Beer Taxation and Pubs

Greg Knight Excerpts

Thursday 28th March 2019 Commons Chamber

[Mike Wood]

I would caution against trying to turn this into a party political issue, because although the number of pubs is still reducing at far too high a rate, it is a rather slower rate than was the case before 2010. There are a number of factors that lead to pub closures, some of which are more in the control of the Government and public authorities than others. Where the Government can act to slow down, stop and reverse pub closures, I would very much encourage them to do so.

[Sir Greg Knight (East Yorkshire) (Con)]

Does my hon. Friend agree that the closure of a public house often has a far more devastating effect in a rural area, where the pub is the centre and heart of the community, often acting as a shop, a music venue and a tavern to the local people?

[Mike Wood]

My right hon. Friend is quite right. I will speak about the particular importance of rural community pubs later, but pubs are often key to local identity even in our towns and high streets. In fact, more people probably give directions with reference to pubs than to road names.

Financial Services (Implementation of Legislation) Bill [Lords]

Greg Knight Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 11th February 2019 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) set out very clearly and comprehensively the problems with this Bill in his opening remarks. I do not want to repeat them all, but I will summarise the core reasons why the official Opposition cannot support the Bill.

The Conservative Government often mix their metaphors when presenting their Brexit process. This Bill, for example, part of what the Government have described as an onshoring process, is presented as dealing with those so-called in-flight measures that have not yet landed. In my brief remarks, I want to explain why many of us are confused about the identity of the pilot of this plane, quite how far and fast the plane will go, and indeed whether it should be on the runway in the first place. I suppose that it is at least a relief that the Transport Secretary is not in charge, given last weekend’s revelations.

First, who will decide which parts of in-flight EU legislation will be implemented? This is straightforward for those Bills that have already been passed at EU level but not yet implemented—those taxiing on the runway. In that case, the Bill commits itself to implementation in the UK, not least given that UK Ministers and MEPs would have been fully involved, one would hope, in all aspects of that legislation, with Government only able to fix deficiencies in that legislation.

The picture is, however, far less clear for legislation still under discussion at EU level, and thus to a certain extent still up in the air. In that regard, we are informed that this Bill will enable

“the Government to choose to implement only those EU files, or parts of those files, which it deems beneficial to the UK”.

They will be able to

“adjust the legislation as it is brought into domestic law to fix any deficiencies or, in the case of files still in negotiation, to ensure that it reflects the UK’s position outside of the EU.”

How exactly they might do so, and what that reflection might encompass is left unclear. The right hon. Member for Loughborough (Nicky Morgan), Chair of the Treasury Committee, rightly raised this earlier in an intervention on the Minister, and I am disappointed that she did not receive a sufficiently clear response to that question; I will return to that point later. Indeed, there is no indication here that that deviation from EU practice will even be flagged up to this place, let alone go through a different decision-making process as a result. Instead, it is expected that, as usual with this Government, sadly, statutory instruments will be used. Clause 1(1)(b) even states that the Government can make

“any adjustments the Treasury consider appropriate”,

a power that was initially open-ended but that, quite rightly, was amended in the other place.

The point remains that it will be difficult for Parliament to be aware of any deviations from EU practice. The Conservatives may well respond by stating that industry would be quick to point them out. Frankly, I am grateful for industry’s engagement with this process, to the extent that it has been able to input, and it is essential that, as mentioned by my hon. Friend the Member for Stalybridge and Hyde, we preserve our strong and successful financial services sector, and our regulations must reflect that. However, I reiterate a point I have made before: there is no organisation in the UK with an explicit mandate to promote financial stability and the consumer interest in financial services, a role which is filled within the EU by the Finance Watch. It is unsurprising therefore that Finance Watch has put on the record its concerns that the current approach to Brexit could be used as a means to undermine financial regulation, pointing to, for example, the Chequers agreement’s phraseology of the UK pushing for greater liberalisation of financial services, investment and procurement markets post Brexit.

The second reason to reject the Bill concerns its peculiar status among the rest of the so-called onshoring process. The flight path here is bedevilled with interactions with numerous other legislative processes, from those embedded in the 40 statutory instruments that have already been laid before Parliament to the additional 20 yet to go, and with only 34 working days between now and 29 March, as rightly underlined by my hon. Friend the Member for Stalybridge and Hyde.

By contrast, with the extraordinarily rushed process being adopted here, the Government’s powers under this Bill can be exercised for up to two years—yes, two whole years after Brexit. That is in a context where the Government have no clear plan for financial services regulation post 29 March. Rather than this confusion of legislation—short-term, long-term and of indefinite duration; primary, secondary affirmative and secondary negative—we surely need to have some consolidated legislation covering this area. This confusion is of course part of a pattern, sadly, over recent years from Conservative Ministers, with Acts in 2012, 2013, 2014 and 2015 having to correct or amend existing provisions. Indeed, we have been informed that there may well be correcting amendments to be considered even after the 60 statutory instruments and this Bill are passed.

