Leaving the EU: Economic Impact of Proposed Deal

Drew Hendry Excerpts

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

I have been asked this question a couple of times, and the reality is that it is entirely hypothetical. To end up staying within the European Union would be to fly in the face of the result of the June 2016 referendum —the referendum had a higher turnout than any other electoral event in our country’s history—and this Government are going to respect the outcome of that referendum.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

This urgent question was aimed at the Prime Minister, so I can only assume that the Minister is undergoing an audition as the future leader of the Conservative party. On that basis, if he were Prime Minister, would he take cognisance of the analysis published by the London School of Economics that shows a 5.5% hit on GDP due to the incumbent’s plan, or would he, like her, simply ignore it?

[Mel Stride]

What we must do is to make sure that we conclude a good deal for our country; what we must do is to make sure that we avoid a no-deal scenario; and what we must do is to make sure that we respect the result of the June 2016 referendum. That is the mission of this country and of this Government. We are negotiating the final elements of that, and as, I hope, the Prime Minister comes back with changes to that deal in relation to the backstop, if we are to do the right thing and the best thing for the whole United Kingdom, we should support it.

Communities: Charities and Volunteers

Drew Hendry Excerpts

Wednesday 13th February 2019 Commons Chamber

[Martin Docherty-Hughes]

I will come on to answer that question at the end of my contribution. There is a big discussion to be had about the legislative process of the UK Government and a distinct understanding of what volunteering actually means, but I will come back to the hon. Gentleman’s point further on in the debate because he raises a very important point about the difference between volunteering and being told to do something. Volunteering is a free-will activity.

It is essential to understand that, as in England, Wales and Northern Ireland—although I do not see any Members from Northern Ireland in the Chamber—the vast majority of voluntary organisations are small, with no employees; they are founded, organised and able to connect communities solely through volunteers. As a sector, both charities and the many unincorporated voluntary organisations play a central role in the delivery of people-centred services and in ensuring that communities, through a whole host of avenues, are able to inform and shape our nations. We have already heard about how the sector informs participation and democracy.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend is making a good point about the role of voluntary organisations. In the past year, two new food banks have opened in Inverness to cope with the demand caused by the failures of universal credit. Those volunteers are working not just there, but in initiatives such as the hungry lunches project at Inverness Cathedral and MFR Cash for Kids, which provides help and advice. Does my hon. Friend agree that they are not just providing help for people, but actually saving them?

[Martin Docherty-Hughes]

I could not disagree, and that is replicated not just in Scotland, but across the whole UK.

Equitable Life

Drew Hendry Excerpts

Thursday 31st January 2019 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Harrow East (Bob Blackman) for setting the scene, and the hon. Member for Leeds North East (Fabian Hamilton), who is not in his place, for his help in bringing this matter to the House for consideration. It is always a pleasure to follow the hon. Member for Torbay (Kevin Foster). He usually sweeps up on the Government side of the Chamber and I often do the same on the Opposition side, but we often agree. And here we are again agreeing on an issue that he is interested in as the Member for Torbay, and that I am interested in as the Member for Strangford.

We all know the background to this story because we have spoken about it many times, but that does not take away one bit from the fact that, as the hon. Member for Harrow East said, it is as shocking today as it was back then. Like other hon. Members, I believe that we should honour the obligation and the pledge. The hon. Gentleman said that very clearly in his introduction. Well, I will tell the House something: I am also here to ask my Minister, of my Government, to honour that pledge. We look to the Minister for the satisfaction that our constituents need, and that is why each and every Member here is present today.



Let me gently break the issue down one more time, in the hope that the reality of the situation will provoke a greater scale of action some 20 years later. Let us remember that the Equitable Life victims are typically retired nurses, teachers, civil servants, factory workers, shop workers and small business owners who had no choice but to set up a personal pension. Before I was elected to this place in 2010, I was a Member of the Legislative Assembly in Northern Ireland, and one issue that came to my attention then was that of the Equitable Life policyholders, especially as there are dozens in my Strangford constituency. Unfortunately, some of them have passed on, so they never had the satisfaction of seeing this being addressed. I am here to uphold the policies of the people who are still living and to express some disquiet about those who have not had that satisfaction. With all our busyness as Assembly Members and MPs, I tried to address this matter along with many other Members, because this is not just Jim Shannon; this is everybody together—Members of all parties, on both sides of the Chamber—recognising that a wrong has to be righted.

There are people who have worked hard and worked away to secure their retirement, but to date almost 1 million pension savers have received less than a quarter—some 22%—of the losses they incurred when the Equitable Life Assurance Society nearly collapsed. Just before I was elected to this place in 2010, I was contacted by people in my constituency who had been stung by the Equitable Life scandal, and they all pointed to the fact that the parliamentary ombudsman clearly concluded in 2008 that the victims’ loss was directly attributable to a decade of serious, serial regulatory maladministration. In fact, just last year the Treasury admitted that it was culpable for the scandal. That is the story, so we look again to the Minister for his response.

In 2010, I can well remember the Government accepting that victims’ losses amounted to £4.3 billion, and I was disappointed at the allocation of £1.5 billion for compensation—a decision that was justified on the basis of the perilous state of the public finances, as other Members have mentioned. I was a member of the APPG that secured a small victory in 2010 with the passage of the Equitable Life (Payments) Act 2010 and the establishment of a scheme to pay limited compensation to qualifying Equitable Life members. But this payment was not enough, and the people who are missing out are the most vulnerable. The compensation amounted to only 22.4% of the relative losses of 895,000 traced pension savers. This was the sum left after compensating the people with annuities who had already retired. Ensuring that this large cohort of pension savers receive the unpaid balance of the full 100% of their relative losses would cost £2.6 billion. May I suggest that, when our finances are better, this small figure should be considered in order to bring the situation to a conclusion?

In the 2013 Budget, a cohort of 9,200 with-profits annuitants who took out contracts before 1992 received only £5,000 each, or £10,000 if they were eligible for pension credit. I stand today to support the call for these victims, who are the oldest and most vulnerable, to be afforded the same treatment as their younger counterparts, who bought their annuities later. We have a duty to deliver this. It would cost an estimated £100 million and could be funded today from the unspent £140 million in the Treasury’s coffers from the current scheme. If the money is there, let us do what is right. It seems like simple mathematics to me.

I am well known as someone who does not advocate borrowing like there is no tomorrow. I have a bit of Ulster Scots in me—every pound’s a prisoner. We are very careful in what we do, and that was instilled in me by my mum and dad.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Only the good book.

[Jim Shannon]

Absolutely. Joking aside, the mathematics are plain. I understand that it is my children and grandchildren who will be paying off our debts for their whole lives, and I am supportive of efforts to reduce the deficit, although this cannot be done at the expense of those who are vulnerable and ill. More focus should be put on the higher rate tax bracket, but that is a debate for another day.

We have brought down the deficit and are no longer in a position of a financial crisis. I thank the Government for that because they worked hard to make it happen, and we support them—well done. Therefore, there could well be a time when we can do what is right by every person affected by the maladministration.

A briefing provided to me has outlined the fact that Equitable Life victims were pushed to one side as a direct consequence of the timing of the 2008 financial crisis, which saw the UK’s banking corporations bailed out while hard-working and responsible pension savers took the hit. Now that the Government have sold their interest in Lloyds and are reducing their stake in RBS, it would be fitting to use a small portion of the money recouped to finally settle the acknowledged debt to Equitable Life victims. There is a clear cross-party consensus, from right hon. and hon. Members on both sides of the Chamber who have a real heart for their constituents—for Equitable Life members who have policies that need to be delivered. It is so important that we honour that pledge, but to be able to do this we must be able to retain the necessary information.

Like other Members, I ask the City Minister to guarantee that Her Majesty’s Treasury and other relevant agencies will retain indefinitely the necessary data—addresses, policy numbers and amounts paid—to make the further future repayments that we are calling for. If he were to provide this assurance on the Floor of the House, it would provide a great deal of comfort to Equitable Life victims that there is hope for the future. I say very gently to everyone here that our duty is to deliver for our constituents. We are in this House because they voted for us, and we are here today to put forward their case. It is a collective decision of all Members present to request that these things happen.

Time has beaten me but I must stress one last time, on behalf of the Democratic Unionist party, that these people are victims. We have outlined wrongdoings and maladministration, and have paid out a small amount of money that is due. If we are in the position to do more, we must ensure that we do. But, more importantly, we must send the message that we are actually willing to do that; that it what it is really all about.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Today we have heard a powerful and consistent voice across this Chamber to end this scandal. I pay tribute to the hon. Member for Harrow East (Bob Blackman) for bringing this debate to the House. Like all former councillors, he cut straight to the heart of the matter and how it affects people’s daily lives, and he did so with eloquence and controlled anger. He is right to be angry on behalf of the people who have been affected by this scandal. He laid out the history and pointed out that it is a Ponzi scheme, and he is right that it has been a web of greed and exploitation leading people to this point. I add my voice to his clamour for the Government to honour, in full, the support needed by the victims, and I back his three asks in getting past this situation.

The hon. Member for Leeds North East (Fabian Hamilton), who is not in his place, talked about the life-changing negative effects of this issue, and has been a constant champion of the victims. [Interruption.] I am glad that he returned in time to hear me say that. He mentioned the report that described a decade of regulatory failure. It gave a well-informed exposition of the issue, and mentioned two shocking statistics—that 100,000 cannot be traced and over 15,000 people have died. What a disgrace.

The right hon. Member for New Forest West (Sir Desmond Swayne) and the hon. Member for Torbay (Kevin Foster) asked how people having to save for their retirement can have confidence in the system when this matter has been allowed to drag on in this way and left in this state of affairs. They also, quite rightly, pointed out that this is creating a framework for hostility towards pension saving. The hon. Member for North Tyneside (Mary Glindon) underlined those points. The right hon. Member for Haltemprice and Howden (Mr Davis), who is no longer in his place, said that it was a failure of Government to have dealt only partly with this. He should know. He is an expert in failures of Government, so we should listen to him.

The hon. Member for Blackpool South (Gordon Marsden) said that there was a “Bleak House”-type history to this, and, as many others did subsequently, talked about the opportunity to get some of the money back on the RBS shares as a way of settling this scandal for people. That should be taken on board. The hon. Member for Strangford (Jim Shannon) talked about the choices that Governments make. As a DUP MP, he knows about the choices that this Government make in terms of spending their money. There are lessons to be learned by Government Front Benchers on this. The hon. Member for Erewash (Maggie Throup) also underlined some of the things that need to be done by the Government, so I hope that the ministerial earplugs were left behind before the Minister came into the Chamber today.

