European Union Referendum Bill

Chris Heaton-Harris Excerpts

Tuesday 16th June 2015 Commons Chamber

[John Redwood]

A register of interests would be one way of handling it. It would be quite complicated for large companies, but rather easier for grant-receiving organisations. The issue for companies is rather different. I am all in favour of business people taking an active part in our politics, but they may need to intervene as individuals, because if they are an executive in a very large company that has a broad shareholder base, they may not be speaking for their shareholders on a very political issue. People would ask them, “Is this your private view or are you speaking for the company and has it been tested in a company general meeting?” That is probably a debate for another day. I am all in favour of major business involvement, but unless someone owns the company they have to be careful in associating the company with their own particular views.

The conclusion I wish to put to the Government is that this Bill is extremely welcome, but it is work in progress. These are very complicated areas, because the EU is a unique and powerful institution. In order to have a fair assessment by the British people of its worth or demerits, we need to be very careful and to not in any way trammel our usual belief in independence and fairness when we test the mood of the people. I do not think the Bill quite yet meets that requirement, but I hope that, on Report, Ministers will have better and more detailed answers about how we handle the scale of campaign donations and the period prior to the referendum campaign proper with respect to controls over messages and financing, and that they will be able to address the very vexed subject of how much power, influence, money and messaging the EU itself can inject into what should be a United Kingdom debate.

[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to follow my right hon. Friend the Member for Wokingham (John Redwood) and I want to draw on some of the points he made about amendments 10 and 53.

It is a very poor politician who spends a lot of time talking about his previous speeches, but I would like to refer the House to what I said in this Chamber on 13 January 2014, when we had a lively debate on the Europe for Citizens budget, which we had a right to veto at the time and which involved the funding of a whole host of European pet projects. One such project is the European Movement and, from the very position on which I now stand, the late and much lamented Charles Kennedy made an impassioned plea for us not to cut the funding for the organisation of which he was the president. That relates to the point I want to make: we should be very wary of how organisations that receive European funding will act during the referendum campaign and ask whether they should be regulated in some way.

The preamble of the draft regulations for the Europe for Citizens programme states:

“While there is objectively an added value in being a Union citizen with established rights, the Union does not always highlight in an effective way the link between the solution to a broad range of economic and social problems and the Union’s policies.”

Therefore it wants the organisations that it funds to be very positive in the arguments that they make when they engage with civil society.

The Europe for Citizens budget line, which the European Commission funds, gives the European Movement a very large sum of money. I do not wish to pick on the European Movement all the time, but it is a good example of an organisation that receives some money to campaign to present a positive view of Europe, which I know is welcomed by many in this House, and whose funding comes from the European Commission which, I believe, wants to ensure a certain result in the forthcoming referendum.

[Kate Hoey]

I have just had a letter from the European Movement signed by the current chair, Lord Kinnock, who worked for the European Commission and will presumably have an EU pension, which he will have to declare. The European Movement has asked us all to join because it wants to campaign to keep the United Kingdom in the EU. That is a classic example of EU money being used directly to further the cause of those who wish to stay in the EU, whatever reform comes about.

[Chris Heaton-Harris]

The hon. Lady is receiving a lot of letters this week, including one from the Minister for Europe and one from the European Movement. People are obviously interested in her views and she seems to have a great deal of sway on the Labour Benches—if only—as to how the debate will go forward. She is right.

I do not want to pick on the European Movement. I have many friends in the movement. I suppose I should declare an interest as a former Member of the European Parliament, I believe I have a pension that is nestled away out there for my dotage. However, I am very wary of the fact that the European Movement can fall on only one side of this debate, funded by British taxpayers’ money channelled through the European Commission. Will the Minister be able to tidy up the regulations to ensure fairness in the way that taxpayers’ money is spent?

There are a host of non-governmental organisations and some charities—this goes to amendments which the right hon. Member for Gordon (Alex Salmond) and my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) spoke about—to which European funding goes. Those organisations may then feel obliged to take part and push forward their own ideas on one side or the other in a European referendum.

[Dr Murrison]

Does my hon. Friend agree that the organisations that he is talking about are supranational organisations and therefore do not fall within the scope of the legislation we are debating today? Does he agree that we need to come to some sort of accommodation, as other hon. Members have suggested, with the institutions of the European Union to self-deny some of the actions that they and their organisations may be taking? If they do not, it is likely that some of those actions will be counterproductive and act against what we all want—a free and fair referendum.

[Chris Heaton-Harris]

I agree entirely. That is why I was attracted by amendment 10 in the name of my hon. Friend the Member for Stone (Sir William Cash). The British people are savvy enough to make their own decision in the referendum, based on the arguments presented to them about how their lives will be affected. The choice they make will be theirs and theirs alone. I do not believe that these organisations will have great influence.