Of course we had a good example of the deficiencies even within this Bill, as rightly pointed out by my hon. Friend the Member for Wakefield (Mary Creagh), in relation to the legislation governing environmental indicators and reporting, which was initially missed off the schedule. I pay tribute to her for raising this essential issue of green finance and greening finance and how it was initially missed out of these proposals.

I found the Minister’s response to the hon. Member for Bromley and Chislehurst (Robert Neill) rather peculiar; I note that the hon. Gentleman is no longer in his place, but I felt he made an important point. He asked whether the UK would keep in step with emerging provisions from the EU, such as in the area of non-performing loans. The Minister suggested in response that alignment in this Bill was rejected due to the content of those proposals, when his Bill, however, was presented as inclusive of all financial services legislation that was in-flight aside from those elements that we had specifically opted out of, such as those relating to banking union, which we do not participate in of course and which is presumably the real reason why non-performing loans legislation is not included here.

My hon. Friend the Member for Wakefield highlighted in her remarks the non-scientific nature of the assessment by this Government of which measures will be deemed in-flight or otherwise. We have had no indication of the criteria to be used for that from Government. The discussion we have had, albeit in this brief debate, has pointed up that all we have as a Parliament currently as an indication of this Government’s approach to regulating financial services in the future is this Bill and the no-deal SIs—no overall plan, no indication of how the different pieces fit together, and above all no clarity around how we will be able to keep in step with the EU27 in relation to emerging issues like green finance and cryptocurrencies.

[Sir Greg Knight (East Yorkshire) (Con)]

On the issue of no clarity, can the hon. Lady tell the House why her party did not oppose the Bill in the other place or suggest any changes to it there?

[Anneliese Dodds]

It is my understanding that there was significant challenge from my party in the other place, and in fact changes were made, including for example a clearer indication of the circumstances under which those adjustments could be made by the Government. Initially that was very open-ended, but we supported and pushed for much more clarity on that. We would have liked to have seen change in other areas, and perhaps clarification in additional areas. We have not had that, however, which is why it is necessary to oppose the Bill at this stage.

Finally, this legislation is of course only required because of the Conservative Government’s recklessness in persisting with a commitment to keep no deal on the table, as rightly underlined by the hon. Member for Glasgow Central (Alison Thewliss). We have seen very clearly today from the preliminary estimates of GDP growth for the final quarter of last year how this determination to prioritise ideology over national interest is harming our country. The contribution to GDP from business investment was negative for the fourth quarter in a row; that is a clear sign that uncertainty surrounding the Government’s Brexit strategy is acting as a real drag on the economy. The construction sector actually contracted this quarter, and after two consecutive quarters of negative growth, the UK manufacturing sector sadly is now officially in recession. So 2018 had the worst annual GDP out-turn since the then Chancellor’s disastrous 2012, and economists are forecasting that even worse could well come.

The flight into the buffers that would be represented by a no-deal Brexit is still being countenanced. Any responsible Government would take that plane off the runway once and for all.

Draft Market Abuse (Amendment) (EU Exit) Regulations 2018 Draft Credit Rating Agencies (Amendment, Etc.) (EU Exit) Regulations 2019

Greg Knight Excerpts

Wednesday 23rd January 2019 General Committees

[John Glen]

It is a pleasure to serve under your chairmanship again, Mr Davies. The Treasury has been preparing extensively for a range of outcomes in the context of the UK’s withdrawal from the EU, including a no-deal scenario. The draft regulations form part of the necessary work to ensure that there will continue to be a functioning regulatory and legislative regime for financial services if the UK leaves the EU with no deal and no implementation period.

[Sir Greg Knight (East Yorkshire) (Con)]

Although explanatory memorandums are not technically part of regulations, it is important that they be accurate and up to date in all respects. Will the Minister confirm that that is the case? In particular, will he confirm that the first sentence of paragraph 7.1 of both memorandums is still Government policy? It states:

“The UK will leave the EU on 29 March 2019.”

[John Glen]

I am happy to confirm that point—I wondered what my right hon. Friend was going to come out with.

As part of the programme that I have set out, the draft regulations will address legal deficiencies in retained EU legislation relating to market abuse and credit rating agencies. They are important for regulating market conduct practices and safeguarding market integrity. Their approach aligns with that of other legislation laid before Parliament under the European Union (Withdrawal) Act 2018, providing continuity by maintaining existing legislation at the point of exit, but amending deficiencies where necessary and introducing transitional provisions to ensure that they work as effectively as possible in a no-deal context. I shall first outline the 2018 draft regulations and then turn to the 2019 draft regulations.

