Oral Answers to Questions
Corri Wilson Excerpts(7 years, 2 months ago)
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Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
The Chief Secretary to the Treasury (Mr David Gauke)
The Government have focused on taking forward city deals with Edinburgh, Stirling and Tay cities and we are looking to agree city deals with all of Scotland’s great cities. The Government have also published their Green Paper on the industrial strategy and are engaging closely with the Scottish Government and local partners on how the strategy can work for all parts of the United Kingdom.
Corri Wilson
We heard earlier about investment in Yorkshire. Would the Chief Secretary to the Treasury acknowledge that the Ayrshire growth deal would provide a much-needed economic boost to the area and reflect the Government’s promise to drive growth throughout the whole country, as outlined in their recently published industrial strategy?
Cerberus Capital Management: Purchase of Distressed Assets
Corri Wilson Excerpts(7 years, 2 months ago)
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George Kerevan
I agree, and the hon. Gentleman gets to the heart of the issue that we want to bring before Treasury Ministers, which is that even when loans were initially regulated, they can be sold on to unregulated parties, such as Cerberus, at which point there are no guarantees about the behaviour of those companies and how customers will be treated.
George Kerevan
If my hon. Friend will forgive me, I will not, because I need to develop my case a little so that the Minister knows where I am going.
Cerberus has taken advantage of the situation. It is now the biggest purchaser of distressed real estate debt in Europe. It has acquired loans from such banks as Santander, RBS, Clydesdale, Yorkshire, Lloyds and banks in Italy and Scandinavia. It purchased £13.3 billion-worth of Northern Rock mortgages in 2015. Cerberus has also—we may come to this, and I will treat it in a very gentle fashion—purchased the Northern Ireland loan book of the National Asset Management Agency, which was set up by the Irish Government to dispose of property loans inherited from failed banks. We know that that is subject to serious fraud inquiry, and I will be very careful not to step into those legal areas.
The key question is how Cerberus makes its money. It claims to make a return for its investors in the range of 17% to 20% per annum, which is a staggering amount. The key way it makes its money is through tax avoidance. That is perfectly legal, but hardly the business model that the Treasury should be encouraging.
Cerberus manages distressed debt bought in the UK and Europe through a multiplicity of shell companies based largely in the Irish Republic. Those entities usually have the word “Promontoria” in their titles. They are, in turn, subsidiaries of other Cerberus Group companies registered in the Netherlands. Essentially, the Dutch companies lend money to their Irish subsidiaries at high interest rates to effect the asset purchases. That ensures that most of the cash generated from the purchased loans, or from liquidating distressed assets, flows back to the Netherlands in the form of transfer payments. According to an investigation by The Irish Times, six key Cerberus Promontoria holding companies in Ireland collectively paid a miserly €15,500 in tax in 2015.
The tax avoidance scheme means that Cerberus can offset the risk of purchasing so-called distressed loans. With the bulk of the financial risk removed, the true surplus profit for Cerberus comes from squeezing the distressed assets. That explains why Cerberus has been prepared to outbid rival US equity firms to acquire swathes of European distressed debt. My question to the Minister, and my key point, is this: has the Treasury made any calculation of the tax loss to the UK of the purchase by Cerberus of British so-called distressed assets, mortgages and properties? In particular, what corporation tax has Cerberus paid on the loan book purchased from United Kingdom Financial Investments Ltd in 2015—the Northern Rock portfolio?
Corri Wilson
Does my hon. Friend agree that trying to get answers from Cerberus Capital Management on this issue is like drawing blood from a stone? Attempts to communicate with it, by both myself and my constituents who have been impacted, have proven entirely fruitless, and calls for a meeting have fallen on deaf ears.
George Kerevan
My hon. Friend reveals something that many other Members, and people in other jurisdictions, have discovered: the company is unwilling to engage publically and is known to be highly secretive in its operations.
I want to continue on the issue of how Cerberus makes its cash. Cerberus is not a bank. Its business is not to make loans and earn interest. It is an investment fund that seeks a capital return, and that means it has to extract more value from the loan book than it paid to acquire it. Cerberus appoints local agents to review the loan books that it purchases, and it either squeezes more revenue by increasing lending rates or puts the client into liquidation in order to realise the value of the property.
