Finance Bill

Natascha Engel Excerpts

Tuesday 28th June 2016 Commons Chamber

Bill (Clauses 7 to 18, 41 to 44, 65 to 18, 129, 132 to 136, and 144 to 154, and schedules 2, 3, 11 to 14, and 18 to 22), as amended, reported, and ordered to lie on the Table.

[Madam Deputy Speaker (Natascha Engel)]

Before we move to the four Ways and Means resolutions numbered 2 to 5 on the Order Paper, the Minister has notified me that he wishes to move an additional Ways and Means motion relating to stamp duty. Copies have been in the Vote Office for the past 40 minutes and I hope hon. Members have had an opportunity to read it. The same procedure will apply as for the motions on the Order Paper.

FINANCE BILL: WAYS AND MEANS (STAMP DUTY: ACQUISITION OF TARGET COMPANY’S SHARE CAPITAL)

Resolved,

That the following provisions shall have effect for the period beginning with 29 June 2016 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—

(1) Section 77 of the Finance Act 1986 (acquisition of target company’s share capital) is amended as follows.

(2) In subsection (3), omit the “and” at the end of paragraph (g) and after paragraph (h) insert “, and

(i) at the time the instrument mentioned in subsection (1) isexecuted there are no disqualifying arrangements, within the meaning given by section 77A, in existence.”

(3) In subsection (3A) for “(3)” substitute “(3)(b) to (h)”.

(4) In subsection (4) after “this section” insert “and section 77A”.

(5) After section 77 of the Finance Act 1986 insert—

“77A Disqualifying arrangements

(1) This section applies for the purposes of section 77(3)(i).

(2) Arrangements are “disqualifying arrangements” if it is reasonable to assume that the purpose, or one of the purposes, of the arrangements is to secure that—

(a) a particular person obtains control of the acquiring company, or

(b) particular persons together obtain control of that company.

(3) But neither of the following are disqualifying arrangements—

(a) the arrangements for the issue of shares in the acquiring company which is the consideration for the acquisition mentioned in section 77(3);

(b) any relevant merger arrangements.

(4) In subsection (3) “relevant merger arrangements” means arrangements for the issue of shares in the acquiring company to the shareholders of a company (“company B”) other than the target company (“company A”) in a case where—

(a) that issue of shares to the shareholders of company B would be the only consideration for the acquisition by the acquiring company of the whole of the issued share capital of company B,

(b) the conditions in section 77(3)(c) and (e) would be met in relation to that acquisition (if that acquisition were made in accordance with the arrangements), and

(c) the conditions in paragraphs (f) to (h) of section 77(3) would be met in relation to that acquisition if—

(i) that acquisition were made in accordance with thearrangements, and

(ii) the shares in the acquiring company issued asconsideration for the acquisition of the share capital of company A were ignored for the purposes of those paragraphs;

and in section 77(3)(e) to (h) and (3A) as they apply by virtue of this subsection, references to the target company are to be read as references to company B.

(5) Where—

(a) arrangements within any paragraph of subsection (3) are part of a wider scheme or arrangement, and

(b) that scheme or arrangement includes other arrangements which—

(i) fall within subsection (2), and

(ii) do not fall within any paragraph of subsection(3),those other arrangements are disqualifying arrangements despite anything in subsection (3).

(6) In this section—

“the acquiring company” has the meaning given by section 77(1);

“arrangements” includes any agreement, understanding or scheme (whether or not legally enforceable);

“control” is to be read in accordance with section 1124 of the Corporation Tax Act 2010;

“the target company” has the meaning given by section 77(1).”

(6) The amendments made by this Resolution have effect in relation to anyinstrument executed on or after 29 June 2016 (and references to arrangementsin any provision inserted by this Resolution include arrangements entered into before that date).

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.—(Mr Gauke.)

FINANCE BILL: WAYS AND MEANS (TRANSACTIONS IN LAND)

Resolved,

That provision may be made for and in connection with the taxation of:

(1) profits of trading activities concerned with land, or the development of land, in the United Kingdom; and

(2) other amounts representing profits from a disposal of, or of property deriving its value from, land in the United Kingdom.—(Mr Gauke.)

FINANCE BILL: WAYS AND MEANS (RECEIPTS FROM INTELLECTUAL PROPERTY: DIVERTED PROFITS TAX)

Resolved,

That provision be made amending Part 3 of the Finance Act 2015 (diverted profits tax).—(Mr Gauke.)

FINANCE BILL: WAYS AND MEANS (RECEIPTS FROM INTELLECTUAL PROPERTY: TERRITORIAL SCOPE)

Resolved,

That:

(1) In section 577 of the Income Tax (Trading and Other Income) Act 2005 (territorial scope of Part 5 charges), at the end insert—

“(5) See also section 577A (territorial scope of Part 5 charges: receipts from intellectual property).”

(2) After that section insert—

“577A Territorial scope of Part 5 charges: receipts from intellectual property

(1) References in section 577 to income which is from a source in the United Kingdom include income arising where—

(a) a royalty or other sum is paid in respect of intellectual property by a person who is non-UK resident, and

(b) the payment is made in connection with a trade carried on by that person through a permanent establishment in the United Kingdom.

(2) Subsection (3) applies where a royalty or other sum is paid in respect of intellectual property by a person who is non-UK resident in connection with a trade carried on by that person only in part through a permanent establishment in the United Kingdom.

(3) The payment referred to in subsection (2) is to be regarded for the purposes of subsection (1)(b) as made in connection with a trade carried on through a permanent establishment in the United Kingdom to such extent as is just and reasonable, having regard to all the circumstances.

(4) In determining for the purposes of section 577 whether income arising is from a source in the United Kingdom, no regard is to be had to arrangements the main purpose of which, or one of the main purposes of which, is to avoid the effect of the rule in subsection (1).

