Cross-border Trade and Accounting

Debate between Luke Graham and Bob Stewart

Wednesday 30th October 2019 Commons Chamber

[Luke Graham]

Is the Minister on his feet?

[Bob Stewart (Beckenham) (Con)]

He is going for a drink.

[Luke Graham]

I hope it is whisky; we will be here for a while.

Accountants can help us with some of our biggest social and environmental challenges. In the current context, with Brexit on the horizon, I thought this debate would be useful, and later in my speech I shall come to the issues relating to trade between Northern Ireland and Great Britain.

Let me give a little background on accounting systems—the non-accountants in the room can tune in now, because this is the exciting bit. Accounting has come a long way since it was established centuries ago: we had the evolution of double-entry bookkeeping from the original ledgers; we then had some base computing in the 19th century, and then more into the 20th century; and we now have the far more advanced accounting systems that we use today. During my previous life, before I entered the House, I was lucky enough to use a range of different systems, on which I shall touch in just a minute.

One of the Government’s greatest advances in the use of accounting systems to help on the domestic front was the Making Tax Digital scheme. Unfortunately, like many others, I was greatly upset by the fact that the Government had to defer some of their plans to make tax digital because of the advent of Brexit and the consumption of Government time by Brexit preparations. Making tax digital and using accounting systems, whether for small or large businesses, is important because it makes us more efficient and more productive, and it can lead to better decision making for companies right across the United Kingdom. That is vital.

Whether someone is a single trader in Portsmouth, working for the global manager in Edinburgh, or working for a large multinational in London, accounting systems can really give them the transparency of data that they need. They are also environmentally friendly, because as accounting systems develop, we are able to move away from paper receipts and invoices and towards electronic records, which makes interactions between individual companies, customers and suppliers far easier, more efficient and more effective. As a result, the real benefit will be for the entire country, because not only will companies grow, but it will contribute to our productivity and thus our GDP.

Another important point is that as companies are developing, intangibles and intangible assets are becoming more and more important in their valuation. In fact, just a few years ago it was recognised that around 80% of the value of the S&P 500 is in intangible assets rather than tangible assets. That is why the development of accounting systems is so important: we need to be able not only to capture the value of our physical assets, and use the traditional accounting fair-value methods to make sure that those assets are held at the right value, but to look at new methods of valuing intangibles, because the intangibles of brands and, to a certain extent, intellectual property, along with other new technological advancements, mean that it is increasingly the case that less and less of companies’ value is being captured on our stock exchanges, and that obviously has an impact on the prices that are traded and the returns that can be made by companies and customers throughout the country.

As I said earlier, a number of systems have come into the accounting sphere that can help smaller businesses to improve and be more effective. One of them is Xero and another is QuickBooks, and there is also Oracle for large companies. I should say, for the sake of fairness, that plenty of other accounting systems are available. The point of these systems is to make sure that, from the base transaction and from the base-level accounts receivable and accounts payable systems, right the way up to the highest-level strategic decision making, managers and users of the information have the correct information —the one source of truth—and that there is consistency in the data right the way through the organisation. That is for the benefit not just of the actual company, but of HMRC and our Government. The better the records we receive, the more accurate the accounts are and the more accurately we can calculate the tax take for those companies as well. Obviously, it is always a good thing that not only should taxes be low, but companies and individuals pay the taxes that they do indeed owe.

In the current context, as we move between accounting systems, I would like to apply some of this to the discussions that we have been having on Northern Ireland. The reason why I take this leap—some might see it that way—is that many of the accounting systems that are imported now are connected to HMRC to help companies and individuals file their tax returns. They are also connected to HMRC for the purpose of VAT filing. As we know with Northern Ireland, VAT and customs have been a key issue in the new withdrawal agreement, and I will explore that a little bit more—hopefully with help from my colleague from Northern Ireland.

[Luke Graham]

I thank my hon. Friend for his intervention. He is quite right. There is a number of those accounting systems, but there is also a number of other systems and structures in place in Northern Ireland. I have to be honest about this. Although I have engaged with some of his colleagues on this over the past two years, many Members in this House and the broader public are still ignorant of the matter. It would, I think, be to the benefit of the House if some of these issues were explored in greater detail and in greater depth, so that Members can make more educated decisions, especially when we are working on such controversial issues as withdrawal from the EU, and as we start mapping out our future trading relationship with Europe. As he will recognise, this will also be important when we have new free trade agreements with other countries around the world—whether they are the rollover agreements that are coming across from the EU or, indeed, new trade agreements such as those with the United States of America. I will touch on that matter in just a moment.

[Bob Stewart (Beckenham) (Con)]

I thank my good friend for allowing me to intervene on him. Let me follow up on the point from the hon. Member for Strangford (Jim Shannon). Presumably, this digital accounting system will not just be routed into HMRC for tax purposes, but could quite easily be pushed sideways to the Border Force. What we are actually talking about is minimising the paperwork for crossing a border, and that is terribly important.

