NHS Pensions: Taxation

Philippa Whitford Excerpts

Monday 8th July 2019 Commons Chamber

[Elizabeth Truss]

My right hon. Friend makes an interesting point. In general, I am in favour of lower taxes and a simpler tax system that always rewards those who go out to work.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Tapering lifetime allowances have already driven many senior doctors out of the NHS in their late 50s. The issue now is the tapering annual allowance, which is reduced by £1 for every extra £2 earned. This issue was raised in 2017; it has not just come to light. In May, the Chancellor talked about a threshold of £150,000, yet the problem kicks in at £110,000, and many senior consultants and GPs earn above that. The average extra bill is £18,500, but many have faced tax bills of almost £100,000. The British Medical Association survey shows that three quarters are citing this as a reason to retire. At the moment all income, including non-pensionable income, is included. That does not make sense, so can that be changed? It is not just earnings, but the growth of a pension, yet people might not live long enough for that to be income, so why is it counted? The BMA does not think that the 50:50 approach will solve the issue, so will the Treasury have open consultation and, because this is about interaction with the pension system, look at all the options? Otherwise, we will face a workforce meltdown.

[Elizabeth Truss]

As I said, the consultation will be launched fairly soon—the Health Secretary is looking at that—and people will of course be able to feed their views into it.

Santander Closures and Local Communities

Philippa Whitford Excerpts

Thursday 14th February 2019 Westminster Hall

[Jim Shannon]

I thank the hon. Gentleman for his intervention, and I commend him for his industry and for the fact that he will be there on Saturday. He will have no bother getting the signatures for that petition; I have no doubt about that whatsoever. However, I hope that Santander is listening to what he says, because that situation clearly illustrates to me that his bank needs to be there and the customers want it to be there, and we are all here for the same purpose. That is the critical issue for me and for others who are here in Westminster Hall today.

I often think that if the Independent Parliamentary Standards Authority can allow my staff members’ names and addresses to be released by accident, or whatever way it happened, what chance does our money have of withstanding banking attacks? That did happen—it was an oversight, it was a mistake, but it still happened. Honestly, that is why I just have this wee doubt about online banking and other things.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I thank the hon. Member for Strangford (Jim Shannon) for giving way; I usually get his constituency the wrong way round. After some of the scandals that we have had with TSB and others locking their customers out of their online banking, is it not the case that for all this digital innovation we are nowhere close to it being reliable?

[Jim Shannon]

The hon. Lady is absolutely right. In my first year and a half here in Parliament, there were a number of banking breakdowns—one would say—within the Ulster Bank. It happened not once, but twice, and perhaps even three times. Honestly, customers could not access their accounts by any means and it was absolutely ridiculous.

I am coming to an end, Mr Davies; I am very conscious of the time. Santander will retain a network of 614 UK branches, with its customers also having the option to bank using more than 11,000 post office sites across the UK. It is very important to have the post office. I have to say that the post offices in my constituency have been geared up to fill some of the gaps—in Ballynahinch, Killyleagh, Portaferry, Kircubbin and in Newtownards town—where there are post offices. Credit unions have also filled some of the gaps; it has been incredibly important to have the credit unions, as well.

I still have a real fear that this consolidation of banks to cities further isolates rural communities and adds to people’s sense of being alone, with no one to talk to and no one to help, and I believe that we are further isolating an older generation, which cannot be acceptable. That is the critical fact for me. I look to the Minister, as I always do, for a comprehensive response to the issues that we are all bringing collectively to his attention today.

I conclude by saying that I believe we must put in place a minimum expectation of service provision for customers, and if we do not ask the financial institutions to step up and step in, the service provision will continue to dwindle, jobs will be lost and the only winners will be the shareholders and those who get the dividends. I believe that reform must take place and that banks must fulfil obligations to people, and not simply to profit margins.

--- Later in debate ---

[Neil Parish]

The hon. Gentleman is attempting to entice me down a route that I do not quite want to go down, but I agree with him in many respects. Post offices provide a great service, and if we are to lose them as well, that is a real problem. However, at this moment in time I am in full flow about the banks, so I ask the hon. Gentleman not to put me off that particular subject.

[Dr Whitford]

I want to pick up on the comment that the hon. Gentleman made about people going to another town. If someone goes to another town on a Saturday morning to get their money, that is where they are going to shop. That is exactly the impact that bank closures have on our small towns and independent shop owners.

[Neil Parish]

The hon. Lady is absolutely right. There no longer seems to be any strategy among individual banks that would allow them to work out that closures affect not only their business, but many others. The more branches they close down, the more they will lose business, and other people will also lose business.

I am privileged to have quite an elderly population in my constituency, and that population is getting older all the time. Many country towns and rural towns in Devon are in the same interesting position, because people are getting older, and older people do not necessarily trust online banking. They like to be able to bank physically: going back to my previous comment, they like to see a person occasionally, not a machine. I am making light of these issues, but they are not really light, because so many of the older generation think that they can never see anybody or get an answer, and that everything is put in their way to stop them getting anything. We are working hard to get broadband and internet connection in rural areas—in particular, in the Blackdown hills in my area, around Axminster—but it is quite difficult. We will get there, but it is taking time.

I would like to see a strategy, not only from Santander but from all of the banks. Can we have a hub? Can we have something that actually works? Can we have a facility to which people can go? Banks might be prepared to let post offices do a certain number of transactions, but they do not like other banks doing them, yet they close their branches down. If they want to keep their competitiveness and—for want of a better way of putting it—their intellectual property rights, they should not close their branches and make it more difficult for the population to transact with them.

As I have said, I support this afternoon’s debate. It is quite difficult for the Minister, because he cannot say to banks, “You must put a branch there and keep it there.” However, what we must do as a Government, and what I ask the Minister to do, is ask the banks generally, “Do you have a policy that means that you look after people, get people into your branches, and create a business model that works and encourages people to bank at Santander, or any other bank that happens to be in a town?” I do not see anything at the moment that is proactive: everything is rather negative, and that is a great shame. It is our older population, in particular, that will suffer.

Businesses also suffer. I probably had too good a relationship with my local bank manager, because he probably lent me too much money, but a person should be able to actually see somebody and get a decision. If someone goes to a bank now, they will not see a manager: the decision will be passed up the line, and they may or may not get an answer. All of this is holding business back, not driving it forward. This is not just about customers, although it is very much about elderly customers: it is about business, and keeping the economy thriving. Those bank closures, and generally making it difficult to get answers about borrowing and other things that keep the economy stimulated, are real problems.

