Scottish Economy

Luke Graham Excerpts

Wednesday 27th June 2018 Westminster Hall

[Luke Graham (Ochil and South Perthshire) (Con)]

It is a pleasure to serve under your direction, Mrs Main. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing this important debate on a matter that is close to my and many of my colleagues’ hearts.

I will begin by looking at some of the statistical indicators for Scotland’s current economic performance, starting with GDP. Scotland’s GDP was 1.7% in 2015; it plummeted to 0.2% in 2016 and rose marginally, to 0.4%, in 2017. In comparison, UK GDP was 2.3% in 2015, 1.9% in 2016 and 1.8% in 2017. The employment rate in Scotland in the first three months of 2018 was 75.2%, compared with a UK rate of 75.6%. The unemployment rate in Scotland was 4.3%, slightly higher than the UK rate of 4.2%, over the same period.

[Neil Gray]

Will the hon. Gentleman give way?

[Luke Graham]

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

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

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

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

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

[Luke Graham]

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

[Deidre Brock]

I will.

[Luke Graham]

Come on then.

[Deidre Brock]

I am just going to repeat what I said before: the setting of VAT rates, national insurance, fuel duties, capital gains tax are not devolved to the Scottish Parliament and therefore can have no impact on the economic powers that the hon. Gentleman is talking about.

[Luke Graham]

The hon. Lady repeats the point, and it is as weak as it was the first time.

The Scottish economy is not forecast to grow by more than 1% at any stage over the next five years. As a result, the Scottish economy will be more than £18 billion smaller by 2022. It is not helped one iota by any devolved power, whereas in this place we have been trying to help the Scottish economy.

[Stephen Kerr]

Does my hon. Friend agree with the conclusion of the Economy, Jobs and Fair Work Committee of the Scottish Parliament, which includes, I think, four or five SNP Members? It states:

“If we are to reverse this trend then the Scottish Government must use all of the levers at its disposal to bring a sharper focus on growing the economy, and ensuring that growth is inclusive.”

That is something they are failing to do currently.

[Luke Graham]

I thank my hon. Friend for his intervention; I could not agree more. One point on which I do agree with the hon. Member for Rutherglen and Hamilton West is that Scotland has two levels of government—one in Edinburgh and one in Westminster—and they should work together productively to try to improve Scotland’s economic performance, which lags behind that of the UK. As a Member who has just negotiated a city deal for his region, I can say honestly, hand on heart, that the two levels of government are not working well together. The relationship is dysfunctional; it does not work. Powers are being hoarded in Edinburgh and not given down to the local authorities, as they should be.

Productivity is lower than it was in 2010 and the gap between Scottish and UK productivity is wider than it was in 2009. Scotland has the lowest rate of business growth in the UK and is forced to pay the highest business rates in Europe. In addition, the SNP broke a major manifesto promise and raised tax on more than 1 million Scots earning over £26,000, ensuring that Scotland’s wealth creators have less of their wealth to create more through further investment.

We talk about powers a lot in this place; the issue dominates a lot of our debate, but let us be clear. The only power given back was that to vary income tax by 1p, and it was given back to Westminster by the SNP, having originally been devolved under the Scotland Act 1998. The Conservatives do not give away powers; the SNP does. [Interruption.] Between 2010 and 2016, Scotland’s economic growth rate was 1.7%, compared with—[Interruption.]

[Mrs Anne Main (in the Chair)]

Order. The hon. Member for Edinburgh North and Leith (Deidre Brock) must control herself. She is not down to speak, but she can speak if she wishes to rise. Will she please limit her remarks to either interventions or a speech, instead of barracking?

[Luke Graham]

Scotland’s economic growth rate was 1.7%, compared with 1.9% for the UK, and that was even before Brexit, showing that Scotland’s economy consistently performs worse than that of the United Kingdom.

Last year the SNP Administration set up the Scottish growth scheme—a £500 million fund designed

“to help businesses thrive and grow”.

They have spent only £25 million of that fund. Similarly, they have failed to spend a single penny of the £36 million digital growth fund since it was announced in March 2017. Meanwhile, last Thursday, the Cabinet Secretary for Finance and the Constitution, Derek Mackay, announced that there was a £453 million underspend by the SNP Administration in the last financial year. It is the fourth year in a row that the SNP Administration have underspent their budget. In total, it is more than £1.2 billion that they have chosen to deprive the Scottish economy of since 2014. That is unacceptable.

Meanwhile, my local councils in Clackmannanshire and Perth and Kinross are forced to increase council tax and cut services for our local residents. That means cuts to music tuition, public transport and the upkeep of our paths and roads. It is unacceptable and it cannot go on.

This is not about Brexit. It is about the deliberately dysfunctional devolution overseen by the Scottish National party. The SNP is failing our constituents through its woeful mismanagement of the Scottish economy and its refusal to invest the money that we already have and the money that comes from this place, which should be going directly to our constituents. If they do not want to use the levers of administration to improve the Scottish economy, perhaps it is time to stand aside for the Conservative and Unionist Opposition, who certainly will.

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[Drew Hendry]

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

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

[Luke Graham]

Will the hon. Gentleman give way?

[Drew Hendry]

I am going to make some progress.

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

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

Oral Answers to Questions

Luke Graham Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Elizabeth Truss]

We are the Government who have introduced the national living wage. We have reduced tax bills for those on the lowest incomes, and we are keeping our food market competitive and have some of the lowest food prices in Europe.

[Luke Graham (Ochil and South Perthshire) (Con)]

The UK productivity and prosperity funds are meant to benefit all local authorities across the United Kingdom. Will my right hon. Friend meet me to talk about how Scottish local authorities can apply directly to those funds?

[Mr Philip Hammond]

Yes.

Banking Misconduct and the FCA

Luke Graham Excerpts

Thursday 10th May 2018 Commons Chamber

[Luke Graham (Ochil and South Perthshire) (Con)]

I am conscious of time, Madam Deputy Speaker. I am disappointed that we are having to debate this matter at all today, let alone for the second time this year.

The section 166 report highlighted that RBS GRG was focused on profit over customer service. I was also interested to note that the Tomlinson report found few examples of businesses entering the RBS GRG then being returned to local management. On a separate, but related, point, in my own dealings with RBS over its closure of three branches in my constituency, it has been clear that customer service is not the bank’s priority.