Let us be clear: the only thing equitable in this whole saga is the name “Equitable”; everything else about it has been rotten. This scandal has simply been allowed to continue beyond any reasonable timeframe. So as Equitable Life is finally wound up, the UK must now, belatedly, ensure that justice is delivered for those affected by this scandal. That means dealing with the issue of compensation, and that can only be done when the loss is fully quantified by negotiating the correct sums involved. The EMAG website states that the £1.5 billion covers only 20% of the losses incurred and argues that there should be Government action to pay full compensation. At the moment, there is a huge gap between what is required and what the Government have set aside in their £500 million fund. I ask the Minister: when will the compensation be fully agreed?

In June 2018, it was announced that Equitable Life would finally be shutting down, with a surprise £6,900-a-head windfall for the last remaining policyholders, while about 261,000 people will have a share in a £1.8 billion pay-out following the transfer of its business, Reliance Life, through unlocked capital. That is good news, perhaps, for those who have hung around, but the 800,000 former policyholders—the vast majority—who were shifted to other providers or encouraged to cash in and cut their losses will get nothing from that. EMAG says that policyholders who left Equitable Life will still remain £2.5 billion out of pocket. As Paul Braithwaite of EMAG said:

“Equitable has crafted an elegant termination strategy for the small number of remaining members, but it will be no benefit to the vast majority of victims. If the remaining members vote in favour of this deal, they are likely to come out ahead. But for every one of them, there are five who left the society who are much worse off.”

That vote, as we know, will go ahead in the coming months.

The UK Government must now finally deal with the outstanding injustices felt by these aggrieved policyholders. Those people saved throughout their lives. They were encouraged—told—to do so by successive Governments in this place. They lost the savings they had entrusted to those whom the Government, in turn, had entrusted to look after them. The Government have not only failed them—they have failed to treat this with the due urgency it requires, or, indeed, the compassion it requires. They failed to compensate them, and that must be put right now. In doing so, the Government must consider the deep impact that scandals such as Equitable Life have on public confidence in pension schemes, and how they could end up actually deterring those who should be saving for their future needs. I therefore say to the Minister: “Let us make a commitment. Let us hear that from you to end the scandal, to belatedly make amends, to make it right, to make it fair, and, with no irony intended, to make it equitable for all those who have suffered.”

--- Later in debate ---

[Bob Blackman]

With the leave of the House, I would like to thank the 10 right hon. and hon. Members who have spoken in the debate and the numerous other colleagues who made interventions. I regard the Minister as an honourable Friend, and I understand that he has to maintain a solid line from the Treasury and the Chancellor. That is clearly his job, but the 1 million people out there who are victims of this scandal will be disappointed with what my hon. Friend has had to say. The reality is that we have a debt of honour. I believe that we should repay that debt. It can be done over a period, not necessarily all at once, as we have said during the debate.

[Drew Hendry]

Will the hon. Gentleman give way?

[Bob Blackman (Harrow East) (Con)]

I am summing up, and I have to keep very tightly to time.

I am grateful for all the praise that has been heaped on me and the hon. Member for Leeds North East (Fabian Hamilton) for the campaign that we have continued to run. I would much rather that the Government honoured the commitment that we all made in 2010 to deliver full compensation for the victims of the scandal. During the debate, our membership of the all-party parliamentary group has increased yet again. We now have 238 members, and we have been joined by no less a figure than the right hon. Member for Doncaster North (Edward Miliband), the former leader of the Labour party.

If the Government do not wake up to the fact that, on a cross-Bench basis, we are determined to get justice for Equitable Life policyholders, they may find that if they do not do the right thing it will be forced upon them.

Question put and agreed to.

Resolved,

That this House welcomes the Government’s acceptance in full of the Parliamentary Ombudsman’s findings in relation to its maladministration with regard to Equitable Life; notes that the Parliamentary Ombudsman recommended that policy holders should be put back in the position they would have been in had maladministration not occurred; further notes that the overwhelming majority of victims have only received partial compensation compared to the confirmed losses directly attributed to regulatory failures; and calls on the Government to make a commitment to provide full compensation to victims of the scandal with the end of austerity now in sight.

Long-term Capital for Business

Drew Hendry Excerpts

Tuesday 15th January 2019 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Stirling (Stephen Kerr) on securing this important debate. I was not aware that he was unwell over Christmas, but I am delighted to see him in the pink of health.

It is a rare treat to be in a debate with two Tories and a Democratic Unionist party Member where I have to pick my differences in their speeches; they made many points that I agree with. In particular, the hon. Member for Stirling discussed productivity. It has long been an issue that I have talked about. It has been holding back business and people for far too long, and I agree with his sentiment. As a result of paying more in taxation, we can invest more in our services—that is the consequence of getting that kind of result in productivity.

I also agree about the lack of focus across the nations of the UK. It does feel like an English Treasury; we make that point regularly. It is also a fact that the south-east gains far more traction than any other part of the UK, including the regions of England, Northern Ireland and Wales. There was a lot to agree with in that regard as well.

It is particularly poignant to have this debate today, as the biggest threat to business access to finance comes from Brexit. Government Members, particularly those in favour of Brexit, would like that to be ignored in this debate, but I do not think it can be. Brexit is already reducing the number of customers, the size of workforces, and the level of confidence. Instead of building our economy, investors are voting with their wallets by pulling nearly £20.6 billion from UK equity funds since the vote in 2016, according to EPFR.

[Luke Graham]

The hon. Gentleman makes a point about Brexit being a threat. Does he agree with a developer in Alloa in my constituency that the biggest threat to raising finances is not Brexit but the threat of a second independence referendum?

[Drew Hendry]

It will come as no surprise to the hon. Gentleman that I do not agree with that. He has gone from making a sterling point about the English Treasury to saying that independence is somehow a threat. I do not think so; I think it is a marvellous opportunity. As he has raised the issue, I will say that it has been brought into sharp focus in this place over recent months.

As Marian Bell of Alpha Economics pointed out, businesses that were told to prepare for a no-deal Brexit have relocated their operations and those decisions may not be reversed, even in the event of the best possible economic outcome—even if that is remaining in the EU. As Brexit inches closer, the UK services sector has recorded the slowest sales growth in two years, according to the British Chambers of Commerce, whose survey of 6,000 British firms shows that labour shortages and price pressures persist.

Scotland is a world leader in patient long-term capital, but Brexit risks lenders following the example of a well-known hon. Member, the hon. Member for North East Somerset (Mr Rees-Mogg), in moving business to Dublin or the continent. We are being Mogged over Brexit.

In the face of austerity, we have to make different decisions to support business. The Scottish Government are introducing the Scottish national investment bank, which will provide patient long-term capital to support Scotland’s firms. In contrast, as we have heard, the UK Green Investment Bank, which was privatised by the Government, is now bereft of its UK focus.

The aim is for the Scottish national investment bank to invest in businesses and communities by 2020, subject to regulatory approval. It is backed by our commitment of at least £2 billion of investment in the first 10 years, which paves the way for a step change in innovative and inclusive growth.

We also welcome the plan for a Scottish stock exchange in the second quarter of 2019, with a focus firmly on social and environmental companies that are worth between £50 million and £100 million. The plan has now secured a partnership agreement with the major European stock market operator Euronext, meaning that the first Scottish stock exchange will operate since the closure of the trading floor in Glasgow in 1973.

That is all being done in the shadow of Brexit, which was a vehicle aroused solely to calm Tory infighting. As chaos reigns on the Conservative Benches, there is as much chance of success for business as for the economy of our people, who will ultimately pay the price in the long term.

[Mr Charles Walker (in the Chair)]

I call Marion Fellows to speak for the Scottish National party for up to five minutes.

2019 Loan Charge

Drew Hendry Excerpts

Tuesday 20th November 2018 Westminster Hall

[Sir Edward Davey]

It was a pleasure to allow that intervention. I have no objection to the way in which the wrong is righted, as long as it is righted properly. If we stick to the principle of the rule of law, as I said in my intervention on the hon. Gentleman, ending retrospection in this tax change means that any charge prior to Royal Assent of the Finance (No. 2) Act 2017 must end. There can be no charges before Royal Assent of that Act; otherwise we are in the area of retrospection.

Like other colleagues, I have had constituents contacting me. Sixteen have contacted me directly, and in my experience that means there are many more out there who have not contacted me. I will read from just one, from Mr Garry Taylor, who talks about the “devastating consequences” that will destroy the finances of “me and my family”. I do not know about other colleagues, but I have had people almost in tears in my surgery over a tax matter, which has never happened before in 20 years.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Does the right hon. Gentleman agree that people are living in genuine fear of bankruptcy and losing their homes, and it is not acceptable that the Government have handled the matter in that way?

[Sir Edward Davey]

I could not agree more. I have never seen people so distressed and distraught by one particular measure, which appears to target pain on just a few people. Those people work hard in our NHS, our industry, our schools and our civil service. Why do the Government want to target so much pain on so relatively few people? The charges involved are massive: hundreds of thousands of pounds. It is completely iniquitous. I believe the Minister knows that and I hope he will therefore put it right. Everyone in this House is clearly against tax scams; we want to close them down, but as other hon. and right hon. Gentlemen have said, people were advised by professional accountants and HMRC appeared to be happy. It was notified of the tax schemes and did nothing. Yes, let us crack down on tax avoidance, but let us not go after victims, the people simply trying to earn a living for themselves and their families.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

I appreciate being called in this debate, Mr Walker, and I thank the hon. Member for Wycombe (Mr Baker) for securing it.

In previous years, the SNP has raised concerns about the implementation of IR35 legislation, and during discussions on the Finance Bill I suggested a review into the way that it was being implemented. It was not necessarily that the legislation was a bad idea, but the way it was implemented did not work for people because they could not navigate the system appropriately. I raised that issue in 2016, just as my colleagues did previously.

I have been approached by many constituents about the loan charge. Some were recommended to join these schemes by the companies they worked for, which wanted them to move on and become contractors. One person told me that a presentation was given in the company’s boardroom by another company running one of the schemes. Individuals were encouraged to go to that presentation and transfer into one of the schemes rather than being employees of the company. That is a real concern.

I am concerned about the way that this measure is being implemented. I have a constituent who filled in his details before 30 September, as he was requested to do, but has not yet received a settlement figure from HMRC. Another constituent in the same boat has been told that they will receive a settlement figure by 5 April next year, although the Treasury promised that those figures would arrive by 30 November this year. People are being told that the settlement figures will not be calculated until 5 April, but they have also been told that they will need a payment plan in place by then in order to be compliant. If that settlement figure is not calculated until April and the payment plan will be required immediately, people do not have enough time to make the decisions they need to make on any settlement figure.

