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.

Surplus Target and Corporation Tax

Mike Wood Excerpts

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

I am always happy to consider any good proposals to make further investment in our transport infrastructure. We of course support the electrification of railway lines both into south Wales and through the valleys. The Cardiff city deal has just been signed for the wider Cardiff city region, but if the hon. Gentleman has further proposals, I am happy to look at them.

[Mike Wood (Dudley South) (Con)]

When the Chancellor cut corporation tax in the Budget, he reduced the losses that banks could offset against corporation tax liabilities. Will he consider extending that to ensure that while we have the lowest possible rates, everyone pays their fair share of corporation tax?

[Mr Osborne]

My hon. Friend rightly says that as well as reducing corporation tax rates, we did a lot to reduce some of the reliefs that have been used—and some that have been abused. Broadly speaking, that is the right direction of travel for our tax system.

Bank Branch Closures

Mike Wood Excerpts

Thursday 30th June 2016 Commons Chamber

[Chris Evans]

I totally agree. When I go to a bank that is about to close, I want to know the exact figure. I want to know what the footfall is even if that means just clicking the numbers as people walk through the door. At least then there would be some raw data that could be used to justify a branch being closed.

There is also a social impact. Risca once had several banks and building societies, including branches of Lloyds, HSBC and Barclays. Lloyds and HSBC have now closed, leaving the town with one remaining bank, which is fortunate because people still have the option of moving to Barclays if they want to continue to bank locally. What happens if, as in so many communities up and down the country, Risca or Newbridge lose their last remaining bank as the long trend of bank branch closures continues, as predicted by fintech companies?

I say to my hon. Friends the Members for Ynys Môn and for Clwyd South and the hon. Member for Ceredigion that I am lucky in Islwyn because we have good transport links. We have a trunk road that goes right through the constituency, the bus service is good, and there is a new train service. People can get from town to town. However, Ceredigion, which is a huge constituency that I know quite well, Anglesey and Clwyd South all have country lanes and one-track roads. How can people get from one branch to another? It is a major outing for many people.

Before a bank closes, it is imperative that a full assessment is carried out of the impact that the closure will have on the local community and that local stakeholders are consulted. Steps have been taken. In March 2015, banks published their access to banking protocol, which laid out their commitment to ensure financial inclusion and to undertake an impact assessment through community engagement when a branch closure was planned. I look forward to the publication of the independent review led by Professor Russel Griggs of how banks have implemented the protocol. In my anecdotal experience, however, they have not. They have been found absolutely wanting.

It is very clear that some banks provide a better service than others. For example, I compare the closure of Barclays in Newbridge with the way that HSBC was closed in Risca. When I see something good, I say so. The way that Barclays managed that closure was far better than what happened at Risca. Barclays had the raw data, there was a point of contact, it spoke to all the customers, and I pay tribute to its community relations manager, Jonathan Brenchley, who was fantastic all the way through that process. The great thing about him is that if customers have a problem, they can pick up the phone to him and he will deal with it. It is an example that many other banks should look into.

In May 2013 Barclays launched its Digital Eagles programme, which is designed to support and educate customers to help them feel comfortable with using digital channels not only for their banking, but in all aspects of their lives. So far it has trained over 16,000 Digital Eagles across the country and has held 5,200 learning sessions. The expansion of such programmes among other banks would be a very important step towards ensuring that nobody was left behind as banking changes.

However, switching to online or telephone banking alone will not be enough to ensure that nobody is badly affected by branch closures. The parents of my constituent, who have no computer or internet, should not be expected to buy a computer, and their hearing problems make telephone banking an obstacle. If they are to keep their independence as more bank branches close, banks must move towards a model whereby the bank will go to the customer if the customer cannot get to the bank physically, digitally or otherwise.

I pay tribute to NatWest for its service, which is akin to a mobile library. Its van turns up once a week in hard-to-reach communities so that people can do their banking there. A promising solution might be a vast expansion of mobile banks which, although they are not perfect, could at least dampen the impact of bank closures. Customers who seek the kind of banking and financial advice they would otherwise receive at a branch should have the option to request one-to-one meetings with bank staff, either at home or in a nearby public space, such as a library.

It is important to remember that among the biggest customers of local bank branches are small businesses, with regular trips to their local branches to make deposits. The closure of branches means that they have to go further and further and waste precious time when they could be chasing sales and business. If time is money, they are certainly losing out. As in the case of personal banking, I believe banks must change their approach so that they are the ones to come to the customer. In January 2016 Barclays introduced a Barclays Collect service, which will travel directly to business and corporate customers to collect deposits directly from their door. I welcome that news. Barclays plans to roll out the scheme more widely next month. I hope the scheme is successful and that other banks follow suit.