I want to touch briefly on how the actions of RBS GRG have impacted upon my constituents. One constituent, who has been in regular contact, is appalled by the conduct of RBS GRG. He ran his own property development business in my constituency and was in the hands of GRG for a number of years. He was so aggrieved by its actions that he produced a 19-page report describing in tragic detail the manner in which RBS denied him the opportunity to rebuild the company after it fell into problems, closed down the company, which he had built from scratch, and tried to evict his entire family from the family home. This is but one example. I know that other Members have many more.

Small and medium-sized businesses are the backbone of our economy and often the lifeblood of our communities. They employ our constituents and pay the taxes that fund our public services—taxes that were also used to bail out the banks, including RBS. It is bad enough we had to bail them out in the first place; for those banks then actively to undermine the very source of their rescue is a serious moral, as well as legal, issue that we are right to consider and which we must address.

There is widespread discontent with the banking sector that admittedly is not limited to the actions of RBS but stems from the financial crisis in 2008 and other subsequent high-profile cases, such as that of HBOS Reading. The only way to restore any semblance of confidence in the banking sector is to hold an inquiry into the treatment of SMEs by RBS GRG. I am pleased therefore that the all-party group on fair business banking and finance has called for a public inquiry. I back that call.

The all-party group has laid out three reforms it believes are necessary to move the sector forward, and I am pleased to support its proposals, especially that for a more rigorous and robust dispute resolution procedure. Currently, victims have only two routes available—one via the Financial Ombudsman Service and one via the courts. As we know, the ombudsman does not always have the scope to deal with cases where compensation is worth more than £150,000, while going through the courts is potentially cripplingly expensive, especially for anyone who has just lost their business.

Any reform must address and tackle the causes that brought us to this point. It is simply not sufficient to recognise that it happened and compensate accordingly—we must improve the current processes and prevent these issues from ever recurring.

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[Kevin Hollinrake]

The hon. Gentleman makes a strong point. We should thank the Treasury Committee and its Chair for their work.

As I said, these issues are not restricted to RBS. Many will also be familiar with the HBOS Reading scandal, where former bankers and their advisers were jailed for a total of 47 years in 2017 for activities that took place over a decade earlier, prior to the takeover by Lloyds in 2008.

I have recently been sent by one of those convicted, Mr Michael Bancroft—this was kindly facilitated by my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi)—hitherto unreleased documents, including the Project Lord Turnbull report, authored by Lloyds senior manager Sally Masterton, which alleges that senior managers within the bank were aware of the fraud prior to the takeover and the £14 billion Lloyds and HBOS rights issues, yet they took clear, deliberate and documented action to conceal it. Let us be clear: if this is true, it could potentially make the rights issues and the takeover fraudulent. Those named as culpable for non-disclosure in the report include chief executive Andy Hornby, chairman Sir Dennis Stevenson, former CEO James Crosby, corporate CEO Peter Cummings, and the auditors and reporting accountants, KPMG. The all-party parliamentary group will have a full copy of the report and Members will be given access to it. Status, seniority and background cannot be a barrier to justice or to holding to account those who are ultimately responsible for the devastation caused to so many lives and to the wider economy.

[Luke Graham]

Those papers, which will be made available to the APPG, mention the actions of the auditors, KPMG. Will KPMG be included in the investigation, and should it be the subject of a further debate in this place?

[Kevin Hollinrake]

They should certainly be included in the wider investigation, which is what I will call for shortly.

The Project Lord Turnbull report raises significant questions. Was there deliberate concealment of the scale of the fraud within HBOS and Lloyds? Who was party to the concealment? Crucially, did the concealment result in significant loss to bank shareholders and to subscribers to the rights issue? We see conflicts of interest in the report and in many other places. They include the auditors, KPMG, giving HBOS a clean bill of health in February 2008, only a few months before its collapse; the audit watchdog, the Financial Reporting Council, seeing no reason to investigate this audit; and the fact that four of the 10 members of the FRC board are partners at KPMG and that it is chaired by former Lloyds chairman Sir Win Bischoff, who oversaw the £14 billion rights issue.

Our all-party group sets out clearly what steps we now need to take. We need an investigation into the serious concerns raised against Lloyds and HBOS. The FCA must build a reputation as a regulator that acts without fear or favour. We need a new primary dispute resolution mechanism, potentially in the form of a financial services tribunal, which also sets aside the statute of limitations. We need a review of the structure of our financial crime agencies in the light of the evidence now before us to ensure that our system of justice is fit for purpose. Finally, the only way in which we can resolve the deep-seated cultural problems in our banking sector and remove the conflicts of interests that are so prevalent is by way of a full public inquiry.

Customs and Borders

Luke Graham Excerpts

Thursday 26th April 2018 Commons Chamber

[Luke Graham (Ochil and South Perthshire) (Con)]

As a remainer and a democrat, I must respect the result of the referendum. Membership of the customs union is possible only for member states of the EU. This was not in any doubt at the time of the referendum; David Cameron said as much on “The Andrew Marr Show” during the penultimate weekend of the campaign. He said:

“We cannot leave the EU and remain in the customs union”.

However, that does not mean that we cannot negotiate a deal with the EU to keep trade as frictionless as possible, and the UK Government have put forward proposals to that end. Whether it is called a customs arrangement or a customs union, I do not really mind the label as long as it achieves the shared goals of frictionless trade and as few barriers as possible.

I want to talk about some of the concerns raised by the Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier), and me as a member of that Committee when we looked into the details and practicalities that will face us if we do not have a firm and solid customs agreement with the European Union. In 2015, roughly 55 million customs declarations were made by 141,000 traders. It is predicted in the reports that we have received, however, that we could see a fivefold increase in the number of declarations needing to be processed after Brexit. That would involve up to 255 million declarations, which would put a great deal of additional pressure and strain on HMRC and on its new customs declaration service’s systems.

Even allowing for a transitional period to be agreed and in place, we are still working to a tight timetable for putting in place an operational system that traders here in the United Kingdom and abroad will be able to use. The planning for the introduction of the customs declaration service—CDS—system was put into action in 2013-14, before Brexit became a reality, although the planning to account for the increased numbers is obviously a direct consequence of the Brexit decision. There is also uncertainty over the investment in the current customs handling of import and export freight—CHIEF—system, which requires around £7 million if it is to serve as a back-up, just in case the CDS system is not ready when we hit the Brexit date and agreements are not in place.