(5) In this section—

‘arrangements’ includes any agreement, understanding, scheme, transaction or series of transactions

(whether or not legally enforceable);

‘intellectual property’ has the same meaning as in section 579;

‘permanent establishment’—

(a) in relation to a company, is to be read (by virtue of section 1007A of ITA 2007) in accordance with Chapter 2 of Part 24 of CTA 2010, and

(b) in relation to any other person, is to be read in accordance with that Chapter but as if references in that Chapter to a company were references to that person.”

(3) The amendments made by paragraphs (1) and (2) have effect in relation to royalties or other sums paid in respect of intellectual property on or after 28 June 2016.

(4) It does not matter for the purposes of subsection (4) of section 577A of the Income Tax (Trading and Other Income) Act 2005 (as inserted by paragraph (2)) whether the arrangements referred to in that subsection are entered into before, or on or after, 28 June 2016.

(5) Where arrangements are disregarded under subsection (4) of section 577A of the Income Tax (Trading and Other Income) Act 2005 (as inserted by paragraph (2)) in relation to a payment of a royalty or other sum which—

(a) is made before 28 June 2016, but

(b) is due on or after that day,

the payment is to be regarded for the purposes of subsection (1) of that section as made on the date on which it is due.

(6) In determining the date on which a payment is due for the purposes of paragraph (5), disregard the arrangements referred to in that paragraph.

(7) Where—

(a) an intellectual property royalty payment within the meaning of section 917A of the Income Tax Act 2007 is made on or after 28 June 2016,

(b) the payment is made under arrangements (within the meaning of that section) entered into before that day,

(c) the arrangements are not DTA tax avoidance arrangements for the purposes of that section,

(d) it is reasonable to conclude that the main purpose, or one of the main purposes, of the arrangements was to obtain a tax advantage by virtue of any provisions of a foreign double taxation arrangement, and

(e) obtaining that tax advantage is contrary to the object and purpose of those provisions,

the arrangements are to be regarded as DTA tax avoidance arrangements for the purposes of section 917A of the Income Tax Act 2007 in relation to the payment.

(8) In paragraph (7)—

“foreign double taxation arrangement” means an arrangement made by two or more territories outside the United Kingdom with a view to affording relief from double taxation in relation to tax chargeable on income (with or without other tax relief);

“tax advantage” is to be construed in accordance with section 208 of the Finance Act 2013 but as if references in that section to “tax” were references to tax chargeable on income under the law of a territory outside the United Kingdom.

(9) Where—

(a) a royalty is paid on or after 28 June 2016,

(b) the right in respect of which the royalty is paid was created or assigned before that day,

(c) section 765(2) of the Income Tax (Trading and Other Income) Act 2005 does not apply in relation to the payment, and

(d) it is reasonable to conclude that the main purpose, or one of the main purposes, of any person connected with the creation or assignment of the right was to take advantage, by means of that creation or assignment, of the law of any territory giving effect to Council Directive 2003/49/EC of 3rd June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different member States, section 758 of the Income Tax (Trading and Other Income) Act 2005 does not apply in relation to the payment.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—(Mr Gauke.)

FINANCE BILL: WAYS AND MEANS (DEDUCTION OF INCOME TAX AT SOURCE: INTELLECTUAL PROPERTY)

Resolved,

That:

(1) Part 15 of the Income Tax Act 2007 (deduction from other payments connected with intellectual property) is amended as specified in paragraphs (2) and (3).

(2) In section 906 (certain royalties etc where usual place of abode of owner is abroad), for subsections (1) to (3) substitute—

“(1) This section applies to any payment made in a tax year where condition A or condition B is met.

(2) Condition A is that—

(a) the payment is a royalty, or a payment of any other kind, for the use of, or the right to use, intellectual property (see section 907),

(b) the usual place of abode of the owner of the intellectual property is outside the United Kingdom, and

(c) the payment is charged to income tax or corporation tax.

(3) Condition B is that—

(a) the payment is a payment of sums payable periodically in respect of intellectual property,

(b) the person entitled to those sums (‘the assignor’) assigned the intellectual property to another person,

(c) the usual place of abode of the assignor is outside the United Kingdom, and (d) the payment is charged to income tax or corporation tax.”

(3) For section 907 substitute—

“907Meaning of ‘intellectual property’

(1) In section 906 ‘intellectual property’ means—

(a) copyright of literary, artistic or scientific work,

(b) any patent, trade mark, design, model, plan, or secret formula or process,

(c) any information concerning industrial, commercial or scientific experience, or

(d) public lending right in respect of a book.

(2) In this section ‘copyright of literary, artistic or scientific work’ does not include copyright in—

(a) a cinematographic film or video recording, or

(b) the sound-track of a cinematographic film or video recording, except so far as it is separately exploited.”

(4) The amendments made by paragraphs (2) and (3) have effect in respect of payments made on or after 28 June 2016.

(5) But the amendments made by paragraphs (2) and (3) do not have effect for the purposes of the definition of “intellectual property royalty payment” in section 917A of the Income Tax Act 2007 inserted by Resolution 23 of the House of 22 March 2016 (deduction of income tax at source: tax avoidance).

(6) That section has effect in relation to payments made on or after 28 June 2016 as if “intellectual property royalty payment” also included (so far as it would not otherwise do so) any payments referred to in section 906(2)(a) or (3)(a) of the Income Tax Act 2007 substituted by paragraph (2).

(7) In determining whether section 906 of the Income Tax Act 2007 applies to a payment, no regard is to be had to any arrangements the main purpose of which, or one of the main purposes of which, is to avoid the effect of the amendments made by paragraphs (2) and (3).

(8) Where arrangements are disregarded under paragraph (7) in relation to a payment which—

(a) is made before 28 June 2016, and

(b) is due on or after that day,

the payment is to be regarded for the purposes of section 906 of the Income Tax Act 2007 as made on the date on which it is due.

