Commercial Financial Dispute Resolution Platform
Callum McCaig Excerpts(8 years ago)
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Callum McCaig (Aberdeen South) (SNP)
I congratulate my hon. Friend the Member for East Lothian (George Kerevan) on his choice of tie and on securing this debate—we are wearing remarkably similar ties today, although I am not sure whether that says more about him or me.
This is a really important debate, and there are two aspects to it. First there is looking back at some of the truly appalling practices carried out on behalf of banks, and secondly there is the forward-looking aspect of making sure that these mistakes are never repeated. I do not believe that the solutions that have been put forward will do that adequately.
Banking is clearly a cornerstone of our economy. The central role that it plays has been built on trust—businesses’ trust that their bank will deal with them responsibly, but also that the Government and the financial system will protect them if that relationship, for whatever reason, breaks down. That system may work for a large conglomerate—a major employer with the ability to go toe to toe with the banks in terms of litigation, affording lawyers and so on. However, for small or medium-sized enterprises, that relationship is skewed, and they stand to lose out because they cannot meet the might of the banks.
Let me just put that into perspective. I am sure that these numbers will not come as a surprise to anyone, but small and medium-sized enterprises account for 47% of turnover and 60% of employment in the private sector. That is a huge part of our economy, and one we must all be cognisant of, and we must provide the protection it requires.
How do we go about rebuilding the trust that has been lost? We have heard that the problem stretches across the length and breadth of the country and that different banks and sectors have been affected by malpractice. Will ad hoc arrangements address the problem? I do not believe they will, because the problem is not ad hoc; in large part, it is systemic, and we do not solve systemic problems with ad hoc fixes.
There is a temptation in this place, and in all walks of life, to find the simplest solution possible. In this case, that will not cut the mustard; we need to find a proper solution, and my hon. Friend’s suggestion of a commercial financial dispute resolution platform, whether that is a tribunal or something else, is a key part of doing that.
Like other hon. Members, I have constituents who have had issues in this respect, particularly with RBS and its Global Restructuring Group. While I have been sitting in the Chamber, a constituent—I do not feel comfortable naming them, and they have asked me not to—has messaged me about this. He said that, in the dealings his lawyer has had with RBS, the bank’s lawyers have said that these things are water off a duck’s back and that a bit of bad publicity now will not change how it operates. If that is the case, it suggests that, even when we have ad hoc solutions in place, they do not solve the ad hoc problems. That adds to the compulsion on us to find that systemic solution.
Hannah Bardell (Livingston) (SNP)
Perhaps I could name one of my constituents, Archie Meikle, of Ashwood Homes, who has given me permission to do so. I have fought on his behalf for over six months, and we have been waiting for responses from RBS after he was forced into the GRG. Does my hon. Friend agree that the only way we can solve these problems and grow our economy is by making sure that our businesses are protected from programmes such as these, which are being pursued by the banks?
Callum McCaig
Unsurprisingly, I agree wholeheartedly. The importance of economic growth is tied into this. There are individual consequences to issues like these, but there are also whole-system economic problems that come from them.
Aberdeen is going through a difficult economic time as we speak, although I think we are beginning to see green shoots of recovery. However, we have not seen the problems associated with the previous financial downturn, and we may be in a beneficial situation. However, there is no systemic solution, and just because we do not have a problem now, that does not mean that there will not be problems in the future. The economic problem in Aberdeen has been particularly localised, but if it were to be repeated on a national level, the mistakes of the past could well creep back in. As the UK moves towards leaving the European Union, there is the risk of greater pressure on our financial and business systems, and the temptation may come back for banks to use the opportunity to make money on the backs of others. It is therefore incredibly pressing that we get this right.
The benefits of this proposal would be manifold. Rather than huge crises that we need to solve, we would have early intervention, and we would have parity between banks and companies, so that they could identify and solve problems early, without the need for massive recompense, as has been the case.
We have heard from many hon. Members today that it is very difficult to put a figure on the cost to business. It is even more difficult to calculate the cost to the economy of lost growth as a result of these problems. But let us come back to the human cost, which a number of Members have mentioned: the hours of grief, the hours of anguish and, in certain cases, as the hon. Member for Edinburgh West (Michelle Thomson) mentioned, the lives that have been lost. That is the problem, and we can do something about it: we can protect our businesses. We can ensure best practice, and above all, we can ensure that the mistakes of the past are never repeated.
Finance Bill
Callum McCaig Excerpts(8 years, 3 months ago)
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Callum McCaig (Aberdeen South) (SNP)
One of the things to support the oil and gas industry that the Government have talked about is offering loan guarantees to companies experiencing financial stress. Will the Minister tell the House how that process is going and how many companies have received loan guarantees?
Jane Ellison
That issue was explored in some detail in Committee, so I will not respond on it now.
I want to make the important point that the changes introduced by the Finance Bill will provide the right conditions to maximise the economic recovery of the UK’s oil and gas resources by lowering sector-specific tax rates, updating the current system of allowances and expanding the types of activity that can generate financial relief. Another important point often stated—indeed, it has been made by many people who work in the sector and by investors in it—is that stability and certainty in the tax regime are major factors in making investment decisions. For that reason, we do not think it is right to have another review. Such a review could create further uncertainty at a time when it is not right for the industry, and it could delay investment. I therefore urge Members to reject new clause 5.
