Trade Bill (Third sitting)

Mike Wood Excerpts

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

[The Chair]

I remind everyone that we have until 1 o’clock at the latest for this session.

[Mike Wood (Dudley South) (Con)]

I declare an interest as a vice-chair of the all-party parliamentary furniture industry group, for which the British Furniture Confederation provides the secretariat.

[The Chair]

Thank you. Would the witnesses introduce themselves for the record, starting from our left?

David Scott: I am David Scott, senior director of Tepnel Pharma Services.

Jonathan Hindle: I am Jonathan Hindle, chairman of the British Furniture Confederation—coming from the industry.

Gordon MacIntyre-Kemp: I am Gordon MacIntyre-Kemp, chief executive of Business for Scotland.

--- Later in debate ---

[Faisal Rashid]

Q Are you aware of any consultation system in any other country that we can adopt as a starting point?

Gordon MacIntyre-Kemp: I am not an expert on other nations. For almost all my life, we have been in the EU. We did not need to study what other people did. We are just making it hard for ourselves now.

[Mike Wood]

Q Mr MacIntyre-Kemp, you spoke about your concern that the Bill is not clear on the Government’s powers to conclude trade deals, and you talked about chlorinated chicken from the United States. I just want to check that you understand that the Bill is perfectly clear that it would not give any powers to the Government to conclude any trade deal with the United States, regardless of whether it included any type of chicken.

Gordon MacIntyre-Kemp: You are talking specifically about it not allowing anyone to do a deal to do with chicken, but I was using that as an example to point out that the actual wording of the Bill seems to allow a significant amount of power in one particular place and to not have sufficient levels of consultation. Basically, afterwards, it would indeed be applicable across many different sectors, food being one of them.

[Mike Wood]

Q Just to go back to my point, it does not allow any type of deal containing anything for the United States.

Gordon MacIntyre-Kemp: In my opinion, what it allows is too free a hand post-Brexit to do deals without the right level of consultation. Sorry if that has not been clear, but I have said it four or five times.

[Mike Wood]

Q I do not know whether I am not making this clear. You seem not to be quite answering the question. You do understand that this Bill covers only those countries with which the European Union currently has a trade deal, which does not include the United States? There is nothing in the Bill that would give the Government any powers to conclude any trade deal with the United States.

Gordon MacIntyre-Kemp: Right. I understand what you mean now.

[Alan Brown]

Q I have a question for David. Looking forward, as well as establishing the trade agreements that the Bill is meant to carry over, am I correct in thinking that your industry has an understanding of the licensing arrangements that will be put in place with the EU, and the research and access to labour issues that need to progress as well to give the industry an overall view?

David Scott: Absolutely. I would refer you to the Industry Leadership Group position paper written by Dave Tudor, the chair of the Industry Leadership Group for Life Sciences Scotland. There are four key points. One is regulation, which we have talked about already: maintenance of regulation on a harmonised basis. There is trade and supply, which we are obviously talking about today. Access to talent is a key thing. In Scotland, we are a diverse community. Research and development are best done using a diverse set of people, so that freedom of movement and the ability to attract people not just into Scotland but into the UK is fundamental for us. That is not to downplay our abilities, but a mix of different people helps us bring the best ideas to the table.

Again, from a Scottish point of view, we have a heritage of innovation in the medical sciences that we are very proud of, and we want to continue to use our talent base and other talent to help us achieve that.

Business of the House

Mike Wood Excerpts

Thursday 11th January 2018 Commons Chamber

[Mike Wood (Dudley South) (Con)]

The Leader of the House is attending to Privy Council business in Sandringham, but the residents of Sandringham Place in Wordsley have had to put up with derelict shops falling into rack and ruin over many years. Can we have a debate in Government time on the power of local authorities to deal with derelict buildings and to bring them back into use, whether as shops, commercial or housing?

[Paul Maynard]

I can only applaud my hon. Friend’s dexterity in making his point. I know from experience that it often takes a long time for local councils to get details of the ownership of vacant houses, so he is right to raise the issue. I urge him to apply for a Westminster Hall debate to fully air the issue with Ministers.

Taxation: Beer and Pubs

Mike Wood Excerpts

Tuesday 31st October 2017 Westminster Hall

[Mike Wood (Dudley South) (Con)]

I beg to move,

That this House has considered taxation of the beer and pubs sector.

It is a pleasure to serve under your chairmanship, Mr Owen, for what I think is the first time and particularly for this important debate on taxation of the beer and pubs sector. It takes place just three weeks before crucial decisions are made in next month’s Budget. It was pointed out to me this morning that seven years ago an Adjournment debate on this subject was initiated by my constituency neighbour, my right hon. Friend the Member for South Staffordshire (Gavin Williamson). I only hope that my hon. Friend the Exchequer Secretary to the Treasury is as keen to please the Government Chief Whip as I clearly am in repeating his initiative today.

This debate is taking place on Halloween, and pubs up and down the country are decorated with a wide range of ghouls, monsters, skeletons and witches. However, the scariest prospect for our pubs and brewers is surely that they could face a second duty rise this year after next month’s Budget and enormous rises in business rate bills over this revaluation period. I hope to set out, in the short time available to me, why the Minister should avoid that course of action.

