RBS Closures (Argyll and Bute)

Angus Brendan MacNeil Excerpts

Wednesday 24th January 2018 Westminster Hall

[Brendan O'Hara]

My hon. Friend is absolutely right. If the Royal Bank of Scotland was not aware before of the anger that this has caused across Scotland, it is very aware now.

It has been well documented that in my Argyll and Bute constituency, RBS plans to close three branches, in Campbeltown, Rothesay and Inveraray. I cannot begin to describe the sense of anger and the growing hostility in those towns, and right across my constituency, at the decision to close those local branches. My constituents are well aware of the hardship that the closures will cause across our communities. It is that anger and burning sense of injustice that has led so many of them to sign my parliamentary petition, which I launched just before Christmas. In Inveraray, Rothesay and Campbeltown, there is not one shop that has refused to take a petition to gather local signatures. I have the petitions here, and will be lodging them on the Floor of the House in the very near future. That is testament to the anger felt across Argyll and Bute at this callous closure plan.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It further underlined the annoyance to see the Prime Minister wash her hands of the situation at Prime Minister’s questions today, following a question from my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford). Surely the chairman of the Royal Bank of Scotland cannot be gliding on to BBC’s “Question Time” ignoring this issue? Ross McEwan cannot continue ignoring invites to meetings. These people, with their salaries, should show respect to the people and justify what they are doing. The UK Government should make sure that these people are not making monkeys of them, either, and should ensure that they go.

[Brendan O'Hara]

My hon. Friend makes a very powerful case. Like the Royal Bank of Scotland at the beginning, the UK Government have underestimated the sense of anger within our rural communities. We must keep up the pressure on the UK Government to act, and act swiftly.

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[John Glen]

I will not take an intervention, because I need to make some progress. Likewise, the Government do not manage the RBS Group; that is headed by its own board, which is responsible for strategic direction and management decisions. By its own volition, RBS has announced a number of branch closures in line with its commercial strategy. Obviously, banks will keep a number of factors in balance when they make these decisions: customer interests, market competition and other commercial considerations. The decisions are theirs to take, but they are also theirs to defend.

I say to the hon. Gentleman who secured the debate that by bringing the matter to the attention of the House again, he is doing a very good job of challenging the bank to justify the decisions it makes. It is for the bank to do that. Indeed, two RBS executives gave evidence to the Scottish Affairs Committee on this very matter last week, and they were pressed on their rationale. I have read the transcript, and they made it clear that customer behaviour is changing and bank branch networks logically are changing to reflect that.

[Angus Brendan MacNeil]

rose—

[John Glen]

I am going to carry on, I am afraid, but I will address a number of points that flow from that.

The banking industry estimates that branch visits have fallen by roughly one third since 2011, and that more than one third of our adult population regularly uses mobile banking apps. The Office for National Statistics estimates that 63% of adults used the internet to bank in 2017. It is not the Government’s role to speak for RBS, but its own figures paint a similar picture of substantial change. Strikingly, I understand that RBS estimates that only 1% of RBS customers in Scotland use any of its branches on a weekly basis. I am aware that there are disputes over that, and I will address that point in a moment. The banking industry is changing to accommodate this shifting customer behaviour. However, the Government recognise that closures have an impact on customers who still need or want to bank in person. We have addressed that and ensured that measures are in place so that everyone can continue to access banking services.

[Angus Brendan MacNeil]

The Minister said that only 1% of customers are accessing those branches. On an island of more than 1,000 people, that does not square with RBS telling us that only 13 people went into the branch. I do not need MI5 on the Isle of Barra to tell me who goes in the branch. We see exactly who goes in there. Twenty went in on the morning that RBS made that announcement. It got rid of a load of employees and hired people from an agency. Surely, as the largest shareholder, Government have to have some oversight over the cowboy behaviour that has been going on at the Royal Bank of Scotland—it is not Scotland any more.

[John Glen]

I am grateful for that intervention, but I will not take any more. I will address how the bank can be challenged on this point in a moment.

I want to make four points in the remaining time I have. First, I want to discuss the Post Office. The Government has improved face-to-face banking services at the Post Office. With more than 11,600 Post Office branches in the UK, it offers a robust network to ensure that customers have a physical opportunity to bank locally if they choose. We should not forget that 99.7% of people live within three miles of their local post office, and 93% within one mile. We are going to experience a cultural change in the appetite and behaviours around using post offices.

Earlier last year, the UK’s banks and building societies and the Post Office reached a new commercial agreement that set the standard for the banking services available at the Post Office—balance inquiries, cash withdrawals, cash deposits and depositing cheques—to ensure that there would be a uniform level of service across the country. That agreement means that 99% of personal customers and 95% of business customers can do their day-to-day banking there.

I am aware that for the service to maximise its potential, the banks’ customers must know about it and know how to use it. That is why my predecessor wrote to the Post Office and to UK Finance last month; I am expecting a response today and I expect to see substantive commitments from all involved. We can all do our day-to-day banking at the Post Office and we should spread that message far and wide, especially to those of our constituents who may be worried about this issue.

Secondly, I will address a number of the concerns raised by hon. Members about the access to banking standard. As well as bolstering the Post Office, the Government support the industry’s access to banking standard that all major high street banks have agreed to. The standard commits banks to a number of outcomes when a branch closes: first, that they will give at least three months’ notice of a closure and explain their decision clearly; secondly, that they will consider what services can still be provided locally and communicate clearly with customers about alternative ways to bank; and, thirdly, that they will ensure that support is available for customers who need extra help. That support includes help for the digitally excluded who want to learn how to bank online, and guidance for those who regularly use branches and who need to be shown where and how to use the local post office that can help them.

I understand that RBS has undertaken substantive discussions with MPs and other local stakeholders on the future of banking in the communities affected by closures.

[Angus Brendan MacNeil]

rose—

[John Glen]

I am not going to give way again. Where it has not done so, it is incumbent on RBS to engage with Members of Parliament to do just that. In excess of the notice required by the standard, RBS has given six months’ notice of these closures. The access to banking standard is the practical way to shape a bank’s approach to local areas, and I encourage every Member to ensure that their community is aware and able to engage with their bank directly. The Lending Standards Board monitors and enforces the access to banking standard. It will monitor how RBS and other banks fulfil their obligations to their customers. The board can be contacted by Members of Parliament if they have legitimate concerns about the way in which the process is being fulfilled. That new and additional scrutiny is a necessary and welcome addition to the way the standard works.

Thirdly, I will address the current account switch service. Should other banks offer more extensive local facilities, the Government have made it easier than ever before to switch to an alternative, using the current account switch service. The switch service is free to use. It comes with a guarantee to protect customers from financial loss if something goes wrong, and it redirects any payments mistakenly sent to the old account, providing further assurance for customers. That means that, more than ever, banks are incentivised to work hard to retain their existing customers and attract new ones.

Finally, a number of points have been made about access to cash. I understand that RBS is considering whether an additional mobile bank branch would be required in the constituency of the hon. Member for Argyll and Bute. More widely, the Government continue to work with industry to secure the provision of free access to cash. In December, LINK—the organisation that runs the ATM network in the UK—committed to protecting all free-to-use ATMs that are a kilometre or more from the next nearest free-to-use ATM. This is a welcome strengthening of its financial inclusion programme.

I acknowledge that this is a very difficult matter, and I commend the hon. Gentleman for bringing it to the House again. I commend all hon. Members who have contributed. I believe that I have set out clearly where there are some options to challenge the banks, if they feel justified in doing so.

Question put and agreed to.

Banks and Communities

Angus Brendan MacNeil Excerpts

Thursday 11th January 2018 Westminster Hall

[Martin Whitfield]

My hon. Friend raises a very interesting point about who the winners are in this situation. Certainly, we can identify the losers. The losers are the very community that we hold so dear; the losers are the high street—that geographical area where people gathered together and still try to. As my hon. Friend says, we have high streets that have been hollowed out. We need to find a way to stop this hollowing out and fracturing. The banks form a crucial, fundamental part of the foundation of maintaining our high streets, which we need to maintain our community and our society. We have reached a tipping point now—a point of no return—where the Government must step in with practical solutions to stop future closures and to address the fragmenting relationship with banks.