HMRC has acknowledged in the Public Accounts Committee that there are four main areas of risk. They involve the integration of all the CDS components, testing to ensure that the system can handle 255 million declarations a year, migrating registered users to the new system and ensuring that users are ready to make declarations on the new system. HMRC will not know until July this year whether the system will work as intended. That is barely a year before the first traders will begin to use it.

I therefore reiterate to the House the recommendations agreed by the Public Accounts Committee that we believe will help to rectify the situation. First, the Treasury must provide sufficient funding for the back-up CHIEF system and ensure that the CDS is properly funded. Secondly, we need to ensure that there is a fully fleshed-out contingency plan to match the funding for the CHIEF system. Finally, we need to ensure that HMRC has everything it needs to ensure that the affected businesses can be informed off how all this will affect them. That includes businesses here in the United Kingdom and our trading partners around the world.

We have already touched on the effect of Brexit on our borders, especially in Northern Ireland, so I will not labour that point. I will simply reiterate the point made by others that we are committed to maintaining the integrity of the United Kingdom and that we must have an agreement that respects the Good Friday agreement in Ireland.

I want to comment briefly on the tone of our past debates. Today’s debate has been a lot more constructive than some of our past debates on the European Union, but we should not forget some of the pessimism that was rife just before Christmas, when the hon. Member for Cardiff North (Anna McMorrin)—who is not in her place—intervened on me multiple times to say that the Brexit negotiations were a mess and that we were in a constitutional crisis. I have to remind the House that only a day later the Prime Minister reached an agreement establishing the financial settlement with the EU and ensuring that EU and UK citizens’ rights would be respected, that the UK would have territorial integrity and that the Good Friday agreement would be respected.

None of our constituents voted to be poorer, and none of them wanted there to be more barriers between ourselves and our international trading partners. We do not mind the labels or the mechanisms, but I know that my constituents want a customs system that they can rely on, that respects the United Kingdom’s integrity and that will allow them to prosper and be better off than they are today.

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[Peter Grant (Glenrothes) (SNP)]

I have previously severely criticised Parliament’s inaction as seen in its failure to properly scrutinise the Government’s approach, for example through the European Scrutiny Committee, but today we see Parliament doing what it should be doing. It is just a pity that we knew before we started that the Government will not listen. The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) called for everybody to get together behind the Government. How about the Government just once getting themselves together behind the overwhelming will of Parliament and behind what they know as well as we do is the overwhelming will of the people?

Let us stop this nonsense about a referendum vote to leave the customs union and the single market—no, there was no such vote. There was a vote to leave the European Union, and we have been told that that became a vote to leave the single market because that was what the losers said would happen. I am fascinated by the idea that, after an election, the winners are expected not to implement their own manifesto but to bring about what the other side said would happen if the eventual winners got in. Tory Members might want to look at what the Tories said would happen if the SNP ever won an election in Scotland, as we did in 2017, 2016 and 2015, and on many other occasions.

It is dangerous to give the people a binary choice but then to claim a democratic mandate to interpret the infinite number of variations of what that binary choice might mean. I do not have the right to say that the people who voted leave wanted to stay in the single market and the customs union, and nobody has a right to say that those people wanted to leave, but what I do have the right to say is that 62% of people in my country voted to stay in the European Union. Those who insist that we should be working for the best Brexit for the people of Scotland have to accept that the sovereign people of Scotland have said that the only good Brexit is no Brexit. If we must have Brexit, we want Brexit to hold us as close as possible to the European Union.

[Luke Graham]

Will the hon. Gentleman give way?

[Peter Grant]

The hon. Gentleman knows perfectly well that I do not have time to take interventions.

A lot has been said about the Irish border. Let us remember that it is now 15 months since the Prime Minister promised, as a matter of priority and as soon as possible, to bring forward her practical solution for the Irish border that was consistent with leaving the customs union. We have seen nothing. None of us has any idea what that practical solution will be. None of us even has any idea of when the Government will have any idea of what that solution will be. It is deeply offensive to a great many people of good faith on all sides and in all communities in Northern Ireland to accuse them of blackmail when all that they are saying to us is, “For heaven’s sake, please do not destroy the great work that has been done,” which I think was perhaps the greatest act of reconciliation and peace-building that certainly these nations—these islands—have seen, and that perhaps has been seen in the whole of Europe.

We talk about taking back control of our trade, but we cannot take back control of our trade. Every trade deal has to be bilateral. We are not in the empire anymore; we are in the Commonwealth. We are a community of nations and we have to treat other nations with respect. We are in the best trading partnership in the world; why would we want to leave?

Social Mobility and the Economy

Luke Graham Excerpts

Wednesday 28th March 2018 Westminster Hall

[Luke Graham (Ochil and South Perthshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my right hon. Friend the Member for Putney (Justine Greening) on introducing the debate, and I thank you, Mr Davies, for giving dispensation for members of the Public Accounts Committee to leave a few minutes before the end.

Social mobility is key. Given that the United Kingdom is one of the most immobile countries in the OECD, social mobility is not just desirable but essential for sustainable economic growth. When I go into schools and community groups in my constituency, people do not want platitudes or soundbites, but action and opportunities that matter to them and give them a way to progress.

My right hon. Friend mentioned education. There are educational challenges across the United Kingdom. In Scotland, our educational standards in maths, science and other key STEM subjects are falling behind in the programme for international student assessment rankings. Scotland used to be No. 1 in the United Kingdom for education; it is now No. 3, which is a worrying trend. A teacher shortage means that a £15 million fund for the underprivileged has gone unspent. We learned earlier this month that, due to the teacher shortage, we have not had the resources to spend that money, which had been put aside to help those from the most deprived backgrounds.

As my right hon. Friend mentioned, we are seeing a disturbing trend of fewer people from deprived backgrounds making it to university from some parts of the United Kingdom than from others. Even more worryingly, in my constituency in Scotland we are not increasing social mobility, but decreasing it. That is happening against a backdrop of increasing employment, and a slight improvement on the Gini coefficient pretty much right across the United Kingdom. Despite that, we are still not giving people real opportunities early on in life so that they can pole-vault forward.

Many good points have been made in today’s debate—I will not repeat them—but I will focus on social capital and lifelong learning on top of the broader educational point that other Members have made. Social capital is a topic that was spoken about at the turn of the century, certainly in universities and academic institutions, in discussing communities that had gone through post-industrialisation and no longer had the bridging and bonding capital that made many communities in the western world such successes. That capital enabled people to go from place to place and to step up, and ensured that the next generation was always better off than the previous one.

