Netflix: Tax Affairs

Ian Paisley Excerpts

Monday 3rd February 2020 Commons Chamber

[Dame Margaret Hodge]

Not only should they be making their fair contribution, but they use the services that other people’s tax pays for.

Netflix creates its content here, supported by grants that it receives here through our tax credit system, yet it pays tax on the profit that it makes here in the USA. Frankly, I say to the Minister: you couldn’t make it up. The situation is scandalous, intolerable and unfair. It is the sort of behaviour that really winds up the British public, most of whom are law-abiding taxpayers who never try to avoid their duty to pay taxes.

Let me explain the Netflix situation in detail. Netflix is the world’s biggest video-streaming service, with 167 million subscribers. The California-based company is the online home of popular shows such as “The Crown” and “House of Cards” and films such as “Marriage Story” and “The Irishman”, but while we all binge-watch Olivia Colman’s portrayal of the Queen Netflix has deliberately constructed a devious financial structure that has no other purpose than to avoid paying its tax.

The Netflix strategy is to be the biggest player in the online video streaming market, to buy out or undercut any rivals and to release a sea of content to attract a truly global subscriber base. For many years, the service ran at a loss to secure this dominant market position, but it is now operating in the black. Netflix’s global operating profit rose by an enormous 61% last year to £2 billion. By 2019, Netflix had 11.62 million UK subscribers, who generated a £1.08 billion income for the company, but under the ruse it employs any UK citizen who subscribes to Netflix is billed not in the UK but from a subsidiary company in the Netherlands.

The most recently published Netflix accounts for 2018—the only earnings declared here—amount to a very small proportion of its billion-dollar UK revenue. Money declared by Netflix in the UK is paid by the Dutch subsidiary to a much smaller subsidiary based in Britain, which makes up just a trivial proportion of the services the company provides. Tax Watch UK estimates that the actual profit Netflix made in the UK was close to £70 million in 2018, so the company should have paid over £13 million in corporation tax.

[Ian Paisley (North Antrim) (DUP)]

I appreciate the points the right hon. Member is raising about complex financial issues, but does she accept that the traffic is not all one way? In the last year, Netflix has invested more than £400 million in the UK, creating 25,000 jobs and productions, and has recently been driving the pioneering agenda of encouraging women into television and film making.

[Dame Margaret Hodge]

I am all for encouraging Netflix’s growth here, but I am afraid that that in no way mitigates its refusal to pay its fair share of tax.

Where Netflix’s UK profits do end up is a complete mystery. It uses a shady system of subsidiaries and shell companies based in tax havens to shift its profits and avoid paying its fair share in many jurisdictions. From the publicly available data and translating that data into pounds sterling, it looks as if between £251 million and £329 million of non-US profit was shifted into tax havens from the Netherlands. Netflix did pay some tax on profits. Ironically, over 90% was paid by the Netherlands-based company and went to Brazil, where the authorities use a withholding tax to extract money. Is it not astounding that Brazil is more efficient at collecting tax from digital companies than we are? If Brazil can tax Netflix, why can’t we?

The UK makes up 14% of Netflix’s non-US market. We provide a vital consumer base for Netflix, and much of its content is created here, so the intellectual property on Netflix’s product is developed here in the UK. Google always argued in the past with me that it should not pay tax in the UK because its intellectual property was developed in California. If that argument has any credibility, given that much of Netflix’s intellectual property is created here and funded in part by the taxpayer through tax credits, the case for taxing it here in the UK is irresistible.

Leaving the EU: Economic Impact of Proposed Deal

Ian Paisley Excerpts

Wednesday 20th February 2019 Commons Chamber

[Mel Stride]

I hate to disappoint my hon. Friend, ingenious and amusing though his question is, but I should point out just one fallacy in the premise of his question: these are not forecasts.

[Ian Paisley (North Antrim) (DUP)]

In the search for a withdrawal agreement that we can all support, can the Minister now confirm that the draft proposals have been put forward to Europe that would make a legally binding textual change to the withdrawal agreement?

[Mel Stride]

We have made it clear that our ambition is to strike an amended deal with the European Union, so that we put beyond doubt the issue of how permanent or otherwise the backstop arrangements might be. I am not in a position to comment on the specifics of the ongoing negotiations because I am not intimately involved with them.

Sport in the UK

Ian Paisley Excerpts

Monday 4th February 2019 Commons Chamber

[Mims Davies]

I hear the hon. Lady—she always wears the outfit of the day when mentioning her football club. It is absolutely vital that when sports clubs are doing well, the economic benefits are felt in the city. Southampton has had a difficult time recently and I know that the city, which is close to me, has felt those pains. I absolutely hear the hon. Lady about the transparency issue and the Premier League. There is work to do to keep those conversations going, but I hear her loudly, once again.

[Ian Paisley (North Antrim) (DUP)]

I know that a lot of what the Minister wishes to say will not apply to the devolved region of Northern Ireland, but I recognise that she has indicated how important sport is as an economic driver. Given that no devolved Government are currently operational in Northern Ireland, will the Minister encourage and pick up on those strands and push those issues, so that the North West 200, the biggest motorbike race and festival on the island of Ireland, and the Ulster Grand Prix, the fastest motorcycle road race in the world, are given encouragement and support by central Government?

