvenated an area in the city that had been left behind by old industries, with warehouses and neglected areas near the Broomielaw. It has been redeveloped into a hugely vibrant sector of the city. Many large companies based there employ people in high-value jobs. Those companies were able to get buildings, set up to work and employ people locally.

The IFSD has attracted £1 billion of investment to the area, so it is no small project. It has brought in more than 15,500 new jobs through investment and expansion by working in partnership with the city council, Scottish Development International, Scottish Enterprise and Skills Development Scotland, to name a few.

It worries me greatly that Glasgow, which is recognised in the global financial centres index as the 14th most competitive financial centre in Europe, would lose out as a result of the reckless move towards leaving the EU, the customs union and the single market. It concerns me because when jobs go in London, London may be able to absorb it, but the economies of Edinburgh and Glasgow are more peripheral in the UK set-up. The UK has a London-focused economy. Without any great control in the Scottish Parliament over such things, I am concerned that we will not be able to put the mechanisms in place to protect those industries as we would like to do. We are at the whim of what the UK Government decide to do.

I hope the Minister can tell us more about the White Paper that the Government were due to publish last summer on the approach to Brexit and financial services. As I understand, that has not yet been brought forward. I asked the Library for an update on its report from July on financial services and Brexit, and although it could give me an update, it could not give me much progress, because not much has been made—certainly not anything visible or tangible. That concerns me and the sector greatly because of the uncertainty. We should be in no doubt that the sector has to plan and make decisions. The more uncertainty there is, the greater the risk of losing jobs.

Predictably, the European Banking Authority has decided to move to Paris. There are moves afoot from France to build up its sector and to regain what it feels it has lost to the UK in terms of financial services expertise. There is a risk, and other countries are looking to step into the void that we are leaving. The transition agreement merely extends the deadline to reach a deal to the end of 2020. The financial services industry needs and deserves more certainty so it can plan for that.

Not only will we lose financial institutions and companies, but those companies will not have the automatic access to EU markets that they currently have. That loss of influence is significant for the companies that base themselves here, for the decisions and investments that they make and for the jobs they create.

We will also lose influence in Government and between Governments. We will not be in those decision-making rooms where the regulations are being drawn up. We will not have the early influence that we have through EU institutions. We have set a lot of the rules, but in future, at most, we will be able to take rules, which is a huge difference.

The Minister has acknowledged that in an article, where he wrote:

“We know how important it is to the financial services industry that they have continued market access”.

I am sure he will tell us more about what he intends to do about that. Market access is not the same as being part of a market or a component in that market. Market access is second best. The Tories are delusional if they think we will get a better deal than we have at the moment.

Remaining in the European Economic Area could enable financial passporting to continue. That is crucial, because equivalence is nowhere near as uniform and comprehensive as passporting. It does not cover the full range of services currently sold by UK-based firms into the EU, or the full range of clients. As I understand it, banking services could not be offered under an equivalence regime.

Many are deeply concerned about what would happen if there was policy divergence between us and the EU in future, because that could result in the Commission revoking access to those markets with only 30 days’ notice. If a regulatory change that we disagreed with was agreed by the EU, such as a cap on bankers’ bonuses, that could be enough to trigger that denial of services. Switzerland’s referendum to limit immigration from the EU triggered such a response from the EU.

That is worrying given the Government’s attitude to immigration and how they want to treat immigration from all parts of the world—not just the Windrush generation, but EU nationals. Many constituents who come to my surgeries are in highly skilled jobs and have come here as highly skilled migrants. They have found that, because they made a minor change to their tax returns many years ago, the Government deem them a threat to national security under paragraph 322.5 of the immigration rules. If that is how they treat the highly skilled migrants who come to this country to contribute, work and generate wealth, I have little confidence that they will do anything to improve the situation. That is how people are being treated now. How will they treat EU nationals who have come to work in the finance sector?

Some 9,000 EU nationals work in the financial and business services sector in Scotland. Each of those people brings wealth to this country, pays their taxes, has a family, works here and has settled here. They have no great certainty about their future status, how their employers will employ them and whether they will have the right to work as they do now, which is a huge worry.

Those individuals are making decisions as to whether they want to stay here on the basis of what they hear and see. The mood music around immigration has not been very welcoming. Those narratives are almost certainly causing many of them to give up and leave. The Minister is sighing somewhat at that, but that is the reality—that is what I get at my surgeries.

[The Economic Secretary to the Treasury (John Glen)]

I am not. I am listening very carefully.

[Alison Thewliss]

People are not sure what will happen, and they need to have more certainty before they make their decisions. Just as people in the financial sector are making decisions about where their businesses will go, individual employees are deciding as well.

My husband works as an IT professional in Glasgow and knows many people in the sector. They are highly sought-after, highly skilled and well-paid jobs, but they are tied to financial institutions in the city such as J.P. Morgan and Barclays. If those financial institutions contract, those IT jobs, which are highly skilled, will contract too. We need to think carefully about the full pipeline of people. It is not just about bankers in suits sitting in offices; it is the full ecosystem. Those bankers buy lunch, commute into towns and take public transport.

Glasgow has a long and distinguished history in banking. The Bank of Scotland opened its doors in 1695. The Royal Bank of Scotland has its global headquarters in Edinburgh, the Clydesdale Bank has its European headquarters in Glasgow and there are lots of other banking operations in Scotland. I have mentioned Barclays, but HSBC and others also have a presence within Scotland.

Scotland’s general insurance, life insurance and pensions sectors also have a strong reputation and an enviable history of success, with their origins dating back to the early 1700s, when the increase in international trade led to a requirement for marine insurance, and Scotland continues to be a major centre for that sector.

The hon. Member for Chelmsford mentioned the insurance industry. The Association of British Insurers is deeply concerned about the current uncertainty. It has contracts that run for 10 years and pension contracts that run for more than 30 years, and has pointed out that

“these contracts cannot be transferred safely and quickly to a new EU location. Special arrangements would be needed to transfer the contracts, covering both legal form and regulatory responsibility…If nothing is fixed, insurers will be left in an impossible position and face an unacceptable choice: break their promise to customers or risk breaking the law.”

That is deeply serious and I hope the Government are looking at it. It is a huge concern for the sector, which relies on confidence and its reputation.

Fund management in Scotland encompasses a broad mix of large institutional companies and smaller boutique firms that provide investment services to institutional and personal clients around the world. The quality of investment management expertise in Scotland has led to a robust growth in boutique firms and new business start-ups. We have also become a major European centre for asset servicing.

Looking forward, Scottish Government analysis shows that a hard Brexit threatens to cost our economy £12.7 billion—£2,300 per person—a year by 2030, compared with what would happen if we remained in the EU. The UK Government’s analysis is that reverting to World Trade Organisation rules could reduce growth by 8%; that a free trade agreement with the EU would reduce growth by 5%; and that membership of the European Economic Area would reduce growth by 2%.

The EU is the largest single market for Scotland’s international exports—in 2016, Scottish exports to the EU were worth £12.7 billion. The Fraser of Allander Institute estimates that 134,000 Scottish jobs are supported by EU trade. Last week, a report for Citibase, a service provider to small and medium-sized enterprises, found that 63% of Scotland’s SMEs would like to reverse the Brexit process and remain in the single market. That report also found that just 14% of Scotland’s SMEs trusted the UK Government to get a good deal on Brexit. Steve Jude, the chief executive officer of Citibase, has said:

“The message is clear. Scottish confidence in the Westminster Government to secure a good deal for them is at an all-time low, with most SMEs wanting to press the reset button on the entire process.”