It is not just about the fact that students are leaving school with poorer highers or GCSEs; it is about what comes after that. Even if a mistake has been made or an opportunity has not been provided early on, people must be given a second or even a third opportunity later in life. It is important that we do not allow poor GCSEs or poor highers to write someone off early, as is so often the case in this country.

I am lucky that in my constituency we have Forth Valley College, which is a further education college that tries to promote lifelong learning, whether in the form of evening classes, working in partnership with businesses, going for apprenticeships, or working with public bodies. It is important that we provide that opportunity throughout people’s lives. I give credit to the Labour party for one of their policies in the last election: funding people through lifelong learning, and giving people access to funds to go back to college, and do different types of qualifications at any stage of their life. People are now living into their 80s and 90s, which is not what our original welfare system was designed for. We need to ask ourselves how we can give people the opportunity to have two, three or perhaps even four careers in their lifetime, as some hon. Members may well have had.

I am conscious of time, but I want to address on a more practical level what we can do in our constituencies as MPs. In my constituency, we are fortunate enough to have two city deals coming: the Stirling and Clackmannanshire deal, and the Tay Cities deal. I have been speaking to representatives from the Prince’s Trust to ensure that those city deals do not just bring financial investment and physical assets into our constituency, but improve social and human capital. I am working with those organisations, and with communities, to ensure that, when we talk about investment, we do so in the broadest possible terms. It is not just about road, rail and wires, but about the social capital and the bonding and bridging capital that allows our communities to come together, and allows people to leap through different communities because they can go as far as their abilities allow them.

Social mobility is one of the key reasons I stood for election to this place. I believe it is incumbent on us as MPs that, when someone has had a door closed in their face, we always open a window to give them an opportunity to succeed, whatever stage of their life they are in.

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[Deidre Brock (Edinburgh North and Leith) (SNP)]

It is a pleasure to serve under your chairship, Mr Davies. I commend the right hon. Member for Putney (Justine Greening) for holding this debate on an important topic. One thing she said that rang true with me was that when she started out, she was not asking for special treatment, she just wanted the same opportunities as everyone else. That is such an important point to make. She spoke of the significant gains to the economy from nurturing its talent and the part that businesses have to play in that. That is crucial as well. She also set out some interesting proposals that might address that, along with her pledge, and made some points about blind and contextual CVs. As she said, we all have our part to play. She spoke of a million-piece jigsaw puzzle, which is a good image for us to take away. We should all play our part in trying to make social mobility possible for our young people and others throughout society.

The hon. Member for Rotherham (Sarah Champion) spoke of the importance of economic regeneration and the part that that plays in social mobility. She highlighted this Government’s cuts to school funding and talked of the gaps in productivity, and asked how training can be provided urgently to fill those gaps.

The hon. Member for Chichester (Gillian Keegan) shared her personal experiences with us. I always find such points very interesting. She spoke at length of the benefit of apprenticeships, but stressed the importance of them being high-value apprenticeships, which is another good point.

The hon. Member for Mitcham and Morden (Siobhain McDonagh) gave a passionate speech. She spoke of poor accommodation, poor schooling and the social systems that put children “far behind the starting line” before they even start. That is a very good point indeed. She spoke of the effect on young people’s confidence and feelings of security, and the longer term impact on them.

The right hon. Member for Bexleyheath and Crayford (David Evennett) also spoke of personal experiences and how the opportunities he received helped him along his way. He called for everyone to receive the same opportunities. He made one point that really startled me: that only 6% of doctors come from working-class backgrounds. That is an extraordinary and sobering point.

The hon. Member for Barnsley East (Stephanie Peacock) pointed out that less than 10% of young people in her constituency will go on to university. She suggested that what was needed was an inclusive economy with secure employment that allows for future planning.

My hon. Friend the Member for Glasgow East (David Linden), in a very fine speech, also talked about the importance of investing in apprenticeships and of fair pay for those apprenticeships, and about what he is doing personally as a politician with the internship scheme in his office. That is a great example to set. He also spoke of how social tourism can help in taking children away from their day-to-day environment and exposing them to different experiences.

In preparation for this debate, I turned to the “State of the Nation” report with interest, anticipating a thoroughly good read. The chapter on Scotland and Wales—neither nation got its own chapter, unfortunately— pointed out right at the start that the data available for Scotland does not measure social mobility, nor does the data for Wales. It seems that that is because successive Scottish Administrations have concentrated on alleviating poverty rather than measuring social mobility. Of course, alleviating poverty is not easy if the Government are hellbent on cutting social security payments and limiting the funds available to the most vulnerable members of society for ideological reasons. So we find ourselves discussing England and its problems again. The Social Mobility Commission’s “Time for change” report was clear that two decades of chasing higher social mobility have made no difference. Fervent ministerial announcements turn out not to deliver results—who would have thought it?

It is important to acknowledge that when the right hon. Member for Putney was in office she put in place a plan for addressing some educational inequalities, and it appears to have been well received. I admit that I have not read it because it concentrates on English education, but I was intrigued to see that it followed the Scottish Government down the path of addressing the attainment gap. That is a very good thing and is to be encouraged. I hope the Minister will indicate whether that plan will be implemented.

As many, many people tell us at great length, education is one of the great levellers. It is key to ensuring that talent rises and talented people are rewarded. How education is paid for is equally important. I was intrigued by the recent publication of evidence from Robert Plomin and Emily Smith-Woolley of King’s College, which showed that selective schools add next to no benefit to education. Funnily enough, the “Freakonomics” economist Steven Levitt found the same thing in Chicago.

The real inhibitor of social mobility in education comes when a young adult leaves tertiary education. The burden of student loans that graduates carry is substantial. I think I am correct in calculating that an English student studying in London for three years could leave with more than £60,000 of debt. For someone from a less affluent background who secures employment in a graduate entry-level job, that debt will stay with them for years.

[Luke Graham]

Setting aside the discourtesy of not being mentioned in the hon. Lady’s summation—I am a Scottish Conservative colleague, but that is fine—on tuition fees, perhaps she can advise her colleagues in Edinburgh truly to lead the way and not charge tuition fees to English, Welsh and Irish students, who are great friends in our one United Kingdom.