In the UK, 30 million adults drink beer each year and 15 million of us visit the pub each week. Representing the Black country, the spiritual home of British brewing, and as chairman of the all-party parliamentary beer group, the largest Back-Bench group in the House, I know how important this issue is for so many of our constituents.

If the midlands is the engine of the British economy, beer is surely the fuel that helps to power that engine, and like all fuel, it needs to be well looked after. My Dudley South constituency is home to four brewers—Bathams, Black Country Ales, Ma Pardoes and the Pig Iron brewery—and no fewer than 75 pubs. The beer and pub sector is vital to our country. Nearly 1 million people across the UK rely on the industry for work. About 46% of them are young people under the age of 25, and just over half are women.

[Chris Green (Bolton West) (Con)]

Does my hon. Friend agree that having a healthy pub environment will do two things, namely promote healthy drinking and help to revitalise our high streets?

[Mike Wood]

Absolutely, and I will come on to the specific role of pubs later. Supporting the pub trade has a more direct economic role in helping further to reduce youth unemployment and the number of young people not in education, employment or training.

[Gloria De Piero (Ashfield) (Lab)]

I thank the hon. Gentleman for securing this important debate. May I place on the record my praise for the many microbreweries that have opened in Ashfield? They have totally transformed the high streets in my constituency. Does he agree that the tax break introduced for smaller breweries by the last Labour Government should remain intact to ensure that they continue to prosper?

--- Later in debate ---

[Mike Wood]

Partly because of the small breweries’ relief scheme, we now have a greater variety and, I would argue, greater quality of beer than we have had in the past. It is important that smaller brewers enjoy support that reflects the higher marginal cost of brewing on that scale. However, we also need to look at whether the relief scheme as currently framed is preventing brewers from expanding, or even causing some to scale down.

[Graham Stringer (Blackley and Broughton) (Lab)]

rose—

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

rose—

[Mike Wood]

I will give way just one last time and then I must make some progress.

[Mr Cunningham]

In the last Parliament, there was a Bill on this subject; I think that a Liberal Democrat introduced it. Certainly the landlords of Coventry’s pubs are voicing a lot of concern about this matter. There is a big effect on pubs—many are now closing—but also a big effect on high streets. Coventry has universities, and sometimes the students have jobs in the pubs, so they subsidise their—

[Albert Owen (in the Chair)]

Order. I call Mike Wood.

[Mike Wood]

The hon. Member for Coventry South (Mr Cunningham) of course makes an important and valid point in talking about the role not only of students but of young people more widely in employment, because the pub sector can generate an extremely fulfilling and constructive career for many that goes much wider than the stereotypical picture of students working in a pub until they are in full-time work.

[Graham Stringer]

Will the hon. Gentleman give way?

[Mike Wood]

I must continue because a lot of colleagues are waiting to get in.

The beer industry is a true success story for home-grown British manufacturing. A staggering 82% of all beer consumed in this country is made in the UK. The UK now has more than 2,000 breweries, producing 25 million barrels of beer a year. With 923 million pints exported to 110 different countries, beer is the third largest food and drink export sector in the UK and it is worth £550 million to the UK economy. In my constituency alone, the sector accounts for 1,156 jobs, of which 313 are held by under-25s. It also contributes more than £37 million to our local economy.

[Helen Whately (Faversham and Mid Kent) (Con)]

I congratulate my hon. Friend on securing the debate. Shepherd Neame, the pub and brewing company, is the largest employer in my constituency, so let me support the case he is making. Given the importance of these companies as employers, and the role of pubs in our villages, we must have a tax regime that supports this part of the economy.

[Mike Wood]

I thank my hon. Friend, who represents our oldest brewery. It is important that we support established breweries as well as more recent entries into the market. The beer and pub sector adds more than £23 billion to the UK economy, and I know that the Minister will be very grateful for the £13 billion of taxes that it contributes to the Treasury.

There has been a suggestion that duty changes have little or no impact on beer sales in pubs. That is simply not true and is not consistent with the available evidence. The last Labour Government introduced the hated beer duty escalator in 2008. It was hated because the escalator saw beer duty increase by a staggering 42%, hitting beer sales, making pints less affordable and closing pubs at a faster rate than ever. Beer sales have been falling for many years. However, we saw that trend accelerate sharply under the escalator. In the six years before the duty escalator, on-trade beer sales fell by about 3% a year. During the escalator years, on-trade sales fell by more than a quarter, which was about 5.4% a year on average. Almost 7,000 pubs called time for good, and more than 58,000 beer-dependent jobs were lost. However, although beer duty increased by 42%, beer duty revenues rose by only 12%. It was a very expensive failure of a policy and one that I hope the Labour party has put firmly in the past.

Beer duty is now 20% lower than it would have been with tax rises previously planned under the escalator. In the years between 2013 and 2016, when duty was cut or frozen, the annual decline in on-trade beer sales was not 5.4%, but 2%, which year on year makes a significant difference to the number of jobs and the size of the industry. However, the return to a retail prices index-linked rise in this March’s Budget was disappointing. Announcing a second duty rise in the same calendar year would in effect take us back to the days of the beer duty escalator through the back door.

