Transport for Towns

Matt Western Excerpts

Tuesday 19th February 2019 Westminster Hall

[Caroline Flint]

I absolutely agree. I actually speak from personal experience, second hand though it may be, because my husband, Phil, lived in Stockton and travelled to Hartlepool every day to go to secondary school. In many respects, the service was probably better then than today for many of our schoolkids.

[Matt Western (Warwick and Leamington) (Lab)]

My right hon. Friend is making an important speech. In accessing further education, schools, and also employment to help to pay for that education, young people in villages such as Barford and Bishop’s Tachbrook in my constituency are being alienated.

[Caroline Flint]

That is an important point about young people. I will talk later about the fatalities in my constituency of young drivers, who are often forced into getting a car as it is the only means of getting around. These young people are not drinking or anything else but are just inexperienced drivers on our country and rural roads. That is a big problem.

Coventry City Football Club

Matt Western Excerpts

Tuesday 15th January 2019 Westminster Hall

[Mr Jim Cunningham (Coventry South) (Lab)]

I beg to move,

That this House has considered Coventry City football club and football stadium ownership.

I think this is the first time I have introduced a Westminster Hall debate with you in the Chair, Mr Walker. I may be wrong—if I am, you have my apologies. I thank Mr Speaker for granting the debate, which is very important to the people of Coventry, and to the people of Warwickshire in general. This is the fourth debate in recent years about the future of Coventry City football club. The previous debate took place last February, and the threat to the club’s future has only worsened since. Its immediate future is now at risk, and urgent action must be taken.

I thank the Sky Blue Trust, which has worked tirelessly for the sake of the club and the city, and all the other Coventry City supporters both in the city and outside it. I also thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for the hard work she put in to help our club when she was Sports Minister. I am very sorry that she had to resign because of Brexit, but that is another matter. That is no reflection on the new Minister, who will be judged on her record.

The background to this issue is the club’s 12-year ownership by Sisu, during which time it has faced many difficulties. Under Sisu’s stewardship, the club has fallen from the championship to league two, faced administration and received repeated points deductions. Despite its promotion to league one last season, instability off the pitch overshadows any success. The worst moment in the club’s recent history was its year-long exile in Northampton in 2013-14. Although an agreement was eventually struck by the English Football League, the club’s issues have only deepened since.

Since moving back to the Ricoh arena, the club has become a tenant of Wasps rugby football club. Wasps’ decision to buy the Ricoh arena from Coventry City Council was a success for it, and it has become a welcome and growing part of sporting life in the city. However, relations between Wasps and Coventry City have become increasingly sour. Sisu’s decision to challenge the sale of the Ricoh arena led to years of legal disputes, which culminated in the rejection of its case by the Court of Appeal last October. However, we must now wait to see whether the Supreme Court will hear a fresh appeal.

[Matt Western (Warwick and Leamington) (Lab)]

I thank my hon. Friend for securing a debate about this proud club, which, as he says, is important not just for the people of Coventry but for many people in and around Warwickshire. Although I agree with him and welcome the work of Wasps in the city, does he agree, in looking at all this and at the court case, that there is also a role for the Football League and the Football Association? This is not just about Coventry City, because other clubs face similar situations.

[Mr Cunningham]

My hon. Friend the Member for Coventry North East (Colleen Fletcher) and I have both written to the Football League to ask for a meeting, and that is pending. Obviously this matter is sub judice, so I do not want to go too far into the court case. Suffice it to say that, in the interest of progress, Sisu perhaps should set aside its application to go to the courts until we have tried to resolve the issue in another way. That would show a lot of good will on both sides.

ONS Decisions: Student Loans

Matt Western Excerpts

Tuesday 18th December 2018 Commons Chamber

[Elizabeth Truss]

I cannot pre-empt the Augar review, which is currently taking place, of student finance—it will look at some of the issues the hon. Lady has raised—nor can I pre-empt a future fiscal event. This question is somewhat premature, because the ONS has not yet produced its detailed figures on the issue.

[Matt Western (Warwick and Leamington) (Lab)]

It would seem from the ONS decision that the same sort of mathematical genius has been applied that was applied with Tesconomics a few years ago. Given that 45% of the debt will not be repaid and that a large proportion of the debt is interest, does the Chief Secretary think it is astute and prudent to apply such an extortionate rate of interest—6.3%?

[Elizabeth Truss]

All aspects of student finance are under consideration in the Augar review, but that is a very different issue from how the ONS classifies various accounting decisions within Government. As I have said, the DFE is leading on the Augar review, and it is addressing those issues.