Clarity about timelines would be hugely appreciated. This has been a moveable feast, and the Treasury and HMRC have regularly changed the dates and times by which people have been required to submit information. It is important to have clarity so that people know when they need to have a payment plan in place.

It is important that people pay the tax they owe. At least one of my constituents is disputing the calculation made by HMRC. They have not been given a breakdown of the calculation and cannot work out why HMRC has come to that figure. There needs to be transparency so that people understand why HMRC thinks they owe what it says they owe, and they can then make rational and reasonable decisions about payment plans.

I have been clear with any constituent who has approached me, and with HMRC, that we need a mutually beneficial payment arrangement. We cannot have people being made bankrupt as a result of these payments. The change from 12 months to a five-year period for repayments is welcome, but if someone is being asked to pay back hundreds of thousands of pounds when they are existing on jobseeker’s allowance, it is not possible to pay that money back over five years.

I am also concerned about individuals who are being asked to sell or move out of their family home and have it repossessed. That causes problems for local councils as well as for the family involved, and just passes the buck. If HMRC wants to recoup the money, it would be sensible to do that in a way that means people can pay it, rather than having to be made bankrupt. We need give and take by HMRC, as well as transparency and clarity about dates.

[Drew Hendry]

Does my hon. Friend agree that one of the biggest problems facing people in this position is the uncertainty of not knowing how they will cope with paying these large amounts back over a period of time, when no assistance or guidance has been provided as to how they might make those payments?

[Kirsty Blackman]

As I said, this has been an incredibly moveble feast and HMRC keeps moving the goalposts. It is important to have clarity about the future timeline. Constituents need to understand what they will need to pay back, the timescale involved, and why they are being asked to pay back the amount requested.

Finance (No. 3) Bill

Drew Hendry Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[Colin Clark]

I do not know and I really cannot understand it. Now that the Scottish Government are getting tax independence, one would think that they would want to grow the entire economy, instead of damaging parts of it. This should be a salient lesson that tax divergence is damaging; making your country uncompetitive will hurt services. It will cost higher rate taxpayers in Scotland £2,000 to £3,000 more per £100,000 of income. That means that a consultant in Newcastle may not choose to come to Aberdeen Royal Infirmary, which supports my constituency, and that would be very damaging for the public services.

The Finance Bill stimulates the economy; lower taxes will grow the economy. The hon. Member for Aberdeen North (Kirsty Blackman) is no longer in her seat, but she mentioned a transferable tax history, which is estimated to stimulate the oil and gas industry by £30 billion of investment. I consider that an enormous figure, not a small change. Fiscal stability will benefit the oil and gas industry, and we are grateful to the Chancellor that that is still the target of this Government. Slashing business rates, as the Chancellor has promised, will benefit businesses. However, of course, slashing business rates is not going to happen in Scotland, because that is a devolved matter; the north-east of Scotland got half of the increase in tax, which is damaging businesses in my constituency and other north-east constituencies. Buildings in the north-east of Scotland are being demolished because empty building rates—

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Am I hearing the hon. Gentleman right? Is he completely ignoring the some 100,000 small businesses that have benefited from paying no business rates at all because of the Scottish Government’s small business bonus?

[Colin Clark]

I remind the hon. Gentleman that businesses in the north-east of Scotland—large employers there—are considering knocking down warehouses and large offices, which are not redundant, as they are still fresh and good buildings. That is happening in the north-east of Scotland. One such building in my constituency, which had 2,500 office workers, may well be lost very soon.

[Drew Hendry]

Evidence it—

[Colin Clark]

I shall carry on speaking to you, Mr Deputy Speaker, rather than to the hon. Gentleman, who speaks from a sedentary position. I would welcome the Chancellor’s business rates commitments—

[Drew Hendry]

rose—

[Colin Clark]

I will give way, as the hon. Gentleman has got back up again.

[Drew Hendry]

I am keen to see how the hon. Gentleman provides evidence to support these accusations that people are knocking down buildings and fleeing their country.

[Colin Clark]

I could recommend to the hon. Gentleman that he reads the famous The Press and Journal, which I was in just under a year ago, standing in front of a building that had just been knocked down and which used to house 500 people in an office—I shall send him a signed copy of it. Buildings are being demolished in the north-east of Scotland.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I was accused earlier by the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) of being a bit miserable in my Budget speech—of failing to point out the good things in the Budget. Well, it is pretty easy to be miserable with a miserable Budget, but I did welcome the freeze on whisky duty and the support for electric vehicles, among other things. There were slim pickings, but I did my best to be positive wherever I possibly could. But how rich is it to hear that accusation from those on the Government Benches? They would rather turn to stone than welcome the fact that Scotland’s crime level is at a 42-year low; welcome the best accident and emergency performance in the UK; or welcome that 100,000 small and medium-sized businesses pay no business rates at all, thanks to the Scottish Government’s small business bonus. And what about the 70% of people in Scotland who are now paying less tax, or the lowest-paid people who are paying less tax? Or our record social house building programme, with council houses being put in place to fill the Government’s deficit?

It is clear for all to see that austerity lives on for those who can least afford it. In delivering this Bill, the Government continue their attacks on the poorest in our society. In my response to the Budget, I recounted many ways in which the Government are failing to deliver for Scotland—for our workers, industry and people. My hon. Friend the Member for Aberdeen North (Kirsty Blackman) said earlier that the Chancellor admitted that the Government would need to look at “a different approach” on the economy; if and when the Prime Minister fails to secure a deal with the European Union, this Bill will not be worth the vellum it is printed on.

After a decade, Tory austerity is far from over. Scotland’s block grant for 2019-20 is down £2 billion in real terms compared with 2010-2011. The paltry £2.7 billion for universal credit does nothing for people currently struggling and goes nowhere near reversing the years and billions of pounds of social security cuts that people have endured. After five and a half years of this failed experiment in the highlands, after seeing the misery that people have endured on universal credit in Inverness and the surrounding area, and after having ignored not just me but all the agencies, including the Government’s own support agencies, this Government should hang their heads in shame that they are not doing something to help people instead of continuing to punish them in this way.

In contrast, the Scottish Government are helping those on low and modest incomes. This Tory Budget gives tax cuts to the richest. The Scottish Government, in the face of austerity, are building an economy of the future, with measures to unlock innovation and productivity. They do that while the Government in Westminster recklessly pursue, at the very best, a bad Brexit for the nations of the UK—actually it is looking more like a disaster that they are pursuing. The Tories should accept that the only way to minimise the damage to jobs, the economy and business is to stay in the customs union and the single market.

As my hon. Friend the Member for Aberdeen North asked earlier, where is the oil and gas sector deal? After £350 billion in tax revenues, the industry deserves better; it needs the sector deal. The news of yet another nuclear failure with the withdrawal of Toshiba underlines the fix that this Government are in over their Paris climate change commitments. Having betrayed Peterhead and having pulled the rug from under the industry three years ago, incidentally wasting £100 million in the process, this Government must now make a proper serious commitment to carbon capture and storage.

[David Duguid (Banff and Buchan) (Con)]

I am sure the hon. Gentleman will join me in welcoming the commitment of the Department for Business, Energy and Industrial Strategy not only in at least considering the sector deal for oil and gas, but, on the subject of carbon capture and storage, in looking at a project in St Fergus, just off the coast of Peterhead in my constituency. It looks like being part of a Scotland-wide cluster, because the system is already connected by a pipeline from St Fergus to Grangemouth.

[Drew Hendry]

I thank the hon. Gentleman for his intervention. Indeed, I do welcome the work at St Fergus. It perhaps would have been proper to point out that the Scottish Government are also driving that St Fergus development. It perhaps also would have been appropriate to point out that the funding that has been put forward by BEIS is one tenth of what was removed three years ago. Three years after the point at which it could have taken advantage of world-leading cutting-edge technology, it thinks it is good enough to put in a tenth of the funds and hope that that lip service will pay dividends. It just will not wash.

[Stephen Kerr]

rose—

[Drew Hendry]

I will give way to the hon. Gentleman later.

This Government also continue to fail the young. [Interruption.] Thank you for that direction, Mr Speaker. I will do my best to keep the pace going.

This Government also continue to fail young people. They could have ended wage discrimination, but they chose instead to keep punishing them. Those young people deserve the same pay for the same work and they deserve a real living wage. As my colleagues pointed out earlier, there is nothing—nothing—for the women born in the 1950s who were short-changed on their pension entitlements. It is no wonder that the argument for an independent Scotland has never been stronger. The Tories’ obsessions make the case for us in Scotland.

I do want to refer to the hon. Member for Stirling (Stephen Kerr), because we rarely agree on anything, but the one thing that we do agree on tonight is fixed odds betting terminals. Delaying the reduction of stakes in fixed odds betting terminals is a disgrace; it will only take more money from vulnerable addicts and put it in the pockets of the bookies and those with vested interests. It is a disgrace that is felt right across this House. Research from Landman Economics has shown that the average fixed odds betting terminal user loses £192 a month, with the average user of a machine capped at £2 a spin losing just £22 by comparison. There is no justification for delaying this action.

It is also clear, from this very debate, how the Tories want to muddy the waters on tax avoidance, as they have on the IR35 changes. If they are not pointing the way to tax avoidance, even when they look to clamp down on it they miss the mark, as we can see with the implementation of the IR35 changes. The loopholes absolutely need to be closed. However, the employers and agencies benefiting most from these schemes have, for the most part, got away with it. With HMRC implementing stringent measures on many who were duped, many are now fearful of being forced to repay immediately with no provisions that reasonable time will be allowed and a payment scheme be made available. Folk are genuinely worried about becoming bankrupt.

Austerity lives on for those who can afford it least. The Prime Minister and the Chancellor spin the line that austerity has ended, or is ending; well, maybe, depending on who you hear it from. But everyone knows, even their rare supporters, dwindling though they are, that that is just a toom tabard of a statement—another Government rebranding exercise. My constituents are making the choice between putting food on their tables and heating their homes. They have had enough of it. Those on universal credit with spiralling debt because they do not know when the next payment is coming, or whether, if it does, it will be correct, have had enough of it.

Universal credit impacts on other communities. After five and a half years, we know the truth. As the OBR Budget document details, the changes to the work allowance reverse only half of the cut that was made to it in the 2015 Budget. Are we seriously expected to cheer this Government for putting back in less than half of what they removed, after years of punishing those who could afford it least? Millions of people have been dragged through this system already, with misery, heartache and poverty—and what have they been told? They have been told that the system works—that they are all wrong—but there are now voices joining theirs.

