Money Laundering: British Banks

Debate between Helen Goodman and Simon Kirby

Tuesday 21st March 2017 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

Has the Minister discussed the matter with the former Chancellor, the right hon. Member for Tatton (Mr Osborne), who the US House of Representatives found intervened with the American authorities to prevent HSBC from being prosecuted in 2012? What has the FCA specifically done since the “global laundromat” was discovered in 2013?

[Simon Kirby]

I have not had that conversation with my right hon. Friend. It is fair to say that the FCA has carried out a number of investigations, and it is right and proper that it does so. The FCA is an independent operational body that we set up as asked, and it would not be appropriate for me to comment.

Oral Answers to Questions

Debate between Helen Goodman and Simon Kirby

Tuesday 28th February 2017 Commons Chamber

[Simon Kirby]

I was going to make a joke about the Liberal Democrats, but as there are none in the Chamber I will merely reassure my hon. Friend that the Government have no current plans to introduce a robot tax.

[Helen Goodman (Bishop Auckland) (Lab)]

Current tax rules do not allow companies to set the cost of mathematical research against tax. That is obviously very out of date in an era of data science, and it does not apply to science and engineering. Will Ministers take this as a Budget representation, please?

[Simon Kirby]

We have significantly increased R and D tax credits; and, as a mathematician, I agree with the hon. Lady that maths is always important.

Quantitative Easing

Debate between Helen Goodman and Simon Kirby

Thursday 15th September 2016 Commons Chamber

[The Economic Secretary to the Treasury (Simon Kirby)]

I thank the hon. Member for Ross, Skye and Lochaber (Ian Blackford) for securing the debate. The subject of quantitative easing attracts a wide range of opinions, as has been convincingly demonstrated in the Chamber today. This Back-Bench business debate has been an example of something that is small but perfectly formed. It has been a very interesting debate. The topic is extremely important to our economy and I know that Members across the House will join me in thanking the hon. Gentleman for giving us the opportunity to discuss it.

Let me begin by setting out briefly the Bank of England’s role in the monetary policy of this country. The first thing to stress is that the Bank of England, and its Monetary Policy Committee, are rightly independent from the Government. The MPC holds responsibility for setting monetary policy to meet its clearly defined objectives, as set out in law. Its primary objective is to maintain price stability, defined by the Government’s inflation target of 2%, as measured under the consumer prices index. The MPC is empowered to deploy unconventional policy measures, such as quantitative easing, when necessary, to meet this objective. Wherever such instruments are used, the committee is expected to work with the Government to make sure that appropriate governance arrangements are in place to ensure its accountability.

Following the financial crisis in 2009, as Members are aware, the Bank of England was authorised to begin quantitative easing, establishing an asset purchase facility to improve liquidity in credit markets. This provided an additional tool by which the Bank’s committee could adjust our monetary policy. In August this year, the MPC judged that in the absence of monetary stimulus, there would be undesirable volatility in output and employment, and a sustainable return of inflation to the target in the medium term was less likely. As a result, the MPC expanded its programme of asset purchases and established the term funding scheme as a mechanism to ensure that banks passed on the benefits of low interest rates to our businesses and to the public as a whole.

Although financial markets have reacted positively to the latest round of quantitative easing, it will take several months before we know how the economy has responded, as is always the case. Time will need to pass before it is possible to make a full assessment of the latest round of asset purchases. Both the Government and the MPC place enormous weight on the need to research the wider impacts of our monetary policy across our society. In line with our determination to make sure that this is a country that works for everyone, we want to ensure that our businesses and the general public all benefit from the lower borrowing costs established through the Bank’s monetary policies.

Let me deal with some of the points raised. The hon. Gentleman, the modest crofter from Skye, mentioned the need for fiscal stimulus. Monetary policy tools are the first line of defence against a macroeconomic shock, and the Government will set out their fiscal plans in the usual way in the autumn statement. The hon. Gentleman suggested that there had been little growth in M4 in the past eight years since QE was introduced. However, the relationship between monetary aggregates and inflation is tenuous, and monetary aggregates are not systematically targeted by central banks. To target monetary aggregates, there would have to be a direct relationship between the monetary supply and inflation. For this to be the case, there would have to be a degree of stability in the velocity of money—the speed at which money circulates around the economy. I hope that is clear.

The hon. Gentleman mentioned the impact on savers. Building a strong economy is in everyone’s interests, and the MPC’s remit makes clear that ensuring price stability is the prerequisite for economic prosperity. He also mentioned pensions, and the best possible protection for pensions comes from strong, sustainable employers and a buoyant economy, so it is important that action is taken to support that economy.

My hon. Friend the Member for Wycombe (Mr Baker) speaks with passion on this subject, and it is obviously of great interest to him. I have looked at his excellent website, stevebaker.info, where he considers, among other matters, whether the whole economic system runs on funny money. He mentioned wealth inequality and wealth justice, and those are two very important areas. The Governor of the Bank of England has stated that this package will ensure a better economic outcome for all. Economic recovery will boost incomes and help all individuals, including those at the lowest end of the economic distribution. Inequality is lower—we should not forget this—than it was in 2010.

[Helen Goodman]

Will the hon. Gentleman give way?