In 2015 we had the access to banking protocol, which spoke highly of financial inclusion and local engagement from big banks, but that fell short of any statutory protections. Members will be aware of the Griggs report the year following, which offered a series of constructive remarks and ideas to improve the settlement. Unfortunately, it addressed areas where the last bank had already left town. It does not, like my party's position, commit to a new legal protection that would enable banks to keep a presence in their local communities, which need them so much. Any new settlement should be constructively built in partnership with the banks and should engage with the shareholders of the banks who often engage with them most the local users.

What are the other answers? The Government have tried, and I suggest failed, over the past three years to try to displace some of the local bank branches with community post offices. The post office is another fundamental cornerstone of our high street and community. As my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), a campaigner on this matter, will testify, that alternative provision works only if the post offices are not themselves being ripped from our high streets and from the communities they serve at a similar rate. Post offices rightly have a valued position on our high streets, but we cannot place the burden and responsibility of banking on a workforce who are already stretched.

The decision to merge retail banking into our post offices is not workable in the present form, and nor is it a popular alternative. Figures from Which? show that although the British public think most post offices are doing a great job, many do not even know of the alternative banking options available there. I also tentatively welcome services such as the mobile branch service operated and offered by RBS and the idea of shared buildings. My constituents do not believe that such solutions go far enough to ensure a trustworthy banking presence in East Lothian. They may fit an economic model, but they do so at the risk of continuing to fracture the trust. The single solution of a banking van might work in one place, but will not work in another. To apply it as an idea across the country is foolish and short-sighted.

The trust that people have is also influenced by the quality of protection that communities witness. Local bank staff, placed at the heart of communities, have a responsibility to be the last check and balance in terms of consumer protection. Speaking with campaign groups, including Which?, this week, I was heartened to hear of cases where people had gone into their local branch to withdraw large sums of money and the bank teller has said, “This is unusual for you. What is this about?” With that simple question they have prevented a retired couple from losing substantial sums of their life savings. That solid local relationship with trained members of staff in the local bank can go a long way to protect current accounts from bank fraud, and staff can also advise on and discuss people’s challenging financial problems.

When it comes to the assessment of community safety, I raise the question of the bank’s responsibility when a sophisticated thief dupes an individual out of money. Is it right that the bank can absolve itself of all responsibility simply because the crime was so complex and maliciously delivered that the victim genuinely believed they were dealing with their own bank branch? Such a crime might be a lot harder if the perpetrator first had to build a branch on a high street to defraud retired couples of their money.

The advent of online banking has been transformative, and it will continue. There is no argument or objection to that, but I am concerned that focus has shifted solely to it as the answer to the banking problems. It would be completely irresponsible to abandon the 20 million people who still depend on face-to-face bank services. Online banking, which will continue to grow, must be accessible. It is certainly not the fault of the big banks that Governments have failed to implement a broadband service fit for the 21st century. Nor is it the fault of the banking industry that nearly 2 million people across the UK experience internet speeds of less than 10 megabits per second, meaning that online banking will not work. But banks should be made to consider broadband blackspots and digital inclusion when they plan closures, as well as the impact of shifting consumer services from face-to-face banking to online services.

Four in 10 Scottish consumers experience service issues with their broadband. How does the banking industry expect a transition to take place? In 2015, 80% of my rural constituents were dissatisfied with their internet speeds, and yet banks in Tranent, Prestonpans and Gullane in my constituency have closed in the past three years. I am interested in the thoughts of my Scottish colleagues and others here on this matter. Should big banks be made to consider broadband speeds in any meaningful consultation on bank closures?

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It would have been nice to have had a consultation before we heard that the bank was closing. The buccaneer spirit of the Royal Bank of Scotland is exemplified by the fact that it did not bother having a consultation.

[Martin Whitfield]

I will deal with the question of consultation in a few moments. I want to establish a basis for that with regard to the availability of physical money.

--- Later in debate ---

[Stephen Kerr (Stirling) (Con)]

It is a privilege to serve under your chairmanship, Mr Gapes. I compliment the hon. Member for East Lothian (Martin Whitfield) on obtaining the debate. It was my privilege to accompany him to the Backbench Business Committee and I was delighted when permission to hold the debate was granted.

If anyone should be aware of how important banking is to people in their daily lives, it is the banks themselves. They know that people need banking services to get paid, pay their bills, save and, usually, buy a house. They know that keeping a pile of cash under the bed is not an option in our society, so they should recognise that it is their responsibility to ensure that rural communities in particular have reasonable access to banking services. Unfortunately, as a Member who represents a largely rural constituency, I have to tell the House that many rural communities are losing that access and their connection with banking.

I am going say something now that might be seen as something of an article of apostasy in my party, because I am going to agree with the Scottish National party council leader in Stirling. He wrote to me just before Christmas making some valuable points that I can only agree with. In fact, I think I may have said them first, which justifies me in agreeing with him. He makes the point in his letter about the Royal Bank of Scotland closing its Bannockburn branch, which means there will be no banks at all there. I want to use this opportunity to commend the people of Bannockburn ward, more than 2,000 of whom signed a petition asking the Royal Bank of Scotland to review its decision. I want to make a point that is also made by the leader of Stirling council:

“This closure will have a disproportionate impact on some of our most vulnerable citizens”—

as was mentioned earlier—

“within the Bannockburn and Eastern Villages area with many reliant on high street banking.”

The letter continues:

“I have been approached by concerned constituents many who are elderly and neither have the access or ability to engage with on-line banking. Many are distrustful and indeed fearful of using the internet for such transactions.”

That point was also made by the hon. Member for East Lothian. I have also been approached by hundreds of my constituents—I do not exaggerate—who tell me that it is a fundamental act of injustice to remove the banking services from the communities that, as he said, need them most.

In my constituency, RBS plans to close three branches—in Dunblane, Bannockburn, and Bridge of Allan—leaving one RBS branch in the entire constituency. By the way, that branch is in the centre of Stirling and access to it is impossible for anyone with any form of mobility challenge. It is not the best locality—either for car parking or for getting to—for the single remaining RBS bank in my constituency. That is bad news for small businesses, which benefit from having a local branch, as the hon. Member for East Lothian explained well. It is bad news for the staff who work in the branches, and for elderly people and people who are less well off, who are less able to make the journey to a branch several towns away.

I should make it clear that the Royal Bank of Scotland is not the only offender. I should also make it clear that I used to work for RBS, when I was a callow youth, on leaving school.

[Angus Brendan MacNeil]

Last week.

[Stephen Kerr]

Thank you very much. The hon. Gentleman has become my hon. Friend suddenly.

I have a fondness and affection for the Royal Bank of Scotland. It is a grand old Scottish institution, which has been ruined by the mismanagement of the directors of a decade ago.

I ask the Minister to look at what the banks propose. They are saying, “We are going to close the branch. Go to the post office.” That is not practical.

--- Later in debate ---

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

What we see here is a bank that has acted in a buccaneering way, with no impact assessment at all, no community responsibility and no thought of how it might affect communities. The community I am talking about is an island community, and one of their first thoughts was of the Cashline machine. Islanders on the island of Barra have to take a five-hour ferry to Oban and then either take a few hours’ drive to Gairloch or another ferry to Tobermory on the island of Mull to access a Cashline machine. Their next thought was, of course, going to South Uist, which would involve at best a half-day trip at a cost of about £20 or £30 return to access maybe £50 from the Cashline machine.

Luckily, on day one RBS, after telling us it had done thorough diligence and been very thoughtful, had to reverse its position after a few tweets about what it was doing on the Cashline machine—so little was the thought that RBS had put into the buccaneering, high-handed, reckless hatchet-man job. It does not care about the communities it has served for so long, and it is showing them no loyalty whatsoever. As a customer of RBS—the only bank on the island of Barra—it is absolutely sickening to find that it is turning its back and walking away, and that it does not care.

I argue that the way RBS is going about this at the moment is such that the patriotic move would be to move money out of the Royal Bank. It can drop the name “Scotland” for the way it is treating people all over rural Scotland at the moment. Whether in East Lothian, Stirling, Inveraray or even Wales, the way RBS is going about this is in no way decent, moral or nice. It is a bunch of people on corporate welfare, with £16 million in bonuses a year. Now, £16 million in bonuses a year would pay for the salaries of the staff at the branch in Castlebay, Barra, for 266 years. That is the level of greed we see from those people—it is not just greed, but cowardice and irresponsibility.