The Government should take on board those concerns, because we do not have to leave the EU. Yes, the EU referendum produced a UK-wide result, but there was no mandate for leaving the customs union and the single market, and we must think very carefully about the potential damage that leaving the EU would do to our economy, which would hurt all of us and all of our constituents.

The hon. Members for Chelmsford and for North East Derbyshire (Lee Rowley) mentioned bank closures, which are of huge concern to our constituents right across the country. That is particularly true for RBS, in which the Government have the leading share. We own RBS and we should be telling it that it is unacceptable to renege on the trust we have put in it—we helped it to get back on its feet—by whipping away services to our communities. We have heard Members from across this House—not just Scottish National party Members but Conservative Members—criticising RBS for saying that it would provide banking services and send its vans around before pulling back on that as well. RBS has reneged not once but twice. RBS has provided a limited service, which are the bank vans it sends around. Those vans do not have disabled access, which has led to people being served in car parks in the wind, rain and all weathers. That is a ridiculous situation and the Government should do more to put pressure on RBS.

The hon. Member for North East Derbyshire mentioned the idea, which has a lot of merit, of a shared service point for bank branches. Banks should come together to see what they can do collaboratively so that their customers are not left with nothing. I know people from other parties have mentioned that idea. It definitely has merit.

Hon. Members have mentioned on the record dirty money, the importance of clamping down on money laundering and the SNP position on the scandal of Scottish limited partnerships being used for money laundering. I hope there will be progress on tackling SLPs and addressing their lack of accountability. We have tabled amendments to the Sanctions and Anti-Money Laundering Bill to that end, but if the Government are not going to take them on board, as I had hoped they would, I hope they will bring something else forward soon so that we can deal with that.

The major issue that prevents a clampdown on money laundering is the Companies House loophole. I have mentioned that to the Economic Secretary to the Treasury before—he has heard my views on it. Just recently, we had the strange case of the businessman Kevin Brewer, who fully admitted what he was trying to do in testing the Companies House loophole. However, he was fined and found guilty of crimes related to money laundering when all he was trying to do was to prove that the system was absolutely defunct and open to all kinds of corruption.

The Government have hailed the prosecution of Kevin Brewer, but all they have done in this case is to shoot the messenger. This man was deliberately trying to do something—he told the people he involved in this activity exactly what he was going to do. There has been a clampdown on this person but there is no clampdown on the many hundreds of people—at least—who abuse the Companies House loophole by paying their £12 to register a company with no checks whatsoever by Companies House as to the veracity of that person.

If someone applies for any other Government service such as a passport or a form to do their tax returns, they have to go through the Government’s Verify system. This situation is allowing people to set up companies with no checks on them whatsoever. It is wide open to money laundering and corruption. The Government need to take heed of that and take action.

The hon. Member for North East Derbyshire said the EU was “playing politics”. I found that comment slightly bizarre, because it is playing politics that has got us into this situation in the first place. A weak Tory Government, pandering to its Back Benchers, led us into the EU referendum and to the calamitous situation we are in. If anyone is playing politics, it is the Conservative party, and we need to get a lot more serious than playing politics because there is so much at stake.

The hon. Gentleman also mentioned innovation within financial services. That is an area where the UK has taken a great lead. I was on holiday in the US recently, over the Easter period. I found it astonishing that US companies do not even have chip and pin, never mind contactless payment, for their financial transactions. In this building and in other buildings in the UK, we are used to being able just to tap our cards to make a payment, so I found it bizarre to be given a slip of paper to sign. US companies find our position unusual, whereby we can just tap something and pay with our phone or a card. There is an interesting contrast between where we are and where they are in terms of technology—there are huge advances coming along in financial technology and other areas.

Hopefully, if we get any kind of Brexit deal right, FinTech will continue to blossom. Staying within the single market and the customs union gives us the best possible chance of using and developing our expertise and making it sellable to the rest of the world through the EU, which of course has a huge customer base.

I will close my remarks by saying that the problems within the financial sector are clear with regard to the EU and Brexit. The sector has made clear the difficulties that are arising, and the impact that those difficulties will have on jobs and on our economy, but we are coming up very close to the date when we will leave the EU, and the solutions are not there. The transition period will give only a little extra time for that process and does not give the reassurance required.

We need solutions from this Government and we need them soon. We need a White Paper and solutions that will make a difference to companies and give them reassurance before they decide that they will just take flight, and take with them so many jobs and so much else that they give to the UK economy.

--- Later in debate ---

[John Glen]

UK Finance and the Post Office have come to a new understanding about how the Post Office’s services are made available if the last bank leaves a town or community. In 99% of cases, the services that an individual non-business customer would wish to use are accessible in post offices. There are some limits—this needs to be checked, but I am pretty sure it is £2,000 in cash—but alternative arrangements can be made if necessary. Although I accept that in some cases there is a cultural barrier to the widespread use of post offices, there is no functional reason why they cannot provide the vast majority—99%—of the services that most consumers and 95% of small businesses want. I urge my hon. Friend to look into those options and make that clear to her constituents.

[Alison Thewliss]

On business customers, does the Minister agree that the closure of bank branches in rural areas means that staff have to cover longer distances, in some cases carrying large sums of cash backwards and forwards? Has he raised with banks the concern that carrying money around in that way can put people at risk?

--- Later in debate ---

[Vicky Ford]

I thank hon. Members for their contributions. Many times since joining this place, I have heard hon. Members take very angry and aggressive positions in opposition to each other. It is good, on this calm and quiet Thursday afternoon, to hear hon. Members speaking in support of the financial sector, and about their pride in it and in the way the people who work in it and in the related professional sector use those services and their careers to support customers and the wider economy.

I want to pick up a couple of small issues. The Minister stated clearly that Britain does not want a bonfire of regulation; our aim is to continue to be a benchmark of good regulation across the globe. I absolutely support that aim, and I think it is important that we continue to say that again and again.

The Minister also made the very clear point that, from the British point of view, we want to give certainty in the Brexit negotiations to businesses and consumers on this side of the channel that they will not face disruption. We want to ensure that their contracts continue to be recognised during the transition and beyond, and we need those on the other side of the channel to give the same level of certainty.

I am going to make terrible mistakes if I try to name everybody’s constituencies—

[Alison Thewliss]

Glasgow Central.

[Vicky Ford]

The hon. Member for Glasgow Central (Alison Thewliss) said she is extremely concerned about how soon we can give certainty in the EU negotiations. There are two sides to giving certainty. The Government’s statements—especially the detailed HSBC Canary Wharf speech—contain a huge amount of detail about the need for ongoing co-operation. The EU negotiators have also talked about wanting to have super-equivalence, and that is helpful, but we have not seen the same level of detail. It needs to come from both sides.

In my experience of many years of EU negotiations, having a seat at the table was sometimes helpful—that will be missed—but there were other times when it was a challenge. The financial services industry is much more important to our economy than it is to that of many other countries, although it does support them, but that left us with different exposures. That is why we did not want to have an identical approach to solve certain issues; the approach of maximum harmonisation—one size fits all—that we increasingly see across the single market is very challenging.