We have to consider other options, and credit unions must be part of the mix. Earlier my hon. Friend the Member for Harrow West (Mr Thomas) said that in the new banking world credit unions must play a role. They will bring people to banking. I know that the Minister has been a champion of credit unions in the past. They bring people to banking, but very often they are the victims of their own success. Because they are voluntary organisations, when they get huge they get even more difficult to manage, as people do not have the necessary skills and experience.

Credit unions do not know where to go as they get bigger. I think building societies have a role and should offer back-up to credit unions, as should post office credit unions. There is much work to be done in credit unions, but there needs to be a next step for them, such as the opportunity to become a community bank, a post office-style credit union, or even a building society. I urge the Minister to look into this. Legislation is needed to enable huge credit unions run by voluntary staff to become the new banks or smaller community banks or building societies. I hope she and her officials will give some thought to that.

We need to start thinking about the social impact when a bank closes. The premises usually remain vacant or become a pub, for example, which is a waste.

[Mike Wood (Dudley South) (Con)]

In my constituency, rather like in the hon. Gentleman’s, Lloyds Banking Group announced two further bank closures yesterday. He is speaking movingly about the impact of bank closures on our communities, but that impact also extends to the staff. Does he agree that banks need to do far more to redeploy staff, and, where redeployment cannot take place, to make sure that retraining and support are in place so that staff are treated fairly?

[Chris Evans]

As a former employee of Lloyds TSB, as it was in those days, I have every sympathy with any member of a bank’s staff who is made redundant.

To go back to my earlier point, I hope the Minister will think about a piece of social legislation that says that banks should offer members of staff to credit unions, to give those organisations the expertise and professionalism they need to manage once they get bigger. There is a real space there for some action.

Banking is changing, but banks have to change with the times; they have to reach out to the customer and to find new ways of delivering their services. I come from a banking background, and I know that things are not perfect, but today’s debate has given me hope that all of us in the House want the best deal we can get for our constituents and for the customers of banks.

UK Economy

Mike Wood Excerpts

Wednesday 29th June 2016 Commons Chamber

[Stewart Hosie]

The Government have made it clear that it will be for the next Government to bring forward such a vote. I think we have got until September or October at the earliest before we need to decide whether to do that.

We are disappointed that the UK voted to leave. That is not what we wanted. The priority must be, as others have said, to stabilise markets and to protect the economy. That is why our First Minister is in Brussels today, and it is why she has said that our Government are exploring each and every potential avenue to maintain Scotland’s EU status, because that is where the instability is coming from.

Let me say one more thing about the previous referendum, and then I will move on to the economic consequences. It is democratically unacceptable for Scotland to be removed from the EU against its will. The irony is that we were told time after time before our independence referendum that the threat to our position in the EU came from independence. Alistair Darling told us that in November 2012. Ruth Davidson told us that on 2 September 2014:

“It is disingenuous…to say that no means out and yes means in, when actually the opposite is true. No means we stay in,”

she said. Even the Better Together campaign tweeted the same day:

“What is process for removing our EU citizenship? Voting yes.”

How wrong, and how misleading that all was. Our place in the EU was never under threat from independence; it was, and it is now, very much in jeopardy only because of the UK decision to leave.

I will move on from that. Now is the time for calm, measured reflection, with our First Minister and Government doing everything they can, including talking directly to Brussels today, to secure our European status and to provide as much reassurance and certainty as we can over the next days and weeks. It is the time for being reassuring, as we all should and must, to individuals from the EU and further afield, because we believe—as most in this House believe—that they remain welcome and appreciated here.

We must also do all we can to help to restore financial stability, to reassure the business community and to emphasise that, of now, we remain members of the EU and we are firmly in the EU; that trade and business should continue; and that we should all do everything we can to say to those planning inward investment, “This remains a place where one should invest one’s capital with confidence.”

Why is this important? Because the FTSE 100 dropped by 8.4% on the morning of 24 June. On 27 June the downward trend continued; by late afternoon, the FTSE was down another 150 points, or 2.5%. Friday morning’s sudden drop meant that £137 billion was wiped off UK blue chip stocks within minutes of the markets opening. As the Chancellor said earlier, banks, house builders and others were the biggest fallers. Taylor Wimpey was down 42%, Persimmon 40% and RBS 34%. During Monday morning, trading in the shares of Barclays and RBS was briefly halted as the sharp losses exceeded 10% of their stock value. After trading was restarted, the share price of both companies continued to fall and move wildly because of the uncertainty. The FTSE 250 index, which has more businesses in it that are exposed to the domestic market, fell even further—by 7.2%, or 1,200 points. Those were extraordinary falls and changes in both markets. PageGroup led the fall; there was a 58% slump in the value of its stock.