[Deidre Brock]

That point has been made many times by the hon. Gentleman’s colleagues, and he has heard the very good reasons why that is not happening. He wants me to mention his contribution, but I find it difficult to get past the fact that, once again, the Scottish Tories talked down the Scottish education system. It is a constant disappointment that every time they mention Scottish education in this place, they do nothing but complain about the work that is being done there. Some fantastic work is going on in Scottish education at the moment, and it would be lovely to hear the Scottish Tories occasionally acknowledge that.

Digital Taxation

Luke Graham Excerpts

Tuesday 27th March 2018 Westminster Hall

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

It is a pleasure to serve under your chairmanship, Dame Cheryl, and to see in his place the Paymaster General, who is one of the most thoughtful Ministers in the Government and whom I look forward to hearing from later. I congratulate my hon. Friend the Member for Harborough (Neil O’Brien) on securing this important debate. I do not wish to go through content that has already been provided to hon. Members, but I do wish to approach the topic from a slightly different direction.

This is an exciting time for the United Kingdom. Whatever side of the fence people were on, we are leaving the European Union, and we need to ensure that the economy and the country are fighting fit, not only for businesses to exist for their own sake, but for the people they are there to create jobs and wealth for, and for the next generation who will live with the consequences of our decisions today.

I am very pleased that the Government have an agenda for a more global Britain. We are finding our feet in the world and want to ensure that we build bridges with more countries around the world, and become more internationalist and a great trading nation once again. In that context, it is important to consider, as my hon. Friend the Member for Havant (Alan Mak), who is not able to be in his place this afternoon, would say, the fourth industrial revolution, which is at a critical juncture in our country’s and the world’s history.

Technologies are emerging and affecting our lives in ways that former generations could not have imagined, perhaps in ways that we could not have imagined only 10 years ago. We are in a new era that builds and extends the impact of digitalisation in new and unanticipated ways. In that context, it is important that my hon. Friend the Member for Harborough secured this debate.

In 2016, digital tech employed some 1.5 million people in this country with about £6.8 billion worth of investment in the United Kingdom, which is 50% higher than any other European country, which shows that this country is leading the way. There is always more to do, but we have a good track record of success. It is important to cite that, because we must ensure that, as we develop our industrial strategies, and as the Government develop their digital taxation policies, we continue to back the innovators and drive growth. We must support those creating jobs and those who trade with the world to create lower prices for our consumers, providing greater choice for people across this country, but we must step in when people do not play by the rules.

Some Members have made the point about the delicate balance whereby we want to grow the economy and back those who do the right thing, but must ensure that it is fair. It is that sense of fairness—it is almost a gut feel—that people out in the country feel is often not delivered on. I welcome the fact that the Government are trying to tackle that but, as I said, there is always more to do. That comes in the great context of the UK economy growing. It continues to grow—it has grown 14.8% since 2010, perhaps confounding those who are pessimistic about the United Kingdom’s prospects in the years ahead. I mention that because it is important that digital taxation and the plethora of Treasury policy is pro-business and pro-people.

Corporation tax is 19%, down 9% since 2010, with a target of going further, which is a good thing, but I agree with my hon. Friend the Member for Grantham and Stamford (Nick Boles), who referenced earlier in an intervention that it is not just corporation tax that counts, and that business rates are very important to small businesses, to which we have given a significant number of exemptions. That is welcome, but there is always more to do. Why? Someone can have a big warehouse in any town or even in the countryside selling lots of very low-margin products, on which they will not make much profit.

Such businesses face challenges when they compete with small offices, or perhaps not even offices, selling high-margin products but paying low rates or no rates, and of course they compete with others further afield who have a different tax regime, with different rates or different regimes entirely. We must ensure we are internationally competitive. Just as we have reduced corporation tax so that we are leading the world, we must ensure we do the same in other taxation.

It is important that we raise taxation in a fair way. We are raising taxation because, without a strong economy delivering it to the Exchequer, we cannot fund public services. Nor can we help people to keep more of the money they earn. We have cut income tax for 31 million people, raising the personal allowance to do so. We have taken a lot of people out of tax altogether. We can afford those things in the long run only if we get taxation right, and only if we ensure that business taxes are internationally competitive. We should encourage businesses to base themselves here, and ensure that they genuinely get money into the Exchequer.

As I said earlier, we must ensure that the system is fair, because tax evasion and aggressive tax avoidance irks people. I am pleased that, since 2010, HMRC has recovered £160 billion for the Exchequer, which is good news. That money can go into public services when it did not previously. I understand we are trying to combat online VAT fraud as well. That is good progress, but there is more to do.

I note in the Government’s report that they seek to have more OECD and G20 co-operation to control those measures and tackle the issues. The report states:

“the preferred and most sustainable solution to this challenge is reform of the international corporate tax framework”.

I agree with that because there is no point in our doing one thing if other countries do not follow, and no point in our doing one thing if we cost jobs in this country and put businesses out of business. That is not in the Government’s, the country’s or the people’s interest.

Businesses employ people who need to look after themselves and their families through the security of a job. We must maintain competitiveness and ensure we deliver lower taxes for all, but we must ensure that those taxes are fair and that they are paid. I am afraid to say that that is absolutely in stark contrast to Labour party policy. Although the hon. Member for Bootle (Peter Dowd) is a good chap with whom I have had many pleasant exchanges, I have concerns that the Labour party—I wait to be confounded and corrected—does not seem interested in how to make businesses and taxes work, and instead is looking at policies concerned only with protectionism, looking at the past and taxing hard-working people more.

[Luke Graham (Ochil and South Perthshire) (Con)]

My hon. Friend is making a very good point about Labour and tax, but it is not just about Labour. It is important to take into account the Scottish National party. Its tax-varying powers were used to increase bands of taxation, which has led to unintended consequences. The impact on marriage allowances and pensions and things will disadvantage people in our constituencies.

[Mr Jayawardena]

My hon. Friend makes a strong point. It is right that we consider the implications across the whole of this country of the policies of the Labour party and the SNP-led Government. We should also look at where the Liberal Democrats and Greens wish to take our taxation system, which is wrong-headed in so many ways. The tax systems they espouse seem to look back and to tax people more. They do not seem to be interested in how to boost business. They are not interested in the future. They do not seem to care about the next generation and how we will ensure that we create a Britain fit for the future.