The hon. Member for Stalybridge and Hyde (Johnathan Reynolds) spoke about needing to confirm whether we are going to align. To me, that sometimes means having a completely identical approach, which can be a challenge. One thing I learned from my time in European politics is that there are times when the EU recognises equivalence, but without that being identical. I particularly look at the way in which we treated the bank sector. When we introduced our bank levy, the rest of Europe, particularly within the eurozone, had the funded deposit guarantee system. There were two different ways to solve the same issue to make sure that funds were set aside in case there was failure, but they are both built into the legislation.

Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 17th April 2018 Commons Chamber

[Elizabeth Truss]

My right hon. Friend is right, and the reason is that we have taken the time to reduce the deficit to make it easier for employers to take on staff. We have reduced corporation tax, making it easier for companies to hire people. That is why we have the lowest unemployment since 1975, and rising wages. It is a shame that Members on the Opposition Benches cannot acknowledge that massive achievement.

[Alison Thewliss (Glasgow Central) (SNP)]

It is completely unacceptable that a 17-year-old and a 25-year-old starting on the same day in the same job face a £3.63 gap due to their ages. When will the Chief Secretary end the scandal of state-sanctioned age discrimination?

[Elizabeth Truss]

It is extremely worrying that those on the Opposition Benches would rather see young people out of work and without opportunities than in work, learning and getting the skills for their future. All the evidence shows that if we set the rate too high we see youth unemployment, which is exactly what happened under the previous Labour Government.

The Economy

Alison Thewliss Excerpts

Thursday 22nd March 2018 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

In coming to this general debate on the economy, I reflected on a couple of things. The first was that Papa Thewliss always told me that before I died I should do a night course in economics, and he was probably right, although he did not know at the time that I would end up here. I was also reflecting on my good friend Miriam Brett, a former employee of the Scottish National party group at Westminster, who took away some of the concerns I had about my right as a woman who did not know so much about these things to speak about the economy. She said, “Those guys who stand up and talk about figures all the time usually have no idea what they are talking about anyway. They just sound a bit impressive because they’ve got the figures in front of them.” Taking the things she used to encourage me with, as well as some of the work the Women’s Budget Group has produced over the years on the gender impact of the Budget, I thought a bit about who the economy is for and what it is for—is it about figures or people? Fundamentally, it is about people.

I put this question out last night to people on Twitter, half fearing what would come back, but I got some excellent contributions—all from women, as it happens—about their thoughts on the economy and how they fit within it. Lorraine Gillies said:

“It’s about making decisions in a people before process way that enable people to achieve economic health. It’s about spending to save.”

That chimes clearly with the things I have heard from experts such as Sir Harry Burns, who talks about the importance of people having a sense of control over their lives. What I have seen in my three years in this place and in my eight years previously in Glasgow City Council is a decline in the amount of control people feel they have over their lives. They feel they are tiny cogs in a huge machine that does not recognise them, does not recognise what they have to contribute and does not recognise the skills they have. Instead, they are in a system that punishes them every day, in a range of different ways, whether through the welfare system, through the immigration system or just through the precarious nature of employment in these islands now. They feel that they do not have any say in this economy and that this economy does not work in any way for them.

We see that reflected in the figures that show wages stagnating and in the increasing difficulties young people find now as compared with the situation for the generations that came before me. Young people now cannot afford to buy a house; they find it more difficult even to rent a house in lots of places in the UK. They have insecure employment and insecure prospects. Some of them are very well qualified—far better qualified than young people have ever been—but they cannot get a say in the economy round about them.

Ministers and other Members have talked about the public finances, but as far as I can see these public finances are not to the public benefit—a lot of the time they are for private benefit. They are for companies and organisations, rather than for the people in the economy itself. Another woman, Fiona Brown, said:

“I’d like the economy to serve me, mine & the common weal. Currently we seem to be enslaved to it and the elites who remain the beneficiaries. FAIRNESS needed.”

Fairness runs through a lot of the things the SNP has said on the economy in this place. We have seen banks bailed out while people have lost their jobs. We have seen banks closing their branches right across the country, yet the corporate executives are running away with lots and lots of money, their pockets stuffed full of the people’s cash. We need to reflect on that when we see people so disenfranchised in the economy.

We also continually see loopholes. I see those in the complexity of the tax code, having sat through a couple of Finance Bill Committees. I have seen the huge complexities we are building in, layer upon layer, to the tax code in this country. That allows people to find other ways to manipulate money and take it away from where it should be: in the public coffers and being used for public good. We see things such as Scottish limited partnerships. My former colleague Roger Mullin has worked incredibly hard to bring these issues to light, as has the journalist David Leask and Richard Smith, the researcher and an expert on this issue. We have seen how money has been funnelled and hidden away and how we have no accountability over that money, who owns it, where it goes and what purposes it is used for at the end of that process. We have seen how this can involve Soviet oligarchs or various regimes in the world that want to hide their money. We need to get to a point where there is a lot more public accountability.

We facilitate these loopholes in the economy by allowing people to register a company at Companies House for just 12 quid and do none of the anti-money laundering requirements that would usually have to be done. This has to stop. The Government have to say, “If you want to register a company, that due diligence must be there.” The UK Government cannot be turning a blind eye to companies that are ripping off people right around the world.

Some of the women who contacted me talked about the role of carers in our society. Lynn Williams said that the economy

“doesn’t recognise or reward my unpaid care and those of us at the hard end of cuts do not benefit from growth...such as it is in Scotland or UK.”

We can stand here and talk about growth figures and other economic figures, but if people out there on the street are not feeling that—if they are seeing prices going up and they are struggling every day to put food on the table—we are failing them and not recognising the difficulties they are going through.

The injustices continue. The Resolution Foundation says:

“The coming year (2018-19) is set to be the second biggest single year of welfare cuts since the crisis…at £2.5 billion”.

That is £2.5 billion more in cuts, and they will affect people who have already found themselves losing out as a result of cuts. Welfare reform is rolling on and is damaging people who come to my surgeries and even those who do not come to my surgeries. I want to be able to help them, but they never make it through the door because they are so beaten down by the system. This is hitting families and disabled people the most. Figures just out from the Glasgow Centre for Population Health say that 24% of the working-age population in Glasgow have a disability that impacts on the work they can do. We need to think about that, because many of these people will want to work, but they find themselves trapped in a system that punishes them whichever way they go. It makes them feel as though they are being put upon for the very act of claiming something they are absolutely entitled to get; they are going through all this trauma again and again, proving to faceless bureaucrats that they have a right to something.

The Child Poverty Action Group says that child poverty has gone up three years running and that 67% of that child poverty is in families where the parents are working. That should shock us all, because those families are working damned hard every day to put food on the table. The constituents I see at my surgeries are working incredibly hard to try to put food on the table, but they cannot. Families come to me to ask me to get school uniforms and Christmas presents for their children because they cannot afford it. This is happening in 2018.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The hon. Lady is making a powerful speech about the impact that welfare reform is having on our economies. Does she agree that the other people who suffer are small retailers and providers, because the people who are not receiving that welfare support any more are not spending that money in small shops? It is estimated that in my constituency £83 million will be lost from our local economy through welfare changes alone, so lots of our small businesses will simply struggle to employ people in the future.