As the price difference between sales in pubs and supermarkets has widened, consumers have become increasingly price sensitive, especially pub-goers. A respected consultancy, Oxford Economics, which has consistently and accurately forecast the impact of duty changes in recent years, calculates that even a freeze in beer duty in next month’s Budget, rather than the planned increase, would boost pub sales by about 33 million pints per year against the current baseline and that that would mean more than 2,000 additional jobs.

The Exchequer Secretary will remember the front-page headlines praising the previous Chancellor for cutting beer duty. I cannot promise the Exchequer Secretary the front page of the Evening Standard—maybe he knows a man who can—but I have no doubt that if the current Chancellor freezes beer duty, the whole Treasury team would be carried shoulder high across Whitehall.

The financial benefits of the beer and brewing industry are clear, but just as great is the social impact of pubs and the detrimental effect that pub closures have on the fabric of our society, because pubs are a great addition to the social make-up of our country, at the heart of our local communities. They offer a safe environment in which drinking can be supervised and highly regulated, which is in stark contrast to much street drinking.

[Damien Moore (Southport) (Con)]

Does my hon. Friend agree that at a time when we are becoming more digitised and people are spending more time alone, the social interaction that pubs create is really important, particularly when loneliness is a major problem, not just for older people, but for younger people as well?

[Mike Wood]

My hon. Friend goes right to the heart of this issue. Friends are made and communities come together in pubs. Research at Oxford University by Professor Robin Dunbar concluded that pubs play exactly that kind of vital role in tackling social isolation and contributing to wellbeing. People with a local are likely to be better off financially, physically and socially. They are likely to have a wider circle of friends. In a week when researchers have shown again the clear link between strength of social networks and resilience to conditions such as dementia, the social value to which my hon. Friend refers could not be more important.

People who drink in moderation in a pub are more likely to be healthier and register higher levels of happiness than people who do not drink at all. They are also likely to be better fed, with almost 1 billion pub meals sold annually.

We should not forget that pubs play a key role in tourism, being one of the attractions that tourists most want to visit when they are in the UK. Last year there were 600 million day visits to pubs by tourists, and more than half of all holiday visits to Britain included at least one visit to a pub.

[Giles Watling (Clacton) (Con)]

Does my hon. Friend agree that it is a terrible shame that we lost some 10,000 pubs between 2003 and 2013, ripping the hearts out of many of our villages and communities? Does he also agree that pubs represent part of our British way of life that other people come here to see?

[Mike Wood]

Absolutely. That is as true in our towns as it is in our villages. About 80% of pubs are community or rural pubs. They bring not just jobs, but a community focus, often in areas of the country where other traditional providers of jobs and community coming-togetherness might have been lost.

[Graham Stringer (Blackley and Broughton) (Lab)]

The hon. Gentleman makes a profound point about the importance of pubs to rural villages, but does he agree that pubs in inner-city areas are just as important to the local community? There has been a migration of licences from inner-city areas into city centres, which has denuded our inner cities of many of the benefits of public houses.

[Mike Wood]

The hon. Gentleman is absolutely right. It is particularly troubling that those pubs that close in our towns and city centres are often housed in large buildings that are very difficult to fill and that remain as decaying monuments to the changing nature of consumer behaviour.

[Stephanie Peacock (Barnsley East) (Lab)]

Pubs and breweries in Barnsley East contribute more than £12 million to the local economy, but on the particular issue of pub closures, does the hon. Gentleman agree that we need to consider updating the compulsory purchase powers and the planning system, which would give more powers to local communities?

[Mike Wood]

I think that is exactly what the Government have done over the past 12 months in changing the rules on permitted development in particular. Obviously, now we have to go through planning processes before pubs can be converted.

The licensees and customers at many of our pubs contribute in both a financial and practical manner to their communities, by funding and running sporting and other activities, such as football, darts, dominoes and cribbage, but also through community activities, a large number of which are run through our pubs. Of course, because pub customers are extremely generous people, initiatives such as PubAid are able to generate about £100 million each and every year for good causes in communities in all of our constituencies.

For all these pubs to flourish and remain at the beating heart of their communities, they need a transfusion of investment and custom that will come with a freeze in beer duty and a reduction in their business rate burden. I have set out why our beer and pub industry is so important economically and socially, but it faces the twin threats that I referred to earlier: the increases in business rates and in beer duty. The three duty cuts, last year’s freeze and the ending of the escalator secured about 20,000 jobs, boosted confidence in our brewing and pub businesses and meant that more beer was sold than would otherwise have been the case, boosting the Treasury’s total tax take, if we include both direct and indirect taxation. On business rates, the Chancellor has already recognised the pain caused to pubs by the disproportionate burden caused by valuation based on turnover; about half of that turnover may be beer duty and VAT that the pub is collecting on behalf of the Government.

The £1,000 pub relief announced in the March Budget is extremely welcome, particularly for smaller and medium-sized pubs. However, it is particularly important that that relief is now expanded and extended, because our pub sector pays nearly 3% of all business rates despite making up just under 0.5% of business turnover. It is hugely, disproportionately overtaxed through business rates.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

Does the hon. Gentleman agree that it is ludicrous that pubs in Stoke-on-Trent pay more in business rates—in fact, more in total—to the Exchequer than Amazon does in its entirety? Stoke is paying more than Amazon.