[Simon Kirby]

I would rather not give way, because I am genuinely trying to answer everyone’s points. I do not have a lot of time, because everyone has been so full in their contributions, but the hon. Lady can speak to me afterwards. If she wants to raise an additional point, I would be really pleased to deal with that.

The hon. Lady mentioned that QE is the responsibility of the MPC of the Bank of England. She questioned whether that was right, and she questioned the accountability of the Bank of England. I say to her that Members have the opportunity to engage with the MPC through, for example, the inflation report hearings of the Treasury Committee. The MPC is also accountable to the public. For instance, in October the Governor and the deputy governors will spend the day in the midlands meeting a wide cross-section of society to listen to the feedback and ideas of the public, and I am sure that they will take that feedback and those ideas very seriously.

The hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) was very interesting—perhaps the most interesting point was the description of the crofter from Skye. He clearly feels passionately about this subject, and he made a useful contribution to the debate.

The hon. Member for East Lothian (George Kerevan) wanted to hear more about the autumn statement. I am very sad to tell him that he will be disappointed; he will just have to wait and see, as happens every year in the normal manner, no matter who is in government.

The hon. Member for Bootle (Peter Dowd) reminded us of what is now a dim and receding memory—the last Labour Government. He talked about how there was going to be hyperinflation and it did not happen, and about how the whole issue of QE was hotly debated at the time. I imagine that it is something that we will continue to hotly debate for some time.

To conclude, the independent MPC of the Bank of England has a hugely important role to play in these difficult times in maintaining monetary stability in this country. It has taken a range of steps to achieve this objective and will be closely monitoring the impact of this action. Let me remind the House once again that Members can take an interest; the MPC remains accountable to Parliament, and I would suggest that many more people take an interest in the inflation report hearings of the Treasury Committee.

Finance Bill

Debate between Helen Goodman and Simon Kirby

Wednesday 2nd July 2014 Commons Chamber

[Helen Goodman]

I am, because I know that my hon. Friend has a keen interest in that, as do people up and down this country.

So we have had big cuts to the Arts Council. The Government have also imposed big cuts on local government, and from answers that I have received to freedom of information requests, we now know that on average local authorities are cutting their arts provision by even more—some 14%. So, given the estimates in the Red Book of the value of this tax relief rising from £5 million to £20 million per year, we can immediately see that it does not compensate for the reductions that have been experienced in public support.

My hon. Friend is right: there is a big issue about what is going on in the regions. The “Rebalancing our Cultural Capital” report suggested that the Government were supporting cultural institutions to the tune of 14 times as much per person in London as elsewhere, and that is not conscionable in the long term for this country. It is clearly because of that concern about regional imbalance that the Minister has decided to provide a slightly more generous relief for touring.

[Simon Kirby (Brighton, Kemptown) (Con)]

Will the hon. Lady be very clear: is she opposed to the cuts in the DCMS, and if so, would Labour reverse them?

[Helen Goodman]

I think it must be a matter of regret to everybody in the House that DCMS has taken 36% cuts. Of course, the question whether they can be restored is, as the hon. Gentleman knows, a completely separate one. I am just pointing out that the tax relief, if the legislation is properly drafted, will not cancel out the effect of those cuts. I am hoping that no one on the Government side is trying, through some sleight of hand, to give such an impression.

To return to the point that my hon. Friend the Member for Darlington (Jenny Chapman) raised, it is my understanding that in Darlington, the theatre is what is called a receiving house. That means that new plays are not being made in Darlington. Companies come on tour to Darlington and their productions are shown for several days. There are many very good producing houses in the regions as well; one good example would be the Nottingham Playhouse, where they make plays and tour them, and sometimes they tour them to London—they have just had something on at the Almeida.

A receiving house will not get the benefit of this tax relief; it is the producing company that gets the benefit. Of course, it may be that if they get the tax relief or the tax credit, they could offer the production to the receiving house for slightly less money, which might ease the situation in a place like Darlington, but there will not be a direct benefit, as I understand it.

My next question is whether the definition of touring is the right one and whether the measure will address the regional imbalance. As my hon. Friend the Member for Newcastle upon Tyne North pointed out, it is completely sensible to say that the extra relief is given if the play is taken to more than six places, but we must question whether 14 productions in two places is an appropriate definition of touring. Some of those who responded to the Government’s consultation said it would be a good idea to have a geographical definition of touring, and I do not understand why the Minister has not done that. I think he is risking some revenue leakage on this point. To give a concrete example, a play could be on on one side of Shaftesbury avenue for 14 nights, then move to the other side of Shaftesbury avenue for 15 or 25 nights and it would benefit, but the Government would not have achieved their policy objective of ensuring that the theatrical experience took in a new, wider audience.

I think there is a problem and I am disappointed by the way the Minister has drafted the provision; it is a weak spot. On the other hand, he might be being too restrictive in the number of production companies that can benefit, although we do not yet know how the guidelines will operate. In principle, of course it is a good idea to support British theatre. It is a great industry, we are very good at it and we have some of the best actors and theatre companies in the world, so in principle, it is a good idea to have a theatre tax relief, but I do have those two questions about those two parts of the new clause and the schedule.