After that, Mr Davies, I feel much better. Thank you very much.

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[Albert Owen]

That is a very strong point, but I think the banks themselves are ripping people off if they are not giving money. Cashzone machines are charging 95p per transaction. Often they are in poorer communities. The Which? research I referred to earlier highlights that almost two thirds of bank closures have been in the poorest areas of our country—those with an average household income of less than £26,000—so the closures affect our poorer constituents.

We need to look for solutions. We have heard a few ideas about financial hubs, for example. I seriously put to the Government the proposition of using Crown post offices, because we need to look for solutions. They are closing down these buildings, which they often own and which often lie empty for some time, as in Holyhead in my constituency. Such buildings could be used as financial hubs.

I am sure my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) will be very happy that I agree with our Labour party policy to re-establish a Post Office bank—a people’s bank—and to have regional banks so that regional business can benefit. We need to go beyond just blaming the banks; we need to have a proper Government policy and framework.

[Dr Whitford]

We used to have the Girobank, and people’s “giro”, as their unemployment benefit or pension was called, used to be paid through it. The Government’s policy is that people receiving social security need to have a bank account. They then get sent back to the post office. Is that not Kafkaesque?

[Albert Owen]

I absolutely agree. The role of the Post Office is important, and the Government are the owner. We are the shareholders, and we need to look at this in the long term. Banks, whether Santander or any of the other major banks, think in the short term; they look at their shareholders and at cutting costs. If we had a people’s bank—a Post Office structure and network across the country that had the same rates—it would be fair and even for all our constituents across the country. They would have better access, and we could invest as a country in the infrastructure and the broadband. In the digital age, it could be as modern as any other bank.

That is the way we need to move. I am pleased that the Opposition Front Bench will agree with me, but I want the Minister, who is very diligent, and who looks for solutions—I am trying to help him in doing so—to stop closing the Crown post offices that we own. He should use them as major financial hubs across the United Kingdom, so that when banks are closed, we do not get bog-standard letters telling us to go to a nearby post office that is also closing down. We need a people’s bank. I say to my constituents who use Santander in Llangefni: “Don’t travel 15 or 20 miles to your nearest post office. Change banks. If Santander won’t stand up for you, stand up for yourself.”

I pay tribute to the staff who work in banks across the country. They are the face of the banks. During the banking crisis, they took a lot of flak. It was nothing to do with them. They are diligent workers, but I am afraid that, when it comes to these large banks, these staff are just pawns in the game. They will lose their jobs, and people will lose their financial services. I want the Government and all of us to work together to stop that.

--- Later in debate ---

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I, too, thank my hon. Friend the Member for Glasgow East (David Linden) and the other Members who supported his bid for this debate. It is great to see this Chamber so busy, as it often is not. That shows the strength of feeling and how much the closures will affect our communities.

The letter that I received was sent to me as a customer. That was the first that I heard that our Santander branch in Troon was closing. I was previously a customer of RBS, and, like some other hon. Members, I moved my custom to Santander. I am not really sure where I am heading next. That is one of 140 closures—one fifth of the Santander network—15 of which are in Scotland. Some 1,300 jobs are now under threat, and only one third are likely to be redeployed. In the meeting, we were told that a third of those staff are looking to retire, get a package and get out. Have those discussions taken place, or is that a presumption?

[Catherine West]

Does the hon. Lady agree that it is inappropriate for an organisation to put staff on to less secure contracts in the knowledge that it will make 1,200 staff redundant, and might need those jobs later? It is not just a slap in the face to customers but to the staff who work hard in those branches.

[Dr Whitford]

I absolutely agree. I pay tribute to the staff in my branch, who were very helpful when we opened our account and are always cheerful. They are not about to retire. They are young working people who are not looking to take a package, but will need a job. They are being made unemployed, and they are deeply shocked by that.

There have been 3,000 branch closures since 2015, 230 of which are in Scotland. Two thirds of branches have been cut since the end of the ’80s. By the end of this year, we will have fallen from 21,000 to less than 7,500 across the UK. That is an incredible change. I totally accept that banking is changing, but, like many others, I use mixed banking. I will use an ATM, go into my branch and do online banking, but it is important that I have that choice. We are talking about choice being taken away.

This change is 20 years too early; we are not yet cashless or online. My mum, who is 84, and most people over 70 are not happy to do banking or any sensitive financial transactions online. My mum has her iPad and can do emails. It is not stupidity. She simply does not trust it. In making this change, we are leaving two decades’ worth of older citizens feeling uncomfortable and like they have had things taken away from them.

When banks move out, they do not leave their ATMs behind, which means that there is less access to cash in community after community, and the ATMs that remain are running out. Troon has already lost three banks. This is our fourth. I went through all this with RBS, which tried to use a unique customer identifier. It told me that only 97 customers a week went into the branch. I found that really strange, because every time I went in, I was in a queue. It only counted people who only went into that branch and went into the branch every single week. As was said, no other business would count custom in that fashion. When I finally got the correct figures out of RBS, that number was 10 times as high. Yet the bank would not reconsider its decision.

Although my hon. Friend the Member for Glasgow East has highlighted the issue of vulnerable people who have poor internet access, in Troon, a place to which many people retire, the issue is the elderly. In the impact assessment, it says that 58% of people have, on at least one occasion, used online, mobile or telephone banking, meaning that 42% have never used those methods. There is no quantification, so we do not know—as the hon. Member for Glasgow North East (Mr Sweeney) said—whether someone simply phoned the branch to ask what its opening hours are or when they could go in to get a statement. The idea that that means someone is suddenly ready to manage all their finances by phone or online is just a fairy tale.

The problem we have is that our elderly population is suddenly being told, as I was assured, that the closest branches are within a 10-mile radius—it is seven miles in one direction and 11 miles in the other—and for most of the elderly who live in Troon, however, that means taking two buses and more than an hour’s journey on a bus that is not frequent, so a visit to the branch could mean a three-hour round-trip. As was highlighted earlier in the debate, that also takes footfall out of Troon’s town centre, because if someone takes the trouble to go to Ayr, the chances are that they will shop in Ayr. They will not come back, go in to the middle of Troon, shop, and then get a bus home. That is gradually killing our high streets.

The access to banking standard and the need for an impact assessment were mentioned. We have all been sent little infographic-laden impact assessments, but it strikes me that they are largely about the impact on the bank. They are not really about the impact on customers, staff or our high street. The hon. Member for Ynys Môn (Albert Owen) mentioned the idea of having a hub. The obvious way to do that would be to bring back Crown post offices, but why do we expect post offices to co-locate with other businesses, but not banks to co-locate with each other or with post offices? It is absolutely vital that communities have some form of safe and secure access to financial services and advice.