[Luke Graham]

My hon. Friend is almost making me skip over certain parts of my speech, so I appreciate his intervention. He is quite right. One of the key systems that is currently used is the VAT information exchange system. Under the current withdrawal agreement proposals, it will still be open to Northern Ireland. At the moment, I am not sure whether it will be open to other parts of the United Kingdom, but I recommend that it should be. Through that system, companies and member states are able to co-ordinate VAT returns. It also enables the simplification of those VAT returns between different member states. There have been concerns about the system, certainly in the area of fraud, especially when parts are moving between different areas of member states, but the system is still a good one and will be open to Northern Ireland. That is one of the very good things that is contained within the withdrawal agreement as it stands at the moment.

I did have one question on the issue of VAT. Although VIES will be available to Northern Ireland, as I have said, will it be available to the rest of the UK? Furthermore, one point that I would like someone to explain—it may not be the Financial Secretary to the Treasury today, but certainly I hope that it comes out in further debates—is related to the terms found in the withdrawal agreement when it talks about Northern Ireland being outside EU law in relation to VAT, but also about EU VAT law being applicable in Northern Ireland. Greater transparency in the details around this issue and also in the details around the application of the customs code would help a great deal for debates in this House, which inevitably will take place when, hopefully, we return here in December.

Therefore, as I have said, there are a number of systems available. What is even better is that private business and enterprise are catching up with some of these systems and complementing them. As I mentioned earlier, the evolution of accounting systems that are used by some of these smaller companies and larger companies can then obviously work with systems such as VIES, which means that Government, customers and suppliers can all work together to make sure that there is more efficient and effective record keeping, better tax collection and— hopefully—better revenues and profits for all those involved. As I said, I would love to get some more clarification either from the Treasury Minister himself or from a Brexit Minister in the near future.

This is not just an issue for the United Kingdom and the EU. I had the great fortune to work in China and the United States before I came to this place, and was able to see some of their tax collection and accounting systems in progress. China is an enormous country of over 1 billion people, but a significant amount of accounting records are still kept in paper format—this was back in 2008, so some of the new software was not available then—and everything is signed off by an original chop. For those who do not know, that is a traditional stamp. A record, fapiao or receipt needs a traditional ink chop to be recognised for accounting purposes; multiply that by over 1 billion people, and it becomes more of an issue.

--- Later in debate ---

[Luke Graham]

My hon. Friend makes a very good point. The Minister will be well versed in some of the reports and debates on Making Tax Digital. A lot of these barriers were articulated at that time. One key area will be costs. Sometimes the cost of pieces of accounting software is very low, perhaps a couple of hundred pounds or so, but for a small company it is still an additional cost. The other obstacle that customers and companies will face is knowledge of the accounting software. Even in a large multinational business, many of the executives on the board, and many of the managers, have no knowledge of their accounting system. They are only focused on simple outputs and do not necessarily know what is underneath the bonnet. With modern cars, as we all know, that often leads to more costly and more complicated servicing when the time comes. That is great news for finance directors but not such great news for operational directors.

[Bob Stewart]

In the nicest way, I think that my hon. Friend is such a know-all on this subject that he has just talked himself into becoming a junior or even a middle-ranking Brexit Minister after the election.

[Luke Graham]

I thank my hon. Friend for that intervention—I think. As my record will show, I am very much in favour of more international co-operation, and I hope that we will be doing that when we come back.

Accounting systems can really help with cross-border trade, from small companies to large multinationals. As I hope I have laid out in this short speech, they have been used in places such as Northern Ireland, and they can be discussed in some of our debates when, hopefully, we return to this place. It will be useful for the Government to use some of these systems as they negotiate new trade with other countries all around the world. The Government are very fond of saying that they want a global Britain and that our exit from the EU will allow us to expand over new horizons. I therefore hope that after this speech and the debate that follows, the Minister realises that it may well be accountants who have the key to that global Britain.

UK Shared Prosperity Fund

Debate between Luke Graham and Bob Stewart

Thursday 5th September 2019 Commons Chamber

[Luke Graham]

I secured a debate on Scottish funding and devolved funding just before the summer recess to which no SNP MP turned up. In that debate, I gave the opportunity to challenge those figures and have an in-depth, detailed discussion about them, because they are not recognised by the Library. If they are, I will be happy to welcome another debate on the topic, so that we can take it further.

I would like to go on to the positive things that we are trying to do. The shared prosperity fund allows us to formalise the process of applying for funds. It could also build and improve the city deal and growth deal projects that have already been awarded Scotland to the value of over £1 billion. The money in the city deals has been very welcome, but I think Members on both sides of the House would agree that the city deal and growth deal process could do with some improvement. We can have less bureaucracy, and central Government should provide support to not only the devolved Administrations but the local authorities and civic groups that are applying for these funds. So often, exciting and transformational opportunities are lost because local businesses and local groups do not have the skills to meet a Green Book or European set of qualifications to access the funding that they so require.