The Economy

Luke Graham Excerpts

Thursday 22nd March 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

I do not know how the Chief Secretary managed to keep a straight face throughout that speech, and I am confused, too: listening to her, I thought I was in some sort of utopian democracy, but I am afraid it is completely not like that. It is a little over a week since the Chancellor stood up in the Chamber and delivered the first spring statement, proclaiming that there was light at the end of the tunnel, yet at the same time the Government have presided over the slowest recovery since the 1920s. The Chief Secretary did not mention that, so it is no surprise that for many people across this country her words rang hollow and untrue. The Tigger-like demeanour of the Chancellor and the back-slapping and self-congratulatory tone of his Cabinet colleagues, rather than reassuring an increasingly fearful public, reek of a complacency that betrays the poor state of the public finances and the challenges our economy faces.

The Chief Secretary referred to facts so let us have a few, because the facts do speak for themselves. Last year growth in the UK economy was the lowest in the G7 and the slowest since 2012. Inflation is the highest in the G7. Despite the marginal upward revisions last week, the Office for Budget Responsibility has revised forecast growth down in both 2021 and 2022, and growth is lower in every year of the forecast compared with March 2017. Those are a few facts I thought I would chuck in.

Meanwhile the economy, according to the Institute for Fiscal Studies, will now be 3% smaller in 2020-21 than was forecast just two years ago. Another fact: real wages have fallen every month in the last year and are lower today than they were in 2010. The OBR has said that it expects wages to remain subdued—an understatement if ever there was one—over the next five years, and the Resolution Foundation has gone further, arguing that the last decade has been the weakest for average earnings in two centuries after adjusting for inflation. So that is a strong economy, is it? It does not look very strong from where I and millions of other people sit.

Meanwhile, personal debt, which has risen to worryingly high levels, and stronger world growth are helping to keep the show on the road, masking just how useless the Government’s economic policy is. The reality is that the Government’s bluster and bravado are fooling no one, particularly at a time when their failed economic policies continue to harm the UK economy and not just the most vulnerable in society, but millions of people who are in work.

Whatever positive spin the Chancellor and the Chief Secretary want to put on it, this Conservative Government have missed every deficit target they have ever set. [Interruption.] It would be a lot better than under this Government; they have not really invested, and the investments they have made are pretty poor. Public sector borrowing is still higher than forecast a year ago, and public sector debt is over £700 billion higher than when the Conservatives came to power. This is hardly a record of economic competence, but is instead reflective of just how out of touch Ministers are. And may I remind the Chief Secretary that they supported all Labour’s financial spending plans in 2007-08?

[Luke Graham (Ochil and South Perthshire) (Con)]

Does the hon. Gentleman not find it a little ironic that he is criticising my colleagues on this side of the House when his own party’s plans would plunge our country into even more debt, which we would be paying off for another two generations?

[Peter Dowd]

The hon. Gentleman is living on the same fantasy island as the Chief Secretary to the Treasury.

Outside the corridors of Whitehall and the Conservative cocktail parties, the reward for such a consistent record of failure in any job would be the boot. Instead, this divided and increasingly paralysed Government linger on, propped up by the Democratic Unionist party, with not much of a legislative agenda to speak of. It is almost like being on a zero-hours contract, which I know the Chief Secretary to the Treasury loves, while still being paid. It is clear that the Government are running scared. It is been seven weeks since the Public Bill Committee stage of the Taxation (Cross-border Trade) Bill, yet there is still no sign of Ministers putting it before the House for its Report stage. They are frightened to death to come to the House on that matter. Instead, we have been subjected to the reckless and misinformed musings of the Transport Secretary, who has speculated that customs checks will simply not be enforced at the port of Dover. Similarly, Ministers have refused to bring back the Trade Bill, at a time when President Trump is on the verge of starting a trade war.

--- Later in debate ---

[Peter Dowd]

Look, the reality is that the economy is not growing to the level it should be, because this Government are not investing in it. Actually, something like 50% of the growth in the economy is going to the most well-off 10%, and that is not reasonable. It is not fair. I ask the hon. Gentleman to bear those figures in mind. It is not simply a question of the growth in the economy; it is a question of where that growth goes and whether it is being shared out reasonably.

[Luke Graham]

Given that we are talking about growth figures, will the hon. Gentleman welcome the export boom in the north-west that has seen exports increase in the billions for Cumbria and Liverpool?

[Peter Dowd]

Of course, and I am glad that the Chief Secretary mentioned the port of Liverpool, which is actually in my constituency. She should have popped in for a cup of tea.

Spring Statement

Luke Graham Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

On the statement, the reason that I have come to the House to make this statement today is because the OBR has published its second report of the fiscal year. It is mandated by Parliament to produce two reports a year, and I think that the House would have regarded it as a gross discourtesy if I had published the report without coming to the House to answer questions on it. I am glad that the hon. Gentleman has mentioned skills shortages. He will recognise that, while skills shortages are a serious problem, it is in a sense the better problem to have, rather than having skilled people looking for employment. The work is there, the jobs are there and the economic growth is there; we now have to respond to that by delivering the skills that people need. On outsourcing, we will continue to pursue the best value for money for every pound of taxpayers’ money that we spend, and where that involves collaborating with the private sector, that is what we will do. The way in which we have handled the Carillion situation has ensured that public services continue to be provided and that the public purse has not had to bail out a private company.

[Luke Graham (Ochil and South Perthshire) (Con)]

I should like to join the Scottish National party Finance Secretary in Holyrood in acknowledging the additional funding for Scotland’s block grant. The extra £479 million will mean a real-terms increase over the next few years. Given that Scotland’s GDP growth is forecast to be less than 1%, will my right hon. Friend commit to driving economic activity across all our constituencies through initiatives such as the Stirling and Clackmannanshire city deal?

[Mr Hammond]

Yes, but it is a pity that the SNP spokesman here did not feel inclined to acknowledge the same thing. My hon. Friend is right to suggest that we are a Government for the whole of the United Kingdom. It is not the Scottish people’s fault that they have a Government who are adopting policies that are depressing economic growth in Scotland and will depress it further in the months and years ahead. We will go on delivering policies that are designed to improve the economy across the whole of the United Kingdom, including the growth deals in Scotland.

Sanctions and Anti-Money Laundering Bill [ Lords ] (Sixth sitting)

Luke Graham Excerpts

Tuesday 6th March 2018 Public Bill Committees

[Helen Goodman (Bishop Auckland) (Lab)]

Before we broke for Justice questions, I was speculating about why David Cameron’s Administration were quite enthusiastic to make progress on this issue but the current Administration seem less enthusiastic. I had basically made my arguments and I was about to bring my speech to an end.