UK Economy
Callum McCaig Excerpts(8 years, 5 months ago)
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Stewart Hosie
No, I will not give way at the moment.
I was pointing out that the fall in the pound was twice that in 1992. By Monday the 27th, it fell another 2%, to $1.32—a three-decade low. [Interruption.] There are mutterings from people who want everything to be fine. We have had a near three decade low in the pound because of the actions taken by the Brexit campaign, which failed to have a plan to deal with this eventuality—that is the crux of the matter. The value of the pound against the euro fell almost 6% on Friday the 24th, and it fell again on Monday the 27th.
Most alarming, given the stock placed on it, was that the UK lost its triple A credit rating from Standard & Poor’s following the Brexit vote. Standard & Poor’s said the referendum result could lead to a
“deterioration of the UK’s economic performance, including its large financial services sector”.
It was the first time that Standard & Poor’s had downgraded a triple A-rated sovereign by two notches in one go. On Friday the 24th, Moody’s cut the credit outlook from stable to negative, saying the result could lead to a prolonged period of uncertainty. By changing its outlook to negative, it has warned that the UK’s Aa1 rating is also at risk of being lowered, and with that, obviously, comes the risk of higher borrowing costs.
And that is before we get to the real world and job security. The Institute of Directors surveyed 1,000 of its members. It found that a quarter plan to freeze recruitment. Two thirds said the vote was negative for their business. The BBC has reported that HSBC plans to move up to 1,000 staff who process payments in euros from London to Paris. Others are deeply concerned about the loss of passporting arrangements, which mean that firms do not have to have different authorisations for individuals in individual countries. These are very real concerns, but they are being whitewashed and brushed over by those who are desperate to leave, because of the absence of a plan to deal with issues that should have been considered in advance.
Callum McCaig (Aberdeen South) (SNP)
The leaders of the Brexit campaign are conspicuous by their absence from this Chamber, which is perhaps not a surprise, given the embarrassment they face. One of those leading voices—the Minister of State for Energy—said the volatility we are seeing is not unusual. Does it not just underline the complete economic illiteracy of their case that they think these unprecedented changes are not unusual?
Stewart Hosie
If the pound falls by twice as much as its record fall ever, I suppose that no one sensible should describe that as minor, normal or run of the mill. My hon. Friend is absolutely right.
With regard to the indices, it is true, as I said, that the FTSE 100 has pretty much bounced back to its pre-referendum level, as of earlier today. The FTSE 250 is not yet back to the position it was in on Monday 27 June. The pound versus dollar is unchanged since its collapse and is bouncing along the bottom. The pound versus the euro is unchanged since the fall and is bouncing along the bottom. The real concern—
Stephen Gethins (North East Fife) (SNP)
May I, too, thank the Labour party for giving us the opportunity to debate this matter? The European referendum result has been debated by the European Parliament, the Welsh Assembly and the Scottish Parliament, so it was high time we had the opportunity to do so, notwithstanding the time the Prime Minister has given us in his statement. As always, it is a privilege to follow my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), as well as my hon. Friend—and neighbour—the Member for Kirkcaldy and Cowdenbeath (Roger Mullin).
The decision that has been made will have a huge impact on Scotland. My hon. Friend the Member for Kirkcaldy and Cowdenbeath mentioned research. In my constituency, I have the University of St Andrews, which has argued that for every £1 of Scottish Funding Council grant it receives, it returns £12 pounds to our economy. To turn that on its head, for every £1 that St Andrews loses, Scotland will lose £12. That has a significant impact on the economy locally.
I speak from personal experience, as somebody who benefited from the right to live and work in the European Union, and as somebody who benefited from Erasmus. I know the opportunities that that gave me and the opportunities that young people are now missing out on, and I wonder whether the Government will reflect on the training and educational opportunities that will be lost to not only individuals but the broader economy.
It is worth remembering, on a question of democracy, that Scotland voted overwhelmingly to remain part of the European Union. If we take the electoral regions throughout the United Kingdom, we find that the highest proportion for any side—remain or leave—was the 62% gained in Scotland, with every single local authority area voting remain, including the two that voted not to join back in 1975. That was a phenomenal mark of support for European Union membership, and one that it would be ill-advised to ignore.
On the point about democracy—I made this point to the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) earlier, but it is important—this place will gain powers and responsibilities, and it will have more say over the day-to-day lives of our citizens. So why—I would be delighted if anybody can tell me this—do we maintain the unelected affront to democracy that is the House of Lords when Vote Leave argues on a point of democracy? It is a disgrace.
Given the issue of stability, which is so important for the economy, and the huge uncertainty around Scotland remaining part of the United Kingdom, I am delighted that over the past few days the Scottish Government have shown a huge amount of leadership. I pay tribute to the Scottish Government, who, it would appear, represent the only functioning party of Government left in the United Kingdom. The vacuum that has been left by the Conservative party and the Labour party, which is reflected in this Chamber right now, is doing no credit to this place whatsoever. What is more, just as the people of Scotland are being well served by the Scottish Government, the people of England are being ill served by their two biggest parties. The people of England—who have made their decision, and we respect that—deserve much more than they are receiving at the moment.