Market abuse can involve a range of illegal practices relating to financial markets, including unlawful disclosure of inside information, insider dealing and market manipulation. MAR—the EU market abuse regulation, which came into effect in 2016—prohibits market abuse practices, thereby increasing market integrity and investor protection and enhancing the attractiveness of the EU securities markets for capital raising. It gives EU regulators powers and responsibilities to prevent and detect market abuse; the Financial Conduct Authority is the regulator that currently enforces it in the UK. MAR applies to financial instruments traded on EU trading venues, as well as market abuse that concerns such instruments anywhere in the world.

The 2018 draft regulations will make amendments to MAR and related legislation to ensure that the UK continues to have an effective regime to regulate market abuse once it leaves the EU. In line with our general approach of onshoring EU legislation by transferring powers and functions in the remit of EU authorities to the appropriate UK institutions, they will transfer powers from the European Commission to the Treasury, including the ability to make delegated Acts related to market abuse, and from the European Securities and Markets Authority to the FCA, enabling the FCA to make binding technical standards.

The FCA has consulted on its proposed changes to its binding technical standards, and it will continue to enforce the market abuse regime in line with its current role as part of the EU framework. That approach reflects the FCA’s extensive experience, expertise and capability to continue in that function post exit. I remind the Committee that it has 158 full-time employees working on Brexit—an increase from 28 in March 2018—and that in a few months it will publish its plans for the year 2019-20.

Furthermore, the statutory instrument retains the existing scope of MAR, so that it continues to apply to financial instruments traded on both UK and EU trading venues, as well as to conduct anywhere in the world that concerns these instruments. That means that the FCA will continue to be able to investigate, prohibit and pursue cases of market abuse related to financial instruments that affect UK markets, as far as is possible in a no-deal scenario. The scope has been limited to the UK and EU, and is not worldwide, given that markets in both jurisdictions are highly integrated due to the current arrangements.

The SI also retains exemptions in MAR—and amends the scope of the exemptions to UK-only—that relate to certain trading activities that cannot be enforced against the regulation[Official Report, 5 February 2019, Vol. 654, c. 1MC.] They include exemptions on monetary and public debt management activities, buy-backs and stabilisation, and accepted market practices. Power will be conferred on the Treasury to extend the exemptions related to monetary and public debt management activities. That power is currently held by the Commission.

In addition, the SI retains references to emission allowances. That will allow UK firms to continue to participate in secondary market trading under the emissions trading scheme, despite the UK leaving it, and will enable the FCA to continue to monitor and enforce against UK-registered emission allowance market participants.

Additionally, the SI removes co-operation requirements between the UK and EU counterparts. The UK will no longer be obliged to share information related to market abuse with the EU, given that there would be no guarantee of reciprocity. However, the FCA will still be able to respond to information requests from third-country regulators; indeed the existing domestic framework for co-operation on information sharing with countries outside the UK already allows for that on a discretionary basis.

Finally, the SI will make further amendments to retained EU and UK legislation, including EU legislation that amends MAR, to ensure that it is operable in a UK-only scenario; to the Criminal Justice Act 1993 to remove references to directly applicable EU regulation; and to the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 to ensure that the UK’s market abuse regime works effectively once the UK leaves the EU.

British Bioethanol Industry

Greg Knight Excerpts

Wednesday 16th January 2019 Westminster Hall

[Nic Dakin]

The Minister has agreed to meet MPs of different parties who have an interest, particularly a local interest. I would certainly be very keen to update the right hon. and learned Gentleman on the outcome of that meeting. Should he be available and want to join us, I am sure that would be possible.

[Sir Greg Knight (East Yorkshire) (Con)]

I declare an interest as the owner of several older vehicles. Is the hon. Gentleman aware that the Government are right to be careful in introducing E10, which is not compatible with vehicles manufactured before 2000, so it is essential that E5 or less remains available?

[Nic Dakin]

Nobody is arguing that E5 should not be available. There was an excellent Radio 4 “File on 4” programme just before Christmas that featured Tony Wood, who runs a garage and owns 3 MGs. The reporter Simon Cox asked him about the impact of E10 fuel on older cars such as Wood’s MGBs:

“And if they brought in that E10 fuel, what effect—if any—do you think it could have on it?”

Mr Wood replied:

“Well, of course the jury is still out on that, because nobody really knows, but we’ve been running E5 for a number of years and there were stories when E5 came in of the sorts of effects it would have on your fuel hoses, but in real terms E5 has not proved to be much of a problem because most cars have already had their fuel lines changed at some point or another for more modern materials.”

Mr Cox then asked:

“So if the concern with bringing in E10 was the effect on old cars, it sounds like that doesn’t really stack up.”

Mr Wood replied:

“Well, in my opinion it’s probably less of an issue than it has been made out to be.”

Everybody would hope that that would be the case.

[Sir Greg Knight]

The hon. Gentleman is being very generous, and I hear what he is saying. Will he take it from me that there are cases of E10 dissolving sealants in fuel tanks and blocking fuel lines, which could be very dangerous in some cases?