Post offices are proposed as the answer to everything, but we cannot use them to open new accounts, carry out bank transfers or, if trying to manage our money, get full bank statements—only a balance. We certainly cannot arrange loans. Many of us used to go into a bank to speak to our bank manager, who was very strict about the income that we needed to obtain a mortgage. Part of what led to the 2008 crash was random decisions to lend people three, four, five, six or seven times their income so that they could get a mortgage, instead of giving them the chance to sit down and talk with someone who could see their financial performance. That applies to business customers who, at the early stages of development, need really personal input from someone who manages their service.

Quite apart from being the answer to all those problems, post offices are struggling financially. Previously, postmasters would get a fee, but funding for that is being cut from £210 million to just £70 million. As this is the fourth bank to close in Troon, all of that work is going to the post office. It has the same number of counters that it has always had, and it had a two-year gap of struggling to find a new postmaster when our previous one was ill and found it frankly all too stressful. In the Which? survey, 42% of those not happy about the move to the post office were concerned about queues. If the post office has the same number of counters but is suddenly doing the work of four banks, queues are inevitable.

Our closest town, Prestwick, has also lost three banks. When I met our postmaster after the most recent closure, he was initially quite positive, because he saw it as a business opportunity. I met him recently, however, and the bank transactions actually take money out of his business. Cash deposits are time consuming and he has had to take on an extra part-time member of staff. He does over 500 extra banking transactions a month and takes in £1 million a month. While Santander charges £7 per £1,000 deposited, the postmaster is paid 37p per £1,000 deposited. The Government subsidy for the 3,000 community post offices that are protected as the last shops in the village will end in 2021. We will literally have dead and empty communities with no access to anything and nothing to maintain footfall in a town centre.

We need to reward and support the post office. Santander is one of the biggest users of post office services, because it makes its business customers deposit cash in the post office. The fee paid to post offices for those transactions is currently being renegotiated. It is critical that that fee be fair, because otherwise we will see the last remaining Crown post offices not redeveloped as banking hubs, but shut down. Frankly, post offices wedged in corners of shops are not always accessible, are often cluttered and do not offer privacy to carry out financial decisions and management.

[Albert Owen]

Is there not an additional risk of going in with one retailer—WHSmith, for example—because many high streets brands are closing down, meaning the whole service could go?

[Dr Whitford]

That is the problem. We almost have that tumbling effect—the work is just passed to someone else, who cannot maintain it, and it is passed on again. It is important that there is a different way of looking at the issue. I agree with the hon. Member for Glasgow North East: it is down the Government to look at innovative approaches across the world, see how such banks are expected to behave in other countries, and, perhaps, to learn from America—not in all things, but in the idea of having regulation to ensure support for financial facilities in all our communities, and not just the leafy streets of middle-class suburban areas.

--- Later in debate ---

[John Glen]

I respect the concern that the hon. Gentleman has raised and I will respond to it.

Before I get into the detail into what I am trying to do as the Minister with responsibility in this area, I want to reflect on some of the facts of changing banking practices. More of us choose to bank online or on an app, but the point made by the hon. Member for Central Ayrshire (Dr Whitford) about a mixed appetite for banking services is important, as is the intergenerational point. Between 2011 and 2016, branch usage declined by 42% whereas mobile banking usage increased 354% between 2012 and 2017. Cash was used in 61% of payments in 2007, but it is projected that by 2027—in just eight years—it will go down to 16%. There is a significant and rapid change.

[Dr Whitford]

I must highlight that 2027 is eight years away. We are talking about elderly people now.

[John Glen]

I was laying out the statistics to show the rapidity of the direction of change. On the point made by the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), we must look at alternative provision. I recognise the point made by the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) about South West Mutual. I will meet Tony Greenham, the executive director of South West Mutual, on 26 February, to discuss regional mutual banking in the era of expansion of alternatives. I will attend the Annual Conference of the Association of British Credit Unions Limited on Saturday 9 March, to look at how to expand the role of credit unions. When I visited Glasgow I met the 1st Class Credit Union and saw its appetite to develop new delivery models. I recognise it is an area we must invest in.

The hon. Member for Plymouth, Sutton and Devonport made the point about learning from overseas; I recognise that is important, too. That is why the Chancellor’s Budget of 29 October included pilots for interest-free loans. We looked at the way credit unions function so they can be given more freedom to develop an alternative presence and range of services. At a micro level, that will sometimes be a relevant alternative to provide for communities in difficulties.

Closure of Santander Banks

Philippa Whitford Excerpts

Thursday 7th February 2019 Commons Chamber

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

The closure in my constituency will be the fourth bank that my town has lost, and the town has a high proportion of retired people who do not bank online or use their phone for contactless payments. My mother will never bank online. It is really two decades too early to withdraw these banks. Their ATMs go, too, so there is a problem for people who want cash in our town.

[John Glen]

I will talk in a few minutes about the ways in which we have intervened to try to find solutions to the circumstances in which the hon. Lady’s constituents find themselves. As I am sure those Members who have spoken are aware, the UK financial services sector is a whole-UK phenomenon, and Edinburgh in particular is important to financial services. The Government want to protect the sector, which is why we do not make the direct intervention that some may be looking for.

The Government firmly believe that the impact of branch closures should be understood, considered and mitigated, where possible, so that all customers, wherever they live, can continue to access over-the-counter banking services. The first step is to ensure that customers feel informed and supported when a branch closes, which is why the Government support the industry’s access to banking standard. All the major high street banks have signed up to the standard, which commits banks to a number of outcomes when a branch closes. First, they commit to give at least three months’ notice of a closure and explain their decision clearly; secondly, they commit to consider what services can still be provided locally, and communicate alternative ways to bank clearly to customers; and thirdly, they commit to ensure that support is available for customers who need extra help to bank online or, where that is not possible, to access services at the local post office. The standard is not just a checklist that banks need to go through; it is about being considerate of customers’ concerns when a branch closes.