[Mike Wood]

I could not agree more. The revaluation of business rates was often seen as an issue that affected only businesses in London or the south-east. As for everyone else, it was thought that some gained and some lost out, but that is completely untrue when it comes to pubs, which have experienced huge increases in every part of the country. The 27 pubs run by Black Country Ales across the west midlands and neighbouring counties will have experienced an increase in their rateable value of, on average, 40% by the time the transitional period is over.

[Anne Marie Morris (Newton Abbot) (Ind)]

My hon. Friend makes a very good point. A pub in my constituency has seen its rates go up 83%. Does he agree that it is completely inappropriate for pubs to be measured by turnover? They get measured on their actual turnover, not the perceived turnover for the square footage, so there is no fair comparison with the way in which rates are levied and measured in other industries in our country.

[Mike Wood]

That is right. As well as a large part of that turnover being just business tax, it is a huge disincentive to invest in and improve the property.

We supported the Chancellor when he suggested he would look at business rates in the light of the increase in online businesses and the harm that could cause our beloved high streets. The message that has come from Members on both sides of the House is that the sooner that can be done, the better. We want to ensure that our community pubs, high street pubs and village pubs are properly considered when any new system is put together, so that we can all get together to protect the great British pub.

I applaud the Government’s work in reducing the deficit, and the measures that the Exchequer Secretary and his colleagues are taking to reinvigorate the economy, but I ask him to urge the Chancellor to go further. Hard-pressed UK beer drinkers still pay 40% of all Europe’s beer duty, despite drinking only 12% of the beer consumed in Europe. Some colleagues may think that means we need to drink more beer to keep up, but let us just focus on the duty. As a Yorkshire MP, the Exchequer Secretary will know that the Black Sheep brewery employs more than 100 people in the Yorkshire dales, but he might not know that it pays more in beer duty each year than it does on the combined costs of employing those 100 staff, buying all the raw materials to produce its beer and then distributing it around the country. Beer duty that is more than four and a half times as high as eBay’s UK corporation tax liability seems an undue burden.

[Julie Cooper (Burnley) (Lab)]

Does the hon. Gentleman agree that it is unfair that in this country, compared with other EU nations, we drink 12% of all the beer consumed in the EU, but pay 40% of the duty across it?

[Mike Wood]

As I have indicated, I think that situation is not sustainable in even the medium term, and certainly not in the long term.

Britain’s growing ranks of brewers have much more growth potential, which would mean more investment and more jobs to underpin the economy. The Treasury needs to look at whether the way in which beer duty is structured is appropriate for the 21st century. In particular, there is a growing consensus in the industry that the small breweries’ relief scheme, which has done so much to allow new breweries and microbreweries to become established, is now preventing breweries from growing, and in some cases means that they are downsizing to receive the lower duty rates. I know that the Exchequer Secretary has already received representations on that issue.

To look further ahead, as we leave the European Union in 2019 there are also opportunities to consider whether it is appropriate that beer sold in pubs is taxed at the same duty rate as beer sold in supermarkets or other off-sales, and the role that a differential tax rate could play in supporting our pubs, helping keep more of them open, and the social benefits that come with that. The Treasury should also look at supporting reduced-strength beers by expanding the current bracket to cover beers between 1.2% and 3.5%, instead of just up to 2.8% as at present. I have written to the Exchequer Secretary on this subject. Britain has a strong tradition of brewing 3% to 3.5% beers, and if we can incentivise the industry to develop, produce and market beers at that end of the market, there will be an advantage to the industry and to our health. However, while all those areas for reform are important, none of them should distract us from the immediate need to freeze beer duty and tackle business rates in the Budget in three weeks’ time.

If the Exchequer Secretary is not already persuaded by the economic case against a further rise in beer duty, the social case for helping pubs and reducing their business rates, or the political case for doing something that is genuinely popular across the country, he might want to reflect on the personal-political benefits of backing beer. I have already mentioned that a previous proponent of this cause is now the Government Chief Whip. However, it might be even more pertinent for me to point out to the Exchequer Secretary that the three previous holders of his post who presided over recent cuts to beer duty—my right hon. Friends the Members for Bromsgrove (Sajid Javid), for Witham (Priti Patel) and for Loughborough (Nicky Morgan)—all went on to reach the giddy heights of Cabinet office. As a canny Yorkshireman, the Exchequer Secretary may want to reflect on the fact that cutting beer tax is clearly not a bad career move. In all seriousness, I ask him to do the right thing for the longer term: encourage the Chancellor to freeze beer duty in his autumn Budget, act on the disproportionate burden of business rates on pubs around the country, and invest in and support these great sectors, which do so much economically and socially in every part of Britain.

[Several hon. Members rose—]

--- Later in debate ---

[Mike Wood]

I thank the Minister for making a generally positive response and for the many meetings he has had with colleagues and industry groups over the past few weeks, and will have over the next few weeks. I thank the many industry groups that have contributed to support Members in this event: CAMRA, the British Beer and Pub Association, the Society of Independent Brewers, the Association of Licensed Multiple Retailers and the Small Brewer Duty Reform Coalition. I also thank the many hon. and right hon. Members—

[Albert Owen (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).