[Alison Thewliss]

Absolutely; it is well known that people will spend money in local shops and support the local economy. Welfare reform has had a similar impact in Glasgow. The welfare rights department of Glasgow City Council says that 636 households in Glasgow, where housing costs are relatively low, are affected by the benefit cap, and 94% of those households have children. The Government should know that they are taking food out of the mouths of bairns. That is what is happening, and they should be ashamed.

Ethnic minorities are affected as well. The Equality and Human Rights Commission report that came out last week highlighted that three quarters of the cuts to welfare benefits affect Pakistani families. The Government deny that they have done any such thing and do not regard that report as important, but it really is, because it is relevant to how people can be included in the economy. If people are having all agency and money taken away from them and the cuts disproportionately affect particular groups, the Government have a real problem on their hands. They have to acknowledge that.

There has been a significant impact on women. Engender has highlighted in its excellent reports how 86% of the cuts to welfare benefits have come from women’s pockets. There are households in which women are not getting money and are not being able to put food on the table, as I have already outlined, and women have less capability in the world. That makes it far more difficult for women facing domestic violence to leave the situation, putting them in danger. It makes it far more difficult for women to achieve all the things that they could do in life and ruins women’s potential. If women who have had children want to go back into the jobs market, it makes it far more difficult for them if they do not have the means to get by as they work their way back in.

I pay particular tribute to the Women Against State Pension Inequality campaigners across the country who see this at first hand. Those women have worked their whole lives, often in low-paid, strenuous jobs, lifting and shifting and moving people and goods around, only to see just as they approach retirement age—the goal that they were set to reach—the date move away from them in the cruellest possible way.

I wish to mention Rosemary Dickson in particular. Rosie is a stalwart WASPI campaigner in Glasgow. She was raised in Calton by a single mum. She started working at 15, while she was still at school, to get through her exams, and since then had always paid the big stamp. At 17, she moved into the NHS and qualified as a clinical perfusionist. She ran heart-lung bypass machines and was in organ retrieval teams. That job took its toll—it was very strenuous—and she retired. She is now 60 and cannot find employment. She has tried all different places—she even applied for a job with the Department for Work and Pensions, but was told she was not qualified enough. As advised by the Pensions Minister, she tried to get an apprenticeship, but was told that she was not qualified and that if she wanted to be trained, she would have to pay £2,000 to get the qualification. She is really struggling.

Rosie has seen her dreams of a happy retirement—of moving on to spend the retirement time that she wanted in the way that she wanted—fade. She may have to sell her house. Many women she knows now find themselves dependent on their husbands for the first time in their lives. It does not say very much for gender equality in 2018 that women who have worked their whole lives in jobs that made them work hard and paid them less now find themselves dependent on their husbands when they thought they would get some time and independence back for themselves. That is a stain on all our consciences.

I wish to mention the hugely valuable contribution that people who were not born in the UK make to our economy. They may be EU nationals or non-EU nationals, but so many of them make a tremendous effort and contribute hugely to our economy but have not seen that effort rewarded by the UK Government. I could list any number of immigration cases, although I see you indicating that you do not want me to, Madam Deputy Speaker. I see again and again people who have come here, worked, set up a business and employed native Glaswegians in that business, only to find that, for some small, technical reason with which the Home Office seems to have no flexibility to deal, they are no longer allowed to work or to get public funds. They are left absolutely high and dry with a family to feed, a house to pay for and bills to pay and—nothing. That is really cruel. These folk have so much to contribute to our economy, and we should thank them for their efforts. We owe them a great debt of gratitude for all that they have done for choosing to make Glasgow, Scotland and the UK their home.

I wish to raise the issue of those who have been caught out by paragraph 322.5 of the immigration rules. They made a legitimate change to their tax returns, sometimes years ago, and are now told, when they apply to regularise their status here, that they are a threat to national security under the discretionary powers of paragraph 322.5. It is absolutely ludicrous and I would be grateful if the Minister looked into the issue. We encourage people to make minor changes to their tax return—we do not want people not to make changes to their tax return if they are due—but this group of people who have come here to work hard in highly skilled jobs and never taken a day’s benefits or anything like that, now find themselves at risk of removal from this country under this discretionary rule. If people feel so unwelcome because of that, it will be a huge threat to the economy.

Finally, we need to talk about austerity. We have to look at its long-term impact on the nation’s health and wellbeing and the knock-on effect on our economy, and we need to consider women’s place in that. Women’s Aid Northern Ireland told me that most women’s equality issues are in fact economic, but wrongly get described as fluffy, marginal social quibbles. Caring work, which has propped up our economy since Adam Smith’s ma fed and clothed him every day, is not counted as a valuable contribution to the UK’s economic functionality. If we want to be a country that, as the Prime Minister says, works for everybody, we need to recognise what everybody brings to the country, and we need to make sure that people are rewarded properly.

--- Later in debate ---

[John Redwood]

I can find many examples of companies that have come pouring in with extra investment post the Brexit vote. The national figures show that we have had more jobs, investment and growth following that vote. Those ridiculously pessimistic Treasury forecasts were launched just in time for the referendum vote. At the time, I and a few others put our professional reputations on the line, said that the forecasts were completely wrong, explained why the economics behind them was misleading and why the forecasts were likely to prove widely inaccurate. We were right; the Treasury, World Bank and others were comprehensively wrong and have been rightly confounded.

I am pleased that my right hon. Friend the Chief Secretary to the Treasury agrees with me that it is a pleasure that those forecasts were wrong. She and the Chancellor are exactly right to be cautious about the latest set of official forecasts, which are likely to prove too pessimistic for the future years. It is important that we aim to beat those forecasts. We know that they keep changing the forecasts and that they tend to be too pessimistic, on average. Now is a good opportunity to go out and beat those forecasts. We should make that one of the main aims of our policy. I look forward to Opposition Members trying to help us, instead of doing all that they can to peddle misery and gloom to try to dampen spirits and reduce confidence at a time when there are good reasons to be more confident and to believe that those forecasts were wrong.

Let me take one obvious point. I have some disagreement with my Front-Bench colleagues, because I would like to stop paying any money to the European Union after March 2019. Some of my Front-Bench colleagues seem to wish to be more generous than me, but I think they agree that we must quite soon get to the point at which we are not paying any more money to the European Union. When we have full control of our money, which is what we voted for, we will have £12 billion to spend on our priorities here in the United Kingdom rather than on the European Union’s priorities somewhere else across the continent. That will give us an immediate 0.6% GDP boost. When a country is growing at 1.5% to 2%, an extra 0.6% represents a material improvement in its growth rate. We will not just get that £12 billion as a one-off in the first year; we will get it in every successive year, because we will have that money available to spend.

I campaigned in the previous election for the Brexit vote to be properly implemented, and my constituents gave me a majority knowing that that was my view. I also campaigned on the ticket of prosperity not austerity. I do want more money spent on the schools and hospitals in Wokingham and the local area. I am very pleased with our latest settlement, because health staff need more money. I am also very pleased that the weighting of the percentage increases is much more generous to those on low pay, because in my area it is extremely difficult getting by on those low pay rates. We need to recruit and retain more and to give more people in those jobs the hope that they can go on to better paid jobs with good career progression.