In the case of Santander, I am pleased to inform the House that it took a number of steps when announcing the restructure of its branch network. Not only did it proactively contact all customers, as per the requirements of the standard, but it set up a dedicated phone line for customer queries about the changes for the duration of the closure programme. Furthermore, its branch teams will be proactively contacting known vulnerable customers to ensure that they are properly supported and advised on how to continue to bank locally. This includes all customers over the age of 75 who have visited the branch in the past 12 months, as well as those customers who have sight impairments or mobility issues, power of attorney, or are known by the team to be vulnerable. Where needed, this support can include: walking customers to the post office to introduce them to the post office team and demonstrate how they can carry out their banking; introducing them to staff in a neighbouring Santander branch; or helping customers to switch their account to another nearby provider. The teams will also take the time to talk to vulnerable customers about how they bank, changing the frequency of their statements and ordering cash cards, and to demonstrate how to use ATMs and contactless cards.

I acknowledge the point made by the hon. Member for Central Ayrshire (Dr Whitford). My father died a couple of years ago and I have been trying to migrate my mother to do more of this stuff online, otherwise the burden falls to me. I recognise that there are limits to that process but, in this case, a great deal of sensitivity has been shown to help customers to adapt to the new environment.

--- Later in debate ---

[John Glen]

I note the points that the hon. Lady raises but, as I have said to her, I cannot comment on this matter directly from my vantage point in government. However, I would just point out that since 2010, post office branch numbers have been at their most stable for decades, and 99.7% of the national population now lives within 3 miles of a branch and 93% lives within a mile of their nearest post office. I am very sympathetic to discussions of rurality, given the nature of my constituency, and almost 99% of the rural population live within 3 miles of a post office.

The Government believe that too few customers know about these excellent services so, at my predecessor’s request, UK Finance and the Post Office have been working together to launch a five-point action plan to raise awareness of post office banking services. Members may have seen posters in post offices or advertisements for the services in papers, or noticed the Post Office logo on their bank’s leaflets and websites. When I was new to office last year, there were concerns about the execution of that relationship, and I followed up and wrote to both parties to ask for assurances about the delivery of the programme.

The Government cannot reverse the changes in the market and in customer behaviour, nor can they determine firms’ commercial strategies in response to those changes. Today’s debate has focused on the loss of traditional banking channels, but it is important that we do not lose sight of a range of innovations in the retail banking market. They are bringing real benefits to consumers of all types, as I saw for myself on my visit to Scotland last summer.

No matter how the market changes, however, the Government will continue to take positive action to maintain access to vital banking services and ensure that banks support communities across the UK when their local branches close.

[Dr Whitford]

rose—

[John Glen]

I was about to conclude, but am happy to give way again to the hon. Lady.

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[Dr Whitford]

I thank the Minister for giving way.

The banks that have already left my town did not leave any ATM behind. Because of the low fees earned through the LINK system, more and more ATMs in rural locations, particularly across Scotland, are also closing. Many people are not remotely ready to live in a totally cashless system, so is there anything that the Government can do at least to ensure that there are ATMs in every community?

[John Glen]

I am grateful for that intervention. The Government recognise that widespread free access to cash remains extremely important in the day-to-day lives of many people up and down the country, and LINK, the UK’s cash machine network, is committed to maintaining free access to cash through its extensive footprint of ATMs. The Government set up the payment systems regulator to ensure that the UK’s payment systems work in the interests of their users. The regulator is closely monitoring the situation and holding LINK to account for its commitments to maintain the broad geographic spread of ATMs across the UK.

I draw the attention of the House to the debate to which I envisage I will be replying next Thursday. I hope that it will give hon. Members an opportunity to make further points, which I will be happy to take on board.

Question put and agreed to.

Finance (No. 3) Bill

Philippa Whitford Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Helen Whately]

I thank the hon. Lady for her intervention, but we should be a little cautious about assessing a particular bit of policy in isolation without considering other policy areas, because that might result in false information. For instance, if we examined a specific bit of Government spending, it may appear to be doing a fantastic job, but if we do not consider the counter-effect and the money that is being taken away from people elsewhere, it does not provide the whole picture and might lead to poor policy decisions.

I want us to look at the overall impact of Government policy in the round. For example, we should look not only at the impact of raising the personal tax allowance, which is positive because it enables people on low incomes to retain more of what they earn, but at where the Government are investing money. For health inequalities, we should look harder at the extra £20.5 billion going into healthcare and the impact of the NHS long-term plan, published yesterday, which has a particular focus on directing funding to reduce inequalities and increasing funding for primary and community care. Those things will particularly help those in the most deprived areas and those with some of the worst health outcomes.

I know that it is enormously controversial, but universal credit—I will probably get booed by the other side of the Chamber—is helping people into work and is doing so hand in hand with an economy that is strong overall, leading to unemployment in my constituency halving since 2010.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I totally support what the hon. Lady is saying about importance of inequalities and health inequalities, but does she not recognise that two thirds of children in poverty have a working parent? People are trapped in low-paid work, and they are still poor, and she knows from her time on the Health and Social Care Committee that poverty is the biggest driver of ill health and health inequalities.

[Helen Whately]

I recognise that there is poverty in working families, but I do not agree with her use of the word “trapped”. It is important to ensure that people are in work, because that is the best way out of poverty, and then to ensure that we support people to raise their earnings. One way of doing that is through the support available through the jobcentre when people resume universal credit, which now tends to help people to move up and earn more money, and the other is by looking at the wider economy. As the hon. Lady will know, the minimum wage has risen and is rising, but we are also seeing wages rising independent of the minimum wage as a result of a more productive economy. What is actually key to a better level of wellbeing and fewer people being in poverty is having more people in work, which is the case, and a more productive economy, which means that people earn more. We can achieve that through driving up skills and technology, increasing exports and a swath of other things that would take me into a whole other conversation.

Oral Answers to Questions

Philippa Whitford Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Mr Speaker]

We thank the Chancellor for his views, which have been set out in considerable detail. The right hon. Gentleman cannot be accused of excluding any consideration that might, at any time, to any degree, be judged material.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Last year, NHS England was given £337 million to prepare for winter pressures, but the Scottish Government received only £8.4 million rather than the expected £32 million. The Secretary of State for Health and Social Care has claimed that Scotland will get £2 billion from this recent uplift. When we will know the real figure?

[Mr Hammond]

I can give it to the hon. Lady now, with a brevity you will be proud of, Mr Speaker. It is £2.27 billion in 2023-24.

Treasury Spending: Grants to Devolved Institutions

Philippa Whitford Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Patrick Grady]

I was watching the parliamentary private secretary passing notes around the back of the Chamber earlier, so I will take no lessons on internal group communications from the hon. Gentleman.