Even in the Minister’s small concessions, he is admitting this Government’s failure. They should be utterly ashamed of what they have inflicted on people. If Ministers had a shred of decency, they would come to the Dispatch Box and apologise to my constituents and to the far too many others who have had to endure the roll-out of universal credit. Let us not forget that these people will not be benefiting from transitional funding announced in the Budget; instead they are left trying to piece together their lives following the impact on their families, sometimes shattered by this move. They are left wondering how on earth a Government supposed to provide them with a safety net to which they and their families have contributed are left counting pennies while those who have the most still avoid paying their share.

For those to be transitioned to universal credit, £1 billion for the transition does not even touch the sides of what is needed. If this Government were serious about mitigating the impacts, they would migrate people to universal credit without expecting them to process a new application. People who need universal credit support simply do not have anything spare to get them through the transition weeks, be it two weeks or five weeks.

Then there is the new funding for universal support to be announced. I will welcome that; any support is better than none. But again it is more fudge, because, as anyone who has any idea about this mess knows, most of the issues people experience with universal credit are long-running and ongoing well after the initial application. So where is the fund for ongoing universal support? While that was omitted from this Bill and by this Government’s PR machine, the chief executive of Citizen’s Advice made it very clear in her letter to the Work and Pensions Committee when she said:

“Our current agreement does not include funding to provide support to people once their claim is complete.”

Of course, I hear the Government’s other rhetoric that for most people the process is simple and problem free.

I do not want to see any more people in tears in my constituency office. I do not want to see any more families struggling to get along. I do not want to see any more families going to food banks and having to prostrate themselves to get what is essentially a handout in order to keep them going when they should be properly protected under a decent social security system that any forward-thinking country would have. Perhaps that country should indeed be an independent Scotland.

--- Later in debate ---

[Bill Grant]

I take the hon. Lady’s point, but I understand that the saving she refers to is very modest to the tune of £24 a year for some, which equates to less than 50p a week. It is a step in the right direction, but a very small step and hardly a progressive tax system. As one whose mother cleaned other people’s houses and made beds at Butlin’s on Saturdays, I am not minded to accept lectures on poverty from Scottish National party Members.

I disagree with the suggestion that the Budget failed to provide funding for a social security system that treats people with dignity and respect. The Chancellor was listening. The entire ethos of the evidence-based and empowering system of universal credit is that work should always pay, and that work brings with it dignity and respect. No one can disagree with that. The dignity of work is important to all constituents in all parts of the United Kingdom.

The Bill will facilitate an additional £1.7 billion per annum being invested to increase work allowances by £1,000 from April 2019. I hear Opposition Members cry “More!” Everyone’s an Oliver—they want more, more. That “more” has to be earned and this Government have an economy that works and is earning more.

[Drew Hendry]

Come to Inverness.

[Bill Grant]

I am happy to join you.

Some 2.4 million households will keep an extra £630 of income per annum, and I am sure that those who need support will continue to receive it. It is no longer a wicked system where if someone wants to work beyond the 16 hours, they lose money.

Banking Sector Failures

Drew Hendry Excerpts

Thursday 12th July 2018 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the hon. Member for East Lothian (Martin Whitfield) and the hon. Member for Stirling (Stephen Kerr) on securing this important debate. I am delighted to speak for the Scottish National party and I share almost all the concerns that have been raised so far. I say almost, because I have a few more direct criticisms of the UK Government and what they could have done and should do in the future, but I will come to those in due course.

What I think we would find in common among those who have looked into the practices of the rogue banking sector is the palpable anger about the treatment of people who have found themselves in grossly unfair situations. The hon. Member for East Lothian started off by talking about the drive for high standards in the industry; there is a drive among some people who are committed to achieving that, but that drive must be reflected among those in positions of power. He pointed out the absolute failure to support small businesses, particularly given the percentage—99.9%—of businesses and the £1.8 trillion figure that he outlined. I do not think it is often explained to a wider audience just how big and important the sector is, and it is vital across the nations of the UK.

The hon. Gentleman also made the point that trust in the banking sector has never been lower, and unfortunately I think that is the case. I say unfortunately, because I want to talk about the good parts of banking later on, but he is absolutely right. There is such a wide range of factors involved in the situation, and of course in the Scottish context the issue is quite disproportionate. I agree with his comment on that.

[Bob Stewart]

We are talking of trust. We are talking of despair—utter despair—in people. The despair with the banking sector is so great that that despair will be translated towards politicians unless we sort this out and help entrepreneurs. They have a right to expect us, as politicians, to sort this. Where else can they go but to us?

[Drew Hendry]

In typical passionate fashion, the hon. Gentleman makes a strong point. He is right that more politicians should be angry about this, and not just the hon. Members in this room or in the debates we have had recently in the Chamber. This is a critical matter that many more hon. Members should be focused on and concerned about. The hon. Member for East Lothian talked about the Government’s role, and I will come on to agree with some of the things he said and add my own comments. The disgrace of the Global Restructuring Group, which has been well rehearsed many times, is a vicious application of sharp practice by the GRG—although there were others, of course, and it was not alone in that.

The hon. Gentleman talked eloquently about the lost businesses, marriages and homes, and the people who have been stripped of their dignity and, in some cases, even pushed toward suicide. He made some positive proposals for the legal rights of SMEs, which were repeated by other hon. Members. He also said, tellingly—this is important for people—that the victims are not going away. This is not going to disappear just because the banks want it to; it will continue to be brought up.

The hon. Member for Stirling talked about entrepreneurs, and he is right. Entrepreneurs are important around the nations of the UK as those who take the risks—that is what it means. Anybody who has been in business knows that entrepreneurs often have to take risks that go beyond the norm, putting houses and property on the line, and in certain circumstances putting their family on the line—as we have heard in the context of the unfortunate outcomes—to take opportunities in business. He talked about fostering energy and ambition, which is exactly what banking should do. In some cases it does, and I will come back to some of that later, but I agree that it has proved to be frighteningly easy to erase businesses through technical breaches. That has been one of the biggest complaints.

The hon. Gentleman highlighted the sneaky practice of banks using insolvency practitioners to do their dirty work. He spoke about RBS GRG’s asset stripping and loading up on the profits from that, as well as its brutal application by RBS and other banks. We can all pinpoint a constituent who has been hammered by these things, and the hon. Gentleman spoke eloquently about his constituent John’s business being stolen from him. A common theme from all the contributions was the health effects on such people, including stress, anxiety and even heart problems, with families being almost torn apart. Similar to the line about victims not going away—I mean that in a positive way—he talked about the human cost, and he asked the Minister directly for clear action to ensure that justice is served. I will come back with some asks for the Minister as well.

The hon. Member for Beckenham (Bob Stewart) spoke passionately, and rightly so. I do not say that in a glib way; he is right to be passionate and outspoken. He talked about people being terrorised by GRG and Dunbar bank, about people’s life’s work being taken away from them and the fact that there is one-way loyalty. Isn’t that true? In all of the cases we have heard about, that has been the situation—it has been a one-way street. Some of the banks have been predatory; there is no other way to put it.

The hon. Gentleman also talked about small and medium-sized enterprises being unable to match the legal armies of the banks. That is a vital observation, because after the banks carried out this sharp practice—we do not know, but some may still be doing some of this without it coming to light—there was no real recourse. People do not have the ability to tackle it. By the nature of the problem, they do not have the money to access the rights for action. He pointed out that the Financial Ombudsman Service, as it sits, is not fit for purpose for SMEs. The hon. Gentleman said that small business is the life and blood of his nation, and I think that is even more acute in Scotland, where small businesses are even more central to the economy, as was mentioned.

I pay tribute to the hon. Member for Thirsk and Malton (Kevin Hollinrake) for his work. He made a point that I want to stress: banks provide vital services for businesses. When we criticise the people working in the banks, we talk about a fairly small number of key decision makers. We must appreciate that an army of people work in the banks who are good, hard-working, dedicated and honest people of great integrity who help people in their communities and in the wider business sector. I know that there is agreement around the room on that, but it is important to underline it.

As I said, banks provide vital services. When banks operate in the way they should, it is fantastic. When they operate in the ways we have seen, particularly with some of the decisions made at a corporate level over the past few years, it is absolutely destructive and no good at all.

[Kevin Hollinrake]

The hon. Gentleman makes an excellent point about people working in those banks who have integrity. Through our work on the all-party parliamentary group, we met people at a senior level who were appalled at what happened within GRG. The second phase of the FCA investigation should now take place, to name individuals and find out who was ultimately responsible. However, it is not apparent that a thorough investigation and questioning of such people, who could provide evidence on exactly what happened, is taking place. It needs be shown that it is.

--- Later in debate ---

[Drew Hendry]

The hon. Gentleman has highlighted that fact, and I think we all agree with him.

The other comments made by the hon. Gentleman are worthy of highlighting. He talked about the banks being too big to fail, sue or regulate; well, isn’t that the case? We have seen that over recent years. He talked about how reports can suddenly change from saying that there are widespread problems to there being only isolated examples. How come? He also talked about the FCA allowing banks to undertake internal inquiries and compensation schemes, which, again, seems completely incompatible with its role. The hon. Gentleman also said that regulators should be fearless defenders, not complicit in allowing these practices to happen. I thank him for his comments.

[Martin Whitfield]

I take the opportunity to pay tribute to my immediate predecessor, who worked with the APPG on the forerunner to this report. I am sure that this is the case, but does the Scottish National party agree on the need for a financial transactions tribunal along the lines of employment tribunals, which carry so much public confidence?

[Drew Hendry]

There is a need to tackle that. I will come on to exactly what my party proposes, which I think the hon. Gentleman will find favour with.

I do not want to lose the words of the hon. Member for Thirsk and Malton, who said—this is not a direct quote; I hope he will forgive me—that Ministers do not require the good will of the banks to hold them to account. That is important. Finally, he talked about the major banks being so large and complex that it seems impossible to rein them in. He mentioned a solution being a financial services tribunal, so that plaintiffs do not face a cost, win or lose. We have to consider that.

I understand that there is a bit of time left, so if it finds favour with hon. Members I will make a few more comments. I wanted to talk about all these issues, but I will start with the impact of some of the decisions made by the banks on local communities. People in rural areas have been hit by the closure of their banking services. My constituency alone has seen branches close in Inverness, Nairn, Aviemore and Grantown-on-Spey.

I was sent an appeal by the Badenoch and Strathspey Disability Access Panel. Its members felt so strongly that they got together to send their concerns. They wanted to communicate their concerns to Members about the adverse impact of bank closures on rural communities generally, and on the disabled members of those communities. They said:

“Recently the Royal Bank has closed its branches in Aviemore and Grantown, and the Bank of Scotland has closed its branch in Kingussie.”