I invited Ross McEwan to come to Barra, and I got a letter from Les Matheson, which said:

“Thank you for inviting Ross McEwan and Hollie Voyce to visit the Isle of Barra. As the CEO for Personal and Business Banking I regularly visit our branches across Scotland to meet customers and staff, and I can confirm I will be visiting Castlebay in the New Year.”

He came in on a flight in the morning and went in the afternoon. How do I know? Because I happened to visit the branch with a banking issue on Friday afternoon, to be told by the staff, “Did you know you missed Les Matheson coming to Barra?” It was an act of utter cowardice. None of them have yet come to face the community at all.

Before I come to the end of my speech, I congratulate the hon. Member for East Lothian (Martin Whitfield) on securing the debate and say to him, “Very well done indeed.” I was trying to do the same myself. I hope that some of us will give thought to demonstrations outside the headquarters of the Royal Bank of Scotland if it continues in this way. My hon. Friend the Member for Argyll and Bute (Brendan O'Hara) pointed out that George Osborne, when he was Chancellor, sought consent for Stephen Hester’s appointment. I have to ask the Minister: this time, with the devastating blows that are hitting Conservative, Labour, Scottish National party, Liberal and everyone else’s constituencies, was consent sought?

I know the Minister is a principled man. He is in a new job, and such a job in the Treasury is a great test of principles. We will have to see who is in charge here. Is the bank owned by the Government, or do the bankers own the Government? Who is telling who where to jump? Who is pulling the strings? What is happening? The Government cannot play Pontius Pilate. With the Bannockburn closure, I am left to think that we will have to send the Royal Bank and its greedy corporate welfare home to think again.

--- Later in debate ---

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I begin by congratulating my hon. Friend the Member for East Lothian (Martin Whitfield) on securing this debate on a topic that is clearly of such central importance to many Members. I also congratulate him on his speech, which I mean not just with the usual courtesy. I thought it was an excellent introduction and a fair assessment of the situation the UK faces, and particularly Scotland.

This debate is the first in which I face the new City Minister. I warmly welcome him to his new role. He will find the shadow Treasury team always available with reasonable suggestions for a fairer and more prosperous Britain. I look forward to spending a great deal of time with him on statutory instrument Committees over the next few years.

I often think that banks have one thing in common with those of us who are politicians—with Members of Parliament in this place. People often say that they are not keen on politicians but that they feel quite affectionate towards their local MP. Similarly, many people do not feel particularly affectionate towards the banks, but do have quite a lot of regard for their local branch. We can see in this debate the strength of feeling that changes to the high street banking presence have generated.

The British banking industry is vital to our national economic infrastructure and is a sector that we should be able to be proud of. It is clearly important because of the revenue that it generates for the Treasury. UK- domiciled banks contributed an estimated £35 billion in tax in 2017 and they also employ 1.5% of the entire UK workforce.

[Angus Brendan MacNeil]

On that point, will the hon. Gentleman give way?

[Jonathan Reynolds]

I give way to the hon. Member for Na h-Eileanan an Iar.

[Angus Brendan MacNeil]

Well done—perfect pronunciation as well. The UK has a problem with productivity. Does the hon. Gentleman agree that this move means that people will have to spend many hours moving about the country to get to the banks, which were much closer at one time, not on their core activity? It is a destroyer of productivity. On that basis alone, the UK Government should call them to heel.

[Jonathan Reynolds]

That is a very reasonable point. Hon. Members such as my hon. Friend the Member for Bishop Auckland (Helen Goodman) and the hon. Member for North Ayrshire and Arran (Patricia Gibson) have shared stories of the round trips, the incredible journeys, that people have to make because of the lack of a banking presence locally. I thought that my constituency was quite badly affected, but the stories that I have heard today show just how widespread the problem has been.

The lending that banks provide is essential to financing growth in the economy, for both individuals and small and medium-sized enterprises. Many British people who are in credit benefit from free banking and 24/7 access to their money through a variety of channels and new technologies. However—and it is a big however—the memory of the British public is not so short that they do not recall the immense damage wrought on the country in 2008 by the financial crisis, which started in the banking sector. We should not underestimate the profound impact that those events have had on public trust in both retail and business banking.

Bailing out the banks, as the Government of the time did, was, without question, the right move. I often say that it would be more accurate to describe that as the Government bailing out the public from the consequences of what the banks had done, rather than straightforwardly bailing out the banks. However, those actions, which in some cases brought establishments into public ownership, clearly reiterated that the relationship between the banks and the public should be reciprocal. The fact that taxpayers’ money was made available to banks reinforces that financial institutions are of central importance to our economy’s wellbeing.

Banking is unlike other industries, in that dealing with people’s money gives banks a unique and special responsibility. That brings with it, rightly, higher expectations about conduct, culture and putting the customer first. As a country, we have in the past 10 years legislated for a considerable increase in bank regulation, much of which, we hope, will prevent us from ever having to witness events like those of 2008 again. I recognise that in tandem with that many banks have made efforts to bring about cultural change internally, to overhaul systems and processes and to show that they take their role in the economy seriously.

However, there is clearly still so much to be done in rebuilding the relationship between the banking sector and the public. A YouGov study released in March 2017 showed that just 36% of British consumers trust banks to work in their customers’ best interests. Last year, I was at Mansion House for one of the industry body dinners, where the chief executive of one of the big banking representatives said that its research showed that just 13% of SMEs felt that they could trust their bank to do the right thing for their business. That is no good for the banks or for us as politicians and it is certainly no good for the businesses that feel that way.

Now is the time for banks to demonstrate that they have learned from the past and to recompense for past failings. This is not just about a banking presence on the high street. The historic events involving things such as RBS’s Global Restructuring Group are a case in point. Serious mistakes, errors of judgment and, we have to say, in some cases, criminal activity took place, with appalling consequences for some businesses in this country. It is not enough that the requisite cultural change has taken place to prevent such events from happening again; rather, the banks must show that every effort has been made to rectify that behaviour, show that complaints are taken seriously and, crucially, show that changes are in place to ensure that customers can never again be exploited in that way.

That underpinned Labour’s decision to table an amendment to the Finance Bill calling for a reversal of reductions in the bank levy. The cut in the bank levy is in effect a tax giveaway to the big banks and is worth £1 billion in 2018 alone. Given that that comes at the same time as the Government’s baffling decision to sell off RBS shares at a huge loss just as the bank returns to profitability and after the taxpayer has paid the fines for past behaviour—

[Angus Brendan MacNeil]

Given the state of flux in UK politics, it is perfectly possible that within a year the hon. Gentleman could be sitting in the Minister’s seat. What would he do about all these branch closures if he were?

[Jonathan Reynolds]

First, I am very grateful to the hon. Gentleman for suggesting that such a promotion might be possible. It is not something we can take for granted, but I will specifically address the RBS branch closures later in my speech. I want to make the point at this stage that rightly, and for a variety of reasons, the British public are questioning the return that they have got for their investment in the banking sector.

Much of this debate has been about branch closures. I think that everyone in the debate has admitted that we are in a time when the banking sector is undergoing considerable technological change. The exciting bit of that is the potential to deploy some of the advances for the benefit of those people who have had trouble interacting with the traditional banking system. It always confounds me that this country can play host to the most successful and most global financial sector in the world, yet at the same time we have such high levels of financial exclusion. More than 1.5 million people remain entirely unbanked. In many cases, how the traditional banking system has worked has compounded the problems rather than seeking to solve them.

I want to see new technology give us new ways to address financial exclusion, rather than being used as an excuse to push more people towards the excluded position. There is no doubt that the reports that the sector itself is looking into show how low-cost, flexible and accessible services can be provided to people who are excluded. Doreming, for example, allows individuals to shop without access to a bank account. We want to work with both the banking sector and regulators to ensure that such initiatives can access a level playing field, with the right safeguards for those who use them. When I talk to people in the financial sector, they show huge enthusiasm and passion for using their expertise to make the sector world leading and to address some of these issues. However, 10 years on from the financial crisis, rather than having that moment of reflection and seeing what new opportunities we could use to tackle financial exclusion, debates such as this, about the sense that banking is being removed from more and more people, seem to dominate.