I have spoken in estimates day debates before and been called out of order for daring to actually discuss the estimates, so it is very helpful indeed to be able to have this discussion on Government spending. The reason that we have these debates is that the SNP questioned the estimates process in the context of the English votes for English laws process. We were told by the then Leader of the House, who is now the Transport Secretary, that if we wanted to have a say and a vote on spending as it affected Scotland, the estimates process was the way to do so. As we have been so ably encouraged by Conservative Members to take that opportunity this evening, I am sure that they will look forward to that happening at 7 o’clock and in the time that follows.

In summing up, it would be only fair to address the points that have been raised by Conservative Members. The hon. Member for Angus (Kirstene Hair) was interested in health and in the Barnett consequentials that will allegedly come as a result of the £20 billion increase in expenditure for the health service. It is great to know that they are coming, and the Scottish Government have consistently said in successive manifestos that they will pass on all the Barnett consequentials that they receive for health. The question is: where is the funding coming from? It was supposed to be coming from a Brexit dividend, but it now appears that it will come from increased taxation or perhaps from cuts to other Departments. However, if other Departments are cut to fund health spending, there will be cuts to the Barnett consequentials as well.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

To give the House an example, the NHS in England got £337 million for winter pressures last year, but what finally made it over the border was not the expected £32 million but £8.4 million, for exactly that reason.

[Patrick Grady]

Exactly. I do not know how many Scottish Tories took part in the health estimates debate last night, but I know for a fact that my hon. Friend the Member for Central Ayrshire (Dr Whitford) did so. Again, we will take no lessons on attendance in this Chamber.

I say to the hon. Member for Moray (Douglas Ross) that if he is so keen to debate the Scottish national health service, perhaps he should go back to where he came from: the Scottish Parliament, which makes the decisions about health. And if he is concerned about the payroll vote, he might want to take note of the fact that the current Prime Minister has the largest Government since 1979. I will take no lessons on bloated Government from Members on the other side of the House.

Oral Answers to Questions

Philippa Whitford Excerpts

Tuesday 16th January 2018 Commons Chamber

[Mr Hammond]

As my hon. Friend knows, the Government are committed to introducing a fair funding formula, and my right hon. Friend, the Secretary of State, has committed to move forward with that programme this year.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

T9. Yesterday saw the successful Second Reading of the Space Industry Bill, which could see Prestwick in my constituency become the UK’s first spaceport, but the Ayrshire growth deal is central to ensuring the widest economic impact from that development. The three local authorities and the Scottish Government are backing it, so will the Chancellor now commit to the Ayrshire growth deal?

[Elizabeth Truss]

I can assure the hon. Lady that I am in regular discussions with the Secretary of State for Scotland about the growth deals across Scotland. We have already committed to a number of growth deals and are certainly looking at further ones.

Insurance and Genetic Conditions

Philippa Whitford Excerpts

Monday 8th January 2018 Commons Chamber

[Gavin Newlands]

I thank the hon. Gentleman for his intervention, and I wholeheartedly agree with him. I will come on to discuss the particular review relating to Huntington’s, but I totally agree with him.

The reasons cited by survey respondents for not being able to access insurance included affordability, lack of understanding of the condition and the length of time the process takes to complete. Insurance policies by their very nature are designed to assess the level of risk before they choose to insure someone. We all know and accept that. If someone has previously crashed their car or had a bad credit rating, the chances are that they will either be denied insurance or face paying higher premiums for accessing insurance. It has always been thus. However, we should not equate having a bad credit rating to having a certain health condition, but that is exactly what is happening at the moment. Individuals with certain health conditions are experiencing great challenges to be able to access affordable insurance.

Genetic testing will be one of the ways in which insurance companies try to determine whether someone is destined to develop Huntington’s.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Does my hon. Friend feel that we will require legislation? Here, people with Huntington’s chorea are picked out because of a family history, but as we move into the era of genomics, if we allow insurance companies to force Huntington’s people to take genetics tests, we could all be forced to take genomic tests to see our risk of heart attack, cancer and so on. We need to deal with this now.

[Gavin Newlands]

I wholeheartedly agree with my hon. Friend. This is only the tip of the iceberg. We will have to come back to the issue under discussion and address the much wider issue in years to come.

Insurance companies believe that information derived from genetic testing is of relevance to assessing risks, and they argue that it provides

“a reliable indication of increased susceptibility to medical conditions which require expensive care.”

However, individuals who face the brunt of these tests and are either denied insurance or face ridiculously high premiums believe that they are being discriminated against.

An individual with a positive predictive genetic test for Huntington’s will find it extremely difficult to receive insurance, and I have received numerous emails from people throughout the UK sharing their experience of trying to secure insurance. Indeed, one contributor to the Huntington’s Disease Association Facebook page stated that they had tested negative but were still quoted over the odds because they had been tested.

Those obstacles also affect the family members of those with Huntington’s. Another sad aspect of the disease is that it is hereditary, so it impacts on entire families over generations. People with HD often have children before developing symptoms of the disease. If someone carries the defective HD gene, each child they have has a 50% chance of having Huntington’s.

An individual with a diagnosis of Huntington’s is not ordinarily able to obtain life, critical illness or income protection insurance, so families are unable to protect themselves from the future financial impact of this horrible disease. Not being able to access insurance compounds the huge negative economic impact of the disease. Those with HD almost always have to give up their employment, as do many of their family members, who have to act as carers for their loved ones. They also incur greater expenses arising from the health condition and many have to live on benefits—something that is proving impossible due to Tory austerity. If people are lucky enough to find insurance, they are very unlikely to be able to afford it, given the impact I have just described.

One of the emails I spoke of earlier came from a family who have struggled to access basic holiday insurance. The Kitching family have two young children, one of whom has a rare genetic condition. Before their son was born, the family had no problem acquiring insurance and were able to cherry-pick the insurer they used. These days, it is a very different story. Last summer, they had to navigate numerous hurdles and obstacles, including spending nearly eight hours on the phone, to finally secure a basic travel insurance policy. Despite their best efforts, the Kitchings’ insurance bill increased by 900%, which is surely beyond what any of us would deem acceptable. Unsurprisingly, for a number of reasons, the Kitchings did not have a wide selection of providers to choose from. Not only were they met with a brick wall and a refusal to even discuss the possibility of insuring them, but they found that many companies lacked the necessary basic knowledge to assess the risks posed by certain health conditions.

Those were the obstacles the Kitchings had to navigate to go on a simple family holiday to France. I am sure that hon. Members can only begin to imagine what that family and the many others like them would have to go through if they wanted to acquire life insurance.