For those unfamiliar with the geography of my constituency, those are quite disparate communities. Closing the branch in Grantown means that somebody wanting to access RBS services now has a round trip of more than an hour—in good weather—to Inverness to do so. They also say:

“Like the community in general, disabled people are very dissatisfied by the use of Mobile Banks, which offer only limited facilities for a few hours in the week. This causes problems of privacy, queuing (whatever the weather) and security, e.g. sums of money can build up between the visits of the bank and people are rightly worried about the safe keeping of them.”

They are worried about being seen in open queues as they go to mobile banks with piles of cash on them. Cash businesses often have to operate in rural economies. They also say:

“Disabled people have particular worries. The banks claim that Internet banking is a viable alternative, but many disabled people have no access to the internet. Furthermore, they find the option of having to undertake a return journey of between 20 and 30 miles (or more) to visit a proper bank distressing, because it either means depending on someone for transport or trying to use public transport, which is far from frequent in a rural community and which can be challenging to access for a person with a disability.

Finally, the banks have failed in their duty of keeping customers informed. How accessible are the sites chosen for the vans, how accessible is entry into the van, what facilities for the disabled are available in the van, e.g. for deaf or visually impaired people, and how well trained are the staff in dealing with the needs of disabled people? It may be that the banks have made adequate provision, but there has been no attempt to communicate this to disabled customers, who may be deterred from making use of the mobile bank. Incidentally, there has been an occasion when the mobile bank did not appear because of mechanical failure, but there was no system in place for the public to know what was happening.”

They were waiting in the cold for something that would turn up, without communication.

The disability access panel said of one customer that she uses a stick and walking from her house to the bank is a “big undertaking”. No seats are provided for people who are waiting,

“so she had to stand outside, which was difficult. The steps were very high—they did help her up the stairs but she doesn’t think she could do this every week. She asked for bank statements and was told they couldn’t do it…she would have to go to Inverness.”

They could only offer her the balance, just like at an ATM. The panel continues:

“She gave them feedback but they only noted it down on a bit of paper, she didn’t feel they took her complaint seriously.”

All I have had from RBS in response is that it has forwarded some information about the current situation. It is looking for a coach builder; it has not found one yet, but in the short term it is using a system called MyHailo, so customers will have a fob that they can press to get a member of staff from the van to come out. That answers very few of the criticisms that were made.

It is a disgrace that, despite being a 70% shareholder in the bank, the Government have failed to use their influence to represent Scottish communities and reverse devastating branch closures. The public bailed out the Royal Bank of Scotland; it cannot repay communities by simply abandoning them. It is a dereliction of duty that the UK Government did not make stronger representations to RBS about the impact that the closures will have on communities across Scotland and the other nations of the UK as they roll out. RBS branch closures have a devastating impact on Scottish communities, particularly, as I have said, in isolated rural areas. RBS has underestimated how much people rely on traditional in-branch banking services.

[Stephen Kerr]

I wish to support what the hon. Gentleman has just said and add to it. The Royal Bank of Scotland and others who are party to the process of bank branch closures have underestimated the anger that those closures have caused in communities in my constituency and throughout Scotland. That anger towards the Royal Bank of Scotland is not going away. Real reputational and brand damage has been done to what was otherwise a great—a grand—Scottish institution.

--- Later in debate ---

[Drew Hendry]

The hon. Gentleman and I normally disagree on just about everything. Very occasionally, we find points of agreement, and it is impossible to disagree on this issue. There is palpable anger. I talked about the comment by the hon. Member for East Lothian about the failure of trust in the bank. That is at grassroots level. It is right inside the communities. How daft is it to have trust in the bank demolished at the very top level and right at the grassroots? It is just crazy behaviour; it is also harmful behaviour. It is clear to me that some people are just looking for a very short-term gain, so I thank the hon. Gentleman for his intervention.

There is more I could say on the rural issue, and there is a lot more that people would say, but I want to get on to the treatment meted out by RBS’s Global Restructuring Group to SMEs in the aftermath of the financial crisis.

[Stephen Kerr]

I think that the hon. Gentleman and I will find that we can agree on a number of things this afternoon, and for that reason alone, this debate is noteworthy. He mentions the short-term gain that the Royal Bank of Scotland feels that it is making through the branch closures, but the amounts of money involved are minuscule in the context of the bank’s operations, and the damage that the closures are causing, if that were to be quantified—I am sure that it would have to be somehow—would be far greater than a few million pounds. The Royal Bank of Scotland must accept that it has a social responsibility that goes beyond mere pounds, shillings and pence.

[Drew Hendry]

This is becoming a habit, but I completely agree with the hon. Gentleman. I have cut my notes a wee bit shorter, but the point I was going to make was exactly that: the sell-off of assets does not make any financial sense in the longer term. If we believe that the vans are going to stay—that requires a stretch of the imagination—they still have to employ people and incur costs. When we hear figures of x million pounds, that sounds like a lot of money to some people, and in some contexts it is a lot of money, but in terms of the scale of the bank, it is a tiny drop in the ocean, so again, I agree with the hon. Gentleman.

As I said, I will turn to the treatment meted out by RBS’s Global Restructuring Group. In the aftermath of the financial crisis, it behaved in a completely unacceptable and disgraceful manner. I concur with hon. Members that it is also a disgrace that the UK authorities have failed to intervene. Following the credit crunch, GRG took control of 16,000 SME customers with £65 billion of assets in Project Dash for Cash. Following allegations of malfeasance, GRG was reportedly disbanded in August 2014. More than 12,000 companies were pushed into the bank’s controversial “turnaround” division; and between 2007 and 2012, the value of loans to customers in GRG increased fivefold to more than £65 billion. With the threat of foreclosure of loans, the banks seized control of customer assets cheaply from businesses that they claimed were failing even though they had not defaulted on any loan repayments.

When we state the situation as simply as that, we wonder how it can be the case, yet as we have heard, time and again it was. We have said this before in the main Chamber and other debates, but it is absolutely shocking that bank managers were able to increase their bonuses by identifying customers who could be squeezed in what RBS itself, in a 2008 email, called “Project Dash for Cash”. The leaked document disclosed that the taxpayers’ bank ran down businesses as part of a premeditated strategy to cut lending and bolster profits. People should be in jail for doing that.

RBS is not alone in being embroiled in this scandal. Several other banks, including Clydesdale, were caught in similar scandals.

[Kevin Hollinrake]

The hon. Gentleman makes a very good point about the financial interest and financial benefit that some of the executives saw. He may be aware that Nathan Bostock, who was one of the senior executives at GRG and is now at Santander, where I understand he earns £4.6 million a year, is still getting a bonus from RBS—in terms of deferred bonuses—of £1.8 million this year. Despite what has happened at GRG and the fact that it came about as a result of the priorities of the management, that person still earns millions of pounds in the financial services industry.

[Drew Hendry]

That was a stunning intervention. This is not just about people getting away with it; it is about people being rewarded for it and continuing to be rewarded for it. In any other place, this would be a great national scandal, of huge proportions. The fact that not so many people know about it is still a real problem for the way we are operating across the nations of the UK.

As I said, RBS was not alone. Clydesdale bank was caught in similar scandals. National Australia bank, former parent to the Clydesdale and Yorkshire banks, will be forced to cover £406 million of PPI provision, under a divestment agreement. NAB was forced to save £1.7 billion for UK banking sector costs. Nearly 70,000 small firms, 8,372 of them Clydesdale bank customers, took out what were called tailored business loans, which means that they are not eligible for compensation.

The Tomlinson report had already shown the damning practices conducted by GRG, saying that it

“artificially distresses an otherwise viable business”.

The report stated:

“Once in this part of the bank, the business is trapped with no ability to move or opportunity to trade out of the position—they are forced to stand by and watch an otherwise successful business be sunk by the decisions of the bank.”

We have heard testimony on that from other hon. Members around the Chamber.

I could say a lot more; I have a lot more to say, but I am wary of my voice dragging on through the debate. I have considerably more to input, but I will move on to the Scottish National party’s point of view. We demand that the UK Government create a permanent commercial financial dispute resolution platform to alleviate the situation for victims of mis-selling. We believe, as other hon. Members do, that the current system of commercial dealings with the regulator and litigation processes around mis-selling is, to say the least, inadequate. It is vital that every victim of mis-selling is given fair and equal access to justice.

We believe that asking the victims of mis-selling to take on the banks in court is not only immoral, but financially unworkable. The independent review process has been accused, as we have heard, of lacking in checks and balances. The role of the independent reviewer was to oversee cases, to ensure they are fair. Customers criticised the process, however, for the unaccountability of the reviewer, who would often fail to disclose the information that had been provided to them by the banks.

We call on the FCA and the UK Government to do all in their power to ensure that businesses, particularly small businesses, are informed about what they could be asked to sign up to and, critically, the consequences of doing so. It is time—the Minister has heard this from around the Chamber—for the UK Government and the FCA to step up to the plate to ensure that businesses get fair treatment and access to affordable justice.

The compensation scheme set up by RBS is simply not good enough. Given that many of the complaints were that sound businesses were being ruined, many company owners were also looking for compensation for consequential loss, rather than simply the fees they paid, which put them out of business. There is a separate consequential loss complaint scheme. By its nature, it is more complex and the calculation of loss is far more difficult. There are still questions, however, about the effectiveness of an ad hoc voluntary company compensation scheme.

We look to the UK Government to pick up where the FCA has failed and produce a comprehensive review into banking culture to ensure that history does not repeat itself for those customers. The SNP condemns the FCA’s decision to scrap its review on banking culture barely months after it was announced in 2015. It is vital that the Government take the necessary steps to ensure that the banking culture does not slip into pre-financial crash habits.

We fervently opposed the UK Government’s decision to scrap the reverse burden of proof, which had been recommended by the Parliamentary Commission on Banking Standards, and call for it to be reinstated in legislation.

There are many other points I could make, but I want to draw my remarks to a conclusion so that others can speak. I want to underline the key points I have made. It is a disgrace that the UK Government have failed to use their influence from their 70% stake in RBS to represent Scottish communities and reverse the devastating branch closure programme. The Royal Bank of Scotland has failed to consult adequately on closing Scottish branches, with no clarity on the required performance of the 10 given a reprieve, which seem to be set up to fail. The treatment displayed by the Royal Bank of Scotland’s Global Restructuring Group to SMEs in the aftermath of the financial crisis was completely unacceptable. It is a disgrace that the UK authorities have failed to intervene.

The Government must now create a new, permanent commercial financial dispute resolution platform, to alleviate the suffering of victims of mis-selling. The UK Government must pick up where the FCA has failed and produce a comprehensive review into banking culture to ensure that history does not repeat itself. I add, as a parting shot, that leaving the European single market will also be disastrous for the financial services industry.