Let me say more broadly—my hon. Friend the Member for Kirkcaldy and Cowdenbeath has worked very hard on this—that we have a rich heritage of European citizens who have made their lives and their homes in the United Kingdom. European citizens have made, and continue to make, a huge contribution in my constituency. They enrich our economy, and they enrich our society more broadly as well. I wish that more leading politicians had said what the First Minister of Scotland said:
“I want to take the opportunity this morning”—
the morning after the referendum—
“to speak directly to citizens of other European countries living in Scotland—you remain welcome here, Scotland is your home and your contribution is valued.”
We all need to repeat that over the coming weeks and months.
Callum McCaig
As other hon. Members have said, there is no impediment against this Government—indeed, this House—making a positive statement about the rights of those EU citizens, whom we value and who make an unbelievable contribution to our communities. That can and should be done. We need to press all those seeking the Tory leadership on this. If they all unite on it before going through the rigmarole of electing a new leader, we can end this uncertainty, which must be unbearable for these people.
Stephen Gethins
My hon. Friend, as usual, makes an excellent point. We should have some commonality of purpose, and a few more people should repeat that, because of the richness that these people bring to our society—the Scots Germans, the Scots Irish, who would include my family many, many years ago—[Interruption.] And the Scots Australians as well. We are a richer country for it. If the leadership contenders, in no matter which part of the House, could make that commitment, it would be valuable to these people, and to us.
Things have changed, and changed utterly. Over the past few days in Scotland, a number of people who voted no in the independence referendum are coming round to the idea of independence—or certainly coming round to the idea of working together to maintain Scotland’s place in the European Union. I give credit to members of the Labour party, the Liberal Democrats and the Green party who are working with the SNP in the Scottish Parliament to maintain Scotland’s place in the European Union. It is interesting that the Scottish Liberal Democrats have now been reported as urging their party to support independence and drop their opposition to it. Henry McLeish, the former Labour First Minister, has said that he is “very, very attracted” to independence and it is a “game changer”.
Outwith domestic politics, internationally and from a European perspective, we are seeing welcome support from people such as Guy Verhofstadt, the former Belgian Prime Minister, who has said:
“it’s wrong that Scotland might be taken out of the EU”
against its will. Manfred Weber, the leader of the European People’s party, has said:
“Europe is open to new member states…Those who want to stay”—
and we are staying—
“are welcome”.
I pay credit to Micheál Martin, who thinks that, as an issue of fairness,
“Ireland ought to be”
our
“friend and demand fair play”.
I welcome all those comments from our European friends and allies.
Historically, and as a matter of fact, Scotland may be on the geographical periphery of Europe, but we sit at Europe’s heart politically, and that is where we want to stay and will stay.
The Economy and Work
Callum McCaig Excerpts(8 years, 6 months ago)
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Mr Osborne
I personally looked closely at this proposal, and it would cost more than £3 billion a year. It is a very expensive tax reduction, only a small proportion of which would go to the steel industry and none of which would go to the steel industry in Wales, where rates are devolved to the Welsh Government. That is why we have not taken that step. We have done other things to reduce business rates for small businesses and changed the uprating of business rates for all firms, including large industrial firms, to the consumer prices index, which will bring a massive saving over many years, but I judged that the hon. Lady’s proposal to help the steel industry was a sledgehammer and that only a small amount would get to the steel industry. It is better to use other forms of direct support for the industry. That is why we took the decision we did in the Budget. We thought there were better ways of helping.
The economic reforms in the Queen’s Speech continue what we are trying to do to improve the productivity growth of the British economy so that Britain, unlike many other advanced western economies, sees its living standards not stall but continue to rise. That is why we have increased expenditure on transport infrastructure, even in straitened times, and many projects, such as Crossrail, are now close to completion. That is why we introduced the apprenticeship levy—to drive up skills—accepting that low skills had been an endemic problem in the British economy for many decades; and that is why, in part, we introduced a national living wage—not just as a measure of social justice but to tackle low pay and drive up productivity in the workforce.
We will not rest there. The Queen’s Speech sets out a raft of other things. Measures in the Finance Bill will continue to make work pay by raising tax thresholds, helping 20 million people with an income tax cut and taking 4 million of the lowest-paid out of tax altogether. We are also making big changes in corporate taxation by closing loopholes, restricting interest relief and preventing the diverting of profits, while reducing rates of business tax to ensure that we remain the most competitive place in the world to do business.
The digital economy Bill will ensure that Britain remains at the forefront of the information revolution and provide the broadband network that is the equivalent of the canals, railways and motorways of the past that previous generations built for us. That is why, as mentioned in the Queen’s Speech, we are introducing the legal right for anyone to request a 10 megabit connection and encouraging more private investment into this vital artery of the modern economy; and why we are making sure that Britain is at the forefront in the revolution in driverless cars.
We are boosting competition with the better markets Bill and putting our new National Infrastructure Commission on a permanent statutory footing, for which people in both political parties have been calling for decades. It will now be one of the permanent fixtures of our country and has already made recommendations, under the excellent leadership of Lord Adonis, to improve transport connections in London, with Crossrail 2; to improve connections in the northern powerhouse and across the Pennines; and to plan for the future of our energy supplies by being able to store energy. All those recommendations, accepted by the Government, are now in the Queen’s Speech. I am also delighted that we have reached an agreement with Sadiq Khan, the Mayor of London, that Andrew Adonis will help develop the Crossrail 2 proposal, which is vital for our capital.