The experience of the Kitchings is not unique. According to Genetic Alliance UK, a national charity working to improve the lives of patients and families affected by all types of genetic conditions, 59% of people who responded to its 2017 survey said that they decided to change or cancel their holiday plans altogether because they would not be able to access basic holiday insurance. The Kitchings believe that the current system lacks any transparency and that greater clarity is required for them and families like them. They want the system to be much more closely regulated to ensure that individuals and families are not discriminated against by insurance companies because they lack the necessary medical knowledge to understand genetic conditions such as Huntington’s.

Insurance companies recognise to some degree that individuals and families experience financial distress when trying to access the correct level of insurance. The UK Government and the Association of British Insurers therefore believe that the relationship between medical data and insurance underwriting should be proportionate and based on sound evidence. However, their definition of proportionate is, to say the least, at odds with what the families affected would consider to be fair and affordable.

There are several reasons why many individuals are reluctant to take a genetic test, such as the financial black hole that can be caused by restricted access to affordable insurance or not wanting to live their lives under the cloud of diagnosis. According to Genetic Alliance UK, less than one in five people at risk of Huntington’s disease choose to have the predictive genetic test. To try to combat that, the concordat with insurance companies who are members of the ABI states that insurers will not seek the results of genetic testing for insurance with a value less than £500,000. In practice, that would mean that individuals and families had a far greater chance of accessing affordable insurance to go on holiday, buy a car or purchase a house.

In reality, the moratorium provides little protection people for people with Huntington’s or similar neurological conditions because instead of the insurance companies mandating that someone complete a genetic test, they will get around it by demanding that any individual hoping to secure insurance provides other forms of information, including a full family history. As I mentioned, each child of a Huntington’s disease sufferer has a 50% chance of inheriting the condition. Therefore, the information that is gathered by bypassing the genetic testing can lead to an individual’s access to affordable insurance being restricted. As such, the current moratorium does not provide enough protection for individuals and makes securing insurance a near-impossible task to accomplish.

The SHA believes that the business model that many insurance companies use to calculate risk is limited and does not collect all the genetic information available to calculate more precisely an individual’s health conditions. In other words, if we must use genetics, let us use them properly. This point is reinforced by an email that I received from Trish Dainton, whose husband sadly passed away from Huntington’s. She highlighted the unfairness of a system that can increase an individual’s premiums to ridiculously high levels on the assumption that they might have the HD gene but might not start developing the symptoms for 40-plus years.

It is no surprise, then, that so many people are avoiding being tested for HD, given that it could force them to pay a lifetime of sky-high insurance premiums. In addition, according to the 2017 survey by Genetic Alliance UK, 50% of respondents have avoided applying for insurance altogether, stating that concerns over premiums would prohibit them from accessing insurance. It should concern us all—certainly the Government—that too many people do not feel they can access any form of insurance. After hearing the stories from those who have lived with Huntington’s disease and how it affects their everyday lives, I think that it is clear that the insurance companies and the Government have to do a lot more to understand conditions such as HD.

In preparing for tonight’s debate, I have been sent numerous emails from individuals affected who say that most people do not truly understand the disease. The insurance companies state that the development of genomics is crucial to helping to guide the industry, as mentioned by my hon. Friend the Member for Central Ayrshire (Dr Whitford), but the system should be guided by medical knowledge and not by what a pre-programmed computer screen tells the operator to do.

As I have said, it has never been easier for most of us to quickly secure the insurance we need, and the insurance free market caters for the vast majority. For those with HD, however, shopping around means not a 30-second comparison website search but hours and hours of phone calls and being asked probing questions by someone who does not actually understand the condition. The Genetic Alliance UK report confirmed that the length of the process is one of the common complaints made by people and that there is a real desire for more action to be taken to reduce the time it takes to try to acquire insurance. That seems to be one way the insurance companies, whether at the Government’s behest or voluntarily, could work with stakeholders to design a process that prevents them from having to repeat the same information over and again.

If we do not develop a system that better understands neurological conditions, we risk creating a genetic underclass of people excluded from accessing affordable insurance due to misleading and inaccurate information gathered by insurance companies. The UK Government have a key role in changing this system to help make life that bit easier for those who have HD. The insurance companies self-regulate who they will and will not provide coverage to. That is not fair, and it is not good enough.

The current arrangements for insuring people who have or might have HD have not been reviewed since 2012, despite the fact that they should have been reviewed in 2014 and again in 2016. Indeed, the UK is out of step internationally in the way it treats those with genetic conditions. In 2000, the UK became the first nation to approve the commercial use of gene technology to allow insurers to refuse insurance cover or to push up premiums for those born with genes that could lead to fatal conditions later in life. Furthermore, unlike many other developed countries, such as Canada, the USA, Sweden, Luxembourg, Belgium, Denmark and the Netherlands, the UK does not have specific legislation that prevents genetic discrimination. Let us be clear: despite the fact that equalities legislation supposedly provides this protection, those affected believe that they are being discriminated against by the insurance companies.

The Government have a duty to respond to the thousands of people across the UK who have been waiting for action to be taken against the insurance companies. There is plenty that can be done on this issue, but I would start with the HD insurance review that is now nearly four years overdue. The Government could get tougher on the insurance companies, offer to help with a Government-backed insurance scheme for those with Huntington’s or put a realistic cap on premiums. I am not asking the Minister to commit to any specific actions this evening beyond urging him to confirm a new review and requesting a meeting with me, the Scottish Huntington’s Association and others so that he can hear at first hand of the very real and systemic problems.

In conclusion, I cannot—I am sure that none of us can—begin to understand how tough life is for those suffering from Huntington’s and the huge impact it has on the families caring for them. These families are not asking to change the world; all they want is to be able to access affordable insurance to allow them to go on holiday, buy a house, purchase that new car and protect them from the worst of the financial impact resulting from the condition. In short, they want to live their lives as best they can. We, as a society, should be doing all that we can to make life easier for those with genetic conditions, not putting further barriers in their way. I hope that the Minister can join me, and thousands of families up and down the country, in helping to create a fairer, more accessible and more affordable system for the individuals and their families who are currently in this invidious position.

[The Economic Secretary to the Treasury (Stephen Barclay)]

Let me begin by thanking the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) for securing this important debate. As he set out so eloquently, rare genetic conditions such as Huntingdon’s disease have a significant impact on the people and families who are affected by them. The Government are focusing on ensuring that the insurance industry functions well for everyone, including those with genetic conditions. Let me deal with the hon. Gentleman’s final point first by saying that I am of course always happy to meet him to discuss more fully the points that he has aired tonight.