[Bob Stewart]

It seems to me that there is a requirement for the shared prosperity fund organisation to have a local office, particularly to help small businesses.

[Luke Graham]

I thank my hon. Friend for his suggestion. That is just the kind of innovative proposal that we should be putting forward and having a cross-party discussion about, to ensure that the shared prosperity fund works for the entire United Kingdom.

Although we could talk about this for a great many hours more, I am conscious of time, so I will conclude. I am pleased that the Government have guaranteed funding to 2022, which I am sure the Minister will confirm, so that we can give assurances to the charities, local government and businesses in our communities. We do not come with grievance; we come with solutions. Let us keep the central fund of around £1.2 billion plus inflation for the future, but let us also recognise that it has not delivered transformational change for our constituents in Scotland. Perhaps we could put some of the UK match funding into a new direct central fund that local authorities and businesses could bid into, along national lines, to provide greater clarity and guarantees for our local communities, so that they can access the funds they so badly need to thrive and survive.

I agree with colleagues in Wales, Scotland and England that these funds provide opportunities to all our regions. We want to combat structural inequality and improve the opportunities we have, and we want to do it through a fine United Kingdom system.

Stalking Protection Bill

Debate between Luke Graham and Bob Stewart

3rd reading: House of Commons & Report stage: House of Commons
Friday 23rd November 2018 Commons Chamber

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

I congratulate my hon. Friend the Member for Totnes (Dr Wollaston) on bringing this important Bill to this advanced stage. My only disappointment is that, in its current form, it does not apply to Scotland.

In Scotland stalking is covered under the Criminal Justice and Licensing (Scotland) Act 2010, section 39 of which includes some of the measures we discussed this morning. Section 39 specifically mentions conduct, especially the different kinds and modern forms of stalking. The conduct defined in that Act includes: following someone; contacting or attempting to contact them by any means; publishing material relating to, purporting to relate to or purporting to originate from them; monitoring their use of electronic communication; entering premises; loitering in any place; interfering with their property; watching or spying on them; or acting in another way that a reasonable person would expect to cause the victim to experience or suffer fear or alarm.

The 2010 Act has no provision for a stalking protection order, which my hon. Friend seeks to introduce today. If the Bill is successful, we can work with colleagues in the Scottish Parliament to make sure there is equality of law and equality of the protection of rights across the United Kingdom.

This truly is a British problem. In 2017-18 there were 1,376 reported cases of stalking in Scotland, up from 495 in 2011-12—a 170% increase in the incidence of stalking. I know from the personal experience of constituents coming to my office that geography is no hindrance to such crimes, and it is important that, across the United Kingdom, our citizens have the same rights and protections.

My hon. Friend the Member for Torbay (Kevin Foster) spoke on Report about the British Transport police—an issue that has been a bone of contention back home and has been debated here and elsewhere. It is particularly important that these powers include the British Transport police, because these crimes have no respect for geography. He accurately highlighted that busy commuter trains and other forms of transport are where individuals can be at the greatest risk, especially in this day and age when a mobile phone can be used to take a picture or a video of someone sitting on a train, reading a paper in a tube carriage or doing anything else on public transport. That is another realm of risk, and many years ago, or even in the 2010 Act, we would not have appreciated the current extent of that risk. Including the British Transport police and making sure we have a co-ordinated and joined-up approach across the United Kingdom are both important.

Many Members have spoken today about their experiences as Members of Parliament, and about the experiences of their constituents. A number of constituents have approached me with varying degrees of relationship and other issues, and whether they go to the civil courts or cross over to the criminal courts, it is important that such personal and individual matters are given the right expression and protection in this place.

Individuals can be affected in incredibly negative ways when what originally seems to be innocent following turns a lot more malicious. It is important to make sure that the protections are there for these individuals, which is why I started my speech by talking about the different forms of conduct. It is important that we consider the breadth of conduct.

[Bob Stewart (Beckenham) (Con)]

I listened carefully to my hon. Friend the Member for Croydon South (Chris Philp), who talked about a definition of stalking. My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) has just raised that matter again. The real problem sometimes is that what seems innocuous to most people preys on the mind of the person who is being stalked, so a little thing that we may think is nothing actually has a huge impact. That is one of the problems of defining stalking.

[Luke Graham]

I thank my hon. Friend, who makes, as always, a very wise contribution that is very welcome. As I was saying, it is important that we protect these individual rights and make sure that, no matter how seemingly innocent these actions are, people have the right protection so that the experience is right for them because it is about their own fear of harm and harassment.

I welcome the provisions to extend this to the British Transport Police and to make sure that the protections for individuals are there. I hope that, if my hon. Friend the Member for Totnes is successful with the Bill, she will work with colleagues in the Scottish Parliament as well to make sure that we have equal rights across our United Kingdom.