Of course, it is theoretically open for SME clients to pay off their loan by refinancing with another lender. The problem is that Cerberus and its agents have no interest in letting that happen unless they can extract facility fees, which make such a transfer prohibitively expensive in most cases. Such fees often represent a significant percentage of the overall size of the original loan. For instance, the support group working with clients caught in the mis-selling of interest rate swaps by the Clydesdale and Yorkshire banks—clients transferred to Cerberus without their consent—reports that in many cases Cerberus or its agents refuse to accept full repayment of the loans. Instead they insist on adding backdated default interest and break clause costs, which were the subject of the original mis-selling.
I will now turn briefly, if you will indulge me, Mr Owen, to events in Northern Ireland. Again, I refer to the sale by NAMA—the Northern Ireland toxic bank agency—of property loans in the north of Ireland. That is subject to criminal investigation, and I will not go there, but I want to give some of the timings and the background of what happened.
The original bidder for the NAMA assets in Northern Ireland was a company called PIMCO, which is a California-based global investment company. PIMCO withdrew from that sale when it became aware of a £15 million private fee arrangement involving PIMCO’s US lawyers, Brown Rudnick, and two Irish individuals close to NAMA. After PIMCO withdrew, Cerberus had an unsolicited approach by agents acting on behalf of NAMA itself on 6 February 2014. Barely a week later, on 14 February 2014, Cerberus asked to be, and was, admitted to the bidding process for the NAMA loan book. Cerberus submitted a bid of £1.24 billion on 1 April 2014, a scant six weeks after entering the bidding process. The Cerberus bid was accepted on 3 April. Altogether, that is a breathtaking pace for a purchase of that magnitude—from entering into discussions on 6 February to the winning bid on 3 April.
We should note that at that point Cerberus had no investment history in Ireland, north or south. So why did the company feel confident enough to make such a large purchase—£1.24 billion of distressed loans in the north of Ireland? The answer is that Cerberus hired the firm of lawyers that had been employed by PIMCO, Brown Rudnick, which had previously been involved in the abortive sale. It did so on 24 March 2014, a mere week before Cerberus submitted its winning bid. Cerberus admitted to the Public Accounts Committee of the Irish Parliament that it paid Brown Rudnick £15 million for that one week’s work. Why was Cerberus willing to pay so much? As it admitted to the Irish Parliament, it was to gain detailed knowledge of the debts it was buying. However, NAMA had specifically banned prospective buyers from engaging directly with debtors or key stakeholders. Irish Deputies have accused Cerberus of paying Brown Rudnick so much—£15 million for one week’s work—precisely to obtain knowledge of debtors that it would not have been able to acquire through the formal bid process. Cerberus denies that—I put that on the record—but I leave it to others to assess why the company paid Brown Rudnick so much money for such a short amount of work.
That brings me to my next line of questioning to the Minister. Will he agree to conduct an inquiry into the NAMA sale of its assets in Northern Ireland once the legal proceedings have run their course? That way the issue can be aired, and if there was wrongdoing it can be found out, but if there was not everyone can be cleared. I make no allegations of illegality against Cerberus, but I do criticise its business methods and its growing stranglehold over so-called distressed assets in the UK and Europe. Its business model is bad for small companies and bad for the UK economy. In that context, I have a final question for the Minister: is there any substance to the persistent rumours that Cerberus has approached the Treasury with a view to buying debt from Her Majesty’s Revenue and Customs?
Ayrshire Growth Deal
Corri Wilson Excerpts(7 years, 3 months ago)
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Patricia Gibson
Indeed, it could. The importance of upskilling our population cannot be underestimated when we are talking about inclusive economic growth.