(9) In determining the date on which a payment is due for the purposes of paragraph (8), disregard the arrangements referred to in that paragraph.

(10) In this Resolution “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable and whether entered into before, or on or after, 28 June 2016).

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—(Mr Gauke.)

The Economy and Work

Natascha Engel Excerpts

Thursday 26th May 2016 Commons Chamber

[Geraint Davies]

On a point of order, Madam Deputy Speaker. Surely this is meant to be a debate about the Queen’s Speech, not the Labour party?

[Madam Deputy Speaker (Natascha Engel)]

How the Chancellor chooses to use his speech is up to him. I would have thought that, since it is his Queen’s Speech, his focus would be on that, but it is up to him.

[Mr Osborne]

We cannot talk about the Queen’s Speech unless we know what the alternative might look like. This is what the Labour party says about itself: it says the Labour party is becoming increasingly

“irrelevant to the…working people in the country.”

If we think Labour has learned any lessons, this is what has happened today. The leader of the Labour party has today appointed someone called Andrew Fisher as the head of policy for the Labour party. This is a man who campaigned against Labour candidates at the general election in Croydon. This is a man who took part in the 2010 student riots and boasted about breaking through police lines, scaring the police and hurling abuse at them. This is what his economic policy consists of: public ownership of all land in the country; nationalising all banks; and returning to a three-day week. This is the man who has just become the Labour party’s head of policy.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. Before I call the next speaker, I want to warn the House that there will be a speech limit of four minutes after the SNP spokesperson sits down, which will allow us to include all 41 Members wishing to speak, if there are no interventions. I would be grateful if people could bear it in mind that when they take an intervention they are taking time from Members further down the list.

--- Later in debate ---

[George Kerevan (East Lothian) (SNP)]

My hon. Friend has referred to fuel poverty. The Chancellor mentioned Martin Lewis. Is my hon. Friend aware that I was at a conference with Martin Lewis this week, at which he denounced universal credit as particularly hurting the poor and their ability to save and to pay for energy? The very person whom the Chancellor mentioned is the person who is actually—[Interruption.]

[Madam Deputy Speaker (Natascha Engel)]

Order. That was a very long intervention. I have already said that there is a very limited time for a very large number of Members to speak.

[Stewart Hosie]

I was not aware that my hon. Friend was with Mr Lewis, but what he has said does not surprise me in the slightest. For all the talk of an increase in the minimum wage, I think that anyone on the progressive side of politics understands that a real living wage will be undermined by the Government’s cuts to in-work benefits and tax credit.

The Government are failing in respect of almost every key economic indicator. They have missed nearly every target that they have set themselves. The numbers—not the rhetoric—demonstrate beyond doubt that their claim to economic credibility is in tatters. We are asking for a genuine, comprehensive plan for trade, exports, innovation and productivity, and a genuinely rebalanced and fair economy. The Chancellor said that trade and exports would underpin his strategy for growth, but the UK current account deficit now stands at a record £96 billion, its highest ever cash level. The Chancellor promised a doubling of exports to £1 trillion by the end of the year, but exports fell last year to £511 billion. They are going in the wrong direction. On innovation, we continue to compare poorly with our competitors, and the Chancellor’s decision to change innovation grants to loans sends the wrong signals.

Bank of England and Financial Services Bill [Lords]

Natascha Engel Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Mr Charles Walker (Broxbourne) (Con)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Natascha Engel)]

With this it will be convenient to discuss the following:

New clause 10—Debt management plan charges—

(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) After section 137FBB insert—

“137FBC FCA general rules: debt management plan charges

(1) The FCA must make general rules in relation to debt management plans.

(2) The rules must specify that—

(a) if a majority of creditors agree to a creditor fee arrangement, then all creditors shall be bound by the arrangement;

(b) a creditor fee arrangement may subsequently be varied by the agreement of a majority of creditors; and

(c) a creditor fee arrangement and any variations must take the form of a written contract executed by a majority of the creditors and must be distributed to all creditors upon completion.

(3) In this section—

“creditor fee arrangement” means an arrangement whereby the fees incurred as part of the debt management plan are paid by the creditors, calculated either as a fixed amount, a percentage of the amount owed to them or a combination of a fixed amount and a percentage; and

“a majority of creditors” means a subset of creditors where the amount owed to them is more than half of the total amount owed.”’

New clause 14—Combating abusive tax avoidance arrangements—

‘(1) Section 3B of the Financial Services and Markets Act 2000 (Regulatory principles to be applied by both regulators) is amended as follows.

(2) At the end of subsection (1) insert—

“(i) combating abusive tax avoidance arrangements.

(1A) (a) in observing principle (i), the regulators must undertake, in consultation with the Treasury, an annual review for presentation to the Treasury into abusive tax avoidance, including measures to ascertain and record beneficial ownership of trusts using facilities provided by banks with UK holding companies or entities regulated by the Bank of England or the FCA, control of shareholders and ownership of shares, and investment arrangements in an overseas territory outside the UK involving UK financial institutions.

(b) in this section “beneficial ownership of trusts” includes ownership of any equitable interest in a trust including being an object of a discretionary trust, power of appointment or similar arrangement as well as any vested interest under a trust;

(c) “control of shareholders and ownership of shares in companies using facilities provided by banks with UK holding companies or entities regulated by the Bank of England or the FCA” shall include control by any person with control over a voteholder in a company as defined in Part VI Official Listing s.89F of the FSMA (2000) as applied mutatis mutandis to this context, whether directly or indirectly, and whether alone or in concert with some other person.”’

Amendment 1, in clause 24, page 20, leave out lines 5 to 10.