However, now is a good time for us to discuss how we deal with some of the points that have been raised. I want the referendum to be seen to be free and fair, as I believe it will be. This is the ideal time in the process to do that as we have the Bill before us. I am keen for the Minister to be aware of the issues. Maybe there is no need to act. Maybe there is no need to go further than discussing them here today. Perhaps some tidying-up provision could be introduced on Report, though I have no idea what that might be. My hon. Friend the Member for Stone has consulted the Electoral Commission about foreign sources of funding. This is a grey area, with quite a large sum of money going to numerous organisations, NGOs and charities, and it would be nice for us all to know that that money will be spent fairly and not for political purposes in the referendum in the next couple of years.

[John Penrose]

We have heard an extensive set of contributions in this debate, including from my hon. Friend the Member for Gainsborough (Sir Edward Leigh), the hon. Member for North East Fife (Stephen Gethins), my hon. Friends the Members for Stone (Sir William Cash) and for Harwich and North Essex (Mr Jenkin), the right hon. Member for Gordon (Alex Salmond), the hon. Member for Glenrothes (Peter Grant), my hon. Friends the Members for Aldershot (Sir Gerald Howarth) and for North East Somerset (Mr Rees-Mogg)—he was kind enough to say nice things about the constitutional impact of Somerset—my right hon. Friend the Member for Wokingham (John Redwood) and my hon. Friend the Member for Daventry (Chris Heaton-Harris).

I will start by saying a few words about clause 3 in general. I will then speak to the Government amendments before endeavouring to respond to the various points that have been made by colleagues on both sides of the Committee. Clause 3 sets out that part VII of the Political Parties, Elections and Referendums Act 2000—PPERA—applies for the purposes of this referendum. It has been in place since 2000, so it provides a well-established and understood framework for regulating referendums in this country. For example, part VII sets the spending limits for campaigners during the referendum period and the rules on donations.

However, the legislation for two recent referendums—on the voting system in 2011 and on Scottish independence last year—although based on PPERA, also provided examples of how the controls on campaigning and the framework for conducting a referendum could be improved. Where those changes have improved the regulation of referendums, with the support of the Electoral Commission, we have sought to replicate them in the Bill.

European Union (Finance) Bill

Chris Heaton-Harris Excerpts

Thursday 11th June 2015 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to follow the hon. Member for Worsley and Eccles South (Barbara Keeley). She reminded us of a number of things. She reminded us of the first flip in Labour’s European policy, when her party chose to join a small group of Conservative Members who were concerned about EU spending, which was perhaps the foundation for Labour’s flip in policy on the EU referendum that we saw this week.

I very much welcome the hon. Lady’s words about trying to look at future EU budget spending and the need for significant control of that budget and the checks on it. My hon. Friend the Member for Wellingborough (Mr Bone) talked about the accounts not being signed off for two decades. For 20 years there has not been a positive statement on or assurance of the EU accounts being signed off. I have to remind the hon. Lady that in all the time that her party was in office, not once did her Government ask a question about the EU accounts not being signed off. It was only when the previous, Conservative-led Administration came to office that questions were first asked.

[Barbara Keeley]

The hon. Gentleman refers to what he described as the “flip” in the 31 October 2012 debate, but at the time we were referring back to a Labour position adopted on 12 January 2012 in a motion that ended with the words that we called

“on the Government to strengthen its stance so that the 2013 Budget and the forthcoming Multi-Annual Financial Framework are reduced in real terms”..”—[Official Report, 12 July 2012; Vol. 548, c. 523.]

[Chris Heaton-Harris]

Excellent. If we are going back in history, I guess I should share with the hon. Lady the fact that from 1999 to 2009 I was not in this House, but in the European Parliament. I sat on the budget and budgetary control committees, watching Labour Members of Parliament and Labour Ministers at the time not particularly bothering at all about EU spending, so I am delighted with the change of heart, because there is a need for focus on this area.

I do not intend to speak for too long because I know that a number of hon. Members want to make their maiden speeches. Small though the Bill is, it is, however, important and it deserves to have a decent amount of scrutiny by the House, which I am pleased to see that it will receive. The sole purpose of the Bill is to approve and implement the EU’s own resources decision, setting into legislation how the EU budget is to be funded, including the EU rebate. That is a big deal for us, because we stick in a massive contribution to the European Union. The Office for Budget Responsibility’s March 2015 economic and fiscal outlook report gives the net contribution figures for our country to the European Union. I had a debate in the Tea Room with my right hon. Friend the Member for Wokingham (John Redwood), who thinks that the figures are downplayed slightly, but they are the ones that I have to hand at the moment.

The net contribution for 2013-14 from Great Britain to the European Union was £10.2 billion; for 2014-15 it was £9.2 billion; and for 2015-16 it was £9.9 billion. Those are significant sums of money.

[Mr Rees-Mogg]

I wonder whether my hon. Friend thinks it is right to use the net figure, or the gross figure after rebate, because with the net figure the spending that is netted off is spent according to the requirements of the European Union; it is not necessarily spent in the way that a British Government would wish to spend it.

[Chris Heaton-Harris]

My hon. Friend is completely right about that, so I thought I should also share with the House the gross contribution figures given by the Office for Budget Responsibility in its March 2015 economic and fiscal outlook report. The gross contribution figures were £14.1 billion for 2013-14, £14 billion for 2014-15 and £14 billion for 2015-16. We are talking about massively significant sums and this Bill therefore needs some scrutiny, because it is the one that tells us how the EU budget is funded.