Public Sector Pay Cap

Mike Wood Excerpts

Wednesday 5th July 2017 Commons Chamber

[Elizabeth Truss]

My hon. Friend is right to draw attention to the macroeconomic picture, and to point out that if we do not have a confident deficit reduction plan such as the one that the Government have pursued for the last seven years, the financial markets will lose confidence, and the effect on working people will be a rise in interest rates, a rise in housing costs, and problems for the Government in respect of our borrowing.

[Mike Wood (Dudley South) (Con)]

I declare an interest: my wife is a primary school teacher who is currently working as a teaching assistant.

Will the Chief Secretary ensure that both the rising cost of living and recommendations of the independent pay review bodies are properly taken into consideration in the setting of public pay policy for next year’s settlements?

[Elizabeth Truss]

That is one of the factors that the pay review bodies consider, along with issues such as recruitment and retention and ensuring that the pay settlement is affordable. They have the responsibility of speaking to people like my hon. Friend’s wife who work in the public services, hearing what they have to say, and making a determination. There are different issues in different public services, and I think it wrong to suggest that there is a “one size fits all” solution.

Oral Answers to Questions

Mike Wood Excerpts

Tuesday 17th January 2017 Commons Chamber

[Simon Kirby]

The UK and US financial sectors have significantly increased their resilience since the crisis, and the PRA has the powers it needs to regulate overseas firms operating in the UK to ensure the stability of the UK financial system.

[Mike Wood (Dudley South) (Con)]

What steps are the Government taking to ensure that banks meet the 2019 deadline for separating retail banking from riskier investment banking activity?

[Simon Kirby]

That is well under way and we are keeping a close eye on it.

Christmas Adjournment

Mike Wood Excerpts

Tuesday 20th December 2016 Commons Chamber

[Mike Wood (Dudley South) (Con)]

It is a pleasure to follow so many distinguished speakers this afternoon. In particular, I would like to add my agreement to the arguments put forward by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) and my hon. and gallant Friend the Member for Beckenham (Bob Stewart) about the concern that some of our servicemen seem to be being treated more adversely than some suspected and, indeed, convicted terrorists. I hope those concerns are heard not only by the Government but by the devolved Administration in Northern Ireland.

One of the joys of our role as Members of Parliament is being able to work with so many community organisations that, all year round, do such valuable work for people who are often the most vulnerable in our society. During a public service and volunteering week I held earlier in the autumn, I had the pleasure of spending some time with a range of organisations, including Age UK, the Springboard Centre, Black Country Food Bank, the dementia unit and A&E volunteers at Russells Hall hospital and the West Midlands police.

At Christmas in particular we value the role of our community organisations, but they do such work all year round. It is very difficult to pick out any one individual example above any other but it would be remiss of me not to highlight Wordsley community centre in my constituency, led by the formidable Janet Blakeway, and its work to improve the centre’s accessibility. I recently launched its new stair lift, which had been made possible by Janet’s work to bring in local firms, CE Solutions and Handicare, to do the work for the local community, really transforming the services that are on offer.

The big society may have passed into political history as a buzzword, but the work that so many unheralded volunteers and community organisations do—every day of the week, every week of the year—continues regardless of passing fads in our political lexicon. Some argue that, in the selfish age in which we are supposed to live, people are no longer interested in working for a community, giving up their time or supporting good causes. That is certainly not my experience from the support for the Macmillan coffee morning or the community clean-ups we have held in Dudley South, which have been extremely well supported by the community. I hope that the Deputy Leader of the House will ensure that the Government continue to look at how they can make it easier for people to give up their time and for businesses to donate resources and skills to help the communities around them.

I am particularly pleased to see a growing number of friends’ groups supporting our local parks and green spaces; at a time when local authorities are having to look at how and where they can dedicate resources, communities are saying that these things are important to them and going out and taking practical action. Most recently in Dudley South, the Friends of Cot Lane Park group was formed a month or so ago on a wet Wednesday evening, but still attracted 60 people from local estates. The group was formed in response to damage and disruption caused following an unauthorised Traveller camp at the park.

The Black country has seen an unusual number of unauthorised Traveller camps over the summer and into the early autumn. Many have been responsible and considerate to local neighbours, but sadly some have behaved criminally. There has been disruption and criminal damage and police have reported not only robberies but violent crimes. While local authorities in my own borough of Dudley and neighbouring boroughs have pursued successive magistrates court orders, those who seek to take advantage of the system know that that means that they have at least seven days before they have to worry about it. As a result, some of the less responsible and considerate groups have merely gone from one park or play area to the next, causing the same damage and disruption at each.

I hope that the Government will look again at practical questions such as whether authorised land for Traveller camps can be pooled so that local authorities can come together to make adequate provision across a wider area rather than in a single authority area, and whether it is time to allow local authorities to designate particular land or categories of land as sites where unauthorised camps attract criminal penalties and the realities that go with that. Of course we must always consider the genuine human rights of Traveller communities, but they must always be balanced with the legitimate rights of settled communities.

