Cerberus Capital Management: Purchase of Distressed Assets

Debate between Patrick Grady and Roger Mullin

Wednesday 22nd February 2017 Westminster Hall

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

It is a pleasure to serve under your chairmanship once again, Mr Owen. Thank you for inviting me to take my seat on the Front Bench.

We all owe a great debt to my hon. Friend the Member for East Lothian (George Kerevan) for securing this debate, especially the companies that have been driven to the wall or destroyed by the actions of Cerberus. I know that some of those companies are represented in the Public Gallery today; I hope they find that we have done justice to their cause. My hon. Friend certainly has.

[Patrick Grady (Glasgow North) (SNP)]

I have a constituent who was affected by the behaviour of the Royal Bank of Scotland’s global restructuring group. Does my hon. Friend agree that there is a huge lack of trust in such major institutions, particularly RBS, which is largely owned by the public purse? It falls to the Government to get a grip on the situation and take the necessary actions that my hon. Friend the Member for East Lothian (George Kerevan) outlined, so that public confidence can be restored and some of the businesses affected can have some hope of restitution.

[Roger Mullin]

I agree wholeheartedly. Indeed, in a debate on a related issue last week, I raised the fact that many people and small businesses will find it extraordinary that banks such as RBS have no duty of care towards the customers they deal directly with. Given all the tales of misery caused either by the banks directly or by Cerberus, surely we need to ensure that there is proper regulation and a proper duty of care towards those who suffer at the hands of such institutions.

European Union (Notification of Withdrawal) Bill

Debate between Patrick Grady and Roger Mullin

Committee: 2nd sitting: House of Commons
Tuesday 7th February 2017 Commons Chamber

[Patrick Grady]

My hon. Friend is absolutely right. This is exactly what we are trying to achieve.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

In response to the right hon. Member for Surrey Heath (Michael Gove), I would say that it was because of the failure of UK economic policy that after my brother graduated as a scientist he was forced to emigrate to Canada. He eventually became the chairman of the OECD science and technology committee and helped to write the science and technology policy for the free South Africa, yet the failure over here forced him to emigrate.

[Patrick Grady]

My hon. Friend makes an absolutely valid point.

Amendment 61 calls for a revised national security strategy. The existing national security strategy is based on a 2015 assessment that took no account of Brexit—[Interruption.] I am not sure what Government Members are so concerned about. It is completely legitimate for Opposition Members to table amendments to the Bill and it is perfectly right and proper that we have the opportunity to debate them.

Double Taxation Treaties (Developing Countries) Bill

Debate between Patrick Grady and Roger Mullin

2nd reading: House of Commons
Friday 16th December 2016 Commons Chamber

[Roger Mullin]

I can tell this is going incredibly well already.

One thing I wanted to say at the beginning of my speech was that, being who I am, I could have been very disappointed in the raffle, but here I am with 45 minutes or thereabouts to discuss my private Member’s Bill. Most Members would be keen to get a full hearing and a vote, but I know that that is not going to happen with this Bill. However, I could not be prouder than to have my Bill considered following the one that this House has just chosen to accept. [Hon. Members: “Hear, hear.”] I am sure that there are many people who feel the same.

I come back to my experiences in different parts of the developing world. In the agencies I worked with over the years, I came across many people who, although they were devoted to helping alleviate poverty and engage in capacity building and believed in the need for aid—many had worked in this field for many years, including a great friend of mine from Lossiemouth called David Thomson, who has worked in more than 60 countries—they also passionately believed that we would never cure the problem until we liberated those countries so that they could better take care of their own resources.

What do we know about international taxation treaties or double taxation treaties? They are set up for firms, such as UK firms, that operate in a developing country but are headquartered in the UK. They are often called double taxation treaties because nobody wants a company to be taxed twice on the money it earns. So these treaties were set up—in many cases, many years ago—to try to prevent double taxation.

However, over the past 10 to 15 years, what we have seen developing are not treaties that allow companies to be charged in just one place, but treaties that are part of an arrangement that allows too many international and multinational corporations to avoid paying tax in any country. We want to find ways in which we can assist countries in the developing world to take responsibility—to take care of their own taxation system and to invest taxes in their own society as they see fit, thereby building a capability that means they are no longer dependent on traditional aid.