[Kelvin Hopkins]

These annual sums bear a striking similarity to the amount the Chancellor is proposing to cut from welfare spending. I would much prefer to see welfare spending increased and spending on the European budget reduced.

[Chris Heaton-Harris]

I hope the hon. Gentleman is able to spread that message far and wide across the Opposition Benches. What he says is true: wherever we have a cost in our finances, we make choices in other places. This is a significant sum, but it is one we have chosen to pay over. We must therefore ensure that we allow ourselves, as this decision on the own resources decision rightly does, to keep a check on how our money is being spent.

The European Union Act 2011 requires this House to give approval to own resources decisions. There has always been an Act of Parliament that does that, but the 2011 Act was a good piece of legislation—again, Labour Members came to it late in the process. It allowed greater scrutiny of how the Executive choose to act in European matters; it introduced the referendum lock on certain things; and it made sure that we get a debate on significant matters such as the one before us today. Although we have always had an Act of Parliament in place to do this, I welcome the greater scrutiny.

I should remind hon. Members of what the “own resources” of the European Union actually means. What are these figures for and where do they come from? Well, 12% of the own resources budget is comprised of customs duties, including those on agricultural products; a tiny sum, less than 1%, is sugar levies; there are contributions based on VAT, which comprises about 13%; and the remaining 74% or so is based on gross national income-based contributions. A significant mix of different things goes into our £14 billion gross contribution to the EU.

Actual European spending is set by the annual EU budget, but, as my hon. Friend the Minister said, the annual budget expenditure is governed by the ceilings set by the EU’s multi-annual financial framework. I was pleased to be reminded by him of the good job our Prime Minister did to ensure that the last MFF gave us an unprecedented real-terms cut in EU spending ceilings for 2014 to 2020, which was welcomed by Members on both sides of the House—it was eventually believed by the then Labour economic team.

Unlike the own resources decision, under EU treaties the multi-annual financial framework does not need the national approval of member states in accordance with their conditional requirements. Thus, it is already in force and this Bill deals only with the own resources decision. Alongside the agreement of the new MFF, we had this new own resources decision, which was formally adopted by unanimity by the Council in May 2014, and the Bill approves it for UK purposes. As the Minister said, the rules governing the UK rebate remain unchanged compared with the existing own resources decision. Alas, they do, however, repeat, and this answers a point mentioned earlier by the hon. Member for Luton South—

[Kelvin Hopkins]

North.

[Chris Heaton-Harris]

I mean the hon. Member for Luton North (Kelvin Hopkins). They roll in the old rebate loss that the former Prime Minister Mr Blair negotiated in return for common agricultural policy reform that we never achieved.

I have a couple of questions for the Minister, one of which has been raised previously by my hon. Friend the Member for North East Somerset (Mr Rees-Mogg). The Minister mentioned the minor additional costs that this might bring to us, because there do seem to be some compared with the existing own resources decision. He talked about their being offset by other corrections and I wonder whether he could detail what they are, because I could not find them in the explanatory notes. I also seek clarification on the answer he gave to my hon. Friend the Member for North East Somerset on the change in the European system of accounts. I did not quite understand the answer and I would appreciate it if he could go into a tiny bit more detail.

I welcome the Bill and the scrutiny it is giving to EU accounts, and I welcome the opportunity to talk about this in greater detail when we go into Committee next week.

Amendment of the Law

Chris Heaton-Harris Excerpts

Thursday 19th March 2015 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

You said “you” again.

[Chris Heaton-Harris (Daventry) (Con)]

Will my hon. Friend give way?

[Mr Binley]

Before I give way, may I say that age brings with it forgetfulness, as I hope you will understand, Mr Deputy Speaker?

[Mr Deputy Speaker]

You must be very old!

[Chris Heaton-Harris]

It will be a great loss not to have my hon. Friend in the House after the general election, because he is a worthy champion of the wealth creators of this country. In his valedictory speech to this place, will he share with us some of his great expertise on why small businesses are the bedrock of British society, and how they employ so many people to the benefit of our tax system?

[Mr Binley]

I would be delighted to do so. Small businesses are the bedrock of the growth in the number of businesses overall because, first, they welcome the Government’s approach, and secondly, they have the courage to go out, put their own money on the line and add to the number of jobs available in this country. I am delighted to say that that is exactly what I did 25 years ago, and the companies I founded now employ 300 people —that is what entrepreneurialism is about—and to say that that is a part of my record and always has been.

The Chancellor has acknowledged that the success of the Budget will not be calculated by the accumulation of individual measures. I will therefore speak about the economic architecture that will help to achieve his ambitions. I want to comment on how his efforts to rebalance the economy are taking off, something which requires a bold and strong local infrastructure that supports businesses.