--- Later in debate ---

[Drew Hendry]

The Minister mentions commercial issues for the banks, but surely ownership of the bank, certainly such a large majority ownership, plays some part in the commercial process. Would it not have been correct for the UK Government to use the fact that they largely own the bank to make a decision to protect the people it is supposed to serve?

[John Glen]

I thank the hon. Gentleman for that intervention, but I will take the opportunity to correct him. The Government do not have a 70% shareholding. We have a 62.4% shareholding. We do not have control of the day-to-day running of the bank, in the same way as the Scottish Government do not have control of Prestwick Glasgow Airport, yet they have a complete shareholding in it. We need to be real. There is a difference between ownership and day-to-day control. I want to address the practical issues because our constituents want to know what is being done to deal with these challenges. Before I go into that, I want to acknowledge that in previous debates I was challenged by Members from constituencies in Scotland. I will visit Scotland for four or five days at the end of August during the recess to address specifically the issues around rural banking. I went to look at the mobile banking units of one of the banks in Derbyshire in the previous recess, and I take very seriously the concerns about how effectively they function in terms of support for disabled people.

[John Glen]

I want to try to address our constituents’ concerns about bank closures and what the Government are doing to see that their services are provided. The Post Office and the banking industry have a commercial agreement that enables 99% of the UK’s personal and 95% of the UK’s business customers to carry out their day-to-day banking. I am concerned about the effectiveness of that arrangement, so I am determined that public awareness of those services should be greater. I am pleased that UK Finance and the Post Office have responded to my call for further action, particularly when the last bank in town closes, to make sure that the transfer of responsibility—

[Drew Hendry]

Will the Minister give way?

[John Glen]

I will not keep giving way—I need to finish what I am saying. I will give way in a moment. Let me just finish this point.

The Government also support the industry’s access to banking standards, overseen by the independent Lending Standards Board, which commits banks to better communicate with customers and those who need more help when a bank closes. I am not seeking to duck any issue and I look forward to further engagement on this matter.

[Drew Hendry]

I appreciate the Minister’s giving way, and I appreciate that the issue is sensitive for many of us in rural constituencies. If the position is that the UK Government do not brook any interference or intervening in commercial decisions, how can it be the case that the Minister is listing a number of interventions that he is about to make in a commercial situation?

[John Glen]

I was making it clear that, as a Minister, I do not make the operational day-to-day decisions about which individual branches should close. My responsibility is to see that consumers have access to the services they need, and I have done that through brokering the arrangement between UK Finance, which represents the banks, and the Post Office, which provides services when closures take place.

The hon. Member for East Lothian mentioned insolvency practitioners.

Air Passenger Duty

Drew Hendry Excerpts

Tuesday 10th July 2018 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Belfast East (Gavin Robinson) on securing the debate, which is very important for the reasons he outlined. I also congratulate the Minister for being in his place this morning—I know how challenging that is at the moment, so well done.

It is very unusual to be in a debate with colleagues from the Democratic Unionist party and find that we agree furiously. In fact, it is a unique experience for me—I could recite many long disagreements—but today, the protracted issue, as the hon. Member for Belfast East rightly said, is the lack of action on APD and the economic barrier that it has put down. He further described it as an arbitrary charge that affects the economy, tourism and connectivity. Northern Ireland and Scotland, and particularly the highlands, which I represent, have something in common: air transport is not a luxury. We do not use it purely for holidays—it is part of the public transport mix and very important to us. The hon. Gentleman listed the number of airports affected, but that can be extended throughout the north of England and around the nations of the UK. Scotland is directly affected.

[John Howell]

Within five months, I will have travelled to the US, Aberdeen, Israel, which I came back from yesterday, Lisbon and Nigeria. That is not unusual and is part of what being an MP is about. I am not unusual in the scheme of things in the UK, because that is what my business colleagues are doing. The hon. Gentleman is absolutely right to make that point.

[Drew Hendry]

Other right hon. and hon. Members will have to make up their minds whether the hon. Gentleman is unusual, but I leave that with them.

As the hon. Member for Belfast East pointed out, the tax does not work as an environmental incentive. It is simply an economic disincentive. The money goes into the general tax pool every year and does not go to tackle the environmental issues other than in the way that any other tax might. There is no direct funnelling of that money into environmental initiatives—otherwise there would be significant differences. As he said, all studies show that a reduction in APD would produce a net benefit to the economy.

The hon. Member for Strangford (Jim Shannon) said that PwC stated that if APD is scrapped, the Treasury will gain. He made the telling point that a Treasury report found that the UK is ranked 135 out of 136 countries in terms the cost to the traveller. That is damning of the cost of air travel through APD. He further pointed out that Ireland scrapped APD in 2014—an independent country making a decision for itself—and tourism shot up by 47%.

The hon. Member for Belfast East introduced a side issue, which I also thoroughly agree on, of cutting VAT rates for tourism. Combined with tackling APD, that would be of huge benefit to areas throughout the nations of the UK where tourism and visitor numbers are extremely important to the local economy. We support that strongly and we would commit to it if the power was with us. On the hon. Gentleman’s closing remarks, I cannot send a Valentine to the Tories because it certainly would not be sincere, but the comment about it being a humorous way to highlight a serious problem is valid.

[Mr Gregory Campbell]

Smaller airports suffer disproportionately from APD, such as airports in Scotland and my own airport in Londonderry, where we are trying to get route development money. Does the hon. Gentleman agree that that double disadvantage—the difficulty of attracting new routes and APD—needs to be countered and that action should be taken to help?

[Drew Hendry]

I will come on to some specific issues in Scotland, because the picture is different, particularly in the highlands and islands, but the hon. Gentleman’s point is very well made for the rest of the Scotland, where there are direct APD effects.

The hon. Member for Strangford pointed out that it is the highest tax of its kind in the EU. It is worth repeating that the cost in Germany is half. The scandalous figure is that, for long haul, it is the highest tax in the world, which affects tourism. The revelation that the hon. Gentleman sneaks off to use Dublin airport will probably reverberate around his local community.

APD is a competitive disadvantage. ABTA calls it a “tax grab”. The hon. Member for Strangford pointed out that Northern Ireland is losing out on connectivity opportunities. Again, it has that in common with other parts of the nations of the UK. His feeling was that the UK Government should just get on and reduce or scrap APD. We are always grateful for some motherly advice in Parliament—there is nothing more true than penny wise and pound foolish. The UK Government could benefit from a net increase in income from other taxes. The hon. Gentleman pointed out the impact of 61,000 jobs—that is a significant benefit that raises the question of why APD has been allowed to continue to so long. Why has it not been addressed?

Air passenger duty is one of the most expensive taxes of its kind in the world, as we have heard. It hampers Scotland’s ability to secure new direct international routes and maintain existing ones. It is simply a regressive tax. Combined with the other unfair tax on our tourism sector—VAT—we face among the highest taxations in the world. An independent report found that reducing air departure tax, as it is called in Scotland, by 50% will boost Scotland’s air connectivity and economic competitiveness.

Encouraging the establishment of new routes, which would enhance business connectivity and inbound tourism, would help to generate sustainable growth. That is why the Scottish Government remain committed to a 50% reduction in ADT by the end of the Scottish Parliament in 2021. We want to get on and deliver it.

We want to abolish ADT entirely when resources allow, but that cannot be delivered until the UK Government and the Scottish Government can ensure that exemptions afforded to the highlands and islands remain. The Scottish Government understand the importance of the exemption. Therefore, the introduction of ADT in Scotland will be deferred until the issue of the highlands and islands exemption is resolved. As a highlands MP, I know only too well that air connectivity is critical for the highlands and islands, and I welcome the Scottish Government’s determination to deliver the best possible outcome for the area. I could not possibly countenance the withdrawal of support for the highlands and islands which, for the reasons I pointed out, would lead to substantial difficulties for people who rely on air transport as part of the public transport mix.

Highlands and islands airports have been exempt from air passenger duty since 2000 because of the area’s low population density and peripherality. The current APD exemption helps support the viability of commercial air services in the highlands and islands. Without it, we would face reduced flights and the withdrawal of important services to the region. Alternative surface journeys by road, rail or sea are long, particularly for those coming from the islands, whose journeys often include overnight stays or overnight ferry travel.

Recognising the social and economic importance of flights to the region, the Scottish Government have worked to reduce the cost of air travel, but residents of the highlands and islands still pay more than people who live in other regions of the UK. The Scottish Government have worked closely with Transport Scotland, VisitScotland, Highlands and Islands Enterprise and, crucially, Highlands and Islands Airports Ltd to develop the network at Inverness airport and improve international air connectivity to the region. That has brought new routes, including a British Airways route to Heathrow and a KLM service to Amsterdam, and improved the frequency of existing routes. Similar work has led to the expansion of the air network serving smaller regional airports in the highlands and islands.

The introduction of those new flights has enabled our business and tourism sectors to flourish, but more could be done. We are all too well aware that those connections remain some of the most fragile across these isles. Since being elected in 2015—I served in the last Parliament as Transport spokesperson for the Scottish National party, and I am now its Business, Energy and Industrial Strategy spokesperson—I have consistently made the point that they are crucial to Scotland and to the highlands and islands. That is why the case for the exemption remains, and why the UK Government must provide assurances about route protections and public service obligations in respect of the third runway at Heathrow.

The Minister knows that the Scottish Government cannot implement ADT unless a solution is found to the problem with the exemption. Will the UK Government look at why APD was handed over in a state that put that exemption at risk? The Scottish Government were effectively given responsibility for APD without the power to implement it. What assessment have the UK Government made of the state of APD? What is the Department doing to resolve the issue with the highlands and islands exemption while supporting the Scottish economy? The Minister will be aware that the Scottish Government have convened a new highlands and islands working group, which includes organisations with expert knowledge of the highlands and islands economy. Its first meeting was on 15 June. What support have the UK Government offered that working group?

The Scottish Government want to continue to work with the UK Government to find a solution. While the UK Government continue to set APD rates, they should take the impact on the Scottish economy seriously. As we heard, that impact is also felt by the economies of Northern Ireland and of the other nations of the UK. Since APD was transferred in the state it was, will the Minister review it for the rest of the nations of the UK?

--- Later in debate ---

[Anneliese Dodds]

I beg the hon. Gentleman’s pardon. I am very sorry about that. He will perhaps be even more perplexed when I mention that, rather than pound pinching, my family talked about looking after the pennies and the pounds looking after themselves. Perhaps that reveals a psychological difference between lowland and Ulster Scots. Of course, we need to look after the pennies and the pounds—that is the whole point. We need to trace exactly the impact of APD.