[Mims Davies]

I hear the hon. Gentleman. Indeed, my officials and I have had conversations about making sure that we do not forget our links to Northern Ireland. In the sports cabinet, it was said very clearly that we cannot forget to focus on areas where there may not be that push right now. I will take that away as an action, and I am very happy to continue to look at that area.

European Union (Withdrawal) Act

Ian Paisley Excerpts

Thursday 6th December 2018 Commons Chamber

[Mr Hammond]

The hon. Lady is too absolutist. Yes, of course there is further negotiation to be done, but the shape and key elements of the deal are clearly set out in the political declaration. I have described some of them already today. Business will be able to begin to prepare. I completely accept that further clarity will arise during the ongoing negotiations in the transition period. I am sure that she has talked to businesses, so she will know that this is the way that business wants to go. The alternatives—of a no deal exit, or of trying to overturn the referendum decision and risk fracturing our country for a generation—are too awful to contemplate. We have to take this opportunity that is presented to us to protect our economy and to heal our country.

To protect the living standards of the people of the whole United Kingdom, we need to act now. We need to act now to end uncertainty, to protect jobs, businesses and prosperity and to begin to heal the divisions in our country. But what if we do not? What if we turn our backs on this opportunity of a negotiated exit and a transition to the future? I have heard that we have nothing to fear from no deal—nothing, that is, except a cliff-edge Brexit in just four months’ time; the end of frictionless trade with our biggest export market; restrictions on our citizens travelling in Europe; and being the only developed economy in the world trading with the EU on purely WTO terms with no customs facilitation agreements, no data sharing or protection agreements and no approvals regime to allow our industries to trade with their nearest customers and suppliers—just tariffs, paperwork and bureaucracy.

UK car exports would face tariffs of 10%. Many clothing exports would face tariffs of 12%. Agricultural exports would face even higher tariffs. Almost 90% of UK beef exports and 95% of lamb exports go to the EU, where they could face tariffs of over 70% and 45% respectively.

[Ian Paisley (North Antrim) (DUP)]

Did not the Bank of England, the Treasury and the IMF all incorrectly forecast economic woe if the people of the United Kingdom voted to leave in 2016? Indeed, they predicted 500,000 job losses before we even Brexit. As the Chancellor has outlined very well today, our economy is growing and, importantly, employment is increasing. There have been fantastic results since we voted to leave. If he was standing at the Dispatch Box today and arguing for a WTO agreement, the City of London and everyone else would still support him because they would have the leadership that the Government would be providing. The fact of the matter is that this country requires leadership to leave on WTO terms, not criticism about leaving.

[Mr Hammond]

I am afraid that the hon. Gentleman is just wrong on the question of the financial services community and WTO. The financial services community would not support a WTO exit. That would be the worst possible scenario for financial services, with no time for preparation. Frankly, given the role of financial services in our economy—7% of our GDP—and their even larger role in our fiscal economy, accounting for over 11% of our fiscal revenues, anything that damages that industry will be extremely damaging to our economy and our public services.

--- Later in debate ---

[John McDonnell]

Let me deal with that. I have with me copies of Labour’s composite motion on Brexit for conference—some of them have Labour party application forms on the back, which might interest the hon. Gentleman. That was a joke—[Interruption.] Not a very good one. At conference, we gave priority, which we have upheld, to securing a deal that will protect jobs and the economy. Only if we cannot achieve that do we have the fall-back position of a general election, but we are striving as best we can to secure the best deal.

[Ian Paisley]

I appreciate the opportunity that the shadow Chancellor has today to outline some of his views on this important matter. During his comments, will he also address the backstop issue and indicate to the House whether the Labour party would drop the backstop and the Northern Ireland protocol altogether? How will he ensure that Northern Ireland is treated fully as an integral part of the United Kingdom going forward?

[John McDonnell]

I will come on to that, but the point we have consistently made is that we would not need the backstop; we want a permanent customs union and a relationship with the single market.

Let me press on. Some, I know, long for a no-deal Brexit. I want to mildly chide the Chancellor because he was among the earliest to set that hare running. In an interview in January 2017, he unwisely promoted the idea of changing our economic model to make our country what was described as a low tax haven off the coast of continental Europe. Some seized on that to provide a vestige of credibility for their campaign to crash out of the EU.

The Government have put the cost of no deal at potentially a staggering 9.3% of GDP. The Bank of England said that a disorderly no-deal Brexit could cause more economic damage than the global financial crash of 10 years ago, with house prices crashing by 14% and unemployment reaching nearly 6%. I appeal to all hon. Members to recognise that we have a duty to our constituents not to allow that to pass. I give this assurance: Labour will not countenance no deal and will work assiduously to avoid it.

Let me also say this. The Government’s threatening Members with the prospect of a no-deal Brexit to engender support for their own deal serves only to reveal their desperation. It is proving to be completely counterproductive.

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

My constituency voted overwhelmingly against the European Union; it voted to leave. Indeed, it was the constituency with the largest leave vote in Northern Ireland and about the fifth largest in the whole United Kingdom.

My constituents did not vote that way out of some sense of stupidity. I want to paint a picture of what my constituency represents. It makes up about 25% of Northern Ireland’s manufacturing base—precision engineering, aerospace, pharmaceuticals and bus manufacturing; about 60% of the buses driven on the roads of this nation’s capital are engineered and made in my constituency.