North Ayrshire schools have the third-highest rates of positive outcomes for school leavers in Scotland. By continuing to ensure that our transitions from school are robust and continue to develop, Ayrshire is well placed to meet changing economic challenges, and this will enable our communities to become more prosperous, ambitious and vibrant. The UK’s medicine industry is one of the leading manufacturing sectors, with exports worth more than £22 billion. The medicines manufacturing innovation centre is a national innovation centre for the life sciences and pharmaceutical industries, and north Ayrshire is shortlisted to host it. Infrastructure funding secured through the Ayrshire growth deal would go a long way to seeing it constructed in Ayrshire’s i3 investment park in Irvine before too long. Ayrshire has so much to offer. All Members, including the Minister, are invited to sample some of its delights, both in the gastronomic sense and in the context of business potential.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
I am lucky enough to have some fantastic drinks companies in my constituency, including the company that produces Hendrick’s gin, and Caledonian Bottlers and Ayr Brewing Company, as well as wonderful food suppliers such as We Hae Meat, Barwheys Dairy, Chocolati and Roundsquare Roastery, which roasts coffee beans. In fact, there are too many to mention. Does my hon. Friend agree that the growth deal would give a welcome and much-needed boost to Ayrshire, which would include the food and drink sector?
Patricia Gibson
Indeed. One of Ayrshire’s real selling points, and one of the reasons why so many tourists go there—apart from the fantastic scenery and the lovely people—is the provision of gastronomic delights, some of which my hon. Friend has just mentioned. However, I would not want the Minister to think that it was just about the alcohol. We have so much more to offer—although the alcohol does go down well too.
The event at which the gastronomic delights that the Minister, and indeed all Members, are invited to sample will take place on 8 February. It will be hosted by all four Ayrshire Members, and what it will show—if, indeed, it needs to be shown to those who have not yet been lucky enough to visit the county—is that Ayrshire is one of the most productive agricultural regions in the United Kingdom, which is well known for its outstanding and award-winning food and drink produce. It is home not just to a range of dairy, beef and seafood suppliers, but to world-renowned farmhouse cheese makers, ice cream producers, bakers, brewers, smokehouses, chocolatiers, and, of course, all the businesses that my hon. Friend mentioned.
Concentrix
Corri Wilson Excerpts(7 years, 6 months ago)
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Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
The Government have made it clear that the burden of austerity must be borne primarily by the most disadvantaged in our society. They made that clear through their repeated assaults on the welfare state, in their victimisation of the disabled, in their system of sanctions and in their attacks on benefits for our young people. They have made it clear that tax credits cost too much and are a drain on the public purse. They made it clear in their handling of the Concentrix contract that the suffering and hardship caused by this fiasco is not their concern. The Government did not seem to care about the indiscriminate targeting of single parents, the “fishing” letters, working parents being forced to give up their jobs, or families being forced out on to the streets as they lost their homes.
Strangely, none of those reasons was cited as a contributing factor to the withdrawal of the Concentrix contract. The statement given by the Financial Secretary to the Treasury explicitly said:
“Despite the best efforts of the staff manning the phones, Concentrix, with the high volume of calls in recent weeks, has not been providing the high levels of customer service that the public expect and which are required in its contract. HMRC has therefore given notice that this contract will not be renewed beyond its end date in May 2017.”—[Official Report, 14 September 2016; Vol. 614, c. 904.]
It seems that it was all about call handling. I am sure that I am not alone in having a list of constituents who are seriously out of pocket from waiting to speak to someone at Concentrix, but providing call waiting times as the main reason to ditch the contract is ludicrous.
This Government devised the model to target low-income families indiscriminately. The contract awarded to Concentrix was based on payment by results, creating a clear conflict of interest and encouraging bad practice. It was this Government, through HMRC, that supplied Concentrix with 1.5 million claimant records flagged as high risk—claimants like my constituent, Lauren. Lauren is the mother of two and a prime example of someone whom the system has failed, finding herself at the centre of a perfect storm. She suffers from anxiety and panic attacks and, despite having a line from her doctor, lost her job for being off ill. Her employer did not pay her statutory sick pay, and she was told that she would have to wait at least two weeks for employment support allowance. In a bizarre twist of fate, she found that both her working tax credits and her child tax credits had been stopped.