[Nic Dakin]

I am drawing on the expertise in that “File on 4” programme. Obviously, any serious issues need to be looked at properly. Nobody wants the introduction of a new fuel to have disadvantages for people. It is very important that E5 remains available, as the right hon. Gentleman indicated.

The British bioethanol industry is perhaps not as widely known as it should be, but it is something of a British success story. Over £1 billion has been invested in the past decade, allowing British workers using British-grown produce to produce British bioethanol to help fuel British vehicles and feed British livestock, while reducing the UK’s carbon footprint and putting fewer pollutants into the atmosphere.

Until very recently, the UK had two of Europe’s biggest bioethanol plants: Ensus created a state-of-the-art facility on Teesside with an initial £250 investment in 2010, and Vivergo Fuels created a £400 million plant in Hull in 2013. Both distilled locally grown wheat to produce bioethanol, with protein-rich animal feed created as a by-product. The Ensus plant could produce 400 million litres of ethanol a year, and Vivergo Fuels 420 million litres. Each employed over 100 people directly as well as supporting a further 6,000 supply-chain jobs, including farmers and hauliers. The UK also has a further plant in Norfolk owned by British Sugar, which can produce 70 million litres a year.

As the Minister is well aware, Vivergo announced in September that it was closing its plant in Hull, and Ensus announced that it was pausing production at its plant on Teesside in November. It is not an overstatement to say the industry has collapsed in only a matter of months, and its future is dependent on the Government taking urgent action on the introduction of E10.

--- Later in debate ---

[Ms Ghani]

I do not think I described it as a barrier but a challenge. We must understand needs and impacts on consumers, which is why we should not rush, but ensure that what we do has a positive impact on all people.

[Sir Greg Knight]

I think the point made by the hon. Member for Stockton North is a good one: a choice of fuels available at the pumps needs to remain, and those fuels need to be properly labelled so that owners of cars not compatible with E10 are made aware.

[Ms Ghani]

My right hon. Friend makes a very valid point about choice; there should choice also in the cost of refuelling cars and appropriate labelling, too.

Draft Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018

Greg Knight Excerpts

Monday 17th December 2018 General Committees

[John Glen]

The hon. Lady is absolutely right to draw attention to the significant resources that will be required. The FCA has been in conversation with my officials in the Treasury, and we are reassured that it is in a position to do the work, and that it can do so under the provisions of the levy that it has.

[Sir Greg Knight (East Yorkshire) (Con)]

Will the Minister confirm, for the avoidance of all doubt, that all the powers in the regulations are temporary and time-limited, and that the powers do not give rise to the right to increase taxation?

[John Glen]

I can absolutely give my right hon. Friend that assurance. I will go on to set out some of the additional safeguards.

Cat Welfare

Greg Knight Excerpts

Tuesday 11th December 2018 Westminster Hall

[Rehman Chishti (Gillingham and Rainham) (Con)]

I beg to move,

That this House has considered cat welfare.

I am grateful to you, Mr Hollobone, and I am grateful that the Minister is in his place. This debate about cat welfare is linked to a private Member’s Bill that I presented to the House in July 2018, after speaking to a fantastic local charity in my constituency, Animals Lost and Found in Kent. To be frank, I was not aware of its great work until we were looking at the national volunteers charity day and my wonderful staff member Finlay, who is sitting in the Gallery behind me, said, “This is a list of charities in the constituency. Which one would you like to go and visit?” So I said, “Animals Lost and Found in Grange Road, Gillingham. Let’s go and see the great work they do.”

Meeting Natasha and Dee was inspirational. They are two individuals who do not have a lot of money, but they do have an amazing heart in wanting to do the right thing and ensuring that animals that have been abandoned, lost or injured get the support they need. I went to the back of their house and I saw a number of cats who had been neglected, injured or abandoned. I said to Natasha and Dee, “What can I do to help you?” They said that the legislation needed to be looked at.

There are 11.1 million cats in our country, who are part of our everyday families. They bring immense happiness to each and every one of us.

[Sir Greg Knight (East Yorkshire) (Con)]

I am delighted that my hon. Friend secured the debate. Is he aware that in 2016 the press reported 202 cats as having been shot in the United Kingdom, with 90% shot in either England or Wales, where we have more lax laws on air rifles? Does he agree that we should look at tightening up the law on the possession and ownership of airguns?

[Rehman Chishti]

I am grateful to my right hon. Friend for that important information from 2016. I was made aware of specific points about firearms, banning electric training aids and the control of airguns by the People’s Dispensary for Sick Animals—the wonderful charity that does great work in this area—but I was not aware of his specific point. It is absolutely right that we do everything we can on the regulation of those firearms to prevent that kind of completely unacceptable behaviour and to ensure that the welfare of animals is protected at every level.