The rest of the constituency is made up of a huge hinterland of agri-food production and, at the top end, a huge tourism sector, which has seen major growth in customers from outside the EU in recent years. My constituency is diverse, wealthy and economically important to Northern Ireland, with a huge economic drive. It was part of the European Union for 40 years. The agri-food operators there are major producers of milk, beef, lamb and poultry—most the poultry sold on this side of the water is grown in my constituency. When people walk into their supermarket here, they are more than likely picking up a County Antrim turkey, piece of pork or chicken.

It could have been said that the farmers in my constituency would never be interested in leaving, because they were part of the European club. They had been in a club for 40 years, were given the choice to leave and told that they would no longer have all the largesse they had been given, but still, looking at the ballot paper, willingly decided that they wished to leave. They did not do it through stupidity, but through knowledge. Clearly, the club they had been in for 40 years was failing them in such a way that they felt that this was an opportunity to find a new direction—new hope, new employment and new opportunity.

In thinking about where we should go next and about the battles and divisions that have arisen, I am reminded of a quotation from C. Desmond Greaves, the Irish historian, who said:

“All fundamental battles in British politics take place in the Conservative party, with everyone else having bit parts.”

That may not be entirely accurate, but some of the huge issues that have driven our nation—whether it is the corn laws, the imperial preference in the 19th century, the appeasement of the Nazis in the 1930s or our relationship with the EEC in the 1960s—were about divisions in the Conservative party.

I will say this. The issue is not about how the Opposition side of the House are going to vote, but what the Government side are going to do. They have a choice: they can stuff Northern Ireland into being some sort of adjunct of this kingdom and damage it for generations—forever—or else they can say that there is a better way, an alternative, and we will find it. We are already hearing mutterings from Downing Street that alternatives can be found and that there can be certain twists and turns. Please, Government Front Benchers, I beg you: help us find that alternative and we will help you and help make sure that this country goes on from strength to strength.

--- Later in debate ---

[Dr Fox]

Indeed—my hon. Friend is right to say that that was correct in all scenarios. The doom and gloom pushed in some quarters is not consistent with the reality of Britain’s economic performance.

Now is the time to raise our sights and acknowledge that there is a world beyond Europe and there will be a time beyond Brexit. The referendum settled the question of our departure from the European Union. This House voted overwhelmingly to hold that referendum. The British people voted on the understanding that we would enact the result.

In 2016, we did not have a consultation with the British public; we were given an instruction to negotiate this country’s withdrawal from the European Union. That point was made in powerful speeches by my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) and my hon. Friends the Members for Tonbridge and Malling (Tom Tugendhat), for West Worcestershire (Harriett Baldwin), for Berwick-upon-Tweed (Anne-Marie Trevelyan) and for Stafford (Jeremy Lefroy), among others. They all come from different parts of the political debate—a clear indication that we have to find a compromise that makes this workable. The withdrawal agreement achieves just that. Most importantly, it enacts the democratic will of the British people.

I remind the House that this is the only deal on the table. It has been painstakingly negotiated by both sides and of course we do not have every single thing that we wanted—but then again, neither did the EU. That is the nature of international agreements. The deal is a compromise, as was pointed out by my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) in an outstanding, personal and passionate speech, the likes of which we would love to hear more of in this House. That message was echoed by my hon. Friend the Member for Eddisbury (Antoinette Sandbach) and my right hon. Friend the Member for Ashford (Damian Green).

Do I think the agreement is perfect? No, I do not. Did I think it would be? No, I did not. But does it do enough to get us out of the European Union? Yes, it does. For those who want another referendum, let us be very clear: the one thing that will not be on offer in any further referendum, just as it was not in the last one, is the status quo. The status quo has never been on offer; this is a dynamic progression in the European Union. The EU is committed, as it has been since the treaty of Rome, to ever closer union. We wish our European friends well in that endeavour, but it is not the right course for Britain. We must be free from the one-way ratchet of federalism, as my hon. Friend the Member for South Dorset (Richard Drax) said in his powerful intervention.

[Ian Paisley]

It was Samuel Johnson who observed that nothing so concentrates the mind like a hanging. As the gallows are being built next Tuesday for this withdrawal agreement, can the Secretary of State confirm whether any discussions are taking place about putting this motion off or about altering it in any way, or are the Government fixed on walking towards those gallows?

[Dr Fox]

The Government will continue to make the case for what they believe is a balanced and reasonable agreement. But of course the Government will want to talk to Members and want to look to ways to give reassurance to the House wherever we are able to do that.

Under this agreement, we will be free to decide for ourselves who comes to the UK, free to decide who fishes in our waters, free to decide how to support our farmers, free to open new markets around the world to the best that Britain produces and free to consider new ideas such as the free ports that my hon. Friend the Member for Cleethorpes (Martin Vickers) outlined today. Above all else, the withdrawal agreement and the political declaration provide what Members on both sides of the House were calling for on behalf of business: stability and certainty; a firm foundation on which to continue to operate across the EU, which remains one of the most important of our export markets.

Taxation (Cross-border Trade) Bill

Ian Paisley Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

I rise to speak to new clause 37, which is in my name and those of my right hon and hon. Friends. I will press the new clause at the appropriate time. It would make it

“unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain.”