Alpha-1 Antitrypsin Deficiency

Matt Western Excerpts

Wednesday 31st October 2018 Westminster Hall

[Mark Pawsey]

Part and parcel of our efforts today is to achieve precisely that. I am delighted that the hon. Lady’s constituent comes to Coventry and is being treated by the excellent services at University Hospitals Coventry and Warwickshire.

Unfortunately, alpha-1 is not yet curable, and no specific treatment for the disease is freely available in the UK; it is a matter of treating only the symptoms with the appropriate therapeutic methods. The hon. Member for Strangford (Jim Shannon) referred to intravenous AAT protein augmentation therapy, which involves replacing the missing AAT protein. That treatment is available in the United States, Spain, Germany and Italy, for example, but it is not yet available in the UK.

The National Institute for Health and Care Excellence—the Government body that produces guidelines on which treatments to make available—only last month published draft guidelines that rejected the use of the only licensed augmentation therapy product in the UK, Respreeza. It has had a UK licence since 2015, but was unfortunately deemed by NICE to be too expensive to be made available on the NHS. We acknowledge that it is expensive; lifelong therapy costs around £60,000 per patient per year. NICE continues to evaluate that and will make its final recommendations next year. The entire alpha-1 community has been heavily involved in pressing the case for patients across the country to be prescribed the treatment.

Only the symptoms of alpha-1 sufferers are treated, often by inhaled medications developed for people suffering from asthma and COPD, rather than specific treatments for the lung damage caused by alpha-1. The other issue is that those who suffer from alpha-1 become susceptible to chest infections, which was certainly the case for Stephen Leadbetter, and it is vital that they are treated quickly with antibiotics at the first sign of infection and are vaccinated every year against flu.

[Matt Western (Warwick and Leamington) (Lab)]

I congratulate the hon. Gentleman on securing this important debate, and I commend the work of the alpha-1 patient community in pressing for it as well. Does he share my frustration that the highly specialised NHS alpha-1 service has been approved and budgeted for and was due to be put in place earlier this year, but may not actually be installed by next year?

[Mark Pawsey]

That is certainly a frustration for the many patients who suffer. I hope that the Minister will address progress towards the outcome that we would all like to see.

There are changes that patients can make to their lifestyle to help to manage the condition, including specific exercise programmes and altering their diets. It is also important for them to avoid being around second-hand smoke and other environmental pollutants, such as open fires, petrol fumes, paint, solvents and dust, and that they avoid coming into contact with anyone suffering from a cold or the flu. However, that is often not enough. There is a need for Government action. We would like the Government to look at the prescribed specialised services advisory group’s recommendations and address the specific recommendation for a national, highly specialised service for patients with severe alpha-1.

A Department of Health and Social Care paper sets it out that that service, referred to by the hon. Member for Warwick and Leamington (Matt Western), should be operational by April 2019, which is only six months away. However, I understand that the formal development of the service has not yet commenced, and that it is highly unlikely that it will be operational by the original deadline.

The need for progress on the service forms one of the two principal objectives of the alpha-1 patient community, and I look forward to the Minister’s commenting on that. The second particular ask is to ensure that alpha-1 antitrypsin augmentation therapy—access to Respreeza, the only licensed treatment—will be available. I hope that the Minister responds positively to that.

It is the view of the alpha-1 patient community that the Government should focus on five key areas. The first is that that highly specialised service should become operational in a timely fashion. Secondly, patients should be involved at all stages in the development and implementation of the service to ensure that the patient voice is fully heard and taken into consideration. Thirdly, we are calling for a review of the impact of the NICE highly specialised technologies guidelines on patient access to rare disease treatments.

Fourthly, we are looking to apply a broader decision framework to the NICE process of evaluating the value of rare disease treatments, looking particularly at the social and societal benefits that impact patients and carers. Finally, we ask the Government to consider the appropriateness of introducing a more formalised process of conditional approval of rare disease treatments in England, such as alpha-1 augmentation therapy, as is being implemented in Scotland.

I shall conclude by referring to an email I received from a patient only yesterday that sets out her concerns with alpha-1 and its misdiagnosis. The sufferer emailed me to say that her mother died from antitrypsin deficiency, and that she now has the lung version of the disease. She is 48-years-old, and two years ago was a runner, but can now barely run for a bus or climb stairs. Her lung function has dropped dramatically in just one year. She is an ex-smoker and acknowledges the harm that smoking caused with respect to the condition. Had she been diagnosed earlier, she would have been able to make better lifestyle choices. The bit that got me was when she said that the deficiency for those who are symptomatic progresses at a very fast rate, and that, for many, it will end in gasping for breath for a long, drawn-out period, until such time as their lungs stop functioning completely. She says it feels like being eaten alive.