[Mike Wood (Dudley South) (Con)]

While I recognise the figures the hon. Gentleman quotes, does he accept that the FTSE 100 is currently trading at around 6,300, which is higher than it has been for most of the last six months?

[Stewart Hosie]

Indeed, and I will come to the recovery in certain areas in just a moment. The hon. Gentleman is right when it comes to the FTSE 100, but let me come to all the other indices, and we will see the real damage and how it is being played out.

It was not simply stock prices that were affected. Sterling was trading at $1.45 before the referendum. The value of the pound against the dollar fell by almost 8% on Friday the 24th—almost twice the fall in 1992, when the UK was forced out of the exchange rate mechanism on Black Wednesday.

Budget Resolutions and Economic Situation

Mike Wood Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Mike Wood (Dudley South) (Con)]

The Budget builds on the Chancellor’s strong record over the past six years of restoring sanity to the public finances, rebuilding the nation’s economy and securing growth. It is a shame that the shadow Chancellor is no longer in the Chamber, but I am sure that the shadow Chief Secretary to the Treasury will pass on the message that despite the shadow Chancellor’s mean-spirited comments to the Chancellor, such a feeling is not reciprocated on the Government Benches. Indeed, I am sure that I speak for all Conservative Members when I say that I hope that the shadow Chancellor will remain in his position for many years to come.

The Budget contains many measures that will benefit people and businesses in Dudley South by creating opportunities that are the hallmark of any compassionate society. There are nearly 3,000 small and medium-sized employers in Dudley South, many of which will benefit from the permanent increase in small business rate relief thresholds, as well as the increase in thresholds at the higher rate of business rates. As the hon. Member for Coventry South (Mr Cunningham) was generous enough to acknowledge, such measures are indisputably good for small businesses. About 2,000 self-employed people in Dudley South will benefit from the abolition of class 2 national insurance contributions as part of an ongoing simplification and modernisation of the taxation system.

For me, the most significant announcement in the Budget last Wednesday was of a new enterprise zone for the Waterfront in my constituency. I had been running a campaign about that since before the general election, so I put on record my personal thanks both to the Chancellor and to the Minister for Communities and Resilience, who has responsibility for devolution, who have taken the time to meet me, to listen to the arguments for the enterprise zone and, more importantly, to understand and act on them.

The enterprise zone will create more than 4,000 net new jobs—[Interruption.] As the hon. Member for Wolverhampton South West (Rob Marris) said, it will create significant benefits not only for Dudley borough, but for the wider region, which I happily acknowledge. It will mean a 100% business rate holiday alongside 100% capital allowances on large investment in new plant machinery, which has been extended for eight years. It is a big boost to our local economy and promises to add millions of pounds to local prosperity. I thank Dudley Council and the Black Country local enterprise partnership for all the work they did in making that possible.

The Budget is a big step forward in creating opportunities for all nations and all regions of our country. The black country is well placed to take full advantage, and I will certainly support the Budget this evening.

Budget Resolutions and Economic Situation

Mike Wood Excerpts

Wednesday 16th March 2016 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

We have got used to missed targets and U-turns in the Chancellor’s Budgets. I fear that this may be the quickest U-turn ever. This could well be known as the lame duck Budget. The Chancellor let the cat out of the bag when he was expressing his support for the EU, which I thoroughly share. All the predictions on which the Budget is based assume our continued membership of the EU. I marvel at the Government’s sheer lack of leadership in projecting their long-term economic plan and basing successive Budgets on it, then subjecting the core of their future economic strategy to a political process that puts it in jeopardy and exists only to satisfy the internal politics of the Conservative Government.

I support what the Chancellor said, but what he referred to has not just occurred over the past month or so. It has been the case for years. Had there been the necessary leadership from the Government, the issue would not be the subject of debate now and we would not risk the damage that the outcome could do to our economy and our future economic projections, and we would not potentially be facing another Budget in a far more pessimistic economic scenario in a few months.