The purpose is simple: it is to secure the future of the United Kingdom. I speak as a proud Unionist and a friend of Northern Ireland. I have had the honour of working closely with people across Northern Ireland, having been Chairman of the Northern Ireland Affairs Committee for seven years and, before that, a shadow Northern Ireland Minister for five years. Interestingly, I also co-chaired the British-Irish Parliamentary Assembly for some five years. We have a lot to fight for in Northern Ireland.

This new clause would provide a guarantee that shows we value the Union and recognise the importance of strengthening it, but also acknowledge the importance and the value of our most important trading arrangement, the UK internal market. Above all, it would contribute to upholding the constitutional integrity of the United Kingdom and safeguard the Union for the future.

New clause 37 reinforces a view that I am confident is shared on both sides of the House, which is that we cannot accept a deal that would allow Northern Ireland to be considered a separate customs territory from Great Britain. I recognise that this is the view the Prime Minister has put at the forefront of our negotiations.

[Ian Paisley (North Antrim) (DUP)]

Will the hon. Gentleman reiterate the point that new clause 37 simply underlines and reaffirms what the Prime Minister has said from the Dispatch Box on four separate occasions? The hon. Gentleman is right to seek to nail this into the Bill because we might not always have the luxury of having a Unionist Prime Minister.

[Mr Robertson]

Of course I completely agree with the hon. Gentleman, although I hope we always do have a Unionist Prime Minister. Many of us will be working towards that end for many, many years.

The Prime Minister said in December

“the whole of the United Kingdom, including Northern Ireland, will leave the EU customs union and the EU single market. Nothing in the agreement I have reached alters that fundamental fact.”—[Official Report, 11 December 2017; Vol. 633, c. 27.]

If nothing has changed, I am confident—and I understand it is the case—that the Government will support this amendment.

During the past two years, we have had many polarising debates on our withdrawal from the European Union, but this amendment is straightforward and should be supported by anyone who values and believes in the Union. This is not a matter of leave or remain; it is about protecting the Union and ensuring that any deal we secure with the European Union upholds the constitutional integrity of the UK.

As well as protecting Northern Ireland’s constitutional position in the UK, new clause 37 is also about protecting the economy of Northern Ireland by securing our most important single market, the UK itself. There are no absolute figures, but estimates from the Northern Ireland Statistics and Research Agency suggest that external sales of goods and services between Northern Ireland and the rest of the UK were worth £14 billion in 2016, which represents approximately 58% of Northern Ireland’s total external sales. To jeopardise that by subjecting Northern Ireland to extra border arrangements, effectively down the Irish sea, would be foolish.

Earlier this year, the Prime Minister rightly rejected the European Commission’s proposed version of the backstop, which would have treated Northern Ireland differently from the rest of the United Kingdom. As the Prime Minister has said a number of times, no UK Prime Minister could ever agree to it. I understand that is still the Government’s view.

New clause 37 does not look to tie the Government’s hands. Rather, it will galvanise the Government’s position on this issue and signal to the people of Northern Ireland that they will not be left behind or left out. The Irish border is being used as a red herring by the European Union. As the Prime Minister has agreed on a number of occasions, we cannot know what arrangements, if any, will be needed on the border until we know the details of any deal with the European Union. To think the opposite of that is to put the cart before the horse.

Her Majesty’s Government, the Irish Government and politicians of all colours in Northern Ireland have said that they do not want to see a hard border in Ireland. When we say “hard border,” we are not talking about troops being stationed along the border—that is not going to happen. Nor will whatever arrangements we reach with the EU provoke violence along the border—those years have surely gone.

What will happen, though, is what has been happening for a very long time. The two jurisdictions already have different laws, different currencies, different VAT rates, different levels of corporation tax, different fuel duties, different levels of tourism tax and different levels of air passenger duty, yet trade takes place. People cross the border each day, with some people crossing several times a day. Some checks are carried out at various places in the north and south, which is how it will continue to be, without the disruption to trade and to everyday life that some people predict.

There is, therefore, no need for discussions about the border in Ireland to hold up the wider trade talks with the European Union, nor is there any need to threaten Northern Ireland’s position within the UK or Northern Ireland’s economy during these talks. New clause 37 will ensure that will not be the case.

The Prime Minister has repeatedly said that the backstop proposals for Northern Ireland are something no Prime Minister of the United Kingdom could ever agree to, and this new clause will enshrine that policy in law.

Fuel Laundering

Ian Paisley Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

I want to draw the House’s attention to a serious problem on a serious scale. It is a problem run by organised crime gangs across our country, yet it appears to many that the Government are lackadaisical or so distracted by other matters that they are not that concerned by it. I want to address the issue of Government concern—they ought to be concerned—as this crime is costing the Treasury hundreds of millions of pounds, so much so that, by a modest calculation, every 10 years the sums the Government could recover would make the Conservative and Democratic Unionist party confidence and supply agreement moneys cost neutral. The Government should consider that when dealing with this issue.

[Paul Girvan (South Antrim) (DUP)]

I wish to raise an area of major concern, which is the position of road hauliers, particularly those in Northern Ireland, who are missing out because they are having to compete against those who are dealing in smuggled fuel and are, thus, unable to compete on a level playing field. Most of the moneys being derived from this are going into the pockets of paramilitaries.