It is crucial that we use technology to benefit all consumers, rather than creating a pared down, automated banking sector that leaves vulnerable customers without the support they need or that gives us a situation akin to what we see in the energy market, where a small group of savvy consumers get quite good deals, but at the cost of a larger group of people subsidising them and getting quite a poor deal.

Specifically on branch closures, there is no doubt that the branch network has been shrinking at an accelerating rate. In December 2016, Which? reported that more than 1,000 branches of major banks had closed between January 2015 and January 2017, with nearly 500 more set to be axed in 2017. We have seen from recent announcements by the Yorkshire Building Society and, more dramatically, by RBS, which plans to close 259 branches, just how much that is accelerating. As I said, this has affected my own constituency: Mossley, Stalybridge and Hyde have all seen branch closures. But frankly, the scale of some of the stories that hon. Members have shared today has been quite shocking. I want to say clearly that we believe the scale of the closures is disproportionate and unwarranted and should be reconsidered. In 2015, the big four high street banks made profits of more than £11 billion from their retail businesses, which own and operate the high street networks.

Research conducted by the Social Market Foundation in 2016 found that a strong consumer appetite remains for a physical presence when banking. Nearly two thirds of consumers would prefer to talk to someone face to face when making a big decision, and nearly half of those who had visited a branch in the previous 12 months said that that was for reassurance and support with more complicated transactions. The report found that 11% of the population—nearly 7 million people—use no other banking service than their local high street branch and that those people are overwhelmingly older and less affluent. Another study found that lending to small businesses in the postcode area actually fell following a local branch closure—that has to be of concern.

If you bear with me, Mr Gapes, I will conclude in a moment, but I want to say specifically that Labour’s answer to this problem is to propose a change in the law regulating banks, so that no closure can take place without appropriate local consultation—not a tick-box exercise—and without Financial Conduct Authority approval. A future Labour Government would obligate banks to undertake a consultation with all customers and to ensure they involve representatives of the relevant local council. The branch would be mandated to publish details of the reason for closure and include the relevant financial calculations showing the revenues and costs of each branch affected. The share of central costs such as accounting systems, IT, cyber-security and personnel allocated would have to be separately identified, especially as many of these costs are relatively fixed and are not proportionate to the number of branches in the network.

I thought the suggestion from my hon. Friend the Member for Bishop Auckland is absolutely the right one and I have considered it for some time, that is, how, when branches leave the high street, the sector can come together to provide a joint solution. Those of us who use online banking recognise that there will parts of our lives in the future when we might no longer be able to do that—whether because of dementia or Alzheimer’s—and we need a solution.

In conclusion, Britain has a world-leading and robust banking system, but the banks must work with all of us, as policy makers, to tackle problems such as the lack of investment in this country and financial exclusion, and crucially to make sure that we move away from a country mired in personal debt to one with robust savings. Only when they are able to do that and show that their branch networks are part of that, will they be able to restore some of the faith that was lost in the sector 10 years ago.

--- Later in debate ---

[John Glen]

Thank you, Mr Gapes. If I am going to get through and give some detail, I need to press on. The point I am making is that, in a number of cases, alternatives are available. I want to make that clear—it needs to be made clear by us to our constituents.

The hon. Member for Bishop Auckland (Helen Goodman) and another hon. Member made a constructive suggestion about shared premises. That is obviously a decision for individual banks to consider, but through the office that I hold I would encourage the industry to think creatively about how banks can continue to serve their customers and minimise the impact of bank closures. Those are certainly conversations that I will take forward in my engagement with the industry.

Let me get back to the script, as it were, and try to make some progress so that I can address some of the issues that have been raised.

[Angus Brendan MacNeil]

Before the Minister goes on, will he give way?

[John Glen]

I will not, if the hon. Gentleman does not mind. I realise that his constituency is perhaps unique in the United Kingdom, and I acknowledge that those alternatives are not going to be available in every circumstance, but that was not my purpose in making that point. What I am trying to say is that there are alternatives and we should be talking about them.

The responsibility of banks is to consider the impact of closures on a community and to mitigate that wherever possible, but as we have heard today, and as the title of the debate suggests, banks are much more than just bricks and mortar. Their contribution to our economies and communities does and should go much wider: providing basic bank accounts to those who need them; providing the mortgages that help young people to get their first step on the housing ladder; and offering financial education.

I will now set out some of the ways in which banks are developing and evolving. Like all businesses, they must adapt to changing customer behaviour. The industry estimates that branch visits have fallen by roughly a third since 2011, just seven years ago. Three times out of five, when customers need to make a payment or otherwise interact with their current account, they use a mobile to do it. It is easier and quicker than it has ever been before to manage our money in that way. We are much less likely to use a physical branch on a regular basis, and that has driven some of these decisions. The banks’ branch networks are changing to reflect that, and I suspect that trend will continue.

Earlier this year, we saw the implementation of open banking, a new initiative that will transform how we are able to manage our finances, unlocking new opportunities for businesses and consumers. Good-quality broadband is important to ensure that these innovations do not leave anyone behind. That is why the Government are taking action to support access to these new digital services. The new universal service obligation on high-speed broadband will give everyone in the UK access to speeds of at least 10 megabits per second by 2020, which should play a big role in enabling some more of these services.

We are supporting customers who still need or want to bank in person. The Government support the industry’s access to banking standard, which commits to providing a minimum of three months’ notice. Some banks are giving longer periods—I believe that RBS was giving six months’ notice of closures in December. I note the observations of some Members on the inadequacy of that process, to which the banks will need to respond, but there is a practical way that we can shape the banks’ approach in a local area. The access to banking standard is overseen by the independent Lending Standards Board. It will monitor how banks, including RBS, fulfil their obligations to their customers under the standard, and it is responsible for enforcement.

The Government have supported improved face-to-face banking services at the post office, which is a critical element. The post office network is in good health, and the number of branches grew significantly in 2017 for the second year running. As a courtesy, I need to make way for the hon. Member for East Lothian to respond to the debate.

RBS Rural Branch Closures

Angus Brendan MacNeil Excerpts

Monday 18th December 2017 Commons Chamber

[Ian Blackford]

I know that many people want to intervene, but I will try to make some progress because of the time. I will take some interventions later.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Just before my right hon. Friend makes some progress, will he give way?

[Ian Blackford]

Nice try. Having a bank on the high street that collects and issues cash and provides other banking services is instrumental to the economic wellbeing of all our communities. Individuals and businesses rely on the access in person to banking services. Why did we save RBS, if there is no recognition that there is a liability on the bank to serve its customers and communities? Customers who have been loyal to RBS for generations find branches being closed on them. That is happening to people such as Cyril French, who lives in Plockton and is a customer of RBS at the Kyle branch. Cyril is 87 and has Alzheimer’s. The staff at the RBS branch are of enormous assistance to him when he goes on his weekly visit to the branch. What is Cyril to do if the bank closes? The next nearest RBS branch would be in Portree on the Isle of Skye, more than 40 miles away. On highland roads, this would take more than an hour, and he would have to be taken there either by family members or by his carer. Is that what Cyril should have to endure to visit a local bank?

Let us think about the local businesses that rely on the bank for depositing and collecting cash. Where are they to go? Let us take businesses such as the thriving Eilean Donan Castle in Lochalsh, which uses the Kyle branch. It is 43 miles from the next nearest RBS branch in Portree. Eilean Donan Castle is a thriving tourist destination, with over 540,000 visitors a year. It deposits millions of pounds of cash a year at the Kyle branch. Its insurance policy demands that it has as many as three staff members to take the cash to the bank. The impact on it of their having to drive to Portree rather than Kyle would be considerable in terms of time and staff resource.

When customers visit their local branch, they will often do other shopping, go for a coffee and such like. The closure of the last branch in Beauly in my constituency will drive valuable business away from the town. Personal customers and businesses will go to Dingwall or Inverness and will more than likely take their other business with them to these places. Closing the last bank in town has a similar effect to the removal of services such as local schools, and it undermines the sustainability of our communities.

Tax Avoidance and Evasion

Angus Brendan MacNeil Excerpts

Tuesday 14th November 2017 Commons Chamber

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Will the right hon. Gentleman correct the record? He said earlier that the UK led on the 0.7% target, but the UK was 40 or 45 years late. The 0.7% target was agreed in 1970, and the UK reached it decades behind the Scandinavians. I do not see that as leadership. Does he want to come back on that?