I was pleased that the then Chancellor was able to announce in the Budget in March this year the approval of the enterprise zone in my constituency. We are still waiting for the final approval of the business case, and I hope that the Deputy Leader of the House will make inquiries about it so that the new jobs, investment and increased prosperity can come into my constituency and benefit not only those whom I represent but those in neighbouring constituencies.

Similarly, the Government have signed off the extension to the metro network between Wednesbury and Brierley Hill in my constituency. It is being underwritten by the new West Midlands combined authority, meaning that it can go ahead sooner than expected. I hope that the Government will give serious consideration to extending it further to Stourbridge so that the tram link can connect back in with the main-line rail network and people can enjoy some of the benefits of HS2 connectivity.

The final theme I want to raise before the House adjourns for the Christmas recess is the need to work to ensure that everyone in our communities has the skills and knowledge that they need to succeed. I have been lucky enough to visit every school in my constituency since I was elected last May. Clearly, there is much excellent teaching and school management around Dudley and the wider Black country. It is important that I make that point because my wife has recently returned to the classroom and I know that she is listening; it could be a cold Christmas if I forget to emphasise that.

Invictus Education Trust and Windsor Academy Trust in my constituency are showing the power of schools working in partnership to drive up standards. However, across the wider Black Country, Ofsted has raised serious concerns with the four local authorities. Children in those areas start below the national average, but sadly they slip further behind across key stages 1 to 4. The performance, sadly, is less good than similar local authorities elsewhere in the country with similar levels of deprivation, so we really need to consider how we can ensure no child is left behind, whichever part of the country they live in. High-performing schools and academy trusts must be able to innovate, so we can have more diversity and tailored education provision in state schools. The Invictus Trust, which has one school in my constituency, is preparing plans for a specialist secondary school that incorporates part of an almost military-style curriculum, together with core EBacc subjects, to really target those in danger of becoming disengaged with the education system. I hope the Government will give that serious consideration when the application is submitted.

As I said, we have a lot of talent in our schools. I saw that recently when I received a letter from India, Thea and Jasmine from Belle Vue primary school about the scourge of modern slavery. I have taken up this issue with Ministers, and I know the Deputy Leader of the House has done a lot of work on it in the past. The quality of the letter and the depth of understanding it demonstrated, not only of the slave trade in the early 19th century and the abolition of slavery in the United States but how it affects our communities now, was remarkable for primary school children.

You will be aware of the talent of some of my constituents, Mr Speaker, from the Christmas card I hope you received, which showcased the artistic talents of Alex Maher and Lucy Hannon of Maidensbridge primary school, William Hetheridge of Glynne primary school, Millie Millard of Ashwood Park primary school, Tia Worrell of St Mary’s Church of England primary school, Thomas Pinches of The Brier school and Reggie of Netherton Church of England primary school. I am delighted that the seven excellent entries were all able to go on the Christmas card. Merry Hill shopping centre in my constituency was so impressed with the standard of the entries that it has put them on display, so that people doing their last-minute Christmas shopping can see just how many talented artists we have in Dudley South.

I think that that is a good point on which to finish. I again wish you a very merry Christmas, Mr Speaker, and best wishes for the new year.

Multiannual Financial Framework

Mike Wood Excerpts

Wednesday 7th December 2016 General Committees

[Mike Wood (Dudley South) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hanson. It might be helpful to the Committee if I take a few minutes to briefly explain the background to the documents and the reasons why the European Scrutiny Committee recommended them for debate.

The multiannual financial framework sets out annual ceilings for the six headings of EU budgetary expenditure. The Commission has presented a mid-term review of the multiannual financial framework for 2014-20, and that is the first document in the motion. The Commission’s communication covers three matters: the multiannual financial framework at mid-term and its state of implementation and challenges; strengthening the EU budget’s focus and flexibility to deliver on priorities and new challenges; and issues for preparation of the next multiannual financial framework.

Consequent to the mid-term review, the Commission sets out a financial package of €13 billion or £11 billion of additional EU funding in 2017-20 for jobs, growth, migration and security. The inter-institutional agreement between the Council, the European Parliament and the Commission on budgetary matters provides for the contingency margin, among other matters, which is a mechanism to react to unforeseen circumstances as a last resort instrument and allows for a maximum of 0.03% of EU GNI to be redeployed between budget headings.

The Commission’s financial revision package is underpinned by the next four documents in the motion, which are: a proposed Council regulation to amend the 2013 regulation establishing the multiannual financial framework for 2014-20; a proposed amendment to the 2013 inter-institutional agreement on budgetary matters and financial management; a proposed decision concerning the contingency margin; and a proposed regulation on the financial rules applicable to the EU budget, which amends 14 regulations and one decision concerning the financial management of a range of multiannual EU programmes.

The remaining two documents in the motion are a letter of amendment to update the Commission’s draft budget for 2017 and a revised proposal for use of the contingency margin in 2017, in support of the migration and security section of the amending letter. The amending letter has taken into account technical adjustments on expenditure that had occurred within the course of the year and the proposals accompanying the Commission’s mid-term review of the multiannual financial framework. The amending letter increased the draft budget’s commitment appropriations from €157.7 billion— £136 billion—to €159 billion—£136.8 billion—and payment appropriations from €134.9 billion to €135.4 billion, an increase from £116.2 billion to £116.6 billion.

