Defence in Scotland after 2014

Debate between Penny Mordaunt and Thomas Docherty

Tuesday 18th March 2014 Commons Chamber

[Thomas Docherty]

My hon. Friend is entirely correct. He is as perceptive as ever, because I was about to come to that point. Without that deep maintenance work, the Babcock business case is destroyed. Last week, Babcock’s industrial unions warned that 800 job losses would result. I pay tribute to the full-time convener, Raymond Duguid—one of my hon. Friend’s constituents—for his work and for the productive way in which the work force at Rosyth dockyard engage with the management. They are all on the same side; they all want to serve the customer, the nation and the Royal Navy. They have a shared concern, which it is important to highlight. Again, it is disappointing that not one SNP Member could be bothered to turn up for this important debate.

The work force and management have made it clear that there will be significant job losses, which will place the long-term viability of the yard under threat. I hope that the Minister will set out the Ministry of Defence’s vision for the future of the defence industry in West Fife. In the neighbouring constituency of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath, there is a BAE Systems plant at Hillend, which makes parts for the Typhoon aircraft. In addition, my hon. Friend the Member for Glenrothes (Lindsay Roy) has Raytheon, a significant employer, in his constituency.

I commend the work of the House of Commons Defence and Scottish Affairs Committees, which have both looked at the implications of independence. Both Committees’ reports are useful, worthy and thoughtful pieces of work, and it is fair to say that they have reached similar conclusions. Many high-tech, specialised electronics companies such as BAE Systems and Raytheon would not be able to stay in Scotland unless specific guarantees were provided to the rest of the UK Government. So far, it has been clear from the SNP’s utterances that that is unlikely to happen. At a time when we are all pulling together and trying to secure, for example, new orders for the Typhoon in the middle east—we still hold out hope that we will also be successful in India and in Europe—it is slightly bizarre that the SNP is not engaging in a positive manner to help to secure those jobs in Scotland.

We cannot possibly discuss industrial strategy in Scotland without talking about the future of the Clyde. Incredibly difficult decisions had to be made, as part of the terms of business agreement, about the future of Portsmouth and the Clyde. I know how passionate people on the south coast are about the region’s, I think, 400-year history of shipbuilding, but the decision has been made to build the Royal Navy’s Type 26 frigate on the Clyde. We are seeing that arrangement developing, with the process of ensuring that Scotstoun, in particular, is ready to take on the work.

The SNP’s White Paper is a load of fiction. It says not only that an independent Scotland would buy the Type 26 but that the rest of the United Kingdom would build its Type 26s in Scotland.

[Penny Mordaunt (Portsmouth North) (Con)]

I thank the hon. Gentleman for securing this debate. Is he aware that the commercial sector has expressed considerable interest in building ships in Portsmouth? We have proved that we can compete not only with Scotland but with Dubai and with other shipyards around the world. Our shipyard facility and a skilled work force would stand ready to pick up orders for offshore patrol vessels, Type 26s and beyond if Scotland became a foreign country, as we would clearly wish to retain our sovereign capability.

[Thomas Docherty]

I am grateful for that helpful intervention, which demonstrates something that the SNP will not acknowledge—namely, that there are and will continue to be alternatives to the Clyde. It is absolute nonsense to suggest that English MPs with shipyards in their constituencies would simply say to the Ministry of Defence, “Go on, give that multi-million pound order to another country, even though we have pressing needs in our own yards.” There is no way that English MPs would do that, be they in Plymouth, Appledore, Portsmouth or Barrow—or, indeed, on Tyneside. And how could we forget the Jarrow yard or the Birkenhead yard? There is no shortage of space for these construction contracts.

Scottish Football (Tax Liabilities)

Debate between Penny Mordaunt and Thomas Docherty

Wednesday 29th February 2012 Westminster Hall

[Thomas Docherty]

The hon. Gentleman is absolutely right. I see that the hon. Member for Portsmouth North (Penny Mordaunt) is in the Chamber. She has championed that model for Portsmouth FC, so perhaps she will be tempted to contribute to the debate. There are some good examples of that model in Scotland. I referred earlier to Brechin City which, as hon. Members may know, had on its board Mr David Will, the FIFA vice-president for the British Isles, and a local lawyer, steeped in Brechin City. There are successful models of clubs, both large and small, where the shareholders are the fans. I hope that the Treasury will look at ways of trying to ensure that a fit and proper person test means not only that liars such as Mr Whyte are not put in charge of clubs, but that we can all have comfort in club finances for the future.

[Penny Mordaunt (Portsmouth North) (Con)]

I congratulate the hon. Gentleman on securing the debate, which I am attending as a Pompey supporter, so I share his pain and that of other hon. Members. We too have been badly let down, but I hope that the supporters’ trust will soon have a financial stake in the club.

Does the hon. Gentleman agree that when Her Majesty’s Revenue and Customs deals with clubs in such situations, it is important that it considers the club as a distinct entity, and does not tar it with the sins of the whole football community going back over many years? That has been my experience of the way that HMRC dealt with Portsmouth, and I would like to put on the record my thanks to HMRC staff, and to the Minister for facilitating dialogue. I hope that Rangers and other clubs have similar success.