[Mr Mitchell]

The hon. Gentleman cannot get away with such a narrow, partisan comment. Britain was the first G8 country to stand by its commitment to the poorest people in the world, and we are very proud that it was this Government who did it.

The highly respected Africa Progress Panel, in a recent study on the Democratic Republic of the Congo, made it clear that stolen funds and stolen taxes cost that country £1.5 billion, which is more than it spends on health and education. It is a deep irony that some of the world’s poorest people live on top of some of the richest real estate, as is clear in the DRC. Credible World Bank studies make it clear that the money stolen from the people of Africa through unpaid taxes or concealment dwarfs all the foreign direct investment and international development money that flows into Africa each year.

--- Later in debate ---

[Kirsty Blackman]

I agree with my hon. Friend on that, as I, too, have constituents who are exploited by organisations such as BrightHouse. It is not a company that anyone reputable should be investing in.

It is not that difficult for people to pay the tax that they owe; it is not that difficult to say to a financial adviser—this is for those who have bags of cash—“I would like my money to grow, but I wouldn’t like it to grow by avoiding the tax that I owe.” It would be easy for people to say that. It is clear that some people lack a moral compass. Where they are taking decisions to engage in aggressive tax avoidance, the Government must legislate so that they can no longer do so—to provide that moral compass for people and make sure that the tax is paid when it is owed. We must have the best possible tax rules in place. We must simplify the tax code. We must crack down on evasion, and we must legislate to reduce avoidance. The Government are in an untenable position: they cannot continue to implement austerity while leaving a tax gap.

[Angus Brendan MacNeil]

We note that many of the tax avoiders do not avoid using our roads, our schools and our hospitals, and they certainly do not avoid using the police to look after their lumps of money, here, there and everywhere.

[Kirsty Blackman]

I absolutely agree with my hon. Friend from the Western Isles. People, however much they are earning and however much tax they are paying, are using public services. Our party aspires to have brilliant public services. We aspire to have people working in our public services who are paid a reasonable amount and do not have to face a pay cap. The only way we can provide the public services and benefits system we want is by having a system where people pay the tax they owe. We continue to call for this to be devolved to Scotland because we think we would take better decisions. In the absence of devolution, we would like the UK Government to take actual action, rather than just saying, “Look how great we are.”

--- Later in debate ---

[James Cartlidge]

I was referring to my earlier intervention, when there was some confusion; the point of substance I was trying to get at was the difference in the tax gap. The precise figure for the tax gap is now 6%, and it was 8% under Labour. The difference in annual terms is £11.8 billion. That is incredibly important, as the newspapers are dominated by all the coverage of the Paradise papers, and the impression that gives the public is that multinational companies are running the rule over us and getting away without paying their fair share of tax, and that we are failing to deal with that. In fact, all the statistics show significant improvement under this Government in closing the tax gap and bringing forward measures to deal with avoidance and evasion.

As my hon. Friend the Member for Amber Valley (Nigel Mills) mentioned, one important issue is property. My experience, before I came to the House, was in property, as I ran a business helping first-time buyers. One of the great grievances felt by first-time buyers is the sheer quantity of money that has come into the property market, particularly in London. That money is driving up prices and making property less accessible to local people who want to get on the ladder. We should remember that we have brought in two important measures to deal with that. Until April 2015, foreign nationals did not pay capital gains tax when they sold a property in the UK. We closed that loophole in April 2015.

[Angus Brendan MacNeil]

Is not one of the greatest problems of the housing crisis described by the hon. Gentleman the inequality in the UK, where the 100 richest individuals have the same wealth as the bottom 19 million? Indeed, globally, the 85 wealthiest people in the world have the same wealth as 3.5 billion people.

Devolved Powers in Scotland

Angus Brendan MacNeil Excerpts

Tuesday 17th October 2017 Westminster Hall

[Stephen Kerr (Stirling) (Con)]

I beg to move,

That this House has considered the use of devolved powers in Scotland.

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to lead my first debate as a Member of Parliament.

Twenty years ago, I was in the minority. At the referendum in 1997, I campaigned against the establishment of a Scottish Parliament, not from party loyalty but from the starting point that any dilution of the Union could lead to its ending. I urged the people of Scotland to think twice and vote no. They did not; instead, they voted yes to a future with a devolved Parliament in Edinburgh.

However, I now realise that I was wrong. With the zeal of the convert, I have trodden my own road to Damascus and now I stand here today to extol the virtues of the Scottish Parliament and devolution. The Scottish Parliament has helped and is helping to create a better Scotland, and a more comfortable and confident Union, too; but more than that, I firmly believe that devolution is a principle worth arguing for. I am not talking about devolution in the sense of the establishment of a Scottish Parliament or Welsh Assembly, but about the concept of devolution. It is core to my credo that politics should be and is local. It is personal to communities that decisions that impact on people’s lives should be made as near to them as possible. Edinburgh is not the end of the road; Holyrood should just be the beginning. Politics should be local and we should seek to localise decision making.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

rose—

[Mr Philip Hollobone (in the Chair)]

Order. This is an hour-long debate. Lots of Back Benchers have put in to speak. The time limit is already looking like it will be three minutes; that time limit will go down if there are interventions. I say now that if a Member intervenes, they will not catch my eye to be called to make a speech.

[Stephen Kerr]

I give way to the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil).

[Angus Brendan MacNeil]

I am grateful to the hon. Gentleman for giving way. As he might know, we have a problem on the west coast of Scotland, because we need fishermen from non-European economic area countries. Westminster is stopping that, in contrast to Switzerland, for example, where half the visas are controlled by Bern and the other half by the 26 cantons. Does he not think that it is time for Westminster to loosen its iron grip and allow fishing boats on the west of Scotland, and indeed in Northern Ireland, to fish?

[Stephen Kerr]

I do not necessarily recognise the nature of the problem that the hon. Gentleman is describing and I will come on to talk about the relationship that should exist between the Parliaments of this island.

As I was saying, Edinburgh is not the end of the road; Holyrood should just be the beginning. Politics, indeed, should be local. However, that is not Scotland’s story, nor has it been for the last 20 years of our Scottish Parliament. Instead of treating devolution as a process of bringing power to the people, first the Scottish Executive and then the Scottish Government have consolidated power in their offices in Edinburgh.

There has been a power grab in Scotland, sucking power from communities and taking power from the many into the hands of the few. Decisions taken around the Cabinet table in Bute House are remote and removed from the daily lives of the people of Scotland. They often run roughshod over the views of the public, and are apparently unheeding to and uncaring about the difficulties that communities face.

I am, however, full of hope that that situation can be addressed by the simple adoption of the principles of devolution by the Scottish Nationalist Government in Edinburgh. Since the passage of the Scotland Act 2016, we now have a powerhouse Parliament. It should not be forgotten that it was a Conservative Government who delivered those powers, in fulfilment of the vow made by David Cameron and, as Scottish Conservatives, we are proud to have done that. It is David Cameron’s proud legacy. Powers over equalities, gaming machines, income tax, railway policing, welfare, quarrying, air passenger duty, consumer advocacy and advice, the Crown Estate, elections and employment programmes—all these are in addition to the powers of general competence that the Scottish Government already enjoy, and there are more powers on their way.

The powers at the disposal of the Scottish Parliament have the potential to make a real difference to the lives of the people of Scotland. The Scottish Parliament can develop the economy, create specific help for people who need welfare and choose to vary taxation. I am by no means a fan of the idea of raising taxes, but I believe that services must be paid for and it should be for local councils and the Scottish Government to set an appropriate level of tax to pay for those services. With all those powers and the ability to tax and borrow more than ever before, the Scottish Parliament is well placed to get to work to solve our country’s problems and to work for Scotland’s betterment. What a shame that we still have so much confusion and grievance being shown.

Let me give an example of that. One of the Members of the Scottish Parliament made a statement just last month calling on Westminster to do something about the number of fixed odds betting machines, with the grievance about the lack of power hanging in the air, but of course that power was devolved in May 2016. It is possible that that statement was a simple mistake brought about by the confusing nature of the legislation, but it also misled members of the public about who is responsible. Instead of using such an important issue as a political ping-pong ball batted over Hadrian’s Wall, would it not be better if we approached such issues as a way of creating partnerships between different levels of Government, in order to achieve something?