I have listened to what the hon. Gentleman has said, and also to wider representations. Broadly speaking, I can identify three key issues. First, people with rare genetic conditions such as Huntington’s disease can find it harder to access some insurance products. Secondly, when they find an insurance product, it is sometimes not affordable. Thirdly, people with rare genetic conditions are often discouraged from having a predictive genetic test for fear that it would make it harder or more expensive for them to obtain insurance in the future.

It is clear that factors such as age, postcode, occupation and health can all have an impact on the availability, pricing and terms of insurance policies. For example, a pre-existing medical condition, such as Huntington’s disease, can be an indicator that someone is more likely to make a claim. For that reason, insurers will use medical history as a rating factor for some products, which may mean that someone with a genetic condition has to pay a higher premium than someone without such a condition. We must acknowledge, however, that the respective capabilities of insurers to assess risk legitimately, and to price their products accordingly, are a key element on which they compete. I think the hon. Gentleman recognised that at the outset when he said that it was often not easy for insurers to strike the right note in this context.

It would not be right for the Government to intervene in individual firms’ pricing decisions in a way that would damage the competition on which the compulsory competitive tendering relies. I am sure the hon. Gentleman agrees that effective competition is the best way to ensure that the insurance market functions well. While, as he has made clear, it can be harder for people to find cover for rare genetic conditions, it is important to note that there is nothing to suggest widespread exclusion from the insurance market. Furthermore, representatives of the insurance industry have given assurances that, as with all pre-existing medical conditions, insurers will try to offer insurance coverage where they can, based on evidence and backed by medical research.

The Government have made it clear that they consider it important for everyone to have access to suitable insurance. To that end, in 2014 a landmark agreement was established by the Government and entered into with the insurance sector, which led to the expansion of the British Insurance Brokers’ Association’s Find a Broker service. The service was set up specifically to help those who were struggling to find insurance, and last year it was used by more than half a million people.

The Financial Conduct Authority, as the organisation responsible for regulating the insurance industry, has rules requiring firms to treat all customers fairly. The FCA also frequently monitors the sector to track and tackle discriminative practices. It recently closed a consultation seeking feedback from people with pre-existing medical conditions, including cancer. As I am sure many Members will know, people with cancer may find it particularly difficult to obtain insurance cover. The FCA plans to announce its next steps early this year.

It is vital that families living with rare genetic conditions, such as Huntington’s disease, are not discouraged from taking predictive genetic tests for fear of subsequently having problems with getting insurance. That was one of the hon. Gentleman’s key concerns. To that end, in 2014 we extended the concordat and moratorium on genetics and insurance, an agreement between the Association of British Insurers, representing more than 90% of the insurance market, and the Government. That agreement gives clarity and confidence to those taking predictive genetic tests on how insurers treat genetic information. Under the rules of that scheme, insurers are not allowed to ask anyone for the result of a predictive genetic test for any condition, including Huntington’s disease, when they apply for life insurance with a value of less than £500,000. It is important to note that more than 95% of life insurance policies sold in the UK would fall within the protection of that £500,000 cap. That gives confidence to those who wish to take a predictive genetic test, because they can be sure that the results will not negatively influence the price or availability of life insurance.

[Dr Whitford]

Does the Minister not recognise the fact that people end up in the same situation that we had with HIV testing, whereby simply by being tested for HIV—not asked for the results—they were classed as high risk? They had exactly the same issues with mortgages and insurance.

[Stephen Barclay]

The hon. Lady’s point would be a legitimate one if that were indeed the case. However, that is not what the evidence shows. As I have just said, 95% of life insurance policies fall within the cap. Also, we should bear it in mind that the genetic test is often prayed in aid because, although there is a 50% chance of a condition materialising, there is also a 50% chance of it not materialising. The genetic test is therefore often prayed in aid to reduce the risk, rather than having a solely negative use. I think the situation is therefore more nuanced than the hon. Lady’s intervention suggests.

The ABI also provided a report to the Department of Health on its members’ compliance with the concordat and moratorium. I understand that in the last year there was only one complaint, which was subsequently resolved. However, if the hon. Gentleman or any other Member has further evidence of concerns, I would be happy to follow up on any evidence that might be forthcoming.

As a final point, I would like to mention that the Government are also committed to a wider financial inclusion agenda. This will ensure that everyone has access to suitable financial services products. As part of this agenda, we will soon be launching the financial inclusion policy forum. This initiative will address the problem of financial exclusion by driving better co-ordination and engagement across Government and the financial services sector. It has received unanimous support, including from the Financial Inclusion Commission and the Money Advice Trust, and it will be chaired by me and the Minister for Pensions and Financial Inclusion, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman). I hope that the meeting between me and the hon. Member for Paisley and Renfrewshire North following this debate will enable us to—

Ayrshire Growth Deal

Philippa Whitford Excerpts

Thursday 19th January 2017 Commons Chamber

[Patricia Gibson]

The figures my hon. Friend quotes paint their own picture of the challenges faced by the entire county of Ayrshire. I am sure the Minister was listening keenly and will take them on board.

For Ayrshire to truly reach its potential, it is essential to reduce inequalities across communities and give everyone a stake in Ayrshire’s growth. Therefore, inclusive growth is, and must be, an integral part of the Ayrshire growth deal business case. A successful economy must ensure that all the talents of our people are harnessed, which will help Ayrshire to be truly competitive and resilient to emerging technologies and challenges. We must work to ensure that Ayrshire folk are better connected to the economy, and have better and greater opportunities to prosper. I believe, and all MPs on the SNP Benches believe, that the Ayrshire growth deal provides a compelling route towards achieving that. We have so many resources and successes in Ayrshire to build upon, with our aerospace and space industry, life sciences and manufacturing.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

As well as the beauty that my hon. Friend has mentioned, we also have incredible potential. Even in my small part of Ayrshire, we have life sciences at one end and at the other an airport that not only was Scotland’s first passenger airport but has the potential to be the UK’s first spaceport, with its long runway, its clear weather and an air traffic control centre and aerospace cluster. We have the pieces of marble in the grass; we just need help to put them on top of each other.

[Patricia Gibson]

My hon. Friend has well articulated the importance of the spaceport to Ayrshire and the opportunities it would bring to build on that to spread and attract growth to Ayrshire.