If the Government can work towards the two principal objectives and five key recommendations of the alpha-1 patient community, there will be a huge benefit to a significant group of people. It is our hope that the present and future needs of patients suffering this rare condition may finally be met.

Taxation (Cross-border Trade) Bill

Matt Western Excerpts

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

I turn then to new clause 36 and amendment 73. The first thing that strikes me about them is that they are designed directly to undermine the White Paper, and the second is that they do not do the job, because they are inadequately drafted. Therefore, the second obfuscation is that the Government accepted amendments that they know cannot do what they are intended to do. Not only that, but they said so to my right hon. and hon. Friends and they have decided not to say, “Oh, in those circumstances we withdraw them,” but to persist with them because they are just an exercise in bullying. It is not my job as a Member of Parliament to put on the statute book clauses that are inadequate, incomprehensible and, on top of that, seek to undermine the Government. That is why I describe those two amendments as entirely malevolent and why I shall vote against both this evening.

[Matt Western (Warwick and Leamington) (Lab)]

I rise to speak to new clauses 1, 11 and 12, and very much in support of a customs union.

I was surprised by the way the former Secretary of State, the right hon. Member for Haltemprice and Howden (Mr Davis), described the border between Detroit and Ontario, which I was lucky enough to visit in February with fellow members of the International Trade Committee. I witnessed something slightly different from what he witnessed. I did see friction—even on a very cold, icy day, people spent considerable time at the border. There is an X-ray building for pantechnicons, and vehicles are frequently taken out of queues to be examined. The situation there is not as simple as he suggested. To underline that—perhaps he is not aware of this—Canada is having to invest in a second bridge across the river between Ontario and Detroit to safeguard its businesses because of the delays they suffer.

I agree with the right hon. and learned Member for Rushcliffe (Mr Clarke), for whom I have huge respect. He described the great fear associated with what seems to be the pursuit of ideological goals or indeed personal ambition on the part of certain individuals. Importantly, for almost a year I have been trying to encourage businesses—the likes of Jaguar Land Rover in my constituency and others—to speak out. Businesses are terrified of doing that because they fear incurring the wrath of the public. They see it not as their responsibility but as ours, as elected representatives. However, in recent weeks, they have felt it necessary to speak out, and of course we have heard from Airbus and Jaguar Land Rover. On the rare occasions they speak, they do so softly, but it is important that we and the public listen to them.

It is far more important for us to listen to the likes of Jaguar Land Rover and BMW-Mini than—dare I say it?—to the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). I think the public are beginning to see that—and to recognise that, among all the debate that goes on in this place, those business voices are starting to provide some clarity.

Businesses have waited for more than two years for the Government to give them some sort of direction in the face of uncertainty, which is a threat to them. I was interested to hear the hon. Member for Harwich and North Essex (Sir Bernard Jenkin). I respect him and his experience, but disruption and uncertainty are the greatest concerns for businesses, which have been reviewing their options for the past 24 months. Irrespective of where we end up in the coming weeks, they are already making decisions and looking at options abroad for future investment.

Anything that makes life difficult for businesses—anything that adds cost and time—makes them review their options and consider what is in their best interest. In the automotive sector and many others, businesses would not be so obviously viable if they had to incur the cost of additional tariffs under WTO rules. They will review a 10% or 4.5% tariff, cost it in and think, “Is it really best for us to stay in the UK?”

[Hilary Benn]

My hon. Friend speaks with great experience on these matters. Does he agree that small businesses may not be able to accommodate the additional costs he mentions from tariffs, rules of origin—we discussed those earlier—and customs declarations, which may exceed the profits they make on the goods they sell? Small and medium-sized enterprises would be most adversely affected by a no deal situation, which some Government Members argue we should contemplate with equanimity.

[Matt Western]

My right hon. Friend is right that SMEs, particularly in the component supply chain, are the most vulnerable to these sorts of changes. They are the most likely either to lose business elsewhere or to have to move abroad. I can give concrete examples where that has already taken place.

The right hon. and learned Member for Rushcliffe described the apparent view that the customs union is some sort of problem holding us back. He is right that it has not held us back. The likes of Germany, which exports 10 times more to China than we do, are in the customs union, which has not been to their disadvantage. As he said, we have witnessed the most phenomenal explosion in the success of the automotive industry in this country over the past 10 years—after 20 years of relative stagnation, it grew by more than 50% in that period.