--- Later in debate ---

[Stephen Kerr]

I am closing. With an approach that respects the motives of politicians from all along the political spectrum and from different levels of government, the people of Scotland would be better served. Our Scottish Government—

[Angus Brendan MacNeil]

Will the hon. Gentleman give way?

[Stephen Kerr]

I am going to close. Our Scottish Government have a wide range of powers that they can use for the good of Scotland—more powers delivered by a Conservative Government. Devolution, however, should be a process and the Scottish people are best served when decisions are made closest to where they live. We must push for more power to be delivered to town halls across Scotland. Clarity over where power sits and honesty about that is essential. Politicians should be problem solvers, working across government levels to achieve for their constituents, rather than throwing their hands up in the air and decrying their lack of power.

Throughout all this is my fundamental belief that by working together we can achieve so much more for Scotland. We need to stop arguing—[Interruption.] Sorry, I correct myself: we need to keep arguing—[Laughter]—about policy and ideas. That is part of our nature as Scots. If we get away from the grievances and use the powers of devolution, we can all be winners. That is the promise of the use of power by government, whether local, devolved or national. Scotland is a land with two Parliaments, but it is one land and it deserves to be governed not in conflict but in partnership.

--- Later in debate ---

[Kirstene Hair (Angus) (Con)]

I am grateful to my hon. Friend the Member for Stirling (Stephen Kerr) for bringing this incredibly important debate to Westminster Hall, and to you, Mr Hollobone, for kindly allowing me to speak.

In my constituency of Angus, one of the biggest challenges is delivering effective and efficient healthcare in such a rural community. While the Scottish Parliament should in theory have the ability to better understand local needs, with this SNP Government, that unfortunately applies only to the central belt. For example, in my home town of Brechin—part of it falls into the 20% most deprived areas in Scotland—the health centre was staffed by six full-time GPs back in 2007. After 10 years of an SNP Government, that service has halved. In addition to the difficulty now faced by residents in simply securing a GP appointment—never mind continuity with the same GP—other services that should be delivered locally to reduce demand on Dundee’s A&E department are being withdrawn or reviewed with no guarantees about their replacement.

[Angus Brendan MacNeil]

Will the hon. Lady give way?

[Kirstene Hair]

No, I am going to make some progress. Speaking on behalf of my constituents, I say quite simply that we are fed up of being hoodwinked by this SNP Government. They should stop pulling the wool over our eyes. We deserve honesty, clarity and an open dialogue on such vital services—not back-room discussions that the service users have no ability to influence effectively. As a result of the fall in the number of doctors, out-of-hours care services that should be delivered in the community have all but disappeared. Rural residents are being forced to travel up to 40 miles to Dundee or wait until the daytime services re-open.

It is not just general practice that has been badly hit by the SNP’s mismanagement of Scotland’s NHS; every aspect of healthcare is being threatened by a Government set on centralisation. Whether it is the sham consultation on the Mulberry mental health unit—the SNP MSP who claims to be fighting the case refused to turn up to the regional NHS meeting where that exact issue was at the top of the agenda—or whether it is the closure of Brechin Infirmary—

--- Later in debate ---

[Martin Whitfield (East Lothian) (Lab)]

Thank you, Mr Hollobone. I thank the hon. Member for Stirling (Stephen Kerr) for securing this debate. To have power and not use it is a crime. For a Government to have power and to let it lie in abeyance for so long is to mistrust and ill-serve the people who voted for them.

[Angus Brendan MacNeil]

Power unused is the approach of the Labour party in Scotland, which sent billions of pounds back to Westminster. They had money, and they did not use it for the good of Scotland. They handed it back.

[Martin Whitfield]

I hear the hon. Gentleman’s intervention, and I thank him for the extra time. Devolution under the Scotland Act 1998 created the Parliament that sat on 12 May 1999. The first Act passed was the Mental Health (Public Safety and Appeals) (Scotland) Act 1999, and it is interesting that we still talk about the need and desires for mental health services to this day.

From the formation of the Scottish Parliament we are now in a position where in a recent poll, 19% of people in Scotland seemed to indicate that they want devolved powers returned to Westminster. That is an appalling state of affairs. After this length of time, instead of an increasing number finding confidence and security in our Parliament in Scotland, one fifth of the population wants to go back to what they had.

I want to look at the powers in relation to one industry that concerns my constituency greatly, which is timber. Businesses north of the border can draw down from the apprenticeship levy if and only if they have an approved training provider. Businesses south of the border can draw down for the individual apprentices they have. In my constituency, we have a forestry business that can produce 10 million trees a year, but the number of apprentices within the industry is so small that there is no provider, so the businesses cannot draw down on the levy and they get no financial support.

Other industries in my constituency have apprenticeships that cross the border. The nuclear power station wants to send its apprentices around the whole fleet, and that causes problems, because it can draw down on the apprenticeship levy south of the border, but not north of the border. This debate is very timely, and the discussion needs to be across the border so as to facilitate the best interests of those in Scotland and of the United Kingdom and its economy across the board. Maybe it is time we stop screaming and shouting at each other and sit down and talk and act in the best interests of both Scotland and the United Kingdom.

Public Sector Pay Cap

Angus Brendan MacNeil Excerpts

Wednesday 5th July 2017 Commons Chamber

[Elizabeth Truss]

My hon. Friend is right and I congratulate him on the role he had in that policy. We are raising wages for those on the lowest incomes and taking more people out of tax. Basic rate taxpayers have seen a £1,000 reduction in their tax bill. That is important in dealing with the cost of living and in making sure that it always pays for people to go into work.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

In a very readable book, “Austerity: The History of a Dangerous Idea”, Professor Mark Blyth charts the fact that austerity always fails, either at the ballot box or with people waking up to the failing nonsense that is austerity. If the Government instead concentrated on growth, the deficit would take care of itself. Is it not time that public sector workers, who pay taxes, are given the money to spend in the economy and create that growth?

[Elizabeth Truss]

I understand that the hon. Gentleman’s party voted to support our pay policy earlier this year.

Economy and Jobs

Angus Brendan MacNeil Excerpts

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

No, I do not agree with that. I think it is perfectly clear that it should be possible to negotiate an agreement with the European Union that provides for mutual, reciprocal access to each other’s marketplaces, and for frictionless arrangements for goods crossing the borders. That would not be membership of the single market or membership of the customs union, for all sorts of legal reasons, but it could have, to a very large extent, the same effect over a transitional period. I think that that is possible to achieve.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

rose—

[Jeremy Quin (Horsham) (Con)]

rose—

[Mr Hammond]

I will give way one more time, to the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil)—and then I will give way to a couple of my hon. Friends.

[Angus Brendan MacNeil]

I am grateful to the Prime—to the Chancellor. In fact, he is indeed a probable future Prime Minister, given that his is one of the serious voices in the current Cabinet. If his wish does not come true in relation to the single market, when does he think the UK Government will U-turn on the issue? Economic gravity is going to take the UK Government in that direction, whether they like it or not at the moment.

[Mr Hammond]

I have just explained to the House—and I am sure that the hon. Gentleman heard—that it would not be legally possible for us to leave the EU and stay in the single market. It is simply not an option.

--- Later in debate ---

[Angus Brendan MacNeil]

Will my hon. Friend give way?

[Neil Gray]

I will give way one last time.

[Mr Speaker]

There is a considerable shortage of time, so the intervention must be brief.

[Angus Brendan MacNeil]

Perhaps my hon. Friend will remember the years past when people here used to deride Iceland and Ireland, post-crash. They are very quiet now, when those countries have three to four times the growth of this country. Of course, Iceland and Ireland did not choose the mega-austerity cult that the Tories here at Westminster have chosen.

[Neil Gray]

My hon. Friend makes a fair point.

Far greater priority needs to be given to committing public funds to good quality social housing, just as the Scottish Government have done. I want us to be able to go even further than their commitments for this Parliament, and that requires political will here too. This decade has been the worst for wage growth, according to the Resolution Foundation, and we need to stop the rot. We also need to move away from the idea that the social security system is a burden to society: it is a safety net for all of us. When we move the political narrative in these areas, we will finally be in a position to tackle the social exclusion and inequalities that cost us all, socially and economically. That is my aim in this Parliament.