In addition, we can enhance Ayrshire’s beautiful coast and capitalise on the considerable opportunities that Ayrshire’s harbours and ports provide. Indeed, proposed projects are well placed to feed into the delivery of national tourism strategies, such as marine tourism. This is an area in which there is great potential for growth in Ayrshire, but the infrastructure to make it possible is essential, alongside opportunities for the provision of land for the development of new housing.

I am particularly excited about the coastal regeneration of Ardrossan. Investment of about £22 million will deliver a transformation of the port as a regional transport interchange, serving south-west Scotland. Ardrossan is Scotland’s largest and busiest ferry terminal and is well placed to play a key role in delivering wider benefits to communities and businesses across Ayrshire. The prize is a port that will serve and promote a range of opportunities—cruising, leisure, marine tourism, waterfront residential—as well as improving lifeline services to the Isle of Arran, which I believe will continue to be served by the port of Ardrossan.

My hon. Friend the Member for Central Ayrshire (Dr Whitford) mentioned the exciting project for the establishment of a spaceport at Prestwick airport. Estimates from the Spaceport UK report of 2014 show that a spaceport has the potential cumulatively to realise a baseline of £320 million of additional economic activity.

The vision is also for Ayrshire to be recognised as a centre of excellence for digital skills. This can be done by developing—indeed transforming—the use of digital technology in schools, weaving technology through the teaching and learning process. Ayrshire’s Connected Classroom initiative is a recognition that digital is a key enabler of science, technology, engineering and mathematics —the so-called STEM subjects—and aims to ensure that our young people are well prepared for our increasingly digital world. Such a digitally savvy generation will support the exciting potential of Ayrshire’s space industry and aerospace innovation district.

--- Later in debate ---

[Patricia Gibson]

Yes, indeed.

Perhaps it is because of the presence of all the businesses that might supply the gastronomic feast that we could put in front of you in Ayrshire, Madam Deputy Speaker, that the town of Dalry, in my constituency, houses a very well-respected Michelin-starred restaurant, which I recommend to you.

Ultimately, the Ayrshire growth deal is about people. It is about removing barriers to employment, upskilling our workforce to address the issue of low pay, and promoting apprenticeships.

[Dr Whitford]

I am sure my hon. Friend agrees that we have an additional strength. The three separate campuses belonging to Ayrshire College work closely with our local employers in the aerospace and food and drink sectors to ensure that the young people training in those sectors—along with other young people from the senior sections of our schools—have access to the same equipment and materials that they would use professionally. It is a great relationship: the college is delivering the skills that local industry needs.

[Patricia Gibson]

Absolutely. That is an excellent point. I think that the other colleges in the United Kingdom should note the links between Ayrshire College and local employers. That delivery to young people of the skills that employers say they need and that are in short supply is second to none. The college has won many accolades—far too many for me to mention to the Minister today—for its work in this sphere, and in several others as well.

--- Later in debate ---

[Michael Ellis]

The United Kingdom Government are working with the Scottish Government in myriad different ways, and I could give many examples of positive developments in those areas. For our part, in addition to working to deliver the seven city deals across Scotland, we will look at this proposal in the context of wider UK Government policy, including the industrial strategy and the national productivity investment fund.

[Dr Philippa Whitford]

That leads exactly to my point. In the meeting that I secured between the four of us and the Secretary of State for Business, Energy and Industrial Strategy, the Secretary of State seemed particularly interested in the deal, as a non-city deal. We have three large towns but no city in Ayrshire, and there is therefore potential to learn from projects and ideas that could be shared elsewhere. Ayrshire is way up the left-hand end of the gross value added scale. All the cities that have deals are starting from a better position than Ayrshire. We have pockets of absolute rural and urban deprivation.

[Michael Ellis]

We want to look at all these issues, and I have said that the Ayrshire growth deal is being looked at in the context of UK Government policy, including the industrial strategy and the national productivity investment fund. The Secretary of State for Scotland went to Ayrshire just a few months ago—in June 2016, I think—and my noble Friend Lord Dunlop is due to go. The industrial strategy is due to be published shortly, after which the United Kingdom Government will want to consider carefully how it sits alongside the asks being made by the partners in Ayrshire, and by others, so that we can help to deliver the economic benefits that such proposals represent.

The hon. Member for North Ayrshire and Arran spoke eloquently about the area she has the honour to represent. We are due to publish the industrial strategy shortly, and as the United Kingdom Government we will be considering carefully how it sits alongside the asks being made by others, including in Ayrshire. Every consideration will be given to this matter so that we can help to deliver the economic benefits that such proposals represent.

Question put and agreed to.

Double Taxation Treaties (Developing Countries) Bill

Philippa Whitford Excerpts

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

[Roger Mullin]

If memory serves me correctly—I go back much further than 1955—the treaty with Malawi does not include goods such as televisions, because they did not even exist in Malawi in those times. The treaty is so out of date that it does not capture the nature of modern commerce. The UK Government have been making moves in recent times to renegotiate the treaty, and that is very welcome, but it remains the fact that there is still a place for that 1955 treaty today, and it is by no means the only such treaty.

Research has been undertaken by, for example, ActionAid, and I compliment it on the campaigns it has been running and thank it for the assistance it has given me in constructing this small Bill. That research looked at more than 500 double taxation treaties throughout the world and suggests that despite all the good work the UK Government have done over the last 10 years or so, the United Kingdom and Italy still have more restrictive treaties than any other country—around 13 are still in place.

What are taxation treaties about? They are about how much tax should be paid. Some restrictive treaties actually prevent Governments from imposing taxes—say, some types of corporation tax—that they may wish to impose, so they remove democratic responsibility in terms of countries putting together their tax.

The second thing taxation treaties typically deal with is where the tax is actually paid. In a bilateral relationship, the treaty often favours the country where the company is headquartered. Why are companies in advanced western societies—not just the UK, but the US, Germany, Italy and the like—engaged with developing countries?

I do not know of any international corporation that wants to move its headquarters from London, Edinburgh, New York or Berlin to site them in some poor country in central Africa, but they do want to operate there. Why is that? The typical type of operation is to exploit the country’s natural resources—minerals and the like. In another country I am very familiar with—Namibia—there is diamond mining, which is exploited by some large Australian corporations, among others, and uranium mining. Other types of natural resources are found in the Benguela current, which has some of richest fishery grounds in the world.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I have had an association with Zambia through fundraising, and on a trip there I became aware of almost a new form of colonialism. There are many Chinese companies where not only the leaders but the entire workforce are Chinese, so copper is being mined, the profit is being taken away and there are no jobs at all going into the local economy.

[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.