Amendment 8, page 20, line 10, at end add

“and insert—

‘(6) Where the authorised person mentioned in subsection (5) is a relevant authorised person, as defined under section 71A of the Financial Services and Markets Act 2000, subsection (5)(d) does not apply and subsections (7) and (8) do apply.

(6A) If the FCA satisfies itself that a person (P), who is a senior manager in relation to a relevant authorised person, is guilty of misconduct by virtue of subsections (5)(a)-(c), then P shall be guilty of misconduct, subject only to subsection (8).

(6B) But P is not guilty of misconduct by virtue of subsections (5)(a)-(c) and (7) if P satisfies the FCA that P had taken such steps as a person in P’s position could reasonably be expected to take to avoid the contravention occurring (or continuing).””

Amendment 2, page 20, leave out lines 22 to 27.p

Amendment 9, page 20, line 27, at end add

“and insert—

‘(6) Where the PRA-authorised person mentioned in subsection (5) is a relevant authorised person, as defined under section 71A of the Financial Services and Markets Act 2000, subsection (5)(d) does not apply and subsections (6A) and (6B) do apply.

(6A) If the PRA satisfies itself that a person (P) who is a senior manager in relation to a relevant PRA-authorised person is guilty of misconduct by virtue of subsections (5)(a)-(c), then P shall be guilty of misconduct, subject only to subsection (6B).

(6B) But P is not guilty of misconduct by virtue of subsections (5)(a)-(c) and (7) if P satisfies the PRA that P had taken such steps as a person in P‘s position could reasonably be expected to take to avoid the contravention occurring (or continuing).”

Amendment 10, in schedule 4, page 62, line 2, leave out paragraph 18.

[Mr Walker]

New clause 9 is designed to prevent the restriction or withdrawal of banking services from perhaps tens of thousands of people. Those people include soldiers and others serving in the armed forces, judges, civil servants, trade unionists, and local councillors and their officials. Those people, along with their families and associates, are deemed to be “politically exposed persons” for the purposes of the fourth money laundering directive, which is due to be transposed into UK law by no later than June 2017.

The scope of new clause 9 is straightforward. It is designed to ensure that when that money laundering directive is transposed into UK law, reasonable regard is given to the parts of the directive that deal with proportionality. The new clause makes it clear that prior to the enactment of the directive, the Financial Services and Markets Act 2000 will be amended so that the Financial Conduct Authority will be required to publish clear guidance to the banks defining what it deems to be proportionate. New clause 9 also makes regulatory provision for PEPs who believe that they have been treated unreasonably by their banks to ask that their case be adjudicated by the FCA.

Tax Avoidance and Evasion

Natascha Engel Excerpts

Wednesday 13th April 2016 Commons Chamber

[Kevin Foster (Torbay) (Con)]

It is a pleasure to follow the hon. Member for Dundee East (Stewart Hosie). Although there are probably some things we would disagree on, there are a couple of issues on which we do agree. One is that it is welcome that we are having this debate on the Floor of the House today. The other is the fear that the next tax haven to be listed—this time it would affect ordinary working people—might be England if the Scottish Labour party gets its way after the elections this May and makes tax rates for working people higher there than they are south of the border.

It is always good, as a member of the Public Accounts Committee, to be discussing on the Floor of the House how we get in the tax that is owed. During Prime Minister’s Question Time, I think I heard the Leader of the Opposition refer to tax as partly a donation. I can understand why he said that, but let us be clear: a donation is something people voluntarily give to a charity, as I do out of my salary; a tax is a legal requirement to pay something—it is not a donation or an act of charity.

As a member of the Committee, I sat on our recent inquiry into Google, which is perhaps one of the cases that has helped to prompt the debate on this issue over the last few months. We focused a lot on some of the offshore locations, but we also had references to things such as the “double Irish” and the “Dutch sandwich”, which helped to reduce the company’s tax liability. Neither of those relates to offshore territories; they both involve jurisdictions that are members of the EU. It is therefore important that, as we work across the world to try to deal with tax evasion and avoidance, we make sure that other nation states give these issues the attention they deserve. [Interruption.]

[Madam Deputy Speaker (Natascha Engel)]

Order. I am sorry to disturb the hon. Gentleman, but there is quite a lot of chattering going on, and I am finding it quite difficult to hear him.

[Kevin Foster]

Thank you, Madam Deputy Speaker.

In its report, the Committee was clear that HMRC should try to lead a debate about openness and tax rules. In that instance, the issue was revenues and the discussion of information with HMRC. It is easy to grandstand in such debates, but it is important to have not a knee-jerk reaction, but a considered debate about what information is available publicly, because there cannot just be specific rules for individual companies. If we change our general principle of not discussing individual taxpayer data, there are obviously some pitfalls to that, as well as some potential benefits, as we see when we look at deals such as the one with Google. However, the Committee felt that HMRC could lead a debate on that.

The report summarises some of the issues involved in judging whether the Google deal was the best deal that could have been done. It is worth noting, however, that the debate was based on previous tax rules, not today’s tax rules; effectively, we were having a debate about things as they existed some years ago—in some cases, 11 years back, when many Members sitting here today were not actually in the House—and about laws that have, in many cases, changed.

What came out of the Committee’s discussion is that HMRC’s performance is being looked at more widely, and the Committee regularly looks at it. It is encouraging to see some of the figures that have been published on the reduction of the tax gap—not least the corporation tax gap, which has gone from 14% to 7%. That is welcome. Yes, there is more we can do to drive down that 7%, but it is far better to be talking about 7% than 14%.

As has been referred to in the debate, the tax haven where a hedge fund manager could pay as low a tax rate as the person who cleaned their office was the UK six years ago. I have always felt that tackling that was one of the best things done under the coalition Government, because it seemed innately unfair that someone sitting within a few miles of this building could use capital gains tax rules to pay a low rate on a substantial income—indeed, a lower rate than a person earning the minimum wage for cleaning their office.