[Luke Graham (Ochil and South Perthshire) (Con)]

I say to the hon. Member for Bishop Auckland that there are Government Members who are in favour of public registers of beneficial ownership in British overseas territories. I studied international financial reporting standards extensively in my former life as an accountant—I draw Members’ attention to my entry in the Register of Members’ Financial Interests—and I am a member of the Public Accounts Committee. Having more transparency through country-by-country reporting and ensuring public oversight and increased transparency of a lot of our transactions will mean that we actually raise standards, not only in the UK mainland, where we have done so by introducing a public register, but in our overseas territories. Given the opportunity that Brexit provides us, in terms of having to reinvigorate our economy and our brand, it is important that we lead. Certainly, what is good enough for the mainland should be good enough for overseas territories.

I know from conversations with my right hon. Friend the Minister for Europe and the Americas that the Foreign and Commonwealth Office has concerns about whether it is right to impose measures on overseas territories. There is precedent for that, as the hon. Member for Bishop Auckland said, but there are concerns about whether it would be right to do so in this case. I do not believe in “devolve and forget”, although overseas territories have different constitutional arrangements. As MPs, we are responsible for taking a leading role. Westminster is here to lead, not to follow, and the United Kingdom should be a leading light when it comes to financial transactions and financial transparency, as it has been on so many global reporting standards.

[Helen Goodman]

The distinction that the hon. Gentleman makes suggests to me that, although he may hesitate to vote for new clause 1, he will agree to new clause 8, which merely calls for a consultation.

[Luke Graham]

I will come to exactly what I am looking for in just a minute.

[Mike Freer (Finchley and Golders Green) (Con)]

Don’t let her tempt you.

[Luke Graham]

Yes, exactly. I am conscious that we have discussed new clause 1 at length and that my right hon. Friend the Minister has listened to private petitions from me and other Members. I reiterate that I am sensitive to the different constitutional arrangements for each overseas territory, the way that local legislatures pass their laws and the reasons why they have interests in different areas of financial services, as the hon. Lady highlighted. However, the United Kingdom Parliament should be clear that, if we find a wrong, we should try to right it. I have received correspondence from overseas territories about the cost of implementing a public register and how that might negatively impact their economies. The United Kingdom Government should try to help them with any transition or implementation costs. In the longer term, if it means a shift in their economies and if implementing a public register creates a large gap, we should commit to helping their economies to transition. We must not just take away one aspect of their economies and leave them to fend for themselves.

I ask my right hon. Friend the Minister to commit to engaging with the overseas territories. We have already made a lot of progress. The United Kingdom mainland is the leading light on financial transparency, and we have led the way with the public register. We must engage with the overseas territories, take them on the journey with us and help them to overcome some of the challenges they will inevitably face in a positive and constructive way.

[Alex Norris (Nottingham North) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Ochil and South Perthshire. My hon. Friend the Member for Bishop Auckland probably shares quite a few of these views. She made a comprehensive and weighty case; I just want to build on a couple of elements of it. We have recognised on Second Reading and during this discussion that Britain and the British Parliament have a really good record in this area. We should be proud that we are world-leading, and we should continue to be so. As we debate this transition Bill, which is a Brexit Bill at its heart, we should ensure that we remain at the forefront.

We can have the best fence in the world, but there are limits to what we can do if this goes on to our neighbours’ properties. If we have a special relationship with our neighbour, perhaps there are better ways of doing it—I will not torture that metaphor further. At its root, this is clearly a problem that needs solving. The hon. Member for Ochil and South Perthshire characterised it as a wrong that needs righting. The Panama papers listed the British Virgin Islands as the No. 1 location for those issues. Similarly, as my hon. Friend the Member for Bishop Auckland said, Oxfam listed Bermuda as No. 1, and we have seen the briefing materials from Christian Aid. Just so this cannot be portrayed as an activist campaign—as though that could be a bad thing—HSBC and even BHP Billiton say that this is the sort of thing we need. BHP Billiton is the world’s biggest mining company, so it is not often that it and I are bedfellows, but it understands that unclear audit trails for money are bad for its business. They are bad for the communities from which the money comes, but also bad for BHP Billiton’s global finance enterprises, so it is urging us to take action.

This proposal is proportionate. We heard on Second Reading that, given that the overseas territories have had a difficult few months, time has been built into the proposal. There is recognition of how the Crown dependencies ought to be supported. Ministers have said throughout this Bill Committee that, when it comes to the overseas territories, we are responsible for foreign affairs and security. Absolutely—I could not agree more—and anti-money laundering and dirty money passing over borders in massive quantities are at the root of security and foreign affairs. Money laundering underpins global terror, and we ought to be squeezing it wherever we can, because that is one way of cutting off those networks. The combatants we engage with may seem like they are hidden in hills and hard to find, and are perhaps not like us, but from all we have been through over the past 20 years, we know that they have some very sophisticated cells, behind which is big money. This is a chance to clamp down on that.

This will say a lot about us as we go into the brave new post-Brexit world. We have heard the phrase “brand Britain”—the hon. Member for Ochil and South Perthshire talked about our brand—and who we are and where we place ourselves in the world will be very important to it. On the one hand, our Ministers are going round the world saying that we have a great approach to money laundering, but on the other, these are British overseas territories—the Minister referred to them as overseas territories, but they are British overseas territories, and our name is attached to them.

--- Later in debate ---

[Sir Alan Duncan]

My hon. Friend is absolutely right. It is exactly that comparison that we need to see in the round, in order to understand that there could be unforeseen detrimental consequences of any kind of imposition proposed for the overseas territories.

[Luke Graham]

I understand the Minister’s point about overseas territories and the challenges faced by other jurisdictions such as the United States. Britain leads in a number of global reporting initiatives. Without compelling overseas territories to change their ways, we could still lead the conversation with the United States and the overseas territories in the round, to ensure that we progress this reporting and show the benefits that we have already recognised on the mainland. I urge my right hon. Friend not to draw parallels with the devolved settlement in the UK because we have Scottish MPs in this House, and they are there making laws in Scotland, whereas the overseas territories do not have MPs in this House.

[The Chair]

May I remind the hon. Gentleman that interventions should be shorter than that?