Studies suggest that the evidence about APD’s impact on passenger numbers is mixed. As many Members said, such a duty is unusual in the international context, but the number of passengers using UK airports has increased by 15%—a substantial increase—in the past five years. Of course, APD needs to be considered in the context of there being no tax on aviation fuel and no VAT on domestic or international flights. There are also different levels of APD for different kinds of flights, and exemptions for children were introduced in 2015 and extended in March 2016.

I will focus on four issues: the long-term viability of APD, regional competitiveness, the unequal impact of APD on different groups of Britons, and environmental issues. From a revenue point of view, there are clearly significant concerns about APD’s long-term viability. The Government have moved to provide industry with earlier notice of APD changes. The rates for next year were announced last autumn. That is surely positive for industry but, as I mentioned, we have had no indication of the Government’s view of the long-term trajectory of the tax, particularly in the context of the race to the bottom occasioned by internal competition in the UK. The tenor of this debate demonstrates that the starting gun has been fired on that race—it has begun, and we need to know the Government’s response.

We must view increases or reductions in APD in the context of taxation generally across income levels. It is notable that, given the increasing popularity and accessibility of air travel, many more people pay APD. As my hon. Friend the Member for North Tyneside (Mary Glindon) said, many more people enjoy hard-earned holidays abroad, and there are also people who need to travel abroad for family or work reasons.

Equally, APD is far less significant for household incomes than VAT, another transaction-based tax, which Members touched on. We would be in a different situation if the potentially regressive impacts of consumption taxes as a whole were cancelled out by progressive income taxes, for example, but of course the Government reduced the top rate of income tax. The latest Office for National Statistics figures suggest that overall, unusually in Britain’s history—at least in recent times—people in the least well-off decile pay a greater proportion of their income in tax than those in the most well-off decile. That is a peculiar situation.

Another concern we must note is about APD’s impact on regional competitiveness, which has been a focus of the debate and was perhaps its motivation. As we have discussed, APD levels were devolved to the Scottish Government in the Scotland Act 2016 and initial suggestions were that it would be halved and then potentially removed altogether.

We have discussed at length changes mooted in Northern Ireland, where there has been a call for evidence. We got useful detail about the operation of that from the hon. Member for Belfast East. As I understand it, the Government stated in February 2015 that they would also consider the case for devolving APD to the Welsh Assembly. We have therefore seen much change in relation to this duty.

All those changes naturally raise questions for airports contiguous to other airports not subject to the same APD levels, whether they are contiguous to Scotland or to the Republic of Ireland. We heard interesting thoughts on that from the right hon. Member for Belfast North (Nigel Dodds) and the hon. Members for Upper Bann (David Simpson) and for East Londonderry (Mr Campbell). Of course, the hon. Member for Strangford (Jim Shannon) —I have got it right this time—gave us a typically passionate and inclusive speech and a glimmer of his holiday plans. I hope they are more sedate and relaxing than those of the hon. Member for Henley (John Howell), whose itinerary of recent movements sent my head into a bit of a spin.

We also heard from my hon. Friend the Member for North Tyneside, who pointed out research suggesting that the duty has a significant impact on people living in her area. She is always a doughty supporter of their interests.

The Treasury published a discussion paper on options to support English regional airports in July 2015, but it is difficult to find out what concrete steps have occurred since then. Furthermore, the Government have said they will look at the matter once legislation concerning state aid changes is produced. An indication from the Minister of the Government’s thinking on that would be helpful; it is particularly important, given the points made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) about the situation for the highlands and islands.

There is often confusion in this place, though certainly not on the hon. Gentleman’s part, about the impact of EU state aid provisions in general. Of course, they prevent the provision of arbitrary support, but, as he suggested, low levels of population could be a feasible basis for such an exemption.

[Drew Hendry]

The hon. Lady makes the point well. This is an exemption based on population density and the regional difficulties in the highlands and islands. Indeed, it should be possible—I hope it is—for the Scottish and UK Governments to work together to solve that problem.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

We are.

--- Later in debate ---

[Anneliese Dodds]

I am grateful to the hon. Gentleman for those comments. I acknowledge that there is not necessarily the awareness to ensure that it does have such an impact. Some of the matters he just raised have led to calls for a redesign of the duty, which some believe could lead to a greater environmental impact. One suggestion, which was examined in 1998, was whether it would be better to levy the duty on planes rather than passengers to reduce under-occupancy and lessen emissions. However, the then Government suggested that a restructuring of APD would be more appropriate and the four bands were introduced. Of course, since then we have gone down to two bands.

It is interesting to note that the highly interventionist right hon. Member for Wokingham (John Redwood)—he is not often described as that—argued that, on reducing under-occupancy through such a measure,

“there is a green case to be made there.”—[Official Report, 23 April 2007; Vol. 459, c. 729.]

However, the practicalities of doing so are highly complex, which may be why that did not develop at that time. In particular, it is difficult to exempt transit and transfer passengers from the calculation, which led Alistair Darling away from initial moves in that direction.

The taxation of aircraft fuel has been mentioned as an alternative, but that is prevented by the network of bilateral air service agreements under the principles of the Chicago convention. It would be helpful to hear whether the Minister has been involved in attempts afoot internationally to alter that agreement to provide more flexibility.

[Drew Hendry]

I am grateful to the hon. Lady for giving way yet again. She is talking about alternatives for taxation. Does she agree that had APD been used directly for environmental measures, it would have had a huge impact? For example, it could have been involved in the creation of alternative biofuels and other incentives and operations to reduce dramatically the environmental impact, yet it has not been spent in that way at all.

[Anneliese Dodds]

I am grateful to the hon. Gentleman for that interesting point. Hypothecation of tax is relatively unusual in the UK. My party believes—he will expect me to say this—that there needs to be much more investment in those technologies. That would be positive for our country, whether funds are hypothecated from a particular area or found through other mechanisms.

One other aspect of the international context—this was mentioned to me by a Minister—is the ICAOs agreement on the carbon offsetting and reduction scheme for international aviation, which was introduced in October 2016. Members have referred to the EU’s emissions trading scheme in that context, but we have not yet heard from the Government about whether we will remain part of the ETS beyond 2020. If we follow existing patterns for APD, Parliament will set the rate for 2021 next autumn. It would be helpful to get a clearer idea about how the Government view international schemes such as that of the ICAO interacting with multilateral mechanisms such as the ETS. The general lack of clarity on environmental matters amplifies the fact that the UK Government seem to lack any long-term vision about what constitutes green taxation in the first place, let alone how it should develop in future. This is a bit of a cheesy point, but I contrast that with the shadow Treasury team, which includes a shadow Minister who is focused exactly on such matters, and on the link between environmental and Treasury issues.

In conclusion, I am afraid that I lack the poetic sensibilities and contacts of the hon. Member for Belfast East, but I congratulate him again on securing this debate. I look forward to hearing from the Minister about the five issues I raised: whether there will be a 360° review of APD; whether there is a long-term plan for it; what the Government’s view is about the substitutability of short-term flights, and whether that should be taken into account; whether the Government are participating in international attempts to reform the Chicago convention; and what their view is of the interaction between the ICAO scheme and the ETS, and what the future will hold for carbon trading for the UK beyond 2020—that point is very germane to this debate.

Scottish Economy

Drew Hendry Excerpts

Wednesday 27th June 2018 Westminster Hall

[Luke Graham]

Not just now. According to figures provided by the House of Commons Library, the unemployment rate for my constituency of Ochil and South Perthshire is 0.5% higher than the UK unemployment rate. Meanwhile, the Scottish Fiscal Commission’s predicted growth rate for Scotland is 0.7% in 2018, 0.8% in 2019 and 0.9% thereafter until 2022. In comparison, the Office for Budget Responsibility forecast the UK growth rate to be 1.5% this year, 1.3% next year and to rise thereafter to 1.5% over the same period.

The more observant among us will have noticed that for every single one of those economic statistics, Scotland lags behind the UK in terms of economic performance. However, it is not just in GDP, employment and unemployment rates or forecast growth that that is the case. Scotland’s median weekly earnings are also lower than those of the UK. When it comes to small business confidence, Scotland lags about 23 percentage points behind the UK. Meanwhile, Scotland has higher public sector expenditure per head yet lower public sector revenue per head than the UK. Put simply, Scottish taxpayers are not getting value for money from their public sector.

Under the guidance of the SNP, the Scottish economy has grown at half the UK rate. It has failed to meet its targets to match the UK GDP growth rate and succeeded only in overseeing the slowest growth rate of any country in the EU.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Does the hon. Gentleman agree with his right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy that the responsibility for the growth of all the nations of the UK sits firmly with him?

[Luke Graham]

That is why we are having a debate in this place—because growth is the responsibility of the United Kingdom. The problem is the claims of the SNP Administration that they champion economic growth in Scotland. Scottish Enterprise is devolved. Much of the tourism is devolved. The scream for powers has meant that so many levers have been denied to this place and put into Edinburgh. Although I agree that accountability —[Interruption.] If you want to make an intervention, stand up and make one, madam.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing the debate, and share his disappointment that neither the Secretary of State for Scotland nor any of his team turned out for the debate.

I should like to give some uncommon—

[Stephen Kerr]

Will the hon. Gentleman give way?

[Drew Hendry]

I was just about to give the hon. Gentleman some praise—but carry on.

[Stephen Kerr]

It is a well-known convention in the House that no Secretary of State or Cabinet Minister responds to debates in Westminster Hall, and the point that the hon. Gentleman made was not entirely fair.

[Drew Hendry]

If the hon. Gentleman had been listening to what I said, he would know I said “or any of his team”. [Interruption.]

[Mrs Anne Main (in the Chair)]

Order.

[Drew Hendry]

It is such a shame: I was going to offer some unusual, uncommon praise for the hon. Member for Stirling (Stephen Kerr), with whom I commonly duel across the Chamber, where we fervently disagree. However, his speech today was unusually positive. It may have been slightly off track, as he admitted, but judging by its tone he was at least looking for some opportunity.

I would also almost make an honourable exception of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). Until he took an intervention, which unfortunately did not point out that Highlands and Islands Enterprise still operates exactly as it did in the past, or mention the new south of Scotland enterprise agency to go with it, he was talking about Scotland’s strengths. Otherwise, what a desperate collection of speeches talking Scotland down—

[Christine Jardine]

rose—

[Jamie Stone]

rose—

[Drew Hendry]

I will not give way just now. We are short of time.

Scotland has strong economic fundamentals. We heard nothing about its vast natural resources, the innovation there, or the talent of our people. Scotland has the most inward investment of anywhere in the UK outside London.

[Luke Graham]

Will the hon. Gentleman give way?

[Drew Hendry]

I am going to make some progress.