In summary, where it is rare for businesses to speak out, we should listen. They do not intervene lightly in politics, in this country or elsewhere. The preservation of a true customs union is critical to safeguarding business and investment in this country, and that is why I support new clauses 1, 11 and 12.

[Justine Greening (Putney) (Con)]

I should say first that I recognise the importance of the Bill and why it is necessary if we are leaving the European Union. However, many of the amendments reflect the fact that, regrettably, the White Paper simply does not represent the clearcut, deliverable strategy that I believe our country needs—it is a fudge.

As my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) set out, remainers question why we are accepting so many rules while forfeiting the right to sit at the table where they are decided. I know that many of my colleagues who campaigned strongly to leave are equally unhappy and believe, with some merit, that people who voted leave in the referendum are simply not getting the kind of Brexit they feel would give our country the clean break it needs if it is going to be successful.

I spent a long time in business before I came to this place, and I know that if a strategy is to be successful, it needs to be clearcut and one that everyone can get behind. I may not agree with some of my colleagues about what the best strategy is, and I may not want to leave on WTO rules, but in the context of the White Paper it is important for us to listen to colleagues who are respected on this issue—perhaps none more so than my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). Of course, he has been at the forefront of this deal’s development for the past two years, alongside my hon. Friend the Member for Wycombe (Mr Baker), whom I think we would all describe as ever-resourceful. Both took principled decisions to leave the Government, and I respect that. I know from my own circumstances that such decisions are not easy, but I also fully understand why they took them.

There might, in practice, be three practical options for our country’s way forward, but I believe that, in reality, there are only two clear strategies, and therefore only two paths to take if we are to achieve a successful Britain in the long term. Of course, both paths have pros and cons, and although there are passionate views on both sides, it is important that we debate these, as far as possible, in a measured way.

But the Prime Minister has now presented us with a third way—a compromise between the other two pathways. I understand the Government’s desire to achieve compromise, but I genuinely believe that the White Paper demonstrates that, in reality, our choice is between either one approach or the other. It is vital that we have a realistic, clearcut strategy that can actually be delivered. If we have a plan that we cannot deliver, it is not a plan. Regrettably, the White Paper attempts to ride two horses, and that never works.

It is on that basis that I have said that this deal is the worst of all worlds, and in the end it will please no one. It is probably the worst outcome we can get. It keeps nobody happy at all. Whether one accepts my arguments or those of my right hon. Friend the Member for Witham (Priti Patel), for example, both paths have pros and cons, but both represent clear routes forward that are genuine strategies for our country.

My concern is that this place has reached stalemate. As this debate exemplifies, there are still deep divisions in people’s views, and I think we understand why. My view now is that, because of that stalemate, it is time for the British public to have the final say on the clear approaches we face on Brexit. We absolutely must settle this now if we are to move beyond Brexit and get on to the vital issues facing our country such as housing, a lack of social mobility and social care. That is what we should be aiming to do. I do not believe that we should have a compromise that simply has to be reopened and renegotiated later. I have reached my conclusion on the Chequers deal, and I know that colleagues will look more closely at it in the coming days. I leave Members to think on these words:

“Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both directions.”

Oral Answers to Questions

Matt Western Excerpts

Tuesday 3rd July 2018 Commons Chamber

[John Glen]

I am very sorry but I do not recognise the hon. Gentleman’s characterisation of the Government’s intentions. We have actually rolled out a comprehensive strategy across the country in terms of the northern powerhouse and the midlands engine with the systematic devolution of decision making and resources to enable growth throughout the country.

[Matt Western (Warwick and Leamington) (Lab)]

14. What assessment his Department has made of the effect on economic growth of levels of (a) car sales and (b) investment in the car industry.

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

The automotive sector is an extremely valuable part of the UK economy and we have worked very closely with it in recent years. We have established the first automotive sector deal, and we have backed research and development projects, such as the advanced propulsion centre, with £300 million of investment. Through the future of mobility grand challenge and a succession of Budget measures, we are supporting the development of and transition to low emission and autonomous vehicles.

[Matt Western]

The Chancellor will be well aware of the importance of car sales and manufacturer investment as indicators of economic output and business confidence respectively. In the year to May, car sales were down 7% and truck sales were down 6%. Investment by vehicle manufacturers fell by 55% in 2017 versus 2015, and by 47% in 2018 versus 2017 for the first quarter of the year, so it is on track to be down 75% from three years ago. Does the Chancellor accept that these figures are the reality behind the Foreign Secretary’s assertion—I think this was the phrase—“fudge business”?