In particular, I want to speak about the importance of local enterprise partnerships. I am delighted to say—here is a compliment—that I understand that the Opposition have welcomed LEPs and will continue to use them. That is sensible, and we should give the Opposition credit when they agree with sensible measures. LEPs are critical to the rebalancing of a successful economy in every part of the UK. As some of my colleagues know, I am the vice-chairman of the Northamptonshire LEP. I may be the only Member of the House to be so intimately involved in an LEP. I believe that it is important for hon. Members to take an active interest in their LEPs and be associated with them with a view not to running them or overpowering their potential, but to being involved because they can be a great help. I hope that the Opposition spokesman, the hon. Member for Hartlepool (Mr Wright)—to be fair, he is a great supporter of small business—will take that message on board.

Northamptonshire had the vision to create the Northamptonshire enterprise partnership before LEPs were mooted. I pay tribute to the leaders of the county council for their foresight. The pressures on local government funding will increasingly restrict the ability of local authorities to sustain their support for LEPs. If we are to make them work, they need to be owned by the entirety of the local economic community, and not just by one sector.

Why has the performance of LEPs across the country been so patchy? I believe that it is because many of them, particularly many of the smaller ones, are not in receipt of the support that they need to create the sort of administration that will produce the growth that we are seeking. The original design for LEPs envisaged local businesses as the main source of income for the administrative costs. However, in areas where small businesses are the main engine of economic growth, that is an optimistic expectation. In Northamptonshire, some 94% of those working in the private sector work in SMEs. SMEs simply do not have the spare cash fully to support the LEPs in the way the Government originally envisaged.

I would like to see a system whereby a proportion of the finance that is available for the projects that LEPs handle is allocated to sustain their administration. I hope that the Economic Secretary will recognise that I am not asking for more money, but for some of the money that is devoted to local growth to be redirected to the administration of LEPs so that they can achieve the objective of growth.

This Budget must be seen as the prelude to prosperity in the next five years. Frankly, the Chancellor will need the support of LEPs after the election. That support will have to be strong and sensible. Consequently, the Government will have to give careful thought to how best to organise and manage the structure of LEPs. I appeal to the Economic Secretary to recognise that, in view of the Government’s policies that were expressed by the Chancellor, LEPs will need a little more financial help if they are to do their job correctly on behalf of the Government.

I am happy to offer an exemplar for what can be achieved by a LEP. I refer to my own LEP in Northamptonshire —there’s nothing like blowing your own trumpet! The economy in Northamptonshire is recovering well from the great recession. The food and drink sector is the largest sector in our county in terms of employment and turnover. We are building a new food and drink academy at one of the important colleges just outside Northampton. More than 40,000 people are employed in the auto sport and aerospace industry. They are grateful for the help that has been given to the industry, but they want it to continue. Our craft industry, which makes the best boots and shoes in the world, has received help from the LEP. Church’s, which is one of the best-known brands, has had help to extend its manufacturing facility. Northamptonshire’s enterprise zone has created more than 1,000 jobs.

Finally, Northamptonshire’s Challenge 2016 project, which aimed to achieve a massive reduction in youth unemployment, has far exceeded our expectations. Two years ago, we had more than 5,600 young people not in education, employment or training; there are now a little under 1,500. That is the success of this Government—giving people opportunity and aspiration. I say to those who tell me that young people do not have aspiration that it is amazing how aspirational young people become when they have a job.

If we are to put ourselves in the premier league of economic growth, the measures in the Budget must be combined with an effective local economic framework. I am confident that Northamptonshire will continue to provide an example of how best to drive regeneration and economic growth, but it will need more help, as will many LEPs across the country. I beg that you consider that factor—you being the Economic Secretary, Mr Deputy Speaker—

--- Later in debate ---

[Chris Heaton-Harris (Daventry) (Con)]

It is a privilege to speak in this debate not just because it follows a sensible and wise Budget but because I have been able to benefit from the wisdom of a number of retiring Members. I am talking about my hon. Friend the Member for North Dorset (Mr Walter), my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), my hon. Friends the Members for Dudley South (Chris Kelly), for North Warwickshire (Dan Byles) and, not least, for Northampton South (Mr Binley). It is a true privilege to follow some great speeches with some very wise words. Indeed, the hon. Member for Easington (Grahame M. Morris) also delivered a great speech. I would love to disagree with him on every single point that he raised, and probably will do in my speech, but he is such a nice man that it is very difficult to do that.

It is also good to see Front Benchers wearing their team colours. The Economic Secretary to the Treasury, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and my next door neighbour, is adorned with a jacket that is the Northampton Saints strip. I know that the shadow Minister, the hon. Member for Hartlepool (Mr Wright), would be wearing his Hartlepool kit if he had the opportunity. I have heard him speak before, so I know it would not be as the mascot.

I listened to the speeches from the shadow Chancellor and others, and I really wanted to follow a Labour Member I did not like, because there is a brilliant Shakespearian insult that I wanted to use:

“O, he is as tedious

As a tired horse, a railing wife;

Worse than a smoky house: I had rather live

With cheese and garlic in a windmill”.

But unfortunately I followed the hon. Member for Easington, so I could not use any of that.