The amazing joy that these wonderful animals bring to our lives also means that we have a responsibility to do everything we possibly can to ensure that their welfare is protected.

--- Later in debate ---

[David Rutley]

I join my hon. Friend in congratulating his constituent on her work in Framlingham and thanking her for it. If he will provide details, I will not only put my thanks to her on the record, but I will write to her, too, given that it has been her life’s work. I appreciate the contribution that my hon. Friend has made in putting that before us.

There are so many good causes and good welfare groups that take the cause further forward, whether that is Cats Protection, the RSPCA, Battersea Dogs and Cats Home or Blue Cross. They are absolutely committed to the welfare of cats and various other animals. Through their dedicated volunteers, they ensure that in many cases cats that have been lost can be reunited with their owners. They also rehome cats.

Before I get on to the substantive point of the debate, my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) raised an important point about air weapons. I know his interest in these matters and I recognise, along with many others, the widespread concern about the shooting of cats with air weapons. Anyone who does that is liable to prosecution for causing unnecessary suffering to an animal. The maximum sentence is currently six months in prison, but that could be extended with new legislation that we are looking to put to the House in due course. A review of air weapons regulation was announced in October 2017. We are now considering what needs to happen with the licensing system and will announce the outcome shortly. That will help address some of his concerns.

[Sir Greg Knight]

I am most grateful to the Minister for that response. While he is reflecting on the matter, will he look at what has happened in Northern Ireland, which has a system of licensing for airguns? The number of cats reported in the press as being shot has dropped.

[David Rutley]

I must confess that I was not aware of that. I am grateful to my right hon. Friend for raising what goes on in Northern Ireland with me. I am sure that the hon. Member for Strangford is aware of that, too. I will follow up with officials and see what we can learn.

Animal Rescue Centres

Greg Knight Excerpts

Tuesday 4th December 2018 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I beg to move,

That this House has considered animal rescue centres.

It is a pleasure to serve under your chairmanship, Mr Hollobone. Having lost two thirds of my first minute, I am pleased that my speech will go on for only 12 minutes, so I should be able to accommodate one or two colleagues who have indicated that they might wish to intervene. I am grateful for the opportunity to raise this issue. I thank the Royal Society for the Prevention of Cruelty to Animals, Dogs Trust, Battersea Dogs & Cats Home and Blue Cross for their briefings, and Richard Mitchell in my office for pulling them all together. I am pleased to see the Minister in his place.

This is a relatively simple issue: animal cruelty is wrong, we recognise that in our laws, and there are penalties for those who break those laws. But there is an ongoing debate in Government about whether those laws need strengthening. There seems to be a consensus across most animal welfare organisations, which have long campaigned for increased sentences for animal cruelty and are working to change legislation, to increase the maximum sentence from six months to five years’ imprisonment. Some 250,000 pets who have been badly treated, abused or abandoned enter their centres every year, yet the custodial penalty of six months on conviction is the lowest custodial penalty in 100 jurisdictions across four continents.

[Sir Greg Knight (East Yorkshire) (Con)]

Does the hon. Gentleman accept that the consensus on the need for change reaches this side of the House too? Does he agree that there is a good case for setting up an animal abuse register, so that those who abuse animals can be tracked down and prevented from keeping animals in future?

[Jim Fitzpatrick]

I very much take the right hon. Gentleman’s point that this is not a party political issue. Indeed, most of my comments do not attack the Government but commend them for the comments and proposals they have made. However, we need to move on. He makes an interesting suggestion, and perhaps the Minister will respond to it.

Animal cruelty offenders are five times more likely to have a violent crime record. Welfare organisations were pleased when the Government issued the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill in December 2018. Those organisations have long argued that several of the activities covered by the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018 were in serious need of review.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on bringing forward this debate about animal rescue homes, which do a vital job looking after unwanted animals. He made his case with characteristic clarity and enthusiasm. No doubt he drew on his time as a respected Minister of State at DEFRA between 2009 and 2010. I am grateful for the tone he struck, and for the energy he put into his speech.

I acknowledge the valuable work that animal rescue homes up and down the country do to rescue and rehome thousands of sick, abandoned and stray animals each year. The wife of the hon. Member for Strangford (Jim Shannon) obviously does important work in that regard, as do many volunteers, and we should thank them for that. The work of rescue homes is taken for granted by too many. We should remember that most people working in those homes are volunteers, who are incredibly dedicated to the welfare of the animals in their care.

The RSPCA, Dogs Trust, Battersea Dogs & Cats Home and Blue Cross are well known to us and do fantastic work rescuing, caring for and rehoming animals in their care. We can be confident that animals in those organisations are looked after to the highest welfare standards, but we should not forget the smaller and nationally less well-known rescue homes that also work non-stop to care for unwanted and stray animals in our local communities.