House of Lords Reform and Size of the House of Commons

Angus Brendan MacNeil Excerpts

Wednesday 19th October 2016 Commons Chamber

[Pete Wishart]

If anything, that sounds like a manifesto from the right hon. Gentleman to get himself a good place in the House of Lords, and I wish him all the best in that ambition.

I am grateful to the right hon. Member for Delyn (Mr Hanson) for mentioning the hereditaries, because that brings me on to my next point. Although the new appointees are bad enough, there are some other cracking undemocratic horrors skulking in the corridors down the road. They are the aristocrats, the 91 Members of Parliament who have the opportunity to design, fashion, shape, issue and supervise our laws because of birthright—because they are the first son of a family that won a decisive battle in the middle ages. The one thing I do like about the hereditaries is that they bring an element of democracy to the House of Lords—did Members know that? It is the surreal and bizarre contest that they have when one of their number dies. The earls, the counts, the barons, the lords and the ladies of the land get together to replenish their numbers. It is the weirdest electorate in the world. It may be the poshest and most exclusive electorate that can be found anywhere, but at least there is that element of democracy in the House of Lords.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Among the posh selectors was a group of three Liberal life peers who chose one of their number. On the point about bringing democracy to the Lords, would not a small improvement be a ballot of the life peers, so that we at least have a natural way of getting rid of some of them while perhaps injecting some democracy into their veins, despite them not liking it?

[Pete Wishart]

Only land-locked Lesotho has elders as a feature of its democracy. This is the mother of all parliaments for goodness’ sake, and we still have people here because of birthright! It is absurd.

--- Later in debate ---

[Pete Wishart]

Of course there is a national mood in favour of such a cut. If we were to ask any member of the public whether they would like to see the size of Parliament and Government reduced—I am sure I will find this when I go back to my constituency at the weekend—they would say, “Yes, of course.” My point, and I believe that the hon. Gentleman might respect this, is that we seem to be reducing the number of elected Members but letting the other place grow exponentially. That is the key point. I am beginning to get the sense that the public are starting to look at what we have got down the corridor and deciding that we have to do this. Enough is enough.

[Mr MacNeil]

My hon. Friend has mentioned that there are 61 peers from Scotland but the number of MPs is going down. Is that not simply more grist to the mill and another reason why people will, this time, vote for independence in the second referendum that will come within two years of the triggering of article 50?

[Mr Speaker]

Order. The hon. Member for Perth and North Perthshire (Pete Wishart) has been generous to a fault in giving way, and I think that that is appreciated by the House. May I very gently make the point that 11 Back-Bench Members wish to contribute, and the Chair will be looking to call the Front-Bench wind-ups at approximately 6.40 pm? There will have to be a very tight time limit on Back-Bench contributions, a fact of which I know the hon. Gentleman will wish to take account in the continuation and conclusion of his eloquent contribution.

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[The Deputy Leader of the House of Commons (Michael Ellis)]

It is a pleasure to open for Her Majesty’s Government in this debate, and a particular pleasure to debate with the hon. Member for Perth and North Perthshire (Pete Wishart), if saying so is not too deferential for him.

I am grateful for the opportunity to debate this important subject. It is vital that our Parliament works effectively, and the House of Lords plays an important role in scrutinising and revising the legislation that governs us all. If I may say so, I think that the hon. Gentleman does a disservice to Members of the House of Lords who work very hard and are very valuable public servants. In many cases, they have been public servants for decades and devoted their lives to public service. In that House, there are leaders of industry and business who bring to it incredibly valuable expertise. There are Law Lords—formerly Lords of Appeal in Ordinary—as well as former Cabinet Ministers and Chiefs of the Defence Staff, so there is vast experience and expertise that is not available in this House or in many second Chambers in bicameral legislatures around the world. That House is replete with considerable expertise and experience.

[Mr MacNeil]

One of two things follow from what the Deputy Leader of the House has said. He is saying either that it is such a good arrangement down the corridor that we should abolish the Commons and repeat that arrangement in this place, or that other countries in the world should follow the same arrangement, in which case which ones would he advise to do so?

[Michael Ellis]

I think that the hon. Gentleman knows that this country has centuries of history, and we should recognise that our system has evolved over those centuries. That does not alter the fact that the House of Lords has vastly experienced people from all fields of life—doctors, lawyers and the like—but we recognise, as was clear from the Conservative party manifesto last year, that it cannot continue to grow indefinitely.

We must keep the question of the size of the House of Lords in perspective. Members of the Lords are not full-time or salaried. Many peers balance professional lives outside the House with work in it, so they do not attend all the time. It is a mischaracterisation to portray it as though 800 Members were permanently in the House. In fact, when one looks at the average daily attendance in the last session—I invite hon. Members to do so—we see that it is below 500. The figure is 497, which is well short of the number of Members of the House of Commons. To use a journalistic phrase, 800 is the figure for the available talent.

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[Michael Ellis]

I need to make some progress. There are a number of people who wish to speak and I have given way several times.

The reforms have already been delayed once by the Opposition parties and it is vital that they are not waylaid again by mixing them up with a discussion about reform of the House of Lords.

[Mr MacNeil]

The Minister says it is not a priority to deal with the House of Lords in this Parliament and that there are other issues. If he has other important issues—I can say this with authority, because my constituency is not affected—why is it so important to deal with the House of Commons? He wants a situation with fewer democratically elected parliamentarians, while he stuffs the other place. That does not ring true. We know full well that it is an attack on the Labour party, an attack on Scotland and an attack on Wales. That is the long and the short of it, and he might as well be honest about that.

[Michael Ellis]

There is a public demand for value for money and to reduce the cost of politics. In all areas of public life, savings have been made so that we live within our means. It is right that this House should find savings, too. By reducing the number of MPs, we will save up to £66 million over the course of a Parliament.

--- Later in debate ---

[Tommy Sheppard]

I want to come on to that. A frequent argument for a revising or upper Chamber is the inadequacy of the first Chamber, and I want to look at some of the imperfections of this House. To start with, we may be elected and accountable, but we can in no way be described as democratically representative of the population who elected us. A system that results in a majority Government with 37% of the vote can never be described as such. Our system is also much more centralised than that of any comparable country. We in Scotland have been on a home rule journey, which we are anxious to speed up, but I actually feel for colleagues in England, who represent the bulk of the United Kingdom, about the absence of any meaningful regional or democratic local government beneath this level. If we actually looked at the matrix of governance underneath this place, we could relieve many of the pressures on this House.

Our procedures for policy review and scrutiny are not fit for purpose. This adversarial system—two sword lengths apart—often militates against a consensual or at least a majoritarian approach to developing public policy, which is why mistakes in this place often have to be rectified somewhere else. However, that is not an argument for the House of Lords; it is an argument for improving the procedures of the House of Commons. The truth is that we need to consider our legislature as a whole and bring in major reforms to both Houses of Parliament. If we do not do that, our system of governance will fall further into disrepute.

[Mr MacNeil]

rose—

[Tommy Sheppard]

I cannot give way because of the time. To say that the House of Lords is justified because it compensates for the inadequacy of the House of Commons is completely wrong. In fact, it exacerbates many of those inadequacies.

Turning to the imperfections of the House of Lords, that it is unelected is taken as given, but it is also profoundly unrepresentative for an appointed chamber. It is old, male and almost half of its Members are domiciled in the south-east of England. In no way does that even attempt to recognise our country. It is also very big—my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) noted that it is second only to the legislature of the People’s Republic of China—and very costly, with each peer costing an average of £120,000 a year and its operation costing almost £100 million. If the Government are serious about reducing the cost of government, I suggest that they look first at what is happening along the corridor.

It is time to begin the process of change. We should be looking at having an elected second Chamber. Indeed, that pledge was in the Conservative manifesto, so it has ceased to be an argument of principle; it is one of priorities and the timing being right. The time is absolutely right to begin the process of considering change and I recommend that this House do so.

Charter for Budget Responsibility

Angus Brendan MacNeil Excerpts

Wednesday 20th July 2016 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move,

That this House calls on the Government to withdraw the Charter for Budget Responsibility: Autumn 2015 update, which was laid before this House on 12 October 2015, and to lay before the House at the earliest opportunity an alternative update which provides the basis for stabilising the UK economy and providing long-term investment for growth.