[Ian Paisley]

I thank my hon. Friend for that intervention. The Government’s very conservative estimate of what this crime amounts to is largely down to the lack of resources being directed at tackling it, as measured by the small amount of arrests and convictions, and to the fact that the current Government strategy of markers has failed because the markers do not work as well as the Government pretend. As it is Northern Ireland’s problem, it is often regarded as a problem that is out of sight and out of mind. However, the facts available to me indicate that it is fast becoming a UK mainland problem.

[Jim Shannon (Strangford) (DUP)]

Does my hon. Friend agree that a zero-tolerance approach must be taken to fuel laundering, not simply because of the cost to the Exchequer of some £100 million per annum in Northern Ireland, but because those carrying out these crimes are very often inextricably linked with paramilitarism? We must cut off the money-making arm of paramilitary groups throughout Northern Ireland. Do away with the money and we stop the paramilitary groups being active.

[Ian Paisley]

I thank my hon. Friend for that intervention. We hear much debate about Brexit and the hard border, and how it must be frictionless and customs must be harmonised. Every gangster who is engaged in this operation in Northern Ireland and this level of crime, many of whom are senior Sinn Féin supporters and other senior paramilitaries, believes in a hard border on this one, because they love the fact that there is a customs differential and they want to ensure their ability to transfer vast amounts of laundered fuel in a frictionless manner.

Let us examine the scale of the crime. In March, Baroness Neville-Rolfe stated in an answer to questions in the other place that the estimated level of illicit fuel sales amounts to “£50 million” in lost revenue for the last year for which figures were available. I believe that is a glossed over view and that, even though it is a staggering amount, it conceals a far greater level of fraud. However, if that was the height of it, that is half a billion in resources lost to the Government over the term of a normal Parliament. The most recent official report of the Organised Crime Task Force—I must declare an interest, as I served as a member of it before I joined this House—details that the tax gap between Government known legitimate sales of oils and fuels, and illicit fuel trading is about £100 million, as my hon. Friend the Member for Strangford (Jim Shannon) identified. That has reduced from about £160 million nine years ago, but it is still a staggering amount.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does my hon. Friend agree that, in addition to the substantial amounts of money that the Treasury is losing, an issue that is sometimes not highlighted is the danger of the damage done to vehicles? Some of these illicit fuels are poisoned and treated very badly so that these people can maximise profits.

[Ian Paisley]

If we start to go down that line, the costs are in many ways incalculable. We need to bear that in mind.

The Organised Crime Task Force recounts a case study of an organised crime gang that evaded duty of more than £3 million. It had laundering plants in 13 locations, at one of which the police seized approaching £300,000 in cash. They also seized 72,000 litres of illicit fuel that was being sold to unsuspecting motorists, like my hon. Friend the Member for East Londonderry (Mr Campbell) said. Nine people were convicted, and two custodial sentences were handed down amounting to—listen to this—just 16 months in prison. Seriously? A multimillion-pound crime gang and they get 16 months in prison. What sort of disincentive to criminality is that?

The Government will no doubt point to their new fuel marker, which they introduced in conjunction with the revenue and customs people in the Republic. They claim that it is particularly special and

“significantly more resistant to laundering”

than old markers. Given that old markers could be laundered through a sieve, that is not actually a good recommendation. They also boast that there has been a

“reduction in laundering plants discovered”.

That boast is hollow, as it means that the authorities cannot find the laundering plants.

I will tell the House why that is so. Previously, removal of the marker left an environmentally hazardous sludge that ultimately gave away the launderers’ locations and caused a multimillion-pound hazard that the local authorities had to pay hundreds of thousands pounds to clear up. The new so-called more effective marker can be removed via the process of distillation, leaving no environmental waste at all—it simply evaporates—hence the carefully crafted words of the report. If the laundering plants do not leave any trace, they will be much harder to find, so fewer plants will be discovered. On the fact that the new marker can be distilled off the fuel, I leave this thought with the House: many people in Northern Ireland know a lot about distillation. They have been distilling a produce in Northern Ireland for very many years, so it is now so much easier to commit this crime than it was previously.

Let me turn to the substance of my argument; I hope that the Minister will respond to these points. This is not a uniquely Irish problem. Because a blind eye has been turned to stamping it out, organised crime gangs are exporting this crime across the Irish sea. A case study produced by the Government’s Organised Crime Task Force recounts how the

“fuels may move across the EU borders without supervision”.

If ever we were going to get a warning that we need more friction on our border in respect of this issue, this must be it.

In 2016, there were 80 movements of ISO tanks—tank containers built to the standard of the International Organisation for Standardisation—containing 26,000 litres each. The Government estimate that millions of litres of this oil were smuggled before it was identified. The crime amounted to millions of pounds in lost revenue for Her Majesty’s Exchequer—and this is just one operator. Such crimes have a devastating impact on our haulage industry, as my hon. Friend the Member for South Antrim (Paul Girvan) said earlier.

At the weekend, three Secretaries of State visited Northern Ireland and heard at first hand from the haulage industry. The industry took the opportunity to spell out the following, saying that organised crime gangs

“are now exporting laundered diesel to GB on an industrial scale using bulk containers contained inside curtain slide trailers. This is of huge concern to Roll on Roll off operators on the Irish sea as it is hazardous cargo, is not manifested or transported safely”.