Callum McCaig (Aberdeen South) (SNP)
The Chancellor mentioned energy. Despite the Government’s welcome move on the headline rate of tax, a further 475 jobs, predominantly in Aberdeen, have been lost at Shell. Despite their welcome announcement, it is clear that more needs to be done. Will he engage with us and the industry, through the Finance Bill, to focus particularly on exploration so that we can find and get at the 20 billion barrels of oil that remain in the North sea?
Mr Osborne
I saw the unwelcome news about the Shell job losses. Working with the Scottish Government, we will do everything we can to help the people who have lost their jobs and make sure that this industry, vital to our country, is protected at a time of low global oil prices. That is why we have worked with Aberdeen on the new city deal and to improve the harbour; and that is why, in the Budget, we chose, as the big tax measures in this area, the abolition of petroleum revenue taxation and a halving of the supplementary charge. We are ready and stand willing to help this industry at this difficult time, because it is world class and we want to make sure we get as much oil out of the North sea basin as we can.
We are also addressing, in the Queen’s Speech, other challenges in the British economy, such as the low savings rate, which we have had for many decades. We have reformed pensions and given pensioners access to their pension pots—250,000 pensioners have already made use of that innovation. I can also tell the House that today at our request—we asked it to impose a charge cap on exiting those pensions—the Financial Conduct Authority has announced that there will be just a 1% cap, which is lower than the range it was consulting on.
The Queen’s Speech also contains a proposal for the lifetime ISA that I announced in the Budget, so that young people no longer have to choose between saving for their home and saving for their retirement. In the words of Martin Lewis, the personal finance guru, it is the biggest change in personal savings this country has ever seen.
Oral Answers to Questions
Callum McCaig Excerpts(8 years, 8 months ago)
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Mr Osborne
Our positive vision is that by being part of a reformed EU we can raise living standards, create more jobs and make sure that consumers have access to lower prices. We have set out in the Treasury analysis a range of possibilities for the alternatives that might happen if Britain leaves the European Union. All of them would make Britain permanently poorer, but if my hon. Friend and the leave campaign want to produce their own plan and their own analysis, then be my guest.
Callum McCaig (Aberdeen South) (SNP)
Last week, the Financial Secretary confirmed to me that details obtained from Crown dependencies and overseas territories and shared with the UK would not be passed on to other tax jurisdictions. If that remains the case, there is a real chance that the UK would be complicit in tax evasion. Will the Chancellor urgently review the situation to ensure that tax is paid where it is due?
Tax Avoidance and Evasion
Callum McCaig Excerpts(8 years, 8 months ago)
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Mr Gauke
My hon. Friend is absolutely right to raise that point, and I will address the subject of the public register in a moment. It is considerable progress to have got central registers at all. We have pressed for that, and I am pleased that overseas territories and Crown dependencies have agreed to sign up to it.
Callum McCaig (Aberdeen South) (SNP)
The Prime Minister has stated that the registers that the overseas territories will provide will be available to tax authorities here. However, as this debate has clearly highlighted, this is a global problem, so will those registers be shared with other tax enforcement agencies globally so that they can ensure that tax is not being avoided from other countries?
Mr Gauke
The hon. Gentleman raises an important point, and I think there is scope for going further on it. What we have agreed is to ensure that we have access to those central registers. That is clearly very helpful but I think more progress can be made in that area and it is something to return to in the future.
Panama is one of the very few financial centres that has not yet fully committed to these international standards. We are clear that it should do so, and we continue to press for Panama to join the club of responsible nations. Of course, there is more international work to be done, particularly on tackling money laundering. That is why we are hosting an anti-corruption summit in May, with the aim of encouraging consensus not just on exchanging information, but on publishing such information and putting it into the public domain, as we are doing in the UK. Once again, Britain is leading the world on transparency, accountability and responsibility.
James Cartlidge
There are shouts from Labour Members, because I made that point earlier, but it is worth repeating. I am delighted that my hon. Friend made it, because it is so strong.
Callum McCaig
The hon. Gentleman is exceptionally popular today. The point about the richest 1% paying the largest amount of tax has been baffed about a number of times today as though it is some sign of virtue. It is, in fact, a sign of the gross inequality that exists in the country, which needs to be addressed.
James Cartlidge
It is a sign that the rich are paying more tax. How does that make society more unequal?
Let me talk about the measures that we should be pursuing. Yes, we should be cracking down on aggressive tax avoidance, but if we are to help people across society to have a share, we need measures such as the national living wage, which was introduced on 1 April by a Conservative one nation Government. There are those who say that the national living wage is not generous enough. They have obviously not been reading The Guardian, which recently used The Economist’s Big Mac index to prove that the national living wage is more generous than the minimum wage in any other European country except Luxembourg. Only in Luxembourg can someone buy more burgers with the minimum wage than they can with the national living wage in this country. [Interruption.] The hon. Member for Glasgow South (Stewart Malcolm McDonald) asked what this had to do with tax avoidance. The underlying issue is fairness. It is about how we achieve an economy in which there is a widespread sense that everyone has opportunity and the chance to earn a decent wage.