[Sir Greg Knight]

I do not expect an immediate answer, but will the Minister at least reflect on the potential for introducing an animals abuse register, listing those who have been convicted of animal cruelty and banned from keeping animals?

[David Rutley]

I thank my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) for raising that issue. I heard what he said in his remarks earlier. The records of people convicted of animal welfare offences are recorded on the police national computer. I will gladly pick that issue up with him separately to explore this further, if he would like to do so.

Improving and ensuring the welfare of animals is at the heart of our recent welfare reforms. We have introduced regulations which came into force in October, including a requirement that licensed breeders should show puppies with their mothers. Local authorities also have more powers to inspect and enforce regulations. The hon. Member for Islwyn (Chris Evans), who is no longer in his seat, talked about the need to keep focused on welfare standards with breeders. Our actions do not stop there. The Government will also increase the maximum penalty for animal cruelty offences. It was announced last year that the custodial maximum penalty for animal cruelty will increase from six months’ imprisonment to five years. That remains the Government’s commitment and we will introduce it as soon as parliamentary time allows.

Folic Acid Fortification

Greg Knight Excerpts

Thursday 25th October 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Nigel Adams)]

I beg to move,

That this House has considered folic acid fortification.

This week is Spina Bifida and Hydrocephalus Awareness Week, so it seems fitting to be having this debate today. The House will have heard the Minister with responsibility for public health, the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Winchester (Steve Brine), announce during Health questions on Tuesday that the Government are launching a public consultation in early 2019 on the proposal to add folic acid to flour. This issue has attracted wide interest from a large group of stakeholders, and it is important that we properly consult on the proposal, to ensure that all people have an opportunity to register their views. We will be encouraging people to take part in the consultation.

[Sir Greg Knight (East Yorkshire) (Con)]

During his speech, will the Minister tell the House why the Government have apparently ruled out a publicity campaign to encourage those who are at risk to take folic acid supplements and are instead proposing this mass medication?

[Nigel Adams]

We will be encouraging all stakeholders, as well as the public, to take part in the consultation. I will certainly look into the matter that my right hon. Friend has raised and ensure that someone writes to him.

Draft Government Resources and Accounts Act 2000 (Audit of Public Bodies) Order 2017

Greg Knight Excerpts

Tuesday 12th December 2017 General Committees

[Andrew Jones]

Given that the list of bodies includes the Home-Grown Cereals Authority, the Milk Development Council and the Meat and Livestock Commission, we should be grateful that we have not had more hideous puns from the shadow Minister. I am grateful for the Opposition’s support for the order, and I of course recognise that the work of the auditor teams up and down the country is very valuable. They do indeed have the resources they need, and we have a very positive financial settlement for them.

[Sir Greg Knight (East Yorkshire) (Con)]

Can the Minister tell the Committee whether the measure applies to Scotland and Northern Ireland? Would it make any difference if one of the bodies mentioned in article 4 were to move to Scotland or Northern Ireland?

[Andrew Jones]

This is a UK-wide measure; it is a UK body. I commend the draft order to the Committee.

Question put and agreed to.

Finance Bill

Greg Knight Excerpts

Tuesday 12th September 2017 Commons Chamber

[Craig Mackinlay]

We will be having a debate about that tomorrow, I believe. The fact is that we had a £150 billion per year deficit when we came into power with our then Lib Dem partners in 2010, and we have got that down to just a little over £50 billion a year. A GDP borrowing requirement of 10% in 2010 is now down to 3%. I certainly hope that as we grow this economy we will be able to look at public sector pay in a more reasonable and appropriate way in future, but that is a debate for tomorrow and for years ahead.

I was very taken by the maiden speech made by my hon. Friend the Member for Moray (Douglas Ross) and especially by his story about the previous Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), putting a seal on that barrel of cask whisky. Let us hope that he put a seal on it meaning that it may be opened tax free, for the benefit of all, in due course.

The statistics on what we have achieved speak for themselves. The one that bears the most fruit is that on the lowering of corporation tax. We generally tax things that are bad. We put high rates of tax on things such as cigarettes or alcohol because we want to stop their use to some extent because of their perilous health effects—particularly those of cigarettes. Why would we want to follow Labour’s proposal to raise the tax on corporates? It seems to me that unless we want to supress profit and jobs and to do entirely the opposite of what we actually want to achieve, raising tax on corporates is the worst thing we can do—and it has been shown to be the worst thing. Members should not take my word for it. The Institute for Fiscal Studies took the Labour party’s spending plan to pieces before the election.

That is the good news. I am not always in favour of Finance Bills, and I am particularly not always in favour of one of this size. As I have said before, I am a chartered accountant and chartered tax adviser, and I still work as that from time to time. I am afraid that it does no good for UK competitiveness that we now have one of the most complex tax systems in the world. It now runs to 22,000 pages and 10 million words. Compare that with the entire tax system of Hong Kong, which runs to 350 pages in its entirety. In the early days of my training, in the late ’80s, the tax law rewrite was being discussed. We then had the Office of Tax Simplification, run for a time by John Whiting CBE, a man I know well and a fellow member of the Chartered Institute of Taxation. It is time to do what we can to slim down legislation and make it fit for purpose.