[Thomas Docherty]

I am grateful to the hon. Lady for those comments. She has been a staunch champion of Pompey’s interests, and I know that she badgered the Minister on more than one occasion to ensure that the club got a fair hearing. She is right to say that each club needs to be considered on its own merits, and I will perhaps return to that point during my remarks.

Thanks to the Scottish press, which has been assiduous in trying to get to the truth of this sorry affair, it has been particularly disturbing to discover in recent weeks that HMRC has been engaged in a long-standing battle with Rangers over what the Treasury believes, and I believe, is a tax-avoidance scam instigated by David Murray. If Rangers lose this ongoing court case, it has been estimated that the club will owe HMRC somewhere in the region of £45 million in unpaid taxes from over the past decade.

On 9 January 2012, shares in Rangers were suspended from trading on the PLUS stock exchange for failure to submit audited accounts—alarm bells should have rung at that point. Mr Whyte, however, dismissed it as unimportant because he was by then, he argued, the dominant shareholder. On 5 February, Rangers were knocked out of the Scottish cup by Dundee United at Ibrox. On 11 February, Dunfermline hosted Rangers in the Scottish premier league. Finally, after months of speculation, on Monday 13 February, Rangers lodged their intention to enter administration at the Court of Session. Mr Whyte told reporters that, in his estimation, the club’s final tax bill could amount to £75 million—an astonishing amount. The following day, the club appointed Duff and Phelps as administrators. The SPL deducted 10 points from Rangers, which left them 14 points behind Celtic.

Rangers entering administration has not simply changed the dynamic of the title race but has had a devastating impact on three groups of people: first, the staff—both playing and non-playing—of Rangers FC; secondly, the companies that are owed money by Rangers as creditors; and thirdly, the other 11 members of the Scottish premier league, which is the group that I wish to raise with the Minister today.

No one should have anything other than sympathy for those who face losing their jobs at Ibrox, in particular those who work behind the scenes and are not millionaires, and who will not easily find employment in the current economic climate.

There are two distinct yet equally important categories of club. Two clubs in the SPL have claimed that they are owed money by Rangers for ticket sales, and I will explain their situation for the benefit of the House. Under the rules of the Scottish Football Association and the SPL, the total gate receipt for a league game belongs to the home club. It is standard operating practice for the away club to sell tickets for their end of the ground, but under the rules of the league, that money must be paid to the home team within seven days of the fixture taking place, minus any pre-agreed handling fee. The money is not the property of the away team, which is merely the handling agent.

For games in the Scottish cup, however, ticket sales for the whole ground are split equally between the two clubs, minus any operating costs, and the home team get to keep any proceeds from hospitality, refreshments, or programme sales. Under SFA rules, the two teams that have sold tickets do not have any right to count those ticket sales on their balance sheets, as they are merely holding agents and the money is to be put into the pool of gate receipts for the cup tie as a whole. In other words, the two clubs are merely acting as agents; it is not their money.

When Rangers entered administration, the club and its administrators, Duff and Phelps, refused point blank to hand either amount of money to Dundee United or Dunfermline, arguing that it should go into the pot of credited money. Let me be clear and send a message to Rangers’ administrators: that money does not belong—and has never belonged—to Rangers. Holding on to it is not only morally wrong, it is nothing short of theft.

What makes matters worse is that members of the Rangers board of directors were in the directors lounge at East End Park on the Saturday in question. They looked their counterparts in the eye, and told them that on Monday the money would be transferred to Dunfermline Athletic by BACS payment. It is utterly inconceivable that on that Saturday afternoon, the board of directors, which included Mr Ali Russell, did not know that on Monday afternoon they would be filing papers with the Court of Session. For the two clubs involved, despite the support of the SPL and the SFA, it will probably take months to recover the money to which they are legally and morally entitled from Duff and Phelps.

The second category of club involves any club in Scotland—or elsewhere—that has entered into financial transactions with Rangers, for example over the transfer of players. We know that at least one club, Heart of Midlothian, stated that it is owed close to £1 million for the transfer of a player to Rangers. It is in a more complicated situation—one that you will be familiar with, Mr Betts—concerning the rule of football first creditors. As I understand it, Scotland does not have the same rules as England about football first creditors, but that is an issue of ongoing legal dispute between the clubs, HMRC and the creditors.

It is more than likely—in fact, I have been led to believe—that other clubs, which I will not name because they have not asked to be named, are also owed money for various transactions and are in a similar situation to Hearts. As you will see, Mr Betts, these are not insignificant sums, particularly given the parlous state of Scottish football as a whole. Scottish football faces several months of uncertainty and disruption while the financial affairs of Rangers are sorted out.