We are delivering that in circumstances far more adverse than those that faced the Government before 2010. We have had a small majority and the first coalition since the second world war. We have had the biggest deficit since the second world war—11.5% of GDP—which we have cut by two thirds. In that context, it is difficult to grow our way out of such a problem and deliver fairness. [Interruption.] The hon. Member for Glasgow South keeps chuntering, but he is not adding a great deal to the debate.
Finance (No. 2) Bill
Callum McCaig Excerpts(8 years, 8 months ago)
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Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
This Bill follows in the wake of yet another Budget that began to fall apart within a few short hours of the Chancellor’s statement—indeed, perhaps his future statements should be entitled, “Not the Budget”. If the Budget created disarray on the Government Benches, this Bill, with its clamjamfry of unco-ordinated clauses, presages yet more failure and demonstrably fails to address some of the major economic challenges of our time.
I admit that it was a great joy to read all 580 pages of the Finance Bill over the recess, and although I will come to a number of specific issues and technical problems, the Scottish National party has one overriding message for the Government: you cannot build economic success on the back of social injustice. Every social injustice is a hammer blow to economic progress. In recent times, we have seen the ways in which this Government wanted to place further injustice on the shoulders of the disabled, the disadvantaged and the 1950s-born women while at the same time operating an economic system that disproportionately protects and enhances the privileges of the most wealthy in society. Creating such division does not bring progress.
I said in my maiden speech, quoting Adam Smith:
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
Times move on, of course, and reflections on our current predicament can best be summed up by Professor Stiglitz, who said:
“Rather than justice for all, we are evolving into a system of justice for those who can afford it”.
I am confident that hon. Members will be able to rehearse many instances of social injustice created by this Government, so allow me to move on and reflect on an issue that I raised in the House on 3 February this year—namely, the problem of tax evasion, particularly through the use of tax havens in British overseas territories. Little did I know at the time how prescient that debate in February would prove to be.
I have to say how disappointing I found the Prime Minister’s statement earlier today, despite its containing one or two modest proposals that I welcomed. Let us put this into context. According to Jason Hickel of the London School of Economics, tax havens hide one sixth of the world’s total private wealth—in excess of $20 trillion. I have already commented elsewhere that the revelations in the millions of papers that have been released from Mossack Fonseca are but the tip of a gigantic iceberg. Indeed, Panama does not even make it into the top 10 tax havens. Taken together, Britain and her overseas territories are at No. 1, outdoing Switzerland by some margin. Commenting on a single address in the Cayman Islands, Ugland House, President Obama said:
“That’s either the biggest building in the world or the biggest tax scam on record”.
It is not surprising he said that, given that 19,000 businesses are registered at that one address. It is a big hoose, as I said in February.
At least four major issues relating to tax havens need addressing. The first—the subject of much current debate—is the extent to which the makers of laws and the guardians of the wider public interest are themselves benefiting from tax scams. This is an understandable issue of concern, but we fool ourselves if we think that that is the sole or primary issue. It does, however, have regard to openness and transparency. I agree with my right hon. Friend the Member for Moray (Angus Robertson) that it would be a positive and welcome move if Cabinet Members, as well as the Prime Minister, were to choose willingly to open up their tax returns to public view.
The second issue, which deserves more focus, is the avoidance of tax. I deliberately say “avoidance”, because that is of course legal. It strikes me, however, that for the average member of the public, it is not a convincing defence for the type of institutional behaviour that we have witnessed in recent times, including from large multinational corporations, to say, “It is legal”. I am sure that I am not the only new MP to have been subjected to huge lobbying by corporations and other financial bodies. They mobilise vast resources to “help” the Government and they are very successful. They have managed to influence the creation of an international system of finance that enables tax avoidance on a huge scale. Not only that, but they happily operate a system that hides from scrutiny the owners of vast wealth, while the ordinary man in the street has no such luxury.
The third issue, which has surprisingly been the subject of much less scrutiny so far, is the extent of the evasion of disclosure of the source of money itself. There are good reasons to suppose that it is not only corrupt political leaders but drug traffickers, terrorist organisations and other types of criminals who inhabit the shady world of international finance. Sadly, the Panama papers suggest that some legally registered institutions may have colluded in the protection of criminals who stash their cash behind anonymous, untouchable trusts and other financial vehicles. I hope we can take it from the Prime Minister’s statement today and from the Minister’s welcome remarks earlier about making it a criminal offence for some types of such “advice” to be proffered by otherwise legal institutions that we will see considerable progress on this matter.
The fourth issue I wish to raise is where these funds are and how they are set to work for their beneficiaries. As we know, these funds do not actually sit in Panama, the British Virgin Islands or the Cayman Islands. One of their biggest centres is, as we know, London. For example, hundreds of very expensive properties in London have been brought by unknown persons. We need transparency here, too. Some, like my hon. Friend the Member for East Lothian (George Kerevan), have argued that it should be illegal to own property or land in the UK where the beneficiary is unknown—a breathtakingly simple measure to address a cause of great concern.
All this calls for radical reform in each of those four areas, but I am sad to say that neither the Finance Bill nor the Prime Minister’s statement earlier goes nearly far enough to inspire any confidence that the matter will be adequately addressed. It is very disappointing, for example, that the Prime Minister continues to resist calls to do something about trusts. Even if he was right in his interpretation three years ago about how to proceed, this is three years later and public perceptions throughout the world have changed radically. It is time to broaden the scope of action.