Many speakers have pointed out the Chancellor’s missed targets and the failure to deliver on his early promises. The march of the makers has been talked about at great length. Sometimes when I look at Government policies and manufacturing production, I think it should have been called the ides of the march of the makers. This is the source of all the Government’s current difficulties. Our failure to invest in manufacturing has resulted in the current very low levels of productivity, which are undermining our economic growth and our export performance. Until we have Budgets which put this at the centre of Government policy, the problems outlined in every Budget, and re-addressed because of the failure to deal with them in previous Budgets, will continue.

I would like to have seen in this Budget measures on business rates. We have the most incoherent business rate regime imaginable. The Chancellor spoke today about reducing corporation tax. That may be an element that business favours, and it may help business. On the other hand, what happens under the business rate regime to a manufacturing company that invests in new machinery so that it can increase productivity and export? The business rate goes up, and the company gets penalised. In the context of business policy, it is no good looking at one element of the taxation regime without looking at the others. The Government need to look at the whole package if businesses are to have a basis on which they can invest without being penalised, producing all the economic benefits that will play such an important part in the future growth of our economy. The Government have signally failed to do that, and we might say that some of their measures amount to just trying to mend the roof while the rain is pouring.

I would briefly mention two other elements of productivity the Government have failed to address: skills and construction infrastructure. We have had boasts of millions of pounds being invested in apprenticeships and the academisation of schools, but the outcome is that there are still acute skills shortages in science, technology, engineering and maths-based subjects, which are central to the capability of our manufacturing industry to develop, grow and export. Something is going wrong somewhere, and I saw nothing in the Budget that would address that.

The other issue is infrastructure. I welcome the proposed infrastructure projects, but I would have more faith in their ability to impact on our productivity if infrastructure investment had not dropped by nearly half over the last five years. The Government have started to deliver on only 9% of the projects they have in the pipeline, and those projects that there are are heavily concentrated in London and the south-east. I am not knocking any particular programme there, but the fact is that London and the south-east have had higher economic growth, than the rest of the country.

[Mike Wood (Dudley South) (Con)]

Will the hon. Gentleman give way?

[Mr Bailey]

No, I will not give way, because I respect the ability of others to have time to make their points as well.

The Government have simply moved from a short-term, politically expedient solution, subjected it to political window dressing and then had to explain its failure in a subsequent Budget. This is a Government of missed targets, U-turns, incoherence and, quite frankly, incompetence.

Tax Avoidance and Multinational Companies

Mike Wood Excerpts

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

Let me come on to that point.

It did not take long for independent analysis to show what a derisory sum the Google tax payment was. The word “derisory” is not just my description, but the word used by the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, as well as many others. Google had a UK turnover of approximately £4 billion in 2014-15. If profits here were similar to those across the whole group, about a 25% return, that implies £1 billion-worth of profits. If the standard 20% corporation tax is levied, that implies a £200 million tax bill for the one year, not the £200 million paid by Google for the decade. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, independent assessors have estimated that the Google tax rate for the past decade was 3%.

[Mike Wood (Dudley South) (Con)]

Companies such as Simworx in my constituency are extremely successful at selling products around the world that are based on their intellectual property developed in the UK. Does the shadow Chancellor think the profits from that intellectual property should be taxed in the country where those products are sold, or here in Britain?

[John McDonnell]

The economic activity definition has to be examined when profits are assessed. I will come on to that point because it is valid and reasonable.

Bank of England and Financial Services Bill [Lords]

Mike Wood Excerpts

Monday 1st February 2016 Commons Chamber

[Mike Wood (Dudley South) (Con)]

Thank you, Madam Deputy Speaker. I shall try to compensate for some of the earlier speeches that went a little beyond your guidance.

It is seven years since the most devastating financial crash of our lifetime. Since the crash, regulations have rightly been updated by the Chancellor and Treasury Ministers. They have put responsibility and accountability at the heart of the UK’s financial system. Because of the Government’s long-term economic plan, banking in the UK is now far more robust, but it is clearly not invincible. I shall support the Bill this evening so that we can build on that progress, continuing all the valuable work that the Treasury has done so far and improving on the status quo, strengthening the way the Bank of England is governed, increasing accountability in the financial services sector, and extending the role of the Pension Wise advice service, which I know is used and valued by many of my constituents.

The Bank of England has been a cornerstone of global finance since 1694. Its structures and governance must adapt to the needs of the 21st century so that it can continue as such. Some of the Bank’s historic practices have not been in line with current international standards, but the Bill helps to redress the balance. Strengthening the role of the Bank of England’s court of directors will enable the Bank to function with an effective and modern unitary board, a more effective structure to allow the Bank to deliver on its vital regulatory and policy roles.