[Robert Jenrick]

As I have just described, the automotive sector is extremely important, and few of its businesses are more important than Jaguar Land Rover, which I appreciate is close to the hon. Gentleman’s constituency. Car sales in 2017 were actually 25% higher than in 2010 and the UK remains the second biggest car market in Europe after Germany, so there is a great deal to celebrate in the UK automotive sector, and we will continue to support it.

Customs and Borders

Matt Western Excerpts

Thursday 26th April 2018 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

I thank my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) for securing the debate. This is clearly not an abstract debate; it is extremely serious, given the impact that this policy will have on us.

The question of the customs union is important because it strikes at the heart of our trade policy, our business exports and imports, and the strength of the UK economy. The prospect of our not being part of a customs union poses, I believe, an existential threat to the UK car industry, and therefore to the wider UK economy. What businesses in that industry and those more generally are calling for is certainty, clarity and, of course, urgency. Their representatives—the CBI, the Institute of Directors and the Federation of Small Businesses—are doing the same.

We know that many businesses have complex supply chains and production processes that are integrated across Europe, with parts and assembly travelling back and forth across the continent. Frictionless trade is essential to those operations, and a customs union helps to facilitate that. We also know that increased customs checks could lead to delays. We have heard about—we saw them for ourselves—the eight-minute delays on the US-Canada border. We have heard about delays of up to 15 minutes at the Norway-Sweden border and the additional costs that are incurred. We know about the infrastructure—the huge X-ray machines that check every few vehicles to confirm their contents—and, of course, we know that Northern Ireland relies on a frictionless border for the continuation of peace. The symbolism of a manned or marked border between Northern Ireland and the Republic puts at risk the peace secured by the Good Friday agreement. For all those reasons, it is vital that we remain in the customs union.

As the Member of Parliament for Warwick and Leamington, which is at the heart of the car industry, I cannot stress enough how critical this issue of the customs union is, and how costly our departure from it will be for the sector. Some 79% of all components used in the UK car industry come from Europe or other countries abroad. If WTO rules are applied, there will be an incremental cost of £1.8 billion for our exports and £2.7 billion for our imports. It is no wonder that the Japanese invested in the UK in the 1980s. That happened because we were part of the customs union, and we very much welcome their investment here.

I believe that we can remain part of the customs union at the same time as increasing our trade with and exports to markets outside Europe. That is what we should plan to do, and that is why I support the motion.

[Mr Speaker]

Order. The winding-up speeches of up to eight minutes each will begin now.

Spring Statement

Matt Western Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

It did. My hon. Friend is right. It is precisely because we have seen the devastating impact of being unprepared for a serious economic downturn following a financial crash that we are determined to ensure that the UK economy is robustly prepared for the next normal cyclical downturn, whenever it occurs. Such things are normal, they happen in everyday economic life, and we must be able to ride through them without damage to our economy and without the poorest in our society paying the price. The poorest always pay when Labour’s model fails.

[Matt Western (Warwick and Leamington) (Lab)]

Following the global financial crash, the American Recovery and Reinvestment Act 2009, introduced by Obama, saw $800 billion of investment pumped into the US economy, leading to the most sustained period of growth. By contrast, the UK embarked on a sustained period of austerity, and UK growth is now half that of the US and the eurozone. Which was the right ideological choice?

[Mr Hammond]

The United States is in a different position from the United Kingdom. Sadly, we no longer operate the world’s reserve currency and are no longer able to borrow under the same conditions as the United States. Decisions on the United States economy are for the United States Administration. This Government have made the right decisions for the UK economy, and the benefit of those decisions—the outcomes that we are now beginning to see—demonstrates the case for them.

Finance (No. 2) Bill

Matt Western Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 21st February 2018 Commons Chamber

[Mel Stride]

Perhaps we can get into the nitty-gritty of this offline.

The average revenue from the bank levy between its introduction in 2011 and 2015-16 was around £2.6 billion. As a result of this package, however, yield from the surcharge and the levy in 2022-23 is forecast to be £3.2 billion. By 2023, as I have said, we will have raised around £44 billion in additional bank taxes since the 2010 election.

Opposition Members have also suggested that our bank levy is set at a low level compared with other countries. In fact, not all financial centres have a bank levy. The USA, for example, chose not to introduce one at all, and while several EU countries introduced bank levies following the financial crisis, it is not possible to make direct comparisons between these levies as the rules for each are different.