Having had discussions with Anguilla’s Public Accounts Committee recently, I welcome a number of things about HMRC’s having the ability to get information from, and share information with, the Crown dependencies. I agree with the hon. Member for Dundee East that we should be as diligent in handing information to tax authorities in developing countries via such information-sharing arrangements as we are in using information to enforce our own tax system. I suspect there will always be a debate about exactly what information we share with countries with more repressive regimes, but where the line is purely about avoiding taxation, we should be prepared to co-operate, provided that there are assurances about the standards that will be applied afterwards as part of investigations under the relevant nation’s criminal justice system.

In terms of how the Government and the UK engage with these authorities, it is worth bearing in mind that some of the regulations involved are very complex. There is perhaps a debate to be had about the fact that we currently appoint governors, who effectively act as the Head of State, for three years, with their term being extendable to four. There is perhaps a debate to be had with Foreign Office colleagues about whether it would make more sense to have a longer appointment, to allow governors to build a relationship with the authorities in a country; to build a knowledge of the system there; and to be able to engage more, and to give difficult messages, on behalf of the UK, in a way that a three-year term perhaps does not allow.

We should be clear that being a governor is not about going round in a feathered hat being saluted by everyone; it should be about being part of building a strong and lasting bond between the UK and territories that look to us for support, particularly in the realm of defence and overseas development. We should have people who engage with territories very strongly and who build up their governance systems, but who also have a deep knowledge of those territories and a deep relationship with them. We can then have the tougher discussions we need to have about areas where those territories are sovereign, but where their decisions have a clear impact on us as the home nation.

That said, I welcome the agreements we have managed to sign. I recognise that this is a global problem. Panama is one of the few countries not to have signed up to some of the international agreements, and one of the key issues is what further steps we take against nations that do not do that. Again, however, that should be part of a proper global debate, and we should not pick off individual jurisdictions. If we do that, people will simply find the next jurisdiction that is not honouring transparency. This needs to be a slightly wider debate than just picking on individual circumstances or an individual issue.

Likewise, we need a debate so that there is clarity, for example, about which types of investment many people use—perfectly legitimately and perfectly lawfully—in this country. We have heard of trade unions, pension funds and councils that use unit trusts and that pay their taxes here. At the same time, however, we have to open the envelope on shell companies that are basically just being used to hide who actually owns something, so that we can have that information and ensure that HMRC can get the tax it is due.

I was slightly disappointed that the opening of the debate seemed to focus more on a party political attack than on a measured discussion of how we ensure that the taxes legislated for by this Parliament are collected so that they can be spent by this Parliament. In reading the motion, I thought it was strange that there was no reference to the recent Public Accounts Committee report on the Google taxation deal. Likewise, I was disappointed that there was no reference to the tax transparency Bill—to give it a rather snappier title than its official one—introduced by a former Cabinet Minister, who is now a Labour Back Bencher. Instead, the motion seems like a party political policy document, which means it is not something I feel inclined to support.

This debate is welcome. It is safe to say that all of us recognise that there is more work to be done to capture those revenues that escape all taxation in all jurisdictions, and the UK can also play a role in building the capability of developing nations to crack down on tax avoidance that costs them even more than it costs us. This is ultimately about ensuring that those tax rates that are set here and that we believe are fair are paid. That is the nub of this debate and it must be the focus of future work.

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. Before I call the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), I should say that 11 Members wish to speak and I want to start the wind-ups at about 3.30 pm. If speakers take about eight minutes or less, everybody will get in.

--- Later in debate ---

[James Cartlidge]

My hon. Friend is absolutely right to mention small businesses. I used to say to people that I ran a small business, but measured by the amount of corporation tax we paid, we were bigger than Google. The fact is that those who run small businesses feel as though they have to comply. They cannot afford expensive lawyers. I agree with the hon. Member for Newcastle upon Tyne North about the sense that there is an elite who live by different rules. We have to deal with that, but we must not run away from the key point—my concluding point—with which my hon. Friend the Financial Secretary also concluded, namely that when we talk about transparency, the transparency that really matters to the public is about our ideals and our beliefs.

What do we really believe? I fundamentally believe in the free market. I believe in capitalism. I believe in individuals getting out there and using their creativity to earn their way in the world. We cannot go back to paying our way through debt and unsustainable public finances. In the circumstances, we need to maximise the tax that we get, but we also need to maximise the investment into the country from companies that we have heard the Labour Front Benchers criticise. Those big professional firms in London are massive employers in this country. We need to expand our exports from the services sector. Basically, we need a positive, free enterprise agenda with a fair sense that companies and individuals are paying their fair share, which does not denigrate the free market but creates sustainable growth to deliver prosperity for all.

[Madam Deputy Speaker (Natascha Engel)]

Order. I have now to announce the result of a deferred Division on the question relating to employment agencies etc. The Ayes were 307 and the Noes were 241, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

[Several hon. Members rose—]

[Madam Deputy Speaker]

Everybody has been speaking for just over 10 minutes, rather than eight minutes, which is the informal guide. We now need to keep to about seven minutes or less, if we want to get everybody in.

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

I am happy to start on a note of consensus with the hon. Member for Bracknell (Dr Lee) and my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) that this is all about trust. The public have reacted so fiercely against recent events because there is a collapse of trust in us. The expenses scandal was a screaming nightmare, and public trust reached rock bottom. It is now subterranean—it has got worse. An examination of our standards in this House is currently taking place, and I urge every hon. Member to contribute to it. Democracy itself—the political system—is under threat.