When Lauren first came to my office, she had no food and no money for gas or electricity. She had called Concentrix 48 times that day and had run out of credit on her phone. Rather than the state providing Lauren and her children with a safety net in their time of need, Concentrix had left them near destitute. Why? What was the key factor in determining that Lauren was one of the 1.5 million high-risk claimants? Someone had glanced at her file and decided that she could not possibly be working 16 hours a week and be paid so little. They had calculated her yearly income and then divided it, coming to the conclusion that she must have been working 15 hours a week, ignoring the fact that Lauren had spent a month out of work the year before—a change in circumstances of which she had diligently notified HMRC. A cursory glance was all it took to turn this young mother’s life upside down at a time when she was at her most vulnerable. My staff and I have been deeply affected by the number of cases in recent weeks in which people have been plunged into utter misery. We have felt sheer frustration at not being able to get a quick resolution. I doubt whether a single person on the Government Benches has ever experienced going without food.
We can stand here all day and trade stories like Lauren’s, and the Government can dish out platitudes and pat themselves on the back for acting so swiftly and decisively on the Concentrix contract, but that cannot detract from the fact that families have been driven further into debt and poverty by Concentrix’s actions. Families have been forced to beg for food by the actions of HMRC. Families are being forced to choose between heating and eating by this Government’s policies. It is time for the Government to accept their role in this fiasco and to step up and take some responsibility for the carnage they are causing in people’s lives. They must apologise for the hardship and suffering faced by people such as Lauren. They must look again at the ongoing policy of downsizing HMRC, leaving staff overworked and demoralised. They must introduce a freephone number for claimants and take on the costs of seeking mandatory reconsiderations. They must legislate to amend the compliance regime in respect of annual declarations and high risk renewals.
Earlier this month, leading figures from this Government stood up at the Conservative party conference right in front of a background that read:
“A country that works for everyone”.
Let us see them match their policy to that sentiment and step back from this destructive and failing drive to impose austerity on the many while allowing riches for the few. Those on the Government Benches should take a leaf out of the Scottish Government’s book and start treating people with fairness, dignity and respect.
Education (Student Support) (Amendment) Regulations 2015
Corri Wilson Excerpts(8 years, 3 months ago)
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Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to serve under your chairmanship, Mr Percy. Members may wonder why an SNP Member would speak in a debate about English education funding. This issue was brought to my attention by the wonderful Vonnie Sandlan of NUS Scotland only on Tuesday evening—that is why we came along today—which is entirely unacceptable and inappropriate. I pay tribute to Philip Whyte from NUS Scotland for providing me with excellent figures on exactly why this is pertinent to students in Scotland. I thank him very much for the detailed figures that he managed to put together in that very short length of time.
This process is unacceptable—the lack of consultation, the lack of due process and the lack of understanding of the measure’s consequences for students in Scotland, particularly the poorest students who, as Opposition Members said earlier, will be adversely affected. In Scotland we have made the positive decision not to introduce loans so that education in Scotland is free, people in the poorest areas of society can reach university and the poorest students do not get into astronomical debt. The NUS briefing quotes debts of up to £53,000 for a three-year course. Because the poorest students will now be receiving maintenance loans, rather than grants, they will come out with more debt than their richer colleagues, which is absolutely appalling.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
Does my hon. Friend agree that that is another example of a stark contrast? Scotland is progressive in achieving education that is accessible to all, based on the ability to learn, not the ability to pay, while England is taking a regressive approach, making it harder for the most disadvantaged to access further education.
Alison Thewliss
I absolutely agree. Debt and disadvantage are being compounded by the actions of this Government.
Welfare Reform and Work Bill (Seventh sitting)
Corri Wilson Excerpts(8 years, 6 months ago)
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Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
I beg to move amendment 45, in clause 11, page 13, line 10, leave out “one other child” and insert “two other children”.
This amendment would retain entitlement to child tax credit for families with three children.
The Chair
With this it will be convenient to discuss the following:
Amendment 46, in clause 11, page 13, line 10, leave out “one other child” and insert “three other children”.