The truth is that while this Government, through this Finance Bill, are taking feeble measures to tackle tax evasion, at the same time, in an act of social and economic injustice, they are mounting an attack on small individual contractors who serve rural communities, preventing them from having travel expense relief. These people are not tax dodgers; they are flexible workers, with both private and public clients, who are essential to many rural communities in Scotland. Yet at the same time as these people are attacked, the Government are protecting tax dodgers and millionaire Tory donors by continuing to allow huge loopholes in the system. We must get a commitment to a more open and transparent system that involves all overseas territories, trusts as well as companies, and full and independent scrutiny of the so-called Panama papers.
There is scope in Committee for the Government to be much more ambitious and to present new clauses for debate. They can be assured that it is certainly our intention to do that. Furthermore, the claim that this Finance Bill will adequately address other tax dodges lies in ruins, when we consider its implications for the so-called Mayfair tax loophole. We do not believe the Finance Bill makes anything like sufficient progress in its treatment of so-called carried interest, which is seen by many members of the public as another example of one rule for those with modest means and of huge favours being given to those of considerable wealth and income. Again, this is an area we shall pursue in Committee.
I turn now to wider economic matters. In his 2012 Budget speech, the Chancellor acknowledged Britain’s falling share of world exports and stated that
“we want to double our nation’s exports to £1 trillion this decade.”—[Official Report, 21 March 2012; Vol. 542, c. 797.]
Jings, he can certainly dream can oor George! However, the figures are moving in the wrong direction, and the Chancellor is likely to fall short of his target for £1 trillion in exports by 2020 by at least some £300 billion.
Roger Mullin
Indeed. Failing to meet targets is of course one of the great characteristics of the Chancellor, but to miss it by such a huge margin creates a new category of failure—a right bourach, perhaps. Furthermore, rather than making even modest progress, we find that in the last three months of 2015, the UK had achieved a record-breaking near £33 billion current account deficit.
Part of our declining relative performance speaks to a long-term failure to address adequately the central issue of productivity in our economy. On productivity, this Finance Bill fails to address fundamental concerns. Raising levels of productivity is essential to raising growth in the economy. As my hon. Friend the Member for East Lothian pointed out on 22 March, developed countries with higher levels of growth, including Australia, Sweden, Spain and the United States, to name only some,
“experienced faster…growth than the UK in 2015, largely because they experienced faster productivity growth.”—[Official Report, 22 March 2016; Vol. 607, c. 1412.]
We need productivity growth, too, to enable the cash economy to grow, to enable wage growth and to grow tax receipts.
There are many factors, of course, that affect productivity growth. Some are well known and relatively uncontroversial —areas such as investment in research, development, innovation, and of course, infrastructure. In these areas, the UK lags well behind many of our major competitors. On a number of occasions, I have pointed to the relative decline in investment in R and D compared with our G8 competitors. As things stand, we are bottom of the G8 on R and D spend from both private and public sources, and there has been a reluctance, to put it mildly, to raise infrastructure spend to the necessary levels.
The SNP believes that in order to achieve a sustainable future, R and D expenditure and investment could benefit from a comprehensive, dramatic and territorial review, and that there should be increased planned infrastructure spend beyond the narrow confines of London and the south. As for skills, the subject has already been raised by the hon. Member for—
Budget Resolutions and Economic Situation
Callum McCaig Excerpts(8 years, 9 months ago)
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Callum McCaig (Aberdeen South) (SNP)
It is a pleasure to speak in this Budget debate. After close to a year of asking for action on oil and gas, it would be churlish of me not to welcome what the Chancellor has announced today. However, it is important to take that in context: we have seen significant movement, but essentially we are back to what Oil and Gas UK says is the tax level from 2003.
There is positive movement on the supplementary charge, but to suggest that the tax has been cut in half is a bit of the smoke and mirrors that we are used to. Although it has been cut in half, from 20% to 10%, oil and gas fields will still pay 40%. If we compare that with the announcement of 17% for corporation tax, we see there is a stark contrast.
The effective abolition of petroleum revenue tax is perhaps more welcome. It will affect fewer fields, but by virtue of their age and their important infrastructure, those fields are vital to ensuring the continuing success of the North sea. If they lose out and that infrastructure is decommissioned, the potential domino effect could drastically reduce the profitability of the North sea.
I welcome the proposed manoeuvring of decommissioning allowances, allowing changes between the companies that would and would not have the decommissioning liability. That is fundamental. The Red Book talks about encouraging new entrants into the industry. It is very important for the future of the industry to have new capital, new expertise and, above all, new ideas and new ingenuity coming in and not to be burdened by artificial barriers in relation to decommissioning. What has been announced is very helpful, but in and of itself, it is not enough. This will not be the end of the requests from industry, from trade unions, and from me and the SNP, for further action to support this vital industry.
We have missed out on anything relating to fiscal support for exploration. The support for seismic surveys is welcome, but beyond that more action needs to be taken. There is also nothing in terms of—
Mr Speaker
Order. I am extremely grateful to the hon. Gentleman for his contribution. I think Mr Tommy Sheppard wishes to speak. No?