That inward investment is happening in the face of Tory austerity, during which time the Scottish Government have focused on building an economy of the future—taking measures to unlock innovation and drive productivity. As we have heard today, productivity is the key, but what we have not heard today is how UK productivity has flatlined for the past decade. As economists will agree, productivity is not everything, but it is almost everything, to an economy.

The hon. Member for Ochil and South Perthshire (Luke Graham) talked about the city deals, but not about how, for example, when one of those deals was put together in Inverness, the Scottish Government put in £135 million and the UK Government—in a so-called partnership—put in only £52 million.

[Christine Jardine]

Will the hon. Gentleman give way?

[Drew Hendry]

No, I am not going to give way. I am going to make some progress; there is limited time in the debate.

The hon. Member for Ochil and South Perthshire also talked about the Scottish Government having a surplus this year. The Scottish Government work with a fixed budget; they cannot overrun on that. Other Members have mentioned Governments working together, but the present Tory Government cannot even work with the other parties in the Scottish Parliament on Brexit, so how can they be trusted to work with the Scottish Government? The other falsehood—I am sorry, I will take back that word. The other erroneous suggestion made was that Scotland is under a high-tax agenda. That was to forget conveniently that 70% of people in Scotland now pay less tax than they did last year.

The biggest threat to Scotland’s economy comes from the Tory Government’s reckless—[Interruption.]

[Mrs Anne Main (in the Chair)]

Order. The hon. Gentleman’s comments will be heard. Hon. Members will please refrain from barracking.

[Drew Hendry]

Thank you, Mrs Main.

The biggest threat to Scotland’s economy comes from the Tory Government’s reckless obsession with a hard Brexit. That is not being challenged by the Labour Front Benchers. We have no protection from it. The Scottish Government have put forward, in “Scotland’s Place in Europe”, an option to enable Scotland to avoid the worst effects and stay in the single market and customs union. Incidentally, this week the EU chief negotiator Guy Verhofstadt said that that would be entirely acceptable. Scotland is likely to be hammered by a hard Brexit.

[Christine Jardine]

On that point—

[Drew Hendry]

No, I am going to make progress. The Fraser of Allander Institute estimates that 80,000 jobs are at risk.

[Paul Masterton]

Will the hon. Gentleman give way?

[Drew Hendry]

No, I am going to carry on, because I have only a minute.

The UK Government are paying no real attention to stimulating the oil and gas industry. Fortunately there is now an upturn in oil and gas prices, and we need investment from the UK Government.

I have much more to say, and as we are the third party in Parliament I should have hoped for more time to say it, but unfortunately that is not the case—

[Mrs Anne Main (in the Chair)]

Order. The hon. Gentleman is not under a time limit. I was just indicating that other colleagues wish to speak.

[Drew Hendry]

In that case I will keep going; thank you very much for allowing me to do that.

[Jamie Stone]

I would not want the hon. Gentleman to misunderstand me. I do not decry the efforts being made by Highlands and Islands Enterprise. However, anyone who thinks that despite its best efforts it is more than a poor shadow of what went before, in the Highlands and Islands Development Board, is in dreamland. Surely hon. Members agree with me about that.

[Drew Hendry]

I disagree, and so do many businesses that I interact with in the highlands on a daily basis.

Production efficiency in the oil sector has risen for the fifth consecutive year, reaching 74% in 2017, demonstrating sustained efficiency improvements and maximising the economic recovery. Oil & Gas UK’s “Business Outlook for 2018” shows growth in investment and a further 5% increase in the forecast production for that year. Recent industry announcements about BP’s successful working discoveries in the Capercaillie and Achmelvich wells and Shell’s redevelopment of the Penguins field demonstrate the investment potential that the UK fields still hold. Over the next decade our oil and gas sector can capitalise on the decommissioning market, which is forecast to reach £17 billion; but that is only if the right decisions on investment are made.

[John Lamont]

The hon. Gentleman points out the challenges for the oil and gas sector, but on Monday when the Scottish Affairs Committee was taking evidence on the sector in Aberdeen, we heard people saying they wanted fracking to be expanded in Scotland. Does he support the industry in making that call?

[Drew Hendry]

I certainly do not support fracking. I do not believe that a country as rich in natural resources and renewable energy as we are—and indeed one with the oil and gas industry that we have at the moment—needs to go for fracking. I absolutely support the ban on fracking in Scotland. [Hon. Members: “There is no ban!”] There is a ban in Scotland. As to an effective ban, a court ruled in the past week that that is the case: fracking cannot go ahead in Scotland under the current situation.

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

Unfortunately I am a bit late to the debate, but I have been paying attention. I am amazed by the efforts of Conservative Members, in relation to thinking of Scotland as a country. They are the people who want to see Scotland as a region. [Interruption.] They should remember that the Norwegians have an oil fund, whereas they have squandered Scotland’s oil.

--- Later in debate ---

[Drew Hendry]

Thank you, Mrs Main.

The other issue I wanted to touch on was the opportunity for carbon capture and storage development in Scotland. There is a measure of co-operation between the UK and Scottish Governments, but there is nowhere near the required level of ambition from the UK Government. The rug was pulled out from under Peterhead, where £1 billion of investment was supposed to be put into the carbon capture and storage operation. At the time, that was judged to be just about enough. Now, the UK Government’s overall investment in carbon capture and storage is set to be about £100 million, which is desperately insufficient for the needs of the carbon capture industry, and nowhere near the amount needed to show the ambition that we should be showing to lead that industry. I will draw my remarks to a close, and I thank you, Mrs Main, for allowing me the extra time.

[Mrs Anne Main (in the Chair)]

The hon. Gentleman was not on a time limit. With the permission of the Front Benchers, I will take four extra minutes from them and place a two-minute time limit on the last two Back-Bench Members, who have been here for the entire debate.

[Douglas Ross (Moray) (Con)]

I will be brief. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing this debate. He started with a tettie point, which was repeated by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). A UK Minister is present to respond on the UK Government’s behalf, and I do not see any problem with that.

The hon. Member for Rutherglen and Hamilton West said that in his speech, he would mention a third way—a Labour way—and I was excited about that, because on Monday night, the small rump of Scottish Labour MPs voted three different ways in the Heathrow debate. Some voted for it, some voted against it, and others joined the Scottish National party in sitting on their hands. In a debate about the future of Scotland’s economy, it is interesting that not a single SNP Member who has spoken or intervened has mentioned their last-minute decision to change their mind about Heathrow on orders from Nicola Sturgeon and to stop the investment into Scotland’s jobs and economy.

[Drew Hendry]

Will the hon. Gentleman give way?

[Douglas Ross]

The hon. Gentleman spoke for 10 minutes; I cannot take an intervention from him.

SNP Members sat on their hands and abstained, despite talking in the debate about all the positive interventions that would come to Scotland as a result of Heathrow’s expansion.

It is good that some SNP MSPs can speak out against their party. My hon. Friends have quoted a report, “Scotland’s Economic Performance”, by a cross-party committee of the Scottish Parliament and supported by SNP MSPs, which says:

“Levels of GDP growth are marginal; productivity is low and wages are stagnant.”

Easter Adjournment

Drew Hendry Excerpts

Thursday 29th March 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Mr Speaker, may I start by wishing you, the House staff and all Members a very enjoyable Easter break? May I encourage Members to visit the highlands, and indeed to come to my constituency, where tourism comprises 20% of the economy? It is no surprise that people choose to go there, as we have one of Europe’s fastest growing cities, surrounded by stunning countryside. The growth of direct flights from Inverness airport has delivered record-breaking numbers of passengers and stays in our fabulous hotels, and our excellent restaurants are being used as well.

Why would not you, Mr Speaker, come to Inverness, Nairn, Badenoch and Strathspey to enjoy the snow sports in the Cairngorms or the golfing in Nairn? You could go on a cruise along Loch Ness with Jacobite Cruises. You might even choose to visit Tomatin distillery, Dalwhinnie distillery or indeed Speyside distillery, which has ambitious plans for expansion, starting with a new shop and visitor attraction in Aviemore.

We encourage cycling and walking in my constituency, and we have fantastic biking and walking trails. I pay tribute to Grantown Grammar School. Its approach to outdoor education includes fully integrating mountain biking and other activities into the school day.

[Bob Stewart]

I wish to help the hon. Gentleman by saying that my uncle was at school on the edges of Loch Ness as a boy and saw the Loch Ness monster. As a consequence, tourism expanded hugely—it was in all the Scottish newspapers. It was only at his funeral that it was allowed that that was a fake.

[Drew Hendry]

I was initially grateful for the hon. Gentleman’s intervention, but that is a scurrilous attack on what is quite clearly one of my constituents. I will not have that and hope that he will withdraw that comment.

While in my constituency, Mr Speaker, you could pop along to the Highland Wildlife Park to congratulate the highly trained staff on the UK’s first and only polar bear cub—a born highlander. Or you might take a trip to the Landmark Forest Adventure Park, which was recently awarded the Travellers’ Choice award by TripAdvisor and named in the top 1% of visitor attractions worldwide. In the city, we have exciting plans for Inverness castle and the launch of a truly world-leading augmented reality app, which will put Inverness history into perspective and enable people to grasp it with their own hands.

My constituency is internationalist, diverse and welcoming. We have welcome friends, neighbours and colleagues from all over the world. The children at Central Primary School in Inverness speak 21 languages. We are pleased to welcome Inverlingo, a new meet-up group for internationals living in Inverness so that they can be linked to EU nationals and we can share their value in our society. We will soon have the opening of the honorary Polish consulate in Inverness, too.

Our people care deeply about supporting others who need help, and I wish to thank just some of the organisations involved. Mikeysline, which recently opened the Hive in Inverness, offers a place for people aged 17 and over to drop in when they are feeling low or depressed, or when they simply need some space or support. The volunteers there do incredible work. Birchwood Highland recovery centre is the first and only mental health residential recovery centre in Inverness, and recently celebrated its 10th anniversary.

In World Autism Awareness Week, a special mention must be given to the Highland One Stop Shop and all the fantastic people who fought to keep that service open. They are delighted with the Scottish Government funding and the private donor who has committed to help them.

I thank the community transport groups that work wonders in Merkinch and Badenoch, and pay tribute to the contribution of the volunteers there. The Badenoch and Strathspey community transport group has an innovative project that matches up school kids with elderly people so that they can learn from each other skills such as IT.

The Boat of Garten community centre, and Emma Macdonald and team at the hall, put in huge effort to make sure that there is always something going on, from “Boat Reel” film screenings to family fun days and “Showboaters” theatre productions. Boat of Garten was featured on Channel 4’s “Village of the Year”.

I could go on and on about what is happening in my constituency. I congratulate the Inverness chamber of commerce on its 125th anniversary. I also congratulate Inverness BID—the business improvement district—on the renewal of its mandate to operate in the city.