We have heard the argument this afternoon that we should reintroduce a tax on bankers’ pay. One of the aims of the changes to bank taxation announced in 2015 and 2016 is to ensure a sustainable long-term basis for taxing banks, based on taxing bank profits and the bank levy. By contrast, the bank payroll tax referred to in new clause 3 was always intended as a one-off tax. Reintroducing it would be ineffective and unsustainable compared with the package of banking tax measures that we have introduced. Even the last Labour Chancellor pointed out that it could not be repeated without significant tax avoidance.

Opposition Members also propose that HMRC should publish a register of tax paid by individual banks under the levy. Taxpayer confidentiality is rightly a core principle for trust in our tax system and HMRC does not publish details of the amount of tax paid by any individual business. While the Government continue to consider measures to support transparency over businesses’ tax affairs, we must balance that with maintaining taxpayer confidentiality in order to maintain public confidence in our tax system.

[Matt Western (Warwick and Leamington) (Lab)]

Does the Minister accept that the transparency that is being sought is down to the public, demanding it? After all these years of difficulty, and at a time when so many communities face council tax increases of 5%, there seems to be an inherent unfairness in the tax system.

[Mel Stride]

I just do not accept that. This goes back to my point about the balance of measures that we are taking. The Opposition are understandably focusing on the bank levy, which is indeed declining over time, but I point to the additional 8% surcharge, which is 8% more on corporation tax than other non-banking businesses are expected to pay. As I have said, the banks are also not permitted to carry forward interest rate charges to the same degree as other businesses, and they are not allowed to offset against tax the compensation payments that they have been making. All those things add up to additional tax and by 2023 will have raised an extra £44 billion since 2010 compared with what would have been raised from non-banking businesses.

[Matt Western]

At the same time as corporation tax is being reduced overall—I accept the point about the bank surcharge—does the Minister not accept that we are seeing a significant increase in council tax for the public?

[Mel Stride]

As my hon. Friend the Member for Croydon South (Chris Philp) pointed out, as we have reduced the overall level of corporation tax from 28% to 19%—corporation tax, of course, applies to banks as it does to non-banking businesses—we have seen the tax take increase by some 50%. We have actually been raising more revenue as a consequence of those changes.

Finally, new clause 5 would require the Government to publish further analysis of the impact of the Bill’s bank levy re-scope. The Government have already published a detailed tax information and impact note on the proposed changes, and we have published information, certified by the OBR, on the overall Exchequer impact of the 2015 package of measures for banks. It is important to legislate for such changes now in order to give UK banks certainty on their tax position so that they can plan effectively for the future.

The changes in clause 33 and schedule 9 complete a package of measures that raises additional revenue from banks in a way that delivers a tax regime that is more sustainable, more aligned with regulation and more supportive of the competitiveness of UK financial services. We should pass them without amendment.

In her amendments, the hon. Member for Walthamstow (Stella Creasy) calls for a windfall tax on private finance initiative companies. I pay tribute to my hon. Friend the Member for Stevenage (Stephen McPartland), who outlined his vigorous work in this area in support of his constituents.

There are approximately 700 operational projects that originated under the initial PFI, representing £60 billion in capital investment. The vast majority of those projects were signed between 1997 and the 2010—620, or 86%, of all PFI projects in the UK were signed under the last Labour Government.

This Government have taken action to ensure that PFI contracts deliver better value for money for the taxpayer. That is why in 2011 we introduced the operational public-private partnership efficiency programme, which has reported £2 billion of savings. Even where it is not possible to find savings in a project, we are working with Departments and procuring authorities to improve day-to-day effectiveness and management of contracts. We have also made improvements through PF2 to offer taxpayers better value for money on new projects.

The hon. Member for Walthamstow argues that a windfall tax on what she sees as the excess profits of PFI companies would help to fund public services; I am clear that it would not. A retrospective windfall tax would instead do damage to any private investment in public services and would tax local authorities and NHS trusts rather than the providers it is intended to target. Even aside from those flaws, her amendments would not work as she intends, and I will set out why in more detail.

First, a windfall tax would cost this and future Governments who try to sign contracts with businesses, whether in PFI or in another area. This country has a hard-won reputation for tax certainty, and that important principle would be undermined by a retrospective tax targeting businesses that have legitimately entered into a contract with the Government. There would be extra cost for the taxpayer whenever the Government next needed to engage the private sector.