Before I set out what HMRC should be doing going forward, it is worth reflecting on its role in allowing the situation to occur in the first place. In recent months, every Member of the House will have been visited by the owners of local businesses, asking for assistance in working with HMRC to deal with short-term cash flow challenges. The sums involved are often not large. However, HMRC is not exactly known for adopting a sympathetic or flexible approach to assisting local companies with problems.

Indeed, the Minister will probably recall correspondence between him and me before Christmas about one of my local businesses, which despite many years without a single missed or late payment, had experienced a short-term problem and found HMRC to be unbending and—dare I say it?—uninterested in its problem. People can imagine the surprise felt by those businesses, many of which have contacted me in recent days, when we learned that HMRC had not received any payment from Rangers for pay-as-you-earn or, apparently, VAT since last May and that the sums for PAYE and VAT have now reached, according to the Scottish press, some £15 million.

I am not criticising HMRC per se for the decision not to require payment from Rangers. I do, however, believe that it is wrong that the club has been treated differently from not only any other club in the league, but thousands of small and medium-sized businesses in Scotland. There are serious questions that require proper answers, and I hope that the Minister can provide some of them today.

First, it is inconceivable to everyone, frankly, given the sums and the time period involved, that HMRC allowed this situation to develop unilaterally. Can the Minister confirm to the House whether any UK Ministers were aware of the size and severity of the non-payment by Rangers, and whether any discussions took place among UK Ministers and between Ministers and HMRC about possible courses of action? Will the Minister also confirm whether any representations have been received from the Scottish Government, either before or after Rangers went into administration, on the issue of its tax liabilities?

As I said, I do not criticise the decision of HMRC not to force payment of moneys due. However, I believe that given the knock-on effects on the other 11 clubs and the fact that the integrity of the Scottish premier league season itself is now at risk, HMRC must take proactive steps to support the other 11 clubs. In short, I would like HMRC to carry out the following actions, and I would be grateful for the Minister’s confirmation that HMRC will indeed do so. HMRC should now proactively contact the other 11 clubs to establish what financial liabilities they have as a result of Rangers going into administration. HMRC should then work constructively and sensitively with the clubs and the SPL to ensure that none of the other clubs is unable temporarily to meet their obligations to the taxpayer.

To be clear, I believe that it is right and proper that by the end of the season, all 12 clubs should meet all their financial obligations to HMRC and the taxpayer, but they need to be given the breathing space to sort out the sorry mess created by Mr Craig Whyte. I urge the Government to ensure that all the other 11 clubs pay in full the sums owed to HMRC by the time of the last whistle at the end of the season, but that individual packages of payments can be tailored so that financial penalties are not incurred by them as a result of the actions of another—indeed, the largest—club.

I would be grateful if the Minister could also set out what contact he has had, if any, from the Scottish Government since Rangers went into administration to offer assistance to the clubs or to the SPL to meet their obligations. I would be grateful if the Minister could meet me in the coming days if there are any questions that he feels unable to answer in a public forum, so that we can further discuss the crisis in Scottish football.

Aircraft Carriers

Debate between Penny Mordaunt and Thomas Docherty

Monday 1st November 2010 Commons Chamber

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I pleased that the question of how our new Queen Elizabeth class aircraft carriers are to be maintained has attracted such widespread interest in the House. My constituents and everyone in Fife can only be reassured by the keen interest shown by right hon. and hon. Members on both sides of the House in this important issue. I hope that the House will consider this important matter seriously and sombrely.

For the benefit of hon. Members who are present, it might help if I explain why this debate is so important, not just to west Fife, but to the wider defence establishment and, indeed, to our national interest. Only two functioning dockyards in western Europe are big enough to take the Queen Elizabeth class carriers: Rosyth dockyard in my constituency and the one in Brittany, France. I hope that the turnout tonight shows the widespread support for the Government to choose the UK dockyard and to support UK jobs and the defence industry.

Rosyth dockyard has a long and proud tradition of supporting our Royal Navy, and of returning warships to active service in prime condition on time and on budget. The House may recall that at the outbreak of the Falklands conflict in 1982, Rosyth dockyard worked night and day to ensure that the taskforce was able to sail south in the best possible condition.

[Penny Mordaunt (Portsmouth North) (Con)]

The Falklands conflict is a good example to show the importance of operational readiness and the stress that will be on the carriers. Does the hon. Gentleman agree that that means that the bulk of maintenance work will have to be done in their home port of Portsmouth, and is that why the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) told my constituents that they would be based there?

[Thomas Docherty]

I am grateful for the hon. Lady’s comments, but she obviously needs to work on her pronunciation of my right hon. Friend’s constituency. It is absolutely right that Royal Navy warships receive the best possible care and maintenance, and I hope that she will join me in urging her Government to back UK jobs and the UK’s defence industry.

We would never wish to see events such as the Falklands repeated, but—to pick up on the hon. Lady’s point—I believe that it is a matter of national importance that the United Kingdom retains the capability to send the Royal Navy’s flagship into operations in the best possible condition. We have highly skilled, highly trained staff at Rosyth, and I want to pay tribute not only to the management and work force but to the local schools and colleges that provide excellent training and support.