[Patrick Grady (Glasgow North) (SNP)]

I warmly congratulate my hon. Friend on bringing forward the Bill. Does he agree that one country that could really benefit from being able to mobilise its own domestic resources through taxation is Malawi? He spoke about treaties being agreed some time ago. The treaty currently in place between the United Kingdom and Malawi is in fact between the United Kingdom and the colony of Nyasaland, because it was signed before the country achieved independence—something, of course, that we in Scotland hope to do eventually as well.

--- Later in debate ---

[Roger Mullin]

I was unaware of that case, but there is a parallel. When I was first asked to go to Namibia shortly after its independence to meet members of the Government in the large fishing port of Walvis Bay, they asked me and the others who were there to do a study on how they could Namibianise, as they called it, the fisheries sector. We asked why that was a priority, and they said, “We have one of the richest fishing grounds in Africa, but we’ve been under the apartheid regime of South Africa and that form of colonialism for years. There isn’t a single company in Walvis Bay owned by Namibians, and more than 90% of the people employed in the whole sector are non-Namibians.” The Namibian Government eventually took control and Namibianised the entire fisheries sector within 10 years, and it was more productive afterwards. It was a great success. Perhaps we tend not to hear about the successes where Governments in Africa and elsewhere take control and make a real difference for themselves.

I passionately believe that if we could liberate these countries to have more control of their own economies and taxation systems, that would move them away from any culture of dependency that some people say they have. It would be more liberating for them and better for everyone all round. I could be wrong, but I believe that it would be a better way, in the longer run, to achieve everyone’s objective of removing the scourge of the type of poverty that exists in these countries, with which we are entirely unfamiliar in the United Kingdom.

[Patrick Grady]

I thank my hon. Friend for giving way again; he is being very generous with his time, as he is in so many aspects of his conduct. One country in central Africa, the Democratic Republic of the Congo, should be one of the richest countries in the world. We all carry a little bit of the DRC around with us in our pockets because that is where the coltan that makes our mobile phones comes from. Yet because of the factors he is describing, it is one of the world’s worst conflict zones. Does he agree that effective tax treaties would not only mobilise resources for Governments in such countries to invest in the development of those countries but help to strengthen their governance, bureaucratic and civil service structures, which would in itself provide stability and development?

[Roger Mullin]

I agree entirely. I will respond to that with a slight oversimplification. Let us look at it in this way. If a country has become solely dependent on aid funding for its development and does not have full control of its own taxation and its own mineral resources, what kind of governance structure is set up to accommodate that? It will be about people chasing aid funding, not developing and liberating themselves economically. In some countries, quite a large of part of their administration and democracy is based on managing aid-related matters much less than on managing its own taxation and related matters. Therefore, the infrastructure will benefit through such moves.

I think that the Bill will provide a further advantage for the United Kingdom Government. In another field, I have been trying to persuade the Government to respond to my representations about international criminal activity in Scottish limited partnerships. I am delighted to see that the Financial Secretary is present to respond to the debate, because last week we had what I thought was an extremely constructive meeting about the issue. We recognised that to address the issue of Scottish limited partnerships we had to involve not merely the Treasury but the Home Office and its Criminal Finances Bill, as well as the businesses that would be conducting a consultation. Three different partners would need to be brought together, so that we could begin to create a joined-up approach.

What I am saying, and what my simple Bill is saying, is this. Would it not it be a good idea if those who are responsible for negotiating tax treaties with countries in the developing world had to take reasonable account of our own Government’s international aid policy, because otherwise the Government’s international aid policies, and what they want to achieve in that regard, could be countered in a negative way through the negotiation of tax treaties by others who do not support those aims? It must surely be helpful to governance here, as well as in other countries, to create a system that is much more joined-up. That is surely in everyone’s interests. Who is going to argue against it? Well, my hon. Friends and I can probably predict who, but it seems to me that no rational person could object to a Government’s pursuing their aims in a joined-up and rational manner.