Sanctions and Anti-Money Laundering Bill [Lords] (Sixth sitting)

Luke Graham Excerpts

Tuesday 6th March 2018 Public Bill Committees

[Helen Goodman (Bishop Auckland) (Lab)]

Before we broke for Justice questions, I was speculating about why David Cameron’s Administration were quite enthusiastic to make progress on this issue but the current Administration seem less enthusiastic. I had basically made my arguments and I was about to bring my speech to an end.

[Luke Graham (Ochil and South Perthshire) (Con)]

I say to the hon. Member for Bishop Auckland that there are Government Members who are in favour of public registers of beneficial ownership in British overseas territories. I studied international financial reporting standards extensively in my former life as an accountant—I draw Members’ attention to my entry in the Register of Members’ Financial Interests—and I am a member of the Public Accounts Committee. Having more transparency through country-by-country reporting and ensuring public oversight and increased transparency of a lot of our transactions will mean that we actually raise standards, not only in the UK mainland, where we have done so by introducing a public register, but in our overseas territories. Given the opportunity that Brexit provides us, in terms of having to reinvigorate our economy and our brand, it is important that we lead. Certainly, what is good enough for the mainland should be good enough for overseas territories.

I know from conversations with my right hon. Friend the Minister for Europe and the Americas that the Foreign and Commonwealth Office has concerns about whether it is right to impose measures on overseas territories. There is precedent for that, as the hon. Member for Bishop Auckland said, but there are concerns about whether it would be right to do so in this case. I do not believe in “devolve and forget”, although overseas territories have different constitutional arrangements. As MPs, we are responsible for taking a leading role. Westminster is here to lead, not to follow, and the United Kingdom should be a leading light when it comes to financial transactions and financial transparency, as it has been on so many global reporting standards.

[Helen Goodman]

The distinction that the hon. Gentleman makes suggests to me that, although he may hesitate to vote for new clause 1, he will agree to new clause 8, which merely calls for a consultation.

[Luke Graham]

I will come to exactly what I am looking for in just a minute.

[Mike Freer (Finchley and Golders Green) (Con)]

Don’t let her tempt you.

[Luke Graham]

Yes, exactly. I am conscious that we have discussed new clause 1 at length and that my right hon. Friend the Minister has listened to private petitions from me and other Members. I reiterate that I am sensitive to the different constitutional arrangements for each overseas territory, the way that local legislatures pass their laws and the reasons why they have interests in different areas of financial services, as the hon. Lady highlighted. However, the United Kingdom Parliament should be clear that, if we find a wrong, we should try to right it. I have received correspondence from overseas territories about the cost of implementing a public register and how that might negatively impact their economies. The United Kingdom Government should try to help them with any transition or implementation costs. In the longer term, if it means a shift in their economies and if implementing a public register creates a large gap, we should commit to helping their economies to transition. We must not just take away one aspect of their economies and leave them to fend for themselves.

I ask my right hon. Friend the Minister to commit to engaging with the overseas territories. We have already made a lot of progress. The United Kingdom mainland is the leading light on financial transparency, and we have led the way with the public register. We must engage with the overseas territories, take them on the journey with us and help them to overcome some of the challenges they will inevitably face in a positive and constructive way.

[Alex Norris (Nottingham North) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Ochil and South Perthshire. My hon. Friend the Member for Bishop Auckland probably shares quite a few of these views. She made a comprehensive and weighty case; I just want to build on a couple of elements of it. We have recognised on Second Reading and during this discussion that Britain and the British Parliament have a really good record in this area. We should be proud that we are world-leading, and we should continue to be so. As we debate this transition Bill, which is a Brexit Bill at its heart, we should ensure that we remain at the forefront.

We can have the best fence in the world, but there are limits to what we can do if this goes on to our neighbours’ properties. If we have a special relationship with our neighbour, perhaps there are better ways of doing it—I will not torture that metaphor further. At its root, this is clearly a problem that needs solving. The hon. Member for Ochil and South Perthshire characterised it as a wrong that needs righting. The Panama papers listed the British Virgin Islands as the No. 1 location for those issues. Similarly, as my hon. Friend the Member for Bishop Auckland said, Oxfam listed Bermuda as No. 1, and we have seen the briefing materials from Christian Aid. Just so this cannot be portrayed as an activist campaign—as though that could be a bad thing—HSBC and even BHP Billiton say that this is the sort of thing we need. BHP Billiton is the world’s biggest mining company, so it is not often that it and I are bedfellows, but it understands that unclear audit trails for money are bad for its business. They are bad for the communities from which the money comes, but also bad for BHP Billiton’s global finance enterprises, so it is urging us to take action.

This proposal is proportionate. We heard on Second Reading that, given that the overseas territories have had a difficult few months, time has been built into the proposal. There is recognition of how the Crown dependencies ought to be supported. Ministers have said throughout this Bill Committee that, when it comes to the overseas territories, we are responsible for foreign affairs and security. Absolutely—I could not agree more—and anti-money laundering and dirty money passing over borders in massive quantities are at the root of security and foreign affairs. Money laundering underpins global terror, and we ought to be squeezing it wherever we can, because that is one way of cutting off those networks. The combatants we engage with may seem like they are hidden in hills and hard to find, and are perhaps not like us, but from all we have been through over the past 20 years, we know that they have some very sophisticated cells, behind which is big money. This is a chance to clamp down on that.

This will say a lot about us as we go into the brave new post-Brexit world. We have heard the phrase “brand Britain”—the hon. Member for Ochil and South Perthshire talked about our brand—and who we are and where we place ourselves in the world will be very important to it. On the one hand, our Ministers are going round the world saying that we have a great approach to money laundering, but on the other, these are British overseas territories—the Minister referred to them as overseas territories, but they are British overseas territories, and our name is attached to them.

--- Later in debate ---

[Sir Alan Duncan]

My hon. Friend is absolutely right. It is exactly that comparison that we need to see in the round, in order to understand that there could be unforeseen detrimental consequences of any kind of imposition proposed for the overseas territories.

[Luke Graham]

I understand the Minister’s point about overseas territories and the challenges faced by other jurisdictions such as the United States. Britain leads in a number of global reporting initiatives. Without compelling overseas territories to change their ways, we could still lead the conversation with the United States and the overseas territories in the round, to ensure that we progress this reporting and show the benefits that we have already recognised on the mainland. I urge my right hon. Friend not to draw parallels between the devolved settlement in the UK because we have Scottish MPs in this House, and they are there making laws in Scotland, whereas the overseas territories do not have MPs in this House.

[The Chair]

May I remind the hon. Gentleman that interventions should be shorter than that?