It is a pleasure to stand here today, only a week before Dissolution, and reflect upon the Chancellor’s remarkable economic achievement in picking Britain’s economy up off its knees after it was left in tatters by the Labour party. I would like to focus today on the businesses up and down the county without which this economic recovery would not have been possible. They are the meat on the bone of our long-term economic plan. It is they who have helped to get record numbers of people into employment, they who have helped grow our economy by 2.6% in the past year alone, and they who have taken the risks to help Britain succeed, now and in the future.

The economic news is good not only at a national level, but in my constituency of Daventry. Unemployment there is now running at the extraordinarily low rate of around 1%, with only 600 constituents on jobseeker’s allowance, which is down 42% since a year ago. Youth unemployment is down 40% since 2010, and long-term unemployment has been halved. Those figures are quite miraculous. They are a testament both to those who work in the jobcentre and help find work for my unemployed constituents and to the businesses in my constituency that created the jobs in the first place.

In fact, the midlands are having quite an economic renaissance. We are seeing a job created there every 10 minutes, with employment rising faster there over the past than even in London. Those are amazing statistics, especially when we consider that 80% of the jobs being created are full time and in high-skilled occupations. Over the past two years, Daventry has seen 1,700 people begin apprenticeships. I am proud of the legacy that we will be able to look back on in that area. The Prime Minister has outlined his ambition to see 3 million apprenticeships in the next Parliament, and I know that in only a few weeks’ time that ambition will start to become a reality when the British people rightly vote Conservative across the country and deliver a Conservative Government.

Another proud achievement of this Government has been the creation of and support for university technical colleges, one of which is in my constituency. There are now 40 UTCs thanks to this Government, and there are more to come. Daventry university technical college, under the wise stewardship of Dave Edmondson, is performing great things. With the Daventry international rail freight terminal in my constituency, the UTC focuses on sustainable and related new technologies in engineering, construction and environmental sustainability. That reflects the growing demand for well-qualified technical specialists in my constituency. It is now building the skills sets of students going through the UTC so that they can walk into jobs that are right on their doorstep.

There are many good points that got only a brief mention in the Budget statement. I echo yesterday’s statement from the Federation of Small Businesses, which said that giving stand-alone guidance for research and development tax credits for small businesses will

“drive further investment by innovative companies”.

In fact, I recently met a representative of an accounting firm who works with small businesses in order to discuss tax credits. Jane Ollis, managing director of RIFT, pointed out that in 2013 only 13,000 of the millions of small businesses in the UK claimed back the cash they were entitled to from the Government under research and development tax credits, so there is a lot of work to be done in that area. If a business has spent time and resources carrying out new product development, or if it is working on some innovative solutions, it should be able to reduce its tax bill or secure a cash injection of up to 25% of what it has spent. RIFT has identified that the average R and D tax refund claimed back from HMRC is £55,000, which is an invaluable injection of cash for any small business.

We have also taken 360,000 small businesses out of business rates over this Parliament by extending small business rate relief. We have thrown our weight behind businesses by cutting corporation tax, which in two weeks’ time will fall to 20%, the joint lowest rate in the G20 and a far cry from the legacy of the previous Labour Government—it stood at 28% in 2010. Now, we will go further. Realising that business rates have not kept pace with the needs of the modern economy, the Chancellor has announced a review of the structure of this system. That is welcomed by everybody in business.

We have argued in this place about whether people are feeling the benefits of the economic recovery. The IFS said today:

“Average household incomes have just about regained their pre-recession levels. They are finally rising and probably will be higher in 2015 than they were in 2010, and possibly higher than their 2009 peak.”

Families are, on average, about £900 a year better off under this Government.

On my next point, I should declare an interest. I do not receive any payment but I am the chairman of two regional theatres and a cinema. Arts, heritage and sport have received a great deal of money from this Government —£300 million extra in the past four years, compared with the preceding four years, because the Government changed the funding formula with the lottery. This is opposed by the Labour party, which has still not decided whether it would go back to the funding system that it previously operated, meaning a huge cut for the arts. I hope the hon. Member for Hartlepool will pick up this point and say how arts would be funded in the future.

We must never forget Labour’s great recession, its mismanagement of the economy and its economic illiteracy. The Leader of the Opposition and the shadow Chancellor fail to disguise their disdain for business, trotting out the same tired lines and failed policies, such as rent controls, threatening businessmen who criticise their policies, proposing punitive taxes on wealth creators and refusing to commit to deregulation. I have numerous photographs of many Opposition Members, including the one who is, I believe, next to speak, standing next to a huge ice cube, trumpeting their proposed energy price freeze, only to abandon it as energy prices are decreased by market forces. This literal political meltdown shows their utter incompetence. They have no economic plan, let alone a long-term one like the Conservative party and this Government.