Tommy Sheppard (Edinburgh East) (SNP)
The clock has not been working, Mr Speaker.
Callum McCaig
I will continue to orate, and I will be as brief as I can to allow my hon. Friend the Member for Edinburgh East (Tommy Sheppard) to get in.
There is nothing on exploration, beyond seismic. There is nothing about removing the fiscal barriers for enhanced oil recovery. The activity of enhanced oil recovery will count as operational expenditure; it does not count towards the tax allowance that can be offset against income. Such a simple fiscal measure would allow these activities to happen to a far greater extent, and then everyone would be a winner.
On the effective tax rebate rate for onshore oil and gas, tax allowances for that sector are 75%, whereas the effective rate for offshore oil and gas is 62.5%. I see no reason why there should be such a difference in the investment allowance. The North sea is a far more harsh environment in which to carry out this kind of exploration activity, and I do not see why it should be penalised vis-à-vis onshore oil and gas.
There has been nothing on loan guarantees for the oil and gas sector. The Prime Minister has talked about building the bridge to the future of oil and gas. Access to finance is vital in this regard. Companies are being turned away by banks, which see the industry as something they do not wish to invest in. I hope that the measures announced today will go some way towards allaying the concerns about finance, but more can and should be done. Lots of companies have the ability, expertise and imagination to drive the innovation that the oil and gas industry will require. If they cannot access the funding and finance that is required to develop these ideas, it will be incredibly difficult for them to bring their skills and expertise to the marketplace to benefit the industry and secure the innovation and cost reductions that it has been pursuing.
While this is a welcome step, it cannot, in and of itself, be the last thing that the Government do to support the oil and gas industry. The industry has produced £300 billion in tax revenue; it contributes immensely to the UK’s balance of payments. We may not be seeing the astronomical tax revenues from oil and gas that we did before, but we cannot overestimate the importance of the role that the industry has to play for the United Kingdom and my neck of the woods in particular, in future.
Energy BILL [ Lords ] (Fifth sitting)
Callum McCaig Excerpts(8 years, 10 months ago)
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Chris Heaton-Harris
It is a pleasure to serve under your chairmanship, Mr Bailey. Given what the hon. Gentleman just said, I point out to him that as his party has a policy of achieving 100% renewable energy provision in Scotland, so much of it dependent on onshore and offshore wind, when the wind is not blowing there, Scotland—if it is independent—will have to come crawling to a country that will be setting a rate based on what it can sell on the market, rather than being generous. That is a hostage to fortune for any Scotland, future or past.
Callum McCaig (Aberdeen South) (SNP)
Does the hon. Gentleman acknowledge the statement from the Secretary of State on the renewed vigour with which the UK will pursue interconnections, to enable the UK to do exactly that?
Chris Heaton-Harris
We had a conversation earlier—I believe the hon. Gentleman was in the room—about the importance of interconnections and what they bring, including risks, when it comes to our continent. To a certain extent, I agree with him.
I will start by doing something quite unique in this debate: quote the Conservative party manifesto verbatim, not because, as my hon. Friend the Member for North Dorset said, I did not read it in the first place—that would be a slur beyond belief—but because this whole debate is essentially dancing on the head of a pin about how words should be used. Let me start with the opening salvo. The bolded headline is:
“We will halt the spread of onshore windfarms.”
That is fairly definitive and certain: we are going to stop any more onshore wind farms. The manifesto goes on to say
“Onshore wind now makes a meaningful contribution to our energy mix and has been part of the necessary increase in renewable capacity. Onshore windfarms often fail to win public support, however, and are unable by themselves to provide the firm capacity that a stable energy system requires.”
This is the bit we are debating today:
“As a result, we will end any new public subsidy for them and—
to help the hon. Member for Stalybridge and Hyde, that is “and”, not “and/or”—
“change the law so that local people have the final say on windfarm applications.”
Simon Hoare
I am delighted to hear an SNP Member thinking about a no-tax economy to help entrepreneurs. I am sure he will take that to Holyrood.
Callum McCaig
I am ever so obliged. I thank the hon. Gentleman deeply. He said that this should not have come as a huge surprise. The date of one of the planning applications mentioned by my hon. Friend the Member for Coatbridge, Chryston and Bellshill was 28 May 2013. It does not cost nothing to get an application to that stage before going through the process. Will the hon. Gentleman remind the Committee when the Conservative manifesto was written?
Simon Hoare
The hon. Gentleman knows that it was clearly written post-2013, but the sector should have known of the irrepressible commitment of my hon. Friend the Member for Daventry, with his 101 Dalmatians, or however many it was, who had been making such comments during the course of the previous two Parliaments, and realised that something was likely to happen.
One thing that I find of genuine interest/concern—we sometimes have faux interests and concerns, but this is genuine—is that the onshore wind sector is fairly mature and well established. We do not need to argue about its bona fides. We do not need to argue about whether it is generating 1%, 5%, 6% or 14% of electricity, because it varies. It is here and we have it. Very often, Governments of all stripes will provide some form of financial support and backing to a nascent industry or sector, but once it is on its feet and has proven its bona fides, it should be able to stand on its own two feet without subsidy.