I see that the Chancellor has not joined us today. I was hoping he was going to improve on the record of his predecessor for attendance, but it is good to see the Chief Secretary on every occasion.

What the leave vote said to many was that a new economic approach is needed. Too many of our country’s places and people feel they have been left behind, and this Government’s current fiscal rules are clearly exposed as inappropriate for an economy facing this kind of shock. So we need a new framework for fiscal policy that will support the investment this country desperately needs, yet all of us have been left without any clarity from the Government over their future direction. Business groups today report they are increasingly concerned about the Government’s current lack of direction and their lack of interaction with the Government. The lack of a clear plan is already harming investment.

The Prime Minister indicated in her initial speech that she was looking to set a new direction for Government economic policy. We agree that a change of course is needed, including more investment and an industrial strategy.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Gentleman is hinting at what we hope will be a change of direction for the Government. For far too long, the Government have concentrated more on achieving a balanced budget than on managing the economy. They have not been creating demand. They should have been listening to the likes of Paul Krugman, Joseph Stiglitz and Richard Murphy, all of whom have been giving the Government a map to follow for years. The fact that they have failed to follow it explains why we are in this situation today.

[John McDonnell]

I will come on to the way in which the fiscal rule implementation has harmed the economy and prevented economic growth, resulting in the slowest recovery from recession in our history, but I shall now press on. I listened—

--- Later in debate ---

[John McDonnell]

I am sure that those on the Treasury Bench were listening to that. The Chancellor has a long list of issues that he needs to address to give some certainty, certainly if we are to see long-term investment in such things. I share my hon. Friend’s views: there is too much uncertainty with regard to a whole range of taxation and support initiatives from the Government. To be frank, it is jeopardising jobs as well as the future of our planet.

[Mr MacNeil]

We have been hearing this refrain that Britain is not on hold and that things are happening, but they are not. Britain is very much on hold. It is actually worse than that, as we see if we look at our neighbours. The hon. Gentleman might remember how, a number of years ago, this House mocked both Iceland and Ireland. It does not say much about them now when Ireland has treble the growth of the United Kingdom and Iceland double the growth. On a recent visit to the Central Bank of Iceland, I was told that the economy had grown so fast that it needed to be slowed down, and that it needed migrants to fill its jobs. These are economies that were once mocked in the United Kingdom and that are now very much laughing quietly to themselves as they speed into the sunset.

[John McDonnell]

I think the argument is sound. Until we obtain a fiscal rule that reflects the reality of our economy and our future, we will not return to the dynamism that is needed to restore growth and to ensure that we have wages and jobs that are beneficial to the community overall rather than the low paid and insecure work that we have at the moment.

Let me press on, because I do not want to strain your patience, Madam Deputy Speaker. It is not just Members on these Benches who believe that the fiscal rules adopted by the Government are not fit for purpose. The former Secretary of State for Work and Pensions, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), called for a £100 billion infrastructure fund to invest in schools and housing. The Secretary of State for Communities and Local Government called for tax cuts across the board and spoke about a Growing Britain fund, funded by more borrowing. The new Prime Minister repeated today the need to abandon the surplus target—perhaps to let it slip. The Secretary of State for Environment, Food and Rural Affairs spoke about the need for “prosperity, not austerity”. We welcome all those conversions to our line of argument, but none of this can be achieved within the confines of the charter as it now stands until the Office for Budget Responsibility advises otherwise.

We saw the consequences of the policies based on the old fiscal framework yesterday in a report from the independent Institute for Fiscal Studies. Let me just remind Members what the report said: the incomes of young people are still 7% below where they were before the financial crisis, and the incomes of those in their 30s, 40s and 50s have remained stagnant. Andy Haldane, the chief economist at the Bank of England, has spoken about a “lost decade” for earnings. McKinsey reports that four fifths of households have seen either no improvement or falling earnings. That is what we have to show for the year of fiscal rules from the former Chancellor. There is a consensus now across the country, from the TUC to the CBI, that investment is needed. Earlier this year the IMF told the Government that it had no objections on the grounds of fiscal responsibility to the Government undertaking more investment. The OECD agrees, but until the OBR gives permission to suspend the surplus rule, the Chancellor is constrained by his own rules.

The Government’s current plans for public sector net investment for the rest of this Parliament are for it to fall in each year, from £36.4 billion this year to £32.1 billion in 2019-20. Of course, we do not expect a full Budget now, but the least we need is a commitment to recognise the changed times that we are living in. The uncertainty about public investment comes on top of uncertainty about the structural funds for regions—which are set to lose up to £10 billion if we leave the EU—and further uncertainty for those reliant on projects funded by the European Investment Bank. I repeat that it is essential that, as a minimum, there is a guarantee from the Government soon to protect these funds in some form on an equivalent level.

There is an alternative; there has always been an alternative. Members of the Government Front-Bench team now see it, in part. Opposition Members have said so for some time. There is an alternative based upon investing in the future, growing the economy and allowing fiscal policy to work hand in hand with monetary policy. Professor Mariana Mazzucato has argued for the need for long-term, patient investment. We support that. It is true that the sale of ARM Holdings to SoftBank indicates that there is potential for new industries and innovation, but that potential needs long-term financing, which includes Government investment in infrastructure and research.

After the leave vote, more forecasters have cut their growth forecast. The IMF has joined them. Yesterday it revised down its prognosis for next year from 2.1% to 0.8%. With the current account deficit having hit record highs in the past year—in the most recent figures, it stands at 6.5%—our plan for the future cannot just be to fund that indefinitely with more overseas sales, such as that of ARM. We hope that the Chancellor will heed those who are calling for a much needed and eminently affordable change of direction.

It is a tragedy for this country that the Conservatives have only noticed that there is an alternative as a result of the leave vote, which I fear they helped to bring about. I announced on Monday that the Labour party supports a large programme of investment and will support the Government in a large programme of investment.

UK Economy

Angus Brendan MacNeil Excerpts

Wednesday 29th June 2016 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I—[Interruption.] Scottish National party Members should calm down.

I beg to move,

That this House recognises the risks posed to the UK economy following the decision to leave the European Union; notes with concern the loss of the UK’s triple A credit rating, the potential output cut, potential job losses, risks to investment and the volatility in the equity and currency markets; and calls on the Government to bring forward measures to protect jobs and support businesses in the nations and regions in relation to the short, medium and long-term potential consequences of the referendum decision, and to address the current threats to community cohesion.

Let me welcome the Chancellor’s presence in the Chamber. I have been critical of his non-attendance of recent debates. I have to say that this was one day on which I thought he might be too busy elsewhere, but I welcome him to the debate. I also commend his Financial Secretary who, in excruciating pain from a bad back, has dealt competently and courteously with the Finance Bill over the last few days. In our roles, sometimes we all have to watch our backs.

Although this is an Opposition day debate, this is, frankly, no time for partisanship and party political game playing when the country faces such serious challenges. I suggest that the tone of this debate should be one of honest critique, but constructive engagement. Yes, we have to be honest about our assessment of the economy, but we also have to be constructive in our questioning and our proposals for the future. The country will expect us all to work together—not uncritically but co-operatively in times of unprecedented political and economic turmoil.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Gentleman talks about doing things critically and uncritically. One criticism I have—it seems to me to be a fact—is that before the referendum, the Chancellor promised an emergency Budget, but he seems to have been bluffing on that, because there is not going to be an emergency Budget. He had already bluffed once, because I think he bluffed about the pound in Scotland. How would the hon. Gentleman respond to that?

[John McDonnell]

To be frank, we need to move on now. I expressed my concerns about some of the over-exaggerated claims at the beginning of the campaign that turned people off. We now know, however, that many of the claims made on both sides are unfortunately coming true.

The leave vote in last week’s referendum has left us all with an immense series of tasks, and the economic situation is a major challenge for us all. Let me run through some of the headline items that we know about over these last few days: the UK’s triple A credit rating has been lost; the pound fell to a 31-year low; sterling markets have been in turmoil, as have stock markets here and abroad; the FTSE 100 index registered the biggest single-day fall since the bankruptcy of Lehman Brothers in 2008; employers, most notably in the financial services, are already looking to relocate jobs, with a quarter of all those employers saying that they have introduced a hiring freeze; and shares in UK banks have fallen dramatically. These are not comments, but realities, and this is just an outline of the situation that now obtains.