Much of what we have been doing of late is going in the right direction. Let me canter through various parts of the tax system and give my comments thereon. On inheritance tax, the proposals to give an increasing exemption for the family home must be the right way forward. For many people, the reason their property has become of such high value is often not to do with their circumstances. It might have been caused by quantitative easing resulting from the 2008 failure and the inflation of prices. Of course, the north-south divide and the sheer desirability of London and the south-east, as well as restrictions on planning, have caused a huge asset bubble.

One area that has much to say for itself and has been discussed a lot this afternoon is the extension of inheritance tax to non-domiciles. The situation has been daft for a long time as non-doms have benefited from tax exemptions across vast parts of our tax code, but we should strike a note of caution this afternoon. Clause 33, expanded in schedule 10, deals with non-doms who use a company or trust to hold UK residential property. There is perhaps a flaw in the Bill as drafted that needs clearing up, and that could be done in Committee.

The situation as it is designed deals with non-doms who own a residential property through a foreign company. Let us say that that non-dom is a New Zealander, who owns a property portfolio through a New Zealand company. If that were the case, he could now be subject to inheritance tax on that UK property.

That in itself is not an issue, but my worry is that if an alternative non-dom had provided the financing to the non-resident company for that UK property purchase—this could involve a vehicle that had never had anything to do with the UK—there is potential under the Bill as drafted for that loan to be caught under UK inheritance tax rules. I am not entirely sure that that was the intention. For example, a Swiss investment company owner—or even a foreign discretionary trust—providing finance for a non-dom company to buy UK residential property could find itself within the inheritance tax net even though it had never set foot in the UK. A foreign discretionary trust could even find itself facing 10-year principal charges. Again, I am not sure that that was the intention. We have done much—starting some years back with the annual tax on enveloped dwellings and the extension to stamp duty for properties purchased that way—to try to unwind corporate structures that own property in the UK. No other party has tried to make the playing field level for UK citizens in this country who are doing the right thing, but we are now rightly extending those measures to include non-doms.

I know that we have had the election, and circumstances have brought us to where we are today. There are no surprises in the Bill, and it is not retrospective, but I believe that we should avoid the practice of proposals coming into force, many of them on 1 April this year, before the legislation has been agreed in this House. For instance, if the proposals on non-doms owning a residential property through a foreign company become law, a situation could arise in which a person who had died sometime after 1 April was subject to a law that had not yet been enacted because it had not received Royal Assent. We should avoid situations such as that.

My concern about some parts of the inheritance tax extension to non-doms—I am not saying that it is not right at all—is that we need to get the balance right. My right hon. Friend the Member for Wokingham (John Redwood) highlighted the fact that there is a balance to be struck between making Britain an appealing place for business and deterring non-doms from coming here at all. Many of those who come will be spending out on improvements and jobs as well as contributing to the VAT take. There is a balance to be struck and, unlike Labour, we know where that balance is. My hon. Friend the Member for Newark (Robert Jenrick) put it rather well when he said that we would rather see more people becoming wealthy than see the poor suffering as long as the rich did too.

Pensions have gone through what can rightly be called a revolution over the past few years, starting with the pension freedoms that came into play in 2015. The way in which we took our pensions was very restrictive. We accumulated our funds, but we had no choice but to put them into annuities that could, depending on the interest rate at the time, have provided a rather poor outcome. It is therefore absolutely right that we now have pension freedoms. We can do what we like with the pot that we have accumulated. We can have draw-down income, and we can use it far more flexibly.

It is recognised that massive amounts of tax relief are available in the area of pensions. There is nothing wrong with the current annual allowance of £40,000; that is the right level. However, I do have some problem with the lifetime allowance of £1 million, because I do not think a senior nurse aged 45 to 50 in the NHS pension scheme was ever intended to be knocking on the door of lifetime allowances. If somebody with their own self-invested personal pension or defined contribution scheme has a good fund manager and has done well during their working life, is it fair for them to be penalised by comparison with somebody who has not had such a good fund manager and whose returns have not been quite so good? I am not in favour of the lifetime allowance, but I am certainly in favour of the annual allowance.

Auto-enrolment has been one of the great successes, because I do not think that anybody is saving enough towards their pension.

[Sir Greg Knight (East Yorkshire) (Con)]

I am reflecting on what my hon. Friend said about allowances. Is he arguing for allowances to be automatically uprated to take account of inflation?

[Craig Mackinlay]

There is an uprating coming into place to allow the floor to increase from £1 million in due course. There used not to be a lifetime allowance, but it started at £1.8 million some years ago and has come down to £1 million.