To most of our constituents, the key role of the Bank of England, other than issuing bank notes in England, is to set interest rates. The Monetary Policy Committee currently meets 12 times a year but, as we have heard, a single month is rarely long enough to properly review, consider and change a macro-economic assessment, so moving the MPC to eight meetings a year would have many desirable outcomes. Most obviously, policy making at that level requires time for reflection, which a longer period between meetings would allow. Such a sensible change will merely bring the Bank of England into line with other central banks, such as the Federal Reserve and the European Central Bank. Allowing the results of votes and the reasoning behind them to be published alongside decisions over interest rates will open up that opaque process, granting access to the MPC’s thinking.

The crash of 2007-08 highlighted the irresponsible behaviour of some individuals working in the financial services industry. Thankfully, the days to which my hon. Friend the Member for Havant (Mr Mak) referred, when the Labour party allowed people such as Fred Goodwin to take huge bonuses while allowing their banks to freefall, are behind us.

The senior managers and certification regime legislated for by the coalition will come into force in March. However, although the existing legislation will apply to banks, building societies, credit unions and PRA-regulated investment firms, it will not extend to other authorised financial services firms. Expanding the regime’s scope will help to create a fairer, more consistent, more effective and more rigorous regime for all authorised financial services firms.

The Government have already made revolutionary changes to improve and support the pensions system. Allowing our constituents to access their pension pots—their annuities—without being penalised for doing so has given people more flexibility and more choice over how they spend their own money. As a result of those changes, the Pension Wise scheme was introduced following the 2014 Budget. Expanding the service’s scope will mean that more people receive impartial, high-quality financial advice and guidance, which will allow them to discuss their new options.

I encourage all hon. Members to join me this evening in voting in support of a Bill that will bring the Bank of England and financial services into the 21st century—a Bill to allow transparency and accountability to reign in the financial sector.

HMRC Office Closures

Mike Wood Excerpts

Tuesday 24th November 2015 Commons Chamber

[Mike Wood (Dudley South) (Con)]

Moving more of HMRC’s work out of central London, which has some of the world’s most expensive office space, will enable it to make substantial savings. It is right that HMRC makes whatever savings it can on its property costs so that the money that it does have can be used to improve customer service and maximise tax revenues. It cannot be sustainable for its 58,000 full-time employees to be spread across 170 offices around the country, many of which, as has been, said are little more than a legacy of the 1960s and 1970s. That is highly inefficient.

However, while recognising the need to modernise and reform, we have a responsibility to make sure that HMRC’s staff are treated fairly. I therefore hope that everything possible will be done to retain skills and expertise within HMRC by making sure that as many of the workforce as possible are redeployed. In particular, I emphasise the need for support for the local workers in Brierley Hill in my constituency who choose to transfer to the Birmingham regional centre, and for support and retraining for those who do not transfer to the new centre. I hope that in implementing the changes, HMRC’s management will work closely with colleagues to see how many Brierley Hill and Merry Hill staff might be taken on by the Department for Work and Pensions when the Merry Hill office is transferred to the DWP.

My constituents in Dudley South expect the same high standards from HMRC as they expect from banks and retailers. This programme will help meet those expectations. People in my constituency will welcome the creation of a regional centre in the west midlands, with the high-quality jobs and skills such a centre brings. I am pleased that as part of the modernisation programme, HMRC plans to work with universities and local colleges to attract the best and brightest talent. Although I recognise the importance of Birmingham as Britain’s second city, I urge HMRC not to rule out the black country as a suitable location for the west midlands regional centre.

Quite rightly, Members and residents expect HMRC to increase tax revenues, while cutting running costs, as it has done over the last five years. An additional £11.9 billion was collected last year and an additional £57 billion has been collected over the past decade. Total tax revenue has increased in each of the past five years, during which time HMRC has reduced its running costs from £3.4 billion to £3.1 billion, including £210 million in sustainable cost savings last year alone. However, HMRC cannot rest on its laurels; it must continue to build on these significant achievements. We expect a lot from HMRC.

The changing demands on the organisation mean that ways of operating that might have been appropriate in the past might not be appropriate for the future. Like all organisations, HMRC must continue to adapt if it is to be as effective and responsive as we all want, while operating as efficiently as we must all surely demand. We owe it to HMRC’s leadership to allow them the independence they need to make the changes that they have decided are necessary to meet the challenges. That is why I will support the Government and oppose the motion this evening.