A potential disaster looms that would make the Zeebrugge disaster look insignificant. This operation is being used to supply illicit vehicle operations across England. The Government promise that legitimate trade must not be interfered with or delayed, as a result of Brexit, between our islands and on our island. I agree wholeheartedly with that position, but to have confidence, illicit trade must be stamped out. The Government must not sacrifice their principles on ensuring that we have open trade. They must not allow criminals to get away with it. We must deal with the criminal elements, because they are rubbing their hands in glee, looking at the opportunities that Brexit will open up for them.

There are 5,730 licensed commercial vehicle operators and 22,000 licensed goods vehicles in Northern Ireland. Some 27% of Northern Ireland licences are international hire and reward work compared with an average of 10% here on GB mainland. Therefore, this is big business in Northern Ireland. Some 27,000 people are currently employed in the transport and storage industries in Northern Ireland, and fuel represents about 32% of the operating costs of those industries. It is obvious from those figures that illicit traders can destroy a legitimate business by focusing on the sale of illicit fuel, and put a legitimate operator out of work overnight.

Our duty on fuel is, of course, the highest in Europe and it is unlikely to fall, so the pressure on legitimate trade and the opportunity for the criminal grows. Last month, I met people from the Petrol Retailers Association. They are appalled at how easy laundering has become. They have identified a number of sites across Northern Ireland that are openly run by criminals, and yet nothing has been done about it. I was going to use privilege this evening to read out the names of 12 illicit trade operators across the United Kingdom that have been given to me by the Petrol Retailers Association. I would get a very easy headline, but I will not do that, because I am not here to embarrass the Government. I am not here to try to pull that one on them, but I do make a plea to the Minister that if we know who these people are, and if their names are easily circulated between the police, the association and the operators, surely something must now be done to stamp them out. I hope that the Minister will push that matter back to the authorities and tell them that we want these criminals dealt with, and that we want to see examples set.

I have three pleas to make to the Minister this evening, and I hope that he can respond to them. The first is in the words of the Petrol Retailers Association. Let me quote again from the letter:

“I firmly support you and your colleagues in demanding from Government a fresh look at the real impact of this HMRC marker initiative and a renewed commitment to tackle the heinous problem of illicit fuel which has spread to the mainland.”

Secondly, I want the Government to review the sentencing policy and practice of those caught engaging in this heinous crime. Finally, as Brexit approaches, let us use this as an opportunity to make the United Kingdom have the gold standard fuel marker and to put in place a proper and effective British marker that works and stops this illicit trade. I hope that the Minister will be able to respond positively to these matters and offer me the opportunity to meet senior officials to address them.

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

I thank my hon. Friend the Member for North Antrim (Ian Paisley) for raising an important issue, which I know that he, his constituents, and the effective quartet of Members from Northern Ireland who are here this evening—[Interruption.] Quintet, I do apologise. Who could forget? I know that this is an issue that many people feel strongly about. I know that the Chancellor of the Exchequer will be delighted to hear that the Democratic Unionist party now wants to be cost neutral, and I will make sure that that is taken into consideration in future conversations.

Fuel duty makes an important contribution to the public finances. In 2016-17, it generated £28 billion, or nearly 5% of total tax revenue. It is the fifth largest source of tax revenue to the Exchequer, behind only income tax, national insurance contributions, VAT and corporation tax, so, as my hon. Friend rightly suggested, this matters. Fuel fraud is not a victimless crime. It deprives the Exchequer of funds that pay for public services, and fuel laundering—the removal of chemical dyes and covert markers from rebated fuel to give the appearance of legitimate road fuel—poses a range of further risks to the public. Criminals experimenting with the process to defeat the new marker can create, as we have seen, a high risk of explosion, fire and potential risk to life. Laundering plants also produce toxic waste, which causes environmental damage. Finally, as we have also seen, illicit fuel is often transported in vehicles that are unfit for purpose and unsafe. As with any form of fraud, fuel fraud is a serious concern, and we recognise that it can be linked to organised crime, serious organised crime and, as my hon. Friend argued, the financing of paramilitary activity. That is a concern across the United Kingdom and, quite obviously, a particular concern in Northern Ireland.

For all those reasons and those set out by my hon. Friend, the Government are and must be committed to tackling the issue and to giving it the due consideration that it deserves. HMRC’s strategy to tackle fuel duty fraud has seen the UK’s tax gap for fuels in general fall from £1.5 billion in 2002 to less than £100 million in 2015-16, but £100 million remains a significant sum of money, as we have heard. In Northern Ireland, where the issue is a particular problem, the illicit market share has, according to HMRC, fallen from 26% to 8% over the same period. None the less, there is no room for complacency. Indeed, there has been a modest increase in laundering plant detections over the past year, which should give us all cause for concern. The new fuel marker that was brought in together with the Republic of Ireland in April 2015 to tackle the problem of fuel laundering is part of the significant investment made by HMRC to ensure that all businesses and individuals contribute to the tax revenues that are required to fund our public services. I appreciate that my hon. Friend has in the past raised objections to Accutrace, but I will return to those shortly.