I want more money spent, but I do not want it spent irresponsibly. I am offering the Government the biggest spending cut that they will ever make, which is the £12 billion a year that we do not need to keep on sending to Brussels. In the spirit of the Brexit vote, I say bring our money back, take control of it and spend it on our priorities.

Before the referendum, I took the precaution of setting out a draft Budget that I would like the Government to adopt. I explained that I was very unlikely to be the Chancellor of the Exchequer and that people could not take my draft as a promise; it was a set of ideas on how that money could be spent. I suggested, mainly, more spending on areas such as health and social care and education, and also on tax reductions—getting rid of our damaging VAT rates on green products, on feminine hygiene products and on domestic heating fuel, which hit those on the lowest pay most heavily. Those are things that we cannot do for ourselves all the time that we are in the European Union.

[Alison Thewliss]

The Government’s failure to negotiate a zero-rate tampon tax does not give us great hope for any further negotiations with the EU.

[John Redwood]

I think that the hon. Lady will agree that this is one area where even she must see that getting out of the EU is a big positive, because she and I will be able to unite on something for once, and shove the abolition of this much-hated tax through the House. Is it not a disgrace that the world’s fifth largest economy and an important country cannot even control its own taxes? Over all those years in the EU, we were assured by Governments of all persuasions that tax was a red line and that the House of Commons would always be able to decide what the tax rates would be and what was going to have to be taxed. That simply will not be true until we leave the EU.

That is the first bonus. The Brexit dividend is to take control of our money and to spend it on our priorities. It will have a double advantage: not only will it give a boost to growth the first time we do it, but it will cut our balance of payments deficit. I am more worried about our balance of payments deficit than our state deficit, because the Government have done a great job in getting the state deficit down to perfectly reasonable levels, whereas the balance of payments deficit needs working on. The simplest way of cutting it is to stop sending money to the EU, because that is like a load of imports.

--- Later in debate ---

[John Redwood]

Mrs Thatcher was not always right. As her chief policy adviser, I gave her extremely good advice on the single market, which she did not actually accept. She took most of my advice on a lot of things, but I told her not to give the veto away—it was not worth it, because we needed to keep control of our own law making. However, the Foreign Office was more persuasive than I was, and that was where things started to go wrong. We were tricked into accepting what she hoped—and what a lot of British people thought—was just going to be a free market where there were fewer barriers for trade.

What actually happened was that we were entrapped in a massive legislative programme, which meant that more and more controls—often of an anti-business nature —were imposed, even when the UK did not want them and even when we had voted against them, when we were in the minority. That is why many British people fell out of love with the Common Market that they thought they had voted for in the early 1970s; they thought that it would just be about more jobs and more trade, but discovered that it was about the EU taking control. I am afraid that, on that occasion, Margaret Thatcher was less than perfect. She did not choose the right advice to follow. If she had vetoed the loss of the veto, the hon. Gentleman might have had his way and we would still be in the European Union with a rather different relationship from the one that we were forced into taking.

I turn now to the energy industry. Under European rules we were trapped in a common European energy policy, which meant that we went from being entirely self-sufficient in energy to being quite heavy importers. There is a wish to make us more and more dependent on imported electricity and gas through interconnectors with the continent, meaning that we have less security of supply and are more dependent on the good will of many people on the continent—ultimately, on Russian good will, because of the importance of Russian gas to the energy supply on the continent. Fortunately, the situation has not gone damagingly too far, and we can rescue it when we come out of the European Union. Our gas supplies can be much more dependent on Norway and Qatar, which are not members of the European Union. That is a useful precaution because we can trust those suppliers and the supply will not be subject to the same common problem that might arise in the European system.

We need to be careful about the framework of regulation. I am all in favour of cleaner air and looking after the environment, but the rapid and premature closure of coal power stations before we have good, reliable alternatives puts us in a bit more jeopardy. We have already experienced cold days, when there is big industrial demand but very little wind; it is extremely difficult to balance the system and keep up the full amount of power that people want. We may have to go on to industrial rationing in some cases. If we follow European policy and shut all the coal stations without having proper, reliable alternatives in place, running a good industrial strategy will be that much more difficult.

What would I put at the top of my list for a good industrial strategy? My No. 1 need would be a plentiful and cheap supply of energy. Having had jobs that involved running factories and dealing with transformation materials that have a high energy content, I know the importance of reliability and relatively low price for running certain kinds of process industry. The United States are now reindustrialising because they will have access to a lot more cheap feedstock and fuel as a result of their drive to have much more domestic energy, at a time when we have been going in the other direction by becoming more reliant on other systems that are not reliable and on imports. We are now finding that we are becoming short, and our power—certainly at peak demand—can be extremely expensive unless people have a long-term contract that properly protects them.

I urge Ministers to use the opportunity to rethink our energy strategy, and to put it at the top of the list for the industrial strategy they tell us they want, because it is the No. 1 requirement for a strong industry across the piece. The other day I was talking to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who reminded me just how important cheap and readily available gas is to the Potteries. We want those industries to grow and flourish—I used to be involved in them a bit—and there is huge scope for that, but it will require a sensible, UK-based energy policy.

I turn next to the vehicle industry, which I think will be just fine. It has been built, with a lot of foreign investment and local talent, into a very fine industry. But we need to remember its exact shape. The UK has the capacity to make about 1.7 million cars per annum, but it has the capacity to build 2.7 million engines. Last year 1 million of those engines were diesel. Successive Governments have done a good job of persuading large motor and engine manufacturers to come to or expand in the UK. We now have a centre of excellence in diesel engine technology, and engine production generally, for passenger cars and light vans. We should be rightly proud of that, but it is important that the Government understand this achievement and do not do things that inadvertently damage it.



Car sales continued to rise very nicely after the Brexit vote. We experienced a very strong market and there was a good trend of car sales in the UK for the first nine months after the Brexit vote, as was happening before. But in spring last year there was a sharp reduction, which has continued. Why has this happened? Well, it is nothing to do with Brexit. It is to do with policy decisions taken in the United Kingdom. Three things happened at the same time.

First, it was decided that too many car loans were being advanced, so there was a restriction on car loan credit. I think we worry too much about that. There is security: people who get car loans usually have reasonable jobs and incomes. I am pleased to say that we are not looking at a set of job losses any time soon, so I cannot really see the big problem. Secondly, there was the imposition of much higher vehicle excise duty, particularly on higher-value cars, which are particularly profitable and successful to make.

Thirdly, of course, there were the general arguments that diesel is no longer acceptable. Diesel technology in this country, and through European regulation, has reached much higher standards of cleanliness and control of exhaust. As far as we know, all these engines are more than meeting the legal requirements, because we all want cleaner air. But if the idea gets abroad that all these standards are actually going to be tightened very quickly, or that it is going to become unacceptable to run a diesel engine, it puts people off buying. There has therefore been a big collapse in support for diesel engines and cars, which explains the pattern in that market. I hope that the Government will look at a sensible compromise. Yes, we want clean air, but we also need to say and do supportive things for what is now a very important industry in our country.