Equitable Life

Chris Heaton-Harris Excerpts

Thursday 26th February 2015 Commons Chamber

[Stephen Lloyd]

My hon. Friend is absolutely right. A number of people are now reaching an age when something needs to be done extremely quickly. A constituent of mine, Billy Murphy, a variety artist for 70 years, had been lobbying me patiently, and I had been supporting him, until he sadly passed away in January. He had been making contributions for many years, and he was a very good example of the people to whom my hon. Friend and many others have referred: decent, hard-working people who were prudent and put money aside. Those people have lost out, not because of their own inadequacy —not because they took a punt, or played the stock market—but because they invested in a well-established and respected pensions company that was regulated by the Government. It was regulated by the Government: that is the whole point, and that is why we as a nation, whichever Government are in power, have a real responsibility to do what is right.

[Chris Heaton-Harris (Daventry) (Con)]

I am a former Equitable Life policyholder myself. I had a company pension policy. I distinctly remember questioning the person who sold me the policy about how Equitable Life was regulated, and being told that there was no chance of its failing because it was acting well within the regulations that existed at the time.

[Stephen Lloyd]

That is a very important point. The whole system—from the perspectives of finance, prudence and proper rule of contract law—fell apart under Equitable Life. It completely collapsed. When something like that happens in a country like the United Kingdom, the duty of the Government, irrespective of some of the broader issues, is to provide proper compensation, because otherwise the whole fabric becomes extremely vulnerable.

I find it bewildering that none of the senior managers of the old Equitable Life—and none of the people who were in charge of the marketing side or the investment side—went to jail. If I, as a Member of Parliament, find that bewildering, I can imagine the profound frustration that so many of our constituents must feel, given that they were doing the right thing. This was a company that was regulated, regulated within an inch of its life—that was the whole point of the sector—yet, through no fault of their own, it collapsed, and, a few years later, the parliamentary ombudsman said that there had been a systemic failure of regulation. All those senior managers and executives, whom we all knew, must have been aware of what was happening.

I greatly appreciated what was said earlier by the hon. Member for Stretford and Urmston (Kate Green). When she bought an Equitable Life pension which she kept for a few years, all the marketing suggested that the company was rock solid and the purchase almost a steal. She was told “You really must invest in this.” Those people must have known what was happening, and I fail to understand why they were not penalised.

EU Budget (Surcharge)

Chris Heaton-Harris Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

It was not clear that this exceptional demand for a payment would have the British rebate applied or indeed to what extent the rebate would be applied. The amount was confirmed to us only last Thursday evening.

[Chris Heaton-Harris (Daventry) (Con)]

Is the Chancellor surprised by the number of EU budget experts who now seem to be appearing on the Opposition Benches? Does he, like me, wonder where they all were when former Chancellors were happily signing off flawed EU accounts or giving away our rebate?

[Mr Osborne]

My hon. Friend is absolutely right; they gave into all Europe’s demands and handed over more and more British taxpayers’ money. They were neither wise before this event, nor particularly wise after it.

Undeclared Work (Reasoned Opinion)

Chris Heaton-Harris Excerpts

Monday 9th June 2014 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

I shall be very brief, because I, too, know the time limits. I prepared a great oration to last for 90 minutes, because I know the Minister loves it so much. Really, I have just two questions: first on the detail of the Government’s position and secondly on the legal base.

The first question is a fairly easy one. The Government were uncomfortable with the legal base put forward by the Commission in article 153(2)(a). I am not sure what the Government’s current position is and I would very much like to hear what the Minister has to say.

Equally, I was not quite sure from what the Minister said whether the Government’s position on subsidiarity was shifting following the clarification at Council working group level that, while participation in the proposed EU platform will be mandatory for all member states, participation in the activities of the platform will be voluntary. I am not sure that that will be the case, because in the proposed text issued by the Commission it does not appear that the national authorities’ participation in the activities of the platform could, or would, be voluntary. Article 5(1) requires that

“Each Member State shall appoint one single point of contact as a member of the Platform.”

Article 5(4) provides that

“Single points of contact shall liaise with all enforcement authorities which are involved in the prevention and/or deterrence of undeclared work regarding the activities of the Platform and guarantee their participation at the meetings and/or contribution to the activities of the Platform or its working groups if issues discussed involve their field of competence.”

It strikes me that there is a bit of an issue here, which is one of the very good reasons why we should issue a reasoned opinion. I would like the Minister’s clarification on that.

Finally, there is quite a budget attached to this platform. Europe is very good at spending money on doing these things. Personally, I do not see the value in half of this stuff, but I would very much appreciate it if the Minister clarified those two points.

Oral Answers to Questions

Chris Heaton-Harris Excerpts

Tuesday 11th March 2014 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

4. What fiscal steps he is taking to limit welfare spending.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Government have announced their intention to bring social security spending within firm spending controls through the introduction of a welfare cap. The level of the cap will be announced at Budget 2014. The Government have taken significant action to bring welfare costs under control since 2010. The welfare cap will ensure that welfare spending remains on a sustainable footing and that significant deteriorations in the forecast do not go uncorrected.

[Chris Heaton-Harris]

I welcome that answer. Does my hon. Friend believe that the tough decisions the Government have taken to control public spending on welfare have enabled them to protect public spending on schools and the national health service, and that this policy is a vital part of the Government’s long-term economic plan to reduce the deficit and safeguard the British economy?