This amendment would retain entitlement to child tax credit for families with four children.
Amendment 47, in clause 11, page 13, line 10, leave out “one other child” and insert “four other children”.
This amendment would retain entitlement to child tax credit for families with five children.
Amendment 48, in clause 11, page 13, line 10, leave out “one other child” and insert “five other children”.
This amendment would retain entitlement to child tax credit for families with six children.
Amendment 50, in clause 12, page 13, line 18, leave out subsections (1) to (4).
This amendment would retain entitlement to the child element of universal credit for families with more than two children.
Amendment 51, in clause 12, page 13, line 22, leave out “two” and insert “three”.
This amendment would retain entitlement to the child element of universal credit for families with three children.
Amendment 52, in clause 12, page 13, line 22, leave out “two” and insert “four”.
This amendment would retain entitlement to the child element of universal credit for families with four children.
Amendment 53, in clause 12, page 13, line 22, leave out “two” and insert “five”.
This amendment would retain entitlement to the child element of universal credit for families with five children.
Amendment 54, in clause 12, page 13, line 22, leave out “two” and insert “six”.
This amendment would retain entitlement to the child element of universal credit for families with six children.
New clause 5—Entitlement to housing benefit—
‘(1) Section 130A of the Social Security Contributions and Benefits Act 1992 (Appropriate maximum housing benefit), is amended as follows.
(2) After subsection (2) insert—
“(2A) Entitlement to housing benefit shall not be restricted in respect of a maximum number of children or qualifying young persons for whom a claimant is responsible.”’
To prevent the Secretary of State from limiting entitlement to housing benefit by taking into account only a certain number of children in a family.
New clause 6—Entitlement to housing costs under Universal Credit—
‘(1) Section 11 of the Welfare Reform Act 2012 (Housing costs), is amended as follows.
(2) After subsection (5) insert—
“(6) Entitlement to an amount under this section shall not be restricted in respect of a maximum number of children or qualifying young persons for whom a claimant is responsible.”’
To prevent the Secretary of State from limiting entitlement to housing costs under Universal Credit by taking into account only a certain number of children in a family.
I will allow a wide-ranging discussion on this group of amendments.
Corri Wilson
It is a pleasure to serve under your chairmanship once again, Mr Streeter, on another full day of scrutiny on a Bill that is about neither welfare nor work. It serves only to make some of the most vulnerable in society worse off. As I speak to amendment 45 and the other amendments in this group, I am going to raise some of the issues that I find most absurd about the Bill.
I was, as may be expected, disheartened to see the Committee reject amendment 44. It was, however, not a surprise that Government Members would oppose the plan to keep the family element of child tax credit for at least another five years. For that reason, the Scottish National party is looking to protect larger families through this series of amendments. We tabled each of the amendments because protection needs to be afforded to all families, large or small. Families include children, and the policies in the Bill will affect young children. That is why my party opposes the Bill in its entirety.
Damian Hinds
I think the hon. Lady’s point was about her child. I do not think she meant it as a direct question. [Interruption.] I am trying to explain that there will be a limit to the amount of financial support coming through the tax credit system according to the number of children, but there will be other elements still in place, and enhanced elements in relation to childcare. There will also be a further increase in the income tax personal allowance and a major structural reform in the labour market so that the tax credit system does not top up low wages. People will be paid properly for the job that they do via the national living wage, and we estimate that 65% of people who benefit from the national living wage will be women.
Corri Wilson
In tabling our amendments, the SNP seeks to lessen hardship in families. We want families, no matter how many children they have, to be able to access the child tax credit and child element of universal credit to allow children to have the best possible start. Life is complex and not quite as black and white as the Bill suggests. When my children were at school, I was a single parent and I worked full time. I wanted to work, but, without the tax credits, I could not have afforded to. Please do not cut this lifeline for people in a similar position today. We will press amendments 45 and 50 to a vote.
Question put, That the amendment be made.