In the conversations I have had with people from the sector, the question that was always very hard, if not impossible, for them to answer was what cut-off point they envisaged for the ending of onshore subsidy. When I asked, “What are you saying to Government and to Ministers about how you see this support going?” the general response was, “We will continue to take the subsidy as long as it is there.” That is no way to run a policy, even if the books are buoyant and in the black. It is certainly no way to run a policy when the books are anything but.
I was interested when the hon. Member for Norwich South seemed to suggest that because the subsidy was coming from the public—from their direct debits, bank accounts, purses and wallets—and not directly from Her Majesty’s Treasury, there was some difference. I keep making this point: although the national average salary is around £24,500, in North Dorset it is £17,500. I do not think that my constituents saw it as particularly fair or equitable to provide, through their bills, subsidy to very successful businesses and the landowners who were also getting their percentage of the deal.
Simon Hoare
In fairness to the hon. Gentleman, he makes a valid point, and I will answer his point in the way that I have answered it when constituents have talked to me about it. For those who try to seek a golden thread of thinking that runs through all of energy policy, they will look in vain, because there are inconsistencies. I am a huge supporter of the nuclear sector. I must confess it makes me slightly glow. [Interruption.] No, that is not the word I am looking for. It is not a rational approach to say I do not like subsidies for onshore wind, but I can understand the need for a subsidy for the nuclear sector. The problem with what the hon. Gentleman is trying to find—and he is legitimate in his search—is that we have so siloed our means of energy generation that they have to be viewed silo by silo, rather than according to the product that is being generated: electricity.
I do not want to take up the Committee’s time more than I need to, but I want to slightly echo what my hon. Friend the Member for Daventry said. My hon. Friend the Minister may recall that I mentioned this point on Second Reading in the House. At some point, there will need to be a side conversation between her Department and the Department for Communities and Local Government about the national planning policy framework. There is a slight danger that in the Localism Act 2011, we raised too much expectation of the phrase “local decisions”.
The Minister confirmed this morning—we are absolutely right to keep to this regime—that an aggrieved applicant would still be able to trot off to the Planning Inspectorate to appeal a decision, in the same way as the Secretary of State will be able to recall an application that may have been determined favourably by the local planning authority. Again, both an aggrieved applicant and an aggrieved third party will still have recourse to the courts for a judicial review, but the wording of the national planning policy framework—I am afraid I do not have the paragraphs to hand—provides a strong and reliable crutch to the inspectorate. It says that national planning policy, such as decarbonisation and so on, will trump a number of the key topics that my hon. Friend the Member for Daventry was talking about: areas of outstanding natural beauty, sites of special scientific interest, heritage and listed buildings and so on.
I do not think that we need to ramp that up too much, but I welcome the fact that instead of segregating proposals by size, local councils will be able to determine applications through the democratically elected process of the council chamber. Local people will, of course, be able to have a say there and will be able to appear as third parties at a public inquiry, but the final decision will not be taken by local people if an applicant decides to appeal. In my constituency, prior to the election, we had a terrible proposal for a very obvious place in terms of local vista and impact. North Dorset District Council turned it down, to the huge relief of the community, and the applicant read the room and did not appeal, realising that they would not get it. However, that avenue will remain open to an aggrieved applicant or developer.
It goes back to the point that I was making to SNP Members and others: all planning has a risk. In the absence of a provided subsidy, it may well be that applicants and landowners will think far more carefully about what they are applying for and where they apply for it. If they are reliant on the private sector to fund their initiatives and enterprises, we may find—
Simon Hoare
I am just coming to a close, if the hon. Gentleman will forgive me.
Rather than jiggery-pokery such as applying for two turbines in a 22-acre field to establish the principle and then coming back for more through variations to consent, which the amendments from the hon. Member for Coatbridge, Chryston and Bellshill sought to protect, we may well find that local communities and their planning authorities will see the whole picture at the start of the planning process rather than planning by salami-slicing, having established the principle.
The Government are absolutely right in their approach to the subsidy. My hon. Friend the Member for Daventry spoke wisely about the civil war. I must say that I would probably have found myself more of a cavalier than a roundhead, but there we are. However, there is an important point to make. If the civil war was about the proportionate balance between Crown and Parliament, the clauses inserted in the other place are, without over-egging this particular pudding, potentially as significant. If the Salisbury convention is to mean anything, something that passed the survey of the general election and a policy that commanded strong public support should not be challenged by the other place. I hope that we do not get involved in an overly long game of ping-pong with their lordships, because the view of the democratically elected House, certainly on this matter, must prevail.
Spending Review and Autumn Statement
Callum McCaig Excerpts(9 years ago)
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Mr Osborne
I am glad that the hon. Gentleman has noticed the bid that we have made for the rugby league world cup. Let us just hope that England, and indeed all the home teams, are a bit more successful than we were in the rugby union world cup.
The TransPennine train route is being electrified as fast as is possible in engineering terms. It is not a question of money—we have said that we will spend the money required for the electrification. The timetable is simply being dictated by what is possible in the engineering. I am therefore confident that we are making progress as fast as we possibly can.
Callum McCaig (Aberdeen South) (SNP)
The Chancellor seems to find the fall in the oil price somewhat amusing, whereas in the real world it means job losses and companies going to the wall. When will he stop laughing and start delivering the support for exploration that the industry requires?