[Nicky Morgan]

My hon. Friend is entirely right. The Government have taken difficult decisions to place the public finances on a sustainable footing, while protecting important areas of expenditure such as the NHS. The Government’s long-term economic plan to return the public finances to a sustainable path has restored fiscal credibility. It is notable that the Labour party has no plan, long-term or otherwise, other than to borrow more, spend more and tax more.

Oral Answers to Questions

Chris Heaton-Harris Excerpts

Tuesday 28th January 2014 Commons Chamber

[Mr Osborne]

I am glad that the hon. Gentleman welcomes the better news. Indeed, I think that unemployment in his constituency has fallen by 20%, which is further good news. It is the first time in years that I have heard him try to defend the record of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown): since he is not here, the hon. Gentleman has to do it for him.

The point that the hon. Gentleman makes about crowdsourcing is a serious one. We are looking at this new market and at what, if anything, the Government should do to support it. It is of course growing without Government support, but we are actively looking at it, and I would very happily consider any positive suggestions he has on what more we can do to support crowdfunding.

[Chris Heaton-Harris (Daventry) (Con)]

5. What recent steps he has taken to reduce income tax.

[The Chief Secretary to the Treasury (Danny Alexander)]

Since 2010, the Government have increased the income tax personal allowance by more than 50% and it will reach £10,000 this April. That will cut the income tax bills of more than 25 million working people by £700 a year. We can afford to do that because we have stuck to a credible economic plan that is creating jobs and supporting growth, as is shown by today’s excellent figures.

[Chris Heaton-Harris]

That means that 2.4 million people have been lifted out of paying tax altogether. In my constituency, thousands of people are no longer paying tax and are in profitable work. My constituency has a 1.9% unemployment rate and thousands of jobs are coming to Daventry. Does that not show that for my constituents, the Government’s long-term economic plan is working?

[Danny Alexander]

I agree wholeheartedly with my hon. Friend. I can update him on one point of fact. By April this year, we will have taken not 2.4 million low earners out of tax, but 2.7 million low earners.

Interest Rate Swap Derivatives

Chris Heaton-Harris Excerpts

Thursday 24th October 2013 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

I echo everyone else’s congratulations to my hon. Friend the Member for Aberconwy (Guto Bebb) on driving the campaign forward in such a passionate way. I also thank my hon. Friend the Member for Wyre Forest (Mark Garnier) for explaining to me something that I thought I understood and for proving that I did not in fact understand it—indeed, I am now worse off in my understanding of swaps than I was before he started speaking.

I am here because I want to talk about two constituency cases. Many Members have raised individual points, and each case seems slightly nuanced in different ways. My constituents simply went to their banks for a loan and came away with a product that they did not expect to come away with—a loan and a swap, or just a straightforward swap. In the first debate we had on this subject, I mentioned a constituency case involving a gentleman called Philip Derbyshire of Spirit Motors. He banks with Lloyds and was sold a product not just as a loan or a swap, but as a protection for his business—if he had subsequently sold his business or passed away, the product would have become an asset for him.

A number of people have talked about not understanding the product that was sold to them—that was well disclosed previously—but many were also unaware of the magnitude of the break cost or mark-to-market, as it is called. Banks said when the product was sold that they were unable to provide indicative figures for breakage costs, but it is absolutely obvious that this was not the case. The banks simply chose not to provide a scenario at that time. In the cases I have dealt with, my constituents took bank advice on what were very complicated products.

Mr Derbyshire has had an interesting time of late. He has been dealing with the lawyers from Lloyds, because he, like many others, had an interesting waiver—a disclaimer—in the hedge confirmation letters he received. Lloyds’s lawyers have denied all liability and hidden behind the waiver, which has a cash value in his contract of about £5,000, against a claim of well over £1 million. Slater and Gordon, Mr Derbyshire’s solicitors, have described the case of mis-selling by Lloyds as unbelievably shocking. Lloyds’s lawyers’ comments in response to Mr Derbyshire’s claim were quite interesting. They said that the account of the meeting at Mr Derbyshire’s home with a Lloyds representative was inaccurate and that he had “put a gloss on it”, vehemently denying that it had been asked whether Mr Derbyshire’s company was likely to breach any of the bank covenants at the end of the financial year, which ended on 30 November 2009. Mr Derbyshire completely contests this. He remembers the question with complete clarity—and I believe him completely—and his response to it. Indeed, in the end, Mr Derbyshire did not breach the terms of the covenants, but by then the damage from the waiver in the contract was done.

According to the Bully-Banks survey, 30% of Lloyds customers are classed as “sophisticated”, as my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) described. Mr Derbyshire has told me his level of education. He is a fantastic businessman; he might not have been the world’s most educated man. As such, he is ineligible, because he is “sophisticated” in financial matters for the purposes of the FCA review—obviously that is a matter of judgment on the part of his bank and himself. Mr Derbyshire has been a pressing individual. He wrote a personal letter, putting his case directly to the Lloyds chief executive—and of course, no one ever gets a reply to such a letter. Mr Derbyshire believes he has been treated with utter contempt by his bank—a bank that he used to have a huge amount of respect for and with which he had dealings for a long time.