The country is rightly angry about the unfairness in the system. The other day in the House, we heard the most insulting speech, which will deepen the sense of alienation between the Government and the Opposition. I have been here a long time and I recall an incident in which the person who made that speech revealed to the newspapers how he made some of his money. He bought the council house of an elderly gentleman in London, who I think was a neighbour, on the basis that it would appreciate greatly in value and that the neighbour would not live very long. The agreement that the hon. Member made was that he would give the tenant, who would get a discount for being there for years, the money to buy the house and then the hon. Member would inherit the house. That is Tory morality, and it is morally repugnant. It is not the right to buy, but the right to greed. That man lectured us the other day and tried to castigate those whom he described contemptuously as low achievers.

The difficulty is the gulf between what the Government say and what they do. In March 2010, the Prime Minister made an impassioned speech about how he would clean up lobbying. He knew all about it: he was a lobbyist, and he was going to sort it all out. Where are we today, six years later? The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 has been passed, life for trade unions and charities is a bit more troublesome, but the big corporate lobbyists do not have to declare who their clients are. No worthwhile reform has happened. The Prime Minister has worried the minnows in the shallows, but the great fat salmon still swim by unhindered.

There is similarly no sincerity in the Government’s determination to tackle the tax havens. I will give the House an interesting example. Lord Blencathra, who sees himself as the spokesman for the Cayman Islands, mocked the Prime Minister, saying that he had no intention of carrying out his threats to deal with tax havens and that they were a “purely political gesture”—those were Lord Blencathra’s words. We have just heard that the First Minister of the Cayman Islands is putting two fingers up to the Prime Minister. They are not going to take any notice.

Let us look at the remarkable history of Lord Blencathra. It is a fascinating story that shows the laxness of our controls in this House. In 2012 I made a complaint about his behaviour. My complaint was taken to a Committee in the other House to examine. It suggested that he was in breach of the parliamentary code of conduct. His activities included lobbying the Chancellor about taxes affecting the Cayman Islands; he also facilitated an all-expenses paid trip to the islands for three prominent Members of this House. The Committee that deals with standards in the Lords held an investigation, and produced a remarkable document. Lord Blencathra explained that he was taking £12,000 a month in payment from the Cayman Islands, but that he was not lobbying Parliament or Government, but Members—or the other way around; he gave some spurious excuse. Quite remarkably, the decision was taken in 2012 that he had not been in breach of any rules of the House.

Two years later, the contract that Lord Blencathra had signed was leaked. It appeared that he had agreed in the contract to

“Promoting the Cayman Islands’ interests in the UK and Europe by liaising with and making representations to UK ministers, the FCO (Foreign and Commonwealth Office), Members of Parliament in the House of Commons and Members of the House of Lords.”

He put up a spirited defence, saying that he may have signed the contract but he had forgotten what he had agreed to, and anyway if he had signed it he had no intention of doing what it said. That is a most egregious breach of the code of conduct of the House—

[Madam Deputy Speaker (Natascha Engel)]

Order. I have been listening very carefully. The hon. Gentleman knows that he is not to criticise Members of the other House directly or personally. He has been quoting from reports up until now. If he would desist from directly criticising Members of the other House, I would be very grateful.

[Paul Flynn]

These are not new matters, if I may say so. I have dealt with that matter now.

If the Government fail to act against their own Members, who are not trying to stop the abuses of tax havens but are actually lubricating them, how can we take them seriously? There is some agreement on this, and some pleasure in the House that this situation has happened, because it might expose the corruption that is so endemic and the huge sums disappearing into tax havens. Light has been shone on all that.

I believe that there is a political agenda behind those who have hacked into Mossack Fonseca’s site. We do not know what that agenda is, and it might well be very sinister, but I will repeat my earlier point: one of the curious things here is what is happening with other nations. China has $44 billion in the Cayman Islands and $49 billion in the British Virgin Islands. Those are huge sums of money, but they are only part of the revelations—part is still to come. The reverberations of this pivotal scandal will spread for decades.

I am curious about the Government’s reluctance to act against China in many other ways. We have already done a dreadful and financially disastrous deal over Hinkley Point, which might give us the most expensive electricity in the world, although the deal is now collapsing. The Government seem to want to ingratiate themselves with the Chinese Government. As a result, they are going soft on them in many ways. What is most damaging is that they are not taking sharp action against the undercutting of the steel industry that is affecting so many jobs here.

We have a strange relationship with the Cayman Islands. We provide them with great advantages, by providing their defence for them. The Government’s permissiveness must stop. We will look to the Government to take the tough line that they have promised at the anti-corruption conference. They have not taken it before, so let us see them do it there.

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. I am sorry to have to say that everyone has gone way over my informal speech limit, so I am going to have to impose a formal one, of six minutes per speaker. I hope that people will not take too many interventions.

Budget Resolutions and Economic Situation

Natascha Engel Excerpts

Tuesday 22nd March 2016 Commons Chamber

[David Rutley]

I thank the hon. Gentleman for giving way. I was not seeking to make a point, but I will now. The Chancellor has clearly demonstrated that he has his public finances under control—[Interruption.] The deficit is massively down and he is now in a position to take forward the changes to which the hon. Member for East Lothian (George Kerevan) refers.

[Madam Deputy Speaker (Natascha Engel)]

Order. The hon. Member for East Lothian (George Kerevan) has been on his feet for 15 minutes and is taking an awful lot of interventions—he is very generous like that —but over 40 Members want to speak and I do not think that I am going to get everybody in. If he limits the number of interventions he takes, I will be very grateful.

[George Kerevan]

As ever, Madam Deputy Speaker, I am at your service and the service of the House. I will come to my final point, because I am sure that we will be discussing this at the next Budget in another three months.

The Chancellor talks about living beyond our means. He prioritises the budget surplus. He talks about intergenerational fairness. He says that if we do not get overall national debt down, it will be a burden on future generations. Let us test that and go back to the late 1940s and 1950s, when the national debt as a share of GDP was more than twice what it is now and was coasting at over 200% at one point. For most of the ’50s it was 150%, which is twice what we have at the moment. Where did it come from? It came from Governments, particularly Conservative Governments, borrowing money. Most of the rise in national debt did not come during world war two, but during the late ’40s and early ’50s as we tried to rebuild Britain’s infrastructure following the depredation of the war. Harold Macmillan was building a million houses a year. We invested and the national debt was pushed up.