Secondly, as the hon. Lady knows, PFI contracts—she said that she has read many—are long-term agreements that typically include anti-discriminatory clauses. This means that when legislation is passed that targets PFI companies without applying to similar projects undertaken by other companies, the tax owed can be recovered from the procuring authorities. A windfall tax would therefore only be a tax on local authorities, NHS trusts and Government Departments that hold such contracts, which I am sure is not the outcome she seeks.

Amendments 1 and 2 propose that the bank levy could be extended to PFI groups, but PFI groups are not banks. Instead, they borrow money to finance projects and earn a return on them, in exactly the same way that many other businesses do. It is simply not possible to bring PFI groups within the scope of the bank levy. Most of the design of the tax could not be applied to such groups.

The changes proposed by amendments 3 and 4 also would not work as a windfall tax. The last Finance Act introduced corporate interest restriction rules to limit the amount of interest expense that a corporate group can deduct against its taxable profits. The amendments propose modifying those rules by limiting the ability of corporate groups to carry forward and offset their unused interest allowance against future profits. The limitation would apply only where the group contains a PFI company that has previously made profits that are deemed to be “excessive,” by reference to a statutory test. The changes proposed in the amendments are convoluted. As I have said, it would fall to the public bodies holding the PFI contracts to pay the extra tax resulting from these changes. But even if one could impose additional tax liabilities on PFI providers, this would not be a sensible way to proceed. It would be unlikely to change the tax paid by the PFI company, but would instead sometimes penalise other companies in the same corporate group. More likely, groups would simply restructure to avoid the tax.

Trade Bill (Third sitting)

Matt Western Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 25th January 2018 Public Bill Committees

[Iain Stewart]

Q I would like to get a sense from the witnesses of what the impact would be on the food and drinks sector, particularly in Scotland, if this Bill did not happen and we left the EU without the carry-over of the existing EU free trade agreements. Have you quantified the value of transferring over what we already have into our domestic legislation?

Sarah Dickson: For us, 10% of our exports go to those countries and benefit from them. I cannot give you an overall figure, but obviously, if you are not paying the tariff, you are not paying the tariff and you do not have that cost. It would make a difference to about 10% of our exports, and our exports were £4 billion in 2016.

Elspeth Macdonald: I do not have figures in front of me, but I think the document the Scottish Government published recently, “Scotland’s Place in Europe”, about business, jobs and the economy, touched on exactly those issues and put some economic analysis around some of that in terms of trade.

Gary Stephenson: All I can say is that I think about 37% of exports of food from Scotland are to non-EU countries, but we have not quantified exactly what the impact would be and how much of that is going to countries with a free trade agreement. I cannot give an exact answer, but it will have an impact.

[Matt Western (Warwick and Leamington) (Lab)]

Q My question relates to non-tariff measures, which you have all spoken about in varying ways; of course there are food standards, phytosanitary standards and so on. What level of consultation do you think is appropriate for the Government to carry out with the sectors affected, prior to any negotiation on those provisions?

Gary Stephenson: There has to be deep consultation. The people with the expertise are the ones shipping the products, so they need to be consulted in detail on those provisions, which are very specific. You mentioned phytosanitary; obviously seed potatoes are a big product for Scotland, and they are highly dependent on phytosanitary requirements.

[Matt Western]

Potatoes are?

Gary Stephenson: Yes.

Sarah Dickson: Our experience is that we are often the ones working with the EU to draft the provisions on whatever it might be—labelling, or other requirements that would be needed for a mutual recognition—so we currently work closely with the EU negotiators to provide them with the advice and support that they need.

Elspeth Macdonald: There is a more fundamental issue from my perspective. There are specific exemptions from reservation through the Scotland Act that make it a devolved function for technical standards to be set in relation to food. There is a fundamental question above: it is about not just the Government, but Governments having those discussions with businesses.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Q I have a two-part question, if that is okay, Chair. Gary, coming back to tariff-rate quotas, you suggested that different sectors should be able to have input. Do you have any concerns about devolved Administrations and their need for input, and about how, even if tariff-rate quotas are agreed via subdivision, those quotas will be allocated to the different nations in the UK?

Gary Stephenson: I think it is critical, particularly looking at some sectors, that the devolved Governments consult with sectors, and that there is a unified approach. This is too important to get parochial about. It is an important issue for the whole UK, but there is a higher impact in some sectors, particularly in Scotland and Wales; I am thinking of hill farming products and that type of thing.

--- Later in debate ---

[Alan Brown]

Does anyone else want to add to that?