The second case involves my constituent Mr Solanki, who owns Ashdown House residential care home, a small home that serves the aged local community with a specialised and dedicated dementia unit. Back in early 2006, he was approached by the manager of his bank, Barclays, who convinced him that, as interest rates were more than likely to rise, he should buy a 20-year interest rate hedging product to protect the business. The product was way beyond Mr Solanki’s technical understanding and abilities, so he was referred to an “expert” at BarCap, who convinced him that rates would rise significantly and that the product would protect him. Neither the BarCap salesman nor the bank manager explained the risks of the product; however, Mr Solanki was advised that it was transportable and easy to exit. Mr Solanki and the adviser never physically met—everything was done over the phone—which must in some way be non-compliant.

Soon after Mr Solanki had taken out the product, interest rates fell sharply, and we all know what happened from there. Because of the cost he was paying for the product, which ended up being more than the mortgage he had taken out on the business in the first place, he was unable to maintain the level and standard of the home. As occupancy fell, the company was forced to lay off staff and carry out patchwork repairs wherever possible. Much has happened since 2009, but essentially he is in a terrible place because of these awful products. Redress needs to happen; it needs to happen quickly.

Corporate Structures and Financial Crime

Chris Heaton-Harris Excerpts

Thursday 4th July 2013 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

Thank you for your guidance, Madam Deputy Speaker.

It is a pleasure to follow the right hon. Member for Oldham West and Royton (Mr Meacher). I am glad to be doing so on a day when he has been very positive. I would hate to follow him on a day when he was being negative—it would be like having a dementor circling the room. It is always a pleasure to see him in this House, though, especially when he has so many to choose from.

I wanted to take part in the debate to do two things. First, I wanted to set out that the vast majority of businesses established in our country do the right thing by tax and the right thing by corporate structure. They really do work hard to stay within the rules, and they, like everyone else, are shocked when they see other corporate structures not doing the same.

Secondly, I wanted to congratulate and support the hon. Member for Bassetlaw (John Mann). It comes as a bit of a shock to me to say that, but I know that he has worked hard on this subject. I do not agree with him on everything, but he does raise a number of valid points; he states them and debates them well and they need to have a good airing. I look forward to continuing the dialogue with him.

Before I got involved in this political charabanc, I was a small business man. I much preferred running a small business and being able to do something positive to sometimes sitting through debates and ultimately achieving nothing. We remain a nation of small businesses and we should encourage them, so I believe it is important that we allow small businesses to set up and establish themselves quickly and cheaply. I therefore disagreed with the hon. Gentleman when he talked about making it more expensive and complicated to set up a company.

Only a year or so ago, I set up a company, and it was a delight to be able to do so online and quickly. There are a few hoops to jump through—one has to prove one’s identity, for example—but I thought the right checks and balances were in place. If we want to create wealth in this country, as we all do because that is where our taxation comes from, enabling businesses to be set up quickly is a good thing. I hope that the hon. Gentleman forgives me for disagreeing with him on that point.

Like my hon. Friend the Member for Aberconwy (Guto Bebb), I am a member of the Public Accounts Committee. We have been going through report after report on a series of corporate structures that were set up in a slightly interesting way to avoid paying tax, but to do so legitimately. We have been able to show where tax has not been paid or where people think tax should be paid, but it is only a thought, only a process. The companies that have come before us have all been able to say to us, “We do exactly the right thing both by the law in this country and by international law.” If we are serious about tackling this problem, we need to engage on an international stage. That is why I welcome very much the Prime Minister’s words and deeds at the G8 summit and what I expect will happen in future.

The right hon. Member for Wolverhampton South East (Mr McFadden) mentioned the complexity of modern-day banking. In fact, now that banks are so interlinked, there is an odd sort of transparency about banking transactions. Banks can make themselves as complicated as they like, but with modern technology and the internet—something the hon. Member for Bishop Auckland (Helen Goodman) was moaning about—comes a degree of transparency that, should we wish it, could clear up a number of issues behind the scenes. Again, however, that would have to be negotiated on an international basis.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend agree that transparency about ownership, particularly the ultimate beneficial owner, of a company should be welcomed? For many years, the identity of the real owners of some football clubs, such as Coventry City and, previously, Leeds United, was hidden in dummy companies registered offshore.

[Chris Heaton-Harris]

I agree. Coventry City is a perfect example. It announced today that it is moving in with Northampton Town, a club that is local to me. I am sure fans would love to know what went on behind the corporate structure there.

I have one wish, which is to ensure that we get some sort of transparency behind these corporate structures. Members will know that I am a big campaigner against onshore wind farms. Many of the developers have an unbelievably complex corporate structure that sucks money—subsidy, actually—out of this country and away to far-flung lands through a number of countries and a number of companies.

There is a job to be done. I welcome this debate, I congratulate the hon. Member for Bassetlaw on securing it, and I look forward to working with him and others in the House to get the right job done.