As outlined in HMRC’s evaluation of Accutrace, the new marker has led to a reduction in the number and size of fuel laundering plans discovered by HMRC, although there has been a modest uptick over the past year. That apparent success reflects our commitment to tackle fuel fraud, as evidenced by the reinvestment of over £1 billion in HMRC’s fight against evasion and fraud over the spending review period. To continue that work, the Government announced the expansion of road fuel testing unit capacity in Northern Ireland in particular, but also in mainland Great Britain, in addition to the extra resource for fuel fraud work within HMRC’s criminal investigation directorate that was announced in the autumn statement 2013. That should complement HMRC’s fleet of road fuel testing vehicles, all of which are equipped with gas analysers that all officers have been fully trained to use. In 2016-17 alone, HMRC took 45,000 samples in the UK, so the problem is being addressed seriously at quite a scale across the UK.

Multi-agency, cross-border co-operation is clearly essential, and HMRC chairs a quarterly multi-agency cross-border fuel fraud group to share intelligence and information on operational activity, as well as co-ordinating joint operations. I have reiterated the importance of that with the Minister of State for Security and Economic Crime in advance of this debate. HMRC’s testing capability can now identify markers down to parts per million, including the new Accutrace marker that has been introduced on both sides of the border. HMRC investigates all attempts to remove Accutrace. To date, HMRC advises that there is nothing to suggest that rebated fuel can successfully be laundered to remove the marker in a way that is not detectable to HMRC. Although all markers have theoretical vulnerabilities and there is no perfect marker on the market, this new marker cannot be removed profitably at any scale. It remains HMRC’s view that the marker has been, and continues to be, effective in driving down fuel fraud. Clearly, I am interested in hearing further evidence from my hon. Friend if he wishes to engage with this. Where HMRC has detected laundering plants, these have not been capable of successfully laundering the new marker.

My hon. Friend raised the question of custodial sentences. Custodial sentences for fuel laundering were handed down in 2016 following a successful HMRC investigation into a £2.6 million fuel laundering scheme. However, the scarcity of custodial sentences for what is clearly a serious crime is noticeable and disappointing. My hon. Friend was right to raise that matter today. Right hon. and hon. Members from Northern Ireland know that justice and policing are devolved matters, but I will give further consideration to this issue and I am happy to engage with them on how we might move forward. I am informed that sentences for this crime in Northern Ireland are, taken together, more lenient than those in England and Wales. We should all give that further consideration.

My hon. Friend mentioned points raised by the Road Haulage Association. I am happy to meet him to discuss these issues at a later date. We have increased our capacity in road fuel testing units, and have provided extra resource for fuel fraud investigations across the United Kingdom, particularly in Northern Ireland. I would be happy to supply further information from HMRC regarding the quantity and where the units are being deployed. I have asked HMRC officials to supply us with better data on the numbers and on the locations at which roadside testing is happening in Northern Ireland. Tests are completed throughout the supply chain. The number of tests at suppliers’ premises in Northern Ireland has increased over the course of the last two financial years.

[Ian Paisley]

I really appreciate the level of engagement that the Minister is offering—both with himself and officials. Will he arrange for the Chancellor also to be engaged in the discussions, so that we can ensure that he appreciates how seriously we want this matter to be addressed?

[Robert Jenrick]

I raised this matter with the Chancellor in advance of this debate, and he would be happy to meet my hon. Friend and his colleagues if they wish to join. I suggest that I arrange a meeting with him and others who wish to participate as soon as possible so that we can take this matter forward. In advance of that meeting I will review some of the other issues that he has raised and the points made by the Road Haulage Association so that we can have the most productive conversation possible. The Chancellor is very aware of the importance of this issue in Northern Ireland and of the assiduous way in which my hon. Friend has pursued it over many years—going back at least five years—by raising it with the Government and in Parliament, so we would be happy to take this matter forward.

I thank my hon. Friend for raising the issue. We have had a productive debate. I listened closely to the comments that he made and hope that I have been able to answer some of them. The Government are committed to tackling avoidance, evasion and fraud throughout the tax system. For all the reasons that we have heard this evening, this is an important issue that deserves our attention and deserves to be elevated in the level of importance to which HMRC and law enforcement authorities in the whole United Kingdom, but particularly in Northern Ireland, attach to it. I will do everything that I can from my position in the Treasury to ensure that that happens. I look forward to working with my hon. Friend and his colleagues to take this matter forward.

Question put and agreed to.

Rail Services (Bedfordshire)

Ian Paisley Excerpts

Tuesday 23rd January 2018 Westminster Hall

[Ian Paisley (in the Chair)]

I shall call the other Members who want to speak, but I ask them to take literally one minute, as I want the Minister to have as much time as possible to respond, and we must conclude at 11.30.

RBS Global Restructuring Group and SMEs

Ian Paisley Excerpts

Thursday 18th January 2018 Commons Chamber

[John Glen]

I am grateful to my right hon. Friend for her intervention and acknowledge the work she is doing on the Select Committee, and it would be much more helpful to this process if RBS were more co-operative with the Committee and the legitimate process of scrutiny that she and her Committee members are seeking to undertake.

Not only do the Government take these matters seriously, but the FCA is well aware of them and continues to address this issue. As I said, it will be the first thing I raise when I meet Andrew Bailey very shortly. In October, the FCA released a detailed summary of its skilled persons report, which examined RBS’s treatment of SMEs in financial difficulty. The FCA is now investigating the matters arising from the report.