Tax Credits (Working Families)
Corri Wilson Excerpts(8 years, 10 months ago)
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Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
Thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech today. Like others before me, I would like to thank the House staff for being incredibly helpful, with a huge thank you to Estelle, who was assigned the onerous task of stopping me getting lost in all the nooks and crannies. She has been an enormous help to me over the past few weeks.
I would not be here today were it not for the incredible support from family and friends and activists back home. It was a very much a team effort. As I often said, “This isn’t about me; it’s about us.” I pay tribute to my predecessor, Sandra Osborne, who served the constituency for 18 years. While we had some political differences, there was much we could agree on. I know that Sandra was dedicated to representing the constituency during her time in office. I thank Sandra for her work and commitment over the years and wish her well for the future.
My journey began as a civil servant. During this time, I saw at first hand how people struggled to interact with the benefits system and how successive Governments, of whatever hue, failed to work for the benefit of those less well off. What I have heard in the Chamber today leads me to believe that little has changed for these people—our constituents—in the years since I ceased to be a civil servant. It was my experiences in the civil service that led me into the third sector and to give something back to my community, with voluntary roles in education, health, youth work and criminal justice, to name but a few.
Thyroid cancer in 2010 forced me to re-evaluate my life. It reaffirmed my priorities and I realised that some of the small stuff just was not important. I took charge of my own destiny and started my own business. At the same time, no longer being constrained by working in the civil service I became more politically involved and was asked to stand in a local election, where I was successfully elected as a councillor to the Ayr East ward. This allowed me to address some of the barriers and red tape that people had constantly come up against.
I think the community representative is stronger in me than the politician. I am not here for glory or to be a media star in this pantomime that is called Government. In no other environment is the behaviour acted out here regarded as acceptable. I am here to represent the people in my constituency, who live lives far removed from this Westminster bubble. I see my role here as to work tirelessly for the people who voted for me, and for those who did not. I want the constituency to thrive and the people who live there to have the opportunity to reach their full potential. It is about having a future you choose rather one that is dictated by circumstances and damaging Government policies.
My constituency is famous for its rugged coast, challenging hills and walks, its history, and a thriving food and drinks industry, which includes a whisky distillery, a microbrewery, a chocolate factory, and of course the famous Ayrshire tatties. From bordering Dumfries and Galloway in the south, it goes past the fishing town of Girvan, towards the reinvigorated Turnberry golf resort, and up to the ancient place of Maybole, which received a charter from the Earl of Carrick in 1193. Across the water is the tiny island of Ailsa Craig where blue hone granite was quarried to make curling stones. Moving inland towards the east, we have the Doon valley, where there are many sites of scientific interest, including the Dark Sky park. Close by are New Cumnock and Cumnock, where Keir Hardie, the father of the Labour party, spent a large part of his life. He started up the Ayrshire Mining Union and was a journalist on the local paper. He spoke at Cumnock town hall, along with Emmeline Pankhurst. It was clear that she was in the area for a reason, because it is noted that in 1914 two suffragettes tried to bomb Burns Cottage and set fire to Ayr racecourse, causing thousand of pounds-worth of damage.
Fast forward to the present, and there are many beautiful, historic, picturesque villages such as Barr, Dailly, Kirkmichael, Straiton, Dalrymple, Drongan and Coylton, to name but a few. Many of these old mining villages have been left marred by abandoned open-cast mines, and many in the constituency are waiting with bated breath to see if tomorrow’s Budget is going to address this. The biggest town in the constituency is Ayr—a university town that hosts campuses for the University of the West of Scotland, Scotland’s Rural College, and Ayrshire College. It is also home to Ayr United.
In 1315, this historic burgh saw King Robert the Bruce convene a parliament in St John’s Tower, which is still there today, to decide the succession to the throne. It is an historic past. Our gory past also includes a ghostly piper at Culzean castle and the burning of Maggie Osborne, the last witch. Our famous baird is Robert Burns, who is celebrated the world over and who said that Ayr had
“honest men and bonnie lasses.”
And who am I to disagree?
It has been 35 years since I first started working with people in need. Let us not make it another 35 years before this House actually does something constructive for our poorest and most vulnerable.