The changes fall into four areas: agriculture and fisheries, technical adjustments, growth and jobs, and migration and security. The first two are annual features of amending letters; the second two were particular to the budget proposals for 2017. In recommending the first five documents for debate, the European Scrutiny Committee noted that they represent an important stage in the adoption and management of annual EU budgets. The Committee suggested that among the matters Members might wish to explore today are the Government’s view of the individual budgetary upratings suggested by the Commission; whether they see any difficulties in the implementing proposals that the Commission presents; what the financial implications for the UK are likely to be prior to Brexit; and what post-Brexit financial liabilities there might be for the UK as a result of these proposals.

The Committee recognised that the remaining two documents were relevant primarily to the negotiation of the 2017 EU general budget. Given that the Commission had also linked them to the mid-term review of the multiannual financial framework, we recommended that they be included in this debate.

[The Chair]

I now call the Minister to make an opening statement. I remind the Committee that, as in the House, no interventions are allowed during the Minister’s statement, but there will be opportunities for questions following the statement.

Concentrix: Tax Credit Claimants

Mike Wood Excerpts

Tuesday 18th October 2016 Westminster Hall

[Mike Wood (Dudley South) (Con)]

Like many colleagues, I have seen a substantial spike in the number of tax credit inquiries following the letters from Concentrix. Our constituents expect action to be taken to ensure that benefits and tax credits are paid to the right people, and not to people who should not qualify for them. They also expect that process to be fair and sensitive. It is clear, however, that that has not been the case with Concentrix. So I am relieved—indeed, delighted—that the contract with Concentrix will not be renewed. However, we need to consider a number of questions, many of which were raised by the right hon. Member for Slough (Fiona Mactaggart), about whatever contract or system replaces the current Concentrix contract.

The first question is about the letters coming from Concentrix, including the form and style of those letters. In addition to letters that a number of my constituents have shown me, I have seen one of the letters that a member of my family received. Frankly, I would not have assumed that that letter came on behalf of the Government. It was of very poor quality; the letterhead looked as if it had been scanned in or computer-generated; and to all extents and purposes it looked like a scam, and I would have been very reluctant to responded officially to it.

We have spoken about the burden of proof and where it should lie. We also must consider the standard of proof. Concentrix has been treating the standard as beyond the realm of possibilities instead of on the balance of probabilities, and that is entirely inappropriate, particularly given what it calls the evidence. Data from credit searches and the like may be useful intelligence for starting further investigations, but they are not, in themselves, evidence. I am pleased that the contract is not being renewed, and I hope that the Minister will be able to give us some reassurance.

Finance Bill

Mike Wood Excerpts

Monday 5th September 2016 Commons Chamber

[Charlie Elphicke]

That is a very powerful point. This is why transparency matters. If people know that they are being taken for a ride, they do not have to use an organisation that uses a Luxembourg structure, which is a common kind of intermediate structure for pan-European tax planning to organise things so that no tax need be paid.

This is not just about Avis. I had a look at the accounts of Hertz, another large US car rental company that also does not seem to have paid any tax in the past few years. It is hard to tell how it is doing that, and I had to look at the accounts in very great detail. It has some let-out whereby the company does not have to report related-party transactions. One would think that it may well be renting its car fleets through the Luxembourg company or the Netherlands BV that it uses. Hertz uses a Netherlands BV and Avis uses a Luxembourg company to get money out of the UK tax net so that it is not subject to tax on any profit. However, I cannot tell, because we do not have that level of reporting. That is why country-by-country reporting is important, not just as a tax concept but as an accounting concept, so that one can see where the money has gone. Similarly, inter-company loans and borrowings are often at the much higher rate. That is certainly the case with Avis, which was paying more in its inter-company loans than in its borrowings to the bank. That, too, caused me a level of concern. There seemed perhaps to be some trademark royalties in there, or some royalties to do with its internal IT and computer systems, but it was hard to tell because we do not have that granularity in the accounts.

We ought to have a greater level of knowledge, a greater level of reporting, and a greater level of understanding of how money is being paid, the taxes that are due, and the nature of the planning that is being undertaken so that our laws are more robust and we can make sure that everyone in this nation pays a fair share of tax, be they the cleaner or the largest enterprise that is trading. It matters for the rule of law, for a fair and open market, and for a level competitive playing field that all businesses and enterprises are treated the same.

[Mike Wood (Dudley South) (Con)]

As a Conservative, I believe that taxes, whether direct or indirect, need to be kept as low as possible, consistent with the need to raise finances for our vital public services and for our national security. Unnecessarily high taxation not only strangles growth and development but means Government taking from those who have earned money, whether through labour, innovation, or capital.

However, the flipside of keeping tax levels low is that everybody must pay their fair share. Aggressive tax avoidance, bending the rules of the tax system to gain an advantage that Parliament never intended, means that a heavier burden falls on others, who are able to keep less of the money that they have earned. This Government are rightly committed to supporting businesses through low taxes—that is why corporation tax is being cut again to 17%—but those taxes do have to be paid.