There is huge scope for farming. The Secretary of State has made a start with his White Paper, but it still of a fairly high level of generality. I look forward to more detail soon. The motif of the policy must be that we can and should grow more for ourselves. In the early days after we joined the European Community, we were about 95% self-sufficient in temperate food, which is the kind of food that we can produce; we are now under 70% self-sufficient. We import a lot of food from the Netherlands and Denmark—countries with similar climates to our own—and quite a lot from Spain, which produces some things that we cannot grow for ourselves, although we could buy cheaper alternatives from South Africa or Israel if we were allowed to do so. We need to look at all that and do a better deal for the lower-income countries that can sell us food that we cannot grow for ourselves without the same kind of tariff barriers. We also need to do a lot more work on how we can grow more of our own food.

[Alison Thewliss]

The right hon. Gentleman’s point on growing our own food falls if we do not have the people here to pick that food. It will be rotting in the fields, as is already starting to happen, because EU workers who have come over to do this job are leaving, and our own workers do not want to do it.

[John Redwood]

There is still quite a large number of net inward migrants to this country. I look forward to higher wages and more automation. All these problems are perfectly soluble. There are now some good automatic systems for picking produce, if people do not want to do those jobs. I hope that there will be more productive ways of employing people so that they can be paid more—for instance, if they work smarter and have more technology to support them. That would be good for the employee and for the farming business. Some of this is about scale and some is about investment.

I hope that we develop a farming policy that still provides public money to support farms sensibly, but that will be more geared to the production and successful sale of food, particularly domestically. We want fewer food miles on the clock and rather more local produce. I hope that the policy will allow and encourage more agricultural businesses in the United Kingdom to add value to the product coming from the field, shed or farm, because that is an important part of developing a prosperous and more successful economy.

The UK has enormous scope in sectors such as the media because we have the huge advantage of the English language. We largely share that advantage with the United States of America, which is also very good at media and internet-related businesses. I look forward to the tech revolution being an important part of our better-paid jobs and in the increase in jobs in the future. Once we are out of the EU, we will also be able to choose our own tax and regulatory regimes. I trust that we will choose a best-in-class, world-leading regime for both tax and regulation. Although I understand some of the irritations that the EU and others have with existing large technology companies, it is important that we also understand how phenomenally popular their services are, how hugely important they are as wealth generators, the choice they offer customers and the new jobs that they will create. We therefore need a tax and regulatory regime that is fair and is not part of a trade war between the EU and the United States of America, which seems to be developing at the moment in an unfortunate way.

Infrastructure is very important. One thing that perhaps unites the House is that we would all like more investment in infrastructure, although we then have disagreements about pace, style, and ways of financing it. There is huge scope for more infrastructure in this country. If we wish to take advantage of our greater freedoms and the kinds of business developments I have been sketching in different sectors, we will certainly need a lot more capacity in road and rail. Rail capacity can be increased more cheaply and more rapidly if we go over to digital controls. One of the features of our railway system is that we run very few trains an hour on any given piece of track. With better controls, we could increase the number of trains we ran on existing track—a quicker and cheaper solution than having to build lots of new tracks.

We are going to need improved road transport. Internet styles of purchasing require road capacity for all the van deliveries that will be made when people have bought on the web. Road capacity is also needed for those who still like going to a traditional shop and expect to find somewhere to park when they do so. Only the shopping centres that have really good access and really good parking are likely to flourish in today’s world, because people naturally want convenience. I trust that the Government will find sufficient public capital support for these necessary programmes, but will also be imaginative in finding new ways of harnessing private finance where that is appropriate, as it clearly is in areas like energy and communications where there are defined revenue flows that should be financeable through the private sector.

The aim of Brexit is to cheer the country up, to get wages up, and to get jobs up. So far it is all going reasonably well. There are more jobs after the Brexit vote, despite the false forecasts. Pay is going up a bit. We would like more improvement in real pay, and it is good to see some moves being made in the public sector. The big Brexit bonuses we want comprise spending our own money and knowing when, how much, and what we are going to get for it; having a fishing policy that makes sense both for British fishermen and for British fish; having a better agricultural policy that means we can grow more of our own food; and having an energy and industrial policy that supports more investment and more growth.

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[Jim Shannon]

The hon. Gentleman beat me to it—I was going to come to that point. Why do people go to food banks? I sign their chits every week, so I know why: because of benefits and delays in receiving them. We have to sharpen our system up. When people are living under a far lower threshold than anyone in this House and many people outside it, we recognise that there are problems. Food banks have brought people together with the right motivation, but they are here for a reason. The hon. Gentleman is right about why that is: because of benefit changes, benefit delays, and marital and relationship break-ups; and because people have lost their jobs. It is good to have the food banks, but they are there for a purpose. I am very pleased to commend the Trussell Trust and the food bank that works through the Thriving Life church in Newtownards in my constituency on what they do. Their volunteers do marvellous work. They are people with passion, belief and concern, as we all have in this House and hopefully outside it as well.

We ask women to get into work, but not enough funded pre-nursery places are available to help them with childcare. We tell parents that they do not get pre-nursery places because they do not meet the benefits threshold. We tell them that they must spend time reading with their children and doing imaginative play after they have had to work all day, although they pay out most of their money on getting an acceptable level of childcare. We say that they should ensure that they take time off for their own mental health.

The Government have tried to address the issue of childcare, and we tried to do so in the Northern Ireland Assembly. However, there is still some way to go on providing childcare, and I say that respectfully. The Minister might want to come back on that. Other Members feel similarly to me and know where the voids are. For some reason, there is certainly a void in childcare. If we want a woman to work, we have to make sure that she has somewhere to take her children that does not cost her the earth. There is no sense in people working if every pound they get goes on paying for childcare. People want to work to keep them sane, but they also want to be financially better off. I make those points with respect to the Minister.

We encourage family units to provide childcare while, at the same, putting the retirement age up by six years. Again, I feel greatly aggrieved that women have to work beyond their time. Many of us in this House and my party have had discussions with the Government about the WASPI women. We all know what the issues are—those are very clear—and what has happened niggles me and my constituents. Those people have to continue to work, and their children must pay someone to mind their children. It is an advantage when someone has parents, grandparents, aunties and uncles who can do the childcare for them. However, if those family members have to work for another six years, that opportunity is never there.

[Alison Thewliss]

Does not the hon. Gentleman agree that often these women worked while their children were small and looked forward to the treat of spending quality time with their grandchildren?

[Jim Shannon]

I absolutely agree. The hon. Lady and I have discussed these things on many occasions. We have a very similar opinion.

I feel that the failure is one that society and perhaps the Government need to address. It has accumulated over a number of years. The economy is essential, as is reducing the deficit, and I support sustainable borrowing, but it is also essential that we provide the support and level of care to make life bearable for our constituents.

Interest rates were referred to earlier. It is absolutely critical that they do not increase so that we keep the economy stabilised, provide opportunities and make sure that we put money in the pockets of our constituents. That will also keep the economy going in the direction that we want so that we make sure that we create more jobs and employment.

I am aware that we bit off too much before the financial crisis, but we cannot compound the problem by putting constituents in debt, or close to debt, as they pay the continual minimal rises that we place on their shoulders. We must do as much as we can to economise while not asking too much from people who are squeezed to the limit. We are moving forward and reducing our nation’s debt, but that must not be at the expense of our constituents. I feel that we face that danger at present, and I ask the Minister to take that into account in his response.