Here is the thing: if huge national debts weigh heavily on future generations, let us look forward. What happened to baby boomers such as the right hon. and learned Member for Rushcliffe and me? Our generation has houses and pensions. We have benefited from state-funded investment in national infrastructure. The whole notion that investing and running up a budget deficit places a burden on future generations is not historically true. Did the economy grow fast in the ’50s and early ’60s? Yes, it did.

Here is my final point and my message for the Chancellor to reflect on: when trying to control public spending, what matters is what it is spent on. Harold Macmillan and the Conservative Governments of the 1950s invested in infrastructure. This Chancellor is borrowing to invest in current spending, which gets blown away by the wind, and if we do that, we fail. It is no wonder that the Chancellor wants his rendezvous with destiny in 2020. He wants to pretend that he can run a budget surplus. It may never happen. Even if it does for one year, it is unsustainable. The Chancellor does not understand business or how the economy works. He pretends he does and talks a good game, but he has not delivered productivity, which is the core thing that we need in this country.

Budget Resolutions and Economic Situation

Natascha Engel Excerpts

Wednesday 16th March 2016 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. Before I call the next speaker I am going to have to drop the time limit on speeches to eight minutes, with immediate effect.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. I am afraid that the time limit is now down to seven minutes.

Enterprise Bill [Lords]

Natascha Engel Excerpts

Wednesday 9th March 2016 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. Hon. Members can see how many people want to speak and only a little over an hour is left before the end of the debate. If they could keep their speeches very brief, the whole House will be grateful.

[Nadine Dorries (Mid Bedfordshire) (Con)]

I rise to speak because if I said this in an intervention, I would test the patience of the House by speaking for too long.

When I first arrived in the House, I was told by a veteran that in the House were good men, clever men and those with good grace. I want to pay tribute to the Minister, who has somehow managed to climb the greasy pole while embodying all three qualities. As Members on both sides of the House know, he is an incredibly hard working Minister for Housing and Planning. When were in opposition, I was always quick to praise Labour Ministers, including those who once held a similar position. I will forgive him for the fact that he is sending notes to love bomb the waverers.

I also pay tribute to my hon. Friend the Member for Enfield, Southgate (Mr Burrowes). It would have been a shock, from what I know of his 11 years in the House, if he had not led on this amendment today. He is a man of huge principle. Those of us who have been in the House during those 11 years and have heard him speak with huge conviction on such issues will understand why he has led on this amendment and why so many of us support him.

This whole issue is rooted in devolution, the natural direction of which is towards localism. Therefore, at the risk of sounding like the Leader of the Opposition, I want to speak on behalf of my constituents. Mr Kishor Patel was shortlisted for retailer of the year last year. He came to the House of Commons and was the runner-up. He runs Nisa in Toddington in my constituency, where he has opened a number of stores. He is an amazing small retailer. He recently took a derelict pub in my constituency and turned it into a restaurant. He says that he does not want me to support the proposal in the Bill; he wants me to vote against it. His pub is at its busiest, with families enjoying themselves, on Sundays. He is incredibly worried that, if the proposal goes forward and bigger stores can open for longer on Sundays, pubs like his will not stay open for longer, but will fail. It is the business he does on Sundays, when families can enjoy themselves at the local pub, that makes the difference between its being profitable and not profitable.

Mr Patel also does not want me not to support the proposal in the Bill because of the impact on his small high street shops, which are valued by local communities. In my constituency, it is not particularly easy to get out to the big stores, so people depend on small high street stores. However, the situation would be quite different if the big stores were open all day, because people would make the effort to go out to the bigger stores or to travel into London, and that would have a huge impact on local shops in Mid Bedfordshire.

I want to declare an interest in that my family owned a local shop. The hon. Member for Worsley and Eccles South (Barbara Keeley) mentioned the Trafford centre. When that opened and got busy, the family local shop stopped opening on a Sunday and began to suffer as a result. It is a known fact that small high street shops must constantly go the extra mile to compete with the big stores. They do not have the resources to man their stores seven days a week—and seven nights a week, because the paperwork, the ordering, the PAYE and so on is done while the shop is closed, not when it is open.

This proposal was not in our manifesto. The Bill began in the Lords, not in this House, and the policy has never received sufficient public discussion. If we want to do this, let us put a measure in the Queen’s Speech and let the public know about it properly, and let us have a full consultation and a public debate.

Equitable Life

Natascha Engel Excerpts

Thursday 11th February 2016 Commons Chamber

[Madam Deputy Speaker (Natascha Engel)]

Before I call Bob Blackman to move the motion, I must tell the House that we have two very heavily subscribed Back-Bench debates. In the first debate, we will start with a time limit of five minutes, and in the second one, the limit will be four minutes. With that in mind, I call Bob Blackman.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Quite a few people have not turned up whose names were on the list, so I am revising the speech limit up to seven minutes.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. Before I call the next speaker, may I remind Members that they are speaking through the Chair, so when the hon. Lady says “you”, she is speaking directly to the Chair?

--- Later in debate ---

[Bob Blackman]

I thank hon. Members and all three Front-Bench speakers for the constructive and fair way in which the debate has been conducted. Almost 2% of the population have been affected by this scandal, and we have a duty to ensure that they are given full compensation for the loss they have suffered.

I thank the Minister for laying out his argument, and I thank those who have contributed on the personal views of different constituents. I listened carefully to the Minister, and the Treasury accepts that the compensation bill for Equitable Life policyholders is £4.1 billion. Of that, £1.5 billion has been paid out, which leaves a balance of £2.6 billion.