This Bill therefore addresses many of the ways that companies use to avoid paying their fair level of tax. That includes the amendments that we are debating, tabled by the Government, to reform hybrid mismatches. The amendments will reduce aggressive tax planning, typically involving a multinational group. The introduction of these rules will, in essence, remove the tax advantage arising from the use of hybrid entities and instruments, and ought to encourage more businesses to adopt less complicated, more transparent cross-border investment structures. I look forward to similar rules being introduced by other jurisdictions. However, in line with OECD regulations, the Bill contains provisions for counteraction in the UK where the other country does not counteract the mismatch within its own hybrid mismatch rules. The Bill introduces the new penalty of 60% of tax due that was announced in the Budget, to be charged in all cases successfully tackled by the general anti-avoidance rule.

Government amendments 136 and 137 help to ensure that the changes announced in the Budget work as intended, cracking down further on unscrupulous and aggressive tax avoidance. I agree with the comments made by my hon. Friend the Member for Dover (Charlie Elphicke) on country-by-country reporting, as well as those raised so regularly by the right hon. Member for Don Valley (Caroline Flint). There is widespread and growing agreement that there is a need to move to country-by-country reporting so that the information is out there and available both to national tax authorities and to the wider public. That brings us back to the question of whether the best way to achieve that is for individual countries to act unilaterally or for the UK to move in partnership with our international allies and through a range of international organisations both within and beyond Europe.

[Rob Marris]

Of course, the Opposition want international action, we want international co-operation and we want our international friends to copy the amendment tabled by my right hon. Friend the Member for Don Valley (Caroline Flint), which we hope will be successful tonight. However, we also need to bear it in mind that half the tax havens in the world are British overseas territories. We have a particular responsibility in this regard worldwide. It is not about some sort of moral responsibility—to use the old-fashioned phrase, the white man’s burden—or any of that nonsense. It is to do with the fact that British overseas territories are responsible for half of these shenanigans.

[Mike Wood]

The hon. Gentleman makes a valid point, but we should also recognise, as I am sure he will, the progress that has been made in recent years to insist on those overseas territories moving into the 21st century so that their tax arrangements comply with what we would expect for international standards. In a globalised world, we must be clear that concerted international effort is needed to stop continued cross-border tax avoidance, evasion or plain old-fashioned aggressive but unscrupulous planning.

The UK Government have done more than any previous Government and more than most of our international allies and competitors to eradicate these practices, and they continue to do so, but of course more must be done and I welcome the reassurances we have heard from the Government that this remains a priority. I am pleased that the Government are now pursuing country-by-country reporting and that it will be discussed at the forthcoming G20 Finance Ministers meeting. This measure will by itself help to increase transparency across multinationals, supporting not only our tax authorities but, perhaps more importantly, those of the developing countries of which we have heard, which are almost literally being robbed of vital sources of income.

In conclusion, the Finance Bill and the amendments tabled to it include both pioneering and bold measures. It will ensure that taxes are paid and that everybody pays their fair share, and I look forward to supporting it this evening.

[John Redwood]

I remind the House that I have declared in the register of interests that I am a registered investment adviser, but obviously I am not speaking on their behalf in this debate.

It seems to me that there is common ground among all parties in this House that we need to collect a decent amount of tax revenue and that we want to ensure that those who are rich, particularly companies that seem to generate a lot of turnover and possibly profit, pay their fair share. We recognise, I think, that we have to operate in a global market. We are talking about what are usually large corporations that genuinely make different levels of profit and generate different amounts of turnover in different jurisdictions, and that have genuinely complicated arrangements when they switch components, technology, ideas and work between different centres. Even in a service business that does that through electronic communication and digital activity, there may be different people in different centres around the world who contribute to servicing the client and to dealing with the particular product. There are, therefore, genuine issues for the honest company in trying to define and measure precisely where work is done, where added value is greatest and what is a fair attribution.

We as legislators have to understand that complexity and try to come up with a good judgment, collectively and globally between the main jurisdictions, on what is a fair way to instruct those global companies to report in our different jurisdictions so that sensible amounts of tax are captured.

Oral Answers to Questions

Mike Wood Excerpts

Tuesday 19th July 2016 Commons Chamber

[Mr Gauke]

As my right hon. Friend the Chancellor has made clear, and as, indeed, the previous Chancellor made clear, in circumstances where there is a projection of growth less than 1% over a 12-month period, that fiscal rule does not apply. The fact is that we inherited a very high deficit, and we have shown very strong determination over the past six years to bring that deficit down. As we face the challenges that we now face in terms of Brexit, had we not taken the tough decisions on public spending over the past six years, we would be in a much more vulnerable position than we are now.

[Mike Wood (Dudley South) (Con)]

The previous Chancellor announced a new light rail link between the midland metro and the new enterprise zone in Brierley Hill in my constituency. Will my right hon. Friend meet me to discuss how we can extend that to the main line rail link at Stourbridge so that we can support businesses, communities and jobs in my constituency?

[Mr Gauke]

I note that my prediction that I would receive further representations and diary request appears to be holding true. I am happy also to meet my hon. Friend to discuss the project that he mentioned.