The flexibility of SIPPs and the success of auto-enrolment are essential if we are to rebalance our savings rates, which have been fairly poor by comparison with those of other G20 countries. I am looking forward to seeing how lifetime ISAs will plug any holes in the pension market. We have had a lot of change, and even though much of it has been to the good, we are in danger of losing stability. People become rather unsure about what will happen in the pension market and whether the changes will affect them. The last thing we want to do is to deter people from saving for their pensions.

On IR35, much has changed in the last year, particularly in terms of personal service companies that provide services to public sector bodies. It has long been known that personal service companies and the IR35 rules have been abused—that was recognised in the House of Lords’ report—and so I welcomed the change that came in from April this year. It is not right that personal service companies, which are, by any other measure, a disguised form of employment, are not being taxed in the right way. I fully support what is happening, but I do think that we need greater clarity over employment status.

The rather complex process of recognition of whether a person is properly self-employed or properly employed is quite confusing for a small employer. That is still somewhat vague, and there is some gold-plating in the public sector because of worry about people’s status. I regularly see people who work through a proper personal service company and who are clearly self-employed, not in an employment situation. Out of fear, the public sector is tending to move everybody who works in such a way to an IR35 status, which adds to costs in the sector. It is a very difficult balance.

Termination payments have been discussed this afternoon. My worry about them is that the £30,000 level has been in place since the early 1990s. If it were more realistically upgraded in accordance with inflation to today’s values, it would be in the region of £70,000. Other changes are likely to bring more termination payments—most likely correctly—into tax.

I turn to the dividend tax changes. Dividend tax has been subject to huge change over the last few years. Just two years ago, it was announced that the first £5,000 would be completely free of tax, after which an individual enters the regime of 7.5% while they are within the basic rate band. I am concerned that we have moved so quickly to cut the allowance from £5,000 to £2,000. In doing so, we have not provided a stable playing field for people to get used to. I can certainly understand, from the Treasury’s point of view, that this has been an area of tax loss. It has long been known that owner-managers probably give themselves the lowest level of salary, but then pay themselves through a dividend route. People recognise that the situation has perhaps been too good for too long and that things now have to change, but I am concerned that it did not take very long for the allowance to be reduced from £5,000 to £2,000.

I realise that much of the Finance Bill—the provisions amount to some 300 pages— concerns the corporation tax loss regime and the restriction of interest. I will canter through this as fast as I possibly can. Brought-forward losses may now be used very flexibly, which is very good for the smaller company. The one complexity that the Bill will bring in is that there will be two lots of losses: old losses, which have to be used in the old way; and new losses, arising after 1 April 2017, which will be used in the new way. For the smaller company, that will add a level of complexity that we perhaps do not need. I therefore seek from the Treasury Bench some change, if possible, to allow smaller companies some degree of exemption.

All in all, we are in a very good place with our tax system. There could be more simplification, and I have previously raised with Treasury Ministers my concerns about various aspects of the system. I hope that we can look again at one concern that turns up regularly in my inbox, which is the restriction on landlord’s interest. That has been ill thought out and could be looked at again.

My hon. Friend the Member for North West Hampshire (Kit Malthouse) and I often discuss enterprise investment schemes and seed EISs. The sad fact is that the number of seed EISs, which should be a very flexible way of getting small amounts of capital into small start-ups, have not really been used as widely as they should have been. From my perspective of having tried to put them in place professionally, it is very unlikely that a smaller business can afford even the modest professional fees necessary for raising such a small amount of capital. Some flexibility is needed if we are to encourage seed EISs.

We need to continue to debate tax policy. Much was said by my hon. Friend about how we have a tax system that was designed with the 19th and 20th centuries in mind—trying to tax things or recognisable services—but the new digital economy means that the playing field is rather different. We need to think rather carefully, perhaps on a cross-party basis, about how we can tax the digital economy properly. We also need to discuss what our tax policy is trying to achieve. For too long, whenever we have tried to make a small change, it has either been howled down or the media have got involved, and I am afraid that we have become somewhat fearful of change. It is now time for cross-party working on what we are trying to achieve in raising the appropriate amounts of tax in the modern age.

Much has been said about productivity, but it is very difficult to measure—I am sorry to be so technical—especially in services, which are rather more prevalent in our economy than in those of other OECD countries. I know, however, that I would rather have lower levels of productivity and higher levels of employment than the massively high youth unemployment seen in other countries in the EU, which—by whatever measure—have managed to have higher productivity among those actually in work. I put that down to the more laissez-faire system under which we operate in the UK, where the employment rules are slightly more liberal. In France and Germany, employers dare not get it wrong, because they have very little flexibility in getting it right when they need to shed staff.

I will leave my thoughts on the tax system there, and I look forward to supporting the Second Reading this evening.