The Minister rightly said that compensation payments will be made well into the next decade for those who have suffered loss. It therefore seems reasonable to me and, I think, to Members across the House—the Chancellor will no doubt be listening to this—that as the economy recovers, our long-term economic plan comes to fruition and we reach a position where the budget is in balance, those who have saved for their retirement are given full and proper compensation.

As the economy recovers, therefore, the Government can top up the scheme if they choose to, and I urge the Chancellor to pledge to do that in his Budget speech on 16 March. As we reform pensions in other ways, we can then send out the signal to young—and not so young—people that it is right to save for the future and for retirement and that if such a scandal were ever to happen again, the Government would step in to protect the retirement incomes of those who do the right thing and save for their old age.

Question put and agreed to.

Resolved,

That this House congratulates the Government on providing a scheme to compensate victims of the Equitable Life scandal; welcomes the Government’s acceptance of the Parliamentary Ombudsman’s findings in full; notes that the Parliamentary Ombudsman recommended that policyholders should be put back in the position they would have been in had maladministration not occurred; further notes that most victims have only received partial compensation compared to the confirmed losses and that the compensation scheme is now closed to new applicants; and calls on the Government to ensure that the entire existing budget allocated for compensation to date is paid to eligible policyholders and to make a further commitment to provide full compensation for relative losses to all victims of this scandal.

[Madam Deputy Speaker (Natascha Engel)]

Order. Before we come on to the next debate, I inform Members that I am going to raise the speech limit on Back-Bench contributions to seven minutes, in order that they are aware that they have a little more time than is shown on the annunciator.

EU Referendum: Timing

Natascha Engel Excerpts

Tuesday 9th February 2016 Commons Chamber

[Madam Deputy Speaker (Natascha Engel)]

Order. May I just remind the hon. Gentleman that he is speaking through the Chair?

[Danny Kinahan]

I apologise, Madam Deputy Speaker.

It is very important that we keep the Union in mind when we take our decisions in the future. In a poll last week, 42% said they are for leaving and 38% said they are for staying. It saddens me that they have already made up their minds, but we have not even got the facts. I want to use an analogy that is slightly different from the escalator one. I am a sci-fi fan: I am a “Doctor Who” fan and perhaps even a Trekkie. In wanting to make a decision, it is rather as though all those who want to leave are charging into the Tardis—hon. Members will remember that it did not know whether it was going backwards or forwards, where it would land or anything else—so we are going into the unknown. I want the electorate to understand what they are voting for. That is why I am asking for a delay. I hope that Members will keep the Tardis in mind. If I may mix my metaphors or even sci-fi series, this is about boldly going where no man has gone before.

--- Later in debate ---

[Alex Salmond]

rose—

[Madam Deputy Speaker (Natascha Engel)]

Order. The Minister has said that he will not give way.

[Mr Wallace]

It is absolutely right, as the hon. Member for North West Durham said—

[Alex Salmond]

On a point of order, Madam Deputy Speaker. The Minister is summing up from the Front Bench and he has made a direct reference to another Member. Is it not a matter of courtesy and respect in those circumstances to give way to that Member? Is not this typical of the lack of respect, not just to Members—

[Madam Deputy Speaker]

Order. That is not a point of order. It is a point of debate.

--- Later in debate ---

[Alex Salmond]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker]

This had better be a point of order.

[Alex Salmond]

It is. It is a matter of record that I conformed exactly to the Speaker’s advice during my speech. Would the Minister like to withdraw his no doubt inadvertent misleading of the House?

[Madam Deputy Speaker]

That is also not a point of order. This has been a good debate and people have had plenty of time to make their speeches, but the Minister has only one minute left. He has said that he will sit down at that point in order not to talk out the debate.

[Mr Wallace]

I think the right hon. Gentleman’s not wanting to listen demonstrates why he lost the referendum in Scotland.

The debate will now have to be curtailed, but the reality is that Members on both sides of the House want to trust the people. This Government have heard what has been said. No date has been picked, and no doubt all the contributions will weigh on the mind of the Prime Minister when he makes the decision on the date of the referendum. It is important that everyone engages in the debate on Europe in a positive way, whatever their view on it. I agree with some of the Members who spoke. It is important that people understand that the electorate are perfectly capable of distinguishing between elections for the Scottish Parliament and the Northern Ireland Assembly and the EU referendum.

Finally, on the point about purdah, the law states clearly that the devolved institutions may continue to discuss their domestic agenda without purdah. They can launch their manifestos and make announcements about hospitals and schools, and that will not be affected. Only on the issue of European membership will purdah come into effect, so they can carry on and have the debate. They can implement their legislative programmes and at the same time have a healthy debate about Britain’s future in Europe.

Question put.

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

On a point of order, Madam Deputy Speaker. Can you confirm for the House whether the Secretaries of State for Northern Ireland, for Scotland and for Wales voted in the Division and, if so, in which Lobby?

[Madam Deputy Speaker (Natascha Engel)]

I am afraid I cannot do so at this short notice but, as the hon. Gentleman knows, it will be a matter of public record shortly when Hansard publishes the results of the Division.

Bank of England and Financial Services Bill [Lords]

Natascha Engel Excerpts

Monday 1st February 2016 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. Before I call the Chairman of the Select Committee, may I remind Members that there are 12 Members wishing to speak in the debate, and that there is an important Backbench Business Committee debate to follow, so if everybody restricts themselves to 10 minutes, including interventions, everybody will get in, and we will have plenty of time for the Back-Bench debate. To set an example, I call the Chairman of the Treasury Committee, Andrew Tyrie.

--- Later in debate ---

[Madam Deputy Speaker (Natascha Engel)]

Order. Let us see whether the SNP spokesperson can give us a better definition of what constitutes 10 minutes. I call George Kerevan.