--- Later in debate ---

[Vicky Ford]

The benefit of apprenticeships is that apprentices are earning as well as learning. When I met some of those 5,350 young people who are doing apprenticeships in my constituency—especially those in financial services, which I will talk about later—they told me how happy they were to be earning while also learning.

I also recognise that enabling small businesses to take on apprentices is key in some areas. That is why I was so pleased to hear the Chancellor mention in the spring statement new measures to help unlock the opportunities for small businesses to offer apprenticeships.

We must also remember that apprenticeships are not for everyone. Britain is home to some of the world’s leading universities—more than any country other than the US. Our universities are the jewel in the British crown. I am a member of the Science and Technology Committee, and we have been hearing from some of those universities. We bring students, researchers and ideas-generators from all over the world here, and it is absolutely key that they can continue to collaborate and work together and with leaders in other worlds. That is why I was so pleased that the Prime Minister talked in her Mansion House speech about a science and innovation pact between the UK and Europe after Brexit. There is still work to do on the detail, but we must ensure that that detail is focused on, which is why it is great that the negotiations in Brussels this week are going to mean we can start the next stage of our discussions.

I want to mention a couple of sectors, the first of which is financial services. It is probably the largest contributor to the tax-take in this country, accounting for about 11% of total tax, with £72 billion paid in tax by the sector last year. It is also really important to remember that this is not just about jobs in London. Even in my constituency of Chelmsford, there are about 2,000 jobs in the insurance sector. That is probably the largest sector there. I travelled to Canary Wharf to listen to the Chancellor’s speech on the future trade agreement on financial services. It is key that we get this right, and I am really pleased that we are now focusing on this. The Prime Minister said yesterday how important it will be to have a bespoke deal on services and financial services.

Another sector that I want to mention is the life sciences sector. We are the world leader in many areas of medical research, which makes a £30 billion contribution to the economy and provides 480,000 jobs. None of this has happened by accident. It was here that the human genome was discovered, and the human genome campus is here. The previous Prime Minister’s visionary 100,000 Genomes Project signalled the start of a massive revolution in medical research. There are, however, a few areas in which we could do a bit more to unlock the benefits of that research. The first involves unlocking the benefits of medical research for the NHS. There is still a bit more that we could do to get the synergies working together there.

I should like to advertise something to the House. Immediately after this debate, I am going to be leading the Adjournment debate, in which I will be looking at a very rare disease that affects one of my constituents. No other Member has debated this before. To help medical research in our life sciences sector, we need to ensure that new treatments are not only discovered here but trialled, tested and prescribed here. That is what I shall be discussing with Members later.

[Alison Thewliss]

The hon. Lady is making a very good case about where the UK stands on the life sciences and other sciences, but does she not recognise that a lot of this work—including that being done at the rheumatoid arthritis pathogenesis centre of excellence at the University of Glasgow, which I visited recently—depends on European collaboration, on researchers and funding coming from the EU, and on being able to share excellence in techniques?

[Vicky Ford]

Absolutely. I thank the hon. Lady for that intervention, because I was the only British MEP involved in the negotiations on the last European collaborative research project. I was pleased to hear the Minister responsible for science and research confirming that he intends to continue that type of collaboration—provided that it is still focused on excellence, value for money and so on—as part of the science and innovation pact that the Prime Minister intends to deliver. This sector is vital, and we need to ensure that our world-leading scientists can continue to work easily with those in other areas.

My final thought is—[Interruption.] No, I have got my new medical school. This is an enormously important year, because it is 100 years since women got the vote, and it is also the Year of Engineering. I want hon. Members to focus for a moment on young women considering careers in engineering. This country needs 20,000 more engineers every year, and we absolutely need to invest in our science, technology, maths and engineering skills. The number of professional women engineers in this country is shockingly low. Only one in 10 are female, a lower figure than in nearly all the other European countries. There are fantastically good reasons why girls should go into engineering. One third of all businesses say that they want to recruit more people with STEM skills, and women who study science tend to earn an average of 30% more than their peers. A recent study said that 85% of women engineers were either happy or very happy—

--- Later in debate ---

[Robert Jenrick]

I will come to the hon. Lady’s point.

It is not just important to us to create a country of working people; it is our mission to create a nation of well-paid people in secure and fulfilling careers. We are doing that by tackling the root causes of our low national productivity as no Government have done before. We are seeing some positive signs. Inflation is falling—it fell from 3% to 2.7% in February—and the OBR has said that it will keep falling, leading to real wage growth.

[Alison Thewliss]

Two thirds of children in poverty are in working families. Does the Minister regard that as a positive sign?

[Robert Jenrick]

I am proud of the fact that more people are in work. When I go back to my constituency, Newark in the north midlands, where unemployment is currently at 1%, I am proud of our record and that more families are enjoying the key ingredients of economic security: a job and a reliable wage.

European Affairs

Alison Thewliss Excerpts

Thursday 15th March 2018 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

My hon. Friend makes a good point about the practicalities of the Northern Irish border. Does he agree that the practicalities for the many people whose properties straddle the border are not being addressed at all in this argument?

[Peter Grant]

Absolutely. It was so long ago that neither the Brexit Secretary nor the Foreign Secretary can remember the last time they visited the Irish border. That is a failing that both of them have to put right quite soon. I did not understand just how important a non-border was until I went there with the Brexit Committee and we could not find the border between two sovereign states. That is what borders should be these days. They should not be easy to see on a map or physical barriers; they should be physical routes for the exchange of people and, as I mentioned, ideas.

To date, nobody has put forward a proposal that allows the Government’s red lines of leaving the customs union and single market to be compatible with the other red line of honouring the spirit and the letter of the Northern Ireland Good Friday agreement. That irreconcilability cannot be allowed to continue. If the Government cannot come up with their own very clear and detailed proposals within the next few weeks to reconcile those irreconcilable red lines, the red lines of leaving the customs union and single market will have to go, because the red line of continuing the peace process in Ireland cannot be sacrificed in any circumstances. I appeal to the Minister to give assurances that no proposal involving staffed checkpoints on the Irish border will be given any credibility or consideration in these negotiations.

--- Later in debate ---

[Anna Soubry]

I might not quite go that far, but the hon. Gentleman makes a really important point. I was a member of the Government that decided we would have a referendum. To be very blunt, I am now quite ashamed of the fact that I made a decision that we should have a referendum without the proper debate that we clearly should have had and without the long run-up. More than that, this is the conclusion that I think the British people have also reached: how on earth did a responsible Government put in front of us, the people of this country—notwithstanding how brilliant we are—an alternative that we now see will cause our country so much harm? During the referendum campaign, when “Project Fear” was at its full height—the campaign was very poor on both sides, but “Project Fear” in particular was madness and nonsense—I think that subconsciously, people thought to themselves, “No responsible Government would put something to us as an alternative to their preferred option that would deliver all this stuff, when actually, it will harm our economy, and even undermine or threaten our security and the future of peace in Northern Ireland. They wouldn’t do that.” Of course, now we know that that is exactly what that option was, but we have moved on, as I must too.

[Alison Thewliss]

Will the right hon. Lady give way?

[Anna Soubry]

I will make one last point—no, I will take the intervention, because it is probably more relevant to what I just said.