I am aware of the frustration over the time the process is taking. The outcome of this investigation and the action the FCA proposes to take is critical to small businesses across this country, but I remind Members that the FCA is an independent body. That is vital to its role, credibility, authority and value to consumers, and they would be undermined if it were possible for the Government to intervene in day-to-day decision making. We can set the law, but we then must be bound by it and respect the judgment and independence of the FCA.

It would not be productive for me to address from the Dispatch Box every specific case and allegation, and I want now to turn to the wider issue of SMEs and how disputes are resolved between them and their banks.

[Ian Paisley (North Antrim) (DUP)]

The Minister is making a thoughtful speech. Can he assure the House that the FCA will not be a toothless bulldog and that it will actually have some bite?

[John Glen]

I think the FCA understands, in the light of today’s debate, where the pressure is leading to and what action we will need to take if its response is not effective.

The key issue for the debate today, which I discussed with all-party group members yesterday afternoon, is that we must remember that there are already multiple avenues for resolution. I understand the frustrations Members have expressed about their effectiveness, but our smallest businesses have redress via the Financial Ombudsman Service for quick and informal resolution of disputes, the FCA has the power to take action to address issues that require resolution, and there is also the usual legal recourse available for businesses.

Taxation (Cross-border Trade) Bill

Ian Paisley Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[David Morris]

I could not have put that any better—I agree with everything the hon. Gentleman said.

I will give just one taste of how trade works in my area. We are the first port of call—excuse the pun—for Northern Ireland. I hope that the hon. Member for North Antrim (Ian Paisley) and I are going on a little project on a Wrightbus—known as the Boris bus—from his constituency through the port of Heysham all the way down to London to demonstrate exactly how trade works within the UK and how it will flourish under the Bill.

[Ian Paisley (North Antrim) (DUP)]

I thank the hon. Gentleman for enlightening the House on that point. As he knows, that bus is in itself a great expression of how trade works within these islands. People from the constituency of my hon. Friend the Member for East Antrim (Sammy Wilson) work in a factory in my constituency, which draws on skills from across the whole United Kingdom, whether the tarmac manufacturers in Scotland, the electronics manufacturers in Manchester or the window developers for buses. All those skills are put into one product, which is seen every day on the streets of London, Manchester and other parts of the UK. It is a good example of how trade works practically, putting people into employment. I welcome the project that the hon. Gentleman suggested.

[David Morris]

The hon. Gentleman explains succinctly that the supply chain that makes the buses is immense in his constituency and in the wider UK. That is why trade must flourish between Northern Ireland, the United Kingdom and Europe.

It is a fact that we will leave the EU, and it is best to think about how we do it. The Bill covers the initial stages of facilitating that.

Finance (No. 2) Bill

Ian Paisley Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Robert Courts]

I simply do not accept that point, with the greatest of respect to the hon. Gentleman. It is quite clear that the reduction in corporation tax, which I am glad he has mentioned, has led to an increase in revenues over that period. It is accepted that GDP is expected to increase by 1.3% in the long run. The receipts have increased by 50% since the Government have been reducing the corporation tax rate, from £36 billion to £55 billion between 2010 and 2016. That is an increase to £55 billion going to the Exchequer over that period.

[Ian Paisley (North Antrim) (DUP)]

The hon. Gentleman is absolutely right. We have seen the boost in spending generated by the proposed reduction in VAT on the hospitality trade in Northern Ireland before the measure even kicks in. I suggest that if the Government had the bottle to do away with air passenger duty—that would be an exceptionally good move—we would see even more air travel and an increase in tax take overall.

--- Later in debate ---

[Mel Stride]

What I am able to tell the right hon. Gentleman is that, as I have said, the average benefit will be £1,700 for the average first-time buyer. Every region in the United Kingdom will see benefit from this measure, and those regions—particularly in the south and south-east—where the ratio of salaries required to mortgage levels is particularly high will especially benefit.

However, the other thing we need to do as a Government, as I have already stated, is to make sure we get the supply of housing right. That is why we will be moving from the current level of 200,000 new builds a year up to 300,000 in the middle of the 2020s.

[Ian Paisley]

It is important to put on the record that Northern Ireland probably benefits disproportionately as a result of this measure, compared with any other part of the United Kingdom. The average house price in Northern Ireland is £128,650—in some areas west of the Bann, it is about £109,000—so hitting house prices over £300,000 would involve such a limited market. Many, many people in Northern Ireland are going to benefit from this, and I welcome the move the Government have made.

[Mel Stride]

I thank my hon. Friend for those comments, which illustrate the point that there are benefits accruing across all regions of the United Kingdom.

The changes made by this Bill include the largest ever increase in the point at which first-time buyers become liable for stamp duty. This relief will help over 1 million first-time buyers who are taking their first steps on the housing ladder during the next five years. It provides immediate support while our wider housing market reforms take effect.

The changes made by clause 41 ensure that over 95% of first-time buyers who pay stamp duty will benefit by up to £5,000, including 80% of first-time buyers in London. That means that over 80% of first-time buyers will pay no stamp duty at all, and it saves the buyer of an average first property nearly £1,700, as I have said.

In summary, this change to SDLT will help millions of first-time buyers getting on to the housing ladder. Together with the broader housing package we have announced, we are delivering on our pledge to make the dream of home ownership a reality for as many people as possible.