Jonathan Hindle: The furniture industry has a similar exposure to migrant workers. We have a high degree of Polish migrant workers in the industry, particularly with sewing and upholstery skills. The unknown quantities about all of this have meant that some of them are leaving, so there is concern in the industry to provide some clarity, once again, about how we would deal with migrant issues for industry.

Gordon MacIntyre-Kemp: Again, some of our members have expressed concerns. In particular, highland hotels are saying that 65% to 70% of their staff during the summer are EU nationals and so on. There are significant issues in Scotland. I think that this shows, in terms of the overall remain vote, that immigration is seen radically differently in Scotland in terms of an opportunity to engineer the age of our society and bring skills to Scotland.

[Matt Western]

Q I have a quick question for Mr MacIntyre-Kemp. The very first line of the Bill says that the Bill is to

“Make provision about the implementation of international trade agreements”.

To elaborate on the point you were making earlier, what do you understand that to mean?

Gordon MacIntyre-Kemp: What do I understand the “international trade agreements” to be?

[Matt Western]

Q Yes. Do you think that is exclusive or—

Gordon MacIntyre-Kemp: Sorry. What do I understand “international trade agreements” to mean? They are basically agreements between countries that facilitate trade, such as TTIP and CETA and so on, and they have significant impacts on the different sectors, in terms of what sectors are opened up to particular trade deals. Now, regarding the EU, it already has trade deals with South Korea, Canada and so on. I think that is kind of basic.

However, there could be difficulties if there is not an exact definition in the Bill of what a trade deal is; I refer to evidence from legal experts on this issue, as well. It could mean that deals that are not specifically seen as trade deals can come under the remit of the Bill.

[Matt Western]

Q Right. So you see this as being fairly open? I think that is what you are saying.

Gordon MacIntyre-Kemp: More open than it possibly should be; not as restrictive as it—

[Matt Western]

It could be open?

Gordon MacIntyre-Kemp: Yes. It could be seen that way. I am just asking for it to be tightened up a little bit.

[Matt Western]

Q I have a question for Mr Hindle, just in relation to the British Furniture Confederation. I want to explore rules of origin and the complexity of supply chains. I have a particular manufacturer in my area; I know that a lot of its components come from Europe and a lot come from the UK. I just want to explore something. If our European content is no longer under the same rule of origin, what impact do you think that will have on future trading relationships for these companies or for us in markets other than Europe?

Jonathan Hindle: Fairly limited, inasmuch as when most people look for certificates of origin in tendering processes and evidence of supply chain in that regard, they ask for either an EU reference or a UK reference. If we were to devolve to a UK reference as a source of origin, it would carry equal weight in the minds of those in the particular markets that I am familiar with who often require that evidence.

Regarding the quantities coming out of the EU versus the UK, normally we are asked to make a judgment on a split and err towards the country of origin being where the majority of the material originates or where the bulk of the manufacture occurs. There are some guidelines that we tend to follow, along those lines. I am not hearing any concerns from our industry that that will present any problems. We continue to adhere to the current remit for declaring origin.

[Matt Western]

Q So you do not think that if, say, there was 60% of material from Germany or Scandinavian countries going into the components of British manufactured furniture, that would be an issue for your members?

Jonathan Hindle: Offhand, I cannot see it impacting the ability to trade effectively, or our competitiveness, or how we are perceived in any way; no, I cannot see that and I am not getting anything from our industry, as we poll it, to suggest any specific concerns on that particular point.

Of course, we have all the problems that we have had with a weak currency and all the inflationary impact that that has had, because most of our industry relies for a large part of its materials on continental Europe and elsewhere in the world. Weak sterling has had an impact and countered, if you like, the benefits that we might otherwise have enjoyed as an exporter from having a weaker currency on the other hand. It has been a double-edged sword in that regard.

[Matt Western]

Q Finally, would you very much like your sector to be involved in any TRA?

Jonathan Hindle: Very much so, yes. We would certainly welcome having someone on that TRA that understands our sector and all the nuances and complexities that have been alluded to—absolutely.

[Barry Gardiner]

Q Very briefly, Mr MacIntyre-Kemp, I understood your example about chlorinated chicken not to be because you did not realise that this Bill was not about doing a trade deal with America, but to be talking about the need for the devolved Administrations to be involved in determining what are in those trade agreements, because of the way in which they may impact upon the implementation of what are devolved competencies. Do you believe—and do you believe that it is the Scottish Government’s position—that there should not only be consultation but consent at that level for the trade agreements before they are implemented?

Gordon MacIntyre-Kemp: Yes, exactly, and as food safety is a devolved issue in Scotland—