[Alison Thewliss]

I thank the right hon. Lady for the speech that she is giving, because it is another good one. The point has been made about the very short period running up to the referendum, when people had to make a very big decision on the basis of very scant information. Does she agree that it was far too short to counteract the decades of misinformation, and that we have a real responsibility as politicians to get more information and more facts out to constituents, so that they can understand the basis on which they are going to make decisions?

[Anna Soubry]

The hon. Lady makes a very good point. Look, some people would argue that it is a miracle that 48% voted for the EU. Anybody who plays or watches cricket knows that before a game, they roll the pitch. We have taken a JCB digger to the pitch for the past 40 years. It is astonishing. On both sides, we have all blamed the EU for all our misfortunes: if something was difficult, we just blamed the EU. Then, of course, in a very short period, we said, “You know that thing that we said was really rather rubbish—actually, it is really rather wonderful. Would you go out and positively vote for it?”

The other dawning of the Brexit reality was in the excellent speech that the Prime Minister delivered a few weeks ago. In it, she faced up to the reality in a highly commendable way—her tone was right and I agreed with much of her content. However, the reality of what she said was this: in admitting that there would be, for example, no passporting for financial services and that we would have reduced access to the market, what she was saying—as others have observed—is that for the first time, I think, in the history of any Government in any country in the world, we are actively going to pursue a course, knowing that it will make us less prosperous than we are under the current arrangements. That is the view of Her Majesty’s Government. I hope as we go forward that perhaps the Government, in that spirit of reality, will also understand that this can and must be stopped. We cannot pursue a course that will make the people of this country less prosperous.

We are meant to be talking about the economic side of our EU relations and affairs, so I will make this observation. The OBR’s predictions were to be welcomed because they were better than its previous predictions about our prospects of growth. I observe, as many others have, that we benefit at the moment from a strong labour market. We are almost at the point of having record levels of employment, which means, of course, that we have more money in the coffers by way of taxation and national insurance. In the financial and insurance sectors, we have seen pay rises of some 7%, and as many have observed, services comprise 80% of our economy.

We know that consumer spending has risen, and that, too, would account for the increased money in the coffers, because it means that our VAT receipts have gone up again. The weakness of sterling means that the companies whose foreign earnings are important to them have seen the worth of those earnings go up.

We must take all those factors into account to understand why it is the view of many that, notwithstanding the OBR’s better forecast, our country is actually experiencing some of the slowest growth in the G20. We think we are doing well, but when we compare ourselves to other G20 countries, we see that we are not doing anywhere near as well as we should be. I have given an explanation of why we are not where we thought we might be, but the point, of course, is that if we were not leaving the European Union, we would be doing considerably better and our prospects would be considerably higher.

Let us be clear about this. Investments are already being delayed, and we know that unless we get this transition in place, a number of important businesses will leave our shores. We also know that business wants certainty, and, in my opinion, the certainty that it is crying out for is the certainty of knowing that we will stay in both the customs union and the single market. No one should underestimate the real risks that our country faces. If we do not get this right, businesses will simply leave. We have already seen examples of that. There are Japanese companies that were promised by Margaret Thatcher, one of the finest proponents of the single market, that our country would never leave the single market. They have invested billions of pounds in real, skilled jobs in our country. Anyone who speaks to those companies—as many of us do—should ask them how they see the prospect of our leaving the single market and the customs union, and, indeed, the European Union. The fact is that instead of investing here, they will invest in other European countries, because we were the bridgehead into the EU.

I have dealt with the Government’s analysis in my interventions, and I know that you are urging me to speed up, Madam Deputy Speaker, but I have not had an opportunity for some time to make a long speech about this matter, which is dear to my heart, so I hope you will forgive me. I hear you—or, rather I see you—and I take the hint. I am about to make my concluding remarks. However, these things need to be said.

The Government, quite rightly and responsibly, asked civil servants in all Departments to look at the different options that were available and to analyse the economic benefits that they might or might not convey. I urge Members to read the papers. They should go into the darkened room, or even better, get hold of those papers, because the Exiting the European Union Committee has had the good sense to publish them. This is new modelling—the best available framework, prepared by civil servants who act with complete independence and, as usual, have exercised the huge skills that they possess. They recognise all manner of variances. They believe that these analyses are the very best, and they are keen to sing the praises of the modelling.

What does that modelling reveal? It reveals that even if the House and the Government were sensible enough to accept the single market and the customs union, membership of the European economic area after we had left the EU would cause our projected growth to fall by 1.6%, a free trade arrangement would reduce it by 4.8%, and World Trade Organisation rules—the cliff edge urged by some Conservative Members; the most irresponsible of all options—would involve a reduction of 7.7%. Moreover, those models do not include the value of the customs union.

I want to conclude—you will be pleased to know, Madam Deputy Speaker—by expressing some views on trade deals. It concerns me greatly that the British public are not being properly and fully informed about them. I say with respect to those on the Treasury Bench that it is very important that they are absolutely up front with people and stop putting forward the chasing of what are effectively unicorn deals. We enjoy 50 free trade deals by virtue of our membership of the EU. The idea that we will not get a deal with Australia is madness, because of course the EU will soon be doing a deal with Australia, and who do we think they will be doing a deal with first, the EU or the UK? The EU of course. So we will benefit from all these free trade deals in any event; we are not getting anything different by leaving the EU.

It is very unfortunate that we are not explaining the facts on free trade arrangements—the 50 or so we currently have by virtue of our membership of the EU, and the other arrangements we also enjoy by virtue of our membership. As this analysis shows, the reality is that even if we get every single free trade deal that is available, that still will not make good the loss to our economy of leaving the EU.

So—finally, Madam Deputy Speaker—people must wake up and realise that our EU colleagues will miss us and they want us to stay, and if we leave and a future generation wants us to return we will not be able to re-join on such good terms as we currently have. The EU will not miss us because of our trade—they will find new markets; we must get real on that—but they will miss us because of what our country has always brought to the EU: we are the voice of sanity; we are the check on the excesses; we are the ally that many seek to keep the EU—

Spring Statement

Alison Thewliss Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

My hon. Friend is absolutely right. Over the past few years, parts of the country that have suffered for far too long from low employment and investment have seen increased investment—much of it foreign investment—as well as increased employment and rising wages. They absolutely do not need to take risks on the kind of policies that the shadow Chancellor is proposing, which would plunge us back into a place we have been before and have no wish to revisit.

[Alison Thewliss (Glasgow Central) (SNP)]

People doing the same job should be entitled to the same day’s pay, but the Chancellor continues to ignore the fact that his pretendy living wage is not for under-25s, as 21 to 24-year-olds will earn 45p less an hour; 18 to 20-year-olds £1.93 less; 16 and 17-year-olds £3.63 less; and apprentices a full £4.13 less. Why does he believe in state-sponsored age discrimination?

[Mr Hammond]

The hon. Lady will know, I think, that we also announced—again, this is due to come in in April—record increases in the youth rates of the minimum wage. We have had several exchanges in this Session about the importance of maintaining low levels of youth unemployment and about the devastating effects of youth unemployment—[Interruption.]. I am sorry if she does not like this. The Government take advice from the Low Pay Commission about the impacts of different pay rates on employment prospects, and we balance the need to give people a fair wage with the need to maintain high levels of youth employment, in the interests of those people themselves and of our economy.